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A2 Milk Company and the Australian court’s ability to apply the FTA/FMCA

A2 Milk Company Ltd (A2), a company incorporated in New Zealand, is currently facing class actions in Australia (Victoria) and New Zealand. The Supreme Court of Victoria has just released an interesting judgment dealing with a number conflict of laws issues relating to the Victorian proceeding: Thomas v A2 Milk Company Ltd No 2 [2022] VSC 725. In short, the Court decided that it had jurisdiction to determine claims made by some of the plaintiffs in that proceeding under New Zealand legislation, seeking declaratory relief and monetary compensation. The claims allege misleading or deceptive conduct and breaches of continuous disclosure obligations under the Fair Trading Act 1986 and the Financial Markets Conduct Act 2013, in relation to the purchase of shares in A2 on the NZSX.

The Court determined the following preliminary matters:

  • That the Court had personal and subject-matter jurisdiction to determine the claims arising under the FTA and the FMCA, subject-matter jurisdiction being an unlikely source of material constraint on jurisdiction (at [28]).
  • That, assuming the New Zealand statutes applied, the claims were enforceable in the Supreme Court of Victoria. It was clear that a foreign lex causae to be applied could include statute law (at [36]). The claims also did not fall within the exclusionary rule in relation to statutes advancing a foreign ‘governmental interest’, because they were advanced to vindicate the private interests of group members (at [42]). Finally, the FTA and FMCA did not confer exclusive jurisdiction on New Zealand courts (at [43]-[84]).
  • That, assuming the New Zealand statutes applied, the Court could grant the relief sought. The New Zealand relief provisions formed part of the substantive law of New Zealand (at [119], [148]) and the Supreme Court of Victoria had the power to grant the relief (at [164]).

The reason for determining these matters on a preliminary basis was to allow the plaintiffs to make an informed decision whether to opt out of the Victorian proceeding and, instead, opt in to the New Zealand proceeding.

For New Zealand readers, the judgment is of interest in particular because of the Court’s conclusion that the FTA and FMCA should not be construed as conferring exclusive jurisdiction on New Zealand courts. Based on Rimini Ltd v Manning Management and Marketing Pty Ltd [2003] 3 NZLR 22 (HC), it was open for foreign courts to apply a New Zealand statute unless Parliament had expressly or by clear implication said otherwise. Where a statute set out for domestic purposes which courts in New Zealand had jurisdiction to apply it, this did not mean that a foreign court was excluded from applying it (at [60]). Neither the FMCA nor the FTA expressly, or by clear implication, precluded foreign courts enforcing the relevant provisions (at [73], [77]).

The judgment also offers a useful reminder that foreign courts may, in fact, apply New Zealand legislation, even where such legislation gives rise to statutory causes of action. This has not always been appreciated. In YPG IP Ltd v Yellow Book.Com.Au Pty Ltd (2008) 8 NZBLC 102,063 (HC) at [22], for example, the Court suggested in a rather sweeping statement that “[n]o Australian Court has jurisdiction in respect of claims for relief pursuant to a New Zealand statute”: see Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 2.342.

This point is especially relevant to New Zealand courts determining whether they are the only – or the appropriate – forum to determine a claim under New Zealand legislation: see The Conflict of Laws in New Zealand at 2.227 (see also at 6.90). In Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at [141], for example,  the Court of Appeal suggested that New Zealand is obviously the appropriate forum to determine a claim brought under the FTA. However, in some cases this may not be true, because the foreign court may give effect to the FTA even though it is a New Zealand statute (and there might be other factors making the foreign court the appropriate forum, such as the existence of related proceedings).

The judgment will no doubt be useful to the New Zealand court when determining an application for a stay of the New Zealand proceeding against A2 (see [14]). A potential limitation in this regard is that the judgment does not address the question of choice of law. The Court proceeded on the assumption that New Zealand law would be applicable to the New Zealand claims.  This is unfortunate, because the question of choice of law may affect the question of subject-matter jurisdiction (broadly understood): see The Conflict of Laws in New Zealand at 2.342. In the context of statutory causes of action, common law courts often determine the application of the law of the forum on a unilateral basis, raising questions as to any residual role left for foreign law. It may be the case that the particular issue is exclusively governed by the law of the forum, with the result that any claim falling outside of the scope of the law of the forum also falls outside of the court’s subject-matter jurisdiction. In the context of fair trading and consumer protection, the better view may be that the law of the forum should not be understood to apply exclusively (see The Conflict of Laws in New Zealand at 6.90, Maria Hook “Does New Zealand consumer legislation apply to a claim against a foreign manufacturer?” [2022] NZLJ 201 at 203). However, it would have been helpful for the judgment to address this question head-on.









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