Page 1 of 143
Introduction to Conflicts...... 4
Conflict of Laws Theories...... 5
Approaches to Conflicts of Laws ...... 5
Principle of Territoriality...... 5
Comity...... 5
Vested Rights ...... 5
Local Law Theory...... 6
Governmental Interest Analysis ...... 6
Conflicts and the Constitution...... 6
Public Policy, Public Law Claims...... 10
Stringam v. Dubois (1992) (AB CA) ...... 18
Re: Sefel Geophysical (1989) (AB QB) ...... 19
Domicile and Residence...... 19
Domicile...... 19
Residence...... 20
Part Two: Jurisdiction...... 21
Parties to an Action (Standing to Sue) – a “juristic entity”...... 21
Assumption of Jurisdiction: The Existence of Jurisdiction or Jurisdiction Simpliciter.23
Parties within the Jurisdiction...... 23
Parties outside the jurisdiction...... 24
Forum Non Conveniens: Discretion to Decline Jurisdiction...... 34
English Position in Transition...... 34
Modern Canadian Position...... 38
Part Three: Recognition and Enforcement of Extra-Territorial In personam Judgments45
Common Law Enforcement – Pre Morguard...... 46
FACTS...... 46
Jurisdiction of the Foreign Court in an International Sense – Requirement that it be within a foreign court’s jurisdiction 47
Schibsby case (1870)...... 47
FACTS...... 48
Defend on the merits = submission...... 49
FACTS...... 49
ON, but CL position...... 49
FACTS...... 49
The Morguard Rule...... 50
Life has never been the same in conflicts or constitutional law...... 51
FACTS...... 51
HELD...... 51
REASONING / RATIO...... 51
POST-MORGUARD CASES...... 53
FACTS...... 54
ISSUE ...... 54
HELD...... 54
REASONING / RATIO...... 54
NOTES...... 55
Default judgment against D...... 55
BC Ct applying Morguard ...... 55
Common law defences (or circumstances of non-enforcement) to enforcement of foreign or extra-territorial judgments 57
Defence of Fraud...... 57
Defence of Natural Justice...... 57
Non-pecuniary judgments...... 59
Hunt...... 59
NOTES...... 59
FACTS...... 60
HELD / REASONING...... 60
RATIO...... 60
Statutory Enforcement...... 60
Court Order Enforcement Act...... 61
Enforcement of Canadian Judgements and Decrees Act...... 61
Cases reviewing the statutory topic after Morguard...... 62
Choice of Law...... 64
Choice of Law Methodology...... 64
When is a foreign law to be applied? ...... 64
Which foreign law applies?...... 65
Characterization ...... 65
Problems with the Mechanical/Classical Approach...... 66
Invoking and Determining Foreign Law...... 68
What is the foreign law?...... 68
Amosin v. The Ship “Mercury Bell” (1986) (FCA)...... 68
Hunt v. T and N Plc (1993)...... 69
Law of Procedure...... 69
Tolofson v. Jensen (1994) (SCC)...... 69
International Exception:...... 71
Somers v. Fournier (2002) (ON CA)...... 71
International Assn. of Science and Technology v. Hamza (1995) (AB CA)...... 75
Gathering Evidence and Compellability of Witnesses...... 75
Part Five: Torts...... 77
General/Historical...... 77
Trends in US + Australia + other Commonwealth ...... 78
The Current Position – Canada...... 78
International Exception:...... 80
Somers v. Fournier (2002) (ON CA)...... 80
Part Six: Contracts...... 83
The Proper Law...... 83
Vita Foods v. Unus Shipping Co. (1939) (PC)...... 84
Star Texas (1993) (Eng. CA)...... 86
Imperial Life Assurance Co. v. Colmenares (1967) (SCC)...... 87
Amin Rasheed Shipping v. Kuwait Insurance (1984) (HoL)...... 88
Mandatory Legislation and Illegality of Contract...... 88
Nike Infomatic v. Avac Systems (1979) (BC)...... 88
Law Other than the Proper Law...... 89
ISSUE...... 90
HELD...... 90
RATIO...... 90
Greenshields v. Johnston (1981) (AB CA)...... 90
Avenue Properties v. First City (1986) (BCCA)...... 91
If Illegal Under Where the Contract was Done...... 92
Gillespie Management v. Terrace Properties (1989) (BCCA)...... 93
Part Seven: Property...... 94
FACTS...... 94
ISSUE...... 94
HELD / REASONING / RATIO...... 94
NOTES...... 94
From here, property already classified as immoveable...... 95
Issues...... 95
How far to extend the Mocambique lex situs rule?...... 96
Granting of patent...... 96
Copyright...... 96
FACTS...... 97
REASONING...... 97
FACTS...... 98
RATIO...... 98
Ward v Coffin...... 98
FACTS...... 100
RATIO...... 100
Chapman Estate v O’Hara Case...... 101
Issue: would Sask re hear case?...... 101
Issue: Bigger question was should Manitoba court have taken juris? ...... 101
Case where Interlocutory order of Quebec was enforced in BC...... 102
Page 1 of 143
Introduction to Conflicts
Conflict of laws is the area of law that resolves disputes containing a “foreign element.”
