Choice of Law
advertisement
Page 1 of 101 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 Huntington v. Attrill (1893) (PC) ............................................................................. 16 USA v. Harden (1963) (SCC) ................................................................................... 17 Stringam v. Dubois (1992) (AB CA) ........................................................................ 18 Re: Sefel Geophysical (1989) (AB QB) ................................................................... 18 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... 22 Parties within the Jurisdiction ....................................................................................... 22 Parties outside the jurisdiction ...................................................................................... 24 Forum Non Conveniens: Discretion to Decline Jurisdiction ........................................... 34 English Position in Transition....................................................................................... 34 Modern Canadian Position ............................................................................................ 38 Discretion as to the exercise of territorial competence – CJA s. 11 ............................. 38 Part Three: Recognition and Enforcement of Extra-Territorial In personam Judgments 44 Common Law Enforcement – Pre Morguard................................................................ 45 FACTS .................................................................................................................. 45 Jurisdiction of the Foreign Court in an International Sense – Requirement that it be within a foreign court’s jurisdiction .............................................................................. 46 Schibsby case (1870) .................................................................................... 46 FACTS .................................................................................................................. 47 Defend on the merits = submission............................................................... 48 FACTS .................................................................................................................. 48 ON, but CL position ...................................................................................... 49 FACTS .................................................................................................................. 49 The Morguard Rule ....................................................................................................... 49 Life has never been the same in conflicts or constitutional law ................... 50 FACTS .................................................................................................................. 50 HELD .................................................................................................................... 50 REASONING / RATIO ........................................................................................ 50 POST-MORGUARD CASES ...................................................................................... 52 FACTS .................................................................................................................. 53 ISSUE ................................................................................................................... 53 HELD .................................................................................................................... 53 Page 2 of 101 REASONING / RATIO ........................................................................................ 53 NOTES .................................................................................................................. 54 Default judgment against D .......................................................................................... 54 BC Ct applying Morguard ............................................................................................ 54 Common law defences (or circumstances of non-enforcement) to enforcement of foreign or extra-territorial judgments............................................................................ 56 Defence of Fraud............................................................................................... 56 Defence of Natural Justice ................................................................................ 57 Non-pecuniary judgments ............................................................................................. 58 Hunt........................................................................................................................... 58 NOTES .................................................................................................................. 58 FACTS .................................................................................................................. 59 HELD / REASONING .......................................................................................... 59 RATIO .................................................................................................................. 59 Statutory Enforcement .................................................................................................. 59 Court Order Enforcement Act ................................................................................... 60 Enforcement of Canadian Judgements and Decrees Act .......................................... 60 Cases reviewing the statutory topic after Morguard ..................................................... 62 Choice of Law ................................................................................................................... 63 Choice of Law Methodology ........................................................................................ 63 When is a foreign law to be applied? ............................................................................ 63 Which foreign law applies? .......................................................................................... 64 Characterization .................................................................................................. 64 Problems with the Mechanical/Classical Approach ................................................. 65 Invoking and Determining Foreign Law....................................................................... 66 What is the foreign law? ............................................................................................... 66 Amosin v. The Ship “Mercury Bell” (1986) (FCA) ................................. 67 Hunt v. T and N Plc (1993) ....................................................................................... 68 Law of Procedure .......................................................................................................... 68 Tolofson v. Jensen (1994) (SCC).............................................................................. 68 International Exception: ................................................................................................ 70 Somers v. Fournier (2002) (ON CA) ........................................................................ 70 International Assn. of Science and Technology v. Hamza (1995) (AB CA) ............ 73 Gathering Evidence and Compellability of Witnesses .......................... 74 Blocking Legislation ................................................................................................. 75 Part Five: Torts ................................................................................................................ 76 General/Historical ......................................................................................................... 76 Trends in US + Australia + other Commonwealth ............................................... 77 The Current Position – Canada ..................................................................................... 77 Tolofson v. Jensen (1994) (SCC).............................................................................. 77 International Exception: ................................................................................................ 79 Somers v. Fournier (2002) (ON CA) ........................................................................ 79 Part Six: Contracts ........................................................................................................... 81 The Proper Law............................................................................................................. 81 Vita Foods v. Unus Shipping Co. (1939) (PC) ......................................................... 82 Star Texas (1993) (Eng. CA) ................................................................................. 84 Page 3 of 101 Imperial Life Assurance Co. v. Colmenares (1967) (SCC) ................................. 85 Amin Rasheed Shipping v. Kuwait Insurance (1984) (HoL) ............................. 86 Mandatory Legislation and Illegality of Contract ......................................................... 86 Nike Infomatic v. Avac Systems (1979) (BC) .......................................................... 86 Law Other than the Proper Law .................................................................................... 87 ISSUE ................................................................................................................... 88 HELD .................................................................................................................... 88 RATIO .................................................................................................................. 88 Greenshields v. Johnston (1981) (AB CA) ............................................................... 89 Avenue Properties v. First City (1986) (BCCA) ...................................................... 89 If Illegal Under Where the Contract was Done ........................................................ 90 Gillespie Management v. Terrace Properties (1989) (BCCA).................................. 91 Part Seven: Property ........................................................................................................ 92 FACTS .................................................................................................................. 92 ISSUE ................................................................................................................... 92 HELD / REASONING / RATIO .......................................................................... 92 NOTES .................................................................................................................. 92 From here, property already classified as immoveable ........................................ 92 Issues ............................................................................................................................. 93 How far to extend the Mocambique lex situs rule? ...................................... 94 Granting of patent ........................................................................................................ 94 Copyright ...................................................................................................................... 94 FACTS .................................................................................................................. 95 REASONING ....................................................................................................... 95 FACTS .................................................................................................................. 96 RATIO .................................................................................................................. 96 Ward v Coffin ................................................................................................... 96 FACTS .................................................................................................................. 98 RATIO .................................................................................................................. 98 Chapman Estate v O’Hara Case ........................................................................ 99 Issue: would Sask re hear case? ............................................................................ 99 Issue: Bigger question was should Manitoba court have taken juris? .......................... 99 Case where Interlocutory order of Quebec was enforced in BC ................................ 100 Page 4 of 101 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 Page 5 of 101 The trend of conflicts has changed considerably in the last few decades, from nonrecognition, 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 Page 6 of 101 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 Page 7 of 101 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 extraprovincial 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. Page 8 of 101 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 Page 9 of 101 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. Page 10 of 101 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 This case involved two BC drivers getting into an accident in Saskatchewan. The court does away with the double actionability rule – an old UK rule requiring that for something to be actionable, it has to be a wrong in the place it occurred and it has to be a wrong in the place where the forum was brought. Instead, the court states that lex loci delicti must apply. As for interprovincial situations, the majority said this is an absolute rule. Such an approach has the advantage of unquestionable conformity with the Constitution (no territoriality issues – province can only regulate rights within the province). Note: This was not argued in constitutional terms – leaves open the possibility of a provincial legislature enacting a choice of law option. Quebec for instance has this – two Quebec residents getting into an accident = Quebec law applies, foreign law used an in operational sense to determine standard of care. As this was a SCC case, courts below are bound by the decision. Public Policy, Public Law Claims Comes up in two circumstances: choice of law and enforcement of extra territorial judgments. The general rule is that public policy and public law are pled as exceptions to the application of foreign law. I.e., public policy does not create a choice of law. USA v. Ivey (ONCA) The case offers an introduction to the reasons for judicial application of public policy/public law exceptions. Penal Law Page 11 of 101 Canadian courts will not enforce penal laws of other jurisdictions. To do so would extend jurisdiction of that other state beyond its borders. However, it is not always clear whether something is a penal law or not. For example, in Ivey, the USA was seeking the costs to clean up environmental damage caused by the defendant. The court saw this as reimbursement for an expense incurred, not a tax, and not something imposed to punish the defendant. Revenue Law Canadian courts will not enforce revenue (tax) laws of other jurisdictions. In Ivey, while the nature of the law was not precisely defined, it was not made to raise money for government, but rather was for reimbursement for environmental damage. Other Public Law/Public Policy This category is a “murky” area of the law that has yet to receive full recognition in Canada. One argument was raised in this area: The defendant argued that the severity of the US legislation as compared to the Ontario legislation should render the decision based on the Michigan legislation unenforceable would be against Ontario public policy Murky area - established to some measure in certain jurisdictions, but hasn’t got full recognition Held: Court notes that the remedies required in the Michigan legislation were not that different from what was required under Ontario legislation. It is not enough that the local law on the same point differs from the foreign law, fundamental values must be at stake (more than just a mere difference in policy) Disparity between the two regimes was not sufficient to meet the public policy test Similarities far outnumbered the differences between the two legislations Comment: A substantial similarity in the legal policies of the lex fori and the foreign lex causae defeats any possible application of the public policy exception. But a substantial dissimilarity isn’t sufficient for the public policy defense either. Natural Justice: argued that enforcing the judgment would violate natural justice. This category is distinct from the other defenses because, unlike the other defenses, NJ is based on the fairness of the procedure rather than the substantive character of the foreign laws. A lack of natural justice is a defence to the recognition and enforcement of a foreign judgment Granting judgment without any notice to the defendant or a complete lack of opportunity to defend yourself could = breach of natural justice Held: the rules of liability and burden of proof are matters for the foreign jurisdiction, there is no authority for non-enforcement of a judgment merely because it is rendered on the basis of strict statutory liability. Requires a fundamental deviation from forum natural justice values it is insufficient to show simply that the forum and foreign procedures diverge (See Beals) Page 12 of 101 Comment from Beals: American jury awards are way higher than in Canada. Quantum itself isn’t a bar to enforcement, but, overlapping between public policy and natural justice, is an argument that if the quantum is arbitrarily imposed or arbitrary in quantum then it may succeed as a defense Court notes that natural justice exists in theory, but has rarely been successfully utilized in Canada. Cites Beals v. Saldana: Majority: held that natural justice was not applicable Dissent: supported the non-enforcement of the decision based on the lack of natural justice had not had proper notice of the case (used natural justice as one reason why they would not enforce the award) Held: All of Ivey’s arguments failed enforcement of the Michigan decision was allowed Kuwait Airways v. Iraqi Airways (HoL) Iraqis seized Kuwaiti airplanes and flew them back to Baghdad during the Gulf War. Kuwaitis now wanted them back and sued for conversion. In order to be actionable for conversion under British law, it had to be actionable under both jurisdictions. But at the time, Iraq had a law that said the theft was OK and so Iraqi Airways pled this as a defence. Kuwaiti Airways argued that the law shouldn’t apply because of the public policy exception. Argument: Iraqi Airways argued that this is the only time that public policy will prevail is if there is a gross violation of human rights Court held that gross violations of human rights would certainly allow public policy to prevail, but rejected this as the only grounds to trigger public policy Argument: Iraqi Airways argued that if expropriation was in violation of public international law, this was not in itself inconsistent with public policy HoL accepted that argument: test is not whether there is a breach of public international law. However, such a breach is a consideration. However: Importance of context: Public policy to be determined by contemporary standards in the context of the Gulf War. HoL wants to give effect to clearly established rules of int’l law to reflect the increasing interdependency of states. International law violation by the Iraqis in invading Kuwait – this war would not be recognized by the UK “Enforcement or recognition of this law would be manifestly contrary to the public policy of English law… (English law had incorporated the dimensions of the relevant Int’l law into its own regime) it would sit uneasily with the almost universal condemnation of Iraq's behaviour and with the military action, in which this country participated, taken against Iraq to compel its withdrawal from Kuwait.” Comment: If had been straight up expropriation within its territory minus the war, you would get a different result Page 13 of 101 Old North State Brewing Co. (BCCA) A foreign jurisdiction awarded treble damages. Was this penal in nature? No. Such an award was comparable to exemplary damages as applied by Canadian courts. Just because a judgment of another jurisdiction is harsher doesn’t mean it cannot be enforced. Because of the similarity to exemplary damages, it cannot be said that enforcement would be contrary to the essential or moral interests of Canada. An Abstract or Relative Standard? There are cases where the public policy argument is simply that the substantive content of the foreign provision is so “morally repugnant” to forum community standards as to justify rejection in the abstract – regardless of the relative degree of connection of the parties and the events to the forum. This applies only to exceptional cases such as laws permitting slavery, sale of noxious drugs for recreational purposes, etc. Usually, one must consider the “application” of the law in the concrete circumstances or, in the case of a foreign judgment, the “outcome” of recognition or enforcement as against the particular defendant on the particular facts. (Carter) Boardwalk Regency v. Marouf (ONCA) Facts: Gambling debt incurred in New Jersey by an Ontario resident. Casino obtained a default judgment in New Jersey and sought to enforce the judgment against Marouf in Ontario. Ontario statute provided that gambling contracts were rendered void and unenforceable. OCA and lower court recognized that the proper law of the contract was New Jersey law. However, the Ontario statute did not have extraterritorial application – didn’t say that contracts made outside of Ontario were void (only applied to gambling contracts in Ontario). Thus, gambling contracts in NJ not covered by the Ontario statute. Issue: whether the enforcement of the gambling contract was contrary to the public policy of Ontario. Rule: If you incur gambling debts in other jurisdictions, they can be enforced against you in Canada Held: Public policy argument rejected – gambling contract enforced. Court noted that both Ontario and NJ regulated gambling and gambling debts – determined that the non-enforcement of gambling contracts can’t be against public policy Must be more than the morality of some people and run through the moral fabric of society Society of Lloyd’s case (ONCA) Facts: Lloyds Insurance “names” those folks who provide the money to back up the insurance claims that can be made against Lloyds through very odd contractual arrangements. The contracts allow for the Lloyds syndicate to call on letters of credit that are placed at the disposal of the syndicate by the “names”. Insurance industry hits bad times. UK judgments came down requiring “names” to pay up. Page 14 of 101 Saunders has to pay up to his letter of credit, but wants to get out. Agreements between Lloyds and the “names” were solicited in Ontario, but the solicitation did not comply with the relevant Ontario securities regulations. Contracts in question had a choice of forum clause and a choice of law clause: England. Also, the contracts were signed in England. Key fact: there had been a case brought in Ontario by the names against Lloyds and the OCA had stayed that case the choice of forum and choice of law clause meant that the proceedings should properly be held in the UK. Argument: Saunders argues that the UK judgment should not be enforced in Canada because it would be against public policy Reasoning: court reviews cases trend of jurisprudence is that the public policy exception is to be narrowly construed and rarely applied. OCA decided that public policy does involve more than just morality issues However, the exception is still very narrow. Notes that in the environment where the courts are to respect international comity more frequently, public policy need to play a larger role that was previously the case “That trend is to emphasize the concept of comity among nations and particularly among provinces of this country when addressing the issue of enforcement of judgments and choice of law.” Refers to Morguard and Tolofson: “In both cases, the role of the public policy concept was left, in effect, as a safety valve to prevent anomalies.” broadening of the public policy exception In this case, the public policy issue is (para. 68): “Because the primacy of the protection of our capital markets and the role that the full, true and plain disclosure obligations and the anti-fraud measures contained in securities regulation legislation plays in the scheme for that protection is basic to the well-being of our economy and our society, it is, in my view, beyond dispute that taken on its own and in isolation from other factors, to condone a breach of those obligations would be contrary to the public policy of Ontario. However, to view the disclosure obligation provisions of the Securities Act, such as the prospectus requirement, as akin to a moral imperative may be to stretch the concepts unnecessarily. Public policy has been universally described as "fundamental values" and "essential principles of justice". In my view, it is appropriate at this stage in the development of our society, to characterize the protection of our capital markets and of the public who invest in and depend on the confident and consistent operation of those markets as such a fundamental value. Held: Okay in this case to enforce the English judgment. While the disclosure provisions are of fundamental value, there was in the end no public policy objection. Fundamental though is the fact that the Ontario courts had already dealt with the issue in the earlier judgment and granted a stay of proceedings Public policy may not turn exclusively on repugnance for the fundamental values represented by the underlying legal basis for the judgment, but on whether the forum courts are prepared to enforce a foreign judgment when an action on the same cause, had it been litigated in the forum, would not have been entertained Would have concluded that contrary to public policy but: Previous case where Lloyds had been successful in getting a stay in Ontario – by refusing to hear the action, courts had contemplated that the result might not be in accordance with the Act Page 15 of 101 If they had been concerned about enforcing the public policy than this consideration would have trumped and they would have heard the case Don’t want to undermine the credibility of their own courts! International comity – Lloyds is getting judgments in England against names all around the world Courts elsewhere have recognized the English court’s authority to hear these cases and had been enforcing the judgments. If Ontario wanted to act weirdly, would cause unfairness, economic turmoil, etc. Take home message: as you expand comity (the new ethos of conflicts), you also need to look at some of the defenses in a new way. And, even the most fundamental forum policy must sometimes give way to overriding private and public interests (such as the protection of the international insurance market and the avoidance of conflicting decisions in multiple litigation fora). When Forum Public Policy displaces normally applicable Lex Causae Enforcing forum may have a “mandatory rule” so despite any choice of law rules, a particular enforcing forum may stipulate that its legislation applies to all contracts or proceedings as a prerequisite to enforcement. For example, there is Canadian law that states that Canadian law applies to all shipments in a Canadian port. Is this constitutional (taking into account Morguard and Hunt)? Hunt said that between provinces, Quebec rules couldn’t be imposed on other provinces. However, perhaps laws like these are OK internationally. Also, there may be mandatory rules which state that a specific foreign law, which bears a “special connection” has to apply. In that case, public policy operates [positively so as to support the recognition or application of an otherwise inapplicable foreign law. Gillespie Management Corp v Terrace Properties According to Washington law, non-resident broker had to have a license to act as real estate broker. K called for performance of acts in Washington - law of the place at which the obligation is to be performed (a controversial choice of law rule) claim unenforceable Southin J had different reasoning: - Said the ct should give effect to a foreign public policy analogous to own domestic policy (policy in BC was not to enforce illegal contracts, law in BC also requires licensing of property managers in order to collect fees) Public Policy in an Interprovincial Context Limited after SC in Hunt recognized constitutionally mandated requirement to give “full faith and credit” judgments have to be enforced, as long as there is a real and substantial connection But if it is in conflict with own strong policies, and the relevant law is within the constitutional auth of the sister province, PP exception can be invoked to exclude the claims or defenses - But situation rarely arises, most states have similar “moral foundations” Public Policy as a Basis for Depecage Page 16 of 101 The positive invocation of public policy is not the only means by which a state can give effect to mandatory rules of a closely connected legal system that is not the normally applicable lex causae. Although less flexible an approach the technique of depecage – by which a particular legal issue is hived off from the generally applicable lex causae and subjected to its own discrete choice of law rule – is sometimes used to reach results similar to those achieved by a more general