Private International Law in Common Law Canada Cases Texts and Materials 4th Edition Pitel

STEPHEN G.A.
PITEL GENEVIÈVE SAUMIER

JOOST BLOM JANET WALKER
ELIZABETH EDINGER CATHERINE WALSH
Private International Law in

Common Law Canada
Cases, Text and Materials
FOURTH EDITION
STEPHEN G.A. PITEL, GENERAL EDITOR
Private International Law
in Common Law Canada
Cases, Text and Materials
FOURTH EDITION
STEPHEN G.A. PITEL

General Editor
Faculty of Law
Western University
JOOST BLOM ELIZABETH EDINGER

Faculty of Law Faculty of Law
University of British Columbia University of British Columbia
GENEVIÈVE SAUMIER JANET WALKER

Faculty of Law Osgoode Hall Law School
McGill University York University
CATHERINE WALSH
Faculty of Law
McGill University
Toronto, Canada
2016
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Library and Archives Canada Cataloguing in Publication
Pitel, Stephen G. A., author

Private international law in common law Canada : cases, text and materials / Stephen G.A.
Pitel (Faculty of Law, Western University), Joost Blom (Faculty of Law, University of British
Columbia), Elizabeth Edinger (Faculty of Law, University of British Columbia), Geneviève Saumier
(Faculty of Law, McGill University), Janet Walker (Osgoode Hall Law School, York University),
Catherine Walsh (Faculty of Law, McGill University). — Fourth edition.
Includes bibliographical references.

ISBN 978-1-55239-654-4 (hardback)
1. Conflict of laws—Cases. 2. Conflict of laws—Canada—Cases. I. Blom, Joost, author

II. Edinger, Elizabeth, author III. Saumier, Geneviève, 1970-, author IV. Walker, Janet, 1959-,
author V. Walsh, Catherine (Catherine A.), author VI. Title.
KE470.P58 2016 340.9 C2016-901933-0
Preface to the Fourth Edition
This book is a collaborative effort by six Canadian law professors. We consider it important
that there is a published casebook available for use in teaching a course in private inter-
national law and we are in general agreement as to what that book should include. As its
name indicates, we concentrate on the law in common law Canada. However, in many places
we have drawn comparisons with the civil law position in Quebec and with the law of other
countries. This casebook is more than simply a compilation of extracts from cases, statutes,
and scholarship. It includes substantial text and notes, such that it can be used not just for
teaching the subject but also as a research resource.
The third edition, published in 2010, saw three changes to our team, as Marvin Baer de-
parted and Stephen Pitel and Janet Walker came on board. For this fourth edition we have a
more significant change: Nicholas Rafferty has retired. He has been the driving organization-
al force behind this book for many years and we will soldier on as best we can in his absence,
though he has generously remained available to us as a resource.
In the interest of full disclosure, each author prepared the following chapters: Joost Blom—
Chapters 9, 12, and 13; Elizabeth Edinger—Chapters 3, 6, 7, and 8; Stephen Pitel—Chapters
1, 2, 16, and 19; Geneviève Saumier—Chapters 17, 18, and 20; Janet Walker—Chapters 10, 14,
and 21; and Catherine Walsh—Chapters 4, 5, 11, and 15. Authors were encouraged to struc-
ture their individual contributions as they thought fit. Readers will, therefore, be exposed to
different approaches to how the material is presented.
Although we have aimed to keep the book to a reasonable length, not all of the topics in
the book can be explored in a standard law school course. The book includes a sufficiently
broad range of topics, covered in sufficient detail, from which instructors can fashion their
individual courses.
The previous edition was published six years ago and much has happened in the interim.
Jurisprudential developments have been particularly significant in the area of jurisdiction,
led by Club Resorts Ltd v Van Breda (SCC 2012). Some of the other important new cases are
Chevron Corp v Yaiguaje (SCC 2015) (enforcement of foreign judgments), Meeking v Cash Store
Inc (Man CA 2013) (recognition of foreign class action decisions), Azam v Jan (Alta CA 2012)
(jurisdiction to grant a divorce from a foreign polygamous marriage), Davies v Collins (NSCA
2011) (the process of characterization), and Foote v Foote Estate (Alta CA 2011) (domicile).
Throughout the book, the text and notes have been revised. The revisions are current to at
least January 2016.
Often books and articles are cited in the text by only the last name of the author or auth-
ors. In such situations, a full citation appears at the end of the chapter under the heading
“Selected Bibliographical References.”
iii
iv Preface to the Fourth Edition
We thank Emond for its assistance with the book’s production, especially Laura Bast, Kelly
Dickson, Nancy Ennis, Cindy Fujimoto, and Jim Lyons. In addition, Stephen Pitel thanks Liam
Ledgerwood and Michal Malecki for their excellent research assistance.
Stephen G.A. Pitel
General Editor
London, Ontario
February 7, 2016
Acknowledgments
A book of this nature borrows heavily from other published material. We have attempted to
request permission from, and to acknowledge in the text, all sources of such material. We
wish to make specific references here to the authors, publishers, journals, and institutions
that have generously given permission to reproduce in this text works already in print. If we
have inadvertently overlooked an acknowledgment or failed to secure a permission, we offer
our sincere apologies and undertake to rectify the omission in the next edition.
The Advocate Joost Blom, “The Recognition of Foreign Divorces in British Columbia”
(1976) 34 Advocate 95. Reproduced with permission.
American Law Institute Willis LM Reese, Restatement of the Law Second, Conflict of Laws.
Copyright © 1971 by The American Law Institute. Reproduced with permission. All rights
reserved.
Baker, Voorhis & Company Joseph H Beale, Selections from A Treatise on the Conflict of
Laws (New York: Baker, Voorhis, 1935).
Columbia Law Review Brainerd Currie, “Comment on Babcock v. Jackson” (1963) 63
Colum L Rev 1233. Reprinted with permission.
Duke Law Review Brainerd Currie, “Notes on Methods and Objectives in the Conflict of
Laws” (1959) Duke L Rev 171. Reprinted with permission.
European Union Jurisdiction and the Recognition and Enforcement of Judgments in Civil
and Commercial Matters, Council Regulation (EC) No 1215/1212 of 12 December 2012,
Article 24. © European Union, 1995-2016. Reprinted with permission.
European Union Rafal Manko, “ ‘Habitual Residence’ as Connecting Factor in EU Civil
Justice Measures,” European Parliament Library Briefing, 22 January 2013. © European
Union, 1995-2016. Reprinted with permission.
Hague Conference on Private International Law Hague Convention of 25 October 1980
on the Civil Aspects of International Child Abduction. Reprinted with permission.
Hague Conference on Private International Law Hague Convention of 29 May 1993 on
Protection of Children and Co-operation in Respect of Intercountry Adoption. Reprinted with
permission.
Pages v-vi constitute an extension of the copyright page.
v
vi Acknowledgments
Hague Conference on Private International Law Proceedings of the Seventeenth Session,

10-29 May 1993, Tome II, Adoption—Co-operation. Reprinted with permission.
Hague Conference on Private International Law Update on the Developments in Internal
Law and Private International Law Concerning Cohabitation Outside Marriage, Including
Registered Partnerships (Preliminary Document No 5 of March 2015). Reprinted with
permission.
Harvard Law Review David F Cavers, “A Critique of the Choice-of-Law Problem” (1933)
47 Harv L Rev 173. Reprinted with permission.
Harvard University Press Walter Wheeler Cook, The Logical and Legal Bases of Conflict of
Laws (Cambridge, Mass: Harvard University Press, 1942). Reprinted by permission of the
publishers. Copyright © 1942 by the President and Fellows of Harvard College. Copyright
renewed © 1970 by the President and Fellows of Harvard College.
Hilliard, Gray & Company Joseph Story, Commentaries on the Conflict of Laws (Boston:
Hilliard, Gray & Company, 1834). Reprinted with permission.
Koninklijke Brill Peter M North, “Reform, but Not Revolution: Children” (1990) 220 Rec
des Cours 127. Reprinted with permission.
Minister of Public Works and Government Services Canada Canada Revenue Agency
(CRA), Income Tax Folio S5-F1-C1: Determining an Individual’s Residence Status (26 November
2015). Reproduced with permission of the Minister of Public Works and Government
Services Canada, 2016.
Oxford University Press Richard Fentiman, Foreign Law in English Courts: Pleading, Proof
and Choice of Law (Oxford: Oxford University Press, 1998). Reprinted by permission of
Oxford University Press.
Springer Joost Blom, “Public Policy in Private International Law and Its Evolution in Time”
(2003) 50 Nethl Intl L Rev 373. Reproduced with the permission of Springer.
Supreme Court of Canada Schwebel v Ungar, [1965] SCR 148 (headnote). Reproduced
with permission of the Supreme Court of Canada, 2016.
Sweet & Maxwell Limited AV Dicey, The Conflicts of Laws, 1st ed (London: Sweet &
Maxwell, 1896).
United Nations United Nations Statistics Division, The World’s Women 2015: Trends and
Statistics, <http://unstats.un.org/unsd/gender/downloads/WorldsWomen2015_chapter1
_t.pdf>. © 2015 United Nations. Reprinted with the permission of the United Nations.
University of Chicago Press Mary Ann Glendon, The Transformation of Family Law
(Chicago: University of Chicago Press, 1989). Reprinted with permission.
Wolters Kluwer R Lea Brilmayer, Conflict of Laws, 2nd ed (Boston: Little, Brown and
Company, 1995). Reprinted with permission.
Summary Table of Contents
Preface to the Fourth Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Detailed Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Table of Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxvii
PART ONE GENERAL

Chapter One Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
I. The Nature of the Subject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II. Organization of This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
III. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chapter Two History and Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

I. Intellectual History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
II. Theoretical Perspectives on Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Chapter Three Conflicts and the Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

I. Pre-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
II. Post-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Chapter Four Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
II. Public Policy and the Enforcement of Foreign Judgments and Awards . . . . . . . . . . . . . . . . . . 66
III. Public Policy and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
IV. Public Policy and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
V. Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
VI. Revenue Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
VII. Other Public Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
VIII. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Chapter Five Personal Connecting Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
II. Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
III. Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
IV. Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
vii
viii Summary Table of Contents
V. The Principle of Proximity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

VI. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
PART TWO JURISDICTION

Chapter Six Jurisdiction in Personam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
II. Parties to an Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
III. Circumstances Justifying Assumption of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
IV. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
Chapter Seven
Discretion to Decline Jurisdiction and Injunctions
to Restrain Foreign Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
II. The English Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
III. The Canadian Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
PART THREE FOREIGN JUDGMENTS

Chapter Eight
Recognition and Enforcement of Foreign Judgments
and Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
II. The Common Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
III. Conversion by Registration: Statutory Modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
IV. Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491
V. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
PART FOUR CHOICE OF LAW: GENERAL

Chapter Nine Choice of Law Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507
I. Choice of Law as Part of the System of Private International Law . . . . . . . . . . . . . . . . . . . . . . . . 508
II. The Standard or Classical Approach to Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
III. Perceived Shortcomings of the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
IV. Alternatives to the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
V. The Present Orientation of Canadian Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
Chapter Ten Applying Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547

I. Foreign Law and the Adversary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547
II. Pleading and Proving Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
III. Within the Canadian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
Chapter Eleven Law of Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591

I. The Substance/Procedure Distinction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591
II. Limitation of Actions (Prescription) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592
III. Remedial Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Summary Table of Contents ix
IV. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608

V. Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
PART FIVE OBLIGATIONS

Chapter Twelve Torts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
I. General Choice of Law Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
II. Particular Tort Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
III. Particular Issues in Tort Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
Chapter Thirteen Contracts and Unjust Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691
II. The Proper Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
III. Issues That May Be Referable to a Law Other Than the Proper Law . . . . . . . . . . . . . . . . . . . . . . 739
IV. The Law Governing Unjust Enrichment Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
V. Related Topics in Other Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774
PART SIX PROPERTY

Chapter Fourteen Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
I. Characterizing Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
II. Exercising Jurisdiction Over Foreign Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
III. Recognizing Foreign Judgments Affecting Land in the Forum . . . . . . . . . . . . . . . . . . . . . . . . . . 796
IV. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
V. Other Kinds of “Immovables” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807
Chapter Fifteen Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
II. Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
III. Mobile Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827
IV. Intangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
V. Money and Documentary Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
VI. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
VII. Deposit Accounts with Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839
Chapter Sixteen Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843
II. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844
III. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867
IV. Dependants’ Relief Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
V. The Claims of Foreign States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
x Summary Table of Contents
PART SEVEN FAMILY LAW

Chapter Seventeen Marriage and Cohabitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
I. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
II. Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909
III. Cohabitation and Civil Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
Chapter Eighteen Dissolution of Marriage and Other Unions . . . . . . . . . . . . . . . . . . . . . . . 923

I. Constitutional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924
II. Divorcing in Canada: Jurisdiction and Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
III. Recognition of Foreign Divorces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
IV. Dissolution of Other Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942
V. Spousal Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
Chapter Nineteen Nullity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

I. Void and Voidable Marriages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945
II. Jurisdiction to Grant a Nullity Decree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
III. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
IV. Recognition of Foreign Nullity Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
Chapter Twenty Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961

I. Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961
II. Child Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997
III. Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
IV. Cross-Border Surrogacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013
Chapter Twenty-One Matrimonial Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

I. Introduction: The Common Law Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
II. Matrimonial Property Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
Detailed Table of Contents
Preface to the Fourth Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Summary Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Table of Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxvii
PART ONE GENERAL
Chapter One Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I. The Nature of the Subject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II. Organization of This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chapter Two History and Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

I. Intellectual History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
II. Theoretical Perspectives on Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A. Comity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Joseph Story, Commentaries on the Conflict of Laws . . . . . . . . . . . . . . . . . . 9
AV Dicey, The Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
B. Vested Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Joseph H Beale, Selections from A Treatise on the Conflict of Laws . . . . . . 11
Joseph H Beale, A Treatise on the Conflict of Laws, vol 3 . . . . . . . . . . . . . . . 11
C. The Local Law Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Walter Wheeler Cook, The Logical and Legal Bases of the
Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. A Theory of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
E. Governmental Interest Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Brainerd Currie, “Notes on Methods and Objectives in the
Conflict of Laws” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Brainerd Currie, “Comment on Babcock v. Jackson” . . . . . . . . . . . . . . . . . . . 20
David F Cavers, “A Critique of the Choice-of-Law Problem” . . . . . . . . . . . 21
F. Choices for Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
R Lea Brilmayer, Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
G. Rights and Fairness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
R Lea Brilmayer, Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
xi
xii Detailed Table of Contents
Chapter Three Conflicts and the Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

I. Pre-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Reference re Upper Churchill Water Rights Reversion Act . . . . . . . . . . . . . . . 30
II. Post-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Morguard Investments Ltd v De Savoye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Hunt v T&N plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Tolofson v Jensen; Lucas (Litigation Guardian of) v Gagnon . . . . . . . . . . . . 52
British Columbia v Imperial Tobacco Canada Ltd . . . . . . . . . . . . . . . . . . . . . . 54
Club Resorts Ltd v Van Breda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Chapter Four Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
II. Public Policy and the Enforcement of Foreign Judgments and Awards . . . . . . . . . . . . . . . . . . 66
A. Public Policy, Natural Justice, and Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
United States of America v Ivey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
B. Attenuated Effect of Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Civil Code of Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Society of Lloyd’s v Meinzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
C. Public Policy as a Basis for the Reduction of Excessive Foreign Damage Awards? . . 86
D. Availability of the Public Policy Defence in the Interprovincial Context? . . . . . . . . . . . 87
III. Public Policy and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) . . . . . . . . . . . . . . . . . . 88
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
B. Overriding Mandatory Rules of the Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
C. Overriding Mandatory Rules of Another Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Gillespie Management Corp v Terrace Properties . . . . . . . . . . . . . . . . . . . . . . 97
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
D. Contractual Choice of Law Clauses and Protection of the Weaker Party . . . . . . . . . . . 101
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
E. Public Policy and Choice of Law in the Interprovincial Context . . . . . . . . . . . . . . . . . . . . 102
IV. Public Policy and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
B. Overriding Mandatory Forum Rules and Contractual Forum
Selection Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
C. Public Policy and Jurisdiction in Marriage Dissolution Proceedings . . . . . . . . . . . . . . . 105
Hincks v Gallardo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Detailed Table of Contents xiii
V. Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

A. Jurisdiction and Choice of Law in Crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
B. Recognition of Foreign Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
C. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Huntington v Attrill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
VI. Revenue Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
B. Indirect Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Stringam v Dubois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
C. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
D. Relaxation of the Tax Exclusion? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Re Sefel Geophysical Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Re Matol Botanical International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
E. International Tax Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
F. The Tax Exclusion in the Interprovincial Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
VII. Other Public Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
United States of America v Ivey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
B. Nationalization, Expropriation, and Confiscation Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Chapter Five Personal Connecting Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
A. Relevance of the Personal Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
B. Domicile Versus Nationality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
C. Domicile Versus Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
II. Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
A. Domicile of Origin and Domicile of Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Agulian v Cyganik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Foote v Foote Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Adoption—152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Domicile and Habitual Residence Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
B. Persistence of the Domicile of Origin and the Doctrine of Revival . . . . . . . . . . . . . . . . . 165
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
C. Domicile of Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Family Law Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
xiv Detailed Table of Contents

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
D. Domicile of Incapacitated Adults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
E. Domicile and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
F. Relevance of Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Walter Wheeler Cook, The Logical and Legal Bases of the
Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Restatement (Second) of Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
III. Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
B. Constitutional Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
C. Physical Presence and Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
D. Ordinary Residence and Habitual Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Nafie v Badawy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Knowles v Lindstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
PA v KA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
E. Relevance of Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Haig v Canada; Haig v Canada (Chief Electoral Officer) . . . . . . . . . . . . . . . . 197
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
IV. Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
National Trust Company Limited v Ebro Irrigation and
Power Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
V. The Principle of Proximity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
PART TWO JURISDICTION

Chapter Six Jurisdiction in Personam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
II. Parties to an Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
A. Plaintiffs: Standing to Sue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Success International Inc v Environmental Export International
of Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
B. Immunities from Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
III. Circumstances Justifying Assumption of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
A. Jurisdiction Simpliciter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
1. Defendants Within the Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Maharanee of Baroda v Wildenstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Chevron Corp v Yaiguaje . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Detailed Table of Contents xv
2. Defendants Outside the Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

Court Jurisdiction and Proceedings Transfer Act . . . . . . . . . . . . . . . . . . . . . . . 223
Moran v Pyle National (Canada) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Court v Debaie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Tamminga v Tamminga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
JTG Management Services Ltd v Bank of Nanjing Co Ltd . . . . . . . . . . . . . . . . 256
Chevron Corp v Yaiguaje . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
B. Class Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Harrington v Dow Corning Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
Ward v Canada (Attorney General) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
Kaynes v BP, PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
Chapter Seven
Discretion to Decline Jurisdiction and Injunctions
to Restrain Foreign Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
II. The English Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Spiliada Maritime Corp v Cansulex Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Société Nationale Industrielle Aérospatiale v Lee Kui Jak . . . . . . . . . . . . . . . 314
Airbus Industrie GIE v Patel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324
III. The Canadian Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
Amchem Products Inc v British Columbia (Workers’ Compensation
Board) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
Teck Cominco Metals Ltd v Lloyd’s Underwriters . . . . . . . . . . . . . . . . . . . . . . . 338
A. Jurisdiction-Selecting and Arbitration Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349
1. Jurisdiction-Selecting Clauses: The Common Law Rule . . . . . . . . . . . . . . . . . . . . . . . . 350
ZI Pompey Industrie v ECU-Line NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Momentous.ca Corp v Canadian American Association of
Baseball Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362
Hudye Farms Inc v Canadian Wheat Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363
Douez v Facebook, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375
2. Arbitration Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
Prince George (City) v McElhanney Engineering Services Ltd . . . . . . . . . . . . 377
B. Class Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
Ward v Canada (Attorney General) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
PART THREE FOREIGN JUDGMENTS

Chapter Eight
Recognition and Enforcement of Foreign Judgments
and Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
xvi Detailed Table of Contents
II. The Common Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394

A. Pecuniary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
1. Final and Conclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
Nouvion v Freeman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
2. Jurisdiction of the Foreign Court in the International Sense . . . . . . . . . . . . . . . . . . . 400
a. Presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Forbes v Simmons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
b. Submission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
First National Bank of Houston v Houston E & C Inc . . . . . . . . . . . . . . . . . . . . 402
Clinton v Ford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Mid-Ohio Imported Car Co v Tri-K Investments Ltd . . . . . . . . . . . . . . . . . . . . . 407
c. A Real and Substantial Connection: The Morguard Rule . . . . . . . . . . . . . . . . . . 413
Beals v Saldanha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413
Braintech Inc v Kostiuk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
3. Defences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426
Godard v Gray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Beals v Saldanha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
B. Non-Pecuniary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438
Pro-Swing Inc v Elta Golf Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439
C. Class Action Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
Currie v McDonald’s Restaurants of Canada Ltd . . . . . . . . . . . . . . . . . . . . . . . 455
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
Meeking v Cash Store Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
III. Conversion by Registration: Statutory Modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
A. Reciprocal Enforcement of Judgments Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
B. The 1924 and 1958 Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
Central Guaranty Trust Co v Deluca . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
C. The Post-Morguard Model Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486
Enforcement of Canadian Judgments and Decrees Act . . . . . . . . . . . . . . . . . 486
IV. Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491
Foreign Arbitral Awards Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491
Schreter v Gasmac Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492
PART FOUR CHOICE OF LAW: GENERAL

Chapter Nine Choice of Law Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507
I. Choice of Law as Part of the System of Private International Law . . . . . . . . . . . . . . . . . . . . . . . . 508
A. Practical Function of Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
B. Choice of Law as an Expression of Theories of Private International Law . . . . . . . . . . . 509
II. The Standard or Classical Approach to Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
A. Nature of the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
1. Components of the Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
2. Multilateral and Unilateral Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
3. Reference to More Than One Legal System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
B. The Process of Applying the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
1. Establishing the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
2. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516
Detailed Table of Contents xvii
3. Following the Connecting Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517

4. Application of the Legal Rule Indicated by the Choice of Law Rule . . . . . . . . . . . . . 519
a. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519
b. Exceptions to the Application of a Choice of Law Rule . . . . . . . . . . . . . . . . . . . 519
c. Ambiguities in the Application of a Choice of Law Rule . . . . . . . . . . . . . . . . . . 519
Neilson v Overseas Projects Corp of Victoria Ltd . . . . . . . . . . . . . . . . . . . . . . . . 519
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
III. Perceived Shortcomings of the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
A. Arbitrariness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
B. No Account Systematically Taken of Real Conflict of State Policies
That Underlie the Choice of Law Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
C. No Account Systematically Taken of International and Interprovincial Policies . . . . . 535
IV. Alternatives to the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
A. Common Characteristic: Issue Particularized Rather Than Categorized . . . . . . . . . . . . 536
B. Proper Law Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
C. Governmental Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537
D. Principles of Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540
E. The Second Restatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
F. The “Better Law” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
G. Substantive Rules for Multistate Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
H. Defenders of the Traditional System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
V. The Present Orientation of Canadian Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
Chapter Ten Applying Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547

I. Foreign Law and the Adversary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547
A. Foreign Law: Fact or Law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547
Richard Fentiman, Foreign Law in English Courts:
Pleading, Proof and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549
B. Implications of Party Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549
Old North State Brewing Co v Newlands Services Inc . . . . . . . . . . . . . . . . . . . 550
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551
Pettkus v Becker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553
C. Where the Court Must Apply Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554
Fernandez v “Mercury Bell” (The) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557
Interjurisdictional Support Orders Act, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 558
D. Where Foreign Law Must Be Excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
II. Pleading and Proving Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
A. Pleading Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
Yordanes v Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
B. Proving Foreign Law Through Expert Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
Bumper Development Corp Ltd v Commissioner of Police
of the Metropolis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569
Mercantile Mutual Insurance (Australia) Ltd v Neilson . . . . . . . . . . . . . . . . . . 570
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573
xviii Detailed Table of Contents
C. Statutory Modes of Proof: Production of Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573

D. Admission or Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
E. Stated Case to Foreign Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
III. Within the Canadian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
A. Judicial Notice by the Supreme Court of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
Hunt v T&N plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
B. Statutory Authority for Taking Judicial Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
C. Implications of the Constitutional Principles of Order and Fairness? . . . . . . . . . . . . . . . 578
Nystrom v Tarnava . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 579
D. Pleading and Determining the Constitutionality of Extraprovincial Law . . . . . . . . . . . 581
Hunt v T&N plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581
Chapter Eleven Law of Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591

I. The Substance/Procedure Distinction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591
II. Limitation of Actions (Prescription) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592
Tolofson v Jensen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597
III. Remedial Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
A. Statute of Frauds and Like Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
B. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604
C. Recovery of Legal Costs and Pre-Judgment Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
IV. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
International Association of Science and Technology for
Development v Hamza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
V. Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
A. Procedure or Substance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
B. Obtaining Evidence Across Borders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620
1. Requests for Assistance by Canadian Courts to Foreign Authorities . . . . . . . . . . . . 620
2. Requests for Assistance by Foreign Authorities to Canadian Courts . . . . . . . . . . . . 620
3. Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
4. Cross-Border Legal Assistance Within Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
PART FIVE OBLIGATIONS

Chapter Twelve Torts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
I. General Choice of Law Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
A. The Rule in Phillips v Eyre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Phillips v Eyre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629
Detailed Table of Contents xix
McLean v Pettigrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630

Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631
B. Trends in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631
Babcock v Jackson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636
GlobalNet Financial.com Inc v Frank Crystal & Co Inc . . . . . . . . . . . . . . . . . . . 639
C. Developments in the United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643
D. The Current Law in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644
Tolofson v Jensen; Lucas (Litigation Guardian of) v Gagnon . . . . . . . . . . . . 644
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663
Somers v Fournier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676
II. Particular Tort Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
A. Products Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
B. Fraudulent or Negligent Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678
C. Economic Torts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
1. Inducing Breach of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
2. Conspiracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
3. Passing Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
D. Torts Involving Interference with Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
E. Nuisance and Environmental Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
F. Defamation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
Éditions Écosociété Inc v Banro Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
G. Statutory Tort Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
III. Particular Issues in Tort Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
A. Tort Claims Connected to Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
B. Contributory Negligence and Multiple Tortfeasors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
C. Interspousal Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
D. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
E. Vicarious Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
F. Subrogated Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
Chapter Thirteen Contracts and Unjust Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691
A. Contracts Subject to Internationally Uniform Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691
B. Internationally Uniform Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692
C. Choice of Law by Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693
II. The Proper Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
A. Express Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
Vita Food Products Inc v Unus Shipping Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
B. No Express Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707
Richardson International, Ltd v Mys Chikhacheva (The) . . . . . . . . . . . . . . . . 707
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712
Imperial Life Assurance Co of Canada v Segundo Casteleiro Y
Colmenares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713
xx Detailed Table of Contents
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717
Amin Rasheed Shipping Corp v Kuwait Insurance Co . . . . . . . . . . . . . . . . . . . 718
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723
C. Multiple Proper Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
Re Pope & Talbot Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726
D. Limits on the Parties’ Freedom to Choose the Proper Law . . . . . . . . . . . . . . . . . . . . . . . . . 731
1. Imposed by Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731
2. At Common Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
Nike Infomatic Systems Ltd v Avac Systems Ltd . . . . . . . . . . . . . . . . . . . . . . . . 732
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736
III. Issues That May Be Referable to a Law Other Than the Proper Law . . . . . . . . . . . . . . . . . . . . . . 739
A. Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739
Mackender v Feldia AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745
B. Contractual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746
C. Formalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747
Greenshields Inc v Johnston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751
D. Mandatory Rules of Legal Systems Other Than the Proper Law . . . . . . . . . . . . . . . . . . . . 752
1. Rules of the Lex Fori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753
Avenue Properties Ltd v First City Development Corporation Ltd . . . . . . . . 753
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755
Pearson v Boliden Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756
2. Rules of Foreign Laws Other Than the Proper Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760
a. Law of the Place of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760
Gillespie Management Corp v Terrace Properties . . . . . . . . . . . . . . . . . . . . . . 760
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766
b. The Law of a Friendly Foreign State That the Parties Intend to Violate . . . . . 766
c. Law of the Place of Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766
d. Other Interested State’s Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767
E. Third-Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
IV. The Law Governing Unjust Enrichment Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
Minera Aquiline Argentina SA v IMA Exploration Inc . . . . . . . . . . . . . . . . . . . 769
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774
V. Related Topics in Other Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774
PART SIX PROPERTY

Chapter Fourteen Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
I. Characterizing Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
Hogg v Saskatchewan (Provincial Tax Commission) . . . . . . . . . . . . . . . . . . . . 780
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
II. Exercising Jurisdiction Over Foreign Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
A. The Moçambique Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
British South Africa Co v Companhia de Moçambique . . . . . . . . . . . . . . . . . . 783
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784
Hesperides Hotels Ltd v Muftizade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785
Detailed Table of Contents xxi
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787
AV Dicey, The Conflict of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789
B. Exceptions Based on Contract or Equity Between Parties . . . . . . . . . . . . . . . . . . . . . . . . . 789
Godley v Coles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792
Ward v Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Catania v Giannattasio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795
III. Recognizing Foreign Judgments Affecting Land in the Forum . . . . . . . . . . . . . . . . . . . . . . . . . . 796
Duke v Andler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
O’Hara v Chapman Estate and MacVicar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799
IV. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
A. Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
Bank of Africa v Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
B. Formal Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
C. Essential Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
D. Civil Code of Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
V. Other Kinds of “Immovables” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807
Jurisdiction and the Recognition and Enforcement of Judgments
in Civil and Commercial Matters (Brussels I) . . . . . . . . . . . . . . . . . . . . . . . 807
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808
Galustian v The SkyLink Group of Companies, Inc . . . . . . . . . . . . . . . . . . . . . . 808
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 809
Chapter Fifteen Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
II. Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
A. Transfer of Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
Cammell v Sewell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 815
Winkworth v Christie Manson and Woods Ltd . . . . . . . . . . . . . . . . . . . . . . . . . 815
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822
Maden v Long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825
B. Security Interests in Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825
III. Mobile Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827
IV. Intangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
B. A Unitary or Pluralistic Choice of Law Approach? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
C. Characterization: Outright Assignment Versus Grant of Security . . . . . . . . . . . . . . . . . . 828
D. Contractual Relations Between the Assignor/Grantor and the
Assignee/Secured Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829
xxii Detailed Table of Contents
E. Relations Between the Assignee/Secured Creditor and the Debtor on the

Assigned Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829
F. Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
G. Effectiveness Against Third Parties and Priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
2. Determining the Location of the Assignor/Grantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 832
V. Money and Documentary Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
VI. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
B. Directly Held Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 836
C. Intermediated Securities (Security Entitlements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 837
D. Workability of a Global Choice of Law Approach to Intermediated Securities? . . . . . 838
VII. Deposit Accounts with Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839
Chapter Sixteen Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843
II. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844
A. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 845
Estates Administration Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 845
Estates Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846
Ontario Rules of Civil Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847
Ontario Rules of Civil Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847
B. Distinction Between Administration and Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848
Re Kloebe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849
Re Wilks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851
Re Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852
Jewish National Fund Inc v Royal Trust Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 856
C. Recognition of Foreign Personal Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857
Canadian Commercial Bank v Belkin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 858
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862
Re Pemberton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867
III. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867
A. Jurisdiction and Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868
Gillespie v Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875
B. Intestate Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875
Re Thom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 878
C. Testate Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 879
1. Formal Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880
Detailed Table of Contents xxiii
2. Essential Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881

In the Estate of Groos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881
Re Groos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 882
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883
3. Personal Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883
4. Interpretation or Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884
Re Cunnington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885
Montano v Sanchez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889
5. Revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890
Davies v Davies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 891
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
IV. Dependants’ Relief Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
Re Urquhart Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
V. The Claims of Foreign States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
Stringam v Dubois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899
In the Estate of Maldonado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903
PART SEVEN FAMILY LAW

Chapter Seventeen Marriage and Cohabitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
I. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
United Nations Statistics Division, The World’s Women 2015:
Trends and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 908
II. Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909
Mary Ann Glendon, The Transformation of Family Law . . . . . . . . . . . . . . . . 909
A. Constitutional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Hill v Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911
B. Validity of Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
1. Formal Validity: Lex Loci Celebrationis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
a. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
Brook v Brook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
b. Parental Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
c. Subsequent Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
2. Essential Validity: Lex Loci Domicilii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
a. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
Canada (Minister of Employment and Immigration) v Narwal . . . . . . . . . . 915
b. Elements of Essential Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 916
Marriage (Prohibited Degrees) Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918
Family Law Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
C. Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
xxiv Detailed Table of Contents
III. Cohabitation and Civil Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919

Hague Conference on Private International Law, Update on the
Developments in Internal Law and Private International Law
Concerning Cohabitation Outside Marriage, Including
Registered Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
Chapter Eighteen Dissolution of Marriage and Other Unions . . . . . . . . . . . . . . . . . . . . . . . 923

Trends and Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924
I. Constitutional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924
II. Divorcing in Canada: Jurisdiction and Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
A. Domicile as a Basis for Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
B. Broadening the Jurisdictional Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
Divorce Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926
Divorce Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926
Hincks v Gallardo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 928
C. Parallel Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929
D. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
III. Recognition of Foreign Divorces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
A. Interprovincial Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
B. Foreign Country Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
Divorce Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 932
RNS v KS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933
C. Doctrine of Preclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
D. Extrajudicial Divorces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Schwebel v Ungar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 936
Amin v Canada (Minister of Citizenship and Immigration) . . . . . . . . . . . . . . 937
IV. Dissolution of Other Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942
Vital Statistics Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942
V. Spousal Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
Chapter Nineteen Nullity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

I. Void and Voidable Marriages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945
II. Jurisdiction to Grant a Nullity Decree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
A. Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
Savelieff v Glouchkoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
Davies v Davies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 949
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
B. Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Sangha v Mander . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
C. Place of Celebration of Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
III. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Sangha v Mander . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
Detailed Table of Contents xxv
IV. Recognition of Foreign Nullity Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954

A. Jurisdiction of the Foreign Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
Gwyn v Mellen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
B. Defences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
Chapter Twenty Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961

I. Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961
Peter M North, “Reform, but Not Revolution: Children” . . . . . . . . . . . . . . . 961
A. Constitutional Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
1. Division of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
2. The Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
B. Jurisdiction and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
1. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
Dovigi v Razi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964
2. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968
C. Enforcement of Extraprovincial and Foreign Custody Orders . . . . . . . . . . . . . . . . . . . . . . 968
Children’s Law Reform Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 969
Family Law Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 970
Gillespie v Gillespie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 971
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974
D. International Child Abduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974
Convention on the Civil Aspects of International Child Abduction . . . . . . . 975
Thomson v Thomson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 978
Finizio v Scoppio-Finizio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 990
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995
1. Non-Removal Clauses in Final Custody Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
II. Child Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997
Jasen v Karassik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 998
III. Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
Hague Conference on Private International Law,
Proceedings of the Seventeenth Session . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
A. The Hague Convention on Intercountry Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004
Convention on Protection of Children and Co-operation in
Respect of Intercountry Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004
ME v Alberta (Minister of Human Services) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1009
IV. Cross-Border Surrogacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013
Chapter Twenty-One Matrimonial Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

I. Introduction: The Common Law Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
II. Matrimonial Property Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
A. Three Approaches to Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1020
Tezcan v Tezcan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1020
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1025
Christopher v Zimmerman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026
xxvi Detailed Table of Contents
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1028
Matrimonial Property Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1029
Family Property Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1029
Marital Property Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1030
Family Law Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1030
Matrimonial Property Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1030
Family Law Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
B. Domestic Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Amlani v Hirani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
Friedl v Friedl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1036
Table of Cases
A page number in boldface type indicates that the text of the case or a portion thereof is repro-
duced. A page number in lightface type indicates that the case is quoted briefly or discussed.
Cases mentioned within excerpts are not listed.
243930 Alberta Ltd v Wickham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Achillopoulos, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852
Adair, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 826
Adam v Adam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Adams v Clutterbuck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
Adelman v Adelman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Adoption 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 157, 163, 197
Advance Diamond Drilling Ltd (Receiver of ) v National Bank Leasing Inc . . . . . . . . . . . . . . . . . . . . . . . . 826
Aetna Financial Services Ltd v Feigelman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
AG Armeno Mines and Minerals Inc v Newmont Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Agro Co of Canada Ltd v The “Regal Scout” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
Agulian v Cyganik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 142, 154, 165
Airbus Industrie GIE v Patel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297, 324
Akai Pty Ltd v The People’s Insurance Co Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756
Albeko Schuhmaschinen AG v Kamborian Shoe Machine Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745
Albert v Fraser Companies Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784, 785
Alberta Treasury Branches v Granoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Allard, United States v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Allen v Hay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565, 566
Allison v Allison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 891
Alspector v Alspector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Ambrose v Ambrose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533, 914
Amchem Products Inc v British Columbia (Workers’ Compensation Board) . . . . . . . . . . 4, 298, 327, 930
Amin v Canada (Minister of Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937, 941
Amin Rasheed Shipping Corp v Kuwait Insurance Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530, 705, 718, 752
Amlani v Hirani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Andrews v Grand & Toy Alberta Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
Annesley, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518, 529, 530
Antelope, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Apt v Apt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913
Armoyan v Armoyan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
Arnold v Teno . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
xxvii
xxviii Table of Cases
Ash v Lloyd’s Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 756

Association of Architects (Ontario) v Deskin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573
Atlantic Star, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
Avenue Properties Ltd v First City Development Corporation Ltd . . . . . . . . . . . . . . . . . 102, 515, 519, 602,
737, 753, 756
Azam v Jan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106, 574, 919
Babcock v Jackson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535, 630, 632, 637, 638, 644, 677

Bagg v Budget Rent-A-Car of Washington-Oregon, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
Baker v Canada (Minister of Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Baker v General Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Banco do Brasil SA v The Alexandros G Tsavliris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
Bank of Africa v Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
BC Family Relations Act, Re: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
Beals v Saldanha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 71, 72, 86, 394, 413, 426, 429
Beaudoin v Trudel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
Bednar v Deputy Registrar of Vital Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Bell v Kennedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Ben-Ari v Minister of the Interior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917
Berchtold, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
Bernhard v Harrah’s Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637
Berthiaume v Dastous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913
Bessette, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885, 890
Bieberstein v Kirchberger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Black v Law Society of Alberta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Blair v Chung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155, 197
Block Bros Realty Ltd v Mollard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Blood Tribe Department of Health, Canada (Privacy Commissioner) v . . . . . . . . . . . . . . . . . . . . . . . . . . . 618
Bonython v Commonwealth of Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 724
Bouchard v JL Le Saux Ltee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
Bowes v Chalifour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
Bowie, Re; Ex parte Breull . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Boyd v Wray; O’Connor v Wray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
Boys v Chaplin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604, 643, 644
Braintech Inc v Kostiuk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413, 418
Breeden v Black . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 685
Bremer v Freeman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880
Brereton v Canadian Pacific Railway Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784
British South Africa Co v Companhia de Moçambique . . . . . . . . . . . . . . . . . . . . . . . . . . . 782, 783, 784, 785,
789, 792, 796, 799
British South Africa Co v De Beers Consolidated Mines Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
Broad v Pavlis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Brook v Brook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912, 914
Brooks v Brooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964
Brown v Marwich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597
Brown v Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
Brown v Régie de l’assurance automobile du Québec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616, 688, 689
Brown, Gow, Wilson v Beleggings-Societeit NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134, 135
Table of Cases xxix
Bruker v Markovitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035

Bulley, United States v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616, 689
Bumper Development Corp Ltd v Commissioner of Police of the Metropolis . . . . . . 216, 566, 569, 615
Burke Estate, In re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
Burns, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Cammell v Sewell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812, 813, 815, 822, 826

Canada Life v CIBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Canada Post Corp v Lépine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63, 466
Canadian Acceptance Corporation v Matte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Canadian Commercial Bank v Belkin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 858, 862
Canadian Commercial Bank v Carpenter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678
Canadian National Steamships Co Ltd v Watson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Canadian Pacific Rlwy Co v Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
Canastrand Industries Ltd v The Lara S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745
Capon, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
Cariello v Perrella . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Carom v Bre-X Minerals Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Castillo v Castillo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600, 601
Catania v Giannattasio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794, 795
Caterpillar Tractor Co v Ed Miller Sales & Rentals Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111, 622
Central Guaranty Trust Co v Deluca . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
Central Sun Mining Inc v Vector Engineering Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678
Charron v Montreal Trust Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746, 1018
Chatillon v The Canadian Mutual Fire Insurance Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
Chevron Corp v Yaiguaje . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63, 207, 220, 227, 262
Christopher v Zimmerman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026, 1028
Claus v Sonderegger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Clinton v Ford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Cloyes v Chapman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Club Resorts Ltd v Van Breda . . . . . . . . . . . . . . . . . . . . 4, 36, 60, 63, 188, 207, 213, 226, 235, 327, 345, 810
Coady v Quadrangle Holdings Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
Cohn, In re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
Colt Industries v Sarlie (No 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
Comaplex Resources International Ltd v Schaffhauser Kantonalbank . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Commission de la Construction du Québec v Access Rigging Services Inc . . . . . . . . . . . . . . . . . . . . . . . 395
Commonwealth Bank v White; Ex parte Lloyd’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Compagnie Tunisienne de Navigation SA v Compagnie d’Armement Maritime SA . . . . . . . . . . . . . . . 694
Cook, AG Alta v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172, 925
Cortés v Yorkton Securities Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438
Cotroni, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Court v Debaie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 243
Cowley v Brown Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689
Cox v Ergo Versicherung AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
Cruse v Chittum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Cunnington, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884
Curati v Perdoni . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886
Currie v McDonald’s Restaurants of Canada Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455, 467
xxx Table of Cases
D v D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Daebo Shipping Co Ltd v Ship Go Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
Davies v Collins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574, 894
Davies v Davies [1915] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 891, 894
Davies v Davies [1985] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 949, 950
Davison v Sweeney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
De Beers Consolidated Mines Limited v Howe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
De Havilland Aircraft of Canada Ltd, France (Republic) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
De Nicols v Curlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
De Reneville v De Reneville . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945
Deacon v Chadwick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Dell Computer Corp v Union des consommateurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104, 377, 385
Desautels v Katimavik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597
Devos v Devos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
DiPalma v Smart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597
Donald v Huntley Service Centre Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
Donnelly, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852
Douez v Facebook, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 367
Dovigi v Razi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964
Downton v Royal Trust Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Droit de la famille—2054 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Droit de la famille—072464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941
Duke v Andler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796, 797, 799, 875
Dukelow, Manitoba (Public Trustee) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Dym v Gordon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637
Dymocks Franchise Systems (NSW) Pty Ltd v Todd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577
Eastern Power Limited v Azienda Comunale Energia and Ambiente . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745

Éditions Écosociété Inc v Banro Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 681, 685
Edward v Edward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533
Edwards v Erie Coach Lines Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638, 639, 677
Ellis v Wentzell-Ellis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995
Emperor Napoleon Bonaparte, In re the late . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Etler v Kertesz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Exco Corp Ltd v Nova Scotia Savings & Loan Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
Expedition Helicopters Inc v Honeywell Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375
F (F’s Personal Representatives v IRC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Fareed v Latif . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Fazail v Canada (Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Feiner v Demkovicz (falsely called Feiner) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 558, 915, 918
Fergusson’s Will, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890
Fernandez v “Mercury Bell” (The) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554, 557
Filinov, R v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Finizio v Scoppio-Finizio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 990
First National Bank of Houston v Houston E & C Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
Foote v Foote Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147, 153, 154, 166
Forbes v Simmons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Table of Cases xxxi
Forsythe v Forsythe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019

Foster v Driscoll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98, 99, 100
Fournier c Giroux . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Freehold Land Investments Ltd v Queensland Estates Pty Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737
Friedl v Friedl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035, 1036
Fromovitz v Fromovitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Frustaglio v Barbuto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913
Fulton, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890
Fundy Settlement v Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Galustian v The SkyLink Group of Companies, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808

General Motors Acceptance Corp of Canada Ltd v Town & Country Chrysler Ltd . . . . . . . . . . . . . . . . . 826
German Savings Bank v Tetrault . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Ghaznavi v Kashif-Ul-Haque . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
Gilbertson, Her Majesty the Queen v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Gillespie v Gillespie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 971, 974
Gillespie v Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153, 869
Gillespie Management Corp v Terrace Properties . . . . . . . . . . . . . . . . . . . . . . 97, 98, 99, 602, 760, 766, 768
GlobalNet Financial.com Inc v Frank Crystal & Co Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639
Globe-X Management Ltd (Proposition de) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
GM v MAF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
GMAC Commercial Credit Corp of Canada v TCT Logistics Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829
Godard v Gray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Godbout v Longueuil (City) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Godley v Coles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790, 792
Golden Acres Ltd v Queensland Estates Pty Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736
Gomez-Morales v Gomez-Morales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019
Gordon v Goertz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963, 996, 997
Gould v Western Coal Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Gray v Formosa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960
GreCon Dimter inc v JR Normand inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
Greenshields Inc v Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747, 751, 752
Grewal v Kaur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Groos, In the Estate of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881
Groos, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 882
Gunn v The Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Gwyn v Mellen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951, 954, 959
Haig v Canada; Haig v Canada (Chief Electoral Officer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Halley, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629
Halpern v Canada (Attorney General) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Hao v Canada (Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Harden, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116, 117, 122, 559
Harding v Wealands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605, 607
Harrer, R v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Harrington v Dow Corning Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
Harry, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Hashmi v Hashmi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
xxxii Table of Cases
Hassan v Hassan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913

Hassan and Hassan, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Hazimeh, Canada (Citizenship and Immigration) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912, 941
Hejzlar v Mitchell-Hejzlar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
Hendsbee v Khuber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 597
Henry v Henry Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618
Hesperides Hotels Ltd v Muftizade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785, 787, 799
Heung Won Lee, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
Hill v Hill [1929] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911
Hill v Hill [2010] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862
Hilton v Guyot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Hincks v Gallardo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105, 106, 921, 928, 942
Hlynski v Hlynski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019, 1025
Hogg v Saskatchewan (Provincial Tax Commission) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 780, 782
Hole, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782, 903
Hollandia, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
Holman v Johnson, alias Newland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Holt Cargo Systems Inc v ABC Containerline NV (Trustees of ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553
Hoole v Hoole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
Hope v Hope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
Howe Louis, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
Hudye Farms Inc v Canadian Wheat Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363
Hunt v T&N plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 36, 45, 88, 129, 394, 438, 439, 575, 581, 622
Hunter v Hunter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Huntington v Attrill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111, 114, 115, 517
Hurst v Leimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Hussain v Canada (Minister of Public Safety & Emergency Preparedness) . . . . . . . . . . . . . . . . . . . . . . . . 203
Hyde v Hyde . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107, 910
HZ v Unger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Ichi Canada Ltd v Yamauchi Rubber Industry Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679

Imperial Life Assurance Co of Canada v Segundo Casteleiro Y Colmenares . . . . . . . . 713, 717, 718, 752
Imperial Tobacco Canada Ltd, British Columbia v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 36, 54
Impulsora Turistica de Occidente SA de CV v Transat Tours Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . . . 454
Indian Residential Schools, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
Indyka v Indyka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
Infineon Technologies AG v Option Consommateurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
International Association of Science and Technology for Development v Hamza . . . . . . . 217, 608, 615
Interprovincial Co-operatives Ltd v R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 681
Inukshuk Wireless Partnership v NextWave Holdco LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810
Ironrod Investments Inc v Enquest Energy Services Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Ivey, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 71, 114, 115, 122, 129, 130, 133
J (A Minor) (Abduction: Custody Rights), Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

J D’Almeida Araujo LDA v Sir Frederick Becker & Co Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604
Jabiri v Canada (Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Jablonowski v Jablonowski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 197
James Burroughs Distillers Plc v Speymalt Whisky Distrs Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
Table of Cases xxxiii
Jasen v Karassik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943, 998

Jenner v Sun Oil Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
Jeske v Jeske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799
Jewish National Fund Inc v Royal Trust Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852, 856, 857, 867
John Pfeiffer Pty Ltd v Rogerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599, 603, 606, 607
Johnson v Coventry Churchill Int’l Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
Jones’ Estate, In re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
JTG Management Services Ltd v Bank of Nanjing Co Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 256
Kadar (Estate of ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608

Kandola, Canada (Citizenship and Immigration) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1014
Kanwar v Kanwar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
Kaynes v BP, PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
Kazi v Canada (Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913
Kehr, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851
Kelemen v Alberta (Public Trustee) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857, 890
Kell v Henderson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638
Kelly v O’Brian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
Kern v Kern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
Kerr v Kerr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 910, 912, 914
Ketterer v Griffith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889, 890
Khan v Khan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Khan Resources Inc v WM Mining Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
Kingsway General Insurance Co v Canada Life Assurance Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689
Kloebe, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848, 849
Knight v Knight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
Knowles v Lindstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Komer, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
Koo, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Kornberg v Kornberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
Kubera v Kubera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
Kung v Kung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88, 93, 135, 559
L (A Child) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Laane & Baltser v Estonian SS Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115, 134
Lafarge Canada Inc v Khan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Lake v Canada (Minister of Justice) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Lam v Canada (Minister of Citizenship & Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Landry v Lachapelle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
Lane v Celadon Trucking Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637
Lang v Lapp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438
Lantheus Medical Imaging Inc v Atomic Energy of Canada Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Laurence v Laurence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019
Lavallee v Ferguson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
LaVan v Danyluk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
Le v Le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
Le Mesurier v Le Mesurier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
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Lear v Lear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570

Lemenda Ltd v African Middle East Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Leonard v Booker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
Lépine, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Lepre v Lepre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
Leroux v Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Libman v The Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Lilydale Cooperative Limited v Meyn Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718
Lim v Lim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Livesley v Horst Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602, 604, 607
Lord Advocate v Jaffrey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Lorillard, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851, 852, 858
Lucasfilm Ltd v Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810
Luther v Sagor & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Luu v Ma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
Lynch v Provisional Government of Paraguay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532, 533
Macdonald v Macdonald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 780

MacDougall v Nova Scotia (Workers’ Compensation Appeals Tribunal) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Macedo v Macedo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793, 1019
Machado v Fontes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629
Mackender v Feldia AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739, 745
MacKinnon v National Money Mart Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
MacPherson v MacPherson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926
Maden v Long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822
Maharanee of Baroda v Wildenstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Maher v Groupama Grand Est . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605
Maldonado, In the Estate of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 899
Malo and Bertrand v Clement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785
Manners, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885
Marco Gambazzi v DaimlerChrysler Canada Inc and CIBC Mellon Trust Company . . . . . . . . . . . . . . . . . 72
Mark v Mark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 197
Martin, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
Martinez v County of Monroe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917
Mary Moxham, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
Matol Botanical International Ltd, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Matt (Guardian of ) v Barber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689
Mazarei v Icon Omega Developments Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577
McIntyre Porcupine Mines Ltd v Hammond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100, 559
McLean v Pettigrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630, 631
McVey, Re; McVey v United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
ME v Alberta (Minister of Human Services) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1009
Meeking v Cash Store Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
Meletis Apostolides v David Charles Orams & Linda Elizabeth Orams . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Mercantile Mutual Insurance (Australia) Ltd v Neilson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570
Meyer, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960
MGM Grand Hotel v Chiu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
MIB c M-PL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
Table of Cases xxxv
Mid-Ohio Imported Car Co v Tri-K Investments Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407

Miller v Miller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974
Milliken v Pratt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537
Milwaukee County v ME White Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Minera Aquiline Argentina SA v IMA Exploration Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769, 796
MM v United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Momentous.ca Corp v Canadian American Association of Baseball Ltd . . . . . . . . . . . . . . . . . . . . . 350, 362
Montano v Sanchez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886, 889
Montréal (Ville) c Dinasaurium Production Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Montreal Trust Co v Stanrock Uranium Mines Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
Moore v Mitchell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Moran v Pyle National (Canada) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223, 227, 518, 677, 678, 679, 685
Morgardshammar AB v HR Radomski & Co Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552
Morguard Investments Ltd v De Savoye . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 29, 30, 35, 36, 85, 109, 213,
217, 226, 393, 394, 395, 413, 480,
481, 486, 533, 677, 927, 946
Moses v Shore Boat Builders Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413
Mountain West Resources Ltd v Fitzgerald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
MTU Maintenance Canada Ltd v Kuehne & Nagel International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Mulroney and Coates, Re; Re Southam and Mulroney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Mundt v Mundt Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Murphy Estate v MNR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
Muscutt v Courcelles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 809
Nafie v Badawy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180, 927

Nantais v Telectronics Proprietary (Canada) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Narwal, Canada (Minister of Employment and Immigration) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 915
National Trust Co, The King v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
National Trust Company Limited v Ebro Irrigation and Power Company Limited . . . . . . . . . . . . . . . . . 204
NEC Corp v Steintron International Electronics Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Neilson v Overseas Projects Corp of Victoria Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519, 529, 644
Nelson v Nelson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155, 166
Neumeier v Kuehner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637, 638
Ngo v Luong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Nicholas v Nicholas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929
Nike Infomatic Systems Ltd v Avac Systems Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
Northern Trusts Co v McLean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
Nouvion v Freeman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
Nova v Grove . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862
Nuport Holdings Ltd and Michael Duff Estate, Re; Re Quieting of Titles Act . . . . . . . . . . . . . . . . . . . . . . 904
Nystrom v Tarnava . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577, 579
Ogden v Ogden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914

O’Hara v Chapman Estate and MacVicar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799, 875
Old North State Brewing Co v Newlands Services Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86, 115, 550
Ontario Bus Industries Ltd v The Federal Calumet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705
Oppenheimer v Cattermole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Orabi v Qaoud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 934, 941
xxxvi Table of Cases
Osvath-Latkoczy v Osvath-Latkoczy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

Overseas Food Importers and Brandt, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
Owen v Rocketinfo, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
PA v KA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191, 1029
Padolecchia v Padolecchia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937
Page Esate v Sachs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 891
Palmer v Palmer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019
Papadogiorgakis, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Papp v Papp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
Paul Lambert v An tArd-Chláraitheoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Pearson v Boliden Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 578, 686, 756
Pemberton, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857, 863
Penn v Lord Baltimore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Pershadsingh v Pershadsingh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
Petersen v AB Bahco Ventilation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
Pettkus v Becker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552, 553, 575
Phillips v Eyre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 627, 628, 629, 631, 643, 679, 686, 687
Pindling v National Broadcasting Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
Pink v Perlin & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017
Pitts v De Silva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964
Plummer v IRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Pollastro v Pollastro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 995
Pope & Talbot Ltd, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726
Porter-Conrad v Conrad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
Pourghasemi, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Precious Metal Capital Corp v Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
Prince v ACE Aviation Holdings Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Prince George (City) v McElhanney Engineering Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
Pro-Swing Inc v Elta Golf Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 115, 394, 399, 439
Prüller-Frey v Brodnig and Axa Versicherung AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
Pugh v Pugh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918
QRS 1 Aps v Frandsen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Qually v Qually . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
Questions Concerning Marriage, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Qureshi v Qureshi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
R Griggs Group Ltd v Evans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796, 875

Ralli Bros v Compania Naviera Sota y Aznar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766, 768
Red Sea Ins Co Ltd v Bouygues SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643
Regas Ltd v Plotkins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
Regazzoni v KC Sethia (1944) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98, 99, 100, 766
Régie National des Usines Renault SA v Zhang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
Reid v Francis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Richardson International, Ltd v Mys Chikhacheva (The) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707
Rioux v Berthelot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577
RJ Reynolds Tobacco Holdings, Inc, Attorney General of Canada v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Table of Cases xxxvii
RNS v KS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933, 943

Robb v Robb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Roberts v Bedard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Ross v Polak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Ross v Ross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
Ross Smith v Ross Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Rothgiesser v Rothgiesser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927, 943
Rowland v Rowland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Royal Bank of Canada v Neher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577
Royal Trust Corp of Canada v AS (W) S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557
Royal Trustco Ltd v Campeau Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Rubin v Eurofinance SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
Sabell v Liberty Mutual Insurance Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616

Sahibalzubaidi v Bahjat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
Saint John Shipbuilding & Dry Dock Co v Kingsland Maritime Corp . . . . . . . . . . . . . . . . . . . . . . . . . 745, 769
Same-Sex Marriage, Reference re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
Samson v Holden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
Sanderson v Halstead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
Sangha v Mander . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950, 951
Savelieff v Glouchkoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945, 946, 951
Sayers v International Drilling Co NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537, 686
SB v Alberta (Vital Statistics, Director) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911, 918
Scandinavian American National Bank v Kneeland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
Schibsby v Westenholz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Schmidt, Canada v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109, 110
Schreter v Gasmac Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492
Schultz v Boy Scouts of America Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638
Schwebel v Ungar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153, 531, 936
Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Sefel Geophysical Ltd, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Seidel v TELUS Communications Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Seifert v Seifert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
Senkiw v Muzyka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869
Sigurdson v Farrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Silva v John Doe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155, 197
Simonin v Mallac . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
Smith Estate v National Money Mart Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
Smith, Lawrence v Kitson, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
Société Nationale Industrielle Aérospatiale v Lee Kui Jak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314
Society of Lloyd’s v Meinzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71, 74, 85, 86, 103, 756
Soleimany v Soleimany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Solomon v Walters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945
Somers v Fournier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607, 608, 639, 644, 664, 676, 687
Sottomayor v De Barros (No 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918
South Pacific Import Inc v Ho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
Spar Aerospace Ltd v American Mobile Satellite Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 206
Speers Estate v Reader’s Digest Association (Canada) ULC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
xxxviii Table of Cases
Spencer v The Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110, 559, 622

Spiliada Maritime Corp v Cansulex Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Standard Construction Co v Wallberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Star Texas, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713
Starkowski v Attorney General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532, 533
Stephens v Falchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Stevens v Head . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606
Stifel v Hopkins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Stringam v Dubois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117, 898, 899
Stuart v Stuart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
Success International Inc v Environmental Export International of Canada Inc . . . . . . . . . . . . . . . . . . . 214
Suresh v Canada (Minister of Citizenship and Immigration) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Susan L v Steven L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968
SW, An English Local Authority v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Syncrude Canada Ltd v Hunter Eng Co Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737
Takefman c Golden Hope Mines Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205

Tamminga v Tamminga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 251
Taylor v Farrugia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
Teck Cominco Metals Ltd v Lloyd’s Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327, 338
Terry, R v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Tezcan v Tezcan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530, 782, 1019, 1020, 1025
Thom, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 876
Thomas, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573
Thomson v Thomson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 978, 990, 996
Thorne v Dryden-Hall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
Thornton v Prince George School District No 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
Thouin, Canada (Procureure générale) c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Thwaites v Aviva Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
Tipperary Developments Pty Ltd v The State of Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Tolofson v Jensen; Lucas (Litigation Guardian of ) v Gagnon . . . . . . . . . . . . 4, 36, 52, 176, 513, 545, 553,
593, 597-603, 607, 631, 644, 663,
664, 676, 677, 679, 686, 688
Tooker v Lopez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637, 638
Torni, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
Traders Finance Corporation v Casselman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
Triple Five Corporation v Walt Disney Productions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
Trottier v Rajotte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 155, 163
Tulloch v Hartley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Udny v Udny . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156, 165

Underwood, Alberta (Attorney General) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 914
United States (Securities and Exchange Commission) v Peever . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
United States Securities and Exchange Commission v Robert H Cosby and Global
Action Investments Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Upper Churchill Water Rights Reversion Act, Reference re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 36
Upper Ottawa Improvement Co, The v Hydro-Electric Power Commission (Ontario) . . . . . . . . . . . . . 553
Urquhart Estate, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154, 166, 895
Table of Cases xxxix
Vak Estate, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 878, 879

Vanston v Scott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
Vervaeke v Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
Vien Estate v Vien Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
Vita Food Products Inc v Unus Shipping Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694, 704, 731, 736, 766
Vladi v Vladi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530, 919, 1031
Vogler v Szendroi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 598
W v W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
W (V) v S (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
Wahl v Attorney General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Walkerville Brewing Co v Mayrand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Wall v Mutuelle De Poitiers Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605, 618
Walsh, Nova Scotia (Attorney General) v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 920
War Eagle Mining Co v Robo Management Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782, 784
Ward v Canada (Attorney General) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285, 386
Ward v Coffin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792, 793, 799
Ward v Ward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946, 950
Webster v Webster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793, 1019
Webster-Tweel v Royal Trust Corporation of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857
Weir v Lohr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123, 129
Weiss, In the Estate of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852
Westgate v Harris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570
Wheatland Industrial Park Inc, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808
White v Tennant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Wilkinson v Kitzinger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917, 921
Wilkison, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885
Wilks, Re . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849, 851, 857
Williams v Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Wilson v Servier Canada Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Wilton v Wilton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Winbigler v Winbigler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
Wincal Properties Ltd v Cal-Alta Holdings Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793
Winkworth v Christie Manson and Woods Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 815, 822
Wolch v Wolch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1029
Wong v Lee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607, 676
Wong v Wei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
Yemec, United States of America v . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454

Yordanes v Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
Young v Young [1959] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Young v Young [1993] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
Z v Z . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Zacks v Zacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
ZI Pompey Industrie v ECU-Line NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Zien v The Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
Zingre v The Queen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620
Zurich Life Insurance Company Limited v Branco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705, 769
PA R T O N E
General
CHAPTER ONE
Introduction
I. The Nature of the Subject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II. Organization of This Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
III. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I. THE NATURE OF THE SUBJECT

Private international law deals with three central questions. The first is the question of juris-
diction. In what situations will the courts of the forum have jurisdiction to entertain proceed-
ings containing a foreign element? Do they have jurisdiction over the parties to the dispute?
Do they have jurisdiction over the subject matter of the dispute? Should they decline to
exercise any jurisdiction that they possess so that the action may be heard more appropri-
ately elsewhere?
The second is the question of the recognition and enforcement of the decisions of for-
eign courts or tribunals. If one of the parties, for example, obtains a judgment in Saskatch-
ewan in a tort claim, under what circumstances will that judgment be enforced in another
province? If a spouse obtains a divorce decree from the courts of another country, will that
decree be recognized in the forum as validly dissolving the marriage?
The third is the question of choice of law. If the law of the forum differs from the law of
some potentially relevant foreign jurisdiction, which country’s rules will be applied to
resolve the dispute? How will that choice be made?
In a given dispute, all three of these questions may be raised. For example, an Ontario
corporation and an Alberta resident may enter into a contract in Alberta to be performed in
Ontario. The Ontario corporation may later start an action for breach of contract against the
Alberta resident in Ontario. Should it fail in that action, it may wish to start a different action
against the Alberta resident in British Columbia, where he or she owns assets. The British
Columbia court would first have to decide whether it has jurisdiction to hear the action
against the defendant. Second, the court would have to determine whether it should recog-
nize the Ontario decision in the defendant’s favour as a possible defence to the plaintiff’s
action in British Columbia. Third, should the limitation periods differ in British Columbia,
Ontario, and Alberta, the court might have to decide which province’s limitation rule is the
appropriate one to apply to the facts of the case.
It is important to appreciate that these three fundamental questions are procedural
rather than substantive. Rules of private international law do not resolve disputes between
parties in the same way that rules of contract or tort law do. They regulate the process by
which the dispute will ultimately be resolved. In a sense, they are civil procedure rules for
cases in which there are factual connections to some jurisdiction other than the forum.
3
4 Chapter 1 Introduction
Some issues of terminology should be noted. First, private international law is also widely
known as the conflict of laws, and these should be treated as synonyms. Second, neither
term is ideal. Private international law is not international, but rather is domestic—each sys-
tem of law establishes its own private international law rules. The notion of a conflict of laws,
in which two legal systems have rules that reach different results on the same set of facts,
makes some sense in the context of choice of law—one of the three central questions—but
does not seem to have much descriptive force in the context of the other two questions.
Third, private international law uses a special meaning of “country” or “state,” referring to a
geographical entity that has its own legal system. So while France and New Zealand are
countries, so are Ontario, New South Wales, and Michigan.
This book concentrates on the conflict of laws rules as applied in the common law prov-
inces and territories of Canada, although it does draw comparisons with and insights from
the civil law position in Quebec. In common law Canadian jurisdictions, the principles of
private international law have traditionally been developed by the courts with little statu-
tory innovation. But this is changing. In particular, three provinces now have a statutory
framework for taking jurisdiction, having enacted and brought into force the Court Jurisdic-
tion and Proceedings Transfer Act. Also, traditionally, the work of legal scholars has influenced
judicial decision-making in this area. This influence continues.
While the Canadian common law principles are derived from, and originally largely mir-
rored, principles developed by the English courts, there are now substantial differences
between the Canadian and English positions. This dichotomy has occurred partly as a result
of the United Kingdom’s membership in the European Union and the changes wrought
thereby. It is also due to the recognition by Canadian courts that Canada’s economic, social,
cultural, and constitutional framework is markedly distinct from England’s and that different
solutions to conflicts problems are therefore often required. This independent Canadian
approach has been highlighted by a series of decisions in the Supreme Court of Canada that
have drawn from principles of Canadian constitutional law and have changed the landscape
of Canadian private international law: see e.g. Morguard Investments Ltd v De Savoye, [1990] 3
SCR 1077, 76 DLR (4th) 256, reproduced in Chapter 3; Hunt v T&N plc, [1993] 4 SCR 289, 109 DLR
(4th) 16, reproduced in Chapters 3 and 10; Amchem Products Inc v British Columbia (Workers’
Compensation Board), [1993] 1 SCR 897, 102 DLR (4th) 96, reproduced in Chapter 7; Beals v
Saldanha, 2003 SCC 72, [2003] 3 SCR 416, and Pro-Swing Inc v Elta Golf Inc, 2006 SCC 52, [2006]
2 SCR 612, both reproduced in Chapter 8; Tolofson v Jensen; Lucas (Litigation Guardian of) v
Gagnon, [1994] 3 SCR 1022, 120 DLR (4th) 289, reproduced in Chapters 3, 11, and 12; and Club
Resorts Ltd v Van Breda, 2012 SCC 17, [2012] 1 SCR 572, reproduced in Chapters 3, 6, and 7. The
ramifications of the most recent of these decisions, Club Resorts, for several important issues
across the entire field of private international law will likely take several years to be
determined.
The recognition of the constitutional dimension to the subject area and of the import-
ance of Canada’s federal structure has also focused attention on the fact that the principles
that apply on the interprovincial plane will often differ from those in the truly international
sphere.
Another recent feature of Canadian conflicts law has been the adoption by Canada and
the implementation by the provinces of several international conventions, especially those
proposed by the Hague Conference on private international law: see e.g. the 1958 New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the 1985
III. Selected Bibliographical References 5
UNCITRAL Model Law on International Commercial Arbitration, both discussed in Chapter 8;

the 1980 United Nations Convention on Contracts for the International Sale of Goods, discussed
in Chapter 13; the 1985 Hague Convention on the Law Applicable to Trusts and on Their Recog-
nition, discussed in Chapter 16; and the 1980 Hague Convention on the Civil Aspects of Inter-
national Child Abduction and the 1993 Hague Convention on Protection of Children and
Cooperation in Respect of Intercountry Adoption, both discussed in Chapter 20. This develop-
ment has emphasized the international flavour of Canadian private international law.
II. ORGANIZATION OF THIS BOOK

Part One examines some general considerations underlying private international law. It
looks at the historical and theoretical underpinnings of the subject, explores its constitu-
tional implications, considers the influence of the concept of public policy, and investigates
the personal connecting factors of domicile and residence.
Part Two addresses the first key question in private international law—jurisdiction. As a
practical matter, this question may be the most important topic in the field. It arises in more
cases than any other topic. Part Two examines in detail the rules on taking jurisdiction. It also
discusses the judicial discretion to decline to exercise jurisdiction and the potential restraint
of foreign proceedings.
Part Three deals with the second key question—recognition and enforcement of foreign
judgments and arbitral awards. There are important conceptual links between the rules on
taking jurisdiction, covered in Part One, and the rules on recognition and enforcement of
foreign judgments.
Part Four introduces the reader to the third key question—choice of law—by analyzing
the judicial approaches to this issue and some of the pervasive problems it poses, by exam-
ining the methods through which foreign law is presented to a Canadian court, and by
investigating the important distinction between substance and procedure.
Part Five examines the choice of law principles that have been developed in the areas of
torts, contracts, and unjust enrichment.
Part Six considers each of the three key questions in the field of property law and
succession.
Part Seven considers each of the three key questions in the areas of marriage and cohab-
itation, dissolution of marriages and other unions, nullity, children, and matrimonial property.
III. SELECTED BIBLIOGRAPHICAL REFERENCES

Briggs, Adrian. Private International Law in English Courts (Oxford: Oxford University Press,
2014).
Briggs, Adrian. The Conflict of Laws, 3rd ed (Oxford: Oxford University Press, 2013).
Clarkson, CMV & Jonathan Hill. The Conflict of Laws, 4th ed (Oxford: Oxford University Press,
2011).
Collins, Lawrence, ed. Dicey, Morris and Collins on the Conflict of Laws, 15th ed (London: Sweet
& Maxwell, 2012).
6 Chapter 1 Introduction
Davies, Martin, Andrew S Bell & Paul Brereton. Nygh’s Conflict of Laws in Australia, 9th ed
(Sydney: LexisNexis Australia, 2013).
Fawcett, James & Janeen M Carruthers. Cheshire, North & Fawcett Private International Law,
14th ed (Oxford: Oxford University Press, 2008).
Fentiman, Richard. International Commercial Litigation, 2nd ed (Oxford: Oxford University
Press, 2015).
Forsyth, Christopher. Private International Law, 5th ed (Kenwyn, South Africa: Juta & Co, 2012).
Hay, Peter, Patrick J Borchers & Symeon C Symeonides. Conflict of Laws, 5th ed (St Paul, Minn:
West Group, 2010).
Hill, Jonathan & Adeline Chong. International Commercial Disputes: Commercial Conflict of
Laws in English Courts, 4th ed (Oxford: Hart, 2010).
McClean, David & Veronica Ruiz Abou-Nigm. Morris: The Conflict of Laws, 8th ed (London:
Sweet & Maxwell, 2012).
Mortensen, Reid, Richard Garnett & Mary Keyes. Private International Law in Australia, 2nd ed
(Sydney: LexisNexis Australia, 2011).
Pitel, Stephen GA & Nicholas S Rafferty. Conflict of Laws, 2nd ed (Toronto: Irwin Law, 2016).
Rogerson, Pippa. Collier’s Conflict of Laws, 4th ed (Cambridge: Cambridge University Press,
2013).
Walker, Janet. Castel & Walker: Canadian Conflict of Laws, 6th ed (Markham, Ont: LexisNexis
Butterworths, 2005) (loose-leaf).
Walker, Janet. Halsbury’s Laws of Canada: Conflict of Laws (Markham, Ont: LexisNexis, 2011).
CHAPTER T WO
History and Theory
I. Intellectual History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
II. Theoretical Perspectives on Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A. Comity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Vested Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. The Local Law Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. A Theory of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
E. Governmental Interest Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
F. Choices for Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
G. Rights and Fairness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
There is a rich literature covering the history, philosophy, purposes, and techniques of private
international law. Much of this literature is quite challenging for students who are just begin-
ning to study the subject. Nevertheless, students need to appreciate something of the sub-
ject’s unique history in the common law world and the fundamental disagreements that have
shaped its development. This appreciation involves the ability to identify and classify several
different theories. It also involves recognizing that some of this underlying theory lies close
to the surface, in the sense that it has an immediate impact on the way courts reach decisions.
Several factors in the development of this branch of the common law should be stressed:
its relative youth, its heavy borrowing of civil law doctrine, its reliance on academic author-
ities, and its penchant for deductive (variously stigmatized as metaphysical or mechanical)
reasoning. None of this is absolute, nor are these traits necessarily unique to the conflict of
laws. But they are more pronounced here than in other areas of the common law.
I. INTELLECTUAL HISTORY
In the common law world, the history of private international law is unique because the
subject was first considered by the courts in a significant way in the United States rather
than in England. English courts began to pay more attention to the effect of foreign law on
private individuals after the union of England and Scotland. Yet there were relatively few
cases compared with the number in the United States. So it is probably not surprising that
the first comprehensive treatment of the subject was by the American jurist Joseph Story,
whose Commentaries on the Conflict of Laws was published in 1834. This work was more than
just a commentary on the existing American case law. It also relied heavily on civilian author-
ities to provide a more comprehensive analytical framework for the subject. It substantially
7
8 Chapter 2 History and Theory
influenced courts on both sides of the Atlantic and provided a foundation for later writers in
both the United States and the United Kingdom.
The significance of the American origins of the subject in the common law should not be
exaggerated. These origins did not lead to any special tradition in either Canada or England
of treating American judicial decisions as authoritative or persuasive. Nor did Canadian
courts often recognize that the similar social conditions and federal form of government in
the United States made that country’s conflict of laws rules more relevant than England’s.
However, this may be largely a matter of form rather than substance, since many ideas and
theories were remarkably portable even though the courts did not always acknowledge
their origin. Moreover, the absence of a developed indigenous system made the English
courts more willing to rely on both civil law doctrines and academic authorities.
The reliance on academic authorities that began with Story became even more pro-
nounced with the publication of A.V. Dicey’s 1896 treatise, A Digest of the Law of England with
Reference to the Conflict of Laws. This work seems to have been influenced by the codification
movements that were prevalent in the latter part of the 19th century. In Dicey’s book, gen-
eral principles were announced as rules followed by explanations, illustrations, and excep-
tions. Anglo-Canadian courts found this format to be enormously useful, and throughout
the following century they regarded Dicey’s rules as equally authoritative as local statutes or
judicial precedents.
However, neither the format of the leading text nor the heavy borrowing of civilian con-
cepts can entirely explain the atypical method of reasoning used by the common law courts
in private international law. This method of reasoning, which seems more deductive than in
other areas of the common law, comes in part from the courts’ understanding of the nature
of the subject. Through much of its short history, the courts have treated the subject as a
distinct set of rules that assigned judicial and legislative competence over broad legal sub-
jects to various political units. This set of rules was viewed as not only apart from the disposi-
tive law that applied to any particular social issue but also more immutable or insulated from
changing social conditions. So the process appeared to be less one of finding the broader
principle in particular cases and applying it to a new situation by analogy and more one of
trying to fit new problems into a limited and closed list of principles or rules.
The influence of positivism or analytical jurisprudence may explain much of the preoc-
cupation of the theoretical writers on the conflict of laws since Story’s time. This preoccupa-
tion has been to identify the conflict of laws as a branch of the local or domestic law and not
as near-law or non-law such as public international law. In part, this may have been driven
by a desire to have the subject matter taken seriously and treated as a true science. However,
it was also an attempt to explain the actions of the courts. The common law courts did in fact
adopt a different attitude toward private international law from that toward public inter-
national law. In addition, comparative law scholars revealed the lack of uniformity in the
conflict of laws rules and, occasionally, their apparent local origin.
II. THEORETICAL PERSPECTIVES ON CHOICE OF LAW

