Harding (Appellant) v. Wealands (Respondent)
27. Lord Wilberforce said, at p 389:
28. Lord Pearson said, at p 394:
29. On the other hand, Lord Guest said, at p 382 that
30. Thus the majority held that the Maltese law denying liability for non-economic damage was substantive law to be governed by the lex causae while the minority thought that it was a matter of remedy to be governed by the lex fori. All of them agreed that the quantification of the damages to be awarded for actionable heads of damage was a question of remedy or procedure.
31. The next question is whether this distinction between questions of liability and questions of remedy or procedure was affected by Part III. Section 10 abolishes the Phillips v Eyre (1870) LR 6 QB 1 requirement of double actionability "for the purpose of determining whether a tort or delict is actionable" and the common law exceptions to that rule created by cases like Boys v Chaplin  AC 356 and Red Sea Insurance Co Ltd v Bouygues SA  1 AC 190. Section 11 substitutes a "general rule" that the applicable law is the "law of the country in which the events constituting the tort or delict in question occur." Section 12 provides for displacement of the general rule in certain cases in which it is "substantially more appropriate" for the applicable law to be different. This was the provision applied by Elias J on his alternative hypothesis that the MACA restrictions were substantive. But section 14 provides:
32. It will be noticed that whereas the older cases spoke of questions of "remedy" being governed by the lex fori and Willes J in Phillips v Eyre (1870) LR 6 QB 1, 29 spoke of "remedy or procedure", section 14(3)(b) refers only to "procedure". Does that mean that the old rule that remedies were a matter for the lex fori was to be abolished and the rule preserved only so far as it related to questions which could strictly speaking be regarded as procedure? In my opinion this would be absurd. In this context, the terms "remedy" and "procedure" had been regularly used interchangeably. Thus in Boys v Chaplin  AC 356 Lord Hodson said, at p 378, that "the nature of a plaintiff's remedy is a matter of procedure to be determined by the lex fori. This includes the quantification of damages ". Lord Guest, at p 381, posed the question as: "Assuming that the conduct was actionable in Malta, what law is to be applied to the ascertainment of the damages? Is it to be the substantive law, the law of Malta, or is to be the procedural law which is the lex fori?"
33. Furthermore, section 14(3) is expressed to be without prejudice to the generality of section 14(2), which says that nothing in Part III is to affect any rules of law except those abolished by section 10. Section 10 is concerned with the rules which determine "whether a tort is actionable" and not with the rules concerning the remedies available for actionable injury.
34. The conclusion that the amount of damages for an injury actionable by the lex causae must be determined according to the lex fori was to be left untouched is confirmed by the Report of the Law Commission and the Scottish Law Commission (Private International Law: Choice of Law in Tort and Delict (Law Com No 193, Scot Law Com No 129), published in 1990, on which Part III was based. Paragraph 3.38 dealt with damages:
35. There are several statements in the Consultation Paper to the same effect, which it is unnecessary to cite.
36. Mr Haddon-Cave QC, who appeared for the appellant, said that if the House thought that the language of section 14(2) and (3) was ambiguous or obscure, it should resolve the ambiguity by reference to a statement made in Parliament by the Lord Chancellor during the passage of the bill. For my part, I do not think that there is any ambiguity or obscurity. Of course, taken out of context, the word "procedure" is ambiguous. In its narrow and perhaps most usual sense it means, as La Forest J expressed it in Tolofson v Jensen (1994) 120 DLR (4th) 289, 321 those rules which "make the machinery of the forum court run smoothly as distinguished from those determinative of the rights of both parties." Or it can have a wider meaning which embraces what Mason CJ in Stevens v Head (1993) 176 CLR 433, 445 called "the traditional equation drawn between matters relating to a remedy and matters of procedure". This is the sense it which the term has always been used in English private international law. If section 14 is read in its context, against the background of the existing rules of common law and the report of the Law Commission, there can be no doubt that the latter meaning was intended. For my part, therefore, I see no need for Mr Haddon-Cave to resort to Hansard.
37. If, however, there had been any ambiguity which needed to be resolved, I am bound to say that this is as clear a case within the principle stated in Pepper v Hart  AC 593 as anyone could hope to find. At the Report stage in the House of Lords, Lord Howie of Troon put down an amendment to add a further paragraph to what is now section 14(3), so that it would read "[nothing in this Part] (d) authorises any court of the forum to award damages other than in accordance with the law of the forum". Lord Howie declared an interest on behalf of Cape Industries plc, which had a few years earlier been sued in Texas for asbestos-related injuries (see Adams v Cape Industries plc  Ch 433) and was anxious that Part III should not import American scales of compensation into English courts. In the debate on 27 March 1995 the Lord Chancellor, Lord Mackay of Clashfern, made what was obviously a carefully prepared statement:
38. Lord Howie declared himself reassured and did not move his amendment. The Lord Chancellor's statement clearly satisfied the requirements of being (a) clear and (b) made by the Minister promoting the bill: see Hansard (HL Debates) 27 March 1995, Cols 1421-1422.
39. My Lords, the next question is whether the provisions of MACA to which I have referred should be characterised as relating to the actionability of the economic and non-economic damage suffered by Mr Harding or to the remedies which the courts of New South Wales provide for such damage. On this point we could not have better authority than that of the High Court of Australia in Stevens v Head (1993) 176 CLR 433. The majority (Brennan, Dawson, Toohey and McHugh JJ) analysed the equivalent damages-limitation provisions of the Motor Accidents Act 1988, at pp 454-460, and concluded that they were concerned with quantification rather than heads of damage. Although MACA is more restrictive of the court's power to award damages than the 1988 Act, the character of the relevant provisions is in my opinion the same. Thus, at p 459, the majority said of section 79(3) of the 1988 Act, which provided that the maximum amount ("only in a most extreme case") which might be awarded for non-economic loss was A$180,000:
40. These extracts are from the opinion of the majority. But there is nothing in the dissenting judgments by Mason CJ and Deane and Gaudron JJ to suggest that, if they had accepted that the court should apply the traditional distinction between actionability and remedy, including quantification of damages, they would have disagreed with the way the majority characterised the provisions of the 1988 Act. It was the traditional distinction itself which the minority rejected. Thus Mason CJ, at p 445, proposed that the court should adopt:
41. Deane J likewise said, at p 462, that the lex fori should be applied "only to the extent that it was procedural in the narrow sense of being directed to regulating court proceedings in that State" and Gaudron J adopted the same test: see pp 469-70.
42. In principle, therefore, I think that the relevant provisions of MACA should be characterised as procedural and therefore inapplicable by an English court. But Mr Palmer QC, who appeared for the defendant, submitted that in English private international law a limit or "cap" on the damages recoverable is regarded as substantive. There is, it is true, some authority for this proposition. The 7th edition (1958) of Dicey's Conflict of Laws, edited by Dr JHC Morris, contained the statement, at p 1092, "statutory provisions limiting a defendant's liability are prima facie substantive; but the true construction of the statute may negative this view" with a footnote: "This is suggested by two dicta in Cope v Doherty (1858) 4 K & J 367, 384-385 and (1858) 2 De G & J 614, 626."