public policy doctrine. Beals v. Saldanha (SCC 2003) The public policy defence prevents the enforcement of a foreign judgment which is contrary to the Canadian concept of justice, and turns on whether a foreign law is contrary to our view of basic morality. It must shock the conscience of the reasonable Canadian. For example, the PP defence is not meant to bar enforcement of a judgment rendered by a foreign court with a RSC to the cause of action for the sole reason that the claim rendered in the foreign jurisdiction is worth far more than what one could receive in Canada. However, perhaps the PP defence could be engaged if the award was founded in arbitrariness. (perhaps not, better to frame that as a natural justice defence, namely that the judicial process was flawed in the other jurisdiction) Pro-Swing (SCC 2006) There may be PP concerns and a PP defence when a non-monetary order from a foreign jurisdiction requires disclosure of personal information that’s protected by Canadian law. The protection of such information is quasi-constitutional in nature. Penal Laws Choice of law has no application to criminal law – courts always apply their own criminal law and do not enforce the criminal law of other states. Really just a public policy issue Forum court will only apply criminal law for event happening within its own territory Note that foreign criminals can be extradited back to the state where they committed the crime – this is how it’s typically handled Contracts Criminal activity: unlikely to enforce a contract that is illegal where it was performed. That is the extent to which we import foreign criminal law into contracts Spencer v. R. Canadian bank official objected to giving evidence because it would be a crime in the Bahamas (breach of confidentiality). Held: tough luck – you’re here, so testify! Forced the bank official to testify. Huntington v. Attrill (1893) (PC) Page 17 of 101 Facts: New York company issued false statements involving company stock. Under NY law, each officer of the company who signed the document was made personally liable by statute. A suit was successfully brought against the bank director personally. Come to Ontario (where the director now lives) to enforce the judgment. Argument: Director argues that unenforceable because this is NY penal law. General Rule: no proceeding which has the objective of punishment ought to be admitted for enforcement by the courts of another country Forum court makes the determination: Ontario gets to decide if this is penal law or not. Although the opinion of the foreign court may be persuasive, the characterization of the law in the foreign jurisdiction is not determinative! General question to ask: To determine whether it’s penal in nature, ask if the wrong sought to be addressed is being a wrong to the public or to the individual? In an international sense, is its purpose to punish an offense against the public justice of the state, or to afford a private remedy to a person injured by a wrongful act? “The rule had its foundation in the well-recognized principle that crimes, including in that term all breaches of public law punishable by pecuniary mulct or otherwise, at the instance of the state government, or of some one representing the public, were local in this sense,- that they were only cognizable and punishable in the country where they were committed. Accordingly no proceeding, even in the shape of a civil suit, which had for its object the enforcement by the state, whether directly or indirectly, of punishment imposed for such breaches by the lex loci, ought to be admitted in the courts of any other country.” Draws a distinction between laws that create a civil remedy that are protective and remedial in nature and those that are punishment provisions. Held: provisions here were protective and remedial, not penal able to enforce Note: In this case, the money didn’t go to the state – it went to the individual creditors. The court construed the statute as creating an implied term of a contract between the corporation and its creditors. Recall Ivey: court said that this was not a matter of penal law, merely reimbursement for recovery and cleanup of environmental damage Revenue (Tax) Laws General rule: a forum court will not enforce foreign revenue laws – taxes! Again, really a public policy exception. Downside – does encourage tax flight. BUT tax treaties have changed the playing field significantly, so many of the following cases have limited applicability: Domestic and international treaties have made significant changes regarding the collection of taxes Canada and the US have agreed to recognize each others tax claims where certain conditions are met Provincial tax laws generally allow for the enforcement of tax claims from other provinces Rationale: full faith and credit, comity, Morguard, etc. Remember: the lex fori still gets to decide if tax law or revenue law. USA v. Harden (1963) (SCC) – leading case Page 18 of 101 Facts: California wanted to recover taxes from someone in BC. Got a judgment in California and came to BC to enforce it. Issue: Should someone who incurs huge tax debt be able to hide in BC? Argument: California argued that this is not the enforcement of revenue law, but rather the enforcement of a California judgment - no one is asking BC to apply California law, but merely to enforce a California judgment. General Rule: the forum court will not enforce foreign revenue laws – territorially based (improper extension of the taxing state’s authority) Given the generality, seems to encourages the idea of tax havens Held: the rule that you cannot recover foreign tax debts was sufficiently well established and with such sound reasoning that it should not be circumvented by allowing enforcement of a judgment based on foreign revenue law. Stringam v. Dubois (1992) (AB CA) Facts: testator died in the US, left farm to niece in AB, executor wanted sale of the farm to pay Arizona estate tax. Issue: whether the rule against courts enforcing a tax claim of a foreign jurisdiction applies so as to allow transfer of the Canadian realty to the devisee, rather than requiring that the property be sold and the proceeds used firstly to pay the US estate taxes Harden rule applicable even where there is no direct involvement by the foreign state Reed – BC estate case where the CA had not applied Harden. Limited to its facts: treasury of the foreign state was going to be directly enriched, foreign state was directly involved in the action to get the money What you can’t do directly, you really can’t do indirectly! Held: farm not sold because it would be an indirect enforcement of Arizona revenue laws Comment: fairly strict rule that doesn’t seem to make sense (because people moving all around the world, essentially allowing tax havens) Harden has been criticized as too narrow, too bold, doesn’t take into account comity (decided before Morguard), way of business has changed Niece is actually an American resident – bank or executor had recourse against her if there was non-payment may distinguish this case on the facts AB CA suggests that SCC may want to re-examine this rule! Upheld this case on principle only Re: Sefel Geophysical (1989) (AB QB) Facts: trustee of a bankrupt company applied for advice as to the appropriate distribution among creditors of the proceeds of sale of the bankrupt estate Issue: were revenue claims from the US and the UK barred by the tax exclusion? Held: Foreign claims are enforceable - court basically ignored cases that revenue claims in a bankruptcy are not enforceable Because of international comity, not satisfied that the old English case is applicable anymore suggestion that some foreign tax claims should be recognized “If the goal is to deal with liquidations in an orderly fashion in one country by virtue of deference shown by competing nations, surely some claims should at least be recognized. Page 19 of 101 I am not dealing with the priority of those claims at this point, but rather I am saying that current comity principles suggest that some foreign tax claims should be recognized in a Canadian liquidation setting. Comity is about respecting foreign judgments, proceedings and acts of state. If our bankruptcy proceedings are respected and deferred to, as they were in the case at bar, I am of the opinion that the claims of foreign states should be respected in our proceedings as long as they are of a type that accords with general Canadian concepts of fairness and decency in state imposed burdens.” BUT exception is restricted to liquidation proceedings (i.e. very narrow)! Result: US and UK tax authorities get a claim, but no priority. Priority would have recognized the state’s authority as a taxing authority – can’t do that. Domicile and Residence - a preliminary area to consider to answer matters such as those concerning matrimonial property or capacity to make a will the theory is that everyone has a “personal law” or an attachment to the law of the community to which one has the most significant continuing connection decreasing relevancy given the increasing mobility of people still relevant for issues primarily concerning family life and wills analysis is highly fact based Domicile - domicile is a common law development, civil law usually considers nationality. Nationality is irrelevant to domicile lex fori is used to determine domicile (Foote and Gillespie) you can only have one domicile. So the analysis of domicile often emphasizes consideration of whether or not you gave up your old domicile Gillespie v. Grant (Alta Surr. Ct) - lex fori is used to determine domicile distinguish between domicile of origin (where you were born) and domicile of choice. DOC can overrule DOO in the context of a will, domicile is determined at date of death, not date the will was made Urquhart Estate (ON Div Ct) - frequently moved, but there was one “constant” in his life – the maintenance of a room in Ontario from which he voted, received mail, etc court held that the room in Ontario was his domicile (very fact based finding) Page 20 of 101 - - note: court noted that he left New Zealand because of divorce – this was important to the court because it found that after the divorce there was no reason for him to be there (some facts are weighed more heavily than others) for domicile, court expects to see an intention to stay permanently or indefinitely (requiring future intention to stay there) Foote Estate - good summary of the law of domicile in this case, the Theory of Doctrine of Revival is applied: If you give up your domicile of choice and fail to acquire a new one, your domicile is deemed reverted to where you were born - this reasoning flows from the idea that you can only have one domicile and that you must have a domicile at any given time National Trust Company - the domicile of a corporation is the country in which it was incorporated it follows that the instrument of incorporation and the law of the corporation’s domicile govern all matters regarding the corporation Residence - there has been a trend to move away from domicile to residency residency is more flexibility, can have multiple residences it is like a “spot test” in that residency depends on factors laid out in various statutes (e.g., residency for voting purposes, residency for tax purposes, etc) domicile looks for a jurisdiction where you have the _most_ substantial connection. Residency just requires a substantial connection Residency also doesn’t require intention of permanency Order of permanency – domicile habitual res ordinarily res simple res Re Koo (FC) - Citizenship Act required one be a resident of Canada for 3 of 4 years before applying for citizenship test for residency: whether it can be said that Canada is the place where one “regularly, normally or customarily lives” court identified a series of factors: - is the connection more substantial than any other country? - Did the person have roots here? - Did the person go beyond obtaining formal indicia of residency (e.g., getting a local drivers license) - Court wants to see that Canada was the focus of one’s living situation Page 21 of 101 Adderson v. Adderson (Alta. CA) - “Last joint habitual residence” (family law case) Looks at present intention, unlike domicile where you have to consider subjective intention as to the future Habitual residency concentrates on quality of quantity of time Intent and factual situation (context) are key In this case, though the parties left Alberta hoping an intending they would establish a joint habitual residency in Hawaii, they never did so (failed on the facts) and so the court considered their last joint habitual residence to be Alberta Haig v. Canada (SCC) - voting rights case, looked at meaning of ordinarily resident ordinarily resident means you may not be there at the moment, but you still are resident there (for example, for voting purposes) because you retain a substantial connection to the area Part Two: Jurisdiction Parties to an Action (Standing to Sue) – a “juristic entity” Business Corporation Act (BC) – This Act used to restrict corporations from suing without being registered in BC. It’s now changed though and corporations have standing to sue even if not registered. This is BC only, however, and Ontario still requires registration. See e.g., Success Intl where the plaintiff corporation was unable to maintain an action due to not being registered. The plaintiff corporation was considered by the court to be carrying on business in Ontario because of the continuous activities it was involved in with respect to a single transaction. Thus, it needed to be registered. Comment: This case was international (the plaintiff was from out of country) but it might raise a constitutional question if interprovincial. Is this sort of statute constitutional given that it takes away the right of extraprovincial entities to sue? Perhaps this is similar to the Quebec Business Act case? Note: Also see s. 7 of the Court Jurisdiction and Proceedings Transfer Act which closes the categories under which corporations can be considered ordinarily resident. A corporation is ordinarily resident in BC for the purposes of this part only if: a) the corporation has or is required by law to have a registered office in BC Page 22 of 101 b) pursuant to the law, it i. has registered an address in BC at which process may be served generally; or ii. has nominated an agent in BC upon whom process may be served generally c) it has a place of business in BC; or d) its central management is exercise din BC However, note that s. 7 falls under Part 2 of the CJPTA which applies only to defendants. Bumper and Hamza cases – Generally speaking, local entities must either be natural persons, accepted artificial persons like corporations, or statutory persons like the government to maintain an action. Unincorporated associations for instance usually cannot maintain an action – its individual members must all sue together. Lex fori applies – the law of the forum determines who can bring an action. Standing to sue is a procedural issue. The courts in Canada will use their own inherent jurisdiction to control its own civil procedure, including who will be a plaintiff. Using principles of comity, courts will recognize a foreign entity as having standing to sue even if that entity normally wouldn’t be able to sue if it were local. Policy considerations: Court just wants to make sure there is someone who is legally responsible for their claims. If that entity would be responsible in its own jurisdiction, then the court will apply comity and accept its existence. Also there’s an argument that the entity in the other jurisdiction gains a vested right to maintain an action and that it can carry this right to other jurisdictions. Re Indian Residential Schools – suit brought against Catholic church, in Canada church was not an entity that could be sued, no intention shown of suing the church internationally, case law said domestically the church is not a juristic entity; it’s an unincorporated association. Hamza distinguished on basis that the entity in that case was foreign. The entity “The Roman Catholic Church” is struck out. Assumption of Jurisdiction: The Existence of Jurisdiction or Jurisdiction Simpliciter Parties within the Jurisdiction Maharanee of Baroda (Eng. CA) – The tradition rule, English courts are entitled to assume jurisdiction over any person present in England on whom a writ could be served Page 23 of 101 subject only to discretionary principles of self-restraint. This applies even if the person had only a “fleeting” present in the country (e.g., just came to visit for a couple hours). (Canadian version of this case is Forbes) Court Jurisdiction and Proceedings Transfer Act (CJPTA) and Jurisdiction Simpliciter – modifies the common law rule. Generally, the rule is the same except s. 3 closes the categories available for a court to find territorial competence (jurisdiction simpliciter or JS). s. 3 is defendant based, a court has JS in a proceeding that is brought against a person (a defendant) ONLY if: a) that person is the plaintiff in another proceeding in the court to which the proceeding in question is a counterclaim b) during the course of the proceeding that person submits to the court’s jurisdiction (attorns) c) there is an agreement between the plaintiff and that person to the effect that the court has jurisdiction in the proceeding; d) that person is ordinarily resident in BC a the time of the commencement of the proceeding (significant, recall definition of ordinarily resident) e) there is a RSC between BC and the facts on which the proceeding against that person is based (also significant) s. 2(2) requires territorial competence be solely referred to by Part 2 (under which s. 2 and 3 lie) and that would require fleeting to either be ordinarily resident or for the case to have a RSC to BC. One can’t easily say that a person with a fleeting presence is ordinarily resident in BC. Perhaps fleeting is no longer the law in BC. Residual Discretion – CJA s. 6 CJA s. 6: A court that under section 3 lacks territorial competence in a proceeding may hear the proceeding despite that section if it considers that (a) there is no court outside British Columbia in which the plaintiff can commence the proceeding, or (b) the commencement of the proceeding in a court outside British Columbia cannot reasonably be required. Under residual discretion, a BC court can have JS without a real and substantial connection! S. 6 is essentially a clause of last resort to establish JS. However, may be constitutionally suspect because of unfairness to the defendant. Generally, it is the real and substantial connection that ensures order and fairness. Without such a connection, may be problematic. Section will likely be interpreted narrowly. Page 24 of 101 Plaintiff will have significant burden in demonstrating that no other court can commence proceedings. Plaintiff may need to show that they have been shut out of other courts. Parties outside the jurisdiction Constitutional Issues Before Morguard, most courts asked the following 3 questions based on the CL: 1. Is there a good arguable case on the merits? 2. Do the circumstances of the case fall within the rules of court? 3. As a matter of discretion, is the jurisdiction also forum conveniens? Morguard Investments Ltd – Imposed a constitutional standard on the assumption of JS. The court held that a RSC between the province and the action is required by the constitution. The three step test isn’t enough. Since Morguard, the RSC question is usually asked twice, once at the JS stage and again at the discretionary stage of the process (determining forum conveniens). Many judges recognize that the discretionary stage requires a closer degree of connection, but many of the same factors are considered twice. Also see s. 6 of CJPTA – constitutional issues raised (see above). Procedural Enactments (for ex juris service) CJPTA – s. 10 is basically equivalent to JS. (a) through (l) lists specific situations when RSC between BC and the facts will be presumed (rebuttable presumption) to exist. s. 10 also has a “residual” category in that it’s worded “Without limiting the right of the plaintiff to prove other circumstances…” BC Rules of Court – Rule 13 now says that service ex juris without leave is OK if the case falls within the specific situations under s. 10 of the CJPTA, otherwise leave is needed. However, s. 14(6) permits a defendant to rebut the RSC presumption. Rule 6 also states that when someone is coming to the province to challenge JS, that doesn’t mean he or she submitted to the court’s jurisdiction. Note: Old cases before the CJPTA that use the old BC Rules of Court (the old Rule 13) are still relevant in helping understand the legislation, particularly for its procedural aspects. Moran v. Pyle (1973) (SCC) – leading case as to JS and whether there was a tort in a jurisdiction Page 25 of 101 Facts: Saskatchewan resident gets fatally electrocuted while replacing a light bulb. Family brought suit in Saskatchewan against the manufacturer for negligence. The manufacturer was an Ontario company with no assets or offices in Saskatchewan. Bulbs were sold into Saskatchewan through various intermediaries. Saskatchewan’s Queens Bench Act prohibited bringing action for a tort committed outside the province without the leave of the court. Issue: Where was the tort committed? Reasoning: Situs of the court for jurisdiction simpliciter is different from the situs of the tort for choice of law (covered later). Just because the court has jurisdiction simpliciter and chooses to exercise this discretion, doesn’t mean that the law of the forum applies (lex fori). For purposes of jurisdiction simpliciter, SCC discusses two different theories: Place of acting theory: tort occurs where the act is done that ultimately results in the harm – in this case would be Ontario, where the light bulb was negligently made Rejected as too rigid – there is no tort until the product malfunctions. Place of harm theory: the last necessary element it the ground for where the tort occurs – in this case would be Saskatchewan, where installing light bulb was the last necessary element. Rejected as problematic for the purposes of jurisdiction simpliciter. The court rejects both of these approaches: “Generally speaking, in determining where a tort has been committed, it is unnecessary and unwise to resort to any arbitrary sort of rules. The place of acting and the place of harm theories are too arbitrary and inflexible to be recognized in contemporary jurisprudence.” Supports a rule that is much more principled in nature: Real and substantial connection will attach mostly to the effects, and it would not be inappropriate to “regard a tort as having occurred in any country substantially affected by the defendant's activities or its consequences and the law of which is likely to have been in the reasonable contemplation of the parties.” Rule: “Where a foreign defendant carelessly manufactures a product in a foreign jurisdiction which enters into the normal channels of trade and he knows or ought to know both that as a result of his carelessness a consumer may well be injured and it is reasonably foreseeable that the product would be used or consumed where the plaintiff used or consumed it, then the forum in which the plaintiff suffered damage is entitled to exercise judicial jurisdiction over that foreign defendant. Recognizes the important interest a state has in injuries suffered by persons within its territory. Purpose of negligence as a tort is to protect against carelessly inflicted injury and thus that the predominating element is damage suffered. Held: Tort occurred in Saskatchewan and was reasonably within the contemplation of the manufacturer. Doesn’t necessarily mean that the law of Saskatchewan would be applied in this case, but does mean that Saskatchewan has jurisdiction simpliciter. By tendering his products in the market place directly or through normal distributive channels, a manufacturer ought to assume the burden of defending those products Page 26 of 101 wherever they cause harm as long as the forum into which the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods. This is particularly true of dangerously defective goods placed in the interprovincial flow of commerce. Note: To determine choice of law, look to the Tolofson case. Teja v. Rai (BCCA) (2002) – (this case would easily fit under the CJPTA today) How far does the Morguard RSC test take over from traditional CL tests? Does it supplant or supplement the CL tests? The court reads down Morguard by saying that it wasn’t intended to supplant traditional CL rules (e.g., power over the def, situs of the tort, place of performance of K). It was to be read alongside the traditional rules and factors. RSC was described as being developed for non-traditional situations, to take account of constitutional limits on a court’s reach – not a new test that overrides traditional tests. Furlan v. Shell Oil (BCCA) (2002) Facts: Plaintiff (class action law suit) alleged that harm was caused by polybutylene plumbing system. Three defendants: all companies that manufacture the plumbing resin. Defendants were served ex juris under the old Rule 13, and they argue the BC courts have no jurisdiction. Defendants: none carried on business in BC, were not the manufacturers of the plumbing equipment (were quite far removed from the damaged) and had reasonable defences. Arguments: Shell argued that they were not selling resin directly to Canada, but didn’t deny that it might have showed up here. Second company: did not admit to selling resin to Canada and didn’t know how it showed up here DuPont: admitted to selling resin into Quebec, but not to any of the companies that were involved in the law suit. Issue: Sufficiency of the evidence to support the service ex juris and the meeting of the old Rule 13(1). Here the plaintiff has the burden of proof and the defendant can challenge that under Rule 14(6). Defendant companies challenged service ex juris under Rule 14(6) – argued that the plaintiffs had not made out their case and the pleadings were not sufficient to support service ex juris I.e. argued that the plaintiff had not disclosed evidence of a connection between the harm suffered and the resin sold by the companies (or at least a company) Here the defendants did not provide evidence to negate the allegations. Reasoning: Jurisdiction simpliciter is different than forum non conveniens: if the case is made and you fit within the pattern, then JS is there. Page 27 of 101 Basic rules to determine jurisdiction simpliciter: Basic rule: jurisdiction simpliciter is determined based on pleadings. A case does not have to be made out on the evidence where the facts of the pleadings are not challenged If the defendant does challenge the pleadings with evidence, the plaintiff must respond with evidence If the defendant counters by affidavit evidence, there is an obligation on the plaintiff to provide evidence to counter or explain the defendant’s affidavit Residual category (qualification on the proposition that JS is to be determined by the pleadings): Where plaintiff puts forward an extremely tenuous claim, affidavit evidence would be needed to support it concern as to whether there is ANY evidence to support the claim This would be necessary where application is made for ex juris service and the claim is extremely tenuous If plaintiff cannot make a good arguable case on any material fact that is crucial to the case, jurisdiction should be refused (otherwise risk abuse of process) Useful on questionable suits that are begun strictly on pleadings. Held: BC courts have jurisdiction simpliciter service ex juris is allowed. Muscutt v. Courcelles (Ont CA 2002) No longer good law in BC because of the CJPTA and in Stanway, the BCCA straight up says it’s no longer good law. But per Howell, the statement in Stanway may be overreaching. Muscutt may not be relevant as a statement of general principle, but it may be relevant in its context. Also, it may be relevant if a claim doesn’t fall under the s. 10 enumerated categories or if you are trying to challenge the presumption. Facts: Car accident. Plaintiff was a passenger in a vehicle driven by one defendant, owned by another defendant, struck by the defendant driver of an ambulance. Accident occurred in Alberta. Plaintiff suffered serious spinal cord injuries. Returned to his home province of Ontario and commenced an action there. Clear that the tort occurred in Alberta. Issue: Was this “damage sustained in Ontario”? Was this principle an inappropriate extension of their jurisdiction? Different to Moran since the ongoing suffering was taking place in Ontario, not the initial accident Defendant argued that action should be stayed for want of jurisdiction, since the plaintiff’s pain and suffering in Ontario did not amount to a RSC to do so would have an inappropriate and disproportionate effect on the defendant Page 28 of 101 Reasoning: Key consideration is the content of real and substantial connection. The court considered to different approaches for determining real and substantial connection: Personal subjection approach (the older approach): Focuses attention on the defendant and the connection between the defendant and their actions which would make it reasonable for them to contemplate that they might be sued in the Province of BC. This idea raised in Moran v. Pyle – reasonable contemplation of the defendant (sort of) Administration of justice approach (the newer approach): Broader than personal jurisdiction approach. All that is required to establish a RSC is