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Where the parties have failed to plead foreign law, can the Court determine foreign law for itself?

By Jack Wass (Stout Street Chambers)

A judge in domestic litigation is deemed to know New Zealand law. While judges will be guided by the submissions of counsel, they determine the content of New Zealand law for themselves. Foreign law is different: a New Zealand judge cannot be assumed to know anything about the content of foreign law, or even when it should displace the New Zealand rules that would otherwise be applied. It follows that foreign law must be pleaded and it must be proved. The deployment of foreign law is an intrinsically tactical and party-driven process characteristic of New Zealand’s adversarial civil procedure.

The approach of New Zealand private international law may be summarised in five propositions:

(a) Foreign law is a question of fact that must be established to the satisfaction of the judge; the court generally cannot take judicial notice of foreign law.

(b) The content of foreign law must be established by evidence. This may be the evidence of expert witnesses, or (where permitted by s 144 of the Evidence Act 2006) documentary evidence, or by a combination of them.

(c) The judge must assess and weigh those sources, including the underlying authorities on which the experts rely, the objective being to determine how the dispute would be decided if it were heard in the courts of that country.

(d) Ordinarily, the court will only consider foreign law where the parties have chosen to plead it and thus put it in issue; it follows that the party who seeks to rely on foreign law bears the burden of establishing it.

(e) Where the parties have chosen not to plead foreign law, or have failed to prove its content, then the court will ordinarily apply New Zealand law.

In these posts, I will highlight the difficult issues at the margins of the last two propositions. What are the limits of the “ordinary” rules?

The challenge that judges face where the parties have failed to plead or prove foreign law – proposition (d) – is illustrated by a pair of cases decided by Associate Judge Bell.

Air Tahiti Nui SAEML v Pounamu International Ltd [2001] NZCCLR 16 (HC) concerned a consultancy agreement governed by the law of French Polynesia. The Judge noted that because the parties had failed to plead or prove French Polynesian law, he was required to apply New Zealand law. Although this could create an injustice where the parties’ rights and obligations were different under French Polynesian law, this was the risk that the parties took.

The Judge had been faced with the same situation in Industrial Group Ltd v Bakker HC Auckland CIV-2009-404-6432, 12 April 2010, where the parties submitted copies of the South Australian legislation but nothing more. By contrast, the Judge found in that case that it would be ‘not be safe’ to apply New Zealand law in default, because of the risk of an injustice arising from differences with New Zealand law. Having apparently undertaken his own research into South Australian law, he concluded that under both laws there was an arguable dispute justifying the statutory demands being partially set aside. Although the judgment was set aside on other grounds, the Court of Appeal praised the Judge’s analysis of the (South Australian) legal issues: [2011] NZCA 142, (2011) 20 PRNZ 413 at [8].

What approach was correct?

In Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 NZLR 289 (PC), the Privy Council noted that ss 39 and 40 of the Evidence Act 1908 (replaced by s 144 of the Evidence Act 2006) allowed the court to assess the content of foreign law by referring to sources itself, without the benefit of expert evidence. Shortly after, the Court of Appeal held that a judge could inform him or herself from sources ‘whether they have been put before it by counsel or consulted by the members of the court on their own initiative and [in an appeal] whether or not the court below has had the opportunity of considering them’ (Skye Court Pty Ltd v Mason CA6/03, 18 June 2003 at [10]).

Whatever the position may have been under ss 39 and 40 (which were expressed in different terms), we doubt that the court’s powers now go that far. While s 144 dispenses with the need to prove foreign law through the medium of an expert, evidence of foreign law must still be produced by the parties. Section 144 empowers the parties to ‘offer’ certain material, and says nothing about the court’s power to research the law on its initiative. It is unlikely, therefore, that courts are permitted to decide a case on the basis of authorities identified in the course of their own research, not cited or relied upon by the parties. Quite apart from the formal position under s 144, that would give rise to natural justice considerations.

At the same time, the idea prevailing in England that a judge will be tainted by even contemplating sources outside the four corners of the expert’s brief is unrealistic, and where the judge considers that further sources may be available, he or she would be free to seek the parties’ submissions on them, who can thus put them in evidence. And where the parties have relied, for example, on a judgment or a textbook, the court is and must be free to conduct their own assessment of the evidence in context.

With sympathy for the position that judges are placed in when faced with a case that clearly raises issues of foreign law that have not been adequately pleaded or proved, the court cannot remedy that defect as they could with a question of New Zealand law. Notwithstanding the clear and accurate way that Associate Judge Bell appears to have analysed South Australian law, the conservative approach he adopted in Air Tahiti Nui was correct.

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