Union Shipping New Zealand Ltd v Morgan

It also relied on Pt 11 r 8(1)(a) and (h): "(1) The court may, on application made by a defendant to any originating process on notice of motion filed within the time fixed by subrule (2), by order - (a) set aside the originating process; (h) decline in its discretion to exercise its jurisdiction in the proceedings." 5 The primary judge had before him a Statement of Agreed Facts, three affidavits, and some documentary evidence. He noted that Pt 33 r 8A Statement asserted that all the plaintiff's out-of-pocket expenses had been paid to 8 June 2000 by the New Zealand Accident Compensation Corporation.

The primary judge's reasoning 6 The primary judge made the following remarks about the evidence. "A report dated 7 October 1998, called a 'Report of Mishap to Seafarer or Passenger' was made by the master of the vessel on which the plaintiff was injured. The report identified the plaintiff's immediate supervisor as second officer, William McDonald. It also stated that the accident happened at Port Kembla and that the location of the accident on board was the conveyor belt tunnel. The accident was described in the report in the following terms: 'Whilst discharging coal at Port Kembla, Mr Morgan was gearman. The conveyor belt slowed down and nearly stopped. Whilst he was checking the main drive roller for slipping, the belt sped up and Mr Morgan's glove and overalls became caught dragging his arm into contact with the drive roller and conveyor belt.'

The report answered 'Yes' to whether human factors and / or technical conditions were relevant. Working on moving or dangerous equipment was specified as a human factor and inadequate guarding or absence of guard was specified as a 'technical condition'. Later in the document, the report specified that the roller was not guarded at all. Further as to 'technical conditions, the report specified that the roller was not guarded. As the explanation for the plaintiff working on moving or dangerous equipment, the report stated that the plaintiff was investigating why the conveyor belt had slowed down. In response to a question as to what was being done to prevent similar accidents, the report answered, Fitting proper guard over and around the drive roller.

This evidence establishes that the events relating to the plaintiff's injury and to any liability on the part of the defendant occurred wholly within the vessel.

The documentary evidence shows that the vessel was owned by the defendant, a New Zealand corporation, and registered in New Zealand.

Contemporaneous documents are to the effect that the plaintiff was resident in New Zealand at the time of the accident. The plaintiff's engagement document for service on the vessel, dated 30 June 1998, so states. Claim documents signed by the plaintiff on 11 April 2000 specify the same New Zealand residential address. The uncontested evidence is that, following his engagement, the plaintiff was paid his wages in New Zealand, after deduction of New Zealand income tax. … Conformably, the agreed statement of facts, tendered in evidence, states that, between April and October 1998 - a period of some six months immediately prior to the accident - the plaintiff lived for 7 to 8 weeks at a time with his family in Brisbane; took 2 or 3 days at a time to make his way from Brisbane to New Zealand to start voyages in the course of his employment, staying overnight with his parents or with friends in New Zealand; worked at sea for 7 to 8 weeks; and then took a day or two to travel back from New Zealand to Brisbane, sometimes staying overnight with his parents in New Zealand. The agreed statement of facts goes on to record that, immediately following the accident and until December 1998, the plaintiff remained in Australia, receiving medical treatment in Wollongong and Brisbane. Between December 1998 and March 1999, the plaintiff was continuously in New Zealand for the purposes of medical treatment, except for a couple of short periods in Brisbane. Between March 1999 and March 2000, the plaintiff lived in Australia with his family on the Gold Coast (having sold his house in Brisbane in January 1999), with the exception of three or four trips to New Zealand for medical treatment, each of a few weeks' duration. Between March 2000 and July 2000, the plaintiff lived in New Zealand with his parents because of the need for surgery to remove a plate from his arm and because of marital difficulties (his partner remaining in the house on the Gold Coast with the children). Since July 2000, the plaintiff has resided exclusively on the Gold Coast with his family.

The uncontested evidence is that, as at the date of the plaintiff's injury, the relevant legislation in force in New Zealand was the Accident Rehabilitation and Compensation Insurance Act 1992. The 'no fault' scheme under this legislation provides for weekly compensation and cover for medical and hospital treatment. In a letter dated 21 December 1998, the Accident Rehabilitation and Compensation Insurance Corporation formally accepted that the accident was a work injury under the scheme. Compensation payments have since been made and medical expenses have been covered.

It appears that residence of some kind is a condition of entitlement for benefits under the New Zealand scheme. Section 9 of the 1992 statute provides that the Act applies in respect of personal injury suffered outside New Zealand by any person who is 'ordinarily resident in New Zealand' for which there would be cover if the injury had occurred in New Zealand. The Accident Rehabilitation and Compensation Insurance (Ordinary Residents Definition) Regulations, 1992, include a definition of the term 'ordinarily resident in New Zealand'. The definition is an extended one. It would appear that, in the plaintiff's case, entitlement depended upon having a permanent place of abode in New Zealand. However, clause 21(f) of the collective employment contract, which covered the plaintiff's engagement, provides that, where an employee has an accident in the service of a vessel whilst on articles they shall be entitled to any benefits provided by the Accident Rehabilitation and Compensation Insurance Act 1992. That provision is not expressly limited by a condition as to residence. … No expert evidence was led as to the plaintiff's legal entitlement to benefits under the scheme or to the equivalent of such benefits under New Zealand law in the circumstances of the present case. In the absence of expert evidence, I am not satisfied one way or the other as to whether the plaintiff was and / or is now a person entitled to benefits under the New Zealand legislation or to the equivalent of such benefits. If the plaintiff has been paid benefits on a false basis, he might be liable to refund whatever has been paid and he might not be entitled to receive further benefits. That is a matter of New Zealand law. A statutory bar against actions for compensatory damages for personal injury is incorporated in the 1992 New Zealand statute and is maintained in later legislation. It prohibits any proceedings independently of the code being brought in any court in New Zealand. (The relevant provision is s 14 of the 1992 statute. A provision in the same terms appears as s 394 in the 1998 statute.) No expert evidence has been called as to the proper construction of that part of the code. I am unable to say that New Zealand law, if applicable, would bar the recovery of damages in a New South Wales court but, for the purpose of the argument, I assume that it would." 7 Under the heading "Facts found or assumed", the primary judge said: "(1) On 5 October 1998, the plaintiff received injury on a vessel in Australian territorial waters. (2) The vessel was owned by the defendant, a New Zealand corporation, and was registered in New Zealand.

(3) The events relating to the plaintiff's injury and to any liability on the part of the defendant occurred wholly within the vessel. (4) At the time of his engagement, in June 1998, the plaintiff gave a New Zealand address as his place of residence. His wages were paid in New Zealand and New Zealand income tax was deducted. However, the plaintiff had, in the ordinary sense, been permanently resident in Queensland since 28 April 1998. (5) From the date of the accident, in October 1998, until December 1998, the plaintiff remained in Australia, receiving medical treatment in Wollongong and in Brisbane. Between December 1998 and March 1999, he was in New Zealand receiving medical treatment except, for a couple of short periods in Brisbane. Between March 1999 and March 2000, the plaintiff resided in Queensland, with the exception of three or four trips to New Zealand for medical treatment, each of a few weeks duration. Between March 2000 and July 2000, he lived in New Zealand for the purpose of further medical treatment and because of marital difficulties. Since July 2000, the plaintiff has resided in Queensland with his family. (6) The plaintiff has received weekly compensation and cover for medical treatment under the New Zealand 'no fault' accident compensation scheme. Whether he has been entitled to receive such benefits, whether he is liable to refund what has been paid, and whether he is entitled to further benefits under the scheme is unknown.

(7) The plaintiff is not entitled to recover damages in this court if the law applicable to liability for any such damages is New Zealand law." 8 From this account the reason for the defendant's tactical position can be inferred. If New Zealand law applies, the plaintiff is likely to recover less compensation than if New South Wales law applies, and, even more importantly from the defendant's point of view, it will not be the source of the compensation. 9 The primary judge dealt first with paragraph 2 of the Notice of Motion of 11 December 2000. He concluded that the order should not be made, because the relevant law was the law of New South Wales, not the law of New Zealand, so that there was no statutory bar to the recovery of damages. His reasoning was as follows: "The relevant principle is stated by D P O'Connell in The International Law of the Sea Vol 2 (Clarendon: Oxford, 1984), at 900:

' Foreign Ships in British Territorial Waters. There seems to be no doubt that any injury occurring on a foreign ship in British territorial or internal waters is governed by English law as the lex loci delicti and no reference is made to the law of the flag. This is certainly the case respecting foreign ships in English ports, and there seems to be no logical basis in English law for distinguishing between foreign ships in ports and in the territorial sea.' This statement of principle is consistent with United Kingdom authorities relating to the applicability of the law of foreign states to casualties occurring within their territorial waters. Historically, the courts of the United Kingdom have decided whether to exercise their jurisdiction in such cases by asking whether the alleged wrong would be actionable in the United Kingdom and not justifiable in the foreign state. That has required a determination in such cases as to whether the law of foreign states applies to wrongs allegedly committed in their territorial waters. It has been held, as a principle of private international law, that it does: The Mary Moxham [1876] 1 PD 107; McKinnon v Iberian Shipping Co Ltd [1995] SLT 49. The principle that the law of the littoral state applies to alleged wrongs committed in the territorial waters of the state applies no less to casualties occurring within the territorial waters of a common law state where the jurisdiction of that state is invoked.

Torts committed on board a ship on the high seas are governed by the law of the country where the ship is registered (the law of the flag). The only authority suggesting that this principle may apply to injury received in territorial waters (where the events have occurred wholly within the vessel) - apart from the advocacy of some text writers - is apparently to be found only in three United States decisions to which reference was made in argument: Lauritzen v Larsen 345 US 571, 97 L Ed 1254, 73 S Ct 921 (1952); Romero v International Terminal Operating Co 358 US 354, 3 L Ed 2d 368, 79 S Ct 468 (1959); Hellenic Lines Ltd v Rhoditis 398 US 306, 26 L Ed 2d 252, 90 S Ct 1731 (1970). At my level in the judicial hierarchy, I would not entertain the introduction of such a qualification to well settled common law principle. In the result, I hold that the law to be applied by this Court, in determining the question of liability in the present case, is the law of New South Wales and not the law of New Zealand. It follows that there is no statutory bar to the recovery of damages in this case." 10 The primary judge then declined to make the order sought in paragraph 1 of the Notice of Motion. After discussing the leading authorities, he said:

"Considerations which work against any finding that this Court is a clearly inappropriate forum include the following: (a) the strong presumption in favour of allowing a plaintiff to choose his or her jurisdiction; (b) the injury was received in New South Wales; (c) the plaintiff's initial and final medical treatment was received in New South Wales and in a neighbouring state of the Commonwealth; (d) the question of liability would be determined under New South Wales law at a trial in this Court; (e) the plaintiff resides in a neighbouring state of the Commonwealth; and (f) there is a legitimate forensic advantage to the plaintiff associated with trial in New South Wales because of the bar against the recovery of compensatory damages in New Zealand, although this is a consideration of little weight. Considerations operating in favour of the defendant include the following: (a) the defendant is a New Zealand corporation, albeit with trade connections in New South Wales; (b) the defendant engaged the plaintiff as a seaman on the basis that he was resident in New Zealand; and (c) the plaintiff was paid his wages in New Zealand and New Zealand income tax was deducted. It is significant, however, that there is no direct evidence of practical prejudice to the defendant arising from a trial in this court and little from which any inference of practical prejudice could be inferred. If the defendant has a defence to the plaintiff's claim under New South Wales law, there is nothing before the Court at this stage to suggest in a positive way that this is so. There is no reason to find, therefore, that it would be necessary for the defendant to bring witnesses as to liability to New South Wales for a trial in this Court. Similarly, in relation to the course of treatment provided to the plaintiff in New Zealand, there is nothing to suggest that there is anything contentious about that, or that there would be any need for either side to call New Zealand witnesses in that regard. As to the assessment of the plaintiff's alleged on-going disabilities, evidence in that regard can be obtained as readily, by examination and report, in Australia as in New Zealand, with the ready availability of the examining medical practitioners to give evidence in New South Wales. I do not find that the defendant would suffer any practical prejudice arising from trial in this Court, let alone that trial in New South Wales would have the serious repercussions for the defendant referred to by Deane J in Oceanic and picked up in Voth .

Once it is determined - as it is - that New South Wales law would apply, the defendant has a very weak case, falling far short of displacing the strong presumption against applications of this kind. I am not satisfied that this Court is a clearly inappropriate or an inappropriate forum (if there be a difference)."

The expanded factual background 11 At the start of the oral hearing of the appeal on 28 February 2002, the Court raised with the parties factual questions to which the materials before the primary judge gave no clear answers. Eventually it was agreed that the parties would endeavour to arrive at a Supplementary Agreed Statement of Facts. In this endeavour, commendably, they succeeded, and the document was provided on 25 March 2002. It stated: "The barge, Union Bulk 1, has three conveyor belts all internal to and fixed to the vessel. The centreline belt conveyor runs from after to forward. The conveyor drops into a vertical bucket, elevator conveyor which lifts the cargo to the warehouse top and drops it onto a cross belt conveyor which runs from the centreline to the port side. This cross conveyor is normally stowed within the breadth of the barge and is extended out over the port side for cargo discharge, usually dropping freely down into a shore hopper of some sort. The 2 conveyors were interconnected in the operation to discharge coal from the barge. The centreline belt conveyor runs down the middle of the vessel, as indicated in the drawing forming Annexure 'A' to this Statement. It was whilst working on this conveyor belt that the Plaintiff was injured. Annexure 'B' is a photograph of that conveyor belt. The third conveyor belt is capable of extending out over the wharf as described in paragraph 1. At Port Kembla at the relevant time, coal was being discharged from the barge into a hopper on the wharf as depicted in the photograph comprising Annexure 'C' to this statement. The third conveyor belt was not attached to the hopper. Annexure 'D' is a photograph of the barge, Union Bulk 1. At the time Mr Morgan was injured, the vessel was located at the coal terminal at Port Kembla inner harbour as indicated in Annexure 'E'. The barge was towed from New Zealand to Port Kembla by the tug 'Frederick Brown' (later named 'Karamea'). The vessels were subject to pilotage into Port Kembla arranged and provided by the Port Kembla Port Authority. The Respondent travelled from New Zealand to the entry to Port Kembla on the tug and transferred from the tug to the barge via the pilot's vessel. The barge was berthed at the coal terminal wharf in Port Kembla and was secured to the wharf by means of wire ropes. The operation to discharge coal from the barge was scheduled to take approximately 5 days. The Respondent was injured on the first day the vessel was in Port Kembla Harbour. The vessels were subject to the requirements of the Port Kembla Harbour Master in relation to entry and movement of the vessel in accordance with the Ports Corporatisation and Waterways Management Act 1995 (NSW). The vessels were subject to the Port Kembla Port Authority in relation to the provision of port services and facilities in accordance with the Ports Corporatisation and Waterways Management Act 1995 (NSW). Port Kembla access charges were payable for occupation and wharfage in accordance with the Ports Corporatisation and Waterways Management Act 1995 (NSW)." 12 The detail of the drawing and photographs does not matter.

