Neilson v Overseas Project Corporation of Victoria Ltd & Anor

[2005] HCATrans 194

[2005] HCATrans 194

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 THURSDAY, 7 APRIL 2005, AT 10.05 AM

(Continued from 6/4/05)

Copyright in the High Court of Australia

__________________

GLEESON CJ:   Yes, Dr Griffith.

MR GRIFFITH:   Your Honours, my learned friend, on the transcript, page 44, referred to the concept of fairness and justice as expressions of Chinese law.  With respect, that is not so, your Honour.  That is an expression which was sourced from Mr Staude, counsel for the plaintiffs at the trial.  One picks that up in the second paragraph on page 72 of the appeal book.  It is not an expression of Chinese law, your Honour.  It was put – in fact ‑ ‑ ‑

KIRBY J:   I am not hearing you, Dr Griffith.  You will have to speak up.

MR GRIFFITH:   I am sorry, your Honour.  Your Honours, it is not an expression of Chinese law.  The transcript makes clear that it is an expression sourced from counsel in the – all the witness said is “Yes”.  So one cannot say that that is a received expression of Chinese law.

KIRBY J:   Can I just get one matter out of the way?  The reference in Article 146 is to Australian law, and, though the common law of tort is the same throughout Australia, procedural laws differ from State to State.

MR GRIFFITH:   Yes.

KIRBY J:   Can we take it that there is no relevant difference, relevant to this case, between the law of Victoria and the law of Western Australia that would have affected the content of Australian law in Article 146, if it is appropriate to have regard to Australian local law in that respect?

MR GRIFFITH:   At the relevant time, your Honour?  Your Honour, we say, yes.  The limitation period is now three years in Victoria.

KIRBY J:   But, at the relevant time of the proceedings before Justice McKechnie, there was no relevant difference?

MR GRIFFITH:   That is our understanding, your Honour.

KIRBY J:   Very well.  And you do not take any point that I have seen that the reference in Article 146 to Australian law includes a reference to Western Australian law insofar as that is picked up?

MR GRIFFITH:   Your Honour, that point has not been taken.  The matter has been conducted at a higher level of argument that Article 146 does not ‑ ‑ ‑

KIRBY J:   That is right, but we have to get down into the engine room and deal with the particular case.

MR GRIFFITH:   We do, your Honour.  It is never attractive to take a federal clause issue with respect to the operation of an international law aspect, and we have not taken it.  Your Honours, we do concur that the issue here is what is meant by the lex loci and we say it is for this Court to impose the characterisation, although we say that characterisation, until the Court says otherwise, should be regarded as implicit in the Zhang decision. 

We say the choice before the Court is whether or not it is to be the result which the Court discerns would be reached by the lex loci in this particular case, picking up the possibility of renvoi, or its hypothetical disposition, as it has been put.  Our position is that the approach, as reflected in the Australian Law Reform Commission recommendation, that of the United Kingdom Acts, and we say that which is now reflected in Rome II and also in the restatement, second, your Honours, is the correct approach, namely, one should have regard to the law of the lex loci without regard to the choice of law issues.

KIRBY J:   But if you are aiming to, as it were, set yourself into the position of what would actually happen in the country of the doing of the wrong, then to excise Article 146 just does not seem to be doing what they would do in China in a case like this.  They are not going to ignore Article 146.  Indeed, one suggestion that I have read in an article on this case by Mr Yezerski is that Article 146 is there for the very particular reason of promoting in China tourism and investment by foreigners.

MR GRIFFITH:   Well, your Honours, that must be the case but there is emerging jurisprudence from China with respect to the issue of Chapter VIII of the General Principles, including with respect to the issue of Article 146 and including with the issue of the recognition of conventional choice of law principles and lex loci and including with respect by reason of opinions of the Supreme Court, your Honours, on the very meaning of these expressions.  To that regard we would wish to tender to the Court, your Honour - we have not a very good print of it - an article by Mo Zhang published in 2002 out of the Journal of International Comparative Law

Review, British Columbia in 2002.  Could I take your Honours to that article.

HAYNE J:   Now, what are we doing, Dr Griffith?  Are we receiving evidence of foreign law not tendered in the court below?  What are we doing?

MR GRIFFITH:   No, your Honour, it is an article with respect to the position just as much as the Yezerski article that his Honour Justice Kirby referred to. 

HAYNE J:   Well, that is not immediately apparent to me by any means, Dr Griffith.  You say that there is emerging jurisprudence in China, you say then let us look at this article.  That seems to me on its face to be nothing but an undisguised attempt to enlarge the factual record.

MR GRIFFITH:   Your Honours, can I move back one step then and say there is an issue that has arisen as to whether or not the concept of choice of law is something embraced by the Chinese law, particularly the General Principles, particularly Chapter VIII.

MR WALKER:   Your Honours, I do object. 

KIRBY J:   Yes, but can I say in Mr Yezerski’s article, he has citations of various experts, Mo Zhang, concerning the way the Chinese deal with Federations and it seems to me if it is opened up ‑ ‑ ‑

MR WALKER:   No, with respect, your Honour, any more than if I cite the authority of this Court in a conflicts case.  Where there is evidence dealt with and facts found in that conflicts case, I cannot rely upon that as evidence about the foreign law.  I can and, with the article to which your Honour has referred, I do rely only for the discussion of our legal principles.  Incidental findings of fact that one sees in a judgment do not become evidence or evidentiary material before a court about foreign law, neither do ‑ ‑ ‑

KIRBY J:   Yes, but this is in a very well-known international journal that you could have picked up if you had wanted to and read it.

MR WALKER:   Your Honour, this Court is dealing with an appeal under section 73. This is evidence which was not, between the parties, the subject of tested testimony by the expert. We do object. This is the kind of issue which could have been but was not - the silences at trial are as important as the speech at trial concerning the allegations and proof of foreign law.

GLEESON CJ:   Mr Walker, we will note your objection, and we can deal with it in our reasons for judgment if we ever manage to read it.

MR GRIFFITH:   Your Honours, can I make it clear what ‑ ‑ ‑

GLEESON CJ:   This is an article by Mo Zhang, is that right?

MR GRIFFITH:   Yes, your Honour.

KIRBY J:   And it is the article that is at footnote 32, I think, in Mr Yezerski’s article.

MR GRIFFITH:   Yes, your Honour.  Your Honours, the way this has arisen is that the expert evidence of Mr Liu at pages 90 to 91 was this was a choice of law provision.  Now, we say, your Honours, that is supported both by a construction of the provision, which your Honour the Chief Justice observed might have been written by an English common lawyer as a choice of law provision with a flexible exception and also a reciprocity clause.  It is quite a sophisticated section.  On its plain meaning, your Honours, our submission is that is what it is.  It is a choice of law provision with a flexible exception with a reciprocity provision added.

Now, your Honours, that is the evidence of Mr Liu at the Court book pages 90 to 91.  We say the starting point can be that that evidence of the expert should be regarded as received as such, and by reference to the principle enunciated by Justice Sheller in James Hardie v Hall, that can be regarded as evidence that should be received unless there is some very credible reason for the Court to reject it; it is not contradicted.

With respect to that issue, we say just as much as it is appropriate for the Court to be informed by reference to articles written after the Full Court judgment which refer to the issues of characterisation and application of these provisions in the context of discussion of renvoi, it is appropriate for the Court to follow through to the footnotes.

The other aspect is the issue which I mentioned, which need not be put as a matter of proof with this particular situation, but it describes the position of Chinese law of the effect of the rulings, opinions, of the Supreme People’s Court and its position with respect to the authoritative nature of such statements.  Your Honours, at the end of the day, we are content for the text to speak for itself, as supported by Mr Liu’s expert evidence.  This article is tendered on that basis.

GUMMOW J:   You seem to be departing from your written submissions, which were that, whatever the situation was in China, we excise as part of our rule what we call any choice of law element in their law.

MR GRIFFITH:   We maintain that, your Honour.  What I am doing is characterising this as a choice of law provision.  That is not intended to be a departure, but to say this is a provision such as the one that is excised.

GUMMOW J:   Your opponent does not disagree with that, does he?  He says choice of law provision, but so what?

MR GRIFFITH:   We understood his position was, your Honour, it should be regarded as a choice of law provision which is regarded as part of the law to be applied within the ambit of the reference to the lex loci within the Zhang principle.

GUMMOW J:   Yes, that is right.

MR GRIFFITH:   We say it is not.  That is our difference.  We say one applies the restriction, which is reflected in the progressive evolution of the way between various states and groups of states the issue of regard to lex loci is considered.  Your Honours, whilst I mention that, could I refer to your Honour Justice Gummow’s reference to the footnote in the – I do not know to describe it, your Honour, the Scoles and others publication, page 10, where your Honour did refer to the footnote reference to the acceptance of single renvoi in some European and also Japanese jurisdictions.

Your Honours, with respect, that is a dated position, because the effect now of the Rome II recommendations, which we have set out on footnote 15 on page 6 of our written submissions, is that the member states of the European Union are moving to Rome II, where single renvoi is rejected, in effect.  One would see in the form of Article 20, which appears two thirds of the way down that footnote, an expression of the rule effectively in the same ‑ ‑ ‑

GUMMOW J:   Yes, but this is some sort of European glacial effort, is it not?

MR GRIFFITH:   One could say immediate progress.  I do not know whether it is glacial, your Honour, but it is the trend.  We say it is indicative that the move throughout Europe is – there will only be Switzerland and Japan that might be regarded as surviving that footnote.

KIRBY J:   Dr Griffith, all of this is being done as the law of the United Kingdom has changed by or under legislation.

MR GRIFFITH:   Yes, your Honour.

KIRBY J:   We have the report of the Australian Law Reform Commission and why no action has been taken on it is not revealed, but the fact is that it has not been.  This Court could still pick it up and have regard to the reasoning behind it as a basis for the common law, but the fact is that we have not moved in legislation, therefore, we have to go back to the basic principle.  And if you go back to the basic principle, at least, as I understand it in Zhang, it was to say, “You try to do exactly what would have been done in the place of the wrong”.  If you do that, how, in principle, can you excise the choice of law rule, because that is part of the law?

MR GRIFFITH:   May I answer your Honour by going a little bit further back to basic principle.  Could we first take your Honours to the relevant parts of the preliminary report of the Law Commission Working Paper No 87, which we have distributed to your Honours an extract, particularly paragraph 2.18 on page 18 of that extract.  We note who were the members of this Commission, your Honours, on the earlier part of the extract; indeed, the page before and, your Honour, there the report states:

It is clear that the reference to the lex loci delicti in the second limb of the rule in Phillips v Eyre is a reference only to the internal rules of that law, and not to its rules of private international law.  There is therefore no question of renvoi in a tort case.

Now, your Honours, if that be right, it would mean it was only the effect of Zhang which gave a foothold for changing what had been the position.

KIRBY J:   I do not understand the reason of policy.  What is the reason of policy, why tort is somehow put into a different category and you just take little bits of the law of the place of the wrong, not the whole of the law of the place of the wrong.

MR GRIFFITH:   The effect of Phillips there, of course, your Honour, with the double actionability rule is that you basically applied the lex fori as long as the matter was actionable in the lex loci.

GUMMOW J:   I would have thought footnote 54 was pretty slim actually.  I have read McElroy v McAllister.

MR GRIFFITH:   Your Honour, we all know about Lord Russell, yes.

GUMMOW J:   We have read McElroy v McAllister from time to time.  There was no deep discussion in that case, and there is certainly not much by Lord Justice Bridge, if you can get hold of a transcript.  It is one of those Scientology cases.

MR GRIFFITH:   Yes.

GUMMOW J:   So what is the weight of it all?

MR GRIFFITH:   Your Honour, paragraph 7 then makes the recommendation, paragraph 7.43 part 7 which is on the next page, which is recommendation of maintenance of the position.  Your Honours will see from the final report, which we know now has been enacted, which is the further paper that we have distributed to your Honour, after referring to the Consultation Paper in paragraph 3.46 it opts for this choice, your Honour, on the basis that renvoi would create uncertainty and would not accord with the reasonable expectations of the parties.

GUMMOW J:   They are the two reasons, are they not?

