Regie Nationale des Usines Renault SA v Zhang
High Court of Australia · 2002
Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491
A man is badly injured in a car crash in New Caledonia, comes home to Sydney and sues the French manufacturer there. Which country's law decides the claim, and should the Sydney court hear it at all?
Zhang still stands, and Neilson clarifies what "the lex loci delicti" refers to. Gummow and Hayne JJ restate Zhang's rule ("No exception, flexible or otherwise, is recognised", [64]) and hold that choosing the lex loci delicti is not confined to what the forum classifies as the foreign place's domestic law: at least where that place's choice of law rules depend on a connecting factor other than place, such as nationality or domicile, "the lex loci delicti is the whole of the law of that place" ([102]). Two consequences follow: if the foreign jurisdiction would apply the law of the forum, the forum applies its own law, and if it would look to a third jurisdiction, the forum applies that law ([103]). Gleeson CJ also rejected the argument that Zhang required the foreign law's provisions for foreigners to be ignored ([13]). In an answer, identify the place of the wrong and then ask what that place's law, including any rule it has for selecting the law, would apply.
What happened?
Mr Zhang, an Australian resident, hired a Renault car in New Caledonia on 5 February 1991 and was seriously injured the next day when he lost control of it on an unsurfaced road ([3]). He was treated in Noumea, flown back to Sydney, and remains severely disabled. In 1994 he sued two French Renault companies in the Supreme Court of New South Wales, alleging negligent design and manufacture of the car ([5]). Neither company is registered in Australia or has an office or staff here ([1]), so he relied on the Supreme Court's "long arm" rules for damage suffered in the State ([9]).
The companies applied to stay the action on the ground that New South Wales was an inappropriate forum. Smart J granted a stay on conditions ([13]). The Court of Appeal held that his discretion had miscarried because he had treated French law as the law that would govern the claim, and re-exercised it against a stay ([14], [27]). The companies sought reinstatement of the stay in the High Court, and also argued that the "double actionability" rule on which the Court of Appeal had relied should be replaced ([28]-[29]).
What did the Court decide?
The appeal was dismissed with costs ([83]). Five Justices (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) wrote jointly in [1]-[85]. Kirby J wrote separately at [86]-[173] and Callinan J at [174]-[216]; each would have allowed the appeal and restored the primary judge's order ([173], [216]).
The result is not the whole story. The companies succeeded in establishing that the Court of Appeal had erred in its approach to the governing law ([77]), and still lost the appeal. The joint reasons then re-exercised the discretion themselves ([80]), and the order left the whole of the Court of Appeal's orders standing, including the stay of an alternative claim in quasi-contract to which Mr Zhang had consented ([84]-[85]).
Proposition
What is the principle?
Choice of law for a foreign tort. In the joint reasons, the "double actionability" rule "should now be held to have no application in Australia in international torts" ([60]). The Court accepted the Renault companies' submission that the reasoning and conclusion in Pfeiffer that the substantive law for intra-Australian torts is the lex loci delicti "should be extended to foreign torts, despite the absence of the significant factor of federal considerations, and that this should be without the addition of any 'flexible exception'. That submission should be accepted" ([75]).
Who held what matters. The extension to foreign torts has the support of six Justices: the five in the joint reasons and Kirby J, who agreed generally with the joint reasons ([121]). The refusal of a flexible exception is the joint reasons'. Kirby J's "inclination is to reserve the question" ([122]), though he would "not press my preference to a dissent from the joint reasons in this respect" ([123]), and he treated public policy as an available exception ([123]). Callinan J did not decide whether Pfeiffer applies to foreign wrongs: "I do not propose, therefore, to say anything about the application (subject to a flexible exception or otherwise) of Pfeiffer to foreign wrongs" ([214]).
The rule is a rule for substantive questions, and the joint reasons entered caveats at [76]. They reserved whether Pfeiffer's treatment of the kinds and amounts of damages as substantive applies to foreign torts ("We would reserve for further consideration, as the occasion arises, whether that latter proposition should be applied in cases of foreign tort"), reserved the Moçambique rule and the standing of Potter v Broken Hill Proprietary Co Ltd, and said "[s]pecial considerations also apply to maritime torts and what Dicey calls 'aerial' torts". Where the first limb of the old rule was a technique of forum control, the joint reasons said the question is about public policy, to be confronted directly: "should a question arise as to whether public policy considerations direct that an action not be maintained in Australia, that question is appropriately resolved as a preliminary issue on an application for a permanent stay of proceedings" ([60]).
Two points follow from the nature of the rule. "When an Australian court selects a non-Australian lex causae it does so in the application of Australian, not foreign, law" ([67]). And a party who relies on foreign law must allege and prove it: a defendant who relies on a foreign lex causae as an exculpatory fact must prove it ([70]), and a plaintiff who sees an advantage in it should plead it ([71]).
The stay. In the joint reasons, jurisdiction and choice of law are separate questions ([7]-[10]), and the applicants for a stay had to demonstrate that a trial in New South Wales would be oppressive (seriously and unfairly burdensome, prejudicial or damaging) or vexatious (productive of serious and unjustified trouble and harassment) ([78]). "An Australian court cannot be a clearly inappropriate forum merely by virtue of the circumstance that the choice of law rules which apply in the forum require its courts to apply foreign law as the lex causae" ([81]).
Why does this case matter?
For what it does to a plaintiff's planning. Coming home injured from overseas and suing in a local court is not a shortcut to a local outcome, and the defendant's response, an application to stay, is where such disputes are commonly fought, before any trial and on evidence of the foreign legal system ([72]-[73]). The Court itself remarked that these interlocutory contests "may consume what appears to be excessive time and expense" but follow from the reach of the long-arm jurisdiction ([73]).
It is also a case to cite with care about what was left open. The Justices' separate reasons do not unsettle the majority's rule, which Neilson later restated; what a citation must not do is claim a decision on the matters the joint reasons expressly reserved ([76]).
Exam and application relevance
In a problem involving an overseas injury, sort the issues first: jurisdiction (long-arm service), choice of law, and any application for a stay. Under choice of law, identify the place of the wrong and the law of that place for the substantive questions, noting the treatment of what that law includes, citing Zhang for the foreign tort and Pfeiffer for the intranational one. Say that the point about the place of the wrong in a product liability case may be contested: the joint reasons noted that questions about the locus of the wrong arise, particularly in product liability cases, and that long-arm authorities are not to be assumed to answer them for choice of law purposes ([74]). On the facts, Kirby J observed that whether the place was metropolitan France (where the car was principally designed and manufactured) or New Caledonia (where the alleged defect led to damage) the applicable law was in either case the law of France ([133]).
On damages, limitation and similar issues, do not assert that the foreign law governs the kinds and amounts recoverable in a foreign tort without saying the joint reasons reserved the point ([76]). On public policy, say that the joint reasons treated it as a matter for the stay application ([60]).
If the problem has the defendant resisting the forum, apply the stay test in the terms of [78] and [81], and do not rest the argument on the foreign lex causae alone.
Check your understanding
1. Which Justices agreed that the lex loci delicti governs a foreign tort, and which of them reserved or declined to decide whether a flexible exception exists? 2. The Renault companies succeeded on the law they asked the Court to adopt. Why did the appeal still fail? 3. Name two matters the joint reasons reserved in [76].