The defendant's arguments on choice of law 13 The defendant in argument to this Court stressed the numerous points of contact between the plaintiff and New Zealand and the very limited points of contact which the Plaintiff had with Australia in general and New South Wales in particular. The defendant pointed out that the plaintiff was a New Zealand resident engaged to serve on a New Zealand registered vessel pursuant to a contract with a New Zealand resident employer under a contract governed by a Collective Employment Contract between the New Zealand Seafarers' Union and the defendant, which was a contract the proper law of which was New Zealand. The defendant also said that the injury occurred while the Union Bulk 1 was temporarily at Port Kembla, New South Wales, for five days. The defendant stressed that the events relating to the injury occurred wholly within that vessel. However, in oral argument the defendant indicated that its arguments on choice of law did not depend on the plaintiff's residence and said that those arguments would have equal force even if he had resided in New South Wales. 14 The defendant submitted that the primary judge erred in saying that it is "well settled common law principle" that the law relating to a tort allegedly committed in the circumstances of the present case is the law of the littoral state, not the law of the vessel. The error was said to flow from reliance on the passage quoted in the reasons for judgment from O'Connell's International Law of the Sea, which did not cite any authority. The only decision said by the defendant to support it was MacKinnon v The Iberia Shipping Co Ltd 1955 SC 20, which O'Connell criticised three pages later (at 903) by stating that "the American rule is more sensible than the Scottish, but it is not without its flaws". The primary judge was said to have erred in that "in the absence of any binding authority" he "followed British authority (a 19th century decision arising in a wholly different factual context and a much criticised 1955 decision of the Scottish Inner House) rather than three decisions of the United States Supreme Court, without descending to a consideration of the persuasiveness of the reasoning contained in those decisions or the criticism of the Scottish decision". The defendant said that the primary judge "simply engaged in a mechanical application" of the two decisions. It said that the 19th century decision, The Mary Moxham (1876) 1 PD 107, involved the quite different factual context of a collision between a vessel and a pier in Spanish waters. The defendant submitted that the primary judge "simply failed to consider" either "the criticism of MacKinnon" or "the persuasiveness of the reasoning" of certain "highly persuasive decisions of the United States Supreme Court", despite extensive argument inviting that approach. It was submitted that the primary judge's failure to consider these matters was contrary to authority cited to him, namely Cook v Cook (1986) 162 CLR 376 at 390. 15 In that case Matheson J, in the Full Court of the Supreme Court of South Australia, had declined to follow, as being "only dicta", some comments of Latham CJ and Dixon J, because he regarded himself as constrained to accept the reasoning in a decision of the English Court of Appeal. Mason, Wilson, Deane and Dawson JJ said: "In support of that approach, his Honour referred to a number of statements in cases in this and other courts in which it has been said that in the absence of controlling authority a State Supreme Court, including a 'Supreme Court on appeal', should, as a general rule, follow decisions of the English Court of Appeal … Whatever may have been the justification for such statements in times when the Judicial Committee of the Privy Council was the ultimate court of appeal or one of the ultimate courts of appeal for this country, those statements should no longer be seen as binding upon Australian courts. The history of this country and of the common law makes it inevitable and desirable that the courts of this country will continue to obtain assistance and guidance from the learning and reasoning of United Kingdom courts just as Australian courts benefit from the learning and reasoning of other great common law courts. Subject, perhaps, to the special position of decisions of the House of Lords given in the period in which appeals lay from this country to the Privy Council, the precedents of other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning." 16 The defendant submitted that if that process of analysing the comparative persuasiveness of the competing authorities were engaged in, the following reasoning would apply. 17 It was well established that torts occurring within a vessel on the high seas were governed by the law of the flag. "There are powerful reasons why this choice of law rule should continue to apply to torts occurring wholly within the vessel when the vessel enters the territorial waters of a particular state. These include the fact that ' [t]he test of location of the wrongful act or omission, however sufficient for torts ashore, is of limited application to shipboard torts, because of the variety of legal authority over waters she may navigate ': Lauritzen v Larsen 345 US 571 (1953). Furthermore, ' [t]o impose on ships the duty of shifting from one standard of compensation to another as the vessel passes the boundaries of territorial waters would not only be an onerous but also an unduly speculative burden, disruptive of international commerce … ': Romeo v International Team Co 358 US 354 at 384 (1959). The view contended for, namely that it is the law of the registration of the ship in which the tort occurs that should govern the outcome of the Plaintiff's claim, finds strong support in academic authorities: see Cheshire & North's Private International Law (11th edition, 1987) pp 544-545; Dicey & Morris The Conflict of Laws (12th edition, 1993) 1539-1541; Nygh Conflict of Laws in Australia (6th edition, 1995) at 355; O'Connell, ibid at para 9 above. … [T]he decisions of the United States Supreme Court on this question … are far more persuasive than MacKinnon . Application of the law of the flag satisfies the desiderata of certainty and uniformity of outcome which are criteria that a choice of law rule should ideally satisfy." 18 It was accepted that though the persuasive reasoning of which Cook v Cook spoke must be reasoning about the common law, not reasoning about statutory construction, and though the United States Supreme Court cases are on an American statute known as the Jones Act, it was submitted that "the reasoning is … common law reasoning". Where the United States courts concluded that, after being read down, the Jones Act did not apply, "the question remains what law to apply, and that's where the common law technique of identifying how applicable governing law emerges". It was also said that MacKinnon's case "has been the subject of academic criticism and, in point of fact, will probably no longer be applied in the United Kingdom: see Private International Law [(Miscellaneous Provisions)] Act 1995." 19 The defendant submitted that the New South Wales choice of law rules made no distinction between what happened on a ship that lay within a harbour (so long as the tort was wholly internal to the ship), and what happened on a ship that happened to stray inside the territorial waters of a particular jurisdiction on a journey between two other jurisdictions. 20 The defendant submitted: "At its broadest level, this appeal raises some fundamental issues … of [private] international law. It raises the question of how do you choose a choice of law rule. That in turn raises the question of what choice of law rules should do, what purposes they should serve and there will be a number of candidates on display, and the criteria your Honours apply to select the appropriate choice of law rule will be the criteria provided by the answer to those questions, what is a choice of law rule meant to do, what are the purposes, so we need to go to that." 21 The defendant said that light was cast on that task by John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, since "in their Honours' analysis … of the various candidates for a choice of law rule, one gleans some of the notions, some of the desiderata, as it were, of what a choice of law rule should do … ." 22 The defendant attempted to support the arguments of principle which it advanced by reference to passages in the following authorities. 23 In The Mary Moxham (1876) 1 PD 107 an English company possessed a pier in Spain which was damaged by a negligently handled English steamship. The Court of Appeal held, reversing Sir Robert Phillimore, that Spanish law applied. The defendant drew attention to the following remarks of Mellish LJ at 112-113, made after discussing The "Halley" (1868) LR 2 PC 193 and Phillips v Eyre (1870) LR 6 QB 1: "But then it is said that though that is the general rule, yet here the act was not done in the foreign country, because the wrongful act was committed on board an English ship on the high seas. I agree that as to acts done on board a ship itself, no doubt the English ship carries the English law with it, but I am not convinced that it carries the English law with it with reference to wrongful acts done by guiding an English ship against a pier which is part of the foreign country. It is unnecessary to consider what would be the rule in a case where the ship was outside the three-mile limit and had fired a gun which caused damage within the foreign territory, though I do not think that the case would present any more difficulty. Here the ship was really within the Spanish dominions at the time when it committed the wrong. As Mr Clarkson put it, she was coming into a Spanish port, where she had no right to go except by licence given to her by the law of Spain, and where she was bound to obey the law of that country while she was there. In that position she comes into contact with that which is stated in the plea to be part of the soil of Spain, and this brings the case within the general rule that no action can be brought in this country in respect of an alleged wrongful act committed in a foreign country which act is not wrongful by the law of that country." 24 The defendant submitted that that was a strong dictum to the effect that the law of the flag applied to "internal torts". 25 The defendant also referred to Sayers v International Drilling Co NV [1971] 1 WLR 1176. An accident took place on an oil drilling rig owned and controlled by a Dutch company and manned by its employees; the rig was in Nigerian territorial waters. Lord Denning MR said at 1181: "If I were asked to decide the proper law of the tort (apart from contract), I should have said it was Dutch law". The reasoning underlying this, which was said to have persuasive force, was, it was submitted by the defendant, as follows: "The reasoning is where you've had an internal tort where the plaintiff is an employee of the defendant, they are working on board a ship or an oil rig, the plaintiff is injured in the course of this employment [in a manner] wholly internal to the ship, what claim does the law of the place as it were have to apply to the consequences of that tort compared to, for example, the law of the environment in which they're working, let's say the ship."

The defendant submitted that that was "reinforced by the employment contract" and an analogy with the plaintiff's contract in this case, "redolent of New Zealand law", was drawn. The defendant said that what really underpinned Lord Denning's reasoning "is the happenstance of the physical location of the injury. It was in Nigerian territorial waters. It may have been in another country's territorial waters with a quite different regime for compensation. The location in other words did not bear on the circumstances of the accident." 26 The defendant also referred to the following remarks of Salmon LJ at 1183: "One thing about which everyone was agreed was that whatever system of law ought to be applied to this contract, it should not be the Nigerian system of law. The work under the contract was being carried out in the territorial waters of Nigeria. The contract itself, however, stated that although the work was expected to be done in Nigeria, the company had the right to change the venue of the work; in other words, under this contract the plaintiff could have been ordered to work in any part of the world other than the United Kingdom."