that there is a minimum standard of suitability: rests in part on the fairness of the case in the forum in which it is being brought. Ontario prefers the broad approach SCC has made it clear that RSC is flexible and should be flexible SCC, at least in interprovincial cases, ensures a high degree of respect about the recognition and enforcement of foreign judgments: for order and fairness Broad approach is the product of the relationship between JS and forum non conveniens – encourages broad approach The real and substantial connection test involves a fact-specific inquiry, but the test ultimately rests upon legal principles of general application. Asking two separate questions: (1) jurisdiction simpliciter – is the minimum threshold there? Under jurisdiction simpliciter, you are not looking for the most convenient forum, just the minimum standards of whether R&S has been met. “The question is whether the forum can assume jurisdiction over the claims of plaintiffs in general against defendants in general given the sort of relationship between the case, the parties and the forum.” (2) forum non conveniens – is this is the most suitable place to hear the case? Under forum non conveniens, you are looking for the most suitable forum as a matter of discretion “By contrast, the forum non conveniens test is a discretionary test that focuses upon the particular facts of the parties and the case. The question is whether the forum should assert jurisdiction at the suit of this particular plaintiff against this particular defendant.” There is some overlap between jurisdiction simpliciter and forum non conveniens - many of the same factors are considered Overlapping considerations include the connection of the forum to the plaintiff and defendant, fairness to plaintiff and defendant Factors that are relevant in the administration of justice approach for jurisdiction simpliciter: Connection between the forum and the plaintiffs claim Page 29 of 101 Forum has a legal interest in protecting its residents – mere residence is not sufficient, but notes that the medical costs are falling in Ontario Important interest a state has in injuries suffered within its territory Stretches Moran case which looked at the contemplation of the parties (if you produce products that are defective, you should contemplate it would cause injury in a number of places) Connection between the forum and the defendant If D has done anything within that jurisdiction that bears upon the claim advanced by the P, then case for jurisdiction would be stronger In this case, D had no connection with Ontario, but there is an inherent risk that driving around Alberta you might hit someone from Ontario. Unfairness to the defendant in assuming jurisdiction Very much like forum non conveniens considerations One of the key points that persuaded the court. Court emphasized fact that it was the insurance industry that was defending the action. There is really no unfairness to the insurance companies - automobile insurers are national companies that can handle the litigation anywhere in Canada Uniformity in terms of insurance – prospect of this going inter-provincially. Not at the international level – insurance schemes would not necessarily be similar. Unfairness to the plaintiff in NOT assuming jurisdiction Relies on Morguard: need to consider the plaintiffs interest in access to the courts and the inconvenience of compelling them to bring and action in Alberta. Involvement of other parties in the suit Avoiding risk of inconsistent results and a multiplicity of suits, especially parties outside the jurisdiction Again, very much like a forum non conveniens consideration Not an issue in this case Reciprocity (Court’s willingness to recognize and enforce extra-provincial judgments that were rendered on the same jurisdictional basis) Want to consider the grounds on which the another court might have exercised jurisdiction “Every time a court assumes jurisdiction in favour of a domestic plaintiff, the court establishes a standard that will be used to force domestic defendants who are sued elsewhere to attorn to the jurisdiction of the foreign court or face enforcement of a default judgment against them.” Cases of an interprovincial or international nature will be handled differently Ontario judgment would be enforced elsewhere, but also need to contemplate a reverse of the action i.e. domestic D sued in “sister provinces” If international or interprovincial nature: Morguard, Tolofson and Hunt Assumption of jurisdiction more justified in interprovincial cases as opposed to international cases because of the context of the Canadian federation and sister provinces Assumption of jurisdiction not as easy in international environment Comity Should consider the standards of jurisdiction, recognition and enforcement In interprovincial cases, same standard applies within Canada; more complex for Page 30 of 101 international cases Should probably be considered under forum non conveniens Held: Jurisdiction simpliciter had been met. Sample Ontario cases where there was no jurisdiction simpliciter: Plaintiff is injured in a motor vehicle accident in New York State Plaintiff injured in a fall in a restaurant in Buffalo NY Plaintiff falls while rappelling during a package holiday in Costa Rica Applying the 8 Considerations: 1) All have a connection between the plaintiff and the action 2) None have connection between forum and the defendant 3) Would be unfair to the defendant to force them come to Ontario, even in the case of New York 4) Unfairness to the plaintiff: not unfair to require the plaintiff to bring the action where the claim arose. 5) Involvement of other parties – not an issue 6) Willingness to recognize extra-provincial judgments – wouldn’t recognize and enforce judgments with such a tenuous connection 7) Doesn’t really apply 8) Doesn’t really apply AG Armeno Mines and Minerals (BCCA 2000) Facts: Contract to acquire share in proposed mining development in Indonesia not carried out. The contract had been made in BC and was to be subject to BC law. Plaintiff argued that BC court had jurisdiction under Rule 13(1)(h) – tort committed within BC, which includes breach of contract. Trial judge set aside the ex juris service because had no jurisdiction over the defendant. Rule: Where there is a tenuous claim, jurisdiction simpliciter cannot be decided on pleadings alone will have to look to evidence to make out a good arguable case Tenuous = evidence introduced by the foreign defendant contradicts material facts pleaded by the plaintiff, or otherwise proves fatal to the plaintiff’s claim Good arguable case = serious question to be tried, genuine issue, or with some chance of success not a high evidentiary threshold Plaintiff does not have to tender evidence about issues that the defendant’s evidence has not put at issue Held: Although the plaintiff made a case for jurisdiction simpliciter on the pleadings alone, refused jurisdiction on the grounds that they had failed to make a good arguable case on the evidence In the pleadings, the plaintiff claimed to be “substantially affected” by the breach in BC and pointed to the fact that the contract was made in BC Page 31 of 101 However, the plaintiff hadn’t made out a good arguable case on the evidence - hadn’t established causation from inducement Plaintiff was required to make some evidentiary response to the defendant’s affidavits sufficient to raise a triable issue couldn’t rely on pleadings alone. Comment: Was this case eclipsed by the CJPTA? United States Satellite Broadcasting Co (2001 ABCA) Asked to read para. 17 only which states US Satellite Broadcasting – company based in Minnesota provided satellite TV in the US; no presence in Canada. They did not deny that their broadcast signal went into Canada. Admitted to activating decoders in Canada, and to receiving payment for these decoders. Indicated that they would discontinue any service that was being received in Canada. Court found that there was damages done to the Canadian company USSB essentially carrying on business in Canada = jurisdiction simpliciter Comment: Was this eclipsed by the CJPTA? Strukoff v. Syncrude Canada (BCCA 2000) Employee worked in Alberta, employer had no BC presence. Rule 13.1(c) of the rules of court at the time required a breach of contract to occur within BC for the court to take jurisdiction. Employment termination was sent from Alberta to BC by mail, question of whether the termination occurred in Alberta or BC. Court said that general rule is that the breach occurs at the point of mailing (Alberta then). However, court applied Muscutt analysis – looked at continuing disability of employee in BC, his use of BC doctors, and analogized to contractual performance precedent (i.e., the requirement that the substantial performance of the contract occur in BC). In other words, there was a substantial connection between the cause for dismissal and the province of BC. RSC found. Issue in background providing saving grace: Doctor in BC working for defendant appeared to have made negligent misrepresentation to plaintiff, and so the chambers judge below thought this could be construed as a tort committed within BC. Another comment: Court treats cases falling within the rule of court for service ex juris as presumptively satisfying the RSC test. Page 32 of 101 Craig Broadcasting Systems (1998 MBCA) Any RSC is sufficient to establish jurisdiction simpliciter. The extent of the RSC is to be examined when looking at the issue of forum conveniens. Harrington v. Dow Corning Corp (2000 BCCA) Class Action Suits In conflicts, class actions suits are always treated a little bit different. Facts: Class actions for negligence in manufacturing silicone breast implants BC Class Actions Proceedings Act s. 16(2) does appear to allow someone who is not a resident in BC to be involved in a class action in BC. Only BC and Ontario have Class Action statutes Issue: whether JS existed for those persons who had opted into the class action but who were not residents of BC. I.e. does the Class Proceedings Act permit the court to take wider jurisdiction than it otherwise would? If yes, is it unconstitutional? Allows a non-resident to opt into a class action lawsuit Defendant argued that people in the class action must have some connection to BC. Normally, Court would not have jurisdiction over non-resident claims unless there was a real and substantial connection to BC. However, class action suits add an extra dimension Held: Trial judge and BCCA both found that there JS over non-residents who wanted to opt into the class action law suit. Anchored in fundamental values of fairness: orderly decision making comity “Do not mean to suggest that a court may assume jurisdiction at a plaintiff's request for her convenience. More than a plaintiff's choice is required. I do suggest that the existence of a certified class action may be that something more. It may, depending on the nature of the cause of action and the certified common issues, provide a sufficient connection to justify a claim to jurisdiction. So long as the process is fair, there need be little concern at this stage for the interests of a defendant; they are well protected by the doctrine of forum non conveniens.” Within context of class action, convenience, practicality and mobility of people supports bringing people in to suitable locations (BC or ON) but this must be balanced against identified issues which in the Canadian context raises constitutional concerns of provincial legislation that includes non-residents. If there was a sufficient number in province, then it could be said that bringing in other people would be incidental, but if no residents from BC, then can't be said that non-BC residents are incidental. Court says the non-residents should be included for public policy reasons. Accords with comity and orderly decision making. Manufacturers of products marketed throughout Canada should be expected to be sued before any Canadian Page 33 of 101 court any way. Note: might it have been different if dealing with an “opt-out” act Comment: RSC is here more because of the nature of the action – class action changes the action of JS. Muzak Corporation (1953 SCC) Federal Court Rules, can one appeal an interlocutory judgment allowing service ex juris to the SCC or must appeals be for final judgments only? Answer: SCC can hear the appeal. An interlocutory judgment within the meaning of s. 82 of the Federal Court Rules includes an order and the SCC can hear such an appeal. Purple Echo v. KCTS (2006 BCSC OVERTURNED ON APPEAL BUT POSSIBLY STILL VALID SEE BELOW) Facts: Plaintiff claims damages for breach of contract. Defendant is a public broadcaster in Seattle. Plaintiff argues that KCTS did not properly show a series of 13 TV programs as required under contract – didn’t do enough to promote or show them at a reasonable time. Documents served in Seattle without leave of the court, relying on Rule 13(1). KCTS argued that the BC courts did not have jurisdiction simpliciter. Held: Plaintiff attempted to establish jurisdiction simpliciter based on three arguments (only one argument listed here because Howell asked us to read the case for the judge’s view on 10(h)): Under CJA s. 10(h) - concerns of business carried on in BC Para 38-41: JS applies to ANY business carried on in BC. Although plaintiff clearly carries out business in BC, Court decides that the law before the CJPTA focused on the connection between the court and the defendant, not just the plaintiff, and that 10(h) did not change this law. Based on this approach, had already found that KCTS was not carrying on business in BC (question 1) Thus, did not fall within CJA s. 10(h). “I decline to interpret 10(h) as altering the law so as to invoke a presumption of RSC merely on the basis that the plaintiff is carrying on business in BC. Purple Echo v. KCTS (2008 BCCA) The chambers judge erred in concluding that the def did not have a place of business in BC despite evidence to the contrary. The judge erred by imposing the burden of establishing jurisdictional facts on a balance of probabilities. All that the plaintiff had to do was establish an arguable case that KCTS had a place of business in BC, that the obligations were to be performed significantly in BC, that an objective of the agreement was to capitalize on KCTS’s considerable audience in BC, and that KCTS carried on business in BC. Further, KCTS didn’t show that Washington was the more appropriate forum. A judge must consider the prima facie entitlement of the plaintiff to its chosen forum (basically, Page 34 of 101 more evidence should be shown of forum non conveniens). The existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiff. Note: Requirement for service ex juris and jurisdiction simpliciter are not the same. Forum Non Conveniens: Discretion to Decline Jurisdiction English Position in Transition Spiliada Maritime v. Cansulex (1987) (HOL) Facts: Ship is registered in Liberia. Loaded with wet sulphur in Canada. Damage was incurred. Plaintiff, a Liberian company (ship owners) sued the Canadian company in an English court. (All of the insurers were in London). Leave to serve ex juris was granted by the British court. Arguments: Defendant challenged jurisdiction: argued that the BC court was more appropriate since that is where the damage took place and where the defendants (and their assets) were. Litigation strategy: plaintiff was suing in England because the case would have been time barred under BC law. Reasoning: A judge may decline to take a case where there is another jurisdiction that is more suitable for the parties. However, the burden is on the claimant (who wants a stay of action) to establish that the foreign forum is clearly or distinctly better. Term forum non conveniens is not about convenience. Rather, what is at stake is suitability or appropriateness of the forum “the natural forum” is one where the parties would reasonably expect the case to be heard. While the P has a degree of choice in forum, this will not overwhelm the court. Many factors can be considered to determine the "natural forum" including: the availability of witnesses, the applicable law of the matter, the parties' residence or place of business, and other cases related to the subject matter, location of insurers, the possibility for the plaintiff to obtain justice in the foreign jurisdiction. Juridical advantage is not a separate consideration If a party makes out a claim for a natural forum the opposing side may rebut the claim by showing that justice requires the matter to be heard in the domestic court, otherwise justice would not be done. Page 35 of 101 General preference for the plaintiff’s choice of forum places a significant burden on the defendant to show that another forum is more appropriate. Distinction between service ex juris and in the jurisdiction goes to the burden: Service in juris: more difficult to show that there is a more appropriate forum. Service ex juris: easier to show that there may be a more appropriate forum elsewhere. Underlying principle of fairness and comity requires that regard must be had to all of the parties and the ends of justice, and may lead to a different conclusion in other cases. Courts don’t want to be used for abuse of process (forum shopping) In this case: If the only reason they chose England was because of the limitation period, that’s not a good enough reason. If the plaintiff is simply forum shopping, the court will not recognize the claim. But if the plaintiff acted reasonably and there was a reasonable connection with the forum, then at least regarding limitation periods, court will look beyond that. Applying the facts: Court notes that the location of the witnesses was in England There is another related case going on in England between the renter and the ship owner. The contract of rental generally says that the law of England will apply. Essentially the same set of facts – crucial point! Common insurers: most of the insurance in admiralty is done in England. All the work and all the learning has taken place in England based on previous counsel. Loading did take place in BC Held: BC is not a more appropriate forum than England. The expenses alone and the existence of a B.C. limitation period was enough to allow the claim to come to England. Note: Even if the court had granted a stay and the case went to BC, court would have conditioned the stay on the parties waiving their limitation bar (lose that juridical advantage). Societe nationale Industrielle Aerospatiale v. Lee Kui Jak (1987) (Privy Council) Facts: Helicopter falls out of the sky in Brunei and 12 people are killed. Helicopter was manufactured by Aerospatiale, a French company. Helicopter was owned by an English company. Brunei government ordered a transportation safety inquiry determined that there was a mechanical malfunction and a failure to advise regarding regular maintenance. Widow of one of the deceased brings action all over: France, Brunei and Texas. Brought in Texas on the grounds that Aerospatiale did business in Texas. Page 36 of 101 Texas Wrongful Death statute: allowed the action to be brought in Texas simply on the basis that the cause of death might have involved a company that had a subsidiary in Texas. Suing in Texas because lenient products liability law and high damage awards. Texas Action Motion by Aerospatiale in Texas to dismiss the case on the grounds of forum non conveniens. Widow counters that the forum non conveniens has no application under the Texas statute. Also argue that the court should not use discretion Texas court dismissed the Aerospatiale motion, but gave no reasons (not required to!) Texas case to proceed - passes forum non conveniens Brunei Action In Brunei, Aerospatiale tries to get an anti-suit injunction to prevent the widow from proceedings in Texas Unsuccessful in getting the injunction. Appeal all the way to the Privy Council in England Held: Court notes several starting principles: An injunction shall be granted where the ends of justice require it An anti-suit injunction is not a declaration of war on the other court, but rather is issued against the individuals party Will only be granted where the defendant is “amenable to the jurisdiction” – i.e. where its going to be effective Must be careful: many comity issues at stake – indirectly affect foreign courts Privy council tries to create two categories of anti-suit injunctions: Where the injunction is designed to protect English court jurisdiction – possibility that a foreign judgment would compromise English court jurisdiction. I.e. don’t want interference from foreign courts – easier to get an injunction in these circumstances Where there are (or possibility of) parallel proceedings – purpose of the injunction is to quiet the parallel proceedings Goes more to court efficiency – more difficult to get the injunction Will only be granted where the foreign proceedings would be vexatious or oppressive Of these two categories, Aerospatiale fits into the second category Must show that the action in the Texas court is vexatious or oppressive. The fact that there are parallel proceedings is not sufficient to be granted an anti-suit injunction – much higher burden Just because the court is being heard in an inconvenient location is not vexatious or oppressive Page 37 of 101 However, abuses of courts can occur where parties go to a jurisdiction with little or no connection to the parties simply to get higher damages Alluding to forum shopping Forum non conveniens is a way to balance jurisdictions if the foreign court doesn’t seem to be applying forum non conveniens properly and is therefore not respecting comity, this may be grounds to grant an anti-suit injunction. The action of the foreign court is considered to be oppressive Quote: "Their Lordships refer, in particular, to the fact that litigants may now be encouraged to proceed in foreign jurisdictions, having no connection with the subject matter of the dispute, which exercise an exceptionally broad jurisdiction and which offer great inducements, in particular greatly enhanced, even punitive, damages, that they may tempt litigants to pursue their remedies there. In normal circumstances, application of the now very widely recognized principle of forum non conveniens should ensure that the foreign court will itself, where appropriate, decline to exercise its own jurisdiction . . . But a stay may not be granted; and if, in particular, the English court concludes that it is the natural forum for the adjudication of the relevant dispute, and that by proceeding in the foreign court the plaintiff is acting oppressively, the English court may, in the interests of justice, grant an injunction restraining the plaintiff from pursuing the proceedings in the foreign court." Court rejects the argument that the test for forum non conveniens and for anti-suit injunctions are so closely related that the Spiliada test should actually apply in the same way for anti-suit injunctions Whatever the relationship between the two might be, there is going to be a separate test for anti-suit injunctions, largely because of the much higher importance of comity considerations in the context of an anti-suit injunction. Held: In this case, concludes that it’s an appropriate case to issue an anti-suit injunction Texas had no significant connection Texas not respecting comity Texas selected only because of possibility of higher damages (forum shopping) Summary: The test for a stay of proceedings under forum non conveniens and for an antisuit injunction are not the same Generally, although many of the considerations under the two tests are the same, the burden to be granted an anti-suit injunction is much higher Anti-suit injunctions can only be issued where the proceedings in the foreign jurisdiction were vexatious, oppressive and contrary to the ends of justice Where a foreign court is clearly not adhering to forum non conveniens and exercising jurisdiction improperly, this raises concerns for comity and may be considered as oppressive and thus grounds to issue an anti-suit injunction Page 38 of 101 Court granting the anti-suit injunction must be a natural forum – not sufficient on its own, but makes it easier. Modern Canadian Position Discretion as to the exercise of territorial competence – CJA s. 11 CJA s. 11(1): After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding. (2) A court, in deciding the question of whether it or a court outside British Columbia is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including (a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum, (b) the law to be applied to issues in the proceeding, (c) the desirability of avoiding multiplicity of legal proceedings, (d) the desirability of avoiding conflicting decisions in different courts, (e) the enforcement of an eventual judgment, and (f) the fair and efficient working of the Canadian legal system as a whole. Comments: s. 11 is directed to stay of proceedings only, “decline to exercise its territorial…” The interests of the parties – this includes consideration of both plaintiff and defendant interests Basically, s. 11 is forum non conveniens Looking at s. 11 in the context of Amchem -- A through E considers the “convenience of the parties.” B through F considers the “ends of justice” Amchem v. BC Workers Compensation Board (1993) (SCC) Lower Court: In BC, the injunction was granted by the lower court on the condition that they attorn to the jurisdiction of BC didn’t want them to come back later and claim that BC didn’t have jurisdiction Being wary of forum shopping and courts being abused. Lower court judge relied on all the English cases: permissible to grant an anti-suit injunction where the plaintiff was acting oppressively in the foreign court. More annoyed by the fact that the Texas statute had wiped out forum non conveniens. BCCA: Page 39 of 101 Also allowed the anti-suit injunction the absence of the forum non conveniens in the Texas jurisdiction was a big problem. Weak argument: Granting the anti-suit injunction did not compromise the principle of comity since directed at individuals, not the court. SCC (Sopinka): Reviews all the previous Canadian cases Concludes that there is no consistent approach in Canadian law to anti-suit injunctions. Only certain thing is that anti-suit injunctions should be granted with great caution (not particularly helpful)! Holds that Aerospatiale should be the foundation for the Canadian approach: Due regard must be paid to comity However, rejects that the emphasis should be on vexatious or oppressive conduct – differs from British approach. Also unimpressed with Lord Goff’s two category approach Four principles are set out (although they are not really followed in subsequent cases): Procedural: domestic court should not entertain the application unless (a) foreign action has been commenced or is pending, and (b) party seeking injunction sought a stay in the foreign court (under forum non conveniens) and been denied. “In order to resort to this special remedy consonant with the principles of comity, it is preferable that the decision of the foreign court not be pre-empted until a proceeding has been launched in that court and the applicant for an injunction in the domestic court has sought from the foreign court a stay or other termination of the foreign proceedings and failed.” Want to wait for the other court to consider forum non conveniens if the case is stayed or dismissed in the other jurisdiction, problem solved! Effectivity: domestic court must be a natural forum, that is, it must have jurisdiction simpliciter real and substantial connection “…the domestic court must proceed to entertain the application for an injunction but only if it is alleged to be the most appropriate forum and is potentially an appropriate forum.” This will automatically be met if there is already action underway on the same matter in BC Must also take into account that there is an action proceeding in another court and has been accepted there Comity: consider whether foreign court assumed jurisdiction on a basis that is inconsistent with principles relating to forum non conveniens (as understood by the domestic court). Anti-suit injunction will only be granted where the foreign court exercised jurisdiction in a manner that was inconsistent with our principles of forum non conveniens Foreign court doesn’t have to use the specific doctrine, as long as they consider the principles. “The foreign court, not having, itself, observed the rules of comity, cannot expect its decision to be respected on the basis of comity.” Page 40 of 101 Then Juridical disadvantage tied with unjust result: general rule from Aerospatiale - will not grant an injunction if by doing so they will be depriving the plaintiff of advantages that it would be unjust to deprive them of. Consider loss of juridical advantage, extent of connection to the forum, loss of personal advantage, weigh against loss of advantage to defendant Trying to avoid forum shopping – need to look at the connections with Texas If you are legitimately in Texas, it would unjust to deprive you of a juridical advantage in Texas. However, if chose Texas only because of higher possible damages and there was no real connection otherwise, not unjust to deprive you of this advantage “A party can have no reasonable expectation of advantages available in a jurisdiction with which that party and the subject matter of the litigation has little or no connection.” “If a party seeks out a jurisdiction simply to gain a juridical advantage rather than by reason of RSC, that is normally condemned as forum shopping. But