Distillers Co (Biochemicals) Ltd v. Thompson. [1971] AC 458 (Privy Council on appeal from the New South Wales Court of Appeal)

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1 Distillers Co (Biochemicals) Ltd v. Thompson [1971] AC 458 (Privy Council on appeal from the New South Wales Court of Appeal) The place of a tort (the locus delicti) is the place of the act (or omission) on the part of the defendant which gives the plaintiff a cause of complaint in law. Stated in other words, the place of a tort is the place where in substance the defendant s wrongdoing occurred. In this regard, the place where the plaintiff suffered damage, including the damage which gives the plaintiff a complete cause of action in tort, is not, as such, the place of the tort. Background The plaintiff, Laura Anne Thompson, and her mother were residents of New South Wales. The plaintiff was born on 10 April 1962 with serious disabilities (no arms and defective eyesight) which the plaintiff alleged were caused by the drug thalidomide, an ingredient of a sedative and sleep-inducing drug marketed under the trade name Distaval purchased on prescription and consumed by the plaintiff s mother in New South Wales during the first three months of pregnancy i.e. while the plaintiff was in her mother s womb. The defendant, Distillers Co (Biochemicals) Ltd, an English company which did not carry on business in New South Wales, had manufactured and packaged the Distaval in England. The printed information which was packaged with the drug described Distaval as a harmless, safe and effective sedative with no side effects. The Distaval consumed by the plaintiff s mother had been marketed in New South Wales by a New South Wales company which had purchased the drug from the defendant in England. The plaintiff commenced tort proceedings against the defendant in the Supreme Court of New South Wales in which, in essence, the plaintiff claimed that the defendant had been negligent in failing to warn the plaintiff s mother of the dangers of thalidomide to an unborn child (the plaintiff). The question of law at the present stage of the proceedings was whether, assuming the plaintiff had a good cause of action against the defendant, the cause of action arose in New South Wales within the meaning of s 18(4)(a) of the Common Law Procedure Act 1899 (NSW) (which authorised the Supreme Court of New South Wales to permit a plaintiff to proceed to final judgment if a non-resident defendant did not appear after service of the originating process). Disposition The Privy Council, dismissing the defendant s appeal from the decision of the New South Wales Court of Appeal (reported (1968) 70 SR (NSW) 274) which had dismissed the defendant s appeal from the primary judge, Taylor J (reported (1967) 87 WN (Pt 1) (NSW) 69), held that the plaintiff s cause of action against the defendant had arisen in New South Wales.

2 Judgment extract LORD PEARSON (who delivered the judgment of the Privy Council stated the facts and question of law and continued as follows). [466] Next to be considered is the question of principle--what is required in order to show, for the purpose of section 18(4)(a) of the Act of 1899 [the Common Law Procedure Act 1899 (NSW)], that there is a cause of action which arose within the jurisdiction [New South Wales]. There seem to be three possible theories: (i) that the cause of action must be the whole cause of action, so that every part of it, every ingredient of it, must have occurred within the jurisdiction; (ii) that it is necessary and sufficient that the last ingredient of the cause of action, the event which completes a cause of action and brings it into being, has occurred within the jurisdiction; and (iii) that the act on the part of the defendant which gives the plaintiff his cause of complaint must have occurred within the jurisdiction. There is an authoritative case which in spite of its antiquity is important and apposite. That is the case of Jackson v. Spittall (1870) LR 5 CP 542, decided under sections 18 and 19 of the English Common Law Procedure Act Section 18 of the Act of 1899 is very similar in subjectmatter and wording to sections 18 and 19 of the English Act of Counsel has stated that these two sections of the English Act of 1852 were in effect adopted by the New South Wales Common Law Procedure Act 1853, which was repealed and evidently to some extent re-enacted in the Act of At any rate the wording of section 18(4)(a) of the Act of that there is a cause of action which arose within the jurisdiction is identical with that of the corresponding provision of the English Act of [Lord Pearson discussed the decided cases and observed (at p 467) that, in the highly authoritative decision in Jackson v. Spittall (1870) LR 5 CP 542, the Court of Common Pleas, in a judgment given by Brett J, had decided that cause of action in the English Act of 1852 did not mean the whole cause of action but meant the act on the part of the defendant which gives the plaintiff his cause of complaint. ] [467] Their Lordships agree with the view, expressed directly by Wallace P and perhaps inferentially by Asprey JA [in the New South Wales Court of Appeal], that Jackson v. Spittall was correctly decided. That rules out no. (i) of the three possible theories set out above--the theory that cause of action means the whole cause of action and the courts of a country do not have jurisdiction unless all the ingredients of the cause of action occurred within the country (unless the defendant happens to be present in the country). In any case that theory is too restrictive for the needs of modern times. No. (ii) of the three possible theories--viz., that it is necessary and sufficient that the last ingredient of the cause of action, the event which completes it and brings it into being, has occurred within the jurisdiction--seems to their Lordships to be wrong as a theory. The last event might happen in a particular case to be the determining factor on its own merits, by reason of its inherent importance, but not because it is the last event. In a negligence case the 2

