BETWEEN : ICI AUSTRALIA OPERATIONS PTY LTD (ACN 004 117 828)

Private international law - Action founded on a tort - Whether tort committed within the jurisdiction - Cause sued upon not committed within the jurisdiction

Respondent (Defendant) : Freehill Hollingdale & Page

D'Ath v TNT Australia Pty Ltd [1992] 1 Qd R 369

Eyre v Nationwide News Pty Ltd [1967] NZLR 851

Freckmann v Pengendar Timur Sdn Bhd [1989] WAR 62

GAF Corporation v Amchem Products Inc (1975) Ll LR 601

Hart v Robinson Helicopter Co Inc, unreported; SCt of WA (Master White); 5 September 1988

Hartwell Trent (Australia) Pty Ltd v Tefal Societe Anonyme [1968] VicRp 1; [1968] VR 3

Lewis Construction Co Pty Ltd v M Tichauer Societe Anonyme [1966] VicRp 45; [1966] VR 341

Rosler v Hilbery [1925] Ch 250

Savings & Investment Bank Ltd v Gasco Investments (Netherlands) BV [1984] 1 All ER 296

Stanley Kerr Holdings Pty Ltd v Gibor Textile Enterprises Ltd (1978) 2 NSWLR 372

The Hagen (1908) P 189

Waterhouse v Reid [1938] 1 KB 743

1 KENNEDY J: I have had the benefit of reading in draft the reasons to be published by Pidgeon J, with which I am generally in agreement. I desire only to make some additional observations of my own.

2 Under O 10 r 1(1)(k), service of a writ out of the jurisdiction is permissible with the leave of the court whenever the action is founded on a tort committed within the jurisdiction. The equivalent rule in other States is generally, but not precisely, in the same form. In New Zealand, the comparable rule authorises a court to give leave for a writ of summons to be served out of the jurisdiction where any act for which damages are claimed was done in New Zealand. This was the rule under consideration in My v Toyota Motor Co Ltd [1977] 2 NZLR 113. Service out of the jurisdiction should be approached by the courts with circumspection. It is an exceptional measure. See Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869, at 882 - 883, 889; and Mackender v Feldia AG [1967] 2 QB 590, at 599.

3 The explosion suppression system, which is the subject of the appellant's claim, was designed and manufactured under a contract entered into between the respondent and Imperial Chemical Industries PLC, the English parent company of the appellant. The design and manufacture of the system was carried out in England. The contract essentially appears to have been a CIF contract. There is no indication as to when, under the contract, property passed from the respondent, but the order form contains the wording, "Packing insurance carriage (Air Freight) to Perth delivery address". In my view, the conclusion to be drawn from the somewhat meagre facts is that the duty of the respondent, so far as the physical handing over of the system was concerned, was accomplished when the system was put on an aircraft for the purpose of transit - see Halsbury's Laws of England, 4th ed vol 41 par 909; Parker v Schuller (1901) 17 TLR 299; and Plaimar Ltd v Waters Trading Co Ltd [1945] HCA 34; (1945) 72 CLR 304, at 311 - 312.

4 In Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538, at 567, Mason CJ, Deane, Dawson and Gaudron JJ said:

"It was held in Jackson v Spittall (1870) LR 5 CP 542 at 552, that the question whether a cause of action is to be classified as local or foreign is to be answered by ascertaining the place of "the act on the part of the defendant which gives the plaintiff his cause of complaint". It may sometimes be that the "cause of complaint" is the failure or refusal of the defendant to do some particular thing - in other words, an omission. It makes no sense to speak of the place of an omission. However, it is possible to speak of the place of the act or acts of the defendant in the context of which the omission assumes significance and to identify that place as the place of the "cause of complaint". That is what was done by Goddard LJ in George Monro Ltd v American Cyanamid and Chemical Corp [1944] KB 432, at 439, where the failure to warn as to the nature of goods was treated as an aspect of their sale. Sale took place outside the jurisdiction and accordingly, in the view of his Lordship, the tort was committed outside the jurisdiction.

The authority of Jackson v Spittall was expressly affirmed in Distillers [1971] AC at 467. In the latter case Lord Pearson said ([1971] AC at 468) that "[t]he right approach is ... to look back over the series of events ... and ask ... where in substance did this cause of action arise?". This approach can be traced to what was said by Winn J in Cordova Land Co Ltd v Victor Brothers Inc [1966] 1 WLR 793, at 798, 801. And that approach was later expressly approved, although in a slightly different legal context, in Metall & Rohstoff v Donaldson Inc [1990] QB 391 at 443.

