The Rule in Antony Gibbs (‘the Rule’) provides that if the proper law of a contract is Australian, then a discharge of the debt by a foreign jurisdiction will not be a discharge in Australia unless the creditor submitted to the foreign jurisdiction. The Rule is much maligned, especially in insolvency circles, and has been described as “Victorian”. In ‘Heritage and Vitality: Whether Antony Gibbs is a Presumption’ I seek to defend the Rule.
The article begins by arguing that, in the modern context, that the Rule should be recognised as a Presumption as to party intentions.
Briefly, Gibbs was decided in the 1890s. At the time, the prevailing view was that the proper law of a contract was either the law of the place of the contract or its performance. This approach was based on apportioning regulatory authority between sovereign States rather than party intentions. To apply a foreign proper law in a territory was regarded as contrary to territorial sovereignty. Freedom of contract and party intentions were becoming relevant to proper law but only to a limited extent.
As for Gibbs, Lord Esher’s language is consistent with the ‘Regulatory Approach’: