|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Australian Year Book of International Law |
Kent Anderson and Jim Davis[∗]
This is the third year in the revival of the annual review of Australian developments in private international law.[1] While the number of major conflicts decisions in 2005 is not extensive, the year was notable for the important High Court case of Neilson v Overseas Projects Corporation of Victoria Ltd,[2] and the significant judicial and legislative developments on the enforcement of interlocutory orders, particularly Mareva or freezing orders. Neilson builds on the two seminal High Court decisions of Pfeiffer[3] and Zhang[4] by clarifying the role of the vexatious issue of renvoi in the choice of tort law. This decision alone will provide a plentiful supply of grist to the mills of researchers, practitioners and students for years to come. One New South Wales Supreme Court decision and two trans-Tasman harmonisation reports on how foreign Mareva orders might be domestically enforceable have potentially sweeping practical effect. A number of other interesting developments can be seen in jurisdiction and enforcement law over the 12 months reviewed.
Our methodology and parameters are the same as in the past. First, we covered the period from 1 January to 31 December 2005. Second, we identified cases and developments by searching computer databases such as Westlaw, LexisNexis, and AGIS, as well as following traditional research methods. Inevitably, we will not find all possible material and, therefore, we strongly encourage colleagues to forward us any suggestions, particularly of their own publications. From this pool of material, we differ from the American quantitative approach seen in Symeonides’ annual review,[5] by qualitatively narrowing the material to those developments that we believe move the accepted rules of the discipline or are particularly interesting examples of established precedents. As such, this review is necessarily subjective and occasionally idiosyncratic. To justify that approach, we hope that our cumulative experience in teaching the subject, our collaborative approach, and our partiality for over-inclusivity address concerns.
This article is organised in traditional conflicts order. While this structure is consistent with previous years, we have reorganised subtly the internal sub-categorisations and not tried to maintain the numbering from previous editions. Section II covers developments in Australian jurisdictional law, including both discretionary exercise of jurisdiction and limits to jurisdiction. Section III reviews substantive choice of law questions including renvoi, choice of tort law, establishing domicile, and cross-border insolvency. Section IV considers enforcement of foreign judgments, in particular enforcing Mareva orders, consensual orders, punitive damages, and non-enforcement injunctions. We briefly conclude that 2005 might portend a more active phase for conflict litigation as many of the year’s decisions invite reference to the specific decisions on the facts rather than broad clear-cut rules that had dominated recently.
In discussing Tisand Pty Ltd v Owners of the Ship MV Cape Moreton (ex Freya)[6] in the previous volume, we noted that cases on jurisdiction over property are rare because they are normally straightforward. Cape Moreton presents one of the few occasions where a dispute over ownership gave rise to an in rem jurisdictional issue. Freya Navigation Shipholding Ltd had owned the M/V Cape Moreton which it registered in Liberia. Freya sold the ship to Alico who was in the process of registering it in Hong Kong when the litigation arose. The plaintiffs sued Freya in the Federal Court of Australia for damage to a consigned load transported on the ship. Jurisdiction over the matter was based on arrest of the ship in Australia. Alico intervened asserting that the property could not be the basis of jurisdiction in a suit against Freya, since Alico – not Freya – owned the vessel. Thus, the issue of in rem jurisdiction turned on the question of whether Freya or Alico was the ‘owner’ of the ship as that term is used in the Admiralty Act 1988 (Cth)[7] at the time of the seizure. More precisely, the question was whether ownership of a vessel sufficient to establish in rem jurisdiction was satisfied by so-called ‘registry ownership’ even where ‘beneficial’ ownership had passed.
At the trial level, the Court avoided answering the question while implying in dicta that to resolve the issue a full consideration of the history of the Admiralty Act as well as the law of the country of the registry would be necessary.[8] In a refreshingly pragmatic manner, the appeals court prevented the logistical mess suggested by the trial court and provided the reasonable answer that ‘owner’ in the Admiralty Act meant in a proprietary sense. Thus, because registry ownership (which remained with Freya after beneficial ownership had passed to Alico) did not satisfy property rules of ownership, there was no property on which to anchor the in rem jurisdiction.[9] As a result, the matter was dismissed.[10]
In certain circumstances both domestically and internationally, a court with jurisdiction may, at its discretion, decline to hear a matter so that it might be taken up by another forum. In the domestic setting in matters before a Supreme Court, this takes effect as a transfer under the cross-vesting scheme.[11] In the 2004 case BHP Billiton Ltd v Schultz,[12] the High Court resolved a split that had developed among the states and territories regarding the standard for granting such transfers among domestic courts. The Court provided that in applying the domestic equivalent of forum non conveniens, the liberal, so-called Spiliada standard[13] of a ‘more appropriate forum’ should apply, rather than the stricter, so-called Voth standard[14] of a ‘clearly inappropriate forum’.[15]
The trouble with the ‘more appropriate forum’ test is that it requires a factually dependent case-by-case weighing of all of the connections with the competing forums in each case. As one court provided: ‘[I]t is trite to observe that each application must be considered on its own facts. It is rare to find the facts of two cases being the same.’[16] Thus, while it is still not clear whether the originally outlying Western Australian courts[17] will follow the High Court’s firm guidance on the issue, the standard has stimulated a flurry of cases elsewhere. Indeed, we located 17 written decisions in 2005 from Victoria, New South Wales, Queensland, and the ACT coming down nearly equally on both sides of the determination.[18]
It is instructive to contrast two opposing decisions based on nearly identical facts. In Ewins v BHP Billiton Ltd,[19] the Supreme Court of Victoria agreed to transfer to the South Australian Supreme Court,[20] while in BHP Billiton Ltd v Utting,[21] the Supreme Court of New South Wales dismissed an application to transfer to the South Australian Supreme Court.[22] The facts of both of these cases were indistinguishable from Schultz: a former worker at the Whyalla foundry in South Australia who was terminally ill from asbestosis filed a tort suit against BHP in an outside jurisdiction. The only differences were (1) Ewins filed in the Supreme Court of Victoria while Utting and Schultz filed in New South Wales’ Dust Diseases Tribunal, and (2) the immediacy of the plaintiff’s terminal illness, which was greatest in Ewins, lesser in Utting, and not yet developed in Schultz.
In applying the High Court’s guidance from Schultz, the Justices in both Victoria and New South Wales assessed six factors in weighing the competing interests of the two jurisdictions:
(i) the place where the tort occurred;
(ii) the place of residence of the parties …;
(iii) [the] convenience to the parties and witnesses …;
(iv) the law governing the proceeding;
(v) the experience of a particular court and its ability to provide an efficient and speedy trial …; [and]
(vi) the conditions of the parties …;’[23]
The first four factors in both cases pulled towards a transfer to South Australia. On the other hand, in both cases, the plaintiff was terminally ill weighing in favour of the foreign court where the matter was first filed. The High Court explained the rationale for this weighting by noting ‘the justice referred to [in cross-vesting transfers] is not disembodied, or divorced from practical reality’.[24] We applaud this pragmatic and humanistic approach.
The courts diverged in weighing the significance of a particular court’s ability to act speedily and efficiently in light of the condition of the parties. Both courts recognised that South Australia had less experience in handling asbestosis cases, yet accepted that the South Australian courts had the ability to provide an expedited trial.[25] Counter-weighing its own expertise, the Victorian Court simply accepted ‘as a fact’ that even as a tribunal of general jurisdiction it could expeditiously deal with the matter.[26] It noted its extensive experience in the past with dealing with similar cases and its ability to expedite the matter. Nonetheless, it was willing to trust its sister court in South Australia, which was undisputedly the ‘natural forum’.[27]
In contrast, the New South Wales Court put significant emphasis on the experience and unique procedure of the Dust Diseases Tribunal. It distinguished the High Court’s majority holding, which ordered the transfer from the Dust Diseases Tribunal to the Supreme Court of South Australia,[28] by relying on the fact that the plaintiff in Schultz was not yet confirmed terminally ill.[29] Thus, the efficiency of the Dust Diseases Tribunal was more significant, warranting a dismissal of the transfer application.[30]
Unfortunately, this holding cannot be reconciled with Ewins where the illness was even more immediate and where the Court’s statements to its efficacy and efficiency suggest it was equal to the Dust Diseases Tribunal. Such is the nature of fact-specific tests decided against multiple variables on a case-by-case basis. If a bit of commentary is permitted, we prefer the humility and comity approach of the Victorian Court to the more insular view of specialised justice in New South Wales.