The approach formulated in Distillers does no more than lay down an approach by which there is to be ascertained, in a commonsense way, that which is required by Jackson v Spittall, namely, the place of "the act on the part of the defendant which gives the plaintiff his cause of complaint". That approach has particular point if, as was the case in Distillers, it is necessary to ascribe a place to an omission for the purpose of determining where, if at all, a tort was committed.

One thing that is clear from Jackson v Spittall and from Distillers is that it is some act of the defendant, and not its consequences, that must be the focus of attention. Thus, in Distillers, the act of ingestion of the drug Distaval by the plaintiff's mother was ignored, the place of that act being treated like the place of the happening of damage, as one that might have been "quite fortuitous"."

5 The breach of the duty of care alleged in the statement of claim, which is endorsed on the writ, is that the respondent:

"Designed, manufactured and installed the System negligently whereby [on 24 October 1990 the 20 explosion suppressors were activated].

13.1 Failing to provide power conditioning within the control circuits of the System to eliminate problems from power spikes.

13.2 Failing to properly connect and install the in-line fuse holder within the control panel.

13.3 Using a Deugra 900 control panel rather than the more reliable MKIV control panel.

13.4 Failing to design, manufacture and install a control system capable of withstanding power disturbances.

13.5 Failing to design, manufacture and install a control panel with an under voltage relay to lock out supply until power had been established and continuous for at least 15 seconds.

13.6 Failing to design, manufacture and install the System with a power stabiliser in its power supply."

7 As already indicated, the design and manufacture of the system took place in England. The only other acts the subject of complaint in the statement of claim were in connection with the installation of the system. It was, however, made quite clear in the respondent's technical proposal for the contract for the manufacture and design of the system that the respondent did not undertake its installation. It was stated in the proposal that, on receipt of an order, suitable drawings and data sheets would be supplied for this work to be carried out by others, and that was in fact what happened. The proposal also provided for the commissioning of the system by the respondent's engineers. The manual was quite specific as to the work agreed to be undertaken in the commissioning process. It amounted to a visual and electrical check of the system. There is no suggestion that any of the work performed in this process by Mr M A Hockham, the respondent's engineer, was in any respect faulty or that it should have revealed the defective design. In this respect, it is noted that the appellant's experts identified the negligence of the respondent as "inadequate design". On completion of his work, Mr Hockham merely noted down the work which he had performed in the commissioning process and concluded with a note "Left switched off but ready for use when required".

8 The material placed before the Registrar of the District Court, who granted leave to issue the writ of summons and statement of claim and leave to serve notice of the writ on the respondent in England, did not disclose that the installation of the system had not been undertaken by the respondent. There is no reference in that material to the commissioning of the system.

9 When the matter came before this Court, counsel for the appellant argued that the duty of care associated with the design or manufacture of goods carried with it a duty to warn of defects in such goods and that such duty is a continuing one within the jurisdiction in which the goods are delivered. As indicated above, in my view, the respondent "delivered" the system in England.

10 In Sykes E I & Pryles M C, "Australian Private International Law", 3rd edn (1991) at 40, the authors observe that the courts will not permit a plaintiff, by adroit pleading, to bring a tort within the jurisdiction by alleging as a particular of negligence the wrongful act or omission within the forum when the substance of the wrongful conduct occurred elsewhere, and they go on to cite a number of authorities where the plaintiff had endeavoured to rely upon a failure to warn of a danger. These authorities include Buttigeig v Universal Terminal & Stevedoring Corp [1972] VicRp 72; [1972] VR 626 and Macgregor v Application des Gaz [1976] Qd R 175. They also refer to two cases in which the decision has gone the other way, Jacobs v Australian Abrasives Pty Ltd [1971] Tas SR 92 and Castree v E R Squibb & Sons Ltd [1980] 1 WLR 1248. The latter case was not, like the present, a case concerning the design and manufacture in England of a one-off system which was delivered in England. See also George Monro Ltd v American Cyanamid and Chemical Corporation [1944] 1 KB 432, at 439. 440 - 441; Cordova Land v Victor Brothers Inc [1966] 1 WLR 793; Koop v Bebb [1951] HCA 77; (1951) 84 CLR 629, at 648; and Distillers Co v Thompson [1971] AC 458, at 469.

11 The learned District Court Judge did say in the course of his reasons:

"There is no evidentiary support for a case based on Hockham's knowledge or culpable ignorance or that his failure to warn amounted to breach of a duty to ICI. The commissioning manual requires no more in effect of the technician than, say, the computer manual requires of its purchaser, ie, the following of instructions framed to ensure that following them will result in the various components producing the desired results."

Without further commenting on the matter, his Honour went on to refer to the judgment of Burt CJ in Koranna Nominees Pty Ltd v Roberts, unreported; FCt SCt of WA; Library No 4289; 15 October 1981, in which the former Chief Justice said, at 5:

"In my opinion, on an application by a defendant to serve a writ out of the jurisdiction pursuant to O 10, r 1 to set the service aside - O 12, r 6(1) - the plaintiff is required to sustain the service on the ground or grounds relied upon by him in the affidavit upon which the order was made and he cannot at that stage sustain the service upon some other ground."

12 The grounds of appeal are as silent as the statement of claim regarding any duty to warn. They do, however, contend that the respondent, in accepting the responsibility for commissioning the system, was obliged to ensure that the system, as installed, would operate satisfactorily. That is not in accord with the specific duties undertaken by the respondent.

13 In my opinion, the place of the act on the part of the respondent which gives the appellant its cause of complaint was England. I would therefore dismiss the appeal.

14 It may be added that the decision of the learned District Court Judge was a decision on a matter of practice and procedure. The principles to be applied are those discussed in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170, at 177 - see Contender 1 Ltd v Lep International Pty Ltd [1988] HCA 60; (1988) 63 ALJR 26. The question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration. All that we were told was that the writ had been issued immediately prior to the end of the limitation period. No issue as to any injustice was raised.

15 PIDGEON J: The appellant served on the respondent in England notice of a writ which issued out of the District Court. Leave had earlier been obtained to so serve it. It would appear that this had been obtained pursuant to Order 10 (1)(k) which permits a writ to be served when the action is founded on a tort committed within the jurisdiction. The respondent, having been served, successfully applied to Deputy Registrar Harman to set aside the writ on the ground that there was no basis to give the Court jurisdiction to try the action. This decision was confirmed on appeal by his Honour Judge Clarke. The appellant is appealing to this Court against the decision of Judge Clarke and seeks to set aside the order of the Deputy Registrar.

16 The facts are that on 24 December 1989 a company registered in England, ICI Agrochemicals, signed a purchase order directed to the respondent which was also a company resident in England carrying on business at Slough. The order requested the respondent to supply specified materials, carriage paid, to a delivery point in Western Australia. The materials were the component of an explosion suppression system comprising, amongst other things, 10 explosion pressure detonators, 17 high rate discharge suppressors, three dual exit suppressors and a Multi Zone control unit. The system was to detect and to prevent explosions occurring in the plant. The description of the goods concluded "Packing and insurance carriage (air freight) to Perth delivery address: ICI Crop Care, 120 Dampier Road, Welshpool WA Australia." This was the address of the appellant, a company incorporated in Australia. The consignment arrived and the system was installed in the plant which the appellant was operating at that address.

17 On 24 October 1990 there was a malfunction which caused damage. The control system, when properly functioning, was to be activated only when there was a rapid rise of pressure in the plant indicating the early stage of an explosion. However on that day all 20 of the explosion suppressors were activated when there was no pressure built up in the plant and no explosion about to take place. As a result of this incident, the appellant on 23 October 1996, issued a writ against the respondent. This was a day short of six years from the date of the incident and was the last day of the limitation period.

18 In the writ the appellant claimed that the respondent designed, manufactured and installed the explosion suppression system at the plant. The cause of action alleged was that the respondent designed, manufactured and installed the system negligently and this was the cause of the incident which caused damage. The contract document which I have mentioned showed that the contract was made in England and the appellant was not a party to this contract. At the hearing before the Deputy Registrar, the appellant accepted that the respondent did not install the system and that it was designed and manufactured outside the jurisdiction. The evidence showed, however, that following its installation the respondent "commissioned" the system. I shall later refer to evidence as to what this involved. The appellant indicated to the Deputy Registrar that it proposed to amend its claim by alleging that the respondent was negligent in commissioning the system and sought to include the following particulars of negligence:

"14.7 Approving the System for use when it knew or ought to have known that the System had the defects identified in paragraphs 13.1-13.6.

14.8 Failing to warn the plaintiff when the System was approved for use that the System had the defects identified in paragraphs 13.1-13.6."

19 The learned Deputy Registrar decided the matter on the basis that it was conceded that the claim, as originally pleaded, gave no basis for a court in this State to determine the matter. He considered the proposed amendment raised a different cause of action which he was not called upon to consider. The appellant appealed to his Honour Judge Clarke. The notice of appeal contained no grounds and the appellant's counsel indicated to his Honour that the matter came before him for hearing afresh. This was the way his Honour considered the matter. He dealt with it on the basis that the proposed amendment was part of the claim and reached the view that a court in this State still had no jurisdiction to consider the matter.

20 His Honour had before him evidence as to what was involved in the commissioning. This was contained in a manual prepared by the appellant. This was referred to in an affidavit of Mr M A Hockham the engineer employed by the respondent and who carried out the commissioning. He said that between 15 and 24 April 1990 he attended the chemical plant in Welshpool to commission the explosion suppression system supplied by the respondent. When he arrived at the plant the system had already been installed. He did not know who installed the system and he became involved after its installation. He said his role as a service commissioning engineer was to carry out a visual and electrical check of the system. He then referred to s 6 of the manual for the plant prepared by the appellant. This read:

The commissioning of the protection systems will be undertaken by Kidde-Graviner engineers or distributor/agents. In preparation for this work a check should be made that the installation has been done in accordance with the instructions in Section 5.0. Special care must be taken to ensure that all wiring is in accordance with the drawings and that all the cables have been correctly wired.

The Kidde-Graviner engineers or distributor/agents will do the following:

(a) Check that the installation of all detectors and suppressors is in accordance with the drawing supplied.

(d) Arm all explosion suppressors with detonators, cartridges and line cutting charges as necessary.

(e) Check all firing circuits with matchhead fuses.

(f) Witness plant run-up with the system unarmed but with indicators on all circuits to record any operations.

(g) Instruct ICI Cropcare personnel in the operation of the system."

21 Mr Hockham said that in particular he carried out the tasks described in this section.

22 His Honour Judge Clark concluded that the statement of claim and the supporting affidavit did not, in the light of the evidence before him, satisfy the requirements for an exercise of exorbitant jurisdiction.

23 His Honour's reasons for reaching that view were:

"There is nothing in the affidavits to suggest that Hockham did otherwise than ensure that the system had been installed by ICI to operate in accordance with its design. It operated without mishap for some six months which indicates that the commissioning in itself was not a cause of the explosion on 24 October 1996. The cause relied on by ICI in its ex parte application was, so far as is now relevant, faulty design which occurred outside the jurisdiction.

There is no evidentiary support for a case based on Hockham's knowledge or culpable ignorance or that his failure to warn amounted to breach of a duty to ICI. The commissioning manual requires no more in effect of the technician than, say, the computer manual requires of its purchaser ie, the following of instructions framed to ensure that following them will result in the various components producing the desired results.

In my view the statement of claim and the supporting affidavit do not in the light of the evidence before me satisfy the requirements for an exercise of exorbitant jurisdiction.

In Koranna Nominees Pty Ltd v Roberts, unreported; FCt SCt of WA; Library No 4289; 15 October 1981 Burt CJ said:

'In my opinion, on an application by a defendant to serve the writ out of the jurisdiction pursuant to O 10, r 1, to set the service aside (O 12, r 6(1)) the plaintiff is required to sustain the service on the ground or grounds relied upon by him in the affidavit upon which the order was made and he cannot at that stage sustain the service upon some other ground.'

It is for the plaintiff to persuade the court that there is 'a strong argument for the opinion that the qualifying conditions are indeed satisfied' and 'reasonable evidence has been produced that a case has been made out to satisfy the rule relied upon' (Hartwell Trent Pty Ltd v Tefal SA [1968] VicRp 1; [1968] VR 3, 10, 11, 13).

Jurisdiction under O 10, r 1 is to be exercised with great care and doubt resolved in favour of the intended defendant (Vitkovic Horni a Hutni Tezirto v Korner (1951) AC 869, 889)."

24 The first ground of appeal is expressed as follows:

"2.1 The learned Judge erred in fact and in law in finding, in essence, that on the material before him there was no evidence of a tort committed within the jurisdiction, when the material before him disclosed and he should have found that:

2.1.1 the Respondent at all times accepted the responsibility of commissioning the Explosion Suppression System in Western Australia;

2.1.2 such acceptance of responsibility carried with it an obligation to ensure that the system as installed in the Appellant's plant would operate satisfactorily;

2.1.3 the failure of the system on 24 October 1996 was, on the material before the learned Judge, evidence of failure on the part of the Respondent to properly carry out its obligation to commission the equipment;

2.1.4 such commissioning occurred within the jurisdiction of the Court."

25 Although this and the subsequent ground is based on the act of commissioning, the argument of the appellant went much further. Mr McCann submitted that the real cause of action within the jurisdiction on which the appellant relies is, first of all, delivery within the jurisdiction of a defective item; secondly, doing so without the necessary warnings and thirdly, as an affirmative act of commission rather than omission, the approval given by Mr Hockman. Mr McCann added that he did not put this latter argument forward as vigorously as the first two. The latter argument is covered within the grounds of appeal and I shall deal with it first.

26 The substance of this ground is contained in paras 2.1.2 and 2.1.3. This states that the commissioning carried with it an obligation to ensure that the system would operate satisfactorily and that the failure of the system on 24 October 1996 was evidence of a failure on the part of the respondent to properly carry out its obligation to commission the system. The work the engineer was required to do was identified in s 6 of the manual. There is no evidence to suggest that the work he was required to do in commissioning was to go beyond what is there set out. This work had no bearing on the defects alleged by the appellant. These defects as expressed in an earlier part of the claim are:

"13.1 Failing to provide power conditioning within the control circuits of the system to eliminate problems from power spikes.

13.2 Failing to properly connect and install the in-line fuse-holder within the control panel.

13.3 Using a Deugra 900 control panel rather than the more reliable MK IV control panel.

13.4 Failing to design, manufacture and install a control system capable of withstanding power disturbances.

13.5 Failing to design, manufacture and install a control panel with an undervoltage relay to lock out supply until power had been established and continuous for at least 15 seconds.

13.6 Failing to design, manufacture and install the System with a power stabiliser in its power supply."

27 These were originally pleaded as defects in design, manufacture and installation. The effect of the proposed amendment was to allege that they were defects in commissioning. I do not consider that the terms of the commissioning as set out in s 6 required the engineer to report on the type of matters referred to in these particulars. If these were defects they were defects in the original design. It was no part of the commissioning to be expressing an opinion on such questions or to attempt to remedy the position if the design were defective. For this reason the incident which occurred on 24 October 1996 would not be evidence to show there was a failure on the part of the engineer to carry out the work he was required to do.

28 The second ground (ground 2.2), which I have not set out, claims that his Honour erred in finding that the faulty design occurred outside the jurisdiction as the contractual and tortious liability of the respondent to the appellant was not co-extensive and the obligations in tort continued during the commissioning process. This claims, in effect, that as a servant of the respondent later did some work within the jurisdiction, that fact is sufficient to bring within the jurisdiction an omission giving rise to a tort which had earlier occurred outside the jurisdiction. The work performed within the jurisdiction was not part of the design or manufacture. Such work could have no effect on the place of the earlier alleged omission.

29 It was argued during the appeal in this Court that the evidence before the learned Judge showed that there were acts of negligence committed within the jurisdiction, namely delivering defective goods and, in addition, doing so without a warning. The basis on which the appellant would seek to establish a tort within the jurisdiction is that the respondent delivered in Western Australia components which it could foresee would cause damage of the type which occurred. It was therefore in breach of its duty of care to the appellant.

30 The claim was not pleaded this way and it was not submitted to either the Deputy Registrar or to the District Court Judge that this was the basis of the appellant's claim. It was not within the area of the proposed amendment put before the Deputy Registrar. It is not contained in the grounds of appeal. I do not consider it is in the circumstances open to ask this Court to adjudicate on that matter. I do not consider that the submission as to warning would take the matter any further. The facts here are different from those considered in Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458. In that case the goods did not appear to be defective or incorrectly manufactured. It was a product which could be used by some people, but which was dangerous to be used by pregnant women. By reason of that a warning was required and it was negligent not to give a warning. Normally a warning is to be expected where the goods are safe to use in some circumstances and unsafe in others. In the present case the result of the allegation in the pleading is that it is alleged that the goods were inherently defective by reason of their design and construction. If this was so that would complete the tort. It would not make commercial sense to attach a warning. The person to whom the goods were delivered could not act on it other than to reject the goods and not install them in the plant. The respondent's answer to the allegation is that it was a CIF contract and accordingly, the delivery in this country was not the act of the respondent, it was the act of the carrier to whom the respondent, under a CIF contract, was not liable. The matter must be resolved on the basis that this issue did not arise in the court below and is not brought to light by the grounds of appeal.

31 His Honour in the first two paragraphs of his reasons which I have set out reached the conclusion he did on the basis that the proposed amendment before the Deputy Registrar was part of the claim. I consider what was said in these two paragraphs is correct. There is accordingly no need to refer to the final ground of the appeal which is based on the possibility that the latter part of his Honour's reasons could be interpreted as saying that it was not open for him to consider the amendment submitted to the Deputy Registrar.

33 MILLER J: I have had the advantage of reading in draft the reasons to be published by Pidgeon J. I am in agreement with those reasons and have nothing further to add.