Regie National Des Usines Renault SA and Renault Automobiles SA v Zhang S192/2000

[2000] HCATrans 781

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S192 of 2000

B e t w e e n -

REGIE NATIONAL DES USINES RENAULT SA and RENAULT AUTOMOBILES SA

Applicants

and

FUZU ZHANG

Respondent

Application for special leave to appeal

GAUDRON J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 DECEMBER 2000, AT 9.33 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please your Honours, I appear with my friend, MR A.G. BELL, for the applicants. (instructed by Connery & Partners)

MR R.F. MARGO, SC:   May it please your Honours, I appear with my learned friend, MR A. SPENCER, for the respondent. (instructed by T.D. Kelly & Co)

GAUDRON J:   Yes, Mr Walker.

MR WALKER:   Your Honours, this Court should grant special leave to appeal in this case because it provides an ideal opportunity to investigate the consequences of two decisions of this Court separated in time, but significantly separated in time.  The first is Voth v Manildra and the second is Pfeiffer v Rogerson.  Pfeiffer, as your Honours know, left open and very explicitly the question which arose in this case as what we will call a threshold point.  To make that good, can I take your Honours, please, to page 40 ‑ ‑ ‑

GAUDRON J:   What do you say would be the governing law, anyway?  What do you say is the effect of the rule in Phillips v Eyre, anyway?

MR WALKER:   The effect of the rule in Phillips v Eyre, in our submission, in the manner advanced in Voth v Manildra, with one major qualification, is that the liability, both its existence and extent, that is, the extent of the acts or omissions which are actionable, will be determined by the French law.  That follows from the approach taken to the law of Missouri in Voth v Manildra and is, in our respectful submission, the way in which Phillips v Eyre, if it ought to be understood currently at all, should be understood at the moment.

Now, there are two qualifications that need to be uttered, each of them important.  The first one, of course, is that in Voth v Manildra your Honours said that the precise role of the local law, which in this case as in that case would be the law of New South Wales, need not be determined there and raises questions of difficulty.  That is certainly the summation of almost a century of learning, academic and judicial, about the double actionability rule.  One need only see the verbal slide from Koop v Bebb to McKain v Miller and Stevens v Head which described exactly the same body of doctrine as imposing lex fori in Koop v Bebb and lex loci delicti by the time one came through to McKain v Miller and Stevens v Head to see that both limbs of double actionability raise real difficulties.

KIRBY J:   You will have to start using English words.  I do not understand this foreign language any more. 

MR WALKER:   Your Honour, we have had this passage before.  I think, by majority, I am commanded to use Latin.  However, may I, and with some relief venture this English.

KIRBY J:   After the 70s, nobody learned Latin any more, so the law ultimately has to catch up.

MR WALKER:   Unless age limits on judges are reversed in some way ‑ ‑ ‑

KIRBY J:   Justice Gaudron tells me her son is majoring in it, but he is a real exception, like his mother.

MR WALKER:   Your Honour, may I say then, that the change - and I am now about to venture into English in a way which may justify the Chief Justice’s prophecy that when one departs the Latin, argument may enter.  But the law of the place where the court is held is that which Koop v Bebb, of course, described as the outcome of Phillips v Eyre, exactly the same doctrine with exactly the same result was described through the different spectacles one puts on, after some decades in McKain v Miller and Stevens v Head, as being the law of the place where the wrong giving rise to the liability was committed, a phrase which, of course, gives rise, as does the Latin, to the inquiry, how does one locate an omission?  Locating an omission is a common law technique which is no part, really, of this case.  It is sufficiently settled.  It will no doubt be troublesome in particular cases from time to time.

Your Honours, coming back, then, to the major qualifications in answer to your Honour Justice Gaudron’s question, the first major qualification is, of course, the one I have just said, namely the question of the local law’s role really does remain to be properly ascertained and the jurisprudential slide of nomenclature that I have referred to is a good example of that.  That is not settled in this country, or in any country.

