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Published online by Cambridge University Press: 02 January 2014
The Moçambique rule provides that an English court may not adjudicate on title to foreign immovable property. This article considers the primary exception to that rule: where the court assumes jurisdiction in personam to enforce a contractual or equitable claim concerning foreign immovable property against a defendant subject to the court's personal jurisdiction. It addresses two questions: how should the English court decide whether to assume jurisdiction in relation to foreign land, and if the positions are reversed, should an English court recognize or enforce the order of a foreign court affecting English land? As to the first question, this article argues that the orthodox English approach is anachronistic. English law applies the lex fori exclusively to determine whether an obligation exists which the court has jurisdiction to enforce. Instead, modern conflict of laws principles demand that the court should apply the proper law of the substantive claim in determining whether a sufficient equitable or contractual obligation exists. As to the second question, this article argues that despite the prevailing view that foreign non-money judgments are not enforceable in England, foreign orders in relation to English land are in principle entitled to recognition in a subsequent action in England by the successful claimant.
1 These examples are based on Schumacher v Summergrove Estates Ltd  NZHC 1387 (leave to appeal to the Court of Appeal has been granted:  NZHC 2221) and Singh v Singh  WASCA 53, (2009) 253 ALR 575 respectively. Although this article focuses on English law, it also considers the position in Commonwealth jurisdictions that have inherited English rules, including Australia, Canada, New Zealand and Singapore.
2 This article is not concerned with the position within Europe, as to which see Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters  OJ L 12/1, to be replaced by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast)  OJ L 351/1.
3 See Shami v Shami  EWHC 664 (Ch), upheld on appeal  EWCA Civ 227.
4 Named after British South Africa Co v Companhia de Moçambique  AC 602 (HL).
5 Penn v Lord Baltimore (1750) 1 Ves Sen 444, 27 ER 1132. See for different formulations of the principle Fawcett, JJ, Carruthers, JM, Cheshire, North & Fawcett: Private International Law (14th edn, Oxford University Press 2008)Google Scholar at 484 and Lord Collins of Mapesbury (gen ed), Dicey, Morris & Collins on the Conflict of Laws (15th edn, Sweet & Maxwell 2012) at [23–046]–[23–050].
6 Eg Norris v Chambres (1861) 29 Beav 246, 54 ER 621; Deschamps v Miller  1 Ch 856 (Ch); Hicks v Powell (1869) 4 Ch App 741.
7 Re Courtney, ex p Pollard (1840) Mont & Ch 239; Waterhouse v Stansfield (1852) 10 Hare 254, 68 ER 921.
8 Re Smith, Lawrence v Kitson  2 Ch 206 (Ch).
10 The term used by Yeo, TM, Choice of Law for Equitable Doctrines (Oxford University Press 2004)Google Scholar at [5.38].
12 This article proceeds on the assumption that both courts are applying English common law rules.
16 Although on a jurisdictional challenge this will only need to be established to the standard of a ‘good arguable case’: Canada Trust Co v Stolzenberg (No 2)  1 AC 1 (HL) at 13.
17 For example in service out cases the claimant must establish that there is a serious issue to be tried on the merits: see eg AK Investment CJSC v Kyrgyz Mobile Tel Ltd  UKPC 7,  1 WLR 1804 at .
20 Lord Cranstown v Johnston (1796) 3 Ves Jun 169, 30 ER 952 at 182–3.
22 Which gives rise to the difficult distinction between situations where the lex situs does not recognize the interest and positively excludes it: see Part IIIB below.
23 See the cases cited in Dicey (n 5) at [34–084] and McLachlan, CA, ‘International Litigation and the Reworking of the Conflict of Laws’ (2004) 120 LQR 580 at 601–2Google Scholar, doubting the wisdom of an apparent ‘retreat from choice of law’ in relation to equitable obligations. In hindsight this may not have been so much a retreat as a continuation of the practice dating back to the days of a separate Court of Chancery: see White, RW, ‘Equitable Obligations in Private International Law: the Choice of Law’ (1986) 11 Syd LR 92Google Scholar cited by McLachlan at n 120.
24 Dicey (ibid) at n 422 and [34–084]. See also Chong, A, ‘The Common Law Choice of Law Rules for Resulting and Constructive Trusts’ (2005) 54 ICLQ 855CrossRefGoogle Scholar and Yeo (n 10) at [1.17] (endorsed in Murakami v Wiryadi  SGCA 44,  1 SLR(R) 508 at . Note that related proceedings under the same name have also occurred in Australia (see n 25)).
