Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41 (18 August 1988)

HIGH COURT OF AUSTRALIA

BREAVINGTON v. GODLEMAN AND OTHERS [1988] HCA 40; (1988) 169 CLR 41

F.C. 88/035

Private International Law - Federal Jurisdiction

High Court of Australia

Mason C.J.(1), Wilson(2), Brennan(3), Deane(4), Dawson(5), Toohey(6) and

Gaudron(2) JJ.

CATCHWORDS

Private International Law - Tort - Negligence - Act committed in Territory - Personal injury - Territory statute imposing limit on amount of damages - Action in State court - No limit on amount of damages under State law - Choice of law - Whether law of place of tortious act or of forum - The Constitution (63 and 64 Vict. c. 12), ss. 118, 122 - Motor Accidents (Compensation) Act 1979 (N.T.), ss. 4,5 - State and Territorial Laws and Records Recognition Act 1901 (Cth), s. 18.

Federal Jurisdiction - Conflict of laws - Full faith and credit - Whether State court required to give full faith and credit to Territory statute - Whether law of Territory a law of the Commonwealth - Inconsistency - The Constitution (63 and 64 Vict. c. 12), ss. 109, 118 - State and Territorial Laws and Recognition Act 1901 (Cth), s. 18.

Federal Jurisdiction - Action in State court against Commonwealth - Submission to jurisdiction - Whether federal jurisdiction - Whether State choice of law rules apply - The Constitution (63 and 64 Vict. c. 12), ss. 75(iii), 78 - Judiciary Act 1903 (Cth), ss. 39(2), 56, 64, 79.

HEARING

1987, August 6; December 1, 2; 1988, August 18. 18:8:1988

APPEAL from the Supreme Court of Victoria.

DECISION

MASON C.J.: This appeal raises an important conflict of laws problem. The appellant sued the respondents in the Supreme Court of Victoria for damages for personal injury arising out of a collision between the vehicle in which he was riding and one driven by the first respondent. The collision took place in the Northern Territory. By his statement of claim the appellant alleges that the collision was caused by the negligence of one or more of the respondents. The issue presented by the pleadings is whether the Supreme Court should determine the appellant's claim for damages by reference to (a) the common law principles governing the assessment of damages ordinarily applied in Victoria or (b) the statutory provisions in force in the Northern Territory governing the recovery of damages in actions in the Territory.

2. The issue arises in this way. By their defences the respondents alleged that the appellant was a resident of the Northern Territory within the meaning of s.4 of the Motor Accidents (Compensation) Act 1979 (N.T.) ("the Act"). Section 5 of that Act provided:



"(1) Subject to sub-section (2), no action for

damages shall lie in the Territory in respect of

the death of or injury to a resident of the

Territory in or as a result of an accident that

occurred in the Territory.

sub-section (1) deprives a person of the right to

bring an action for damages for pain and suffering

or loss of amenities of life.

(3) A person who has received or has elected to

receive a benefit under section 17 shall not

commence or continue an action referred to in

sub-section (2)."

The respondents went on to allege that s.5 barred the appellant's action except to the extent that the appellant claimed pain and suffering and loss of amenities of life. The appellant, by his reply, contended that s.5 had no application to the action. The points of law arising on the pleadings were set down for argument. O'Bryan J. ordered that pars.4 and 5 of the first respondent's defence and pars.8 and 9 of the second and third respondents' defence, which raised ss.4 and 5 of the Act, be struck out on the ground that the lex fori applied. The Full Court (Young C.J., King and Beach JJ.) allowed the respondents' appeal on the footing that the lex loci delicti, namely the law of the Northern Territory, applied. The Full Court set aside the order made by O'Bryan J. and declared that the paragraphs in question constituted a good defence to so much of the appellant's claim as they sought to answer. The appellant's case in this Court is that the orders made by O'Bryan J. should be restored on the ground that the law of Victoria as the law of the forum is the applicable law.

3. One of the respondents is the Australian Telecommunications Commission. It is common ground that the Commission is "the Commonwealth" within the meaning of s.56 of the Judiciary Act 1903 (Cth). This section enables a person making a claim against the Commonwealth, whether in contract or in tort, which arose in a State or Territory, to bring a suit in the High Court or the Supreme Court or other court of competent jurisdiction of that State or Territory. It is not the function of s.56 to invest jurisdiction in the High Court or the courts of the States in actions against the Commonwealth. That is the function of s.75(iii) of the Constitution and s.39(2) of the Judiciary Act: Baume v. The Commonwealth [1906] HCA 92; (1906) 4 CLR 97, at p 102; The Commonwealth v. Evans Deakin Industries Ltd [1986] HCA 51; (1986) 161 CLR 254, at p 264. The presence of s.56 in Pt IX dealing with "Suits By and Against the Commonwealth and the States" rather than in Pt VI dealing with "Exclusive and Invested Jurisdiction" indicates that the section has a different purpose, as does the language of the provision. What it does is to confer a right to proceed against the Commonwealth in the circumstances mentioned. Whether s.56 is the source of the Commonwealth's liability in tort, either alone or in conjunction with s.64 of the Judiciary Act and perhaps s.75(iii) and s.78 of the Constitution is a question that I put to one side.

4. Although, for these reasons, s.56 does not limit or curtail the investment of jurisdiction achieved by s.39(2), the effect of s.56 is to qualify or restrict what may be done in the exercise of that jurisdiction by providing that the right to proceed against the Commonwealth in respect of a claim in contract or tort arising in a Territory is exercisable only in the circumstances mentioned in the section. The Judiciary Act confers no such right in any other circumstances. On this footing s.56 enabled the Commission to defeat the action on the ground that the appellant had no right to proceed against the Commonwealth in the Supreme Court of Victoria: see The Commonwealth v. Rhind [1966] HCA 83; (1966) 119 CLR 584, at pp 599, 606-607. Whether the absence of such a right to proceed should be raised by way of objection to the jurisdiction or by way of defence is not a question that needs to be decided. The Commission has not taken such an objection, nor pleaded such a defence. Accordingly, the Supreme Court of Victoria had jurisdiction to entertain and determine the claim for relief against the Commission. That jurisdiction was necessarily federal jurisdiction by reason of s.75(iii) of the Constitution and s.39(1) and (2) of the Judiciary Act.

5. The respondents' contention that the lex loci delicti is the governing law rests on two suggested bases: (1) the principles of private international law and (2) ss.106, 107 and 118 of the Constitution and s.18 of the State and Territorial Laws and Records Recognition Act 1901 (Cth) ("the Recognition Act"). It is convenient to examine these arguments in the order in which I have stated them.

6. By way of introduction I should make some preliminary comments about the conflicts problem as it has been seen within the Australian federation. Historically Australian courts have approached choice of law questions within the federation on the footing that they are to be resolved by the common law principles of private international law. In 1911 O'Connor J. described the principle on which the courts of one State take cognizance of a wrong committed in another State as being "well recognized": Varawa v. Howard Smith Co. Ltd [1911] HCA 46; (1911) 13 CLR 35, at p 69. In this respect we have travelled the same path as the United States in resolving inter-State conflict problems by recourse to the rules of private international law, rather than by reference to any wide-ranging substantive operation to be attributed to the full faith and credit provisions of s.118 of the Constitution and s.18 of the Recognition Act. As Williams J. observed in Chaff and Hay Acquisition Committee v. J. A. Hemphill and Sons Pty Ltd [1947] HCA 20; (1947) 74 CLR 375, at p 396, "(f)or the purposes of private international law, South Australia is a foreign country in the courts of New South Wales." Just one year later an American judge was to say, "Michigan's sovereignty is as foreign to Delaware as Russia's": City of Detroit v. Proctor (1948) 61 A 2d 412, at p 416.

7. True it is that Napier J. in In re E. and B. Chemicals and Wool Treatment Proprietary Limited (1939) SASR 441, at pp 443-445 and In re E. & B. Chemicals and Wool Treatment Proprietary Limited ("No. 2") (1940) SASR 267 was prepared to ascribe a substantive operation to s.118, as was Richards J. in No. 2, at p.280, in treating that section as a direction that the court of a State should apply the law of another State whenever that was the proper law of the transaction. However, in this Court s.118 has achieved a limited substantive operation only. Thus in Merwin Pastoral Co. Pty Ltd v. Moolpa Pastoral Co. Pty Ltd [1933] HCA 31; (1933) 48 CLR 565 Rich and Dixon JJ. (at pp 573, 577) and Evatt J. (at pp 587-588) considered that s.118 precluded an argument that the Court should not give effect to a defence arising under New South Wales law, which was the proper law of the contract, on the ground that the New South Wales law contravened Victorian public policy, Victoria being the forum.

8. In treating the conflicts problem within the federation in this way Australian courts have followed the course which has been adopted by the courts in Canada as well as the United States. As the Constitution of Canada lacked any counterpart to s.118, which is itself a reflection of s.1 of Art.IV of the United States Constitution, the Canadian experience in applying the rules of private international law is not as instructive as it might otherwise be.

9. According to prevailing opinion, the common law rules of private international law provide a less than ideal means of resolving conflicts problems within Australia: see Anderson v. Eric Anderson Radio & T.V. Pty Ltd [1965] HCA 61; (1965) 114 CLR 20, at p 46. So much may be conceded without further discussion. But it is necessary to establish how those rules presently stand in the light of those decisions of this Court before considering whether they should be altered in any relevant respect.

10. Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629 held that an action in tort will lie in one State for a wrong committed elsewhere in Australia if (i) the wrong is of such a character that it would have been actionable if it had been committed in the State in which the action is brought and (ii) it was not justifiable by the law of the place where it was done. In so holding the Court accepted as applicable to a conflicts of law problem within Australia the two conditions stated by Willes J. in Phillips v. Eyre (1870) LR 6 QB 1, at pp 28-29, as the conditions on which an English court would entertain the action in respect of a tort committed in another jurisdiction. In Koop v. Bebb Dixon, Williams, Fullagar and Kitto JJ. (at p 642) described the first condition as "free from ambiguity". But, as Windeyer J. noted in Anderson (at p.41), that a plaintiff has a good cause of action in the sense that it is "actionable" does not mean that there is no defence to it. The word "actionable" should be understood as "triable" or "justiciable".

11. In Koop v. Bebb their Honours (at pp 642-644) recognized that the use of the words "not justifiable" in the statement of the second condition by Willes J. was controversial and confusing. In Machado v. Fontes (1897) 2 QB 231 Lopes and Rigby L.JJ. had considered that the act complained of must not be "innocent" in the country where it was done and that if the act was contrary in any respect to the law of that country, though giving rise to no civil liability there, it was not "justifiable" for the purposes of the second condition. But Cussen J. in Varawa v. Howard Smith Co. Ltd (No. 2) [1910] VicLawRp 84; (1910) VLR 509 did not accept this interpretation of the second condition. He was not alone in this opinion: Naftalin v. London, Midland and Scottish Railway Co. [1933] ScotCS CSIH_1; (1933) SC 259, at pp 274, 275; see also M'Elroy v. M'Allister [1948] ScotCS CSIH_4; (1949) SC 110. The Judicial Committee in Canadian Pacific Railway Company v. Parent (1917) AC 195, at p 205, questioned whether the language used in Machado v. Fontes was sufficiently precise. After reviewing these developments and the deficiencies of the exposition in Machado v. Fontes, including its inconsistency with earlier and later decisions, Dixon, Williams, Fullagar and Kitto JJ. (at pp 642-643) suggested that the second condition is accurately expressed by saying that the act must be such as to give rise to civil liability of the law of the place where it was done. The effect of this interpretation of the second condition is to pay more attention to the lex loci delicti. More recently, the House of Lords in Chaplin v. Boys (1971) AC 356 overruled Machado v. Fontes. In Chaplin v. Boys Lord Hodson and Lord Wilberforce (at pp 377, 389) took substantially the same view of Machado v. Fontes as that taken by this Court in Koop v. Bebb.

12. In Koop v. Bebb Dixon, Williams, Fullagar and Kitto JJ. observed (at pp 643-644) that courts applying the English rules of private international law did not accept the view of Holmes J. in Slater v. Mexican National Railroad Co. [1904] USSC 100; (1904) 194 US 120, at p 126 and New York Central Railroad v. Chisholm [1925] USSC 109; (1925) 268 US 29, at p 32, that the act complained of gives rise to an obligation where it takes place which follows the person and may be enforced wherever the person may be found. According to that view, sometimes known as "the vested rights" or "obligation" theory, the only source of this obligation is the law of the place of the act and it determines the existence of the obligation and the extent of it. In rejecting the vested rights theory, their Honours went on to say (at p.644):

"English law as the lex fori enforces an obligation

of its own creation in respect of an act done in

another country which would be a tort if done in

England, but refrains from doing so unless the act

has a particular character according to the lex

loci actus."

On the other hand, McTiernan J. (at p.649) thought that the lex loci delicti was the applicable law. In reaching this conclusion his Honour referred to New York Central Railroad and quoted the comment of Willes J. in Phillips v. Eyre, at p 28:

"A right of action, whether it arise from contract

governed by the law of the place or wrong, is

equally the creature of the law of the place and

subordinate thereto ... in like manner the civil

liability arising out of a wrong derives its birth

from the law of the place, and its character is

determined by that law."

In the context in which it appeared this statement by Willes J. was directed to the first of the two conditions and did not amount to a statement that the lex loci delicti was the governing law.

13. Subsequently in Anderson this Court, in conformity with what had been decided in Koop v. Bebb, unanimously applied the lex fori in determining whether contributory negligence on the part of a plaintiff required a verdict to be entered for a defendant. There the Court applied the law of New South Wales as the lex fori in an action in the District Court of that State for damages in respect of a negligent act committed in the Australian Capital Territory, the plaintiff being adjudged guilty of contributory negligence. According to New South Wales law, contributory negligence on the part of a plaintiff necessitated a verdict for a defendant, whereas the law of the Territory provided for an apportionment of liability. The Court upheld the entry of a verdict for the defendant. Koop v. Bebb and Anderson therefore stand as authorities for the proposition that the lex fori is the applicable law.

14. So the question arises whether this Court should now reconsider that principle. Generally speaking, this Court should be reluctant to depart from a principle accepted in two of its previous decisions, one of them unanimous. But here the question is one of fundamental importance and this Court's previous consideration of it was necessarily somewhat restricted. It is apparent from the joint judgment in Koop v. Bebb and from that of Windeyer J. in Anderson that the Court was applying, subject to some qualification, the rules of private international law as they had been formulated by English courts at a time when the judgments of this Court were subject to an appeal by special leave to the Judicial Committee. The two judgments also recognized that there were elements of uncertainty in the rules as they had been expressed, which would require elucidation in the future. Since then Chaplin v. Boys has cast a long shadow over the previously accepted English view that the lex fori governs substantive questions arising in respect of torts committed outside the jurisdiction, once the two preliminary conditions are satisfied. Although Koop v. Bebb lessened the opportunities for forum shopping by requiring that the act complained of must give rise to civil liability according to the law of the place of the tort, a plaintiff, like the appellant in this case, may find that the law of another State or Territory offers a more generous assessment of damages. Accordingly, continuing acceptance of the lex fori as the governing law still offers opportunities to forum shoppers. All these factors justify our taking a fresh look at the question.

15. Justice Cardozo, who acknowledged the force of precedent and the need for certainty in the law, nevertheless asserted "when a rule, after it has been duly tested by experience, has been found to be inconsistent with the sense of justice or with the social welfare, there should be less hesitation in frank avowal and full abandonment. ... There should be greater readiness to abandon an untenable position when the rule to be discarded may not reasonably be supposed to have determined the conduct of the litigants ...": Cardozo, The Nature of the Judicial Process (1921), at pp.150-151. As we have seen, the principle established by Koop v. Bebb gives too much scope to the law of the forum and leads to forum shopping.

16. It is convenient to begin with Chaplin v. Boys. It is an unsatisfactory decision, if only because, by reason of division of opinion, it does not authoritatively state the law upon the point. A road collision took place in Malta involving the plaintiff and the defendant, both being British subjects temporarily resident in Malta as members of the British Armed Forces. There was a cause of action under Maltese and English law. However, under the law of Malta only expenses and money loss could be recovered, whereas English law permitted the recovery of general damages for pain and suffering and loss of amenities of life. Lord Guest thought (at p.381) that the question whether particular heads of damage were recoverable was procedural so that he did not need to examine Machado v. Fontes or the problem now under consideration. However, his Lordship referred to the law of Malta as the substantive law (at p.381), thereby indicating a view that issues of substance are to be governed by the lex loci delicti. Lord Hodson and Lord Wilberforce considered that, once the Phillips v. Eyre conditions are satisfied, civil liability for a foreign tort should be governed by the lex loci delicti subject to an exception so that the rights of the parties with respect to an issue in tort is to be determined by the law of the place with which the parties had the most significant connection (at pp.378, 389-392). On the other hand, Lord Donovan and Lord Pearson favoured the application of the lex fori (at pp.383, 406), Lord Pearson stating that in appropriate cases it would be desirable to apply the law of the natural forum in order to discourage forum shopping (at p.406). Although Lord Donovan and Lord Pearson accepted the principle stated in Machado v. Fontes, they considered that the decision was or might be objectionable on the ground that it was a blatant example of forum shopping (at pp 383, 406). In the result Chaplin v. Boys identified either the lex loci delicti, or the lex loci delicti subject to the exception already mentioned, as the governing law.

17. The flaw in the "vested rights" theory as a basis for the lex loci delicti was exposed by Learned Hand J. in Guinness v. Miller (1923) 291 F 769 where he said (at p 770):

"no court can enforce any law but that of its own

sovereign, and, when a suitor comes to a

jurisdiction foreign to the place of the tort, he

can only invoke an obligation recognized by that

sovereign. A foreign sovereign under civilized law

imposes an obligation of its own as nearly

homologous as possible to that arising in the place

where the tort occurs."

In the United States the "vested rights" theory also came under powerful criticism because it led to unjust results in particular cases by insisting on the rigid application of the law of the place of the injury even though that law had a tenuous and insubstantial connection with the parties and the occurrences. Lord Wilberforce recognized the force of this criticism in Chaplin v. Boys. He noted the character of the majority of foreign torts which usually involve personal injury or death sustained by travellers away from their place of residence in which the place of the occurrence of the wrong is often fortuitous. His Lordship concluded (at p.388) that "(t)o fix the liability of two or more persons according to a locality with which they may have no more connection than a temporary, accidental and perhaps unintended presence, may lead to an unjust result."

18. The demolition of the "vested rights" theory did not exclude reference to the law of the place of the act as an important element in the principle to be applied by the court of the forum in dealing with a foreign tort. After all the law of the place of the wrong is a material factor and, in many cases, the critical factor, in the resolution of the rights of the parties. In most cases the application of that law satisfies the reasonable expectations of the parties. In the United States where the courts, having rejected the view that the law of the place of the tort should invariably govern the availability of relief for the tort, regard the law of the place of the tort as the basic or prima facie law to be applied, the governing law is the local law of the state which has the most significant relationship with the parties: see Babcock v. Jackson (1963) 240 NYS 2d 743; 191 NE 2d 279; also reported in (1963) 2 Ll. Rep. 286.

19. In Babcock v. Jackson the plaintiff was a passenger in a car owned and driven by the defendant, both parties being resident in New York. An accident took place in Ontario, Canada, during a weekend trip. The law of Ontario excluded liability on the part of a driver to a passenger, but the law of New York (the lex fori) did not. The court declined to apply the lex loci delicti on the ground that justice, fairness and the best practical result was to be achieved "by giving controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation" (at p.749 of N.Y.S.; p.283 of N.E.; p.289 of Ll. Rep.). This approach is explicitly incorporated in the Restatement, Second, Conflict of Laws s.145. According to the Restatement s.146:

"In an action for a personal injury, the local law

of the state where the injury occurred determines

the rights and liabilities of the parties, unless,

with respect to the particular issue, some other

state has a more significant relationship ... to

the occurrence and the parties ..."

In Chaplin v. Boys Lord Hodson (at p 380) and Lord Wilberforce (at p 391), after finding that the two conditions in Phillips v. Eyre were satisfied, concluded, in conformity with the American approach, that the law of England should govern the assessment of damages as England had a more significant relationship with the parties and with the occurrence.

20. This approach avoids the shortcomings of the application of the lex fori, particularly the problem of forum shopping, by acknowledging the primacy of the law of the place of the wrong. The approach has encountered criticism from another quarter because it fails to give absolute primacy to that law, thereby contributing to uncertainty of outcome in some situations: see the dissent of Bell C.J. in Griffith v. United Air Lines, Inc. (1964) 203 A 2d 796, at pp 807 et seq. Granted the force of this criticism, it does not justify the inflexible application of the law of the place of the wrong with the consequential injustice it would cause in particular cases. The mechanical application of that law cannot do justice to the infinite variety of cases in which persons come together in a foreign jurisdiction from different legal backgrounds. On the other hand the qualified or flexible application of the law of the place of the wrong copes with the incidents of tort law in the modern age of travel when the place of the accident may be fortuitous, as it is in the case of an aircraft accident, and the parties may have no substantial connection with the law of that place or with that place at all.

21. So, in Chaplin v. Boys it would have been unjust to have relegated the parties to a determination of their rights and liabilities according to the law of Malta. Prima facie, as the law of the place where the accident took place, it was the law to be applied. But its application to the assessment of damages in a case involving parties ordinarily resident in England, who were temporarily stationed in Malta, would plainly result in an injustice. The plaintiff would bear the impact of his serious disabilities in England, including economic loss and loss of amenities of life. As both the plaintiff and the defendant were English residents it was appropriate that the plaintiff should recover and that the defendant should pay damages assessed in conformity with English law.

22. It follows that, if we were looking at the conflicts problem as it arises in relation to foreign torts in the context of a tort committed outside Australia, the American approach or some modification of it, such as the first alternative proposed by the Law Commission and the Scottish Law Commission in Working Paper No. 87, pp.164-165, would have much to commend it. That alternative involves the application of the lex loci delicti subject to an exception involving the application of the law of the country with which the occurrence and the parties had, at the time of the occurrence, the closest and most real connection. If we were to adopt either of these approaches, there would be no place for the two conditions in Phillips v. Eyre. Although Lord Hodson and Lord Wilberforce in Chaplin v. Boys contemplated their retention in conjunction with the application of the law of the place of the wrong, subject to the exception mentioned, the Phillips v. Eyre conditions have little to offer and present a needless complication once the new approach is adopted.

23. In Chaplin v. Boys Lord Wilberforce (at p 391) spoke of the need to take into account "the varying interests and considerations of policy which may arise when one or more foreign elements are present". No doubt a court, in deciding whether the powerful primary claim of the law of the place of the wrong should be discarded, may find it necessary to take account of the policy which underlies the law of a relevant jurisdiction. However, for my part the interests of the parties themselves are likely to be more material in ascertaining whether another law has a closer connection with the parties and the occurrence with respect to the issue to be litigated. The justice of the case turns very largely on the need to give effect to the legitimate or reasonable expectations of the parties. They may have acted in reliance upon an assumption that the courts would apply a certain rule or they may have expected that their rights would be determined by the law of a particular place: see the dissent of Breitel J. in Miller v. Miller (1968) 290 NYS 2d 734, at p 747.

24. The conflicts problem with which we are presently concerned is an inter-jurisdictional problem within Australia. The range of potential conflicts between the laws operating in the States and Territories of Australia is obviously not nearly as great as that which obtains internationally. We have but a limited number of separate territorial jurisdictions or law areas and there is a basic homogeneity or similarity in the common law and the statute law in force in the various States and Territories. The disparity between the Motor Accidents (Compensation) Act of the Northern Territory and the common law of Victoria with respect to the assessment of damages is the exception rather than the rule. The possible existence of significant differences in the laws of States and Territories, arising from the enactment of a statute peculiar to one or more, but not all, States and Territories led me to conclude at an earlier time that we should adopt within the Australian federation the approach that seems best suited to the resolution of international conflicts: see Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38, at pp 53-54. However, that approach did not commend itself to other members of the Court in that case. What is more the approach is posited on the fact that, on the international scene, there are situations in which the parties have no substantial connection with the law of a particular jurisdiction, especially the law of the place of the tort.

25. One cannot make the same comment with the same force about Australian residents with respect to the law of a State or Territory in which they happen to be at a particular time. Australia is one country and one nation. When an Australian resident travels from one State or Territory to another State or Territory he does not enter a foreign jurisdiction. He is conscious that he is moving from one legal regime to another in the same country and that there may be differences between the two which will impinge in some way on his rights, duties and liabilities so that his rights, duties and liabilities will vary from place to place within Australia. It may come as no surprise to him to find that the local law governed his rights and liabilities in respect of any wrong he did or any wrong he suffered in a State or Territory. He might be surprised if it were otherwise. In these circumstances there may be a stronger case for looking to the law of the place of the tort as the governing law for the purpose of determining the substantive rights and liabilities of the parties in respect of a tort committed within Australia.

26. Barry J. made a related, though different, point in Walton v. Walton [1948] VicLawRp 84; (1948) VLR 487 with reference to the English rule calling for a heavy burden of proof on a person seeking to establish a domicile of choice. His Honour observed (at p.489):

"in the Australian community, where social ideas

and customs are substantially the same throughout

the continent, and where there is a common

nationality and a common language, the same

significance or importance cannot be ascribed to a

person's conduct in moving from one State to

another as when the question arises in connection

with the action of a person moving to a community

where, by reason of a difference of language and

national traditions, institutions and usages, he

takes on the character of a foreigner".

27. On this footing the Supreme Court of Victoria should apply the law of the Northern Territory in determining the appellant's entitlement to damages. And if the applicable law to be applied by the Supreme Court is the law of the place of the wrong subject to the flexible exception the result would be the same. There is simply no reason to depart from the lex loci delicti as the primary or basic law to be applied. It cannot be said that there was no substantial connection between the law of the Northern Territory and the parties and the occurrence. The appellant was a resident of the Territory at the time and the statute specifically applies to an action for damages in respect of injury to a resident in or as a result of an incident that occurred in the Territory.

28. In reaching the conclusion that, as a matter of conflicts of law, the law of the Northern Territory is to be applied, I reject the notion that the principles according to which damages for personal injury are to be assessed is a matter of procedure. It would be artificial to regard that question as one of adjectival or procedural law. The measure of damages is plainly a question of substantive law.

29. I turn now to the respondents' alternative submission based on the provisions of the Constitution. Section 118 and s.51(xxv) of the Constitution are the counterpart of Art.IV, s.1, of the United States Constitution which provides:

"Full Faith and Credit shall be given in each State

to the public Acts, Records, and judicial

Proceedings of every other State. And the Congress

may by general Laws prescribe the Manner in which

such Acts, Records, and Proceedings shall be

proved, and the Effect thereof."

Section 118 provides:

"Full faith and credit shall be given,

throughout the Commonwealth to the laws, public

Acts and records, and the judicial proceedings of

every State."

And s.51(xxv) confers legislative power on the Parliament with respect to:

"The recognition throughout the Commonwealth of the

laws, the public Acts and records, and the judicial

proceedings of the States".

In view of the presence of s.51(xxv) it is impossible to regard s.118 as a special command that State laws should be recognized. That function is left to Commonwealth legislation pursuant to s.51(xxv).

30. But s.118 has no application to the laws and public Acts of a Territory: Anderson, at p.31. The question then is whether s.18 of the Recognition Act applies to the laws and public Acts of a Territory. Section 18 provides:

"All public acts records and judicial

proceedings of any State or Territory, if proved or

authenticated as required by this Act, shall have

such faith and credit given to them in every Court

and public office as they have by law or usage in

the Courts and public offices of the State or

Territory from whence they are taken."

The absence of any reference to "laws" as well as the reference to "public acts" instead of "public Acts" indicates that the section does not apply to statutes and other laws of States and Territories. Section 3 of the Recognition Act, which provides that judicial notice should be taken of "State Acts" supports the same conclusion. Indeed, the Recognition Act makes no provision for judicial notice to be taken of "Territory Acts". Section 18 makes provision for the proof and authentication of public acts such as proclamations, orders and commissions. It is not apt to deal with statutes. And it has been asserted that, being evidentiary in character, the section "does not affect the principles on which the Courts of one State take cognizance of wrongs committed in another State": Varawa v. Howard Smith Co. Ltd, at p 69, per O'Connor J. In Anderson, Windeyer J. (at p 46) agreed with this statement.

31. However, in Harris v. Harris [1947] VicLawRp 6; (1947) VLR 44 Fullagar J., after drawing attention (at pp 45-46) to the fact that s.18 had its origins in the American constitutional provision and has as a counterpart an Act passed by Congress in 1790 and saying that "No distinction ... can, I think, be drawn between either pair of provisions" went on to state (at p.59):

"The two may mean the same thing, as is held in the

United States, or either may be wider or narrower

than the other. But the one is a broad general

pronouncement or direction such as one would expect

to find in a Constitution, and such as may be

expected to be the subject of much argument and

much difference of opinion, fluctuating perhaps

from time to time as social and political

conditions change. The other seems to me to be a

specific and precise direction ..."

32. For present purposes it is unnecessary to determine whether there is any inconsistency between these views and, if so, which is correct. For my part I doubt that s.18 is merely evidentiary in its consequences. But that is by the way for it is clear that s.18 has no application to the statutes of a Territory. For this reason s.18 does not sustain the respondents' argument.

33. It becomes crucial then to determine the role of s.118. As noted earlier, in Merwin Pastoral, Rich and Dixon JJ. (at p.577) and Evatt J. (at pp.587-588) considered that the section prohibited a court of one State from refusing to give effect to a defence under the law of another State, when the law of that other State was the proper law of the contract then in question, on the ground that the law was contrary to public policy considerations of the forum. This approach to the interpretation of the section accords with that given to Art.IV, s.1 of the United States Constitution at that time.

34. In Bradford Electric Co. v. Clapper [1932] USSC 91; (1932) 286 US 145 Brandeis J. acknowledged (at p 160) that the courts of one State may refuse relief to a plaintiff suing on a statutory cause of action arising in another State because the enforcement of the right conferred would be obnoxious to the public policy of the forum. But he went on to say (at p.160) that Art.IV s.1 prohibited a refusal by the courts of one State "to give effect to a substantive defense under the applicable law of another State". Later decisions of the Supreme Court have cut back the effect of Clapper. Although it has been accepted that the purpose of the full faith and credit clause was to preserve rights acquired or confirmed under statutes and judicial proceedings of one State by requiring recognition of their validity in other States, "the very nature of the federal union of states, to which are reserved some of the attributes of sovereignty, precludes resort to the full faith and credit clause as the means for compelling a state to substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate": Pacific Insurance Co. v. Industrial Accident Commission [1939] USSC 62; (1939) 306 US 493, at p 501. It has been held that Clapper decided no more than that a State statute applicable to employer and employee within the State, which by its terms provides compensation for the employee if he is injured in the course of his employment while temporarily in another State, will be given full faith and credit there when not obnoxious to its policy: Pacific Insurance, at p 504; and see Nevada v. Hall [1979] USSC 61; (1979) 440 US 410, at pp 421-422. The governing principle that has emerged is that in cases of conflict between a statute of the forum and the statute of another State "the conflict is to be resolved, not by giving automatic effect to the full faith and credit clause, compelling the courts of each state to subordinate its own statutes to those of the other, but by appraising the governmental interests of each jurisdiction, and turning the scale of decision according to their weight": Alaska Packers Association v. Industrial Accident Commission [1935] USSC 61; (1935) 294 US 532, at p 547. "(T)he Court has invalidated the choice of law of a State which has had no significant contact or significant aggregation of contacts, creating state interests, with the parties and the occurrence or transaction": Allstate Insurance Co. v. Hague [1981] USSC 37; (1981) 449 US 302, at p 308.

35. It is evident from this brief sketch of the authorities that the full faith and credit clause has not hampered the elaboration and application of the principles of private international law in the disposition of inter-State conflicts problems in the United States. Indeed, the cases mark a retreat from the provisions of the Constitution to the more flexible provisions of judge-made law. The reason for the retreat was forcefully stated by Stone J. in Alaska Packers (at p.547) in these terms:

"A rigid and literal enforcement of the full faith

and credit clause, without regard to the statute of

the forum, would lead to the absurd result that,

wherever the conflict arises, the statute of each

state must be enforced in the courts of the other,

but cannot be in its own. Unless by force of that

clause a greater effect is thus to be given to a

state statute abroad than the clause permits it to

have at home, it is unavoidable that this Court

determine for itself the extent to which the

statute of one state may qualify or deny rights

asserted under the statute of another."

36. The underlying implication in these remarks is that a rigid and literal enforcement of the full faith and credit clause would result in the application of the lex loci delicti. Although the principles which have evolved in the United States treat the lex loci delicti as the basic law, they allow for its displacement. As Lord Hodson noted in Chaplin v. Boys (at p 380), these principles favour the lex fori because a court will tend to favour its own policies over those of other States and will be inclined to give its own rules a wider application than it will give to those of other States. That seems to have been the American experience. However, for present purposes the point to be made is that the relevant American law is not dictated by the provisions of the Constitution. The Supreme Court has interpreted the Constitution so that it does not stand in the way of judicial development of appropriate conflicts of law principles.

37. Apart from the implication referred to in the preceding paragraph, the interpretation given to the full faith and credit clause does not support the respondents' argument. Why then should we give to the facsimile an interpretation denied to the original? I would give an affirmative answer if it clearly appeared that the full faith and credit clause had been understood at the close of the last century as the solvent of inter-State conflicts. But this was not the case. The same answer might be given if Australian history and understanding pointed in that direction. But the Convention Debates and the textbooks are silent upon the point.

38. The presence of the word "laws" in s.118 distinguishes the section from its North American ancestor. No doubt that word was inserted to guard against the possibility that the reference to "public Acts" might leave a category of laws in force in a State outside the reach of the section. The presence of the word does not justify giving the section the far-reaching interpretation proposed by the respondents. If any provision in the Constitution is to be regarded as the source of a solution to inter-jurisdictional conflicts of law problems within Australia, it is perhaps s.51(xxv). It is preferable that Parliament should provide a solution by an exercise of legislative power, if that be legitimate, than that the Court should spell out a rigid and inflexible approach from the language of s.118.

39. For the foregoing reasons I would dismiss the appeal.

WILSON AND GAUDRON JJ.: Rodney Godleman, Charles Taylor Piercy and the Australian Telecommunications Commission ("the respondents") are defendants to an action commenced by Anthony Breavington ("the appellant") in the Supreme Court of Victoria to recover damages for injuries sustained by him in a motor vehicle accident in the Northern Territory. The question which arises on this appeal is whether the appellant's right to recover damages is to be determined according to the law of Victoria, or according to the law which would have been applied if the action had been brought in the Supreme Court of the Northern Territory. The question arises because under Victorian law damages fall for assessment in accordance with the common law, whereas the Motor Accidents (Compensation) Act 1979 (N.T.) ("the Compensation Act") has introduced into the Northern Territory a no fault motor accident compensation scheme. Section 5 of the Compensation Act provided, at the relevant time, that:

(1)Subject to sub-section (2), no action for

damages shall lie in the Territory in respect

of the death of or injury to a resident of the

Territory in or as a result of an accident

that occurred in the Territory.

(2)Subject to sub-section (3), nothing in

sub-section (1) deprives a person of the right

to bring an action for damages for pain and

suffering or loss of amenities of life.

(3)A person who has received or has elected to

receive a benefit under section 17 shall not

commence or continue an action referred to in

sub-section (2)."

2. Section 5(2) of the Compensation Act, whilst allowing that an action may be brought to recover damages (unless the injured person has received or elected to receive a benefit under s.17 of the Compensation Act), effectively excluded any entitlement to recover damages in an action in the Territory for loss of earnings or loss of earning capacity. Damages recoverable for pain and suffering and loss of amenities of life were limited to $100,000.00 (s.39(1)).

3. At the time of the accident the appellant was a resident of the Northern Territory. His action for damages in the Supreme Court of Victoria attracted defences pleading, inter alia, the terms of s.5 of the Compensation Act. The question of law thereby raised was the subject of a hearing before O'Bryan J. who held that the matter was to be determined in accordance with the law of Victoria, and ordered that the relevant paragraphs of the defences raising s.5 of the Compensation Act be struck out.

4. The Full Court of the Supreme Court of Victoria (Young C.J., King and Beach JJ.) upheld an appeal from the decision and orders of O'Bryan J., holding that the appellant ought not to be permitted to recover in Victoria more than he could recover in the Northern Territory. From that decision the present appeal is brought.

5. The appeal was initially argued by reference to the common law rules of private international law determining choice of governing law for the adjudication of liability in respect of tortious acts committed outside the law district of the forum. It is convenient here to note that s.5 of the Compensation Act is concerned only with actions commenced in the Northern Territory and not with actions instituted elsewhere. The Act does not purport to provide generally as to the rights and liabilities arising out of motor vehicle accidents in the Northern Territory. If it did so provide, then it seems to us that the question which would then arise would not necessarily be a choice of law question in the ordinary sense. Rather, the question might be whether an Act of the Northern Territory, depending for its force on the Northern Territory (Self-Government) Act 1978 (Cth), attracts the operation of Covering Cl.5 or s.109 of the Constitution: see Lamshed v. Lake [1958] HCA 14; (1958) 99 CLR 132; Spratt v. Hermes [1965] HCA 66; (1965) 114 CLR 226.

6. Hitherto it has been accepted that the common law rules determining choice of law apply to actions in tort, involving what is hereafter loosely described as an interstate aspect, by reason that each State and Territory has been regarded as a separate law area enforcing its own laws: Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629; Anderson v. Eric Anderson Radio & T.V. Pty. Ltd. [1965] HCA 61; (1965) 114 CLR 20. It has also generally been accepted that those choice of law rules apply notwithstanding that the matter falls for determination in the exercise of invested federal jurisdiction. See, for example, Pedersen v. Young [1964] HCA 28; (1964) 110 CLR 162, per Windeyer J. at pp 169-170. Even in matters involving the original jurisdiction of this Court the private international law rules determining choice of law have been seen to have a significant role. See, for example, Musgrave v. The Commonwealth [1936] HCA 80; (1937) 57 CLR 514. More recently that role has been manifest in determining choice of remittee forum in the exercise of the powers granted by s.44 of the Judiciary Act 1903 (Cth): see Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38.

7. The seeming incongruity in the determination of liability for tortious acts occurring in Australia but involving an interstate aspect by reference to the choice of law rules of private international law led to an invitation to the parties to address additional arguments by reference to s.118 of the Constitution, s.18 of the State and Territorial Laws and Records Recognition Act 1901 (Cth) ("the Recognition Act") and s.56 of the Judiciary Act. Submissions were also put on behalf of the Attorneys-General of the Commonwealth, New South Wales, Victoria, Queensland, South Australia and Western Australia intervening pursuant to s.78A of the Judiciary Act, and the Attorney-General of the Northern Territory.

8. Before turning to the questions raised by s.118 of the Constitution, s.18 of the Recognition Act and s.56 of the Judiciary Act, it is convenient to examine, albeit briefly, the relevant common law rules relating to tortious liability in matters of private international law and their operation in Australia. The applicable common law rule, known as the rule in Phillips v. Eyre (1870) LR 6 QB 1, is formulated by reference to torts committed outside the law district of the forum. The rule was expressed in its application to the States of Australia in Koop in the following terms (at p.642):

"an action of tort will lie in one State for a

wrong alleged to have been committed in another

State, if two conditions are fulfilled: first, the

wrong must be of such a character that it would

have been actionable if it had been committed in

the State in which the action is brought; and

secondly, it must not have been justifiable by the

law of the State where it was done".

9. Like Phillips v. Eyre, Koop was concerned solely with the question whether action might be brought in a court other than a court having jurisdiction where the tort was committed. In neither case did the question arise as to the law to be applied in the adjudication of the rights and liabilities of the parties. That question arose in Anderson where the issue was whether in an action in negligence in the District Court of New South Wales in respect of events in the Australian Capital Territory the defendant could rely on contributory negligence which was then a complete defence in New South Wales. Under the law of the Australian Capital Territory contributory negligence resulted only in the reduction of damages. It was held that the law of New South Wales should be applied. Windeyer J. rested his conclusion that New South Wales law was applicable, at least in part, on the decision in Koop, saying (at p.42):

"When in Koop v. Bebb (at p 642) this Court spoke of

'the rule of private international law which

defines the conditions of civil liability' in one

State for an act done in another, the reference was

not, as I read the judgment, merely to the

entertaining of an action but also to the

substantive law for determining liability in an

action."

10. The decision in Anderson has been understood to require the application of the forum law as the substantive law determining liability for a tortious act committed outside the law district of the forum: Chaplin v. Boys (1971) AC 356, per Lord Wilberforce at p 386; Kolsky v. Mayne Nickless Ltd. (1970) 72 SR(NSW) 437, at pp 444-445. In Pozniak Mason J. (referring to Koop; Anderson, per Windeyer J. (at pp.41-42); and Kolsky) stated (at p.49) that "the balance of Australian authority ... holds that it is the lex fori that determines questions of substance".

11. Consideration of choice of law in Anderson was directed to the same issue as presents itself in a unitary legal system, viz. choice of law to be applied in the determination of liability for torts committed outside the law district of the forum. However, in Australia the question must be framed to take account of the existence of federal jurisdiction as delineated in Ch.III of the Constitution.

12. Chapter III jurisdiction, whether exercised by this Court, by courts created by the Commonwealth Parliament or by State courts invested with federal jurisdiction, is an Australian jurisdiction. A court when exercising federal jurisdiction, notwithstanding that it is exercising jurisdiction within a particular State or Territory, is not in any relevant sense a forum of the law district of that State or Territory. By force of s.75(iv) of the Constitution, federal jurisdiction includes matters between residents of different States and between a State and a resident of another State. In the ordinary course of litigation in respect of tortious acts, involving what we have loosely described as an interstate element, matters may fall for adjudication by a court of a State or Territory exercising the judicial power of that State or Territory or by a court exercising federal judicial power. Thus, in the context of the Australian federation and the Australian legal system, the choice of law questions which may arise cannot be confined as in a unitary legal system. The question in relation to tortious acts becomes one of the law to be applied when the matter is litigated in a court other than a court exercising the judicial power of the State or Territory in which the tort was committed.

13. To some extent choice of law questions may have been minimized in matters of original federal jurisdiction by force of s.79 of the Judiciary Act which provides as follows:

"The laws of each State or Territory, including the

laws relating to procedure, evidence, and the

competency of witnesses, shall, except as otherwise

provided by the Constitution or the laws of the

Commonwealth, be binding on all Courts exercising

federal jurisdiction in that State or Territory in

all cases to which they are applicable."

Either by choice of venue, or by choice by this Court of remittee forum under s.44 of the Judiciary Act, any choice of law question which would otherwise arise in relation to the determination of tortious liability may be obviated by selecting a venue or remittee forum in the State or Territory where the cause of action arose. In practice, of course, the choice of law question has played a significant role in the selection of venue or remittee forum. See, for example, Parker v. The Commonwealth [1965] HCA 12; (1965) 112 CLR 295; Gleeson v. Williamson (1972) 46 ALJR 677; Pozniak.

14. The position concerning choice of law in matters litigated in State courts invested with federal jurisdiction is somewhat ambiguous. In Anderson, Barwick C.J. (at p.24) left open the possibility that the question of the applicability of forum law to determine actionability (if not the question of choice of law) might be different depending upon whether or not the action involved the exercise of invested federal jurisdiction. However, in Pedersen Windeyer J. said (at pp.169-170):

"When the Judiciary Act makes the law of a State

binding upon courts exercising federal jurisdiction

within the State, the law thus designated is, it

has been held, the whole body of the law of the

State including the rules of private international

law so far as applicable."

See also Musgrave, at pp.532, 543 and 547-548, but cf. Evatt and McTiernan JJ., at pp.550-551; Deputy Federal Commissioner of Taxation v. Brown [1958] HCA 2; (1958) 100 CLR 32, per Dixon C.J. at p 39; Parker, per Windeyer J. at p 306; Suehle v. The Commonwealth [1967] HCA 13; (1967) 116 CLR 353, per Windeyer J. at p 356.

15. The operation of the choice of law rules of private international law, whether by their own force in matters not involving the exercise of federal jurisdiction, or by force of s.79 in matters of federal jurisdiction, allows for the possibility that tortious liability (or the extent thereof) in respect of actions occurring in Australia may be determined by reference to different substantive laws depending upon the location or venue of the court in which action is brought. The undesirability of that possibility is obvious, not only in terms of its potential as an inducement to forum shopping, but in terms of perception of the law itself. It is not only undesirable, but manifestly absurd that the one set of facts occurring in the one country may give rise to different legal consequences depending upon the location or venue of the court in which action is brought. The problem of choice of law is akin to the problem of inconsistent State and Commonwealth laws applying to the one set of facts, which problem is resolved by s.109 of the Constitution.

16. In the course of argument several solutions were advanced in answer to the problem of choice of law in the adjudication of tortious liability for acts occurring in Australia but having an interstate aspect. The solution advanced on behalf of the appellant was the retention of the choice of law rule to be discerned from the actual decision in Anderson, but ameliorated by the adoption of the doctrine of forum non conveniens as enunciated by the House of Lords in Spiliada Maritime Corporation v. Cansulex Ltd. (1987) 1 AC 460, thus allowing a court to decline to exercise jurisdiction if another and more appropriate forum is available for the litigation of the matter. The respondents, supported by the Attorneys-General of New South Wales, Queensland and South Australia, preferred as a solution the adoption as a common law rule of the principles enunciated by Lord Wilberforce in Chaplin v. Boys. On behalf of the States of Victoria and Western Australia it was argued that the lex loci delicti should be adopted. On behalf of the Attorney-General of the Northern Territory it was urged that the solution was to be found in the full faith and credit provisions of s.118 of the Constitution and s.18 of the Recognition Act.

17. Notwithstanding that the operation of the choice of law rules may produce undesirable consequences in the adjudication of liability for tortious acts committed in Australia but involving an interstate aspect, a question arises whether the solution should be provided by judicial or by legislative intervention. We think this Court should not hesitate to depart from the existing choice of law rules if, on analysis, they prove to be unsatisfactory in point of legal principle. Leaving aside the larger constitutional questions which arise in consequence of the federal structure in Australia, it is our view that the rule that the lex fori determines liability for tortious acts committed in Australia but outside the law district of the forum, implicit in the actual decision in Anderson is, as a matter of legal principle, unsatisfactory.

18. In Anderson Kitto J. (at pp.28-29) decided the matter on the basis that the wrong which occurred in the Australian Capital Territory and which was the subject of an action commenced in New South Wales would not have been actionable if committed in New South Wales. His Honour therefore found it unnecessary to consider what law governed the question of liability. Barwick C.J. (at p.23) accepted and Taylor and Menzies JJ. (at pp.35 and 38-40 respectively) seem to have accepted that liability was to be determined by the application of the same rules as would be applied in the forum if the tort had been committed in the law district of the forum. No reason was assigned therefor, although Taylor J. referred to The "Halley" (1868) L.R. 2 P.C. 193. Windeyer J. (at pp.41-42) rested his decision in part upon the authority of The "Halley" and in part upon the decision in Koop, although, as we have previously noted, Koop was concerned with actionability and not choice of governing law.

19. In The "Halley" Selwyn L.J., speaking for the Privy Council, dismissed the notion of "vested rights" as determinative of liability in matters of private international law. The "vested rights" theory found some acceptance by Willes J. in Phillips v. Eyre, at least in relation to the question of actionability. In the latter case it was said (at p 28):

"The obligation is the principal to which a right

of action in whatever court is only an accessory,

and such accessory, according to the maxim of law,

follows the principal, and must stand or fall

therewith. 'Quae accessorium locum obtinent

extinguuntur cum principales res peremptae sunt.'

A right of action, whether it arise from contract

governed by the law of the place or wrong, is

equally the creature of the law of the place and

subordinate thereto. The terms of the contract or

the character of the subject-matter may shew that

the parties intended their bargain to be governed

by some other law; but prima facie, it falls under

the law of the place where it was made. And in

like manner the civil liability arising out of a

wrong derives its birth from the law of the place,

and its character is determined by that law."

20. The notion of "obligatio" or "vested rights" given expression in the above passage, although now discarded, was initially accepted in the United States of America, with the consequence that, as stated by Holmes J. in Slater v. Mexican National Railroad Company [1904] USSC 100; (1904) 194 US 120 (at p 126):

"as the only source of this obligation is the law

of the place of the act, it follows that that law

determines not merely the existence of the

obligation ... but equally determines its extent."

21. In Koop, the "obligatio" or "vested rights" theory was dismissed in terms similar to those earlier adopted by Selwyn L.J. in The "Halley". It was said in Koop (at p.644):

"English law as the lex fori enforces an obligation

of its own creation in respect of an act done in

another country which would be a tort if done in

England, but refrains from doing so unless the act

has a particular character according to the lex

loci actus."

Although acceptance of the "vested rights" theory involves the consequence that liability is determined according to the law of the place of the wrong, the rejection of that theory does not necessarily entail the consequence that liability or the extent thereof is co-extensive with the liability which would arise if the act giving rise to the action had been committed within the law district of the forum. Even accepting that the obligation is one created by the law of the forum, it does not follow that the nature or extent of the obligation should be determined in disregard of the law of the place where the tort was committed.

22. When the law of the forum defines by the rule of private international law given expression in Phillips v. Eyre the conditions necessary before a tort committed outside its jurisdictional area is actionable in the forum it does so by reference, inter alia, to a consideration of the law of the place where the tort was committed. There is no reason in logic why the forum should not determine questions as to liability (including the extent thereof) by reference to the law of the place where the tort was committed. However, it would seem that the decision in Machado v. Fontes (1897) 2 QB 231 may require otherwise.

23. In Machado v. Fontes a plaintiff was held entitled to maintain an action in England for libel in respect of the publication in Brazil of defamatory matter. It was assumed that the law of Brazil, although rendering the publication an offence under the criminal law, excluded civil liability therefor. In the absence of civil liability under the law of Brazil, a decision that the claim was actionable in England seems to imply that the questions of liability and extent of liability must fall for determination in accordance with the law of England. However, it must be remembered that the case was concerned with actionability and not with choice of governing law. In this context it is interesting to note that in the 1st and 2nd editions of Halsbury's Laws of England, Machado v. Fontes was discussed in relation to the rule in Phillips v. Eyre, but it was stated by reference to Ekins v. East-India Company [1717] EngR 11; (1717) 1 P Wms 395 (24 ER 441) that "(t)he measure of damages in an action in respect of a tort committed abroad is (it would seem) to be governed by the lex loci actus" (1st ed., vol.6, par.372; 2nd ed., vol.6, par.337).

24. At the time of the decision in Anderson, only Machado v. Fontes could provide authoritative support for the conclusion that the lex fori governed all questions as to tortious liability. Yet at that time it had been doubted by the Privy Council in Canadian Pacific Railway Company v. Parent (1917) AC 195 and exposed to the criticism of this Court in Koop. It was effectively overruled in Chaplin v. Boys. In these circumstances the rule that the lex fori governs questions of liability in respect of torts committed outside the law district of the forum cannot be said to be satisfactory in point of legal principle. It is, as we have said, unsatisfactory in its operation in relation to tortious acts occurring in Australia. The unsatisfactoriness of its operation as an inducement to forum shopping might be alleviated by the adoption of a doctrine of forum non conveniens, but the adoption of that doctrine would not guarantee a solution to the more fundamental problem of the one set of facts occurring in this country giving rise to different legal consequences depending upon the location or venue of the court in which legal proceedings are instituted.

25. Given the unsatisfactory nature of the rule to be discerned from the actual decision in Anderson, this Court ought now to consider the adoption of a new choice of law rule, as was done by the House of Lords in Chaplin v. Boys.

26. Chaplin v. Boys is a case which presents some difficulty in that it is not easy to discern a true ratio decidendi therein. Lord Hodson (at p 380) expressed a preference for the position adopted in the Restatement, Second, Conflict of Laws under which the rights and liabilities of the parties are determined by the law of the State having the most significant relationship to the occurrence and the parties, sometimes called "the proper law of the tort". Lord Guest (at p.381) was of the view that the substantive law to be applied was the lex loci delicti. Lord Donovan (at p.383) considered that the forum "should award its own remedies", whilst Lord Pearson (at p.406) declined to depart from the "established rule" that the lex fori should be applied to determine the rights and liabilities of the parties. Lord Wilberforce (at p.389) viewed the issue as going to the rule in Phillips v. Eyre which his Lordship would restate "as requiring actionability as a tort according to English law, subject to the condition that civil liability in respect of the relevant claim exists as between the actual parties under the law of the foreign country where the act was done." His Lordship (at p.391) then proceeded to adopt a general rule that in personal injury cases the law of the place where the injury occurred should determine the rights and liabilities of the parties, subject to a flexible exception based on an "account of the varying interests and considerations of policy which may arise when one or more foreign elements are present." Lord Pearson also subscribed to a concept of flexibility notwithstanding his preference for the law of the forum.

27. The Supreme Courts of New South Wales, Victoria, Queensland and South Australia have had occasion to consider the decision in Chaplin v. Boys. See, for example, Kolsky; Schmidt v. G.I.O. of New South Wales (1973) 1 NSWLR 59; Corcoran v. Corcoran [1974] VicRp 22; (1974) VR 164; Borg Warner (Aust.) Ltd. v. Zupan [1982] VicRp 44; (1982) VR 437; Kemp v. Piper (1971) SASR 25; Warren v. Warren (1972) Qd R 386. In Kemp the Supreme Court of South Australia and in Warren the Supreme Court of Queensland held that the approach in Chaplin v. Boys permitted of sufficient flexibility to allow the actions to proceed in those courts notwithstanding that the second limb of the test in Phillips v. Eyre might not have been satisfied. In Kolsky the Court of Appeal of the Supreme Court of New South Wales considered that it was bound by the decision in Anderson to refuse to adopt the test enunciated by Lord Wilberforce. In the present matter the Full Court of the Supreme Court of Victoria adopted that test, taking the view that it was not precluded from so doing by the decision of this Court in Koop. It was said by Young C.J.:

"In the Australian Federation, however, there

seem to be sound reasons of policy why a person

should not be able to succeed in an action in a

State or Territory on a cause of action in respect

of which civil liability does not exist in the

place where the act giving rise to the cause of

action was done."