The second major qualification which is of great practical importance for this case and of great and transcendent practical importance for the kind of commerce and international travel with which this case and its principles would be concerned is the quantification of damage, the measure of damage.  Now, in Voth v Manildra, by the then governing orthodoxy, it was said and categorically so, that that would be governed by the law of New South Wales as the place where the court was being held, lex fori.  The submission my learned friend made to the Court of Appeal, which did not need to be finally determined because of what they described as the prematurity of all these issues, was that the quantum of the claimants’ damages in this case would be determined in accordance with the law of the forum, New South Wales.  Since Pfeiffer v Rogerson, that is greatly to be ‑ ‑ ‑

GAUDRON J:   Under the Motor Vehicles Act, or whatever that legislation is that limits damages?

KIRBY J:   With all the caps.

MR WALKER:   That, of course, does raise an issue which did not need to be discussed in Pfeiffer, decided in the federal context, particularly in relation to what I am going to call an extraterritoriality in relation to the circumstances to which the law is meant to attach, rather than the presence of the litigants in New South Wales.  Private international law raises that issue acutely in a case of the present kind.  Since Pfeiffer it must be doubted whether in principle the quantum of damages ought to be seen as that which formerly called procedural, however oddly, will be determined by the law of the forum.  Nothing in Pfeiffer, we would respectfully submit, suggests that the adoption of Mr Justice Mason’s approach to substantive procedural in McKain v Miller by your Honours in Pfeiffer is one which was driven by anything peculiarly federal or imposed by section 118 of the Constitution. In our submission, it was a reordering according to reason, what the common law, in our submission, is looking for when it looks for the law which governs the rights and obligations inter se of parties.

KIRBY J:   It does seem an odd result, intuitively odd, that a statute of New South Wales passed by the New South Wales Parliament, presumably with territorial intentions, is now going to extend not by the Constitution to some other part of Australia ‑ ‑ ‑

MR WALKER:   But by common law.

KIRBY J:    ‑ ‑ ‑ but by the common law to some other country.

MR WALKER:   Yes, giving law ‑ ‑ ‑

KIRBY J:   A statute with its caps and limitations and all of its provisions, it seems an odd result.

MR WALKER:   Giving a law which is designed to govern the aftermath of conduct which the New South Wales Parliament can, as its limited sovereign, govern within its territory, namely the driving of motor vehicles, giving it an effect in a place where the New South Wales Parliament could not in its most hubristic moments ever think it could govern anything.

KIRBY J:   But that is the point, it is not sovereign, it is within a federation, and that was one of the points made in Pfeiffer.

MR WALKER:   No, which is why I say the limited power, the limited sovereignty, the limited power given to the New South Wales Parliament within the federation is only going to govern within New South Wales relevantly and, hence, in our submission, and with great respect, the intuitive oddity of the result for which the respondent here must be contending, however much it may be deflected.

KIRBY J:   If the Court were minded to think that this was a matter which either should be the subject of special leave or a referral to the Full Court, what is your attitude to the point that is made which seems to have some merit by the respondent concerning costs?

MR WALKER:   I am armed with instructions, your Honours, to give undertaking in relation to both the disposition of costs below and the incurring of costs in the Court above.

GAUDRON J:   Yes, thank you, Mr Walker.  Yes, Mr Margo.

MR MARGO:   Your Honours, the principal ground on which the application for special leave is opposed is that even if the special leave question were to be answered as the applicants contend it should, it would not follow that the actual decision of the Court of Appeal should be set aside.  That is because of the way in which the particular order and background of facts against which the special leave question fell for consideration by the primary judge and the view which the Court of Appeal took of what he did with it.

In the first half of his judgment, before he had considered at all the role of French law, the primary judge weighed a wide range of other relevant factors on both sides of the record, as he was enjoined to do by the Australian test.  He had to weigh, as Justice Deane explained it in Oceanic and as this Court has subsequently approved it in subsequent cases, including Voth - the applicants had to establish first that if the plaintiff were to move elsewhere, he would not suffer an injustice and, secondly, some vexation or oppression to them, in the sense as explained in Oceanic.  Those were two aspect of the same task.  They are not independent cumulative matters to be established, but the fact that the applicants bore that onus required them ‑ ‑ ‑

GAUDRON J:   But was the correct test applied?  I know there was reference to Voth, I think there was, but I had a feeling as I read it that maybe the test was not applied.

MR MARGO:   It was our submission to the court below, your Honour, that although his Honour had identified the correct test, he in fact fell into the application of a Spiliada-type test.