The conflict of laws concerns three central topics: jurisdiction, choice of law, and recognition
and enforcement of foreign judgments. Most of the theoretical literature addresses the
second of these topics—choice of law. Some of that literature aims to provide a choice of law
II. Theoretical Perspectives on Choice of Law 9
theory, which is an explanation of why a court would resolve a dispute using a foreign law
rather than its own domestic law. Choice of law theories start from the fundamental assump-
tion that laws are territorial. The laws of each country have force within that country’s bor-
ders, but not beyond, and they bind only those who are present in the country. In explaining
why a court would sometimes apply the law of another country rather than the law of the
forum, choice of law theories aim to reconcile, where required, territorial sovereignty and
the application of foreign law.
It can be helpful to distinguish between theory and method. In contrast to a choice of law
theory, a choice of law method explains the way in which courts determine when to apply
foreign law. There are several different choice of law methods. This chapter concentrates on
choice of law theories. While there is some discussion of choice of law methods in this chap-
ter, that topic is considered in more detail in Chapter 9. Both theories and methods offer
important perspectives on how to think about choice of law and, on a broader level, about
the whole of the conflict of laws.
A. Comity
For some early writers, the application of foreign law by a domestic court was based on an
important principle of international law, the principle of comity. That is, the instances of
deference to foreign law were seen as an attempt to promote international harmony by
accommodating the views of a foreign sovereign in the expectation of receiving reciprocal
treatment. This is a principle of enlightened self-interest, which in some of its cruder forms
seems to be based on the same dynamics as the exchange of hostages. While Story relied on
the principle, it was strongly criticized by Dicey in England and by Joseph Beale in the United
States. These writers found the doctrine too vague and discretionary to explain the applica-
tion of foreign law. In Hilton v Guyot, 159 US 113 at 163-64 (1875), the United States Supreme
Court stated: “Comity, in the legal sense, is neither a matter of absolute obligation, on the
one hand, nor of mere courtesy and good will, upon the other.”
Joseph Story, Commentaries on the Conflict of Laws

(Boston: Hilliard, Gray & Company, 1834)
Every nation possesses an exclusive sovereignty and jurisdiction within its own territory.
The direct consequence of this rule is, that the laws of every State affect, and bind directly,
all property whether real or personal, within its territory; and all persons who are resident
within it, whether natural born subjects or aliens; and also all contracts made, and acts
done within it. A State may, therefore, regulate the manner and circumstances under
which property, whether real or personal or in action, within it shall be held, transmitted,
bequeathed, or transferred, or enforced; the condition, capacity, and state of all persons
within it; the validity of contracts, and other acts, done within it; the resulting rights and
duties growing out of these contracts and acts; and the remedies, and modes of admin-
istering justice, in all cases calling for the interposition of its tribunals to protect, vindicate,
and secure the wholesome agency of its own laws within its own domain [para. 18].
No State or nation can, by its laws, directly affect or bind property out of its own ter-
ritory, or persons not resident therein, whether they are natural born subjects or others.
This is a natural consequence of the first proposition; for it would be wholly incompatible
with the equality and exclusiveness of the sovereignty of any nation that other nations
should be at liberty to regulate either persons or things within its territories [para. 20].
From these two maxims or propositions there flows a third, and that is, that whatever
force and obligation the laws of one country have in another depends solely upon the
laws and municipal regulations of the latter; that is to say, upon its own proper jurispru-
dence and polity, and upon its own express or tacit consent [para. 23].
The true foundation on which the administration of international law must rest is, that
the rules which are to govern are those which arise from mutual interest and utility, from
a sense of the inconveniences which would result from a contrary doctrine, and from a sort
of moral necessity to do justice in order that justice may be done to us in return [para. 35].
AV Dicey, The Conflict of Laws

1st ed (London: Sweet & Maxwell, 1896) at 10
If the assertion that the recognition or enforcement of foreign law depends upon comity
means only that the law of no country can have effect as law beyond the territory of the
sovereign by whom it was imposed, unless by permission of the state where it is allowed
to operate, the statement expresses, though obscurely, a real and important fact. If, on the
other hand, the assertion that the recognition or enforcement of foreign laws depends
upon comity is meant to imply that, to take a concrete case, when English judges apply
French law, they do so out of courtesy to the French Republic, then the term comity is
used to cover a view which, if really held by any serious thinker, affords a singular speci-
men of confusion of thought produced by laxity of language. The application of foreign
law is not a matter of caprice or option, it does not arise from the desire of the sovereign
of England, or of any other sovereign, to show courtesy to other states. It flows from the
impossibility of otherwise determining whole classes of cases without gross inconvenience
and injustice to litigants, whether natives or foreigners.
B. Vested Rights
An alternative theory, also relied on by Story and later expounded by Dicey and Beale and
applied by such jurists as Holmes J and Cardozo J, was the theory of vested rights. The expo-
nents of this theory thought that it explained how foreign law became part of local law.
Under this theory, there was no exception from the territorial application of law, since for-
eign law was never applied as such. Instead, local law simply recognized a right that had
become vested in an individual under the foreign law at a time when the individual was
subject to the foreign law. The theory seemed to explain the mandatory nature of the con-
flict of laws in a more satisfactory way than the comity theory, since the courts had no discre-
tion in recognizing vested rights. Moreover, the theory emphasized the individual’s
entitlement to his or her vested right rather than the courts’ politeness or concession to
foreign sovereigns. The vested rights theory was widely adopted by the common law courts
in the early part of the 20th century and by the drafters of the American Law Institute’s
Restatement of the Conflict of Laws (1934).
Joseph H Beale, Selections from A Treatise on the Conflict of Laws

(New York: Baker, Voorhis, 1935) at 1, 18
Summary of the Conflict of Laws

Rights
§1. The topic called “Conflict of Laws” deals with the recognition and enforcement of
foreign created rights.
§2. In the legal sense, all rights must be created by some law. A right is artificial not a
mere natural fact; no legal right exists by nature. A right is a political, not a social thing;
no legal right can be created by the mere will of parties.
Law being a general rule to govern future transactions, its method of creating rights
is to provide that upon the happening of a certain event a right shall accrue. The law
annexes to the event a certain consequence, namely the creation of a legal right. The
creation of a right is therefore conditioned upon the happening of an event.
§3. Events which the law acts upon may be of two sorts; acts of human beings, and so
called “acts of God,” that is, events in which no human being has a share. Rights generally
follow acts of men; though sometimes a right is created as a result solely of an act of God
(as lapse of time: accretion).
§4. When a right has been created by law, this right itself becomes a fact; and its exist-
ence may be a factor in an event which the same or some other law makes the condition
of a new right. In other words, a right may be changed by the law that created it, or by
any other law having power over it.
§5. If no law having power to do so has changed a right, the existing right should
everywhere be recognized; since to do so is merely to recognize the existence of a fact.
• • •
Recognition of Rights
§47. A right having been created by the appropriate law, the recognition of its existence
should follow everywhere. Thus an act valid where done cannot be called in question
anywhere … .
Joseph H Beale, A Treatise on the Conflict of Laws, vol 3

(New York: Baker, Voorhis, 1935) at 1967-68 (footnotes omitted)
§73. The Doctrine of Vested Rights—Instead of the Dutch theory of comity, the com-
mon law has worked out indigenously a theory of vested rights, which serves the same
purpose, that is, the desire to reach a just result, and is not subject to the objections which
can be urged against the doctrine of comity.
• • •
This doctrine may be stated and explained as follows. Although the law to be applied
to the solution of the Conflict of Laws is the territorial law, this does not mean the law by
which such rights as those brought in question would be created within the territory. As
Westlake says, “The will which imposes a national law within territorial limits does not
necessarily decree the application of that law to all the cases there arising, when great
inconvenience would result from so doing.” The national law which is applied to the
solution of conflicts is that portion of the national law which deals with the solution of
conflicts. If by the national law the validity of a contract depends upon the law of the place
where the contract was made, then that law is applied for determining the validity of a
contract made abroad, not because the foreign law has any force in the nation, nor because
of any constraint exercised by an international principle, but because the national law
determines the question of the validity of a contract by the lex loci contractus. If it were
really a case of conflicting laws, and the foreign law prevailed in the case in question, the
decision would be handed over bodily to the foreign law. By the national doctrine, the
national law provides for a decision according to certain provisions of the foreign law; in
the case considered, according to the foreign contract law. The provisions of this law
having been proved as a fact, the question is solved by the national law, the foreign factor
in this solution—i.e., the foreign contract law—being present as mere fact, one of the facts
upon which the decision is to be based.
To explain the territorial theory in other terms, all that has happened outside the ter-
ritory, including the foreign laws which have in some way or other become involved in
the problem, is regarded merely as fact to be considered by the national law in arriving
at its decision, and to be given such weight in determining the decision as the national
law may choose to give it.
C. The Local Law Theory

The vested rights theory was, in turn, vigorously attacked by Walter Wheeler Cook, Ernest
Lorenzen, and others who found that the theory did not go far enough in acknowledging
the unfettered authority of local law. That is, since the conflict of laws was a branch of the
local or domestic law, that law alone determined what, if any, relevance and operation would
attach to foreign law. Under this theory, no right was vested in individuals by the operation
of any foreign law alone. Instead, the right became operational only after it was recognized
and given effect by the local law, and the local law alone determined when that would hap-
pen. For these critics, the vested rights theory completely failed to explain why some foreign
rights became vested while others did not. The vested rights theory was also inconsistent
with cases in which courts refused to apply foreign law and instead applied the law of the
forum—for example, on public policy grounds. Yet while the local law theory effectively
confirmed the domestic nature of choice of law rules, its major shortcoming as a choice of
law theory was that it did not provide an answer to the question of why a domestic court
would resolve a case using foreign law.
Walter Wheeler Cook, The Logical and Legal Bases of the Conflict of Laws
(Cambridge, Mass: Harvard University Press, 1942) at 3-4, 5-8, 13-16,
20-21, 29-32 (footnotes omitted)
Time was when the students of the physical sciences sought to judge the truth or correct-
ness of any particular statement about a particular physical thing—plant, heavenly body,
or case of chemical change—by assuming that they had already in hand “a general truth
with which to compare the particular empirical occurrence.” The assumption was, as John
Dewey, from whom I am quoting, puts it, that the human “mind was already in possession
of fixed truths, universal principles, preordained axioms” and that “only by their means
could contingent, varying particular events be truly known.” So long as this assumption
maintained its hold upon men’s minds no real advance in physical science was possible.
Modern science really began only when “men trusted themselves to embarking upon the
uncertain sea of events and were willing to be instructed by changes in the concrete. Then
antecedent principles were tentatively employed as methods for conducting observations
and experiments, and for organizing special facts: as hypotheses.” In the field of the phys-
ical sciences, therefore, the purely deductive method of ascertaining the “truth” about
nature has given way to what is called—perhaps with not entire accuracy—the inductive
method of modern science, in which the so-called “laws of nature” are reached by col-
lecting data, i.e., by observing concrete phenomena, and then forming, by a process of
“trial and error,” generalizations which are useful tools by means of which we describe in
verbal shorthand as wide a range as possible of the observed physical phenomena, choos-
ing that form of description which on the whole works most simply in the way of enabling
us to describe past observations and to predict future observations.
Upon the basis of this second, or experimental, method the imposing structure of
modern physical science has been erected; and the attempt to arrive at the truth about
particular events by pure deduction from general principles assumed to be true has been
definitely and finally abandoned.
• • •
If we open Dicey’s great work, we find that he tells us that the subject has been treated
by two methods, which he describes respectively as the “theoretical method” and the
“positive method”—which turn out upon examination to correspond roughly to the two
methods described above. The “theoretical method,” which has been followed chiefly by
continental writers, maintains (I quote from Dicey) that “the fundamental principles of
private international law can be ascertained by study and reflection, and that the sound-
ness of the rules of law maintained, say in England, as to the extraterritorial recognition
of rights, can be tested by their conformity to, or deviation from, such general principles.”
It follows that “the object of a writer on the conflict of laws is to discover the principles”
of the subject, and “starting with some one principle … to show how in accordance with
the fundamental principle assumed by the writer as the basis of his system” the specific
rules for the decision of concrete cases are or should be reached by all countries.
As contrasted with this, the “positive method starts” (again I quote from Dicey) “from
the fact that the rules for determining the conflict of laws are themselves ‘laws’ in the strict
sense of that term, and that they derive their authority from the support of the sovereign
in whose territory they are enforced.” As Dicey points out, this is the method followed by
Story, and it is the one Dicey himself chose as the basis of his work. Its merit is that (to
quote once again from Dicey) “it constantly impresses upon the minds both of writers
and of readers the truth of the all-important doctrine that no maxim is a law unless it be
part of the municipal law of some given country.”
It must however be noted that the writers of neither school have succeeded in adhering
consistently to their main point of view. Thus, both Story and Dicey do at times, without
being fully conscious of it, revert to the theoretical method which professedly they had
abandoned; and on the other hand, no writer of the theoretical school has actually failed
to spend a great deal of his time in examining the actual decisions of the country in which
he lived and wrote.
So far as the theoretical method has influenced Anglo-American writers, it has done
so chiefly in the form of “territorial” theories about law and legal rights. Such writers
begin with reflecting upon and establishing to their own satisfaction the general or essen-
tial nature of law and legal rights. This leads them to certain general or fundamental
principles, supposed to flow from the nature of law and legal rights as thus established.
These fundamental principles take the form of general statements as to what—in view of
the essential nature of law and legal rights—a state or country “can” and “cannot” do in
the way of creating rights, duties, and other legal relations. They thus come to the conclu-
sion that the conflict of laws “deals with the recognition and enforcement of foreign-
created rights,” or that it has to do with the application of laws in space—back of which
statements seems to be the assumption (also deduced from the nature of law and legal
rights) that for every situation dealt with in the conflict of laws there is always some one
and only one “law” which has “jurisdiction,” i.e., power, to determine what legal conse-
quences shall be attached to the given situation. They then proceed to determine on this
basis what “law” has “jurisdiction” in each group of cases—torts, contract, property,
etc.—and take the position that no other “law” than this appropriate or “proper” law has
“jurisdiction.” They also draw the conclusion that when a given right or other legal relation
has been validly created by the appropriate law, its validity “cannot” be called into question
anywhere.
In the present discussion it is proposed to adopt the procedure which has proved so
fruitful in other fields of science, viz., to place the emphasis upon the observation of
concrete phenomena. We shall therefore undertake to formulate general statements as to
what the “law” of a given country “can” or “cannot” do in the way of attaching legal
consequences to situations and transactions by observing what has actually been done.
In making our observations we shall, however, find it necessary to focus our attention
primarily upon what courts have done, rather than upon the description they have given
of the reasons for their action. Whatever generalizations we reach will therefore purport
to be first of all an attempt to describe in as simple a way as possible the concrete judicial
phenomena observed, and their “validity” will be measured by their effectiveness in
accomplishing that purpose. In other words, they will be regarded as “true” only in so far
as they enable us to handle effectively the concrete materials with which we must deal.
• • •
On the basis of actual observation of what courts have done and are doing, then, I
think we may safely make the following generalization: Where A in state X sets a force in
motion which injures B in state Y, and B goes to and as a result of the injury dies in state
Z, either X, Y, or Z, if it can get its hands on A, can apply its own criminal law to the case.
What each will do will depend solely upon its own positive law, common or statutory,
and not upon any inherent principles of “jurisdiction” limiting its powers. Its choice
therefore will have to be purely pragmatic—as to what, all things considered, it is desirable
to do.
If we assume that none of the facts which go to make up the alleged crime—human
action and results—took place in the state or country seeking to punish the actor, does
that state or country necessarily, i.e., because of territorial limitations to which all “law”
is subject, lack “jurisdiction”? Note that the question is not whether, according to the
existing positive law in the state or country concerned, its courts are authorized to punish,
but the broader one of the “jurisdiction” of the so-called “sovereign,” the law-giver, to
authorize its judicial and other officers to deal with the situation. It is perhaps a common
notion in the Anglo-American countries that such inherent limitations do exist, and it
may well be that some of the rules of our existing positive law have taken their present
shape under the influence of such ideas. Nevertheless, there seems to be no logical founda-
tion for such a limitation. Suppose England were to enact a law providing that all persons
who anywhere in the world commit what would if done in England amount to unlawful
homicide shall, if found in England, after due trial and conviction be separated from the
rest of the community by being sent to jail, what—aside from some positive rule of inter-
national law, recognized as binding by the civilized nations—would interfere to prevent
the carrying out of the law? Whether laws of this kind would be desirable or practicable
is not the question—although much can be said and is being said by a number of contin-
ental writers in favor of such a system. Aside from questions of practicability in execution,
it seems to be in keeping with the idea that the object of the criminal law is not to satisfy
the thirst for revenge but rather to protect society from persons whose overt conduct
reveals dangerous and anti-social tendencies. If, with Holmes, we say that “the prophecies
of what courts will do in fact, and nothing more pretentious” are what we “mean by law,”
and, given a statute like that suggested above, we can prophesy that if A kills B in China
or anywhere else on the planet certain English officials—judges or others—will, if they
can get hold of him, deal with him just as though he had done the killing in England,
must we not say that English “law” applies to determine for England and English officials
the legal consequences of acts and results, all of which happen abroad? Whether existing
international law forbids such action by England is, I repeat, another question. I venture
to suggest that a study of continental law and legal writing will reveal that there exists no
consensus among the civilized nations of the world which forbids laws of the kind under
discussion, and that very possibly, when the matter does come up internationally, the rule
will be settled in favor of recognizing the jurisdiction of countries to do this very thing if
they so wish. It would seem that only a clinging to the crude and primitive idea that the
sole object of the criminal law is “punishment” for an “offense” against the “sovereign”
could lead to the opposite conclusion. It seems also that as a matter of fact some contin-
ental systems already go a long way toward embodying in their criminal jurisprudence
this “cosmopolitan” theory of criminal justice. Whether similar laws passed by American
states would violate the constitutional requirement of “due process” clause is of course a
still different question, upon which also no opinion is offered at this place, other than to
say that apparently only a blind following of unsound territorial notions would lead to
the conclusion of unconstitutionality as distinguished from social desirability.
• • •
The view outlined may be stated as follows: the forum, when confronted by a case
involving foreign elements, always applies its own law to the case, but in doing so adopts
and enforces as its own law a rule of decision identical, or at least highly similar though
not identical, in scope with a rule of decision found in the system of law in force in another
state or country with which some or all of the foreign elements are connected, the rule
so selected being in many groups of cases, and subject to the exceptions to be noted later,
the rule of decision which the given foreign state or country would apply, not to this very
group of facts now before the court of the forum, but to a similar but purely domestic group
of facts involving for the foreign court no foreign element. The rule thus “incorporated” into
the law of the forum may for convenience be called the “domestic rule” of the foreign
state, as distinguished from its rule applicable to cases involving foreign elements. The
forum thus enforces not a foreign right but a right created by its own law.
• • •
In the conclusion that a court never enforces foreign rights, but only rights created by
its own law, I see nothing extraordinary. Indeed, if we examine into the meaning of the
terms “law” and “right” as they are commonly used by judges and lawyers, I think we
shall conclude that this way of stating the matter is the only satisfactory way. For we as
lawyers, like the physical scientists, are engaged in the study of objective physical phe-
nomena. Instead of the behavior of electrons, atoms, or planets, however, we are dealing
with the behavior of human beings. As practicing lawyers we are interested in knowing
how certain officials of society—judges, legislators, and others—have behaved in the past,
in order that we may make a prediction of their probable behavior in the future. Our
statements of the “law” of a given country are therefore “true” if they accurately and as
simply as possible describe the past behavior and predict the future behavior of these
societal agents. A statement, for example, that a certain “rule of law” is the “law of Eng-
land” is therefore merely a more or less convenient shorthand way of saying that, on the
basis of certain observations of past phenomena, we predict certain future behavior of
the appropriate English officials. So, a statement that by the law of New York A has under
given circumstances “a right” and that B is under a correlative “duty” is a conventional
way of asserting that, on the basis of certain past behavior of certain New York officials,
we now predict that New York officials will behave in a certain way if specified events
happen and the officials are set in motion in the appropriate way by the injured party.
“Right,” “duty,” and other names for “legal relations” are therefore not names of objects
or entities which have an existence apart from the behavior of the officials in question,
but terms by means of which we describe to each other what prophecies we make as to
the probable occurrence of a certain sequence of events—the behavior of the officials. We
must, therefore, constantly resist the tendency to which we are all subject to reify, “thin-
gify,” or hypostatize “rights” and other “legal relations.” If, as we are told by an eminent
philosopher, “the tendency to think of relations and operations as things is one of the most
common sources of philosophic error,” it is equally true that the tendency to reify legal
“rights” has been a fruitful source of confusion in the law. We must never forget, as Mr.
Justice Holmes told us long ago, that, “for legal purposes a right is only the hypostasis of
a prophecy—the imagination of a substance supporting the fact that the public force will
be brought to bear upon those who are said to contravene it—just as we talk of the force
of gravitation accounting for the conduct of bodies in space. One phrase adds no more
than the other to what we know without it.”
Concretely: the assertion that in such a case as Milliken v. Pratt [125 Mass 374 (1878)],
P has against A a “Maine right” to damages is merely a conventional way of prophesying
that if P sues W in Maine and follows the correct procedure, the court there will give him
a judgment; i.e. it is a prophecy that certain Maine officials will behave in a certain way.
So the assertion that a Maine court “has enforced a Maine right” is merely a shorthand
way of stating that the Maine officials have acted in the way predicted. If now we say that
a Massachusetts court will enforce a Maine right, the only meaning that can be given to
the statement seems to be that we prophesy that the Massachusetts judicial officials will
act in precisely the same way that the Maine officials would act if the case were presented
to them. However, as we are prophesying what Massachusetts officials are going to do, the
meaning we have given to “right” compels us to say that a Massachusetts right exists,
identical in scope with the Maine right, and that the Massachusetts court is going to
“enforce” this Massachusetts right. If so, do we not express what we mean in a simpler
and more accurate way by saying that there is a Massachusetts right identical, or at least
substantially similar, in scope with a Maine right, which statement on being translated
means simply that we predict action by the Massachusetts officials precisely or substantially
like that which would be taken by the Maine officials if the case were presented to them?
Are we not justified in concluding, therefore, that the statement that the forum enforces
a foreign right arises out of a failure to give the word right a definite meaning, and that
when we do fix upon a meaning, we find the statement misleading and confusing?
D. A Theory of Justice
The movement from comity to vested rights to the local law theory was an attempt to
explain the national or local character of the conflict of laws, even though the subject
seemed to involve the allocation of legislative and judicial authority between or among
states. That is, the subject seemed to resemble the allocation of law-making authority similar
to that found in the division of powers under the constitution of a federal state. This task
seems logically to require some entrenched or second-level rules that exist outside the law-
making authority of the individual state. Not only are such rules not found in the universal
practice of modern states, but there seems to be no other source of law-making authority
(an important element in the definition of real law for most positivists). Given this apparent
conundrum, it may seem obvious that something had to give. It may also not be surprising,
given the broad trend of this intellectual history, that many modern theories have aban-
doned the notion that private international law embodies a separate set of rules that allo-
cate legislative and judicial authority.
Over time, concerns about the tension between territorial sovereignty and choice of law
abated. Accepting that any decision to resolve a dispute using foreign law is a decision for
the domestic courts, and is not something being imposed or demanded from outside, there
is no true concern about sovereignty: see e.g. the analysis in Stephens v Falchi, [1938] SCR 354:
The courts of Quebec administer the law of Quebec and no other law. If they apply the rules of
the law of another country, it is because the law of Quebec commands them to do so in the
circumstances. Whether or not the conditions are such as to require the application of the rules
of law of another country is a question they must decide under their own law.
Nonetheless, we still need some explanation for why we do not just always apply the law of
the forum.
The most convincing explanation is based on notions of justice and convenience. This
explanation was perhaps put best by Geoffrey Cheshire, who wrote: “when the circum-
stances indicate that the internal law of a foreign country will provide a solution more just,
more convenient, and more in accord with the expectations of the parties than the internal
law of England, the English judge does not hesitate to apply the foreign rules”: GC Cheshire,
Private International Law, 2nd ed (Oxford: Clarendon Press, 1938) at 90. It is important to
explain what is meant by justice in this context. This refers not to the fairness of the eventual
outcome, but rather to whether a just decision is being made about which legal system to
apply. This theory can be traced back through the history of the subject: elements of con-
venience and choice of law justice can be found, for example, in the earlier extracts from
Story and Dicey.
E. Governmental Interest Analysis

In the 20th century several American scholars, notably David Cavers and Brainerd Currie,
advocated new and radically different approaches to choice of law. Some of these theor-
etical perspectives on the subject can be grouped under the heading of governmental
interest analysis. What these theories share is a methodology based on the logical extension
of the local law theory. Instead of viewing the conflict of laws as a separate body of rules for
assigning legislative or judicial competence, these theories assume that the subject has to
do with the familiar common law task of deciding the appropriate scope of any rule given its
underlying rationale or purpose. The methodology requires that courts consider the under-
lying purpose or policy that the law is intended to further. The courts then have to ask
whether, in the light of its purpose or policy, the law should be applied. The courts should
engage in a similar exercise in relation to any foreign law that may be relevant.
Governmental interest analysis has influenced the drafting of the American Law Insti-
tute’s Restatement (Second) of Conflict of Laws (1971) and has been adopted at least in part by
some American, British, and Canadian courts.
Governmental interest analysis requires the courts to engage in an articulate analysis of
the detailed rules of the domestic law. For some critics of the theory, this requires a higher
level of sophisticated analysis than most appellate courts achieve and would introduce a
period of uncertainty or instability while the courts articulated these underlying purposes.
For some critics, these theories also seem to put too much emphasis on local interests and
not enough on the need for international cooperation or harmony.
In reading the extracts below, consider the extent to which governmental interest analy-
sis is a choice of law theory, explaining why a court would apply foreign law to resolve a
dispute, or a choice of law method, explaining how it would do so. For more on govern-
mental interest analysis, see Chapter 9.
Brainerd Currie, “Notes on Methods and Objectives in the Conflict of Laws”

(1959) Duke L Rev 171 at 177-81 (footnotes omitted)
We would be better off without choice-of-law rules. We would be better off if Congress
were to give some attention to problems of private law, and were to legislate concerning
the choice between conflicting state interests in some of the specific areas in which the
need for solutions is serious. In the meantime, we would be better off if we would admit
the teachings of sociological jurisprudence into the conceptualistic precincts of conflict
of laws. This would imply a basic method along the following lines:
1. Normally, even in cases involving foreign elements, the court should be expected,
as a matter of course, to apply the rule of decision found in the law of the forum.
2. When it is suggested that the law of a foreign state should furnish the rule of deci-
sion, the court should, first of all, determine the governmental policy expressed in the
law of the forum. It should then inquire whether the relation of the forum to the case is
such as to provide a legitimate basis for the assertion of an interest in the application of
that policy. This process is essentially the familiar one of construction or interpretation.
Just as we determine by that process how a statute applies in time, and how it applies to
marginal domestic situations, so we may determine how it should be applied to cases
involving foreign elements in order to effectuate the legislative purpose.
3. If necessary, the court should similarly determine the policy expressed by the for-
eign law, and whether the foreign state has an interest in the application of its policy.
4. If the court finds that the forum state has no interest in the application of its policy,
but that the foreign state has, it should apply the foreign law.
5. If the court finds that the forum state has an interest in the application of its policy,
it should apply the law of the forum, even though the foreign state also has an interest in
the application of its contrary policy, and, a fortiori, it should apply the law of the forum
if the foreign state has no such interest.
• • •
The suggested analysis does not imply the ruthless pursuit of self-interest by the states.
In the first place, the states of the Union are significantly restrained in the pursuit of
their respective interests by the privileges-and-immunities clause of article four and by
the equal-protection clause. Incidentally, employment of this method would give a new
importance to those clauses as they affect conflict-of-laws problems. Ironically, and
precisely because of their fault of operating mechanically and impersonally, without regard
to the real problem of conflicting interests, choice-of-law rules have the virtue that they
rarely discriminate in such a way as to raise problems as to the constitutional restraints
upon discrimination.
In the second place, there is no need to exclude the possibility of rational altruism: for
example, when a state has determined upon the policy of placing upon local industry all
the social costs of the enterprise, it may well decide to adhere to this policy regardless of
where the harm occurs and who the victim is.
In the third place, there is room for restraint and enlightenment in the determination
of what state policy is and where state interests lie. An excellent example is furnished by
Nebraska’s experience with small-loan contracts. After first taking a position consistent
with a rather rigid interpretation of its policy, denying effect to a foreign contract provid-
ing for somewhat higher interest rates than were permitted by local law, Nebraska reversed
itself and conceded validity to such contracts where the law of the foreign state was
“similar in principle” to the Nebraska small-loan act. The policy of Nebraska was not to
protect its residents against any exaction of interest in excess of a particular rate, but to
protect them against exactions in excess of a reasonable range of rates, based upon the
common principle underlying such acts. This sensible approach to the delineation of
policy could find wide application, especially to laws relating to formalities. It is, in fact,
this kind of thinking which supports such legislation as section seven of the Model Exe-
cution of Wills Act. This is not so much a rule of alternative reference to the law of the
state of execution, or of domicile, as it is a recognition that the policies of all the states
are substantially the same and may be fulfilled by compliance with any—not just a par-
ticular one—of the formal requirements. Similar analysis may be expected to yield
satisfactory results in the handling of the problem of consideration in the conflict of laws
concerning contracts.
I have been told that I give insufficient recognition to governmental policies other than
those which are expressed in specific statutes and rules: the policy of promoting a general
legal order, that of fostering amicable relations with other states, that of vindicating rea-
sonable expectations, and so on. If this is so, it is not, I hope, because of a provincial lack
of appreciation of the worth of those ideals, but because of a felt necessity to emphasize
the obstacles which the present system interposes to any intelligent approach to the
problem. Let us first clear away the apparatus which creates false problems and obscures
the nature of the real ones. Only then can we effectively set about ameliorating the ills
which arise from a diversity of laws by bringing to bear all the resources of jurisprudence,
politics, and humanism—each in its appropriate way.
Brainerd Currie, “Comment on Babcock v. Jackson”

(1963) 63 Colum L Rev 1233 at 1242-43 (footnotes omitted)
If I were asked to restate the law of conflict of laws I would decline the honor. A descriptive
restatement with any sort of internal consistency is impossible. Much of the existing law,
or pseudo law, of the subject is irrational; profound changes destructive of the fundamen-
tal tenets of the traditional system are gathering momentum. On the assumption that the
project admits of a statement of what is reasonable in existing law and what may reason-
ably be desired for the future, however, I volunteer the following as a substitute for all that
part of the Restatement dealing with choice of law (for the purpose of finding the rule of
decision):
§1. When a court is asked to apply the law of a foreign state different from the law of
the forum, it should inquire into the policies expressed in the respective laws, and into
the circumstances in which it is reasonable for the respective states to assert an interest
in the application of those policies. In making these determinations the court should
employ the ordinary processes of construction and interpretation.
§2. If the court finds that one state has an interest in the application of its policy in
the circumstances of the case and the other has none, it should apply the law of the only
interested state.
§3. If the court finds an apparent conflict between the interests of the two states it
should reconsider. A more moderate and restrained interpretation of the policy or interest
of one state or the other may avoid conflict.
§4. If, upon reconsideration, the court finds that a conflict between the legitimate
interests of the two states is unavoidable, it should apply the law of the forum.
§5. If the forum is disinterested, but an unavoidable conflict exists between the laws
of the two other states, and the court cannot with justice decline to adjudicate the case,
it should apply the law of the forum—until someone comes along with a better idea.
§6. The conflict of interest between states will result in different dispositions of the
same problem, depending on where the action is brought. If with respect to a particular
problem this appears seriously to infringe a strong national interest in uniformity of
decision, the court should not attempt to improvise a solution sacrificing the legitimate
interest of its own state, but should leave to Congress, exercising its powers under the full
faith and credit clause, the determination of which interest should be required to yield.
The explanatory note might run a little longer.
David F Cavers, “A Critique of the Choice-of-Law Problem”

(1933) 47 Harv L Rev 173 at 178, 180-81, 192-93 (footnotes omitted)
When a case arises in which a foreign law is offered in evidence or in which the applic-
ability of the law of the forum is denied, a court faithful to the conventional approach will
turn in search of a conflict of laws rule to determine the jurisdiction whose law should
govern the question at issue. The conflicts rule indicates in which jurisdiction the appro-
priate law may be found. Assuming the law offered to be from that jurisdiction, the court
will then proceed with the case, employing that law as a rule of decision. Not until its
admission for that purpose does the content of that law become material. Both the terri-
torial and the “vested rights” theories sanctioned its disregard. So long as deduction from
territorial postulates could indicate only one jurisdiction as a source of law in a given
case, the content of that law would be logically irrelevant. Again, so long as the court was
in search of a “foreign-created right,” it would seek an appropriate jurisdiction, not an
appropriate substantive rule, for metaphorical consistency demands that the creation or
non-creation of rights be attributed only to states and not to their legal rules. That rules
for the determination of the appropriate jurisdiction would ignore the content of its law
may not be inevitable as a matter of logic; actually it has seemed inescapable.
• • •
[Cavers referred to the following hypothetical case to illustrate the limitations inherent
in the search for an appropriate jurisdiction.]
A salesman induces a married lady, not yet 21, in state A to order several feet of belles
lettres. Her order is received and accepted by the publishers at their office in state B, and
they express the books to her residence in state A. After reading through two inches and
paying for six, the customer repents of her bargain. The publishers sue in state A. The lady
pleads want of capacity to contract. If the problem is to find a rule to determine the law
of what state governs capacity to contract, the fact that the law of state A is reminiscent
of those days when husband and wife were one is no more material than the fact that the
law of state B mirrors the latest views of the National Woman’s Party on sex equality before
the law. It is equally immaterial that in state A infants’ protection may, in Professor
Chafee’s phrase, cause infantile paralysis, while in state B married minors are emancipated.
The court is seeking a rule which, if it already has the pedigree of precedent, may have
arisen in a case where the competing domestic laws were, with relation to the facts of the
transaction, the reverse of those now before it. Moreover, the court must contemplate the
use of its decision in the instant case as a precedent for the decision of some subsequent
“capacity” case which will present still another pattern of local laws. Now, however prag-
matic the considerations may be which move the court in its determination of the rule
for choice of law, the fact remains that as to this case, and all subsequent cases in which
that rule will be involved, the court is employing the divining rod, or, to use a more
modern metaphor to symbolize fortuitous selection, it is engaging in a blindfold test. The
court must blind itself to the content of the law to which its rule or principle of selection
points and to the result which that law may work in the case before it. The conflicts rule
having pointed out the jurisdiction in which the appropriate law may be found, judicial
scrutiny of that law, except for the purpose of its application, is henceforth proscribed.
But the fabric of this blindfold is a legal theory. The court will, of course, actually know
the provisions of the law proffered to it as the appropriate one and may well be familiar
with the content of the competing laws of other jurisdictions. Perhaps the discipline of
authority, where precedent happens to point in a single direction, will effect the insulation
of this knowledge from the process of decision. Devotion to a single theory of choice of
law may work a similar compartmentation. But where both the state of authority and the
absence of cherished principles of conflicts theory leave the court relatively free to deter-
mine the applicability of the foreign law, only a judge in whom the legal mind, as defined
by Professor Powell, has hypertrophied could exclude from consideration the conse-
quences of the application of the proffered law to the facts of the given case.
[Thurman W Arnold, “Criminal Attempts: The Rise and Fall of an Abstraction” (1930)
40 Yale LJ 53 at 58 quotes the following definition from an unpublished manuscript of
T.R. Powell: “If you think you can think about something which is attached to something
else without thinking about what it is attached to, then you have what is called a legal
mind.”]
• • •
This effort to portray an approach to problems of conflicting laws which would free
the courts from the blindfold of a theory which has compelled them to grope for solutions
to problems for which perspicacity is peculiarly essential has been argumentative and
discursive. At the risk of distorting an idea not susceptible of blackletter statement, I shall
hazard this summary:
When a court is faced with a question whether to reject, as inapplicable, the law of the
forum and to admit in evidence, as determinative of an issue in a case before it, a rule of
law of a foreign jurisdiction, it should
(1) scrutinize the event or transaction giving rise to the issue before it;
(2) compare carefully the proffered rule of law and the result which its application
might work in the case at bar with the rule of the forum (or other competing juris-
diction) and its effect therein;
(3) appraise these results in the light of those facts in the event or transaction which,
from the standpoint of justice between the litigating individuals or of those broader
considerations of social policy which conflicting laws may evoke, link that event or
transaction to one law or the other; recognizing
a) in the use of precedent, that those cases which are distinguishable only in the
patterns of domestic laws they present, may for that very reason suggest materi-
ally different considerations than the case at bar, and
b) in the evaluation of contacts, that the contact achieves significance in proportion
to the significance of the action or circumstance constituting it when related to
the controversy and the solutions thereto which the competing laws propound.
F. Choices for Choice of Law

In the more modern extract below, Lea Brilmayer considers some of the difficult issues of
perspective in adopting a choice of law method. She evaluates several aspects of the differ-
ent theoretical perspectives discussed earlier in this chapter.
As you go on to read the other chapters of this book, consider the extent to which the
cases and rules draw on, explicitly or implicitly, the theoretical perspectives outlined in this
chapter.
R Lea Brilmayer, Conflict of Laws

2nd ed (Boston: Little, Brown and Company, 1995) at 1-6 (footnotes omitted)
The fundamental and unavoidable problem of choice of law is one of perspective. What
normative perspective should a court adopt in making the choice between the law of one
state and the law of another? This is a question of the proper normative grounding, of
what is the appropriate foundation for choice of law. Is the choice between two states’ laws
an external and objective one, based on methods or rules that are in some measure
independent of the preferences of the particular alternative states whose laws might be
chosen? If so, from what source would these methods or rules derive their authority? Or
is the perspective the internal perspective of one of the alternative states, namely the one
that is now charged with deciding the case? If so, how does the judge explain already
having adopted the subjective position of one of the contending states? Doesn’t such an
internal perspective require having already made the very choice that is supposedly at
issue? If the internal perspective is the only one that matters, is there anything left to the
problem of choice of law?
Compare the position of a judge choosing between the laws of two states to that of a
judge in a domestic case choosing between the opposing legal claims of two litigants. In
choosing between the arguments of the opposing litigants, the judge is not supposed to
start out with a preference for one over the other. The judge that insists on looking at
everything from one party’s point of view would not be performing the judging function
properly. The judge’s perspective is supposed to be external to that of the two litigants. Of
course, it is controversial how neutral the law really is and how neutral it potentially can
be. But accusations that, in fact, the law is not neutral catch our attention and cause us to
worry because, as an ideal, the desirability of neutrality is generally conceded.
Commitment to an ideal of neutrality cannot be taken for granted in choice of law,
however. As an ideal, it is extremely controversial because the judge in a choice of law
case is in the public service of one of the contending states. Can it not be argued that, first
and foremost, the State A judge is obliged to follow the preferences of the people of State
A, furthering the policies that State A elected officials have adopted? If the judge is not
guided by State A policies, then where does he or she find guidance about how to make
the choice? Neutral principles are not logically self-evident; they are not a “brooding
omnipresence in the sky.” To the contrary, principles of choice are likely to be controversial
both in theory and in application. It is jurisprudentially problematic enough in ordinary
domestic adjudication for a judge to resolve a hard case for which no clear right answer
emerges. But the problem is significantly more acute in choice of law, for the judge who
wishes to step outside the policy preferences of States A and B to make a neutral choice
finds no obvious foundation to stand on.
Choice of law theory vacillates erratically between two different answers to this ques-
tion of proper perspective. One tradition is unabashedly a priori; it locates the source of
choice of law rules in some normative system external to and more important than the
authority of any particular state. Such a tradition must answer two sorts of questions.
First, what sorts of external limiting norms are there? Second, in what sense are they
authoritative? Even if some set of norms appears convincing and desirable, perhaps all
this means is that that particular state’s policy-makers are impressed with their inner logic
or policy desirability. It does not necessarily mean that if the states chose to be uncon-
vinced that their preferences are mistaken or should be overridden.
The other, internal tradition avoids the problem of authoritative source by treating the
choice of law issue as turning on the forum state’s local law. Instead of appealing to a
transcendent “natural law” of choice of law, it limits investigation to positive law whose
authoritative status is not in doubt. It asks merely whether the authoritative laws of the
forum state (statutes, common law rules and principles, state constitutional provisions,
and so forth) purport to apply to the case at hand. The choice of law issue is merely one
of the proper interpretation of the state’s own positive law.
Two major problems with such an approach become apparent on closer examination.
The first is that it trivializes the choice of law issue by starting the analysis with a com-
mitment to one state, the forum, already made. Inherent in this initial assumption is a
major begging of the question. It is assumed that the forum is entitled to decide the choice
of law issue from the perspective of its own chosen principles and interests. The problem
of choice of law is simply waved away. The second puzzle is that it provides no basis for
critical commentary or the making of normative recommendations. Scholars and law
reformers have no creative function under such an approach because they are supposed
to be mere interpreters of existing authoritative state practice, handmaidens to state legis-
latures. They analyze existing substantive laws, attempting to deduce from these what the
positive law of some particular state requires. If this is what choice of law is about, how-
ever, it is unclear what the “internalist” writings about choice of law are designed to do.
Is an academic commentator setting out merely to instruct a state on what its policies
already are? Is that what choice of law scholarship is currently about, or does it not seem
rather to be based on the idea that making normative recommendations about how judges
ought to decide cases is possible? Such a normative perspective, however, is not wholly
internal to the state’s existing law. It involves arguments about what state law ought to be.
What then is its foundation? We’re back to the search for a priori principles.
The internal and external perspectives that I am describing are intended as caricatures.
Most existing choice of law approaches combine elements of both. Even the most external
of the approaches—the vested rights theory—purported to be derived from existing case
law, a positive law source. Even the most internal of the approaches—the governmental
interest approach—stops far short of slavish adherence to whatever positive law a state
has adopted. But while rarely spotted in their pristine form, these two types of choice of
law reasoning are significantly different and important to distinguish. While existing
approaches combine elements of each, like oil and water, the internal and external per-
spectives don’t easily mix.
The uneasy blends that have resulted break down when foundational questions are
posed. In hard cases, one must sometimes go back to basics to ask: What is choice of law
all about, anyway? When faced with a novel or particularly difficult problem, a judge or
scholar must consult underlying principles, which is the point when inconsistent under-
lying assumptions and confusion about basic goals come home to roost. Foundational
thinking is not just a luxury for academics. In hard cases, it is also a necessity for judges
and lawyers.
While the internal and external elements coexist uneasily in all choice of law theories,
in different theories different elements predominate. Traditional learning leaned heavily
towards the external perspective. Although in the United States choice of law development
starts historically with Justice Joseph Story, as an intellectual matter the territorial “vested
rights” school of thought that constitutes the old established learning usually is associated
with Joseph Beale. During his career as Harvard law professor and Reporter for the
American Law Institute’s First Restatement of the Conflict of Laws, Beale developed both
the theoretical foundations and the practical applications of the traditional system that
he espoused. Beale did not flinch from theoretical analysis. He started from first principles
unabashedly external to the law of any particular state—the principles of territorial
sovereignty and vested rights. Admittedly, these principles were intended to systematize
existing common law, but the overall impression they created was that it was logic, not
precedent, that mattered the most.
… [T]his unflinching devotion to logical first principles left Beale overwhelmingly
vulnerable to the attacks of the legal realists. Natural law generally was on the wane, not
to mention the cumbersome and dogmatic natural law that Beale proposed. Beale’s was
an idea whose time had already come—and already gone. While a surprisingly large
number of states still adhere to the First Restatement of Conflicts, they do so less because
of its status as immutable truth than the simple facts that change is costly and that the
alternatives do not seem so perfect either.
While the realists poked many different holes in the particular metaphysical dogma
that Beale had set out, probably no criticism was more powerful than their simple skepti-
cism about its lack of authoritative positive law source. When one of their number,
inspired by the pathbreaking critiques of vested rights penned in the second quarter of
this century, attempted to formulate a new positive program, he unsurprisingly took as
his cornerstone the abandonment of metaphysical premises. In an impressive outburst of
creative productivity, Brainerd Currie set the agenda for choice of law theory for at least
another thirty or forty years. His system of “governmental interest analysis” forswore
appeals to logical first principles, concentrating instead on interpreting the positive law
of the forum and effectuating the forum’s governmental interests. His original starting
point was that the law of the forum would rarely be displaced. We will see below that his
break with external first principles was at most half-hearted. The enterprise of statutory
interpretation and fidelity to legislative preferences leaves little maneuvering room for
intellectual creativity. His ostensible allegiance to positive law tended to waver whenever
positive law threatened to lead in a direction other than the one that he himself found
appealing.
The problem with governmental interest analysis is not just that it is half-hearted in
its commitment to local positive law. That difficulty could be solved by paying more
careful attention to what positive law already requires. There is a second problem: Such
a commitment to forum positive law would leave too many problems unsolved for most
tastes. Not everyone is content simply to follow forum law whenever forum interests are
a stake. There is still a sense in many quarters that choice of law necessarily involves
making a genuine choice between various state’s laws. A number of modern scholars
therefore have persisted in the search for external and objective standards that can be
used to resolve what Currie called “true conflicts,” namely, those cases in which state
interests are really at loggerheads. The search for external standards to guide choice has
resulted in a number of modifications of Currie’s modern policy approach, such as “better
law,” “comparative impairment,” and “most significant relationship.” All seek to combine
the advantages of at least a partial fidelity to the local policies expressed in internal law
with the appeal of an external response to the unavoidable choice.
G. Rights and Fairness

Brilmayer is critical of governmental interest analysis in part because it is consequentialist
and utilitarian. While it might strive to achieve the best overall outcome for the state, it does
so at the expense of the individual litigant. In the extract below, she contends that more
attention must be paid to the rights of the parties. These are not rights in the earlier Bealean
sense of vested rights. Rather, they are a form of political right to be free from application of
a state’s law unless certain preconditions are met.
Do Brilmayer’s contentions amount to a distinct theory about choice of law or do they
relate to how a choice of law method might operate?
R Lea Brilmayer, Conflict of Laws

2nd ed (Boston: Little, Brown and Company, 1995) at 233-41 (footnotes omitted)
There is an alternative concept of rights that does not require prior identification of the
applicable substantive law. That alternative conception supplies the foundation for a new
rights-based model of choice of law. It is more nearly analogous to common notions of
individual fairness and thus more successfully avoids the defects of consequentialist
reasoning. It follows directly from the notion that states are limited in their pursuit of the
common good at the expense of the individual. These rights are political rights because
they concern the political relationship between the state and the individual. One’s rights
to resist the imposition of a personal burden for the common good are political rights,
though not necessarily recognized substantive legal rights. Unlike Bealean rights, they
arise out of the normative structure of the relationship between the state and the
individual.
A general political theory of rights both defines situations in which a state is entitled
to coerce individual citizens for the general good of others and identifies situations in
which the individual is not obliged to obey. Although it is not common now to speak of
litigants having rights to judicial recognition of some preexisting substantive legal claims
(as Beale and Dworkin do), it is not at all unusual to speak of individual rights against
the state in somewhat different circumstances. For example, we might speak of a right of
free speech, or a right of property, or a right to equal treatment. In the postrealist world
that we inhabit, the word “rights” lingers even though we do not necessarily describe
adjudication in terms of judicial enforcement of vested legal rights.
Political rights of this sort have something of a constitutional flavor, and indeed it is
in constitutional adjudication (especially outside of the choice of law context) that we
find talk of rights to be most prominent. Yet this does not mean that the only rights that
can be meaningfully discussed are constitutional rights. One might also believe in political
rights unrecognized by the existing Constitution. These rights are still relevant to legal
debate in that one might attempt to secure them institutional recognition.
• • •
Whatever the merits of consequentialist reasoning in moral theory or as a general

theory of adjudication, there are special reasons to find it wanting as an approach to choice
of law. The state’s authority over litigants is most tenuous in multistate cases. The claims
of one of the parties are being sacrificed to further the general good of a community of
which he or she may not even be a part. … [T]here are normative difficulties in applying
consequentialist reasoning in cases that transcend state borders. Whatever the merits of
adjudicative efforts to further social policy, one cannot simply take for granted the fairness
of using a multistate litigant as a means to that end. One must show that the individual
is properly subject to the state’s authority before he or she can be called on to contribute
to the state’s social good. The existence of choice of law rights should, for this reason, be
even less controversial than the existence of domestic rights.
Choice of law rights arise out of the fact that the state’s legitimate authority is finite
and that the state ought to recognize this. … When a judge decides that it is permissible
to apply local law to a multistate controversy, he or she is necessarily deciding a question
of political legitimacy at the same time. The choice of law decision rests on an assumption
that the criteria for legitimate political authority have been met. Satisfaction of the criteria
for legitimate authority is necessary to make the application of local law fair.
• • •
Before we move on to the obviously difficult program of spelling out what rights might
be thought to exist in the choice of law context, it is worth noting the substantial ways in
which this idea of rights differs from the vested rights envisioned by Joseph Beale. There
is a certain similarity, admittedly, in that both conceptions of rights are linked to state
sovereignty. The key differences, however, are two: The rights are mostly negative rights
instead of positive rights, and they are vertical rights that the individual possesses against
the state directly, rather than horizontal rights against the other party to the litigation.
• • •
A political rights model of choice of law requires a state to justify its exercise of coercive
authority over an individual aggrieved by the application of the state’s law. This right of
the individual litigant to a justification for state coercion need not have constitutional
status; to claim such a right is to make a normative argument that may or may not have
been recognized institutionally. … This model of rights requires close attention to the
state’s purported justification for exercising any coercive power. The first task of a political
rights model is to identify the circumstances under which the state has, or lacks, an
adequate justification for coercion. Political choice of law rights derive from the limited
nature of such political justifications. What sorts of justifications would satisfy our stan-
dard of fairness? Here we encounter difficult questions that have proved troublesome to
political philosophers. The best that we can do here is to outline the most convincing
solutions yet offered to the problem of political justification.

Dane, Perry. “Vested Rights, ‘Vestedness,’ and Choice of Law” (1987) 96 Yale LJ 1191.
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Graveson, RH. “Philosophical Aspects of the English Conflict of Laws” (1962) 78 Law Q Rev
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Juenger, Friedrich K. “Choice of Law: How It Ought Not to Be” (1997) 48 Mercer L Rev 757.
Martin, James A. Perspectives on Conflict of Laws: Choice of Law (Boston: Little, Brown, 1980).
McClean, David & Veronica Ruiz Abou-Nigm. Morris: The Conflict of Laws, 8th ed (London:
Sweet & Maxwell, 2012) ch 21.
Peari, Sagi. “Savigny’s Theory of Choice-of-Law as a Principle of ‘Voluntary Submission’ ”
(2014) 64 UTLJ 106.
Sedler, Robert A. “A Real World Perspective on Choice of Law” (1997) 48 Mercer L Rev 781.
Sterk, Stewart E. “The Marginal Relevance of Choice of Law Theory” (1994) 142 U Pa L Rev 949.
Symeonides, Symeon C. “The American Choice-of-Law Revolution in the Courts: Today and
Tomorrow” (2002) 298 Rec des Cours 9.
Symeonides, Symeon C. “The Choice-of-Law Revolution Fifty Years After Currie: An End and
a Beginning” [2015] U Ill L Rev 1847.
Tetley, William. “A Canadian Looks at American Conflict of Law Theory and Practice, Espe-
cially in Light of the American Legal and Social Systems (Corrective vs. Distributive Jus-
tice)” (1999) 38 Colum J Transnat’l L 299.
CHAPTER THREE
Conflicts and the Constitution
I. Pre-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
II. Post-Morguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
I. PRE-MORGUARD
The relationship between conflicts and the constitution can be divided into eras pre- and
post-Morguard Investments Ltd v De Savoye, [1990] 3 SCR 1077, 76 DLR (4th) 256 (reproduced
below in Section II, “Post-Morguard”).
In the common law provinces, conflicts rules remain, for the most part, a product of judi-
cial decision. In Quebec, of course, they are to be found in code form. Whether the rules were
common law or codified, they were part of the body of law in place in each colony at the
time it joined Canada. Section 129 of the Constitution Act, 1867 continued in force all laws in
the colony (the original colonies are named) at the time of joining confederation until such
time as they should be repealed, abolished, or altered by the appropriate legislature under
the new federal system of government.
In the first decades after Confederation, legislative inactivity in the field of conflicts at
both the federal and provincial levels meant that the development of conflicts rules could
proceed unfettered by the risk of constitutional challenges. Some judicial doubt was
expressed around the turn of the century about the validity of the provincial rules of court
for service ex juris in the light of the territorial limitations on provincial legislative jurisdiction
encumbering various heads of provincial power in s 92 of the Constitution Act, 1867, but no
one pursued the issue: see e.g. Deacon v Chadwick (1901), 1 OLR 346 (Div Ct); Standard Con-
struction Co v Wallberg (1910), 20 OLR 646 (Div Ct).
Despite the apparent immunity of conflicts rules from constitutional scrutiny, constitu-
tional law and conflicts have never existed in watertight compartments. In a relatively small
but important line of cases, conflicts rules were co-opted by the courts for employment as
the constitutional test for determining the validity of provincial legislation challenged on
grounds of extraterritoriality. Most often, the issue was the situs of property and conflicts
rules were used to determine whether the province in question had power to tax or to regu-
late. Neither the civil rights referred to in s 92(13) nor choses in action can be located without
the assistance of legal fictions—arbitrary rules invented to give a physical location to some-
thing that by definition has no physical presence. Usually it is possible to create more than
one logically defensible rule. The courts took the position, for which Canadian taxpayers
should be grateful, that property could have only one location in Canada for the purposes
29
30 Chapter 3 Conflicts and the Constitution
of the imposition of direct taxation by provincial legislatures: see The King v National Trust Co,
[1933] SCR 670.
In Reference re Upper Churchill Water Rights Reversion Act, below, a provincial statute, The
Upper Churchill Water Rights Reversion Act, SN 1980, c 40, was attacked on several grounds.
The case turned on the application of the doctrines of colourability and extraterritoriality.
The Act was held in substance to be legislation in relation to civil rights even though in form
it was legislation in relation to property, all of which was physically situated in the province.
The question then became one of the location of those civil rights. Churchill Falls is still the
leading case with respect to the proper approach to the issue of extraterritoriality but British
Columbia v Imperial Tobacco Canada Ltd, 2005 SCC 49, [2005] 2 SCR 473 (reproduced below in
Section II) replaced the conflicts rules used in the alternative in Churchill with a version of the
Morguard rule.
Reference re Upper Churchill Water Rights Reversion Act

[1984] 1 SCR 297, 8 DLR (4th) 1
McINTYRE J:
One of the principal attacks made against the Reversion Act was that the Act interferes
with civil rights existing outside the province of Newfoundland. While no quarrel was
made with the proposition that the Legislature of Newfoundland is fully competent to
expropriate property within its boundaries, it was argued that when the exercise of
expropriation powers derogates from civil rights outside the province the enactment is
ultra vires. On this point the appellants contended that the extrinsic evidence, which has
already been discussed, is particularly relevant to show the purpose of the Reversion Act
and to show how and where its operation would be effective. It was contended that, while
all that would be taken under the Act is physically situated within the province of New-
foundland, the effect of the Act would be to destroy lawfully acquired civil rights outside
the province.
The Attorney-General of Newfoundland contended that the Reversion Act applies only
to the Lease Act, the statutory lease, and the assets of CFLCo. All of the rights and property
to which the Act applies are situated within the province of Newfoundland. Any effect on
rights outside the territorial limits of the province is therefore irrelevant as being merely
consequential. Newfoundland argued that the “pith and substance” test employed in
division of powers cases has no application to the determination of the territoriality issue.
The appellants argued, firstly, that any provincial legislation that has extra-territorial
effect is ultra vires. Alternatively, it was argued that the true purpose and intent of the
legislation, its pith and substance, governs in the issue of territorial limitation just as it
does in other constitutional cases involving division of powers. The appellants contended
that the Reversion Act is aimed at the destruction of the rights of Hydro-Quebec under
the power contract, rights situated outside Newfoundland. Consequently, the Act is
beyond the legislative competence of the province.
The territorial limitation on provincial legislative competence is contained in the
Constitution Act, 1867. The opening words of s. 92 are: “In each Province … .” Subsection
13 of s. 92 gives the provinces exclusive legislative authority over “property and civil rights
in the Province” (emphasis added), and s-s. 16, similarly, is confined to matters of a purely
I. Pre-Morguard 31
local or private nature in the province. There is, however, some disagreement in the case
authorities as to the test which should be applied in determining the constitutional validity
of a provincial statute that has extra-territorial effects.
The appellants relied heavily on the case of Royal Bank of Canada et al. v. The King
(1913), 9 DLR 337, [1913] AC 283, 3 WWR 994, and the cases which followed it, including
Ottawa Valley Power Co. v. A-G Ont. et al., [1936] 4 DLR 594, [1937] OR 265 (CA);
Beauharnois L, H & P Co. v. Hydro-Electric Power Com’n et al., [1937] 3 DLR 458, [1937]
OR 796 (CA), and Credit-Foncier Franco-Canadien v. Ross et al., [1937] 3 DLR 365,
[1937] 2 WWR 353, 18 CBR 368 (Alta. CA). These cases have been considered to be strong
authority for the proposition that a provincial legislature may not validly legislate in dero-
gation of extra-provincial rights. In the Royal Bank case the proceeds of a bond issue
made by a railway company were held by the appellant bank. The railway company had
made default in the payment of interest and in the construction of the railway line, and
the Alberta government, which had guaranteed the bonds, enacted a statute ratifying the
guarantee and requiring payment of the money from the bank into the General Revenue
Fund of the province. It was not entirely clear from the report whether the funds were
held by the bank in an account in Montreal or in an account in Alberta, but the judgment
seems to proceed on the basis that the monies were, in fact, held in Montreal. The bank
refused to pay on the ground that the right to the money upon default of the railway
company revested in the bondholders and this right was a right outside Alberta. The
statute was held by the Judicial Committee of the Privy Council to be ultra vires upon
that ground.
In the Ottawa Valley Power case, on facts somewhat similar to those at bar, contracts
were made between the Hydro-Electric Power Commission of Ontario and Ottawa Valley
Power Company, a Quebec company distributing power in Quebec. An Ontario Act which
declared the contracts “to be and always to have been illegal, void, and unenforceable as
against The Hydro-Electric Power Commission of Ontario” was held to be ultra vires in
the Court of Appeal of Ontario as being legislation in derogation of extra-provincial
rights. In the Beauharnois case a similar result was reached on similar facts, and in the
Credit-Foncier case the Appellate Division of the Supreme Court of Alberta held that an
Act affecting interest payable on certain debts, owing by residents of Alberta to creditors
outside of Alberta, was ultra vires as derogating from extra-provincial civil rights.
It has been said that the courts in these cases did not differentiate, at least expressly,
between statutes which are directed at extra-provincial rights and statutes which only
incidentally affect those rights. See, for example, the words of Viscount Haldane LC, at
p. 345 DLR, p. 298 AC, of the Royal Bank case:
In the opinion of their Lordships, the effect of the statute of 1910, if validly enacted, would
have been to preclude the bank from fulfilling its legal obligation to return their money to
the bondholders, whose right to this return was a civil right which had arisen and remained
enforceable outside the province.
The statute was, on this ground, beyond the powers of the legislature of Alberta, inasmuch
as what was sought to be enacted was neither confined to property and civil rights within the
province nor directed solely to matters of merely local or private nature within it.
(Emphasis added.)
There is other authority which is frequently referred to on this question and it was heavily
relied on in argument by Newfoundland. The leading case is Ladore et al. v. Bennett et al.,
[1939] 3 DLR 1, [1939] AC 468, [1939] 2 WWR 566. This case concerned provincial legis-
lation which amalgamated certain municipalities in Ontario into the city of Windsor. In the
process of this amalgamation the securities for the debts of the various component muni-
cipalities were replaced by new bonds issued by the new city of Windsor with modifications
in interest rates and other terms of the indebtedness. There was no question that the rights
of many municipal creditors situated outside of Ontario were affected and, in some degree
at least, derogated from. Lord Atkin held that the pith and substance of the Acts was in
relation to municipal institutions within the province and that, in addition, as far as they
affected public utility commissions, they were justified as having been passed in relation
to local works and undertakings under s. 92(10) of the British North America Act, 1867.
He rejected the argument of colourability with these words, at p. 7 DLR, p. 482 AC:
It was suggested in argument that the impugned provisions should be declared invalid
because they sought to do indirectly what could not be done directly, viz., to facilitate repudi-
ation by provincial municipalities of obligations incurred outside the Province. It is unneces-
sary to repeat what has been said many times by the Courts in Canada and by the Board,
that the Courts will be careful to detect and invalidate any actual violation of constitutional
restrictions under pretence of keeping within the statutory field. A colourable device will
not avail. But in the present case nothing has emerged even to suggest that the Legislature
of Ontario at the respective dates had any purpose in view other than to legislate in times of
difficulty in relation to the class of subject which was its special care, viz., municipal
institutions.
He went on to reject the argument that the legislation was ultra vires as being in deroga-
tion of extra-provincial rights by saying, at p. 7 DLR pp. 482-3 AC:
… and though they affect rights outside the Province they only so affect them collaterally,
as a necessary incident to their lawful powers of good government with the Province.
The British Columbia Court of Appeal reached a similar result a year earlier in the case
of Day v. Victoria, [1938] 4 DLR 345, 53 BCR 140, [1938] 3 WWR 161, and in so doing
followed the decision of the Ontario Court of Appeal in Ladore v. Bennett, [1938] 3 DLR
212, [1938] OR 324, which was later affirmed by the Judicial Committee of the Privy
Council, supra.
It will be seen that there is an apparent conflict between the Royal Bank line of cases
and Ladore v. Bennett. In Royal Bank the view expressed by Viscount Haldane (see quota-
tion from p. 345 DLR, p. 298 AC, supra) would appear to be that any provincial enactment
not wholly confined in its effect to the province would on that account be ultra vires. The
same reasoning appears to have been applied in Ottawa Valley and Beauharnois as well
as in Credit-Foncier. These cases have been criticized as adopting too narrow a view of
the territorial limitation on provincial legislative competence. Professor Hogg in his work,
Constitutional Law of Canada, said at pp. 209-10:
The general rule of constitutional law is that a law is classified by its pith and substance, and
incidental effects on subjects outside jurisdiction are not relevant to constitutionality. No
one would quarrel with the proposition that a provincial statute whose pith and substance
I. Pre-Morguard 33
is the destruction or modification of rights outside the province must be unconstitutional.