if RSC exists, the plaintiff has a legitimate claim to the advantages that the forum provides.” Excerpt: The result of the application of these principles is that when a foreign court assumes jurisdiction on a basis that generally conforms to our rule of private international law relating to the forum non conveniens, that decision will be respected and a Canadian court will not purport to make the decision for the foreign court. The policy of our courts with respect to comity demands no less. If, however, a foreign court assumes jurisdiction on a basis that is inconsistent with our rules of private international law and an injustice results to a litigant or "would-be" litigant in our courts, then the assumption of jurisdiction is inequitable and the party invoking the foreign jurisdiction can be restrained. The foreign court, not having, itself, observed the rules of comity, cannot expect its decision to be respected on the basis of comity. Held: Anti-suit injunction overturned – Texas was an appropriate forum. Amchem failed to show a legitimate juridical advantage that it would be unjust to deprive them of They were in fact carrying on business in Texas an should reasonably have contemplated that they could be sued on Texas Texas does not have forum non conveniens as we understand it, but does have some inkling of the process 14th amendment – due process: provides a safeguard on states from taking jurisdiction where they have no connection Texas cannot just take jurisdiction any time it wants – must accord with due process under US constitutional law As long something like forum non conveniens was applied (in this case, due process), that was sufficient Page 41 of 101 Comment on anti-suit injunctions in appropriate cases, the court will not insist the party ask the foreign court to make an application for a stay e.g. in Hudon the P couldn’t afford to make an application for a stay in Japan before seeking an anti-suit injunction in Ontario and the court was fine with this. Comment on Hudon: Comment: Note that only two of the condition from Amchem were met: Ontario was an appropriate forum No injustice to the Japanese company in hearing the case in Ontario Indicates that the Amchem principles, although carefully laid out by Sopinka, are actually fluid. Ted says this is not an abuse of the process, just not strict application result is not unfair. Bushell v. T&N Plc (1992 BCCA) The plaintiff has the burden of establishing that British Columbia is forum conveniens in service ex juris cases. Tortel Communications (1994 Man. CA) The only connection to the jurisdiction was that the def had an asset there which had nothing to do with the plaintiffs’ claims. Court said def was doing business in Manitoba but not carrying on business in Manitoba pursuant to Rule 17.02(m). Court also wanted to overturn the pre-emptively awarded garnishing order against that asset. Court recognized an obiter comment in Spiliada, the idea that even if the forum is not appropriate, one should keep the benefit of security, but that’s only when there is also a real and substantial connection to the inappropriate forum (i.e., jurisdiction simpliciter but not forum conveniens). Concurring judgment: Perhaps the benefit of security would stand if the plaintiff could show that if the security was lost, the judgment likely would be unsatisfied. Jurisdiction simpliciter may be assumed here. Westec Aerospace Inc. (1999 BCCA) Page 42 of 101 Facts: Contract between Westec, a BC company, and Raytheon, a Kansas company, involving the transfer of computer technology from BC to Kansas. Contract ends. WestTec argues that Raytheon has not returned source codes argue this amounts to breach of contract in BC. Raytheon went to a Kansas court to get a declaration that they had not breached the contract. Westec commences a breach of contract case in BC. Raytheon comes to BC and argues that Kansas is the appropriate forum to hear the case and that they already have a case commenced in Kansas. Concern of the court is the ongoing problem of the race to the court house: Comity, if applied with vigour, would basically result in that the later court always defers to the earlier court (assuming existence of JS) Unavoidable that such a race will occur: attempting to minimize inefficiency to some extent will inevitably favour the court where the action first originated. BUT: Will only defer to the first court where the second court believes that the initial court house is an appropriate forum If you had a rule which permitted parallel proceedings, then there might not be a race to file, but rather a race to judgment advantage goes to the first party to obtain judgment Held: In this set of facts, held that both Kansas and BC were appropriate forums. Where both forums are appropriate, the race to file will be very influential. Comity suggests that the race to file will perhaps be a determining fact. Here, Kansas was an appropriate forum BC conceded jurisdiction Sufficient connection that there was a reasonably expectation that the case could be tried in Kansas. Comity played a role, even though an international case Teck Cominco Metals (2009 SCC) This case distinguishes Westec. Here the court states that s. 11 of the CJPTA applies even in the existence of foreign proceedings. Foreign proceedings are only one factor among many to be considered under s. 11. To hold otherwise would encourage a first to file system. The desire to avoid parallel proceedings cannot overshadow the objective of the forum non conveniens analysis. (Comment: A foreign court can be said to have asserted jurisdiction when it has been asked to decline its jurisdiction over the matter and has refused to do so, holding that it’s the appropriate forum to hear the dispute.) Court also says that s. 11 merely codifies forum non conveniens and does not supplement or add to it. Page 43 of 101 Court suggests that a distinction be drawn, however, between interprovincial cases which share the same approach to forum conveniens and international cases where the different jurisdictions do not share the same approach. Struck v. Struck (2008 Ont Sup Crt) Limited connection between the plaintiffs and Ontario. No Canadian divorce (American). Court comments that attempting to deal with support obligations in the absence of a Canadian divorce encroaches upon provincial jurisdiction under s. 92 of the Constitution Act. Case shows courts reluctance to split cases, creating multiplicity of proceedings and confusion. Severance of some issues within a case from another is not appropriate. Young v. Tyco (2008 ONCA) Factual issues – the motion judge should accept the plaintiff’s version as long as it has a reasonable basis in the record. Braintech Inc v. Kostiuk (BCCA) Forum non conveniens – a complainant for a libel action must offer better proof that the defendant has entered a jurisdiction than the mere possibility that someone in that jurisdiction might have reached out to cyberspace to bring the defamatory material to their computer screen (to hold otherwise would open the floodgates to multiplicity of action across the world). Van Breda (2010 ONCA) Facts: Motion judge used Muscutt factors to find a RSC between the pltfs and defs in Ontario. (note: remember existence of “forum of necessity” doctrine, codified in the CJPTA, court in this case says that doctrine exists as an exception to RSC) Court modifies how Muscutt should be applied, saying that the presumptive factors in the CJPTA should be considered first, and then look to the Muscutt factors as mere analytical tools which are no longer given equal weight. Court reminds that the factors listed for consideration at the forum non conveniens stage have no bearing on RSC and shouldn’t be considered at the jurisdiction simpliciter stage. The test for jurisdiction simpliciter is whether there’s a RSC, an inquiry that does not turn upon a comparison with the strength of the connection with another potentially available jurisdiction. Page 44 of 101 The core of the RSC test is the connection that the plaintiff’s claim has to the forum and the connection of the defendant to the forum. The remaining considerations or principles (under Muscutt) are analytical tools to assist the court in assessing the significance of the connections between the forum, the claim and the defendant. The American Position vs. the Canadian Position As expressed in Oakley v. Barry: In the United States the Constitution’s due process clause (14th amendment) requires “minimum contacts” between the defendant and the state which seeks to exercise jurisdiction. This is known as the “personal subjection approach.” Basically, it requires that the defendant’s conduct and connection with the forum court be such that he should reasonably anticipate being brought before the forum court. This means that even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the court of another state, even if the forum state has a strong interest in applying its law to the controversy, even if the forum state is the most convenient, the due process clause can kick in to divest the forum of its jurisdiction. This doesn’t exist in Canada. It doesn’t exist because Morguard and Hunt require a more co-operative spirit in recognition and enforcement of judgments by sister provinces. This is partly because Canada has a unitary structure of the judicial system with the SCC at its apex. There is no unitary structure in the USA. Further, the due process guarantee in the USA protects property rights. Our constitution (i.e., the Charter) does not. As explained in Muscutt, the fairness emphasized in Morguard and Hunt concerns not only the defendant but the plaintiff. A plaintiff ought to be able to sue in his home jurisdiction out of necessity for instance. There can be a RSC despite a lack of contact or connection that amounts to personal subjection by the defendant. Per Muscutt, “While the defendant’s contact with the jurisdiction is an important factor, it is not a necessary factor. In my view, to hold otherwise would be contrary to the SCC’s direction that the RSC test be flexible.” Part Three: Recognition and Enforcement of ExtraTerritorial In personam Judgments In BC and across the provinces, foreign judgments can be recognized and enforced in three ways: Sue on the original cause (need to establish jurisdiction simpliciter and FNC however) Bring an action in a BC court on the foreign judgment as a debt Page 45 of 101 Essentially enforcing the foreign judgment that created the debt Common law approach treats in personam claims as enforcement of debt Register and enforce a judgment through legislation In BC, you have two choices: Court Order Enforcement Act (older – likely falling into obscurity) Enforcement of Canadian Judgments and Decrees Act – restricted to Canadian judgments (new) For Canadian judgments, more likely to go under the legislations – tends to streamline the process and eliminate certain steps For international judgments, more likely to use the common law – legislation does not always apply to non-Canadian judgments NOTE: Statute and common law can work together simultaneously Statute does not override the common law – you can choose to use the common law over the statute! Limitation periods: NEW RULE in BC for the enforcement and recognition of non-BC judgments: limitation period to be applied is the one from where the judgment originally arose, or 10 years. – whether you are going under the common law or the statute What if you can’t get the judgment enforced? You can relitigate the substantive matter in the local forum (as long as you won in the foreign forum) – but have to go through jurisdiction simpliciter, FNC, etc. But if you lost in another forum, you can’t just relitigate the whole thing – abuse of process Common Law Enforcement – Pre Morguard There are two requirements for a foreign judgment to be recognized and enforced under common law: Judgment from the foreign court must be final and conclusive Foreign court making the judgment had to have jurisdiction “in the international sense” to decide the matter. Three ways to meet this requirement: Presence: If the defendant was present in the foreign jurisdiction when the action commenced Attornment: If the defendant attorned to the jurisdiction of the foreign court Canadian addition - Morguard – if in the foreign court there is a real and substantial connection between the facts and the exercise of its jurisdiction Nouvion v. Freeman (1889 HL) - leading case on the meaning of “final and conclusive” at common law FACTS originating court was Spanish, and a UK court is being asked to R&E the Spanish judgment HL must decide whether the Spanish judgment is the type of judgment it is willing to R&E RATIO Page 46 of 101 The judgment must be final and conclusive Final and conclusive: it must be the kind of judgment which is res judicata between the parties There will always be an examination of the foreign law relating to the foreign judgment: this is not done in the abstract – the P must provide evidence to the court about the way the foreign judgment operates if the D can go back to the court which gave judgment for variation of the order – it is not final and conclusive for purposes of R&E NOTES a default judgment is final for these purposes family maintenance and support orders are never final in Canada because you can go back to the same court to have them varied – so that is why we have special legislation for R&E of family orders As far as the CL is concerned, a foreign judgment is final and conclusive even if there is an appeal pending or if the defendant still has a right to appeal. It is acceptable at CL to commence an action for enforcement/recognition. This is not the case when it comes to the statutory procedures. NEC Corp. v. Steintron International Electronics Ltd. (1985 Ont. HC) 359 this ON case is how the law in BC works to even if there is an appeal pending or it is permissible to appeal it is still a final judgment – you can commence an action at CL on that foreign judgment BUT you may not register per the statutory scheme, Court Order Enforcement Act, if there is an appeal or the possibility of appeal register a foreign judgment while there is the possibility of appeal BUT you can still commence an action at CL, and once you have a cause of action alive in the province you can seek prejudgment remedies (ie garnishment, Mareva injunction, etc) Jurisdiction of the Foreign Court in an International Sense – Requirement that it be within a foreign court’s jurisdiction Schibsby case (1870) - Older case delaing with traditional laws (rules in process of being formulated some uncertainty) An attempt to defend is equivalent to a voluntary submission to jursdiction If P selected foreign tribunal, then consent. Key factors: residency OR carrying on business in the jurisdiction But recent developments suggest mere nationality/residency is doubtful for grounds of enforcing judgment. Simple location of assets in jurisdiction is not in itself sufficient to enforce Ct of origins judgment Held D had no duty to obey French judgment Suggested in this case that if a resident at time, then obligation is assumed Now date of commencement of proceedings is important - mere presence at time of cause of action arising is not enough Page 47 of 101 Traditional Context summary: - Broad general framework emphasised traditional grounds of presence in jursdiction, consent to jursd (e.g. contract choice of forum clause) OR submission/attonement to jursdiction - Foreign Ct could take ex juris authority but that wouldn't necessarily be enforced elsewhere unless 1 of 3 traditional factors met - Not helpful if person would never go back to that jurisdiction or had no contact ever with that jurisdiction see how it changed with Morguard and Beals (a) Presence Pretty straight forward Mere physical presence – can be fleeting Do not have to be resident or domicile – just present and served Forbes v. Simmons (1914 Alta. SC) 368 FACTS D comes to BC on a fleeting visit to see sick wife; P in BC action serves D with the writ ISSUE Did the BC court have jurisdiction in the international sense – was there presence? RATIO Mere fleeting presence is sufficient if you can get the D served Statutory protection if they are coming to be a witness Cannot trick them into coming Carrick case (1987) - Casual presence at BC football game by Montreal resident football player - Statutory enforcement - Sask s4 of Act: precluded registration as wasn’t carrying on business or ordinarily resident in BC - If CL had been looked to, Ct comments that temp residence in jurisdiction may suffice to take jurisdiction but doubtful re: enforcemnnt perspective Test for presence for enforcement of judgment? At CL, casual presence is enough, but some doubt cast Under statute, casual presence isn't enough Comments: Fleeting presence isn’t enough anymore because of s. 3(d) of CJPTA. There is s. 10 residual capacity though but an argument based on that is a bit of a stretch. Page 48 of 101 Also look at s. 29(2)(a)(i) of RECO… but also 29(6)(b) can’t get registration under Act unless def. was carrying on business and resident – fleeting not looking good! Meaning of “carrying on business” Moore case (1978) - Is a question of fact: 1) Activity carried on by the foreign corporation must be a business 2) Business carried on for a substantial period of time - some sort of intent to be more than casual 3) Business carried on in a fixed place 4) Business must be that of the corporation itself (agency is possible but must be sufficiently linked – i.e. agent has auth to contract on behalf of corporation, is part of corp structure) - HELD: Ds were clearly carrying on business through their agent. D’s applicatoin to set asign the registration dismissed with costs to P (b) Submission / Attornment Things get a little less certain, as the court must examine what the D actually did What was done must have been done voluntarily – submission / attornment must be voluntary There are a variety of ways in which a D may be found – ex post facto – to have submitted to the jurisdiction of the foreign court Defend on the merits = submission First National Bank of Houston v. Houston E&C Inc. (1990 BCCA) 372 FACTS Action in Texas; accepted as a fact that counsel appeared for the D in the Texas action; default judgment; application to set aside via attorneys in Texas Many defences are raised by BC D’s in the BC action to R&E – nerf defence [bottom 376 – D we are concerned with] – argued they did not submit because they did not give lawyers express instructions to submit RATIO test is objective: you do not have to give express, precise instructions to submit – the question is did you submit and did the lawyer who represented you have your authority to participate leaves open that the lawyers could go off on a frolic without authority – if that were the case there would be no submission it was argued that the application to set aside the Texas default judgment could not be found to be submission because that would be ex post facto or retrospective, but the issue was not decided more recent case have dealt with this under the new statute which state that you cannot - have to participated at the original stage which produced the judgment – not Page 49 of 101 definitively settled, but courts are reluctant to find submission from participating at a later stage to have a judgment set aside Clinton v. Ford (1982 Ont. CA) 377 ON, but CL position FACTS similar to Houston fact pattern: the D defended the foreign action on the merits garden variety contract action arising in South Africa both were physically present in South Africa at time of creation of contract; D subsequently moved to ON; P commences a contract action and served the D ex juris (ie in ON); at this time, had the D done nothing, the judgment would not have been recognized in ON what actions did the D take? (this is what must be examined in these cases): entered appearance by mail, filed affidavit of defence and notice of defence; did nothing to object to the jurisdiction of the SA court – he defence on the merits argued: South African law allows the P to seize D’s property before judgment (like a Mareva injunction); P seizes three pieces of property before judgment; there was some precedent for the position that if you act to protect property that cannot be voluntary submission so the quasi in rem jurisdiction is getting jurisdiction by seizing property – a US thing to RATIO can make an no jurisdiction argument without submitting Can make conditional appearance s. 14(5) ECJDA (abolished in BC, s. 14(6.4)) you don’t attorn if challenging jurisdiction, but a general conditional appearance is abolished) could have challenged the validity of the seizure of the property because the quasi in rem doctrine is a way of claiming jurisdiction by seizing property (ie the D left property, must have submitted) as this is about jurisdiction if you appear just to contest validity of seizure of assets = no attornment but if you get into merits of case = attornment NOTES letter to court may be considered submission submit in advance by putting in a jurisdiction clause in a contract The Morguard Rule (c) Real & Substantial Connection A Real and Substantial Connection R&SC is ambiguous which we have never firmly established its content Morgaurd also creates new constitutional principles and changes the CL rule re jurisdiction So now there are constitutional aspects Some Edigner propositions – as per LaForest in Morguard 1. Conflicts rules (and R&E included) are outdated – globalization! living in new world and we need to modernize Page 50 of 101 2. The operating concept is comity; enlightened self-interest; must allow individuals in the new global economy to transact beyond state boundaries – really, without comity we wouldn’t have conflicts rules a all! 3. within Canada, we have the federal principle – comity has a federalism counterpart – must be particularly nice to our sister Provinces – we are all the same for the most part, so it is easier to be nice! 4. Federalism has two operating principles: order & fairness 5. only have to give full faith and credit to judgments of other provinces – only if jurisdiction properly and appropriately assumed 6. “properly and appropriately” = real and substantial connection between the action and the province for our purposes at this point – the basis for R&E (including non-Cnd) that there must have been a R&SC between the action and the jurisdiction constitutional standards – full faith and credit + real and substantial – so all statutory rules and CL rules have to conform to the standard – so not a rule but a standard in theory, the statutory provisions could be challenged on the grounds that they do not conform with the two constitutional principles set out (minimal chance of success, but theoretical state of affairs) Morguard Investments Ltd. v. De Savoye (1990 SCC) 35 Life has never been the same in conflicts or constitutional law FACTS P carrying on business in AB; D living in AB; P grants mortgage land located in AB; D first guarantees then assumes mortgage; D moves to BC; fails to make payments; foreclosure in AB and a pecuniary judgment in AB for the deficiency Before the action was commenced, the D had moved to BC; they were served ex juris in BC D consulted lawyer: finality not at issue; jurisdiction in the international sense - present? No; so best course of action (good and sound at that point) do nothing and do not go back to AB – D did nothing and ought to have been judgment proof P brings R&E action in BC for the pecuniary judgment despite the fact there was no presence or submission P had some basis for thinking there would be R&E; a few BCSC judgments which had adopted a theory that there ought to be more reciprocity in terms of R&E Rationale – if BC would have taken jurisdiction on the facts we should recognize a judgment based on the same facts HELD Jurisdiction because of the real and substantial connection doctrine REASONING / RATIO Third alternative for establishing jurisdiction in an international sense within the Canadian federation presence and submission are a little outdated, we need another option for Canadian judgments a new CL recognition rule only for judgments coming from other Canadian courts – the standard for reciprocity: real and substantial connection Page 51 of 101 We currently interpret as holding that a R&S connection must be between the Province and the action: so fairly broad – can include cause of action, the parties, geographical things what degree of connection does this mean? What level of proximity is required? Minimal? some? Balance? Close? How close must the proximity be? Logically, less than presence : Edinger’s best guess – referring to the kind of connection that every province had in their rules of court or in statute Expressly made the new rule applicable to judgments from other Canadian provinces NOTES Now we have three real alternative options: (1) presence; (2) submission; (3) real and substantial connection Satisfy one of those, the foreign court (Canadian or elsewhere) will have jurisdiction in the international sense D must now try to guess ahead of time if there was a real and substantial connection, which is very, very difficult to guess, even 18 years on after Morguard So D must err on the side of caution – if there is any doubt, the D probably has to make some kind of appearance in the foreign court (and then runs the risk of having the judgment recognized because of submission) Can go anywhere in the world and start your action – and the D has to make an assessment on what the connection of the action and that jurisdiction are – and will most likely have to defend A lot of uncertainty caused by Morgaurd Majority (Majer): Morguard should apply to international judgements Flow of goods and people necessitates liberal enforcement Reciprocity: if the same facts occurred, would Ontario have taken jurisdiction or not? Yes – therefore, not unreasonable that Florida took jurisdiction Not whether Florida would recognize the judgement , but whether Ontario would have taken jurisdiction Not abnormal part of the conflicts of law analysis Ontario family purchased land in Florida = significant engagement with the foreign jurisdiction “Where a party takes such positive and important steps that bring him or her within the proper jurisdiction of a foreign court, the fear of unfairness related to the duty to defend oneself is lessened. If a Canadian enters into a contract to buy land in another country, it is not unreasonable to expect the individual to enter a defence when sued in that jurisdiction with respect to the transaction. Concurring (Binnie): Agrees with the majority that Morguard should apply internationally, but thinks it should NOT be applied blindly to international judgements: There is something different about judgements from another Canadian jurisdiction and from an international jurisdiction (internal vs. external judgements). Dissent (Lebel): Again, agrees that Morguard should be applied internationally, but that we must distinguish between Canadian judgement and non-Canadian judgements Although I agree both that the "real and substantial connection" test should be extended to judgments from outside Canada and that the Florida court properly took jurisdiction over the defendants in this particular case, in my view the test should be modified significantly when it is applied to judgments originating outside the Canadian federation. Page 52 of 101 Specifically, the assessment of the propriety of the foreign court's jurisdiction should be carried out in a way that acknowledges the additional hardship imposed on a defendant who is required to litigate in a foreign country. “Context sensitive jurisdiction test”: must take into account the difficulty of defending in a foreign jurisdiction. Consider: Quality of the justice in the foreign system Real and substantial connection in the international sense impacted by convenience to the defendant How real and substantial a does a connection have to be? Must be strong enough to make it reasonable for the defendant to have expected to have litigated there, even though it may entail additional expense, risk, time, etc. If litigating very burdensome, a stronger degree of connection is required List of burdens to be taken into account: Expenses Inconvenience of travel Finding out the foreign law Corruption and bias But in this case, there was a very strong connection with Florida: any potential burden is outweighed by the strength of the connection! Reciprocity argument: rejects based on an equivalence of jurisdiction Difficulty of finding a balance between enforcing foreign judgements and protecting Canadian citizens: The traditional rules impeded cross-border commerce by making it difficult for judgment creditors to obtain effective remedies against defendants resident in other countries, thus undermining the security of transactions. But an excessively generous test would be unduly burdensome for defendants and might discourage persons with assets in Canada from entering into transactions that could eventually get them involved in international disputes. Ideally, the test should represent a balance designed to create the optimum conditions favouring the flow of commodities and services across state lines. Judgements should travel more easily across provincial boundaries than national boundaries Don’t blindly apply Morguard to foreign judgements: “The "real and substantial connection" test should apply to foreign-country judgments, but the connections required before such judgments will be enforced should be specified more strictly and in a manner that gives due weight to the protection of Canadian defendants without disregarding the legitimate interests of foreign claimants.” Comment: Ted thinks that with the right set of facts, Lebel dissent likely to get picked up by the majority. POST-MORGUARD CASES Page 53 of 101 Beals v. Saldhana SCC held that it was appropriate to continue to apply the real and substantial test to non-Canadian judgments. Thus, if you can prove presence, submission or real and substantial connection, the foreign court will have jurisdiction. The strategic problem for the D who was not present is to decide whether there is a real and substantial connection. If there is any doubt, the D probably has to defend the action. B/c of this very generous Canadian rule, the P can start an action in almost any court in the world and force the D to defend (Edinger likens this to “litigation blackmail”). FACTS action commenced in Florida arising from the purchase of property in Florida by ON residents (confusion about which lot they actually owned) ON defendants filed a first defence in Florida, but under Florida law, you have to file a new defence every time the claim is amended, which it was several times. D didn’t bother filing new defenses b/c they thought they were only on the hook for at most 10,000 and they figured it wasn’t worth it to get legal advice. Finally, in 1990 a default judgment is entered against the Ontario defendants in Florida for more than 200,000 dollars (crazy tripe damages in US law) plus interest. The Ontario defendants consult an Ontario lawyers who tells them that they are OK b/c they weren’t present and didn’t submit (NOTE: this was after Morguard so this was bad advice). By the time the case reaches the SCC, the amount of damages is 1,000,000. ISSUE Does the real and substantial connection test apply to non-Canadian judgments HELD The Florida Court had jurisdiction in the international sense REASONING / RATIO This case extends the R&S connection test to apply to non-Canadian judgments Morguard applies to all judgments, not just Canadian judgments The Court leaves open the possibility this test may be adjusted depending on where the judgment came from and the quality / variety of legal systems around the world: so in this case there is a recognition that there might have to be an adjustment to the standard - or scope of defences – when we extend to other jurisdictions which may not have the same quality of legal system as we have US jurisdictions (as here) on the whole we can usually trust that they conform to similar standards of independence, impartiality, fundamental justice Degree of nexus required to meet the R&SC test: “The “real and substantial connection” test requires that a significant connection exist between the cause of action and the foreign court. Furthermore, a defendant can reasonably be brought within the embrace of a foreign jurisdiction’s law where he or she has participated in something of significance or was actively involved in that foreign jurisdiction. A fleeting or relatively unimportant connection will not be enough to give a foreign court jurisdiction. The connection to the foreign jurisdiction must be a substantial one.” R&SC is now the overriding factor in the determination of jurisdiction, the presence of more of the traditional indicia (attornment, presence, etc) will serve to bolster the real and substantial connection between to the action or parties Page 54 of 101 We assumed until this case that you could show either of the three, now R&SC seems to be the requirement, as demonstrated by the traditional indicia - In Morguard, the SCC stated specifically that you could establish either presence, submission or real and substantial connection. HOWEVER Edigner says as far as she knows, the courts are still using R&SC as the third option – has not fully displaced the traditional indicia There is still a lot of debate about what this case does to the relationship btw real and substantial connection and presence and submission. Parties remain free to select or accept the jurisdiction by attornment or agreement NOTES no other jurisdiction in the world applies the “real and substantial” connection test for recognition and enforcement; we are far more generous. CASE 1: Moses v Shore Boat Builders (1994) BCCA p392 Facts: - Contract to build boat, boat was alleged to be defect Boat supplied from Alaska and P sued in Alaska D said had good defence (4 yrs post-Morguard) on merits but was not going to go up to Alaska (as it could then be enforced against him in BC) Default judgment against D - Morguard makes Alaska judgment enforceable No enforcement prior to Morguard, but now would say there is enforcement. Stay of 60 days of BCCA to let D go to Alaska to sort it out there Ct applied RSC test to Alaska - Case in which Alaska is not acting like Texas - Clear justification that Alaska was connected to this damage suffered in Alaska - K signed in Alberta - D lived in Al at time of K - Boat in Alaska. Alaska had jurisdiction and was properly entitled to hear the case BC Ct applying Morguard - Morguard only applies interprov strictly speaking only obiter for truly foreign entities or foreign jurisdictions BC replies that obiter comment by SCC whether made by the whole Ct or majority should be treated as ratio decidendi. Also looked at comity in modern system Moran case in tort law: Takes approach that in tort law there are no fixed rules but one would look to see if one could reasonably anticipate harm Applying to the case: Boat was made in Alaska specifically for shipping Page 55 of 101 - Test is RSC from perspective of jurisdiction simpliciter because it commented that FNC might be relevant but didn't develop too much On the other hand, have Moses simply applying Morguard and not giving any weight to FNC Braintech v. Kostiuk (1999) (BCCA) Facts: Plaintiff obtained a default judgement against the defendant, a BC resident, for libel and defamation. Defendant had allegedly placed material on a group bulletin board on the Internet that was defamatory or libelous about the plaintiff. Plaintiff had some kind of presence in Texas, sufficient to bring an action in a Texas court against the defendant (Statute directed that even though the defendant was not physically present in Texas, because they were carrying on business there, this was sufficient presence.). Texas court based its jurisdiction its own civil procedure rules which provided that Texas court had jurisdiction simpliciter regarding non-residents doing business in Texas and where the non-resident commits a tort in Texas. Plaintiff, having gotten the judgement, comes to BC to enforce it against the BC resident. Plaintiff was not physically present in Texas and did not attorn to their jurisdiction Held: There had been no presence and no submission/attornement. Presence: BCCA rejected the Texas court’s determination that the defendant was “present” in Texas Lex fori gets to determine the question of presence BC court doesn’t have to accept the Texas determination Here, says that the defendant was NOT present in Texas Attornment: defendant had clearly not attorned to the jurisdiction of Texas, even if they had been served. Thus, apply the Morguard principles: In Texas, court had determined that there was a real and substantial connection because affected Texas resident and “took place in Texas” (but we’re on the Internet!) Court references the American case of Zippo Manufacturing v. Zippo Dotcom (1997): “…the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet. At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. ... At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise personal jurisdiction. BCCA adopts this approach: BC resident fit into the passive category – simply posting information “To enforce recovery of the default judgment obtained in Texas on the deemed proof of use of an electronic bulletin board would encourage a multiplicity of actions the world over wherever Internet was available.” Held: British Columbia was the only natural forum, and Texas was not an appropriate forum. Comity did not require the courts of British Columbia to recognize the default judgment. Page 56 of 101 Will not enforce the judgement because Texas did not take jurisdiction properly – goes so far as to say that Texas court asserted jurisdiction unconstitutionally under US law! Common law defences (or circumstances of nonenforcement) to enforcement of foreign or extra-territorial judgments See earlier notes for public policy defence Otherwise: 1. Fraud; 2. natural justice; 3. public policy Beals is the place to start re current SCC version of CL defences Fraud and breach of natural justice often come up together (the fraud of the P causes the breach of NJ) Ambiguity re defence of fraud in Beals para 50ish – Major J. fraud going to jurisdiction v. fraud going to the merit – as opposed to intrinsic / extrinsic – which actually doesn’t change much Can always raise fraud to jurisdiction – but to raise fraud as to merits, the D must demonstrate due diligence – subsequently discovered, that could not have been discovered at time of trial in other jurisdiction – can’t just sit back and allow the trial to happen in foreign jurisdiction and then when comes for R&E cry fraud Now the case you go to in order to know what the parameters are for the CL defences – fraud, natural justice, exclusionary rules Beals v. Saldanha (2003 SCC) Defence of Fraud Canadian courts generally give a narrow interpretation to fraud in the conflicts context While the traditional Canadian position distinguished between Extrinsic fraud (goes to the jurisdiction of the court- someone on the court has been defrauded into assuming jurisdiction) and Intrinsic fraud (fraud going to the merits of the case) here the courts gets rid of this distinction – NOW: fraud going to jurisdiction can always be raised before a domestic court to challenge the judgment. the merits of a foreign judgment can be challenged for fraud only where the allegations are new and not the subject of prior adjudication. material facts not previously discoverable arise that potentially challenge the evidence that was before the foreign court, the domestic court can decline recognition of the judgment. BUT D must demonstrate that she used due diligence – must exercise due diligence in trying to discover the evidence - must be active – if new evidence comes to light after judgment that would have changed the outcome bring to local court and the BC court can choose not to R&E because there was fraud on the court Page 57 of 101 Defence of Natural Justice Major J. for the majority opts for a general test: Q: is the basic legal system consistent with our concept of natural justice? Binnie J. says it should be a specific test - in this case for these parties Room for argument: Majority is correct in terms of describing what is entailed, but Edinger thinks Binnie’s application is the correct one: so argument for EXAM – choose the one that works Contrary to forum public policy (the huge award) This case reaffirms what was said in the above cases – offensive to forum ideas of morality and justice? this was an exorbitant award – would “shock the conscience of the reasonable Canadian” and that kind of award offends our forum public policy? Court says that sums involved, although they have grown large, are not by themselves a basis to refuse enforcement of the foreign judgment in Canada NOTES What did Beals decide – whether there is an absolute right to claim fraud to jurisdiction or if there are limits: courts have decided that there are some limitations even on a D of fraud as to jurisdiction of the foreign court If the D in that other place knew about the jurisdictional facts and did nothing – that is probably not going to be a successful defence of fraud here = probably won’t even be considered D must show an absence of apathy – some due diligence Old North State vs. Newlands (BCCA) Facts: Contract between a BC company and a North Carolina company. Choice of law clause: apply BC law and parties agree to attorne to the jurisdiction of BC. Contract goes bad. North Carolina company decided to sue for breach of contract in North Carolina. BC company doesn’t show up in North Carolina and a default judgement is issued against them. North Carolina legislation triples damages against the BC company. Punitive damages also awarded. Seek to enforce this judgement in BC. Here, there was a real and substantial connection to North Carolina: BC company operated internationally rather than out of BC Goods were delivered to North Carolina Installation in North Carolina Losses suffered in North Carolina Arguments: BC company argues that the choice of law clause provided BC exclusive jurisdiction over the matter such that North Carolina had no jurisdiction simpliciter - without jurisdiction in the international sense. Judgement in North Carolina should not be upheld because they did not apply BC law or even attempt to. Held: Court agrees that the real and substantial connection could be overridden by an exclusive choice of law and choice of forum clause. Issue then becomes whether the clause in the contract in fact gave exclusive jurisdiction. Foreign law is a question of fact to be proved. But because BC didn’t show up to the North Carolina court, no one was arguing BC law! Page 58 of 101 Therefore, North Carolina court was entitled to assume that the BC law was the same as North Carolina law Doesn’t fit within any of the known defences Legislation which tripled damage and punitive damages were a problem: Penal law: Argument that amounted to enforcing penal law Rejected: not penal law primarily because the money didn’t go to the benefit of the state (might have gotten a different result if the foreign state was directly enriched) Public policy: Argument: against public policy to enforce the foreign judgement, mostly because we don’t award damages this way Rejected: not sufficient that the laws are different. Treble damages not enough to raise moral outrage or be contrary to fundamental justice. Foreign Extraterritorial Measures Act: Federal statute which allows for the non-enforcement of treble damage awards in anti-trust cases Argument: that although this act didn’t apply here, provided an indication that it was against public policy to award treble damages Rejected: not similar enough in these cases Held: North Carolina judgement to be enforced. Goddard Case (1870) Just because the foreign court misapplied the law or misunderstood the facts doesn’t mean the judgment cannot be enforced in Canada. Non-pecuniary judgments Hunt BC asbestos litigation QC has a statute prohibiting companies from producing docs anywhere outside of the Province (defensive legislation against aggressive US anti-trust litigation against Canadians) SCC decides on constitutional grounds that the statue is inapplicable to litigation anywhere in Canada – inapplicable because it is a pre-emptive strike against order from other Canadian courts – it refuses to give full faith and credit like Morguard requires Morguard principles consitutionalised in relation to non=pecuniary The SCC extends the principle that one province must give full faith and credit to the orders of courts of another province to non-pecuniary orders from other Canadian Courts NOTES The question then becomes, once you’ve eliminated the distinction btw pecuniary and nonpecuniary judgment, is there any limit to the recognition and enforcement of foreign judgments. This question was answered in Pro Swing. Page 59 of 101 Pro Swing Inc. v. Elta Golf Inc. (2006 SCC) find online FACTS Pro Swing wanted it’s Ohio injunction and contempt order against Elta enforced by the ON courts after Elta continued to sell is “Rident’ golf clubs which infringed Pro Swings’ “Trident” copyright HELD / REASONING Order was not R&E because found not to be sufficiently precise; however, recognized that such orders may be R&E by Canadian courts if sufficiently precise Because equitable orders require judicial supervisions the imprecision rationale is highlighted in this case: such an order requires the Canadian court to supervise, so must be very clear about what it has to do Equitable orders – there tends to be more of a requirement of judicial supervision which requires judicial renounces AND going back to the court for directions – it is harder to convert because discretion might be exercised differently in the different jurisdictions RATIO ONCA states that after Morguard and the invocation of the comity principle, the courts are prepared to recognize foreign injunctions. But in this case, no, because the pltf wanted enforcement of a foreign contempt order which was penal in nature This is also truly foreign – not Canada – so SCC took a giant leap forward by R&E truly foreign non pecuniary order NOTES The full range of equitable orders that will be enforced is not known Edinger predicts we will see more cases invoking and defining further the scope of this new rule in the future! Also found troubling and prevents form R&E: contempt proceedings are penal in nature and there is a quasi-criminal aspect (ie in Canada you can go to jail) What if the pltf just wanted the consent order enforced? Perhaps the court would have? Look at the consent order as a contract of sorts. See para 28-29. Traditional defences insufficient, must also consider equitable defences, including consideration of how foreign court applied equity Shouldn’t be able to do in a foreign court what you can’t do domestically There was an interesting trademark issue here. Court maj restricted the scope of the enforcement order saying the USA trademark wasn’t worldwide. Perhaps this ruling overrules Beals as applied to trademarks??? Dissent says that sort of reasoning looks to merits of the case and you’re not supposed to do that in a R&E case. Formalism supreme. But maj. Would probably argue that one cannot use comity to give worldwide protection to a US mark Also, what is a final equitable judgment? Maj says it must be final and ultimate decision of foreign court. Dissent would enforce interlocutory judgments as long as they’re final Statutory Enforcement Page 60 of 101 Registration: Statutory method of getting foreign judgements registered in BC. If registered, has the same force as if were a judgement of the BC court. Two relevant statutes: Court Order Enforcement Act – old Enforcement of Canadian Judgements and Decrees Act – new in 2006 REMEMBER: statutes do not wipe out the common law! Rather, can choose whether to take the statutory route or the common law route. Court Order Enforcement Act S. 9: makes it clear that the statute does not eliminate the common law option Even if you register the judgement under the Act, you still have the common law option Even if you fail to get the judgement enforced, can still sue on the contract in the local jurisdiction BUT: reciprocity arrangement - only applies to foreign states that recognize Canadian judgements in return! S. 37: specifies whether the foreign state is one to which the Act applies Applies to all Canadian provinces, EXCEPT Quebec Applies to certain foreign states: Washington, Oregon, Alaska, California, Germany, Austria and Australia Only applies to money judgements! Enforcement of Canadian Judgements and Decrees Act Definition of “Canadian judgements”: Applies to Quebec and civil judgements Goes beyond monetary judgements Under this act you can register foreign judgements that might go to injunctions, intellectual property, etc. Also applies to certain decisions by tribunals: certain tribunal orders will be enforceable as court orders Exclusions: Family maintenance orders Penal law Anything to do with minors Estates "Canadian judgment" means a judgment, decree or order made in a civil proceeding by a court of a province or territory of Canada other than British Columbia (a) that requires a person to pay money, including (i) an order for the payment of money that is made in the exercise of a judicial function by a tribunal of a province or territory of Canada other than British Columbia and that is enforceable as a judgment of the superior court of unlimited trial jurisdiction in that province or territory, and (ii) an order made and entered under section 741 of the Criminal Code in a court of a province or territory of Canada other than British Columbia, (b) under which a person is required to do or not do an act or thing, or Page 61 of 101 (c) that declares rights, obligations or status in relation to a person or thing, but does not include a judgment, decree or order that (d) is for maintenance or support, including an order enforceable under the Family Maintenance Enforcement Act, (e) is for the payment of money as a penalty or fine for committing an offence, (f) relates to the care, control or welfare of a minor, (g) is made by a tribunal of a province or territory of Canada other than British Columbia, whether or not it is enforceable as an order of the superior court of unlimited trial jurisdiction of the province or territory where the order was made, to the extent that it provides for relief other than the payment of money, or (h) relates to the granting of probate or letters of administration or the administration of the estate of a deceased person; Procedures under the Act: S. 6(1): Authorizes either party to apply for directions regarding local enforcement of a non-local decision S. 6(2): gives the court discretion to fine tune an order – the court may: (a) make an order that the judgment be modified as may be required to make it enforceable in conformity with local practice, (b) make an order stipulating the procedure to be used in enforcing the judgment, or (c) make an order staying or limiting the enforcement of the judgment, subject to any terms and for any period the court considers appropriate in the circumstances, if (ii) Appeals: can get a stay if you are appealing a decision in the foreign jurisdiction (iv) Public policy: if enforcing the court order is contrary to public policy, can be kicked out S. 6(3) “blind faith in full faith and credit clause” respecting non-local CANADIAN judgements. (Like Morguard, should waste too much time looking behind other Canadian judgements) Directs that a BC court MUST not make an order staying or limiting the enforcement of another Canadian judgement solely on the grounds that the original court lacked jurisdiction over the parities or the subject matter under private international law or under its own domestic law. Can’t say that they didn’t apply their own law properly Prohibited at looking at whether the original Canadian court had proper jurisdiction assume that there was a real and substantial connection Also eliminates a number of defences: (b) Error of law cannot be used as a defence: doesn’t matter if the BC court would have come to a different decision on a finding of fact or law (c) Cannot raise defect of process: assume that there is no fraud or lack of natural justice in another Canadian court Exception: s. 6(4) – if there has been a default judgement from a non-local province that was obtained without notice to the defendant, then court has discretion to stay the enforcement Page 62 of 101 Cases reviewing the statutory topic after Morguard Question becomes how do you interpret these provisions in the light of Morguard? - Morguard doesn’t directly change the statute. But if there is a phrase that refers back to CL, and incorporates a bit of CL, and this CL has been changed to Mortguard, then the decision in Mortguard comes into the statute. Central Guaranty Trust Co v Deluca [1995] North West Territories Case - D submit that the basic statutory requirements for an application to be made ex parte have not been met Section 2(3) requirement: “judgment debtor personally served with process in the original action”. - Asks if you have been served with process i.e. submitted to jurisdiction of original Ct. Interpret the phrase so as to mean personal service within the jurisdiction of the original Ct – this meaning is based on CL which has changed with Morguard - Statutory rules asks the same thing, Morguard has been incorporated in the EFJ legislation using the Morguard test RSC between jurisdiction and the action - Looking at s2(4), allows for the registration only on the traditional bases. Presence and residence in jurisdiction, agreement, registration (more convenient way on traditional grounds). Narrower than Mortguard, but it still governs Impact of Morguard on s2(3) doesn’t alter the specific requirements of the Act. If choose to reciprocally enforce a judgment under the Act and evidence establishes one of the criteria in s2(4), then the judgment cannot be enforced 2 things to contemplate after Morguard and Beals 1) Whether you want to send enforcement for foreign judgments 2) Whether you want to preclude the effect of Mortguard - but can’t do this interprovcincially, must be done internationally James C Bennet case - Points to strictness of how these EFJ are enforced - If it specifies a time limit, court can’t look to general rules of court to extend a jurisdiction - Court notes it is open to suspend registration but not extend registration - IN OTHER WORDS, the Rules of Court are subordinate to the Act (Recip. Page 63 of 101 Enforc. Of Judg. Act) Choice of Law Choice of Law Methodology Choice of law is part of the common law of British Columbia i.e. the principles that we use in choice of law were developed through the common law After taking jurisdiction, there may be a question about which law applies Domestic court may apply foreign law in some contexts Choice of law is about deciding what the appropriate lex causi is, the law of the court that will be applied Choices are: lex fori – law of the domestic forum lex loci delicti – place of the wrong or infringement lex situs – law of the situs or location of the subject matter (location of the land or immovable) Procedural law is always lex fori Sometimes difficult distinction between substance and procedure Foreign law is a fact that must be pleaded by the parties and proven by expert witnesses No obligation on the other side to do this Technically it applies between provinces, but because of the unifying feature of the SCC, courts do look to other provincial laws and interpret them Choice of law influenced by a number of factors: May be in the contract Comity Government interest analysis Vested rights analysis Expectations of the parties Three questions arise: When is foreign law to be applied? Which foreign law is to be applied? What is the foreign law that needs to be applied? When is a foreign law to be applied? Choice of law only becomes a possibility/issue in the BC court if it is plead you must plead that an issue before the BC court should be resolved through reference to foreign law. Must be able to show as a matter of fact that the foreign law will actually lead to a different result than the BC law BC courts prefers to apply BC substantive law Page 64 of 101 In some areas, choice of law does not arise because of international treaties or because the substantive law is essentially the same regardless of where you tend to be. Even if foreign law may apply, may be a choice not to plead choice of law as it increases complexity and expense Which foreign law applies? The Anglo-Canadian perspective is fundamentally different from the American perspective in most states In Canada (and most of the commonwealth) there is a very mechanical process for determining which law will apply Three step process: Step 1: Characterization – which juridical category does the case fit within? Determined by the lex fori (BC court) – whether the subject matter is tort, contract, marriage, etc. Step 2: What is the connecting factor? For each juridical category, there will be a connecting factor (e.g. tort = lex loci delicti – where the tort occurs, property = lex situs – where the property is). It is the connecting factor that points to the external jurisdiction. Step 3: Lex causi The law of the court that is to be applied Characterization The conflict rules point to the jurisdiction whose laws will govern the subject matter: Each jurisdiction has its own choice of law regime: Even for those jurisdictions that take the Anglo-Canadian perspective, they may nonetheless have different juridical categories. Even if there is commonality in characterization, there may be variation in the corresponding connecting factors. E.g. Even where the issue in the case is put in the contractual category, connecting factor could be: Where the contract was formed Where the contract was performed What was in the expectation of the parties There are many juridical categories, which are determined by the lex fori. May also be subcategories. Whether a particular set of facts fits within a certain category is determined by the court. Connecting factor is also determined by the lex fori = may get a very different result in another jurisdiction Allowing the lex fori to make their determinations allows for some degree of predictability, but there may be wide variation in different courts. Page 65 of 101 There may be a fairly high degree of consistency among common law jurisdiction, but varies widely with civil law jurisdictions. However, between the provinces within Canada, there is a fairly high degree of consistency between jurisdictions for both characterization and the corresponding connecting factors Statutes may affect the juridical category, and more importantly, the applicable connecting factor (particularly true in family law) REMEMBER: Choice of law is trumped in a number of situations: By legislation – may be explicit or implicit Particularly prominent in family law In contract, by a choice of law clause (except when it isn’t!) However, clause is subject to being overridden By public policy: the BC court will not apply foreign law that goes against the public policy of BC Usually this is only an argument of last resort – tough to win on this argument! Choice of law only applies to substantive law, and not to questions of procedure If the matter is procedural, its up to the lex fori to decide (apply BC procedure) Choice of law does not apply where what is being brought in is penal law or revenue law BC courts is not to enforce the penal or revenue laws of a foreign jurisdiction Problems with the Mechanical/Classical Approach Arbitrariness: use of artificial constructs (such as the locus of a tort), ability to recharacterize an issue to reach a desired result No account taken of real conflict of interests between states (not true to assume that the state where the tort takes place necessarily has the greater interest) No systematic account taken of international policies (want efficient ordering of multinational interactions) Alternatives: Issue particularized rather than categorized breaking down to single choice of law issues (e.g. instead of “tort,” look at standard of care, duty owed, etc.) Proper law (k) approach – look to the real and substantial connection Government interests – look to the conflict of state interests, if a true conflict then chose to apply the forum law The better law – consider what will lead to a substantively just result, looking at the parties expectations, the basic policies underlying the area of law, and the certainty and predictability impact of the result. RENVOI Renvoi: the rule that in some jurisdictions the capacity of a nonresident to sue upon a cause arising locally may be determined by the court looking into the law of her domicile rather than local law. An application of the renvoi doctrine occurs when the whole law of a foreign state, including its conflict of laws rules, is looked to for a solution. If Page 66 of 101 reference is to the whole law and not merely the internal law of the other state, then use of the renvoi concept is involved. Common law choice of law rules just reference “the law” of the foreign jurisdiction it does not say whether it is talking about the foreign jurisdiction’s domestic law or its choice of law rules. Civil law systems do not usually use domicile as a connecting factor. Traditionally, civil law systems use nationality whenever CL systems use domicile. CL choice of law rules, do not specify whether the reference is to the domestic law of the domicile or its C of L rules. E.g. if testator dies domiciled in France, but testator was not of French nationality, do the French C of L rules govern? In this situation, it is open to a party who doesn’t want the French domestic law to apply to argue that French C of L laws apply and therefore the law that actually governs the merits of the case is the law of the country of which the testator was a citizen. 