Regie National des Usines Renault SA and Anor v Zhang S9/2001 [2001] HCATrans 336 (9 August 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S9 of 2001

B e t w e e n -

REGIE NATIONAL des USINES RENAULT SA and RENAULT AUTOMOBILES SA

Appellants

and

FUZU ZHANG

Respondent

GLEESON CJ

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 9 AUGUST 2001 AT 11.07 AM

(Continued from 8/8/01)

Copyright in the High Court of Australia

GLEESON CJ: Yes, Mr Margo.

MR MARGO: May it please the Court. My learned friend agrees that he will not complain if I have not been sat down prior to 3.45 and I have agreed that I will try and sit down at 3.30. The respondent has more ground to cover than the appellants in this matter and it will be difficult to get to everything in oral submission. That was foreseen when a chamber summons was taken out seeking leave to put on more extended submissions. I mention that matter only because we do place more reliance on our written submissions than simply as foreshadowing what is to be said in oral argument and also to pray for the Court's indulgence for making more reference to the written submissions in my presentation than might otherwise have been necessary.

As far as foreign law is concerned, I raised an unnecessary difficulty last night in response to your Honour Justice Callinan's question. There is authority that if an expert witness is referred to sections of a Code or law the court may look at those sections but may not look at other sections without the assistance of experts or hearing from counsel.

CALLINAN J: What is that case?

MR MARGO: It is Concha v Murrieta (1889) 40 Ch D 543 at 549 and the bit about not doing own researches is Bumper Development Corporation Ltd v The Commissioner of Police of the Metropolis (1991) 4 All ER 638 at 646, a decision of the English Court of Appeal.

CALLINAN J: Mr Margo, just in relation to that - this may seem an elementary question - but the presumption in the absence of evidence to the contrary that the foreign law is the same as the local law, does that presumption include the statute law of the forum, the local forum? You might give some time to think about that.

MR MARGO: My impression is it does, your Honour. Where the presumption is made about continuing law in a settled country or the like that would exclude any assumption that that law includes amendments made by statute in the forum but as applied in an everyday case it would include all the local law is our understanding.

CALLINAN J: Including, or example, contribution legislation in New South Wales.

MR MARGO: Yes.

CALLINAN J: So the presumption in the absence of evidence to the contrary would be that French law permitted obliged courts to make an apportionment in the case of contributory negligence. You may want to think about that.

MR MARGO: That is our understanding, your Honour, that it applies for all purposes - certainly in New South Wales.

KIRBY J: Mr Margo, you will remember at the end of yesterday I asked Mr Walker, after we had gone and spent so much time working through Phillips v Eyre, about the conceptualisation of the issue and rather than simply looking at it as a matter of legal authority because apparently this Court has never itself embraced Phillips v Eyre specially in an international tort. Do you, first, contest that this Court has not embraced and accepted and applied Phillips v Eyre in an international setting, and, secondly, do your written submissions anywhere indicate what other countries of the common law world, other than England, which we have spent a lot of time looking at, have done in vis-à-vis Phillips v Eyre in a context like this? South Africa, for instance, and Malaysia and Singapore, or other countries, have they departed from Phillips v Eyre or do they still follow it? If they still follow it that may well be a reason why we should.

MR MARGO: I am not able to assist your Honour on the countries to which your Honour has just referred. In England it has been partially abolished.

KIRBY J: I know that and we have spent so much time on England that I am pretty aware of that, but what about Ireland? What about other common law countries? I mean, England is now just one jurisdiction.

MR MARGO: The Law Reform and Scottish Law Reform Commission reports contained recommendations relating to the extension of the reform to Ireland. My understanding is Dr Bell may be able to assist that, in fact, it has been implemented also for Ireland. I do not know about the Republic of Ireland.

KIRBY J: I saw it in the footnotes - I have not yet followed up of Professor Juenger, Professor Nygh and so on and I will look at those, but sometime I would be grateful if somebody would give me some help on what has happened to Phillips v Eyre in a context like this in other common law or semi-common law countries than England and Canada, because we know Canada.

MR MARGO: We might be able to give your Honour some assistance later in the day. I am not able to as I stand here at the moment.

KIRBY J: South Africa might be interesting.

MR MARGO: Yes, your Honour. It was not referred to in Lubbe, although that case was - - -

KIRBY J: I know, but we should be looking at other jurisdictions, not just England.

MR MARGO: Yes. The pleading matter that your Honour Justice Gummow raised, we would agree with the appellants that the Court should not base its decision solely on a pleading matter. The pleadings - - -

GUMMOW J: What else is it? There is no trial.

MR MARGO: There may be some doubt in a tort context the extent to which the parties can, by convention on the pleadings, decide the law. Your Honour would know more about that than ourselves, but there is also the possibility - that is my main purpose for mentioning this point - that the statement of claim would be amended. It has not been so far. May I say on the pleading point that paragraph 16 to which your Honour referred, one reading of it - and I am not able to assist further on what was intended - is that it is relating to the paragraphs which follow it - that is at page 5 in the first appeal book - that 16 is to be read with 17 through to 20 and that the law that the pleader was intending to refer to is that referred to in paragraph 17 and following, and I simply draw your Honours' attention to the fact that it is not simply a quasi-contractual relationship that is there pleaded, but it is either:

a quasi-contractual relationship and/or a relationship which, as a consequence of the operation of the governing law, gave rise to -

direct obligations from the - - -

GUMMOW J: Yes, I read 17 as referring back to 16, when it uses the phrase "operation of the governing law", in line 3 on 17.

MR MARGO: Yes. As your Honour pleases.

GUMMOW J: That is what I understand the pleader was doing. And then I understand 20 as relating back to 17, and thus to 16.

CALLINAN J: Mr Margo, can I ask you one question. Is New Caledonia part of France? It is not a colony, is it? It is part of France?

MR MARGO: Your Honour, that is an issue on the appeal. The evidence was that it is a territory of France. There was an affidavit which referred to it as a department, but that was not from an expert witness. The experts called it a territory, and that was as far as it went. It was not explained what that status was internationally, or what consequences it had for the legal system. It is unchallenged evidence that the three provisions of the code to which your Honours were taken yesterday apply in New Caledonia. There is no evidence as to whether decisions of the Cour de Cassation, or other European law that might affect application of those provisions, apply in New Caledonia or not. The matter is completely void of any detail, and it is one of our submissions that that is a matter that ought to have been taken into account in deciding what weight to give the possible application of French law.

GAUDRON J: Is there not an affidavit, though, saying that French law applies?

MR MARGO: French law applicable to - - -

GAUDRON J: In New Caledonia. The reference in the affidavit is to the Code Civil, is it not?

MR MARGO: It is to three provisions of the Code Civil, and it is said, by way of preface, that the law relating to road traffic accidents is the same in New Caledonia as in France.

GAUDRON J: Yes. And that a judge could come from France, if necessary.

MR MARGO: Yes. And there is no evidence that a judge could go the other way. We have collected the evidence for your Honours in our submissions; it is under contention 2 in our notice of contention. I will come to that in a moment. But we certainly dispute that it has been established that New Caledonia can be treated for all purposes as a part of France, or that the two jurisdictions can be equated. We do that as a matter of legal system, but also the geographical separation and its impact on the considerations the Court has to have when considering a clearly inappropriate forum.

It is also clear evidence, your Honours - Justice Gaudron, that the appellants had to submit to the jurisdiction of the courts of New Caledonia, and it has not been contested that they have no legal presence there. This is a Voth case, in the respondent's submissions, not a Phillips v Eyre case; and we respectfully draw your Honours' attention to the fact that no part of the statement of facts in the respondent's submissions - that is from paragraphs 8 through to 36 - has tested by the appellants' - - -

KIRBY J: Could I just interrupt to say, on those last points that you made, that you quite properly draw our attention to how this rule operates in your case, because that is a nice, concrete case. But we have to think of the rule as it might operate in Uzbekistan, or in Azerbaijan, or in other places - that an accident happens there, and then the person who may not even be a resident or citizen comes to Australia, and because they suffered continuing damage in Australia, have the damage here, you see. So whilst it is important to concretize the issue by reference to the sorts of considerations you have mentioned, the rule must apply in all sorts of countries whose legal regimes may not be evil, but just unknown, and who have defendants who say, "I think you should require this case to be dealt with in my country, because that is where it happened, and that is the law that I know".

MR MARGO: Undoubtedly. We do rely heavily on the consequence of the pleading rule in New South Wales in this particular case. I appreciate that your Honours have to grapple with wider policy issues. I think that is what I was trying to address when I understand your Honours referred to literature on foreign law for policy purposes yesterday, as opposed to its being treated as evidence in this case.

I will come to Phillips v Eyre, but the submissions I primarily wish to put are on the notice of contention, and against the possibility that I will run out of time I wish to go to those first unless your Honours direct me to do otherwise.

GLEESON CJ: No, you go in your own course.

MR MARGO: May I just take your Honours to some of the facts. I will not read them all but in paragraph 8 of the respondent's submissions, matters of common cause of, and they include Phillips v Eyre, they include jurisdiction, and they include effective service. There was no challenge to service out of the jurisdiction in this case. The appellants are large multi-national corporations. I have mentioned already they have no connection whatever or legal presence in - with or legal presence in New Caledonia, and they submitted to the jurisdiction.

As far as the connecting factors with New Caledonia are concerned, there is no evidence that the vehicle any longer exists; the state of the roadway as it was at the time of the accident no longer exists; the geographical contours have been established by expert survey evidence, and there is only one witness in New Caledonia who saw anything of the events of the accident.

There are two other witnesses who saw the respondent's car before the accident as it went over or left the roadway. There is only one eyewitness to the rolling of the car before it went over the cliff and the only other two eye witnesses to the accident are the respondent and his son, who are in Australia.

In paragraph 19 we refer to what the court below characterised as our failure to warn case, and we have said in our submissions that may be too economic a description, but there is no cross-appeal on the decision of the court below or the primary judge to disregard that matter.

We refer to it only in this context, that your Honours would expect that as the pleadings develop and more evidence becomes available, that could become a relevant area. In particular, for example, Lubbe's Case, to which I will come in a little detail. The point agitated there was the responsibility of a parent company in England for the conduct of its subsidiaries in South Africa and a question of what law should be applied to determine that question. The evidence here is that Renault had a subsidiary and was distributing through its subsidiary in South Africa at the time of this accident and that that subsidiary was deregistered only after the accident.

GAUDRON J: In Australia?

MR MARGO: In Australia. That is referred to in paragraph 20 and these paragraphs have references to the judgment. So we accept that Renault had no legal presence here as that concept is analysed for purposes of domicile and the like but we submit that it is, nonetheless, a relevant factor for clearly inappropriate forum considerations that Renault had experience in this jurisdiction as a large multinational. It has a long history of distributing in Australia and that would not be a wholly unfamiliar jurisdiction, New South Wales, to Renault, as France or New Caledonia would be to Mr Zhang.

Your Honours are aware from comments which you made in debate yesterday the fact that there is no French or European standard relevant to the design defect of which we complain in this case. The primary judge found, and it is not challenged, that the experts on that issue are likely to come from Europe or North America and all our experts on that issue come from Australia. Nobody suggests that anybody in New Caledonia would have anything to say about that matter.

Paragraph 25, your Honour Justice Callinan, that is the evidence on the availability of cross-examination in this case, but we lay not great stress. Although the Court refers to availability of cross-examination, we lay no great stress on cross-examination; we do lay particular stress on discovery, the evidence to which is collected in paragraphs 26 through to 29, and I will come to that in the context of the test and the discussion of legitimate juridical advantage.

In paragraph 30 we refer to another matter on which we would lay great emphasis in the appeal and that is the plaintiff's financial circumstances. The fact that he has, in New South Wales, contingent fee arrangements, and there is an unchallenged finding that without those arrangements he could not prosecute his action even in New South Wales and the judges found that he needs financial assistance to prosecute, it is a difficult case. There will be complex engineering issues and questions of damages. It is not something that an unrepresented litigant could run on his own with any prospect of success and certainly Mr Zhang, whose mother tongue is Chinese and for whom English is a second language and the evidence is, speaks not a word of French, would have a hard - - -

GAUDRON J: Is that in evidence?

MR MARGO: Certainly, your Honour; I would not be putting it - - -

GAUDRON J: Yes. It is just that I would not make that assumption.

MR MARGO: No, it is in evidence or it is an undisputed fact for purposes of determination of appeal.

GAUDRON J: Yes, thank you.

MR MARGO: The matter was dealt with at first instance in an attempt to comply with the Court's injunction in Voth. All the evidence was let in and no Jones v Dunkel points were to be taken, but anything could be said in submission about it.

GLEESON CJ: What you say seems to throw into relief the importance that the primary judge placed on the system of law by reference to which this case will be determined, because I gather you to say that this is a case in which, if I can put it bluntly, it suits the plaintiff for a variety of reasons to litigate in New South Wales. The expert witnesses on either side will come from either Australia or North America and as far as the defendants' convenience is concerned, it is not apparent that there is any more inconvenience involved for them in litigating in Sydney than there is in litigating in New Caledonia.

MR MARGO: Precisely so, your Honour. Indeed, the evidence is stronger, that there is an unchallenged finding of the primary judge that Renault can have a fair trial and obtain proper representation and run its case fully in New South Wales.

KIRBY J: Except that in New South Wales discovery is available and that might be absolutely critical in this case and that cuts both ways. It is, as I understand it, not available in New Caledonia and that is a juridical advantage which the defendant loses by reference to the move from the place where the tort happened to the place where simply the plaintiff is suffering some damage.

MR MARGO: I will come to that in a bit more detail, your Honour. Our submission on that is that, yes, one might think that would be the general case that the advantage to the plaintiff is a corresponding disadvantage to the defendant and the learning in Spiliada which was incorporated by Justice Deane in Oceanic is to the effect that the Court should not pretend to use those factors in a decisive way. In this case, however, my learned friend told your Honours yesterday Renault has no interest in not disclosing the full facts on trial and it is our submission that there is no corresponding disadvantage, a multinational corporation having its design challenged, being submitted to discovery in the State. It is not a case where they are seeking to evade discovery.

Now, I know we did make some point about the fact that at the interlocutory stage they had refused to give us even test results to which their affidavits had referred, but in light of my learned friend's comment yesterday that is a submission we feel entitled to put to the Court, that there is, in this case, no corresponding disadvantage. Certainly, there is not one tittle of evidence in any of the affidavits filed on behalf of the appellants referring to any problem that they might have in coming to Sydney, as opposed to New Caledonia, or staying in France, for that matter.

It is put, as your Honour Justice Hayne yesterday put it, on the bare inferences to be drawn form the governing law that a French court - and it is left unsaid whether it is a court applying French law as in New Caledonia or in France - would be better placed to apply French law. It is our submission that however that was dressed up yesterday it remains an allegation of the bare fact of governing law and is insufficient in the facts of this case to make New South Wales inappropriate.

Paragraphs 31, 32 and 55 of our submissions collect the crucial findings of fact on the balance between plaintiff and defendant. Your Honours will see the finding in 31(d) is the one to which I have just referred. I will not read through the others.

GAUDRON J: Mr Margo, it just occurs to me - and you may like to say something about it - did anybody really go through the two-step approach that is mentioned in Spiliada?

MR MARGO: It is our submission there is no two-step approach in our law.

GAUDRON J: Well, I am thinking if you look at the Rules, maybe there is. First of all, the ground of inappropriate forum has to be made out and that there still remains a residual discretion which may take into account balance of convenience in the particular case.

MR MARGO: Your Honour, that is a conceptual approach which may achieve and will achieve the same result in most cases.

GAUDRON J: Yes.

MR MARGO: It will be my submission and I wish to take your Honours - - -

GAUDRON J: But I am just wondering if, either at first instance or in the Court of Appeal, that approach was taken.

MR MARGO: Your Honour, no, it was not and it was our strong submission to the Court that that is not the way the test is to be applied and that one cannot understand the concept of legitimate juridical advantage if it is applied in that way.

GAUDRON J: No. I am talking more generally than legitimate juridical advantage. I am talking this. Once you had clearly inappropriate based in notions of oppression and vexation and abuse of process, then it would seem to follow fairly automatically that there is little room for a residual discretion notwithstanding what was said in Oceanic and in Voth. Some, but not a lot of room. When you talk about inappropriate, there may be room for a wider discretion which, on the matters you have mentioned, might well favour your client independently of the "inappropriate forum" test.

MR MARGO: It is our submission, your Honour, that before one gets to a provisional finding of clearly inappropriate forum, one has to consider the advantages and disadvantages on both sides.

GAUDRON J: I know that.

MR MARGO: So any question which my learned friend presented as a second-stage inquiry is necessarily involved in the balancing act to which Justice Deane referred in Oceanic.

GAUDRON J: Yes, but as a matter of syntax the rule does seem to provide for a residual discretion even if it is found that it is an inappropriate forum.

MR MARGO: Yes, may I come to that when I go to Oceanic and Voth?

GAUDRON J: Yes.

MR MARGO: Then at paragraph 32, we refer to the physical disabilities and disadvantages of this particular respondent. We submit that that is also a matter to be taken into account. Then in paragraphs 34 to 36, which conclude the, we submit, agreed facts, or not disputed facts, we refer to the very long delay that has already occurred in this matter. We do not blame any party but the fact that proceedings were commenced in February 1994 and that we are still to receive a defence in any action is something to be taken into account when a disabled person is seeking compensation and we refer later to international covenant has to say about delay.

