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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-467 [2017] NZHC 768

BETWEEN	X
Plaintiff	

AND	
THE ATTORNEY GENERAL OF NEW ZEALAND
First Defendant	

AND	
MINISTRY OF DEFENCE (UNITED KINGDOM)
Second Defendant	

Hearing:	6-7 December 2016	

Counsel:	
J L Bates for Plaintiff
A Martin and J Catran for First Defendant
A S Butler and E J Rushbrook for Second Defendant	

Judgment:	
24 April 2017	

JUDGMENT OF SIMON FRANCE J

X v THE ATTORNEY GENERAL OF NZ [2017] NZHC 768 [24 April 2017]

Table of Contents

Paragraph No.

Introduction ................................................................................................................1

Proceedings .................................................................................................................4

Alleged facts .............................................................................................................4

Claims against MoD(UK) ........................................................................................12

Introduction ............................................................................................................12

Present application ................................................................................................15

Issue one – submission to jurisdiction ...................................................................18

Issue two – state (or sovereign) immunity..............................................................28

Issue three – appropriate forum .............................................................................52

Claims against AGNZ ..............................................................................................63

Introduction ............................................................................................................63

Issue one – appropriate forum ...............................................................................68

Issue two – jurisdictional bar.................................................................................77 (a) Sovereign immunity ......................................................................................85 (b Foreign act of state ........................................................................................87
Conclusion...............................................................................................................102

Introduction

[1]       The  plaintiff  X1    was  engaged  in  the  Royal  New Zealand  Navy  from

July 2008  until  her  resignation  in  November 2012.    For  part  of  this  period  –

5 January 2009 to 23 April 2010 – X was based in the United Kingdom to receive specialist training from the Royal Navy.   During that time X claims she was the subject of sustained sexual harassment of a serious kind.  She also claims she was the victim of two sexual assaults, one of which is an allegation of rape.

[2]       X also complains that when she returned to New Zealand and undertook service of Royal New Zealand Navy ships she faced unfair work conditions, further incidents of sexual harassment, and inadequate response to her complaints by senior officers.

[3]       X has filed proceedings against both the Attorney-General of New Zealand (AGNZ) (on behalf of the New Zealand Defence Force) and the Ministry of Defence (United Kingdom) (MoD(UK)) in relation to events occurring during her time with the Royal  Navy,  and  after her return  to  New Zealand.   This  decision addresses preliminary matters that have been raised, the most significant of which is a dispute over  whether  it  is  correct  to  hear  the  claims  in  a  New Zealand  court.    Both defendants submit the Courts of England and Wales are the correct forum.

Proceedings

Alleged facts

[4]       It  is  accepted  for  the  purposes  of  this  interlocutory  proceeding  that  the allegations made by X should be treated as capable of being established.

[5]       X joined the Royal  New Zealand  Navy in 2008 for work in a specialist technical area.  She was selected for officer training and performed well.  The Royal New Zealand Navy, along with many other countries, has a standing arrangement in
place for some of their employees to receive further training from the Royal Navy.

1           This interlocutory proceeding was conducted in open court.  However, interim name suppression is in place to protect not only the plaintiff but those against whom allegations are made.  The suppression orders will require reconsideration prior to the substantive hearing.

Selection is at the discretion of the Royal New Zealand Navy.  X was offered and accepted one of those spots.   Whilst posted to the Royal Navy, X was under the command of both the Royal Navy and Royal New Zealand Navy.  She continued to be paid by the Royal New Zealand Navy and the expectation was that she would return there upon completion of her training.

[6]       During the posting X spent time in a shore based training facility and some time on two Royal Navy ships.   While at the training facility and on the ships, X claims that she was subjected to a culture of sexual harassment:

(a)       Junior Ratings were allowed by superior officers to dare each other to “conquer” female service women by having sex with them.  Rewards were offered;

(b)       X received constant and unwanted approaches for sexual activity, and this  occurred  with  the  knowledge  of  superior  officers,  who  did nothing despite knowing it was causing distress;

(c)	male naval personnel conducted a survey in X’s presence about who

amongst their number wanted to have sex with her; and

(d)	a particular officer made masturbating gestures in her presence.

[7]       X also specifies two instances of physical assault occurring on a particular ship.   In the first a male naval officer placed his hand on her crotch whilst she ascended a ladder.  In the second, a different male officer had sexual intercourse with her without her consent.  These events occurred in 2009.  No complaint to authorities was made at the time.  All the personnel being complained about up to this point were members of the Royal Navy, and the events occurred overseas on British ships or land based facilities.

[8]       After  her  training  in  the  United  Kingdom  concluded,  X  took  leave  for personal travel before returning to the Royal New Zealand Navy.  Upon returning, X was required to undertake a joining interview with a senior officer.  She says that at

that interview she complained of the unsafe environment while posted overseas, including the sexual harassment.  It is said the superior officer was dismissive and made inappropriate comments about such conduct, and her need to cope with it.  X was posted to a Royal New Zealand Navy ship.   Whilst on board she says she complained to superior officers on the ship about abusive language and lewd comments being directed towards her.   She says she received an unsupportive response from a named officer who it is alleged also witnessed some of the events.

[9]       The Royal New Zealand Navy ship X was aboard travelled to overseas ports. At one, X says an officer of the host nation’s service forced her to compete in a drinking contest and subjected her to sexual harassment and assault.

[10]     Eventually X was posted to a different Royal New Zealand Navy ship.  She claims that on board that ship there continued to be incidents of harassment with unwanted sexual references.  It is claimed male naval employees were encouraged to drink and to cheat on their partners.

[11]     The stress of these cumulative events over the years, and what is said to be a lack of support, led X to resign.  Claims are made about events that occurred during the period leading up to this. At one point X recorded her experiences in writing in a document entitled “My Story”.   She sent it to the office who had suggested its publication.   It was then, without her consent, forwarded to a number of naval personnel.  X claims nothing, however, was done in response to the story.

Claims against MoD(UK)

Introduction

[12]     Although there is a considerable overlap in the proceedings against each defendant, it is convenient for analysis purposes to focus first on the claims against MoD(UK):

(a)	breach of a duty of care to take all reasonable steps to ensure the safety of X while in the United Kingdom, the failures being evidenced

by  her  being  subject  to  an  intimidating,  hostile  or  humiliating environment; and

(b)       vicarious liability (jointly with AGNZ) for the tort of battery, namely the two physical assaults (being, an indecent assault and a rape respectively).

[13]     The damage pleaded as a consequence of these events focuses solely on what has happened to X in New Zealand subsequent to her return.  It is said the sexual assaults:

caused  foreseeable  harm to  the  plaintiff  at  the  time  and  is  on-going  in New Zealand,  and  has  caused  an  impact  on  the  plaintiff’s  earnings  and earning potential and career development in New Zealand.

It had earlier been pleaded that due to the failings of both Navies, the plaintiff had felt unable to continue with her service and had resigned.

[14]     The negligence cause of action is pleaded in similar terms:

Foreseeable Consequences

113.      The   Plaintiff   has   suffered   ongoing   and   foreseeable   extreme annoyance, vexation, distress and the loss of enjoyment of life.

114.      The Plaintiff’s suffering is ongoing and has caused damage to her career  and  her  earnings  in  New Zealand.    The  Plaintiff  requires special medical care and counselling, particulars of which will be given at or before trial.

WHEREFORE THE PLAINTIFF SEEKS:

(a)	An enquiry into her financial losses;

(b)	An enquiry into the special damages sustained, including inter alia ongoing medical support costs;

(c)	Judgment for such loss and damage following the enquiry;

(d)	General and aggravated damages in the sum the Court thinks fit;

(e)	Costs; (f)	Interest.

Present application

[15]     MoD(UK) seeks a dismissal of the proceedings on the basis that it is not, or should not be, subject to the jurisdiction of the Court.  Because the plaintiff served the proceedings on MoD(UK) overseas without first obtaining leave of the Court to do so, the protest to jurisdiction (and the plaintiff’s application to set it aside) falls to be determined under r 6.29 of the High Court Rules 2016.  Rule 6.29 provides:

6.29	Court’s discretion whether to assume jurisdiction

(1)        If service of process has been effected out of New Zealand without leave, and the court’s jurisdiction is protested under rule 5.49, the court must dismiss the proceeding unless the party effecting service establishes—

(a)	that there is—

(i)	a  good  arguable  case  that  the  claim  falls  wholly within 1 or more of the paragraphs of rule 6.27; and

(ii)	the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d); or

(b)	that, had the party applied for leave under rule 6.28,—

(i)	leave would have been granted; and

(ii)	it is in the interests of justice that the failure to apply for leave should be excused.

(2)        If service of process has been effected out of New Zealand under rule 6.28, and the court’s jurisdiction is protested under rule 5.49, and it is claimed that leave was wrongly granted under rule 6.28, the court must dismiss the proceeding unless the party effecting service establishes that in the light of the evidence now before the court leave was correctly granted.

(3)        When  service  of  process  has  been  validly  effected  within  New Zealand, but New Zealand is not the appropriate forum for trial of the action, the defendant may apply for a stay, or for a dismissal of the proceeding under rule 15.1.

[16]     It is to be noted that the onus is with the plaintiff.

[17]     The Rule lays out a sequence of inquiries to be made.  Two alternative routes are provided: r 6.29(1)(a) or r 6.29(1)(b).   However, it is possible here to identify some key common questions that are likely to be determinative under either route:

(a)       First, X claims that MoD(UK) has, by its conduct, submitted to the Court’s jurisdiction and it is too late to protest it.   If correct in this, any claim of state immunity is lost.   The only argument left to MoD(UK) would then be a claim that the “appropriate forum” are the Courts  of  England  and  Wales,  and  the  New Zealand  court  should decline to hear the case (“the forum argument”).

(b)       Second, if state immunity has not been waived, is it applicable here as MoD(UK) claims?  If it is applicable, a stay would have to be issued. The plaintiff accepts there is an issue, but contends that an exception to state immunity should be recognised for allegations of fundamental violations of human rights, such as this case represents.

(c)       The third key inquiry, if the preceding two are not determinative, is the forum argument. All the events, so far as MoD(UK) is concerned, happened in the UK or on its ships.  That would suggest the Courts of England and Wales are the appropriate forum.  However, as pleaded, the damage being claimed occurred in New Zealand.   The plaintiff contends this, along with the reality of the parallel proceedings against AGNZ, and the background context of joint “employment” by both navies, is enough to justify the proceedings staying in New Zealand.

(d)       If the plaintiff succeeds in relation to these steps, there are further matters arising under either route that would require analysis.

Issue one – submission to jurisdiction

In order to establish that the defendant has by his conduct in the proceedings submitted or waived his objection to the jurisdiction, it must be shown that he  has  taken  some  step  which  is  only  necessary  or  only  useful  if  the objection has been waived or never been entertained at all.

(Dicey, Morris and Collins, The Conflict of Laws)2

2	Lord Collins of Mapesbury and others Dicey Morris and Collins on the Conflict of Laws (15th
ed, Sweet and Maxwell, London, 2012) at [11-129].

[18]     In the present case it is said the defendant has submitted to jurisdiction by filing a joint consent memorandum seeking the Court’s agreement to extend the time within which the statement of defence might be filed.  The plaintiff also relies on the content of contemporaneous correspondence between the lawyers about obtaining the extension for filing the statement of defence.  It is noted that all of MoD(UK)’s correspondence is couched in terms of the extension enabling the filing of a defence, and there is no reference to state immunity.

[19]     There is no doubt that if the defendant had filed a statement of defence it would constitute a waiver of state immunity.   However, whether a preliminary procedural step of the type in issue here has the same effect is less clear.   The plaintiff relies on Ellison Trading Ltd v Liebherr Export – AG,3 and on two overseas authorities which are submitted to be indistinguishable.   In Ellison Trading, the parties had informally agreed to an extension of time for filing a defence but no application had been made to the Court.  However, the defendants had filed a request for further particulars, detailing specific requirements for each cause of action.  The
evidence established that compliance with one aspect of the requirement for further particulars had necessitated 240 hours of endeavour by the plaintiff.   Master Faire held the conduct of the defendants constituted submission to jurisdiction.   In my view the present circumstances are different.   An application to adjourn the first formal step required of a defendant is no more than a holding action.  By contrast, the request for particulars, which in Ellison Trading required identification by the plaintiff of numerous motor parts and attribution of a value to each of them, was a positive engagement with the proceedings.

[20]     In Global Multimedia International Ltd v Ara Media Services the defendants were part of a large media and broadcasting group based in the Middle East.4    The
proceeding alleged wrongful repudiation of a contract.

3	Ellison Trading Ltd v Liebherr Export – AG HC Hamilton CP76/99, 20 December 2001, Master
Faire.
4	Global Multimedia International Ltd v Ara Media Services [2006] EWHC 3107 (Ch).

[21]     One of the defendants protested jurisdiction, but was unsuccessful because it was held the defendant had already submitted to jurisdiction.  The relevant conduct included:

(a)	his solicitors sought an extension of time from the plaintiff’s solicitors

within which to file a defence;

(b)	the solicitors filed with the Court an acknowledgement of service.

Protest to jurisdiction was not mentioned on either occasion;

(c)       a letter to the plaintiff ’s solicitors invited withdrawal of the claim because it had been previously settled.  Failing that, it was indicated that an application to strike out the proceeding on this basis would be filed; and

(d)       not filing a protest to jurisdiction until two weeks after the prescribed time.

[22]     The Court considered an objective observer would consider this combination of steps was only consistent with acceptance of jurisdiction.   Reference was particularly made by the Court to defence counsel’s letter indicating what defences would be relied on, and the threat to file a strike out application.  These are features not evident in the present case.   For this reason I do not regard the case as on all fours, but rather as involving, on a cumulative basis, a significantly greater level of engagement.

[23]     The second overseas authority relied on is Monrose Investments v Orion Nominees.5  The test there applied had a different focus, being whether the acts of the defendant were consistent with an objection to jurisdiction (rather than referable only to an acceptance of jurisdiction).   In Monrose the only act said to constitute submission to jurisdiction appears to be, like here, the seeking of an extension of
time  for  filing  a  defence.     However,  unlike  here,  there  the  application  was

5	Monrose Investments v Orion Nominees [2001] CP Rep 109 (Ch).

accompanied by evidence which spoke of the complex issues involved in “setting a defence” and the need for extra time.

[24]     I accept Monrose is much closer to the present facts.   It is of course not binding on this Court, and I respectfully take a different view.  Objectively all that has happened in the present case is the postponing, by consent, of the filing of a defence.   Obtaining such an extension of time is a minor and routine engagement with the Court.  The decision was made on the papers by a Registrar on the day the application was filed.  Such a minor procedural step ought not be seen as depriving a defendant of the opportunity to protest jurisdiction.  A similar view was reached by
Master Kennedy-Grant in Republic of Nauru v Niue Airlines Ltd.6   There the conduct

consisted of the filing of an address for service, and an appearance on a procedural call where, by consent, the date for filing a defence was extended.

[25]     In the present case, there was no court appearance as in Air Nauru but little should turn on whether the extension is achieved by way of memorandum or appearance.   In either case I do not consider it can yet be said the defendant’s conduct is only referable to accepting jurisdiction.   It is equally consistent with simply seeking time to consider complex proceedings arriving from an overseas jurisdiction somewhat out of the blue.

[26]     Mr Butler submitted the Court should be wary about an unduly technical or strict approach when what is at stake is the capacity of a sovereign nation to assert state immunity.  It is not necessary for me to consider this further given the view I take, but it did seem to me to have some merit.  The upholding of proper claims to state immunity is an important aspect of the way in which the community of nations regulates itself.  Holding that a sovereign immunity claim cannot even be considered because it has been inadvertently waived at a very early stage by dint of filing an uncontentious  consent  memorandum  concerning  timetabling  of  the  first  defence might be thought to be giving insufficient weight to the principles which underlie
state immunity.

6	Republic of Nauru v Niue Airlines Ltd [1993] 2 NZLR 632 (HC).

[27]     I accordingly reject the proposition that MoD(UK) submitted to jurisdiction prior to filing its protest to jurisdiction.

Issue two – state (or sovereign) immunity

Sovereign immunity is a doctrine applying to sovereign states or, as it is sometimes expressed, independent sovereign states.  In general at common law, reflecting international law, such a state will not be impleaded in the Courts of another country (in this instance New Zealand) against its will and without its consent; the exercise of jurisdiction is seen as incompatible with the dignity and independence of the foreign state.  Formerly the common law immunity  was  more  comprehensive  than  it  now  is,  but  a  line  of  cases decided in England from 1975, recognising that international law had changed,  held  that  the  common  law  had  changed  correspondingly  by adopting a “restrictive theory”.   In particular the commercial activities of states are no longer protected.   The leading exposition of the modern principles is generally taken to be the speech of Lord Wilberforce in Playa Larga (owners of cargo lately laden on board) v I Congreso del Partido (owners) [1983] AC 244.  The difficulties that can arise are illustrated by the circumstance that Lord Wilberforce (with Lord Edmund-Davies) was in a minority as to the result of applying the principles to the facts in one of the two appeals there under consideration.  The distinction falling to be made is described   as   being   between   jure   gestionis   and   jure   imperii,   and Lord Wilberforce put the test as follows at p 267:

“The conclusion which emerges is that in considering, under the
‘restrictive’ theory whether state immunity should be granted or not,
the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage,  or  whether  the  relevant  act(s)  should  be  considered  as having been done outside that area, and within the sphere of governmental or sovereign activity.”

(Cooke P, Governor of Pitcairn v Sutton)7

[28]     The parties are agreed that the impugned conduct generally falls within an area  covered  by  state  immunity.    Further,  it  is  not  suggested  that  any  of  the established exceptions apply.   Rather, the plaintiff calls in aid a controversial “iniquity” exception to state immunity.   The possibility of such an exception was recognised by the Court of Appeal in Controller and Auditor General v Davison
(Davison) but has not otherwise been applied.8

7	Governor of Pitcairn v Sutton [1995] 1 NZLR 426 (CA) at 428 per Cooke P.
8	Controller and Auditor General v Davison [1996] 2 NZLR 278 (CA).

[29]     The plaintiff submits hers are allegations of cruel and degrading treatment and/or torture, and that the forum court (here New Zealand) should not entertain a claim of state immunity when it is alleged such conduct has been committed on one its citizens by the foreign state.  X distinguishes her situation from other attempts to rely  on  this  exception  by  emphasising  the  close  connection  of  her  situation  to New Zealand.  At the time of the offending conduct she was employed by the Royal New Zealand  Navy.     She  was  in  the  United  Kingdom  only  by  virtue  of  a memorandum of co-operation between the two navies, and she continued to be paid by the Royal New Zealand Navy and be subject to its control.  Further, the pleaded damage relates only to consequences occurring in New Zealand.  There is no claim in relation to the direct or immediate harm occurring at the time of the incidents.

[30]     There is much writing that supports the recognition of an exception to state immunity where what is alleged is a breach of fundamental values.  Mr Bates draws on two threads in developing a comprehensive submission that New Zealand should be somewhat of a ground-breaker and give effect to a citizen’s rights to be protected from breaches of fundamental rights.  First, it is emphasised that state immunity is a flexible concept that has evolved, and which is susceptible to different emphases and approaches by different jurisdictions.  In this regard considerable weight is placed on comments by members of the Court of Appeal in Davison.  Second, it is submitted that there is growing support in authoritative academic writings and some decisions of national courts to recognise that there is a hierarchy of values (the normative hierarchy theory) and that when there is a conflict, the doctrine of state immunity
must yield to the higher value accorded to human rights protection.9

[31]     The starting point for the plaintiff’s argument is the decision in Davison.10

That case involved the so-called Winebox inquiry where it was alleged that by issuing tax credits to be used in New Zealand, the Cook Islands Government was complicit in tax evasion aimed at the integrity of the New Zealand tax system.  The New Zealand Auditor-General performed similar auditing functions for the Cook
Islands Government, and in that capacity had in his possession, in New Zealand,

9	See, for example, Lee Caplin “State Immunity, Human Rights and Jus Cogens : A critique of the
Normative Hierarchy Theory” (2003) 97(4) AJIL 741.
10	Davison, above n 8.

documents  that  were  relevant  to  the  Winebox  inquiry.     A  direction  by  the Commission of Inquiry to the Auditor-General to disclose the documents was met by a claim of state immunity.

[32]     One established exception to state immunity is that it does not apply to the commercial activities of a foreign state.   In Davison three members of the Court considered the activities of the Cook Islands Government were commercial for the purposes of the exception and so state immunity was not available.

[33]     Richardson J, with whom McKay J agreed, took a different view, considering that the issuing of tax credits was a quintessential governmental action and therefore state immunity was engaged.   However, his Honour nevertheless held against the claim of state immunity.  No specific exception was identified, so much as a number of factors which together meant, for public policy reasons, that it was appropriate for the forum country to reject the claim.  Richardson J acknowledged such a step could
only be justified:11

where the impugned activity, if established, breaches a fundamental principle of justice or some deep-rooted tradition of the forum state.

[34]     His Honour then observed:12

There must be other cases where the alleged conduct of the foreign state is directed in a real sense against the forum state or so directly affects it and is so outrageous that the protection international law would otherwise give to the foreign state in matters properly within the jurisdiction of the forum state should not be allowed.   The due imposition and collection of taxes is fundamental to the functioning of government … Defrauding the public revenue strikes at the heart of government.  It would be indefensible for a friendly state to be party to an attempt to evade or abuse our tax laws.

[35]     Before considering comments by the other members of the Court, it can be observed that the crux of the plaintiff’s position is found in this judgment.  There are two aspects that are emphasised – the ability of the forum state (New Zealand) to decide whether to recognise state immunity in a particular case, and secondly, that such  a  decision  is  driven  by public  policy  considerations.    In  the  present  case
Mr Bates  emphasises  this  is  New Zealand’s  commitment  to  fundamental  human

11	Davison, above n 8, at 305.
12	At 306.

rights and its endorsement of various international human rights documents and declarations.    The  public  policy  imperative  here  is  the  access  to  justice  of  a New Zealand citizen, a vulnerable woman, working abroad but still in the service of the Royal New Zealand Navy.

[36]     Turning to  other members of  the Court,  Cooke P,  whilst  considering  the activity was commercial, observed in relation to an iniquity exception:13

Having had the advantage of reading in draft the judgment of Richardson J, with much of which (particularly the concluding part) I am in sympathy, I add some brief comments on what my brother calls the iniquity factor.  In the present era of civilisation and international law I should think that a Court would be going too far if it were to allow a general exception of iniquity to the doctrine of sovereign immunity.  The invasion of Kuwait was treated as iniquitous by the United Nations and no doubt was so regarded by many countries, yet in the Kuwait Airways case the House of Lords held unanimously that the seizure of Kuwait civil aircraft was protected by sovereign immunity.   On the other hand, as noted in the American Law Institute’s Restatement of The Law The Foreign Relations Law of the United States (1987), vol 1, s 461c, “In principle, a foreign state is responsible for violations of domestic law by terrorist acts committed by its agents”.  The assassination case of Letelier v Republic of Chile 488 F Supp 665 (DDC,
1980) is one of the supporting authorities cited.

One can speculate that the law may gradually but steadily develop, perhaps first excepting from sovereign immunity atrocities or the use of weapons of mass destruction, perhaps ultimately going on to except acts of war not authorised by the United Nations.  But this is [to] peer optimistically into the future far beyond the bounds of anything falling to be decided in the present judicial review proceedings.  The maxim festina lente is in point, and while founding on public interest I prefer to confine the reasoning in this judgment to issues of tax avoidance or evasion under investigation by a national commission of inquiry.

[37]     Reference should next be made to this passage from Henry J:14

In his judgment Richardson J gives his reasons for concluding that public policy here requires rejection of the claim to sovereign immunity by reason of the inequity factor.  There is in my respectful view merit in the line of reasoning adopted in that judgment.  Whether or not this Court should now accept a broad principle of iniquity as affecting and possibly overriding the traditional concept of sovereign immunity – which would be a development beyond that now accepted under the “restricted” theory  – is debateable. However in my opinion there are compelling reasons for excluding the doctrine of sovereign immunity, even if the restrictive theory did not apply, without offending current concepts of international law.   This case is concerned with the functions of a commission of inquiry whose terms of

13	At 290.
14	At 309.

reference require investigation into the Winebox transactions and the need for change to criminal or tax law to protect New Zealand’s tax base from fraud and evasion.  There is evidence presently before the commissioner to support a contention that some of the transactions may have defrauded the New Zealand revenue or provided a means for evading tax.   The foreign state is said to have been instrumental in  a significant way in assisting New Zealand taxpayers to that end.  The persons sought to be examined, and the documents sought to be inspected are all in New Zealand.   In those circumstances,  public  policy  requires  disclosure,  not  frustration  of  the objects of the Commission of Inquiry.  Principles of international comity do not in my opinion require otherwise.

[38]     Finally,  Thomas J  agreed  that  the  commercial  exception  was  engaged.15

However his Honour then articulated what he suggested was a preferable approach to deciding issues of state immunity.16   It was also very much a public policy analysis.

[39]     Three observations can be made about Davison.  First, the majority decision is an orthodox application of existing state immunity law.  Second, the Court is in some ways anticipating a development in the doctrine of state immunity which, as will be discussed shortly, has not really happened.  Such exceptions for fundamental values being definitively recognised have occurred by way of legislation – for example,  the  United  States  and  more  latterly  Canada  have  enacted  a  limited terrorism exception.  Finally, it is clear that the Court was very much influenced by the fact that it was activity by the Cook Islands Government itself that was being investigated.   The foreign state’s conduct could be seen to have been directed specifically against the New Zealand tax base, and it was that which made a claim of state immunity unacceptable.

[40]     Although,  as  Mr Bates  traverses,  there  is  much  writing  contending for  a human rights type exception, the decided cases are against it.  The most authoritative rejection is a recent decision of the International Court of Justice in Jurisdictional Immunities of the State (Germany v Italy).17   There, some citizens of Italy who had not otherwise had redress for the atrocities committed upon them during the War sought  to  bring  civil  action  in  the  Italian  courts.    The  Italian  courts  accepted
jurisdiction and Germany appealed successfully to the International Court of Justice.

15	At 311–312.
16	At 313.
17	Jurisdictional Immunities of the State (Germany v Italy: Greece intervening) (Judgment) [2012] ICJ Rep 99.

[41]     In upholding Germany’s claim to state immunity, the Court emphasised that state immunity is a rule of customary international law.  The significance of this is that it undermines the proposition that New Zealand, under the rubric of the common law, could develop its own contrary jurisprudence. As to the scope of the decision, it is convenient to cite the Court’s articulation of the unsuccessful argument advanced
by Italy:18

That said, the Court must nevertheless inquire whether customary international law has developed to the point where a State is not entitled to immunity in the case of serious violations of human rights law or the law of armed conflict.  Apart from the decisions of the Italian courts which are the subject of the present proceedings, there is almost no State practice which might be considered to support the proposition that a State is deprived of its entitlement to immunity in such a case.  (emphasis added)

[42]     It can be seen that what was in issue is the same argument as is being made here by the plaintiff. The Court continued:19

In addition, there is a substantial body of State practice from other countries which demonstrates that customary international law does not treat a State’s entitlement to immunity as dependent upon the gravity of the act of which it is accused or the peremptory nature of the rule which it is alleged to have violated.

That practice is particularly evident in the judgments of national courts. Arguments to the effect that international law no longer required State immunity in cases of allegations of serious violations of international human rights law, war crimes or crimes against humanity have been rejected by the courts in Canada (Bouzari v. Islamic Republic of Iran, Court of Appeal of Ontario, [2004] Dominion Law Reports (DLR), 4th Series, Vol. 243, p. 406; ILR, Vol. 128, p. 586; allegations of torture), France (judgment of the Court of Appeal of Paris, 9 September 2002, and Cour de cassation, No. 02-45961,
16 December 2003, Bulletin civil de la Cour de cassation (Bull. civ.), 2003, I, No. 258, p. 206 (the Bucheron case); Cour de cassation, No. 03-41851,
2 June 2004, Bull. civ., 2004, I, No. 158, p. 132 (the X case) and Cour de cassation,  No. 04-47504,  3 January 2006  (the  Grosz  case);  allegations  of
crimes against humanity), Slovenia (case No. Up-13/99, Constitutional Court of  Slovnia;  allegations  of  war  crimes  and  crimes  against  humanity), New Zealand    (Fang    v.    Jiang,    High    Court,    [2007]    New Zealand
Administrative Reports (NZAR), p. 420; ILR, Vol. 141, p. 702; allegations of torture), Poland (Natoniewski, Supreme Court, 2010,  Polish Yearbook of
International Law, Vol. XXX, 2010, p. 299; allegations of war crimes and crimes against humanity) and the United Kingdom (Jones v. Saudi Arabia,
House of Lords, [2007] 1 Appeal Cases (AC) 270; ILR, Vol. 129, p. 629;
allegations of torture).

18	At [83], emphasis added.
19	At [84] and [85], emphasis added.

[43]     Given the numerous references here to decisions in other countries, it is unnecessary to explore in depth the relevant authorities.  However, it can be noted that Pavoni contends that the Court could have drawn further support from a line of decisions in the United States of America,20 starting with the Supreme Court decision in Amerada Hess.21   There the allegations concerned the use of force by Argentina in relation to a neutral commercial vessel in international waters.  The Court affirmed
that exceptions to state immunity were limited to those now prescribed by statute, thereby limiting the ability to develop a human rights law exception.22

[44]     The plaintiff seeks to limit the applicability of the ICJ decision in Judicial Immunities of the State to cases involving armed conflicts, but in my view it is of wider impact.   The passages cited at [41] and [42] make plain the context being considered.   One further passage that is illustrative of the Court’s thinking can be cited:23

At the outset, however, the Court must observe that the proposition that the availability of immunity will be to some extent dependent upon the gravity of the unlawful act presents a logical problem.  Immunity from jurisdiction is an immunity not merely from being subjected to an adverse judgment but from being subjected to the trial process.   It is, therefore, necessarily preliminary  in  nature.     Consequently,  a  national  court  is  required  to determine whether or not a foreign State is entitled to immunity as a matter of international law before it can hear the merits of the case brought before it and  before  the  facts  have  been  established.    If  immunity  were  to  be dependent upon the State actually having committed a serious violation of international human rights law or the law of armed conflict, then it would become necessary for the national court to hold an enquiry into the merits in order to determine whether it had jurisdiction.   If, on the other hand, the mere allegation that the State had committed such wrongful acts were to be sufficient  to  deprive  the  State  of  its  entitlement  to  immunity,  immunity could, in effect be negated simply by skilful construction of the claim.

20	R Pavoni “An American Anomaly?  On the ICJ’s Selective Reading of United States Practice in
Jurisdictional Immunities of the State” (2011) Italian Yearbook of International Law 143.
21	Argentine Republic v Amerada Hess 488 US 428 (1989).
22	The strongest support for a fundamental human rights exception are the minority opinions expressed in the European Court of Human Rights in Al-Adsani v United Kingdom (2002) 34
EHRR 11 (ECHR).
23	Jurisdictional Immunities, above n 17, at [82].

[45]     Finally in relation to the decided decisions, it can be noted that in the list cited by the  International Court of Justice is the New Zealand decision Fang v Jiang.24    In that case 11 Chinese nationals, now residents of New Zealand, brought proceedings against members of the government of the People’s Republic of China alleging they were tortured.

[46]     Recognising the absence of any domestic legislation, Randerson J considered the issue of state immunity was governed by international law.   After traversing various authorities, his Honour concluded that allegations of torture did not give rise to an exception to state immunity.  Randerson J further rejected the proposition that
New Zealand should take a different course:25

In that respect, I do not accept Mr Lawrence’s proposition that New Zealand is free to “develop” an exception to the well-recognised immunity principles in a way similar to that adopted by Courts in respect of domestic or state law. International law necessarily develops and evolves over time (see the discussion in Lai v Chamberlains [2007] 2 NZLR 7 (SCNZ) at paras [1] and [2] of the judgment of Elias CJ, Gault and Keith JJ and the observation of the Privy Council in Re Piracy Jure Gentium [1934] AC 586 at p 597 that international law has not become a crystallised code at any time, but is a living and expanding branch of the law.  But New Zealand’s common law on this subject will usually be reflective of international law gathered from the established sources of international practice, treaties, conventions, judicial decisions and scholarly writings.

[47]     For  several  reasons  the  plaintiff’s  case  against  the  availability  of  state immunity cannot succeed.  First, there is at common law no recognised exception to state immunity for  allegations  of  breaches  of  fundamental  human  rights.    State immunity is a rule of international law which does not recognise such an extension. Second,  in  my  view,  Davison  does  not  empower  the  recognition  of  such  an exception.  It was a case in which the commercial exception was held to apply, and the Court did not have before it allegations of this type.

[48]     Third, if such an exception could potentially apply, I do not accept the present alleged facts would engage it.  It is invidious to seek to place alleged offending of this type on a spectrum, but the plaintiff calls in aid concepts such as torture and so
some analysis is required.  The label of torture is not sustainable in this case.  Torture

24	Fang v Jiang [2007] NZAR 420 (HC).
25	At [69].

is traditionally defined to include a purpose requirement.   The alleged  torturous conduct  must  have  been  inflicted  to  achieve  a  further  purpose  –  to  extract  a confession or other information; to punish, to intimidate or coerce.26   The definition of torture in Article 1 of the United Nations Convention against Torture contains a purpose component.27   No such motivation is alleged here.

[49]     I do accept, however, that at an interlocutory stage the labels of cruel and degrading treatment are available.   Degrading conduct is conduct that “gravely humiliates  and  debases  the  person  subjected  to  it,  whether  or  not  that  is  its purpose.”28   It is difficult to contend that the act of rape does not at least engage the concept.   In the end whether the label is appropriate is a fact specific assessment having regard to  all  the established circumstances.   That  said,  I have not  been persuaded that  any exception for allegations of breaches of fundamental human rights would encompass all allegations of cruel and degrading treatment.  That is not
to ignore that any breach of s 9 of the New Zealand Bill of Rights Act 1990, which guarantees the right not to be subject to such treatment, is of “great seriousness”. But given the competing value of state immunity, it is in my view likely that any exception would arise in circumstances of more systemic state sponsored violations of human rights than that which is alleged here.

[50]     I finally observe that upholding state immunity is, in my view, what one would expect to be the outcome.   The claims are made against the British government.  They will require investigation into what happened on British warships and on British naval bases, and will require inquiry into the internal policies and procedures of the Royal Navy.  Acceptance of jurisdiction would not be consistent
with the dignity of the foreign state.

26         Taunoa v Attorney-General (2004) 7 HRNZ 379 (HC) at [259].  See also the appeal decision Taunoa v Attorney-General [2007] NZSC 70, [2008] 1 NZLR 429.  At [171] Blanchard J, for example, defines torture as the “deliberate infliction of severe physical or mental suffering for a particular purpose, such as obtaining information”.
27         United Nations Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment 1465 UNTS 85 (opened for signature 10 December 1984, entered into force
26 June 1987), art 1.
28	Taunoa (SC), above n 26, at [171].

[51]     I accordingly hold that MoD(UK) could successfully object to jurisdiction on the basis of state immunity.  That makes further analysis under r 6.29 unnecessary. However, for completeness I will address the third key issue of the appropriate forum.

Issue three – appropriate forum

In considering whether another forum is more appropriate, the Court looks for the forum with which the proceeding has the most real and substantial connection.    Relevant  factors include issues  of  convenience  or  expense, availability of witnesses, the law governing the relevant transaction and the places where the parties resided or carried on business.

We accept that other relevant considerations also bear on the issue of appropriate forum.  These include the cautious approach already discussed to the  subjection  of  foreigners  to  the  jurisdiction  of  a  New Zealand  court; whether  other  related  proceedings  are  pending  elsewhere;  whether  the New Zealand court would provide the most effective relief or whether a foreign court is in a better position to do so; whether the overseas defendants will  suffer  an  unfair  disadvantage  if  a   New Zealand  court  assumes jurisdiction; and any choice of jurisdiction previously agreed by the parties.

(Randerson J, Wing Hung Printing v Saito Offshore)29

[52]     The plaintiff submits the following factors mean her case has the more real and substantial connection with New Zealand:

(a)       X was based in the United Kingdom pursuant to an existing bilateral memorandum of understanding between the two navies;

(b)       X  wore  her  New Zealand  uniform,  and  was  paid  by  the  Royal

New Zealand Navy;

(c)       although subject to the immediate control and disciplinary structures of the Royal Navy, X remained subject to the Royal New Zealand Navy discipline;

(d)       X is a New Zealand citizen who at all times intended to return to

New Zealand; and

29	Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at
[45]–[46].

(e)	the  damage  being  claimed  focuses  on  the  consequences  for  X  in

New Zealand of what occurred to her.

[53]     There is validity in these points to the extent that they establish a link, but it is noticeable they focus on the two end points – how it is X came to be working in the  Royal  Navy,  and  what  indirect  effects  have  occurred  as  a  consequence  of working in the Royal Navy.  The more obvious starting point for ascertaining where the most real and substantial connection lies is to look at what is said to have happened, who did it, and why the defendant is said to be liable.  Those matters have been canvassed previously but a brief repetition is appropriate.

[54]     X  alleges  two  members  of  the  Royal  Navy  at  different  times  sexually assaulted her while she was working on a Royal Navy ship.  She also alleges that while on this ship, and another, and while at a land base in the United Kingdom, she was subject to systemic and sustained sexual harassment from members of the Royal Navy.  It is said some senior officers observed the conduct, and others were aware of it.  The allegation is that the conduct was condoned by those officers.  The Royal Navy is said to be legally liable for the on-going consequences of this conduct being experienced by X in New Zealand.  On a first impression the natural forum for these claims is the United Kingdom.

[55]     In terms of the factors mentioned in the Wing Hung Printing passage:30

(a)	the liability conduct all occurred in the United Kingdom;

(b)	the liability witnesses, other than the plaintiff, reside in the United

Kingdom;

(c)	those witnesses would be compellable in the United Kingdom but not in New Zealand;

30	Wing Hung Printing, above n 29, at [45]–[46].

(d)       the law of the United Kingdom would be the applicable law to the claims against MoD(UK) for acts occurring in the United Kingdom; and

(e)       the subject matter requires an inquiry that is much better suited to a court of England and Wales.

[56]     The identified disadvantages X would suffer are the expense and difficulty of conducting proceedings in England, and the need for two court proceedings given the plaintiff is suing AGNZ in relation to the same events.  I accept the former is a valid point but observe X has chosen, as of course is her right, not to avail herself of opportunities to alleviate the difficulties.  The Royal Navy has referred the matter to the Royal Navy Police who would investigate if X wished to make a complaint, but she declines to do so.

[57]     As for the need for two proceedings, and subject to any decisions made in relation to the AGNZ claims, I accept it is a factor but in the circumstances do not consider the choice of the plaintiff to also sue AGNZ in relation to these overseas events is sufficient to overcome the otherwise overwhelming conclusion that the Courts of England and Wales are the appropriate forum for the claims against MoD(UK).

[58]     For  these  reasons,  had  it  been  necessary,  I  would  have  concluded  that pursuant to r 6.28(5)(d) of the High Court Rules, the Courts of England and Wales were the appropriate forum.

[59]     The conclusions I have reached make it unnecessary to analyse the other requirements under r 6.29.   For the record, however, I note that two in particular were the subject of dispute.

[60]     First, in relation to claims made in tort, it is necessary for the plaintiff to establish either that the act or omission occurred in New Zealand (not applicable here)  or  that  “the  damage  was  sustained  in  New Zealand”  (r 6.27(2)(a)).    The damage X claims is the on-going effects and consequences of what is said to have

occurred abroad.  The issue requiring resolution is whether this type of damage is sufficient to discharge the onus.

[61]     If the plaintiff did not succeed in that argument, then an alternative basis for jurisdiction would be to establish that MoD(UK) is a necessary and proper party to the claims brought against AGNZ.  Whether this would be so turns on the viability of the pleading of joint vicarious liability for the battery causes of action.  In particular whether that doctrine applies here at all, and if so whether it is available in the current situation.   As regards the latter point there would be inevitable focus on whether AGNZ can be vicariously liable for the acts of persons in the service of the Royal Navy.

[62]     The  application  by  the  second  defendant  for  an  order  dismissing  the proceedings in relation to all claims against it is granted.

Claims against AGNZ

Introduction

[63]     As a consequence of the decision concerning MoD(UK), it is necessary to identify the nature of the claims remaining, and the relevant context.  The plaintiff accepts that she will not be able to proceed with the battery claims against the New Zealand government.  The plaintiff has also indicated, and I accept it to be so for analysis purposes, that she will not be instituting proceedings against the United Kingdom  government  in  that  jurisdiction.    Thus  all  that  remains  are  claims  in New Zealand against AGNZ in negligence, breach of statutory duty and breach of
contract.31

[64]     Further, the plaintiff has clarified the focus of those claims.   For analysis purposes, I take the description from the plaintiff’s written submissions rather than
the statement of claim:32

31	There is a further set of “reputational claims” concerning which interlocutory applications have
been made. They are addressed in a separate ruling.
32	When this series of interlocutory applications is finally determined, the plaintiff will need to ensure the pleading is amended.

2.19	Specifically,  the  RNZN’s  negligence  is  alleged  to  arise  entirely
within New Zealand because the RNZN:

i.          Failed   (i.e.   omitted)   to   make   any   or   any   sufficient investigations  from  New Zealand  as  to  the  protections available to the Plaintiff whilst being posted to the Royal Navy in the UK, from sexual assault and sexual harassment, including training programmes available for Gender Equity and how they were being implemented and monitored and complied with (particularly in light of the known high incidence of that type of behaviour in the Armed Forces of the UK).

ii.         Failed (i.e. omitted) to make any or any sufficient enquiries as to the systems in place to ensure the safety of the Plaintiff whilst serving in New Zealand uniform when sending her to serve with and be trained by the Royal Navy.

iii.        Failed (i.e. omitted) to provide sufficient and regular training to the Plaintiff when posting her to the United Kingdom on the topics of harassment, bullying and/or discrimination and training in connection with known hazards of stress, sexual harassment and sexual assault in the United Kingdom Defence Forces, including the Royal Navy and what to do if confronted with sexual harassment.

iv.      Failed  (i.e.  omitted)  to  implement  comprehensive measurement in reporting systems to monitor the effectiveness    of    any    sexual    harassment    policies    in New Zealand or for Naval personnel deployed to the Royal Navy or elsewhere.

[65]     The consequence of this focus is that all the proceedings against AGNZ will be assessed under New Zealand law.

[66]     Finally by way of scene setting, the analysis should proceed on the basis that there will be significant difficulties for both parties in relation to what I will call “Royal Navy evidence”, both in terms of witnesses and documentation.   For the plaintiff this would bite in relation to establishing what it is the Royal New Zealand Navy would have discovered had it made the inquiries it is said it should have, and did not.  For the first defendant it will affect access to, and availability of, witnesses in relation to the alleged sexual assaults and incidents of sexual harassment.   The United Kingdom witnesses are not compellable.  Further, evidence filed by the first defendant from the Royal Navy indicates these witnesses will not be directed by the Royal Navy to come.  Given the nature of the allegations, it can be assumed they will be unlikely to come voluntarily.

[67]     Against that background I turn to the two key issues – appropriate forum and whether there is a jurisdictional bar.

Issue one – appropriate forum

[68]     Throughout  the  proceeding  the  first  respondent  advocated  for  a  hybrid process.   It sought a stay of the New Zealand claims to enable determination in a Court of England of Wales of what it termed the United Kingdom claims.   These were  the  battery  claims  and  the  negligence  claim  against  MoD(UK).     The United Kingdom claims also included the battery claim against AGNZ who was alleged to be liable on the basis of dual vicarious liability.

[69]     The idea behind the hybrid proceeding was that the factual determinations made by the English Court when determining the United Kingdom claims could then be carried over as the basis for analysis of the New Zealand claims.   To facilitate implementation, AGNZ indicated he would not claim sovereign immunity in relation to the battery claim, and would undertake to be bound in New Zealand as regards the New Zealand claims by the factual conclusions of the Court of England and Wales. The advantages of this process were said to lie in the availability of witnesses, in having the correct court determine issues of domestic law, and in respecting the comity of nations by avoiding foreign courts inquiring into the internal processes of the other’s navies.

[70]     A difficulty with this hybrid proceeding, however, is that it is based on an incorrect assumption.  There are no proceedings in the United Kingdom and will not be. The plaintiff has made it plain she will only proceed against the United Kingdom government if she is able to do so in New Zealand.   I have dismissed the United Kingdom claims and so all there is now are the New Zealand claims.  Accordingly, the  issue  is  whether  this  New Zealand  proceeding,  involving  claims  against  the New Zealand government for breaches of duty by the Royal New Zealand Navy, should be directed to be heard in a Court of England and Wales because it is the appropriate forum.

[71]     For several reasons the answer must be no.  First, AGNZ has not satisfied me that  absent  any  parallel  United  Kingdom  proceeding,  a  hearing  in  England  is possible or desirable.  I received no submissions suggesting it was possible to have a preliminary hearing in England the purpose of which would be to determine some facts for a New Zealand proceeding.   So it must be the whole proceeding that is considered.

[72]     Once  one  is  talking  about  the  full  proceeding,  then  the  same  concerns discussed in relation to the MoD(UK) claims would apply.33  A Court of England and Wales would be asked to preside over a case in which the sole defendant was the New Zealand government, the applicable law was that of  New Zealand, and the inquiry was into the actions of the Royal New Zealand Navy.  It is not clear to me that the waiver of immunity indicated by AGNZ in relation to the hybrid proposal would apply to that very different situation.34   Nor do I consider it likely that a Court of England and Wales would accept jurisdiction.

[73]     Doubts about an available alternative forum aside, for the reasons already mentioned the courts of New Zealand are the appropriate forum for the proceeding. That is not to say the proceeding will not have difficulties, but it is difficult to conceive that a court of another jurisdiction is more appropriate.

[74]     There are aspects to this situation where it could be argued the plaintiff is manipulating the process to the first defendant’s disadvantage – by not filing her civil claim in England (where witnesses are compellable), and by not authorising Royal Navy Police to investigate.   However, on further analysis, that is not the position.  There can be no obligation on her to sue the United Kingdom government, although the plaintiff was willing to do so if it could be done in New Zealand.   If there  is  a  tenable  claim  against  the  New Zealand  government  for  omissions occurring   in   New Zealand   (including   when   on   secondment   pursuant   to   an
arrangement set in place by the Royal New Zealand Navy),35  then New Zealand is

33         The same factors from Wing Hung Printing, above n 29, at [45]–[46] as discussed above are appropriate in determining that New Zealand is the appropriate forum here.
34	The immunity waiver was made in relation to the joint battery claim.
35         This proceeding does not address that issue.  It is an element of r 6.29 but other than in relation to the dual vicarious liability claim, it was not advanced by the respondents as a basis for upholding these applications.

the correct place to bring those proceedings.  Further, by no means is all the evidence sourced in the United Kingdom.   There are allegations about events occurring on New Zealand ships, and there may be evidence about the Royal New Zealand Navy’s approach to arrangements with friendly navies, and what steps it takes therein.

[75]     AGNZ raises concerns about the appropriateness of a New Zealand court inquiring into events involving the Royal Navy.   That is a matter better discussed under the next section dealing with immunity and non-justiciability.   For reasons already  discussed,  on  the  forum  issue  there  is  not,  in  my  view,  an  available alternative, and in any event the nature of the claims is such that New Zealand is the appropriate forum.

[76]     Accordingly,  I  conclude  New Zealand  is  the  appropriate  forum  for  the proceedings against AGNZ.

Issue two – jurisdictional bar

[77]     AGNZ contends that it is not permissible in a New Zealand Court to inquire into events that occurred on the warship of a foreign state.  If correct, it would be necessary to strike out those aspects of the statement of claim.   The prohibition would not extend to events allegedly occurring at the Royal Navy land base.

[78]     That immunity attaches generally to a ship in this way is not in dispute.36
Yet, the extent of the prohibition is less clear.  The basic position is expressed by Gill and Fleck in this way:37

36         See for example, United Nations Convention on the Law of the Sea 1833 UNTS 3 (opened for signature 10 December 1982, entered into force 16 November 1994), art 32; and ARA Libertad (Argentina v Chad) (Provisional measures) [2012] ITLOS Rep 332 at [95].
37	Terry D. Gill and Deiter Fleck The Handbook of the International Law of Military Operations
(2nd  ed, Oxford University Press, Oxford, 2015) at [20.10].  See also James Kraska “Military Operations” in Donald R Rothwell and others (eds) Oxford Handbook of the Law of the Sea (Oxford University Press, Oxford, 2015) 866 at 871; R. R. Churchill and A. V. Lowe The Law of the Sea (3rd ed, Manchester University Press, Manchester, 1999) at 99; and Sir Robert Jennings and Sir Arthur Watts (eds) Oppenheim’s International Law: Volume I Peace (Parts 2 to 4) (9th ed, Longman, London, 1992) at 1167.

The legal status of warships flows from the sovereignty of the State whose flag they fly … warships are platforms operated by a State exclusively for non-commercial government purposes thus sharing the flag State’s sovereign immunity … warships are immune from any exercise of another State’s jurisdiction, especially from arrest or search, whether in national or international waters.  They are also immune from foreign taxation, … and are entitled to exclusive control over persons onboard such vessels with respect to acts performed on board.

[79]   Although focused on foreign warships, I consider the first defendant’s submissions raise not only issues of state immunity, but related issues of act of state, comity between nations, and non-justificiability.   I will accordingly consider the AGNZ’s claims on two bases – first whether sovereign immunity applies, and second whether the doctrine of foreign act of state applies.

[80]     For the plaintiff Mr Bates, relying on overseas authority but particularly some decisions of the United Kingdom Courts, argued the AGNZ’s position on jurisdictional bar was untenable.  He particularly relied upon Belhaj v Straw38  and Rahmatullah v Ministry of Defence.39    Since the hearing of the appeal, the United
Kingdom Supreme Court has issued its joint judgment in both matters.40   I have not

received submissions on that decision but am satisfied it is appropriate to refer to it. In both cases the decisions under appeal that Mr Bates was relying on were affirmed. It is fair to observe that on any analysis the recent Supreme Court decision does not assist AGNZ’s case.

[81]     It will be helpful to briefly outline the facts of those two cases so that their relevance to the present situation will be apparent.  It is to be emphasised that, like here, the facts are untested.

[82]     Belhaj: Mr Belhaj and his wife alleged they had been unlawfully taken to Libya in 2004.  They were in Beijing and had been deported to Kuala Lumpur.  It was alleged the British Government had alerted the Libyan authorities to their presence in Kuala Lumpur.  By a complex route they ultimately ended up in Libya where they were detained for many years.  It was alleged they suffered mistreatment
at various stages of the journey, and in Libya. The couple brought proceedings in the

38	Belhaj v Straw [2014] EWCA Civ 1394, [2015] 2 WLR 1105.
39	Rahmatullah v Ministry of Defence [2014] EWHC 3846 (QB).
40	Belhaj v Straw; Rahmatullah (No 2) v Ministry of Defence [2017] UKSC 3, [2017] 2 WLR 456.

British Courts alleging false imprisonment, trespass to the person, conspiracy to injure,  misfeasance  in  public  office  and  negligence.    The  defendants  were  the Foreign Secretary (UK), the head of the Secret Intelligence Service (SIS), the SIS itself,  the  Home  Office,  the  Foreign  and  Commonwealth  Office,  the  Security Service, and the Attorney-General.

[83]     Rahmatullah:   Mr Rahmatullah was detained by British forces occupying Iraq.   He was eventually passed over to United States forces who subsequently transferred him to a base in Afghanistan where he was detained for over 10 years without trial or charge.  He alleged mistreatment by both British and United States forces, and brought proceedings in the United States courts against the same or similar defendants in relation to their alleged misconduct.

[84]     The  Supreme  Court  decision  analyses  claims  by  the  United  Kingdom defendants and held that in both cases the Courts of England and Wales could not, or should not, inquire into activities by the foreign states.   The AGNZ is in effect making the same claim here.

(a)       Sovereign immunity

[85]     The applicability of sovereign immunity turns on the manner in which the foreign state will be involved.  Mr Bates submits, and I accept, that the New Zealand claims will not place the United Kingdom Government in any legal jeopardy.  To use the words of Lord Mance in Belhaj:41

… the legal position of the foreign states, the conduct of whose officials is alleged to have been tortious in the places where such conduct occurred, will not be affected in any legal sense by proceedings to which they are not party.

[86]     Lord Mance, as did the other Lords, accordingly rejected the applicability of state immunity to those cases where the foreign state was not a party or otherwise
legally affected.  I consider the same applies here.

41	Belhaj, above n 40, at [31].

(b)       Foreign act of state

[87]     The first defendant’s submissions emphasise the idea of comity and also refer at  times  to  non-justiciability.    It  is  submitted  that  a New Zealand Court  should decline to inquire into the actions and internal workings of the navy of a friendly state.  In my view this submission falls to be analysed under the rubric of the foreign act of state doctrine (“foreign” distinguishes it from a New Zealand act of state). The act of state doctrine sits alongside state immunity, and contains a set of rules governing situations where a domestic court will not inquire into the acts of a foreign state (whether committed in the foreign state or elsewhere).

[88]     In Belhaj, there are three separate judgments which categorise (differently) the situations when foreign act of state will apply.  The majority judgment is that of Lord Neuberger with whom Lady Hale, Lord Clarke and Lord Wilson concur.  The other judgments are those of Lord Mance, and Lord Sumption (Lord Hughes concurring).

[89]     It is Lord Neuberger who describes the doctrine as having four “rules”, any one of which might cause a domestic court to decline to inquire into a certain matter. Relevant to the present case is Lord Neuberger’s third rule:42

The third rule has more than one component, but each component involves issues which are inappropriate for the courts of the United Kingdom to resolve because they involve a challenge to the lawfulness of the act of a foreign state which is of such a nature that a municipal judge cannot or ought not rule on it.  Thus, the courts of this country will not interpret or question dealings between sovereign states…   Similarly, the courts of this country will not, as a matter of judicial policy, determine the legality of acts of a foreign government in the conduct of foreign affairs.  It is also part of this third rule that international treaties and conventions, which have not become incorporated into domestic law by the legislature, cannot be the source of domestic rights or duties and will not be interpreted by our courts.  This third rule is justified on the ground that domestic courts should not normally determine issues which are only really appropriate for diplomatic or similar channels (see Shergill v Khaira [2015] AC 359, paras 40 and 42).

[90]     It can be seen that Lord Neuberger’s third rule is targeted at conduct which
has a much higher level of state involvement or political component than is the situation here.   The third rule very much looks at high level activity where it is

42	At [123].

unlikely that a domestic court would be competent to adjudicate.  There can be no suggestion, in my view, that the allegations in the present case would fit within this rule.

[91]     It is arguable that Lord Mance’s formulation of the equivalent rule is broader in its reach:43

The third is that a domestic court will treat as non-justiciable - or, to use language perhaps less open to misinterpretation, abstain or refrain from adjudicating upon or questioning - certain categories of sovereign act by a foreign  state  abroad,  even  if  they  occur  outside  the  foreign  state’s jurisdiction

…

The third type of foreign act of state is not limited territorially.  Whether an issue is non-justificable falls to be considered on a case-by-case basis. Considerations both of separation of powers and of the sovereign nature of foreign state or inter-state activities may lead to a conclusion that an issue is non-justiciable in a domestic court...   But in deciding whether an issue is non-justiciable, English law will have regard to the extent to which the fundamental rights of liberty, access to justice and freedom from torture are engaged by the issues raised.

[92]     Interestingly, Lord Mance refers to Buttes Gas and Oil Co v Hammer (No 3) as the leading example of this rule.44   The issues in that case, where the act of state doctrine was applied, very much involved the same high end political and diplomatic issues that Lord Neuberger’s description of the third rule entails.  Likewise Shergill v Khaira  refers  to  the  rule  as  involving  issues  “inherently unsuitable  for  judicial determination by reason only of [their] subject matter”.45

[93]     It is also helpful to note that Lord Neuberger described this category or rule as being based on judicial self-restraint and as sourced entirely in the common law. It does not have an international law basis but its application in a particular can be heavily influenced by international law.46     This is relevant to the applicability of
Belhaj to New Zealand law.

43	At [11(iii)(c)] and [11(iv)(c)].
44	Buttes Gas and Oil Co v Hammer (No 3) [1982] AC 888, [1981] 3 WLR 787 (HL).
45	Shergill v Khaira [2014] UKSC 33, [2015] AC 359 at [41].
46	Belhaj, above n 38, at [151].

[94]     The third judgment is that of Lord Sumption who notes, like Lord Neuberger, that act of state is a subject matter immunity that is wholly the creation of the common  law.47       His  Lordship  considers  the  doctrine  is  founded  on  the  twin principles of comity and separation of powers.  The latter principle recognises that “the conduct of foreign affairs” is a matter for the executive (and not the court).48
Lord Sumption identifies two strains to the act of state doctrine:

(a)       municipal law act of state which holds that domestic courts will not adjudicate on the lawfulness or validity of a sovereign state’s acts under the sovereign  state’s law.   The equivalent rule in the other judgments is expressed to be limited to property, but Lord Sumption considers it should extend to injuries to the person; and

(b)       the international law act of state which holds that domestic courts will not adjudicate on the lawfulness of the extraterritorial acts of foreign states in their dealings with other states.

[95]     Lord Sumption considered both the cases before the Supreme Court were to be analysed  as being claims by the government defendants that the doctrine of international law act of state applied.  His Lordship rejected the claim in both cases.

[96]     It is not necessary to attempt any more refined analysis of the competing approaches.  Recalling that the foreign act of state doctrine is sourced in the common law, and that there is no applicable statutory law in New Zealand, Belhaj if applied represents a complete rejection of AGNZ’s submission that the New Zealand court should not accept jurisdiction in this case.   The lower court decisions relied on before  me  by  Mr Bates  have  been  affirmed  by  the  Supreme  Court  decision. However, recognising that the applicability of the third rule is to be made on a case
by case basis, I give brief reasons why I reject its applicability here.

47	At [200].
48	At [225].

[97]     First, the effect of AGNZ’s analysis is that he would not be subject to any law as regards responsibility for the alleged wrongs committed on British soil and ship. In New Zealand, the foreign act of state doctrine, if available, would mean the Court should not inquire; in the Courts of England and Wales, a claim of sovereign immunity would be available to AGNZ to prevent inquiry there too.  Here, AGNZ quite properly indicates that immunity would be waived in those courts, but to accede to the first defendant’s analysis is to cede the justiciability decision to AGNZ. The  ability to  inquire  would  be  determined  by  whether AGNZ  chose  to  waive immunity in a foreign court.   This consequence of accepting AGNZ’s submission means considerable caution is needed before a Court declines domestic jurisdiction.

[98]     Second, the plaintiff’s pleadings will not require the attribution of any legal status to what is said to have occurred in the United Kingdom. All that is required is a  determination  of  what  occurred  as  a  matter  of  fact.    Mr Bates  had  placed considerable weight on this, and the point is reflected in the following passage from Lord Sumption:49

The act of state doctrine does not apply, in either form, simply by reason of the fact that the subject-matter may incidentally disclose that a state has acted unlawfully.  It applies only where the invalidity or unlawfulness of the state’s sovereign acts is part of the very subject matter of the action in the sense that the issue cannot be resolved without determining it.  There is no real difference between the parties on this point, but it is worth emphasising none  the  less,  for  it  is  of  some  importance.    Some  such  distinction  is essential if the act of state doctrine is not to degenerate into a mere immunity against international embarrassment. The principle is implicit in many of the English  cases,  but  it  can  best  be  illustrated  by  the  decision  of  the US Supreme Court in WS Kirkpatrick & Co Inc v Environmental Tectonics Corpn International, 493 US 400 (1990), which is also the case in which it was first clearly articulated.  …

[99]   Third, the nature of the acts being inquired into here will not involve considerations of such a type that it is necessary for a New Zealand Court to hold it should not adjudicate on them.  The two alleged batteries appear, as pleaded, to be the acts  of individuals and  largely unconnected  with  the Navy.   That  is  not to minimise them but rather to note they are not linked in the pleadings, as I read them, to a systemic flaw.  That said, given the claims about a culture of sexual harassment
and impropriety, the allegation of such a link would not be unexpected.

49	At [240]. It is appropriate to note Lord Mance disagreed with this analysis, at [64].

[100]   The sexual harassment conduct is said to be the product of a systemic flaw and would involve embarrassment for the Royal Navy if established.  But neither the embarrassment that flows from such events, nor the embarrassment that would attach if members of the Royal Navy are found to have committed the acts of sexual assault, would be sufficient to suggest a Court of New Zealand should decline to inquire  into  the  plaintiff’s  allegation  as  incidental  to  her  claim  against AGNZ. Further, for the reasons discussed, I do not consider the allegations that a court would inquire into in this case came close to the type of foreign state activity that the third rule of the foreign act of state doctrine contemplates.

[101]   For these reasons, I uphold the plaintiff’s application to set aside the first defendant’s protest to jurisdiction.

Conclusion

[102]   The MoD(UK) protest to jurisdiction is upheld and the claims against it are dismissed.

[103]   The AGNZ protest to jurisdiction is not upheld.

[104]   Costs memoranda may be filed if agreement cannot be reached.

Simon France J