95% of the time, the rule is that the choice of law rule points you to the domestic law that is to apply to the merits (e.g. there are cases that say that this is always the case in contracts cases) Renvoi relies on the ambiguity in the choice of law rules to rely either on the domestic law of the legal system that has been selected or its choice of rules. Foreign choice of rules may be the same as the forum’s or they may direct the action back to the forum’s law or they may deflect to a third legal system. There are Two Types of Renvoi: 1) Partial Renvoi – Gives the forum a choice btw the domestic law of the lex causa or whatever domestic law the lex causa C of L rule would apply. The CL cases, w/very few exceptions, reach the result as if they used partial renvoi although they pay lip service to total renvoi. 2) Total Renvoi – occurs when the question asked of the foreign expert is how would your court solve this problem; you just turn the whole thing over to the foreign expert and follow whatever he/she says. The leading case on total Renvoi = Re: Anisley. The Justification for total renvoi is uniformity i.e. that we are trying to produce the result here in the forum that would have occurred if the litigation had occurred in the other jurisdiction whose laws we’ve decided to apply. This is usually a deference to the control of the foreign court over the matter. Total revoi, in Edinger’s opinion, is not useful b/c it leads to uncertainty b/c who knows what the foreign expert will say that his jurisdiction would do. Edinger can’t say which is the law of BC. If you want total renvoi, just ask the foreign expert what his/her legal system would do. If you want partial renvoi, just ask the foreign expert what his/her legal system’s C of L rules would be in the situation. Example from notes: Renvoi – act of sending back. A says apply law of state B, B says law A applies, resolved by saying law B applies except conflict of law rules of B. Invoking and Determining Foreign Law What is the foreign law? Must prove the foreign law before it can be applied in court! Page 67 of 101 What the foreign law is is a question of fact to be argued in the foreign court Must be both plead and proven in order to be applied – this is a common law proposition Under the civil law, if the case appears to require the application of foreign law, then the civil court is required to go out and find out the foreign law In the common law system, the party seeking to rely on foreign law must themselves prove it How do you prove foreign law? Requires the use of foreign law experts Foreign lawyers Law academics Government or business workers BUT courts not necessarily bound to accept the opinions of the experts Courts are entitled to draw their own conclusions about the law – fact finding mission Unless the foreign law is really going to help you, not usually worth pleading May choose not to invoke the foreign law where: (1) it would be pointless to do so (2) where the time and expense required to prove the foreign law would outweigh any advantage to be obtained by its application (3) application of the foreign law would have an unpredictable outcome Amosin v. The Ship “Mercury Bell” (1986) (FCA) Facts: Pilipino sailors working on a Liberian registered vessel. Sailors were hired in Manila and signed individual employment contracts. Once hired on the Mercury Bell, they found out there was a collective agreement on the vessel that allowed for a higher rate of pay. Vessel arrived in Canada, and the sailors decide to sue the ship for the difference in wages. The Canadian Shipping Act directed the court on the issue of choice of law: provision in the Act stated that any matter relating to a ship or to a person belonging to a ship not otherwise covered under the Shipping Act is to be covered by the law of the place of the ships registry = Liberian law should apply Because the statute stated the law that should apply, did not need to plead the foreign law Court agreed that is was to be Liberian law that would govern the contract. Unfortunately, no one could prove what the Liberian law was before the court! Issue: Where it is clear that the foreign law should apply but has not been proven, does the lex fori include the common law or also statutes? Held: In the absence in the proof of foreign law, the foreign law cannot be applied. Therefore, only alternative is to apply Canadian law, but uncertain if should apply just common law, or statutes as well. Page 68 of 101 Court noted that scholars appear to distinguish the two situation – some forums applied only the common law, while other applied the statutes (not very helpful!) Court decides that the distinction between common law and statute is artificial Instead, finds it better to differentiate between the general law of the forum and aspects of the law that were intended to have only local application Result: Canadian labour code should apply, but only partially. Canadian Labour Code should apply to the extent that the collective agreement took precedence over the individual context. Common practice – similar provisions found in other countries BUT provisions dealing with the procedures under the Canadian Labour Relations Board not applicable – too local Hunt v. T and N Plc (1993) Facts: Quebec blocking legislation prevented business documents from leaving the province (prevented discovery). Issue: whether the statute is ultra vires or whether it is constitutionally inapplicable to a judicial proceeding in another province Rule: No reason why judge can’t deal with constitutional issue that incidentally arises in the ordinary course of litigation Jurisdiction of superior court of a province includes decision as to constitutionality BUT power limited: must be real and substantial connection to the forum Held: constitutionality of the law that was to be applied was a question of fact May plead the Quebec law, and then argue that it was not valid on the basis of unconstitutionality follows that the validity of the statute is material Unconstitutional because does not comply with requirement to give full faith and credit to judgements rendered by a court in a sister province inapplicable to proceedings in another province (ultra vires) Laws of a province are not required to be proved as a fact the SCC – it’s competent and capable of applying all the laws of Canada Law of Procedure Tolofson v. Jensen (1994) (SCC) Facts: Plaintiff injured in car accident where his father was driving. Accident occurred in Saskatchewan. Tolofson and his father were BC residents and the car was registered there. Tolofson brought action in BC against his father and Jensen (a resident in Saskatchewan). Saskatchewan limitation period had expired. Issue: common law test respecting limitation periods turned on the wording of the statute: If the statute only barred the remedy – procedural If the substantive right was extinguished – substantive Problem: artificial distinction, turning on bizarre words trying to determine what was meant; if limitations are procedural will lead to forum shopping Page 69 of 101 Looks at position historically: CL courts in UK and US says limitation is procedural This is because of the historical rationale that foreign litigants in the UK ought not to have an advantage that other people don’t have Also because common law looked at a substantive right as existing forever, but your ability to utilize the court system to enforce it is limited by statute Civil law regards it as substantive Civil law is the opposite, views ability to pursue a remedy as substantive A limitation destroyed the substantive right Analysis for choosing between substantive/procedural: RULE: The substantive rights of the parties to an action may be governed by a foreign law, but all maters pertaining to procedure are governed by law of forum If lex loci delicti will be the substantive law, you should give preference to finding the rule as substantive If lex fori will govern, should err toward procedure When dealing with internal Canadian issues – limitations periods are substantive Purpose of the classification is determine which rules will make the machinery of the forum court run smoothly as opposed to those that relate to substantive rights If there is doubt as to whether substantive or procedural, then you should err on the side of procedural The rule of procedure is about convenience for the forum Test is: how far can the court go in applying the foreign rules without inconveniencing itself? Old Reasoning: BC Limitation Act s.9: limitation periods in BC laws considered to be substantive Effect of a limitation period is to extinguish the cause of action, not the remedy BUT doesn’t say how BC court is to interpret foreign limitations s.13: where the foreign law is the lex causi (supposed to apply), and the foreign law is procedural (such that it won’t apply) BC Courts have a choice: can apply the BC limitation OR the foreign limitation, depending on which achieves the most just result – Tolofson nullifies this almost entirely Held (La Forest): The Saskatchewan limitation rule was properly characterized as substantive and hence P’s action is statute-barred Comment: Procedure has been changed significantly by Tolofson CL distinction (remedy v. rights) although somewhat discredited by Tolofson, is still applicable and being used in several areas: e.g. seizure and sue legislation (debtor-creditor) are substantive even though go to dealing with rights rather than remedies; no fault insurance (considered substantive in BC and when drawing it in from another jurisdiction); maritime liens Page 70 of 101 International Exception: Somers v. Fournier (2002) (ON CA) Facts: Action commenced in Ontario arising from motor vehicle accident in New York state between an Ontario resident and a New York resident. Argument for an exception to the lex loci delicti rule: Application of the substantive law of NY would create serious injustice and hence fell under the basis for the international exception cases outlined in Tolofson. In Tolofson, SCC said courts could retain a discretion to apply the local law (lex fori) in international litigation where necessary to avoid injustice Ontario CA says exception was not to be specialized, it should be limited only to compelling and exceptional circumstances Court examines approaches taken by other courts: Hanlan v. Sorensky (OCA) - Court applied the international exception Facts: Plaintiff injured as a passenger on a motorcycle in Minnesota. All parties from Ontario. Held: Ontario law governed since all parties were from Ontario. Considered whether another legal system was more closely connected to the action. Decided that Ontario had a stronger connection than the lex loci delicti and that the court had discretion to apply local law. Ontario residents Vehicle registered in Ontario Injustice would have arisen by applying Minnesota law Wong v. Wei (1999) (BCSC) Facts: Plaintiff and defendant both BC residents. Motor vehicle accident in California. No liability on the part of any other parties. Plaintiff wanted to apply California law because no cap on damages. Defendant wanted BC law. Held: Court avoids substantive/procedural distinction and instead goes to Tolofson tort rule that the law to be applied is lex loci delicti interprovincially but internationally there is a small discretion to apply lex fori Court exercises the discretion and applies lex fori, so no need to decide the cap issue Court used an “unjust” test to decide which law to apply: California law would burden defendant with unlimited damages for non-pecuniary loss Further, BC is the only jurisdiction of persons involved Issue 1: In the application of the substantive law of NY, what aspects of the proceeding are substantive or procedural? Held: Court looks at Tolofson and the distinction drawn between substance and procedure: Substantive law is seen as creating rights and obligations Procedural law is a means to meet those ends Costs: procedural Under NY state law, costs are considered to be substantive In Ontario, costs are dealt with under the civil procedure rule Costs are discretionary on the court Draws a distinction between civil procedure rules and other legislation Page 71 of 101 Costs are incidental to the rights of the party and are a defining part of the civil litigation process thus are seen as being procedural Relate to the machinery and remedy as opposed to the right itself Even though it affects parties, more focused on operating the system (efficiency, incentives) and it is discretionary Pre and post judgment interest: substance Interest arises from the Court of Justice Act, rather than being entirely at the discretion of the court (like costs) While there is some discretion regarding prejudgment interest, it is much more fettered than with costs, which is entirely at the discretion of the courts More importantly, prejudgment interest arises from statute (unlike costs which arise from the rules of civil procedure) = substantive Presumptive right to this, even though it is not absolute Primarily compensatory tool as opposed to costs which are about operating the system Cap on non-pecuniary loss: procedural General conflict of laws principles regarding damages distinguish between an entitlement to damages and the quantification or measurement of damages: Remoteness and heads of damage are questions of substance governed by the lex loci delicti, Whereas the quantification or measurement of damages is a question of procedure governed by the lex fori. The cap was not a bar to the non-pecuniary damages, but was only a measure of the loss recovery. Thus, cap goes to the quantum and is therefore a procedural matter Issue 2: International exception to lex loci delicti (more important) Two arguments: Application of the foreign law would result in an injustice (but injustice must be quite significant and go beyond a mere difference in law) There is an insufficient connection to the lex loci delicti to apply the foreign law OCA looks at Wong v. Lee (OCA): (Howell says this approach is more accurate) Facts: Single car accident in New York to a car registered in Ontario. All of the parties were from Ontario. Insurers were all Ontarian. Reasons: "It is not mere differences in public policy that can ground the exception to the general rule of lex loci delicti; the exception is only available in circumstances where the application of the general rule would give rise to an injustice. Every difference in the laws of the two forums is going to benefit one side or the other and be perceived as unjust to the one not benefiting. Because La Forest J. [in Tolofson] anticipated the exercise of discretion being necessary only in a very unusual case, an injustice that would require a court to exercise the discretion must be something beyond ordinary differences between the laws of the forums. La Forest J. did not articulate the criteria he envisaged for any particular circumstance to qualify as an injustice. Held: Lex loci delicti applies notwithstanding the high degree of connection between the parties and the forum Page 72 of 101 All of the parties were residents of the forum and had no connection with the foreign jurisdiction. However, even in these circumstances the lex loci delicti governed. In Somers, the court adopts the narrow approach to injustice from Wong (i.e. narrow international exception from Tolofson) There were significant connections with NY: NY driver, insurance company, location of the accident Further, there was no substantive injustice to Somers with applying lex loci delicti - no real substantial injustice in part because there is a significant connection to NY Comment: For injustice to occur, a whole avenue of damages would likely have to be cut off by the application of lex loci delicti Ted thinks that the dissent in Wong will likely be adopted in the future (but does not govern now) Wong dissent: Have to interpret Tolofson cautiously – lex loci delicti should not be arbitrarily applied. After all, the context of Tolofson was interprovincial! On the level of comity, it is difficult to see what interest New York State would have in applying its statutory compensation regime to a claim between two non-resident parties litigating in their home forum. In my opinion, the better view is that Ontario has a greater interest in the compensation of an Ontario resident by another Ontario resident being determined by Ontario law, rather than by New York law. An Ontario resident injured in a foreign state by the negligence of another Ontario resident, each of whom was insured in Ontario by an Ontario insurer, should be compensated under the Ontario statutory no-fault compensation regime for personal injuries sustained in a motor vehicle accident. To insist on the application of the lex loci delicti in this fact paradigm would preclude an Ontario court from awarding damages in compliance with Ontario's statutory compensation regime and would, thus, result in giving rise to an injustice of the nature contemplated in Tolofson. Really a question of which state has the greater interest in the outcome of the case! READ HOWELL’S HANDOUT REMEDIES Distinction used to be between rights and remedy - Generally a remedy is a procedural matter, but increasingly is bound up with the substantive law (one can’t just accept this statement) - Maybe not necessarily so, removing remedy such as constructive trust from the substantive law in which it originated (no longer a cause of action) - Option to seize or sue, no fault bars – Quebec or NZ – no fault payments can be taken if action is barred. Restrictions on Remedial Relief: 1) No-fault insurance legn - Be aware of const limit on province to legislate extraterritorially - Situation where in an event that arises in Quebec, that could spill into another Page 73 of 101 - province. BC person accident in Quebec, no fault, can’t sue in tort. Further injury in BC results because of the weakness from the earlier injury. Where does the consequence of the act end? Has there been an intervening cause? If so, then it is a new accident. If it was forseeable as a consequence, then it is linked with the earlier accident. And if this was incurred in the other province, it could limit their ability to bring action. 2) Claims by Unlicenced Persons - Murky area, but talking about mandatory rule of the forum and not something that should be classified as procedural or substantive - Statutes that impose requirements, such as Fraud Act to put something in writing, one could say it is substantive – need to look purpose of the rule that it goes to Q of relationship between the parties. - If classify it as a purpose as being evidentiary, then if it is a matter of proof then it has historically been procedural - Again, hard to say should look at the primary purpose of the rule - Governing relationship btwn parties - To gain proper info to ensure administration of justice DAMAGES General rule: A head of damage is substantive but the quantification or assessment of damage is procedural - This distinction hasn’t always been clear though - How you would classify a rule that would say a lump sum is not to be paid, but the ct may order a structured settlement, eg pay over a period of 20 years (looked at as being more sensible) - Is this to the procedure, saying the admin of justice is not administered properly if they are just given a pile of money - Or is this between the parties? P or D may want it Parties International Assn. of Science and Technology v. Hamza (1995) (AB CA) Facts: matrimonial property action - Swiss society swoops in to say that certain assets belong to them and are not part of a divorce. The defendant (divorcing couple) moved to strike out on the basis that the plaintiffs (a Swiss society) lacked the legal status to sue in AB. Although the plaintiffs were registered in Switzerland and were recognized entities under Swiss law, they were not recognized under Canadian law. Held: foreign individuals can sue, provided they are not enemy aliens Corporations Act – unregistered foreign corps cannot sue regarding contracts carried out in AB Page 74 of 101 Law tends to support granting status where the entity in question is recognized as a legal or judicial person by the laws of its home jurisdiction Looked back to status within Switzerland Supported by comity PARTIES - Similar to Bumper (Indian temple) case Choice of law and parties can be summed up: 1) Law of forum is applied to see if the forum has jurisdiction to hear a particular party 2) That law will ask is that person a legal person in the forum, if a natural person, corporation or incorporated organisation then can act. If not a legal person, can ask if the person is one under the foreign law of that person. If they are a juristic entity in the foreign jurisdiction, will grant that person standing 3) There maybe a mandatory rule of the forum to say something about standing where certain codns have to be met. If they are not registered in the forum, have no right to sue as P for any conduct in the course of carrying on business - Law of the forum to determine jurisdictioniction In making the determination, can be qualified under forum law or foreign law of that foreign person Unless there are mandatory rules as to certain conditions Gathering Evidence and Compellability of Witnesses In common law, most evidence is matter of procedure rather than substance: Competence and compellability of witnesses are matters of procedure BUT standards of proof may be substantive. The means of proving a fact in court is procedural BUT what facts you have to show is substantive. In re Cohen: statutes which establish presumptions (which facts must be proved) are considered to be substantive and not procedural. BC courts cannot compel witnesses which are outside the jurisdiction of BC or force the production of documents outside of BC Forum court needs to enlist the support of the foreign jurisdiction where the witness is or where the documents are Page 75 of 101 Fairly easy within Canada because there is legislation – Subpoena (Interprovincial ) Act: Reciprocating provincial agreement – reciprocating province will accept a court order form BC compelling a witness to testify or produce documents. Therefore, within Canada can indirectly compel witnesses and documents indirectly through the legislation Witnesses and documents outside of Canada are not covered by the legislation: BC courts would then require judicial aid from the foreign court Two ways to seek judicial aid: Apply directly to the foreign court Request the BC court to issue letters rogatory (more common): Request the foreign court’s assistance in the production of documents or obtaining oral examination Even if don’t get witness to come to BC, may be able to do or an oral examination or see the documents in the foreign jurisdiction Difficult to get the foreign court to actually order a person to go to BC, but helpful to get aid of foreign court Discretionary on the BC court to issue the letter rogatory, and also discretionary on the foreign court to oblige - largely a matter comity Canada is member to a number of treaties dealing with evidence taken abroad: May provide for the possibility of an officer from a consulate of embassy taking evidence from a foreign person or document Given the international nature of the world, need for this kind of arrangement Ministerial Discretion The Foreign Extraterritorial Measures Act gives the Minster of Justice the capacity to issue an order denying or preventing a court from accepting letters rogatory from a foreign court – allows the Minister to trump a court decision to compel witness testimony or production of documents Designed to protect against long-armed reach of foreign law trying to interfere with Canadian companies engaging in activities which are perfectly legal in Canada Blocking Legislation Some provinces have produced legislation prohibiting the production of documents to foreign jurisdictions Ed Millar Sales: A court will order discovery and production of documents notwithstanding that disclosure was contrary to foreign law. (General comment: This is Page 76 of 101 usually done in criminal or regulatory proceedings where the lex fori was also the lex causae.) Part Five: Torts See Howell’s handout General/Historical - History was later changed by Tolofson. a) The Rule in Phillips v Eyre (“Double Accountability”) CASE 1: Phillips v Eyre - 19th c. case - Rebellion in British Colony Jamaica Governor of island Eyre proclaimed Martial law in some districts. - Action brought against Eyre in UK for false imprisonments, other torts. Jamaican legislation removed liability from governor and all persons concerned. Found acceptable. - Jamaican law extinguished right to bring action, even if brought in UK. Applied formula from The Halley case - 2 conditions: 1) Wrong would have to be actionable if had been committed in forum (UK) 2) The action must not be justifiable by law of place where act was committed. CASE 2: Pettigrew - D and P were Montreal residents, accident in Ontario - What law applies? - If occurred in Quebec, D would've been liable Meets 1st limb - 2nd limb: No civil action avail in Ontario on these facts. Highway Act barred any action by injured gratuitous passenger - Ct said even though no civil recourse available in Ontario, but Highway Act or maybe Criminal code had been breached. - Said Highway Act s27 “due care and attention” requirement was breached, therefore act was not justifiable. - Gave broad consequence in that rule relating how to justify something - Find situations that wouldn't justify the act. CASE 3: Boys v Chaplain (1971) - Whether Canadian law should be modified to reflect changes from Phillips Road accident in Malta. P and D were brit servicemen. - Issue: Whether P was entitled to damages for pain and suffering, loss of amenities - Under Maltese law no damages, under UK law would recover - How far do we interpret “justification”? Was the wrong justified or not? - Phillips v Eyre rule retained, but focus on lex loci delicti was strengthened b/c rule on Page 77 of 101 - justification changed to "would there be civil accountability where event occurred" From that situation, rule of double accountability focus on whether it was a civil wrong to would there be civil accountability? Ct would have discretion to apply lex loci delicti in any situation appropariate. So it narrowed down rule in engl terms to look at civil accountability HL also carved out discretion to apply lex fori or lex loci deleicti as saw fit. Considerable watering down of Philips v Eyre rule as Cts have the ability to exercise discretion Trends in US + Australia + other Commonwealth - Move away from double accountability rule and prefer one simple rule prefering lex loci delicti The Current Position – Canada Tollefson v. Jensen changed the choice of law for tort overnight! RULE: Juridical category of torts: the relevant connecting factor is lex loci delicti – where the tort occurred Unresolved questions: Does it apply to all torts? Appears that lex loci delicti is was intended to apply to all torts and not simply car accidents, but there are exceptions (e.g. defamation) – could treat as a separate juridical category Canadian cases and commentators have tended to say that Tolofson applies to all torts – uphill battle to go against this What does lex loci delicti cover? Castelles has a list (pretty much everything related to the tort – remoteness, contributory negligence, etc.) Where does the tort arise? There are situations where the action occurs in one place but the consequences are felt somewhere else. In such a case, likely that the tort arises where the consequences of the action are felt. Difficulties also arise when the action arises from interprovincial or transnational transactions. Tolofson v. Jensen (1994) (SCC) Facts: Father and son from BC in a car accident in Saskatchewan with another driver from Saskatchewan. The son was 12 at the time. Under BC law, he had to wait until he was 19 before he could sue, at which time he sues both his father and the Saskatchewan driver. Issue: Under Saskatchewan law, for a passenger to be able to sue the driver you had to show wilful and wanton misconduct of the driver. Page 78 of 101 Lucas v. Gagnon (1994) (SCC) - companion case Facts: Same facts, different provinces. Plaintiff is from Ontario, accident takes place in Quebec. Bring the case in Ontario against the father, who was the driver, and against the Quebec driver. Under Ontario law you can sue in tort both drivers. Under Quebec law, you cannot sue in tort, but can only achieve legislative benefits (no fault scheme). In both cases, determining the choice of law determines the outcome! If the Saskatchewan law applies, the son will not be able to recover (since can’t show wilful and wanton misconduct) If the Quebec law applies, no tort but will get legislative benefit Held: SCC pretty much trashes the law as it existed at the time. Does a survey of the previous law on choice of law for tort: SCC is highly critical of the development of the Anglo-Canadian case law: Notes that the British confuse jurisdiction simpliciter with choice of law; give an unduly strong role to the forum law of England. No reason to retain any of this stuff. Held: From the general principle that a state has exclusive jurisdiction within its own territories and that other states must under principles of comity respect the exercise of its jurisdiction within its own territory, it seems axiomatic to me that, at least as a general rule, the law to be applied in torts is the law of the place where the activity occurred, i.e., the lex loci delicti. Supports with practical considerations: “The rule has the advantage of certainty, ease of application and predictability. Moreover, it would seem to meet normal expectations. Ordinarily people expect their activities to be governed by the law of the place where they happen to be and expect that concomitant legal benefits and responsibilities will be defined accordingly. The government of that place is the only one with power to deal with these activities. The same expectation is ordinarily shared by other states and by people outside the place where an activity occurs. If other states routinely applied their laws to activities taking place elsewhere, confusion would be the result. In our modern world of easy travel and with the emergence of a global economic order, chaotic situations would often result if the principle of territorial jurisdiction were not, at least generally, respected. Stability of transactions and well grounded legal expectations must be respected. Many activities within one state necessarily have impact in another, but a multiplicity of competing exercises of state power in respect of such activities must be avoided. Leaving aside the British practice, the practice of most states favoured lex loci delicti Having adopted lex loci delicti, court turns to whether there are any exceptions: Rejects the possibility of any exceptions within the internal Canadian context Promotes settlement of disputes and within Canada the jurisdictions in Canada are similar enough that it should not create undue hardships. Limited international exception Leaves the door open to tort occurring outside of Canada One of the main goals of any conflicts rule is to create certainty in the law. Any exception adds an element of uncertainty. However, since a rigid rule on the international level Page 79 of 101 could give rise to injustice, the courts should retain discretion to apply their own law to deal with such circumstances, although such cases would be rare. Indeed, if not strictly narrowed to situations that involve some timely and close relationship between the parties, an exception could lead to injustice. Comment: consider the difficult fact pattern where all the parties from one jurisdiction but get into an accident in another jurisdiction Results: Tolofson: plaintiffs lost – no recovery for injury from the accident Lucas: get some money out of the Quebec legislative benefit, but is not able to sue in tort International Exception: Somers v. Fournier (2002) (ON CA) Facts: Action commenced in Ontario arising from motor vehicle accident in New York state between an Ontario resident and a New York resident. Argument for an exception to the lex loci delicti rule: Application of the substantive law of NY would create serious injustice and hence fell under the basis for the international exception cases outlined in Tolofson. In Tolofson, SCC said courts could retain a discretion to apply the local law (lex fori) in international litigation where necessary to avoid injustice Ontario CA says exception was not to be specialized, it should be limited only to compelling and exceptional circumstances Wong v. Wei (1999) (BCSC) Facts: Plaintiff and defendant both BC residents. Motor vehicle accident in California. No liability on the part of any other parties. Plaintiff wanted to apply California law because no cap on damages. Defendant wanted BC law. Held: Court avoids substantive/procedural distinction and instead goes to Tolofson tort rule that the law to be applied is lex loci delicti interprovincially but internationally there is a small discretion to apply lex fori Court exercises the discretion and applies lex fori, so no need to decide the cap issue Court used an “unjust” test to decide which law to apply: California law would burden defendant with unlimited damages for non-pecuniary loss Further, BC is the only jurisdiction of persons involved Issue 1: In the application of the substantive law of NY, what aspects of the proceeding are substantive or procedural? Held: Court looks at Tolofson and the distinction drawn between substance and procedure: Substantive law is seen as creating rights and obligations Procedural law is a means to meet those ends Costs: procedural Under NY state law, costs are considered to be substantive In Ontario, costs are dealt with under the civil procedure rule Costs are discretionary on the court Draws a distinction between civil procedure rules and other legislation Page 80 of 101 Costs are incidental to the rights of the party and are a defining part of the civil litigation process thus are seen as being procedural Relate to the machinery and remedy as opposed to the right itself Even though it affects parties, more focused on operating the system (efficiency, incentives) and it is discretionary Pre and post judgment interest: substance Interest arises from the Court of Justice Act, rather than being entirely at the discretion of the court (like costs) While there is some discretion regarding prejudgment interest, it is much more fettered than with costs, which is entirely at the discretion of the courts More importantly, prejudgment interest arises from statute (unlike costs which arise from the rules of civil procedure) = substantive Presumptive right to this, even though it is not absolute Primarily compensatory tool as opposed to costs which are about operating the system Cap on non-pecuniary loss: procedural General conflict of laws principles regarding damages distinguish between an entitlement to damages and the quantification or measurement of damages: Remoteness and heads of damage are questions of substance governed by the lex loci delicti, Whereas the quantification or measurement of damages is a question of procedure governed by the lex fori. The cap was not a bar to the non-pecuniary damages, but was only a measure of the loss recovery. Thus, cap goes to the quantum and is therefore a procedural matter Issue 2: International exception to lex loci delicti (more important) Two arguments: Application of the foreign law would result in an injustice (but injustice must be quite significant and go beyond a mere difference in law) There is an insufficient connection to the lex loci delicti to apply the foreign law OCA looks at Wong v. Lee (OCA): Facts: Single car accident in New York to a car registered in Ontario. All of the parties were from Ontario. Insurers were all Ontarian. Reasons: "It is not mere differences in public policy that can ground the exception to the general rule of lex loci delicti; the exception is only available in circumstances where the application of the general rule would give rise to an injustice. Every difference in the laws of the two forums is going to benefit one side or the other and be perceived as unjust to the one not benefiting. Because La Forest J. [in Tolofson] anticipated the exercise of discretion being necessary only in a very unusual case, an injustice that would require a court to exercise the discretion must be something beyond ordinary differences between the laws of the forums. La Forest J. did not articulate the criteria he envisaged for any particular circumstance to qualify as an injustice. Held: Lex loci delicti applies notwithstanding the high degree of connection between the parties and the forum Page 81 of 101 All of the parties were residents of the forum and had no connection with the foreign jurisdiction. However, even in these circumstances the lex loci delicti governed. In Somers, the court adopts the narrow approach to injustice from Wong (i.e. narrow international exception from Tolofson) There were significant connections with NY: NY driver, insurance company, location of the accident Further, there was no substantive injustice to Somers with applying lex loci delicti - no real substantial injustice in part because there is a significant connection to NY Comment: For injustice to occur, a whole avenue of damages would likely have to be cut off by the application of lex loci delicti Ted thinks that the dissent in Wong will likely be adopted in the future (but does not govern now) Wong dissent: Have to interpret Tolofson cautiously – lex loci delicti should not be arbitrarily applied. After all, the context of Tolofson was interprovincial! On the level of comity, it is difficult to see what interest New York State would have in applying its statutory compensation regime to a claim between two non-resident parties litigating in their home forum. In my opinion, the better view is that Ontario has a greater interest in the compensation of an Ontario resident by another Ontario resident being determined by Ontario law, rather than by New York law. An Ontario resident injured in a foreign state by the negligence of another Ontario resident, each of whom was insured in Ontario by an Ontario insurer, should be compensated under the Ontario statutory no-fault compensation regime for personal injuries sustained in a motor vehicle accident. To insist on the application of the lex loci delicti in this fact paradigm would preclude an Ontario court from awarding damages in compliance with Ontario's statutory compensation regime and would, thus, result in giving rise to an injustice of the nature contemplated in Tolofson. Really a question of which state has the greater interest in the outcome of the case! Part Six: Contracts The Proper Law Proper law of the K: What is the system of law with which the K has the closest and most real connection? There are five possible connecting factors in contracts: Where the contract was made – lex loci contractus Where the contract was or is to be performed – lex loci solutions Where the parties reside or have main places of business – lex domicilii Where the subject matter of contract is located – lex re sitii Where the case is being brought – lex fori Choice of law in contract is determined by judge-made rules, but beware when dealing with certain types of contracts! Immovables land Page 82 of 101 Principles: Courts involved with contracts where conflicts are involved seek to uphold the contract Court generally likes the autonomy of the parties - give the parties the maximum choice regarding choice of law. Really want to apply a choice of law clause Certainty of commerce – courts don’t want to upset the business community by changing the law When it comes to choice of law, the courts are looking for solutions that foster economic development – what is reasonable, what was contemplated by the parties, etc. Definition of proper law of contract (Castelle, based on Dicey and Morris): The system of law by which the parties intended the contract to be governed or, where the intention is neither express nor to be inferred from the circumstances, the system of law with which the contract has the closest and most real connection. Three possibilities for determining choice of law: What was expressly agreed upon as being the governing law: if there is a clear and unambiguous choice of law clause, then that clause stands However, there are still ways to get around a clear and unambiguous choice of law clause, although much more difficult If no explicit choice of law clause, look to see if the parties impliedly agreed on a choice of law intent of the parties. But what do you look for? Choice of forum clause can be an indication If you can’t figure out the intention, then look for the real and substantial connection between the elements of the contract and the law of a jurisdiction Similar in many ways to implied intent Approach: 1. Look to see if there is express agreement (i.e. choice of law clause in the contract) 2. If not, can the parties be seen to have impliedly agreed to a choice of law? 3. If not, look to what the contract is about (and to some extent also to the people involved) and decide where the most real and substantial connection lies. Note: US courts do not play a very important role in choice of law because they generally just go to real and substantial connection when there is no express choice of law clause Vita Foods v. Unus Shipping Co. (1939) (PC) Facts: Plaintiff had a lot of fish in Newfoundland and wants to get the fish to New York. Plaintiff is a New York company who contracts with a Newfoundland shipping company to ship the fish to New York. Ship runs aground and the herring go bad. Plaintiff comes to Nova Scotia to bring action because that is where the defendant has assets. No question that the captain of the ship was negligent. Bill of lading (contract between the cargo owner and the shipping company) Contract signed in Newfoundland Contract states that the vessel owner would not be liable for any negligence whatsoever Choice of law clause: states that English law will apply Page 83 of 101 Problem: The bill of lading that was signed did not bring in the Hague rules, which balance the liability between the owner and ship under Newfoundland law, the Hague rules had to apply! Thus, under Newfoundland law, bill of lading might be invalid! Important because if you can kick out the bill of lading in its entirety, then you can kick out the no negligence provision! Arguments: Vita Foods argues that because the bill of lading didn’t incorporate the Hague provisions and thus didn’t follow Newfoundland law, the contract was invalid and the common law should govern Unus Shipping argues that the bill of lading is still valid: the no negligence clause stands and the choice of law is England. Issue: Whether the contract bill of lading was valid or not because of its failure to comply with the Newfoundland statutory regime. If the contract is not valid, the common law applies regular negligence rules. If the contract is valid, the no negligence clause stands. Illegality of the contract: Which law deals with illegality of contract – whose law determines that? PC held that you didn’t look to Newfoundland to determine if the contract was illegal or not What is the importance of the choice of law clause? The parties expressed intention with respect to choice of law must be given effect express wishes must be respected to foster economic activity “In questions relating to the conflicts of law, the rules cannot be stated in absolute terms, but rather only as prima facie assumptions. Where there is an express statement by the parties of their intention to select the law of the contract, it is difficult to see what qualifications are possible, provided the intention is expressed is bona fide and legal, and provided there is no reason for avoiding the choice on the grounds of public policy. If you’ve got an express clause, its going to be pretty hard to shake Not necessary for the chosen law to have any specific connection to the facts, the parties of the case in general as long as it was a bona fide choice of law Rule: The only exceptions to an express choice of law clause would be: Where there is a lack of bona fides in the selection of the law OR Where applying foreign law would be against the public policy of the forum In this particular case, the court noted that the parties may have wished to choose a law that is well developed in the area, and England had well developed shipping laws. Insurance companies also likely in England Maritime law ultimately has a large British component Held: English law applied. The express choice of law clause did win out – Privy Council was unwilling to undermine that choice of law clause. Page 84 of 101 Here the choice of law clause was clear – complications related to the legislation and the formation of the contract largely ignored But then up to the English law to determine what effect to give to the Newfoundland statute? In this case, court stated that as a matter of policy the English court cannot be overly concerned with illegality under Newfoundland law. (Remember that it is 1939, and England did not give much effect to foreign law) The fact that the bill of lading was issued inconsistent with the Newfoundland law did not make the contract illegal, and it is therefore not illegal in England But PC noted that if the case had been heard in Newfoundland, you might have gotten a different result probably would have found the contract to be illegal However, finding of what a Newfoundland court would have done is largely irrelevant: perhaps persuasive, but certainly not binding! Result: Contract was valid carrier exemption from negligence applied Comment: express choice of law may not resolve all of the issues of the contract Star Texas (1993) (Eng. CA) Significance: Stands for the proposition that if you have an arbitration clause or choice of forum clause that takes you a particular state, there is an inference that it carries with it a choice of law (even though this is what they didn’t do in this case) Facts: An English company owns the ship and charters it to a Chinese company to ship chemicals. Chemicals spill on board the ship and cause damage. English company brings suit in England. No choice of law clause in the contract, but contract contained an arbitration clause stating that any dispute is to be arbitrated in London or Beijing, depending on the choice of the defendant (if you get sued you choose the forum). But which court gets to interpret the arbitration clause and whether its even valid. Arguments: The Chinese company challenges the ability to bring this action in a British court – supposed to go to arbitration argue that the English Arbitration Act allows them to challenge the jurisdiction of the English court Plaintiff argues that the arbitration clause in the contract should not be given effect – ambiguous, poorly drafted, etc. Therefore, case should go to the English court. Issue: Whether the arbitration clause, because of its relationship to choice of law, was rendered without effect. Does a choice of forum clause raise an implication or lead to an implied agreement as to the choice of law regarding the contract. Was the arbitration clause null and void or void for uncertainty? Basic argument: the choice of law is wherever the matter is arbitrated. Page 85 of 101 Held: Arbitration clauses (and maybe even choice of forum clauses), in the absence of an express choice of law clause, may give rise to an inference that there is an implied agreement as to the choice of law. But if you haven’t clearly chosen the place of arbitration, you have not chosen the choice of law! In this case, the parties probably never thought of choice of law Decided that they wanted to go to arbitration, but no one decided whose law was going to apply! Rule: Where the arbitration clause allows for single situs, then the arbitration clause provides a strong indication of the choice of law But where there is more than one situs, then the indication that they intended a certain choice of law is considerable less strong Held: In the absence of any implied intention, the court must objectively ascertain the most real and substantial connection Here, they determined it to be the law of England. Leading Canadian case on proper law of contract (though not necessarily the leading case in Canada): Imperial Life Assurance Co. v. Colmenares (1967) (SCC) Facts: A Cuban national purchases life insurance in Cuba through an agent of the Ontario company. Cuban moved to the United States and then wanted to cash out on the insurance policy. Insurance company refused, saying that Cuban law at the time prohibited the surrender of the cash value of the insurance policy if you were living in the US. Ontario law did not have such a clause. Case brought in Canada. No express choice of law clause in the contract. Issue: if Cuban law applies, no payout. If Ontario law applies, plaintiff gets the payout. Arguments: Court looks at real and substantial connection: Insurance company noted that the contracts were prepared in Ontario and written in standard Ontario form. Payable in US dollars and the request for cash surrender had to be made to the Ontario office. Cuban argued that the documents were drafted in Spanish, became effective through delivery to the defendant in Cuba, Cuban agent and the insurance had to be authenticated in Cuba according to Cuban law. Reasoning: Lay out a number of factors to be weighed in considering real and substantial connection: Place of contracting Place of performance (but where do you perform an insurance contract?) Language of the contract Place of residence or business of the parties Nature of the subject matter or its situs Domicile If K valid in one law but invalid in another Page 86 of 101 Economic consequences of K Held: As a question of fact, the contract was formed in Ontario – not determinative, but persuasive Insurance contract was based on a standard form contract drafted in Ontario according to Ontario law Decision to accept the risk was made in Ontario Comment: Case kind of skips over the consideration of an implied intention for a choice of law clause, but there really are three considerations. Amin Rasheed Shipping v. Kuwait Insurance (1984) (HoL) Facts: Shipping company incorporated in Libya, carries on business in Dubai, seeking to sue Kuwaiti insurers in an English court. Issue: What is the proper law of the contract? Reasoning: Court looks first at intent of the parties. If there is no such implied agreement, then look to the closest and most real connection to determine the proper law of contract. Court is very clear that there are three approaches, but that implied intention and real and substantial connection are very similar Relevant factors: Most important: No indigenous marine insurance law in Kuwait No Kuwait statutes relating to marine insurance – this is a specialized area, complex contracts, ancient language, could not be governed by regular commercial law and could only be understood by reference to English law “Not good enough to suggest that English law could be persuasive…” Use of an English form Nationality of the parties Sterling Pounds was the currency of the contract Use of the English language in the contract Held: English law applies. Even if Kuwait law was the proper law, could still borrow from English law Mandatory Legislation and Illegality of Contract Two ways to attempt to get around a choice of law clause Attack the choice of law clause itself for not being bona fide Apply the choice of law clause, then attack it for being contrary to public policy Nike Infomatic v. Avac Systems (1979) (BC) Facts: BC company (plaintiff) enters into a distribution agreement with an Alberta company (defendant). Contract had an odd choice of law clause: contract to be governed by the laws of BC, BUT if any provision of the contract contravenes the law of the place of performance, then that provision is deemed to not be part of the contract. Contract to be performed in Alberta. Under Alberta law, distribution agreements of this type were supposed to be registered, but this was not done. Under BC law, there was not registration requirement. Page 87 of 101 Arguments: BC company argues that the first sentence of the choice of law wins the day: BC law is supposed to apply. The second sentence is severable or subordinate. Alberta company argue the contrary: expressed intention (BC law to apply) overridden by the fact that the contract was signed, performed and entered into in Alberta and should be governed by the law of that province. Further, the clause is ambiguous, and therefore the law of the forum should apply (BC). Also argue contrapreferentum if ambiguous, should be interpreted against the drafter. Issue: Effect that should be given to the choice of law clause Cites Vita Foods: express intent of the parties should be respected unless the expressed intent is not bona fide or results in the application of a law that is against the public policy of the forum Quotes Dicey and Morris: “No court ... will give effect to a choice of law (whether English or foreign) if the parties intended to apply it in order to evade the mandatory provisions of that legal system with which the contract has its most substantial connection and which, for this reason, the court would, in the absence of an express or implied choice of law, have applied.” How do you tell if the clause is bona fide or not? If the contract directs you to a law that was deliberately and clearly chosen in order to avoid the application of mandatory legislation in the jurisdiction that has the most real and substantial connection. Consider: Absent the choice of law clause, what law would apply based on real and substantial connection? Is there mandatory legislation that would apply? Was the choice of law clause implemented in order to avoid this legislation? Held: In this case, found that the choice of law clause stood, so BC law to apply Without the choice of law clause, Alberta law would probably apply. Looks at whether there is a connection with BC: Cites Vita Foods in which English law was applied because it was specified in the choice of law clause even when there was otherwise not a very strong connection to England. Here there is a connection with BC, and it was much stronger than what was allowed in Vita Foods defeats any argument about the non-bona fides of the choice of law clause. Although there were very strong connections to Alberta, this did not amount to lack of bona fides and is not sufficient to overcome the choice of law clause. Law Other than the Proper Law (1) FORMATION Law that governs whether there is a contract at all. TWO options: (1) law of the forum OR Page 88 of 101 (2) putative proper law of the contract (law that would have been the proper law of the contract if the contract had been completed). Simplest of the possible choice of law rules for this issue – law of the forum another possible rule floated judicially is the putative proper law which is the law that would be the PLC if the contract had been completed MacKender v. Feldia (1967) FACTS Insurance policy on jewelry store; diamonds go missing; insurer alleges smuggling and argues that makes the contract void—never meant to insure a smuggling operation. contract contains a COL clause stipulating Belgium. Insurers want to bring the action in England and argue that if the contract is void, then the COL clause also does not exist. ISSUE Which law is applied to determine the formation of the contract? HELD Forum law—contract exists so off to Belgium per contract’s choice of jurisdiction clause. RATIO When there is an issue as to whether there is a contract, the forum can apply its own law to determine whether there is a basic agreement (doesn’t have to be a contract in the legal sense). You can use this instead of the putative law of the contract. However, you can also argue that the putative law of the contract should govern. NOTE: See s.10 of the CJPTA Need to apply forum law to determine whether there is a