The defendant said the reason why everyone was agreed that Nigerian law did not apply was because it was commonsense that Nigerian law had no claim. "That may be a form dressed up of interest analysis the Americans toyed with from time to time. What interest does the law of the territory have to have a say in respect of an injury occurring wholly on board the ship." 27 The defendant next analysed MacKinnon v The Iberia Shipping Co Ltd 1955 SC 20. The pursuer was an engineer who was injured, allegedly by the direct and vicarious negligence of the defenders, who owned the vessel on which he worked, while it lay at anchor in an open roadstead in the territorial waters of the Dominican Republic. It was not clear why it was there. The vessel was registered in Scotland. Both Dominican Republic law and Scots law allowed a claim for patrimonial loss, but, according to the defenders, only Scots law allowed a claim for solatium (ie recovery for wounded feelings). 28 The legal background in Scotland was that M'Elroy v M'Allister 1949 SC 110 had decided that an act done in a foreign country was actionable in Scotland only if it was, if done in Scotland, a tort, and was also actionable according to the law of the place in which it was done. This corresponded to the then English rule in Phillips v Eyre (1870) LR 6 QB 1. The parties assumed M'Elroy v M'Allister to be correct, but were in dispute as to its application. They also assumed that a claim for solatium was a distinct right of action, not merely something affecting the measure of damages. 29 The Lord Ordinary, Lord Migdale, held that the pursuer could only succeed if he averred that the claim for solatium was actionable both by Scots law and the law of the Dominican Republic. That is, the rule in M'Elroy v M'Allister applied not only to delicts committed on the territory of a foreign state, but to those committed on ships in foreign territorial waters. 30 The pursuer appealed on the ground that though M'Elroy v M'Allister was correct, it did not apply: the place of the delict was not the Dominican Republic, so that the lex loci delicti was not that of the Dominican Republic but that of Scotland, and no conflict of laws attracting M'Elroy v M'Allister existed. 31 The First Division of the Court of Session agreed with the Lord Ordinary. The defendant relied on the following remarks of Lord Carmont at 28-29: "[The pursuer] contended that, as the vessel was only at anchor within the Dominican waters, the locus of the quasi -delict was 'the ship' and that the law of its flag - Scots law - applied. Accordingly, as the law of the flag and the law of this forum coincided, no heed need be paid to Dominican law, and the pursuer was therefore justified in making no mention of it in his pleadings. The argument was presented in two aspects: (1) that a ship within territorial waters of a foreign country did not lose the benefit of the law of its flag merely by being anchored off the coast of the littoral country; and (2) that, in any event, so long as the events complained of in an action were entirely internal to the vessel, as in the present case, there was nothing to support the view that the locus of the occurrence was the littoral territory, whatever its extent or extension. There is much to be said for both branches of the pursuer's argument as to locus from a practical and common-sense point of view. If the occurrence giving rise to the present case had happened when the vessel was four miles off the San Domingo coast, the law of the flag would have applied, and it would not have been of any moment whether the vessel was at anchor or not. It may seem strange that a vessel proceeding along the coast of a continent, but allowing her course to bring her within three miles of the coast, should find the same occurrences as are averred in this case treated as having taken place within the territory of the littoral State which the vessel was passing at the time. That was the contention of the defenders, and they put no emphasis on the fact of anchoring. It was enough, they said, that the vessel could be shown to be - albeit by calculations made ex post facto - in the waters accorded by international law to the littoral State as part of the State's territory and subject to its law. The difficulty of telling in certain cases where the vessel is, at the time an event takes place, was not blinked by the defenders; and it is, indeed, obvious that there is a certain aspect of absurdity present when the instance is taken of a ship coasting along, close to several countries in succession, while an internal repair operation is going on. The owners would find themselves liable to investigate that internal episode, resulting in an employee's injury, from the standpoint of the law of several countries that were being passed in succession. An episode in an airplane suggests even greater absurdities. I am unable, however, to find any real support for the pursuer's contention that mere passing along within territorial waters does not displace the law of the flag, or that something more intimate, if I may so phrase it, than anchoring is necessary to vouch presence within a State. But even a ship moored to a quay in a foreign harbour has little real connection with the law of the harbour's State, until something brings the ship or its master, crew or passengers into some relation to that State. This brings me to the pursuer's supporting argument, that, even conceding the relevance of the law of the littoral State where there is some act done by those in charge of the vessel which affects the Government of the littoral State or its subjects, or indeed any person external to the vessel, yet, when everything takes place within the ship itself, there is no ground for invoking the law of the littoral State so as to displace the law of the flag. I find this argument attractive." 32 However, Lord Carmont then said (at 29-30) that to give effect to the pursuer's argument: "would be breaking new ground and running counter to everything to be found in the treatises on international law, with one exception which I shall discuss in a moment, and, as regards the decisions which bear on the principle of international law with which we are concerned, we were referred to only a single case (and that the decision of a Judge of first instance) which seems to impinge on what is otherwise treated as settled. It is plain from what was said by Lord Atkin, when delivering the opinion of the Privy Council in the case of Chung Chi Cheung [[1939] AC 160], that in modern times the idea of even a Government ship being a 'floating island,' belonging to and retaining the law of the country of its flag, has been abandoned. Much less, then, can it be urged with success that a private trading vessel can claim extraterritoriality. As in Chung Chi Cheung's case the delict took place while the vessel was being navigated and not even at anchor, it is plain that it is the mere presence of a ship within territorial waters that is conclusive. This is in harmony with what is stated by Dicey and Cheshire in the learned treatises associated with their names. But the pronouncements of these learned authors in their texts are supported by reference to authority. I refer to the cases of The Halley [LR 2 PC 193]; Carr v Fracis Times & Co [[1902] AC 176]; The Arum [[1921] P 12]; Yorke v British and Continental Steamship Co [78 Ll LR 181]. These cases point conclusively to the locus delicti being the country having the territorial waters within which the ship was at the relevant time, and that it matters not a whit whether the vessel was navigating or at anchor, in a roadstead or tied up to a quay, and also, what is equally clear, whether the events founded on as the basis of the delict or quasi -delict are wholly internal to the vessel, or partly external to it as in the case of a collision between vessels in territorial waters. Against this view, Mr Kissen for the pursuer relied on the case of The Reresby v The Cobetas [1923 SLT 719] in which Lord Blackburn, sitting in the Outer House, found some reason for not following The Halley , which was cited to him, which is not easy to justify, or even to appreciate. In my opinion, The Reresby was wrongly decided. The Lord Ordinary has quoted the passage from the treatise of Dr Colombos on which reliance was placed, but it is in conflict with the views of Dicey and Cheshire as set forth by the Lord Ordinary. I agree with the Lord Ordinary that Dr Colombos's view falls to be rejected as not being the law that we must apply in this forum ." 33 The defendant stressed that Lord Carmont appeared to be attracted in principle by the greater certainty for shipowners afforded by selecting the law of the flag as the lex loci delicti, and that the movement of ships and the particular territorial waters into which they might move might be unpredictable: this was important in relation to the insurance arrangements which shipowners might make. The defendant referred to John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at [79] and [84]. 34 Lord Russell agreed with Lord Carmont. 35 Lord Sorn reasoned in similar fashion to Lord Carmont, and the defendant treated the reasoning in similar fashion: it highlighted the parts critical of the plaintiff's position, and sought to discount the other parts. Lord Sorn said at 35-37: "Mr Kissen, for the pursuer, did not dispute the general rule [in M'Elroy v M'Allister ], but argued that it did not apply, firstly, because the Act had taken place only in territorial waters and, secondly, because it had taken place wholly on board ship. As regards the first point, I think that, for the purposes of the rule, no distinction is to be drawn between territory and territorial waters. In The Halley [LR 2 PC 193] a collision took place in Belgian waters when the defendants' ship was in the hands of a compulsory pilot. Under Belgian law the defendants were liable for the negligence of the pilot, whereas under English law (at that date) they were not. In the judgment delivered by the Privy Council there is no trace of the view that Belgian law did not apply because the delict took place in Belgian waters as opposed to Belgian territory, and the ground of judgment was that the defendants must succeed because the plaintiff would have had no right of action if the delict had occurred in England. In Carr v Fracis Times & Co [[1902] AC 176] the alleged delict was committed in foreign territorial waters and no distinction was made between the law applicable to that situation and the law applicable to a delict committed within foreign land territory. On the contrary, in speaking of the act complained of, Lord Macnaghten says (at p 182): 'It was committed in the territorial waters of Muscat, which are, in my opinion, for this purpose, as much a part of the Sultan's dominions as the land over which he exercises absolute and unquestioned sway.' In The Arum [[1921] P 12] a collision took place owing to the fault of a compulsory pilot in the territorial waters of Gibraltar, where compulsory pilotage was a good defence. In England, at that date, it was not a good defence. Hill J had no difficulty in holding that the plaintiff failed because his case was not actionable under the lex loci delicti . It is true that in the Scottish case of The Reresby v The Cobetas [1923 SLT 719] a different result was arrived at. In that case a collision occurred between a British and a Spanish vessel in French territorial waters. Lord Blackburn held that it did not matter whether the pursuer had an actionable case by the law of France and that the rights of parties were governed solely by the lex fori . He drew a distinction between acts occurring upon the land territory of a foreign State and acts affecting ships in passage through territorial waters, but the ground of distinction is not clear and I do not think that the decision can stand with the other cases to which I have referred. Mr Kissen's next point was that, although the rule might apply to external acts occurring in territorial waters, a different rule should be applied to acts which took place entirely on board ship. External acts, he said, no doubt had a local habitation but internal acts need not be treated as having a locus other than the ship itself. For such an act the proper law to look to was the law of the ship itself, that is to say, the law of the flag. The test in such a case should be actionability by the law of the flag and actionability by the lex fori . As I understood the argument, it was not suggested that extraterritoriality in the matter of jurisdiction should be conferred on the ship with regard to such acts, but only that the law of the waters should be displaced by the law of the flag in the matter of choice of law. The injured party would be free to seek his remedy in any Court under the municipal law of which he could found jurisdiction, including the Court of the littoral State, but, it was argued, in so far as the system of law observed by that Court referred the ascertainment of a pursuer's rights to the lex loci delicti , the law of the flag in these cases should be substituted for the lex loci delicti . The law of the flag, and the subjection of those on board to it, already had a place in our practice of international law, and, it was said, there could be nothing incongruous in applying that law here. On the other hand, to apply the law of the geographical locus delicti produced results which had an element of absurdity. Did it contribute anything to the comity of nations that a Glasgow man, injured in the engine room of a Glasgow ship whilst on a voyage, should have his rights determined by the law of San Domingo in an action raised in this country when he got home? In the present case the ship was anchored in territorial waters, but, if the lex loci is to be applied here, it is to be assumed that it would also have to be applied even where the ship was only in course of passage through such waters. To the objection that the introduction of a distinction between external and internal acts would involve an additional, and perhaps troublesome, question in determining the choice of law, Mr Kissen was able to point out that the distinction already had received some recognition in connexion with quasi -delict committed on the high seas - Dicey, (6th ed) p 805; Cheshire (4th ed) p 272. The force of Mr Kissen's argument has impressed me, and re integra there would be much to be said for adopting the rule he suggests. I have, however, not found it possible to treat the matter as being an open question. The rule that the lex loci delicti applies to territorial waters appears to me to have stood for a long time without any distinction being drawn between one kind of act and another. Our leading textbooks state the rule in terms applicable to both external and internal acts. We were not referred to any case in which the distinction had been considered or even suggested. The inference to be drawn is, I think, that it has been tacitly accepted that the rule applies to all acts, including those which take place wholly on board ship. Certain observations of du Parcq LJ, as he then was, in Yorke v British and Continental Steamship Co [78 Ll LR 181] seem to show that he at any rate went upon that assumption. In that case the plaintiff, one of the ship's officers, had met with an accident on board while the ship was at Gibraltar. He brought an action in England for damages against the owners, alleging inter alia , that the accident was due to their common law negligence. There was no allegation in the pleadings that the act complained of was a wrongful act by the law of Gibraltar, and it would seem that this question had never been raised in the course of the proceedings. In agreeing with the view that the plaintiff had succeeded in establishing a case of negligence du Parcq LJ said (at p 184): 'But I just want to add this. I think that in a case of this kind it is desirable, and indeed it may be essential, strictly speaking, that the statement of claim should allege that the act complained of - negligence in this case - is a wrongful act by the law of the country where the tort is alleged to have been committed. It is perhaps rather pedantic to say anything more about it in this case, but, as anybody reading a report of this case will see it is matter arising from what is foreign territory for the purposes of this case, it is perhaps as well to make it clear that on that point the matter was dealt with.' Since the point was not presented for decision, the case need not be regarded as a precedent to the effect that no distinction is to be drawn between internal acts and the other acts. None the less I think the passage quoted, to which must be attached the weight associated with the opinion of an eminent Judge, confirms the view that it has been tacitly accepted that no such distinction is to be drawn." 36 The defendant submitted that the cases on which the First Division of the Court of Session relied did not support its conclusion either because they were distinguishable or because they assumed the answer to the present question. Chung Chi Cheung v R [1939] AC 160 concerned criminal jurisdiction, not choice of law in civil cases. The "Halley" (1868) LR 2 PC 193 and The Arum [1921] P 12 were cases of collisions; they did not involve acts internal to the ship. Yorke v British & Continental Steamship Co Ltd (1945) 78 Ll L Rep 181 was a case of an act internal to the ship, but there was no difference between the law of the flag and the law of the littoral State, and the statement of du Parcq LJ at 184 which supported the First Division of the Court of Session was neither necessary for the decision nor the result of argument. The defendant advanced various reasons for distinguishing Carr v Fracis Times & Co [1902] AC 176 of which the simplest was that the tort was not an internal one. It might be added that the answer to the question whether the relevant law was the law of the flag or the law of the littoral State was assumed, not argued. These points are all sound. 37 The defendant then turned to two of the United States authorities. 38 In Lauritzen v Larsen 345 US 571 (1953) the facts were that a Danish seaman, while temporarily in New York, joined the crew of a ship of Danish flag and registry, owned by a Danish citizen, and signed ship's articles, written in Danish, providing that the rights of crew members would be governed by Danish law and by the employer's contract with a Danish union, of which the seaman was a member. He was negligently injured aboard the ship in the course of employment, while in Havana harbour. He sued on a United States statute called the Jones Act, the operative provision of which was: "Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply … ." 39 The lower courts held that the Act applied - prima facie an astonishing conclusion, since the only link with the United States was that the plaintiff joined the ship in New York, returned to the United States after his injury, and sued in the United States. The Supreme Court, speaking through Jackson J, reversed the lower courts (Black J dissenting without reasons). At 575-576 Jackson J said: "Denmark has enacted a comprehensive code to govern the relations of her shipowners to her seagoing labor which by its terms and intentions controls this claim. Though it is not for us to decide, it is plausibly contended that all obligations of the owner growing out of Danish law have been performed or tendered to this seaman. The shipowner, supported here by the Danish Government, asserts that the Danish law supplies the full measure of his obligation and that maritime usage and international law as accepted by the United States exclude the application of our incompatible statute. That allowance of an additional remedy under our Jones Act would sharply conflict with the policy and letter of Danish law is plain from a general comparison of the two systems of dealing with shipboard accidents. Both assure the ill or injured seafaring worker the conventional maintenance and cure at the shipowner's cost, regardless of fault or negligence on the part of anyone. But, while we limit this to the period within which maximum possible cure can be effected … the Danish law limits it to a fixed period of twelve weeks, and the monetary measurement is different. The two systems are in sharpest conflict as to treatment of claims for disability, partial or complete, which are permanent, or which outlast the liability for maintenance and cure, to which class this claim belongs. Such injuries Danish law relieves under a state-operated plan similar to our workmen's compensation systems. Claims for such disability are not made against the owner but against the state's Directorate of Insurance Against the Consequences of Accidents. They may be presented directly or through any Danish Consulate. They are allowed by administrative action, not by litigation, and depend not upon fault or negligence but only on the fact of injury and the extent of disability. Our own law, apart from indemnity for injury caused by the ship's unseaworthiness, makes no such compensation for such disability in the absence of fault or negligence. But, when such fault or negligence is established by litigation, it allows recovery for elements such as pain and suffering not compensated under Danish law and lets the damages be fixed by jury. In this case, since negligence was found, United States law permits a larger recovery than Danish law. If the same injury were sustained but negligence was absent or not provable, the Danish law would appear to provide compensation where ours would not." 40 Jackson J then pointed out the superficial breadth of the statutory language, or what he called, in a typical phrase, "the literal catholicity of its terminology" (at 576-577): "If read literally, Congress has conferred an American right of action which requires nothing more than that plaintiff be 'any seaman who shall suffer personal injury in the course of his employment.' It makes no explicit requirement that either the seaman, the employment or the injury have the slightest connection with the United States. Unless some relationship of one or more of these to our national interest is implied, Congress has extended our law and opened our courts to all alien seafaring men injured anywhere in the world in service of watercraft of every foreign nation - a hand on a Chinese junk, never outside Chinese waters, would not be beyond its literal wording. But Congress in 1920 wrote these all-comprehending words, not on a clean slate, but as a postscript to a long series of enactments governing shipping. All were enacted with regard to a seasoned body of maritime law developed by the experience of American courts long accustomed to dealing with admiralty problems in reconciling our own with foreign interests and in accommodating the reach of our own laws to those of other maritime nations." 41 Jackson J then said (at 577) that the shipping laws of the United States "have been construed to apply only to areas and transactions in which American law would be considered operative under prevalent doctrines of international law." He relied on American authority to the effect that statutes ought not to be construed to violate the law of nations if any other possible construction existed, and English authority to the effect that statutes should not, if any other construction was possible, be construed to apply to acts by foreigners outside the dominions of the enacting State. 42 Jackson J then said (at 581-582): "Respondent places great stress upon the assertion that petitioner's commerce and contacts with the ports of the United States are frequent and regular, as the basis for applying our statutes to incidents aboard his ships. But the virtue and utility of sea-borne commerce lies in its frequent and important contacts with more than one country. If, to serve some immediate interest, the courts of each were to exploit every such contact to the limit of its power, it is not difficult to see that a multiplicity of conflicting and overlapping burdens would blight international carriage by sea. Hence, courts of this and other commercial nations have generally deferred to a non-national or international maritime law of impressive maturity and universality. It has the force of law, not from extraterritorial reach of national laws, nor from abdication of its sovereign powers by any nation, but from acceptance by common consent of civilized communities of rules designed to foster amicable and workable commercial relations. International or maritime law in such matters as this does not seek uniformity and does not purport to restrict any nation from making or altering its laws to govern its own shipping and territory. However, it aims at stability and order through usages which considerations of comity, reciprocity and long-range interest have developed to define the domain which each nation will claim as its own. Maritime law, like our municipal law, has attempted to avoid or resolve conflicts between competing laws by ascertaining and valuing points of contact between the transaction and the states or governments whose competing laws are involved. The criteria, in general, appear to be arrived at from weighing of the significance of one or more connecting factors between the shipping transaction regulated and the national interest served by the assertion of authority. It would not be candid to claim that our courts have arrived at satisfactory standards or apply those that they profess with perfect consistency. But in dealing with international commerce we cannot be unmindful of the necessity for mutual forbearance if retaliations are to be avoided; nor should we forget that any contact which we hold sufficient to warrant application of our law to a foreign transaction will logically be as strong a warrant for a foreign country to apply its law to an American transaction." 43 At 583 he said: "We therefore review the several factors which, alone or in combination, are generally conceded to influence choice of law to govern a tort claim, particularly a maritime tort claim, and the weight and significance accorded them." 44 The first factor he referred to was the place of the tort. He said, however, at 583-584: "The test of location of the wrongful act or omission, however, sufficient for torts ashore, is of limited application to shipboard torts, because of the varieties of legal authority over waters she may navigate. These range from ports, harbours, roadsteads, straits, rivers and canals which form part of the domain of various states, through bays and gulfs, and that band of the littoral sea known as territorial waters, over which control in a large, but not unlimited, degree is conceded to the adjacent state. … We have sometimes uncompromisingly asserted territorial rights, as when we held that foreign ships voluntarily entering our waters become subject to our prohibition laws and other laws as well, except as we may in pursuance of our own policy forego or limit exertion of our power. Cunard SS Co v Mellon, 262 US 100. … This doctrine would seem to indicate Cuban law for this case. But the territorial standard is so unfitted to an enterprise conducted under many territorial rules and under none that it usually is modified by the more constant law of the flag."

In argument in this regard the defendant pointed out that not only does maritime activity take place in many areas, but vessels can go in unanticipated directions for various reasons - legal, moral or climatic. 45 The second factor identified by Jackson J was the law of the flag. He said at 584: "Perhaps the most venerable and universal rule of maritime law relevant to our problem is that which gives cardinal importance to the law of the flag. Each state under international law may determine for itself the conditions on which it will grant its nationality to a merchant ship, thereby accepting responsibility for it and acquiring authority over it. Nationality is evidenced to the world by the ship's papers and its flag. The United States has firmly and successfully maintained that the regularity and validity of a registration can be questioned only by the registering state."

He also said that "the weight given to the ensign overbears most other connecting events in determining applicable law." At 586 he said: "These considerations are of such weight in favor of Danish and against American law in this case that it must prevail unless some heavy counterweight appears." 46 The third factor was the allegiance or domicile of the plaintiff and the fourth was the allegiance or domicile of the defendant. The fifth was the place of any relevant contract. The sixth was the inaccessibility of the non-American forum. The seventh was the law of the forum. 47 At 592-593 he said: "This review of the connecting factors which either maritime law or our municipal law of conflicts regards as significant in determining the law applicable to a claim of actionable wrong shows an overwhelming preponderance in favor of Danish law. … But we can find no justification for interpreting the Jones Act to intervene between foreigners and their own law because of acts on a foreign ship not in our waters." 48 The defendant did not rely on Lauritzen v Larsen as an authority directly applicable to the present problem or as an authority directly against the selection of New South Wales law. Indeed, it would have been impossible to do this if only for the reason that "neither party [urged] Cuban law as controlling": at 584. Rather the defendant employed the case as a source of materials for arguments. Thus it said that it and other United States decisions: "do reflect a proper law approach because they isolate a series of connecting factors and they say in a particular case you give different weight to the different factors, that's not an approach I'm advocating. But what I am doing is trying to pick up from the analysis in the decision all the reasons against the application for the law of the territory and to the extent that the law of the flag is presented as, in the United States jurisprudence, one factor I'm adopting that reason and saying that's the reason why this Court should adopt it as the rule, the law of the flag." 49 Further, it said: "Here is the germ of an argument which is developed later which is an argument based on comity in a sense, that the law of the [littoral] state has no real interest in an injury sustained on board a foreign flagged vessel at least in circumstances where the country whose flag supplies the law has its own comprehensive system of compensation, it's an argument based on comity, it's a type perhaps of governmental interest style analysis. We should respect in other words, it is said, the fact that this really is an internal matter. It's an employer and employee in a particular employment context on a vessel with a particular flag and that flag's country has its own system of compensation. That argument which has its writ in comity then can be reinforced, taken a step further, by an argument based on … what the parties' reasonable expectations would be."

It also said: "What would, on the circumstances postulated as a wholly internal incident involving an injury sustained by a New Zealand employee in the course of performing his New Zealand work contract for his New Zealand employer and injured by a machine on board the New Zealand [vessel], what law would those parties reasonably expect would apply to govern that man's right to compensation. I submit that, and one can multiply the examples, it would be New Zealand law." 50 The defendant then analysed Romero v International Terminal Operating Co 358 US 354 (1959). The plaintiff was a Spanish seaman injured when struck by a cable on a Spanish vessel temporarily in New York. Frankfurter J and four other justices held that he could not rely on the Jones Act. The majority followed the Court's analysis in Lauritzen v Larsen. One specific passage relevant to the defendant's argument was (at 389): "To impose on ships the duty of shifting from one standard of compensation to another as a vessel passes the boundaries of territorial waters would be not only an onerous but also an unduly speculative burden, disruptive of international commerce and without basis in the express policies of this country. The amount and type of recovery which a foreign seaman may receive from his foreign employer while sailing on a foreign ship should not depend on the wholly fortuitous circumstance of the place of injury." 51 The defendant then referred to statements by Kahn-Freund, Dicey & Morris, Cheshire & North, Nygh, O'Connell and Working Paper No 87 of the English Law Commission. These were critical of MacKinnon v The Iberia Shipping Co Ltd 1955 SC 20, terming the result variously "absurd", "unattractive", and "less sensible than the United States position". It will be convenient to examine the detail of these criticisms later. 52 The defendant concluded by submitting that the goal of choice of law rules in the conflicts of laws was to avoid arbitrary results "because arbitrary results are at the end of the day inconsistent with the notion of a rule of law". It also submitted that the goal of choice of law rules was to produce certainty of outcome so as to permit potential plaintiffs, potential defendants and their insurers to order their affairs in an economically efficient way: John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at [44], [79] and [84]. Choice of law rules ought also to accord with their reasonable expectations: John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at [87]. They ought to reflect the legitimate interests of States. 53 The defendant submitted that a choice of law rule based on the law of the flag permitted certainty and continuity of legal regime from that prevailing on the high seas through the territorial sea up to the point where the vessel engaged in some physical contact with land, property or persons on the littoral State or its territorial waters in circumstances giving rise to tortious liability. The defendant submitted that it was only at that point in time that the littoral State had any "interest" in the regulation of events involving the vessel or its operators on the one hand and another party on the other hand. The defendant said that that would avoid arbitrariness, uncertainty, conflict with reasonable expectations and false assertions of littoral State interests which did not exist. The defendant gave the following example of the comparative deficiencies of the law of the littoral State test. "Assume an Australian registered cruise vessel sailing to New Zealand, through the Pacific Islands and culminating in Hawaii. The same incident on board the vessel, occurring whilst in Australian, New Zealand, Nauruan and United States territorial waters, would, on the [plaintiff's] case and by reason of the primary judge's decision, be likely to expose the shipowner/operator to four radically different levels of exposure. This is hardly satisfactory for the shipowner and wholly arbitrary for the plaintiff." 54 The defendant said that it was unsatisfactory for a vessel to be subject to ever-changing conflicts rules in the course of journeys through particular territorial waters with which it had nothing to do, being journeys which its owners or operators might not be able to predict because of the possible obligation, legal or moral, to go to the rescue of other vessels in distress, or because of the possible effect of storms and other weather conditions, or because of the fact that voyage and time charters and sub charters might have the result that the owner might not have knowledge of, let alone control of, the ship's destination.

The defendant's arguments on choice of law considered: preliminary matters 55 First, it must be remembered that the defendant pointed to no case in the British Commonwealth which has held or said that MacKinnon v The Iberia Shipping Co Ltd was wrongly decided or that the law of the flag should be applied to a tort occurring on a ship in territorial waters. In Far Eastern Shipping Co Ltd v Abrankin [1999] VSCA 107 at [6] Callaway JA (Batt JA concurring) said that its incorrectness was sufficiently arguable, by reason of the statement in Dicey & Morris on the Conflict of Laws (12th ed, 1993) that it was to be hoped it would not be followed in England, to justify an extension of time within which to appeal, but the court declined to extend time because the point had not been taken in the County Court. A statement in such circumstances that the correctness of the case was arguable does not by itself shake confidence in its correctness. 56 The case has been criticised, and longevity not coupled with serious past challenge is no necessary badge of correctness, but the case stood for forty years in England and Scotland, and, as will be seen, it is not clear that legislation in 1995 in relation to the choice of law rules in tort has overturned it. Criticised though it has been, all the critics accept that it stated Scots and English law, Dicey & Morris and Cheshire & North suggest that it may still do so, and the only Australian critics, O'Connell and Nygh, accept that it stated, and states, Australian law. The High Court in Regie National des Usines Renault SA v Zhang (2002) 187 ALR 1 abandoned the rule in Phillips v Eyre, but appeared to reserve for future consideration the law in relation to maritime torts: at [76]. Hence that case, too, by itself casts no doubt on MacKinnon v The Iberia Shipping Co Ltd. 57 A second matter, which raises difficulty for the defendant, is that the United States cases can be read in three ways. The first way sees them as decisions on the construction of a specific statute. As the majority said in Hellenic Lines Ltd v Rhoditis 398 US 306 at 308 (1970), the seven factors set out by Jackson J in Lauritzen v Larsen 345 US 571 (1953) are "factors to be considered in determining whether a particular shipowner should be held to be an 'employer' for Jones Act purposes". There is no equivalent statute to be considered in the present case. The second way sees the United States decisions as decisions which propound a proper law of the tort principle for choice of law. The defendant accepted that this was one thing they do, and disavowed that approach for Australia: at the time of the oral argument that approach had been negated for intra-Australian torts in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 and, after the hearing of the appeal, that approach was negated for trans national torts: Regie National des Usines Renault SA v Zhang (2002) 187 ALR 1. The third way sees the United States decisions as a quarry of materials for arguments, but so viewed, the materials cannot rise above the strength of the arguments made out of them. One thing which the United States cases certainly do not stand for is the proposition that the law of the flag universally, mechanically and absolutely applies to all "internal" torts. It was not applied, for example, in Hellenic Lines v Rhoditis 398 US 306 (1970) (which also held that the seven factors are not exhaustive) or Fisher v Agios Nicolaus V 628 F 2d 308 (1980). If the defendant had relied on the actual tests propounded in the United States authorities, it would have had to abandon any claim that greater certainty or predictability were produced than is produced by the test in MacKinnon's case, because of the non-exhaustive range of factors and the interaction of the different amount of weight each might bear in particular cases. The consequence of the defendant's approach is that it asks this Court - an intermediate court of appeal only - to adopt as the common law of New South Wales and hence Australia a test which has never been the common law of England, or the judge made law of Scotland, or the law of the United States, or, so far as the citation of authority went, the law of any other common law jurisdiction. It is highly questionable whether that is a proper step for an intermediate court of appeal to take. 58 A third matter is that strictly speaking the present issue is different from the issue in MacKinnon v The Iberia Shipping Co Ltd. In that case the issue for the Scots forum was whether the second limb of the rule in Phillips v Eyre and M'Elroy v M'Allister 1949 SC 110 was satisfied, namely whether the defender's conduct was actionable under the law of the place of the tort, which in turn led to an inquiry whether that place was the ship or the territorial sea. Here the issue for the New South Wales forum, after Regie National des Usines Renault SA v Zhang (2002) 187 ALR 1, is what the place of the tort is with a view to applying the law of that place. 59 A fourth matter, which as far as it goes is favourable to the defendant, is that so far as MacKinnon v The Iberia Shipping Co Ltd relied on authorities, not one of them is a case in which the issue of what the place of an "internal" tort in the territorial sea is was argued. 60 A fifth matter, which as far as it goes is unfavourable to the defendant, is that certain of the English authorities it relied on are in truth not helpful. 61 Thus Mellish LJ's dictum in The Mary Moxham (1876) 1 PD 107 at 112-113 does not assist in resolving the problem. The case did not involve an "internal tort" and it spoke of the wrongful act being committed "on the high seas", which is not the present case. As Dicey pointed out (7th ed p 975 n 20), it is not clear whether Mellish LJ's statement "as to acts done on board the ship itself, no doubt the English ship carries English law with it" was referring to acts done on the high seas. 62 Lord Denning MR's remarks in Sayers v International Drilling Co NV [1971] 1 WLR 1176 at 1181 turned on the application of a "proper law of the tort" test, which is not the test in Australia, and those remarks were not supported by detailed reasoning. Further, as Salmon LJ's observations indicate, the case is scarcely an authority against the application of Nigerian law (as the law of the littoral State) since "everyone" agreed on that point, and the only choice was between Dutch law as the law of the rig and English law as the law of the victim's nationality. 63 Finally, the defendant raised, as an authority which might be against its argument, Commonwealth v Mewett (1997) 191 CLR 471, particularly an observation of Dawson J at 510-511 and an observation of Gummow and Kirby JJ at 540-541. The plaintiff did not rely on those observations. The present issue was not argued in that case. The observations were not directed to the present issue. They were uttered in the course of discussions about the impact of McKain v R W Miller & Co (SA) Pty Ltd (1991) 174 CLR 1 (now overruled by John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503). The sharp distinction between the law of the littoral jurisdiction and the law of the flag was not raised, since the vessel was an Australian naval vessel in Victorian waters. In all the circumstances it is not possible to derive from Commonwealth v Mewett anything, whether adverse to the defendant's contentions or not, which assists in solving the present problem.