3 happening [468] of damage to the plaintiff is a necessary ingredient in the cause of action, and it is the last event completing the cause of action. But the place where it happens may be quite fortuitous and should not by itself be the sole determinant of jurisdiction. One example would be this: suppose that a defendant carries on business in New South Wales and there he manufactures and distributes Distaval and sells a packet of it to the plaintiff s mother without warning of the danger: the defendant very soon afterwards gives up his business and retires to live in another country or state: the plaintiff s mother after purchasing the packet goes on holiday to any country in the world, say South Africa, and there consumes the Distaval whereby (it is assumed) the damage to the plaintiff is caused: the plaintiff s mother returns to her home in New South Wales. On those facts, if the theory were right, the courts of New South Wales would have no jurisdiction and the courts of South Africa (if there was a South African statute containing provisions similar to section 18(4)(a) of the Act of 1899) would have jurisdiction to entertain the action, though perhaps in the exercise of their discretion they might decline to entertain it. That is the result of the theory in such a case, and it is not a sensible result: the jurisdiction is wrongly allocated. It is manifestly just and reasonable that a defendant should have to answer for his wrongdoing in the country where he did the wrong. It is at any rate not manifestly just or reasonable that the defendant should have to answer for his wrongdoing in any country in the world to which the plaintiff (or the plaintiff s mother in a case such as this) may have happened to go before the damage occurred. It is not the right approach to say that, because there was no complete tort until the damage occurred, therefore the cause of action arose wherever the damage happened to occur. The 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? Theory no. (iii) is that the cause of action arose within the jurisdiction if the act on the part of the defendant, which gives the plaintiff his cause of complaint has occurred within the jurisdiction. That is the rule laid down in Jackson v. Spittall (1870) LR 5 CP 542, which is an authoritative case, and the rule is inherently reasonable, as the defendant is called upon to answer for his wrong in the courts of the country where he did the wrong. The rule does not, however, provide a simple answer for all cases. [I]n some cases, particularly those in which the principle of Donoghue v. Stevenson [1932] AC 562 is relied upon, there may be a separation in time and place between the negligent behavior of the defendant and the resulting damage to the plaintiff. [469] On the one hand X is the country where the defendant was negligent and on the other hand Y is the country in which the defendant s negligence caused the plaintiff to be hurt. The problem is a difficult one and there is no need to express any opinion on it in the present case. In the present case on the assumptions made for the purpose of testing jurisdiction there was negligence by the English company in New South Wales causing injury to the plaintiff in New South Wales. So far as appears, the goods were not defective or incorrectly manufactured. The negligence was in failure to give a warning that the goods would be dangerous if taken by an expectant mother in the first three months of pregnancy. That warning might have been given by putting a warning notice on each package as it was made up in England. It could also have been given by communication to persons in New South Wales--the medical practitioners, the wholesale and retail chemists, patients and purchasers. The plaintiff is entitled to complain of the lack of such communication in New South Wales as negligence by the defendant in New South Wales causing injury to the plaintiff there. That is the act (which must include omission) 3

4 on the part of the English company which has given the plaintiff a cause of complaint in law. The cause of action arose within the jurisdiction. For the reasons which have been given their Lordships are of opinion that the decision of Taylor J and the [New South Wales] Court of Appeal was right and should be affirmed. Notes Appeal dismissed 1. Although the particular question in Distillers (above) was whether the plaintiff s cause of action in tort against the defendant arose in New South Wales within the meaning of s18(4)(a) of the Common Law Procedure Act 1899 (NSW), it is implicit in the reasoning of the primary judge (Taylor J), the New South Wales Court of Appeal and the Privy Council that the place where a cause of action in tort arose is the place where the tort was committed. 2. The present-day procedural rules for the service of the originating process of the Supreme Court of New South Wales outside Australia are contained in Part 11 of the Uniform Civil Procedure Rules 2005 (NSW). With particular reference to tort proceedings: see Schedule 6(a). At the time of Distillers, the Common Law Procedure Act 1899 (NSW) contained no equivalent of Schedule 6(a)(ii) (tort damage sustained wholly or partly in Australia). As the language of Schedule 6(a)(ii) of the Uniform Civil Procedure Rules 2005 (NSW) clearly states, it is a sufficient basis for the service of originating process outside Australia in tort proceedings if the plaintiff has suffered any damage in Australia in respect of which damages in tort may be recovered regardless of where the tort was committed. See, e.g., Regie Nationale des Usines Renault SA v Zhang (2002) 187 ALR 1 where, in proceedings by a resident of New South Wales to recover damages for serious personal injury suffered as the result of a tort alleged to have been committed in France by the defendant, the originating process of the Supreme Court of New South Wales was served on the defendant in France pursuant to the equivalent of Schedule 6(a)(ii) in the former Part 10 of the Supreme Court Rules 1970 (NSW). Compare Oceanic Sun Line Special Shipping Co Inc v. Fay (1988) 165 CLR 197 where the plaintiff, a resident of Queensland, suffered serious personal injury in an accident on a Greek-registered cruise ship operated by the defendant, a Greek corporation, while the ship was in Greek territorial waters. After emergency medical treatment in Greece, the plaintiff returned to Australia and received further medical treatment in New South Wales before returning to his home in Queensland. In the plaintiff s proceedings in tort against the defendant in the Supreme Court of New South Wales, it was not in contention that, for the purpose of the service of the originating process on the defendant in Greece pursuant to the equivalent of Schedule 6(a)(ii) in the former Part 10 of the Supreme Court Rules 1970 (NSW), the plaintiff had suffered damage in New South Wales. 3. The reasoning in Distillers (above) was applied in the context of choice of law, as distinct from jurisdiction, in James Hardie & Co Pty Ltd v. Putt (1998) 43 NSWLR 554 where a New Zealand resident brought tort proceedings in New South Wales against two New South Wales companies (the defendants) which had supplied raw asbestos fibre (a substance not inherently dangerous) to the plaintiff s employer in New Zealand. The plaintiff alleged that, in the course of employment which involved the manufacture of asbestos cement at a factory in New Zealand using the raw asbestos fibre, he contracted mesothelioma as the result of inhaling asbestos dust and that a cause of this injury was the negligent failure of the defendants to warn him of the risks associated with asbestos. Sheller JA (with whom Beazley and Stein JJA agreed) observed (at p 576) : if the defendants owed the plaintiff a duty of care it was breached when and at the place where the plaintiff was exposed to dust from the asbestos without adequate warning. In this case, properly understood, the defendants did the wrong complained of in New Zealand. Leave to appeal from this decision was refused by the High Court of Australia: Putt v. James Hardie & Co Pty Ltd S76/1998 (7 August 1998). See also Amaca Pty Ltd v. Frost (2006) 67 NSWLR 635. In this case, the plaintiff, while employed by an insulation contractor in New Zealand, was exposed to asbestos fibres from an insulation product manufactured by James Hardie & Co Pty Ltd (now the defendant, Amaca Pty Ltd) in New South Wales and distributed by it in New Zealand. As a result of this exposure, the plaintiff alleged he had contracted asbestos-related diseases for which the defendant was liable in negligence. In applying the Distillers test, the New South Wales Court of Appeal held that, as a matter of substance, the plaintiff s cause of action in tort against the defendant had arisen in New Zealand. In reaching this conclusion, Spigelman CJ (with whom Santow and McColl JJA agreed) observed (at para 43) that the defendant s product was inherently dangerous, in the sense that it could not be safely used without special precautions. It was not, however, defective in the sense that something went wrong in the manufacturing process. (emphasis added) Spigelman CJ gave particular weight (para 41) to the fact that the manufacture of the insulation product in New South Wales was directed in particular to its distribution in New Zealand (and Australia). His Honour also observed (at para 20): Each case turns on its facts and it will rarely be appropriate to try to reason on the basis of factual analogies. 4

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