CHOICE OF LAW: TORT

Please note the main focus of your reading should be on the common law rules on choice of law in tort that apply in Hong
Kong. English text books on this topic now focus on the European rules and say little about the common law position.
Reading Johnson 5.075-5.096
Clarkson & Hill p294-296 4th edition on common law rules; p257-270 4th edition and p287 4th edition on European rules
(no detailed knowledge of the European rules is required -just have a basic idea as to how they operate so you can better
understand weaknesses in Hong Kongs law)
Cases
Red Sea Insurance v Bouygues [1995] AC 190
Pei Zheng Middle School v China Pui Ching Educational Foundation [2010] HKEC 658
v Eton Properties Ltd [2016] HKEC 872 CA a very complicated case just focus on PIL
issues at par 215-216 and 234 -236
Kwok Yu Keung v Yeung Pang Cheung [2005] HKCFI 779
WINROW v HEMPHILL
Articles
Choice of Law in Tort: A Missed Opportunity? Rogerson 1995 [Vol 44] International and Comparative Quarterly p 650
Choice of Law in Tort: The role of the Lex Fori. Carter 1995 Cambridge Law Journal p38

1. Tort committed in HK
a. Tort occurs HK, HK law applies
b. METALL und ROSTOFF If in any given case the court concludes that under [HK] law a
tort has been both committed by the defendant and committed in this country, we see no
reason either on principle or authority why he should be entitled to claim exemption by
reference to some foreign law, and so we do decide
c. Cocoon exception (not HK): 2 people from France in holiday in Macau, one is negligent in
driving and injures another. Apply law of country both countries habitually resident in even
tort not occurred in that country.
2. Tort committed outside HK
a. Which law applies? Very complex Over-complicated and apt to confuse the unwary
Johnston par 5.094
b. Lex fori (HK law)? Lex loci delicti (law of country where tort occurred)? Difficult to know
where exactly committed. Closest and most real connection? Connection with lots of
countries.
c. HK law adopts a complex mixture of all three!
d. General rule double-actionability (many countries abolished) 11:44
i. Lord Wilberforce in BOYS v CHAPLIN DOUBLE ACTIONABILITY TEST. P can
recover damages for tort committed abroad if
1. actionable as a tort in English[HK] Law lex fori
2. D civilly liable under lex loci delicti (i.e. a tort in HK)
ii. D must therefore be civilly liable to P in respect of the tort under both laws.
DOUBLE HURDLE
iii. An act done in a foreign country is a tort if it is both
1. (1) wrongful according to the laws of the country where it was done, and,
2. (2) wrongful according to [HK] law, i.e., is an act which, if done in [HK],
would be a tort (Dicey, Conflict of Laws 1st edition (1896), Rule 175, p659)
iv. If the DA is not satisfied, then (subject to the exception) the court cannot make any
award in Ps favour.
1. Note that the rule also applies to heads of loss so even though there is a tort in
both countries if, for example, in the foreign country pain & suffering is not
recognised as a head of loss then it cannot be recovered in Hong Kong.
(16:49)
2. E.g. pain and suffering awarded under PI. Cannot claim head of loss in HK
unless both recognized both under HK law and foreign jurisdiction.
3. Apply HK law if double action rule satisfied.
v. General rule can be unfair

vi.

vii.
viii.
ix.

1. DA rule means P can have no claim in HK even though a tort has been
committed under HK law if in the foreign country there is no civil liability
because e.g. there is a no fault compensation scheme or contributory
negligence is a total defence or there is criminal liability only McMILLAN v
CANADIAN NORTHERN RAILWAY CO.
a. A man injured at work in Ontario. Anybody injured in work got a sum
of money. No concept for suing for negligence, fault free, strict
liability system. Man brought thr claim under other state, double action
rule applies. No tort committed in Ontario.
2. Also can have no claim for a head of loss not recognised in the foreign country
MELROY v MALLISTER
a. 2 Scottish people crossed border into England and Scottish driver
negligent and crashed into the car, killed the man. Widow sues for
negligence. Tort occurred in England. Under uk kaw: damages of
ABCX. Scottish law: DCFX. Under DA rule only X available under
both laws.
Hong Kong examples1. PEI ZHENG MIDDLE SCHOOL v CHINA PUI CHING EDUCATIONAL
FOUNDATION LTD [2010] HKEC 658:
a. Plaintiff was a well regarded chain of schools in mainland and HK. D
opened schools. P sued for misrep in HK, passing off. Establishes all
claim in HK tort law. Bring in mainland law expert that gives evidence
that there is tort in mainland, enough even if difference tort name.
established DA.
2. v Eton Properties Ltd [2016] HKEC 872 CA par
215-216
a. DA rule not complied with. One of head of loss P claiming against
mainland D was damages under tort of inducing breach of contract.
CA: it occurred in mainland and under mainland law this economic
tort not recognized.
Presumption that foreign law same as HK law??? (29:33)
Look at complete tort including any defenses. DA rule not satisfied if tort in HK but D
has no defense but under foreign law tort in HK but D not liable because he has
defense. Is there a civil liability in both countries?? Look also at defense.
EXCEPTION to GENERAL RULE (30:57)
1. NB: element of common sense!!! Exception to the rule!!! Only point for P is to
gain litigation advantage, e,g, Red Sea: HK didnt give him a claim even all
connecting with HK. Only apply when law favorable to P applies! (48:45)
2. RED SEA INSURANCE v BOUYGUES (PC, biding in HK)
a. The courts have power to avoid injustice by introducing an element of
flexibility into the rule and apply the law of the country which has
the most significant relationship with the occurrence and with the
parties
b. Recognized DA rule can lead to grave injustice. Allow flexibility to
cater for injustice. But DA rule would be to apply normally.
c. Problem: no assistance when exception will/will not be applied.
3. Read carefully the two leading cases on this exception BOYS v CHAPLIN
where the lex fori was applied and the RED SEA case where the lex loci
delicto was applied.
a. Both cases: Idea of applying close connected test undesirable. Because
test too vague.
b. Boys case: 2 English soldiers stationed in island of Malta. One driver
negligent and injured the other. P sued in UK for pain and suffering.
Head of loss not recognized under Maltas law. UK court applied

exception, only connecting factor is where accident took place, but

every other aspect of tort is connected to UK.
c. Red Sea: read sea insurance head office in HK. (HK connection) they
were responsible for insuring building project in Saudi. Builder claims
against Red Sea. Red sea sued sub-contract in Saudi. Problem: under
HK law, could not have a claim against sub-contractors but full claim
under Saudi law. DA test not satisfied but exception applied. Every
factor connected with Saudi except P have head office in HK. Nothing
to do with HK at all. Saudi law applied.
4. See also JOHNSON v COVENTRY CHURCHILL INTERNATIONAL and in
a. UK employer employed UK employee on a building site in Germany
and injured because negligent of UK employer. Under German law no
tort but a no fault compensation. Court applied exception and only
connecting factor with Germany is where the accident occurred.
5. Hong Kong KWOK YU KEUNG v YEUNG PANG CHEUNG [2005] HKCFI
779.
a. A road accident in mainland. P injured was a passenger in a coach. The
coach is driven by a HK driver and owned by HK Co. but tort occurred
in mainland but his main claim is against employer of bus driver under
vicarious liability. This concept is unknown in mainland at this time.
DA did not apply but court applied exception because only connecting
factor with mainland is where accident happened.
6. See also v Eton Properties Ltd[2016] HKEC 872
CA 234 -236
a. All connecting factor with UK. In favour of application of mainland
law where tort is not recognized
3. Problem where was the tort committed? (52:32)
a. As we have seen double actionability rule only applies where tort was committed abroad.
b. If tort committed in HK then it is a simple matter of applying HK law.
c. Test is where is the substance of the tort committed?
d. However, it may be difficult to decide thisyou buy in HK a car manufactured in Japan you
are injured because of its negligent design was the tort committed in HK or Japan?
e. No easy answer if country where tort was committed is different from country where damage
occurred most cases on this involve jurisdiction not choice of law and courts are quick to
find tort is committed in Hong Kong so that HK can have jurisdiction as of right
f. Leading case DISTILLERS V THOMPSON 1971 2 W.L.R 441
i. Right approach is when the tort is complete, to look back over the series of events
constituting it and ask the question, where in substance did this cause of action
arise? (e.g. place of acting (tort committed) or place of damage?)
ii. Illogical and impossible to have a simple test to decide where the tort is committed.
g. Case examples: GDH Ltd v CREDITOR CO LTD [2008] HKEC 1780; (57:10)
i. One of the gourds for jurisdiction is tort committed in the country. No concern with
which law to apply.
ii. Tort of conspiracy committed. HK court decided HK tort law applied because loss and
damage occurred in HK. Especially economic tort?
h. Cannot a tort commit in a country simply on factor that damage occurred there.
i. Universal Music case: solicitor responsible for drafting a contract in a negligent way.
And resulted in P need to pay out more money that he should have done. P argued
Dutch law should apply because damage occurred (payment out of Holland bank
account) EU court: by itself it is not enough because you can have bank account in
any country, if a tort committed against 5 people?
ii. ENNSTONE BUILDING PRODUCTS v STANGER [2002] EWCA Civ 916
1. Negligent advice given in UK and damage occurred in Scotland. P asked D to
come to Scotland and how the stains can be removed from stone. D went to
Scotland and examined the stone, and wrote a report. P & D based in UK and

D sent negligent advice in UK. Court: UK or Scottish law applied? Giving of

Negligent advice was fundamental. So tort occurred in UK. (ie. Mainland
sweet manufactured= occurred in mainland)
4. SUBSTANCE OR PROCEDURE: DAMAGES
a. Damages in tort falls within substance procedure twilight zone.
b. Hodson in Boys v Chaplin the law relating to damages is partly procedural and partly
substantive
i. DA rule could not apply in relation to head of loss of pain and suffering but applied
exception.
c. Leading case Harding v Wealands HL [2006] UKHL 32
i. Road accident in state of New South Wales. A cap on maximum amount in tort claim.
ii. Exception no use to him because all connecting factors are NSW. But the cap is
procedural, assessment of damages.
1. Substance is there liability, causation, remoteness, mitigation, contributory
negligence, volenti, deny a particular head of damage, see Hoffmann LJ
2. Procedure- assessment of damages
a. Boys v Chaplin Lord Wilberforce matters of assessment or
quantification. are for the lex fori to determine. Also procedure
some condition precedent in foreign law that must be fulfilled before P
can sue e.g. must first go through ADR.
b. Limitation period: tort committed, not statute barred. But in foreign
jurisdiction but a shorter limitation period with statute barred. HK
court: if foreign limitation period is like HK, could ignore. DA rule
would be satisfied. If wording of foreign rules is different and bars
right to damages, it is substantive and DA rule not complied with.
iii. Limitations imposed on amount of damages = assessment=procedure.
iv. See also Roerig v Valiant social security benefits deducted from damages =
procedure)
v. Rejected view of Arden LJ in CA that once the court decided the law of New South
Wales is a proper law of the tort, it is logical, so far as possible to apply the law of
New South Wales throughout
vi. NZ law applied to road accident case. No substantive tort for road negligence in NZ?
Procedural?
5. REFORM OF THE LAW?
a. HK out of step with most other countries in applying the double actionability rule
b. Most jurisdictions apply the lex loci delicti rule e.g. Australia, Canada, and from 1996 until
2009 England .US goes for a system similar to the closest connection rule
c. But is this an improvement? Problem of emphasis on lex loci delicti deciding case on basis
of foreign law involves the parties in unnecessary uncertainty and expense. Also problem of
deciding where the tort was committed.
d. Mainland recently reformed double actionability rule abolished general rule will apply the
lex loci delicti subject to two exceptions:
e. if both parties have same country of habitual residence that law applies .
f. If the parties choose a governing law after the tort occurred that law shall apply
g. European Changes
i. Rome II took effect January 2009
ii. General rule A 4 (1) Law of country where the damage occurs lex loci damni not the
country where the tort was committed.
iii. Exceptions Habitual residence A 4(2) If both parties were habitually resident in a
particular country when damage occurred that countrys laws applies. (The so-called
cocoon rule)
iv. More closely connected A4(3)
1. If tort manifestly more closely connected with a country other than those
above. Manifestly more closely connected might be based on a pre-existing
relationship between the parties, such as a contract which is closely connected

v.

vi.

vii.
viii.
ix.

with the tort. A very high standard is required to satisfy A4(3) WINROW v
HEMPHILL [2014] EWHC 3164
Would the decisions in Boys and Johnson have been different under these changes?
1. Johnson under EU rules: tort occurred in Germany (accident and damages).
s4(1) German law applied. Habitually residence when damage occurred:
Johnson residence Germany, employer England, exception not applied. S4(3):
tort is manifestly closely connected with UK than Germany? Rule similar to
DA exception rule. Same result.
Special rules to deal with deciding which law governs product liability A5
1. Manufacturer of sweets: (1:27:14) If goods were freely available in the
country the person is habitually residence, that law applied. E.g. sweets in sale
in HK shops, person injured were resident in HK, HK law applies. If not, then
apply law of country goods were bought.
Rome II now says quantification/assessment of damages =substance.
1. Law applicable to the tort will now also apply to the issue of assessment. Will
deter forum shopping.
However A26 will enable English judges to reject US scales of compensation-can
refuse to apply foreign law if manifestly incompatible with public policy
Choice of law clause
1. A14(1)(a) allows the parties to agree on what law should apply after the tort
occurs.
2. Where all the parties are pursuing a commercial activity, a pre-tort choice of
law clause is allowed
3. But not effective where all the elements relevant to the situation at the time
when the event giving rise to the damage occurs are located in a country other
than one chosen.