Harding v Wealands

Under the Private International Law (Miscellaneous Provisions) Act 1995, the law of the place where a tort occurs governs all issues unless another law is substantially more appropriate. That exception is demanding. Where the accident occurred in the defendant’s home country, that country is also her national legal connection, and the English links consist chiefly of residence, relationship and the place where consequences will be felt, the general rule will ordinarily remain in force.

Procedural matters are governed by the forum, but statutory restrictions affecting the existence, extent or enforceability of a right to recover damages are substantive. The restrictions in the Motor Accidents Compensation Act 1999, including caps, exclusions, a discount rate, interest provisions and credit for insurance payments, therefore formed part of the applicable New South Wales law.

Mr Harding suffered tetraplegic injuries in New South Wales when a vehicle driven by Ms Wealands, an Australian national, overturned. Proceedings were brought in England after Ms Wealands was served within the jurisdiction. Liability was later admitted.

Master Foster ordered a preliminary trial on the applicable law for the assessment of damages. Elias J held that English law applied, first because England was substantially more appropriate under section 12 of the Private International Law (Miscellaneous Provisions) Act 1995 and alternatively because the pleaded restrictions in the Motor Accidents Compensation Act 1999 were procedural.

The appeal concerned whether New South Wales law should be displaced and whether those restrictions were substantive or procedural. The central question was whether English law governed quantum or whether New South Wales law, including its statutory restrictions, applied.

The appeal was allowed by a majority. Lady Justice Arden and Sir William Aldous held that New South Wales law governed the substantive issues and that the pleaded restrictions in the Motor Accidents Compensation Act 1999 were substantive. Lord Justice Waller dissented on the second issue.

1. Applicable law. The court unanimously held that section 11 of the Private International Law (Miscellaneous Provisions) Act 1995 made New South Wales law the applicable law under the general rule. Section 12 permits displacement only where, after comparing the significance of the factors connecting the tort with the two countries, another law is substantially more appropriate. The relevant connections are connections with the tort, not merely with the issue being decided. The accident, the defendant’s Australian nationality, her New South Wales vehicle, licence and insurance, and the place where the injury occurred were given greater weight than the parties’ English residence, relationship and the fact that the consequences would be experienced in England.
2. Appellate review. The court accepted that an appellate court must be cautious before interfering with a trial judge’s evaluation under a vague, multi-factor standard. That caution did not prevent intervention where the evaluation could not reasonably be accepted on the facts.
3. Substance and procedure. The majority held that section 14(3)(b) preserves the forum’s procedural law, but that characterisation must be made in context. The relevant question is whether the foreign restrictions affect the existence, extent or enforceability of the right to recover damages, or merely regulate the mode and conduct of proceedings. There is no automatic bright line between heads and quantification of damages. Arden LJ treated the damages principle in Roerig v Valiant Trawlers Ltd [2002] EWCA Civ 21 as non-binding on this issue because the point had been considered only conditionally. Aldous LJ held that the ordinary meaning of procedure supported the same result.
4. MACA restrictions. The statutory provisions were properly treated as a package. Caps and exclusions, limits on gratuitous care, the discount rate, interest restrictions and credit for insurance payments affected the claimant’s substantive right to recover damages. They therefore applied as part of New South Wales law, while English procedural rules continued to govern the conduct of the proceedings.
5. Orders. Elias J’s order was set aside. Declarations were made that New South Wales law governed all substantive issues and that the provisions pleaded at paragraphs 5(b) to (h) of the defence were substantive and applied to quantum. Costs and repayment orders were also made.

Waller LJ would have held, following the traditional approach reflected in Roerig and the majority in Stevens v Head [1992] 176 CLR 433, that heads of damage were substantive but quantification was procedural. He would therefore have dismissed the appeal on the substance/procedure issue.

• Court of Appeal (Civil Division): In Harding v Wealands [2004] EWCA Civ 1735, the appeal was allowed. The order of Elias J was set aside and declarations were made that New South Wales law governed substantive issues and that the pleaded MACA restrictions were substantive.
• Queen’s Bench Division: Elias J held that English law applied under section 12 of the Private International Law (Miscellaneous Provisions) Act 1995. Alternatively, he held that the MACA restrictions were procedural and would not be applied by the English court.
• Master Foster: On 31 October 2003, preliminary issues were ordered for trial, including the applicable law for assessment of damages. An earlier application to stay the proceedings in favour of New South Wales had been dismissed on 10 July 2003, without appeal.