As raised in the previous volume when a related case was handed down[31] and in the widely reported Dow Jones & Co Inc v Gutnick,[32] new technologies can stretch traditional long-arm jurisdiction rules when plaintiffs ask Australian courts to judge matters involving foreigners who are only present locally via the internet. K & S Corporation Ltd v Number 1 Betting Shop Ltd [33] seems to create a new benchmark for the tenuity that will satisfy jurisdictional requirements over foreign internet operators. In this case, the plaintiff lost approximately $20 million due to an employee’s embezzlement. The employee used that money to pay for gambling losses he had with the defendants who were virtual casinos operating out of Vanuatu and the United Kingdom. The plaintiff sued the defendants arguing that some trust relationship was created between the casinos and the employer when the criminal employee placed his bets.
As the casinos had no physical presence in Australia, the plaintiff sought to establish jurisdiction through discretionary leave to serve outside. South Australia Supreme Court Rule 18.07(1) provided a catch-all long-arm provision: ‘An originating process which does not come within Rule 18.02, or other process of the Court, may be served out of the State with the leave of the Court.’[34] From this, the Court devised three criteria based on comity for deciding that leave should be granted. The test required (1) a ‘good arguable case’, (2) consideration of the amount in dispute, and (3) ‘a real and substantial connection between the defendant or the subject matter of the litigation’ and the forum.[35]
In applying this test, the Court found that a good arguable case existed in light of the fact that the plaintiff had already succeeded in a similar trust argument against an Australian casino; the amount in controversy was very substantial at over $12 million; and a connection to the forum was established in that the misappropriation, gambling transaction, and transfer to the defendants’ ACT bank account had all been done from South Australia.[36] In showing this last element, it is worth noting that the Court focused predominantly on the plaintiff’s connection with the forum, as the only connection of the defendants appeared to have been the internet presence and the criminal employee reaching out to the casinos. At the risk of labouring the point, it is worth reiterating that the South Australian Court granted leave to serve two foreign defendants with no presence in the jurisdiction whose only connection to the plaintiffs and South Australia was via a third party who embezzled funds to conduct virtual bets. This arguably overreaching jurisdiction is not troublesome, if it is paired with affirmative forum non conveniens.
This was exactly the next step the South Australian Court took after finding that leave to serve outside the jurisdiction was appropriate. The Court asked whether South Australia was a ‘clearly inappropriate forum’ under the Voth v Manildra Flour Mills Pty Ltd[37] forum non conveniens standard. In deciding this, all the Court provided was that ‘the places where the parties are incorporated and carry on business … do not indicate that this Court is clearly inappropriate’.[38] The Court added that because the applicable law in the underlying claims against the Vanuatu company would be ACT law, and against the UK company English law, and because those laws were similar to South Australian law, this also meant that forum non conveniens was not established. Put in more colloquial terms, what K & S represents, is that South Australian courts will allow service outside the forum to establish jurisdiction and avoid forum non conveniens where the only connection between the defendants and the forum is a virtual transaction done through a third party employee. Whether this would be considered excessive jurisdiction in other situations is not clear, but it does suggest internet operators seeking to control their exposure can rely only on the difficulty a plaintiff might have in enforcing any ensuing judgment in structuring the reach of their operations.
Occasionally the Voth standard for forum non conveniens is met. In McGregor v Potts[39] the Supreme Court of New South Wales granted on appeal a forum non conveniens stay application in favour of England.[40] The plaintiff was an Australian veterinarian who, while working in England for the first defendant, was kicked in the face by a horse she was treating. She underwent surgery by the second defendant in England at a hospital run by the third defendant. Upon returning to Australia, the veterinarian found that she required additional treatment. Consequently, she sued the defendants for negligence, within the limitation periods applicable in New South Wales and England. Service was made on the defendants outside the jurisdiction based on tortious damage being suffered within the state.[41] The defendants, without insurance coverage for Australia, conceded jurisdiction, but sought a stay for forum non conveniens.
Justice Brereton in reviewing the master’s decision reconfirmed the familiar Voth standard of a ‘clearly inappropriate forum’. He clarified, however, that the master was mistaken when in measuring the vexation and oppression claimed by the defendants he discounted it as based on conjecture.
The Voth principles do not require proof of actual vexation or oppression; … the law presumes vexation and oppression will be occasioned to the foreign party by requiring it to litigate in a clearly inappropriate forum, without requiring proof of actual vexation or oppression.[42]
Reapplying the facts to this refined standard, Justice Brereton noted that the plaintiff travelled to, worked, was injured, and treated in England. The only eye witness was in England, the defendants’ insurance only applied in England, and the applicable law was English.[43] On the other hand, there was only a small amount of the injury arising in New South Wales, and proceedings there would cause considerable inconvenience to the defendants.[44] Thus, as the balance of the connecting factors resulted in New South Wales being a clearly inappropriate forum, it was sufficient to presume it would be vexatious and oppressive to litigate there, whether this was actually shown or not.[45] As a result, the stay of the New South Wales proceeding was granted subject to the defendants allowing an action to be commenced in England without opposition based on the fact that the English limitation period had expired.[46]
A third forum non conveniens case is significant in that it shows that a court may raise the issue sua sponte. In Amwano v Parbery and Robinson (re Nauru Phosphate Royalties Trust),[47] the Nauruan plaintiffs were beneficiaries under the Nauru Phosphate Royalties Trust and brought suit against the trust in the Federal Court of Australia for the purpose of taking control of assets in Australia. The underlying dispute raised questions both as to the formation of the trust under the Nauruan Constitution and the identity of its beneficiaries under Nauruan trust law. The trust, however, asserted that under the Foreign States Immunities Act 1985 (Cth) the trust was immune from Australian jurisdiction and the Court lacked subject matter jurisdiction over the dispute. The Court, for its part, avoided the sovereign immunity question by finding – without it being pleaded – that to proceed, even if jurisdiction was found, would be oppressive or vexatious rendering the Australian Federal Court a clearly inappropriate forum. In particular, the Court was convinced that in addition to all connection being with Nauru, the construction of Nauruan Constitutional and statutory issues required to resolve the case rendered the litigation in Australian courts inappropriate enough to satisfy the Voth test, and require a permanent stay.
As clearly as Voth has resolved the standard for forum non conveniens, CSR Ltd v Cigna Insurance Australia Ltd[48] has defined the companion issue for anti-suit injunctions. As with the recent cases under Voth, a series of anti-suit injunction decisions add more refinement to the rules under CSR. Great Southern Loans v Locator Group[49] was a straight-forward case but it reinforces a distinction in CSR between anti-suit injunctions to protect a court’s process and those to prevent unconscionable conduct.[50] An example of the former category is when a court would issue an injunction where proceedings for winding up a company were already underway in the first court. The latter category is said to be based on equitable grounds to prevent litigation that is vexatious or oppressive.
Great Southern Loans provided a prime example of an equitable anti-suit injunction that was vexatious because it was pursued despite an exclusive jurisdiction clause in favour of a different forum. The contract at issue in the case was a license agreement that provided for both arbitration and litigation to be exclusively in New South Wales. The licensee, however, initiated action against the licensor in Victoria. Rather than argue for a transfer under the cross-vesting legislation in Victoria,[51] the licensor initiated litigation in New South Wales seeking an anti-suit injunction to prevent the licensees from proceeding with the Victorian litigation. The Court simply concluded without much difficulty that bringing a suit in Victoria in breach of the arbitration and exclusive jurisdiction clauses was vexatious or oppressive, and therefore, anti-suit relief must be granted.[52]
In MRT Performance Pty Ltd v Mastro Motors Inc,[53] the New South Wales Supreme Court gave further clarification to the equitable anti-suit injunction by dividing it between those based on upholding contractual clauses such as in Great Southern Loans and those cases based on general claims involving more direct interference from a foreign court.[54] The Court implied the contractually based anti-suit injunction is more easily established than the general anti-suit injunction, explaining[55] with a quotation from Apple Corp Ltd v Apple Computer Inc:[56]
[I]n a case like this in which a party has expressly contracted not to sue, the argument that the order merely operates in personam is strongest. It involves no finding whatever about the suitability of the foreign forum but merely the universal principle that until some good contrary reason has been shown, men [sic] should be held to their bargains.