If I may go then to Voth and the test. Well, before I go to Voth, I must address the rule. Our submissions about the rule are contained in footnote 18 on page 10 of our written submissions and in a nutshell what they come down to is this, that the application in this case was made under rule 11.8 which does not contain the words that might be thought to relax the common law test; was not under Part 10 rule 6A which bears the subheading - I will take your Honours to that in our bundle. It is at page 13. Your Honours looked at these yesterday. I will not spend long on them.

KIRBY J: This is against you, is it not? This is against you in the sense that "clearly inappropriate" is a hurdle for the appellant to overcome whereas the "simply inappropriate" is a much softer test.

MR MARGO: Well, we submit it is not. We submit that the single instance decisions in New South Wales are well arguable and that, in fact, all that was intended to be referred to here was a forum inconveniens test as interpreted at common law.

GUMMOW J: Was there any rule talking about inappropriate forum or forum non conveniens in force at the time of Voth, so far as you know?

MR MARGO: Your Honour, there is a reference to a rule and the application was obviously made under a rule. We have not been able to locate that rule. Your Honours asked for it yesterday. There certainly was - we need access to something like time TimeBase. I do not know if my learned friends have it.

KIRBY J: But where this Court uses the word - - -

GAUDRON J: There was a rule which permitted, as I recollect it, the setting aside of service.

GUMMOW J: That is right.

GAUDRON J: But there was no specification of the grounds upon which it was to be exercised.

GUMMOW J: That is as I understand it. So it was just left on Logan v The National Bank of Scotland and the cases that followed that which introduced the forum non conveniens ideas as part of inherent jurisdiction..

MR MARGO: Yes. Well, your Honours, our submission is - - -

GUMMOW J: If I am wrong about that, I need to see the earlier test if someone can find it in due course.

MR MARGO: No, certainly, and it is something we should provide for your Honours and perhaps with leave we can provide it if we find it after this.

GUMMOW J: Yes.

MR MARGO: But certainly, your Honours, our submission is that this was not an application to set aside service. It was not decided on that basis. It was decided under Part 11 rule 8(h).

GAUDRON J: But rule 6 specifies the grounds upon which an order may be made under Part 10 rule 8.

GUMMOW: Is what Justice Gaudron said to you not what we said in Agar about the interrelationship between 6A and 8?

MR MARGO: Yes, your Honour. I am not sure if what you said in Agar prevents me making the submission, but I will try and make it, that on the face of the rule, rule 6A is self-contained. Although it does refer to Part 11 rule 8, it does so with prefatory words of this kind:

(1) The Court may make an order of a kind referred to in Part 11 rule 8 . . . on application by a person -

et cetera, and then subrule (2) of 6A -

Without limiting subrule (1), the Court may make an order under this rule on the ground -

(a) that the service of the originating process is not authorised by these rules; or

(b) that the Court is an inappropriate forum -

and when one goes to Part 11 rule 8 itself there is no cross-reference to 6A.

KIRBY J: In the report of Voth 15 NSWLR 513 in the Court of Appeal the headnote says that:

In circumstances where the plaintiffs who had invoked the jurisdiction under Pt 10, r 1(1)(e) -

but I cannot find that subrule or paragraph set out in the reasons, so it is a matter of searching that - - -

MR MARGO: No, 1(1)(e) is the long arm jurisdiction for damage being suffered within the jurisdiction, your Honour, that is the - - -

KIRBY J: I see, so that is simply the foundation for jurisdiction.

MR MARGO: Yes. I am going from recollection here, but the rule was not actually nominated by number in Voth. That is as much as we can do on construction. We rely also on the fact that this - - -

GAUDRON J: Is it your submission that - then let me clearly understand that - Part 11 rule 8 is independent of Part 10 rule 6A?

MR MARGO: As a matter of black letter construction, that is the submission.

GAUDRON J: Rule 6A are the grounds to be applied if you are making an order of a kind but not an order as specified in 11.8.

MR MARGO: You might be able to and in most cases perhaps you could go under either rule, but it is - - -

GLEESON CJ: Is it the case that Part 11 rule 8 was there before Part 10 rule 6A?

MR MARGO: I cannot answer your Honour on that either.

GLEESON CJ: Perhaps you could check that.

MR MARGO: Yes.

GAUDRON J: I think 11 might have been there when Voth was decided.

MR MARGO: It may have been the 11 rule, or an equivalent of 11, that Voth was decided under.

GAUDRON J: But there was no 10.6A?

MR MARGO: Your Honour, our next submission is this. If the legislature intended to depart from the common law, clear intendment would be required as just a basic rule of construction. The fact that this rule was introduced 15 days before the decision in Oceanic suggested it was not seeking to distinguish "clearly inappropriate" from "inappropriate" and that the omission of the word "clearly" - "clearly" had not sprung to the prominence which Oceanic subsequently gave it. The intention was to distinguish a test of inappropriate forum from a test of more appropriate forum. The court may have regard to forum inconveniens, as opposed to forum conveniens. That is an open - - -

GLEESON CJ: I would not be surprised if the intention was simpler and that was just to use the English language.

GUMMOW J: There are various other provisions in these rules in which Latin was banished.

MR MARGO: Yes, it is a great pity.

GUMMOW J: It was, but it always gives rise to debate.

KIRBY J: I do not agree.

MR MARGO: I appreciate that, your Honour, but I was raised in a Roman Dutch jurisdiction and I have yet to come across a language such as - - -

KIRBY J: Well in that jurisdiction they speak three languages, or now, 12, I think. We do not have that confusion; English is a better thing for us to stick to.

MR MARGO: Density of connotation and conceptual precision, but I accept, of course, and understand your Honours' concern, that people should understand the law that is applied to them.

GUMMOW J: Well they do not. That is why we are having the debate, they do not.

GAUDRON J: Least of all when they are written in plain English, Mr Margo, in my experience.

MR MARGO: The more words one has to use, the more can be played with. Finally, your Honours, I do not know what real comfort we can draw from this, but nobody in New South Wales has yet suggested or no judge has yet found, that there is any difference between inappropriate forum and clearly inappropriate forum; that may be a matter to which your Honours pay some respect. I appreciate it is a rule, but it is a rule relating to the procedure of the courts of New South Wales.

GAUDRON J: Well, I suppose there is an argument it is to be interpreted in the light of the common law as developed, given that it is a word of generality. No precise meaning.

MR MARGO: Yes, we would adopt that submission.

GAUDRON J: That it is to be interpreted in the light of the common law asset has developed.

MR MARGO: It is certainly in Cigna; your Honours have a copy of that case. There were three decisions, first instance decisions, I think they are referred to in the notes in Ritchie to this rule. Your Honours have copies of each of them. Your Honour should not search in Cigna for any reference to the rule. It is included because experienced counsel in that case, Mr Bathurst and Mr Douglas, took every point they possibly could and it never occurred to anybody to argue this one.

KIRBY J: But it is true that sometimes points are not seen. Does Agar deal with this point, because against you, it seems to me, is that this Court said "clearly inappropriate", the rule was changed and the rule took out the word "clearly".

MR MARGO: No, your Honour, with respect, that is not the sequence. The rule was introduced and then this Court said, "clearly inappropriate".

GLEESON CJ: "Clearly" first came into the discussion of this subject - - -

MR MARGO: In Oceanic.

GLEESON CJ: - - -after this rule was promulgated.

MR MARGO: Indeed. We would have a greater problem if the sequence of events was as your Honours just put it, but I am indebted to my learned friends. I do not myself know, but we were told yesterday that the rule was introduced 15 days before the decision in Oceanic was published.

GLEESON CJ: Let me get it right: the sequence of events was this rule was introduced; then this Court gave its decision in Oceanic; then this Court gave its decision in Voth.

MR MARGO: Yes, that is my understanding.

GLEESON CJ: Until this Court gave its decision in Oceanic, had anyone ever used the expression "clearly inappropriate" in this area of discourse.

MR MARGO: I put it on this basis, your Honour: I am not aware of it, but I am certain the expression has not come to prominence was the way I put it. I am sure it had been used somewhere, or may have been used somewhere.

KIRBY J: Well, was it not introduced by this Court in order to distinguish clearly, if I can use that adjective, the position this Court was adopting, vis-à-vis, the English Spiliada test?

MR MARGO: It would have been sufficient for this Court to say "inappropriate". It is our submission the word "clearly" added the other bits about prima facie and the starting point, and the extreme caution with which a stay should be granted. Your Honour may be right, this is not an area, even in the Rules of tremendous precision.

May I then go to Voth. We put this in various way in the court below. We did not dispute that the primary judge had identified a decision which contained the correct test. We submitted he had either then not applied that test, or misapplied it. At appeal book page 222, that is where the primary judge states what he understood Voth to require, and it is at the foot of that page, line 50:

In Voth at 571 the High Court held that the overall task of the court is to exercise its discretion "based upon the competing connections of the respective forums with the subject matter of the proceedings."

It is our submission that that is an inadequate encapsulation of the Australian test, and it is significant if your Honours would look higher on the page before leaving it, that the authorities his Honour Justice Smart referred to included Voth and Henry. They did not include Oceanic, although, it will be our , one cannot understand what was said in Voth without referring to Oceanic, and they do include Bankinvest v Seabrook, which is a case in which the Court of Appeal decided that for purposes of the cross-vesting legislation, a Spiliada-type test should be applied, not Oceanic, and what Bankinvest is doing sitting with those authorities is unexplained.

GLEESON CJ: Bankinvest was a decision of Justice Rogers?

MR MARGO: It was a decision of the Court of Appeal in which Justice Rogers gave the main judgment. I think the other justices, I think Justice Kirby - - -

GLEESON CJ: Chief Justice Street, and myself.

MR MARGO: Yes. There is a reference to both Oceanic and Spiliada, but for purposes of the statutory test as to when you send a matter to another State within the Federation or Territory, there is a phrase "interest of justice", but certainly it was nothing like the test in Voth or in Oceanic, and much more like the sort of case of which this judge would have had experience, and I say that because there is at least one reported case where his Honour went into cross-vesting considerations, and that I think is Blake v Norris, but I do not have the reference now.

I must get to Voth and Oceanic. I know your Honours have been taken to these cases often but Lord Salmon in MacShannon sounded the warning that if one started liberalising the meaning of words "vexatious" and "oppressive" there was a risk of their being emasculated and losing any residual meaning and one needs constantly, in our submission, to refer back to the origins of the Australian test in Oceanic and as referred to in Voth to be sure of not slipping ineluctably towards a Spiliada test.

At page 550 in Voth the majority Justices referred to the observation of your Honour the Chief Justice then in the Court of Appeal and to the citation in Oceanic Sun by Justice Deane of the passage from Maritime Insurance and they referred to it with approval. Then at page 551 they referred to the reasons of your Honour Justice McHugh in the Court of Appeal and again to Oceanic and that the appropriate test was that stated by Deane in Oceanic as accepted by your Honour Justice Kirby in the Court of Appeal.

At the bottom of page 552 their Honours come back again to the authority of the Maritime Insurance Case and, of course, of the dicta in Logan v Bank of Scotland to which it referred and at the middle of page 553 their Honours said:

in Australia, the authority of Maritime Insurance has not been undermined by any comparable development -

to that in England which had gradually eroded Logan and your Honours have been through that development in a number of cases. Their Honours then quoted from the judgment of Justice Gibbs, as he then was, in Cope Allman and if I could just read part of that quotation to remind ourselves:

the question that I am bound to pose to myself is not simply, `Which is the more convenient forum?' The principles to be applied in such a case as this were laid down by the High Court in Maritime . . . At p 198 Sir Samuel Griffith, whose judgment was concurred in by the other members of the court, said -

and he then read a passage from Sir Gorell Barnes in Logan and that passage is:

"The court should, on the one hand, see clearly -

there is the word "clearly" -

that in stopping an action it does not do injustice, and, on the other hand, I think the court ought to interfere whenever there is such vexation and oppression that the defendant who objects to the exercise of the jurisdiction would be subjected to such injustice" -

Those two dual aspects Justice Deane later develops in Oceanic but Voth went back to the dual aspects and it is important for our argument that they are aspects of a single process because that affects onus. The two distinguishing features between Spiliada and Voth that we rely on are, firstly, this dual aspect and the weighing process that is involved and, secondly, that there is no shift of onus on the Voth test as there is in Spiliada.

Under Spiliada the defendant bears the onus to establish a more appropriate or most appropriate forum and once that is established the onus shifts to the plaintiff if he or she can to show reasons of justice why a stay should not be granted. But if the test is as Justice Deane said it was and as the majority in Voth affirmed, a single weighing process, it follows that the onus remains throughout, and there are statements to that effect in decisions of this Court, on the party seeking the stay.

GLEESON CJ: Could you just remind me, did the Court make a finding in Oceanic as to what was the proper law of the contract? I realise it held that the contract was entered into in New South Wales but did it resolve the question of whether the proper law of the contract was the law of Greece?

MR MARGO: Yes. That was the context in which your Honour Justice Gaudron said if it was arguable - there was an argument about whether the law of the forum would be applied to antecedent questions before one got to proper law of contract.

GAUDRON J: Yes. There was a question as to which law would determine whether there was a complete contract, it being one of those exemption clauses that are written.

MR MARGO: Your Honour took the view, as I recall it, formation questions might be determined by the law of the forum and one did not get to proper law of the contract until one had a completed contract.

GAUDRON J: Yes.

GLEESON CJ: I would have thought that if it were the case that the proper law in Oceanic was the law of Greece then the present case is an even stronger case against a stay of proceedings than Oceanic.

MR MARGO: Well, if there could be a stronger case, your Honour, that would - - -

GLEESON CJ: The plaintiff in Oceanic was not, as it happened, a resident of New South Wales, he was a resident of Queensland - - -

MR MARGO: I had not noticed that.

GLEESON CJ: - - -but he had suffered injuries whilst on an overseas trip and he was suing a Greek shipping line.

MR MARGO: Yes.

GAUDRON J: The contract had been entered into in New South Wales.

GLEESON CJ: It was complicated, but, yes.

MR MARGO: There was disagreement on where the contract was.

GLEESON CJ: Yes.

MR MARGO: Then at page 554 their Honours observed it is rather artificial to go all the way back to maritime but maritime was, nonetheless, affirmed. In isolation was the qualification. We would say the same in relation to Phillips v Eyre when we come to it. Then, the common factors in the judgments of Oceanic were collected by the majority in Voth at the bottom of 554. They add important glosses and qualifying considerations to the little extract which the primary judge in our case quoted from Voth. Then on the next page was the reference to the disagreement between Justice Brennan and other Justices in Oceanic about how strictly one should interpret the St Pierre vexations and oppressive.

Then your Honour Justice Gaudron followed Justice Deane with some qualifications about the impact of governing law which I will come to in just a moment.

GAUDRON J: I think I was the only one who dealt with that, really, in Oceanic.

MR MARGO: But your Honour was approved in Voth to the degree my learned friend drew attention to yesterday.

GAUDRON J: Yes, but it is the other side of the coin. If it is arguable that the forum law is to govern some aspect then you would take the view that you could not establish inappropriate forum. It does not take the point that if you prove that some other law governs then the domestic forum is inappropriate.

GLEESON CJ: Because if that were the case, the Supreme Courts in the States would be inappropriately exercising jurisdiction every day of the week.

GAUDRON J: Yes, it is only one side of the coin.

MR MARGO: Your Honour put that qualification in your Honours' judgment in Oceanic: that occasionally it would be a decisive factor, absent other factors.

GAUDRON J: When I said "where", the only connection - where you have nothing more than a State providing a procedural framework for somebody else's law.

MR MARGO: Well, the appellants might submit that this was such a case. But we would still say that because of the quality of the foreign law in this case, and there being no evidence of any important difference, there being no evidence of a specialist foreign tribunal that is used to this kind of case, that it is not a decisive factor. And it cannot outweigh all the other factors which the primary judge was so exercised about and gave such attention to, and which led him to find that, for all practical considerations, New South Wales was the best place to hold a trial.

GUMMOW J: Now, am I right in thinking you are not really upholding the Court of Appeal, are you?

MR MARGO: We have a notice of contention, your Honour.

GUMMOW J: Not upholding the reasoning of the Court of Appeal. What you are really putting to us, I suspect - and I am not saying it is the wrong way to do it, at all - but what you are really putting to us is that the primary judge should have exercised his discretion favourably to your side.

MR MARGO: We do support the judgment of the court below, and we submit that it has been misinterpreted by the appellants in their submission, oversimplified.

GUMMOW J: So you are going to persuade us that Thompson's Case is right, are you?

MR MARGO: No.

GUMMOW J: Well, is that not the fulcrum of their reasoning?

MR MARGO: No, the headnote in the Court of Appeal, we submit - - -

GUMMOW J: Do not worry about the headnote. I am worried about paragraph 45 of their reasons.

MR MARGO: I think 45 was the one about legitimate juridical advantage, where Justice Stein said that the argument in Thompson seemed to him to be persuasive, but it is clear from the judgment read as a whole that their Honours in the court below were not deciding whether or not Thompson was correct, in this case. They decided the matter, in our submission, on the weight which had been given to foreign law, if it was.

Now, it is not clear beyond dispute, but the submissions your Honour put, we believe, are well arguable. We make this - - -

GUMMOW J: It was paragraph 42 the one I immediately had in mind, lead into 43.

MR MARGO: I will deal with this now, as your Honour has raised it now.

GUMMOW J: Well, I am just wondering where we are going, that is all.

MR MARGO: We submit that what really happened in the court below was this. The court below was very struck by the fact that the trial judge had gone through all the traditional factors, apart from governing law, and had reached a fairly strong view that Renault could have a fair trial in New South Wales; that the plaintiff would have enormous difficulties if he had to go elsewhere. And then he turned, more than halfway through his judgment, to consider governing law, and suddenly, from that moment, his eyes were fixed on France or New Caledonia or some kind of conglomerate French territory that spanned from metropolitan France to New Caledonia, and all the previous considerations were washed away.

The indications that their Honours were taking that approach are collected in footnote 1 on page 2 of our submissions. They stop at paragraph 28 of the judgment of Justice Stein. That is at page 340. It starts at page 339. Now, this is a reference to the submission that we put to the court below:

The claimant submits that Smart J did not apply the correct test in Voth but something more akin to Spiliada, see Mason P in James Hardie Industries Pty Ltd v Grigor (1998) 45 NSWLR 20 at 41 for a discussion of the differences. Essentially the discretion exercised by Smart J is said to have miscarried by his Honour concluding that a stay should be granted to the opponents, having found that the practical considerations tended to favour New South Wales. In particular, it is maintained that his Honour fell into error by attaching too much importance to the assumption that French law would be the substantive law to be applied. This finding, so it seems, outweighed the practical considerations -

And then at paragraph 29 - - -

GUMMOW J: What about paragraph 29?

MR MARGO: This was our secondary submission that, in fact, it was an error and that Thompson v Hill was - the analysis in Thompson v Hill and by Sackville J in Murray's Coaches was correct, or at least arguably correct. We put it in what the Court of Appeal described as a "shy way" and that, therefore, the matter should not be determined at the interlocutory stage. Then Justice Stein does go on - paragraphs 39 and 42 are the next ones I have a note to refer your Honours to. Let me take your Honours through paragraphs 30 through to 38, is a consideration of Thompson v Hill and it is a convenient place. I will not, unless your Honours wish, go to any of that but - - -

GUMMOW J: You support it all.

MR MARGO: We do support it, but it is a secondary matter. We say that the decision of the court below is over-determined because when one comes to 38, Stein J says, and this is the high point of the appellate's interpretation of the judgment:

I find Clarke JA's reasoning in Thompson v Hill to be most persuasive.

And notes that the President of the Court of Appeal agreed with Justice Clarke in that case. Then in 39:

Mr Margo submits that it is fairly arguable that the substantive law . . . will be New South Wales law.

Then his Honour says - he does not say, "Well, the argument is decided in this court, he says:

Smart J did not need to determine that question on the stay application and should have left it to the trial judge. It is maintained that his Honour's assumption to the contrary -

and these are the words we emphasise -

and his giving it such great weight, caused the discretion to miscarry.

We cannot deny that, on one interpretation - and that is what the headnote says, that this Court said Thompson v Hill is correct. But we do not think it is - if you read the judgment as a whole, we think they stop short of that. They were saying, "Given all the practical matters, too much weight was attached to this factor". At the bottom of page 343 in paragraph 42, Justice Stein says:

The finding was an unnecessary and arguably premature ruling, if not incorrect.

It is left in the air as to whether it was incorrect or not. Then paragraph 43, his Honour again says:

It is clear from his reasoning that his Honour placed great weight - - -

GUMMOW J: I do not understand all this. Why is this question of the substantive law to be applied to be determined at some later date?

MR MARGO: We wish it to be determined now, your Honour.

GUMMOW J: No, what are their Honours talking about here? What are they contemplating will happen, that you find out after the trial what the substantive law was?

MR MARGO: At the trial it will be argued thoroughly and - - -

GUMMOW J: Well, people have to get ready for trial.

MR MARGO: There is no doubt that there can be inconvenience attended on that course and that is why special leave was granted in this case.

GUMMOW J: Yes. I cannot see why Justice Smart should be criticised for this. He may have got it right or wrong, but I cannot see why he should be criticised for embarking on the question.

MR MARGO: Your Honour, I do not think we advance any criticism for embarking. There were arguments on both sides. Until the full facts were known, one could not be sure what would apply to what. Although his Honour disregarded - - -

GUMMOW J: Full facts were known at the trial?

MR MARGO: Well, the pleadings would be developed. There would be - - -

GUMMOW J: Pleadings are meant to be pleaded, not developed.

MR MARGO: I cannot put it any stronger, your Honour. We certainly - - -

GUMMOW J: No wonder these cases go on for years.

MR MARGO: Your Honour, this is our interest in the Phillips v Eyre side of this case or the special leave questions. We are not concerned what - - -

HAYNE J: But, what, to have us tell you how this case might be pleaded?

MR MARGO: No, your Honour.

HAYNE J: Well, is that not what it comes to? At the moment the pleading is framed in a particular way. You would have us embark - or one or other of the parties would have us embark on a long disquisition about what is the law to be applied, and that in relation to an action barely commenced, in which there is one paragraph making a rather equivocal assertion about law to be applied. It seems to me to be a very unusual task that the parties are inviting, or at least one of the parties is inviting, this Court to engage in.

MR MARGO: We came here unwillingly, your Honour, but having come here it would be in my client's interest not to have to come back, but I appreciate your Honours' position and the press of business on the Court.

May I continue with Voth as quickly as I can. On page 556 in Voth there is again a reference to what we say is a single-stage inquiry, that is the comparison between a "clearly inappropriate forum" test and the traditional test. I will not stay with that page because it is explained in more detail in Oceanic. Then at page 558 at about point 4:

The "clearly inappropriate forum" test is similar to and, for that reason, is likely to yield the same result as the "more appropriate forum" test in the majority of cases. The difference between the two tests will be of critical significance only in those cases - probably rare -

and we submit this is one of them -

in which it is held that an available foreign tribunal is the natural or more appropriate forum but in which it cannot be said that the local tribunal is a clearly inappropriate one. But the question which the former test presents -

and that is the Australian test -

is slightly different in that it focuses on the advantages and disadvantages arising from a continuation of the proceedings in the selected forum -

and then comes the statement we have quoted in our submissions, that:

The important point is that, in those cases in which the ascertainment of the natural forum is a complex and finely balanced question -

which the primary judge certainly regarded it as -

the court may more readily conclude that it is not a clearly inappropriate forum.

The connecting factors are divided between New Caledonia and France and the appellants can only escape that consequence by trying to conflate them and even if they can be conflated as a matter of legal system, on the evidence, and which we dispute, the geographic separation is something material to be taken into account.

GAUDRON J: You keep saying that.

MR MARGO: I am sorry, your Honour.

GAUDRON J: I understand that New Caledonia is what is known as France outre-mer.

MR MARGO: That may apply to French Guiana. French Guiana is an overseas department of France and New Caledonia is a territory, but there is nothing in the evidence about the inference of the Matignon Accords or the Noumea Accord or - - -

CALLINAN J: Mr Margo, just taking up something that Justice Gummow said about the manifest convenience of knowing before the trial what system of law is going to be applied. The sorts of interlocutory steps that you might wish to take, well, also your decisions about them, the parties' decisions about them, are also likely to be heavily influenced by the system of law ultimately likely to be applied. It seems to me to be - I had not thought of it before, but it is obviously massively inconvenient only to find out, perhaps on the second day of argument at the trial, what system of law is going to be applied.

MR MARGO: Yes.

HAYNE J: Why is not that inevitable and is it not inevitable according to the way in which the pleadings fall out? Either there will be an issue tendered at trial about application of foreign law and its content or there will not. If there is an issue tendered, the parties will not know the answer to it until judgment. The matter is clouded by this proposition so frequently put forward that there are presumptions about the application of forum law if foreign law is not known.

The better analysis may well be the proof of foreign law is a matter for pleading and proof. Absent pleading, absent proof, the Court simply applies the law that it knows and applies - local law. So, it is for the parties and for no one else to raise whatever issue they wish to raise about application and, significantly, content of any asserted foreign law and until they do there is no issue.

MR MARGO: Certainly in New South Wales, your Honour, the Court of Appeal has held in Walker v Pickles, and they claim to follow Anderson and Koop v Bebb, that whatever the interpretation of Phillips v Eyre, the plaintiff does not have to plead the lex loci delicti or the satisfaction of the two limbs. That may be a survival of the Machado v Fontes test which - - -

HAYNE J: That is not the point I am making. The point I am making is that if a plaintiff asserts he or she has a right against the defendant, the content of which is formed from a rule of foreign law, it is for the plaintiff to plead that. If the defendant asserts, by contrast, that the defendant has an excuse or that the defendant is not obliged in the manner asserted, that is a matter for defence, and until that is done there is no issue.

MR MARGO: We accept that.

CALLINAN J: Just taking that up, if there is an issue then on the pleadings when they are complete, it might be very convenient that that issue be decided as a separate issue before the trial to save a great deal of uncertainty, time and expense and, perhaps, preparation under two systems of law for the trial.

MR MARGO: We do not question in any way the way your Honour Justice Hayne has put it as a matter of pleading - - -

HAYNE J: But it has important consequences for the immediate application, which is the subject of appeal.

MR MARGO: I appreciate that.

HAYNE J: A plaintiff has asserted, true it is as an alternative plea, that foreign law applies. The defendant comes to Court seeking stay saying, "The fact that foreign law applies is significant in connection with my application for stay." It stops at that point. It does not go to the point of saying the content of the foreign law relevantly is A to Z and that presents further difficulties. But is not, therefore, the issue about the way Phillips v Eyre might work, what its content is, entirely a false issue in the present proceeding?

MR MARGO: Yes. What your Honour Justice Hayne is putting to me in a sense may have underlain the view of the court below that the decision was premature, not that his Honour was not entitled to have regard to foreign law if he properly could do so on the pleadings of the facts at the stage it came before him, but that these questions are still up in the air.

GLEESON CJ: If it be the case, and I have not analysed the judgments for the purpose of looking at this, but if it be the case that Oceanic was decided on the basis that this Court lift it up in the air as to whether the proper law of the contract was Greece or New South Wales, that would tend to support a criticism of Justice Smart's judgment in so far as it seems to have treated governing law as decisive.

MR MARGO: Certainly, your Honour. Could I come then to page 564 of Voth:

It follows that, subject to the question of onus -

at the bottom of the page -

discussed in the preceding paragraph -

and that is the difference in onus whether you are applying for leave to serve out or for a stay -

the principles to be applied in applications to set aside service and in applications for a stay on inappropriate forum grounds are those stated by Deane J in Oceanic Sun. In the application of those principles the discussion by Lord Goff in Spiliada of relevant "connecting factors" and "a legitimate personal or juridical advantage" provides valuable assistance.

I will not take your Honours to it, but your Honour Justice Callinan asked about this. At pages 482 to 484 is the discussion in Spiliada of legitimate personal or juridical advantage and the effect of it in summary is that if there is a correlative disadvantage to one party of the other party's advantage, the factors cannot be decisive but that there can be exceptional cases in which they assume greater importance and those are cases where the loss of the legitimate juridical advantage would prevent the party from obtaining justice in the foreign forum

The two advantages, in order of importance that we rely on, are firstly, financial and the ability to (a) obtain legal representation in the foreign forum - Mr Zhang's ability to do that - and secondly, to pay for his witnesses. The learned primary judge imposed a condition that the appellants pay for the court appointed expert - there may be more than one court appointed expert required; one for damages, one for engineering at least, but said nothing, having found that we could not afford to pay our experts even in New South Wales, and that we could not afford to send any witnesses, expert or otherwise, to Noumea, the learned judge said nothing about what Mr Zhang is expected to do if the case is sent to France or New Caledonia about witnesses, let alone about his own travel there.

KIRBY J: Yes, but one answer to that may be that in such events you should get insurance from having accidents in foreign places. I mean people do that. It has to be tested with reference to Colombia, to Argentina, to all sorts of countries. In a world where everybody travels the notion that you can just, with anything that happens to you in a tort-like event, that you can sue in your own jurisdiction is one which is not difficult to reconcile with a responsible, international legal order.

MR MARGO: The cases that we referred to of Connolly v Rio Tinto Zinc, and the more recent case of Lubbe v Cape plc in the House of Lords, which reviews Connolly - so your Honours do not really need to go to both at the moment. My learned friends took you to Connolly yesterday and to the dissenting speech of Lord Hoffmann in Connolly - do not put it on the basis that just because there is legal aid, legal assistance in the local forum and non abroad, that that is a decisive factor.

They combine two factors. That the case must be of such complexity, and require professional assistance and expertise, that the lack of financial assistance in the foreign forum means the plaintiff cannot get justice. Now Lord Hoffmann criticises that approach because it leads to a different result for a rich victim to a poor victim, but that is an inescapable fact when one is looking at the interests of justice in a particular case.

GLEESON CJ: Well, we can sometimes erroneously, if we concentrate our case on personal injuries litigation, equate the word "plaintiff" with "injured, impecunious, individual", and equate the word "defendant" with "large, multi-national corporation". If you are talking about commercial litigation, as distinct from personal injuries litigation, the roles might be reversed; the plaintiff might be commonly a bank, for example, and the defendant might be an individual.

MR MARGO: Certainly.

GLEESON CJ: So the discretionary considerations, whatever they are, have to be able to operate both ways.

MR MARGO: Well, they must, and the test in Oceanic requires that they do.

MR MARGO: They must, and the test in Oceanic requires that they do. But certainly it is not put even under the Spiliada test as applied in Connelly and Lubbe that the mere lack of legal aid in the foreign forum is a sufficient or decisive factor, and we do not put that either. If Mr Zhang could appear for himself - that raises other considerations of language and disability - and it was a simple accident case of who turned left when, the conclusion might be very different. It is a product liability case against a multinational corporation that nobody, even if fluent in the foreign language, could be expected to run on their own.

Now, the House of Lords has come down very strongly in both Lubbe and Connelly and Lord Hoffmann has changed his position because he agrees with the majority, at least on the facts of Lubbe, that in such a case the English court will not grant a stay because even under Spiliada there is an overriding interest of justice exception and if the plaintiff cannot get justice in the foreign forum because in that case of the complexity of the case and the lack of means, a stay will not be granted provided the jurisdiction has been regularly invoked and it is not a forum-shopping case, which this is not.

Their Honours refer also in Lubbe to international covenants. They refer in Lubbe to Article 6 of the European Convention on Human Rights which we have not ratified, but it is in substantially the same terms as Article 14 of the Covenant of Civil and Political Rights and they refer to that in Lubbe at page 1561 that there must be some kind of litigious equality - now, that is going pretty far - that the article requires and that the common law should be developed consonant with it. So the references are to Article 6 of the European Convention on Human Rights which applies to both civil and criminal proceedings, in case your Honours were wondering, and as does Article 14 of the International Covenant on Civil and Political Rights.

KIRBY J: Lubbe was the case from South Africa, was it, where they could not get legal aid in South Africa but could get it in the United Kingdom?

MR MARGO: Yes, Lubbe came up in different stages to the Court of Appeal in England and eventually to the House of Lords. They were all collected and it became a class action eventually, your Honour. So there is that special feature that there were 3,000 plaintiffs and it was undisputed, really, that South Africa was the natural forum. The only question on which English law might have applied was the duty of care owed by a parent company of a wholly-owned subsidiary to people dealing with a wholly-owned subsidiary. That was not decided.

But Connelly v RTZ was the Namibia case, a single plaintiff, the gentleman whom Lord Hoffmann thought had taken his chances when he went to Namibia and perhaps should have insured. It is a very harsh judgment, with respect, the dissenting judgment, because this gentleman had done his job properly in Namibia and come back to his natural home, Scotland, and was suing in Scotland.

KIRBY J: Yes, but for something that happened in Namibia.

MR MARGO: Certainly, but it was not a forum-shopping exercise and the man's life had so developed. But anyway, Lord Hoffmann was in the minority in that case and there they held that it was a case that required expert assistance, both legal and medical and scientific, and the fact that you could not get that assistance in Namibia was decisive. The stay was refused. So I mention that only to distinguish that you do not have to have 3,000 plaintiffs. That was not the principle of either of the cases.

KIRBY J: It posits a theory that rich people, because most people that travel are richer than the average in the world, can take the law of the natural forum to their own forum just because that is where they are and that is where they want to sue. At least it is possible that if that becomes so that those with money and power can, as it were, takeover the exercise of the jurisdiction of the place most natural and that is not really a respectful legal order for international community.

MR MARGO: Well, your Honour, may I just submit a response to that, that the test in Voth eschews all considerations of judicial comity. It is founded entirely on considerations of justice between the particular parties and this is a consequence of it. It is just a hard fact that poor people require different consideration to rich people. Even Spiliada, the House of Lords in Lubbe now makes clear, eschews all considerations of judicial comity, public interest, administrative burden on the courts and focuses entirely on the interest of justice and the balance of justices between the individual parties and that is what we fundamentally rest on. If Renault can have a fair trial in New South Wales, and it is not shown - and here we rely on onus under the Australian test - they have not shown these appellants that we can have a fair trial in New Caledonia and the evidence that we have led has raised serious doubt about that, they fail.

KIRBY J: But if, in fact, New Caledonia is a territory of France and if, in fact, the law to be applied is French law, well, one would not readily infer that the courts are not independent, that the judges will not apply the rule of law, that the matter will not be determined according to law of the place where, after all, the delict occurred.

MR MARGO: No, nothing of that kind is submitted, your Honour. It is put purely on the basis of being able to afford to run the kind of case that has to be run, plus physical disability. Mr Zhang is a witness to the accident. It was put below that Mr Zhang can sit in New South Wales and the French court will send an expert to ask him any questions that they need to ask and if he wants to send anything to the French court he can send it to them. Mr Zhang is a witness to the accident. He has to be present when the evidence is given by Mr Tydada or anybody else. Contributory negligence will certainly be relevant, if not under the head of contributory negligence, on causation.

