Federal court of australia

13.What if the applicable law is that of Papua New Guinea?

183 It is necessary to consider the consequences if I am wrong in holding that the applicable law is that of Australia.

184 I have no evidence concerning the tort law of Papua New Guinea. As the parties were agreed, that is a question of fact: Neilson [115] (Gummow and Hayne JJ). And, if there is a deficiency in the evidence, “the ‘presumption’ that foreign law is the same as the law of the forum comes into play” (Neilson at [125] (Gummow and Hayne JJ)). The consequence of there being no evidence as to the law of Papua New Guinea is as follows (Zhang at [70] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) (citations removed) (emphasis in original):

[70] The first question is whether it is necessary for the plaintiff to plead the foreign law in order to establish a cause of action. The answer preferred by Dicey is in the negative. In Walker v W A Pickles Pty Ltd, Hutley JA explained:

``An action of tort may be brought in New South Wales courts irrespective of where the facts founding the action may have occurred, even if they occurred in a place where there may be no law at all: see Mostyn v Fabrigas. A pleading of a cause of action in tort which did not allege that the facts occurred in any particular law district would be formally valid. On the basis that the utmost economy is enjoined by the rules, it would seem to me that pleading of a foreign element in the initiating process in a claim in tort can never be necessary . . .

This approach is reinforced by the principle that foreign law, which is, except between the States and the Territories of the Commonwealth, a fact, is presumed to be the same as local law; and a fact presumed to be true does not have to be pleaded: see Supreme Court Rules, Pt 15, r 10(a).''

On the other hand, if the defendant seeks to rely upon a foreign lex causae, then, in the ordinary way, it is for the defendant to allege and prove that law as an exculpatory fact.

185 Dyno Wesfarmers Ltd v Knuckey [2003] NSWCA 375 was a case concerning a fatal accident in Papua New Guinea. At [25], Mason P (with whom, on this point, Handley JA and Young CJ in Eq agreed) summarised the holding in Zhang thus:

In Zhang, the High Court held that it is not necessary for a plaintiff to plead the lex loci delicti in order to establish a cause of action justiciable under Australian law. If the plaintiff refrains from pleading the foreign law in the statement of claim then he or she will be taken to have invoked the principle that foreign law is presumed to be the same as local law. In so concluding, the Court approved Walker v WA Pickles Pty Ltd [1980] 2 NSWLR 281 at 284-5 and statements to similar effect in Collins (ed), Dicey and Morris on the Conflict of Laws 13th ed (2000), vol 2 p1568-9, applying them in the current legal context where choice of the lex loci delicti has replaced double actionability (see Zhang at 518-9 [69]-[71]). It was held that a party seeking a forensic advantage in the foreign law must invoke it by specific pleading, otherwise the trial will proceed on the basis that the applicable foreign law is identical to the law of the forum.

186 There is other intermediate appellate court authority on this question. In Nicholls v Michael Wilson & Partners Ltd (2010) 243 FLR 177, Lindgren AJA (with whom Basten and Young JJA agreed on this issue) said as follows at [323]:

It follows that the onus is on a party asserting that foreign law is applicable and is different from the law of the forum to plead and prove those matters, including what that foreign law is, and that MWP was entitled to rely on the presumption that the law of the forum would be applied unless the appellants pleaded and proved both the applicability and the content of the relevant part of foreign law: see [Zhang] at [70]–[71] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; [Dyno] per Young CJ in Eq at [49]–[56]; and see Neilson at [125] per Gummow and Hayne JJ.

187 Nicholls was overturned on appeal, but choice of law was not in issue: Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427.

188 Were it necessary (i.e., if, contrary to my view, the applicable law is that of Papua New Guinea), I would presume that Papua New Guinea tort law is the same as Australian law.

189 Two issues are thereby raised. The first can be disposed of quickly. In oral argument the Minister tentatively advanced the submission that, if the lex causae was the law of Papua New Guinea, Australia (as a foreign state) would be immune from tort liability. In a note provided post-hearing, the Minister said that he “[did] not rely on the benefit (if any) of foreign state immunity under the substantive law of PNG as applied in these proceedings”. Accordingly, that is not necessary to consider further.

190 The second issue is this: as I will outline in dealing with duty of care, for policy reasons statutory authorities have the benefit of a higher threshold for the imposition of a duty of care. I would presume, were it necessary, that Papua New Guinea had the same principle. I asked the Minister whether, if the law of Papua New Guinea applied, it would recognise the same higher threshold in respect of foreign (i.e., Australian) statutory authorities in respect of which a putative duty of care was sought to be established.

