#5005 - Renault V. Zang - Conflict of Laws BCL

Renault v. Zang

Facts

The appellants ("the Renault companies") are foreign companies whose principal place of business is in France. Neither Renault company is registered in Australia as a foreign company and they do not maintain any office or employ any persons in this country. The first appellant sells to Volvo Australia Pty Ltd ("Volvo") in France motor vehicles which Volvo then sells to various dealerships throughout Australia.

The respondent ("Mr Zhang") entered Australia in 1986 and undertook postgraduate university studies…. On 5 February 1991, whilst in New Caledonia, Mr Zhang hired a Renault 19 sedan. On the next day, 6 February 1991, Mr Zhang suffered serious injuries when he lost control of the car whilst driving along an unsurfaced roadway; the car somersaulted several times, came to rest on its roof, which was crushed into the passenger compartment.

Mr Zhang sought recourse to the Supreme Court of New South Wales to recover damages from the Renault companies for his injuries. In response, there was an application by the Renault companies to stay Mr Zhang's action on the footing that the Supreme Court is an inappropriate forum for the trial of the action.

Because neither of the Renault companies had a presence in Australia, Mr Zhang invoked the "long arm" jurisdiction of the Supreme Court as detailed in Pt 10 of the Supreme Court Rules 1970 (NSW) ("the Rules").

Statutory Head of Jurisdiction: Rule 1A of Pt 10 of the Rules provided that, subject to rr 2 and 2A, originating process might be served outside Australia in 24 enumerated cases. In particular, par (e) of r 1A(1) provided for the service of originating process:

“Where the proceedings, wholly or partly, are founded on, or are for the recovery of damages in respect of, damage suffered in the State caused by a tortious act or omission wherever occurring.”

It is common ground that the respondent has suffered damage in New South Wales and will continue to do so, within the meaning of par (e) of r 1A(1).

Provisions in the Supreme Court Rules:

Part 10, r 6A provides:

(1) The Court may make an order of a kind referred to in Part 11 rule 8 (which relates to setting aside etc originating process) on application by a person on whom an originating process is served outside Australia.

(2) Without limiting subrule (1), the Court may make an order under this rule on the ground -

(a) that the service of the originating process is not authorised by these rules; or

(b) that this Court is an inappropriate forum for the trial of the proceedings. (emphasis added)

Part 11 of the Rules is headed "APPEARANCE". Rule 8 of Pt 11, so far as presently relevant, states:

(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;

(b) set aside the service of the originating process on the defendant;

(c) declare that the originating process has not been duly served on the defendant;

(d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State;

...

(g) declare that the Court has no jurisdiction over the defendant in respect of the subject matter of the proceedings;

(h) decline in its discretion to exercise its jurisdiction in the proceedings;

Holding

Voth and Oceanic Sun were decided before the Rules

The significance of this chain of events is that both Oceanic Sun and Voth were decided before the making in the Rules of the present express provisions whereby the Supreme Court may decline in its discretion to exercise its jurisdiction on the ground that that Court is "an inappropriate forum for the trial of the proceedings".

Difference in the wording of the Supreme Court Rules

The expression "inappropriate forum" in par (b) of Pt 10, r 6A(2) is less emphatic than the expression "clearly inappropriate forum", the latter being the term adopted in Voth to determine whether an Australian court should decline to exercise its jurisdiction. The formulation in Voth, as Spigelman CJ pointed out in James Hardie Industries Pty Ltd v Grigor, was adopted in preference to the "clearly more appropriate forum" test favoured in the United Kingdom. Thus, it should at once be noted that a court is not an inappropriate forum merely because another is more appropriate.

Applicable Law

However, in the present appeal, the stage has been reached...