CHOICE OF LAW ISSUES.

INTRODUCTION

The choice of law question only arises if a court in the forum has jurisdiction to determine a case, and
does not consider that it should decline to exercise that jurisdiction. The result in a choice of law case
does not only depend on the choice of law rule relevant to the case. It is often just as important to
identify the point at which a court must decide whether there is a need to invoke a choice of law rule,
and how that rule is to be invoked.

REGIE NATIONAL DES USINES RENAULT SA V ZHANG

 Matter before the court was really about jurisdiction

-Doesn’t mean NSW court was the only court – France, New Cal and NSW may have had
jurisdiction

 French court has jurisdiction

Territoriality according to French law?

 New Caledonian Court has jurisdiction

No territoriality (defendant not within jurisdiction) but tort within forum according to New
Caledonian law

 New South Wales has jurisdiction

 No territoriality (defendant not within jurisdiction)

 Rely on ground of jurisdiction claimed in NSW UCPR Sch 6(e) – damages

suffered in forum

 NSW found that it was not a clearly inappropriate forum to hear the matter

o Whichever court hears the matter has to decide how the matter will be dealt with

 Has to decide what law to apply to resolve the dispute

 Indicative rules indicate to the court what body of rules to resolve the dispute
  Dispositive rules are rules that dispose of the matter (lex causae)

The process by which the court determines what the indicative/dispositive rule is called the choice of
law method. Thus, the choice of law rule is a jurisdiction-selecting rule. In its simplest form, a choice of
law rule will therefore specify a juridical category (such as the formal validity of marriage or tort) and its
associated connecting factor (such as the place of solemnization or the place where the tort occurred)
that effectively selects a legal system.

CHOICE OF LAW METHOD

The choice of law method is the method by which court determines whether a choice of law rule is
invoked in a particular case. The approach taken is not prescribed by law, and not necessarily always (or
habitually applied):

 Requires one of the parties before the case to raise the issue before the court.

 Quite often it is the defendant, because plaintiff initiates action in forum assuming forum law
would apply

There is an element of circularity in the choice of law method – may come into the process at any of the
stages. Often the method is determined by area of law (multi-state marriage and property better
adapted to method than contract):

 If the dispute is about tort, fairly obvious to those dealing with matters that it is obvious there is
a private international law issue

 In other areas it is not quite so clear

FIVE STEP PROCESS

1. Identification of a conflict of laws

- Identification of the possibility that a foreign body of law might apply

2. Classification of the subject matter

- Need to conceptually classify the matter as one of contract/tort/property/marriage before you can
determine the choice of law rules, and then dispositive rules that apply

3. The classification of substantive or procedural law

- Procedural laws are lex fori

- Substantive laws may be foreign laws

4. Identification of choice of law rule

- What is the Australian rule that tells you whether to accept the foreign law

5. Application of the law of the cause

- At the end of the process work out whether the plaintiff will succeed on the matter

Law Issues:
If a person is domiciled in Australia or usually resident in Australia, Australia will have jurisdiction even if
the cause of action arises somewhere else. Australian courts will always have jurisdiction over you as an
Australian resident.

1. CONTRACT

i. Contract made in the forum

 Not necessarily clear what ‘made in the forum’ means

- Most common way is where acceptance of contract is in Australia

 Where last act necessary to create a binding contractual obligation occurred: Deer Park
 Engineering v Townsville Harbour Board
- Place where the offeror received official communication of acceptance of the terms of the
agreement

 Clause in agreement stating where contract is made is not conclusive of the place the contract
was made as this conclusion is ascribed by law, not the agreement of the parties:
Sheldon Pallet Manufacturing Co Pty Ltd v NZ Forest Products Ltd.

ii. Breach of contract within the forum

 Doesn’t mean that every part of the breach occurs in Australia, but the breach alleged must
occur in Australia

 This can occur even if the contract is made somewhere else

 Most common is failure to pay

 To justify service on this ground, the plaintiff must show that

 The action is ‘in respect of’ or ‘founded on’ a valid contract

 There was a breach of that contract

 The breach took place in the forum

- Obligation which plaintiff alleges has been breached must be one which had to be performed
in the forum
- If plaintiff alleges that it is the performance of an act that constitutes a breach of contract, the
breach is taken to occur where the act took place:
Safran v Chani

iii. Contract is governed by the laws of the forum (proper law of the contract – forum clause)

 When deciding whether service outside Australia can be justified on this ground, the court only
has to be satisfied that there is a good arguable case that the proper law is the law of the forum,
and therefore the court’s investigation need not be as thorough at this point as it must be at the
later time when the court is determining the proper law of the contract at trial
The use of ‘contract’ doesn’t mean contract strictly – it could be an assignment of a right (also falls
within this head of jurisdiction), actions brought by a third party in respect of a contract made by others,
and actions relating to other obligations to pay a fixed sum of money that are imposed by law.

2. TORT

i. Cause of action arose in jurisdiction (FCA, HCA, NSW, QLD, Tas) – wider than simply torts

 Cost of hospital treatment in NSW was sufficient for NSWSC to find that it had jurisdiction:
Renault v Zhang

ii. Tort committed in forum

 In all jurisdictions, service outside Australia is permissible in an action ‘founded’ or ‘based’ on a

tort committed in the forum

 The tort was failure to inform about the risk of thalidomide: Distillers Co v Thompson

 Agar v Hyde (2000) 201 CLR 552

 Dow Jones & Company v Gutnick (2002) 194 ALR 433

iii. Damages suffered in the forum

 Injury sustained, in whole or part, in the forum, from a tort, wherever occurring

 In order to determine whether damages wholly or partly suffered in jurisdiction, have to be

careful of what the tort actually is
- As soon as Australian courts say all they need is part of damages within forum, the court will
readily accept jurisdiction
- Not just terms of damages in terms of paying out money, also pure economic loss
  P injured in accident in Qld incurred damage after returning to NSW because she needed further
treatment in Sydney and suffered economic loss as a result of reduced earning capacity: Flaherty
v Girgis (1985) 4 NSWLR 248

 Regie National des Usines Renault SA v Zhang (2002) 210 CLR 491

 Dow Jones & Co Inc v Gutnick (2002 10 CLR 575 at 622

 These lead to the possibility that jurisdiction exercised only on the basis of the plaintiff’s
residence

DISTILLERS CO V THOMPSON (1971)

 Court required to determine

- Whether alleged wrong constitutes a ‘tort’; and
- Whether occurred to a sufficient degree in the forum

 The tort was failure to inform about the risk of thalidomide

- If it was negligently manufactured outside Australia, don’t have jurisdiction about negligent
manufacture
- Tort was failure to warn in NSW where they submitted the drug

DOW JONES & COMPANY V GUTNICK (2002) 210 CLR 575

Gleeson CJ, McHugh, Gummow and Hayne JJ (at 607):

It is only when the material is in comprehensible form that the damage to reputation is done and it is
damage to reputation which is the principal focus of defamation, not any quality of the defendant’s
conduct. In the case of material on the World Wide Web, it is not available in comprehensible form until
downloaded on to the computer of a person who has used a web browser to pull the material from the
web server. It is where that person downloads the material that the damage to reputation may be done.
Ordinarily then, that will be the place where the tort of defamation is committed.