But where the cases go wrong, as it seems to me, is in refusing to recognize that a statute
whose pith and substance is a matter inside the province may incidentally destroy or modify
rights outside the province.
The clash between Royal Bank and Ladore v. Bennett is thus clearly illustrated in the above
quotation. The factual basis for the Royal Bank case is not entirely clear from the report.
It must be assumed, however, that there was at least an implied finding that the pith and
substance of the Act in question was in relation to extra-provincial rights if it is to be
accepted today as authority. It should be noted that the other cases referred to above which
followed Royal Bank were all decided before Ladore v. Bennett, which case in my view
states the law correctly.
Where the pith and substance of the provincial enactment is in relation to matters
which fall within the field of provincial legislative competence, incidental or consequential
effects on extra-provincial rights will not render the enactment ultra vires. Where, how-
ever, the pith and substance of the provincial enactment is the derogation from or elim-
ination of extra-provincial rights then, even if it is cloaked in the proper constitutional
form, it will be ultra vires. A colourable attempt to preserve the appearance of constitu-
tionally in order to conceal an unconstitutional objective will not save the legislation. I
refer to the words of Lord Atkin quoted above that “a colourable device will not avail.”
The appellants argued that the Reversion Act is colourable legislation aimed at the
power contract. In support of this argument reference was made to the extrinsic evidence
which has already been mentioned. That part of the evidence which I have held to be
reliable and therefore admissible indicates the true purpose and intent of the Act. New-
foundland attempted to recall more power than was provided for in the power contract,
first by a request to Hydro-Quebec and then to the Quebec Premier. These attempts failed.
A demand to CFLCo by Order in Council was also refused. A whole section in the govern-
ment pamphlet, “The Energy Priority of Newfoundland and Labrador,” deals with the
price paid by Hydro-Quebec for Churchill Falls power under the power contract and the
benefits realized by Hydro-Quebec from its investment. The section concludes:
The foregoing financial estimates have been included here to illustrate the harsh inequity
created by the Power Contract since 1972. This inequity will clearly magnify to unconscion-
able proportions and amounts over the remaining 61 years of the Power Contract. It is this
very Power Contract which Hydro-Quebec is using to deny Newfoundland’s right to access
800 MW of Churchill Falls power at this time. The increasing inequity of the Power Contract
adds impetus to the Government’s determination to reach a resolution to its right of access.
Such access would only begin to reduce the inequity and to move towards a fair and equitable
utilization of the Churchill Falls resource.
Another section is entitled, “Newfoundland’s Case for Fairness and Equity,” and outlines
Newfoundland’s attempt to renegotiate the power contract in terms of both price and
Newfoundland’s access to Churchill Falls power. Even the Reversion Act itself provides
for compensation to shareholders and creditors directly, rather than to CFLCo, thus
depriving the company of any assets upon which recovery by Hydro-Quebec for breach
of the power contract could be effected. As soon as the Reversion Act came into force,
Hydro-Quebec’s right to receive power according to the terms of the power contract would
be effectively destroyed. Even if the flow of electricity to Quebec continued at the same
rate and for the same price after the coming into force of the Act, it would then be in the
form of a privilege rather than an enforceable right. All of this, in my opinion, points to
one conclusion: the Reversion Act is a colourable attempt to interfere with the power
contract and thus to derogate from the rights of Hydro-Quebec to receive an agreed
amount of power at an agreed price.
It was also argued by the appellants that the Reversion Act is ultra vires in that it affects
the rights of secured creditors outside the province. In my opinion, there is nothing in
the Act itself nor in the extrinsic evidence to indicate that the Act is aimed at the rights
of secured creditors. Any effect on these rights would be of an incidental nature and, in
accordance with the principle of Ladore v. Bennett discussed above, would not of itself be
grounds for declaring the Act ultra vires.
A finding that the Reversion Act is aimed at the rights of Hydro-Quebec under the power
contract would render the Act ultra vires only if the rights so attacked are situate in Quebec
beyond the jurisdiction of the Legislature of Newfoundland. Little argument was advanced
on this issue and the case seemed to proceed on the general assumption that the rights
of Hydro-Quebec were situate in Quebec. The fact, of course, is that Hydro-Quebec has
the right under the power contract to receive delivery in Quebec of hydro-electric power
and thereafter to dispose of it for use in Quebec or elsewhere as it may choose. If these
facts are not sufficient for the purpose of the constitutional characterization of the Rever-
sion Act, it may be noted in any event that ordinarily the rule is that rights under contracts
are situate in the province or country where the action may be brought: see Castel, Can-
adian Conflict of Laws, vol. 2, p. 347, and Dicey & Morris, The Conflict of Laws, vol. 2,
10th ed., p. 533, and cases cited therewith. It will be recalled that the power contract
provided that the courts of Quebec would have jurisdiction to adjudicate disputes arising
under it and it is, therefore, the province of Quebec where enforcement of the contract
may be ordered and where the intangible rights arising under the contract are situate.
It was argued by the Attorney-General of Newfoundland that control over the power
generated at Churchill Falls is essential for the effective management by Newfoundland
of its water resources and to meet the energy needs of the province. However, it is not for
this court to consider the desirability of legislation from a social or economic perspective
where a constitutional issue is raised. As Laskin CJC said in Central Canada Potash Co.
Ltd. et al. v. Government of Saskatchewan (1978), 88 DLR (3d) 609 at p. 632, [1979] 1 SCR
42 at p. 76, [1978] 6 WWR 400:
Where governments in good faith, as in this case, invoke authority to realize desirable eco-
nomic policies, they must know that they have no open-ended means of achieving their goals
when there are constitutional limitations on the legislative power under which they purport
to act. They are entitled to expect that the Courts, and especially this Court, will approach the
task of appraisal of the constitutionality of social and economic programmes with sympathy
and regard for the serious consequences of holding them ultra vires. Yet, if the appraisal results
in a clash with the Constitution, it is the latter which must govern. That is the situation here.
It is also the situation in the present case, and it follows that the Reversion Act is ultra
vires.
II. Post-Morguard 35
Conflicts rules were also invoked for support when the courts were called on to delineate
the areas of jurisdiction for the federal and provincial levels of government encompassed
respectively in s 91(26), “Marriage and Divorce,” and s 92(12), the “Solemnization of Marriage
in the Province.” Support was drawn from the choice of law rules distinguishing laws relating
to the essential validity of marriages and laws relating to the formal validity of marriages: see
Re Questions Concerning Marriage, [1912] AC 880 (PC); Alspector v Alspector, [1957] OR 454 (CA);
Kerr v Kerr, [1934] SCR 72; and Alberta (Attorney General) v Underwood, [1934] SCR 635.
Interprovincial Co-operatives Ltd v R, [1976] 1 SCR 477 is the most difficult of all the cases. It
involved use of the conflicts rules for locating a tort as well as the choice of law rule for tort.
The Supreme Court of Canada divided 4:3 on the validity of a Manitoba statute, The Fisher-
men’s Assistance and Polluters’ Liability Act, SM 1970, c 32. Both Pigeon and Ritchie JJ wrote
judgments for the majority and both relied, but only implicitly, on conflicts rules. The ques-
tion for the court was whether Manitoba had legislative jurisdiction to prohibit defendants
in Manitoba actions, in which relief was sought for damage caused to fisheries in Manitoba
by discharge of contaminants into rivers outside Manitoba, from raising as a defence the
justification or lawful excuse constituted by a licence to discharge, valid in the province
where the discharge occurred. Pigeon J, Ritchie J, and Laskin CJ (in dissent) had differing
conclusions as to the place where the tort occurred, though only Laskin CJ expressly dealt
with the conflicts rules for locating a tort. Ritchie J referred to the tort choice of law rule in
Phillips v Eyre (1870), LR 6 QB 1 in such a way that it provoked speculation that that rule might
have achieved constitutional status too.
More recently, conflicts rules have been invoked and applied in connection with ss 87 and
88 of the Indian Act, RSC 1985, c I-5, provisions that grant immunity from tax and execution
of judgments to Indian property located on reserves. In light of the judgment of Gonthier J
for the court in Williams v Canada, [1992] 1 SCR 877, 90 DLR (4th) 129, such use of conflicts
rules is, however, no longer likely to be automatic.
II. POST-MORGUARD
The risk that arose from using common law conflicts rules to determine the limits of legisla-
tive jurisdiction was that those rules would be frozen and unamendable for conflicts pur-
poses. That risk has never been realized.
What has happened instead is that recent Supreme Court of Canada decisions have cre-
ated new constitutional principles or, at least, new versions of the federal principle, which
are applicable to all conflicts rules. The whole body of conflicts rules is thus now subject to
constitutional scrutiny whether those rules are common law or in statutory form. This
development can probably be traced to Aetna Financial Services Ltd v Feigelman, [1985] 1 SCR
2, 15 DLR (4th) 161, where Estey J invoked the federal principle in relation to an application
for a Mareva injunction to prohibit a federally incorporated company from transferring its
assets from Manitoba to Quebec and Ontario at the time an action was pending against it in
Manitoba.
The great leap forward occurred in 1990 in Morguard Investments Ltd v De Savoye, below,
where the Supreme Court employed federalism principles to create a new rule for recogni-
tion and enforcement of judgments interprovincially. That rule was expressly stated to be a
common law rule, the case not having been argued in constitutional terms, but the nature
of the discussion was such that it provoked speculation about the constitutional status of the
rule. In Hunt v T&N plc, below, the court ended the speculation by expressly confirming the
constitutional status of the Morguard principles and by applying them, instead of the doc-
trine of extraterritoriality argued for in the first alternative by the appellants, to hold a Que-
bec statute constitutionally inapplicable to actions in other Canadian provinces because it
refused pre-emptively to give full faith and credit to a British Columbia court’s order for
discovery of documents. The cumulative result of Morguard and Hunt (subject now to Club
Resorts Ltd v Van Breda, below) is that the principles set out in Morguard simultaneously
constitute common law conflicts rules and constitutional standards. Conflicts rules are not
frozen but any new rules, whether common law or statutory, may be challenged for failing
to meet the constitutional standards set out in Morguard.
Except for Hunt itself, the principles created by Morguard and constitutionalized by Hunt
have not been used directly to challenge the constitutional validity of conflicts rules. In Spar
Aerospace Ltd v American Mobile Satellite Corp, 2002 SCC 78, [2002] 4 SCR 205, 220 DLR (4th)
54, the parties used Morguard to challenge the provisions of the Civil Code of Quebec, but
they failed to give the proper constitutional notice and so could not proceed with the con-
stitutional argument. (The court suggested, nevertheless, that the provisions would have
been held to be valid.) In Tolofson v Jensen, below, the common law choice of law rule in tort
was reviewed and changed in deference to constitutional principles even though the case
was not argued in constitutional terms. In British Columbia v Imperial Tobacco Canada Ltd,
below, the Morguard principle of a real and substantial connection was integrated into the
Churchill Falls (reproduced above in Section I) doctrine of extraterritoriality in place of the
traditional situs rules, although it was referred to as a “meaningful connection,” rather than
as a real and substantial connection. In the final case in the chapter, Club Resorts Ltd v Van
Breda, 2012 SCC 17, [2012] 1 SCR 572, the court emphasized the distinction between the con-
stitutional and the conflict of laws uses of the real and substantial connection test. Unfortu-
nately, despite its promise, the case did not provide an express discussion of the content of
the constitutional version.
Three provinces—British Columbia, Saskatchewan, and Nova Scotia—have adopted the
Uniform Law Conference of Canada model Court Jurisdiction and Proceedings Transfer Act
(reproduced in Chapter 6), which was drafted with the purpose of incorporating Morguard.
The Uniform Law Conference of Canada objective of avoiding constitutional challenges to
the territorial jurisdiction of each of those provinces has been achieved to date and Van
Breda provides constitutional guidance for the other provinces.
Morguard Investments Ltd v De Savoye

[1990] 3 SCR 1077, 76 DLR (4th) 256
LA FOREST J: This appeal concerns the recognition to be given by the courts in one
province to a judgment of the courts in another province in a personal action brought in
the latter province at a time when the defendant did not live there. Specifically, the appeal
deals with judgments granted in foreclosure proceedings for deficiencies on sale of
mortgaged property.
Facts
The respondents, Morguard Investments Limited and Credit Foncier Trust Company,
became mortgagees of lands in Alberta in 1978. The appellant, Douglas De Savoye, who
then resided in Alberta, was originally guarantor but later took title to the lands and
assumed the obligations of mortgagor. Shortly afterwards, he moved to British Columbia
and has not resided or carried on business in Alberta since. The mortgages fell into default
and the respondents brought actions in Alberta. The appellant was served with process
in the action by double registered mail addressed to his home in British Columbia pursu-
ant to orders for service by the Alberta court in accordance with its rules for service
outside its jurisdiction. There are rules to the same effect in British Columbia.
The appellant took no steps to appear or to defend the action. There was no clause in
the mortgages by which he agreed to submit to the jurisdiction of the Alberta court, and
he did not attorn to its jurisdiction.
The respondents obtained judgments nisi in the foreclosure actions. At the expiry of
the redemption period, they obtained “Rice Orders” against the appellant. Under these
orders, a judicial sale of the mortgaged properties to the respondents took place and
judgments were entered against the appellant for the deficiencies between the value of
the property and the amount owing on the mortgages. The respondents then each com-
menced a separate action in the British Columbia Supreme Court to enforce the Alberta
judgments for the deficiencies. Judgment was granted to the respondents by the Supreme
Court in a decision which was upheld on appeal to the British Columbia Court of Appeal.
The appellant then sought and was granted leave to appeal to this court, [1989] 1 SCR viii.
• • •
The Issue
No one denies the Alberta court’s jurisdiction to entertain the actions and enforce them
there if it can. It would be surprising if they did. They concern transactions entered into
in Alberta by individuals who were resident in Alberta at the time of the transactions and
involve land situated in that province. Though the defendant appellant was outside Alberta
at the time the actions were brought and judgment given, the Alberta rules for service
outside the jurisdiction permitted him to be served in British Columbia. These rules are
similar to those in other provinces, and specifically British Columbia. The validity of such
rules does not appear to have been subjected to much questioning, a matter to which I
shall, however, return.
The issue, then, as already mentioned, is simply whether a personal judgment validly
given in Alberta against an absent defendant may be enforced in British Columbia where
he now resides.
• • •
Analysis
The common law regarding the recognition and enforcement of foreign judgments is
firmly anchored in the principle of territoriality as interpreted and applied by the English
courts in the 19th century: see Faridkote, supra [Singh v Rajah of Faridkote, [1894] AC
670]. This principle reflects the fact, one of the basic tenets of international law, that
sovereign states have exclusive jurisdiction in their own territory. As a concomitant to

this, states are hesitant to exercise jurisdiction over matters that may take place in the
territory of other states. Jurisdiction being territorial, it follows that a state’s law has no
binding effect outside its jurisdiction. Great Britain, and specifically its courts, applied
that doctrine more rigorously than other states: see R v. Libman (1985), 21 DLR (4th) 174,
21 CCC (3d) 206, [1985] 2 SCR 178, which deals with the question in its criminal aspect.
The English approach, we saw, was unthinkingly adopted by the courts of this country,
even in relation to judgments given in sister provinces.
Modern states, however, cannot live in splendid isolation and do give effect to judg-
ments given in other countries in certain circumstances. Thus, a judgment in rem, such
as a decree of divorce granted by the courts of one state to persons domiciled there, will
be recognized by the courts of other states. In certain circumstances, as well, our courts
will enforce personal judgments given in other states. Thus, we saw, our courts will enforce
an action for breach of contract given by the courts of another country if the defendant
was present there at the time of the action or has agreed to the foreign court’s exercise of
jurisdiction. This, it was thought, was in conformity with the requirements of comity, the
informing principle of private international law, which has been stated to be the deference
and respect due by other states to the actions of a state legitimately taken within its ter-
ritory. Since the state where the judgment was given had power over the litigants, the
judgments of its courts should be respected.
But a state was under no obligation to enforce judgments it deemed to fall outside the
jurisdiction of the foreign court. In particular, the English courts refused to enforce judg-
ments on contracts, wherever made, unless the defendant was within the jurisdiction of
the foreign court at the time of the action or had submitted to its jurisdiction. And this
was so, we saw, even of actions that could most appropriately be tried in the foreign juris-
diction, such as a case like the present where the personal obligation undertaken in the
foreign country was in respect of property located there. Even in the 19th century, this
approach gave difficulty, a difficulty in my view resulting from a misapprehension of the
real nature of the idea of comity, an idea based not simply on respect for the dictates of a
foreign sovereign, but on the convenience, nay necessity, in a world where legal authority
is divided among sovereign states of adopting a doctrine of this kind.
For my part, I much prefer the more complete formulation of the idea of comity
adopted by the Supreme Court of the United States in Hilton v. Guyot, 159 US 113 (1895),
at pp. 163-4, in a passage cited by Estey J in R v. Spencer (1985), 21 DLR (4th) 756 at p. 759,
21 CCC (3d) 385, [1985] 2 SCR 278, as follows:
“Comity” in the legal sense, is neither a matter of absolute obligation, on the one hand, nor
of mere courtesy and good will, upon the other. But it is 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 …
As Dickson J in Zingre v. The Queen (1981), 127 DLR (3d) 223 at p. 230, 61 CCC (2d) 465,
[1981] 2 SCR 392, citing Marshall CJ in Schooner Exchange v. McFaddon, 11 US 116, 7
Cranch 116 (1812), stated, “common interest impels Sovereigns to mutual intercourse”
between sovereign states. In a word, the rules of private international law are grounded
in the need in modern times to facilitate the flow of wealth, skills and people across state
lines in a fair and orderly manner. Von Mehren and Trautman have observed in “Recogni-
tion of Foreign Adjudications: A Survey and A Suggested Approach” (1968), 81 Harv. L
Rev. 1601 at p. 1603:
The ultimate justification for according some degree of recognition is that if in our highly
complex and interrelated world each community exhausted every possibility of insisting on
its parochial interests, injustice would result and the normal patterns of life would be
disrupted.
Yntema (though speaking more specifically there about choice of law) caught the spirit
in which private international law, or conflict of laws, should be approached when he
stated:
In a highly integrated world economy, politically organized in a diversity of more or less
autonomous legal systems, the function of conflict rules is to select, interpret and apply in
each case the particular local law that will best promote suitable conditions of interstate and
international commerce, or, in other words, to mediate in the questions arising from such
commerce in the application of the local laws.
See Hessel E. Yntema, “The Objectives of Private International Law” (1957), 35 Can. Bar
Rev. 721 at p. 741. As is evident throughout his article, what must underlie a modern
system of private international law are principles of order and fairness, principles that
ensure security of transactions with justice.
This formulation suggests that the content of comity must be adjusted in the light of
a changing world order. The approach adopted by the English courts in the 19th century
may well have seemed suitable to Great Britain’s situation at the time. One can understand
the difficulty in which a defendant in England would find himself in defending an action
initiated in a far corner of the world in the then state of travel and communications. The
Symon case, supra [Emanuel v. Symon, [1908] 1 KB 302], where the action arose in West-
ern Australia against a defendant in England, affords a good illustration. The approach,
of course, demands that one forget the difficulties of the plaintiff in bringing an action
against a defendant who has moved to a distant land. However, this may not have been
perceived as too serious a difficulty by English courts at a time when it was predominantly
Englishmen who carried on enterprises in far-away lands. As well, there was an exagger-
ated concern about the quality of justice that might be meted out to British residents
abroad; see Lord Reid in “Atlantic Star,” [1973] 2 All ER 175 (HL) at p. 181.
The world has changed since the above rules were developed in 19th century England.
Modern means of travel and communications have made many of these 19th century
concerns appear parochial. The business community operates in a world economy and
we correctly speak of a world community even in the face of decentralized political and
legal power. Accommodating the flow of wealth, skills and people across state lines has
now become imperative. Under these circumstances, our approach to the recognition and
enforcement of foreign judgments would appear ripe for reappraisal. Certainly, other
countries, notably the United States and members of the European Economic Community,
have adopted more generous rules for the recognition and enforcement of foreign judg-
ments to the general advantage of litigants.
However that may be, there is really no comparison between the interprovincial
relationships of today and those obtaining between foreign countries in the 19th century.
Indeed, in my view, there never was and the courts made a serious error in transposing
the rules developed for the enforcement of foreign judgments to the enforcement of
judgments from sister provinces. The considerations underlying the rules of comity apply
with much greater force between the units of a federal state, and I do not think it much
matters whether one calls these rules of comity or simply relies directly on the reasons of
justice, necessity and convenience to which I have already adverted. Whatever nomen-
clature is used, our courts have not hesitated to co-operate with courts of other provinces
where necessary to meet the ends of justice: see Re Wismer and Javelin International Ltd.
(1982), 136 DLR (3d) 647 at pp. 654-5, 38 OR (2d) 26 (HCJ); Mulroney v. Coates (1986),
27 DLR (4th) 118 at pp. 128-9, 54 OR (2d) 353, 8 CPC (2d) 109 (HCJ); Touche Ross Ltd.
v. Sorrel Resources Ltd. (1987), 63 CBR (NS) 187 at p. 192, 11 BCLR (2d) 184 (SC); Roglass
Consultants Inc. v. Kennedy, Lock (1984), 65 BCLR 393 (CA) at p. 394.
In any event, the English rules seem to me to fly in the face of the obvious intention
of the Constitution to create a single country. This presupposes a basic goal of stability
and unity where many aspects of life are not confined to one jurisdiction. A common
citizenship ensured the mobility of Canadians across provincial lines, a position reinforced
today by s. 6 of the Canadian Charter of Rights and Freedoms: see Black v. Law Society of
Alberta (1989), 58 DLR (4th) 317, [1989] 1 SCR 591, 38 CRR 193. In particular, significant
steps were taken to foster economic integration. One of the central features of the con-
stitutional arrangements incorporated in the Constitution Act, 1867 was the creation of a
common market. Barriers to interprovincial trade were removed by s. 121. Generally
trade and commerce between the provinces was seen to be a matter of concern to the
country as a whole; see Constitution Act, 1867, s. 91(2). The “Peace, Order and Good
Government” clause gives the federal Parliament powers to deal with interprovincial
activities: see Interprovincial Co-operatives Ltd. v. The Queen (1975), 53 DLR (3d) 321,
[1976] 1 SCR 477, [1975] 5 WWR 382, as well as my reasons in R v. Crown Zellerbach
Canada Ltd. (1988), 49 DLR (4th) 161, 40 CCC (3d) 289, [1988] 1 SCR 401 (dissenting
but not on this point); see also Multiple Access Ltd. v. McCutcheon (1982), 138 DLR (3d)
1, [1982] 2 SCR 161, 18 BLR 138; and the combined effect of s. 91(29) and s. 92(10) does
the same for interprovincial works and undertakings.
These arrangements themselves speak to the strong need for the enforcement through-
out the country of judgments given in one province. But that is not all. The Canadian
judicial structure is so arranged that any concerns about differential quality of justice
among the provinces can have no real foundation. All superior court judges—who also
have superintending control over other provincial courts and tribunals—are appointed
and paid by the federal authorities. And all are subject to final review by the Supreme
Court of Canada, which can determine when the courts of one province have appropri-
ately exercised jurisdiction in an action and the circumstances under which the courts of
another province should recognize such judgments. Any danger resulting from unfair
procedure is further avoided by subconstitutional factors, such as, for example, the fact
that Canadian lawyers adhere to the same code of ethics throughout Canada. In fact, since
Black v. Law Society of Alberta, supra, we have seen a proliferation of interprovincial law
firms.
These various constitutional and subconstitutional arrangements and practices make
unnecessary a “full faith and credit” clause such as exists in other federations, such as the
United States and Australia. The existence of these clauses, however, does indicate that a
regime of mutual recognition of judgments across the country is inherent in a federation.

Indeed, the European Economic Community has determined that such a feature flows
naturally from a common market, even without political integration. To that end its
members have entered into the 1968 Convention on Jurisdiction and Enforcement of
Judgments in Civil and Commercial Matters.
The integrating character of our constitutional arrangements as they apply to inter-
provincial mobility is such that some writers have suggested that a “full faith and credit”
clause must be read into the Constitution and that the federal Parliament is, under the
“Peace, Order and Good Government” clause, empowered to legislate respecting the
recognition and enforcement of judgments throughout Canada: see, for example, Black,
op. cit. [Vaughan Black, “Enforcement of Judgments and Judicial Discretion in Canada”
(1989), 9 Oxford J Legal Stud. 547], and Hogg, op. cit. [Peter W Hogg, Constitutional Law
of Canada, 2nd ed (Toronto: Carswell, 1985)]. The present case was not, however argued
on that basis, and I need not go that far. For present purposes, it is sufficient to say that,
in my view, the application of the underlying principles of comity and private international
law must be adapted to the situations where they are applied, and that in a federation this
implies a fuller and more generous acceptance of the judgments of the courts of other
constituent units of the federation. In short, the rules of comity or private international
law as they apply between the provinces must be shaped to conform to the federal struc-
ture of the Constitution.
This court has, in other areas of the law having extraterritorial implications, recognized
the need for adapting the law to the exigencies of a federation. Thus, in Aetna Financial
Services Ltd. v. Feigelman, supra [(1985), 15 DLR (4th) 161], the court set aside a court
order, a Mareva injunction, issued against a federally incorporated company with its head
office in Montreal and offices in Toronto, enjoining it from transferring certain assets in
Manitoba to one of its offices outside the province. There this court clearly expressed the
different considerations that distinguished that case from the English situations where it
was sought to prevent the transfer of assets to other countries. Estey J had this to say, at
pp. 184-5:
All the foregoing considerations, while important to an understanding of the operation of this
type of injunction, leave untouched the underlying and basic question: do the principles, as
developed in the United Kingdom courts, survive intact a transplantation from that unitary
state to the federal state of Canada? The question in its simplest form arises in the principles
enunciated in the earliest Mareva cases where the wrong to be prevented was the removal
from “the jurisdiction” of assets of the respondent with a view to defeating the claim of a
creditor. It has been found by the courts below that there was no such wrongdoing here. An
initial question, therefore, must be answered, namely, what is meant by “jurisdiction” in a
federal context? It at least means the jurisdiction of the Manitoba court. But is the bare
removal of assets from the Province of Manitoba sufficient? The appellant is a federally
incorporated company with authority to carry on business throughout Canada. In the course
of so doing, it moves assets in and out of the Provinces of Manitoba, Quebec and Ontario.
No breach of law is asserted by the respondent. No improper purpose has been exposed. It
is simply a clash of rights: the respondents’ right to protect their position under any judgment
which might hereafter be obtained, and the appellant’s right to exercise its undoubted cor-
porate capacity, federally confirmed (and the constitutionality of which is not challenged),
to carry on business throughout Canada. The appellant does not seek to remove the assets
in question from the national jurisdiction in which its corporate existence is maintained.
The writ of the Manitoba court runs through judgment, founded on service of initiating
process on the appellant within Manitoba, into Ontario under reciprocal provincial legisla-
tion, and into Quebec by reason of the laws of that province. None of these vital considerations
was present in the United Kingdom where Mareva was conceived to fend off the depredations
of shady mariners operating out of far-away havens, usually on the fringe of legally organized
commerce. In the Canadian federal system, the appellant is not a foreigner, nor even a non-
resident in the ordinary sense of the word. It is capable of “residing” throughout Canada and
did so in Manitoba. It is subject to execution under any Manitoba judgment in every part of
Canada. There was no clandestine transfer of assets designed to defraud the legal process of
the courts of Manitoba. There is no evidence that this federal entity has arranged its affairs
so as to defraud Manitoba creditors. The terminology and trappings of Mareva must be exam-
ined in the federal setting. In some ways, “jurisdiction” extends to the national boundaries,
or, in any case, beyond the provincial boundary of Manitoba. For other purposes, jurisdiction
no doubt can be confined to the reach of the writ of the Manitoba courts.
(Emphasis added.)
A similar approach should, in my view, be adopted in relation to the recognition and
enforcement of judgments within Canada. As I see it, the courts in one province should
give full faith and credit, to use the language of the United States Constitution, to the
judgments given by a court in another province or a territory, so long as that court has
properly, or appropriately, exercised jurisdiction in the action. I referred earlier to the
principles of order and fairness that should obtain in this area of the law. Both order and
justice militate in favour of the security of transactions. It seems anarchic and unfair that
a person should be able to avoid legal obligations arising in one province simply by mov-
ing to another province. Why should a plaintiff be compelled to begin an action in the
province where the defendant now resides, whatever the inconvenience and costs this
may bring, and whatever degree of connection the relevant transaction may have with
another province? And why should the availability of local enforcement be the decisive
element in the plaintiff ’s choice of forum?
These concerns, however, must be weighed against fairness to the defendant. I noted
earlier that the taking of jurisdiction by a court in one province and its recognition in
another must be viewed as correlatives, and I added that recognition in other provinces
should be dependent on the fact that the court giving judgment “properly” or “appropri-
ately” exercised jurisdiction. It may meet the demands of order and fairness to recognize
a judgment given in a jurisdiction that had the greatest or at least significant contacts with
the subject-matter of the action. But it hardly accords with principles of order and fairness
to permit a person to sue another in any jurisdiction, without regard to the contacts that
jurisdiction may have to the defendant or the subject-matter of the suit: see Joost Blom,
“Conflict of Laws—Enforcement of Extraprovincial Default Judgment—Reciprocity of
Jurisdiction: Morguard Investments Ltd. v. De Savoye” (1989), 68 Can. Bar Rev. 359 at
p. 360. Thus, fairness to the defendant requires that the judgment be issued by a court
acting through fair process and with properly restrained jurisdiction.
As discussed, fair process is not an issue within the Canadian federation. The question
that remains, then, is when has a court exercised its jurisdiction appropriately for the
purposes of recognition by a court in another province? This poses no difficulty where

the court has acted on the basis of some ground traditionally accepted by courts as permit-
ting the recognition and enforcement of foreign judgments—in the case of judgments in
personam where the defendant was within the jurisdiction at the time of the action or
when he submitted to its judgment whether by agreement or attornment. In the first case,
the court had jurisdiction over the person, and in the second case by virtue of the agree-
ment. No injustice results.
The difficulty, of course, arises where, as here, the defendant was outside the jurisdic-
tion of that court and he was served ex juris. To what extent may a court of a province
properly exercise jurisdiction over a defendant in another province? The rules for service
ex juris in all the provinces are broad; in some provinces, Nova Scotia and Prince Edward
Island, very broad indeed. It is clear, however, that if the courts of one province are to be
expected to give effect to judgments given in another province, there must be some limits
to the exercise of jurisdiction against persons outside the province.
It will be obvious from the manner in which I approach the problem that I do not see
the “reciprocity approach” as providing an answer to the difficulty regarding in personam
judgments given in other provinces, whatever utility it may have on the international
plane. Even there, I am more comfortable with the approach taken by the House of Lords
in Indyka v. Indyka, supra [[1969] 1 AC 33 (HL)], where the question posed in a matri-
monial case was whether there was a real and substantial connection between the peti-
tioner and the country or territory exercising jurisdiction. I should observe, however, that
in a case involving matrimonial status, the subject-matter of the action and the petitioner
are obviously at the same place. That is not necessarily so of a personal action where a
nexus may have to be sought between the subject-matter of the action and the territory
where the action is brought.
• • •
Turning to the present case, it is difficult to imagine a more reasonable place for the
action for the deficiencies to take place than Alberta. As noted earlier, the properties were
situated in Alberta, and the contracts were entered into there by parties then both resident
in the province. Moreover, deficiency actions follow upon foreclosure proceedings, which
should obviously take place in Alberta, and the action for the deficiencies cries out for
consolidation with the foreclosure proceedings in some manner similar to a Rice Order.
A more “real and substantial” connection between the damages suffered and the juris-
diction can scarcely be imagined. In my view, the Alberta court had jurisdiction, and its
judgment should be recognized and be enforceable in British Columbia.
I am aware, of course, that the possibility of being sued outside the province of his
residence may pose a problem for a defendant. But that can occur in relation to actions
in rem now. In any event, this consideration must be weighed against the fact that the
plaintiff under the English rules may often find himself subjected to the inconvenience
of having to pursue his debtor to another province, however just, efficient or convenient
it may be to pursue an action where the contract took place or the damage occurred. It
seems to me that the approach of permitting suit where there is a real and substantial
connection with the action provides a reasonable balance between the rights of the parties.
It affords some protection against being pursued in jurisdictions having little or no con-
nection with the transaction or the parties. In a world where even the most familiar things
we buy and sell originate or are manufactured elsewhere, and where people are constantly
moving from province to province, it is simply anachronistic to uphold a “power theory”

or a single situs for torts or contracts for the proper exercise of jurisdiction.
The private international law rule requiring substantial connection with the jurisdic-
tion where the action took place is supported by the constitutional restriction of legislative
power “in the province.” As Guerin J observed in Dupont v. Taronga Holdings Ltd. (1986),
49 DLR (4th) 335 at p. 339, [1987] RJQ 124 (Que. Sup. Ct.) (translation): “In the case of
service outside of the issuing province, service ex juris must measure up to constitutional
rules.” The restriction to the province would certainly require at least minimal contact
with the province, and there is authority for the view that the contact required by the
Constitution for the purposes of territoriality is the same as required by the rule of private
international law between sister provinces. That was the view taken by Guerin J in Taronga
where, at p. 340, he cites Professor Hogg, op. cit., at p. 278, as follows:
In Moran v. Pyle, Dickson J emphasized that the “sole issue” was whether Saskatchewan’s
rules regarding jurisdiction based on service ex juris had been complied with. He did not
consider whether there were constitutional limits on the jurisdiction which could be con-
ferred by the Saskatchewan Legislature on the Saskatchewan courts. But the rule which he
announced could serve satisfactorily as a statement of the constitutional limits of provincial-
court jurisdiction over defendants outside the province, requiring as it does a substantial
connection between the defendant and the forum province of a kind which makes it reason-
able to infer that the defendant has voluntarily submitted himself to the risk of litigation in
the courts of the forum province.
I must confess to finding this approach attractive, but as I noted earlier, the case was not
argued in constitutional terms and it is unnecessary to pronounce definitively on the issue.
In another passage cited by Guerin J (at p. 341), Professor Hogg (at pp. 278-9) observes
that this is similar to the position taken in the United States through the instrumentality
of the due process clause of the Constitution of the United States; see International Shoe
Co. v. State of Washington, 326 US 310 (1945). Whether the Canadian counterpart of the
due process clause, s. 7 of the Charter, though not made expressly applicable to property,
might at least in certain circumstances, play a role is also unnecessary to determine.
There are as well other discretionary techniques that have been used by courts for
refusing to grant jurisdiction to plaintiffs whose contact with the jurisdiction is tenuous
or where entertaining the proceedings would create injustice, notably the doctrine of
forum non conveniens and the power of a court to prevent an abuse of its process: for a
recent discussion, see Elizabeth Edinger, “Discretion in the Assumption and Exercise of
Jurisdiction in British Columbia” (1982), 16 UBCL Rev. 1.
There may also be remedies available to the recognizing court that may afford redress
to the defendant in certain cases such as fraud or conflict with the law or public policy of
the recognizing jurisdiction. Here, too, there may be room for the operation of s. 7 of the
Charter. None of these questions, however, are relevant to the facts of the present case
and I have not given them consideration.
Hunt v T&N plc

[1993] 4 SCR 289
LA FOREST J:
Legal systems and rules are a reflection and expression of the fundamental values of a
society, so to respect diversity of societies it is important to respect differences in legal
systems. But if this is to work in our era where numerous transactions and interactions
spill over the borders defining legal communities in our decentralized world legal order,
there must also be a workable method of co-ordinating this diversity. Otherwise, the
anarchic system’s worst attributes emerge, and individual litigants will pay the inevitable
price of unfairness. Developing such co-ordination in the face of diversity is a common
function of both public and private international law. It is also one of the major objectives
of the division of powers among federal and provincial governments in a federation. This
appeal raises issues that lie at the confluence of private international law and constitutional
law. In seeking to find a workable balance between diversity and uniformity, one must be
aware of the similarities but also the differences that exist in the balances represented in
the rules in these two areas of law.
The immediate issue in this appeal is whether the provisions of the Quebec Business
Concerns Records Act, RSQ, c. D-12, a “blocking statute,” provide a “lawful excuse” under
Rule 2(5) of the British Columbia Rules of Court, such that Quebec defendants to a civil
action in British Columbia can refuse to comply, as required by Rule 26 of the British
Columbia Rules of Court, with a demand for discovery of documents. The Quebec statute
prohibits, inter alia, the removal from the province of documents of business concerns
in Quebec that are required pursuant to judicial processes outside the province. The
fundamental issue is whether this statute is ultra vires or whether it is constitutionally
inapplicable to a judicial proceeding in another province.
During various stages of the proceedings, the appellant has claimed that the Act does
not provide an excuse from production of the documents sought in British Columbia for
the following reasons: (1) the Act is ultra vires the National Assembly of Quebec, or,
alternatively, it is constitutionally inapplicable to a judicial proceeding in another prov-
ince; (2) the Act is contrary to the public policy of British Columbia; or (3) the Act is not
mandatory and failure to comply with discovery constituted bad faith on the part of the
respondents. In connection with the first issue, the Chief Justice on June 2, 1992, stated
the following constitutional question:
Is s. 2 of the Quebec Business Concerns Records Act, RSQ, c. D-12, ultra vires the National
Assembly of Quebec or constitutionally inapplicable because its pith and substance is a dero-
gation from extraprovincial rights?
The respondents contest all these issues, and also contest the jurisdiction of this court
to hear the constitutional question. They claim that this court can only exercise the powers
the British Columbia courts could, and that the latter lacked jurisdiction to rule on the
constitutionality of a Quebec statute.
• • •
The Constitutional Issue

I shall begin by considering the constitutional basis advanced to support the Quebec
statute. The respondents and the intervener Attorney-General of Quebec submit that the
Act falls within provincial legislative competence by virtue of s. 92(13), (14) and (16),
which empower a province to legislate in relation to the following matters in the province:
property and civil rights, the administration of justice, including the creation and organ-
ization of provincial courts and the procedure in civil matters, and matters of a merely
local or private nature. These provisions, they say, empower a province to legislate respect-
ing the enforcement of judicial and other orders emanating from another province. For
this, they cite A-G Ont. v. Scott (1956), 1 DLR (2d) 433, 114 CCC 224, [1956] SCR 137,
upholding the power of a province to enforce judgments of other countries pursuant to
reciprocal enforcement arrangements. A necessary inference, they say, is that the province
has legislative jurisdiction to prevent the enforcement in its jurisdiction of any order in
relation to property located in the province, even if that affects rights recognized outside
the province.
This position, of course, raises issues about the extent to which a province may give
extraterritorial effect to legislation, issues that have traditionally been considered in the
context of the limitation in every head of provincial power to legislation “in the province.”
As well, so far as the extraterritorial application of judicial pronouncements in another
province is concerned, it raises issues concerning whether the doctrine propounded in
Morguard [(1990), 76 DLR (4th) 256 (SCC)] is of a constitutional character and whether
that doctrine applies in the circumstances. Before turning to these extraterritorial con-
cerns, however, I should observe that I have considerable reservations about some of the
suggested constitutional justifications for the Act. First, it is difficult to view the Act as
concerned with the administration of justice in Quebec pursuant to s. 92(14). That section
relates to the creation of courts in the province and their procedures. The impugned Act
does not, however, relate to the administration of justice or procedure in the courts in
Quebec; rather it purports to control property in the province that might be affected by
proceedings outside the province. It has nothing to do with the court procedure in Que-
bec. It is instead concerned with impeding legal processes of courts outside of the province
by preventing their enforcement in the province.
Similarly, s. 92(16) seems an implausible head of power under which the Act could be
authorized because the refusal to allow discovery of documents related to court orders
or legislative acts emanating from outside the province is hardly a matter of a “merely
local or private Nature in the Province.” Rather, the Act is specifically concerned with
orders and acts from outside the province, and the response of parties in Quebec to them.
The most promising constitutional basis for the Act is s. 92(13), as it relates to the
substantive property and civil rights in the province. The documents and information in
question may certainly form the subject of legislation as property in the province of
Quebec. This indeed was the basis principally relied on by those seeking to uphold the
Act. The purpose of the Act, it was said, was to prohibit execution of decisions made
outside the province that affected the communication of records of business concerns
located in the province.
This argument is understandable in terms of traditional approaches to private inter-
national law as it operates between foreign states. It is well established that judgments and
orders of a state must be recognized and enforced in order to have effect in a foreign
jurisdiction. But the traditional conflicts rules, which were designed for an anarchic world
that emphasized forum independence, must be assessed in light of the principles of our
constitutional law mentioned above. First, the statute must conform to the requirement
that it be “in the Province” as required by s. 92, a requirement that involves a balancing
under the “pith and substance” approach to determine if it exceeds provincial jurisdiction
to enact legislation with extra-provincial effect. Secondly, the courts must consider
appropriate policy in relation to recognition and enforcement of judgments issued in
other provinces in light of the legal interdependence under the scheme of confederation
established in 1867. It is the latter issue I now wish to explore.
The Morguard Decision

It was the situation of total autonomy over recognition and enforcement, and the conse-
quent disruption it could cause for any litigation involving interprovincial or international
elements, that was the concern of this court’s decision in Morguard, supra. Morguard was
concerned with tempering this source of unfairness and inconvenience to litigants in
conformity with the changing nature of the world community and, in particular, in light
of the Canadian constitutional structure.
A central idea in that judgment was comity. But as I stated, at p. 270, “I do not think
it much matters whether one calls these rules of comity or simply relies directly on the
reasons of justice, necessity and convenience” that underlie them. In my view, the old
common law rules relating to recognition and enforcement were rooted in an outmoded
conception of the world that emphasized sovereignty and independence, often at the cost
of unfairness. Greater comity is required in our modern era when international trans-
actions involve a constant flow of products, wealth and people across the globe.
In any event, I indicated, at p. 271, that the traditional rules emphasizing sovereignty
seem to “fly in the face of the obvious intention of the Constitution to create a single
country.” Among the factors I identified that would also support a more co-operative
spirit in recognition and enforcement were: (1) common citizenship; (2) interprovincial
mobility of citizens; (3) the common market created by the union as reflected in ss. 91(2),
(10), 121 and the peace, order and good government clause; and (4) the essentially unitary
structure of our judicial system with the Supreme Court of Canada at its apex to which I
have earlier referred. …
(The judgment then goes on, at pp. 271-2, with the passage cited, supra, regarding the
essentially unitary structure of the Canadian court system, which allays any concerns
about differential quality of justice among the provinces.)
The importance of adapting the traditional procedural limits of common law rules in
light of the demands of the structural requirements of the Canadian Constitution was not
something invented in Morguard. For example, I noted then, and repeat now, what was
said by Estey J in Aetna Financial Services Ltd. v. Feigelman (1985), 15 DLR (4th) 161 at
p. 184, 4 CPR (3d) 145, [1985] 1 SCR 2, in relation to Mareva injunctions designed to
prevent the removal of assets from one jurisdiction to another:
All the foregoing considerations, while important to an understanding of the operation of
this type of injunction, leave untouched the underlying and basic question: do the principles,
as developed in the United Kingdom courts, survive intact a transplantation from that unitary
state to the federal state of Canada?
He concluded that the rules intended to deal with the removal of assets and “fend off the
depredations of shady mariners operating out of far-away havens, usually on the fringe
of legally organized commerce” were not applicable to situations where a corporate
defendant was seeking to move assets for legitimate business purposes to another juris-
diction in Canada. Similarly, I do not think litigation engendered against a corporate
citizen located in one province by its trading and commercial activities in another prov-
ince should necessarily be subject to the same rules as those applicable to international
commerce. In particular, when a corporate citizen situated in one province chooses to
engage in trading and commercial activities in other provinces, the rules governing
consequential litigation, specifically rules for the recognition and enforcement of judg-
ments, should be adapted to the specific nature of the Canadian federation. And it is
difficult to believe that ordinary individuals moving across Canada in the exercise of their
common right of citizenship should be treated differently: see Black v. Law Society of
Alberta (1989), 58 DLR (4th) 317, [1989] 1 SCR 591, 37 Admin. LR 161.
Morguard was not argued in constitutional terms, so it was sufficient there to infuse
the constitutional considerations into the rules that might otherwise have governed issues
of enforcement and recognition of judgment. But the issue was very clearly raised in this
case and in fact a constitutional question was framed. Now, as perusal of the last cited
passage from Morguard reveals, the constitutional considerations raised are just that. They
are constitutional imperatives, and as such apply to the provincial legislatures as well as
to the courts, as the Attorney-General for Ontario conceded and as a number of com-
mentators have maintained: see, for example, Peter W. Hogg, Constitutional Law of
Canada, 3rd ed. (Scarborough, Ont.: Carswell, 1992), at p. 335; V. Black and J. Swan, “New
Rules for the Enforcement of Foreign Judgments: Morguard Investments Ltd. v. De Savoye,”
supra [(1991), 12 Advocate 489]. In short, to use the expressions employed in Morguard,
at p. 272, the “integrating character of our constitutional arrangements as they apply to
interprovincial mobility” calls for the courts in each province to give “full faith and credit”
to the judgments of the courts of sister provinces. This, as also noted in Morguard, is
inherent in the structure of the Canadian federation, and, as such, is beyond the power
of provincial legislatures to override. This does not mean, however, that a province is
debarred from enacting any legislation that may have some effect on litigation in other
provinces or indeed from enacting legislation respecting modalities for recognition of
judgments of other provinces. But it does mean that it must respect the minimum stan-
dards of order and fairness addressed in Morguard. I turn briefly then to the relevant
principles after which I shall consider whether the statute impugned in this case offends
these standards.
The basic thrust of Morguard was that in our federation a greater degree of recognition
and enforcement of judgments given in other provinces was called for. Morguard was
careful to indicate, however, that a court must have reasonable grounds for assuming
jurisdiction. One must emphasize that the ideas of “comity” are not an end in themselves,
but are grounded in notions of order and fairness to participants in litigation with con-
nections to multiple jurisdictions.
In Morguard, a more accommodating approach to recognition and enforcement was

premised on there being a “real and substantial connection” to the forum that assumed
jurisdiction and gave judgment. Contrary to the comments of some commentators and
lower court judges, this was not meant to be a rigid test, but was simply intended to
capture the idea that there must be some limits on the claims to jurisdiction. Indeed I
observed (at p. 264) that the “real and substantial connection” test was developed in Indyka
v. Indyka, [1969] 1 AC 33 (HL), in a case involving matrimonial status (where sound
policy demands generosity in recognition), and that in a personal action a nexus may
need to be sought between the subject-matter and the territory where the action is
brought. I then considered the test developed in Moran v. Pyle, supra [(1973), 43 DLR
(3d) 239], for products liability cases as an example of where jurisdiction would be prop-
erly assumed. The exact limits of what constitutes a reasonable assumption of jurisdiction
were not defined, and I add that no test can perhaps ever be rigidly applied; no court has
ever been able to anticipate all of these. However, though some of these may well require
reconsideration in light of Morguard, the connections relied on under the traditional rules
are a good place to start. More than this was left to depend on the gradual accumulation
of connections defined in accordance with the broad principles of order and fairness:
Vaughan Black, “The Other Side of Morguard: New Limits on Judicial Jurisdiction” (1993),
22 CBLJ 4. But I think that the general approach was solidly based.
Since the matter has been the subject of considerable commentary, I should note
parenthetically that I need not, for the purposes of this case, consider the relative merits
of adopting a broad or narrow basis for assuming jurisdiction and the consequences of
this decision for the use of the doctrine of forum non conveniens: see the opposing views
of V. Black in the article just cited, and Peter Finkle and Claude Labrecque, “Low-Cost
Legal Remedies and Market Efficiency: Looking Beyond Morguard” (1993), 22 CBLJ 58.
Whatever approach is used, the assumption of, and the discretion not to exercise juris-
diction must ultimately be guided by the requirements of order and fairness, not a mech-
anical counting of contacts or connections. Here, the courts below found that there was,
on the authorities, jurisdiction, and that there was no reason to apply the doctrine of
forum non conveniens. In light of commentaries on Morguard, I should perhaps also add
that I need not consider the implications, if any, of Morguard on choice of law and other
aspects of conflicts law.
Finally, I noted in Morguard (at p. 272) that a number of commentators had suggested
that the federal Parliament had power to legislate respecting the recognition and enforce-
ment of judgments, and in my view that suggestion is well founded. This issue is ultimately
related to the rights of the citizen, trade and commerce and other federal legislative
powers, including that encompassed in the peace, order and good government clause.
But subject to these overriding powers, I see no reason why the provinces should not be
able to legislate in the area, subject, however, to the principles in Morguard and to the
demands of territoriality as expounded in the cases, most recently in Churchill Falls
(Labrador) Corp. v. Newfoundland (Attorney-General) [(1984), 8 DLR (4th) 1 (SCC)].
Application of Morguard Principles to the Impugned Statute

I now turn to the issue whether the impugned statute is consistent with the principles I
have just set forth. I say at the outset that I do not think it is. A province undoubtedly has
an interest in protecting the property of its residents within the province, but it cannot
do so by unconstitutional means. Here the means chosen are intended to unconditionally
refuse recognition to orders and thereby impede litigation, not only in foreign countries
but in other provinces. At least when a court order is sought, if not before, a judicial order
in another province will be denied effect. There are no qualifications. No discretion is
given so it can scarcely be said that the Act respects the principles of order and fairness
which must, under the Morguard principle, inform the procedures required for litigation
having extraprovincial effects. Apart from the legislative aspect, the situation in Morguard
differed in that the appellant there sought refusal of recognition after the judgment was
rendered. But the constitutional mandate cannot be avoided by a pre-emptive strike. The
whole purpose of a blocking statute is to impede successful litigation or prosecution in
other jurisdictions by refusing recognition and compliance with orders issued there.
Everybody realizes that the whole point of blocking statutes is not to keep documents in
the province, but rather to prevent compliance, and so the success of litigation outside
the province that that province finds objectionable. This is no doubt part of sovereign
right, but it certainly runs counter to comity. In the political realm it leads to strict retalia-
tory laws and power struggles. And it discourages international commerce and efficient
allocation and conduct of litigation. It has similar effects on the interprovincial level,
effects that offend against the basic structure of the Canadian federation.
As a matter of legislative history, we were told, the Ontario and Quebec statutes were
precipitated by the aggressively extraterritorial, “long arm” antitrust statutes of the United
States. Unfortunately, these blocking statutes are a blunt response, and themselves have
become like long arm statutes that haphazardly end up harming individuals who were
not in the jurisdiction and are not pursuing the actions against which the blocking statutes
were allegedly originally aimed.
This could, no doubt, be defended on the basis of sovereignty. Indeed, the federal
Parliament is expressly permitted by our Constitution to legislate with internationally
extraterritorial effect. But this appeal is concerned with the provinces within Confedera-
tion. Morguard requires that the rules of private international law must be adapted to the
structure of our federation. In a federation, we assume that there is more commonality
as to what is acceptable action; we have many common procedures. We even have similar
conflicts rules, related, for example, to jurisdiction and deference, and to procedures
regarding the lex fori. And courts are required, by constitutional restraints, to assume
jurisdiction only where there are real and substantial connections to that place. In terms
of policy, the presence of such blocking statutes is an anachronism, not even, so we were
told, aimed at interprovincial litigation at its inception in the 1940s, but definitely inimical
to such litigation if applied on the interprovincial level.
If blocking statutes of the type now in effect in both Ontario and Quebec were possible
under the Constitution, they would have the potential of affecting the rights of litigants
in all the other provinces, whenever the defendant was a Quebec or Ontario business.
Discovery is a very important tool of civil litigation. It is especially important in cases of
this type, where there are allegations of some sort of product liability. The ultimate plaintiff
must have a tool to access the otherwise internal documents, especially of large corporate
monoliths. And given that there are allegations of civil conspiracy in this case, it is all the
more necessary. That British Columbia, despite what was stated in the courts below,
considers discovery central is evident in that refusal to comply with a demand is one of
the few procedural violations that will result in a default judgment in the province. Most
other instances of non-compliance with Rules of Court are treated as irregularities that
can be remedied: see Rule 2. Moreover, the trend of the case law on Rule 26 is to emphasize
the importance of the right to discovery, even at the cost of considerable loss of confiden-
tiality. In Boxer v. Reesor (1983), 35 CPC 68, 43 BCLR 352, McEachern CJSC (as he then
was) confirmed the fundamental importance of discovery as emphasized long ago in the
English case of Compagnie Financière et Commerciale du Pacifique v. Peruvian Guano Co.
(1882), 11 QBD 55 (CA).
It may be that the only reason that these blocking statutes have not caused more
problems in the past is that most defendants assumed that they had no basis to claim that
they barred the production of documents in situations like the present, and voluntarily
produced the documents. But future defendants, once aware of this strategy for avoiding
discovery, will only be too happy to avail themselves of the operation of the statute. The
impact of this bad practice can already be seen in the case of 2632-7602 Québec Inc. v.
Pizza Pizza Canada Inc., supra [[1991] RJQ 2951], where the trial judge in Quebec refused
to order discovery with respect to Ontario defendants claiming a prohibition under the
equivalent Ontario statute, misguidedly relying on Morguard. If constitutionally permis-
sible, this approach would effectively immunize the business concerns located in Quebec
and Ontario from ever having to produce documents sought for the purposes of litigation
in other provinces. All they, or their shareholders, would need to do to escape discovery
would be to simply seek an order as provided in the Act. When one considers that Ontario
and Quebec are the headquarters for many of the largest corporations in this country,
many of which will properly be subject to tort and other actions in other provinces, the
impact would be serious. The essential effect then, and indeed the barely shielded intent,
is to impede the substantive rights of litigants elsewhere. It would force parties to conduct
litigation in multiple fora and compel more plaintiffs to choose to litigate in the courts of
Ontario and Quebec. Other provinces could, of course, follow suit. It is inconceivable that
in devising a scheme of union comprising a common market stretching from sea to sea,
the Fathers of Confederation would have contemplated a situation where citizens would
be effectively deprived of access to the ordinary courts in their jurisdiction in respect of
transactions flowing from the existence of that common market. The resultant higher
transactional costs for interprovincial transactions constitute an infringement on the
unity and efficiency of the Canadian marketplace (see Finkle and Labrecque, op. cit.), as
well as unfairness to the citizen.
The lack of order and fairness in the present situation is evident in a further incongru-
ity. It is that full rights of discovery are available to parties in the civil procedure of Ontario
and Quebec. It is not as if these jurisdictions have a totally different tradition of civil
procedure. If the litigation was proceeding in either of those provinces there would be
full discovery. And if both parties to the action had been from British Columbia there
would be discovery. But somehow, because of the fortuitous combination of litigation in
British Columbia involving a defendant from Quebec or Ontario, the discovery process
is barred.
In light of the foregoing, I conclude that the Quebec Business Concerns Records Act is
constitutionally inapplicable to other provinces, and consequently in the present case.
Tolofson v Jensen; Lucas (Litigation Guardian of) v Gagnon

[1994] 3 SCR 1022
LA FOREST J:
Federal Problems
I begin by observing that in Breavington v. Godleman, supra [(1988), 80 ALR 362], the
High Court of Australia favoured the view that, while different approaches might be taken
in the international arena, within Australia the choice of law rule should be the lex loci
delicti. The judges of that court were, it is true, far from unanimous about the technical
basis in support of this approach, many of which, centred as they are on the Australian
Constitution, cannot be directly transported to our situation. None the less, so much of
the history and the social, practical and constitutional environment is of a nature akin to
those with which we are faced in dealing with conflicts of laws within this country that
their observations must be accorded considerable weight. The niceties of the technical
mechanisms by which judges arrive at decisions are far less important than the underlying
policy considerations that give them life. Thus, I think what Mason CJ had to say, at p. 372,
has clear application to Canada:
When an Australian resident travels from one State or Territory to another State or Territory
he does not enter a foreign jurisdiction. He is conscious that he is moving from one legal
regime to another in the same country and that there may be differences between the two
which will impinge in some way on his rights, duties and liabilities so that his rights, duties
and liabilities will vary from place to place within Australia. It may come as no surprise to
him to find that the local law governed his rights and liabilities in respect of any wrong he
did or any wrong he suffered in a State or Territory. He might be surprised if it were other-
wise. In these circumstances there may be a stronger case for looking to the law of the place
of the tort as the governing law for the purpose of determining the substantive rights and
liabilities of the parties in respect of a tort committed within Australia.
Also relevant is the following remark in the reasons of Wilson and Gaudron JJ, at p. 379:
It is not only undesirable, but manifestly absurd that the one set of facts occurring in the one
country may give rise to different legal consequences depending upon the location or venue
of the court in which action is brought.
A similar sentiment is expressed by Deane J, at p. 404:

What is essential is that the substantive rule or rules applicable to determine the lawfulness
and the legal consequences or attributes of conduct, property or status at a particular time
in a particular part of the national territory will be the same regardless of whereabouts in
that territory questions concerning those matters or their legal consequences may arise.
As I mentioned, these statements are made in the light not only of different views about
the common law but also of different theories concerning the constitutional arrangements
in Australia. None the less, the policies inhering therein are surely relevant in the develop-
ment of common law rules for choice of law within our federation.
The nature of our constitutional arrangements—a single country with different prov-
inces exercising territorial legislative jurisdiction—would seem to me to support a rule
that is certain and that ensures that an act committed in one part of this country will be
given the same legal effect throughout the country. This militates strongly in favour of
the lex loci delicti rule. In this respect, given the mobility of Canadians and the many
common features in the law of the various provinces, as well as the essentially unitary
nature of Canada’s court system, I do not see the necessity of an invariable rule that the
matter also be actionable in the province of the forum. That seems to me to be a factor to
be considered in determining whether there is a real and substantial connection to the
forum to warrant its exercise of jurisdiction. Any problems that might arise could, I should
think, be resolved by a sensitive application of the doctrine of forum non conveniens. The
doctrine of forum non conveniens would, of course, have far more occasions to be brought
into play where a dispute involving the interrelation of Quebec’s Civil Code is involved in
a suit in some other province, or where a legal issue involving an essentially common law
problem arises in Quebec. Even here, however, it must be remembered that many areas
of law in Quebec and the other provinces are not so dissimilar as to give difficulties, and
the convenience of the parties should not be overlooked.
The approach I have suggested also has the advantage of unquestionable conformity
with the Constitution, an advantage not to be ignored having regard to the largely unex-
plored nature of the area and the consequent danger that a rule developed in a constitu-
tional vacuum may, when explored, not conform to constitutional imperatives. I do not
wish to enter largely into this or to come to any final, and indeed in many situations, tenta-
tive view. The constitutional problems were not adverted to in the courts below and were
largely dealt with in this court as a mere backdrop to other issues. Importantly, too
(though I am not suggesting their presence was required by law), the Attorneys-General
were not present.
It is useful, however, in understanding why one should not venture far from what is
clearly constitutionally acceptable, to give some notion of the nature of these problems.
Unless the courts’ power to create law in this area exists independently of provincial
power, subject or not to federal power to legislate under its residuary power—ideas that
have been put forth by some of the Australian judges in Breavington v. Godleman, supra,
but never, so far as I know, in Canada—then the courts would appear to be limited in
exercising their powers to the same extent as the provincial legislatures: see John Swan,
“The Canadian Constitution, Federalism and the Conflict of Laws” (1985), 63 Can. Bar
Rev. 271 at p. 309. I note that provincial legislative power in this area would appear to rest
on s. 92(13)—“Property and Civil Rights in the Province.” If a court is thus confined, it
is obvious that an extensive concept of “proper law of the tort” might well give rise to
constitutional difficulties. Thus, an attempt by one province to impose liability for negli-
gence in respect of activities that have taken place wholly in another province by residents
of the latter or, for that matter, residents of a third province, would give rise to serious
constitutional concerns. Such legislation applying solely to the forum province’s residents
would appear to have more promise. However, it is arguable that it is not constitutionally
permissible for both the province where certain activities took place and the province of
the residence of the parties to deal with civil liability arising out of the same activities.
Assuming both provinces have legislative power in such circumstances, this would open
the possibility of conflicting rules in respect of the same incident. I go no further regarding
the possible resolution of these problems. What these considerations indicate, however,
is that the wiser course would appear to be for the court to avoid devising a rule that may
possibly raise intractable constitutional problems.
I shall therefore turn to the specific issues in the two cases under appeal. …
[Gonthier, Cory, McLachlin, and Iacobucci JJ concurred with La Forest J. Major J issued
a separate judgment, supported by Sopinka J, concurring in the result, that did not discuss
the constitutional issues.]
British Columbia v Imperial Tobacco Canada Ltd

2005 SCC 49, [2005] 2 SCR 473
MAJOR J:
[1] The Tobacco Damages and Health Care Costs Recovery Act, SBC 2000, c. 30 (the
“Act”), authorizes an action by the government of British Columbia against a manufacturer
of tobacco products for the recovery of health care expenditures incurred by the govern-
ment in treating individuals exposed to those products. Liability hinges on those indi-
viduals having been exposed to tobacco products because of the manufacturer’s breach
of a duty owed to persons in British Columbia, and on the government of British Colum-
bia having incurred health care expenditures in treating disease in those individuals
caused by such exposure.
[2] These appeals question the constitutional validity of the Act. The appellants, each
of which was sued by the government of British Columbia pursuant to the Act, challenge
its constitutional validity on the basis that it violates (1) territorial limits on provincial
legislative jurisdiction; (2) the principle of judicial independence; and (3) the principle
of the rule of law.
[3] For the reasons that follow, the Act is constitutionally valid. The appeals are dis-
missed, with costs to the respondents throughout.
I. Background
A. The Legislation
• • •
[5] Section 2(1) is the keystone of the Act. It reads:

The government has a direct and distinct action against a manufacturer to recover the cost
of health care benefits caused or contributed to by a tobacco related wrong.
[6] The terms “manufacturer,” “cost of health care benefits” and “tobacco related
wrong” are defined in s. 1(1) of the Act. Their definitions in turn refer to other defined
terms. Incorporating the definitions into s. 2, then paraphrasing to some degree, the
section provides as follows:
The government has a direct and distinct action against a manufacturer for the present
value of existing and reasonably expected future expenditures by the government for
(a) benefits as defined under the Hospital Insurance Act or the Medicare Protection Act;
(b) payments under the Continuing Care Act; and
(c) programs, services or benefits associated with disease,
where
(a) such expenditures result from disease or the risk of disease caused or contributed
to by exposure to a tobacco product; and
(b) such exposure was caused or contributed to by
(i) a tort committed in British Columbia by the manufacturer; or
(ii) a breach of a common law, equitable or statutory duty or obligation owed
by the manufacturer to persons in British Columbia who have been or
might have become exposed to a tobacco product.
[7] Viewed in this light, s. 2(1) creates a cause of action by which the government of
British Columbia may recover from a tobacco manufacturer money spent treating disease
in British Columbians, where such disease was caused by exposure to a tobacco product
(whether entirely in British Columbia or not), and such exposure was caused by that
manufacturer’s tort in British Columbia, or breach of a duty owed to persons in British
Columbia.
[8] The cause of action created by s. 2(1), besides being “direct and distinct,” is not a
subrogated claim: s. 2(2). Nor is it barred by the Limitation Act, RSBC 1996, c. 266 s. 6(1).
Crucially, it can be pursued on an aggregate basis—i.e. in respect of a population of
persons for whom the government has made or can reasonably be expected to make
expenditures: s. 2(4)(b).
[9] Where the government’s claim is made on an aggregate basis, it may use statistical,
epidemiological and sociological evidence to prove its case: s. 5(b). It need not identify,
prove the cause of disease or prove the expenditures made in respect of any individual
member of the population on which it bases its claim: s. 2(5)(a). Furthermore, health care
records and related information in respect of individual members of that population are
not compellable, except if relied upon by an expert witness: ss. 2(5)(b) and (c). However,
the court is free to order the discovery of a “statistically meaningful sample” of the health
care records of individual members of that population, stripped of personal identifiers:
ss. 2(5)(d) and (e).
[10] Pursuant to ss. 3(1) and (2), the government enjoys a reversed burden of proof
in respect of certain elements of an aggregate claim. Where the aggregate claim is, like
the one brought against each of the appellants, to recover expenditures in respect of
disease caused by exposure to cigarettes, the reversed burden of proof operates as follows.
Once the government proves that
(a) the defendant manufacturer breached a common law, equitable or statutory
duty or obligation it owed to persons in British Columbia who have been or might
become exposed to cigarettes;
(b) exposure to cigarettes can cause or contribute to disease; and
(c) during the manufacturer’s breach, cigarettes manufactured or promoted by the
manufacturer were offered for sale in British Columbia,
the court will presume that
(a) the population that is the basis for the government’s aggregate claim would not
have been exposed to cigarettes but for the manufacturer’s breach; and
(b) such exposure caused or contributed to disease in a portion of the population
that is the basis for the government’s aggregate claim.
[11] In this way, it falls on a defendant manufacturer to show that its breach of duty
did not give rise to exposure, or that exposure resulting from its breach of duty did not
give rise to the disease in respect of which the government claims for its expenditures.
The reversed burden of proof on the manufacturer is a balance of probabilities: s. 3(4).
[12] Where the aforementioned presumptions apply, the court must determine the
portion of the government’s expenditures after the date of the manufacturer’s breach that
resulted from exposure to cigarettes: s. 3(3)(a). The manufacturer is liable for such
expenditures in proportion to its share of the market for cigarettes in British Columbia,
calculated over the period of time between its first breach of duty and trial: ss. 3(3)(b)
and 1(6).
[13] In an action by the government, a manufacturer will be jointly and severally liable
for expenditures arising from a joint breach of duty (i.e. for expenditures caused by dis-
ease, which disease was caused by exposure, which exposure was caused by a joint breach
of duty to which the manufacturer was a party): s. 4(1).
[14] Pursuant to s. 10, all provisions of the Act operate retroactively.
[15] The Act is the second British Columbia statute designed to enable the government
to sue tobacco manufacturers for tobacco-related health care costs that has been chal-
lenged on the basis of its constitutionality. The Supreme Court of British Columbia struck
down the earlier statute, the Tobacco Damages Recovery Act, SBC 1997, c. 41, as being in
pith and substance legislation in relation to extra-provincial civil rights and therefore
ultra vires the Legislative Assembly of British Columbia: see JTI-Macdonald Corp. v. British
Columbia (Attorney General) (2000), 184 DLR (4th) 335, 2000 BCSC 312.
[16] The legislative history of the Act confirms that it was drafted to address concerns
about the extra-territorial aspects of the earlier statute and to avoid any further challenges
with respect to extra-territoriality: see Debates of the Legislative Assembly, vol. 20, No. 6,
4th Sess., 36th Parl. (June 7, 2000), at p. 16314.
• • •
[19] The Canadian appellants applied for a declaration that the Act is unconstitutional.
The appellants served ex juris applied to set aside service on the basis that the Act is
unconstitutional, and thus that the government’s actions founded on it were bound to fail.
[20] Throughout the proceedings, the appellants’ constitutional attack has been
essentially tripartite. They argue that the Act exceeds the territorial limits on provincial
legislative jurisdiction, violates judicial independence and infringes the rule of law.
• • •
IV. Analysis
A. Extra-territoriality
[26] Section 92 of the Constitution Act, 1867 is the primary source of provincial legis-
latures’ authority to legislate. Provincial legislation must therefore respect the limitations,
territorial and otherwise, on provincial legislative competence found in s. 92. The opening
words of s. 92—“In each Province”—represent a blanket territorial limitation on provincial

powers. That limitation is echoed in a similar phrase that qualifies a number of the heads
of power in s. 92: “in the Province.”
[27] The territorial limitations on provincial legislative competence reflect the require-
ments of order and fairness underlying Canadian federal arrangements and discussed by
this Court in Morguard Investments Ltd. v. De Savoye, [1990] 3 SCR 1077, at pp. 1102-
1103, Hunt v. T&N plc, [1993] 4 SCR 289, at pp. 324-25, and Unifund Assurance Co. v.
Insurance Corp. of British Columbia, [2003] 2 SCR 63, 2003 SCC 40, at para. 56. They serve
to ensure that provincial legislation both has a meaningful connection to the province
enacting it, and pays respect to “the sovereignty of the other provinces within their respec-
tive legislative spheres”: Unifund, at para. 51. See also, generally, R.E. Sullivan, “Interpret-
ing the Territorial Limitations on the Provinces” (1985), 7 Sup. Ct. LR 511.
[28] Where the validity of provincial legislation is challenged on the basis that it
violates territorial limitations on provincial legislative competence, the analysis centres
on the pith and substance of the legislation. If its pith and substance is in relation to mat-
ters falling within the field of provincial legislative competence, the legislation is valid.
Incidental or ancillary extra-provincial aspects of such legislation are irrelevant to its
validity. See Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 SCR 297
(“Churchill Falls”), at p. 332, and Global Securities Corp. v. British Columbia (Securities
Commission), [2000] 1 SCR 494, 2000 SCC 21, at para. 24.
[29] In determining the pith and substance of legislation, the court identifies its essen-
tial character or dominant feature: see Global Securities Corp., at para. 22, and Reference
re Firearms Act (Can.), [2000] 1 SCR 783, 2000 SCC 31, at para. 16. This may be done
through reference to both the purpose and effect of the legislation: see Kitkatla Band v.
British Columbia (Minister of Small Business, Tourism and Culture), [2002] 2 SCR 146,
2002 SCC 31, at para. 53. See also Fédération des producteurs de volailles du Québec v.
Pelland, [2005] 1 SCR 292, 2005 SCC 20, at para. 20.
[30] Where the pith and substance of legislation relates to a tangible matter—i.e.,
something with an intrinsic and observable physical presence—the question of whether
it respects the territorial limitations in s. 92 is easy to answer. One need only look to the
location of the matter. If it is in the province, the limitations have been respected, and the
legislation is valid. If it is outside the province, the limitations have been violated, and the
legislation is invalid.
[31] Where legislation’s pith and substance relates to an intangible matter, the char-
acterization is more complicated. That is the case here.
[32] The pith and substance of the Act is plainly the creation of a civil cause of action.
More specifically, it is the creation of a civil cause of action by which the government of
British Columbia may seek compensation for certain health care costs incurred by it. Civil
causes of action are a matter within provincial legislative jurisdiction under s. 92(13) of
the Constitution Act, 1867: “Property and Civil Rights in the Province.” See General Motors
of Canada Ltd. v. City National Leasing, [1989] 1 SCR 641, at p. 672.
[33] But s. 92(13) does not speak to “Property and Civil Rights” located anywhere. It
speaks only to “Property and Civil Rights in the Province.” And, to reiterate, it is, like all
provincial heads of power, qualified by the opening words of s. 92: “In each Province.”
The issue thus becomes how to determine whether an intangible, such as the cause of
action constituting the pith and substance of the Act, is “in the Province.”
[34] Churchill Falls dealt with a similar issue. In that case, McIntyre J was confronted
with a Newfoundland statute, the pith and substance of which was the modification of
rights existing under a contract between Churchill Falls (Labrador) Corporation Limited
and Quebec Hydro-Electric Commission. Since the entity possessing those rights (namely,
the Commission) was constituted in Quebec, and the parties had agreed that the Quebec
courts had exclusive jurisdiction to adjudicate disputes concerning their contract,
McIntyre J regarded the rights created by that contract as situated in Quebec. The New-
foundland law that purported to modify them was thus invalid. It related to civil rights,
but not to civil rights “in the Province.”
[35] McIntyre J’s approach to locating the civil rights constituting the pith and sub-
stance of the Newfoundland legislation illustrates the role, pointed out by Binnie J in
Unifund, at para. 63, that “the relationships among the enacting territory, the subject
matter of the law, and the person[s] sought to be subjected to its regulation” play in
determining the validity of legislation alleged to be impermissibly extra-territorial in
scope. In Churchill Falls, an examination of those relationships indicated that the intan-
gible civil rights constituting the pith and substance of the Newfoundland legislation at
issue were not meaningfully connected to the legislating province, and could properly be
the subject matter only of Quebec legislation. Put slightly differently, if the impugned
Newfoundland legislation had been permitted to regulate those civil rights, neither of the
purposes underlying s. 92’s territorial limitations would be respected. It followed that
those civil rights should be regarded as located beyond the territorial scope of Newfound-
land’s legislative competence under s. 92.
[36] From the foregoing it can be seen that several analytical steps may be required
to determine whether provincial legislation in pith and substance respects territorial limits
on provincial legislative competence. The first step is to determine the pith and substance,
or dominant feature, of the impugned legislation, and to identify a provincial head of
power under which it might fall. Assuming a suitable head of power can be found, the
second step is to determine whether the pith and substance respects the territorial limit-
ations on that head of power—i.e. whether it is in the province. If the pith and substance
is tangible, whether it is in the province is simply a question of its physical location. If the
pith and substance is intangible, the court must look to the relationships among the
enacting territory, the subject matter of the legislation and the persons made subject to
it, in order to determine whether the legislation, if allowed to stand, would respect the
dual purposes of the territorial limitations in s. 92 (namely, to ensure that provincial
legislation has a meaningful connection to the enacting province and pays respect to the
legislative sovereignty of other territories). If it would, the pith and substance of the legis-
lation should be regarded as situated in the province.
[37] Here, the cause of action that is the pith and substance of the Act serves exclu-
sively to make the persons ultimately responsible for tobacco-related disease suffered by
British Columbians—namely, the tobacco manufacturers who, through their wrongful
acts, caused those British Columbians to be exposed to tobacco—liable for the costs
incurred by the government of British Columbia in treating that disease. There are thus
strong relationships among the enacting territory (British Columbia), the subject matter
of the law (compensation for the government of British Columbia’s tobacco-related health
care costs) and the persons made subject to it (the tobacco manufacturers ultimately
responsible for those costs), such that the Act can easily be said to be meaningfully con-
nected to the province.
[38] The Act respects the legislative sovereignty of other jurisdictions. Though the
cause of action that is its pith and substance may capture, to some extent, activities occur-
ring outside of British Columbia, no territory could possibly assert a stronger relationship
to that cause of action than British Columbia. That is because there is at all times one
critical connection to British Columbia exclusively: the recovery permitted by the action
is in relation to expenditures by the government of British Columbia for the health care
of British Columbians.
[39] In assessing the Act’s respect for the territorial limitations on British Columbia’s
legislative competence, the appellants and the Court of Appeal placed considerable
emphasis on the question of whether, as a matter of statutory interpretation, the breach
of duty by a manufacturer that is a necessary condition of its liability under the cause of
action created by the Act must occur in British Columbia. That emphasis was undue, for
two reasons.
[40] First, the driving force of the Act’s cause of action is compensation for the govern-
ment of British Columbia’s health care costs, not remediation of tobacco manufacturers’
breaches of duty. While the Act makes the existence of a breach of duty one of several
necessary conditions to a manufacturer’s liability to the government, it is not the mischief
at which the cause of action created by the Act is aimed. The Act leaves breaches of duty
to be remedied by the law that gives rise to the duty. Thus, the breaches of duty to which
the Act refers are of subsidiary significance to the cause of action created by it, and the
locations where those breaches might occur have little or no bearing on the strength of
the relationship between the cause of action and the enacting jurisdiction.
[41] Second, and in any event, the only relevant breaches under the Act are breaches
of duties (or obligations) owed “to persons in British Columbia” (s. 1(1) “tobacco related
wrong,” s. 3(1)(a)) that give rise to health care expenditures by the government of British
Columbia. Thus, even if the existence of a breach of duty were the central element of the
Act’s cause of action (it is not), the cause of action would remain strongly related to British
Columbia.
[42] The question of whether other matters, such as exposure and disease, to which
the Act refers, must occur or arise in British Columbia is equally or more irrelevant to
the Act’s validity. Those matters too are conditions precedent to success in an action
brought pursuant to the Act and of subsidiary significance to it.
[43] It follows that the cause of action that constitutes the pith and substance of the
Act is properly described as located “in the Province.” The Act is not invalid by reason of
extra-territoriality, being in pith and substance legislation in relation “Property and Civil
Rights in the Province” under s. 92(13) of the Constitution Act, 1867.
[The court went on to hold that the Act did not breach the rule of law and was not imper-
missibly inconsistent with judicial independence.]
Club Resorts Ltd v Van Breda

2012 SCC 17, [2012] 1 SCR 572
LeBEL J:
[The issue in Van Breda concerned the jurisdiction of the Ontario court to hear actions
arising from accidents injuring Ontario residents in Cuba. Stating that “[c]onflicts rules
must fit within Canada’s constitutional structure,” Lebel J proceeded to examine the con-
stitutional principles within which conflicts rules must fit.]
(4) Origins of the Real and Substantial Connection Test

[22] The real and substantial connection test arose out of decisions of this Court that
were aimed at establishing broad and flexible principles to govern the exercise of provin-
cial powers and the actions of a province’s courts. It was focussed on two issues: (1) the
risk of jurisdictional overreach by provinces and (2) the recognition of decisions rendered
in other jurisdictions within the Canadian federation and in other countries. In develop-
ing the real and substantial connection test, the Court crafted a constitutional principle
rather than a simple conflicts rule (see G. Goldstein and E. Groffier, Droit international
privé, vol. I, Théorie générale (1998), at p. 47). However, the test was born as a general
organizing principle of the conflict of laws. Its constitutional dimension appeared only
later. Courts have used the expression “real and substantial connection” to describe the
test in both senses, and often in the same judgment. This has produced confusion about
both the nature of the test and the constitutional status of the rules and principles of
private international law. A clearer distinction needs to be drawn between the private
international law and constitutional dimensions of this test.
[23] From a constitutional standpoint, the Court has, by developing tests such as the
real and substantial connection test, sought to limit the reach of provincial conflicts rules
or the assumption of jurisdiction by a province’s courts. However, this test does not dictate
the content of conflicts rules, which may vary from province to province. Nor does it
transform the whole field of private international law into an area of constitutional law.
In its constitutional sense, it places limits on the reach of the jurisdiction of a province’s
courts and on the application of provincial laws to interprovincial or international situ-
ations. It also requires that all Canadian courts recognize and enforce decisions rendered
by courts of the other Canadian provinces on the basis of a proper assumption of juris-
diction. But it does not establish the actual content of rules and principles of private
international law, nor does it require that those rules and principles be uniform.
[24] The first mention of a “real and substantial connection test” in the Court’s modern
jurisprudence can be found in the reasons of Dickson J. in Moran v. Pyle National (Can-
ada) Ltd., [1975] 1 S.C.R. 393. That case concerned a tort action with respect to manu-
facturer’s liability. The main issue was whether the courts of Saskatchewan had jurisdiction
over the claim and, if so, what substantive law governed it. Dickson J. suggested that the
English courts seemed to be moving towards some form of “real and substantial connec-
tion test” (pp. 407-8) to resolve issues related to the assumption of jurisdiction by a
province’s courts and the appropriate choice of the law applicable to a tort. The test was
formally adopted in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077. As had
been the case in Moran, the Court’s intention in Morguard was to develop an organizing
principle of Canadian private international law, albeit with constitutional overtones. The
test’s constitutional role in the Canadian federation was confirmed a few years later in
Hunt v. T&N plc, [1993] 4 S.C.R. 289. Its Janus-like nature—with a private international
law face on the one hand and a constitutional face on the other—crystallized in Hunt and
remained a permanent feature of the subsequent jurisprudence.
[25] In retrospect, it can be seen that in Morguard, the Court initiated a major shift
in the framework governing the conflict of laws in Canada by accepting the validity of
the real and substantial connection test as a principle governing the rules applicable to
conflicts. In view of its importance, the case merits closer consideration. At issue in
Morguard was an application to enforce, in British Columbia, a judgment rendered in
Alberta against a resident of British Columbia. The claim related to a debt secured by a
mortgage on property in Alberta. The parties were resident in Alberta at the time the loan
was made. La Forest J., writing for a unanimous Court, called for a re-evaluation of
relationships between the courts of the provinces within the Canadian federation. The
creation of the Canadian federation established an internal space within which exchanges
should occur more freely than between independent states. The principle of comity and
the principles of fairness and order applicable within a federal space required that the
rules of private international law be adjusted (Morguard, at pp. 1095-96).
[26] In Morguard, the Court held that the courts of a province must recognize and
enforce a judgment of a court of another province if a real and substantial connection
exists between that court and the subject matter of the litigation. Another purpose of the
test was to prevent improper assumptions of jurisdiction by the courts of a province. Thus,
the test was designed to ensure that claims are not prosecuted in a jurisdiction that has
little or no connection with either the transactions or the parties, and it requires that a
judgment rendered by a court which has properly assumed jurisdiction in a given case
be recognized and enforced. La Forest J. did not seek to determine the precise content of
this real and substantial connection test (Morguard, at p. 1108), nor did he elaborate on
the strength of the connection. Rather, he held that the connections between the matters
or the parties, on the one hand, and the court, on the other, must be of some significance
in order to promote order and fairness. They must not be “tenuous” (p. 1110). La Forest J.
added that the requirement of a real and substantial connection was consistent with the
constitutional imperative that provincial power be exercised “in the province” (p. 1109).
Because the appeal had not been argued on constitutional grounds, however, he refrained
from determining whether the real and substantial connection test should be considered
a constitutional test.
[27] The Court’s subsequent judgment in Hunt confirmed the constitutional nature
of the real and substantial connection test. That case concerned the application of a
“blocking” statute enacted by the Quebec legislature that prohibited the transfer to other
jurisdictions of certain documents kept by corporations in Quebec, even in the context
of court litigation. The Court found that the statute was not applicable to litigation con-
ducted in British Columbia. It held that assumptions of jurisdiction by a province and its
courts must be grounded in the principles of order and fairness in the judicial system.
The real and substantial connection test from Morguard reflected the need for limits on
assumptions of jurisdiction by a province’s courts (Hunt, at p. 325). Any improper assump-
tion of jurisdiction would be negated by the requirement that there be a “real and
substantial connection” (p. 328; see C. Emanuelli, Droit international privé québécois
(3rd ed. 2011), at p. 38).
[28] Since Hunt, the real and substantial connection test has been recognized as a
constitutional imperative in the application of the conflicts rules. It reflects the limits of
provincial legislative and judicial powers and has thus become more than a conflicts rule.
Its application was extended to the recognition and enforcement of foreign judgments in
Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416.
[29] But, in the common law, the nature of the conflicts rules that would accord with
the constitutional imperative has remained largely undeveloped in this Court’s jurispru-
dence. Although the real and substantial connection test has been consistently applied
both as a constitutional test and as a principle of private international law, since Hunt, the
Court has generally declined to articulate the content of the private international law rules
that would satisfy the test’s constitutional requirements or to develop a framework for
them. The Court has continued to affirm the relevance and importance of the test and
has even extended it to foreign judgments, but without attempting to elaborate upon the
rules it requires (see Beals, at paras. 23 and 28, per Major J.).
[30] So the test does exist. But what does it mean? What rules would satisfy its status
as a constitutional imperative? Two approaches are possible. One approach is to view the
test not only as a constitutional principle, but also as a conflicts rule in itself. If it is viewed
as a conflicts rule, its content would fall to be determined on a case-by-case basis by the
courts in decisions in which they would attempt to implement the objectives of order and
fairness in the legal system. The other approach is to accept that the test imposes consti-
tutional limits on provincial powers, but to seek to develop a system of connecting factors
and principles designed to make the resolution of conflict of laws issues more predictable
in order to reduce the scope of judicial discretion exercised in the context of each case.
Some academic commentators view the second approach as critical in order to maintain
order, efficiency and predictability in this area of the law. Indeed, the real and substantial
connection test itself has been criticized as being much too loose and unpredictable to
facilitate an orderly resolution of conflicts issues (see J.-G. Castel [“The Uncertainty Factor
in Canadian Private International Law” (2007) 52 McGill LJ 555)]; J. Blom and E. Edinger,
“The Chimera of the Real and Substantial Connection Test” (2005), 38 U.B.C. L. Rev. 373).
[31] Thus, in the course of this review, we should remain mindful of the distinction
between the real and substantial connection test as a constitutional principle and the same
test as the organizing principle of the law of conflicts. With respect to the constitutional
principle, the territorial limits on provincial legislative competence and on the authority
of the courts of the provinces derive from the text of s. 92 of the Constitution Act, 1867.
These limits are, in essence, concerned with the legitimate exercise of state power, be it
legislative or adjudicative. The legitimate exercise of power rests, inter alia, upon the exist-
ence of an appropriate relationship or connection between the state and the persons who
are brought under its authority. The purpose of constitutionally imposed territorial limits
is to ensure the existence of the relationship or connection needed to confer legitimacy.
[32] As can be observed from the jurisprudence, in Canadian constitutional law, the
real and substantial connection test has given expression to the constitutionally imposed
territorial limits that underlie the requirement of legitimacy in the exercise of the state’s
power of adjudication. This test suggests that the connection between a state and a dispute
cannot be weak or hypothetical. A weak or hypothetical connection would cast doubt upon
the legitimacy of the exercise of state power over the persons affected by the dispute.
[33] The constitutionally imposed territorial limits on adjudicative jurisdiction are
related to, but distinct from, the real and substantial connection test as expressed in
conflicts rules. Conflicts rules include the rules that have been chosen for deciding when
jurisdiction can be assumed over a given dispute, what law will govern a dispute or how
an adjudicative decision from another jurisdiction will be recognized and enforced. The
constitutional territorial limits, on the other hand, are concerned with setting the outer
boundaries within which a variety of appropriate conflicts rules can be elaborated and
applied. The purpose of the constitutional principle is to ensure that specific conflicts
rules remain within these boundaries and, as a result, that they authorize the assumption
of jurisdiction only in circumstances representing a legitimate exercise of the state’s power
of adjudication.
[34] This case concerns the elaboration of the “real and substantial connection” test
as an appropriate common law conflicts rule for the assumption of jurisdiction. I leave
further elaboration of the content of the constitutional test for adjudicative jurisdiction
for a case in which a conflicts rule is challenged on the basis of inconsistency with con-
stitutionally imposed territorial limits. To be clear, however, the existence of a constitu-
tional test aimed at maintaining the constitutional limits on the powers of a province’s
legislature and courts does not mean that the rules of private international law must be
uniform across Canada. Legislatures and courts may adopt various solutions to meet the
constitutional requirements and the objectives of efficiency and fairness that underlie our
private international law system. Nor does this test’s existence mean that the connections
with the province must be the strongest ones possible or that they must all point in the
same direction.
Is the Ontario Class Proceedings Act, SO 1992, c 6 ultra vires as extraterritorial legislation in so
far as it makes provision for a national class of plaintiffs? Plaintiffs may opt out of the class,
but if they fail to opt out within the time allowed, the Act states that they are bound by any
decision of the Ontario court in the class action. In Wilson v Servier Canada Inc (2000), 50 OR
(3d) 219 (Sup Ct J), the notification expert estimated that, “with an expenditure of $410,800
and a properly targeted notice, effective notice would be given to approximately 77 per cent
of the putative class members.” Would other provinces be constitutionally required to rec-
ognize the Ontario judgment against a plaintiff who had not received notice and so had not
opted out? See Wilson, above; Carom v Bre-X Minerals Ltd (1999), 43 OR (3d) 441 (Gen Div); and
Nantais v Telectronics Proprietary (Canada) Ltd (1995), 127 DLR (4th) 552 (Ont Gen Div). The
issue was raised but not decided in Canada Post Corp v Lépine, 2009 SCC 16, [2009] 1 SCR 549,
304 DLR (4th) 539.
Does the concept of a real and substantial connection require the same nexus for all
conflicts and constitutional purposes? See Blom & Edinger. Has Van Breda answered that
question?
Are there any exceptions to the constitutional limitation on the jurisdiction of a provincial
superior court of a real and substantial connection? See Chevron Corp v Yaiguaje, 2015 SCC 42.