28. The actionability rules as reformulated in the speech of Lord Wilberforce in Chaplin v. Boys obviate the policy problem identified by Young C.J. in the above passage, that problem stemming from the decision in Machado v. Fontes. However, the flexible exception to the lex loci delicti, as enunciated in the speech of Lord Wilberforce, allows the continued possibility that the one set of facts occurring in Australia may give rise to different legal consequences depending upon the location or venue of the court in which the action is brought. That question is, we think, one which must be resolved by reference to the federal compact embodied in the Constitution, including by reference to s.118 of the Constitution.

29. Section 118 provides:

"Full faith and credit shall be given, throughout

the Commonwealth to the laws, the public Acts and

records, and the judicial proceedings of every

State."

30. Section 118 is not a guarantee that full faith and credit will be given to the laws, the public Acts and records, and the judicial proceedings of a Territory. Leaving aside the question of possible operation of Covering Cl.5 and s.109 of the Constitution with respect to the laws of a Territory, the position of the laws etcetera of the Territories falls for determination by reference to s.18 of the Recognition Act. That section provides:

"All public acts records and judicial proceedings

of any State or Territory, if proved or

authenticated as required by this Act, shall have

such faith and credit given to them in every Court

and public office as they have by law or usage in

the Courts and public offices of the State or

Territory from whence they are taken."

31. It will immediately be noticed that there is a difference in terminology between s.118 and s.18 of the Recognition Act: the former refers, inter alia, to "the laws" and "the public Acts" whilst the latter makes no reference to laws and refers to "public acts".

32. In Harris v. Harris [1947] VicLawRp 6; (1947) VLR 44, Fullagar J. noted the American origins of the two sections saying (at pp 45-46):

"Section 118 was taken from sec.1 of Article IV. of

the Constitution of the United States, and sec.18

of the (Recognition Act) also has its counterpart

in an Act passed by Congress in the United States

in 1790. No distinction in point of terminology

can, I think, be drawn between either pair of

provisions."

Later, his Honour said of s.118 and s.18 (at p.59):

"The two may mean the same thing, as is held in the

United States, or either may be wider or narrower

than the other. But the one is a broad general

pronouncement or direction such as one would expect

to find in a Constitution, and such as may be

expected to be the subject of much argument and

much difference of opinion, fluctuating perhaps

from time to time as social and political

conditions change. The other seems to me to be a

specific and precise direction ...".

33. When the Recognition Act was enacted in 1901, s.18 was concerned solely with the public acts, records and judicial proceedings of the States, there being then no Territories within the Commonwealth. It is unlikely that s.18 was intended merely to echo the constitutional provision, even if operating by reference to faith and credit. The Recognition Act then, as now, was substantially concerned with evidentiary matters. Section 18, then as now, travelled beyond the merely evidentiary, but confined its substantive effect to "public acts records and judicial proceedings, if proved or authenticated as required by this Act." It is in the evidentiary provisions that the meaning of "public acts" is to be found. It is the evidentiary provisions which govern proof or authentication upon which the substantive operation of s.18 is predicated. The evidentiary provisions, then as now, dealt with, inter alia, proclamations, commissions, orders and regulations (s.6) and by-laws and regulations (s.15). The words "public acts" in s.18 are apt to include such matters. However, the Recognition Act makes no provision for the proof or authentication of State Acts. By s.3 they are to be the subject of judicial notice and by s.118 of the Constitution they are to be accorded full faith and credit. Nor does the Recognition Act make any provision in respect of Acts of a Territory. Accordingly, in our view, s.18 of the Recognition Act has no operation in relation to either the Acts of the States or the Acts of a Territory.

34. Although s.118 of the Constitution has no operation with respect to the public Acts and the laws of a Territory, it is not on that account rendered irrelevant to the question whether the one set of facts occurring in Australia may be governed by different substantive laws depending upon the location or venue of the court in which action is brought. That question is conceptually different from the question whether s.118 has immediate operation upon choice of law rules, that being the context in which this Court considered the operation of s.118 and s.18 of the Recognition Act in Anderson. See also Varawa v. Howard Smith Co. Ltd. [1911] HCA 46; (1911) 13 CLR 35, per O'Connor J. at p 69.

35. In Anderson Barwick C.J. dismissed both s.118 and s.18 of the Recognition Act as irrelevant, saying (at p.25):

"There is no failure to give full faith and credit

to the Ordinances of the Australian Capital

Territory by deciding that they do not apply to the

trial of an action in a court of the State of New

South Wales for a cause of action given by the laws

of that State."

Implicit in the quoted passage is that neither s.118 nor s.18 operates so as to give extended effect to a law of a State or Territory. That idea was made explicit by Kitto J. who said of the provision of the A.C.T. Ordinance there sought to be invoked (at p.33):

"If it be true that the section is to be treated by

a New South Wales court, and in particular by such

a court when exercising federal jurisdiction, as if

it were transplanted into the law of New South

Wales, it must stand in that law with the same

meaning as it has in the Territory .... There is

no escape from this, it seems to me, that whatever

may constitute giving faith and credit to the laws

of the Territory, it is faith and credit to those

laws as they stand, not as notionally altered ...."

In the same case Windeyer J. (at p.46) endorsed the remarks of O'Connor J. in Varawa to the effect that s.18 of the Recognition Act did not displace the choice of law rules of private international law. His Honour went on to observe:

"What is really needed is not a different choice

between conflicting laws, but an elimination of the

conflict, so that Australians, being one people,

should not be troubled by differing laws on a topic

such as negligence on which the law could well be

made uniform."

What has not been considered by this Court is whether s.118 operates to resolve the conflict between competing State laws, with consequential but indirect impact upon the choice of law rules.

36. To ascertain whether s.118 does operate to resolve conflict between competing State laws, it is convenient to first note the various ways in which s.118 cannot be construed or confined.

37. Section 118 cannot be construed as a direction that State laws are to be recognized. By s.51(xxv) of the Constitution, recognition is to be effected in consequence of the exercise of legislative power thereby conferred upon the Commonwealth.

38. Nor can s.118 be confined so as merely to require the acknowledgment of the operative effect of a State law within the territory of that State. That much is achieved by the combined effect of Covering Cl.5, ss.106 and 107 of the Constitution albeit that s.106 is expressly made "subject to this Constitution" and that s.107 is conditional upon the power not being "exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State". Moreover to construe s.118 as limited in its operation to the acknowledgment of the operative effect of a State law within the territory of the relevant State would be to render meaningless the words "throughout the Commonwealth" in s.118.

39. Nor can s.118 be construed merely as a direction that the law of a State be applied if, by the rules of the forum, that State law is the law governing the acts or transactions in issue. If the operation of s.118 were so confined it would achieve nothing in relation to the laws and public Acts of a State not achieved by the common law choice of law rules, or such statute law as might supplant them.

40. Some operative effect for s.118 in relation to the laws and public Acts of a State was acknowledged in Merwin Pastoral Co. Pty. Ltd. v. Moolpa Pastoral Co. Pty. Ltd.; Moolpa Pastoral Co. Pty. Ltd. v. McKindlay [1933] HCA 31; (1933) 48 CLR 565, where Rich and Dixon JJ. (at p 577) and Evatt J. (at pp 587-588) expressed the view that s.118 operated to preclude a court of one State from declining to apply the law of another State (the law of the latter State being the proper law of the contract there under consideration) on grounds based on public policy considerations of the State of the forum. Although the remarks relating to s.118 were not strictly necessary to the decision reached, they must be taken to indicate the view that, at least on some occasions, the law of a particular State must be applied, notwithstanding that the law of the forum would otherwise render it inapplicable. In other words, in some circumstances, s.118 displaces the law of the State of the forum. In Merwin and Moolpa the law which it was envisaged might be displaced was non-statutory law. But if s.118 may displace non-statutory law, there is no reason why it might not displace statute law, or operate as a limitation upon the power of the States to legislate with respect to the law to be applied in the courts of that State in matters involving an interstate aspect. This consequence involves no discord between ss.106, 107 and 108 (the provisions ensuring the continued existence and powers of the States) and s.118 of the Constitution for the former provisions operate subject to the Constitution, whereas s.118 operates absolutely.

41. The remarks in Merwin and Moolpa do not go beyond the recognition that s.118 requires that the law of a State be applied notwithstanding that by the law of the forum it would otherwise be inapplicable by reason of what may be described as public policy considerations. If the operation of s.118 were limited in this manner it would perform a valuable and immediate function in relation to the laws and public Acts of a State, albeit within a narrow scope.

42. However, in the context of Ch.V of the Constitution, in which s.118 is to be found, s.118 has, we think, a wider operation. Chapter V expressly recognizes that upon and after federation, the States would exist as States with continued law-making powers (ss.106 and 107) and that their laws would continue (s.108), but within a body politic in which the Constitution "and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State": Covering Cl.5. The States, by force of s.123 of the Constitution, continued with identifiable territorial limits, those limits in ordinary legal conception constituting the law areas of the States. The problem of the one set of facts giving rise to one legal consequence by application of State law and another legal consequence by application of Commonwealth law was resolved by s.109, itself operating so as to render invalid any inconsistent law of a State, to the extent of the inconsistency: University of Wollongong v. Metwally [1984] HCA 74; (1984) 158 CLR 447. The problem of one set of facts giving rise to one legal consequence by operation of one State law and another legal consequence by operation of another State law was resolved by the requirement in s.118, to which the Constitutions, the powers and laws of the States are by ss.106, 107 and 108 made subject, that "(f)ull faith and credit ... be given, throughout the Commonwealth to the laws, the public Acts and records, and the judicial proceedings of every State." By the constitutional subjection of the Constitutions, the powers and the laws of the States to s.118, the consequence was effected that the one set of facts occurring in a State would be adjudged by only one body of law and thus give rise to only one legal consequence, regardless of where in the Commonwealth the matter fell for adjudication.

43. Unlike s.109 of the Constitution, s.118 provides no formula for the ascertainment of the one applicable body of law. Nor is it necessary in the present case to identify by implication from other constitutional provisions, notably ss.106, 107 and 108, the criteria by which the laws of one State rather than another will be selected as supplying the law by which the legal consequence of a set of facts occurring in a State is to be adjudicated. It is sufficient in the present case to note that effect is given to the requirement flowing from s.118 that there should only be one body of State law determining the legal consequences attaching to a set of facts occurring in a State only by the adoption of an inflexible rule that questions of liability in tort be determined by the substantive law that would be applied if the matter were adjudicated in a court exercising the judicial power of the State in which the events occurred.

44. As s.118 requires the adoption of the above rule in relation to events occurring in a State, as a matter of uniformity the same rule should now be adopted as a common law rule in relation to events occurring in a Territory.

45. The adoption of a rule that tortious liability should be determined by the substantive law that would be applied if the matter were adjudicated in a court exercising the judicial power of the State or Territory in which the events occurred is not to give State and Territorial laws extra-territorial or extended effect. Section 118 does not require either such consequence, as is clear from the remarks of Barwick C.J. and Kitto J. in Anderson (at pp.25 and 33 respectively) and from the decision of this Court in Permanent Trustee Co. (Canberra) Ltd. v. Finlayson [1968] HCA 85; (1968) 122 CLR 338. Rather s.118 dictates a consequence to which State choice of law rules must conform. In so far as the law of a State or Territory is thus applied in another State or Territory this occurs not by reason of extended or extra-territorial operation of that State or Territory law, but by operation of the choice of law rule applicable in the State or Territory where the matter falls for adjudication.

46. It should be noted, although it is not necessary to so decide in the present case, that s.118 may have consequences for the two part actionability test, whether the test be stated as in Phillips v. Eyre or as reformulated by Lord Wilberforce in Chaplin v. Boys. It seems to us that, assuming proper invocation of jurisdiction, refusal to entertain a matter actionable in the State in which events happened but not actionable in the State in which action is brought, may constitute a refusal of full faith and credit to the laws of the State in which the events occurred.

47. Because s.118 has operation "throughout the Commonwealth" the choice of law rule for determining tortious liability, so far as it is dictated by s.118, must be given effect by courts exercising federal jurisdiction and by the courts of the Territories. Whether or not s.79 (or possibly s.80) of the Judiciary Act dictates the consequence that State choice of law rules are applied in matters of federal jurisdiction, neither section excludes the application of a rule that liability for tortious acts occurring in Australia shall be determined by the substantive law that would be applied if the matter fell for adjudication by a court exercising the judicial power of the State or Territory in which the events occurred. Indeed, it may be noted that in so far as the rule is dictated by s.118 of the Constitution, s.79 and s.80 of the Judiciary Act operate only "except as otherwise provided by the Constitution" (s.79) and "so far as ... not inconsistent with the Constitution" (s.80).

48. The constitutional requirement that full faith and credit be given throughout the Commonwealth is not in any sense a general curtailment of the legislative powers of the Commonwealth conferred by s.51 or of the power to legislate with respect to the Territories conferred by s.122 of the Constitution. The full faith and credit requirement is concerned only with the interrelationship of the laws, public Acts and records, and judicial proceedings of the States. Its operation in relation to State laws presupposes that a State law has not given way, by force of s.109 of the Constitution, to a Commonwealth law. Two issues are raised by s.118 in relation to the legislative power of the Commonwealth. The first is the extent of the power of the Commonwealth to legislate as to choice of law rules to be applied in Territory courts. The second is the power (assuming the power to exist) to legislate as to choice of law rules to be applied in matters falling for determination in the exercise of federal jurisdiction by reason only that they fall for determination in the exercise of that jurisdiction.

49. It remains necessary to consider s.56 of the Judiciary Act, notwithstanding that the adoption of a rule that tortious liability is to be determined by the substantive law that would be applied if the action were brought in a court exercising the judicial power of the State or Territory in which the events occurred otherwise entitles the respondents to have the present appeal dismissed.

50. Section 56 of the Judiciary Act has relevance to the present matter by reason of the identity of the third respondent, the Australian Telecommunications Commission. It is not disputed that the third respondent is "the Commonwealth" within the meaning of those words as used in s.75(iii) of the Constitution and s.56 of the Judiciary Act. See Inglis v. Commonwealth Trading Bank of Australia [1969] HCA 44; (1969) 119 CLR 334; Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362; Crouch v. Commissioner for Railways (Q.) [1985] HCA 69; (1985) 159 CLR 22; Attorney-General (N.S.W.) v. Commonwealth Savings Bank [1986] HCA 22; (1986) 160 CLR 315; Bolwell v. Australian Telecommunications Commission (1982) 61 FLR 154.

51. Section 56 of the Judiciary Act relevantly provides:

"(1)A person making a claim against the

Commonwealth, whether in contract or in tort,

may in respect of the claim bring a suit

against the Commonwealth

(a) in the High Court;

(b) if the claim arose in a State or

Territory - in the Supreme Court of that

State or Territory or in any other court

of competent jurisdiction of that State

or Territory; or

(c) if the claim did not arise in a State or

Territory - in the Supreme Court of any

State or Territory or in any other court

of competent jurisdiction of any State or

Territory."

52. As the claim made by the appellant arose in the Northern Territory, the question arises whether s.56 requires that the claim made against the third respondent be brought in this Court, the Supreme Court of the Northern Territory or other court of competent jurisdiction of the Northern Territory, to the exclusion of the Supreme Court of Victoria. It was submitted by the Solicitor-General for the Commonwealth that s.56, being permissive in its terms, does not preclude the exercise of jurisdiction by the Supreme Court of a State where, as here, there has been a submission to jurisdiction. For this proposition he relied on a passage in the judgment of Griffith C.J. in The Commonwealth v. Baume [1905] HCA 11; (1905) 2 CLR 405. His Honour there stated (at pp 412-413):

"It has always been held that a sovereign power

invoking the assistance of a Court of justice as

plaintiff submits itself to the jurisdiction of the

Court for the purposes of the suit, so that any

order that could be made against an ordinary

plaintiff may be made against it. ... On the other

hand, a Court of justice has no jurisdiction

against a sovereign power which does not subject

itself, or is not subjected by Statute, to its

jurisdiction. There can be no doubt that sec.56 of

the Judiciary Act 1903 operates as a submission by

the Commonwealth to the jurisdiction of the High

Court or a State Court in cases falling within the

section."

His Honour did not go on to consider what, if any, further effect was had by s.56. In particular his Honour did not consider whether only courts falling within s.56 have jurisdiction in actions against the Commonwealth in contract and in tort. Nor was it considered whether s.56 provides exhaustively as to the Commonwealth's submission to jurisdiction in actions against it in contract and in tort, thus excluding any power, deriving either from its sovereignty or from the Constitution, to submit to jurisdiction.

53. Various functions have from time to time been ascribed to s.56 of the Judiciary Act. It has been ascribed the function of impliedly directing the application of the substantive law of the State or Territory in which the claim arose in actions in which the Commonwealth is sued in tort or contract: Washington v. The Commonwealth (1939) 39 SR(NSW) 133, at p 143; Musgrave, per Dixon J. at pp 547-548; Suehle, at pp 355-356. If it has this function, it is in any event achieved by the adoption of the choice of law rule that tortious liability be determined by the substantive law that would be applied if the action were brought in a court exercising the judicial power of the State or Territory in which the events occurred.

54. Section 56 has also been said to render the Commonwealth liable to suit in contract and in tort. See, for example, Shaw Savill and Albion Co. Ltd. v. The Commonwealth [1940] HCA 40; (1940) 66 CLR 344, at pp 357-358. However, the decision in The Commonwealth v. Evans Deakin Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254 would seem to deny that function to s.56.

55. Additionally, s.56 has been seen as determinative of the courts invested with federal jurisdiction to entertain suits in contract and in tort brought against the Commonwealth. It appears to have been so seen in Johnstone v. The Commonwealth [1979] HCA 13; (1979) 143 CLR 398. In that case the question whether, pursuant to s.44 of the Judiciary Act, this Court was empowered to "remit an action against the Commonwealth to any Supreme Court of a State or whether, on the contrary, it may only remit the action to the Supreme Court of the State in which the cause of action arose" (at p.400) was referred for the opinion of the Full Court. The question so referred did not in terms raise as an issue whether the Supreme Courts of the States (other than a Supreme Court contemplated by s.56) were invested with jurisdiction in relation to matters in which the Commonwealth is a party, other than matters within the exclusive jurisdiction of this court: see s.39(2) and s.38(c) and (d) of the Judiciary Act. However, Gibbs J., with whom Aickin J. agreed, said (at p.401) that the question raised was whether s.44 enables "this Court, by a remitter order, to invest the court to which a matter is remitted with a jurisdiction which it did not previously possess". Their Honours held that it did. Similarly, Murphy J. (at p.407) held that "s.44 empowers this Court to remit the matter to any Supreme Court of a State or Territory whether or not that Supreme Court has jurisdiction independently to entertain the matter." In their dissenting judgments Stephen J. (at p.403) and Jacobs J. (at p.404) said respectively that s.56 of the Judiciary Act "conferred no such jurisdiction on the courts of any other State" and that "(t)he Supreme Court or other court of a State thus only has jurisdiction with respect to an action against the Commonwealth if that Court has been invested with that jurisdiction under s.56."

56. There is some difficulty in treating s.56 as investing jurisdiction in the courts of the States. It is s.39(2) of the Judiciary Act which performs this function. Section 39(2) appears not to have been separately considered in Johnstone.

57. Section 39(2) of the Judiciary Act relevantly provides:

"The several Courts of the States shall within the

limits of their several jurisdictions, whether such

limits are as to locality, subject-matter, or

otherwise, be invested with federal jurisdiction,

in all matters in which the High Court has original

jurisdiction or in which original jurisdiction can

be conferred upon it, except as provided in section

38 ...".

58. By s.75(iii) of the Constitution this Court has original jurisdiction in respect of all matters in which the Commonwealth or a person suing or being sued on its behalf is a party. By s.38(c) and (d) of the Judiciary Act, the jurisdiction of this Court is exclusive in suits as between the Commonwealth and a State (including persons suing or being sued in either behalf). As a matter of ordinary construction s.39(2), in our view, invests the Supreme Courts of the States with jurisdiction in matters to which the Commonwealth is a party (other than matters in which it is sued by a State or a person suing on behalf of a State) and thus includes jurisdiction in actions brought against the Commonwealth in contract and in tort regardless of the State in which the claim arose. The same view appears to have been accepted in Evans Deakin, it being said in the joint judgment (at p.264) that "(t)he Supreme Court is given jurisdiction to entertain a suit to which the Commonwealth is a party by the combined effect of s.39(2) of the Judiciary Act and s.75(iii) of the Constitution." See also Baume v. The Commonwealth [1906] HCA 92; (1906) 4 CLR 97, at p 102, where jurisdiction in an action in tort against the Commonwealth was said to have been invested by s.39(2).

59. Section 56 clearly impacts upon the jurisdiction invested by s.39(2) of the Judiciary Act. It may do so in either of two ways. It may divest the courts of the States of the jurisdiction invested by s.39(2) or it may curtail the invocation and exercise of that jurisdiction. It was that latter operation which was ascribed to s.56 by Windeyer J. in Suehle (at p.355):

"jurisdiction in such a cause is not exerciseable

by all courts which, anywhere in Australia, have

jurisdiction in actions arising out of 'foreign'

torts. The section states that a plaintiff who

sues the Commonwealth in contract or tort may do so

in this Court, or in the Supreme Court of the State

or Territory in which the claim arose, or (since

the amendment made in 1960) in any other court of

competent jurisdiction in that State or Territory.

These are the only courts in which an action can be

brought by a subject against the Commonwealth."

60. If s.56 divests the courts of the States of the jurisdiction invested by s.39(2) of the Judiciary Act the argument that the Supreme Court of Victoria has jurisdiction in consequence of submission by the Australian Telecommunications Commission must fail. That is so because the effect of s.39(1) of the Judiciary Act is to deprive State courts of the State jurisdiction they might otherwise have had in respect of the matters specified in s.75(iii) of the Constitution: Commissioners of Taxation (N.S.W.) v. Baxter [1907] HCA 76; (1907) 4 CLR 1087, at pp 1137-1138 and 1141-1143; Lorenzo v. Carey [1921] HCA 58; (1921) 29 CLR 243, at pp 250-251 and 254-255; The Commonwealth v. Limerick Steamship Co. Ltd. and Kidman [1924] HCA 50; [1924] HCA 50; (1924) 35 CLR 69, per Starke J. at p 119; Adams v. Cleeve [1935] HCA 12; (1935) 53 CLR 185, at p 190; Minister for Army v. Parbury Henty & Co. Pty. Ltd. [1945] HCA 52; (1945) 70 CLR 459, at p 481; Felton v. Mulligan [1971] HCA 39; (1971) 124 CLR 367, at pp 394 and 411-412. The only jurisdiction to which submission could be made is jurisdiction invested by s.39(2) which, ex hypothesi, no longer exists if s.56 operates as a divestiture thereof.

61. Notwithstanding the remarks in Johnstone, we are of the opinion that s.56 does not operate to divest jurisdiction invested in the courts of the States by s.39(2) of the Judiciary Act. The language of s.56 is not apt to serve that function. Moreover it is to be found in Part IX of the Judiciary Act which is entitled "Suits By and Against the Commonwealth and the States" whereas it is Part VI that, inter alia, defines the limits of the jurisdiction invested in the courts of the States. The two Parts represent the exercise of legislative power referable to different constitutional provisions. Part VI is referable to the power conferred by s.77 of the Constitution to make laws defining the jurisdiction of federal courts and investing the courts of the States with federal jurisdiction. So far as Part IX is concerned with proceedings against the Commonwealth and the States it is referable to the power conferred by s.78 of the Constitution, albeit that s.78 may not be the sole source of legislative power for all such provisions: see Evans Deakin, at p.263.

62. Notwithstanding that s.56 does not, in our view, effect a divestiture of the jurisdiction invested by s.39(2) of the Judiciary Act, it does not automatically follow that such jurisdiction is exercisable in the present case in consequence of submission thereto by the Australian Telecommunications Commission. Certainly s.56 is permissive in terms, but its permissive operation is only to enable a plaintiff to select as between this Court, the Supreme Court of the State or Territory in which the claim arose or another court of competent jurisdiction of that State or Territory. It thus limits the invocation and exercise of the jurisdiction invested by s.39(2) of the Judiciary Act. The fact that it limits the exercise of jurisdiction invested by s.39(2), rather than operates to divest such jurisdiction, means that a matter commenced other than in accordance with s.56 is not coram non judice. However, if a court disregards or fails to observe the conditions attaching to the exercise of jurisdiction, then the judgment or order, although not void, "may be set aside and avoided by proceedings by way of error, certiorari, or appeal": per Dixon J. in Parisienne Basket Shoes Pty. Ltd. v. Whyte [1938] HCA 7; (1938) 59 CLR 369, at p 389.

63. The setting aside or avoiding of proceedings brought in disregard of a condition attaching to the exercise of jurisdiction is, of course, subject to the condition not having been lawfully waived. Perhaps the position is more accurately described as an estoppel by election in the conduct of litigation, as is done in Spencer Bower and Turner, The Law Relating to Estoppel by Representation, 3rd ed. (1977). It is there stated (at pp.336-337):

"when a party litigant, being in a position to

object that the matter in difference is outside the

local, pecuniary, or other limits of jurisdiction of

the tribunal to which his adversary has resorted,

deliberately elects to waive the objection, and to

proceed to the end as if no such objection existed,

in the expectation of obtaining a decision in his

favour, he cannot be allowed, when this expectation

is not realized, to set up that the tribunal had no

jurisdiction over the cause or parties, except in

that class of case, already noticed, where the

allowance of the estoppel would result in a totally

new jurisdiction being created."

The relevant test is expressed in this work as that (at pp.144-145):

"where nothing more is involved than a mere

irregularity of procedure or (e.g.) non-compliance

with statutory conditions precedent to the validity

of a step in the litigation, of such a character

that, if one of the parties be allowed to waive the

defect, or to be estopped by conduct from setting

it up, no new jurisdiction is thereby impliedly

created and no existing jurisdiction impliedly

extended beyond its existing boundaries ...".

A similar distinction, expressed as a distinction between exceptions to jurisdiction and conditions attaching to the exercise of jurisdiction, is to be found in Troy v. Wrigglesworth [1919] HCA 31; (1919) 26 CLR 305, per Higgins J. at p 313.

