I. INTRODUCTION
6.1 The rule which was affirmed by the House of Lords in the Mozambique case and regarded by the courts in this country as stating the law for Australia has two aspects. Jurisdiction is denied (a) in actions for damages for trespass or other torts concerning foreign land; and (b) in actions for the determination of other matters relating to or affecting foreign land. The first of these aspects has evoked universal criticism throughout the common law world. This criticism is considered in the immediately succeeding paragraphs. The second aspect, although not causing such widespread condemnation from commentators, may also be regarded as an unnecessary restriction on the power of the New South Wales Courts. The reasons for suggesting the abolition of the second aspect are set out in paras 6.11 et seq below.
II. DAMAGES FOR TRESPASS AND OTHER TORTS
6.2 The criticisms of this aspect of the Mozambique rule, and consequent reasons in support of its statutory abolition, may be grouped under four heads.
A. The Rule is an Anachronism
6.3 The American Law Institute, in its Restatement, Second, of Conflict of Laws, s87, comment a, sums up the thrust of this criticism, As the comment points out this aspect of the rule limay be explained only in the light of history “in the assumption made in medieval. England that jurors had personal knowledge of the facts in issue. The comment then observes:
What is surprising is that the rule remained in effect long after jurors were no longer required, or even permitted, to have personal knowledge of the facts of the case.
The same point was made rather more forcefully by Professor Beale, in his Treatise on the Conflict of Laws.1 Referring to the seminal United States decision of Livingston v Jefferson which had stated the same rule, he said that both that case and those which had followed it were “an example of stare decisis in its worst aspect- namely, blind adherence to precedents.”
6.4 It is not only academic writers who have regarded the rule as depending for its validity on an historical development that has had no relevance for many centuries. In Little v Chicago, St Paul etc Rly Co,2 the Supreme Court of Minnesota declined to follow Livingston v Jefferson, In giving the reasons for coming to this conclusion, Mitchell J said:
If the courts of England, generations ago, were at liberty to invent a fiction in order to change the rule that all actions were local, and then fix their own limitations to the application of the fiction, we cannot see why the courts of the present day (sc 1896) should deem themselves slavishly bound by those limitations.3
B. The Rule creates Anomalies and Arbitrary Distinctions
6.5 Because the Mozambique rule is so much a product of judicial development over the centuries, and because that development does not always form a coherent whole, it is not surprising that authors have been able to criticise the rule for its apparently haphazard application.
6.6 One such example has been referred to earlier in this Report (see para 1.13). While proceedings between an original tenant and the assignee of the reversion, in relation to matters affecting the subject matter of the lease, are regarded as transitory, and thus not within the rule, proceedings between the original landlord and the assignee of the lessee in relation to the same matters are classified as local, and the Mozambique rule applies.
6.7 A further example has been given both by Fry LJ in the Mozambique case4 when it was before the Court of Appeal and (in a slightly modified form) by Scott LJ in The Tolten.5 it is that if the same act or omission in a foreign country by A causes damage to B’s house, to his chattels and to him personally, and both A and B subsequently came to New South Wales, B may sue A in the courts of this State for the damage to his chattels and to his person, but not for the damage to his house.6
6.8 A final illustration of the fine distinctions which have arisen as a result of the Mozambique decision was adverted to by the Canadian writer, Professor Hancock.7 That decision is concerned only with actions relating to “land”, so that, if the subject matter of the suit is not the immovable property, or a fixture thereon, the suit may be classified as transitory. Thus, a suit in trover for cutting timber in Ireland has been held by the court of King’s Bench in England to be transitory,8 as has an action in England for conversion of sand dug out of Ocean Island, in the Pacific.9
C. The Rule may be Productive of Injustice
6.9 Reference has already been made to the circumstances in which the rule may be one reason for denying a person any effective remedy for a wrong done to property which he or she owns overseas (see above, para 2.26). If the wrongdoer has no assets located in the country in which he or she committed the trespass or negligence then, although the courts of that country may assert jurisdiction over the wrongdoer, that exercise of jurisdiction may well not be recognise by the courts of the country in which the assets are located, and any judgment given cannot be satisfied. The courts of the country in which the defendant’s assets are situated will not, however, themselves take jurisdiction to hear the action, by reason of the Mozambique rule.
