House of Lords
|Session 2005 - 06|
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Harding (Appellant) v. Wealands (Respondent)
LORD BINGHAM OF CORNHILL
1. I am in full agreement with the opinions of my noble and learned friends Lord Hoffmann and Lord Rodger of Earlsferry, which I have had the advantage of reading in draft. For the reasons which they give, I also would allow the appeal and restore the order of Elias J.
2. I am able to confine my opinion to a single issue because I agree with the opinions of Lord Hoffmann and Lord Rodger of Earlsferry which I have read in draft.
3. I have also had the advantage of reading the opinion of Lord Carswell in draft. While Lord Carswell agrees with Lord Hoffmann's and Lord Rodger's "reasons" and "conclusions", he does so subject to "one slight qualification" (paragraph 79).
4. Lord Carswell makes his qualification because of his understanding of what is the natural meaning of the word "procedure" (paragraph 83). As to this, Lord Carswell is in agreement with the judgments of Arden LJ and Sir William Aldous in the Court of Appeal. Arden LJ accepted that "damages are not naturally regarded as procedure" (paragraph 58) and Sir William suggests that the natural meaning of "procedure" is "the mode or rules used to govern and regulate the conduct of the court's proceedings" (paragraph 86). Lord Carswell adds, however, that in the field of private international law the word "procedure" has a "special meaning" which is wider than that which might be regarded as "natural".
5. Lord Carswell, having adopted this approach to the natural meaning of procedure, treats the "special meaning" as justifying reliance on Pepper v Hart  AC 593 to resolve the significant issue of construction at the heart of this appeal.
6. I am in agreement with Lord Carswell that, if it is necessary to rely on Pepper v Hart to decide the meaning of "procedure" in section 14(3) (b) of the Private International Law (Miscellaneous Provisions) Act 1995, the evidence of what was said in Parliament by the then Lord Chancellor conclusively resolves this issue in the Appellant's favour. Lord Carswell rightly points out that this is an outstanding example of a case where the evidence as to what was said during the passage of the legislation through the Parliamentary process makes it abundantly clear that it was the intention of Parliament by enacting section 14(3)(b) that the law of this country and not that of New South Wales is to be applied by the courts of this jurisdiction to the calculation of the Appellant's damages. This is despite the fact that the Appellant's accident occurred and his injuries were caused as the result of negligence of the Respondent in New South Wales.
7. However, I unfortunately differ from Lord Carswell as to his reasoning for relying on Pepper v Hart. The word "procedure" is frequently used in contrast to "substance" in order to distinguish between questions of procedural law and substantive law. Thus, unsurprisingly it is used together with the word "practice" in this context in section 1 and Schedule 1 of the Civil Procedure Act 1997 to identify the scope of the Civil Procedure Rules. The scope of the language is wide enough to encompass the contents of a civil procedure code which deals with evidence and remedies.
8. In determining the meaning of the word "procedure" the context in which the word is being used is of the greatest significance. In section 14(3) (b) "procedure" is used in conjunction with "rules of evidence, pleading or practice". In that context it is natural to regard the assessment of damages as being a matter of procedure rather than substance.
9. The fact that the present context is one in the field of conflicts of law does not mean that "procedure" is being used in a special sense rather than in the sense in which you would expect it to be used having regard to the context in which it appears. It makes good practical sense to draw a distinction between the treatment of questions of procedure and questions of substance; the former to be dealt, as you would expect in accordance with the procedure normally applied by the court in which the proceedings are brought.
10. This does not however mean that a cap on the amount of damages is obviously a question of procedure rather than a question of substance and if I had been left in doubt as to the correct answer I would certainly have been prepared to apply Pepper v Hart.