KIRBY J: But we have to test the proposition by - you see, Australia is a country that welcomes a lot of people from all around the world and an increasing number come as tourists. The hypothesis is - you have got to test it by the golden rule; will you live by that rule for your own people. That people from the United States or other countries will sue us in their courts according to their convenience and require Australian defendants to go there to litigate in places that are unnatural to them. The only phenomenon that is natural is that the person who is injured or has the claim is there and is suffering damage there. It seems a chaotic world of the law that you postulate.

MR MARGO: To test that at a lower level of particularity, your Honour, the court in the United States, if it were following similar principles, would inquire, "Was the plaintiff a rich corporation? Was the defendant able to afford to the United States?", and would go into those questions.

McHUGH J: I suppose you can say in favour of your position that the real criticism is to be directed at the rule, which gives this long-armed jurisdiction, because it contemplates that the Supreme Court of New South Wales may exercise jurisdiction, although the only connection with the jurisdiction is that the plaintiff is suffering damage here. Everything else may have happened outside of the jurisdiction.

MR MARGO: We make a submission, your Honour, a footnote in our submission, to the effect that there is a very good policy reason why the State of New South Wales would want to exercise long on jurisdiction, because the injured person might become dependent on hospitalisation and public relief in the State. Compensation is important. It is important that if it can be obtained, it should be obtained from the insurer or whoever. It is not - I just say that because it is suggested that this is a very etiolated arm of jurisdiction, the most remote from any proper policy concern of the State of New South Wales. We do not accept that, with respect.

McHUGH J: I am not sure about that. I must say I have always thought since they sat on Flaherty v Girgis that it is a rule that is inimical to any rational international legal order.

MR MARGO: But it can be controlled by the inappropriate forum test. If your Honours would just bear with me a moment, I am just trying to cut out - even I have noticed some repetition. Then at page 571 comes the statement which is - at the end of all this long consideration of Maritime and Oceanic, and the balancing exercise and the distinguishing from Spiliada, comes the statement that the primary judge picked up, that the:

overall task of the court exercising the discretion based upon the competing connections of the respective forums with the subject matter of the proceedings.

If one goes to Oceanic, and I will go straight to the judgment of Justice Deane - - -

GUMMOW J: What will we get out of that, Mr Margo, that we do not already know?

MR MARGO: Well, all I seek to establish there, your Honour, is that it is not a two-stage test and that the onus remains throughout on the applicant for a stay.

McHUGH J: Yes, but that case does not decide it, does it? Justice Deane may - - -

MR MARGO: No, but Justice Deane has approved in Voth by the majority that vexation and oppression are to be applied, Voth says, as interpreted by Justice Deane in Oceanic.

GUMMOW J: Do you then say that this principle that you say is thus established was correctly applied by the Court of Appeal and incorrectly applied by the trial judge? How does it bear upon this particular application?

MR MARGO: We say it was incorrectly applied by the trial judge because he ought to have found, having found all these - where practical considerations pointed and where a fair trial could be had, that the test had not been satisfied. There was no vexation or oppression shown to Renault and there was great disadvantage shown to Mr Zhang of having to go to a foreign forum. In the Court of Appeal, we say that they had regard to the findings of fact of the primary judge, and against that background, criticised to the extent they did, the weight he gave to the foreign law factor.

The primary judge referred to Connelly v Rio Tinto Zinc in his judgment and the passage he quoted in his judgment referred to the plaintiff's onus and his Honour's discretion may have miscarried there. The question of legal aid in New Caledonia was left on the basis that there was an Act there which does not exclude foreign people. As far as contingent fee arrangements are concerned, the evidence is that they are illegal, illicit, under the law in metropolitan France or New Caledonia, but the rule is at appeal book page 151, in translation, and the last paragraph is the important bit. You cannot get a percentage of the award but you can have:

An agreement providing, in addition to remuneration for the services rendered -

You have to have an agreement that you are going to pay for services rendered. You can also fix:

an extra fee taking into account the result obtained or the service rendered -

and the submission was made, then you could, theoretically, find a lawyer in New Caledonia or France prepared to take this case on a basis that he would receive a small initial fee and a much larger fee if he won.

McHUGH J: Can a litigant appear in person in the French courts? I had a recollection that they cannot.

MR MARGO: That was not in the evidence and I am unable to assist your Honour.

GLEESON CJ: I am not sure that the word "appear" would necessarily have the same meaning in the French courts as in ours. You have to retain the services of an advocat, do you not, in order to put material to the court, but you would ordinarily put the material to the court in writing, would you not?

MR MARGO: A lot of it is done on paper through, I suppose, equivalent to our reference, in a way, and before the courts. I just do not know the answer to that, your Honour. But we say that even if a right of personal appearance were permitted, how can this respondent appear personally in New Caledonia or - - -

McHUGH J: Well, he may not have to. I mean, material could be prepared for him here in Australia and sent over there.

GLEESON CJ: They do not have a trial system, do they, in France, an oral trial? They have a procedure that we would regard as a kind of investigation, culminating in submissions made to the court, but they do not have a sort of - the process does not conclude with a climactic oral hearing in the way with which we are familiar.

MR MARGO: No, but the evidence was that at lower stages, where the experts are inquiring, if you wanted to put your case properly, you would have your experts go and talk to the court-appointed expert. It is not just done on the paper. You would want to debate and discuss. The submission was also put on the basis that oral evidence would be required from Mr Tydada, for example, and we made a concession in the court below that if there were any problem getting him, the finding of fact which we refer to in our submissions is that all those witnesses in New Caledonia could be compelled here - not necessary to come here - but the evidence can be obtained. If it could not be obtained, we would accept the tender of their police statements as their evidence in-chief.

GLEESON CJ: Do we know whether France has a long arm jurisdiction?

MR MARGO: I do not, your Honour.

GLEESON CJ: Do we know whether France has a principle of a Spiliada or Voth kind?

MR MARGO: That was a question Justice Kirby, in fact, asked me this morning and I cannot assist on.

KIRBY J: There is something on that point in the Law Commission report. There is an appendix to it which, as it were, gives a short summary of the position in different countries.

MR MARGO: That is really on whether lex loci delicti is applied and with what qualifications. We have that report here and we have annexed to our submissions, or put in a bundle, in fact, of materials, the full appendix that I think your Honour is referring to.

KIRBY J: I cannot pretend to have studied it closely, but just glancing down it, it does seem to indicate that in Europe the European countries have the territorial principle.

MR MARGO: They have lex loci delicti but, as we point out in our submissions, you have to ask what is meant in each country by that, because the locus changes and all of them have - with two exceptions, as far as we can tell from that schedule - qualifications and secondary rules and exceptions.

McHUGH J: Was the New Caledonian barrister who gave the expert evidence cross-examined? She was not?

MR MARGO: No. The only witness cross-examined was my instructing solicitor on - - -

McHUGH J: Well, in some of the reading I have done from material in the case I would suggest that although her evidence on page 37 of the book is not inaccurate, it may not give a really detailed view of what the French law is, which may be rather more favourable to you than English law because the French cases seem to - - -

MR MARGO: Strict liability.

McHUGH J: Strict liability, yes, and they also seem to say that the manufacturer is liable if there is some defect that creates a danger, so it may be that - - -

MR MARGO: No, we appreciate that and I think we put some material in the bundle going to the policy grants, a comparison of English and French law. I think you actually have a choice now because the European Directive on Harmonisation is being implemented.

McHUGH J: But the basic French law is even more favourable than the European Directive, is it not?

MR MARGO: Yes, and we have a choice. In fact, I do not think the Directive applies to us because our cause of action arose before. We are not seeking to evade whatever the law is. As, I think, was put to us in the special leave application, we have just stumbled into this area. There is no forum shopping on choice of law involved in our case at all.

McHUGH J: But if you could put your case in writing, then you may not be in as bad a position as if you had to conduct the case orally, call witnesses and so on.

GAUDRON J: It would be unusual though, would it not, if your client were not required for oral examination? Whether it is giving evidence or not, it would be unusual in the circumstances of this case, I think.

MR MARGO: Particularly because some of the witnesses in New Caledonia are road workers. It is our understanding that there is face-to-face discussion if not - cross-examination is rarely allowed unless there is a real conflict and the magistrate or the judge wants to test something, which happens rarely is the evidence. But certainly we would be disadvantaged if we could not be on the spot talking to the expert.

Now, if both the engineering expert, court-appointed expert I am referring to, and the medical expert were sent to New South Wales, then 90 per cent of the evidence was going to be collected in New South Wales anyway. The evidence was that where a person is severely injured a French court has power and would probably be likely to send someone to take the evidence. They do not just ask for it to be done by post. They would send an expert to New South Wales.

GLEESON CJ: Has there been any question in this case about enforceability of a judgment?

MR MARGO: No. His Honour Justice Smart raised it at the end. There is no treaty yet providing for the enforcement from Australian judgment in France but both countries were participating in a proposed Hague Convention on reciprocal enforcement of judgments, the fate of which we do not know as we stand here today. But that is not a question that should affect - I cannot cite the authority at the moment but there is some authority to the effect that the Court should not take into account exercising this jurisdiction a consideration of whether or not the judgment would be enforceable.

GAUDRON J: That seems very strange authority to me.

MR MARGO: I will try and find it.

GAUDRON J: At least if it is being said that some other court is appropriate or more appropriate and usually there will be that sort of consideration in a case. I would have thought it was critical to know whether the proposed alternative court's judgment could be enforced. Now, the question, however, whether it is relevant, where the plaintiff has elected to proceed in a forum where there are difficulties about enforcing the judgment but at least on the other side of the coin I would have thought it would have been a most material consideration.

MR MARGO: I will try and find if there is anything on the Hague Convention website about the current fate of that treaty at lunchtime.

GUMMOW J: What about this authority you say that exists?

MR MARGO: I cannot find it now, your Honour. This was a question that was raised by the primary judge and I will try and find it. I put the submission on principle, though, that we take our chances and a court should not assume that its judgment would not be honoured by a foreign court.

GAUDRON J: Ultimately, I suppose if you accept the Oceanic and Voth principles, you are looking at are the interests of justice going to be served and I would have thought one question is, "Will the judgment be enforceable, no matter which way you look at it, as I think about it.

MR MARGO: This case, your Honour - - -

KIRBY J: I think that must be so because you have got to look not just at a case of a country like France but you might be looking at Malawi or the Congo and it would be small comfort if you have gone through all the process of the litigation and cannot get your money if you won.

MR MARGO: It is our submission it is just not a practical, realistic possibility in this case that a corporation like Renault - it may appeal or would try to simply sit in France and not pay attention to a judgment of this Court. This is a country that Renault has carried on business in for nearly 100 years.

KIRBY J: Yes, but the principle that you put forward is that some court has said it is not relevant. Like Justice Gaudron, I find that very hard to accept.

MR MARGO: Unless I can provide authority I will leave it on the basis that it should not be assumed in this case there is any problem of that kind.

GAUDRON J: We can assume that it still wishes to sell its cars and does not want bad publicity, I suppose.

MR MARGO: There is a bit of a dip over the "Rainbow Warrior" but it is picking up again, your Honour. I had proposed to go to Oceanic but I have encapsulated what it said and I am using more time than I need. On legitimate juridical advantage if I could just say what we say the conclusion is. Because the test is a balancing one, one cannot look at something like availability of discovery in this forum in isolation from the particular facts and there is not always a correlative disadvantage to the other party of an advantage in this forum, and I have said what our submission is about discovery.

It should not be assumed that Renault would regard it as a disadvantage to disclose the facts about what happened in its design process. This is not a case where one would need general discovery and there is a document where we proposed limited categories of discovery that we would be seeking in New South Wales.

KIRBY J: Do you understand that that would be consented to?

MR MARGO: No, it was not consented to but, of course, at an interlocutory stage with a dispute of this kind I would not expect the appellants to consent to anything. We make no criticism of them at this stage. They have entered a conditional appearance. But we would anticipate that if the matter proceeded in New South Wales, some sensible arrangement would be reached.

HAYNE J: Just to go back to the question of the position looked at from the other end of the lens, Justice Nygh's book on transnational tort litigation jurisdictional principles looks at the civil law approach, the US approach, and discusses the international position, at least to some extent.

MR MARGO: On jurisdictional aspect, I think that chapter is.

HAYNE J: Yes.

GAUDRON J: And recognition of judgment.

MR MARGO: Yes. We referred to Fleming, thank you.

GLEESON CJ: Is that a convenient time, Mr Margo?

MR MARGO: If the Court pleases.

GLEESON CJ: We will resume at 2.15 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.16 PM:

GLEESON CJ: Yes, Mr Margo.

MR MARGO: Thank you, your Honour. Your Honour, subsections (e) to (h) of rule 11.8(1) were gazetted on 23 December 1988. Prior to that, that rule 11.8(1) had only referred to setting aside service and (e) to (h) were added on 23 December 1988 - (e) to (i), I am corrected.

CALLINAN J: Could you just say that all again, I am sorry, Mr Margo.

MR MARGO: Part 11 of rule 8(1), which is around about page 13 of our bundle - - -

KIRBY J: And that was in 1988 it was changed.

MR MARGO: 23 December 1988.

KIRBY J: I think we better have, if you do not mind, after we finish today, a schedule which sets out the history of the rule; it would start with the 1970 Rules annexed to the Supreme Court Act, so there would be something - - -

MR MARGO: We can do it, your Honour, but, in fact, the gazette dates I have given at pages 10 and - anything that will assist the Court we will do, of course but the gazette pages are given there and we have just checked that they are correct and what came in on the gazetted date.

GUMMOW J: Yes, but it is awful to have a running text - - -

MR MARGO: We will do that. Then Part 10 rule 6A came in on 17 June 1988, 13 days before Oceanic.

The French Civil Procedure Code, Article 509, provides for "the recognition and enforcement of decisions of foreign courts."

KIRBY J: Surely not in that generality. There would have to be some - - -

MR MARGO: We have not been able to get the text of the Code, your Honour, this comes off the Foreign Affairs web site. It was then anticipated that - that is where I got the information that Australia and France were working on, or participating with other nations on the Hague Convention and worldwide reciprocal...of judgments.

KIRBY J: Yes, our own Solicitor-General was there. He has just come back.

MR MARGO: Well, then it is not finished. It might have been the party after signing, your Honour.

In response to your Honour Justice Kirby's putting to me that we need a rule that can be universalised, and that what we are proposing did not seem to work reciprocally. This is a product liability case. We have sought in our submissions, if there is to be any change at all, to distinguish this category of tort. If a multinational country seeks worldwide markets and manufactures for worldwide markets, and gets worldwide profits, it should expect to have worldwide legal responsibility.

KIRBY J: Yes, but there is a problem with the de-conceptualisation of a rule of private international law for little categories of - then they will say well, marriages should have a special rule - - -

MR MARGO: So they do, your Honour.

KIRBY J: That wills should have a special rule.

MR MARGO: So they do.

KIRBY J: Instead of conceptualising things, to face the reality that everybody is going around the world in huge numbers nowadays, and telecommunications. The Internet creates international disputes.

MR MARGO: We submit, in our submissions, that a distinction needs to be drawn between categories. The local pie maker who sells his pie to an American visiting a football match in New South Wales should not be held to the same accountability, and the same consideration should not apply to him as somebody who manufactures a product intending it to go to world trade, and makes worldwide profits from it and works in worldwide markets. There is a limit to the extent to which one can divide up, but historically there have always been distinctions drawn between spousal questions, wills, for policy reasons.

What flows from that is, that distillers which placed the locus, of what we say was an international product liability tort, at the place where the defendant manufactured, is not necessarily a good principle. Why should it not be the place of injury, or the place of habitual residence of the victim, and that is a barrow that I cannot push very far in the time available to me and it is addressed in our written submissions. It is really time to revisit, perhaps, with increasing globalisation of trade, the assumption that a manufacturer has a legitimate expectation that he be judged by the laws of the place of manufacture.

We gave your Honours a reference to an article in the Fleming collection in honour of Fleming which suggests that manufacturers of export products attach no special costs depending on the changing liability in the world markets to which they distribute. They have to manufacture for the highest liability in any market and that cost is built in. The Davies article is at pages 34 to 45 of our bundle of materials.

Your Honour Justice McHugh put it to me that it is likely to be a written case. I found the evidence which suggests otherwise in this case. It is at page 85 of the first appeal book in paragraph 4 of an affidavit made by Roger, who was the appellants' expert. This was the evidence I had in mind when I told your Honour that it appears at a lower level than the tribunal or the court there is oral hearing by the expert of the parties and their witnesses and that applies, as we understand, to the medical expert, the engineering expert, to whomever the question is referred, that the word "heard" refers to oral is clear from the context because it says later in that paragraph 4 that a party can require the court to hear the expert to elucidate his report.

GLEESON CJ: What is that handwritten word in line 3?

MR MARGO: We are not sure. It arose in the Court of Appeal as well. We do not know where it came from.

GLEESON CJ: It does not matter. Do not take time over it.

MR MARGO: Yes. The meaning is agreed but we have put submissions on this basis below. The factual basis is that there is some oral hearing and that was the basis on which I said if the experts are going to hear anything orally and the damages once coming to New South Wales and Mr Zhang cannot afford to send his experts to talk to the man and he has to come to New South Wales as well, it is all going to be here anyway.