25 Garnett, R, Substance and Procedure in Private International Law (Oxford University Press 2012)Google Scholar at [3.26]. See eg Attorney General for England and Wales v R  2 NZLR 91 (NZCA) at – (but cf apparently Birch v Birch  3 NZLR 413 (HC) at  per Paterson J); Rickshaw Investments Ltd v Nicolai Baron von Uexhull  SGCA 39,  1 SLR(R) 377 at –, followed in Murakami (SGCA) (n 24) at ; OJSC Oil Company Yugraneft v Abramovich  EWHC 2613 (Comm) at –; Fiona Trust & Holding Corp v Privalov  EWHC 3199 (Comm) at –; Murakami v Wiryadi  NSWCA 7, (2010) 268 ALR 377. See also Schumacher v Summergrove Estates Ltd (n 1).
26 Reprinted in (2009) 23 Trust L Intl 35 (CA).
27 See particularly ibid at 38, drawing support from Millett J's judgment in Macmillan Inc v Bishopsgate Investment Trust plc (No 3)  1 WLR 978 at 989 (Ch) (affirmed on other grounds  1 WLR 387 (CA)). However, in that passage Millett J appears to reject, rather than support, the suggestion that the lex fori should automatically govern an equitable claim in relation to foreign land.
28 See Murakami (SGCA) (n 24) at – citing Yeo (n 10) at [1.17]. See also Luxe Holding Ltd v Midland Resource Holding Ltd  EWHC 1908 (Ch) at  and following which concerned shares in foreign companies incorporated in countries that did not recognize an equitable interest, but where the relationship between the parties was governed by English law.
31 Although in this case jurisdiction was not assumed pursuant to the rule in Penn v Lord Baltimore.
32 See eg the comments in Murakami v Wiryadi in the New South Wales Court of Appeal (n 25) at . For discussion of characterization (in the context of constructive trust claims) see Grupo Torras SA v Al Sabah (No 5)  CLC 221 (CA) at –.
33 See Harris, J, ‘The Trust in Private International Law’ in Fawcett, JJ (ed), Reform and Development of Private International Law: Essays in Honour of Sir Peter North (Oxford University Press 2002) 187Google Scholar at 213; Yeo (n 10) especially at [5.17], [5.29], [5.38]–[5.41], [5.50]–[5.52], [9.15]; Chong (n 24) at 877; Harris, J, ‘Constructive Trusts and Private International Law: Determining the Applicable Law’ (2012) 18 T&T 965Google Scholar. For resulting trusts see Dicey (n 5) at [29–077]; Harris (2012) at 967; Whung v Whung  FamCA 137, (2011) 258 FLR 452 at .
39 ibid at 255. Lord Campbell LC dismissed the appeal: Norris v Chambres (1861) 3 De GF & J 583, 45 ER 1004 at 584–5. Unless otherwise noted subsequent references in this article are to the first instance decision.
40 R Griggs Group Ltd v Evans (No 2)  EWHC 1088,  Ch 153 at  citing Deschamps (n 6) at 862–3.
41 See also Re Hawthorne, Graham v Massey (1883) LR 23 Ch D 743 where the question was not competition between a holder of a prior equitable interest and a third party purchaser, but simply a dispute between two parties as to title to foreign land.
43 Mercantile Investment & General Trust Co v River Plate Trust, Loan & Agency Co  2 Ch 303 (Ch).
44 See Rogerson, PJ, Collier's Conflict of Laws (4th edn, Cambridge University Press 2013) at 383–4CrossRefGoogle Scholar; Dicey (n 5) at [23–047]. See also Cheshire (n 5) at 485, which attempts to explain the cases on the basis that in ‘exceptional circumstances’ the court might nevertheless enforce an equity against a third party, and that in the River Plate case it was justified because the third party's conduct was ‘clearly unconscionable’.
56 At least where it is not precluded by the European regime: see Case C-281/02 Owusu v Jackson  ECR I-1383.
58 The judge at first instance had adopted this test, relying in particular on a (mis)reading of White's article: Murakami v Wiryadi  SGHC 47,  3 SLR(R) 198 at .
61 See eg Re Polly Peck International plc (in admin) (No 2)  3 All ER 812 (CA) at 828. Indeed, this is how Cheshire and Yeo explain the results in Norris and Deschamps themselves: see n 45 above.
63 Indeed, when one reads up to the first sentence of the first full paragraph on page 843 of the report (n 6), it seems as if Parker J is about to conclude that England is forum non conveniens.
65 Murakami v Wiryadi (NSWCA) (n 25) at ; see also the risk that the decree will be a brutum fulmen: Norris v Chambres (1861) 3 De GF & J 583, 45 ER 1004 at 584–5 per Lord Campbell LC.
66 This is proceeding CIV 1264 of 2006. The other two Australian proceedings involved an equivalent allegation in relation to an Australian property (CIV 1009 of 2005, judgment given in Singh v Kaur Bal  WASC 303), and an allegation that another Malaysian property (apparently on the same street as the first Malaysian property) was held on express trust by the defendant (CIV 1677 of 2004, judgment given in Singh v Singh (No 3)  WASC 64). The fourth proceeding is in Malaysia. For the avoidance of doubt cross-references are not used when referring to the cases in this dispute.
67 This claim was added on 12 October 2009: Singh v Kaur Bal (No 3)  WASC 243 at , after the jurisdiction appeal referred to below.
68  WASC 62;  WASCA 53, (2009) 253 ALR 575.
69 Singh v Kaur Bal (No 2)  WASC 69.
70  WASC 243 at .
71  WASC 243 at .
72  WASC 243 at , .
85 Megarry J applied the rather impressionistic alternative of asking whether the courts of the situs would ‘stand aghast at the spectacle of a purchaser living within the English jurisdiction being ordered by an English court to carry out his agreement to purchase land’ abroad: Richard West & Partners (Inverness) Ltd v Dick  2 Ch 424 (Ch) at 430. Cf Duke v Andler (n 13) at 742, relying on Re Courtney (n 7) at 250, where the Supreme Court suggested that the distinction was whether it would be enforced by the courts of the situs.
87 (n 7) at 259. One could also explain the cases in similar terms to Deschamps—the determinative issue being governed by the lex situs and thus outside the English court's jurisdiction.
88 cf Dicey (n 5) at [23–046]. Note also that in Re Courtney no unsecured creditors who would be prejudiced by the order had been identified, whereas the position of such creditors was noted in Waterhouse (n 7) at 257. Yet several decisions have given priority for plaintiff security-holders in such circumstances: see eg Ex p Holthausen, In Re Scheibler (1874) 9 LR Ch App 722 (CA), Re Smith (n 8); In re Anchor Line (Henderson Brothers) Ltd  1 Ch 483 (Ch).
90 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations  OJ L 177/6, art 4(1)(c) (but subject to art 3); alternatively a contract is likely to be ‘manifestly more closely connected’ with the situs than anywhere else: art 4(3).
92 Again, this may be explained by the fact that the Court of Chancery required a connection between the subject matter of the dispute and England before taking jurisdiction, and the fact that the contract was made in the jurisdiction was a sufficient connection: see text to n 47 above. That requirement acted as a proxy for what would now be achieved by the choice of law process, but had the effect that when jurisdiction was assumed English law was usually applied.
93 For example, the headnote of Paget v Ede (1872) LR 18 Eq 118 appears to confine the rule in that case to land in ‘the colonies’; see also Lord Cranstown v Johnston (n 20) at 182 and Dicey (n 5) at [23–051], but cf Ewing v Orr Ewing (1883) LR 9 App Cas 34 (HL) at 40. Dicey (n 5) at [33–038] cites a number of the cases discussed above as authorities where the contract was more closely connected to England rather than the situs, but they must be read with caution now.
95 The defendants did not plead foreign law.
96 The power was first enacted in the Statute of Elizabeth 13 Eliz c 5.
97  WASCA 53, (2009) 253 ALR 575 at .
98 At . His Honour distinguished section 120(1) of the Bankruptcy Act 1966 (Cth), which rendered transactions leading up to bankruptcy void.
99 Which indeed goes further, providing that the only absolute requirement is that the court has jurisdiction: see Re Paramount Airways Ltd  Ch 223 (CA) at 235; Jyske Bank (Gilbraltar) Ltd v Spjeldnaes  2 BCLC 101 (Ch).
103 Compare Ludgater Holdings Ltd v Gerling Australia Insurance Company Pty Ltd  NZSC 49,  3 NZLR 713 at . Although of course a statute may always apply extraterritorially if Parliament's intention is sufficiently clearly demonstrated: Wanginui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581 at 601 per Dixon J.
104  WASCA 53, (2009) 253 ALR 575 at –.
105 The defendants not having pleaded otherwise.
106  WASCA 53, (2009) 253 ALR 575 at –.
108  WASC 69 at .
109 Whether as a matter of substance or procedure. At – Hasluck J appears to suggest that the imposition of a constructive trust should follow the finding of a breach of section 89(1) as ‘consequential relief’, relying on Muschinski v Dodds (1985) 160 CLR 583 at 613 for the bare proposition that a constructive trust can be imposed to preclude retention of beneficial ownership where that would be inequitable.