11. The limits on the amount of damages on which the Respondent seeks to rely are contained in the Motor Accidents Compensation Act 1999 of New South Wales. That Act contains in Chapters 3, 4, 5 and 6 a detailed statutory procedural code containing the machinery for recovering compensation for motor accident injuries, including the way damages are to be assessed. The code is clearly one that has provisions which it would be very difficult, if not impossible, to apply in proceedings brought in this country, even though they may be capable of being applied in other parts of Australia. To have different parts of that code dealt with by different systems of law would not be an attractive result and in some cases this would produce an impractical result. (See for example s.132 which requires, in the case of a dispute over non economic loss, for the degree of impairment to be assessed by a medical assessor in New South Wales.) The greater part of the code is clearly procedural and those parts which could be arguably regarded as substantive should be treated as being procedural as well.
12. For these reasons, as well as those given by Lord Hoffmann and Lord Rodger, I would allow this appeal and restore the judgment of Elias J.
13. The issue is whether damages for personal injury caused by negligent driving in New South Wales should be calculated according to the applicable law selected in accordance with Part III of the Private International Law (Miscellaneous Provisions) Act 1995 (hereafter "Part III") or whether it is a question of procedure which falls to be determined in accordance with English law. The Court of Appeal, by a majority (Arden LJ and Sir William Aldous, Waller LJ dissenting) held that it should be determined in accordance with the applicable law, which they decided was the law of New South Wales. In my opinion the dissenting opinion of Waller LJ was correct and the question is one of procedure governed by the law of the forum. I also agree with the speech to be delivered by my noble and learned friend Lord Rodger of Earlsferry, which I have had the advantage of reading in draft.
14. The accident happened on 3 February 2002 on a dirt track near Huskisson in New South Wales, when the respondent Ms Wealand lost control of the vehicle she was driving and it turned over. Negligence is admitted. The appellant Mr Harding, who was a passenger, was severely injured and is now tetraplegic. Mr Harding is English and Ms Wealand Australian. They had formed a relationship when Mr Harding visited Australia in March 2001 and in consequence Ms Wealand had come to England in June 2001 to live with Mr Harding. At the time of the accident they had gone together to Australia for a holiday and a visit to Ms Wealand's parents. The vehicle belonged to Ms Wealand and she was insured with an Australian insurance company. After the accident, Mr Harding and Ms Wealand returned to England.
15. The action was tried by Elias J, who applied English law to the assessment of damages for two reasons. First, because the assessment of damages was a matter of procedure governed by the lex fori and secondly, because even if it was a matter of substantive law, it was in this case "substantially more appropriate" to apply English law: see section 12 of Part III. The Court of Appeal, as I have said, allowed the appeal on the first point by a majority and allowed it unanimously on the second. I shall first address the question of substance and procedure.
16. Personal injury caused by negligence is an actionable wrong in Australian common law. In New South Wales, common law liability for transport accidents was briefly abolished by the Transport Accidents Compensation Act 1987 (NSW) and a statutory scheme of compensation substituted but the Motor Accidents Act 1988 (NSW) repealed the 1987 Act and section 6 reinstated the common law:
17. The 1988 Act did however contain detailed provisions concerning awards of damages for injuries suffered in motor accidents. These have been replaced by Chapter 5 of the Motor Accidents Compensation Act 1999 (hereafter "MACA"), which was in force at the time of the accident. Section 123 provides that "a court cannot award damages to a person in respect of a motor accident contrary to this Chapter." The provisions of Chapter 5 which would have been relevant to an award of damages by a court in New South Wales are:
(a) The maximum recoverable for non-economic loss (pain and suffering, loss of amenities of life, loss of expectation of life, disfigurement) is A$309,000 subject to indexation (section 134);
(b) In assessing loss of earnings, an excess of net weekly earnings over A$2500 must be disregarded (section 125);
(c) There is no award for the loss of the first 5 days of earning capacity (section 124);
(d) No award may be made for gratuitous care which does not exceed 6 hours a week and is for less than 6 months and the amount recoverable for care exceeding these minima is limited to sums specified in section 128;
(e) The discount rate for calculating the present value of future economic loss is prescribed as 5% (section 127);
(f) Credit must be given for payments made to the claimant by "an insurer" (section 130);
(g) No interest is payable on damages for gratuitous care or non-economic loss and entitlement to interest on other damages is subject to conditions, principally relating to the timely provision of information by the claimant (section 137).