I do not want to try your Honours' patience but the passage in Oceanic which most crisply puts the test as a single test with two aspects is at page 244 and it picks up on Logan and Maritime in that respect. It is at the bottom at about point 8. It goes on to page 245 and Justice Deane says it is a mistake to read these as independent tests which must each be answered in the affirmative, namely:

vexatious or oppressive to the defendant -

and no injustice to plaintiff, that they are:

complementary aspects of the one process -

and they must not be treated as "isolated processes" and in about the middle of the page:

If a not illegitimate advantage which the plaintiff would lose if proceedings in a prima facie inappropriate court were dismissed or stayed is inconsequential when compared to the oppression or vexation of the defendant if the proceedings are permitted to continue, there will be no relevant injustice to the plaintiff -

to lose that advantage. Conversely:

the second aspect (ie, that a continuation of the action would be oppressive or vexatious to the defendant) is not confined to a consideration of the circumstances of the defendant alone.

Because they are reciprocal, there is only one onus. We do not get to two stages as in Spiliada where you can consider it natural forum therefore inappropriate unless the second stage the plaintiff discharges from onus. At page 248 in Oceanic, about point 3, wrapping up the preceding discussion over many pages, Justice Deane said:

The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him.

There is no evidence of that kind at all apart from the bare proposition that French law would apply. Finally, at page 252, at about the same point 3:

So stated, the practical impact of the answer to the question -

that is the question about the relationship between the United Kingdom and Australian test -

is confined to those probably rare cases in which an available foreign tribunal would be the natural or a more appropriate forum but in which it has not been demonstrated by the defendant that the local tribunal is a clearly inappropriate one.

And that is this case. There is just no evidence from Renault - - -

GLEESON CJ: I thought you would be relying on the last paragraph on page 252.

MR MARGO: We adopt it, your Honour, and I will just see what it says. Page 252, your Honour?

GLEESON CJ: Page 252:

where jurisdiction exists, access to the courts is a right. It is not a privilege which can be withdrawn - - -

MR MARGO: Certainly, your Honour, and that was the starting point of Maritime and the beginning of Justice Deane's judgment and Justice Brennan, in Oceanic, makes that point even more strongly, but, of course, he comes down to a narrow and traditional interpretation of "vexatious or oppressive", which is not adopted by the court.

KIRBY J: So your basic theory is that, far from being appropriate to internationalism as it has developed to stick rigidly to a jurisdiction-by-jurisdiction basis where the wrong occurred, that the real consequence of global products and global services and global problems is that the law should move towards, in a sense, a sort of delegation to the court that has jurisdiction, that can deal with the matter, to deal with the issue unless it is demonstrated to be, for some reason, a policy or a serious inconvenience, an unsuitable forum.

MR MARGO: We would not have posed that except at that level of generality. We have not considered all kinds of torts. But, certainly, product liability - - -

KIRBY J: You see, I just really resist the notion that you can hive off one little area of the law of tort. You have to think conceptually when you are looking at private international law.

MR MARGO: Ideally, one would want to - what I was really submitting, your Honours, we have not tested our theory of product liability against every tort to see whether it is the satisfactory universal solution.

KIRBY J: This is the real fault of the common law, that it lurches from one category to another, instead of dealing with issues conceptually.

MR MARGO: May I just anticipate, because my time is drawing to a close, we suggest later that one solution the Court may wish to adopt in relation to The "Halley" rule is there are two ways, without abandoning Phillips v Eyre, that that rule can accommodate a greater role for the lex loci delicti. The one is to weaken its statement so that it is really an articulation of characterisation by the law of the forum, a forum control technique applied in all cases, but able to be dispensed with in appropriate cases under Boys v Chaplin as explained in Red Sea and then removing the objectionable effect of the first limb of Phillips v Eyre, if it is rigidly construed - - -

GLEESON CJ: Is there a sense in which Mr Walker's argument supports your case? Is it a possible point of view that the requirements of territoriality are met by the choice of law principle for which he contends and if that principle is correct, choice of the forum is not going to diminish the respect that is paid to territoriality.

MR MARGO: Thank you, your Honour, and may I add to the submission, picking up on what Justice Hayne said yesterday, we adopt that submission that the obligation of the court to exercise its jurisdiction includes its obligation to apply the private international law of the local forum, which would have this consequence your Honour has just referred to. It could not be a per se objection to appropriateness of the forum that its private international law rules, when applied, pointed to foreign law. That would be inconsistent with the starting point of the test in Maritime.

KIRBY J: The problem with your test - or your theory - is: one might accept this in an inter-jurisdictional dispute between France and Australia, or the United States and New Zealand, but when you get to one between, say, Mali, or some other country - - -

MR MARGO: Laos.

KIRBY J: - - - then you are in a different realm. But maybe one has to fashion an exception in that sort of case.

MR MARGO: Your Honour, we submit that the most conservative way of proceeding might be to keep Phillips v Eyre. Even the United Kingdom could not abandon it for defamation, and how your Honours are to deal with it on the facts of this case without considering different torts like defamation, it is difficult to see. Perhaps to make it clear, which has never been done, as far as we have been able to find, that the exceptions to the first and second limb in Boys v Chaplin and Red Sea are available for international torts. We then have given your Honours copies of an article by Mr Carter: "Choice of Law in Tort and Delict" (1991) Law Quarterly Review 107 at 405, which presents the argument that although The "Halley" may have had an illegitimate birth, it can be justified as a policy filter.

If your Honours have that article, at the bottom of page 406 - it is called "Choice of Law in Tort and Delict" (1991) Law Quarterly Review 107 at 405. It is an article referred to by various of the Law Lords - or at least one of them - in the second reading speeches on the United Kingdom Bill, or in the proceedings before the House of Lords committee on the Bill. That is how we came to it. The author does not believe that legislation is the way to go for conflicts of laws. He points out that, in his view - and it is a very closely reasoned article, in my respectful submission - the exceptions in Boys v Chaplin and Red Sea are workable; do not produce any more uncertainty than interpretation of this British statute is likely to produce - it uses a lot of very general terms.

Lord Wilberforce, Lord Lester and the United Kingdom and the Scottish Law Commissions, looking at the whole history of the rule in Phillips v Eyre, found only M'Elroy v M'Allister, the Scottish case, caused injustice. They could not find another example in the - when Lord Wilberforce was looking, it was 124 years' history of the rule, and the Commission's report was published in 1991 or 1992, it was less than that. But that was the only case which produced hard, unjust results - a terrible case, which your Honours will be aware of - but that case would have been decided quite differently had Boys v Chaplin and Red Sea been available.

That is a case where the Scottish driver, a Scottish passenger, both employed by a Scottish firm, but they had their accident 40 miles south of the border between Scotland and England and the widow failed to recover a solatium under Scottish law, because the English law did not know it. Failed to recover damages on the Fatal Accidents Act of England because she was out of time. Failed to recover loss of expectation of the deceased life under the English law for Miscellaneous Provisions Act 1934, because a Scottish law did not recognise that, and so she got Forty Pounds funeral expenses, which was the only common area between Scottish and English law, and it is a very Scottish case. Seven justices of the Inner House of the Court of Session, but it would be divided quite differently now. There is absolutely no reason there, on Boys v Chaplin and/or Red Sea why the law of Scotland could not have been applied. No English interest in having it so applied.

Mr Coroner continues at page 408 to examine The "Halley" doctrine and to defend it as a necessary technique of forum control and he points out that there is - - -

GAUDRON J: But how necessary is it, this forum, once the notion of inappropriate forum comes into play?

MR MARGO: Well, Lord Lester considers it, your Honour, in the memorandum, which is attached to our submissions, in the context of forum non conveniens doctrine and as a supplementary technique, and the point that is made by the learned author here is that if you take away that filter you are inevitably going to increase resort to the public policy filter, which is undesirable the Court should use.

GLEESON CJ: There used to be a tort in our law, which you will see referred to in Bullen & Leake's pre-judicature edition, whereby a father could sue for the loss of his daughter's services.

MR MARGO: Actio per quod servitum omisit.

GLEESON CJ: Yes. Now, suppose there is some system of foreign law that has a tort of that kind still and an action on that tort will draw it in the Supreme Court of New South Wales, would the appropriateness of the New South Wales Supreme Court as a forum to determine that action be affected by any policy considerations as to the way our law now views that as an appropriate cause of action?

MR MARGO: Well, as I understand the purpose of The "Halley", yes. It would be a matter for decision by the individual tribunal, but certainly it would be legitimate to say our court does not view that as an appropriate cause of action. But it would be quite a strong policy. The appellants' submit that only the Parliament should make that kind of policy decision.

GUMMOW J: But suppose it had been sued to judgment in the other jurisdiction and now it was sought to have the amount of damages judgment recognised in New South Wales, what would happen then?

MR MARGO: Different considerations, I suppose.

GUMMOW J: Why?

MR MARGO: Different kind of comity, I suppose.

GAUDRON J: Absent treaty.

GUMMOW J: Yes, absent treaty.

MR MARGO: Well, in principle, I have difficulty with the question because it is a borderline case in my experience. I mean, if it was something absolutely repulsive to the jurisdiction there would be no difference, but I do see a difference of degree between the principles applicable to recognition of a judgment properly obtained in a foreign court on a cause of action that we would not, but if it was for an abhorrent act - - -

GLEESON CJ: I can think of a few people who would regard that course of action as a bit contentious.

MR MARGO: If an Asian country - entirely hypothetical and bearing no relation to any that exists in our region - had a principle that to criticise the leader of state exposed one to triple damages and confiscation of property, we obviously would not enforce such a judgment.

HAYNE J: But the difficulty about discussing The "Halley" is complicated by two considerations. First, you are assuming, as one has to assume, long arm jurisdiction exists and also what the Americans call tag jurisdiction, you are within the jurisdiction at the time of service, "Here is the greeting from her Majesty. Come to court". Once you accept that the courts are thereby going to be engaged in disposing of matters otherwise unconnected with the jurisdiction there is a problem, a problem that is compounded if you accept that the forum court is enforcing not a right that is vested by some foreign law but a right, if you like, of creation of the sovereignty that gives the court authority.

MR MARGO: Which is the doctrine accepted by decision of this Court to this point.

HAYNE J: If that is so, questions of filter are seen as relevant. Whether you have one filter, two filters, what they are, then become individual matters for debate but to be assessed against that background, compared with, for example, the background apparently in Germany where no doctrine of forum non conveniens because the question of forum is effectively predetermined by statute - no room for shopping.

MR MARGO: Under the Brussels and Lugano Conventions, no, that is a consideration we refer to lightly in our submissions. As a framework of reciprocal obligations to assume jurisdiction and within Convention countries not being allowed to use the forum non conveniens doctrine and it is against that background that the United Kingdom Act has brought in the consumer protection legislation, the reciprocal enforcement of judgments. The submission we make - it may not be very helpful but it is to this effect, that Australia should think very carefully before adopting for the Asia-Pacific region the same solution.

HAYNE J: But in enforcing a foreign judgment, there is no doubt that you are enforcing an obligation that derives from the law and system of another polity.

MR MARGO: But there are considerations of comity that help me to draw out what are understood to be a difference of degree. There are obligations of comity involved in reciprocal enforcement of judgments, sometimes reflected in treaties, sometimes not, which do not necessarily arise if you are using a "Halley" type filter and it is far preferable, in the submission of the learned author which we offer to the Court as a suggestion, to say our law does not recognise triple damages for criticising a political leader and to decline jurisdiction on that basis. It is left in the hands of the Court on a flexible exception basis. Of course, Red Sea - - -

GAUDRON J: But, I am a bit puzzled about this. Is it not common ground that, really, The "Halley" does not come into play in this case is the first limb? The first limb does not come into play in this case. It is conceded that if that test exists, it is met?

MR MARGO: Neither limb comes into play in this case because it is conceded that both limbs are satisfied.

GAUDRON J: Yes, perhaps that is so, if you regard it purely as an actionability rule. If you regard it as a choice of law rule, the question is somewhat different.

MR MARGO: That is where one comes up against the decision in Anderson's Case and Koop v Bebb, Kolsky v Mayne Nickless, Pickles.

GAUDRON J: Well, of course, none of those stand any more within the federation.

MR MARGO: Within the federation, your Honours, it is a question whether they can stand despite Pfeiffer for international. No distinction was drawn at the time of those decisions between international and intranational torts, not for purposes of this area of the decision. A related problem we address in our submissions is that the Australia Law Reform Commission in its recommendations suggested that the substance procedure distinction be abolished for intranational torts and, in particular, that assessment of the extent of damages become a substantive matter within the federation, but they specifically excluded - and we have attached in our bundle the pages from the report that make this recommendation - international torts. They found it impossible to conceive how local courts could be expected to apply substantive law of assessment of damages of foreign jurisdictions.

So heads of damage, the traditional position before Pfeiffer, would on their recommendation remain for international torts and we have submitted that because Pfeiffer specifically excluded any application to international torts, although as a matter of conceptualisation the discussion in Pfeiffer of the substance procedure distinction is capable of applying to international torts, it was well arguable in the courts below that assessment of damages, extent of damages remained a matter for forum law in relation to international torts and, indeed, the Law Reform Commission recommended it should remain for international torts.

KIRBY J: What has happened to the ALRC report? Has there been any progress in the legislative consideration of it, or not? Are you able to tell me?

MR MARGO: I think the only birth of that report I am aware of was the State legislation declaring statutes of limitation to be substantive rather than procedural, now, well, overtaken - it is not overtaken by Pfeiffer because the statutes still apply, but reinforced by Pfeiffer. I am not aware of it. There may have been some other areas of law that - but the main focus of that Commission was not international. It was to try and deal with the problems within a federation. The terms of reference, we made a submission that they were confined to the federation. On rereading them last night, I do not think that is strictly correct. But, certainly, the specific tasks that the Commission was given were intra-federation tasks.

Then, Mr Carter, at page 411, suggests the possibly watered-down version of the rule in The "Halley", but whether one waters down the first limb of Phillips v Eyre as suggested at page 411 - and he refers in a footnote on the preceding page to the dissenting judgment of Justice a Beckett in a case in Victoria, Potter v Broken Hill - your Honours have copies - a sophisticated and weaker interpretation of the first limb, but in dissent of the first limb. What his Honour there had to deal with was a case in Victoria suing for breach of a New South Wales patent on the traditional interpretation now accepted in McKain of the first limb. The fact that there was no statute giving a patent right in Victoria meant that the action could not be maintained in Victoria and it was upheld in the High Court - - -

GUMMOW J: Well, this is a Mozambique rule case, is it not, Potter v BHP? It is always treated as such.

MR MARGO: I am not sure I understand what your Honour is putting to me but my learned friend is nodding. But Justice a Beckett was prepared to consider an interpretation of the first limb. The Victorian court would ask, "Would we enforce a right of a kind that New South Wales enforces by its patent law?". So you bring in - and he focuses on the different wording that Lord Willes J used in Phillips v Eyre, and the first time he refers to a "wrong" of a character of, and in the second limb he refers to "Act", and he said that wrong of a character of allows the court to treat it as a kind of sophisticated articulation of characterisation, but this is the kind of thing that we would give a remedy for and you bring in, with the Act, in the foreign forum, the features of the foreign forum law that give it its wrongful character.

Interpreted in that way, it can still act as a policy filter but it does not have any adverse consequences. The fact that there has only been one case - these commissions sat for the best part of a decade and every academic in town was trying to attack Phillips v Eyre and they came up with McElroy v McAllister, nothing else.

GAUDRON J: But they were attacking it as an actionability rule, were they not?

MR MARGO: They were.

GAUDRON J: Not as a choice of law rule, because by that time choice of law had moved on in Boys v Chaplin.

MR MARGO: I think it is regarded as a choice of law rule in both England and Scotland.

GAUDRON J: But it had moved on in England, had it not, under Boys v Chaplin.

MR MARGO: Boys v Chaplin was a flexible exception to the rule. Boys v Chaplin was the exception to the second limb and then Red Sea - - -

GAUDRON J: To the choice of law aspect, or what is thought to be the choice of law aspect of Phillips v Eyre.

MR MARGO: Had been subjected to flexible exception by Boys v Chaplin.

GAUDRON J: Yes.

MR MARGO: Then Red Sea effectively abolished the first limb of The "Halley" because the Hong Kong court applied Kolsky v Mayne Nickless to say that you had to apply Phillips v Eyre without exception and that certainty was to be preferred to individual justice but the Privy Council devised - - -

GUMMOW J: I have always been a bit dubious about Red Sea myself. Do we have to get into that?

MR MARGO: It can be open for crossing, your Honour. It has a convenient - - -

McHUGH J: Lord Wilberforce thought it was a magnificent judgment when he made his speech in the House of Lords.

MR MARGO: Yes, and was very sorry that Lord Slynn was not there.

McHUGH J: Yes.

MR MARGO: Your Honour, we have changed our view since we put in our written submissions. We, having read more closely the views of the Law Lords, Mr Carter's article and considered the position in the Asia/Pacific region, it is our respectful submission that the courts can be safely armed with Red Sea and Boys v Chaplin and they are unlikely to be abused and there are so few hard cases likely to arise but if you need them you have them. Why hand it over to a statute that is going to be as useful as the Service and Execution of Process Act was for its first 15 years.

GUMMOW J: Well, the statute, it seems to me, would have to be a federal statute, would it not?

MR MARGO: Yes, to be economic.

GUMMOW J: The question then would be whether it was supported by the external affairs power - - -

MR MARGO: We have not even got that far, your Honour.

GUMMOW J: It is not an attractive position internationally to have people dealing with six Australian statutes.

MR MARGO: The speech by Lord Wilberforce and the speech by Lord Lester on the second reading raise these considerations. They are at page 100 in our bundle in that vicinity and annexed to our submissions is the memorandum from Lord Lester in the House of Lords committee on the Bill. If I could just refer particularly to paragraphs 4, 5 and 11 annexed to our submissions, three pages from the end of our bound submissions. There is the memorandum from Lord Lester of Herne Hill.

GAUDRON J: Yes, what do you rely on there?