In the case at hand, a New South Wales supplier of sway bars for cars sought an order against the Florida importer of the sway bars. The Florida importer had sought indemnity against the supplier in a Florida lawsuit brought by a third party who had been injured when using one of the supplier’s sway bars. As the New South Wales Court acknowledged from the start, the ‘claim for an anti-suit injunction is unpromising’ since the underlying issue of product liability and warnings all occurred in Florida and it would be natural to hear any indemnity claim against the supplier at the same time as the primary claim by the injured party against the importer.[57] The supplier’s seeming hubris in seeking an anti-suit order came from a single line of the original contract that provided that the importer shall indemnify the supplier and hold it harmless of negligent or intentional acts. Because the New South Wales Court concluded that the indemnity clause was not a full indemnity or a promise not to sue, it found no basis for issuing an anti-suit injunction under the Great Southern Loans-type contractual standard. Moreover, on the general anti-suit standard, the Court also held that because Florida was the natural forum for the matter, that proceeding was not vexatious or oppressive warranting an injunction.[58]
While cross-vesting transfers, forum non conveniens, and anti-suit injunctions are discretionary limits on jurisdiction, foreign state immunity acts as an absolute limit on jurisdiction. The circumstances where foreign state immunity is applicable, however, are increasingly narrow. One example is Victoria Aircraft Leasing Ltd v United States.[59] Victoria Aircraft was the convoluted but well publicised case surrounding the foreclosure on Air Nauru’s only plane. The Export Import Bank of the United States, an agency of the United States government, provided a secured loan to Victoria Aircraft Leasing to purchase a Boeing 737-400, which it leased to Nauru Aircraft Corporation. When the borrower defaulted, the lender had the United States private Wells Fargo Bank act as security trustee to foreclose on the loan’s collateral, that is, repossess the aircraft. While admitting the loan and their failure to pay, the borrowers defended and counterclaimed that the United States government vaguely promised that the debts would not be called in as a quid pro quo for diplomatic assistance by the Nauru government in combating terrorism. The United States government pleaded that under section 9 of the Foreign States Immunities Act 1985 (Cth) it was immune from Australian jurisdiction, and that the section 11 exception to this rule for ‘commercial transactions’ did not apply.
The matter was first heard by the Supreme Court of Victoria, which accepted the United States’ assertion. Specifically and significantly, it held that a transaction that predominately was of a political or diplomatic nature was not a commercial transaction despite the fact it had some financial elements.[60] The Court of Appeal agreed with this and added that when considered as a whole the vagueness of the alleged promises of the United States ‘tells against the convention that the transaction amounted to an agreement in respect of … a financial obligation’.[61] The moral of the story, of course, is that if you are going to receive governmental help with loan relief in exchange for combating terrorism, you had better get the promise in writing.
The highlight of conflicts decisions in 2005 was Neilson v Overseas Projects Corporation of Victoria Ltd.[62] Neilson revives renvoi from its deserved place in the backwaters of academic hypotheticals and law school exams, and suggests that the High Court has abandoned its appreciation for clean, easily applied rules of private international law. Then again, perhaps this is just an aberration that proves the old rule that hard cases make for bad law.[63]
The facts, as we have outlined twice before,[64] are the stuff of a classic conflicts problem. The Australian plaintiff was the wife of a lecturer contracted by an Australian company to teach in China. While in China, the plaintiff fell down the stairs of the apartment provided as part of her husband’s employment contract. Upon her return to Australia, she sued the employer and its insurer in tort for the injuries sustained in the fall.
The Western Australian Court applied the seemingly strict lex loci delicti rule of Pfeiffer and Zhang concluding that as the accident happened in China, Chinese law applied. Application of Chinese law, however, meant that as a matter of substantive law[65] the statute of limitations period had run, and the plaintiff was barred in her claim. In avoiding this result, the trial court went beyond this end point to find that Chinese law allowed for the application of foreign law where both parties were ‘nationals of the same country’.[66] Thus, without mentioning or discussing it, the Court appeared to apply renvoi to the choice of applicable law question to find in favour of the plaintiff.[67]
On appeal, the Full Court of the Supreme Court of Western Australia expressly took up the question of renvoi with all of its accompanying theoretical baggage.[68] Benefiting from some of the intervening commentary, the Court held that renvoi appeared to go directly against the certainty and predictability rationale for the landmark High Court decisions of Pfeiffer and Zhang. Thus, on the facts lex loci delecti applied and Chinese law barred the claim for timeliness.[69]
The High Court in a splintered decision overturned the appeals court and not only confirmed the existence of renvoi in Australian conflict of laws,[70] but also broke new ground as the first court in the common law world to apply renvoi to an action in tort. The primary rationale was simply that the applicable lex loci delicti includes all of the foreign law including its choice of law rules.[71] Or, in the words of Gummow and Hayne JJ:
Once Australian choice of law rules direct attention to the law of a foreign jurisdiction, basic considerations of justice require that, as far as possible, the rights and obligations of the parties should be the same whether the dispute is litigated in the courts of that foreign jurisdiction or it is determined in the Australian forum.[72]
In a biting dissent, McHugh J pointed out that this approach, which incorporated a foreign jurisdiction’s possible reference back to Australia, was not only exceedingly complicated to apply, but that its full application lead to the ‘logical impossibility’ of ‘infinite regression’.[73] That is, if the lex loci delicti includes all of the foreign law, then its reference back to Australia must also logically include all of Australia’s law including its acceptance of renvoi and its reference back to the original country’s law. This results in an endless renvoi loop, unless a single renvoi approach is taken whereby the referencing stops arbitrarily at the foreign law’s referral back to Australian law. Justice McHugh, for his part, rejected both the illogicality of the infinite loop and the arbitrariness of the single renvoi, for a total rejection of renvoi and application of the foreign court’s substantive tort law as the whole of lex loci delecti.[74] This approach raises the majority’s criticism that under the no-renvoi approach forum shopping may arise (or what might even be labelled an absurd result from the Australian justices’ eyes) where the foreign court might apply Australian law, but the Australian court would not.[75]
Once the majority of the Court concluded that they should consider the foreign country’s conflict rules, it was faced with the problem of how to understand article 146 of China’s General Principles of Civil Law. Article 146 provided first that China’s choice of tort law rule was lex loci delicti, the section continued, however, to include a flexible exception much like the English approach, which had been rejected by the High Court in Pfeiffer and Zhang: ‘If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied.’[76] In interpreting article 146, the Justices were unanimous in holding that as a discretionary foreign law, the way in which the discretion would be exercised was a question of fact.[77] This, of course, raises the difficult practical question of proving foreign law. In this instance, the Justices voiced differences regarding whether the evidence sufficed or whether, absent evidence, the Court should presume that Chinese courts would resolve the matter in the same way as in Australia.[78] Nevertheless, five Justices agreed that the trial court did not err in finding that Australian law should apply, via article 146, and the plaintiff’s claim could avoid the Chinese time bar.[79]
That the High Court has decided to take up the theoretical and practical messiness of renvoi might not be too unexpected.[80] When the High Court sought in Pfeiffer and Zhang to forego any flexibility by applying a strict lex loci delicti rule in tort, it painted itself into a corner.[81] Life, especially as witnessed through the lens of private international law, is too unpredictable to do well with exception-less rules. Thus, given its first chance, the Court slipped into the only space it had left to move – renvoi. Lu and Carroll have called this a flexible choice of tort law rule ‘by stealth’.[82]
Even more troubling than insincerity in rule making (and without even dwelling on the obvious pragmatic difficulties and costs the Court has invited by encouraging proof of and factual decisions on the meaning of foreign conflict of laws rules for every foreign tort case to be heard henceforth),[83] we agree with Mortensen’s critique that renvoi is an undisciplined means to the desired outcome in this case and as a matter of precedent will produce substantively inferior results.[84] The key point to appreciate is that renvoi is much more unpredictable and arbitrary than the measured application of a flexible lex loci delicti rule. Whether Australian parties will benefit from a renvoi bounce back to Australian law depends on the happenstance of whether the foreign jurisdiction where the tort occurred has embedded within its private international law the flexibility of the lex loci delicti rule our Court was afraid to put in itself. Consider the alternative: if the High Court had found a flexible approach to the applicable choice of tort law issue, then Australian courts could provide disciplined control of that exception, rather than having to hope for the accident that foreign law has so legislated. Further, it seems ironic to allow Australian parties to benefit from the application of the flexible lex loci delecti rule only when it is available as part of a foreign law; either it is a good rule and we should benefit, or it is a bad rule and we should not contort ourselves to incorporate it. The cumulative result of Pfeiffer, Zhang and Neilson is as satisfying as your parents’ saying ‘do what I say, not what I do’.