18. None of these provisions forms part of English law. Perhaps the most striking difference is the 5% discount rate, compared with the 2.5% rate set by the Lord Chancellor under the Damages (Personal Injury) Order 2001 (SI 2001/No 2001) pursuant to his power under section 1 of the Damages Act as the rate appropriate to ensure that the claimant is fully compensated. The claimant says that under the provisions of MACA he would recover about 30% less than he would under English law.
19. Until Part III was enacted, the English common law rule for determining whether damage caused by acts committed abroad was actionable in tort was that laid down by the Court of Exchequer Chamber in Phillips v Eyre (1870) LR 6 QB 1, 28-29:
20. I observe in passing that, since the common law of Australia is on this point the same as the law of England, there is no doubt that the damage suffered by Mr Harding would have satisfied this double actionability test. But Willes J, giving the judgment of the court, went on to say:
21. What distinction was Willes J seeking to draw by saying that the foreign law would not affect an action in this country if it touched "only the remedy or procedure"? He referred to Huber v Steiner (1835) 2 Bing NC 203, which concerned an action brought in 1835 on a French promissory note made in 1813 and payable in 1817. The defendant pleaded that by French law an action upon the note was prescribed but Tindal CJ held that, upon its true construction, the French law did not extinguish the debt but only barred the creditor from obtaining a remedy. It was therefore a matter of French procedure which an English court would disregard. Conversely, Don v Lippmann (1837) 5 Cl & F 1 was an action brought in Scotland in 1829 on two French bills of exchange accepted in 1810. The House of Lords held the defendant entitled to rely on the Scottish 6 year period of prescription because, as Lord Brougham said, at p 13:
22. Lord Brougham in turn referred to De la Vega v Vianna (1830) 1 Barn & Ad 284 in which the plaintiff, a Spaniard, had the defendant, a Portuguese, arrested in England for non-payment of a debt contracted in Portugal. The defendant claimed to be released on the ground that in Portugal imprisonment for debt had been abolished in 1774. Lord Tenterden CJ, at p 288, was unmoved:
23. An even earlier case touching upon the same distinction between the cause of action and the remedy is Robinson v Bland (1760) 2 Burr 1077, an action upon a bill of exchange given in Paris in payment of gaming debts. By English law the debt was unenforceable but the plaintiff alleged that in France the debt could be enforced in a Court of Honour. Wilmot J said, at p 1084:
24. In applying this distinction to actions in tort, the courts have distinguished between the kind of damage which constitutes an actionable injury and the assessment of compensation (ie damages) for the injury which has been held to be actionable. The identification of actionable damage is an integral part of the rules which determine liability. As I have previously had occasion to say, it makes no sense simply to say that someone is liable in tort. He must be liable for something and the rules which determine what he is liable for are inseparable from the rules which determine the conduct which gives rise to liability. Thus the rules which exclude damage from the scope of liability on the grounds that it does not fall within the ambit of the liability rule or does not have the prescribed causal connection with the wrongful act, or which require that the damage should have been reasonably foreseeable, are all rules which determine whether there is liability for the damage in question. On the other hand, whether the claimant is awarded money damages (and if so, how much) or, for example, restitution in kind, is a question of remedy.
25. This was the distinction made by the House of Lords in Boys v Chaplin  AC 356, in which the plaintiff had been injured in a traffic accident in Malta. By the law of Malta, non-economic damage (pain and suffering, loss of amenity) was not actionable. Only financial loss was compensatable. The plaintiff brought proceedings in England and one of the questions raised by the appeal was whether the rule excluding liability for non-economic damage was part of the substantive law of Malta or concerned only the remedies which a Maltese court could provide.
26. Lord Hodson, Lord Wilberforce and Lord Pearson agreed that the rule was part of the substantive law of tort liability. In Malta, causing non-economic damage was not an injuria; not an actionable wrong. Lord Hodson said, at p 379: