DYNO WESFARMERS LTD v KNUCKEY & ORS; DYNO WESFARMERS LTD v DYER

LOWER COURT Supreme Court JURISDICTION : LOWER COURT SC 20315/96; 20744/97 FILE NUMBER(S) : LOWER COURT Mathews AJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40379/2003 CA 40380/2003

MASON P HANDLEY JA YOUNG CJ in Eq

DYNO WESFARMERS LTD v MARGARET KNUCKEY & Ors DYNO WESFARMERS LTD v JACQUELINE DYER

Two men were killed in a mine explosion in Papua New Guinea in 1994. Within three years, dependants' proceedings were brought by their widows in the Supreme Court of New South Wales against the negligent employer. The proceedings were pleaded as if the Compensation to Relatives Act 1897 (NSW) were the applicable statute. Formal admissions as to employment and breach were made and the proceedings were set down for assessment of damages on the basis that, subject to proof of dependency and loss, there should be a verdict for the plaintiff in each matter.

Following Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (Zhang) the plaintiffs sought leave to amend to plead reliance upon the Wrongs (Miscellaneous Provisions) Act (PNG), a statute derived from Lord Campbell's Act (UK) that was identical in substance to the New South Wales counterpart. This application was made after the 3 year time period for bringing proceedings under the Papua New Guinea statute. Mathews AJ held that it was unnecessary for the plaintiffs to amend their respective statements of claim.

In subsequent damages assessment proceedings the defendant never raised a limitation defence. The existence and terms of the Papua New Guinea statute were admitted. Judgments for substantial damages were awarded to each widow.

On appeal, HELD:

1. The final judgments rested securely upon facts proved or admitted, including the "fact" that the lex causae (ie Papua New Guinea law) was the same as the law of the forum.
2. It was unnecessary for the plaintiffs to plead the Papua New Guinea statute in circumstances where they had pleaded facts sufficient to put the defendant on notice that the place of the tort was Papua New Guinea and where the existence and terms of the Papua New Guinea statute were admitted. Since the plaintiffs were not seeking a forensic advantage based upon some aspect of the lex causae that differed from the lex fori, it was up to the defendant to plead and raise the lex causae if it wished to aver that it differed from the lex fori - Supreme Court Rules Pt 15 r10(1) applied - Walker v WA Pickles Pty Ltd [1980] 2 NSWLR 281 at 284-5 and Zhang at 518 applied
3. The plaintiffs had not "harnessed themselves" irrevocably to the Compensation to Relatives Act 1897 (NSW)
4. (per Mason P, Young CJ in Eq agreeing: Handley JA contra) Part 20 r4 of the Supreme Court Rules (which modified with substantive effect the rule in Weldon v Neal (1887) 19 QBD 394) also meant that it would have been open to have allowed amendment of the statements of claim that were filed within 3 years of the deaths notwithstanding that application to amend was first sought after the 3 year period limited in s31 of the Wrongs (Miscellaneous Provisions) Act (PNG).
5. Discussion by Young CJ in Eq about the proposition that a party who relies on a foreign lex loci delicti "must allege, and, if necessary, prove it".