KIRBY J:   I just have difficulty understanding that.  If the reasonable expectation of the parties – take Mrs Neilson - is that her case would be dealt with according to what would have happened had she sued in China, and if the law of China picks up in a matter involving foreign nationals for reasons which may have very significant local and economic purposes of China, that you can deal with it under the law of those nationals, and if that is how it would have happened, if she had started in China, then the only real fear of renvoi is that you are going to go backwards and forwards.  But that is a completely false theory in practicality because you are finding out how the case would actually be dealt with in Wuhan, or wherever it is, when the accident occurred and that involves taking you to the law where they are nationals of those nationals.  I just do not see the problem.

MR GRIFFITH:   Your Honours, it does involve the issue of the exercise of a discretion which is proposed in a Chinese court ‑ ‑ ‑

KIRBY J:   That is true.

MR GRIFFITH:    ‑ ‑ ‑ by reference to its own applicable principles, with respect to that court exercising the jurisdiction, not with respect to a foreign court exercising a discretionary power on the basic issue of choice of law.

KIRBY J:   Yes, but the foreign court on this theory is stepping into the shoes of the Chinese judge and deciding what the particular case needs, or requires, or should result in.

MR GRIFFITH:   Your Honours, our basic starting point is to assert that there is no decision applying single renvoi in tort, so that for the Court to embrace that is ‑ ‑ ‑

GUMMOW J:   That is historically explicable in terms of Phillips v Eyre because of the two limbs.

MR GRIFFITH:   Exactly, your Honours, but the Court would be doing something ‑ ‑ ‑

HAYNE J:   In the end under Phillips v Eyre you apply the law of the forum only.

MR GRIFFITH:   Yes.  Your Honours, can I put to rest this issue ‑ ‑ ‑

GUMMOW J:   Well, is that not right?

MR GRIFFITH:   Yes, your Honour, the issue remains as I opened this morning as to what is meant by the reference to the lex fori and it is for this Court to determine it.  We are making submissions as to why we say the answer is the limited category that excludes the choice of law provision and we are seeking to persuade the Court as to why that should be now expanded.  We agree as tabula rasa or rosy table or whatever, your Honours, it has to be determined by the Court.  We have accepted that first up in our submissions.  It is open season on this.  Zhang did not decide it even – there is no point drawing the entrails of Zhang on it, your Honours, because we have the Court here to determine the matter without, we say, there being plain authority.

KIRBY J:   That is true but if we look at what was at the heart of Zhang, it was that you endeavour to decide in Australia what would have happened in the place of the wrong and if that involves taking the foreign law, you have to do that.  The problem I have is why you just pick up bits and pieces of the law of the place of the wrong instead of picking up the entirety of it, including a provision such as Article 146, which may well be for very particular local reasons.  You see, they have not until recently had a developed legal system in China, so a provision such as this with the enormous expansion of investment and foreigners coming there is a very sensible one from their point of view, at least at this stage of their development and they say “If you have two foreigners involved, really we don’t want to be involved because what we do may be contrary to their expectations and may be discouraging to tourism and investment, so we’ll leave it up to them, let them sort it out”.  What is so wrong with that in this case?

MR GRIFFITH:   Your Honours, we say that the principles are quite sophisticated law, drawn in 1986 or 1988, and they can be discerned to see to make mature provisions with respect to this position.  When one says what is the heart of Zhang, perhaps Zhang does not have a single heart, it perhaps has several ancillary hearts or repositories for pumps or the like of principle, your Honours.  Your Honour Justice Kirby asked at one point what is the best paragraph of Zhang.  We would refer your Honour to paragraph 75 which stipulates an absolute rule that has two aspects.  The first is that one should apply the lex loci by way of extension to foreign torts beyond Pfeiffer and, “despite the absence of the significant factor of federal considerations”, and the second aspect, your Honours, is that it “should be without the addition of any ‘flexible exception’.” 

Now, our position is that when looked at its essence, the submissions put against us, accepting that Voth is an authority of the Court which is not sought to be interfered with, accepting, your Honours, that one cannot put forward a flexible exception consistently with Zhang, nonetheless is seeking to introduce a capacity for flexibility and derogation for the certainty which was the touchstone for Zhang by reference to bringing in concepts of the issue of reference back…..My learned friend always referred in the two or three times he did, as compared with his written submissions, to the so‑called renvoi but we say, however so-called and as was frankly accepted in the written submissions, what is being advocated is a form of single renvoi.  Our submission is that one need only go to this case to see the uncertainties that it creates.  Now, to deal with your Honour’s question ‑ ‑ ‑

HAYNE J:   Why does it create uncertainties if a sufficient evidentiary base is provided?  What is the uncertainty to which you refer?

MR GRIFFITH:   Your Honours, I was going to talk about sufficient evidentiary base.  One problem is the difficulty in finding an evidentiary base.  It is difficult enough, one knows from the literature, to be clear what is the position with respect to the principle of renvoi, say, within the Australian Capital Territory.  With respect to foreign jurisdictions, it is almost an unanswerable question.

HAYNE J:   Why?

MR GRIFFITH:   Because, your Honours ‑ ‑ ‑

HAYNE J:   You are committed to going to an expert in any event because it is a matter of foreign law.  Why is it a difficult or unanswerable question to say to that expert, “What is the outcome that is going to occur if this particular proceeding or claim were submitted to the court of your country?”?

MR GRIFFITH:   Your Honours, one might need another expert.  In this case there was an expert, I should say, called by the defendant at considerable cost, something approaching $50,000, who was not proffered as an expert on renvoi because it was not the defendant’s case that there was an issue of renvoi.  There is the practical issue that one picks up for example from footnote 3 on page 250 of Sykes & Pryles that a survey of 40 American cases in which foreign law was pleaded revealed that 32 misapplied it.  That is just a study, your Honour ‑ ‑ ‑

KIRBY J:   I did not hear that, 32?

MR GRIFFITH:   Forty American cases in which foreign law was pleaded, 32 were misapplied.  There is a study of that, your Honour, from ‑ ‑ ‑

GUMMOW J:   That depends on who was making the study, I suppose.

MR GRIFFITH:   I know, your Honours, but ‑ ‑ ‑

KIRBY J:   You cannot decide a matter of high principle on the incompetence of a few judges.

MR GRIFFITH:   Your Honours, can we deal with issues of competency and then I will come back to your Honour’s question about what is the heart of Zhang.

KIRBY J:   Yes.

MR GRIFFITH:   Your Honours, in this matter the injury was caused in 1991, and we know that the injured person, Mrs Neilson, came back to Australia for three months or so, then went back and completed the two‑year contract in China.  There is absolutely nothing before the Court to indicate why she was not able to get advice when she was back in Australia or back in China as to ‑ ‑ ‑

KIRBY J:   This is water under the bridge.

MR GRIFFITH:   It is not, with respect.

KIRBY J:   She did not, and therefore we are dealing with the question of what would have happened if she had.

MR GRIFFITH:   Your Honours, two answers.  One is your Honour asking about reasonable expectations.  Secondly, our position in this case is that she had lost because, by reference to the applicable limitation period by the lex loci, she was out of time.

KIRBY J:   Yes, but there was a little footnote to that, and that is, “We’re very, very strict in China on statutes of limitation.  We’re very rigid, but we want all these foreigners coming up here with their gold, we want them coming as tourists, we want them coming as investors and therefore, we have this exception for them that if you have two nationals of the same place, they can go away and do it amongst themselves”.

MR GRIFFITH:   Your Honours, can we consider how Mrs ‑ ‑ ‑

KIRBY J:   And that is our law, that is what we are doing because we have an interest in their doing so.

MR GRIFFITH:   Your Honour, the effect of this accident happening in 1991 and being issued with proceedings in Western Australia 1997 is that it did not come on to trial until September 2002 after the decision of this Court in Zhang.  Now, Mrs Nielson must take the consequences of that.  It cannot be regarded as a basis of unfairness or any other issue to alter the applicable principle.

KIRBY J:   We are not talking about matters of merits, we are talking about a very important matter of general principle.

MR GRIFFITH:   We are, your Honours.

KIRBY J:   This Court has to lay down the rule.

MR GRIFFITH:   And I am seeking to get to it in the context of this case.  My learned friend’s submissions were directed to the purpose of demonstrating the decision against Mrs Nielson is incorrect.  We are seeking to demonstrate it is correct, and as part of that, our position is that a plaintiff in the position of Mrs Nielson following the Zhang decision was in the position to establish liability in tort.  It was necessary for her to establish the relevant Chinese law as the law of the lex loci.  Now, your Honours, that is not what she did.  Can I take your Honours to page 38.

GUMMOW J:   This is a case about status, is it not?  The Chinese law fixes upon particular status of litigants.

MR GRIFFITH:   Yes, your Honour, 146 aspects.

GUMMOW J:   Yes.  Assume that there was a foreign diplomat involved and the Vienna Convention was engaged.  There are special provisions in that, as we know, which I assume they have in China.  Do you say that should be ignored?

MR GRIFFITH:   That could have status as an international convention obligation, applicable by reason of China’s obligations at international ‑ ‑ ‑

GUMMOW J:   If it was a matter of Chinese municipal law, would you say that would be ignored?

MR GRIFFITH:   Ignored?

GUMMOW J:   Yes.

MR GRIFFITH:   Ignored by whom, your Honour?

GUMMOW J:   Because it is a choice of law rule in some way or other, because it is bound up with the national status of an individual.  This is bound up with the national status of these litigants.

MR GRIFFITH:   Your Honour, one could not characterise that as a choice of law.  That would be a straight immunity issue, with respect.

GUMMOW J:   I am just puzzled over your characterisation of choice of law, 146.

MR GRIFFITH:   Your Honour, it is a choice of the applicable law.  146 gives the jurisdiction, so it is the jurisdiction clause by reference to familiar aspects of the lex loci.  It is only the second sentence that gives a discretion to apply a different law.  We say a fair description of that is a choice of law provision which may be exercised as a discretionary matter by a Chinese People’s Court.  That is to describe what it has done and it is discretionary, it is not mandatory.

HAYNE J:   Recognising the importance of the discretionary aspect, but putting it aside for a moment, your contention is that even if it were an obligation under Article 146 on the Chinese court to apply the law of nationality, that is a factor to be put to one side by an Australian court?

MR GRIFFITH:   Yes, your Honours.  We say that the rule to be stated by this Court is on the basis of the reference to the lex loci is a reference other than to provisions which have the effect of referring the matter to some other court, either back or forward.

HAYNE J:   That inevitably leads to differential outcome, does it not, according to the place of litigation?

MR GRIFFITH:   In a situation one could postulate, yes, of course, your Honour.

HAYNE J:   It leads then further away from the proper law of the tort concepts and justifications than even application of lex loci would itself.

MR GRIFFITH:   Your Honours, that may be arguable.  For example, paragraph 3.56 of the final report of the Law Commission would seem to indicate the view there of the authors of that report was that those undesirable aspects might arise from applying renvoi, rather than from refusing it.  One is not in an area of black and white result here.

KIRBY J:   Do you remember I asked Mr Walker yesterday about whether there was any up to date review of where countries have gone on renvoi.  Such information as seems to be footnoted is all back in the early 1990s.  Is there no more recent review of what countries are doing either by legislation or by their common law?

MR GRIFFITH:   Your Honour, we have the Quebec provision that we have distributed to the Court, which indicates a result the same as that recommended and enacted in the United Kingdom.

KIRBY J:   That is just one instance and again by legislation.  If the Parliament of Australia had followed the Law Reform Commission, that is it and that will be conformed to.  But they have not, so we have to devise a principle which is analogous to and consistent with Zhang.

MR GRIFFITH:   Your Honours, generalities are very dangerous areas, as demonstrated by the literature that Dicey footnoted, and no one else seems to be inclined to list out.  It is the case that there are some few decisions that my learned friends refer to specifically in their written submissions, whereby, in respect of matters of succession, wills, status and the like, there has been an application of double renvoi.  It seems that it has worked in those cases mostly because of the difference which has been noted between domicile in one law and nationality in the other. 

Our position with respect to the issue in tort is that we do not know of any decision other than, possibly, Richards, which we distinguish in our written submissions, and I will not repeat what we say there.  We have already touched upon, in the submissions to the Court, what has happened since Richards, but we say that it is not received doctrine anywhere that single renvoi has operated with respect to tort.

KIRBY J:   Why?

MR GRIFFITH:   One reason, your Honour, is because in a common law jurisdiction ‑ ‑ ‑

GUMMOW J:   You got back to the forum anyway because of the first limb in Phillips v Eyre.

