Page:Australian Competition and Consumer Commission v Valve Corporation (No 3).pdf/25



60 A majority of the High Court (Toohey, Gaudron, and Gummow JJ) held that the New South Wales proceedings should not be stayed. Their Honours held that effect should not be given to the choice of jurisdiction in cl 9 of the policy, which was the courts of England and Wales. This was for two reasons. The first reason was the "policy" of the Insurance Contracts Act, independently of any express or implied statutory prohibition (447). The second reason was that the text of s 52 rendered the jurisdiction clause void (447–448). It is necessary to return later to each of these reasons.

61 In the course of their reasons, the majority explained the way in which s 8(2) of the Insurance Contracts Act operated. Their Honours explained, at 440–442, that the process of identification of the proper law of the contract is twofold.

62 The first stage involves considering "the system of law by reference to which the contract was made". That requires consideration of the express or the "inferred" choice of law in the contract. This involves one question: "whether, upon the proper construction of the contract … the court may conclude that the parties exercised liberty given by the common law to choose a governing law for their contract" (442).

63 The reference to an "inferred choice" as part of the process of construction was said by their Honours not to be a question of implying a term as to choice of law (442). That statement should not be understood as suggesting that implication is irrelevant to the overall question at the first stage. The question at the first stage is whether, as part of the process of construction, applying "the ordinary rules of the common law relating to the construction of contracts" (441), the words of the contract express a choice of law to a reasonable person in the position of the parties a choice of law. As French CJ, Bell and Keane JJ observed in Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169, 186–188 [22]–[25], implications can be part of the process of construction.

64 On the majority's approach, if there is no answer to the first question, because no express or inferred choice can be identified, then the second stage involves considering the system of