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40379/2003 CA 40380/2003

MASON P HANDLEY JA YOUNG CJ in Eq

DYNO WESFARMERS LTD v MARGARET KNUCKEY & Ors DYNO WESFARMERS LTD v JACQUELINE DYER JUDGMENT 1 MASON P: On 2 August 1994 there was a catastrophic explosion at the Porgera Gold Mine in Papua New Guinea. Several people were killed including two Australians, Geoffrey Raymond Dyer and Phillip John Knuckey. The appellant was the employer of the deceased men. 2 Proceedings for damages were commenced against the employer in the Supreme Court of New South Wales by the dependents of each deceased. Mrs Dyer and the deceased's step daughter filed their statement of claim on 29 March 1996. Mrs Knuckey and three children of the deceased filed theirs on 31 July 1997. Each proceeding sought damages pursuant to s3 of the Compensation to Relatives Act 1897 (NSW). The defendant has a presence in New South Wales and in any event submitted unconditionally to the jurisdiction of the Supreme Court of New South Wales. 3 Each statement of claim pleaded material facts sufficient to engage the similar provisions of the fatal accidents legislation derived from Lord Campbell's Act as enacted in New South Wales and Papua New Guinea. The place of the tort was pleaded as Papua New Guinea. However, the respective pleadings identified the Compensation to Relations Act 1897 (NSW) as the statutory peg for the damages claims. This reflected the understanding of the private international law of tort at the time (cf Koop v Bebb (1951) 84 CLR 629). 4 Defences were filed, neither of which raised any limitation issue. The Defences in the Knuckey proceedings also admitted that the proceedings were brought by the plaintiffs pursuant to the provisions of the Compensation to Relatives Act 1897 (NSW). 5 On 29 March 2001 and 5 April 2001 there were directions hearings before Wood CJ at CL. Formal admissions were made by the defendant, including admissions as to employment and breach of duty. The admission as to breach followed findings made by Hunter J in insurance proceedings litigating the question of fault with respect to the accident (see Placer (PNG) Pty Ltd v Dyno Nobel Asia Pacific Ltd [1999] NSWSC 1292). Wood CJ at CL also noted that, subject to proof of dependency, there should be a verdict for the plaintiff in each matter (Black 121). 6 The High Court decision in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 had signalled a shift in private international law involving torts committed outside the jurisdiction. The full implication in its international context was revealed in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (Zhang) which was decided on 14 March 2002. The Court held that the substantive law for the determination of rights and liabilities in respect of foreign torts is not to be determined according to the "double actionability" rule but by reference to the lex loci delicti. 7 John Pfeiffer also indicated that limitation statutes, however expressed, were to be treated as part of the substantive lex loci delicti (see at 544 [100], 563[161], 574[193]). 8 In March 2003 Mathews AJ heard contested applications by each set of plaintiffs seeking leave to amend their respective statements of claim by pleading claims under the Wrongs (Miscellaneous Provisions) Act (PNG) in the alternative to claims under the Compensation to Relatives Act 1897 (NSW). The provisions are to all intents identical, and this was common ground before Mathews AJ. 9 The defendant (the appellant in this Court) opposed leave to amend. It conceded absence of prejudice (Black 2-3). But it argued that the plaintiffs had elected to "harness" the law of New South Wales as the applicable law in the proceedings. Having made this choice, they could not change and now invoke the law of Papua New Guinea as the substantive basis for the rights invoked. Such a change of mind was said to be precluded because by 2003 the claims had become statute-barred and therefore extinguished in Papua New Guinea. The limitation provision in s31 of the Wrongs (Miscellaneous Provisions) Act (PNG) is substantive in the sense that it creates a right conditional upon action being commenced within three years after the death of the deceased (see Maxwell v Murphy (1957) 96 CLR 261 approved in McKain v R W Miller & Co (SA) Pty Ltd (1991) 174 CLR 1 at 43-44 as to the effect of the equivalent s5 of the Compensation to Relations Act 1897 (NSW)). 10 The plaintiffs sought to meet this argument by asserting that it was unnecessary for them to plead any law, whether local or foreign, in an initiating process involving a tort committed outside the jurisdiction (see Walker v W. A Pickles Pty Ltd [1980] 2 NSWLR 281 at 284-5). This in turn threw up a debate about the impact of Zhang on the earlier jurisprudence. The defendant argued that the plaintiffs were relying on a foreign lex loci delicti, with the consequence that they had to allege and, if necessary, prove it. 11 The plaintiffs countered with the argument that it was unnecessary to allege and prove a foreign law if (as in the present case) they did not seek a forensic advantage from that law. In something of a tactical retreat from the claim for relief sought in the notice of motion, senior counsel for the Knuckeys insisted that they were seeking to amend only for abundant caution. Mathews AJ accepted Mr Joseph SC's submission on this point. 12 The learned judge held that the Papua New Guinea Wrongs (Miscellaneous Provisions) Act applied in the proceedings, not because of the manner in which the statements of claim had been framed, but by virtue of the applicable choice of law rules as expounded in Zhang. Her Honour's reasoning is encapsulated in par [27] of her reasons (Dyer v Dyno Nobel Asia Pacific Ltd; Knuckey v Dyno Nobel Asia Pacific Ltd [2003] NSWSC 213): I return to my discussion of the effect of Zhang on the present cases. The mere fact that all parties believed, when these actions were commenced, that New South Wales substantive law would apply to the proceedings, is irrelevant for present purposes. That belief was later shown by the majority judgment in Zhang to represent an erroneous (or outmoded) view of the common law. Similarly, the fact that the statements of claim contained a reference to the New South Wales legislation was irrelevant. It was irrelevant on two bases: first because it was an unnecessary averment, and secondly because it did no more than state the parties' erroneous view as to the choice of law rules which would apply. It certainly did not amount to an "election" by the plaintiffs to invoke New South Wales law. Nor could it have been effective to do so, once Zhang had established that foreign law was to be applied in cases of this nature. As I have said, the Papua New Guinea law will be applied in these proceedings by virtue of the applicable choice of law rules, not because of any election by the plaintiffs or any averment in their statements of claim. 13 The conclusion was that no amendment of either statement of claim was necessary to enable the actions to proceed on the already agreed basis that Papua New Guinea law applied by dint of the choice of law rules in Zhang. The only order made in these interlocutory applications related to costs. 14 Thereafter there was no application to strike out the statements of claim, or to withdraw the formal admissions made before Wood CJ at CL, or to amend the Defences to raise any limitation issue (cf Supreme Court Rules Part 15 r13(2)). 15 The two proceedings continued and culminated in substantial awards of damages (Dyer v Dyno Nobel Asia Pacific Ltd [2003] NSWSC 198; Knuckey and 3 Ors v Dyno Nobel Asia Pacific Ltd [2003] NSWSC 213). Early in her reasons in each matter, Mathews AJ noted that, subject to proof of dependency, the only issue remaining in dispute at the hearing related to the assessment of damages. Judgments for damages and costs were subsequently entered. 16 The appellant makes no complaint as to the reasoning leading up to the judgments and orders based upon application of the lex loci delicti. Mathews AJ's reasons refer to the "Wrongs Act (PNG)" a copy of which was provided to the primary judge without comment or reservation. 17 It is argued before us that her Honour erred in holding that it was unnecessary for the statements of claim to be amended. It was not open to make awards in favour of the plaintiffs based upon the Papua New Guinea version of Lord Campbell's Act unless and until the pleading was amended to invoke the applicable law of Papua New Guinea, in Part IV of the Wrongs (Miscellaneous Provisions) Act (PNG). Lest this be seen as raising an unadornedly unmeritorious pleading point, the notice of appeal adds the following ground by way of explanation:

4. The limitation period under PNG law having expired in 1997 no subsequent amendment could have been competently made by the Supreme Court of New South Wales under Supreme Court Rules Part 20 Rule 4 or otherwise by reason that the procedural or adjectival law of NSW cannot be used to overturn the substantive law of the foreign lex loci delicti .

18 Koop v Bebb involved an accident in New South Wales leading to injuries from which the deceased died in Victoria. The legislation of the two states was similar, but the straddle of critical facts (negligence in New South Wales, death in Victoria) raised peculiar problems, not necessarily involving choice of law issues. The High Court nevertheless addressed the case as one involving the conflict of laws, proposing two alternatives each of which resulted in recovery of damages by the widow (see at 641-2). Each possibility spoke the forum-focussed language of double actionability. It is unnecessary to pour this old wine into the new bottles of the current learning, especially in a situation where there is a clear choice of law issue but where the statutory regimes correspond (cf Nygh and Davies, Conflict of Laws in Australia 7th ed at [22.25] - [22.26]). 19 One aspect of the earlier law remains unchanged. In Zhang, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said (at 517[67]): When an Australian court selects a non-Australian lex causae it does so in the application of Australian, not foreign, law. While the content of the rights and duties of the litigants is determined according to that lex causae, it is necessary to recall that the selection of the lex causae is determined by Australian choice of law rules. 20 An appeal must challenge orders. The notices of appeal properly recognise that the formal attack is to be directed at the final orders embodying the verdict and monetary judgment in favour of the respective plaintiffs. 21 Sometimes pleading points are meritorious in every sense, because they distil a genuine and viable issue. This appeal raises a pleading point that might be called "pure" (because it has no bearing on real issues), but is quite "impure" (because it is hopeless on several fronts). 22 The final judgments rest upon facts proven to the hilt to the extent that they may not be covered by the formal admissions. These facts include the Papua New Guinea statute forming the lex loci delicti that provides the lex causae or framework for the Australian cause of action admitted and proved in the Supreme Court. The statute was provided to Mathews AJ. This was proof positive of the relevant "fact" of foreign law, rendering it unnecessary for the plaintiffs to fall back upon the presumption as to the identity of foreign law with the lex fori. That presumption is however well-established and none of its exceptions apply in the present case (see generally Damberg v Damberg (2001) 52 NSWLR 492, Zhang at 518 [70]). 23 The pleading point therefore becomes a complaint that Mathews AJ erred in not requiring the plaintiffs to plead the Papua New Guinea statute whose applicability, existence and terms were common ground in the damages assessment proceedings that followed the formal admissions of liability made before Wood CJ at CL. 24 This "pure" pleading point lacks even technical merit, because Part 15 r10 of the Supreme Court Rules provides: A party need not plead a fact if - (a) the fact is presumed by law to be true, or (b) the burden of disproving the fact lies on the other party, except so far as may be necessary to meet a specific denial of that fact by the other party in his pleading.

