Pfeiffer Pty Ltd v Rogerson C14/1999 [1999] HCATrans 604 (1 December 1999)

IN THE HIGH COURT OF AUSTRALIA

Registry No C14 of 1998

B e t w e e n -

JOHN PFEIFFER PTY LIMITED

Applicant

and

DAVID ROGERSON

Respondent

Application for special leave to appeal

GLEESON CJ

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 1 DECEMBER 1999, AT 10.17 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC: May it please your Honours, I appear with my learned friend, DR A.S. BELL, for the applicant. (instructed by Hickson Wisewoulds)

MR T.F. BATHURST, QC: May it please the Court, I appear with my learned friends, MR F.M.G. PARKER and MR D.J.C. MOSSOP for the respondent. (instructed by Gary Robb & Associates)

MR D.M.J. BENNETT, QC, Solicitor-General for the Commonwealth: May it please the Court, I appear with my learned friends, DR M.A. PERRY and MR. G.A. HILL, intervening on behalf of the Attorney-General for the Commonwealth. (instructed by the Australian Government Solicitor)

MR W.C.R. BALE, QC, Solicitor-General for the State of Tasmania: I appear with my learned friend, MS S.K. LIGHTON, intervening on behalf of the Attorney-General for the State of Tasmania. (instructed by the Crown Solicitor for Tasmania)

MR T.I. PAULING, QC, Solicitor-General for the Northern Territory. If the Court pleases, I appear, intervening on behalf of the Attorney-General for the Northern Territory. (instructed by the Solicitor for the Northern Territory)

MR D. GRAHAM, QC, Solicitor General for the State of Victoria: If the Court pleases, I appear with my learned friend, MR S.G.E. McLEISH, intervening on behalf of the Attorney-General for the State of Victoria. (instructed by the Victorian Government Solicitor)

MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia: May it please the Court, I appear with my learned friend, MR R.M. MITCHELL, intervening on behalf of the Attorney-General for the State of Western Australia. (instructed by the Crown Solicitor for Western Australia)

MR B.M. SELWAY, QC, Solicitor-General for the State of South Australia: May it please the Court, I appear with my learned friend, MR M.D. WALTER, intervening on behalf of the Attorney-General for the State of South Australia. (instructed by the Crown Solicitor for South Australia)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales: May it please the Court, I appear with my learned friend, MS N.E. ABADEE, intervening on behalf of the Attorney-General for the State of New South Wales. (instructed by the Crown Solicitor for New South Wales)

MR P.M. DONOHOE, QC: May it please the Court, I appear with my learned friend, MR P.A. WALKER, intervening on behalf of the Attorney-General for the Australian Capital Territory. (instructed by the ACT Government Solicitor)

GLEESON CJ: Yes, Mr Walker.

MR WALKER: Your Honours, this is an argument about the confluence of the Constitution, a State statute and the common law. It is an argument where the start and finish, in our submission, is the effect of the Constitution and of the fact that one country was made by the Constitution has upon what is called the common law choice of law rules for tort and it is a case about the effect, depending upon the content of those rules, of the existence of the statute, which in this case would make the difference which your Honours have read about of some $30,000 by reason of the New South Wales regime, to render unavailable what the common law would provide under the common law's substantive doctrine of compensatory damages. So that there are three of the four sources of law in Australia in question in this argument.

The fourth source of law, which is not in question, is, of course, Commonwealth legislation and the significance, therefore, is that this is not a case in which section 109 plays any part, although it may be a case where what some commentators have playfully called the missing section 109A may play a part. In other words, what we will submit is the speaking silence in the Constitution on the question of clashes between State and State legislation and State and Territory legislation. There is no relevant Territory legislation, though we will be coming back to that later on. The starting point, accordingly, in our submission, is the question of the choice of law rule at common law in a country where the supreme law is the Constitution.

GUMMOW J: Well, is that right? Is not the starting point to identify the nature of the jurisdiction that was being exercised by the Supreme Court in the Australian Capital Territory and was that not federal jurisdiction and does that not then engage section 79 and 80 of the Judiciary Act 1987 and do you not then therefore get to the common law through section 80? After all, this proceeding was brought, as the record makes it as plain as a pikestaff, to challenge Stevens v Head and therefore there was a question that immediately arose concerning the interpretation of the Constitution within the meaning of section 76(i).

MR WALKER: That is plain as a pikestaff, as your Honour says, yes. The common law, in our submission, whether it is invoked via section 80 or whether it is applied domestically, as it were, within the Territory - - -

GUMMOW J: I mention that because that makes this case different from McKain.

MR WALKER: Yes, there are other respects in which it is different from McKain, but, in our submission, the difference that your Honour has identified, with respect, is not a difference which will, in our submission, affect any of the fundamental matters of how the common law is shaped.

GUMMOW J: Well it may help you, because section 80 refers to, "the common law in Australia as modified by the Constitution".

MR WALKER: Yes, but we do not need section 80 for that; that is, section 80 uses that reference in place of the common law of England in the original version, but we do not need that reference in the statute for the proposition that the common law in Australia is the common law in a country where the supreme law is the Constitution and whereas this Court made clear in Lange, it is imperative that the common law conform to the Constitution.

GUMMOW J: Well, assume there was no section 80 enacted and the action had been brought in this Court, as it could be.

MR WALKER: Yes. My argument would still be that the common law in Australia first, is one body of doctrine and second, that as a body of doctrine, being one of the four available sources of law in this country, like the other three, that is, like all statutes in the country, it is subject to the Constitution, without any qualification to that proposition of any kind. So that, when I said that this is a case about the confluence of those three sources of law in this case, it is a flowing together which requires that at no time - - -

GUMMOW J: All I am putting to you is it is a case about the construction of section 80 of the Judiciary Act.

MR WALKER: Well, your Honour, in construing section 80 of the Judiciary Act one necessarily asks what is the common law in Australia as affected by the Constitution, and it is that topic which, in our submission, is the subject of this argument.

So far as concerns the question which has been raised in a number of places, including out of courts, concerning section 118, our position is as follows: section 118, because it is in the Constitution, must be considered for the constitutional supremacy which will drive, in our submission, the outcome as to the inquiry for the content of the choice of law rule at common law. But our argument proceeds on the basis that if there were no provision section 118 by reason of (1) what the Constitution does in terms of creating the Commonwealth of Australia, and (2) certain other provisions to which we will come, the same result would follow as we say is clinched by section 118. In that sense and in that sense only, section 118 is not essential to that part of our argument which calls in aid the Constitution but, with respect, because section 118 is there, there is no real point in examining whether or not it would have made the difference to the outcome.

It follows from what we have put to your Honours about the sources of law and the supremacy of the Constitution that unless there is something in section 118 which renders it, as to its content, a prescription in specific terms of a choice of law rule, in this case for tort, then like any constitutional provision in any of its comparisons with what would otherwise be the common law, it is simply one of the provisions to which the common law must conform; and the primary way we submit in which, as to the common law choice of law rules for tort, section 118 provides a standard to which those rules must conform is by way of a prohibition. The prohibition is what we will seek to develop from the antecedent case law as being what some have called the notion of refusing to enforce a foreign odious statute, what might be called the public policy of the forum as a trumping device in relation to the foreign law which would otherwise be applied, or perhaps, as we have put it in our written outline, a form of chauvinism more appropriate to imperial and mercantile England of last century than Australia at the end of this century. Certainly, we submit - - -

KIRBY J: What does "chauvinism" mean?

MR WALKER: It means - - -

KIRBY J: Why are we castigating anyone?

MR WALKER: It means an uncritical preference originally by Monsieur Chauvin for revolutionary France, notwithstanding all evidence to the contrary of the need to criticise, in that case, a country or national attachment.

KIRBY J: You say Phillips v Eyre is based on such an attitude? I would have thought it had a different foundation.

MR WALKER: There are matters in Phillips v Eyre to which we will come soon which, in our submission, are explicitly rooted in a preference for what we would call English public policy, or the British way, over the possibility - possibly only hypothetical; sometimes actual - that other countries will not only do things differently but do things so much worse that they must not be given effect to in the forum. It is that - - -

KIRBY J: Back in the 19th century most countries did do things worse.

MR WALKER: It is integral to the notion of public policy that judgments are formed daily and in ways that are critical for whole populations as to what is better and what is worse. I am not suggesting that public policy is a value-free zone. It is of course a zone where values govern and are the whole purpose of public policy. What we are submitting is that section 118 for the law districts, which are the States and Territories of this country, abolishes the possibility of denigratory judgments as to the public policy explicit in another jurisdiction's statute, for example.

KIRBY J: Did it do that in 1900 or was it then infected by the same chauvinism and is it something which we now, reading the Constitution with today's eyes, see with a different perspective?

MR WALKER: No, it did it from the first instant of the Commonwealth, your Honour.

KIRBY J: So, though originally made by the United Kingdom Parliament, it was unaffected by the chauvinism that was infecting them in other respects?

MR WALKER: I may be misunderstanding how broadly your Honour wishes me to respond to the questions of public policy involved in a feeling that one's country is superior in the way it orders things than another country.

GUMMOW J: The other country in Phillips v Eyre was the colony of Jamaica, actually.

MR WALKER: Quite, to which we will come back as an important matter when considering what is to be gathered as a matter of common law technique from Phillips v Eyre. In our submission, for reasons to which we are going to be turning almost immediately, properly understood, and before one gets to the particular respects in which the Constitution nudges the common law at places towards a certain outcome in relation to choice of law for tort and in other places sets up prohibitions against the choices which might be made, in our submission, at the end of the day what is to be gathered from the common law 19th and 20th century, combined with those constitutional considerations, will be, and not coincidentally, similar to the territoriality principle which underlies one of the major planks of Justice La Forest's reasoning in Tolofson to which your Honours have been referred in the Supreme Court of Canada. The result in the jargon is that, in our submission, as it stands on the facts of this case, including the legislative facts of this case, the common law choice of law rule for tort which ought to have been applied was the lex loci delicti.

GAUDRON J: For what? For everything?

MR WALKER: My argument will be, your Honour, precisely as your Honour has put it, for everything, for reasons which we will develop and explain concerning the so-called distinction between substance and procedure.

GAUDRON J: And is it clear that it was not the lex loci delicti that was not applied here, other than in relation to the calculation of damages?

MR WALKER: It is clear that in relation to the outcome, the lex loci delicti was not applied as it ought to have been, that is for everything.

GAUDRON J: To determine the liability, you mean.

MR WALKER: Yes, and that word "everything" requires recognition of something that we should address at the outset. It follows, we hope, from the way we have opened it to your Honours that choice of law rules are not uniquely prescribed or stipulated in the text of section 118 or any other part of the Constitution.

GAUDRON J: I wonder if the expression "choice of law" is not itself a misnomer, in the context of the Australian Federation?

MR WALKER: Yes, your Honour. We use it because it is time honoured but, with great respect, it is a phrase coupled with the other phrase "jurisdictional rule" which, perhaps, leads to more trouble than it was worth but, in our submission, it does have this essential usefulness in place, for example, of the expression "conflicts", that there will be only one answer for any court as to the law which governs - that is for one court, there will be only one answer to the question what law governs the claim of right and obligation before me. That involves a choice in the sense that, not of a discretion, but that there are available arguments, well rehearsed over the centuries, as to what they might be.

For present purposes, it is clear from the books, that is from the authorities, that "choice of law" is a phrase which, however difficult it may be taken literally, is nonetheless usefully used as a label to describe the means by which a court ascertains, according to pre-existing rules, that regime which is, in Australia, an amalgam of the Constitution, Commonwealth legislation, State legislation or Territory legislation and the common law and which of the regimes available, by reference to the different possibilities which may emerge when States and Territories legislate within their competency as to the outcome of that argument about rights and obligations.

The different possibilities emerge precisely because there is, we submit, an essentially territorial nexus of legislative competence for States and Territories, essentially, if not exactly, and we will be coming back to that proposition. It follows also from what we have said in opening that the choice of law rules, though in this case falling to be considered as a matter of what is the common law in Australia, the choice of law rules may, of course, be altered by the Parliaments within their sovereignty so that the New South Wales Parliament could codify and in so doing amend, perhaps radically, the common law choice of law rules.

GAUDRON J: What do you say the ban is? I thought you said earlier that there was at least a ban in section 118.

MR WALKER: I was just coming to that with the word "but", your Honour. But, like any statute it must be judged against the commands and prohibitions of the Constitution. There is no such statute in play in this case and hypothetical examples are, on the one hand, easy to construct, on the other hand, hard to make useful, so as to compel an outcome in this case. It remains to be said in principle that there is nothing remarkable, indeed it is axiomatic, that any statute of any kind must match the requirements of the supreme law of the Constitution and a choice of law rule in particular will no doubt fall to be gauged against the requirements, for example but not exclusively, of sections 106, 117 and 118 of the Constitution.

When the time comes of an ambitious codification or, more properly, considerable amendment of what are presently the common law choice of law rules by a Parliament, if that time every comes, that will be the occasion when the limits of State or territorial legislative competence to alter the content to an infinite degree of those choice of law rules will fall to be decided. For our position today, what matters and what we assert is that it is self evident there are limits, that is, all statutes must conform to the Constitution just as the common law does, and in our submission it is clear that there are species of hypothetical or perhaps one might call bizarre examples one could dream up of State or Territory choice of law legislation which would rapidly introduce the possibility of having breached section 118.

GUMMOW J: The Territories will be in a different position, will they not?

MR WALKER: Yes, your Honour, they will. Section 118 is addressed, we submit, to the Territories as it is addressed to the States but does not attach to the laws of the Territories. But for our purposes it is the former comprehensive effect of section 118 throughout the Commonwealth which matters and which means that it does not matter in this case that it was a Territory court as opposed to a State court which was seized with the choice of law problem.

GAUDRON J: Now, when you talk about choice of law rule or rules in this context, are you also talking about justiciability or only that part of the law that determines the applicable law, because it appears to me that there may well be different considerations so far as section 118 is concerned at least as to justiciability rules and governing law rules?

MR WALKER: Yes. Yes and yes.

GAUDRON J: Yes.

MR WALKER: May I make it clear. Our argument, if not exclusively devoted to the question of what we call the regime which decides the content of the outcome of the dispute as to rights and obligations, what I might call the applicable law for the dispute, our argument is basically devoted to that. One cannot argue that, in our submission, given the evolution of case law, particularly in this Court, but also in the English precedents upon which that is based, without visiting to some considerable extent the notion that your Honour has raised by the use of the word "justiciability" and which both authorities and commentators have described by use of the expression "a jurisdictional rule".

The metaphor of "threshold" will also enter to describe the same aspect of private international law to which we will come, but our argument is not ultimately about jurisdiction or justiciability in the sense which we apprehend your Honour Justice Gaudron has raised. It is, for the reasons we are about to come to, essential by reason of the common law history.

GUMMOW J: Can you give an example of what you treat as comprehended within the notion of non-justiciability? I was wondering whether Spycatcher is an example.

MR WALKER: Non-justiciability is, of course, like all the words in this area of multiple import, restricting it to what we would call the jurisdictional question, that is the capacity or duty of the court to undertake an adjudication, as opposed to the remoteness of the subject-matter from something fit to be decided by judges according to legal method, such as political questions, and concentrating only on the jurisdictional matter, then, in our submission - and we confess this is uninstructed by great consideration - the obvious example is a claim to jurisdiction by a court over people who have had no physical connection at any of the relevant times, be they - - -

HAYNE J: So "long arm jurisdiction" is it called?

MR WALKER: Laurie v Carroll kind of considerations, yes.

GAUDRON J: But why does it not also include that aspect of Phillips v Eyre which is sometimes referred to as "the double actionability"?

MR WALKER: It does.

GAUDRON J: You know, "a suit is maintainable in the jurisdiction if", et cetera.

MR WALKER: It does. Our argument is that Phillips v Eyre has been forced, we say wrongly, with great respect, to change its jurisprudential character from a rule - - -

HAYNE J: From what to what?

MR WALKER: From a rule which is at least partly, if not predominantly, jurisdictional to a rule which is only choice of law. Now, the two merge at a point where the choice of law rule is expressed as the lex fori. They merge at that point because for a court to enter upon a dispute which it is going to decide according to the law of its own Territory is both jurisdictional and choice of law, but, in our submission, the way in which Phillips v Eyre, whether one calls it a rule or not does matter, but makes the point.

The way in which that has been transformed in the Australian authorities forces one to scrutinise where it came from and the basis upon which it was erected and the purpose for which it was erected and, in our submission, when that is done, two things follow. First, the common law is not as clear as might have been thought as to what ought to have been or ought to be, depending upon this Court's approach to its own authorities, the common law outcome.

Second, it raises matters, particularly the double-actionability on the first limb of the double-actionability requirement; it raises aspects which run, we say, right up against a prohibition in section 118, and that is the prohibition in section 118 against the forum court deciding to denigrate the positive enactment of the locus delicti as a ground for refusing to enforce it by adjudicating rights and obligations in accordance with it.

HAYNE J: Does it follow from that last proposition that a State could not pass a law saying that in all actions in the Supreme Court of this State, having interstate or intra-national connections, the State court will apply the law of the forum regardless of the connection?

MR WALKER: We do not think that last proposition necessarily has in train that consequence, your Honour, but it is, with great respect, the question which requires to be asked about the principles upon which we base our argument, but the answer to that question really should await a statute which comes along in that form. It is possible, though we stress we cannot undertake on the facts of this case and the issues of this case to argue it, it is possible that such a law may, depending on what the court finds or affirms to be the common law, run into difficulties posed by a combination of sections 117 and 118, depending upon the parties before the court, but that is so speculative and hypothetical that it is not possible to answer your Honour squarely as to whether the consequence your Honour raises flows necessarily and always or would simply be a possibility.

HAYNE J: But section 118 would prohibit a law that gave effect to Government of India v Taylor in Australia saying, the courts of this State shall not enforce the revenue, laws, judgments, et cetera, of another State, and the question is, does it go beyond that kind of operation?

MR WALKER: There are, of course, a number of other prohibitions - I do not suggest that they are unimportant, but they could be called lower-order prohibitions - which have to do, for example, with the impossibility under section 118 of a State enacting legislation, which would render either impossible or near impossible judicial recognition of the statutes of another State. On its face section 118 of course imports, and has always been considered perhaps to have as its primary function, contrary to our general argument, that kind - - -

HAYNE J: The evidentiary proof, et cetera.

MR WALKER: Yes.

HAYNE J: Yes.

MR WALKER: Which goes back a century earlier, obviously, to the American precedent for it.

GLEESON CJ: Mr Walker, a related question may be this. The statutory provision that operates to achieve the result that you say should apply in present case is section 151F of the Workers Compensation Act of New South Wales a court:

may not award damages to a person contrary to this Division.

MR WALKER: Yes, your Honour.

GLEESON CJ: What do you take the word "court" to mean in that section?

MR WALKER: In our submission, and notwithstanding at first sight it is against our argument, the Interpretation Act and ordinary canons of interpretation, if they continue to apply, requires "court" to be read as a New South Wales court.

GLEESON CJ: How do you get from that to the consequence for which you contend?

MR WALKER: I get to the consequence for which I contend by arguing that the choice of law rule at common law, subject to the Constitution, which is applied as a matter of the law binding the ACT court, requires that the rights and obligations of the parties be determined as if they were being determined according to the New South Wales law. The "as if" is critical to our argument. New South Wales law is not being applied of its own force.

GUMMOW J: No, but at some stage, a point could be reached where there would be an argument as to whether section 80 did not present a section 109 issue.

MR WALKER: Yes. At some point that will arise. There is also an anterior question always in these cases which, depending upon its answer, means there will not be any problem of a kind called a conflicts problem at all, and - - -

GUMMOW J: Yes, what I mean is if the New South Wales statute purported to require the ACT Supreme Court to act in a particular fashion - - -

MR WALKER: It would fall foul of 109 by reason of a federal statute requiring the ACT to proceed differently.

GUMMOW J: Yes, or the federal statute which establishes the Territory court and gives it its powers.

MR WALKER: Yes, rather than assent to the last proposition, your Honour, may we simply submit that that last is a possibility.

