Avant Propos

Il y a de cela deux années maintenant, le premier numéro de la Revue Juridique Polynésienne était publié sous l'égide de l'Association de Législation Comparée des Pays du Pacifique.

Ce second numéro s'inscrit non seulement dans la continuité d'un projet entrepris depuis 1988 à Papeete dans le cadre de l'option Droit du Pacifique (enseignement que quelques uns d'entre nous au Centre Universitaire de Papeete avons toujours considéré comme fondamental), mais il consacre aussi une coopération étroite et jamais démentie tant avec nos collègues universitaires juristes, extérieurs au Centre (de Victoria University of Wellington en particulier) qu'avec les forces vives du Territoire de la Polynésie Française et les institutions du gouvernement central.

Ainsi sans l'aide matérielle de la Faculté de Droit de Victoria University of Wellington, du Ministère Français des Affaires Étrangères, de la New Zealand Association for Comparative Law et de la Socredo, il eut sans doute été extrêmement difficile de mener ce projet à terme. Qu'ils en soient ici vivement remerciés.

Nous avons, conscients de l'environnement culturel spécifique de la Polynésie Française, voulu et conçu une publication regroupant des articles tant en français qu'en anglais. Notre audience et notre rayonnement dans cette région du monde ne pouvant se faire qu’au prix de cet effort. Il s'agit là d'une première dans le domaine juridique dans cette région, et nous sommes heureux d’en offrir la primeur à nos lecteurs. Ceci explique que le contenu de ce numéro, corresponde, sauf à quelques détails près, à celui qui a été retenu pour un numéro spécial de Victoria University Law Review destiné à marquer l'inauguration de ses nouveaux locaux dans l'ancien immeuble du Gouvernement néo-zélandais, complètement rénové pour l'occasion.

Yves-Louis SAGE Maître de Conférences à l'Université Française du Pacifique

Honorary Fellow in Law à Victoria University of Wellington

Président de L'Association de Législation Comparée des Pays du Pacifique

1

LIVING WITH AN ARCHAIC TREATY: SOLVING THE PROBLEM OF THE WARSAW CONVENTION'S GOLD CLAUSE W K Hastings*

Article 22 of the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage By Air limits carriers' liability by reference to the franc Poincaré or gold franc, a standard that no longer exists. Until the Montreal Protocols come into force or a revised and consolidated Convention is created, the author proposes a method that relies on co-operation between the executive and the courts to keep Article 22 alive and useful.

This is a short story about executive inertia and judicial timidity all over the world. What should a state do when a provision in a treaty to which it is bound becomes difficult to apply because that provision derives its meaning from a state of affairs that no longer exists? The answer need not be difficult, and in the case of the Warsaw Convention, the problem has been so thoroughly discussed that it is disconcerting to note that nothing has been done to resolve it for a decade.1 This article discusses how the United States, Australia, New Zealand and the United Kingdom have implemented, interpreted and * Senior Lecturer in Law, Victoria University of Wellington.

1 Articles on the gold franc provision concerned mainly with the Article 22 cargo liability limitation include: Danziger, "Trans World Airlines, Inc v Franklin Mint: The Judiciary's Problematic Role in Treaty Interpretation" (1985) 17 NYU J Int'l L and Pol 323; Note, "Franklin Mint Corporation v Trans World Airlines: Resolution of the Warsaw Convention Gold-Based Liability Limits Issue?" (1984) 18 Geo Wash J Int'l L & Econ 393; Note, Franklin Mint Corporation v Trans World Airlines, Inc. (1983) 77 AJIL 320; Verville, "Warsaw Convention - Federal Court Abrogates Article on Liability Limitation" (1982/83) 7 Suffolk Transnat'l L J 429; FitzGerald, "The Four Montreal Protocols to Amend the Warsaw Convention Regime Covering International Carriage by Air" (1976) 42 J Air L & Com 273; Mankiewicz, "Modification de la 'Clause-Or' de la Convention de Varsovie de 1929 et des Protocoles d'Amendement, [1975] Ann. Francais de Droit International 788; Heller, "The Value of the Gold Franc - A Different Point of View" (1974) 6 J Mar L & Com 73; Asser, "Golden Limitations of Liability in International Transport Conventions and the Currency Crisis" (1974) 5 J Mar L & Com 645; Heller, "The Warsaw Convention and the 'Two-Tier' Gold Market" (1973) 7 J World Trade L 126; Lowenfeld and Mendelsohn, "The United States and the Warsaw Convention" (1967) 80 Harv L Rev 497.

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applied Article 22 of the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage By Air2 in claims relating to lost or damaged cargo.3 This Article limits carriers' liability by reference to the franc Poincaré or gold franc, a standard that no longer exists.4 A method will then be proposed to keep Article 22 alive and useful until the Montreal Protocols come into force5 or a new Convention is ratified. Although this method relies on political will and better cooperation between the executive and the courts, that should not deter compliance with both the terms and the intention of the Convention.

Article 22 of the Warsaw Convention

The cargo liability limitation is found in Article 22(2)(a):

In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of two hundred and fifty francs per kilogramme...

The carrier's liability is not limited if the passenger or consignor has made a "special declaration of interest" at the time the package is handed over to the carrier;6 or if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage or "recklessly and with knowledge that damage would probably result";7 or if cargo is loaded without an air waybill having been made out;8 or if the air waybill omits certain information.9 If there is no argument on the special declaration or the air waybill, or if liability has been admitted, then only the amount of damages remains to be assessed. "Two hundred and fifty francs per kilogramme" does not appear to be ambiguous10 until Article 22(5) is read:

2 Warsaw, 1929, 137 LNTS 11.

3 The Convention also limits carriers' liability in cases of personal injury and death, and lost or damaged baggage.

4 The Convention uses the term "franc". This is defined to a particular quantity and quality of gold, which is the same definition as that of the franc Poincaré.

5 The Warsaw Convention was amended by the Hague Protocol in 1955 (raising the limit for passenger deaths from 125,000 Poincaré francs to 250,000), the Guatemala City Protocol in 1971 (raising the limit for passenger deaths to 1,500,000 francs), and the Montreal Protocols in 1975 (inter alia, raising and converting the sums in which the limits are expressed into SDRs). The Montreal Protocols have not come into force.

6 Article 22(2)(a).

7 Article 25, which was added by the Hague Protocol in 1955.

8 Article 9.

9 Article 9.

10 There has been argument on what weight to use in the event the Article 22 limit applies. See Saba v Air France 866 F Supp 588 (DDC, 1994)(as wilful misconduct was proved against Air France, the Article 22(2) interpretation issue became moot) and Norwood v American Airlines 16 Avi Cas (CCH) 17,218 (DC Sup Ct Small Clms 1977)(the weight of the damaged cargo is the proper weight to use).

THE WARSAW CONVENTION’S GOLD CLAUSE 3

The sums mentioned in francs in this Article shall be deemed to refer to a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures. Conversion of the sums into national currencies other than gold shall, in case of judicial proceedings, be made according to the gold value of such currencies at the date of judgment.

The expression "two hundred and fifty francs per kilogramme" in Article 22(2) is therefore not "francs" and indeed is not even a currency. It must be read as "two hundred and fifty currency units consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred". No such currency unit exists. If these currency units did exist, the last two sentences allow the conversion of these units into national currencies "according to the gold value of such [national] currencies". National currencies have not had a gold value since the 1970s. There are consequently two problems with a literal interpretation of Article 22(5): there is no such thing as a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred; and there is no such thing as a national currency that has a gold value.

The intentions of the drafters of Article 22(5) are well documented. Domestic French francs, the value of which was determined by French law, were explicitly rejected as the Article 22 standard because, in the words of the much-quoted M Pittard,11 the Swiss representative at the 1929 conference from which the Convention emerged:

Naturally, one can say "French franc" but the French franc, it's your national law which determines it, and one need have only a modification of the national law to overturn the essence of this provision. We must base ourselves on an international value, and we have taken the dollar. Let one take the gold French franc, it's all the same to me, but let's take a gold value.

In rejecting a domestic currency as the way to express the Article's limitation on carrier liability, the drafters pursued two objectives: a uniform internationally referenced limit that would be both independent of domestic law and capable of application in any domestic legal system; and a limit that would have a value that is constantly and consistently related to the value of the cargo and baggage subject to claims, thus remaining neutral for both carriers and consignors.12 The challenge is to achieve these objectives using the words of the Convention that have ceased to have their original meaning.

11 Minutes of the Second International Conference on Private Aeronautical Law, Warsaw, October 4-12, 1929, 89-90,

quoted in Danziger, above n 1, in Trans World Airlines v Franklin Mint 466 US 273 (1983) by Stevens J, dissenting, at 266-7, and in SS Pharmaceutical Co v Qantas Airways Ltd [1989] 1 Lloyd's Rep 319 at 323 (NSW SC), appeal dismissed at [1991] 1 Lloyd's Rep 288 (Kirby P dissenting).

12 Rogers CJ Comm D, SS Pharmaceutical Co v Qantas Airways Ltd [1989] 1 Lloyd's Rep 319 at 328 (NSW SC); Trans World Airlines v Franklin Mint 466 US 243, 255.

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The expression "the gold value of such [national] currencies" was meant to achieve uniformity and predictability as an expression of value. This could be achieved if in fact the expression was reversed to read "the current [national] value of gold." The immediately preceding sentence refers to the conversion of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred into a national currency, so to read the last sentence in this way does no great damage to the drafters' intention, and in fact, probably better achieves it. If this was the intention of the drafters, it does not really matter that there is no currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred because the drafters intended that such a currency unit be the value of that amount and quality of gold. The conversion provision likewise was intended to operate on the assumption that that amount and quality of gold had a value that could be expressed in a national currency. While it is true that gold had no value other than an "official" value when the Convention was drafted, it is the fact that gold was chosen to achieve the objectives of international uniformity and predictability of value that matters, not that any given currency had a gold value. The point of paragraph 5 was that gold had an internationally-referenced value. It still does as a commodity. The limit referred to in Article 22(2)(b) could be calculated as 250 times the value in domestic currency of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred per kilogram of damaged cargo.

The Convention also anticipated that the value of this amount and quality of gold could fluctuate. It required states to convert this sum into national currencies, in the case of judicial proceedings, "at the date of judgment." There would be no need to specify a date unless the value of gold expressed in a national currency could fluctuate. Not only does this sentence somewhat diminish an argument that market price of gold cannot be used because the drafters could not have anticipated fluctuations (although the degree of fluctuation in the 1970s and 1980s certainly could not have been anticipated), it also requires courts to know the value of gold at the date of judgment. Courts could rely on the submissions of counsel or take judicial notice of such value in relatively stable times. Other methods may be necessary in less stable times. But the Convention is clear and mandatory. It is the value of gold at the date of judgment that must be used to determine the damages awarded when the Article 22(2) limit applies.

The Montreal Protocols of 1975 amended the limitation on liability for damage to cargo to 17 SDRs per kilogram. The SDR was to be calculated in accordance with the method of valuation applied by the IMF.13 The Montreal Protocols also allowed states which were not 13 Article 22(4). The SDR, or Special Drawing Right, is the unit of account of the International Monetary Fund

(IMF). Its value is determined daily on the basis of a basket of five currencies: the American dollar; the deutsche mark; the French franc; the Japanese yen; and the pound sterling.

THE WARSAW CONVENTION’S GOLD CLAUSE 5

members of the IMF and whose law did not permit the application of SDRs as a method of calculating damages, to use the old "sixty-five and a half milligrammes of gold of millesimal fineness nine hundred" standard. It was called a "monetary unit" instead of a "franc". The last two sentences of the old Article 22(5) were tidied up to read:

These sums may be converted into the national currency concerned in round figures. The conversion of these sums into national currency shall be made according to the law of the State concerned.

This wording removes the awkwardness of the phrase "gold value of such currencies" and achieves the intent of the drafters in 1929, which was that the value in national currency of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred would be used to award damages up to the limit of 250 of these units/francs per kilogram.

Both the SDR and non-SDR regimes proposed in the Montreal Protocols went some way to modernise the archaic gold provisions of Article 22. The use of SDRs achieved the objective of an internationally-recognised standard removed from direct national influence, and the objective of a relatively stable and modern method of calculation. The reworking of Article 22(5) for countries which chose not to use SDRs, while continuing to be tied to the value of gold, explicitly stated that the value of the stated amount and quality of gold was to be converted into national currencies. Although this was stated to be "according to the law of the State concerned", thus raising a forum-shopping spectre, by removing the word "franc", substituting the word "monetary unit", and requiring sums of gold to be converted into national currencies, the drafters appeared to emphasise the market value of gold. While less satisfactory than the SDR provisions because of gold's less stable value, the reworked Article 22(5) at least removed confusion caused by the use of the word "franc" and created the potential for more realistic damage awards under Article 22(2).

The quid pro quo for substituting SDRs for all other states parties to the Warsaw Convention was however the removal of the Article 25 exception to the Article 22 personal injury liability limitation.14 The United States Senate also expressed difficulty with a mandatory surcharge on all tickets to finance a Supplemental Compensation Plan proposed by the United States as a condition for ratification of the Montreal Protocols, and was concerned about the effect of the nearly absolute liability limitation on safety standards.15 The inability of the United States Senate to pay this price for modernising and 14 Article 25 remained in place for cargo claims.

15 Senate Committee on Foreign Relations, Montreal Aviation Protocols 3 and 4: Report Together with Minority Views, Senate Executive Report No. 21., 101st Congress, 2d Session, 1990; Matte, "The Warsaw System and the Hesitations of the US Senate" (1983) 8 Annals of Air & Space L 151.

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raising the liability limitation ceiling resulted in the Montreal Protocols not achieving the necessary thirty ratifications required to enter into force.16 This has resulted however in perpetuating the very regime the objectors abhor.17 It has also resulted in continuing problems of interpretation and application of Article 22(5), made seemingly more futile because of the ridiculously low awards that often result from these tortuous interpretations by courts and executives all over the world.

State Practice

The difficulty in interpreting and applying Article 22(5) has resulted in inconsistent practice, both within and among states. The international standardisation the Convention sought to achieve has been subverted, and enormous forum shopping opportunities created. Although Article 22 appears largely aimed at courts, the executive branch in many countries has assisted in creating this lack of uniformity, both by not ratifying the Montreal Protocols and by not acting creatively to keep Article 22 alive in new economic circumstances.

The Executive

In New Zealand, the Convention as amended by the Hague Protocol is scheduled to the Carriage by Air Act 1967, and is given force of law by s. 7 of that Act. In anticipation of the entry into force of the Montreal Protocols, the Convention as amended by the Hague and Montreal Protocols is scheduled to the Carriage by Air Amendment Act 1990. This Act received royal assent on 8 August 1990 and was stated by s. 1(2) to enter into force on 1 September 1990. On 31 August, the day before the Montreal Protocols were to become New Zealand law, the Carriage by Air Amendment Act (No. 2) 1990 received royal assent. This second amendment statute repealed s. 1(2) of the first amendment statute, and provided that the first amendment statute would come into force on a date to be appointed by the Governor-General by Order-in-Council. No such Order-in-Council has been promulgated which means the Montreal Protocols form no part of New Zealand law, although for a hectic three weeks in August 1990 it looked as though they might. It is the Convention as amended by the Hague Protocol that continues to have force in New Zealand.

16 Article VIII(1) of the third Protocol and Article XVIII(1) of the fourth Protocol. This of course raises the question

of why so many ratifications are required before these Protocols enter into force. The effect of their entry into force is to create a new treaty called the "Warsaw Convention as amended at The Hague, 1955, at Guatemala City, 1971, and by the Additional Protocols No. 3 and 4 of Montreal, 1975." See Article IX(2) of the third Protocol and Article XIX(2) of the fourth.

17 This point is also made by Cotugno, "No Rescue in Sight for Warsaw Plaintiffs from Either Courts or Legislature - Montreal Protocol 3 Drowns in Committee" (1993) 58 J Air L & Com 745, 792.

THE WARSAW CONVENTION’S GOLD CLAUSE 7

The Article 22 liability limitations are given force of law by s. 10 of the Carriage by Air Act 1967. Section 10(4) states that

The Minister of Finance may from time to time, by notice in the Gazette, specify the respective amounts which for the purposes of the said Article 22, and in particular of paragraph (5) of that Article, are to be taken as equivalent as the sums expressed in francs which are mentioned in that Article.

The amounts are specified in the Carriage by Air (New Zealand Currency Equivalents) Notice 1984.18 With respect to the cargo liability limitation in Article 22(2), the Minister fixed the value of 250 francs at NZ$33.75. There is no indication of the method used by the Minister to calculate this conversion. This is still the amount 12 years later.

In the United Kingdom, the Carriage by Air and Road Act 1979 amended the Carriage by Air Act 1961 to incorporate the Montreal Protocols. Section 4(1) of the 1979 amended Article 22 of the Convention (which forms part of the Carriage by Air Act 1961 as Schedule 1 of that Act) to, among other things, substitute the words "17 special drawing rights" for the words "two hundred and fifty francs". To convert SDRs into sterling, s 5 provided that:

the value on a particular day of one special drawing right shall be treated as equal to such a sum in sterling as the International Monetary Fund have fixed as being the equivalent of one special drawing right ... for that day ...

Subsection (2) went on to provide that a Treasury certificate "shall be conclusive evidence of those matters for the purposes of the preceding subsection ..." With respect to judicial or arbitral proceedings, the words "a particular day" and "for that day" must refer to the "date of the judgment" specified in Article 22(5) as no other day is relevant in the context of such proceedings in the Convention. No Order in Council bringing these provisions into force with respect to carriage by air has been made. The United Kingdom, like New Zealand, has legislation implementing the Montreal Protocols on the statute books, but not in force. The Convention limitations in the United Kingdom remain based on gold francs. The Carriage by Air (Sterling Equivalents) Order 1986,19 like the 1984 New Zealand Notice, translates gold francs into sterling. The Article 22(2) 250 franc limit has been converted to £13.63. Unlike the New Zealand Notice however, an explanatory note which does not form part of the Order states that "[t]he sterling equivalents have been calculated by reference to the Special Drawing Right (SDR) value of a gold franc converted into sterling at current market rates." The method of calculation appears to be the market value of that quantity and quality of gold expressed in SDRs, a figure which is then 18 1984/326.

19 SI 1986 No 1778.

8 (1996) 26 VUWLR

converted into sterling. The use of SDRs as a conduit of calculation, instead of taking the daily sterling price of gold, appears intended to moderate fluctuations in the market value of gold caused by the daily management of any one country's (or person's) monetary policies.

The relevant Australian statute is the Civil Aviation (Carriers' Liability) Act 1959. This implements the Warsaw Convention as amended by the Hague Protocol and consequently suffers, like New Zealand and the United Kingdom, from the same references to gold. An attempt was made in 1982 to raise the limits on liability for personal injury and baggage damage by enacting the Civil Aviation (Carriers' Liability) Amendment Act 1982 which received royal assent on 6 September 1982, but the provisions actually raising the limits were to come into force on a date to be fixed by a proclamation that has never been made. The next attempt was the Civil Aviation (Carriers' Liability) Amendment Act 1991. Section 4 of the 1991 Act came into force on 11 December 1991. Section 4 purports to amend s. 8 of the principal 1959 Act by referring to the Montreal Protocols which are scheduled to the 1991 Act, and substitutes the following provision for s. 9 of the 1959 Act:

In assessing under this Act the damages recoverable in an action against a carrier, a court must convert all relevant SDR amounts into Australian dollars, using the exchange rate published by the Reserve Bank of Australia, being the rate that applies as at the day on which the court's judgment is given.

This provision does not give the Montreal Protocols the force of law in Australia. That is done by s. 9 of the 1991 Act, which, as one might have guessed, is to come into force on a date to be fixed by a proclamation that has not yet been made. There are consequently no "relevant SDR amounts" to which the above provision might apply.

While this is yet another example of ineffective statutes sitting in the statute books waiting for executive ratification of the Montreal Protocols and their proclamation into domestic law, the situation in Australia differs from that in the United Kingdom and New Zealand in that there is no subsidiary legislation or statutory instrument converting the Convention gold franc amounts into Australian currency. In all three countries, legislative intent that the Montreal Protocols become law has been demonstrated by the passage through Parliament of implementing legislation. This intent has been obstructed in all three countries at an international level by the inability of the Protocols to attract the required number of ratifications to bring them into force, and domestically by the executive not ratifying the Protocols. Implementing legislation cannot come into effect because of executive blockage at the domestic and international levels. In New Zealand and the United Kingdom, the executive has further impeded the legislature's intent with subordinate legislation freezing a conversion rate that is over a decade old. Although the United Kingdom has been up front about using SDRs in its method of calculating conversion, the main advantage of SDRs, which is their ability to reflect current values

THE WARSAW CONVENTION’S GOLD CLAUSE 9

independent of any particular country's monetary policies, is lost by the unchanging nature of a fixed amount stated in a statutory instrument. It is difficult to say, from a court's point of view, which is preferable: the existence of a statutory instrument that freezes the court's ability to make a realistic award; or the absence of such a statutory instrument that forces the court to step into the breach by choosing one of any number of conversion methods, all of which have judicial support somewhere, but none of which has the seal of current executive approval.

The Judiciary

This difficulty is reflected in the array of decisions by domestic courts. In the absence of executive guidance, courts have converted the sum of "two hundred and fifty francs per kilogramme" in Article 22(2) using four methods, each of which produces very different amounts in local currency. These methods have been thoroughly discussed elsewhere,20 but for convenience are summarised here:

(a) The market price of gold interpretation. The argument in favour is that the framers of the Convention had in mind the value of a certain weight of gold so that awards of damages could remain current. The argument against is that to apply a market rate would not be in the interests of predictability and stability of what was meant to be a predictable and stable international limit.21

(b) The last official value of gold interpretation. The argument in favour is stability and constitutional deference by the courts to an executive or legislative determination. The argument against is that the last official value of gold is completely out of touch with economic reality and defeats the ability of the Convention to offer a liability limit based on current values.22

(c) The SDR interpretation. The argument in favour is that it maintains the ability of the Convention to fix liability limits by reference to a stable currency, and that it is up to date. This is the interpretation provided by the First Additional Montreal Protocol of

20 By judges in SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1989] 1 Lloyd's Rep 319 (NSW SC) and Trans World

Airlines Inc v Franklin Mint Corp 104 SC 1776 (1984); and by academics in the references cited in footnote 1.

21 SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1989] 1 Lloyd's Rep 319 (NSW SC), appeal dismissed by NSW CA at [1991] 1 Lloyd's Rep 288. See also the list of cases cited by Rogers CJ Comm D in SS Pharmaceuticals [1989] 1 Lloyd's Rep 319, which is identical to the list of cases cited by Franklin Mint in the US Supreme Court case, a list which is cited by Danziger, above note 1, 348: Cosida SpA v BEA, Milan Ct of App No 2796/77, 9 June 1981; Kuwait Airways Corporation v Sanghi, Court of the Principal Civil Judge, Bangalore, India, 11 August 1978; Balkan Bulgarian Airlines v Tanmaro, Court of Milan, Italy, [1982] 17 Eur Tr L 330; Florencia, Cia Argentina de Seguros, SA v Varig, SA , Fed CA Buenos Aires, Argentina, 27 August 1976 [1977] Uniform L Rev 198; Zakoupolos v Olympic Airways Corp, No 256/74, Ct of App, 3d Dep't, Athens, Greece, 15 February 1974.

22 Trans World Airlines Inc v Franklin Mint Corp 104 SC 1776 (1984).

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1975, which is not in force, and the interpretation used in the UK Carriage by Air (Sterling Equivalents) Order 1986 and by courts in Italy, Austria and The Netherlands. The argument against is that it has nothing to do with the words of Article 22(5) and would amount, in effect, to a rewriting of the paragraph. 23

(d) The current value of the franc interpretation. The argument in favour is that the franc is referred to in Article 22(5), and since it no longer has a gold value, the current, easily ascertainable, market value of the franc itself must be used. The argument against is that it was the intention of the framers of the Convention to put the liability limit beyond the control of any one country, in other words, to "internationalise" it. Continued reference to the franc would defeat this purpose. This has been recognised in France itself.24

Each of these interpretations are supported by courts which of course operate in the context of their own domestic statutes, subordinate legislation and constitutional customs concerning treaty implementation and interpretation. These variants play no insignificant role in the overall appearance of disarray in the interpretation and application of the Warsaw Convention even though this is exactly what the Convention was designed to overcome. For example, in the United States, the Convention is self-executing. In the absence of any executive or legislative indication of denunciation as required by Article 39, the Supreme Court in Franklin Mint held that the doctrine of changed circumstances could not be successfully argued by a private party.25 The Civil Aeronautics Board (CAB) was delegated power to make the conversion required by Article 22 which it last did in 1974.26 This determination had not changed since gold was demonetised, but since the conversion represented the executive's determination, the Court was bound to uphold it unless it was contrary to the Convention itself. As the gold clause has no current meaning, this at first glance seemed an impossible task, but the court decided that continued use of the last 23 State of The Netherlands v Giants Shipping Corp, Judgment of 30 May 1981, Hoge Raad der Nederlander, Neth.

Rechtspraak van de Week 321, cited in Danziger, above n 1, 362, and by Rogers CJ Comm D in SS Pharmaceuticals, above n 21. See also Linee Aerea Italiane v Ricciole, Civil Court of Rome, 14 November 1978; Kislinger v Austrian Airtransport, No 1 R 145/83, Commercial Court of Appeals of Vienna, Austria, 21 June 1983; Rendezvous-Boutique-Parfumerie Friedrich und Aolbine Breittinger GmbH v Austrian Airlines, No 14 R 11/83, Court of Appeals of Linz, Austria, 17 June 1983; Kim v Korean Air Co Ltd , Seoul Court of Appeal, 30 November 1987, also cited by Rogers CJ Comm D. SDRs are now the basis upon which Article 22 calculations are made in France: Chassagnac v Air France, Cour d'Appel de Paris (1er Ch), 22 September 1989, (1989) 43 RFDA 550.

24 Only two cases are ever cited in support of this interpretation: Kinney Shoe Corp v Alitalia Airlines 15 Avi Cas 18,509 (SDNY, 1980) which has been superseded by Franklin Mint; and Chamie v Egyptair , Cour d'Appel de Paris, (1981) 35 RFDA 148, which was reversed by the Cour de Cassation (1983) 37 RFDA 223 and which has been superseded by Chassagnac, (1989) 43 RFDA 550.

25 Franklin Mint, above n 11, 252: "Legislative silence is not sufficient to abrogate a treaty".

26 Above n 25, 254. CAB Order 74-1-16 set the value at US$9.07 per pound.

THE WARSAW CONVENTION’S GOLD CLAUSE 11

official price of gold was "reasonably stable" and "predictable", thus meeting several of the purposes of the Convention.27 This is less an argument based on any inherent value of old gold, and more an argument that it remains the province of the executive to implement Article 22, and until the executive indicates that it has modernised its interpretation of Article 22, the last executive interpretation is the only one the courts can look to. Indeed, this point is driven home by the dissenting Justice in Franklin Mint, Justice Stevens, who said, "The task of revising an international treaty is not one that this Court has any authority to perform."28

Franklin Mint's deference to executive implementation of Article 22 is also the approach likely to be taken by Commonwealth courts where the executive has made its view known, as it has in the United Kingdom and New Zealand. The existence of a statutory instrument in each of these countries appears to have either encouraged settlements or encouraged litigants to litigate elsewhere. In Australia however, the executive has not interpreted Article 22, with the result that the New South Wales Supreme Court in SS Pharmaceutical v Qantas Airways29 was left to give meaning to an archaic clause in a treaty in the absence of executive direction. That case involved damage to pallets of pharmaceutical items left out in the rain at Sydney airport. Rogers CJ Comm D held that Article 25 applied and that consequently the defendants were not entitled to limit their liability under Article 22. Nevertheless, Rogers CJ Comm D gave an extensive interpretation of the Article 22 gold clause. After a process of eliminating SDRs because the government indicated that it was exploring other avenues in light of the failure of the Montreal Protocols,30 eliminating the last official price of gold because it "would have as much relevance to proper levels of compensation to fix a Roman coin as the appropriate standard"31, and eliminating the current French franc because it "flies flatly in the face of what was decided at the Warsaw Convention"32, Rogers CJ Comm D applied the current market price of gold interpretation. Although deciding it was "destructive of stability"33 His Honour stated that the "only gold 27 Above n 25, 256.

28 Above n 25, 283. Justice Stevens of course disagreed with the majority's view that the court was deferring to the executive branch's interpretation of the gold clause. He argued that the majority would not have been so deferential if the CAB had used a method other than the last official value of gold, and that by choosing this outdated method, the majority was effectively, and unconstitutionally, rewriting the treaty.

29 SS Pharmaceutical Co Ltd v Qantas Airways Ltd [1989] 1 Lloyd's Rep 319 (NSW SC), appeal dismissed by NSW CA at [1991] 1 Lloyd's Rep 288.

30 Above n 29, 326.

31 Above n 29, 327.

32 Above n 29, 328.

33 Above n 29, 328.

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price that can be used is the only price currently in existence, the free market price."34 An appeal to the New South Wales Court of Appeal on Rogers CJ Comm D's finding that the case was within Article 25 was dismissed.35 In his dissenting judgment however, Kirby P as he then was thought that if the appeal had been upheld on the Article 25 point, then further argument was necessary on the Article 22 point.36 His Honour did however associate himself with Rogers CJ Comm D's request "that the Australian Government should give urgent attention to the defects in the law called to light by this case."37

Interpreting New Zealand Implementing Legislation

Taken together, the two main precedents to which a New Zealand court may look for guidance in an Article 22 case present an unsatisfactory situation. One relies on the last executive interpretation of the gold clause, which is the last official price of gold. The other calls this interpretation inappropriate, and uses, by a process of elimination, the current market value of gold, an interpretation called into question, but not decided, on appeal. Unless the Carriage By Air (New Zealand Currency Equivalents) Notice 1984 can be challenged, it will be the 12 year-old values set out in that Notice that a New Zealand court will apply.

The self-executing nature of the Convention in the United States makes the Convention effective as part of American domestic law. It is domestic legislation that gives the Convention effect in New Zealand. Section 7 of the Carriage by Air Act 1967 gives the Convention as amended by the Hague Protocol the force of law in New Zealand. Section 10(4) states that the Minister of Finance "may . . . specify the respective amounts which for the purposes of the said Article 22, and in particular of paragraph (5) of that Article, are to be taken as equivalent to the sums expressed in francs . . ."38. Section 10(4) could be read as allowing the Minister to specify an amount in Article 22(5), but as there is no amount in Article 22(5), the reference to Article 22(5) in section 10(4) relates to "purpose" rather than "amount". The Act does not impose any duty on the Minister to specify amounts. Parliament has delegated authority to the Minister to specify amounts at her or his discretion. This is often done with respect to implementing specific or changeable details of ratified treaties. It is an authority which the Minister, in his discretion, exercised with respect to paragraphs (1), (2)(a) and (3) of Article 22, for the purpose set out in Article 22(5). The purpose set out in Article 22(5) is the purpose of conversion of gold franc 34 Above n 29, 328.

35 [1991] 1 Lloyd's Rep 288.

36 Above n 35, 306.

37 Above n 35, 306.

38 My emphasis.

THE WARSAW CONVENTION’S GOLD CLAUSE 13

amounts into domestic currency which, in the case of judicial proceedings, is to be made at the date of judgment. The Minister did this in the 1984 Notice. So did the CAB did in its 1974 Order and the United Kingdom in its 1986 Order. The only difference is that the CAB based its conversion on the last official price of gold and the United Kingdom based its conversion on the value of gold expressed in SDRs translated into sterling at the date of the drafting of the Order. There is no indication in the New Zealand Notice as to the method used. This situation creates the potential for a New Zealand precedent similar to the criticised Franklin Mint judgment.

It is possible to argue that the Minister did not take into account the clear words of the Convention in gazetting the 1984 Notice. This argument can also be made with respect to the United Kingdom Order and could have been made with respect to the CAB Order, but appears not to have been. The 1984 Notice refers to the "sums mentioned in francs" in Article 22, and thus appears to be what Article 22(5), at first glance, requires. Nevertheless, Article 22(5) states a mandatory temporal condition in the case of judicial proceedings. It requires conversion of the sums stated in francs to be "at the date of the judgment". While the 1984 Notice will obviously be alive at the date of any subsequent judgment, the Convention requires conversion to take place at the date of judgment, not the application of an amount that has already been converted before the judgment, which is what the 1984 Notice does. As s. 7 gives the entire Convention force of law, and as s. 10(4) makes explicit reference to Article 22(5), it is possible to argue that the 1984 Notice is not a Notice which meets the requirements of Article 22(5). In other words, the 1984 Notice has nothing to do with Article 22(5), an Article having force of law in New Zealand, because the Notice can never be a "conversion ... according to the gold value of such currencies at the date of judgment." If this is the case, a New Zealand court will be in the same position as the New South Wales Supreme Court, and will have to look to state practice and the intention of the framers to interpret an Article without modern meaning. Either way, the situation is unsatisfactory.

IATA Practice

At its 51st annual general meeting in Kuala Lumpur on 31 October 1995, IATA adopted the Intercarrier Agreement on Passenger Liability.39 Although mainly concerned with liability for personal injury and death, the carriers opted to waive the Warsaw limits subject to two conditions: the full recoverable compensatory damages will be determined according to the law of the domicile of the passenger; and that the Warsaw defences remain available to the carrier. This is an agreement amongst private parties. It cannot 39 I am indebted to Professor Michael Milde of McGill University for allowing me to read his as yet unpublished

paper entitled "Warsaw Requiem or Unfinished Symphony" which discusses how the airlines have coped with the inability of states to update the Warsaw regime.

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amend the Warsaw Convention. Indeed, Article 32 expressly addresses such agreements and declares them void except for arbitration agreements relating to cargo claims. On the other hand, the limitation of liability provisions of Article 22 exist for the benefit of the carriers. If the carriers choose to waive them, only insurers could complain, and they were consulted by the carriers before the Kuala Lumpur meeting.40 A great many states and national carriers have voluntarily increased their liability, and have expressed their liability in SDRs.41

The continued existence of the gold clause alone is making the Warsaw Convention almost daily increasingly archaic, and forcing states and carriers into implementing what they genuinely perceive to be realistic remedial measures. The consequence is that such unilateral activity rebounds on the Warsaw regime, outdating it even more rapidly. Executive attention needs to be turned away from unilateral bandaging and towards a solution that preserves the universality of the Convention regime.

A solution

Courts can hardly be blamed for the confusion resulting from reluctant judicial intervention in an area that ought to be the preserve of the executive. Only the executive can enter into treaties; only the executive can amend them when they cease to be of use, or in the case of the Warsaw Convention, when they become a hindrance to achieving legal uniformity amongst states and justice amongst individual claimants. To devote executive energies to unilateral solutions is to divert executive energies from an international solution, and to make it more difficult to achieve an international solution when the opportunity finally arises. What needs to be done?

Domestically, there should be no statutory instrument fixing the value of the "franc" in Article 22. A figure 12 years out of date is worse than no figure at all. Instead, the words of Article 22(5) should be adhered to. They require conversion of the sums mentioned in Article 22 to occur at the date of judgment. The most the executive should do is indicate to the courts the method of conversion to be used. Either the market value of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred expressed in domestic currency should be used, or the market value of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred expressed in SDRs which is then converted into domestic currency should be used. The latter method is probably better because the use of SDRs will tend to moderate market fluctuations in the value of gold. Courts could then request either the Reserve Bank or the Minister of Finance or Foreign Affairs to provide the 40 Above n 39, 8.

41 Gazzetta Ufficiale della Republica Italiana, Roma, No. 168, 19 July 1988 applying to Alitalia everywhere, and to foreign carriers within Italy.

THE WARSAW CONVENTION’S GOLD CLAUSE 15

amount in domestic currency using the above method on the day of judgment. Indeed, this is the practice in France.42 This will involve some co-ordination between the courts and the executive, but nothing that could not be easily achieved in the electronic era. It also satisfies the wording of the Convention as it stands.

Internationally, if the Montreal Protocols are not to be ratified - they are, after all, 21 years old now and themselves increasingly out of date - something has to be done to stop the break-up of the Warsaw system. The main virtue of the Montreal Protocols was the use of SDRs instead of gold francs as a unit of account. This should be retained. Current disadvantages of the Montreal Protocols are that the liability limits are out of date, and perhaps even unnecessary in light of current IATA thinking; and that the new instrument to be created on their entry into force was to be an unwieldy amalgamation of years of amendments to the Warsaw Convention. What is needed is a consolidation of international carrier liability provisions into one coherent instrument that uses SDRs as an international unit of account. A new international conference needs to be convened for such a purpose. Article 41 provides that any party may "call for the assembling of a new international Conference in order to consider any improvements which may be made in this Convention." Participation of the carriers is essential. What better country to call for such a conference than the home of one of the world's leading international carriers - New Zealand.

42 Chassagnac v Air France, Cour d'Appel de Paris (1er Ch), 22 September 1989, (1989) 43 RFDA 550.

1

INTRODUCTION AU DROIT DE LA VENTE INTERNATIONALE DE MARCHANDISES Par Jérôme Huet*

Introduction

On définit volontiers la vente internationale comme une opération ayant "pour effet de réaliser au delà des frontières un flux de marchandises et un reflux de valeurs".1 Et l'on considère qu'à ce contrat on ne saurait appliquer en tous points les mêmes règles qu'à la vente interne, car elles ne sont pas toujours propres à satisfaire les exigences du commerce international.2 Cela se conçoit aisément.

L'opération est, le plus souvent, conclue entre commerçants - la vente internationale de marchandises est une vente commerciale à l'état pur - et la distance qui les sépare fait * Agrégé des Facultés de droit. Professeur à l'Université de Paris V-René Descartes. Expert auprès de la

CNUDCI.

1 Civ. 1ère, 4 mai 1964, Bull. civ. I, n° 228, J. dr. int. (Clunet) 1965. 126, note B. G., achat de blé à une coopérative française et livrable en Allemagne, contrat international, validité d'une clause de paiement par référence à une monnaie étrangère et à son cours au jour du contrat; adde, Civ. 17 mai 1927, DP. 1928. 1. 25, concl. Matter; comp. retenant le critère de la mise en cause des intérêts du commerce international, Civ. 19 février 1930 et 27 janvier 1931, S. 1031. 1. 1, note Niboyet; Civ. 1ère, 18 mai 1971, J. dr. int. (Clunet) 1972. 62, note B. Oppetit, D. 1972. 37, note D. Alexandre; Paris 13 décembre 1975, Rec. crit. dr. int. priv. 1976. 507, note B. Oppetit, Rev. arbitr. 1977. 107, note Ph. Fouchard; Paris 9 novembre 1984, J. dr. int. (Clunet) 1986. 1039, note E. Loquin; et comp. retenant le critère de la diversité des points de rattachements, Civ. 1ère, 4 juillet 1972, J. dr. int. (Clunet) 1972. 843, note B. Oppetit, Rev. crit. dr. int. priv. 1974. 82, note P. Level; et V. V. Heuzé, La vente internationale, n° 4, très critique sur le sujet.

La Convention de Vienne de 1980 sur la vente internationale de marchandises retient, quant à elle, le fait que les parties ont leur établissement dans des Etats différents, ce qui impliquera le plus souvent un flux et reflux de choses et de monnaie, mais pas toujours: il y a là simplement "une présomption suffisante d'un mouvement de marchandises", B. Audit, La vente internationale, n° 16.

Adde, sur la question, Ph. Kahn, J.-Cl. Dr. int., Fasc. 565-A-5, Vente commerciale internationale, 1989; Batiffol et Lagarde, T. 2, n° 575; et, sur la notion de contrat international, P. Courbe, J.-Cl. Com. Fasc. 335, Contrats commerciaux internationaux, 1986, n° 5 s.

2 En ce sens, par exemple, Malaurie et Aynès n° 65, 272 et 286, qui insistent aussi sur le fait que la diversité des législations nationales entraîne des distorsions de concurrence et l'un des intérêts d'une uniformisation du droit en la matière est de les éliminer.

2 (1996) 26 VUWLR

qu'elle s'accompagne généralement d'un transport. Il en résulte des risques particuliers pour les marchandises. Et l'éloignement des parties complique aussi les questions de règlement du prix... D'où plusieurs sortes de difficultés: il faut savoir où doit se faire la livraison, qui doit organiser le transport et en supporter le coût,3 qui doit assumer les risques d'avarie ou de perte survenue en cours de transport,4 quand et comment devra s'effectuer le paiement,5 sans compter la nécessité de procéder à toutes sortes de formalités, notamment de dédouanement... Voilà quelques exemples des besoins du commerce international.

Lorsque la vente implique un transport, on parle de "vente maritime", étant donné que pendant longtemps le transport maritime était le plus usité. Consacrant le lien qui unit de cette manière la vente et le transport, une loi du 3 janvier 1969 est venue, en France, codifier les principales règles applicables en pareil cas, et que pour une bonne part la pratique avait de longue date établies: elle offre aux parties de choisir entre la vente "au départ", où la chose passe aux risques et à la charge de l'acheteur aussitôt livrée à quai pour être embarquée, et la vente "à l'arrivée", où elle reste aux risques et à la charge du vendeur jusqu'à ce qu'elle parvienne à destination.6

Quant aux règles prévues pour la vente interne, on observe qu'à divers égards elles sont mal adaptées à la vente internationale. Ainsi, pour ne prendre que cet exemple, le Code civil impose au vendeur, dans son art 1609, de délivrer la chose au lieu où elle se trouve au moment du contrat, ce qui signifie qu'il s'en exécutera le plus souvent en la tenant dans ses magasins à la disposition de l'acheteur.7 Or, il est rare qu'on retienne cette solution dans le commerce international.8 La distance qui sépare les parties impose fréquemment que le vendeur prenne les mesures nécessaires pour l'acheminement des marchandises: il convient, alors, avec l'acheteur qu'il organisera le transport, et parfois même qu'il en assumera le coût.9 Et que dire de la règle du droit interne qui fait passer la 3 Les Incoterms sont volontiers utilisés pour trancher ces difficultés, et V. infra, I, 2.

4 La Convention de Vienne aborde ces questions, et V. sur l'élaboration de ce texte, infra, II, 2.

5 Le crédit documentaire peut être utilisé à ce propos, et V. infra, I, 3.

6 Loi du 3 janvier 1969 relative à l'armement et aux ventes maritimes, art. 31 s: des ventes au départ, art. 32 s, et des ventes à l'arrivée, art. 36 s, elle distingue en outre la vente CAF, art. 39 s, qui oblige le vendeur à conclure le contrat de transport, à mettre la marchandise à bord et à l'assurer, mais n'en constitue pas moins du point de vue de la charge des risques une vente au départ; et sur ce texte, et les ventes maritimes en général, V. J. Calais-Auloy, Rep. com. Dalloz, V° Ventes maritimes, 1974, n° 3 et s; Y. Tassel, J.-Cl. Com. Ventes maritimes, Fasc. 1350, 1989, n° 27 s; Ripert et Roblot, T. 2, n° 2251 s; Rodière et du Pontavice, n° 420 s.

7 Cette règle correspond à la vente "à l'usine" (ou Ex Works), et V. sur cet Incoterm, infra, II, 2.

8 Et V. Y. Tassel, J.-Cl. Com. Ventes maritimes, Fasc. 1385, Vente FAS et FOB,1989, n° 2.

9 Ces solutions correspondent à la vente FOB ou CAF, et V. sur ces Incoterms, infra, II, 2.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 3

propriété de la chose, et les risques de perte, sur la tête de l'acheteur dès l'accord des parties.10 Certes, de telles dispositions sont supplétives et l'on peut adapter les solutions aux besoins de chacun, mais il n'en reste pas moins que les principes ainsi posés sont souvent loin des besoins existant en pratique.11

La dimension commerciale et internationale de l'opération justifie, donc, l'adaptation des règles du droit commun, de caractère national. D'où le travail effectué, depuis longtemps déjà, pour dégager des normes appropriées au sein d'organismes professionnels ou dans le cadre d'institutions comme la Chambre de commerce internationale (C.C.I.).12 Dès les années 30, apparaissent les premières codifications des Incoterms et des usages en matière de crédit documentaire.13 La vente étant l'instrument principal des échanges, malgré la concurrence accrue de l'industrie des services, il était logique aussi de voir se développer à son propos un effort d'unification du droit au niveau international: il a trouvé son aboutissement, sous l'égide de la Commission des Nations-Unies pour le droit du commerce international (CNUDCI),14 dans la Convention de Vienne sur la vente internationale de marchandises, adoptée en 1980.

Il y a là autant de matériaux pour la constitution de la lex mercatoria, qui est le droit substantiel du commerce international.15

Et la Convention de Vienne, qui a été ratifiée par la France, constitue également depuis 1988, date de son entrée en vigueur, notre droit de la vente internationale de marchandises, à côté des règles du Code civil applicables à la vente interne.

L'objectif devait être, donc, de doter la vente internationale de marchandises de règles qui, non seulement, lui soient adaptées, mais, surtout, qui puissent être admises à l'échelle mondiale: car seules des règles de droit homogènes, dans les divers pôles commerciaux de la planète, peuvent donner aux échanges internationaux la sécurité juridique souhaitable.16

10 Ou dès l'individualisation de la marchandise par le vendeur s'agissant de choses de genre, art. 1138, al. 2, c. civ.

11 V. à cet égard les développements sur la vente maritime, par Y. Tassel, J.-Cl. Com. Ventes maritimes, Fasc. 1355, Vente CAF, 1989, et surtout, Fasc. 1385, Ventes FAS et FOB,1989.

12 Organisme fondé au début du siècle, et localisé à Paris, 38 Cours Albert 1er, 75008: à cette adresse on peut se procurer les ouvrages réalisés dans le cadre de cette institution, et notamment les Incoterms et les Règles et usances uniformes sur le crédit documentaire.

13 Sur ces deux points, V. infra, I, 2 et 3.

14 Organisme dont le siège est à Vienne, et V. à son sujet et sur sa mise en place, infra n° 15, en note.

15 V. en ce sens, à propos des réalisations acquises dans le cadre de la CNUDCI, et notamment de la Convention de Vienne, B. Goldman, Les travaux de la CNUDCI, J. dr. int. (Clunet) 1979. 747, p 753.

16 V. B. Audit, La vente internationale, n° 1; et sur l'uniformisation internationale du droit, J. Hamel, G. Lagarde et H. Jauffret, T. 1, n° 43 s.

4 (1996) 26 VUWLR

A l'époque où les efforts menés en ce sens en étaient à leurs débuts, on a pu résumer les possibilités d'action en la matière en déclarant que trois sortes d'initiatives pouvaient être prises afin de répondre aux besoins du commerce, et porter remède à l'incertitude du droit applicable: 1) favoriser l'emploi de formes standardisées de contrats comportant des clauses d'arbitrage, pour échapper aux juridictions étatiques, 2) élaborer une codification internationale des règles du droit international privé, fixant la loi compétente en cas de conflit, 3) et, plus radicalement encore, faire disparaître ces sources de conflit de lois en uniformisant le droit substantiel de la vente dans les pays concernés par le commerce international.17 En fait, des progrès ont été accomplis sur ces trois terrains.

Dans cette introduction au droit de la vente internationale, il convient de présenter la problématique. On n'abordera, donc, pas le détail de la réglementation donnée à ce contrat par la Convention de Vienne de 1980. On commencera par évoquer le rôle de la pratique dans l'uniformisation du droit en la matière (I), puis on montrera quels efforts ont été faits pour parvenir à mettre en place un droit substantiel de la vente internationale qui soit admis à l'échelle mondiale (II) et, enfin, on donnera des précisions sur le jeu des règles de conflit qui servent à déterminer la loi applicable au contrat, lorsque la solution de difficultés juridiques dépendent encore de cette désignation (III). I Le rôle de la pratique dans l'élaboration du droit de la vente internationale

A Multiplicité des initiatives

Sous l'influence des milieux professionnels, des efforts ont été faits pour apporter plus de sécurité dans les relations entre les parties à la vente internationale, et cela de diverses manières: ils ont permis l'élaboration de documents contractuels standardisés (A), la mise au point d'une terminologie normalisée - connue sous le nom d'Incoterms - pour définir les liens entre la vente et le transport des marchandises (B) et l'adoption de règles de crédit documentaire pour assurer, dans les meilleures conditions, le paiement du prix (C).

17 H. C. Gutteridge, L'unification du droit de la vente, Etudes de droit civil dédiées à la mémoire de Henri

Capitant, 1938, p 259 s; mais l'auteur notait, en ce qui concerne la troisième possibilité d'action "Nous nous heurtons à l'hostilité très nette des juristes et des commerçants anglais à l'égard de toute mesure qui entraînerait l'abandon ou la modification du Sale of Goods Act de 1893. Qui plus est, il serait impossible à la Grande Bretagne de participer à l'établissement d'un code international qui ne serait pas accepté aussi par le Commonwealth des nations britaniques tout entier et par les Etats-Unis. Il est inadmissible que le degré très appréciable d'unification qui a été réalisé par le Sale of Goods Act et par l'Uniform Law of Sale américaine puisse être mis en péril", op. cit., p 276.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 5

1 Développement des contrats-types et des conditions générales de vente

a) Double origine, double nature

Parmi les documents contractuels destinés au commerce international, on en distingue deux sortes: les contrats-types, qui émanent généralement d'organismes professionnels, et les conditions générales de vente, qui sont élaborés dans le cadre d'institutions internationales.18

S'agissant de contrats-types, celui de la London Corn Trade Association, en vigueur dès la fin du siècle dernier pour ce qui est du commerce de grain, fait figure de précurseur.19 L'usage de ce type de document devait se développer au cours du XXème siècle. Ils sont, en principe, spécifiques à une industrie ou un commerce particulier et l'on trouve des textes aussi variés que celui de la Grain and Feed Trade Association, pour le commerce des céréales, ou les conditions générales des fonderies européennes du Comité des associations européennes de fonderie, applicable à cette industrie.20 De ces documents ayant trait à la vente, on rapprochera d'autres qui portent sur des opérations voisines, et notamment, pour ce qui est des marchés passés pour l'implantation d'installations industrielles ou commerciales, les conditions-types de la fédération internationale des ingénieurs-conseils, dites conditions "FIDIC".21

Même si ces modèles sous forme de contrats-types ne tirent jamais leur valeur juridique que de l'adhésion des parties dans la convention qu'elles passent, et donc de la volonté individuelle, on a dit à leur sujet qu'ils tendaient à être l'amorce d'un droit commercial international autonome, ce qui revient à leur attribuer une certaine portée normative.22 En tout cas, ces documents sont fort instructifs car ils traitent, en entrant 18 V. P. Malinverni, Les conditions générales de vente et les contrats-types des chambres syndicales, Thèse L.G.D.J.

1978; A. Meinertzhagen-Limpens, Typologie des conditions générales dans la vente internationale d'objets mobiliers corporels, in "Les ventes internationales de marchandises", 1981, p 79 et s; A. Tunc, Ebauche du droit des contrats professionnels, in "Le droit privé français au milieu du XXème siècle", Etudes Ripert, 1950; P. Padis, La vente commerciale internationale par contrats-types et Incoterms, Gaz. Pal. 1970. 2. doct. 91; A. Seube, Les conditions générales des contrats, in Etudes Jauffrey, 1974, p 621 s; Y. Loussouarn et J.-D. Bredin, n° 585 s; J. Thieffry et C. Granier, p 65 s.

19 V. Schwob, Le contrat de la "London corn trade association", Paris,1928; Y. Loussouarn et J.-D. Bredin, n° 562 s, et 585 s; G. Ripert et R. Roblot, t. 2, n° 2546; Ph. Kahn, La vente commerciale internationale, p 726 et s.

20 V. A. Meinertzhagen-Limpens, Typologie des conditions générales, in "Les ventes internationales de marchandises", 1981, p 79 s; P. Malinverni, p 349, où est reproduit le texte relatif à la fonderie.

21 Et V. M. Dubisson, La négociation des marchés internationaux, Feduci, éd. du Moniteur, 1982, p 96 et s; adde, J. Jehl, Le commerce international de la technologie, approche juridique, Thèse, Litec 1985, p 394 et s, à propos du code international de bonne conduite pour le transfert de la technologie, élaboré sous l'égide de la CNUCED.

22 V. Y. Loussouarn et J-D. Bredin, n° 562.

6 (1996) 26 VUWLR

souvent dans le détail, les aspects les plus importants des relations entre vendeur et acheteur: formation du contrat, qualité de la marchandise et garanties, expédition et prise de livraison, transfert de propriété et charge des risques de perte, conditions de paiement23....

En matière de conditions générales de vente, le mouvement d'unification s'est surtout développé depuis la seconde guerre mondiale. Des experts réunis dans le cadre d'institutions comme la Commission économique pour l'Europe des Nations-Unies (ONU-CEE), où se retrouvent des représentants de pays de l'Est comme de l'Ouest pour travailler à ce que l'on appelle la "facilitation" des échanges internationaux, ont mis en forme des clauses contractuelles à vocation internationale: à titre d'exemple, on peut citer les "Conditions générales pour la fourniture et le montage des matériels d'équipement à l'importation et à l'exportation", un des premiers textes de cet ordre qui fut élaboré dans les années cinquante,24 ou encore les "Conditions générales de vente à l'importation et à l'exportation de biens de consommation durables et d'autres produits des industries mécaniques fabriqués en série", dont la rédaction remonte à 1961.25 De son côté, le Conseil d'assistance économique mutuelle, ou CAEM, avait établi des textes pour la vente internationale entre les Etats qu'il regroupait, c'est à dire les pays de l'ancien bloc de l'Est,26 notamment des conditions générales uniformes pour les contrats de livraison mutuelle de marchandises.27

Dans les années 70, un projet prometteur et plus ambitieux, celui de "Conditions générales globales", susceptibles de couvrir toutes sortes de marchandises, a été lancé par la CNUDCI, et certaines clauses qu'il était envisagé d'y voir figurer reprenaient des dispositions déjà contenues dans la Loi uniforme sur la vente internationale, adoptée à La 23 Et V. l'étude approfondie qu'en fait A. Meinertzhagen-Limpens, Typologie des conditions générales, in "Les

ventes internationales de marchandises", 1981, p 79 s.

24 ONU-CEE n° 188 et 574, et V. la version 188A reproduite par B. Oppetit, Droit du commerce international, documents, Thémis 1977, p 363, sous la version 188A, et par P. Malinverni, p 332.

Pour une illustration, V. Civ. 1ère, 26 novembre 1980, J. dr. int. (Clunet) 1981. 355, note Ph. Kahn, livraison et montage d'un silo à grains: l'arrêt écarte les conditions générales de l'ONU-CEE pour les marchés internationaux de fourniture d'équipements à l'exportation - auxquelles s'était référée l'offre du fournisseur - faute d'accord exprès entre les parties.

25 ONU-CEE n° 730.

26 En pratique, le sigle d'origine anglaise, Comecon, était plus volontiers utilisé que celui de CAEM; par suite de l'évolution politique dans les pays de l'ex-Union Soviétique, cet organisme a prononcé sa dissolution en juin 1991, après quarante-deux ans de fonctionnement, V. Le Monde, 29 juin 1991, p 26, "Le Comecon disparaît officiellement.

27 V. J. Rajsky, Le rapprochement et l'unification du droit dans le cadre du conseil d'aide économique et mutuelle, Rev. int. dr. comp. 1976. 461; J. Thieffry et C. Granier, p 58.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 7

Haye en 1964.28 L'intérêt de ces travaux s'est trouvé, cependant, éclipsé par l'adoption en 1980 de la Convention de Vienne sur la vente internationale de marchandises.

b) Différences d'esprit

Ce qui différencie, sensiblement, les contrats-types et les conditions générales est que les secondes, en raison du fait qu'elles sont élaborées au sein d'organismes publics, recherchent un certain équilibre dans les relations entre les parties, alors que les premiers expriment plus nettement les intérêts corporatistes des professions concernées, et les traduisent en termes juridiques. On a pu s'en offusquer, à l'occasion. Evoquant le caractère supplétif des dispositions de la Loi uniforme de 1964,29 que l'on retrouve dans la Convention de Vienne, André Tunc souligne les dangers en résultant puisque, de ce fait, les contrats-types des partenaires commerciaux prévalent sur le texte international.30

L'opposition entre les deux catégories de documents contractuels, en réalité, n'est cependant pas aussi claire qu'on pourrait être tenté de le croire car il n'est pas rare que les conditions générales consacrent, elles aussi, un certain déséquilibre en faveur d'une des parties. Une illustration peut en être trouvée dans les "Conditions générales de vente à l'importation et à l'exportation de biens de consommation durables et d'autres produits des industries mécaniques fabriqués en série",31 où l'on voit inscrit nombre de clauses nettement favorables au vendeur: ce texte prévoit un délai de grâce pour le vendeur lors de la livraison (art 6-2), la possibilité de le décharger de sa responsabilité quant à la garantie (sauf la faute lourde, art 9-4), une faculté de choix pour le vendeur quant au moyen qui lui convient le mieux afin de remédier aux vices de la chose (art 9-5), le fait que l'acheteur prend à sa charge les frais et risques du transport s'il doit retourner la chose défectueuse afin de réparation ou de remplacement (art 9-6)..

2 Normalisation des liens entre vente et transport: les Incoterms

a) Lexique de termes et obligations associées

Les Incoterms - le mot est une contraction de l'expression "international commerce terms" - constituent un vocabulaire de termes commerciaux normalisés, destiné aux ventes 28 V. A. Meinertzhagen-Limpens, Typologie des conditions générales, in "Les ventes internationales de

marchandises", 1981, p 84; et sur la Loi uniforme de 1964, souvent appelée LUVI, V. infra, II, 1.

29 LUVI, texte précité.

30 Conclusions, in "Les ventes internationales de marchandises", 1981, p 416: et, prenant pour exemple les conditions rédigées par une puissante société sidérurgique où le vendeur était placé dans une position très favorable par rapport à l'acheteur, l'auteur déclare que "ces documents sont rédigés d'une manière parfois scandaleuse" et que "le potentior impose sa volonté".

31 ONU-CEE n° 730.

8 (1996) 26 VUWLR

de marchandises accompagnées d'un transport. Les options possibles sont présentées sous forme de sigles brefs: à chacun d'entre eux, par exemple au sigle EXW, FOB, CIF ou Ex-Ship,32 est associée une définition des tâches incombant à chacune des deux parties, de leurs obligations et de leurs charges, en particulier en ce qui concerne le lieu de la délivrance, la fourniture du fret et de l'assurance, l'attribution des risques du transport, la prise de livraison...33 Réalisé par la Chambre de commerce internationale, qui a pris l'initiative de la première édition dès 1936, ce lexique est régulièrement actualisé en fonction des besoins existants, et la version actuellement en vigueur date de 1990.34

L'objectif est de limiter le plus possible les malentendus et les écarts d'interprétation dans les rapports entre les parties à la vente, ce qui est à l'évidence d'un intérêt primordial. Un autre avantage est que, de cette façon, un lien est assuré de manière claire entre la vente et le transport, de telle sorte que les risques de litiges résultant de la dualité de contrats se trouvent limités.35

Il est déclaré, dans l'introduction de la version 1990: "Le but des Incoterms est d'arrêter une série de règles internationales pour l'interprétation des termes commerciaux les plus usités dans le commerce extérieur. On évite ainsi l'incertitude née d'interprétations différentes de ces termes d'un pays à l'autre, ou du moins cette incertitude se trouve considérablement réduite".36 Le texte souligne aussi que c'est au cas où les parties se 32 Le terme utilisé doit s'accompagner, dans le cas où c'est nécessaire, du nom du lieu désigné pour les opérations

de chargement et de transport: on dit, par exemple, FOB Marseille, ou CAF Bordeaux.

33 Concrètement, ces Incoterms sont présentés dans une brochure, suivant l'ordre croissant des obligations et charges incombant au vendeur, et donc de EXW à DDP, avec pour chaque terme un descriptif en plusieurs points des tâches incombant au vendeur sur la page de gauche, et de celles incombant à l'acheteur sur la page de droite.

V. Incoterms, brochure ICC-CCI n° 460, 1990, anglais-français; P. Chauveau, Traité de droit maritime, 1958, n° 902 s; Rodière et du Pontavice, n° 420 s; F. Eisemann et Y. Derains, La pratique des Incoterms, Jupiter 1988; Loussouarn et Bredin, n° 588 s; G. Ripert et R. Roblot, T. 2, n° 2546; P. Padis, La consultation pratique en matière de vente commerciale internationale, Gaz. Pal. 1968. 2. doct. 218; du même auteur, La vente commerciale internationale par contrats-types et Incoterms, Gaz. Pal. 1970. 2. doct. 91; J. Calais-Auloy, Rep. com. Dalloz, V° Ventes maritimes, 1974; P. Jasinski, Les nouveaux Incoterms et le crédit documentaire, Banque, oct. 1990, p 917 s; V. Heuzé, La vente internationale, n° 251 s, et 328 s.

34 Après celle de 1936, les versions successives des Incoterms datent de 1953, 1967, 1976, 1980, 1990; et V. Ripert et Roblot, n° 2546; Y. Loussouarn et J.-D. Bredin, n° 562 s, et 588.

35 Cependant, sur l'autononie du contrat de transport, l'introduction aux Incoterms insiste, soulignant que ce dernier peut apporter des précisions en ce qui concerne les délais ou la prise en charge de certains frais, et ce texte met même en garde sur le fait que les termes commerciaux peuvent y être utilisés dans des sens différents, V. la brochure ICC-CCI n° 460, précitée, introduction, point 15.

36 Introduction à la brochure ICC-CCI n° 460, précitée, point 1.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 9

réfèrent aux Incoterms dans leur contrat, que ceux-ci leur deviennent applicables,37 mais il n'est pas interdit d'en admettre également l'application à titre d'usages du commerce international.38 En tout état de cause, saisie du texte des Incoterms de 1990 la CNUDCI en a recommandé l'emploi, lors de sa vingt-cinquième session en 1992, reconnaissant qu'ils "constituent une précieuse contribution à la facilitation des échanges internationaux".39

La logique des Incoterms, dont l'un des intérêts majeurs est la répartition des risques entre les parties, s'articule autour de la distinction des ventes "au départ" et des ventes "à l'arrivée".40 La version de 1953 comptait neuf termes41 dont, entre autres, parmi ceux mettant les risques du transport à la charge de l'acheteur, le terme FOB (c'est à dire franco bord, ou free on board) où le vendeur est dit avoir exécuté ses obligations lorsque la marchandise a passé le bastingage du navire au port d'embarquement,42 et le terme CAF (contraction de coût assurance fret, ou cost insurance freight) qui réalise un assez bon équilibre entre les intérêts des parties puisque le vendeur, en plus de ce que lui impose le terme FOB, prend en charge les frais d'acheminement de la marchandise jusqu'au lieu de destination convenu, ainsi que l'assurance.43 Ce n'en sont pas moins deux modalités de vente "au départ", favorables au vendeur.44

37 "Les commerçants désireux d'utiliser les présentes règles devront spécifier que leurs contrats seront régis par les

«Incoterms 1990»", introduction à la brochure ICC-CCI n° 460, précitée, point 22; aussi bien a-t-on pu assimiler les Incoterms à des contrats-types, V. V. Heuzé, La vente internationale, n° 256.

38 Et V. sur ce point infra, II, 2, (c).

39 Rapport de la session des 2-22 mai 1992, A/47/17, n° 159 à 161.

40 Sur cette distinction, V. J. Calais-Auloy, Rep. com. Dalloz, V° Ventes maritimes, 1974, notamment n° 11; R. Rodière et E. du Pontavice, n° 421 s; la loi du 3 janvier 1969 relative à l'armement et aux ventes maritimes, adopte aussi cette distinction dans ses art. 32 à 38, et V. supra en introduction du chapitre.

41 Les termes de 1953 étaient: A quai, Franco wagon, FAS, FOB, C et F, CAF, Fret ou port payé jusqu'à, Ex ship, A quai dédouané; et V. Loussouarn et J.-D. Bredin, n° 588; P. Padis, La consultation pratique en matière de vente commerciale internationale, Gaz. Pal. 1968. 2. doct. 218.

42 Et V. sur ce type de vente, M. de Juglart, Les obligations des parties dans la vente FOB, Dr. marit. fr. 1958. 511; Fraikin, Du transfert de propriété dans la vente FOB, Dr. marit. fr. 1950. 107.

43 Sur la vente CAF, désormais appelée CIF dans les Incoterms, et l'équilibre qu'elle réalise, V. notamment J. Calais-Auloy, Rep. com. Dalloz, V° Ventes maritimes, 1974, n° 104 s, qui souligne que très tôt, entre 1928 et 1932, on a tenté d'en codifier l'usage dans les "Règles de Varsovie et d'Oxford"; Y. Tassel, J.-Cl. Com. Ventes maritimes, Fasc. 1355, Vente CAF, nature juridique, 1989, n° 2, selon lequel "la vente CAF correspond à un stade avancé du commerce maritime"; adde, M. de Juglart, Le règlement du fret dans la vente CAF, Dr. marit. fr. 1956. 639.

La loi du 3 janvier 1969 relative à l'armement et aux ventes maritimes, consacre ses art. 39 à 41 à la vente CAF, et V. sur ce texte, supra en introduction au chapitre.

44 V. R. Rodière et E. du Pontavice, n° 422 et 425; V. Heuzé, La vente internationale, n° 344. Il faut distinguer aussi les Incoterms selon les modes de transport visés: certains termes servent exclusivement au

transport maritime (transport par mer et par voies navigables intérieures: c'est le cas, par exemple, pour le terme

10 (1996) 26 VUWLR

De manière générale, d'ailleurs, les termes figurant dans cette version de 1953 montrent la prédominance qui était celle, à l'époque, des vendeurs: les termes favorables à ces derniers sont les plus nombreux.45 Par la suite, les Incoterms "au départ" garderont, certes, une place de choix étant donné que le vendeur souhaite généralement ne pas assumer trop de risques ou de frais, mais on verra se développer les Incoterms "à l'arrivée": ils jouent un rôle accru dans la version de 1990. La raison en est que le poids respectif des vendeurs et acheteurs tend à s'inverser sur l'échiquier marché mondial.46 Les Incoterms de 1953 témoignent aussi du fait que le commerce était encore, principalement, maritime. Au gré des révisions ultérieures, de nouveaux sigles vont apparaître pour tenir compte de l'évolution des activités transport et des technologies: il a fallu faire une place à d'autres moyens de locomotion, notamment au transport par avion,47 à de nouvelles modalités de fret ("conteneurisation", transport multi-modal...).48

La version actuellement en vigueur, qui remonte à 1990, reflète ces transformations. Elle est aussi la première à manifester un souci d'assurer la compatibilité des Incoterms avec le développement, croissant, des échanges de données informatisés (ou EDI),49 à quoi l'on doit sans doute rattacher un certain laminage linguistique d'où résulte la disparition du francophone CAF, coût-assurance-fret, au profit de l'anglophone CIF, cost-insurance-freight, subsistant seul désormais pour des besoins d'uniformité.

b) La gamme des Incoterms

La version de 1990 comporte treize termes, contre quatorze dans celle adoptée dix ans auparavant.50 Ces Incoterms, qui tiennent compte du fait que le transport s'effectue par mer ou par d'autres moyens de transport, sont répartis en Incoterms "au départ" et Incoterms "à l'arrivée", et à l'intérieur de cette dualité en quatre catégories, dont les trois premières relèvent des ventes "au départ", et la dernière des ventes "à l'arrivée": E (un

FOB), et certains à d'autres modes de transport (ainsi le FCA, qui est adapté à tous transports autre que maritime, y compris le transport multi-modal, où il est l'équivalent du terme FOB).

45 V. P. Jasinski, précité, p 917 s.

46 V. P. Jasinski, précité, p 917: "le marché est devenu de plus en plus un marché d'acheteurs".

47 D'où, dans la version de 1980, les FOR, FOT et FOA, qui sont des FOB rail, FOB camion c'est à dire truck, ou FOB aéroport, et qui ont été supprimés en 1990 pour être regroupés au sein du FCA, franco transporteur ou free carrier, qui vise la remise à tout transporteur, V. introduction à la brochure ICC-CCI n° 460, précitée, point 4.

48 V. par exemple, à cet égard, le terme FCA, évoqué supra, en note.

49 V. l'introduction à la brochure ICC-CCI n° 460, précitée, points 3 et 18 s; et sur ce type de communication, V. J. Huet, Aspects juridiques de l'EDI, Echanges de Données Informatisés, D. 1991. Chron. 182; Th. Piette-Coudol, L'échange de données informatisées, Gaz. Pal. 1991. Doct. 6-8 oct. 1991.

50 Diminution due à des regroupements, les FOR, FOT et FOA de 1980 (FOB rail, camion ou truck, et aéroport) ayant été réunis, en 1990, dans le FCA, applicable à tous transporteur, et V. sur ce point, supra, en note.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 11

terme), F (trois termes), C (quatre termes), D (cinq termes). Ils se présentent de la matière suivante.

I Incoterms "au départ", dans lesquels le vendeur assume le moins de coûts et risques résultant du transport, et où figurent: a) le groupe "E", avec un seul terme, 1. Ex W, c'est à dire A l'usine, ex works; b) le groupe "F", où le vendeur se libère par la remise de la chose dans le pays d'exportation et où l'on trouve: 2. FCA, Franco transporteur, free carrier, désignation valable pour tous moyens de transport; 3. FAS, Franco le long du navire, free along side ship, premier des termes propres au transport par mer ou par voies navigables; 4. FOB, Franco bord, free on board, désignation utilisée pour le transport par mer et par voies navigables; c) le groupe "C" qui réunit: 5. CFR, Coût et fret, cost and freight, applicable au transport par mer ou voies navigables; 6. CIF, Coût, assurance et fret (antérieurement CAF en version française), cost, insurance and freight, toujours propre au transport par mer, ou voies navigables; 7. CPT, Port payé jusqu'à, carriage paid to, qui couvre toutes les modalités de transport, ainsi que leur combinaison; 8. CIP, Port payé-assurance comprise-jusqu'à, carriage and insurance paid to, terme qui peut être utilisé pour toutes sortes de transport;

II Incoterms "à l'arrivée" où figure le seul groupe "D", dans lequel le vendeur assume le coût et les risques du transport jusqu'au pays d'arrivée: 9. DAF, Rendu frontière, delivered at frontier, valable pour tous modes de transport; 10. DES, Rendu ex ship, delivered ex ship, utilisable seulement pour le transport par mer ou voies navigables; 11. DEQ, Rendu à quai (droits acquittés), delivered ex quay (duty paid), également propre au transport par mer et voies navigables; 12. DDU, Rendu droits non acquittés, delivered duty unpaid, utilisable pour tous modes de transport; 13. DDP, Rendu droits acquittés, delivered duty paid, lui aussi utilisable pour tous modes de transport.

c) Interprétation des Incoterms

Malgré le succès des Incoterms, il existe néanmoins une ombre au tableau, car les sigles ayant reçu le label de la CCI connaissent, dans d'autres cadres, des définitions parfois un peu différentes: par exemple, celles du code de commerce américain,51 ou celles des conditions posées par certaines compagnies maritimes pour le fret international dans leurs conditions générales...52

51 UCC-Sales: les "delivery terms" des sections 2-319 à 2-321; et V. sur ces termes J. M. Stockton, p 99 s.

52 Les "liner terms", et V. D. Le Masson et S. Stenay, Les Incoterms, in "La Convention de Vienne sur la vente internationale et les Incoterms", p 41 s.

12 (1996) 26 VUWLR

Des difficultés risquent donc de surgir lorsque les parties n'auront pas dit à quelle norme il faut se reporter pour définir les termes utilisés par elles. Toutefois, ainsi que la Convention de Vienne y invite,53 il sera possible de faire application, pour interpréter la volonté des contractants, des usages du commerce. Et, sur ce fondement, on pourra souvent estimer qu'elles ont entendu se référer aux définitions données aux Incoterms par la Chambre de commerce internationale, puisque l'on tend à considérer qu'elles ont la force d'un usage du commerce international.54

Il faut seulement observer, à cet égard, qu'il convient de distinguer parmi les Incoterms selon qu'ils reflètent des habitudes commerciales d'ores et déjà établies, ce qui est le cas pour les plus connus et les plus courants d'entre eux, ou qu'ils ont été créés pour résoudre des problèmes nouveaux, si bien qu'ils constituent, en réalité, une création de la CCI: les premiers, seuls, devraient se voir attribuer une valeur d'usage.55

d) Articulation avec la Convention de Vienne

Pour le reste, il suffit de signaler que l'articulation des Incoterms avec la Convention de Vienne se fait sans peine.56 La question se pose en ce qui concerne les dispositions que celle-ci consacre au lieu de livraison des marchandises par le vendeur (art 31 et s) et au moment du transfert à l'acheteur de la charge des risques (art 67 et s). Déjà, le fait que la Convention de Vienne présente un caractère supplétif57 supprime, à la racine, tout risque de conflit: l'accord des parties, notamment l'adoption d'un des Incoterms de la CCI, primera toute règle posée par la Convention, qui n'a jamais pour objectif que de trancher les difficultés pouvant survenir en l'absence de volonté exprimée. Comme la pratique montre que ces termes de transport sont très utilisés, il est clair que les règles posées par la 53 Art. 9.

54 V. B. Audit, La vente internationale, n° 82, note 1, qui cite en ce sens les sentences CCI n° 80-3130, J. dr. int. (Clunet ) 1981. 932, obs. Y. Derains, et CCI n° 81-3894, J. dr. int. (Clunet ) 1982. 987, obs. Y. Derains; dans le même sens, Ph. Fouchard, in "La Convention de Vienne sur la vente internationale et les Incoterms", Rapport de synthèse, p 156, n° 16.

55 V. Y. Derains, Transfert des risques de livraison, in "La Convention de Vienne sur la vente internationale et les Incoterms", p 137: l'auteur souligne que les Incoterms de 1953 doivent se voir reconnaître une valeur d'usage "car à l'époque la CCI a procédé à une consolidation d'usages bien établis", mais qu'il n'en va pas de même pour ceux créés plus tard, et notamment en 1980, leur but n'étant que de "normaliser une pratique désorientée"; V. Heuzé, La vente internationale, n° 256, qui souligne l'intérêt d'une référence expresse aux Incoterms de la CCI.

56 La version de 1990 fait référence au nouveau droit de la vente internationale, établi par la Convention de Vienne de 1980, par exemple en ce qui concerne l'emballage des marchandises dont il est prévu par ce texte qu'il incombe au vendeur de l'assurer (art. 35), obligation que l'introduction aux Incoterms déclare tributaire de la connaissance que le vendeur peut avoir de ce que seront les conditions de transport, introduction à la brochure ICC-CCI n° 460, précitée, point 9.

57 Art. 6 de la Convention.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 13

Convention en ce qui concerne la livraison et de charge des risques seront souvent précisées, si ce n'est remplacées, par la volonté expresse des parties.58

De surcroît, les solutions admises par la Convention de Vienne, pour suppléer le silence des parties, sont en harmonie avec les Incoterms, et la manière dont ils sont utilisés: ainsi, pour une vente impliquant un transport, l'art 31-a retient le principe que la livraison se fait par la remise au premier transporteur pour transmission à l'acheteur, et l'art 67-1 décide que c'est lors de cette remise que s'opère le transfert des risques, ce qui correspond à la philosophie de la vente FOB, la plus usitée en pratique.59 Lorsque, à l'inverse, la vente n'implique par un transport, c'est au lieu où le vendeur a son établissement qu'il doit mettre les marchandises à la disposition de l'acheteur, aux termes de l'art 31-c, et c'est au moment où ce dernier vient les retirer que les risques passent à sa charge, selon l'art 69-1: or, la solution correspond à celle de la vente Ex Works. De manière générale, d'ailleurs, il y a comme une affinité de logique entre la Convention de Vienne et le système des Incoterms qui, l'une et l'autre, lient le transfert de risques à la remise de la chose, par le vendeur, à un transporteur ou à l'acquéreur.60

3 Vente et paiement: les règles et usances uniformes pour le crédit documentaire

a) Délivrance, paiement et crédit

Outre celui qui existe entre vente et transport, et que permettent d'assurer les Incoterms, il est un autre lien, non moins important, dont il faut tenir compte: le lien entre vente, garantie de paiement et mobilisation de créance. Il est assuré par le biais de ce qu'on appelle le "crédit documentaire".61

58 A moins que ce ne soit par l'effet de l'application d'usages particuliers, et V. en ce sens, B. Audit, La vente

internationale, n° 87 et 88.

59 L'art. 32-2 et 3, de la Convention envisage, par ailleurs, que le vendeur soit tenu par le contrat de prendre des dispositions pour le transport, et même qu'il puisse devoir contracter une assurance, ce qui correspond aux ventes CFR, ou CIF.

60 L'art. 31, al. 1er, de la Convention prévoit aussi le cas où les parties ont entendu que la livraison par le vendeur se ferait en un "lieu particulier", ce qui sera souvent le lieu de destination, c'est à dire chez l'acquéreur, et l'art. 69-2 dispose que le transfert des risques s'opère alors par la mise à disposition en ce lieu : ces solutions relèvent de la philosophie des ventes "à l'arrivée", par exemple DDU ou DDP.

61 V. Crédits documentaires, Règles et usances uniformes, CCI n° 400, 1984, révision de 1983, français; et le manuel explicatif, UCP 1974-1983 Revisions compared and explained, Documentary credits, ICC 1984; J. Stoufflet, Rep. com. Dalloz, V° Crédit documentaire, 1989; X. Tandeau de Marsac, Le paiement et ses garanties, in Les ventes internationales, 1981, précité, p 391 et s; J.-L. Rives-Lange, Les engagements abstraits pris par le banquier, Banque 1985, p 902 s; P. Jasinski, Les nouveaux Incoterms et le crédit documentaire, Banque, oct. 1990, p 917 s; J.-L. Rives-Lange et M. Contamine-Raynaud, n° 636 s; J. Hamel, G. Lagarde et A. Jauffret, T. 2, 1966, n° 1815 s.

14 (1996) 26 VUWLR

Les exigences pratiques auxquelles répond le crédit documentaire, et qu'explique l'éloignement où se trouvent les parties, peuvent être résumées ainsi: le vendeur souhaite, en principe, avoir toute sécurité quant au règlement du prix par l'acheteur avant de se dessaisir de la marchandise, car les aléas sont nombreux dans le commerce international et les risques d'impayés non négligeables; par ailleurs, il désire souvent pouvoir mobiliser la créance représentant prix, au cas où il a dû consentir des délais de paiement, ce qui n'est pas rare; quant à l'acheteur, il hésite à procéder au paiement avant d'avoir pu vérifier que la marchandise est conforme à la commande, et qu'elle va lui être livrée. Pour trouver une solution, on recourt au crédit documentaire, et c'est dans le contrat de vente que les parties prennent les dispositions nécessaires à cet effet.

Le mécanisme tend à assurer un équilibre entre les intérêts du vendeur, exportateur, auquel il importe d'être payé dès l'embarquement de la marchandise et d'être ainsi protégé contre une insolvabilité ultérieure de son cocontractant, ou contre tous autres aléas, et ceux de l'acheteur, importateur, qui ne souhaite pas règler le prix sans être sûr que son fournisseur a fait le nécessaire pour lui procurer la marchandise convenue et l'acheminer à destination. Afin de satisfaire ces exigences divergentes, on a pris l'habitude de passer par l'intermédiaire d'une ou plusieurs banques pouvant avancer les fonds, et d'utiliser, pour contrôler le bon déroulement des opérations d'exécution, divers documents attestant que la marchandise est en cours de transport.62 D'où le nom de crédit "documentaire", adopté par la pratique. L'idée est qu'une banque doit pouvoir effectuer le paiement, pour le compte de l'acheteur et au profit du vendeur, dès lors que ce dernier lui remet les documents énumérés à cet effet au contrat de vente, parmi lesquels figurent un document de transport, qui est généralement un connaissement,63 une facture commerciale, éventuellement une police d'assurance.64

62 La pratique s'est développée entre les deux guerres à l'instigation des exportateurs américains soucieux

d'obtenir des garanties des importateurs européens, en raison des doutes qu'ils avaient sur leur solvabilité, V. J. Hamel, G. Lagarde et A. Jauffret, n° 1818.

63 Le transport, en l'occurrence, est le contrat par lequel un transporteur s'oblige, à la demande du vendeur, à acheminer la marchandise à un point de destination particulier, où viendra en prendre livraison l'acheteur, et lors de l'embarquement le transporteur délivre un titre à l'expéditeur, que ce dernier transmet au destinataire afin qu'il puisse prendre possession des marchandises à l'arrivée; un tel document de transport est indispensable au fonctionnement du crédit documentaire, mais ce n'est pas nécessairement un titre représentatif des marchandises, comme est le connaissement: ce peut être un simple bon d'enlèvement, ou autre reçu, délivré par le transporteur, et V. J. Stoufflet, Rép. com. Dalloz, V° Crédit documentaire, n° 15 s.

Le connaissement est prévu en droit interne par l'art. 92, al. 2, c. com., dans le cadre des dispositions sur le gage, où est visée sa fonction de titre représentatif de la marchandise, d'où découle la possibilité de la revendre en cours de transport.

64 V. les RUU, art. 22 à 42, "D. Documents"; adde, J. Hamel, G. Lagarde et A. Jauffret, n° 1815.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 15

On conçoit ainsi que le crédit documentaire n'aura généralement lieu d'être utilisé que pour les ventes "au départ", par exemple FOB ou CIF, puisque dans une vente "à l'arrivée" le fournisseur, supportant les risques du transport, ne devrait pas pouvoir prétendre être payé aussitôt qu'il se dessaisit des marchandises, mais seulement une fois l'acheteur entré en leur possession.65

Là encore, le travail d'harmonisation souhaitable a été réalisé grâce à la Chambre de commerce internationale, à laquelle on doit la mise au point, dès 1933, d'une première version des "Règles et usances uniformes relatives au crédit documentaire".66 Cet ensemble de règles a fait l'objet d'une décision de la CNUDCI, du 6 juillet 1984, laquelle déclare que "les règles et usances uniformes relatives aux crédits documentaires constituent une précieuse contribution à la facilitation des échanges internationaux", et qu'elle en "recommande l'emploi... pour les transactions donnant lieu à l'établissement d'un crédit documentaire". Leur application dans une situation donnée résulte de la référence que les parties on faite à ces règles, mais il est envisageable, comme pour les Incoterms, qu'une valeur d'usage du commerce international doive leur être reconnue.67

b) Crédit irrévocable et confirmé

Le schéma le plus simple et le plus efficace est celui d'une relation à quatre personnages, et d'un crédit irrévocable et confirmé.68

Les quatre intervenants, et leurs rôles, sont: 1) l'acheteur, ou donneur d'ordre pour le crédit à consentir parce que c'est sur ses instructions que sa banque doit règler le prix, et l'ordre ainsi donné peut être irrévocable; 2) la banque "apéritrice", celle de l'acheteur, qui s'engage directement envers le vendeur en ouvrant le crédit par l'effet d'une lettre accréditive - simple lettre au demeurant - reflétant son accord avec l'acheteur, et prévoyant les documents à produire pour bénéficier du crédit, une durée du crédit et une échéance pour le paiement; 3) la banque "notificatrice", celle du vendeur, qui a mandat de transmettre la lettre accréditive et de réaliser le crédit pour le compte de la banque de l'acheteur, et qui peut au surplus confirmer ce crédit et s'engager ainsi elle-même; 4) le 65 V. en ce sens P. Jasinski, Les nouveaux Incoterms et le crédit documentaire, Banque, oct. 1990, p 917 s; et sur les

ventes "au départ", et "à l'arrivée", V. supra, I, 2, (a), les Incoterms.

66 Volontiers désignées par le sigle RUU, versions successives : 1951, 1962, 1974 et 1983, cette dernière version étant en vigueur depuis le 1er octobre 1984.

67 V. en ce sens, M. Vasseur, note sous Com. 14 octobre 1981, D. 1982. 301, qui évoque aussi Trib. com. 8 mars 1976, Rev. jur. com. 1977. 72, note Le Guidec: l'arrêt de la Cour suprême, statuant à propos d'un crédit documentaire irrévocable, citait en visa, à côté de l'art. 1134 c. civ., l'art. 3 des "Règles et usances uniformes".

Et, sur cette même question à propos des Incoterms, V. supra, II, 2, (c).

68 V. notamment, J.-L. Rives-Lange et M. Contamine-Raynaud, n° 710 s.

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vendeur, ou bénéficiaire, qui est en cas de crédit irrévocable et confirmé créancier de deux engagements bancaires.

Dans l'application pratique, lorsque les obligations de livraison du vendeur sont remplies, ce dernier produit les documents convenus à son banquier, qui en opère la vérification sur le plan formel, et doit s'exécuter sans avoir la possibilité de s'y refuser pour des raisons tirées du contrat de vente,69 pas plus que pour des motifs liées aux rapports avec le donneur d'ordre. Une fois assuré de l'apparente conformité des documents, le banquier applique les termes de la lettre accréditive,70 et selon ce qu'elle dispose, assure par exemple au vendeur le paiement immédiat prévu, ou escompte une lettre de change - appelée alors "traite documentaire" - portant le terme convenu.

Une moindre sécurité est apportée par le crédit irrévocable non confirmé, où le fournisseur n'est créancier d'un engagement que du banquier de l'acheteur, engagement que la banque notificatrice a pour mandat d'exécuter. Elle est encore plus limitée dans le cas d'un crédit révocable, puisque l'acheteur et sa banque peuvent y mettre fin à tout moment. Les règles et usances uniformes prévoient qu'à défaut de précision un crédit doit être considéré comme révocable (art 7).

On le constate ne serait-ce que par ce dernier point, il incombe aux parties à la vente de définir avec précision, dans les clauses du contrat, les dispositions qu'elles souhaitent prendre pour organiser le crédit documentaire convenu: outre le caractère irrévocable ou non du crédit, qui est un aspect essentiel, il faudra qu'elles énumèrent les documents à remettre, l'échéance du paiement... Ensuite, il faut que dans les rapports entre l'acheteur et son banquier ces termes soient repris, afin que puissent être respectées les conditions négociées avec fournisseur, et que ce dernier devra retrouver dans les conditions du crédit consenti. Ce dernier point est important puisque, dans les faits, c'est le fournisseur qui aura posé le crédit documentaire comme une condition de la vente, et donc d'une opération dans laquelle il a voulu ne pas en charge les risques du transport, et désiré pouvoir être assuré du paiement dès l'embarquement des marchandises.

69 V. les RUU, art. 3: "Les crédits sont par leur nature des transactions distinctes des ventes ou autres contrats qui

peuvent en former la base", et art. 4; l'explication de cette inopposabilité des exceptions est que la solution contraire, ouvrant la porte à toutes sortes de discussion émanant de l'acheteur, nuirait à l'efficacité du procédé; en droit français, on recourt à la notion de délégation pour fonder cette inopposabilité, V. J. Hamel, G. Lagarde et A. Jauffret, n° 1823; J.-L. Rives-Lange et M. Contamine-Raynaud, n° 718.

70 V. Com. 14 octobre 1981, précité, D. 1982. 301, note M. Vasseur.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 17

II La mise en place d'un droit substantiel de la vente internationale de marchandises

L'adoption de la Convention de Vienne de 1980 sur la vente internationale de marchandises marque l'aboutissement d'une volonté qui s'est manifestée, tout au long du XXème siècle, de doter ce contrat d'une réglementation uniforme, largement acceptée dans le monde, volonté qui s'est exprimée dans une série de projets et réalisations successifs.

Les travaux d'Unidroit et de la Conférence de La Haye (A), puis ceux de la CNUDCI qui ont abouti à la Convention de Vienne (B), constituent autant d'étapes dans cette quête d'unité.

A Le projet d'Unidroit et les Conventions de La Haye

1 Cent fois sur le métier...

De longue date, des initiatives ont été prises afin de promouvoir une législation uniforme de la vente internationale.71 Entre les deux grandes guerres, un organisme créé à l'instigation du gouvernement italien, l'Institut international de Rome pour l'unification du droit privé, appelé "Unidroit", s'est attelé à cette tâche: en 1935, était établi un projet de texte réglementant la vente de marchandises à transporter.72 Transmis à la Société des Nations pour être soumis aux gouvernements susceptibles d'approuver une loi internationale en la matière, il reçut rapidement des réponses positives.73

A l'issue de la seconde guerre mondiale, ce travail a été repris dans le cadre de la Conférence de La Haye, et donc sous l'égide du gouvernement néerlandais, qui en assurait le secrétariat.74 On décida, par compromis, de scinder en deux aspects les questions à traiter, si bien que ce sont deux conventions, portant lois uniformes, qui furent adoptées en matière de vente, par la conférence internationale réunie à La Haye 1964, et ouvertes à la 71 Et V. M. Borysewicz, Conventions et projets de conventions sur la vente internationale de marchandises, in "Les

ventes internationales de marchandises", 1981, p 16 et s.

72 Dans les études de droit civil dédiées à la mémoire de Henri Capitant, publiées en 1938, plusieurs articles étaient consacrés aux efforts d'unification du droit de la vente: A. Bagge, Quelques réflexions à propos du transfert des risques dans le projet de loi internationale sur la vente, présenté par l'Institut de Rome pour l'unification du droit privé, p 45 s; P. Chauveau, Un projet de loi internationale sur la vente, p 135 s; H. C. Gutteridge, L'unification du droit de la vente, p 259 s; J. Hamel, Les efforts pour l'unification du droit privé en matière de vente: méthodes et résultats, p 301 s.

73 Une vingtaine en 1937, V. J. Hamel, Les efforts pour l'unification du droit privé en matière de vente, Etudes Capitant, 1938, précitées, p 303: l'auteur souligne que l'Angleterre, toutefois, avait repoussé l'idée d'adhérer à une telle législation uniforme.

74 V. Rev. crit. dr. inter. priv. 1956. 746; G. Ripert et J. Boulanger, n° 1568; les travaux de la conférence ont permis d'aboutir, tout d'abord, à une unification des règles de conflit, la Convention de La Haye du 15 juin 1955, portant sur la loi applicable aux ventes internationales d'objet mobiliers, et V. infra, III..

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signature la même année: l'une portait sur la formation du contrat, et l'autre - la plus importante en fait - intitulée convention sur la vente internationale d'objets mobiliers corporels (et volontiers désignée par le sigle LUVI) traitait des effets du contrat.75

Comme traits marquants de la Convention sur la formation du contrat et de la LUVI, on peut souligner les points suivants: 1) le caractère supplétif des règles posées, 2) l'absence de forme exigée pour le contrat, 3) l'irrévocabilité de l'offre stipulant un délai, 4) l'acceptation du contrat par un acte d'exécution de la commande, 5) la formation de la vente par une acceptation non conforme au cas où l'offrant ne proteste pas et si les modifications ne sont pas substantielles, 6) le transfert des risques à compter de la délivrance, 7) la réalisation de la délivrance par la remise au transporteur lorsque la vente comprend un transport, 8) l'obligation de conformité pesant sur le vendeur et à laquelle il manque si la chose ne possède pas les qualités et particularités prévues, 9) l'obligation de retirer la chose mise à la charge de l'acheteur, 10) les sanctions aménagées en fonction de l'idée de contravention essentielle ou non, 11) la possibilité pour une partie de déclarer unilatéralement le contrat résolu en cas de contravention essentielle...76

Ces idées et solutions, pour une part originales, se retrouvent dans la Convention de Vienne de 1980.

2 Les raisons d'un échec

Les textes adoptés en 1964, pourtant, n'ont pas connu le succès qu'on pouvait escompter. Ils ne furent pas ratifiés par des pays importants comme les Etats-Unis. Et la France, également, devait se refuser à le faire. A la LUVI, on a reproché, notamment, sa trop grande complexité et le fait ne n'avoir pas suffisamment pris en compte le point de vue de l'ensemble des pays concernés. En particulier, dans cette oeuvre rédigée sur le modèle des systèmes d'Europe continentale, on a dénoncé le fait que le particularisme de systèmes juridiques anglo-américains ne trouvaient pas d'écho.77 On lui fit grief, aussi, de présenter un caractère trop théorique et la doctrine américaine s'est montrée fort sévère à son encontre, allant jusqu'à prétendre que le texte ne pourrait pas s'adapter à l'évolution des échanges internationaux.78

75 Sur ces deux textes, leur genèse et les raisons de leur insuccès, V. Ph. Kahn, J.-Cl. Dr. int., Fasc. 565-A-5, n° 3 s;

M. Alter, n° 62 s; J.-C. Boulay, n° 24.

76 Et V. Ph. Kahn, La convention de La Haye du 1er juillet 1964 portant loi uniforme sur la vente internationale des objets mobiliers corporels, Rev. trim. dr. com. 1964. 689; G. Ripert et R. Roblot, Traité de droit commercial, 1970, n° 2548.

77 V. E. Bergsten, Le rôle de la convention des Nations-Unies, in "Le nouveau droit de la vente internationale", 1987, p 1247.

78 V. A. Farnsworth, "Unification of sales law at the regional and international level, Why they behave like americans?", in Aspects of comparative commercial law, Université McGill 1969, P. 110 et s.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 19

A dire vrai, dès le début de la conférence internationale de 1964, les Etats-Unis s'étaient prononcés contre le projet, ce qui a lourdement pesé sur le sort du texte. André Tunc raconte les choses en ces termes: "il s'était produit en 1963 quelque chose d'important: c'est que les Etats-Unis entraient à Unidroit. Cela faisait longtemps que certains de leurs juristes leur demandaient de s'intéresser à ce travail d'unification du droit, mais il a fallu attendre le dernier moment pour qu'ils le fassent. Ils ont tout de suite demandé que l'on suspende la tenue de la conférence de La Haye... Bien sûr, leur absence jusque là était fâcheuse. La requête a pourtant été rejetée par le gouvernement néerlandais. Je ne suis pour rien dans la décision... Mais je l'approuvais entièrement. La Conférence devait se réunir au mois d'avril, toutes les convocations avaient été adressées, le texte avait connu plusieurs versions successives qu'on communiquait chaque fois aux gouvernements. Il serait devenu un serpent de mer si l'on avait repris le travail... Mais, bien sûr, le travail de la Conférence diplomatique qui allait se réunir était faussé dès le départ".79

Il faut rappeler que les Etats-Unis, à l'époque, travaillaient, chez eux, à la rédaction d'un Code de commerce uniforme dont l'article 2, consacré à la vente, devait être une des pièces maîtresses, et ils ne s'étaient sans doute pas sentis prêts à participer à une réflexion internationale sur le sujet avant 1952, date où le première état de sa rédaction a été arrêté, ou même avant 1962 qui est l'année où l'Etat de New York l'a finalement adopté, constituant alors le quinzième Etat américain à le faire.80

Quant à la France, elle n'a pas manifesté on plus un grand enthousiasme pour les résultats obtenus alors même qu'elle avait joué un rôle majeur dans les travaux, notamment par la présence du Doyen Hamel et le rôle de secrétaire tenu par André Tunc. Ce dernier raconte que "le garde des sceaux a été immédiatement hostile à ce texte", reprochant aux juristes français d'avoir "tout abandonné aux Anglo-Saxons".81 Il paraît qu'il fallut développer toute "une action diplomatique pour que... la France signe la convention à la dernière minute".82

79 Et d'ajouter, à propos de "l'attitude de la délégation américaine", lors de la conférence: "Tout de suite elle a fait

savoir qu'il n'était pas question pour elle de ratifier le texte de La Haye quand il serait voté", A. Tunc, Conclusions, in "Les ventes internationales de marchandises", 1981, p 410 et s.

80 Aujourd'hui, le code de commerce uniforme américain a été adopté, avec des variantes, par quarante-neuf des cinquante Etats des Etats-Unis, V. J. J. White et R. S. Summers, p 5; adde, sur ce texte, les références données in fine.

81 A. Tunc, Conclusions, in "Les ventes internationales de marchandises", 1981, p 413.

82 A. Tunc, Conclusions, in "Les ventes internationales de marchandises", 1981, p 413.

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B L'institution de la CNUDCI et la Convention de Vienne

1 Le plus large consensus

En 1966 lorsque la CNUDCI a été fondée,83 et en 1968 quand se sont ouverts ses travaux, on pouvait constater le peu d'adhésions aux Conventions de La Haye. Il fut, donc, aussitôt envisagé de reprendre le sujet de la vente internationale, avec l'intention de parvenir à une convention susceptible de rencontrer un large consensus. Un des progrès réalisés devait être de traiter dans un seul texte les questions de formation et d'exécution de la vente, alors qu'elles était dispersées en 1964 dans deux conventions distinctes.

Une Conférence internationale fut convoquée lorsque le projet eut reçu l'approbation de l'Assemblée générale des Nations-Unies: elle allait réunir soixante-deux Etats et huit organisations internationales, à Vienne, du 10 mars au 18 avril 1980, pour en adopter le texte.84 La Convention de Vienne sur la vente internationale de marchandises, parfois désignée sous le sigle CVIM, est entrée en vigueur le 1er janvier 1988, dans les délais prévus, après avoir été l'objet de sa dixième ratification. La France l'avait, quant à elle, ratifiée dès 1982, sans avoir eu à dénoncer son adhésion aux Conventions de La Haye qu'elle n'avait jamais adoptées.85

Depuis cette ratification, et l'entrée en application de la Convention, il existe désormais, en droit français, deux régimes juridiques pour la vente de marchandises: d'un côté, les règles du Code civil et du droit commercial applicables aux ventes internes, et, de l'autre, le régime de la Convention qui a vocation à couvrir les ventes ayant une dimension 83 La CNUDCI, Commission des Nations-Unies pour le Droit Commercial International (en anglais UNCITRAL), a

été créée par l'Assemblée générale de l'ONU en 1966 et répond au souci, figurant dans la Charte de l'Organisation, d'améliorer le fonctionnement du commerce international par la codification du droit: trente-six Etats, représentatifs des différentes tendances juridiques dans le monde, et diverses institutions, participent à ses travaux, et V. Y. Daudet et L. Dubouis, J.-Cl. dr. int., Fasc. 13-3, La coutume, codification, 1991, n° 27 s (qui rappellent que la création de la CNUDCI répond à la nécessité de disposer de "lois bien conçues et modernes propres à assurer l'égalité dans les échanges commerciaux internationaux", résolution de l'Assemblée générale de Nations-Unies, 17 décembre 1966); Z. Haquani, J.-Cl. dr. int., Fasc. 131, Organismes internationaux en matière de production, de commerce et de développement, 1992, n° 34 s; adde, B. Goldman, Les travaux de la CNUDCI, J. dr. int. (Clunet) 1979 753.

84 Parallèlement avait été adopté, puis devait être modifié en fonction des termes de la Convention de Vienne, un texte sur la prescription en matière de vente internationale de marchandises, la Convention de New-York de 1974, V. B. Audit, La vente internationale, précité, n° I, A, 1, (a).

85 Loi du 18 juillet 1982; le texte a été publié au JO du 27 décembre 1987, p 15241, D. 1988. L. 30; et V. R. Houin et M. Pédamon, n° 563.

Pour être à même de ratifier la Convention de Vienne, il faut pour les Etats qui ont adopté les Conventions de La Haye de 1964, ou l'une d'entre elles, dénoncer préalablement cette adhésion, art. 99-3 de la Convention de Vienne.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 21

internationale.86 Par opposition avec le droit interne, la réglementation de la vente résultant de la Convention tend à répondre, avec un certain pragmatisme, aux besoins du commerce international.

Il faut seulement prendre garde ce que ce nouveau droit de la vente internationale a une portée qui reste limitée, car il règle pas toutes les questions que les relations entre les parties peuvent poser, et notamment celles touchant à la validité du contrat et au transfert de propriété.87 Aussi bien, alors même que la Convention de Vienne doit s'appliquer, le droit interne, désigné par les règles de conflits de lois, a vocation à relayer le droit uniforme.88

2 Esprit et organisation la Convention

Si, dans la terminologie, pour montrer le passage du dogmatisme de 1964 au réalisme qui devait s'imposer, on a remplacé les termes "objets mobiliers corporels" par celui de "marchandises et troqué le mot "délivrance" pour celui de "livraison",89 il est clair que sur le fond il y a de très nombreux points communs entre la Convention de Vienne, d'une part, la LUVI et la loi uniforme sur la formation du contrat de vente, adoptées à La Haye, d'autre part. Il faut dire que les lois adoptées en 1964 ont servi de base à partir de quoi les experts de la CNUDCI ont travaillé, de manière à pouvoir aboutir dans un délai convenable.

Il n'en demeure pas moins que le texte de 1980 est plus clair et mieux organisé que ceux de 1964, et, quant à la méthode, il n'est pas niable que le processus d'élaboration et d'adoption de la Convention de Vienne a permis à celle-ci de rassembler des énergies venant d'horizons les plus divers et, donc, de démontrer son éclectisme, ce qui a grandement favorisé l'engouement pour le texte nouveau. La liste des onze premiers Etats l'ayant ratifié l'illustre bien: elle compte l'Argentine, la Chine, l'Egypte, les Etats-Unis, la France, la Hongrie, l'Italie, le Lesotho, la Syrie, la Yougoslavie, la Zambie, qui sont représentatifs aussi bien des pays développés que des pays en voie de développement, des pays d'économie libérale que d'économie dirigée, des pays de Common Law que des pays 86 V. B. Audit, La vente internationale, n° 15, qui montre l'intérêt accru que cela donne à la définition de la vente

internationale; Cl. Witz, L'exclusion de la Convention des Nations-Unies sur les contrats de vente internationale de marchandises par la volonté des parties, D. 1990. Chron. 107, in limine.

87 Art. 4 de la Convention.

88 V. sur ce point, III.

89 V. M. Borysewicz, Conventions et projets de convention sur la vente internationale de marchandises, in "La vente internationale de marchandises", 1981, p 46 s.

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de tradition romano-germanique, et qui se trouvent répartis sur tous les continents.90 Aujourd'hui, la Convention compte plus d'une trentaine d'adhérents.91

Quant à ses modalités de ratification, la Convention de Vienne reste marquée par l'héritage des textes de La Haye. Il est, en effet, prévu qu'un pays peut n'adhérer à la Convention qu'en partie, en limitant son adoption à l'un des deux aspects que sont la formation et les effets du contrat. Plus précisément, la ratification par un Etat porte toujours, et nécessairement, d'une part, sur la première partie du texte (champ d'application et dispositions générales) et sur la quatrième partie (dispositions finales), et, d'autre part, sur l'une ou l'autre - ou l'une et l'autre - des deuxième (formation du contrat) et troisième parties (effets du contrat), l'art 92 de la Convention prévoyant qu'il est possible de ne pas adopter soit la deuxième, soit la troisième.92 Historiquement, cette possibilité de choix est ce qui subsiste de la dualité d'approche admise à La Haye en 1964 et l'on voit, par là, se confirmer la difficulté de réunir en un seul instrument l'ensemble des dispositions relatives à la vente. On a pu regretter la possibilité d'une telle ratification partielle et souligner que cela risquerait de "porter atteinte à l'uniformisation souhaitable des règles" en cause.93

Pour le reste, il faut souligner que la Convention de Vienne prévoit peu de réserves, ouvertes aux Etats contractants.94 Une première autorise un pays à déclarer qu'il n'entend appliquer le texte que dans les rapports avec un autre Etat ayant adhéré à la Convention (art 95).95 Une deuxième a trait à la forme de la vente internationale: si la Convention pose en principe que le contrat est purement consensuel (art 11), elle admet qu'un Etat puisse 90 V. E. Bergsten, Le rôle de la convention des Nations-Unies, in "Le nouveau droit de la vente internationale",

1987, p 1248.

91 V. V. Heuzé, La vente internationale, p 407, qui en dénombre trente-quatre en 1992: Argentine, Australie, Autriche, Biélorussie, Bulgarie, Canada, Chili, Chine populaire, Danemark, Egypte, Equateur, Espagne, Etats-Unis, Finlande, France, Hongrie, Irak, Italie, Lesotho, Mexique, Norvège, Ouganda, Pays-Bas, RDA, RFA, Roumanie, Suède, Suisse, Syrie, Tchécoslovaquie, Ukraine, URSS, Yougoslavie, Zambie (on note l'absence de la Grande-Bretagne et du Japon).

92 Peu de pays ont choisi de n'adhérer, ainsi, que partiellement à la Convention: à ce jour, le Danemark, la Finlande, la Norvège et la Suède l'on fait, limitant leur adhésion à la partie relative à la formation du contrat, et V. V. Heuzé, La vente internationale, p 407.

93 I. Fadlallah, Rev. int. dr. comp. 1987. 292, présentation de l'ouvrage de l'Institut suisse de droit comparé sur la convention de Vienne, précité.

94 Elles figurent aux art. 95 s, et l'art. 98 prévoit qu'aucune autre réserve n'est autorisée; à cela s'ajoute néanmoins, comme une sorte de réserve implicite, la liberté que donne l'art. 28 de la Convention en laissant latitude aux juges saisi d'une difficulté d'exécution de la vente de ne pas ordonner l'exécution en nature, s'il ne le ferait pas en vertu de son propre droit, et V. sur ce point infra, §3, Exécution en nature.

95 Ce texte permet de déroger à l'art. 1-1, b.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 23

imposer à ses ressortissants de le passer selon une forme particulière (art 12 et 96).96 Et la troisième permet à des Etats contractants, s'ils en font la déclaration préalable, de décider d'appliquer dans leurs rapports réciproques des règles particulières, différentes de celles de la Convention (art 94).97

3 Comparaison avec le droit français interne

Il est intéressant de rechercher ce qui fait le particularisme du régime de la vente internationale, issu de la Convention de Vienne, par rapport au droit français applicable à la vente interne. Certes, à bien des points de vue, les solutions retenues ici et là sont voisines, voire identiques. Mais les différences, où même les divergences, n'en sont pas moins réelles.98

On peut chercher à les dénombrer. Les plus notables tiennent à la présence de dispositions d'inspiration anglo-américaine: aux termes de la Convention, la formation du contrat peut être admise, parfois, malgré le défaut de concordance entre l'offre et l'acceptation (art 19);99 l'efficacité du contrat semble reconnue quand bien même le prix des marchandises est indéterminé (art 55);100 le vendeur qui a mal exécuté ses obligations dispose du droit d'y "porter remède", même après l'échéance (art 48);101 le contractant victime d'une mauvaise exécution doit faire son possible pour limiter l'ampleur du dommage (art 77)...102 On voit intervenir aussi l'idée très pragmatique, reprise de la "detrimental reliance" de la Common Law,103 consistant à faire produire effet à une situation 96 Les art. 12 et 96 de la Convention permettent à un Etat contractant de déroger aux art. 11 et 29 lorsque sa

législation exige que les contrats soient conclus par écrit, et V. B. Audit, La vente internationale, n° 75, qui explique cette possibilité de réserve par le fait que certains pays, à économie dirigée ou planifiée, exigent une forme pour la vente internationale: ont utilisé cette réserve, l'Argentine, la Biélorussie, la Bulgarie, le Chili, la Hongrie et l'Ukraine, V. V. Heuzé, La vente internationale, p 407.

97 Le Danemark, la Finlande, la Norvège et la Suède l'on fait, dans leurs relations respectives, et V. V. Heuzé, La vente internationale, p 407.

98 Et V. Mouly, Que change la Convention de Vienne sur la vente internationale par rapport au droit français interne?, D. 1991. Chron. 78.

99 Cette question est désignée dans la doctrine américaine par la formule de "battle of the forms".

100 Sur ce point, toutefois, il y a une ambiguïté dans la convention, étant donné que l'art. 14 semble imposer le contraire.

101 C'est le "seller's right to cure" du code de commerce uniforme américain.

102 C'est le "duty to mitigate" du droit commun des contrats anglo-américain.

103 La théorie de la "detrimental reliance, ou "promissory estoppel", est une source d'obligations complémentaire de celle que constitue le contrat: selon ce principe, une obligation naît au profit de toute personne ayant agi à son "détriment", parce qu'elle a fait "confiance" à un état de choses, le débiteur de l'obligation étant la personne qui a fait se développer ce sentiment de confiance, et laissé faire les choses; et V. T. Galligan, Le droit des contrats, in Droit des Etats-Unis, n° 132.

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de fait, à l'encontre de celui qui l'a créée, lorsqu'une autre personne s'est fondée sur la confiance inspirée par cette situation: on l'observe en ce qui concerne l'offre de contracter, s'agissant de la rendre irrévocable (art 16),104 et à propos de la modification du contrat (art 29).105

Mais bien des différence dénotent, simplement, le souci de retenir des solution adaptées aux besoins du commerce: ainsi, dans la Convention, les raisons que l'acheteur peut avoir de critiquer la marchandise livrée relèvent d'une seule et même notion, le défaut de conformité (art 35), à laquelle s'applique un régime unique marqué par le délai deux ans, à compter de la remise de la chose, pendant lequel l'acheteur est en droit de le dénoncer (art 39); et d'autres solutions comme l'impossibilité pour un juge d'octroyer un délai de grâce (art 45 et 61), ou encore le droit pour l'acheteur de procéder un achat de remplacement et celui pour le vendeur de procéder à une vente compensatoire (art 75 et 76), s'inspirent de la même philosophie.

De manière générale, une des constantes de la Convention est son pragmatisme. Il se manifeste, en particulier, dans le souci de donner effet au contrat, voire de le sauver, autant que faire se peut: que se soit au moment de sa conclusion (défaut de concordance entre l'acceptation et l'offre, art 19, précité), ou lors de son exécution (obligation de donner un délai avant de procéder à la résolution, art 49 et 64; droit de "porter remède" accordé au vendeur, art 48, précité). Et surtout, toujours dans cette optique pragmatique, la Convention de Vienne cherche à éviter que les contractants ne doivent s'en remettre à la justice pour trancher leurs différends, obtenir satisfaction, ou trouver une issue. D'où les voies de droit unilatérales, ouvertes à l'une ou l'autre des parties, comme la possibilité qui leur est offerte dans certaines circonstances prononcer la résolution du contrat: que ce soit l'acheteur insatisfait (art 49),106 ou le vendeur impayé (art 64). Or, cela va directement à l'encontre de la volonté du Code civil de soumettre le contrat, son exécution et son dénouement, au contrôle du juge, afin d'éviter l'abus de puissance d'une partie sur l'autre, ou les décisions individuelles trop rapidement prises (art 1184). Mais il est vrai qu'en matière d'échanges internationaux le recours à la justice est beaucoup plus pesant encore que dans l'ordre interne.

104 Elle devient irrévocable s'il était raisonnable de la considérer telle et que son destinataire a agi en conséquence.

105 L'exigence d'un écrit pour toute modification du contrat peut être levée si une partie s'est fondée sur le comportement de l'autre, et V. Ch. Mouly, Que change la Convention de Vienne sur la vente internationale par rapport au droit français interne?, D. 1991. Chron. 78.

106 L'acheteur peut déclarer le contrat résolu par suite de l'inexécution d'une des ses obligations par le vendeur, pour autant qu'elle constitue une contravention essentielle au contrat; il peut également prendre, de lui-même, une mesure de dédommagement, par exemple procéder à une réfaction du prix, art. 50.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 25

III Les conflits de lois en matière de vente internationale de marchandises

A Rôle des règles de conflit

Malgré l'uniformisation du droit substantiel de la vente internationale réalisée par la Convention de Vienne de 1980, un rôle important reste dévolu aux règles de conflit de lois.107 Et cela, de deux manières:

D'une part, en effet, la Convention prévoit elle-même qu'à titre complémentaire, elle est applicable à un contrat de vente internationale, quand bien même les parties n'ont pas leur établissement dans des Etats contractants, à partir du moment où les règles de droit international privé désignent comme compétent le droit national d'un Etat ayant adopté cette Convention.108 Les règles de conflit ramènent alors au droit uniforme de la vente internationale.

D'autre part, il faut rechercher le droit national applicable au contrat, et s'appuyer à cet effet sur les règles de conflit, soit lorsque se posent des questions qui ne sont pas traitées par la Convention, notamment celles de la validité du contrat et du transfert de propriété,109 soit tout simplement parce que la Convention de Vienne n'est pas applicable faute, notamment, pour les Etats où les parties ont leur établissement d'avoir ratifié ce texte.110

Force est donc, dans ces derniers cas, d'en revenir au droit international privé classique. D'où l'intérêt de se demander si l'effort d'unification du droit de la vente internationale s'est manifesté sur ce terrain également.

107 Même lorsque la Convention de Vienne est applicable, et qu'on se trouve ainsi dans le cadre du droit substantiel

unifié de la vente internationale, il peut demeurer nécessaire de faire jouer les règles de conflit de lois: pour connaître la loi dont dépend l'interprétation, nationale, à donner aux termes de la Convention; de fait, on admet qu'en matière de législation uniforme, et en l'absence d'instance juridictionnelle supra-nationale chargée de l'interpréter, c'est à l'interprétation nationale qu'il faut se référer, et donc à l'interprétation donnée par les juridictions de l'ordre juridique déclarée compétent par le droit international privé, V. en ce sens, l'arrêt Hocke, Com. 4 mars 1963, JCP. 1963. II. 13376, note P. Lescot, J. dr. int. (Clunet) 1964. 806, note B. Goldman, Rev. crit. dr. int. priv. 1964. 235, chron. P. Lagarde, rendu en matière de lettre de change; et V. sur le sujet, notamment, P. Mayer, n° 94 s.

108 Art. 1, b de la Convention.

109 Art. 4 de la Convention de Vienne; la loi désignée par les règles de conflit s'appliquera, de même, aux questions d'encadrement du contrat, par exemple à la répression du refus de vente.

Au demeurant, l'art. 7-2° de la Convention de Vienne renvoie expressément à la loi désignée par les règles du droit international privé lorsque, s'agissant de questions concernant les matières qu'elle régit, on ne trouve pas de réponse dans les règles qu'elle formule, ni dans les principes généraux dont elle s'inspire.

110 Art. 1, a.

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B Convention de La Haye de 1955

L'uniformisation qui existe en la matière est due à la Conférence de La Haye. Avant même d'aboutir à une première unification des règles substantielles de la vente internationale,111 ses travaux avaient permis d'opérer une unification des règles de conflit.

De fait, la Convention de La Haye du 15 juin 1955 sur la loi applicable aux ventes internationales d'objet mobiliers, entrée en vigueur en 1964, a posé des règles communes pour la solution des conflits de lois en la matière.112 La France est un des pays l'ayant ratifiée.113 Comme elle est dotée d'une portée dite "universelle", elle tient lieu de droit international privé pour ceux qui l'ont adoptée, et s'applique donc sans condition de réciprocité et sans tenir compte de ce que la loi désignée est celle d'un Etat qui en fait, ou non, partie. C'est, en France, à ce texte qu'il faut se référer pour connaître les règles de conflit de lois applicables à la vente de marchandises.114 Cette Convention retient comme loi compétente celle que les parties au contrat ont choisie115 et, à défaut, celle du pays où le 111 V. sur ce point supra, II, A.

112 V. G. Ripert et R. Roblot, T. 2, n° 2545-2; Y. Loussouarn et P. Bourel, n° 378; P. Mayer, n° 727; B. Audit, Droit international privé, n° 792; Ph. Kahn, J.-Cl. Dr. int. Fasc. 565-A-5, n° 157 s; V. Heuzé, La vente internationale, n° 16, et 18 s, avec ce texte reproduit p 373 s; adde, J. Thieffry et C. Granier, p 199 s.

L'adoption, dans le cadre de la Communauté européenne, de la Convention de Rome de 1980 sur la loi applicable aux obligations contractuelles n'a pas porté atteinte, en matière de vente de marchandises, au jeu de la Convention de La Haye, pour les pays l'ayant ratifiée: outre le principe specialia generalibus derogant, la Convention de Rome elle-même impose cette solution (art. 21).

113 Cette Convention a été ratifiée par neuf Etats, dont la France (avec la Belgique, le Danemark, la Finlande, l'Italie, le Niger, la Norvège, la Suède et la Suisse), et V. V. Heuzé, La vente internationale, p 373; adde, B. Audit, La vente internationale, n° 1.

114 Et V. Civ. 1ère, 4 octobre 1989, Bull. civ. I, n° 304, JCP. 1989. éd. E. I. 19179, J. dr. int. (Clunet) 1990. 415, note P. Kahn, Rev. crit. dr. int. priv. 1990. 316, note P. Lagarde, sacs de terreau vendus ayant provoqué a perte de plants, loi régissant la validité de clauses exonératoires de responsabilité: le juge doit rechercher la loi applicable au contrat, et en matière de vente appliquer d'office la Convention de La Haye de 1955; Com. 4 juin 1991, Bull. civ. IV, n° 205, articles de maroquinerie, défaut de conformité, cassation de l'arrêt n'ayant pas recherché la loi applicable à la vente.

Selon les tribunaux, la Convention de La Haye n'est pas applicable aux contrats de concession, contrat-cadre distinct des ventes successives espérées entre fournisseur et distributeur, V. Civ. 1ère, 22 juillet 1986, Rev. crit. dr. int. priv. 1988. 57, note H. Batiffol.

En ce qui concerne l'action d'un sous-acquéreur contre un vendeur antérieur d'une chose, qui est considérée en droit français comme étant purement contractuelle, V. Paris 14 juin 1989, D. 1989. IR. 201, qui admet l'application de la Convention de La Haye à une telle hypothèse.

115 La désignation de la loi applicable par les parties doit faire l'objet d'une clause expresse ou résulter indubitablement du contrat, art. 2.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 27

vendeur a sa résidence habituelle au moment où il reçoit la commande, ou celle du pays où l'acheteur a sa résidence habituelle si c'est dans ce pays que la commande a été reçue.116

En pratique, la loi applicable sera donc souvent celle du vendeur et l'on peut y voir un avantage pour lui, car elle est celle qu'il a le plus de facilités à connaître. De son côté, l'acheteur est défavorisé car il est en butte à un droit qui ne lui est pas familier. Ainsi, le droit international privé renverse le principe du Code civil, selon lequel le contrat doit s'interpréter contre le vendeur (art 1602).

En réalité, la Convention de La Haye de 1955 n'a pas connu un grand succès, comme en témoigne le faible nombre d'adhésion qu'elle a reçu. Et, d'ailleurs, une nouvelle Convention, sur la loi applicable à la vente internationale de marchandises, a été adoptée le 22 décembre 1986, qui a vocation à la remplacer.117

C Autres textes. Clauses du contrat

En l'état actuel des choses, il est intéressant de se demander ce qui se passe lorsque se trouve saisi le juge d'un pays qui n'est pas partie à la Convention de 1955. Deux situations sont susceptibles de se présenter. Premièrement, il peut s'agir d'un Etat membre de la Communauté européenne, ayant ratifié la Convention de Rome du 19 juin 1980 sur la loi applicable aux obligations contractuelles, entrée en vigueur en 1991, et qui, sans être spécifique à la vente de marchandises, n'en couvre pas moins ce contrat.118 En fait, les règles posées par ce texte sont assez proches, dans les conséquences à en tirer pour la vente, de celles retenues par la Convention de La Haye, même si le raisonnement et la formulation retenue diffèrent: il se réfère à la loi choisie par les parties,119 à défaut de quoi 116 Plus précisément la loi du pays où l'acheteur a sa résidence habituelle, où dans lequel il possède l'établissement

qui a passé la commande; par ailleurs, le texte précise qu'il s'agit de la loi "interne" du pays en cause, afin d'éviter tout phénomène de "renvoi", art. 3; et V. dans une hypothèse de conflit de qualifications, Civ. 1ère, 18 octobre 1989, Bull. civ. I, n° 322, Rev. crit. dr. int. priv. 1990. 712, note Jacques Foyer, installation de séchage défectueuse, application du droit allemand au contrat, exclusion du droit français pour la responsabilité délictuelle.

117 V. Y. Loussouarn, La Convention de La Haye d'octobre 1985 sur la loi applicable aux contrats de vente de marchandises, Rev. crit. dr. int. priv. 1986. 271; V. Heuzé, La vente internationale, n° 33 s.

Le nouveau texte de La Haye répond au besoin de moderniser le dispositif, d'une part, en le coordonnant avec la Convention de Vienne, et, d'autre part, en prenant en compte des préoccupations nouvelles comme la protection des consommateurs.

A ce jour, toutefois, il n'a guère fait l'objet de ratifications, lui non plus: seule l'Argentine y a adhéré en 1991.

118 Sur l'entrée en vigueur de ce texte, V. H. Gaudemet-Tallon, Rev. trim. dr. eur. 1991. 635; Jacques Foyer, Entrée en vigueur de la Convention de Rome du 19 juin 1980 sur la loi applicable aux obligations contractuelles, J. dr. int. (Clunet) 1991. 601; adde, sur son contenu, P. Lagarde, Le nouveau droit international privé des contrats après l'entrée en vigueur de la Convention de Rome du 19 juin 1980, Rev. crit. dr. int. priv. 1991. 287 (l'auteur était rapporteur officiel de la Convention).

119 Choix exprès, ou résultant de façon certaine des dispositions du contrat, ou des circonstances, art. 1er.

28 (1996) 26 VUWLR

est compétente la loi du pays avec lequel le contrat entretient les liens les plus étroits, une présomption étant posée que ce lien existe avec le pays où la partie qui doit fournir la prestation caractéristique a sa résidence habituelle ou, s'agissant d'un professionnel, son principal établissement.120 Or, en ce qui concerne la vente, c'est la loi du pays du vendeur que cela désigne.

Deuxièmement, le tribunal saisi peut être celui d'un pays qui n'est membre ni de la Convention de La Haye, ni de la Convention de Rome: alors est applicable, de la manière la plus classique, le droit international privé national propre à cet Etat. Tout au plus observera-t-on qu'un grand nombre de pays reconnaissent le principe de la loi d'autonomie, c'est à dire la faculté pour les parties de désigner la loi applicable au contrat qu'elles passent, et qu'en l'absence d'un tel choix ils font appel à des critères objectifs variés.121

Dans une large mesure, en tout cas, les règles de conflit de loi sont ainsi tributaires du juge saisi.122

D'où l'intérêt des clauses déterminant le droit applicable. Et celui qui s'attache à désigner la juridiction compétente, qui peut être un tribunal arbitral. Les parties ont une grande liberté en la matière, même à l'égard de la Convention Vienne. Elles peuvent en écarter l'application, alors même qu'elle serait compétente, et choisir un droit interne à l'exclusion des règles issues de la Convention que ce dernier pourrait contenir.123 Tout à l'inverse, quand bien même la Convention de Vienne serait inapplicable en principe à leur 120 Art. 4-1 et 2; pour les contrats conclus avec des consommateurs, l'art. 5 prévoit que le choix de la loi applicable

dans le contrat ne peut pas, en principe, priver le consommateur de la protection que lui accorde la loi de son pays de résidence.

121 V. V. Heuzé, La vente internationale, n° 11 s.

122 Pour les pays membres de la Communauté économique européenne, la Convention de Bruxelles du 27 septembre 1968 sur la compétence et l'effet des jugements, entrée en vigueur en 1973, a établi un espace judiciaire européen où les règles de conflit de juridiction sont uniformisées: elle pose le principe de la compétence du tribunal du lieu du domicile du défendeur (art. 2), à quoi peut se substituer en matière contractuelle, au choix du demandeur, le tribunal du lieu où l'obligation servant de base à l'action a été, ou doit être, exécutée (art. 5-1°), le tout sous réserve d'une clause attributive de juridiction convenue entre les parties, et dont la Convention admet la validité (art. 17); et V. Y. Loussouarn et P. Bourel, n° 484 s; P. Mayer, n° 339 s.

Un texte distinct, la Convention de Lugano de 1988, étend les principes de la Convention de Bruxelles dans les rapports entre les Etats membres de la Communauté européenne et ceux de l'AELE.

En dehors de ce cadre, sont applicables les règles classiques des conflits de juridiction, qui dépendent du droit du tribunal saisi: elles font une large place à la compétence du tribunal du défendeur.

123 V. notamment C. Witz, L'exclusion de la Convention des Nations-Unies sur la vente internationale de marchandises par la volonté des parties, D. 1990. Chron. 107; Ph. Kahn, Choisir la Convention plutôt que le droit français, in "Le nouveau droit de la vente internationale", 1987, p 1253 s.

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 29

relations, elles ont la faculté de déclarer s'y soumettre, par exemple en choisissant la loi d'un pays qui l'a ratifiée.

Enfin, il faut mentionner l'existence de la Convention de La Haye du 2 octobre 1973, sur la loi applicable à la responsabilité du fait des produits, également ratifiée par la France,124 qui ouvre une option à trois branches en retenant la compétence de la loi de l'Etat de la résidence habituelle de la victime, de celle de l'Etat de l'établissement principal du responsable recherché, et de celle de l'Etat sur le territoire duquel a été acquis le produit.125

Malgré les efforts d'uniformisation, et l'existence d'instruments conventionnels de qualité, le bilan à dresser apparaît finalement assez maigre sur le terrain des conflits de lois, étant donné le peu de ratification que les textes ont jusqu'à ce jour connu.

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125 La Convention, toutefois, vise exclusivement certaines d'hypothèses de responsabilité comme entrant dans son domaine, notamment celle où est recherchée la responsabilité du fabricant ou du fournisseur du produit (art. 3), et se déclare inapplicable en ce qui concerne les rapports - purement contractuels, apparemment - entre la victime et celui dont elle tient la propriété du produit, c'est à dire le contrat de vente au consommateur (art. 1er); par ailleurs, ici encore, c'est la loi "interne" désignée qui est déclarée compétente, de manière à écarter toute idée de "renvoi" par celle-ci à une loi tierce.

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Stauder, Conformité et garanties (droit suisse), p 161, P. A. Foirier, Conformité et garanties (droit belge), p 198, J.

Darby, Le droit des Etats-Unis applicable à la vente internationale d'objets mobiliers corporels, p 223 s, Ph. le

Tourneau, Conformité est garanties (droit français), p 232 s, C. M. Schmittoff, Ventes internationales d'objets

mobiliers corporels (Royaume-Uni), p 290 s, C. Ducouloux-Favard, Conformité et garanties (droit italien), p 298 s, E.

Hondius, Conformité et garanties (droit néerlandais), p 312 s, N. N. Antzki, Les défauts de conformité et les vices

cachés (droit québécois), p 340 s, J. Ghestin, Harmonisation des droits nationaux en matière de conformité et de

garanties, p 369 s, X. Tandeau de Marsac, Le paiement et ses garanties, p 391 s, Conclusions par A. Tunc, p 407 s; "La

Convention Vienne de 1980 sur la vente internationale de marchandises", Institut suisse de droit comparé (colloque

de Lausanne des 19 et 20 novembre 1984), Zurich 1985; C. M. Bianca et M. J. Bonell, Commentary on the international

sales law, Guiffré, Milan 1987, avec la collaboration de J. Barrera Graf, H. T. Bennett, S. K. Date-Bash, G. Eörsi, M.

Evans, E. A. Farnsworth, E. Jayme, W. Khoo, V. Knapp, O. Lando, D. Maskow, B. Nicholas, J. Rajski, K. Sono, D.

Tallon, et M. Will; "Le nouveau droit de la vente internationale", Colloque du 21 octobre 1987, CFCE, Cahiers

juridiques et fiscaux, 1988, avec les présentations de E. E. Bergsten, Le rôle de la Convention des Nations-Unies, p

1245 s, Ph. Kahn, Choisir la Convention plutôt que le droit français, p 1253 s, P. Thieffry, Le choix préalable du droit

applicable, p 1265 s; "La Convention de Vienne sur la vente internationale et les Incoterms", éd. Y. Derains et J.

Ghestin, Actes du colloque du centre de droit des obligations de l'Université de Paris I, 1er et 2 décembre 1989,

L.G.D.J. 1990, présentation par B. Audit, avec les interventions de D. Le Masson et S. Stenay, Les Incoterms, p 37 s,

Ch. Mouly, La formation du contrat, p 57 s, J. Ghestin, Les obligations du vendeur, p 85 s, E. Robine, Difficultés

d'application, p 119 s, Y. Derains, Transfert des risques de livraison, p 129 s, G. Flécheux, Les obligations de

l'acheteur, p 141 s, rapport de synthèse par ph. Fouchard, p 151 s.

Articles: Ph. Kahn, La convention de Vienne du 11 avril 1980 sur les contrats de vente internationale de

marchandise, Rev. int. de dr. comp. 1981. 95; J.-P. Plantard, Le nouveau droit uniforme de la vente internationale, La

Convention des Nations-Unies du 11 avril 1980, J. dr. int. (Clunet) 1988. 339 (M. Plantard dirigeait la délégation

française à la Conférence de Vienne et 1980); Ch. Mouly, Que change la Convention de Vienne sur la vente

INTRODUCTION TO THE INTERNATIONAL SALE OF GOODS 31

internationale par rapport au droit français interne?, D. 1991, Chron. p 77 à 79; B. Nicholas, The Vienna Convention

on international sales law, The Law Quarterly Rev. Vol. 105, p 201 s (Apr. 1989), Prerequisites and extent of liability

for breach of contract under the U.N. Convention, Einheitliches Kaufrecht und nationales Obligationenrecht, Baden-

Baden 1987; Cl. Witz, L'exclusion de la Convention des Nations-Unies sur les contrats de vente internationale de

marchandises par la volonté des parties, D. 1990. Chron. 107.

Encyclopédies: Ph. Kahn, J.-Cl. Dr. int., Fasc. 565-A-5, Vente commerciale internationale, 1989; J. Stoufflet, Rep.

com. Dalloz, V° Crédit documentaire, 1989; Lamy, Contrats internationaux, sous la dir. de H. Lesguillons, T. 3, La

vente; Dictionnaire Joly, Pratique des contrats internationaux, sous la direction de V. Heuzé.

Pour le droit comparé, V. notamment, Zweigert et Kötz, An introduction to comparative law, 1987, trad. Tony

Weir, Vol. 2, relatif aux contrats; J. Thieffry et C. Granier, La vente internationale, Collection de l'exportateur, CFCE

1985, précité; sur le droit anglais de la vente, résultant actuellement du Sale of Goods Act de 1977, V. Droit anglais,

sous la dir. de J. A. Jolowicz, précis Dalloz, 1986, spé. n° 232 s, le droit commercial par M. Clarke; sur le droit

américain, c'est à dire le UCC-Sales, V. J. M. Stockton, "Sales", Coll. West In a nutschell, 1981; B. Stone, "Uniform

commercial code", Coll. West In a nutschell, 1989; J. J. White et R. S. Summers, "Uniform commercial code", West

1988; Droit des Etats-Unis, précis Dalloz, sous la dir. de A. Levasseur, 1988, n° 425 s, le code de commerce uniforme

par W. D. Hawkland; et pour connaître le texte en anglais du Sales of Goods Act de 1977, et du l'art 2 du UCC, ou

UCC-Sales, V. H. Lesguillons, Droit des contrats internationaux, Lamy, t. 3, La vente; et, pour une traduction en

français du UCC, Art. 1 et 2, V. C. Lombrecht, Le code de commerce uniforme américain, A. Collin, 1971.

Introduction to the International Sale of Goods

The international sale of goods is a commercial sale in pure form. The operation is most frequently settled between traders, and the distance which separates them requires that it generally be accompanied by transport arrangements. This transport need poses special risks for the goods. The distance which separates the parties also complicates questions relating to the payment of the price. The rules provided in respect of domestic sales are ill-adapted to international sales.

The commercial and international dimension of the operation therefore justifies the adaptation of the common law rules of contract at the domestic level. The objective must be to endow the international sale of goods with rules which are not only adapted to it, but which also can be admitted at the international level. Only rules of homogeneous law, given the diverse commercial poles of the planet, can give international trade the desired legal security. This is the reason for the work undertaken for many years, by professional organisations or within the contexts of institutions such as the International Chamber of Commerce, to identify appropriate rules. The Vienna Convention which has been ratified by France has established since 1988 (the date of its entry into force in France) an entire body of law on the international sale of goods alongside the rules of the Civil Code applicable to domestic sales.

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In this introduction to the law of international sales, the detail of the rules given to these contracts by the Vienna Convention of 1980 is not addressed. The focus here is on the role of practice in the uniformising of law relating to international sale of goods where, under the influence of professional bodies, efforts have been made to bring greater security into the relationship between the parties. This has been achieved in diverse ways: the preparation of standardised contract documents, the standardising of terminology (known as Incoterms) to define the links between the sale of goods and their transportation, the adoption of rules for documentary credits in order to ensure in the most favourable of conditions the payment of the price.

The paper also describes the efforts made to put in place a body of substantive law for international sales which is acceptable at the world level, and this has been done by the adoption of the Vienna Convention of 1980. Finally, a description is given of the operation of the conflict of laws rules which serve to determine which law is applicable to the contract in those cases where the solution to legal difficulties still depends upon the application of private international law principles.

1

CONVERGENCE IN CORPORATIONS LAW-TOWARDS A FACILITATIVE MODEL David Goddard*

The following is the Report of the General Reporter on the Law of Corporations presented to the Annual Colloquium of the International Association of Legal Science (the 1995 IALS Colloquium) which was held in Buenos Aires in September 1995. The theme of the conference was “Towards a modern ius commune: converging trends in a changing world”.

1 Introduction

My first impression, when asked to prepare a paper on convergence in corporations law, was that there had been a significant degree of convergence internationally in the general approach of states to corporations law, but rather less at a level of detail.1 This paper explains that initial impression, asks why it might be true in a field of law which has been the subject of few international treaties or harmonisation exercises, and explores some core areas of corporations law to identify the trends which characterise the perceived convergence.

Because my thesis is that the cause of convergence is primarily an improved understanding of the economic significance of corporations laws, and the insight that brings into the proper function of such laws, I begin by setting out briefly the purpose of corporations laws in a modern economy.

2 The function of corporations law

The two principal features of the institution of the corporation in a market economy are:

* Barrister and Solicitor, Partner, Chapman Tripp Sheffield Young (Wellington, New Zealand).

1 For a general overview, see the discussion in the International Encyclopaedia of Comparative Law, vol XIII - Business and Private Organisations, esp chs 3-6.

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• division of the ownership interest in an enterprise into a number of readily transferable units - that is, shares;

• limited liability on the part of the owners who have invested funds in an enterprise. They stand to lose the stake they have chosen to commit to the enterprise, but they do not put their other assets at risk.

3 Division of ownership interest into shares

The fiction of legal personality enables a corporation to continue as owner and operator of a business enterprise while investors come and go. The cost of transfers of the enterprise's assets by the former group of investors to the new group is avoided. Instead, the exiting investor simply sells shares to the new investor. The difference in cost is particularly striking in the case of public listed corporations, where a call to a broker replaces hours spent in lawyers' offices poring over agreements for the sale and purchase of a business. But even in the case of closely held corporations, there are real savings in transferring shares rather than the business assets.

A number of social benefits result from this reduced cost of transfer:

• obviously, reduced transaction costs are in themselves a benefit;

• the reduction in transaction costs enhances allocative efficiency. That is, if it costs an investor less to move funds from one enterprise to another which promises better returns, funds are more likely to flow from worse performing enterprises to better performing enterprises, maximising the overall social benefit from the investments made;

• the reduced transaction cost enables capital to be collected from a huge number of investors to fund a single enterprise. Without a share structure, the co-ordination and transfer costs of large groups of investors would inhibit the aggregation of large sums to fund significant projects;

• the existence of readily tradable fungible units of ownership permits the development of secondary markets, which in turn enhance the enterprise's performance incentives by facilitating control changes, and reduce the enterprise's cost of capital;

• the existence of readily tradable fungible units of ownership also permits investors to diversify their investments at little cost. This is a very important facility, since it enables investors to spread risk across a number of enterprises, in a range of sectors. Limited liability, discussed below, is another significant factor in permitting diversification.

3

4 Limited liability

The other very important feature of corporations law is the limited liability of investors in the corporation. A shareholder may lose the stake invested, but other assets are not at risk. Without this protection, very many projects with a positive net present value would never be undertaken.

Of course incorporation is not the only route to limited liability for investors. In theory it would be possible for each contract entered into by the manager of an enterprise to be explicitly non-recourse: that is, the other party could look to the assets of the enterprise in the event of non-performance, but would have no recourse against the manager and the owners of the enterprise personally.2 But for most enterprises this sort of express contracting is not practical: simply too many contracts are entered into on a daily basis, and the cost of negotiating a non-recourse provision with every trade creditor is prohibitive.

What corporations law does is, in effect, provide a standard form non-recourse contract which those dealing with the corporation enter into.3

The economic advancement of society, and especially industrial and technological development, is heavily dependant on the taking of business risks. Provided the net present value of a project is positive, it is (other things being equal) in the interest of society that the project be undertaken. But if it has only a 10% chance of success, few people will be willing to stake all their assets on it. More will be willing to stake a finite sum, and more still will be willing to invest finite sums in a number of such projects, increasing the odds that the payoff will be enjoyed by that investor.

Limited liability also makes the diversification of investments rational. If each new enterprise to which an investor commits funds may result in a total loss of that investor's assets, there is a strong incentive to invest in only one enterprise, or a small number of enterprises, and monitor them very carefully indeed. But the low transaction costs of investment achieved through shares, when coupled with limited liability, enable an investor to spread risk among a number of enterprises of varying risk profiles.

Of course, if an enterprise makes a loss and the investors' liability is limited, someone else must bear the loss. That someone else is the creditor of the corporation who goes unpaid. But those dealing with corporations are also able to price for risk and, with a few 2 Provisions of this kind are common in major contracts entered into by trustees, in common law countries,

especially where the trust is borrowing substantial sums or buying or selling major assets.

3 In some cases, that non-recourse feature of the standard form contract will itself be reversed by a contract of guarantee between the owners of the corporation and the creditor. But normally it is not.

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exceptions such as full-time employees, able to diversify their risk by dealing with a number of corporations. So the risk of failure of a project is spread through creditors (who assume it voluntarily and price to reflect it), and in turn through those who deal with the creditors. Limited liability does not make risk disappear, but it is a technique for allocating it across different groups of stakeholder on a voluntary basis, and thus across the community which stands to benefit from the undertaking of the (risk-entailing) enterprises.

5 Risk-taking and risk-bearing are an integral part of corporations law

It is important to bear in mind, when considering particular rules of corporations law, that one of the justifications of corporations law is that corporations will take risks, sometimes very substantial risks, and that if those risks do not come off the loss should be borne by shareholders first (to the extent of their investment), but then by creditors. Any attempt to prevent risk-taking, or to shift that remaining loss back onto the owners or managers of the business, runs a serious risk of undermining the institution of corporations law, and requires clear justification.

It is also important to bear in mind that investing in corporations, and dealing with them, is a process which is both voluntary and dynamic. This is sometimes lost sight of when the "plight" of small investors in large corporations is debated, or when creditors of an insolvent corporation go unpaid. As Easterbrook has pointed out, the flaw in the Berle and Means approach to corporate control is that people do not just wake up one morning to find that they are managers, or investors.4 Investors choose to put their funds into corporations in the belief that this will provide a better return than less risky investments: where normal risks not caused by fraud or dishonesty come to pass, they have no legitimate cause for complaint. Where small investors or creditors complain that they were unaware of systemic risk, the first solution considered should be education about those risks, not an attempt to reform the system to reduce risks at the cost of undermining its raison d'être and introducing structural inefficiencies and unnecessary costs.5 Nor should losses suffered by small investors prompt undue concern about the operation of the market.6 An attempt to eliminate or even reduce risk in the securities market would be seriously misguided. And as J K Galbraith has pointed out:7

4 See A Berle and G Means The Modern Corporation and Private Property (1932); F H Easterbrook "Managers'

Discretion and Investors' Welfare: Theories and Evidence" 9 Delaware J Corp Law 540 (1984).

5 In the case of publicly traded securities, ignorance of a small investor as to some of these risks is especially irrelevant, since the expert participants in the market will factor these risks into their trading, which the market price will reflect.

6 Even where large numbers of investors make significant losses, as was recently the case in New Zealand and other countries in late 1987. Such events typically lead to calls for more regulation, with little analysis of the

5

Regulation outlawing financial incredulity or mass euphoria is not a practical possibility. If applied generally to such human conditions, the result would be an impressive, perhaps oppressive, and certainly ineffective body of law.

6 Some evidence of convergence

A Examples of convergence in corporations law

There have been almost no truly international harmonisation initiatives in the field of core corporations law - by which I mean the law relating to the formation, internal management and organisation and termination of corporate entities.8 There has been little activity even in relation to more obviously trans-national issues such as securities markets, the market for corporate control (takeovers, mergers etc) and cross-border corporate insolvency.9

B Regional convergence

There are a number of regional groupings within each of which there has been significant convergence in corporations law in the last ten years or so. One obvious example is the European Union. The Treaty of Rome expressly contemplates harmonisation of the corporations laws of member states and the establishment of co-ordinated "safeguards...for the protection of the interests of members and others".10 A series of Directives issued by the European Council has led to harmonisation of laws in areas including disclosure of information concerning the corporation and its representatives, financial reporting and audit, limits on ultra vires and constructive notice,

true causes of the downturn and the associated losses. See J K Galbraith A Short History of Financial Euphoria: Financial Genius is Before the Fall (Knoxville, Whittle Direct Books, 1990).

7 J K Galbraith, supra n 6, pp 78-80.

8 There are two treaties on recognition of corporations, which address choice of law governing the internal operation of corporations (but not the substantive rules themselves), neither of which have come into force: Hague Convention Concerning Recognition of the Legal Personality of Foreign Companies (1951) reprinted in 1 Am J Comp L 277 (1952); EC Convention Relating to the Mutual Recognition of Companies and Legal Persons (1968) reprinted at 2 Common Mkt Rep (CCH) 6255 (1981). For a brief discussion of these treaties, and why they have not been widely taken up, see P John Kozyris "Corporate Wars and Choice of Law" [1985] Duke Law Journal 1 at 53-55.

9 UNCITRAL is currently exploring the possibility of undertaking some work in the area of cross-border insolvency. For a discussion of other initiatives in this area, see the paper presented to the 1995 IALS colloquium by Professor Jacob S. Ziegel.

10 Treaty of Rome Art 54(3)(g), and see Alfred F Conard "The European Alternative to Uniformity in Corporations Laws" 89 Mich L Rev 2150 (1991) at 2152-5.

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allowing single shareholder corporations, minimum capital for public corporations, and mergers and split-ups.11

This trend appears to have been slowed by the new emphasis in the EU on the principle of subsidiarity, introduced by the Maastricht Treaty, under which European intervention is restricted to those issues which cannot equally satisfactorily be addressed by national legislation. But the rush of new commercial laws in the post-socialist states of Europe has led to a large number of corporations laws being modelled on the laws of EU states, in particular Germany, which are geographically close to hand, share a common legal tradition, and are a reliable source of expertise and advice.12

Another trade group which has harmonisation of corporations law as an explicit goal is CARICOM, the Caribbean community common market.13 To give effect to this goal a Working Party was established which reported in 1980 with a draft Bill. The work of the working party, and subsequent work by the Caribbean Law Institute, has influenced legislation in Barbados, Trinidad and Tobago and Jamaica but has not brought about a high degree of uniformity among the member nations, or indeed even among those implementing reforms.

C Convergence in the United States of America

The most striking example of convergence - and one that I shall return to later, as it is the best documented and most exhaustively analysed - is the convergence that has taken place since the early years of this century between the corporations laws of the states of the United States of America. Corporations law (as opposed to securities law or insolvency law) is the preserve of the states, and is not the subject of Federal legislation. Yet there is an extraordinary degree of similarity between the laws of the various states, and a change in the law of one of the "leader states" - in particular Delaware - tends to be replicated elsewhere. The principal cause of this convergence is said to be competition for incorporations between states, led by Delaware. Another obvious force for convergence is 11 See L C B Gower, Gower's Principles of Modern Company Law (5th ed, London, Sweet & Maxwell, 1992) pp 60

- 66; Johan de Bruycker "EC Company Law - The European Company v. The European Economic Interest Grouping and The Harmonization of the National Company Laws" 21 Georgia J Int & Comp L 191 (1991), Conard, above n 10.

12 For a discussion of the approach taken by a number of post-socialist states to commercial law reform, including corporations law, see the fascinating paper by Cheryl W Gray and associates "Evolving Legal Frameworks for Private Sector Development in Central and Eastern Europe" World Bank Discussion Paper 209 (1993). The desire to have laws which comply with the relevant EU directives, to facilitate membership at a later date, has also been an incentive to follow existing EU models.

13 Established by the Treaty of the Caribbean Community Common Market (1973). Article 42(1) of the Annexe to the Treaty requires the member states to work towards harmonisation of corporations law.

7

the American Bar Association's authoritative and hugely influential Model Business Corporations Acts, the first of which appeared in 1950. Successive revisions have introduced changes which have been widely, and relatively swiftly, adopted by states.14

D Divergence in the British Commonwealth

The convergence noted above needs to be weighed against a tendency to divergence, at least at a level of detail, among British Commonwealth countries. A pattern of uncritical adoption of the latest English Companies Act in most Commonwealth countries has changed considerably in recent years: I discuss this further below.

7 What causes convergence in corporations law?

A Causes of convergence in commercial law

In an illuminating essay on international harmonisation of commercial law, Professor Roy Goode identifies at least nine methods by which laws are harmonised at an international level:15

• a multilateral Convention without a Uniform Law as such;

• a multilateral Convention embodying a Uniform Law;

• a set of bilateral treaties;

• European Community legislation - typically a directive;

• a Model Law;

• a codification of custom and usage promulgated by an international non-governmental organisation;

• international trade terms promulgated by such an organisation;

14 For a discussion of this phenomenon see William L Cary "Federalism and Corporate Law: Reflections Upon

Delaware" 83 Yale LJ 663 (1974) and Douglas M Branson "Countertrends in Corporation Law: Model Business Corporation Act Revision, British Company Law Reform, and Principles of Corporate Governance and Structure" 68 Minnesota L Rev 53. These articles provide a useful summary of the trends that have occurred, although the interpretation offered has been compellingly criticised in eg Ralph K Winter, "State law, Shareholder protection, and the Theory of the Corporation" 6 J Legal Stud 251 (1977); Daniel R Fischel "The Race to the Bottom' Revisited: Reflections on Recent Developments in Delaware's Corporation Law" 76 Nw Univ L Rev 913 (1982).

15 Roy Goode, "Reflections on the Harmonization of Commercial Law" in Cranston and Goode (eds) Commercial and Consumer Law - National and International Dimensions (Clarendon Press, Oxford, 1993) at pp 6-7. Professor Goode also notes that harmonisation can occur through colonisation (the foundation of the harmonising effect of English legislation) or adoption by one state of another State's codes, but observes that these are not truly international exercises with the objective of facilitating a common market or inter-State commerce, which is the focus of his essay.

8 (1996) 26 VUWLR

• model contracts and general contractual conditions;

• restatements by scholars and other experts.

Apart from European Community legislation and other regional initiatives, and domestic restatements (including draft legislation prepared by law reform bodies) none of these is applicable to corporations law at an international level. It is interesting to inquire into the reasons for this, and the other possible causes of the convergence I tentatively identify in this paper.

B Case for harmonisation weak in core corporations law

The reason for the lack of attention given to international harmonisation of core corporations law is not difficult to identify. As Professor Goode points out, the particular characteristic of twentieth-century harmonisation lies in its motivation, which is to reduce the impact of boundaries - and in particular, to reduce their significance in trade.16 But trade by corporations is not (with a very few exceptions) affected by differences in the rules which govern their internal operation: this is no more of an issue on the international scene than it is domestically, where many corporations with quite different structures and internal rules trade with each other quite unproblematically.17

This issue had to be considered by the New Zealand Law Commission in the course of its recent company law reform project. New Zealand and Australia have entered into ANZCERTA, a treaty aimed at fostering trade in goods and services in the region.18 There is a memorandum of understanding between the Attorneys-General of the two countries which seeks to harmonise business laws to give effect to the goals of ANZCERTA. The Commission considered whether these international obligations affected the reform process in New Zealand, and concluded they did not. As the Commission said, "much of company law has little impact on trans-Tasman trade. Where it has, as for example in the law relating to company insolvency, we have been particularly conscious of the ANZCERTA implications." The New Zealand reforms bear little resemblance to current Australian corporations law.19

16 Goode, above n 15.

17 It is interesting that the most obvious exception to this generalisation, the ultra vires doctrine (which can have an effect on third parties dealing with a company, and so on trade), was the subject of the First European Council Directive of 1968.

18 Australia and New Zealand Closer Economic Relations - Trade Agreement (1983).

19 See NZLC Report No 9 Company Law: Reform and Restatement (1989) paras 36-42, 145-153, 238. Other reasons given for not following the Australian model were its unsatisfactory state, the complexity and difficulty of its drafting, and the pending proposals for reform in Australia which made it an unstable model to say the least.

9

The New Zealand Law Commission's comments highlight one of the areas of law relating to corporations which does have significant cross-border implications: insolvency law. Recognition of the legal personality of foreign corporations is another area with international trade implications, which has been the subject of some international attention.20 Other areas are takeovers law, and securities laws generally: these directly affect the existence of international trade in corporate securities, and the ease with which investors in one country can invest in a corporation based in another.

Cross-border investment raises some interesting issues about harmonisation of shareholder rights and obligations. It can be argued that harmonisation is desirable, so that an investor in one country has a better idea of the package of rights incorporated in a "share", and better knowledge of and access to enforcement mechanisms. This raises questions of choice of law, as well as the issue of the non-standard content of corporations laws. But the importance of these issues can easily be exaggerated.

First, most substantial cross-border investment is carried out by investors with access to advice on the legal regime applicable in the corporation's home jurisdiction, and a presence in the recipient country or a specialist knowledge of it. Smaller investors typically invest in "foreign" corporations through a domestic stock exchange on which the foreign corporation is listed: domestic stock exchange rules often go some way towards ensuring that a share listed on that exchange carries similar core rights, whatever might be permitted under the corporation's home law. Second, international capital markets display a considerable tolerance for variation in non-financial rights attached to debt and equity securities. Most investors see their remedy for dissatisfaction with management or the affairs of the issuer generally as lying in liquidity of the securities and their ability to sell, rather than in the exercise of enforcement rights. "Country risk", including any risks associated with the legal regime of the country, is another risk which can be managed to some extent by diversification. Third, and most importantly of all, if an issuer seeks to raise funds in overseas jurisdictions it is in the issuer's interests to attach to its securities terms which are as attractive as possible to investors: in practice this often means that certain topics are addressed in a more or less standardised way. These standard terms need not be imposed by the issuer's home jurisdiction: all that is required is a sufficiently flexible corporations law which enables the issuer to customise the terms attaching to the securities to meet the expectations of investors. That is, the default rules of the home jurisdiction are not a barrier if the issuer is free to depart from them where it is commercially desirable to do so.

The New Zealand Commission suggested that its work might rather provide the basis for any trans-Tasman harmonisation, an invitation that our larger neighbour has not yet taken up!

20 See above n 8.

10 (1996) 26 VUWLR

Perhaps the most critical issue for those concerned with cross-border investment is removing artificial barriers to raising funds in a number of countries imposed by differing (and often cumulative) disclosure and prospectus requirements in different countries. Considerable work has been done on these issues in regional contexts such as the European Community, and in Australasia. The thrust is normally to ensure that disclosure under one regime is accepted in other countries, or need only be supplemented with a limited amount of additional information, rather than being entirely recast. However I do not intend to discuss this important topic in any detail in this paper, as such disclosure requirements have little to do with core corporations law.

It is not easy to identify any factors apart from facilitating trade and international capital raising and investment, which would justify devoting time and resources to international harmonisation of core corporations law. These factors are not of themselves sufficient, in my view. It follows that attempts to harmonise core corporations laws on an international scale are likely to be of limited value, and the absence of such exercises need not be lamented.

C Convergence through use of foreign models

The task of reviewing and redrafting a corporations statute is a huge one, requiring substantial expertise and resources. This acts as a force for convergence, for it means that all but the most insular or wealthy of countries tend to look overseas for models for reform. These models are either adopted virtually intact, or used as a base for the reform exercise. This tendency is reinforced by the frequency with which smaller or less wealthy countries call on the expertise of consultants from countries whose laws and recent experience appear to be relevant to the reform exercise: such consultants have a natural tendency to take as their jumping off point the laws with which they are most familiar.

I have already mentioned convergence resulting from looking abroad for useful models in the post-socialist economies, where the source has been the EU and in particular Germany.

For many years England was the leader in company law reform for its empire, and also for independent members of the British Commonwealth. As England enacted new companies legislation, the other Commonwealth countries would follow, usually without any substantive review. This approach is summarised rather nicely in the Explanatory Memorandum to the 1933 Bill introducing into New Zealand the English Companies Act 1929, with very minor format changes:

The Imperial Act on which this Bill is founded is not above criticism. For example, the Editors in their preface to the eleventh edition of Buckley's Law and Practice under the Companies Acts, make the following observations:...

11

This criticism might be taken to suggest that the Imperial model can be improved upon, and it may further be suggested that if it can be improved upon it should be improved upon. But the view taken by the Advisory Committee, and concurred in by the Government, is that we should as far as possible adopt the verba ipsissima of the Imperial Act. Any attempt at improvements in language or arrangement would in large measure defeat the ultimate purpose of the Bill - namely that there should in this department of law be uniformity, as far as that is attainable, within the British Commonwealth, and that the decisions of the English Courts should be applicable in New Zealand as they are in England.

If the criticisms of the Imperial Act, made in text-books, legal journals, and elsewhere, prove to be well-founded and substantial, they will inevitably be followed by amending legislation in England, and it will then be a simple matter for the New Zealand Legislature in its turn to adopt those amendments. This view has the support of the responsible officials of the Imperial Board of Trade, who administer the Imperial Act and with whom the proposals of the Government in relation to the present Bill have been discussed." (emphasis in the original)

However the influence of EC law on English law, and a view of English law reform in this field as conservative to the point of ossification, and focused on detail rather than underlying principle, has led many Commonwealth countries to look elsewhere for models in the last ten to twenty years. The most influential of the various Commonwealth reform exercises has been the Dickerson report in Canada in the early 1970s.21 This report, and the accompanying draft legislation, has been the foundation of new or substantially revised federal and provincial corporations statutes in Canada, and has been a major influence on reform in the Caribbean and in New Zealand - and so, indirectly, in Argentina, Sri Lanka, Papua New Guinea and other countries.

The Dickerson report is an example of the importance of restatements by law reform bodies and scholars in the field of corporations law. Another influential restatement I mentioned earlier is the Model Business Corporations Act. It is hard to imagine any law reform body (in the common law world, at least) embarking on corporations law reform without a careful scrutiny of these texts and of the ideas which they embody. Even where a foreign model is not directly drawn on by those responsible for reform, restatements prepared by reformers in other countries are often a source of ideas for change, and challenges to "received wisdom".

21 Dickerson et al Proposals for a New Business Corporations Law for Canada (1971, Information Canada, Ottawa).

12 (1996) 26 VUWLR

D Competition for incorporations as a cause of convergence?

As discussed above, in the USA there has been striking convergence of state corporations laws. This is attributed by commentators to competition between states for incorporation and related business, led by Delaware. The reasons for Delaware's success in attracting incorporations, and setting the agenda for corporate law reform, are said to be the enabling or "facilitative" nature of its laws, the large and stable body of precedent developed in the state, and the large and skilled corporate bar which enable corporations to obtain a higher level of certainty and clearer, more authoritative advice on the transactions which they contemplate.22 As Professor Roberta Romano points out in a recent article, this competition is more complex than some commentators assume, as it is characterised by:

• significant transaction costs on reincorporation, which lead to limited reincorporations except prior to major corporate transactions likely to be facilitated by the move;

• a significant "first mover" advantage enjoyed by Delaware.23

But such competition, or a perceived risk of such competition on the part of lawyers and legislators, is widely acknowledged to be a major force in convergence of US corporations laws.

The question is whether similar competition is an effective force on a wider stage. Certainly countries compete to attract businesses to establish a local presence, employ local staff, export products and so enhance the domestic economy. In order to do so, countries (especially developing countries) frequently establish special programmes to attract foreign investors, involving tax breaks, easy transfer of funds and assets, and simplified administrative and bureaucratic requirements. There is sometimes, though not always, a review of domestic laws to which foreign investors will be subject, to see if these can be 22 For a discussion of the convergence in US corporations laws, and the debate over whether that tendency is to be

applauded or deplored, see Cary above n 14, Melvin A Eisenberg, "The Structure of Corporation Law" 89 Columbia Law Rev 1461 (1989), Easterbrook supra n 13, Fischel supra n 13, Winter above n 13, Ralph K Winter, "The Race for the Top Revisited: A comment on Eisenberg" 89 Columbia Law Rev 1526 (1989), Terence L Blackburn, "The Unification of Corporate Laws: the United States, the European Community and the Race to Laxity" 3 George Mason Independent Law Review 1 (1994), Lucien A Bebchuk, "Federalism and the Corporation: the Desirable Limits on State Competition in Corporate Law" 105 Harvard Law Rev 1437 (1992), Roberta Romano "The state competition debate in corporate law" in LA Bebchuk (ed) Corporate Law and Economic Analysis (Cambridge University Press, 1990), Easterbrook and Fischel The Economic Structure of Corporate Law (Harvard University Press, 1991), chs 4-5.

23 Romano, above n 22.

13

streamlined, and costs and bureaucratic delays reduced. This process can embrace corporations laws.

The desire to create an attractive climate for foreign investment certainly inclines many countries towards adopting a legal framework for the establishment and operation of corporations which will not appear unduly onerous or strange to foreign investors. An argument often advanced on issues such as capital structures, and takeovers laws, is that certain regimes familiar to investors, such as that of the United States, will be attractive to investors precisely because they are well known internationally. There are often strong counter-arguments, where the foreign model is flawed, or depends on institutional arrangements which are not practical to replicate. But a desire not to be different for the sake of it is certainly sensible.

On balance, however, I do not believe that there is significant competition for incorporations internationally, which has produced or is likely to produce convergence of corporations laws.24

Competition for incorporations within the USA is made possible by the ability of a corporation to carry on business and raise capital within that federation regardless of its state of incorporation.25 That ability in turn is based on the constitutional protection within the USA of interstate commerce, which effectively prohibits discrimination against out of state corporations.

An environment which encourages competition for incorporations does not exist on an international scale, for a number of reasons. First, there are many barriers to a corporation formed in one country carrying on business in another.26 These are on occasion explicit, as where foreign corporations cannot own land, or pay tax at different rates, or are subject to limitations on access to the courts or to state contracts or licences of various kinds. They may also be implicit, as where foreign corporations carrying on business in a country are required to file financial statements and other forms of disclosure in that country in relation to the whole of their business, in forms and subject to requirements peculiar to that country. The cost of forming a local subsidiary will often be less, in such circumstances.

24 This is assumed to be true in the US literature on state competition: see for example Bebchuk above n 22, 1507-

1508, Easterbrook and Fischel, above n 22, 233.

25 Blackburn, above n 22.

26 The Hague Convention on Recognition of Corporations, above n 8, has had little success, attracting only a small handful of countries as signatories. Many countries impose some restrictions on foreign corporations, going beyond mere disclosure to restrictions on participation in some forms of economic activity, higher tax rates, higher registration fees etc.

14 (1996) 26 VUWLR

Second, the decision whether to trade in a particular country will be driven by a range of commercial factors, of which only one is the cost of complying with legal requirements in that country. In turn, only a small part of legal compliance costs arises from the cost of complying with corporations laws. The decision on whether to form a corporation in a country in which it is proposed to carry on business cannot be easily divorced from the decision whether to carry on business in that country, and will almost never be a major factor in the latter decision. Of the relevant legal issues, tax and employment law tend to be far more significant.

Third, just as Delaware's institutional advantages have not proved easy to replicate in other states, so too they are not easy for other countries to replicate. So this basis for strong competition is lacking.

Fourth, although there are costs involved in transferring incorporation from one state in the USA to another, it is legally possible. International transfers of incorporation are sometimes not permitted by a country's laws, or restricted in various ways, and are likely to be more expensive.27 Where the vast bulk of a corporation's owners are located in one country, as is often the case, relocation offshore may also lead to a discount in share value for risk (due to ignorance of the new legal environment, and increased information and enforcement costs), which is likely to be unattractive to shareholders and managers.

Fifth, some countries apply a choice of law rule in relation to the law governing the internal affairs of a corporation which focuses on the siËge rÈel of the corporation, not (as under Anglophone law) its place of incorporation. So merely changing a place of incorporation, a legal formality which is likely to cost less than moving a principal place of business, would not be recognised by some countries as effecting a change in governing law. The need to move a corporation's siëge rèel in order to operate under a different corporations law substantially enhances the transaction costs of such competition, making it much less likely.28

27 For example, the Canadian legislation confers "appraisal" or "buy-out" rights on dissenting shareholders of a

corporation which resolves to continue under the laws of another jurisdiction: this could impose a significant cost on the corporation (see Canada Business Corporation Act s 188, Ontario Business Corporations Act s 181). In the UK there are significant taxation disincentives to migration of companies: Taxation of Chargeable Gains Act 1992 (UK), s 185.

28 This appears to be the principal weakness in Blackburn's thesis (above n 17) that competition in corporations law is more likely in the EU than in the USA, leading to an accelerated "race to laxity". Relocation of a siËge rÈel seems unlikely simply in order to secure the benefits of a change in governing law. Similarly, the place of establishment of the siËge rÈel of a newly formed European corporation is likely to be driven by commercial considerations other than the legal environment for corporations. And on the increased importance of the law of incorporation, even in continental Europe, see Kozyris above n 8 at 53-55.

15

E The influence of economic theory

The other cause of convergence in corporations law, in my experience, is an increasing understanding by law reformers and governments of the function of corporations law in the economy, and of the ends which it can and cannot serve.

Those responsible for the reform exercises I have been involved with in the last seven or so years have for the most part proceeded along the following lines:

• corporations laws are seen as providing a form of business organisation which is made up of a set of standard form contracts between the various participants (owners, managers, creditors etc);

• the role of the state is essentially facilitative: it permits the formation of corporations in the least expensive, most efficient manner possible, and provides a set of standard terms which can be varied by the participants to meet their particular business needs. Greater reliance on markets to produce efficient outcomes, and less confidence in the ability of governments to "pick winners" at the level of substantive rules for the operation of the marketplace, has led to a withdrawal of prescriptive law from many areas of corporate relationships;

• the imposition of procedural or formal requirements on corporations needs to be considered very carefully, in the light of the need to facilitate business activity and an awareness that information disclosure and regulatory compliance are not costless;

• the imposition of substantive restrictions on the manner in which corporations are organised, and the relationships between the participants, is difficult to justify and should be rigorously scrutinised;

• the pursuit of collateral objectives through corporations laws (eg "shareholder democracy", worker participation in management, diversified public involvement in the sharemarket) is unlikely to be effective, and entails costs and distortions which need to be justified by something more than warm fuzzy slogans.

One certainly sees these influences at work in the North American legislation, in the proposed reforms in Argentina,29 and in the reforms in New Zealand and other Commonwealth countries, to take a few examples. They can also be discerned in the lack of progress or abandonment of some of the proposed EU directives, which appear to have fallen victim to the subsidiarity principle precisely because there is no clear and 29 Proyecto de reformas a la ley de sociedades commerciales elaborado por la Comision designada por resolution

MJ 465/91 (Astrea, Buenos Aires, 1993). See the paper presented to the 1995 IALS colloquium by Professor Daniel G Castro Viera.

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demonstrable case to be made that the suggested interventions will enhance trade or freedom of establishment within the EU. The result is that individual countries, and within them individual corporations, are left to decide how to address these issues subject to the disciplines of the markets in which they operate.30

This theoretical framework encourages convergence towards a generally facilitative model of corporations law, rather than towards identical "default" provisions. This may be seen as a very low level of convergence. But it is the critical level for coherent reform, for once the law in a country is facilitative it is possible for corporations which wish to depart from the standard form to do so (at a cost). Corporations law then ceases to act as a significant handicap to doing business from a base in one country, rather than another.

The precise content of the standard form provided in each country is much less important, and continues to vary considerably. The goal of legislators, from a transaction cost perspective, should be to provide the type of corporate constitution and associated arrangements that the majority of corporations is likely to prefer, since that will reduce the overall cost of departures from the standard form. But a reluctance to change the "default settings" of the past, or a desire to ensure that participants consciously and deliberately choose a lower level of protection in relation to certain corporate transactions, for example, may lead to departures from this approach in some countries. Institutional factors may also be relevant, as discussed below. While there is some convergence in this area of corporations law, therefore, I believe it is weak, and likely to remain so.

F Tempering theory with institutional reality

One of the significant factors in deciding how to develop corporations law to suit a particular country is the level of competence and resources of its institutions. A certain level of institutional effectiveness is essential if there is to be a meaningful corporations law: for example, there must be a functioning registry from which core information can be obtained about the controllers and owners of the corporation, and about its legal location. This is sometimes overlooked, with the result that a technically excellent and modern law is almost entirely useless in the country which has adopted it.

The question of the appropriate body to carry out supervisory or investigatory functions must also be tempered by reality in each country. The starting point should be to avoid third party intervention in corporate affairs unless there is a genuine problem. But where there is a breakdown of the normal arrangements, there must be ready access to responsive authorities or tribunals with the necessary level of understanding of the issues involved.

30 This development is touched on by Blackburn, above n 22. See also Frank H Easterbrook, "Federalism and

European Business Law" 14 International Review of Law and Economics 125 (1994), esp 131-132.

17

Two examples may be of interest. First, a belief on the part of those responsible for the reforms in one jurisdiction where I have been working recently that the general courts have insufficient expertise and are too slow to perform commercial dispute resolution functions has led to the creation of a specialist tribunal to hear some disputes, and to replacement of some provisions in the models used which required court intervention with a regime which prescribes a "default" outcome in certain situations, with the ability to go to court or to a tribunal only if that default outcome is not acceptable to a party. Second, when I was drafting the Sri Lankan Companies Act, I included a requirement derived from English and Australian models that any liquidator or receiver of a company must be an experienced insolvency practitioner. The law reform body I was working with politely explained to me that this was a wonderful provision in principle, but as there had never been a receivership in Sri Lanka, and only a few liquidations (most conducted by one person, who had since retired), there were no such persons in the country! The provision had to go.

8 Some likely directions for convergence

In the remainder of this paper, I consider three aspects of corporations law. I look at the directions for convergence that my thesis suggests, and whether it is possible to discern trends of the kind predicted.

A Capital raising, and distributions to shareholders

1 Capital maintenance

A feature of almost all common law countries' corporations law has until relatively recently been the requirement that the company specify a nominal capital which it is entitled to issue, and that each share issued have a nominal or par value. This is accompanied by the "capital maintenance doctrine", developed by the courts and only partially set out in the relevant legislation. The capital maintenance doctrine means in practice that:

• a share may be issued at par or at a premium over par. But it cannot be issued for less than par without a special procedure being followed;

• a company cannot pay dividends to its shareholders unless those dividends are paid out of current profits, or out of reserves. But the company need not make up losses of capital in a previous year before it pays current profits out to shareholders as a dividend;

• a company cannot buy its own shares, or return capital to shareholders, without a special procedure to reduce its capital which involves a meeting of shareholders and at least two applications to the Court;

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• majority or super-majority shareholder approval is required to increase the company's nominal capital.31

If requirements of this kind protect either shareholders or creditors of a corporation from capital dissipation, they do so by chance rather than because they are well fashioned tools for achieving this end. Professor Castro Viera puts it nicely, in describing the principle of capital immutability as providing "a rough, unsophisticated kind of assurance to the general public that the assets of the company exceeded its debts [by] the amount of stated capital."32 If anything, he errs on the side of overstating the doctrine's value.

Shareholders are not protected from dilution of their stakes in the corporation by restrictions on issue below par, if the company's shares have a market value above par. This lack of meaningful protection is accentuated if the former North American stratagem of issuing shares at low par values and high premiums as a matter of course is adopted. But obtaining capital becomes more costly and difficult precisely when it is most likely to be needed, ie when shareholder funds are depleted.

A creditor who extends credit to a corporation because it has a nominal capital of $1 million is being misled: it may not all be issued. A more sophisticated creditor who relies on a corporation's issued, as opposed to nominal, capital may still find that it has all been lost in previous years and that the expected capital cushion is not there.

In essence, the problem is that neither nominal capital nor issued capital has any necessary relation with net shareholders' funds: it is the latter which is most relevant to the credit risk involved in dealing with a corporation, as well as cashflow and an appropriate risk-weighted assessment of contingencies over the period of credit.

The other problem with the argument that the classical capital maintenance doctrine protects creditors is empirical. Creditors do not in fact go to the public registry and check on a corporation's issued capital before extending credit. Ordinary trade creditors with many customers do not normally carry out credit checks at all: the cost is not justified by the amount of exposure to any one customer, and the risk of bad debts is factored into pricing to all. Major creditors who do care about a corporation's creditworthiness do not rely on searches at the public registry, and the limited historical information which those searches produce. They get credit references, or bankers' opinions, or ask the corporation to provide recent financial information and financial forecasts on which to base the assessment. They may go to other sources of information such as credit rating agencies. 31 The position was even more extreme in Argentina, as the paper presented to the 1995 IALS colloquium by

Professor Daniel G Castro Viera explains. A very rigid principle of "capital immutability" held sway.

32 Above n 31.

19

They may take security for the credit extended, or rely on retention of title clauses in contracts for the supply of goods.

2 North American "stated capital" techniques

The approach used in some jurisdictions, such as Canada, replaces nominal capital with "stated capital". Typical stated capital regimes provide that:

• the board of directors decides on the amount payable for shares upon issue;

• the corporation's stated capital is the amount actually received by the corporation for its shares at the time they are issued;

• distributions may be made if the corporation will, after the distribution, be able to meet its debts as they fall due and will have realisable assets in excess of liabilities plus stated capital;

• a corporation may buy back its shares with board approval, and if it does so may reduce its stated capital accordingly. In some jurisdictions voluntary buybacks by a corporation can only take place if a solvency test similar to that for distributions is met. Other buybacks can still take place provided a bare solvency test (ie without the requirement to preserve stated capital) is met;

• a corporation may issue some or all of its shares as redeemable shares, which the holder can require the corporation to redeem, with a consequential automatic reduction of stated capital;

• in some (but not all) jurisdictions, stated capital can be reduced by super-majority resolution, with public notice of the reduction.

This approach avoids the difficulties posed by the capital maintenance doctrine in relation to issue of shares, but is only marginally more focused on the real issues in relation to preservation and adequacy of capital.

The stated capital system does not of itself confer any protection on shareholders. Shareholders' funds may still be depleted by unsuccessful trading or depreciation, for example. If the corporation's net assets fall below the stated capital, no distributions will be permitted: but this is not a protection for shareholders, since they are if anything in a better position where funds have been paid out to them as a distribution.

In any event, to the extent that the restriction is for the benefit of shareholders, it should be able to be waived in the corporation's constitutional documents, or by unanimous shareholder agreement.

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For creditors, checking a corporation's stated capital would be as unenlightening as checking issued capital is at present. Even if they do so, they would be none the wiser unless they could also check:

• the current market value of the corporation's assets, which is not ascertainable from the public register in most countries;

• the existence of securities over the corporation's property, which is often recorded on a public register;

• how much is secured under any securities, and in particular under debentures, which is not normally ascertainable from a public register;

• the amount of other unsecured liabilities, which again it is not normally possible to discover from the public register.

It is true that stated capital provides a "cushion", in the sense that distributions which would erode that capital are not permitted - and if such distributions are improperly made, they can usually be recovered from the directors or shareholders. But a creditor who relies on a particular stated capital may also find that it is eroded by trading losses, redemption of redeemable shares or buybacks pursuant to a minority buyout right. This may already have happened before credit is extended, or may occur after the creditor has accepted the exposure.

In addition, experience shows that in the case of closely held corporations in which the shareholders and directors are identical, and all are involved in the operation of the business, even the prohibition on distributions if stated capital cannot be preserved is ineffective. The directors simply pay themselves salaries, rather than taking income through distributions. This is normally quite lawful.

The practical result of these deficiencies in stated capital regimes is that creditors normally either ignore stated capital, or contract to fill the gaps with additional notice requirements and restrictions on use of funds when the cushion is eroded. Such contracts do not depend on a statutory stated capital regime for their effectiveness, and can also be used in countries such as New Zealand without such a regime.

For the reasons canvassed above, there is little to be gained from a stated capital regime. There is a cost to corporations in complying with the requirement. If the cost is not justified, why incur it?

3 Minimum capital requirements

In some jurisdictions, including Argentina, the EU countries, and some post-socialist countries, certain classes of corporation are required to have a minimum nominal or stated

21

capital.33 There is nothing similar in most North American jurisdictions, New Zealand or Australia.

It is impossible to specify in advance the amount of capital required to safely carry on all types of business activity. To attempt to ensure businesses are adequately capitalised by such a rough technique, which can only apply to domestic corporations rather than foreign corporations, or even domestic individuals, partnerships or other forms of business association is in my view bizarre. It is increasingly bizarre when one bears in mind that in most countries, closely held corporations are not subject to any such requirement - and yet there is no restriction on the type or scale of business that they can carry on.

This is an example of a well-meaning but poorly thought through requirement which is of no real value to anyone. On the other hand, provided it does not apply to all corporations, it is unlikely to be a significant barrier to efficient conduct of business. So repeal of such provisions is desirable, but hardly urgent. If this kind of restriction applies to all corporations in a country, however, and is set at a level which is meaningful enough to prevent some businesses from being incorporated, there will be real costs and inefficiencies, and some form of reform is more urgent. This can either take the form of removing the requirement, or allowing formation of corporations of different kinds which are not subject to the requirement.34

4 Capital - a summary

The above discussion of capital raising and distributions illustrates how applying reasonably elementary economic analysis to corporate structures is likely to lead a reformer towards abandonment of a strict capital maintenance doctrine, and to permitting all or at least some forms of corporation to be formed and to carry on business without a minimum capital requirement. Significant moves in this direction have indeed occurred in numerous countries, including Canada, New Zealand, Australia, and Argentina, and seem likely to continue.

B Directors' duties to the corporation and its shareholders

Directors are appointed by shareholders to manage the company. In the case of very small companies, they normally are the shareholders, or most of them. In the case of very 33 For the position in Argentina, see the paper presented by Professor Daniel G Castro Viera to the 1995 IALS

Colloquium. The EU requirement is set out in the Second Directive on Company Law, implemented in the UK by ss 45 and 117-118 of the Companies Act 1985. For the position in selected post-socialist countries see Gray and associates, above n 12.

34 The proposals for reform in Argentina have taken the latter direction: Castro Viera, above n 29.

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large companies, on the other hand, it is probably more accurate to say that the company is managed under the supervision and general direction of the board of directors.35

At this point, it is worth reminding ourselves that the role of the business corporation is to take business risks. So the job of directors is to manage or supervise the taking of business risks. And it is also worth reminding ourselves of the truism that the board of a company can only achieve above average performance by taking risks greater than those associated with investing in sovereign debt, for example - if there were equally riskless investments which provided a better return, demand for those investments would increase until their price matched that of government paper. If investors want riskless returns, they can buy government paper: they do not need to employ directors to do it for them. So they are looking for a better return - that means risk, and means directors must take risks to do their job.

Because corporations are very diverse, it is not easy for corporations law to specify what is required of directors in detail. But certain general standards can be set: I consider below what those might be.

1 Limiting directors' duties

First, however, one important point should be noted. When an investor appoints an agent to carry out any other form of business activity (ie other than to run a company in which the investor has placed funds) it is entirely open to the investor and the agent to agree between themselves on the appropriate level of performance and care to be expected of the agent. In freely negotiated agency agreements, or in trust deeds appointing trustees to manage funds, it is very common to find a wide range of limitations on the agent's or trustee's liability, including provisions which:

• limit liability to recklessness or fraud, or to acts done in bad faith;

• expressly authorise the agent/trustee to act for others in the same market, or to participate in the market on their own account;

• authorise the agent/trustee to take advantage of opportunities or information acquired while acting as agent or trustee.

It is not usually considered appropriate for the law to limit arrangements of this kind - except that exclusion of liability for fraud may be seen as contrary to public policy, and invalid. Such arrangements may reduce the cost of the agency services obtained, or may 35 Compare Model Business Corporations Act 8.01; Companies Act 1993 (NZ), s 128(1) and see Hilmer "Strictly

Boardroom - Improving Governance to Enhance Company Performance" (Information Australia, 1993).

23

make it possible to retain the services of individuals who would not be prepared to act on any other basis.36

It is difficult to see why the same reasoning should not apply to corporations and their directors. Whatever the "default" standard of care established for directors, the law should permit this to be varied by the corporation's constitutional documents: in large publicly traded corporations, investors can make their own decision on whether or not this is desirable and the market will price accordingly. In small corporations, each investor can once again make his or her own decision about the acceptability of such a provision, and either participate on those terms or not: but if a partnership can adopt such an arrangement, for example, why not a corporation?37

Interestingly, this is not yet a common position in corporations legislation. Most countries take a view on the required standard, and provide for it to be invariable.38 The first exception I am aware of was the Delaware law permitting a corporation's constitution to limit director liability, which was enacted in 1986.39 A number of other states in the USA have followed suit.40 If I had to pick an area of likely future convergence in corporations law, I would see this as a significant change with strong economic justifications, which is likely to spread.

2 The fiduciary duties of directors

Directors are the archetype of agents whose duties are difficult to specify in advance. As scholars have pointed out, this makes it likely that the law will settle on the type of 36 This is particularly true in small countries such as New Zealand, where a limited number of skilled

intermediaries and agents means that exclusive relationships are often impractical.

37 Certainly there can be no complaint where a corporation is formed with such a provision in its constitution, or where an investor invests after such a provision is adopted. But if such provisions can be adopted by a majority vote, rather than unanimously, there may be investors in small corporations who have such a provision thrust on them, and are unable to sell out easily as their investment is illiquid. The solution depends on how major this change is perceived as being. If it is seen as relatively minor - the view I take - then no special remedy is required: this is just one of a number of business decisions which the investor has agreed to allow to be decided on a majority basis, such as appointment of any other agents of the company, or of a non-director chief executive. If the change is seen as major, the appropriate solution is to allow investors who voted against the change buy-out or "appraisal" rights.

38 See the International Encyclopaedia of Comparative Law, vol XIII ch 4 para 113, in which it is also suggested that the trend is toward higher standards. I am not sure that this is as true today as it was at the time this work was completed in the early 1970s.

39 Delaware Act of June 18, 1986, ch 289, 65 Del. Laws. For a discussion of this amendment to the Delaware code see David S Schaffer "Delaware's Limit on Director Liability: How the Market for Incorporation Shapes Corporate Law" 10 Harvard J Law & Public Policy 665 (1987).

40 Forty states as at 1 December 1994 (Model Business Corporations Act Annotated (3rd ed)).

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general duties characterised as "fiduciary" ie duties to act honestly and in good faith, and in what the director believes to be the interests of the corporation. These are indeed the types of duty that one finds set out in many corporations laws.41 The author of the relevant chapter of the International Encyclopaedia of Comparative Law was able to make the strong statement that:42

Directors owe duties of skill and care and fiduciary duties to the corporation. The standards as to fiduciary duties may vary in detail from one jurisdiction to another, but the basic approach seems to be pretty much the same everywhere.

3 The standard of care expected of directors

The more difficult question in many ways is the standard of care expected of directors in making business decisions. Should they be liable for losses suffered by the company if they make decisions recklessly? Negligently? Or which are simply wrong? Most commentators agree that where a board is reckless, in the sense that it makes a decision no reasonable person could have made, it should be liable for the consequences. Similarly, most agree that it would be fundamentally inconsistent with the role of directors as takers of business risks to impose liability for decisions which prove to be wrong: directors are not insurers of every corporate project which is undertaken. But there is considerable debate over the question of liability for negligence, and many different solutions have been propounded and enacted. The passage from the International Encyclopaedia of Comparative Law cited above continues, a few lines later:43

The situation is different with regard to duties of care and skill. Here we find a great variety of solutions. The standard liability ranges from slight negligence (West Germany) to gross negligence amounting to fraud (England and, to a decreasing extent, the United States). In some jurisdictions the test is objective, not taking into account the particular talents of the individual director (West Germany), whereas in others the standard is wholly subjective (England). Distinctions tend to be made between inside and outside (United States) or salaried and non-salaried directors (France). Likewise, the scope for discretion given to directors varies from jurisdiction to jurisdiction, the broadest scope probably being granted by the American "business judgment rule". Occasionally members of management may even become personally liable for corporate debts in case of any mismanagement (France).

41 For a discussion of the imposition of duties of loyalty, or "fiduciary" duties where it is impossible to specify

completely the parties' obligations see Easterbrook and Fischel, above n 22; Easterbrook and Fischel "Contract and Fiduciary Duty" 36 J Law & Economics 425 (1993). For examples of legislation to this effect in relation to directors see Companies Act 1993 (NZ) s 131; Canada Business Corporations Act s 102(1); Model Business Corporations Act ß 8.30(a)(1).

42 International Encyclopaedia of Comparative Law vol XIII ch 4, para 113.

43 Above n 42.

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C The New Zealand approach

In New Zealand, section 137 of the Companies Act 1993 provides:

A director of a company, when exercising powers or performing duties as a director, must exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation,-

(a) the nature of the company; and

(b) the nature of the decision; and

(c) the position of the director and the nature of the responsibilities undertaken by him or her.

This is a largely objective standard, in which the performance of a director in particular circumstances falls to be assessed by reference to the standards of an abstract "reasonable director" - itself a concept which it is not entirely easy to pin down, especially outside the context of large listed companies with professional directors.

D The Delaware approach

The law of Delaware, and many other states of the USA, addresses this issue by reference to the "business judgment rule", summarised in one text as follows: 44

A decision by a board of directors (i) in which the directors possess no direct or indirect personal interest, (ii) which is made (a) with reasonable awareness of all reasonably available material information, and (b) after prudent consideration of the alternatives, and (iii) which is in good faith furtherance of a rational corporate purpose, will not be interfered with by the courts, either prospectively by injunction, or retrospectively by imposition of liability for damages upon the directors, even if the decision appears to have been unwise or have caused loss to the corporation or its stockholders.

Rather than placing directorial decisions beyond judicial scrutiny, the business judgment rule is in reality a black-letter formulation of the factual and legal issues to be reviewed in determining whether judicial interference with a directorial decision is warranted. Only after the court has concluded - depending upon the circumstances, from either a failure of a challenger to prove otherwise or an affirmative showing by the directors of appropriate disinterest and care - that all the prerequisites for judicial non-interference have been met does the inquiry terminate. On the other hand, if evidence discloses that one or more of the elements underlying application of the business judgment rule is missing - viz, there has been self-dealing, failure to exercise the requisite degree of 44 Drexler, Black & Sparks Delaware Corporation Law and Practice (Matthew Bender, 1995) 15.03.

26 (1996) 26 VUWLR

care, or an irrationality of purpose - other judicial rules come into play to determine whether and to what extent the court will employ its injunctive powers or impose personal liability upon the directors."

The "requisite degree of care" referred to is described in most recent Delaware court decisions as requiring directors to act without "gross negligence". But the difference between gross negligence and simple negligence is not clear, and in the view of many commentators has been eroded by recent decisions.45

E The position in Argentina

The objective approach to director liability in Argentina, as described by Professor Castro Viera, is one of the strictest I am aware of.46 I am not surprised by his observation that able individuals may be reluctant to accept appointment as external directors under such a regime, where an individual director may be liable for a board decision without any personal negligence, let alone the protection of a higher standard of fault.

F Directions for the future?

There is nothing easier than re-evaluation of a risk with the benefit of hindsight. If director decisions are to be reviewable on objective grounds, it seems to me that there is a real risk that directors will be more risk averse than it is in the interests of investors, or the economy, for them to be. It is always safer not to make a speculative investment than it is to make it. The many executives who turned down the opportunity to acquire the right to manufacture plain paper copiers were not by any standard negligent. But the decision cost the companies' investors a fortune. If a board elected by shareholders believes in good faith that a project is viable, it seems to me that the risk should be taken without fear of a subsequent expensive second-guessing exercise on the part of risk-averse professionals and judges who can examine the decision at leisure over a period much longer than that which was available to the board to make it.

My own thinking on this difficult point is still evolving. But I am very nervous indeed about the extent to which the current New Zealand legislation imposes an objective standard on directors. I believe it is more likely to cause systematic risk aversion and underperformance in New Zealand business than to protect investors. And even if it does protect investors, it may be protecting them from the very thing for which they invest in equities. A prudent and diversified investor neither wants nor needs protection from risk 45 Such as Smith v Van Gorkom 488 A 2d (1985), Cede & Co v Technicolor Inc 634 A 2d 345 (1993).

46 Castro Viera, above n 29. Note however the strict liability of directors for company defaults in Japan, as described in M Tatsuta "Risks of Being an Ostensible Director" 8 J Comparative Business and Capital Market Law 445 (1986).

27

in individual ventures. A standard of recklessness, perhaps coupled with "gross negligence" (though I am not sure I know what that means, either) seems more appropriate.47 I should emphasise, however, that I would be much less troubled about the precise standard of care adopted in a jurisdiction which allowed the corporate constitution to limit or modify director liability, as discussed above.

It will be interesting to see whether there is significant convergence towards any one standard for assessing the level of care expected of directors. My suspicion is that this is unlikely, since allowing director liability to be limited in the corporate constitution - a trend that is likely to spread - enables each corporation to set the standard it requires, reducing the importance of the "default" provision.

G Fundamental changes to corporate structure or corporate activities

The thesis that convergence is driven primarily by a focus on economic efficiency suggests that there might be a trend in modern corporations statutes to increase the power of the majority to determine the use to which the corporation's funds will be put, while conferring on minorities opposed to a fundamental change an appraisal remedy or "buy-out right". The ability of a minority to prevent majority-approved transactions would be reduced, as would the need for judicial or bureaucratic approval of such matters.

It is difficult to see why a majority should ever be prevented from using its investment in the manner it thinks fit, provided change is decided on consistently with the corporate contract. Shareholders are investors in a business. In large corporations, the directors decide how the business is to be run. Major transactions, however, are normally decided on by shareholder vote. In smaller corporations, the shareholders usually are the directors, and they decide all matters. If the relevant controllers - the board appointed by shareholders, or the majority - are dissatisfied with the way a business is run, or wish to redeploy the assets of the enterprise in a new project, it is difficult to see how it can be efficient to restrain them from doing so.

If majority investors run the risk of being prevented from reorganising a business:

• existing shareholders are less likely to spend time and money exploring methods of improving the company's performance, where minority shareholders may not support the change or may demand a disproportionate payment as the price of their support;

47 This is the standard applied by the Delaware courts, as discussed above. It is also the standard applied by the

English courts, and in New Zealand (in a somewhat diluted form) prior to enactment of the 1993 legislation.

28 (1996) 26 VUWLR

• new investors who believe a company's assets are underutilised are less likely to enter the market for control of that company, to the detriment of would-be sellers and at the cost of reduced incentives for all managers.

These problems are aggravated if there is also a risk that the majority will be unable to sell because the market is insufficiently liquid: this is a common difficulty in the case of closely held and mid-sized corporations. The cost of funds for corporations generally is likely to increase as a result of such risks.

On the other hand, if a change in company direction is so great that it cannot fairly be said to have been within the contemplation of the minority investors at the time they bought into the company, they should not be forced to accept the change in rules part way through the game.

It follows that injunctive relief is unlikely to be appropriate to prevent majority-approved action. Nor would damages be an appropriate remedy, since this would give the minority an incentive to wait to see how the majority's plans turned out, accept them if they went well, and sue for compensation otherwise. If a majority is to have the right incentives to use corporate assets in the most productive way possible, meaning by that the project with the highest net present value, the minority cannot be permitted to take a risk-free ride on the majority's coat-tails.

The appropriate remedy for the disaffected minority seems to be an immediate election to exit at a fair price which does not take into account the decision of the majority, for better or worse. Dissolution of the company would achieve a similar freedom for the majority to use its assets as it thinks fit, and cashing out for the minority, but at a much higher cost to all concerned. Dissolution seems to be a sensible remedy only if the company or the majority is not able to meet the cost of simply buying out the minority.

As well as meeting any "fair treatment" concerns in relation to minorities in circumstances of this kind, there are persuasive arguments that the appraisal remedy plays an important role ex ante in ensuring that control transactions increase value.48

The economic rationale for providing an appraisal or buy-out remedy is strong, and its spread has been significant. In 1968 the author of the International Encyclopaedia of Comparative Law noted (with approval) the existence of the remedy in Argentina, Italy and the US, and in some limited circumstances in England and Germany.49 His comment that "it seems to be growing in influence" has proved accurate: these countries have since been joined by many others including Canada, New Zealand, other countries which have 48 Easterbrook and Fischel, above n 22, ch 6.

49 Above n 42, Vol XIII ch 6 paras 4, 106-111.

29

followed the Canadian model, Poland, and other East European countries. The trend seems likely to continue.

9 Final comments

In this paper I have sought to identify elements of a trend I perceive towards a more facilitative model for core corporations law. Although details of corporations laws differ substantially from jurisdiction to jurisdiction, the direction of reform appears somewhat similar. This can be attributed to a number of factors, but principally to:

• a greater focus by those responsible for reform in this area on the common economic goals served by corporations law in all countries. An understanding of the economic purpose of corporations law sheds considerable light on some longstanding assumptions in this field;

• the influence of reforms in other countries, and restatements by scholars and law reform bodies. Much of this scholarship itself embodies a more rigorous and economically coherent approach to corporations law, reinforcing the first factor mentioned above.

The movement towards a facilitative model of corporations law is, as the second point illustrates, a self-reinforcing process which can be expected to become even more widespread and rapid in years to come.

Vers une harmonisation possible des conceptions du droit des sociétés : Analyse des points de convergence.

Dans un domaine du droit qui n'a que rarement fait l'objet de conventions internationales, et en postulant néanmoins l'existence effective d'une tendance à l'harmonisation des règles relatives aux droit des sociétés dans chaque droit national pour tenir compte des nouvelles donnes du commerce mondial, l'auteur s'attache à démontrer que l'explication du phénomène réside à la fois dans la prise en compte de la place maintenant dévolue à l'économie dans le droit des société d'une part, et dans la redefinition des fonctions conférées à ces règles d'autre part.

Si l'on ne considère que les seuls fondements actuel du droit des sociétés, deux caractéristiques fondamentales apparaissent: le fractionnement de la propriété du capital dans des actions ou parts sociales, et ensuite la limitation de la responsabilité des propriétaires du capital social de telle sorte que leurs capitaux ne sont que partiellement affectés. Sur ce dernier point, il est important de se rappeler que la notion de risque et sa prise en charge font partie intégrante des fondements du droit des sociétés, de telle sorte

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que toutes tentatives tendant à empêcher cette prise de risques ne seraient pas sans conséquences néfastes sur l'institution du droit des sociétés.

A défaut de véritable coopération internationale dans le domaine du droit des sociétés, on s'aperçoit cependant que depuis une dizaine d'années, quelques initiatives ont été prises à une échelle régionale. Bien entendu, le meilleur exemple, reste le rappel des dispositions du Traité de Rome ainsi que des diverses directives qui l'on suivies et qui toutes ensemble se réclament ouvertement d'une volonté d'harmonisation des règles régissant le droit des sociétés des pays membres de la CEE.

Deux autres exemples, méritent attention. Tout d'abord la réglementation du CARICOM relative au marché commun des pays de la zone caraïbe. Ensuite, et plus symptomatique des tendances actuelles dans ce domaine du droit, toute la législation nord américaine qui d'un état fédéral à l'autre tend maintenant à être uniforme, suivant en cela les règles préconisées par l’Etat du Delaware dont l’influence s’est faite ressentir sur l’ensemble des Etats Unis d'Amérique.

Par contraste, les pays du Commonwealth britannique échappent à cette logique. Ainsi bien que la New Zealand Law Commission ait relevé que des pans entiers de la législation des sociétés avaient des implications internationales (en matiere de faillite, ou encore d'investissements internationaux notamment), elle a cependant indiqué que cela ne voulait pas pour autant dire que le besoin d'harmonisation soit absolument nécessaire. Dès lors que les règles de fonctionnement des sociétés commerciales sont sans réelle influence sur les opérations commerciales qu'elles réalisent entre elles, le besoin d'une harmonisation au plan internationale ne se fait guère sentir.

Reste toutefois que des raisons objectives militent pour la prise en compte d'une harmonisation. Si l'exemple américain semble conforter cette analyse, il ne faut pas néanmoins en tirer de conséquences trop générales.

En effet l'absence de véritable compétition sur le plan international pour attirer l'immatriculation des sociétés commerciales dans un pays plutôt qu'un autre, limite singulièrement la portée de l'expérience américaine.

Une autre explication de l'harmonisation des différentes règles du droit des sociétés, tient à la prise en compte par le législateur des fonctions remplies par les sociétés commerciales dans l'économie d'un pays donné.

Ceci étant, plusieurs domaines particuliers du droit des sociétés peut être affecté par cette nécessaire harmonisation des règles sur le plan international. On citera notamment la formation du capital de la société, les règles actuelles dans les pays de Common Law ne sont pas aussi protectrices que l'apparence voudraient le laisser croire et un investisseur étranger pourrait être induit en erreur. Une harmonisation avec les législations plus

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protectrices aux investisseurs doit donc être envisagée. Les règles de distribution des dividendes, tout comme celles relatives aux organes dirigeants de la société et leur responsabilité doivent aussi faire l'objet d'une harmonisation internationale.

Le succès de toutes reformes d’ensemble entreprises dans ce domaine, repose sur la prise en considération deux facteurs fondamentaux:

Le premier d’entre eux est la prise de conscience par le législateur que les sociétés commerciales obéissent au delà des frontières à des objectifs communs. Il s’agira ici d'intégrer le concept de culture des entreprises multinationales dans le droit.

Le second facteur, relève plus de l'ouverture d’esprit nécessaire pour entreprendre de telles reformes. En effet ne devront pas être négligées les expériences similaires déjà entreprises dans d’autres pays, ainsi que les analyses critiques qui en sont faites par la doctrine.

1

LA PROTECTION AUX ÉTATS-UNIS DES OEUVRES D'ART Jane Ginsburg*

Les États-Unis sont un marché important d'oeuvres d'art, non seulement pour la vente des tableaux, mais aussi pour l'exploitation de reproductions et d'adaptations des images. Par exemple, en dehors des reproductions traditionnelles telles que celles contenues dans des catalogues et livres d'art et des reproductions sous forme de cartes postales et affiches, une oeuvre d'art originairement conçue comme une expression des beaux arts peut s'exploiter telle par exemple une sortie de bain, du papier peint, voire un décor de poubelle. Dans quelle mesure un artiste peut-il être rémunéré ou même s'opposer à l'exploitation commerciale de son oeuvre aux États-Unis?

La loi sur le droit d'auteur des États-Unis de 1976 octroie aux auteurs les droits exclusifs de reproduction, d'adaptation (droit exclusif d'autoriser la confection d'oeuvres dérivées), et de représentation (17 USC § 106). Les auteurs protégés comprennent les créateurs d'oeuvres "picturales, graphiques et sculpturales". Ces oeuvres recouvrent les oeuvres des beaux arts traditionnels, ainsi que les photographies, mais ne comprennent pas les oeuvres d'art appliqué. Ces dernières ne sont protégées que dans leurs éléments décoratifs, et seulement dans la mesure où ceux-ci peuvent se détacher de l'aspect fonctionnel de l'objet (17 USC § 101). En revanche, l'auteur d'une oeuvre picturale, graphique ou sculpturale est investi du droit exclusif d'autoriser la reproduction de son oeuvre sur ou dans un objet fonctionnel (17 USC § 113).

Ainsi, lorsqu'il s'agit d'oeuvres d'art (à l'exception de l'art appliqué), les exploitations mentionnées ci-dessus appartiennent en principe au monopole de l'artiste. Cependant, l'oeuvre d'art ne pourrait bénéficier du monopole aux États-Unis que si elle est protégée par la loi américaine. En plus, même si l'oeuvre est protégée, pour que l'artiste bénéficie de cette protection, il faut qu'il soit titulaire du droit d'auteur. Or, l'existence et la titularité de cette protection aux États-Unis s'avèrent délicate en matière d'oeuvres d'art. Les difficultés découlent de la loi américaine, et notamment de la loi en vigueur jusqu'à 1978 (date d'entrée en vigueur de la loi actuelle de 1976).

* Professeur, Columbia University School of Law.

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La protection de l'oeuvre d'art dépendra tout d'abord de la date de la création ou de la publication de l'oeuvre, puisque celles-ci détermineront la loi applicable dans le temps. La loi américaine a été refaite en 1976, puis de nouveau modifiée en 1989 et 1990. Le régime de la loi antérieure, celle de 1909, est sensiblement différent de celui de la loi actuelle. Cependant, c'est la loi de 1909 qui déterminera la protection de toute oeuvre publiée avant 1978. Ainsi, il faut d'abord analyser le régime de 1909, régime assez peu favorable aux auteurs, en raison notamment des règles relatives aux formalités et à la durée de protection (I), pour aborder ensuite les changements effectués en 1976 jusqu'à l'introduction en 1990 d'une loi - de portée très réduite - reconnaissant le droit moral des auteurs de certaines oeuvres des beaux arts (II).

I L'ancien régime

Le régime de la loi de 1909 dressait plusieurs obstacles à la protection efficace aux États-Unis des oeuvres d'art. Les droits de l'artiste pouvaient disparaître faute d'accomplissement de formalités préalables à la protection (B), ou bien, faute de renouvellement du délai de protection (C). Dans les deux cas, l'artiste défaillant perdait les droits sur son oeuvre qui tombait alors au domaine public. Restait un autre piège, celui de la titularité des droits sur l'oeuvre, puisque, selon le droit de certains Etats fédérés, le transfert de l'exemplaire physique unique d'une oeuvre d'art, tel qu'un tableau, entraînait une présomption de cession du droit d'auteur en faveur de l'acheteur de l'oeuvre (A).

A Titularité du droit d'auteur de l'oeuvre d'art

Bien que la loi américaine prévoie clairement aujourd'hui la distinction entre la propriété de l'exemplaire (par ex le tableau), et la propriété incorporelle du droit d'auteur, en disposant que la vente de l'exemplaire n'entraîne pas en soi la cession du droit d'auteur (17 USC § 202), l'identification du titulaire du droit d'auteur quant aux exemplaires vendus avant 1978 est beaucoup plus hasardeuse. La loi de 1909 prévoyait aussi une distinction entre la propriété de l'objet et celle du droit d'auteur (§ 27), mais cette loi ne s'appliquait qu'aux oeuvres publiées. Si l'oeuvre était inédite, c'était le droit des Etats fédérés qui régissait la titularité du droit d'auteur. Or, les juridictions de certains Etats fédérés, notamment celle de New York, avaient énoncé une présomption de cession du droit avec la vente de l'oeuvre. Il incombait à l'artiste de réserver son droit d'auteur, ou du moins d'apporter quelque limites aux prérogatives de l'acheteur. (Voir, par ex Pushman v New York Graphic Soc 287 NY 203. En 1964, le législateur de New York a adopté une loi instaurant la présomption inverse; cependant, pour les ventes antérieures à 1964, la question de la titularité continue de se poser.) Sans cette réserve de la part de l'artiste, dans plusieurs Etats, la titularité du droit d'auteur se transférait à l'acheteur ensemble avec le tableau.

B Formalités

Selon la loi de 1909, l'oeuvre, lors de sa publication, devait porter la mention de réserve; c'est à dire le c. Si l'auteur n'apposait pas la mention, l'oeuvre tombait dans les domaine public. En revanche, tant que l'oeuvre restait non publiée, aucune formalité n'était exigée. La question s'impose alors: en droit américain, qu'est-ce qu'une "publication" d'une oeuvre d'art?

1 Publication

La notion générale de publication selon la loi de 1909 était interprétée par les juridictions comme visant la diffusion générale au public des exemplaires de l'oeuvre. Si cette notion sert à comprendre la publication en matière d'oeuvres littéraires, elle apporte peu à la compréhension de la publication d'oeuvres littéraires, elle apporte peu à la compréhension de la publication d'oeuvres d'art. En effet, qu'en est-il lorsque l'oeuvre n'existe qu'en un exemplaire? Certaines décisions ont retenu la publication même dans l'hypothèse de vente de copie unique, mais les autorités judiciaires sont divisées. Voir en général Academy of Motion Picture Arts and Sciences v Creative House Promotions, Inc 944 F 2d 1446 (9th Cir 1991) (à propos de la publication de la statuette "Oscar").

Si l'oeuvre est exposée au public, par exemple dans un musée ou dans une galerie, y a-t-il "publication"? Là encore, les autorités judiciaires ne sont pas unanimes, mais certains juges ont statué en faveur d'une publication lorsque l'oeuvre était exposée de telle manière que n'importe quel membre du public pouvait reproduire l'oeuvre. Ainsi, par exemple, un tribunal de district de Chicago a estimé que l'exposition publique d'une maquette d'une sculpture monumentale de Picasso, sans qu'il ne soit interdit au public de prendre des photographies ou de dessiner la maquette, entraînait la publication de l'oeuvre, avec la conséquence que l'oeuvre était jugée tombée dans le domaine public, puisqu'elle était "publiée" sans mention de réserve. Voir Letter Edged in Black Press v City of Chicago 320 F Supp 1303 (ND I11 1970).

La diffusion de reproductions de l'oeuvre, par exemple dans des livres d'art ou sous forme de cartes postales, équivaut-elle à une "publication"? Là encore, l'unanimité fait défaut. Certains estiment qu'il y a publication de l'image, alors que d'autres rappellent que le livre d'art ou la carte postale ne communique pas l'oeuvre originale, amis une oeuvre dérivée, et que la publication d'une oeuvre dérivée n'entraîne pas la publication de l'oeuvre de base. Sur ce point, l'on pourrait discerner l'existence de la "publication" selon ses conséquences. Lorsque l'auteur souhaitait qu'il y ait publication du tableau par moyen de la publication d'un livre ou d'une autre oeuvre reproduisant le tableau, normalement il apposait la mention de réserve sur le livre ou autre oeuvre. Cette mention permettait de conserver globalement le droit d'auteur sur tout le contenu du livre, et, selon le Copyright Office, la publication était considérée effectuée pour tout le contenu, y compris le tableau.

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En revanche, si l'oubli de l'auteur aurait conduit à la chute de permettait l'application du principe selon lequel les juges ne doivent pas retenir une qualification de "publication" si le résultat était de faire perdre à l'auteur son droit. Voir Academy of Motion Picture Arts & Sciences, supra. Dans ce cas, un tribunal pouvait décider que la publication sans mention de réserve, par exemple, de cartes postales du tableau n'impliquait pas la perte de protection de l'oeuvre elle-même.

2 Apposition de la mention de réserve

Si l'oeuvre était estimée "publiée" avant mars 1989, date d'entrée en vigueur de l'adhésion des États-Unis à la Convention de Berne, l'apposition de la mention s'imposait. En ce qui concerne les publications ayant lieu entre 1978 et mars 1989, l'obligation de la mention s'appliquait non seulement aux oeuvres publiées aux États-Unis, mais aussi à celles publiées partout dans le monde. Ainsi, une Cour d'appel, interprétant la disposition de la loi américaine qui prévoit la mention à partir de la publication "aux États-Unis ou ailleurs" 17 USC § 401(a), a statué que, pour bénéficier du droit d'auteur aux États-Unis, un auteur japonais était tenu d'apposer la mention lors de la première publication au Japon, et cela même lorsqu'aucune mention n'était exigée par la loi Japonaise, et que l'oeuvre n'était pas encore commercialisée aux États-Unis. Voir Hasbro Bradley v Sparkle Toys 780 F 2d 189 (2d Cir 1985).

En ce qui concerne les oeuvres publiées avant 1978, et donc régies par la loi de 1909, les autorités sont divisées quant à la nécessité d'apposer la mention lors d'une première publication en dehors des États-Unis. La Copyright Office soutient que toute oeuvre publiée depuis l'adhésion des États-Unis à la Convention Universelle en 1955 devait porter la mention, quel qu'ait été le lieu de sa première publication. Voir, Compendium of Copyright Office Practices 8.2.1 (1973). En revanche, certaines décisions récentes remettent cette doctrine en cause, en soutenant que l'obligation de la mention ne s'appliquait, selon la loi de 1909 qu'aux exemplaires diffusés aux États-Unis. Voir, Eisen, Durwood & Co v Tolkein 794 F Supp 85 (SDNY 1992).

C Durée de la protection

Selon la loi de 1909 et les dispositions transitoires de la loi de 1976, le calcul de la durée de la protection dépend en premier lieu du statut de l'oeuvre, à savoir si elle a été publiée ou non.

1 Oeuvres créés, mais non publiées avant 1978

Les oeuvres n'ayant pas fait l'objet d'une publication avant 1978 sont protégées durant la vie de l'auteur et jusqu'à cinquante années suivant sa mort. Cependant, même si l'auteur est mort avant 1944, la loi de 1976 prévoit la protection de ses oeuvres inédites

jusqu'à 2002, et, si elles sont publiées entre 1978 et 2002, elles bénéficieront d'encore 25 ans de protection.

2 Oeuvres publiées avant 1978

Les oeuvres publiées avec mention de réserve sous le régime de la loi de 1909 bénéficiaient d'une période de 28 ans de protection, renouvelable pour une période supplémentaire de 28 ans. (Une disposition transitoire de la loi de 1976 à ajouté 19 ans à la seconde période de protection, pour faire un totale de 75 ans à compter de la date de la première publication.) Si l'auteur n'inscrivait pas l'oeuvre au Copyright Office et ne demandait pas le renouvellement de l'inscription durant la 28 eme année de protection, l'oeuvre tombait dans le domaine public à l'expiration de 28 ans à compter de la date de première publication - quel qu'ait été le lieu de cette publication. L'on peut noter que l'inscription de l'oeuvre auprès du Copyright Office n'était pas préalable à la protection pendant la première période, mais était nécessaire pour obtenir un second délai de protection, puisque celui-ci dépendait du renouvellement de l'inscription. Cette inscription, néanmoins, pouvait s'effectuer même durant la 28 ieme année de protection.

Ainsi, toute oeuvre publiée avant 1918 est déjà dans le domaine public aux États-Unis, la durée maximale des oeuvres publiées et renouvelées dans le cadre de la loi de 1909 étant de 75 ans. Toute oeuvre publiée entre 1918 et 1963 a dû faire l'objet d'un renouvellement au Copyright Office. A défaut du renouvellement, l'oeuvre est déjà dans le domaine public aux Etats Unis. Pour toute oeuvre publiée entre 1964 et 1978, une loi de 1992 en prévoit le renouvellement automatique. Ainsi, ces oeuvres ne tomberont pas dans le domaine public faute de renouvellement. Les oeuvres publiées à partir de 1978 bénéficient d'une durée unique de la vie de l'auteur plus 50 ans.

II La Protection des oeuvres d'art selon la loi actuelle

A Droit Patrimonial

Le détenteur du droit d'auteur sur une oeuvre d'art bénéficie du droit exclusif de reproduction, quelle que soit la forme de l'exploitation. Par exemple, la reproduction non autorisée d'une oeuvre sculpturale est une contrefaçon lorsqu'un tiers la reproduit en tant que sculpture, mais également lorsqu'un tiers la reproduit en tant qu'un élément d'un objet fonctionnel, tel qu'un corps de lampe. Ainsi, la loi octroie aux détenteurs du droit d'auteur le contrôle su l'exploitation commerciale, aussi bien que sur l'exploitation "artistique" de l'oeuvre d'art. Mais, si une oeuvre d'art est protégée contre l'exploitation "industrielle" non autorisée, il ne s'ensuit pas que tout objet industriel soit l'objet du droit d'auteur. La loi américaine n'applique pas la règle de "l'unité de art". Au contraire, elle essaie de distinguer entre, d'une part, une oeuvre "picturale, graphique ou sculpturale", faisant l'objet du droit d'auteur, et, d'autre part, un objet fonctionnel dont la forme peut avoir des

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qualités esthétiques, mais qui ne relève que du domaine des dessins et modèles. Comme on la verra, la mise en oeuvre de cette distinction ne s'avère pas totalement heureuse (1).

En plus, même si l'oeuvre rentre dans le domaine du droit d'auteur, ce n'est pas toujours son créateur que la loi réputera "l'auteur" et détenteur du droit d'auteur. Le régime des "works made for hire" peut priver certains artistes, notamment des salariés et, dans certaines hypothèses, des artistes de commande, de la titularité du droit d'auteur, en faveur de l'employeur ou du donneur d'ordre (2).

Enfin, quant à la protée de la protection, il a déjà été noté que l'oeuvre est protégée contre la reproduction non autorisée, y compris par moyen du "merchandising". Cependant, pour que la protection du droit d'auteur joue, il faut que l'objet de la reproduction ait été une oeuvre particulière; normalement, le droit d'auteur ne protège pas contre l'exploitation non autorisée du "style" d'un artiste. Néanmoins, le droit aux "oeuvres dérivées" peut être conçu comme recouvrant des variations visuels sur un thème esquissé par le premier artiste-peintre. En plus, une décision récente en matière de concurrence déloyale indique que, dans une certaine mesure, un artiste peut interdire l'exploitation d'une oeuvre tierce qui ressemble aux oeuvres de l'artiste, mais qui n'en est pas en fait une copie (3).

1 Objet de la protection

Pour qu'une oeuvre d'art soit recouverte par le droit d'auteur aux États-Unis, il faut qu'elle n'ait pas de caractère fonctionnel. La loi définit une oeuvre fonctionnelle (dénommée "article d'utilité") comme suit:

L'article d'utilité est un article qui remplit une fonction utilitaire intrinsèque ne consistant pas seulement à présenter l'apparence d'un article ou à transmettre des informations. L'article qui fait habituellement partie d'un article d'utilité est considéré comme un "article d'utilité".

Lorsque l'oeuvre possède des caractéristiques à la fois fonctionnelles et artistiques, les éléments artistiques ne seront protégés par le droit d'auteur que s'ils sont "séparables" de l'aspect fonctionnel. La notion de la "séparabilité" en droit d'auteur américain n'est pas facile à saisir, ni pour les juridictions, ni pour la doctrine. Voir en général, Shira Perlmutter Conceptual Separability and Copyright in the Designs of Useful Articles 37 J Copyright Soc'y 339 (1990). Il est certain qu'il s'agit d'une conception plus restrictive que celle de la "multiplicité des formes", selon laquelle la forme d'une oeuvre fonctionnelle serait protégée dès lors qu'il existe un pluralité de formes alternatives qui permettraient à l'oeuvre de fonctionner. Pour être "séparables", il semblerait nécessaire que les éléments artistiques puissent se détacher physiquement de l'objet utilitaire. Bien que la doctrine et certaines décisions essaient de mettre en oeuvre la notion d'une "séparabilité conceptuelle", qui serait plus large que la "séparabilité physique", les autorités n'ont pas réussi à définir cette

notion de façon précise, ni de façon qui recueille l'approbation des juges. Il en résulte que plusieurs oeuvres du "design" ne bénéficient pas du droit d'auteur.

2 Titulaires du droit d'auteur sur les oeuvres d'art

Selon le régime américain des "works made for hire", le statut d'auteur et la titularité du droit d'auteur sur une oeuvre créée par un salarié, ainsi que sur certaines oeuvres de commande, reviennent non à l'artiste qui a créé l'oeuvre, mais à son employeur, ou à son donneur d'ordre. La plupart des artistes ainsi déchus de leurs droits travaillent dans les domaines des arts graphiques et de la photographie, et notamment dans les secteurs de la presse et de la publicité. Ces artistes sont soit des salaries, soit des créateurs agissant sur commande.

(a) Oeuvres des salariés

Mais il faut bien distinguer entre des salariés, et oeuvres de commande. Le droit d'auteur sur une oeuvre de salarié appartient automatiquement à l'employeur, dès lors qu'une relation d'emploi est acquise (même s'il n'y a pas de contrat écrit), et que l'oeuvre a été créée dans l'exercice des fonctions du salarié. Ainsi, les artistes embauchés par des cabinets, notamment par des agences de publicité, ne bénéficient pas du droit d'auteur.

Néanmoins, il est important de contrôler l'existence d'une véritable relation d'emploi. Depuis la décision de la Cour suprême dans Community for Creative Non Violence v Reid 490 US 730 (1989) où la Cour a nié la qualification de "salarié" à un sculpteur qui avait créé une oeuvre selon la commande d'un organisme de bienfaisance pour les sans-abri, les juridictions inférieures refusant de reconnaître la qualité d'employeur à une personne dès lors que cette dernière aura eu le droit d'exiger et de surveiller la création de l'oeuvre. Selon la jurisprudence de la Cour Suprême, il faut la présence de plusieurs éléments avant qu'une relation d'emploi ne soit constituée. Les juges du fond ont retenu qu'une telle relation se caractérise notamment par le paiement par le prétendu employeur des frais pour la sécurité sociale de celui qu'il prétend être son employé. Voir, par exemple, Marco v Acccent Pub 969 F 2d 1547 (3d Cir 1992), rejetant la qualification de "salarié" d'un photographe que travaillait souvent pour une revue, mais qui travaillait à son propre atelier avec ses propres moyens techniques, et dont la revue ne payait jamais de sécurité sociale.

(b) Oeuvres de commande

Pour qu'une oeuvre de commande soit réputée une "work made for hire", il faut que cette oeuvre rentre dans certaines catégories énumérées de façon limitative dans la loi, et en plus, qu'il y ait un écrit entre le créateur et le donneur d'ordre selon lequel l'oeuvre sera considérée comme une "work made for hire". Les catégories prévues par la loi comprennent les oeuvres collectives, telles que les journaux et les revues. Elles recouvrent

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aussi les oeuvres audiovisuelles, ainsi que les illustrations accompagnant les oeuvres littéraires. La loi ne précise pas, cependant, ni la forme ni le moment de rédaction de cet écrit. Deux décisions récentes ont interprété la loi en faveur des artistes-créateurs, en statuant que l'écrit doit s'établir au début de la commande. Voir, Schiller & Schmidt, Inc v Nordisco Corp 969 F 2d 410 (7th Cir 1992); Playboy Ents v Dumas (SDNY Sept 9, 1993). Dans cette dernière décision, le tribunal a également repoussé l'argument du donneur d'ordre selon lequel l'écrit requis par la loi pouvait se constituer par un cheque sur lequel le donneur d'ordre avait porté la mention que l'encaissement du cheque par l'artiste valait son accord que l'oeuvre serait réputé "work make for hire". Ainsi, par exemple, pour qu'une photographie devienne "work made for hire", il faudrait que les parties se mettent d'accord, avant la création de l'oeuvre, sur sa titularité, et qu'ils consacrent cet accord par un écrit convenable.

3 Portée de la protection

L'artiste (ou le détenteur du droit d'auteur) peut interdire l'exploitation non autorisée de son oeuvre par moyen de reproduction classique (par exemple, publication dans un livre, affiches, cartes postales), aussi bien que par le "merchandising", c'est à dire l'incorporation de l'image sur une variété de produits commerciaux, tels que t-shirts, serviettes de bain, peluches, etc. Voir 17 USC § 113. Mais qu'en est-il lorsqu'un tiers exploite non une oeuvre particulière de l'artiste, mais plutôt son style artistique? Prenons deux cas de figure. Dans le premier, supposons que l'artiste a créé une oeuvre dont un tiers reprend certains éléments, par exemple les personnages ou un décor, pour les incorporer dans une oeuvre tierce. Dans le second, supposons la confection d'une image "style Picasso" commercialisée sur des foulards. S'il avait été question de l'apposition sur un foulard d'une reproduction des "demoiselles d'Avignon", la succession Picasso aurait été en droit de s'y opposer. Mais lorsqu'il s'agit d'une image que ressemble à la production artistique de Picasso, mais qui ne correspond pas en fait à aucune de ses oeuvres, le droit d'auteur s'étend-il aussi loin?

Le premier cas s'inspire de la décision du tribunal fédéral de district de New York dans l'affaire Steinberg v Columbia Pictures 663 F Supp 706 (SDNY 1987). En l'occurence, un dessin de New York, reproduisant quelle vision un habitant myope de New York peut avoir de sa ville (à savoir, avec deux rues du côté Ouest de la ville rendues dans tous leurs détails, et le reste du monde en rétréci) avait été repris et puis remanié pour une affiche du film "Moscou à New York" (l'affiche montrait la même perspective visuelle du myope, mais avec deux rues du côté Est de la ville, et le reste du monde en rétréci). Le tribunal a estimé que le défendeur s'était approprié non seulement l'idée d'une perspective myope, mais aussi la façon particulière dont l'artiste Steinberg dessinait cette perspective, le défendeur ayant non seulement copié le style de Steinberg, mais ayant aussi copié certains détails précis de l'oeuvre de Steinberg.

Le second cas s'inspire de la décision dans l'affaire Romm Art v Simbha Int'l 786 F Supp 1126 (EDNY 1992), où il s'agissait de l'imitation par une artiste nommé Patricia du style de l'artiste Tarkay dans sa série d'affiches "Femmes aux cafés". Les deux séries d'affiches montraient des femmes assises dans de différents cafés. L'éditeur de Tarkay avait agi non en contrefaçon du droit d'auteur, mais en concurrence déloyale. Il soutenait que vu la proximité des oeuvres de Patricia au style de Tarkay, il y avait un risque de confusion de la part du publique entre les oeuvres des deux artistes, et qu'une oeuvre de "Patricia" pouvait donc être prise pour un "Tarkay". Le tribunal a donné raison à l'éditeur de Tarkay. En effet, le sujet des deux séries d'affiches, ainsi que leur style se ressemblent. Néanmoins, la protection du "style" d'un artiste, que ce soit par le droit d'auteur ou par le droit de la concurrence déloyale, peut être considéré une démarche contestable. D'ailleurs, l'on peut observer que le style de Tarkay ressemble à un Matisse croisé avec un Modigliani. Devrait-on pour autant en conclure que Tarkay est redevable des droits d'auteur à ces deux artistes antérieurs?

B La protection du droit moral des auteurs des oeuvres d'art depuis l'adhésion des États-Unis à la Convention de Berne

Si lors de l'adhésion à la Convention de Berne, les Etats Unis n'ont pas adoptée une protection fédérale explicite du droit moral des auteurs, ils ont, en 1990, rajouté à la loi de 1976 des dispositions spéciales prévoyant les droits d'intégrité et de paternité de certains auteurs des oeuvres des beaux-arts). Suite à plusieurs années de tentatives de consacrer le droit moral des auteurs, le législateur américain a voté une loi instaurant les droits de paternité et d'intégrité des auteurs de certaines oeuvres graphiques, sculptural, et photographiques. Cependant, le domaine de cette loi est extrêmement réduite (1), ainsi que sa portée (2).

1 Domaine de la protection du droit moral

Ne sont admises à la protection que certaines oeuvres d'art, à savoir, les oeuvres graphiques et sculpturales en copies uniques ou en série limitée à 200 exemplaires, signés et numérotés. Les photographies sont admises, mais seulement s'il s'agit des images faites dans un but d'exposition, et limitées à 200 exemplaires, signés et numérotés. Le texte de la loi comporte plusieurs exclusions du domaine de la protection, notamment, toute oeuvre de salarié (work made for hire), et toute reproduction de l'oeuvre (en dehors de la série limitée).

2 Protée de la protection du droit moral

Le domaine restreint de la loi a des incidences sur sa portée. L'exclusion des reproductions d'oeuvres d'art du champ d'application de la loi a pour conséquence de limiter l'action en violation du droit d'intégrité aux atteintes contre l'exemplaire même. Ainsi, en supposant que Marcel Duchamp avait acquis La Joconde et y avait apposé la

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moustache (et dans l'hypothèse où le tableau n'était pas dans le domaine public), il y aurait eu méconnaissance de la loi américaine (à supposer aussi sa compétence). Mais, puisque Duchamp avait d'abord établi une copie de la Joconde, et avait peint la moustache sur la copie, il ne peut y avoir violation de la loi américaine sur le droit moral (en revanche, si la Joconde avait bénéficié du "copyright" l'établissement de la copie par Duchamp aurait violé le droit patrimonial sur l'oeuvre).

Il existe d'autres limitations à la protée de cette loi. D'abord, la loi instaure un régime spécial pour les oeuvres d'art incorporées dans des bâtiments lorsque leurs propriétaires envisagent de détruire ou de modifier le bâtiment. Si les oeuvres sont séparables de l'immeuble, le propriétaire doit notifier à l'artiste de son intention de détruire ou de modifier l'immeuble, afin de permettre à l'artiste de retirer l'objet dans le délai de trois mois, aux frais de l'artiste. Si l'artiste n'enlève pas l'oeuvre dans les trois mois, le propriétaire peut procéder à la destruction ou à la modification de l'immeuble, ensemble avec l'oeuvre. Si l'oeuvre ne peut pas se séparer de l'immeuble, sans être endommagée ou détruite, la loi n'impose pas de limites au droit du propriétaire de l'immeuble pour détruire ou modifier son bien. Cependant, dans cette dernière hypothèse, la loi exige, qu'avant d'installer l'oeuvre dans l'immeuble, l'artiste signe un contrat autorisant l'installation de l'oeuvre et reconnaissant que son retrait ne sera pas possible.

Enfin, la loi permet aux artistes de renoncer à leur droit moral, mais seulement par un écrit, signé, qui précise les circonstances pour lesquelles l'artiste renonce à son droit. Ainsi, en principe, une renonciation globale du droit moral de l'artiste ne sera pas valable. Pour prévenir l'éventualité d'abus, le législateur a demandé au Copyright Office de préparer une étude sur la pratique des renonciations. On peut supposer que si les renonciations deviennent partie intégrante des contrats types en la matière, le législateur reprendra la discussion sur la renonciation.

La durée des droits de paternité et de l'intégrité selon la loi fédérale est la vie de l'auteur, avec un renvoi aux lois des Etats fédérés qui compléteraient la durée en ajoutant les 50 ans après la mort de l'artiste.

The protection of works of art in the United States

The copyright law of the United States of 1976 grants to authors exclusive rights to the reproduction, adaptation (including the exclusive right to authorise the making of derivative works), and of representation (17 USC para. 106). However, a work of art can only benefit from a monopoly position in the United States if it is protected by American law. Furthermore, even if the work is so protected, before there is any benefit of this protection for the artist, it is necessary also that the artist is the holder of the copyright. The existence of entitlement to this protection in the United States turns out to be a very

delicate matter as far as works of art are concerned. The difficulties flow from American positive law particularly that which was enforced until 1978 (the date of the coming into force of the present law of 1976). The protection for a work of art depends first of all on the date of creation of the work and on its publication, since the latter will determine which piece of legislation is applicable. American law was reformed in 1976, then amended in 1989 and 1990 (the amending law of 1990 introduced legislative recognition for the principle of the moral rights of authors). The system under the previous law, that of 1909, is significantly different from that of the present law. However, it is the law of 1909 which will determine the amount of protection given to any work published before 1978.

The system of the law of 1909 presents several obstacles to the effective protection of works of art in the United States. The rights of the artist can disappear because of failure to accomplish the formalities required for protection, or from a failure to renew within the protected period. In both these cases, the artist affected loses rights in the work which then falls into the public domain. There is also another trap; that is the entitlement to rights in works because according to the law of certain states of the federation, the transfer of the sole physical copy of a work of art, such as a painting, includes a presumption of the transfer of the copyright in favour of the purchaser of the work.

The system instituted by the law of 1976 and its subsequent modifications marks a new stage in the protection of works of art in the United States.

As far as property law is concerned, the holder of the copyright in a work of art has the benefit of the exclusive right of reproduction in whatever form. For example, the unauthorised reproduction of a sculptural work amounts to counterfeiting when a third person reproduces it as a sculpture, and also when a third person reproduces it as an element in a functional object such as a lampstand. Thus the law grants to holders of copyright the control over the commercial exploitation of the property as well as the artistic exploitation of a work of art. But if a work of art is protected against unauthorised industrial exploitation, it does not follow that any industrial object can be the subject of copyright. American law does not apply the so-called rule of “the unity of art”. On the contrary, it tries to distinguish between a work which is pictorial, graphic, or sculptural which is the subject of copyright on the one hand, and a functional objects whose form can have aesthetic qualities but which arise only from the field of designs and models on the other hand. The operation of this distinction in practice has not been a particularly happy one.

Though at the time of signing the Bern Convention the United States had not adopted a federal protection which was explicit in respect of the moral right of authors, that was done in 1990 by the addition to the legislation of 1976 of special provisions which dealt with the rights of the integrity and paternity of authors of works in the field of fine arts. After several years of attempts to protect the moral right of authors, the American

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legislator has introduced a law which affirms the rights of paternity and the integrity of authors of certain graphic, sculptural, and photographic works. However, the range of application of this legislation is extremely reduced.

1

TAKING THE OMBUDSMAN CONCEPT INTO THE PRIVATE SECTOR: NOTES ON THE BANKING OMBUDSMAN SCHEME IN NEW ZEALAND Nadja Tollemache OBE*

This paper traces the development of the institution of Ombudsman in New Zealand and comments on the move of the idea from the public to the private sector. In the private sector, developments in New Zealand followed other common law countries. New Zealand appointed its first Banking Ombudsman in July 1992.

New Zealanders pride themselves on some notable examples of social legislation which have taken the New Zealand legal system to the forefront of progress; for example, the granting in 1893 of the suffrage to women, and some innovative family property legislation in the early part of this century. Another such piece of legislation and one that has greatly influenced the whole range of public administration in New Zealand is the Ombudsman Act 1962, which made New Zealand the first English -speaking, common law, commonwealth country in the world to adopt a dispute resolution system that originated in Sweden.

The basic idea behind the system is that the individual, who is in a David and Goliath situation when taking on the immeasurably more powerful public authorities, should be able to turn to an impartial person who can look at complaints about matters of administration, can access all the facts, including departmental files and memoranda, and can decide whether the decision or other act complained of was deficient according to a list of statutory criteria now set out in section 22 of the Ombudsmen Act 1975.1 Not only actions and decisions, but also that most difficult form of maladministration, inaction and delay, are covered.

* Parliamentary Ombudsman 1987-1992; first New Zealand Banking Ombudsman 1992-1995.

1 Parliamentary Commissioner(Ombudsman) Act 1962, now consolidated and amended in the Ombudsmen Act 1975.

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The first test under section 22 is that the act which is the subject matter of the investigation "appears to have been contrary to law".2 The drafting here is significant; an Ombudsman does not make pronouncements on the law- that is the function of the courts- but he or she forms an opinion that something "appears" to be contrary to law. Quite often, in my experience during my term of office from 1987 to 1992, the unlawfulness consisted of charging a member of the public for services which the department or other organisation was legally obliged to provide, without any authority to make such a charge. The newly formed bodies such as state owned enterprises, but also restructured departments, had to be reminded firmly of the constitutional principles that applied to them as much as to any other public body, and that the new general philosophy of "user pays" did not provide them with statutory authority to make specific charges.3

The test of lawfulness is, then, the first of the criteria. Another is whether the action was:4

unreasonable, unjust, oppressive or improperly discriminatory or (and this was the innovative part) was in accordance with a rule of law or a provision of any Act, regulation, or bylaw or a practice that is or may be unreasonable, unjust, oppressive or improperly discriminatory.

It must be remembered that when the Ombudsman Act was passed in 1962, the great development of administrative law through the courts was yet to come; the term "unreasonable" has not been interpreted as incorporating any jurisdictional "Wednesbury" subtleties.5 It meant, and for the Ombudsman's office continued to mean, what ordinary people would think unacceptable. And "discrimination", which has become the focus for much discussion since the passing of the race relations and human rights legislation,6 was 2 Ombudsmen Act 1975, s 22(1)(a).

3 See the Report of the Ombudsmen for the year ended 30 June 1992, page 42.

4 Above n 2, s 22(1)(b).

5 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223 (CA); action for a declaration that a condition imposed by the local authority was ultra vires and unreasonable. Lord Greene MR pointed out that a discretion must be exercised reasonably and gave examples of various meanings of "unreasonable". Of the argument of counsel for the Associated Picture Houses, Lord Greene commented "he is really saying that the ultimate arbiter of what is and is not reasonable is the court and not the local authority..... and in the end he agreed that his proposition......really meant that it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body could have come to". He continued "the effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another … provided they act, as they have acted,within the four corners of their jurisdiction , this court, in my opinion, cannot interfere". The Ombudsman's role is very different and is not confined to jurisdictional unreasonableness but can examine the merits.

6 Race Relations Act 1971, Human Rights Commission Act 1977, New Zealand Bill of Rights Act 1990, Human Rights Act 1993.

then also uncharted territory. It was a bold step to empower the Ombudsman to not only test acts of the administration against these criteria, but also to scrutinise the law and practice on which the acts were based . If the law or practice were found wanting, sections 22(3)(d) and (e) specifically empowered the Ombudsman to recommend reconsideration of such law or practice, and the Ombudsmen have not been slow over the years to carry out that mandate. It is, however, clearly an area where diplomacy and common sense are required since a recommendation impugning the reasonableness of a recently passed and properly considered piece of legislation would not only not be accepted, but would be counterproductive. In areas where the Ombudsmen have particular experience or expertise,7 it would therefore be wiser to point out problems in proposed legislation before it became law.8

Of the other tests under section 22, the test "whether the action was based wholly or partly on a mistake of law or fact"9 seems less remarkable now that the Contractual Mistakes Act 1977 and the Contractual Remedies Act 1979 have accustomed us to remedies for mistake in areas covered by that legislation. But operative mistake even in contracts was very limited in 1962. Yet many administrative decisions, both then and now, especially in the social welfare area, can be made on a mistaken basis and can be particularly traumatic for someone whose benefit is stopped or cut back; even if the mistake is later rectified, the effect of a mistaken benefit cancellation can be disproportionately harsh.

The final criterion under section 22, "that the action was wrong"10 is extraordinarily wide, but there have been few situations where an Ombudsman has had to base a recommendation exclusively on that ground, and naturally the greatest care is taken to support the opinion in such a way that any recommendation based on it is sufficiently persuasive to be accepted.

There is one other basis for action in section 22 which, with the development of administrative law by the courts and the coverage by later legislation,11 has become 7 This was particularly true of matters relating to the Official Information Act 1983 after the demise under the

"sunset clause" (section 53) of the Information Authority, which had been charged with, inter alia, reviewing legislative protection of official information and with recommending changes to make information more accessible and to prevent improper use of personal information; Official Information Act1982, ss 38 and 39.

8 See Reports of the Ombudsmen for the years ending 30 June 1992 (at pages 16 and 49); 1993 (at pages 15, 49) 1994(at page 43).

9 Above n 2, s.22(1)(c).

10 Above n 2, s 22(1)(d).

11 Of particular importance has been the right to reasons for decisions under s 23 of the Official Information Act 1982 and s 22 of the Official Information and Meetings Act 1987.

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perhaps less vital but still provides an enormously important statement about administrative standards. It is that:12

in the making of the decision or recommendation, or in the doing or omission of the act, a discretionary power has been exercised for an improper purpose or on irrelevant grounds or on the taking into account of irrelevant considerations, or that...reasons should have been given for the decision.

I believe there is nothing that concentrates the mind of an official more wonderfully than to have to give reasons for a decision.

While much more could be said about the basis for action on which Ombudsmen carry out their functions, the statutory criteria in section 22 have been picked out because they sum up the aim of the whole exercise: to achieve fairness in administration.

Since 1962 the Ombudsman system of complaints resolution has spread world-wide, and many countries have taken note in setting up their own schemes of the New Zealand legislation and experience. While there are variants to suit conditions in different countries, there are some typical characteristics. Access to the Ombudsman is usually direct, informal and free of charge. The Ombudsman's procedures are non-adversary and non-technical and reasons are given for whatever is decided.13 Recourse to the Ombudsman is only after the respondent department or other organisation has been given the chance to put its own house in order; in other words, it is a last resort after internal complaints procedures and appeals have failed to provide a resolution.14 If the Ombudsman does find after investigation that there has been some maladministration, there is usually a wide range of possible recommendations that would put matters to rights.15

The success of Ombudsmen schemes in the public sector in a wide range of countries, and particularly their cost-effectiveness as a dispute resolution mechanism, has been such that it is not surprising that the system has been transferred to the private sector; the issue this brief paper seeks to raise for consideration is whether the concept of "fairness" has suffered a sea-change in being transmuted from the public to the private sector. But first, some background on the transfer of the Ombudsman idea to the private sector must be sketched in.

12 Above n 2, s 22(2).

13 Above n 2, ss21 and 22(3)(g).

14 Above n 2, ss13(7)(a) and 17 (1)(a).

15 Above n 2, s 22(3).

In this matter New Zealand cannot claim to have led the way. The first private sector Ombudsman in New Zealand, the Banking Ombudsman, is an office that came into operation on 1 July 1992 and was closely modelled on similar offices in the United Kingdom and Australia.

In the United Kingdom the starting point for use of a private sector Ombudsman was unquestionably the creation in 1981 of the Insurance Ombudsman Bureau. It was the success of a self regulatory but independent Ombudsman in the insurance industry that gave the impetus for other commercial sector Ombudsman schemes for banks, building societies, investment advisors falling under the FIMBRA and IMRO umbrella, and pensions.

The United Kingdom Banking Ombudsman became operational in 1986 and there is little doubt there was an element of a defensive pre-emptive strike in the setting up of the office: after the 1986 Financial Services Act the banks were faced with the option of either reforming their own grievance resolution procedures for customers or the unpalatable possibility of an imposed, tough, statutory regime.16 Similarly in Australia, where relationships between banks and customers had fallen to a low ebb, the proposal for an independent dispute resolution mechanism intermediate between the institutions and the courts was endorsed by the Treasury and the Trade Practices Commission.17

In New Zealand the setting up of the Banking Ombudsman scheme proceeded along a slightly different path. The first difference was a matter of sequence of events; in New Zealand the Code of Banking Practice came into operation before any Ombudsman was appointed,18 which had a number of effects. First, the Code itself made membership of the Ombudsman scheme obligatory to those banks that adhered to the Code,19 and there was therefore no "opting in" after the scheme had commenced as there was in the UK and in Australia; as a result all the participating banks could be brought in by the Banking Ombudsman to co-operate in discussions on the best procedures to put in place. Under the Code, the banks were also obliged to put in place internal complaints procedures. Secondly, since the Code was already in place, the first Banking Ombudsman was not involved in the process of drafting it, which elsewhere has given rise to considerable 16 The Jack Committee suggested that the industry sponsored scheme be supplanted by a statutory one; Banking

Services: Law and Practice Report by the Review Committee Professor RB Jack (Chairman) HMSO Cm 622.

17 Electronic Funds Transfer: Report by the Treasury and Trade Practices Commission on dispute resolution, July 1989.

18 The Code came into effect on 1 March 1992, having been published in January.

19 The Code in Clause 1.1 set out standards to be observed by Member banks of the New Zealand Bankers' Association; in Clause 21.3 Banks subscribing to the Code were to belong to the Banking Ombudsman scheme and to have publicly available in all branches details of the scheme.

6 (1996) 26 VUWLR

debate and which, in Australia, involved the Ombudsman in a somewhat tense and controversial role. Thirdly, in the Code the banks set out the minimum standards of good banking practice; if these were breached there was therefore no room for argument if the Banking Ombudsman found a complainant's case had been made out, and indeed a majority of early complaints did not need to be fully investigated since the outcome was clearly predictable and, on reference to the banks own internal procedures, could be satisfactorily resolved.

The second difference was a matter of structure. Whereas in the United Kingdom and Australia a tripartite, corporate form for the scheme was chosen, in New Zealand a simpler, unincorporated form was chosen consisting of the Commission and the Ombudsman's office.

The important thing is that whether a corporate form is chosen or not, it is essential that there should be a manifestly independent body interposed between the funding member banks (who will be the "respondents" in any investigations) and the Ombudsman. In New Zealand this body is the Banking Ombudsman Commission, chaired by a retired Court of Appeal judge, with two consumer and two banking representatives. It is the Commission’s function to appoint the Banking Ombudsman, to collaborate with Government or any corporations on matters affecting banking, to consider and approve the budget, to levy, charge and collect the necessary funding from the participating banks in accordance with the Rules of the scheme, and to receive and consider recommendations from the Banking Ombudsman for changes to the Terms of Reference and to recommend to the Council of the New Zealand Bankers' Association such amendments as the Commission thinks fit.

Clearly it is the strength and credibility of the Commission that guarantees the independence of the Banking Ombudsman and staff. Accountability of the Banking Ombudsman is to the Commission and, through the annual report, to the public.

In New Zealand there is also a unique relationship between the Parliamentary Ombudsman and those in the private sector:20 after a very long wait while the proposal languished in the limbo of legislative measures that have no potential to produce voter support, an amendment to the Ombudsmen Act was passed in December 1991 to protect 20 There is now also an Insurance and Savings Ombudsman, whose office commenced operations in 1995; further,

as a result of the Inter-party Accord on Superannuation, the office of Retirement Commissioner was set up by the Retirement Ombudsman and other persons with similar complaint or dispute handling responsibilities (refer Section 6 (e) Retirement Income Act 1993) and also to review the kinds of. Whether that will proceed remains to be seen, but the report has been postponed from the end of 1994 until the first half of 1996.

the use of the name "ombudsman" which essentially gave the Chief Ombudsman control over who could use the name.21

The purpose behind seeking this amendment was twofold: first, to prevent the proliferation of "Ombudsmen" in such situations as internally appointed newspaper and college Ombudsmen who are little more than complaints advisers with no real independence and who damage the credibility of Ombudsmen properly so called; second, it presented an opportunity to set out criteria which would be used by the Chief Ombudsman when considering applications to use the name.22 Approval for use of the name "Banking Ombudsman" was granted on 2 April 1992. Between that time and February 1994, when the Chief Ombudsman approved the use of the term "Insurance and Savings Ombudsman", the approval requirement enabled the Chief Ombudsman to initiate further discussions with the insurance industry and consumer organisations which resulted in a single scheme to cover the insurance industry as a whole, rather than the separate Life Insurance and Fire and General Insurance Schemes first proposed.23

As for the Banking Ombudsman position in New Zealand, I had the interesting experience, having just completed my term as Parliamentary Ombudsman, of establishing the new office in accordance with its Terms of Reference and also the Criteria for approval.

The main objectives of a private sector Ombudsman scheme needed to be considered, as well as the requirements of the Terms of Reference. The first objective of a private sector Ombudsman scheme is to resolve disputes in such a way that the sheer inequality of power between a large, wealthy institution such as a bank, and its customer does not produce a situation where the customer feels unable to obtain redress. To this end the scheme provides an informal, speedy and cost-free alternative to the courts.

21 Ombudsmen Act 1975, s28A (1) now provides; "No person, other than an Ombudsman appointed under this

Act, may use the name "Ombudsman" in connection with any business, trade or occupation or the provision of any service, whether for payment or otherwise, or hold himself, herself or itself out to be an Ombudsman except pursuant to an Act or with the prior written consent of the Chief Ombudsman".

22 The criteria were published in the Report of the Ombudsmen for the year ended 30 June 1992. It may be of some interest that the following year there was formed in the United Kingdom (and later joined by Eire) an Association of Ombudsmen in the Public and Private sector with criteria for membership very similar to the New Zealand criteria. In his capacity as President of the International Ombudsmen Institute, the New Zealand Chief Ombudsman Sir John Robertson addressed the inaugural Conference of the UK Ombudsman Association.

23 See Report of the Ombudsmen for the Year ended 30 June1992 page 37; Report of the Ombudsmen for the Year ended 30 June 1993 page 44; Report of the Ombudsmen for the year ended 30 June 1994 page 37; Report of the Chief Ombudsman Sir John Robertson on leaving Office. An application for approval by a local newspaper for an Editorial Ombudsman was declined as it did not meet No 4 of the criteria which is; "permission to use the name "Ombudsman" will not normally be granted for unique local or regional rules".

8 (1996) 26 VUWLR

The second objective is securing a fair outcome. As is also the case with the Parliamentary Ombudsman, the scheme allows the dispute to be solved on a broader equitable basis than would be possible in the courts, since the Terms of Reference explicitly require the Banking Ombudsman, in making any recommendation or award, to do so by reference to what is, in his or her opinion, fair in all the circumstances.24 Any applicable rule of law is to be observed, and regard must be had to the general principles of good banking practice and any relevant code of practice.25 The Banking Ombudsman is not bound by any previous decisions, an important point, since it removes the argument a bank might otherwise put up that it cannot make allowances for this particular customer as it would otherwise be stuck with a precedent.

The third objective is that the scheme not only functions as an alternative dispute resolution mechanism, but can go beyond the case-by-case approach of the courts and bring about changes to practice. In other words, it can work as a systematic audit. To this end the Banking Ombudsman is empowered to make recommendations to the Chairman of the Banking Ombudsman Commission from time to time in relation to the Terms of Reference or any relevant Codes of Practice which have a bearing on the discharge of his or her responsibilities.26

The key aim in relation to each objective is fairness. However good a legal system may be (and in a rapidly changing world where electronic banking is displacing older techniques such as cheques it is hard for the legislation to keep up with the needs of the commercial community), when an individual faces a powerful corporation across a courtroom, the imbalance in resources not only is likely to make the specific contest unfair, but fear of such a scenario may scare off many others who have a worthwhile case from bringing the issue to court. So fairness here demands a "level playing field". Part and parcel of that is building in protections into the rules that govern the relationship between the parties. This is where the Code of Banking Practice comes in, which sets out some customers' rights which in the past have not always been observed.27 Since the Code and the Scheme came into operation in 1992, the Consumer Guarantees Act 1993 from which banks, inter alia, unsuccessfully sought exemption, has come into effect and given a number of protections beyond those set out in the Code.28

24 Terms of Reference Paragraph 16.

25 Above n 24, Paragraph 16 (a) and (b).

26 Above n 24, Paragraph 33.

27 See Code of Banking Practice Clauses 2, 4, 2.6, 5.3.1, 10.5.1. The Code is at present in the process of being reviewed and submissions have been made on the proposed new Code.

28 The Consumer Guarantees Act 1993 came into force on 1 April 1994. In Section 2(1) the definition of "services" specifically includes in (c) a contract between a bank and a customer of the bank.

The second aspect of fairness is in the process of dealing with disputes. This means allowing both sides to put their case, but it goes much further since the complainant is often unaware of information about the dispute that is necessary or could help his or her case. The Banking Ombudsman needs to look at a range of conduct, contracts and statements from each side. The Terms of Reference make it clear that in gathering such information the Banking Ombudsman is not bound by legal rules of evidence, though the parties are protected by the reasons that must be given for any decision, which would need to refer to evidence on which those reasons are based .This is one area where the difference between a Parliamentary Ombudsman and an Ombudsman under a voluntary scheme is starkly obvious. The legislation gives the Parliamentary Ombudsman very wide statutory powers to obtain information from any person, and to put those with relevant information on oath,29 and provides any witnesses with protection and a defence even to what would otherwise be breach of secrecy provisions in other legislation. On the other hand the Terms of Reference, while they provide that the Banking Ombudsman may require the defendant bank to provide any information relating to that complaint which is , or is alleged to be, in its possession,30 and that the bank shall as soon as reasonably practicable disclose it to the Banking Ombudsman, represent simply a contractual undertaking to the Commission and are unenforceable by the Banking Ombudsman except through the influence of the Commission. The problem is even greater since the Terms of Reference themselves provide an exemption by which the Bank can certify that the disclosure of the information would place the bank in breach of its duty of confidentiality to a third party whose consent it had used its best endeavours to obtain. These assertions would be impossible for the Banking Ombudsman to verify, and the situation becomes even more difficult when one bank has attempted to claim the right to decide which of the information it holds is "information relating to the complaint". Since the Terms of Reference clearly state that it is for the Banking Ombudsman to decide whether or not a complaint falls within jurisdiction, such a claim to decide whether information "relates " to the claim would be able to undermine an investigation and must be untenable. It has to be emphasised that in most cases there is no problem with obtaining the full file, but there is a big difference between having full statutory powers, backed up by sanctions on the one hand, and relying on the respondent bank to honour its commitment on the other . Since the commencement of the Scheme in 1992 the Privacy Act 1993 has come into effect, and while at first this was perceived by some as another possible obstacle to satisfactory access to full information, it has now been accepted that the Banking Ombudsman can act as agent for the complainant to obtain all the information accessible under the Act, which would also permit enforcement via the Privacy Commissioner's Office. That new regime 29 Above n 2, s 19.

30 Terms of Reference Paragraph 5.

10 (1996) 26 VUWLR

does not, of course assist where the complainant is a company since the Privacy Act only covers personal information about "an individual".31

Another perceived difficulty in ensuring fairness of process is the "Test Case" provision.32

While this has never yet been used in New Zealand, it enables the bank, at any time before the Banking Ombudsman has made an Award, to give a notice in writing containing a statement, with reasons, that in the opinion of the bank the complaint involves or may involve an issue which may have important consequences for the business of the participating bank or banks generally or an important or novel point of law. The bank provides an undertaking that if, within six months of the Banking Ombudsman's receipt of the notice, either the complainant or the bank institutes proceedings in any Court in New Zealand in respect of the complaint, the bank will pay the complainant's costs and disbursements on a solicitor/client basis and make interim payments on account if it appears reasonable to the bank to do so. Providing the Banking Ombudsman concurs with the bank's statement, the investigation must then be discontinued.

In spite of criticism that has been aimed at this provision (and similar ones in the UK and Australia), since the Banking Ombudsman's concurrence is required it is doubtful that this provision could be abused, particularly as the Terms of Reference in any case provide that if, at any time, it appears to the Banking Ombudsman that the complaint would be more appropriately dealt with by a court, the Banking Ombudsman can relinquish jurisdiction.33

31 Privacy Act 1993, Long Title and s2 definition of "individual" as a natural person, other than a deceased natural

person.

32 Terms of Reference Paragraph 23.

33 The drafting is curious. Under the heading "Limits on the Banking Ombudsman's Powers" Paragraph 18 provides:

The Banking Ombudsman shall have power to consider a complaint made to him or her except:

…

(d) if at any time it appears to the banking Ombudsman that it is more appropriate that the complaint be dealt with by a court, under another independent or statutory complaints or conciliation procedure or under an arbitration procedure;

(e) if any Participating Bank named in the complaint gives the Banking Ombudsman a notice of the kind described in paragraph 23.

What is in fact a discretion not to investigate or to discontinue an investigation not unlike the provision in Section 17(1)(a) of the Ombudsman Act 1975 is here made a jurisdictional limitation.

So, how does "fairness" under a voluntary private sector Scheme compare with "fairness" in the public sector?

In both cases what Ombudsmen do is, like Chancellors in the Middle Ages, to supplement and ameliorate the law applied by the courts and to provide alternative procedures not available in the courts. The courts of today, on the basis of much new legislation that has enhanced the civil and consumer rights of the public, can do much more than formerly to ensure fairness in administration and commerce, and the standards set by the courts are carefully noted by Ombudsmen. At the end of the day, however, courts are setting precedents about liability and that is why Ombudsmen, because they have a freer hand under their legislation or terms of reference, can more easily tailor a fair remedy to the specific case.

There are still important differences between public sector and private sector Ombudsman jurisdiction: whereas in the public sector any matter of administration involving listed organisations can be investigated on complaint or on the Ombudsman's own motion, in the private sector only those matters specified in the Terms of Reference can be looked at and there is no "own motion" jurisdiction. So, in the case of the Banking Ombudsman Scheme there are a number of limitations; the claim cannot be above $100,000, the act or omission complained of must have occurred after 1 January 1992 (or six months earlier, and not have been reasonably discoverable until after 1 January 1992), and there is no jurisdiction to consider a complaint that relates to a commercial judgment in decisions about lending or security, or interest rate policies or a practice or policy of a bank which does not itself give rise to a breach of any obligation or duty owed by the bank to the complainant. Within those limitations, the Banking Ombudsman can investigate, try to get a resolution, and failing that may make a recommendation as to how the matter should be settled. If the complainant accepts the recommendation but the bank does not, a binding award can be made against the bank.

The binding award is an important difference; the outcome of a Parliamentary Ombudsman investigation is a recommendation and, if the respondent organisation does not accept it, a report to the Prime Minister and thence to Parliament. That last step has only had to be resorted to in extremely rare circumstances. In the case of a complaint relating to a local authority, where a recommendation is not accepted,the Ombudsman may send a copy of the report to the Mayor or Chairman of the organisation and may require it to publish, at its own expense, a summary of the report.

Fairness is a two way process, the Ombudsman must be fair to both the complainant and the defendant in process, on the merits, and in the outcome. Fairness is a constantly developing concept and as the public's concerns about commercial or civic powerlessness and downstream effects of information technology are reflected in new legislation such as the New Zealand Bill of Rights Act 1990, the Human Rights Act 1993, the Privacy Act 1993

12 (1996) 26 VUWLR

and the Consumer Guarantees Act 1993 or in judicial decisions, the relevant Ombudsman can revise upwards the standard of fairness to be applied . However Ombudsmen have to remember that there is no such thing as a free lunch, and in the private sector measures that may be fair to one person may increase the costs of a service to such an extent that it will disadvantage and so be potentially unfair to many others. So it is important to keep some balance in what is decided in respect of an individual complainant; it would be counterproductive if doing what seemed fair for one put unreasonable burdens on the many. Perhaps one main thing that is lacking in the present Terms of Reference of the Banking Ombudsman Scheme is a requirement, when considering what is good practice, to consult with consumer representatives as well as with the banks. When the time comes to evaluate how the Scheme has operated since its inception that change to the Terms of Reference may be worth considering.

L’experience neo-zélandaise de l’application des règles relatives à l’institution de l’Ombudsman dans le secteur privé

Les Néo Zélandais sont fiers des nombreuses avancées sociales que l’on doit à leur système légal. Il suffira de faire référence au droit de vote octroyé au femmes des 1893, et quelques dispositions uniques en leur genre dans le domaine du droit de la famille. Il faut également mentionner l’Ombudsman Act de 1962 complété par l’Ombudsmen Act de 1975, qui tous deux ont façonné de nouveaux rapports entre le citoyen et l’administration Néo Zélandaise. Inspiré du système suédois, l'idée principale qui soutend cette institution repose d’une part sur la prise de conscience du déséquilibre des forces qui existent entre l’administration et les administrés et d’autre part sur la nécessité qu’il y a pour ces derniers, de pouvoir compter sur les services d’une personne impartiale dans le cadre de litiges qui pourraient naître entre eux.

La section 22 du Ombudsmen Act de 1975 pose comme principe que la décision administrative soumise au contrôle de l’Ombudsman doit “apparaître comme contraire à la loi”. Sans empiéter sur le domaine réservé des tribunaux, les décisions de l’Ombudsman se présentent comme des avis sur la légalité de telle ou telle decision administrative. Au delà du premier critère de l'illégalité apparente, les agissements de l’administration seront susceptibles d’etre déférés à la censure de l’Ombudsman chaque fois qu’il est déraisonnable (c’est à dire ce qu’un citoyen ordinaire le considère comme inacceptable) , injuste ou discriminatoire au regard des textes en vigueur. Sur ce fondement, le contrôle de l’Ombudsman a pu etre étendu aux textes qui sont les supports de l’acte administratif incriminé. De la mémé manière chaque fois que le comportement de l’administration repose sur une interprétation de la loi totalement ou partiellement fausse, l’Ombudsman se verra reconnaitre compétence. Un dernier fondement est proposé par la section 22 du Ombudsmen Act de 1975, et c’est sans aucun doute le plus vague, puisqu’il autorise une

intervention lorsque l’action de l’administration est “erronée”. Enfin, grâce a l'intervention des tribunaux, alliée à quelques dispositions législatives spécifiques, le contrôle de la motivation des actes administratifs entre aujourd'hui dans le champ de compétence de l’Ombudsman.

Le succès de l’institution a été tel qu’il n’est guère surprenant qu’elle ait été étendue au secteur privé. L’objectif poursuivi était à l’instar des législations précédentes de promouvoir un équilibre des forces entre les consommateurs et les grands groupes industriels et financiers. Sans réellement s’inspirer du modèle anglais, mis en place en 1986, le secteur bancaire fut le premier en Nouvelle Zélande à connaître en 1992 le recours à l’ Ombudsman .

Un organisme a été créé entre les institutions bancaires et l’Ombudsman bancaire, l’Ombudsman Banking Commission présidée par un haut magistrat de l’ordre judiciaire et composé de deux représentants des associations de consommateurs et de deux représentants des organismes financiers. Il appartient à cette commission de nommer l’Ombudsman, tout en remplissant une fonction de conseil tant auprès du gouvernement que des institutions bancaires.

La première tache de l’Ombudsman dans le secteur privé est de rendre une decision équitable. Pour ce faire il est affranchi des traditionnelles règles en matiere de preuves de telle sorte que sa marge de manoeuvre apparait bien plus grande que n’importe quel tribunal et qu’il agit comme un véritable audit de l’ensemble de l'institution bancaire. La législation donne à l’ Ombudsman des pouvoirs extrêmement étendus tant dans la recherche des preuves et éléments d’informations matérielles que pour l’audition de témoins.

Sur le plan pratique cette recherche se heurte néanmoins au secret bancaire et à la possibilité pour les banques de mettre un terme à la procédure en indemnisant le consommateur plaignant, privant ainsi l’Ombudsman de la possibilité de mener à terme ses investigations. Il reste toutefois que la pratique du recours à l’Ombudsman dans le secteur privé offre au consommateur une possibilité de règlement extra judiciaire des litiges qui l’oppose au secteur privé à commencer par le secteur bancaire.

1

FORM AND SUBSTANCE IN US, ENGLISH, NEW ZEALAND AND JAPANESE LAW: A FRAMEWORK FOR BETTER COMPARISONS OF DEVELOPMENTS IN THE LAW OF UNFAIR CONTRACTS Luke R Nottage*

Recently there has been talk of change in the law of contract in the United States, England, New Zealand and Japan. Often this is linked to broader trends of internationalisation. This article builds on the "form-substance" framework proposed by Atiyah and Summers, focusing on the fine print doctrine, the duty of good faith, and the law of unconscionability and undue influence. It argues that developments in these areas of contract law, which control unfair contracts, tend to be consistent with the overall orientation of each national legal system. This suggests that counter-systemic developments in each legal system's contract law will be met by more resistance than expected. Further, those overall orientations are not necessarily convergent, and this is likely to affect the impact of international developments in contract law on each legal system.

Now it has become widely accepted that there may be more ways than one in which national common law systems, starting from the same roots, may justifiably go. Different chains of reasoning and weightings of values may be reasonably open. Indeed United States legal history has long demonstrated that truth. For a decade or more it has been a commonplace that Australian and Canadian common law, for instance, are not necessarily the same as

* Lecturer in Law, Victoria University of Wellington. Associate, JHJ Crawford Law Office. This article is

dedicated to Mr Jonathan Crawford, in regard for his experience and guidance in dealing with the Japanese legal system at a more practical level, and for allowing the author the time to develop this broader view. Particular thanks are also due to Professor Tsuneo Matsumoto (Hitotsubashi University), Associate Professor Keizo Yamamoto (Kyoto University), and Mr Tomohiko Sunaga (Shiga University), for advice and assistance. Naturally, however, the usual "fine print" disclaimer applies.

2 (1996) 26 VUWLR

English common law. The same has been accepted recently by the Privy Council itself in relation to New Zealand [...]. But emancipation does not necessarily mean abandonment of cooperation to mutual advantage. Common denominators may be usefully sought, as long as the process is not compelled from outside and the national ethos is allowed its own weight.**

Rui wa tomo o motte atsumaru ***

A The Changing Law of Contract?

Eminent contract law scholars in a number of jurisdictions have recently proclaimed that contract law is developing in new directions, or at least changing.1 But, like the diagnosis in 1974 that contract was “dead”, is the case for a distinct new direction being overstated?2 The cynic might say that a changing law of contract promises to make the world a more interesting place for contract law scholars. Yet eminent judges, who more directly face the slow accretion of particular cases, also talk of “an emerging maelstrom” or, more cautiously, note that many such writings “at least superficially show modern contract law to be in something of a ferment”.3 If there is at least some change in a particular jurisdiction, how extensive is it and what are its longer term prospects?

** Sir Robin Cooke, President of the Court of Appeal of New Zealand, “The Dream of an International Common

Law”, Paper presented at the conference on “The Mason Court and Beyond”, Melbourne 1995, 12 (footnote omitted).

*** Like attracts like (Japanese proverb).

1 In the US, see eg I Macneil "Restatement (Second) of Contracts and Presentation" (1974) 60 Va L Rev 589, 591 and 595-7, leading to I Macneil The New Social Contract (Yale University Press, New Haven, 1980). For similar interest in England as to what new values might infuse contract law in the light of wider socio-political developments, see H Collins "The Transformation Thesis and the Ascription of Contractual Responsibility" in T Wilhelmsson (ed) Perspectives of Critical Contract Law 293 (Dartmouth, Aldershot, 1993), 293-4. In New Zealand, see D McLauchlan "The 'New' Law of Contract in New Zealand" [1992] NZ Recent L Rev 436 and even B Coote "The Changing New Zealand Law of Damages in Contract", Paper presented at the 6th Annual Journal of Contract Law Conference: 'The Changing Law of Contract', Auckland, 14-15 August 1995. But see now D McLauchlan "The Plain Meaning Rule of Contract Interpretation" (forthcoming, 1996) NZBLQ, and L Nottage "Form and Substance in New Zealand, US and Japanese Law: What Role for Grand Theory in the World of International Contracting?" Proceedings of the 1995 Annual Meeting of the Research Committee on Sociology of Law (International Sociological Association), "Legal Culture: Encounters and Transformations", Papers - Section Meetings, Supplement 1, 203, 211-2. In Japan, see eg T Uchida "The New Development of Contract Law and General Clauses - A Japanese Perspective -" in The Organising Committee (ed) Japanese and Dutch Laws Compared 119, International Center of Comparative Law and Politics, Tokyo, 1992. But see also L Nottage, “Contract Law, Theory and Practice in Japan: Plus ça change, plus c’est la même chose?” in V Taylor (ed) Australian Perspectives on Asian Legal Systems (Law Book Co, Sydney, forthcoming 1996).

2 G Gilmore The Death of Contract (Ohio State University Press, Columbus, 1974). Cf R Speidel "An Essay on the Reported Death and Continued Vitality of Contract" (1975) 27 Stanford Law Review 1161, and most recently P Linzer "Law's Unity: An Essay for the Master Contortionist" (1995) 90 NWULR 183.

3 See respectively L Priestley "Contract - The Burgeoning Maelstrom" (1988) 1 JCL 15, and R Cooke "Introduction" (1995) 9 JCL 3.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 3

The question of change in today's law of contract is often linked to the broader phenomenon of internationalisation.4 However, the implications of this phenomenon should not be overstated either. The impact of underlying socio-economic changes brought about by internationalisation is clear. But possible repercussions on each national legal system and its contract law deserve to be closely analysed. Furthermore, as the quotation from Sir Robin Cooke’s recent speech implies, there remains a tension between convergence and divergence, even among common law jurisdictions.5 Divergence is likely to remain particularly apparent, when one adds developments within the civil law tradition.6 To the broad question, “Is commercial law becoming world law?”, Hunter and Carter conclude:7

although the movement toward a global commercial legal system is real and will continue, it will not supplant the many different local variations that now exist.

This article therefore begins to tease out some significant local variations in contract law, attempting to identify possible different chains of reasoning and weightings of values. It proposes a wider framework to determine how differences might relate to a particular national legal system as a whole - a national legal ethos. Hence the article begins to consider trajectories for a range of contract law developments at both the national and international levels.

First, Part B updates and expands on an aspect of the framework developed by Atiyah and Summers.8 This framework aimed to systematically contrast US and English law. But New Zealand law, firmly within the common law tradition, can be readily added. So too can Japanese law, with some additional difficulty stemming from its roots in the civil law tradition.9 As it may be less familiar to readers, Japanese law is more extensively covered. 4 D King "Commercial Law: Times of Change and Expansion" in R Cranston and R Goode (eds) Commercial and

Consumer Law: National and International Dimensions 121 (Clarendon Press, Oxford, 1993); K Keith "Lawyers in the Law Reform Process" (1993) Paper presented at the 10th Commonwealth Law Conference, Nicosia, May 1993.

5 See also J Matson "The Common Law Abroad: English and Indigineous Laws in the British Commonwealth" (1993) 42 ICLQ 753, 779.

6 J Merryman The Civil Law Tradition (Stanford University Press, Stanford, 1985). All the more so, in light of the differences within civil law jurisdictions: H Kötz "Taking Civil Codes Less Seriously" (1987) 50 MLR 1 at 7-8.

7 H Hunter and J Carter "Is Commercial Law becoming a World Law?" Paper presented at the 6th Annual Journal of Contract Law Conference: 'The Changing Law of Contract', Auckland, 14-15 August 1995, 20.

8 P Atiyah and R Summers Form and Substance in Anglo-American Law: A Comparative Study in Legal Reasoning, Legal Theory and Legal Institutions (Clarendon Press, Oxford, 1987).

9 Atiyah and Summers (above n 8, 430) had indeed anticipated some difficulty in adding a comparison of a civil law system, particularly one like Japan which had "received" so much of its modern law directly from other jurisdictions.

4 (1996) 26 VUWLR

The treatment is still tentative and necessarily rather general, but some particular developments in the various jurisdictions are highlighted to bring out points of comparative reference.

Atiyah and Summers developed their framework as part of a much broader comparative study.10 However Part B first expands on aspects of three areas of contract law, which they cite as examples illustrating different approaches to the general question of determining the "authoritativeness of law" in each legal system. These are the fine print doctrine, the duty of good faith, and the doctrines of unconscionability and undue influence. Each is of considerable contemporary relevance. Together, they represent a significant part of the law controlling unfair contracts, particularly on standard forms. Part B then considers how each legal system generally approaches that broader issue through legislative intervention. The analysis confirms the wider usefulness of Atiyah and Summers' framework.

Part C concludes by outlining how that framework's other dimensions might be fleshed out. Systemic local variations seem to be confirmed. The framework identifies various dimensions to a legal system, which seem to fit together quite consistently. To paraphrase the quoted Japanese proverb: "like attracts like". Each of those dimensions must therefore be carefully fully explored, before making a definitive pronouncement on developments in a particular area of law, such as contract law. But already it seems likely that developments that are broadly counter-systemic may not result in the degree of change in contract law that some envisage at both national and international levels.

B Dimensions of Form and Substance

Atiyah and Summers argue that legal reasoning can revolve around two types of reasons. A substantive reason involves a "moral, economic, political, institutional or other 10 A primary concern of the authors (above n 8, 28-31) was to reemphasise the coherence of organising a legal

system on more formal lines, in response to criticism of formality in general. Although not expressly stated, that warning is no doubt directed primarily at the critical legal studies movement (see eg D Kennedy "Legal Formality" (1973) 2 J Leg Stud 351.) Even so, the authors criticise some excessive formal reasoning and formal attributes in contemporary English law (above n 8, 421-4).

The present author agrees on the need to consider legal norms, institutions and the general vision of law in particular legal systems and societies, as a sounder basis for criticism. That tends to be overlooked by those within in the "critical" tradition both in America (and England) and on the continent. However, such an extensive inquiry seems likely to identify even more problems in retaining an overall formal orientation in contract law and its underlying social and political philosophy, in contemporary societies, than Atiyah and Summers had initially detected. See C Joerges "Politische Rechtstheorie and Critical Legal Studies: Points of Contact and Divergence" in C Joerges and D Trubek Critical Legal Thought: An American-German Debate (Nomos, Baden-Baden, 1989), 597. But cf now R Summers "The Formal Character of Law - Criteria of Validity for Contracts" (1995) 9 JCL 29, 33-34.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 5

social consideration".11 A formal reason is "a legally authoritative reason on which judges and others are empowered or required to base a decision or action, and such a reason usually excludes from consideration, overrides, or at least diminishes the weight of, any countervailing substantive reason arising at the point of decision or action".12

This definition brings out two dimensions of formal reasoning, respectively termed "authoritative formality" and "mandatory formality". Mandatory formality is usually present in any legal system; but varies depending on its openness to substantive reasons as well. On the other hand, authoritative formality is fundamental to legal reasoning. However it derives from the authoritativeness of a rule or other valid legal phenomenon (such as a statute, case precendent or contract norm), and that authoritativeness is partly determined by standards of validity. Such standards can be either "source-oriented" (turning solely on whether a recognisable source of the rule or norm is seen as valid), or "content-oriented" (depending to some degree on its substantive content). Thus, this dimension also varies, with more "formal" legal systems looking to "source-oriented" standards, and more "substantive" legal systems prefering "content-oriented" standards of validity, to determine the authoritativeness of legal phenomena.

1 The Authoritativeness of Law: Source- vs Content-Standards of Validity in Contract Law

Along the dimension of "authoritative formality", Atiyah and Summers note that English law has traditionally looked almost exclusively to the source of statute law or of case law, to determine its validity, with little scope to investigate or challenge its content.13 By contrast, constitutional law and the nature of case law in the US involve more obviously content-oriented standards and more substantive reasoning.

Atiyah and Summers further argue that "private contract, the largest body of governing norms in the American system, is also subject to wide-ranging content-oriented standards of validity".14 The contrasting source which is impliedly more determinative of the validity of contract norms in English contract law appears to be the agreement or intentions of the parties, characteristic of the classical view of contracts deeply rooted in English law.15 11 Above n 8, 1.

12 Above n 8, 2. And see now M McDowell and D Webb, The New Zealand Legal System (Butterworths, Wellington, 1995) 352-357.

13 Above n 8, 42-51. See 1.1.A and 1.1.B in the Figure in the Appendix.

14 Above n 8, 51.

15 P Atiyah An Introduction to the Law of Contract (Clarendon Press, Oxford, 1989), 8-17, 30-39. Summers (above n 10, 31) has now further categorised formal criteria for contractual validity as "source-oriented", "procedurally oriented" and "structurally" oriented. The structure of offer and acceptance, constituting agreement, would therefore fit into at least the last two of these categories.

6 (1996) 26 VUWLR

From that perspective, the rest of this Part looks more closely at some of the contract law examples given to support their general proposition.

2. The "Fine Print" Doctrine

The first example is the so-called "fine print" doctrine. In US law, a contract term can be refused effect because:16

although the writing may plainly have been an offer, the term was not one that an uninitiated reader ought reasonably to have understood to be part of that offer. This result is particularly easy to reach if the term is on the reverse side of the form and the reference, if any, to terms on the reverse side is itself in fine print or otherwise inadequate.

Further, for instance in sales of goods, the §2-316(2) of the UCC requires that written disclaimers of the implied warranty of merchantability be reasonably "conspicuous".17

Similarly, in the English law tradition, the "ticket cases" established that reasonable notice is required of unusual and onerous terms.18 More generally, in Interfoto Library Ltd v Stiletto Ltd,19 the plaintiff supplier was denied payment pursuant to a clause imposing a high daily charge for hired transparencies not returned after a certain period. The English Court of Appeal held that the defendant had no obligation to make such payments, because the plaintiff had not given sufficient notice that such an onerous term was included in the contract document.

Likewise, in Livingstone v Roskilly, Thomas J drew on the "ticket cases" to ask: "did the notice on the wall [of the bailee's premises] impose an onerous condition [on one reading, excluding the bailee's liability even for negligence] that should have been specifically drawn to the plaintiff's attention?".20 In this case, notice was held to have been inadequate, and the exclusion was not allowed.

Japanese courts have used similar techniques in an important series of recent cases, the so-called "Dial Q2" (or "Dial 0900") cases. An initial issue was whether the defendant, party to a telephone contract with Nippon Telegraph and Telephone Company (NTT), had to pay NTT charges for information supplied over NTT lines from an information provider to a third party (typically, the defendant's child). NTT argued that in 1989 it had amended its 16 E A Farnsworth Contracts (Little Brown, Boston, 2ed 1990) 314.

17 As defined in UCC §1-201(1).

18 J Burrows, J Finn and S Todd Cheshire & Fifoot's Law of Contract (Butterworths, Wellington, 8th NZ ed 1992) 181-2.

19 [1989] QB 433.

20 [1992] 3 NZLR 230, 238.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 7

standard form telephone contract to clearly record that the party agreed to its collecting such charges on behalf of the information provider. However, in the first major decision on this point,21 the Osaka District Court held for the defendant. The Court reasoned that it was "exceptional" for one party (the defendant) to bear an obligation towards another (NTT) for the acts of yet another (the information provider); and that when the amendment was made, the general public was unaware that the charges for such services could easily escalate. Thus the court held that the amendment had not been made sufficiently clear; the defendant could not be said to have agreed to such an unusual and onerous amendment.

Thus, on the one hand, the general concern and approach in Japanese law bears some similarities to that of US, English and New Zealand law: whether an unusual term was reasonably brought to the other party’s notice. "Reasonableness" is clearly a "content-oriented" standard of validity, pointing to a more substantive approach. On the other hand, these cases can arguably be readily fitted within a classical framework, reducing this particular aspect of contract formation to the question of whether the parties have agreed, as analysed through the conceptual structure of offer and acceptance.22

Japanese law reveals a similar ambivalence in the overlapping but more general area of doctrines of contract interpretation. For instance, the Osaka District Court judgment might be seen as applying a broad contra proferentem doctrine.23 But this doctrine, which first insists on finding an "ambiguity" in the parties' agreement, still stresses the latter as a source-oriented standard and thus remains a more formal approach.

More forthrightly, most noticeably in a recent series of insurance contract cases, Japanese courts have developed principles of "reasonable intepretation" (goriteki kaishaku) and "restrictive interpretation" (seigenteki kaishaku). A clause can be interpreted "restrictively" where a literal reading would lead to "unreasonable results".24 Unlike the 21 Judgment of 22 March, 1993 (reported in (1993) 820 Hanrei Taimizu 108).

22 Atiyah, above n 15, 8-17, 63-65.

23 The author thanks Professor Tsuneo Matsumoto for this suggestion. If this is so, it may represent a significant development in the Japanese caselaw. Japanese courts have rarely attempted to develop this doctrine, at least in the form proposed by Japanese scholars (A Omura "Keiyaku Naiyo no Shihoteki Kisei [Private Law Regulation of Contract Content] (1)" (1991) 473 NBL 34, 39).

24 Above n 23, 39. Omura cites for instance the Supreme Court decision of 20 February 1987, limiting the effect of a clause requiring "60 days' notice" of claims to the insurer, given its supposed purpose and legal character. Also, in a case quite similar to the Interfoto case (above n 19), the Yamaguchi High Court (12 May, 1987) only allowed partial enforcement of a clause providing for high liquidated damages on termination, arguing that it was difficult to foresee that such a clause would have been included in the written contract, and that its content was unreasonable (above n 23, 37, fn 6). See also Y Yamamoto "Futo Joko to Kojo Ryozoku [Unfair Terms, and Public Order and Good Morals]" (1994) 66 Horitsu Jiho 101, 103 (and case cited in his fn 9).

8 (1996) 26 VUWLR

pure version of the contra proferentem doctrine, this may not require Japanese courts to first strain to find some ambiguity. For instance, in another Dial Q2 case, the Okayama District Court declared the same clause to be unenforceable, arguing that it must be so interpreted because its content was unreasonably onerous, even if the clause could be said to be as unambiguous as NTT had asserted.25 Once again, this may represent a tendency in Japanese courts towards applying more direct, source-oriented standards of validity, and thus a more substantive approach. On the other hand, this still occurs under the guise of interpretation of the parties' agreement, and the precise implications of these cases have been vigorously debated.26 These counter-tendencies indicate the resiliency of a formal approach.

Similarly, in Livingstone, Thomas J argued that the notice in question did not unambiguously exclude liability for negligence, so it could be construed contra proferentem against the negligent bailee.27 However his Honour also suggested that looking for ambiguity could result in "artificial or strained interpretation".28 His Honour asserted that another key issue was whether the parties "intended" such a clause to be the subject of proper and reasonable performance, rather than providing an exclusion even for negligence.29 However his Honour appears to arrived at something very close to the doctrine of fundamental breach: the notion that a court will impose minimal obligations in certain contracts, overriding the parties intentions as evidenced even by the clearest of exemption clauses to the contrary.30 Other New Zealand courts have not been quick to pursue this alternative line of reasoning. In any event, Thomas J’s insistence that it remains interpretation of the parties' agreement - however strained - is an indication of the continued importance of an appeal to "source-oriented" standards in contemporary New Zealand contract law.

In sum, both the Dial Q2 cases and Livingstone can be seen as developing a test similar to the "fine print" doctrine. Alternatively they can be seen as promoting an expanded doctrine of contra proferentem interpretation, or indeed of "restrictive" interpretation or some version of the doctrine of fundamental breach. Even with that last view, however, 25 19 May, 1994 (unreported). See also T Matsumoto "EC Directive on Unfair Terms in Consumer Contracts and

Japan: Does Japanese Law Meet the Standards Set by the Directive?" (1994) 2 Consumer LJ 141, 143.

26 See eg S Yasunaga, "Hokenkeiyaku no kaishaku to yakkan kisei [The Interpretation of Insurance Contracts and the Control of Standard Terms]" (1994) 56 Shiho 109.

27 Above n 20, 234-235.

28 Above n 20, 235.

29 Above n 20, 235 and 239.

30 C Nicholson "Excluding Liability for Negligence: 'All Care and No Responsibility' in Livingstone v Roskilly" (1994) 24 VUWLR 289, 308-312.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 9

these developments are ambiguous: they can be viewed as representing either a more substantive approach, or as reconciliable with a formal approach to contract law. Hence a closer comparative analysis of more wide-ranging controls of unfair contract terms is called for.

3 Good Faith, Unconscionability and Undue Influence

3.1 United States Law

Good Faith

Atiyah and Summers' second example of substantive, content-oriented standards of validity in US contract law is "the general obligation of good faith and fair dealing".31 A brief survey of the scope of this duty indeed provides significant contrasts with the English law tradition, as well as several parallels with Japanese law.

The Uniform Commercial Code (§1-203) and the Restatement (2nd) of Contract (§205) state that every contract imposes a duty of good faith and fair dealing in its performance and enforcement. As in Japan, this duty has acted as a lodestone in defining and refining performance obligations. It determines what incidental performance is required, such as reasonable cooperation so as to satisfy contractual conditions, or what are reasonable demands in requirements and outputs contracts.32 The duty has also helped to refine rights of enforcement. It softened the rigour of the "perfect tender" rule, preventing rejection despite minimal deviations in contract performance. Generally, the duty is associated with the rule that only a "material" breach can justify the other side exercising a right not to perform.33

More ambitiously, but equally familiar to a Japanese lawyer, the duty provides a focus for discussion as to whether there is or can be a duty to negotiate in good faith before a contract would usually be said to be validly formed.34

More surprising is the way case law can emerge, in a sudden and highly visible manner, drawing on this broad notion of good faith. For instance, the duty of good faith has played an important role in setting standards and regulating the interests of contracting parties in automobile or gasoline distributorships, and in franchising. Typical 31 Above n 8, 51.

32 H Hunter "The Duty of Good Faith and Security of Performance" (1993) 6 JCL 19, 23.

33 Above n 32, 23-24.

34 Above, n 16, §3.26. However, Farnsworth notes US courts' reluctance to recognise such a duty. Courts still tend to require a recognisable preliminary agreement, or some form of a contractual agreement to negotiate in good faith (E A Farnsworth "Developments in Contract Law During the 1980's: The Top Ten" (1990) 41 Case West Res L Rev 203, 212).

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problems, such as the enforcement of the right to terminate, attracted wide public interest. In the 1970s, in particular, specific federal and state legislation was enacted. Yet the enactments have retained standards of a similar level of generality as the duty of good faith and fair dealing. And, by heightening the overtly political background to the legislation, the development of this area of the law remained notably substantive.35

Also beginning in the 1970s, some US courts began to overturn the longstanding doctrine that an employer could terminate the contract with an employee "at will". They created various public policy exceptions to this doctrine, controlling termination, for instance where it had followed from an employee's refusal to perform an illegal act. Some went further and read in a duty of good faith to control the employer's right to terminate at will, as where the employer's motive was to deny the employee an agreed bonus despite years of satisfactory service. These developments also attracted widespread public interest, because many courts then went on to allow large claims for punitive damages.36 However, in the 1980s, these developments slowed. In 1988, a more conservative Supreme Court of California stressed the limits of the public policy exception, and decided that the breach of an implied duty of good faith should only gave rise to a contract claim, thus limiting the scope for claiming punitive damages.37 Nonetheless, even the possibility a claim in contract for compensatory damages for breach of the implied duty remains a serious consideration for Californian employers, particularly as it is unclear whether such a duty can be avoided even by the clearest language excluding it.38 Furthermore, as of 1993, seventeen out of thirty-six states recognised a cause of action based on a duty of good faith.39 Thus, in the area of employment contracts, the duty of good faith has played a highly visible role in developing the law. Also, although proposals to restate or clarify standards by statute have not met yet with the results evident in the area of distributorships and franchises, the discussion remains highly political.40 Overall, this area also remains characterised by distinctly substantive reasoning.

35 S Macaulay "Long-Term Continuing Relations: The American Experience Regulating Dealerships and

Franchises" in C Joerges (ed.) Franchising and the Law: Theoretical and Comparative Approaches in Europe and the United States 179 (Nomos, Baden-Baden, 1991). The author thanks Mr Richard Boast (Victoria University) for the reminder that legal reasoning in a particular area can become overall more substantive in nature as a result of a highly politicised law-making process.

36 S Macaulay, J Kidwell, W Whitford and M Galanter Contracts: Law in Action (The Michie Company, Charlottesville, 1995), Vol 1, 471-481.

37 Foley v Interactive Data Corp 47 Cal. 3d 654 (1988). See also J Peterson, "The Duty of Good Faith in Insurance Relationships: The Decision in Gibson v Parkes District Hospital" (1994) 24 VUWLR 189, 198-199.

38 Above n 36, 501.

39 Above n 36, 487.

40 Above n 36, 488-490.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 11

Also in the 1980s, the duty of good faith was invoked in cases an aspect of lender liability. For instance, a bank was held liable when it refused to advance further funds to a borrower, despite the agreement permitting the bank to do so if it felt insecure.41 Hunter notes that such limitations on enforcement of rights may operate under other principles such as estoppel or waiver, but is generally comfortable with this additional control mechanism open to US courts.42 He implies that in deciding where to draw the line, the courts do and must have a mechanism to undertake sufficient inquiry into the details of the parties' relationship:43

Contrary to the Objectivists who held sway around the turn of the century, the most important determinant in contract performance - and in the security of performance - is the relationship of the parties to each other.

Similarly, an oil company was held liable for failing to give adequate notice of its decision to raise prices, despite its standard form reserving that right.44 Macaulay and others suggest that the court was impressed by the close links between the oil company and the plaintiff purchaser, and the events leading to the particular dispute: "The Court looked to the relationship rather than the abstractions of formal contract law."45 Thus, on occasion, the duty of good faith can provide another useful mechanism allowing US courts to search out and give due weight to the "real deal" behind the "paper deal".46

Several of these applications of the duty of good faith, as in distributorships or employment, can be seen more generally as controlling unfairness in contractual relationships where standard forms are particularly common. The same may be inferred by its application to the control of disclaimer clauses in written contracts. Adams asserts that the duty has been used to control clauses limiting buyers' remedies to repair or replacement, and limiting liability for consequential losses.47

Unconscionability

41 KMC Corp v Irving Trust Co 757 F 2d 752 (6th Cir 1985).

42 H Hunter "The Duty of Good Faith and Security of Performance" (1993) 6 JCL 19, 23-25.

43 Above n 42, 25-26.

44 Nanakuli v Shell Oil 664 F 2nd 772 (9th Cir 1981). Discussed in detail by Burton (below n 184) and particularly by Dickerson (below, n 68).

45 S Macaulay, J Kidwell, W Whitford and M Galanter Contracts: Law in Action (The Michie Company, Charlottesville, 1995) Vol 2, 367.

46 Above n 45, 366.

47 J Adams "The Economics of Good Faith in Contract" (1995) JCL 126, 135-136 (at fn 39).

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In fact, to strike down the offending clauses, the two cases respectively cited rely primarily on a third example given by Atiyah and Summers: the doctrine of unconscionability.48 US cases involving distributorships and franchises have also relied more on this other broad and "content-oriented" standard, set out primarily in UCC §2-302.49 Furthermore, the noticeable growth of the doctrine of unconscionability has been underpinned precisely by perceived inadequacies of classical doctrines, such as the "fine print" doctrine, in controlling unfairness in standard form contracts. Specifically, it was appreciated that an inquiry into whether the clause was sufficiently brought to one's attention, and therefore agreed upon, would offer insufficient protection to a party who happened to have read and understand a particular clause, but who had proceeded to contract on the basis of that form. Instead, the main problem was seen to be whether that party really had any real freedom to negotiate standard contract terms - the more substantive problem of inequality of bargaining power.50

UCC §2-302, epitomising this new concern, was soon criticised as "the Emperor's new clause", for failing to give clear guidance to US courts.51 In fact, the courts have generally applied it with care.52 This has been so particularly in disputes between businesses.53 However, even within that category, sufficient cases do apply the doctrine of unconscionability to ensure it remains another important residual technique for controlling unfairness in contractual relationships.54 On occasion, the broad wording of the doctrine of unconscionability has allowed some US courts to strike down contracts on the basis of severe contractual imbalance, even without some procedural impropriety in the bargaining process.55 Generally, it has bolstered the resolve of US courts to embark, where necessary, on a wide-ranging investigation of the contracting parties' relationship.

48 See Eckstein v Cumming 321 NE 2nd 897 at 902-903, and Select Pork v Babcock Swine 640 F 2d 147 at 149. The

former involved the Ohio equivalents of UCC §2-719(1)(a) and §2-302; the latter involved the Iowa equivalent of UCC §2-719(3).

49 See eg E Jordan "Unconscionability at the Gas Station" (1978) 62 Minn L Rev 813, 830.

50 Above n 16, 316-319.

51 A Leff "Unconscionability and the Code - The Emperor's New Clause" (1967) 115 U Pa L Rev 485.

52 A Angelo and E Ellinger "Unconscionable Contracts: A Comparative Study of the Approaches in England, France, Germany, and the United States" (1992) 14 Loy of LA Intl and Comp L J 455, 504-505. Leff's fatalistic prediction has thus proved correct (above n 51, 558): "The courts will most likely adjust, encrusting the irratating aspects of the section with a smoothing nacre of more or less reasonable applications".

53 Above n 16, 331-322.

54 See eg above n 36, 798-799.

55 Farnsworth notes however that the more frequent approach is to require a mixture of both aspects (above n 16, 334). See also below, text at n 99. Of course, a range of results can often emerge simply because of the scope for

UNFAIR CONTRACTS - FORM AND SUBSTANCE 13

Thus, the doctrines of good faith and of unconscionability together remain prominent examples of "content-oriented" standards of validity in US contract law.

3.2 English Law

Good Faith

By contrast, English law remains noticeably reluctant to develop a broad duty of good faith. This and the ensuing discussion of New Zealand law picks out some broader points of comparative interest regarding that stance.

Certainly, in Interfoto , Bingham LJ did suggest that cases such as the "ticket cases" went beyond "a question of pure contractual analysis, whether one party has done enough to give the other notice of the incorporation of a term in the contract". His Lordship argued that they were also concerned with the broader question of "whether in all the circumstances it would in all the circumstances be fair (or reasonable) to hold a party bound".56 Bingham LJ linked this latter question to "an overriding principle that in making and carrying out contracts parties should act in good faith", noting the principle's existence in many legal systems. However his Lordship noted that "English law has, characteristically, committed itself to no such overriding principle, but has developed piecemeal solutions in response to demonstrated problems of unfairness".57 His Lordship then listed a number of such solutions, such as equity's control of unconscionable bargains and penalty clauses.

Drawing together various strands that might overlap with, or equate to, a general principle of good faith in English law is not a recent endeavour.58 Partly in response to

diversity in the US federal system (see J Priestley "A Guide to the Comparison of Australian and United States Contract Law" (1989) 12 UNSWLR 4, 5-9.

56 Above, n 19, 439.

57 Above n 19, 439.

58 See the pioneer study by R Powell "Good Faith in Contracts" (1956) 9 Current Leg Prob 16.

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recent developments in EC law, further excellent work has been undertaken.59 Rather than review that work, two examples will suggest that the chances of reformulation as a general duty of good faith in English law nonetheless remain quite slim.

One way of improving those chances may be to give detailed content to such a duty, in the hope of avoiding criticism that application of the duty is simply a matter of unfettered judicial discretion.60 However this runs a risk of overly restricting the opportunity to reconsider the broader contours of the law of contract. For instance, it is now common to begin by stressing that conceptually a duty of good faith is (or should be) more limited than a fiduciary duty. Specifically, the duty of good faith is seen as a duty to "act honestly" and "have regard to the legitimate interests of the other party", whereas the duty on the fiduciary is to place the interests of the beneficiary above its own.61 A sharp distinction is then drawn between contract - supposedly centred on self-interest, even if attenuated in exceptional circumstances by the imposition of a duty of good faith - and fiduciary duty.62

Certainly, fiduciary obligations have differed historically from contractual obligations as to burden of proof, remedies, and so on.63 For immediate practical purposes, those distinctions remain important. But there is a risk in then reasoning backwards. Traditionally, English private law has often developed in this way, which has not necessarily been detrimental to its certain "rational strength".64 But such an approach can obscure areas of actual and potential overlap. This can lead to an overly schematic view of the conceptual bases for each area of law, and thus limit the opportunity for more wide-ranging reconceptualisations.

59 A revival of interest began in Australia in the late 1980s: H Lücke "Good Faith and Contractual Performance" in

P Finn (ed) Essays on Contract (Law Book Co, Sydney, 1987). This was shortly followed by R Goode's admonition ("The Codification of Commercial Law" (1988) 14 Mon LR 135, 151): "It is surely high time that English law adopted a general principle of good faith and cast off its historical shackles."

In England, this led to a more comprehensive overview (J O’Connor, Good Faith in English Law, Dartmouth, Aldershot, 1990), and more attention from J Steyn (“The Role of Good Faith and Fair Dealing in Contract Law: A Hair Shirt Philosophy” [1991] Denning LJ 131). However the main upsurge in interest has only been evident since it became clearer that developments in EC law would impact on domestic law (see eg P Duffy "Unfair Contract Terms and the draft E.C. Directive" (1993) JBL 67).

60 J Carter and M Furmston "Good Faith and Fairness in the Negotiations of Contracts (Part 1)" (1994) 8 JCL 1, 5-6.

61 Above n 60.

62 J Maxton "Contract and Fiduciary Obligation" (1995) Paper presented at the 6th Annual Journal of Contract Law Conference: 'The Changing Law of Contract', Auckland, 14-15 August 1995, 5-6.

63 Above n 62, 9. L Sealy "Commentary on 'Good Faith and Fairness in Negotiated Contracts'" (1995) 8 JCL 142, 144.

64 F Lawson A Common Lawyer Looks at the Civil Law (Ann Arbor, University of Michigan Press, 1955), 141. F Lawson The Rational Strength of English Law (London, Stevens, 1951).

UNFAIR CONTRACTS - FORM AND SUBSTANCE 15

Thus, a Japanese lawyer might well ask whether it might not be simpler to dispense with - or at least tone down - some of the traditional incidents of a fiduciary relationship. Instead, some of those incidents could be absorbed by a broadened duty of good faith. The overall nature of that duty would then be likely to change, and the resources available to pursue new directions to expand, with more wide-ranging implications for the development of contract law as a whole.65

In the US, even those who wish to retain certain distinctions recognise more blurring of the edges between contractual and fiduciary duty.66 No doubt this has encouraged supporters of the "economic analysis of contract law", who argue that fiduciary duties should be subsumed under a contractual analysis.67 Alternatively, it could underpin an extension of "relational contract law".68

By contrast, when considering the principle of good faith in English law, the present preference for a clear taxonomy of fiduciary and contractual duty stifles more expansive reformulations of what is, or should be, seen as central to contractual relationships. All this appears symptomatic of a wider uneasiness in the formal English law tradition towards more substantive legal reasoning.

A second difficulty is apparent from another recent review of areas where the notion of good faith may be immanent within the English law tradition. Waddams argues that there is inadequate justification for a wider duty of good faith.69 His main criticism is that its ordinary meaning would seem to lead English courts into excessive consideration of a party's subjective intentions or motives. This criticism can also be seen as a reaction, 65 As mentioned below (text at n 114 and 115), Article 1(2) has developed a function that is broadly seen as

"equitable", prompting wider jurisprudential debate.

66 D DeMott "Beyond Metaphor: An Analysis of Fiduciary Obligation" (1988) Duke LJ 879, 896-897, 901, 906-911.

67 F Easterbrook and D Fischel, "Contract and Fiduciary Duty" (1993) 36 J Law & Econ 425, 427.

68 C Dickerson ("From Behind the Looking Glass: Good Faith, Fiduciary Duty, and Permitted Harm" (1995) 22 Fla State Uni L Rev 955, 958-9) argues that "good faith and fiduciary duty represent application of the same parameters to facts at opposite ends of a single continuum", criticising the tendency to stress discontinuity. Furthermore, she suggests that one key parameter is the extent to which the structure of the relationship creates power and conflict of interest in the actor (subject to one of these duties) compared to the other party. The other parameter which she believes has been somewhat lost from view is the harm perceived and imposed on that other party. This theory arguably opens the way to a "relational contract" analysis of the structure of the relationship and its inherent norms. See eg I Macneil, "Values in Contract: Internal and External" 78 NWULR 340. See also R Gordon "Macaulay, Macneil, and the Discovery of Solidarity and Power in Contract Law" (1985) Wisc L Rev 565. However, as noted by J Carter and M Furmston ("Good Faith and Fairness in the Negotiations of Contracts (Part 2)" (1995) 9 JCL 93, 119) "the relational feature of contract is not well developed in either Australia or England" - even less so, in New Zealand.

69 S Waddams "Good faith, Unconscionability and Reasonable Expectations" (1995) 9 JCL 55.

16 (1996) 26 VUWLR

representative of a formal approach, against a more content-oriented standard, whose contours would have to be fleshed out, and which might require the English legal system to undertake more substantive reasoning - even on occasion inquiring into matters subjective to the parties.

Waddams instead proposes that the areas reviewed are and should be controlled merely by two principles: protection of reasonable expectations, and unconscionability. Hence he criticises Bingham LJ's suggestion, in the Interfoto case, that the doctrine of unconscionability might be built up into a wider notion equivalent to a duty of good faith.70 But this advocacy of a broadened doctrine of unconscionability is premised on a rejection of what might be even broader content-oriented standard, a general duty of good faith. Furthermore, the availability of other means of protecting reasonable expectations has not prevented the development of such a duty in US law.71

Unconscionable Bargains and Undue Influence

Waddams' alternative proposal of an expanded notion of unconscionability meets with the difficulty that its English law variant has been characterised by piecemeal and limited development.72 This has important practical results. For instance, claims of an unconscionable bargain are highly unlikely to be given much consideratin in cases involving businesses, in contrast to the residual role of unconscionability in the US even in this category. English law's more restricted scope, both historically and in current practice, is thus another indication of its comparative uneasiness about content-oriented standards of validity.

Any consideration of unconscionability under English law should in turn take into account the doctrine of undue influence.73 In practice, many cases involve discussion of both.74 Characteristically, however, English law has again respected the historical development of undue influence as a doctrine separate from unconscionability and other equitable doctrines, again with historically separate remedies. For instance, Bundy is well known for the suggestion by Lord Denning MR that these doctrines might be drawn together by "a single thread ... 'inequality of bargaining power'".75 This new and broadly 70 Above n 69, 61.

71 Above, text at n 42.

72 Above n 69, 460-472.

73 In US law, the expansion of a very broad notion of unconscionability, together with the expansion of the doctrine of economic duress (above n 16, 286), works to reduce the scope of application, and theoretical and practical relevance, of undue influence.

74 See eg Lloyds Bank Ltd v Bundy [1975] QB 326, 337.

75 Above n 74, 337. Interestingly, his Lordship had adverted to American law during argument (above n 74, 333).

UNFAIR CONTRACTS - FORM AND SUBSTANCE 17

worded concept is, if anything, even more content-oriented than either unconscionability or undue influence. But Lord Denning's reformulation has been firmly put to rest.76

More recently, the question has been raised again as to whether and how to delimit the doctrine of undue influence. But the primary orthodox distinction is vigorously reasserted. Undue influence is said to focus on the plaintiff's vitiated consent; unconscionability, on the defendant's overreaching or exploitation of the plaintiff.77

The impetus for this revival of interest is a series of cases culminating in two decisions of the House of Lords.78 They involve a fairly common situation, and are thus of clear practical importance. But they have also led to conceptual difficulties, partly because they involve three, rather than two parties. Typically, the defendant (such as a wife) alleges that the wrongdoer (the husband) has unduly influenced her into entering into a transaction with a third party (the defendant bank), to the sole benefit of the wrongdoer. At first sight, the approach taken by the House of Lords seems bold, a more substantive departure from weighty earlier precedent. For instance, in Pitt, it was doubted whether the doctrine of undue influence should be restricted, just because another equitable doctrine is arguably applicable.79 Further, the requirement that the defendant establish "manifest disadvantage" was abolished.80

Nevertheless, limits are also apparent. The test to decide whether the bank should be held to be "tainted", by constructive notice of the husband's undue influence, was whether "the transaction is on its face not to the financial advantage of the wife".81 Admittedly, the House of Lords was impressed by the need to promote certainty by setting a bright line rule - the "face" of the transaction. It also overtly aimed to set a test which reflected "the current requirements of society". That included the policy argument that joint loans should not be impugned because this would discourage such loans, to the detriment of the 76 National Westminister Bank Plc v Morgan [1985] AC 686, 708 (also cited by Atiyah and Summers, above n 9, 51).

See also J Beatson "The Common Law Today" (1991) JBL 78, 80.

77 N Chin and P Birks "On the Nature of Undue Influence" in J Beatson and D Friedman (eds) Good Faith and Fault in Contract Law (Clarendon Press, Oxford, 1995). Approved by J Beatson "Innovations in Contract: An English Perspective" in P Birks (ed), The Frontiers of Liability, (Oxford University Press, Oxford, 1994), Vol 2, 128, 139.

78 Barclays Bank Plc v O'Brien [1993] 3 WLR 786, CIBC Mortgages Plc v Pitt & Anor [1993] 3 WLR 802.

79 Pitt, above n 78, 808-809.

80 Certainly if actual undue influence is established, and perhaps even in cases where undue influence can be presumed (Pitt above n 78, 807-809). See A Berg, “Wives, Guarantees — Constructive Knowledge and Undue Difference” [1994] LMCLQ 34, 38.

81 O’Brien, above n 78, 798 (emphasis added). Hence the House of Lords found that the agreement could be set aside against the bank in O'Brien, where the wife gave security to secure a loan to her husband's company; but not in Pitt, where she gave the security to obtain a loan jointly with her husband.

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"average married couple".82 "Certainty", and particularly "social needs", can indicate more content-oriented standards. However, it is revealing that further policy arguments were not advanced to determine those assumed social needs, and that the "face" of the transaction is proving problematic.83 Also, limiting the analysis to "financial" benefit excuses the courts from looking into the more intangible - even subjective - aspects of the relationship between the plaintiff and the "wrongdoer". That self-imposed restriction also signals a more formal approach.84 Lastly, the decision in O'Brien to set aside only part of the impugned security - a type of "half measure" - may also be seen as more substantive.85 But subsequent cases restored doctrinal purity, namely an "all or nothing" remedy.86 This implies a formal reaction.

3.3 New Zealand Law

Good Faith

Many of the fears of English lawyers about introducing the notion of a general duty of good faith would be shared by their New Zealand counterparts.

Admittedly, in a short reaction to Waddams' critique, Sir Robin Cooke indicated (extrajudicially) that:

A distinct possibility is that the common law of contract, at least in some at least of its national versions, would unhesitatingly accept the proposition in the Restatement (2nd) of Contract, §205, on good faith], embodying as that does an elementary human notion.

Further, Sir Robin seems to have implied that Waddams' particular fears, of thereby making contract law too subjective, were overstated.87 However one cannot make too much of either suggestion.88

82 Pitt, above n 78, 811.

83 S Goo "Enforceability of Securities and Guarantee after O'Brien" (1995) 45 OJLS 125, 131. A Lawson "O'Brien and its Legacy: Principle, Equity and Certainty?" (1995) 54 CLJ 280, 286 and 288.

84 For instance a more content-oriented test might have been: "whether the transaction is unreasonable to the wife in the light of the particular benefits she obtained from her relationship, and for the wider community". Or, more simply, whether the transaction was against "good faith" or "public order and good morals" (see below, text at n 134-136 and n 161-163).

85 W Young "Half Measures" (1981) 81 Colum L Rev 19.

86 Lawson, above n 83, 284.

87 Above n 3, 9. Sir Robin pointed out that "the difficulty of peering into the human mind leads to something close to an objective standard of good faith", and later that "in default of reliable evidence of actual motive, objective standards would be applied". This might be interpreted as leaving open the possibility of establishing and arguing a party's subjective intentions, in appropriate cases.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 19

Similarly, in Livingstone,89 Thomas J supported Bingham LJ's attempt to unearth from disparate strands of the law controlling unfair contracts something amounting to a general duty of good faith. Indeed, His Honour was prepared to go further, arguing that:90

I would not exclude from our [New Zealand] common law the concept that, in general, the parties to a contract must act in good faith in making and carrying out the contract ... [Lord Mansfield's] tradition was never swamped in the United States as it was in England by the formalism of the 19th and 20th centuries. But the principle has survived, I suggest, as the latent premise of much of our law relating to formation and performance of contracts.

After presenting examples from New Zealand contract law, his Honour concluded that either his or Bingham LJ's "... principle is influential in deciding the question of whether it would in all the circumstances be fair (or reasonable) to hold a party bound by any conditions, or by a particular condition, of an unusual and stringent nature".91

However, Thomas J added these "general considerations" to the main reasoning in the case. Further, the latter reasoning itself contained an alternative argument that has been criticised as reintroducing the doctrine of fundamental breach. Consequently, although this case is unlikely now to be directly overruled, its effect as precedent is likely to be restricted to its more traditional analysis: interpreting the term in question as ambiguous and thus to be construed contra proferentem.92 Finally, a New Zealand commentator has recently criticised "unjustified generalisations", giving as one example the very "generalisation from the defences of fraud and unconscionability to a positive requirement of good faith, particularly in negotiation, which some academics maintain despite denial by the courts".93 The thrust of this criticism might well extend to Thomas J's attempt at generalisation.

88 The former merely involves a "distinct possibility". The latter may require too much reading between the lines,

particularly given New Zealand courts' noticeable reluctance recently to look into subjective factors even when clearly established or at least strongly arguable. See McLauchlan (1996), above n 1.

89 Above n 20, 237.

90 Above n 20, 237-238.

91 Above n 20, 238.

92 Above, n 27. Similarly, although not in the context of exemption clauses, Tompkins J has recently suggested that the trend of authorities does not support Thomas J's obiter statements regarding a general good faith obligation in New Zealand contract law (Isis (Europe) Ltd v Lateral Nominees Ltd & Ors, Auckland HC, CP 444/95, 17/11/95).

93 B Coote, “Contract — An Underview” in B Brown (ed), Contract — An Underview: Souvenir at a Valedictory Lecture 13 (Legal Research Foundation, Auckland, 1995), 26. But cf R Sutton "Commentary on 'Codification, Law Reform and Judicial Development'" (1995) Paper presented at the 6th Annual Journal of Contract Law Conference: 'The Changing Law of Contract' (Auckland, 14-15 August 1995), 1.

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Consistently with this sort of criticism, New Zealand commentators are only beginning to consider the possibilities - and still, at this stage, mostly the perceived limits - in developing a general duty of good faith in relation to the law of fiduciary obligation.94

Thus, the germ of a general duty of good faith may have now been planted and some shoots may be emerging.95 But the development of such a new content-oriented standard in New Zealand contract law appears to face similar obstacles to those encountered in English law.

Unconscionability and Undue Influence

The doctrine of unconscionability in New Zealand also faces obstacles to developing a more substantive orientation. Courts do continue to stress that a finding of unconscionability involves balancing a range of factors.96 However, lower courts have recently latched on to the set of factors and weightings conveniently presented by Tipping J in Bowkett v Action Finance Ltd.97

The factors parallel those culled by Chen-Wishart from a compendious review of Commonwealth case law on unconscionability.98 However, some of her bolder observations have not been developed by New Zealand courts. For instance, although her 94 Eg C Rickett Equity in Commerce (NZ Law Society Seminar Paper, Wellington, 1993), 4-6. But see now

McLauchlan (1992, above n 1, 3), and the more extensive investigation by Maxton (above n 62).

95 See for instance the dicta of Fisher J in Eldamos Investments Ltd v Force Location Ltd and Ors, CP 17/94, Auckland HC, 22/2/95, 11. His Honour appeared to have no difficulty in the concept of having to "negotiate in good faith" stemming from an agreed right either to first negotiations, or to last refusal. As in the US, it may be that the notion of a general duty of good faith imposed by law may come to be more acceptable once NZ courts have developed experience and confidence in defining the contours of duties of good faith agreed on by the parties (Farnsworth, above n 34, 210-212. See also Carter and Furmston, above n 68, 117).

Also, noting the uneasy relationship between a general duty of good faith and fidiciary law, Peterson has recently advocated imposing a general duty of good faith in tort on insurers and the Accident and Rehabilitation Compensation and Insurance Corporation when the latter act in bad faith (above n 37, 206-207). Furthermore, he suggests that New Zealand courts' comparative willingness to now allow damages for mental distress, following a breach of contract, may substitute for such an expanded form of tort liability. In fact, this new remedial flexibility of New Zealand courts in contract cases, combined with calls for a general duty of good faith in tort, may eventually result in the recognition of a general duty of good faith in contract. Japanese law, for instance, has also come to allow damages for mental suffering due to breach of contract (extending article 711 of the Civil Code), while still continuing to develop a general duty of good faith in a variety of contract cases. See Z Kitagawa “Contract Law in General” in Z Kitagawa (ed) Doing Business in Japan (Matthew Bender, New York, 1980ff) §1.15[3][d]; and below, text at n108-114.

96 Contractors Bonding Ltd v Snee [1992] 2 NZLR 157, 174 (per Richardson J).

97 [1992] 1 NZLR 449, 460-1. For instance, this restatement was invoked - if not rigorously applied - in Harlick v ASB Bank Ltd [1995] 5 NZBLC 103,675.

98 M Chen-Wishart Unconscionable Bargains (Butterworths, Wellington, 1989).

UNFAIR CONTRACTS - FORM AND SUBSTANCE 21

work has been instrumental in reinstating "contractual imbalance" or "substantive unfairness" as a factor whose importance tends to be hidden from view, that factor remains limited. At most, it acts as a presumption of overall unconscionability, or diminishes the degree of other "procedural" elements needed (the so-called "sliding scale").99 Yet Chen-Wishart also pointed out that a truly exceptional contractual imbalance may be conclusive in finding unconscionability.100 That point was not taken up even in the Law Commission's draft scheme, proposed in 1990, and itself perceived as going too far regarding the role of contractual imbalance.101 Nor have the courts been keen on the notion of looking into non-financial or subjective factors in determining the degree of contractual imbalance.102 Lastly, New Zealand courts are still extremely unlikely to find unconscionability in cases involving commercial parties.103

Similarly, the contours of undue influence remain quite clearly delimited. New Zealand courts have adopted the framework set out by the House of Lords in Pitt and O'Brien, but have usually managed to dismiss pleas of undue influence raised against financiers.104 Certainly, the High Court's decision in ASB Bank v Harlick focused on the 99 See eg Bowkett, above n 97, 461.

100 Above n 98, 106-107. Admittedly, mostly Canadian or older English authority is cited. But this still contrasts with the more forthright recognition of this possibility in the US (above n 55) and particularly in Japan (below 150a).

101 New Zealand Law Commission "Unfair" Contracts (Law Commission Preliminary Paper No 11, Wellington, 1990). D McLauchlan "Unfair Contracts - The Law Commission's Draft Scheme" [1991] NZ Recent L Rev 311, 321-2.

102 Cf above n 98, 54-6. For instance, see Bowkett (above n 97, 461), Gallen J in the High Court in Snee (above n 96, 162.) But cf Richardson J in Snee, above n 96, 174.

103 Cf above n 98, 35. See eg Walmsley v Christchurch City Council [1990] 1 NZLR 199. In addition, a review of the case law suggests that unconscionability is often raised by a commercial party who is obviously clutching at a last straw or is quite unmeritorious. (An example of the latter is the unsuccessful defendant in Forthwith Shelf Co No 95 Ltd v Alexander & Ors, CP 173/94, Wellington High Court, Ellis J, 4/8/95. The author is grateful to Mr John Wild QC for bringing this case to my attention, although of course this reading of the judgment remains the author's.) A vicious circle can be created, whereby precedents accumulate against the application of the doctrine in commercial settings, followed by even more unmeritorious attempts to invoke it.

104 See Tilialo v Contractors Bonding Ltd (unreported, CA 50/93, 15/4/94), and the reversal of Harlick (above n 97) in ASB Bank Ltd v Harlick & Anor (unreported, CA 46/95, 6/12/1995).

The latter decision is likely to act as a significant brake on arguing similar cases in New Zealand courts, and hence to further doctrinal debate. The judgment notes (at p13) that the appeal was brought by the bank "out of concern for the precedent impact of the judgment in the Court below". The Court of Appeal reversed the High Court's finding of presumed undue influence, on the evidence it alone heard, instead taking a robust view of what constitutes a normal family relationship.

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financier's improper conduct, and therefore implied that the law of unconscionable bargains is subsuming that of undue influence. But critics have argued against this tendency to develop an overarching concept in this way, somewhat bemused by a more explicit and ambitious attempt to do so in the New South Wales Court of Appeal recently.105 Undue influence doctrine's orthodox focus on voluntariness of the complainant's consent is reaffirmed, to distinguish it from the law of unconscionable bargains.106

Thus, as with the suggestion of an overriding duty of good faith, New Zealand lawyers appear cautious about releasing a new standard, broad and content-oriented, into the neatly ordered realm of contract law doctrine. That is a hallmark of a more formal system.106a

3.4 Japanese Law

By contrast, at least at first sight, Japanese contract law appears distinctly open to content-oriented standards of validity in this field. Thus the analysis must begin with the hypothesis that Japanese law exhibits a more substantive orientation along this dimension. In fact, a closer analysis shows that Japanese law has been slow to develop such standards, particularly in regulating unfair contracts on standard forms.

As mentioned above, two of the Dial Q2 cases opened the way to striking down an onerous clause. One view of the Okayama District Court case, in particular, is that it opens Furthermore, the Court of Appeal remains on record for requiring manifest disadvantage even in cases of actual

undue influence (Snee, above n 96, 166), although this has recently been criticised (C Callaghan, "Manifest Disadvantage in Undue Influence: An Analysis of its Role and Necessaity" (1995) 25 VUWLR 289).

105 C Rickett and D McLauchlan "Undue Influence, Financiers and Third Parties: A Doctrine in Transition or the Emergence of a New Doctrine?" [1995] NZ L Rev 328, 332-336.

106 Above n 105, 336-337 and 349-350. In ASB Bank Ltd v Harlick & Anor (above n 104, 5-7), the Court of Appeal reemphasised this distinction, refering also to Birks and Chin (above n 77). Callaghan (above n 104, 302-312) also argues advocates victimisation and inadequate consent as the proper principle underlying the doctrine of undue influence.

Cf R Bigwood "Commentary on 'Undue Influence and Third Parties'" (1995) Paper presented at the 6th Annual Journal of Contract Law Conference: 'The Changing Law of Contract', Auckland, 14-15 August 1995, 9. Bigwood argues that undue influence should now be reconceptualised as focusing on improper conduct or exploitation. However, he does not go as far as to propose a conceptual merger with unconscionability. He still points to "definitional" distinctions (as to presumptions of wrongdoing, etc) and suggests that unconscionability may remain conceptually distinct in arising from cases of deficiencies in judgmental or "rational" capacity. Cf also Chen-Wishart, above n 98, 91-93, 35-44.

106a However the proposal to extend the doctrine of a duty of care in equity, as an alternative means to find financiers liable, could be seen as more substantive. One perceived advantage is to "avoid the all or nothing remedial response based on the inherent proprietary aspects of the notice doctrine" (above n 105, 348-349). See above n 86. But also cf above, text at n 63-64.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 23

the way to more direct consideration of its "unreasonableness". Although still talking of "interpretation" of the parties' "intentions", it was apparently prepared to read the clause down to the point of declaring it unenforceable, even if it could be held to be as clear as NTT had asserted.107 However, particularly from a US perspective, one might have expected a more direct challenge to such onerous clauses in standard form contracts, relying expressly on a general standard similar to good faith or "unconscionability", rather than the more classical technique of "interpretation".

Article 1(2): The Duty of Good Faith

In fact, the broad duty of good faith set out in article 1(2) of the Civil Code has been invoked to justify techniques of contract "interpretation" which sometimes seem to derogate from even the most clearly expressed intentions of the parties. However, the focus is still ostensibly on intentions, and such derogation is increasingly criticised.108 This suggests a formal reaction. It also makes it less surprising that in fact article 1(2) was not expressly relied on in the Dial Q2 cases, against the clause in question.

On the other hand, article 1(2) was specifically - and successfully - argued on a further point, namely the effect of a second clause in the NTT standard form contract. That clause provided for NTT to claim a charge itself, for the use of the telephone in accessing the information provider. The Osaka District Court expressly decided that it would be contrary to "good faith" to allow NTT to rely on it. Once again, a major reason was that the public was not aware of how charges might easily escalate. But the court also called on article 1(2) as further grounds to justify the extra step of tying the second clause to the first, which provided for the new service in association with the information provider and which had already been "interpreted" as unenforceable. Thus, the invokation of article 1(2) to bolster the court's interpretation of onerous contract terms can still be seen as requiring a focus on "interpretation" of the parties' intentions - again, a formal approach. Alternatively, it may indicate a more substantive approach, but one limited by more formal reasoning in first "interpreting" another closely related clause as not to be strictly enforced.

It is therefore relevant to survey other uses to which article 1(2) has been put, in controlling unfair terms particularly on standard forms, to determine whether it acts overall as a content-oriented standard introducing significantly more substantive reasoning into Japanese contract law.

At first sight, article 1(2) appears highly content-oriented. It simply provides: 107 Above n 25.

108 Above n 26. See also K Yamamoto in H Endo, H Mizumoto, Z Kitagawa and S Ito (eds.) Minpo Chukai [Commentary on the Civil Code] 37 (Seirin Shoin, Tokyo, 1989), 52.

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The exercise of rights and the performance of duties shall be done in faith [shingi] and in accordance with the principles of trust [seijitsu].

This seems dangerously broad to a common lawyer, particularly an English or New Zealand lawyer. In fact, ironically, article 1(2) was an amendment made to the Civil Code in 1947, under the Occupation's pro-democracy reforms. However it has roots in Roman law and has been shaped by the civil law tradition; the provision itself is closest to article 2(1) of the Swiss Civil Code.109 Nonetheless, article 1(2) might seem particularly open to moral reasoning. The requirement of "trust" (bonne foi) in article 1134 of the French Civil Code is similar (albeit limited in scope to performance of agreements), and aimed to reinforce the moral principle of pacta sunt servanda.110 Furthermore, even set out in the corresponding broad duty of Treu und Glauben in performance of obligations articles 242 and 157 of the German Civil Code - the original "emperor's clauses"111 - requires consideration of "trade practices".112 Yet in Japan, from its inception in pre-1947 case law and academic writing, the duty of good faith has been taken beyond the individual's moral imperative to faithfully perform assumed obligations. It has extended to faithful enforcement of rights, and hence into more general consideration of socio-political factors and how private law relations should be developed.113 Nevertheless, whether as a window into individual morality or wider socio-political considerations, the wording of article 1(2), its pre-1947 antecedents, and indeed some developments immediately after World War II: all offered a comparatively wide avenue for more substantive reasoning in Japanese contract law.

On the one hand, some connection between the duty of good faith and individual morality remains apparent. One of the duty's generally accepted functions is an equitable one, covering cases that overlap with Anglo-American law's equitable principles of "clean hands", laches, and estoppel - the duty not to act so as to contradict one's earlier acts.114 109 M Yasunaga in T Taniguchi and K Ishida (eds) Chushaku Minpo [Commentary on the Civil Code] 71 (Yuhikaku,

Tokyo, 1988), 71-74.

110 Above n 109, 71. But cf J Gordley The Philosophical Origins of Modern Contract Law (Clarendon Press, Oxford, 1991), 217-227, arguing that the Code was not founded on natural law concepts, nor on any other recognisable philosophical principles.

111 So dubbed ("königliche Paragraphen") by W Hedemann in 1910, because the duty rapidly came to be applied not just as regards performance of obligations, but also as regards the enforcement of rights (above n 109, 72).

112 Verkehrssitten.

113 K Yamamoto "Shingizoku, Kojoryozoku [The Duty of Good Faith, and Public Order and Good Morals]" (1992) 144 Hogaku Kyoshitsu 42, 43. Further, as with Article 90, the duty of good faith has also appealed to jori (below n 152).

114 Above n 108, 44-50.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 25

This leads to fruitful jurisprudential discussion even among civil law professors in Japan as to the role of such a function in these cases, in the context of an overarching duty of good faith.115 Furthermore, for instance in the estoppel cases, it leads to interesting attempts to reconcile the more subjective focus on one party's prior and subsequent conduct per se, as opposed to the more objective approach of protecting the other party's reasonable expectations stemming from the first party's prior acts.116

On the other hand, although the duty of good faith is broadly worded, it is hardly boundless. In fact, a second function of the duty of good faith in Japanese law has been simply to expand on the often rather sparse provisions and concepts of the Civil Code.117 This function is particularly evident as regards performance of obligations. Similarly to US law, for instance, it applies a type of de minimus doctrine to performance,118 and supports the notion of exemptio.119 The function is also evident regarding the exercise of rights, as when the duty of good faith takes into account the obligee's (right-holder's) duty to cooperate in the obligor's performance, to cure a minor defect in the latter's notification of readiness to perform.120

More ambitious, perhaps, is a willingness at times to invoke the duty of good faith to develop new conceptual categories, such as the notion of "duties incidental to the obligation of performance" (fuzuigimu) or even wider "duties of protection" of life and property (hogogimu).121 But these still stem from a fleshing out of the nature of performance obligations, and have been met in turn by complex conceptual reformulations 115 Above n 108, 39-41. This contrasts with the tendency of English and New Zealand lawyers to delimit boundaries

of equitable principles vis-a-vis any suggested duty of good faith, without embarking on wider jurisprudential inquiry. Above, text at n 61-62.

116 For instance, in some intended cases the issue can turn solely on the former question, with strong criticism directed at the first party's subjective behaviour. However, in other cases, a type of "sliding scale" may be adopted: less strongly objectionable behaviour may be supplemented by some lesser reliance by the other party, to make out a breach of this aspect of the duty of good faith (above n 108, 45). Both lines of reasoning may well be found in other cases involving the duty of good faith. This might allay Waddams' fears (above, text at n 69) that recognising such a general duty in the English law tradition would involve particular difficulties and risks for courts having to deal with one party's subjective motivations.

117 Above n 108, 57-62. More generally, see Z Kitagawa Minpo Koyo (1) - Minpo Sosoku [Civil Code Lectures (1): General Part] (Yuhikaku, Tokyo, 1993) 18.

118 This restricts what constitutes a breach, under the requirement of article 415 to perform "in accordance with the tenor and purport of the obligation", and the grounds for termination under article 541.

119 Article 533. Cf the concept of "concurrent conditions" in Anglo-American law: G Treitel Remedies for Breach of Contract: A Comparative Account (Clarendon Press, Oxford, 1988), 276-285.

120 Cf article 493 proviso.

121 Above n 108, 54-55.

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by Japanese academics. Also noteworthy is the recent emergence in the case law of a pre-contractual duty of culpa in contrahendo (keiyaku teiketsujo no kashitsu), even though - as in the UCC - Article 1(2) refers only to performance of obligations.122 But again the contours of this doctrine have now been thoroughly discussed and reconceptualised.123

It is also widely admitted that the duty of good faith can have broader functions, namely in "correcting" and "creating" law beyond that provided for in the Code. An example of the latter is the development of the "doctrine of changed circumstances" (jijo henko no gensoku).124 This doctrine was created to cover situations perceived as going beyond the notion of "non-imputable impossibility" provided for by the Civil Code framework. But the various requirements for invoking the doctrine, and to a lesser extent its effect as relief from obligations, were largely established well before 1947.125 Further, the doctrine witnessed a peak in the economic and social turmoil immediately following World War II. Overall, it has found little favour in Japanese courts.126 This pattern supports the general observation that the more overtly "creative" function of the duty of good faith has been developed rather restrictively in Japanese law.127 Similarly, a doctrine which developed to limit termination of leases to "breakdown in the trust relationship" (shinraikankei hakai no hori), seems to serve a more wide-ranging "correcting", a perhaps even "creative" function128. But this doctrine has attracted much academic comment and attempts to restrict its scope - to clarify the types of situations in which it could be invoked, and on what specific grounds.129

Admittedly, this latter doctrine has seen a revival in new types of contractual relationships, particularly distributorships and franchise contracts.130 In this run of cases, often drawing on the duty of good faith, termination has generally come to be permitted if there has been a "transactional breakdown"; but mostly subject to an obligation to give 122 Above n 108, 56-57.

123 S Kawakami "Japan" in E Hondius (ed) Precontractual Liability 205 (Kluwer, Deventer, 1991).

124 Above n 108, 51-52.

125 H Kubo "A Comparative Study of the Basic Concept of Impossibility under Japanese, American and Uniform Law" [1991] Sandai Hogaku 567.

126 Nottage (1996), above n 1.

127 Above n 108, 42.

128 Cf the basic right to terminate "at will" for non-performance (article 541); Yamamoto, above n 113, 50.

129 Above n 108, 50-51, 62-64.

130 V Taylor "Continuing Transactions and Persistent Myths: Contracts in Contemporary Japan" (1993) 19 MULR 352-398, 380-383.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 27

reasonable notice and, often, to pay some compensation.131 Furthermore, the inquiry of the Japanese courts into the "transactional breakdown" can be extensive. For instance, in 1977 the Tokyo District Court held against a wholesaler who attempted to terminate a retailer's contract, unilaterally and without notice, despite its having no fixed term. The court held that:132

where there is no relevant serious reason, a wholesaler who requests termination merely for his own benefit, or who stops delivery of foods, is in fact forcing the collapse of the retailer. The request for termination in effect damages the retailer's right to operate, and violates the wholesaler's obligations to act in good faith [article 1(2)] and in accordance with public welfare and good morals.

Taylor cites this passage and this case as indicating the scope that Japanese courts have to "... scan the agreement for its impact on the weaker party - the fairness principle at work", giving the courts "... a basis for examining the actual nature of the parties' relationship".133 Of particular comparative interest is that the court signalled a desire to temper the terminating party's pursuit of self-interest. It thus indicates a preparedness, or at least a possible avenue, for Japanese courts to occasionally take into consideration subjective motivation as well as more objective factors. But, as with its precursor doctrine of "breakdown in the trust relationship", this particular manifestation of the duty of good faith may well have already spent its primary impetus in injecting significantly more "substantive" reasoning into contemporary Japanese contract law.

The same might be said of a further set of cases that have been dealt with under the principle of good faith, namely a guarantee given by a third party to the creditor for the benefit of the primary debtor. Underlying these cases is not only an awareness that the relationship between guarantor and principal debtor can be emotionally charged and therefore risky for the guarantor - an awareness which also underlies recent English undue influence cases such as O'Brien and Pitt - but also a willingness to inquire into, and directly police, the actions of the guarantor.134 Thus, for instance, in 1932 it was held that if a guarantee was for an indefinite term, the guarantor's obligations ceased when notice of termination had been given after a reasonable period, but the creditor continued to supply credit to the primary debtor. However, this sort of case is seen either as illustrating another creative use of article 1(2), or in more traditional terms, as a problem of interpretation of 131 Above n 130, 383-384.

132 Above n 130, 383.

133 Above n 130, 383.

134 Above n 78. In contrast, English law has been reluctant to pursue the latter possibility (J Phillips "Guarantees: The Effect of Creditor's Prejudicial Conduct towards the Guarantor" (1990) JBL 325).

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the contract.135 A similar ambiguity is apparent in another type of case where a right of immediate termination was recognised due to an extreme change in circumstances in the primary debtor's financial situation that the guarantor was held not have been able to foresee. Once again, the court in question relied on the duty of good faith, but other courts have taken the more traditional route of interpreting the parties intentions.136 Furthermore, although a similar result was reached in cases of guarantees of a lease contract, the difficulty of arguing sufficient changes of circumstances in Japanese law must be remembered.137

Uchida sees these types of cases as a good example of Japanese law's willingness to develop new concepts to recognise underlying social concerns, namely protection of the guarantor.138 But we have seen that they can be approached from a more formal perspective. Also, as Uchida goes on to admit, a significant proportion of these cases - certain guarantees given by employees - quickly came to be regulated by special legislation.139 Uchida argues that this legislation was distinctive in allowing for wide judicial discretion.140 However, the very fact of shifting control of potential contractual unfairness to the legislative arena tends to impart more "formality" to the system.141 At the very least, it works to restrict more vigorous growth of the broader doctrine of good faith. In fact, such a restrictive tendency continues to be evident, as in more recent types of cases where good faith is invoked.142 Lastly, all these types of cases involve third parties. Apparently, the duty of good faith has not played the major role in directly regulating unfair contract terms between two parties, in a way that unambiguously points to a tendency towards the highly substantive approach advocated by scholars such as Uchida.

In sum, the duty of good faith in Japanese law has largely developed incrementally, into reasonably distinct groups of cases, in a way that - like the "fine print" doctrine - can often be quite readily encompassed within a formal approach. At the same time, it at least 135 Above n 108, 60.

136 Or of interpreting Article 589. Above n 108, 60.

137 See the cases cited in Yamamoto, above n 108, 61. Above, text at n 125-126.

138 T Uchida Keiyaku no Saisei [The Rebirth of Contract] (Kobundo, Tokyo, 1990), 230-231.

139 Employee Guarantees Act (Mimoto Hosho Ho), Law No. 42, 1933.

140 Above, n 137, 233-235.

141 Atiyah and Summers argue (above n 9, 96-97) that by its very nature, legislation tends to have higher "rank formality", "content formality" and "mandatory formality". But also cf above n 35.

142 These tend to be consumer contracts, where a "creative" function is apparent as the social goal of promoting of consumer protection. However, once again, some important issues soon came to be covered by legislation. Above n 108, 64-65.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 29

allows courts and commentators a foothold to develop a more substantive approach.143 This opportunity follows from the broad wording of article 1(2), its history as both moral principle and window into socio-political factors, and the sheer quantity of case law refering to the duty - however much in passing.144 Furthermore, in some of its manifestations the duty of good faith has been refined in purely commercial cases, making it easier for Japanese courts to invoke it in other manifestations to police contractual relationships between businesses, as well as those between individuals. Nevertheless, this brief review suggests that Japanese law has tended to impart less substantive reasoning than its counterpart in the US. Further evidence of significant "substantive" regulation of unfair terms in Japanese contract law must be sought elsewhere.

Article 90: "Public Order and Good Morals"

Article 90 is an obvious candidate.145 As with article 1(2), it potentially amounts to a highly content-oriented standard, and hence another mechanism opening the Japanese legal system to more substantive reasoning. Article 90 provides that:

A juristic act which has for its object such matters as are contrary to public order [oyake no chitsujo] or good morals [zenryo no fuzoku] is null and void.

It also has solid roots in the civil law tradition. However, a comparison with the corresponding article 138 of the German Civil Code (BGB), for instance, suggests that article 90 is a more content-oriented standard.

First, a component common to both article 90 and BGB article 138(1), the standard of "good morals" (zenryo no fuzoku or gute Sitten), opens the path to consideration of moral questions. Indeed, its German proponents spoke of gute Sitten as promoting "moral interests", while critics in Japan argued that what became article 90 would dangerously conflate morality and law.146

Secondly, however, article 90 adds a second component: "public order" (oyake no chitsujo). This component was deleted from the first draft for BGB article 138. The draft had been criticised for its perceived lack of clarity, particularly in the light of its short 143 Hence eg Uchida's recent argument that the duty of good faith calls for a version of "relational" contract theory,

underpinned by communitarian moral philosophy. Above n 1, 133-135.

144 Kitagawa, above n 95, §1.07[2][d].

145 So is article 1(3), restricting "abuse of rights" (kenri no ranyo). But this has exercised even less control over "unfairness" in contractual relationships. Instead it has been prominent in regulating real property rights. See eg K Sono and Y Fujioka "The Role of the Abuse of Right Doctrine in Japan" (1975) 35 La L Rev 1037.

146 K Hayashi "Doitsuho ni okeru Ryozokuron to Nihonho no Kojoryozoku [Public Order and Good Morals in Japanese Law, and the Theory of Good Morals in German Law]" (1992) 64 Horitsu Jiho 244, 245.

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history.147 But supporters had responded that this component could be used to identify "general interests of the state", relating to fundamental rights inherent in the legal order.148 In fact, this is how it was seen by its proponents when included in article 90 of the Japanese Civil Code.149 Thus, although inviting a consideration of more objective factors than in the case of "good morals", the inclusion of the still quite novel component of "public order" also opened article 90 to more substantive reasoning.

Third, article 90 does not list specific requirements, such as those now contained in BGB article 138(2): "exploitation of the distressed situation, inexperience, lack of judgmental ability, or grave weakness of will of another".150 This has led to broader application of this article, compared to article BGB 138. On the one hand, legal theory and caselaw development in Japan has interpreted article 90 widely, so as to cover the "usurious" transactions that BGB article 138(2) had been specifically drafted to cover. On the other hand, by not listing more specific requirements as in article 138(2), article 90 has been able to avoid the German law's tendency to interpret those requirements restrictively. Thus, as with some US unconscionability cases, Japanese courts have allowed relief where there is no obvious weakness exploited, but a grossly disproportionate bargain.150a In sum, even a brief comparison with a similar civil law system generally supports the initial impression of article 90 as a highly content-oriented standard in Japanese contract law.

This may not have been the framers' original intent. They appear to have taken a restrictive view of the scope of article 90, seeing it as an exceptional restriction on the primary principle of party autonomy.151 However, academic commentary soon began to view article 90 more expansively, as an overriding principle constraining party autonomy. Similarly, case law soon went beyond questions primarily of individual morality, such as 147 Dating back only to the French Civil Code of 1804: Above n 146, 246.

148 Above n 146, 247-248.

149 Above n 108, 42.

150 Translation by M Bonell An International Restatement of Contract Law: The UNIDROIT Principles of International Commercial Contracts (Transnational Juris Publications, Irvington, NY, 1994), 102. These requirements were in fact broadened by an amendment to the German Civil Code, following the enactment of the Law on the Regulation of Standardised Contract Terms (AGBGe) on 9 December 1976. Previously, requirements were defined as exploitation of "the need, carelessness or inexperience of another" (translation by Angelo and Ellinger, above n 52, 483).

Note that the latter translation and ensuing discussion relates to article 138(2) prior to this amendment. However their main point holds. Despite the amendment, the listing of specific requirements continues to undermine the development of article 138(2) (see Hayashi, above n 146, 247).

150a Above n 146, 247.

151 Above n 113, 42.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 31

contracts harming family life, and beyond questions regarding the minimal interests of the state, such as contracts to further criminal activities. Article 90 began to be invoked as a means of policing fairness in a wider range of transactions, commonly grouped as usurious. That category included not just excessive interest charges, but also cases involving certain employee guarantees (mimoto hosho) and one-sided contract terms. Overall, commentators largely contented themselves with grouping these cases into such broader categories. As a common thread, article 90 was seen to turn simply on "social appropriateness" (shakaiteki datosei), sometimes linked to the even broader standard of "natural reason" (jori).152

However, as with article 1(2), a closer analysis of reported article 90 cases reveals limits. A useful illustration is provided by the cases that came to be grouped under the usurious category, as they can be assumed to have often involved standard forms and particular unfair contract terms. First, a few employee guarantee cases emerged prior to World War II, but all but one were unsuccessful. These early issues would have been largely resolved by legislation in 1932.153 Second, a similar pattern is evident in pre-War cases involving usurious interest rates or excessive liquidated damages clauses. Only 5 out of 26 were successful, and problems of usurious interest rates were then largely addressed by the Interest Rate Regulation Law.154 Challenges to excessive liquidated damages clauses were no doubt limited by an initially strict approach to the remedy under article 90, namely total invalidity.155 Third, only 2 of 18 pre-War cases successfully invoked article 90 to strike down "one-sided clauses". Overall, legislative intervention and a rather strict approach to article 90 seem to have stunted its initial expansion within this category.

However, even after the introduction of the Interest Rate Regulation Law in 1954, Nakaya reports that there remained a total of some 185 cases in a roughly similar category (covering "Indiscretion and Exploitation") through to 1990. These had a success rate of over 50%.156 Many will have involved more challenges to excessive liquidated damages clauses 152 H Orita "Senzen Hanrei ni okeru Kojoryozoku [Public Order and Good Morals in Pre-War Caselaw]" (1992) 64

Horitsu Jiho 61. Jori is another civil law concept (Natur der Sache), associated with natural law theory. However it may also have been interpreted by its early Japanese proponents in more indigineous terms. In 1875 it arguably achieved the status as another direct "source of law". See H Tanaka Introduction to Japanese Law 1972), 125, 175-177.

153 Above n 139.

154 Risoku Seigen Ho, Law No. 100, 1954.

155 H Nakaya "Sengo Hanrei ni okeru Kojo Ryozoku [Public Order and Good Morals in Post-War Caselaw]" (1992) 64 Horitsu Jiho 73, 79.

156 For the period 1955-89, 101 of the 185 successfully invoked article 90. Above n 155, 75.

32 (1996) 26 VUWLR

or "one-sided clauses".157 Matching this development, article 90 has increasingly been interpreted as allowing for partial invalidation, namely of the offending clause (or part thereof) rather than the entire contract. This underpins continued attempts to use article 90 to challenge excessive liquidated damages clauses,158 which US and English law have had to regulate more indirectly by the device of striking down "penalty clauses".159 Nonetheless, one should not overlook the initially restrictive approach of Japanese courts to this sort of challenge, nor underestimate the strength of the criticism that they are acting arbitrarily when drawing the line of partial invalidity. Consequently, the courts may still be reluctant to support direct challenges to liquidated damages clauses, unless the task is made easier by other legal grounds or by particular facts.160

Another post-War development of comparative interest in this category has been the "bar hostess guarantee" cases. At least 11 cases have successfully challenged guarantees of clients' food and drink bills, given by bar hostesses to their managers. The courts have been critical of managers abusing their superior position, and transferring the risk of non-payment by clients to their employees, a risk that is perceived as inherently falling on the managers themselves.161 This in itself is a more substantive approach. But so was the approach of the Supreme Court in 1986, when it refused to invalidate the contract in question.162 That decision is seen as justified by the close and special relationship that existed between the particular hostess and client. This constrasts sharply with the undue influence cases in the House of Lords, and the unconscionability cases in New Zealand. It 157 However Nakaya's category appears broader than Orita's pre-War category of "Usurious Acts". It probably

includes the cases like the Tokyo District Court decision cited above (n 132), and almost certainly the "hostess guarantee" cases (below, text at n 161-163), as Nakaya's remaining category ("Others") contains so few cases for the relevant period.

158 See eg the agency case discussed by Taylor (above n 130, 389-390), where only 25% of the liquidated damages amount claimed was awarded.

159 Atiyah and Summers (above n 8, 51) give the regulation of penalty clauses as a further example of a more content-oriented standard of validity in US contract law. (This is also mentioned in Interfoto and Livingstone, above n 19 and 20.) Overall, this means of regulation is more "formal", in finding the validity of such clauses solely in the "source" of the parties' agreement at the time of contracting (see also below n 186). However, aspects of the US law do appear more "substantive", compared to English law (see eg Treitel, above n 119, 229-33).

160 For instance, the task of drawing the line and finding a term to be only partially invalidwas made easier in a recent case in the Kobe District Court (judgment of 20 July, 1992). The court allowed enforcement of only one half of the lump sum liquidated damages claimed by a franchisor. The court stressed the fact that the franchisor had subsequently varied an identical contract with another franchisee, agreeing to reduce the liquidated damages by exactly one half.

161 Nakaya, above n 155, 75.

162 Judgment of 20 November, 1986.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 33

suggests a greater willingness of Japanese courts to delve into the entire relationship - including its non-financial elements - to determine the actual benefits intended or enjoyed by the parties in each particular case. Lastly, a flexible approach to achieving more substantive justice in such cases is evident in other decisions that that allow the hostess to claim money back from the manager, despite having invalidated the underlying guarantee.163 On the other hand, since 1985 the bar hostess cases hardly figure among reported court cases.

A final important development in the post-War case law is the increased challenge to particular "one-sided clauses", especially exemption clauses in standardised agreements. In 1982, an influential commentator urged Japanese courts to invoke article 90 more vigorously to strike these down. The reasoning was highly substantive: article 90 was a flexible standard that should move with the times and give more weight to consumer protection values.164 However, critics pointed out that this proposal ran counter to the reticence of the courts to invoke article 90 in this area, and reemphasised its traditional conceptual limits.165

Among those cases that continue to challenge exemption clauses, many have applied either or both article 90 and the duty of good faith.166 The post-War development of partial invalidation as a possible remedy under article 90, and its application in more commercial cases, have encouraged the courts to more actively promote fair dealing between particular parties.167 This has traditionally been the preserve of the duty of good faith. However such cross-overs have attracted considerable concern from commentators, who have generally attempted to reinstate the original conceptual differences between the two articles.168 Furthermore, courts seem careful to respect the fundamentally different legal consequences provided for in the two articles: article 90 provides for invalidation, whereas article 1(2) merely limits rights. In particular, for instance, when the consequences of applying former later prove to be unpalatable, they have switched to applying the latter.169

163 Above n 155, 79-80.

164 I Kato Minpogaku no Rekishi to Kadai [Civil Code History and Issues] (Yuhikaku, Tokyo, 1982). Professor Kato was a leading exponent of the "balancing of interests" methodology in Japanese civil law theory, which is open to more substantive reasoning. See G Rahn Rechtsdenken und Rechtsauffassung in Japan [Legal Thought and the Conception of Law in Japan] (C H Beck, München, 1990), 248-264.

165 Above n 108, 104.

166 Such as contracts of carriage: above n 155, 77-78.

167 Above n 155, 74. Also recall the 1977 termination case (above, n 132) which applies both articles.

168 See also Y Yamamoto above n 29, 103 and 106-107.

169 Above n 155, 87.

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Finally, the courts have often dealt with problem areas with potentially widespread repercussions, such as insurance contract standard forms, with techniques of contract "interpretation".170 Commentators do note that even "restrictive interpretation" runs into difficulties when an agreed clause is is absolutely clear; but there is a concern lest application of article 90 be taken as widespread opprobrium of practices in an industry.171 Overall, the trend in these areas also indicates a formal tendency.

Nakaya points out that the difficulty in drawing a line between article 90 and article 1(2) is reduced in practice, by problem areas being "siphoned off" to be addressed through legislation as well as techniques of contract interpretation. This also tends to invite a more formal approach, particularly in Japan where the law-making process in the areas under review does not seem to have been as politicised as in the US. This strengthens the conclusion that article 90, like article 1(2), has not led to quite the degree of substantive reasoning that might be anticipated from an initial reading. This more formal side to the development of article 90 may help explain why it has apparently never been invoked in the Dial Q2 cases. It could be seen as too "aggressive"172 - or, put more theoretically - as too direct an application of a content-oriented standard.

4. The General Approach to Legislative Intervention to Control Unfair Contracts

An overall pattern begins to emerge, particularly from the still tentative analysis of the development of doctrines of good faith and unconscionability. US law prefers a highly substantive approach. Japanese law takes a substantive approach, tempered by a formal dimension evident from a closer analysis of actual developments. New Zealand and English law tend to retain a resolutely formal approach. This pattern seems to be reinforced by each legal system's approach to the question of legislative intervention to control unfair contracts.

More extensive legislation based on broadly worded content-oriented standards of validity would indicate a more substantive approach. Piecemeal, more tightly drafted legislative intervention would indicate a more formal approach, particularly in the light of Atiyah and Summers' point that legislation by its very nature tends to promote other dimensions of formality within a legal system.173

The United States

170 Above n 26 Y Yamamoto; above n 29, 103.

171 Above n 29, 107, 103.

172 The author thanks Professor Tsuneo Matsumoto for this phrase.

173 Above n 141.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 35

It is therefore significant that the development of US law in this field remains largely driven by general doctrines of good faith and unconscionability. Certainly, as mentioned above, legislation has been enacted at both state and federal levels to regulate particularly acute problems with specific types of contracts, commonly in standard form, such as distributorships and employment contracts. But that legislation retained noticeably content-oriented standards, built on earlier caselaw developments, and is itself the result of and part of a visibly political process.174 Otherwise, there is general satisfaction with what remains, on the whole, a comparatively broad and substantive approach. This can also be seen in aspects of the ongoing work by the Study Group of the Permanent Editorial Board (PEB) on amendments to article 2 of the UCC.

First, its Executive Report did not recommend any significant changes to the present §2-316(2), which requires that written disclaimers be "conspicuous". Its interim report had tried to dilute this requirement, by adding that even if the disclaimer could not be said to be conspicuous, it would be valid if the buyer knew of it.175 It is not surprising that this proposition was deleted in the Executive Report. US commentators' early appreciation of the problem of how to deal with such an alert - but "weaker"- contracting party underpinned the later emergence of more direct regulation of unfair terms under broad standards of unconscionability, not just by focusing on the parties' agreement.176

Second, there was little momentum by the PEB Study Group to overhaul the broad standards of unconscionability laid down in the UCC.177 Indeed, its Preliminary Report proposed that §2-308 be transferred to the more general Article 1, as a guiding principle for the whole of the UCC, not just for Article 2 on sales.178 Furthermore, the majority rejected the proposition that the provision differentiate between consumer sales and sales between merchants.179 This tends to confirm the impression that unconscionability in US law 174 Above text at n 35-40.

175 H Sono "UCC Dai Ni Hen (Hanbai) no Kaisei Sagyo ni miru Gendai Keiyaku Ho no Ichi-Doko [The Revision of UCC Article 2: PEB Study Group Reports, Llewellyn's Rich Legacy, and Modern Contract Law] (1)" (1994) 44 Hokudai Hogaku Ronshu 837, 886.

176 Above, text at n 50.

177 Cf J Murray "The Revision of Article 2: Romancing the Prism" (1994) 35 William and Mary L Rev 1447, 1496-1497.

178 The effect of §2-719, as a basis for invalidating exemption clauses regarding personal injury, is also largely retained in the Executive Report: H Sono "UCC Dai Ni Hen (Hanbai) no Kaisei Sagyo ni miru Gendai Keiyaku Ho no Ichi-Doko [The Revision of UCC Article 2: PEB Study Group Reports, Llewellyn's Rich Legacy, and Modern Contract Law] (2)" (1994) 44 Hokudai Hogaku Ronshu 1293, 1299-1300.

179 Above n 178, 1307.

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remains available as a residual technique for controlling unfairness, even in commercial situations.180

Finally, the role of the duty of good faith has also been largely confirmed. The Executive Summary confirms that rejection under §2-601 must be in good faith, in derogation of the strict "perfect tender rule".181 A minority even suggested more generally that the revised UCC adopt a type of "material breach" framework.182 Furthermore, the majority insisted that termination of continuing supply contracts "at will", under §2-309, be done in good faith.183 There is some attempt to reemphasise the objective aspects of the inquiry, but that itself can be substantive in orientation as well.184 Thus, the duty of good faith under any revised UCC article 2 promises to remain an broad "content-oriented" standard playing a significant part in contemporary US contract law.

England

Atiyah and Summers admit that the enactment of the Unfair Contracts Terms Act 1977 (the UCTA) does import more content-oriented standards of validity into this area of English contract law, in particular through its test of "reasonableness" for exemption clauses.185 However they suggest that the UCTA will continue to be interpreted in the narrow, formal fashion representative of the English law tradition. It is certainly important not to over-estimate the role of the UCTA in changing the tenor of English contract law in this field.

As Adams and Brownsword admit, the scope (or "sweep") of the UCTA remains restricted by requiring "reasonableness" of the clause to be tested when the contract was concluded.186 By directing the focus of inquiry to that point of time, to a more specific 180 Above text at n 54.

181 However it proposes to retain the rule in consumer sales, as a protective measure (above n 175, 885-886).

182 Proponents alluded to the similar 'fundamental breach" concept in article 25 of the Vienna Sales Convention

183 Also, notice must be given or the bargain may be held unconscionable under §2-309(3) (above n 178, 1330).

184 The Preliminary Report proposes to expand §2-103 (refering to the more "objective" indicators of fair dealing in the trade) to encompass non-merchants as well as merchants, and to introduce more objective indicators into §1-201 (presently refering to the more "subjective" indicator of "honesty"). Above n 178, 1335-1336. Also see S Burton "Good Faith in Articles 1 and 2 of the U.C.C.: The Practice View" (1994) 35 William and Mary L Rev 1533, 1561-1563.

185 Above n 9, 52. Foreign observers have tended to see the UCTA in this light: see Kötz (above n 6, 4-5). Also, in Interfoto (above n 19, 439), Bingham LJ alludes to the UCTA as another "piecemeal solution" to the general problem of unfairness in English law.

186 J Adams and R Brownsword "The Unfair Contract Terms Act : A Decade of Discretion" (1988) 104 LQR 94, 116.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 37

"source", this can be seen as a formal restriction. Furthermore, they argue that the UCTA implies a restriction in "pitch":187

judges should try to infuse some degree of consistency and generality into their rulings and, in particular, should avoid a one-off approach to the regulation of commercial standard form exemptions.

If this is so, it can be seen as restricting the scope for inquiry into more subjective considerations, an additional avenue for more substantive reasoning. Lastly, Adams and Brownsword do point out that one strand of the caselaw may be taking a more expansive view. But they criticise this development as leaving too much judicial discretion, and highlight a more restrictive strand in the case law as well.188

The restrictions of the UCTA can be further brought out by a brief comparison with the EC Directive on Unfair Terms in Consumer Contracts.189 The UCTA is largely limited to the regulation of exemption clauses, not the broad spectrum of clauses covering agreed remedies. Nor does it extend to insurance contracts, a major category of consumer contract.190

In turn, the Directive has its limitations. First, article 5 requires terms to be "plain" and "intelligible", and construed contra proferentem. But Collins argues that this can justified by the more limited notion of "market failure", and sees article 5 as "the formal test" required by the Directive. This parallels the point developed above, namely that the "fine print" doctrine and certain techniques of contact interpretation can be quite readily reconciled with a "formal" approach to contract law.191

Collins argues that article 3(1) sets "the substantive test", but notes limits. First, although it challenges terms that cause a "significant imbalance" in the parties' rights and obligations under the contract, the focus is only on the subsidiary and collateral obligations (warranties, conditions, exemption clauses and agreed remedies), and whether they are balanced in some way in the consumer's favour. Pursuant to article 4(2), the Directive does not cover the principal obligations, such as the nature of the goods or the price. Thus, Collins suggests that its motivation as promoting "substantive fairness" in exchange is 187 Above n 186, 116.

188 Above n 186, 97-99, 104-105.

189 93/13/EEC. Brought into force in England by the Unfair Terms in Consumer Contracts Regulations 1994 (S.I.1994 No 3159) on 1 July 1995.

190 H Collins, “Good Faith in European Contract Law” (1994) 14 OJLS 229, 241-242. See also D Yates "Commentary on 'Two Concepts of Good Faith'" (1995) 8 JCL 145, 149, 151.

191 Above n 22.

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limited, and certainly does not extend to "social market" objectives aiming to raise overall minimum standards in the market for goods. However, he suggests that the latter objectives might be read into the second requirement of article 3(1), the requirement of good faith. The Preamble suggests an underlying principle promoting broader "solidarity" in contracting in consumer markets. But he acknowledges that a more "formal" reading of good faith is also possible, limiting the requirement to procedural fairness in the bargaining process, and perhaps to the regulation of "fine print" problems - again seen in terms of "market failure". This makes it more than "arguable that [the direct reference to good faith in the Directive] will have profound effects on the English law of contracts".192 Finally, there may be a particular risk of conflicting readings when an English lawyer approaches a Directive, the product of EC law and Continental conceptions, using English techniques of statutory interpretation.193 Thus, in the case of the Directive, even superficially content-oriented legislative standards run the risk of not being consistently applied in a "substantive" manner within the English law system. That pattern of development would support the Atiyah and Summers’ general proposition.

New Zealand

Impetus towards a more substantive approach in the wider legislative reform process in New Zealand is, if anything, even weaker. Discussion about the possible contours of a duty of good faith is circumscribed, lacking the stimulation of a major outside development like the EC Directive in England.194

The criticism of the Law Commission's draft scheme for regulating Unfair Contracts has already been mentioned.195 Its demise is now seen as resulting in part from its attempt to propose a reconsideration of philosophical underpinnings in contract law.196 That such a tentative attempt to do so elicited such a response marks a strong contrast to the 192 Beatson, above n 77, 143.

193 See S Bright and C Bright "Unfair Terms in Land Contracts: Copy Out or Cop Out?" (1995) 111 LQR 655, and M Attew "Teleological Interpretation and Land Law" (1995) 58 MLR 696.

194 Article 7(1) of the Vienna Sales Convention (in force in New Zealand from 1 October 1995) requires the Convention - not necessarily the parties' sales contract - to be interpreted so as to promote "the observance in good faith in international trade". However as the New Zealand Law Commission has noted (The United Nations Convention on Contracts for the International Sale of Goods: New Zealand's Proposed Acceptance (Wellington, 1992) §100), the confusing wording represents a compromise. (See also E A Farnsworth, Paper presented at the Eason-Weinmar Colloquium on International and Comparative Law: "Duties of Good Faith and Fair Dealing under the Unidroit Principles, Relevant International Conventions and National Laws" (1995) 3 Tul J Intl and Comp L 47, 56-57.) Other than the Commission's report, there has been no published discussion whatsoever in New Zealand regarding this concept of "good faith", now incorporated into New Zealand law.

195 Above n 101.

196 Sutton, above n 93, 3.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 39

Japanese experience, where a similar opportunity has been taken in stride and has eventually led to some revival - now perhaps with sounder jurisprudential grounding - at the practical level of impetus for legislative reform.197 New Zealand's experience is thus consistent with a more formal approach.

Lastly, one noticeable change in this part of the contract law landscape in New Zealand is the enactment of the Consumer Guarantees Act 1993. By insisting that certain guarantees cannot be contracted out of in consumer sales, the Act imposes new norms of contract validity.198 But, compared to the EC Directive, it has emerged with little debate on possible underlying rationales. This hampers its potential for injecting more substantive reasoning into New Zealand law. Further, given the Act’s limited scope and occasionally complex drafting, it too is likely to be approached in a formal manner, at least initially.199

Japan

In Japan, the tendency for important categories of unfair contract cases to be "siphoned off", to be directly regulated by statute, has already been noted. Kitagawa lists a total of 16 statutes directly controlling aspects of contractual validity, often in transactions on standard forms.200 However, each statute's area of coverage has been limited, and even in areas where attempts to expand its scope might have been anticipated, the tendency has been to wait for legislative amendment. To a lesser degree, this pattern holds for an emerging tendency to regulate unfairness in contracting through local government ordinances.201 Combined with the formal dimension even within the window for more 197 Below, text at n 204-205.

198 Furthermore, it is of potentially greater effect than an English counterpart, as it allows direct actions against manufacturers: cf G Howells "The Modernization of Sales Law?" [1995] LMCLQ 192.

199 Some of its complexity is noted by T Telfer "The Consumer Guarantees Act 1993" (1995) 1 NZBLQ 46.

200 Above n 95, §1.07[4][b].

201 The approach of the Tokyo City Ordinance for Consumer Living (Tokyo-to Shohi Seikatsu Jorei), for instance, is rather ambiguous. It dates back to 1975, but has been periodically amended, most recently in 1994 (Tokyo City Ordinance No 110, 6 October 1994, in force since 1 January 1995). On the one hand, article 25 of the Ordinance establishes broad, generally worded categories of "improper dealings", including those largely covered by doctrines of unconscionability or undue influence (paragraph 2), and those condemning "contracts containing terms which are excessively unfair and disadvantageous, violating the requirement of good faith (shingizoku) in dealings" (paragraph 3). Further, even after the latest amendment, the Ordinance, and Regulations thereunder (kisoku), are still largely hortatory in nature. In particular, the sanctions for infringing the rights set out pursuant to article 1 and the Regulations are that the Governor may issue guidance (shido) against, or warn infringers (kankoku), and may publicise details of those who refuse to follow warnings (see S Ito, "Futekisei na Torihiki Koi Kisei ni kansuru To-jorei oyobi Kisei Kaisei no Gaiyo [Overview of the Amendment to the Capital's Ordinance and Regulations relating to the Control of 'Improper Dealings']" (1995) 1065 Juristo 14). Such "adminstrative guidance" (below n 202) may also indicate a more substantive approach, namely less "enforcement formality" (Atiyah and Summers, above n 8, 18, 186-221; see also L Nottage, "Contract Law and Practice in Japan: An Antipodean Perspective" in H Baum (ed) Japan - Economic Success and Legal System (Berlin, de Gruyter,

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substantive reasoning offered by Articles 1(2) and 90, this has added a formal dimension to the whole area.

Recently, there has been considerable academic discussion of the issues in regulating unfair contracts as part of a more systematic framework. This discussion has roots in studies in the early 1980s of overseas reforms, such as the UCTA and initiatives at the EC level, at a time when regulation of standard form contracts was being investigated by a government advisory body, the Social Policy Council (Kokumin Seikatsu Shingikai). But that more practical edge was has somewhat dulled. This reduced the immediate prospects for the introduction of general legislation containing new content-oriented standards, drawing on some of those overseas reforms. First, Japanese commentators increasingly realised the extent - and sometimes usefulness - of "administrative guidance" in regulating various standard forms used in particular industries.202 In some cases, as in life insurance, the standard form must be approved by the responsible Ministry, which is therefore in a position to threaten de facto, if not legal sanctions to control excesses. Such control was heightened by a Council Committee report in 1984, which identified problems in particular areas after widespread public discussion and research.203 The awareness of such mechanisms, and changes that followed in some of the standard forms reviewed in that report, took some urgency out of the subsequent discussion. Secondly, a main problem came to be perceived not as particular unfair contract terms, but as improperly inducing the contract itself. This raised more general issues, calling for more consideration of how various private law techniques did or might deal with this problem. Predictably, it resulted in more general jurisprudential arguments.204 By default, this hiatus left the Japanese law on unfair contracts with substantive roots, but formal counter-tendencies.

forthcoming 1996), fn 46). On the other hand, the Regulations are extremely detailed, now attempting to cover 40 categories of unfair dealings. Already, commentators are calling for attention both to unfair dealings which are arguably still not covered, and to the need for a continuous process of amendment to meet other specific dealings as they arise. This more formal dimension is also apparent in recent calls for more specific statutory regulation in other regions. See Note, "Chumoku sareru Shohisha higai boshi oyobi Higai kyusai ni kansuru Chiho jichitai no Shohisha gyosei to Shohi seikatsu jorei no doko [Noticeable Directions in Local Government Consumer Ordinances and Administration relating to Prevention and Compensation of Damage to Consumers]" (1996) 586 NBL 5.

202 "Administrative guidance occurs where administrators take action of no coercive legal effect that encourages regulated parties to act in a specific way in order to achieve some administrative aim." (M Young "Judicial Review of Administrative Guidance: Governmentally Encouraged Consensual Dispute Resolution in Japan" (1984) 84 Colum L Rev 924.

203 Z Kitagawa "Unfair Contract Terms in Administrative Guidance" (1985) 16 Rechtstheorie 181.

204 E Hoshino "Gendai Keiyaku Ho Ron - Yakkan, Shohisha Keiyaku wo Kien to shite [Contemporary Contract Law Theory - Reconsidered in the Light of Standard Form and Consumer Contracts]" (1991) 469 NBL 1.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 41

Some momentum has now re-emerged. Concern has grown about the inability of administrative guidance to adequately control the range of cases involving claims of contractual unfairness, particularly those involving consumers.205 The Economic Planning Agency, responsible for coordinating consumer policy, formed a working group which reported on the EC Directive in 1994. It is too early to predict whether this will eventually lead to new legislation for regulation of unfair contracts generally, and thus to a significant injection of a more substantive approach into this area of Japanese law. The formal counter-tendency identified in this Part suggests that that may take some time to realise.

5 Summary: Form and Substance in the Law of Unfair Contracts

Testing the broad propositions of Atiyah and Summers, Part B has considered the extent to which content-, rather than source-oriented standards are used to determine the authoritativeness of contract law, as one indication of the degree to which substantive, rather than formal reasoning is accepted in four legal systems. The fine print doctrine or similar approaches are found in all the legal systems, but this can be indicative of either a substantive or a more formal orientation. However a consideration of the doctrines of good faith and unconscionability suggests a pattern with US law at the substantive end of the spectrum, Japanese law as somewhat more formal, and New Zealand and English law at the formal end of the spectrum. Closer analysis of other contract law doctrines listed by Atiyah and Summers seems likely to reinforce this pattern.206 The general role of legislative reform in this area, of controlling contractual unfairness, does just that.

C. A Broader Framework for Comparing Other Developments in Contract Law

This pattern may hold for other aspects of the "authoritative formality of law" mentioned by Atiyah and Summers (tentatively summarised as 1.1.A, 1.1.B and 1.2 on the Figure in the Appendix). It also seems to hold for the other suggested dimensions of formal reasoning (2. ~ 3.), and for corresponding general "attributes" of formal legal systems (4. ~ 6.).207

If there are such systemic local variations within and surrounding the contract law of each legal system, Atiyah and Summers' framework is a salutary reminder that they tend to be deep-rooted and inter-related. Counter-systemic developments will therefore tend to 205 Matsumoto, above n 25, 146. Furthermore, foreign observers are increasingly critical of administrative

guidance's "intransparency" (see eg M Dean "Administrative Guidance in Japanese Law: A Threat to the Rule of Law" [1991] BL 398).

206 See eg the brief discussion of penalty clauses (above n 159).

207 Each dimension is briefly explored in Nottage (1995, above n 1), and more fully analysed in the author's ongoing PhD thesis research.

42 (1996) 26 VUWLR

be met with resistance.208 What appear to be inevitable developments in domestic contract law must be reevaluated for that broader perspective. The form-substance framework promises more sensitivity and structured insight into differences in result, conceptualisation, and legal reasoning as a whole, in the context of traditional ways of systematically ordering legal institutions.

That framework also seems useful in analysing developments at an international level. In particular, if an international instrument or restatement embodies a more substantive orientation, formal systems may be expected to be more reluctant to embrace it.209 For instance, some see the Vienna Sales Convention as exhibiting such an orientation.210 This would make less surprising its early adoption by the US, its belated adoption by New Zealand (largely driven by pragmatic considerations), and vigorous opposition by some prominent English jurists to its adoption there.211 Furthermore, even after implementation of such instruments, interpretations may tend to diverge roughly along formal and substantive lines.

The desire for more convergence among legal systems may be laudable.212 However, such convergence may be more gradual than expected. Similarly, those who perceive or anticipate widespread and rapid change in a particular legal system’s contract law will need to carefully analyse carefully its overall orientation and that of its surrounding institutions - its national legal ethos.

208 Atiyah and Summers (above n 8, 430) also briefly anticipated this point.

209 Abstracting from everyday pragmatic impediments, often similar in each domestic legal system. L Nottage "Trade Law Harmonisation in the Asia-Pacific Region: A Realist's View from New Zealand - and a Way Forward?" [1995] NZLJ 295.

210 A Kastely "Unification and Community: A Rhetorical Analysis of the United Nations Sales Convention" (1988) 8 Northwest J of Intl L and Bus 574. Uchida, above n 1, 12. A better example of a substantive orientation may be the Unidroit Principles (R Hyland "On Setting Forth the Law of Contract: A Foreword" (1992) 40 AJCL 541). Specifically, they also include provisions directly addressing contractual unfairness, principally §3.10 (see Bonell, above n 150, 90-106). However, since the Principles must be adopted by individual parties and otherwise do not have force of law, it is very difficult to know the extent to which they are "adopted".

211 J Hobhouse, "International Conventions and Commercial Law" (1990) 106 LQR 530. Japan would remain somewhat of an exception, in still not having adopted CISG, despite a largely substantive orientation. However the Japanese legal system does have a formal streak, and the pragmatic impediments in Japan's case are potentially particularly severe (see D Henderson "Some Developments in Japan's Transnational Law" in R Cranston and R Goode (eds) Consumer and Commercial Law: National and International Dimensions 60 (Clarendon Press, Oxford, 1993).

212 See eg B Markesinis (ed), The Gradual Convergence: Foreign Ideas, Foreign influences and European Law on the Eve of the 21st Century, (Clarendon Press, Oxford, 1993); K Sono "Towards a Modern Jus Commune: Converging Trends in a Shrinking World - The Law of Contract" Paper presented at the IALS Annual Conference, "Towards a Modern Jus Commune", Buenos Aires, September 1995, 6-7.

UNFAIR CONTRACTS - FORM AND SUBSTANCE 43

Appendix

44 (1996) 26 VUWLR

Formal Reasoning

1. Authoritative Formality

1.1 Validity Formality: Source- vs Content Oriented Standards

1.2 Rank Formality: Sources of Law and Ranking Rules (Parliamentary Sovereignty, Stare Decisis, Custom)

2. Content Formality: Extent and Nature of Legislation

3. Interpretative & Mandatory Formality: Perceptions of the Nature of Legal Rules

Formal Orientation: Law and Practice

4. Enforcement Formality

5. Truth Formality

6. "Didactic" Formality

Appendix

formal substantive

Overview

1.1.A Legislation

1.1.B Case Law: 'Policy' considerations

1.1.C Contract Law: Eg Control of Unfair Contracts

England NZ Japan US

1

FRENCH LAW OF DELICT: THE ROLE OF FAULT AND THE PRINCIPLES GOVERNING LOSSES AND REMEDIES Yves-Louis Sage*

The French law of delict is based on the fundamental concept of damage. Proof of damage is mandatory in delictual claims. The function of civil responsibility is first of all, to indemnify: it can be independent of fault, but it presupposes damage. Judicial compensation or reparation of the harm does not necessitate full compensation in every case as this may be influenced by insurance, other forms of compensation and general policy considerations. Compensation can be made either in kind or in money. The latter is easily quantified and effected, but compensation in kind is more difficult to achieve. The study of the evolution of civil liability clearly indicates a gradual and continuous transfer from the fault to the guarantee..

Introduction

Article 1370 of the French Civil Code, states that an obligation can arise as the consequence of a delict or a quasi-delict, which is different from the obligation which arises from personal commitment made in contractual relationships. The French Civil Code considers that a delict exists when the damage is intentionally inflicted1; a quasi-delict is due to negligence, clumsiness, or imprudence. Article 1383 of the French Civil Code specifically refers to this distinction. However, from a practical perspective such an approach is irrelevant, because the same rules are applied to delicts and quasi-delict i.e. the duty to indemnify, the scope of the indemnification, and they do not change according to the nature of the origin of the damage2.

The French law of delict is based on the fundamental concept of damage. Therefore proof of damage is mandatory in delictual claims. The requirement of damage stems from * Maître de Conférences, French University of the Pacific, Honorary Fellow in Law Victoria University of

Wellington.

1 Defamation is one example.

2 In fact, the only difference is the impossibility to buy an insurance contract for personal wrongdoing (article L.113-1 Insurance Code).

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the primary delictual provisions of articles 1382, 1383 and 13843. These articles provide that the inherent basis of French civil liability4 is the compensation or indemnification of the victim. To fulfil this general objective damage is required.

Catala & Weir state that:5

The function of civil responsibility is to indemnify: it can be independent of fault, but it presupposes damage. In French legal terminology, the words 'damage' (dommage ) and 'harm' or 'injury' (préjudice ) are generally considered synonymous."

Compensation or reparation of the harm by the courts does not necessitate full compensation in every case as this may be influenced by insurance, other forms of compensation and general policy considerations.6 Automatic compensation through insurance and the state will be assumed not to jeopardise the principles governing the function of civil liability7. The concept of damage is part of the overall approach to French law. Thus, it relates to a number of other issues in the broader framework of delicts. First, the French law requires three elements: damage; causality and responsibility (fault)8. This paper will focus on damage9.

Second, the concept of damage is to be distinguished from damages. Damage is the harm or loss the plaintiff suffers, damages are the compensation recovered for such 3 Article 1382 Civil Code:

"Any act whatever of man causes damage to another obliges him by whose fault it occurred to make reparation."

Article 1383 Civil Code: "Each one is liable for the damage which he causes not only by his own act but also by his negligence or imprudence."

Article 1384 Civil Code: "A person is liable not only for the damage which he caused by his own act, but also for that which is caused by the act of persons for whom he is responsible, or by things which he has in his keeping."

4 On the meaning of the term “civil liability”, see A. Tunc, "A codified law of tort :The French Experience", 39 Louisiana LRev, 1051, 1075, also E.A. Tomlinson "Tort liability in France for the act of things : A study of judicial law making" 48 Louisiana L R 1300, 1367.

5 Catala and Weir "Delict & Torts: A Study in Parallel" (1964) 38 Tul L R 663.

6 R David English Law & French Law (Stevens & Sons, London, 1980). p.162. A. Tunc; Responsabilité (en général), Encyclopédie Dalloz n° 1 and seq. P. LE Tournaux - La responsabilité civile - DALLOZ 3ème Ed 1982 - n° 158 and seq. Weill et Terre Droit Civil - Les obligations Précis DALLOZ 4ème Ed - 1986 - n° 752 and seq. Chartier, La réparation du préjudice dans la responsabilité civile Traité Dalloz., 1983.

7 Constitutional Council, 22 October 1982, DS 1983, 189, Note Luchaire.

8 J. Huet - Responsabilité contractuelle et responsabilité délictuelle, essai de délimitation des deux ordres de responsabilité - Thèse Dacty PARIS II 1978.

9 However causality and fault are important issues.

THE FRENCH LAW OF DELICT 3

damage. Since a breach of a legitimate interest protected by the law exists and since the damage is actual and certain, it will provide legal grounds for compensation. However, the concept of damage remains subject to a case by case approach. The Civil Code does not indicate the limits of damage and so the courts determine this on the circumstances of each case. Damage can be either material or moral10.

If for the draftsmen of the French Civil Code, civil liability was intended to be the natural consequence of a fault, this conception is no longer valid today. However it does not mean that the fault has disappeared.

I Diversity of the types of damage which can be mended

There are a number of different types of damage that could be mended. Tunc,

believes that a host of issues arise on the concept of damage:

Are all kinds of damage capable of ‘compensation’ and which rules govern the assessment of such damage? How can one be compensated, for instance, for the loss of a spouse, a child, or an arm? If one’s earning capacity is reduced, shall he be entitled to a lump sum or to periodic payments? Shall we take into account a mere reduction of his earning capacity or only an actual reduction of his earnings? What about the loss of a hope or an increased threat to ones health?11

These issues illustrate the difficulty of determining when damage has actually occurred and when it will be compensated. To provide an answer, requires a flexible case by case approach based on the material or moral damage distinction.

A Types of Damage

There are two types of damage for which liability may arise, namely material and moral damage. Material damage is less common but it is easier to prove. On the other hand, moral damage covers a greater array of situations, but its existence is more difficult to prove .

1 Material Damage ( Dommage materiel )

Material damage can be defined as damage that affects the victim's rights of property. Catala & Weir12 define material damage as injury to the patrimony, that is to the pecuniary interests of the injured party. This includes destruction or deterioration of a thing and injury to property. It has also been defined as including loss of earnings, permanent total 10 This paper will not consider damages in relation to the borderline area of indirect victims.

11 A Tunc “A Codified Law of Tort-The French Experience.” (1979) 39 Lousiana LR 1051, 1060.

12 Catala and Weir, above n 4, 671.

4 (1996) 26 VUWLR

or partial disability and medical expenses13. Thus, it involves every kind of loss that is measurable in monetary terms.14

Material damage has always been considered as grounds for full reparation of the harm suffered.15 This includes not merely the economic loss suffered but also the opportunity costs from the gains or profits which have had to be foregone.16 Material damage cases are capable of valuation with a reasonable degree of precision.17

2 Moral Damage ( Dommage moral )

Moral damage is more difficult to determine due to its inherent basis in human emotions. It represents the area in which courts have had the most difficulty in concluding the existence of damage.

Amos and Walton define moral damage as affecting only the victim's extra-patrimonial rights. This includes damage to honour, reputation or personal feelings. However, in some cases this may be difficult to determine. In cases involving injury to oneself or the death of a family member, moral damage may be more readily apparent than in situations of mental suffering caused by injury to loved ones. The courts have had to address these issues especially in regard to indirect victims and the courts face difficulties in balancing the need to allow genuine moral damage claims while preventing abuse by frivolous or vexatious claims that may lead to a flood of litigation.18

All courts now allow the reparation of moral damage.19 However, the administrative courts led by the Council of State were initially unwilling to allow reparation of moral 13 De Vries Civil Law and the Anglo-American Lawyer (Oceana Publications, New York, 1976) 330.

14 Amos & Walton Introduction to French Law (3 ed, Oxford University Press, London, 1967) 209.

15 R Works "Comparative Approaches to Delictual Responsibility: The French & The American Perspectives" (1967) 11 St Louis L J 587, 611.

16 Catala and Weir, above n4, 672.

17 Catala and Weir,above n4, 673.

18 Catala and Weir , above n4, 678-9. Catala and Weir consider a number of general policy arguments against compensating moral harm, first, that adequate amends may not be possible as monetary payments can not remove the pain and suffering and that monetary reparation may be inadequate for such damage.

19 See: Graham v. Western Union Telegraph Co. 34 So.91. 109La.1069 (1903). In Graham the court held on p92 that:"In France, not only do material injuries furnish ground for legal actions for redress, but so, also, do what are there referred to as 'moral injuries.' the doctrine rests there upon jurisprudence." See further: S Litvinoff "Moral Damages" (1977) 38 Lou L Rev 1. The Louisiana courts have recognised that moral damage can include fright, nervous shock and mental suffering.See: C.E.M.III "Offences & Quasi Offences-mental suffering Resulting from Property Damages-Recovery Under Article 2315, Louisiana Civil Code of 1870" (1945) 19 Tul L Rev 636. A Montgomery "Fright or Nervous Shock as a Basis for the Recovery of Damage"(1938) 12 Tul L Rev 272. R Bassett "Offences & Quasi Offences-Negligence-Independent Cause of Action for Mental Suffering" (1961) 36 Tul L Rev

THE FRENCH LAW OF DELICT 5

damage. The Council of State was reluctant to grant compensation due to the difficulties of measuring moral damage in monetary terms. This divergence has recently been remedied with the Council of State accepting the civil court's approach.

Overall, compensation can be sought where the plaintiff has suffered material or moral damage or both. Catala and Weir20 propose a third category of corporeal damage. This is a composite category where the victim suffers both material and moral damage contemporaneously.

"In all compensation of loss resulting from civil wrongs attributable to private persons, physical or legal, French law in no way consists of punitive regime, whatever the gravity of these wrongs". According to this principle the right of compensation exists from the moment when the loss is offered. There is one prior distinction which occurs depending upon how far matters have gone in relation to a contract. The party due to perform the contract is only bound to do so if performance has been commenced unless the contract is a matter of a succession of performances or an obligation not to perform. However, in matters of delict the right to compensation exists from the time when the loss occurs21. The right to compensation carries with it, among others, the following consequences:

• the victim has the option to take protective measures in order to avoid insolvency of the debtor;

• the Paulian action allows the victim or the heirs to render null and void any transaction which tends to create the insolvency of the debtor. The action is directed against the third party who has acquired the goods of the debtor (article 1167 of Civil Code)22;

• article 724 of the Code Civil codifies the principle of the transmission of the debt to heirs or sole legatees. The victim or his heirs can either have the amount of compensation set judicially, or they can settle with the debtor on agreeable compensation. We shall limit our investigations to judicial setting of liability. The first

160. In Pecoraro v. Kopanica 173 So. 203 (La.App.1937) the court held that "[i]n Louisiana, however, it is settled that, even though there may be no actual objective symptoms of injury, there may be recovery for nervous shock if the evidence concerning such nervous condition is sufficient to warrant the belief that such injury was actually suffered."

20 Catala and Weir, above n4, 685. Catala and Weir provide the example where activities are calculated to cast doubt on someone's professional honour then may have material damage on business customers and clientele, and also moral damage. Similarly, in Marlene Dietrich v Soc.France-Dimanche Cour d'Appel of Paris D.1955, 295 where the court held that Marlene Dietrich suffered both material and moral damage. The moral damage for the publication of the uneditied memoirs that violated her privacy and material damage that she was intending to write her own memoirs and now faces the risk that such will be compromised.

21 J. Carbonnier, Droit Civil, 4, Les Obligations (PUF, 1988) 305.

22 Y. Buffelan Lanore, Droit Civil, 2éme année (Masson 1986) n° 404.

6 (1996) 26 VUWLR

purpose of compensation by the courts is to ensure, compensation which is as complete as possible, and which must also go towards total recompense of the loss.

Once the problem of assessing the amount of compensation and the form it is to take has been ruled on, that of determining who carries the burden of compensation follows.

B The two possible forms of compensation

Two processes of compensation are possible23.

Compensation can be made either in kind or in money24. The latter is easily quantified and effected, but compensation in kind is more difficult to achieve and perhaps does not constitute a true method of compensation. The victim cannot refuse compensation in kind when it is offered to her by the defendant25. However, if it is not offered by the defendant, the plaintiff is not obliged to ask for it. In the absence of legislation, the courts can of their own choice order either compensation in kind or in money. In fact compensation in kind is rarely possible, except in the following cases which aim either to suppress illegal behaviour or to denounce to the public the schemes of the defendant:

• the case of defamation, a judgment against the defaming party with an order to publish a retraction of the false allegations26.

• in matters of improper or illegal building, the judges will order demolition27;

• in cases of disputes between neighbours, the judge can intervene to put a stop to the activity which is at the root of the dispute28;

• -equally, the nullification of a fraudulent act in the case of a Paulian action will be a means of suppressing illegal acts29. It could turn out in a particular case, such as abuse of position of a minor (dol ), that compensation in kind would be more advantageous than money, since it could be considered as a privilege. In effect, if the nullity of the act is upheld, such as normally results under the laws of capacity, the minor ought to pay

23 E. Roujou de Boubée, Essai sur la notion de réparation LGDJ 1974.

24 Le Tourneau, op. cit. n°1028.

25 A decision of the third Civil Chamber of the Court of Cassation, seems to grant priority to the compensation in kind as far as it can be acheived, 3 Civil Chamber 7 June 1979, Bull.Civ. 1979; III, 95, N° 124.

26 TGI Paris 14 November 1980-D. 1981, 163, note LINDON.

27 Court of Cassation, Third Civil Chamber, 8 October 1974, Revue Trimestrielle de Droit Civil 1975, 331, note Giverdon.

28 Court of Appeal Aix en Provence, 1 Febrary 1971, Gaz Pal. 1971,1,302.

29 H. Sinay, Revue Trimestrielle de Droit Civil 1948-183.

THE FRENCH LAW OF DELICT 7

damages to the third party for the loss he has caused by his error. But, if the minor is insolvent, the third party would not be completely compensated. With the execution of the deed, he has not incurred any loss30.

The application of the principle of compensation by equivalence is called "dommages-intérêts".

When the damage is caused to tangible property, the sum of money paid allows the victim to make repairs to the damaged item, or to acquire something similar.

The rules relating to obligations concerning sums of money govern the allocation of damages and interest. Thus the court is free to decide that the compensation will take the form of an annuity and it is not bound by the pleadings of the plaintiff or the defendant. It could be decided that compensation in the form of an annuity, which constitutes compensation of a permanent nature, is the most suitable when the damage consists of a disability or work-related incapacity, in that it is then a matter of replacing a lost income, given that the situation continues over a period of time31.

The case law of the Cour de Cassation according to which the courts can fix life interests, is very much limited by the provisions of the law of 27 December 1974 which, following lobbying by insurance companies, has removed a large part of their field of application32.

It is to be noted that the law of 5 July 198533 provides that it is open to the victim of a traffic accident to ask that the annuity awarded be replaced by a capital sum.

II Quantification and the burden of compensation

The first aim of compensation is to ensure that it is equivalent to the loss. Though the principle is straightforward, its application gives rise to difficulties when the amount of the loss fluctuates34.

A The rule of equivalence of the compensation in relation to the loss suffered.

"The loss and nothing but the loss" is the maxim which underlies the rule. 30 J. Carbonnier, Droit Civil, 4, Les Obligations (PUF 1988) 94.

31 Court of appeal Paris, 10 November 1983-D-1984, 214, note Chartrier.

32 Court of Cassation, Mixed Chamber (2 decisions) 6 November 1974- JCP 1975, II, 17978, note Savatier.

33 Known as the “Badinter law”.

34 Principles provided by articles 1350 to1352 of the French civil code prevent that a new trial can take place after a final and binding decision granting compensation. However these principles are subjet to some compremise. It will be sufficient to claim a new prejudice loss, which will appear as a new petition and not as a fluctuation of the initial loss.

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The fundamental principle is that the compensation match the loss35. According to this ideal, the judges must calculate the loss as accurately as possible, taking into account all those aspects brought to their attention.

The amount of damages will not then be subject to any limitation, in particular the limitation on foreseeable damages which applies in contract law, does not apply in matters of delict. The amount of compensation is independent of the gravity of the fault or fact at the origin of a damage. Accordingly a lump sum payment would not be awarded36. One can imagine that even the slightest of wrongs could therefore lead to a judgment for an enormous sum of damages. On the other hand, the judge cannot increase the damages in order to sanction the seriousness of the act. By the same token, neither the respective financial situations of the plaintiff and defendant are to be taken into account, nor the fact that the defendant is insured or not insured.

It should be noted that from time to time the courts take a few liberties with these principles. In effect, they sometimes have a tendency to give precedence to considerations of equity, or make insurers pay dearly. Providing that this is not stated overtly, their decision cannot be appealed, because the evaluation of the loss is a question of fact, and therefore is not subject to the inspection by the Cour de Cassation37. Conversely, insurers’ lobbies groups have been able to obtain from the powers that be rules fixing compensation at very low levels in contract law as much as in delict38.

Another fundamental principle is that the compensation can be neither less than nor greater than the loss. As a consequence, when the object which has been destroyed was second-hand, the plaintiff has the right to the monetary value of a similar object. But this principle is not applicable in every case. When the property destroyed is a motor vehicle it will generally be possible to find a vehicle of the same age and type on the second hand market, and the plaintiff will thus be placed in the situation where they were previously. But suppose that a truck, in colliding with a house, causes such damage that it is necessary to demolish the house and rebuild it. The house cannot be rebuilt in its exact state; it will, out of necessity, be brand new. The Cour of Cassation decided a long time ago that it is necessary, even in such a case, to apply the principle, and in so doing make a corresponding deduction for the wear and tear of the destroyed house from the cost of the 35 Cass Civ II 28 Oct 1954, JCP 55 - Ed G II, 8765, note Savatier.

36 Cass Crim 06 Dec. 1983 Bull Crim n° 329 JCP 84 Ed G IV 55. Cass Com 17 nov 1987 SARL Armor Bétail et Autres c/ Banque Hervet.

37 J. Huet, Revue Trimestrielle de Droit Civil 1986 p. 122. A. Lacabarats, La loi n° 85-677 du 05 juil 1985 Gaz Pal 1987. I . doc. 79

38 Jurisclasseur Resp. Civ op. cit. fasc. 201 n° 70 et 78.

THE FRENCH LAW OF DELICT 9

reconstruction. The solution was unsatisfactory. In practice, the plaintiff was obliged to invest a major capital sum in improvements to the old house, which perhaps would otherwise not have be spent; and it practically ran the risk of preventing reconstruction if the necessary capital was unavailable. For this reason the Cour de Cassation finally held that in such a case it could take into account the wear and tear.

In cases of damage to a vehicle, the following difficulty presents itself. In practice, when returning a car to its original condition is more costly than replacing it with a vehicle of the same type, age and condition, can the plaintiff demand that the car be returned to its original condition?

This is still a point which leads to disagrement amongst the Chambers of the Court of Cassation; the Criminal Chamber has held the affirmative, whilst the second Civil Chamber the negative.

The Civil Chamber considers that the cost to return the car to its original condition can only be awarded to the victim when that amount is less than the monetary value of the car. However, it has been held that this value does not coincide with the true monetary value of the car: one should therefore withhold not the price the plaintiff would have been able to get for their car if he had sold it, because he was not selling it, but the sum that must be spent in order to acquire an equivalent model. And to determine this sum it is not necessary to hold to the prices in the Argus second-hand car guide, which carry no official authority and, for certain models, are often at odds with the real state of the second-hand market. Therefore, the principle according to which the victim must be returned to the position in which he would find himself if the accident had not taken place, was respected39.

On the premise that the compensation cannot be greater than the loss, a fallacious conclusion has been deduced in the past, i.e: the denial of both the insurance money and the compensation from the defendant. It was held that where the value of the damage is covered by an insurance policy the damage no longer exists. The victim can claim from the defendant only the surplus not covered by the policy. However, it has been noted that this was a mistake. In effect the insurance policy does not repair the damage; it has no origin in the damage itself. It represents a reimbursement from the premiums paid by the insured and hence it does not stem from the same cause40. The only limitation to have an effect in similar situations applies to benefits paid by Social Security, pensions and 39 Cass Civ II 18 fev 1976 D S 1976 Somm 43. Cass Civ II 17 mars 1977 Bull Civ II n° 89. Cass Civ .I. 06 janvier 1987

Somm 332 obs Groutel. H. V. Amouroux , De l'indemnisation confisquée à la reconnaissance de la valeur de remplacement : la révolution silencieuse de l'assurance automobile - Gaz Pal. 04 mai 1991.

40 Le Tourneau op. cit. n° 1128. Cass Civ 1e 05 mai 1981 B ull. Civ- I - n° 136.

10 (1996) 26 VUWLR

incorporated associations such as friendly societies. That is to say all payments by the third parties must be deducted from the damages awarded to the plaintiff, such parties' position being similar to that of a general insurer where the law subrogates the rights of the insured41.

While it is clear that indemnity principles guide the principle of compensation in French law, a serious difficulty arises with the assessment of damages when it concerns the evaluation of physical injury or emotional harm. Such damages cannot be counted in terms of money. Neither statute nor case law defines emotional harm and therefore no basis exists for determining the damages to be awarded. If for example an accident has led to the victim losing an arm or a leg, the loss resulting from the requisite treatment and incapacity to work can be assessed, but not that which results from loss of looks or sexual ability. Assessment will of necessity be arbitrary. Therefore large discrepancies can appear between the different courts, all the more so when it concerns a question of fact is involved, as the Cour de Cassation cannot intervene and ensure some consistency in the decisions42. It is nevertheless true that to enable a certain harmony to be achieved the appeal courts are accustomed to publish tables which sum up the collective decisions in the particular field43. "In concreto" assessment and evaluation of the loss, and hence the compensation which follows from it, prohibits any reference to pre-established tables. Nevertheless, the court appointed experts have a tendency to make use of tables which are more or less official44. Since expert opinions are not binding on the judges, practice shows that at least as to the extent of the loss, they refer to the expert opinion most of the time; only the quantum of the award is a matter which changes according to the judge's personal standards45. It happens no less that the judges in principle in their evaluations distinguish with precision between the elements of the loss from knowledge of the time the plaintiff was incapacitated for work, long term partial disability, the suffering endured (pretium doloris), to aesthetic harm and loss of appearance. Moreover when all losses are merged to 41 F. Zenati, Revue Trim Droit Civ 1985 p. 798. Jurisclasseur Resp. Civ. op. cit. fasc 230-2. Cass Civ .1e 05 juin 1967

Bull I n° 198. Paris 13 déc 1965 JCP 19866, 14784 , note Rodiere. see Y. Lambert Faivre, Le droit et la morale dans l'indemnisation des dommages corporels - Dalloz 1992 Chronique 32 p. 165 à 168. CA Paris 3 mai 1994, Gaz.Pal. 94, 1, p.17. Bull I n° 198.

42 M. Le Roy , L' évaluation du préjudice corporel, Litec 10è Ed 1987. R. Barrot, Le rôle du médecin et du juge dans l'indemnisation du dommage corporel, Rev Fse du Dommage Corporel ,1983-13-24.

43 See Le Roy op. cit. above n28, and Jurisclasseur Resp. Civ. Fasc. 202-4 et 202-5.

44 See C. Rousseau, Commentaire sur le barème “Droit Commun” dit du Concours Médical , Gaz. Pal. 1994,1, doctr.p 29.

45 It is noticeable when chidren are the victims, see Margeat et Picard, La réparation du dommage chez l'enfant , GP 1981-I-Doct. 254

THE FRENCH LAW OF DELICT 11

grant a lump sum, the Court of Cassation considers that a Court of Appeal is not obliged to detail all the losses46.

This is particularly necessary since the law of 27 December 1973 which has limited the recourse of Social Security against those third parties responsible for sums to redress elements of the loss covered by itself.

B The assessment of the amount of the loss

To resolve this question, attention must be paid to distinguishing the two periods in the course of which variation can occur, be that before the award of compensation or afterwards.

1 Assessing the loss

Take for example, the case where the loss has varied since the day it was caused and the date of the decision awarding the compensation. In effect the case law has considered that the assessment of damages and interest to be awarded should happen as at the date of final judgement and not at the date when the damage occurred47.

Assessment at the date of the decision will have as a feature the taking into consideration of any consolidation of the loss. For example, the position of the victim improves, or, to the contrary, it has been aggravated since the accident. In this case, there is no doubt that the court must take into consideration the loss as it stands at the date of judgement taking account of the improvement or aggravation48. The response will be different, however, in cases which concern a change in the assessment of the loss due to monetary fluctuations.

Under the notions of equity, the following considerations can change the valuation:49

• the plaintiff has the right to total compensation. It is unjust that the victim has to suffer the consequences of an increase in price or the slowness of justice.

• if the plaintiff has replaced the possession since the time of the accident, he or she has not incurred the price increase. But what if he or she waited as he or she was not sure of obtaining any compensation, or because he or she did not have the requisite sum of money?

46 Cass 1è, Civ 16 juillet 1991, JCP 91 - Ed G IV p. 367. This decision has been criticised since it reduces the

possibilities for the Court of Cassation, to control the appreciation made by the lower court. See Viney, JCP ,Ed G n° 13 n° 3572

47 Derrida, L'évaluation du préjudice au jour de sa réparation JCP 1951-I-918.

48 Cass Civ 28 dec 1942 - Gaz Pal 1943-I-97.

49 Req 21 mai 1928 D H 1928 - 366. Cass Civ 2e 03 mars 1982 Gaz.Pal 03-04 nov 1982 note F.C.

12 (1996) 26 VUWLR

In legal theory, this does not prevent the serious conflict of assessment of a loss at the time of judgment with the principle that the debt exists from the moment the loss occurs; if the debt exists at that moment, how can its value subsequently increase? To resolve this, it is proposed to distinguish between the obligation to repair and the obligation to pay compensation. The obligation to repair comes into being at the same instant as the loss, which explains why the debt can be transmitted to heirs. But this duty to repair is transformed at the time of judgment into a duty to pay compensation. It is therefore at this time that the amount must be fixed.

After much indecision, the case law settled on the idea of assessment as at the date of judgement, the Criminal Chamber of the Cour of Cassation having held that the assessment in appeal cases must be made as at the date of the original judgement. However, certain adjustments to the rule have been considered:50

• it must be decided whether the plaintiff has proceeded to repair or replacement before the judgement. In this case, compensation must be fixed at the date or repair or replacement51.

• the same applies if the plaintiff has refused a reasonable settlement offer, and thus prosecutes a vexatious action. Assessment will be fixed at the date of the offer52.

• in cases of loss or deprivation of a possession, a case in the Criminal Chamber of the Cour of Cassation of 6 June 1946, while restating the rule, did not apply to stolen share certificates, which were worth less at the time of judgement than at the time of the theft. It was thought that the plaintiff could have sold them without waiting for the drop in price53.

2 Review of the loss

It can turn out that the compensation no longer corresponds with the actual loss. In such circumstances where the cost of living or the value of the annuity has varied. Is it possible to later revise the amount of damages fixed by the court's decision?

If one considers the change in the nature of a loss, the questions principally arise, although not exclusively, for physical harm. The case law states that if the state of the victim worsens an increase in the level of compensation can be obtained. The Court of 50 Cass Crim 4 mai 1979 Gaz Pal 1980. J. 90

51 Colmar 2 and 9 april 1954 JCP 1954 II - 8133, note Lyon-Caen. Cass 2è Civ 19 nov 1975 D- 1976 - 137 , note LE Le Tourneau.

52 Paris 16 mars 1951 JCP 1951-6182.

53 Cass Crim 6 juin 1946 D - 1947 - 234, note Savatier.

THE FRENCH LAW OF DELICT 13

Cassation admits in principle, that the review is permitted because the authority of that which was previously adjudged rests solely on the loss which was then certain, and not on the complementary loss which was only possible, or which was not even suspected. However, if the position of the victim improves, the person responsible for the loss cannot obtain a reduction in damages. It is considered that this is contrary to the authority of the finding. It can only be otherwise if the judges have held that they were only stating the actual condition of loss and hence the right to review it has been formally set aside in the original judgement54.

If one considers the variation in quantum of the loss, it will be noted that in practice it is a matter solely of an increase following monetary depreciation and the question arises above all in cases of invalid's annuities.

The doctrine of the res judicata is contrary to the subsequent review of the decision. Moreover this modification gives rise to a serious practical difficulty because very often the defendant will have paid a capital sum to a company for the annuity which will maintain the operation of the annuity in compensation. But the absence of review is serious for the plaintiff, who sees his resources constantly diminishing. A law of 24 March 195155, brought about increases in life interests executed for awards of damages prior to 1 January 1949. This law affects the financing of those annuities whose operation is the responsibility of insurance companies.

To resolve the problem, the courts asked whether they could not in their judgements retain the possibility of a later review directly related to the cost of living and order an indexed annuity. The Court of Cassation was at first opposed to this and put forward two arguments:

1 It invoked the authority of the res judicata. However, there is no breach of the authority of the res judicata if the original decision has retained the possibility of a review, all the more, so if it has even determined the nature of the indexation so that it is not necessary to go before the court again56.

2 It also invoked the absence of a line of causation between the fault and the increase in the monetary assessment of the compensation. However, it should be noted that the line of causation exists, when the damage remains the same. it is therefore only its monetary expression which varies.

54 S. Brousseau , Le point sur l'indemnisation par rentes indexées, JCP 1977-I-2855.

55 Modified by another law of 9 April 1953.

56 Cass Soc 2 mai 1952 JCP 52 Ed G II- 6974, note Frejaville. Cass Crim 5 juil 1961 JCP 61 Ed G II - 12369, note P.E. Gaz Pal 1961, 2248.

14 (1996) 26 VUWLR

In reality, analysis of the idea which underlies the decisions of the Court of Cassation showed that the courts were not failing in their duty by taking account of monetary norms. This argument finds its strength in the fact that the legislature itself is has been obliged to take account of depreciation.

The main criticisms which can be made of this case law concern:

• the legal sphere: the principle of total compensation requires an annuity which replaces in real terms the salary lost by the victim; now the salary would increase as a function of the rise in the cost of living.

• the practical sphere: the case law condemns accident victims with physical injuries up to total disability to fall progressively below the poverty line. Hence the resistance of the lower courts to the doctrine. The Court of Cassation has made a sudden change in two cases of 6 November 1974, which held that judges could index annuities57. Nevertheless, under pressure from the insurance companies, the legislature has in its own manner intervened through a law of 27 December 1974 which has seriously limited the scope of the decisions of the Court of Cassation of 6 November 1974, by authorising indexation only for disabilities of 75% or more58.

• Outside the domain of the law of 27 December 1974, as amended in 1985, the judge is free to index the annuity according to the index which appears to her to be the most suitable. But it is not possible to index an annuity which was not so originally59.

III Some comments about the future of French civil liberty

"By tradition, one considers that the rational of civil liability is based on three roots which according to the circumstances can intervene autonomously or more often, are combined: the fault, the risk and the guaranty60. However, the study of the evolution of civil liability until its origin clearly indicates a gradual and continuous transfer from the fault to the guarantee. Being obliged to cope with the society's transformations and the new requirements to provide a comprehensive compensation to the victims, doctrine and case-law both conceived different grounds for liability and reconsidered the position of the fault and its traditional role. But this internal crisis is not the most important one. More 57 JCP 75-II-17978, Concl. Geyout, note Savatier, Rev Trim Dr Civ 1975-114 et 549 ob. DURRY.

58 The "Badinter" law repealed this provision in 1985. Article 43 of the law of 05 July 1985 and article 1 of the decree n° 86-973 of 08 August 1986.

59 Cass Civ 17 avril 1975 D S 1976, note Sharaf el Dine.

60 P. Guiho and G. Peyrard. Droit Civil IV. les Obligations. Tome I, Les Sources (L'Hermes.1991) 418.

THE FRENCH LAW OF DELICT 15

disturbing is the role of the new mechanisms of collective indemnification which are seriously challenging the future of the civil liability61.

A The role of the fault

Today everybody agrees on the superiority of the objective approach of the concept of liability and on the inadequacy of the concept of fault to provide an acceptable criterion for an adequate compensation. But even when liability based on fault is concerned, many criticisms are levelled. All the criticisms led to an important retreat from the concept of fault. Strict liability became gradually the most important field of civil liability. However there are still some legal areas where the concept of fault still operates62.

1 Evolution of the concept of fault.

Firstly the distortion of the concept of fault itself is striking. To ensure an adequate compensation for the victims, courts are now obliged to take into consideration simple errors, consequences of clumsiness or a bad reflex. Judges are now considering what has been called a "dust of fault" just to provide indemnification to the victim. A.Tunc has vigorously denounced such trend and the confusion between fault and error63. He insisted on the fact that statistically speaking there is always a fringe of unavoidable and humanly excusable acts that even the wisest person could not control. Moreover civil fault has lost the main part of its social value. It is no longer a way to control human behaviour. One may notice the same influence on the liabilities based on fault, the persons liable being assured persons as well.

Articles 1382 and 1383 are still valid and moreover some sectors of the civil liability are governed by the concept of fault64. It will still be applied when:

• a private right is involved, such as a breach of the right of privacy, or reputation,

• a property right is violated,

• an intellectual property right is concerned65,

• unfair trading or competition must be compensated. 61 Y. Lambert-Faivre, L'évolution de la reponsabilité civile d'une dette de responsabilité à une créance

d'indemnisation. Rev.trim.de Dr.Civ. 86(1) Jan/March 87.

62 P. Jourdain, Les principes de la responsabilité civile (Connaissance du Droit, Dalloz, 1992) 17.

63 A.Tunc; Responsabilité (en général), Encyclopédie Dalloz n° 1 and seq.

64 "To limit the domain of the civil liability 's scope to the fault is a myth.....but it does not mean that the fault should be banished from the civil liability " G. Viney. R.I.D.C. 1976. p. 581.

65 On the intellectual property rights, see Y-L Sage "The French Intellectual Property Code 1992- The author’s rights of disclosure and of reconsideration" New Zealand Intellectual Property Law Journal, February 1996.

16 (1996) 26 VUWLR

But it is also in its role of controlling the victim that the concept of fault keeps its full strength. The current case-law continues to consider that the victim's fault must produce a reduction in compensation and even if the 1985 law on road accidents has to some extents modified this principle by imposing a fault of a certain level of importance, it has not completely disappeared66.

2 The role of the insurance contracts and of the collective compensation schemes on the civil liability

The evolution of French civil liability was actually made possible by the growing impact of the insurance contracts on civil liability67. The insurance on civil liability emerged at the same time as the concept of objective liability. Its main purpose is to discharge the person responsible from the final payment while providing a wrongdoer full coverage against the pecuniary consequences linked to his liability. The insurance of civil liability is at the same time the consequence and the raison for the fast growth of the liability itself. It is obvious that without insurance, courts would be reluctant to sentence a defendant to a high amount of money for a liability based on the absence of fault. If it is possible today to focus on the victims’ interests, it is not only because damages are more important, but mainly because in almost all circumstances, the defendant has the opportunity to contract an insurance or is obliged to have one. Therefore the final burden of the liability is supported by the entire community through the premiums paid by the insured. However the insurance contracts on liability, induce some side effects which ultimately disturb the concept of liability itself.

a) First, the tortfeasor, being discharged of the final payment, enjoys an almost total impunity.

b) Second, positive law tends to connect the liability to the ability to subscribe an insurance contract, especially when it is necessary to determine as responsible someone who is different of the direct actor.

c) Third, in a liability trial it is the insurer who has the control of the procedure68.

The liability looks like a simple support for the subscription of an insurance contrat. If the person liable remain the original debtor, he could be also an ineffective one. By sharing the burden of the damage's cost, the insurance for civil liability represents the first expression of the collectivisation of the liability. However it is still an indirect liability as 66 Ch.Larroumet, L'indemnisation des victimes d'accident de la circulation, l'amalgame de la responsabilité civile

et de l'indemnisation automatique,Dalloz 1985, Chr 237.

67 P. Jourdain.Les principes de la responsabilité civile. op. cit p.12.

68 V.C. Freyria, La direction du procès en responsabilité par l'assureur, JCP 1954 - I - 1196.

THE FRENCH LAW OF DELICT 17

long as the compensation is subordinated to a preliminary declaration of liability made by the assured person.

By contrast some institutions offer direct and collective compensation to the victims69. And along with the Social Security, specific guarantees are provided by the collectivity for traffic or hunting accidents, for victims of criminal or terrorists acts70 and more recently for the victims of blood transfusion71. These provide indemnification for certain kinds of damage without having to consider first who is responsible. Therefore the burden of responsibility becomes a concern of social justice of the community72. Civil liability is diluted within the social group and its existence is finally jeopardised.

Conclusion

The current crisis of civil liability is not due to the crisis with fault73. It is first due to the challenging influence of the systems of compensation based on a social analysis74. When the person liable is also an insured person, the insurer will be the real debtor. The liability becomes a simple result of the insurance contract and is only necessary to designate the insurer who will compensate the victim. When the collectivity is directly taking in charge the damage, civil liability is fully put aside75. The only remaining problem is to determine either the field or the circumstances when the indemnification will occur. Today damages are considered to be social risks, which must be insured by the community and therefore, in such systems it appears natural that any damage has an a priori vocation to be compensated. The French conception of the fault and its consequences in the civil liability domain is not unique. It represents only one attempt among others to redefine the role which should be granted to the fault76. For example, the New Zealand conception, has 69 G. Baron, Le fonds de garantie automobile, Rev. Trim. Dr. Civ. 1974 p. 250. G. Durry and F Chapuisat, Fonds de

Garantie Automobile, Encyclopédie Dalloz Civil , n° 22 and seq.

70 J. F. Renucci, L'indemnisation des victimes d'actes de terrorisme, D. 1987, Chronique 197.

71 Y.Lambert-Faivre, L'indemnisation des victimes post-transfusionnelles du SIDA: hier, aujourd'hui et demain......R.T.D Civ.92 (1).January-March 1993. p 8 and seq. M-L Morencais-Demeester, Contamination par transfusion du virus du SIDA: Responsabilité et indemnisation, D, 1992, Chr. p. 190.

72 P. Escande, A propos de la loi n° 83-608 du 08 juillet 1983 . D. 1983, 351.

73 P. Le Tourneau, La verdeur de la faute dans la responsabilité civile (ou de la relativité de son déclin), Rev.Trim. Dr. Civ.1988.505.

74 L.Bach, Reflexions sur le probléme du fondement de la responsabilité civile, Rev.Trim.Civ.1977, 13 s et 221 s.

75 F.Zenati ,Revue trimestrielle Droit Civil 1985, p. 793.

76 A.Tunc, Où va la responsabilité civile aux Etats-Unis. R.I.D.C.1989,711; Quatorze ans aprés; le systeme d’indemnisation néo-zélandais, R.I.D. C. 1. 1989, p. 140. Brown, Deterrence in tort and no-fault: the New-Zealand experience 73, Cal.l.Rev. 976 (1985). A.Levasseur, Droit des Etats-Unis Dalloz, 110. T. G Ison, "Changes to the Accident compensation system: An international perspective" (1993) 23 VUWLR 1.

18 (1996) 26 VUWLR

drastically reduced the importance of the fault in civil liability. Even if none of these conceptions are fully conclusive, the current trend provides better chances for the victims to obtain a fear compensation for their damages.

La responsabilité délictuelle et quasi-délictuelle en droit français: Aperçu des principes régissant l’indemnisation du dommage et commentaires sur le rôle de la faute

Concept multiforme au contenu "ambiguë", la responsabilité civile contient néanmoins toujours dans le droit français, l'idée d'un dommage et de sa réparation et de l'indemnisation des victimes. Dans cette perpective, la responsabilité est couramment définie comme l'obligation mise a la charge d'un responsable de réparer les dommages causés à autrui. Pris au sens large, le processus indemnitaire peut intéresser la société et l'individu séparément ou les deux à la fois. Si l'on ramène uniquement la responsabilité civile à la seule finalité de l'indemnisation de la victime, on remarque qu’aujourd’hui:

a) qu'est apparu un véritable droit à indemnisation conféré à la victime. En d'autres termes, les risques d'insolvabilité du débiteur de l'obligation indemnitaire ne doivent plus peser sur la victime. Les assurances privées ou l'État, donc des tiers au dommage lui-même, interviennent dans le processus d'indemnisation et se substituent maintenant de plus en plus fréquemment au débiteur d'origine. Le Conseil Constitutionel a rappellé que "le droit français ne comporte en aucune manière de régime soustrayant à toute réparation les dommages résultant de fautes civiles imputables à des personnes physiques ou morales de droit privé quelle que soit la gravité de ces fautes". Selon ce principe la créance de réparation existe dès le moment où le dommage est réalisé. En matière délictuelle le droit à réparation existera dès la réalisation du dommage. Deux procédés de réparation sont envisageables. La réparation peut être faite soit en nature, soit en argent. Si cette dernière modalité de réparation est sur le plan théorique facilement concevable, sa mise en oeuvre quant à l'évaluation du quantum notamment, demeurent toutefois soumise à une appréciation subjective des tribunaux. La réparation en nature demeure plus délicate à mettre en place et ne constitue peut-être pas un véritable mode de réparation. La finalité première de la réparation est d'assurer qu'elle soit équivalente au préjudice. Mais si le principe est simple dans sa formulation, son application soulève des difficultés lorsque le montant du préjudice fluctue.

b) qu’une place nouvelle est maintenant affectée à la faute dans le système de la responsabilité civile en France. Certes, le système français est loin d'être le seul à avoir assujetti à la faute une place différente à celle qui lui était traditionnellement dévolue, et à bien y regarder, il ne représente que l'une des différentes tentatives de la

THE FRENCH LAW OF DELICT 19

redéfinition de la place de la faute dans la responsabilité civile. Ainsi les législations étrangères offrent à des degrés divers et avec des résultats plus ou moins heureux tant en théorie qu'en pratique, d'autres exemples de redefinition. Ainsi, pour ne retenir qu'eux, le système Néo-Zélandais et le systèmesuédois, ont instauré des systèmes de responsabilité civile d'où la faute à quasiment disparue. Le systeme français n'est donc nullement original et novateur.

1

UNE JUSTICE DE MASSE? RÉFLEXIONS SUR LA RESPONSABILITÉ CIVILE EN AMÉRIQUE DU NORD H. Patrick Glenn*

Le droit des pays de l'Amérique du Nord est intéressant à plusieurs égards. Il s'agit d'un droit largement transposé, de plusieurs pays européens, qui présente donc tout l'intérêt du phénomène de la réception du droit.1 Si la tradition (restreinte) de la Common Law a été reçue aux États-Unis et dans la plupart des provinces canadiennes, la tradition civiliste s'est implantée au Mexique et dans la province canadienne du Quebec. Ces traditions juridiques différentes n'incarnent pas, cependant, un conflit philosophique majeur quant au rôle et quant à la conception même du droit. En effet, si la Common Law s'est distinguée pendant des siècles par ses brefs et ses formes d'action, la Common Law moderne, à partir du XIXe siècle, se rapproche du droit civil en ce qui concerne ses institutions, ses sources et ses fonctions.2 D'ailleurs, le droit civil a exercé une influence majeure aux États-Unis au XIXe siècle, pendant la période de construction de ce que l'on voit aujourd'hui comme les droits des États-Unis d'Amérique.3

Le droit des pays d'Amérique du Nord constitue donc une extension et un développement autonome de la conception du droit qui s'est développée en Europe aux * Titulaire de la chaire Peter M. Laing à la Faculté de droit et à l'Institut de droit comparé, Université McGill,

Montréal.

1 Parmi les éléments de cette réception du droit il faut citer les rôles des différents droits européens (anglais, français, espagnol) les uns par rapport aux autres; le rôle de tous les droits européens par rapport au droit des populations autochtones; et la mesure de transformation des droits européens et autochtones dans le processus de réception. C'est l'ensemble de ces éléments qui a contribue au droit des Etats contemporains de l'Amérique du Nord.

2 Voir H. P. Glenn, <<La civilisation de la Common Law>>, Rev. int. dr. comp. 1993.559.

3 Voir P. Stein, <<The Attraction of the Civil Law in PostRevolutionary American>> (1966), 52 Va.L.Rev. 403: M. Hoeflich, <<John Austin and Joseph Story: Two Nineteenth Century Perspectives on the Utility of the Civil Law for the Common Lawyer>> (1985), 29 Am.J.Leg.Hist. 36; R. Batiza, <<Sources of the Field Civil Code: The Civil Law Influences on a Common Law Code>> (1986), 60 Tul.L.Rev. 799.

2 (1996) 26 VUWLR

XVIIIe et au XIXe siècle. Ce droit était devenu un instrument rationnel dans l'organisation moderne de la société. Transpose en Amérique du Nord, il est devenu un instrument dans la création de nouvelles sociétés, largement libre des contraintes qui existaient dans la vieille Europe.4 La combinaison d'un droit instrumental, d'une société nouvelle, d'une politique libérale et d'un continent riche en potentiel économique a produit une société dite <<développée,>, où l'on voit les effets combinés du progrès technologique, de la démocratie, et du droit européen modernisé.

Y a-t-il des limites à un tel droit? Aux États-Unis l'on voit réunies les institutions dominantes des traditions juridiques européennes -- une Legislation de plus en plus dominante qui prend même la forme de codifications dans plusieurs Etats, et une magistrature qui bénéficie toujours, dans une certaine mesure, du prestige et de l'influence du juge d'une cour royale anglaise. Ces institutions, et le droit matériel qu'elles développent, peuvent-elles répondre de façon efficace à toutes les réclamations de justice qui se font entendre dans l'État moderne. La justice traditionnelle, et individualisée, serait inadéquate pour cette tache, car elle ne pourrait jamais répondre aux réclamations multiples qui découlent du caractère systémique et automatisé de la société moderne. Les produits faits en série font des dommages en série. La justice doit donc refléter le gigantisme des institutions et des méthodes. La justice d'une société de masse doit etre une justice de masse.

Deux domaines du droit prive reflètent cette tendance vers la massification - ou collectivisation - de la justice privée. Ce sont les domaines de la responsabilité des fabricants (souvent appelée la responsabilité des produits - products liability -malgré l'absence de responsabilité de la part des produits eux-mêmes) et de la procédure civile, or le génie processualiste américain a produit la notion de recours collectif en droit prive. Le droit de la responsabilité civile et la justice civile peuvent-ils être déployés efficacement pour assurer que la compensation qui devrait etre payée (selon un critère qui sera, pour l'instant, présume) est payée, dans une société moderne? Le droit des États-Unis est remarquable pour les efforts qui ont été faits en ce sens. Ces efforts ont eu des échos importants dans d'autres pays, notamment du monde occidental.

Nous tracerons le développement de ces institutions dans le droit des États-Unis, et ailleurs en Amérique du Nord où elles ont été reçues, avant d'essayer d'évaluer cette nouvelle forme de justice de masse.

4 Voir M. Horowitz, The Transformation of American Law, 17801860, New York, Oxford University Press (2e ed.),

1992.

3

I Les éléments d'une justice de masse

Une justice de masse doit répondre aux événements, et aux activités, de masse. La production de biens en série en est un exemple, où la manufactura, la production à la main, est remplacée par la production par machine. Cette production est automatisée et itérative; le dommage qui en est produit est souvent massif, en ce sens qu'il touche à de multiples personnes. On parle ainsi, aux États-Unis, de "délits de masse" (mass torts), expression contestable dans la mesure où l'on veut designer d'abord et avant tout la nature du dommage, qui pourrait sans difficulté etre désigné comme "dommage de masse" (mass damage), découlant souvent d'accidents de masse (-<mass accidents>>). Parler cependant de <<délits de masse>> (mass torts) implique un jugement, avant toute decision judiciaire, de la nature de l'activité du défendeur, ce qui représente tout le problème à résoudre.

La systématisation de la vie sociale qui donne lieu à des dommages de masse semble exiger l'existence de règles juridiques qui visent et qui reflètent cette systématisation. En premier lieu il faudrait donc des règles de droit matériel qui visent le système qui a produit le dommage; il faudrait ensuite des règles processuelles qui permettraient la mise en vigueur efficace de ces nouvelles règles de droit privé. La responsabilité doit etre stricte ou systématique; sa mise en vigueur doit s'effectuer par le moyen des recours collectifs.

A La responsabilité dite stricte du fabricant

Les fabricants aux États-Unis jouissent d'un marche tres important. Pour servir ce marche, le processus de fabrication et de distribution de biens de consommation est devenu tres développé. Les relations immédiates et bilatérales entre un fabricant artisanal et son client immédiat ont été remplacées par des moyens systématiques de production et des chaînes de distribution de plusieurs niveaux, d'une implantation géographique tres étendue. Un système de production et de distribution est devenu repérable. Des que ce phénomène s'est produit, est apparu l'argument que le système doit porter le fardeau des dommages qu'il crée. Dans le langage couramment utilisé, les coûts sociaux doivent etre "internalisés" ou absorbés par le système créateur de ces coûts. On parle ainsi non pas de la responsabilité du fabricant mais de la responsabilité des produits (products liability), car en désignant le produit du système on vise effectivement le système tout entier.

Le droit des États-Unis a commence à etre "re-articulé" dans le langage des systèmes dans les années soixante, à partir du jugement de la Cour suprême de la Californie dans l'affaire Greenman v. Yuba Powers Products Ltd.5 Dans cette affaire, le fabricant d'une scie mécanique, destinée aux bricoleurs, a été tenu responsable pour des dommages physiques causes par l'appareil, et la Cour suprême a déclaré: <<Un fabricant est strictement responsable sur le plan quasi-délictuel quand un bien qu'il met sur le marche, sachant qu'il 5 59 Cal.2d 57, 377 P.2d 897 (1963).

4 (1996) 26 VUWLR

sera utilise sans etre inspecte pour défectuosités, se révèle défectueux de telle sorte que des dommages sont causes à un etre humain.>>6

Deux développements importants marquent donc le développement intellectuel du droit de la responsabilité des fabricants. D'abord on a permis au demandeur, dans l'affaire Greenman, de viser non pas simplement une faute dans la fabrication du bien, mais une faute dans la conception ou dans le dessin du bien (design fault). Puisque la conception des biens de consommation aujourd'hui est faite en équipes, on permettait ainsi à viser le travail des équipes, c'est-à-dire, viser le système de production du bien. Ensuite, cette étape franchie, il est devenu possible d'admettre une présomption pour faciliter la preuve d'une faute de conception; si le bien produit est défectueux et cause ainsi des dommages au consommateur qui l'utilise, la défectuosité du bien permet de conclure à la faute dans la conception du bien. Le bien défectueux représente le système défaillant; la responsabilité devient une responsabilité dite des produits. L'attention des plaideurs se tourne ainsi vers les caractéristiques des biens sur le marche.

Le développement du critère du produit défectueux a trouve un écho dans d'autres pays ou les conditions de fabrication et de distribution ressemblent à celles des États-Unis. Ainsi, le nouveau Code civil du Quebec dispose, à son article 1468, que le fabricant <<...est tenu de réparer le préjudice cause à un tiers par le défaut de sécurité du bien>>, et à l'article 1469 qu'il y a défaut de sécurité lorsque <<...le bien n'offre pas la sécurité à laquelle on est normalement en droit de s'attendre, notamment en raison d'un vice de conception ou de fabrication du bien...>>. De même, le nouveau droit européen vise le bien défectueux et ce critère de responsabilité s'ajoute aux critères existants de responsabilité dans les divers droits nationaux.7

La possibilité de viser l'activité systémique du fabricant défendeur a donne lieu à deux autres développements dans le droit des États-Unis, développements qui n'ont pas encore été repris, du moins pleinement, à l'étranger. Le premier développement consiste en une reformulation des conditions de la preuve du lien de causalité entre le dommage cause au demandeur et les activités du défendeur. Traditionnellement, il fallait prouver tous les éléments constitutifs d'un tel lien causal; il fallait prouver qu'une faute particulière a cause un dommage particulier. Avec l'élargissement de l'activité du défendeur visée, cependant, un élargissement parallèle des conditions de la preuve du lien de causalité est devenu 6 Le langage de <<défectuosité>> a été repris deux ans plus tard dans le Restatement (Second) of Torts, a son article

402A.

7 Voir Conseil des communautés européennes, Directive du Conseil des Communautés européennes du 25 juillet 1985 relative au rapprochement des dispositions législatives, réglementaires et administratives du fait des produits défectueux, (85/374/CEE); T. Bourgoignie, <<Responsabilité du fait des produits: arguments connus pour un nouveau débat>>, Rev. eur. dr. de la consomm. 1986.7.

5

possible aussi. Le lien de causalité est souvent difficile, voire impossible à établir quand un consommateur a utilise un produit pharmaceutique pendant plusieurs années mais a acheté, pendant cette période, plusieurs marques du produit. Ainsi, au lieu d'etre oblige de prouver que le produit de marque X a causé son dommage, un demandeur devrait avoir la possibilité de prouver qu'il a subi un dommage causé par les produits de type X, et les fabricants de produits de type X devraient supporter ensemble la responsabilité, selon leur portion du marche des produits de type X. C'est ce que la Cour suprême de la Californie a décidé dans l'affaire Sindell v. Abbott Laboratories en 1980.8 La réception de cette decision dans les autres etats des États-Unis a été, cependant, très variée.

Le deuxième développement qui a suivi l'adoption d'un critère systémique de responsabilité est le caractère complexe des poursuites en matière de responsabilité du fabricant. Malgré le langage de responsabilité dite <<stricte>> (ou objective), il est vite devenu évident que la preuve du caractère défectueux d'un produit nécessite une preuve d'experts très complexe, ajoutée à toutes les possibilités de preuve des critères traditionnels de responsabilité. Quand un produit est-il défectueux à cause des possibilités inhérentes de dommages qu'il représente? La voiture avec le réservoir d'essence place bien en arrière est-elle défectueuse? La voiture n'ayant pas de renforcement latéral? La voiture sans sacs gonflables pour protéger les passagers? Le produit pharmaceutique comportant un pourcentage infime mais calculable d'effets secondaires sérieux? On parle ainsi aux États-Unis de litiges de caractère <<polycentrique>> en matière de responsabilité des fabricants. L'accusation portée contre tout un système implique une preuve massive de tout ce que le système a produit ou a du produire. La responsabilité est dite <<stricte>>; elle est loin d'etre simple.

B Les recours collectifs en matière de responsabilité civile

On a ainsi élargi les critères de la responsabilité civile en matière de responsabilité des fabricants. Il restait, cependant, le problème processuel. Les coûts de la procédure contradictoire telle qu'elle existe dans les pays de Common Law, de même qu'au Quebec,9 sont tels que beaucoup de victimes n'ont pas les moyens de financer des actions en justice. C'est le cas même aux États-Unis où la règle générale est à l'effet que chaque partie ne doit supporter que ses propres frais. Le perdant ne paie pas les frais judiciaires du gagnant, comme c'est le cas ailleurs dans le monde.

8 26 Cal.3d 588, 607 P.2d 924, cert. denied, 101 S. Ct.285 (1980).

9 Il s'agit de la procédure dite <~adversarial>> dans laquelle les avocats jouent le rôle principal. Au Quebec, le système d'enquête judiciaire reçu en Nouvelle France a été abandonne au XIXe siècle, sous l'influence du système judiciaire de type anglais, en faveur de la procédure adversarial.

6 (1996) 26 VUWLR

Le recours collectif ou class action est ne pour résoudre ces obstacles processuels. Développé à partir de précédents historiques anglais de la Cour du Chancelier (Equity), le recours collectif aux États-Unis a fait l'objet de codifications de plus en plus détaillées à

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travers les XIXe et XXe siècles, au niveaux fédéral et étatique.10 Au Québec, le recours collectif a été adopte par législation en 1978; la province canadienne de l'Ontario a suivi les exemples américains et québécois en 1992. Le recours collectif moderne comporte en général quatre éléments clés: i) une autorisation judiciaire préalable qui permet la poursuite de l'action; ii) la preuve, lors de cette autorisation judiciaire, de l'existence d'une classe de personnes qui présentent des éléments communs dans leurs rapports avec le défendeur; iii) la nécessité d'un avis aux membres de la classe pour leur permettre de s'exclure (pour poursuivre leur propre action, par exemple); et iv) un jugement sur le fond, ayant la force de chose jugée, qui permettrait aux membres de la classe, en cas de réussite, de récupérer des dommages et intérêts appropriés. Le financement de ces actions, qui ont souvent une portée gigantesque, peut etre facilite par un pacte in quota litis (comme c'est le cas aux États-Unis, où l'on parle d'un contingent fee) ou par des fonds publics ou quasi-publics, comme c'est le cas au Quebec et en Ontario.11

Ajoute aux nouvelles rages de la responsabilité du fabricant (qui vise le système tout entier de production), le recours collectif aurait pour fonction d'assurer que le système de production supporte tous les coûts sociaux du système, en cumulant dans une seule action tous les recours de ceux qui ont subi un dommage à cause du système. La combinaison de ces réformes au fond et à la procédure permettrait de juger, non plus des actes précis d'un défendeur qui aurait cause un dommage spécifique à un demandeur individuel, mais de tout un secteur d'activité qui aurait porte préjudice à une classe entière de personnes.

Pour apprécier la portée de l'adoption de la procédure du recours collectif il faut évaluer son impact à la fois sur la procédure civile et sur le droit matériel de la responsabilité civile. Quant à la procédure civile, il semble incontestable que la procédure traditionnelle ne peut rester inchangée quand il s'agit d'un recours collectif. D'abord, le droit d'agir en justice est restreint, car l'autorisation judiciaire est nécessaire pour la poursuite du recours. Ensuite, il est admis que le rôle du juge est plus important dans le recours collectif que dans l'action ordinaire. Le juge doit gérer une procédure qui, pour arriver aux résultats visés, nécessiterait toute une bureaucratie dans le cadre étatique. On parle ainsi du juge gestionnaire (managerial judge), qui doit prendre toutes les mesures nécessaires pour protéger les intérêts des membres (absents) de la classe et pour assurer le bon déroulement de la procédure.12 Finalement, les moyens d'exécution des jugements 10 Pour une histoire sommaire du recours collectif, voir H.P. Glenn, "The Dilemma of Class Action Reform" (1986),

6 O.J.L.S. 262; "A propos de la maxime 'Nul ne plaide par procureur"', Rev. trim. dr. civ. 1988.59; pour une étude approfondie, voir S. Yeazell, "Group Litigation and Social Context: Toward a History of the Class Action" (1977), 77 Col. L. Rev. 866.

11 Sur ces questions et sur la procédure des recours collectifs, voir Glenn, supra, note 10.

12 Voir J. Resnick, "Managerial Judges" (1982), 96 Harv. L. Rev. 374.

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doivent etre radicalement révisés, car si l'exécution reste dirigée contre un seul défendeur, elle doit maintenant accommoder les demandes précises de tous les membres de la classe, dont les particularités peut varier de façon très importante. Le jugement du recours collectif à la force de chose jugée; il faut quand même toute une structure pour sa mise en vigueur, en l'absence d'une transaction.

Quant à l'impact du recours collectif sur le droit matériel de la responsabilité civile, il a souvent été dit que le développement du recours collectif est une reforme de la procédure qui n'a pas d'effet sur les critères matériels de la responsabilité. En décidant cependant de la culpabilité d'un défendeur en l'absence d'une preuve complète des conséquences de sa conduite, on rompt avec la règle traditionnelle de la Common Law selon laquelle la preuve du dommage du demandeur est un élément essentiel de chaque action en responsabilité civile. Il est évident que cette caractéristique du recours collectif est aussi incompatible avec l'article 1382 du Code civil français, qui requiert la preuve de la faute du défendeur, du dommage au demandeur et du lien de causalité entre les deux. En rompant avec les règles traditionnelles de la responsabilité civile de Common Law et de droit civil, le recours collectif permet au juge de juger dans l'abstrait la conduite du défendeur. La responsabilité ne se trouve pas dans les relations de fait (acte et dommage résultant) entre deux personnes, mais dans une évaluation du potentiel des activités du défendeur de causer un dommage, envers une classe prévisible (et maintenant représentée) de personnes.13 Dans le débat actuel sur les recours collectifs, il semble de plus en plus admis que le recours collectif rompt avec le droit matériel traditionnel, et ne constitue pas une simple reforme de la procédure. Ainsi, on plaide désormais ouvertement pour l'idée que le recours collectif nécessite l'évaluation de tous les risques crées par un système de fabrication de biens, et cela envers la totalité de personnes qui pourraient en etre affectées. Les précautions prises par l'industrie sont en fonction des risques globaux prévus par l'industrie même. Pour juger sa responsabilité, il faut évaluer la suffisance de telles mesures de précaution contre la totalité des risques poses, et non pas simplement contre le dommage subi par un seul demandeur.14

Ainsi, l'institution du recours collectif permet de compléter la construction théorique d'une justice de masse. L'adoption de la responsabilité dite "stricte" permet de viser le 13 Si le droit civil connaît une notion de faute dans l'abstrait (la faute constituée, par exemple, par la simple

violation de la loi), cette faute abstraite n'a jamais donne lieu elle-même à la responsabilité, vu la nécessité pour chaque demandeur d'avoir l'intérêt requis pour intenter l'action, c'est-à-dire, faire preuve d'un dommage qui lui est personnel. Sur la question de savoir, en Common Law, si un demandeur individuel doit etre prévisible voir la decision de la Cour suprême du Canada dans l'affaire Canadian National Railway Co. v. Norsk Pacific Steamship Co. (1992), 91 D.L.R. (4th) 288, notamment pour ce qui concerne des dommages purement pécuniaires.

14 Voir, dans ce sens, D. Rosenberg, "Class Actions for Mass Torts: Doing Individual Justice by Collective Means" (1987) 62 Ind. L. J. 587.

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système entier de production de biens de consommation, en permettant de juger du caractère "défectueux" on non du bien. Le recours collectif permet de faire ce jugement non pas à l'égard d'un seul demandeur, mais envers toute la classe de personnes qui pourrait éventuellement etre affectée par la production de ces biens. Le système est juge, et ce, par rapport aux personnes affectées par le système. Le juge doit s'adapter à cette nouvelle forme de jugement, mais la justice de masse serait possible. Il reste à évaluer la mise en vigueur de cette construction théorique fort intéressante. Y aurait-il des limites de la fonction judiciaire, qui résistent à l'idée d'une justice de masse?

II La justice de masse et le pouvoir judiciaire

La tradition de la Common Law évoque le pouvoir judiciaire. La magistrature ne serait pas une simple autorité, telle la magistrature française,15 mais partagerait les pouvoirs originaux de la société et jouirait des garanties d'indépendance nécessaires pour fonder ce véritable pouvoir. Il est donc admis que le juge est source du droit, et si cette source est concurrencé aujourd'hui par une législation florissante, il est incontestable que la magistrature, surtout celle des cours d'appel et des cours suprêmes, jouit toujours d'une grande autorité. Pour qu'une justice de masse soit possible, il faudrait une magistrature ayant l'autorité de celle de la Common Law. Dans quelle mesure, cependant, cette magistrature pourra-t-elle supporter le poids d'une justice de masse? Nous tenterons de répondre à cette question en examinant d'abord certaines caractéristiques de la fonction judiciaire, pour ensuite voir l'effet de ces caractéristiques sur la justice de masse, en matière de responsabilité des fabricants.

A La fonction judiciaire

Le juge décide selon le droit. Il juge ce que le droit lui dit de juger. Si le droit dit qu'il existe des droits subjectifs de propriété, le juge décide que tel ou tel individu est propriétaire d'un bien. Si le droit indique que des droits de créance découlent d'un contrat, le juge décide si un contrat existe pour savoir qui est titulaire des droits de créance. La fonction judiciaire est donc dictée dans une certaine mesure par des règles de droit et, dans le monde occidental, ces règles de droit visent surtout l'individu et ses droits. L'idée de la justice de masse est contraire à cette tradition. Dans le domaine de la responsabilité civile, cependant, les règles de droit sont relativement peu contraignantes. Le juge doit juger si le défendeur a eu tort, ou a commis une faute, mais la notion de tort est tellement large qu'elle tolère l'argument selon lequel un défendeur a eu tort de construire un système de fabrication comportant des risques inévitables de blessures. Comment le juge doit-il juger un tel argument, comme juge? De même, si l'on demande au juge de ne plus rendre 15 Voir R. Perrot, Institutions judiciaires, 2e ed., Paris, aux p. 58, 59 ("...il est difficile de nier que la fonction de juger

est confiée de nos jours à une 'autorité judiciaire'... Tout porte à croire qu'il faut se résigner à ne plus parler d'un 'pouvoir judiciaire ' .

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jugement en faveur de tel ou tel individu, mais en faveur d'un groupe de personnes individuellement inconnu, comment le juge doit-il répondre à cette requête, comme juge? La tradition est à l'effet que le juge décide selon des procédures justes, avec finalité, et de façon impartiale. Cette tradition doit-elle etre maintenue ou la justice de masse dicte-t-elle d'autres façons de juger?

1 Le jugement selon des procédures justes

Le principe processuel le plus fondamental est à l'effet que les parties au litige doivent etre entendues, de façon contradictoire. Le principe ne vise pas un modale précis de procédure -- inquisitorial ou adversarial, oral ou écrit -- mais plutôt la possibilité, selon des modalités à définir, de présenter une argumentation. Si l'on change les règles matérielles de la responsabilité civile d'un regime de faute à un regime dit de responsabilité "stricte", en matière de responsabilité de fabricants, le juge doit néanmoins entendre le fabricant avant de le condamner. C'est dire que le fabricant n'est pas responsable parce qu'il est fabricant. C'est son activité qui doit etre jugée, mais c'est son activité dans le sens le plus large qui est maintenant visée.

Le développement de la responsabilité dite "stricte" des fabricants aux États-Unis a donc été accompagnée par le développement de nouveaux arguments de la part des fabricants défendeurs. Notamment, les fabricants allèguent que leur système de production ne peut pas etre condamne parce qu'il correspond aux meilleures connaissances scientifiques de l'époque. Les produits n'ont pas à etre libres de défectuosités selon un standard absolu, mais selon un standard de ce qui est humainement possible lors du développement du produit. C'est la défense dite du "state of the art ". Les litiges en matière de responsabilité des fabricants ne sont donc pas devenus simples ou superflus avec l'énoncé de la responsabilité dite "stricte". Ils sont devenus plus complexes et plus coûteux. Le demandeur doit prouver la défectuosité du bien, selon le témoignage des experts; il doit aussi répondre aux allégations de la défense selon lesquelles le bien correspond aux meilleurs critères de l'époque de sa production. Malgré le langage utilise d'une responsabilité "stricte" ou "objective", la question se pose, en vue du caractère des litiges provoques, si la responsabilité des fabricants a été alourdie ou non. Les juges continuent à juger; les résultats dépendent de leur jugements et non pas du langage ou des techniques d'argumentation.

2 Le jugement final

Ce qui caractérise le jugement du juge, selon la tradition occidentale, c'est sa finalité. La chose définie par la procédure, est jugée, c'est-à-dire, définitivement résolue et donc passible d'exécution. On conteste cette tradition aux États-Unis, en évoquant un modale du juge dit du droit public, qui serait plutôt participant et gérant des litiges qui auraient ainsi

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un caractère perpétuel.16 Le recours collectif illustre d'une certaine manière cette autre conception du juge, car en rendant jugement en faveur des membres inconnus d'une classe, le juge ne rend pas un jugement exécutoire au sens traditionnel. Puisqu'on ne connaît pas le dommage subi par chacun des membres jugement n'est pas passible d'exécution individuelle même s'il est censé avoir la force de chose jugée. En le constatant, l'on comprend mieux la règle qui requiert la preuve du dommage individuel dans l'action en responsabilité-. La règle n'existe pas comme simple condition de la responsabilité civile, mais comme condition de l'exercice de la fonction judiciaire. En l'absence de preuve d'un dommage individuel, la chose jugée serait impossible. Il demeurerait toujours quelque chose qui reste à juger, du moins potentiellement.

Les lois qui ont créé des recours collectifs ont prévu cette difficulté d'exécution et prévoient des moyens complexes d'exécution. Ces moyens permettent aux membres de la classe de se présenter pour que leur dommage soit vérifié (il n'est pas toujours dit par qui) ou que des mesures de distribution générale soient entreprises pour effectuer un transfert de fonds du défendeur vers la classe (réduction du prix du transport, par exemple, par une société du transport). Ces mesures provoquent, cependant, d'autres difficultés. Si l'on ne contrôle pas rigoureusement les demandes individuelles de compensation, des risques importants de fraude.17 Si la distribution est effectuée de façon générale, il est certain qu'on accordera compensation à des personnes qui n'ont pas subi de dommage et qu'on compensera de façon insuffisante ceux qui en ont vraiment subi. D'ailleurs, la possibilité que les dommages qu'auraient subis les membres de la classe soient très particuliers à chaque membre de la classe amène au rejet de beaucoup de recours collectifs, faute d'un caractère commun, même si le défendeur aurait été à l'origine de tous les dommages subis. On refuse aussi de dévier le cours normal du procès en statuant d'abord sur la responsabilité puis sur le dommage; les deux seraient trop intimement lies pour permettre un jugement initial pris sans prendre connaissance de tous les dommages subis. C'est particulièrement le problème pour les dommages causes par l'amiante; le recours collectif s'est révélé particulièrement inefficace face aux maladies complexes et particulières qui ont pu etre causées par ce produit.

Ces difficultés dans la détermination des dommages ont même permis à certains à proposer que l'on élimine le problème en permettant aux juges de rendre jugement en faveur de chaque membre de la classe, pour la moyenne de dommages qui auraient été causes par le système du défendeur. Puisque l'on calcule la responsabilité systémique en 16 Voir A. Chayes, "The Role of the Judge in Public Law Litigation" (1976) 89 Harv L Rev 1281.

17 Voir le Globe and Mail de Toronto du 19.8.93, à la p. 1, sur des tests entrepris par des sociétés américaines d'assurances simulant des accidents d'autobus pour filmer l'arrivée sur l'autobus, après l'accident, de gens qui chercheront ensuite à etre compenses pour leurs blessures>>.

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visant le potentiel général du système de créer des dommages, ce même critère ne devrait-il pas etre utilise pour l'octroi des dommages intérêts?18 On peut voir dans cette proposition l'ultime défi à la définition traditionnelle de la fonction du juge. Peut-il simplement ordonner le transfert de sommes d'argent entre les membres d'une société sur la base d'une appréciation des activités du défendeur et la probabilité que certaines personnes puissent avoir subi du dommage, sans égard à la nature individuelle du dommage. L'idée n'a jamais été mise à l'épreuve aux États-Unis, mais est concevable. Le jugement serait passible d'exécution, d'une certaine façon. La suggestion est incompatible, cependant, avec la fonction corrective du juge et l'oriente vers la tache de la redistribution générale des ressources de la société. C'est la situation institutionnelle du juge dans la démocratie qui semble etre l'obstacle majeur à ce développement. Le juge est indépendant, pour garantir l'impartialité de son jugement sur le plan du litige particulier. Son indépendance de la société le rend inapte à entreprendre une telle restructuration de la société. Il y aurait toujours une place pour la politique en démocratie.

3 Le jugement impartial

L'impartialité est l'objectif de beaucoup de règles processuelles, qu'elles visent le statut du juge ou la procédure à suivre devant lui. Le juge de la procédure contradictoire de la Common Law n'est pas un juge processuellement actif. Il n'y a pas, en principe, une mise en état .19 Le juge du recours collectif, cependant, se trouve dans une situation exceptionnelle. Le procès devant lui a une très grande ampleur et regroupe beaucoup d'intérêts potentiellement divers. Le representant de la classe, et son avocat, agit au nom des membres de la classe, mais protège en même temps ses propres intérêts. La protection des intérêts des membres absents de la classe incombe donc au juge, qui doit à la fois faire avancer la procédure, fort complexe, et protéger les absents. Comme on l'a vu, il est censé gérer le litige.20 Gérer le litige, cependant, veut nécessairement dire ne pas céder aux arguments du défendeur et agir comme si la classe existait et avait besoin de protection jusqu'à l'examen des plaintes individuelles ou jusqu'à ce que des mesures de distribution générales soient prises. Le juge qui gère le fait nécessairement selon une politique de gestion. Il perd en impartialité car il ne peut pas etre au-delà des nécessités de la gestion. Souvent aux États-Unis on a critiqué les recours collectifs parce que les membres absents de la classe n'ont pas la possibilité de diriger leur propre litige. Il y aurait donc entorse au principe de l'autonomie processuelle. Le problème, cependant, est tout autre. C'est que le défendeur doit procéder sans connaître les détails des réclamations des autres membres de 18 Voir D. Rosenberg, supra, note 14.

19 Cette situation change à l'heure actuelle en Amérique du Nord avec l'instauration du Case Management Judge, qui a comme fonction de suivre la procédure et effectuer une mise en état.

20 Voir supra, texte accompagnant la note 12.

13

la classe. C'est le défendeur qui est privé de la possibilité de fonder ses arguments sur la particularité des réclamations. Le juge qui maintient la classe empêche l'élimination de ses membres par le défendeur et cela en empêchant que les arguments du défendeur soient entendus. La gestion du recours collectif pose donc d'importantes questions d'impartialité.

Il serait inexact, cependant, de conclure que les juges rejettent automatiquement tout engagement de cette nature, simplement parce que leur impartialité peut etre mise en question. On leur demande d'agir pour protéger la classe. Refuser systématiquement de telles requêtes serait prendre une position préalable sur l'une des questions les plus essentielles du recours collectif. L'impartialité doit donc exister même sur la question du maintien de l'impartialité. On s'engagera quand cela semblera approprie. La question est de savoir si cette ouverture vers l'engagement, ce rejet du rôle traditionnel du juge, peut soutenir une justice de masse. Ou serait ce, par contre, une occasion exceptionnelle qui relègue le recours collectif au rôle d'un recours exceptionnel, incapable de supporter le fardeau qui lui est demande?

On essayera de répondre à cette question en abordant la question de l'impact de la définition traditionnelle de la fonction judiciaire sur les instruments de la justice de masse.

B La fonction judiciaire et la justice de masse

La justice de masse pose un défi à la définition traditionnelle de la fonction judiciaire. Dans quelle mesure la magistrature peut-elle s'écarter de cette définition pour accommoder les instruments d'une justice de masse?

La procédure civile est largement sous le contrôle des parties, et les tribunaux sont largement sous le contrôle des juges. Ce qu'on appelle le système judiciaire est donc en réalité hautement décentralisé. Dans le contexte des fédérations et des confédérations, comme les États-Unis ou le Canada, on compte aussi plusieurs ordres judiciaires. La première constatation qui s'impose est donc qu'il est extrêmement difficile, voire impossible, de connaître le véritable impact de l'idée d'une justice de masse. Le système ne répond pas au critère de sa propre efficacité. Il a été créé pour résoudre des litiges individuels et les résultats de ces litiges ne sont pas comptabilises. Quelquefois l'on gagne; quelquefois l'on perd. Si le système doit effectuer des transferts de richesse dans la société, sur la base de critères généraux qui visent des secteurs entiers d'activité et des classes entières de personnes, on constate rapidement qu'il est impossible de savoir dans quelle mesure cette mission est effectuée. Le problème de la définition de la fonction judiciaire ne se pose donc pas uniquement comme question a priori; il se pose aussi comme obstacle a posteriori à tout effort de faire en sorte que la magistrature rende compte de ses activités. Le juge rend une décision publique et rend compte ainsi de ses activités personnelles; la

14 (1996) 26 VUWLR

magistrature immense de l'État moderne est présentement incapable de rendre compte des siennes.21

Le débat est donc très vif aux États-Unis sur l'effet de l'adoption d'un critère de responsabilité "stricte" pour juger de la responsabilité des fabricants. Intuitivement, on dirait que les fabricants portent un fardeau de responsabilité plus élevé que sous un regime de faute. Cependant, comme l'on a constate, l'adoption de ce critère ne semble nullement avoir réduit le taux de litiges dans le domaine, mais plutôt avoir augmente leur complexité.22 Il est difficile aussi de conclure que l'adoption du critère du bien défectueux a ouvert la porte à un plus grand nombre de demandes, car l'expérience canadienne est à l'effet que toute demande en matière de responsabilité de fabricants peut facilement etre reformulée en termes de faute ou de négligence et que le système traditionnel peut etre facilement adapte aux activités des grandes organisations.23 Il n'est donc pas surprenant que de sérieuses études aux États-Unis aient avancé l'idée que le taux de réussite des demandeurs dans les affaires de responsabilité des fabricants soit en chute constante depuis la fin des années '70, et soit tombe d'un taux de réussite d'au delà de 55% en 1979 à un taux de réussite aux alentours de 40% en 1988, et cela pour les tribunaux fédéraux et étatiques.24 La justice de masse produit-elle les résultats souhaités? On ne sait pas, mais ce n'est pas évident.

Quant à l'autre instrument majeur de la justice de masse, le recours collectif, les statistiques font défaut encore une fois. On ne sait pas combien de recours collectifs ont donne lieu à des jugements ayant effectue un transfert de richesse d'un défendeur à une classe d'ayants cause. Deux observations sont cependant possibles. D'abord, les statistiques que l'on possède démontrent un taux d'utilisation du recours collectif en déclin ou nettement en deçà des prévisions. C'est le cas notamment au niveau fédéral des États-Unis où le taux d'utilisation a chute de 2,7% à 0,38% de 1976 à 1984. Il serait même plus réduit aujourd'hui. Au Quebec, le taux d'utilisation reste aux alentours de 0,04%, malgré 21 Sauf à un niveau élémentaire quant au nombre de dossiers ouverts et règles, et même ces données de base font

souvent défaut.

22 Voir supra, section II.A.i.

23 La notion de faute est ainsi définie plus précisément et intervient aux points distincts dans les activités de l'organisation. Dans le cas du fabricant, il y aurait des possibilités de faute dans le fabrication, dans la conception et dans la distribution (défaut d'informer sur les dangers) du bien. Sur ce phénomène voir H. P. Glenn, <<La compétence internationale et le fabricant étranger, (1985) 45 R.du B. 567; ibid., "Judicial Authority and the Liability of the Manufacturer, or Jusqu'où peut-on aller trop loin?", (1990) 38 Am. J. Comp. L. 555, aux p. 560 et s.

24 T. Eisenberg & J.A. Henderson, Jr., "The Quiet Revolution in Products Liability: An Empirical Study of Legal Change," (1990) 37 U.C.L.A. L. Rev. 479; ibid., "Is the Quiet Revolution in Products Liability Reflected in Trial Outcomes?" (1990) 17 (No.l) Cornell L. For. 2.

15

les prévisions initiales d'un taux d'utilisation de 1%. La deuxième observation qui semble possible, c'est que les recours collectifs ne procèdent presque jamais au stade du jugement sur le fond, et donc ne procèdent presque jamais au stade de l'exécution judiciaire. Il y a inévitablement des transactions. Les juges préfèrent les transactions parce que la transaction évite à la fois les difficultés d'exécution d'un jugement et la possibilité de multiples actions individuelles. Les avocats des représentants des classes la préfèrent également parce qu'elle assure des honoraires importants sans le risque de perdre le procès. Les avocats des défendeurs la préfèrent parce qu'elle resoud les réclamations d'une quantité inconnue de personnes pour une somme connue.25 Les recours collectifs ne sont pas menés à terme. Comme une espace de dinosaure processuel, ils s'épuisent en cours de route, pour terminer dans des circonstances inconnues ou difficiles à évaluer. Le domaine du recours collectif est donc un domaine judiciaire sans jugements, où l'on ne peut pas conclure que des règles de droit sont appliquées on non. Si les transactions sont soumises à l'approbation judiciaire, il s'agit d'un contrôle judiciaire minimal, qui évite simplement les conflits d'intérêt et les abus les pires. Des questions difficiles sont inévitablement posées quant au rôle des avocats qui défendent des parties absentes et qui sont les véritables moteurs des recours.

Conclusion

Les efforts pour créer une justice de masse ont été fort ingénieux. Ils représentent la somme des connaissances juridiques de la tradition occidentale et utilisent les instruments les plus puissants de cette tradition. La justice peut-elle cependant etre une justice de masse? On ne saurait le conclure de façon affirmative, et il est fort possible que l'on ne saura jamais, toujours faute de données. C'est que la justice doit toujours répondre à sa première responsabilité, qui est celle de juger, dans le sens traditionnel. La justice de masse doit donc toujours etre une justice d'exception. Les difficultés de la justice de masse, cependant, sont telles qu'une justice d'exception ne saurait pas les résoudre.

COLLECTIVE JUSTICE? REFLECTIONS ON CIVIL LIABILITY IN NORTH AMERICA

The law of the countries of North America presents a number of special features. First, the law of North America is a law which is largely transplanted and whose origins can be found in the legal traditions of several European countries, and the effect of this overall is 25 Les défendeurs initient maintenant les recours collectifs dans l'espoir de circonscrire le nombre de litiges, et les

avocats des demandeurs individuels résistent vigoureusement à leurs requêtes. La tactique des défendeurs ne serait cependant pas d'une grande réussite. Voir M.K. Kane, "Group Actions in Civil Procedure: the United States Experience" (1990) 38 Am J Comp L 163.

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that the study of North American law is at base a study of the phenomenon of reception of laws . Even though the common law tradition has been adopted in the United States as well as in most of the Canadian provinces, the civilian tradition has been established in Mexico and in Quebec. The law of the countries of North America constitutes in many respects an extension and an autonomous development of the conception of law which arose in Europe in the 18th and 19th centuries. That law has become a instrument of reason in the modern organisation of society. Transported to North America, it became one of the key features of the new societies which were largely free from the constraints which existed in old Europe.

Are there limits to such a law? Attention is first directed just to the United States where at one time all the dominant institutions of the European legal traditions can be found — that is to say, recourse to legislation which is taking a more and more dominant role and which has the form of codifications in many states, and of a judicature which still benefits to a large degree from the prestige and influence of the judges of the Royal Courts of England. Can these institutions and the law which they develop, respond in an efficient manner to the needs of the administration of justice in a modern state? Traditional justice with its individualised vocation appears at first sight inadequate to fulfil this task since it cannot, as a matter of principle, ever provide an answer to the multiple claims which are inherent in an existence in a modern society which is characterised by the mass production of consumer goods. Products which are manufactured on mass generate correlatively losses on mass. The legal system must therefore reflect the magnitude of the institutions and their methods. A legal system in an affluent society must be a legal system with a collective vocation.

Two areas of private law illustrate this tendency towards a form of collectivisation of private law. First of all, there is that which relates to the field of product liability and then that of civil procedure where the American procedural genius has been able to develop the original concept of class actions.

In the United States, one speaks of mass torts (an expression which does not well describe a concern with the nature of loss). The expression mass damage may be more appropriate in its reference to mass accidents. However, speaking of mass torts implies an initial acceptance, and before any legal decision on the claim, of the nature of the activity of the defendant and it is there that the principle difficulty for the jurist lies. In the 1960s following the judgment of the Supreme Court of California in the case of Greenman v Yuba Power Products Ltd the law of the United States began to give a new dimension to the positive law affecting commercial activities and consumer law.

Two important developments mark the stages of intellectual development of the law relating to the manufacturers of products. First, a plaintiff was allowed in the Greenman case to proceed not simply on the basis of a fault in the production of the goods, but on a

17

fault in the conception or the design of the goods — a design fault. Once this first hurdle was cleared, it became possible to admit the existence of a presumption of fault in the manufacturer to the effect that the proof of a fault in the conception became much easier: if the goods put on the market are defective and a source of loss to the consumer who utilises them or buys them, the defectiveness of the goods gives rise to a presumption of a fault in the design conception. The possibility of monitoring the activity of a defendant producer seen in its entirety gave rise to other developments in United States law, developments which have not yet been taken up in their fullest implications in the laws of other countries. Once the criteria for civil liability in respect of products was expanded, there was then only the problem of the rules of form. A class action was therefore created to resolve these procedural problems. In Quebec, the principle of class action was accepted in 1978: Ontario followed the American and Quebec example in 1992.

A reference to the common law tradition brings to mind the judicial power. Unlike the French judiciary, the common law judiciary is more than a simple authority since the judge shares one of the fundamental powers of society and enjoys guarantees of independence that are necessary to support the exercise of this power. In the context of this system, it is therefore possible that a judge can be a source of law. Despite the fact that there is a present legislative tendency which is increasing strongly, it is still clear that the judiciary in the common law countries, and particularly in the courts of appeal and the supreme courts, has still great authority and prestige. The necessary corollary of the good system of law which looks to the interest of the collectivity rests on the existence of a judiciary which can respond to the needs of the community. It remains to be seen to what extent this type of judiciary will be able to support the consequences of the operation of mass justice. Only a study of some of the characteristics of the judicial function and their effects in products liability cases can provide an answer to this question.

1

QUELQUES COMMENTAIRES SUR L’ÉVOLUTION DU DROIT PÉNAL EN FRANCE: TEXTE DE LA CONFÉRENCE DONNÉE À L'UFP LE 10 JANVIER 1994 Pierre Truche*

Face à la délinquance, à son augmentation, à son internationalisation, les magistrats se doivent d'agir pour tenter de la réduire. Pour cela, ils ont à leur disposition des codes couvent modifiés pour s'adapter aux évolutions. Un nouveau code pénal entrera en vigueur le ler mars en métropole. En 1993, le code de procédure pénale a été modifié significativement deux fois, le 4 janvier puis le 24 août.

Mais les lois ne suffisent pas. Encore faut-il que la pratique s'adapte, que des politiques de l'action publique soient mises en oeuvre, que les magistrats prennent des initiatives.

Je voudrais à cet égard, marquer quelques évolutions qui caractérisent la dernière décennie.

En permettent en 1981 à toute personne de saisir la Commission et la Cour européenne des droits de l'Homme siégeant à Strasbourg, le parlement français a rendu plus présente dans les juridictions l'obligation de respecter strictement dans les procédures les droits définis par la Convention du 4 novembre 1950. Les magistrats doivent notamment statuer dans un délai raisonnable, confronter les personnes mises en cause avec ceux qui les accusent, veiller aux droits de la défense. La Législation a dû aussi être mise en conformité avec les règles dégagées par la Cour de Strasbourg en matière d'écoutes téléphoniques. Cela signifie qu'il faut à la fois ne pas désarmer l'État face au crime mais qu'on ne peut le faire que dans le respect des droits de l'Homme. La fin ne saurait justifier les moyens. C'est sans doute le grand défi de cette fin de siècle que de lutter démocratiquement contre la délinquance. * Procureur Général près la Cour de Cassation à Paris.

2 (1996) 26 VUWLR

Il faut pour cela conjuguer les énergies. Une autre innovation a donc été la création de comités départementaux et communaux de prévention de la délinquance dans lesquels magistrats, autorités administratives, représentants de ministères comme l'éducation nationale et la jeunesse et les sports, membres d'associations se réunissent régulièrement pour mesurer l'évolution de la délinquance locale et mettre en commun des actions de prévention pour y répondre. Le slogan "la délinquance est l'affaire de tous" traduit exactement la nouvelle démarche. Des magistrats ont vu ainsi leur domaine d'action s'étendre en amont; il s'agit de ceux du ministère public, des juges des enfants et des juges de l'application des peines.

Mais la paix sociale ne sera acquise que si le sort des victimes est pris en considération, ce qui est également une évolution de la dernière décennie tant dans la loi qui facilite les constitutions de parties civiles que par la création d'un réseau d'associations d'aide aux victimes qui apportent à celles-ci une aide matérielle et psychologique.

Ces progrès devaient conduire des magistrats à prendre des initiatives dans une nouvelle direction, celle de la médiation. En même temps que le législateur diversifiait les sanctions en prévoyant des peines de substitution à l'emprisonnement, le ministère public confronté à une petite et moyenne délinquance du quotidien à laquelle il pouvait difficilement répondre rapidement par les moyens classiques, en est venu à lancer des expériences de médiation faites sous son contrôle, mettant en présence auteur et victime afin que celle-ci soit désintéressée et que celui-là renonce à entrer plus avant dans la délinquance. Lorsque le législateur a décidé de 11 juillet 1975 qu'un prévenu pouvait être dispensé de peine si son reclassement est acquis, si le dommage a été réparé et si le trouble résultant de l'infraction a cessé, il a montré les limites de la poursuite. Plus tôt ces trois conditions seront remplies et mieux cela vaudra d'où les efforts faits pour que cette situation se réalise le plus près possible de l'infraction. Au procureur de la République, ensuite, en application du principe de l'opportunité des poursuites, d'apprécier s'il y a lieu de classer l'affaire sans suite.

Il va de soi que cette nouvelle forme de justice ne peut s'appliquer dans tous les cas. Elle est réservée à la petite et à la moyenne délinquance et aux personnes qui ne sont pas encore devenues des professionnels vivant d'infractions ou causant de graves troubles à l'ordre public ou à la dignité de leur victime. Par cette voie nouvelle il s'agit de répondre aux attentes de nos concitoyens qui n'acceptent ni de voir grandir un sentiment d'insécurité ni la multiplication de petits délits.

Mais il faut toujours rappeler qu'il s'agit là de nouvelles méthodes d'action de la justice que le législateur du 4 janvier 1993 a introduit dans le code de procédure pénale. Il ne s'agit pas là d'une réponse sociale car qui s'adresse à la justice doit obtenir d'elle une réponse. Quitte, comme on l'a vu, à ce que cette réponse s'appuie sur l'action de ses partenaires dans les comités de prévention et de ses collaborateurs, éducateurs et experts.

La tentation est grande actuellement, pour un nombre d'affaires, certes limité, de transférer le Pouvoir de juger de la justice à la presse; des journalistes se font enquêteurs, d'autres aimeraient que le public juge de la culpabilité dans un procès par Minitel.

Or le temps de la presse qui vit dans l'instant n'est pas celui de la justice qui dispose d'un "délai raisonnable" pour réunir des preuves.

On ne peut juger dans l'urgence sans respecter le contradictoire et au vu de renseignements obtenus par suite de vol de documents par un tiers ou par violation d'un secret professionnel.

Si la justice, relayée par la presse, doit communiquer sur les faits de société qu'elle constate ou sur son fonctionnement, elle ne doit le faire, au sens de l'article 10 de la Convention européenne de sauvegarde des droits de l'homme, qu'en considérant que la liberté d'expression est un droit relatif qui supporte des exceptions et qui appelle des "devoirs et responsabilités".

C'est d'ailleurs, plus généralement, ce qu'implique la condition de magistrat. Si cette fonction devait se distinguer d'une autre ce ne serait qu'en mettent en avant une éthique plus haute et une déontologie plus exigeante.

Some thoughts on the evolution of French criminal law

Faced with criminality, its increase and its internationalisation, judges have a duty to try to reduce the problem. A range of new legal measures has been put at their disposition, but they also have the duty to respect the principles of the European Convention of Human Rights. French criminal law finds itself in the context of evolution and constant adaptation. A new Criminal Code came into force on 1 March 1993 and the Code of Criminal Procedure was amended substantially on 4 January and 24 August 1993. When the French Parliament permitted any person to take a complaint directly to the Commission and the European Court of Human Rights which sits in Strasbourg, it placed a duty on the courts to respect the rights defined by the Convention of 4 November 1950 (particularly to give decisions within reasonable time, and to confront persons who have been accused by their accusers, and to watch over the rights of the defence). The legislation had also to be brought into conformity with the rules established by the Strasbourg court in respect of telephone tapping. The new law also facilitates the establishment of civil causes in the criminal process, and makes provision for victims.

These developments will lead judges to the taking of initiatives of a new kind, particularly in the direction of mediation. In order to meet the concerns of the community, which wishes neither to feel less secure nor to see the increase of petty crime, the Attorney-General has undertaken experiments with mediation. These experiments have brought the

4 (1996) 26 VUWLR

author and the victim of the crime together with a view to encouraging the victim to withdraw the complaint and the accused to desist from anti-social behaviour in the future. These procedures have been reserved for criminality of a petty or ordinary nature and for accused persons who have not yet become professionals who live off crime, or who create serious disturbances of the public order, or do serious damage to the person of their victim.

There is a very great temptation these days in a number of cases for the power of the court to judge the justice of the case to shift to the media. It is important while remaining aware of the freedom of expression to remember that it is itself a relative right subject to exceptions and duties. This is too what the role of the judge involves. If this role can be distinguished from others, it is in that it conforms to the highest of ethical standards and the most stringent of procedural requirements.

1

Ref: 02/02/AHA/96

APERÇU SUR LA PROCÉDURE PÉNALE AUSTRALIENNE Bron McKellop*

Section I : Considérations générales

§ 1- Introduction

L’architecture de l'organisation politique en Australie repose sur le principe du fédéralisme. La Constitution Fédérale de 1900 a organisé un partage des pouvoirs législatifs entre d'une part le Parlement Fédéral du “Commonwealth” d’Australie (dont le siège se trouve à Canberra) et les Parlements des six États qui composent l'Australie, d'autre part.

Dans ce cadre institutionnel, le droit pénal échappe par principe à la compétence du Parlement Fédéral et seuls les Etats peuvent légiférer en cette matiere. Toutefois, il ne faut pas en conclure que le Parlement Fédéral soit dépourvu de toutes prérogatives dans ce domaine. En effet le Parlement Fédéral pourra toujours voter des dispositions qui manifestement s'insèrent dans le cadre de ses propres compétences législatives. Ainsi a titre d'exemple, il peut toujours assortir de sanctions pénales les mesures tendant à interdire l’importation des stupéfiants dès lors qu'il s'agit là d'une prérogative qui s'inscrit dans son pouvoir en matiere de commerce extérieur.

En conséquence, les juridictions qui ont à connaître des affaires pénales seront celles de chaque Etats concerné qui auront également une compétence de droit commun pour édicter les règles de procédure qui leur sont propres. Cette compétence s'exerce même pour les affaires pénales relatives à une violation d'une loi fédérale. Dans cette derniere hypothèse les juridictions des Etats exercent une compétence d'exception, à savoir le pouvoir judiciaire du Commonwealth, dont elles sont investies en vertu d'une loi de Commonwealth.

Le droit pénal de trois Etats d'Australie (Nouvelles Galles du Sud, Victoria, South Australia) apparaît comme un mélange de règles écrites et de “Common Law”. La traduction exacte de l’expression “Common Law” n'est pas aisée. On peut toutefois dire * Professeur de Droit à la Faculté de Droit, Université de Sydney.

2 (1996) 26 VUWLR

sans crainte d'etre démenti, qu‘il s’agit des règles qui émanent des juridictions plutôt que du Parlement. Tout comme en Angleterre, les principes généraux du droit pénal ont en Australie, valeur de normes supérieures du droit. Ces principes ont été dégagés au fil des siècles par les tribunaux. C'est ainsi que les principes relatifs à la démence, l’ivresse, l’erreur, la contrainte, et la légitime défense, s'imposent de manière égale et uniforme dans ces trois Etats. Il s'agit là d'un processus continuel qui aujourd'hui incombe aux seules juridictions supérieures de ces états, en dernier ressort à la high Court, et qui tend à la découverte de nouveaux principes. Par contre le support de la qualification pénale des faits reprochés (crimes et délit ou contravention) est de plus en plus du ressort des Parlements de chaque état, les préceptes de la “Common Law” demeurant cependant toujours présents (par exemple pour la définition de la notion de démence).

Les trois autres Etats (Queensland, Western Australia et Tasmania) ont quant à eux des Codes Pénaux qui datent du début de ce siècle. Il reste que ces Codes sont eux aussi basés sur la “Common Law” telle qu'elle était conçue à l'époque de la rédaction de ces codes. De surcroît, l'interprétation de leurs dispositions se fera toujours dans l’esprit de la “Common Law”. On notera que ces trois Etats n’ont toutefois pas de Code de Procédure Pénale à proprement parler.

En Australie le procès pénal s'organise autour de l'alternative suivante: avec jury ou sans jury.

Schématiquement, le procès avec jury est réservé pour les crimes et les délits que l'on pourrait qualifier de sérieux (assassinats, meurtres, viols, coups et blessures graves, vols qualifiés par exemple). Ces procès où siègent un juge et douze jurés sont dans l'organisation judiciaire australienne de la compétence exclusive des juridictions supérieures (“Supreme Court”, “District Court” en Nouvelle Galles du Sud). composent.

Les procès sans jury, intéressent quant à eux , ce que l'on pourrait qualifier de délits d'importance moindre et les contraventions. Ils sont de la compétence de juridictions inférieures (“Local Court”) où siège un juge unique appelé “Magistrate”, qui exerce une juridiction qui à bien des égard peut apparaître sommaire comparée à celle que se déroule dans les procès avec jury. En effet si quantitativement, la plupart des procès pénaux ont lieu devant les “Magistrates”, qualitativement parlant, dès lors que les procédures y sont moins formelles que devant les juridictions supérieures, le déroulement de ces procès ne qu'un intérêt limité et c'est pourquoi les observations suivantes porteront principalement sur les procès avec jury qui se déroulent en Nouvelle Galles du sud , l’Etat le plus peuplé d’Australie.

§ 2- Les différentes phases du procès du pénal

Cinq phases peuvent etre considérée. Toutes correspondent à une étape spécifique de la procédure pénale.

APERÇU SUR LA PROCÉDURE PÉNALE AUSTRALIENNE 3

1 l’instruction

L’instruction se déroule sous le contrôle de la police qui prépare un dossier contenant l'ensemble des preuves à charge. En droit français on pourrait la comparer à une enquête de police judiciaire.

Seront uniquement pris en compte les faits relatifs du dossier, l’instruction n'ayant pas à connaître de la personnalité du suspect. Seront ainsi collectés tous faits, indices corroborés le cas échéant par les dépositions des témoins, des rapports d’experts et tous autres éléments matériels. Les dépositions du prévenu, dès lors qu'il en exprime le désir ses déclarations, seront également consignées dans le dossier d'instruction.

2 Le renvoi à l'audience

Sous réserve qu'une mise en accusation ait été prononcée par un “Magistrate”, le dossier est ensuite transmis au procureur qui n'est pas tenu par la decision du Procureur de telle sorte qu'il peut soit s'en tenir à la qualification retenue par le Magistrate soit en préférer une autre, soit décider qu'il n'y a pas lieu à poursuite.

3 Le procès

Ici, la procédure est accusatoire en ce sens que le procureur à seul la charge d'établir la preuve de la culpabilité de l'accusé. Pour ce faire, il se fondera sur un ensemble de preuves qu’il portera à la connaissance du jury et également de l’accusé ou de son conseil. Ce dernier devant à l'inverse, faire valoir devant ce même jury tous les éléments tendant à établir l'absence de culpabilité de son client. Le tribunal, c’est-à-dire, le juge et le jury, portant uniquement son attention sur les fait ayant un rapport avec le crime ou le délit. En conséquence la cour n’est pas autorisée à connaître le casier judiciaire de l’accusé, ainsi que tous éléments de la personnalité de l'accusé qui pourraient lui préjudicier. A l'inverse de la conception française, "on juge les faits et non pas l'homme".

4 le processus d'élaboration de la peine et son prononcé (les pays de Common Law parlent de “sentencing”)

Il s'agit d'un rôle dévolu au juge seul, sous réserve bien entendu que le jury ait préalablement déclaré l’accusé coupable. Avant le prononcé du jugement, la cour prend alors connaissance du casier judiciaire de l’accusé ainsi que de l'ensemble des éléments relatifs à sa personnalité. L’avocat de l’accusé pouvant le cas échéant faire entendre tous témoins de moralité qu'il souhaite et voire plaider sur la peine. On notera que le Procureur peut, bien qu'il use rarement de cette possibilité, fournir des explications orales. En Australie, c’est la deuxième étape du processus, qui revêt le plus d'importance. C’est en effet à cette stade que le destin de l’accusé est scellé. Par certains aspects les procès pénaux s'apparentent à une compétition sportive entre le Procureur et la défense, le plus pugnace et le mieux préparé l'emporte souvent.

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5 L'appel

La personne condamnée peut relever appel contre sa condamnation ou sa peine, ou les deux. Le procureur peut également relever appel mais seulement s'il estime la peine insuffisante. Un premier appel est possible auprès d'une Court of Criminal Appeal d'un État particulier, puis le cas échéant une deuxième fois devant la High Court of Australia sous réserve d'avoir obtenu l'autorisation préalable de cette derniere.

Le système pénal australien dans lequel le procès demeure le point culminant, ne présente le même caractère de continuité qu'on lui connaît en droit français dans lequel l'accent est plutôt mis sur la réunion des preuves tendant à établir la culpabilité du prévenu.

Section II: Caractéristiques majeures de chaque étape de la procédure pénale australienne

§1-L’instruction

Elle est du ressort quasi exclusif de la police. En effet hormis pour la délivrance des mandats de perquisition et, sous certaines conditions, des mandats d’amener, les membres de la police ne dépendent pas du juge d’instruction, tout comme ils ne sont pas sous le contrôle des procureurs. Dés lors, en pratique, et a priori , tout ce que peut souhaiter le prévenu (ce qui peut se révéler bien aléatoire car il n'y a pas de vraie garantie formelle offerte au prévenu), c'est que la police veuille bien s'en tenir au respect des dispositions légales et principes généraux du droit pénal applicables dans le cadre de leurs enquêtes. En fait le contrôle de la légalité de l'enquête, est opéré a posteriori par les juges qui lors du procès pourront rejeter toutes preuves obtenues au mépris des règles légales ou déontologiques. Ainsi le juge opère un contrôle a posteriori.

Les interrogatoires du prévenu sont évidemment du seul ressort de la police. On relèvera que si le prévenu conserve durant la phase d'instruction un droit fondamental au silence, ce privilège vaut aussi lors du procès. Les interrogatoires doivent respecter le principe selon lequel si les membres de la police sont autorisés à poser les questions que bon leur semble, ils doivent impérativement néanmoins, à partir du moment où des soupçons apparaissent, indiquer au prévenu que rien ne l'oblige à répondre à leurs questions. A défaut, l'ensemble des déclarations recueillies ne pourront pas etre retenues par la cour.

La question des aveux des prévenus, suscite de nombreuses controverses tant avant que pendant les procès. Cela est surtout vrai pour les aveux qui ne sont corroborés par aucun écrit, ou encore lorsque l'aveu écrit n'est pas signé. Un haut magistrat de la "High Court" (La Cour Suprême en Australie) a déclaré que les membres du jury devaient être avertis des risques qui s'attachent à une condamnation prise sur le seul fondement d’un

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aveu de l'accusé, aveu ultérieurement contesté et non corroboré par des preuves matérielles indubitables. Il reste toutefois que cela est loin d'etre la règle aujourd'hui de telle sorte que le jury, ne dispose que de peu d'information à cet égard lors des procès .

Pour tenter de palier à d'éventuelles contestations, on a maintenant recours aux procédés offerts par les progrès de la technologie; ainsi il est possible de procéder à l'enregistrement vidéo des interrogatoires des suspects, comme cela est déjà le cas depuis quelques années en Nouvelle Galles du Sud, dans le cadre des interrogatoires menés par la “Drug Crime Commission” (la Commission contre les infractions à la législation des stupéfiants). Il en va plus récemment de même pour les interrogatoires ayant eu lieu dans les postes de police pour tous crimes ou délits d'importance. A ce jour, les réticences dues aux anciennes habitudes vaincues et les inévitables problèmes budgétaires réglés, les services de police ont dans leur ensemble fini par accepter d'adopter ce procédé, de telle sorte qu'en principe seuls les aveux enregistrés par vidéo pourront etre produits en justice. On attend néanmoins toujours un cadre législatif et réglementaire qui assure les meilleurs garanties légales à ce système.

L'assistance d'un conseil n'est pas garanti de manière dans l'ensemble des etats de l'Australie et ce malgré une recommandation formelle de la Law reform Commission. Ainsi si ce droit est maintenant reconnu en dans l'Etat de Victoria et dans le cadre de toutes procédures fédérales, il n'en va pas de même dans l'Etat de Nouvelle Galles du Sud.

§ 2-La décision de renvoi à l'audience

Une fois l’instruction terminée et avant que le prévenu ne puisse être renvoyé en procès devant un jury, une condition préalable doit cependant etre remplie. Il convient de satisfaire à la procédure dite “Committee Proceeding”, à savoir une procédure de la mise en accusation d’un prévenu. Elle se déroule devant un “Magistrate” (un juge d’un cour inférieure mais spécialement investi d'un pouvoir exécutif particulier). A l'instigation du procureur (auparavant ce rôle de présentation était dévolu à un policier ayant reçu une formation spéciale à cet effet), tous les témoins à charge devront alors présentés et publiquement entendus par un “Magistrate”, un contre-interrogatoire (“Cross-examination”) étant en tant que de besoin, laissé à la discrétion de l'avocat de la défense. De surcroît, bien que cela soit assez rare dans la pratique, la défense peut elle aussi, user de son droit de faire entendre ses propres témoins.

Sur le fondement de ces témoignages (qui peuvent également inclure les aveux de l’inculpé recueillis par la police), le “Magistrate” doit décider s’il y a un “prima facie case” contre le prévenu, c’est-à-dire un ensemble de preuves étayées pouvant conduire à la condamnation par un jury du prévenu. Dans l'affirmative, il renvoie le prévenu devant une cour supérieure. dans la négative, il prononce la libération du prévenu. Statistiquement, on constate que pratiquement toujours les “Magistrates” se prononcent

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pour le renvoi du prévenu devant une cour supérieure, ce qui fait dire que cette procédure n'a guère de valeur. Mais, dès lors que le caractère accusatoire de la procédure interdit aux avocats de la défense d'avoir accès au dossier de la police ou du procureur, les premiers veulent néanmoins conserver la procédure dite “Committee Proceeding”, en faisant valoir qu'elle permet au moins d'avoir connaissance des preuves dont dispose l’accusation, preuves sans lesquelles il est difficile de se ménager des arguments de défense cohérents .

Néanmoins, s'il n'entre pas dans les intentions de la défense de procéder à un contre-interrogatoire des témoins de l’accusation, on se contentera alors d'une simple référence de leurs dépositions écrites, appelé "Paper Commital". Nonobstant la décision de renvoi devant un cour supérieure par le “Magistrate” prise à l'encontre du prévenu, le Procureur Général (“The Director of Public Prosecutions”) conserve toujours le pouvoir d'infirmer cette décision. Toutefois, dans la pratique, il n'intervient guère, la décision de renvoi du “Magistrate” étant simplement implicitement confirmée.

Le gouvernement en Nouvelle Galles du Sud a comme projet propose d'attribuer au Procureur Général et à lui seul, le pouvoir de procéder au renvoi du prévenu devant la juridiction répressive un prévenu. Ce projet n'est pas sans susciter d'importantes controverses, car l'exclusion du “Magistrate” a aussi pour conséquence le passage d'une procédure publique à une procédure secrète.

§ 3- Le Procès Pénal devant les Cours Supérieures

A Les parties au procès pénal

1 Le juge

Les juges australiens, sont recrutés parmi les avocats les plus chevronnés et appointés par le gouvernement. Ils n’ont pas reçu de formation spécifique pour ces fonctions particulières, si ce n'est à travers leur précédente expérience personnelle. Le juge préside le procès pénal. Toutes les questions de droit sont tranchées par lui, en particulier ce qui doit etre admis ou rejette comme preuve devant le jury.

Avant que le jury ne se retire pour délibérer sur la culpabilité du prévenu, il incombe au juge dans le cadre d'un “summing up”, de porter à la connaissance des membres du jury et de lui expliquer l'ensemble des règles de droit pénal applicables à l'affaire qui leur est soumise, les éléments constitutifs des faits reprochés à l’accusé, ainsi que ceux pouvant établir son innocence. Le juge résume ainsi au jury les points fondamentaux des témoignages qui leurs ont été soumis et tout ce qui leur permettra de se prononcer. Si, le jury après délibération déclare le prévenu coupable, il appartiendra au juge seul de fixer sa peine.

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2 Le jury

Il est constitué de douze membres, personnes physiques, choisies par tirage au sort sur une liste électorale. La défense et le procureur pouvant par trois fois (en Nouvelle Galles du Sud), à tour de rôle, user de leur droit de récusation.

Le jury se prononce sur toutes les questions de fait, et in fine sur la culpabilité ("guilty") ou non de l’accusé ("not guilty"). Dés lors qu'existe un doute raisonnable sur la culpabilité de l’accusé, le jury peut se prononcer pour un acquittement. Quelque soit la décision retenue (culpabilité ou acquittement) la décision du jury doit toujours être unanime ( au moins en Nouvelle Galles du Sud), à défaut un nouveau procès doit normalement avoir lieu.

3 Le Procureur

Les procureurs sont nommés par le gouvernement (en fait par le Garde des Sceaux) parmi les avocats en exercice. Une fois nommés, si leurs activités doivent se limiter à celles dévolues à tous membres du Parquet, ils conservent néanmoins certaines prérogatives de leurs anciennes fonctions d'avocat, c’est-à-dire une totale indépendance dans leur manière de préparer le procès dont ils ont la charge. Les procureurs représentent “the Crown” (la Couronne), c’est-à-dire l’Etat dans les procès pénaux. C’est le procureur qui supporte la charge de la preuve de la culpabilité de l'accusé devant la cour. Pour se faire, il expose en premier lieu l'ensemble des faits au jury puis, il mène l'interrogatoire des témoins qu'il souhaite faire entendre, tout comme celui des témoins delà défense, dans le cadre du respect du principe du contradictoire. Enfin, devant le jury, il prend toutes les réquisitions, qui lui semblent appropriées quant à la culpabilité du prévenu ou de l'accusé.

4 L’Avocat de la Défense

Il est soit librement choisi par l'accusé ou bien nommé au titre de l’assistance judiciaire. Dans ce dernier cas le conseil, tout comme un procureur, est nommé par le gouvernement parmi les avocats en exercice et perçoit le même traitement qu’un procureur. L’avocat de la défense interroge de manière contradictoire l'ensemble des témoins entendus par le procureur et le cas échéant produit à la barre les témoins de la défense. Il plaide après le procureur et tout comme lui, il base son argumentation sur les preuves présentées à la cour et portant uniquement sur la question de la culpabilité. Plus tard, si son client et reconnu coupable, il plaidera à nouveau sur le bien fondé et le quantum de la peine à infliger.

5 L’accusé

Il a droit à bénéficier de l'assistance d'un conseil durant tout son procès et ce y compris dans sa phase préparatoire.

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Trois options s'ouvrent à lui dans le cadre des explications qu'il sera amené à fournir à la cour. Il peut tout d'abord décider de prendre la qualité de témoin, dès lors il prêtera serment et partant il encoure le risque de subir un interrogatoire contradictoire de la part du Procureur. Il peut ensuite, faire un “statement from the dock”, c'est-à-dire une déclaration du banc des accusés, sans avoir à prêter serment et en évitant ainsi un interrogatoire du Procureur. Enfin, en troisième lieu, il peut garder le silence tout le long du procès. Dans cette derniere hypothèse, ni le juge ni le procureur n’ont le droit d'en tirer des conséquences pour le jury.

B Les Règles de Preuves

C’est une partie importante du droit pénal australien. On a souvent fait valoir que ces règles ont été élaborées afin de conférer au jury, une protection contre la faiblesse des preuves qui viendraient à lui etre soumises. Ainsi pour la plupart ces règles tendent à l’exclusion de certaines preuves. En règle générale, et à titre d'exemple, ne seront pas admissibles: les preuves par ouï-dire (c’est-à-dire, ce qu’un autre a dit au témoin au sujet des fait en litige), les preuves fondées sur l’opinion du témoin s’il n’est pas un expert sur le sujet, les preuves sur un aspect négatif de la personnalité de l’accusé ("Bad Character"). Sous réserve que l'une des parties conteste durant le procès, la recevabilité d'une preuve particulière, c'est au juge seul qu'il appartient d'en décider. Ainsi, à défaut de contestation, une preuve même attaquable sur le principe, sera retenue.

Il reste néanmoins que le juge dispose toujours d'un droit discrétionnaire pour refuser toutes preuves qu'il n'estime pas appropriées au bon déroulement du procès.

Par exemple, dans le cas d’aveux recueillis par à la police, les règles de droit applicables postulent que l’aveu doit être volontaire (c’est-à-dire en respectant la possibilité ouverte au prévenu de se taire) . Mais quand bien même cela aurait été le cas, si le juge relève qu’il serait injuste dans les circonstances de l’admettre (par exemple si l’accusé était blessé ou voire trop fatigué), ou s’il constate que l’aveu a été obtenu de manière illégale (par exemple, après une détention trop longue), il peut toujours l'écarter de sa propre initiative.

Au moment du "summing-up", le juge rappellera au jury, que leur décision devra uniquement être basée sur les seules preuves retenues au cours de l'audience. Si le juge prend un certain nombre de notes sur les témoignages qui ont été entendus, il se référera surtout à la transcription en clair du sténogramme de tous les témoignages du procès. Ce document est mis un jour après sa transcription, à la disposition du juge, du procureur et de l’accusé et de son avocat. Il en va ainsi tout au long du procès. Ces transcriptions servent de base au procureur et à l’avocat de la défense dans le cadre des interrogatoires contradictoires des témoins ainsi que pour leurs plaidoiries. Le jury, toutefois, n’aura pas

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accès à cette transcription, de telle sorte que les jurés ne pourront se fier qu'à leurs propres notes et leur mémoire.

§ 3- L' appel

Droit ouvert tant à l’accusé et qu'au procureur (c’est-à-dire “the Crown”- la Couronne), l'appel est porté dans l'Etat de Nouvelle Galles du Sud devant la “Court of Criminal Appeal” (La Cour d’Appel en matière pénale, le même système prévalant dans les autres Etats d'Australie). Trois juges la compose avec à leur tète, un président.

L’accusé peut relever appel sur toutes les questions de droit révélées dans le cadre du procès à savoir tout ce qui relève de l’admissibilité des preuves à l’audience, des explications fournies par le juge au jury. Est également possible l'appel contre les décisions du jury qui doivent reposer sur les seuls témoignages et faits matériels apparus au cours du procès.

L'appel ayant été jugé recevable en la forme, la Cour d'Appel prononcer l'acquittement, la confirmation de la decision de première instance (tel peut etre le cas même si des irrégularités ont été constatées sous réserve cependant qu'il n'y ait pas eu de déni de justice), ou encore ordonner un nouveau procès. L’accusé peut aussi limiter son appel au seul quantum de la peine et chercher en conséquence à la réduire, l'appréciation de la Cour d'Appel étant à cet égard souveraine.

Le procureur quant à lui, voit son pouvoir de faire appel limité aux seules questions de droit. En tout état de cause, son appel ne peut jamais avoir pour effet de remettre en cause une décision préalable d'acquittement prise par un jury dont la décision doit demeurer intangible. Le procureur peut aussi relever appel contre l’insuffisance de la peine infligée en première instance.

Chaque fois que se pose une question de droit de portée générale, une deuxième procédure d'appel pourra alors etre engagée devant la “High Court” (la Cour Suprême d’Australie) , il reste assez rare en pratique et de plus il est subordonné à une autorisation préalable de cette même juridiction.

§ 4- Aveu de Culpabilité fait à l’Audience (Plea of guilty)

Les explications précédentes portaient sur le déroulement d'un procès au cours duquel l'accusé clame son innocence et conteste des faits qui lui étaient reprochés. Dans ce cas-là il appartient au procureur de prouver "au-delà de tout doute raisonnable" que l’accusé est véritablement coupable. A défaut l’accusé sera acquitté. Mais, il reste bien sur, la situation où sur les conseils de son avocat et sur la foi de la transcription des témoignages recueillis devant le “Magistrate” au moment du “Committal Proceeding", que l’accusé accepte de reconnaître à l'audience les faits qui lui sont reprochés. Si tel devait etre le cas, des renseignements complémentaires sur les faits étant donnés par le procureur, le juge décide

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alors s’il peut accepter ou non l’aveu de l’accusé. Dans l'affirmative, il considère alors, tout de suite ou après une remise de séance, de la peine à infliger. Dès lors qu'un aveu a été valablement accepté, il n'y a plus lieu d'avoir recours aux services du jury ainsi qu'à l'audition des témoins à charge. Il reste toujours cependant loisible à l'accusé de faire entendre ses propres témoins, pour tenter de minorer le quantum de la peine qui sera prononcée. A ceci s'ajoute la possibilité pour le juge de se référer à toutes expertises psychiatriques et psychologiques qu'il jugera utiles.

§ 5-La Publicité et les Procès devant les juridictions pénales.

Le principe de la liberté de la presse est un des fondements les plus importants dans une démocratie. On en déduit qu'un accusé a le droit d’être exclusivement jugé par une cour, comprenant le cas échéant un jury. Sur ce fondement, les juridictions australiennes interdisent la publication, par voies de presse qu'elle soit écrite, radiophonique, ou encore audiovisuelle, de tout qui pourrait etre de nature à influencer une juridiction, et surtout un jury. La transgression de cette interdiction constitue un outrage à magistrat passible de peine d'amende ou de prison. La presse peut cependant toujours se faire l'écho des procès et les instructions sous réserve que les informations publiées soient exactes. En Australie, il y a une nette tendance pour la police de faire de la publicité relative aux arrestations et leurs enquêtes en cours, et il n'est pas rare que des conférences de presse soient aussi organisées. Il y a là un dérapage contestable qui peut en certaines circonstances peut réellement s'analyser en un outrage à magistrats.

Overview of the Australian law of criminal procedure

The Australian Federal Constitution of 1900 distributes legislative powers between the Federal Parliament of the Commonwealth of Australia (sitting in Canberra) and the parliaments of the six states of Australia. Criminal law, except in respect of those matters which are within its federal jurisdiction, is outside the legislative domain of the Federal Parliament, and therefore only the states can legislate in this area. The criminal law of three states of Australia (New South Wales, Victoria, and South Australia) appears as a mixture of legislation and the common law. Three other states (Queensland, Western Australia, and Tasmania) have criminal codes which date from the beginning of the 20th century.

In Australia, criminal process depends on the form of trial: with jury or without jury. Schematically, trial with jury is reserved for those offences which could be described as serious (eg assassinations, murders, rapes, assaults with grievous bodily harm, and robbery).

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There are three main steps to be considered in the conduct of a criminal trial: first, there is the investigation which is under the almost exclusive control of the police; the courts have a control which is a posteriori; then there is the trial; and the third step is sentencing.

Australian judges are recruited from among the most experienced barristers, and appointed by the government. They receive no specific training for their judicial functions. The judge presides over the criminal trial. All decisions of law are decided by the judge, and in particular what matters of evidence may be put before the jury. The judge sums up for the jury the main points of the evidence given at the trial and advises the jury about all that they have to decide. If the jury after deliberation returns a verdict of guilty, the judge alone will decide on the punishment.

The jury is of twelve persons and decides all matters of fact and, ultimately, the culpability or otherwise of the accused. Whatever the decision of the jury, it must be unanimous. If the jury is not agreed a new trial will normally take place.

Prosecutors are appointed by the government (ie by the Attorney-General) from among practising barristers. They represent the Crown, that is to say the state, in criminal trials and they have the burden of proof of the guilt of accused.

The defence lawyer is chosen freely by the accused or appointed by the court by way of legal aid.

The rules of evidence are an important part of Australian criminal law. For the most part, these rules are concerned with the exclusion of certain types of evidence. The judge however always has a discretion to refuse to admit any evidence which he or she believes is inappropriate to the proper conduct of the trial.

Appeal is available both to the accused and to the prosecutor, that is to say, the Crown. Appeals are heard by a criminal division of a Court of Appeal.

Publicity in respect of the criminal trials presents a problem that is difficult to resolve. In principle, the Australian courts prohibit the publication by the media, whether in written, radio or audio-visual form of any matter which could influence a court or a jury. A breach of this prohibition amounts to a contempt of court which is punishable by fine or a term of imprisonment.

1

THE SIGNIFICANCE OF THE SOUTH PACIFIC FOR COMPARATIVE STUDIES IN LABOUR LAW Prof BT Brooks

In this paper Prof Brooks traces the introduction of labour law into the South Pacific island states and its development there. He considers the richness of the subject for interdisciplinary and comparative, and indicates labour law as fertile ground for a study of the tensions in the Pacific states between tradition and modernisation.

There is very little published information about South Pacific labour law and industrial relations. A search of the Index to a leading text on law, government and politics in the region failed to disclose any mention of employment law or industrial law or labour law or wages or trade unions or collective bargaining, or employment contracts.1 A search in similar, earlier books reveals the same lack of attention to labour law in the region. This is a matter for regret. The experience of the independent island nations of the South Pacific as they move into a monetarised economy offers useful insights into the forces which shape the evolution of labour law and industrial relations. It also provides an opportunity to study the effect of exporting European laws and institutions and allows us to compare and contrast the process across a range of developing countries where the legacy of colonial administration varies and where the problem is to balance the importance of tradition and custom with the pressures of modern development. This means that one of the most interesting areas of comparative study is the impact of the jurisprudence of the nineteenth century colonial powers upon the customs and practices of the South Pacific. An example is the notion of an employer. This is a concept quite alien to the traditional, subsistence economy of the villages of the South Pacific, as is the concept of being paid money as a reward for work. A study of the introduction of these concepts should attract not only lawyers but also sociologists and anthropologists and illustrates the point that modern comparative scholarship is best conducted in teams. The arrival of capitalism in less-developed nations, and its growth within those countries, is a complex phenomenon 1 Yash h Gai (ed) Law Politics and Government in the Pacific Island States (University of the South Pacific, 1988).

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which demands research from scholars across a range of disciplines to provide an empirical framework which will allow insights into what shapes labour law in less-developed countries. These issues confront independent nations in Asia, Latin America, the Caribbean and Africa as well as the South Pacific.

One traditional model for the post-independence governments of the South Pacific was that of the laissez-faire practices adjudged appropriate in Great Britain in the nineteenth century and exported in the period of colonisation. But the problem facing the newly independent island nations in the second half of the twentieth century was how to create a system which raised living standards and at the same time ensured industrial peace and the protection of indigenous workers. In the result the British voluntarist approach to settling industrial disputes through unregulated collective bargaining was not seen as appropriate for the South Pacific. Today the most common pattern of industrial regulation is one based on legislative intervention backed-up by an inspectorate, a labour tribunal and compulsory conciliation and arbitration. At the same time this policy has to accommodate cultural values concerning settling disputes. The tradition of village-based settlement of all disputes had, naturally, no backing in legislation. Nor did customary and unwritten law. An example is found in custom as a source of legal obligations. Custom is an obvious source of work obligations in the South Pacific and custom requires a certain amount of work being performed compulsorily for the village or the chief. At the same time, forced and indentured labour was a common feature of early western colonial rule in the South Pacific, especially in respect to plantation work. Immediately upon independence each of the island nations of the South Pacific legislated to prohibit any work arrangement which was not entered into voluntarily. An example is found in the Constitution of Western Samoa. While Article 8 prohibits forced or compulsory labour, those terms are not to be construed so as to include "any work or service which is required by Samoan custom or which forms part of normal civil obligation". This Article reveals the tension between removing the exploitation of colonial times while at the same time preserving custom and tradition.

Generalisations are dangerous but certain basic conditions are widely encountered in developing countries, such as the predominance of the agricultural sector, the small proportion of the labour force in the modern industrial sector, the concentration of urban wage earners in service occupations, the prevalence of under-employment co-existing with serious shortages of technical, white-collar and managerial skills, the role of the state as the major employer and the major regulator of the economy, the need to remove the exploitation of the colonial era, the tension between economic development and the protection of indigenous workers, the fragility of trade unions, the absence of workforce planning, the drift to the towns and away from the villages with associated unemployment and pressure on the social and physical infrastructure of the towns. Furthermore, the

THE SIGNIFICANCE OF THE SOUTH PACIFIC FOR COMPARATIVE STUDIES IN LABOUR LAW 3

government in each of the island nations of the South Pacific is the largest employer and in most countries the conditions of employment of public servants are generally the most attractive. These conditions were established partly for the benefit of expatriate personnel of the colonial era and have to be revised to suit the needs of independence.

In the South Pacific different island nations are industrialising at different speeds. But common to all are two questions. The first is whether "development" means the sacrifice of traditional culture. The second is whether capitalist and non-capitalist economic activity can co-exist in less industrially developed countries. Many studies in the past explored the influence of industrialism on traditional culture and forms and two views emerged.2 One view saw the introduction of capitalism into the so-called "less developed’" countries as an affirmative good for workers . On the other hand some commentators saw the advent of capitalism in traditional societies as part of a process of impoverishment rather than one of enrichment for the countries concerned. The truth is somewhere in the middle and there is evidence that traditional, non-capitalist and capitalist economic activity can co-exist and inter-relate in less-developed countries. This co-existence is best demonstrated through labour and industrial law.

For the slowly industrialising island nations of the South Pacific there is a constant dilemma: how to achieve economic development while at the same time protecting the indigenous people from exploitation. This dilemma becomes especially acute when the Pacific governments turn their attention to legislating for trade unions. The trade union, which was once confined to "western" industrialised countries, has been exported. This process of exporting provides an opportunity to study the evolution of trade unionism in a range of developing countries. It also provides an opportunity to compare and contrast the process keeping in mind the obvious problem of deciding which countries to compare and contrast. There are reasons to believe that the experience of tropical Africa is at least as relevant to the development of trade unionism in the South Pacific as is the experience of the developed industrial nations.3

In 1964 the OECD organised a seminar on the role of trade unionism in independent developing countries. The developing countries at that time were seen as comprising much of Africa, parts of South America, most of the Caribbean, India and Turkey. There was no reference to Asia or the Pacific except for one paper on Malaya. But, looking back over 30 years, it is striking how much of what was written then is an accurate description of issues in industrial relations and industrial law in the South Pacific in the last years of the twentieth century. An example is found in the paper prepared by Aahron Becker, at 2 Kerr, Dunlop, Harrison and Myers Industrialism and Industrial Man (London Heinemann 1962).

3 R M Martin "Tribesman into Trade Unionists: the African Experience and the Papua New Guinea Prospect" (1969) The Journal of Industrial Relations 125.

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that time Secretary-General, Histadrut (the General Federation of Labour in Israel). That paper is published in the proceedings of the seminar and edited by Solomon Barkin, Head, OECD Social Affairs Division and the relevant passage is found at pages 21-22 in the following words: "If we scratch the surface of trade-unionism in most of the new and less-developed countries, we find a situation which hardly corresponds at all to usual notions of a proper or normal labour movement as understood in the industrially advanced countries. The outer shell may appear to be a fairly accurate copy of these older models, but underneath the special conditions attached to a nation in the course of development have given the unions quite another quality and tone and imposed on them an altogether different scale of priorities."

All societies face the problem of where to locate trade unions in the social, political, legal and economic framework and what status to accord them. The answer to these questions in the various island nations of the South Pacific is explicable in terms of the historical background. Two examples are the Cook Islands and the Republic of Vanuatu.

There is an historical link between the Cook Islands and New Zealand. New Zealand departed markedly from the voluntary, non-interventionist tradition of labour law as inherited from England and developed its own system of compulsory conciliation and arbitration of industrial disputes based on a philosophy of massive State intervention into the employer and employee relationship.4 As part of this system trade unions are accorded the status of trading corporations It is the historic example of compulsory conciliation and arbitration, first adopted in New Zealand in 1894, and followed in Australia in 1904, that explains the industrial laws of the Cook Islands. On the other hand the labour laws of the Republic of Vanuatu reflect that country's history as a colony jointly administered by England and France until the early 1980s. Thus the source of labour and industrial law for Vanuatu is a mixture of English common law and statute and the Continental Code and a study of the adaptation of this background to the needs of an industrialising Pacific Island nation offers much to interest the comparativist.

The most extreme illustration of the tensions involved in adapting European labour law and institutions under the pressures of a different environment is found in the recent history of the Republic of Fiji.5 The first action of the leaders of the 1987 coup was to close down the trade union headquarters and in 1990 the Fiji Times carried a report of an address in which the coup leader (and now the Prime Minister) Major-General Sitiveni Rabuka, "called for curbs on trade unions". The General was reported to have said in the 4 In the course of the past 15 years New Zealand has abolished the traditional system of compulsory arbitration.

Under the present Employment Contracts Act 1991 all employment is regulated by voluntary contracts. It is unlikely that the Cook Islands will adopt this approach.

5 For a review of the coups see C McGregor "The Pacific in 1987" (1988) 1 The Pacific Review 196.

THE SIGNIFICANCE OF THE SOUTH PACIFIC FOR COMPARATIVE STUDIES IN LABOUR LAW 5

same speech that "our individual freedom, aspirations and dreams will have to be curbed in the interests of the nation". This experience confirms the observation of Galeson, writing in 1964, that "[T]rade unionism is not a very hardy flower, it is particularly susceptible to the winds of politics and to economic adversity. It is small wonder that nations which are unstable politically and struggling desperately to develop their economic resources do not exhibit powerful, well-functioning labour movements. The line of least resistance, the one followed in all too many cases, is to deprive the unions of independence of action, if indeed they are permitted to exist at all."6

A leading scholar on industrial relations in less developed countries has made the point that while it is true that industrial relations mechanisms in many newly independent nations was determined by their particular colonial histories, and that even post-independence the model adopted was that of particular industrialised nations, the more recent tendency has been for governments to move away from industrial relations practices based on democratic, developed economics towards other systems7. The argument for this tendency is that less-developed countries cannot afford the luxury of independent trade unions and collective bargaining. Thus what is emerging is industrial relations structures which are less democratic, which deprive trade unions of autonomous action, and which subordinate both management and labour to increasing degrees of government control. As Hesse observes: "once on this slippery path, the temptation has been strong for governments to seek solutions to particular industrial problems by further strengthening their regulatory mechanisms".8

There is much evidence in the experience of South Pacific nations to support this conclusion but it needs to be emphasised that trade unions are legally permitted to exist in most of the South Pacific and much of the legislation regulating trade unions is familiar to students of trade unions in the English tradition. At the same time it is important to understand that trade unions in the South Pacific do not enjoy unfettered freedom and there are numerous legal controls upon trade unions both at the point of registration and once registered. In Pacific countries government influence is unlikely to be thrown on the side of trade unions. Over thirty years ago an observer of industrial relations in developing countries remarked: "Wage determination is too closely geared to growth potentialities to be left to bilateral settlement. Labour market negotiations will be closely supervised and agreements scrutinised for their impact on the economy. Even in the United States, we are beginning to realise that bilateral bargaining on a sectional basis may 6 W Galinson Labour in Developing Countries, (University of California Press, 1962) 2.

7 M Hesse "How the Foreign Devils Got It Wrong: Understanding Industrial Relations in Less-Developed Countries" (1986) 28 Journal of Industrial Relations 225.

8 Above n 7, 230.

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endanger national objectives. The amount of slack in an underdeveloped country is much less, and tolerance accordingly quite narrow".9 "These observations appear to be confirmed by the experience of the island nations of the South Pacific. At the same time research is required into the proposition that trade unions in the Pacific accept the government's role in determining wage levels in exchange for legislation which ensures that employers must recognise trade unions and for protection in the form of minimum wage legislation, workplace health and safety legislation and protection from exploitation. Research also needs to be done into the response of employers to the interventionist role of governments in the South Pacific, in particular in terms of controlling the outcome of wage bargaining.

The issues of freedom and state regulation, of the right to associate and to strike, are of universal interest and the South Pacific provides rich material for comparative studies. There are two main reasons for this. First, because it is the state which confers and protects the right to associate, often in the form of provisions in the Constitution. Second, because in developing economies the consequences of strikes, lockouts and industrial disputes generally are considerable and include complete cessation of production and the danger of social and political disturbance. For this reason it can be argued that not only is government intervention justified but that collective bargaining should not be allowed. The contrary case has been argued by Roberts and Greyfrie drawing on studies in Africa.10 The problem is that, in practice, the governments in developing economies in the South Pacific impose conditions for the enjoyment of the right to associate (and to strike) which are so stringent as to nullify these "rights" completely. In this, as in many areas, the South Pacific provides many examples of the difference between "law in books" and "law in practice" and pose the question whether freedom of association and the rights which accompany it can only be sustained under specific social and political conditions. It also raises the related question of whether a future response to social, economic and political crises in the South Pacific will take the form of industrial action and here, also, students of comparative labour and industrial law have a fertile field to plough.11

The island nations of the South Pacific raise general questions about "models" of industrial relations systems and provide material for comparative studies on the basis of traditional criteria such as trade union freedom and the right to strike. It is only natural that developing countries will give careful attention to the earlier experience of other 9 W Galenson Labour in Developing Economics (University of California Press, 1962) 6.

10 Quoted in Ross Industrial Relations and Economic Development (Macmillan, London, 1966) in the Introduction xxviii.

11 The Fijian oil-workers strike in 1959 can be seen as an early illustration of industrial action around which coalesced a number of social, political and racial issues. See (1984) 11 Journal of Pacific Studies 204.

THE SIGNIFICANCE OF THE SOUTH PACIFIC FOR COMPARATIVE STUDIES IN LABOUR LAW 7

nations. The question for comparativists is whether the labour and industrial law which accompanied economic development in the older countries of the West are adequate for the situation of emerging Pacific Island nation states or the developing countries of Asia and Africa? A study of these developing countries provides an understanding of the importance of social, economic and political freedoms in countries which are in a hurry to emulate Western industrial development.

The experience of the island nations of the South Pacific is also valuable as a source of comparative study of the role of wage determination and of the place of collective bargaining. A viable system of collective bargaining takes many years to develop, as the history of any western country demonstrates, and the minimal requirements are equality of bargaining power, access to relevant information, and a neutral government. These ingredients are rarely found in the South Pacific. The absence of organised labour unions, especially in the agricultural sector, questions whether collective bargaining is a reality or only a facade and raises many important research questions including those relating to wage policy, economic development, wage arbitration criteria, workforce planning and the advantages and disadvantages of legislated, uniform minimum wages.

The unique character of the developing world's industrial relations systems has been emphasised by various writers in the past and different explanations have been put forward. The explanations can be broadly divided into two main groups.12 First, there is the popular cultural-based explanation. According to this explanation, such conditions as culture, tradition and custom are said to be primary influences on the industrial relations system. Moreover, it is often argued that these phenomena not only lead to a different industrial relations system from that of the industrialised west, but also differentiate the industrial relations system of one emerging country or region from another.

The second widely held reason for the difference between the industrial relations system of an emerging economy and that of the developed countries is based on the role of the state in the industrial relations system. It is claimed that whereas the industrial relations system in the developed countries of the west mainly evolved in a laissez-faire environment, where the state has played a relatively minor role, in most of the newly industrialising countries this is not the case. Most South Pacific countries have identified industrialisation as the most important step in their economic development after independence from colonial rule. The state in most cases has been entrusted with carrying out a massive industrialisation program to improve the economy. The state’s intervention in the industrialisation process has inevitably led to its involvement in the industrial relations system in most South Pacific countries. 12 SA Siddique "Industrial Relations in a Third World Setting: A Possible Model" (1989) Journal of Industrial

Relations especially 385-386.

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As Ross observed, thirty years ago, "in understanding the role of government in these countries, several facts must be kept in mind. Where independence has been acquired only recently the labour movement generally played an important part in the anti-colonial movement. Many government officials and national leaders are former trade union officials. Even in countries which have long been independent, the trade union movement is frequently an important source of political support for the government - a vital consideration in unstable countries. On the other hand, the stronger the unions become, the more insistently do they demand the higher wages and improved living standards which they are pledged to obtain. These demands confront the government with a set of dilemmas which have become familiar to students of economic development. Workers desire more consumer goods but savings are necessary for capital expansion. Unions press for wage increases but the government seeks to avoid inflation in order to conserve foreign exchange. A greater measure of economic equality has been promised, but this is not necessarily conducive to the highest rate of capital formation. Workers pour into the cities seeking employment, but job opportunities are limited if the most efficient productive methods are used.

The traditional concept of collective bargaining implies that the national wage structure will emerge from a multitude of uncoordinated bargaining decisions. In the developing nations of the South Pacific, however, the government’s economic plans may call for another kind of wage structure. Likewise, the right to resort to economic strength is an important element in traditional collective bargaining theory, but most governments in the South Pacific believe that work stoppages cannot be tolerated because of the adverse effect on foreign investment, the danger to social cohesion and the interference with development plans".13

The most obvious "development plan" in each of the independent island nations of the South Pacific is found in the Constitution and the process of building a Constitution once independence was gained has much to interest students of comparative constitutional law. These Constitutions are an important source of rights and obligations generally as well as for labour law and industrial relations in particular. An example is found in those Articles which enshrine fundamental human rights and freedoms. In the Constitution of the Independent State of Western Samoa the fundamental rights relevant to industrial relations and labour law include: freedom from forced labour (Article 8); the right of peaceful assembly and association (Article 13(1)(c)); freedom from discriminatory legislation (Article 15). A list of fundamental rights is also found in the Constitution of the Republic of Vanuatu. Those rights provide for forms of affirmative action by excluding from the principle of equal treatment before the law any provision which is made for "the 13 Ross above n 10.

THE SIGNIFICANCE OF THE SOUTH PACIFIC FOR COMPARATIVE STUDIES IN LABOUR LAW 9

special benefit, welfare, protection or advancement of females, children and young persons, members of under-privileged groups or inhabitants of less developed areas." (Article 15(3)(b)).

Each of the South Pacific island nations has enacted legislation specifically directed at employment conditions. A typical example is the Industrial and Labour Ordinance of the Cook Islands. This Ordinance has nine Parts and covers: general administrative management; industrial unions; industrial agreements; settlement of industrial disputes; workers entitlement; health, welfare and safety; employment of women and children; accommodation for workers; offences and penalties. In addition the Cook Islands has enacted legislation covering compensation for work-related injuries; discrimination in employment; prohibitions on forced or compulsory labour; restrictions on the recruitment of persons for employment outside the Cook Islands; apprenticeship. The model is clearly that of the Anglo-Saxon legislative tradition of England, Australia and New Zealand. In addition, the traditional English common law regulating the creation of, the rights and obligations in, and the termination of an employment contract is widely applied in the South Pacific but it must be recognised that the European concept of employer and employee will be relevant only to that small proportion of the labour force which is urban and largely concentrated in the service sector and that it's application will require qualification and modification.14

Conclusion

The South Pacific Island states provide a model for post-colonial development which may be compared and contrasted with similar developments in East Africa, South East Asia, Latin America and the Caribbean. The South Pacific nations provide many illustrations of the tensions between a policy of "modernisation" and the desire to maintain traditional economic, social, cultural and political structures. Reconciling traditional cultural values with economic development is a challenge which faces all South Pacific nations. The many tensions involved in the process of critically evaluating laws inherited from a colonial past and incorporating these with traditional law into a post-independent legal system symbolised by a Constitution is a process of interest to students of law, sociology, politics and anthropology. The clearest illustration of the tensions, and of the difficulties in balancing these tensions, is found in a study of labour law. What the study of labour law in the South Pacific teaches is that law does not exist in a vacuum, that no one model of labour law and industrial relations will work in all countries, that no one system is necessarily superior or good, that the purpose of industrial regulation is to protect against exploitation and that the search for industrial justice is never ending.

14 See the remarks of Denning LJ in Nyati Ltd v Attorney-General [1956] 1 QB 1, 16.

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Étude de droit comparé en droit du travail à la lumière de l'expérience des pays du Pacifique

Les expériences diverses qu'ont connu les états insulaires de la région pacifique, alors qu'ils entraient de plein pied dans l'économie de marché, offrent de précieux instruments d'analyse pour la compréhension des conditions dans lesquels le droit du travail s'est progressivement formé. Il offre également une opportunité pour l'étude des effets induits par l'importation des normes légales et des institutions européennes. Les conséquences qui en découlent, varient d'un état à l'autre, corrélativement à l'étendue du processus de colonisation que chacun d'entre eux a pu connaître et de l'équilibre qu'il ont su instaurer entre la coutume et les contraintes inhérentes aux développement économique. Dès lors, un des domaine de prédilection du droit comparé est tout naturellement l'étude des conséquences de l'introduction des décisions judiciaires du pouvoir colonial au 19ième siècle, sur les traditions et les coutumes des pays insulaires du pacifique sud. A titre d'exemples, on ne citera que la notion d'employeur, et celle du versement d'une somme d'argent en contrepartie d'un travail, deux concepts totalement étrangers aux systèmes traditionnels basés sur une économie de subsistance.

L'étude de l'introduction de ces concepts intéresse tout autant les juristes que les sociologues et les anthropologues, et si besoin est, rappelle que les études comparatives sont par définition interdisciplinaires. l'introduction du capitalisme tout comme son évolution dans les pays en voie de développement, demeure un phénomène complexe et son appréhension passe aussi par l'étude du droit du travail.

Pareille problématique concerne aussi bien les pays d'Asie, d'Amérique Latine, des Caraïbes, d'Afrique, que les pays de la zone Pacifique. Ces derniers offrent la particularité de fournir un exemple de développement post-colonial qui pourra etre comparé à ce qu'on connu d'autres pays dans une situation semblable. Seront ainsi mis en exergue, les tensions entre la politique dite de "modernisation" et le désir de maintenir des structures coutumières et traditionnelles. Tenter de concilier ces deux objectifs, souvent contradictoires est un des défis que doivent relever les pays insulaires de la zone Pacifique. L'introduction souvent forcée de règles héritées d'un passé colonial dans un contexte où la coutume est toujours fortement présente ne peut qu'induire des difficultés, le droit du travail en étant une parfaite illustration. L'étude de ce domaine du droit dans ce contexte particulier, permet de conclure, qu'en fait aucune tradition légale ne peut à elle seule offrir des solutions définitives qui lui assurerait une supériorité sur l'autre système. Le constat est en ce domaine plus nuancé, le compremis devant prévaloir.

1

DECOLONISATION PROCESSES IN THE SOUTH PACIFIC ISLANDS: A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS Paul de Deckker*

The South Pacific islands came late, by comparison with Asia and Africa, to undertake the decolonising process. France was the first colonial power in the region to start off this process in accordance with the decision taken in Paris to pave the way to independence for African colonies. The Loi-cadre Defferre in 1957, voted in Parliament, was applied to French Polynesia and New Caledonia as it was to French Africa. Territorial governments were elected in both these Pacific colonies in 1957. They were abolished in 1963 after the return to power of General de Gaulle who decided to use Moruroa for French atomic testing. The status quo ante was then to prevail in New Caledonia and French Polynesia up to today amidst statutory crises. The political evolution of the French Pacific, including Wallis and Futuna, is analysed in this paper.

Great Britain, New Zealand and Australia were to conform with the 1960 United Nations' recommendations to either decolonise, integrate or provide to Pacific colonies self-government in free association with the metropolitan power. Great Britain granted constitutional independence to all of its colonies in the Pacific except Pitcairn. The Facts underlying this drastic move are analysed in the British context of the 1970's, culminating in the difficult independence of Vanuatu in July 1980. New Zealand and Australia followed the UN recommendations and granted independence or self-government to their colonial territories. In the meantime they reinforced their potential to dominate the South Pacific in the difficult geopolitical context of the 1980's. American Micronesia undertook statutory evolution within a strategic framework.

What is at stake today within the Pacific Islands is no longer of a political nature; it is financial.

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Introduction

The Second World War had a huge impact on the South Pacific Islands : not only were tens of thousands of Japanese and Allied troops stationed there for several years, transforming the mentalities of traditional people who came into forced contact with them, but the war's aftermath also led to the overall conclusion that colonised people should be freed from the relationship of domination that was prevalent in so many countries under colonial regimes, whether in Asia, Africa or the South Pacific.

The United Nations played a major role in defining decolonising processes. First of all, in 1945 the San Francisco Charter set up an international system of trusteeship which amounted to a provisional system of territorial government for colonies whose people were not yet considered as being able to fully govern themselves. Only the territories which were placed under a mandate of the League of Nations at the end of First World War could benefit from the new system. All of them became constitutionally independent between 1957 and 1968, except Papua New Guinea and the former Japanese Pacific territories, which were taken over by the Americans in 1945.1

Concerning the other colonies, the San Francisco Charter established some general principles, including the primacy of the inhabitants' interests and the development of their capacity to administer themselves. The Charter did not prescribe any time frame for them to achieve constitutional independence. In the meantime the principle which was to govern future relationships between states was consolidated: the right of people to self-determination.

The anti-colonialism majority which existed within the United Nations since its inception used this principle to submit non self-governing territories to international control and to intervene in time of conflict between colonial powers and independence movements. This pressure was reinforced in 1960 with the adoption of the Resolution on the Right to Independence for colonial countries and territories.2 A Committee to organize the * Professeur, Université Française du Pacifique & Université Libre de Bruxelles.

1 Rwanda-Burundi, Sudan, Togo, Cameroon, Swaziland, Tanganyika, Western Samoa and Nauru. Papua New Guinea was to become independent in 1975. The accession to independence of American Micronesia, the Trust Territory of the Pacific Islands (divided into six, later seven districts : Belau, Yap, the Northern Marianas, Palau, Truk, Pohnpei, Kosrae and the Marshall Islands) will be analysed below.

2 United Nations Resolution 1514 of 1960 which declared that lack of social and economic preparedness could not be considered as a barrier to self-determination.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 3

implementation of this Declaration was formed, mainly by countries which had just gained independence and which were resolutely hostile to any form of colonialism.

It should be stated at this stage that the United Nations Organisation, in contrast with the other Organizations which stem from it or which existed before the Second World War and were reactivated in 1945, is quite a complex structure. The Organisation's governing body is usually the General Assembly or the Conference as it is with UNESCO.3 Only the UN works through two separate sovereign arms : the General Assembly and the Security Council. The General Assembly is formed by all member countries and they all have equal status within the organization ; the General Assembly has full responsibility over all fields and matters which it deals with. The Security Council, on the other hand, is formed by fifteen members of which five are permament.4 The ten others are elected for two years by the General Assembly. The Security Council deals with peace and international security ; it acts on behalf of all members of the UN and, as such, takes institutional precedence over the General Assembly in these two fields.

Paving the way towards independence : France

Five years before Western Samoa became constitutionally independent in 1962, Paris had decided to pave the way to independence for New Caledonia and French Polynesia by enacting a law providing for self-government : the loi-cadre of 23 June 19575. Each of the two territories elected its 'governing council' and its own territorial assembly, while a governor appointed by Paris, continued to represent the French State in each territory. The loi-cadre of 1957 took into account events in Indochina, Morocco and Tunisia. It allowed for the first statute of self-government in French colonies, then officially named overseas territories, with real autonomous decision-making powers. Executive councils of government, with ministerial portfolios, were instituted. Implemented by the last governments of the Fourth Republic, this law was a cornerstone for the decolonisation of overseas territories, that would be implemented under the Fifth Republic.

Indeed, when Charles de Gaulle returned to power in 1958, he gave an address in Brazzaville in which he explained the underlying principles of the 'French Commonwealth' he 3 WHO, ILO, IMF, etc.

4 The permanent members are the US, Russia, China, Great Britain and France.

5 This 1957 loi-cadre applied to all French colonies, especially the African countries for which it was decided to grant independence shortly (Senegal, Ivory Coast, Gabon, Congo, etc.).

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wanted to create : the Communauté française : through the formation of a vast political, economic and defensive network, including all French overseas territories wishing to participate, the Communauté would provide full self-government and free self-determination through referenda, which would soon be organised. De Gaulle defined new institutional structures that would link France with its former colonies and, above all, would clearly delineate the question of independence. Overseas territories, if their populations wished, could immediately obtain independence by voting 'No' in the constitutional referendum. Moreover, having voted positively, members of the Communauté, could later negotiate their respective independent constitutions with Paris.6

De Gaulle wanted France to have a high profile on the world scene as well as in the Security Council where only nuclear powers really have any weight. With the war in Algeria, it was not possible for the French army to pursue atomic testing in the Sahara desert. French Polynesia was chosen in the early 1960s as being the most favourable zone in which to conduct further testing. In 1963, the French Polynesian Council of Government was abolished, since Charles de Gaulle wanted to prevent any potential movement for autonomy from developing. Because of the pro-Vichy attitude of the Société Le Nickel during World War Two, and its strategic importance for France, in 1963 Charles de Gaulle decided that New Caledonia would get the same constitutional treatment as French Polynesia. Of course, the domino theory was also to be taken into account in this imposition of a status quo ante for the French overseas territories in the Pacific.7

France was to become perceived, from then on, as a reactionary power within the Pacific region. But, as Charles de Gaulle put it : "France has no friends, no enemies, just interests".

Australasia : decolonisation

For New Zealand, like Australia, the end of World War II implied a need to forge new policies as far as their mandated territories or colonies were concerned. During the first part of the 20th century, these two countries had tentatively assumed a position on the world scene as new colonial powers, in an attempt probably to gain some of the imperial grandeur of their 6 See on this topic, Paul de Deckker, "France", in K Howe, R Kiste & B Lal (eds) Tides of History, The Pacific Islands in the

Twentieth Century (Allen & Unwin, Sydney, 1994) 258-279.

7 Wallis and Futuna was a French protectorate up to 1961. It became a French Overseas Territory that year after the organization of a referendum for which the population voted heavily in favour of remaining French.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 5

'mother country'. But they lacked experience in colonial management8 and had no real military and diplomatic strength. The international scene was changing very rapidly in 1945 and both these countries from the Antipodes, isolated at the periphery from the centres of political and economic power, then began to think in terms of regionalism. Both of them were at the origin of the South Pacific Commission - the first body to foster regional development - which was set up in 1947 in Canberra. This political and diplomatic approach was to combine a dual strategy : to keep on playing a major new role within the region and, as such, to secure recognition on the world stage.

New Zealand and Australia were instrumental at the United Nations in pushing forward a commitment to the principle of self-determination for colonised people. This principle subsequently underlay the trusteeship's notions which became predominant with the necessity to conduct non-self-governing territories to either self-governing status or independence.

Under New Zealand control, Western Samoa was to lead this movement in achieving constitutional independence in 1962 according to United Nations Resolution 1514 of 1960 and after an expression of universal suffrage under UN observation explicitly confirmed the Samoan people's wish as well as the implementation of a traditional constitution.9

In 1965, the Cook Islands, and later on, Niue in 1974, achieved a status of self-government in free association with New Zealand, although the latter apparently would have preferred the former to become independent.10 The traditional leaders of both the Cook Islands and Niue considered that constitutional independence was not realistic and too drastic a solution to their problems (financial subsidies and access for their meagre export products exclusively to the New Zealand market). As more than 20% of all Cook Islanders and more than 50% of Niueans were already living more or less permanently in New Zealand, they wanted to lose neither their access to New Zealand not their citizenship. Only Tokelau refused the four options which New Zealand suggested ; the faipule of the three tiny atolls wanted to remain a colony of New 8 This is particularly the case with New Zealand in Western Samoa as the Mau Movement showed from 1929. See,

amongst others, Michael King, Mau, Samoa'as Struggle against New Zealand Oppression (Wellington, Reed, 1984) and Malama Meleisa, The Making of Modern Samoa : Traditional Authority and Colonial Admministration in the History of Western Samoa (Institute of Pacific Studies, University of the South Pacific, Suva, 1987).

9 Only matai title holders (traditional chiefs) were able to vote from then on. It is recently that the Western Samoan Constitution changed to allow generalized franchisement or universal suffrage.

10 New Zealand offered four options to its dependencies in accordance with UN Resolution 1514 of 1960 : independence, integration with New Zealand, an independent federation of Polynesian countries (including the Cooks, Niue and Tokelau), self-government in free association with New Zealand.

6 (1996) 26 VUWLR

Zealand against New Zealand's wish and with the full consent of the inhabitants as the United Nations fact-finding mission in 1976 and 1981 recognised. Without proper resources of their own, the 1700 Tokelauans cannot envisage themselves being anything other than a New Zealand dependency. It is thus clear that in order to comply with the United Nations principles of justice and self-determination for colonised people, New Zealand acted correctly but, as stated by Terrence Wesley-Smith : "Political freedom was returned to the colonial peoples in the 1960s and 1970s essentially for the same reason it was removed in an earlier era - to meet the needs of the colonial power".11

This is strongly emphasized in the decolonisation procedure of Nauru, that central Pacific island rich in phosphate deposits which has been exploited jointly by Australia, New Zealand and Great Britain since the First World War when Australian troops took over this 21 km2 island from Germany. Nauruans in the late 1950s challenged this tripartite colonial regime in claiming that the phosphate belonged to Nauruans and not to the colonial rulers. The United Nations' principles did not apply as quickly here as they did with territories without cheap supplies of phosphate needed by Australian, New Zealand and British agriculture. While Australia attempted to displace the Nauruans and resettle them on Curtis Island near the Queensland coast, New Zealand stated that it was not prepared to oppose the UN principles of trusteeship on economic grounds. Nauru became constitutionally independent in 1968 and economically independent two years later after having been obliged to financially acquire all the industrial plant and facilities for phosphate mining.12

The giant island of the South Pacific, Papua New Guinea, was partly an Australian trusteeship of the UN as German New Guinea was taken over by Australian military troops in 1915. A mandated territory of the League of Nations, Papua New Guinea became a United Nations trusteeship after World War Two. Canberra gave a strategic importance to that colony which it did not attempt to develop politically or socio-economically. Education had been kept to a minimum level. It is only when the United Nations pressured Canberra to grant independence to this territory which had enormous economic resources that, in the 1960s, something was done to foster the emergence of a local elite in Papua New Guinea. It was Gough Whitlam, then Leader of the Opposition, who clearly stated in 1970 during a visit in 11 Australia and New Zealand Tides of History, The Pacific Islands in the Twentieth Century above n 6, 221.

12 It took years to Nauru to obtain financial compensation in the early 1990s from Australia over the rehabilitation of the worked-out land. Now that the phosphate extraction industry is near the end, the fields being exhausted, what would happen to this population ? Resettlement somewhere else ?

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 7

Port Moresby that a Labour government would grant independence to Papua New Guinea. But nothing had ever been done by the Australian colonial administration to create a national spirit amongst the 500 or so ethnic groups in Papua New Guinea. When the country became independent in 1975, thanks to the United Nations' efforts and international pressures, secessionist movements emerged in Papua and Bougainville. These two provinces considered that Australian mining operations were to benefit the provinces and were not to be shared on a national level. These feelings are still present today among the provincial populations and the national State of Papua New Guinea is entangled in extreme difficulties to form and keep the nation together, in spite of decentralisation policies which were implemented. Still today, Australia largely controls the economy of Papua New Guinea and contributes substantially to its national budget.

Withdrawing : Great Britain

The imperial centre of Great Britain in the South Pacific was Suva, capital of the colony of Fiji. It is mainly from there that were issued general colonial directives over the five other British colonial outposts.13 London always perceived the Pacific colonies, except Fiji, as small territories without real economic interest. Their taking over during the 19th century mainly stemmed from colonial rivalry with other metropolitan powers like France or Germany.

In the 1960s Fiji considered that it was time for constitutional changes. The British colonial rulers had imported a labour force from India between 1879 and 1916 to develop the sugar cane industry. By the 1950s Indians outnumbered Fijians with the other races representing less than 10 %. London was prepared to grant independence to Fiji but on the basis of the equality of races. Ten years of constitutional preparation were necessary to accomplish this procedure and Fiji became constitutionally independent in October 1970.14

The kingdom of Tonga also became again constitutionally independent in 1970 without any difficulties as Tonga had never been formally a British colony. By the mid-1850s the Methodist 13 The Gilbert and Ellice Islands Colony, Pitcairn, the Kingdom of Tonga, the British Solomon Islands Protectorate and

the British-French Condominium of the New Hebrides.

14 The 1987 coup showed clearly that the equality of races was the predominant question and that the 1970 Constitution was only going to be valid as long as Ratu Sir Kamisese Mara remained Prime Minister. Sociologically speaking, Fiji is economically divided into three distinct elements : the Fijian landholders who lease part of their land to the Indian workforce, the Indians get their income from their labour while the government owns the industrial means to transform the cane into sugar and the capacity to export it to the European mrket and Australasia. The Fijians are thus the landlords, the Indians are workers and the Government the capitalist which makes the system workable.

8 (1996) 26 VUWLR

Church had protected Tongan rights over land in not allowing foreigners freehold in the kingdom they had helped to create. Only a Treaty of Mutual Friendship existed between Great Britain and Tonga which was thus more a protectorate of Great Britain than a colony.

After Great Britain joined the European Community, by the mid-1970s, London soon decided to grant constitutional independence to the remaining part of its Pacific Empire : the British economy was not flourishing then and London wanted to withdraw from these archipelagoes whose running cost was no longer considered appropriate, especially when it was perceived that the EEC could implement substantial budgetary assistance through the EEC-ACP Lome Agreement. London had thought in the first instance to commit itself on the model linking the Cooks to New Zealand but this idea waned away when it joined the EEC.

The Solomons became constitutionally independent in 1978. The Gilbert and Ellice Islands,15 the former being Micronesian, the latter Polynesian, were of a more difficult nature because of the ethnic difference between the two entities. The Ellice islands organised 'a separation before self-government' political stance which was accepted by Great Britain. After a referendum favouring secession with the approval of the United Nations, the Ellice Islanders became constitutionally independent in 1978 and their country took the name of Tuvalu.16 Great Britain was to grant independence too to the Gilbert Islands the following year after having solved the difficult problem of the Banaba islanders. The Banabans wanted to secede from the Gilberts and obtain royalties for the phosphates which had been exploited by the British after they were resettled to Rabi Island in Fiji after the Second World War. London did not accept the claim. The Gilbert Islands became the Republic of Kiribati in 1978.

The most complex colonial situation was the Condominium of the New Hebrides : France and Great Britain had jointly ruled from the start of the 20th century this set of Melanesian islands. According to its pro-independence policy towards the Pacific islands in the 1970s, Great Britain was willing to grant independence to the New Hebrides while France was opposed to this move as it could have promoted, if achieved, a similar tendency in other French Pacific Territories of greater strategic interest. Moreover French settlers, especially in Espiritu Santo, were prepared, with the help of some American land speculators, to secede in the late 1970s and found the independent Republic of Vemarana under the authority of a 15 Ellice Islands are peopled by Polynesians (around 7 000 strong in the 1970s) with a total land area of 26 km2 while the

Gilbert Islands are peopled by around 50 000 Micronesians living on a total land area of 690 km2.

16 Tuvalu means 'eight together' for the eight islands forming the archipelago ; Tuvalu is an independent State, acknowledging the Queen of the United Kingdom as Head of State, having thus a status of dominion.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 9

traditional leader, Jimmy Stevens.17 The colonial history of Vanuatu had always been a careful balance of national interest between the two antagonistic colonial powers18; the legacy of this rivalry is the emergence today of two separate local entities, wild apart in their political thinking as well as in their ways of seeking the future for the country. Vanuatu was declared independent in July 1980 amidst an intricacy of divergent and antagonostic interests : the catholic francophones on the one side and the anglican-protestant anglophones on the other one. Fifteen years after independence, Vanuatu has not yet come to terms with its colonial legacy.

Thus Great Britain withdrew from Oceania even though ties are maintained with the British Crown.19 Only tiny Pitcairn remains today a British colony on historical and humanitarian grounds.20 London provided important financial means during the 1970s to all her former colonies but these means started to progressively diminish in the 1980s and do not existent any longer nowadays. The majority of them are starving today for financial subsidies which they are trying to secure from international organizations such as EEC, the World Bank or NGO in order to compensate for former British financial subsidies which are now lacking. These independent countries are economically vulnerable and politically fragile and their social development and progress are in a worse state than before constitutional independence.

US Compact of Free Association

At the turn of the 20th century, the United States acquired Guam, Hawai'i and the eastern part of Samoa. These three territories had a strategic importance (coaling stations, sugar 17 The South Pacific Forum decided to foster and protect the national integrity of Vanuatu after independence and

organized for the sending of military troops from Papua New Guinea to the island of Santo, supervized by Australian officers.

18 When the two national flags were raised they had both to get up on the pole at the same speed as if one getting up quicker would have implied an outrage to the dignity of the other flag's nation... The Condominium set up two education systems, two health care services, etc. It is interesting to notice that the Ni-Vanuatu preferred to get medical treatment with the British eventhough people had to pay for it while the French health care system was money free. In the people's mind if payment was required meant it was better than the free one. Colonial generosity is not always fully understood.

19 The former British Pacific countries which have not a republican constitution have thus a governor general who represents the Queen of Great Britain.

20 Pitcairn's population is around 60 people for a total land area of 5 km2 ; it is on this island that the Bounty mutineers took refuge at the end of the 18th Century. The British governor for Pitcairn is the British High Commissionner in Wellington.

10 (1996) 26 VUWLR

industry for Hawai'i). Hawai'i became the 50th State of the Union in 1959. American Samoa is an unincorporated territory which means that the American Samoans are US nationals without the right to vote in presidential election.21 Guam has the same type of status and is more heavily dependent on the Ministry of Defence for its budget than American Samoa.22 These two territories are seeking with the United States some statutory evolution which could grant them, in a not too distant future, more autonomy.

The majority of the Pacific islands, located north of the Equator, had been mandated to Japan under the League of Nations in 1919. After Pearl Harbor, the US sent huge numbers of troops to free these islands from Japanese military presence. When World War Two ended, some American high officials wanted to annex, as a war tribute, these former Japanese Territories in Micronesia because so many American GIs gave their life to take control of them. But, because of the postwar political atmosphere, Washington could not accept as such the annexation of these strategic territories. USSR's presence would have been critical of these new colonies even though Washington had officially declared that these islands were 'not colonies but outposts' for democracy, indispensable for the future of the free world. The Roosevelt Administration decided to avoid any political embarrassment of this nature and placed these Micronesian islands under the aegis of the UN Security Council as strategic trust territories. As such their statutes could never be scrutinized by the UN General Assembly.23

The Northern Pacific Islands were then under US supervision while, South of the Equator, American Allies had all archipelagoes under control. There was no real risk of Soviet Union interference. This situation began to change with the constitutional independence of the former British, Australian and New Zealand possessions. The Soviet Union tried to gain influence, unsuccessfully in Tonga in 1976, in paying duties to benefit from harbour's facilities in Nuku'alofa, successfully in Vanuatu and Kiribati later on, even though for limited time. The 21 It is usually estimated that more than 80 000 American Samoans live in Hawai'i and California (they can accede to full

American citizenship there) while around 30 000 Samoans live in American Samoa, a majority of them originating from Western Samoa.

22 It is from Guam that bombing planes were sent to Vietnam from the 1960s. Today the tourist industry (mainly linked with Japan : more than half a million Japanese visitors in 1990) comes second to military activities in economic and financial importance. With its population of over 130 000 (the original inhabitants, the Chamorros, counting for less than 40%), Guam is fully urbanised.

23 The United States cannot consider themselves as being a colonial power. It is very seldom that we find an American diplomat or official to admit this fact. It is usually argued that there has never been any colonial Department in Washington as it was the case in Canberra, Paris, London or Wellington. Decolonisation was thus considered to be the business of the colonial powers and there was no need to interfere in internal matters of these allied countries.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 11

United States could not afford not to take this Soviet influence into consideration as well as the recent constitutional independence of some island nations which became member of the United Nations Organisation. Indeed, the populations of the American Trust Territories were attracted by the status of free association which the Cook Islands got with New Zealand and Washington was forced to take into account the Micronesian people's aspirations to manage more their own affairs. Washington did not want such a fragile link with its Micronesian Trust Territories (the cold war situation could not afford it) and offered commonwealth status, which means integration with the United States. American Micronesia was generally perceived as an entity in Washington even though differences in languages, cultures and traditions prevailed among the different archipelagoes. Moreover, Washington attributed higher values to islands of strategic importance (military bases, missile testing, etc.). The Northern Marianas opted for such a status in 1975 and was incorporated into the United States as the Commonwealth of the Northern Mariana Islands in Political Union with the United States. All Mariana Islanders became American citizens when this commonwealth status was implemented and US federal law applied unless being changed by the Commonwealth legislature.

The Marshall Islands and Palau voted against this commonwealth status in 1978 and pressed Washington for an alternative constitution, based on the concept of free association. Free association, it was considered, permitted self-government in all fields of affairs, except in foreign policy matters which could be contrary to US interests as defined by mutual consultations, and in defence matters which are of the sole responsibility of the American federal government. The US were also granted rights to existing military bases for at least 15 years which could be extended by mutual agreement as well as the right to foreclose access to these islands by the military forces of any other country.24 This was generally defined in 1978 and it took four more years to draft the constitution precisely because of the complexity of the issues involved : governmental, economic, security and defense relations, marine sovereignty, etc. The four government districts of Pohnpei, Yap, Truk and Kosrae became the third partner to negotiate the compact of free association with Washington as soon as they became the Federated States of Micronesia after the adoption, in 1979, of the Micronesian federal constitution.

In 1982, each of the three Micronesian government signed with Washington a separate Compact of Free Association which were submitted, the following year, to their people by plebiscites under the supervision of UN Trusteeship Council observers. A majority of voters in 24 This is often called the 'right of strategic denial' or the 'defense veto'.

12 (1996) 26 VUWLR

each of the three territories favoured the Compact and, in 1986, the UN Trusteeship Council approved the American decision to end the trusteeships of the Marshall Islands and the Federated States of Micronesia. In 1990, the UN Security Council dissolved the trust, thus favouring the international recognition of the Republic of the Marshall Islands and the Federated States of Micronesia, thus both independent States in free association with the United States.25

The constitution of Palau26 is in opposition with the strategic provisions of the Compact of Free Association with the United States as it does not allow nuclear powered vessels and nuclear weapons through the archipelago without 'the express approval of three-fourths of the 25 The Republic of the Marshall Islands has a 33 member parliament (nitijela) which elects a president among its

members. The first priority of the new Republic was to secure diplomatic recognition and membership in regional organizations so as to extend relationships away from the United States (Federated States of Micronesia, Kiribati, Papua New Guinea, Australia and New Zealand, the South Pacific Commission, the South Pacific Forum, including the Forum Fisheries Agency in Honiara and the Pacific Forum Line, and the Asian Development Bank. It is seated in the United States General Assembly. While the US and the Marshalls have established an embassy in each other's country, the President of the Republic of the Marshall Islands and the Minister for Foreign Affairs are roving ambassadors as there is no other Marshallese diplomatic post apart from the one in Washington. The Department of State performs diplomatic and consular services on behalf of the Republic upon request. In terms of financial transfers from the US, the Marshall receives around US$30 million a year under the Compact, an annual rent of around US$6 million for the use of the Kwajalein missile-testing base and development aid over a number of year for US$80 million. Washington established a US$150 million trust fund, the interests of which are going to the Marshallese who suffer from nuclear tests conducted in Bikini, Rongelap, Eniwetok and Utirik from 1946 to 1958. More than US$ 60 million are allocated to decontaminate these atolls and resettle their inhabitants on other ones. This is presently the case with the inhabitants of Kwajalein who have been resettled on Ebeye Island. The US provide more or less two-third of the Marshallese national budget ; Japan and Australia are financing development programmes in the fishing industry and in road infrastructure. Japan is paying a bit less than US$1 million for fishing rights.

The Federated States of Micronesia is a sovereign self-governing federation of four constituent states which elect a president among the members of its National Congress. The national policy in terms of Foreign Affairs is more ambitious than in the Marshall with extended linkages within the United Nations system (WHO, UNESCO, UNDP, etc.) and a larger diplomatic network. As with the Marshall, the FSM's national budget mainly comes from financial subsidies from Washington and development aid from Japan, Australia and New Zealand, copra exports and tourism. As in the Marshalls, the FSM leaders are pressing Washington to increase aid. But there are divisions among the representatives of Truk and Pohnpei in the National Congress, the former favouring strong stances against American and Japanese nuclear and chemical dumping. Pohnpei is prepared to secede from the Federated States over this issue, which could imply some conflicting situation with Washington, less aid and some incoherence in terms of diplomatic relations.

26 The Constitution of Palau, which includes non-nuclear clauses, was approved by 78% of the voters in July 1980. It came into effect on 1 January 1981 ; it is the first nuclear-free constitution in the world.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 13

votes cast in a referendum submitted on this specific question'.27 Several plebiscites have been organized in Palau which resulted in a great majority of voters approving the Compact agreement without achieving the necessary 75% which could change the Constitution. This means that the Republic of Palau is self-governing but remains formally a dependency administered by the US Department of the Interior and is not eligible for Compact grants as the Marshall and the Federated States of Micronesia. Although the United Nations Security Council terminated the strategic trust in 1990, the Republic of Palau cannot be formally recognized by other States until the US Senate ratifies the Compact. This requires that Palauans ought to alter their constitution to allow nuclear vessels and weapons in their waters ; but with three-quaters of the votes, this was apparently impossible to achieve. Robert Kiste summarised the situation : 'The Republic of Belau remains in limbo, the last remnant of the trust territory'.28 Financially speaking, Palau remained heavily dependent on the US, like its two American neighbours which benefit from the Compact.29 On 1 October 1994, Palau became independent after a judgment of the Supreme Court in Koror, capital of Palau, altered the Constitution in allowing less than 75 % of the population to adopt the compact of free association agreement.

The United States followed the general trend in the Pacific in granting statutory evolution to its possessions in the Pacific. Due to their strategic importance, especially during the cold war era, this very evolution had to be pertained to American strategic interests. It is an irony of history that fifty years after the end of World War II, the majority of these American territories which served as bloody battlegrounds opposing Japanese and American troops, are today invaded by Japanese tourists and investors, regaining an economic and political influence which was lost on military ground.

France : the last colonial power ?

The three French territories in the Pacific seem, at first sight, to have evolved apart from the general trend of the statutory evolutions which the great majority of Pacific island states or territories have achieved.

27 See Robert Kiste, 'United States' in Tide of History The Pacific Islands in the Twentheith Century above n 6, 234-235 &

Steve Hoadley, The South Pacific Foreign Affairs Handbook (Sydney, Allen & Unwin, 1992) 136-40.

28 Robert Kiste, above n 27, 235.

29 The Commonwealth of the Mariana Islands now considers that commonwealth status does provide less autonomy in internal and external affairs than the compact as well as lesser financial subsidies from Washington.

14 (1996) 26 VUWLR

In a sense, French Polynesia became a strategic territory in 1963 when Charles de Gaulle requested foreign diplomats to leave Tahiti. From then on diplomatic representation to French Polynesia would be assured only by diplomats posted in Paris.30 Only New Caledonia was to retain an official diplomatic representation for Australia, New Zealand and Indonesia in Noumea.

From 1963, thousands of military personnel, atomic technicians and engineers came to Tahiti, often with their families, to live for a few years. The need for huge military construction compounds and atomic infrastructures in Moruroa and Fangataufa - two Tuamotu atolls -, European-standard accommodation on Hao and in Papeete which served as military bases as well as food from France, had a drastic impact : on the one hand, it transformed the traditional way of life of the Polynesians who left their plantations to work in the construction industry which required labour and, on the other hand, the territorial budget increased tremendously through new customs duties and taxes on all imported materials and products from France. Tahiti rapidly gained the appearance of a wealthy country, in part because French salaries, civil and military, were nearly tripled while metropolitan people lived in French Polynesia. Local salaries soon followed, to avoid discrepancies in incomes. There are no income taxes in French Polynesia but the cost of living is nevertheless very high because of import duties which are needed to run the territory.

The French Polynesian economy depended heavily on military expenditure and its solvency was also at the mercy of the Ministry of Defence. As costs initially engendered by nuclear testing activities were inflationary, they became too heavy for the Ministry of Defence which began, after twenty years of operations, to send military experts and engineers for shorter periods and without their family. The effects on commerce, house rents, import taxes were so negative that French Polynesia was rapidly confronted with a very difficult situation. The Territory was now heavily in debt and Paris does not want to supplement its huge deficits to the same extent as in the past. The suspension of nuclear testing in 1992 exacerbated the situation which confronted French Polynesia, which obtained from Paris, in 1984, a self-governing status, similar to the one which the Cook Islands got from New Zealand.31 Because of this status, Paris thinks that French Polynesia should also organise its spending within the 30 Knowing that chancelleries would very seldom approve a trip to Tahiti from Paris.

31 Since 1984, French Polynesia is ruled by a president and ten ministers elected by the 42 Territorial Assembly members, themselves elected by general franchise every four years. All portfolios are in the hands of the territorial government except justice, defense and treasury. In foreign affairs the president of the territorial governement is fully able to sign conventions with other Pacific island states officially recognised by France.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 15

limits of the large transfer of public money France organises every year. It is on this very basis that paradoxically, the French Polynesian government is willing to see nuclear testing being restarted again. Even if this is possible in the foreseeable future, it would not last long and it would only prolong the artificial economy a little before forcing the French Polynesian population to come down to reality.

Wallis and Futuna became a French overseas territory in 1961 after its population wanted, by plebiscites, to abandon its French protectorate status which was existing since the 1880s. The archipelago has remained very traditional with three kingdoms and three customary governments,32 which are officially recognised by France. These two islands do not export anything and they are totally financially supported by Paris for the annual amount of some US$ 40 million. More than 15 000 Wallisians and Futunians are living in New Caledonia.

Like Australia and New Zealand, New Caledonia has been a settler's colony from 1863 onwards. Today it is usually perceived that two communities are living face to face while this French territory is pluriethnic with more than 20% of the total populations being neither Kanak nor Caldoche33 but Wallisians, Asians, Tahitians, etc. The Kanak are the majority of the population with some 44 % and the Caldoches represent some 33 %.

Independence status has been at stake in this territory for nearly twenty years among the two main populations, the Kanak generally want to achieve it while the Caldoches largely want to remain an integral part of France. A series of different statutes were implemented in New Caledonia by Paris since 1963, not to last long and to be accommodated by following ones. Following the bloody events of the 1980's, the Caledonian population will be expected to define, through a referendum, if they want to become constitutionally independent or not. But it is believed that this referendum in 1998 could be postponed as a majority of New Caledonian leaders consider today that independence would not be workable as such without a sufficient elite. The Matignon Agreement has so far produced an economic and political balance between the three provinces even though the Southern one where Noumea is remains the most powerful one. New Caledonia is rich in mineral ore and is the only French territory in the region which could engage in sustainable development if independent.

32 One kingdom in Wallis (Uvea) and two in Futuna (Alo and Sigave). Wallis and Futuna have a land area of 200 km2

and a total population of some 14 000. The French expatriates represent less than 2% of the entire population.

33 People of European or mixed extraction.

16 (1996) 26 VUWLR

France has thus postponed the evolutionary process of her three territories in the Pacific. This is due to strategic reasons in French Polynesia, to a democratic expression of choice for its future in New Caledonia, to a constitutional status quo in Wallis and Futuna where one does not find any real wish towards political independence as the archipelago is financially totally dependent upon French finances. But France would have to determine for itself what will be the future of its three territories. They are two options if the status quo is to be maintained in terms of links with the metropolis : either a stronger political decentralisation which would allow a better expression of local aspirations or new statutes for each of them, probably in some sort of free association with France if the local populations favour it.

Conclusion

The Pacific Islands are more and more vulnerable and fragile in the present world of technological advances. Let's consider for example maritime transport : the Islands without real financial means cannot afford the harbour's infrastructure which will allow them to receive container ships and thus cannot be involved in economic exchanges which, in turn, would favour access to what is called 'modernity'.

Decolonisation was the key element from the 1960s to the 1980s in the Pacific. Since then no Pacific territory has achieved constitutional independence. Does this mean that something has changed? It is highly probable that finances and social progress count nowadays more than politics.

Processus de décolonisation dans le Pacifique Une analyse comparative entre les puissances métropolitaines

Les archipels du Pacifique Sud ont accédé tardivement, en comparaison avec l'Asie et l'Afrique, au processus de décolonisation.

C'est la France qui l'a entamé la première en appliquant à ses territories d'outre-mer du Pacifique la loi-cadre Defferre de 1957 qui conduisit les colonies françaises d'Afrique sur la voie de l'indépendance. Des gouvernements autonomes furent élus en Nouvelle-Calédonie comme en Polynésie Française cette même année. Mais ils sont abolis en 1963 lorsque le général de Faulle, après son retour au pouvoir, décida d'implanter le centre d'expérimentation nucléaire à Moruroa. De cette date à aujourd'hui, un statu quo ante a persisté au plan statutaire, vecteur de crises et de tensions, principalement en Nouvelle-Calédonie. L'évolution politique des territories française du Pacifique, incluant Wallis & Futuna, est ici analysée.

A COMPARATIVE ANALYSIS BETWEEN METROPOLITAN POWERS 17

La Grande-Bretagne, l'Australie et la Nouvelle-Zélande se sont conformées aux recommendations du Comité de décolonisation des Nations-Unies en matière de décolonisation, à savoir d'accorder l'indeependance constitutionnelle aux territories, de les intégrer à la métropole ou encore de les engager à former des gouvernements autonomes en association libre avec l'ancienne puissance coloniale.

Le Royaume-Uni attribua l'indépendance constitutionnelle à toutes ses colonies du Pacifique, sauf à Pitcairn pour des raisons particulières. Les raisons sous-tendant cette décision sont analysées ici en fonction du contexte britannique des années 1970, culminant dans la difficile indépendance de Vanuatu en juillet 1980.

La Nouvelle-Zélande et l'Australie ont suivi les recommendations de l'ONU et ont accordé l'indépendance ou l'autonomie gouvernementale à leurs territoires colonisés. Dans le même temps, ces deux pays ont renforcé leur potentiel de domination dans le Pacifique Sud dans le contexte géopolitique malaisé des années 1980.

La Micronésie américaine a connu une évolution statutaire au travers de son cadre stratégique, examiné en détail dans cet article.

Ce qui est en jeu aujourd'hui dans l'ensemble du Pacifique insulaire ne relève sans doute plus du fait politique mais bien de l'économique et du financier.

EVOLUTIONS COMPAREES DU PIB ET DE LA POPULATION (Base 100 1970)

0

50

100

150

200

250

300

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994

PIB RÉEL

POPULATION

PIB/HABITANT

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994PIB REEL 100 112 123 138 158 181 199 220 242 263 277 288 300

POPULAT ION 100 105 110 115 122 129 137 145 153 161 169 176 183P IB/HAB ITANT 100 107 112 120 129 140 145 152 158 163 164 164 164

R é e l R ée s t imé Budget

(Chiffres en Milliards de FCP) 1 9 8 9 / 9 01 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 4 / 9 61 9 9 7 / 9 9 2 0 0 0 / 0 22 0 0 3

- Transferts mi l i ta i res 3 8 3 8 3 6 3 5 3 5 3 5 3 5 2 8 2 0

- Transferts c iv i ls 5 0 4 4 4 6 4 8 5 0 5 4 5 8 6 2 6 5

. Transferts de base .................................... 42 44 45 45,5 47 48 51 54 57

. Transferts pacte .......................................... 0 0 0 1 3 5 7 8 8

. Variation dette publique .......................... 8 0 1 1,5 0 1 0 0 0

- Transferts Etat 8 8 8 2 8 2 8 3 8 5 8 9 9 3 9 0 8 5

- Ressources propres 2 7 2 9 3 1 3 7 4 4 4 1 4 7 5 7 6 5

. Tourisme ....................................................... 17 17 17 19,5 22,5 21 24 30 35

. Retraités .......................................................... 6 7 8 9 10 10 12 14 15

. Exportations .................................................... 4 5 6 8,5 11,5 10 11 13 15

- Ressources extér ieures 1 1 5 1 1 1 1 1 3 1 2 0 1 2 9 1 3 0 1 4 0 1 4 7 1 5 0

% RESSOURCES PROPRES 2 3 , 5 % 2 6 , 1 % 2 7 , 4 % 3 0 , 8 % 3 4 % 3 1 , 5 % 3 3 , 6 % 3 8 , 8 % 4 3 , 3 %

VARIATIONS DES RESSOURCES EXTERIEURES/BASE 1990

-30

-20

-10

0

10

20

30

40

50

60

1991 1992 1993 1994 1994/96 1997/99 2000/02 2003

Transferts civils Ressources propres Dette publ ique Transferts mil itaires

R é e l Budget

1

LE STATUT DU TERRITOIRE ET LE PACTE DE PROGRÈS C Vernaudon*

Pour pouvoir traiter ce sujet, il faut au préalable avoir défini les termes qui le composent.

Or, si le statut du Territoire est un texte clairement identifié, il n'en va pas de même pour le Pacte de progrès.

Ce terme de Pacte de progrès est en effet abondamment utilisé depuis deux ans sans que son contenu exact n'ait été clairement identifié ce qui amène les différents interlocuteurs qui le cite à lui donner des définitions parfois très distinctes les unes des autres.

Ainsi, sous un angle politique, le Pacte de progrès est devenu aujourd'hui: le seul espoir de salut pour la Polynésie française pour les uns et il serait déjà mort-né pour les autres.

Pour ma part, je vous propose de structurer mon intervention autour de trois définitions possibles du Pacte de progrès car à mes yeux le Pacte de progrès fût en premier lieu une démarche avant d'être l'expression d'un projet de société et enfin sera ou ne sera pas la concrétisation d'une nouvelle organisation économique, sociale et culturelle sur le Territoire en fonction de ce que les hommes voudront en faire.

I Le pacte de progrès: Une démarche

En écoutant hier l'exposé de Mr Regnault sur la vie politique du Territoire de 1984 à 1994 et sur le caractère animé et souvent très conflictuel de cette dernière, il m'a semblé qu'avait échappé à l'analyse de Mr Regnault une courte parenthèse au cours de laquelle une quasi union sacrée avait pu être observée dans notre petit monde politico-social.

Je situe pour ma part cette parenthèse entre avril 1992 et janvier 1993, période d'élaboration de la Charte du développement et du Pacte de progrès.

* Conseiller au commerce exterieur pour la Polynésie Française et membre du Conseil économique et social à

Paris.

2 (1996) 26 VUWLR

De fait, la Polynésie française a connu durant cette période une activité particulièrement intense de réflexion et de remise en cause de la part de l'ensemble des forces sociales et politiques.

Se sont ainsi succédés les travaux de l'IHEDN (Institut des Hautes Etudes de la Défense Nationale), les ateliers généraux de la Charte du développement, les travaux du CESC (Conseil Economique, Social et Culturel) sur le thème d'autosaisine: "Quel choix pour l'avenir de la Polynésie" enfin, les travaux d'élaboration des propositions de la délégation polynésienne pour le Pacte de progrès.

L'ensemble de ces réflexions et travaux ont constitué à la fois un auto-diagnostic et une auto-critique en profondeur de la société polynésienne par elle-même pour ensuite jeter les bases d'une définition d'un projet de société pour la Polynésie française pour la décennie à venir.

Je vous invite à consulter les documents produits tant par l'IHEDN que le CESC et surtout la Charte du développement pour constater que notre auto-critique fut sans aucune complaisance emportant simultanément dans ses flots les politiques, l'Etat, les syndicalistes, le patronat, les églises, les medias et en définitive chaque citoyen polynésien qui avait profité du système depuis 25 ans sans réagir et surtout sans penser à l'avenir de ses enfants.

Mais ces différents travaux ont également constitué un diagnostic particulièrement clair des forces et faiblesses de notre économie et de notre société à partir duquel ont été proposés des axes de développement et de réformes.

Mais me direz-vous, quel rapport avec le statut et avec le Pacte de progrès ?

Il se trouve que l'aboutissement de ce vaste chantier de réflexion fut la production en décembre 1992 d'un document intitulé Propositions de la délégation polynésienne pour le Pacte de progrès. Comme nous le verrons au chapître suivant, ce document constitue un véritable projet de société pour la Polynésie française et s'il fallait trouver un texte qui soit le Pacte de progrès, ce serait à mon avis plutôt celui-là que la loi d'orientation ou le contrat de développement comme cela a pu être dit ultérieurement.

La caractéristique fondamentale de ce document est qu'il a été élaboré en Polynésie et par les polynésiens dans le cadre d'une concertation sans précédent qu'ont salué successivement les ministres des DOM-TOM, Messieurs Le Pensec et Perben ainsi que le Premier Ministre de la République, Mr Balladur.

Le Conseil Economique, Social et Culturel a été largement associé à son élaboration et l'a soutenu à l'unanimité. Mais il faut surtout rappeler que ces propositions pour le Pacte de progrès ont été adoptées à la quasi-unanimité par les conseillers territoriaux donc majorité et opposition autonomiste confondues.

LE PACTE DE PROGRÈS 3

Seule l'opposition indépendantiste s'est abstenue bien qu'elle ait fait savoir qu'elle aurait pu soutenir ce texte s'il avait intégré un scrutin d'auto-détermination à échéance de 10 ans dans ses recommandations.

Pour la première fois et très exactement dans l'esprit et dans la lettre du texte du statut d'Autonomie interne, les polynésiens avaient donc défini entre eux ce que devait être leur nouvelle économie, leur nouvelle société et, aussi nous allons le voir, le cadre statutaire souhaité pour les 10 ans à venir.

Voilà en quoi, le Pacte de progrès fût en premier lieu une démarche respectant le fondement de l'esprit du statut qui est qu'il appartient fondamentalement à la population polynésienne et à ses élus de définir l'environnement social, économique et culturel dans lequel elle souhaite inscrire son développement.

On peut s'interroger sur les raisons qui ont permis d'obtenir l'union sacrée politique qui fît qu'aussi bien Messieurs Gaston Flosse et Jean Juventin que Messieurs Alexandre Leontieff et Emile Vernaudon ou encore Daniel Millaud et Raymond Desclaux devaient soutenir ce texte à l'Assemblée Territoriale et ensuite d'une même voix devant le Ministre des DOM-TOM, Monsieur Louis Le Pensec quelque peu surpris à l'évidence de trouver pour la première fois de son histoire une représentation politique de la Polynésie française unanime à Paris pour défendre un projet commun.

Sans aucun doute, l'importance des enjeux pour le Territoire et le soutien unanime et puissant des forces vives apporté à la démarche furent-ils des éléments déterminants dans cette cohésion.

Je pense qu'il s'y est ajouté un facteur supplémentaire extrêmement bénéfique qui était alors lié à la constitution politique de la délégation polynésienne.

En effet, cette dernière comprenait de droit, le Président du Gouvernement du Territoire, le Président de l'Assemblée Territoriale, les deux Députés, le Sénateur, le Conseiller économique et social et le Président du CESC.

Or, il se trouve qu'à cette période là, les postes de présidents des institutions locales et de parlementaires étaient très équitablement partagés entre les différentes composantes du paysage politique polynésien à l'exclusion du parti indépendantiste de Monsieur Temaru.

Il y avait donc de facto un large partage du pouvoir politique qui fût je le pense déterminant pour assurer le succès de la première phase de la démarche, celle de l'élaboration consensuelle de notre projet de société.

II Le pacte de progrès: Un projet de société

L'élément majeur du diagnostic du Pacte de progrès était que la Polynésie française avait bénéficié pendant 25 ans d'un schéma de développement économique basé sur les

4 (1996) 26 VUWLR

transferts du CEP comme l'a rappelé hier Monsieur Bernard Poirine, mais plus encore comme l'ensemble des autres DOM-TOM sur le système d'économie de rente créé par les transferts civils de l'Etat prenant principalement la forme de rémunérations de fonctionnaires avec application d'un fort coefficient multiplicateur par rapport à la métropole.

Outre ses effets très pervers constatés dans tout l'outre-mer français, ce système ne pouvait plus du tout se perpétuer en Polynésie française dès lors que l'un de ses moteurs majeur, le CEP, était potentiellement remis en cause.

L'économie de la rente avait, par ailleurs, permis grâce à de très importants mécanismes de redistribution (subvention au coprah, régime de protection sociale en milieu rural, embauches de personnels non qualifiés dans les administrations territoriales et les communes…) d'assurer un emploi et des revenus décents à une très large fraction de la population jusqu'au milieu de la décénnie 80.

Mais la combinaison d'une forte croissance démographique et d'un net ralentissement de la croissance économique induit par une nette réduction du taux de croissance annuel des transferts de l'Etat conduisait depuis déjà près de 10 ans à un développement très rapide du chômage et de l'exclusion qui touche désormais environ 20% de la population.

Les schémas ci-après résument, en conséquence, les principaux constats établis au début des annés 90 (voir par ailleurs les tableaux de référence de la Charte du développement) et les principaux objectifs fixés en 10 ans dans le cadre du Pacte de progrès.

LE PACTE DE PROGRÈS 5

EVOLUTIONS COMPAREES DU PIB ET DE LA POPULATION (Base 100 1970)

0

50

100

150

200

250

300

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994

PIB RÉEL

POPULATION

PIB/HABITANT

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994PIB REEL 100 112 123 138 158 181 199 220 242 263 277 288 300

POPULAT ION 100 105 110 115 122 129 137 145 153 161 169 176 183P IB/HAB ITANT 100 107 112 120 129 140 145 152 158 163 164 164 164

6 (1996) 26 VUWLR

Commentaires:

- De 1970 à 1986, le PIB réel de la Polynésie française a progressé à un rythme supérieur à + 5% par an alors que la population augmentait au rythme de + 2,5% par an.

Le produit intérieur brut moyen par habitant a pu ainsi régulièrement progresser sur cette période.

- Depuis le milieu de la décennie 80, le PIB réel ne progresse plus qu'à un rythme moyen de + 2% par an soit au même rythme que la population.

Le produit intérieur brut moyen par habitant est ainsi plafonné depuis presque 10 ans. Ce taux moyen inchangé cache une amélioration du pouvoir d'achat des populations disposant déjà d'un emploi et d'un logement équipé combinée à un développement rapide du chômage et de l'exclusion.

LE PACTE DE PROGRÈS 7

PRINCIPAUX OBJECTIFS MACROECONOMIQUES DU PACTE A L'HORIZON 2003

Base 1990

Objectif de

variation

réelle annuelle

Objectif 2003

Population

...........................................

PIB

...........................................................

(en Milliards FCP)

PIB par habitant ..............................

(en Millions FCP)

Ressources extérieures ................

(en Milliards FCP)

dont:

- Ministère de la défense .............

- Transferts civils de l'Etat .........

- Ressources propres ....................

200.000

310

1,55

115

38 (33%)

50 (43%)

27 (24%)

+ 1,5%/an

+ 2%/an

+ 0,5%/an

+ 2%/an

non significatif

+ 2%/an

+ 7%/an

245.000

405

1,65

150

20 (13%)

65 (43%)

65 (44%)

(Note IFF = 18,18 FCP)

8 (1996) 26 VUWLR

Commentaires:

- L'économie polynésienne est ouverte sur les échanges internationaux. L'évolution de son PIB depuis 30 ans a dépendu de l'évolution du volume des ressources extérieures et cette corrélation devrait rester vérifiée à l'avenir.

- La variable déterminante de l'économie polynésienne est, en conséquence, le volume des ressources extérieures. Sur la décennie a venir, il est escompté une progression de ces ressources extérieures de + 2% par an permettant d'induire une croissance du PIB réel d'également + 2% par an.

- Il est pris pour hypothèse de travail que le Centre d'Expérimentation du Pacifique aura cessé ses activités en Polynésie française en 2003 d'où une division par deux des dépenses du ministère de la défense en Polynésie française.

- Pour conserver une croissance globale des ressources extérieures de + 2% par an malgré la disparition du CEP, il est indispensable qu'à la fois, les transferts civils de l'Etat progressent de + 2% par an et que le Territoire génère une progression de ses ressources propres au rythme de + 7% par an.

- Le PIB moyen par habitant ne progresserait que peu mais les différentes réformes structurelles (fiscalité - protection sociale…) devraient permettre une meilleure redistribution des richesses et une lutte contre la progression de l'exclusion sociale.

La réalisation des objectifs fondamentaux sur les 10 ans à venir suppose donc à la fois:

- Une forte progression (rythme de + 7%/an en réel) des ressources propres du Territoire de manière à réduire notre dépendance vis à vis de la Métropole en termes de balance des paiements de 75% à environ 50%.

- D'importantes réformes structurelles sur le Territoire dans les domaines de la fiscalité, de la protection sociale et de son financement, des grilles salariales de la Fonction publique, du logement social… afin de mieux redistribuer les richesses et l'emploi et de réduire ainsi l'exclusion sociale.

Par une motion de soutien au projet de Pacte de progrès adoptée à la quasi unanimité le 15 janvier 1993, l'Assemblée Territoriale adoptait bien ainsi le schéma macroéconomique proposé et s'engageait à mettre en œuvre l'ensemble des réformes structurelles en matière économique et sociale comme le prouve le texte de cette motion ci-après:

LES PROPOSITIONS DE LA DELEGATION POLYNESIENNE

La motion de soutien de l'Assemblée Territoriale

au projet du Pacte de progrès

LE PACTE DE PROGRÈS 9

"L'Assemblée Territoriale réunie en session extraordinaire le 15 janvier 1993:

- Approuve et soutient le document présenté par la délégation polynésienne. Ce document élaboré conformément aux termes du protocole d'accord du 14 mai 1992 qui stipule: "les autorités du Territoire affirment clairement leur volonté de définir, en concertation avec l'Etat, un Pacte de progrès qui servira de base de discussion avec les représentants de l'Etat".

- Demande que soit validé par l'Etat le schéma de référence économique sur lequel est fondé le projet de Pacte et consistant à rééquilibrer l'économie du Territoire sur une période de 10 ans.

- Souhaite que les répartitions de financement du Pacte qui y sont prévues soient retenues par l'Etat ; et que ce dernier s'engage clairement pour la part qui le concerne. L'Assemblée Territoriale quant à elle, s'engage de son côté à inscrire les crédits correspondants aux actions retenues dans les budgets à venir.

- S'engage à mettre en œuvre les réformes envisagées pour autant qu'elles sont de sa compétence et que l'Etat de son côté aura apporté, quand il y a lieu, la contribution juridique, technique ou financière qui lui incombe.

L'Assemblée Territoriale tient à cette occasion à réaffirmer sa volonté que la Polynésie française demeure un Territoire autonome au sein de la République. Elle rejette l'indépendance, comme l'administration directe par l'Etat, et considère que le statut d'autonomie est suffisamment évolutif pour être amélioré en fonction des nécessités de son développement."

Il est particulièrement intéressant de souligner ici que cette motion outre son soutien au projet de société économique et social développé dans le document intitulé Propositions de la délégation polynésienne pour le Pacte de progrès rappelait très clairement que pour l'ensemble des élus ayant voté cette motion, ce nouveau projet de société ne pouvait s'inscrire que dans un seul cadre statutaire, celui de Territoire d'outre-mer doté de l'Autonomie interne tout en rappelant que ce type de statut restait perfectible.

Peu de temps auparavant, les représentants de la société civile au Conseil économique, social et culturel avaient conclu de même leur rapport en écrivant:

Extrait du Rapport du CESC sur le thème:

Quels choix pour l'avenir de la Polynésie

"Parmi les différentes perspectives d'évolution institutionnelle de la Polynésie française, trois conceptions pourraient être envisagées:

10 (1996) 26 VUWLR

1 L'indépendance, accession à la souveraineté, ne peut être que le fruit d'un long processus bien préparé et accepté par la plus grande majorité, faute de quoi et compte tenu de nombreuses faiblesses structurelles de notre pays, toute précipitation dans cette voie pourrait être dangeureuse.

2 La départementalisation serait considérée comme un retour en arrière. Alors que même les collectivités métropolitaines bénéficient de plus d'autonomie, devenir un département après une période d'autonomie interne paraît à contre courant de l'histoire.

3 L'autonomie interne, au sein de la République, reste, malgré sa jeunesse relative et ses premiers échecs, un cadre institutionnel intéressant pour répondre aux aspirations qui semblent actuellement se dégager au sein de la population. Toutefois, les dysfonctionnements actuels appellent une refonte destinée à une clarification des textes, tant en matière de compétence, que de fonctionnement des institutions.

Quel que soit le choix retenu, il s'agit avant tout, pour la Polynésie française, de se forger un grand dessein et de le mettre en œuvre avec la Métropole dans un cadre institutionnel, économique, social et culturel cohérent et sans ambiguïté."

Il est, je pense clair, que cette option largement partagée pour le statut d'autonomie interne était assise sur le double objectif:

- De pouvoir s'administrer librement (d'où le rejet de la départementalisation) dans l'esprit de l'article 74 de la constitution.

- Tout en conservant des liens avec la Métropole pour préserver notamment la base de flux de transferts financiers (d'où le rejet de l'indépendance, du moins tant que notre économie restera aussi dépendante des transferts de l'Etat sans lesquels une faillite généralisée de l'économie polynésienne contemporaine serait induite). Cette position est moralement justifiée par les contributions apportées sans discontinuité par la Polynésie française à la défense de la Nation au travers de sa participation active aux deux grandes guerres et depuis 1964 par l'accueil du Centre d'Expérimentation du Pacifique.

Le Pacte de progrès devait donc être à la fois un pacte des polynésiens entre eux-mêmes pour mieux partager les richesses d'où la batterie de réformes proposées, mais aussi, bien évidemment, un pacte renouvellé entre la Polynésie française et l'Etat.

Dans le cadre du Pacte Etat-Territoire, la Polynésie française s'engageait pour sa part à développer ses ressources propres, à se réformer et l'Etat pour sa part devait définir la manière dont il accompagnerait la Polynésie française dans sa mutation profonde pour créer l'économie et la société de l'après CEP.

LE PACTE DE PROGRÈS 11

Il est important, à cet égard, de souligner combien les autorités de l'Etat et le législateur national ont tenu à respecter le statut dans l'élaboration du Pacte de progrès.

Ainsi, peut-on constater à la lecture de la loi d'orientation pour le dévelopement économique, social et culturel de la Polynésie française que le Parlement n'a pas défini mais a pris acte, en en approuvant l'esprit, des grandes orientations de politique économique, sociale et culturelle que les polynésiens ont eux-mêmes définis:

Extrait de la loi d'orientation

"L'Etat apportera notamment dans le cadre du contrat de développement et des conventions prévues à l'article 8 de la présente loi un appui technique et financier au territoire, afin d'aider ce dernier à atteindre les objectifs de développement économique, social et culturel que le territoire a définis dans l'exercice de ses compétences."

Le Texte de loi lui-même ne défini pas des orientations de politique mais précise comment sur des sujets particuliers, l'Etat entend accompagner le Territoire ou bien au travers d'une assistance technique, ou bien au travers d'aides financières ou d'adaptation de textes juridiques qui sont de son ressort.

Ainsi par exemple:

En matière de fiscalité, l'article 5 de la loi précise t'il:

"En matière de fiscalité, l'Etat apportera son concours technique à l'effort engagé en vue de moderniser les règles fiscales en vigueur dans le territoire. Il accroîtra le nombre des fonctionnaires détachés ou mis à disposition des services fiscaux et affectés au service des douanes du territoire.

L'Etat proposera d'autre part au territoire la conclusion d'une convention en vue de préciser les règles de territorialité de l'impôt et de prévenir la fraude fiscale."

En matière de protection sociale, les articles 3, 10 et 11 de la loi précisent-ils:

Article 3

"Dans le domaine de la santé publique et de la protection sociale, l'Etat apportera une assistance technique à la rénovation du système de santé et du régime de protection sociale du territoire. A cet effet, des experts seront mis à la disposition des autorités du territoire.

Les conditions d'attribution et d'utilisation des aides financières définies à l'article 10 et de l'assistance technique seront fixées par voie de convention.

12 (1996) 26 VUWLR

L'Etat conclura avec le territoire de la Polynésie française un accord entre les régimes de protection sociale qui permettra la coordination de ces régimes pour l'ensemble des risques au profit des personnes assurées."

Article 10

"En sus des contributions qu'il verse au titre de la solidarité, telles qu'elles sont fixées en 1993, l'Etat attribuera au régime de protection sociale de solidarité que le territoire s'engage à mettre en place une dotation de:

40 Millions de francs en 1994 .

60 Millions de francs en 1995 ;

80 Millions de francs en 1996 ;

100 Millions de francs en 1997 ;

120 Millions de francs en 1998.

En sus de sa participation aux actions du territoire en matière de santé publique, telle qu'elle est fixée en 1993, l'Etat apportera à ces actions une contribution de:

1,8 Million de francs en 1994 ;

3,6 Millions de francs en 1995 ;

5,4 Millions de francs en 1996 ;

7,2 Millions de francs en 1997 ;

9 Millions de francs en 1998.

Les modalités des participations visées ci-dessus seront arrêtées dans une convention entre l'Etat et le territoire qui précisera les règles permettant le bon usage des fonds alloués."

Article 11

"Les personnes relevant du code des pensions civiles et militaires de retraite, qui exercent leurs fonctions en Polynésie française ou qui y résident en qualité de pensionnés au titre de ce code, sont affiliées à compter du 1er janvier 1995, pour les prestations en nature relevant de l'assurance maladie-maternité, au régime de sécurité sociale qui leur serait applicable si elles exerçaient leurs fonctions en métropole ou y résidaient en qualité de pensionnés au titre dudit code."

Note: L'aritcle 11 s'applique aux fonctionnaires d'Etat qui sont de compétence Etat,

LE PACTE DE PROGRÈS 13

statut article 3 - alinéa 14.

Il est clair, à la lecture de ces articles, qu'il appartient au Territoire et à lui seul de définir sa politique fiscale, sa politique de protection sociale et que l'Etat pour sa part après avoir approuvé les orientations décidées par le Territoire apporte son concours technique, juridique et financier pour aider à la réalisation de ces dernières.

De la même manière, le contrat de développement que beaucoup assimilent à tort avec le Pacte de progrès dont il ne constitue qu'une "pièce du puzzle" précise comment l'Etat aide le Territoire à engager la politique de développement de ses ressources propres, la politique d'équipements publics et de développement des archipels.

Il ressort de ces éléments que les différents textes constitutifs de l'édifice Pacte de progrès à savoir, les propositions de la délégation polynésienne pour le Pacte de progrès, les différentes délibérations de l'Assemblée Territoriale, la loi d'orientation, le contrat de développement, le contrat de ville, les différentes conventions Etat-Territoire (avec notamment le ministère de la défense, le ministère de la solidarité, le ministère de la culture…) ont tous scrupuleusement respecté l'esprit et la lettre du statut.

Comme nous n'avons cité pour le moment que des domaines de compétence territoriale, on peut souligner que des domaines de compétence Etat (Article 3 du statut) ont fait l'objet de propositions également dans l'élaboration du Pacte de progrès mais en dehors des propositions de la délégation polynésienne et donc directement cette fois dans le cadre de la loi d'orientation comme l'illustrent par exemple les article suivants qui concernent des domaines de la compétence de l'Etat.

- Justice -

(Article 3 du statut - alinéas 11-12 et 13)

Article 4

"L'Etat apportera, selon des modalités définies par convention, une assistance technique, notamment par la mise à disposition d'experts, aux services de la protection judiciaire de la jeunesse de la Polynésie française.

L'Etat instituera une commission de conciliation obligatoire en matière foncière dont la composition, la compétence et les règles de fonctionnement seront définies par une loi ultérieure."

- Communes -

(Article 3 du statut - alinéa 15)

Article 6

14 (1996) 26 VUWLR

"Dans le domaine de l'administration communale, le personnel communal sera doté d'un statut adapté à la situation particulière des communes du territoire et notamment à leurs capacités budgétaires."

III LE PACTE DE PROGRÈS: UN PROJET QUI RESTE A CONCRETISER

On a tant parlé du Pacte de progrès qu'il appartient désormais de passer des écrits et de la parole aux actes.

Pour que se concrétisent la nouvelle économie et la nouvelle société polynésienne, des conditions déterminantes devront être respectées. Certaines d'entre elles mettent en jeu le statut.

Ces conditions sont les suivantes:

1. La réussite du plan de développement des ressources propres.

L'objectif est ambitieux, + 7% par an et une part des ressources propres dans les ressources globales portée de 24% en 1990 à 44% en 2003. Mais 1994 affiche déjà une quote-part de 34% comme le démontrent le tableau et le graphique ci-après.

BALANCE DES RESSOURCES EXTERIEURES

LE PACTE DE PROGRÈS 15

R é e l R ée s t imé Budget

(Chiffres en Milliards de FCP) 1 9 8 9 / 9 01 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 4 / 9 61 9 9 7 / 9 9 2 0 0 0 / 0 22 0 0 3

- Transferts mi l i ta i res 3 8 3 8 3 6 3 5 3 5 3 5 3 5 2 8 2 0

- Transferts c iv i ls 5 0 4 4 4 6 4 8 5 0 5 4 5 8 6 2 6 5

. Transferts de base .................................... 42 44 45 45,5 47 48 51 54 57

. Transferts pacte .......................................... 0 0 0 1 3 5 7 8 8

. Variation dette publique .......................... 8 0 1 1,5 0 1 0 0 0

- Transferts Etat 8 8 8 2 8 2 8 3 8 5 8 9 9 3 9 0 8 5

- Ressources propres 2 7 2 9 3 1 3 7 4 4 4 1 4 7 5 7 6 5

. Tourisme ....................................................... 17 17 17 19,5 22,5 21 24 30 35

. Retraités .......................................................... 6 7 8 9 10 10 12 14 15

. Exportations .................................................... 4 5 6 8,5 11,5 10 11 13 15

- Ressources extér ieures 1 1 5 1 1 1 1 1 3 1 2 0 1 2 9 1 3 0 1 4 0 1 4 7 1 5 0

% RESSOURCES PROPRES 2 3 , 5 % 2 6 , 1 % 2 7 , 4 % 3 0 , 8 % 3 4 % 3 1 , 5 % 3 3 , 6 % 3 8 , 8 % 4 3 , 3 %

16 (1996) 26 VUWLR

VARIATIONS DES RESSOURCES EXTERIEURES/BASE 1990

-30

-20

-10

0

10

20

30

40

50

60

1991 1992 1993 1994 1994/96 1997/99 2000/02 2003

Transferts civils Ressources propres Dette publ ique Transferts mil itaires

R é e l Budget

2. Lé dégonflement de la Fonction publique.

Les administrations pèsent trop dans l'économie polynésienne et doivent retrouver une place plus raisonnable dans la nouvelle économie à construire. Le ministère de la Défense nationale réduira très certainement ses activités et il faudra également que les administrations civiles territoriales et communales soient réduites tant en effectifs qu'en masse salariale pour réduire le poids de la pression fiscale nécessaire à son financement.

Cet effort majeur est engagé depuis peu d'années et devra être poursuivi.

3. La mise en œuvre effective des grandes réformes structurelles.

Les réformes majeures du système sont celles de la fiscalité et plus largement des mécanismes de prélèvements obligatoires ainsi que la réalisation de la protection sociale généralisée avec une remise à plat de la politique familiale.

LE PACTE DE PROGRÈS 17

4. La concrétisation des engagements financiers de l'Etat au titre du Pacte de progrès.

Si le respect des engagements de l'Etat au titre du Pacte de progrès sont loin de constituer une condition suffisante à la réussite du Pacte, il en constitue néanmoins une condition particulièrement nécessaire pour garantir les grands équilibres macroéconomiques du Territoire.

5. Un climat politique et social relativement serein.

Le développement ne peut se construire que sur la confiance. Aussi, un des risques majeurs qui pourrait remettre en cause la réalisation du Pacte de progrès est-il constitué par la menace d'une combinaison d'instabilité politique chronique et de troubles sociaux incontrôlés.

En développant les mécanismes de partage du pouvoir et de garantie du principe démocratique du respect du choix majoritaire, le statut pourrait jouer un rôle dans cette indispensable régulation des forces politiques et sociales.

Mais au-delà des textes les hommes au pouvoir qu'ils soient politiques ou syndicalistes devront apprendre à limiter leurs "chamailleries". Car, comme l'ont rappelé plusieurs intervenants, ce n'est en aucun cas le texte statutaire seul qui pourra définitivement rendre impossible tout dysfonctionnement des institutions.

Par ailleurs, il serait souhaitable pour le débat démocratique que les médias, en particulier la télévision, rééquilibrent significativement la part qu'ils consacrent aux véritables débats de société par rapport à l'espace réservé à la "politique spectacle".

6. Une régulation législative accompagnatrice de la mutation de la société.

Nous l'avons vu, le Pacte de progrès ne pourra réussir que si des réformes structurelles majeures sont mises en œuvre dans des domaines aussi divers que la politique de la famille, la politique foncière, la fiscalité, les mécanismes de protection sociale …

Dans tous ces domaines, c'est la loi qui forge au fil des ans la structure économique et sociale d'une société.

Les rédacteurs de la constitution avaient, semble-t'il, clairement identifié que l'ensemble de l'Outre-Mer français était confronté à des environnements économiques, sociaux et culturels suffisamment distincts de la situation en Métropole pour justifier de l'application d'un environnement législatif et règlementaire différent et adapté aux réalités locales.

L'exemple contemporain le plus flagrant de situation fondamentalement distincte entre la Métropole et l'Outre-Mer est la question démographique.

18 (1996) 26 VUWLR

Ainsi, il semble évident que la politique de la famille mise en œuvre en Outre-Mer ne devrait en aucun cas être calquée sur celle appliquée en Métropole puisque les objectifs (de régulation dans un cas et nataliste dans l'autre) sont fondamentalement opposés.

Il n'est pas inutile de rappeler à ce stade les articles de la constitution qui semblent établir ce "droit à la différence".

Chapître: Des collectivités territoriales

Article 73

"Le régime législatif et l'organisation administrative des départements d'Outre-Mer peuvent faire l'objet de mesures d'adaptation nécessitées par leur situation particulière".

Article 74 (version 1958)

"Les territoires d'Outre-Mer de la République ont une organisation particulière tenant compte de leurs intérêts propres dans l'ensemble des intérêts de la République. Cette organisation est définie et modifiée par la loi après consultation de l'assemblée territoriale intéressée".

Article 74 (version 1992)

"Les territoires d'Outre-Mer de la République ont une organisation particulière tenant compte de leurs intérêts propres dans l'ensemble des intérêts de la République.

Les statuts des territoires d'Outre-Mer sont fixés par des lois organiques qui définissent, notamment, les compétences de leurs institutions propres, et modifiés, dans la même forme, après consultation de l'Assemblée Territoriale intéressée.

Les autres modalités de leur organisation particulière sont définies et modifiées par la loi après consultation de l'Assemblée Territoriale intéressée."

Pour tenter de comprendre ce que pourrait être l'esprit sous-jacent dans le statut d'Autonomie interne de la Polynésie française à la lumière du texte de la constitution, il est frappant de relire les articles 77 et 78 de cette dernière dans le chapître de la Communauté :

Article 77

"Dans la communauté instituée par la présente Constitution, les Etats jouissent de l'autonomie ; ils s'administrent eux-mêmes et gèrent démocratiquement et librement leurs propres affaires.

LE PACTE DE PROGRÈS 19

Il n'existe qu'une citoyenneté de la Communauté.

Tous les citoyens sont égaux en droit, quelles que soient leur origine, leur race et leur religion. Ils ont les mêmes devoirs".

Article 78

"Le domaine de la compétence de la Communauté comprend la politique étrangère, la défense, la monnaie, la politique économique et financière commune ainsi que la politique des matières stratégiques.

Il comprend en outre, sauf accord particulier, le contrôle de la justice, l'enseignement supérieur, l'organisation générale des transports extérieurs et communs et des télécommunications.

Des accords particuliers peuvent créer d'autres compétences communes ou régler tout transfert de compétence de la Communauté à l'un des ses membres".

On constate ainsi que la distribution des compétences entre l'Etat Français et le territoire de la Polynésie française est aujourd'hui quasiment celle prévue par l'article 78 de la constitution qui traite non pas des territoires d'Outre-Mer mais de la Communauté qui n'a jamais vu le jour dans les faits.

Dans ce cadre de répartition des compétences, l'article 77 pose le principe de l'administration autonome dans l'ensemble des matières qui ne sont pas de la compétence de la Communauté.

L'article 77 précise clairement, par ailleurs, qu'il n'existe qu'une citoyenneté de la communauté et que: tous les citoyens sont égaux en droits et qu'ils ont les mêmes devoirs".

La difficulté fondamentale pour les rédacteurs de la constitution était de trouver une rédaction qui réussisse à rendre compatibles le respect du principe d'égalité des citoyens avec la reconnaissance d'une "spécifité législative" pour les collectivés d'Outre-Mer conçue, par conséquent, comme positive (permettant d'intégrer les différences) et non comme restrictive ( création d'une catégorie de sous-citoyens).

Or, l'expérience présente semble démontrer que tant pour les départements d'Outre-Mer que pour les territoires d'Outre-Mer, les rédacteurs de la constitution n'ont pas réussi à exprimer suffisamment clairement leur conception de l'équilibre à trouver entre le principe d'égalité et la reconnaissance des spécificités.

Notamment, comme l'a démontré Maître Moyrand hier, dans le cas particulier du statut d'Autonomie interne appliqué à la Polynésie française, on se trouve confronté à la contradiction fondamentale suivante qui est que de par le statut, un grand nombre de compétences traditionnellement dévolues au législateur national sont transférées au

20 (1996) 26 VUWLR

Territoire alors même que l'Assemblée Territoriale ne se voit reconnaître que le droit d'adopter des délibérations ayant valeur d'actes règlementaires et non de valeur législative.

Aussi, ces délibérations doivent-elles pour être légales être en conformité non seulement avec les principes constitutionnels mais également avec l'ensemble des principes généraux du droit.

Il est clair que le cadre normatif constitué par l'addition de la constitution, des lois et de la jurisprudence est par un mécanisme itératif le reflet d'un schéma de société donné.

On peut craindre, en conséquence, que toute volonté politique consistant à développer des politiques distinctes de celles menées en Métropole dans des matières aussi diverses que le droit foncier, la fiscalité ou la politique de la famille soit rendue aléatoire tant le texte constitutionnel laisse de marge d'interprétation possible aux magistrats du tribunal administratif, du conseil d'Etat et du conseil constitutionnel.

Or, le Pacte de progrès est précisément un projet de société bâti sur des propositions de politiques foncières, fiscales, sociales, familiales… qui se veulent délibérément différentes de celles menées en Métropole.

Je souhaite insister particulièrement sur le fait qu'en faisant ce constat, ce n'est pas l'institution du tribunal administratif qui est mise en cause et encore moins les juges qui y exercent mais l'insuffisante clarté du texte constitutionnel.

En conclusion, il m'apparaît indispensable que le débat sur ce sujet soit porté bien au-delà du seul statut de la Polynésie française à l'échelle de la constitution et pour l'ensemble de l'Outre-Mer français.

BIBLIOGRAPHIE

• Rapports de la 110ème session régionale de l'Institut des hautes études de défense nationale à Papeete. Juin 1992

• Etats Généraux de la Charte de Développement: Conclusion des ateliers de réflexion Octobre 1992

• Rapport du Conseil Economique, Social et Culturel de Polynésie française sur le thème: "Quels choix pour l'avenir de la Polynésie française" Novembre 1992

• Pacte de Progrès économique, social et culturel de la Polynésie française, Propositions de la Délégation polynésienne Janvier 1993

LE PACTE DE PROGRÈS 21

• Propositions de l'Etat pour le Pacte de Progrès économique, social et culturel de la Polynésie français Janvier 1993

• Avis du Conseil Economique et Social sur le projet de loi d'orientation pour le développement économique, social et culturel de la Polynésie française

Novembre 1993

• Loi d'orientation n° 94-99 du 5 février 1994 pour le développement économique, social et culturel de la Polynésie française

PACT OF PROGRESS

The expression Pact for Progress has been used extensively in French Polynesia since 1992 without its exact content being clearly identified. Thus, from a political point of view, the Pact for Progress is today for some the sole hope for the future well-being of French Polynesia and is for others a dead letter.

Three possible definitions of the Pact for Progress can be identified. They are:

• a turning point: The Pact for Progress can be analysed as a turning point in relation to the underlying spirit of the status of French Polynesia which recognises that fundamentally it is for the Polynesian population and their elected representatives to define the social, economic, and cultural environment in which they wish the development of the Territory to take place. The importance of what was at stake for the Territory and the unanimous and powerful support of lively forces that were brought to bear in this matter were the critical elements for its cohesion. French Polynesia experienced in the years 1991-1992 a particularly intense period of reflection and questioning by all the social and political forces of the Territory. Various studies had also provided a particularly clear diagnosis of the strengths and weaknesses of the Polynesian economy and society and it is on the basis of this that the key points for development and reform were established. The outcome of this period of reflection was the production in December 1992 of a document entitled “Proposals of the Polynesian Delegation for a Pact for Progress”.

• a social project: The major factor in the diagnosis for the Pact for Progress was that French Polynesia had been the beneficiary over 25 years of a system of economic development based on transfers from the (Pacific Testing Centre) CEP and even more so (as in the other overseas departments and territories of France) on the rent system created by transfers of State money principally in the form of the remuneration for civil servants which benefits from a big premium relative to metropolitan France. But the combination of a strong demographic increase and a slowing of economic growth resulting from a net reduction in the annual amounts of the State transfers has lead for

22 (1996) 26 VUWLR

almost ten years to a very rapid increase in unemployment which affects almost 20% of the population. In respect to this, the Pact for Progress amounts to a true social project for French Polynesia.

• a reform yet to be concretised: Within the framework of the Pact between the State and the Territory, French Polynesia undertakes on its side to develop its own resources and to undertake reforms, and the State for its part has undertaken to define the manner in which it will support French Polynesia in the profound social changes which will be undertaken to create the economy and society for the period after CEP. It is important from this point of view to emphasise how much the State authorities and the national legislature have done to respect the status of the Territory in the drawing up of the Pact for Progress. In order to concretise the economy in the new Polynesian society, several key conditions must be fulfilled: a reduction in the size of the public service; the putting in place of major structural reforms; the formalising of the financial undertakings of the State in the context of the Pact for Progress; a political and social climate which is relatively calm; legislative regulation to accompany the transformation of the society.

The Pact for Progress is indeed a social project built on the basis of propositions that are political, land-based, fiscal, social, and familial, and which are deliberately different from those followed in metropolitan France such that the discussion on the matter must be pursued well beyond a consideration simply of the status of French Polynesia but also, in the context of the Constitution of France, and taking into consideration all of the French overseas departments and territories.

1

Ref: 01/12/AHA/95

PERSONALITY AND LEGAL CULTURE A.H. Angelo*

The interaction of Maori law and the European based state law of New Zealand has given rise to much discussion and political debate. The contemporary focus has been primarily on the Treaty of Waitangi and the work of the Waitangi Tribunal. Public interest has been attracted by the property aspects of Treaty claims and by their justness, but there has been less public interest in the Maori cultural aspects of claims. In particular the cultural importance of some claims has been masked by concerns about the resource value involved. This paper seeks to redirect attention to an aspect of the Maori cultural meaning involved where claims concern taonga, and it suggests further that coherence of claims settlements may in some cases be advanced by reference to the concept of personality.

Discussion in recent years in New Zealand has focused much on bi-culturalism and, in particular, on the recognition of the quality and status of Maori concepts and values within the European culturally dominated system of government which operates in New Zealand. These discussions have stemmed mainly from the interpretation of the simple but evocative articles of the Treaty of Waitangi of 1840.

The Waitangi Tribunal began its work in 19751, and since then it has progressively raised the New Zealand consciousness of the nature and importance of the different cultural values that exist within New Zealand society. The judiciary, the legislature, and the executive has each in its turn built on the developing cultural perspectives2.

One of the matters that has been considered in the context of article 2 of the Treaty of Waitangi is the concept of taonga.3 It is the purpose of this paper to explore some of the issues involved in relation to taonga to see whether, in the light of the available English * Professor of Law, Victoria University of Wellington, with the research assitance of Carla Angelo, BA.

1 Established by the Treaty of Waitangi Act 1975.

2 See eg Maori Council Case v Attorney-General [1987] 1 NZLR 641, Maori Language Act 1987, and the deed of settlement between Tainui and the Crown which is enshrined in the Waikato Raupatu Claims Settlement Act 1995.

3 The discussion has reached the point where taonga is now part of standard New Zealand English with the particular meaning of “valued possession”.

2 (1996) 26 VUWLR

language data, a possible bridge between the Maori legal system and the Common Law legal system can be built using the notion of personality. The identity and spiritual aspects of significant taonga call to mind notions of personality within European legal culture. The view presented here is (1) that the Common Law would have much greater flexibility for dealing with taonga if some taonga had legal personality, because this characteristic gives the subject rights and duties under the Common Law, and (2) that this legal perception is not incompatible with the nature of taonga in the Maori legal system. Having legal personality would mean that a taonga would itself be involved in any decisions made about it, it would not be a commodity and that it woud be treated as a single entity rather than a collection of related assets.

The first part of this paper is concerned with specific features of taonga, and the second part with the European legal notions of personality. The third part explores the possibility that the attribution of Common Law legal personality to a taonga may be an appropriate manner at Common Law of allocating to taonga some of the qualities which taonga possess in Maori law and thereby provide the possibility of greater similarity of treatment of taonga in the two legal cultures.

I Taonga

1 Definition

Taonga is a word with many meanings. It would appear that it can be translated into English in three main ways. First4 and in its most general form, taonga can be translated as “property”. Second5, “anything highly prized” can be taonga; taonga is often translated as treasures or prized possessions.6

A third7 important aspect of this word is that taonga are not only property or treasures, but that a taonga can also be “a possession of influence, sometimes mental”. Some authors8 have stated that taonga have a spirit and an influence over people though not all 4 H Williams A Dictionary of the Maori Language (7ed, Government Print, New Zealand, 1992, p 381).

5 See Williams above, n4.

6 Eg H Mead “The Nature of Taonga” (1990) Taonga Maori Conference Proceedings; Waitangi Tribunal Mohaka River Report (Brooker & Friend Ltd, Wellington, 1992).

7 E Tregear The Maori-Polynesian Comparative Dictionary (Whitcombe & Tombs, Christchurch, 1897) p 468.

8 Eg see Mead above n6; M Mauss The Gift (Cohen & West Ltd, London, 1970) 9.

PERSONALITY AND LEGAL CULTURE 3

taonga have the same amount of spiritual power.9 This idea of a possession of influence can also be interpreted as something that “allow[s] one to gain the influence he desires”10.

The Treaty of Waitangi11 states that Maori are guaranteed full rights of ownership “of their Lands and Estates Forests Fisheries and other properties”. These other properties are “o ratou taonga katoa” in the Maori version. This phrase can be translated in various ways: Mead12 translates it as “all their valued possessions and customs” because “o ratou taonga katoa” is said to cover both tangible and intangible things; the Waitangi Tribunal in the Kaituna River Report accepted that the phrase meant “all things highly prized”13; another translation renders the phrase as a guarantee of “full rights of ownership of their lands, forests, fisheries and other prized possessions”.14 The lands, forests, rivers and fisheries of article 2 of the Treaty are themselves taonga.

In the main, contemporary understanding suggests that taonga are — physical objects of artistic or cultural value15, forests, rivers16, language17, customs, traditions, rituals, songs18, land, trees, weapons , and perhaps even people19. Taonga can be identified because of their special relationship to people, because of their links to, and the length of, their history and generally because of their value to the culture.

2 Creation and Destruction

It is difficult to describe exactly how something becomes taonga. For example, an object may be regarded as taonga if it belongs to a person who possesses great mana. Objects which are seen to contain history are also given the title taonga. Thus the prestige of a 9 See Mead above n6, 166-167.

10 Eg possessing a taonga like money/wealth may allow someone to influence others (“He tukemata ano to te taonga”), H Mead Nga Pepeha a Nga Tupuna (Dep. Maori Studies, VUW, 1994, v.2, p88).

11 See the Treaty of Waitangi Act 1975, Sched 1. The relevant article is art. 2.

12 Report of the Waitangi Tribunal on the Te Reo Maori Claim (Wai 11) (Brookers, Wellington, 1993) 20.

13 Report of the Waitangi Tribunal on the Kaituna River Claim ((Wai 4) (Government Printing Office, Wellington, 1989) 13) as reported in the Report on the Te Reo Maori (above n12).

14 C Orange The Treaty of Waitangi (Department of Internal Affairs, Wellington, 1992) 1-2.

15 See Taonga Maori (Australian Museum, Sydney, 1989).

16 See Mohaka River Report above n6, 78.

17 Waitangi Tribunal Te Reo Report (Brookers, Wellington, 1986).

18 A Kaeppler “Taonga Maori and the Evolution of the Representation of ‘other’” (1990) Taonga Maori Conference Proceedings, p12.

19 See B Briggs Maori Marriage (Reed, New Zealand, 1960) 36-39; H Mead Nga Pepeha a Nga Tupuna (Department of Maori Studies, Victoria University of Wellington, 1994, vol. 3 p159.

4 (1996) 26 VUWLR

taonga strengthens with its age, the amount of history it possesses, and through its association with people of great mana.

In the case of art objects there is a tapu that surrounds the creation of art because art is seen as a way in which the Gods speak to Maori20. Mead21 states that “Providing korero is an expected part of the process of creating taonga”.22 “Whakairo is the process of transforming something natural into something cultural called a taonga”23. The taonga is imbued with the spirit of the creator.

In the case of land, rivers, forests and other environmental or physical entities, they appear to obtain the title of taonga if they are of historical importance to the tribe, and are seen as important to the survival of humans.24 The responsibility Maori feel to the environment and the special spiritual link that Maori have to the land may also contribute to the designation as taonga. It is the history and the genealogical link that Maori have with the land through Tane that makes the land taonga25.

If an art object is destroyed the taonga itself is destroyed. On a different level taonga can lose status if their historical content is lost. Because Maori history was oral rather than written, if a taonga was taken away from the tribe or removed from New Zealand and no record was maintained, the history of the taonga was lost. Thus, the taonga, while still a taonga, was no longer as prized as it had been.

3 Identification

In some cases taonga are relatively easy to identify. However, in the case of geographical features such as land or rivers the exact boundaries of the taonga may be determined differently by Maori law than by the common law system. The area in which a tribe lives is seen as taonga by that tribe (it is the area with which they identify or with 20 See Taonga Maori above n 15, 45.

21 See Mead above n6, 165-166.

22 See Mead above n6, 166. Korero here refers to the stories and explanations given in relation to the creation of art works.

23 See Mead above n6, 166.

24 See Taonga Maori above n15, 36.

25 For the legends of the creation of heaven and earth and the creation of the first female in human form by Tane, see eg M Orbell The Illustrated Encyclopedia of Maori Myth and Legend (CUP: Christchurch, 1995) 179, and A W Reed Maori Myth and Legend (Reed, Wellington, 1983). The common use of the word whenua for both land and afterbirth should also be noted. “The word whenua is the Maori word for placenta, ..., whenua is also the term used for land, the body of Papatuanuku (mother Earth) ... when a child was born the placenta was buried in a special place where people would not walk over or discover it. This place became spiritual and important to that person”. See Taonga Maori above n15, 40.

PERSONALITY AND LEGAL CULTURE 5

which they are identified).26 Maori have spiritual links to the land and regard themselves are guardians of it. All land, including the plants that grow on it, and all the river (including the water of the river, the fish in the river, the river bed) are taonga27 — “a whole and indivisible entity, not separated into bed, banks, and waters”28.

4 Characteristics of “prized possessions”

A taonga, be it an art object or a geographical feature, can have several main characteristics all or some of which may be apparent at any given time. Mead29 discusses the details of the characteristics. For example, taonga are seen to represent ancestors, to be symbols or identifiers of iwi, and to possess mana or prestige. Many of these characteristics are linked to one another. For instance the characteristic of representing ancestors leads to the taonga gathering mana.

(i) Passing from generation to generation

The Mohaka River Report30 states that an essential characteristic of a taonga is that it is passed down from generation to generation. From this flow other characteristics, such as the gaining in strength of the taonga as it is passed down. The responsibility to care for the taonga is also passed down and its relationship to humans can develop in this way. Taonga are “part of a line of descent which stretches from the most distant past into the most distant future”31. Mead states that “this means that the living descendants are trustees of the taonga by right of whakapapa or genealogical descent”32.

(ii) Taonga as tellers of history

??? play an important part in Maori history by enabling that history to be remembered, told, and passed on. For example, carvings and art objects often contain symbols that tell a story and also, in the case of the environment, history was told in relation to, for instance, what happened on that mountain33.

26 These issues are discussed in the Kaituna River Claim above n 13, 9.

27 See Mohaka River Report above n 6, 11.

28 Mohaka River Report above n 6, 36. This synopsis of the Maori view of the river is cited by the Court of Appeal in Te Runanganui o Te Ika Whenua Inc Society v Attorney-General [1994] 2 NZLR 20, 26.

29 See Mead above n 6.

30 See Mohaka River Report above n 6. 10.

31 See Taonga Maori above n 15, 51.

32 See Mead above n 6, 166.

33 “Tribal history is written over the hills and valleys, the rivers, streams and lakes, and upon the cliffs, rocks and shores”. Taonga Maori above n 15, 38.

6 (1996) 26 VUWLR

(iii) Taonga have strength

“The more generations involved in the handing down the greater the mana (prestige) of the object”.34 Taonga gather strength as they pass from one generation to the next. “Taonga carry with them the mana of the old people”35. According to Kaeppler36 “taonga derive their primary value from their whakapapa and specific histories that connect them with particular ancestors”.

(iv)Representer of ancestors

In some cases, taonga are seen to represent ancestors.37 They are seen to provide a remembrance of those to whom they once belonged (ie remind other generations of their ancestors) and people may shed tears over taonga in remembrance of their ancestors38.

(v) Identifier of the tribe

A taonga may symbolise or be used as an identifier for a tribe39. as is the case with the Mohaka River, which is seen as an identifier by the Ngati Pahauwera. They feel that “without the heritage of the river we are nobody”40 and that the tribe’s “mana is derived from the river”41. The taonga is seen to give Maori their identity, validate existence, order chaos, and help guide their destiny42.

(vi)Taonga and Personality

A taonga may have a personality.43 If a taonga is given a name, and thus its own personal identity, it gains more prestige44. It is also to be noted that objects such as spears 34 See Mead above n 6, 166.

35 See Taonga Maori above n 15, 51.

36 See Kaeppler above n 18, 15.

37 See Taonga Maori above n 15, 45.

38 See Taonga Maori above n 15, 45.

39 See Taonga Maori above n 15, 45.

40 Mohaka River Report, above n6, 19.

41 See Mohaka River Report above n 6, 10 and 18-21.

42 See Taonga Maori above n 15, 17.

43 It is interesting to note that the Declaration of Independence of the Independent Tribes of New Zealand of 1835, the independent state Te Whenua Rangatira “was personified as a rangatira, given the qualities of a traditional kinship leader” (H Levine and M Henare “Mana Maori Motuhake: Maori Self-Determination” (1994) 35 Pacific Viewpoint 193). See also M Henare “There is no Tribal History, only Maori History” paper presented to 1994 NZ Historical Association Conference.

44 Eg a greenstone weapon named Tuhiwai is housed in the Museum of New Zealand.

PERSONALITY AND LEGAL CULTURE 7

and meeting houses are created in the human form. That is to say a spear has a head and a body, as does a meeting house. Entry into a meeting house is replete with symbolism, part of which includes entering the body of the past and being reintegrated with it.

Taonga are treated with great respect45; taonga command respect46 and there is a need “to keep the taonga warm”.47 If, for instance, art objects have been taken from a tribe and are later returned there may be a welcoming ceremony, much like the ceremony a long lost child might receive when it returns home. The fact that taonga may represent ancestors also adds to their personality. Taonga may be embraced or hugged and people may speak to them as if they were human48. Mauss49 comments that the taonga or its spirit is a kind of individual.

(vii) Spirit and spirituality of taonga

Taonga have a spirit (hau) or spiritual power. Mauss suggested further that this power has magical and religious elements.50 He quoted a proverb51 which states that taonga may have the power to destroy those who receive them as gifts if there is a breach of reciprocity. This is collaborated by Best52 who reported that if someone received a gift (taonga) and later sold that taonga to someone else, that person had to give the money or thing for which the taonga was exchanged to the original owner53 of the taonga. Failure to do so would mean that “serious evil would befall” that person and they might even die54.

Kaeppler55 states that “the spiritual dimensions of the taonga — wairua (spirituality) and mana (authority) are the qualities that give them life for Maori people”. For example, rivers are seen to have a spirit, spirituality and mana56. The Mohaka River is seen as 45 See Taonga Maori above n 15, 62.

46 See Mohaka River Report above n 6, 13.

47 See Kaeppler above n 18, 18.

48 See Mead above n 6, 166.

49 See Mauss above n 8, 8-11.

50 See Mauss above n 8, 8-11.

51 Recorded in Sir G Grey and C O Davis Maori Mementos (Williamson & Wilson, Auckland, 1855) 21.

52 E Best “Maori Forest Lore” (1909) 42 Transactions of the New Zealand Institute, 433.

53 The giver of the gift. Mauss comments that the hau or spirit of the taonga may force people to do this. The hau may pursue people who steal taonga.

54 See Best above n 52.

55 See Kaeppler (quoting Mead) above n 18, 15.

56 See Mohaka River Report n 6, 13.

8 (1996) 26 VUWLR

“spiritual in all things”57. Mead notes that it is the spirit of the taonga (which he refers to as taha wairua) that is the major difference between "artifact" and "taonga". He goes on to relate this spirit with the way that taonga and passed fromgeneration to generation; "One of the reasons why there is a high spiritual aspect to some taonga is because they represent an ancestor who is related by whakapapa (genealogy) to a group of descendants”58.

Many stories support the idea that taonga have a spirit. Mead59 states that “many people who visited the Te Maori exhibition said that they could feel the spiritual force of the taonga”. The fact that taonga have a spirit or are affected by tapu is also alluded to in the story of two carvings that were brought to the Museum in Wellington from a burial site. The journey from the home of the carvings to the museum was filled with unexplained accidents. First, the train in which the carvings were travelling was derailed, and then the storeroom where the carvings were kept caught fire. In this type of case, the tapu must be lifted or cleared so that people can interact with the taonga safely, and a church service may be held “to control the awesome powers of the ancestors” whom the taonga represents60. It appears however that some taonga have a greater spirit than others and this depends on the person to whom they belonged, whether they are associated with death, whether their history or whakapapa is known, and factors such as their size61.

A taonga is. It exists. It has a life-force, its own vitality62. This being is not only vital and vibrant but also has a spiritual emanation63 which controls the life of the taonga and In commenting on an early draft of this paper Dr GP Barton QC wrote:

"On reading the sentence to which note 56 refers, I was vividly reminded of an afternoon in Taumarunui 35 years or so ago. I had gone up to brief Titi Tihu, described in the court papers as "an aboriginal Native" in the litigation known as In re the bed of the Wanganui River [1962] NZLR 600, CA. I had spent some hours with Titi Tihu in one of the small rooms in the solicitors office in Taumarunui where I had gone to work fro some weeks. As Titi Tihu was describing to me the way in which Maori viewed the Wanganui River, it became obvoius that he was starting to become very emotionally worked up. He asked if I would excuse him. He said that he wanted to go away for half an hour or so. When he came back, it was apparent that he had recently been in water. He told me, almost shyly, that he had bathed in the Wanganui. He felt that he needed to get right into the spirit of the river. Clearly, for him the Wanganui had "spirit, spirituality and mana".

57 See Mohaka River Report above n 6, 18-19.

58 See Mead above n 6, 166. “For the living relatives the taonga is more than a representation of their ancestor; the figure is their ancestor and woe betide anyone who acts indifferently to their tipuna (ancestor)”.

59 See Mead above n 6, 166.

60 See Mead above n 6, 167.

61 See Mead above n 6, 167-168.

62 Mauri.

63 Hau.

PERSONALITY AND LEGAL CULTURE 9

affects all associated with it64. It is this that Tamati Ranapiri of the Ngati-Raukawa described to Elsdon Best, and it is of this that Mauss spoke in his famous essay The Gift65. The same point is developed in different contexts in the recent papers by O’Connor66 .

On this evidence alone it would appear that in English terms a taonga can have a personality and may be regarded as a person at least for certain purposes. If a Common Law court were to apply Maori law in the context of the exercise of a conflict of laws jurisdiction, it could be expected to recognise important taonga as legal persons and accordingly as the bearers of the rights and duties which attach at Common Law.

64 Best (in Spiritual and Mental Concepts of the Maori (Government Print, New

Zealand, 1986), see pp. 29-30, 34, and 42) states that “the hau of a person, of land, of forests, etc, ... is an intangible quality”, and translates the term hau as a “vital essence, ..., or active life-principle”. He states that the ‘hau of man’ can be defined as “personality plus vital power”. The hau is closely related to the mauri. The mauri is a “life principle” and some authors (Eg Tregear quoted by Best at p29) have translated it as “the soul”. Best preferred to translate mauri as “the activity that moves within us”.

The mauri of a taonga is referred to in the Report of the Waitangi Tribunal on the

Manukau Claim (Wai-8) (Department of Justice, Wellington, 1985) 70: 3. ‘Taonga’ means more than objects of tangible value. A river may be a taonga

as a valuable resource. Its ‘mauri’ or ‘life-force’ is another taonga. We accept the contention of Counsel for the claimants that the mauri of the Waikato River is a taonga of the Waikato tribes. The mauri of the Manukau Harbour is another taonga.

4. The guarantee of possession entails a guarantee of the authority to control that

is to say, of rangatiratanga and mana. 5. Both ‘fisheries’ and ‘taonga’ inherently denote not simply the marine biota but

the associated marine habitat, the waters, reefs and beds. 65 See Mauss above n8, and Best above n 52 at 439. The use of language is reminiscent of Lord Shaw in the Mullick

Case (see below n 79).

66 “The Passage from Magic to Folklore: Death, Magic and Mana Maori in Aotearoa (New Zealand)” in Magie et Fantastique dans le Pacifique (Université Française du Pacifique, Tahiti, 1993); and M O’Connor “Honour the Treaty? Property right and symbolic exchange” (1990) 1 Society and Culture: Economic Perspectives: Proceedings of the Sesquicentennial Conference of the NZ Association of Economists (NZ Association of Economists Incorporated, Wellington, 1990) Vol. 1, 138.

10 (1996) 26 VUWLR

II The common law

In European legal culture conceptualisation is concerned primarily with two matters — persons and things. Persons alone are the subject of rights and duties and have the recognition of law for the enforcement of these rights and duties as such67. Property exists principally as a reflection of the relationships of persons to things and of their rights and obligations in respect of things, be they movable, immovable, tangible or intangible.

Typically, the Common Law identifies persons with natural persons, that is to say human beings, and with groups of persons, whether natural or artificial68. Property is seen as inert, in the sense that its division, use distribution, or destruction are not seen as matters requiring the advice or consent of the property, and as lacking the inherent vitality to influence people or its own existence. An advantage of property is that usually it outlasts the life of the natural person who owns it. The creation of the corporation sole is an example of human endeavour to emulate property in this respect.

The concept of trust, a unique feature of the Common Law, produces some consequences not unlike those of the grant of personality: A trust provides continuity of purpose beyond the limit of a human life, and the property the subject of the trust does, through the trust purposes, exert strong influences on those involved with it. Conceptually, however, even then the law focuses on persons and in particular on those who own the trust property. If a trust is incorporated it is typically the trust board which is incorporated and not the trust property69. Those who own the property are the trustees and the beneficiaries. They own and control property. The property does not exist with its own rights and the power to control others. A person may say “I am my own person”; trust property must say “I am owned by persons”.

These are the common patterns. They are not exclusive of other possibilities — property may have personality and human beings may be property70.

The techniques of the law are general in their use. Fictions are the basic tool, and in identifying the subjects of law the law may confer or withhold personality from living 67 Background data on personality in European law may be found in W Friedmann Legal Theory (3ed, Stevens,

London, 1953) 183-186, 396-412, Salmond on Jurisprudence (11ed, Sweet and Maxwell, London, 1957) Ch. 15, Dias & Hughes Jurisprudence (Butterworths, London, 1957) Ch. 10.

68 Such as a group of companies which themselves have formed a company.

69 See eg Charitable Trusts Act 1957, s 7.

70 And human beings may have no personality eg in English law — outlawry see W S Holdsworth A History of English Law (3 ed, Methuen & Co Ltd, London, 1923) vol III, pp 604-607; in French law — civil death (art 22, Code Civil 1804).

PERSONALITY AND LEGAL CULTURE 11

creatures, inanimate things, land, or ideas, with equal facility71: Slaves have typically been treated as property72; the state is the Crown. The Crown has had attributed to it personality and has thence come to represent the state as a corporation sole73. The French law with its fondation74 and the German law with the Stiftung75, both provide examples of attributing legal personality to property76.

How a person, and particularly a person who is not a human being, interacts with property and other subjects of law is easily arranged. The paradigm is a human being of 71 See generally Salmond on Jurisprudence (Sweet and Maxwell, London, 1966) 72, and Walker Oxford Companion to

Law (OUP, 1980) 951 “Personality”.

In Islam a typical dedication of property in perpetuity for charitable purposes (waqf) runs: “And whereas with the object of attaining nearness to God and reward in the next world and in consideration of the desire to approach God ... I hereby ... transfer and make waqf of [designated property] as a pious donation to God”. God is the person to whom the gift is made.

By way of comparison see Maitland “The Corporation Sole” (1900) 64 LQR 335 where, at 346 in discussing a gift of land to God and the Church of Saint Peter of Westminster, he said: “We observe that God and Saint Peter are impracticable peoples”.

72 See generally A Szakats “Slavery as a social and economic institution in antiquity with special reference to Roman Law” (1975) Prudentia Vol VII No. 1, 33-45; for a more recent example see Sala-Molins Le Code Noir (PUF, Paris, 1987) — article 44 of the Code Noir of 1685 (in force till 1848) settled the matter “Slaves are chattels ...” ie, not land.

73 The locus classicus is Calvin’s Case (1608) 2 State Trials at 624. There, as in the case of the ecclesiastical corporations, the emphasis is on the human being. This however does not correspond exactly with 20th century usage and Commonwealth developments nor explain the synecdoche.

For a contemporary New Zealand discussion see P A Joseph “The Crown as a legal concept (I)” [1993] NZLJ 126.

74 The reference is here to the public use foundation — la fondation d’utilité publique. The grant of personality to property in these cases is government controlled. The personality flows from approval of the establishment of the fondation by the Conseil d’Etat. Such grants are made only for matters of significance and of proven viability.

75 Articles 80-88 BGB. Under German law legal personality may be granted to a rechstfähigen Stiftung or foundation. The foundation is established by an act of foundation which must specify the purpose and property of the foundation, and the grant of Federal or State authorisation. Representation and performing the tasks of the foundation is conducted by a Board (Vorstand). See for further detail, Palandt Burgerliches Gesetzbuch (27 edition, CH Beck’sche Verlagsbuchhandlung, München, 1968) pages 41-44; Staudingers Kommentar zum BGB Volume 1 (11 edition, J Schweißer Verlag, Berlin, 1957) pages 367-401.

The existence and status of the Stiftung was acknowledged in the Common Law in the series of English cases which culminated in the House of Lords’ decision in Carl-Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 2 AC 853.

76 Generally on the French and German practices see de Wulf The Trust and Corresponding Institutions in the Civil Law (Bruylant, Bruxelles, 1965) 156, and Ryan An Introduction to the Civil Law (Law Book Co, Sydney, 1962) 235 and following.

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full age and capacity and his or her agents. There are however natural persons who do not easily interact with the rest of the world77, and in all of these cases the law provides for the interaction with other persons and with property through a committee, a guardian, administrator or trustee, and in the same way the law has enabled artificial legal persons to interact with other members of the community — associations, companies, co-operatives, trade unions and so on which are incorporated, act through directors or boards of management. This model is followed for property which has personality: The Crown, fondations, and Stiftungen all act through managers who involve or are natural human persons.

The potentiality of the model could hardly be more tellingly stated than in the long line of Indian cases relating to Hindu temples and idols. One such case is the decision of the Supreme Court of India in Jogenda Nath v Income Tax Commissioner78 where the question was whether a Hindu deity could be treated as a unit of assessment for income tax purposes. The court surveyed Indian law and commented on Roman law conceptions of personality and the English trust. The conclusion was that the Hindu deity could be treated as a unit of assessment: “It is well established by high authorities that a Hindu idol is a juristic person in whom the dedicated property vests”. Among the high authorities cited was the advice of the Privy Council given by Lord Shaw in Pramatha Nath Mullick v Pradyumna Kumar Mullick79. That case concerned three family idols: the household deity, the deity’s consort, and a sacred stone. It was stated, inter alia —

One of the questions emerging at this point, is as to the nature of such an idol, and the services due thereto. A Hindu idol is, according to long established authority, founded upon the religious customs of the Hindus, and the recognition thereof by Courts of law, a “juristic entity.” It has a juridical status with the power of suing and being sued. Its interests are attended to by the person who has the deity in his charge and who is in law its manager with all the powers which would, in such circumstances, on analogy, be given to the manager of the estate of an infant heir. It is unnecessary to quote the authorities; for this doctrine, thus simply stated, is firmly established.

... 77 Such as infants, and the mentally ill. Women and spouses have at various times also been held to lack full

capacity to exercise their personality in their own right.

78 AIR 1969 SC 1089, 1090.

79 (1925) LR 52 Indian Appeals 245. A recent decision of the English Court of Appeal on a similar point is Bumper Development Corp Ltd v Commissioner of Police [1991] 4 All ER 638. This case concerned a Hindu temple’s claim to an idol.

PERSONALITY AND LEGAL CULTURE 13

It is sufficient to state that the deity is, in short, conceived as a living being and is treated in the same way as the master of the house would be treated by his humble servant.

...

It must be remembered ... that the duties of piety from the time of consecration of the idol are duties to something existing which, though symbolising the Divinity, has in the eye of the law a status as a separate persona. The position and rights of the deity must, in order to work this out both in regard to its preservation, its maintenance and the services to be performed, be in the charge of a human being.

...

But an argument which would reduce a family idol to the position of a mere movable chattel is one to which the Board can give no support.

...

If, in the course of a proper and unassailable administration of the worship of the idol by the shebait, it be thought that a family idol should change its location the will of the idol itself, expressed through his guardian, must be given effect to.

...

Their Lordships are accordingly of opinion that it would be in the interests of all concerned that the idol should appear by a disinterested next friend appointed by the Court.

III Taonga as persons

The conceptual possibility exists within the Common Law system to recognise and to attribute rights and duties to taonga by the grant of legal personality. How may this possibility be realised? The Common Law may recognise personality by prerogative grant from the Sovereign, by the effect of precedent, or by Parliamentary action. The grant of personality to other than human beings is typically, but not necessarily, coincident with incorporation. Incorporation is the usual pattern where there is a need to separate the new person from the groups who form it or to give the new person perpetual life.

There is no doubt the Common Law could recognise taonga as legal persons by its own incremental processes as part of the developing recognition of the role of Maori law within New Zealand. Certainly, the decision in Mullick raises the possibility that the personality

14 (1996) 26 VUWLR

of taonga could be recognised in the New Zealand courts80. It is necessary to recall, however, that Mullick was essentially a conflict of laws decision. The Privy Council’s advice was a recognition of the status conferred on the idol by Hindu law and not a conferral of status by English law. New Zealand cases have, for the most part, shown a reluctance to admit the co-existence of alternative legal systems within New Zealand. Nevertheless, there are indications that recognition of Maori law is possible81. As Maori law is accorded increasing recognition, it is possible to envision the time when New Zealand courts might acknowledge the personality of taonga at Maori law. The taonga would then be recognised as the possessor of personality within New Zealand law in the same manner as if personality had been conferred by the law on a company or an incorporated society.

It is interesting to note the situation in some other Pacific jurisdictions. A recent Cook Islands constitutional amendment provides for the continued operation of Cook Islands customary law in the Cook Islands until extinguished by statute82 A comparable situation exists in Western Samoa where the preamble to the Constitution and recent statute acknowledge the importance in the Western Samoan context of customary law83.

Recognition of taonga as persons within New Zealand common law is possible, but such a process is likely to be slow unless it receives specific impetus from, for instance, a report of the Waitangi Tribunal which linked the ideas either in whole or in part, or by a 80 The Privy Council’s advice in Mullick has been noted in the New Zealand case of Huakina Development Trust v

Waikato Valley Authority [1987] 2 NZLR 188, where Chilwell J termed it “interesting” (197).

81 In this connection, see Te Runanganui o Te Ika Whenua Inc Society v Attorney-General [1994] 2 NZLR 20, 27, where the Court of Appeal states that “in recent years the Courts in various jurisdictions have increasingly recognised the justiciability of the claims of indigenous peoples — ... the New Zealand Courts in a line of cases in which it has been seen, not only that the Treaty of Waitangi has been acquiring some permeating influence in New Zealand law, but also that Treaty rights and Maori customary rights tend to be partly the same in content”. Positive reference to Maori law has been made in decisions such as Public Trustee v Loasby (1908) 27 NZLR 801, In re Tatana (Unreported) A34/81 (18 November 1982), Re Adoption of A [1992] NZFLR 422; and most recently (and in passing) in Awa v Independent News Auckland Ltd (Unreported) 24 August 1994, Hamilton Registry CP 152/92. The Runanganui o Te Ika Whenua case also refers to the “fiduciary duty widely and increasingly recognised as falling on the colonising power” (24).

82 Constitution of the Cook Islands, Part IVB, “Custom”, article 66A, as inserted by the Constitution Amendment (No 17) Act 1994-95 (Act No 36 of 1994-95). Subclause (3) provides that “Until such time as an Act otherwise provides, custom and usage shall have effect as part of the law of the Cook Islands, provided that this subclause shall not apply ... to the extent that it is inconsistent with a provision of this Constitution or of any enactment”.

83 The preamble to the Constitution of the Independent State of Western Samoa 1960 provides that the Independent State of Western Samoa shall be “based on Christian principles and Samoan custom and tradition”. The Village Fono Act 1990 explicitly recognises that Samoan custom is effective law in the villages: “Every Village Fono in the exercise of any power or authority shall exercise the same in accordance with the custom and usage of that village” (section 3(2)).

PERSONALITY AND LEGAL CULTURE 15

piece of legislation which explicitly recognised attributes of personality from which the courts could generalise.

The easiest way to grant personality in state law and one which is both explicit and clear, and runs the least risk of damage or translation84 is by Act of Parliament. Parliament has, by virtue of its supremacy, the possibility of creating personality instantly. It does this by Public or Private Act, and the suitability of one over the other could depend on the taonga in question.

The advantage of a Private Act would be the possibility of its private promotion. A Public Act is however notionally more all-embracing, and is recognised as general and of national impact and consequence. If the taonga is one of national interest, the appropriate Act would be a public general Act. In the case of matters arising from a Treaty claim a well formulated preamble or objects clause would be the best way to set out the particular context in which the statute has evolved and should operate.

The Act itself could be brief. In fact, the simpler the Act the more likely it would be to fulfil the purposes of its enactment. The taonga by its nature carries with it its essence. The sole purpose of an Act would be to declare that in the state law the particular taonga has legal personality. For that it should suffice to identify the taonga involved, to grant it legal personality, and to indicate how the taonga will in State law exercise its rights and perform its duties.

If Parliament later changed its mind and repealed an Act which granted personality at law to a taonga, the legal consequence in the Common Law would be that the taonga would cease to have the legal personality as created by the Act. In Maori law the taonga would still have its status under that law. However the law of the state at least would have lost a bridge to understanding, and the state would be back to the position of having to struggle with the difficulties inherent in regarding taonga simply as items of property.

Once recognised as a person, the critical question is then to address how the new legal entity should protect its interests and perform its duties. For this, it could be assisted by a statutorily established board of management or board of trustees (which may be incorporated or unincorporate) whose role would be to look to the interests of the legal person. Precisely what those interests were and the way in which they should be established in a given case would require advised drafting and reasonably clear identification of the interests of the taonga. Something in the nature of a purpose or objects clause would be needed in the founding document. The phrasing of that clause would dominate the activity of the board and provide authority and justification for its actions. Matters of detail relating to the board of trustees or board of management could 84 Traduttore, traditore.

16 (1996) 26 VUWLR

be dealt with in a statutory schedule, by subordinate legislation, or administratively, using the great range of precedents on statutory bodies available to suggest different ways in which management matters could be settled.

Historically many groups may have interacted with a given taonga and had their daily lives and their interactions with others influenced by it. Where a taonga affected the lives of several different groups, they may all have participated in its management or stewardship. For such cases it would be possible to replicate the cultural model of interaction between interested groups and the taonga in the identification of the board of management or trustees by which the taonga would act.

The interaction of the taonga with other persons and with other interests would follow in accordance with the general principles of law and the legislation that impacts on all persons. In the event that there were specific statutory provisions which needed to be taken into account in the life of the taonga, those matters could be addressed in the usual way in any founding statute or by way of delegated legislation85.

IV Conclusion

Both Western European legal culture and Maori law provide special treatment for features of social or political life that are exceptional and worthy of special respect and protection. The recognition or grant of personality is an important way to acknowledge this special treatment. Personality is recognised in aspects of life that are out of the ordinary, whose meaningfulness is not limited to the natural life span of a single human being, and whose identity is worth maintaining. It may be inappropriate to negotiate about taonga in Western European legal terms; if it is appropriate to do so, or if doing so is unavoidable, then reference to the concept of personality may be helpful. The advantage of the use of personality is that the taonga would be regarded as different from property, that there would be legal recognition of the continuity of management, and that the focus would shift from humans and their interests to the character, attributes and spirit of the taonga. This shift of focus is important in that it would provide clear recognition by the state that something more than a simple object or geographical feature and competing humans is involved. The personality of the taonga would be made to transcend any human rivalries and any stark property analysis.

Article 2 of the Treaty of Waitangi confirms and guarantees to Maori specified and exclusive rights. These include the stewardship of taonga. It is submitted that the recognition or grant of personality to significant taonga would support these rights.

85 Or, eg by codes of practice. Further various formulas are used regularly by Parliament to exclude the operation

of other statutes (Notwithstanding any other law ...), or for subordinating functions (Subject to sections --- of the --- Act ...), or for consistency with other law (eg in accordance with the principles of the Treaty of Waitangi).