25 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. 26 I do not understand the High Court to be advising pleaders to refrain from pleading the foreign place of tort if it may take the defendant by surprise (cf Part 15 r13(1)). Here the plaintiffs' pleadings averred that the fatal accident occurred in Papua New Guinea and they also invoked the Mining (Safety) Act 1980 (PNG) as part of a claim based upon breach of statutory duty (cf Zhang at 518[71]). These were exemplary pleadings. 27 It follows that Mathews AJ was correct in holding that it was unnecessary for the plaintiffs to press their foreshadowed applications to amend the respective statements of claim. 28 It was up to the defendant to plead any limitation point based upon s31 of the Wrongs (Miscellaneous Provisions) Act (PNG). Its failure to do so offers a further reason why this appeal must fail. (I am not inferring that a good point was lost: see below.) 29 Nothing occurred to preclude the plaintiffs from maintaining their pleaded claims. Given the correspondence of the fatal accidents legislation in New South Wales and Papua New Guinea, Zhang made no difference to the material facts that had to be proved by the plaintiffs. And, whatever the defendant's complaint before Mathews AJ, there was no suggestion that post-Zhang reliance on the lex loci delicti took it by surprise. 30 The appellant repeated before us the submission that the plaintiffs had "harnessed themselves" to the Compensation to Relations Act 1897 (NSW) in such a way as to preclude reliance upon the Papua New Guinea counterpart. This submission implies that the two statutory regimes were different in some manner that might attract the doctrine of election between inconsistent rights. The statutes were identical in their substance and this was always common ground. 31 The appellant further submitted that, by the time the plaintiffs signalled their recognition that the law to be applied in their proceedings in New South Wales under the common law of Australia was the law of Papua New Guinea, any right derived from Papua New Guinea law had been extinguished by effluxion of time (see [17] above). This submission goes nowhere in the absence of a limitation defence raised by the defendant/appellant in its pleadings. In any event, the point is entirely devoid of merit once it is recognized that the unamended statements of claim had each been filed in the forum court within the time limited under s31 of the Papua New Guinea statute. 32 The respondents filed notices that include the contention that the primary judge could have granted leave to amend the statements of claim pursuant to Part 20 r1 and/or r4 in the form proposed in the interlocutory proceedings heard by Mathews AJ in March 2003. 33 This contention point is a further answer to the attack on the judgments. 34 The rule in Weldon v Neal (1887) 19 QBD 394 controlled the exercise of the judicial discretion to amend a pleading in cases where the amendment was sought after the expiration of a relevant limitation period. There was much discourse as to the nature of amendments that were permissible if sought after the limitation period had expired. 35 These proceedings were brought in the Supreme Court and its rules (if valid) apply whether their impact is procedural or substantive. Part 20 r4 is a valid modification of the rule in Weldon v Neal and it is not confined to limitation provisions of procedural effect (Proctor v Jetway Aviation Pty Ltd [1982] 2 NSWLR 264, Air Link Pty Ltd v Paterson (No 2) [2003] NSWCA 251) at [60]-[68]). 36 The expression "relevant period of limitation" in Part 20 r4(1) is a broad one. The rule is not confined to "procedural" limitation statutes of the forum (Proctor, Air Link at [65]) and it extends to contractual time bars if they are applicable (Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212, Air Link at [65]). There is no reason why it should not extend to a foreign limitation statute that is cognisable in the forum as part of the lex causae under the Zhang choice of law principles. (The remarks of Handley JA in Nikolay Malakhov Shipping Co Ltd v SEAS Sapfor Ltd (1998) 44 NSWLR 371 at 376, Court of Appeal unreported, 25 March 1998 at p5 upon which the appellant relies have no direct application, because they concern a case in which the correct defendant was not sued in time.) 37 Section 31 of the Wrongs (Miscellaneous Provisions) Act (PNG) is relevant because the common law of Australia gives effect to that law as the lex causae applied in the Supreme Court's resolution of the instant dispute according to Australian law. But its relevance to proceedings already commenced against the correct defendant within the three year time limit is very confined. Since Part 20 r4 would have permitted leave to amend in the present circumstances and since there would have been no reason to displace the general operation of r4(5A), then the (amended) proceedings would remain timely because of the relation back principle. 38 Nothing in the choice of law rule expounded in John Pfeiffer and Zhang cuts across this. Those cases point the Supreme Court to the law of Papua New Guinea and require effect to be given to properly pleaded substantive rules of law of that jurisdiction, including limitation provisions. But the cases do not require this Court to ignore the fact that the proceedings are taking place in the Supreme Court of New South Wales and in accordance with its Rules. Any directly applicable Rules touching the conduct of those proceedings, including the principles to be applied as regards granting leave to amend, must be given effect. 