GAUDRON J:   Yes.

MR MARGO:   He was misled, perhaps, by some dicta in Voth and Grigor which suggested that one simply looked at connecting factors.

GAUDRON J:   So that is a matter that has not really yet been determined by the Court of Appeal, though, it is, your argument on that?

MR MARGO:   They rejected that argument, your Honour, expressly rejected that submission of ours.

KIRBY J:   Do you suggest that this case would be a suitable vehicle to reconsider Voth and consider Spiliada, something I have always thought was ‑ ‑ ‑

MR MARGO:   Your Honour, we cannot contest that it is an interesting test that requires clarification.  We submit it is an inappropriate vehicle – we had some bet as to who would be the first to use that phrase – because there are so many matters that can be raised by way of notice of contention that would uphold the decision of the Court of Appeal, that no matter what happens on the special leave question, it is our submission there is virtually negligible chance of that decision being shown to be incorrect.  If I could refer, for example, to the question of the onus and the failure to discharge the onus, we have submitted in our summary of argument that the Court of Appeal, in terms, upheld also that independent ground of appeal that the applicants had failed to discharge the onus.  The two main factual findings, and each of them is supported by subsidiary factual findings, and none of these factual findings were disputed in the court below, were, firstly, that if the plaintiff has to go elsewhere, there is a serious question whether he would have the means to obtain the kind of representation he would need to run a complex case of this kind.

KIRBY J:   Yes, but that cannot be a governing consideration because that would otherwise always be a factor that would tend to favour the forum, or 95 per cent of cases.

GAUDRON J:   Let it be assumed that you are right too, Mr Margo, and that ultimately it is determined in New South Wales, there is going to be a real question about governing law which one would imagine will be the subject of a special leave application here, either now or later, and would it not be better to have that determined in advance?

MR MARGO:   In our submission, no, your Honour, for this reason - and here I need to bring to your Honours’ attention two other factual matters that make this case unique in our submission.  The first is that it was conceded in the court below after evidence had been led by the applicants on the point, that the double actionability rule was satisfied.  The second is that the Renault companies were French residents and, one must assume, had the resources to prove French law, proved no distinguishing feature of French law that would create an injustice for them if the matter were heard here.  In those circumstances, we rely on the pleading rules in New South Wales which required the applicants to prove any foreign law, that is either under Phillips v Eyre or for any other purpose in which they sought to rely.  Given that they bore the onus of showing injustice, if they were to obtain a stay, some vexation or oppression to them, one would expect them to have raised any matter of French law relating to product liability that would advantage them if the matter were heard in France or New Caledonia, and would disadvantage them if the matter were heard here under New South Wales law.  There is no evidence of any disadvantage whatever.  On the contrary, there is an undisputed finding by the primary judge to the effect that the Renault companies can have a fair trial in New South Wales, not challenged at any stage before the primary judge or in the court below.  

KIRBY J:   It is still a preliminary question as to whose law applies and, as the applicant’s written submission says, it is intuitively a wrong conclusion to suggest that the New South Wales Transport Accidents Act or whatever it is called, will impose its caps on an accident that had no territorial connection with New South Wales.

MR MARGO:   If the applicants have adduced no evidence of what the French Law is, it is not incumbent on the respondent to do so.

KIRBY J:   No, but you would, presumably, or would you, would you be asserting that the New South Wales caps and limitations by statute imposed the limits on the judge’s determination of the entitlements of your client, or would the judge just ignore the New South Wales judge sitting in New South Wales, a statute of the New South Wales Parliament in respect of ‑ ‑ ‑

MR MARGO:   No, we cannot have it both ways, your Honour, but we are seeking to distinguish - I apologise for interrupting.

KIRBY J:   What is your answer?

MR MARGO:   We would be seeking to distinguish the case as a product liability case, not as a motor vehicle accident case.  I am not able to ‑ ‑ ‑

KIRBY J:   Yes, but in the end, you have to recover money for physical injury, pain and suffering, and so on by your client in an incident arising out of the use of a motor vehicle.

MR MARGO:   Yes, if we are caught, I cannot escape the conclusion which your Honour asks me to address that if New South Wales law applies and there is no proof of any other law, and there is a cap that is applicable under New South Wales law, we are subject to that cap.  But these are matters which, if leave were granted, would be argued on appeal.