In a much less significant way, the District Court of Western Australian also spurred some clarification of the Pfeiffer and Zhang rule for choice of tort law in Wayte v Wayte.[85] This case also reads like a classical conflict of torts problem,[86] the defendant and plaintiff were both Western Australian residents driving together in a Western Australian owned and registered car. While driving from Western Australia into the Northern Territory the defendant lost control of the car and the plaintiff was injured as a passenger. Litigation was brought in Western Australia and the question was whether the damages limiting provision of the Northern Territory’s Motor Accidents (Compensation) Act 1979 applied. Section 5(1)(b) of the Act provided: ‘An action for damages shall not lie in the Territory … in respect of an injury to a person who, at the time of the accident, was not a resident of the Territory – for [non-economic and future economic loss as prescribed].’ Relying on Pfeiffer, the Court succinctly held that Northern Territory law must apply as the lex loci delicti, and relying on Breavington v Godleman[87] it continued that despite the wording – ‘an action for damages … in the Territory’ – section 5’s limitation on damages applied whether the action was commenced in the Territory or any other jurisdiction.[88]
Domicile is a rather settled area of the law; thus, there are few newly reported cases on the subject. Blackett v Darcy[89] adds little to the rules, but is discussed here for its freshness. On 18 January, a lifelong New South Wales resident, with two sets of children from two marriages, moved to Queensland where he had just purchased a house. He had said that he would move to Queensland as soon as he sold his New South Wales house, the sale of which closed on 31 January. Following hospitalisation immediately after his arrival, he died in Queensland on 4 February. Because case law provides that under section 11 of the Family Provision Act 1982 (NSW) a New South Wales court does not have jurisdiction over immovable property outside the state where the deceased is not domiciled in New South Wales,[90] an issue arose as to whether the deceased was domiciled in New South Wales or Queensland. The New South Wales Supreme Court stated the classic rule that a new domicile is established where simultaneously, even for ‘no more than a split second’, there is presence in the new state and an intention to acquire a new domicile.[91] Applying this rule, the Court found the deceased had established domicile in Queensland, and therefore it could not rule regarding the deceased’s Queensland immovables. Interestingly, Chief Justice Young also pointed out that this inconvenient result might have been avoided if the matter had been brought in Queensland and cross-vested to the New South Wales Court.[92]
Insolvency is not a popular subject within the private international law framework; rather it tends to be treated in the subfield of ‘cross-border insolvency’.[94] This is possibly the result of the technical nature of the subject, as well as the characterisation problem the field entails given that different systems view insolvency matters as alternatively civil procedure, property law, administrative law and corporate law. Pending the long promised adoption of the United Nations Commission on International Trade Law (UNCITRAL) Model Rules on Cross-Border Insolvency,[95] Australia’s primary conflict rules in insolvency are section 581 of the Corporations Act 2001 and its parallel in the Bankruptcy Act 1966, section 29.[96] Section 581 provides in part: ‘In all external [insolvency] administration matters, the [Australian Insolvency] Court: must act in aid of, and be auxiliary to, courts of … prescribed countries that have jurisdiction in external [insolvency] administration matters’ (emphasis added).
In Re Independent Insurance Co Ltd,[97] the Supreme Court of New South Wales had to determine whether section 581 meant what the plain language seemed to suggest. Unfortunately, the Court in answering this question failed to appreciate the basic concepts of insolvency and their special importance in the international setting. Independent Insurance was a British company with interests around the world that was placed in provisional liquidation in the High Court of England and Wales under the Insolvency Act 1986. The provisional liquidators appointed in England sought from the New South Wales Supreme Court: recognition of the British provisional liquidation, recognition in Australia of their standing as liquidators, a stay of any proceedings against the debtor or its property, and any other orders later requested as the Court saw fit. Given the territorial effect of insolvency proceedings and the likelihood of the grab rule kicking in otherwise[98] seeking such a declaration and stay in all jurisdictions where the debtor may have assets and where creditors not susceptible to the first court’s in personam jurisdiction is extremely prudent. Thus, it is standard practice for international practitioners. Indeed, in addition to Australia, Independent Insurance’s provisional liquidators were successful in getting similar assistance in Ireland and the United States.[99]
In Re Independent Insurance, however, the seemingly straightforward request and the mandatory statutory language, the New South Wales Court denied all assistance. The Court’s reasoning can only be regarded as excessively formalistic and lacking an understanding of basic principles of insolvency law. For example, despite having two English Court of Appeal decisions and subsequent academic commentary treating this exact issue under the nearly identical English provision,[100] the Court summarily dismissed any value of those learned opinions arguing – in apparent ignorance of the historical development of the Australian legislation – simply that ‘the position [in Australia] is somewhat different’.[101]
The Court, on the other hand, pointed out that in addition to the statutory authority under section 581, it had authority to recognise both the English insolvency proceeding and the provisional liquidators under the standard rules of private international law.[102] This is undoubtedly correct.[103] Nonetheless, the Court’s reservation about making such a declaration because no creditor had yet appeared in Australia, suggests that the Court failed to appreciate the first of two basic insolvency principles. The first rule of successful insolvency administration is to confirm the outside trustee’s control of the debtor, its assets, and the proceeding.[104] The importance of this fundamental tenet is made obvious in the UNCITRAL Model Law on Cross-Border Insolvency where recognition of the foreign proceeding and administrator by the local court is the simple yet crucial first step to facilitating a comprehensive and equitable proceeding.[105] Ironically the Court later noted the existence of the UNCITRAL law.[106]
The second basic insolvency principle the Court failed to appreciate was the critical importance to a successful proceeding of receiving a general stay against creditors pursuing the debtor or its assets. This is a standard feature of all modern insolvency laws.[107] Moreover, this is precisely what section 471B of the Corporations Act 2001 does. With bizarre avoidance of any reference to insolvency cases and despite counsel’s explanation that the stay was only against creditors of the debtor, the Court suggested that the English liquidators were seeking an open-ended, timeless injunction against the world.[108] Such a request in other contexts would reasonably be unacceptable, but it was not what the liquidators sought or what the Corporations Act 2001 section 581 compelled the Court to provide. As one of the leading Australian experts on international insolvency commented: ‘The cases which his Honour considered … were concerned with the grant of injunctions against unspecified persons … With respect to his Honour, liquidation proceedings … are collective in nature and clearly distinguishable from an action being pursued for some private purpose.’[109]
Two things make this decision even more surprising. First, in a case on almost exactly inverse facts, an English court had previously been willing to grant the relief sought on behalf of a letter rogatory sent by the justice hearing Independent Insurance.[110] This matter was reviewed in the decision and it was obvious that counsel for the provisional liquidators had made his request modelled almost identically on the justice’s earlier words. The lack of a personal sense of comity, especially in light of the overly legalistic method to the conclusions reviewed above, is nothing short of amazing. Second, equally startling for us is to find that the justice writing this opinion has been lecturing as an expert on cross-border insolvency and speaking to international conventions on this case. In those published remarks, he admits that had the UNCITRAL Model Law been applicable, he would have held differently.[111] This seems a strange conclusion since section 581 of the Corporations Act 2001 was drafted in the strongest compulsory terms possible given that it operated only among British territories, while the UNCITRAL Model Law has been drafted in a more permissive way in light of the variety and number of countries whose proceedings might be recognised pursuant to it. One lesson to take from the New South Wales Supreme Court’s handling of this matter is that when dealing with insolvency matters, parties will be well advised to commence proceedings in the Federal Court, which has much more experience with the subject matter and less ingrained rigidity seemingly based on an equity understanding similar to those found by the judges of Jarndyce v Jarndyce.[112]
Mareva or asset freezing orders[113] are an extremely important practical tool allowing a plaintiff to capture an asset of a debtor to prevent the frustration of a money judgment by preserving the asset in the jurisdiction. As such, it is usually sought to avoid the need to resort to private international law tools such as seeking to enforce a judgment in a foreign jurisdiction whence a defendant’s assets have been removed. When there is property outside the first jurisdiction and the defendant is not beholden to the authority of the first court,[114] the advantage of being able to take a Mareva order in a second jurisdiction, where there is property or the defendant is liable, becomes apparent. This situation arose in Davis v Turning Properties Pty Ltd[115] where the plaintiff asked the Supreme Court of New South Wales for a Mareva order over the defendant’s Australian property in support of a worldwide Mareva order issued by a Bahaman court. One element of the request is best to appreciate at the outset: rather than seeking a regular Mareva order to support New South Wales litigation, the request was for an order, in essence, enforcing the foreign Mareva order. Done this way, the plaintiff was able to accomplish the same end of freezing the defendant’s assets, but did not undertake the expensive obligation of pursuing a full case in New South Wales.[116] That the Supreme Court eventually allowed this is the important practical holding of this case.