MR MARGO: Paragraphs 4, 5 and 11. That is the source of the submissions I have putting to your Honours about the appropriateness of keeping Phillips v Eyre. Even in England Lord Wilberforce and Lord Lester and Lord Denning and Lord Simon all felt that legislation was a much less preferable alternative to staying with the long-standing rule subject to these exceptions.

MR MARGO: When, in paragraph 11, Lord Lester refers to the new model of common law, we understand him to be referring, although it is not entirely clear, to Phillips v Eyre as qualified by Boys v Chaplin and Red Sea, not to the Law Commission model. Lord Simon's endorsement appears on the next page, and Lord Denning's on the preceding page, and Lord Wilburforce I have referred your Honours to.

Lubbe is reported in The Weekly Law Reports, your Honours have copies, [2001] WLR 1545, it is in the House of Lords. I have told your Honours something about this case, and my learned friend referred to it. At page 1554 there is a reference back to the earlier case of Connelly v RTZ Corporation, and commencing at the bottom of that page a quotation from what Lord Goff of Chieveley said in the Connelly Case. Your Honour Justice Callinan will see at page 1555, paragraphs A through to D, Lord Goff, who, of course, referred to legitimate juridical advantage in Spiliada and is now restating the position. The mere fact that you do not have legal aid, is not going to be decisive. Near the bottom, just towards the end of paragraph C:

Even so, the availability of financial assistance in this country, coupled with its non-availability in the appropriate forum, may exceptionally be a relevant factor in this context. The question, however, remains whether the plaintiff can establish that substantial justice will not in the particular circumstances of the case be done - - -

and we interpolate there that the onus is different in Australia. The onus was on the appellants to show that the unitary test resulted in a conclusion of "clearly inappropriate forum", and that involved a balancing.

So, we have a total poverty of evidence about the foreign law in this case, complete absence of any specific evidence of vexation or oppression, to these multinational corporations, an unchallenged finding that they can have a fair trial, and all the difficulties about the plaintiff's situation that are the subject of findings by the primary judge, also none of them challenged in the court below.

Then at page 1558, subparagraph (5) at about the letter G, there was a contingency fees arrangement possible in South Africa, and it was even more favourable than the quasi-contingent fee arrangement that is permitted under the Paris and New Caledonia Bar Rules, because you could get a "no win, no fee" arrangement which you cannot get in New Caledonia, but despite that, Lord Bingham and all the other law Lords, I think, certainly Lord Steyn, Lord Hoffmann, Lord Hope of Craighead, I do not think there were any dissents, there were no dissents in this case - and Lord Hoffmann abandoned, in this case, the position he had adopted in Connelly.

GUMMOW J: Yes, you told us that before lunch.

MR MARGO: I am sorry.

GUMMOW J: We seem to be sinking into some minute analysis of these English cases.

MR MARGO: Now, our notice of contention, ground 2, is that even if our interpretation of the Court of Appeal judgment is not accepted, namely that we say it is really finding that his Honour gave too much weight, or one of the findings of error is that his Honour gave too much weight to French law, rather than a finding that was completely wrong to find French law. Then we have a matter of contention, and that is addressed in our written submissions at paragraphs 42 to 48.

The case I was referring to in discussion with Justice Hayne about the pleading rules in New South Wales is Walker v Pickles [1980] 2 NSWLR 281, Justice Hutley at 285 and Justice Glass at 289. Then we have a collection of points of contention, 3, 4 and 5, all of which relate to the failure to distinguish between New Caledonia and France and in summary our submissions about those are at paragraphs 49 to 54 and it boils down to this, that under Distillers, France is the natural forum, other considerations left aside.

The injury in New Caledonia is absolutely fortuitous - it could have happened anywhere - but these appellants conceded that it would be oppressive to the respondent to oblige him to go to France and they did so by submitting to the jurisdiction in New Caledonia and their counsel told the court below that the reason they had done that was they thought it was too much to ask Mr Zhang to go to France. Then ground of contention 7 is that the condition - the learned judge was very concerned about the plaintiff's financial circumstances and his need to obtain assistance and he imposed a condition of the stay that the appellants pay for a court appointed expert.

We submit, and the main factual submissions - submit to your Honours on the basis of the factual findings in paragraph 57 of our submissions. The learned primary judge said that he intended that condition to cure the problems he had referred to but it did not address three or four major problems he identified. Those were legal representation, paying for witnesses to go there and Mr Zhang's problems of attending himself. If Phillips v Eyre were to be abolished, we make submissions about the possible choice of law regime for - - -

KIRBY J: You say abolish but one of the points that Mr Walker makes is that it has never been endorsed by the Court. I am not having a play on words. I am just looking for its legal authority as doctrine of this Court.

MR MARGO: As I apprehend, the appellants make that submission on the basis that cases in which it has apparently been endorsed were concerned with intranational torts. Our submission on that is that no distinction was drawn at the time and that those cases survive, in principle, for international torts.

GAUDRON J: Correspondingly, I suppose, you must accept that one is talking about the modified form of Phillips v Eyre - - -

MR MARGO: In McKain.

GAUDRON J: In McKain, yes.

MR MARGO: No, there has not been an issue about that in this case. I think I have said that - well, your Honour is aware of Koop v Bebb, and McKain accepting the local law theory and not the vested rights theory. Paragraph 80 is where we make our submissions about what might be a non-double actionability choice of law rule form. It starts at page 27, that compensation should be the primary policy objective, not deterrence of manufacturers and the like. The class of torts we are talking about are these international global manufacturers and global markets.

HAYNE J: And where, relevantly, is the tort committed, when you come to page 28, paragraph (c) 1.

MR MARGO: We submit - - -

HAYNE J: Where was this tort committed?

MR MARGO: In New Caledonia, that would have the result here.

HAYNE J: The place where the defective design leads to injury, is that the basis of location?

MR MARGO: Yes. It is difficult to give a properly principled defence for point 1. Our reasoning was this - submissions based on this reasoning: that a manufacturer has no right to expect that his local law would be applied to manufacture for world trade. Conversely, a victim has no right to expect that, on liability issues, his law of habitual residence should be applied. So this is liability; point 1 only. And so that is just a geographic compromise, or a conceptual compromise, that will often be totally fortuitous. And then we have an exception in 2, which is picked up from Red Sea, as reflected in the United Kingdom Act, and it is really a kind of issue-by-issue or all-issues exception that can be made by a court.

Point 3 is picking up the Australian Law Reform Commission recommendation that the extent of damages - not heads of damage, but extent of damages remain for international torts, a matter for forum. In footnote 72 on that page, that is the position of - place of first injury has also been adopted by the United Kingdom Act for personal injuries. That is section 11(2)(a). Then we say that procedural matters, as defined in Pfeiffer, that is an error. The definition should be governed by the law of the forum, and that all the presumptions about foreign law and the requirements for proof of foreign law must remain, in our respectful submission.

If habitual residence - the rest of the submissions in this section quotes from La Haye Travaux, that is the products liability convention on habitual residence. It is a novel concept. It is one we recognise the Court is unlikely to adopt in this case. It should remain lex fori for the time being if that is not acceptable.

Finally, your Honour, if on remedy - my learned junior has found the case of Werribee Council v Kerr [1928] HCA 41; 42 CLR 1, a statement by Justice Isaacs at pages 20 to 21, the court seized of all the materials and there is no question of credit involved, your Honours have to look at the range of facts in order to determine the notice of contention if you think the Court of Appeal was in error. We would submit that it is not appropriate to send it back and that time is of very pressing consideration, the time it has taken to get here and the further time that is likely to elapse before the action proceeds in this forum or another, if it were sent back. So we would ask your Honours to be aware of the additional burden, that is, if you are minded that circumstances exist to determine the matter yourselves. If the Court pleases.

GLEESON CJ: Thank you, Mr Margo. Yes, Mr Walker.

MR WALKER: My learned friend refers to cases of which McKain v Miller is a leading example as a continued source of authority. The first proposition upon which we rely in relation to that line, or the doctrine to be gathered from it, is that they are no longer authority for the matters they did decide and they should not now be regarded as authority for matters they did not decide. The second is that, so far as McKain v Miller, for example, itself is concerned, as your Honour Justice Gaudron observed in Stevens v Head so far as choice of law was concerned, that was not an issue. That reference is 176 CLR 465. As the Chief Justice referred to in McKain v Miller itself, it was not in dispute that the law of South Australia would govern the matter between the parties. That reference is 174 CLR 15.

The question of quantification of damages, measure of damages, or, as one might call it from a businessman's point of view, the content of the obligation so far as it sounds in an enforceable judgment, has been suggested by our learned friends to be a matter which should be distinguished from what is called liability. The first thing, of course, is that our law may use, and may use with some fluency, the distinction liability and quantum, but even experience in our law is that that distinction is not always either particularly useful or particularly straightforward, certainly in terms of procedural or practical matters, detecting where one ends and the other finishes, correctly, in our submission, reminds one from time to time of an estuary.

For those reasons, there is no reason, as a matter of principle, if one looks for lines or policy, if one looks for the ease of application particularly at first instance, so that one does not have to come to courts of ultimate appellate authority to decide these matters, to distinguish between the system of law which should be selected by our choice of law rule to determine liability as opposed to quantum and visa versa.

So far as applying foreign law is concerned, again, applying it as a matter of our law by reason of our choice of law rules, there is no more difficulty to be contemplated in the abstract or in general between following the dictates of the foreign jurisdiction as to quantification of damage than there would be in following the dictates of that jurisdiction as to how one measures when something has been sufficiently careless to impose what we call liability.

GAUDRON J: Yes. One of the problems, however, in all of that which you say - and I do not quite know where it comes out in the scheme of things - is there is simply nothing before us as to any relevant difference. Why would we not decide this case when working out inappropriate forum on the basis that the law is pretty much the same, including in terms of liability?

MR WALKER: One consequence of taking that approach would be that the application below could be seen with hindsight as one which should have included details of comparative law, that being one of the matters explicitly said by this Court which should not - - -

GAUDRON J: It might have been sufficient to say by way of affidavit from an expert, "In the following respects, French law is different".

MR WALKER: Quite so, your Honour.

GAUDRON J: And it was not there.

MR WALKER: No, your Honour.

HAYNE J: And, in particular, for your side to put on an affidavit saying, "If we were sued in New Caledonia, the bar for the plaintiff would be higher because they would have to establish X, Y, Z under French law".

MR WALKER: An inappropriate or clearly inappropriate forum stay, however, your Honour, it surely cannot be necessary for it to be demonstrated that there is something in the nature of financial self-interest in the particular case which gives the applicant for a stay a favourable position in order for the exercise of a discretion. There can be reasons of what I will call precedent which will transcend the merits of a particular case by which somebody who has putatively committed a wrong in their own national territory wishes to be tried by those courts.

GLEESON CJ: But if you tapped Justice Smart on the shoulder and said, "What is it about the substantive law of France that, in your view, makes it inappropriate to have that being applied in the law of New South Wales" - - -?

MR WALKER: You will not find it in the record, your Honour.

GLEESON CJ: No.

GAUDRON J: Really, it does not do, I think, to answer the questions that have just been raised with you, in terms of generality. Necessarily, what makes the forum appropriate or not inappropriate in a particular case is going to be very particular to that case.

MR WALKER: We accept that, your Honour.

GAUDRON J: And what has emerged as the particular and central aspect on your case is foreign law.

MR WALKER: Yes. Foreign law being French law, for an accident in French territory, involving a French vehicle, the French design and manufacture of which is said to have caused - - -

GAUDRON J: Yes. Now, all of those, if one was simply looking for connecting factors, would well fit within that description, but when one is looking to "inappropriate court", or "clearly inappropriate court", and there is no indication that the law is, in relevant respects, of significant difference, I come back to what I said. Why not just say, "Well, one of the factors to be taken into account in this is that the law is pretty much the same and there is nothing to suggest that the New South Wales court could not be made aware of the relevant French law and apply it".

MR WALKER: Your Honour understands, of course - your Honours all understand that we are bound to the record. We have taken you to, I think, every syllable, which shows what was before the application judge with respect to the substantive French law, and I accept that it is a fair summary of that that there are universal features, it would appear, with respect to what I will call the responsibility of somebody who has done some thing wrong with respect to the design of a consumer good, which would appear to be more or less in common, at a very high level of generality, between French and Australian common law, relevantly as applied in New South Wales. However, that is at a relatively high level of generality. Then, with some trepidation, we rely upon what your Honour Justice Gaudron has said yourself, and the passage is cited by us in-chief.

GAUDRON J: Yes, but I read that in Oceanic. What that passage that you referred to was directed to was the proposition that the strict vexatious and oppression test was no longer a useful guide.

MR WALKER: That was the issue in that case, your Honour, yes.

GAUDRON J: And it was not directed to the question whether there was any general rule about what should happen in the application of foreign law as distinct from a general rule where there would necessarily involve some application of forum rule.

MR WALKER: No. I accept what your Honour, with respect, says. The passage I had in mind which was from Oceanic 165 CLR 264 that I took your Honours to in-chief is the one which does draw the distinction between the substantive laws of another jurisdiction or sovereignty and what your Honour described as the mere procedural framework of the forum court.

Your Honour pointed out, and with respect we rely again in answer to your Honour's last question, that where:

the selected forum will have no real interest in the substantive laws to be applied -

and we say that is clearly the case with New South Wales or Australia with respect to the design regime in France that -

prima facie it would seem that the interests of justice might be better served by adjudication in the forum of -

in effect that country. Now, your Honour, that was, of course, in the context of a different issue before the Court but as a matter of principle we submit in the context of this case that it is axiomatic that once one divorces substantive law from the procedural framework provided by the same law-making entity as made that substantive law, difficulties of interpretation, which may not be detectable as they are being committed and are therefore the more dangerous, will be created which would not otherwise apply and that the inappropriateness lies as well in those matters that cannot be demonstrated, nuances, as I have put them, in-chief and perhaps more so as they do in what might be called plain differences.

Can I come to the plain differences question, because, with respect, we recognise the force of a comment your Honour the Chief Justice made in relation to the territoriality conceptualisation that we offer in-chief for choice of law. The clearer the territoriality concept is the clearer one applies simply lex loci delicti, then the more straightforward it might be thought, by dint of properly assembled expert evidence from jurispruds or other experts from or about that other country for the forum court to proceed and we accept, we are bound to accept, that if it be a virtue in a law that it is clear and straightforward of application, and it is, that the concept for which we contend is in choice of law plain territoriality of the wrong is one which will make clearer the route for another court in another place, relevantly Australia, to apply.

GLEESON CJ: What does your argument do to the first limb in The "Halley"? Does it leave it to the clearly inappropriate test or deal with that problem?

MR WALKER: No. First of all, we adopt, with respect, some of the suggestions that Justice Gaudron has raised in that regard in this sense that there will be matters very germane to any inappropriate or clearly inappropriate application - not to any such application but some applications - which would clearly apply what might be called a policy filter and it is here that if one needs to distinguish between claims or causes of action, to use our expression, which are alien, and claims or causes of action which are alien and obnoxious, always being careful not to proceed as if the first meant the second.

GLEESON CJ: What would you say to an action for damages in the Supreme Court of New South Wales for the tort of seduction, assuming that the law of a foreign country is the same as our law was 100 years ago?

MR WALKER: First, we submit, it would not be appropriate for the common law country which we are to denounce our relatively recent forebears for whom that was the law as thereby barbaric.

GLEESON CJ: But what is the test we would apply? That is what I am interested in.

MR WALKER: That unless it was obnoxious by dint of, first of all, the positive enactment in this country, for example, that no racist laws would be enforced by choice of law rule. There are already positive enactments concerning, for example, long arm anti-trust enacted by the Commonwealth Parliament of that kind. That is the first one and that is, with respect, trite for me to observe because the Court would be bound by such enactments, in any event. The second, common law or judge-made filter, could be that there was something which could be beyond political contest, that is beyond the kind of contest that would be debated and decided by narrow vote in our Parliament, be clearly seen to be obnoxious to our laws, then one could see that there ought to be enunciated in a suitable case, not this case, an exception to territoriality or lex loci delicti. Now, your Honours, an obvious source of that are human rights norms in relation to which Australia already owes, as a polity, international law obligations.

GLEESON CJ: But you would see nothing inappropriate in a New South Wales judge quantifying the damages that ought to be awarded to a father for the loss of his daughter's services.

MR WALKER: Not if that judge were assisted by experts in the assessment of those damages according to the law of the country in which the seduction or the injury took place any more than it would be to identify just what amounts to seduction or just what amounts to satisfactory demonstration that the daughter provided services to which the father was legitimately entitled to expect a continuation. Now, your Honour, those would be also invidious questions for a New South Wales judge. Invidious because the judge would not be used to such matters any more than a judge is used to the expression of any law for a non-common law country or a non-British tradition democratic country with respect to the form of laws.

That, with respect, is a matter of the skill with which expert evidence is assembled, presented, tested and understood. That is an unavoidable task for any system such as Australia's system in which the courts are entitled to entertain and, from time to time, must entertain cases about events and circumstances and phenomena occurring overseas. That comes with the jurisdiction. That is irreducible. It is, therefore, no objection to the curious tasks, the tasks that might become the stuff of the daily press with cases of the kind that can be illustrated in argument this afternoon.

But, in our submission, it would not be enough to say, "This is alien. We do not have this kind of claim.". There are two answers to that. The first is, "Well, perhaps we should, in some cases", or "We used to, and not very long ago", and in either case questions of what might be called prudent comity, with respect to criticism of another society and of another society's laws, would be, in our submission, the appropriate and principled response by the common law in this country. It does leave, as we have said in our written submissions and repeated in-chief yesterday, open the possibility in an appropriate case for the obvious exception to be provided again by the common law to prevent these courts, our courts, being the instruments of injustice.

If injustice is interpreted sufficiently broadly to include the violation of norms by the recognition of substantive rights and obligations which could never arise in this country in comparable circumstances, then it may be that a form of the first condition in Phillips v Eyre, greatly transformed, and given criteria of practical application, would emerge.

But the criteria are at the heart of the matter. Otherwise, these hard cases that my learned friend seeks to persuade your Honours are sufficiently rare not to require concern about them as a test of concept, these are cases which are going to be headed towards appellate tribunals, if not from time to time ultimate appellate tribunals. That, in our - - -

GUMMOW J: That is right. What do you say about two cases, the Red Sea one and Pearce v Ove Arup [2000] Ch 403, which is a case where the English Court of Appeal entertained an action for infringement of a Dutch copyright, I think, where there was no British copyright?

MR WALKER: Can I do Red Sea first. Red Sea illustrates, of course, the vice of not knowing what the test is, what the criteria are, until one gets to an ultimate appellate tribunal. A law which is left in that state and, with great respect to their Lordships, it is left in that state after the case as well because it is said to be a case-by-case determination, a flexibility which really means adhocery, a law which is in that state is not a law that this Court would find satisfactory by way of pronouncing the common law. All the more reason why this case is not the occasion to explore the limits but, rather, simply expressly to reserve the existence of an exception.

The second thing we would say about Red Sea is that it illustrates by contemplating what might otherwise have been the case the inappropriateness of the first condition in Phillips v Eyre, because if there had been a mechanistic application of Phillips v Eyre, for example, in the same way as the Full Court of Victoria in Potter's Case applied it, then, as we have said in our written submissions in-chief, there would have been a travesty of injustice with respect to either the splintering of a matter, that is, a dispute or, in fact, perhaps the denial of the capacity to adjudicate the real disputes between the parties anywhere.

So that Red Sea, in our submission, represents two tendencies, both of which should be regarded by this Court as strongly indicative of the need to reserve the question of what, if anything, should replace the first condition of Phillips v Eyre. The first tendency is that it illustrates the vice of vagueness. The second is that it illustrates that the first condition understood, as it were, as a text to be applied as if it had been enacted will lead to injustice in cases which are sufficiently clamant of justice that there has to be an exception to it and, therefore, you would have an exception upon an exception and none of that sounds as if it is a proper way to enunciate a principle. As to Ove Arup - - -

GUMMOW J: Which is inconsistent with Potter v BHP.

MR WALKER: That is the first thing to observe. I am sorry, your Honours, I have the All England Report. On the run, I think the only thing I can usefully say to your Honour about that is that intellectual property rights, particularly in so far as they are to be seen as the creature of positive enactment - - -

GUMMOW J: They are in this area It is copyright.

MR WALKER: I was going to say in so far as this is a positive enactment rather than the history originally in a prerogative grant fall to be, and should be, regarded as cases which stand aside from what in this case are simply common law claims, or claims analogous to common law. In our submission, they do provide sufficiently special considerations, one might say, starting with a construal of the grant, to begin with, and they involve peculiarly important matters of the - what I will call territoriality or intended reach of the sanctions for breach which are provided in the Act. In our submission, they will not provide choice of law difficulties. They will provide a different order of difficulty from that which applies in this case.

GUMMOW J: They are cited in paragraph [92] of Pfeiffer, actually.

MR WALKER: Your Honour, I am not saying that these considerations are irrelevant. I am saying that that says nothing about the choice of law for the kind of wrong that emerged in this case because the wrong in an intellectual property case might be called an infringement of a form of title granted. The grantor, the content of the grant and the - - -

GUMMOW J: All I am putting to you is that in many cases the source of obligation in the foreign law will be a statute. It will not be a common law system. We always think foreigners have common law systems. It will be a statute.

MR WALKER: Which will need to be interpreted.

GUMMOW J: Exactly. Now, how then, and why, do you give that, in our country, in our jurisdiction, a greater scope and range than it had in its original home?

MR WALKER: It must not. To the extent that - - -

GUMMOW J: If that is right, what is the rationale of the whole of this choice of law idea?

MR WALKER: Well, certainly the rationale of our argument against the first condition in Phillips v Eyre is to prevent our statutes, or even worse, our common law, worse because less certain, from having an extraterritoriality, Pfeiffer, paragraph [92]. Now, the converse is clearly the kind of problem that was raised but not decided in the High Court in Potter's Case. My learned friend referred to Potter for the dissenting judgment in Victoria. The reference in the High Court is [1906] HCA 88; 3 CLR 479 and it is a reference I give your Honours to show that this issue was raised between what might be called a more conceptual or liberal interpretation of the first condition in Phillips v Eyre argued by Mr Higgins, what might be called a mechanistic or strict version argued by Mr Isaacs, in which he said, unless the very acts, namely infringement of a New South Wales patent, would have been actionable in Victoria then that is an end of it. That was his argument.

Of course, you could not infringe something construed to be territorial and restricted to New South Wales in Victoria, so ran the reasoning, therefore, first limb of Phillips v Eyre you could not sue in Victoria. That issue was presented in the Court. It was not considered by the Court in any of their reasoning.

GUMMOW J: Is it right to assume, or is it a question as to whether these articles in the Code Civil relied on here are understood as speaking universally, understood in the French system as speaking universally?

MR WALKER: I think there is no suggestion that they are understood to apply to traffic accidents in New South Wales, if that is what your Honour is asking me. If universal means - - -

GUMMOW J: As to place of adjudication.

MR WALKER: No, there is no evidence before your Honours as to what might be called the self-denying ordinance whereby they deny the appropriateness of them being applied to govern the outcome in another country's courts for an accident in their own territory. There is no evidence that there is any such law. On my understanding and researches, your Honour, I am not sure that that kind of provision has ever fallen from consideration in a choice of law case for international torts, certainly obviously, not in this Court. When it does there will be a question as to whether - - -

GUMMOW J: Well, wrapped up in that is a characterisation process in the local forum of what a tort is.

MR WALKER: As well as that there would also be a question as to whether to give effect to that kind of provision would be precisely to give an extraterritoriality to another law about how we should administer our choice of law.

HAYNE J: Which again takes us back to what is a court doing in Australia when it, by engagement of conflicts principles, says there is a problem of choice of law. The choice of law that is made by the rule is, "I look to the law of Ruritania as identifying the ambit of rights and duties of the parties", but is the Australian court then saying, as a matter of its common law exercise of jurisdiction, that by the common law of Australia the consequence is that the rights and duties as between A and B now standing for judgment are rights and duties measured, "I happen to find them in the law of Ruritania".

MR WALKER: Yes.

HAYNE J: And if that is so, then any question of extraterritorial effect of the Ruritanian statute at least wears a different complexion. It is not to say there is no problem there.

MR WALKER: No. With great respect, that is our submission. In the paradigm case of a traffic accident in another country, whose laws may or may not speak extraterritorially about their traffic laws - it is hard to imagine a civilised nation whose traffic laws would speak extraterritorially - but they may well purport to speak extraterritorially with respect to the law of recovery for trespass or negligence or delict. It would not arise as to whether you were recognising an inappropriate or obnoxious extraterritoriality if all one was doing, as a matter of Australian common law in a New South Wales court, was using the Australian choice of law common law rule to say: the law that governed in that village in France - forget what France's imperial ambitions were for the United States - just concentrate on what covered in that village in France, at that crossroads. And if it said: X, Y and Z, the one on the right pays the one on the left, and pays three years' salary, then that is liability, and that is damages, in New South Wales.

Now, that will not matter - as I think your Honour Justice Gummow has pointed out - by whatever form the law governing in that village in France is found, whether it is in case law, whether it is in a code, whether it is in local law made by a council - so long as it is found as a matter of fact, by appropriate evidence and presumptions permitted by the evidence legislation, to have been the law governing. It then provides what might be called the referent, or the content, for our law to adjudicate that dispute.

Your Honours, as to damages then, we say - turning one of my friend's arguments on its head - how can one posit that there would be different expectations as to the content of a right - that is, how much it is going to cost to give someone the measure of their right as to the existence of the right? The expectation must be the same; it may only be lawyers who go around distinguishing between liability and quantum. Most people would say, "I have been found liable to pay x" and regard themselves as talking about one unitary state of affairs.

There are, of course, some quirks that would need to be worked out, which would not apply in this case and therefore need not deter the Court. They are referred to in some of the older cases with respect to some very practical laws that obtained in the British Caribbean before the United States Civil War where, for example, it appears that verdicts could be ordered in sugar rather than in money. The fact that the United States could not order remedies in sugar, but could only do so in money because of the statutes that commanded the United States courts as to what forms their order could take and what things the sheriff could do, such as seize goods and sell them for money to deliver to the plaintiff, raises a question, which need not be faced by this Court, as to whether there can be, as it were, some mutatis mutandis transformation for certain remedies.

GLEESON CJ: That example you just gave of a law saying damages would be three years salary is an example of a wider problem, is it not? Laws capping damages or limiting the kinds of damages that may be recovered are often enacted against a wider background of a social security system and their fairness depends upon the assumption that the person who is suing for damages has the benefit of access to that wider social services system.

MR WALKER: Yes.

GLEESON CJ: An Australian travelling in France may not, or would not, have such access, but the rule for which you contend, nevertheless says, the French law capping damages applies.

MR WALKER: Yes, it does and it necessarily embraces the dislocation of the policy behind a law and the expression of a law, such as a cap, to which your Honour has drawn attention. The converse also applies. The same person being a New South Wales resident may get, for example, free education for children, free medicine and other matters which are provided by the State, and it is taxpayers past and present, which would not apply to the people in France.

So that there may well be that for such matters, because it is recognised that all laws are special or local in the sense that they are made by or for the people in a particular territory, they will be the outcome, good or bad or indifferent, of the political calculus from time to time which will obviously include a lot of fiscal and welfare style considerations.

It would be impossible, however, to seek to capture any microcosm of the social conditions which put a particular law into context, so as to make an allowance when you are applying it under choice of law in another jurisdiction, in our jurisdiction. Swings and round-a-bouts, we would respectfully suggest, is the appropriate response and it is no more to be considered that the New South Welsh person would be worse off by suffering a cap in a New South Wales court under French law, as to suppose that a French person would be better off conversely.

Your Honour the Chief Justice raised with my learned friend from Oceanic at the foot of page 252, whether there was not in the oft repeated, illustrated at that passage, reference to the right of a person who has regularly invoked a jurisdiction, an important argument in his favour. In our submission, it is an argument, but not important in the sense of being weighty or decisive, for the reasons identified amongst other places, in this Court's judgments in Henry 185 CLR 579 point 8 for example, and page 588 to 589.

My learned friend referred to the possibility which is, throughout the written submissions on the other side, that what this Court should do if it is minded to attend to the choice of law problem at all, is to devise a law which is crafted specifically for what he calls "product liability cases". In our respectful submission, the term "product liability cases" raises more questions than it could possibly answer, and the very example which he gave as the "need in policy and social reality", to distinguish between that and other categories arises in a way which defeats his purpose. A rotten pie at football match in Sydney, eaten by a tourist, is as much a product as car which overturns and crushes in New Caledonia. How one distinguishes, without the kind of arbitrary limits which a Parliament might put in by financial limits updated from time to time, or not as the case may be, one would not know. It is not, in our respectful submission, the stuff of a common law creation.

KIRBY J: But the reality, on the evidence, at least as it stands, seems to be that if the respondent cannot pursue his case in Australia, the very high likelihood is, by reason of the inability to get a local lawyer, by reason of the absence of contingency fees, by reason of his own disabilities, that he will not go ahead.

MR WALKER: No, your Honour, that is simply not the evidence. Nor is it the evidence that one cannot get cheap lawyers in New Caledonia - - -

KIRBY J: What, for a big case taking on a multinational with all of the expenses that would be involved in having witnesses from foreign countries?

MR WALKER: My own advance of my answer, withdraw the epithet "cheap" because of the person I am about to speak about. But, your Honour, in this country, in New South Wales, he has obtained the services of Mr Kelly and counsel briefed by Mr Kelly. Is it to be supposed that there is not lawyers of similar preparedness and calibre in France? I draw attention to appeal book page 85. It is true, the notion of the New South Wales spec brief, from the Bar's point of view, is not, in terms, apparently, blessed by the Bars in question. However, we have, in paragraph 7 on page 85, a barrister who is one of those, as she says in the previous page, who can appear as well in Paris as she can in New Caledonia, and in paragraph 7:

it is possible -

she says -

to enter into an agreement to appear for a party for a very small fee and to enter into an additional arrangement whereby, if the party is successful, a further fee will be paid to his or her lawyer.

It is a remarkably lawyer-like response to what apparently is a prohibition on a no success fee arrangement and, with respect, it is not something that bodes ill for somebody with a case that could attract, on the merits, the kind of support it clearly already has attracted in New South Wales. It is not to be supposed Mr Kelly would be dumb in his advocacy of a colleague in New Caledonia.

The learned judge in the application obviously considered these matters and this was one of the number of matters that your Honours have read in his reasons which led, amongst other things, to the conclusion in appeal book 221, line 20, that these, and procedural matters, such as the discovery and documentary hearings that your Honours have heard about, and I quote, "would not preclude a fair hearing".

Could I then move, in relation to - and my learned friend, appropriately, given the evidence to which I have just drawn attention, would seek to emphasise the very next sentence in those reasons. That is a problem which, as your Honours know, the judge went on to deal with.

Could I remind your Honours that there were conditions imposed as part of what we call the second stage, that is the truly discretionary question whether there should be a stay, there being a clearly inappropriate or inappropriate forum. They are found - I will not take your Honours to them - by way of the pronouncement of orders, appeal book 229, and the reasons for them are explained at appeal book 227.

In our submission, they are an appropriate discretionary outcome of a kind which, in accordance with House v The King, particularly in applications in which this Court has said that appeals ought to be rare, would attract considerable respect and reticence in relation to appellate interference.

Your Honour Justice Kirby referred to the golden rule, "Do as you would be done by" and, with respect both to choice of law and to the clearly inappropriate or inappropriate forum application, one can turn the tables and apply some other case such as this. An American resident in Connecticut has enough money to fly first class across the Pacific to enjoy a holiday in Australia, including New South Wales, and there drinks a fine New South Wales red wine, wholly consumed in New South Wales, having been grown, perhaps rarely, in New South Wales, purchased in New South Wales, perhaps by someone else so that there is no contract claim, just tort. Weeks later, on equally expensive return to Connecticut develops, say, a skin condition which he or she wishes to seek compensation for from the generous Connecticut jury.

Now, in our submission, the notion that there would be by dint of the reasoning that Mr Justice Clarke found himself compelled to in Thompson v Hill an application of Connecticut law to whatever negligence was alleged as to the supposed contaminant in the wine or that there would be a rejection of the possibility of this case about a New South Wales good produced according to New South Wales food purity laws, served according to New South Wales health regulations in a New South Wales transaction, that it should not be regarded as a claim where a clearly inappropriate forum would be Connecticut or any other jurisdiction around the country compared with New South Wales.

KIRBY J: Well, it might be surprising to you to know that I was very sympathetic to that because I have said so over a decade or more, but Mr Margo has planted in my mind a thought that maybe that is an old-fashioned view that, as with, say, universal jurisdiction, which is developing, we have to be prepared to acknowledge that the use of local courts in appropriate countries is something which is a natural development of a world in which people are moving around and products and services are moving around all over the place now.

MR WALKER: Well, one answer is, of course, the answer your Honour raised in argument this morning, and that is that if one knows that the law of the place where you are when something dire happens to you will be the law that will govern in your own jurisdiction, if you are an Australian that is and the common law is Australian - if one knows that that is going to govern the outcome, just as it governs the outcome of your conduct which might be criminal, because no one ever doubts that, then, of course, the obvious expedient is that which permits a lot of law to be workable, namely insurance.

In our submission, there is nothing in the talismanic word "global", which, to any degree at all, removes the startling consequences that your Honour identified in such strong terms in Voth, in the Court of Appeal, where a case in the example I have given, which occurs wholly within New South Wales about good honest New South Wales wine, finds itself being litigated in Connecticut. Furthermore, under American procedural laws, and under American substantive law and, in our submission, that is bizarre, as your Honour said, and it remains bizarre.

Now that is the golden rule test of what my learned friend is asking for. French design, French manufacture, French territory, accident on France, warnings to slow down in the French territory; it is a French disaster. Now it has consequences in New South Wales. It will have consequences in South Australia if Mr Zhang emigrates to Adelaide. It will have consequences in Malaysia, if he goes to Malaysia. Trailing the consequences, that is residency, is the least powerful, in our submission, of also called connecting factors.

McHUGH J: If the relevant law to be applied in New South Wales is French law, do not the equities of the case suggest that the case should be tried here.

MR WALKER: I am sorry, your Honour.

McHUGH J: The equities of the case, the justice of the case, given the plaintiffs' situation.

MR WALKER: I do not think I heard your Honour's last word.

McHUGH J: If you begin with a premise that the appropriate law to be applied is the law of France, then do not the equities of the case overwhelmingly point to New South Wales being the appropriate jurisdiction?

MR WALKER: That is using "equities" to mean matters of - - -

McHUGH J: The merits, justice for the - - -

MR WALKER: No, matters of human sympathy.

McHUGH J: No, not human sympathy at all.

MR WALKER: But your Honour has no, with respect, information about the merits of the case.

McHUGH J: We know things like he cannot get discovery, he cannot administer interrogatories.