64. It seems to us that s.56 operates to curtail the invocation and exercise of jurisdiction invested by s.39(2) of the Judiciary Act in the courts of a State by imposing as a statutory condition precedent to the institution of proceedings that the claim should have arisen in that State. The investiture of jurisdiction in the courts of the States in terms of s.39(2) of the Judiciary Act impliedly evinces an intention that, in a given case, the condition precedent may be waived by the Commonwealth or by such persons and instrumentalities as fall within the meaning of those words in s.75(iii) of the Constitution and s.56 of the Judiciary Act. Indeed it would be a strange situation if the Supreme Court of a State invested with relevant jurisdiction (other than one contemplated by s.56 of the Judiciary Act) might determine a matter commenced in this Court and remitted pursuant to s.44 of the Judiciary Act, but was precluded from determining the same matter in other circumstances, notwithstanding the assent of the Commonwealth.

65. The silence of the Australian Telecommunications Commission after the provisions of s.56 of the Judiciary Act were drawn to its attention in this Court must be taken as assent to the exercise of jurisdiction by the Supreme Court of Victoria in the present matter. That Court is accordingly properly seized of the matter.

66. The appeal should be dismissed.

BRENNAN J.: This is an appeal by a plaintiff against an interlocutory judgment in an action brought in the Supreme Court of Victoria against the three respondents as defendants. The plaintiff's statement of claim, endorsed on the writ, alleges that he suffered substantial injuries in a motor car collision which occurred in the Northern Territory on 11 July 1980. It is alleged that the accident was caused by the negligence of one or more of the defendants. He seeks damages under all the available common law heads and in particular for loss of earnings and earning capacity. Each of the defendants entered an unconditional appearance. Their respective defences allege that the plaintiff was a resident of the Northern Territory within the meaning of that term in s.4 of the Motor Accidents (Compensation) Act 1979 (N.T.) ("the Act") and that, except for damages for pain and suffering and loss of amenities of life, the plaintiff's claim was barred by s.5 of the Act. On 11 July 1980 that section read as follows:

" (1) Subject to sub-section (2), no action for

damages shall lie in the Territory in respect of

the death of or injury to a resident of the

Territory in or as a result of an accident that

occurred in the Territory.

(2) Subject to sub-section (3), nothing in

sub-section (1) deprives a person of the right to

bring an action for damages for pain and

suffering or loss of amenities of life.

(3) A person who has received or has elected

to receive a benefit under section 17 shall not

commence or continue an action referred to in

sub-section (2)."

By his reply, the plaintiff contends that s.5 has no application to the action or to the damages claimed. The points of law raised by the pleadings were set down for hearing before trial. O'Bryan J., holding that the law of Victoria as the lex fori applied to issues of substance as well as procedure, ordered that the paragraphs of the respective defences which raised ss.4 and 5 of the Act be struck out. On appeal, the Full Court (Young C.J., King and Beach JJ.), holding that the law of the Northern Territory as the lex loci delicti applied in the circumstances, set aside the judgment of O'Bryan J. and declared that the relevant paragraphs of the respective defences constituted in law a defence to the plaintiff's claim.

2. The common law has hitherto been thought to furnish the rules governing a plaintiff's right to sue in a State court for a tort allegedly done or committed in another part of the Commonwealth and the relevant rules have hitherto been thought to be the same as those which govern the right to sue for extraterritorial wrongs allegedly done or committed outside Australia: see, for example, Varawa v. Howard Smith Co.Ltd. [1911] HCA 46; (1911) 13 CLR 35, at p 69. Prior to federation, the legal systems of the Australian Colonies were independent one of another. The preservation of the Constitutions of the several States by s.106 of the Constitution ensured that, inter se, the mutual independence of the States was maintained except to the extent ("subject to this Constitution") that the Constitution affected their mutual independence or exposed that independence to affection by federal law. Therefore each State is "a distinct and separate country or 'law area'": Laurie v. Carroll [1958] HCA 4; (1958) 98 CLR 310, at p 331. Subject to the Constitution, the legislature of each "law area" is free to prescribe the rules to be followed by the courts of that area in resolving conflicts of laws affecting private rights. The Constitution contains no provision which expressly prescribes such rules, but it will be necessary to consider in due course the effect of s.118 of the Constitution and certain laws enacted by the Parliament (which I shall call collectively "federal measures"). However, the common law, which is the common foundation of the legal systems of every part of the Commonwealth, is the starting point for considering the effect of federal measures. The common law comes first and federal measures operate in and upon the legal order ordained by the common law. To the extent that federal measures affect the operation of the common law, but only to that extent, is there any difference between the principles applicable in respect of torts occurring within Australia and the principles applicable in respect of wrongs occurring outside Australia. (I use the term "wrongs" merely to encompass causes of action which a common law legal system would classify as torts but which may not be so described by the legal system of the place where the cause of action arose.) At the outset, then, the relevant principles of the common law must be stated.

3. In Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629 the majority (Dixon, Williams, Fullagar and Kitto JJ.), having regard to the then state of authority, expressed the common law principles in the form of two conditions (at p.642):

first, the wrong must be of such a character that

it would have been actionable if it had been

committed in the State in which the action is

brought; and secondly, it must not have been

justifiable by the law of the State where it was

done: ...

The language in which these conditions are

expressed is that of Willes J. in Phillips v.

Eyre ((1870) L.R. 6 Q.B.1, at pp.28,29)."

These were the conditions which had been applied as a general rule to determine the right to sue in England for wrongs committed abroad: see per Willes J. in Phillips v. Eyre, at p 28.

4. When Koop v. Bebb was decided, appeals to the Privy Council from Australian courts had not been abolished and English authority necessarily had greater force than it has now. Machado v. Fontes (1897) 2 QB 231 was then standing as authority for the propositions that the second of the Phillips v. Eyre conditions would be satisfied if the extraterritorial wrong was not innocent by the lex loci and that it sufficed that the wrong was proscribed by the local criminal law though no action would lie under the local civil law. Those were propositions which the majority judgment in Koop v. Bebb did not embrace though their Honours went no further than restating the principles in a tentative form (at p 643):

"In the judgment of Cussen J. in Varawa v. Howard

Smith Co.Ltd. (No.2) [1910] VicLawRp 84; ((1910) VLR 509) will be

found a critical analysis of (Machado v. Fontes)

and of the authorities which it purported to

apply. It seems clear that the last word has not

been said on the subject, and it may be the true

view that an act done in another country should

be held to be an actionable wrong in Victoria if,

first, it was of such a character that it would

have been actionable if it had been committed in

Victoria, and, secondly, it was such as to give

rise to a civil liability by the law of the place

where it was done. Such a rule would appear to

be consonant with all the English decisions

before Machado v. Fontes and with the later Privy

Council decisions."

5. In Chaplin v. Boys (1971) AC 356, Machado v. Fontes was overruled. The way was open to adopt the criterion of civil liability advanced in Koop v. Bebb. Lord Wilberforce cited the relevant passage in Koop v. Bebb and restated the second of the Phillips v. Eyre conditions adopting civil liability according to the lex loci as the criterion. He said (at p 389):

" The broad principle should surely be that a

person should not be permitted to claim in

England in respect of a matter for which civil

liability does not exist, or is excluded, under

the law of the place where the wrong was

committed. ... (I)n relation to claims for

personal injuries one may say that provisions of

the lex delicti, denying, or limiting, or

qualifying recovery of damages because of some

relationship of the defendant to the plaintiff,

or in respect of some interest of the plaintiff

(such as loss of consortium) or some head of

damage (such as pain and suffering) should be

given effect to. ... I would, therefore, restate

the basic rule of English law with regard to

foreign torts as requiring actionability as a

tort according to English law, subject to the

condition that civil liability in respect of the

relevant claim exists as between the actual

parties under the law of the foreign country

where the act was done."

Lord Wilberforce's restatement does not accept that any kind of "civil liability" is sufficient to satisfy the second condition; the lex loci must give rise to "civil liability in respect of the relevant claim". The restatement focusses on the particular claim which the plaintiff is making, not on a category of civil liability. The second condition is satisfied only if the circumstances which are relied on to support the particular claim would have given rise to a liability of the same kind in the place where the wrong occurred.

6. The right to sue in the forum does not necessarily arise whenever civil liability exists according to the lex loci. The first of the Phillips v. Eyre conditions must also be satisfied. That condition - that the wrong be actionable by the lex fori - was considered in Anderson v. Eric Anderson Radio & T.V. Pty.Ltd. [1965] HCA 61; (1965) 114 CLR 20. An action was brought in New South Wales for damages for negligence committed in the Australian Capital Territory. At that time the law of New South Wales denied that negligence was actionable if the plaintiff was guilty of contributory negligence; the law of the Australian Capital Territory allowed damages proportionate to the defendant's responsibility. Windeyer J. expounded the first condition thus (at p.41):

"I take it to mean that the acts that a plaintiff

alleges were done must be such that had they been

done in the country of the forum ... they would

have given him a good cause of action there

against the defendant according to the lex fori".

The first condition could not be satisfied in Anderson and the plaintiff failed. The first condition also focusses on the particular claim which the plaintiff makes. The first condition is satisfied only if the circumstances which are relied on to support the particular claim would have given rise to a liability of the kind claimed if the circumstances had occurred in the territory of the forum.

7. The two conditions are not merely the criteria of the forum's jurisdiction; they state the substantive law which governs a plaintiff's right to recover a judgment in respect of an extraterritorial wrong. The two conditions govern both the existence of the forum's jurisdiction and its exercise. They are part of the lex fori. In Koop v. Bebb, after rejecting the theory espoused by Holmes J. (speaking for the Court in Slater v. Mexican National Railroad Co. [1904] USSC 100; (1904) 194 US 120) that the lex loci is the source of the extraterritorial wrongdoer's obligation, the majority said (at p.644):

"English law as the lex fori enforces an

obligation of its own creation in respect of an

act done in another country which would be a tort

if done in England, but refrains from doing so

unless the act has a particular character

according to the lex loci actus."

And in Chaplin v. Boys, Lord Wilberforce said (at p 385):

"I accept what I believe to be the orthodox

judicial view that the first part of the rule is

laying down, not a test of jurisdiction, but what

we now call a rule of choice of law: is saying,

in effect, that actions on foreign torts are

brought in English courts in accordance with

English law. I would be satisfied to rest this

conclusion on the words of the rule itself 'if

done (committed) in England' which seem clear

enough to exclude the 'jurisdiction' theory".

The forum must determine its jurisdiction and the law to be applied in exercising its jurisdiction according to the lex fori. There is no other system of law to which these basic questions can be referred. The two Phillips v. Eyre conditions are applied as part of the lex fori. Then, the lex fori being the governing law, the second of the Phillips v. Eyre conditions requires reference to the lex loci in order to determine whether that condition is satisfied. That was the view adopted by this Court in Anderson, at pp.24,30-31,37,39,42.

8. The two common law conditions have been developed in the cases referred to and they should now be restated in appropriate terms to reflect that development. It will be necessary presently to mention a qualification of the common law conditions proposed by Lord Wilberforce in Chaplin v. Boys. But, for the moment, it is sufficient to restate the conditions in the following terms:



A plaintiff may sue in the forum to enforce a liability in respect of a wrong occurring outside the territory of the forum if -

1. the claim arises out of circumstances of such a

character that, if they had occurred within the

territory of the forum, a cause of action would

have arisen entitling the plaintiff to enforce

against the defendant a civil liability of the kind

which the plaintiff claims to enforce; and

2. by the law of the place in which the wrong

occurred, the circumstances of the occurrence gave

rise to a civil liability of the kind which the

plaintiff claims to enforce.

9. This restatement is narrower in expression than the traditional formulation of the Phillips v. Eyre conditions which speak of "a character that ... would have been actionable" and "justifiable". It defines more precisely the issues which are referred for determination to the lex fori and the lex loci respectively. The common law conditions accord to the government of the place of the wrong the authority to prescribe what shall be the kind of civil liability arising on the occurrence of the wrong (cf. per Diplock L.J. in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No.2) (1965) Ch 596, at p 656) but reserve to the lex fori the function of determining whether the kind of civil liability to which the lex loci gives rise is enforceable in the forum: Anderson and The "Halley" (1868) L.R. 2 P.C.193, at pp.202,204. If the lex loci denies any civil liability (as in Phillips v. Eyre), none arises under the lex fori.

10. Far from disturbing the Australian federation, the common law rules applicable in respect of extraterritorial wrongs appropriately reflect the mutual legal independence of the several Australian States and Territories. They accord to the law of the State or Territory where the alleged tort occurred the authority to define the kind of civil liability imposed on the tortfeasor, and reserve to the law of the State or Territory in which the action is brought the function of determining whether the kind of civil liability imposed on the tortfeasor by the lex loci is enforceable in the local courts. If the legislatures of the several States and Territories had not enacted laws affecting these topics the two conditions of Phillips v. Eyre would have had little work to do for the uniformity of the common law would have ensured that, wherever the tort was committed and wherever the action was brought, the lex fori and the lex loci would determine in precisely the same way the question whether civil liability exists and the nature of it. But the common law has been changed by the statutes of the several States and Territories and therefore the practical importance of the two conditions is that they allocate the areas in which the statute law of the respective States and Territories should prevail in the resolution of a particular case.

11. By attributing to the statutes of the lex fori a power to regulate what kinds of civil liability arising under the lex loci are enforceable in the forum, the common law opens the way to the possibility that some torts occurring in one part of Australia will not give rise to a civil liability in some other part or parts of Australia. That circumstance may suggest that the common law operates unsatisfactorily and that the two conditions should be modified so as to ensure that a tortious liability arising under the law of the part of Australia in which the tort occurs can be litigated in the courts of any other part of Australia. By eliminating the first condition, the kind of liability defined by the lex loci would be uniformly enforceable by courts in every part of Australia. Some may think this desirable, others not. But whatever view be held as to the desirability of changing the common law, a change in the common law cannot abrogate the authority of the legislature of a State or Territory over the law to be applied by the courts of that State or Territory. Subject to any federal measure, the legislature of any State or Territory may alter the common law which governs the enforcement in the courts of that State or Territory of liability for extraterritorial wrongs. No change in the common law could be effective which would require a forum to grant relief inconsistent with the statute law binding upon it. A court which is bound by a statute of the forum legislature not to award damages for injuries caused by a motor car accident cannot apply a contrary common law rule. If the lex loci alone is to determine the enforceability of liability for extraterritorial torts occurring within Australia, that must be by force of the federal measures presently to be mentioned.

12. Before considering the federal measures, the problem addressed by Lord Wilberforce in Chaplin v. Boys should be mentioned. It was, in a sense, the converse of the problem of uniform enforceability. The case concerned the right to damages in an English court for personal injury caused by a motor car accident in Malta. The law of Malta - like the law of the Northern Territory in this case - severely restricted the heads of damage which might be awarded to a successful plaintiff. His Lordship was concerned lest the lex loci might preclude a claim for relief which in justice English law would think it right to allow. His Lordship therefore proposed a qualification upon the common law conditions which would authorize an English court in certain circumstances to recognize and enforce a civil liability of a kind to which the lex loci does not give rise. He reserved to an English court, acting without legislative authority, a power to qualify the application of the general rule in order to avoid injustice in particular cases. He said (at p.391):

"There must remain great virtue in a general

well-understood rule covering the majority of

normal cases provided that it can be made

flexible enough to take account of the varying

interests and considerations of policy which may

arise when one or more foreign elements are

present." (Emphasis added.)

His Lordship's qualification of flexibility, drawing on American precedents, would authorize an English court to grant relief where the foreign State whose law, being the lex loci, would refuse relief has no interest in applying that law to defeat the claim made between the parties in the English court under English law. His Lordship's proposal was to extend the operation of the lex fori and to grant relief though the second of the Phillips v. Eyre conditions was not satisfied. In other words, a tortious liability would sometimes be created by the lex fori though no civil liability of the relevant kind arose under the law of the place where the material circumstances occurred. Such a 1 development would not be conducive to uniform enforceability of liability for torts occurring within Australia. And in principle, it is difficult to accept that mere judicial declaration can create a common law liability in tort arising from extraterritorial events where none has hitherto existed. Moreover, Lord Wilberforce's flexible qualification necessarily imports uncertainty in the application of ordinary common law principles. The principles, as restated, are certain in their operation and litigants have the advantage of knowing whether their claims may be pursued on the merits in a particular forum. The law should provide no incentive to forum shopping or to litigation in which the assessment of a foreign country's interest in the application of its laws to the case in hand - a difficult issue to determine - may be the issue on which success depends. No doubt the disadvantage of uncertainty must be weighed against the desirability of flexibility to do justice in particular cases. Judge Cardozo, writing in The Growth of the Law (1924), p.83, wrote:

"The apportionment of the relative value of

certainty on the one side and justice on the

other, of adherence to logic and advancement of

utility, involves an appraisement of the social

interest which each is capable of promoting."

In another context (The Paradoxes of Legal Science, (1928), p.67) Judge Cardozo said of "one of the most baffling subjects of legal science, the so-called Conflict of Law":

"We deal there with the application of law in

space. The walls of the compartments must be

firm, the lines of demarcation plain, or there

will be overlappings and encroachments with

incongruities and clashes. In such

circumstances, the finality of the rule is in

itself a jural end." (Cited by Judge Robert H.

Jackson, "Full Faith and Credit - The Lawyer's

Clause of the Constitution" (1945) 45 Columbia

Law Review 1, at p.25.)

I respectfully agree. There is no warrant in the decisions of this Court to restate the common law so as to extend or to reduce the function of the lex fori. I perceive no reason to regard the common law principles, restated in the above terms, as inapplicable in the Australian context. Nor do I perceive any utility in judicial amendment of the common law principles in an attempt to circumvent statutory provisions affecting local liability in tort or affecting the kind of liability for extraterritorial torts which local courts may enforce. If the operation of the common law principles has been, or is to be, modified, the modification must be found in federal measures.

13. The first of the federal measures is s.118 of the Constitution which reads:

" Full faith and credit shall be given,

throughout the Commonwealth to the laws, the

public Acts and records, and the judicial

proceedings of every State."

The terms of s.118 are partially reproduced in s.18 of the State and Territorial Laws and Records Recognition Act 1901 (Cth) ("the Recognition Act") enacted pursuant to s.51(xxv) of the Constitution which confers on the Parliament power to make laws with respect to -

"The recognition throughout the Commonwealth of

the laws, the public Acts and records, and the

judicial proceedings of the States".

Section 18 of the Recognition Act reads:

" All public acts records and judicial

proceedings of any State or Territory, if proved

or authenticated as required by this Act, shall

have such faith and credit given to them in every

Court and public office as they have by law or

usage in the Courts and public offices of the

State or Territory from whence they are taken."

Section 118 of the Constitution and s.18 of the Recognition Act both require the giving of "faith and credit", but s.118 "has no application to the laws and public Acts of a Territory": per Kitto J. in Anderson, at p.31. Does s.18 apply to the laws and public Acts of a Territory? It is expressed to relate to "public acts records and judicial proceedings" although the power under which it is enacted (s.51(xxv)) refers to "laws ... public Acts and records, and ... judicial proceedings". The same concatenation of subjects appears in s.118. The omission from s.18 of any reference to "laws" and the use of the lower case in "public acts" suggest that s.18 does not relate to the statute and other law of States and Territories, and that suggestion is strengthened by s.3 of the Recognition Act which provides for judicial notice to be taken of "State Acts". The suggestion runs counter, however, to the view expressed in the United States that a statute is a "public act" within the meaning of the full faith and credit clause of the Constitution of the United States: Bradford Electric Co. v. Clapper [1932] USSC 91; (1932) 286 US 145, at p 155. But the United States Constitution refers to "public Acts, Records and judicial Proceedings" of the States and omits reference to "laws". In ss.51(xxv) and 118 of the Constitution of the Commonwealth, "laws" clearly embraces statute laws. The omission of "laws" from s.18 thus has a significance which it would not have if our Constitution had been framed in the precise terms of the American model. It may be that the reference to "laws" was inserted in our Constitution to embrace Imperial laws having local application and laws enacted by the Federal Council of Australasia. Even if this be so, the omission of "laws" from s.18 seems to deny its application to statutes enacted by either state or territorial legislatures. The purpose of s.18 seems to be to require that faith and credit be given throughout the Commonwealth to the public acts, etc. of a State or Territory which ordinarily have to be proved in their place of origin before faith and credit are given to them and to prescribe that the same faith and credit be given under the Act as would be accorded upon proof in their place of origin. Section 18 relates to public acts, etc. only "if proved or authenticated as required by this Act" and the Recognition Act makes no provision for proof or authentication of statutes enacted by state or territorial legislatures.

14. Section 18 would be otiose if it applied to State Acts for the faith and credit to be given to them is prescribed by s.118 of the Constitution. Nor does s.18 need to provide for the giving of faith and credit to statutes enacted by the legislature of a Territory. The laws of a Territory are, or are necessarily supported by, laws enacted by the Parliament in exercise of the powers conferred by the Constitution (whether s.122 or some other provision). By covering cl.5 in the Commonwealth of Australia Constitution Act, laws so enacted are binding on the courts, judges and people of every State and of every part of the Commonwealth. Therefore the faith and credit which must be given to an Ordinance or to a Territory Act is a function of the laws of the Commonwealth under which it was made. If "faith and credit" were required by s.18 to be given to the laws of a Territory, what additional force would those laws acquire? In Anderson, Kitto J. said (at p.33):

"whatever may constitute giving faith and credit

to the laws of the Territory, it is faith and

credit to those laws as they stand, not as

notionally altered; and a requirement that a New

South Wales court shall treat s.15 of the

Ordinance (of the Australian Capital Territory)

as binding upon it can mean no more than that the

Court shall look to s.15 as it stands whenever a

necessity arises to know what is the law of the

Territory for the class of cases with which it

deals."

"Faith and credit" of that kind must be given to a law of a Territory either because it is a law of the Commonwealth (Spratt v. Hermes [1965] HCA 66; (1965) 114 CLR 226) or is made under a law of the Commonwealth. Section 18 can add nothing to the force which the laws of a Territory otherwise have.

15. The giving of faith and credit to a law of another State or Territory does not alter the law of the forum State or Territory: Permanent Trustee Co. (Canberra) Ltd. v. Finlayson [1968] HCA 85; (1968) 122 CLR 338, at p 343. When the forum refers to the laws of another State or Territory as the lex loci and gives faith and credit to them, there is no change in the lex fori which the forum is bound to apply. True it is that the forum, in referring to the laws of another State as the lex loci, has no discretion to disregard the laws of the other State merely because they are inconsistent with the lex fori or with the policy of the lex fori (Merwin Pastoral Co. Pty.Ltd. v. Moolpa Pastoral Co.Pty.Ltd. [1933] HCA 31; (1933) 48 CLR 565) but the giving of faith and credit to the laws of the other State does not otherwise affect the substantive law which the forum applies in determining whether a plaintiff's claim succeeds.

16. It would severely qualify the mutual legislative independence of the States to attribute to s.118 the effect of compelling the courts of a State to give relief in circumstances which would give rise to no cause of action by the laws of that State or which may even amount to an offence against the laws of that State. Equally it would severely qualify the mutual legislative independence of the States to attribute to s.118 the effect of permitting relief to be given in another State in respect of circumstances occurring in a State the laws of which deny any cause of action arising from those circumstances or even create an offence constituted by those circumstances. If s.118 were to have one or other of these effects, which effect should prevail? Should the lex fori defer to the lex loci, or vice versa? In truth the words of s.118 do not require either of these effects to be attributed to them. The attribution of either effect would be a source of tension as between the legislature of the forum State (whose authority over the law to be applied by its courts would be in question) and the legislature of the State in which the tort occurred (whose authority to prescribe the legal consequences of occurrences within its territory would be in question). The words of s.118 should not be construed as giving rise to conflicts between the authority of the legislature of one State and the legislature of another - conflicts which are inimical to the high purpose of a national Constitution - unless the words of s.118 compel a contrary interpretation. And they do not. No consideration of juridical tidiness warrants such an interpretation. A fortiori, no such interpretation should be attributed to s.18.

17. In this case, s.5 of the Act denies civil liability in respect of injury to a resident of the Northern Territory as a result of an accident which occurred in the Territory other than liability for damages for pain and suffering and loss of amenities of life. The claim made by the plaintiff for damages under other heads is not a claim which, if the relevant paragraphs of the defence are made out, satisfies the second of the Phillips v. Eyre conditions.

18. Next, it is necessary to consider whether the making of a claim against the Australian Telecommunications Commission as one of the defendants has any relevant effect on the resolution of this appeal. The Commission is a corporation created by the Telecommunications Act 1975 (Cth) and it may be sued in its corporate name: s.21(1)(d). The Commission is also "the Commonwealth" for the purposes of s.56 of the Judiciary Act 1903 (Cth). Although the Telecommunications Act does not require that a suit against the corporation be brought in a particular court, s.56 of the Judiciary Act provides, inter alia, that a person making a claim against the Commonwealth which arose in a Territory "may in respect of the claim bring a suit against the Commonwealth -

(a) in the High Court;

(b) ... in the Supreme Court of that ... Territory or

in any other court of competent jurisdiction of

that ... Territory;"

In the light of these provisions, can the Supreme Court of Victoria, not being the court of the relevant Territory, entertain the action? And if it has the necessary jurisdiction to entertain the action, do the provisions of the Judiciary Act affect the choice of law principles which the court would otherwise apply?

19. It is not necessary to consider again in this case the vexed question whether s.56 is the source of the Commonwealth's exposure to tortious liability: see The Commonwealth v. Evans Deakin Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254. But if s.56 is the source of the Commission's liability in tort, that liability is not contingent on the commencement of proceedings in a court specified by s.56 of the Judiciary Act, nor is it a liability enforceable only in a specified court. Section 56 is facultative; it authorizes a plaintiff to make his claim in any of the courts therein specified and thus subjects the Commonwealth to the jurisdiction of those courts without its consent. But that is not to say that the Commonwealth's liability cannot be enforced in another court to the jurisdiction of which the Commonwealth chooses to submit. Section 56 is not the source of the jurisdiction to entertain an action brought against the Commonwealth. Jurisdiction to entertain such an action is conferred on State courts by the general grant of jurisdiction contained in s.39(2) of the Judiciary Act. If a plaintiff seeks to enforce the Commonwealth's liability in a court (not being a s.56 court) on which jurisdiction is conferred by s.39(2) and the Commonwealth submits to that jurisdiction (as it has done in this case), there is no inhibition against that court exercising its jurisdiction to hear and determine the claim.

20. If the action is brought in this Court pursuant to s.56(1)(a) of the Judiciary Act, the kind of liability to which the Commonwealth is subject is determined by the law of the relevant Territory for that becomes the lex fori for the purpose of the action: Suehle v. The Commonwealth [1967] HCA 13; (1967) 116 CLR 353. If the action is brought in the court of the appropriate Territory pursuant to s.56(1)(b), that court will, of course, apply the law of that Territory. And if the action is brought in a court on which jurisdiction is conferred only by s.39(2) of the Judiciary Act, and the Commonwealth submits to the jurisdiction of that court, that court will adopt the same choice of law principles as it adopts in actions between subjects: see s.79 of the Judiciary Act. No exception is made to that rule in an action in which the Commonwealth is a party: s.64 of the Judiciary Act.

21. In the present case, therefore, the Supreme Court of Victoria was bound to apply the Victorian choice of law rules. The common law principles were the relevant Victorian rules. According to those rules, the Court was bound to refer to the law of the Territory in which the tort occurred in order to determine whether the second of the Phillips v. Eyre conditions was satisfied. There is no conflict between the laws of Victoria to be applied in determining the kind of liability to which the Commission is subject and the kind of liability to which the first defendant (a natural person) is subject and any federal law. It is necessary to refer to the laws of the Northern Territory to determine whether the defendants' liability is of a kind which existed under those laws. The Full Court was therefore right to hold that the paragraphs which raise ss.4 and 5 of the Act constitute in law a defence. That is sufficient to determine the present appeal. However, the argument on the appeal extended beyond the issues which have been canvassed above and it is desirable to mention the problem of quantifying damages which is a source of apparent anomaly in the application of the common law principles to extraterritorial torts occurring within Australia.

22. The problem arises because the lex fori not the lex loci governs the quantification of damages: Chaplin v. Boys, at pp 378,381-382,393. A State or Territory law may prescribe a mode of quantifying damages different from that which would otherwise apply; for example, by prescribing a different discount rate from the 3 per cent adopted in Todorovic v. Waller [1981] HCA 72; (1981) 150 CLR 402. Thus s.5 of the Common Law Practice Act 1867-1981 (Q.) prescribes a discount rate of 5 per cent. An anomaly is thus created, for the measure of damages (not the kind of civil liability) may vary according to a plaintiff's choice of forum, although there is but one cause of action. That cause of action merges in the judgment first obtained whatever be the forum, and that judgment may be registered under Pt IV of the Service and Execution of Process Act 1901 (Cth) in a court of any other part of Australia with the force and effect of a judgment of that court. The anomaly is manifest if a forum enters a judgment for damages quantified as the lex fori prescribes and that judgment is registered in a court of the State or Territory in which the tort occurred where the local law prescribes a different basis of quantification. In such a case, the law relating to quantification of damages of the State or Territory in which the tort occurred is outflanked by a judgment registered in a court of that State or Territory pursuant to Pt IV of the Service and Execution of Process Act. In Robinson v. Shirley [1982] HCA 1; (1982) 149 CLR 132 and in Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38, the anomaly was avoided by remitting actions commenced in this Court to the Supreme Court of the place where the tort had been allegedly committed. By such an order - authorized by s.44 of the Judiciary Act - the possibility of conflict between the lex fori and the lex loci as to quantification of damage was eliminated. In Suehle v. The Commonwealth, where an action in tort was brought in this Court, Windeyer J. found in s.56 of the Judiciary Act a legislative direction that, if the action be tried here, it be tried according to the lex loci, that system of law becoming the lex fori for the purpose of the trial; see pp.355-356. Except in the special cases to which ss.44 and 56 of the Judiciary Act apply, there is no express statutory provision which might avoid the anomaly when an action is brought in a court of one part of the Commonwealth in respect of a tort occurring in another part. It may be that, on its true construction, Pt IV of the Service and Execution of Process Act has created a regime which requires uniformity in the quantification of damages by any Australian forum which recognizes a liability arising from an extraterritorial tort occurring within Australia. If that be so, then state or territorial laws prescribing a mode of quantifying damages different from that prescribed by the lex loci would be inapplicable to an assessment of damages for an extraterritorial tort occurring within Australia. That consequence would be achieved by the operation of Pt IV as the dominant law; it cannot be achieved by a judicial amendment of the common law. The legislative authority of the States and Territories to prescribe the law to be applied by their own courts in the quantification of damages can be superseded only by a law of the Commonwealth which prevails by force of s.109 of the Constitution. Part IV may be such a law but it is unnecessary now to decide that question.

23. In this case, no question of quantification of damages has arisen. This case turns on whether the kind of civil liability claimed is a kind admitted by the law of the Northern Territory. The answer to that question depends on the findings to be made on the issues raised by the paragraphs which depend on ss.4 and 5 of the Act. As those paragraphs allege a good, though partial, defence, the appeal must be dismissed.

DEANE J.: The provisions of the Constitution must be construed in the general context that, while the Federation was intended to preserve the existence of the former Colonies as States, the compact between the people of those Colonies was to unite in one indissoluble Commonwealth under a new system of law to which all within its territory ("courts, judges, and people of every State and of every part": covering cl.5 of the Constitution of Australia Act 1901 (Cth)) were thenceforth to be subject. The compact itself was that new system of law, incorporating by assumption the substratum of the common law upon which it was built. Under it, the constitutions and the laws (both inherited and statutory) of the States continued to the extent to which the Constitution and valid Commonwealth laws enacted pursuant to it allowed (see, in particular, ss.106, 107 and 108). To that extent, the constitutions and the laws of the States were not diminished. They were enhanced as part of a new national structure.

2. It is in that context that an important question which lies at the threshold of the present appeal falls to be determined. That question, stated in deceptively simple terms which require definition, is whether the Commonwealth and State constitutions and laws comprise a unitary system of law. By "a unitary system of law", I mean a comprehensive legal system in which the substantive law applicable to govern particular facts or circumstances is objectively ascertainable or predictable and internally consistent or reconcilable. It is not essential - notwithstanding that it may be conducive - to such unity that there be no division of jurisdiction between different courts or that the procedures and procedural rules of all courts should precisely correspond. Nor is it essential that identical rules regulate conduct, property or status and define its consequences or attributes regardless of where in the jurisdictional territory it may occur or exist: a single system of law may well incorporate State or other local rules applying to persons, acts and things within the relevant State or other locality. What is essential is that the substantive rule or rules applicable to determine the lawfulness and the legal consequences or attributes of conduct, property or status at a particular time in a particular part of the national territory will be the same regardless of whereabouts in that territory questions concerning those matters or their legal consequences may arise. In a Federation such as Australia where there are a number of legislatures and a number of distinct court systems, such unity cannot exist unless the legal principles for determining legislative competence and for resolving conflicts between different laws in a particular case will operate with identical results in any of the different court systems. For practical purposes, such unity is unlikely to exist unless there is some final appellate tribunal with jurisdiction to entertain appeals from all of the distinct court systems in relation to each class of dispute.

3. When, in the context mentioned in the first paragraph of this judgment, one turns to consider the general nature and particular aspects of the Constitution, it appears to me to be manifest that the comprehensive system of law which the Constitution established was intended to be a unitary one in the above sense. The fundamental provisions of that system of law were the terms of the Constitution itself. The purpose of those fundamental provisions was to federate the former Colonies into a single nation. They subjected Colonial legislative powers and Colonial laws, which they continued and incorporated as State legislative powers and State laws, completely to their terms, including their specified procedures for amendment (s.128). It is reasonable to infer that it was intended that valid Commonwealth and State substantive laws, made or continued under the authority of the federal compact, would be integrated in the sense that they were internally consistent or reconcilable. The inference of such an intention to create a unitary system is confirmed by other aspects of the Constitution. In the following five paragraphs, I identify what seem to me to be the more important of those other aspects.

4. The first is to be found in the provisions of the Constitution conferring original jurisdiction upon the Court and providing for the vesting of such "federal" jurisdiction in other federal courts or in "any court of a State" (see, e.g., ss.75, 76 and 77). In particular, the original jurisdiction conferred by s.75(iv) in "all matters ... between residents of different States" is unlimited as to types of dispute and assumes the existence of a national law, with Commonwealth and State ingredients, which can be ascertained and applied by a court whose territorial jurisdiction extends indifferently to all parts of the Commonwealth. The intention that competing State laws be subsumed and reconciled in the new system of national law is also apparent from the content of other provisions creating "federal" jurisdiction (see, e.g., s.76(iv): "any matter - Relating to the same subject-matter claimed under the laws of different States").

5. The next of those aspects lies in the fact that a jurisprudential basis of the Constitution, implicit in the notion of separation of judicial power from legislative and executive powers which represented a United States innovation in traditional British constitutional theory, is an assumption of the independent existence of laws by reference to which the lawfulness of particular conduct can, subject only to the extraordinary effect of retrospective legislation, be objectively and contemporaneously ascertained (see Kelsen, General Theory of Law and State (1945) at p.49; also note the discussion in the recent article by Professor Dane, "Vested Rights, 'Vestedness,' and Choice of Law", Yale Law Journal, vol.96 (1987), 1191). The laws made by the Parliament and administered by the Executive exist independently of the awakening of judicial power. The substantive content of those federal laws cannot depend upon the identity of the particular court whose federal jurisdiction is invoked to resolve a particular dispute. It would not have been the intention of the framers of the Constitution that the laws of the States which the Constitution continued and the laws made pursuant to similarly continued State legislative powers should be of a different nature to federal laws in the sense that, notwithstanding their identity as part of the national system of law to be applied by this and other non-State courts in the exercise of federal jurisdiction, their content should be indefinite unless and until it was known in which of the distinct court systems proceedings in respect of a particular dispute would be brought.

6. Thirdly, there is the point made by Sir Owen Dixon to a United States audience to explain and support the proposition that Australia has a national system of law which is properly to be regarded as "a unit" or "a single legal system". That is that there is a uniform body of inherited law (i.e. the common law) which runs throughout the nation at all levels, both Commonwealth and State (see Sir Owen Dixon, Jesting Pilate, "Sources of Legal Authority", (1965) at pp.198-202). The strength of that point is not diminished by seeing the compact between the Australian people, rather than the past authority of the United Kingdom Parliament under the common law, as offering a more acceptable contemporary explanation of the authority of the basic law of the Constitution. Regardless of whether the common law is seen as providing a source of constitutional authority or as having been incorporated in the legal system which the Constitution established, its pervading influence at all levels of the national system is a powerful justification of the perception of that system as a unitary one in the sense that I have explained.

7. Fourthly, there lies at the heart of the legal system embodied in the Constitution acceptance of the principle that an individual should not be exposed to the injustice of being subjected to the requirements of contemporaneously valid but inconsistent laws (cf. University of Wollongong v. Metwally [1984] HCA 74; (1984) 158 CLR 447, at pp 467, 476-477). That principle "operates at federal and State levels and whatever the source of law (constitutional, legislative, delegated legislative or decisional (common) law). If these laws would produce an inconsistency, then one (of them) prevails ..." (per Murphy J., ibid., at p.467). Section 109 of the Constitution assumes that, under the Federation, Commonwealth and State laws would be objectively ascertainable and would operate on the same plane as part of the one national system. It eliminates inconsistency between them by operating directly to ensure the supremacy of federal law and the invalidity of State law in any case of conflict between their respective demands.

8. Finally, there is the jurisdiction of the Court, as a "final and conclusive" appellate tribunal, to hear and determine appeals from both State and federal courts (s.73). The conferral of that general appellate jurisdiction imposed an ultimate unity upon the distinct court systems. More important, as Sir Owen Dixon pointed out (ibid., at p.201), the general appellate jurisdiction of the Court expresses "an instinctive faith in the unity of the system (of law) and in the consequent need of uniform interpretations".

9. The aspects of the Constitution which confirm the intention of its framers to create a unitary national legal system were, subject to one possible qualification (see below), also effective to translate the intention into the reality. The assumption by the Constitution of its sub-stratum of the common law ensured that the corpus of the new national law had a single basis of inherited law at all levels, Commonwealth and State. The creation of national jurisdiction involving the application of the new national law, with its Commonwealth and State components, by non-State courts and the provision for the conferral of federal jurisdiction upon State courts provided the mechanism for the administration of the new national law as a single unit. The conferral of general and final appellate jurisdiction upon this Court imposed an ultimate unity upon the various court systems entrusted with the administration of justice under the new national law. The provisions of s.109 of the Constitution ensured coherence between Commonwealth and State laws operating within the national system by invalidating inconsistent State laws to the extent of the inconsistency. The qualification which should possibly be made to the statement that the intention to establish a unitary national system of law was fulfilled relates to competition or inconsistency between the laws of two or more States. It is to a consideration of that possible qualification that I now turn.

10. The equality of the States under the Constitution precluded the inclusion within it of any general supremacy clause of the kind adopted in s.109 for resolving, within the new national system of laws, competition or inconsistency between the laws of different States. One possible method of resolving such competition or inconsistency is by the direct application of the principles of the common law defining the circumstances in which a common law court will hear and determine an action involving foreign or international elements and identifying the law - local, foreign or an amalgam of the two - to be applied in determining such an action. So to apply private international law principles to resolve competition or inconsistency between the laws of the Australian States seems to me, however, to be objectionable on three overlapping grounds. It ignores the significance of the federation of the former Colonies into one nation. It frustrates the manifest intention of the Constitution to create a unitary national system of law. It discounts the completeness of the Constitution which, by the national legal structure which it establishes and by its own provisions, itself either precludes or provides the means of resolving competition and inconsistency between the laws of different States. I turn to the justification of those broad assertions.

11. The private international law rules which have been accepted by the common law have been largely developed as appropriate to resolve questions of actionability and choice of law in cases involving an international element or competition between the law of the forum and the law of another country. Even in that context, there is much to be said for the view that, in some areas, they show undue preference for the substantive law of the forum (see, e.g., Dicey & Morris, The Conflict of Laws, 11th ed. (1987), at pp.1361-1362). Be that as it may, the emphasis upon the substantive law of the forum which those private international law rules show in some areas is "incongruous and unsatisfactory" in the rules for defining the lawfulness and consequences, under a national system of law such as that which the Constitution sought to establish in this country, of acts done not outside, but within, the national territory (cf. per Jacobs J., Anderson v. Eric Anderson Radio and T.V. (1964) 65 SR (NSW) 279, at p 288). More important, the direct intrusion of the private international law rules of the common law to resolve potential competition between State laws within the national system of law of this country would effectively preclude the existence of a unitary national legal system at least in those cases where those rules superimpose the law of the forum as the substantive law to govern or control the lawfulness or consequences of conduct outside the territory of the forum. Both points can be illustrated by reference to the private international law rules applicable to an action of the type with which the present case is concerned, namely, a claim for damages for personal injury caused by the negligent act of another.

12. If an action were brought in this Court (e.g. under s.75(iv)) for damages sustained by the plaintiff in a State and caused by the negligent act of the defendant in that State, there would be no room for the direct application of private international law rules. The territory of this Court is the nation and the events giving rise to the action would all have occurred within that territory. Viewed objectively, the substantive law to be applied would be the national law established under the Constitution, as it applies to the locus of the accident, namely an amalgam of Commonwealth law and the law of the State in which the accident took place. Putting to one side arguable but probably illusory complications introduced by some provisions of the Judiciary Act 1903 (Cth) (e.g. ss.79,80A) which it is unnecessary to pursue at the constitutional level, there would be no basis for the application to the particular facts of those parts of national law consisting of the law of other States. If there were any inconsistency between applicable Commonwealth and State laws, the Commonwealth law would prevail by reason of s.109. If the action were brought in a court of the State in which the accident occurred ("the locus State"), the position would be essentially the same. The law to be applied would be the law of the State as modified by overriding provisions of Commonwealth law. In other words, the law to be applied would again be the amalgam of those laws under the Constitution. If the national system of law of this country be, in truth, a unitary one, one would expect that, subject to variations in adjectival law, a similar situation would apply if the action were brought in a competent court of a non-locus State. That is to say, one would expect that the substantive law to be applied would be the same as that which would be applied in this Court (or in another federal court) or in the court of the locus State. Examination of the relevant private international law principles discloses that their application would produce a quite contrary situation.

13. There has, in recent years, been a variety of different views about the common law principles applicable to an action for a foreign tort. In so far as actionability is concerned, the preferred approach in this country would seem to be that no action will lie unless the act done in the foreign country (i.e. the locus) would be actionable between the parties if done in the territory of the forum (i.e. under the law of the forum) and was such as to give rise to civil liability under the law of the locus (see Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629, at p 643). Regardless of whether the first part of that test is regarded as part of a threshold rule or is more properly to be seen as, or as incorporating, a rule of choice of law, the substantive law to be applied in such a case for determining the extent, if any, of actual liability and recovery is, under current doctrine, the law of the forum (see, e.g., Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38, at pp 44,49). In England, the most favoured view appears to be that adopted in the speech of Lord Wilberforce in Chaplin v. Boys (1971) AC 356, namely, that the first part of the above test (i.e. the first part of the rule in Phillips v. Eyre (1870) LR 6 QB 1) is a rule of choice of law (i.e. of the lex fori) and, subject to a largely instinctive flexible exception, the second part of the test is a requirement, under the chosen law of the forum, of civil liability under the lex loci in respect of the relevant claim as between the actual parties (see Chaplin v. Boys, esp. at pp 385-389; Coupland v. Arabian Gulf Oil (1983) 1 WLR 1136, at pp 1145-1149; 2 All ER 434, at pp 442-446; Armagas Ltd. v. Mundogas S.A [1985] UKHL 11; (1986) AC 717, at p 740).

14. If the above-mentioned action in negligence were brought in a court of a State other than the locus State and the private international law rules were applicable as if the two States were different countries, the fact that the plaintiff was entitled to succeed under the law of the State in which the accident occurred, as modified by applicable Commonwealth law, could be unavailing. The substantive law of the forum State could preclude actionability and would (at least prima facie if the English flexible exception be adopted) control liability and recovery. If the applicable law of each State differed significantly from that of the others, the result could be that the substantive law applicable to a particular accident in one part of this country would be quite different in the court systems of each of the six States which are part of this country. In other words, the substantive rule or rules applicable to determine the legal consequences of a particular act done at a particular time in a particular part of this country would vary according to whereabouts in the country proceedings were instituted. What, one is led to ask, could be the theoretical basis of such a situation? If it were that the national law provided for the application of private international law principles on the basis that the States were, for relevant purposes, to be treated as separate nations, the national law would provide for its own disunity, whereas the intention manifest in the Constitution which established that national law is that it should be a unitary system. If it were that private international law rules were applicable independently of the national law, then the failure of the Constitution to establish a unitary system of law would be even more profound. On either hypothesis, one would be led to ask about the theoretical basis of the applicability of the law of the forum State. Did the law of the forum State purportedly apply to the accident in the other State at the time it occurred with the result that the lawfulness and consequences of the defendant's act fell to be determined by reference to six distinct and differing sets of laws all operating within the one country at the time when it was done? Such a situation would be quite contrary to the traditional view of the nature and operation of the law in this country. Alternatively, did the law of the forum State (and of other non-locus States) provide for a new action of some other kind under its own law based upon actionability under the lex loci (cf. Koop v. Bebb, at p 644)? If the latter: What is the nature of that new action? When did it arise? Did a similar action, with different ingredients, arise in each of the other non-locus States? Why should the law of the forum State be imposed to negative or control the national law which would be applied by either a federal court or a court of the State in which the relevant events occurred? Finally, is the wholesale rejection, for the purposes of the internal law of this country, of "the (vested rights) theory propounded by Holmes J. in Slater v. Mexican National Railroad Co. [1904] USSC 100; (1904) 194 US 120" (see Koop v. Bebb, at pp 643-644) consistent with the fundamental tenet of our jurisprudence that there is a basic distinction between the objective existence or operation of law on the one hand and its judicial declaration or application on the other (cf., e.g., Dane, (op.cit.) but note Holmes, "The Path of the Law", Harvard Law Review, vol.10 (1897), 457, at pp.460-461)? In the event, I find it unnecessary to pursue any of these particular questions since it appears to me that the Constitution leaves no room for the direct intrusion of private international law principles to preclude or undermine the unity of the national system of law or to deny the jurisprudence which that system reflects.

15. The legislative powers and the laws of the former Colonies which, subject to its terms, the Constitution expressly continued were, in 1900, understood to be fundamentally territorial in their content and operation (see Macleod v. A-G (N.S.W.) (1891) AC 455 and, generally, Detmold, The Australian Commonwealth, (1985) ch.8). That limited territorial content and operation provide the explanation of how those legislative powers and those laws could all be continued as part of the new national system of law without express provision being made for the resolution of competition or inconsistency between them. That explanation is that the operation of State laws and the direct reach of State legislative powers, while continued and incorporated within the new national system, were seen as remaining fundamentally territorial (see, e.g., Constitution, s.108: shall continue in force "in" the State). There has, of course, been subsequent recognition of the weaknesses of the traditional notion that a plenary power to legislate for the peace, order and good government of a State cannot, as a matter of principle, extend to laws having an extra-territorial operation (see, e.g., The Trustees Executors & Agency Co. Ltd. v. Federal Commissioner of Taxation [1933] HCA 32; (1933) 49 CLR 220, at pp 230ff.; Pearce v. Florenca [1976] HCA 26; (1976) 135 CLR 507, at pp 514ff.; Wacando v. The Commonwealth [1981] HCA 60; (1981) 148 CLR 1, at pp 20-21). That subsequent recognition cannot, however, reverse the historical fact that the Constitution was framed in the context of the traditional view that Colonial (and State) legislative powers were confined by strict territorial limitations which precluded the extra-territorial operation of laws. Viewed in that traditional context, the constitutional solution of competition and inconsistency between purported laws of different States as part of the national law must, where the necessary nexus for prima facie validity exists, be found either in the territorial confinement of their application or, in the case of multi-State circumstances, in the determination of predominant territorial nexus. That would have been the position under the provisions of the Constitution (in particular, ss.106, 107 and 108) even if those provisions had not included s.118. The presence of s.118 serves to make that position plain.

16. Section 118 requires that "(f)ull faith and credit shall be given, throughout the Commonwealth to the laws, the public Acts and records, and the judicial proceedings of every State." For present purposes, that constitutional provision is relevant in two distinct ways. First, it serves to confirm, if confirmation be necessary, the national character ("throughout the Commonwealth") of the system of law which the Constitution established. Second, it requires and ensures that, within that national system of law, full faith and credit be given to the laws and public Acts of each State.

17. To give full faith and credit to something does not, as a matter of ordinary language, mean merely to acknowledge the fact that it exists. Thus, to give full faith and credit to a person's word does not mean merely to accept the fact that the person says something. It means to accept and act upon the content of what he says. To give full faith and credit to a judgment means, as a matter of ordinary language, not only to recognize its existence but, while it stands, to accept and abide by its contents (see, e.g., the references to "give credit to" a judgment or a sentence in the extract from Lord Nottingham's account of Cottington's Case (1678) set out in Swanston's report of Kennedy v. Cassillis [1818] EngR 601; (1818) 2 Swans 313, at p 326; [1818] EngR 601; (36 ER 635, at p 640)). Likewise, the directive of s.118 to give full faith and credit "throughout the Commonwealth" to the laws and Acts of a State whose laws and territorial legislative powers are continued under the Constitution does not, as a matter of ordinary language, mean merely to accept that such laws or Acts exist or have been made. It decrees that those laws must be accepted throughout the Commonwealth as the national law applicable to regulate, and define the consequences or attributes of, conduct, property or status within that particular part of the national territory.

18. The directive of s.118 must, of course, be read within its constitutional context. That means that it must be read as applying only to laws and Acts to the extent that they are not invalid either on the ground that they purport to operate beyond State legislative competence or on the ground that they are inconsistent with a valid Commonwealth law. The question arises whether there is any constitutional or other consideration which requires that the directive of s.118 be further read down so that it should be construed as involving no more than an obligation to acknowledge, as a matter of evidence, the existence of State laws and Acts. So read, the requirement that full faith and credit be given to the valid laws and Acts of a State throughout the Commonwealth would be satisfied as regards a particular law or Act of one State ("the first State"), if, for example, the courts of another State were to recognize its existence but deny its effect by applying the substantive law applicable to acts within their own territory to determine the lawfulness and consequences of acts occurring exclusively within the territory of the first State and having no overriding connection (e.g. immediate actual or intended consequences) with the territory of that other State.

19. I can discern no convincing reason, either in logic or in the context of the other provisions of the Constitution, why the language of s.118 should be so constricted. To the contrary, to give the words of s.118 their full effect seems to me to involve no more than allowing the section to perform its intended function of confirming the integration of State legislative powers and State laws within the national legal system which the Constitution established. There are, however, three extraneous arguments which might be advanced to support the view that the words of s.118 should be read as referring only to matters of evidence or proof as distinct from substance. They are related. The first is that the similar words in Art.IV, s.1 of the United States Constitution have sometimes been so read. The second is that there are some references to s.118 in the Convention Debates which indicate that the provision was seen as being essentially an evidentiary one. The third is that the decided cases support such a constriction of the words of the section. I shall consider these arguments in the order in which I have mentioned them.

20. Article IV, s.1 of the United States Constitution can be traced back to the additional Articles which were recommended for adoption (i.e. in the Articles of Confederation) by the report of 11 November 1777 of a committee of the Continental Congress. Beyond that, the origin of the words of the United States section would seem to be unclear. It has been suggested that the origins of the section may be found in an earlier Massachusetts Statute of 1774 (see, e.g., Childs, "Full Faith and Credit: The Lawyer's Clause", Kentucky Law Journal, vol.36 (1947), 30, at pp.36-37; Sumner, "The Full-Faith-and-Credit Clause - Its History and Purpose", Oregon Law Review, vol.34 (1955), 224, at p.228). Examination of the language of that statute discloses, however, that it contains no mention of the words "full faith and credit". My own reading of United States judgments and United States writings leaves me with an impression of a deep-rooted tendency to see Art.IV, s.1 of the United States Constitution as a substantive, as distinct from a merely evidentiary, provision and as providing an increasingly important key to the understanding of the relationship and interaction between the laws of the States and that union (see, e.g., Milwaukee County v. M.E. White Co. [1935] USSC 195; (1935) 296 US 268, at pp 276-277; Magnolia Petroleum Co. v. Hunt [1944] USSC 12; (1943) 320 US 430, at p 439; Thomas v. Washington Gas Light Co. [1980] USSC 141; (1980) 448 US 261, at pp 271-272; and the discussion and writings referred to in Kogan, "Toward a Jurisprudence of Choice of Law", New York University Law Review, vol.62 (1987), 651). That is, however, by the way. What is of relevance for present purposes is that, at the time of the adoption of the Australian Constitution, Art.IV, s.1 was seen as being primarily directed to authentication of statutes and judgments and as having a more limited effect than that which I would give to the words of s.118. Even at that time however, the role of Art.IV, s.1 under the United States Constitution was not universally seen as confined to that of a merely evidentiary or authentication provision (see, e.g., Costigan, "The History of the Adoption of Section 1 of Article IV", Columbia Law Review, vol.IV (1904), 470).