KIRBY J:   But does that not raise Justice Gaudron’s question that it is really necessary to determine at the threshold whether you can take this course?  If you can take this course, you sail ahead and you have the cache of this Court; but if, in fact, it is not permissible, then you are sent as quickly as possible to the place which, on the face of things, seems the more natural place, the place where the incident occurred.

MR MARGO:   When your Honour says “where the incident occurred”, in this case there were two competing foreign jurisdictions.  There is the place where the vehicle was designed and manufactured, France, which the applicants themselves impliedly conceded, both at first instance in the court below, would be oppressive to the plaintiff because they argued only for New Caledonia; and then there is the place where the consequential loss occurred, or the motor vehicle accident occurred, which was New Caledonia.

KIRBY J:   Where you would have rights and remedies in relation to negligent or improper manufacture.

MR MARGO:   Yes, your Honour.

KIRBY J:   Under the law of the place, presumably, identical or very similar law to the place where the vehicle was manufactured.

MR MARGO:   Well, that is a matter that was in issue at both levels below as to what extent the law was the same or different.  But, your Honour, none of the parties have any connection with New Caledonia.  It is a purely incidental connection.

GAUDRON J:   Is New Calendonia not a part of metropolitan France?  I mean, is that not the theory of it?

MR MARGO:   That is the applicants’ theory of it, your Honour. 

GAUDRON J:   Is that not French constitutional law?

MR MARGO:   Your Honour, it was described in the evidence as a territory of France, not as a department.  There was one affidavit from the locally admitted solicitor to the effect it was a department, but the experts from New Caledonia refer to it as a territory.

GAUDRON J:   The department in France is only an administrative centre.

MR MARGO:   Yes.

KIRBY J:   You are making the case sound more interesting.

MR MARGO:   God forbid.  The evidence was left in a state of complete uncertainty as to what exactly the similarities or differences were or might be, but the big problem, your Honours, is justice to the plaintiff.  His Honour, the primary judge, appears to have assumed that the plaintiff bore some sort of onus to show that he would suffer an injustice if he were sent elsewhere.  In our submission, the test in Oceanic requires the applicants to show, as part of proving that this is a clearly inappropriate forum, that the plaintiff would not suffer injustice.  The state of the evidence is such ‑ ‑ ‑

GAUDRON J:   That is a question in itself.

MR MARGO:   We would submit it is clear on authority that that is the case, your Honour.  This Court has endorsed that test in a series of cases.  It is explained at length in the judgment of Justice Deane in Oceanic and has been adopted without criticism in subsequent cases, as your Honour is aware.

GAUDRON J:   But is the test not whether it is an inconvenient forum in the sense that overall it would involve serious vexation or oppression?

MR MARGO:   That is only one aspect of the test, your Honour.  That is so far as it touches the defendants, it must vexation or oppression.  Attached to our list of authorities are the first six pages of Justice Deane’s judgment, and at page 6 of the attachment, page 244 of Oceanic, his Honour discusses the two aspects of the description and the first is that the court must be satisfied “that in stopping an action it does not do injustice”, that is on the plaintiff’s side.  The second aspect is the one your Honour Justice Gaudron has just referred to and is the one commonly referred to, that is vexation or oppression.  Our point to the Court on this application is that neither of those aspects is satisfied on the evidence.  On the first aspect the evidence shows a serious concern which all the judges of the Court of Appeal shared and which the primary judge referred to repeatedly that the plaintiff may not be able to obtain justice in another forum because he will not get contingence arrangements.  On the question of vexation or oppression to the Renault companies, there is no evidence of any vexation or oppression and an undisputed finding that they can have a fair trial here.

KIRBY J:   Assuming that those tests hold or that they are not challenged, or that this is not the case where they will be challenged, you still have the problem that Justice Gaudron mentioned at the outset, that is to say, you get over that hurdle, but what law does the judge apply?  Then you run into the problem of applying the New South Wales caps and limitations which intuitively seems wrong, or having a judge apply the common law which in New South Wales intuitively seems wrong.  Therefore, we have a case where there is an applicant who is in a position to and does tender to the court an offer that it will pay the costs.  That is not always the case, Mr Margo.

MR MARGO:   Certainly, your Honour.

KIRBY J:   Therefore, we have the situation where it seems a suitable vehicle and it is an important issue, and it was left open in Pfeiffer.  You have wandered or driven into an important case.

MR MARGO:   As your Honours please, I cannot put it any higher than that, in our submission, there are so many points on which the primary judge erred, and so matters expressed and implicit in the Court of Appeal’s judgment that can support its decision, its actual decision, that whatever your Honours say on that question, the refusal of a stay is unlikely to be set aside.

KIRBY J:   Does it come down to this:  that you say it is not timely?  “Let us have our trial, let us work out all the points and then, if the applicant is still disaffected it will have a final judgment and that will be the time for it to come, and all the issues will be exposed and the Court can have its look at all of the questions involved in the case”?

MR MARGO:   It is, your Honours, it is a fall-back position, as your Honours appreciate, but, yes.  May I say this, that it may turn out that after a trial, if the evidence remains in the position it presently is, that there will be no issue of oppression or vexation through differences between French and New South Wales law.  The question of the cap may then be a very small legal point to be decided, or it may be that a settlement will be reached, or it may be that the matter goes elsewhere.  But if the consequences to Mr Zhang, because your Honours know his personal circumstances from the papers, is another two-year delay or possibly longer.  He commenced this case some considerable time ago.

KIRBY J:   It would not be a two-year delay, but there is a very practical consideration.  If you came up - just let us think:  you win the case, you get

through the Court of Appeal and the applicant comes again to this Court, the applicant might not then tender and might not be required to tender a promise of costs and you would be litigating this point at your client’s peril.

MR MARGO:   But, your Honour, we would then have, it is our anticipation if we succeed on liability, at least orders for costs of the trial, and the question would be quantum, on what your Honour has put to me.

KIRBY J:   You could lose those if you lose ultimately, you see.  However, I think I understand the points you put.

MR MARGO:   If your Honours please.

GAUDRON J:   Yes, thank you, Mr Margo.  Mr Walker, I take it that the undertaking is not to seek to disturb the order for costs below and to pay the respondent’s costs of the proceedings in this Court, in any event?

MR WALKER:   Yes.

GAUDRON J:   Yes.  On that undertaking – sorry.

KIRBY J:   Is there some other undertaking that you were being asked to give?

MR WALKER:   No, I think there is commercial - - -

MR MARGO:   I was seeking whether the offer would be extended to paying costs below, in any event, if that - undertaking to pay costs in this Court?

KIRBY J:   I do not think we would normally be concerned in that.  We can only cover our own costs here.  I suppose we could impose such a condition.

MR WALKER:   I have instructions to give an undertaking only in terms such as I have heard before, your Honours, but that is ‑ ‑ ‑

KIRBY J:   Yes, I think these matters ought to have been sorted out earlier if there was to be a dispute about them, and I have simply followed what was put in the book.

GAUDRON J:   Yes, upon that undertaking, there will be a grant of special leave in this matter.  Could I ask, how long do you think the appeal would take?

MR WALKER:   One day.

GAUDRON J:   One day.

MR WALKER:   Yes.

GAUDRON J:   Do you concur in that view, Mr Margo?

MR WALKER:   With calibration, of course, but that would be forthcoming.

MR MARGO:   My learned friend has more recently entered into the territory than we have.  I would have thought that is an underestimate.

GAUDRON J:   An underestimate?

MR MARGO:   Yes.  It depends, I suppose, how much can be done on paper.

GAUDRON J:   Yes.

MR MARGO:   But if your Honours are going to be asked to look at the world jurisprudence on lex loci delicti versus the three other alternatives.

GAUDRON J:   We would expect to.

MR MARGO:   Yes, but it would take much longer than a day.

GAUDRON J:   Yes.

MR WALKER:   …..all the stuff I have written, sorry, law of the place where the wrong was committed.  Your Honours, there are no interveners or constitutional points.

GAUDRON J:   Yes, I will indicate a day plus.

MR WALKER:   If it please the Court.

GAUDRON J:   But that is not to encourage anything other than brevity.

MR WALKER:   If it please the Court.

GAUDRON J:   Thank you.  Call the next application.

AT 10.01 THE MATTER WAS CONCLUDED