43. Cope v Doherty concerned an application by the owners of an American ship which had collided with and sunk another American ship to limit its liability pursuant to section 504 of the Merchant Shipping Act 1854. Wood V-C held that the section did not apply to collisions between foreigners. The owners argued that the limitation rule was procedural and should therefore be applied as part of the lex fori. I should have thought that the short answer was that whether the rule was substantive or procedural, Parliament had said that it should not apply to foreigners and that was the end of the matter. But the Vice-Chancellor dealt with the argument on its own terms, 4 K & J 367, 384-385:
44. Thus his reasoning was that the statute operates as if it imposed a contractual term limiting the damages recoverable. In fact, one of the reasons why the Vice-Chancellor held that the statute did not apply to foreigners was that he thought that, as a matter of international law, the United Kingdom could only impose such a deemed contract upon British ships. Such a term in a contract would clearly be a modification of the substantive obligations of the parties. As Lord Diplock said in Photo Production Ltd v Securicor Transport Ltd  AC 827, 849:
45. When Cope v Doherty went to the Court of Appeal, Turner LJ dealt with the point very briefly ((1858) 2 De G & J 614, 626):
46. In my opinion the proposition in Dicey was too widely stated. Cope v Doherty is authority for the proposition that a contractual term which limits the obligation to pay damages for a breach of contract or a tort, or a statutory provision which is deemed to operate as such a term, qualifies the substantive obligation. It is not part of the rules of the lex fori for the assessment of damages. I therefore agree with the opinion of Street CJ in Allan J Panozza & Co Pty Ltd v Allied Interstate (Qld) Pty Ltd  2 NSWLR 192, 196-197 that a statutory limitation on damages deemed to be incorporated into a contract of carriage is "an express limitation upon the substantive liabilities." But, as the majority said in Stevens v Head (1993) 176 CLR 433, 458:
47. The Merchant Shipping (Amendment) Act 1862 extended the right to limit liability to all ships of whatever nation and thereafter it became impossible to regard such a provision as equivalent to a contractual term imposed upon British subjects. In my opinion, therefore, Clarke J was right in Caltex Singapore Pte Ltd v BP Shipping Ltd  1 Lloyd's Rep 286 to treat a modern limitation statute (in that case, of Singapore) as a procedural provision, limiting the remedy rather than the substantive right: see also Seismic Shipping Inc v Total E&P UK plc (The Western Regent)  EWCA Civ 985;  2 Lloyd's Rep 359, 370.
48. There is accordingly in my opinion no English authority to cast any doubt upon the conclusion of the Australian High Court in Stevens v Head (1993) 176 CLR 433 that, for the purposes of the traditional distinction between substance and procedure which treats remedy as a matter of procedure, all the provisions of MACA, including limitations on quantum, should be characterised as procedural. This was also the view of the Court of Appeal in Roerig v Valiant Trawlers Ltd  EWCA Civ 21;  EWCA Civ 21;  1 WLR 2304. In John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, however, the High Court reversed itself, abandoned the traditional rule (at least for torts committed in Australia) and confined the role of the leges fori of the Australian States to procedure in the narrow sense of rules "governing or regulating the mode or conduct of court proceedings": see pp. 543-544. This change was said to be required by constitutional imperatives of Australian federalism. In a later decision (Regie National des Usines Renault SA v Zhang (2002) 210 CLR 491, 520, para 76 the court left open the question of whether it would apply to foreign torts. But the decision in the Pfeiffer case 203 CLR 503 clearly influenced the judgments of the majority in the Court of Appeal in this case, to which I must now turn.
49. Arden LJ said, at p 1559, para 52 that "the meaning of substance and procedure for the purposes of section 14 of the 1995 Act must be sought in the context of the 1995 Act". That, if I may respectfully say so, seems to me plainly right. But then, instead of putting the 1995 Act into the context of the previous common law and the proposals of the Law Commission, she approached the matter in a more abstract way, saying that a reference to the law of the forum must be "justified by some imperative which, relative to the imperative of applying the proper law, has priority". Such a reason, she suggested, might be the inability of the English court to "put itself into the shoes of the foreign court" and adopt some procedure which was not available in this country. But otherwise, she thought that the principle adopted in the Pfeiffer case should be applied and restrictions on the right to recover damages in the foreign law should not be regarded as procedural.