110 Hasluck J noted that the defendants may have declined to appear in order to avoid being held to have submitted to the jurisdiction for the purposes of subsequent enforcement proceedings:  WASC 69 at .
111 Fentiman notes that oral examination of witnesses may sometimes be dispensed with in favour of affidavit evidence; in other words, an expert's evidence is not automatically inadequate simply because it was given by affidavit: Fentiman, R, Foreign Law in English Courts (Oxford University Press 1998) at 204Google Scholar. See generally on the adequacy of proof of foreign law Neilson v Overseas Projects Corporation of Victoria Ltd  HCA 54, (2005) 223 CLR 331. Of course it is a matter of domestic civil procedure whether the court will take into account evidence already filed by a party in default of appearance, and it may not.
112  WASCA 53, (2009) 253 ALR 575 at . One could thus argue that the court should have applied the rule that, in the absence of proof of foreign law, the lex fori applies. This raises the difficult issue of whether that rule should have been excluded in circumstances where Western Australian law was statutory and inherently applicable only to Western Australian land, thus creating a ‘special institution’: see eg Shaker v Al-Bedrawi  Ch 350 (CA) at  citing Österreichische Länderbank v S'Elite Ltd  QB 565 (CA) at 569, but see the argument that the position may be different where the applicable foreign law may be expected to contain a provision equivalent to the lex fori: at . See also Schnaider v Jaffe (1916) 7 CPD 696 (Cape of Good Hope Provincial Division) at 700–1, cited in Damberg v Damberg (2001) 52 NSWLR 492 (CA) at , and Dicey (n 5) at [9–025]–[9–029].
115 Dicey (n 5) at [23–049] and the cases there cited. This is really animated by the considerations that motivate the Moçambique rule in the first place.
122  WASC 243 at .
123 In Regal Castings Ltd v Lightbody  NZSC 87,  2 NZLR 433, a majority of the New Zealand Supreme Court found that the New Zealand equivalent to section 89(1) operated in personam only and thus (in a purely domestic context) did not conflict with the principle of indefeasibility of title.
124 See Dicey (n 5) at [14R–020]. This article is not, in general, concerned with the position under statute or in the European context.
127 For example, the court may give leave to serve a defendant outside the jurisdiction on the basis of a long-arm statute, which is sufficient for the purpose of Penn v Lord Baltimore jurisdiction (see Re Liddell's Settlement Trusts  Ch 365 (CA) at 374) but under English rules does not suffice for the purpose of enforcement in the absence of submission.
130 Duke v Andler (ibid) at 742. I have taken these arguments out of the order in which they appear in the judgment.
134 Although Smith J's assumption may be justified in the case of a default judgment (unless the plaintiff itself pleaded and proved the content of foreign law), it is still unclear why it provides a basis for refusing to enforce a judgment; the English court will not re-examine the merits of the foreign judgment: Dicey (n 5) Rule 48 at [14R–118], citing (inter alia) Godard v Grey (1870) LR 6 QB 139.
137 Edinger, E, ‘Is Duke v Andler Still Good Law in Common Law Canada?’ (2011) 51 CanBusLJ 52 at 62Google Scholar. In Shami v Shami (n 3) at  Deputy Judge David Donaldson QC suggests that the Supreme Court misinterpreted the Californian judgment and thus proceeded on a premise of ‘dubious accuracy’. This confusion appears to have arisen because the Commissioner had effected a transfer of the land since the Californian judgment, and the plaintiffs asked the Canadian court (in the alternative) to effectively sanction that conveyance; the result was that the plaintiffs were in that sense seeking to enforce in the Canadian courts something other than the Californian court's order itself.
138 ibid at . Although it might be recalled that the rule predates Duke v Andler and the Supreme Court relied on its predecessor in that case at 739.
142 See eg Dicey (n 5) at [4–025]; Norris v Chambres (1861) 3 De GF & J 583, 45 ER 1004 at 584–5 per Lord Campbell LC.
144 Dicey (n 5) at [14R–108], [14–114]. Outside the context of wills, Dicey primarily relies on Duke v Andler and Fall v Eastin.
145 Shami v Shami (n 3) at . Cf eg the Convention between the United Kingdom of Great Britain and Northern Ireland and Canada providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters (entered into force 1 January 1987)  UKTS 74, art V(2), in which the equivalent exclusion in relation to immovable property only prevails over some of the heads of in personam jurisdiction, but does not prevail where the judgment debtor submitted by appearing or counterclaiming: see Patterson v Vacation Brokers Inc  IL Pr 472 (Ont CA) at .