Blom, Joost & Elizabeth Edinger. “The Chimera of the Real and Substantial Connection Test”
(2005) 38 UBC L Rev 373.
Edinger, Elizabeth. “Club Resorts Ltd. v. Van Breda: Extraterritoriality Revisited” (2014) 55 Can
Bus LJ 263.
Edinger, Elizabeth & Vaughan Black. “A New Approach to Extraterritoriality: Unifund Assur-
ance Co. v. I.C.B.C.” (2004) 40 Can Bus LJ 161.
McKee, S Gordon & Jeff Galway. “Constitutional Considerations Concerning Class Actions”
[2001] Spec Lect LSUC 27.
Pepa, Stevan. “Extraterritoriality and the Supreme Court’s Assertion of the Economic Consti-
tution” (2001) 34 Can Bus LJ 231.
Watson, Gary D & Frank Au. “Constitutional Limits on Service Ex Juris: Unanswered Questions
from Morguard” (2000) 23 Adv Q 167.
CHAPTER FOUR
Public Policy
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
II. Public Policy and the Enforcement of Foreign Judgments and Awards . . . . . . . . . . . . . 66
A. Public Policy, Natural Justice, and Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
B. Attenuated Effect of Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
C. Public Policy as a Basis for the Reduction of Excessive Foreign
Damage Awards? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
D. Availability of the Public Policy Defence in the Interprovincial Context? . . . . . . 87
III. Public Policy and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
B. Overriding Mandatory Rules of the Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
C. Overriding Mandatory Rules of Another Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
D. Contractual Choice of Law Clauses and Protection of the Weaker Party . . . . . . 101
E. Public Policy and Choice of Law in the Interprovincial Context . . . . . . . . . . . . . . . 102
IV. Public Policy and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
B. Overriding Mandatory Forum Rules and Contractual
Forum Selection Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
C. Public Policy and Jurisdiction in Marriage Dissolution Proceedings . . . . . . . . . . 105
V. Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
A. Jurisdiction and Choice of Law in Crime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
B. Recognition of Foreign Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
C. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
VI. Revenue Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
B. Indirect Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
C. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
D. Relaxation of the Tax Exclusion? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
E. International Tax Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
F. The Tax Exclusion in the Interprovincial Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
VII. Other Public Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
B. Nationalization, Expropriation, and Confiscation Laws . . . . . . . . . . . . . . . . . . . . . . . 134
VIII. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
65
66 Chapter 4 Public Policy
I. INTRODUCTION
States invariably reserve the discretion to invoke public policy (ordre public) to exclude or
limit the application of their general private international law rules. At the choice of law level,
public policy may operate to deny effect to an otherwise applicable foreign rule either
because the application of that rule would derogate from fundamental forum values or
because a mandatory policy of forum law is interpreted as intended to override the foreign
rule. Public policy also provides a defence to the recognition and enforcement of foreign
awards and judgments rendered on the basis of a law that offends fundamental forum
public policy; otherwise forum public policy could be thwarted indirectly. Forum public
policy may also play a role at the jurisdictional level—for example, in determining whether
a court should assume or retain jurisdiction.
It bears emphasis from the outset that the concept of public policy employed in private
international law is not co-extensive with domestic public policy. If every rule of domestic
public order extended to cases involving parties or activities with connections to multiple
states, the raison d’être for private international law would be undermined. As Carter
observes (at 2):
Public policy should not be invoked in private international law merely because it could, or
would, be invoked in the forum if the same facts had been presented in a purely domestic
context. … The automatic injection of standards applicable in a domestic situation into a trans-
actional situation may be seen at best as an exercise in mechanical jurisprudence, and at worst
as blatant judicial chauvinism.
The usual operation of private international law rules is suspended altogether in the case
of claims and judgments based on foreign revenue and penal laws. These exceptions can be
viewed as an a priori expression of the public policy doctrine designed to preserve sover-
eignty in areas of the law that self-evidently relate to a state’s fundamental social and eco-
nomic public policy and security. There is also said to be a more general a priori exception
for claims and judgments based on foreign “sovereign” or “public” rights but the scope of
this “other public law” exception is vague and its added value is unclear.
This chapter addresses the operation of the general public policy doctrine in the areas of
enforcement of foreign judgments, choice of law, and jurisdiction. It then examines the
scope of the specific penal, revenue, and “other public law” exceptions.
II. PUBLIC POLICY AND THE ENFORCEMENT OF FOREIGN

JUDGMENTS AND AWARDS
A. Public Policy, Natural Justice, and Fraud
The following decision offers an excellent introduction to the operation of the public policy
doctrine as a defence to the recognition and enforcement of foreign judgments and awards
and its relationship to the natural justice defence. The notes that follow also address the
defence of fraud.
II. Public Policy and the Enforcement of Foreign Judgments and Awards 67
United States of America v Ivey

(1995), 26 OR (3d) 533 (Gen Div), aff ’d (1996), 30 OR (3d) 370 (CA)
[The United States of America sought to enforce two money judgments it had obtained
in the United States District Court for the Eastern District of Michigan. The judgments
ordered the Ontario defendants to pay the cost of remedial measures undertaken by the
United States Environmental Protection Agency (EPA) in relation to a waste disposal
operation in Michigan conducted by a Michigan corporation—Liquid Disposal Inc (LDI)—
between 1969 and 1982. The judgments were obtained under the Comprehensive Environ-
mental Response, Compensation and Liability Act 1980, 42 USC s 9607(a) (CERCLA).
CERCLA authorizes the recovery of environmental cleanup costs through civil proceed-
ings in the United States district courts. Defences are strictly limited to acts of God, acts
of war, or acts or omissions of third parties in certain narrowly defined circumstances.
Liability is imposed on a variety of parties deemed by the legislation to be responsible for
the contamination. These include the owner or operator of a facility as well as persons
who arrange for the disposal of hazardous substances at the facility. “Owner or operator”
has been interpreted by the United States courts to include individuals or corporations
who exercise control even if title to the site is held by a distinct corporation. Although
LDI—the operator of the Michigan site—was a Michigan corporation, the defendant Ivey,
an Ontario resident, had a controlling interest in LDI and oversaw its management and
operations between 1974 and 1982. The defendant Maziv, an Ontario corporation, was
the parent of LDI and held 80 percent of LDI’s shares. The defendant Ineco, also an
Ontario corporation, acquired the shares Maziv held in LDI in December 1986, a term
of the transfer being that Ineco assumed the liabilities of Maziv. Ivey was the president
and chief executive officer of Ineco and was the president, general manager, and a director
of Maziv from 1961 to 1986. The Ontario defendants were served ex juris, and did not
defend the CERCLA actions on the merits. In the proceedings in Ontario to enforce the
default and summary judgments obtained against them, they pleaded four defences:
(1) the United States District Court lacked sufficient personal jurisdiction over the defend-
ants to support enforcement of its judgments in Ontario; (2) the judgments were based
on the “penal, revenue or other public law” of a foreign state; (3) the judgments were
obtained in violation of the rules of natural justice; and (4) enforcement of the judgments
would be contrary to Ontario public policy. On the jurisdictional issue, Sharpe J con-
cluded that the defendants’ ownership and active engagement in the waste disposal
business in Michigan, and the locus of the CERCLA cause of action there, constituted a
sufficient “real and substantial connection” to support the exercise of personal jurisdiction
over the Ontario defendants under Morguard Investments Ltd v De Savoye, [1990] 3 SCR
1077. He then proceeded to address the balance of the defendants’ arguments. The excerpt
below sets out his reasoning in relation to the defendant’s argument that recognition of
the judgment would be offensive to Ontario standards of natural justice and Ontario
public policy.]
SHARPE J:
Natural Justice
The defendants submit that the judgments sought to be enforced were obtained in a
manner which violates the principles of natural justice. No issue is taken with the proceed-
ings in the District Court, but it is submitted that the judgments are tainted by what went
before. Before the details of the arguments presented by the defendants on the natural
justice defence are considered, it should be noted that the whole foundation for the
defendant’s position is questionable. The natural justice defence as it is usually understood
relates to the proceedings in the court which rendered the judgment sought to be
enforced: see Dicey and Morris, [The Conflict of Laws, 12th ed (1993)] at p. 514 et seq.
While there is no doubt that the defence exists in theory, it is rarely applied in practice
and I am aware of no case which holds that it extends to matters which occurred prior to
the proceedings in the foreign court as contended here. Accordingly, it is far from clear
to me that a defence would be made out even if I were to accept the arguments of the
defendants that the pre-District Court proceedings before Judge Daner and under
C.E.R.C.L.A. violated the principles of natural justice.
The defendants submit that the actions of Judge Daner in the nuisance action, com-
bined with the bankruptcy proceedings, effectively deprived them of any opportunity to
respond to the environmental problems at the L.D.I. site. In the words of their expert in
foreign law, Prof. Abrams, “to have made the defendants liable in reliance on an ability to
control test and deny them the benefits of a lack of control defence is a skewed and unfair
application of the statute.” It is further contended that liability was effectively and more
or less conclusively determined on the basis of the regulatory procedures imposed by
C.E.R.C.L.A., and that those procedures are contrary to the principles of natural justice.
I will deal first with the proceedings before Judge Daner in the Circuit court. In my
view, the defendants are precluded in this action from attacking the validity of those
proceedings. There is no question but that the Circuit court had jurisdiction with respect
to the alleged nuisance at the L.D.I. site. L.D.I. and Ivey participated in those proceedings
and lost. Whether Judge Daner was right or wrong was a matter for the Michigan courts.
As noted, L.D.I. was refused leave to appeal the temporary restraining order. The law is
clear that the principles of res judicata and issue estoppel apply to proceedings before
foreign courts: Dicey and Morris, supra at p. 499; Castel [Canadian Conflict of Laws, 3rd
ed (Markham: Butterworths, 1994)], at p. 268-9. There is, in my view, no legal basis to
support the suggestion that Judge Daner’s orders should be reconsidered here.
In any event, if there is anything to the argument that the imposition of liability despite
the lack of control resulting from Judge Daner’s order resulted in “a skewed and unfair
application of the statute,” that was surely a matter for Judge Zatkoff in the District Court.
It is clear that Judge Zatkoff carefully considered the application of the statute and the
liability of Ivey before rendering judgment. The defendants had the opportunity to argue
the point before him but they chose not to do so. Moreover, even if it could be shown that
Judge Zatkoff erred in holding the defendants liable (and I do not suggest that he did),
that would not afford a defence to enforcement of the judgments. Error of law on the part
of the foreign court is plainly not a ground for refusing enforcement: Castel, supra at
p. 269; Dicey and Morris, supra at p. 514.
The defendants focused much of their argument before me on the details of
C.E.R.C.L.A. and its application and offered a detailed comparison between C.E.R.C.L.A.
and the Ontario Environmental Protection Act, R.S.O. 1990, c. E-19 (“E.P.A.”). It is the
defendants’ submission that the procedural regime imposed by C.E.R.C.L.A. is so wanting
in procedural protections as to render the regulatory proceedings leading up [to] the
judgments contrary to natural justice.
The alleged procedural shortcomings in the C.E.R.C.L.A. regime may be summarized
as follows:
(1) The right to be heard in opposition to the E.P.A.’s plans for removal and remedial
actions is limited.
(2) The statute precludes judicial review of E.P.A. actions prior to the implementation
of removal and remedial actions.
(3) Defences to cost recovery actions are severely limited by s. 107 with the result that
a form of strict liability is imposed.
(4) The United States enjoys the benefit of a relaxed burden of proof in cost recovery
actions. As plaintiff, the United States bears the “burden of production” or going
forward with evidence, but the defendant bears the burden of persuasion.
In my view, these contentions do not establish a defence to enforcement of the District
Court judgments. With respect to the right to be heard in opposition to E.P.A.’s removal
and remedial plan, the statute does accord P.R.P.s [parties with potential responsibility
under the statute] a right to comment. While this may fall well short of a full right of
hearing, the statute is designed to deal with situations of urgency requiring immediate
attention and, within the limits those exigencies impose, it does afford a limited right to
present one’s case. Moreover, as the plaintiff contended, the arguments of the defendants
are abstract and academic. Although invited to do so, the defendants did not respond to
E.P.A.’s proposed plan. While the rights accorded to them at that stage may have been
limited, it is difficult to see how, if the defendants failed to avail themselves of the pro-
cedural protections actually afforded by C.E.R.C.L.A., they now can complain that they
should have been given added rights of participation, particularly as there has been no
indication that they had a case to present that might have made a difference.
While it is true that the statute precludes judicial review prior to implementation of
the remedial plan, the statute also provides that any matter that could have been raised
by way of judicial review may be raised by way of defence in the cost recovery action. The
rationale for this arrangement, as explained by affidavit evidence regarding foreign law,
is that pre-enforcement judicial review could significantly delay remedial steps and
increase response costs. It has been argued in the United States that the preclusion of
judicial review violates Fifth Amendment due process rights. This argument has been
rejected given the right to raise judicial review arguments by way of defence in the cost
recovery action: J.V. Peters & Co. v. Environmental Protection Agency, 767 F.2d 263, 266
(6th Cir. 1985). In my view, the provision in the statute permitting a party sued in a cost
recovery action to raise as a defence an argument that could have formed the basis for
judicial review fully satisfies the requirements of natural justice. In any event, the defend-
ants have not advanced any grounds for judicial review and there is nothing to indicate
that they have in fact been prejudiced by the preclusion of pre-enforcement judicial review.
Acceptance of the argument that the imposition of strict liability or a relaxed burden
of proof should render American judgments unenforceable in Canada would have far-
reaching consequences. Rules of liability and the burden of proof are preeminently matters
for the law of the foreign jurisdiction. I am aware of no authority for the proposition that
a judgment rendered on the basis of a strict form of statutory liability will not be enforced.
Moreover, as will be seen below, the Ontario E.P.A. imposes similarly strict liability in
certain situations.
Public Policy
The defendants submit that given the severity of the C.E.R.C.L.A. liability regime, both
procedurally and substantively, it would be contrary to public policy for this court to
enforce the judgments. This argument was supported by a comparison of C.E.R.C.L.A.
with O.E.P.A. which, the defendants allege, does not suffer the same defects as C.E.R.C.L.A.
In my view, this argument fails for a number of reasons. First, most, if not all of the
arguments advanced here have already been dealt with under the natural justice defence.
Second, while the public policy defence exists in theory, it has rarely been applied. Prof.
Castel observes that this defence has “very seldom” been invoked and that it “has been
construed narrowly”: supra at p. 164. There is no authority of which I have been made
aware that would allow it to be applied in the present case. It is plainly not the case that
enforcement will be refused on the grounds that the judgment sought to be enforced
depends upon a law or basis of liability more strict or severe than the law of the forum.
As noted by Lacourcière JA in Boardwalk Regency Corp. v. Maalouf (1992), 6 O.R. (3d)
737 at p. 748, 88 D.L.R. (4th) 612 at p. 616 (C.A.): “Where the foreign law is applicable,
Canadian courts will generally apply that law even if the result may be contrary to domes-
tic law.” In the same case, Carthy J.A. emphasized “the care which courts must exercise
in relying upon public policy as a ground for refusing enforcement.” He went on to state
(at p. 743 O.R., p. 622 D.L.R.):
The common ground of all expressed reasons for imposing the doctrine of public policy is
essential morality. This must be more than the morality of some persons and must run
through the fabric of society to the extent that it is not consonant with our system of justice
and general moral outlook to countenance the conduct, no matter how legal it may have
been where it occurred.
Castel puts it as follows: (supra at p. 164) “It is not enough to deny recognition of the claim
that the local law on the same point differs from the foreign law. Fundamental values must
be at stake.”
The comparison between C.E.R.C.L.A. and E.P.A. does not, in my view, advance the
case of the defendants. It is my view that the similarities between the two regimes are
more striking than the differences. In particular, the plaintiff cites the “spills” provisions
of E.P.A. where provision is made for emergency response by way of Ministerial order
without a hearing and the imposition of liability for cleanup costs incurred. While the
circumstances of the case at bar may well not have fallen into the “spills” category, it cannot
be overlooked that the Ontario legislature has adopted measures very similar to
C.E.R.C.L.A. to deal with environmental hazards. In light of that, it would, in my view,
be inappropriate for this court to refuse enforcement on the grounds of public policy. If
anything, the comparison with O.E.P.A. significantly strengthens the case for enforcement.
It demonstrates that the Ontario legislature has deemed it necessary to depart from the
traditional common law and establish a regulatory regime which includes drastic powers
and the imposition of statutory liability on those responsible for the creation of environ-
mental hazards. These measures include personal liability of corporate officers and dir-
ectors, Ministry sponsored cleanup, and liability for costs of clean-up. While the measures
chosen by our legislature do not correspond precisely with those chosen by the Congress
of the United States, they are sufficiently similar in nature to defeat any possible applica-
tion of the public policy defence.
NOTES
1. Distinction between the public policy and natural justice defences. As United States of
America v Ivey illustrates, public policy and natural justice are distinct defences to the recog-
nition of a foreign judgment in the common law jurisprudence. The natural justice defence
is concerned with the fairness of the procedure by which the foreign judgment was obtained
whereas the public policy defence relates to the substantive character of the foreign law on
which that judgment was based. Nonetheless, like the public policy defence, the natural
justice defence requires a fundamental deviation from forum norms and values; it is insuffi-
cient to show simply that the forum and the foreign procedures diverge: see Beals v Sal-
danha, 2003 SCC 72, [2003] 3 SCR 416, 234 DLR (4th) 1 (reproduced in Chapter 8); see also
Society of Lloyd’s v Meinzer (2001), 55 OR (3d) 688 (CA) at 706:
Whether one refers to a denial of natural justice as a procedural concept only, or one which may
encompass a procedural irregularity that leads to a result that is contrary to our notions of
substantive justice, the real issue is whether our courts are unable to sanction enforcement of
judgments in Ontario when there has been fundamental unfairness in the proceedings result-
ing in the judgments.
Article 3155(3) of the Civil Code of Quebec similarly formulates a procedural justice defence to
the enforcement of foreign decisions, distinct from the general public order defence set out
in art 3155(5). As in the common law jurisprudence, the procedural justice defence under art
3155(3) is available only where the foreign decision “was rendered in contravention of the
fundamental principles of procedure” (emphasis added).
Not all laws or legal systems treat procedural justice and public policy as distinct
defences. For example, art V of the United Nations Convention on the Recognition and Enforce-
ment of Foreign Arbitral Awards (New York, 1958) states that the recognition and enforcement
of an arbitral award may be refused if it would be “contrary to the public policy” of the coun-
try in which recognition and enforcement is sought. The commentary on the meaning of
“public policy” in the convention (see Report of the United Nations Commission on Inter-
national Trade Law, 18th Sess, UN Doc A/40/17 (3-21 June 1985)) confirms that it includes
fundamental principles of procedural justice:
It was understood that the term “public policy,” which was used in the 1958 New York Conven-
tion and many other treaties, covered fundamental principles of law and justice in substantive
as well as procedural respects. Thus, instances such as corruption, bribery or fraud and similar
serious cases would constitute a ground for setting aside. It was noted, in that connection, that
the wording “the award is in conflict with the public policy of this State” was not to be inter-
preted as excluding instances or events relating to the manner in which an award was reached.
In the European Community, the Brussels I Regulation (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)) incorporates the public
policy defence and expressly addresses one aspect of procedural justice. Article 45(1)(b)
states that the recognition or enforcement of a judgment rendered in default of appearance
may be refused if the defendant was not served with the document instituting the proceed-
ings in sufficient time and in such a way as to enable the defendant to arrange for his or her
defence. The defence is unavailable, however, if “the defendant failed to commence pro-
ceedings to challenge the judgment when it was possible for him to do so.” The quoted
wording was added to the Regulation when it was recast in 2012 to reflect a European Court
of Justice decision to this effect: see Meletis Apostolides v David Charles Orams & Linda Eliza-
beth Orams, C-420/07 (28 April 2009) (ECJ). In so holding, the court observed that the Brussels
I Regulation does not—unlike art 27(2) of the preceding Brussels Convention—necessarily
require that the document instituting the proceedings be duly served but rather “that the
rights of the defence [be] effectively respected” (at para 75).
The European Court of Justice has confirmed that aspects of procedural justice outside
art 34(2)—notably, those relating to the fair conduct of the proceedings after proper ser-
vice—may be raised under the public policy rubric in art 34(1): see Marco Gambazzi v
DaimlerChrysler Canada Inc and CIBC Mellon Trust Company, C-394/07 (2 April 2009) (ECJ).
2. Distinction between the public policy and fraud defences. Comparisons of the scope of
the public policy exception among different legal systems or traditions are further compli-
cated by the common law treatment of fraud as a separate defence to the enforcement of
foreign judgments, distinct from both the public policy and procedural justice defences. In
Beals v Saldanha, 2003 3 SCR 416, [2003] 3 SCR 416, 234 DLR (4th) 1 (reproduced in Chapter 8)
the Supreme Court of Canada reconfirmed that “extrinsic fraud”—that is, fraud going to the
jurisdiction of the issuing court or the kind of fraud that misleads the court into believing
that it has jurisdiction—operates as a defence to the operation of a foreign judgment.
“Extrinsic fraud” seems indistinguishable from procedural justice and would be dealt with
under this rubric in non-common law jurisdictions. The court also reconfirmed that “intrinsic
fraud”—that is, fraud that goes to the merits of the claim—is not, in general, a defence to
enforcement. Rather, the complainant’s proper course is to pursue an appeal in the state
where the judgment originated. This was made subject to an exception where the defence
to enforcement is based on new evidence of fraud that emerges between the time of the
judgment and the subsequent attempt at enforcement. In principle, this exception should
be available only if the court in the originating state would not accept the same evidence in
an application by the defendant to annul the original judgment. However, the court did not
express this qualification.
In Beals, Justice LeBel (dissenting, but not on this point) acknowledged the overlap
between the public policy and procedural justice and fraud defences but preferred to retain
their separate conceptual treatment (at para 221):
In my view, the better approach is to continue to reserve the public policy defence for cases
where the objection is to the law of the foreign forum, rather than the way the law was applied,
or the size of the award per se. In other words, this defence should continue to be, as the trial
judge put it, “directed at the concept of repugnant laws, not repugnant facts” … . Public policy
is potentially an expansive enough concept to subsume the other two defences; it is, of course,
contrary to public policy in a broad sense to enforce a judgment that was fraudulently or
unfairly obtained. But it is useful to maintain an analytical distinction between the three
defences. Furthermore, the defence of public policy has long been associated with condemna-
tion of the foreign jurisdiction’s law. To extend it to cover situations where there is nothing
objectionable about the foreign law but, rather, a defect in the way the law was applied might
send the wrong message, one that conflicts with the norms of international cooperation and
respect for other legal systems underlying the doctrine of comity.
B. Attenuated Effect of Public Policy
Civil Code of Quebec

CQLR c C-1991
3155. A decision rendered outside Québec is recognized and, where applicable,

declared enforceable by the Québec authority, except in the following cases:
• • •
(5) the outcome of a foreign decision is manifestly inconsistent with public order
as understood in international relations.
NOTE
In specifying that it is the outcome of recognizing or enforcing the foreign decision that must
be manifestly inconsistent with public order, the wording of art 3155(5) reflects what was
referred to in the Introduction to this chapter as the attenuated effect of public policy in the
private international law sphere. As Blom (2003) observes (at 374-75):
The same foreign rule may be allowed to operate in some circumstances but not in others,
because its specific impact may differ from one factual context to another. Often, for example,
a status or right definitively acquired abroad will be recognized although the foreign rule that
underlies the status or right would not be given effect if the issue were its direct application in
the forum country.
A good example is offered by the decision in Droit de la famille—151172, 2015 QCCS 2308.
The case involved the recognition of a Pennsylvania judgment declaring a same-sex married
couple domiciled in Quebec to be the legal parents of a child born in Pennsylvania through
a surrogate mother domiciled in that state. The couple had applied to the Quebec Superior
Court for a declaration that they were the legal parents of the child and an order for the
Quebec Registrar of Civil Status to insert into the register the birth certificate issued for the
child by the Pennsylvania authorities. The requested relief was granted but the attorney
general of Quebec and the registrar filed a motion for the revocation of the judgment on the
basis, among others, that the public order exception in art 3155(5) of the Civil Code of Quebec
precluded recognition of the Pennsylvania judgment. Specifically, it was argued that
because art 541 of the Code nullifies any “agreement whereby a woman undertakes to pro-
create or carry a child for another person,” recognizing the Pennsylvania judgment would
have the effect of endorsing a mode of filiation that was not recognized for public order
reasons by the internal law of Quebec. In dismissing the motion, Justice Lacoursière stated
(unofficial English translation):
[112] Article 3155(5) C.C.Q. clearly specifies that it is the outcome of the foreign decision that
must be manifestly inconsistent with public order as understood in international relations. What
is the outcome in this case? The outcome of the Judgment and the resulting birth certificate is
the recognition of the filiation of two men with their child. Not only is this result not contrary to
public order as understood in international relations, it is also not contrary to domestic public
order in Quebec, as the Civil Code of Québec specifically provides that a child may have two
parents of the same sex.
• • •
[121] As the Court of Appeal pointed out in its discussion of the absolute nullity of surrogacy
agreements in Quebec [in Adoption—1445, 2014 QCCA 1162]:
[TRANSLATION]
[59] Surrogacy contracts are absolutely null and contravene a rule that the legislature
has determined is a matter of directive public order. The consequences of such a choice
are serious, and the contract may in no case be binding. But that does not mean that all of
its effects, even those that are indirect or affect third parties, must ipso facto be suppressed by
the law. Here, the child is a third party. He is more than an object. [Emphasis added.]
On public policy in the context of inter-country surrogacy agreements, see further Wells-
Greco & Dawson.
Society of Lloyd’s v Meinzer

(2001), 55 OR (3d) 699, 210 DLR (4th) 519 (CA)
(footnotes incorporated into text)
[The appellants were Ontario residents who became investors (“the Names”) in the insur-
ance bazaar managed by Lloyd’s in London. Although their investment was solicited in
Ontario, they were required to travel to London to conclude the actual contracts. The
relevant contracts contained choice of forum and choice of law clauses stipulating English
courts and English law. The investment structure exposed the Names to potentially
unlimited liability for the insurance claims they were required to underwrite, which was
put to the test as the result of a series of massive claims stemming from asbestos and other
pollution related litigation in the United States. Facing financial ruin, the Ontario Names
sued in Ontario to have their contracts rescinded on the basis of fraud as well as breach
of the prospectus and other disclosure requirements of the Securities Act, RSO 1990, c S.5.
However, the Ontario proceeding was stayed on the basis of the choice of jurisdiction
clause in the Names’ contracts with Lloyd’s in favour of England, and the fact that England
was found to be forum conveniens (Ash v Lloyd’s Corp (1992), 9 OR (3d) 755 (CA), aff ’g
(1991), 6 OR (3d) 235 (Gen Div)). To ensure its survival (and to ensure the viability of
the international insurance market), Lloyd’s approved a plan pursuant to its private law-
making authority under English law that in essence forced the Names to finance a reinsur-
ance scheme (through a company called Equitas) to cover their liabilities for the insurance
losses they had underwritten. Only when their payment obligations under this reinsurance
scheme were paid were the Names to be entitled to sue for any claims they might have
against Lloyd’s or its affiliates in fraud or otherwise. In effect, the scheme required the
Names to subordinate their claims to those of the third-party insureds. The fraud and
Securities Act defences were raised unsuccessfully by the Names in the English proceedings
brought against them by Lloyd’s; in these actions, the English courts further ruled that
the Names were obligated to support the reinsurance scheme, and judgments were
awarded against the various Names for their payment obligations under that scheme.
Lloyd’s applied to have the English judgments recognized in Ontario under the Reciprocal
Enforcement of Judgments (UK) Act, RSO 1990, c R.6. The Names argued that enforcement
should be denied on the basis that recognition of the English judgments would indirectly
violate Ontario public policy as expressed in the Securities Act requirements mandating
minimum disclosure requirements in respect of investments solicited in Ontario capital
markets. At trial, Swinton J rejected this defence and her decision was affirmed on appeal.]
FELDMAN JA (for the court):
Issue 3: Public Policy

[46] The third ground on which the appellants attack the registration of the UK judg-
ments for enforcement in Ontario is that enforcement would be contrary to the public
policy of Ontario. The appellants say that the underlying agreements which formed the
basis of these judgments were illegal and unenforceable at the behest of Lloyd’s because
Lloyd’s did not file a prospectus as required by s. 53(1) of the Ontario Securities Act.
[47] That Lloyd’s breached the Securities Act by not filing a prospectus before trading
in securities with Ontario Names is an assumed fact for the purpose of the application
and the appeal. Article IV(1)(e) of the Reciprocal Enforcement of Judgments (UK) Act
provides that:
1. Registration of a judgment shall be refused or set aside if
• • •
(e) enforcement of the judgment would be contrary to public policy in the territory
of the registering court;
The appellants’ submission is that where the respondent traded in securities in Ontario
in breach of statutory requirements, so that had the respondent brought its actions in
Ontario, it could not have succeeded, it must be contrary to the public policy of the prov-
ince to enforce the judgments the respondent was able to obtain in the U.K.
[48] Counsel for the appellants acknowledges the development of the jurisprudence
in this area which provides, in various formulations, that the basis of the judgment sought
to be enforced must be contrary to essential justice or morality, or the most basic and
fundamental values of the registering jurisdiction. Examples cited are fraud, bribery or
other coercion, prostitution and, at one time (before this court’s decision in Boardwalk
Regency Corp. v. Maalouf (1992), 6 O.R. (3d) 737, 88 D.L.R. (4th) 612 (C.A.)), gambling.
Counsel’s argument is that the concept of what is contrary to our public policy must be
viewed more broadly than on the narrow basis of purely moral issues, and that something
as fundamental as the legislative policy behind the conditions imposed by the Securities
Act for trading in securities to and by the public is a most important reflection of the
public policy of this province.
[49] The general approach of Canadian courts to the definition and application of
public policy is discussed by Castel in Canadian Conflict of Laws [4th ed (Toronto: But-
terworths, 1997) at 171-72]:
It is almost impossible to give a precise definition of public policy; nor can a general statement
be made about its scope. Evidence of public policy can be found in the total body of the
constitutional and statute law as well as the case law of the forum, since it will reflect the
local sense of justice and public welfare. The fact that the lex fori on the same point differs
from the foreign law is not a sufficient ground for denying recognition to the foreign claim.
Fundamental values must be at stake.
In the conflict of laws, public policy must connote more than local policy as regards
internal affairs. It is true that internal and external public policies stem from the national
policy of the forum but they differ in many material respects. Rules affecting public policy
and public morals in the internal legal sphere need not always have the same character in
the external sphere. Also, there should be a difference of intensity in the application of the
notion of public policy depending on whether the court is asked to recognize a foreign right
or legal relationship, or to create or enforce one based on some foreign law. Public policy is
relative and in conflict of laws cases it represents a national policy operating on the inter-
national level.
If foreign law is to be refused any effect on public policy grounds, it must violate some
fundamental principle of justice, some prevalent conception of good morals, or some deep-
rooted tradition of the forum. …
• • •
In the common law provinces of Canada very seldom has public policy been invoked in
the courts with success, as this exception has been construed narrowly. …
[Footnotes omitted.]
[50] The leading case in Ontario on the meaning of “public policy” in this context is
the decision of this court in Boardwalk Regency v. Maalouf, supra. In that case, the defend-
ant had gambled on credit at the plaintiff ’s casino in New Jersey and had written and
dishonoured a cheque for $43,000 in payment of the debt. He then allowed default judg-
ment to go against him in New Jersey. When the casino sought to enforce the judgment
in Ontario, the defendant argued that it would be contrary to the public policy reflected
in the Gaming Act, R.S.O. 1980, c. 183, which made wagering contracts void, consideration
for gaming illegal and contracts unenforceable. Carthy J.A. for the majority framed the
issue as follows [at 742 OR]:
The legal issue to be addressed is whether the language of the Gaming Act, apart from its
direct impact on domestic contracts, is to be taken as an expression by the legislature which
bears the mantle of public policy to the point of making it offensive to participate in enforce-
ment of the foreign judgment. It cannot be every statutory statement or prohibition which
raises this defence or little would be left of the principle of comity underlying conflict of laws
jurisprudence.
In considering this issue, Carthy J.A. preferred the narrow construction of public policy,
quoting with approval the speech of Lord Atkin in Fender v. St. John-Mildmay, [1938]
A.C. 1, [1937] 3 All E.R. 402 (H.L.) at pp. 11-12, where he said that “… the doctrine [of
public policy] should only be invoked in clear cases in which the harm to the public is
substantially incontestable, and does not depend upon the idiosyncratic inferences of a
few judicial minds.”
[51] Carthy J.A. concluded that gambling under licence could be legal in Ontario and
was not the type of morally repugnant activity such as corruption of children that is
tainted by immorality in a way which mandated refusal of enforcement. Lacourcière J.A.
concurred with Carthy J.A., but added that because gambling was legal and regulated in
New Jersey, it would not offend the Canadian general public to enforce a debt legally
incurred in such a jurisdiction.
[52] Arbour J.A. dissented. She expressed the view that public policy should not be
viewed solely in moral terms. However, she was not prepared to resolve the morality
debate concerning gambling because in her view, the case turned on the fact that the
Criminal Code, R.S.C. 1985, c. C-46, prohibits keeping a common gaming house and the
commercial gambling activities of the casino could not have been licensed and carried
on legally in Ontario. She concluded [at 758 OR]:
It would not be sound public policy, in my opinion, to permit recovery of a debt incurred
outside Ontario under circumstances that would be criminal under the same circumstances
in Ontario, and yet to deny recovery for gambling debts legally incurred here. To decide
otherwise, in my opinion, is to force Ontario public policy, as expressed in part in the Crim-
inal Code, to yield to foreign law.
[53] The issue of “public policy” tends to arise in two conflicts of laws contexts: one
is the enforcement of foreign judgments; the other is the application of foreign law in an
action tried in a Canadian court where the foreign law may be contrary to the public
policy of the Canadian forum.
[54] Canadian courts in other cases where either the foreign law or the judgment to
be enforced has conflicted with a statute of the forum, have come to the same conclusion
and result as did the majority in Boardwalk Regency Corp. v. Maalouf, supra. In Sigurdson
v. Farrow (1981), 121 D.L.R. (3d) 183, 15 Alta. L.R. (2d) 180 (Q.B.) an Alberta statute
prohibited actions on the covenant of a mortgage. The mortgaged land was in British
Columbia and the mortgage was made in Ontario. After default, an action on the covenant
was brought in Alberta. The court considered that both the land and the mortgage were
outside the province and concluded that the policy of the Alberta statute did not engage
“… a principle of morality or justice which commands almost universal recognition … ,”
citing from Dicey and Morris, The Conflict of Laws, 9th ed. (1973).
[55] Sigurdson v. Farrow, supra followed Canadian Acceptance Corp. Ltd. v. Matte
(1957), 9 D.L.R. (2d) 304 (Sask. C.A.), where Saskatchewan law prohibited action on a
conditional sale deficiency while the Manitoba law (where the contract was made) did
not, and National Surety Co. v. Larsen, [1929] 4 D.L.R. 918, 42 B.C.R. 1 (C.A.), where the
B.C. court was prepared to apply the law of the state of Washington, which allowed
indemnification of loss on bail bond, while British Columbia law prohibited it. Both the
offence and the bail proceedings had taken place in Washington. The court concluded
again that there was no violation of an essential principle of justice nor would permitting
the appellant to prosecute the action be “… inherently repugnant to moral and public
interests …” (p 943 D.L.R.).
[56] Block Bros. Realty Ltd. v. Mollard and Detra Holdings Ltd. (1981), 122 D.L.R. (3d)
323, 27 B.C.L.R. 17 (C.A.) was another action in British Columbia to enforce a contract
made and performed in another jurisdiction, in that case, Alberta. The contract was for
real estate commission; however, the land that was sold was in British Columbia. British
Columbia law required that real estate agents be licensed in British Columbia as a pre-
condition to an action to recover commission. After concluding that Alberta rather than
British Columbia substantive law applied, the court considered whether recognizing the
contract would be contrary to the public policy of British Columbia in light of the statu-
tory prohibition. Again, the court concluded that this was not an issue which engaged an
essential public or moral interest. In other words, this particular public policy of the
province, as declared in the statute, reflected a legislative choice for the ordering of affairs
involving real estate transactions and agents, but did not engage the fundamental values
of British Columbia society.
[57] A somewhat more tentative approach was taken by Brennan J. in Kidron v. Grean
(1996), 48 O.R. (3d) 775 (Gen. Div.), where the plaintiff was seeking enforcement of a
California judgment which included an award of $15 million for emotional distress. The
issue was whether such an award was contrary to the public policy of Ontario, on the basis
that it conflicted with the Supreme Court of Canada trilogy of decisions which placed a
cap on awards for pain and suffering and loss of amenities in certain circumstances
[Andrews v Grand & Toy Alberta Ltd, [1978] 2 SCR 229, 83 DLR (3d) 452; Thornton v
Prince George School District No 57, [1978] 2 SCR 267, 83 DLR (3d) 480; Arnold v Teno,
[1978] 2 SCR 287, 83 DLR (3d) 609]. Brennan J. refused to grant summary judgment on
the California judgment, but instead ordered a trial on the public policy issue. Brennan
J.’s concern was similar to that of the English Court of Appeal in Adams v. Cape Industries
plc [[1991] 1 All ER 929 (CA)], referred to earlier, where the court refused to give effect
to the Texas court’s damages award on the basis that it conflicted with both procedural
and substantive justice under English law. Whether the approach taken in these cases,
based as it appears to be on a conflict with the local substantive law per se, is consistent
with the weight of authority on the proper approach to public policy, need not be decided
in this case.
[58] Kidron v. Grean, supra, can be usefully contrasted with the decision of the British
Columbia Court of Appeal in Old North State Brewing Co. v. Newlands Services Inc. (1998),
23 C.P.C. (4th) 217, 58 B.C.L.R. (3d) 144 (C.A.), where the plaintiff was seeking enforcement
of a North Carolina judgment. The contract provided that the governing law was British
Columbia and that the parties would attorn to the British Columbia courts. However, the
plaintiff brought the action in North Carolina where the defendant did not attorn and the
North Carolina court applied its own law including an award of treble damages. The British
Columbia court granted the enforcement proceedings, holding that the jurisdiction clause
was not exclusive, that the North Carolina court could apply its own law where it had no
evidence that British Columbia law was different, and that an award of treble damages was
not contrary to “… the essential or moral interests of British Columbia …” The latter conclu-
sion was based on the analysis that because a federal statute gave the Attorney General
of Canada the power to declare treble damage awards unenforceable in certain anti-trust
cases, it follows that in other circumstances, such awards are enforceable.
[59] The public policy exemption was also denied in the enforcement action of United
States of America v. Ivey [(1996), 30 OR (3d) 370 (CA)]. The plaintiffs sought summary
judgment in their action in Ontario to enforce two Michigan judgments obtained under
the United States C.E.R.C.L.A. environmental protection regime. In granting the enforce-
ment judgment in Ontario, the court rejected the submission that enforcement would be
contrary to our public policy just because the provisions of the C.E.R.C.L.A. regime were
more onerous than under the Ontario Environmental Protection Act, R.S.O. 1990, c. [E.19].
[60] The review of the case law confirms that the public policy exemption is narrow,
when considered both in the context of applying foreign law in actions brought in Can-
adian jurisdictions, as well as in enforcing foreign judgments in Canadian provinces, and
therefore, it has rarely been applied. This is consistent with the trend expressed by the
Supreme Court of Canada in both Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R.
1077, 76 D.L.R. (4th) 256 and in Tolofson v. Jensen, [1994] 3 S.C.R. 1022, 120 D.L.R. (4th)
289; the two cases which have set the modern rule for both interprovincial recognition
of judgments of other provinces, and for the choice of law of the lex loci delicti for auto-
mobile accidents which have multi-provincial connections. 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. In both cases,
the role of the public policy concept was left, in effect, as a safety valve to prevent anoma-
lies. In Morguard Investments Ltd. v. De Savoye, supra, La Forest J. said that to alleviate
possible unfairness to a defendant sued out of his or her home province, the enforcing
court has the discretion not to recognize a judgment in conflict with the public policy of
that province.
[The majority in Beals v Saldanha, [2001] OJ No 2586 (CA), confirmed that the narrow
application of the public policy defence as set out in Boardwalk Regency v Maalouf, above,
is still the correct approach and it is consistent with Morguard Investments Ltd v De Savoye,
above.]
In Tolofson v. Jensen, supra, he noted that if a wrong would not be actionable in the forum
had it been committed there, that may be a factor to be weighed both when determining
forum non conveniens and when deciding whether entertaining the action would be
contrary to the public policy of the forum.
[61] Having confirmed that the trend of the jurisprudence is that the public policy
exemption is to be narrowly construed and rarely applied, the issue in this case is whether
to enforce judgments when the party seeking enforcement acknowledged breaching the
Ontario Securities Act prospectus requirement. Does this breach have the necessary moral
opprobrium traditionally required for the application of the public policy exemption? Or,
as counsel submitted, should the concept of our public policy be broadened to encompass
a breach of this nature?
[62] The legislative objective of the Securities Act has recently been reiterated by this
court in Quebec (Sa majeste du Chef) v. Ontario (Securities Commission) (1992), 10 O.R.
(3d) 577 at p. 590, 97 D.L.R. (4th) 144 (C.A.) where the court stated:
… the simple legislative objective involved in this appeal is regulation of the operation of
capital markets in Ontario for the protection of all who use them. This includes the protection
of persons and corporations dealing in Ontario markets whether or not they are resident in
Ontario.
[63] The fundamental importance of the prospectus in our jurisdiction for the orderly,
fair and reliable operation of our financial markets can be safely said to be undisputed.
As Henry J. stated in Jones v. F.H. Deacon Hodgson Inc. (1986), 56 O.R. (2d) 540 at p. 546,
31 D.L.R. (4th) 455 (H.C.J.):
There can be no question but that the filing of a prospectus and its acceptance by the com-
mission is fundamental to the protection of the investing public who are contemplating
purchase of the shares. …
[64] Furthermore, the same can be said of similar securities legislation in other juris-
dictions. This has been amply demonstrated by the judicial struggle in the numerous
actions in the United States (and elsewhere) involving Lloyd’s and the Names of the
particular jurisdictions to reconcile the importance of securities regulation laws to the
operation of local financial markets, with the international aspect of the Lloyd’s contrac-
tual arrangements with its Names from jurisdictions around the world [e.g. Bonny v
Society of Lloyd’s, 3 F3d 156 (7th Cir 1993); Roby v Corporation of Lloyd’s, 996 F2d 1353
(2nd Cir 1993); Allen v Lloyd’s of London, 94 F3d 923 (4th Cir 1996); Haynsworth v The
Corporation, 121 F3d 956 (5th Cir 1997); Richards v Lloyd’s of London, 135 F3d 1289 (9th
Cir 1998); Society of Lloyd’s v Grace, [2000] NY-QL 10604 (SC App Div), and The Society
of Lloyd’s v Ashenden (unreported), no 98C5335 (US Dist Ct Ill, 22 April 1999).]
[65] 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 obli-
gation 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.
[66] That does not mean, however, that in this case enforcement of the U.K. judgment
must be denied as contrary to public policy. The issue of whether enforcement of a U.K.
judgment must be refused as contrary to public policy in Ontario does not merely involve
a definitional approach to the meaning of public policy but requires a consideration of
all the dimensions of the case which carry implications for public policy. To determine
whether enforcement of the particular judgment would be contrary to the public policy
of Ontario, the court must consider the historical and factual context of the proceedings
which led to the granting of the judgment, and where there are competing public policy
imperatives, whether overall, registration would be contrary to public policy.
[67] The major aspect of the factual context of these judgments is readily distinguish-
able from most of the recent cases. The distinction in this case is the agreement of the
parties before Swinton J. to assume the fact that had Lloyd’s sought to enforce the obliga-
tions incurred by the Names in their investments with Lloyd’s in Ontario, because no
prospectus was delivered or filed, such an action would not have been entertained by an
Ontario court: Jones v. F.H. Deacon Hodgson Inc., supra.
[This puts the appellants’ case at its highest. It is not certain what the result would have
been, had Lloyd’s sued to enforce the Equitas premium obligation in Ontario, in light of
the passage of time since the original contracts were made and the issues relied on by the
English courts in their findings that restitutio in integrum was not possible, so that the
remedy of rescission was not available, as well as the fact that many third parties including
policyholders and other Names would be adversely affected by such a result: Sidmay Ltd
v Wehttam Investments Ltd (1967), 61 DLR (2d) 358 (OCA); Royal Bank of Canada v
Grobman (1977), 83 DLR (3d) 415 (OHC).]
[68] In many of the cases where courts have declined to apply public policy, the obli-
gation arose outside the jurisdiction and in conformity with local law, such as in Board-
walk Regency Corp. v. Maalouf, supra, Sigurdson v. Farrow, supra, and National Surety Co.
v. Larsen, supra. As Carthy J.A. stated in Boardwalk Regency Corp. v. Maalouf, supra, if
we were to treat every Ontario statutory enactment as an expression of our public policy
for this purpose, little would be left of the principle of judicial comity. However, in this
case, it is agreed or assumed that the basis for the judgment is an illegal trade in securities
which actually did occur in Ontario.
[69] Therefore, the public policy may not turn exclusively on repugnance for the
fundamental values represented by the underlying legal basis for the judgment, but on
whether our courts are prepared to enforce a foreign judgment when an action on the
same cause, had it been litigated in Ontario, would not have been entertained.
[70] In my view, both on the basis of the assumed fact that there was a breach of the
Securities Act making the underlying transaction prima facie unenforceable in an action
brought in Ontario at the suit of Lloyd’s, and because I am satisfied that such non-
compliance with our Securities Act does involve what in today’s society are viewed as
fundamental and essential values, the enforcement of such a judgment in many circum-
stances would be prohibited under the Reciprocal Enforcement of Judgments (U.K.) Act as
contrary to the public policy of Ontario.
[71] However, in this case there are two factors which, when weighed against the
breach of the Securities Act, satisfy me that in spite of that breach, it would not be contrary
to public policy to register and enforce these judgments in Ontario:
1. The Decision in Ash v. Lloyd’s Corp. …

[72] In Ash v. Lloyd’s Corp. [(1992), 9 OR (3d) 755, 94 DLR (4th) 378 (CA)] this court
affirmed the decision of the General Division [(1991), 6 OR (3d) 235] that the proper
forum for determination of issues arising out of the membership in Lloyd’s by the Ontario
Names was not Ontario but England.
[73] The plaintiffs had brought an action for a declaration that their agreements with
Lloyd’s were void ab initio on two grounds. One, that they were induced by fraud, and
two, that the agreements were made in contravention of the Securities Act. They also
sought rescission of the agreements on those bases. The defendant sought a stay on the
basis of the exclusive jurisdiction clause in the plaintiffs’ agreements with Lloyd’s, and
alternatively pleaded forum non conveniens.
[74] McKeown J. first determined that even if fraud was proven, the agreements
containing the forum selection clause would not be abrogated to the extent of the choice
of forum clause. In the face of the plaintiffs’ agreement that the English courts would have
exclusive jurisdiction over any disputes they might have with Lloyd’s, the plaintiffs had
the onus of showing “strong cause” why Ontario would be a more appropriate forum than
England. McKeown J. found three factors which favoured Ontario: (a) the plaintiffs were
only 70 out of 35,000 Names, 81 per cent of whom were located in England; (b) the
plaintiffs’ cause of action was under an Ontario statute, the Securities Act; and (c) the law
of Ontario was possibly more favourable than that of England in respect of fraud. How-
ever, he identified 20 points of contact with England including the fact that the documen-
tation for all of the Names was the same and included both the exclusive jurisdiction and
choice of law clauses and the relief sought would necessarily impact the others; the experts,
documents, witnesses, the Central Fund which is for the protection of all policyholders,
the Names Association and other persons and entities associated with the issues were all
in England; and the plaintiffs filed no evidence that they would be disadvantaged by
proceeding in England.
[75] In the latter regard, McKeown J. proceeded on the basis that the English courts
would apply Ontario law if it were determined to be applicable. He also noted that the
plaintiffs faced a number of problems with their Securities Act claim, including the fact
that they had benefited from their Lloyd’s membership over many years, so that there was
an issue as to whether the contracts could be voided in those circumstances. (This was of
course, ultimately the basis for the plaintiffs’ failure to obtain rescission, even for fraud.)
McKeown J. also commented at p. 252 O.R. that: “There is no reason to believe that the
English courts would not apply the Securities Act.” In light of his earlier reference to
English courts applying Ontario law only if it were determined to be applicable, I read
this statement as subject to the same qualification.
[76] McKeown J. concluded that a permanent stay of the Ontario action was appropri-
ate. His reasons were fully endorsed by the Court of Appeal.
[77] It is clear from the detailed reasons of McKeown J., adopted by the Court of
Appeal, that both he and this court were well aware of the nature of the plaintiffs’ claims
of both fraud and breach of the Securities Act, and of the potential consequences of staying
the Ontario actions in favour of litigation of all issues in England. They also adverted
specifically to the possibility that the English courts would not find Ontario law to be the
proper law of the contracts.
[78] In other words, the outcome that eventually resulted was contemplated as a pos-
sible outcome when the Ontario courts effectively sent the case to proceed in England.
The decision of this court that the Lloyd’s cases were to be heard in England and not in
Ontario was effectively a decision that if the English courts determined that Ontario law
was not the proper law of the contracts, the judgments that flowed from that decision
would not be contrary to our public policy. Had this court been of the view that compli-
ance with the Securities Act was so basic to the public policy of Ontario that a judgment
which did not give effect to the Act could never be registered and enforced, no matter
what the circumstances, then it would have treated that as a factor which, in effect,
trumped all other factors, including the exclusive jurisdiction clause and the connections
to England, and it would not have stayed the action. To now conclude that the English
judgments are unenforceable in Ontario, as contrary to the public policy of this jurisdic-
tion, would undermine the credibility of the earlier decisions of our courts and of our
judicial system.
[79] The issue of the breach of the Ontario Securities Act was one of the two central
issues brought before McKeown J. in Ash v. Lloyd’s Corp., supra, in 1991. This court was
prepared to have that issue addressed by the English courts and to accept the result. In
effect, the Ontario courts determined that in this case, it would not be contrary to the
public policy of Ontario to enforce a judgment which may have condoned a breach of the
Securities Act.
[80] I note that this was also the conclusion reached by the US District Court in Lloyd’s
v. Ashenden, supra, a similar enforcement action in respect of the Equitas premium judg-
ments obtained by Lloyd’s. In that case, as in this one, the Illinois Names first sought to
have their claims for rescission of the Lloyd’s agreements tried in Illinois, but their actions
were stayed on the basis of the choice of forum clause. One of the issues which the court
had considered but rejected in the earlier case, was that granting the stay and upholding
the choice of forum clause was contrary to Illinois public policy because it would offend
the Illinois Securities Act. When the Names sought to raise the same public policy argu-
ment again in the enforcement context, the court held that that argument was foreclosed.
2. Principles of International Comity

[81] The Lloyd’s contracts are international contracts, involving an English insurance/
investment system where the participant members or Names are located worldwide. All
Names entered into the same agreements wherein they agreed to litigate their disputes in
England under English law. Names are solicited in their home jurisdictions, many of
which have securities legislation with provisions similar in purpose to the Ontario Secur-
ities Act in terms of providing full and honest disclosure of all material information which
investors need in order to make informed investment decisions, and thereby to protect
the investing public.
[82] The U.S. courts which have faced the same public policy argument made by the
appellants have almost uniformly rejected it on the basis of international comity princi-
ples. For example, in Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir. 1998), the
Names sought an order invalidating the choice of forum clause in their agreements with
Lloyd’s. The majority of the court rejected the Names’ public policy argument on the basis
that the contracts with Lloyd’s were international, the forum selection clause in inter-
national contracts is very important and should be applied even if that means that foreign
law will be applied, and English law and English courts would provide the Names with
sufficient protection. A similar result was reached in Bonny v. Society of Lloyd’s, 3 F.3d 156
(7th Cir. 1993); Riley v. Kingsley Underwriting Agencies, 969 F.2d 953 (10th Cir. 1992); and
Lipcon v. Lloyd’s, [1998] CA11-QL 402 (11th Cir.).
[83] The public policy concerns have also been rejected in other Canadian provinces
where these issues have been raised and considered: see Morrison v. Society of Lloyd’s
(2000), 224 N.B.R. (2d) 1, 574 A.P.R. 1 (C.A.), leave to appeal to S.C.C. refused [2000]
S.C.C.A. No. 137) and Crockett v. Society of Lloyd’s (2000), 189 Nfld. & P.E.I.R. 129, 571
A.P.R. 129 (P.E.I.T.D.). In Crockett v. Society of Lloyd’s, supra, the PEI court was already
aware that the English courts were not applying the securities legislation of the Names’
home jurisdictions.
[84] All of the U.S. cases referred to rely on the United States Supreme Court decision
in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) which set out the importance of
upholding forum selection clauses, even if to do so may result in conflict with relevant
local statutes. In Lipcon v. Lloyd’s, supra [at para 40], the court dealt with the concerns
raised by the contrary position with these references:
Although we do not deny that there is some force to appellants’ argument that the anti-waiver
provisions [of the securities legislation] preclude application of the Bremen test, we believe
that to invalidate the choice provisions for that reason in effect would be to conclude that
“the reach of the United States securities laws [is] unbounded” Richards, and to ignore the
Supreme Court’s caveat that “[w]e cannot have trade and commerce in world markets and
international waters exclusively on our terms, governed by our laws, and resolved in our
courts,” Bremen. …
(Citations omitted)
[85] The Supreme Court of Canada has recently expressed a similar sentiment with
respect to the reach of provincial securities legislation. In Committee for Equal Treatment
of Asbestos Minority Shareholders v. Ontario (Securities Commission), 2001 S.C.C. 37, the
issue was the Commission’s discretion to exercise its authority to sanction under s. 127(1)
of the Securities Act. In its conclusion that the decision of the Commission not to do so
be upheld, the court stated [at para 62]:
It is true that the OSC placed significant emphasis on the transactional connection factor.
However, it was entitled to do so in order to avoid using the open-ended nature of s. 127
powers as a means to police too broadly out of province transactions. Capital markets and
securities transactions are becoming increasingly international: see Global Securities Corp.
v. British Columbia (Securities Commission), [2000] 1 S.C.R. 494, 2000 SCC 21, at paras. 27-28.
There are a myriad of overlapping, regulatory jurisdictions governing securities transactions.
Under s. 2.1, para. 5 of the Act, one of the fundamental principles that the OSC has to
consider is that “[t]he integration of capital markets is supported and promoted by the sound
and responsible harmonization and co-ordination of securities regulation regimes.” A trans-
action that is contrary to the policy of the Ontario Securities Act may be acceptable under
another regulatory regime. Thus, the OSC’s insistence on a more clear and direct connection
with Ontario in this case reflects a sound and responsible approach to long-arm regulation
and the potential for conflict amongst the different regulatory regimes that govern the capital
markets in the global economy.
[86] This observation by the Supreme Court is consistent with the direction taken by
the U.S. courts and other Canadian courts on this same issue and with the principles of
international comity which now play an increasingly important role in the approach of
the courts to issues involving international commerce. For example, in Hunt v. T&N plc,
[1993] 4 S.C.R. 289 at pp. 321-22, 109 D.L.R. (4th) 16, La Forest J. reiterated the modern
approach:
A central idea in that judgment [Morguard Investments Ltd v De Savoye] was comity. But as
I stated, at p. 1098, “I do not think it much matters whether one calls these rules of comity
or simply relies directly on the reasons of justice, necessity and convenience” that underlie
them. In my view, the old common law rules relating to recognition and enforcement were
rooted in an outmoded conception of the world that emphasized sovereignty and independ-
ence, often at the cost of unfairness. Greater comity is required in our modern era when
international transactions involve a constant flow of products, wealth and people across the
globe.
[87] All of the courts that have recognized the authority of the English courts to hear
and decide all of the Lloyd’s litigation and have decided to enforce the resulting judgments,
have been satisfied that to grant rescission to some Names, when the insurance policies
which they have underwritten remain outstanding, would create a situation of economic
chaos as well as unfairness. Tuckey J. in The Society of Lloyd’s v. Daly [(Comm Ct) (reasons
released 27 January 1998)] referred to such an outcome as an “anomaly,” which it clearly
would be. Furthermore, because the Names would retain their obligations under those
policies, they would benefit from the Equitas scheme. Therefore, the result reached by the
English courts, that the Names must pursue their damages remedy for fraud after paying
their premiums and participating in the scheme necessary to retain the viability of this
very important worldwide insurance market, is a sensible one. In that context, our public
policy of enforcing the rules of comity where justice, necessity and convenience all favour
enforcement, outweighs the concerns we might otherwise have where there has been a
breach of the prospectus requirement of our Securities Act.
[88] A similar conclusion was reached by many of the U.S. courts which considered
the same issues between Lloyd’s and the Names. For example, in Allen v. Lloyd’s of London,
94 F.3d 923 (4th Cir. 1996), a case which upheld the choice of forum clause, the court
noted [at para 30]:
Finally, significant United States and foreign interests would be adversely affected if we were
to insist that Lloyd’s insurance underwriting syndicates comply with United States disclosure
requirements. Such a ruling would place at risk billions of dollars of insurance coverage for
United States citizens because American Names could demand rescission on the ground that
their syndicates, even though they include citizens of various countries, did not comply with
United States securities registration and disclosure requirements. Insurance commissioners
from several states have described the potential mass confusion and damage to the domestic
insurance market that such a ruling would cause.
This was also a major factor emphasized by Swinton J. in her decision that enforcement
of the Lloyd’s judgments would not be contrary to public policy within the meaning of
the Reciprocal Enforcement of Judgments (U.K.) Act. For all of these reasons I would affirm
her decision.
NOTES
1. In the wake of the Supreme Court’s decision in Morguard Investments Ltd v De Savoye,
[1990] 3 SCR 1077, 76 DLR (4th) 256 (reproduced in Chapter 3), there was some speculation
that the expansive concept of international comity embraced in that case would be coun-
tered by a greater readiness to apply the public policy defence where the divergence of the
underlying foreign law from forum policy was particularly acute. The courts generally have
rejected that argument, holding that the comity rationale underlying Morguard is, on the
contrary, consistent with a narrow application of the public policy defence. Indeed, Meinzer
illustrates that even where a fundamental forum public policy (protection of local investors
and local capital markets) is concretely implicated, the international context of the particular
dispute may persuade the court to give precedence to countervailing policies (the protec-
tion of the global insurance market, the potential prejudice to other parties where the par-
ticular transaction is part of a global network of interrelated transactions, and the avoidance
of conflicting decisions in multiple litigation fora).
2. The court’s rejection of the public policy defence in Meinzer should be read as con-
fined to the particular context of the Lloyd’s litigation. The court regarded the provisions of
Ontario securities law in relation to investments solicited in Ontario as a fundamental and
essential value of Ontario law such that “the enforcement of such a judgment in many cir-
cumstances would be prohibited … as contrary to the public policy of Ontario.” The jurisdic-
tion of the English courts in Meinzer and the other Lloyd’s cases was predicated on
contractual choice of forum clauses in favour of the exclusive jurisdiction of the English
courts. It follows that in the appropriate case a judgment may be refused enforcement on
public policy grounds for non-compliance with fundamental forum policy notwithstanding
the existence of an exclusive choice of court clause in favour of the courts in the jurisdiction
where the judgment was rendered. This is consistent with art 9(e) of the 2005 Hague Conven-
tion on Choice of Court Agreements (Hague Choice of Court Convention), which provides that
a state may refuse recognition of a judgment rendered in the contractually chosen forum if
recognition and enforcement would be manifestly incompatible with the law of the
requested state. For a further discussion on the potential conflict between forum public
policy and exclusive choice of forum clauses in favour of foreign fora, see Section IV, “Public
Policy and Jurisdiction.”
C. Public Policy as a Basis for the Reduction of Excessive Foreign

Damage Awards?
The courts in common law Canada have generally refused to apply the public policy excep-
tion to limit the enforcement in Canada of judgments rendered in the United States on the
basis that the damages awarded were exorbitant as compared to Canadian standards: see
Old North State Brewing Co v Newlands Services Inc, [1999] 4 WWR 573 (BCCA), and Beals v
Saldanha, 2003 SCC 72, [2003] 3 SCR 416, 234 DLR (4th) 1 (the latter is reproduced in Chapter
8). Nonetheless, the jurisprudence reflects some continuing judicial unease in giving effect
to foreign damage awards out of line with Canadian standards. MGM Grand Hotel v Chiu, 2016
ONSC 1071, involved an action by a Nevada casino to enforce a judgment rendered in default
by a Nevada court on several cheques written by the Canadian judgment debtor to pay Las
Vegas gambling debts. The Nevada court had included in its judgment an additional amount
to reflect the fact that the plaintiff casino “will also have to pay a collection attorney in
Defendant’s domicile [Ontario] a contingency fee of twenty-five percent (25%) to collect on
this matter.” The court declined to enforce this aspect of the Nevada judgment on public
policy grounds, stating:
[19] Nothing in the realm of private international law requires me to recognize a foreign
court’s estimate of the costs of proceeding before this court. Those costs are solely a matter of
domestic, Ontario jurisdiction. Further, the reasonableness of such costs are a matter of domes-
tic public policy, including, among other things, a consideration of the Solicitors Act, R.S.O. 1990,
c. S 15. I find the costs estimated (totaling just under US$70,000 for a simple default judgment)
to be plainly excessive and unreasonable and I decline to enforce such an award of prospective
costs in Ontario contained within a foreign judgment.
In contrast to the general common law position, s 6(1) of the Uniform Enforcement of For-
eign Judgments Act (2003) (adopted in Saskatchewan as The Enforcement of Foreign Judg-
ments Act, SS 2005, c E-9.121) requires the forum court to limit the enforcement of a foreign
award of punitive or other non-compensatory damages to the comparable amount that
could have been awarded in forum law. Section 6(2) also vests the court with discretion to
reduce an award of compensatory damages that it considers excessive in the circumstances.
The Hague Choice of Court Convention likewise acknowledges that states may have policy
concerns with giving effect to foreign damage awards in excess of forum norms but takes a
more restrained approach. Article 8(2) of the Convention gives the enforcing court the dis-
cretion, but not the obligation, to refuse recognition of a foreign judgment to the extent that
it includes exemplary or punitive or other non-compensatory damages. There is no discre-
tion to reduce compensatory damages.
D. Availability of the Public Policy Defence in the Interprovincial Context?

