I. INTRODUCTION

This is the Sixteenth Report in the Community Law Reform Program. The Program was established by the Attorney General, The Hon , F J Walker, QC, MP, by letter dated 24 May 1982 addressed to the Chairman of the Commission. The letter included the following statement:

This letter may therefore be taken as an authority to the Commission in its discretion to give preliminary consideration to proposals for law reform made to it by members of the legal profession and the. community at large, The purpose of preliminary consideration will be to bring to my attention matters that warrant my making a reference to the Commission under s10 of the Law Reform Commission Act 1967.

The background of the Community Law Reform Program is described in greater detail in the Commission’s Annual Report for 1982.

II. BACKGROUND TO REFERENCE

1.2 In response to publicity about the Commission’s Community Law Reform Program, Mr J L R Davis, a Reader in Law at the Australian National University wrote to the Commission in 1986 drawing attention to the need for reform of a rule of the law, as set out in the case of British South Africa Co v Companhia de Mozambique.¹ The rule of private international law now known as the rule in the Mozambique Case, provides that, subject to various exceptions, a court has no jurisdiction to entertain an action for the determination of title to, or the right to the possession of, any foreign land or other immovable. Nor can a court hear an action for the recovery of damages for trespass to such land or immovable. Jurisdiction cannot be created by the agreement of the parties and it makes no difference that the defendant is not amenable to the jurisdiction of any court in the jurisdiction in which the. land or immovable is situated. The rule has been extended by analogy to patents registered outside the jurisdiction.

1.3 Preliminary research showed that the rule originated in a technical doctrine of pleading which is no longer relevant, although its continued existence could be justified to some extent by the principle that a local court should not assume jurisdiction in a matter in which its judgment cannot be enforced, However this rationale was found to be no longer universally acceptable within Australia since the passage of Part IV of the Service and Execution of Process Act 1901 (Cth) and the greater readiness of courts to recognise judgments of foreign courts, a phenomenon reflected in the practice of private international law throughout the world during this century.

1.4 A further reason for believing that the rule no longer has any justification is the recent development of the doctrine of forum non conveniens which provides a basis for a local court to decline jurisdiction where a foreign court is the more natural and appropriate forum. That doctrine has yet to be accepted as part of Australian common law (see para 1.8) but the Commission proposes that it should be embodied in legislation (see Appendix A) . The Mozambique rule allows a local court no discretion in the matter regardless of the wishes of the parties and regardless of the convenience of litigating here a matter which has some connection with land or immovables situated outside of the state. Reform has occurred in other jurisdictions such as the United Kingdom.²

III. TERMS OF REFERENCE

1.5 A background paper was prepared on the matter by the then Commissioner in Charge of the Community Law Reform Program, Helen Gamble, and was made available to the Attorney on 22nd October 1986. On the 22nd December 1986, the then Attorney General, the Hon Terry Sheahan BA, LLB, MP, made the following reference to the Commission.

To inquire into and report on:

(i)whether the rules of private international law stated in and derived from British. South African Co v Compahia de Mozambique (1893)AC 602 should be wholly or partially abolished; and

(ii) any related matter.

1.6 Thereafter the Commission engaged Mr Davis to prepare a draft report. This was completed by early 1987. The Commission wishes to place on record its debt to Mr Davis, whose extensive work on the subject forms the major part of this Report.

1.7 The draft report by Mr Davis was considered by the Commission in 1987, and the report was kept in substantially its present form (apart from Introductory Matters and the legislation in Appendix A). For the purpose of the reference a Division was constituted, consisting of the Chairman, Helen Gamble, Justice Rogers of the NSW Supreme Court, Professor Colin Phegan and Mr JLR Davis.

1.8 With the exception of this paragraph the, report in its present form was substantially completed in June 1988 when it was delivered to the Attorney General as a Memorandum. It is now printed for tabling and publication. The Commission records that its stated expectation that the High Court would endorse the doctrine of forum non conveniens was disappointed when a majority rejected the application of the doctrine in Australian common law.³ This decision has received a less then enthusiastic reception ⁴ and it is not surprising that the High Court has recently granted special leave to allow the issue to be reconsidered.⁵ The cross-vesting scheme (discussed below in paras 7.2-7.4) has provisions for transfer which have been interpreted as conferring within Australia the same broad discretions as are part of the forum non conveniens doctrine. ⁶ Our recommendation ensures that these discretions will be available in any case where jurisdiction is conferred as the result of the proposals made in this Report (see para 8 .2) .

IV. IMPACT OVERSEAS

1.9 As part of a consultation process, the Division sought guidance from the Federal. Attorney General’s Department and the Department of Foreign Affairs as to the ramifications any abrogation or limiting of the rule may have in overseas countries. The Commission would like to thank Ms Alison Pert, and Messrs Owen James and Henry Burinester of the Attorney General’s Department for their help in this respect.

1.10 The Report will, in the succeeding section, describe the existing state of the law both in New South Wales and other parts of the common law world. Consideration will then be given to the reasons which have been advanced for the continued acceptance of the rule, followed by a discussion of the criticisms levelled at the rule and the arguments supporting its abolition. The Report concludes with a proposal for a legislative amendment to abrogate the rule. Chapters 2 and 3 of the report give an outline of the current law in New South Wales and overseas, based on the Mozambique principle. Chapter 4 sets out some of the exceptions to the rule, while Chapters 5 and 6 examine the various arguments for and against its retention. Chapter 7 comments on the implications the new cross vesting legislation has for the reference. Finally Chapter 8 considers the application of the particular reforms proposed. Appendix A contains draft legislation to implement our proposals: we are grateful to Mr D R Murphy QC, Parliamentary Counsel, for his assistance in preparing this legislation.

FOOTNOTES

1. [1893] AC 602.

2. The rule was partially abrogated in the United Kingdom by s30(1) of the Civil Jurisdictions and Judgments Act 1982.

3. See Chapter 2, footnote 11.

4. See M C Pryles, ‘Judicial Darkness on the Oceanic Sun’ (1988) 62 ALJ. 389.

5. Voth v Manildra Flour Mills Pt.v Ltd, 7 August 1989 (special leave granted: see [1989] 14 Leg Rep SL 1.

6. Bankinvest AG v Seabrook (1988) 14 NSWLR 711.