MR GRIFFITH:   Yes, precisely, so that is one reason, your Honours.  The other reason we say is that there is nothing at all to show that one gets any certainty out of the issue of referring renvoi.  The court is really operating in this tabula rasa, but what we say, in the background of where the rest of the world is moving, be it by legislative reform, restatement in the American Restatement (Second) or the like, that the world trend is in the opposite direction but, your Honours, the court is capable of going in opposite directions.  Look at, for example, the decision in Voth and Oceanic Shipping that my learned friend seemed to regard with some dismay.  That is not being challenged.  This is for the decision of the Court, but our position is that it is tabula rasa for the Court to do it.

GLEESON CJ:   I think that slate is meant to be blank, and not read.

MR GRIFFITH:   Your Honour, perhaps I am blank on this side, so I will leave the tabula and go back to the rasa, I think.

KIRBY J:   I think they are rasa, are they not?

MR GRIFFITH:   Rasa, yes, that is right.  Your Honours, can I make my ‑ ‑ ‑

HAYNE J:   Can I take you to what, at the level of principle, seems to be a convenient statement of it.  If you go to the Otto Kahn-Freund piece, particularly in his epilogue, at page 323.  At line 4 on that page it refers to the “insoluble dilemma of certainty against fairness in the individual case” et cetera, but he offers as the principle, perhaps the only justification why any country should in any circumstances apply any law except its own is to prevent a party from gaining advantages, to protect the party from suffering disadvantages owing to the opponent’s ability to invoke a particular jurisdiction.

MR GRIFFITH:   Yes, your Honour.

HAYNE J:   Now, first, what do you say about that being the chief underlying principle and its application in this case to the rule with which we are grappling?

MR GRIFFITH:   Your Honours, I would say firstly that Kahn‑Freund’s epilogue is to be read as a whole.  Your Honour is referring to the third of his categories, and our position is the third of his categories, which deals with flexibility, is one that is implicitly rejected by the certainty opted for by Zhang.  But without setting a reading list, can I refer to your Honours as the starting point the completely eloquent statement with respect to the private international law being intellectually fascinating, “Is this not in fact its main course in the ‑ ‑ ‑

HAYNE J:   “Main curse”.

MR GRIFFITH:   “Curse”, I am sorry, your Honour, yes.  The paragraph on page 320, the first half of that paragraph, most eloquently expresses where we are with the literature.

HAYNE J:   Yes.

MR GRIFFITH:   Now, your Honour, in his usual ‑ ‑ ‑

HAYNE J:   But is not the underpinning principle that of avoiding one party gaining advantage or inflicting disadvantage on the other because that party can go elsewhere?

MR GRIFFITH:   Your Honour, we say firstly one should go for simplicity, and Zhang has done that.  That is Professor Kahn‑Freund’s first principle.  The second principle is realism, recognition of the facts of life.  We have facts of life here.  Your Honour says an issue of forum shopping, well it is the plaintiff that forum shopped here.

Now, with respect to that, your Honours, the court might have an unconscious desire to return home but what we say, your Honours, it is appropriate for the court to consider the issue of certainty which we say has already been established by Pfeiffer and then Zhang with respect to international torts, notwithstanding the absence of federal aspects, and with that in place, we say the issue which is the third aspect your Honour was referring to on page 323, which is picking up his discussion under the heading “Flexibility”, which starts at the second‑last paragraph on page 3, and the aspect your Honour Justice Hayne referred to me as part of that discussion, and plainly one picks up from the last paragraph on page 323 that in this discourse Professor Kahn-Freund’s inclination is to have flexibility and not harmonious results, they may differ.

Your Honour, on this approach, Professor Kahn-Freund accepts the fact that there will not be the aspect of uniformity of results.  What he says is that there should be accommodation that you have differential results. Now, our position is that that is an approach which may be justified, it is supported by much of the academic writing, but we say it is one that is flatly inconsistent with the basic precept of Zhang, which is our reference point. 

KIRBY J:   Not really, because the basic idea was “Go back and do exactly what would be done in the place of the wrong”, and if that includes Article 146, I just do not see what authority you have to snip 146 out of the law of China.

MR GRIFFITH:   Your Honours, can I go back to your Honour’s point about what is the heart of Zhang, which in some ways is derived from Pfeiffer, so one must read them together to get this result.  We say it is not a simple issue of saying, “What Zhang decides is to get the same result”.  We say it does not do that, your Honour.  When one looks at the entire list of factors which are set out in Zhang and Pfeiffer, one sees statements of avoiding “parochialism and systematic unfairness” – that is paragraph 63 of Zhang, quoting Tolofson.  You have Zhang quoting from Walsh, stresses forum neutrality of lex loci delicti promising “more even‑handed justice”.  Paragraph 64 of Zhang respects territorial sovereignty of the other state, again quoting Tolofson.  Paragraph 66 is where it says “promotion of certainty”, just as one of the list, your Honour. 

Paragraphs 75 and 87 of Pfeiffer refer to “reasonable expectations of parties”, and that is a matter I wish to return to.  Predictability is dealt with in paragraphs 79, 83 and 84 of Pfeiffer, which was the main factor in resisting any form of flexible exception.  Flexible exceptions were also ruled out in Zhang at 75.  There was uniformity of outcomes mentioned at 83 to 86 and 123 of Pfeiffer, which included considerations of even‑handedness and limiting plaintiffs’ forum shopping, and also the issue of harmonizing with what other jurisdictions are doing.  So one has, as it were, a panoply of issues which were drawn together in Pfeiffer for domestic torts and then, even without that consideration, applied overseas. 

Now, of course, it is an ideal, your Honours, to have uniformity in result, but we say that there is nothing whatsoever to show that a court applying a single renvoi, which we say in tort is a new adventure for a common law court and we say it is a new adventure, indeed, for any courts with respect to tort liability to make any assumption that it will get the same result that would have occurred in the state or, your Honours, that that produces ‑ ‑ ‑

GUMMOW J:   I know Mr Walker referred to Lord Justice Scrutton, but I am not sure he, really, at a doctrinal level, has to repudiate double renvoi or accept one or the other.  He just fixes on 146 and if it transpired that the evidence was that the Chinese court would say, “All the relevant connections are with Australia, except for the place of the delict, which is China, but Australia places enormous significance upon the place of the delict and we are going to do the same and send it back to Australia”, he does not have to face up to that, because he says the evidence is not like that.  But I am not sure that at a doctrinal level he has to throw his cap in one court or the other.

MR GRIFFITH:   Yes, your Honours, but with respect to this issue of evidence ‑ ‑ ‑

GUMMOW J:   He will tell us in his reply.

MR GRIFFITH:   Yes, he will, your Honours.  Can I take your Honours to the issue of how the case was put.  After Zhang, your Honours, in April 2002 or whatever, it was known that the lex loci was China.  The plaintiff ran its case with respect to issues of liability of an employer arising from contract and also of tort where all matters were contested.  The plaintiff’s case throughout and also maintained in the Court of Appeal by reference to a notice of contention which one finds at page 378 was that the law of Australia applied.

The plaintiff brought no evidence as to the Chinese law.  Could I take your Honours to page 38 of the transcript where, when Justice McKechnie raised the issue that the onus was on the plaintiff to establish the applicability of Chinese law, he says:

That may be an argument that could be advanced in the circumstances but we’re endeavouring to keep well away from the China law as we can –

So when one has my learned friend criticising the aspect of not bringing Article 146 in the evidence of Mr Liu, Mr Liu was called by the defendants for the purpose of establishing what was the relevant Chinese law as what the defendants asserted applied as the law of the lex loci and on the basis, your Honours, which is quite clear from the transcript, that the view was taken that the issue of Article 146, the second paragraph, was an issue of renvoi - one picks that at pages 102 and 103 of the transcript - and therefore, on the defendants’ defence, a matter of no relevance. 

It was for the plaintiff to prove these issues to get the result as it would have been under Chinese law.  The plaintiff led no evidence at all in presenting its case.  It did, I think in the course of the cross‑examination or after, tender one article with respect to Chinese law.

KIRBY J:   Where do we get the highest it reaches – assume for the moment the question is:  what would actually have happened if the proceedings had been brought in China?  Now, where do we get the highest it reaches in the evidence of the expert or other evidence tendered in the case that says what was in fact done where you have two nationals of another country?

MR GRIFFITH:   Your Honours, it is page 90.  It is very brief.  Line 29, where Mr Liu is asked:

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 –

My learned friend read this passage.  We would say “law” -

of conflict laws, and law of conflict laws 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, 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.

Yes?‑‑‑So what I understand, according to my knowledge, is if a case rests in other countries – so other country like Australia, a court in Australia should use the law of Australia conflict to decide which law to use, so that’s why to that extent I think it’s not relevant to this case.

That’s just a matter of your opinion?‑‑‑That’s right –

So that is it, your Honours.  The court did not have the advantage of any evidence whatsoever led by the plaintiff to discharge, we say, the onus on it to establish the lex loci.  What my learned friend, Mr Walker, is seeking to do is to levitate from the defendant’s evidence, which was recalled for the purpose of showing the lex loci on the basis of the law apart from the conflicts provision.  There are two consequences of that, your Honour.  One is that it means the court had no evidence with respect to which you could establish a double renvoi, because there was just no evidence about it, and we say the onus is on the person to establish it to lead that evidence.

The second issue, your Honours, is that there is absolutely, we say, beyond these words, nothing to which one may attach to say that there is evidence to establish the relevant applicability which could be used as a foothold by the trial judge to say he is acting as if he is a Chinese judge and, in effect, applying this concept of justice and fairness.  So the evidentiary shortcomings ‑ ‑ ‑

KIRBY J:   Now, it does not matter in whose case the evidence is presented – sometimes the most horrible evidence comes out in your own case – but was there any other evidence that said what a Chinese judge would do if there were two nationals of another country?

MR GRIFFITH:   No, your Honour, there was a ‑ ‑ ‑

KIRBY J:   So this is all really speculation as to what the Chinese judge would do.

MR GRIFFITH:   No, your Honour, there is a Chinese text which is reproduced as some of the ‑ ‑ ‑

KIRBY J:   Well, that is extremely helpful.

MR GRIFFITH:   Well, your Honours, we have a translation.  Part of the translation was before the judge, but not all of it, but we can give the Court the translation.

KIRBY J:   Well, it may have been the part that is relevant.  He does not need to know everything, he just needs to know, really, about this particular problem.

MR GRIFFITH:   Your Honours, unfortunately, the entire Chinese text was before the judge.  The translation only came into existence in 2002.

GLEESON CJ:   You need to begin, do you not, with the first sentence of Article 142?

MR GRIFFITH:   Yes, your Honour, and the heading – a whole section deals with this issue, yes, your Honour.

GLEESON CJ:   So they have a special law about foreigners.

MR GRIFFITH:   Yes.

GLEESON CJ:   If, for example, for some reason, two foreigners were involved in a motor vehicle accident in Japan and they later found themselves residents of China, and one of them sued the other in a grassroots People’s Court, then the judge in that court would go directly to Article 142 and then Article 146.

MR GRIFFITH:   Yes, your Honour.

GLEESON CJ:   And if the two foreigners were Australians, the judge might say, “You will decide this according to the law of Japan”, or the judge might say, “You will decide it according to the law of Australia”.

MR GRIFFITH:   Or of China.

GLEESON CJ:   Well, I cannot see the third possibility in Article 146.

MR GRIFFITH:   Your Honour is correct.  On your postulation, it would be, in that case, Japan, under the first paragraph, or it could be Australia.

GLEESON CJ:   But it is because these two people are foreigners that that result would follow, not because the accident happened in Japan.

MR GRIFFITH:   Well, there are two factors, your Honour.

GLEESON CJ:   Well, the fact that they were foreigners, suing in a People’s Court in China, means that Chapter VIII applies to them.

MR GRIFFITH:   Yes, your Honour.  It does flow, your Honour, the effect of the first part of Article 142, yes.

KIRBY J:   There would have been no real problem, if the case in contract had been upheld, if the contract had been made in Victoria, but that was rejected by Justice McKechnie and has not been pursued.

MR GRIFFITH:   In fact, your Honour, he had to reject some of the argument made for a successor, otherwise the plaintiff would have lost, but that is a matter we need not be concerned with.  We are not concerned with the contractual aspect.

Your Honours, it is self‑evident, when one looks at all the circumstances, if the action had been commenced in China within the limitation period there would be no difficulty.  If it had been, it might be that the defendants had some right of contribution and indemnity from the owner of the premises that had leased to them.  One does not know.

GLEESON CJ:   Is there in this law – I have not looked at it – some general choice of law rule?  Chapter VIII is dealing with a particular subject of choice of law in relation to foreigners, but there might be other forms of foreign elements in a case apart from the fact that the litigants are foreigners.  Is there a more general choice of law law?

MR GRIFFITH:   Our present understanding is no, your Honour.

HAYNE J:   Because the relevant criterion for this law is status.

MR GRIFFITH:   Yes.

HAYNE J:   And the status as a foreign national.

MR GRIFFITH:   That would be right.  Now, your Honours, the position ‑ ‑ ‑

KIRBY J:   Your voice took on a tone of righteousness in ‑ ‑ ‑

MR GRIFFITH:   Never, your Honour ‑ ‑ ‑

KIRBY J:   Just imagine if you are a Western Australian person and you are employed by and wanting to sue a Victorian person, the notion that you would be rushing off to the court in China to sue is something you would have to take very carefully.  One can understand lots of practical reasons why you would not be doing that quickly.

MR GRIFFITH:   Your Honour, what we would say is, she was in China during most of the year of the injury, which was the limitation period.  That is a fact.  With respect to suing in Western Australia, the traditional principle of jurisdiction is by residence of the defendant, not of the plaintiff.  Now, there are long‑arm ‑ ‑ ‑

KIRBY J:   But the defendant was in Victoria ‑ ‑ ‑

MR GRIFFITH:   Yes.

KIRBY J:    ‑ ‑ ‑ and you told me earlier you raise no intra-federal point.

MR GRIFFITH:   Well, we cannot raise one because of the long‑arm provisions of jurisdiction in Western Australia, but we do observe, your Honour, that they are regarded as the antithesis of the proper basis, under principles of comity, with respect to the exercise of jurisdiction.

KIRBY J:   Yes, but, within Australia, Pfeiffer and our Constitution show that you can start where you like.

MR GRIFFITH:   Your Honour, yes, but when one talks about reasonable expectations we say that it cannot be taken that there is a reasonable expectation with respect to this matter, that the parties regarded that the plaintiff might sue at her leisure after 5 years and 10 months in Western Australia.  That is her choice.  But, when exercised, your Honour, it has the concomitant aspect that she required after Zhang to prove Chinese law, and we say she did nothing to prove it and she should have lost on that basis.

GLEESON CJ:   Is there no Chinese choice of law rule governing a case of a motor collision in Australia in which the parties were both citizens of China?

MR GRIFFITH:   Perhaps the general provision for liability might cover it, your Honour.  We would have to check that.  Your Honours, I am told that there is a separate Chinese law governing motor accidents and we do not know its provisions.

GLEESON CJ:   I just took motor accidents as an obvious example, but there is no choice of law rule governing situations except in relation to foreigners, and I thought an obvious example of such a situation would be where two citizens of China were involved in tortious conduct outside China.

MR GRIFFITH:   Your Honour, I am no Mr Liu, so I am sorry, your Honour, this is the issue on foreign law.  I am sorry that I cannot assist your Honour.  Your Honours, we say that there is but a slender threshold for my learned friend’s elevation of his submissions with respect to the natural application of the second sentence of Article 146 to be derived from that somewhat unsatisfactory cross-examination of Mr Liu and from parsing the text of the General Principles as if they are an Australian statute without proof of knowledge of the applicable methods of construction and operations of the exercise of jurisdiction by a Chinese court.

KIRBY J:   And I suppose you say that that is especially relevant because of the permissive nature of Article 146 ‑ ‑ ‑

MR GRIFFITH:   Precisely, your Honours, there may be principles ‑ ‑ ‑

KIRBY J:    ‑ ‑ ‑ that it is not obligatory, it is what may be done and we are left in an uncertainty as to what in practice does happen, if anything.

MR GRIFFITH:   Your Honour, there might be something beyond practice, there might be principles laid down by an opinion of the Supreme Court on that very issue.  It was not something that Mr Liu was called to prove, and the defendant’s case was that that had nothing to do with its position.  It was not encumbered upon the defendant to prove this.

KIRBY J:   This gets back to Justice McHugh’s concern in the special leave hearing as to whether this was an appropriate vehicle in which to consider these issues, given that the plaintiff did not even bother to prove what was the position in practice in the People’s Republic of China.

MR GRIFFITH:   Precisely, your Honour.  What we say the plaintiff has done in this case is to choose its counsel in this Court very wisely.  But we say at first instance, your Honour, there is, on the face of things, a clear cause of action against the legal advisors for failing to understand the effect of the Court’s judgment in Zhang, even when a Chinese lawyer is produced at the expense of the defendant for them to seek to establish it on the fly, as they were.  They ran the case at first instance saying this is about the application of Western Australian law to a Western Australian tort, and they put in a notice of contention which your Honours can read at page 378 which maintains that position which is dealt with in the judgment in pages 399 to ‑ ‑ ‑

KIRBY J:   They might have advocate’s immunity.

MR GRIFFITH:   Your Honour, this must fall ‑ ‑ ‑

KIRBY J:   We will not go there, I do not think.

MR GRIFFITH:   Your Honours, we say that this case has got to a point as if it is a nice pure case with adequate proofs, with respect of this.  It is not, it is just not there.  The plaintiff’s position maintained to the Court of Appeal level was that Chinese law does not apply, and, with respect to my learned friend’s criticism to say “You are left with the law as you now have it, I rely on Allstate Life”, your Honour, if I did not have so much respect to my learned friend I would say that that was ,to put it bluntly, barefaced cheek, if that is not an inappropriate way to put, because we say that the requirement in Zhang is to prove and apply the lex loci.  That was what was required in this case.  There was no effort to do it.

Now, your Honours, there is a principle of course to say if you do not know what the foreign law is but you have to make a decision, you should assume that your domestic law is the same as the foreign law.  Now, we say that is not a principle to be applied by this Court in dealing with the requirements of Zhang to apply the lex loci.  Otherwise, your Honour, plaintiffs could just take the view, we will prove almost nothing of Chinese law, we will point out the matters of obvious connection which Justice Callinan comprehensively referred to yesterday.  It is plainly a matter which does not have much policy concern with the Chinese court.  This Court can in the absence of any reference points, do its best basically with the text of the Chinese law simpliciter, and implying principles of common law construction to that and to exercise any discretionary powers which may be there, uninformed with a complete understanding of how those discretions are to be considered or exercised under Chinese law.

Your Honours, we accept the view that one can only go so far to describe the effect of laws and not their operation but what we say is, firstly, it is quite out of place for my learned friend to criticise the evidence given with respect to the issue of extension of times under Article 137.  My learned friend said at one point that there was effectively no evidence on it, or words to that effect.  Your Honours, there was the clearest evidence, a translation of, I think Article – paragraph 169 of the Opinion of the Supreme People’s Court of absolutely binding nature.

With respect to the general obligation, one can see said in National Mutual v Sentry that what is required is proof of the fact of the existence, nature and scope of the principles of China so that the court is in the position to apply the rules and principles so ascertained to the facts of the case as a question of law for the court upon which that latter issue evidence is not receivable.

Of course, there is scope for value judgments as to where the line may be drawn and when one is giving evidence on application but, nonetheless, the plaintiff was obliged to establish her claim to apply and prove the law of the lex loci with evidence of that law, and it is not for her having called no evidence to criticise gaps in the evidence of Chinese law led by the defence for the purpose of its defence, not for the purpose of establishing the plaintiff’s claim.

We say for your Honours to accept the approach of filling the gaps would be to destroy the Zhang rule.  One would expect then, your Honours, in the case of a claim in tort no more than a superficial tendering of the text of the General Principles, whether or not there is a depth of jurisprudence that might be procured to prove the binding nature of narrow applications of those provisions.  So, your Honours, there was a complete failure to call evidence by the plaintiff on Chinese law at all and on, of course, both sides, your Honour, with not calling evidence with respect to the operation of renvoi.

The defendant did not call it because it took the clear position, as is clear from the evidence of Mr Liu, that Article 147 was granted as a renvoi position and the defence took the view that the applicable principle under Zhang, whether that is vindicated before the Court or not, is that one does not pick up a renvoi rule on a single renvoi basis.  My learned friends did not call any evidence and we say they are left with a fatal gap.  Whether or not my learned friend seeks to concentrate his submissions with respect to Article 146, second sentence, and not refer to the doctrines of renvoi single or double, modified or not, as he does in his written submissions, and whether or not there is a basis for saying this Court can exercise a discretionary jurisdiction.

We say that the issue of coming back, as Justice McHugh referred to it, the expectation of the parties, we say that can go no more than saying, and it is reflected in the Law Reform Commission’s final report, that the expectations of the party should be that the issue of liability was determined by the lex loci applying, whatever that means.  If there is a gap in understanding what that means, this Court should fill it but at the very least it was for the plaintiff to seek to establish that law.

With respect to the issue of single renvoi, we say that it is a problem with respect to issue of certainty or fulfilling the expectations of the parties.  It may be, your Honours, that because here the two choice of law rules are the same, the lex loci delicti in the ordinary Chinese case, subject to a discretionary exception and with respect to the position under the Australian law being to apply the lex loci delicti, one might, with perfect proof, your Honour, be in the position to say you could make single renvoi work.

If the rules are discordant, then it will not work.  If, for example, you apply lex loci delicti in Australia and a foreign country applies the proper law of the tort, the result might depend on where you sue.  When one went to another country it would depend on what that country’s approach to renvoi was.  If the other country only had a single renvoi approach, then there would be even more certainty.

We say it is by no means self‑evident that in seeking the holy grail to say we will reach the same result of a court seized with the matter dealing with foreigners and a discretion to apply the rule other than the Chinese law is one that avoids discordant results than it does, your Honour, in the case of adopting, we say, a certain approach of saying, in respect of torts, the rule is no renvoi.  Just as much as Profession Kahn-Freund makes the point that you are going to have variations and an absence of perfection in result, that will obviously be the case on some occasions, were it the case, for example, here, that the Chinese court, as a matter of ultimate ascertainment of circumstances, would have applied the Australian law or the law of an Australian State, had it been seized with the matter.  But here, of course, whether it would or not is a matter of pure speculation.

Your Honours, one is working within a framework, for even those who advocate a renvoi approach accept that they are, in the specific words of Professor Kahn-Freund, promoting a result which will never give certainty.  Of its nature, it is intended to give ‑ ‑ ‑

KIRBY J:   Yes, unfortunately, the law is sometimes uncertain, but if your quest is, with all of its uncertainties, to apply the law of the place of the happening of the wrong, then you pick up the certain aspects of the law and you pick up the uncertain aspects of the law. 

MR GRIFFITH:   Precisely, your Honour. 

KIRBY J:   But the question in this case, it seems to me, is this, that if this Court opts for a rejection of renvoi, as you urge, then we confirm the Full Court of the Supreme Court of Western Australia.  If, however, the Court is tempted to a view of a single renvoi solution as more consistent with its rule in Zhang and more appropriate as a principle of private international law, then the problem is presented as to whether we have the evidentiary basis upon which to come to that conclusion.  If we do not, then we are not really in a very good position to test that single renvoi theory on the facts of this case, as you have explained them, if they remain as they are stated on page 90.  If that is all there is, then how the Chinese deal with a “may” is completely unknown to me. 

MR GRIFFITH:   Your Honours, the answer is yes.  All that is so.  There was hesitation in granting special leave.  This was an issue identified, but I do not think the Court had the advantage at that stage of the extent to which there was no evidence forthcoming from the plaintiff on these issues.  Now, on one level, this case is about the plaintiff succeeding, on the other level, and the parties’ submissions have addressed it at length, it is, for the first time, the issue of renvoi in tort – renvoi, indeed, at any level – coming to an appeal court.

KIRBY J:   Justice McKechnie’s solution to the suggested lack of evidence was, “If you have a single renvoi rule, then it comes back to me and I apply what I think is the appropriate application of Chinese law.  I am not applying what a Chinese judge would be applying as the appropriate application of Article 146”.

MR GRIFFITH:   Exactly, your Honour.  In respect of Article 137, he just repudiated the evidence.  He said, “I am an Australian judge exercising Chinese jurisdiction, as it were, in construing and applying its laws by reference to what I think is just and fair”.  That is what he did. 

