EVOLUTION IN PACIFIC CONTRACT LAW CONSISTENCY IRRATIONALITY OR

EVOLUTION IN PACIFIC CONTRACT LAW: CONSISTENCY, IRRATIONALITY OR THE EMERGENCE OF AUTHENTIC LOCAL COMMON LAW? ANITA JOWITT UNIVERSITY OF THE SOUTH PACIFIC ALTA, 7 -9 July 2016 Victoria University, Wellington

From ALTA day 1/Law & Culture Sian Elias ‘common root, but there is more divergence than is often appreciated’ Pacific law panel/Corrin Pluralism L&C � Q 1: ‘Why has the dream (of a South Pacific jurisprudence) not become a reality? ’ If we look to deep/normative pluralism and selection of norms into evolving common law instead of weak pluralism of use of customary law as alternative to common law then we do see reality of evolution & divergence � Pacific jurisprudences (not a regional jurisprudence) � Foreign judges/ well-meaning ‘judicial activists’ � What responses as law teachers should be

1. Post-colonial divergence: foundations Common law adopted only so far as suitable for local circumstances (exact statutory wording varies by jurisdiction) Nyali Ltd v Attorney-General [1956] 1 QB 1, per Lord Denning: � the common law is to apply 'subject to such qualifications as local circumstances render necessary. ' This wise provision should, I think, be liberally construed. It is a recognition that the common law cannot be applied in a foreign land without considerable qualification. Just as with an English oak, so with the English Common Law. You cannot transplant it to the African continent and expect it to retain the tough character which it has in England. It will flourish indeed, but it needs careful tending, so with the common law. It has many principles of manifest justice and good sense which can be applied with advantage to peoples of every race and colour all the world over: but it has also many refinements, subtleties and technicalities which are not suited to other folk. These off-shoots must be cut away. Affirmed in Solomon Islands Water Authority v Commissioner of Lands [2015] SBHC 58.

Other Pacific examples Namatak v Public Prosecutor No 1 [1986] VUCA 4 � We are in a newly emerging nation which was jointly administered by France and England according to French and English laws. Vanuatu no longer, relies upon Westernised sophistication and must develop its own approach. The Courts should not be quick to grasp at hair splitting technicalities. In re the Constitution, Timakata v Attorney-General [1992] VUSC � In real terms it means that, although the Courts of Vanuatu are not bound by any decisions of any of those courts, it can, nevertheless, allow itself to be guided and influenced by decisions of Courts such as those of the U. K, Canada, Australia, New Zealand, India, Papua New Guinea and others, within the Common law system. It can thus enrich its own jurisprudence by putting to good use and effect, those rules of law which have proved wise and successful

Pacific examples continued ANZ Banking Group Ltd v Ale (Uligia) [1980 -83] WSLR 468 � The debate as to whether all civil disputes must fall either into contract or tort or quasi-contract is a legitimate category it seems to me must be rather bemusing for the pragmatic bystander in the South Pacific half a world away from the esoteric discussions taking place in the Courts of England � the courts in Western Samoa should not be bogged down by academic niceties which have little relevance to real life

Why focus on contract? A purely pragmatic choice, based on semester 1 2016 teaching responsibilities Paper based on first two areas of divergence/ possible evolution I came across � In one semester there were others as well

2: Intention in family & social arrangements English contract law: � Both parties must share an intention to form a legally binding contract in order for an agreement to be legally enforceable � Agreements between family & in social settings are presumed not to be intended to be legally binding Balfour v Balfour the leading UK case � Corrin: This presumption can be easily rebutted (a matter of evidence) Some academic commentators suggest presumption has no place in modern contract law as it rests on an archaic public/private distinction that is now overturned in other areas of law � Intention to be determined using an objective standard (what a reasonable person would have assumed, from actions/context, the other party intended)

Case 1: Vave (SI) Walenenea had bus import business, Vave paid to have bus imported. Bus did not turn up so Vave sued Walenenea to get money back. One argument raised: we are friends, it was only a social arrangement so not legally binding Court rejected this outright – mentioned Balfour and AU case of Roufos v Brewster Straightforward illustration of application of established English legal principle in the Pacific

Case 2: Chand v Kumar (Fiji) Chand nephew of Kumar. Two contracts. One for Chand to buy house from Kumar. One for Chand to rent house from Kumar. Tenancy agreement an interim arrangement whilst house sale was sorted out. Court found the house sale agreement was not legally binding due on grounds unrelated to intention. Court found tenancy agreement not binding/legally enforceable as it was a family arrangement – even though it was in writing.

Chand continued This is another of those family disputes which take up a considerable amount of the time and resources of this Court. My experience so far is that these cases make up about 75% of the case load. It is true that a person is entitled to his day in Court but there must be a better and more efficient and less antagonistic way of resolving such disputes. Most of such disputes scream for settlement out of court and the legal profession could greatly assist the functioning of this Court by a more aggressive approach to settlement. Decision can be read as an expression of a cultural context that does not comfortably recognise the legitimacy of the State in resolving domestic disputes. Another interpretation located within the local context of restorative justice is also possible, as no winner and loser – instead both sides lost/won something On both readings of the case, although English common law

Case 3: Reweru v Agigo (Nauru) Parties related – nephew/uncle & spouses. Plaintiffs had a motorcycle import and sale business. The defendants were awarded a govt contract to import motorcycles. Parties made an oral agreement for plaintiffs to do import for defendants. Question arose of whether defendants had to pay import costs Case straddles intention to form a contract & intention examined to determine construction of oral contract

Reweru continued NO OBLIGATION: � The plaintiffs assumed this was a purely business arrangement and proceeded on that basis; whereas the defendants saw it as a business cum family arrangement benefiting both nephew and uncle. This coloured the parties' respective understanding of what the transaction including the sharing of costs entailed. . . � The initial approach to the first plaintiff by the first defendant had been on the basis of their close blood relationship. The defendants were prepared to share the 'windfall' of the Government contract with their close relatives but the plaintiffs clearly perceived matters from another perspective. Judge appeared to take into account the cultural considerations that a reasonable Nauruan would be operating under in order to determine whether a contract had been formed. Common law principle, not altered, but presumption stronger

Summary Cases suggest gentle evolution � common law principle being interpreted and evolving into stronger presumption in light of cultural context Cf Australia, presumption weakening due to cultural context that rejects public/private distinction as being an aspect of discrimination against women Caution in summary � 3 cases from different jurisdictions do not show consistent local development in any one jurisdiction � Worth tracking as more cases are decided

3. Post-contractual behaviour & interpretation of contracts English common law � Post-contractual behaviour cannot be used as an aid to interpreting what the terms of a contract mean NZ divergence (a bit radical/controversial) � Post-contractual behaviour can be used as an aid to interpreting contracts

Dinh v Samuel (Vanuatu) S Ct adopted NZ divergence and allowed postcontractual behaviour to determine meaning of contract �S Ct also found that words of the contract were only capable of one meaning but used postcontractual behaviour to override this construction – so pushed NZ decision/implications even further CA did not directly discuss whether NZ approach a valid part of Vanuatu’s law – despite the argument that it should not be adopted being directly placed in front of it

Commentary The Supreme Court judge, Justice Harrop, New Zealand judge on a 2 year secondment May simply be a case of a New Zealand judge preferring to apply New Zealand law � � May be a case of intentional development of authentic local common law (simplifying to avoid technicalities) BUT: � � � dangerous for the stability of common law Vanuatu has many judges passing through on short term contracts, and if they all choose to bring divergent legal principles from their countries of origin with them may lead to considerable uncertainty in the law Dangerous as the lack of reasoning means it is not possible to determine the policy underlying the decision and to evaluate whether this policy is appropriate for Vanuatu No discussion from a doctrinal perspective (acknowledging that Vanuatu had adopted the UK approach as part of constitutional transition provisions, but that adopted law should only apply as a far as it is suitable for local circumstances. ) No discussion of why New Zealand position was more appropriate for Vanuatu’s circumstances and should be preferred to the UK position. Whilst Court of Appeal should act as stabilising factor, discussing issues of divergence as the arise and area appealed in this case it did not do so

4: Conclusion: implications for law teachers No clear examples of principled, explicitly reasoned, evolution of local common law in paper Lack of judicial clarity affected by counsels’ arguments? Divergence in UK/Aus/NZ/(Canada, others? ) common law = opportunity for law teachers to explore constitutionally based divergence arguments Law students trained to argue about divergence (might) = counsel who do argue about divergence in court Then we may see the emergence of more principled Pacific case law that fulfils the post-colonial hopes of the development of locally-appropriate legal rules.