146 Foreign Judgments (Reciprocal Enforcement) Committee Report (Cmnd 4213, December 1932) (Greer Report) Annex V at 63.
148 Re a Judgment, McCormac v Gardner  NZLR 517 (SC).
149 Gordon Pacific Developments Pty Ltd v Conlon  3 NZLR 760 (HC) at 766.
151 Shami v Shami (n 3). The wife's appeal focused on the enforceability of charges granted by the husband over the property in favour of his brother; no appeal was taken against the parts of the judgment that are relevant for this appeal: see –. In any case the Court of Appeal upheld what Mummery LJ described as an ‘excellent’ judgment: at . Tomlinson and Davis LJJ concurred with Mummery LJ.
153 The common law rules are preserved by section 8(3) of the Act where registration is not available.
156 See Pro Swing Inc v Elta Golf Inc  2 SCR 612 (Canada); Brunei Investment Agency and Bandone Sdn Bhd v Fidelis Nominees Ltd  JRC 152 (Jersey); Bandone Sdn Bhd v Sol Properties Inc  CILR 301 (Cayman Islands).
158 Recognition is logically prior to enforcement: a judgment must be recognized before it can be enforced, but not all judgments which are recognized can be enforced: see Clarke v Fennoscandia Ltd  UKHL 56, 2008 SC 122 at  per Lord Rodger.
159 Either where the plaintiff lost entirely in the foreign proceedings or where the plaintiff seeks to ‘top up’ their damages award in subsequent English proceedings: Civil Jurisdiction and Judgments Act 1982, section 34; see Republic of India v India Steamship Co Ltd  AC 410 and (No 2)  AC 878.
160 See Cheshire (n 5) at 538–51; Collier (n 44) at 236–7; McClean, D & Ruiz Abou-Nigm, V, Morris’ Conflict of Laws (8th edn, Sweet & Maxwell 2012)Google Scholar at [7–048]; Clarkson, CMV & Hill, J, The Conflict of Laws (4th edn, Oxford University Press 2011) at 174–5Google Scholar; Barnett, PR, Res Judicata, Estoppel and Foreign Judgments: The Preclusive Effect of Foreign Judgments in Private International Law (Oxford University Press 2001)Google Scholar.
163 Lord Mance commented specifically on the position in relation to immovables, noting the observations in Dicey and Cheshire quoted above: (n 113) at .
164 Briggs, A, ‘Foreign Judgments: the Common Law Flexes its Muscles’ (2011) 17 T&T 328 at 330Google Scholar.
165 Its advice was limited to advising that the Kenyan judgment was in personam and the Kenyan court had jurisdiction: see . It appears that the litigation is still ongoing in the Isle of Man.
166  IL Pr 465 (QB) at .
167 ibid at ,  (emphasis added). One could potentially read Colman J's decision as concerned with injunctions only, although his Honour did not appear to regard the principle as confined to any subcategory of non-money orders.
168  1 AC 119 (HL) at 140. See also Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace)  SGCA 60,  1 SLR 1129 at , where the Singapore Court of Appeal found that a Californian judgment (which set aside the fraudulent transfer of Californian land and declared the existence of a constructive trust) did not order the payment of a sum of money, and was thus not capable of enforcement. However the Court did not express a view on whether non-money judgments could ever be enforced, because the plaintiff's claim was premised on its argument that the Californian judgment created an obligation to pay a sum of money; indeed, the Court noted that the California judgment had been executed and so there was nothing left to enforce: at .
169 Dicey (n 5) notes at [14–195] that the meaning of ‘a judgment to which Part I of this Act applies or would have applied…’ is ‘obscure’: see Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG  AC 591 (HL).
171 See eg India v India Steamship Co Ltd  AC 410 (HL) at 415 per Lord Goff.
172 Excluded by section 11(2). There is a little more to it than that. Section 11(2) excludes matrimonial causes from the definition of ‘action in personam’. That means for the purpose of determining whether the Israeli court had jurisdiction the catch-all provision in section 4(3)(c) applies, which provides that where an action is neither in rem nor in personam the question is whether the foreign court had jurisdiction ‘recognised by the law of the registering court’.
176 See Civil Jurisdiction and Judgments Act 1982, section 30(1) (abolishing the rule in relation to torts affecting foreign immovable property) and see further Lucasfilm Ltd v Ainsworth  UKSC 39,  1 AC 208 at –.
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