Three broad areas:
Jurisdiction
Jurisdiction simpliciter
-the authority for a court to accept jurisdiction
-determined by legislation or Rules of Court or forum
-largely a question of civil procedure: Does the court of the particular jurisdiction have authority to deal with the matter
-one must look to an interpretation of the rules of court to see if it falls within the jurisdiction of the court
Jurisdiction forum non conveniens
-Over the parties of the dispute
-Over the subject matter of the dispute
-this extends beyond civil procedure – beyond establishing jurisdiction simpliciter
-it asks whether the court _should_ hear the case, or if there is a more appropriate jurisdiction that should hear the case; matter of discretion
-this is an issue with anti-suit injunctions – injunctions in one jurisdiction barring someone from starting a court action in another jurisdiction
Choice of Law
If there is jurisdiction, and if the forum is the most appropriate jurisdiction, which law should apply? Options:
Lex fori – law of the forum (the area where the case is being decided). Usually lex fori is used for procedural matters; but sometimes it’s difficult to determine what is a procedural matter.
Lex loci delicti – law of the place of the wrong or infringement
Lex situs – Law of the location of the subject matter, e.g., a debtor or property (not so easy to determine for intangibles like copyrights)
Lex causae – The legal system that governs a dispute
The above is used to determine procedural and substantive issues.
Recognition and Enforcement of Foreign Judgments
The trend of conflicts has changed considerably in the last few decades, from non-recognition, to full faith and credit to judgments of foreign courts (the USA in particular). This is subject to concerns such as public policy.
Conflict of Laws Theories
Approaches to Conflicts of Laws
Public international law deals with international rules that are designed to deal with states whereas conflicts rules are domestic court rules that regulate private individuals in cases with an international element
Principle of Territoriality
General rule: every nation possess as exclusive sovereignty and jurisdiction within its own territory
Effect: rules of the state are binding on all property, people, and contracts made within its territory (specific geographic location)
BUT no state can directly affect or bind property beyond its territory, or non-residents (can be supreme within BC, but problem if try to move outside of BC)
How to reconcile territoriality and the application of foreign law: (Ted says none really work)
Comity
General rule: recognition of foreign law depends on comity the law of no country can have effect as law beyond it’s own territory unless by permission of another state
Comity:deference to foreign laws seen as an attempt to promote international harmony by accommodating the views of a foreign sovereign in the expectation of receiving reciprocal treatment- principle of enlightened self-interest
Doctrine criticized for being too vague and discretionary to explain the mandatory application of foreign law
Vested Rights
All rights must be created by some law
A right having been created by the appropriate law, the recognition of its existence should follow everywhere (where the right arose, this should follow the individual around)
There is no exception from territorial law, instead local law simply recognizes that a right has become vested in an individual under the foreign law at the time when the individual was subject to the foreign law.
Emphasized the individual’s entitlement to his vested right rather than the courts’ politeness or concession to foreign sovereigns
Unlike comity, this explains the mandatory nature of conflict of laws; courts have no discretion in recognizing vested rights
However, this theory is criticized – doesn’t explain why some foreign rights become vested while others do not
Local Law Theory
The forum incorporates foreign law, and is then able to apply it as domestic law
Allows the conclusion that the court only enforces rights created by its own law – what you are really doing isn’t applying foreign law, just making domestic law like foreign law
Governmental Interest Analysis
Argues that we would be better off without choice of law rules
Suggest a method to follow: normally apply domestic law (even where there is a foreign element), consider the policy of the domestic and foreign laws:
Apply the foreign law where the forum state has no interest in the application of its policy but the foreign state does.
Where both states have an interest (or the foreign state has no interest), should apply the law of the forum state.
In line with modern theories that see conflict of laws as having to do with the familiar CL task of deciding the appropriate scope of any rule given its underlying rationale or purpose
Courts consider whether the local law, which has been developed to respond to local situations, ought to be modified in light of a foreign element
Courts should consider the underlying policy or purpose the law is meant to serve and then ask whether the law should be applied
Two variants of governmental interest analysis
(a)“Most closely connected” Proper Law
-Approach that continues to see the choice of law as a separate set of rules, but rules that are open-textured or indeterminate
-Almost all the formal rules look the same since each legal category is said to be governed by its proper law. However in determining the proper law to govern a particular issue, courts are urged to choose the law with which the issue is most closely connected
-i.e. similarity between proper law and governmental interest analysis
-Approach has been adopted in intl conventions (Hague Conference on Private IL, 1984)
(b)“Principles of restraint” on local law intended to further intl goals
-Composed of various attempts to combine an analysis of the purposes of domestic laws with some principles of restraint intended to further intl goals
-E.g. intl pressure of the need to live in the world ensures a high degree of similarity among the many territorial systems of PIL
Judges often fall back on comity – conceptual analysis doesn’t significantly take into account govt interests. Real emphasis on limits in terms of rules that one can apply.
Conflicts and the Constitution
Unlike other countries, no express provision of “full faith and credit” in the Canadian constitution.
s. 129 of the Constitution Act – continued in force all laws in the colony at the time of joining the confederation until such time as they should be repealed, abolished, or altered by the appropriate legislature under the new federal system of government (this is where we get our conflict rules from)
s. 92 of the Constitution Act – gives provinces authority over property and civil rights in the province (but not outside the province – the clause has the effect of a territorial limitation on provincial legislative competence)
Issue then is the situs of property – courts have used conflict rules to determine whether the province had the power to tax or regulate
King v. National Trust Co (SCC) – Property can only have one location in Canada for the purposes of the imposition of direct taxation by provincial legislatures
Historically, each province was treated as a foreign country using English conflict of laws rules. Commentators have asked: why has Canada followed and applied English principles (a unitary state) in a federation? Morguard changed this.
Churchill Falls (SCC) – Leading constitutional case dealing with extraterritoriality,
Looks at the ability of a province to legislate on matters that may be within the province but might also have consequences external to the province. Also, the case is an examination of the location of civil rights.
The court examined two conflicting lines of authority and concluded that where the pith and substance (P&S) of a provincial enactment is in relation to matters that fall within the field of provincial legislative competence, incidental or consequential effects on extra-provincial rights will not render the enactment ultra vires.
However, beware of colourability. Where the P&S of the enactment is the derogation from or elimination of extra-provincial rights, even if cloaked in proper constitutional form, the court will find it to be ultra vires.
Williams (SCC) – Indian Act, conflict of laws rules don’t automatically apply
Usually courts use conflict of laws rules to determine where something occurred, or where rights were situated, but this is not a hard and fast rule per this case.
The appellant was owed money from the Gov’t. CoL rules would say the situs of the debtor was off the reserve, thus making the payment not exempt from taxation under the Indian Act.
Court held that while CoL rules are normally OK, they were not in this case. One had to inquire as to the utility for the purposes underlying the exemption from tax in the Indian Act. Court said it was dealing with a different context which will necessarily bring about different policy considerations that don’t come up with debtors or even employers.
Note, unlike Churchill Falls which was highly focused on location of rights, Williams was a little more removed from the regular conflicts situation.
The point: CoL rules are subject to constitutional scrutiny whether the rules are common law or in statutory form.
Morguard (SCC) – Important breakthrough, court employed federalism principles to create new rule for recognition and enforcement of judgments interprovincially. The rule was expressly stated to be a CL rule as the case was not argued in constitutional terms, but the nature of the discussion was such that it provoked speculation as to its constitutional status.
The case involved recognition by courts in one province to a judgment of courts in another province, in a personal action brought to the latter province at a time when the defendant did not live there. (Normally, the historical rule required a defendant in such circumstances to either agree to have that province’s law apply, or to be served in that jurisdiction. That did not occur here.)
The court holds that while there is no “full faith and credit” clause express in our constitution, various factors make such a clause unnecessary. The court lists various factors such as the fact that judges are federally appointed and paid (consistency in judgments), that all provinces are subject to the SCC as a final court, that Canadian lawyers all adhere to the same code of ethics, and so on. The court suggests that the obvious intention of the Constitution is to create a single country. The court concludes that the historical rules about comity must be shaped to conform to the federal structure of the Constitution.
The court does acknowledge a limitation to “full faith and credit.” The courts of one province should recognize a judgment by another province only if that court has properly or appropriately exercised jurisdiction in the action. There must be fair process as well (not an issue interprovincially, but perhaps internationally).
The test is whether there is a real and substantial connection (RSC) between the petitioner and the country/territory exercising jurisdiction. If there is, the other provinces must respect the judgment.
Note: Does this mean jurisdiction simpliciter only or forum non conveniens as well? Unclear in judgment, case suggests mostly jurisdiction simpliciter.
Also: Recall that jurisdiction simpliciter is largely a question of civil procedure. But even if civil procedure rules give jurisdiction, if the rules are worded too broadly and can be read where there is no RSC, then it will not be allowed constitutionally. “In the case of service outside the issuing province, service ex juris must measure up to constitutional rules.”
In applying the test to the case, the court found RSC. Reasonable for the action to take place in the latter province because it regarded a land dispute of land located in that province. RSC between the damages suffered and the jurisdiction.
This case left open a question – was the reasoning constitutional in nature (meaning the law created only applies interprovincially)? Subsequent case law is mixed on this point.
Beals (SCC) – The RSC test from Morguard “which has until now only been applied to interprovincial judgments, should apply equally to the recognition and enforcement of foreign judgments”
However, a dissent from LeBel in this case states that the RSC test must be modified significantly in that the assessment of the propriety of the foreign court’s jurisdiction should take into account the additional hardship imposed on a defendant who is required to litigate in a foreign country. Broadly put, assumption of jurisdiction shouldn’t be accepted if it was unfair to the defendant.
Basically, LeBel asks one to weigh the hardship to the defendant against the connection to the forum and the proceeding, the fairness of the proceeding, etc.
He went on to say that comity isn’t an absolute principle. It is stronger interprovincially because of constitutional and practical requirements, but not between other countries.
Hunt (SCC) – Constitutional inapplicability of provincial legislation designed solely to derogate extra-provincial rights.
A Quebec Act prohibited compliance with demands for discovery of documents by courts of other jurisdictions. The effect was that it was impossible to sue Quebec residents outside of Quebec unless one proceeded without the right of discovery (winning is impossible in that case).
The law had no effect in Quebec; it was designed solely to derogate extra-provincial rights.
Court applied Morguard, stating that courts should give full faith and credit to judgments, including court orders, of the courts of sister provinces. This respects principles of order and fairness as required by Morguard. It is beyond the power of the provincial legislature to override the structure of the federal country – it must respect the constitutional standard of order and fairness.
Fed Parliament has power to legislate respecting the recognition and enforcement of judgments. This is related to the powers contained in the POGG clause.
Subject to these overriding powers, provinces can legislate, subject to:
Principles in Morguard and
The demands of territoriality as expounded in Churchill Falls
Given the above, the court held the Act was “constitutionally inapplicable” to other provinces. Interesting that it was constitutionally inapplicable and not ultra vires – leaves open the possibility of the Act being valid when applied internationally to “true” foreigners. Perhaps internationally a province can legislate, whereas in an interprovincial case they cannot.
Tolofson (SCC) – choice of law case: lex loci delicti (law of the place of the wrong) for tort action