GLEESON CJ:   I think he did the same in relation to 146.

MR GRIFFITH:   Yes, he did.

GLEESON CJ:   He just said, “Well, Chinese law says that the court may do something.  I am the court and I am going to exercise the capacity to do it”.

MR GRIFFITH:   Yes.  Your Honour, what is inexplicable is why, having done that with respect to 146, he then went on to deal with the extension under 137.

GLEESON CJ:   Well, he actually did it in reverse order.  He dealt with 137 first.

MR GRIFFITH:   Your Honour is right.

MR GRIFFITH:   Belt and braces, your Honour.  Our position is that there are no trousers to keep above.  There is nothing to attach to.  It is just flatly inconsistent with his Honour’s approach to get the result, one could say, without being critical, but that would be not the correct statement.  Being critical, your Honour, it is plain that this result was a result-induced argument to get to the intended result to provide ‑ ‑ ‑

KIRBY J:   I do not think you should say that.

MR GRIFFITH:   Your Honour, I will not say it but I will let the judgment be explained as best one can.  One can see here, your Honour – it might be a reason to explore the judge’s view of what is fair and just – but a remedy was provided when it did not have the necessary integers of support.  It did not have any evidence from the plaintiff, and we say it in no way satisfied the requirements of Zhang ‑ ‑ ‑

CALLINAN J:   Mr Griffith, do you agree that that evidence at page 90 that you drew our attention to does not have anything relevant to say about the way in which a Chinese court might exercise its discretion pursuant to the second sentence in Article 146?

MR GRIFFITH:   I agree, it does not have enough which is relevant to say, your Honours.

CALLINAN J:   Well, does it have anything relevant to say as to the application or as to the question whether Australian tort law should be applied?  It certainly talks about conflict law, or the question of renvoi, but it does not seem to me that he says anything about the principles which would be applied to the construction of Article 146 and as to the exercise of the discretion contained in it.

MR GRIFFITH:   Well, I think the answer to your Honour’s question is really close to nothing, in the context that he was the defendant’s witness ‑ ‑ ‑

CALLINAN J:   I understand everything you say about it, but I just want to be clear on the proposition that really it does not say anything useful as to the matters which I have just raised with you.

MR GRIFFITH:   Your Honours, certainly in the context that there is no evidence at all that there is a Chinese law of renvoi, your Honour is correct.

CALLINAN J:   All right.  Let us assume that what I put to you is correct for present purposes.  But what about the proposition I put to Mr Walker yesterday that I took from that case of Jabbour?  Why does that not apply?

MR GRIFFITH:   Your Honour, I had referred to that issue.  It is the case that in some circumstances a court, needing to apply a foreign law but having a gap to get a result, takes a view that the foreign law is the same ‑ ‑ ‑

CALLINAN J:   Assumes identity.

MR GRIFFITH:   Yes.  Now, your Honour, our point in answer to that is to say where you dealt with a requirement as here, that a plaintiff is required to prove that foreign law and the plaintiff goes out of its way to make its position right to the appeal court, your Honours, that it is relying on the Western Australian law, it leads no law whatsoever.  It would be to undermine Zhang for the court to fill that deficiency to say, “We assume that Chinese law is the same as the Western Australian law.”  We say that that ‑ ‑ ‑

HAYNE J:   Your proposition begins from a burden of proof suggestion, does it not?

MR GRIFFITH:   Yes.  It does, yes, your Honour.

HAYNE J:   And how does that mesh with the presumption of lex fori being identical?  I mean if we are going to get down into burden of proof, which we may well in this case ‑ ‑ ‑

MR GRIFFITH:   Your Honour, it is always difficult, when one comes back to this Court, having had an issue resolved in strong terms, and then to seek to draw on that to say, “Well, the consequence is”.  Now ‑ ‑ ‑

HAYNE J:   Had no party put on any evidence of Chinese law ‑ ‑ ‑

MR GRIFFITH:   Your Honour, our submission would have been ‑ ‑ ‑

HAYNE J:    ‑ ‑ ‑ the plaintiff would still have succeeded.

MR GRIFFITH:   No, your Honour, we say the plaintiff should lose.  If the Court accepts that, you may as well revoke Zhang, with respect.

HAYNE J:   It is up to the party, in whose interest it is to assert the difference, to at least start the hare running by putting the evidence on, is it not?

MR GRIFFITH:   Well, your Honours, that is for the Court to express, but it would be a very strange position that an absolute requirement, expressed for certainty and the various other policy reasons, that the law of the lex loci applies can in practice be run without the plaintiff having called any evidence, and then take pot luck whether the defendant can call some evidence to the contrary.  That would create a default position.

GLEESON CJ:   There is, is there not, a Western Australian statute about occupiers’ liability.  I think we had to deal with it in Jones v Bartlett.

MR GRIFFITH:   In Jones v Bartlett, yes, your Honour.

GLEESON CJ:   But nobody suggested in this case, as I would understand it, that the Occupiers’ Liability Act (WA) applied.

MR GRIFFITH:   No.

GLEESON CJ:   I presume it only applies, at least by construction, to real estate in Western Australia.

MR GRIFFITH:   Yes, I think it was – although, your Honour, the entire case was run on the basis that it was Western Australian clearly contractual
claims.  But when your Honour says occupier’s liability, the first defendant was sued as the employer who had let the premises and sublet.  It was not their own premises.  They were the landlords.

GLEESON CJ:   The basis on which Justice McKechnie found for the plaintiff was on occupier’s liability, common law, was it not?

MR GRIFFITH:   For which plaintiff, your Honour?

GLEESON CJ:   What was the cause of action that ultimately succeeded?  There were a number of causes of action pleaded.

CALLINAN J:   It was the tort action that succeeded, was it not? 

MR GRIFFITH:   …..the Chinese tort.

CALLINAN J:   The appellant lost on contract.

MR GRIFFITH:   Yes.

CALLINAN J:   I think the contractual claim was put on possibly three, certainly two, bases.

MR GRIFFITH:   There was no cause of action held there. 

GLEESON CJ:   But I thought you told us yesterday that Mr Liu’s evidence said, amongst other things, Chinese law does not have occupier’s liability.  It has liability of owners of the land or liability of landlords or whatever.  What was ultimately the cause of action upon which Justice McKechnie gave judgment for the plaintiff? 

MR GRIFFITH:   Tort, your Honour.

GLEESON CJ:   Tort.

MR GRIFFITH:   Negligence.

McHUGH J:   The common law.  Common law principles of negligence, which form part of Australian jurisprudence.  That was the claim.

MR GRIFFITH:   But by reference to Article 106 presumably.

GLEESON CJ:   146?  Your argument, as I understand it, right or wrong, is that the plaintiff made no attempt to prove the law of China.

MR GRIFFITH:   Yes.

GLEESON CJ:   The defendant gave some evidence of some of the law of China and the plaintiff sought to take opportunistic advantage of Article 146.

MR GRIFFITH:   Yes.

GLEESON CJ:   Without ever adducing any evidence or getting any evidence from Mr Liu ‑ ‑ ‑

MR GRIFFITH:   We put the General Principles in, your Honour.  We had nothing of them from the plaintiff.

GLEESON CJ:    ‑ ‑ ‑ as to any principles relating to the construction of Article 146 as distinct from what might be called the behavioural science of the way Chinese judges react to Article 146.

MR GRIFFITH:   Yes.  We did, your Honour, assert by way of submission that the law of Australia was that there was no renvoi in tort, and we did, on that basis, give evidence and submit that Article 146 was irrelevant to the issue of the application of the lex loci in this case.  Our positive case was that Chinese law with respect to delict applied.  Our first argument was that we were not liable in negligence, in effect, and we lost on that and we have worn that consequence.  But there was a defence on all issues of liability, applying the Chinese law.

GLEESON CJ:   But, relevantly to the present appeal, what Justice McKechnie said was, “Article 146 is part of the Chinese law and I’m going to apply that, and I’m the court and it says I may apply Australian law, and I will apply Australian law.”

MR GRIFFITH:   Yes.  That is to identify the issue for this Court.  Is he entitled to do that merely because Article 146 second sentence says what it says, and that is effectively all the evidence he has in that evidence called by the defendant.

HAYNE J:   Now, this question of whether the presumption applies where some, but apparently imperfect or incomplete evidence of foreign law is tendered and has been the subject of at least some discussion in the cases - I am looking at Justice Heydon’s 7^th edition of Cross at page 1359 paragraph [41005] footnote 10.  Reference is made in that, connection to:

TheNouvelle Banque de L’Union v Ayton (1891) 7 TLR 377; ReParana Plantations [1946] All ER 214 at 217-218; Szechter (orse Karsov) v Szechter [1971] P 286 at 296 . . . but see –

the learned author goes on –

Fentiman, Foreign Law in English Courts:  Pleading Proof And Choice of Law (1998) pp 149-51 for arguments to the contrary.

So that an appeal has been tilled, are we going to have any submission about the effect of that cultivation?

MR GRIFFITH:   Your Honour, I have got Fentiman here.  We can make it available to the Court.

HAYNE J:   Dr Griffith, it is up to you what you make of it.  What I want to know is what your submission is.  I want some help.

MR GRIFFITH:   Your Honours, our position is the principle is accepted as a general principle, as indeed one must; that is just a trite aspect.  Our submission is that in the context of a principle such as Zhang where the Court has said for policy reasons, after exhaustive consideration, the principle applied by Pfeiffer in respect of intra-Australian torts is to be applied for international torts, notwithstanding the absence of a federalist aspect to the issue.  For the reasons of certainty without a flexible exception we say your Honours should not, unless the Court directly admits it, be destroyed by a side wind of saying that no proof of foreign law is required to apply a tort rule which says the lex loci applies, which in essence would be the extension of that approach.

Your Honours, the effect of doing that, one has to have regard to the realities, is that it means plaintiffs might issue claiming with respect to a foreign tort.  One does not know until you get to the trial whether or not they are going to prove any foreign law, unless there are some preliminary procedures with respect to expert reports in advance.  The defendants, your Honours, would then be forced to the oppressive situation, for example as here, to spend $44,000 to qualify and bring out from China an expert to meet a case that might not even be put.

Now, your Honours, we say that is not the appropriate way for the court to have regard to the various factors we listed with respect to the issues of ensuring a rule of certainty of application by reference with respect to international torts, the lex loci or, I should add, if that is to be the extension from Zhang, having dealt with the empty table, then it is for this Court to say so, but our submission is the Court should not say so for reasons ‑ ‑ ‑

KIRBY J:    There was, of course, the evidence that Mr Walker read yesterday on 92 where the cross‑examination went on.  You see it started with the witness, Mr Liu, saying Article 146 is irrelevant.  Then he seemed to move from that to saying, “Well, in certain relationships” as for example “unmovable property” as he called it at the top of page 91, the Chinese courts might apply the law of the foreign place.  Then the cross-examiner brought him back to the terms of 146 and said “Well, here you have got the two foreigners.  Might it not apply here?” and he said, “Yes, that’s a possibility.”  I am referring to 92 at line 35.  And that is where the cross‑examiner left it. 

MR GRIFFITH:   There is a bit more, with respect, your Honour, because he refers to issues such as the taking into “account some other issues . . . construction of the buildings” and other aspects so he does refer to some factors which were involved here.

KIRBY J:   Yes, but he does seem to leave it as a possibility.  He does not describe what would actually happen in the courts of Wuhan but he does acknowledge that it is a possibility that the judge of the court might be in the same position as Justice McKechnie, having to hear evidence on Australian law of what the Australian law would apply.  That is right, that is a possibility, that is a possibility.

MR GRIFFITH:   Your Honours, on some underground stations in London there is a warning when a train comes in “Mind the gap”.  Now, with respect, it is really an issue is the Court prepared to fill the gap or is it prepared to say look, where are we here, the plaintiff led no evidence and is attempting to construct an affirmative case that it was for her to prove with respect to whether my friend calls it so-called or not single renvoi when there was absolutely no evidence led initially and just these scraps as reference points.

GUMMOW J:   It may have been a bit more than a scrap, there may have been some careful thought required before there was re-examination.

MR GRIFFITH:   Your Honours, we can only rake over the transcript.

GUMMOW J:   Well, indeed.

MR GRIFFITH:   There obviously was not enough careful thought.

HAYNE J:   We do not know what was in counsel’s brief.

MR GRIFFITH:   Your Honours, on page 92 Justice McKechnie says to plaintiff’s counsel:

Does that mean, Mr Staude, that Renault Industries v Zhang might take me to China and article 46 might bring me back again?

STAUDE, MR:  Your Honour, I hope that you won’t need to go there at all if my submissions are correct.

There was no subtle reference there and back, your Honour, inextricable circles…..did not get a foot in the door.

GLEESON CJ:   As it happens, it is not an outlandish possibility.  As it happens, there has been a considerable stream of judicial officers from Wuhan visiting the Judicial Commission of New South Wales over a number of years. 

MR GRIFFITH:   Yes, your Honour, we got an article from one that we had sought to present this morning and to age me, your Honour, I went to China in 1976 and met the Vice-Chancellor of Peking University.  He said, “What do you want?”  I said, “Maybe we could meet lawyers”.  He said, “We don’t have any”.  I only later discovered he was a law graduate from Harvard, but this is all recent development but one can only do the best one can but it is for plaintiffs to do the best they can and the plaintiffs did nothing.

KIRBY J:   Accepting that, what is wrong with Justice McKechnie saying, “They don’t have many lawyers there.  They have this article.  The article on its terms says that they may do this.  The expert comes along and says it is a possibility.  In its language it is clearly a possibility and therefore I will draw the inference that that is what would have happened in this case”. 

MR GRIFFITH:   Your Honours, implicit in that is, we say, to accept the possibility of single renvoi in tort and we say that is a very original step in a common law jurisdiction for this Court to take after the effect of Pfeiffer and Zhang is to open what was a previously operative position that ‑ ‑ ‑

KIRBY J:   It would be original if you were dealing with a problem of France, but when you are dealing with a problem of China which, as you have correctly said, has not until recently had a developed legal system, you have an expert who says it is a possibility, the article clearly contemplates that it is a possibility and it is one which arguably fits in with their economic interests to encourage nationals to come and to leave them to sort out their own complaints as for example between a resident of Australia and a Victorian State corporation. 

MR GRIFFITH:   Your Honours, our position is that such an approach is inconsistent with the resolution of these issues by the Court in Pfeiffer and Zhang to opt for certainty with no flexible exceptions and that my learned friend as he was putting his submissions with respect to that, though accepting the exclusion of no flexible exceptions, in effect was postulating, your Honour, the aspect of the approach which he put as enabling, in effect, to have a flexible result by a different method.

KIRBY J:   Just remind me, what were the flexible exceptions which were rejected in Zhang?

MR GRIFFITH:   Your Honour, it is a bit hard to express the way that they are put, but they are reflected in the English Law Reform provision that my learned friend took you to, which picked up some of the expressions to say, really, “In all the circumstances, when it is appropriate to do so”, et cetera, et cetera, the court could apply some other law.  I think subsection (5) of the English provision in some way was an encapsulation of that.  What we say, your Honours, is that is all very interesting, there are arguments for it, but it is an argument which is inconsistent with the Zhang rule, unless and until there is some legislation here to that effect, and there is not.

GLEESON CJ:   A flexible exception would cover the situation, would it not, where an English husband and wife went for a motor trip in their car on a Sunday afternoon, crossed the Scottish border, had an accident in Scotland and then returned to England.

MR GRIFFITH:   Precisely, your Honours, but the Court has set itself against flexible exceptions in Pfeiffer and Zhang and we say that is a decision made and is a given for the purpose of this consideration.  We say implicit in my learned friend’s approach is to adapt to the capacity which Professor Kahn‑Freund’s third proposition would admit is desirable, namely, an element of uncertainty to provide for a better and more effective rule for particular cases.

Your Honours, that is a choice issue that we can only point to the Court and indicate our position that it should not be taken up.  We say that reasons of certainty and the other aspects to which I referred the Court as to why Pfeiffer and Zhang were explained as getting the result they did, which is a two‑pronged result, lex loci with no flexible exceptions.  Some commentators, your Honour, even some members of the Bench, would say, well, a preferable course might have been, for example, not to go the way of both, but to have a more strict approach on the test of forum non conveniens.  A better result would be to embrace flexible exceptions.

That may be the case, but our position is that if there is to be a reintroduction of flexible exceptions that should be as such, not by reference to adopting a principle which we say has no intellectual support other than if the Court chooses to define the reference to the lex loci to be the extra aspect of the inquiry, namely, to reach the same result of the foreign court on the same facts, having regard to issues of nationality, domicile and other things that might be relevant with respect to the jurisdiction’s choice of law rules.

We see enough here of the difficulties in establishing even basic issues of foreign law, let alone to move through those various levels.  Your Honour, it is sufficient to indicate the difficulties which arise by looking at the situation here and thinking for a moment that if it is the case that a plaintiff can just have a go and rely upon the defendant either to spend whatever money is needed to be able to establish these matters or settle as best it can and save the expenses – if that is the position in Victoria, well, insurers will need to take that into account in fixing their premiums because it will mean there will be a position of uncertainty, rather than certainty. 

Your Honours, there is a limit to which counsel can assist the Court, with respect, on these matters.  That would seem to be the choice for this Court.  We do maintain the position that there is a basic approach which can be one which is loosened up, for reasons stated by Professor Kahn‑Freund and which is the most eloquent expression, even having regard to the plethora of writing on these issues even after the decision of the Court of Appeal, that one has a basic issue of approach and if, for example, the attraction is to sink into the local law and to say, “We substitute ourselves for a local court considering all these facts”, well, that will be the inquiry and parties will have to do their best in litigation about it.  Beyond that, your Honours, those are the submissions of the respondents.

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

MR WALKER:   Your Honours, adoption in Zhang of lex loci delicti did one thing manifestly and implicitly did not do a different thing.  The thing it did was to require investigation by proof or admission or the outcome of intelligent silence between the parties in pleadings and proof of the lex loci delicti, and to talk of difficulty in this case as driving a certain outcome of common law development in the proof of a foreign law is to attack a premise which was adopted by this Court as a proper task for courts in Australia to undertake, namely the proof of foreign law.

In any event, in our submission, like floodgates arguments concerning financial liabilities of certain classes of defendants, arguments about difficulties imposed upon litigators or litigants, in our submission, need to be examined carefully to see what empirical support they may actually have.

GLEESON CJ:   I think Justice Wheeler’s reasoning was that in Zhang the Court opted for an inflexible lex loci delicti rule rejecting a flexible exception and now we have come up against a lex loci delicti which contains a flexible exception.

MR WALKER:   That is right, and there was a choice made for the common law by this Court, a choice recognising that other cultures – and they were quite numerously before this Court in Zhang – had chosen flexible exception.  We knew that the common law in other places had already developed flexible exception before legislation.

KIRBY J:   But one would have thought that you would then have some proof of what actually happened.  What did the words “may also be applied” mean?

MR WALKER:   Your Honour, can I address that in just one moment.  That directly flows from the thing that Zhang certainly, or we would say implicitly, did not do.  But as to the thing that Zhang did, there is no avoiding a reading of Zhang for the common law in this country that it required proof of lex loci delicti in a world which was explicitly understood by this Court to include legal systems with flexible exceptions for, for example, what we would call choice of law in tort.  But still this Court said, choose their law, apply their law in that artificial and special way in which their rules and standards become part of our law as the choice of law rule in Australian common law.  That is the thing it did.

The thing it did not do was to abolish the prohibition against application evidence.  What it did not do was to make a foreign expert, not even a foreign judge, who might be a fairly lowly practitioner - that would survive section 79 of the Evidence Act - a delegate of the Australian court to prepare a report which, using all the nuances that we are told are available better to natives than to foreigners when thinking about a legal system, will say this is how understanding, interpreting and applying the foreign law, these facts would produce a result.  That is application evidence of a kind which has been plainly and, with great respect, correctly prohibited in our law, not least because of what it does to the adjudicatory function of an Australian judge.

KIRBY J:   Well, it cannot usurp the function of the judge.

MR WALKER:   Quite.

KIRBY J:   But you have to give the judge the foundation.

MR WALKER:   Quite so.

KIRBY J:   I mean, otherwise, the purposes of Zhang which were to search for the expectation of the parties, search for a consistency and search for what is actually done in the place of the wrong, are lost.

MR WALKER:   Yes, your Honour, but in this case it is therefore wrong to ask for evidence from Mr Liu as to how a Chinese court would have decided this case when the application under 146, second sentence came up.  That is application evidence.  What he can say, content evidence, is, what does the second sentence of 146 mean when it used the word - and I do not know what it is or even if it is only one word - which has been translated in their evidentiary exercise by the English word “may”.

Now, the very translation, the interpreter’s exercise which is evidentiary in the Australian court to produce the finding of fact as to the Chinese law, contains content evidence.  Whatever the Chinese idiograms meant, their semantic ‑ ‑ ‑

KIRBY J:   That may be so, but it is on your head.

MR WALKER:   But, your Honour, this is for us because the semantic content in English as evidence was before the Australian court.  The law means that you may, and your Honour Justice Kirby has correctly, with respect, drawn to attention, in a response that we adopt and urge to my friend’s focus on page 90 of the record, page 92 of the record, where it is crystal clear that what the expert was saying when asked - and we can mine evidence from wherever it becomes available in a forensic contest, you do not have to call it - he said, it is a possibility and the judge will use fairness and justice, that will be the way in which he proceeds.  So that was content evidence.  It means it is possible.  It is evidence as to how it is exercised, it is by reference to fairness and justice, and this Court would understand that that has real substance, however discretionary it may appear, because this Court supervises the work of courts which daily adjudicate matters which in statutory terms require, for example, decisions to be made according to what is fair and equitable.

KIRBY J:   And they are the words that Justice McKechnie later used himself, are they?

MR WALKER:   Yes, and that is why he used it and he was using the content evidence that was produced on page 92 for the application which it was his task and not Mr Liu’s to ask to perform so that there is nothing in the complaint ‑ ‑ ‑

KIRBY J:   In fairness the words were put into the mouth of Mr Liu by the cross-examiner but on the other hand he did appear to embrace them.  The question is at page 92, line13.

MR WALKER:   Yesterday I gave references which I will not repeat to the earlier forensic genesis of that expression.  If a witness takes and repeats the words, they are none the worse for that.  That is the function of a leading question.  Your Honours, it is for those reasons that there is nothing in the vigorous argument mounted by the respondent here that there is a gap in the evidence in relation to how the second sentence of 146 should have been or would have been applied in China and, in our submission, if follows as a matter of the principled extension of what Zhang did hold and what Zhang certainly did not accomplish in relation to the prohibition against application evidence that page 92 sufficed and the forensic choice not to re‑examine was, with great respect, not one which falls to be criticised, certainly from the Bar table in this Court.

For all one knows, bearing in mind what we know in the record concerning the absence of any precedent doctrine, not allowed to cite cases for their decisional precedent value - see page 61 of the record in China – for all we know counsel was very well advised to leave it at the point of fairness and justice.  That is the only guideline a Chinese judge gets as to what is fair and just.

KIRBY J:   But it is odd that this was evidence in the defendant’s case, that you did not even bother to call an expert at all.

MR WALKER:   Your Honour, one does not have to call evidence.  One has to have ‑ ‑ ‑

KIRBY J:   What, you think it would have been enough to put 146 in?

MR WALKER:   One has to have evidence.

KIRBY J:   I appreciate that, but I am testing your sort of sotto voce criticism of the lack of re-examination, but the fact that you did not even ‑ ‑ ‑

MR WALKER:   I have just said, your Honour, I do not criticise it because for all we know what page 92 produced was accurate, and the high-water mark of what anybody could get on the point, for either party.

CALLINAN J:   Anyway, the respondent put in the articles.

MR WALKER:   Yes, yes.  That is something I have already observed.

CALLINAN J:   And having put them in left one of them, at least 146, relevantly unexplained.

MR WALKER:   Your Honour, it is for those reasons that, in answer to Justice Kirby’s question of my friend, yes, there is evidence about what “may” means.  “May” means it is something possible to be done according to the adjudicator’s notion of fairness and justice. 

In relation to the question of incomplete proof by evidence of the content of the foreign law, we say these things.  First, our common law should not, in accordance with its traditions, promulgate a doctrine which would prevent economy of adversarial litigation by pleadings which set up, through admissions, conventions between the parties for the decision of their dispute, not to be second‑guessed by the judge.  Nor should the Court promulgate any doctrine which would prevent parties being economical in what they prove or how they prove matters, either by inadmissible material being conveniently agreed by consent, which happens time and time and time again in the proof of foreign law, when an article is just handed up. 