21. Section 118 was included in its present form (if variations in punctuation and upper case lettering and a change from "the States" to "every State" be ignored) as s.18 of Ch.5 of the draft Bill which emerged from the 1891 Convention. It was plainly based on the United States Art.IV, s.1. There are, however, significant differences between both the words of the two sections and their respective contexts. Those differences prevent the decisions on Art.IV, s.1 from being properly seen as applicable to govern the nature and effect of s.118. As a matter of language, s.118 expressly requires, while Art.IV, s.1 does not, that full faith and credit be given to "the laws" of every State. Section 118 expressly requires that such full faith and credit be given "throughout the Commonwealth" whereas Art.IV, s.1 does no more than provide that full faith and credit be given "in each State". The relevant constitutional contexts of the two sections significantly differ in a number of important respects. The Australian Constitution was, as has been mentioned, built upon the unity of the inherited law of all the Australian Colonies. There was no such unity in the United States. The Supreme Court of the United States was not invested with an original jurisdiction to apply the national law to an extent comparable with the original jurisdiction of this Court. Nor was it invested with a general appellate jurisdiction of the kind invested in this Court. In the result, the grounds for perceiving a unitary system of national law under the United States Constitution are less compelling than is the case under the Australian Constitution. Moreover, no Australian court could lightly disregard eminent United States views which powerfully militate against treating the United States approach to Art.IV, s.1 as a model for our approach to s.118 (see in particular Justice Robert Jackson, "Full Faith and Credit - The Lawyer's Clause of the Constitution", Columbia Law Review, vol.45 (1945), 1, at pp.19-20; and cf. Cowen, "Full Faith and Credit, The Australian Experience" (1952) 6 Res. Judicatae 27). Finally, the demand of s.118 is uncomplicated by the competition of a possibly overlapping due process clause (cf. Allstate Ins. Co. v. Hague [1981] USSC 37; (1981) 449 US 302, per Brennan J. at p 308 and Stevens J. at pp 320ff.; Yarborough v. Yarborough [1933] USSC 162; (1933) 290 US 202, per Stone J. at pp 214ff.).

22. There are two answers - one general, the other particular - to the proposition that s.118 was understood in the Convention Debates as having an essentially evidentiary effect. The general answer is that it is not helpful to use the Convention Debates in that way in this Court. One can usefully refer to the Convention Debates to understand the history of a constitutional provision or to assign a special contemporary meaning to a particular term or to identify a particular problem or aspiration which a constitutional provision was intended to meet or promote (cf., Cole v. Whitfield [1988] HCA 18; (1988) 62 ALJR 303; 78 ALR 42). One cannot, however, otherwise rely upon Convention Debates to identify the intention behind the words of the Constitution. The discussion at the Convention Debates was largely ex tempore and of variable standard. It would be an affront to the genius of the framers of the Australian Constitution and subversive of the procedures by which Federation was achieved by the Australian people to constrict the meaning and effect of the words of the Constitution by reference to passing comments made by delegates in the course of such discussion.

23. The particular answer to any argument based on the Convention Debates is that there is almost nothing in them about s.118. As has been said, the terms of the section were largely contained in the final draft Bill of 1891. The Convention records contain no express explanation of the expansion of the United States provision to include the reference to "laws" and the requirement that full faith and credit be given "throughout the Commonwealth". The provision was included in neither the Clark nor the Kingston drafts. It first appears in the preserved documents relating to the Conventions, in the words of the United States section, in amendments prepared by the 1891 Constitutional Committee (chaired by Griffith and greatly influenced by Clark) to the first draft Bill. It was apparently altered to the substance of the present provision in the course of discussion by the members of that Committee (see the handwritten alterations, apparently by Griffith, to the draft Bill in Griffiths, Successive Stages of the Constitution of the Commonwealth of Australia (1891), Dixson Library). The only recorded discussion of the provision in the Convention Debates themselves was at the 1897 Adelaide session where some comments were made indicating a view that the section was essentially concerned with matters of evidence or judicial notice. There is, however, nothing which would warrant the conclusion that that was the general consensus of the delegates and subsequent writings indicate that one of the two most likely framers of s.118 and at least one of the other distinguished lawyers who participated in the Convention Debates probably took a much wider view of the effect of the provision (see A. Inglis Clark, Studies in Australian Constitutional Law (1901), pp 97-98; and per Higgins J., Jones v. Jones [1928] HCA 2; (1928) 40 CLR 315, at pp 320-321).

24. The argument that the decided cases favour a narrow construction of s.118 has greater force. While it is true that there are statements in judgments in this Court and State Supreme Courts which lend support for giving a broad and substantive effect to the words of s.118 (see, e.g., Jones v. Jones, at pp 320-321; Merwin Pastoral Co. Pty. Ltd. v. Moolpa Pastoral Co. Pty. Ltd. [1933] HCA 31; (1933) 48 CLR 565, at pp 577, 587-588; Re Commonwealth Agricultural Service Engineers Ltd. (1928) SASR 342, at p 346; In re E & B Chemicals & Wool Treatment Pty. Ltd. (1939) SASR 441, at pp 443-444; Harris v. Harris [1947] VicLawRp 6; (1947) VLR 44, at pp 45ff.), there are judgments in subsequent cases in this Court (particularly Koop v. Bebb and Anderson v. Eric Anderson Radio & T.V. Pty. Ltd. [1965] HCA 61; (1965) 114 CLR 20) in which it has been expressly asserted or clearly assumed that the rules of private international law operate to determine competition between the laws of different States. Those latter cases cannot, however, properly be seen as having established that s.118 has merely an evidentiary operation or, for that matter, as directly binding authority as to the effect of the section. The provisions of s.118 were not relied upon in argument in Koop v. Bebb and the judgments in the case contain no mention at all of the section. In Anderson, the competition was not between the laws of two States. It was between the law of a State and the law of a Territory. While s.118 of the Constitution was relied upon in argument and referred to in the judgments in Anderson (particularly the judgment of Kitto J. at pp.29ff.) in terms which are contrary to the views which I have expressed about the effect of the section, the case seems to have turned upon the view that the relevant law of the Australian Capital Territory should not be seen as a general law defining the consequences of conduct within the Territory but as a law which was intended to speak only to the courts of the Territory. Moreover, the judgments in that case put s.118 of the Constitution to one side and construed s.18 of the State and Territorial Laws and Records Recognition Act 1901 (Cth), a differently worded provision in a contrasting context, independently of the constitutional provision (see, e.g., at p.31 (Kitto J.) and p.39 (Menzies J.)). With some hesitation, I have come to the conclusion that s.118 still awaits authoritative exposition in this Court. That being so, I do not see myself as constrained by authority to refrain from giving effect to my own views. In the following paragraph, I restate those views in summary form.

25. The effect of the Constitution was to establish a comprehensive and truly unitary system of substantive law. That national law applies throughout the territory of the nation. It encompasses: the Constitution itself; the constitutions of the States to the extent to which they are continued under the Constitution; the laws made by, and under the authority of, the Parliament; the laws made by, and under the authority of, the Parliaments of the States; and the common law. Within that unitary system of national law there is no room for the direct application of private international law principles to resolve competition or inconsistency between a law of the Commonwealth and a law of a State or between the laws of different States. The Constitution itself resolves such competition or inconsistency: by s.109 (in the case of inconsistency between a law of the Commonwealth and a law of a State); by the confinement of the operation of State laws by reference to territorial (or predominant territorial) nexus under the constitutional structure and the mandatory directive of s.118 (in the case of competition or conflict between the laws of different States). Under the constitutional structure, State laws are essentially territorial in the sense that they apply to regulate (or to define the consequences or attributes of) conduct, property or status within, or having a sufficient relevant nexus with, that part of the nation which constitutes the territory of the particular State. To the extent of that valid territorial application, however, State laws are themselves part of the national law and, as such, directly binding upon all Australian courts, both Commonwealth and State. In so far as substantive law is concerned, the applicable rules of the national law will vary in their application to events and things in the territory of the different States for the reason that the national law encompasses State laws operating to regulate conduct and things within (or with sufficient relevant nexus with) their respective territories. Those variations and the distinct identity of the components which make up the whole do not preclude or destroy the unitary character of the national law.

26. Basic to the jurisprudence of this country is the notion that the courts apply, as distinct from make, the law, that is to say, that the law operates contemporaneously to regulate lawfulness and consequences of conduct independently of judicial proceedings. In that context, it would be to substitute the bedlam of a Babel for an ordered system of law to recognize the right of each of the country's court systems, notwithstanding the place of this Court in all of them, to speak at the same time but in conflicting terms about the lawfulness, consequences or attributes of a particular act or thing in a particular place at a particular time. It is, however, necessary to draw a distinction between substantive laws on the one hand and procedural or adjectival laws on the other in so far as the identification of their territorial operation is concerned. A substantive law will, if it defines the lawfulness or consequences of particular acts or circumstances, operate within the territory where those acts or circumstances occur. On the other hand, a procedural or adjectival law directed to regulating court proceedings will have its territorial operation in the territory in which those court proceedings take place. Consequently, the courts of a State will neither ignore the prima facie territorial limitation of the operation of State laws which is implicit in the Constitution nor infringe the injunction of s.118 of the Constitution if they apply the procedural or adjectival law of their own State in dealing with a claim arising out of conduct or circumstances occurring within the territory of another State (cf. Story, Conflict of Laws, 1872, ss.556-563; Salmond on Jurisprudence, 12th ed. (1966), p.78; Cheshire & North, Private International Law, 11th ed. (1987), at pp.74-75; Dicey & Morris, op. cit., at p.173).

27. There are several consequences which flow from the conclusion that, under the Constitution, the reconciliation of competing laws of different States is ordinarily to be found in the prima facie paramount (as between the States) competence of each State Parliament to make laws for its territory and in the obligation to accord full faith and credit to the laws and Acts of other States made within their legislative competence. The first flows from the fact that a legal system can operate by silence in the sense that the criterion of the lawfulness of conduct will commonly be that there is nothing in either the common law or statute law which renders it wrongful. That being so, a law of one State which purports to attach legal liability for conduct and consequences which are wholly within the territory of another State will, in the absence of some relevant overriding territorial nexus, infringe the injunction of s.118 of the Constitution regardless of whether the law of the other State expressly deals with that conduct or its consequences in a different fashion or simply treats that conduct as not giving rise to legal liability by saying nothing about it. That is not to say that an act or area of activity which involves aspects connected with different States must be assigned exclusively to the area of legislative competence of either one of them. Thus, for example, an activity involving aspects connected with different States may well be subject to different (but consistent) laws, such as taxing laws, operating by reference to those different aspects. The second consequence is that the courts of one State cannot refuse to recognize or apply the substantive laws of a second State in relation to an action arising in the territory of the second State on the ground that the law of the second State is contrary to public policy considerations which are recognized by the law of the forum State. The reason why that is so is that the Constitution enacts a superior policy of the national law, namely, that, as between the States and in the absence of some overriding territorial nexus, legislative competence with respect to what happens within the territory of a particular State lies with that State. As regards that territory, it is the public policy of that State which controls the State component of the national law. The third consequence which should be mentioned is that it is inevitable that there will be difficulty in identifying the applicable law in some cases arising from circumstances in (or connected with) the territory of more than one State. While the private international law rules of the common law will not be directly applicable to resolve such difficulty, they will be of assistance in identifying what is, for relevant purposes, the predominant territorial nexus in that they will provide "a relevant and enlightening body of experience and authority to provide analogies" (see Justice Robert Jackson, op. cit., at p.30). Except where they discriminate in favour of the law of the forum, the common law rules of private international law are traditionally based on notions of territoriality. Thus, for example, private international law rules aimed at identifying an applicable non-forum law will ordinarily operate by reference to the place where acts are done or where property or domicile exists. Such rules are likely to be relevant, by way of analogy, to the identification of the applicable substantive law to be applied in a case involving circumstances (e.g. acts, property, status or choice of law by the parties) connected with more than one State.

28. It is in the above context that one must determine the effect of provisions of Commonwealth laws conferring legislative authority upon the legislature of an internal Territory of the Commonwealth. The legislative competence of the Parliament to confer general law-making power upon the legislature of such a Territory is derived from s.122 of the Constitution. That section confers upon the Parliament a power to make laws not "with respect to" the Territory but "for the government of" the Territory. There may be grounds for arguing that, in the context of other constitutional provisions (in particular ss.106-108 and 118), the Commonwealth legislative power "for the government of" an internal Territory should be treated as subject to territorial limitations corresponding with those applying to the legislative powers of the States (but cf. Lamshed v. Lake [1958] HCA 14; (1958) 99 CLR 132, at pp 141ff.). There is, however, no need to pursue that question here since it seems to me to be plain that, regardless of the scope of the legislative power conferred by s.122, Commonwealth laws conferring legislative power upon the legislature of an internal Territory in the traditional words ("for the peace, order and good government") used in the various State constitutions should, in the context that such laws will constitute part of the national law established by the Constitution, be construed as intended to confer a legislative power corresponding to the legislative power exercised by the States with respect to their various territories. In other words, the legislative power conferred by such laws is not only "qualified in point of subject matter" but "restricted territorially" (cf. Sir Owen Dixon, op. cit., at p.199). On the other hand, valid laws made pursuant to a legislative power so conferred enjoy the authority of a law made by the Parliament and, as such, are binding throughout the Commonwealth pursuant to covering cl.5. They operate as part of the national law in its application to the particular Territory in the same way as a State law operates as part of the same national law in its application to the territory of that State.

29. Section 6 of the Northern Territory (Self-Government) Act 1978 (Cth) confers power upon the Legislative Assembly, in the words of the traditional formula, "to make laws for the peace, order and good government of the Territory". It should be construed as intended to confer upon the Legislative Assembly a power corresponding in nature to the legislative powers of the States (under their respective constitutions) as continued by the Constitution. That is to say, the legislative power conferred upon the Northern Territory should be construed as territorially limited in its scope but as enhanced by its operation, throughout the Commonwealth, as a component of that part of the national law which applies to regulate persons, acts and things within the Northern Territory. As such, competition between a law made by the Legislative Assembly of the Northern Territory and a law of a State does not fall to be resolved by reference to the primacy enjoyed by Commonwealth law under s.109 of the Constitution. It is to be resolved, as a matter of the legislative intent to be discerned in the Commonwealth Act conferring legislative power upon the Legislative Assembly, within the context of the unitary system of national law by reference to considerations of territoriality, that is to say, by reference to the territorial application of State and Territory laws to matters within their respective territories and, in the case of persisting conflict, predominant territorial nexus.

30. The present action arises out of a motor vehicle accident in the Northern Territory. The substantive law applicable to determine rights and liabilities arising from that accident is the national law as it applies in the place where the accident occurred, that is to say, the national law as it applies in the Northern Territory. That national law relevantly includes s.122 of the Constitution, s.6 of the Northern Territory (Self-Government) Act, the common law and s.5 of the Motor Accidents (Compensation) Act 1979 (N.T.).

31. The provisions of s.5 of the Motor Accidents (Compensation) Act are set out in other judgments and it is unnecessary that I repeat them. In terms, they are confined to preclude recovery in an "action for damages ... in the Territory". They cannot, however, properly be seen as procedural or adjectival law. They must be seen as substantive law with a general territorial application: to confine common law liability in respect of death or injury to a resident of the Territory in an accident that occurred in the Territory. As such, they applied as part of the national law to regulate the rights and liabilities arising from the accident in the present case. Since the plaintiff was, at the time of the accident, a resident of the Territory, the provisions of s.5 apply to limit liability on the part of the defendants in respect of the damages he sustained, to damages for pain and suffering or for loss of amenities of life. The Supreme Court of Victoria, like all other Australian courts, is bound to apply the national law. That being so, it is bound to apply the provisions of the Motor Accidents (Compensation) Act to so limit the liability of the defendants in the present case.

32. There remains for consideration the question whether s.56 of the Judiciary Act precludes the Supreme Court of Victoria from exercising jurisdiction in the proceedings in view of the fact that the Australian Telecommunications Commission ("Telecom") is one of the defendants. In my view, s.56 does not have that effect in circumstances such as the present where Telecom has submitted to the jurisdiction of the Supreme Court.

33. Accepting that Telecom is, for relevant purposes, the Commonwealth, the jurisdiction to entertain the particular proceedings is federal jurisdiction (Constitution, s.75(iii)) which was conferred upon the Supreme Court by s.39(2) of the Judiciary Act. While the relationship between s.39(2) and s.56 is not without difficulty, it seems to me that neither s.56 nor other sections in Pt.IX of the Judiciary Act should be construed as intended to deprive State courts of any part of the actual jurisdiction conferred by s.39(2). There are, however, problems in seeing s.56 as either conferring some supplementary element of effective jurisdiction or as facultative in the sense of actually enabling the exercise of jurisdiction in that so to see the section would involve either ignoring the confining effect of the words "whether in contract or in tort" in the section or denying the effectiveness of the grant of jurisdiction contained in s.39(2) in cases where the claim against the Commonwealth was in neither contract nor in tort. On balance, the preferable view seems to me to be that the provisions of s.56 are restrictive of the exercise, as distinct from the grant, of jurisdiction in the sense that the effect of the section is, in the class of case to which it refers, to restrict the non-consensual exercise of jurisdiction by a State (or Territory) Court to cases where the cause of action arose within the particular State (or Territory). On that approach, the section does not preclude the exercise of jurisdiction conferred by s.39(2) in classes of case to which it does not refer (i.e. where the claim is other than "in contract or in tort") or, in the classes of case to which it does refer, if the Commonwealth submits to the exercise of that jurisdiction.

34. There are two further matters which should be briefly mentioned. The first is that I have found it unnecessary to embark upon an examination of the effect of s.18 of the State and Territorial Laws and Records Recognition Act. That section is, as has been said above, differently worded from s.118 and in a contrasting statutory context. It is strongly arguable that it should, in its particular context, be construed as being essentially concerned with evidentiary matters. If it be construed as having that confined effect, s.18 is irrelevant to the outcome of the present appeal. If it be construed as having a wider effect, its possible relevance would be to confirm the conclusion as to the outcome of the present appeal which I have reached independently of it. The second matter is that I have also found it unnecessary to consider the precise effect of s.2(1) of each of the Australia Act 1986 (Cth) and the Australia Act 1986 (U.K.) that it be "declared and enacted that the legislative powers of the Parliament of each State include full power to make laws for the peace, order and good government of that State that have extra-territorial operation". That provision is, in each of those Acts (s.5), expressly stated to be subject to the Constitution and, accordingly, could have no effect upon the territorial limitations, upon State legislative powers and the operation of State laws within the confines of the Commonwealth, which are expressed or implied in the Constitution. To the extent that they otherwise enhance the extra-territorial competence of the State Parliaments or the extra-territorial operation of State laws, they underline the need to find within the Constitution the means of precluding or resolving conflict between the laws of different States in a way which does not frustrate the manifest intention of the Constitution to establish a unitary national system of law.

35. The appeal should be dismissed.

DAWSON J.: This action was commenced by the plaintiff in the Supreme Court of Victoria seeking damages in respect of injuries which he received in a collision between two vehicles in the Northern Territory. The damages sought by the plaintiff include damages for loss of earnings and loss of earning capacity. The plaintiff was a passenger in one of the vehicles. He sued the driver of that vehicle, the other driver and the Australian Telecommunications Commission which was his employer, the owner of the vehicle in which he was travelling and the employer of the driver of that vehicle. At the time of the accident the plaintiff and both of the defendant drivers were residents of the Northern Territory, but at the time the writ was served on the other driver, he was resident in Victoria.

2. In the Northern Territory, the Motor Accidents (Compensation) Act 1979 (N.T.) ("the Act") provides for a partial no-fault scheme of compensation for injuries to residents of the Territory arising from motor vehicle accidents in the Territory. If a victim elects to receive certain benefits under the Act, he is precluded from recovering common law damages for pain and suffering or loss of amenities of life. If a victim does not so elect, he may bring an action for damages, but the damages are limited to $100,000 and the loss of earnings or of earning capacity are effectively excluded from the calculation. In Victoria, where the action was commenced, common law damages are recoverable and there is no limitation upon the amount of damages awarded.

3. All defendants entered unconditional appearances to the writ and pleaded by way of defence that the plaintiff's claim for damages, other than for pain and suffering or loss of amenities of life, was barred by reason of the Act. This defence was argued as a point of law in the Supreme Court of Victoria; it was disallowed at first instance but upheld on appeal to the Full Court. It is from the judgment of the Full Court that the plaintiff now appeals to this Court.

4. The question which arises is whether the law of the Northern Territory - the law of the place where the cause of action arose or the lex delicti - applies to preclude recovery in a manner inconsistent with the Act or whether the law of Victoria - the law of the place where the action was brought or the lex fori - applies so that the full measure of damages is recoverable.

5. There can be no doubt that hitherto in Australia the answer to a question such as that has been found in the application of the rule in Phillips v. Eyre (1870) LR 6 QB 1. That rule effects a choice of law where there is a conflict in cases of tortious liability. Such a conflict may arise in cases having a connexion with more than one State or a State and a Territory, because the Australian federation involves the continuation of the separate jurisdiction of each of the States. The rule provides, as it applies here, that an action in tort will lie in one State for a wrong alleged to have been committed in another State or Territory if two conditions are fulfilled. First, the wrong must be of such a character that it would have been actionable if it had been committed in the State in which the action is brought. Secondly, the act must not have been justifiable by the law of the place where it was done. That, in essence, is the way the rule was expressed by the majority in Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629, at p 642, although it was recognized (at p 643) that the second condition might be more correctly expressed as requiring that the wrong give rise to a civil liability by the law of the place where it was done. That is a point of some significance in the present case and I shall return to it.

6. For the moment, I want to emphasize that it is the rule in Phillips v. Eyre which has long been held to apply in this country to resolve any conflict of laws in determining liability for civil wrongs. That, as I have said, appears from Koop v. Bebb, but further authority is to be found in Anderson v. Eric Anderson Radio & T.V. Pty. Ltd. [1965] HCA 61; (1965) 114 CLR 20; Musgrave v. The Commonwealth [1936] HCA 80; (1937) 57 CLR 514, per Latham C.J. at p 532, per Rich J. at p 543 and Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38, per Mason J. at p 49.

7. The rule in Phillips v. Eyre is expressed in an elliptical way. It does in fact operate as a choice of law rule because, upon the balance of authority, it requires the lex fori to be applied. But this is assumed rather than made explicit, for the rule expresses itself in terms of actionability in the two conditions which it lays down. If it is the lex fori which is to be applied, it is difficult to imagine how an action for which that law did not provide could be brought under that law, but nevertheless actionability under the lex fori is expressed as a prerequisite. There is also the second requirement, which, again on the balance of authority, is a condition of actionability, that the wrong must not be justifiable (or must be actionable) by the lex delicti. Upon the view favoured by authority, the rule involves a rejection of the notion that the right which is to be enforced is the creation of the lex delicti. Phillips v. Eyre thus regards the obligation which is enforced by the lex fori as being of its own creation, albeit an obligation which only arises where the alleged wrong has a particular character according to the lex delicti. As was said in Koop v. Bebb at p 644 "(u)ncertainty exists only as to what that character must be".

8. Although in Phillips v. Eyre (at p 28) Willes J. in delivering the judgment of the court made the somewhat equivocal statement that "the civil liability arising out of a wrong derives its birth from the law of the place (of commission), and its character is determined by that law", it is plain from his reference to The "Halley" (1868) L.R. 2 P.C. 193 that he meant no more than that the lex delicti provides a test of actionability. In the latter case at p.204 Selwyn L.J., speaking for the Privy Council, said: "... it is, in their Lordships' opinion, alike contrary to principle and to authority to hold, that an English Court of Justice will enforce a Foreign Municipal law, and will give a remedy in the shape of damages in respect of an act which, according to its own principles, imposes no liability on the person from whom the damages are claimed." Upon this basis, if a wrong is actionable, it is the lex fori which determines the nature and extent of the liability: Koop v. Bebb, at p 644. As Windeyer J. said in Anderson v. Eric Anderson Radio & T.V. Pty. Ltd., at p 42:

"It is to authority that we are bound to look. And

authority that we should follow does, I think, show

that, under our system of private international law

as it stands at present, a court that entertains an

action based upon a foreign tort must (unless there

be a statute to the contrary) decide the rights of

the parties as it would in an action based on a

similar event occurring within its own domain....

When in Koop v. Bebb this Court spoke of 'the rule

of private international law which defines the

conditions of civil liability' in one State for an

act done in another, the reference was not, as I

read the judgment, merely to the entertaining of an

action but also to the substantive law for

determining liability in an action."

9. Nonetheless I am conscious of the cogency of the arguments contained in the dissenting judgment of Diplock L.J. in the Court of Appeal in Boys v. Chaplin (1968) 2 QB 1. Were I not constrained by authority, there would, I think, be much to be said for the view that it is the second condition of the rule in Phillips v. Eyre - that the act must not have been justifiable (or must be actionable) by the law of the place where it was done - which effects a choice of law, namely, the lex delicti. Upon this view, it is the lex delicti which determines what wrong, if any, has been committed and so determines the nature and extent of the wrong leaving it to the lex fori alone to determine the measure of compensation according to its own procedure.

10. The common law has turned its back on the vested rights theory which dominated the law of conflicts in the United States during the first half of this century. That theory was expounded by Holmes J. in Slater v. Mexican National Railroad Co. [1904] USSC 100; (1904) 194 US 120, at p 126 in the following terms:

"The theory of the foreign suit is that although

the act complained of was subject to no law having

force in the forum, it gave rise to an obligation,

an obligatio, which, like other obligations,

follows the person, and may be enforced wherever

the person may be found.... But as the only source

of this obligation is the law of the place of the

act, it follows that that law determines not merely

the existence of the obligation, ... but equally

determines its extent."

The lex delicti prevails under such an approach. Whilst it produced certainty, the obligation theory led in some cases to unsatisfactory results and has now been abandoned in a majority of States in the United States following the decisions in Schmidt v. Driscoll Hotel (1957) 249 Minn 376; 82 NW 2d. 365 in Minnesota and Babcock v. Johnson (1963) 12 NY 2d 473; 191 NE 2d. 279 in New York. See also Griffith v. United Airlines, Incorporated (1964) 416 Pa. 1; 203 A 2d 796. The principle now favoured there is that an issue in tort is to be determined by the law of the State which, as to that issue, has the most significant relationship to the occurrence and the parties. In an action for personal injuries, the basic rule is that the lex delicti applies to determine the rights of the parties, unless with respect to the particular issue some other State has a more significant relationship with the occurrence and the parties in which event the local law of the other State will be applied to determine that issue: Restatement, Second, Conflict of Laws, SS145.

11. The first requirement of the rule in Phillips v. Eyre occasions no difficulty in this case. Clearly the relevant tort, that of negligence, is one for which an action may be maintained under the law of Victoria. It is the second requirement which requires further consideration. From the beginning the rule in Phillips v. Eyre has attracted criticism, but it is the requirement that the wrong be not justifiable by the lex delicti which has been singled out for the most criticism, both for its imprecision and for its unsuitability. The requirement, phrased as it generally has been, is understandable enough in the context of Phillips v. Eyre itself. In that case the defendant, who was the governor of the colony of Jamaica, had put down a revolt and, as a consequence, was sued in England by the plaintiff on a number of counts including assault and false imprisonment. The acts of the governor were retrospectively declared lawful by an Act of the colonial legislature which was pleaded in defence. It was in that context that Willes J. used the words "the act must not have been justifiable by the law of the place where it was done": p 29. But, as Cussen J. pointed out in Varawa v. Howard Smith Co. Ltd. (No.2) [1910] VicLawRp 84; (1910) VLR 509, at pp 527-528, he did not mean that an act, which in no circumstances attracted any liability in a foreign country, might constitute a cause of action in England. The colonial Act was the justification of the acts complained of in Phillips v. Eyre but it was not suggested that, if there had been no question of justification, the attraction of civil liability under the lex delicti would not have been required. As I have already noted, Willes J. himself recognized the significance of the lex delicti as the law of the place from which the wrong derives "its birth".

12. In Koop v. Bebb at p 643 the majority were led to remark that the true view may be that an act done outside a State should be held to be an actionable wrong in the State if, first, it was of such a character that it would have been actionable if it had been committed within the State, and, secondly, if it was such as to give rise to a civil liability by the law of the place where it was done. Such a view would have been inconsistent with Machado v. Fontes (1897) 2 QB 231 which, purporting to follow Phillips v. Eyre, held the requirement that the acts be "not justifiable" meant that it must not be "innocent" but did not mean that an act of that kind must attract civil liability. The Court of Appeal held in Machado v. Fontes that an action lay in England for damages from a libel said to have been committed in Brazil, notwithstanding that libel could only be made the subject of criminal proceedings in the latter country.

13. In Chaplin v. Boys (1971) AC 356 the House of Lords overruled Machado v. Fontes and, as I understand the case, a majority of their Lordships favoured the view suggested by this Court in Koop v. Bebb namely, that the act complained of should not only be actionable under the lex fori but should also give rise to civil liability under the lex delicti. That view should now be accepted. Since one of the objects of the rule in Phillips v. Eyre is to avoid the imposition of liability if none existed under the law of the place where the act complained of was done, the civil liability to which that act must give rise under the lex delicti must be civil liability of the kind which is sought to be imposed under the lex fori. I would adopt the words of Lord Wilberforce at p 389 in Chaplin v. Boys where he described the condition as being that civil liability in respect of the relevant claim should exist as between the actual parties under the law where the act was done.

14. The application of the rule in Phillips v. Eyre viewed in this way would preclude the plaintiff from recovering damages for loss of earnings or of earning capacity in the Victorian action because damages under that head are not recoverable under Northern Territory law. In order to reach a contrary conclusion it would be necessary to treat the heads of damage under which recovery can be made as having nothing to do with the character of the wrong actionable under the lex delicti and as going only to the measure of compensation, that is to say, as a matter of procedure rather than as a matter of substance. Whilst the line between procedure and substance may sometimes be elusive, in a case such as this, where the action is in negligence and damage is the gist of liability, it seems to me that it is not possible to say that the character of the wrong is not altered or diminished under the lex delicti by the exclusion of loss of earnings or of earning capacity from the damages recoverable. Negligent conduct giving rise to damage in the form of loss of earnings or of earning capacity is not a wrong which attracts civil liability in the Northern Territory. The relevant wrong which does attract civil liability is negligent conduct giving rise to damage in the form of pain and suffering (provided no benefit has been received under the Act) but that is not the wrong upon which this action is based whilst the claim for damages for loss of earnings or of earning capacity remains. In other words, the form of damage recoverable governs the nature of the cause of action.

15. If, as upon any view is so, it is the lex delicti which determines whether the wrong is, applying the second condition of the rule in Phillips v. Eyre, actionable in the place where it was committed, then it cannot be said that an action of the necessary character exists in the Northern Territory. To say that such an action exists because there is an action in negligence for another type of damage, is to mistake entirely the character under the lex delicti of the wrong alleged. I do not think that, with regard to the claim for loss of earnings or of earning capacity, the second condition laid down by the rule in Phillips v. Eyre is satisfied in this case.

16. But in Chaplin v. Boys a majority held that it was only a general rule which was laid down in Phillips v. Eyre and that departure from it was justified where the circumstances were such as to make the lex fori the more appropriate law to be applied notwithstanding failure to fulfil the second condition. This desire for flexibility is easily understood in the context of Chaplin v. Boys where the plaintiff and the defendant were both members of the British armed forces stationed temporarily in Malta and the plaintiff was injured in a road accident there as the result of negligence on the part of the defendant. Both the plaintiff and the defendant had returned to England where the plaintiff brought his action. The application of Maltese law would have restricted the plaintiff's damages to financial loss directly suffered and would have excluded compensation for pain and suffering. It was in these circumstances that a majority held that the plaintiff, bringing his action in England, could recover damages assessed according to the law of England not merely as to amount, but also as to the heads under which damage could be recovered. In other words, upon the majority view the special circumstances of the case justified the court in declining to apply the rule in Phillips v. Eyre and in applying English law for all purposes. To apply the Maltese rule would, in that case, have served no interest which that rule was devised to meet, and so it was held that the rule in Phillips v. Eyre, having a flexible application, should not be applied. The flexible application of the rule, which did not receive unanimous support in Chaplin v. Boys, involves a limited application of the proper law of the tort, favoured in most American States, the more certain result of the rule in Phillips v. Eyre being preferred in all but special circumstances.

17. The rule in Phillips v. Eyre has never been thought by this Court to have a flexible application within Australia and, for my part, I do not think that any benefit is to be gained from so regarding it. The connexion of the parties with a State or Territory in which a wrong is committed in Australia could never be as remote as, for example, the connexion of the parties to Malta in Chaplin v. Boys. This is so because the very fact of federation tends against the view that one State cannot have a significant interest in the operation of its laws upon acts committed within its borders by persons from another State or Territory. The second condition of the rule in Phillips v. Eyre imposes a desirable limitation upon the opportunity for forum shopping and within a federation it would seem undesirable to disregard that limitation even if special circumstances were otherwise thought to exist. Despite the existence of separate jurisdictions giving rise to a conflict of laws, the federation binds together the one country and makes inappropriate an approach which may have some validity in the case of conflict between the laws of different countries. Moreover, within the one country a greater value is to be placed upon certainty than upon the supposed benefits accompanying flexibility.

18. The rule in Phillips v. Eyre is, however, said to be excluded by the requirement contained in s.118 of the Constitution. That section provides:

"Full faith and credit shall be given, throughout

the Commonwealth to the laws, the public Acts and

records, and the judicial proceedings of every

State."

That provision must be read together with the power given to the Commonwealth under s.51(xxv) to make laws with respect to "(t)he recognition throughout the Commonwealth of the laws, the public Acts and records, and the judicial proceedings of the States" and with the State and Territorial Laws and Records Recognition Act 1901 (Cth) ("the Recognition Act") passed pursuant to that power. Section 18 of the Recognition Act provides:

"All public acts records and judicial proceedings

of any State or Territory, if proved or

authenticated as required by this Act, shall have

such faith and credit given to them in every Court

and public office as they have by law or usage in

the Courts and public offices of the State or

Territory from whence they are taken."

19. In Harris v. Harris [1947] VicLawRp 6; (1947) VLR 44, at p 56, Fullagar J. appears to have regarded the Act as merely re-enacting the constitutional provision while extending its application. The extension embraces the public acts, records and judicial proceedings of a Territory, to which the constitutional provision has no application, and is enacted pursuant to the Territories power (s.122) rather than s.51(xxv). It is, however, to be noted that s.18 does not refer to laws or public Acts (as opposed to public acts) as does s.118 of the Constitution. The correct view seems to me to be that s.18 in speaking of public acts is referring to public acts of a non-statutory kind so that it does not refer to the laws, statutory or otherwise, in the States or the Territories.

20. Section 118 of the Constitution does, on the other hand refer to the laws, statutory and otherwise, of the States but omits reference to the laws of the Territories. Section 3 of the Recognition Act provides that judicial notice shall be taken of all State Acts. What may seem initially confusing is to some extent explicable. So far as Acts of the States are concerned, they are covered by s.118 of the Constitution and no further provision need be made for them save for a mode of authentication. That is provided by s.3 of the Recognition Act. So far as the legislation of the Territories is concerned, it is dependent for its validity upon the Constitution and, whether it is legislation of the Commonwealth Parliament or that of its delegate, it needs no provision, statutory or constitutional, to ensure its recognition or that it is given faith and credit throughout the Commonwealth. Statute law validly in force with respect to the Territories is part of the law of the Commonwealth and operates according to its tenor throughout the Commonwealth. Of course, for the most part such legislation is not intended to operate upon events or things outside the relevant Territory, but that does not mean that it does not form part of the body of Commonwealth law which is binding upon all persons in the country. No provision for recognition or faith or credit is necessary. So much was explained in Lamshed v. Lake [1958] HCA 14; (1958) 99 CLR 132 and Spratt v. Hermes [1965] HCA 66; (1965) 114 CLR 226.

21. It must, however, have been felt necessary to provide for the effect of public acts of the Territories as well as their records and judicial proceedings and the result is s.18 of the Recognition Act. That section might, in view of s.118 of the Constitution, be thought to have little or no discernible effect with respect to the States, but it does have an operation with respect to the public acts, records and judicial proceedings of the Territories.

22. Any express requirement that the Northern Territory Motor Accidents (Compensation) Act be given faith and credit would, as I have explained, be superfluous. Its status as an Act of the Northern Territory and thus as a law of the Commonwealth ensures that it receives full faith and credit without any need for a provision to that effect. But to say as much is not to say that it is the law which must determine the issues between the parties in the present case. The Act does not purport to extend the application of its provisions beyond the Northern Territory and, perhaps, it could not validly be expressed to do so for it might then cease to be a law for the government of the Territory. Regarding it as a law of the Commonwealth, and in that sense part of the law of Victoria, does not of itself extend the scope of the Act to give it an application in an action commenced in Victoria notwithstanding that, had the action been commenced in the Northern Territory, the Act would have applied. Its application could only be achieved by means of some rule of Victorian law, that is to say, by a choice of law rule indicating the Northern Territory law as the applicable law in the circumstances. I have already pointed out that the applicable choice of law rule is that in Phillips v. Eyre and have expressed my view that in this case the second condition of that rule is not met.

23. Notwithstanding that neither s.118 of the Constitution nor s.18 of the Recognition Act have any application to the Northern Territory Motor Accidents (Compensation) Act, it is argued that the application of s.118 to State laws does bring about a regime which displaces Phillips v. Eyre and requires a choice of law of its own. Once displaced in this manner, the argument continues, the rule in Phillips v. Eyre should have no application in Australia, even in relation to the Territories. This is an argument which I cannot accept.

24. In my opinion, the requirement that full faith and credit be given to the laws of a State, statutory or otherwise, throughout the Commonwealth, affords no assistance where there is a choice to be made between conflicting laws. Once the choice is made, then full faith and credit must be given to the law chosen but the requirement of full faith and credit does nothing to effect a choice. Nor is it to the point to say that the full faith and credit requirement assumes the applicability of a single law. No doubt that is so, but it is to say no more than that where there is a conflict of laws upon a given question a selection must be made before the question can be answered. The conflict rules are based upon the same assumption but they, unlike the full faith and credit requirement, provide a basis upon which the selection can be made. Section 118 of the Constitution is not directed to a conflict of laws; where there is a conflict it makes no choice or, to put it another way, does not require the application of a law which is not otherwise applicable. See Varawa v. Howard Smith Co. Ltd. [1911] HCA 46; (1911) 13 CLR 35, per O'Connor J. at p 69; Anderson v. Eric Anderson Radio & T.V. Pty. Ltd., per Windeyer J. at p 46. No doubt this view tends to confine s.118 to matters of evidence, but it may be otherwise with judicial proceedings as Harris v. Harris shows and even with State Acts the section may have a substantive effect as indicated in Merwin Pastoral Co. Pty. Ltd. v. Moolpa Pastoral Co. Pty. Ltd. [1933] HCA 31; (1933) 48 CLR 565. In that case Rich and Dixon JJ. at p 577 and Evatt J. at pp 587-588 expressed the view that s.118 may preclude the refusal of one State to apply the law of another State on the grounds of public policy where the law of the other State is otherwise applicable. However, if the substantive effect of that section is more limited than expected or hoped for by some, it ought not to be stretched beyond its capacity in order to achieve an end thought upon extrinsic grounds to be desirable. I should add that if that end is that the lex delicti should prevail in every case of conflict in tortious liability, then its desirability is hardly beyond question. A rigid approach of that kind has been tried and found so wanting in the United States as to have led to its abandonment there.

25. To put to one side considerations of full faith and credit does not dispose entirely of the federal aspects of this case. One of the defendants, the Australian Telecommunications Commission, is an instrumentality of the Commonwealth and, in accordance with the decisions of this Court in Inglis v. Commonwealth Trading Bank of Australia [1969] HCA 44; (1969) 119 CLR 334; Crouch v. Commissioner for Railways (Q.) [1985] HCA 69; (1985) 159 CLR 22 and Attorney-General (N.S.W.) v. Commonwealth Savings Bank [1986] HCA 22; (1986) 160 CLR 315, is sued as the Commonwealth or as a person on behalf of the Commonwealth within the meaning of s.75(iii) of the Constitution. That is not in dispute. The determination of the issues in this case therefore involves the exercise of federal jurisdiction.

26. Section 56(1) of the Judiciary Act 1903 (Cth) provides that a person making a claim against the Commonwealth, whether in contract or in tort, may in respect of the claim bring a suit against the Commonwealth in the High Court or, if the claim arose in a State or Territory, in the Supreme Court of that State or Territory or in any court of competent jurisdiction of that State or Territory. Under s.79 of the Judiciary Act the laws of each State or Territory shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. Section 80 makes similar provision with respect to the common law as modified by the Constitution and by the statute law in force in the State or Territory.

27. In Suehle v. The Commonwealth [1967] HCA 13; (1967) 116 CLR 353, Windeyer J. held that the source of liability of the Commonwealth in contract and tort is s.56 of the Judiciary Act. Because ss.79 and 80 bring about the result that when an action against the Commonwealth is commenced in a court of the State or Territory in which the claim arose, as is contemplated by s.56, the laws of that State or Territory apply, Windeyer J. was of the view that s.56 requires that the laws of that State or Territory should also apply when the action is commenced in the High Court. Any other view would, by the application of ss.79 and 80, produce the capricious result that, if the action were commenced in the High Court, the law of the State where the High Court happened to be sitting to hear the claim would apply. Such a result would obviously be inconsistent with the intention lying behind s.56. There is much to be said for the view of Windeyer J., although it is not beyond controversy that the origin of Commonwealth liability in tort and in contract is s.56 of the Judiciary Act alone. See The Commonwealth v. New South Wales (1923) 32 CLR 200; Musgrave v. The Commonwealth [1936] HCA 80; (1937) 57 CLR 514, at pp 546-547; Werrin v. The Commonwealth [1938] HCA 3; (1938) 59 CLR 150, at p 167; Washington v. The Commonwealth (1939) 39 SR(NSW) 133, at pp 140-142. In addition to the question whether s.75(iii) of the Constitution has a part to play in the imposition of liability, there is now the question of the effect of s.64 of the Judiciary Act in the light of Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362 and The Commonwealth v. Evans Deakin Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254. This is a difficult area and one upon which it is unwise to enter unless it is necessary to do so.

28. Section 56 of the Judiciary Act deals specifically with claims against the Commonwealth in contract or in tort and other sections of Pt IX deal with other suits by and against the Commonwealth. But under s.39 of the Judiciary Act jurisdiction in matters in which the Commonwealth or a person being sued on behalf of the Commonwealth is a party, together with jurisdiction in other matters, is taken from the State courts and revested in them as federal jurisdiction. A comparison between s.39 and the provisions of Pt IX of the Act, in particular s.56, fails to yield any conclusion which is completely satisfying. However, it is sufficient if I express the view that, whether s.56 is the origin of Commonwealth liability in contract or in tort or whether it merely recognizes such liability, it defines (at least so far as State courts are concerned) a jurisdiction in which claims against the Commonwealth in contract and in tort might be pursued. There is no question of the Commonwealth choosing to submit itself to the jurisdiction which the section defines. The section itself subjects the Commonwealth to that jurisdiction and precludes, if the Commonwealth is not otherwise precluded from so doing, any reliance upon Crown immunity when that jurisdiction is invoked. It would be giving insufficient effect to s.56 to read s.39(2) of the Judiciary Act as producing the same result, that is to say, to read it as subjecting the Commonwealth to the jurisdiction of the courts of the States in contract or in tort. Section 39(2) is, however, a general section giving jurisdiction to the courts of the States in matters in which the Commonwealth or a person suing on behalf of the Commonwealth is a party. Even if it does not, as I think it does not, subject the Commonwealth to jurisdiction in suits in contract or in tort as does s.56, there is in my view no reason why the Commonwealth should not in such suits subject itself to the jurisdiction created under s.39(2) by submitting to it. The creation of liability in contract and in tort by or under the Constitution and the recognition of the Commonwealth by the Constitution as a litigant eo nomine provides, apart from any question of jurisdiction, a sufficient basis for such a submission. Clearly the Commonwealth has submitted to the jurisdiction of the Supreme Court of Victoria in this case.

29. For the foregoing reasons the appeal should be dismissed.

TOOHEY J.: At the relevant time s.5 of the Motor Accidents (Compensation) Act 1979 (N.T.) ("the Act") read:

" (1) Subject to sub-section (2), no action for

damages shall lie in the Territory in respect of

the death of or injury to a resident of the

Territory in or as a result of an accident that

occurred in the Territory.

(2) Subject to sub-section (3), nothing in

sub-section (1) deprives a person of the right to

bring an action for damages for pain and

suffering or loss of amenities of life.

(3) A person who has received or has elected

to receive a benefit under section 17 shall not

commence or continue an action referred to in

sub-section (2)."

2. The Act established a no-fault compensation scheme in relation to motor vehicle accidents. To this end it abolished the common law right to sue in the Northern Territory ("the Territory") for damages for personal injury, except as to damages for pain and suffering or loss of amenities of life. By reason of s.39(1), an award of damages in an action referred to in s.5(2) may not exceed $100,000. Section 17, read with the Schedule to the Act, identifies particular injuries for which a prescribed percentage of $25,000 is payable. As appears from s.5(3), a person who takes compensation in accordance with s.17 loses the right to pursue a common law claim for damages for pain and suffering or loss of amenities of life.

3. As will be evident from this brief description of the Act, there is, in the case of a resident of the Territory injured as a result of the use of a motor vehicle in the Territory, no longer an entitlement to damages for loss of earning capacity. Compensation for this loss is dealt with in Pt IV of the Act. Section 5 was amended in 1984 so as to eliminate any entitlement to damages under sub-s.(2); but that amendment has no bearing on the present claim.

4. The appellant, Anthony Breavington, was injured in a motor vehicle collision at Winnellie in the Territory on or about 11 July 1980. At the time he was an employee of the third respondent, the Australian Telecommunications Commission ("Telecom"). He was a passenger in a motor vehicle driven by the second respondent, Charles Taylor Piercy, who was also an employee of the third respondent. That vehicle collided with another vehicle driven by Rodney Godleman, the first respondent.

5. When the accident occurred the appellant was a "resident of the Territory" as that expression is defined in s.4 of the Act. The first respondent then resided in the Territory but, at the time of service of the writ of summons issued by the appellant against him and the other respondents out of the Supreme Court of Victoria, he was resident in Victoria. At the time of the accident the second respondent was a resident of the Territory and, it appears, so resided when the writ was served on him.

6. The question posed by this appeal is whether in the Victorian action the appellant may recover damages from the respondents other than damages for pain and suffering or loss of amenities of life. O'Bryan J. held that the appellant could do so; the Full Court of the Supreme Court of Victoria (Young C.J., King and Beach JJ.) held that he could not. In general the answer to this question depends on whether the appellant's entitlement to damages is to be determined according to the law of Victoria or the law applicable had action been brought in the Territory. It is necessary to speak first in general terms because the position of Telecom as a defendant gives rise to special considerations.

7. A convenient starting point of this enquiry is to be found in the judgment of Mason J. in Pozniak v. Smith [1982] HCA 39; (1982) 151 CLR 38, at p 49. (It is necessary to make the appropriate substitution of "Territory" for "State".)

"The accepted rule is that an action in tort will

lie in one State for a wrong committed in another

if (1) the wrong is of such a character that it

would have been actionable in the State in which

the action is brought; and (2) it is not

justifiable by the law of the State where it was

done (Koop v. Bebb [1951] HCA 77; (1951) 84 CLR 629, at

p 642; Anderson v. Eric Anderson Radio & T.V.

Pty. Ltd. [1965] HCA 61; (1965) 114 CLR 20; Boys v. Chaplin

(1971) AC 356)."

8. The rule as enunciated by his Honour derives of course from the judgment of Willes J. in Phillips v. Eyre (1870) LR 6 QB 1, at pp 28-29. Mason J. observed, at p 49, that the balance of Australian authority favours the view that the reference in the second part of the rule to the lex loci delicti is for preliminary or threshold purposes and that it is the lex fori that determines questions of substance. The relevant decisions include Koop v. Bebb; Anderson; and Kolsky v. Mayne Nickless Ltd. (1970) 72 SR (NSW) 437, though each of those decisions repays some analysis to see exactly what it decided. This is a matter to which I shall return.

9. The respondents accept that the first condition of the rule as stated has been met; there is no doubt that the injury to the appellant would have been actionable in Victoria. But what of the second condition? The respondents argue that it will only be satisfied if the injury to the appellant gives rise to civil liability in respect of the relevant claim between the parties under the law of the Territory. But, they say, the injury to the appellant does not give rise to any civil liability between the parties in the Territory other than for those damages referred to in s.5(2) of the Act. The way in which the respondents plead the matter in their defences is that the appellant is "barred" by s.5(1) from claiming any damages against them other than those mentioned in s.5(2). Hence, they submit, the "wrong" is "justifiable" by the law of the Territory except as to damages for pain and suffering or loss of amenities of life.

10. The appellant puts his case this way. The second condition of Phillips v. Eyre is satisfied because the appellant has a cause of action against the respondents according to the law of the Territory. That cause of action lies in damages for negligence for the injuries he suffered, even though the scope of those damages is severely circumscribed by s.5 of the Act. Thus the preliminary or threshold test, which is essentially as to jurisdiction, is satisfied. The rights and obligations of the parties then fall to be determined in accordance with the law of Victoria as the law of forum. Nothing in the law of Victoria precludes the appellant from recovering damages for economic loss or for any other loss suffered by him as a result of the accident.

11. Counsel for the appellant acknowledged that this argument, if accepted, leads to the conclusion that a plaintiff's rights will depend upon the jurisdiction in which he sues. But, he said, if a plaintiff brings action in a jurisdiction which is not the "natural or appropriate forum in which that action should be brought", that is a matter to be dealt with at the point where the court assumes jurisdiction. In other words, the doctrine of forum non conveniens can be invoked to prevent a plaintiff proceeding in a jurisdiction which has no sufficient connection with the cause of action relied upon. This approach, it was said, is more certain than the "flexible exception" approach favoured by Lord Wilberforce in Chaplin v. Boys (1971) AC 356.

12. Confusion has long surrounded the true scope of the rule in Phillips v. Eyre. Three views are possible: that the conditions create "a double-barrelled jurisdictional rule, leaving open the choice of law issue"; "a double-barrelled choice of law rule"; or a jurisdictional rule to be found in the first limb, with a choice of law rule to be found in the second. See Cheshire and North, Private International Law, 11th ed. (1987), p.526. The appellant favoured the first of these approaches, the respondents the second. Once it is accepted that the conditions in Phillips v. Eyre are jurisdictional, it is but a short step to the conclusion that the lex fori determines questions of substance as well as procedure. But are the conditions merely jurisdictional or are they concerned with choice of law? The Australian decisions are not really conclusive on the point.

13. Koop v. Bebb itself concerned an action brought in the Supreme Court of Victoria on behalf of infant plaintiffs claiming damages under the Wrongs Act 1928 (Vic.) for the death of their father who died in Victoria as a result of an accident in New South Wales. Since the death was actionable in New South Wales under the Compensation to Relatives Act 1897 (N.S.W.), on any view of Phillips v. Eyre the action was maintainable in Victoria. There was in truth no conflicts situation; no question arose as to the law to be applied in determining the rights and obligations of the parties.

14. In Anderson the plaintiff brought an action in the District Court of New South Wales in respect of a negligent act committed in the Australian Capital Territory. This Court upheld the decision of the Full Court of the Supreme Court of New South Wales that the law to be applied was the law of that State. In consequence, because of his contributory negligence the plaintiff's claim failed. Barwick C.J. held that the act complained of was actionable in both the Australian Capital Territory and New South Wales and, applying the lex fori, held that the plaintiff's claim must fail. Kitto J. held that the matter was not actionable in New South Wales, thereby applying the first condition of Phillips v. Eyre and rendering unnecessary consideration of the governing law. Taylor and Menzies JJ. seem to have approached the matter in the same way as the Chief Justice. Windeyer J. was of the view that just because the two conditions of Phillips v. Eyre had been met did not determine the appropriate law to be applied. "Assumption of jurisdiction and choice of law are logically distinct", his Honour said, at p.41. Windeyer J. then held that the rules being jurisdictional only, the substantive law to be applied was that of the lex fori. He said, at p.42:

"... authority that we should follow does, I

think, show that, under our system of private

international law as it stands at present, a

court that entertains an action based upon a

foreign tort must (unless there be a statute to

the contrary) decide the rights of the parties as

it would in an action based on a similar event

occurring within its own domain".

Although Anderson was a conflicts situation, the defendant did not seek to rely upon a defence available in the Australian Capital Territory. On the contrary, it relied upon a defence available according to the lex fori.

15. Kolsky concerned a claim brought in New South Wales arising out of a death in Victoria. In both States there was apportionment legislation except that in New South Wales contributory negligence gave rise to no apportionment in the case of a claim made under the Compensation to Relatives Act. The Court of Appeal held that the wrong complained of would have been actionable if committed in New South Wales and that the contributory negligence of the deceased was "not justifiable" but was actionable according to the law of Victoria. Hence the action must be determined in accordance with the law of New South Wales. Certainly the Court of Appeal regarded the question as one of substantive law - whether in given circumstances an action lies - and not one of jurisdiction for it said, at p.444:

"... once reference to Victorian law has fulfilled

its purpose in this case of enabling it to be

decided whether this action is well founded in

the Supreme Court of this State, it is no longer

relevant".

16. While the first condition of Phillips v. Eyre is not in contention in the present appeal, some reference to it is helpful to an understanding of the question to be answered. At the same time, if the lex fori is the law applicable to questions of substance, then as Professor Nygh pointed out in Conflict of Laws in Australia, 4th ed. (1984), p.271:

"The lex fori will be applied whether the first

condition is a choice of law rule or merely a

preliminary question."

Lord Wilberforce was surely right when in Chaplin v. Boys, at p 385, he said:

"I accept what I believe to be the orthodox

judicial view that the first part of the rule is

laying down, not a test of jurisdiction, but what

we now call a rule of choice of law: is saying,

in effect, that actions on foreign torts are

brought in English courts in accordance with

English law."

17. That conclusion was amply supported by the authorities to which Lord Wilberforce referred, at pp.385-387, including Koop v. Bebb, at p 644, and Anderson, at pp 41-42. See also by way of recent authority, Coupland v. Arabian Gulf Oil Co. (1983) 1 WLR 1136, at pp 1146-1147; 2 All ER 434, at pp 443-444. Dicey and Morris, The Conflict of Laws, 11th ed. (1987), vol.2, pp.1366-1367, make this point in relation to Phillips v. Eyre:

"Willes J. did not say that the wrong must be

actionable by English law; he said it must be of

such a character that it would have been

actionable if committed in England - a very

different proposition. Moreover, he would hardly

have cited The Halley ((1868) L.R. 2 P.C. 193) as

his sole authority for this proposition if he had

intended to lay down a rule of jurisdiction since

no question of jurisdiction was involved in that

case."