GUMMOW J: Yes.

HAYNE J: But it drives you back to the important point, does it not, that when a court of State A looks to the common law rules of conflicts and derives an answer on what we have described as choice of law, it is deriving an answer about the content of rules, obligations, rights, et cetera, which the courts of State A enforce, if you like, ultimately, in furtherance of the judicial power of that State and not by application of the law of State B but in furtherance of the judicial power of State A because that is where its common law rules (universal throughout Australia) have taken it.

MR WALKER: Yes, emphatically so. That is also offered in answer to your Honour the Chief Justice's question which I wish to elaborate in a moment. It is not accurate, or at least it can be misleading, to talk about the law of New South Wales or the law of the Australian Capital Territory, though as shorthand, and properly understood, it is perfectly convenient. For the reasons your Honour Justice Hayne just pointed out, the law of New South Wales and the law of ACT has a number of matters which are in common and are beyond the competency of their legislatures to affect, but the common law is not beyond the competency of a legislature to affect, subject and subject only to 109 matters in relation to legislatures apart from the Commonwealth, subject to section 51 and other limitations on the subject matter of Commonwealth legislation and finally, of course, the Constitution for all of them.

It is for those reasons, in our submission, that in answer to your Honour the Chief Justice, we are bound to say that it is the common law rule, both in its traditional form as, as it were, enunciated in textbooks talking of a rule in Phillips v Eyre plus, in our submission, as it ought to be understood based on the authorities construed in deference to the Constitution, that the law which is applied is, of course, the law of the forum because the choice of law rule and application is the law of the forum and the statutes of the locus delicti which, if that is the choice, are to be applied by analogy, as it were, which involves mutatis mutandis where that is necessary.

Thus, for example, a law of the locus delicti may have, on utterly orthodox grounds and not only by reason of provisions such as the Interpretation Act 1842 (1987) in New South Wales, an essentially or, perhaps exclusively, territorial reach. The fact that it speaks about what may be done, as in the provision in question in this case as your Honour the Chief Justice has pointed out, by a court which is territorially located in the legislating Territory and is, of course, the court which is applying the choice of law rule is not one of those courts is not something which defeats the choice of the law to be applied but merely recognises that there is a decision being made as if the transaction or relationship were governed by New South Wales law.

KIRBY J: What is the meaning in section 118 where it seems to draw a distinction between "the laws" and "the public Acts" of every State? What is the distinction that is being drawn in that? Is it a reference to, say, the imperial laws that continue in force or is that a distinction between the common law, inferentially common laws and the public Acts?

MR WALKER: I think the short answer, your Honour, is this, that one rejects - - -

KIRBY J: Is this the subject of any authority, or not?

MR WALKER: Not, I think, to justify the answer I am about to give your Honour except for all the authorities that may be cited for the first of my propositions which is this: the common law of Australia is one body of law by reason, amongst other things, but particularly of this Court's position at the apex of a judicature, Chapter III.

KIRBY J: I know that doctrine and I participated in saying it myself but my eyes have just fallen upon that provision of section 118 which, on one view, may suggest, I think, differently.

MR WALKER: No. "Full faith and credit" is an expression which is wholly unsuitable to, we would submit, antithetical to the States and Territories, that is the Commonwealth, throughout which 118 commands full faith and credit, their obedience to their own common law. One does not give full faith and credit to one's own law. One obeys it because it is the law. Full faith and credit is something given to a neighbour's or sister's or brother's State system of law. It is not something one gives to one's own law.

KIRBY J: Yes, but the question is whether section 118 has been written on a different hypothesis, an American hypothesis that the common law is different from State to State.

MR WALKER: I cannot answer that either from travaux preparatoires or authority, your Honour. I will have to take that on notice.

KIRBY J: At some stage you will have to take us to the American origins of the predecessor to 118.

McHUGH J: "Laws" is not in the United States Constitution and did not Sir Anthony Mason in Breavington express the view that "laws" was inserted in case the words "public acts" did not cover laws that were in force.

MR WALKER: Yes. That was, with respect to Justice Kirby, exactly the point in all the colonies and it was going to continue, not least by reason of the Constitution, section 107, because the laws, quite apart from the common law of those Territories, notoriously included laws other than those enacted by the local legislature and imperial Acts are one obvious source. Whether that is a complete answer to your Honour, historically, or to pick up Justice McHugh's observation, whether it is the complete answer to the verbal distinction between the United States precedent or analogue and a section 118, I frankly do not know and will have to research for your Honours.

KIRBY J: Whilst we are ditching chauvinism, may it be appropriate on the brink of a new century that we dispatch lex loci and the Latin expressions. Very few Australians now learn that and speaking for myself, I think it may be appropriate that we use the law of the tort.

MR WALKER: Your Honour, there is always the question, I suppose, as a species is approaching extinction as to whether you hurry it or seek to slow it down in that progress if that is progress but - - -

KIRBY J: Justice Meagher would be proud of you.

HAYNE J: The question of the prominence that law schools give to the teaching of conflict of laws in a Federal State which may be an altogether separate subject.

MR WALKER: Yes, we use the expression - - -

GUMMOW J: And an alarming one, I think.

MR WALKER: We use the expression because it has been used in the authorities - - -

KIRBY J: I am not blaming you, I am just - - -

MR WALKER: If there is a terse English phrase - - -

KIRBY J: There will be a lot of people who will read our decisions who will not understand the English and who will be curious at the Latin.

MR WALKER: Your Honour, we would be content with some translation such as "law of the place of the wrong" except the suggestion, if that phrase is used anew, there may be a difference between the meaning of the wrong and delicti is one which is not worth introducing simply in order to remove a dead language.

GUMMOW J: They took the phrase "in loco parentis" out of the Family Law Act at one stage, over Sir Maurice Byers opposition, and put in "member of the household". That gave rise to at least two cases in this Court which I was involved.

GLEESON CJ: The usual consideration that is thought to commend the use of Latin is that it is a universal language and, importantly, that it is a dead language, and that its meaning does not change from generation to generation.

MR WALKER: It has the advantage in this area as well that it may well be a continued source of link, not merely superficial link, but real link with the writings of the civilians and the writings of other centuries on the point.

KIRBY J: It may be a dead language, and so on, but a lot of the people will not understand it. Citizens will not understand it. However, different justices may take different views on this.

MR WALKER: May I then turn to why, in our submission, as a matter of common law, the notion of double actionability, the so-called rule in Phillips v Eyre, ought to be scrutinised, in our submission, by this Court to the same end as this Court, for example, scrutinised Bilbie v Lumley and Kelly v Solari, for example, in David Securities, to that same end and employing, with respect, exactly the same technique in its search for what is the common law in Australia.

GUMMOW J: It is a veil of tears.

MR WALKER: I will stay very briefly in that case, your Honour, and I should say no more briefly than I was going to stay in any event. In Koop v Bebb [1951] HCA 77; 84 CLR 629 the passage at page 644, which concludes what used at least to be the well-known passage starting at page 642, expressed what was at the time the use being made of the double actionability rule in what was then called the conflicts area. We would pick it up where Sir Owen and the other Justices have completed their citation from Mr Justice Holmes from which they are departing:

English law as the lex fori -

we stress that -

enforces an obligation of its own creation in respect of an act done in another country which would be a tort if done in England -

hence our use of the expression in answer to the Chief Justice, "as if" -

but -

and then a very important expression in relation to the questions asked by Justice Gaudron -

refrains from doing so unless the act has a particular character according to the lex loci actus.

Which, I am sorry, Justice Kirby, will be interchangeable with the lex loci delicti.

KIRBY J: I am not seeking to control Sir Owen Dixon; I am simply speaking of our age.

MR WALKER: It may actually defeat one virtue of the Latin, that it is always used in a standard form.

KIRBY J: They learnt Latin back then in 1951. I learnt it myself.

MR WALKER: The "actus", your Honour, perhaps may be a more precise version of the flavour that we are seeking to achieve. It would also have to be unfortunately omitus. So far as concerns what the Judges were saying in that passage for present purposes, we wish to stress this. It is expressed in terms of its function as a rule which says yes or no to the exercise of jurisdiction. That is, to entering upon the adjudicative function - the expression "refrains from doing so unless".

HAYNE J: Is that right?

MR WALKER: Yes, your Honour.

HAYNE J: Personal jurisdiction might be asserted and it would simply be judgment for the defendant.

MR WALKER: I am sorry, it refrains from entering upon, adjudicating, on the merits on that dispute. There may be judgment for the defendant with an estoppel or res judicata.

HAYNE J: No, it adjudicates on the merits by saying, "No remedy will be given by this Court in these circumstances".

MR WALKER: Yes. It is in that sense that justiciability and jurisdiction are, though traditional, unhappy words to describe this effect of the rule as it was then understood. The critical matter for present purposes is by reason of the function which your Honour Justice Hayne has just corrected me on, it was the lex fori which was being enforced so that it permitted writers to say - and, with respect, correctly - that the law being applied was lex fori, with a very important parenthesis, if, and only to the extent that, it was the same as - and I am now generalising - lex loci delicti. That is how that rule was seen at that stage and it is for those reasons, in our submission, that the perhaps unfortunate label of jurisdiction or justiciability was given to its operation. It was of course, as we put earlier, an example of how such rules merge with true choice of law rules when the lex fori is the law in question.

GLEESON CJ: Are you inviting us to conclude that the law that applies intra-nationally, in this respect, should be different from the law that applies internationally?

MR WALKER: We are inviting the Court to hold that the law which applies intra-nationally is brought about by a different set of requirements than those which will produce the rule as to international conflicts; whether that will produce a difference in content is a matter of (a) principle and (b) authority, but, in our submission, there are intra-national matters and the Constitution is the first of them and section 118 and section 106 are obvious ones as well, particularly, which are peculiarly applicable to the intra-national question and which will not have a role either at all or in the same way as to the international question.

Your Honours asked me, do we submit that there will be a difference? There may or may not be a difference, but there is a difference, method and reasoning by which this Court should reach the result and the essential reason for that is, quite simply, that the Constitution made one country and did not amalgamate, uneasily, a number of countries, whereas the law as between nations proceeds upon, recognises and is designed to achieve the possibility of nations continuing to exist independent and sovereign from each other under some form of rule of law. None of that imperative implies where a Constitution has made one country.

GAUDRON J: And it may be, Mr Walker, that section 117 also has some bearing on intra-national disputes.

MR WALKER: We have mentioned that several times, I think for that reason.

GAUDRON J: One can envisage situations where the rights of a citizen, say the citizen resident in one State might be different for the purposes of section 117 if they seek to enforce them in the courts of another State or something, so that there may be disability or discrimination.

MR WALKER: Yes. May I return to your Honour the Chief Justice's question: public policy, of what I will call the forum, be that a State, Territory or something which I will call Australia in relation to federal courts, is likely or does have a role in international conflicts, which it cannot have in intra-national conflicts.

GLEESON CJ: Well, it might be that it is not necessary for your argument to focus so much on what you have called the chauvinism of a particular rule; it may be sufficient to acknowledge that considerations of comity may be relevant in international dealings that are not relevant, indeed that are positively excluded intra-nationally.

MR WALKER: Yes. That is, with great respect, another way that we would embrace that the language of comity, the idea of comity, is at odds with, among other provisions of the Constitution, sections 106 and 118.

KIRBY J: And that is reliant not just on 118, that is reliant on perhaps not even particular sections but the very notion of calling into existence a new nation which is a federation.

MR WALKER: We would refer as well to covering clauses 4 and 5, covering clause 4, making the country; covering clause 5, subjecting everyone to the laws, and we would call those in aid but, with great respect, we would accept the formulation as your Honour Justice Kirby has put it. It is the fact of what the Constitution did by making a country as well as the specific provisions to which we refer which mean that to talk of comity is, as it were, a constitutional offence.

KIRBY J: It is not the way the United States judges have approached the matter though.

MR WALKER: No, but in our submission it is the way in which our structure, particularly our relation to the common law, requires the outcome in this country. Your Honours, in dissent in Breavington v Godleman [1988] HCA 40; 169 CLR 41 Justice Brennan in the well-known passage at page 110 turns to this categorisation of what the so-called rule is doing and says at the top of that page:

The two conditions -

that is the double actionability -

are not merely the criteria of the forum's jurisdiction -

and that, of course, is used in the sense that I have sought to argue earlier today -

they state the substantive law which governs a plaintiff's right to recover a judgment in respect of an extraterritorial wrong. The two conditions govern both the existence of the forum's jurisdiction and its exercise -

Perhaps that is the merger of which we speak -

They are part of the lex fori.

And then there is the passage which I have already read from Koop v Bebb. Following the citation from Lord Wilberforce, his Honour proceeded:

The forum must determine its jurisdiction and the law to be applied in exercising its jurisdiction according to the lex fori. There is no other system of law to which these basic questions can be referred. The two Phillips v Eyre conditions -

which is the shorthand his Honour was adopting -

are applied as part of the lex fori. Then, the lex fori being the governing law, the second of the Phillips v Eyre conditions requires reference to the lex loci in order to determine whether that condition is satisfied.

And there is a reference to Anderson. That famously was taken up and applied in McKain v Miller [1991] HCA 56; 174 CLR 1. We do not go to the extended passage. Could we take your Honours for present purposes, first, to pages 38 and 39 where at the foot of page 38 a number of things require observation. First, there is the reference to the fact that what was now preferred to be stated or:

the common law rules for application by Australian courts in cases of Australian torts -

which, it is clear from the beginning of that sentence, refers to what is also being called "íntranational torts" -

in terms to which a majority of this Court assent, we think it right to adopt rules expressed in more categorical terms.

More categorical than what Justice Brennan had called the Phillips v Eyre requirements. What is being recognised in that passage at the foot of page 38 and the top of page 39 is, first, that what Justice Brennan did in Breavington v Godleman was not to promulgate the law. It could not be as a matter of the way in which the Bench divided. Second, what is recognised in that passage is that it is not simply an application by incorporation, as it were, of Phillips v Eyre, that there are matters which are being altered as a matter of common law technique by the majority as what they there held to be the law.

Now, for the reasons that we have expanded upon in writing, in our submission, that is a part of the majority judgment in McKain v Miller which did not result from whatever benefit the Court obtains from argument, and we have drawn attention to the possibility that that is a reason why it ought to be re-examined by this Court.

GUMMOW J: It also does not address the situation of an action in this Court between residents of two States in respect of a tort.

MR WALKER: No, it does not. The occasion did not call for it.

GUMMOW J: No.

MR WALKER: If one were promulgating a general rule, then that is one of the matters that would need to be considered.

Your Honours, Stevens v Head, of course, does not add to the way in which the common law was thus, as it were, evolved from the special function on the way to applying lex fori which the Phillips v Eyre double actionability rule had as was perceived in Koop v Bebb to a frank choice of law rule via Breavington v Godleman in dissent enunciated for the first time in McKain v Miller and repeated in Stevens v Head. That there were difficulties even before any of that happened, in our submission, can be illustrated very briefly. We have already referred your Honours to Koop v Bebb. Your Honours will recall that there is a footnote on page 643 of 84 CLR where Justices Dixon and the others refer to the discussion by Justice Cussen, to which we will not be taking you, but to which we refer your Honours in Varawa v Howard Smith [No 2] (1910) VLR. The passage where Mr Justice Cussen discussed a deal of the common law is at pages 525 to 532. Now, a lot of that discussion concerns the so-called second limb of Phillips v Eyre, rather than the first limb, and it is, of course, the first limb which is the subject of our attack in relation to its status as part of the common law choice of law rule in this country.

HAYNE J: You describe it as "part of a common law choice of law rule". What do you mean in this context by describing it as "a choice of law rule"? What law is chosen by this double actionability test?

MR WALKER: May I commence my answer by noting that the supposed difference between matters of substance and matters of procedure complicate considerably a simple answer to your Honour and I would wish simply to note that and then not complicate it, I hope. That which is chosen by the forum, that is, by the forum court according to the law binding the forum court, lex fori, if one will, is the set of rules, what may be done, what may not be done, what consequences follow from states of affairs described in the law, which will then be applied as the pre-existing law to the facts as they are found according to judicial process so as to result in the content of the judgment declaring or enforcing the respective rights and obligations.

HAYNE J: But to which law?

MR WALKER: That is a long-winded way of saying that it provides that the content of the dictates of law by which one knows from the application of the general to the particular how the parties before the judge are to have their positions adjusted by judgment, by order. Thus, for example, if New South Wales passes a moratorium statute which affects, according to its terms, being a New South Wales moratorium statute, the way in which a purchase price may be obtained and, therefore, enforced in default of payment for a contract to govern by the law of New South Wales then the Moratorium Act notwithstanding - it speaks to and of New South Wales only and not of Victoria - will provide the content of the vendor's right to the price when the vendor, invoking the law of Victoria as the forum, finds itself having rights and obligations determined according to the law chosen by the lex fori.

The lex fori chooses the law of the contract and by its own choice of law techniques ascertains that the proper law of the contract is New South Wales. That does not bring in some etiolated version of the common law ignoring the statutes which operate upon common law rights. It includes the New South Wales Moratorium Act and again notwithstanding and, perhaps because, that Moratorium Act in New South Wales applies only to and for New South Wales, in Victoria a Victorian court, obeying its dictates that the law of New South Wales is the law chosen to regulate the rights between contracting parties enforces the Moratorium Act and that is Merwin v Moolpa as your Honours are aware.

HAYNE J: But, on that example the content of the rules that are applied to adjust the rights and obligations of the parties may be found in the example you just gave in New South Wales law, though it is applied by the Victorian court pursuant to its rules, the Australian rules, of conflict of laws.

MR WALKER: We need to insist, and it may be we need to concede and recognise, that what is being done when a court is applying the law of another place, that is a place other than the place providing a legislature binding the court, it is applying its own law, answering the dictate of its own legal system. It is for that reason that one, in considering matters of substance and procedure, ought not hurry, a priori or in the abstract, to categorise, either in principle or by reference to established categories in case law, particular statutes, especially statutes, as substantive or procedural.

First one asks is there a law in the forum which compels the forum court to proceed in a particular way. We have already hypothesised that there may one day be laws of forums which require the forum court to make a choice of law in a particular way but there are already a multitude of forum statutes which require, for example, process in the Supreme Court of New South Wales by way of delegated law making and rules to be on A4 paper and typed in a particular way, to use the most trivial example, or for service to be accomplished in another way, to use a fundamental example. They are laws which apply just as the choice of law rules apply as lex fori and they must be obeyed and there is nothing, by definition, about the common law rules of choice of law which can stand for a second against an inconsistent statute.

HAYNE J: But before we come to the substance procedure problems, if you make an analysis of the kind you made in relation to a contract, against the principles stated in McKain v Miller, to which law does the forum court look for the content of the rules that it will use to adjust the rights and obligations of the parties in a tort case.

MR WALKER: In a tort case. The place where the wrong act or omission occurred. It would be convenient for my answer if I could have confined it to "act", but I cannot, but, in our submission, the common law has no difficulty with locating omissions, however odd particular examples may be.

HAYNE J: If that is right, that answer, what is the purpose of the double-actionability test? Is it a filter to filter out some kinds of claim from consideration, is it a choice of law test; what is the purpose that you say is fulfilled by the double-actionability test as disclosed in McKain?

MR WALKER: No good purpose is served by it. An unconstitutional purpose is served by it of requiring, not merely permitting, but requiring the forum court to pass some judgment about the lex loci delicti.

McHUGH J: Well, one good purpose that is served by it is that it keeps some cases out of the courts of the forum and, I know you say it can be dealt with on public policy grounds, and you seem to concede in your written submissions that such a rule is necessary to filter those cases, but it can be argued that it is a particular application of public policy. In this day and age, the question has to be asked, why should, in any event, courts of one forum be used by people whose causes of action arise in another?

MR WALKER: There is a short answer to that and that is that one should not be forced, in a country which has constitutionalised travel and has constitutionalised non-discriminatory treatment in Commonwealth areas of citizens, one should not require people to be able to sue only in a place which may be very remote from where they are. So that, when one suffers misfortune on a holiday that has taken you across the continent at real expense - - -

McHUGH J: Yes, but you are talking about car travel, but the law at tort, it goes beyond highway accidents, you know.