191 The Minister’s answer was that it would so recognise. His rationale was that the existence and scope of any duty of care depends on the character of the defendant and the relationship between it and the plaintiff. The Court would take into account conflicting duties to which a defendant may be subject. Accordingly, “a Court of PNG applying PNG law would take account of the statutory context that governs the relationship between the applicant and the Respondents even though the relevant statutes are Australian law and not the law of PNG.” Further, the Court would not “impose a duty that would be inconsistent with the powers and obligation of the Respondents under Australian law.” The cases cited concerned domestic statutory authorities. I am not aware of any authority dealing with whether there is a higher standard for the imposition of a duty of care on foreign public authorities.

192 I accept that a court would look to the relationship of the parties including any contractual relationship. That would be true whether or not a defendant was a public authority. I also accept that a court would, in determining the applicable standard of care, look to any conflicting duties. That, too, is true for any defendant. However, the Minister’s submissions go a step further and say that, because the relationship between applicant and Minister is statutory, principles concerning duties of public authorities apply. Those principles are based on public authorities being, for reasons of policy, in a recognised special category. The Minister’s unstated assumption is that the same policies that underpin local authorities having the benefit of a higher test for duty also underpin foreign authorities having that benefit.

193 As I say below, the principal rationale for the differential treatment of public authorities in tort law appears to be the scarcity of public resources. That is explained in some detail in S Deakin, A Johnston, & B Markesinis, Markesinis and Deakin’s Tort Law (6th ed., 2008), at 399–405. As the authors write (emphasis in original, footnotes not reproduced), “[i]f substantial claims for economic compensation are made by a particular group of claimants, the cost has to be met either by a diversion of resources away from general expenditure or by an increase in taxation. It is not obvious that the loss is better borne by the local authority (or by the taxpayers or community at large) than by the plaintiffs.” A second rationale advanced by the authors of Markesinis and Deakin is “the wish to avoid the situation in which public authorities become inundated with frivolous and unmeritorious claims … because … local authorities cannot (normally) become insolvent or bankrupt” (at 400). Thirdly, the authors identify the “fear of courts unduly restricting the policy-making functions of the body in question and interfering with decisions that are not susceptible to judicial control” (at 401). Fourth, the fear that “the threat of legal liability will give rise to ‘defensive’ or wasteful practices by potential defendants,” though “[t]his has to be weighed against any ‘deterrent’ effect or raising of standards of performance which judicial intervention may bring in its wake.” (at 401)

194 Apart from those factors, the authors observe that most activities of public bodies are underpinned by statute (at 402) and that statute may create specific immunity from common law liability in tort (at 402). Relatedly, there is the possibility of alternative statutory or administrative remedies (at 403) or the intervention of (e.g.) an Ombudsman (at 404).

195 I am not persuaded that a court in one country, in considering liability for torts committed within its borders, would allow a higher threshold for the imposition of a duty than it otherwise would have out of concern for the diversion of resources away from general expenditure in another country, or for fear that to fail to so impose might lead to increased taxation in that other country. Similarly, though the relationship between branches of government in one country might lead to a reluctance in courts to digress into issues of policy, I cannot think that similar concerns would constrain a court in relation to foreign public authorities. The concerns about inundation with unmeritorious claims and the possibility of wasteful practices by defendants seem to me not to apply: cases of the present kind are unlikely to often arise, irrespective of the test for duty, because public authorities generally act (or omit to act) within their own law areas rather than in other countries.

196 Finally, it seems to me that consideration of matters such as a “specific immunity from common law liability” under the laws of the putative tortfeasor’s country would fall foul of the principle that the lex causae is the law of the location of the wrong. An ability to avoid liability in another country, in which the tort was not committed, seems to me to be largely irrelevant. So, too, the availability of administrative relief or an Ombudsman in that country.

197 In my opinion the policy considerations underpinning the higher duty standard for domestic public authorities do not translate to the case of foreign public authorities.

198 The Minister also put that failing to apply the higher public-authority standard for duty is inconsistent with two choice of law principles, namely that “the same substantive law [should] apply in relation to the proceeding regardless of the forum,” and that the applicant should not obtain an unfair advantage by its choice of forum. In my view, this submission is misconceived. Either the proper law of the subject tort is that of Papua New Guinea or it is that of Australia. If the lex loci delicti and hence the lex causae is that of Papua New Guinea, then on my approach it would not matter whether a proceeding was commenced against an Australian statutory authority in Papua New Guinea or in Australia: the law of Papua New Guinea would apply and a higher public-authority standard for imposition of a duty would not. Alternatively, if the lex loci delicti is that of Australia, then, again, whether the claim is brought in Papua New Guinea or in Australia the law of Australia applies and so, too, the higher public-authority standard for duty. There is nothing in my approach that is inconsistent with choice of law principles. The commission of a tort in one country rather than another does not enable the plaintiff to forum-shop.

199 If I had held that the proper law of the tort was that of Papua New Guinea, I would have held that the standard approach applied to the determination of whether the Minister owed a duty of care, rather any the stricter approach derived from the local-authority cases.