The defendant's arguments on choice of law considered: the criticisms of authors 64 Before examining the criticisms relied on by the defendant, it may be noted that the initial reception given to MacKinnon v The Iberia Shipping Co Ltd was not hostile. A Donaldson, Lecturer in Private International Law in the University of Glasgow, discussed Lord Migdale's reasoning without criticism in (1954) 3 ICLQ 693-696. D M Walker, Professor of Jurisprudence in the University of Glasgow, said that it was hard to see how the conclusions of the First Division could have been avoided: (1955) 67 Jur Rev 213. (Indeed in Scotland the case appears to have been accepted as correct at all material later times: A E Anton, Professor of Law in the University of Aberdeen, in his Private International Law: A Treatise From the Standpoint of Scots Law (2nd ed, 1990 p 411) does so.) In England, P B Carter was a little more critical. In (1958) 33 British Year Book in International Law 1957 341 at 343 he said: "it is perhaps regrettable that the First Division should have considered itself bound to apply Dominican law as the lex loci delicti of a tort which could not seriously be said to have been of much interest to the Dominican Republic." 65 The defendant said that whatever Dicey and Cheshire had said in the editions of their books current in 1955, which were relied on in MacKinnon's case, the modern editions said the contrary. And the defendant also contended that its position was favoured by Colombos (and, to the same effect, Churchill & Lowe, The Law of the Sea (3rd ed, 1999) pages 65-68 and Chow Hung Ching v R (1948) 77 CLR 449 at 476).

Colombos and the jurisdiction/choice of law confusion 66 So far as Colombos is concerned, it is appreciated that Lord Migdale and Lord Carmont treated his views as supportive of the pursuer, and evidently counsel for the pursuer did so as well, but it is far from clear that they are. That doubt remains even though Colombos later thought that MacKinnon's case was inconsistent with his views. 67 The passage quoted by Lord Migdale from Higgins and Colombos, International Law of the Sea (2nd ed p 219 and 3rd ed p 241) is: "whilst there is no legal provision in existence exempting foreign vessels from the operation of the domestic laws of the country in whose territorial waters they find themselves, there is a rule of international comity and practice which prohibits the exercise of the local jurisdiction on all acts of internal discipline on the vessel, and on all civil acts governing and regulating the rights, duties and obligations of all persons on board so long as the peace and tranquillity of the littoral State are not affected and its aid has not been requested by the master of the ship or the Consul of her country." 68 Acts of negligence for which a shipowner may be liable are not readily described as "civil acts governing and regulating the rights, duties and obligations of all persons on board." 69 Further, even if the passage is to be read as supporting the defendant's position, it does not do more than state a conclusion with little supporting reasoning. The evidence for the rule of international comity is set out in a footnote as being, apart from another work by Colombos: "articles 8 and 38 of the Stockholm Resolutions of the Institute of International Law, Annuaire vol 34 (1928), pp 749-757. See also article 9 of the Draft Convention adopted by The Hague Codification Conference of 1930 and article 11 of the Draft Convention of the International Law Association at Vienna in 1926 (34th Report, p 102)."

Without further elaboration, these are not strong guides to the substantive content of the Scottish (or English or New South Wales) rules of the conflict of laws. 70 Further, there are strong reasons for supposing that Colombos is not speaking of choice of law rules at all. Rather he is speaking of "jurisdiction" in the sense of physical exercise of State power. Thus in the 3rd edition, page 240, in a paragraph headed "Criminal jurisdiction over passing ships." he said: "Looking at the case of passing vessels by itself, it is difficult to contest the right of the littoral State to apply its criminal jurisdiction over the ships and persons on board, if it chooses to do so. But it is evident that the interests of the State are only attracted to acts whose consequences extend outside the ship and that to attempt to exercise jurisdiction in respect of acts producing no effect beyond the ship and not tending to do so is, as Hall puts it, 'of advantage to no one.' The Draft Convention which emerged out of the labours of the Hague Codification Conference of 1930 provides that a coastal State may not take any steps on board a foreign vessel passing through its territorial sea to arrest any person or to conduct any investigation by reason of any crime committed on board the vessel during her passage, save only in the following cases: (1) if the consequences of the crime extend beyond the vessel, or (2) of the crime is of a kind to disturb the peace of the country or the good order of the territorial sea, or (3) if the assistance of the local authorities has been requested by the master of the vessel or by the Consul of the country whose flag the vessel flies."

A footnote reveals that the relevant part of the Draft Convention was article 8, and says that "Similar provisions had already been adopted by the Institute of International Law of Stockholm in 1928, Annuaire, vol 34, p 757 (article 7)". In the next paragraph, headed "British practice.", Colombos says: "The Territorial Waters Jurisdiction Act, 1878, which was enacted as a result of The Franconia case, affirms the jurisdiction of the Admiralty in respect of any offence committed by a person 'whether he is or is not a subject of Her Majesty, on the open sea within the territorial waters of Her Majesty's dominions,' although it may have been committed on board or by means of a foreign ship. The absolute rule laid down in this Act is tempered by the provision contained in section 3 that 'proceedings for the trial and punishment of a person who is not a subject of Her Majesty shall not be instituted in any Court of the United Kingdom except with the consent of one of Her Majesty's Principal Secretaries of State.' Moreover, although English statutory law reserves exclusive Admiralty jurisdiction over all vessels in British territorial waters, such jurisdiction is not in actual practice enforced except when the effect of the occurrences on board the foreign vessel extends beyond the vessel herself and those on board and 'the exigencies of good government are more likely to require that jurisdiction should be exercised.' In fact, therefore, interference in criminal matters with foreign vessels in British territorial waters is limited to what is strictly necessary to safeguard public order and the security of the State." 71 The next paragraph is headed "Civil jurisdiction over passing ships." It contains the words quoted by Lord Migdale, but they are preceded by the following words: "If the exercise of criminal jurisdiction appears justified in such cases, it is certain that a State's claim to enforce its civil jurisdiction in similar circumstances would be unwarranted; the ship that ploughs these waters in the pursuit of her legitimate trade and navigation should be left alone in all matters of her internal government. In other words … ."

The reasoning in the passages preceding that quoted by Lord Migdale points towards the subject being "jurisdiction" in the sense of physical power employed in aid of the criminal law (which is common in New South Wales) or civil law (which is rare in New South Wales, except in connection with such unusual events as compelling the attendance of witnesses or Anton Piller orders, or more common events relating to the enforcement of judgments). The themes discussed include the non-disturbance of peace and good order and invitations to the shore authorities by the master of the vessel or the Consul. Where a tort takes place on board a ship in territorial waters, there is no doubt that by the rules of the New South Wales conflict of laws, New South Wales courts have jurisdiction, and the defendant did not contend to the contrary: indeed its Notice of Motion expressly stated that this Court had jurisdiction. The only question is what system of substantive law operates under the choice of law rules of the New South Wales conflict of laws, and hence what those rules are. For a New South Wales court which has jurisdiction to decide what damages should be paid in relation to an alleged tort on a ship in territorial waters to select New South Wales law, not New Zealand law, as the appropriate substantive law does not interfere with any "ship that ploughs these waters in the pursuit of her legitimate trade and navigation", and leaves her "alone in all matters of her internal government". 72 After the passage discussed in MacKinnon's case, Colombos goes on to discuss jurisdiction over vessels in port in terms suggesting again that it is the exercise of physical interference which is under debate. He cites various French cases on powers of arrest. The discussion appears largely to centre on, though it is not completely limited to, criminal jurisdiction. He concludes by stating in a manner which, if it is relevant at all, is adverse to the defendant's argument (at p 245): "It would … appear that until the question is settled by international agreement, the general rule should be applied that the jurisdiction of the local authorities must, on principle, prevail over that of the flag-State of the vessel, unless there is an express provision to the contrary in any treaty or convention between the two States concerned, or unless the local authorities elect to waive their right of jurisdiction as a matter of comity in the circumstances already examined." 73 In the next edition of the International Law of the Sea (4th ed, 1959), Colombos did not deal with MacKinnon's case after the passage in the 3rd edition which Lord Migdale refused to apply, but later, at pp 286-7. He referred to Lauritzen v Larsen 345 US 571 at 585 (1953) as following Wildenhus' Case 120 US 1 at 12 (1887). He said that the United States Supreme Court in United States v Flores 289 US 137 at 158 (1933) held that "all matters of discipline and all things done on board" which did not involve the peace or the tranquillity of the port where the vessel found herself should be left to the authorities of the flag-State. He also referred to Cunard Steamship Co Ltd v Mellon 262 US 100 at 123 (1923). He then said: "In direct opposition to these leading authorities, the Scottish Court of Session decided in McKinnon v Iberia Shipping Co in a claim for damages arising out of an accident suffered by the engineer of the British vessel The Baron Ramsay whilst she was lying at anchor off San Pedro de Macoris in the Dominican Republic, that the claim could only succeed if it was actionable both by the foreign law as well as by the law of Scotland, although all the events in this case were internal to the ship. It is submitted that this decision of the Scottish Court is contrary to established international practice." 74 It is convenient first to take up Colombos' reference to Lauritzen v Larsen 345 US 571 at 585 (1953). At page 585-586 the court said: "This Court has said that the law of the flag supersedes the territorial principle, even for purposes of criminal jurisdiction of personnel of a merchant ship, because it 'is deemed to be a part of the territory of that sovereignty [whose flag it flies], and not to lose that character when in navigable waters within the territorial limits of another sovereignty.' On this principle, we concede a territorial government involved only concurrent jurisdiction of offenses aboard our ships. United States v Flores, 289 US 137, 155-159, 77 L ed 1086, 1093-1095, 53 S Ct 580, and cases cited. Some authorities reject, as a rather mischievous fiction, the doctrine that a ship is constructively a floating part of the flag-State, [18. The theoretical basis used by this Court apparently prevailed in 1928 with the Permanent Court of International Justice in the case of The Lotus, PCIJ, Series A, No 10. For criticism of it see Higgins and Colombos, International Law of the Sea 2d ed 193-195. We leave the controversy where we find it, for either basis leads to the same result in this case, though this might not be so with some other problems of shipping.] but apply the law of the flag on the pragmatic basis that there must be some law on shipboard, that it cannot change at every change of waters, and no experience shows a better rule than that of the state that owns her. It is significant to us here that the weight given to the ensign overbears most other connecting events in determining applicable law. As this Court held in United States v Flores, supra (289 US at 158), and iterated in Cunard SS C v Mellon, supra (262 US at 123): 'And so by comity it came to be generally understood among civilized nations that all matters of discipline and all things done on board which affected only the vessel or those belonging to her, and did not involve the peace or dignity of the country, or the tranquillity of the port, should be left by the local government to be dealt with by the authorities of the nation to which the vessel belonged as the laws of that nation or the interests of its commerce should require. …' This was but a repetition of settled American doctrine. [19. Wildenhus' Case (Mali v Keeper of Common Jail) 120 US 1, 30 L ed 565, 7 S Ct 385; Brown v Duchesne (US) 19 How 183, 15 L ed 595. For application of this doctrine in tort cases see Bonsalem v Byron S S Co (CA 2d NY) 50 F2d 114; Cain v Alpha SS Corp (CA 2d NY) 35 F2d 717; Grand Trunk R Co v Wright (CA 6th Mich) 21 F2d 814; Restatement, Conflict of Laws s405.]" 75 Four points may be noted about the passage quoted. The first point is that while the Supreme Court said that both quotations are from United States v Flores 289 US 137 at 155-6 and 158 (1933) respectively, in fact only the first is. United States v Flores was a case about criminal jurisdiction, and the statement quoted from it is one for which cases about criminal jurisdiction in both the United States and England are cited. The second point is that the second quotation, though approved in United States v Flores, is in fact from Wildenhus' Case 120 US 1 at 12 (1887). That too was a criminal case in the sense that the Belgian Consul failed to obtain release on habeas corpus of a Belgian seaman held in a New York gaol on a charge of homicide committed on a Belgian ship lying in New Jersey waters. The third point is that the famous case of The Lotus PCIJ, Series A, No 10 (1927), referred to in note 18, is a case on the jurisdiction, as a matter of public international law, of the Turkish courts to prosecute the officer of the watch on a French vessel which collided with a Turkish vessel causing loss of life. The fourth point is that note 19 acknowledges that the doctrines stated in Wildenhus' Case and United States v Flores are doctrines stated in relation to the exercise of criminal jurisdiction, and were only later extended to tort. 76 Further, Cunard Steamship Co Ltd v Mellon 262 US 100 at 123 (1923) contains nothing favourable to the defendant's contentions, but in any event the case concerned criminal jurisdiction: the plaintiffs were seeking injunctions to restrain officers of the United States government from seizing, pursuant to statutory power, intoxicating liquor being carried in breach of federal law. In short, the American cases are dealing with an entirely distinct subject from that dealt with in MacKinnon v The Iberia Shipping Co Ltd, and they do not demonstrate that the latter case is contrary to established international practice. 77 In the 5th edition of Colombos' International Law of the Sea, published in 1962, the passage which MacKinnon's case survived. In the 6th edition, published in 1967, the discussion of the American cases was retained at pages 326-327, but the criticism of MacKinnon's case was removed, either because the case was thought too worthless to merit discussion or because it was realised that it was dealing with a different topic. 78 A fallacy similar to that appearing in the 4th and 5th editions of Colombos underlay the defendant's reliance on Churchill & Lowe, The Law of the Sea (3rd ed, 1999) pages 65-68 and Chow Hung Ching v R (1948) 77 CLR 449 at 476: the relevant passages relate to the physical exercise of executive powers, particularly powers of arrest and criminal prosecution, not to choice of law questions.

