Posts Tagged Australia
Update 26 May 2020 Michael Douglas has abnalysis here.
Update 20 MAy 2020 see in the meantime also review by Jie (Jeanne) Huang, here.
Thank you Michael Douglas for alerting me to Bao v Qu; Tian (No 2)  NSWSC 588 at the Supreme Court of New South Wales. The judgment does not require an extensive post. I report it because it is a solid application of the recognition and enforcement principles of foreign judgments under the common law of Australia. Hence good material for the comparative conflicts folder.
McDonald v Broadspectrum. When does a claim by an employee against her employer ‘relate to’ the contract of employment?
 QSC 313 McDonald v Broadspectrum can go straight into the comparative binder – thank you Angus Macinnis for signalling it. A teacher employed by Broadspectrum on Nauru, sues it for personal injury. Amongst other things, Ms McDonald alleges Broadspectrum failed to provide a safe place or system of work, to warn her about the mould contamination, to provide protective clothing or respirators, to prevent exposure, and to provide adequate ventilation, in each instance in Nauru.
Broadspectrum applied for a declaration at the Supreme Court of Queensland that the substantive law applicable to her claims is the law of New South Wales and for an order setting aside or staying and transferring her claims to the Supreme Court of that State.
The relevant compensation schemes, in Queensland and New South Wales, each exclude from their scheme an employer’s liability arising under the law of another country. Bradley J however held that lex loci delicti is Nauru law, which therefore is lex causae. The argument that the employment contract contained implied term to the contrary was rejected.
As I discussed with Angus, I was confused by the court’s qualification of the facts as ‘tort’ (particularly as it also refers to claimant’s argument re forum contractus being Nauru); is this not a contractual claim rather than one in tort? (and one relating to the employment contract, for that matter). Angus however pointed out that in Australia workplace injury claims are usually brought as tortious breach of care claims rather than breach of a contractual obligation to provide a safe system of work. Comparatively speaking, the EU approach would probably be different. For a comparative (consumer contracts, health and safety) angle see e.g.  EWCA Civ 1889 Committeri v Club Med.
On the issue of concurrent liabilities and EU PIL see recently also Bosworth.
A bit of a late note on an interesting case for the comparative binder. Thank you very much indeed Sarah McKibbin for flagging Tiger Yacht Management Ltd v Morris  FCAFC 8. See further review in the meantime by Michael Douglas here. The Court dismissed Tiger’s appeal from orders made providing for it to be served out of the jurisdiction: The case involves a shareholders’ dispute concerning individuals and companies incorporated outside Australia – where appellant is a shareholder in a foreign company which wholly owns Australian subsidiary. At 100 the relevant points are well summarised.
The discussion essentially concerns ‘exorbitant’ jurisdiction under English and Australian law in a modern context, considering principles of comity and forum non conveniens. At 89, reference is made to Lord Sumption in Abela v Baadarani  4 All ER 119, a quote worth reciting in full:
This characterisation of the jurisdiction to allow service out is traditional, and was originally based on the notion that the service of proceedings abroad was an assertion of sovereign power over the defendant and a corresponding interference with the sovereignty of the state in which process was served. This is no longer a realistic view of the situation. The adoption in English law of the doctrine of forum non conveniens and the accession by the United Kingdom to a number of conventions regulating the international jurisdiction of national courts, means that in the overwhelming majority of cases where service out is authorised there will have been either a contractual submission to the jurisdiction of the English court or else a substantial connection between the dispute and this country. Moreover, there is now a far greater measure of practical reciprocity than there once was. Litigation between residents of different states is a routine incident of modern commercial life. A jurisdiction similar to that exercised by the English court is now exercised by the courts of many other countries. The basic principles on which the jurisdiction is exercisable by the English courts are similar to those underlying a number of international jurisdictional conventions, notably the Brussels Convention … and the Lugano Convention…The characterisation of the service of process abroad as an assertion of sovereignty may have been superficially plausible under the old form of writ (We command you …). But it is, and probably always was, in reality no more than notice of the commencement of proceedings which was necessary to enable the defendant to decide whether and if so how to respond in his own interest. It should no longer be necessary to resort to the kind of muscular presumptions against service out which are implicit in adjectives like ‘exorbitant‘. The decision is generally a pragmatic one in the interests of the efficient conduct of litigation in an appropriate forum.