The basic commonality of values among the Canadian provinces, coupled with the attenu-
ated scope afforded to public policy in the private international law context, makes it diffi-
cult to imagine a case where one province would be prepared to find the cause of action
giving rise to a judgment of a sister province so repugnant to its own policies as to justify a
refusal of recognition.
Nonetheless, public policy was codified as a defence to the enforcement of sister province
judgments in the Uniform Law Conference’s Uniform Reciprocal Enforcement of Judgments Act
(1924, revised 1958), subsequently enacted by most of the common law jurisdictions: see e.g.
Reciprocal Enforcement of Judgments Act, RSO 1990, c R.5, s 3(f). Even the Conference’s rela-
tively recent Uniform Enforcement of Canadian Judgments (and Decrees) Act retains the public
policy defence in the interprovincial context in s 6(2)(c)(iv): see Law Reform Commission of
British Columbia; Enforcement of Canadian Judgments and Decrees Act, SBC 2003, c 29,
s 6(2)(c)(iv); Canadian Judgments (Enforcement) Act, RSPEI 1988, c C-1.1, s 7(1)(d); The Enforcement
of Canadian Judgments Act, 2002, SS 2002, c E-9.1001, s 7(2)(c)(iv); The Enforcement of Canadian
Judgments Act, CCSM c E116, s 6(2)(c)(iv); Enforcement of Canadian Judgments and Decrees Act,
SNS 2001, c 30, s 8(2)(c)(iv); Enforcement of Canadian Judgments and Decrees Act, SY 2000, c.
12, s 6(2)(c)(iv) (not yet in force); Enforcement of Canadian Judgments Act, SNL 2000, c E-11.1,
s 7(1)(d) (not yet in force). This decision attracted strong criticism: see Black at 723-24.
New Brunswick has taken a very different approach. The Canadian Judgments Act, RSNB
2011, c 123, does not expressly preserve a general public policy defence. On the other hand,
the statute provides for the general recognition and enforcement of Canadian judgments
only to the extent that the judgment requires the payment of a fixed sum of money and only
where the defendant took part in the proceedings: ss 3, 5, 12. If the judgment was rendered
in default of appearance, a more restrictive approach is taken. Under s 6(1), the judgment
may not be registered or otherwise enforced unless the stipulated connecting factors to the
extra-provincial Canadian judgment forum are present. Thus, the absence of jurisdiction in
the judgment forum may still be raised as a defence in the New Brunswick proceeding in the
case of default judgments. Moreover, under s 6(2), a default judgment rendered against a
New Brunswick resident cannot be registered or enforced at all if the underlying cause of
action related to the enforcement of a contract for the supply of consumer goods or services
within New Brunswick or a contract of employment under which the individual’s place of
employment is in New Brunswick: see s 12. Both the general restriction to money judgments
for a fixed amount and the limitations on the recognition of default judgments, especially in
relation to consumer and employment contracts involving New Brunswick residents, are
evidently predicated on forum public policy considerations.
The continued availability of the public policy defence in the interprovincial context is
put in question by the Supreme Court of Canada’s recognition of a constitutionally man-
dated requirement to give “full faith and credit” to sister province judgments: Hunt v T&N plc
[1993] 4 SCR 289, 109 DLR (4th) 16. Certainly, the defence does not generally feature in the
interstate recognition of judgments in the United States where the Supreme Court has
stated that there is “no moving ‘public policy exception’ to the full faith and credit due judg-
ments” from other American states: Baker v General Motors, 522 US 222 at 233 (1998); see
further Felix & Whitten, ch 3. It remains to be seen whether generalized public policy predi-
cated provisions like those found in the New Brunswick Canadian Judgments Act, above, are
permissible exceptions to the full faith and credit doctrine.
III. PUBLIC POLICY AND CHOICE OF LAW

A. General

CQLR c C-1991
3081. The provisions of the law of a foreign State do not apply if their application would
be manifestly inconsistent with public order as understood in international relations.
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5)

[2002] 2 AC 883 (HL)
[On August 2, 1990, when Iraq invaded Kuwait, the respondent, Kuwait Airways Corp
(KAC), had 10 aircraft parked at a Kuwaiti airport. The aircraft were seized by the Iraqi
invaders who, within a fortnight, flew them to Iraq. On September 9, the ruling Revolu-
tionary Command Council adopted a resolution (resolution 369) that purported to dis-
solve Kuwait Airways Corp and transfer all its property (including the 10 aircraft) to the
appellant Iraqi Airways Co (IAC). This resolution came into force and was implemented
by the Board of Directors on September 17. In the days following the invasion, the United
Nations Security Council passed a series of resolutions: demanding an immediate Iraqi
withdrawal from Kuwait; calling on all states to protect Kuwaiti assets; requesting that
states take action to restore the legitimate Kuwaiti government; and declaring Iraq’s
annexation of Kuwait null and void. After Iraq was driven out of Kuwait, Iraq was
required, on March 5, 1991, to rescind resolution 369 as a condition of the ceasefire. On
January 11, 1991, KAC took legal action against IAC in England. In respect to the 10
aircraft, it sought damages in conversion. At the time, the double actionability conflicts
rule for tort proceedings (as set out in Boys v Chaplin, [1971] AC 356 (HL)) was still in
force in England (it was subsequently superseded by the Private International Law
III. Public Policy and Choice of Law 89
(Miscellaneous Provisions) Act 1995, and then by the Rome II Regulation (Regulation (EC)
No 864/2007 on the law applicable to non-contractual obligations). Under that rule, to make
out its cause of action, KAC had to show that (1) IAC’s acts were civilly actionable under
the law of the country where they occurred (Iraq), and (2) would have been civilly actionable
had they occurred in England. IAC argued that resolution 369 prevented Kuwait Airways
Corp from satisfying the first arm of the test. KAC countered that the English courts
should disregard the resolution as contrary to forum public policy. Both the trial judge
and the Court of Appeal accepted this argument whereupon IAC appealed to the House
of Lords. (Their Lordships had already ruled on a previous occasion that IAC could not
defend this action on the basis of state immunity: see [1995] 1 WLR 1147, 3 All ER 694.]
LORD NICHOLLS:
KAC immediately comes up against an obvious difficulty. In order to satisfy the double
actionability test KAC must show it was the owner of the aircraft when IAC did the acts
of which KAC is complaining. But, on the face of things, that was not so. By September
1990 the aircraft had been seized by the government of Iraq and moved from Kuwait to
Iraq. Under Iraqi law, RCC resolution 369 was effective to divest KAC of its ownership
of the aircraft and vest title in IAC. Under Iraqi law the subsequent repeal of this decree
did not retrospectively give KAC a title it did not otherwise have during the relevant
period. Under English conflict of laws principles the transfer of title to tangible movable
property normally depends on the lex situs: the law of the country where the movable
was situated at the time of the transfer. Likewise, governmental acts affecting proprietary
rights will be recognised by an English court as valid if they would be recognised as valid
by the law of the country where the property was situated when the law takes effect. Here,
that was Iraq.
KAC does not dispute these propositions. Nor does KAC contend that the lex situs of
the aircraft was the law of Kuwait as the place where, presumably, the aircraft were regis-
tered. KAC’s response is that in the present case, as a matter of overriding public policy,
an English court will altogether disregard RCC resolution 369. An English court will not
regard this decree of Iraqi law as effective to divest KAC of its title to the ten aircraft.
RCC Resolution 369 and English Public Policy

Conflict of laws jurisprudence is concerned essentially with the just disposal of proceed-
ings having a foreign element. The jurisprudence is founded on the recognition that in
proceedings having connections with more than one country an issue brought before a
court in one country may be more appropriately decided by reference to the laws of
another country even though those laws are different from the law of the forum court.
The laws of the other country may have adopted solutions, or even basic principles,
rejected by the law of the forum country. These differences do not in themselves furnish
reason why the forum court should decline to apply the foreign law. On the contrary, the
existence of differences is the very reason why it may be appropriate for the forum court
to have recourse to the foreign law. If the laws of all countries were uniform there would
be no “conflict” of laws.
This, overwhelmingly, is the normal position. But, as noted by Scarman J in In the
Estate of Fuld, decd. (No 3), [1968] P 675, 698, blind adherence to foreign law can never
be required of an English court. Exceptionally and rarely, a provision of foreign law will
be disregarded when it would lead to a result wholly alien to fundamental requirements
of justice as administered by an English court. A result of this character would not be
acceptable to an English court. In the conventional phraseology, such a result would be
contrary to public policy. Then the court will decline to enforce or recognise the foreign
decree to whatever extent is required in the circumstances.
This public policy principle eludes more precise definition. Its flavour is captured by
the much repeated words of Judge Cardozo that the court will exclude the foreign decree
only when it “would violate some fundamental principle of justice, some prevalent con-
ception of good morals, some deep-rooted tradition of the common weal”: see Loucks v.
Standard Oil Co. of New York (1918), 120 NE 198, 202.
Despite its lack of precision, this exception to the normal rule is well established in
English law. This imprecision, even vagueness, does not invalidate the principle. Indeed,
a similar principle is a common feature of all systems of conflicts of laws. The leading
example in this country, always cited in this context, is the 1941 decree of the National
Socialist Government of Germany depriving Jewish émigrés of their German nationality
and, consequentially, leading to the confiscation of their property. Surely Lord Cross of
Chelsea was indubitably right when he said that a racially discriminatory and confiscatory
law of this sort was so grave an infringement of human rights that the courts of this
country ought to refuse to recognise it as a law at all: Oppenheimer v. Cattermole, [1976]
AC 249, 277-278. When deciding an issue by reference to foreign law, the courts of this
country must have a residual power, to be exercised exceptionally and with the greatest
circumspection, to disregard a provision in the foreign law when to do otherwise would
affront basic principles of justice and fairness which the courts seek to apply in the
administration of justice in this country. Gross infringements of human rights are one
instance, and an important instance, of such a provision. But the principle cannot be
confined to one particular category of unacceptable laws. That would be neither sensible
nor logical. Laws may be fundamentally unacceptable for reasons other than human rights
violations.
The question raised in the present proceedings is whether resolution 369 of the Revo-
lutionary Command Council of Iraq is of this character. This decree was one of the RCC
resolutions issued with a view to giving effect to the integration of Kuwait into Iraq fol-
lowing the invasion. It was part and parcel of the Iraqi seizure of Kuwait and its assets
and the assimilation of these assets into the political, social and economic structure of
Iraq.
That this seizure and assimilation were flagrant violations of rules of international law
of fundamental importance is plain beyond argument. International reaction to the inva-
sion was swift. On the first day of the invasion, 2 August 1990, the UN Security Council
condemned the invasion as a breach of the peace and demanded immediate Iraqi with-
drawal (resolution 660). On 6 August the Security Council determined that Iraq had
usurped the authority of the legitimate government of Kuwait. All member states were to
take specified measures to restore the authority of the legitimate government of Kuwait.
The council called upon all states to take appropriate measures to protect assets of the
legitimate government of Kuwait and its agencies, and not to recognise any regime set up
by the occupying power (resolution 661). On 9 August the Security Council decided that
the annexation of Kuwait by Iraq had no legal validity and was null and void. The council
called upon all states not to recognise this annexation, and to refrain from any action
which might be interpreted as an indirect recognition of the annexation (resolution 662).
Later resolutions of the Security Council included resolution 674 (29 October 1990) which
condemned the seizure by Iraq of public and private property in Kuwait and reminded
Iraq of its liability under international law for loss and damage caused to Kuwaiti nationals
and institutions. On 29 November 1990 the council authorised military action against
Iraq (resolution 678).
In the event no state recognised Iraq’s annexation of Kuwait or its authority in Kuwait.
On 2 March 1991 the UN Security Council laid down conditions for a ceasefire. The
conditions included demands that Iraq should rescind its purported annexation of Kuwait,
accept in principle its liability under international law for any loss or damage caused to
Kuwait and its nationals and corporations, and begin to return all Kuwaiti property
immediately (resolution 686). On 5 March 1991 Iraq accepted these obligations and
repealed resolution 369 of the Revolutionary Command Council.
The effect of these Security Council decisions, as a matter of international law, is clear.
Iraq and Kuwait are both members of the United Nations. Article 2(4) of the United
Nations Charter provides that in their international relations all members shall refrain
from the use of force against the territorial integrity of any state. This is also a principle
of customary international law binding on states independently of the provisions of the
Charter: see the International Court of Justice in Nicaragua v. United States of America,
[1986] ICJ Reports 14, 98-100, at paragraphs 187-188.
Further, article 25 of the United Nations Charter provides that the members of the
United Nations agree to accept and carry out the decisions of the Security Council in
accordance with the Charter. Chapter VII of the Charter empowers the Security Council
to determine that there exists a breach of the peace. When the council has made such a
determination, as happened in the present case on the very day of the invasion, the council
may decide upon measures to restore international peace and security. These measures
include both military and non-military measures. Decisions of the Security Council taken
under these chapter VII powers are legally binding upon all members of the United
Nations: see the opinion of the International Court of Justice concerning Legal Conse-
quences for States of the Continued Presence of South Africa in Namibia, [1971] ICJ Reports
16, 53-56, paragraphs 115-125. The Security Council resolutions mentioned above were
decisions taken under chapter VII.
On behalf of IAC Mr Donaldson submitted that the public policy exception to the
recognition of provisions of foreign law is limited to infringements of human rights. The
allegation in the present action is breach of international law by Iraq. But breach of inter-
national law by a state is not, and should not be, a ground for refusing to recognise a
foreign decree. An English court will not sit in judgment on the sovereign acts of a foreign
government or state. It will not adjudicate upon the legality, validity or acceptability of
such acts, either under domestic law or international law. For a court to do so would
offend against the principle that the courts will not adjudicate upon the transactions of
foreign sovereign states. This principle is not discretionary. It is inherent in the very nature
of the judicial process: see Buttes Gas and Oil Co. v. Hammer (No 3), [1982] AC 888, 932.
KAC’s argument, this submission by IAC continued, invites the court to determine
whether the invasion of Kuwait by Iraq, followed by the removal of the ten aircraft from
Kuwait to Iraq and their transfer to IAC, was unlawful under international law. The courts
below were wrong to accede to this invitation.
My Lords, this submission seeks to press the non-justiciability principle too far.
Undoubtedly there may be cases, of which the Buttes case is an illustration, where the
issues are such that the court has, in the words of Lord Wilberforce at page 938, “no judi-
cial or manageable standards by which to judge [the] issues”:
the court would be asked to review transactions in which four sovereign states were involved,
which they had brought to a precarious settlement, after diplomacy and the use of force and
to say that at least part of these were “unlawful” under international law.
This was Lord Wilberforce’s conclusion regarding the important inter-state and other
issues arising in that case: see his summary at page 937.
This is not to say an English court is disabled from ever taking cognisance of inter-
national law or from ever considering whether a violation of international law has
occurred. In appropriate circumstances it is legitimate for an English court to have regard
to the content of international law in deciding whether to recognise a foreign law. Lord
Wilberforce himself accepted this in the Buttes case, at page 931D. Nor does the “non-
justiciable” principle mean that the judiciary must shut their eyes to a breach of an
established principle of international law committed by one state against another when
the breach is plain and, indeed, acknowledged. In such a case the adjudication problems
confronting the English court in the Buttes litigation do not arise. The standard being
applied by the court is clear and manageable, and the outcome not in doubt. That is the
present case.
Against this background I return to the question whether as a matter of public policy
an English court ought to decline to recognise RCC resolution 369 as effectual to divest
KAC of its title to its aircraft. Mance J and the Court of Appeal said that an English court
should so decline. I agree with them.
The acceptability of a provision of foreign law must be judged by contemporary stan-
dards. Lord Wilberforce, in a different context, noted that conceptions of public policy
should move with the times: see Blathwayt v. Baron Cawley, [1976] AC 397, 426. In
Oppenheimer v. Cattermole, [1976] AC 249, 278, Lord Cross said that the courts of this
country should give effect to clearly established rules of international law. This is increas-
ingly true today. As nations become ever more interdependent, the need to recognise and
adhere to standards of conduct set by international law becomes ever more important.
RCC resolution 369 was not simply a governmental expropriation of property within its
territory. Having forcibly invaded Kuwait, seized its assets, and taken KAC’s aircraft from
Kuwait to its own territory, Iraq adopted this decree as part of its attempt to extinguish
every vestige of Kuwait’s existence as a separate state. An expropriatory decree made in
these circumstances and for this purpose is simply not acceptable today.
I have already noted that Iraq’s invasion of Kuwait and seizure of its assets were a gross
violation of established rules of international law of fundamental importance. A breach
of international law of this seriousness is a matter of deep concern to the world-wide
community of nations. This is evidenced by the urgency with which the UN Security
Council considered this incident and by its successive resolutions. Such a fundamental
breach of international law can properly cause the courts of this country to say that, like
the confiscatory decree of the Nazi government of Germany in 1941, a law depriving those
whose property has been plundered of the ownership of their property in favour of the
aggressor’s own citizens will not be enforced or recognised in proceedings in this country.
Enforcement or recognition of this law would be manifestly contrary to the public policy
of English law. For good measure, enforcement or recognition would also be contrary to
this country’s obligations under the UN Charter. Further, 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. Inter-
national law, for its part, recognises that a national court may properly decline to give
effect to legislative and other acts of foreign states which are in violation of international
law: see the discussion in Oppenheim’s International Law, 9th ed. (1992), vol. 1, (ed. Jen-
nings and Watts) pages 371-376, paragraph 113.
NOTES
1. Kuwait Airways demonstrates that international or transnational sources may inform

forum public policy. Nonetheless, the availability of the public policy exclusion ultimately
depends on the incorporation of those international sources into forum law. As Lagarde has
observed (at 51), the principal objection to a truly international public policy standard is that
it would “only be useful if it differed from the public policy of the forum, but in that case a
court seized of the matter could not call it in aid without rejecting its own law” as in effect
contrary to public policy.
2. Where the public policy exception is invoked to exclude the application of foreign law,
the usual result is that the forum court will apply its own law. As Kuwait Airways illustrates,
this is not invariably the result. If the offensive provision relates only to the specific case
before the court—in Kuwait Airways, the Iraqi government resolution making the Kuwait
Airways jets the property of Iraqi Airways—the court may instead simply disregard that pro-
vision and apply the balance of the otherwise applicable foreign law. As Blom (2003)
observes, decisions of this kind may be regarded as
instances of a general principle that public policy should be applied so as to do as little collat-
eral damage as possible to the usual operation of conflicts rules. When the rule of foreign law
that produces the unacceptable outcome has been excised from the decision, there is no reason
to deny other rules of foreign law the effect that private international law gives them.
But Blom goes on to say:

In practice, however, few examples of this can be found, because there is seldom what might be
called a backup rule of foreign law to apply to the issue that the rejected foreign rule would
have decided. If the rejected rule is all that the relevant foreign legal system had to say on the
matter, there is nothing to do but apply the law of the forum by way of default.
See further Blom at 375-77.

3. Recital (32) of the Rome II Regulation (Regulation (EC) No 864/2007 of the European
Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obliga-
tions) preserves the power of courts in member states to exclude the application of a provi-
sion of the law designated as applicable under the regulation “which would have the effect
of causing non-compensatory exemplary or punitive damages of an excessive nature to be
awarded” if, “depending on the circumstances of the case and the legal order” of the forum
state, the result would be regarded as being contrary to forum public policy (ordre public). As
noted earlier in this chapter, Canadian courts have generally refused to apply the public
policy exception to limit the enforcement in Canada of judgments rendered in the United
States on the basis that the amount of damages awarded was excessive as compared to
Canadian standards. It therefore seems unlikely that a Canadian court would be prepared to
invoke public policy at the choice of law level to exclude the application of the damages
rules of the otherwise applicable law. Nonetheless, public policy considerations may under-
lie the traditional English common law characterization of issues relating to the quantifica-
tion of damages as procedural and therefore governed by the law of the forum. The
procedural characterization pre-empts the need to invoke public policy directly to limit the
application of foreign damage rules: see further Chapter 11.
B. Overriding Mandatory Rules of the Forum

CQLR c C-1991
3076. The rules contained in [Book Ten, Private International Law] apply subject to
those rules of law in force in Québec which are applicable by reason of their particular
object.
NOTES
1. Public policy is classically conceived as a basis for the exclusion of an otherwise applic-
able foreign law. However, as art 3076 of the Code reflects, forum policy may sometimes
operate in a positive fashion to override the usual operation of forum choice of law rules if a
particular mandatory provision of the internal law of the forum is interpreted as intended to
apply despite the presence of a foreign element.
2. As Blom (2003) observes (at 379), the common law never developed a singular vocabu-
lary to deal with the overriding effect of forum rules on the operation of general choice of
law principles:
The common law courts have no special name for such overriding domestic rules, but civil law
writers have dubbed them “rules of immediate application,” “mandatory rules” or “peremptory
rules,” and common law writers have followed suit. They are also sometimes viewed as a par-
ticular category of public policy, règles d’ordre public as distinct from principes d’ordre public.
3. As Blom goes on to say (at 379-80), while both the negative and positive invocation of
forum public policy generally results in the application of forum law by default, the rationale
for excluding the otherwise applicable foreign law is different:
Where public policy in the strict sense is invoked, the foreign rule is rejected because it (or the
result it produces) is, from the forum’s point of view, unacceptably bad. Where a rule of immedi-
ate application falls to be applied, the domestic rule is applied just because it has to be. The
issue in question is preempted by the local rule, but no judgment is passed on the foreign rule.
4. The 2015 Hague Principles on Choice of Law in International Commercial Contracts

(Hague Principles) recognize both the classic exclusionary public policy doctrine and the
idea of overriding forum mandatory law as exceptions to the general principle that the par-
ties to a commercial contract are free to choose the applicable law: see arts 11(1) and (3).
5. Section 27 of the New Brunswick Consumer Product Warranty and Liability Act, SNB
1978, c C-18.1, provides an example of a mandatory forum rule clearly intended to override
the foreign law that might otherwise apply under a general choice of law analysis:
Product Liability
27(1) A supplier of a consumer product that is unreasonably dangerous to person or prop-
erty because of a defect in design, materials or workmanship is liable to any person who suffers
a consumer loss in the Province because of the defect, if the loss was reasonably foreseeable at
the time of the supply as liable to result from the defect and
(a) the supplier has supplied the consumer product in the Province;
(b) the supplier has supplied the consumer product outside the Province but has done
something in the Province that contributes to the consumer loss suffered in the Province;
(c) the supplier has supplied the consumer product outside the Province but the defect
arose in whole or in part because of the supplier’s failure to comply with any mandatory
federal standards in relation to health or safety, or the defect caused the consumer product
to fail to comply with any such standards; or
(d) the supplier has supplied the consumer product outside the Province but at the time
of the supply it was reasonably foreseeable that the product would be used or consumed
within the Province.
27(2) For the purposes of paragraph (1)(b), where a person has done anything in the Prov-
ince to further the supply of any consumer product that is similar in kind to the consumer
product that caused the loss, it shall be presumed that he has done something in the Province
that contributed to the consumer loss suffered in the Province, unless he proves irrefragably
that what he did in the Province did not in any way contribute to that loss.
• • •
27(4) The liability of a person under this section does not depend on any contract or
negligence.
6. Article 7(2) of the Rome Convention (Convention on the Law Applicable to Contractual
Obligations (1980)) incorporated a forum mandatory-rules exception to the application of
the law otherwise designated by the Regulation as applicable to a contract.
Article 7
Mandatory rules
• • •
2. Nothing in this Convention shall restrict the application of the rules of the law of the
forum in a situation where they are mandatory irrespective of the law otherwise applicable to
the contract.
The convention was superseded by the Rome I Regulation (Regulation (EC) No 593/2008 of
the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual
obligations). Article 9 preserves the concept of overriding mandatory rules but incorporates
new language designed to emphasize the need for restraint in extending forum mandatory
policy to contracts governed by a foreign law.
Article 9
Overriding mandatory provisions
1. Overriding mandatory provisions are provisions the respect for which is regarded as
crucial by a country for safeguarding its public interests, such as its political, social or economic
organisation, to such an extent that they are applicable to any situation falling within their
scope, irrespective of the law otherwise applicable to the contract under this Regulation.
2. Nothing in this Regulation shall restrict the application of the overriding mandatory
provisions of the law of the forum.
Recital (37) to the Regulation reinforces the limited scope of forum mandatory rules in the
international sphere. Overriding mandatory rules are justified only in “exceptional circum-
stances.” Further, the concept is not equivalent to a provision “which cannot be derogated
from by agreement” and should be construed more restrictively. This implies that a non-
excludable provision will not qualify as mandatory if it is merely aimed at the protection of
the contacting parties. Read in conjunction with the definition of mandatory provisions in
art 9(1), it seems that the impugned provision must additionally be aimed at safeguarding
the broader public interest, as, for example, in the case of competition and securities laws.
C. Overriding Mandatory Rules of Another Law

CQLR c C-1991
3079. Where legitimate and manifestly preponderant interests so require, effect may
be given to a mandatory provision of the law of another country with which the situation
is closely connected.
In deciding whether to do so, consideration is given to the purpose of the provision
and the consequences of its application.
NOTES
1. Like the exception for overriding mandatory rules of the forum in art 3076 above, art
3079 functions as a limitation on the operation of general choice of law rules. It vests the
courts of Quebec with the discretion to apply a mandatory rule of another legal system to
which the dispute bears a “special connection” so as to displace the normally applicable lex
causae. The language of the provision emphasizes that the discretion is to be exercised
exceedingly sparingly and the jurisprudence confirms that art 3079 may not be invoked
where the foreign rule conflicts with the forum’s own policy on the same issue: see e.g.
Globe-X Management Ltd (Proposition de), 2006 QCCA 290 at paras 44-48.
2. A variant of the approach reflected in art 3079 has been recognized in the common
law jurisprudence by the invocation of forum public policy. Specifically, the mandatory rule
of a legal system other than the lex causae to which the facts bear a close connection has
been incorporated “as an operative element (datum) in the extension to conflicts cases of
the well-established rule of forum public policy denying enforcement to a transaction
tainted by illegality or immorality”: Baade (1991) at 33. In cases of this type, public policy
does not operate negatively so as to exclude an otherwise applicable foreign law. Rather, it
operates positively so as to support the overriding application of an otherwise inapplicable

foreign law: see Carter at 5. This approach is illustrated by the reasoning of Southin JA (but
not Cumming JA) in the following case.
Gillespie Management Corp v Terrace Properties

(1989), 39 BCLR (2d) 337 (CA)
[The plaintiff, a British Columbia company, sued to recover commissions alleged to be

due under a contract to manage an apartment building located in Washington or damages
for wrongful termination of that contract. Washington law made it unlawful for any
person—including a non-resident broker carrying on activities within the state—to act
as a real estate broker without first obtaining a licence, and prohibited the bringing of an
action for compensation unless the plaintiff was duly licensed when performing the
services for which compensation was sought. The trial judge gave judgment for the plain-
tiff on the basis that Washington law was inapplicable because the proper law of the
contract was that of British Columbia. The Court of Appeal allowed the defendants’
appeal.]
CUMMING JA (Legg JA concurring):

[19] The learned trial judge held (and in this court counsel for the appellant conceded)
that the proper law of the contract is that of British Columbia, but expressed himself
guided and bound by what was said in Block Bros. Realty Ltd. v. Mollard et al. (1981), 122
DLR (3d) 323 (BC CA) with respect to public policy and said:
I conclude that nothing in the present case relating to the necessity, assuming there is one,
that the Plaintiff be licensed in the State of Washington renders the enforcing of its contract
with the Defendant in British Columbia as a British Columbian contract contrary to public
or moral interest or something founded in moral turpitude or something inconsistent with
the good order and solid interests of society.
[20] Accordingly, he allowed the respondent’s claim.

[21] But Block Bros. Realty Ltd. v. Mollard is distinguishable. In that case the plaintiff
sued to recover commission under an agreement for the sale of land situate in British
Columbia. The contract was made in Alberta. The plaintiff was a licensed broker in that
province but not in British Columbia. The defendants brought an application to dismiss
the action on the ground that s. 37(1) of the Real Estate Act, RSBC 1979, c. 356, which
provided that a person may not maintain an action for real estate commission unless he
proves he is licensed under the Act, is a bar. In sustaining the refusal of the Chambers
judge to dismiss the action, the Court of Appeal held that the proper law of the contract
is the law of Alberta, not that of British Columbia, because the contract was made in
Alberta in the expectation that a purchaser would be found in that province. The convey-
ance of the property in British Columbia was only incidental to the performance of the
contract which was to be performed in Alberta. The situation here is quite different as
this contract called for the performance of acts in the state of Washington which could
not be described as merely incidental to it.
[Cumming JA then invoked a choice of law rule (the existence and scope of which is
controversial in Anglo-Canadian common law) that “the mode of performing a contract,
as distinct from the substance of the obligation, is governed by the law of the place at
which the obligation is to be performed.” On that basis, he concluded that “the illegality
of the respondent’s acts in performing, at least in part, its obligations under the contract
in the state of Washington, where there is an express prohibition against its doing so unless
properly licensed, renders its claim unenforceable in the courts of this province.” Legg JA
concurred, but Southin JA, while agreeing with the result, delivered separate reasons.]
SOUTHIN JA:
[1] I have had the advantage of reading in draft the reasons for judgment of Cum-
ming JA. I agree with his disposition of the appeal.
[2] I desire, however, to add some words of my own.
[3] The contract was, throughout its term, capable of lawful performance if the
respondent acquired a licence.
[4] The issue which arises is whether a party to a contract can recover here consider-
ation due him for performance of his obligations or damages when he has been prevented
from performing when the contemplated performance was, in part, in a foreign jurisdic-
tion in which performance was or would be unlawful although the contract itself was not
unlawful either in this jurisdiction or by the law of the foreign jurisdiction.
[5] So far as counsel enlightened us, none of the previous authorities on illegal per-
formance was precisely of this nature and I am not prepared to say that the answer to that
question is invariably “No, he cannot recover.”
[6] The doctrine of illegality is founded on considerations of public policy—not for-
eign 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 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.
[7] In British Columbia, it is unlawful to act, as it is in the state of Washington, as an
agent for the collection of rents unless the agent has a licence. Without a licence, a person
who does such an act here cannot recover his fees.
[8] I consider that this court should give effect, as a matter of domestic public policy,
to a foreign public policy analogous to our own.
NOTES
1. The leading English cases on the invocation of public policy to give effect to a provi-
sion of foreign law rendering illegal a contract valid by its proper law are Foster v Driscoll,
[1929] 1 KB 470 and Regazzoni v KC Sethia (1944) Ltd, [1958] AC 301. In Foster, the court refused
to give effect to a contract for the introduction of liquor into the United States during the
prohibition era in that country. In Regazzoni, enforcement was denied to a contract that
would have had the effect of circumventing a rule of Indian law prohibiting the export of
certain commodities from India to South Africa. As in Gillespie, the lex fori was also the lex
causae in Foster and Regazzoni. However, there is no reason to think that the result would
have been any different if the lex causae had been the law of a foreign country: see Carter at
4 and 6. This is implicitly supported by the following passage in Soleimany v Soleimany, [1999]
QB 785 (CA) at 796-97 where Waller LJ noted:
[I]t would seem to us that if what the foreign court did was to recognise by its judgment that a
contract had been entered into with the object of committing an illegal act in a state which
England recognised as a foreign and friendly state, and to enforce the rights of the parties under
it, then there would be no room for recognising the more relaxed approach of a different juris-
diction. That, as it would seem to us, is the very type of judgment which the English court would
not recognise on the grounds of public policy.
2. Carter regards Foster and Regazzoni as representative of the use of forum public policy
to protect the national interests or image of the forum by refusing to enforce a transaction
that would have the effect of jeopardizing the relations at the international level of the
forum state with another friendly state: see Carter at 4. Southin JA’s use of public policy in
Gillespie to bring the law of Washington into play is grounded in somewhat broader reason-
ing: that the forum should give effect, as a matter of domestic public policy, to a foreign
public policy analogous to its own. As such, the case is closer to Lemenda Ltd v African Middle
East Co, [1988] QB 448 (also mentioned by Carter), which involved an attempt to enforce a
contract governed by English law to pay a commission to the plaintiffs to use their influence
with the government minister in charge of the national oil corporation of Qatar to procure
a renewal of an oil supply contract. In dismissing the plaintiffs’ claim for compensation,
Phillips J emphasized the substantial compatibility between English and Qatar public policy
on the practice of using personal influence to obtain a contract or other benefit from a
public official (at 461):
[I]t is questionable whether the moral principles involved are so weighty as to lead an English
court to refuse to enforce an agreement regardless of the country of performance and regard-
less of the attitude of that country to such a practice. … In the present case, Qatar, the country
in which the agreement was to be performed and with which, in my view, the agreement has
the closest connection, has the same public policy as that which prevails in England. Because of
that policy, the courts of Qatar would not enforce the agreement.
In my judgment, the English courts should not enforce an English law contract which falls to
be performed abroad where: (i) it relates to an adventure which is contrary to a head of English
public policy which is founded on general principles of morality, and (ii) the same public policy
applies to the country of performance so that the agreement would not be enforceable under
the law of that country.
In such a situation international comity combines with English domestic public policy to
militate against enforcement.
This reasoning suggests that, unless the foreign public policy rule invoked is shared by
the forum, it will not operate to displace the normally applicable lex causae, particularly
where the forum contacts are strong. The point is illustrated by Royal Trustco Ltd v Campeau
Corp (1980), 31 OR (2d) 75, 118 DLR (3d) 207 (H Ct J), aff’d (1980), 31 OR (2d) 130, 118 DLR (3d)
271 (CA). That case involved an application for an injunction under the Canada Business Cor-
porations Act, SC 1974-75-76, c 33 to restrain until trial a takeover bid by Campeau Corpora-
tion, a Canadian real estate development corporation, to acquire the shares of Royal Trustco
Limited, a Canadian-based banking and trust company. Royal Trustco’s assets included a
Florida bank, and the prior approval of United States banking authorities to the takeover bid
had not been obtained contrary to United States banking laws, which, the evidence showed,
claimed to apply to transactions both within the United States and abroad. The applicant
based its case for an injunction on the ground, inter alia, that because of this violation of
United States law, the bid offended the principle in Foster v Driscoll, above, that a court will
not enforce a transaction valid by its proper law if the transaction is illegal under foreign law.
However, the evidence disclosed that the investment of Royal Trustco in Florida banks rep-
resented about 13 percent of its total investment in subsidiary companies or 5 percent of its
overall investments. In the light of the incidental nature of the connection to United States
law, Montgomery J rejected the applicant’s argument, reasoning (at 241-42):
The issue before me involves a take-over bid of a Canadian company with 95% of its assets in
Canada. The bid is made pursuant to federal and provincial statutes. It may be necessary that,
at some stage, the offeree will have to divest itself of the Florida banks [under United States
banking laws]. That should not, in my opinion, destroy the entire offer. I cannot conclude that
such an interpretation offends the principle in Foster v. Driscoll. …
I conclude that the Florida bank situation does not make the bid unlawful. To decide other-
wise would make the acquisition of a single Florida bank a guarantee of immunity against cor-
porate take-over.
3. Similarly, in McIntyre Porcupine Mines Ltd v Hammond (1975), 31 OR (2d) 452 (H Ct J), the
Ontario High Court refused to give “extraterritorial effect” to the insider trading provision of
the United States Securities Exchange Act (1934), requiring an officer of a corporation to
account to the corporation for a profit made on the sale of the corporation’s stock within 6
months of acquiring it, where both the officer and the corporation were Canadian, the rel-
evant conduct occurred outside the United States, the sale complied with the terms of the
officer’s employment contract, and the only connection with United States securities law
seemed to be that the company’s shares were traded on stock exchanges in that country as
well as in Canada.
4. Article 7(1) of the Rome Convention (Convention on the Law Applicable to Contractual
Obligations (1980)) vested the courts in contracting states with the discretion to apply a
mandatory rule of the law of another country with which the situation has a close connec-
tion to override the applicable law designated by the convention. The convention was
replaced by the Rome I Regulation. The new provision in art 9 restricts the scope of the dis-
cretion considerably. Overriding effect may only be given to the mandatory rules of the
country of contractual performance (as opposed to the law of any closely connected coun-
try) and then only insofar as those rules render unlawful the performance of the contract.
This modification effectively codifies the common law position as reflected in Foster and
Regazzoni, above.
Article 9
Overriding mandatory provisions
• • •
3. Effect may be given to the overriding mandatory provisions of the law of the country
where the obligations arising out of the contract have to be or have been performed, in so far
as those overriding mandatory provisions render the performance of the contract unlawful. In
considering whether to give effect to those provisions, regard shall be had to their nature and
purpose and to the consequences of their application or non-application.
5. The 2015 Hague Principles also recognize the potential for the overriding mandatory
laws or the public policy of a state, other than the forum state or the state whose law has
been contractually chosen, to qualify the contractually chosen law: see arts 11(2) and (4).
D. Contractual Choice of Law Clauses and Protection of the Weaker Party

CQLR c C-1991
3117. The choice by the parties of the law applicable to a consumer contract does not
result in depriving the consumer of the protection to which he is entitled under the
mandatory provisions of the law of the country where he has his residence if the formation
of the contract was preceded by a special offer or an advertisement in that country and
the consumer took all the necessary steps for the formation of the contract in that country
or if the order was received from the consumer in that country.
The same rule also applies where the consumer was induced by the other contracting
party to travel to a foreign country for the purpose of forming the contract.
If no law is designated by the parties, the law of the place where the consumer has his
residence is, in the same circumstances, applicable to the consumer contract.
3118. The choice by the parties of the law applicable to a contract of employment
cannot result in depriving the worker of the protection afforded to him by the mandatory
rules of the law of the State where the worker habitually carries on his work, even if he is
on temporary assignment in another State, or, if the worker does not habitually carry on
his work in any one State, the law of the State where his employer has his domicile or
establishment.
In the absence of a designation by the parties, the law of the State where the worker
habitually carries out his work or the law of the State where his employer has his domicile
or establishment is, in the same circumstances, applicable to the contract of employment.
NOTES
1. Articles 6 and 8 of the Rome I Regulation similarly limit party autonomy to select the
governing law so as to preserve the application of the mandatory protective provisions of a
consumer or employee’s home jurisdiction when the contract is closely connected to that
law.
2. The Uniform Law Conference of Canada has adopted similar uniform legislation aimed
at ensuring that consumers are entitled to the protection of their home jurisdiction’s manda-
tory rules when the contract is closely connected to that law notwithstanding a choice of law
clause in the relevant contract in favour of a different law: see Consumer Contract—Uniform
Jurisdiction and Choice of Law Act 2004, online: <http://www.ulcc.ca>. To date, the statute has
not been adopted by any of the common jurisdictions. It follows that the availability of the
protective provisions of the consumer or employee’s home law notwithstanding the choice
of a different law to govern the contract is left to be decided on a case-by-case basis: see
further Blom (2014); Walsh.
E. Public Policy and Choice of Law in the Interprovincial Context

Assuming that the relevant law is within the constitutional authority of an enacting province,
can the public policy exception be invoked to exclude the application of that law in a claim
initiated in another Canadian province? In the United States, the answer, in theory, is yes. In
practice, public policy rarely figures as a defence to the application of a sister state law in the
United States. First, in the interstate context, “it will be a rare case in which a claim validly
existing under the law of one American state can be said to be so far outside the pale of
social, economic, and moral standards currently imposed by our civilization as to be violative
of the strong public policy of any sister state”: McDougal, Felix & Whitten, §44 at 16. Second,
in cases where the forum has no relationship to the issues or the parties, it will not assume
jurisdiction over the claim, thereby avoiding any potential public policy conflict. Third, in
cases where there is a sufficient connection with the forum to support jurisdiction, “con-
siderations of public policy enter earlier in the analysis: as part of the choice of law process
itself. This appears clearly from two of the ‘choice-of-law principles’ suggested by the
Restatement, Second in its §6: ‘… (b) the relevant policies of the forum, (c) the relevant poli-
cies of other interested states and the relative interests of those states in the determination
of the particular issue’ ”: Hay, Borchers & Symeonides at 170.
IV. PUBLIC POLICY AND JURISDICTION

A. Introduction
Public policy concerns can arise in a wide range of jurisdictional contexts. This section con-
siders two common examples. The first involves overriding mandatory forum policy being
invoked as a basis for the forum court to assume or retain jurisdiction on the theory that if
the dispute is instead adjudicated in a foreign venue the forum state’s regulatory policy will
not be recognized or enforced. When this issue arises in the context of a contract containing
an exclusive choice of forum clause in favour of a foreign court, forum regulatory policy
comes into direct conflict, as will be seen, with forum policy favouring party autonomy in
international contracts.
The second example involves the law on domestic relations, particularly in cases where
there is profound conflict between forum and foreign conceptions of marriage. That conflict
is examined below in the context of jurisdiction in marriage dissolution proceedings.
B. Overriding Mandatory Forum Rules and Contractual Forum

Selection Clauses
At the jurisdictional level, forum public policy may persuade a court to retain jurisdiction in
a forum non conveniens analysis if the effect of staying the action in favour of another forum
would deprive the plaintiff of regulatory protection available under forum law. The issue arose
in Avenue Properties Ltd v First City Development Corporation Ltd (1986), 32 DLR (4th) 40 (BCCA)
(reproduced in Chapter 13). The British Columbia Court of Appeal refused to stay an application
for a declaration that a contract for the purchase of real estate in Ontario was unenforceable
because of the failure of the defendant to comply with the prospectus requirements of British
Columbia’s Real Estate Act. The concern was that if the action were instead remitted to the
IV. Public Policy and Jurisdiction 103
Ontario courts, the same argument could not be made because the Ontario court would not
be bound to apply the British Columbia statute to override the parties’ choice of Ontario law
as the governing law of their contract. On the other hand, if British Columbia retained juris-
diction, the plaintiff would have a good argument that the British Columbia statute applied,
notwithstanding the choice of Ontario law as the governing law, because the plaintiff’s
dealings with the defendant took place in British Columbia and the policy underlying the
prospectus requirement was targeted at the protection of British Columbia investors and
the British Columbia investment market.
In cases in which the contract also contains a choice of court clause giving exclusive juris-
diction to foreign courts, the court may still retain jurisdiction, but only if “strong cause” is
shown as to why the clause should not be enforced: see Chapter 7. While depriving the
plaintiff of forum regulatory protection should in theory count as “strong cause” for not
enforcing an exclusive choice of court clause, the common law jurisprudence has not been
inclined to so conclude in the absence of express legislative direction. Thus, in Ash v Lloyd’s
Corp (1992), 9 OR (3d) 755 (CA), discussed in Society of Lloyd’s v Meinzer, above, the court
enforced an exclusive forum selection clause in favour of the English courts despite the fact
that the effect of doing so deprived the Ontario plaintiffs of the protection of the mandatory
provisions of Ontario securities legislation and despite the fact that their investments had
been solicited in Ontario: see also Douez v Facebook, Inc, 2015 BCCA 279 at paras 70-71, leave
to appeal granted, 2016 CanLII 12162 (SCC).
On the other hand, on similar facts to Ash, the Victorian courts in Australia refused to
grant a stay in favour of litigation previously commenced in England on the ground that the
remedies available to the Australian Lloyd’s investors under the Australian Trade Practices Act
1974 would not be available in England, even though the plaintiff had expressly agreed to
the exclusive jurisdiction of the English courts: see Commonwealth Bank v White; Ex parte
Lloyd’s, [1999] 2 VR 681 at 704: “It is undesirable that parties should, by entering into an
exclusive jurisdiction agreement, be able to circumvent a legislative scheme established by
Parliament to protect investors purchasing interests or prescribed interests.” The decision
was upheld on appeal.
The idea that forum public policy may limit party autonomy to choose a particular forum
to adjudicate a dispute is recognized in the Hague Choice of Court Convention. Under art 6,
a court of a contracting state other than the chosen court must dismiss proceedings to
which an exclusive choice of court agreement applies subject to only a very limited number
of exceptions. One of those exceptions (art 6(c)) is where “giving effect to the agreement
would lead to a manifest injustice or would be manifestly contrary to the public policy of the
State of the court seised.”
Article 3149 of the Civil Code of Quebec is a good example of a legislative provision
expressly denying effect to a choice of forum clause derogating from the jurisdiction of
Quebec authorities to adjudicate a claim involving a consumer contract or a contract of
employment if the claimant is a consumer or worker domiciled or resident in Quebec:
3149. Québec authorities also have jurisdiction to hear an action based on 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.
The aim of the provision is to prevent a choice of forum clause that indirectly might have
the effect of depriving the consumer or worker, as the presumptively weaker party to the
contract, of the protection of Quebec consumer and employment standards legislation by
requiring claims to be brought in a distant forum. In a similar vein, the Brussels I Regulation
(recast) in Europe provides special jurisdictional rules for insurance, consumer, and employ-
ment contracts that permit the “weaker party” to these contracts to sue in the state of their
domicile where the specified conditions are met and allows for the ability to contract out of
these rules only in very limited circumstances: see Regulation (EU) No 1215/2012 of the Euro-
pean Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and
enforcement of judgments in civil and commercial matters, arts 10-23.
The effectiveness of art 3149 of the Quebec Civil Code was undercut in the arbitral con-
text by the decision of the Supreme Court in Dell Computer Corp v Union des consommateurs,
2007 SCC 34, [2007] 2 SCR 801. The case involved the enforceability of mass arbitration
clauses in consumer sales contracts entered into by Quebec consumers over the Internet
with a company headquartered in Ontario. When class action proceedings were instituted
in the Quebec courts, the company objected on the basis that the arbitration clause man-
dated that all consumer complaints be referred to arbitration. The court concluded that the
clause was indeed effective to bar recourse to the Quebec courts, notwithstanding that
art 3149 expressly stated that a contractual waiver of jurisdiction could not be set up against
a consumer. In the court’s view, art 3149 applied only where there was a relevant foreign
element and the parties’ choice of arbitration—a “neutral” institution without a forum and
without a geographic basis—did not create the foreign element necessary to trigger the
application of the section. The direct impact of the decision was reversed to a great extent
by the following intervening amendment to the Quebec Consumer Protection Act, RSQ
c P-40.1:
11.1. Any stipulation that obliges the consumer to refer a dispute to arbitration, that restricts
the consumer’s right to go before a court, in particular by prohibiting the consumer from bring-
ing a class action, or that deprives the consumer of the right to be a member of a group bringing
a class action is prohibited.
If a dispute arises after a contract has been entered into, the consumer may then agree to
refer the dispute to arbitration.
To a like effect, see the Consumer Protection Act, 2002, SO 2002, c 30, Schedule A, s 7.
In Seidel v TELUS Communications Inc, 2011 SCC 15, [2011] 1 SCR 531, the Supreme Court of
Canada, noting that Quebec and Ontario had, by statute, barred the enforceability of pre-
dispute arbitration clauses in consumer contracts altogether, interpreted a provision in a
British Columbia consumer protection statute making void “[a]ny waiver or release by a
person of the person’s rights, benefits or protections under this Act” to prevent a supplier of
wireless phone services from enforcing an arbitration clause against the consumer in respect
of certain rights of action under the statute of a public order nature. A similar interpretation
would likely be given to a choice of court clause in favour of a court outside British Columbia.
In Manitoba, s 209 of the Consumer Protection Act, CCSM c C200, expressly nullifies any term
of a contract for cell phone services that restricts jurisdiction to a forum outside the prov-
ince. In the context of franchise contracts, s 10 of Ontario’s Arthur Wishart Act (Franchise Dis-
closure), SO 2000, c 3, declares void, with respect to claims enforceable under the statute,
IV. Public Policy and Jurisdiction 105
“[a]ny provision in a franchise agreement purporting to restrict the application of the law of
Ontario or to restrict jurisdiction or venue to a forum outside Ontario.” For a discussion of
these examples and others, see Blom (2014) at 24-27; Walsh; and Saumier.
C. Public Policy and Jurisdiction in Marriage Dissolution Proceedings

In Hincks v Gallardo, 2014 ONCA 494, the applicant and respondent were Canadian citizens
and same-sex partners who, while living in the United Kingdom, had entered into a civil
partnership under the Civil Partnership Act 2004 (UK), 2004, c 33. At the time, the United
Kingdom did not permit same-sex marriage. Instead, the Civil Partnership Act created a paral-
lel regime that afforded same-sex partners the same rights as civil marriage. The relationship
ended after their return to Canada and the applicant applied for divorce, equalization of net
family property, and spousal support. The respondent argued that since the parties were not
married, the application disclosed no cause of action. The applicant then moved for a dec-
laration that the parties’ civil partnership was a marriage within the meaning of Canada’s
Civil Marriage Act. The attorney general of Ontario intervened to support the applicant’s
position, while the attorney general of Canada supported the respondent’s position. The
motions judge accepted the Ontario attorney-general’s position, concluding that to apply
the then-English policy against recognizing same-sex partnerships as marriage would con-
flict with fundamental Canadian public policy requiring the equal treatment of same-sex
partners. Justice Hourigan for the Court of Appeal for Ontario dismissed the appeal.
Hincks v Gallardo
2014 ONCA 494
[5] … I agree with the conclusions reached by the motion judge, and with her very
thorough and thoughtful reasons. Her interpretation of the terms “spouses” and “mar-
riage” is entirely consistent with one of the fundamental purposes of the DA [Divorce Act]
and the FLA [Family Law Act]—that is, to provide an equitable and certain process for
resolving economic issues on the dissolution of a conjugal relationship. To the extent that
any ambiguity exists in the relevant legislation, the motion judge’s interpretation is con-
sistent with Charter values and should be preferred
• • •
[29] Under the FLA, parties to relationships that are both formally and functionally
equivalent to marriage may be considered spouses under s. 1 of the Act. Parties who have
undergone a marriage ceremony or event in good faith but did not have the capacity to
enter into the marriage (e.g. by reason of prohibited degrees of consanguinity) may still
be considered spouses for the purposes of the FLA. Similarly, parties to a voidable mar-
riage may also be considered spouses, as will spouses to a polygamous marriage if the
marriage was celebrated in a jurisdiction that recognizes such unions as legally valid. The
appellant’s interpretation of the legislation would result in an anomalous situation where
parties to marriages that are not legal in Canada, such as polygamous marriages, can be
considered spouses but parties to same-sex marriages, which are legal in Canada, cannot
be considered spouses. This type of illogical result must be avoided.
[30] The appellant submits that the motion judge’s decision has the effect of forcing
the parties into a non-consensual marriage and is, therefore, contrary to Nova Scotia
(Attorney General) v. Walsh [2002 SCC 83, [2002] 4 SCR 325]. I agree with the analysis
of the motion judge on this issue. The appellant’s argument fails to recognize that there
is a fundamental difference between couples who choose not to marry and instead cohabit
and the parties in this case, who chose not to cohabit and instead entered into a status
that was the equivalent to marriage for same-sex couples. There is, in these circumstances,
no element of coercion or impairment of personal autonomy.
• • •
[35] The appellant criticizes the motion judge for failing to consider the U.K.’s recent
passage of the Marriage (Same Sex Couples) Act 2013 (U.K.), c. 30 (“the U.K. Marriage
Act”). The U.K. Marriage Act legalizes same-sex marriage in England but preserves the
existing civil partnership regime. The appellant argues that the U.K. Marriage Act supports
his submission that the parties’ choice to become civil partners is distinct from the choice
to marry, and that this distinction has been recognized by the U.K. Parliament.
[36] The motion judge can hardly be faulted for failing to take into account legislation
that had not been enacted at the time of the motion … or at the time of the release of her
reasons … . In any event, even if all parts of the U.K. Marriage Act were fully in effect, it
would make no difference to the result because the parties’ relationship was only ever
governed by the legislative scheme in place at the time they entered into their civil union. …
[37] The appellant submitted that the motion judge erred in law by failing to consider
the fact that the respondent could enforce his rights under Part IV of the FLA. That part
of the legislation deals with domestic contracts. …
• • •
[41] It is evident from the plain meaning of the wording of Part IV that these provi-
sions of the FLA are intended to deal with agreements entered into by individuals. They
are fundamentally different from civil partnerships under the U.K. legislation. Those
partnerships are intended to have the effect of changing the legal status of the parties.
They engage the power of the state to sanction such relationships and they require state
involvement to bring about their termination. These are not mere contracts between
parties.
[42] Even if the language of Part IV of the FLA could be construed in the manner
suggested by the appellant, thus giving rise to an ambiguity, I would decline to adopt the
appellant’s interpretation. The notion of requiring same-sex couples to enforce their rights
through this cumbersome and ill-suited process is in effect the same as sanctioning a
“separate but equal” regime for same-sex couples. Such a parallel regime has been
expressly rejected by this court in Halpern [v Canada (Attorney General) (2003), 65 OR
(3d) 161 (CA)] and is inconsistent with Charter values.
Hincks reflects the general proposition that where Canadian public policy confers a status
on a relationship that is in conflict with the policy of another state, it is Canadian public policy
that will generally prevail. Canadian public policy may also persuade a court to exercise divorce
or annulment jurisdiction in the converse case where a marriage, while recognized as valid
under the foreign law where it was celebrated, is invalid in the eyes of Canadian law for rea-
sons of Canadian public policy. The point is illustrated by Azam v Jan, 2013 ABQB 301. The case
V. Penal Laws 107
arose from a divorce application initiated in Alberta by the second spouse of the respondent,
to whom she was married in Pakistan where polygamous marriages are recognized as valid.
Although the applicant was still domiciled in Pakistan at the time of the marriage, the
respondent, relying on his own pre-nuptial domicile in Canada where polygamous marriages
are prohibited, sought a declaration that his marriage to the applicant was void ab initio.
The Alberta court first had to consider whether it had jurisdiction to entertain either appli-
cation in light of Hyde v Hyde (1866), LR 1 P & D 130, [1861-73] All ER Rep 175. In Hyde, the
English court had denied an application for an annulment because the polygamous marriage
in question was fundamentally incompatible with English law and the English concept of
marriage such that the English courts should not acknowledge it by taking jurisdiction. Citing
the evolving jurisprudence and doctrine, the Alberta court concluded that Canadian courts,
for reasons of public policy including the equal status of women, should recognize a foreign
polygamous marriage as valid for the purposes of divorce jurisdiction if both parties had cap-
acity under the law of their ante-nuptial domiciles to enter into the marriage at the time it was
celebrated. Moreover, even if the marriage was invalid from the outset owing to the incapa-
city of one of the parties, as in the case before the court, public policy required the court to
take jurisdiction to issue a declaration that the marriage is void ab inito and annulled:
[44] I find that in all the circumstances, and in the interests of public policy, this Court
should take jurisdiction over valid and invalid foreign polygamous marriages. The Hyde decision
of 1866 is outdated and no longer reflects Canadian realities. In the 147 years since Hyde, Can-
ada has become a very different place. At the time Hyde was decided, Canada had not yet even
reached nationhood. Today’s Canada is a proud cultural mosaic and the law should provide
remedies where possible to meet the needs of all Canadians including both citizen and perma-
nent resident. To fail to do so would leave parties without recourse and it would invariably
exclude immigrant families from rights accorded other Canadians when marriages, however
forged, break down.
V. PENAL LAWS
A. Jurisdiction and Choice of Law in Crime
While the scope of private international law is limited to private (civil and commercial) law
issues, the dividing line from public law is sometimes murky. However, criminal matters are
clearly excluded. This exclusion has deep roots
The common law considers crimes as altogether local, and cognizable and punishable exclu-
sively in the country, where they are committed. No other nation, therefore, has any right to
punish them; or is under any obligation to take notice of, or enforce any judgment, rendered in
such cases by the tribunals having authority to hold jurisdiction within the territory, where they
are committed.
Story, §619 at 516. The same idea is cogently expressed in Chief Justice Marshall’s frequently
quoted maxim that “the courts of no country execute the penal laws of another”: The Ante-
lope, 23 US 337 (10 Wheat) 66 at 123 (1825).
There is perhaps no more direct mirror of the social and economic values of a state than
its criminal law. The penal exception thus avoids the necessity for courts to engage in diffi-
cult value judgments about the fairness and wisdom of a foreign country’s criminal justice
policies. Viewed in this light, the principle is essentially an a priori application of the general
public policy exception: Moore v Mitchell, 30 F (2d) 600 at 604 (2d Cir 1929).
The result of the mutual antipathy expressed by states to the enforcement of each other’s
penal laws means that choice of law in crime is subsumed within the rules governing juris-
diction—that is, a decision to assume jurisdiction in a criminal proceeding carries with it a
decision to apply that country’s domestic criminal law to the relevant conduct.
The limits of domestic criminal jurisdiction (and choice of law) are set by the principle of
territorial sovereignty—a state has jurisdiction to apply its penal laws only over crimes that
occur within its own territorial limits and, conversely, has no jurisdiction over crimes that occur
outside its borders. According to La Forest J in Libman v The Queen, [1985] 2 SCR 178 at 208:
[T]he territorial principle in criminal law was developed by the courts to respond to two prac-
tical considerations: first, that a country has generally little direct concern for the actions of
malefactors abroad, and second, that other states may legitimately take umbrage if a country
attempts to regulate matters taking place wholly or substantially within their territories. For
these reasons the courts adopted a presumption against the application of laws beyond the
realm, a presumption later codified in this country in s. 5(2) of the Criminal Code.
Other states may, however, claim a territorial authority to regulate the same events or
activities, as in the case of transnational criminal activity or where jurisdiction is based on the
nationality of the offender regardless of the locus of the relevant conduct. Concurrent and
possibly conflicting criminal jurisdiction is thus inevitable. In Libman, La Forest J for the
Supreme Court of Canada endorsed a jurisdictional rule that gives Canadian courts authority
under s 5(2) (now s 6(2)) of the Criminal Code over any crime that bears a “real and substantial
connection” to this country, whether or not territorial jurisdiction is also available in another
state (at 212-13):
I am … aware that the view I have taken leaves open the possibility that a person could be
prosecuted for the same offence in more than one country, but any injustice that might result
from this eventuality could be avoided by resort to the pleas of autrefois acquit and autrefois
convict, which have been applied to persons tried in other countries … .
I might summarize my approach to the limits of territoriality in this way. As I see it, all that is
necessary to make an offence subject to the jurisdiction of our courts is that a significant por-
tion of the activities constituting that offence took place in Canada. As it is put by modern
academics, it is sufficient that there be a “real and substantial link” between an offence and this
country, a test well known in public and private international law; see Williams and Castel, …
[Canadian Criminal Law: International and Transnational Aspects, ch 2, at 71 et seq]; Hall, … [“Ter-
ritorial Jurisdiction and the Criminal Law” (1992) Crim L Rev 276]. As Professor Hall notes (p. 277),
this does not require legislation. It was the courts after all that defined the manner in which the
doctrine of territoriality applied, and the test proposed simply amounts to a revival of the earlier
way of formulating the principle. It is in fact the test that best reconciles all the cases. …
That this approach is attuned to modern times is evident from the fact that some variant of
it has been recommended by numerous law reform bodies or adopted in legislation; see, inter
alia, the English Law Commission’s Report on the Territorial and Extraterritorial Extent of the Crim-
inal Law (Law Com. 91, 1978); the American Law Institute’s Model Penal Code (Proposed Official
Draft, 1962) para. 1.03; the New Zealand Crimes Act, 1961, 1961 (NZ), c. 43, s. 7 and the … Law
Reform Commission of Canada’ Working Paper No. 37, Extraterritorial Jurisdiction, Part III.
Just what may constitute a real and substantial link in a particular case, I need not explore.
There were ample links here. The outer limits of the test may, however, well be coterminous with
the requirements of international comity.
V. Penal Laws 109
While the territorial principle of criminal jurisdiction in s 6(2) of the Criminal Code remains
the general rule, there has been a steady expansion of Canadian extraterritorial criminal
jurisdiction, often pursuant to international treaty commitments, where there is a specified
nexus between Canada and the offender, the victim, or the circumstances of the offence. A
list with statutory references is available online: Parliament of Canada <http://www.lop.parl
.gc.ca/content/lop/researchpublications/prb0117-e.htm>.
The parallels are clear between the jurisdictional test for crime articulated in Libman and
the court’s subsequent adoption—in Morguard Investments Ltd v De Savoye [1990] 3 SCR
1077, 76 DLR (4th) 256—of an equivalent limiting principle for territorial jurisdiction in in
personam civil proceedings. However, the assumption of jurisdiction in a civil as opposed to
a criminal proceeding does not necessarily carry with it the application of domestic substan-
tive law to the merits. It follows that the extent of the contacts necessary to satisfy the “real
and substantial connection” standard is correspondingly diluted in the civil context: see
Chapter 6.
B. Recognition of Foreign Penal Laws

The penal exception is limited to denying a foreign sovereign the power to enforce its crim-
inal laws outside the territory of their enactment. It does not preclude forum recognition of
the relevant law in other contexts. As we saw above in the discussion on public policy, the
courts have been prepared to invoke illegality under a foreign penal law as a basis for refus-
ing to give effect to a transaction valid under its normally applicable law. Indeed, Canadian
courts may be under a positive statutory obligation to penalize indirectly a breach of foreign
criminal law: see e.g. s 465(3) of the Criminal Code, which makes it an offence for a person,
while in Canada, to conspire with anyone to commit an offence abroad that is an offence
under the foreign law where the offence is committed; on the requirements for a charge
under that section, see Gunn v The Queen, [1982] 1 SCR 522, 44 NR 307.
Another important qualification on the penal exception arises in cases where an extradi-
tion treaty has been concluded with the foreign country. Here, a Canadian court will
indirectly assist enforcement by ordering the return of the person charged with breaking the
criminal law of a foreign legal system for trial and punishment in that country. Extradition
treaties typically contain qualification clauses designed to avoid any conflict with fundamen-
tal forum public policy. Thus, it is commonly made a condition of extradition that the foreign
crime for which extradition is sought also constitute a crime under forum law (the so-called
double criminality requirement): see MM v United States of America, 2015 SCC 62, and Re
McVey; McVey v United States of America, [1992] 3 SCR 475. Extradition is usually also pro-
hibited where the person whose extradition is sought has already been tried for the same
offence in the territory of the requested state (but not apparently in the requesting state, at
least in the absence of positive provision: see Canada v Schmidt, [1987] 1 SCR 500).
A more difficult public policy question arises in cases where the double criminality
requirement is satisfied but the punishment imposed by the foreign state is gravely dispro-
portionate to the forum sanction for the same offence. Canadian legislation does not pur-
port to forbid extradition in such cases. Rather, s 40(3) of the Extradition Act, SC 1999, c 18
vests the minister of justice with a discretion to seek assurances from the requesting state
that a particular sentence will not be carried out or otherwise impose conditions on the sur-
render. The minister’s discretion is not absolute. It must be exercised in accordance with the
restrictions set out in s 44(1) of the Extradition Act and the fundamental justice provision in
s 7 of the Charter: see Lake v Canada (Minister of Justice), 2008 SCC 23 at para 22, [2008] 1 SCR
76. Section 43(1) of the Extradition Act provides that an individual who has been committed
for extradition may make submissions against surrender to the minister and the minister
must consider them before making his or her decision and give adequate reasons if the deci-
sion is to order surrender: see Baker v Canada (Minister of Citizenship and Immigration), [1999]
2 SCR 817. The minister’s decision is subject to judicial review.
In general, the courts have deferred to the minister’s decisions assessed against the usual
judicial review standard of reasonableness rather than correctness: see Lake, above. It is only
if the punishment potentially imposed by the requesting state would “shock the conscience”
of Canadians or be “simply unacceptable” that s 7 of the Charter obligates the minister to
seek assurances against it being imposed: see Canada v Schmidt, [1987] 1 SCR 500 at 522, and
United States v Allard, [1987] 1 SCR 564 at 572. While lengthy mandatory jail terms have been
held not to “shock the conscience,” extradition to face the death penalty generally does and
the Supreme Court of Canada has held that in “all but exceptional cases” the minister is
compelled to seek assurances that it will not be imposed: see United States of America v Burns,
2001 SCC 7, [2001] 1 SCR 283, 195 DLR (4th) 1; Haigh.
In a similar vein, in a case concerning the deportation from Canada of a suspected Tamil
terrorist, the Supreme Court of Canada concluded:
[72] … [T]he balance struck by the Minister [in exercising the discretion conferred on her by
the Immigration Act, RSC 1985, c I-2] must conform to the principles of fundamental justice
under s. 7 of the Charter. It follows that insofar as the Immigration Act leaves open the possibility
of deportation to torture, the minister should decline to deport refugees where on the evidence
there is a substantial risk of torture.
Suresh v Canada (Minister of Citizenship and Immigration) 2002 SCC 1, [2002] 1 SCR 3, 208 DLR
(4th) 1 at 39.
The existence of extradition treaties can pose questions of forum conveniens in cases
where the relevant conduct is punishable under the laws of both the requesting and
requested state. The Supreme Court of Canada has generally left it to the executive to
decide whether to prosecute in Canada or extradite abroad, even in cases when the crime,
though of a transnational nature, was committed by a Canadian in Canada so as to involve a
prima facie infringement of the right of a citizen to remain in Canada guaranteed by s 6(1) of
the Charter: see United States of America v Cotroni, [1989] 1 SCR 1469, 48 CCC (3d) 193. A simi-
lar tendency to defer to the executive on jurisdictional issues is seen in United States of
America v Lépine, [1994] 1 SCR 286, 87 CCC (3d) 385. In that case, a majority determined that
the Canadian executive, not the extradition judge, is vested with the authority in the context
of the Canada – United States Extradition Treaty to consider whether the requesting state
had sufficient territorial jurisdiction to prosecute the fugitive for the offence.
What is the appropriate response where compliance with domestic penal law would lead
to a violation of foreign penal law? The leading Canadian case is Spencer v The Queen, [1985]
2 SCR 278, 21 DLR (4th) 756. An officer of a Canadian bank was subpoenaed to give evidence
in an income tax prosecution of a customer of the bank arising from transactions in the
Bahamas. He objected to testifying on the ground that he would thereby commit an offence
under the secrecy provisions of Bahamian law. The Supreme Court of Canada ruled that he
was nonetheless compelled to testify. But Estey J recognized that Canadian courts, in the
V. Penal Laws 111
interests of comity, should not lightly disregard the foreign law and the witness should there-
fore be allowed time to obtain an order in the Bahamas permitting the testimony, failing
which, however, the Canadian courts would have no option but to proceed: see also Caterpil-
lar Tractor Co v Ed Miller Sales & Rentals Ltd, 1988 ABCA 282, 61 Alta LR (2d) 319; Comaplex
Resources International Ltd v Schaffhauser Kantonalbank (1990), 42 CPC (2d) 230 (Ont Sup Ct J).
Treaties that provide for mutual legal assistance in the procurement of evidence for use
in domestic criminal prosecutions are increasingly common between states: see e.g. the
schedule to the Mutual Legal Assistance in Criminal Matters Act, RSC 1985, c 30 (4th Supp). If
there is no agreement between Canada and a state, the minister of foreign affairs may enter
into an individual administrative arrangement providing for legal assistance with respect to
an investigation: s 6(1). Conflict of laws problems can arise where the exclusionary or consti-
tutional rules of the foreign state in which the evidence was procured differ from those of
the forum whose criminal law was allegedly violated. A qualified rule in favour of the law of
the place where the evidence is obtained was adopted by the Supreme Court of Canada in
R v Harrer, [1995] 3 SCR 562. The appellant had been tried and convicted in Canada on the
basis of a statement made to police in the United States. At issue was whether the failure of
the American police to comply with Canadian Charter requirements—specifically, the
requirement that Canadian police must give an accused a second warning when an interro-
gation changes focus—made the statement inadmissible in Canada. In dismissing the
appeal, the court ruled that the Charter had no direct application to interrogations con-
ducted abroad by foreign authorities. However, the majority emphasized that an entirely
different issue would have arisen had the interrogation about a Canadian offence been
made by Canadian peace officers in the United States—or by American authorities acting as
agents of the Canadian police—in circumstances that would constitute a violation of the
Charter had the interrogation taken place in Canada. Moreover, even where the evidence is
procured abroad by foreign authorities acting in their own right and in accordance with local
law, the evidence is still subject to exclusion under the Charter if the circumstances in which
it is obtained are such as to result in an unfair trial. However, evidence cannot be assumed to
be unfairly obtained or admitted merely because it is obtained in a manner that would vio-
late a Charter guarantee in this country: see also R v Terry, [1996] 2 SCR 207, 135 DLR (4th) 214;
R v Filinov (1993), 82 CCC (3d) 516 (Ont Gen Div); in the United States context, see Corr; Felix
& Whitten at 85-91.
C. Characterization
In accord with judicial attitudes to the general public policy exception, the courts have given
the concept of “penal laws” a relatively narrow construction for the purposes of applying the
exclusionary doctrine. The leading Anglo-Canadian case on the appropriate test is still Hun-
tington v Attrill.
Huntington v Attrill
[1893] AC 150 (PC) (Ont)
[A New York statute circa 1875 provided that “if any certificate or report made by the
officers of any … corporation shall be false in any material representation, all the officers
who shall have signed the same shall be jointly and severally liable for all the debts of the
corporation contracted while they are officers thereof.” In 1883, on the basis of this provi-
sion, Huntington, a creditor of a New York corporation, sued Attrill, one of the company’s
officers, in the Supreme Court of New York, for the unpaid balance of his loan, alleging
a material misrepresentation in a certificate signed by Attrill and the other officers stating
that the whole capital stock had been paid up in cash. In 1888, the court rendered judg-
ment in favour of Huntington for $100,240. Attrill failed to pay, so Huntington brought
an action on the New York judgment in the Ontario High Court where Attrill resided. In
his defence, Attrill argued that the New York judgment was based on a foreign penal law
and therefore irrecoverable in the Ontario courts. The defence was successful at trial and
on the initial appeal (where the Ontario Court of Appeal was equally divided) but the
Privy Council allowed Huntington’s appeal.]
LORD WATSON (Lords Halsbury, Watson, Bramwell, Hobhouse, Morris, and Stand
concurring):
Their Lordships cannot assent to the proposition that, in considering whether the
present action was penal in such sense as to oust their jurisdiction, the courts of Ontario
were bound to pay absolute deference to any interpretation which might have been put
upon the statute of 1875 in the state of New York. They had to construe and apply an
international rule, which is a matter of law entirely within the cognizance of the foreign
court whose jurisdiction is invoked. Judicial decisions in the state where the cause of
action arose are not precedents which must be followed, although the reasoning upon
which they are founded must always receive careful consideration, and may be conclusive.
The court appealed to must determine, for itself, in the first place, the substance of the
right sought to be enforced; and, in the second place, whether its enforcement would,
either directly or indirectly, involve the execution of the penal law of another state. Were
any other principle to guide its decision, a court might find itself in the position of giving
effect in one case and denying effect in another, to suits of the same character, in conse-
quence of the causes of action having arisen in different countries; or in the predicament
of being constrained to give effect to laws which were, in its own judgment, strictly penal. …
The rule [excluding penal laws from enforcement aboard] has its foundation in the
well-recognized principle that all breaches of public law punishable by pecuniary mulct
or otherwise, at the instance of the state government, or of someone representing the
public, are local in this sense; that they are only cognizable and punishable in the country
where they were committed. Accordingly no proceeding, even in the shape of a civil suit,
which has for its object the enforcement by the state, whether directly or indirectly, of
punishment imposed for such breaches by the lex fori, ought to be admitted in the courts
of any other country.
Their Lordships have already indicated that, in their opinion, the phrase “penal
actions,” which is so frequently used to designate that class of actions which, by the law
of nations, are exclusively assigned to their domestic forum, does not afford an accurate
definition. In its ordinary acceptation, the word “penal” may embrace penalties for infrac-
tions of general law which do not constitute offences against the state; it may for many
legal purposes be applied with perfect propriety to penalties created by contract; and it
therefore, when taken by itself, fails to mark that distinction between civil rights and
criminal wrongs which is the very essence of the jurisdictional rule. The phrase was used
V. Penal Laws 113
by Lord Loughborough and by Mr. Justice Buller in a well-known case (Folliott v. Ogden
(1789) 1 Hy Bl 123 at 135 and Ogden v. Folliott (1790) 3 Term Rep. 726 at 734) and also
by Chief Justice Marshall, who, in The Antelope (1825) 10 Wheat 123 thus stated the rule
with no less brevity than force: “The courts of no country execute the penal laws of
another.” Read in the light of the context, the language used by these eminent lawyers is
quite intelligible, because they were dealing with the consequences of violations of public
law and order, which were unmistakably of a criminal complexion. But the expressions
“penal” and “penalty,” when employed without any qualification, express or implied, are
calculated to mislead, because they are capable of being construed so as to extend the rule
to all proceedings for the recovery of penalties, whether exigible by the state in the interest
of the community, or by private persons in their own interest. …
[Lord Watson discussed the decision of the Supreme Court of the United States in Wis-
consin v The Pelican Insurance Co, 127 US 265 (1888), concluding with the following
quotation from Justice Gray, who delivered the judgment of the court.]
The rule that the Courts of no country execute the penal laws of another applies not only to
prosecutions and sentence for crimes and misdemeanours, but to all suits in favour of the
state for the recovery of pecuniary penalties for any violation of statutes for the protection
of its revenue or other municipal laws, and to all judgments for such penalties.
Their Lordships do not hesitate to accept that exposition of the law, which, in their
opinion, discloses the proper test for ascertaining whether an action is penal within the
meaning of the rule. A proceeding, in order to come within the scope of the rule, must
be in the nature of a suit in favour of the state whose law has been infringed. All the pro-
vision of municipal statutes for the regulation of trade and trading companies are presum-
ably enacted in the interest and for the benefit of the community at large; and persons
who violate these provisions are, in a certain sense, offenders against the state law, as well
as against individuals who may be injured by their misconduct. But foreign tribunals do
not regard these violations of statute law as offences against the state, unless the vindica-
tion rests with the state itself, or with the community which it represents. Penalties may
be attached to them, but that circumstance will not bring them within the rule, except in
cases where these penalties are recoverable at the instance of the state, or of an official
duly authorized to prosecute on its behalf, or of a member of the public in the character
of a common informer. An action by the latter is regarded as an actio popularis pursued,
not in his individual interest, but in the interest of the whole community. …
[Lord Watson analyzed the “stringent obligations” imposed on corporate officers by s 21

of the New York statute in issue, finding that their “plain object” was to ensure accurate
disclosure of the true condition of the finances of a corporation for the protection of the
public who might deal with it.]
The provisions of s. 21 are in striking contrast to the enactments of s. 34, which inflicts
a penalty of $100 upon every director or officer of a corporation with limited liability,
who authorizes or permits the omission of the word “limited” from its seal, official pub-
lications, or business documents. In that case, the penalty is recoverable “in the name of
the people of the state of New York by the district attorney of the county in which the
principal office of such corporation is located, and the amounts recovered shall be paid
over to the proper authorities for the support of the poor of such county.” It does not
admit of doubt that an action by the district attorney would be a suit in favour of the state,
and that neither the penalty, nor the decree of a New York court for its amount, could be
enforced in a foreign country.
In one aspect of them, the provisions of s. 21 are penal in the wider sense in which the
term is used. They impose heavy liabilities upon directors, in respect of failure to observe
statutory regulations for the protection of persons who have become or may become
creditors of the corporation. But, in so far as they concern creditors, these provisions are
in their nature protective and remedial. To use the language of Mr. Justice Osler in the
courts below, they give “a civil remedy only to creditors whose rights the conduct of the
company’s officers may have been calculated to injure, and which is not enforceable by
the state or the public.” In the opinion of their Lordships, these enactments are simply
conditions upon which the Legislature permits associations to trade with corporate
privileges, and constitute an implied term of every contract between the corporation and
its creditors.
NOTES
1. The proposition expressed by Lord Watson in Huntington v Attrill—that the lex fori
ultimately governs the characterization of a foreign law as penal—is widely accepted as
correct. But the views of the foreign court on the characterization issue are by no means
irrelevant. On the contrary, as Lord Watson stated, the forum court must always give careful
consideration to the reasoning on which the foreign court’s characterization ruling is based
and in some cases it may be conclusive. United States of America v Ivey, extracted above,
offers a striking example of a case where counsel’s reliance on judicial precedents in the lex
causae on the characterization issue proved highly persuasive, if not indeed conclusive:
The scope of the category “penal” laws was defined by the Privy Council in Huntington v. Attrill,
[1893] A.C. 150 at p. 157 … as …
… “all suits in favour of the state for the recovery of pecuniary penalties for any violation
of statutes for the protection of its revenue or other municipal laws, and to all judgments
for such penalties.”
In my view, the C.E.R.C.L.A. provisions imposing liability against the defendants cannot be
classified as penal in nature. In United States v. Monsanto, 858 F.2d 160 (4th Cir. 1988) at pp. 174-
75, C.E.R.C.L.A. was characterized as follows:
C.E.R.C.L.A. does not exact punishment. Rather it creates a reimbursement obligation on

any person judicially determined responsible for the costs of remedying hazardous
conditions at a waste disposal facility. The restitution of cleanup costs was not intended
to operate, nor does it operate in fact, as a criminal penalty or a punitive deterrent.
The measure of recovery is directly tied to the cost of the required environmental clean-up.
The court must be satisfied that the amounts it seeks to recover were actually expended in
response to the environmental threat, and that those costs were incurred in the manner pre-
scribed by C.E.R.C.L.A. and the National Recovery Plan. While the nature of liability imposed
V. Penal Laws 115
may be unexpected, it is restitutionary in nature and is not imposed with a view to punishment
of the party responsible.
2. The courts have occasionally invoked the language of penalty to refuse recognition to
foreign “confiscatory” laws transferring title to private property to the enacting state: see
Laane & Baltser v Estonian SS Line, [1949] SCR 530. However, foreign laws of this character are
excluded, as a general rule, only to the extent that they purport to affect title to property
located outside the territory of the enacting state: see further, below, Section VII.B, “Nation-
alization, Expropriation, and Confiscation Laws.” Although they do not involve a transfer of
title as such, foreign confiscatory laws are not dissimilar to foreign exchange control laws,
which have been recognized by the Canadian courts and enforced, as part of the proper law
of the contract, as against objections based on the penal laws exclusion: see Etler v Kertesz,
[1960] OR 672 (CA).
3. As United States of America v Ivey, above, illustrates, the definition endorsed by the
Privy Council effectively eliminates penalty as a defence to judgments on a primarily com-
pensatory claim, whether the judgment runs in favour of private persons or a governmental
agency. Thus, when a judgment under United States securities law is not a penalty, but
simply seeks to disgorge gains made in violation of such laws and return them to the victims,
Canadian courts are prepared to recognize the judgment even if the plaintiff is a foreign
government agent: see United States Securities and Exchange Commission v Robert H Cosby
and Global Action Investments Ltd, 2000 BCSC 338; United States (Securities and Exchange Com-
mission) v Peever, 2014 BCCA 141. Similarly, a judgment awarding punitive as well as compen-
satory damages in a civil action is not thought to come within the scope of the penal
exclusion: see Old North State Brewing Co v Newlands Services Inc, [1999] 4 WWR 573 (BCCA).
In the original American action giving rise to the judgment sought to be enforced in Hun-
tington, above, the Supreme Court of the United States arrived at a similar test: Huntington v
Attrill, 146 US 657 at 668 (1892):
The test whether a law is penal in the strict and primary sense, is whether the wrong sought to
be addressed in a wrong to the public or a wrong to the individual … the question whether a
statute of one state, which in some aspects may be called penal, is a penal law in the inter-
national sense, so that it cannot be enforced in the courts of another state depends upon the
question of whether its purpose is to punish an offence against the public justice of the state,
or to afford a private remedy to a person injured by the wrongful act. … The test is not by what
name the statute is called by the legislature or the courts of the state in which it was passed, but
whether it appears to the tribunal which is called upon to enforce it to be, in its essential char-
acter and effect, a punishment of an offence against the public, or a grant of a civil right to a
private person.
4. The decision of the Supreme Court of Canada in Pro-Swing Inc v Elta Golf Inc, 2006 SCC
52, [2006] 2 SCR 612 (reproduced in Chapter 8) arose from an attempt to enforce in Ontario
a civil contempt order issued by the United States District Court (Ohio) in relation to a trade-
mark infringement action against an Ontario company. The contempt order contained a
series of orders against the Ontario defendant for: (1) injunctive relief; (2) surrender of the
infringing goods; (3) an accounting of infringing sales; (4) compensatory damages; (5) costs;
(6) disclosure of the contact information of suppliers and purchasers of the infringing goods;
and (7) recall of infringing goods. In declining to enforce the contempt order, Deschamps J,
writing for the majority (LeBel, Fish, and Abella JJ concurring), characterized the contempt
order as “quasi-criminal” in nature and therefore potentially engaging the penal exception
to the enforcement of foreign judgments. In dissent, McLachlin CJ (Bastarache and Char-
ron JJ concurring) disagreed with the “penal” characterization (paras 108-109):
Foreign criminal contempt orders are clearly penal and cannot be enforced by Canadian courts.
The same should not be said of foreign civil contempt orders. When a foreign court issues a
contempt order to secure compliance with a private remedy flowing from a private dispute, the
order does not necessarily contain a “penal” aspect that should preclude enforcement by Can-
adian courts. Some foreign orders for “civil” contempt could nevertheless contain penal ele-
ments sufficient to disqualify them from enforcement by Canadian courts; in other cases, the
penal elements could be severable, allowing Canadian courts to enforce the private elements
only. The development of these principles can be left for future cases.
There is nothing penal about the contempt order in this case. The terms of the order are
designed to reinforce the consent decree and to provide Pro Swing with restitution for Elta
Golf’s violations.
VI. REVENUE LAWS

A. General

CQLR c C-1991
3155. A decision rendered outside Québec is recognized and, where applicable,

declared enforceable by the Québec authority, except in the following cases:
• • •
(6) the decision enforces obligations arising from the taxation laws of a foreign
State.
NOTE
The revenue or tax exclusion has similarly deep roots as the penal law exclusion. In the words
of Lord Mansfield, “[N]o country ever takes notice of the revenue laws of another”: Holman v
Johnson, alias Newland (1775), 1 Cowp 341 at 343, 98 ER 1120 at 1121. The same position has
generally been taken in other countries: see generally Mann.
The general Canadian position is still represented by United States of America v Harden,
[1963] SCR 366. That case arose out of an action taken in 1957 by the United States of Amer-
ica against Harden in the District Court of the southern district of California to recover
income tax arrears for the years 1945 and 1946. Judgment was eventually entered in 1961 for
$639,500 pursuant to a stipulation agreed to after pre-trial hearings before a district judge.
Harden, by then a resident of British Columbia, failed to pay and the United States brought
an action to enforce its judgment in the Supreme Court of that province. The United States
authorities based their right to sue on two principal arguments: (1) that although a foreign
sovereign cannot enforce its revenue laws by direct action in Canada, it is not prevented
from suing in a Canadian court to enforce a judgment for those same taxes obtained within
its own borders; and (2) alternatively, that Harden had consented to the signing of judgment
against her and the revenue exclusion did not reach a compromise agreement to pay money
VI. Revenue Laws 117
in satisfaction of a foreign tax claim. The Supreme Court of Canada, confirming the disposi-
tion in the courts below, rejected both arguments (at 371):
In [Gov’t of India, Ministry of Finance v Taylor, [1955] AC 491, [1955] 2 WLR 303], at p. 515, Lord
Somervell of Harrow recognizes and applies “… the special principle that foreign states cannot
directly or indirectly enforce their tax claims here.”
In my opinion, a foreign state cannot escape the application of this rule, which is one of
public policy, by taking a judgment in its own courts and bringing suit here on that judgment.
The claim asserted remains a claim for taxes. It has not, in our courts, merged in the judgment;
enforcement of the judgment would be enforcement of the tax claim.
Similarly, in my opinion, the argument that the claim asserted is simply for the performance
of an agreement, made for good consideration, to pay a stated sum of money must also fail. We
are concerned not with form but with substance, and if it can properly be said that the respond-
ent made an agreement it was simply an agreement to pay taxes which by the laws of the for-
eign state she was obligated to pay.
Neither the foreign judgment nor the agreement does more than make certain the fact and
the amount of the respondent’s liability to the appellant. The nature of the liability is not
altered, it is a liability to pay income tax.
Sixteen years after Harden, British Columbia sought to enforce in the United States courts
a judgment for logging taxes obtained in British Columbia against four residents of the
United States. In upholding the dismissal of the province’s action, the United States federal
court utilized negative reciprocity, citing the Harden decision: see Her Majesty the Queen v
Gilbertson, 597 F2d 1161 (9th Cir 1979).
B. Indirect Enforcement
Stringam v Dubois
1992 ABCA 325, 135 AR 64
[SD died domiciled and resident in Arizona. She named the Valley Bank of Oregon as
her executor and devised her Alberta wheat farm to her niece, the respondent (plaintiff).
Probate was issued out of the Superior Court of Arizona, and letters of administration,
with will and codicils annexed, were granted by the Alberta Surrogate Court, pursuant
to a power of attorney granted by the executor, to the appellant. The total estate was valued
at $1.9 million. The farm was valued at $431,000. United States estate tax was apportioned
with $149,000 applying against the farm. The devisee moved under s 8(3) of the Alberta
Devolution of Real Property Act, RSA 1980, c D-34 for an order requiring the conveyance
to her of the wheat farm. The executor sought a sale of the farm to satisfy the United States
estate taxes. Applying the tax exclusion, the Alberta Court of Queen’s Bench ruled in
favour of the devisee. The executor appealed.]
STRATTON JA (dismissing the appeal):

The issue raised by this appeal is whether, on the facts of this case, the rule against our
courts enforcing a tax claim of a foreign jurisdiction applies so as to allow the transfer of
Canadian realty to the devisee of that realty, rather than requiring that the property be
sold and the proceeds used firstly to pay United States estate taxes.
• • •
In argument before us, it was common ground that three cases in particular are critical
to the above stated issue.
The preferred starting point in a perusal of these cases is, in my view, the decision of
the Privy Council in Hardoon v. Belilios [1901] AC 118, which was relied on by the appel-
lant. That case raised the question of whether the person who is the mere registered owner
of shares is entitled to be indemnified by the beneficial owner for certain financial burdens
incidental to that ownership.
The relevance of that case is clear when one looks at the evidence of Robert Rosepink,
which was accepted by the trial judge “in relation to American tax laws and the manner
in which they affect the administration of this estate in the State of Arizona.” A summary
of his opinions (Exhibit 2 at trial) is attached as Appendix A to this judgment. In brief
these opinions set out various situations wherein either the Bank or the appellant could
be held liable under US law for unpaid US estate taxes if the wheat farm should be trans-
ferred without payment of the taxes.
In Hardoon v. Belilios, Lord Lindley enunciated the rule relied on by the appellant, as
follows:
The next step is to consider on what principle an absolute beneficial owner of trust property
can throw upon his trustee the burdens incidental to its ownership. The plainest principles
of justice require that the cestui que trust who gets all the benefit of the property should bear
its burden unless he can show some good reason why his trustee should bear them himself.
(emphasis added)
Then, at p. 127, in referring to a cestui que trust, he said:

The obligation of such a person to indemnify his trustee against calls upon them appears to
their Lordships indisputable in a court of equity unless, of course, there is some contract or
other circumstance which excludes such obligation. (emphasis added)
The next of the three key cases and the most important for our purposes, is United
States of America v. Harden [1963] SCR 366.
[The court reviewed the facts and ruling in Harden.]
The appellant argued that in the light of the facts in Harden the reference by Cart-
wright J to “indirect enforcement” should be limited to a similar factual situation, that is
an action based on a tax judgment. I find no support for that limitation in the decision
of the Supreme Court.
The appellant also suggested that a further important distinction be made between the
Harden decision and our cases in that in Harden the foreign government was the entity
seeking enforcement of the claim. This argument is also not supported by the Supreme
Court decision. The point is addressed squarely by Sheppard JA. In writing for the BC
Court of Appeal he said:
Also, the Courts will not entertain an action brought by an individual which will indirectly
have the effect of enforcing the revenue laws of a foreign country. (1963) 36 DLR (2d) 602
at 604. (emphasis added)
I have not overlooked the fact that the decision of the Supreme Court in Harden has
been criticized as an older rule that is not responsive to modern circumstances. (See Castel,
Canadian Conflict of Laws, 1st edition, p. 73 and The Conflict of Laws—McLeod 1983—
pp. 209-213.) Nevertheless the rule remains the law of Canada and I am bound by it.
I now turn to the last of the three key decisions—Re Reid (1970) 17 DLR (3d) 199
(BC CA). In that case an English company, subject to the laws of England, became the
trustee of an estate wherein the bulk of the assets were situate in BC. There were insuf-
ficient assets in England to pay the estate tax levied under English law. The appropriate
English statute also expressly made the trustee responsible for payment of the tax. The
trustee paid the tax and then sought reimbursement from the estate on the strength of
the rule in Hardoon v. Belilios (supra) and s. 97 of the BC Trustee Act (comparable to s. 25
of the Trustee Act, Ch. T-10, RSA 1980; see Appendix B). The success of that application
would have directly affected the entitlement of the remainderman under the will and
therefore he opposed it on the grounds that the rule in Harden constituted a sufficiently
“good reason” to oust the operation of s. 97 and the rule in Hardoon v. Belilios (supra).
Robertson JA, writing for the court in Reid, refused to apply the Harden rule. He
distinguished the Harden case from the one he was considering on two grounds:
1. He pointed out that in the cases before Harden to which he referred, wherein the
rule against enforcement of foreign revenue laws was applied, “success would have
enriched the treasury of the interested state” but in the case before him “whether or not
the respondent trustee is indemnified cannot affect to the slightest degree the amount of
estate duty collected in England.” (p. 205)
With the greatest respect, I do not consider that to be a proper basis for distinguishing
Harden. It implies that the act of a trustee in first paying the foreign levy and then seeking
reimbursement would serve to emasculate the Harden rule. I do not agree. In any event,
in the present case, it is clear that success would have the immediate effect of enriching
the US treasury.
2. Again in reference to the cases mentioned by him and which accepted the rule
against enforcement, Robertson JA said:
Further, in each of those cases the foreign State was … the plaintiff, the claimant or the
instigator of the proceedings. Here (in Re Reid) the United Kingdom has nothing whatever
to do with the respondent’s claim to be indemnified.
This statement implies that only where the foreign state is involved as an active party
to the proceedings, will the Harden rule have application, with the greatest respect I
disagree. To accept that conclusion, in my view, ignores the indirect aspect of the Harden
rule. Moreover, as pointed out earlier, Sheppard JA in the Court of Appeal of BC in Harden
(approved by the SCC) stressed that the identity of the plaintiff in the action is not vital
if the action “indirectly (has) the effect of enforcing revenue laws of a foreign country”
(supra).
In the result, and again with the greatest respect, I have concluded that I cannot follow
the Reid decision. Nevertheless the careful reasoning in that decision together with the
considerable criticism of the decision in Harden leads me to comment that the Supreme
Court may wish to re-examine the problem in the light of more modern international
notions of comity. Nevertheless, until it is changed by the Supreme Court, statute, treaty
or convention, the rule as reaffirmed in Harden is valid and binding.
The major difficulty is to determine under what circumstances must the Harden rule
be applied. The authorities seem agreed on the key question that must be asked for that
determination, namely what is the nature or substance of the proceedings placed in issue?
In the present case the nature or substance of the proceeding is the indirect enforcement
of the tax laws of the United States and as such the rule enunciated in Harden should be
applied.
It must also be noted that the US taxing authority has recourse for unpaid taxes against
the respondent, who is a US resident, and thus it need not pursue either the appellant or
the Bank.
Cartwright J in Harden, pointed to two explanations for the rule against enforcement
of foreign tax judgments and I quote:
Various reasons have been suggested for this ancient rule. In his speech in Government of
India, Ministry of Finance (Revenue Division) v. Taylor, supra, Lord Keith of Avonholm having
approved of the judgment of Kingsmill Moore J in the High Court of Eire in Peter Buchanan
Ltd. & Macharg v. McVey, reported as a note in [1955] AC 516, and particularly of the prop-
osition “that in no circumstances will the courts directly or indirectly enforce the revenue
laws of another country,” goes on at pp. 511 and 512 to suggest two explanations, as
follows:
One explanation of the rule thus illustrated may be thought to be that enforcement
of a claim for taxes is but an extension of the sovereign power which imposed the
taxes, and that an assertion of sovereign authority by one State within the territory of
another as distinct from a patrimonial claim by a foreign sovereign, is (treaty or
convention apart) contrary to all concepts of independent sovereignties. Another
explanation has been given by an eminent American judge, Judge Learned Hand, in
the case of Moore v. Mitchell, in a passage, quoted also by Kingsmill Moore J in the
case of Peter Buchanan Ltd. as follows:
While the origin of the exception in the case of penal liabilities does not appear
in the books, a sound basis for it exists, in my judgment, which includes liabil-
ities for taxes as well. Even in the case of ordinary municipal liabilities, a court
will not recognize those arising in a foreign State, if they run counter to the
“settled public policy” of its own. Thus a scrutiny of the liability is necessarily
always in reserve, and the possibility that it will be found not to accord with
the policy of the domestic State. This is not a troublesome or delicate inquiry
when the question arises between private persons, but it takes on quite another
face when it concerns the relations between the foreign State and its own cit-
izens or even those who may be temporarily within its borders. To pass upon
the provisions for the public order of another State is, or at any rate should be,
beyond the powers of the court; it involves the relations between the States
themselves, with which courts are incompetent to deal, and which are intrusted
to other authorities. It may commit the domestic State to a position which
would seriously embarrass its neighbour. Revenue laws fall within the same
reasoning; they affect a State in matters as vital to its existence as its criminal
laws. No court ought to undertake an inquiry which it cannot prosecute with-

out determining whether those laws are consonant with its own notions of what
is proper.
The explanation by Judge Learned Hand is particularly supportive of my conclusion

in this case. The disposition of the bulk of the estate of the testator, the treatment of the
trusts in the light of the instructions in the will, the reason for taxes to remain outstanding
notwithstanding a substantial US estate, and the apportionment of estate taxes between
probate and non-probate assets all leave questions as to whether the estate tax claimed
would be, in the words of Judge Hand, “in accord with the policy” of this country.
In Re Dwelle Estate (1969) 69 WWR 212 (Alta. SC) a similar problem to the case at bar
was considered and the Harden rule was applied. In that case the testatrix died resident
and domiciled in California and by her will appointed an Alberta lawyer to be the execu-
tor of her Canadian estate. The state of California made a claim against the Canadian estate
for inheritance tax and the Alberta executor applied to the court for directions. Applying
Harden, Riley J made an order prohibiting the Alberta executor from “making any pay-
ment of estate funds which would in effect be payment of a tax to a foreign government.”
It was also argued that the failure of the appellant administrators to pay the estate tax
constituted a breach of a duty imposed under his will or as undertaken by him in his
“Affidavit on Application for Administration With Will Annexed.” Paragraph 8 of that
affidavit reads as follows:
8. That I will faithfully administer the property of the deceased, by paying (4) her just
debts, all taxes and duties payable in respect of the estate, and the legacies contained in (4)
her will (11) and Codicils, so far as the same will thereunto extend and the law bind me, and
distribute the residue (if any) of the estate according to law, and that I will exhibit under oath
a true inventory of all the property of the deceased, and render a full account of my admin-
istration whenever required by law to do so. (emphasis added)
To accept that argument one must interpret the word “taxes and duties” in paragraph
5 so as to include foreign taxes and duties. In my view “and the law bind me” modifies
the words “just debts, all taxes and duties payable.” On this construction, the administrator
is only to pay those debts, taxes and duties which the law mandates and that “law” refers
to the law of the forum, namely Alberta law.
Thus the appellant must be able to point to some Alberta law which mandates that the
administrator pay the US taxes. In other words, the US revenue authorities would have
to prove their claim in Alberta. This analysis thus comes full circle because under the law
presently applicable in Alberta, an Alberta court must refuse to entertain or enforce such
a claim.
NOTE
The revenue exclusion does not preclude a Canadian court from adjudicating a claim against
a defendant over which it has jurisdiction for the improper collection in Canada by a foreign
state or its agent of taxes allegedly due under a foreign revenue law. Prince v ACE Aviation
Holdings Inc, 2014 ONCA 285, involved a proposed class action against Air Canada on behalf
of American and Canadian passengers who had purchased tickets on Air Canada flights in
Canada and between Canada and the United States. The claims alleged that Air Canada’s
collection of American taxes in Canada amounted to giving extraterritorial effect to United
States tax laws and that Air Canada was in any event collecting taxes that were not lawfully
exigible under American law. Air Canada argued, relying on the revenue exception in
Harden, that the Ontario courts had no jurisdiction over a claim concerning the interpreta-
tion of a foreign revenue law. Justice Strathy for the Ontario Court of Appeal rejected that
argument:
[54] … In my view, just as an Ontario court will not assist the direct or indirect enforcement
of foreign revenue laws in Canada, so it has jurisdiction to restrain the application of foreign laws
in its territory by a foreign state or its agent. I am therefore prepared to assume that an Ontario
court has jurisdiction to determine whether a foreign law is being enforced extra-territorially
and to grant appropriate relief. This is consistent with Harden. I am also prepared to assume that
an Ontario court can interpret a foreign law and grant relief against its misapplication.
The court went on to rule, citing international comity, that the Ontario proceedings
should nonetheless be stayed until the claimants had exhausted their remedies in the
United States:
[71] In this case, where the intrusion on Canadian sovereignty is not self-evident, we should
operate from a presumption that a foreign state does not intend to infringe upon Canadian
sovereignty by attempting to regulate persons or conduct within our territory. Before we
engage in the interpretation of foreign revenue law which is said to have that effect, we ought
to require the party alleging infringement to raise the issue in the appropriate forum in the
foreign state. This achieves the goals of order, fairness, efficiency and comity, which are the
bedrock of the forum non conveniens analysis.
[72] As a matter of comity, the interpretation of this U.S. statute, including its intended
scope, should be undertaken by agencies and courts in the [United States]. I would therefore
stay this proceeding pending pursuit of the appellants’ remedies in the United States. They
should be required to apply to the IRS for a refund of the taxes in question. This will require the
IRS to determine whether, in the factual circumstances of these cases, Air Canada over-reached
the intended scope of the Code.
C. Characterization
The revenue exclusion applies only to taxation laws in the strict sense. A restricted charac-
terization is necessary in the modern welfare state as governments have assumed respon-
sibility for the provision of a wide variety of services that in an earlier era were performed by
the private sector or not at all. Where these services are financed out of undifferentiated
general tax revenues, the exclusion generally operates. But where the financial liability for
the service is imposed directly on those who created the need for it to be performed in the
first instance, the law is not likely to be characterized as a revenue law in the exclusionary
sense, notwithstanding that the claimant seeking to enforce a foreign judgment is a govern-
ment entity. The point is illustrated by United States of America v Ivey, above, in which
Sharpe J curtly dismissed as “ungrounded rhetoric” the defendants’ argument that the
imposition of strict liability by the United States government on those in control of a waste-
disposal site for cleanup costs amounted to a form of taxation within the revenue exclusion:
In support of their argument that liability imposed by C.E.R.C.L.A. is a revenue law or form of tax,
the defendants offer the opinion of an expert on foreign law, Prof. Robert Abrams. In his affi-
davit, Prof. Abrams quotes and adopts a passage from Rodgers, Environmental Law: Hazardous
Wastes and Substances (1992), where the author quotes from a speech given by another com-
mentator, R.J. Marzulla, who states that the liability scheme under C.E.R.C.L.A., s. 107
may be understood less as a liability system dependent on the assignment of fault or

responsibility than as a site-specific taxation system in which certain categories of per-
sons are required to pay simply because of their connection with the site. Those who
owned or operated the site, or who disposed of their waste there, presumably profited
from the activity and should be required to internalize the cost of cleaning up the mess
they have created … .
The plaintiff submits that the quoted portion of Prof. Abrams’ affidavit should be dis-
regarded as a subjective critique of the law rather than an objective opinion as to the actual
content of foreign law. In my view, the portion of the quoted passage from the Marzulla speech
suggesting the C.E.R.C.L.A. represents a tax might appropriately be described as ungrounded
rhetoric. Indeed, the assertion that the law amounts to a tax appears to me completely incon-
sistent with the concluding sentence asserting that the effect of the law is to require those who
have created a hazard to bear the cost of clean-up.
In any event, it is for this court to characterize the nature of C.E.R.C.L.A. for the purposes of
these arguments: Huntington v. Attrill [[1893] AC 150, 20 OAR App 1 (PC)]; Cheshire and North,
Private International Law (12th ed.) at p. 119. Revenue or tax law appears not to have been pre-
cisely defined for these purposes, but it is difficult to imagine how a claim for reimbursement of
costs incurred as a result of the actionable conduct of the defendant could be viewed as a tax.
In view of the fact that the damages claimed by the plaintiff were measured directly and pre-
cisely by the actual cost of removal and remedial measures, I see no basis for the argument the
judgments are to enforce the revenue laws of the rendering jurisdiction.
A similarly attenuated approach to the characterization of “revenue laws” is seen in Weir

v Lohr (1967), 65 DLR (2d) 717 (Man QB). The Saskatchewan plaintiff in that case had been
injured in an automobile accident in Manitoba, where he received hospital treatment. Pursu-
ant to the Saskatchewan Hospitalization Act, RSS 1965, c 253, his Manitoba hospital account
was paid by the Saskatchewan Hospital Commission, which, in the plaintiff’s subsequent civil
action, sought to recover the amount paid pursuant to its statutory subrogation rights.
Under the Saskatchewan statute, all Saskatchewan residents were entitled to hospital bene-
fits financed by payment of a compulsory “tax” and the third-party insurer argued that the
plaintiff’s claim for reimbursement of the hospital account therefore amounted to an
attempt to enforce a foreign revenue law. Justice Tritschler rejected that characterization:
[13] As to the first question whether the hospital bill is a tax claim or a revenue debt: the
formula adopted by the [Saskatchewan] Act, particularly its use of the words “tax” and “taxes”
are not controlling. In essence, the Act provides a scheme of hospital insurance, albeit a compul-
sory one. The so-called tax is a premium and the persons paying (and only such persons) are, in
the words of the Act, “beneficiaries” and entitled to “receive benefits,” namely, payment of
hospital bills out of the Fund. This action is not to recover the “tax” but the hospital account.
• • •
[15] Sec. 22 of the Act is not an attempt by Saskatchewan to assert extra-territorial jurisdic-
tion or to impose liability on a resident of another province. Saskatchewan is competent to say
to one of its residents that if he has a claim against a third person, anywhere, in respect of a
hospital account paid under the Act, his right to claim for it is not taken away, that he shall
account for any recovery to the minister and that the minister shall be subrogated, etc. There is
no question of conflict of laws or of enforcing a revenue claim.
[16] … [The] plaintiff’s claim in respect of the hospital account … is not, on a proper con-
struction of the Act, a tax claim or a revenue debt. This is so even if, as counsel submitted, the
fund is part of the consolidated funds of Saskatchewan.
D. Relaxation of the Tax Exclusion?
Re Sefel Geophysical Ltd

[1989] 1 WWR 251 (Alta QB)
[The trustee of the estate of a bankrupt company applied for advice and directions in
relation to the appropriate distribution among creditors of the proceeds of sale of the
bankrupt’s estate. The creditors’ claims included revenue claims by the United Kingdom
and the United States and the question arose, inter alia, whether these claims were barred
by the tax exclusion.]
FORSYTH J:
[25] In addition, there is the hurdle created by the cases of India (Govt. of), Min. of
Fin. (Revenue Div.) v. Taylor, [1955] AC 491, [1955] 2 WLR 303, [1955] 1 All ER 292 (HL),
and USA v. Harden, [1963] SCR 366, 44 WWR 630, 41 DLR (2d) 721, 63 DTC 1276, [1963]
CTC 450, which hold that the courts will not enforce foreign revenue claims. There is no
doubt that some of the claims asserted in the present bankruptcy case are revenue claims.
I do not propose to deal with them individually, but I point out the potential difficulty.
[26] Cases were cited in support of the proposition that claims proven in bankruptcy
must be claims that would be enforceable by a court. Re Morton; Ex parte Morton Bartling
& Co., 15 Sask. LR 460, 3 CBR 114, [1922] 2 WWR 811, 66 DLR 378 (KB), illustrates that
statute-barred claims are not provable. The same syllogistic conclusion is urged in the
case of revenue claims which are barred by the holding in USA v. Harden. In fact, India
(Govt. of) v. Taylor is specific authority for the principle that foreign revenue claims are
not provable in a liquidation setting. However, given the present trends of international
comity in the recognition of foreign bankruptcy proceedings, I am not certain that the
India (Govt. of) case is compatible with the current judicial climate. 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. 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 liq-
uidation 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.
[27] I specifically restrict my opinion to the special case of liquidation proceedings.
The underlying considerations in a liquidation setting are significantly different from
those in a setting where the action is simply one on a tax judgment as in USA v. Harden.
I can find no authority within Canada that binds me with respect to the holding in India
(Govt. of) v. Taylor. Comity does not allow me to alter priorities set out in the Bankruptcy
Act, but it does dictate the recognition of foreign sovereigns and governments to some
extent in liquidation proceedings.
Re Matol Botanical International Ltd

[2001] RJQ 2333 (Sup Ct)
[The debtor company applied for a declaration that the respondent’s claim for interest
and penalties under a California taxation statute was covered by a Plan of Arrangement
ratified by the Quebec Superior Court in reorganization proceedings under the Compan-
ies’ Creditors Arrangement Act. The Plan was arrived at in coordination with reorganiza-
tion proceedings pending in the United States and had been approved by the United States
Bankruptcy Court. The Plan purported to cover the claims of all creditors, including
claims of American governments and government agencies under United States taxing
statutes. The respondent contested the jurisdiction of the court on the basis that the claim
was for interest and penalties arising under a taxing statute of the state of California, and
that the courts therefore had no jurisdiction to deal with the matter. In dismissing the
respondent’s objection, the court concluded that the taxation exception was inapplicable
in the context of coordinated cross-border insolvency proceedings.]
GOMERY JCS:
The rule prohibiting the courts from enforcing the taxing statutes of a foreign state is
of ancient origin. It was articulated in the leading case of Government of India v. Taylor
[1955] AC 491, a decision of the British House of Lords where the issue was the right of
the Government of India to prove its claim for income taxes in the liquidation of a company
registered in the United Kingdom but trading in India. Viscount Simonds speaking for
the Privy Council confirmed the already well-established rule that a government cannot
use foreign courts to enforce a claim for taxes, and extended the rule to apply to claims
for taxes filed with a liquidator. On the latter question he reasoned as follows (page 509):
I conceive that it is the duty of the liquidator to discharge out of the assets in his hands those
claims which are legally enforceable, and to hand over any surplus to the contributories. I
find no words which vest in him a discretion to meet claims which are not legally enforceable.
It will be remembered that, so far as is relevant for this purpose, the law is the same whether
the winding up is voluntary or by the court, whether the company is solvent or insolvent,
and that an additional purpose of a winding up is to secure that creditors who have enforce-
able claims shall be treated equally, subject only to the priorities for which the statute pro-
vides. It would be a strange result if it were found that the statute introduced a new category
of creditors to compete with those who alone, apart from it, could enforce their claims.
The principle that domestic courts cannot be used directly or indirectly to enforce the
revenue laws of another country was confirmed by the Supreme Court of Canada in United
States of America v. Harden [1963] SCR 366, which specifically cites the decision in Govern-
ment of India v. Taylor. The rule has also been applied in the United States in many decisions
such as British Columbia v. Gilbertson, a judgment of the US Court of Appeals (1979) 597
F.2d, 1161, relying upon Moore v. Mitchell (1929) 30 F.2d, 600 in which Judge Learned
Hand expressed the purpose behind the rule in the following passage (page 604):
Even in the case of ordinary municipal liabilities, a court will not recognize those arising in
a foreign state, if they run counter to the “settled public policy” of its own. Thus a scrutiny
of the liability is necessarily always in reserve, and the possibility that it will be found not to
accord with the policy of the domestic state. This is not a troublesome or delicate inquiry
when the question arises between private persons, but it takes on quite another face when it
concerns the relations between the foreign state and its own citizens or even those who may
be temporarily within its borders. To pass upon the provisions for the public order of another
state is, or at any rate should be, beyond the powers of a court; it involves the relations
between the states themselves, with which courts are incompetent to deal, and which are
intrusted to other authorities. It may commit the domestic state to a position which would
seriously embarrass its neighbour. Revenue laws fall within the same reasoning; they affect
a state in matters as vital to its existence as its criminal laws. No court ought to undertake
an inquiry which it cannot prosecute without determining whether those laws are consonant
with its own notions of what is proper.
In this province the rule has been codified as Article 3155 CCQ, the relevant portion
of which reads as follows:
Art. 3155. A Quebec authority recognizes and, where applicable, declares enforceable
any decision rendered outside Quebec except in the following cases:
6. The decision enforces obligations arising from the taxation laws of a foreign
country.
Based upon these principles it seems probable that Richter & Associés Inc. in its cap-
acity as Coordinator under the Plan of Arrangement could have refused to recognize the
claim of the Respondent for taxes, interest and penalties due as of March 28, 1995. How-
ever, in the interest of settling the claims of all categories of creditors including those of
US governments and government agencies, it included Class II-A creditors in the Plan
of Arrangement, which received the approval not only of this Court but of the Courts in
the United States. No objection to such inclusion was registered by Respondent. In such
circumstances, can it now be permitted to contest the competence of the Court to interpret
the terms of the Plan of Arrangement, even when the interpretation will have the effect
of determining, at least in this jurisdiction, the Respondent’s rights under a taxing
statute?
The Court is of the opinion that an exception to the rule enunciated by the Privy
Council in Government of India v. Taylor should be made in the case of an international
insolvency where the courts of the countries concerned have already made an effort to
coordinate their decisions so as to permit the settlement of claims in both jurisdictions,
with a view to the continuation of the insolvent corporation’s business. The principle of
comity, already mentioned by the US Court of Appeals in this file, is of a particular
importance in bankruptcy and insolvency matters; this was emphasized by Mr. Justice
Farley in a recent judgment: Re: Babcock & Wilcox Canada Ltd. (2000) 18 CBR (4th) 157.
In Olympia & York Developments Ltd. v. Royal Trust Co. (1993) 20 CBR (3d) 165, Mr.
Justice Blair writes at page 167 as follows:
The Olympia & York re-organization involves proceedings in three different jurisdictions:
Canada, the United States and the United Kingdom. Insolvency disputes with International
overtones and involving property and assets in a multiplicity of jurisdictions are becoming
increasingly frequent. Often there are differences in legal concepts—sometimes substantive,
sometimes procedural—between the jurisdictions. The Courts of the various jurisdictions
should seek to cooperate amongst themselves, in my view, in facilitating the trans-border
resolution of such disputes as a whole, where that can be done in a fashion consistent with
their own fundamental principles of jurisprudence. The interests of international cooperation
and comity and the interests of developing at least some degree of certitude in international
business and commerce, call for nothing less.
To say that comity and international cooperation should apply to all claims except
those arising from a taxing statute would effectively deprive debtors and creditors alike
of the opportunity of concluding compromises of their claims in a comprehensive manner,
which is the prime objective of the Act.
In any event, the rule in Government of India v. Taylor applies only to attempts by a
government to enforce its taxing statutes in a foreign court. All of the jurisprudence cited
by the Respondent concerns attempts of this nature. Here, the Respondent is not initiating
a procedure to recover what it claims to be due to it; it is the Debtor which seeks to clarify
the interpretation to be given to the Plan of Arrangement.
NOTES
1. In light of the relative universality of taxation laws and their economic significance in
the modern state, the revenue exclusion has drawn severe criticism over the years as nothing
more than an aid to absconding taxpayers seeking to avoid their societal obligations. How-
ever, judicial relaxation of the doctrine is unlikely in the opinion of Baade (1991) at 52:
[T]wo considerations [continue to] militate against the judicial enforcement of foreign-country
tax claims in the absence of treaty or of authorizing statute. First, history has shown that rev-
enue laws have been used “for religious and racial discrimination; for the furtherance of social
policies and ideals dangerous to the security of adjacent countries; and for the direct further-
ance of economic warfare.” So long as these possibilities exist, safety is said to lie in “universal
rejection” rather than in selective enforcement [citing Kingsmill Moore J in Buchanan, Ltd v
McVey [1954] Ir Rep 89, aff’d [1954] Ir Rep 108 (SC)].
Secondly, it is all but impossible for courts to bargain for (as it were) the reciprocal enforce-
ment of forum tax claims in the requesting country. It is believed, therefore, that while there will
eventually be a movement towards the reciprocal enforcement of tax claims at least in homo-
geneous communities of states, this will be brought about only with the aid of reciprocity
statutes and international agreements.
2. The first source of concern expressed above is less likely to arise among countries with
a shared socioeconomic culture. Nonetheless, in QRS 1 Aps v Frandsen, [1999] 3 All ER 289
(CA), the English Court of Appeal held that the rule was explicitly left in place by the Brussels
Convention and that it was not incompatible with European community law. It is the second
concern that seems the more significant obstacle. The view seems to be that, despite the
harm caused by the continuance of the prohibition (chiefly, tax evasion and corresponding
shifting of the tax burden), judicial abolition is unlikely in the absence of some assurance of
reciprocal treatment: see further Dodge. Thus, the Civil Code of Quebec recognizes reciproc-
ity as a qualification on the revenue exclusion:
3162. The Québec authority recognizes and enforces the obligations resulting from the
taxation laws of a State that recognizes and enforces the obligations resulting from the taxation
laws of Québec.
3. In the early 1990s, the Canadian government significantly raised tobacco taxes in an
effort to reduce tobacco consumption as part of a comprehensive anti-smoking campaign.
In response, Canadian cigarette manufacturers implemented several sophisticated and
highly lucrative schemes to defeat this campaign. In particular, they exported duty-free Can-
adian cigarettes for sale in the United States to smugglers and manufactured Canadian-style
cigarettes abroad that they then sold to smugglers. These schemes were highly effective. To
stem a smuggling epidemic the federal government was obliged to rescind the increase. The
federal government subsequently sued the manufacturers in the United States under its
powerful anti-racketing law (RICO) for lost taxes and extra policing costs necessitated by the
rampant smuggling. The manufacturers challenged the action on the basis that, if success-
ful, it would amount to the enforcement of foreign tax law. In Attorney General of Canada v RJ
Reynolds Tobacco Holdings, Inc, 268 F (3d) 103 (2001), the Second Circuit affirmed the district
court judge’s acceptance of the challenge. The court put forth five arguments for the con-
tinued application of the revenue rule:
1. the sovereignty argument (because tax policy uniquely reflects a sovereign’s will, no
foreign court can pass judgment on it);
2. the embarrassment argument (because tax policy uniquely reflects a sovereign’s will,
holding some foreign tax legislation to be contrary to forum public policy would cre-
ate unacceptable embarrassment to that foreign sovereign);
3. the difficulty argument (because even forum tax laws are difficult to apply due to
their complexity, it would be impossible to adjudicate properly on a foreign tax
regime);
4. the government-interest argument (it might not be in the forum’s self-interest to
enforce foreign tax laws); and
5. the executive-action argument (the well-established process of fixing tax treaties
offers clear evidence that the executive branch of government has the sole respon-
sibility for creating exemptions to the general prohibition on the recognition of for-
eign tax laws).
It is the last argument to which the Second Circuit gave most weight. However, as one com-
mentator noted, this argument rests on an ever more anachronistic conception of sover-
eignty—the relationship between governments and the relationships between various
branches and agencies in a state and their counterparts in other countries: see Case Com-
ment (2002) 115 Harv L Rev 2333.
E. International Tax Conventions

Although the existence of international tax conventions has long been a part of the Canad-
ian legal landscape, these conventions traditionally did not provide for the reciprocal
enforcement of tax judgments between the contracting states, but were aimed instead at
VII. Other Public Laws 129
reducing or eliminating the burden of multiple taxation in the event that a taxpayer is sub-
ject to the taxation laws of more than one country. Canada and the United States have
agreed, however, to enforce each other’s tax claims, if the taxing state certifies that the claim
has been finally determined and the enforcing state accepts the claim for collection:
Canada – United States Income Tax Convention 1990, art XXVI A, added by a protocol of
March 17, 1995. Subsequently, similar agreements were reached with other states: see fur-
ther Debenham.
Increasingly common, as well, are conventions providing for the exchange of information
as necessary to carry out the provisions of a convention or the domestic tax laws of the
contracting states: see e.g. art XXVII of the Canada – United States Tax Convention 1980 and
s 231.2 of the Income Tax Act, RSC 1985, c 1 (5th Supp). Note that the obligation to supply
information under the convention is suspended if disclosure would be contrary to the
national interests or the public policy—for example, privacy concerns—of a contracting
state.
On the interpretation and scope of international tax conventions, see further OECD;
Debenham; Reimer & Rust; Ward.
F. The Tax Exclusion in the Interprovincial Context

In the United States, the interstate recognition and enforcement of sister-state tax claims
that have been reduced to judgment has been accepted not only as a matter of common law
doctrine but as constitutionally mandated by the full faith and credit clause in the United
States constitution: see Milwaukee County v ME White Co, 296 US 268 (1935). Does the consti-
tutionally based full-faith-and-credit principle endorsed by the Supreme Court of Canada in
Hunt v T&N plc [1993] 4 SCR 289, 109 DLR (4th) 16, likewise mandate the interprovincial
enforcement of sister-province tax judgments in Canada? In fact, any obstacles to interprov-
incial enforcement were largely resolved even before Hunt by provincial legislation that
protected taxpayers against double taxation and provided for the reciprocal enforcement of
judgments among provinces: see e.g. Income Tax Act, RSBC 1996, c 215, ss 69-74; Income Tax
Act, RSO 1990, c I.2, ss 49-54; and Income Tax Act, RSNB 1973, c I-2, ss 50-56.
Moreover, the operation of the revenue exception among the common law provinces has
been doubted even as a matter of common law doctrine. In Weir v Lohr, above, Justice
Trischler concluded, citing both American authorities and Castel, that even if it could be
successfully argued that the plaintiff’s hospital account was a “tax” or “revenue debt,” the
revenue exclusion did not apply as between provinces where the public policy concerns
underlying the rule were absent (see paras 17-27).
VII. OTHER PUBLIC LAWS

A. General
It is occasionally said that the prohibitions on the enforcement of penal and revenue laws are
examples of a wider principle that a state cannot enforce its public law or its political or
prerogative rights outside its own borders. However, as Justice Sharpe observed in United
States of America v Ivey, above, the existence of a comprehensive public law exclusion is
controversial, especially in today’s world where public regulatory and compensation laws
often perform the functions that, in earlier years, were the province of private law and where
the line between the public and the private is increasingly difficult to draw.
United States of America v Ivey

(1995), 26 OR (3d) 533 (Gen Div), aff ’d (1996), 30 OR (3d) 370 (CA)
The defendants rely on the following passage from Dicey and Morris, The Conflict of Laws
(12th ed. 1993) for the proposition that there is a third, related category of “public law”
that, like penal and revenue laws, will not be enforced (at p. 103):
English courts have no jurisdiction to entertain an action: 1. for the enforcement, either
directly or indirectly, of a penal, revenue or other public law of a foreign state.
(Emphasis added)
The authors admit that the prohibition on enforcement of public law as such has not
received the direct approval of the House of Lords and has been the subject of conflicting
dicta in lower courts. They also concede that there is “very little authority which deals
directly with the general principle” and that:
The issue thus still remains open for decision in England whether the doctrine that penal
and revenue laws will not be enforced extends to laws of a “political” or “public” character.
A strong judicial endorsement of the “public law” exception to enforcement is found

in the judgment of Lord Denning MR in Attorney-General of New Zealand v. Ortiz, [1984]
1 A.C. 1 (C.A.). That case involved an attempt to enforce a New Zealand statute providing
for the forfeiture of “historical articles” exported or attempted to be exported in violation
of the statute. Lord Denning MR held that the English courts would refuse to enforce the
law in England at the suit of New Zealand and offered the following explanation of the
classes of foreign laws that would and would not be enforced (at p. 21):
… [T]he class of laws which will be enforced are those laws which are an exercise by the
sovereign government of its sovereign authority over property within its territory or over its
subjects wherever they may be. But other laws will not be enforced. By international law
every sovereign state has no sovereignty beyond its own frontiers. The courts of other coun-
tries will not allow it to go beyond the bounds. They will not enforce any of its laws which
purport to exercise sovereignty beyond the limits of its authority.
Denning M.R. concluded that the prohibition of export and automatic forfeiture provisions
were an exercise of sovereignty and in the category of non-enforceable “public law.” Ackner
L.J. disposed of the case on other grounds, but indicated that he was “impressed by the
reasoning of [the trial judge] that there is no such general residual category” of “public
law.” The third judge, O’Connor J., expressed no opinion on the point. The case was
appealed to the House of Lords where the case was disposed of on other grounds. The
House of Lords expressly declined to comment on the issue addressed by Denning M.R.
There are dicta in other English cases which accept the “public law” exception: see, e.g.
Re State of Norway’s Application, [1990] 1 A.C. 723 at p. 807 per Lord Goff; United States
v. Inkley, [1989] 1 Q.B. 255 (C.A.) at pp. 264-65 per Purchas L.J.; see also Mann, “The
International Enforcement of Public Rights” (1987), 19 Journal of International Law and
Politics 603. Cheshire and North [Private International Law (12th ed)] at p. 121, regard
the “public law” category as “firmly established” although difficult to define. They repeat
Lord Denning’s analysis that the “common thread underlying these three categories,” i.e.,
penal, revenue and other public laws, is “the principle that laws will not be enforced if
they involve an exercise by a government of its sovereign authority over property beyond
its territory.”
Perhaps the leading instance of the application of the “public law” exception is the
decision of the High Court of Australia in Attorney-General v. Heinemann Publishers
Australia Pty. Ltd. (1988), 165 C.L.R. 30, a case arising from the “Spycatcher” affair. The
United Kingdom sought an injunction to restrain the publication of a book containing
information obtained by the author while a member of the British Security Service. The
claim was based upon breach of contract, breach of fiduciary and equitable obligations
and a statutory obligation of confidence imposed by the Official Secrets Act of the United
Kingdom. The High Court of Australia held that injunctive relief ought to be refused on
the ground that the court would not “protect the intelligence secrets and confidential
political information of the United Kingdom Government” (at p. 54). The court reviewed
the authorities dealing with the non-enforceability of foreign “public laws” and noted that
the question “whether the principle extends to proscribe the enforcement of foreign public
laws as well as foreign penal laws has been a contentious question” (at pp. 41-42). The
court observed that “the expression ‘public laws’ has no accepted meaning in our law”
and went on to suggest as follows (at p. 42):
It would be more apt to refer to “public interests” or, even better, “governmental interests”
to signify that the rule applies to claims enforcing the interests of a foreign sovereign which
arise from the exercise of certain powers peculiar to government.
In the view of the High Court, the claim of the United Kingdom could not be considered
(at pp. 46-47):
… as an action to enforce private rights or private interests of a foreign state. It is in truth an
action in which the United Kingdom Government seeks to protect the efficiency of its Secur-
ity Service as “part of the Defence Forces of the country.” The claim for relief made by the
appellant in the present proceedings arises out of, and is secured by, an exercise of prerogative
of the Crown, that exercise being the maintenance of the national security. Therefore the right
or interest asserted in the proceedings is to be classified as a governmental interest. As such,
the action falls within the rule of international law which renders the claim unenforceable.
It should be noted that faced with precisely the same issue, the New Zealand Court of
Appeal came to a different conclusion on the scope of the “public law” exception: Attorney
General v. Wellington Newspapers Ltd., [1988] 1 N.Z.L.R. 129 at p. 174, per Cooke P.
Canadian authority on the point is sparse, although Canadian courts have frequently
been called upon to enforce claims arising under foreign legislation at the suit of a foreign
state in circumstances where, if the exception were a broad one, it might well have been
applied: see, eg. Canada (Secretary of State) v. United States (Alien Property Custodian),
[1931] S.C.R. 169, [1931] 1 D.L.R. 890; Union of India v. Bumper Development Corp.,
[1995] 7 W.W.R. 80, 29 Alta. L.R. (3d) 194 (Q.B.). Castel, Canadian Conflict of Laws 3rd
ed. (Markham: Butterworths, 1994), states (at p. 163) that “[l]aws that are enforced by a
foreign state as an assertion of sovereign power … may not always be recognized and
enforced by Canadian courts if they are of a political nature.” Rand J. appears to have
accepted the proposition that enforcement will not be accorded foreign “political law” in
Laane v. Estonian State Cargo & Passenger Steamship Line, [1949] S.C.R. 530, [1949] 2
D.L.R. 641. The case involved an expropriation decree of the Estonian Soviet Socialist
Republic purporting to confiscate a ship with compensation fixed at 25 per cent of its
value. The majority of the court applied the more usual analysis classifying the confisca-
tory law as penal.
In my view, the “public law” argument advanced by the defendants should be rejected
for two reasons. First, even if one sets to one side the rather shaky foundation of the
doctrine, the cases which do apply the “public law” exception are distinguishable. If this
vague category is to be applied to the situation before me, it would have to be extended
beyond its present scope.
The judgment of Denning M.R. in Ortiz and that of the High Court of Australia in the
“Spycatcher” case represent the strongest judicial statements of the doctrine. Assuming
for the sake of argument that they represent the law of Ontario, the situation here is readily
distinguishable. In seeking enforcement of a judgment imposing civil liability for the cost
of repairing the harm for which the defendants are being held to account, the United
States is not insisting on depriving the defendants of property rights within Canada for
some public purpose as in the Ortiz case. The law being enforced here more readily fits
the first category described by Denning M.R. in the passage quoted above as being
enforceable, namely “those laws which are an exercise by the sovereign government of its
sovereign authority over property within its territory or over its subjects wherever they
may be.” There is nothing that even approaches the element of an exercise of prerogative
of the Crown for the maintenance of national security which determined the result in the
“Spycatcher” case. Nor is there anything in these judgments amounting to a confiscation
of property for a public purpose as in Laane v. Estonian State Cargo & Passenger Steamship
Line, supra.
If one turns to the principle said to underlie these decisions, it does not apply to the
present case. The claim advanced here cannot fairly be characterized as an attempt by a
foreign state to assert its sovereignty within the territory of Ontario. C.E.R.C.L.A. repre-
sents the judgment of Congress as to an appropriate regime of civil liability for environ-
mentally hazardous substances in certain circumstances. The defendants chose to engage
in the waste disposal business in the United States and the judgments at issue here go no
further than holding them to account for the cost of remedying the harm their activity
caused.
Second, in my view, it would be highly undesirable in principle to interpret and expand
the “public law” defence to encompass the circumstances of the case at bar. Environmental
law is but one of many areas where the traditional remedies of the common law have
effectively been supplanted by detailed statutory and regulatory regimes. Legislatures have
determined that the complex issues of environmental protection and determination of
liability for environmental harms require the positive intervention of the state. Common
law actions brought by private parties who have suffered individual harm have been found
wanting. The issues of liability for cleanup and remedial costs are dealt with awkwardly,
if at all, in litigation between private parties, and most jurisdictions, including Ontario,
have established regulatory regimes which encompass the imposition of civil liability for
such costs. In this light, it is difficult to see the rationale for this court to refuse
enforcement on the grounds that the efforts of the plaintiff to recover the costs it has
incurred to remedy the environmental problems at the L.D.I. site represent an illegitimate
attempt to assert sovereignty beyond its borders. There is a public element to all statutes
and to virtually all suits brought by a government. If these judgments are to be refused
enforcement on the grounds that they represent an assertion of foreign sovereignty, it is
difficult to see how enforcement could ever be accorded a civil judgment in favour of a
foreign state.
The principle of comity which underpins the recent pronouncements of the Supreme
Court of Canada in Morguard [[1990] 3 SCR 1077, 76 DLR (4th) 256] and Amchem
[(1993), 102 DLR (4th) 96] and Tolofson v. Jensen, [1994] 3 S.C.R. 1022, 120 D.L.R. (4th)
289, should, in my view, inform the development of this area of the law. What is sought
to be enforced here is a judgment requiring parties who engaged in an environmentally
hazardous activity for profit to make good the cost actually incurred to eliminate that
environmental hazard. There is clearly a public purpose at stake, but in my view, the
presence of that public purpose does not defeat the plaintiff ’s case. Given the prevalence
of regulatory schemes aimed at environmental protection and control in North America,
considerations of comity strongly favour enforcement. In an area of law dealing with such
obvious and significant transborder issues, it is particularly appropriate for the forum
court to give full faith and credit to the laws and judgments of neighbouring states. To
the extent that the comity principle entails an element of reciprocity, it is significant to
note that the courts of the United States enforce foreign judgments for environmental
clean-up costs similar to the those at issue in the case at bar: Re: Oil Spill by the Amoco
Cadiz, 954 F.2d 1279 (1992).
NOTES
1. In affirming Justice Sharpe’s ruling, the Court of Appeal agreed that the idea of a gen-
eral public law exclusion “rests, as Sharpe J pointed out in rejecting it, on a shaky doctrinal
foundation”; but “[i]t is not … necessary to close the door on the possible existence of such
an exception. As Sharpe J pointed out, the doctrine would have to be extended beyond its
present scope in order to apply in this case”: United States of America v Ivey (1996), 30 OR (3d)
370 at 374, 139 DLR (4th) 570 at 573.
2. This temperate approach reflects the philosophy expressed in the “Oslo Resolution,”
a 1977 resolution of the Institut de droit international: see parts I(a) and (b) and part II of the
Resolution, “Public Law Claims Instituted by a Foreign Authority or a Foreign Public Body” at
328-30. The premise of the Oslo Resolution is that public law claims instituted by a foreign
authority or a foreign public body should in principle be “considered inadmissible to the
extent that, as viewed by the forum state, their objective is connected to the exercise of
governmental power.” However, such claims should nonetheless be admitted if
a. with due regard to the rights of the defendant, the forum state regards this as “justi-
fied by the particular objectives of the claim, the exigencies of international solidar-
ity, or the convergence of the interests of the states concerned”; or
b. the claim is based on propositions of public law which are “consequential or acces-
sory to private-law claims”—for example, a claim for indemnity or reimbursement by
a public welfare authority against a defaulting primary family support obligor.
The sympathy of the institute to this more flexible approach is evidenced by its rejection of
an attempted amendment to make the admissibility of foreign law claims contingent on
treaty; to impose such a condition would “paralyze jurisprudential developments”: for a full
discussion and references, see Baade (1991) at 39-40.
B. Nationalization, Expropriation, and Confiscation Laws

Canadian authority is “sparse” on the existence of a general public or political laws exclu-
sionary doctrine. Indeed, Rand J’s decision in Laane & Baltser v Estonian SS Line, [1949] SCR
530, seems to be the only instance in which any reliance was placed on the “political” char-
acter of the foreign law as a basis for exclusion.
That case involved a claim to share in the proceeds of the ship Elise, which had been sold
by order of the Exchequer Court following its arrest in Canadian territorial waters to enforce
the in rem claim of the crew for wages. The plaintiffs rested their claim on a decree and legis-
lation of the de facto government of Estonia (the Estonian Soviet Socialist Republic) that
purported to nationalize all Estonian merchant ships, including those in foreign ports, and
to vest title in the plaintiffs, with compensation fixed at 25 percent of each ship’s value. The
Supreme Court of Canada refused to enforce the plaintiffs’ claim on the ground that it was
based on a foreign “penal” (Rand J, “political”) law of a “confiscatory” nature.
However, although the Elise was owned by Estonian nationals and registered in that
country, it was not only within Canadian territorial jurisdiction at the date of suit but also
outside Estonian territorial limits at the date of the decree. As such, the case may be viewed
as resting on the more limited proposition—generally accepted in the commentary and
supported by the jurisprudence in other common law systems—that a foreign law confiscat-
ing or expropriating title to private property in favour of the state will not be recognized or
enforced in the forum if the property is located outside the territorial limits of the foreign
state at the time of enactment: for a comprehensive analysis, see Sykes & Pryles at 294ff.
The converse proposition generally also holds true. Foreign public laws that effect a
transfer to the state of private property located within its territorial limits are not per se
subject to exclusion either on the basis of the public policy exception or as penal or other
“political” laws. Thus, decrees of the Netherlands government that purported to nationalize
German property to secure wartime reparations were held to be entitled to recognition and
enforcement in Canada on the assumption that the situs of the relevant property (bearer
share certificates located in Ontario but issued by a Netherlands corporation) was in the
“confiscating” state, the Netherlands: see Brown, Gow, Wilson v Beleggings-Societeit NV, [1961]
OR 815 (HC); Sykes & Pryles at 298-300. As Scrutton LJ explained in Luther v Sagor & Co, [1921]
3 KB 532 at 559:
British citizens who may contribute to the state more than half of their income in income tax
and super tax, and a large proportion of their capital in death duties, can hardly declare a for-
eign state immoral which considers (though we may think wrongly) that to vest individual
property in the state as representing all the citizens is the best form of proprietary right.
In order to justify non-recognition, a foreign public law confiscating property within the
enacting state, in addition to being “confiscatory,” must also violate fundamental forum
public policy.
VIII. Selected Bibliographical References 135
Thus, the nationalization decrees of the Netherlands government recognized in Brown,

Gow, Wilson v Beleggings-Societeit NV, although directed at German property, were aimed at
securing wartime reparations. As such, the decrees were entitled to recognition in Canada
in view of the fact that they accorded with Canadian public policy as expressed in legislation
with a similar purpose and in international treaties and conventions to which both Canada
and the Netherlands were signatories. In Oppenheimer v Cattermole, [1976] AC 249, the House
of Lords refused to recognize the confiscation of Jewish property under the National Social-
ist government in Germany on the ground that such racially motivated laws were a grave
infringement of human rights and, consequently, their recognition would violate English
public policy. In Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5), above, recall that their
Lordships refused to recognize expropriation of property located in Iraq (Kuwaiti airliners
flown to Iraq after Iraq had invaded Kuwait) because such an act was, in the words of Lord
Nicholls, a “gross violation of established rules of international law of fundamental import-
ance”; and as Lord Styen said: “[T]he Court of Appeal was right to extend the public policy
exception beyond human rights violations to flagrant breaches of public international law.
It does not follow, however, that every breach of international law will trigger the public
policy exception.” What is of interest in this line of cases is that the results were reached on
the basis of the general public policy doctrine without any need for recourse to a supple-
mentary public law exclusionary rule.
VIII. SELECTED BIBLIOGRAPHICAL REFERENCES

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and Martinus Nijhoff, 1991).
Baade, Hans W. “The Operation of Foreign Public Law” (1995) 30 Tex Intl LJ 429.
Basedow, Jürgen. The Law of Open Societies: Private Ordering and Public Regulation in the
Conflict of Laws (Leiden: Brill Nijhoff, 2015).
Black, Vaughan. “Uniform Enforcement of Canadian Judgments Act” (1992) 71 Can Bar Rev 721.
Blom, Joost. “Public Policy in Private International Law and Its Evolution in Time” (2003) 50
Nethl Intl L Rev 373.
Blom, Joost. “The Regulation of Contracts in Canadian Private International Law” (2014) 31
Ariz St LJ 21.
Briggs, Adrian. “The Revenue Rule in the Conflict of Laws: Time for a Makeover” [2001] Sing
JLS 280.
Carter, PB. “The Role of Public Policy in English Private International Law” (1993) 42 ICLQ 1.
Castel, Jean-Gabriel. “Foreign Tax Claims and Judgments in Canadian Courts” (1964) 42 Can
Bar Rev 277.
Chong, Adeline. “Transnational Public Policy in Civil and Commercial Matters” (2012) 128 Law
Q Rev 88.
Corr, JB. “Criminal Procedure and the Conflict of Laws” (1985) 73 Geo LJ 1217.
Debenham, D. “From the Revenue Rule to the Rule of the ‘Revenuer’: A Tale of Two Davids
and Two Goliaths” (2008) 56 Can Tax J 1.
Dhooge, Lucien J. “Public Policy and the Recognition of Foreign Judgments in Canada”
(2013) 39 NCJ Intl L & Com Reg 115.
Dodge, William S. “Breaking the Public Law Taboo” (2002) 43 Harv Intl LJ 161.
Dolinger, Jan. “World Public Policy: Real International Public Policy in the Conflict of Laws”
(1982) 17 Tex Intl LJ 167.
Felix, Robert L & Ralph U Whitten. American Conflicts Law, 6th ed (Durham, NC: Carolina
Academic Press, 2011).
Felix, Robert L, Ralph U Whitten & Luther L McDougal. American Conflict of Laws, 5th ed (New
Providence: LexisNexis, 2010).
George, BJ. “Extraterritorial Application of Penal Legislation” (1966) 64 Mich L Rev 609.
Haigh, Richard. “A Kindler, Gentler Supreme Court? The Case of Burns and the Need for a
Principled Approach to Overruling” (2001) 14 SCLR (2d) 139.
Hay, Peter, Patrick J Borchers & Symeon Symeonides. Conflict of Laws, 5th ed (St Paul, Minn:
West, 2010).
Kahn-Freund, Otto. “Reflections on Public Policy in the English Conflict of Laws” (1953) 39
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CHAPTER FIVE
Personal Connecting Factors
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
A. Relevance of the Personal Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
B. Domicile Versus Nationality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
C. Domicile Versus Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
II. Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
A. Domicile of Origin and Domicile of Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
B. Persistence of the Domicile of Origin and the Doctrine of Revival . . . . . . . . . . . . 165
C. Domicile of Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
D. Domicile of Incapacitated Adults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
E. Domicile and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
F. Relevance of Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
III. Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
B. Constitutional Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
C. Physical Presence and Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
D. Ordinary Residence and Habitual Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
E. Relevance of Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
IV. Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
V. The Principle of Proximity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
VI. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
I. INTRODUCTION
A. Relevance of the Personal Law
In private international law, traditionally it has been thought necessary to identify one’s
“personal law”—the law of the community to which one has the most significant connec-
tion. The increasing mobility of people has reduced the importance attached to personal
connecting factors, particularly as a basis for choice of law.
Nonetheless, personal connecting factors still determine many jurisdiction and choice of
law issues—notably, the status of persons, validity of marriage, divorce, nullity, children, the
proprietary rights of domestic partners, and succession to property upon death. Personal
connecting factors also determine the rights and obligations between an individual and the
state—for example, entitlement to vote and to citizenship; tax liability; and access to educa-
tion, health care, and other publicly funded benefits. And personal connections continue to
supply an alternative general basis for in personam judicial jurisdiction on the theory that
there should always be one place where a person can be subjected to legal accountability.
139
140 Chapter 5 Personal Connecting Factors
B. Domicile Versus Nationality

In common law systems, domicile traditionally was regarded as the most appropriate con-
necting factor to establish personal law. This is in contrast to the historical position in most
civil law derivative systems where nationality was the dominant connecting factor.
Nationality has several advantages. Whereas domicile, as we shall see, incorporates an
element of subjective intention, nationality is usually acquired by a formal objective govern-
mental act and is thus much easier to ascertain. For the same reason, nationality is more
likely to ensure international uniformity in the ascertainment of one’s personal law. On the
other hand, nationality may persist as an artificial connection long after a person has termin-
ated all real ties with the relevant state.
Of particular significance in the Canadian context is the fact that nationality is an inappro-
priate connecting factor for a country organized on a federal model—it fails to connect a
person to the legal system of any particular unit within the federation. This is non-problem-
atic if the relevant conflicts issue relates to an area, such as divorce, which is the subject of
federal law in Canada. But most important issues of personal law in Canada are governed by
provincial or territorial law. For this reason, domicile rather than nationality is also generally
used in the civil law of Quebec, although nationality is an alternative connecting factor for
some choice of law issues: see Civil Code of Quebec, arts 3088, 3091, 3098, 3109, 3123, and
3091.
In the European Union, nationality is now also a relevant connecting factor in relation to
choice of law for succession under the European Union (EU) Succession Regulation (Brussels IV):
see Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on
jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and
enforcement of authentic instruments in matters of succession and on the creation of a European
Certificate of Succession, arts 22, 27(1)(b), and 83(2)-(3). Article 36 sets out a rule of interpreta-
tion to address the scenario in which the deceased is a national of a state composed of
multiple territorial units, each of which has its own succession law. In that scenario, the
applicable law is to be determined by the internal choice of law rules of the relevant state
and, in the absence of such rules, by the law of the territorial unit with which the deceased
had the closest connection.
C. Domicile Versus Residence

The significance of domicile has declined markedly in recent years, particularly in the com-
mon law provinces and territories. Indeed, the point has now been reached where it can no
longer be regarded as the pre-eminent connecting factor for personal law. Today, some
variation of residence or simply “real and substantial connection” is more often the relevant
concept.
The declining significance of domicile is sometimes attributed to international develop-
ments. “Habitual residence,” thought to offer an appropriate via media between domicile
and nationality, has been in common use in the Hague conventions since 1902 and from
there has found its way into numerous national laws and European Union law. The popular-
ity of habitual residence at the international level is owed in great part to dissatisfaction
with the traditional English law of domicile. “Concepts such as the revival of domiciles of
origin, [the] derivative domicile of married women, the requirement of intent to remain
I. Introduction 141
permanently, which were part of the domicile concept in English law, but not accepted
elsewhere, led to a distrust of the term in Europe.” (Hay, Borchers & Symeonides at 300.) It
was largely to avoid these problems that the term “habitual residence” came into use.
Even apart from international influences, residence or ordinary residence is increasingly
preferred to domicile as a personal connecting factor in Canadian law. Thus, for example, a
one-year period of ordinary residence has replaced domicile as the connecting factor for
divorce jurisdiction in Canada: see Divorce Act, RSC 1985, c 3 (2nd Supp), s 3(1).
In part, this change stems from the growing recognition that a substantial connection,
rather than the most substantial connection, is often sufficient to establish jurisdiction in
family law proceedings. But even in relation to choice of law, where it is generally necessary
to identify an exclusive or predominant personal law, there is evidence of growing disen-
chantment with the use of domicile as the connecting factor. Thus, Canadian courts have
been urged to replace domicile with habitual residence to determine choice of law for suc-
cession to property on death: see Vaughan Black, Annotation to Re Thom (1987), 27 ETR 185
(Man QB), and Vaughan Black, Annotation to Manitoba (Public Trustee) v Dukelow (1994), 4 ETR
(2d) 1 (Ont Gen Div).
The decline in the importance of domicile is more pronounced in the Canadian common
law provinces and territories, in England, and in the Commonwealth than in the United
States and under the Civil Code of Quebec. In the United States, “it appears that in most cir-
cumstances habitual residence has the same essential meaning that is usually associated
with one’s home. It is this concept of home that is fairly close to the concept of domicile as it
has developed in modern usage in the United States though with perhaps less emphasis on
the intention to remain and without the instantaneous change that can sometimes charac-
terize domicile in the strict sense”: Hay, Borchers & Symeonides at 301-2 (footnotes omitted).
Similarly, as we shall see, the rules for domicile in the Civil Code of Quebec do not reflect
certain of the more criticized features of the traditional English concept—notably, the exces-
sive emphasis placed on the domicile of origin.
This is not to say that reform is not an issue in the common law world outside the United
States and Quebec. The law of domicile has been the subject of statutory reform in common
law Canada, particularly in Manitoba; in New Zealand under the Domicile Act, 1976; and in
Australia under the Domicile Acts, 1982 (passed by the Commonwealth and all the states and
the Northern Territory with effect from July 1, 1982). In the United Kingdom, the English and
Scottish Law Commissions have also recommended substantial legislative change: see Law
Commission. England’s membership in the European Community has also resulted in the
introduction into English law of a specialized definition of domicile for the purposes of giv-
ing effect to the European convention governing jurisdiction and the enforcement of for-
eign judgments: Civil Jurisdiction and Judgments Act, 1982, s 41(2): see Kaye. It is an open
question, however, whether these efforts represent “too little too late” and whether truly
effective reform requires the wholesale abandonment of the English concept of domicile for
choice of law in favour of habitual residence: see Vaughan Black, above. For a recent analysis,
see Trakman. Also note the remarks of Lord Justice Longmore in Agulian v Cyganik, below at
para 58).
II. DOMICILE
A. Domicile of Origin and Domicile of Choice
Agulian v Cyganik
[2006] EWCA Civ 129
[Andreas Nathanael died in London in February 2003, leaving an estate with a net value
of about £6,500,000. In a will dated November 1995, he left a legacy of £50,000 to Renata
Cyganik, his partner of some two years. The couple remained together after 1995 and
made plans to marry prior to Andreas’s death. Upon his death, Renata sought to apply
for additional financial provision under the Inheritance (Provision for Family and Depend
ants) Act 1975. Her eligibility to apply depended on whether Andreas was domiciled in
England and Wales at the time of his death or had retained his domicile of origin in
Cyprus. Although Andreas had resided for virtually all of his adult life in England, he had
also maintained strong ties to Cyprus. The trial judge concluded that Andreas had formed
the necessary intention to acquire a domicile of choice in England by the late 1990s, pri-
marily as a result of his relationship with Renata. This ruling was reversed on appeal.]
LORD JUSTICE MUMMERY:

3. The question in this court under CPR Part 52.11(3)(a) is whether the deputy judge
was wrong in holding that Andreas, who was born in Cyprus on 6 October 1939, lost his
Cypriot domicile of origin and acquired a domicile of choice in England, where he had
lived and worked for a total of about 43 years between the age of 19 and his death on 17
February 2003 at the age of 63.
4. On 2 October 2003 probate of the will made by him on 11 November 1995 was
granted to the executors named in the will, one of whom has since died. The will contained
pecuniary legacies totalling £100,000, including a legacy of £50,000 to Renata. According
to the grant of probate his net estate in the United Kingdom was sworn at £6,527,362 and
he was domiciled in England and Wales. The Inland Revenue have now accepted, so the
court was told, that Andreas was not, at the date of his death, domiciled in England for
income and capital gains tax purposes. Neither the contrary ruling of the deputy judge
nor the views of the revenue authorities bind this court.
Domicile: The legal principles and proof

5. In Re Fuld [1968] P 675 Scarman J explained that the legal relationship between a
person and the legal system of the territory which invokes his personal law is based on a
combination of residence and intention. Everybody has a domicile of origin, which may
be supplanted by a domicile of choice. He noted two particularly important features of
domicile (page 682D-E) which are relevant to this case:
First, that the domicile of origin prevails in the absence of a domicile of choice, i.e., if a
domicile of choice has never been acquired or, if once acquired, has been abandoned. Sec-
ondly, that a domicile of choice is acquired when a man fixes voluntarily his sole or chief
residence in a particular place with an intention of continuing to reside there for an unlimited
II. Domicile 143
time. [As pointed out by Buckley LJ in IRC v. Bullock [1976] 1 WLR 1178 at 1184H Scarman
J’s formulation “for an unlimited time” requires some further definition.]
6. After reviewing the more important authorities and noting the need in each par-
ticular case for “a detailed analysis and assessment of facts” in relation to the subjective
state of mind of the individual in question, Scarman J stated the law in terms which this
court should expressly approve (page 684F-685D):
(1) The domicile of origin adheres—unless displaced by satisfactory evidence of the acquisi-
tion and continuance of a domicile of choice; (2) a domicile of choice is acquired only if it
is affirmatively shown that the propositus is resident in a territory subject to a distinctive legal
system with the intention, formed independently of external pressures, of residing there
indefinitely. If a man intends to return to the land of his birth upon a clearly foreseen and
reasonably anticipated contingency, e.g., the end of his job, the intention required by law is
lacking; but, if he has in mind only a vague possibility, such as making a fortune (a modern
example might be winning a football pool), or some sentiment about dying in the land of
his fathers, such a state of mind is consistent with the intention required by law. But no clear
line can be drawn; the ultimate decision in each case is one of fact—of the weight to be
attached to the various factors and future contingencies in the contemplation of the proposi-
tus, their importance to him, and the probability, in his assessment, of the contingencies he
has in contemplation being transformed into actualities. (3) It follows that, though a man
has left the territory of his domicile of origin with the intention of never returning, though
he be resident in a new territory, yet if his mind be not made up or evidence be lacking or
unsatisfactory as to what is his state of mind, his domicile of origin adheres … .
7. Scarman J discussed another point relevant to this case—the standard of proof. He

cited authorities stating that the “necessary intention must be clearly and unequivocally
proved” and that the domicile of origin is more enduring than the domicile of choice and
said (page 685D):
… It is beyond doubt that the burden of proving the abandonment of a domicile of origin
and the acquisition of a domicile of choice is upon the person asserting the change … What
has to be proved is no mere inclination arising from a passing fancy or thrust upon a man
by an external but temporary pressure, but an intention freely formed to reside in a certain
territory indefinitely. All the elements of the intention must be shown to exist if the change
is to be established: if any one element is not proved, the case for a change fails. The court
must be satisfied as to the proof of the whole; but I see no reason to infer from these salutary
warnings the necessity for formulating in a probate case a standard of proof in language
appropriate to criminal proceedings.
The formula of proof beyond reasonable doubt is not frequently used in probate cases,
and I do not propose to give it currency. It is enough that the authorities emphasise that the
conscience of the court (to borrow a phrase from a different context, the judgment of Parke
B in Barry v. Butlin [1838] 2 Moo PCC 480) must be satisfied by the evidence. The weight
to be attached to evidence, the inferences to be drawn, the facts justifying the exclusion of
doubt and the expression of satisfaction, will vary according to the nature of the case. Two
things are clear—first, that unless the judicial conscience is satisfied by evidence of change,
the domicile of origin persists: and secondly, that the acquisition of a domicile of choice is
a serious matter not to be lightly inferred from slight indications or casual words.
• • •
Conclusion
47. In my judgment, the deputy judge’s inference about Andreas’s change of intention
after 1995 regarding his permanent home was wrong. If, as is agreed, Andreas did not
acquire a domicile of choice in England between 1958 and 1995, because he did not intend
to live in England permanently or indefinitely, it could not reasonably be inferred from
what happened after 1995 that he had formed a different intention about his permanent
home before he died.
48. There are several reasons why the deputy judge arrived at the wrong decision, even
though he correctly summarised the relevant legal principles.
49. First, the deputy judge underestimated the enduring strength of Andreas’s Cypriot
domicile of origin. This led him to focus too much attention on how specific Andreas’s
plans were after 1995 to return to live permanently in Cyprus and too little attention on
whether Andreas intended to live permanently or indefinitely in England. The emphasis
of the judgment is, with respect, wrong. Although Andreas’s intentions regarding both
Cyprus and England are closely interrelated, the adhesiveness of the domicile of origin,
the incidence of the burden of proof and the level of the standard of proof all require the
person contending for a domicile of choice to establish a clear case that Andreas intended
to live permanently or indefinitely in England. For example, in paragraph 91 quoted above
the deputy judge observed that, if Andreas had continued with a string of short term girl
friends, “he might eventually have decided to sell up and go and live permanently in
Cyprus.” In my judgment, the question is not so much whether Andreas intended eventu-
ally to return to live permanently in Cyprus, but whether it had been shown that, by the
date of his death, he had formed the intention to live permanently in England. The crucial
point is that Andreas had a domicile of origin in Cyprus until it was proved that he
intended to reside permanently or indefinitely in England.
50. Secondly, the deputy judge treated the engagement to Renata, her inclusion in his
will and the wedding plans as decisive factors in showing that Andreas intended to live
permanently in England. Although those events are relevant to his intentions for a perma-
nent home, the deputy judge treated them as determinative without explaining why, in
the light of the agreed domicile position down to 1995, they made all the difference and
transformed his domicile status, which earlier long term residence, business interests,
personal relationships and the birth of his 2 children had failed to achieve.
51. Thirdly, and connected to the first two points, the division of Andreas’s life in
England into periods of time led the deputy judge to divorce the post-1995 events, from
which he drew an inference of an intention to make a permanent home in England, from
the pre-1995 events from which he correctly declined to make that inference. He should
have considered, as at the date of Andreas’s death, the whole of Andreas’s life in retrospect
in order to see whether an inference could be made that he intended to make his home
permanently or indefinitely in England. By concentrating on the years at the end of
Andreas’s life the deputy judge limited his perspective on Andreas’s life and did not take
into account all the materials relevant to an inference about Andreas’s intentions. Had he
taken into account all the connecting factors with Cyprus and England over the whole of
Andreas’s lifetime, he would have found that the evidence was not sufficiently “cogent
II. Domicile 145
and convincing” to establish such a serious matter as a change of domicile. He would have
concluded that the cumulative effect of the preponderance of the factors did not point
“clearly and unequivocally” to an intention to make his permanent home in England, but
rather reinforced the enduring character of his Cypriot domicile of origin.
Result
52. I would allow the appeal and declare that, at the date of his death, Andreas was
domiciled in Cyprus. It follows that Renata’s application issued under the 1975 Act on 7
January 2004 must be dismissed on the preliminary jurisdictional issue.
LORD JUSTICE LONGMORE:

53. I agree with the judgment of Mummery LJ. In particular I agree that Scarman J in
Re Fuld (No. 3) [1968] P 675 684E-686D correctly set out the principles by which English
law determines whether a domicile of origin has been replaced by a domicile of choice.
These principles cannot be revisited by this court stemming as they do from Udny v Udny
(1869) LR 1 Sc&Div 441, Winans v Attorney-General [1904] AC 287 and IRC v Bullock
[1976] 1 WLR 1178. All the cases state that a domicile of origin can only be replaced by
clear cogent and compelling evidence that the relevant person intended to settle perma-
nently and indefinitely in the alleged domicile of choice.
54. In the present case, it is true to say that Mr Nathanael spent his working life in
England after 1974 and became engaged to be married to Ms Cyganik who herself lived
in London, albeit illegally. But throughout his life Mr Nathanael maintained his links with
Cyprus, he sent one of his daughters to be educated in Cyprus, where she and his grand-
daughter remain, he took or sent large quantities of money to Cyprus, he bought two flats
in Larnaca and had a prospective business interest there, although it was not an interest
that produced an income in the same way as the Hellenic Hotel in Shepherds Bush Road.
On all the evidence I do not consider that Ms Cyganik discharged the burden on her to
displace Mr Nathanael’s domicile of origin and I do not respectfully see on what basis the
deputy judge could decide that at some unspecified date between the execution of the will
in 1995 and the time of the engagement in 1999, Mr Nathanael decided to reside perma-
nently or indefinitely in England. No event of consequence took place between those dates
which could readily justify such a conclusion.
55. Even if Sir Harry Luke was correct to say that Greek Cypriots are gentler and less
strident than their metropolitan cousins (see Lawrence Durrell, Bitter Lemons, page 107
of the Faber edition) it would be surprising to be told that Cypriots are any less attached
than other Greeks to their original homeland. On the primary facts he found, I feel that
the judge just made the wrong decision.
56. Mr Noble for Ms Cyganik submitted that Mr Nathanael, at any rate, acquired a
domicile of choice on or after his engagement to Ms Cyganik. He relied on Forbes v Forbes
(1854) Kay 341 and Aitchison v Dixon (1870) LR 10 Eq 589. As to the first of these cases,
it is true that General Forbes acquired an English domicile by living with his wife and son
in Sloane Street after serving 35 years in India. But his domicile in India was itself a
domicile of choice (his domicile of origin being Scotland) and it is easier to show a change
from one domicile of choice to another domicile of choice than it is to show a change to
a domicile of choice from a domicile of origin. The General was in any event returning
from India permanently to live with a family, consisting of his wife and son, which had
existed for all of his 35 years service. A fiancée without children is not the same.
57. William Allan (the testator in the second case) was Lord Provost of Edinburgh
and unmarried. At the age of 40, however, he came to England “for a wife” and “had the
good fortune to win the hand of a widow … of considerable wealth and expectations.”
The happy couple lived for a while in Scotland but Mr Allan suffered from gout and moved
to Wyebridge near Buxton for the waters and thereafter to Brighton where he lived with
his wife for a further 10 years, having been married for nearly 40 years. It was submitted
that Allan had not abandoned his Scottish domicile because the choice of residence was
really that of his wife who was the carer and provider of the money for their homes. Sir
William James VC said (page 596):
The comparative opulence of the wife can make no difference. The residence and home at
Brighton were not the less his because he may have deferred, however implicitly, to her
wishes. It indeed makes the conclusion in favour of a Brighton domicile irresistible when we
find that it was in the highest degree improbable that the wife should ever have voluntarily
returned to a Scotch home; that the husband had every motive of interest, of gratitude, and
of affection to say to his partner,
Your country shall be our country, the home of your selection shall be our home.
Mr Nathanael was not dependent on Ms Cyganik to anything like the extent of Mr Allan
and it does not seem to me that the value of this authority is any greater than that of
Forbes.
58. I, therefore, agree that this appeal must be allowed. I do not do so with any enthusi-
asm since I find it rather surprising that the somewhat antiquated notion of domicile
should govern the question whether the estate of a person, who was, on any view, habitu-
ally resident in England should make provision for his dependants. Now that many family
matters are decided by reference to habitual residence, there may, perhaps, be something
to be said for reconsidering the terms of section 1 of the Inheritance (Provision for Family
and Dependants) Act 1975. As Dr JHC Morris observed of the concept of domicile in the
last (3rd) edition of his Conflict of Laws (1984), which he wrote before he died:
Originally it was a good idea; but the once simple concept has been so overloaded by a
multitude of cases that it has been transmuted into something further and further removed
from the practicalities of life.
This observation has not been preserved by subsequent editors (6th edition (2005)) but
it deserves to be.
MR JUSTICE LEWISON:
59. I agree with both judgments and I, too, would allow the appeal.
II. Domicile 147
Foote v Foote Estate

2011 ABCA 1, [2011] 6 WWR 453
THE COURT:
I. Introduction
[1] This appeal arises from a trial finding that the late Eldon Douglas Foote was domi-
ciled on his death in Norfolk Island. The domicile of the deceased determines the applicable
law for estate administration purposes. Mr. Foote left a very substantial estate. His wife
and five of his six children challenge the finding of domicile; they say that the proper
domicile is either Alberta or British Columbia. They intend to make family relief claims
and submit that the laws of either British Columbia or Alberta should apply to those claims.
II. Background
[2] At the time of Mr. Foote’s death in 2004, his estate was worth approximately one
hundred and thirty million dollars (US). Mr. Foote also controlled a charitable foundation
worth approximately eighty million dollars (US) and had other assets worth approximately
ten million dollars (US).
[3] Prior to his death, Mr. Foote had already donated forty million dollars to the
Edmonton Community Foundation and the Lord Mayor of Melbourne’s Charitable Fund.
He had also made substantial charitable donations elsewhere.
[4] The bulk of Mr. Foote’s assets were held through corporations in the British Virgin
Islands, including his charitable foundation. He had some investments and investment
properties in Norfolk Island and had a cabin on Pigeon Lake in Alberta. He also had a
condominium in Sydney, Australia, which he bought with his wife Anne, and a condo-
minium in Victoria, British Columbia. Those two condominiums passed to Anne on Mr.
Foote’s death.
[5] In October 2003, Mr. Foote made three wills, executed in Edmonton, Alberta,
each of which appointed his long time friend David Bentley as executor. The Canadian
will disposed of Mr. Foote’s Canadian assets, and his children from his first marriage are
its beneficiaries. The British Virgin Islands will left bequests to each of Anne, her children
and grandchildren, Mr. Foote’s six children, his grandchildren, nieces, nephews, grand-
nieces and grandnephews, cousins’ children, his son Douglas’s ex-wife, and David Bentley.
Annuities were provided for Anne and Mr. Foote’s son Robert, along with trusts for his
grandchildren’s education. The residue of his “worldwide” estate was distributed equally
between the Edmonton Community Foundation and the Lord Mayor’s Charitable Fund.
[6] The Norfolk Island will made various bequests to Anne, Mr. Foote’s children and
stepchildren, and Anne’s sister and brother-in-law. It also directed that Mr. Foote’s estate
in Norfolk Island, known as Foot Nort, be appraised and sold with the proceeds divided
among Anne, Mr. Foote’s children and stepchildren, the Lord Mayor’s Charitable Fund
and the Norfolk Island Administration.
[7] Mr. Foote had lived a colourful life which took him all over the globe. He had three
marriages and six children. Although he started his career as a lawyer in Edmonton, he
developed an overwhelmingly successful business enterprise that spanned Australia,
Japan, and parts of Europe when he became involved in the distribution of a cleaning
product called Swipe. By obtaining the marketing rights for Asia and parts of Europe,
Mr. Foote managed to build a world wide cleaning product empire.
[8] Mr. Foote’s illustrious career, his forays into various international markets and his
family life are extensively outlined in the trial decision. For the purposes of the appeal
the following facts are relevant. Mr. Foote was born in Hanna, Alberta in 1924. He lived
in Alberta for the first 43 years of his life, where he married and had five children. In 1967
he left Edmonton to start his business in Australia and, over the next three years, traveled
extensively in Japan, Australia and Europe.
[9] At about this time Mr. Foote and his first wife divorced and, in 1971, he married
his second wife, Val. Mr. Foote had previously visited Norfolk Island, a small island
approximately 1000 miles east of Sydney, Australia (an Australian protectorate with very
advantageous tax laws), and he was interested in acquiring land there. In the early 1970s
he purchased a substantial property in Norfolk Island and built a residence, Foot Nort,
described as the largest residence on the Island. He and his second wife acquired perma-
nent residency status in Norfolk Island in 1977.
[10] Mr. Foote and Val divorced in 1981 and he married for the third time in 1984.
His new wife, Anne, an Australian citizen, was granted permanent residency status in
Norfolk Island in 1996. In 1999, the Footes purchased an unfinished condominium prop-
erty in Victoria, British Columbia. Construction was completed in 2001, and they spent
the summers of 2001, 2002 and 2003 there. At approximately that time they made some
plans to sell Foot Nort, although no material steps were taken to list or advertise the
property for sale. Unfortunately, Mr. Foote’s health began to fail. In April 2004 he left
Norfolk Island for tests in Australia, where he was diagnosed with cancer. He immediately
traveled to Edmonton to receive treatment at the Cross Cancer Clinic, where he died in
May 2004.
[11] Based on the evidence he heard, the trial judge concluded the following: Mr. Foote
had a domicile of origin in Alberta, where he was born and had lived for 43 years. How-
ever, he found that Mr. Foote had acquired a domicile of choice in Norfolk Island by at
least 1972. None of the parties to the appeal disputes those findings. The trial judge found
that despite an expressed desire to return to Canada and the acquisition of a second home
in British Columbia in 2001, Mr. Foote had not abandoned his Norfolk Island domicile
of choice at the time of his death.
[12] Anne’s primary position at trial and on appeal, is that the domicile of choice of
Norfolk Island had been abandoned as a result of Mr. Foote’s expressed desire to return
to live in Canada and his having left Norfolk Island to receive treatment and ultimately
to live out his last days in Canada. She submits that having failed to acquire a new domicile
of choice, Mr. Foote reverted to his domicile of origin, Alberta. Alternatively, she submits
that Mr. Foote acquired an Alberta domicile by choice when he moved to Edmonton prior
to his death.
[13] The children’s position at trial and on appeal is that Mr. Foote acquired a new
domicile of choice in British Columbia when he developed the intention to return to
Canada to live and purchased the condominium in British Columbia.
[14] In detailed, lengthy, and considered reasons the trial judge disagreed with both
those positions. He concluded that any plans to leave Norfolk Island to take up residence
in Victoria and live there indefinitely were preliminary and underdeveloped, and that the
II. Domicile 149
intention to do so was equivocal. Abandonment of domicile of choice had not been

established, nor had the acquisition of a new domicile of choice. Most of the family appeal.
III. Issue on Appeal

[15] Did the trial judge err in concluding that the domicile of the late Eldon Foote at
the time of his death in May 2004 was Norfolk Island?
IV. Standard of Review

[16] The appellants all characterize the issues on appeal as questions of law, arguing
that the trial judge used the incorrect tests to assess abandonment and acquisition of
domicile of choice. Specifically, they submit that the trial judge imported additional
requirements to the legal construct of intention to abandon by requiring an unequivocal
intention to abandon at the same time as an act in furtherance thereof, and by requiring
severance of all ties with the previous domicile of choice to establish acquisition of a new
one. Alternatively, they argue that acquisition of a new domicile of choice occurs when
the intention is expressed, and that it is an error of law to fail to find that the purchase of
a home in Victoria with an expressed intention of residing there indefinitely in the future
is sufficient to establish a new domicile of choice.
[17] While these arguments are carefully couched to suggest they are pure questions
of law, distilled down, they are not. Whether Mr. Foote acquired a new domicile of choice
in British Columbia or Alberta, or whether he abandoned his domicile of choice by leaving
Norfolk Island and going to Edmonton for treatment, thereby reverting back to his
domicile of origin of Alberta, are questions of mixed fact and law reviewable on the basis
of palpable and overriding error. We find no extricable error of law that would warrant a
standard of review of correctness.
[18] For the reasons that follow the appeals must be dismissed.
V. Analysis
[19] The concept of domicile is relevant to the law governing a person’s status and
property. For purposes of this appeal, the relevant point is that the domicile of a deceased
person determines the law that will govern estate administration. A person will always
have one, and only one, domicile at any point in his or her life. A person begins with a
domicile of origin, generally the place where he or she was born. No one disputes that
Mr. Foote’s domicile of origin is Alberta, where he was born and lived for the first 43 years
of his life, and where he attended university, embarked on the practice of law, married
and had five children.
[20] One’s domicile of origin can be displaced by a “domicile of choice,” a place where
a person has chosen to live. The classic description of domicile of choice is found in Udny
v. Udny (1886), L.R. 1 Sc. & Div. 441:
Domicile of choice is a conclusion or inference which the law derives from the fact of a man
fixing voluntarily his sole or chief residence in a particular place, with an intention of con-
tinuing to reside there for an unlimited time. … There must be a residence freely chosen,
and not prescribed or dictated by any external necessity, such as the duties of office, the
demands of creditors, or the relief from illness; and it must be residence fixed not for a limited
period or particular purpose, but general and indefinite in its future contemplation.
[21] Of particular relevance to this appeal is the requirement that the choice to change
domicile must be voluntary, not dictated by business, debts or health. Some authorities
speak of one’s domicile of choice as a place where one intends to “end one’s days.” That
language is unhelpful where, as here, a person with a fatal and fast-moving illness makes
a trip shortly before his death for treatment. Determining an intention to change domiciles
in such a situation is not a simple matter of saying the deceased intended to “live out his
days” in the new location. It could not, in most cases, be described as a voluntary move.
[22] The acquisition of a domicile of choice involves two factors: “the acquisition of
residence in fact in a new place and the intention of permanently settling there … in the
sense of making that place [one’s] principal residence indefinitely”: Trottier v. Rajotte,
[1940] S.C.R. 203 at 206, 1 D.L.R. 433 [emphasis added].
[23] By 1972, Mr. Foote had separated from his first wife and married his second wife.
He had been away from Alberta for some four years establishing his new business enter-
prise, and in 1972 he received an entry permit for Norfolk Island. He then acquired
property on Norfolk Island and built a substantial residence there. With respect to this
time in Mr. Foote’s life, the trial judge found: “[t]he reality in 1972 was that Mr. Foote was
starting his new life, with his new wife in his new residence in a new country. This evi-
dence is overwhelming that Mr. Foote’s domicile changed from Alberta to Norfolk Island
by April 1972.” In 1978, Mr. Foote was granted permanent residency status in Norfolk
Island, a fact that, as the trial judge found, “cemented the indefinite nature of his residency
on Norfolk Island.”
[24] The evidence strongly supports the trial judge’s conclusion that Mr. Foote
acquired a domicile of choice in Norfolk Island in about 1972, and the appellants do not
dispute that finding on appeal. They say, however, that at the time of his death Mr. Foote
had either acquired a new domicile of choice in British Columbia or Alberta, or had
abandoned Norfolk Island without adopting a new domicile of choice leading to reversion
to his domicile of origin of Alberta. We have already discussed what is required to estab-
lish acquisition of a new domicile of choice. The test for abandonment of domicile of
choice is similar.
[25] The following rule is set out in Dicey, Morris and Collins on The Conflict of Laws,
14th ed. (London: Sweet & Maxwell, 2006) at 151:
Rule 13(1) A person abandons a domicile of choice in a country by ceasing to reside
there and by ceasing to intend to reside there permanently or indefinitely, and not otherwise.
[26] The test for loss of domicile of choice is two-fold: it requires an intention to cease
to reside in a place coupled with acts that end one’s residence. It is described in Dicey as
follows:
A domicile of choice is lost when both the residence and the intention which must exist for
its acquisition are given up. It is not lost merely by giving up the residence nor merely by
giving up the intention [emphasis added].
[27] Castel & Walker, in their Canadian Conflict of Laws at s. 4.8, 6th ed. (Markham,
Ont.: LexisNexis Butterworths, 2005), describe the process of abandonment of a domicile
of choice as “the converse of its acquisition.” They also note the dual nature of the test. To
II. Domicile 151
paraphrase, for Mr. Foote to have abandoned his domicile of choice on Norfolk Island, it
would be necessary for him to cease to reside there and also to cease to have the intention
to return to Norfolk Island as his permanent home. “Absence without the intention of
abandonment is of no effect, nor is intention without any actual change of residence”:
Castel & Walker at s. 4.8.
[28] The trial judge was alive to the legal test. On appeal, Mr. Foote’s children say that
the trial judge found that, by 2002 Mr. Foote had developed the requisite intention to
cease residing on Norfolk Island and that this, coupled with the fact that he had purchased
a condominium in Victoria, was sufficient for him to abandon his domicile of choice and
acquire a new domicile in British Columbia. Essentially, the children submit that the trial
judge, having found the necessary intent, failed to appreciate that it was not necessary for
Mr. Foote to take further steps to sever his ties with Norfolk Island in order to acquire a
new domicile elsewhere.
[29] In support of their arguments, the children point to several comments made by
the trial judge in the course of his lengthy reasons that, they say, amount to findings that
Mr. Foote had developed the necessary intent to satisfy the first part of the test for aban-
donment of a domicile of choice (or, alternatively, acquisition of a new domicile of choice).
When one reads the trial judge’s reasons as a whole, however, it is clear that, in the final
analysis, the trial judge concluded that in 2001 to 2002 Mr. Foote had decided to “re-
establish residency” in Canada by moving to Victoria, but that his plans in that regard
had not crystallized into an intention to abandon his domicile of choice of Norfolk Island
by the time of his death in 2004. The trial judge’s findings at [439] of his reasons are
illustrative of his conclusion on this point. He held:
There is clear and significant evidence that Mr. Foote had planned to change his domicile
(his primary residence) to Victoria at some point in the next several years. That was his
intention, but that intention was, in certain senses, provisional and under-developed.
[30] The trial judge provided several reasons for that conclusion. He found that it was
unlikely that Mr. Foote would have moved from Norfolk Island without first having sold
Foot Nort. This finding does not, as the appellants submit, impose a requirement that
Mr. Foote “sever all ties” with Norfolk Island before he could be found to have changed
domicile, but rather is a finding of fact relevant to reconstructing Mr. Foote’s intentions
based on evidence of his personality and history. At the time of Mr. Foote’s death, Foot
Nort had not been listed for sale, nor had it been appraised. Likewise, the trial judge found
that it was unlikely that Mr. Foote would have moved from Norfolk Island and established
residency elsewhere without being certain of the tax consequences of doing so and taking
any necessary steps to implement the tax advice received. Mr. Foote had begun the process
of receiving such tax advice in 2002, but no further concrete steps had been taken prior
to his death. As the trial judge noted, tax planning remained at the preliminary stage.
[31] For those reasons, the trial judge ultimately concluded that Mr. Foote was very
likely to move from Norfolk Island to Victoria at some point, but “that likelihood and an
intent to take certain preliminary steps to assist that relocation cannot, alone, displace
his longstanding domicile on Norfolk Island.” Accordingly, he found that the appellants
had failed to prove the intention component of abandonment, or the parallel intention
to adopt a Victoria domicile. The evidence supports these conclusions and we see no error
that would warrant intervention on appeal.
[32] The trial judge also considered the second part of the test for abandonment of a
domicile of choice—whether Mr. Foote had taken overt acts to give up his residence on
Norfolk Island, or to adopt a permanent residence in Victoria. As the trial judge noted,
domicile cannot be changed by a simple declaration. Mr. Foote had, throughout his life,
many different residences in various parts of the world, some owned and some rented.
The trial judge found, however, that Foot Nort was his primary residence from the time
it was built in the 1970s up until the time of his death. That fact was not altered by the
purchase of the condominium in Victoria, which was occupied only in the summers of
2001, 2002 and 2003. The evidence supports this conclusion. For instance, even up to the
time just prior to his death, official documents completed by Mr. Foote continue to
identify him as a resident of Norfolk Island and list Norfolk Island as his permanent
address.
[33] The appellants are correct that it is not necessary for a person to completely cease
to reside in a location to abandon it as his domicile. The trial judge expressly acknowl-
edged that principle, noting at [483] of his reasons that Mr. Foote could have kept business
interests in Norfolk Island and retained possession of Foot Nort, and still have abandoned
his domicile there and acquired a new one in Victoria. However, on the evidence, the trial
judge concluded that this is not what had happened. When Mr. Foote died in 2004, Foot
Nort remained his principal residence. The Victoria condominium had, at that point,
been used for brief visits but no more. Again, this conclusion is amply supported by the
evidence and we see no reason to interfere with it.
[34] We also cannot agree with Anne’s position on appeal, that Mr. Foote had aban-
doned his domicile of choice of Norfolk Island when he declared his intention to return
to Canada and that, no new domicile of choice having been acquired before his death, he
reverted to his domicile of origin of Alberta. That proposition cannot be correct. One can
envision circumstances where such a sequence of events could lead to absurd results. A
person long resident in Canada could declare his intention to move to Arizona to get
away from the cold winters, make a mere visit to Phoenix and die of a sudden heart attack
while there. If a declaration of intent was sufficient to abandon his long-standing domicile
of choice in Canada, but he had not taken up residence in Phoenix so as to establish a
new domicile of choice there, he could be left with reverting to a different domicile of
origin which he had left at the age of three, with which he had no connection, and to
whose laws he would not have wished to be subject. That would not be a just result.
[35] Moreover, Anne’s argument depends on a finding that Mr. Foote had abandoned
his domicile of choice of Norfolk Island, a conclusion rejected by the trial judge. Like the
other appellants, Anne points to several findings of the trial judge that, she says, are suf-
ficient to conclude that Mr. Foote had abandoned his domicile of choice. Like the other
appellants, however, that argument ignores the trial judge’s ultimate conclusion that those
findings were not sufficient to meet the test for abandonment. For the reasons set out
above, this ground of appeal must fail. The trial judge’s ultimate conclusion that Mr.Foote
did not have the requisite intent to abandon his domicile of choice stands.
VI. Conclusion
[36] For these reasons, the appeals are dismissed.
II. Domicile 153
NOTES
1. By what law is domicile determined? It is well established that a court must determine
a person’s domicile according to the rules for ascertaining domicile accepted by the lex fori,
a proposition codified in s 2 of the Manitoba Domicile and Habitual Residence Act, below (for
a discussion and critique of the contrary view, see Nygh (1995) at 212). In cases where juris-
diction over a proceeding is available in more than one country, each having different con-
cepts of domicile, the choice of forum can thus change the substantive result even though
the choice of law rules in all fora are stated in identical terms.
2. Residence or physical presence? The conventional common law view is that residence,
as an element of the acquisition of a domicile of choice, requires little more than physical
presence, so long as the person is not present merely as a tourist or casual visitor. The more
important issue, in other words, is what intention underlies the physical presence. An immi-
grant can acquire a domicile of choice immediately upon arrival, if the requisite evidence of
intention exists: see Schwebel v Ungar, [1965] SCR 148 at 153; Paul Lambert v An tArd-
Chláraitheoir, [1995] 2 IR 372 (HC); Bell v Kennedy (1868), LR 1 Sc & Div 307 (HL). For a much-
discussed example in the interstate context in the United States, see White v Tennant, 31 W Va
790, 8 SE 596 (1888). In the United Kingdom, the Law Commission has recommended that
the traditional common law view be codified by incorporating the word “presence” rather
than “residence” in its proposed statutory restatement of the law of domicile: see Law Com-
mission no 168 at para 5.7.
3. Multiple residences. In cases where a person establishes a second residence in a new
place without relinquishing the old, there is English authority that a domicile of choice can
be acquired at the new location only if this is shown to be the “chief residence”: see Plummer
v IRC, [1988] 1 All ER 97 (Ch D); for an argument that this decision goes against authority, see
Smart. The element of intention, in other words, is insufficient to convert a new secondary
residence into a new domicile. This is also the approach adopted in the United States: see the
American Law Institute’s Restatement (Second) of Conflict of Laws (1971):
§ 20. When a person with capacity to acquire a domicil of choice has more than one dwell-
ing place, his domicil is in the earlier dwelling place unless the second dwelling place is his
principal home.
Some commentators have seen this development as reflecting a shift in emphasis in the
common law of domicile away from subjective intention to the more objective factual con-
nection of residence: see Fentiman (1991). This perception accords with the strong reliance
the court in Foote v Foote Estate, above, placed on the fact that Norfolk Island remained
Mr. Foote’s primary residence at the time of his death to support its conclusion that he never
gave up his domicile of choice there.
4. Nature of the required intention. In Gillespie v Grant (1992), 4 Alta LR (3d) 122 (QB),
Mason J defined domicile as “a person’s permanent home which requires the act of residence
and the intention to remain there permanently” (emphasis added). In other cases, the court
finds it sufficient to establish a domicile of choice if the person has the intention to make his
or her home “indefinitely” in the new place:
I find that Urquhart had established a domicile of choice in Ontario by the summer of 1980. He
was living there in fact and, insofar as he had any intention, was to go on living there indefin-
itely. I need not find that he intended to live there permanently.
See Re Urquhart Estate (1990), 74 OR (2d) 42 at para 62 (H Ct J), aff’d (1991), 3 OR (3d) 699 (Div Ct).
In still other cases, such as Agulian v Cyganik, above, the court states that the relevant
person must have intended to settle permanently and indefinitely in the alleged domicile of
choice, implying that the terms are interchangeable. Fawcett suggests that the slide between
the terms “permanently reside,” “reside for an unlimited time,” and “reside indefinitely”
introduces ambiguity that might allow policy to affect the court’s determination (at 382).
In Re Foote Estate, the lower court rejected the proposition that a domicile of choice
required an intention to make a place one’s permanent home, in the sense of being the place
where one intended to reside for the rest of one’s life, or to end one’s days. Rather, it was suffi-
cient if the person intended to reside in a place indefinitely, and a period of residence quali-
fied as indefinite unless it had “either a pre-determined end point, or the resident ha[d] clear
and identified criteria on which that residency [would] end”: Re Foote Estate, 2009 ABQB 654
at para 544, and see paras 258-272. The Court of Appeal’s decision, above, does not address
the point and appears to treat “permanently” and “indefinitely” as interchangeable concepts.
Indefinitely is the standard used in the New Zealand Domicile Act, 1976 and the Australian
Domicile Acts, 1982: see Nygh (1995) at 209. In the United Kingdom, the English and Scottish
Law Commissions likewise recommended that the requisite intention be stated as an inten-
tion to settle in the relevant country for an indefinite period: see Law Commission no 168 at
paras 5.8 to 5.22.
5. Difficulties of proving intention. The difficulties of proof in domicile cases are notorious.
What is at issue is a person’s subjective attitude toward a place, a “fact” hardly susceptible to
easy proof, and in relation to which evidence as to even the most minor details of a person’s
life may have to be brought to bear. The problem is compounded in succession proceedings,
where the person whose domicile is in issue is deceased and the survivors’ evidence may
well be conditioned by self-interest. Direct evidence of the person’s intention, past or pres-
ent, is admissible: see Trottier v Rajotte, [1940] SCR 203. However, the probative value of such
evidence is minimal if the declarations are self-serving, as where the establishment of a new
domicile would enable a person to avoid liability for taxation or familial obligations on suc-
cession under the old lex domicilii. The weight, obviously, also depends on evidence that the
person understood the legal meaning of the concept of domicile in declaring his or her
intention. Do the difficulties of proving intention favour placing a greater emphasis on the
more objective element of residence in ascertaining domicile? See Trakman.
6. Nationality as an element of intention. National status may be relevant to the ascertain-
ment of domicile; for instance, evidence that a person has not sought permanent residence
or other formal status or has not taken out citizenship, though qualified to do so, may mili-
tate against an intention to establish a domicile of choice in that country. On the other hand,
naturalization does not necessarily imply the intention to change one’s domicile to the place
of the naturalization: see Wahl v Attorney General (1932), 147 LT 382 (HL) and F (F’s Personal
Representatives v IRC), [2000] STC (SCD) 1.
7. Relevance of illegal presence to the establishment of domicile. There is Canadian authority
that a person who is illegally in the country can nonetheless acquire a domicile of choice
there: see Jablonowski v Jablonowski, [1972] 3 OR 410, 28 DLR (3d) 440 (H Ct J), in which the
court declined to follow the contrary ruling in Bednar v Deputy Registrar of Vital Statistics
(1960), 24 DLR (2d) 238 (Alta SC). See also the decision of the Quebec Court of Appeal in Adop-
tion—152, below. In Mark v Mark, [2006] 1 AC 98, the House of Lords held that the illegality of
II. Domicile 155
residence in England was no bar to the acquisition of either a domicile of choice or habitual
residence in that country, relying in part on Jablonowski, above. The issue has also arisen in
cases dealing with the interpretation of “ordinary residence”: see Blair v Chung, 2006 ABQB
534, 63 Alta LR (4th) 84, and Silva v John Doe, 2016 ONSC 307, both discussed below.
8. Dual domiciles in federal systems. Domicile connotes an exclusive connection—no
person can have more than one domicile at one and the same time. However, in countries
organized on a federal model, it is possible for a person simultaneously to have two domi-
ciles—a federal domicile for the purposes of federal law and a domicile in one of the prov-
inces or states for the purposes of provincial or state law.
9. Difficulties of establishing domicile in federal systems. When the person whose domicile
is in issue is a recent immigrant to a country organized on a federal model, it may be
extremely difficult to establish the necessary intention to acquire a domicile in any one of
the units that make up that country:
So with regard to the United States, an intention indefinite as to locality to live somewhere in
the United States is in itself inconclusive where the question at issue is: Has A, the person whose
domicile is in dispute, taken up residence in a given State? Residing in Philadelphia with the
intention, not of making his permanent home in Philadelphia, but of making his home in Phila-
delphia, Baltimore or Washington, could not be effective to displace the domicile of origin.
See Trottier v Rajotte, [1940] SCR 203 at 210-11.

The result in cases of this type may be wholly inappropriate—the old domicile will cling
to individuals physically present in a federal state and fully intending to settle there perma-
nently unless and until they fix on a specific state or province as their home for an indefinite
period. In days of high job mobility, this may never happen. In order to accommodate such
cases, the Australian Domicile Acts, 1982 provide:
[A person] who is, in accordance with the rules of the common law relating to domicile as modi-
fied by this Act, domiciled in a union, but is not, apart from this section, domiciled in any par-
ticular one of the countries that together form the union, is domiciled in that one of those
countries with which he has for the time being the closest connection.
A similar provision is found in the New Zealand Domicile Act, 1976 and is part of the United
Kingdom reform proposals: see Law Commission no 168. The point has not been treated
legislatively in Canada but it has been suggested by an Australian commentator that the
same principle should be adopted as a matter of common law: see Nygh (1995) at 202-3. See
also Nelson v Nelson, [1925] 3 DLR 22 (Alta SC). In a similar vein, Canadian courts may require
a lesser burden of proof to show a change of domicile from province to province than for
change of domicile between countries: see Young v Young (1959), 21 DLR (2d) 616 at 621
(Man CA).
10. Relocation by reason of public duty. The place of residence of soldiers, diplomats, and
others subject to a public duty is often dictated by the demands of their office. While it is
possible for them to acquire a domicile of choice in the place where they are posted, “the
standard of proof required as to the intention to remain permanently is somewhat
higher … , as the mere factum of residence does not tend to show such intention, as it would
in the case of another person”: see Rowland v Rowland (1973), 2 OR (2d) 161 at 164 (H Ct J),
commenting on Wilton v Wilton, [1946] OR 117, [1946] 2 DLR 397 (Sup Ct J), where the onus of
proof was held not to have been discharged in the case of a member of the armed forces.
And note art 79 of the Civil Code of Quebec, reproduced below.
11. Relocation by force of circumstances. In Udny v Udny (1869), LR 1 Sc & Div 441 (HL), Lord
Westbury stated that in order to acquire a domicile of choice, the new residence must be
“freely chosen and not prescribed or dictated by any external necessity, such as the duties
of office, the demands of creditors, or relief from illness.” This is somewhat of an overstate-
ment. An invalid or a political refugee or a fugitive from justice or creditors is not ipso facto
incapable of forming the requisite animus to establish a domicile in the country to which he
or she flees: see Osvath-Latkoczy v Osvath-Latkoczy, [1959] SCR 751. The motive for the reloca-
tion may, however, be significant to the extent that it negatives the intention to make the
place one’s home indefinitely. There is some authority in the United States that a prisoner
can establish a domicile within a state, despite the fact that the prisoner’s presence there
flows from circumstances outside his or her control: see Stifel v Hopkins, 477 F (2d) 1116 (6th
Cir 1973), criticized in Applegate. But even confinement for life need not lead to a change in
domicile, absent the desire of the person confined: see In re the late Emperor Napoleon
Bonaparte (1853), 163 ER 1429 (Prerog).

CQLR c C-1991
Art. 75. The domicile of a person, for the exercise of his civil rights, is at the place of
his principal establishment.
Art. 76. Change of domicile is effected by a person establishing his residence in
another place with the intention of making it his principal establishment.
The proof of such intention results from the declarations of the person and from the
circumstances of the case.
Art. 77. The residence of a person is the place where he ordinarily resides; if a person
has more than one residence, his principal residence is considered in establishing his
domicile.
Art. 78. A person whose domicile cannot be determined with certainty is deemed to
be domiciled at the place of his residence.
A person who has no residence is deemed to be domiciled at the place where he lives
or, if that is unknown, at the place of his last known domicile.
Art. 79. A person called to a temporary or revocable public office retains his domicile,
unless he manifests a contrary intention.
Art. 80. An unemancipated minor is domiciled with his tutor. …
• • •
Art. 83. The parties to a juridical act may, in writing, elect domicile with a view to the
execution of the act or the exercise of the rights arising from it.
Election of domicile is not presumed.
II. Domicile 157
Adoption—152
2015 QCCA 348 (English translation) (footnotes incorporated into text)
[This appeal arose from an application by an aunt for adoption of her nephews who, while
of full age at the time of the application, had come to live with her in Quebec from St.
Vincent several years previously while they were still minors, in violation of federal and
provincial immigration laws. The court ultimately upheld the trial judge’s decision not to
grant the adoption, but for different reasons. The following excerpt sets out the court’s
reasons for concluding, contrary to the opinion of the trial judge, that the fact that the
appellant’s nephews were living in Quebec in violation of immigration legislation did not
prevent them from establishing a domicile within the meaning of art 75 of the Civil Code
of Quebec, above.]
BICH JA (Gagnon and Schrager JJA concurring):

[18] The question of the children’s domicile is a crucial one since, if their domicile is
foreign, the rules governing their eligibility for adoption and the necessary consent are
those of the foreign law referred to in art. 3092 C.C.Q. (it being understood that jurisdic-
tion of the Quebec courts would then be justified under art. 3147 C.C.Q. because the
appellant, who brought the adoption application, is domiciled in Quebec).
[19] The principal provisions of the Civil Code of Quebec concerning the notions of
domicile and residence are as follows:
[The decision then sets out arts 75-78 and 80, reproduced above.]
[24] Determining where the appellant’s nephews are domiciled would have been
simple had the issue been raised when they were still minors. Indeed, minor children are
by law domiciled with their tutor (first para. of art. 80 C.C.Q.) or with the parent with
whom they usually reside (second para. of art. 80) or where the court has fixed their
domicile (second para., in fine, of art. 80). The domicile of the minor is thus governed by
a legal and absolute presumption that may even result in a legal fiction, in the case where
the minor does not, in fact, ordinarily reside at the place indicated by this provision; the
presumption and fiction will cease to have effect when the child attains full age.
[25] In this case, the appellant was not and has never been her nephews’ tutor, as they
were not entrusted to her in this capacity. It may be supposed (although the evidence is
silent on this point) that their parents (or grandparents) were their tutors; no judgment
had otherwise fixed their domicile. Therefore, when they were minors (subject to the
emancipation of one of them), they were not domiciled with the appellant but rather, as
a matter of law, in Saint Vincent, despite their physical presence in Quebec.
[26] This means that if the appellant had initiated adoption proceedings in 2010, for
example, she would have been obliged to comply with arts. 563 to 565 C.C.Q. (adoption
by a person domiciled in Quebec of children domiciled outside Quebec, specifically Saint
Vincent) and with art. 3092 C.C.Q. (designation of the law governing consent to and
eligibility for adoption—in this case, the law of Saint Vincent).
[27] Now that they are of full age, and since the emancipation of the youngest, the
children are by law domiciled “at the place of [their] principal establishment,” in accord-
ance with art. 75 C.C.Q. … . When they attained full age (or were emancipated), they
ceased to be subject to the legal regime of art. 80 C.C.Q., which establishes domicile
according to the situation of a third party (i.e. parent or tutor, subject to a court decision),
and became subject to the legal regime of art. 75 C.C.Q., which establishes domicile
according to their personal circumstances. The question before us, then, does not concern
a change of domicile governed by art. 76 C.C.Q.
[28] That being the case, what is the place of the principal establishment of the chil-
dren within the meaning of art. 75 C.C.Q., and therefore their domicile? As this Court
stated in Thérien c. Pellerin, [[1997] RJQ 816 at 833 (CA), leave to appeal to SCC refused,
25848 (16 October 1997)] per Baudouin, J.A., this [TRANSLATION] “complex notion …
groups together two elements, the first of which is volitional (the intention to make a
place one’s principal establishment) and the second material, constituted by a set of actions
and behaviours giving effect to this intention” … .
[29] We know that the trial judge did not feel that either of these elements was present:
in her opinion, although the appellant’s nephews are physically in Quebec, they do not
have property, jobs, or lawful occupations, and their intention to settle here—while
recognized—cannot suffice since they are at risk of being deported at any moment given
their status (or lack thereof) under immigration laws.
[30] It is undeniable that having a family, job and assets in the place where a person
usually lives and is physically present will normally allow confirmation that such place is
that person’s principal establishment and that he or she has the appropriate intention.
These criteria are not, however, absolute and exclusive. If they were, they would indicate
that in law the appellant’s nephews, who are not domiciled in Quebec according to the
trial judgment, are also not domiciled in Saint Vincent, the only other possible state with
which they have ties. Indeed, not only are they not physically in that country and have
not been for several years, but they also do not study or work there, own property, or have
any intention of returning. Their intention, rather, is to settle permanently in Quebec,
where they live. Admittedly, they have family in Saint Vincent [just as they do in Que-
bec—namely, their aunt], but the evidence reveals that this family consists of no one other
than their grandparents (whose present condition is unknown) and their parents, who
have abandoned them.
[31] I am not inclined to reach such conclusion. For the purposes of the Civil Code of
Quebec, a person necessarily has a domicile, in other words a principal establishment,
and if that person does not have a domicile, the Code will attribute one by presumption
(see infra).
[32] Moreover, I am of the view that, in ruling on the question of domicile, the trial
judge employed criteria that, while commonly used, are ill-adapted to the situation of the
appellant’s nephews. The analysis that must be performed for the purposes of art. 75
C.C.Q. is necessarily contextual, but no weight was given here to the very unique circum-
stances of the case, which cannot be summed up by the mere observation that the children
violated immigration laws by remaining in Quebec after their visitor status had expired.
[33] With the utmost respect, the trial judgment, while distinguishing domicile and
residence, appears to ignore art. 77 C.C.Q., which I cite again for greater convenience:
77. [TRANSLATION] The residence of a person is the place where he ordinarily resides;
if a person has more than one residence, his principal residence is considered in establishing
his domicile. [Emphasis added.]
II. Domicile 159
[34] According to case law and commentary, residence is a fact-based notion. Resi-
dence is of great importance when determining an individual’s domicile because, prac-
tically speaking, it is a strong indicator thereof. Of course, a person may have several
residences, while he or she may have only one domicile. A person may even be domiciled
where he or she does not ordinarily reside (see art. 79, for instance). The fact remains,
however, that domicile and residence—or at least, domicile and principal residence,
according to art. 77 C.C.Q.—quite often coincide. [On this subject, see Édith Deleury &
Dominique Goubau, Le droit des personnes physiques, 5th ed by Dominique Goubau
(Cowansville, Que: Éditions Yvon Blais, 2014) at 339, para 316 and 344, para 328.]
[35] In the case of a person of full age, domicile, for the purposes of art. 75 C.C.Q.
[the same is true for the purposes of art 76 CCQ], is indeed primarily determined on the
basis of residence. To determine a person’s residence, art. 77 C.C.Q. requires a consider-
ation of where that person “ordinarily resides” … , an expression implying a certain level
of stability or referring to long-lasting establishment, and excluding occasional stays
(holidays, business trips, passing through, and so on) [Deleury & Goubau at 293 – 94,
para 300]. How does this apply to the appellant’s nephews?
[36] In this case, there is one answer only: they ordinarily reside in Quebec (specif-
ically Town A) and have done so for five years (four at the time of the adoption trial); the
eldest has lived here of his own accord since August of 2011 and the youngest since his
emancipation in November of 2012. They have family here (the appellant, their aunt),
with whom they live full-time, and it is where they keep their few belongings. They do
not attend a regular school, but they do go to a centre where they receive educational
instruction (French classes, among others) to assist their integration.
[37] Furthermore, and this is the volitional element, they intend to make Quebec their
place of ordinary residence, their principal establishment. This intention, which is not
contested, coincides with their actions. The trial judge found this intention to be insuf-
ficient, but she did not deny its existence. In fact, she acknowledged it.
[38] Therefore, on the basis of these two elements (volitional and material), it can be
concluded that, with respect to exercising their civil rights, the appellant’s nephews are
truly domiciled in Quebec, their sole place of residence, which is also their principal
establishment and where they live their lives. Again, the situation would have been dif-
ferent had they been minors whose domicile was dependent on the purely legal criteria
set out under art. 80 C.C.Q. But they are now persons of full age, whose domicile is
determined according to art. 75 C.C.Q., which requires a consideration of material and
intentional elements that are not relevant for the purposes of art. 80 C.C.Q.
[39] I would add that, even if the question were to be considered from the perspective
of art. 76 C.C.Q. (change of domicile), my conclusion would be the same. The evidence
has established on a balance of probabilities the material and volitional elements that
coincide here. From this point of view, the situation of the appellant’s nephews is different
from that of the parties in Winnycka v. Orischuk [[1970] CA 1163], a case that addressed
the conditions for a change of domicile under the former art. 80 of the Civil Code of Lower
Canada (currently art. 76 C.C.Q.). In that judgment, the Court found that persons (of full
age) who had left Poland with the firm intention of never returning were nevertheless
still domiciled there at the time of their marriage. That case concerned a transitional situ-
ation where the parties, who wanted to leave Poland after the Second World War, settled
in Austria for a time in 1948, pending their emigration to France or Canada. While in
Austria, they married, but without a prenuptial contract. Soon thereafter, they settled in
Canada. The issue required a determination of their matrimonial regime. Since that issue
would be resolved by the law of their domicile at the time of their marriage, this domicile
required identification. The Court found that, although the parties were physically in
Austria at the relevant time, they were not domiciled in that country because they were
merely passing through with no intention of settling there, planning instead to leave
[TRANSLATION] “as soon as they could” [Winnycka v Orischuk at 1166] (which they did).
They were therefore still domiciled in Poland, as their change of domicile had not been
completed. The Court ruled that it is not enough to actually abandon one’s domicile of
origin to change it; it is necessary to settle in another place that is intended to be the
principal establishment. When the parties wed in Austria, they had neither settled there
nor intended to do so.
[40] The same approach had been taken by the Supreme Court of Canada in Trottier
v. Rajotte [[1940] 1 SCR 203 at 209]:
Before proceeding to discuss the facts, it, perhaps, ought to be added that a domicile of origin
is not lost by the fact of the domiciled person having left the country in which he was so
domiciled with the intention of never returning. It is essential that he shall have acquired a
new domicile, that is to say, that he shall in fact have taken up residence in some other coun-
try with the fixed, settled determination of making it his principal place of residence, not for
some particular purpose, but indefinitely.
[41] That being the case, the Supreme Court found that a couple from Quebec who
married in 1928 in the United States, where they had resided for work (5 and 6 years
respectively), had not established their domicile there because they failed to show that
this was their “permanent residence ‘general and indefinite in its future contemplation.’ ”
[Trottier v Rajotte at 208]. It bears saying that the evidence was thin, as the Court, per
Duff, J., [Trottier v Rajotte at 213] pointed out. Indeed, nothing was known of the hus-
band’s living conditions (at the time, his domicile determined that of his wife): “Had he
a house?” asked the Court. “Was he living in lodgings? Had he anything in the nature of
permanent employment?” Moreover, the Court added, the husband’s testimony did not
establish “that he had a fixed settled intention to make his permanent residence either at
Bristol or in the state of Connecticut” [Trottier v Rajotte at 215].
[42] I do not know that such factual situation would lead to the same conclusion today
(not to mention the issue of the wife’s domicile) or that we would have the same eviden-
tiary requirements (by comparison, see Droit de la famille—647 [[1989] RJQ 1161 (CA)]).
In any event, the situation here is very different.
[43] Since attaining full age in 2011, the eldest of the appellant’s nephews has chosen
to permanently establish himself in Quebec, where he has lived for several years. The
youngest has done the same since his emancipation in 2012. Unlike the spouses Winnycka
and Oryschuk or Rajotte, who did not intend to settle in the country where they married,
the intention of both children is firm and clear: they do not intend to be passing through,
and while they understand the precariousness of their status with respect to immigration
laws, they intend to stay here and do what must be done to this end. They do not intend
to return to Saint Vincent, where they no longer have any ties (aside from their biological
ties to parents who abandoned them and grandparents who can no longer care for them).
II. Domicile 161
[44] That said, if I were to conclude, for the purposes of either art. 75 or even 76 C.C.Q.,
that the children’s true intention is impossible to ascertain or that, because of the lack of
stable connecting factors (employment, studies, assets, etc.), their principal establishment
cannot be determined with sufficient certainty, I would then turn to 78 C.C.Q. … .
[45] This provision sets out three presumptions that are absolute, and thus irrebuttable
(as indicated by the use of the word “deemed,” in accordance with paragraph 2 of art. 2847
C.C.Q.). These presumptions apply in a cascading manner:
First presumption: if the domicile cannot be determined with certainty, a person is deemed
to be domiciled at his place of residence (within the meaning of art. 77 C.C.Q.).
Second presumption: a person who has no residence is deemed to be domiciled at the
place where he lives.
Third presumption: if the place where the person lives is unknown, he is deemed to reside
at the place of his last known domicile.
[46] In the present case, we may rely on the first presumption: the children reside in
Quebec, where, in fact, they “demeure[nt] de façon habituelle” (“the place where they
ordinarily reside”) within the meaning of art. 77 C.C.Q., which makes it their domicile,
according to the first paragraph of art. 78 C.C.Q.
[47] If, however, for any reason, I were to conclude that the children cannot be con-
sidered to be ordinarily residing in Quebec, I could still not conclude that they reside in
Saint Vincent, where they have not lived for many years, where they have never returned
and do not intend to return, and where they have nothing left of their old life except the
biological ties referred to earlier. And if they reside neither in Quebec nor in Saint Vincent,
the second presumption then comes into play: “a person who has no residence is deemed
to be domiciled at the place where he lives” … , according to art. 78 C.C.Q. There is no
doubt that the appellant’s nephews live in Town A, Quebec.
[48] Because the place where they live is not unknown, the third presumption does
not come into play.
[49] In short, whether through art. 75 C.C.Q. or the first or second presumption stated
in art. 78 C.C.Q., the children are domiciled in Quebec.
[50] In this context, what significance should be given to the fact that they are in
Quebec illegally? I am not convinced that, for the purposes of the Civil Code of Quebec
and the exercise of the rights flowing therefrom, immigration laws can automatically and
without further consideration preclude the establishment of a domicile in the province,
or negate the absolute presumptions of art. 78 C.C.Q.
[51] This is not to say that immigration laws have nothing to do with the determination
of a person’s residence or domicile or with the assessment of a person’s intention to remain
in one place or another. It is a factor to be considered. For the purposes of arts. 75ff.
C.C.Q., however, and the exercise of rights under the Civil Code of Quebec, it cannot be
the sole criterion and certainly not in itself a determining factor.
[The court cited two extracts from Deleury & Goubau, above at para 34 (at 339 and 352,
n 72).]
[54] Combining these two extracts and taking them one step further, I find that the
fact that a person has not obtained immigrant status in Canada or has an irregular status
under immigration laws does not necessarily mean that it is impossible to establish a
domicile in Quebec for the purposes of the Civil Code of Quebec and in the absence of a
legislative provision to the contrary. Specifically, this fact alone cannot prevent the applica-
tion of art. 78 C.C.Q.
[55] In short, determining domicile within the meaning of arts. 75ff. C.C.Q. does not
depend upon immigration laws, which do not take precedence.
• • •
[57] That being the case, I find that despite their irregular status in Canada, and
whether the issue of domicile is considered under art. 75 or 78 C.C.Q., the children are
domiciled in Quebec, where they firmly intend to stay (the volitional element is therefore
present and predominant in the context), where they have their one and only residence,
and where they live, with their meagre belongings and what is left of their family. It is
where they lead their lives, and for several years now.
[The court went on to consider the respondent’s argument that the domestic adoption
rules in art 545 should not be applied since this would permit the appellant to circumvent,
through the passage of time, art 3092 (under which, so long as children are minors, the
adoption regime in their domicile of origin continues to govern even if their domicile is
moved to Quebec) and arts 563-565 governing international adoptions. The court rejected
this argument, finding that the policy behind these provisions was not engaged and that,
in any event, the mechanisms in the international adoption regime were not suited to the
adoption of persons of full age. Applying the domestic adoption regime in art 545, the
court concluded that: (1) the condition set out under the first paragraph of art 545 had
not been met (the evidence did not establish that the appellant stood in loco parentis
toward her nephews while they were minor children); and (2) there was no reason to apply
the second paragraph of art 545, which allowed a court to bypass this condition where it
was in the interests of the children (the fact that Canada might offer advantages presum-
ably not available in Saint Vincent was not a sufficient interest in itself and, in any event,
it was the appellant who created the predicament that the children found themselves in
by not earlier pursuing mechanisms that might have legalized their immigration status).]
[104] … In the present case, as previously discussed, the evidence has not established
on a balance of probabilities the true nature or quality of the relationship between the
appellant and her nephews. Despite their interest in remaining in Canada, it is impossible
to conclude that their adoption by the appellant would be appropriate, as its sole objective,
if we are to accept the arguments of appellant’s counsel, appears to be to facilitate the
regularization of their immigration situation.
• • •
[106] For all of these reasons, I find that the appeal must be dismissed, but without
costs, in light of the nature of the case.
[107] It is, however, necessary to point out that the circumstances in which the two
children have been unwittingly placed would certainly authorize Canadian immigration
authorities to let them remain in Quebec on obvious humanitarian grounds and regularize
their situation.
II. Domicile 163
NOTES
1. Elements of domicile. Residence is defined in art 77 as the place where one ordinarily
(English version) or habitually (French version) resides. However, domicile is not synonymous
with habitual or ordinary residence. Rather, art 75 defines domicile as the place where a
person has his “principal establishment.” The concept of “principal establishment” incorpor
ates an additional element of intention. This is reflected in art 76, under which a change of
domicile is effected by actual residence in another place coupled with the intention of the
person to make it the seat of his or her principal establishment.
2. Relative importance of residence and intention. The fact that the Civil Code of Quebec
equates residence with ordinary or habitual residence suggests that the emphasis in ascer-
taining domicile is intended to be placed more on objective factual connections than sub-
jective intention: see Fournier c Giroux, [1996] RJQ 326 (SC). This is borne out by the decision
of the Quebec Court of Appeal in Adoption—152, above, in which the court observed that in
“the case of a person of full age, domicile … is indeed primarily determined on the basis of
residence” (at para 35).
3. Intention. The older cases, reflecting the English common law influence, required evi-
dence of an intention to remain permanently or indefinitely at a place in order to acquire a
domicile there: see e.g. Trottier v Rajotte, [1940] SCR 203. But the wording of the Civil Code of
Quebec does not mandate that interpretation, and contemporary jurists view the necessary
intention as closer to that needed to establish habitual or ordinary residence: see e.g. Brier-
ley & Macdonald at 701, and compare at 211. And see Adoption—152, above, in which the
court expressed doubt that Trottier v Rajotte would be decided the same way today (at
para 42).
4. Comparative and historical considerations. The Civil Code of Quebec inherited its con-
ception of domicile from French law, which in turn drew it from Roman law: see Ferrière,
vol II at 585-87. The Code of Emperor Justinian (circa 565 CE) says:
Home is identical with Domicil; and Domicil is agreed to be the place where a man has estab-
lished his household goods and the headquarters of his transactions and obligations: the place
he will not leave except for a special purpose; absence from which makes him seem to be
abroad, and return to which makes him cease to be any longer from home.
(Cod 10, 40, 7, translated by Poste at 298 in Gaius, Poste, Whittuck, Greenidge & de Zulueta.)
Some civilian jurisdictions come closer than Quebec to assimilating the concepts of
domicile and residence; for example, the Civil Code of Spain says, at art 40: “For the exercise
of rights and the performance of civil obligations, the domicile of natural persons is the place
of their habitual residence” (translated in Romañach). Others eschew the concept of domicile
and rely on permanent residence: see Civil Code of Japan, art 21: “The base and centre of
living of each person shall be his permanent residence” and art 22: “If the permanent resi-
dence is unknown, the place of abode shall be deemed to be the permanent residence”
(translated in Oda); see also the Civil Code of the Russian Federation, art 20.
Some Islamic jurisdictions also have a closely analogous conception of domicile. For
example, the Civil Code of Iran, art 1002, states:
The domicile of every person is the place where he resides … and is also the principal centre of
his affairs. If the place of residence of a person is different from the principal centre of his affairs,
the latter shall be considered his domicile. The domicile of legal persons shall be the centre of
their activities.
It further states, at art 1004: “Change of domicile will take place by actual residence in
another place provided that the principal centre of affairs is also transferred to the same
place” (translated in Taleghany).
Domicile and Habitual Residence Act

CCSM c D96
2. Determination of domicile and habitual residence. For all purposes of the law of
Manitoba, the domicile and habitual residence of every person shall be determined under
this Act to the exclusion of the laws of any other state or subdivision of a state.
3. Common law of domicile abolished. The common law rules respecting domicile …
are no longer law in Manitoba.
4. Requirement of domicile and habitual residence. Every person has a domicile and
an habitual residence.
5. Only one domicile and habitual residence. No person has more than one domicile
and one habitual residence at any time.
• • •
8(1) Basis of domicile and habitual residence. The domicile and habitual residence of
each person is in the state and a subdivision thereof in which that person’s principal home
is situated and in which that person intends to reside.
8(2) Presumption of intent to reside. For the purposes of subsection (1), unless a
contrary intent is shown, a person is presumed to intend to reside indefinitely in the state
and subdivision thereof in which that person’s principal home is situated.
• • •
12. Applicability of law dependent on domicile. Where the law applicable in any action
or issue depends upon the domicile or habitual residence of a person, and the domicile
or habitual residence of that person is determined under this Act to be in a state or sub-
division of a state other than Manitoba, the law applicable in that action or issue is the
law, excluding choice of law rules, of that state or that subdivision of a state.
13. Meaning of “domicile” and “habitual residence.” In any Act of the Legislature or
regulation or rule made thereunder “domicile” and “habitual residence” have a meaning
corresponding to the meaning as determined in accordance with this Act.
NOTES
1. Source. On the origins of the Manitoba Act, see Manitoba Law Reform Commission
(MLRC). The legislation is essentially an amended version of the draft “Uniform Bill to Reform
and Codify the Law of Domicile” adopted by the Uniform Law Conference (Proceedings (1961)
at 23-24, 139). That model was derived, in turn, from the First Report of the Private Inter-
national Law Committee (1954) in the United Kingdom.
2. Impact on common law of domicile. Although the Manitoba Act merges the concepts
of domicile and habitual residence, it is difficult to say how much this changes the common
II. Domicile 165
law of domicile. The elements of residence and intention are retained but restated in some-
what confusing terms—a person is said to be domiciled and habitually resident in the place
“in which that person’s principal home is situated and in which that person intends to
reside.” It is difficult to conceive of having a “principal home” in a place where one does not
also intend to reside. Some insight on the meaning of intention is perhaps to be gleaned
from the presumption in s 8(2) under which, in the absence of contrary evidence, “a person
is presumed to intend to reside indefinitely in the state and subdivision thereof in which that
person’s principal home is situated” (for an application of this statutory presumption, see
Fareed v Latif (1991), 71 Man R (2d) 276 (QB)). But if this terminology is meant to imply that an
intention to reside indefinitely is required, it is hard to see how any of this changes the com-
mon law position. The Manitoba reform has not met with a happy reception in the literature:
[A]ll the problems of determining intention, save to the extent that they are eased by the statu-
tory presumption, are introduced from domicile into habitual residence. This must be a retro-
grade step, undoing much of what has already been achieved by introducing the connecting
factor of habitual residence into the common law as an alternative to, or replacement of,
domicile as a connecting factor. [The Manitoba] example of abolition can, paradoxically, be
portrayed as the abolition of the concept of habitual residence rather than that of domicile.
North at 21.
B. Persistence of the Domicile of Origin and the Doctrine of Revival

CCSM c D96
3. Common law of domicile abolished. The common law rules respecting domicile,
including, without limiting the generality of the foregoing,
(a) the rule known as the revival of domicile of origin whereby the domicile of
origin of a person revives upon the abandonment of a domicile of choice;
• • •
NOTES
1. Persistence of domicile of origin in English law. A much-criticized feature of the English

concept of domicile is the great importance placed on the domicile of origin, the domicile
attributed to an individual at birth. This manifests itself in two rules. First, it is more difficult
to prove that a person intended to displace his or her domicile of origin with a domicile of
choice than to prove a change of one domicile of choice to another: see Agulian v Cyganik,
above. Second, if a domicile of choice is abandoned, and a new domicile of choice is not
simultaneously acquired, the domicile of origin revives to fill the gap. In contrast, a domicile
of origin persists, even after a person leaves the relevant country intending never to return,
until it is replaced by a domicile of choice: see Udny v Udny (1869), LR 1 Sc & Div 441, 458.
2. Reform. The doctrine of revival can produce absurd results, linking a person to the
laws of the country with which he or she has long since terminated all connection. Its aboli-
tion, in favour of a rule that a domicile of choice continues until a new one is acquired, is a
common feature of statutory reform in common law jurisdictions, including the Manitoba
Domicile and Habitual Residence Act, above; the New Zealand Domicile Act, 1976; and the Aus-
tralian Domicile Acts, 1982. In 1987, the Law Commission for England and Wales recommended
the abolition of the doctrine of revival: see Law Commission no 168, but this recommenda-
tion was dismissed in 1995: see North; cf Wade at 20. Also abolished (or recommended for
abolition) is any extra burden of proof associated with changing a domicile of origin.
3. Civil Code of Quebec. The Code provisions on domicile do not reflect the English dis-
tinction between a person’s domicile of origin and a later domicile of choice and the juris-
prudence confirms that the doctrine of revival is not part of the law of that province: see
Brierley & Macdonald (at 701; cf at 211), referring to Claus v Sonderegger, [1979] CA 60. Indeed,
the Code rules demonstrate the dispensability of the concept of domicile of origin, showing
that the necessary ground can be covered by a general concept of domicile that emphasizes
free will coupled with specific rules to cover minors, incapacity, and cases of uncertainty.
4. Position in common law provinces other than Manitoba. The courts in common law
Canada traditionally have approved both the doctrine of revival and the proposition that an
extra burden of proof is necessary to displace the domicile of origin. On the other hand,
there is early authority questioning the applicability of the English position to North Amer-
ican conditions: see Nelson v Nelson, [1925] 3 DLR 22 (Alta SC). As well, the presumption
against loss of the domicile of origin does not seem to have been applied with the same
rigour in this country as in England, particularly in the interprovincial context: see e.g. Re
Urquhart Estate (1990), 74 OR (2d) 42 at para 62 (H Ct J), aff’d (1991), 3 OR (3d) 699 (Div Ct). The
conditions that inspired the English rules—the assumption that those sent to serve in distant
parts of the empire would ultimately return to England—are not persuasive in the context
of Canada, a country of immigrants. Another difference is Canada’s federal context, where
mobility is a social and constitutional fact. Indeed, it is for precisely these reasons that the
courts in the United States early on rejected the doctrine of revival: see e.g. In re Jones’ Estate,
192 Iowa 78, 182 NW 227 (1921), and Restatement (Second) of Conflict of Laws, §19 (1971).
In Re Foote Estate, 2009 ABQB 654, the court rejected the proposition that it was more
difficult to prove displacement of the domicile of origin than to prove a change in a domicile
of choice. Satisfaction of the ordinary civil standard—the balance of probabilities—was all
that was required (paras 64-74, 544). The court also considered that the courts had a residual
authority to depart from the revival of the domicile of origin and to conclude instead that
the person had retained his or her last domicile of choice to avoid “an absurd result” as
where the revived domicile of origin “had absolutely no relevance to the person’s life, home,
and activities” (paras 97, 514-515, 544). The point was not directly relevant to the outcome on
the facts and was not addressed by the Court of Appeal in Foote v Foote Estate, above. How-
ever, the proposition was considered and rejected in Vanston v Scott, 2014 SKQB 64. The
court in that case was required to determine the domicile of the deceased for the purposes
of identifying the law applicable to his testamentary capacity and the validity and effect of
his will. The court concluded that he had abandoned his domicile of choice in Saskatchewan
when he moved to British Columbia in 2012, shortly before his death there, but had not
acquired a new domicile of choice in that province. Consequently, his domicile of origin in
Alberta, where he was born, revived with the result that Alberta law applied. In so holding,
the court declined counsel’s invitation to reject the application of the doctrine of revival on
the basis that it would produce an absurd result:
II. Domicile 167
[43] The law of domicile is clear. The evidence, though sparse, is clear—Dr. Scott was born
in Calgary. The result, on the law and the evidence is that Dr. Scott was domiciled in Alberta at
the time of his death. That, Ryan argues, makes little sense. After all: Dr. Scott had not lived in
Alberta for at least the 25 years preceding his death; none of the estate assets are in Alberta;
none of the interested parties lives in Alberta and neither of the parties wants the law of Alberta
to apply. There was no evidence that Dr. Scott had any connection to Alberta other than being
born there. Ryan’s counsel invited the court to depart from the well-established law in order to
avoid that which he termed to be an “absurd” result (a word used in Foote Estate [2011 ABCA 1]
at para 34). He did not, however (as requested in my October 8, 2013 fiat), articulate a test that
might result in either Saskatchewan or British Columba being designated as Dr. Scott’s domicile.
[44] I will concede that a decision that effectively results in the law of Alberta determining
how his estate will be divided might appear arbitrary or odd. But that is the law and there is
nothing that distinguishes the result here from the results in the raft of authorities that have
stated and restated and applied that law for more than 100 years. Three of those are from the
Supreme Court of Canada: Wadsworth v. McCord … [(1886), 12 SCR 466]; Trottier v. Rajotte [[1940]
SCR 203]; Osvath-Latkoczy v. Osvath-Latkoczy [[1959] SCR 751]. I see no great injustice here that
cries out for redress but, in any event, the doctrine of stare decisis prevents me from going it
alone with some new test that I might think is more appropriate. The doctrine of stare decisis
“requires that courts make decisions consistent with the prior decisions of higher courts” and
promotes “important values including consistency, certainty and predictability in the law”
(Saskatchewan v. Saskatchewan Federation of Labour, 2013 SKCA 43, 361 D.L.R. (4th) 132, at para.
29 and 30). Whether the principles that apply to the determination of domicile need overhaul-
ing (and I do not suggest that they do) is a decision that would have to be made by the Supreme
Court of Canada (S.F.L., supra, at para 60).
C. Domicile of Children

CQLR c C-1991
Art. 80. An unemancipated minor is domiciled with his tutor.

Where the father and mother exercise the tutorship but have no common domicile,
the minor is presumed to be domiciled with the parent with whom he usually resides
unless the court has fixed the domicile of the child elsewhere.
Family Law Act

RSO 1990, c F.3
67. The domicile of a person who is a minor is,

(a) if the minor habitually resides with both parents and the parents have a com-
mon domicile, that domicile;
(b) if the minor habitually resides with one parent only, that parent’s domicile;
(c) if the minor resides with another person who has lawful custody of him or her,
that person’s domicile; or
(d) if the minor’s domicile cannot be determined under clause (a), (b) or (c), the
jurisdiction with which the minor has the closest connection.