Cheshire 79 On page 272 of the 4th edition of Cheshire's Private International Law, published in 1952, the following passage appears: "The law that governs maritime torts depends on whether they have been committed within the territorial waters of some State or upon the high seas. In the former case the ordinary doctrine as laid down in Phillips v Eyre applies. The tort is treated as having been committed within the jurisdiction of the country possessing sovereignty over the waters."

That was the passage to which Lord Migdale referred explicitly and to which the Inner House referred by implication. It was a passage which first appeared in the 3rd edition, published in 1947, page 387. 80 The first edition of Cheshire's Private International Law to appear after McKinnon's case was the 5th, published in 1957. The case was mentioned without disapproval on page 275 note 2, but only as part of a line of cases criticising Machado v Fontes [1897] 2 QB 231, not on the present issue. On page 283 Cheshire repeated the passage which was quoted above from the 4th edition and was relied on by Lord Migdale. No authority was cited, though MacKinnon's case was an authority supporting the propositions set out. Cheshire's initial reaction to MacKinnon's case, as recorded in 1957, was thus not unfavourable. 81 In Cheshire's Private International Law (6th ed, 1961), note 9 on pages 286-287 repeats page 275 note 2 of the 5th edition. MacKinnon's case is referred to on page 280 as part of a discussion rejecting the existence of any proper law of the tort doctrine in England or Scotland. At page 295 the passage relied on by Lord Migdale is repeated, and authorities are now cited, one being MacKinnon's case, the other being The Arum [1921] P 12. Cheshire's reaction to MacKinnon's case by 1961 was thus if anything more favourable than in 1955. 82 Cheshire's Private International Law (7th ed, 1965) page 248 note 1 corresponds with page 275 note 2 of the 5th edition. Pages 250-251 discuss MacKinnon's case as illustrating aspects of the rule in Phillips v Eyre. At pages 257-258 the two paragraphs appearing in the 4th, 5th and 6th editions appear, but with the following addition: "The Scottish Court of Session in MacKinnon v Iberia Shipping Co Ltd rejected the argument, attractive on the score of common sense, that the distinction between torts having consequences external to the ship and those having purely internal consequences - a distinction that affects torts on the high seas - should be extended to the case of torts in territorial waters." This is the first occasion on which Cheshire can be said in any sense to have criticised MacKinnon's case. 83 The 8th edition of the work was published in 1970. Most, but not all, of the work was edited by P M North, not Cheshire. The passages relevant to MacKinnon's case all appeared in North's sections. No criticisms appeared of MacKinnon's case except at page 282, which was in the same terms as the corresponding passage on pages 257-258 of the 7th edition. 84 In the 9th edition, solely edited by North, the passage at page 282 of the 8th edition was repeated, together with the following footnote, note 9: "In Sayers v International Drilling Co NV … [1971] 1 WLR 1176 … Nigerian law, in whose territorial waters the oil-rig was situated at the time of the accident, was ignored. This fact lends some support to the application of this distinction to torts within territorial waters."

At page 286, to which the footnote also gives a cross reference, the following was said about Sayers' case: "The accident took place on a Dutch rig in Nigerian territorial waters and it is arguable that in the case of matters purely internal to the rig Dutch, rather than Nigerian, law should be regarded as the lex loci ."

There is a reference to footnote 3, which indicated that MacKinnon's case was to the contrary. 85 In Cheshire and North on Private International Law (10th ed, 1979), page 283 repeated the relevant passage on page 286 of the 9th edition, and page 290 repeated the relevant passage on page 292, including note 9. The corresponding passages appear in the last three editions, prepared by North and Fawcett, namely the 11th edition, appearing in 1987 (pages 544 and 549), the 12th edition, appearing in 1992 (pages 558 and 563) and the 13th edition, appearing in 1999 (pages 661 and 669). 86 By the time of the 13th edition, the Private International Law (Miscellaneous Provisions) Act 1995, Part III, had been enacted. Section 11(1) provides: "The general rule is that the applicable law is the law of the country in which the events constituting the tort or delict in question occur."

Section 11(2)(a) provides: "Where elements of [the events constituting the tort or delict in question] occur in different countries, the applicable law under the general rule is to be taken as being - (a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury … ."

Section 12(1) provides: "If it appears, in all the circumstances, from a comparison of - (a) the significance of the factors which connect a tort or delict with the country whose law would be the applicable law under the general law; and (b) the significance of any factors connecting the tort or delict with another country, that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country, the general law is displaced and the applicable law for determining those issues or that issue (as the case may be) is the law of that other country." 87 The 13th edition, after repeating at page 661 the passage which appeared in the previous six editions supporting the commonsense of the argument which failed in MacKinnon's case, said at page 662: "With the introduction of Part III of the 1995 Act, the double actionability rule is abolished. The Law Commissions, after considering the matter in considerable detail, [Law Commission Working Paper No 87 (1984), paras 5.71-5.88] recommended that implementing legislation should not make special provision for torts and delicts committed in territorial waters. [Law Com No 193 (1990), para 3.26] Accordingly, recourse must be had to the general rule under section 11 and the displacement rule under section 12. When operating the general rule, the country in which the events constituting the tort or delict in question occurred could be regarded, as it was at common law, as referring to the littoral country rather than to the country of the ship's flag. The alternative approach is to apply the analogy of tortious acts occurring on board a single vessel on the high seas, according to which the law of the country in which the events constituting the tort or delict in question occurred should be regarded as being the law of the flag. This was the preferred view of the Law Commissions in their Working Paper. [Law Commission Working Paper No 87 (1984), para 5.77] The virtue of this approach is that it may be quite fortuitous that a tort is committed in the littoral country in question in that a ship may just be passing through or at anchor in a particular country's territorial waters when the tort is committed. However, this concern can be met by the use of the displacement rule under section 12. [See Dicey and Morris, Fourth Supplement, p 254] Moreover, there is the difficulty of what you do in the situation where the acts are external to the ship, for example where there is a collision between two ships in territorial waters. [Law Commission Working Paper 87 (1984), paras 5.79-5.81.] Should a different rule be adopted for this situation? There is no doubt that the law of the flag approach would introduce unnecessary complexity into the law. It is submitted, therefore, that the littoral country approach should be adopted when operating the general rule." 88 This passage rather dilutes the force of the "criticism" of MacKinnon's case on page 661 for rejecting an argument attractive on grounds of commonsense, and so far as the defendant's argument relies on the criticism, it receives little support.

Dicey 89 Turning to Dicey's Conflict of Laws (6th ed, 1949), which was the first to have been edited by J H C Morris, and which was relied on by Lord Migdale and Lord Carmont, while Rule 174, which was quoted by Lord Migdale, is in its terms neutral on the present issue, at page 807 the following passage appeared: "In order that an action in tort may be brought in England in respect of an act arising within the territorial waters of a foreign country, it is necessary that the requirements of this Rule should be satisfied. That is to say, the act must be actionable as a tort in England and not justifiable under the law of the country in whose territorial waters it occurs. A collision occurs within the territorial waters of a foreign country while the offending vessel is under the control of a compulsory pilot. By English domestic law the owners of the offending vessel would be liable to an action in tort if the collision had occurred in English waters; by the law of the foreign country, there is no liability whatever imposed upon the owners of a vessel for damage done by it through the act or omission of a compulsory pilot. No action in tort will lie in England."

The cases cited for that passage were The Arum [1921] P 12; The "Halley" (1868) LR 2 PC 193; and Carr v Fracis, Times & Co [1902] AC 176. The same footnote said: "The contrary view expressed in the Scottish case of Owners of SS Reresby v Owners of SS Cobetas [1923] Sc LT 719, is not, it is submitted, well founded." The Court of Session in substance applied the passage quoted and overruled the case referred to in the footnote. 90 In the 7th edition, published in 1958, there was a discussion of MacKinnon's case. It concluded (at pages 974-975): "The court rejected a distinction, sometimes made in American decisions, between 'some act done by those in charge of the vessel which affects the Government of the littoral State or its subjects, or indeed any person external to the vessel' and cases in which, as in the case before the court, 'everything takes place within the ship itself.' Moreover, two of the three members of the court expressed the view that the same principle would apply if the ship was not at anchor but merely passing through the territorial waters of a foreign country. That the decision involved an 'element of absurdity' was recognised by the court, nevertheless it considered that to accede to the pursuer's argument, would be 'breaking new ground.' The court, it is respectfully submitted, was not compelled to reject the law of the flag as the law governing the pursuer's rights against the defender, and much can be said in favour of the American practice referred to above. It is to be hoped that the case will not be followed in England." 91 The passage just quoted was repeated in the 8th edition (published in 1967) pages 956-957, the 9th edition (published in 1973) page 976 (with a reference to Sayers v International Drilling Co NV) and the 10th edition (published in 1980) page 977. That was the last edition for which Morris had sole responsibility. L Collins has assumed responsibility for all editions since then. The relevant passage was repeated in the 11th edition (published in 1987) page 1415, though it was noted that in Sayers' case Nigerian law was neither pleaded nor proved. The text was not relevantly changed in the 12th edition (published in 1993) pages 1450-1451. 92 In the 13th edition (published in 2000) para [35-073], page 1541, the following passage appeared: "At common law, it could be argued that special considerations applied where the tort was committed on board a ship or structure which was entirely unconnected with the littoral state, as eg where a tort is committed on board a ship passing through, or lying at anchor in, the territorial waters of a country other than that to which the ship belongs. [See 12th ed. of this work, pp 1540-1541.] In Scotland it was held that such cases were governed by common law choice of law rules and that the locus delicti was the littoral State rather than the flag State. [ MacKinnon v Iberia Shipping Co 1955 SC 20. Cf The Mary Moxham (1876) 1 PD 107, 112; Sayers v International Drilling Co [1971] 1 WLR 1176 (CA).] It had been argued that where 'everything takes place within the ship itself', [ MacKinnon v Iberia Shipping Co, supra , at p 29] as opposed to a situation where there is 'some act done by those in charge of the vessel which affects the Government of the littoral State or its subjects, or indeed any person external to the vessel', [ Ibid Cf Lauritzen v Larsen , 345 US 571, 584 et seq (1953).] the applicable law should be regarded as being the law of the flag rather than the law of the littoral State. [See n 27, supra .] This argument was based on the unreality of the application of the common law rules in these circumstances. [See MacKinnon v Iberia Shipping Co , supra, at pp 29, 36.] It is now submitted that these situations should be regarded as falling within the provisions of Part III of the 1995 Act. There is no English authority against the common law choice of law rules being applied to such situations. Sections 11 and 12 of the 1995 Act can produce appropriate solutions since section 12 enables the general ( lex loci delicti ) rule to be displaced where appropriate. It is therefore suggested that such situations should be construed as having been governed by common law choice of law rules abolished by section 10 of the 1995 Act and which will therefore attract the application of Part III of the 1995 Act. [1995 Act, s 14(2). And see Law Com No 193 (1990), para 3.26.] It is also submitted that the relevant country for the purpose of section 11(1) is the littoral state rather than the flag State, and if there is no significant link with the law of the littoral State, section 12 of the Act may be used to displace the general rule, normally in favour of the law of the flag State." 93 This passage has an effect on the "criticism" of MacKinnon's case which had been advanced in the previous six editions which is similar to that which the equivalent new material in Cheshire & North had on the corresponding "criticism". 94 The point is that once the gladsome light of law reform dawned, and legislation was enacted which did not deal directly with the problem under debate, it is significant that Dicey & Morris adopted the solution which it had previously tended to stigmatise, at least as a starting point, namely the law of the littoral State, and only displaced it in favour of the law of the flag State if there were no "significant link" with the law of the littoral State. 95 A further irony that flows from the treatment of this issue in the current editions both of Cheshire & North and Dicey & Morris is that the origins of the statutory regime which they find obscure is a Report of the Law Commission. Law Commission Working Paper No 87 was produced by a Joint Working Party of the English Law Commission and the Scottish Law Commission, of which the then, and one of the current, editors of Cheshire & North was a member, and of which the then, and current, editor of Dicey & Morris was also a member. So was Anton, whose treatise, as has been seen, did not criticise MacKinnon's case, which may suggest that the views expressed in the document did not have to be, and were not, unanimous. In paragraph 2.5 the document referred to those parts of the judgments in MacKinnon's case which are critical of the result the court in fact reached. In paragraph 2.112 the document said that selection of the law of the littoral State, "however unattractive", was more consistent with the rule in Phillips v Eyre than the law of the flag. In paragraph 5.76 that document said: "Where a ship is on, or an aircraft is over, the high seas, and the whole train of events is confined to that ship or aircraft, there would seem to be much sense and little difficulty in considering the state to which the ship or aircraft belongs as being, for choice of law purposes, the country where the events occurred. This approach may well be consistent with the present law as it applies to ships, although probably not as it applies to aircraft."