Your Honours have seen some of the footnoted cases referred to yesterday, in particular by Justice Heydon, that they are reported cases where the parties have obviously persuaded the judge, “Let’s do without the $44,000 expert.  Here’s the equivalent of the digest of foreign law and we ask you, read it as if it were an English statute”.  In our submission, the common law would be very slow to stop that kind of, if you like, party autonomy in litigation which reduces money, reduces time and allows people to say, “Look, I can have a three‑week seminar on Israeli law but I can tell now there’s not going to be a difference that’s going to matter on my facts or my dispute between that and what Mr Justice X would regard as the law of England and Wales”.

KIRBY J:   But footnote 32 said that in 32 out of 40 cases they got it wrong.

MR WALKER:   Your Honour, what matters with parties is the decision.  What may matter for academics is that the decision is based on a fallacy, but that is no criticism of the rule.

KIRBY J:   Justice normally likes to be concerned with getting a decision right.

MR WALKER:   Yes, but “right” does not necessarily mean ‑ ‑ ‑

KIRBY J:   Or any old decision will do.

MR WALKER:    ‑ ‑ ‑ one has to turn over every stone to see whether there are subtleties that the parties had no interest in.  If neither party has an interest in drawing a particular subtlety to light, then why would a common law court say, “Hold hard.  Are you parties quite clear that the question of, say, the New York attitude to privity of contract is quite so straightforward as you think?  I’ve been there, I’ve read some books.  I think it’s really quite complicated”.  The parties ought to be able to say, “Your Honour, we ask you to proceed on the basis that paragraph 16 of the statement of claim has pleaded what it was and paragraph 16 of the defence admitted that, and that’s it”.  We do that for reasons that have to do with our wanting a dispute settled and parties are entitled to make admissions so as to bring about conventional states of affairs that academics can criticise for not being accurate, but then parties are not scientists and judges are not researchers.

CALLINAN J:   Mr Walker, why should we assume that fairness or justice compels Australian tort law rather than Chinese law?

MR WALKER:   Your Honour, in the time I do not wish to repeat what I have said in-chief about that.

CALLINAN J:   Well, just summarise.

MR WALKER:   Partly in answer to your Honour’s questions yesterday to me, the list of factors - and we would call in aid both the 137 and 146 factors - are enough, in our submission, to pile up a compelling case to justify the judge’s decision.  It does not mean one agrees with it; it means that an attack on it ought fail at the threshold.  Those are factors which of course to a reasonable mind might amount to justice and fairness.

GUMMOW J:   Is one factor the factor that the Australian choice of law rule goes to the locus delicti?

MR WALKER:   That is really a starting point ‑ ‑ ‑

GUMMOW J:   You will recall I asked your opponent a question about single and double renvoi which I hope you are not going to glide away without enlightening us.

MR WALKER:   May I defer an answer to that for just a minute, your Honour.

GUMMOW J:   Yes, all right.  It is important for the notions of consistency of outcome, I think, on which you place so much stress.

MR WALKER:   Indeed so.  Finally in relation to the question of the proof or presumption matters, obviously this Court in making the common law would not lay down implicitly some requirement for what I called yesterday an immersion program for the Court in foreign law, let alone parties to assemble encyclopaedic material.

That does leave the problem that yesterday I called the interstitial use of the presumption that the lex causae chosen by a choice of law rule from a foreign system is the same as lex fori.  It obviously produces some impossible hybrids if you have, as it were, spotlights on part of the foreign law and the gap that needs to be filled, and it may be a large gap, being assumed to be in accordance with the local law. 

There are difficulties of a kind which can be seen in the discussion of this matter by Professor Briggs in his book to which we give reference in footnote 9 at page 7 of our submissions in-chief.  Could I add to those references page 6 of that book, where he makes reference both to the resort by judges to textbooks and the like, deprecatingly ‑ ‑ ‑

GUMMOW J:   Page 16 we have.  What are the other pages?

MR WALKER:   Page 6.  It is significant of course because it immediately precedes the discussion of renvoi, and what the learned professor says is it is a matter of proceeding faute de mieux.  It is not a matter of anyone believing that the presumption has any pretension to reliability or accuracy.  And that comes back to how we opened this appeal ‑ ‑ ‑

HAYNE J:   But its root lies in an adversarial system in which the judge is presumed to know, or be able to ascertain, local law, but is likewise presumed to know nothing of foreign law and not to be set forth on those waters unguided.

MR WALKER:   Quite so, and Professor Briggs makes that very point.  Now, in our submission, that means that I think in the three or four versions that I adopted as cascading alternatives in answer to Justices Heydon and Callinan yesterday on this point, they all have this result, that in this case it was proper for Justice McKechnie to read Article 146 as he did.  Nowhere does he say, “I am applying Western Australian law as such”, but it was the exercise of reading a text, which was a legal text. 

If it came down to such a controversy, and the parties clearly were not inclined to make it so in this case, then, of course, what Mr Justice Pearson did in Jabbour is something which might require attention from this Court in a case where that really mattered.  The assumption made there may well be a species of the presumption, referred to by Professor Briggs.  It may simply have been a determination not to allow a decision to go undecided for a gap in a kind of evidence which the parties were entitled to put economically before the court, with what they did not say being as important as what they did say.

In that respect, in our submission, it is to be recalled always this is an Australian court deciding something according to Australian law which happens to have within it factual material – and I stress “factual material, not a law from another place but a factual finding about laws in another place.  In our submission, when one does that, there is no difficulty in the way in which the learned trial judge proceeded in this case and there is no difficulty in relation to the perhaps alternative way of looking at that as a resort to the presumption.

Your Honour the Chief Justice asked questions about what were the claims.  The matter is not simply answered, but may I give this sketch and some references.  There was a Victorian contract law, there was a tort claim which was at one time said to be Victorian as well – see the record 36 at line 40.  There were what might be called Chinese tort claims, where the issues between the parties developed as to whether it being a Chinese tort meant that that was decided according to Chinese or Western Australian law, and one sees a development from both sides of the record in the debate about the issues in the pages to which we have already drawn attention, pages 32 lines 10 to 20, page 37 lines 1 to 10, page 38 lines 25 to 45, and there is a discussion with the judge at page 42.  Now, they were in the openings.  They were before Article 146 entered the story.

After Article 146 entered the story it was, as I said yesterday, always a fallback, opportunistic perhaps, but this is the administration of justice, and if facts come to light which would affect the result, according to a proper appreciation of the law, then when there is no protest by parties based on pleadings – and there never was – the parties remake the issues, the decision conforms to the way in which the parties presented and fought the issues.  That is reflected in the trial judgment, reflected in what is not in the grounds of appeal and reflected in the Full Court judgment.  It is for those reasons that 146, entering as it did into the case, is a matter of history.  It is not a lack of virtue in the arguments we now present. 

My friends used the example of the Australian choice of law, lex loci delicti, designating a foreign country whose own choice of law is the proper law of tort, understood in one of the variant ways in which that might be expressed, and said that that would lead to disparate results.  Well, it does not.  There is only one decision being made.  We are not talking about a comparative question:  what is the choice of law rule in countries A and B?  We are talking about the outcome of a case, and there is no disparate result when the lex loci delicti says of that foreign ‑ ‑ ‑

GUMMOW J:   We are worried about forum shopping, are we not?

MR WALKER:    We are, and Zhang, lack of flexible exception, combined with Voth is a choice of law disincentive to forum shopping so long as to adopt, with respect, Justice Hayne’s reference to Professor Kahn‑Freund’s observations, so long as one is astute to ensure that there is not, as it were, an arbitrage opportunity provided by different results which can be seen to give an advantage or disadvantage to one or other of the parties, particularly the person who goes first as plaintiff.

KIRBY J:   There were two relevant disadvantages here:  one, the time limit; and two, the very limited recovery under Chinese law.

MR WALKER:    With respect, that is the wrong comparison to found.  We are not comparing limitations periods.  We are comparing the difference between suing in Western Australia or suing in China.  That is the advantage/disadvantage calculus that Professor Kahn‑Freund is pointing out.

KIRBY J:   If you are out of time for a one-year time limit, that is a big disadvantage.

MR WALKER:   But, your Honour, in both cases – and this is the point of Zhang and the point of our argument - our choice of law rule should ensure that wherever you sue, be it in our court where our choice of law obtains or in China which is the place of the tort, the same outcome would have ensued.

Now, leaving aside the question of the discretion in 146 just for the moment, that means in the case that our learned friends posited, lex loci delicti chooses a lex causae which has a proper law of tort notion.  Then so long as one is faithful, applies the whole of the law without any of these artificial excisions that my learned friend would require, then whether you sue in Australia or whether you sue in that foreign country, the proper law of the tort will supply the rules or standards which in an Australian court, as a matter of Australian law decides the outcome, or in the foreign country as a matter of proper law of tort, their choice of law will produce the outcome, and subject to the differences of systems and the differences of judges, and after all, we know that in the lowest people’s courts in China, many of the judges are military veterans, not lawyers, there are going to be differences of the lost in translation type that I talked about yesterday.  But doing the best we can, the system that we propose does promote a minimisation of different outcomes depending upon forum, and that is my answer to Justice Gummow in relation to what about forum shopping.

If you excise choice of law, then, as my learned friend frankly said in answer to Justice Hayne, you are manifestly left with – indeed, you embrace or avow at the outset – a difference of result.

McHUGH J:   You are arguing for the foreign court theory, are you?

MR WALKER:   Your Honour, I wish to resist – and this now leads to my answer to Justice Gummow’s question on notice, as it were – I do with to resist, with great respect, having my client sign up as an adherent or believer in one or other of the academically described or taxonomised schools of thought.  They describe most things that either have not happened, or that the writer would like to happen, or they describe a construct put on an unruly set of examples where exceptions are tendentiously pulled, exceptions if they do not fit.  In our ‑ ‑ ‑

KIRBY J:   Yes, but that is the difference between you and us.  You just want to win a case.  We have to do it in a principled manner.

MR WALKER:   If I am to win, your Honour, I hope it is because the principles we suggest are principles which will promote the underlying, indeed, the overt, purpose of a civilised, sophisticated choice of law rule, under Australian common law, for torts, being Zhang.  The purpose is, at one high level, to promote harmony of decision, and perhaps, functionally, that in turn is simply a means to an end, which may not sound conceptually higher, but which may be more important to the polis, namely, an end of forum shopping or a disincentive to forum shopping. 

It does not matter which way one puts them around, they are, so this Court has made crystal clear, a loadstar for common law incremental development in relation to this choice of law rule, namely, is what is offered by one or other party more or less likely to promote decisional harmony?  And between the parties before your Honours, it is clearly the appellant’s solution that does that, because we say, if China would send it to WA, then, in choosing China, do not artificially say, “Don’t go to WA”.  That is what they say.  In our submission, for reasons ‑ ‑ ‑

McHUGH J:   Yes, but what you are arguing is really the foreign court theory, and it works all right as long as the foreign court does not also apply the foreign court’s theory.  Then you start to get into trouble.

MR WALKER:   But your Honour is now talking about a foreign court actually deciding how to apply its choice of law rules.  There is no foreign court at play here.  There is a foreign system of law and it includes choice of law or particular status discriminations, which is a more accurate way of describing the provisions, in its law that requires something to be done in terms of the dispute settling rules or standards to be applied between the parties.  You do not posit that there is a judge somewhere in China worrying about what would happen under WA law, you simply observe that it says it should be done by the law of, in this case I will call it the nationality, and at that point, for reasons pragmatically selected by Lord Justice Scrutton, for reasons which have been defended in the materials that I must not repeat, that have been cited both in my address in‑chief and in written submissions, you have obeyed your choice of law rule by looking to the lex loci delicti.  You do not have to keep obeying it in something absurd ‑ ‑ ‑

McHUGH J:   What happens when the foreign jurisdiction does not have a renvoi rule or its equivalent?

MR WALKER:   You do not need renvoi.

McHUGH J:   I know, but why can you not take the simple solution that the Law Reform Commission of this country adopted, namely, that the choice of law rules for this country refers to the internal law of the place and we apply that as our choice of law.