MR WALKER: I am sorry, I thought your Honour meant the merits of who should win.

McHUGH J: No, we are talking about procedures.

MR WALKER: Your Honour, that is where we ought, with great respect, be extremely slow to attribute to a system which uses less paper by way of production and more paper by way of contest is thereby a worse system than ours. We produce a lot of paper and your Honours who have sat at trial will recall the barricades of paper which have been produced and how little is actually used in the contest. A converse system is not self-evidently a worse system.

McHUGH J: No, I am not suggesting it is, having been brought up in the common law system and being a great believer in the adversarial system for most of my life, I am coming around strongly to the view that maybe we have to adopt the continental system if our system of justice is to survive.

MR WALKER: Which means if one is to talk about merit and not meaning who should win or who looks likely to win and one talks about how it is going to be determined, then, in our submission, the very comment that your Honour has just made is one which would add further force to the proposition that this Court would never, except in cases that are wholly removed from the present one, decide an inappropriate forum case by saying the way they do these things is worse than the way we do these things.

GLEESON CJ: But even when you talk about merit, if you take international examples, you can skew the merits by simple selection of your example. People who travel first class from Connecticut to Sydney are in no different condition legally from people who travel by car from Connecticut to the southern part of Canada.

MR WALKER: Quite so, your Honour.

GLEESON CJ: You could take a car trip in an afternoon from the United States of America to Canada and it is not the result of a huge increase in globalisation or facility of air travel that people are able to do that, they have been able to do that for 100 years.

MR WALKER: No, I entirely accept that, and one can have all the examples in between, including those which are so equivocal as to strike every present listener differently, as to who is the one more deserving of sympathy. In our submission, no, in response to your Honour Justice McHugh's question, there are no equities, discernible or so clearly discernible here, as to overthrow whatever was legitimate for Justice Smart to take from the fact that this was an accident in French territory, in a French car, where the French design and manufacture is said to have been the cause of the terrible injury.

Now, that brings us back to the point of the appeal. The point of the appeal is that because he was said to have erred in first thinking about a topic, and second probably getting it wrong, a discretionary judgment of a kind which classically would otherwise have been left alone, was re-exercised, overturned to be re-exercised. The error in the Court of Appeal, we have already identified, Voth makes it crystal clear that what he did was fundamental, that is, it was a fundamental matter that he looked at. That abolishes the idea that he should not have looked at it.

The other element in Justice Stein's reasoning was, he probably got it wrong. Arguably incorrect, the paraphrase following the words "if not incorrect" in paragraph 43 of the reasons.

It is clear that Thompson v Hill is not seen as some useful indication of what might be the law, but by the repeated use of the word "authority" or "authorities" in connection with it, in those two pages of Justice Stein's reasoning, it is clear that it is being seen as the law, and not just because the reasoning of Mr Justice Clarke appealed to Justice Stein, that is, two individuals, but because it was the reasoning of a Court of Appeal decision. Now that was an error and, in our submission, it was an error because it is not the true understanding of the common law that the operation of what has been called the first and second conditions in Phillips v Eyre means that once you satisfy that there was something wrong in France, then that is the end of the law of France. It becomes, to quote from Mr Justice Clarke, "an irrelevance", and the reverse is the case.

The reverse is the case as your Honours will know from our written submissions - I think it is footnote 29 - that we have observed that in any event, no doubt unfortunate because of what appears to have been a lack of citation or argument, a more recent Court of Appeal in Grigor, to which attention was drawn for another purpose yesterday, has in fact proceeded very plainly to assume that the wrong committed in New Zealand, in that case, would be governed so far as its adjudication in New South Wales was concerned, by the law of New Zealand, correctly so we say, with great respect to the Chief Justice and the President.

So, in our submission, it is very clear that, stripped of what your Honour Justice McHugh calls the merits, and regarding those as being matters that Justice Smart has anxiously considered, as is clear from his reasons, the narrow issue in this case was: is Thompson v Hill, used by Justice Stein to justify finding a House v The King error in the discretionary judgment of Justice Smart, right?

McHUGH J: Well, I am not sure that that is what the case is all about. One view is that both courts got it wrong, and that although the Court of Appeal was wrong to say it was not necessary to determine the appropriate choice of law, having regard to what seems to be the nature of the issue in this particular case, given French law is the applicable law, Justice Smart should not have given it anywhere the weight that he did. This is not a case that seems to me, at the moment, where there is going to be a great deal of dispute as to what the law of France is; where you are going to have to bring out experts, at great - - -

MR WALKER: No, your Honour. We accept that, your Honour.

McHUGH J: Yes. In such a case, it may be an important factor in holding that New South Wales is a clearly inappropriate forum. I just have an open mind on it, but I do tend to think that Justice Smart just gave too much weight to this question of the matter being governed by French law.

MR WALKER: Your Honours, I am conscious of the time, and I know this is going to be a repetition. May I attempt to answer that point this way. There is always capacity, under appellate principles such as are tagged by reference to House v The King, to be so shocked, or taken aback, by the outcome of an apparently regular exercise of discretion - that is, one which is correctly self-directed, and which takes into account relevant matters, and does not take into account irrelevant matters - as to properly overturn it on appeal. And we accept that; call that the residual category of shock, under House v The King. For a case where the connecting factors can be narrated, however, as they can in this case, rather more, in our respectful submission, than you would find, for example, in Oceanic - bearing in mind Oceanic was a contract case, where a critical matter concerned what was agreed or not agreed in Sydney - and in Voth, and in our submission, it cannot be said that this was a shocking outcome of either the first or second stage considerations.

It is emphatically not an appropriate appellate response to observe disagreement in oneself with a discretionary judgment or a judgmental outcome where there is a spectrum of possibilities and, therefore, to detect appealable error. In our submission, that is precisely why, in the Court of Appeal, it was not enough simply to say, "If this were our discretion or judgment to exercise, we would have done it differently". First, there had to be gone through the exercise which is essential, particularly in this kind of application. This Court has gone out of its way to provide, as it were, an admonition of practice, of approach, to application judges, "Don't overelaborate these applications. Don't spend too much time on them. Don't give treatises on comparative law in your reasons", for example. Now, in our submission, one cannot send that message, as this Court has explicitly and implicitly - - -

McHUGH J: Have we said it in terms that they should not deal extensively with the choice of law?

MR WALKER: No, we have not - - -

McHUGH J: Because it does seem to me that it is a matter that ought to be dealt with and dealt with at length on these stay - - -

MR WALKER: No, I am sorry, I have been misunderstood if your Honour has the idea that I have said you should not attend to choice of law. It is fundamental that the application court does. That is why Justice Smart was right and Justice Stein was wrong.

McHUGH J: Yes, I am inclined at the moment to agree with that.

MR WALKER: All such findings, of course, are provisional, in the sense that they are only for the purposes of the stay application, that is, they are not final and binding. These are said to be applications which ought to be done on the papers in this country, submissions in the minutes rather than the hours, and it not being ordinary for the judge "to do more than" - and I am quoting from Voth at 565:

briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view -

et cetera. That is by way of contrast from giving detailed reasons.

McHUGH J: It seems to me that unless a definitive judgment is made at the stay stage about the appropriate choice of law, the parties are put to great inconvenience. They do not know, in terms of preparing their trial, what is the appropriate law. They may have to, if the action continues in the forum - - -

MR WALKER: Your Honour, Justice Callinan has raised those matters as well and, with great respect, from the point of view of counsel for a party in this case, the answer is emphatically yes.

McHUGH J: The only practical solution would be if you were held to the jurisdiction of New South Wales that you would have a Part 31 rule 2 case set aside as a separate question to determine the appropriate - - -

MR WALKER: Or this Court, in the course of ruling on our argument, which is the Court of Appeal was wrong to say Thompson v Hill falsified Justice Smart's finding, in the course of that for the Court to indicate that for defect in France alleged to cause a consequence in French territory lex loci delicti is French law, but notwithstanding, if you were against us for other reasons, if there are available other reasons, which, of course, we urge there are not, that would mean that the case procedure in New South Wales with at least a practical advantage of, your Honour calls it definitive, it would be simply again only for the purposes of the application but I doubt whether there would be at any stage unless the facts radically changed so as to relocate the accident - - -

McHUGH J: There is a dictum of Lord Justice Diplock, as he then was, that once a ruling is made in an interlocutory proceeding on a question of law, then one does not depart from it and we referred to it in Bass' Case.

MR WALKER: Your Honour, it is of no practical import in this case if this Court were to say that by reason of the facts which are pleaded and unless they are departed from that will be the case, of course, the lex loci delicti which ought to be the choice of law is that of France, then the practical consequences that your Honour Justice Callinan and your Honour Justice McHugh have raised would not trouble us in this case. Your Honour has asked me a question, however, transcending this particular case.

GUMMOW J: The problem then is, in other cases, of course, it depends on who pleads Phillips v Eyre - - -

MR WALKER: It does and it raises for consideration whether it is appropriate. These matters which, I repeat, have been said by this Court to be ideally dealt with peremptorily and, therefore, of course, ideally without any defence because these are people who have put on what used to be called conditional appearances, whether or not it is appropriate for the matters which will indicate the role of choice of law issues to be debated before there are pleadings between the parties, but that is a question of practice and procedure.

HAYNE J: Because it will be brought to a head by the defendant who is the moving party coming to court and saying something like it. It would be inappropriate to sue the defendant in a jurisdiction like this where negligent failure to advert to danger will found liability, when in the law of the place where it happened and where the defendant operates, what must be shown is distributing an item where it is known to be defective or some such precise identified statement of that kind, rather than a debate at the generality and level of abstraction that much of this debate has occurred, which law governs.

MR WALKER: We accept the stricture, your Honour - - - -

HAYNE J: Because, for example, let it be assumed that product liability in France, in the hand of the consumer, is in truth a contractual claim, not a delictual claim.

MR WALKER: Your Honour means, in effect, no snail in the bottle.

HAYNE J: No. That the claim that the injured party has is truly to be characterised as one of contract.

GUMMOW J: No need for Donoghue v Stevenson, because it flowed in contract.

MR WALKER: Yes.

HAYNE J: You are erecting then windmills all around the courtroom, at a very early stage of the proceedings, simply to tilt at them. Now it is for the defendant to come along, having been regularly served, and say, "Not here because", and it has got to be at a level of specificity.

MR WALKER: Well, I think one looks in vain in Voth to what might be called crevasses between Missouri and New South Wales so far as the standard of care of an accountant, and one does find a reference to the appropriateness of being judged by a tribunal sitting in the community in which you are working. Now that is a nuance thing, as I was putting in-chief, your Honour.

HAYNE J: That is a product of the particular facts of the case. I mean, the example I give about contract liability is not drawn from the sky, Mr Walker; it is drawn from page 74 of McLachlan and Nygh's Book of Essays.

MR WALKER: Which unfortunately is not an annexure to any affidavit in the record, your Honour.

HAYNE J: No, it is not, and therefore the point is simply put as a hypothetical to you.

MR WALKER: Quite so, your Honour. We do not have that in our record. We accept that stricture. What we do have is the fact that it is French law and I will be repeating myself if I go back to again the desirability for the reasons, we say, were imminent in the decision in Voth, namely that there ought to be a decision on French law's application to facts in France by a French court.

McHUGH J: An article I read by Simon called "European Product Liability Rules" in 48 International Comparative Law Quarterly, I think it is, seems to suggest that the French have interpreted that Article 13.81 by abolishing any privity of contract requirements and just treating it as a strict liability field, that if you were the manufacturer and you put something into the marketplace, then you are strictly liable for it if it has any defect which is a danger to any person who ultimately is injured by it.

MR WALKER: I think that is the second piece of advice from your Honour which will no doubt be listened to by those to my right. It leads to this serious point, though: your Honours have not heard, except implicitly by an endorsement of Thompson v Hill, from the respondent as to whether they say the law of France or the law of New South Wales will govern questions of liability and quantum in the proceedings between these parties. Paragraph 16 has been, with respect, probably explained as being a preface or set-up for what follows and has had nothing to do with what precedes, although query. We do know that what might be called the simple defective design case, there would appear implicitly to be a continued insistence that it is the law of New South Wales that will decide that, a law that one might well think would not be as favourable to the plaintiff as the law that your Honour Justice McHugh has referred to as the possible view of the French law.

We maintain we are not here to say that there is some legal or juridical advantage by reason of us being less likely to be liable under French law. We say that this is a matter which under Australian choice of law rules falls to be determined under French law, be that more or less generous to the plaintiff, and because it falls under French law and has to do with events in France or French territory - and then I will be repeating myself for the seventh time.

CALLINAN J: Mr Walker, why is not Justice Stein right at page 345 when he describes New Caledonia as a geographical compromise?

MR WALKER: He is right. That, actually, is a fair summary of what fell between Mr Conti and particularly Justice Beazley. For example, in appeal book volume 2, 295 and following - I will not take your Honours to it - where it was made clear that the emphatic subjection, if it be needed, to the jurisdiction of the New Caledonia courts manned, it is proved, by French judges - I should say that that was in order to draw the sting from the geographic distance to Paris and it was a compromise in geographic terms.

CALLINAN J: But a compromise offered by your side.

MR WALKER: A compromise offered by our side as we offered to pay for this case and are paying for this case and as we willingly accepted the condition imposed by the judge below, namely, that the court expert would be funded by us and not by Mr Zhang - a matter no more exceptionable than the fact that we bear the costs in this Court, in any event.

Your Honours, could I briefly give you a reference? I think your Honour Justice Gaudron raised the question, whether the cognisability of enforceability of foreign judgments was a matter that ought to be taken into account or ought to be ignored. One aspect of that, perhaps the converse of what your Honour was asking about, was referred to as a matter to be taken into account, and for obvious reasons in Henry at 185 CLR 592 point 7. I will not go to it.

Your Honour the Chief Justice raised the possibility that I have already referred to, namely that if it be correct that in Oceanic the law governing the dispute between the parties, there including contractual matters though not confined to them, was not identified during the course of, or for the purposes of, that application, then this case is a fortiori one in which the application should have been decided differently.

First of all, with respect to what was the approach taken in Oceanic, Justices Wilson and Toohey touch on the matter at page 207 to 208 and find, in effect, that Greek law would govern important aspects of the case at page 217 to 218. Justice Brennan at page 231 to 232 takes a different approach. Justice Deane at page 256 does, with respect, appear to leave it more or less open, though recognising an important role for both Greek and New South Wales substantive law in the balance that his Honour performs, which finally turns on the application of the notion of something being clear. Justice Gaudron equally appeared to leave it open, but preferred to speak in terms of what was fairly arguable at page 261.

Could I then move to another matter your Honour the Chief Justice raised which was, as it were, the pedigree of the word "clearly". I do not claim that this is exhaustive but in terms of what has been overt in this jurisprudence in this country, one can perhaps start at the collection of former authority, particularly the Scottish approach in Lord Goff's speech in Spiliadi, and the particular references are [1987] 1 AC 477D and G, 478C, 484E to F where the word "distinctly" appears to be treated by his Lordship as an acceptable synonym.

As to the Latin in the matter, which may also be relevant to the way in which the concepts have been Englished in the rules and have been talked about in our authorities, see Lord Goff in the same speech, pages 474E to 475C, and see by way of comparison Justice Deane's Latin superlative used in Oceanic at 165 CLR 249 where, by way of emphasis, and before adopting the English language word "clearly" his Honour uses a Latin superlative inflection to convey what he considered to be the true meaning of both the American and the English law.

Your Honour Justice Kirby asked about questions of conceptualising. We have tried to do that by our territoriality principle. We have tried to do it, for example, in paragraph 27 of our written submissions in-chief. So far as comparative law is concerned, we have given to your Honours' associates a full copy of the case which we have quoted from verbatim in paragraph 22 of our written submissions in-chief, which is the decision of the Supreme Court of Ireland, Grehan v Medical Incorporated (1986) IR 528. The passage quoted at paragraph 22 is a passage which I think answers one of your Honour Justice Kirby's requests with respect to how the matter has been approached elsewhere.

Could I draw attention, as well, to a passage appearing just an inch and a half above that on the very same page, (1986) IR 541, in the very middle of the page, where the first part of the rule in Phillips v Eyre is particularly addressed by his Honour who says:

it -

that is, the first condition in Phillips v Eyre -

would close the door of the court to every action in tort not recognised by Irish law and would require the application of Irish law even though the case had no connection at all with Ireland except -

and this is another of the possibilities -

that the defendant perhaps took refuge there after the tort was committed.

Perhaps an Irish view of the black possibilities. Your Honours, that is wholly consistent with paragraph [92] of Pfeiffer.

GLEESON CJ: How long do you expect to require?

MR WALKER: Ten seconds, I think, your Honour. The position in Canada, the United States, and also Hong Kong - to be gathered from Red Sea - has also been referred to in our written submissions in the same paragraph 22, (vi), (vii), (viii) - as to Ireland, and Red Sea in paragraph 25. May it please your Honours.

GLEESON CJ: Thank you, Mr Walker. We will reserve our decision in this matter and we will adjourn until 9.30 tomorrow morning in Sydney and Canberra. You divided the time between yourself and Mr Walker. Is there something further you want to say?

MR MARGO: No, your Honour. Well, just this: that in the reference I gave to Pickles, I omitted to draw your Honours' attention to the fact that there is a dictum of Chief Justice Latham, that is referred to in Pickles, which gives a contrary view of what the pleading rule should be in Phillips v Eyre. It is referred to in the passage I refer to, but if I did not tell your Honours that, you might not find it.

GLEESON CJ: Thank you. We will adjourn until tomorrow morning.

AT 4.18 PM THE MATTER WAS ADJOURNED