In paragraph 5.77 the document said: "In our view the same solution would be appropriate for the ship in territorial waters, whether ours or foreign; and the prima facie irrelevance of any system of law other than that of the flag is even clearer in the case of a tort or delict committed on board and confined to an aircraft, whether flying over the United Kingdom or a foreign country. [See, eg Dicey and Morris, pp 977-978; Kahn-Freund, pp 82-83.] 'It requires some boldness to contend that because an aircraft happens to be over Switzerland at a particular moment Swiss law should be applicable to events occurring in the aircraft at that time, and that Austrian or Italian law may similarly become relevant a few minutes later. [McNair, The Law of the Air 93rd ed, 1964), p 267.] This approach would produce results consistent with decisions in the United States, at least where the dispute involved only the internal running of a ship, [ Patton-Tully Transp Co v Turner 269 F 334 (1920); Lauritzen v Larsen 345 US 571, 97 L Ed 1254 (1953); Romero v International Terminal Operating Co 358 US 354, 3 L Ed 2d 368 (1959). See Kahn-Freund, p 81.] and enjoys academic support. [See, eg Dicey and Morris, p 977; Kahn-Freund, pp 81-82.] Further, this approach commended itself on practical grounds to the court in MacKinnon v Iberia Shipping Co Ltd [1955 SC 20.] (which in our view provides a clear example of circumstances in which its use would have been appropriate.) However, the court in that case was constrained to reject this approach [See above, para 2.45.] and to apply instead the double actionability rule in McElroy v McAllister [sic]."

The solution which the Joint Working Party preferred has evidently not been adopted, at least with clarity by Parliament. 96 What, then, do the "criticisms" offered by Cheshire & North and Dicey & Morris amount to? The document prepared by the Law Commission Working Party, together with the legislation that resulted and the discussion of it by the treatises, when taken with the terms of the observations appearing over several editions in each case, suggest that in truth the "criticisms" did little more than highlight aspects about MacKinnon's case which might be open to debate. The "criticisms" are put in the most general and largely unreasoned way. There are limits to what treatises of the size of Cheshire & North and Dicey & Morris can do. What the relevant editions of those treatises do not contain is a detailed demonstration of error in the reasoning propounded in MacKinnon's case, at least to the extent that that reasoning applies to the present circumstances. Nor has this ever been done in places in which analysis of that kind more realistically might be expected, namely articles in learned journals. 97 There is one other aspect of the "criticisms" made in Cheshire & North and Dicey & Morris to be discussed. The four Scots judges of the Court of Session were entitled to assume that the opinions on English law stated in Dicey, which had been inserted for the first time by its new editor, Morris (even then a leading master of the conflict of laws), and the equivalent opinions stated in two editions by Cheshire (probably at that time even more highly regarded than Morris), were the sincerely held opinions as to the content of English law of highly experienced, able and learned lawyers who had devoted their professional lifetimes to pondering the relevant problems. In the absence of clear authority, the Scots judges were entitled to give very great weight to the opinions of Morris and Cheshire, and they evidently did. It was perhaps galling for the Scots judges to reflect, if the criticisms of Morris ever came to their attention, that having arrived at their decision on the basis of what Morris said in Dicey, Morris took the earliest opportunity to tell them that the case in which they had acted on his opinions as to English law should never be followed in England. When Lord Carmont, for example, declined to give effect to arguments of the pursuer which, as he saw it, were attractive and avoided absurdity, because to do so would "be breaking new ground and running counter to everything to be found in the treatises of international law", which "treated as settled" the contrary proposition, he was not praised by the authors whose words he applied, but told at once by one of them that it was to be hoped that the case would not be followed in England and told in the third succeeding edition of the other's treatise that the contrary position was attractive on the ground of commonsense. 98 However, academic legal literature is, like Anglo-Saxon literature, largely a literature of lamentation and complaint. The laments and complaints can be heard even when academic wishes are acceded to. The fact remains that the reasons why Morris initially criticised MacKinnon's case were almost entirely drawn from the language of the Scots judges themselves. The same was true of the reasons given by Cheshire for his more belated criticisms. One inference from the reverse-Schliemann archaeological process just carried out in relation to Cheshire & North and Dicey & Morris is that in the forty-seven years since MacKinnon's case was decided very little in the way of criticism of the outcome has been assembled beyond what the Scots judges themselves said. In circumstances where the Scots judges preferred to apply what they had been authoritatively told by the two greatest living masters of the subject was English law, despite the criticisms they themselves had formulated, the later academic criticisms have rather less weight than they might otherwise have possessed.

Kahn-Freund 99 Among the academic criticisms relied on by the Law Commission Working Party, and by the defendant in these proceedings, was that of O Kahn-Freund in his lectures on "Delictual Liability and the Conflict of Laws" [1968] II Recueil des Cours 1 at 80-82: "It was said at the beginning of this chapter that the situations calling for the displacement of the lex loci delicti may have something to do with the special relation between the parties or alternatively with a special social environment, an environment in which they are insulated from the geographical environment. I am now turning to the second type of situation. (a) The ship in foreign territorial waters In 1954, in the case of MacKinnon v Iberia Shipping Co , the Inner House of the Court of Session dealt with a claim for reparation of a Scottish ship's engineer who had been injured in an accident on board a Scottish ship due to negligence of his Scottish fellow employee. He claimed in delict to recover from the common Scottish employer solatium , that is the peculiar Scottish form of compensation for dommage moral . But the court told him that to succeed he would have to prove that solatium was part of the law of the Dominican Republic in whose territorial waters the ship was lying at anchor when the accident happened. This, as one of the judges admitted, is absurd. Here again the absurd result is caused by applying the lex loci delicti beyond its raison d'être . On none of the justifications of the lex loci delicti , except the discarded obligatio theory, can any case be made for applying Dominican law in this situation - for many years many courts in the United States have applied the law of the flag to torts committed on board a ship lying in the territorial waters of a State other than that of the flag, provided the tort had nothing to do with the littoral State or its inhabitants. This problem of the tort on board a ship in foreign territorial waters is only one instance of the general question of torts occurring in an 'insulated environment' - but it is an important instance. Take the question of the scope of the American federal statute regulating the compensation of sailors for accidents suffered at work - the Jones Act. In Romero v International Terminal Operating Co the Supreme Court of the United States by a majority refused to apply the Jones Act to an accident on board a Spanish ship lying at anchor in American territorial waters. Everything in the case, except the locus delicti and the forum , was Spanish: the place where the contract of employment had been made, the nationality of the ship and of the parties, the place where the voyage had begun and the place where it was to end. Earlier American cases show situations which were less clear, but, except where the flag is a so-called 'flag of convenience', I suggest that the law of the flag should govern such issues. The problem of the flag of convenience is not one which can here be discussed: it raises issues of ' fraude à la loi '. Cases like those of MacKinnon and of Romero , like most employment cases, touch the problem of whether the issue could not be classified as contractual in the way suggested by decisions of the Chambres Réunies of the French Cour de Cassation of 1921 and of the English Court of Appeal of 1959. This is a matter which will be discussed in the last chapter. It is clear that as a matter of tort liability, this problem found a better solution in the United States Supreme Court than in the Court of Session." 100 The defendant referred to Boys v Chapman [1971] AC 356, in which the House of Lords declined to apply Maltese law to the assessment of damages for injury to a British serviceman in Malta, as an instance of judicial recognition of the relevance of an "insulated environment", and as an example of a British tort occurring in Malta, in a manner analogous to the defendant's characterisation of the tort allegedly suffered by the plaintiff as a New Zealand tort in New South Wales waters. The difficulty with the appeal to that case is that it exemplifies the application of a "proper law of the tort theory", rejected as inapplicable in trans national torts in Australia in Regie National des Usines Renault SA v Zhang (2002)187 ALR 1. So far as the reasoning of Kahn-Freund is concerned, the defendant did not suggest that the present problem could be solved by classifying the issue as contractual in the manner appearing at the end of the passage quoted. While the passage quoted does not abstain from such terms of abuse as "absurd", and while it advocates a recourse to the law of the flag, it is more notable for assertion than for reasoning. And even if the passage is thought to have persuasive force in some circumstances, no persuasive force is shown in relation to the present circumstances. There is a difference between MacKinnon's case, where the ship was lying at anchor at a roadstead for some unexplained purpose, and the present case, where a ship was adjacent to Australian soil and in the course of fulfilling the purpose of its voyage, unloading coal.

Nygh 101 Another academic criticism on which the defendant relies is put thus by Nygh, Conflict of Laws in Australia (6th ed, 1995) p 355: "It has been argued by the learned authors of Cheshire and North's Private International Law that torts committed entirely within a ship or oil drilling rig, and presumably an aeroplane, should be governed by the law of registration of that structure even though situated at the time within or above the territory of a different jurisdiction. That view has a great deal of merit in that it would avoid some of the more obvious absurdities inherent in a rigid application of the law of the place of wrong. The argument was expressly rejected by the Court of Session in the Scottish case of McKinnon v Iberian Shipping Co Ltd but derives some meagre support from the remark of Lord Denning MR in Sayers v International Drilling Co NV that Nigerian law had no relevance in respect of a tort committed on a Dutch owned oil rig situated within Nigerian territorial waters."

So far as these and other criticisms rely on Sayers' case, its support is not only meagre but non-existent. It may be noted that while the passage quoted is repeated in the 7th edition (published in 2002), the editors twice cite the primary judge's judgment in this case without criticism: [22.14] notes 104 and 110. Further, whatever the "more obvious absurdities inherent in a rigid application of the law of the place of wrong" may be, the passage does not direct itself to the precise issue that arises in the present case where the ship in question was adjacent to the land and was in the course of being unloaded.

O'Connell 102 The defendant relies on O'Connell, The International Law of the Sea, volume 2 (1980) pages 903-904. After discussing Lauritzen v Larsen 345 US 571 (1953), O'Connell said: "Although the case was concerned with a tort aboard a foreign ship in the port of a third country, the principle enunciated would apply a fortiori to ships in foreign territorial waters; and arguably to the complete exclusion of the territorial law as a relevant law when the ship was merely in transit there. This seems to follow from the suggestion that the governing law 'cannot change at every change of waters.' If this be so, the American rule is exactly the opposite of the Scottish rule, which is that the governing law does change at every change of waters. There is no doubt that the American rule is more sensible than the Scottish, but it is not without its flaw: it is not an automatic choice of law rule, for it is only after the court has evaluated the connection with the several possible legal systems that it finds in favour of the one it considers to be the most relevant. This introduces a fortuitous element into the judicial process, and while it may leave a court free to arrive at a sensible conclusion on the basis of the particular tort and the particular facts, it has the disadvantage of uncertainty."

This is a criticism of MacKinnon's case, but it offers no support for the defendant's proposal. Further, the criticism offered is not necessarily applicable to the application of the law of the littoral State in the circumstances of the present case.

New South Wales law applies 103 The defendant did say, with some realism, that issues of "degree" arise in relation to the problems of what law applies to torts on ships in the territorial sea, that solution of them depends on drawing lines that minimise arbitrariness, and that the defendant's test might not apply to vessels which had entered Australian rivers, for example. While "degree" may not be the best expression to describe the character of the problem, and line drawing may not be the best expression to describe its solution, it is not easy to suggest better ones. 104 It will be remembered that the criticisms of MacKinnon v The Iberia Shipping Co Ltd ran along the following lines. It is said to be absurd that the applicable law should suddenly change if a vessel moves into the territorial sea of a State with which it has no connection, particularly since it can be difficult to tell whether it has or has not crossed into the territorial sea; and even more absurd if it moves through the territorial sea of different States in succession. That outcome is said not to contribute to the comity of nations. It is said that a better accord with commonsense is achieved if torts having purely internal consequences are governed by the law of the flag, while torts having external consequences are governed by the law of the littoral State. It is said that to apply the law of the littoral State is to generate anomalies and arbitrary results destructive of the rule of law, to take away certainty, to disappoint reasonable expectations, to damage the legitimate interests of States and to create onerous and disruptive burdens. There are some circumstances in which some of these criticisms may perhaps have force. But the arguments advanced on behalf of the defendant do not face up to the fact that the present circumstances are very different from those to which the criticisms may have forceful application. 105 Cases that may arise when a vessel passes intentionally, or even unexpectedly, through territorial waters with which it has no other connection can be dealt with when they arise. It might or might not be the law, to be declared by this Court or the High Court, that the law of the flag applies where a ship is in territorial waters exercising, voluntarily or involuntarily, a right of innocent passage: but that need not be decided now. It is not necessary to decide whether the law of the flag would have applied if the plaintiff had not been injured while the unloading of coal was taking place, but just before that operation began, or just before the vessel was moored, or just before it reached the shore, or just before it entered the inner or the outer harbour at Port Kembla, or just after it entered the territorial sea. Issues of that kind can be dealt with when the factual context of a particular case makes it necessary to do so. 106 What must be decided in this case is what the outcome is in the particular circumstances of this case. The vessel on which the plaintiff was working had reached its destination. It was fulfilling the core purpose for which the voyage had been undertaken. It was unloading the imported coal onto New South Wales soil in a continuous process which could not be severed in any way, let alone at the moment when the coal passed the railing of the vessel. There was nothing accidental or adventitious or fortuitous about the presence of the vessel. It cannot be said that New South Wales, whose citizens were receiving the coal, had no concern with the presence of the vessel. It is difficult to see how anything in the nature of an onerous or disruptive burden would be created by applying New South Wales law. Assuming, though not deciding, that there is a valid distinction between "external torts" and "internal torts", the conduct in the course of which the alleged tort was committed had an external characteristic, and was not limited to the internal workings of the vessel. 107 If an inquiry into the reasonableness of expectations is relevant, the expectation that New South Wales law would apply to the alleged tort would not be unreasonable, whether the relevant expectations be those of the citizens who make up the polity of New South Wales, or of the plaintiff, or of the defendant; and the contrary expectation is not conspicuously reasonable. That is so for several reasons. One is the continuous nature of the unloading operation. Another is its function in delivering coal onto New South Wales soil. Another turns on the possibility that shore-based labour (and indeed other persons from the shore) might come on board ship to assist the crew or for other purposes: the defendant conceded in oral argument that a tort of which such a person was a victim was a shore-based tort and the law of the littoral State would apply. The consequence is that a tortious act of a shipowner which injured a ship-based worker on the ship and a shore-based worker beside him might be governed by one law in relation to the former and another in relation to the latter. The defendant argued that the anomaly was cured by the certainty produced by its tests, for trade unions could negotiate with shipowners and charterers for better protection if they wished. There is a considerable lack of realism in this sub-Posnerian analysis. Another reason is the possibility that vessel-based labour like the plaintiff might from time to time leave the vessel to further the operation. In relation to that possibility, the defendant in oral argument conceded that an outcome under which the law applying to a worker injured by the conveyor system on board was the law of the flag, while the law applying to a worker injured by the convey system on land was the law of the littoral State was "a little arbitrary", but said that those facts were not the facts of this case. They do, however, highlight a significant drawback to the defendant's contention, and they nullify a primary criticism made by the defendant of the plaintiff's solution, namely that it produces absurd, arbitrary and anomalous results contrary to commonsense: those charges fit the defendant's position better. For it would be absurd, arbitrary, anomalous and contrary to commonsense if the law governing an injury suffered by a worker while trying to rectify a fault in the cross conveyor which dropped coal into the shore hopper was the law of the flag if his endeavours took place on board the vessel, but was the law of the littoral State if his endeavours took place after he had disembarked to get a better view of the problem from the shore hopper. 108 Similar anomalies exist with the example selected by the defendant in oral argument of a defective bottle of ginger beer consumed in Australia, New Zealand, Nauru or Hawaii. The defendant conceded that if the ginger beer was brought on board at each port the tort would be "external". That radical differences should flow depending on whether the ginger beer had been loaded at the start of the voyage (which the defendant said created four internal torts governed by the law of the flag) or loaded afresh at each port of call (which the defendant said created four external torts governed by four different littoral laws) is not a result which encourages acceptance of the defendant's test as one which will be anomaly-free. 109 A further anomaly could arise in relation to the tort of breach of statutory duty. It is common for statutes to lay down standards to be complied with by employers on pain of criminal sanctions; and for rights of civil recovery of damages to exist on proof of breach. The defendant rightly concedes that the owner of a vessel in the territorial sea could be prosecuted for a breach of an applicable criminal statute of New South Wales, but its argument denies that precisely the same conduct could be cognisable by a civil action in tort based on the same breach. 110 The defendant relied on Lord Carmont's contention in MacKinnon v The Iberia Shipping Co Ltd 1955 SC 20 at 29 that a ship moored to a quay in a foreign harbour has little real connection with the law of the local State until something brought the ship or its master, crew or passengers into some relation with that State. That reliance fails on the facts of this case. Here something had brought the ship and its master and crew into some relationship with New South Wales. The master and crew were unloading coal from the ship onto the soil of New South Wales. The defendant submitted that the master and crew, in discharging employment relationships with the defendant, were "acting in a manner where the location of the act is in a sense quite arbitrary", and the action of the plaintiff was "an action which one might consider whether the law of New South Wales or the parliament of New South Wales if it adverted to it, had any real concern with". Whatever outcome that latter process might bring the inquirer to, it is wholly wrong to say that actions which are part of the process of unloading coal are actions the location of which is quite arbitrary. Coal is not routinely unloaded into the ocean - either the high seas or the territorial sea; it is routinely unloaded from ship to shore. That is a natural and real, not an arbitrary, relationship between the conduct during which the alleged tort was committed and the territory of New South Wales. 111 The defendant contended that its approach was supported by the argument of the pursuer in MacKinnon v The Iberia Shipping Co Ltd 1955 SC 20 at 29 that "even conceding the relevance of the law of the littoral State where there is some act done by those in charge of the vessel which affects the Government of the littoral State or its subjects, or indeed any person external to the vessel, yet, when everything takes place within the ship itself, there is no ground for invoking the law of the littoral State so as to displace the law of the flag". Lord Carmont said he found that attractive. However, that contention too fails on the facts. Again, there was some act done by those in charge of the defendant's vessel which affected the government and subjects of New South Wales - coal was being offloaded onto the soil of New South Wales in a continuous process which could not be severed naturally at the moment when the coal crossed the vessel's railing. 112 In my opinion the primary judge was correct in concluding that the applicable law under the New South Wales choice of law rules was the law of New South Wales.