contract. However, this is basic offer and acceptance without any technicalities (consideration is viewed as a technicality). Need to ask whether there was an agreement. What is the role of the forum? It is for the forum to determine if there is consensus – if so – off to PCL Proposition when there is an issue about whether a contract exists (ie formation of contract) the CL court relying on MacKender may apply the law of the forum to decide if there is a basic agreement – consensus ad item - So apply llc to see if there was a basic agreement – not necessarily full contract What is the role of the forum? It is for the forum to determine if there is consensus – if so – off to PCL Proposition when there is an issue about whether a contract exists (ie formation of contract) the CL court relying on McEndermay apply the law of the forum to decide if there is a basic agreement – consensus ad item So apply llc to see if there was a basic agreement – not necessarily full contract Capacity Charron v. Montreal Trust Co: Only Canadian case, a party’s capacity to enter into a K is to be governed by the proper law of the particular K – in this case, the court means the objective proper law of the contract, not a proper law chosen by the parties Page 89 of 101 Greenshields v. Johnston (1981) (AB CA) Facts: Greenshields was an investment broker in Canada with offices in Toronto and Edmonton. Defendant was an Alberta company. Greenshields wanted payment on a commission from the Alberta company. Defendant company had a principle officer who had personal guarantee for payment of the commission. There was a contract signed in Alberta, but Greenshields was mostly an Ontario company and the choice of law was that of Ontario. Arguments: Alberta company argued that the contract was invalid because it did not comply with an Alberta statute that required the contract to be signed before a notary public. Ontario had no such law, and Ontario was the proper law of contract. Which law applies to the formalities of contract? Rule: Contract is valid if it meets the formalities either of the place where the contract was made (lex loci contractus) OR by the proper law of contract. Two connecting factors: As long as you meet one of the two, then the contract will be valid. Choice of law rules meant to ensure that the contract cannot be avoided based on a technicality. Issue: How do you attack this? Three argument attempted in this case, all of which fail: Attack the clause itself - whether the choice of law was a bona fide choice Consider if there was an attempt to avoid mandatory legislation not so here, since Greenshields was mostly an Ontario company Argue that the Ontario law should be ignored because its contrary to the public policy of Alberta Court noted that there was significant connection to Ontario and therefore was not likely to be inconsistent with the public policy of Alberta Argue that the legislation is procedural and therefore the Alberta court must apply it. Failed – legislation went more to substance. Avenue Properties v. First City (1986) (BCCA) Facts: A real estate deal in BC for the purchase of property in Ontario Contract goes sour. Avenue Properties (BC company) bought property in Ontario from an Ontario company. Avenue Properties wanted out of the deal and the Ontario company sues Avenue in Ontario. Avenue comes to BC and seeks a decision that the contract is not enforceable. Choice of law clause: the law to be applied is that of Ontario. Ontario seller had been trolling for business in BC and had not filed a prospectus as required under BC law. Because there was no prospecutus, this made the contract unenforceable in BC. Appears to be a valid contract in Ontario. Issue: Whether the illegality of the contract and its unenforceability under BC law precluded recovery on the contract? Does the BC statute apply? Page 90 of 101 Note: Choice of law clause here is not being challenged. Court notes that it can apply forum law to a contract where: The enforceability of the contract is a matter of procedure The court is compelled by statute to apply BC legislation The failure to apply the forum statute would be inconsistent with public policy Rule: even where the choice of law clause is not in issue, the court may still apply a provision of local law in preference to the foreign proper law of the contract where it is satisfied that it would be contrary to public policy to do otherwise Whether a contract is illegal or not must be determined not based on what would have happened had the contract taken place in BC, but whether the legislation of the forum has extra-territorial application which makes a contract conducted outside the province illegal in BC In other words, does the forum law apply irrespective of the choice of law clause or the proper law of the contract? Tension points: There is a fundamental tension between the concepts that nearly all issues under the contract should be decided by the parties themselves and the obvious desire by legislatures to impose restriction on contracting parties for reasons of fairness, broad social policy or economic regulation. There is a conflict between autonomy of the parties and legitimate regulatory actions by the legislature Held: the BC legislation expressly applied to solicitations within BC for the sale of land outside of the province! This makes it different from the gambling cases! BC legislation had to be respected by the BC court to not do so would be inconsistent with the public policy of the forum. If the legislation is constitutionally valid, then this is one way to undermine a choice of law clause or the proper law of contract. Held: BC law applies. Contract is unenforceable Comment: The choice of law clause could operate, but it was overridden by the BC legislation. However, in Golden Acres, the choice of law clause had to be attacked directly to be overcome. If Illegal Under Where the Contract was Done If the contract is valid under the proper law of contract, valid in the forum, but illegal in the jurisdiction where the contract was entered into and signed Rule: where the contract is done is largely irrelevant Vita Foods: Newfoundland legislation which perhaps made the contract illegal where it was made. Choice of law clause directed action to England. Forum court was Nova Scotia. Held: Newfoundland statute did not apply and did not matter, even though the contract was signed there. Lex loci contractus was not determinative of illegality of the contract. Comment: but if the Newfoundland court was the forum court, then they might have been bound by the legislation to declare that the contract was illegal if: the enforceability of the contract was procedural in nature, or the Newfoundland law had extra-territorial effect. Page 91 of 101 Gillespie Management v. Terrace Properties (1989) (BCCA) Facts: A claim for real estate management fees that arose in Washington State. Property owner was in BC. Property management company was in Washington. Manager of the Washington company was in BC. The property was in Washington. Contract was drawn up in BC. Property owner came to the BC court for breach of contract. But under Washington law, the manager of the property company had to be licensed as a real estate agent in Washington, which they were not. Washington law applied to both resident and non-resident property brokers (i.e. intended to have extra-territorial effect as long as had business in Washington). Onsite management was done in BC (by phone?). BC was the proper law of the contract (not disputed). Contract is being performed in Washington. Held: In order to support its claim for damages, the respondent would have to rely on acts that would have been illegal in Washington if they had been performed. The Washington state law provided that it was unlawful for any person to act as a real estate broker by negotiating in the lease or rental of real estate without first obtaining a licence. The claims for the performance of such illegal acts were not sustainable in British Columbia. The forum court will not allow enforcement of a contract where it would be illegal in the place of performance, even if performing it in BC would have been legal. Forum court get to determine if the contract is illegal or not in the place of performance. Southin (concurring): BC forum court should not enforce the illegality of the Washington contract because it would be contrary to public policy. “The doctrine of illegality is founded on considerations of public policy - not foreign public policy but the domestic public policy of not enforcing unlawful bargains or requiring unlawful conduct. I leave open the question whether this Court must always defer to the law of the foreign state and hold that that which is unlawful there is unenforceable here as contrary to our public policy. But, as a matter of our own public policy, I think we should give effect, in these circumstances, to foreign legislation which is of the same order as domestic legislation.” Comment: Southin’s decision tends to complicate the matter by bringing in a very broad public policy argument. Not the leading approach! However, some academics have disagreed with the approach taken by the court in Gillespie Management: Castelles: There is no valid reasons for Canadian courts to not apply domestic law of contracts where the forum is the proper law of the contract. Argues that illegality at the place of performance is irrelevant should only look to the proper law of contract. To do otherwise is to destroy the foundation of the proper law doctrine. Questions of illegality at the place of performance has nothing to do with this question Applying a strict choice of law analysis, the only relevant question should be: was the enforcement of the contract inconsistent with the proper law of the contract? Comment: Don’t want to dismiss Castelles, but court will be wary of enforcing contracts where they are illegal where they are to be performed. Page 92 of 101 Part Seven: Property In the conflict of law all property is divided into movables OR immovables There are different jurisdiction, choice of law, recognition, and succession rules for immovable property: so whether property in question is moveable or immovable can make a huge impact on the out come of a case classification Hogg An approach (not a definition) to classification Is the property moveable or immoveable?? FACTS SKCA Classification of property for purposes of selecting the proper choice of law rule to see if SK tax can be imposed on the estate Deceased was domiciled in SK; had an estate (property) this case is only concerned with the mortgages which the deceased owned on real property in BC; SK taxing statute imposed tax only on property devolving by or under the law of SK (if SK law applies to determine the question of who inherits the property it can be taxed; if the law of some other jurisdiction applies to this end SK cannot tax on it); that is a choice of law Q – who’s law determines inheritance to the mortgages ISSUE Are mortgages moveable or immoveable property?? CL considers mortgages to be interests in land; statutory treats as interest in land HELD / REASONING / RATIO (1) Step one: decide where the asset to be classified is located Interests are intangible – but land is easy to locate – land in BC so mortgages located in BC . .. (2) Step two: get expert evidence on the lex citus classification – we defer absolutely to the classification of that legal system; of the legal system where the property is located NOTES ie how does BC classify mortgages? Does BC characterize them as moveable or immovables??? Personal property act generally as moveable – BUT moveable can be intangible – you might have to locate intangible property – so you often do step one even for personal property AND occasionally there will be a legal system which will say it is immoveable From here, property already classified as immoveable UK Courts developed specific rules with relation to immoveable property Mocambique rule: no foreign law has exclusive jurisdiction over immovables in UK and, as corollary, a UK court will not assume jurisdiction to decide title of foreign immovables – Page 93 of 101 if a question of title of foreign immoveable arises usually a UK or Canadian court will not assumed jurisdiction This rule was challenged in Hesperides and a more modern HL case dealing with the primary rule of exclusive jurisdiction CASE 2: Mocambique - Haunts modern 21st c. intellectual material - Concerned with land in South Africa, P & D both located in England - Situation arose in SA re: land which one could characterise as trespass of land Qs as to title, possession of land - Both parties within jurisdiction did UK Ct have jurisdiction to enforce trespass in foreign jurisdiction? - Seen as an action relating to damages - Ct did have to get in the question of title. If P found to have better title, will avoid liability issues Issues 1) Ct couldn’t give decision as rights of title/possession of foreign land 2) Ct couldn’t give damages re: interference with foreign land (damages in personam) - 2 disagreed on issue of title that generally accepted a decision as to title or rights to possess land in foreign jurisdiction should be determined by law and Courts of that jurisdiction - Debate as to granting of damages Rule that came in later cases: Other matters concerning land e.g. injury to land, should be left also to law and courts of situs of the land In Mocambique, the Ct was in some doubt as to what it should do had been situations by Cts in equity to say reason why CL Cts were so strict in relation to rights of title/possession because of conveyancing and procedural processes. - In England itself, was procedural practice to do so in local court with local jury - Judicature Act 1873 and 1885 made it clear action could be brought in any country in England (Eng law applies everywhere) - Argued this should be applied internationally as well But it was rejected by the HL, found questions of title and in relation to possession are determined by the law of situs (foreign courts have no jurisdiction in these matters) Comment: Dispute in Mocambique primarily went to title, wasn’t just about the tort of trespass Page 94 of 101 How far to extend the Mocambique lex situs rule? 1) Rights of Title/Possession (to land and immovables) 2) Damages in personam (not involving title/possession) - Subject to criticism in this section too broad? LEX SITUS ---------------------------------------------------------------------------------------3) Other situations concerning the foreign land e.g. damage to the land (beyond pure trespass) | Question area 4) Situations that involve some other area of law (other legal contexts re: land) e.g. contract that might relate to sale of land (land is just incidental, part of the context of the case) Lee v Li case: Fraud occurring in BC but subject matter was land in Taiwan 2-4: Who should be able to exercise judicial authority and where should it apply? - Slippery slope argument - “Local or fixed criteria” and “transitory criteria” – link to IP area of law 2 members of the CA drew a distinction between “local or fixed criteria” and “transitory criteria” but this was rejected (significant for the IP area) Granting of patent - Government grant and applies only in territory Fixed into jurisdiction that grants it Very similar to land (suggested distinction – issues going to validity and title cf issues going to infringement) A lot more formalities (application for grant) Copyright - Broad international treaty basis, protected in all countries under the WTO Any country belonging to the WTO is able to take jurisdiction Transitory ppty right/issue – has no situs of itself In effect it is the ultimate of “immovability” Little scope to challenge the validity of copyright (no formalities) Need skill and judgment for copyright If talking about infringement in jurisdictions other than where it was granted, should be allowed to enforce where the infringement took place (applying laws of the granting jurisdiction) cf validity/title always situs of grant Page 95 of 101 Discussion comparable to title/possession of land cf disputes between parties relating to or concerning land (Mocambique). - This is why Mocambique has been talked about in IP law Court in Mocambique said good reason not to interviere with title/possession is that there is no means to enforce – “come and get me off the land” - Issue injunction, like in Airbus, no effect - - DAMAGES: Slippery slope argument If award damages for trespass to land, how do we know won’t go back to SA and also get damages there? Dispossessed of land in SA – P gets $ in England, but could go back and take land by force and therefore person has BOTH land and damages Therefore shouldn’t entertain any issue of damages English Chancery Division flirted with doing something re: damages but it was rejected in the Mocambique case Hesperides 1979 FACTS P attacked rule of exclusive jurisdiction over immovables in two ways (1) tried to frame action in tort as to not run afoul of foreign jurisdiction immoveable rule and (2) challenged it head on Hotels in the Turkish part of Cypress: immoveable property in Cypress – fixtures on real property – clearly located – clearly immoveable under CL or civil law Furniture: moveable Owners of Hotels are Greek and now in UK because Turks kicked them out; they discover that Aegean Turkish Holidays is booking UK tourists into their hotels Commence action in UK; not directly raising the issue of ownership of the hotels (of the foreign immovables) because of the rule against assuming jurisdiction over disputes about the title of foreign immovables; so they frame their action in tort; claiming damages for conspiracy to trespass, account of profits and an injunction (smart, because if they just went for trespass they would have to prove title – it is a necessary issue even if no once challenges) REASONING No, cannot do an end run this way and avoid operation of the Mocambique rule Direct attach on the Mocambique rule: argument – time for a change, the world has changed; lots of criticism of the rule; rule ripe for change No – rule is used throughout the commonwealth now; deference to Parliamentary supremacy – and they should modify the law; changing could result in forum shopping; circumstances have not changed So there was nothing in the arguments to persuade the HL to change the Mocambique rule RATIO Rule remains – a UK court (BC / Can) will not assume jurisdiction in an action involving any issue of title to foreign immovables Three big exceptions – Courts will take jurisdiction: (1) Contracts related to immovables Page 96 of 101 (2) Equities among the parties as long as the order is in personam – ie Penn v. Baltimore UK court could making an in personam order (3) Context of administering an estate if there is a portion of the estate which consists of a foreign immoveable the court may take jurisdiction to settle questions regarding the estate So what does the Mocambique rule mean practically – you have to go to the jurisdiction where the immoveable property is located to litigate about matters which involve a question regarding the Godley v. Coles ONHC 1988 FACTS ON Ps and ON residents Both Ps and Ds own condos in Florida – Ds own upstairs condo, Ps own bottom No question that condos are foreign immovables Ds toilet leaks and damages the Ps lower condo – clearly damage to immoveable property and to furniture and other movables located in the lower condo – Ps bring action in ON for damages Canadian courts have generally been more rigid with the Mocambique rule than UK ISSUE Should the ON court take jurisdiction? HELD / REASONING Immovables in FA, but everything else is connected with ON and ON court takes jurisdiction over the tort action (title is not an issue) Substantial portion of the damage may well be found to be damage to immovables – so assumes most of the claim will be damages for damage to moveable, and some damage to immovables should not disentitle P from bringing ON action How binding is this type of rationalization to be – can you use it in another claim?? RATIO So can use case to help argue where the bulk or substantial amount of damages is to movables, and a minority of the value of the claim is damage to immovables, a Canadian court will probably take jurisdiction Ward v Coffin - P and D both in NB - K entered into in NB for sale of land in Quebec. Involves title and possession BUT here if able to say that we aren’t dealing directly w/title and possession we are acting in personam against parties themselves. So in seeking specific performance against D, we are saying in NB that you are subject to our jurisdiction in personal sense, you have to in personam take nec steps to make in rem changes in Quebec. Page 97 of 101 - - - - - In effect, by ordering spec perf, Ct changing possession/title to ppty in Quebec. BUT bc both parties, esp D was in NB, and was going to stay there, then there is in personam juris that courts can use to require person to do something up scale. Different than saying title to Quebec property belonged to X and then holder of judgment to take it to Quebec to ask for enforcement. Quebec court would say no bc seeks to deal w/ title in Quebec. NB had no juris BUT if you don’t have to go to prov or country where land is situated and have personal juris over parties, then can say we ordered party to make nec changes in Quebec. So parties don’t have to go to Quebec court to enforce bc NB has power over the party e.g, can order contempt of court. Action in personam is indirect way around title problem. BUT if parties moved out of NB, then NB could order whatever it wanted but no personal (power) over party. BUT contempt of court issued in NB may be enforced in other prov bc of Morguard. If impossible for D to comply with order, e.g., D says I went to Quebec and attempted to transfer property to P but bc of formalities weren’t entered into wrt property, Quebec won’t accept docs. If performance is impossible, in personam won’t work. If D makes bona fide attempt, but unable bc of lex situs law, then no consequence to D. SO if dealing with Contract like this, court asked is k was valid? - Can be valid in either in lex situs OR lex contractus (law where k was formed or law where land is situated). Lee v. Li (2002 BCCA) 14 The trial judge rejected the argument that she should decline to exercise jurisdiction to avoid conflicting with probate now proceeding in Taiwan. She said that the defendants had "more than ample opportunity" to commence proceedings in Taiwan at an earlier date and held that it would be "grossly unfair" to decline jurisdiction after a full trial on the merits because of recently brought litigation in Taiwan. She reasoned that she was not dealing with land situate abroad but with "the conscience of the defendants". She stated that a finding of fraud could be an effective means of resolving the dispute as it could lead to an award of damages for the deprivation of benefit under the wills, and, accordingly, she concluded that it was "fair and just" that she retain jurisdiction over the action. Catania case (1999) - Deed entered into in Canada (Ontario) in 1993, whereby house in Italy gifted to certain persons (appellants). - Had been a will earlier executed which had also left land to appellants (but not effective until death) - Will was subject to certain restrictions (right of way & first refusal on sale to certain Page 98 of 101 - party) Challenge to validity of deed on basis that the father was mentally incapable of understanding what was going on. Not contract, but case of equitable relief sought. Not making direct order wrt Italian land but making order that deed made in Ontario was invalid. Parties didn’t meet criteria here, esp relationship btwn in rem and in personam re contract and equity. Propositions: Ct must have in personam juris over D, if not then no point. P must be able to serve D with notice or D must submit to juris of court. 4 criteria 1) Person has to be in province or submitting to prov. 2) Personal obligation btwn parties (in this case, obligation was missing) Juris can’t be exercised against strangers. 3) Juris cannot be exercised if local court can’t supervise execution of judgment - (so like Airbus-will just be ignored otherwise) 4) Can’t order it if of no effect in situs - so if it requires action to be taken in situs and w/o action it won’t be effective, then court shouldn’t issue order Duke v. Andler SCC 1932 Canadian CL rule for R&E of foreign judgments dealing with immovables – still good law FACTS CA takes jurisdiction in a contract action re sale of BC land and makes an order for specific performance to re-convey title (an in personam order) … but to affect title There is a re-conveyance executed by force in CA; P comes to BC and commences action of declaration that they are the owners of the BC land by either the CA conveyance OR by virtue of the CA judgment A BC court might have done the same thing – contract; equitable remedy; remedy for breach Should BC R&E judgments from courts which exercise jurisdiction on the same basis we would?? Answer given by SCC is No! RATIO Would not R&E because it involves immovables in BC and do not want foreign jurisdictions playing around with our immovables California judgment may have been in personam, but the property is in BC and BC courts won’t stand a foreign court deciding what will happen to land here. If you want specific performance to convey immovable property, you better go to that jurisdiction to litigate b/c the courts in that jurisdiction are the only ones who will have the ability to convey title to that immovable property. You can try to get specific performance in another jurisdiction, but the defendant may not obey the in personam order. Page 99 of 101 Chapman Estate v O’Hara Case - Admin of estate Adminstrator and all parties are in Manitoba. Proceedings brought in Manitoba and Manitoba exercises in personam relief against O’Hara re: land in Sask O’Hara lost in Manitoba and came to Sask and filed lis pendens to title (litigation pending against land) sought to bring proceedings on same issue in Sask that as an inpersonam judgment it could not conclusively determine the title to land in Sask Issue: would Sask re hear case? - - Manitoba Ct had no jurisdiction to remove the lis pendens but did have territorial jurisdiction over O’Hara to enforce a warrant for contempt should he again to to Manitoba where it could be enforced But D said he wasn’t going back to Manitoba. Held: No abuse of process bc matter already litigated through to CA in Manitoba. Issue: Bigger question was should Manitoba court have taken juris? - Manitoba Ct had through control of admin and admin of estate, the power to see that title to Sask land was conveyed to proper party without using Sask Ct Could ensure transfer in Sask could take place without resort to Sask. O’Hara said property should be held by him. Administration could pass property to anyone, administration by going to Sask wanted to transfer property. O’Hara could only stop this by asking Sask court to intervene BUT Sask consent wasn’t needed for completion of action by administration cf Calif case no control over parties in personam sufficient to require them as indiv to make transfer, but then had to go to BC to enforce Howell asks: Can you enforce your in personam order? - If so, good, if not, don’t make order. - Sask court has said it wouldn’t hear case already, so D can’t bar. - Second limb of Mocam rule Damages to immovable If you can get around other branch by in personam, why not allow this limb to be litigated anywhere? Noone really disagrees about title/possession rules. Decision should be based on forum conveniens for 2nd branch Monetary award should be enforceable esp if P and D in same province. Page 100 of 101 Important to go back to enforcement of judgments Divide btwn 1) in personam pecuniary judgments 2) other judgments Judgments are enforced on the basis of debt. - Therefore, order by way of injunction/specific performance or other order-based action, instead of enforcing debt, are NOT enforceable Question about position after Morguard/Hunt Hunt SCC indicated that Ct of any province could rule on constitutional validity of legn of other province because: 1) SCC oversees 2) judges are federally appointed 3) same ethics throughout Canada legal profession Have we reached point where non-pecuniary judgments should be enforced interprovincially so that if an injunction is granted by one prov against a person in another prov it should be enforced Case where Interlocutory order of Quebec was enforced in BC - If we have constitutionalized things is there any need? Ought there be any continuance of rule that only pecuniary in personam judgments that are enforceable? Why no other types of judgments? All fit themes of Hunt/Morguard. Prof Howell thinks its time where these types of orders will be enforceable Thinks it will challenge title/possession eventually - Will challenge 2nd branch of the Mocam principle - Look at O’Hara case, seems that Manitoba was most appro court to hear proceeding, since most parties and estate were in Man. Seems foolish in light of Hunt-one country one system, etc. Would NOT extend to international situations. ALTHOUGH Bealscourt has lost the ualms they used to have wrt enf foreign judgments. So not impossible for it to occur internationally but long way off. Choice of Law Issues and Property Page 101 of 101 Capacity: The courts tend to apply, as a universal rule, the law of the situs to govern all questions relating to one party’s capacity to transfer immovables. See Landry v. Lachapelle.
