Private International Law – Prof. Walsh - Summer 2005

by Martin Doe and Miguel Bernal-Castillero

Introduction......

What is the conflict of laws?......

Do we need it?......

Terminology......

Law Units within Canada......

Interprovincial choice of law......

Basic Definitions......

Part One – Adjudicatory Jurisdiction......

Scope of Jurisdiction......

A. Basic areas of jurisdiction......

1. Where the parties are within the province......

2. Voluntary submission of the defendant......

3. Subject matter connection......

B. Exceptions and Specific Jurisdiction......

1. Consumer, Employment and Insurance contract matters......

2. Declining jurisdiction......

3. Exceptional jurisdiction......

4. Supplementary or Incidental Jurisdiction......

C. Case Law......

CVL – Spar Aerospace Ltd. v. American Mobile Satellite Corp. [2002] 4 S.C.R. 205......

CVL – Worthington Corp. c. Atlas Turner Inc. [2004] IIJCan 21370 (Qc C.A.)......

Insurance Corp of British Columbia v. Unifund Insurance Company [2003] 2 S.C.R. 63......

D. Reform Legislation......

Part Two – Foreign Judgments......

Parameters of Forum of Inquiry......

2 Conditions for Recognition of Foreign Judgments......

1. Jurisdiction of Foreign Authorities......

2. Finality Requirement......

Defenses Against Recognition......

1. Procedural Fairness Requirement......

2. Taxation Exception......

Other ways of Revoking......

1. Public Order......

2. Conflicting Judgments......

Traditional Common Law Rules......

Case Law......

Morguard Investments Ltd. v. De Savoye [1990] 3 SCR 1077

Hunt v. Lac d’Amiante and T&N [1993] 4 SCR 289

Beals v. Saldanha [2003] 3 SCR 416

Parsons v McDonald’s [2005] Ont CA

Reform Legislation......

Uniform Enforcement of Canadian Judgments and Decrees Act......

Uniform Enforcement of Foreign Judgments Act......

Part Three – Choice of Applicable Law......

A. Choice of Law Methodology......

Characterization......

Renvoi......

Procedure......

B. Contractual Obligations......

General Rules......

Form......

Capacity......

Special Contracts......

Roy v North American Leisure Group Inc., [2004] Ont C.A. 246 DLR (4th) 306

C. Extra-Contractual Obligations / Torts......

Tolofson v. Jensen [1994] 3 SCR 1022 – lex loci delicti

Somers v. Fournier [2002] Ont C.A. 214 D.L.R. (4th) 611.

D. Domestic Relations (en passant)......

Jahangiri-Mavaneh v. Taheri-Zengekani [2003] Ont Superior Court 39 RFL (5th)

E. Property (en passant)......

F. Exceptions......

1. Public Policy/Public Order......

2. Proximity Principle......

3. (International) Mandatory Rules......

Society of Lloyd’s v. Saunders [2002] ILR 1-4047 – strict public policy grounds for non-enforcement

Muscutt v. Courcelles [2002] Ont C.A.

Bangoura v. Washington Post case......

Introduction

  • Private Intl Law, sometimes called the ‘conflict of laws’ is that part of a domestic legal system which comes into operation whenever a legal situation with a ‘foreign’ or extra-jurisdictional element arises.
  • Generally sub-divided into 3 basic parts:

1-Adjudicatory jurisdiction: when will a court assume the authority to adjudicate disputes involving parties or events located wholly or partly outside the borders of their jurisdiction – i.e. a foreign element? Concerned about the cross boundary areas of the law. E.g. a Quebec company doing business with a US carrier delivering goods to Mozambique. Which courts can or should deal with this relationship?

2-Recognition and enforcement of Foreign Judgments: On what basis do local authorities give effect to judgments and orders issued by foreign courts and tribunals? It is an appeal to be able to depend on the local enforcement mechanisms.

3-Choice of Law: What rules or principles determine whether a dispute should be governed by local law or by law of some legal system to which the dispute is factually connected? Which laws will the courts draw upon? If tort happens here, will take laws from here, e.g.

What is the conflict of laws?

  • “Conflict of laws” implies conflict bt laws and need to make choice bt them.
  • It is necessarily pluralistic and national  can differ from legal system to the next, at least in absence of any positive super laws such as treaties and constitutions.
  • This can be bt States (w. would be Public Intl Law) but also among territorial or community units w/in state.
  • Hence PrIL has special practical importance in federal states such as Canada.
  • In Public Intl Law the actors are sovereign states and the focus is on intl law from high level of interstate relations.
  • PrIL concerned w/ private law and private individuals and the implications that we are mobile population and things can happen to us when we travel that give rise to legal implications – from family relationships to commercial ones.
  • Must know the different ways in which diff legal systems may answers certain questions (such as ECO).

Main sources  Book X of CCQ and case law from Can CML provinces. Also intl conventions that aim to achieve uniformity amongst intl, natl and provincial laws.

Do we need it?

  • Uniform intl or multilateral rules would reduce uncertainty and complexity and avoid conflicting results.
  • Aim is to reduce forum shopping. This has taken more importance w/ globalization of markets and trade.
  • We’re concerned mainly w/ private law conflicts. In Canada these are prov power (as per BNA Act 1867)
  • For most areas of private law it is just as possible to have conflict of laws btwn Ontario and Qc as btwn Qc and France. In federal system you have potential for conflict of laws issues to be addressed both btwn and among particular units of the federation as btwn prov units and other countries.

Terminology

  • Lex Loci delicti: where the tort occurred. Very important in CML
  • Common domicile exception: if both parties share a common domicile, then those are the rules that will apply and not where the injury occurred. Is important in CVL (though lex loci delicti is also a general rule)
  • The Forum: the place where the dispute is litigated. It’s the Pl’s choice, so he can do forum shopping.
  • Lex fori: the law of the forum
  • Lex loci contractus: law of the place of the contract (where it came into being or where it stipulates it is to be governed)
  • Lex rei sitae law of the place of the thing, where it is located.
  • Lex loci celebratius: law of the place where the ritual was celebrated (ie marriage)
  • Lex domicili: law of domicile of corporation or individual.
  • Forum non conveniens: inappropriate forum

Law Units within Canada

  • By virtue of Federal composition of Can, there are diff legal issues are subject to legislative jurisdiction at the provincial or territorial level and there is corresponding need that there will be choice of law.

Is uniformity of outcome a desirable or achievable aim?

  • Issue of autonomy of state.
  • Conflict of law strives to have solution to be the same regardless of where the proceedings take place.
  • The goal is for there not to be forum shopping

Interprovincial choice of law

  • There is territorial limit placed by the constitution on the courts
  • We’ll be looking in choice of law rules.
  • Provinces have overriding statutory regimes for certain areas – e.g. securities.

3077. Where a country comprises several territorial units having different legislative jurisdictions, each territorial unit is regarded as a country.

Where a country comprises several legal systems applicable to different categories of persons, any reference to a law of that country is a reference to the legal system prescribed by the rules in force in that country; in the absence of such rules, any such reference is a reference to the legal system most closely connected with the situation.

  • This is article that tells us that in certain context territorial unit implies a country or a province or a state.
  • Para 2 relates to successions, family, religious affiliation, etc. This goes according to membership in a community, not necessarily by territory.
  • Within Canada, Para 2 would have application in aboriginal communities where they are considered to have self-govt with specific rules based on membership.
  • These rules do not depend on where you live, but who you are and what community you are a part of

Basic Definitions

  • Comity –“the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.” (from Hilton v. Guyot, 159 U.S. 113 (1895), referred to in Morguard and Spar)
  • Order –
  • Fairness –

HE Yntema, The Historical Bases of Private International Law and can provide a good overview.

Part One – Adjudicatory Jurisdiction

Scope of Jurisdiction

  • State immunity is recognized generally. It is not absolute, but it is recognized through the State Immunity Act (don’t have to know it all, but be aware of it).
  • Matters subject to Treaty, such as the Carriage by Air Act, ss. 28,29 (below)

Article 28

(1) An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the Court having jurisdiction at the place of destination.

(2) Questions of procedure shall be governed by the law of the Court seized of the case.

Article 29

(1) The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

(2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case.

  • Exclusive Jurisdiction can also be taken by courts for certain processes.

3129. The application of the rules of this Code is imperative in matters of civil liability for damage suffered in or outside Québec as a result of exposure to or the use of raw materials, whether processed or not, originating in Québec.

3151. A Québec authority has exclusive jurisdiction to hear in first instance all actions founded on liability under article 3129.

  • Jurisdiction is term that carries a lot of meaning in law, often being synonymous w/ competence and power.
  • Jurisdiction is established by law and it is given in the same way that it is limited (by constitution, legislation e.g.)
  • Jurisdictional issues are not limited to PrIL. E.g. Contracts, for example, have divided jurisdiction in Quebec based on the value of the case: under $8000  small claims, upto $70,000  Court of Quebec, over $70,000  Superior Court.
  • In Qc, source of jurisdictional authority is the CCQ, read w/ CCP and Constitution Acts
  • Do we need rules establishing what factors are sufficient to give jurisdiction to a specific court? If we didn’t have these rules, there would be problems of sovereignty and comity. PrIL likes to think that it is separate from Public International Law, but it is still concerned with these fundamentally public concepts that have to do with the proper division of power.
  • Sovereignty = Idea that each state has power over the things and people within its own border and conversely does not have power over things and events that fall within the purview of some other sovereign.
  • Idea behind PrIL is that there should be limitations on our courts (which are delegations of sovereign powers).
  • Constraint of exercise is that there should be a legitimate nexus/connection to a particular court. That idea is necessary and practical.
  • There is self-interest in exercising self-restraint in jurisdiction. If states purported to exert exorbitant jurisdiction, its judgments would not be respected, nor its courts, and, ultimately, nor would the state. Ultimately, this is disrespectful to sovereignty.
  • Voluntary consent has no bearing w/ jurisdiction. i.e. If both parties agree on Qc, then that’s ok. But more often they’ll agree to arbitration.

Question: In the absence of any rules (such as those in the CCQ), is there anything inherently objectionable to two foreign nationals asking a Quebec court to adjudicate a completely foreign jurisdiction? Maybe not, but…

  • Sovereignty is challenged by asserting that power over that area without adequate reason.
  • Legitimacy is challenged when trying to apply that judgment in the supposed original jurisdiction.
  • Do Quebec Courts (or Quebec society/taxpayers) have any interest in foreign dispute resolution?
  • Jurisdiction originally arose from the idea of physical power over an individual person. It was extremely territorial.
  • This idea led to the traditional CML basis of jurisdiction (also manifested in Quebec Civil law to a certain extent) - presence of the Df w/in your borders (but this allowed fleeing!)
  • This rule was devised by UK courts to protect Eng debtors from the effects of foreign judgments. However, it also harmed Eng creditors whose creditors fled other countries. So jurisdiction expanded to include subject-matter provision (i.e. Eng court could have their orders served abroad).
  • This changed w/ devts in intl law as mobility and complexity of commerce was taken into account, but slowly.

Rule Jurisdiction of parties is not what’s most relevant. What’s actually imp. is that Df be w/in jurisdiction.

A. Basic areas of jurisdiction

1. Where the parties are within the province

3134. In the absence of any special provision, the Québec authorities have jurisdiction when the defendant is domiciled in Québec.

  • No need for subject-matter connection here or in 3148.
  • This is very general rule “in the absence of any special provision…” that can include actions in K, ECO, etc.
  • This kind of provision ensures that there is always one court where you can sue someone in.
  • For ships it depends on what nation’s waters the ship is on.

Rule 3134 is the general rule. Everything thereafter moves to specificities.

3141. AQuébec authority has jurisdiction to hear personal actions of an extrapatrimonial and family nature when one of the persons concerned is domiciled in Québec.

  • Within personal actions we are divided to extra-patrimonial and family, and patrimonial personal actions.
  • Here the big thing is that it only requires one of the persons concerned to be domiciled in Qc.
  • 3142 and ss deal w/ family issues such as filiation. [We’ll look a bit at divorce at the end]

3148. In personal actions of a patrimonial nature, a Québec authority has jurisdiction where

1) the defendant has his domicile or his residence in Québec;

2) the defendant is a legal person, is not domiciled in Québec but has an establishment in Québec, and the dispute relates to its activities in Québec; (…)

  • In 3148, the first sentence is in distinction to that provided in 3141.
  • Notice it says a residence and not the residence.
  • Under 3148 (2) more specifics are given. It’s not necessary for jurisdiction to have your head offices here, but it’s enough if you have branch offices here and if the disputes regard the actions of that branch in Qc.

2. Voluntary submission of the defendant

3148. In personal actions of a patrimonial nature, a Québec authority has jurisdiction where (…)

4) the parties have by agreement submitted to it all existing or future disputes between themselves arising out of a specified legal relationship;

5) the defendant submits to its jurisdiction.

However, a Québec authority has no jurisdiction where the parties, by agreement, have chosen to submit all existing or future disputes between themselves relating to a specified legal relationship to a foreign authority or to an arbitrator, unless the defendant submits to the jurisdiction of the Québec authority.

  • Relatively straight forward and not a matter of much debate (not even in Hague convention)
  • Rule explores two possibilities where .
  1. by agreements in contract (ie when buying online)
  2. by being attorned (ie Df submits to jurisdiction by showing up or responding to action)
  • Last para. important bc it means courts will hold you up to it if you’ve voluntarily relinquished Qc jurisdiction.

3. Subject matter connection

3148. In personal actions of a patrimonial nature, a Québec authority has jurisdiction where (…)

3) a fault was committed in Québec, damage was suffered in Québec, an injurious act occurred in Québec or one of the obligations arising from a contract was to be performed in Québec (…)

  • 3148 (3) deals w/ property, torts and contracts.
  • First 3 conditions have more resonance in area of extra contractual liability.
  • “Injurious act occurred in Qc” refers to strict-liability regimes (e.g. no-fault insurance, vicarious liability, contract breach). (Lebel in Spar)
  • “Damage was suffered in Qc”  similar to Ontario and other CML rules of procedure.
  • Damage suffered really broadens the jurisdiction because of the temporal distance or exaggerated geographical distance that can exist between the fault/act and the damage (e.g. pain and suffering following a car accident overseas, damage from contract breach overseas).

B. Exceptions and Specific Jurisdiction

1. Consumer, Employment and Insurance contract matters

3149. A Québec authority also has jurisdiction to hear an action involving a consumer contract or a contract of employment if the consumer or worker has his domicile or residence in Québec; the waiver of such jurisdiction by the consumer or worker may not be set up against him.

3150. A Québec authority has jurisdiction to hear an action based on a contract of insurance where the holder, the insured or the beneficiary of the contract is domiciled or resident in Québec, the contract is related to an insurable interest situated in Québec or the loss took place in Québec.

  • This follows the general provision of 3148.
  • 3149 is aimed at protecting the vulnerable parties (consumers, employees). It ensures that party setting up interest or directing itself at Qc market does not escape Qc jurisdiction by putting some ‘escape of jurisdiction’ clause.
  • 3150 ensures that if what’s being insured is in Qc, there’s Qc jur’n.

2. Declining jurisdiction

  • Remember 3148 last para. where if parties voluntarily relinquish right to go to Qc courts, they’ll be held to it.

3135. Even though a Québec authority has jurisdiction to hear a dispute, it may exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another country are in a better position to decide.

  • 3135 is new to CCQ and derives from doctrine of forum non conveniens.
  • The rule empowers, but does not oblige, Qc courts to defer jurisdiction if there is an objection and if it considers that authorities elsewhere can better decide the case.
  • This is a way of recognizing other courts’ better jurisdiction for something.
  • It limits forum shopping and even protects Df.
  • Only used exceptionally, but does provide an escape valve that gives discretion and flexibility to the courts. However, it also creates some uncertainty.
  • This article is at center of Spar Aerospace.
  • Under Brussels convention, eg, there is no such discretion. Court can’t just pass the buck to another jurisdiction.

3137. On the application of a party, a Québec authority may stay its ruling on an action brought before it if another action, between the same parties, based on the same facts and having the same object is pending before a foreign authority, provided that the latter action can result in a decision which may be recognized in Québec, or if such a decision has already been rendered by a foreign authority.