Other arguments 113 The plaintiff argued that it was not necessary to consider the problem in this case as a problem in the conflict of laws. He argued that the Interpretation Act 1987, s 59 provided that the written and unwritten law of New South Wales is to apply to coastal waters of the State, and that the law of tort was part of that law. The plaintiff also argued that New South Wales law applied on the basis that the law of the littoral State applies to internal or inland waters (including bays and harbours). The defendant, in response, contended that each submission begged the question of whether the law of New South Wales included its conflicts rules. In view of the conclusion that the primary judge was correct for another reason, it is not necessary to consider these arguments.

Cook v Cook 114 It is not necessary to examine whether the construction which the defendant gave to the passage in Cook v Cook (1986) 162 CLR 376 at 390 quoted earlier was correct. The defendant wavered in this regard. It said that all that mattered was the merit or weakness of any particular argument, quite independently of which court had employed it. Yet it was noticeable that the defendant, in its enthusiasm for particular arguments favourable to its position, constantly reminded the Court of the glamorous courts associated with them, like the United States Supreme Court, or the glamorous judicial names associated with them, like those of Jackson J and Frankfurter J, or even the glamorous academic names associated with them, like Kahn-Freund, Morris, Cheshire and North. The defendant also tended not to distinguish between, first, slogans, phrases and unsupported propositions of a character seemingly helpful to the defendant's position; secondly, detailed arguments for a particular conclusion favourable to the defendant's position (of which there were very few); and, thirdly, detailed arguments for a particular conclusion which were necessary to the decision in a particular case which were favourable to the defendant's position (of which there were none). When dealing with cases apparently adverse to it, the defendant tended to read the scope of possible rationes decidendi in cases down remorselessly and distinguish the cases ruthlessly. When dealing with cases containing favourable statements, the defendant tended to gloss over the fact that those statements reflected common ground or a want of contrary argument. Arguably Cook v Cook must be understood as not glossing over the differences between passing dicta, considered dicta, and rationes decidendi; nor the difference between statements proceeding from highly experienced lawyers of good reputation in ultimate appellate courts and statements proceeding from other persons. 115 The defendant directed criticisms at the primary judge for not rejecting MacKinnon's case by adopting a Cook v Cook approach, and propounded a ground of appeal specifically directed to the point. The criticisms were misplaced. In view of the quality of the court which decided MacKinnon's case, the absence of contrary authority in the British Commonwealth, the fact that the United States cases are based on a process of statutory construction and a "proper law of the tort" theory which was not part of the intra-Australian conflict of laws, the general acceptance of MacKinnon's case, though subject to criticism, as stating the law, and his own position as a primary judge, the primary judge did not err in not proceeding in the fashion in which the defendant contended Cook v Cook required. In fact his behaviour was entirely correct and legitimate: it was a model of what a primary judge should have done in the circumstances.

Forum non conveniens 116 The only two grounds of appeal apparently directed to this part of the primary judge's reasoning and the consequential orders were: "3. The Trial Judge erred in holding that the reference to 'inappropriate forum' in Part 10 rule 6A(2)(b) of the Supreme Court Rules meant 'clearly inappropriate forum'. … 5. The Trial Judge erred in refusing to stay the proceedings." 117 In paragraph [50] the primary judge suggested that the reference in Pt 10 r 6A(2)(b) to "inappropriate forum" meant "clearly inappropriate forum". In written submissions prepared before the hearing of the appeal, the defendant said that suggestion was wrong. It maintained that position in oral argument. However, in Regie National des Usines Renault SA v Zhang (2002) 187 ALR 1 at [25] the majority said: "Because a court's power to stay proceedings is an aspect of its inherent or implied power to prevent its own processes being used to bring about injustice, the same concepts and considerations necessarily inform the test of 'inappropriate forum' in par (b) of Pt 10, r 6A(2) as inform the 'clearly inappropriate forum' test adopted in Voth . And because the ultimate consideration is the prevention of injustice, they inform it in the same way."

In written submissions filed after that decision was handed down on 14 March 2002, the defendant accepted that the majority "confirmed that the reference to 'inappropriate' should be read as a reference to 'clearly inappropriate' as that phrase had been described in Voth v Manildra Flour Mills [Pty Ltd] (1991) 171 CLR 538." Despite this, the defendant did not in terms withdraw either the earlier arguments or paragraph 3 of the Notice of Appeal. This was unsatisfactory. Even more unsatisfactory was the fact that the point was taken at all, because it was entirely academic: the primary judge said he was not satisfied that the Supreme Court of New South Wales was either clearly inappropriate or inappropriate. 118 The primary attack by the defendant on the primary judge's exercise of his discretion was that he allegedly erred in not selecting New Zealand law as the applicable law. For reasons given above, he did not in fact err in that respect. Though the defendant said in oral argument that it did not "surrender" on a contention that even apart from the choice of law question the forum was not convenient, it did not demur to a judicial suggestion that its position if the choice of law matter went against it was "pretty feeble". The defendant did not distinctly identify any other relevant error, and in my opinion there was none.

2. The appellant is to pay the respondent's costs of the appeal. 120 HODGSON JA: I agree with Heydon JA. 121 SANTOW JA: I agree in the conclusions reached by Heydon JA and in the reasons for them. I wish to add only these observations. 122 The majority judgment in the High Court in Regie National des Usines Renault SA v Zhang (2002) 76 ALJR 551 states (at [76]) by way of caveat that "[S]pecial considerations also apply to maritime torts and what Dicey calls 'aerial' torts".113

113 Collins (ed), Dicey and Morris on the Conflict of Laws (13th ed, 2000) Vol 2 at pp 1541-1543.

That caveat is to the majority's earlier acceptance (at [75]) of the submission of the Appellant "that the substantive law for the determination of rights and liabilities in respect of intra-Australian torts in 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'". 123 This proposition in the present case directs attention first to whether indeed this is a "foreign tort" at all when, though it takes place wholly on board a vessel flying a New Zealand flag, that vessel is moored in the littoral waters of a New South Wales port and whilst unloading coal in a continuous ship to shore operation. In Zhang (supra) there was no real question but that the tort was indeed foreign; in New Caledonia where the car accident occurred. This was so, though there was incidental connection with France (where the car was manufactured) and Australia (where the Respondent lived); Kirby J at [100]. 124 In the limited circumstances of the present case, Heydon JA has identified some of the anomalies that would result from applying the law of the flag instead of the law of the littoral territory. That in the present state of conflicting authority, would however be a slender basis for any safe prediction that the sum of such hard cases is likely to be greater by applying the former as a universal rule rather than the latter. Indeed for maritime torts, no universal rule may yet be safely essayed. Nor does Hodgson JA essay one. This is especially given the paucity of authority and the degrees of transience in a ship's contact with the shore or its territorial waters, and the wide variety of purposes for such contact. These factors may tend against a simple universal rule, though that may be at the cost of commercial certainty. Given that complexity, it is certainly by no means self-evident, as the Appellant would have it, that the greater hardship must follow from failure to adopt its version of a universal rule of automatic deference to the law of the flag for torts on board ship, even when in territorial waters. In any event, as the High Court observed in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 539 [82], "[B]ut for every hard case that can be postulated if one universal rule is adopted, another equally hard case can be postulated if the opposite universal rule is adopted". 125 There is thus virtue in avoiding premature postulation of any universal rule in the present maritime context. This is so, despite the attractions of certainty. This is more especially when the reasonable expectations of the parties or the State do not point clearly in one direction for the variety of situations that would be encompassed. Then there is the natural inhibition upon an intermediate appellate court in circumstances not calling for such a declaration. Moreover, there is no need, because the present circumstances do clearly point to a paramount territorial connection. When the tort occurred, the ship was voluntarily in Australian territorial waters littoral to Port Kembla in New South Wales, and actually moored. The ship and indeed the Respondent were actually unloading coal for transport to shore, in course of which the tort occurred. The operation was a continuous one linking the ship to shore via the conveyor belt effecting the unloading. All this led the trial judge to hold that the injury was received in New South Wales as the locus delicti, being also the forum. 126 Thus without resorting to any now rejected notions of the proper law of the tort or of flexible exception (Pfeiffer [78] to [80], Zhang [73]), it is in accordance with those facts, and the more persuasive authority, to reach these conclusions:

(a) here New South Wales is not a clearly inappropriate forum, nor indeed an inappropriate forum, for the exercise of the jurisdiction over the dispute which this Court undoubtedly has;

(b) the question is the proper law to be applied, itself a matter of Australian choice of law rules ( Zhang [67]);

(c) the tort may be taken not to be a "foreign" tort, that is, foreign in being located on a New Zealand flag ship;

(d) even if it were so located and treated as foreign, contrary to the trial judge's determination, Zhang itself places a caveat against its universal application to maritime torts;

(e) there is no compelling or persuasive basis, whether in public policy or authority, judicial or academic, to apply the law of the flag in present circumstances of substantial connection with the littoral territory, involving a maritime tort on a ship moored in port, engaged in a continuous unloading operation connecting it to that territory;

(f) for the reasons comprehensively analysed by Heydon JA, engaging in the process of analysing the comparative persuasiveness of the reasoning of competing authorities outside those of binding force for this Court ( Cook v Cook (1986) 162 CLR 376 at 390), leads to the application of the territorial law of New South Wales to a maritime tort so substantially connected to New South Wales rather than the law of the flag;

(g) this is a result substantially in accordance with the reasoning and result in MacKinnon v The Iberia Shipping Co Ltd [1955] SC 20, the English authority most precisely in point, where Lord Carmont (at 29-30) concludes that such authorities as there were "point conclusively to the locus delicti being the country having the territorial waters within which the ship was at the relevant time, and that it matters not … whether the vessel was navigating or at anchor … whether the events founded on as the basis of the delict or quasi delict are wholly internal to the vessel or partly external to it …"

(h) though that reasoning included certain reservations upon which subsequent academic comment seized (as Heydon JA demonstrates apparently for the first time and without recanting earlier apostacy), those reservations are not sufficiently convincing when applied to a maritime tort so substantially connected to New South Wales. 127 It will be a matter for future cases and quite possibly the High Court to resolve the ultimate scope of application of the lex loci delicti to maritime torts. The present case points clearly enough to the law of the littoral territory, which here coincides with the law of the forum. This leaves for the future, torts occurring in contexts of more transient connection between ship and shore, and the territorial waters between, or between plane and territory overflown.

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