39 Rule 4(5A) provides that a permitted amendment relates back to the date of filing of the statement of claim, unless the court otherwise orders. This means that any limitation problem disappears if the amendment is made in proceedings that were commenced in a timely manner according to the lex causae. The present sets of proceedings were filed within the time permitted under the lex loci delicti for the commencement of Lord Campbell's Act proceedings in Papua New Guinea. At their highest, the amendments would have had the effect of adding or substituting a new cause of action arising out of the same facts as those originally pleaded (cf r4(5)). The appellant would be in no way prejudiced by the putative amendments, in the (relevant) sense of prejudice stemming from some procedural or other unfairness. 40 A pleading may be amended, with leave, at any stage of the proceedings, including after judgment or in the Court of Appeal (Dare v Pulham (1982) 148 CLR 658 at 664, Classic Gourmet Sausages Pty Ltd v Leda Commercial Properties Pty Ltd (2000) 97 FCR 313 at 330-1 [81]-[84]). Moreover, a verdict based upon facts fairly established will be valid, regardless of failure to amend (Water Board v Moustakas (1988) 180 CLR 491 at 497). See also Leotta v Public Transport Commission of New South Wales (1976) 50 ALJR 666. 41 In the circumstances, nothing would be gained by insisting on the formality of amendments that, by the doctrine of relation back, would have removed any existing limitation problem, had it existed. 42 The appeal should be dismissed with costs. 43 HANDLEY JA: I agree with the orders proposed by Mason P and with his reasons other than those in para 36. 44 Where proceedings are brought in this State to enforce substantive rights which are governed by foreign law, for example as the law of the place of the wrong or as the proper law of the contract, the proceedings may be subject to a foreign limitation provision. 45 This can occur in the case of contract because the foreign limitation provision is substantive and had extinguished the plaintiff's right prior to the commencement of the proceedings. It can occur in the case of tort because of the decision in Regi Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 which decides that the plaintiff's rights in an Australian court arising from a tort committed outside Australia will be subject to a limitation provision under the law of the place of the wrong whether that provision is procedural or substantive. 46 In either situation the foreign limitation provision must be applied as part of the relevant foreign law. In such a case I cannot, as at present advised, see how a procedural law of the New South Wales forum can trump or override the foreign limitation provision which limits the plaintiff's substantive rights. The position is quite different where a New South Wales court applies its own law as the proper law of the contract or the law of the place of the wrong. 47 The point does not arise in the present cases because the proceedings in New South Wales were commenced against the correct defendant within the times prescribed by the limitation provisions of the law of the place of the wrong and the law of the forum. 48 YOUNG CJ in EQ: I agree with Mason P that the appeals should be dismissed with costs and with his Honour's reasons. 49 However, I consider it may be useful for me to make a comment or two on the passage from Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (Zhang) namely para [71] of the judgment which was the centre of discussion during the oral argument. After discussion, five justices say, "It follows that the rule must be that which Dicey regards as 'well established', namely that 'a party' who relies on a foreign lex loci delicti 'must allege, and, if necessary, prove it'. 50 In my view a proper reading of para [70]-[71] of the judgment in Zhang indicates that the High Court was not intending to lay down any new inviolable rule. The rule that Dicey suggested was merely affirmed. 51 It takes a little effort to find Dicey's rule. The footnotes to paragraph [71] refer to Dicey Volume 2 p1568 of the thirteenth edition. However, this merely refers one back to Volume 1 pp 221-222 where Dicey states Rule 18. The commentary to Rule 18 states that, "The general rule is that if a party wishes to rely on a foreign law he must plead it in the same way as any other fact". 52 The authorities stated for that proposition are King of Spain v Machado (1827) 4 Russ 225, 239 (38 ER 790, 795) which was an equity suit which failed for want of equity and the passage relied on is a two sentence piece of dicta, and Ascherberg, Hopwood & Crew Ltd v Casa Musicale Sonzogno [1971] 1 WLR 173 (Ungoed-Thomas J) and 1128 (CA). This latter case was one where the court applied the principle that a person must plead all matters, the absence of which would take the opponent by surprise. 53 In his Selected Essays on the Conflict of Laws (Duke University Press, North Carolina, 1963) p 8, Professor B Currie opines that the cases supporting Dicey's rule are far from satisfactory, but that, in any event, the consequence is that, unless foreign law is pleaded, the court will apply its own law. 54 The High Court's ruling now means that the Dicey rule is unquestionable in Australia. 55 However, it must be remembered that it is only a general rule. It will apply in cases where if foreign law were not pleaded, an opponent might be caught by surprise. It will also apply where a person wishes to take advantage of a provision of foreign law. 56 However, where the law in the foreign place that Australian law applies is the same as the foreign law, as it is in this case, there is nothing in Zhang to compel it to be pleaded.

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