The plaintiff was defrauded by the defendant, an Australian living in the Bahamas and acting as a stockbroker. In typical fashion, the investments were a complex web of multiple corporations and cross-holdings in the Bahamas and Australia. The defendant had been arrested by the FBI in the United States and pleaded guilty to wire fraud, but in the meantime the plaintiff was seeking to unwind the finances in the Bahamas through litigation. The Bahaman Court hearing the matter issued a worldwide Mareva order against the defendant, which arguably reached any property in Australia. Nevertheless, one of the numerous Australian real estate assets of companies controlled by the defendant was put up for sale, allegedly under the direction of the defendant’s wife, who also sought to gain control of the other business entities.
Given the innovative way in which the matter was argued, the Court began by noting that not only was the issue not covered by the Foreign Judgments Act 1991 (Cth) or Foreign Judgments Act 1973 (NSW) but that it appeared this was the first time a New South Wales court had been asked to make an order in aid of a foreign Mareva order. The Court explained at length why it had the inherent authority to make an order in aid of the enforcement of a foreign judgment whether or not that judgment had yet been obtained.[117] Based on that authority, the question was whether it should exercise its discretion to issue the order. Finding that there was a strong case that the defendant had acted fraudulently, that there was a sufficient connection between the defendant and the foreign jurisdiction, that a sufficient threat to assets shown by the wife’s attempted sale, and limiting the extent of the order to $8.5 million (ie approximately $1 million more than the plaintiff’s claim), the Court granted the order. Again, while the legal road taken to this conclusion is not particularly unorthodox, it is important to appreciate the potential practical impact to complex cross-border litigation of the Court’s willingness to issue, in effect, a catchall domestic Mareva order enforcing a foreign court’s worldwide freezing order.
The percipient nature of the Davis decision is appreciated when one considers the interim relief portions of (1) the 2005 Public Discussion Paper on Trans-Tasman Court Proceedings and Regulatory Enforcement drafted by the Attorney-General’s Department (Australia) and Ministry of Justice (New Zealand)[118] and (2) the 2005 Harmonisation Committee Report on Mareva and Anton Piller Orders drafted by the Council of Chief Justices of Australia and New Zealand.[119] Both of these reports have advocated adopting rules, such as section 25 of the United Kingdom’s Civil Jurisdiction and Judgments Act 1982,[120] to facilitate Australian and New Zealand courts being expressly able to grant interim relief, such as Mareva orders, in support of proceedings in the other country’s courts. The reports also cover a number of other important private international law issues including enforcement of non-money judgments, service abroad, coordinated forum non conveniens rules, and so forth.[121] It will be important for all lawyers interested in conflict of laws to follow the development of these recommendations in the future.
As noted above, both interim orders and insolvency cause problems in private international law. Part of the classic problem with enforcing insolvency decisions is that, given the unique nature of insolvency, the decisions are often not final until the conclusive liquidation of the debtor. Another problem that arises is that in many systems the tribunal resolving the insolvency matter may be acting in both an administrative and a judicial capacity. Both of these concerns were seen in Funge Systems Inc v Newcom Technologies Pty Ltd[122] heard by the Supreme Court of South Australia. The underlying dispute revolved around an exceedingly complex litigation and insolvency reorganisation playing out largely in the United States Bankruptcy Courts. As part of the resolution of that insolvency, the reorganisation trustee and some of the creditors came to an agreement that certain claims in the United States insolvency proceeding should be treated as priority claims and paid ahead of general claims. This agreement was confirmed by the United States Bankruptcy Court as an ‘Agreement and Order’. The parties then sought to enforce that order as a judgment against funds held by the South Australian Court. The enforcement was objected to by a third party in the underlying litigation who had not been involved in the United States Agreement and Order.
The South Australian Court eventually refused to enforce the United States order. It began with the simple proposition that because the United States was not designated under the Foreign Judgments Act 1991 (Cth), the enforcing parties must satisfy the common law principles. A number of impediments existed, however. First, not all of the interested parties in the United States insolvency proceeding, including one of the parties objecting to enforcement in South Australia, had been parties to the Agreement and Order. Second and related, the South Australian Court concluded that in confirming the order the United States Bankruptcy Court was acting in its administrative, rather than judicial, capacity:
[The Judge] was not acting in a judicial capacity deciding an adversarial action on any issue [in confirming the Agreement and Order]. It is highly unlikely that this would be regarded as a ‘judgment’ of the court as distinct from orders to resolve a dispute made in an administrative capacity between the trustee and creditors.[123]
On the other hand, the Court clarified in dicta that it could enforce a final consent judgment that incorporated an order giving effect to a compromise.[124] The distinction the Court drew is important and given the casual way in which legal vernacular is used and the complex way in which it differs across the globe, the Court’s unwillingness to simply equate an American insolvency ‘order’ with a final judgment seems most sensible.
A very different case from Funge, but with a similar conclusion regarding the necessity to look behind the casual usage of superficially similar legal terms is the appeal in Benefit Strategies Group Inc v Pride.[125] The plaintiffs in this case sought to enforce a Californian default judgment that the defendants claimed (1) was obtained based on fraudulent service and (2) was non-enforceable, in part, as punitive damages. Because this judgment came from the United States, which is not a statutorily recognised country for enforcement,[126] the common law rules of enforcement applied. The appeals court first confirmed the trial court’s finding that as a factual matter there was no evidence of fraud by the plaintiffs in securing the foreign judgment; thus, the judgment was enforceable.[127]
More importantly and interestingly, the Court reviewed the trial court’s finding that the punitive damages portion of the American judgment was not enforceable. The Californian judgment included an award of punitive damages for US$13 million. The defendant argued that the judgment’s punitive portion, worth five times its compensatory damages portion, was not enforceable as it was contrary to Australian public policy. At trial, the plaintiff had conceded this point and agreed not to seek enforcement of the punitive portion.[128] On appeal, however, Bleby J, writing for the Court, noted sua sponte: ‘I am not sure that the concession was properly made.’[129] In contrast to the trial court, Bleby began his analysis with the leading case on enforcement of punitive damages – Huntington v Attrill[130] – and the well-known general principle that foreign penal or revenue laws will not be enforced.[131] After reviewing the case law, however, Bleby J concluded:
The judgment sought to be enforced in this case, although described as “punitive damages”, was a judgment in respect of a private right for his alleged “brazen and fraudulent conduct”. There was no public element in the remedy being sought. In my view, it did not fall within the type of judgment which this court would refuse to enforce on public policy grounds relating to the non-enforcement of foreign penal or revenue law.[132]
In other words, the Court took a narrow understanding of the exception to enforcement of punitive damages. It distinguished the matter from the recent New South Wales decision Schnabel v Lui[133] by suggesting that the damages in that case were ‘not compensation for a detriment but to punish the defendant … in the form of a sanction’.[134] In further supporting the subtle distinction it drew, the Court noted that British courts give punitive damages in much more limited situations than Australian courts where exemplary or punitive damages are justified if the defendant showed a ‘cruel and reckless disregard of the plaintiff’.[135] This careful and nuanced distinction in enforcing what may only have been the originating court’s casual use of the term punitive damage is very welcomed. As the world globalises and greater convergence on acceptable damages arises, a narrowing of the exceptions to enforcement and the reasons for not giving effect to foreign law based on the public policy exception is a positive development.
There is no doubt that the best stories come from private international law cases and rock ’n roll; sometimes they even defy categorisation. In We Two v Shorrock (No 2),[136] without ‘reminiscing’ the Federal Court decided not to ‘take it easy’ on ‘We Two’ when it tried to use a ‘cool change’ to ‘play to win’, and instead it ensured that ‘help was on its way’ for the ‘lonesome losers’.[137] The Little River Band was one of the great rock groups of the late 1970s with multiple number one hits in both America and Australia. Like a bad mockumentary, the band evolved during the 1980s with a rotating set of musicians that resulted in competing reunion bands battling in the early 21st century. The trademark in the band’s name and its platypus symbol was held by the Australian company We Two, while three of the original members of the band reunited under the name ‘Bertels, Shorrock and Goble, The Original Little River Band’. This resulted in parallel copyright enforcement actions in the United States Federal Court and the Federal Court of Australia. During the trial in Australia, the parties settled the matter confirming the terms in an executed deed recognised by the Court.[138] For reasons that are not entirely clear, neither of the actions was dismissed. Subsequently, when the parties had minor disagreements over the settlement conditions, We Two returned to the dormant United States litigation and obtained a default judgment for a permanent injunction against the original members from using their group name. Responding to this in We Two v Shorrock (No 2), the original members returned to the Australian Federal Court seeking enforcement of the settlement agreement and, in effect, an anti-enforcement injunction against the United States decision.