50. Arden LJ may have been influenced in her approach to the construction of section 14(3)(b) by her view, expressed earlier in her judgment, at p 1559, para 51, that what she called "the damages principle", ie the rule that the assessment of damages is governed by the lex fori, was "one of uncertain meaning and application". So she felt that she was entitled to start on the basis that section 14(3)(b) was, so to speak, written on a clean sheet of paper. Of course there were peripheral uncertainties and differences of opinion. We have seen that in Boys v Chaplin  AC 356 Lords Guest and Donovan were willing to give the concept of procedure wider application than the majority, although, if I may say so with respect, the majority were in my opinion plainly right. There was also some uncertainty, largely generated by Dicey's interpretation of Cope v Doherty 4 K&J 367; 2 De G & J 614, about whether a statutory limitation on damages could be construed as substantive. I could add other possible uncertainties which have not yet come before the courts. For example, there may be rules of foreign or domestic law, under which a tort or other wrongful act gives rise to a liability to pay a conventional sum of money, which make it impossible to separate the concept of actionable damage from the concept of a remedy for that damage. It might be more realistic to say that the rule simply lays down the conditions under which the claimant is entitled to payment of a prescribed sum of money. But I do not propose to explore this or other hypothetical cases because they do not arise in this case and, so far as I know, have not arisen in the past.
51. There can however be no doubt about the general rule, stated by Lord Mackay in the House of Lords debate, that "issues relating to the quantum or measure of damages" are governed by the lex fori. And this was the rule which Parliament intended to preserve. Even if there appeared to be more logic in the principle in Pfeiffer's case (and the 13th edition (2000) of Dicey and Morris, p 172, supports Arden LJ on this point) the question is not what the law should be but what Parliament thought it was in 1995. As Lord Lloyd of Berwick said of a provision in the Limitation Act 1980 in Lowsley v Forbes  1 AC 329, 342:
52. Sir William Aldous likewise said  1 WLR 1539 1566, para 86 that the term "procedure" in section 14(3)(b) "should be given its natural meaning". He placed considerable reliance upon John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, despite the express statements in that case that it was, for Australian reasons, departing from traditional principles of English law. Such a construction was, he said, supported by Dicey and Morris, which is true, and by the Law Commission's Report, which in my opinion is not true. The only passage in the Commission's Report which may be said to support the conclusion reached by Sir William Aldous (although not his reasoning) is paragraph 3.39, which reproduces Dicey's comment that "a statutory ceiling on damages" is a question of substance. But the Law Commission appears to have thought this proposition could be reconciled with its statement in the previous paragraph (3.38) which I have already quoted. In my opinion, that paragraph is consistent neither with the narrow construction of "procedure" adopted by Sir William Aldous nor with a characterisation of limits on damages as not being procedural in the broader sense.
53. In my opinion, therefore, Elias J was right to treat the MACA restrictions as entirely inapplicable. In the circumstances it is unnecessary to decide whether, if they had been properly characterised as substantive, it was open to the Court of Appeal to reverse his judgment that it was substantially more appropriate to apply English law. The hypothesis necessary to raise this question is in my view somewhat artificial, because most of the reasons why it may be more appropriate to apply English law are the reasons why the assessment of damages is traditionally characterised as a matter for the lex fori. I would therefore prefer not to express a view on this question. In my opinion the appeal should be allowed and the judgment of Elias J restored.
LORD RODGER OF EARLSFERRY
54. In January 2002 the claimant and the defendant were living together in London. The defendant, who is Australian, travelled to New South Wales to attend a family wedding. A fortnight later the claimant flew out to join her. On 3 February near Huskisson, New South Wales, the claimant was a passenger in a car driven by the defendant when it was involved in an accident. As a result of the accident the claimant was rendered tetraplegic. He subsequently commenced the present action for damages for his injuries against the defendant who was living in England at the time. She admits liability. The claimant contends that the English court should assess the damages according to English law, while the defendant contends that the assessment of damages is regulated by the law of New South Wales which limits the amounts which can be recovered.