D. The Rule is Illogical
6.10 The argument has been advanced 10 that for the courts to decline jurisdiction to hear an action in tort for damage done to foreign land, yet to accept jurisdiction to enforce a contract or equity between the litigants, cannot be founded on any rational principle. This argument proceeds from the proposition that the exception to the Mozambique rule developed by the Court of Chancery was justified on the basis that the court is acting only in personam, on the “conscience of the defendant”. But, it is then pointed out, an action in tort for damages, whether the plaintiff seeks reparation for personal injury or for damage to his real property, also operates on a purely personal level. Any judgment is awarded against the defendant personally and must be satisfied from such of his assets as are located within the court’s territory, whatever the substance of the wrong done. If, therefore, the Equity Division considers itself capable of making an order, directed to the defendant personally, the effect of which may impinge upon foreign land in the defendant’s possession, there appears to be no basis in principle for the Common Law Division refusing to entertain proceedings, the result of which would be a judgment against the defendant personally, when the cause of action on which that judgment would be based is trespass or another tort relating to foreign land.
III. ACTION FOR POSSESSION OF LAND
6.11 In so far as the Mozambique decision is authority for the proposition that a court in one country or State will not entertain an action to determine title to, or the right to possession of, foreign land, it has been subjected to little criticism either academic or judicial. Thus, one of the leading English textbooks on the conflict of laws11 accepts that this aspect of the rule is “based upon the practical consideration that only the court of the situs can make an effective decree with regard to land”. While this proposition cannot be denied, it scarcely provides a justification for the present state of the law. The Mozambique rule prohibits the acceptance of jurisdiction, not only when the plaintiff seeks a decree relating to the ownership of land, but also when he or she seeks the resolution of issues which have some connection with land outside the court’s territory, even though that resolution may be effected by an order binding on the defendant personally and not requiring execution against the land itself. For example, in Corvisy v Corvisy12 McLelland J declined to issue an injunction against the defendant, simply because the land upon which it was sought to enjoin the defendant from trespassing was outside New South Wales. The plaintiffs sought only a decree addressed to the defendant, and not an order which would in any way have affected rights in relation to land, but were denied even judicial consideration of that matter by reason of the Mozambique rule.
6.12 The principal reason for recommending legislative abrogation of this aspect of the Mozambique rule is that the law as it now stands, taking account of the exceptions to the rule which have been employed by the court when exercising jurisdiction in equity or in the administration of deceased estates, is far from clear and has led to the drawing of distinctions which appear to have little rational basis. Furthermore, there are circumstances in which the operation of the Mozambique rule leads to unnecessary expense and delay for litigants. A final reason for the recommendation is that the jurisdiction of the Supreme Court will shortly be expanded considerably, on the coming into force of the complementary scheme for the cross-vesting of State and federal jurisdictions; but will, by that same scheme, be subject to limits based on the Court regarding itself as the most appropriate forum for the resolution of a dispute. The Commission therefore regards the time as opportune to recommend a further expansion of the court’ s jurisdiction, but subject to the same restriction, that such increased power would be exercised only if it were the most appropriate forum. Each of these reasons will be dealt with in turn.
6.13 While the Commission proposes the abolition of the Mozambique rule, it does not suggest that a New South Wales Court should determine matters which would entail it making orders as to the title to land outside Australia because such orders are likely to be ineffective. The Commission’s recommendation is that, if a matter before the Court involves, directly or indirectly, land outside the country, the judge should first determine the most appropriate forum for the resolution of the issues between the parties. only if a court of this State is the most appropriate forum should the matter be resolved in that Court. If that Court is not the most appropriate forum, the action before it should be stayed in order that proceedings may be commenced in the courts of ,another country. This issue is considered more fully in paras 7.5 et seq below.
A. Lack of Clarity in the Law
6.14 It has been explained above (see paras 4.4-4.6) that, based on the decisions in Penn v Lord Baltimore 13 and Lord Cranstownb v Johnston14 the court in its equitable jurisdiction has the power to make an order, directed to the defendant personally, the effect of which may well impinge on the title to, or right to possession of, foreign land. But it has also been pointed out that this exception to the Mozambique rule depends upon there being an “equity” between the litigants. The lack of clarity in the law arises from the fact that the circumstances for the fulfilment of this condition are difficult to determine. As Dicey and Morris 15 point out, if “A agrees to sell foreign land to B, and instead conveys the land to C, who has notice of the contract, C is [for these purposes] a stranger to the equity” and the equitable exception does not apply.16 However, “if a company creates an equitable charge on land in favour of debenture-holders, and sells the land to a purchaser subject to the mortgage lien or charge now subsisting, and the purchaser expressly undertakes to pay the debentures and interest, the court has jurisdiction to entertain an action by the debenture-holders against the purchaser”.17 The authors go on to observe that the distinction between those two situations is tenuous and difficult to reconcile with equitable doctrines of constructive notice.