MR WALKER: It does, but unless it can accommodate those matters then, in our submission, in principle, it will not be right.

McHUGH J: But why should the ACT - - -

MR WALKER: It is not only motor cars, your Honour.

McHUGH J: - - -for instance, be a forum for New South Wales litigants? I mean, in the State of New South Wales and the other States are invested with federal jurisdiction in criminal cases to the detriment of other litigants. That is something that cannot be avoided. But there is something to be said for this first condition in the sense that it is a filter.

MR WALKER: Yes, but your Honour is now talking about a docket control filter rather than an odious statute public policy filter. It is its roots in the latter kind of filter which, in our submission, renders it unconstitutional and not the common law in this country accordingly.

GAUDRON J: In any event, in a Federation such as ours, it is a very ineffective docket filter.

MR WALKER: I was going to come to this, that docket - - -

GAUDRON J: As this case shows.

MR WALKER: Docket control is not something one would expect to find the common law proceeding upon unless one can locate some general principle in the common law that courts ought to be able to deny people who are otherwise subject to its jurisdiction or entitled to invoke its jurisdiction the adjudication which they seek.

McHUGH J: But you seem to want to constitutionalise this rule. Why cannot - - -

MR WALKER: No, I do not seek to constitutionalise the rule at all.

McHUGH J: You seem to want to invoke section 118 to prevent the States and Territories from legislating to protect their courts.

MR WALKER: No, your Honour. I think I have protested several times, your Honour may think overmuch, that we do not say that legislation is impermissible according to the argument we present. What we say is, like all legislation it will be measured against the yardstick provided by the Constitution which is supreme over it. There is nothing surprising or constitutionalising about that except in a sense that that expression has never been used hitherto, except in the sense that the common law of this country is constitutionalised or all the statutes of this country are constitutionalised.

McHUGH J: Let me get you down from the abstract to a concrete illustration. Could the ACT legislate to prevent causes of action arising in New South Wales from being heard in the courts of the ACT?

GAUDRON J: It may be that that involves questions of section 122 in any event and if it were a State court it might involve section 117.

MR WALKER: May I add some others which I gratefully adopt. First, via section 122, one looks at the Court Act and for the definition and stipulation of the jurisdiction of the court, and the first step would be to examine for repugnancy, and if there is any to reconcile it, between provisions which state the jurisdiction of the court which we submit then import a duty to exercise it, so you cannot say to every fourth person, "You are turned away - - -

McHUGH J: Let me give you a simple illustration. Supposing the ACT legislature passed an ordinance or a piece of legislation which says, "The courts of this Territory shall have jurisdiction to deal with tortious acts or omissions committed in this Territory and not otherwise".

MR WALKER: It may be that for the territorial court, which is not a court referred to in terms by Chapter III, there would be no difficulty, because of section 122, in doing that. There is, of course, no difficulty in Federal Courts or in other courts which are being created rather than recognised as the High Court - created by the Constitution, the High Court, or recognised, the Supreme Courts, that maybe there is no difficulty, as with Federal Courts, of limiting their jurisdiction. If it were only a jurisdiction-limiting provision, it would be no more remarkable than those jurisdiction-limiting provisions which apply with respect to the Family and Federal Courts. That would not be a position which would throw up the possibility of what your Honour accuses me of seeking to do, namely, constitutionalising a choice of law rule. It would not throw it up at all. You would have gone to a court whose door is not open to you at all.

It may be - and I apologise for not being categorical, so I need to think about it - that 117 would be engaged, as her Honour Justice Gaudron has proposed. That would depend upon facts which would need to be available.

GAUDRON J: For example - - -

MR WALKER: It may be - I do not wish to place too much emphasis on that possibility - if it were not a Territory court but it were a State court who did that, depending upon the court in question, there might be Chapter III problems as to whether there are abrogations of the constitutional role of courts, including the Supreme Courts named in the Constitution, if the jurisdiction were - - -

GUMMOW J: There would be inconsistency perhaps with section 39 of the Judiciary Act.

MR WALKER: Yes, there is that as well.

GUMMOW J: In so far as diversity jurisdiction is - - -

MR WALKER: It may be that there would also be Chapter III difficulties if one were to cut a court down, in effect, so that one can see that justice is no longer available in practical terms. In our submission, those raise very large questions of the kind of legislation which to our knowledge has not been attempted which, while not abolishing rights or obligations, effectively denies means by which they might be enforced. Questions of that kind, which might involve obviously section 109 inconsistencies with the Judiciary Act but perhaps more importantly Chapter III problems, would need to be considered.

The example your Honour has put to me is really in one sense a very simple example with a very simple answer. Can the Parliament create a court of limited jurisdiction? Yes. Can it change a court's jurisdiction after it has created it in a way which might be described as limiting, restricting or reducing it? Yes, and for the same reason as it may expand it, subject to whatever other requirements there are in the Constitution which might limit that power. That is of course the overt publicly available way of exerting docket control which one can contemplate.

McHUGH J: Is there not some inconsistency between your answer to the Chief Justice and what you have just been saying? In terms of the second limb of the Phillips v Eyre rule, you say notwithstanding it is a direction to the Court, nevertheless it has to be taken into account in this choice of law context but, if you look at it in terms of the first limb, although it is a direction to the Court, it seems to have some different character.

MR WALKER: Yes. Direction to the Court can be used in two senses. All law, including substantive law to be applied by the Court, can be seen in one sense as a direction to the Court as to how certain things must fall out. Then there is, in the sense that we wish to use it for a slightly later part of our argument, a more specific form of legislation which in terms is directed to a court which is why, in answer to the Chief Justice, particularly the opening words which are of a familiar kind, conferre Stevens v Head, there are statutes which are on their face speaking to a court other than the one which is now, according to the choice of law rule, setting about applying the law of the locus delicti.

That gives rise, as I said before, first, to the question, is there any statute or delegated legislation binding the forum court because it is a forum law which casts light on what may be done? If so, that is the end of it and that is how you must follow that. That may or may not be subject to 118 problems of the kind I speculated about in answer to your Honour Justice Gaudron. The second matter of statutory interpretation which is anterior in a sense to what your Honour Justice McHugh has asked me, that is how do you tell what part is to be applied and what part is not be, is whether or not on its true interpretation, even taking into account the "as if" approach that informed my answer to the Chief Justice, the foreign statute, the out-of-State statute, cannot in terms apply to the adjustment of rights and obligations between people in another court, a court of another Territory.

So one might suppose that there could be a law which the choice of law rule picking up nonetheless, as it were, disapplies itself, but, again, we speculate. The ingenuity of the draftsmen may, particularly in some form of co-operative State scheme, come up with such a self-denying ordinance around the country.

McHUGH J: Well - - -

MR WALKER: But otherwise - I am sorry, your Honour - - -

McHUGH J: Go on.

MR WALKER: - - - but otherwise territoriality underpins my argument for this reason. When one talks about lex loci delicti, one is talking about a system of law which by and large applies, governs conduct and regulates relations only within the Territory of the legislating authority, by definition, as I say, subject to an inexactness that does not matter for our argument. When - - -

McHUGH J: Now - sorry.

MR WALKER: I am sorry. When it is imported to use one of the metaphors one finds in the books "by the law of the forum" as the set of rules to determine the outcome of a dispute being heard in the forum by people in the forum, it is obviously not being imported, one, as a law in itself in force in the forum and, two, nor is it being imported in a way which is self-destructive of the importation along the lines of saying, "Well, we import it, but it was only a law for New South Wales; we sit in Victoria and it cannot apply."

The very notion of importation involves, as I say, the mutatis mutandis, the "as if" exercise, which is, in fact, explicit in the traditional formulations of the rules in Phillips v Eyre and is of the nature of a choice of law rule which imports the rules of another place to apply in the place where the court sits.

GAUDRON J: Just like section 79 and 80 of the Judiciary Act.

MR WALKER: Yes, your Honour.

McHUGH J: Now, much of your argument, in fact, all of it so far, I think, is really concentrated on a situation of courts, rights that can be enforced in courts in one forum or another, but much modern law is concerned with tribunals. Sometimes the law is only enforceable in a tribunal. Sometimes a tribunal is given jurisdiction and then the Ex parte Barrett/Opit sense, it creates substantive rights and liabilities by conferring jurisdiction. Now, assume there is no anti-discrimination legislation in Victoria, but there is in effect an anti-discrimination tort in New South Wales enforceable only in a special tribunal, can that be enforced in the Supreme Court or a court of Victoria on your argument, if you abolish the first rule, the first limit of the Phillips v Eyre rule?

MR WALKER: It depends on that second or the anterior pieces of statutory interpretation that I have referred to entirely. If the law setting up the kind of tribunal and novel rights that your Honour has talked about, if the law properly understood, and I have to say, obviously, according to the law of the forum, the way you interprets statutes which in Australia will obviously include great deference if not adherence to what the courts of the legislating Territory have said about its own law, if the law - - -

McHUGH J: If I can make it easier for your answer. Supposing you have a two-part statute which says, "It shall be tortious wrong in New South Wales to discriminate against somebody on the ground of sex. An action for this tort may be brought before the X Tribunal". Now, is that enforceable in the Supreme Court of Victoria?

MR WALKER: Not necessarily, but not necessarily not. If I can explain?

McHUGH J: That is a helpful answer.

MR WALKER: Your Honour calls it a tort in that last question.

McHUGH J: Well, it has got it wrong.

MR WALKER: What your Honour is supposing is an entirely new statutory regime.

McHUGH J: Exactly.

MR WALKER: Which creates rights and obligations which are nonetheless rights and obligations for being new or statutory.

McHUGH J: Yes.

MR WALKER: What we are arguing about - and this is by way of an evasion before I return to answering your Honour - in this case is the common law choice of law rule for tort properly so-called not necessarily statutory duties, not necessarily, and, of course, I included in that the tort of breach of statutory duty.

McHUGH J: I was going to ask you that.

MR WALKER: I do.

McHUGH J: You get into delicate ground if you start distinguishing between common law torts or a breach of statutory duty is a common law tort.

MR WALKER: Yes, it is, that is why I say I include within that the breach of statutory duty. But that is not, of course, what your Honour has asked me to suppose. Your Honour has asked me to suppose a regime self-contained which creates new rights and which there is no Sovar v Henry question about. It just creates new rights and provides, in terms, the one and only way those rights can be enforced. First, the common law choice of law rules for tort do not have to deal with that. There can and should be choice of law rules for such matters. Second, it will require, first of all, interpreting the statute that sets up the new regime. If, on its true interpretation, it falls on the Sovar v Henry side of the line, that is, there are matters created by way of obligation or prohibition, breach of which the common law would regard as actionable without any machinery being provided, then the problem falls out in accordance with the ordinary application of the choice of law rules as to tort, subject only to the next matter to which I come.

The second half of the statute your Honour has asked me to suppose is the enforcement or machinery part of it. If it is sufficiently integrated with the first part which created the rights by expressing the commands or prohibitions as to render the former non-existent without the latter, thus, for example, if your right is defined as the outcome of a discretion exercised by an administrator, then that is the only way in which you can obtain the right by going to the administrator or the Tribunal.

It may be that machinery provisions in Part 2 of the statute your Honour has asked me to suppose could also be expressed in such a way as to prevent the statutory duty being actionable anywhere else because, in terms, it may say that this is obtainable only in New South Wales; but I speculate again, such provisions are not familiar and are not to be gathered by the implication of territorial limitation of statutes. Territorial limitation of statutes, after all, applies to legislatures which have been legislating against the background of common law choice of law rules for tort and they have been doing so for nearly 100 years in this country.

At the end of the day it is a matter for the forum court's law as to choice of law, which is why your Honour is asking me the question, but what we are saying is that during that process one has to interpret the statute which happens to provide, happens to be a source of law which is then considered for importation to decide the dispute.

McHUGH J: The great difficulty I have about the whole area is the effect of modern legislation on tort area which in some types of legislation almost - it, in fact, abolishes the tort or its consequences then legislates a new, sometimes enforceable only in a particular court.

MR WALKER: That may not be a difficulty at all, your Honour, because in the example I have given where the right is actually constituted by and is given its only existence and content by the outcome of a determination by a tribunal - - -

McHUGH J: Maybe a court.

MR WALKER: - - -in that case then, in our submission, it will stay at home. It cannot go abroad and, with respect, maybe that, if one wants docket control, again do it in that way but, in our submission, docket control needs to be achieved directly and overtly and it is indirectness of operation and it is dubiousness of efficacy by modifying the rule in Phillips v Eyre at common law for choice of law in tort is, in our submission, not an appropriate judicial technique. It is not a matter which ought to be taken into account, (a) because it is not a matter the courts should concern themselves with. They should not be concerned to turn people away; that is for executive and legislative governments to consider, and (b) it is not a matter where there is any way in which according to ordinary judicial methods, including legal argument, this Court could have any confidence whatever that what it does by way of altering the common law will be successful in achieving docket control.

GAUDRON J: In fact, in one sense the rules have promoted the contrary, have they not?

MR WALKER: I apprehend your Honour is referring to what is opprobriously called "forum shopping". Whether forum shopping increases litigation may be doubted bearing in mind that to go shopping one has to pay for the excursion but it obviously increases certain dockets, that is the desirable ones.

GAUDRON J: Desirable for the plaintiffs.

MR WALKER: I am sorry, yes. Desirable for the shoppers.

HAYNE J: Yes, and that invites attention to what sometimes is obscured by resort to the expression "forum shopping".

MR WALKER: Yes.

HAYNE J: What it obscures is that advantages are obtained as a result and those advantages are then classified, often sub silentio, as being undeserved or inappropriate advantages and until you identify (a) there is an advantage, (b) what it is and, (c) that it is inappropriate, wrong, undeserved - - -

MR WALKER: May we say this about those words, your Honour. In our submission, they are inappropriate to be decided upon or expressed by a court if what they are describing is the provisions of the law. It is not for the court to say the look - - -

HAYNE J: That has the symmetry of circularity, the answer, Mr Walker.

MR WALKER: No.

HAYNE J: Of course it does, but the undesired outcome is one which is classified as undesired because, if it were litigated elsewhere there would be a different outcome and the place where it would ordinarily be litigated is often buried somewhere in the proposition that is advanced.

MR WALKER: Yes, and your Honour is, of course, familiar with the language in the same area which has been used about what might be supposed by the Bench to be a reasonable expectation of, as it were, a mass of hypothetical people, about the system of law which ought to govern the outcome, in terms of legal consequences, of particular forms of conduct and it is said, and Tolofson is a Canadian example of it being said, that that reasonable expectation is that the system of law which regulated, for example, the voltage that the workman was allowed to use, is also the system of law which should regulate the common law consequence, if that were exceeded and, in our submission, it is in support of our argument which, as we say, has as its conclusion lex loci delicti, it is an argument in favour of that as a matter of common law, that it promotes certainty and thus predicability, and that it does accord with what, in the ordinary case, by which we probably mean in the usual run of cases, would be perceived in a lay or intuitive sense as fair, and the fairness comes from the comprehensive cover of one item of conduct by all the laws which govern that conduct in the place where it was committed.

McHUGH J: But that assumes that one only looks at the substantive law, but from time to time it happens that procedural laws of a particular forum gives you a very considerable advantage. In New South Wales, for example, before the fusion of law and equity, for the common law side you could not get discovery and interrogatories in a common law action. It was more appropriate, if you were in a border town, to run an action in the Supreme Court of Victoria, if you were a plaintiff, where you could get discovery and interrogatories, than to do it in New South Wales.

MR WALKER: May I come back later to the substance procedure question, but I can answer your Honour in this way now.

McHUGH J: Yes.

MR WALKER: First, the rule for which we contend, which is achieved by shearing away as inappropriate to one country and prohibited by section 118 the first limb of Phillips v Eyre, will not necessarily deal with what your Honour has raised. The phenomenon your Honour has raised, when one is talking, for example, about forensic aids, such as discovery or relaxed rules of evidence or the like, will remain as a problem, if it be a problem, while soever courts of this country in different States, simultaneously, by which I mean concurrently, have jurisdiction to entertain a claim about the same Act. There is nothing in our argument which would prohibit that and, in our submission, nor should there be, bearing in mind, see Laurie v Carroll, that jurisdiction depends upon ultimately physical location for a particular time.

There is another control device, which is not part of our argument, but which is, of course, a companion piece in relation to the common law and that, of course, is the law such as it may be, regulating the availability of a stay of proceedings on the basis that it is clearly an inappropriate forum or the like.

That is the area where difficulties of the kind your Honour has raised need to be explicitly addressed and, as is well known, they give rise to problems as to what is a legitimate forensic advantage and what is an illegitimate forensic advantage. For the reasons that your Honour Justice Hayne has raised, in our submission, that involves, at the moment, value judgments of a kind which do not affect the outcome of our argument, and no choice of law rule can, I should say, because our argument does not go to the jurisdiction of courts.

As your Honour Justice Hayne corrected me when I first spoke of justiciability or jurisdiction and what it meant, and what the rule was doing, of course courts will have jurisdiction to entertain a dispute and to find that there is nothing in the available law or the applicable law which gives a right and thus the case is dismissed, for example. That is not touched by choice of law rule. It may be touched by stays for what is loosely called forum non conveniens. It may also be touched, of course, with respect to certain courts, by statutes which limit their jurisdiction subject to 117, for example, which will be an enormous problem for some such statutes.

CALLINAN J: I take it, Mr Walker, you would say that if words such as "and no judgment given anywhere to a contrary effect to 151G or 151H shall be enforceable in New South Wales" would offend section 118 of the Constitution.

MR WALKER: Yes, your Honour, and no doubt other provisions as well but certainly 118.

McHUGH J: Sorry to detain you, but I am not quite sure why you say section 117 might be a problem to that sort of law. After all, it does not - - -

MR WALKER: If a court is set up, your Honour, or a court's jurisdiction is defined so as to render it - the court where workplace injuries are compensated exclusively in New South Wales, and it says it is not to be used by anybody who lives in Melbourne.

McHUGH J: That is different.

MR WALKER: But that is a limitation of jurisdiction which says to the Melbourne person, go to the Melbourne court.

McHUGH J: That is right, but if you are dealing with Acts it is not the same. If you are dealing with the Act, you say, conduct occurring in Victoria.

MR WALKER: Your Honour is putting to me that one might be able to devise a court of limited jurisdiction - - -

McHUGH J: A pretty simple way to put it.

MR WALKER: I think when I first proposed that the docket control is best done by limiting jurisdiction and could be done that way it is, yes, part of our argument that many such statutes would be valid, but depending on how one limits it. If one made ones courts available only to ones own residents, it may obviously be a problem.

McHUGH J: You have 117 problems.

KIRBY J: Why, in principle - I realise the reasons of history - but why, in principle, should there be a different rule for torts than for contracts or for breach of statutory duty? If we are reconsidering this, do we need to reconsider it more conceptually?

MR WALKER: No, for this reason, that - - -

KIRBY J: The Constitution makes no distinction - - -

MR WALKER: Yes, 118 is indifferent as to whether what is spoken of arises from tort or contract or any other category of cause of action.

KIRBY J: Breach of trust.

MR WALKER: Yes, we accept that entirely, your Honour. We also accept that the reasons of policy - I should not say policy - the broad constitutional ground, for example, the one country argument I have put, again, of its nature, cannot and should not recognise a difference between tort and contract at that most fundamental level.

However, because contract involves consensus and because it involves risk allocation, forum clauses have a meaning and role in contract that has no counterpart whatever in tort which, for present purposes, can be treated as definitionally involuntary mishaps.

CALLINAN J: It could have an effect upon the economy of a State, a different rule in relation to tort, as this case could show.

MR WALKER: Yes.

CALLINAN J: A manufacturing State with a potential very high liability in respect of damages for personal injuries - - -

MR WALKER: There is no doubt about that, your Honour. In our submission, one, it would be impossible for the court to enter upon the calculus of economic impact, as it were, but, two, when advocates call in aid values like certainty and predictability, one of the reasons why they are presented as self-evident virtues is because it permits people to organise their business affairs.