Anti-enforcement injunctions are not a standard category of private international law. Thus, the Court began with a truism: ‘This is an unusual application brought in usual circumstances.’[139] The Court’s first holding was that because the original Australian suit had not been dismissed, the present issue was heard as part of that litigation.[140] Given that the Judge hearing this matter was also the one who had confirmed the settlement agreement, his second holding that there was an implied term in the agreement for both lawsuits to be dismissed was not difficult.[141] Based on that conclusion, We Two was ‘in clear violation of the settlement agreement’ and under the anti-suit injunction precedent of CSR v Cigna Insurance Australia Ltd,[142] an injunction against We Two from pursuing or enforcing the United States judgment was appropriate.[143] Because the Australian court had in personam jurisdiction over We Two and its principals, an anti-enforcement order presumably also would prevent enforcement of the United States judgment in, inter alia, the United States. Perhaps because of the comity implications and with a thinly veiled threat regarding We Two’s possible impropriety in obtaining the United States default judgment, the Australian Federal Court refrained from entering an injunctive order pending clarification of some other matters. This provided the space for We Two to resolve the matter without need for the Court to enter the order. While the circumstances that give rise to an anti-enforcement injunction would indeed be unusual, the Court’s reasoning and reliance on the anti-suit injunction decisions make abundant sense. The caution it showed in exercising this authority in light of possible international offence also appears well measured.
While the recurring theme over the past few years has been the simplification of private international law rules, the developments of 2005 portend more theoretical and practical complexity in resolving cases with an international nexus. Building on the simplicity of Pfeiffer and Zhang, Neilson not only opens the door to, but seems to beg for, complicated litigation on renvoi as a matter of law and foreign private international law rules as a matter of fact. The no less than 17 decisions located in 2005 that apply the ‘more appropriate forum’ standard for cross-vesting transfers following the BHP v Schulz asbestosis litigation is an unprecedented number considering the usually meagre volume of Australian conflicts cases. Both Davis, with regard to Mareva orders, and We Two, with regard to anti-enforcement orders, will motivate practising lawyers to seek these newly recognised useful tools of enforcement. Finally, while the subtlety introduced by decisions such as Funge and Benefits Strategies Group, which invite courts to go behind the superficially similar lexicon of foreign courts is welcomed, they too herald more complex litigation. From the perspective of teachers and researchers of private international law, such developments are welcomed but one queries whether society and general legal practice will share our enthusiasm.
[∗] The Australian National
University, ANU College of Law.
We appreciate the research assistance provided by George Blades and helpful comments from Andrew Lu.
[1] See K Anderson with J Davis, ‘Annual Survey of Recent Developments in Australian Private International Law 2000-2003’ [2005] AUYrBkIntLaw 18; (2005) 24 Aust YBIL 443; K Anderson with J Davis, ‘Annual Survey of Recent Developments in Australian Private International Law 2004’ [2006] AUYrBkIntLaw 16; (2006) 25 Aust YBIL 697.
[2] [2005] HCA 54; (2005) 223 CLR 331.
[3] John Pfeiffer Pty Ltd v Rogerson (2000) 2003 CLR 503.
[4] Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491
[5] See, eg, S Symeonides, ‘Choice of Law in the American Courts 2005: Nineteenth Annual Survey’ (2006) 53 American Journal of Comparative Law 559.
[6] [2005] FCAFC 68; (2005) 143 FCR 43 (Ryan and Allsop JJ). Discussing this subject and case, see M Harvey, ‘Arresting Surrogate Ships: Who is an Owner?’ (2005) 33 Australian Business Law Review 312.
[7] See Admiralty Act 1988 (Cth) ss 17-19.
[8] [2004] FCA 1191; (2004) 141 FCR 29, [27].
[9] Tisand [2005] FCAFC 68; (2005) 143 FCR 43, [92]-[93].
[10] Ibid [186].
[11] See, eg, Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s 5(2).
[12] [2004] HCA 61; (2004) 221 CLR 400.
[13] See Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 460.
[14] Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538.
[15] [2004] HCA 61; (2004) 221 CLR 400, 527 (Gleeson CJ, McHugh J, Heydon J). This decision was reviewed in the previous volume: see Anderson with Davis (2006), above n 1, 701.
[16] Ewins v BHP Billiton Ltd [2005] VSC 4, [14].
[17] See Anderton v Enterprising Global Group [2003] WASC 67 (unreported, Hasluck J, 4 April 2003) [33]-[36].
[19] [2005] VSC 4 (unreported, Gillard J, 12 January 2005). Discussing this issue and case, see M Schilling, ‘A Questionable Onus of Proof in Cross-vesting Applications’ (2006) 80 Law Institute Journal 34.
[20] Also holding in favour of transfer in 2005, see Motor Trade Finances Prestige Leasing Pty Ltd v Elderslie Finance Corporation Ltd [2005] VSC 360 (unreported, Whelan J, 15 April 2005) (transfer to New South Wales Supreme Court); McLeod v Munro [2005] VSC 375 (unreported, Dodds-Streeton J, 15 April 2005) (transfer to New South Wales Supreme Court); Wright v Blackall [2005] QSC 142 (unreported, Moynihan J, 25 May 2005) (transfer to New South Wales Supreme Court); Director of Public Prosecutions (Cth) v Chia [2005] VSC 211 (unreported, Habersberger J, 20 June 2005) (transfer to Federal Court, Sydney Registry); B I (contracting) Pty Ltd v Haylock [2005] NSWSC 592 (unreported, Bell J, 22 June 2005) (transfer to South Australia Supreme Court); Quinta Raddison Ltd v Trinkor Pty Ltd [2005] VSC 259 (unreported, Cummins J, 27 June 2005) (transfer to Western Australia Supreme Court); Woodham v Medina Group Pty Ltd [2005] ACTSC 92 (unreported, Connolly J, 23 September 2005) (transfer to New South Wales Supreme Court).
[21] [2005] NSWSC 260 (unreported, Simpson J, 1 April 2005).
[22] Also dismissing applications for transfer in 2005, see Dwyer v Hindal Corporate Pty Ltd (2005) ACSR 335 (unreported, Debelle J, 21 January 2005) (denying transfer to Victoria Supreme Court); Thermasorb Pty Ltd v Rockdale Beef Pty Ltd [2005] NSWSC 361 (unreported, Johnson J, 19 April 2005) (denying transfer to Queensland Supreme Court); Helix Fidel Union v Whatmore [2005] VSC 381 (unreported, Dodds-Streeton J, 2 May 2005) (denying transfer to New South Wales Supreme Court); Regit (No 2) Pty Ltd v Dendyk [2005] NSWSC 450 (unreported, Hall J, 10 May 2005) (denying transfer to South Australia Supreme Court); Amaca Pty Ltd v Harris [2005] NSWSC 622 (unreported, Hall J, 28 June 2005) (denying transfer to Queensland Supreme Court); Fastlane Australia Pty Ltd v Nolmont Pty Ltd [2005] VSC 389 (unreported, Whelan J, 16 August 2005) (denying transfer to Queensland Supreme Court); Hall v Australian Finance Direct Ltd [2005] VSC 306 (unreported, Hollingworth J, 9 August 2005) (denying transfer to New South Wales Supreme Court); Slater & Gordon Pty Ltd v Porteous [2005] VSC 398 (unreported, Whelan J, 3 October 2005) (denying transfer to Western Australia Supreme Court).
[23] Utting [2005] NSWSC 260, [6]; Ewins [2005] VSC 4, [29].
[24] Schultz [2004] HCA 61; (2004) 221 CLR 400, [15].
[25] Utting [2005] NSWSC 260, [23]; Ewins [2005] VSC 4, [46].
[26] Ibid [41].
[27] Ibid [47].
[28] Schultz [2004] HCA 61; (2004) 221 CLR 400, [101] (Gummow J), [175] (Kirby J), [177] (Hayne J), [262]-[263] (Callinan J), dissenting [31]-[32] (Gleeson CJ, McHugh and Heydon JJ).
[29] Utting [2005] NSWSC 260, [23].
[30] Ibid [27].
[31] K & S Corp Ltd v No 1 Betting Shop Ltd [2004] SASC 155 (unreported, Duggan J, 1 June 2004).
[33] K & S Corporation Ltd v Number 1 Betting Shop Ltd [2005] SASC 228 (unreported, Debelle J, 24 June 2005).
[34] South Australia Supreme Court Rules 1987. The South Australia Supreme Court Civil Rules 2006 have subsequently been reorganised with effect from 4 September 2006. The equivalent section is now found at Rule 40(3): ‘Originating process for an action of any other kind may only be served outside Australia with the Court’s permission.’
[35] K & S (No 2) [2005] SASC 228, [90]-[99].
[36] Ibid [100]-[106].
[37] [1990] HCA 55; (1990) 171 CLR 538.
[39] [2005] NSWSC 1098 (unreported, Brereton J, 31 October 2005).
[40] The original decision granting the forum non conveniens stay was McGregor v Three Counties Equine Hospital [2004] NSWC 1203 (unreported, Malpass M, 17 December 2004).
[41] Sup Ct R pt 10, r 1A(1)(e); now UCPR sch 6 [(e)].
[42] McGregor [2005] NSWSC 1098, [43].
[43] Ibid [53]-[60], [63]-[64], [67].
[44] Ibid [61]-[62], [68]-[73].
[45] Ibid [84].
[46] Ibid [89].
[47] (2005) 148 FCR 126 (Finkelstein J).
[48] (1997) 189 CLR 345.
[49] [2005] NSWSC 438 (unreported, McDougall J, 13 May 2005).
[50] Ibid [24].
[51] See ibid [72]-[73].
[52] Ibid [35].
[53] [2005] NSWSC 316 (unreported, White J, 1 April 2005).
[54] Ibid [23]-[25].
[55] Ibid [24].
[56] [1992] RPC 70, 79.
[57] Ibid [14].
[58] Ibid [46].
[59] [2005] VSCA 76; (2005) 12 VR 340 (Buchanan JA, Callaway JA and Williams AJA agreeing). Discussing this issue and case, see R Garnett, ‘Foreign States in Australian Courts’ [2005] MelbULawRw 22; (2005) 29 Melbourne University Law Review 704.
[60] Ibid [15]-[16].
[61] Ibid [26]-[29].
[62] [2005] HCA 54; (2005) 223 CLR 331.
[63] As famously put by Justice Oliver Wendell Holmes: ‘Great cases, like hard cases, make bad law.’ Northern Securities Co v US [1904] USSC 64; (1904) 193 US 197, 400.
[64] Anderson with Davis, above n 1, (2005) 454; Anderson with Davis, above n 1, (2006) 703.
[65] See Zhang[2002] HCA 10; , (2002) 210 CLR 491, 537.
[66] Art 146 of the General Principles of Civil Law of the People’s Republic of China was said to provide: ‘With regard to compensation for damages resulting from an infringement of rights, the law of the place in which the infringement occurred shall be applied. If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied.’ Mercantile [2004] WASCA 60; (2004) 28 WAR 206, [22].
[67] Neilson v Overseas Projects Corporations of Victoria [2002] WASC 231, [122] (unreported, Mckechnie J, 2 October 2002).
[68] Mercantile Mutual Insurance (Australia) Ltd v Neilson, [2004] WASCA 60; (2004) 28 WAR 206 (McLure J, Johnson J, Wallwork AJ).
[69] Ibid [74] (McLure J).
[70] Neilson [2005] HCA 54; (2005) 223 CLR 331 [18] (Gleeson CJ), [136] (Gummow and Hayne JJ), [221] (Kirby J), [262] (Callinan J), [283] (Heydon J), dissenting [61] (McHugh J).
[71] Ibid [12] (Gleeson CJ), [102] (Gummow and Hayne JJ), [174] (Kirby J), [261] (Callinan J), [271] (Heydon J), dissenting [39] (McHugh J).
[72] Ibid [90] (Gummow and Hayne JJ). See also to similar effect Gleeson CJ [13]-[15], Callinan J [244], Heydon J [274]-[275]; Kirby J, while disagreeing with the application of those principles to the facts before the Court, nevertheless made it clear that he agreed with those principles: [176].
[73] Ibid [40]-[48] (McHughJ).
[74] Ibid [59] (McHugh J).
[75] This construction does not take into account that finding the Australian court would refer back to the foreign law, the (hypothetical) foreign court might ‘throw its hands up in the air’ and simply apply its general lex loci delicti rule rather than its exception. Whether Australian courts will consider this likely ‘real world’ outcome is a factual question under the High Court’s construction.
[76] Ibid [75] (Gummow and Hayne JJ) (quoting General Principles of Civil Law of the People’s Republic of China, art 146).
[77] Ibid [15] (Gleeson CJ), [60] (McHugh J), [115] (Gummow and Hayne JJ), [199] (Kirby J), [244] (Callinan J), [274] (Heydon J).
[78] Ibid [125] (Gummow and Hayne JJ) (presumption same as Australian law); [249] (Callinan J) (presumption same as Australian law); [275] (Heydon J) (presumption same as Australian law); [16]-[17] (Gleeson CJ) (no presumption in favour of Australian law, but sufficient evidence on Chinese law); [36] (McHugh J) (no presumption in favour of Australian law and insufficient evidence on Chinese law); [203], [207] (Kirby J) (no presumption in favour of Australian law and insufficient evidence on Chinese law).
[79] Ibid [18] (Gleeson CJ), [136] (Gummow and Hayne JJ), [262] (Callinan J), [263] (Heydon J), dissenting [60] (McHugh J) (renvoi does not apply, Chinese law time bars claim); [221] (Kirby J) (renvoi applies, but Chinese time bar conclusive).
[80] A number of writers have commented on this case at various stages, see A Lu and L Carroll, ‘Ignored No More: Renvoi and International Torts Litigated in Australia’ (2005) 1 Journal of Private International Law 35 (arguing against renvoi); N Bender, ‘Renvoi’ (2004) 78 Australian Law Journal 450 (no position); M Davies, ‘Renvoi and Presumptions about Foreign Law; Neilson v Overseas Corporation of Victoria Ltd’ [2006] MelbULawRw 8; (2006) 30 Melbourne University Law Review 244 (arguing for a preliminary jurisdictional inquiry of the foreign venue, but in the alternative single renvoi); R Mortensen, ‘Troublesome and Obscure: The Renewal of Renvoi in Australia’ (2006) 2 Journal of Private International Law 1 (arguing against renvoi); R Mortensen, ‘Homing Devices in Choice of Tort Law: Australian, British, and Canadian Approaches’ (2006) 55 International and Comparative Law Quarterly 839, 870-873; M Keyes, ‘The Doctrine of Renvoi in International Torts’ (2005) 13 Torts Law Journal 1; R Yezerski, ‘Renvoi Rejected? The Meaning of ‘the lex loci delecti’ after Zhang’ [2004] SydLawRw 13; (2004) 26 Sydney Law Review 273 (arguing in favour of renvoi). The first appeal is noted in E Crawford, ‘The Uses of Putativity and Negativity in the Conflict of Laws’ (2005) 54 International and Comparative Law Quarterly 829, 843 fn 79 (arguing in favour of single renvoi).
[81] After having written this phrase, we were pleased to see that Mortensen used similar language to describe the rationale behind the High Court’s decision in Neilson. See Mortensen, ‘Troublesome’, above n 80, 24.
[82] Lu and Carroll, above n 80, 64.
[83] Perhaps as comparative conflict of laws researchers, this is not something we should complain about. Indeed, we have already been consulted to provide advice on foreign conflict rules in light of Neilson.
[84] Mortensen, ‘Troublesome’, above n 80, 24.
[85] [2005] WADC 192 (unreported, Martino DCJ, 11 October 2005).
[86] See, eg, Babcock v Jackson, 191 NE 2d 279 (NY 1963) (providing similar facts in this leading case with New York parties in a traffic accident in Canada).
[87] [1988] HCA 40; (1988) 169 CLR 41.
[88] Wayte [2005] WADC 192, [5], [12].
[89] [2005] NSWSC 65; (2005) 62 NSWLR 392 (Young CJ).
[90] See Balajan v Nikitin (1994) 35 NSWLR 51, 61.
[91] Blackett [2005] NSWSC 65; (2005) 62 NSWLR 392, [12] (quoting PE Nygh and M Davies, Conflict of Laws in Australia (7th ed, 2002) [13.18]).
[92] Ibid [16]-[17].