18. What does the second condition mean when it says that the wrong must not have been "justifiable" by the law of the place where it was done? Sykes and Pryles, Australian Private International Law, 2nd ed. (1987), pp.513-516, suggest that this condition is susceptible of four possible interpretations - not legally innocent; civil actionability under the lex loci delicti even if there is no resulting civil liability; some civil liability under the lex loci delicti; civil liability in accordance with the lex loci delicti in the sense that the lex loci determines the extent of liability. The first interpretation is derived from Machado v. Fontes (1897) 2 QB 231. However Machado v. Fontes has long been the subject of much criticism. The Full Court of Victoria dissented from it in Varawa v. Howard Smith Co. Ltd. (No. 2) [1910] VicLawRp 84; (1910) VLR 509. Effectively it may be taken to have been overruled in England by Chaplin v. Boys. It should no longer be regarded as good law in Australia.

19. It is now time for the second condition requiring "non-justifiability" to be restated. The judgment of Willes J. must be taken in context. The oft-quoted passage at pp.28-29 is not a statute; too much attention has been given to the word "justifiable", divorced from the setting in which it was used. There is a certain unreality in giving so much operation to one word in a judgment written over a hundred years ago in relation to an action for assault and false imprisonment brought against a former Australian explorer who had become governor of Jamaica. It was an appropriate word when considering the effect of an Act of indemnity for what the defendant had done in putting down a revolt. It is far less appropriate in a case such as the one before this Court.

20. Speaking of the second condition, Lord Wilberforce commented in Chaplin v. Boys, at p 387:

"There can hardly be any doubt that when this

formulation was made in Phillips v. Eyre, LR 6

QB 1, it was intended to cover the

justification by act of indemnity which had

occurred in Jamaica - the word 'justification' is

derived from or at least found in Mostyn v.

Fabrigas in a similar context (see particularly

[1774] EngR 104; 1 Cowp. 161, 175)."

21. It is apparent, when the judgment of Willes J. is read in its entirety, that his Honour was concerned, not with innocence, but with whether civil liability existed as between the parties under the law of the country where the act was done. The passage in which the two conditions appear is on pp.28-29 of the judgment of Willes J. But the preceding paragraph contains the following:

"A right of action, whether it arise from contract

governed by the law of the place or wrong, is

equally the creature of the law of the place and

subordinate thereto. The terms of the contract

or the character of the subject-matter may shew

that the parties intended their bargain to be

governed by some other law; but, prima facie, it

falls under the law of the place where it was

made. And in like manner the civil liability

arising out of a wrong derives its birth from the

law of the place, and its character is determined

by that law. Therefore, an act committed abroad,

if valid and unquestionable by the law of the

place, cannot, so far as civil liability is

concerned, be drawn in question elsewhere unless

by force of some distinct exceptional

legislation, superadding a liability other than

and besides that incident to the act itself."

(In passing, it might be noted that Sykes and Pryles, at p.509, describe this passage as "a classic statement of the vested rights doctrine", a doctrine referred to later in these reasons.)

22. If it be accepted that some regard must be had to the lex loci delicti, the real question is - how much regard must be had? In Koop v. Bebb, at p 644, Dixon, Williams, Fullagar and Kitto JJ. said:

"English law as the lex fori enforces an

obligation of its own creation in respect of an

act done in another country which would be a tort

if done in England, but refrains from doing so

unless the act has a particular character

according to the lex loci actus. Uncertainty

exists only as to what that character must be."

The lex loci delicti was rejected by the Court of Appeal in Kolsky and in Schmidt v. G.I.O. of New South Wales (1973) 1 NSWLR 59. A more flexible approach was taken by the Full Court in Kemp v. Piper (1971) SASR 25.

23. One thing at least is clear. The vested rights theory propounded by Holmes J. in Slater v. Mexican National Railroad Co. [1904] USSC 100; (1904) 194 US 120 has been rejected and, as Lord Wilberforce suggested, in Chaplin v. Boys, at p 386:

"It can hardly be restored now by anything less

than a revolution in thought."

A more flexible test was adopted by the New York Court of Appeals in Babcock v. Jackson (1963) 191 NE 2d 279, viz. application of the law which has greatest concern with the issue raised in the litigation. The objection which has been raised to this approach is that it introduces a considerable element of uncertainty since there are many considerations that may go to satisfy the test of greatest concern. The American cases are discussed in Ehrenzweig, "The Not So 'Proper' Law of a Tort" (1968) 17 International and Comparative Law Quarterly 1.

24. In Koop v. Bebb, at p 643, Dixon, Williams, Fullagar and Kitto JJ., having referred to earlier decisions in which Phillips v. Eyre had been discussed, tentatively restated the second limb of the rule:

"It seems clear that the last word has not been

said on the subject, and it may be the true view

that an act done in another country should be

held to be an actionable wrong in Victoria if,

first, it was of such a character that it would

have been actionable if it had been committed in

Victoria, and, secondly, it was such as to give

rise to a civil liability by the law of the place

where it was done." (emphasis added).

25. The reference to "another country" strikes a somewhat discordant note as between the States and territories of Australia, notwithstanding the observation of Windeyer J. in Pedersen v. Young [1964] HCA 28; (1964) 110 CLR 162, at p 170:

"The States are separate countries in private

international law, and are to be so regarded in

relation to one another."

See also Chaff and Hay Acquisition Committee v. J.A. Hemphill and Sons Pty. Ltd. [1947] HCA 20; (1947) 74 CLR 375, at p 396.

26. This restatement has been further developed by Lord Wilberforce in Chaplin v. Boys in terms with which I agree. At p 389 his Lordship said:

"I would, therefore, restate the basic rule of

English law with regard to foreign torts as

requiring actionability as a tort according to

English law, subject to the condition that civil

liability in respect of the relevant claim exists

as between the actual parties under the law of

the foreign country where the act was done."

27. Later English decisions have accepted this reformulation of principle: see Church of Scientology of California v. Metropolitan Police Commissioner (1976) 120 Sol Jo 690, cited in Coupland v. Arabian Gulf Oil Co., at pp 1145-1146; p 443 of All ER: also Armagas Ltd. v. Mundogas S.A. [1985] UKHL 11; (1986) AC 717, at p 740 (Robert Goff L.J.), pp 752-753 (Dunn L.J.).

28. The law in this country is not so well settled as to be beyond reconsideration by this Court. In particular, to say that questions of substance are to be determined according to the lex fori is not necessarily to say that (in the present case) the Supreme Court of Victoria must apply the same principles it would apply had the negligent act been committed in Victoria. Equally it does not follow that the law of the place where the negligent act was committed, in this case the Territory, should simply be disregarded.

29. A defect of applying the lex fori, in its domestic sense, to matters of substance is that the rights and obligations of the parties may be determined by a law which has no connection with the events giving rise to the claim and little connection with the parties themselves. It encourages a plaintiff to resort to a forum (assuming service of the defendant so as to permit resort thereto) expressly for the purpose of avoiding a limitation that exists according to the law of the place where the tort was committed. The present case is a good illustration of this. There is little doubt that action was brought in the Supreme Court of Victoria to avoid the limitation on damages now existing in the Territory. Sykes and Pryles, at p.517, describe the present case, when it was before O'Bryan J., as "a blatant example of forum shopping" in which "Victoria, as a forum, had no interest in applying its law to the facts of the case". Without endorsing any pejorative overtones in this comment, what is said would seem to be correct.

30. It follows then, on application of the general rule of private international law as stated in these reasons, that the appellant cannot recover, in the action brought in Victoria, damages for loss of earnings or loss of earning capacity for these are damages that are not recoverable under the law of the Territory. It remains to consider whether any qualification to this approach should be adopted. In Chaplin v. Boys, after noting the conflict between the desire for certainty on the one hand and for "flexibility in the interest of individual justice" on the other, Lord Wilberforce introduced a flexible qualification which he expressed, at p.392, in the following words:

"The tort here was committed in Malta; it is

actionable in this country. But the law of Malta

denies recovery of damages for pain and

suffering. Prima facie English law should do the

same: if the parties were both Maltese residents

it ought surely to do so; if the defendant were a

Maltese resident the same result might follow.

But in a case such as the present, where neither

party is a Maltese resident or citizen, further

inquiry is needed rather than an automatic

application of the rule. The issue, whether this

head of damage should be allowed, requires to be

segregated from the rest of the case, negligence

or otherwise, related to the parties involved and

their circumstances, and tested in relation to

the policy of the local rule and of its

application to these parties so circumstanced."

His Lordship continued:

" The rule limiting damages is the creation of

the law of Malta, a place where both plaintiff

and defendant were temporarily stationed.

Nothing suggests that the Maltese state has any

interest in applying this rule to persons

resident outside it, or in denying the

application of the English rule to these parties.

No argument has been suggested why an English

court, if free to do so, should renounce its own

rule. That rule ought, in my opinion, to apply."

31. This flexible approach, although rejected by the New South Wales Court of Appeal in Kolsky, was endorsed by Adam J. in Corcoran v. Corcoran [1974] VicRp 22; (1974) VR 164, by Marks J. in Borg Warner (Aust.) Ltd. v. Zupan [1982] VicRp 44; (1982) VR 437 and by the Full Court in the present case. See also Kemp v. Piper and Warren v. Warren (1972) Qd R 386. It is appropriate for this Court to recognize the developments in the common law, especially as reflected in the judgments in Chaplin v. Boys, and to accept that the flexible approach enunciated by Lord Wilberforce is less parochial and can be applied to give appropriate significance to the lex loci delicti and the lex fori in all the circumstances. To recognize the existence of this flexible exception is not to introduce means by which the general rule can be subsumed, as counsel for the appellant suggested. The flexible exception does not confer an unfettered judicial discretion enabling the general rule to be ignored in arbitrary fashion. As Lord Wilberforce recognized, at p.391:

"It will not be invoked in every case or even,

probably, in many cases. The general rule must

apply unless clear and satisfying grounds are

shown why it should be departed from and what

solution, derived from what other rule, should be

preferred."

32. It is only in special circumstances where, after examination of the policy underlying the law which may be applied and the interests of the parties to be affected, it is clear that the lex loci delicti has no real connection with the proceedings, that the exception can be invoked, enabling a plaintiff to recover damages available in the lex fori but not available in the lex loci delicti. Such a requirement should do much to alleviate any fears that unacceptable uncertainty will be introduced into this area of the law. There is, in the present case, where both parties at the time of the accident were resident in the Territory, no basis which could justify the application of the exception.

33. When this matter was first before the Court, it was argued by reference only to conflict of laws rules. Subsequently the Commonwealth, certain States and the Territory intervened and submissions were made by all concerned as to the implications of s.118 of the Constitution, s.18 of the State and Territorial Laws and Records Recognition Act 1901 (Cth) ("the Recognition Act") and also as to the position of the third respondent having regard to s.56 of the Judiciary Act 1903 (Cth). With regard to the former two provisions, a preliminary question arises as to their application in these proceedings. If they do apply, a question then arises as to whether those sections should be given substantive or merely evidentiary effect.

34. Section 118 of the Constitution reads:

"Full faith and credit shall be given, throughout

the Commonwealth to the laws, the public Acts

and records, and the judicial proceedings of

every State."

The section applies to the Territory. This is because the Territory is included in the phrase "throughout the Commonwealth": Lamshed v. Lake [1958] HCA 14; (1958) 99 CLR 132, at p 142 (Dixon C.J.). However, s.118 in its terms is confined to State laws and does not purport to apply to the laws of the Territory: Anderson, at p.31 (Kitto J.). In consequence, while s.118 requires courts of the Territory to give full faith and credit to the laws of the States, the converse is not true - the States do not, by virtue of s.118, have to give full faith and credit to territorial laws. More accurately, the imperative in s.118 does not extend to the laws of the Territory.

35. It follows then that s.118 is not in its operation directly relevant to the resolution of this appeal. The consequences it may have for choice of law rules when a statute of one State is considered by the court of another State is something which may await another day.

36. The Commonwealth also submitted that s.18 of the Recognition Act was not relevant to the outcome of this appeal. This submission was supported by counsel for Queensland and South Australia. Section 18 reads:

"All public acts records and judicial proceedings

of any State or Territory, if proved or

authenticated as required by this Act, shall have

such faith and credit given to them in every

Court and public office as they have by law or

usage in the Courts and public offices of the

State or Territory from whence they are taken."

37. Two differences exist between this provision and s.118 of the Constitution. While the latter includes the word "laws", the former does not. In addition, s.118 speaks of "public Acts" while s.18 refers to "public acts". These distinctions formed the basis of the submission that s.18 had no application to the statute law of the States and territories. As a matter of statutory construction, it was urged that the word "Acts" was an appropriate reference to statute law; thus the use of the lower case must have been intended as a reference to the acts of administrative officers. There is no doubt that the expression "public Acts" encompasses State statutes. State Interpretation Acts commonly deem Acts passed in the State to be public Acts. The issue to be determined, though, is whether the reference to "public acts" in s.18 is sufficient to encompass State or territory legislation.

38. Counsel for the Commonwealth submitted that it was not. This submission is reinforced by the distinction made throughout the Recognition Act between "Acts" and "acts". In s.8, when reference is made to State legislation the words "State Act" are used. (This is consistent with s.38(3) of the Acts Interpretation Act 1901 (Cth).) In contrast, in s.7 the lower case is used to refer to an "act of state". Similarly, in ss.14 and 14A, "act" was considered appropriate to refer to certain acts of the Governor-General, State Governor or a Minister of the Crown.

39. Counsel for the Territory attached no significance to the difference between "acts" and "Acts". In doing so he called in aid a 1901 marginal note to s.18. In that side note, which no longer appears, reference was made to s.118 of the Constitution and to United States Congressional legislation of May 26, 1790, ch.XI and March 27, 1804, ch. LVI. This, it was argued, made United States case law applicable to the interpretation of s.18. And that case law, it was submitted, has consistently held that "public acts" refers to statute law. Bradford Electric Light Co. v. Clapper [1932] USSC 91; (1932) 286 US 145, at pp 154-155, was cited in support of that proposition.

40. I would reject this submission. Marginal notes are not to be read as part of an Act: Acts Interpretation Act, s.13(3). They are not, therefore, to be taken into account for the purposes of interpretation: Bradley v. The Commonwealth [1973] HCA 34; (1973) 128 CLR 557, at p 577 (Barwick C.J. and Gibbs J.). Cf. Stephen J. in Dugan v. Mirror Newspapers Ltd. [1978] HCA 54; (1978) 142 CLR 583, at p 594. Counsel sought to avoid this prohibition by referring to Pearce, Statutory Interpretation in Australia, 2nd ed. (1981), p.57 where is cited the decision of the House of Lords in The Queen v. Schildkamp (1971) AC 1. While the judgments of Lords Reid and Upjohn in that case give limited support to the use of marginal notes as an aid to interpretation, they do so on the basis that the marginal note forms part of the printed Act: at pp.10, 28. This approach is not open with federal legislation, given the terms of s.13(3) of the Acts Interpretation Act. Nor does it seem open on the facts of this particular case, for while the marginal note appeared in the Recognition Act as first enacted, it no longer does so.

41. Even if counsel's submission was taken at its highest so that the 1901 marginal note incorporated by reference American case law, it is doubtful whether that case law supports the proposition contended for. While it is true that Brandeis J., delivering the opinion of the court in Bradford, stated that statutes were included within the expression "public act", that case concerned the interpretation of Art.4 s.1 of the United States Constitution. That provision is in the following terms:

"Full Faith and Credit shall be given in each

State to the public Acts, Records, and judicial

Proceedings of every other State. And the

Congress may by general Laws prescribe the Manner

in which such Acts, Records, and Proceedings

shall be proved, and the Effect thereof."

Bradford, therefore, is not authority for the proposition that "public acts" includes a reference to statute law. It is authority only for the proposition that statutes are within the expression "public Acts" in Art.4 s.1. The congressional legislation of 1790 does not take the matter any further. That provision, although it referred to "acts", made it clear that what was contemplated was "acts of the State legislatures". Only the congressional legislation of 1804 uses "acts" in the lower case when referring to legislation.

42. There is no reason to think that the different references to "Acts" and "acts" found in the Recognition Act are simply an oversight. It seems that a deliberate attempt was made by the draftsman to differentiate between the upper and lower case. The result of doing so was that "Acts" is to be taken as a reference to legislation while "acts" refers to the activities of certain individuals. In any case, s.18 only requires faith and credit to be given to those matters which are proved or authenticated as required by the Recognition Act. There is no provision in that Act whereby State or territory legislation can be so proved or authenticated. Finally the omission of the word "laws" from s.18 strengthens the conclusion already reached that the section does not apply to State or territory legislation.

43. For the above reasons it follows that s.18 is not applicable to these proceedings. This makes it unnecessary to determine whether s.18 is merely an evidentiary provision or a substantive one. It is also unnecessary to consider whether the language of s.51(xxv) of the Constitution is wide enough to support s.18, there being no reference in the placitum to "public acts". In the case of the Territory, s.122 of the Constitution would meet any defect, if there be one in s.18 by reason of the reference to "public acts": see Spratt v. Hermes [1965] HCA 66; (1965) 114 CLR 226.

44. To say that s.118 of the Constitution and s.18 of the Recognition Act are unavailable in the present case should not obscure the fact that the question before the Supreme Court of Victoria was whether recognition should be given to a statute of the Territory directly applicable to the circumstances giving rise to the appellant's claim. The sections mentioned are recognition of the fact that Australia is, in the words of the preamble to the Commonwealth of Australia Constitution Act 1900 (Imp.), a "Federal Commonwealth". Whether it be appropriate in some cases to think of the States as foreign countries for choice of law rules, it does not follow that this should be a universal or indeed the ordinary rule. The High Court, Federal Court and the Supreme Courts of the States and the territories are courts of one nation, administering the same common law and, to the extent that they are invested with federal jurisdiction, exercising a common jurisdiction. Their interchangeability of jurisdiction is emphasized by the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) which confers the jurisdiction of the Federal Court on State and territory Supreme Courts and the jurisdiction of Supreme Courts on the Federal Court, in the circumstances there mentioned. See Mason and Crawford, "The Cross-vesting Scheme" (1988) 62 Australian Law Journal 328.

45. It is hard to quarrel with the comment of Marks J. in Borg Warner (Aust.) Ltd. v. Zupan, at pp 460-461:

" Having regard to present-day mobility of

people and traffic in and out of the Australian

States and Territories individual schemes must be

seen as operating together to form something in

the nature of a single interlocking structure for

the nation. The application of private

international law rules as though each scheme was

that of a sovereign state at arm's length tends

to frustrate their planned operation, and

increases the likelihood of unintended windfalls

and losses."

46. Consistently with the common law choice of law principles as they have now developed and consistently with the relation of Victoria and the Territory as members of the federation, it is appropriate that the Supreme Court of Victoria should apply the law that would have been applied had the appellant's claim been brought in the Supreme Court of the Northern Territory.

47. I turn now to the position of Telecom. It may be taken that Telecom is the Commonwealth within the meaning of s.56 of the Judiciary Act: see Bolwell v. Australian Telecommunications Commission (1982) 61 FLR 154 and also Inglis v. Commonwealth Trading Bank of Australia [1969] HCA 44; (1969) 119 CLR 334; Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362 and Crouch v. Commissioner for Railways (Q.) [1985] HCA 69; (1985) 159 CLR 22 which deal with other statutory bodies. In consequence, it was argued, the plaintiff should have commenced proceedings either in the High Court or in the Supreme Court of the Northern Territory. The question then arises whether the plaintiff's action was properly brought in Victoria. The answer to this depends on the character of s.56 and whether the Commonwealth can voluntarily submit to the jurisdiction of the Victorian courts despite the section. For relevant purposes s.56 provides that the appellant's claim against the Commonwealth may be brought in the High Court or in the Supreme Court of the Northern Territory.

48. In Suehle v. The Commonwealth [1967] HCA 13; (1967) 116 CLR 353 Windeyer J., when discussing the effect of s.56 said, at p 355, that:

"... jurisdiction in such a cause is not

exerciseable by all courts which, anywhere in

Australia, have jurisdiction in actions arising

out of 'foreign' torts. The section states that

a plaintiff who sues the Commonwealth in contract

or tort may do so in this Court, or in the

Supreme Court of the State or Territory in which

the claim arose, or ... in any other court of

competent jurisdiction in that State or

Territory. These are the only courts in which an

action can be brought by a subject against the

Commonwealth." (emphasis added).

49. This passage was referred to by Connor J. in Coe v. Queensland Mines Ltd. (1974) 24 FLR 459, at pp 466-467. In that case the Commonwealth entered an unconditional appearance. In asking, at p.466, "whether the Commonwealth through the executive can take the step of submitting the Commonwealth to the jurisdiction of a court which is not authorized by Parliament to hear the matter" Connor J. answered the question in the negative.

50. He stated, at p.467:

" It seems to me that by purporting to submit

the Commonwealth to the jurisdiction of this

Court in this matter the executive confers a

right on the plaintiff to make a claim against

the Commonwealth in a court which has not been

designated by Parliament. If Parliament wished

to do so it could no doubt provide in the

Judiciary Act 1901-1969 or elsewhere that a

person making a claim against the Commonwealth

could bring a suit in any Supreme Court of a

State or Territory irrespective of where the

claim arose; but Parliament has not done so; and

I am disposed at present to think that the

executive cannot do so."

51. Connor J. did add a caveat to these observations that "(t)his aspect of the matter was not argued". Although he later gave counsel opportunity to argue the point, this invitation was not accepted: see at p.468.

52. If these two authorities are accepted, then the Commonwealth's voluntary submission in this case had no effect. It would follow that the Victorian court had no jurisdiction in this matter. But the arguments in favour of the ability of the Commonwealth to submit to jurisdiction rest on both authority and principle.

53. In The Commonwealth v. Baume [1905] HCA 11; (1905) 2 CLR 405 Griffith C.J. said, at pp 412-413:

" Some points appear free from doubt. It has

always been held that a sovereign power invoking

the assistance of a Court of justice as plaintiff

submits itself to the jurisdiction of the Court

for the purposes of the suit .... On the other

hand, a Court of justice has no jurisdiction

against a sovereign power which does not subject

itself, or is not subjected by Statute, to its

jurisdiction. There can be no doubt that sec.56

of the Judiciary Act 1903 operates as a

submission by the Commonwealth to the

jurisdiction of the High Court or a State Court

in cases falling within the section."

54. This passage contemplates two methods of submission to jurisdiction: one statutory, the other voluntary (hence the expression "subject itself"). It thus supports the view that s.56 is not the only way in which the Commonwealth's common law immunity from suit is waived. Undoubtedly s.56 does waive that immunity but it does not do so exhaustively; waiver can also be achieved, apart from s.56, by the Commonwealth subjecting itself to jurisdiction.

55. Quite apart from authority, the Commonwealth Solicitor-General submitted that as a matter of principle there was no reason why the Commonwealth could not submit just like any other litigant. In my view the Commonwealth can voluntarily submit to jurisdiction. This conclusion does not contradict s.56. Section 56 simply achieves a statutory waiver of Commonwealth immunity. There is no inconsistency in concluding that over and above this statutory waiver the Commonwealth can, if it wishes, submit like any other litigant. After all, s.56 does not in its terms state that a plaintiff "shall only sue" in either the High Court or the Supreme Court of the place of the wrong, which it could have stated if it was intended to be an exhaustive provision dealing with waiver of immunity from suit.

56. Of the two cases opposed to this conclusion, it should be noted that the comments of Windeyer J. in Suehle were obiter. In addition, the observations of Connor J. in Coe were made without the benefit of argument. Neither judge referred to the judgment of Griffith C.J. in Baume which was relied upon in this case.

57. Section 56 must be considered in conjunction with s.39 of the Judiciary Act. The latter section invests the courts of the States with federal jurisdiction "in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it ...". There is an exception and there are conditions and restrictions, none of which is applicable here. In The Commonwealth v. Evans Deakin Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254, at p 264 the majority commented:

"The Supreme Court is given jurisdiction to

entertain a suit to which the Commonwealth is a

party by the combined effect of s.39(2) of the

Judiciary Act and s.75(iii) of the

Constitution."

In the present case s.39(2) operates to confer jurisdiction on the Supreme Court of Victoria to entertain a claim against the Commonwealth. Notwithstanding s.56, the Commonwealth may submit to the jurisdiction of that Court and that is what it has done in the present case.

58. This conclusion makes it unnecessary to deal with a submission made by the Solicitor-General for South Australia that s.21 of the Telecommunications Act 1975 (Cth) may itself subject Telecom to the jurisdiction of the Supreme Court of Victoria. Section 21(1)(d) enables the Commission to "sue or be sued in its corporate name". However, it is unlikely that a section dealing with the constitution of the Commission should have been intended to place Telecom outside the operation of s.56 of the Judiciary Act.

59. In the case presently before the Court, the appellant was at the time of his accident resident in the Territory. So too were the first respondent and the second respondent, for whose alleged negligence the third respondent is sued vicariously. The no-fault scheme is expressly aimed at residents of the Territory in relation to accidents in the Territory; it does not purport to apply to those who are not resident when injured. The limitation on the right of Territory residents to claim damages cannot be described as merely procedural. Clearly it is a matter of substance. In the appellant's submission, the Act is concerned only to control actions for damages in the Territory and evinces no interest in restricting recovery in actions outside the Territory. This, I think, takes too simplistic a view of the legislation. Certainly, so far as is relevant to this appeal, the Act does not seek to have extra-territorial operation; but, equally, it does set out to limit severely the common law damages that may be recovered in the case of a resident who is injured in the Territory. That, no doubt, has a number of important implications both for injured persons and those who injure them. It is the Territory with which the accident and the parties, at the time of the accident, had a close connection. There was no connection with Victoria relevant to the commission of the tort.

60. Undoubtedly there are significant policy considerations in the selection of an appropriate law. Fawcett, "Policy Considerations in Tort Choice of Law" (1984) 47 Modern Law Review 650 suggests that these conditions may operate at a multinational level, a party level and a jurisprudential level. It is unnecessary to agree with the whole of the learned author's analysis to see that, in the present case, requiring civil liability between the parties according to the lex loci delicti in respect of the relevant claims made in the forum acknowledges the relationship between the Territory and Victoria, gives appropriate recognition to the law of the former, effects a proper balance of the interests of the parties including the prevention of forum shopping, and produces a rule which has reasonable certainty and ease of application. This approach also gives due recognition to the place of Victoria and the Territory within the Federal Commonwealth.

61. The argument on behalf of the appellant that if the forum chosen by him is not the natural or appropriate forum, his action may be stayed, is not sufficient. The question is not one of forum non conveniens; it is more deeply rooted than that.

62. The appeal should be dismissed.

ORDER

Appeal dismissed with costs.