CALLINAN J: It might be a basis for an entirely different tort regime in a rural State from that in a heavy manufacturing State.

MR WALKER: In another world altogether, your Honour, but not in a world where law districts are mixtures of urban and rural and where law districts are the unit, the discrete unit, monolithic unit, between which choice of law rules operate.

GLEESON CJ: What is the civil law on this subject?

MR WALKER: Tolofson looks at that, your Honour.

GUMMOW J: Well, they had to because of Quebec, I suppose.

GAUDRON J: But it is generally governed by treaty now, is it not?

MR WALKER: Yes. The proper answer to your Honour the Chief Justice is I do not think it can be described as monolithic, that is it does not all speak with one voice, not least because of what your Honour Justice Gaudron has said. It is dealt with, as it were, more explicitly. I will just have the passage which we have in mind turned up and may I come back to that, your Honour?

GLEESON CJ: Yes, certainly.

MR WALKER: May I just conclude comments in response to Justice McHugh's question this way. The kind of law that your Honour has asked me to suppose in relation to limiting access to a court or tribunal may, of course, run into 117 or 118 notwithstanding its ex facie neutrality on the question, depending upon circumstances in which it applies, in exactly the same way as section 92 may be breached by a law which does not, on the face of it, say so.

May we then proceed to the question of Phillips v Eyre itself for the common law purpose of arguing that the principle to be gathered from it, as a result of the authority and authorities which feed to it, is not of such a kind as should now be regarded as beyond further adaptation, particularly under the prod of the Constitution, of the kind that we seek. As your Honours are aware, it is The "Halley" which is the authority cited as the authority for the first limb of Phillips v Eyre. Its full name, as your Honours know, is The Liverpool, Brazil, and River Plate Steam Navigation Company v Benham, LR II PC 193, the ship the "Halley". It is an appeal to the Privy Council from the High Court of Admiralty.

HAYNE J: Just while that is being got out, Mr Walker, the European position and the like is discussed to some extent in Dr North's book of essays, Private International Law Problems in Common Law Jurisdictions, at pages 178 to 179 where Dr North deals with a number of European proposals for reform conventions and the like, but I have interrupted you.

MR WALKER: I am obliged, your Honour. Can I take your Honours first - - -

GUMMOW J: This is an Admiralty case. Is that significant?

MR WALKER: We say it is, particularly when one sees the authorities which were cited during the course of the relevant argument. Yes, your Honour, it is extremely relevant and, in our submission, it will be one of the factors which justify the argument by us that this is a slender reed to have built the edifice which presently stands in Stevens v Head.

The facts involve what was then the position in relation to compulsory pilotage. A Belgian pilot on an English ship which hit a Dutch ship in Belgian waters. Suit in England. The question was whether the Belgian law which made the owner liable - - -

GUMMOW J: Wait a minute. Who did he sue in England? Why is he head of The "Halley". It is just an in personam claim, is it? There is no in rem claim.

MR WALKER: It is a cause by the owners of one ship against a ship and her owners - page 199. I think I said Dutch ship; it is a Norwegian ship which was hit. It was the Belgian or Dutch laws which applied. The point was so far as what was an apparent conflict question, if any, was that under the Belgian law the fact of the compulsory pilotage would not excuse the owner, whereas in England at the time, as we shall demonstrate from the authorities to which we are about to come, the reverse was the case. The fact of compulsory pilotage broke the nexus of liability against the owner of the ship being piloted which causes the damage.

At page 202 Lord Justice Selwyn states the relevant issues as follows:

It follows, therefore, that the liability of the Appellants, and the right of the Respondents to recover damages from them, as the owners of the Halley, if such liability or right exists in the present case, must be the creature of the Belgian law; and the question is, whether an English Court of Justice is bound to apply and enforce that law in a case, when, according to its own principles -

which is the expression adopted for English law, domestic law -

no wrong has been committed by the Defendants, and no right of action against them exists.

Then on page 203 the reasoning is rendered explicit as to the way in which that question falls out according to the judicial committee. There is a citation from Story which refers to the giving of municipal laws and extraterritorial effect. We quote in particular:

when those laws are prejudicial to the rights of other Nations or to those of their subjects."

We would interpolate that that is a rationale which has nothing whatever to do appropriately with the relations between the law districts constituted by the component parts of this Federation or the Territories of the Commonwealth. Then he proceeds:

And even in the case of a Foreign judgment, which is usually conclusive inter partes, it is observed in the same work, at s 618A, that the Courts of England may disregard such judgment inter partes if it appears on the record to be manifestly contrary to public justice, or to be based on domestic legislation not recognised in England or other Foreign countries, or is founded upon a misapprehension of what is the law of England.

At least the first two of those are directly contrary, we say, to the fact of Australia and the requirement of section 118. This, we stress, is the authority for the first proposition.

At page 204 it follows from those considerations, their conclusion, line 3:

it is, in their Lordships' opinion, alike contrary to principle and to authority to hold, that an English Court of Justice will enforce a Foreign Municipal law, and will give a remedy in the shape of damages in respect of an act which, according to its own principles, imposes no liability on the person from whom the damages are claimed.

Double actionability. In our submission, that is reasoning which explicitly embraces the forum's disdain, by which we mean denigration of, the content, merit and policy of the foreign law. We do not give a cause of action. They do. That offends something which is fundamental to the doing of justice in an English court. That is our paraphrase.

GAUDRON J: Is it implicit in that case, however, that what would have been applied is Belgian law, if it had got past that first stage?

MR WALKER: Yes. It is explicit, your Honour.

GAUDRON J: Yes, I would have thought so.

MR WALKER: It is explicit, yes, and that is why this is an important foundation for the so-called rule.

HAYNE J: But a rule of choice of law or a filter?

MR WALKER: This is the filter part that I have been taking your Honours to.

HAYNE J: Just so. The choice of law would take you to the lex loci, would it not?

GAUDRON J: Yes.

MR WALKER: Which we embrace and urge. That is our argument.

HAYNE J: I understand that and, what at the moment is troubling me, is why you are devoting such attention to a proposition which, on your contention, concerns a filter but leads, ultimately, if you pass through the filter as you would, you say, in this case, leads you to lex loci.

MR WALKER: To lex loci delicti for this reason. The filter is applied by the first limb in Phillips v Eyre which was enunciated in Stevens v Head to be the choice of law rule. As a filter, in light of the reasons for which it was devised, it is antithetical to the fact that the States are not different countries from one another and it is contrary to section 118 because, in our submission, one cannot give full faith and credit to the public acts of a sister State by saying that you will not, according to your choice of law rule, apply the liability which would otherwise have been applied because it is different from that which public policy in your own country has enacted by way of legislation.

McHUGH J: Yes, but your case does not depend on the first limb at all. It is the second limb, is it not?

MR WALKER: Yes, and I come to that later. Yes, your Honour. Our case is the second limb is good law.

McHUGH J: Whether the first limb is upheld or not is of no consequence to you for the purpose of this case, is it?

MR WALKER: The first limb is essential because of the question of extent of application which is disguised, we say, by the substance procedure distinction which is at the heart of the exercise for us. Your Honours, at the risk of still appearing to strain over much of the point, may I draw your Honours' attention to the authorities which were cited by in argument though none are cited in the reasons, which led to that outcome on the first limb. We have handed up a bundle. I am not going to take your Honours to the reasons of those particular cases. We can summarise them quickly.

GUMMOW J: They are all admiralty cases.

MR WALKER: They are. Page 195 contains the note of the Solicitor-General's argument and the citation of The Maria, The Annapolis, The Vernon, The Ida and The Agricola is a citation for the proposition that:

The law by which liability is determined in an action of tort is the lex fori -

in the same sense as was uttered in Koop v Bebb. Of those cases the following could be said. The Maria, 1839, was a foreign vessel but in the River Tyne. It involved the interpretation of a local statute, the Newcastle Pilot Act, and Dr Lushington held that the Newcastle Pilot Act, compulsorily imposing a pilot, prevented the owner being liable. It involved no conflicts question of a kind that is now called a conflicts question.

The Vernon ; that was a case about damage caused by foreign vessel off Dungeness. Again, interpretation of, in that case, the general Pilot Act, with the same result; The Agricola 1843 - it is not clear whether there was a foreign vessel involved at all; it was a collision in the port of Liverpool. Dr Lushington again interpreted the Liverpool Pilot Act, with the same result - no liability because compulsory pilotage. The Ida 1860; that is the one that is foreign, the Danubian waters then governed by Turkey. If there was an English ship, it appears to be the ship which was cut free by one of the party ships, which caused the damage to the other party ship. Dr Lushington decided that in the Admiralty Jurisdiction, notwithstanding the expansion he had personally accomplished of it, the case was not one appropriate to take on. In 1861, The Annapolis, a foreign vessel, back in the Mersey, and the Mersey Docks Consolidation Act, the familiar interpretation question as to what that did to liability. They are not, with respect, case law which supports or supported the view which is apparently now to be taken of the first limb and, in our submission, there is one important footnote to all of that.

Your Honours will recall that the rationale explicitly of the Judicial Committee had to do with what public policy, as manifest by the statutory regime in the forum, had to say about the notion of enforcing a liability in England, imposed by what would otherwise have been the law determining the rights, as they said, where England would impose no such liability. It is a case about compulsory pilotage which, in England at the time, was seen as a way in which the nexus to a liability was broken; the owner should not be liable when the owner had to take on a pilot.

Ironically, in 1913, all of that was reversed by a different expression of public policy in the forum - the Pilotage Act 1913 - which brought, as it were, into line with the Belgium law the English position. The lesson from that is this, that the first limb of Phillips v Eyre, by that means, can be seen as giving to the forum legislature, as the voice of public policy in the forum, a substantive effect in relation to the regulation of the consequences of conduct committed, engaged in, elsewhere, conduct which otherwise, the forums common law would say, ought to be regulated as to its consequences by the law of that place. Why a substantive effect? Because, had the 1913 Act been enacted just before the events in The "Halley", the outcome would have been opposite and, in our submission, where the outcome is opposite, from no liability to liability, that is, without any need to elaborate, a substantive effect and, for those reasons, in our submission, the first limb requires to be seen as the product of the fear that lex loci delicti, without a qualification, would lead to the English courts doing something that English courts should not do. A good and instant demonstration of that from The "Halley" itself is found finally on page 196, in the way the Solicitor-General pulled those strings together at that point in his argument.

An English Court of law will not entertain a cause of action arising in a Foreign country which would not lie here. Suppose that by the law of a Foreign country an insulting gesture, or defamation of an official personage, is considered an assault, both of which are punished by fine or forfeiture, or again, until lately -

this is 1868, of course -

by American law, in the Southern States, for harbouring a Slave; could an English Court administer here such remedy as is given by the Foreign law? It is absurd on the face of the proposition.

Now, in our submission, that is discourse about the relation of two systems of law which is not possible constitutionally or, we would submit, at common law in Australia.

McHUGH J: But it does mean, if you adopt your argument, that you have to abandon the notion that it is the lex fori that enforces an obligation of its own creation, does it?

MR WALKER: No, we do not abandon it, but with respect to your Honour's question, it is the lex fori and its choice of law rule which provides, by the importation that has been talked about, the rules, the standards by which the rights and obligations are adjudicated and we said that emphatically at the outset and we would repeat it emphatically. There can be no qualification to that principle. We do not abandon that by abandoning the first limb.

McHUGH J: But it is not an obligation of its own creation, is it?

MR WALKER: It is an obligation of its own creation. It is the common law which is the forum's law, or part of the forum's law, one of the sources of the forum's law, I should say.

GLEESON CJ: Can I take you back to an example close to one that I think you gave earlier in the argument. There is legislation in New South Wales that sets up a procedure for making and determining claims for compensation by victims of crime. Claims of that kind are made to a particular tribunal and they are subject to a certain limitation cap, and perhaps the New South Wales Government from time to time regulates the amount of the potential liability by reference to the money that is thought to be available. Now, suppose there is another State in Australia that has no such procedure. Suppose both the victim and the perpetrator of the crime are resident in another State.

MR WALKER: Yes.

GLEESON CJ: Can an action for compensation be brought in the other State?

MR WALKER: Probably not, your Honour, because the example you have given me will probably be construed as a right which depends upon, that is exists because of, an administrative decision which stands in contrast from a judicial adjudication on the basis of the facts as found to pre-existing law.

GLEESON CJ: The example that I have given may be a bad example because it may be that what is involved is not litigation inter partes but a claim against a government fund.

MR WALKER: Yes, your Honour. That is one - I am sorry.

GLEESON CJ: But let it be supposed that a State in Australia decided to do what I understand is done in France, and that is to say, to enable victims of crime to participate in criminal proceedings and to have made in their favour at the end of the criminal proceedings an order against the convicted person for compensation.

HAYNE J: As happens in Victoria.

GLEESON CJ: Well, there you are. Well, now - - -

MR WALKER: My lips are sealed as to public policy, your Honour.

GLEESON CJ: Take that Victorian example. Could a person bring a claim in New South Wales to vindicate a civil right of that character on the assumption that the potentially liable person was resident in New South Wales and that was a convenient place to sue?

MR WALKER: No, not on that sui generis fully integrated forensic method by which it is part of, that is, you only get that which results from the process described of participation in a peculiar way in a criminal trial. But, the example - - -

GUMMOW J: It might create a debt though.

MR WALKER: I am sorry, your Honour?

GUMMOW J: It might create debt of record.

MR WALKER: But, your Honour, they are talking about, I think, the person who has participated - - -

GUMMOW J: No, the order that is made at the end of the trial may produce a debt of record.

MR WALKER: Yes, I am sorry, I have misunderstood the example. I thought your Honour the Chief Justice was putting to me someone who decided not to participate under the out of State - - -

GLEESON CJ: My question was fairly prompted by the Solicitor-General's argument in The "Halley" that you took us to and I was trying to think of an example of a cause of action created in one particular State quite unknown to another State such as an action for compensation by any victim of crime against the wrongdoer, regardless of whether a tort exists.

MR WALKER: Yes. The last phrase obviously is important for all examples about crime because it is difficult to think of crimes that will not fairly readily yield a civil liability in tort of some kind. That is not true. It is not difficult to think of, but many of them will. I had apprehended the example your Honour had asked me involved a person who, injured by a crime, entitled under, shall we say, a Victorian statute to obtain recompense by sui generis statutory provision attached to the criminal process itself, decides not to avail himself or herself of that because that is in Melbourne and the victim lives in Sydney, and instead goes to the Supreme Court in Sydney and asks for choice of law rules to be applied so as to enforce the liability.

My first answer to your Honour's question is that, no, a statute of that kind would appear along the lines of the answer I gave to Justice McHugh earlier, to be the kind of statute which both provides the means of obtaining and of ascertaining the right which does not exist unless that means has been put into train and completed. In that sense it bears complete analogy with the right, the content and existence of which comes about because an official has exercised a discretion in fact.

The second part of my answer is that if, contrary to what I had understood the basis of the question, there had been participation in Victoria or, if not participation, if the Victorian procedure permitted it to be ex parte, then there could well have been created either a debt in the sense Justice Gummow has proposed or some other form of monetary obligation enforceable at common law which could be sued on in New South Wales.

Finally, though this is not an answer, I think, to your Honour the Chief Justice's question directly, there is, of course, the observation that that may not be a practical problem bearing in mind the capacity of the person subject to long arm jurisdiction, subject to Laurie v Carroll, suing the criminal if the criminal is worth it. Now, that is not an answer because it is also impractical in the field of criminal compensation in practically every case.

There are, of course, other matters, obviously tort claims against persons who may have negligently permitted the injury to occur, but my primary answer to your Honour the Chief Justice is no, if and to the extent that the statute provides a means which is essential to be completed in order to know the existence of and the extent of the liability.

McHUGH J: Well, what is the basis of the distinction? Supposing we had a statute which said a person who witnesses a crime and suffers distress or anxiety may sue the person who committed the crime, the - - -

MR WALKER: That is actionable elsewhere, yes, your Honour. That will have, as it were, created a statutory tort. It provides the rules which regulates the relations of those persons. It will be the lex loci delicti and subject to forum non conveniens and the like the out-of-State court will apply it as the tort law chosen by the forums choice of law tort rule.

McHUGH J: On your argument it would not, but assume - - -

MR WALKER: Yes, it would not on Phillips v Eyre. It would not on Phillips v Eyre.

McHUGH J: Exactly.

MR WALKER: Now, why should there be a difference in outcome? Because Phillips v Eyre prevents that on the ground expounded in The "Halley", that it is not right that an English court deal with people in a way that Englishmen are not dealt with at home. It is not right that our public policy which says there should be no such compensation for distraught witnesses of crime is overcome in the case of somebody who comes to our court to complain about being distraught elsewhere. In our submission, that is directly contrary to 118.

McHUGH J: But supposing Parliament of the State of the fori has been asked again and again to pass such comparable legislation in the State. It said, "No. We're not going to have such legislation in our State." Is there nothing on your argument that the courts can do to give effect to what seems to be an indication of parliamentary intention?

MR WALKER: Not at common law, that is the common law, because it is subject to the Constitution, cannot contain a provision which says one State's courts can disapprove of the public policy of another State's laws.

GAUDRON J: And you perhaps can go a little further. What if the witness is a resident of one State, the criminal is a resident of another, the proceedings are instituted in the State that does not have that law?

MR WALKER: Then one has created an example where the certainty, predictability and transparency of lex loci delicti is attractive.

GUMMOW J: One has created federal jurisdiction, actually.

GAUDRON J: Yes, it has federal jurisdiction. The law to be applied in that case is actually federal law.

MR WALKER: Yes.

GAUDRON J: Where does it come from?

MR WALKER: Federal law - - -

GAUDRON J: Would you, in that situation - subject to whether section 117 binds the Commonwealth, which is an open question, but might you run up against 117?

MR WALKER: One might. It is not obvious why that would be 117 necessarily.

GAUDRON J: Let us say, because your criminal is that sort of person, you can locate him in Melbourne and serve him - and we will make him a "him" because it is easier - but you do not have time to go through the Service and Execution of Process Act 1930 .

MR WALKER: Your Honour is positing a civil case against a criminal?

GAUDRON J: For this statutory tort for causing nervous stress for witnessing a murder, for example. If Victoria refuses a remedy, we will say, to use a fairly neutral term, to a New South Wales resident who has sued in Victoria attracting the exercise of federal jurisdiction and that remedy would be available in New South Wales in the exercise of federal jurisdiction or in the exercise of non-federal jurisdiction - it does not matter - have we run into 117?

MR WALKER: The outcome may differ according to the residence of the applicant, so, yes, your Honour. Could I briefly then mention, so as to complete a list that I have embarked upon incompletely several times, other provisions of the Constitution which inform the argument that we have made about the Constitution itself and section 118 in particular. I have several times mentioned section 106. Together with sections 107 and 108, in our submission, the Constitution contains explicitly - or, if not explicitly, clearly implicitly - the expectation of territorial legislative competence which by and large characterises the way in which the Parliaments of the colonies, the new States, are to operate.

Under section 111 the same notion is continued, the words, after all, including the notion of surrendering "part of the State" which is, of course, a geographical expression and it becoming "subject to the exclusive jurisdiction", there used, "of the Commonwealth". Again, in our submission, it is pregnant with the territorial aspect of legislative competence. We have already noted that there is, importantly, no counterpart for 109 for inconsistencies between State and State laws and, in our submission, that is partly at least to be explained by the expectations, not always fully rewarded, of confinement, more or less, to the Territory of the legislating authority of the effect of the laws.

Finally, of course, there are sections 117 and 118 which we call in aid. They also, in our submission, not least by the expressions "throughout the Commonwealth", look to the fact that there are "laws, the public Acts and records, and the judicial proceedings" which are occurring elsewhere from the place where "Full faith and credit" is commanded to be given. In our submission, for all those reasons, the Constitution does import the basic territoriality principle which, in our submission, then justifies the common laws selecting as the appropriate choice of law rule for tort lex loci delicti because, where the act was committed is, firstly, the place whose laws governed the parties as they engaged in the conduct, without any question.

In our submission, if only for the sake of symmetry, but certainly for the sake of certainty and predictability and transparency, the consequences of the conduct retrospectively, as well as the commands and prohibitions which might be enforced by criminal or regulatory law, as well as by civil law, prospectively, ought be governed by the same system of law.

GAUDRON J: Now, you earlier said to me, Mr Walker, that The "Halley" proceeded on the assumption, at least, express or implied, that it would be Norwegian law, the lex loci delicti that applied if one passed the threshold test.

MR WALKER: Belgian law, your Honour. I think it is explicit.

GAUDRON J: In a sense, it does not make sense having that threshold test unless it is the lex loci delicti that is going to apply.

MR WALKER: No, quite. It is, as Justice Hayne put, a filter or it is a sanity check. It says, "We will apply that law so long as it is not offensive to what we regard as proper to be applied."

GAUDRON J: But somewhere along the path in the common law world that notion seems to have got lost, does it not, otherwise why Chaplin v Boys?

MR WALKER: The common law rule includes Canada which in Tolofson is - - -

GAUDRON J: Prior to Tolofson, really.

MR WALKER: Yes. Yes, is the answer to your Honour's question.

GAUDRON J: Where did it get lost? Is that clear?

MR WALKER: It may have got lost at the point that in Phillips v Eyre The Halley is simply cited without explanation of the reasons why it achieved what it did.

HAYNE J: Or it may have got lost because the filter was being described as a choice of law rule sometimes when, in truth, the choice of law rule being applied was the law of the forum.

MR WALKER: Yes, your Honour.

HAYNE J: Judges say, "We know what the law of our forum is. We'll apply it."

MR WALKER: Yes, your Honour. Hence the shift that I commenced with between Koop v Bebb orthodox formulation it is lex fori through to McKain v Miller, Stevens v Head, it is lex loci delicti but with the two limbs. Now they come out to the same thing depending upon the way one views it because one way of, no doubt, vulgarising the rule is to say that the law of the place where the conduct occurred will apply unless it is not the same as, more or less, our law. But depending on which way you put it, you could equally say our law will apply because the rights and obligations ought to be governed by the law governing the rights and wrongs of what they did where they did it but not if that is different from what would happen for Englishmen in England.

HAYNE J: I think I am right in saying that even up to and including Chaplin v Boys, if you leave out the contract cases and look only at the tort cases in England, there are not too many where a law other than the law of England ultimately regulated the rights and obligations of the parties.

MR WALKER: Yes, your Honour. I am reminded, until one comes to the Red Sea Case in the Privy Council. In answer to your Honour Justice Gaudron, it is explicit, at page 202, that Belgian law must be the source.

In answer to your Honour the Chief Justice, in Tolofson in the Supreme Court Reports it is at page 1051, the passage to which I made reference, it commences, in 120 DLR (4th) it commences at page 306. It may be that this reference might be useful in answer to your Honour Justice Hayne: The M. Moxham (1876) 1 Probate 107 in the Court of Appeal. Rather than improvise, your Honour, it does have passages which do cast some light on this question of a filter, but the facts in that case are facts which are the converse of The Halley and, if I may, I can briefly deal with that after the adjournment.

Your Honours, may I then go to one other area where, in our submission, it is appropriate for this Court now to say that by reason of our constitutional arrangements and section 118 in particular, but we need as a clincher rather than as a necessary part of our argument, to declare that the common law as to the choice of law for tort is the lex loci delicti.

GAUDRON J: Is that taking any great step away from the law as it is? I mean, certainly that was the outcome of Breavington, was it not, and McKain v Miller seemed to deal with the filter rather than take any departure from Breavington in regard to the applicable law, is that correct?

MR WALKER: Yes, your Honour. In McKain v Miller (1991) 174 CLR at 36 to 37, there is a passage which we wish to address. Commencing halfway down, the majority says:

To describe the States, as Windeyer J once described them, as "separate countries in private international law" may sound anachronistic. Yet it is of the nature of the federation -

et cetera. The first thing to be observed is that when Mr Justice Windeyer, in the passage in Pederson v Young, said that, he was calling in aid a passage in Laurie v Carroll (1957-1958) 98 CLR at 331. In that passage, in the reasons of Chief Justice Dixon and Justices Williams and Webb, reads as follows:

It must of course be borne in mind that in questions of jurisdiction and conflict of laws each Australian State is to be treated (subject to the Commonwealth Constitution and legislation under it such as the Service and Execution of Process Act) as a distinct and separate country or "law area" and accordingly -

et cetera, et cetera. The parentheses do not appear, and thus the emphasis is lost, of the nature of the common law in this country as "(subject to the Commonwealth Constitution)" by Mr Justice Windeyer's quotation and by its replication in McKain v Miller. It therefore does not follow, in our submission, that there is a step in the argument which can be described as the identification of the hallmark of a federation as distinct from a union. In the fact, or perhaps the rhetorical - - -

GUMMOW J: Federations come in all shapes and sizes; our federation is different from the United States, though similar in some respects, but different because there are not separate State sovereignties, separate State common laws, and there is an ultimate Court of Appeal.

MR WALKER: Yes, your Honour. We submit that the "separate countries" formulation is little more than a rhetorical trope, with great respect. We are not separate countries. It is one country and that is the fact. The analogy with, that is the application of the English precedent referred to by Chief Justice Dixon and Justices Williams and Webb in Laurie v Carroll, is an adaptation as required by the Constitution. Then in the same passage, page 36 in McKain v Miller, following that reference to "the hallmark of a federation", the reasoning continues:

Far from eliminating the differential operation of State laws, s 118 commands that all the laws of all the States be given full faith and credit -

and, with respect, that is a workable paraphrase until the words which follow are read in -

the laws of the forum are to be recognized as fully as the laws of the place where the set of facts occurred.

And, with great respect, the forum does not obey section 118 when it obeys or observes the laws of the forum. Section 118, full faith and credit, is not a command directed to the New South Wales Supreme Court to obey the New South Wales Supreme Court Act. It is not full faith and credit for a citizen to be bound by or to obey a law which binds that citizen as a matter of the sovereign legislature which made the law.

GUMMOW J: But going back up that page in that paragraph you were directing us to, you would accept the third sentence, would you?

MR WALKER: The laws of a State, your Honour?

GUMMOW J: Yes.

MR WALKER: Yes.

GUMMOW J: In other words, you concede that there can be a displacement of this common law rule but that the displacement may itself have a constitutional problem?

MR WALKER: Yes. We would choose to say that we assert that by reason of the side-by-side operation with the Constitution supreme of the two forms of legislation, the common law, which can govern choice of law provisions and it may be - and this is not a case in which it is possible to be definitive - and probably is the case, that there are codifications including amendment of common law choice of law rules which can be carried out by legislation without in the slightest degree offending section 118.

It would follow from that that unless contrary to the likelihoods there was only one form of codification amendment that would survive constitutional scrutiny, that differences would be creatable, which differences could affect the choice of law rules as to their content so as to cause local differences. By causing local differences in choice of law rules in due course, in certain cases there will be produced disparate legal consequences according to law and under the Constitution from the same set of facts depending on the forum where it is litigated.

McHUGH J: Do you not need to deal with the passage quoted from Justice Dawson in Breavington, page 37? You have to answer that.

MR WALKER: No, it is not in contradiction of our argument. We do not submit that 118 is a choice of law rule or dictates a uniquely correct or constitutional form of choice of law rule so it does not stand in the way of our argument at all. Section 118 proscribes effectively rather than prescribes.

GLEESON CJ: Is that a convenient time?

MR WALKER: It is, your Honour.

GLEESON CJ: Then we will adjourn until 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ: Yes, Mr Walker.

MR WALKER: Your Honours, earlier in my argument Justice Gaudron asked if the choice of law rule were as we submit it ought be, what is it that the court in this case should have applied from New South Wales and we answered, with a qualification, everything. This brings us to the issue which is ordinarily described in terms of the supposed distinction between laws or matters of substance and laws or matters of procedure. In our submission, it is appropriate to start with the way in which in a different but fundamentally similar area, namely choice of law and the application of a chosen law in contract where the proper law of the contract is not lex fori, has been worked out by this Court.

Also before the break and at the beginning of my argument I gave in potted form the facts of a case which were in its essentials the facts of Merwin Pastoral v Moolpa Pastoral 48 CLR. It is, in our submission, of considerable significance in relation to that case, albeit it is contract, that the purpose of the Moratorium Act, quite apart from what nullification effect it had, was to prevent access to, by denying a remedy for, any enforcement of the contractual right to the price which had been granted by the contract and been given effect by the common law.

There is no discussion, nor was there any necessary, by the High Court in relation to the Victorian court's duty once it was established that the law to be chosen was that of New South Wales, no discussion about whether the common law of the contract of New South Wales was imported completely, but that the statute law which fastened upon particular contracts or fastened upon particular forms of obligation in contracts was not imported, no discussion at all and for reasons which were firmly and explicitly based on section 118.

Section 118 does not speak of bits and pieces or filaments of a thread in relation to the law of the State to which full faith and credit must be given and it speaks of it indivisibly, in our submission, as to that which is when one is purporting to apply it what one must apply. If your own choice of law rule or your own private international law approach as to how you apply chosen law compels you to apply some law which is not that of New South Wales, that is all very well, but if you are going to apply the law of New South Wales because it is the law of New South Wales, and that was the law in Merwin v Moolpa 48 CLR 577 you have to apply it all, everything, as I said to Justice Gaudron.

Justices Rich and Dixon said that even so that follows the conclusion that contrary to Mr Justice Macfarlan in the Victoria Supreme Court the proper law is New South Wales:

It was suggested that, even so, sec.25(6) and (7) of the Moratorium Act-31 should not be given effect to because the provision contravened notions of morality or the fundamental policy of the law, or, in the words of Macfarlan J., because "its application would at the stage and in the circumstances in which it was invoked work manifest injustice to or, in effect, a fraud on one of the parties."

That was a Victorian judicial stricture uttered upon the New South Wales parliamentary adjustments of rights in the time of economic trade and circumstances. Justices Rich and Dixon deal, both comprehensively and peremptorily, with the argument:

This suggestion is not supported by any authority and goes much further than any decision of the Courts has gone hitherto in refusing recognition of the law of another country.

An interesting phrase which obviously means once your choice of law rule says the law to be applied is that of New South Wales, you are then involved in what might be called recognition - identification and recognition of the law of New South Wales. The law of New South Wales is an indivisible whole relevantly. You may not pick and choose so as to leave the common law unaffected by the way Parliament of New South Wales has affected the common law and then they proceed to administer what, in our submission, is the coup de grace, a clincher rather than essential to their reasoning, the same role it plays in our argument. They said:

Further, it appears to be contrary to sec.118 of the Constitution -

Nowhere in those reasons was it thought that part of the judicial technique involved was to ask a question, a priori, is the Moratorium Act 1987 procedural or substantive, nothing of that kind.

McHUGH J: They are dealing with a statutory defence but - - -

MR WALKER: Yes, and I will come to why in our case there are direct applications of that approach to be followed and why, when it is the common law, the same result will follow.

McHUGH J: But if I understand your written submissions correctly, you argue for the law of the place of the wrong to be the applicable law, without qualification.

MR WALKER: Yes, your Honour. There is a qualification, not of the law, but of the obligation to apply it. There is no qualification of the description "the law of the place". There is a qualification, which I have expressed several times, to the obligation to apply it, to which I will come.

McHUGH J: You invoke the travel of Australians as a reason for that, but is that not, in some sense, an argument against you? Why should the children travelling with one of their parents in a motor vehicle from Victoria to Queensland, who are injured just short of the Queensland border, be forced under the law of New South Wales? It is accidental.

MR WALKER: Your Honour, that is the area where what is called the, or a, or some flexible exception or exceptions may arise, which does not require it to be worked out in this case and, more to the point, this case does not present facts which might permit it to be recognised as anything other than a possibility depending upon arbitrariness, if that be the right word, of examples such as your Honour has raised.

HAYNE J: Is that right? You may be able to reach an outcome in this case without applying a flexible exception, I understand that. How can you formulate the proper principle without knowing whether the principle you are to apply is absolute or varied with the circumstances?

MR WALKER: I am at a loss to tell your Honour that - I accept, with respect, that in order to discern true principle, something that is worthy of the name "principle", some of those matters have to be addressed.

HAYNE J: In particular, if you are going to apply a lex loci, you have to address the question why, why is that the preferred choice of law? Certainty of application is commonly given as a reason, that may be sufficient, but certainty of application would follow were you to choose the law of common residence of the plaintiff or whatever.

MR WALKER: Yes, your Honour. To take them in reverse order, the answer to your last question is what we have put earlier about, what we call the territoriality principle, that because law making, and, for that matter, the administration of justice by State and Territory courts, is more or less tied to geographical, physical, territorial limits, it is appropriate that the regime, comprised of the three or four strands of sources of law that we referred to, the regime which beyond argument governed the way the motorist had to give way to the right or the way the employer had to provide a safe ladder, is also the regime which provides, after that prospective regulation has failed, for its retrospective consequences.

GLEESON CJ: Are you trying to get rid of the distinction between substance and procedure?

MR WALKER: We are seeking to identify that it is a distinction about which a question is asked at the wrong time in the process, there is a distinction between substance and procedure, so that we are not trying to get rid of it altogether.

GLEESON CJ: Suppose a law, of the place where the wrong was committed, said, as some laws now do say, "proceedings may not be taken in a court to enforce a right of action unless and until there has been an attempt at mediation", would that be part of the law that was to be applied in the jurisdiction of another State?

MR WALKER: Probably not, depending upon the law of the other State to which I will come directly now. Before doing so, can I simply complete what we wanted to say from Merwin because it does lead to an answer to those questions your Honours have asked me. Mr Justice Evatt on pages 587 and 588, does two things which ought to be noted. The first is that he refers on page 587 to a somewhat different view of the English case law, namely his Honour held that it was:

true that, very occasionally, upon grounds of public policy, English Courts have refused to accord recognition -

et cetera, et cetera, and held, as did Justices Rich and Dixon, that that could not be done by the Victorian court. But over the page I should draw to your Honours' attention, at 588, there is a definite suggestion in the sentence which concludes with the citation from Bradford Electric Light Co v Clapper that a different approach was taken by his Honour to the usefulness of US, particularly vested rights, jurisprudence in this area, to which we will not otherwise be going.

For present purposes what matters is that the passage in particular at 577 received what we submit was clear acceptance in Breavington v Godleman 169 CLR at 81, 96 to 96, 116, 134 and 150, and was referred to by your Honours Justices McHugh and Gummow in State Authorities Superannuation Board 189 CLR at 285 to 286.

KIRBY J: Mr Walker, at the beginning of the argument this morning, Justice Gummow took you to the Judiciary Act and federal law and you have mentioned several times section 118, but my difficulty - and I am sure you are going to deal with it at some time - is how the words "full faith and credit" in section 118 came to have an effect beyond what is suggested by the heading to the section. It talks merely of recognition of laws and at least it - - -

MR WALKER: Your Honour is asking about the Judiciary Act or the Constitution?

KIRBY J: No, no, in the Constitution. I mean, I may be wrong, but I would have thought one starts with the Constitution.

MR WALKER: Yes.

KIRBY J: Then one goes to federal law, then one goes to common law, at least in Australia that is the way one should do it. Now, how did "full faith and credit", being a phrase adopted from the United States Constitution, come to mean more than that you give recognition to them, that is to say, you take them on their face value and it is a sort of evidentiary matter.

MR WALKER: As it were, recognising the product of each other's government's printer.

KIRBY J: Yes, because that at least is one construction that one could give to section 118. That really takes you back to the United States jurisprudence that developed around full faith and credit, and I am really not understanding anything you say about section 118 because I just do not have clear enough in my mind what the Americans have said about it and what we say about it.

MR WALKER: What the Americans say about section 118 is not the law that we may follow, for the reasons which I think are set out in particular in the reasons of Chief Justice Mason in Breavington v Godleman. We adopt that approach to the use of the American law in this area. Section 51(xxv) as well as, for that matter, 51(xxiv), which is a related subject matter, of the Constitution are critical to answering your Honour Justice Kirby's question. It is obviously significant that 51(xxv) and section 118 both appear. Section 118 is a command. Section 51(xxv) is facultative as to legislative power. There have been laws enacted notoriously but - - -

McHUGH J: State and territorial laws - - -

MR WALKER: Yes, section 18 in particular we have in mind. They have been enacted in terms which differ subtly from the terms, for example, of section 118. None of that obviously can have any effect on the meaning of section 118 which the High Court construed in Merwyn v Moolpa in the passages to which I have just taken your Honours as having an effect preventing the Victorian court choosing to express a public policy denigration of New South Wales law for the purpose of, as it were, filleting that New South Wales law before it was applied under the Victoria common law choice of law rules for a contract whose proper law was not Victorian. That is an effect.

I do not think that answers your Honour's question in relation to history but the two answers I think I can put are there is not an evolution from America to Australia for the reasons adumbrated by Chief Justice Mason. Second, section 118 has been given an effect that goes beyond the recognition of official records, as it were, by, for example, Merwyn v Moolpa, which is a very clear, we would call it, substantive effect, at the risk of using a provocative word for this last part of my argument.

KIRBY J: Well, it may be foreclosed by authority but the words "public acts", "records" and "judicial proceedings" all seem to suggest an adjectival role.

MR WALKER: "Faith and credit", your Honour, are no doubt old-fashioned words but they are words that do not import, as it were, the reaction of a librarian to the authenticity of a document. When one is talking about laws, they are words that are redolent of obedience, application, in the context where that is possible. Obedience to somebody else's law is not something that 118 is in terms talking of. My last point is to say that the words "faith and credit" are words that go beyond simply recognition of documents or the authenticity of records.

In any event, and I do, of course, submit that this Court is, and should regard itself as, I suppose is a better way of putting it, precluded from now consigning section 118 from the category of nation-building provisions simply to a facilitating provision for documentary records.

KIRBY J: Well, that would be an odd place to see it in the Constitution given that the next section is protecting the States from invasion and violence.

MR WALKER: And the one in section 117 is equally - - -

KIRBY J: Section 117 is non-discrimination.

MR WALKER: - - - aimed at the content of laws as they affect people outside the borders of the legislating law district.

KIRBY J: It is a question of where one starts in the case but I think, given what was said in Lange, that the common law must mould itself to the Constitution. The starting point, it would seem to me, should be to get a very clear idea of what section 118 commands and then, when you have got that, to have a look at what the common law in Australia says about the way in which the laws of different States and Territories are to be moulded to that constitutional imperative.

MR WALKER: Yes. The first thing is one does not have to be comprehensive, that is absolute and unqualified, in this case as to what section 118 commands or prohibits. The question is, does it command or prohibit the importation of the judicial public policy judgment of a neighbour or sister State's laws as part of the common law, and I stress the common law. We submit the answer to that question is yes.

KIRBY J: Yes, but the starting point for your proposition is a clear understanding of what section 118 requires.

MR WALKER: Yes, your Honour.

KIRBY J: This is really constitutionalising the principles of recognition of the laws of different parts of the Commonwealth.

MR WALKER: Section 118 is the constitutional provision that commands something called "Full faith and credit". To that extent, it is constitutionalised, but our argument does not constitutionalise, for example, a particular content for any choice of law rule.

CALLINAN J: Your argument would be stronger if the words were "full effect" rather than "Full faith and credit".

MR WALKER: I am not quite sure that it would be, your Honour, because the literal wording of section 118 would then be even more in need of reading down to the real world. "Full faith and credit shall be given", et cetera, like - - -

CALLINAN J: Why?

MR WALKER: Like trade and intercourse being absolutely free, are expressions in the Constitution which cannot be given at least one version of their literal meaning. Now, partly, that is because of what I am about to put which is partly in answer to the Chief Justice. Substance and procedure is not a distinction that matters or could matter as a matter of law and judicial techniqe at the stage where the forum court asks the law of the forum, is there a statute that compels me, whether or not at the request of the defendant or the plaintiff, to do something in relation to this litigation about an out of State tort. That is, it is not to the point to characterise a law which binds the forum court because it is a forum law to ask whether it is substance or procedure. It binds because it is a law and that is an end of it.