[93] For an interesting 2005 international insolvency case under English law in light of a request for assistance from an Australian court, see Re HIH Casualty & General Insurance Ltd [2005] EWHC 2125; [2006] 2 All E.R. 671 (ruling on an English court’s ability to assist an Australian insolvency proceeding).
[94] See, eg, D McClean and K Beevers, Morris: The Conflict of Laws (6th ed, 2005) (providing no reference to insolvency or bankruptcy). Cf I F Fletcher, Insolvency in Private International Law (2nd ed, 2005).
[95] United Nations Commission on International Trade Law (UNCITRAL), UNCITRAL Model Law on Cross-Border Insolvency, Report of UNCITRAL on the Work of Its Thirtieth Session, UN GAOR, 52nd Sess, Annex I, 68-78, UN Doc A/52/17 (1997), <http://www.uncitral.org/english/texts/insolven/insolvency.htm> . Recommending its adoption in Australia, see Commonwealth Treasury, Proposals for Reform – Cross-Border Insolvency, CLERP Paper No 8 (17 October 2002), <http://www.treasury.gov.au/contentitem.asp?pageId= & ContentID=448> .
[96] Discussing Australia’s adoption of the UNCITRAL Model Law on Cross-Border Insolvency and the implications to s 581 and s 29, see K Anderson, ‘Testing the Model Soft Law Approach to International Harmonisation: A Case-Study of the UNCITRAL Model Law on Cross-Border Insolvency’ [2004] AUYrBkIntLaw 1; (2004) 23 Aust YBIL 1, 18-19.
[97] [2005] NSWSC 587 (unreported, Barrett J, 22 June 2005). The case is discussed by, R Fisher, ‘Recognising Cross-Border Insolvency Proceedings’ (2006) 14 Insolvency Law Journal 115.
[98] The ‘grab rule’ refers to the common situation where creditors aggressively pursue ad hoc execution against a nearly insolvent or insolvent debtor’s assets. This contrasts with the intent of modern insolvency law to provide an orderly and equitable distribution of a debtor’s assets among its competing creditors.
[99] Independent Insurance [2005] NSWSC 587, [41] (in the United States under s 304(b) of the Bankruptcy Code, which has since been superseded by the adoption of the UNCITRAL Model Law, and in Ireland under s 222 Companies Act, which originates from the same tradition as Australia’s section 581 Corporations Act 2001).
[100] See, eg, England v Smith [2001] 1 Ch 419; Hughes v Hannover Ruckversicherungs AG [1997] 1 BCLC 497; Insolvency Act 1986 s 426; K Anderson, ‘Statutory Co-operation Mechanisms for Cross-Border Insolvencies in England and America’ [2000] Company (Financial and Insolvency) Law Review 44; P J Smart, ‘English Courts and International Insolvency’ (1998) 114 Law Quarterly Review 46.
[101] Independent Insurance [2005] NSWSC 587, [15].
[102] Ibid [18].
[103] See, eg, Re a Debtor [1981] Ch 384.
[104] See, eg, UNCITRAL, Legislative Guide on Insolvency (2004) Rec 118.
[105] The UNCITRAL Model Law provides, first, for recognition of a foreign proceeding and foreign representative (arts 12, 15, 17). Then, the foreign representative may apply for relief such as ‘(a) staying execution against the debtor’s assets’ (arts 19, 21). Alternatively, if the foreign proceeding is recognised as a ‘main’ proceeding, the local court is to stay all proceedings against the debtor’s assets automatically (art 20).
[106] Independent Insurance [2005] NSWSC 587, [53].
[107] See, eg, UNCITRAL, above n 104, Rec 39-51.
[108] Independent Insurance [2005] NSWSC 587, [26].
[109] Fisher, above n 97, 116.
[110] Independent Insurance [2005] NSWSC 587, [39]-[40], [50]-[51]. See also AFG Insurances Ltd [2002] NSWSC 844; (2002) 43 ACSR 60 (Barrett J).
[111] R I Barrett, ‘Cross Border Insolvency – Aspects of the UNCITRAL Model Law’ (Paper presented at the 22nd Annual Banking and Finance Services Law Association Annual Conference, Cairns, 6-7 August 2005) <http://www.lawlink.nsw.gov.au/
lawlink/supreme_court/ll_sc.nsf/pages/SCO_barrett060805>.
[112] See C Dickens, Bleak House (1853).
[113] Originally called ‘Mareva injunctions’ for Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509, [1980] 1 All ER 213, Gaudron, McHugh, Gummow and Callinan JJ clarified that it should properly be called a ‘Mareva order’, Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 [40], though Kirby J would have called it an ‘asset preservation order’, ibid [79]. In the UK it is referred to as a ‘freezing injunction’: Civil Procedure Rules 1998 (England) pt 25.
[114] As a practical matter, this arises where the defendant has sufficient contact with the first court to establish in personam jurisdiction, but does not have deeper connections with the jurisdiction that would make him beholden to it in anyway. As Davis shows, such a situation arises not infrequently with foreigners’ connection to tropical tax havens.
[115] (2005) 222 ALR 767, [2005] NSWSC 742 (unreported, Campbell J, 19 July 2005). This issue and case are discussed by J Tarrant, ‘Mareva Orders – Assisting Foreign Litigants’ (2006) 27 Australian Bar Review 314.
[116] Ibid [48].
[117] This power is expressly provided in the United Kingdom under Civil Jurisdiction and Judgments Act 1982 s 25.
[118] 2005 Public Discussion Paper on Trans-Tasman Court Proceedings and Regulatory Enforcement (2005) Attorney-General (Aust) and Ministry of Justice (NZ) <http://www.justice.govt.nz/pubs/reports/2005/trans-tasman-court-proceedings-and-regulatory-enforcement/index.html> <http://www.ag.gov.au/www/agd/agd.nsf/Page/Publications_Trans-Tasmancourtproceedingsandregulatoryenforcement-August2005> .
[119] 2005 Harmonisation Committee Report on Mareva and Anton Pillar Orders (2006) Council of Chief Justices of Australia and New Zealand <http://www.
courtsofnz.govt.nz/about/system/rules_committee/projects.html#freez>.
[121] J Nind and M Noyce, ‘Trans-Tasman Proceedings and Regulatory Enforcement’ (August 2005) New Zealand Law Journal 251; P Biscoe, ‘Freezing Orders Hot Up’ (Summer 2005/2006) Bar News 60.
[122] [2005] SASC 498 (unreported, Layton J, 22 December 2005). Another conflicts decision related to this case was handed down in 2006 and so will be reviewed in our next review. See Newcom Holdings Pty Ltd v Funge Systems Inc [2006] SASC 284 (unreported, Nyland, Gray, and Vanstone JJ, 18 September 2006).
[123] Ibid [53].
[124] Ibid.
[125] [2005] SASC 194; (2005) 91 SASR 544 (Bleby J, Vanstone J, Anderson J), special leave to the High Court denied, [2006] HCA Trans 50.
[126] See Foreign Judgments Regulations 1992 (Cth), Schedule.
[127] Benefit Strategies Group [2005] SASC 194; (2005) 91 SASR 544, [44], [57].
[128] [2004] SASC 365, [99] (unreported, Gray J, 15 November 2004).
[129] Benefit Strategies Group [2005] SASC 194; (2005) 91 SASR 544, [59].
[130] [1893] AC 150, 156-58.
[131] Benefit Strategies Group [2005] SASC 194; (2005) 91 SASR 544, [61].
[132] Ibid [68].
[133] [2002] NSWSC 15 (unreported, Bergin J, 1 February 2002).
[134] Benefit Strategies Group [2005] SASC 194; (2005) 91 SASR 544, [71].
[135] Ibid [73] (citing Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1, 12-13).
[136] (2005) 220 ALR 749 [2005] FCA 934 (unreported, Finkelstein J, 7 July 2005).
[137] The quotations, of course, refer to Little River Band hit songs: ‘Reminiscing’ on Sleeper Catcher (Capitol 1978); ‘Take It Easy on Me’, on Time Exposure (Capitol 1981); “We Two’, on The Net (Capitol 1983); ‘Cool Change’, on First under the Wire (Capitol 1979); ‘Playing to Win’, on Playing to Win (Capitol 1984); ‘Help Is on the Way’, on Backstage Pass (Capitol 1980); ‘Lonesome Loser’, on First under the Wire (Capitol 1979).
[138] We Two [2005] FCA 934, [10].
[139] Ibid [1].
[140] Ibid [11], [15].
[141] Ibid [21], [23].
[142] (1997) 189 CLR 345.
[143] Ibid [24], [26].
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/journals/AUYrBkIntLaw/2007/13.html