MR WALKER:   Your Honours, particularly given the time, I must not repeat what we have written and said in‑chief, but in very short compass it is this.  What we have put, if you have to put a label on it, is probably a single renvoi solution.  But when we use renvoi, one of the reasons why the epithet so‑called is appropriate, one does have to ask what is one talking about and from whose point of view.  In this case, for example, the renvoi in question is the phenomenon that the Chinese choice of law rule looks to the law of the nationality and it is idle to ask does China have a doctrine of renvoi because they ‑ ‑ ‑

McHUGH J:   Why, in this case, can we not say ‑ ‑ ‑

MR WALKER:   It is their choice of law.

McHUGH J:    ‑ ‑ ‑ the law to be applied here is the internal law of China, that includes Article 146, and we do what the Chinese court would have done.

MR WALKER:   Because this notion of a so-called internal law is belied by 142 and 146 itself.  Why are they not internal laws?  They govern what happens internally in China.

GUMMOW J:   His Honour is suggesting they are, I think.

MR WALKER:   And I am saying that the word “internal” is a tautology.  You simply say what is the law of the place of the wrong, what does it say about this dispute, or these rights and obligations.  In our submission, just as you would say that if the law of the place of the wrong says, “Bad luck if you don’t sue within three years”, and we say that is part of the lex loci delicti, so too if it says, “Bad luck, you can’t rely upon a right to access, for example, Chinese welfare funds because you’re not Chinese”, or, “You’ve only been naturalised for two years not five years”, and you ask yourself what would happen in China, not in a full foreign court theory approach, because we stress one does not start sitting as a Chinese judge, you are asking on the basis of what the evidence allows you to find about the relevant parts of foreign law, the relevant parts meaning you do not ask about procedure, whatever that is, in comparison with substantive.

It is for those reasons that the dichotomy set up by the notion of internal is quite wrong, and to see things as neatly categorised into private international law and so-called internal domestic or municipal law, is a fallacy that can be addressed probably by reference to the first chapters of all proper treatises in this area, that private international law is a set, a part of, the law, municipal and domestic, of the country which has it.

McHUGH J:   Yes, but we are dealing with the private international law of this country and what rule it should formulate.

MR WALKER:   Yes, and your Honour asked me with respect to ‑ ‑ ‑

McHUGH J:   And why should we say, “We will apply Chinese law as part of our choice of law”, that includes Article 146, the limitation period and everything else.

MR WALKER:   Because Zhang says lex loci delicti and because there is more principle to justification in treating that as all the relevant part of that law rather than an artificially truncated part of that law, and if I go further, your Honour, I really will be trespassing on the Court’s time by repeating myself in-chief.

GLEESON CJ:   Could I just ask you one question prompted by that, Mr Walker?  Has the argument proceeded on the assumption that if the second sentence of Article 146 applies, then Article 137 does not apply?

MR WALKER:   Yes.

GLEESON CJ:   Is that self-evident?

McHUGH J:   It is not self-evident to me.

MR WALKER:   That is a different question from your Honour’s first question.  Yes, the case has proceeded - not simply the argument in this Court – the case has proceeded on that basis; that is, that success under 146 for us meant an Australian limitation period, success under 146 for the other side meant the Chinese limitation period.  So the answer to your Honour’s first question is yes it has proceeded that way, and that is the way the parties have by the framing of issues, particularly in the Full Court and in this Court ‑ ‑ ‑

GLEESON CJ:   I am rather sorry I ‑ ‑ ‑

MR WALKER:    ‑ ‑ ‑ selected a view about the interrelation between 146 and 137.

GLEESON CJ:   Well, I apologise for not raising this earlier, but it was really prompted in my mind by the question that Justice McHugh asked.  A possible point of view might be that the second sentence of Article 146 is dealing with something other than time limitations.  There is no evidence, I suppose, about that.

MR WALKER:   Your Honour, what can I say in reply about that – given the way the case has been framed and argued – other than, yes, that may have been a possible view, the parties did not place before the trial court any evidence by which that, if I may say so with respect, interesting thought could have been pursued.

McHUGH J:   Well, I am sorry I did not raise it before, because it has been in my mind from the beginning of the case.

MR WALKER:   But, your Honour, that is the difficulty, with respect, with having, and I do not make any complaints about anything, but when one has the whole of the General Principles in an appeal book, and one not unnaturally reads it to find out what it might say and mean, one thing, with respect, that both counsel and the Court, given section 73 of the Constitution, has to be aware of – this is foreign law after all – is making it up again, that is, going back to the advice on evidence stage before the trial.

CALLINAN J:   Mr Walker, you are helped a little bit in relation to that question, I think, by the answer at the top of page 92. 

MR WALKER:   Yes, your Honour.

CALLINAN J:   Which really contemplates that somebody has brought an action or being able to bring an action in China ‑ ‑ ‑

MR WALKER:   They can make such an application.

CALLINAN J:    ‑ ‑ ‑ and then they can make an application.

MR WALKER:   Yes.  However, the Chief Justice, with great respect, is right in observing that page 92 does not condescend, I suppose – why would the cross-examiner have done it – does not condescend to explain whether that is an answer to an Article 136 bar and the mere discretion in 137 which had earlier been explained.  It is for those reasons, in our submission, that the possibilities that one sees, one cannot help but see, and, with great respect, it is not only 137 and 146’s interaction, there are other provisions which I have not spoken about.

GUMMOW J:   Why would you stop at 137?

MR WALKER:   There are other provisions I have not spoken about in the General Principles, which could have given rise to other theories of the case.  Under Chinese law, there is no evidence on it.  I am not allowed to do that, and, with great respect, neither are your Honours.  In that regard, could I remind your Honours of the admonitions which happen, for example, as a convenient reference, to be collected as having been administered by common law courts for a long time to themselves about this matter of what I have called, making it up from the material that we have in appeal books.  Dicey and Morris ‑ ‑ ‑

GLEESON CJ:   I think there is some other evidence that might help you on that point, too.  I have a recollection that Mr Liu was at pains to make the point that those limitation periods are substantive.

MR WALKER:   Yes, extinguishing. 

GLEESON CJ:   Yes.

MR WALKER:   Ironically, that was taken up – he was tackled by the cross-examiner on the basis that because of 137, which means that any so‑called extinguishing could be put off, prevented, therefore what he had said about it being substantive – suffice it to say, there was a confusion of concept to be seen in that part of the transcript.  Your Honour does correctly recollect it.  In any event, the characterisation substantive/procedural, if it needs to be done, is according to our likes, not theirs.

The reference in Dicey & Morris is the 13^th edition, volume 1, in the section on rule 18, so‑called, in particular the passages at 9013, page 225 and 9015 at page 227. 

My friend referred to Rome II.  It is not quite a good enough answer for us to say, well, it has not happened yet, because, with respect, my friend’s prediction is almost certainly well‑founded that something of that kind will or is about to happen.

Your Honours have the explanatory memorandum, which has the text at the back of it.  It is pages 11, 12 and 28 in the explanatory memorandum – I do not want to take your Honours to it – say things about renvoi which are by no means self‑explanatory as good explanations for an attitude about ‑ ‑ ‑

GUMMOW J:   There are two grounds put forward, expectation of parties and all too difficult.

MR WALKER:   Yes.  I have responded to those in substance before.  I simply say, respectfully, that they are not persuasive demonstrations of the points asserted as conclusions.  You will see, in any event ‑ ‑ ‑

HAYNE J:   And all that against a background of flexible exception.

KIRBY J:   And as well as that ‑ ‑ ‑

MR WALKER:   Quite so because one goes to the proposed Article 3, particularly ‑ ‑ ‑

KIRBY J:   This is operating within Europe, so that ‑ ‑ ‑

MR WALKER:   Yes, particularly subparagraphs (2) and (3) of Article 3 one sees exactly what Justice Hayne has observed.  There are uncertainties inherent in this as soon as one introduces flexibility, something to which Professor Kahn‑Freund referred in the section about flexibility.  It is not correct.

HAYNE J:   The flexible exception is directly antithetical to any application of renvoi.

MR WALKER:   Yes, your Honour.  It takes a fundamentally different approach to the question.

HAYNE J:   You have started at a different premise.

MR WALKER:   Yes, and that is why, in answer to Justice McHugh’s question, it is Zhang and what needs to be taken from it, against the background of Oceanic Sun and Voth, which compels for this Court, rather than for Parliament, the answer in favour of the approach that we put.

GUMMOW J:   Well, wait a minute.  I am not sure you have really dealt with Lord Justice Scrutton, or, to put it more precisely, where you stand in relation to his ringing the bell, as it were, at the stage where he would ring it, because that has an effect of undermining what you have just been talking about, does it not, namely, certainty and uniformity?

MR WALKER:   No, there is no increase of uncertainty by what we propose to the contrary and, in a broader sense of the notion of certainty, there is an advantage.  If I may explain, there is certainly nothing uncertain about saying apply the whole, the relevant whole, of the lex loci delicti, including what you might think is a choice of law rule or including laws such as Article 146, which might more properly be seen as discriminations on the basis of certain statuses.  There is no uncertainty in that.

GUMMOW J:   But assume the evidence was that in applying 146 the Chinese say we are going to pay a great deal of attention to what the Australians say and they pay a great deal of attention to the place of the delict and so let us just stay in China.  Assume that had been the evidence, you would live with that, would you not?

MR WALKER:   Yes, that is, without any qualification, that is an approach that we enthusiastically adopt. 

HAYNE J:   But that shows that the driver which underlies all of this is not just certainty.  Certainty is there, but it is the avoidance of differential outcomes.

MR WALKER:   Yes, and I must not repeat myself any more than I have.  Your Honours, in relation to the Oceanic Sun, Voth, Zhang and, with respect, to the homeward trend discussed by Professor Kahn-Freund, could I remind your Honours of the reference in the majority in Voth 171 CLR at 566 to Justice Gaudron’s comments in Oceanic Sun about, in a quite different context but a relevantly deep policy of the law, like the quotation from Soulié’s Case, namely that all of the things being equal, there is virtue in a court applying its own law.  Now that is a pragmatic but principled reason for Lord Justice ‑ ‑ ‑

KIRBY J:   Somewhat old fashioned in today’s age of globalism.

MR WALKER:   No, that is a pragmatic and principled ‑ ‑ ‑

KIRBY J:   Sounds nationalistic to me.

MR WALKER:   No, your Honour, it sounds modest by judiciary.  We are better at doing what we know ‑ ‑ ‑

KIRBY J:   Well, we are better at it but it may not be the right and just thing to do in so many international relationships that are existing today.

MR WALKER:   But, your Honour, with respect, this is in a system where we have first paid full fidelity to lex loci delicti.

KIRBY J:   Anyway, we will not go down the Voth path.  I remain of my view.

CALLINAN J:   Probably more relevant to a question of appropriateness of forum than to this question.

MR WALKER:   Quite so, and that is why the references are in Voth and Oceanic Sun.  All I am saying is that the proposition that one ends up by reason of the Chinese Article 146 back in Western Australia is not to be seen as an outcome to be avoided.  If that is what the Chinese law does then well and good.

CALLINAN J:   That is why I said in Zhang I thought that the case should be tried in New Caledonia.

MR WALKER:   Yes, your Honour, but I was in dissent.

MR WALKER:   Yes, and the remitters by this Court under the Judiciary Act, of course, Pozniak v Smith shows a similar policy of the law.  Your Honours, there is an error in the appeal book.  The Full Court at 391 point 5 referred to 1997 as the date for adoption of the General Principles.  That of course would have had a dire effect on everything in this case.  My learned friend referred to them as being adopted in 1988.  On the materials in the book they were adopted in 1987.

GUMMOW J:   That is what they say, the last page.

MR WALKER:   Yes, but they also say in the passage I have referred to, “1997”.  Your Honour the Chief Justice finally asked about a general choice of law provision in the general principles.  One view – and this now is running into the problem of making it up without the evidence – of the first sentence of Article 146 is it might provide an answer to your Honour’s

question, but one would have had to explore would that first sentence of 146 have to be read in light of what the heading says is the subject matter of the chapter.

GLEESON CJ:   But it is not just the heading.  The first sentence of Article 142 repeats the heading.

MR WALKER:   And 142, yes.  I am also talking about the first sentence of 146, which it might be thought would cover the position of Chinese abroad.  May it please your Honours.

GLEESON CJ:   Thank you.  We will reserve our decision in this matter. 

We will adjourn for a couple of minutes to enable the parties to arrange themselves for the next case.

AT 12.19 PM THE MATTER WAS ADJOURNED