The High Court then notes a difference in the approach of forum non between the English and the Australian common law: at 90: ‘The test in the [UK] focuses upon a consideration of the ‘more appropriate forum’: Spiliada Maritime Corporation v Cansulex Ltd  3 All ER 843. Whereas, Voth (1990) 171 CLR 538 establishes the clearly inappropriate forum test as the test to be applied in Australia.’ Arguably the Australian test leads to a more ‘parochial’ outcome: it is more likely than the English test to lead to jurisdiction being established.
As Michael notes, the core business of the foreign parent, MC2, was to manage the affairs of its subsidiaries, including the Australian company, MA. That involved the management supervision of boatbuilding activities in Australia through Mr Morris, who was resident in Australia. Connections with Australia are strong, therefore. Michael also makes an important point on the current era of globalisation (and, I would add, special purpose vehicles): jurisdictions’ reach over corporations set up outside of the jurisdiction, often to avoid some of its laws (whether tax laws or otherwise) but with strong links to it, is likely to have to be entertained increasingly. That is the case for Australia. It is also the case for the EU and elsewhere, among others under the corporate social responsibility and human rights due diligence agenda.
Liu v Ma. NSW (Australian) PIL happy to enforce foreign judgments where jurisdiction is based simply on nationality.
At 6 Mukhtar AJS notes ‘There is sufficient authority for the view that Australian Courts will enforce a foreign judgment where the defendant is a subject of the foreign country in which the judgment was obtained. That view has its critics (footnote omitted, GAVC) and it may have its difficulties especially if the citizenship is inactive. Nevertheless, it is founded on a line of English authority exemplified by the statement of Buckley LJ in Emanuel v Symon‘.
Many would argue that at the very jurisdictional level nationality as a ground is parochial /exorbitant. At the same time that at the level of recognition, one should show restraint in refusing to recognise judgments based on such flimsy jurisdictional grounds.
For those wanting to dig deeper, prof Andrew Dickinson has critical review of the relevant case-law in (2018) 134(July) LQR 426-449 (‘Schibsby v Westenholz and the recognition and enforcement of judgments in England’).
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.4. for a discussion of ‘parochial’ jurisdiction in the EU context).
Looking over the fence in re B.C.I Fins. Pty Ltd. (In Liquidation). The rollercoaster world of conflict of laws.
In re B.C.I Fins. Pty Ltd. (In Liquidation) (thank you Daniel Lowenthal for flagging) illustrates to and fro exercise, hopping between laws, and the use of choice of law rules to establish (or not) jurisdiction. This method is often called the ‘conflicts method’ or ‘looking over the fence’: to establish whether one has jurisdiction a judge has to qualify his /her district as a place of performance of an obligation, or the situs of a property, requires the identification of a lex causae for the underlying obligation, application of which will in turn determine the situs of the obligation, property etc.
As Daniel points out, Bankruptcy Code section 109(a), says that “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality may be a debtor under this title.” Lane J considers the issue in Heading B and concludes that the Debtors’ Fiduciary Duty Claims against Andrew and Michael Binetter constitute property in the United States to satisfy Section 109(a).
There is no federal conflicts rule that pre-empts. New York conflict of law rules therefore apply. New York’s “greatest interest test” pointed to Australian substantive law to determine the situs of the fiduciary duties claims: “[t]he Liquidators were appointed by an Australian court, and are governed by Australian law, and Andrew Binetter is an Australian citizen. Perhaps even more importantly, the Fiduciary Duty Claims arose from acts committed in Australia and exist under Australian law, and any recovery will be distributed to foreign creditors through the Australian proceeding.’
Lane J then applies Australian substantive law eventually to hold on the situs of the fiduciary duty: considering the (competing) Australian law experts, he is most swayed by the point of view that under Australian law ‘not only debts, but also other choses in action, are for legal purposes localised and are situated where they are properly recoverable and are properly recoverable where the debtor resides.’ The Binetters reside in New York.
In summary: New York conflict of law rules look over the fence to locate the situs of a fiduciary debt to be in New York, consequently giving New york courts jurisdiction. A neat illustration of the conflicts method.
(Handbook of) EU private international law, Chapter 3, Heading
Sinocore International Co Ltd v RBRG Trading: The commercial court on fraus, ordre public and arbitration.
Fraus omnia corrumpit (fraud corrupts all; alternatively formulated as ex turpi causa non oritur actio) is not easily applied in conflict of laws. See an earlier post here. In  EWHC 251 (Comm) Sinocore International Co Ltd v RBRG Trading , the Commercial Court granted permission for the enforcement of a foreign arbitral award despite allegations that the transaction in question had been “tainted” by fraud: this is how the case is summarised by Mayer Brown and I am happy broadly to refer to their overview and analysis.
The Commercial Court’s relaxed attitude is another sign of strong support of the English courts for the New York Convention and its narrow application of ordre public.
An interesting case for comparative conflicts /arbitration classes.
Update 25 January 2019 Rubin v Eurofinance was incorporated as precedent by the Australian Federal Courts in King (Trustee), in the matter of Zetta Jet Pte Ltd v Linkage Access Limited  FCA 1979, as explained by David Walter here.
Hooley [Hooley v The Victoria Jute Company Ltd and others  CSOH 14] has been sitting in my in-box for a few months. It concerns the liquidation (particularly: selling of companies’ assets by liquidators under Scots law) of companies incorporated in Scotland but with COMI (centre of main interests) outside the EU. In particular, India.
Given the presence of COMI outside the EU, the Insolvency Regulation does not apply. Indeed the Court of Session (Lord Tyre) does not refer to it at all.Findings would have been very different were the Regulation to apply: place of incorporation has to give way to COMI, where these two do not coincide, in which circumstance the place of incorporation at best may open secondary proceedings.
At issue was among others (and for the first time in a Scots court, I understand) the consideration of ‘modified universalism’: ie what is the practical impact of there being a company incorporated in Scotland, given Scots courts and administrators jurisdiction over the insolvencies, when the companies’ business is mainly carried out abroad and when proceedings are also pending abroad.
Per Rubin v Eurofinance, Universalism” means the “administration of multinational insolvencies by a leading court applying a single bankruptcy law.” The principle of modified universalism was stated by Lord Sumption in Singularis Holdings Ltd v Pricewaterhouse Coopers  AC 1675 (PC) at para 15 as being that “the court has a common law power to assist foreign winding up proceedings so far as it properly can” (see also Lord Collins at paragraph 33 and Lord Clarke of Stone‑cum‑Ebony at paragraph 112).
Essentially Lord Tyre had to decide whether the Scottish administrators’ powers were only exercisable to the extent that their exercise was recognised as legally valid by the law of the relevant non-UK jurisdiction. He held (at 36) that the proceedings taking place in India were ancillary to the administration proceedings in Scotland. The powers of a validly appointed administrator to a Scottish company were therefore not limited by the Indian winding up.
As often of course this judgment is but one side of the coin. Indian courts are at liberty to disregard the Scots findings. Any purchasers of Hooley assets therefore will have a compromised title. One assumes this has an impact on price.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.1, Heading 5.5.
Fraus omnia corrumpit or accidental oversight? New South Wales Supreme Court goes full throttle in Proactive Building Solutions
Fraus omnia corrumpit (fraud corrupts all) is not easily applied in conflict of laws. Both forum shopping and choice of law ought not prima facie to be regarded with much suspicion, especially in a B2B context. States typically employ mandatory law provisions, sometimes restricted to ‘overriding mandatory law’ (such as in the EU’s Rome I Regulation for choice of law in contracts) to ring-fence parts of national law not capable of being avoided by choice of law in purely domestic situations, and ‘public order’ provisions to trump choice for foreign law even in not purely domestic contexts, but then only for the most essential parts of a State’s legal fabric.
In Proactive Building Solutions, McDougall J held ex tempore that a choice of court and choice of law clause in favour of the English courts cq English law, was void in its entirety for it negated the working of a provision of the New South Wales Building and Construction Industry (Security of Payment) Act 1999 (NSW) (SOP Act). The object of this Act is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.
Section 34 of that Act reads
34 No contracting out
(1) The provisions of this Act have effect despite any provision to the contrary in any contract.
(2) A provision of any agreement (whether in writing or not):
(a) under which the operation of this Act is, or is purported to be, excluded, modified or restricted (or that has the effect of excluding, modifying or restricting the operation of this Act), or
(b) that may reasonably be construed as an attempt to deter a person from taking action under this Act, is void.
Section 7(1) of the Act, not referred to in judgment, reads
Subject to this section, this Act applies to any construction contract, whether written or oral, or partly written and partly oral, and so applies even if the contract is expressed to be governed by the law of a jurisdiction other than New South Wales.
As pointed out by Leigh Duthie and his colleagues, while Section 7(1) may have normally allowed the Court to void only the SOP relevant aspects of choice of law, the trouble in the current case was that the contract had thrown choice of court and choice of law into one clause (a very common contractual occurrence), with a foreign court adjudicating. McDougall J found it highly unlikely that the English courts would uphold the provisions of the SOP Act, hence giving the NSWSC no choice but making the clause void in its entirety. Consequently the whole contractual arrangement became subject to choice of court and choice of law as if no express clause had been inserted, even if the workings of the SOP Act would have had only a minor impact on parties’ contractual relations.
An obvious remedy is to lift SOP relevant parts of the contract out of the choice of court clause, however even in such case some uncertainty persists: for the recalcitrant party, suing in NSW in spite of a choice of court elsewhere, could attempt to raise the SOP flag if only to delay proceedings.
An interesting case for comparative conflicts classes.
Australia, Nigeria and South Korea (a bit of an unusual troika, truth to be told) have jointly proposed an amendment to the London Protocol [Convention on the Prevention of Marine Pollution
by Dumping of Wastes and Other Matter 1972 and 1996 Protocol Thereto]. The Amendment would severely and formally restrict the legality of geo-engineering among signatory States. As reported earlier, in 2008, Parties to the London Convention and Protocol adopted a resolution prohibiting ocean fertilization other than for legitimate scientific research. The proposed amendment would strengthen the nature of that prohibition.
Ocean fertilisation would be the only accepted form of geo-engineering which can continue to be researched, under monitoring and supervision of the Protocol. All other activities would remain subject to the general ban on dumping of wastes at sea. Evidently the Protocol does not capture all geo-engineering techniques, whence even if accepted, the amendment would fall short of a global regime for geo-engineering, thereby confirming the incremental process of regulating global environmental concerns.
I have searched high and low but have as yet not located a copy of the actual proposal: this post is based on the Australian government’s press release, on reporting in The Age, Environment and the geo-engineering blogspot.
Update 25 May 2015 BAT and PMI now have also launched in the High Court in the UK .with BAT putting aside the Australian ruling, reported below, as distinguishable, and PMI focusing on EU trade mark laws.
As reported earlier, the High Court of Australia held in the summer that the Australian Plain Packaging regulations are not unconstitutional. It has now also released its reasons for finding so. The relevant Commonwealth constitutional provision is Section 51(xxxi) which confers upon the Commonwealth Parliament the power to make laws with respect to:
“[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”.
‘Just terms’ (including compensation) are only due if there is an ‘acquisition’; this, the High Court held, is not the case here. It notes (per French CJ)
‘Taking involves deprivation of property seen from the perspective of its owner. Acquisition involves receipt of something seen from the perspective of the acquirer. Acquisition is therefore not made out by mere extinguishment of rights.‘ (footnotes omitted).
‘Importantly, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character. On no view can it be said that the Commonwealth as a polity or by any authority or instrumentality, has acquired any benefit of a proprietary character by reason of the operation of the TPP Act on the plaintiffs’ property rights.’
There is plenty of scope for distinguishing the Australian constitutional arguments from other jurisdictions (indeed the judgment itself refers to distinctions with the US Constitution). Moreover, as I have already flagged in an earlier posting, the legal fronts on which this battle is fought are very wide. Immediate reactions during the summer (along the lines of ‘with this judgment there is no stopping plain packaging regulations’) seemed a bit premature to me – they do all the more now that we have had a chance to read the actual judgment.