6.15 A further example of lack of clarity in the law relates to the exception to the Mozambique rule created in relation to the administration of deceased estates. As has been mentioned above (para 4.7), if the court has jurisdiction for the purpose of such administration, it is prepared to determine questions of title to foreign land. But the limitation on this exception appears to be that the court must possess some control in relation to the estate, by virtue of the presence of property of the deceased (whether real or personal) within its territory. It is on this basis that rationalisation can be achieved between, on the one hand, Nelson v Birdport,18 this jurisdiction was assumed, and Pike v Hoare,19 where it was not. However, the precise formulation of the exception, and its rationale, have not been undertaken by the courts, leading consequently to doubt as to its limits.
6.16 A final example in this general category is the decision of Woodward J, in Inglis v Commonwealth Trading Bank of Australia,20 to which reference has already been made (see para 2.2). In that case, the Judge himself accepted21 that his conclusion was anomalous, because of the fact that the denial of jurisdiction depended on the way in which, and the party by whom, proceedings were instituted, and not on the nature or substance of the plaintiffs claim.
6.17 If the Mozambique rule were to be abolished in its entirety, the courts would no longer be required to come to somewhat artificial conclusions as to whether the plaintiff’s action fell on one side or the other of a “jurisdictional line”,22 but would need only to determine whether their court was the appropriate forum for the resolution of the dispute, applying the notions of forum non conveniens discussed below (see paras 7.5 et seq).
B. Unnecessary Expense and Delay
6.18The principal situation in which the application of the Mozambique rule may lead to unnecessary expense and delay (and perhaps even to a denial of justice) relates to applications for relief under the Family Provision act 1982 (NSW). It has already been noted that if a person dies domiciled in New South Wales, but possessed of immovable property outside the State, the court in this State must entirely disregard the existence and value of that immovable property in determining whether the deceased has made adequate provision for his or her dependents. The latter must commence fresh proceedings, before the courts at the location of that immovable, for relief in relation thereto, and, at least if the immovable property were in England and Wales, the court in that country would lack jurisdiction.
6.19 The statutory abrogation of the Mozambique rule, together with a consequential amendment to the Family Provision Act, would enable the Supreme Court of New South Wales to take into consideration the existence and value of immovable property outside the State, in determining whether (and, if so, to what extent) it should make further provision for the dependents of a deceased person.
FOOTNOTES
1. (1935) Vol 3 1657.
2. 67 NW 846 (1896).
3. Id at 847-848.
4. [1892] 2 QB 358 at 414.
5. [1946] P 135 at 146-147.
6 It may, however, be observed that in the Hesperides Hotels case, the House of Lords did not remark on the arbitrariness or technicality of their decision, which denied jurisdiction to hear the action in relation to trespass to the plaintiff’s hotel, but allowed to proceed that part of the action which sought damages for trespass to chattels in the hotel.
7. Torts in the Conflict of Laws (.1942) 99.
8. Brown v Hedges (1708) Salk 290; 91 ER 257.
9. Tito v Waddell (No 2) [1977] Ch 106 at 271-272 per, Megarry J.
10. Most recently and forcefully by Welling and Heakes, “Torts and Foreign Immovables: Jurisdiction in Conflict of Laws” (1980) 18 UW Ont L Rev 295; see also Willis, (1937) 15 Can Bar Rev 112.
11. Cheshire and North’s Private International Law (11th ed, 1987) 255; see also Sykes and Pryles, Australian Private International Law (2nd ed, 1987) 59; Duke v Andler [1932] SCR 734; [1932] 4 DLR 529.
12. [1982] 2 NSWLR 557.
13. (1750) 1 Ves Sen 444; 27 ER 1132.
14. (1796) 3 Ves 170; 30 ER 952.
15. Conflict of Laws (11th ed, 1987), Vol 2 at 930.
16. Norris v Chambres (1861) 29 Beav 246; 54 ER 621; affirmed 3 DeG F & J 583; 45 ER 1004.
17. Mercantile Investment & General Trust Co v River Plate Trust, Loan & Agency Co [1892] 2 Ch 303.
18. (1846) 8 Beav 547; 50 ER 215.
19. (1763) 2 Eden 182; 28 ER 867.
20. (1972) 20 FLR 30.
21. Id 42,
22. The phrase used by Woodward J in Inglis’ case note 19 at 42.