There may be an inquiry about certain laws as to whether they run foul of other requirements such as consistency with the Commonwealth legislation, section 109, or answering a constitutional requirement such as section 118 or section 117. But at that point, which is the point where one will normally find matters which regulate the management of the process by which adjudication is carried out in a court, it is clear that obedience to the Supreme Court Act is required by the Supreme Court, referred to in that Act, not by reason of full faith and credit, not because it is procedure rather than substance, but because it is a law of the Parliament of the State of which the court is the Supreme Court and that is an end of the reasoning and the constitutional reality about why that law binds.

HAYNE J: But the relevant hypothesis is that there is a difference. The hypothesis for the whole debate must be that there is some difference in the two laws affecting the existence, the enforceability or the measure of the rights and duties.

MR WALKER: Yes, your Honour, that is why there are arguments, yes.

HAYNE J: Absent that, no problem.

MR WALKER: There is no problem. It is in that sense that the old word "conflict" still carries sensible meaning, yes, we accept that. Now the first proposition, of course, is that because the choice of law rule is a law of the forum, because it is common law at present, it will naturally and without any difficulty yield to statute law of the forum and, in particular, the statute law which tells the Supreme Court or the District Court or the Workers' Compensation Commission what are the limits of its jurisdiction, for example. Limits of jurisdiction can have and would have, potentially, a devastating effect upon the enforceability or the availability of a right claimed by a plaintiff arising out of an out-of-state tort, were there to be a restriction imposed by local statute. None of that, we stress, requires, or renders sensible, a distinction between substance and procedure. Indeed, in one sense, it would be an impertinence for the court to embark upon characterising what Parliament has commanded it to do, in order to work out which part of it to apply. It must apply all of it.

That will be a matter of statutory interpretation and is one of the two anterior exercises of statutory interpretation to which I referred this morning: first, construe ones own statutes which affect what has to be done in this adjudicative exercise sought by the plaintiff; the second anterior legislative interpretative exercise, which must be carried out and which, in our submission, does give rise to an inquiry along the lines of substance and procedure, or may give rise to such an inquiry, relates to the statutes - and it will be only the statutes normally or delegated legislation - of the other State, the locus delicti, statutes of the other State, which, by the common law of the forum, are to be applied as the law which will dictate the outcome of the forum's adjudication, in relation to the out-of-state tort.

First, it is only those statutory rules, or mandates or commands or prohibitions or spelling out of consequences, it is only those out-of-state rules which affect the outcome of the adjudication of those rights, which will be applied. So that if a statute contains rules about commencement of an action by a particular form or following a particular procedure, in the out-of-state court, that is, the court which is local to the tort, then they have nothing to do with the imported rules for adjudicating the dispute, which are brought by the forums common law choice of law rule.

That comes in part, at least, from the reasoning of Chief Justice Mason in McKain v Miller which, we would respectfully urge as containing as to most of what is said on that page a justification for what we have just put. At page 30, I am bound to submit that there may, and I stress may, be an error, with great respect, in the first and second sentences. His Honour says:

In its terms, s. 48(1) -

that is of the Limitation of Actions Act in New South Wales -

states that "where an Act...prescribes or limits the time for...instituting an action..., a court may extend the time so prescribed or limited" (emphasis added). No territorial restriction is placed on the "court" to which s. 48 refers.

That may be difficult to square with the provisions of paragraph 12(1)(b) of the Interpretation Act which says that a thing or matter in a statute, that it is in or of New South Wales. However, his Honour then goes on with the passage from which we seek to obtain support, the very next sentence:

This is not to say that the Limitation of Actions Act has an extended or extraterritorial operation. Nor would I wish to be taken as implying that the jurisdiction.....to extend.....depends upon the absence of such an express territorial restriction.

So that his Honour places it on a wider basis -

Once it is accepted that s. 36(1) and s. 82(2) may be pleaded as substantive defences and have operation by virtue of the choice of law rule applicable in New South Wales, then it is appropriate that all South Australian provisions -

I am sorry, it was the South Australian Limitation of Actions Act, not the New South Wales one, I am talking about -

then it is appropriate that all South Australian provisions related to those defences should be applied by the forum court. Those provisions are picked up and applied as part of the relevant New South Wales law. There is no legitimate basis -

et cetera. Your Honours are familiar with the passage. Now, one then sees what follows in relation to section 118 on that page and, again, your Honours are familiar with that.

Our submission therefore is that there will be some matters in the picked up law which cannot be applied for one or both of two reasons: first, they are inconsistent and being applied only as a matter of the forum's common law must yield with a forum statute. That is only a familiar, if specialised, example of the common law being adapted, truncated or adjusted by the effect of inconsistent legislation.

Second, in its terms, and notwithstanding what I have earlier said about the "as if" approach or the mutatis mutandis approach, in its terms, the picked up law, which we stress is applied only as a matter of common law in the forum, may refer to things which are intractably local to the enacting Territory, such as a reference to a particular court at a particular place or to a particular personage whose involvement is necessary.

An example your Honour the Chief Justice gave, if I may hypothesise, were the requirement one for a mediation under the aegis of a person nominated by the Chief Justice of New South Wales, then, in our submission, there is no call and no possibility of mutatis mutandis making that a person nominated by the Chief Justice of Victoria because of the violence that would do to the relations between two otherwise sovereign States in relation to what their Chief Justices must or may do.

For those reasons, that part of a picked-up New South Wales statute in Victoria which made a requirement that before action is brought there be a mediation by such a person could not be and would not be applied by the common law of Victoria. Whether that would destroy totally the capacity of a law to be imported in the sense that it would import something so defective that it provided no rights substantively will depend upon an interpretation of the picked-up law. It will involve issues, if one likes, of severance, it will involve issues of that which is primary and that which is subordinate, that which is operative, that which is adjectival and necessarily the language of substantive and procedural will be part of the useful argument in detecting such an effect.

McHUGH J: Let me ask you a question. Before the enactment of the Trade Practices Act and the State Fair Tradings Act, the Industrial Commission of New South Wales was often resorted to to set aside contracts between employers and employee. Supposing an employee sued an employer. The employer as part of the defence, let us say in Victoria - they are New South Wales people but their action is in Victoria - wants to plead a contractual term in the contract of employment limiting liability. The worker would say, "If this was in New South Wales, I would have had a right to go to the Industrial Commission to have the contract set aside as harsh and unjust", et cetera.

MR WALKER: It may be that that is all picked up, your Honour.

McHUGH J: So that in Victoria you could - - -

MR WALKER: It turns again on how it is expressed.

KIRBY J: But what if it is contrary to the public policy of Victoria? Victoria does not believe in any of this protective legislation. It has completely free markets and that is a very important matter of public policy and they have rejected this, they have repealed their old statutes. Why should a court in Victoria be enforcing this interstate law?

MR WALKER: Because sister States should not comport themselves in the one country on the basis that a different choice by different elected representatives for a different part of Australia in different conditions is contrary to the public policy.

KIRBY J: So this does get back to the Constitution.

MR WALKER: Yes. We have made that clear, I hope.

KIRBY J: And the Constitution draws no distinction between substantive and procedural laws or statute and common law and there is just no basis and, indeed, it is inimical to the - - -

MR WALKER: Well, there is a basis, with respect - - -

KIRBY J: It is common law picked up from England, just applied here unthinkingly and not measured against the constitutional text. This is why it seems to me the beginning point of this argument has to be what section 118 commands.

MR WALKER: With great respect, we accept that. If I can conclude then by completing my defence of the answer "everything" to Justice Gaudron. There is nothing in this case which is a statutory command to the ACT court inconsistent with the result of the true common law rule which has imported the law of New South Wales as it regulates the consequences between these parties of the tort committed in New South Wales. So the first of the anterior legislative interpretation exercises provides a tick for our argument - for our success, I should say, in this case.

The second exercise, in our submission, provides equally a tick for our successful outcome of the case because there is nothing in the familiar form to which your Honour the Chief Justice drew attention in a question some time ago which prevents that from being applied by the court of the forum and for those reasons, in our submission, without needing in this case to be concerned about the difference between substance and procedure, the statute which limits the amount of money was part of the regime or system of law belonging to the same regime or system of law governing all conduct, criminally, civilly and by other regulatory means, between these people at that time in that place and for those reasons as the lex loci delicti it could have and should have been applied.

HAYNE J: Is that any more than saying that a law of substance as opposed to a law of procedure is one that affects the existence, enforceability or measure of rights and obligations? That is, have you simply redefined the divide supposedly existing between substance and procedure?

MR WALKER: I have tried not to, your Honour. I have tried to put an argument that says it is not a distinction that properly comes into play until there arises any of the inconsistencies between the forum statute law and the forum common law, which is the process of applying the result of the choice of law.

HAYNE J: But the common law rule might be stated as, even accepting your thesis, applied a lex loci on matters of substance, and that then simply shifts the debate over substance and procedure and leads to that redefinition that I have identified.

MR WALKER: It does your Honour, and in our submission, that is a reason for the common law not to be stated in that way, not least because it is neither certain nor transparent. It leads, if we may say so, to a third shadowy regime becoming the solid regime for the adjudication of rights and obligations between these parties. There are in the debate at present two. There is the forum's regime and there is the locus delicti regime. The third, which is created by some of the applications of the supposed distinction, procedural substantive, is a mish-mash never enacted or actually in force in any Territory governed by any parliament in Australia. Some parts of the lex loci delicti call them substantive, and some parts, which may have a devastating effect on the content of the right, called procedural, sometimes only for traditional reasons and sometimes on the basis of narrow semantic distinctions, from lex fori.

In our submission, the answer is - as we said to Justice Gaudron - apply everything, that is, at common law you apply everything because the common law choice of rule if lex loci delicti, and the law is the law is the law, as Justice Kirby points out, the Constitution not admitting of distinctions between one kind of law and another, until something stops it, until a local statute stops it or until the act of applying the imported statute, which of course is a matter of common law is, in fact, impossible in the circumstances in the forum court because of the intractably local reference or the like.

GAUDRON J: How would you state the common law rule that you now advocate? Is it sufficient to state it as the law of a State or Territory where the act happened should determine the legal consequences which attach to that act or omission?

MR WALKER: Yes, your Honour.

GAUDRON J: That is sufficient?

MR WALKER: Yes, your Honour.

GAUDRON J: Now, you do not relate that - although I thought your argument did in some ways - to the law that determines the character of the act or omission. I can well understand your saying if a law determines the legal character of an act or omission.

MR WALKER: That is the common law of choice of law of the forum, which in Australia will always be the same, the common law will always be the same.

GAUDRON J: Well - - -

GUMMOW J: We are talking about the anterior step of characterisation.

GAUDRON J: Yes.

MR WALKER: The common law of that anterior step of characterising in the forum the juristic nature of the out of State act or omission, that is, the common law of the forum which, in this country, will produce exactly the same answer wherever the forum is located.

GAUDRON J: Well, that is so with respect to the common law - - -

MR WALKER: Yes.

GAUDRON J: - - - but not necessarily the same considerations apply, for example, if you look at the tort of breach of statutory duty.

MR WALKER: But the common law tools or principles by which it is characterised must, with respect, be the same throughout this country. I stress the common law rules and that is a common law exercise for the forum.

GAUDRON J: Yes.

MR WALKER: That is, with respect, not an accidental consequence, unifying consequence, of having the one common law.

GAUDRON J: Maybe we are talking at cross-purposes.

MR WALKER: I am sorry, your Honour.

GAUDRON J: Let us say the question is whether a particular act will sound in damages.

MR WALKER: That is a substantive question according to the old dichotomy.

GAUDRON J: Yes.

MR WALKER: So is measuring damages, we submit.

GAUDRON J: Well, exactly.

MR WALKER: GIO v Marks was not a case on practice and procedure.

GAUDRON J: But whose law determines the question whether it sounds in damages on your argument? Whether it is an act that sounds in damages.

MR WALKER: The forum. The forum asks that, armed with such information as it needs to obtain for that exercise about the legal regime obtaining in the place of the act or omission.

GAUDRON J: I see. It determines it by application of the law of the State or Territory where the act occurred.

MR WALKER: No, it does not apply the law of the Territory or State, it looks at it using its own common law, forum law, looks at the other State's law and asks - - -

HAYNE J: So that a New South Wales Act introduces a tort of invasion of privacy sounding in damages.

MR WALKER: Yes.

HAYNE J: If someone sues for that in a Victorian court, what law determines whether damages are recoverable and where the tort is unknown in Victoria?

MR WALKER: The common law of Victoria, as we submit it should be held to be, would say of that that it was probably to be characterised for conflicts purposes as in the nature of the tort from which it would follow lex loci delicti and then - - -

GAUDRON J: To do what? Lex loci delicti to do what?

MR WALKER: Subject only to what I have said in answer to the Chief Justice about intractably local parts of that New South Wales statute that simply cannot be imported or given meaning upon importation, the damages remedy granted by the New South Wales statute will be ordered by the Victorian court.

GAUDRON J: Okay, now, let us take a perhaps more common provision. We have a Factory, Shops and Industry Act that says you have to fence dangerous machinery, and you have it in one State and you do not have it in another State. The plaintiff, in respect of events in the State where there is a Factory, Shops and Industry Act, sues the State in which there is not for breach of statutory duty. At what point, and by reference to whose law, do you determine that there has been a breach of statutory duty?

MR WALKER: At the beginning of the exercise one characterises by the common law conflict rules of the forum the juristic nature according to those rules, which are its own rules, of the New South Wales statutory cause of action, if it is a statutory cause of action, probably yielding in the nature of tort, although it may be, in the example your Honour has given me, it would be a common law tort, and at that point, having then done so, would apply to the facts as found, which are facts of conduct in New South Wales, the law to which full faith and credit is given in so doing of New South Wales to the extent that its terms permit of that by the importation required by your own Victorian common law conflicts rule.

GAUDRON J: Yes, but for what purpose are we applying it at this stage?

MR WALKER: For ascertaining whether there was a breach, was the speed excessive, if that is the issue, and then, if a measure is provided, of monetary compensation, then ascertaining that the fact is one, for loss of an arm, such and such an amount, measure being substantive, we stress.

GAUDRON J: The reason I am asking you this is because I can well understand a logic or a symmetry, if you like, in saying, the law of the State or Territory, which makes a particular Act sound in damages, should determine the extent of those damages.

MR WALKER: Yes, your Honour, that is our argument.

GAUDRON J: Now do you see that?

MR WALKER: That is our argument, your Honour.

GAUDRON J: Yes, but that is an argument that is only good, it seems to me, in so far as you are talking about statutory rights. You have got to have some other rationale if you are talking about common law rights, where you have got the common law of Australia which determines, for example - - -

MR WALKER: Yes, but the common law is the same in all forums. They have disparate statutory affectation of it, so it is always a statutory question.

GAUDRON J: Well, not exactly. In the first example I gave you, it is the statute law of, we will say, New South Wales, that determines that the Act sounds in damages.

MR WALKER: Yes.

GAUDRON J: If it is simply a common law - now, admittedly, there may be all sorts of shades in between - and that makes it - the common law of Australia, gives it the character, that it sounds in damages, and the State legislation simply determines the measure of those damages or, as in McKain v Miller, whether the action is actionable within a certain period, what is your justification when it is the common law of Australia that gives the character to the Act or omission in question, for then going to the State or Territory? You see, it seems to me there are two different questions.

MR WALKER: There is not, your Honour, I think anywhere in Australia a refuge for the untrammelled common law or the common law affected only by the Constitution. There is no common law Ruritania, as it were. Everywhere there are statutes and delegated legislation impinging on common law positions. The laws and the public Acts which are referred to in section 118 and the sovereignty which is recognised mutually in sections 106 and 107 of the Constitution is this confluent stream. One stream, three sources in every law district. In our submission, it is clear therefore that to talk about lex loci delicti is always talking about that multi source single stream.

The law as it governs in New South Wales territorially derived from the Constitution Commonwealth statutes, New South Wales statutes and the common law, with the common law being at the bottom of the hierarchy as to inconsistencies, from which it follows that my justification, to answer your Honour's question, is that you are not in fact giving full faith and credit to any law district's laws, but it actually exists by selecting only this common law unaffected by local or Commonwealth statutes.

GAUDRON J: What you are really doing, is it not, in that situation is making up an entirely new body of law that does not apply anywhere?

MR WALKER: That, in our submission, is to be resisted at all costs because it has no place in the Constitution. It does not accord with anything that could be called a reasonable expectation of persons asking, "What body of law governs the consequences of what I've just done?"

GAUDRON J: But it may be a more fundamental problem than that. That is to say, you are just inventing law.

MR WALKER: That is right.

HAYNE J: Is that right?

MR WALKER: No one has made - - -

HAYNE J: Are you not simply applying the law of the forum and is not - - -

MR WALKER: If the common law said that, yes, your Honour, that would just be the common law.

HAYNE J: But that is the competition, is it not, to apply the law of the forum which would give you this advantage which is seen as unearned, inappropriate, or to apply the law of the place of commission?

MR WALKER: It is the political contest, your Honour, but at common law that contest is pushed down the line to the next stage of the inquiry. After you have answered lex loci delicti, you then ask: are there any bits of it that the common law says cannot be applied? We start by saying we all know there are bits of it that the local legislation, the forum legislation, says cannot be applied. We say there is nothing the common law says cannot be applied except in so far as of its nature, for the reasons I have already put several times.

HAYNE J: And that is starting from the premise that when you apply the lex loci, you apply all of it that affects existence enforceability measure?

MR WALKER: That rationale is bottomed on two things: one, the territoriality principle, that is a Territory is governed by all the laws that are extant in the Territory, not just some of them; and, second, section 118. May it please your Honours.

GLEESON CJ: Yes, thank you, Mr Walker. Have the interveners who are supporting the applicant agreed between themselves on an order of address?

MR BALE: Yes, your Honour.

GLEESON CJ: Yes, Mr Solicitor. Mr Solicitor for Tasmania.

MR BALE: Yes. May it please your Honour, I believe I am going to be followed by the Solicitor-General of the Northern Territory and I think the Solicitor-General of South Australia and New South Wales and I believe the Solicitor-General for Western Australia believes that he should follow the respondent because of the nature of the argument that he is putting.

GAUDRON J: Does the respondent agree to that?

MR BATHURST: No. No. Western Australia, as we understand it, supports what we are seeking to resist, namely the rules laid down in McKain and Stevens v Head.

GLEESON CJ: We will have Western Australia before you.

MR BATHURST: If your Honour pleases.

GLEESON CJ: Yes, Mr Solicitor for Tasmania.

MR BALE: May it please your Honour. I propose first to say a few words about the granting of leave to reopen and otherwise our submission is confined to the operation of section 118 of the Constitution, which we, of course, put somewhat differently from the way in which it is put in the other written arguments that have been filed in that we contend that the requirements of section 118 effectively eliminate choice of law options in Australia.

Firstly, as to reopening, we have no argument that the principal concerns or issue that should concern the Court in addressing the question of reopening were those canvassed by Justice Gibbs in Queensland v The Commonwealth, to which reference has been made at page 599, and which were subsequently adopted by this Court in John, to which reference has also been made. We contend, however, that those principles, contrary to the submissions of the respondent, do not in their application assist the respondent in the way in which the respondent would argue they do.

In the first place, we submit that there is no long-standing line of authority which has been frequently acted upon so as to provide a strong body of substantive law, nor, to use the words of Justice Gibbs as he then was, are we confronted with a decision which applied a principle that has been carefully worked out in a succession of cases and has been more than once reaffirmed.

KIRBY J: These principles so-called in John are dealing with the Tax Act. We are dealing here with the Constitution. Is there not an important distinction?

MR BALE: We would say there is, your Honour, yes, and - - -

KIRBY J: I thought Justice Windeyer said it was the duty of every Justice to give the Constitution meaning with the assistance of the decisions of the past but if the Justice comes to the view that the past has got it wrong, given that different generations will look on the same text with different eyes, then the duty is to say so.

MR BALE: We would respectfully contend that that is entirely the proper approach and I think, as Justice Isaacs said back in 1913 in the Australian Agricultural Company Case, it is better to be ultimately right than persistently wrong and I am sure that courts have consistently taken that approach in constitutional matters and I have simply proposed, indicating in the context of the respondent's written submissions, particularly at paragraph 6, that the principles identified there really do not give the respondent a great deal of support or comfort in the circumstances of this case. Now, whether the Court wishes me to take time with those submissions or not, I do not know.

GLEESON CJ: It is probably convenient for you to develop your submissions on the merits concerning section 118.

MR BALE: Yes, I am pleased to do that, may it please your Honour. Perhaps before I do that, I should draw your Honours' attention in our written outline to one housekeeping matter and that is that at page 3 of the outline, note 16, there is a reference to McKain and the pagination you would see would make it a nonsense reference to McKain and that is because it should be a reference to Stevens and not to McKain, so the pagination is right but the reference in that note 16 on page 3 should be a reference to Stevens and I regret that error.

In turning then to section 118, I should preface what I want to say directly in the context of section 118 by saying something of the sovereignty of States and Territories over torts occurring within that State or Territory; what has been called in the outline of the applicant the principle of territoriality.

GLEESON CJ: There was a time when referring to sovereignty in connection with States was a very provocative thing in this Court.

MR BALE: The principle of territoriality I am content with, your Honour.

GLEESON CJ: Perhaps you meant capacity?

CALLINAN J: It does not worry me, I might say.

MR BALE: I am sure your Honours know what I mean but if you like the capacity, the scope of State's power over events which occur within their territory and, in our submission, it is perhaps trite but no less important in the context of the submission that I am to put to reassert that it is a fundamental principle of English law that the laws of a sovereign State predominate in the Territory or of a State.

GUMMOW J: But you are not a sovereign State.

KIRBY J: What does the fact that it is English law have to do with it? This is the end of the first century of our Constitution and we are still talking about what English law says. This is constitutional.

MR BALE: Certainly, your Honour, but we adopted that law and it is - - -

KIRBY J: It is there for Australian law.

MR BALE: It is now, certainly, your Honour, and the first expression of it appears in the judgment of this Court in Laurie v Carroll to which reference has been made and I think it is exclusively Australian cases to which I intend referring the Court.

KIRBY J: I have no objection whatever to looking to useful analogies in other legal systems, including England, but I just think we have really got to grow up, talking about English law in a context of a case which is all about how our common law moulds itself to the Constitution of Australia.

MR BALE: I am not seeking to do that, and perhaps I have badly expressed myself. What I am seeking to do is to say that there was a principle of English law which is now very much a principle of the law in this country, that the several States have legislative power which predominates within the territory of those States. That principle, having been stated in Laurie v Carroll, was expressly recognised by Justice Menzies in Pederson v Young. It was equally expressly recognised by your Honours Justices Gummow and Hayne in your judgment in Wakim. Indeed, it was referred to in the constitutional debates in 1897 as a principle which underlay the constitutional provisions, and I refer to page 1005 at the foot of column 1 of the report of the Adelaide Session of the 1897 debates. It is also mentioned in the judgment of the majority in McKain and I might just draw your Honours' attention again to a passage which has been touched upon already today by my learned friend, Mr Walker, at page 36 point 5, where the Court said:

it is of the nature of the federation created by the Constitution that the States be distinct law areas whose laws may govern any subject matter subject to constitutional restrictions and qualifications. The laws of the States, though recognised throughout Australia, are therefore capable of creating disparities in the legal consequences attached in the respective States to the same set of facts unless a valid law of the Commonwealth overrides the relevant State laws and prescribes a uniform legal consequence. That may or may not be thought to be desirable, but it is the hallmark of a federation as distinct from a union.

To the same effect, there are passages in the judgment of Justices Wilson and Gordon in Breavington at pages 84 to 85, of Justice Brennan in the same case at page 107, and there are probably many other examples.

KIRBY J: But it has been modified since that time, I think, because at that time when the early passages at least, the Convention and those of the early years, the Colonial Laws Validity Act was thought to prevent the States, was it not, certainly the colonies, from enacting laws with extraterritorial operation, but increasingly by recognition of this Court; and, I think, by the abolition of the Colonial Laws Validity Act in the Australia Act, the right of the States to enact laws with extraterritorial operation, and therefore with operation in each other, to some extent, makes the absolutism of the law areas impossible.

MR BALE: That is certainly true, your Honour, but the starting principle, we would contend, is that the law of a particular State dominates within its Territory. There may be circumstances in which a Commonwealth law, of course, a section 109 question or something might arise, which would make that untrue so far as Commonwealth laws are concerned, and there may be circumstances, although, in our contention, it is not easy to find them, in which the law of one State might have an operation in another State independently of the provisions of section 118, but it is the relevance of that principle in the context of section 118 that, in our contention, is important, and it is against the general background that actionability in tort, of conduct within the limits of a State or Territory, is to be determined according to the laws of that State or Territory, that I turn to look - - -

GAUDRON J: It is according to the body of law which operates in that State or Territory. Once you have got a federation, it is absolutely pointless to talk about the laws of the State or Territory as such; you must talk about the body of law that operates in that State or Territory.

GUMMOW J: You do not dissent from that, do you?

MR BALE: I do not dissent from that. I am content with that, your Honour.

GUMMOW J: Well, that has removed one storm cloud, but where is all this going?

MR BALE: It is going here, your Honour, that if one accepts as a matter of general principle that the starting point is that the laws of a particular State in relation to the actionability, or the body of law of the State, if you like - - -

GAUDRON J: No, not of the State.

MR BALE: The body of law that applies in that State - - -

GAUDRON J: Yes.

MR BALE: - - - deals with the actionability, or governs the actionability, of torts within that State.

GAUDRON J: Well, by and large, what it will do is determine the character of acts and omissions, the legal character of acts and omissions, of the State, will it not?

MR BALE: Yes, it will.

HAYNE J: But the very premise for this whole debate is that this is an action that is going on in a court other than the place where it all happened, the place where the body of law of, or applying in, the State had its most immediate application. We are out of that State.

MR BALE: Yes, and what we are saying in that context, your Honour, is that section 118, by requiring that:

Full faith and credit shall be given, throughout the Commonwealth to the laws.....and the judicial proceedings of every State.

It requires that one looks at the body of law which applied to those events, that conduct, occurring in New South Wales, and then - - -

HAYNE J: But you have slid at once; you have slid at once to the notion of a body of law applying to events.

MR BALE: Yes.

HAYNE J: Now, perhaps that is a step that needs to be taken, but it cannot be taken unthinkingly. You have an action proceeding in the court of State A, concerning events that occurred within the Territory of State B; whether you can slide as quickly as you can may be the whole point of the debate, Mr Solicitor.

MR BALE: Well, what we say, your Honour - let me step back and take it a little more slowly - as has been submitted by the applicant, we accept that there is a common body at common law throughout Australia, so that the only circumstance in which one is going to have to concern themselves with this issue, is where the State in which the events have occurred, or another State, has, by some piece of legislation, set up different regimes.

So we have an accident occurring in New South Wales and there is legislation in New South Wales which says, in relation to that accident, the damages that you can recover is, let us say, limited to X dollars. In Victoria there is no such limitation. That law that applied in New South Wales in relation to the limitation of damages, we say, must because of the directive given by section 118, be given full faith and credit on any trial of that matter - - -

GLEESON CJ: How does section 118 apply in the following example? Suppose that in New South Wales there is a law against invasion of privacy which makes that a wrong and in Victoria there is no law, which some people might think makes it a right, and suppose a national newspaper, by matter that is published in New South Wales and Victoria, invades the privacy of an individual, what is the command of section 118 in such a case?

MR BALE: The command of section 118, and do I assume there are two actions, your Honour - there is an action in Victoria and an action in New South Wales?

GLEESON CJ: No, assume an action is brought in Victoria where invading people's privacy is a right, complaining that the publication in question amounted to an actionable wrong because there was publication both in New South Wales and in Victoria.

MR BALE: We would say there are two issues. There is one of jurisdiction and there is one of the law to be applied. So far as jurisdiction is concerned, that would be determined according to Victorian law. So far as the law to be applied is concerned, if we are talking about an actionable wrong and that wrong occurred in New South Wales, then so far as its actionability in Victoria is concerned the law of New South Wales would be applied because that is the law of the place where the wrong occurred and we would - - -

GLEESON CJ: The consequence of section 118 of the Constitution then is that a Victorian court is enforcing a claim for damages in relation to conduct which, in Victoria, is a right.

MR BALE: If it is prepared to accept jurisdiction to do that, and we would say in all probability it would not, because it would apply the Phillips v Eyre rule in relation to jurisdiction, and say it is inappropriate for the Victorian court to accept jurisdiction to litigate this because the laws of the two States are so disparate, but if, for whatever reason it chose to take jurisdiction, then it would be obliged to apply the law of the place where the wrong occurred and we say that is a directive of section 118, because we say if you do not do that, you are not giving full faith and credit.

McHUGH J: But that depends on the circumstances, does it not? It depends upon the statute law of the forum otherwise section 118 would have what seems to me to be the absurd effect that it would compel a State to give effect to a statute law of another State which was in conflict with its own statutes.

MR BALE: No, with respect, it would not. It would only be obliged to do that if the State accepted jurisdiction. This is a State accepting - - -

McHUGH J: Let me put you an illustration. Supposing the law of New South Wales says any person who is dismissed from his or her employment, harshly or oppressively, may bring an action for damages, or for reinstatement. Let it be assumed that the law of Victoria says no person earning more than $25,000 can bring an action for damages for being dismissed from employment or for reinstatement. Now, in those circumstances, does the Supreme Court of Victoria have jurisdiction to hear an action arising out of a dismissal in New South Wales?

MR BALE: The Supreme Court of Victoria on the jurisdiction issue would presumably apply the Phillips v Eyre rule and say we do not have jurisdiction because the laws will say different.

McHUGH J: Well, it is nothing to do with jurisdiction. It is everything to do with the substantive law of the State, is it not?

MR BALE: Well, with respect, we would say that is a jurisdictional issue. In other words, we would say if the events occur in New South Wales and one is asking a Victorian court to allow an action to be taken there, Victoria is only going to do that applying the jurisdictional rules of Phillips v Eyre.

McHUGH J: Well, let me give you another illustration. Supposing New South Wales puts a cap on damages but allows damages to be claimed for loss of enjoyment of life but in Victoria there is no cap on damages but a prohibition on the award of damages for loss of enjoyment of life. Now, what is the Victorian court to do? Is it to apply the law of New South Wales in its entirety or the law of Victoria or an amalgam?

MR BALE: We would say so far as liability and quantum of damages are concerned it is to apply the law of New South Wales, that is the law of the place where the events occurred.

KIRBY J: In the old days of error these cases would have all been sent by the cross-vesting legislation back to New South Wales, would they not?

MR BALE: They would have, your Honour, yes.

KIRBY J: Yes.

MR BALE: And very properly so.

KIRBY J: Very properly so.

MR BALE: And these problems would not have occurred.

GAUDRON J: I am not too sure that that is right. How come we had Stevens v Head and McKain v Miller and Breavington? I mean - - -

KIRBY J: Pre-cross-vesting.

GAUDRON J: - - - they seem to - - -

GUMMOW J: They were not - - -

HAYNE J: No, they were not.

GAUDRON J: They were not.

HAYNE J: I am the passenger who sues the driver of the Victorian car for the running off the road in Gundagai, sues in Victoria.

GUMMOW J: In the County Court, no cross-vesting applies there.

HAYNE J: Why should that - - -

MR BALE: That would be correct, yes, your Honour.

HAYNE J: And why should that action be tried according to New South Wales law? What is it in 118 that tells you that the Victorian passenger in the Victorian-registered and driven car that happens to run off the road in Gundagai should have rights and duties regulated by New South Wales law?

MR BALE: Because if there is a New South Wales statutory provision - and that is, of course, all we are concerned with - which says that in relation to conduct which occurs in New South Wales and the consequences of that conduct there is to be a particular limit on liability, let us say, then those who drive in New South Wales or otherwise indulge in whatever the relevant conduct is in New South Wales face in that State the consequences of the statutory provisions which apply in that State.

HAYNE J: And that is an argument perhaps for the adoption of one rather than another common law rule. At least as at present advised it seems to me not to be anything rooted in 118.

MR BALE: We say it is rooted in 118, your Honour, because if you do not apply the New South Wales provisions which govern quantum, you are failing to give full faith and credit to the law which applies to the event which occurred in New South Wales. If you apply the law which naturally did not apply - Victorian law did not apply. If, for example, the same person instead of applying in Victoria had sued in Queensland, Victorian law would not have applied. There is no natural connection between Victorian law and the events which occurred in New South Wales.

So we would say that by failing to allow New South Wales law both as to liability and to quantum to apply, you are denying full faith and credit. I am conscious of what your Honour Justice Kirby has said about the meaning of full faith and credit and hopefully I might get to that in a few moments. But in our contention you are denying full faith and credit to the operation of the New South Wales provisions. That infringes the embargo which section 118 sets up.

McHUGH J: But that assumes that section 118 applies the New South Wales provisions in the State. In other words, that it abolishes the common law choice of law rules. If the common law choice of law rules would say that the New South Wales law is not applicable, what does section 118 have to say?

MR BALE: We say it really abolishes nothing, your Honour. It obviates the need for any choice of law rule in tort in Australia because, by applying the relevant statutes of the law of the place where the event occurred - and by "the relevant statutes" I mean the statues that impacted upon the events which occurred - - -

HAYNE J: Let us take this case as the example. The relevant statute is a statute which says that "a court shall not", "a court" which on ordinary principles would mean, it seems, "a New South Wales court shall not". How does that Act impact, as you put it, on an action in a Victorian County Court?

MR BALE: I am not exactly sure that it does, your Honour. It is a difficult set of provisions that one is concerned with here and it is certainly not entirely clear, in our submission at least, that it does. We do not seek to address that particular issue. We are seeking to look at this rather as a matter of principle rather than - - -

GUMMOW J: Looking at it as a matter of principle though, what you have to do in construing 118, it seems to me, is to get out of 118 a series of connecting factors, one for contract, one for tort, one for something else, which may not be the same as the common law rule. How does one find them? What are the connecting factors that are spelled out?

MR BALE: Your Honour, it might not be necessary for there to be a connecting factor because all that 118 - - -

GUMMOW J: Otherwise, how do you know to what to give full faith and credit?

MR BALE: Because what you are giving full faith and credit to is that which section 118 directs, and that is the laws - - -

GUMMOW J: Yes, I know that, but assume you are in State C and the laws of State A purport to speak to the matter because they are addressed to conduct anywhere in Australia by a company incorporated in that State A. The laws of State B purport to apply to it too because they have some other idea in their statute that is a sufficient link. This is being litigated in State C. The laws of State A and State B are not the same. You cannot give full faith and credit to both. You have to resolve the conflict somehow. How do you do that? You only do that by saying one has the relevant connecting factor, the other has not.

MR BALE: Your Honour, we approach it differently. Our contention is that in tort, and we are only concerned here with tort, is that one is concerned with conduct and one is concerned with the law that applies to that conduct and the conduct, obviously, occurs in a place.

HAYNE J: Let us not get on to the cases of omission nor the cases of multi-State omission and multi-State conduct. The American academic literature is filled with them, Mr Solicitor.

MR BALE: We would have treated omission in the same way. It is more difficult for obvious reasons but we would have said an omission occurs in the place where the responsibility to perform the act was to be found and, whilst it may be that you can have conduct which would give rise to a court in several States and that might well give rise to jurisdiction in each of those States, but where you simply have a single piece of conduct, be it by way of act or omission, which takes place within a particular jurisdiction, we would have said that - so that the laws of that jurisdiction in terms of section 118 apply to it, it would be our contention that if you do not allow those laws to apply wherever you try it, you are not giving full faith and credit to those laws.

McHUGH J: Yes, but your argument on 118 overlooks one matter to begin with, does it not, and that is that 118 does not apply to the laws of a Territory. Now, in this particular case, where would your argument be if the situation had been reversed, it was the legislation of the ACT which had put this cap on and this action was then brought in the Supreme Court of New South Wales, what would 118 have to say about the applicable choice of law?

MR BALE: Directly nothing, your Honour, but we would say because it eliminates choice of law in the sense of directing, if you like, the application of the lex loci delicti - - -

McHUGH J: No, but how does 118 give any direction in that situation?

GAUDRON J: Section 109 would apply then, would it not, at least through the self-governing law and that the ACT law by force of section 109 would prevail, would it not, in that situation?

MR BALE: Your Honour, I was taking it differently. What I was attempting to say was that if you accept that as between the States section 118 effectively directs the application of the lex loci delicti, then so far as the Territories are concerned, within the Federation, the same law should apply, that is the lex loci delicti. It brings us back, at the end of the day, to the application of the lex loci delicti both as to liability and as to quantum.

McHUGH J: Why should we give 118 this construction? After all, it was not perceived as doing that at the time of Federation and it comes from the United States and in the United States it has not had any effect on the development of the rules of private international law over there. Did not Justice Mason say, in Breavington, why should you give the facsimile an interpretation which you do not give to the original?

MR BALE: Your Honour, there are many reasons for that, and perhaps I can pass to them. They were extensively canvassed by his Honour Justice Deane in Breavington, and I am sure I need not go through what he said there. There was a very useful and critical analysis of a comparison between the Australian and the United States' provisions, but I, with respect, challenge your Honour's proposition that section 118 was not perceived at Federation, as having substantive effect.

McHUGH J: I said, on choice of law.

MR BALE: Well, if it has substantive effect - and I do not put it forward as a choice of law rule, what I hope I said was, its consequence is that it obviates the need for choice of law rules in tort, by effectively requiring, through its direction, that you give full faith and credit to the laws of States by effectively requiring that the law of the State in which tortious events occur, is the law to apply to those torts.

McHUGH J: I cannot help but think that you keep slipping backwards and forwards. You talk about jurisdiction as having something to do with the application of the other States' laws, but if you have a conflict between two statutes, what has section 118 got to do with it? How does it resolve the problem? You say, it is a question of whether it goes to the jurisdiction and the court. That seems to me to invoke some other law.

MR BALE: If I have given the impression that that is my submission, I have given a wrong impression, your Honour. What I am saying in relation to jurisdiction - - -

McHUGH J: I may have misunderstood.

MR BALE: - - - is that a court, which is asked to try a set of circumstances in tortious events which have occurred outside its jurisdiction, will apply the Phillips v Eyre rules to determine whether or not it has jurisdiction. It has then got to determine what law - - -

McHUGH J: Both limbs of Phillips v Eyre?

MR BALE: To the question of jurisdiction, I would have thought both limbs.

KIRBY J: That seems an odd thing, strange; English decision of a few English judges should govern what an Australian Supreme Court or court should do. It would have to apply its own statute. Is the defendant present in the jurisdiction? Is a person invoking its jurisdiction? Does it fit within its statute and rules? It is not going to be governed by something that was written in England more than a century ago.

MR BALE: Well, it almost is, your Honour, already, by the decisions of this Court in - - -

KIRBY J: Well, Flaherty v Girgis does not say that. I mean, it governed by statutes and rules of court.

MR BALE: But Stevens v Head effectively, with modifications, of course, adopts the revision of the Phillips v Eyre rule proposed by his Honour Justice Brennan in Breavington and that is what, of course, we are seeking to have this Court now depart from, in the context of its application to choice of law.

McHUGH J: But that is why I am having difficulty following your argument at the moment. If you start off with Phillips v Eyre, and you have to give it operation now, I just do not quite follow how 118 gets into the picture?

MR BALE: Because we are saying Phillips v Eyre has nothing to do with choice of law. Its only operation can be in the context of jurisdiction. It has nothing to do, or should not have anything to do with choice of law in this country, in tort, in the context of section 118 because 118 gives it no room to operate in the context of choice of law in tort.

GLEESON CJ: What is the jurisdictional rule that applies in this country?

MR BALE: If one applies Phillips v Eyre, your Honour, which seems to be the law at present as modified by the majority in Stevens v Head, particularly, and I say that because it seems to me that the decision in McKain was obiter, at least - - -

McHUGH J: Breavington was formally challenged. There was no argument put but Breavington was challenged.

MR BALE: Breavington was challenged by the judges. It was basically accepted.

McHUGH J: Challenged by counsel for the appellant.

MR BALE: I thought the - I may be wrong, your Honour, but I thought the applicant - - -

McHUGH J: It might have only been in his written submissions but it certainly was challenged, but he put no oral argument in favour of it. Indeed, he conceded that the lex loci did govern the liability of the defendant.

MR BALE: I had read the argument as conceding that Breavington applied and Breavington, of course, applied the lex loci delicti. But, I think, in answer to your Honour the Chief Justice, we would say that so far as jurisdiction is concerned the modified Phillips v Eyre rule as enunciated in Stevens is the law which currently applies in Australia but that is - or should not be the law, because of the operation of section 118 which applies in relation to choice of law.

GAUDRON J: I am lost, I am sorry, Mr Solicitor. If you look at McKain v Miller, it asserts a double actionability rule which you accept and which you do not seem to think is, as I understand your argument, not affected by section 118.

MR BALE: So far as jurisdiction is concerned.

GAUDRON J: Yes, well, whether you call it jurisdiction, actionability, remedy in the forum - there are all sorts of expressions. Perhaps, remedy in the forum might be the more appropriate description of what is involved in that. Then McKain v Miller proceeds on the basis that the lex loci delicti applies, and you do not challenge that. All that is involved in your difference between your submissions and McKain v Miller, surely, is whether there is room for a substance procedure dichotomy, for whatever reason, and if there is room for it, whether it can apply to a law which limits the damages recoverable, or limits the legal consequences of an act or omission?

MR BALE: What we are trying to submit to your Honour is that a clear distinction is to be drawn between jurisdiction and a law to be applied in a jurisdiction.

GAUDRON J: Yes. Well, McKain v Miller does that.

MR BALE: And we have no difficulty with the test applied in McKain v Miller or in Stevens v Head so far as determining jurisdiction is concerned.

KIRBY J: But I still have difficulty with this because my recollection is - I sat in the Court of Appeal in Flaherty v Girgis - that jurisdiction is normally determined by reference to statutes or laws of court. I think you may be - and some of the academic literature deals with this - drawing a distinction between justiciability jurisdiction law applies. Justiciability, is it apt or appropriate for a court, even if it has jurisdiction, to assume jurisdiction? I do not know whether that is your submission, but jurisdiction is normally by reference to a tick list: is the defendant present, has the wrong occurred, is the debt owed? It is in statutes in Supreme Courts - - -

MR BALE: I am happy to deal with it in terms of justiciability. I do not think it is dealt with in those terms in the expression of the rule and of the limbs of the rule in - - -

KIRBY J: It may not be.

MR BALE: - - - either Miller or in Stevens.

GLEESON CJ: But this all began with a passage in a judgment of Justice Brennan in Breavington that was then taken up by the majority in McKain. That passages commences with the following words:

A plaintiff may sue in the forum to enforce a liability in respect of a wrong occurring outside the territory of the forum if -

So whether you call it jurisdiction or justiciability, that statement of principle is a statement about that subject-matter.

MR BALE: The right to sue, yes, and we have no problem with dealing with the right to sue - we have no problem with the statement of the rule there in relation to the right to sue.

GLEESON CJ: But one of the conditions of the right to sue is that:

the law of the place in which the wrong occurred.....gave rise to a civil liability of the kind which the plaintiff claims to enforce.

MR BALE: Yes.

GLEESON CJ: And the other condition is that if the circumstances:

had occurred within the territory of the forum, a cause of action would have arisen entitling the plaintiff to enforce against the defendant a civil liability - - -

MR BALE: Yes.

GLEESON CJ: You accept those two conditions?

MR BALE: Yes.

GLEESON CJ: Then in the case of an action brought in Victoria, which, let us assume, has no statute about invasion of privacy, to enforce a liability said to arise out of an invasion of privacy that occurred in New South Wales those two conditions are not satisfied.

MR BALE: So the Victorian court would decline to allow the action to proceed.

GAUDRON J: And what if it were federal jurisdiction? What if the facts were that a private detective was hired from Victoria to do something in New South Wales. He came - we will make it a she this time - she came to New South Wales, did it, breached the New South Wales Act, went back to Victoria, where she was resident, and the New South Wales resident had suffered damage in consequence and brought proceedings because she was a resident of Victoria in the Victorian Supreme Court when immediately you are talking about Australia-wide jurisdiction? You are not talking about any forum other than the forum of a court exercising federal jurisdiction. What then happens? Can the double actionability rule as formulated in Phillips v Eyre apply there?

MR BALE: We would say there is no jurisdictional question any longer. All we are left with is which law to apply.

GAUDRON J: Why is that, because of the Judiciary Act?

MR BALE: Because your Honour has told us it is federal jurisdiction.

GUMMOW J: So it is because of the Constitution, ultimately?

MR BALE: Yes.

KIRBY J: But she is resident in Victoria. I really do protest at this. Conceptually, are there not the three steps? Is there jurisdiction in the court? Look at the checklist. She is resident in Victoria. Jurisdiction in the court. Should the court assume it, given the state of Victorian law? There you can build in some Phillips v Eyre-type criteria. Then if you decide that you can then you have the choice of law rule which must conform to the Constitution and it may be, if the Victorian court has jurisdiction, says it will deal with the matter, notwithstanding the disparities, it must then apply the New South Wales law because the Constitution requires it to give full faith and credit to New South Wales. If she sues on a count claiming damage in Victoria, no cause of action. If she sues on a count claiming cause of action with damage arising out of the event in New South Wales or the omission in New South Wales, cause of action, because there is full faith and credit and that is a logical progression.

MR BALE: And we entirely agree with the result, your Honour.

KIRBY J: But it is in the step two, that is to say there is jurisdiction in the court because of the nexus that the court statute provides. It is in step two, justiciability or whatever you like to call it, that the issue of the Phillips v Eyre-type considerations come into play. If it is inimical to the Victorian Supreme Court to apply a New South Wales statute which would be counter to the provisions of New South Wales, they could say, "You've just got to sue for this in New South Wales because it's not part of our law. We're not going to do it."

MR BALE: Precisely.

GUMMOW J: I think, Mr Solicitor, Justice Gaudron's example, looking at step two, is finding the jurisdiction, as I thought you agreed with me, in the Constitution and in 39 of the Judiciary Act which is a federal law.

MR BALE: In Justice Gaudron's example it is a federal law.

GAUDRON J: Yes.

GUMMOW J: Now what then draws in Phillips v Eyre?

MR BALE: You do not need to draw in Phillips v Eyre.

GUMMOW J: That is what I am trying to find out.

MR BALE: Yes. You do not need to draw it in because there is no issue of the right to sue.

GAUDRON J: My next question is if there is a common law of Australia, why would the situation be different depending on whether there is federal jurisdiction or purely State jurisdiction involved. Thus, for example, why should it matter for the purposes of the common law in the example I gave you that you are suing a female private detective, a real person, as distinct from suing a corporation who is not a real person and therefore not a resident and therefore you are exercising purely State jurisdiction when you bring the common law of Australia into play?

MR BALE: At the end of the day we would say it probably makes no difference because we are only - - -

GAUDRON J: But it may.

MR BALE: You are only concerned with the statute. You are not concerned with the common law.

GAUDRON J: No, you are allowing that in one case the modified double actionability rule applies so that there is no remedy in the Victorian Supreme Court, or no remedy will be provided, or it is non-justiciable, whichever way you prefer to express it. In one case that operates and in the other case it does not operate.

McHUGH J: Can I add to that that this is the real difficulty I have with your acceptance of Phillips v Eyre living with 118 on the construction that you want to give to it. The whole theory of Phillips v Eyre is that the court of the forum enforces an obligation of its own creation in respect of an act done in another jurisdiction which would be a wrong done in the jurisdiction of the forum. So the theory underlying Phillips v Eyre seems to me entirely contrary to the construction you want to put on section 118. I do not think you can have your cake and eat it. It seems to me it is either 118 or Phillips v Eyre or some modification of it. I do not see how they can live together.

MR BALE: I am saying they serve quite different functions, your Honour.

McHUGH J: I know you do.

MR BALE: One serves the function of determining whether or not you can sue in that jurisdiction, justiciability, however you like to call it, as his Honour the Chief Justice has pointed out, taking from the judgment - - -

McHUGH J: I know, but the first limb says you can sue in that jurisdiction because it is the law of this jurisdiction that has this particular content. It does not - when it says that, it is not enforcing the law of New South Wales if it is a Victorian forum, it is enforcing its own law. So 118 has nothing to do with it if you accept Phillips v Eyre. I do not see how the two can live together.

MR BALE: Because your Honour and I are talking about different things.

McHUGH J: Well, we must be.

MR BALE: We are contending that the right to sue is something quite different from the law to be applied when you sue. What we are saying is that - - -

GLEESON CJ: But if the condition of the right to sue is that it is actionable according to the law of the forum, that is a distinction without a difference, is it not?

MR BALE: It simply is saying if it is actionable according to the law of the forum, we would accept it. It is not saying that we will not apply the law of New South Wales if, let us say, Victoria is the forum where that is the law of the place where the tort occurred.

GLEESON CJ: But if you have to fulfil two conditions to give you the right to sue and the first condition enables Victoria to say "There will be no right to sue because we don't recognise torts of this kind", what has happened to the full faith and credit that is being attached to the law of New South Wales?

MR BALE: It has not arisen because it has not got to the stage of dealing with the tort. It is basically saying, "You go and deal with it in New South Wales where it occurred. We're not going to entertain suit in relation to it".

GLEESON CJ: That does not seem to give section 118 a very powerful operation.

MR BALE: What it does is it gives it an operation in any case in which there is an action outside the jurisdiction in which the tort occurred. It gives section 118 the operation that a court entertaining that action, having decided that it is appropriate to sue on whatever the tests are in that jurisdiction, it will apply the law which applied in New South Wales, which applied where the tort occurred.

GLEESON CJ: So your proposition amounts to this, that section 118 cannot force the door open but, if you can get your foot inside the door, then it can have an effect?

MR BALE: Essentially, once you have a trial, once you have a forum that is prepared to hear your case, that forum is going to be obliged to obey the dictate of section 118 and apply the law of, effectively in tort, the lex loci delicti. In doing so it will apply all aspects of the law both as to liability and as to quantum. In other words, in applying the law, whilst the forum may regulate the manner in which the right might be sued out, it cannot diminish or otherwise affect the right, and to deal with quantum of damages in a way which would diminish the right would offend, we would say, against section 118. Obviously, the court could apply its own practice and procedural rules because that would not be failing to give "full faith and credit" to New South Wales law that applied to the event which occurred. That is simply the forum itself dictating its own procedures. They are quite different things, in our contention.

McHUGH J: By the way, at page 45 in the judgment of Justice Deane, he records that the correctness of Breavington was formally challenged in some of the written outlines of argument.

MR BALE: Thank you, your Honour, I had missed that. I am sure I have read somewhere in a subsequent judgment that it had not been, but - - -

McHUGH J: There is no oral argument put in favour of it, but it was challenged in the written submission, for at least - - -

MR BALE: I should have remembered, I think I was there, but I must say I do not - - -

McHUGH J: You probably challenged it.

MR BALE: I think the argument I was directing then was a little bit different from today's arguments, your Honour.

McHUGH J: Yes.

GAUDRON J: But that raises the question, what did Breavington decide, in any event, other than that the lex loci delicti applied?

MR BALE: The effect of the majority judgment in Breavington, we would contend, was that the lex loci delicti applies, obviously for a variety of reasons. I think there were three quite disparate judgments delivered there, but that was the effect of the judgment in Breavington. As I understand it, the effect of the judgment in the two subsequent cases was that the lex fori applies.

GAUDRON J: No, I do not think that is right.

MR BALE: That is my understanding of them, your Honour.

GAUDRON J: Exactly, this is an area of the law where all sorts of assumptions appear to get overlaid at various stages. It goes back to what I put to Mr Walker this morning. The only purpose of a double actionability rule of the kind required in Phillips v Eyre is if the lex loci delicti applies. It serves no purpose if it does not apply. But in some way, somewhere down the track between The Halley and Chaplin v Boys the assumption grew up that it was the forum law that applied. Then in what was held in Breavington was that delicti applied. What was conceded in McKain v Miller was that the lex loci delicti applies.

MR BALE: That is why I had said earlier to Justice McHugh that I - - -

GAUDRON J: But the question was whether the law in question was procedural or substantive. Same question in Stevens v Head, as I understand it. Nobody has ever said in this Court that there is no role for the lex loci delicti. All they have said is it does not apply to procedural laws.

MR BALE: That is the strict ratio both of McKain and Stevens, because limitation provisions and rules relating to damages were successively held to be part of the lex fori and, I think I am right in saying, that in neither of those cases did anyone hold Breavington expressly to be wrong, but certainly I would submit that both of those decisions have been widely interpreted - and that is another good reason, I suppose, for this Court to revisit it and making its position quite clear - as involving that the lex loci delicti did not apply and the lex fori applied on substantive issues, as well as in relation to procedural matters.

I am just looking at the judgment of Justice Dawson, for example, in Gardner v Wallace [1995] HCA 61; (1995) 184 CLR 95 at page 98, with which your Honours are familiar, and that certainly was the view that his Honour expressed in that case.

GUMMOW J: Which view is that?

MR BALE: It is in 1994-95, your Honour.

GUMMOW J: Yes, but which view do you say his Honour was supporting?

MR BALE: Supporting the view that the lex fori applied both to substantive and to procedural law. It is at the paragraph at the top of page 98, your Honour, starting:

The effect of section 5 of the Choice of Law (Limitation Periods) Act is not entirely clear.

Does your Honour have that?

GUMMOW J: I see.

MR BALE: And then towards the bottom of that paragraph.

GUMMOW J: Yes. But you would say that the Solicitors-General who got together and drafted section 5 of the Choice of Law (Limitation Periods) Act got it right, were proceeding on the right assumption.

MR BALE: Well, his Honour certainly was of the view that it was wrong and that States had proceeded on a misconception as to the operation of McKain v Miller and Stevens v Head.

GLEESON CJ: But relating that passage to the circumstances of this case, and the decisions of the courts below against which leave to appeal is sought, all that the courts below have said, as I understand them, is that in order to sue in the Australian Capital Territory Supreme Court for something that happened in Queanbeyan, you have got to show that it is a tort according to the law of New South Wales and a tort according to the law of the Australian Capital Territory. The reason why the legislation of New South Wales about modified common law damages is relevant is that somebody wants to argue that that has substantive effect, which produces the result that one of the two conditions stated in McKain v Miller is not satisfied, and that argument was rejected on the ground that those two conditions are only about substantive provisions, not about procedural provisions, and this one is procedural.

MR BALE: Our contention here is, of course, that any law which deals with the quantum of damages and affects the quantum of damages affects the right and it does not just deal with the pursuit of the right but it affects the right itself and is therefore substantive, not merely procedural.

GLEESON CJ: But what has section 118 to do with any of that?

MR BALE: Because section 118, we would contend, is saying that all the parts of the law that relate to the tort must be applied. That is, not only the law that determines liability but that part of the law which determines quantum, and therefore a statute which bears on the quantum which is recoverable is picked up by section 118.

GLEESON CJ: Is that another way of saying even if that law is properly characterised as procedural, the distinction between substance and procedure is rendered irrelevant by section 118 and the ACT Supreme Court is obliged by section 118 to apply the modification of damages provisions of the New South Wales statute, even if they are only procedural?

MR BALE: That is not how we would put it, your Honour. We would put it as saying that a law which bears upon the right compared with the way in which the right might be pursued is part of the substantive law. The law which deals with pure procedures, that is the manner in which the right might be pursued, is a procedural law and each jurisdiction is at liberty to determine how its courts are going to allow rights to be pursued - - -

KIRBY J: That is a little complicated in this case because, instead of the New South Wales Parliament saying that no damages shall be recovered over the sum of X, it said no court shall award and therefore on one view you can give full faith and credit to the New South Wales law in the ACT by saying, "Well, we note that that is what they say in New South Wales, `directed to the court', which is the New South Wales court, but we can give that full faith and credit but it does not speak to us".

MR BALE: Your Honour, that is the difficulty, I think, that others on the Bench have adverted to earlier in the argument. I recognise that as a wrinkle in this case and our submissions are put on the issue of principle, not so much on how that principle needs to be applied to the somewhat difficult wording that the context of the various provisions of 151F, 151G and 151H create and it is unhappy wording whichever way one addresses it, because certainly one argument that would be open is it speaks - 151F, I think that is - to the courts of New South Wales by reason of the relevant interpretative provisions and not to courts elsewhere.

GUMMOW J: Are there not a whole lot of cases which assume the contrary in this field, that when the law is translated across from the lex loci delicti to the forum that the necessary adjustments are made?

GAUDRON J: Certainly that seems to be the premise upon which section 80 of the Judiciary Act applies where you are in matters of federal jurisdiction including, if you look at what was decided in Mewett, that the extension powers of limitation periods which were limited to State courts were transmuted so that the Federal Courts or courts exercising federal jurisdiction - - -

MR BALE: Your Honour Justice Gummow was talking about 151F, I assume?

GAUDRON J: Yes, but it is the same principle.

GUMMOW J: It is the same idea.

MR BALE: Yes, there are, your Honour. There are cases, I think - - -

GUMMOW J: Otherwise none of this would ever work because laws - you are talking about statutes and they are going to be applying to acts, matters and things of the law of the place of the delict and that will be it. You will never have any relevant choice of law rule. It will never work.

MR BALE: We do not seek, in our submission, to address the operation and the proper interpretation of section 151. As I say, we are seeking to address the in principle issue and all we say in relation to that is that we perceive that there may be some interpretative difficulty but it is not one that we seek to address.

Your Honours, could I simply, very quickly, because of the question raised by his Honour Justice Kirby earlier to Mr Walker, particularly, mention very briefly that there are a number of indicia that suggest that section 118 was perceived not to have a purely procedural effect at the time that the Constitution came into force.

KIRBY J: Do not assume that I at least take the view that one looks at the Constitution in 1900. I mean, I do not think the Court did that in Sue v Hill.

MR BALE: No. I would not for a moment, but your Honour did raise the question, what was the history of the Constitution.

KIRBY J: Yes, and that takes you back before the Constitution. That takes you back to the United States Constitution.

MR BALE: It does and I simply wanted to draw attention, firstly, to the analysis that I have mentioned of his Honour Justice Deane in Breavington of the earlier United States cases. I want to suggest that it was quite clear, if one looks at those cases and one looks at the cases that are cited in Quick & Garran, that reference the immediate history to clause 118.

GUMMOW J: But it does not come just from the United States. It comes, I think on one view of it, from cases like the Duchess of Kingston's Case. There has been a trial for bigamy of this woman in the Ecclesiastical Courts. The question then, what happens in an action in the Court of Queen's Bench? To what extent do they give full faith and credit to the Ecclesiastical Court's decision? And the answer given was, "We do not if it is fraud." So I think it goes back a long way and I think it goes back to England where there was a series of concurrent courts with various jurisdictions.

MR BALE: Yes. I am obliged to your Honour for that. I do note from most of the things that I have seen written on this section in any event - - -

GUMMOW J: Well, someone should have a look at (1776) 20 St Tr pages 355, 400 and 513.

MR BALE: I am obliged to your Honour for that.

GUMMOW J: That is where the Americans got it from, I think. It comes from England, I think.

GLEESON CJ: Mr Solicitor, is that a convenient time?

MR BALE: Yes, your Honour.

GLEESON CJ: We will expect the parties to agree between themselves on a division of time for tomorrow and if they have any difficulty making such an agreement then we will be pleased to mediate. We will adjourn until 10.15.

AT 4.17 PM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 2 DECEMBER 1999