CCSM c D96
Definitions
1. In this Act
“child” means a person who
(a) has not reached the age of majority,
(b) has not been married, and
(c) is not a parent with legal custody of his or her child;
• • •
Domicile of child
9(1) The domicile of a child
(a) where the parents of the child have a common domicile, is the domicile of the
parents;
(b) where the parents of the child do not have a common domicile, is the domicile
of the parent with whom the child normally and usually resides; and
(c) where the domicile of the child cannot be determined under clause (a) or (b),
is the state and subdivision thereof where the child normally and usually resides.
Habitual residence of child

9(2) The habitual residence of the child is the state and subdivision thereof where the
child normally and usually resides.
NOTES
1. Common law. At common law, the domicile attributed to a child at birth depends on
the domicile of the relevant parent and changes with the domicile of that parent throughout
the period of minority. Traditionally, this turned on the distinctions between legitimate and
illegitimate issue and the relative parental status of husband and wife. If the parents were
married, the child took the father’s domicile at birth assuming the father still to be alive. If
the parents were unmarried or the child was born after her father’s death, the child took the
domicile of the mother.
2. Contemporary position. In contemporary Canadian family law, illegitimacy is no longer
a legally relevant status: see e.g. Children’s Law Reform Act, RSO 1990, c C.12, s 1(1): “[except
for the purposes of an adoption order] for all purposes of the law of Ontario a person is the
child of his or her natural parents and his or her status as their child is independent of
whether the child is born within or outside marriage.” The best interests of the child are
paramount and parental rights are presumptively equal. These developments have man-
dated changes in the rules for ascertaining a child’s domicile of dependence. As the statu-
tory provisions reproduced above show, the domicile of children now generally depends on
and changes with the domicile of the parent or parents with whom the child habitually
resides. Surprisingly, the traditional approach remains in place in England. Thus the domicile
of origin of a child is determined at birth by the domicile of the father if the child is
II. Domicile 169
legitimate, or by the domicile of the mother if illegitimate—that is, born to parents who are
not married or whose marriage is not recognized as valid under English law. In considering
the status of a child, the courts look to the law of the place where the father was domiciled
at the time of the child’s birth. If that law treats a child as legitimate, or has no concept of
illegitimacy, then English law will recognize that status for the purposes of English law: see
Hashmi v Hashmi, [1972] Fam 36. The position in Scotland has changed with the passage of
the Family Law (Scotland) Act 2006, which abolishes the status of illegitimacy.
3. Dependency or substantial connection? The various provincial statutes differ in the way
that they address (or fail to address) the exceptional situation where the domicile of a child
cannot be determined under the general rules—for example, where the child resides with
both parents and the parents do not have a common domicile. Of the possibilities repre-
sented above, which do you think offers the best solution? In this connection, consider the
approach recommended by the Scottish and English Law Reform Commissions. Their pro-
posals abandon the concept of dependency altogether and with it the need to state a series
of default rules for exceptional cases. Instead, a child is considered domiciled in the country
with which he or she is for the time being most closely connected. Rebuttable presumptions
are then provided to assist in determining the country of closest connection in the common
cases where the parents have a common domicile and the child has his or her home with
one or both of them and where the parents are domiciled in different places but the child
has his or her home with only one of them: see North at 16ff. This proposal was implemented
in Scotland in part in s 22 of the Family Law (Scotland) Act 2006:
22 Domicile of persons under 16
(1) Subsection (2) applies where—
(a) the parents of a child are domiciled in the same country as each other; and
(b) the child has a home with a parent or a home (or homes) with both of them.
(2) The child shall be domiciled in the same country as the child’s parents.
(3) Where subsection (2) does not apply, the child shall be domiciled in the country with
which the child has for the time being the closest connection.
(4) In this section, “child” means a person under 16 years of age.
4. Emancipation. Under the traditional approach, a child acquires the capacity to estab-
lish an independent domicile on reaching the age of majority unless he or she marries under
that age: see Walker at para 4.14. From that starting point, the United Kingdom has generally
lowered to 16 the age at which the acquisition of an independent domicile of choice becomes
possible: see North at 13; and see s 22 of the Family Law (Scotland) Act 2006, above.
D. Domicile of Incapacitated Adults

CQLR c C-1991
Art. 81. A person of full age under tutorship is domiciled with his tutor; a person
under curatorship is domiciled with his curator.

CCSM c D96
10(1) Mentally incompetent from birth. A person who is born mentally incompetent
has, as long as he is either mentally incompetent or a child, a domicile and habitual resi-
dence determined in accordance with section 9. [domicile of child]
10(2) Person becoming mentally incompetent. A person who, at any time after birth,
becomes mentally incompetent retains, as long as he is mentally incompetent, the domicile
and habitual residence he had, as determined under this Act, immediately prior to his
becoming mentally incompetent.
10(3) No change in domicile, etc. The domicile and habitual residence of a mentally
incompetent person domiciled and habitually resident in Manitoba shall not be changed
except with the approval of the court.
10(4) Application for approval of change. An application to the court for an order
approving the change of the domicile of a mentally incompetent person may be made by
(a) the person’s committee; or
(b) the person’s substitute decision maker for personal care appointed under The
Vulnerable Persons Living with a Mental Disability Act, who has the power under clause
57(2)(a) of that Act to decide where the person is to live.
10(5) Notice of application. Where the committee or substitute decision maker of a
mentally incompetent person applies to the court under subsection (4), the mentally
incompetent person shall, at least 10 days before the date fixed by the court for the hearing
of the application, be served with a copy of the application.
10(6) Consideration of court. In determining whether to approve the change of
domicile and habitual residence of a mentally incompetent person on an application made
under subsection (4), the court shall consider, in addition to all other relevant circum-
stances, the effect of the change upon any child of the mentally incompetent person.
10(7) Change in accordance with extra-provincial law. Where the domicile and habitual
residence of a mentally incompetent person is a state or a subdivision of a state outside
Manitoba, the mentally incompetent person may acquire a domicile and habitual residence
in Manitoba only in accordance with the law of that state or subdivision respecting a
change of domicile and habitual residence of persons who suffer from mental disability.
10(8) Mentally disabled persons in Manitoba. Where a person who, under the law of
a state or subdivision of a state other than Manitoba, is by reason of mental disability or
condition under committeeship or similar type of supervision of the estate or the person,
and the domicile and habitual residence of the person is in Manitoba, subsections (2),
(3), (4) and (5) apply to the person and to the domicile and habitual residence of the
person as though the person were a mentally incompetent person.
NOTES
1. Although there is a dearth of modern authority on the point, it appears to be generally

accepted that a person who becomes mentally incapacitated in adult life is no longer
capable of forming the requisite intent to acquire a domicile of choice and retains whatever
domicile the person had prior to becoming incapable. Certainly, this was the assumption of
the court in Cariello v Perrella, 2013 ONSC 7605 at para 62. The case involved jurisdiction to
II. Domicile 171
deal with the person and property of a mentally incapacitated priest resident in a long-term
care facility in Ontario and under the de facto care of Ontario residents and the local archdio-
cese. After finding that he had abandoned his domicile of choice in Ontario while still
capable in favour of his domicile of origin in Italy, the court concluded that the courts in Italy,
which had already appointed an interim guardian, had exclusive jurisdiction to determine
questions of guardianship relating to his person and property.
2. A possible distinction exists in the case of those who are mentally incompetent at birth
or become so before reaching the age of majority. There is some authority for the view that
in that event their domicile of dependency continues to depend on and change with that of
the parent even after the age of majority is reached: see Walker at para 4.15. The Manitoba
Domicile and Habitual Residence Act, above, reflects a similar distinction, but limited to the
case in which the person is mentally incapacitated at birth. How does the approach in art 81
of the Civil Code of Quebec, above, differ? Consider also the recommendation of the English
and Scottish Law Commissions under which an adult who lacks mental capacity to acquire a
domicile would be considered domiciled in the country with which he or she is for the time
being most closely connected: see Law Commission. The approach, in other words, is the
same as that recommended by the Commission for ascertaining the domicile of children—
the concept of dependency is abolished in favour of a closest-connection rule.
3. Subject to the above qualification, s 10(2) of the Manitoba Domicile and Habitual Resi-
dence Act provides that a person who becomes mentally incapacitated after birth retains the
domicile and habitual residence he or she had, as determined under the Act, immediately
prior to becoming mentally incompetent. The extension of the rule to habitual residence
implies that the acquisition of a new habitual residence by an incapacitated person requires
evidence of the same level of intent as domicile. This is in sharp contrast to the approach
taken in the 2000 Hague Convention on the International Protection of Adults. Article 1(1) of the
Convention provides that the authorities of the contracting state of the habitual residence
of the adult have the primary jurisdiction under the Convention to take measures directed
to the protection of the adult’s person or property. Article 1(2) clearly contemplates that an
adult within the scope of the Convention may move his or her habitual residence from one
contracting state to another.
In An English Local Authority v SW, [2014] EWCOP 43 (Court of Protection), Justice Moylan
was asked to determine whether an adult who lacked capacity to decide where to live as a
result of a brain injury had moved her habitual residence from Scotland to England for the
purpose of determining whether the English or Scottish courts had jurisdiction to deal with
applications under the English Mental Capacity Act 2005. Following the brain injury that
caused her incapacity, she had moved to England, pursuant to a Scottish compulsory com-
munity treatment order, where she was almost immediately placed in a rehabilitation facility
pursuant to an English order. By the time of the hearing, she had been in England for nearly
five years, the last three and a half in her own flat in a support care facility. In support of their
argument, the Scottish authorities relied on case law relating to the habitual residence of
children where the “degree of integration” in the social or family environment of the new
country is relevant to the determination. While accepting its relevance, Justice Moylan cau-
tioned against treating the “degree of integration” as the “sole, or even necessarily the pri-
mary, factor” for fear that this might transform the essential factual issue of habitual
residence into “a legal construct” (para 72). Rather, “the broad assessment which is required
properly to determine whether the quality of residence is such that it has become habitual
in that it has the necessary degree of stability in order to distinguish it from mere presence
or temporary or intermittent residence … means a sufficient, or some, degree of integra-
tion” (para 71).
E. Domicile and Gender

CQLR c C-1991
Art. 82. Married or civil union spouses may have separate domiciles without prejudice
to the rules relating to their living together.

CCSM c D96
3. Common law of domicile abolished. The common law rules respecting domicile,
including, without limiting the generality of the foregoing,
• • •
(b) the rule of law whereby a married woman has the domicile of her husband;
• • •
7. Capacity to acquire domicile and habitual residence. Subject to sections 9 [domicile

and habitual residence of child] and 10 [domicile and habitual residence of mentally
incompetent persons], every person is capable of acquiring a domicile and an habitual
residence not dependent on the domicile or habitual residence of any other person.
NOTES
1. Domicile of dependency of married women. Surprisingly, until recent times, Canadian

law subscribed to the chauvinistic doctrine that the domicile of a wife was that of her hus-
band and changed with his as long as the marriage subsisted—that is, until death or divorce
did them part. Even formal judicial separation did not terminate her domicile of depend
ence: see AG Alta v Cook, [1926] AC 444 (PC) (Alta). Coupled with the old rule vesting exclusive
jurisdiction in divorce in the courts of the domicile, the doctrine could create situations of
great injustice, forcing a separated wife to travel to her husband’s new domicile in order to
secure a valid divorce. If this proved not to be feasible, the results could be outlandish. Thus,
in Lord Advocate v Jaffrey, [1921] AC 146 (HL), the court’s ruling that the domicile of a wife,
separated for over 22 years, remained that of her husband led to the absurdity that, on her
death, succession to her movables was governed not by the law of Scotland where she had
lived all her life but by the law of Queensland in Australia where her husband was living in a
bigamous marriage with another woman.
2. Partial statutory reform. Obviously, the law as developed by the courts was unsatisfac-
tory: see e.g. Rafferty. In 1930, Parliament (following earlier piecemeal reforms by the prov-
incial legislatures in New Brunswick in 1906 and Alberta in 1927) intervened to allow a
II. Domicile 173
deserted wife who had been living separate from her husband for two years to apply for a
divorce in the jurisdiction where her husband had been domiciled immediately prior to the
desertion: see Divorce Jurisdiction Act, SC 1930, c 15. But this did not emancipate married
women as such and still left room for hardship. If the wife herself had moved in the interven-
ing two years—for example, returned to her parents’ home—she had to travel to the old
domicile to secure a divorce; even if she had not moved, her husband may not have acquired
a domicile of choice in the matrimonial residence, in which event she had to travel to his
domicile of origin or his new domicile of choice. More complete relief came in 1968 when the
Divorce Act, SC 1967-68, c 24, in effect, if not in so many words, gave married women the
legal capacity to acquire a separate domicile for the purposes of divorce jurisdiction. Since
1985, the problem no longer presents itself in relation to divorce, domicile having been
abandoned altogether and replaced by a one-year period of ordinary residence as the con-
necting factor for divorce jurisdiction: see Divorce Act, RSC 1985, c 3 (2nd Supp), s 3(1).
3. Full reform. In other areas, reform was slower in coming. In the United Kingdom, mar-
ried women have had full capacity to acquire a domicile of choice for all legal purposes since
the enactment in 1974 of s 1 of the Domicile and Matrimonial Proceedings Act, 1973. The same
is true in New Zealand under the Domicile Act, 1976 and in Australia under the Domicile Acts,
1982. In Australia, even prior to 1982, a wife’s dependent domicile had been abolished by the
Family Law Act, 1975 (Cth) and the Marriage Act, 1961 (Cth) for the purposes of those Acts: see
Nygh (1995) at 207.
4. Contemporary Canadian position. As the statutory provisions set out above indicate,
some Canadian provinces have abolished by statute the concept of the domicile of depend
ency of married women. Even in the absence of statute, however, it is inconceivable that the
courts today would refuse to recognize the capacity of married women to establish a separ-
ate domicile for all legal purposes. Indeed, any other conclusion would be contrary to the
Canadian Charter of Rights and Freedoms: see Acorn. In Ireland, the Supreme Court has held
that the old concept of the dependent domicile of married women is inconsistent with the
constitution of Ireland: see W v W (1993), 13 ILRM 294.
F. Relevance of Context
Walter Wheeler Cook, The Logical and Legal Bases of the Conflict of Laws
(Cambridge, Mass: Harvard University Press, 1942) at 195-97
Presumably we began our use of “domicil” with the simple case of a man who already had
one and only one home; this was his actual headquarters. We decided that in our legal
system it would be desirable to make this fact, or better these facts, of decisive importance
for many different legal purposes. … The symbol “domicil” was a word originally taken
from every day speech, in which it was often a synonym for “home.” In the simple case
put above, clearly the person in question had only one “home,” and so only one “domicil.”
Then we began to develop the word “domicil” as a technical legal term, a word of art,
and—there is no need to trace the development in detail—we ended by ascribing to every
person a “domicil,” whether or not he had or ever had had a “home,” and even when he
had two or more “homes.” …
Consequently, as new combinations of facts have presented themselves, more and more
unlike the simple cases from which the development started (i.e., clearly a “home” and
only one “home”), the meaning given to the symbol “domicil” has varied with the nature
of the problem presented: taxation, divorce, intestate succession, etc., etc. In short, what
was being decided in any particular case presented for decision was: do the facts of this
case show a connection of this person with the state in question of such a character as to
make it reasonable to do the particular thing asked? …
Starting with this point of view, we should expect that if we were to place in one group
all the cases of, say, “domicil” as giving jurisdiction to divorce, and in another those
involving some other purpose, say taxation or intestate succession, a comparison of these
groups would show that as we reach the doubtful cases, the verbal symbol “domicil” has
not been given precisely the same meaning: the judges have been influenced by the par-
ticular problem before them, and in fact, though more often not explicitly, were deciding
that the person in question was or was not domiciled in a particular place for the purpose
then under consideration.
This, it seems to me, is quite as it should be; any other result would mean that our
judges were failing to take account of the social and economic problems presented for
adjudication.
Restatement (Second) of Conflict of Laws

(1988 revision), §11, Domicil
Comment o. Domicil under the law of a single state. The question may arise whether,
even under the law of a single state, a person may have one domicil for one purpose (as
jurisdiction to give him a divorce) and another domicile for a second purpose (as juris-
diction to impose an inheritance tax upon all his intangibles). As a general proposition,
the answer to this question is in the negative. The core of the domicil concept remains
constant in all situations. With rare exceptions, the courts assume that the rules of domicil
are the same for all purposes, and it is customary for them to cite indiscriminately in their
opinions cases dealing with domicil for purposes other than the one immediately involved.
What has been said above, however, stands in need of elaboration. Domicil serves a
large number of purposes, and undoubtedly somewhat different reasons and motivations
underlie its use for certain of these purposes. It may therefore be expected that the courts
will on occasion be either more or less inclined to find a person domiciled in a state for
one purpose (as to give him a divorce) than for another purpose (as to subject him to
substituted service or to certain forms of taxation). The extent to which actual court
decisions are affected by this consideration is obscured by two factors: (1) even within a
single state the courts do not always use identical language in stating the rules of domicil,
particularly those relating to the required attitude of mind toward the place in question
and (2) the rules, however phrased, are extremely general and flexible in operation.
Domicil for diversity of citizenship purposes is governed by federal law and may differ
from domicil in the local law of a state.
II. Domicile 175
To reiterate, the core of domicil is everywhere the same. But in close cases, decision
of a question of domicil may sometimes depend upon the purpose for which the domicil
concept is used in the particular case.
REPORTER’S NOTE on Comment o: So far as is known, there is no authority directed

squarely to the question whether the meaning of domicil is always the same for all pur-
poses. The question could only be decided in the unlikely situation where the same court
was asked to determine the location of a person’s domicil at a given time for two or more
purposes. It has been held that domicil for diversity of citizenship purposes is governed
by federal law and may differ from domicil in the local law of a state. See, e.g., Stifel v.
Hopkins, 477 F.2d 1116, 1124 (6th Cir.1973); Wright, Federal Courts 146-147 (4th ed. 1983).
It has been said that “while there may be only one domicile for any particular purpose
in the law it does not necessarily follow that the same concept of domicile will inevitably
be the same in different areas of the law.” Gladwin v. Power, 21 AD.2d 665, 249 NYS.2d
980 (1st Dep’t 1964). In that case, it was held that a person could have a domicil within
the meaning of the New York Election Law in a place different from that in which she
lived with her family. Other decisions which suggest by way of dictum that the meaning
of domicil may vary somewhat from purpose to purpose are: Woolridge v. McKenna, 8
Fed. 650, 683-684 (D.Tenn.1881); McDonald v. Hartford Trust Co., 104 Conn. 169, 132
Atl. 902 (1926); First Nat. Bank v. Balcom, 35 Conn. 351 (1868); Smith v. Croom, 7 Fla.
81, 150 (1857) (“The term domicile has a variety of significations dependent upon its
various applications.”); In re Estate of Jones, 192 Iowa 78, 81, 182 NW 227, 229 (1921)
(“Definitions given in regard to the method of ascertaining the domicile for one purpose
are not always applicable in ascertaining the domicile for another purpose.”); Abington v.
Inhabitants of North Bridgewater, 23 Pick. (40 Mass.) 170, 177 (1839) (“… a man can have
only one domicil, for one purpose, at one and the same time.”); Dupuy v. Wurtz, 53 NY
556 (1873); In re Lyon’s Estate, 117 Misc. 189, 191 NYS 260 (Surr.Ct.1921).
NOTES
1. Anglo-Canadian position. As a general rule, the English and Canadian courts have
approached the interpretation of domicile as a unitary concept, without paying overt regard
to the purposes and policies underlying its use in the particular case. Nonetheless, the deter-
mination of domicile is so fact-specific as to leave room for context to influence the determin-
ation whether consciously or unconsciously.
The need or temptation to adopt a context-specific interpretation varies with the amount
of baggage that the concept of domicile is asked to carry. Canadian law tends to employ
some variant of residence rather than domicile as the relevant connecting factor for issues
relating to the burdens and benefits of one’s relationship to the state, such as eligibility for
citizenship, provincial and federal tax liability, entitlement to publicly funded benefits, and
voting rights. Residence is also used increasingly as the personal connecting factor for many
family law issues. Whether the replacement of domicile with such concepts as ordinary or
habitual residence resolves the interpretive challenges or simply moves them to a different
plane is the subject matter of the next section of this chapter on residence.
III. RESIDENCE
A. Introduction
Residence is employed as a connecting factor in Canadian law in a wide diversity of contexts,
including: (1) divorce jurisdiction and recognition of foreign divorces; (2) jurisdiction in pro-
bate, administration, nullity, adoption, guardianship, mental competency, support, custody,
and access proceedings; (3) recognition of foreign adoptions and the status of foreign per-
sonal representatives; (4) effect of marriage on the proprietary rights of spouses; (5) formal
validity of wills; (6) entitlement to vote; (7) eligibility to hold public office; (8) tax liability;
(9) entitlement to no-fault automobile accident benefits regardless of the place of the acci-
dent; (10) access to educational, health, and other publicly funded benefits; and (11) entitle-
ment to citizenship. The residence of the defendant within the jurisdiction at the time
proceedings are commenced is also recognized as a general basis for in personam civil
jurisdiction: see generally Chapter 6.
Sometimes residence is the only connecting factor employed, as in the case of divorce
jurisdiction or entitlement to vote. In other cases, it is used as an alternative to some other
personal connection. For instance, jurisdiction to make and enforce custody and access
orders is typically based on the habitual residence of the child in the forum province. How-
ever, a court may exercise jurisdiction over a child who is physically present, though not
habitually resident, if the child has a real and substantial connection with the province and
certain other criteria are satisfied—notably, that there is no potential for conflict with a cus-
tody or access order issued by a tribunal in the jurisdiction of habitual residence and the
exercise of jurisdiction would be in the child’s best interests: see e.g. ss 22(1)(b)(v) and
41(2)(b)(iv) of the Children’s Law Reform Act, RSO 1990, c C.12.
Relatedly, residence may be the primary connecting factor for choice of law or it may be
supplementary or exceptional to a more general choice of law rule. Thus, under art 3126 of
the Civil Code of Quebec, choice of law in tort or delict is governed, as a general rule, by the
lex loci delicti. However, “where the person who committed the injurious act and the victim
have their domiciles or residences in the same country, the law of that country applies.” No
similar exception exists at common law in Canada: see Tolofson v Jensen, [1994] 3 SCR 1022,
reproduced in Chapter 12.
B. Constitutional Considerations
In the Canadian federal context, provincial statutory restrictions predicated on residency are
subject to constitutional scrutiny on the basis of the equal protection or mobility provisions
of the Charter or on general extraterritorial grounds. On the interface between residence
and citizenship and the Charter, see Black v Law Society of Alberta, [1989] 1 SCR 591. On the
territorial limits on the reach of provincial laws based on residence (or domicile) in the prov-
ince, see Tolofson v Jensen, [1994] 3 SCR 1022.
In Godbout v Longueuil (City), [1997] 3 SCR 844 at 894-95, La Forest J, writing for himself
and L’Heureux-Dubé and McLachlin JJ, found that the ability to freely choose one’s resi-
dence, in spite of the requirements of a public employer, merited constitutional protection:
To my mind, the ability to determine the environment in which to live one’s private life and,
thereby, to make choices in respect of other highly individual matters (such as family life,
III. Residence 177
education of children or care of loved ones) is inextricably bound up in the notion of personal
autonomy I have been discussing. To put the point plainly, choosing where to live will be influ-
enced in each individual case by the particular social and economic circumstances of the person
making the choice and, even more significantly, by his or her aspirations, concerns, values and
priorities.
La Forest J found support in art 12(1) of the International Covenant on Civil and Political
Rights (Can TS 1976 No 47): “Everyone lawfully within the territory of a State shall, within that
territory, have the right to liberty of movement and freedom to choose his residence.”
C. Physical Presence and Residence

Critics of the common law concept of domicile cite the inordinate influence of the “subjective”
element of intention relative to the “objective” fact of residence in a particular place. These
criticisms assume that the choice is always between a place where a person is “physically”
resident and some other place to which he or she has ties. However, increasing personal
mobility makes it more common to encounter situations where a person claims residence in
a state without necessarily having a sustained physical presence there. These cases present
evidentiary challenges not dissimilar to those involved in determining a person’s intention
for the purposes of domicile.
Where a statute establishes a minimum qualifying period of residency, one solution to
the evidentiary challenges is to use a “bright-line” rule requiring a minimum period of phys-
ical presence during the relevant period. This solution was ultimately adopted in relation to
the time requirements imposed by s 5 of the Citizenship Act, RSC 1985, c C-29 for citizenship
applications. Prior to these recent amendments, s 5 required applicants to have, “within the
four years immediately preceding the date of his or her application, accumulated at least
three years of residence in Canada.” The meaning of residence in this context gave rise to
conflicting lines of jurisprudence in the Federal Court of Canada.
Under one view, reflected in Associate Chief Justice Thurlow’s decision in Re Papadogior-
gakis, [1978] 2 FC 208, an applicant could leave the country for extended periods and still be
regarded as a resident of Canada, so long as there was evidence that the person had “central-
ized” his or her mode of living in Canada through significant social and other community
connections. In Re Koo, [1993] 1 FCR 286, 59 FTR 27, Justice Reed refined the “centralized mode
of living” test by formulating six non-exhaustive questions for determining whether it was
satisfied. A more rigid quantitative interpretation, reflected in Justice Muldoon’s decisions in
Re Pourghasemi (1993), 62 FTR 122 and Re Harry (1998), 144 FTR 141, required evidence of the
applicant’s physical presence in Canada for three of the four years prior to the application.
The qualitative “centralized existence” test, as refined in Re Koo, became the dominant
standard used by citizenship judges to determine whether an applicant has satisfied the
residence requirement when that person has not met the physical presence test. Nonethe-
less, in Lam v Canada (Minister of Citizenship & Immigration) (1999), 164 FTR 177, Justice Lutfy
held that it was open to a citizenship judge to adopt either approach, so long as the judge
properly applied it to the facts of the case: see also Hao v Canada (Citizenship and Immigra-
tion), 2011 FC 46 and Fazail v Canada (Citizenship and Immigration), 2016 FC 111.
After several abandoned attempts, the Citizenship Act was amended in 2014, with effect
from June 11, 2015, to address the issue: see SC 2014, c 22. The amendments extended the
waiting period for applications from four to six years and adopted a double-barrelled phys-
ical presence test for determining eligibility, requiring applicants to have been physically
present in Canada for at least four years during the six years immediately before their appli-
cation, and for at least six months during each of four years within the six years immediately
before their application. The amendments made it more difficult to qualify for citizenship in
several additional respects, including no longer counting time spent in Canada prior to
acquiring permanent resident status—for example, as a refugee, student, or worker—
toward the time period for physical presence and requiring applicants to have the intent to
continue to reside in Canada if granted citizenship. In February 2016, in the wake of the 2015
federal election, the government introduced a bill to repeal the intention requirement and
to again enable time spent in Canada prior to becoming a permanent resident to count
toward the required number of days a person must have been physically present in Canada.
The bill also repeals the double-barrelled physical presence requirement and reduces the
required periods of physical presence and residence to three years during the five years
preceding the application: see Bill C-6, 1st Sess, 42nd Parl, 2016.
The sustained physical presence requirements set out in the Citizenship Act to qualify for
Canadian residence stand in contrast to the approach taken to the relevance of physical
absence from Canada in determining whether a person remains a Canadian resident for the
purposes of federal income taxation. Consider especially para 1.16 in the following excerpts
from the guidance provided by the Canada Revenue Agency (CRA) in Income Tax Folio
S5-F1-C1, Determining an Individual’s Residence Status (26 November 2015):
Meaning of Resident
1.5 The term resident is not defined in the Act, however, its meaning has been considered
by the Courts. The leading decision on the meaning of resident is Thomson v Minister of National
Revenue, [1946] SCR 209, 2 DTC 812. In this decision, Rand J. of Supreme Court of Canada held
residence to be “a matter of the degree to which a person in mind and fact settles into or main-
tains or centralizes his ordinary mode of living with its accessories in social relations, interests
and conveniences at or in the place in question.”
Meaning of Ordinarily Resident

1.6 In determining the residence status of an individual for purposes of the Act, it is also
necessary to consider subsection 250(3), which provides that, in the Act, a reference to a person
resident in Canada includes a person who is ordinarily resident in Canada. In Thomson, Estey J
held that, “one is ‘ordinarily resident’ in the place where in the settled routine of his life he regu-
larly, normally or customarily lives.”
1.7 In the same decision, Rand J stated that the expression ordinarily resident means, “resi-
dence in the course of the customary mode of life of the person concerned, and it is contrasted
with special or occasional or casual residence. The general mode of life is, therefore, relevant to
a question of its application.” Justice Rand also went on to say that, “ordinary residence can best
be appreciated by considering its antithesis, occasional or casual or deviatory residence. The
latter would seem clearly to be not only temporary in time and exceptional in circumstances,
but also accompanied by a sense of transitoriness and of return.” The meaning given to the
expressions resident and ordinarily resident as stated by the Supreme Court of Canada in Thom-
son, have generally been accepted by the Courts.
1.8 To determine residence status, all of the relevant facts in each case must be considered,
including residential ties with Canada and length of time, object, intention and continuity with
respect to stays in Canada and abroad.
III. Residence 179
1.9 An individual who is ordinarily resident in Canada as described in ¶1.6-1.7 is considered

to be factually resident in Canada. …
• • •
Application of Term Ordinarily Resident

1.16 Where an individual has not severed all of his or her residential ties with Canada, but is
physically absent from Canada for a considerable period of time (that is, for a period of time
extending over several months or years), the Courts have generally focused on the term ordin-
arily resident in determining the individual’s residence status while abroad. The strong trend in
decisions of the Courts on this issue is to regard temporary absence from Canada, even on an
extended basis, as insufficient to avoid Canadian residence for tax purposes. Accordingly, where
an individual maintains residential ties with Canada while abroad, the following factors will be
taken into account in evaluating the significance of those ties:
• evidence of intention to permanently sever residential ties with Canada;

• regularity and length of visits to Canada; and
• residential ties outside Canada.
• • •
[Conversely, a person who has a significant physical presence in Canada may be deemed to
be a Canadian resident for tax purposes despite not having established sufficient ties to
qualify as ordinarily resident:]
Sojourners as Deemed Residents
1.32 An individual who has not established sufficient residential ties with Canada to be
considered factually resident in Canada, but who sojourns (that is, is temporarily present) in
Canada for a total of 183 days or more in any calendar year, is deemed to be resident in Canada
for the entire year, under paragraph 250(1)(a). As a result, an individual who sojourns in Canada
for a total of 183 days (or more) is taxed differently under the Act than an individual who is factu-
ally resident in Canada throughout the same period of time and has subsequently become a
non-resident. In particular, an individual who is factually resident in Canada for part of a year is
only taxed on his or her worldwide income for that part of the year, in accordance with the rules
under section 114. An individual who is deemed to be resident in Canada pursuant to paragraph
250(1)(a) is liable for tax on his or her worldwide income throughout the year.
Where a person is determined to be a dual resident of Canada and another state, most
Canadian tax treaties provide tie-breaker rules to determine residency. These rules usually
rely first on a “permanent home” test, and, if the individual is found to have permanent
homes in both states, a “centre of vital interests” test: see S5-F1-C1, above, paras 1.37-1.51.
For more detail on the concepts of resident and ordinarily resident in relation to Canada’s
federal income taxation, see Hogg, Magee & Li.
D. Ordinary Residence and Habitual Residence

The term “ordinary residence” is the traditional alternative to domicile that has been
employed by legislators in the common law provinces, not just in relation to income taxation
law but in a wide diversity of other public and private law contexts. As in the citizenship
cases discussed in the previous section, the term has given rise to interpretative challenges
in cases where a person with significant ties to Canada is physically absent from the country
for a prolonged period. As the following case reflects, the issue has often arisen in the con-
text of the “ordinary residence” requirements for divorce jurisdiction.
Nafie v Badawy
2015 ABCA 36
[This consolidated appeal arose from procedurally complex and intensely conflictual
family law proceedings. The excerpts below set out only the parts of the majority and
dissenting reasons of the court in relation to whether the jurisdictional requirements of
the Divorce Act were met. Section 3(1) requires the applicant or respondent to have been
ordinarily resident in the province for at least one year immediately preceding the com-
mencement of the proceeding. The facts relevant to that issue may be summarized as
follows. The parties had married at what the chambers judge referred to as a “destination
wedding” in Egypt in 2000 and immediately returned to their home in Calgary. On
October 28, 2011, Badawy moved to Saudi Arabia to teach at a university pursuant to a
one-year renewable contract. Nafie and their three children joined him in early November
2011. Once in Saudi Arabia, the parties leased a home and two vehicles, enrolled their
children in an American-run school, and opened a bank account. They also maintained
significant ties to Calgary. They retained ownership of their Calgary residence (leasing it
for a two-year period) and one of their three vehicles, continued to use their Canadian
credit and bank accounts, kept their Canadian cellular telephone services and health
insurance, paid Canadian income tax, and continued to receive mail at their Calgary
address. On June 26, 2012, the family returned to Calgary, staying in Nafie’s parents’ home.
Badawy deposed this was a two-week vacation and adduced as evidence return airline
tickets Nafie had purchased, and alleged that she was interviewing for a job in Saudi
Arabia while in Calgary. Nafie deposed that the vacation was a ruse to escape Saudi Arabia
and her increasingly abusive husband. In any event, Nafie remained in Calgary and filed
for divorce on July 24, 2012, one month after her return. The chambers judge concluded
that she was ordinarily resident in Alberta during the year preceding her application so
as to satisfy the jurisdictional requirement, despite her physical absence from the province
for eight months of that year. That decision was appealed.]
THE MAJORITY:
[34] In Quigley v Willmore, 2008 NSCA 33 at para 9, 264 NSR (2d) 293 [Quigley] the
Court held:
When considering whether a petitioner has met the residence requirements of the Divorce
Act, a judge of first instance is addressing a question of mixed law and fact. Questions of law
are questions about what the correct legal test is; questions of fact are questions about what
actually took place between the parties; and questions of mixed law and fact are questions
about whether the facts satisfy the legal tests (Canada (Director of Investigation & Research)
v. Southam Inc., [1997] 1 S.C.R. 748 (S.C.C.), at para 35).
The Court also stated that trial judges are “required to first make the necessary findings
of fact regarding where [the applicant for divorce] resided during the relevant period of
time and then apply those facts to the legal standard of ‘ordinary residence’ ” in the Divorce
Act: Quigley at para 9.
[35] The proper legal test is an extricable component of the mixed law and fact
question associated with determining “ordinarily resident.” An error in determining or
III. Residence 181
applying the correct legal test is a matter of principle, and appellate intervention in a
family law matter is warranted if the order granted reflects an error in principle.
• • •
[37] [The chambers judge] found that Nafie was ordinarily resident in Alberta for at
least one year prior to filing for divorce. He held at paragraphs 21 and 22:
While there is some danger in deciding an issue based upon competing affidavits, here the
issue is whether the Plaintiff was ordinarily resident in Alberta for the year immediately
preceding the filing of the Statement of Claim. Her intention is very relevant. She has deposed
that her intention was to return to Calgary where she resided. The Defendant’s intention is
not, strictly speaking, relevant to the inquiry. He has not cross examined the Plaintiff as to
her intention.
Having reviewed the evidence placed before me, I accept the evidence of the Plaintiff that
it was at least her intention that their move to Saudi Arabia would be temporary only and
that she always intended to return to Canada. While it appears that there was no set end date
for such return, I do not consider that her intention was to remain “indefinitely” in Saudi
Arabia. Her husband’s employment there was for a fixed term. The couple had kept, and not
sold, the matrimonial home in Calgary. I am satisfied that it was the intention of the Plaintiff
that the parties would continue to ordinarily reside in Calgary.
• • •
[40] In conclusion, he held that Alberta has jurisdiction in respect of all matters in
the Statement of Claim for Divorce and Division of Matrimonial Property … .
• • •
[56] … [E]rrors in principle necessitate appellate intervention.

• • •
[57] In our view, over-emphasis on Nafie’s intention by the chambers judge was an
error in principle. So, too, was his reliance on affidavits that conflicted on almost all
material points. …
[58] One must be cautious when looking at the role of “intention” especially when
expressed after the fact. Evans JA concluded that “while husband and wife expressed
opposing views as to their intention with respect to the establishment of a permanent
residence … , [he did] not believe that that intention alone [could] determine the issue
of ordinary residence”: MacPherson v MacPherson (1976), 70 DLR (3d) 564 at 570, 13 OR
(2d) 233, (CA) [MacPherson]. We agree.
[59] Intention was also discussed in Nishi v Rascal Trucking Ltd, 2013 SCC 33 at para
46, [2013] 2 SCR 438: “[c]onsistent with the caution of this Court in Pecore [a family law
case], … after-the-fact evidence should be viewed with skepticism, because it often
demonstrates a change in intention, not the intention at the time … .”
• • •
[61] These principles may be applied to the matter of Nafie’s intention, expressed long
after the fact. She intimated in her affidavits that she intended to return to Calgary in
March 2012 but was prevented from doing so by Badawy and Saudi Arabian authorities.
In any event, she stated she intended to stay in Saudi Arabia only briefly and had planned
all along to return in June 2012.
[62] However, the objective facts are that Nafie agreed to lease the parties’ matrimonial
home for a two-year period and willingly accompanied Badawy to Saudi Arabia for what
was to be a one-year renewable teaching contract. This indicates that when she left Calgary
for Saudi Arabia in November 2011 it was for an extended period of time.
[63] Nafie’s after-the-fact intentions as expressed in her affidavits are quite different
and should be viewed with “skepticism.” They reflect her intentions with hindsight of how
the events in Saudi Arabia unfolded.
[64] Jurisdiction over divorce is established by section 3(1) of the Divorce Act (with
emphasis):
A court in a province has jurisdiction to hear and determine a divorce proceeding if either
spouse has been ordinarily resident in the province for at least one year immediately preceding
the commencement of the proceeding.
[65] “Ordinarily resident” is not, and has never been, defined in the Divorce Act.
[66] Until 1986, jurisdiction was established if “either the petitioner or the respondent
has been ordinarily resident in that province for a period of at least one year immediately
preceding the presentation of the petition and has actually resided in that province for at
least ten months of that period”: Divorce Act, RSC 1970, c D-8, s 5(1)(b) with emphasis
added.
[67] The jurisdictional requirements were simplified when (by SC 1986, c 4) Parlia-
ment enacted a new Divorce Act with the wording at para 64. At the second reading of
the bill the Minister of Justice made only a brief reference to them:
The way things are now, three conditions are required before a petition for divorce can be
filed before provincial courts: first, the petitioner must be a Canadian resident; second, one
of the two parties involved must have been a resident of the province for at least one year at
the time of the petition; third, that same person must have been a resident of that same
province for ten months. I intend to replace those three conditions by only one, namely that
one of the parties must have resided for at least one year in the province where the petition
is filed. That would simplify the issue and provide easier access to the courts.
House of Commons Debates, 32nd Parl, 2nd Sess, 2 (24 February 1984) at 1717-18 (Hon Mark
MacGuigan).
[68] Many cases, some at the appellate level, have discussed the meaning of the phrase
“ordinarily resident” (also used in section 22 of the Divorce Act). Most were decided before
the simplified jurisdictional requirements were imposed. Although Quigley relies on cases
decided under the stricter jurisdictional regime, we agree with the principles stated at
para 21:
[D]etermination of ordinary residence is highly fact specific and a matter of degree; ordinary
residence is in contrast to casual, intermittent, special, temporary, occasional or exceptional
residence; residence is distinguished from a stay or visit; a person’s ordinary residence is
where she is settled-in and maintains her ordinary mode of living with its accessories,
relationships and conveniences, or where she lives as one of the inhabitants as opposed to a
visitor; an ordinary residence may be limited in time from the outset or it may be indefinite
or unlimited; and ordinary residence is established when a person goes to a new locality with
the intention of making a home there for an indefinite period.
III. Residence 183
[69] The article by James G McLeod, “The Meaning of ‘Ordinary Residence’ and
‘Habitual Residence’ in the Common Law Provinces in a Family Law Context,” Family,
Children and Youth Section Research Report, September 2006), online: Department of
Justice <http://www.justice.gc.ca/eng/rp-pr/fl-lf/divorce/rhro_cl/index.html> is also
helpful. Under the heading “What does the term ordinary residence mean in the context
of the common law,” the learned professor writes at paragraphs 24-25 (footnotes omitted
and emphasis added):
“[O]rdinary residence” is not a phrase capable of precise definition. At its simplest level,
ordinary residence connotes something more than mere temporary presence in a place. It
refers to the place in which a person’s lifestyle is centered and to which the person regularly
returns if his or her presence is not continuous. …
Most common law courts understand ordinary residence to mean the place where a
person resides in the ordinary course of his or her day to day life. If the inquiry is directed
towards a person’s real home as many courts have suggested a person usually will have only
one place of ordinary residence notwithstanding the family courts’ early reliance on cases
decided in an income tax context where the courts held that an individual can have more
than one residence … .
[A]n adult’s ordinary residence depends on physical presence in a place for an extended
and regular basis as well as an intention to live there on a more or less regular basis. …
Unlike actual residence, ordinary residence does not require continued physical presence
in a place during the currency of the period of ordinary residency. That a person has a fixed
place of residence in a jurisdiction is an important consideration but not a requirement of
law to establish and maintain ordinary residence in a place. A person does not lose his or
her ordinary residence in a place by leaving for a temporary purpose. However, a person will
lose his or her ordinary residence in a place if he or she travels to another place to live and work
indefinitely even if he or she intends ultimately to return to the prior home.
[70] As Quigley held, the inquiry into “ordinarily resident” is highly fact-specific.
Quigley is a case that deals with the determination of ordinary residence after the 1986
change in legislation and, similar to Badawy and Nafie’s case, is one in which various ties
were maintained with the originating location. The petitioner moved to Texas in late
August of 2005. She kept her Nova Scotia law practice, the family residence, existing bank,
insurance and other financial arrangements. She intended to return to Nova Scotia if the
parties were unable to reside together as a family. In November of 2007, a Statement of
Claim was filed, but no jurisdiction was found.
[71] “Ordinarily resident” status is maintained in instances when an applicant’s
absence from the jurisdiction is for a week or a month; see Graves v Graves (1973), 13
NSR (2d) 262 at 267, 36 DLR (3d) 637 (NS SC); Zoldester v Zoldsester (1974), 42 DLR
(3d) 316, 2 WWR 572 (BC SC). In one exceptional case, the applicant was away from
Canada for many years yet did not lose his “ordinarily resident” status, but the facts were
very different in that the petitioner was serving his country in the armed forces: Marsellus
v Marsellus (1970), 13 DLR (3d) 383, 2 RFL 53 (BC SC).
[72] In MacPherson, the parties left Ontario in September 1973 for Nova Scotia where
they lived for eight months until April 1974, when the wife returned to Ontario. Like
Nafie, she stated she did not intend to establish a permanent residence in Nova Scotia.
The case distinguishes actual from ordinary residence, stating that “mere temporary
absences, such as for holidays abroad … nor a longer gap of some months, such as one
caused by a wife accompanying her husband on a business trip necessarily break the
continuous period of ordinary residence”: at 568. However, the court stated that “the
arrival of a person in a new locality with the intention of making a home in that locality
for an indefinite period makes that person ordinarily resident in that community”: at 570.
Therefore, “[h]er stated intention of returning to live in Ontario does not detract from
the fact that she was ordinarily resident in Nova Scotia for that period which continued
until she moved and established her residence in Ontario”: ibid.
[73] Finally, S (AE) v W (AM), 2013 ABCA 133, 544 AR 246 also warrants mention.
This Court considered the “habitual residence” of a six-year old child. Under the Matri-
monial Property Act of Alberta, RSA 2000, c M-8, s. 3(1) (emphasis added):
A spouse may apply to the Court for matrimonial property order only if
(a) The habitual residence of both spouses is in Alberta, whether or not the spouses
were living together,
(b) The last joint habitual residences of the spouses was in Alberta, or
(c) The spouses have not established a joint habitual residence since the time of
marriage but the habitual residence of each of them was in Alberta.
[74] For the first years of his life, the child in S (AE) v W (AM) resided in the United
States with his parents. He moved to Alberta with his mother for about a year in 2009, and
then again for a few weeks in 2011. The child left Alberta in September 2011 to live with
his father, and in October 2011 the mother joined them in the United States. The mother
and child left for Alberta in January 2012 and the father applied for his return in May 2012.
The Court of Queen’s Bench determined the child was not “habitually resident” in Alberta.
This Court concluded that no palpable and overriding error had been demonstrated.
[75] Some cases have put “habitually” and “ordinarily” resident on the same legal
footing. However, since corollary relief was not severed from the divorce action in Nafie
and Badawy’s case, only “ordinarily resident” is relevant.
[76] For ease of reference, Nafie left Alberta for Saudi Arabia in November 2011 and
returned June 2012. The issue is whether, although not actually resident in Alberta, she
was nevertheless “ordinarily resident” in Alberta during the eight months she was in Saudi
Arabia of the one year before July 24, 2012 when she filed for divorce.
[77] Applying the language of Quigley, the parties’ time in Saudi Arabia was not casual,
intermittent, special, occasional or exceptional, nor was it a stay or visit. The uncontro-
verted evidence was that their Calgary house was leased for a two-year period and they
sold two of their three Calgary vehicles. They had a two-week vacation in the United
States and when they returned to Calgary on June 26, they stayed with Nafie’s parents.
[78] The family established their “ordinary mode of living with its accessories, relation-
ships and conveniences” (Quigley at para 21) in Saudi Arabia. They “settled-in” there. They
rented a residence, purchased furniture and other items, leased two vehicles, employed a
maid and a driver, opened a bank account, and enrolled their children in an American
school (see Nafie’s affidavit affirmed September 23, 2013). Between November 2011 and
June 2012, the family’s life was centered in Saudi Arabia. They made their home there.
[79] That is not to say that their residence in Saudi Arabia was permanent. Badawy’s
contract was for a one-year renewable term, and the parties maintained strong ties to
Calgary.
III. Residence 185
[80] We have concluded that on these facts Nafie’s ties to Alberta are not sufficient to
overcome the connection she had with Saudi Arabia. While events unfortunately did not
go as originally planned which led to her premature return to Calgary, Nafie’s after-the-fact
intention that she planned to return in June in any event does not satisfy the legal require-
ments to establish “ordinarily resident” in Alberta.
[81] When evidence concerning “ordinarily resident” conflicts on material points, the
matter should go to trial: Fareed v Latif (1991), 71 Man R (2d) 276, 31 RFL (3d) 354 (QB).
• • •
[82] In our view the chambers judge erred in principle by over-emphasizing Nafie’s
after-the-fact intention about residency and by relying on affidavits that highly conflicted
on material points.
• • •
[87] In the ordinary course, setting aside the Statement of Claim for Divorce and
Division of Matrimonial Property because Nafie was not ordinarily resident when she
filed it would also lead to the setting aside of associated interlocutory orders.
[88] Several of those interlocutory orders have a significant impact on the parties’
three children, including the orders granting Nafie interim custody, interim exclusive
possession of the matrimonial home and the vehicle and interim child support. Without
the force of those orders, important aspects of the children’s day-to-day lives—including
where and with whom they live—would become uncertain given the acrimonious and
litigation-focused problem-solving approach taken by the parties.
[89] Accordingly, on these unique facts and especially given the parties’ conduct to-
date, we have taken the extraordinary approach of exercising our parens patriae and nunc
pro tunc jurisdictions to give effect to a select number of the interlocutory orders as of
the date they were made.
• • •
[142] There is little doubt that Nafie would meet the “ordinarily resident” requirement
in the Divorce Act if she filed for divorce now. Accordingly, a fresh claim for divorce and
a separate claim for division of matrimonial property and other corollary relief may be
appropriate.
• • •
O’FERRALL JA (dissenting in part):

• • •
[146] Where I depart from the majority is in their conclusion that the chamber’s judge
erred in law in finding that Ms. Nafie was ordinarily resident in Alberta when she com-
menced her claim.
• • •
[148] Applying a bit of crude textual analysis to the words of [s 3(1) of the Divorce
Act], I would distinguish between a place where one is ordinarily resident with a place
where one is actually, but temporarily, resident. I might also be tempted to contrast an
ordinary residence with an extraordinary residence, the latter being a place where one
might be required or wish to reside temporarily for vocational, educational or recreational
purposes.
• • •
[150] Determining where someone is ordinarily resident is a question of mixed fact

and law. For ease of reference, the standard of review passage from the leading case,
Quigley v Willmore, 2008 NSCA 33 at para 9, 264 NSR (2d) 293 [Quigley] is reproduced
below:
When considering whether a petitioner has met the residence requirements of the Divorce
Act, a judge of first instance is addressing a question of mixed law and fact. Questions of law
are questions about what the correct legal test is; questions of fact are questions about what
actually took place between the parties; and questions of mixed law and fact are questions
about whether the facts satisfy the legal tests: (Canada (Director of Investigation & Research)
v Southam Inc, [1997] 1 SCR 748 (SCC), at para 35).
[151] Trial judges are “required to first make the necessary findings of fact regarding
where [the applicant for divorce] resided during the relevant period of time and then
apply those facts to the legal standard of ‘ordinary residence’ ” in the Divorce Act: Quigley
at para 9.
• • •
[153] The majority concluded that the trial judge placed too much reliance on Ms.
Nafie’s intention to return to Alberta. In my view, Ms. Nafie’s ordinary residence had less
to do with Ms. Nafie’s intentions than it had to do with both spouses’ intentions. In my
view, like most married couples, Ms. Nafie and Mr. Badawy had the same ordinary resi-
dence at the relevant time. In determining whether they both lost their ordinary resident
status when they left Alberta or whether they maintained their ordinary residency in
Alberta despite their absence, the trial judge looked to the parties’ intentions. Did they
intend their time away to be temporary or indefinite. The trial judge found they intended
their time overseas to be temporary.
[154] Undisputed facts before the trial judge confirmed that both Mr. Badawy and
Ms. Nafie were ordinarily resident in Alberta throughout most of their marriage. During
their time overseas they maintained their matrimonial home in Calgary, their cellular
telephones, a vehicle, their Canadian banking and credit cards, mail delivery and more.
They continued to serve as principals of at least one Alberta-based corporation. And
except for their time away, they had been actually resident in Alberta for more than a
decade and did not appear to have had any intention of residing elsewhere permanently
or even indefinitely.
[155] Ascertaining the intention of parties is critical to the determination of where
they are ordinarily resident. It is not necessarily determinative, but a person’s intention
is relevant to the determination of ordinary residency. The intention, however, must be
objectively assessed which is what the trial judge did. He concluded that Ms. Nafie’s
intention that her time overseas was to be temporary and not indefinite and that Calgary
was her “real home” was supported by objective facts. In my view, this intention to ordin-
arily reside in Alberta is objectively evident from the strong and continuing ties both Ms.
Nafie and Mr. Badawy maintained in this jurisdiction and their decision to return to
Calgary to reside following the matrimonial breakdown. This is not a case where a person
packed up and left the jurisdiction and later asserted that he or she always intended to
come back.
[156] The reality is that many Alberta couples, born, raised, educated and worked
here, take temporary assignments overseas. I am concerned that if during such overseas
assignments matrimonial breakdown occurs, such couples not be required to return to the
province and actually reside here for a year before they can commence a divorce action.
III. Residence 187
[157] Support for the trial judge’s decision is found in the case law. Determining
ordinary residence is a highly fact specific exercise: Thomson v Minister of National Rev-
enue, [1946] SCR 209, [1946] 1 DLR 689. Ordinary residence is contrasted with casual,
intermittent, special, temporary, or exceptional residence, and is not a stay or visit:
Thomson. It requires the determination of the person’s ordinary or customary place of
living, where someone lives as an inhabitant rather than a visitor. Some courts have stated
the test simply “where was the person’s real home during that period?” Hardy v Hardy
(1969), 7 DLR (3d) 307, [1969] 2 OR 875 at 52. The Manitoba Court of Queen’s Bench
also adopted this test in Anema v Anema (1976), 1976 CarswellMan 10, 27 RFL 156
(MBQB) at para 6. If one were to simply ask the petitioner, “where is your home?,” the
answer to that question would be their ordinary residence. Ordinary residence is different
from actual residence, and will not be destroyed by a physical absence: Walker v Walker
(1970), 14 DLR (3d) 155, [1970] 3 OR 771 (ONHC).
[158] Another older but still leading case about “ordinarily resident” in the family law
context is MacPherson v MacPherson, [1976] OJ No 2195, 70 DLR (3d) 564, in which the
Court asked where was the person’s “real home,” or where did he or she ordinarily or
customarily reside. As the majority discusses, the section of the Divorce Act in force when
MacPherson was decided had two requirements: ordinary residence and actual residence.
In MacPherson the Court differentiated between the two residency requirements, and
noted that “ordinary residence” does not require the physical presence, or actual residence
(at para 10). The Court also noted exceptions that will not disrupt ordinary residence,
including when people are posted in different jurisdictions for employment purposes or
military purposes.
[159] Given the standard of review and case law which distinguishes between tem-
porary and indefinite absences, the trial judge’s conclusion that Ms. Nafie had been
ordinarily resident in Alberta for at least a year prior to the commencement of her divorce
action was reasonable.
• • •
[160] The majority concluded that the chambers judge erred in law in relying on
affidavits that conflicted “on almost all material points.” I respectfully disagree. My view
is that the chambers judge, after warning himself about the dangers of deciding an issue
in the face of competing affidavits (para 20), found that he was able to resolve the key
legal question of jurisdiction notwithstanding that the affidavits conflicted on a number
of points. And the reason he was able to resolve this question was that there were undis-
puted facts which objectively supported a finding that the parties’ departure from the
jurisdiction was intended to be temporary. That is, the evidence disclosed that neither
party intended this overseas assignment to be indefinite. Confirmation of their intention
that their overseas residency was to have been of indefinite duration came in the parties’
actions following their separation and Mr. Badawy’s overseas assignment. They both came
back to Calgary to live, where they remain to this day.
[161] In my view, trial court judges ought to be permitted to determine just how much,
if any, viva voce evidence, cross-examination, etc. is needed in order to decide an issue. I
have difficulty perceiving what would have been gained by a trial of the residency issue.
The evidence would have been the same, as would the arguments. The appellant’s argument
about the conflicting evidence with respect to how long the parties were going to remain
in Saudi Arabia or about whether they were going to return to Saudi Arabia after their
“holiday” in Calgary had little relevance to their ordinary residency.
[162] Trials of issues are only necessary when there is conflicting and prima facie
credible affidavit evidence with respect to dispositive or determinative facts which are
not reconcilable, but only when those dispositive or determinative facts (or their absence)
cannot otherwise be found in the evidence.
• • •
[165] For the foregoing reasons, I would have dismissed Mr. Badawy’s appeal of Justice
Hall’s decision that the Court of Queen’s Bench of Alberta has the jurisdiction to hear Ms.
Nafie’s petition for divorce and her matrimonial property claims. As for Mr. Badawy’s
appeal of the various interlocutory orders made in these proceedings, I concur with the
majority that those orders should not be disturbed where they affect the children of the
marriage.
Unless the statute or context expressly or impliedly requires an exclusive connection, it is

possible for a person to have more than one ordinary residence (as opposed to domicile). In
the following decision, the Ontario Court of Appeal concluded that a person could be ordin-
arily resident in both the forum and another place for the purpose of assuming jurisdiction
under the common law test in Club Resorts Ltd v Van Breda, 2012 SCC 17, [2012] 1 SCR 572. See
also Broad v Pavlis, 2015 BCCA 20, and Roberts v Bedard, 2015 ONSC 7918.
Knowles v Lindstrom
2014 ONCA 116
[The appellant and respondent lived together in Florida from 2002 until their separation
in February 2012, when the appellant flew to Toronto. Shortly after her return, she applied
to the Ontario Superior Court seeking spousal support under Part III of the Family Law
Act, RSO 1990, c F.3 and a declaration that she was a beneficial owner of two Muskoka
properties purchased by the respondent while they were together. The respondent moved
for a stay of her application, arguing that the Ontario Superior Court had no jurisdiction
over the claims and, even if it did, Florida was the forum conveniens. Alternatively, he
sought an order that Florida law, under which the applicant had no claim for support,
applied to her claims. The motion judge held that the Ontario courts had jurisdiction,
that Ontario was the forum conveniens, and that Ontario law applied. On the jurisdictional
issue, the motions judge applied the common law approach in Club Resorts Ltd v Van
Breda, 2012 SCC 17, [2012] 1 SCR 572, there being no statutory jurisdictional rules
applicable to the claims. The Ontario Court of Appeal dismissed the respondent’s appeal
on all issues. On the jurisdictional question, Justice Doherty concluded that where the
subject of a claim is real property that is alleged to be a vehicle for alleged unjust enrich-
ment, the location of the property in Ontario constitutes a sufficient presumptive con-
necting factor. The excerpt below sets out his reasoning on the other presumptive
connecting factor identified by the motions judge as sufficient for jurisdiction—the
finding that while the primary residence of the parties was in Florida during the time
they were together, their customary pattern of life included residence for a substantial
III. Residence 189
period each year in their Ontario home, which made them ordinarily resident in both
places.]
DOHERTY JA:
[25] I will, however, in deference to the arguments advanced by the appellant, address
one other factor identified by the motion judge as a presumptive connecting factor. The
motion judge concluded that Ms. Knowles and Mr. Lindstrom were ordinarily resident
in Ontario and Florida between 2007 and their break-up in February 2012. He further
held that their residence constituted a presumptive connecting factor in respect of both
the property and the support claims.
[26] The finding that Ms. Knowles and Mr. Lindstrom were ordinarily resident in
Ontario in the years between 2007 and 2012 was the primary target of the appellant’s
arguments in this court. The appellant contends that, for jurisdictional purposes, Ms.
Knowles and Mr. Lindstrom could have only one residence and that, as the motion judge
acknowledged, Florida was their primary residence.
[27] Van Breda, at para. 86, recognizes that the ordinary residence of the defendant
is a presumptive connecting factor in tort cases. This court has held that the “real home”
or “ordinary residence” of the parties is a presumptive connecting factor in litigation
arising out of a marriage breakdown: Wang v. Lin, 2013 ONCA 33, at para. 47; and
Ghaeinizadeh v. Ku De Ta Capital Inc., 2013 ONCA 2, at para. 15.
[28] The motion judge, at para. 44, applying the ratio in Thomson v. Minister of
National Revenue, [1946] S.C.R. 209, held that a person may have more than one ordinary
residence at a given time. Thomson involved a taxing statute which provided that persons
were liable for tax if “residing or ordinarily resident in Canada during such year.” The
individual challenging the tax assessment had two homes in the United States. He had
built a summer home in Canada where he and his family routinely spent about five
months a year during the spring and summer.
[29] There are five judgments in Thomson. Four of the judges agreed that a person
could be ordinarily resident in more than one place and that, on the evidence, Mr. Thom-
son was ordinarily resident in Canada. Justice Estey, at pp. 231-32, said:
This residence at East Riverside [Canada] was maintained in a manner that made it always
at his disposal and available at any time. When there his activities of life were centred about
that point. It was to and from there he made his visits to other places. He and his family were
then living there. It would appear that the appellant was maintaining more than one residence
to which he could and did come and go as he pleased. …
The appellant selected the location, built and furnished the residence for the purpose
indicated, and has maintained it as one in his station of life is in a position to do. In successive
years his residence there was in the regular routine of his life acting entirely upon his own
choice, and when one takes into consideration these facts, particularly the purpose and object
of his establishing that residence, the conclusion appears to be unavoidable that within the
meaning of this statute he is one who is ordinarily resident at East Riverside, New Brunswick.
[30] Justice Kellock, at p. 210, took the same view:

There was no difference between the appellant’s use of his Canadian home and that of his
United States home or homes. The establishments were essentially of the same nature and
were equally regarded by him as “homes” in the same sense. His residence in each was in the
ordinary and habitual course of his life and there was no difference in the quality of his
occupation, though he occupied each at different periods of the year. He came within the
term “residing” and “ordinary resident” in Canada.
[31] There are clear similarities between the lifestyle enjoyed by Ms. Knowles and Mr.
Lindstrom and that of the taxpayer described in Thomson. After acknowledging that the
parties’ “primary home” had “always been in Florida,” the motion judge said, at para. 44:
On the uncontested facts in this case, the parties had set up a pattern that included residence
in Ontario, in a home owned by the respondent, on a regular basis for part of every year, for
months at a stretch, for more than five years. That amounts to “ordinary residence.”
[32] I agree with the motion judge that Thomson establishes that a person can be
“ordinarily resident” in more than one place at the same time. With respect, the contrary
holding in Derksen v. Insurance Corp. of British Columbia, [1995] B.C.J. No. 2709, at paras.
20-21 (S.C.) misreads Thomson. I also find nothing in the judgments in Thomson that
would justify limiting the court’s analysis to the taxation statute in issue. The definition
of “ordinary residence” arrived at by the majority in Thomson is consistent with the plain
meaning of the phrase and reflects the reality of the lifestyle that some people lead. The
motion judge was satisfied that Ms. Knowles and Mr. Lindstrom had that kind of lifestyle.
The record fully supports that finding.
[33] The Family Law Act is silent on the question of jurisdiction over Ms. Knowles’
support claim. The motion judge held that in the absence of legislative direction to the
contrary, that he was not limited to the concept of primary or principal residence, when
considering the significance of residence to the jurisdictional question. I agree. In my
view, if there is no controlling statutory provision, the concept of ordinary residence as
defined in Thomson is appropriate when considering whether the parties’ physical con-
nection to a jurisdiction is sufficient to constitute a presumptive connecting factor for the
purposes of the Van Breda analysis.
[34] I do not understand the appellant to argue that, if the motion judge properly
determined that Ms. Knowles and Mr. Lindstrom were ordinarily resident in Ontario at
the time of the break-up, that ordinary residence could not provide a basis for the assump-
tion of jurisdiction in respect of both claims. Clearly, ordinary residence, especially where
that residence is in the properties that are the subject matter of the property claim, con-
stitutes a real and substantial connection for the purposes of the property claim. Similarly,
ordinary residence at the time of break-up sufficiently connects the litigation and the
parties to Ontario to warrant Ontario’s jurisdiction over the support claim: Ghaeinizadeh.
As noted earlier, the term “habitual residence” entered the Canadian legislative vocabulary
as a result of the influence of the Hague conventions, which adopted the concept as a via
media between the common and civil law concepts of domicile. The following case contin-
ues to be influential in understanding its meaning in Canadian law.
III. Residence 191
PA v KA
1987 ABCA 52, 36 DLR (4th) 631
LAYCRAFT CJA:
[1] The issue in this appeal is the proper interpretation of the words “last joint habitual
residence” as they appear in s. 3(1)(b) of the Matrimonial Property Act, RSA 1980, c. M-9,
as one of the bases for the jurisdiction of the court to hear a matrimonial property action.
In the Court of Queen’s Bench, on a preliminary point of law to determine whether the
court had jurisdiction in the action, Mr. Justice Medhurst held that the last joint habitual
residence of the parties was in Alberta. I respectfully agree with the conclusion he reached.
[2] The wife was born an American citizen in California, and subsequently acquired
Canadian citizenship. The husband was born in Canada. They were married in Calgary
in 1970 and lived together in Alberta for some 14 years. They were separated for three
months in 1982, during which time the wife lived in Hawaii. They reconciled and lived
together in Alberta from January, 1983 until March, 1984. At that time they decided to
go to Hawaii to live. Prior to their departure, they sold some of their possessions and
obtained United States alien registration cards which would entitle them to obtain employ-
ment in Hawaii. On March 18, 1984, with their daughter, and taking many of their pos-
sessions with them, they left for Hawaii.
[3] For the first period of their stay in Hawaii they lived with friends. Their daughter
was enrolled in school. The wife secured employment shortly after they arrived but the
husband was unable to find suitable employment. In early May they rented a house on a
month-to-month tenancy and moved into it.
[4] In mid-May 1984, the husband returned to Calgary on business, at least part of
which was to dispose of remaining matrimonial assets. At the end of June he returned to
Hawaii where he enrolled briefly in an acting course. After six weeks, at the middle of
August, 1984, he left Hawaii to reside in California and later in Oregon. In October, 1984,
he advised his wife that he wanted a divorce.
[5] The wife commenced an action for divorce in Hawaii in May, 1985, and also in
that month commenced this matrimonial property action in Alberta. A decree of divorce
was pronounced in Hawaii on October 2, 1985.
[6] The test for jurisdiction of the Court of Queen’s Bench of Alberta in a matrimonial
property action, where a divorce petition is not issued in this province, is contained in
s. 3(1) of the Matrimonial Property Act which provides:
3(1) A spouse may apply to the Court for a matrimonial property order only if
(a) the habitual residence of both spouses is in Alberta, whether or not the spouses
are living together,
(b) the last joint habitual residence of the spouses was in Alberta, or
(c) the spouses have not established a joint habitual residence since the time of mar-
riage but the habitual residence of each of them at the time of marriage was in Alberta.
[7] The term “last joint habitual residence” has not previously been considered in this
court. The concept of “habitual residence” seems to have come into Canadian law from
the Hague Conventions adopted by the Hague Conference on Private International Law. …
[8] One object of adopting the new term according to the learned authors of Dicey
and Morris: The Conflict of Laws, 10th ed. (1980), at page 144 was to avoid the rigid and
arbitrary rules which have come to surround the concept of “domicile.” While “domicile”
is concerned with whether there is a future intention to live elsewhere, “habitual residence”
involves only a present intention of residence. There is a weaker animus.
[9] An early decision on the term “habitual resident” was given by Lane J (as he then
was) in Cruse v. Chittum, [1974] 2 All ER 940, where a declaration was sought that a
divorce granted in Mississippi was valid in England. The Recognition of Foreign Divorces
and Legal Separations Act, 1971 (UK), c. 53, provided that a foreign divorce would be
recognized if either spouse was habitually resident in that country. Lane J adopted the
submission of counsel that “habitual” refers to quality of residence rather than duration,
though there must be a physical presence which endures for some time. The animus
necessary to establish “domicile” is not required for “habitual residence.”
[10] A number of text writers have adopted this terminology and have placed “habitual
residence” somewhere between “residence” and “domicile” in the tests necessary to estab-
lish it. Evidence of intention does not have the importance it has in tests for “domicile”
but may be a factor in some cases. In Dicey and Morris: The Conflict of Laws (10th ed.)
at pages 144-145 it is said:
It is evident that “habitual residence” must be distinguishable from mere “residence.” The
adjective “habitual” indicates a quality of residence rather than its length. Although it has
been said that habitual residence means “a regular physical presence which must endure for
some time,” it is submitted that the duration of residence, past or prospective, is only one of
a number ofe relevant factors; there is no requirement that residence must have lasted for
any particular minimum period.
• • •
… [E]vidence of intention may be important in particular cases e.g. in establishing

habituation where the actual period or periods of residence have been short, but it is not
essential.
[11] The authors of Cheshire and North: Private International Law (10th ed.) adopt
the terminology from Cruse v. Chittum [[1974] 2 All ER 940] and make the point that a
weaker animus establishes “habitual residence” than is necessary for “domicile.” At page
187 it is said:
Indeed, it ought to be a requirement of present intention to reside unlike the intention
required in domicil which is concerned with whether there is a future intention to live
elsewhere. No more than a present intention to reside should be necessary for habitual resi-
dence and this ought to be assumed from the fact of continuous residence.
[12] McLeod, The Conflict of Laws (1983) at page 180, observes that the use of
“habitual” to qualify “residence” implies a more permanent or enduring quality than the
term would import by itself. Graveson: Conflict of Laws (7th ed) at page 194 states that
“habitual residence” is a midpoint between domicile and residence. It “differs from ordin-
ary residence in its quality of continuity for a substantial period and from domicile in its
lack of the need for permanence.” Castel in Canadian Conflict of Laws, 2d ed., at pp. 100-1
states that “habitual” has a “certain permanent character,” requires more than physical
presence and implies both “a minimum connection with some form of dwelling” and “a
stay of some duration.” Habitual residence
III. Residence 193
… will probably be held to mean much the same thing as domicile minus the artificial ele-
ments of the concept and minus the stress now placed on the [artificial] element of intention
in domicile.
[13] The House of Lords considered the term “habitual residence” in the course of
defining “ordinarily resident” in R v. Barnet London Borough Council, Ex p. Nilish Shah,
[1983] 2 AC 309. In that case foreign students sought to establish that they were “ordin-
arily resident” in the United Kingdom so as to be eligible for education awards. In the
Court of Appeal, Lord Denning MR had said ([1982] QB 688 at 720) that the words mean
that “the person must be habitually and normally resident here.” Lord Scarman adopted
that definition and then said at page 342 that the adverb “habitually” imports “residence
adopted voluntarily and for settled purposes.” Expanding on the meaning of “settled
purposes” he said at page 344:
And there must be a degree of settled purpose. The purpose may be one; or there may be
several. It may be specific or general. All that the law requires is that there is a settled purpose.
This is not to say that the “propositus” intends to stay where he is indefinitely; indeed, his
purpose, while settled, may be for a limited period. Education, business or profession,
employment, health, family, or merely love of the place spring to mind as common reasons
for a choice of regular abode. And there may well be many others. All that is necessary is
that the purpose of living where one does has a sufficient degree of continuity to be properly
described as settled.
[14] The word “habitual” was used in that case merely as one of the words defining
ordinary residence. I do not consider it to be of assistance to equate the two terms. Lord
Scarman’s discussion of “settled purposes” is, however, useful as a factor in the consider-
ation of present intention as applied to “habitual residence.”
[15] The term “last common habitual residence” was considered in two cases in
Manitoba: Wolch v. Wolch (1980), 19 RFL (2d) 307, and Baker v. Baker (1985), 38 Man. R
(2d) 39, 49 RFL (2d) 216. In Wolch a couple moved from Manitoba to Connecticut where
the husband practised dentistry for a year before they moved elsewhere and subsequently
separated. Wilson J noted the “deliberation” of their move to Connecticut where they
shared a common residence, “at the time meant to be habitual.” He held that their last
common residence was in Connecticut.
[16] In Baker the issue of “last common habitual residence” arose in the context of a
motion to strike the action for want of jurisdiction. A referee refused to do so but was
reversed in Queen’s Bench [33 Man R (2d) 33; 44 RFL (2d) 455]. In the Court of Appeal,
the majority of the court did not define the term but held that the case should be tried so
the wife could adduce evidence on the point. Huband JA, dissenting, considered the
intention of the parties in holding that there had been a change in their habitual residence.
[17] A case in what is now Alberta before it became a province, considered the term
“residence” in determining in which of two places a citizen was entitled to vote. That case
is Re Banff Election; Brett v. Sifton (1899), 4 Terr. LR 140. Rouleau J held that residence
meant “habitual physical presence.” He applied a definition from the then current edition
of Dicey on Conflict of Laws to hold that this “does not mean presence in a place for a
long or short time but the presence there for the greater part of the period whatever that
period may be … .” In my view, a case decided in the context of an election law and
concerned only with defining the term “residence” is of little assistance in this case.
[18] I adopt the views of the text writers, which, though somewhat variously
expressed, state that the term “habitual residence” refers to the quality of residence. Dura-
tion may be a factor depending on the circumstances. It requires an animus less than that
required for domicile; it is a midpoint between domicile and residence, importing some-
what more durable ties than the latter term. In my view it is not desirable, indeed it is not
possible, to enter into any game of numbers on the duration required. All of the factors
showing greater or less present intention of permanence must be weighed.
[19] Considering all of the factors in this case, though the parties left Alberta hoping
and intending that they would establish a joint habitual residence in Hawaii, in my opin-
ion, they never did in fact do so. The husband, particularly, never did, either as shown by
his occupation or by the duration of his two short stays in Hawaii, acquire any tie to that
state. Their joint residence never did exhibit the durable ties to Hawaii necessary to a
“joint habitual residence.” Consequently their last joint habitual residence was in Alberta.
[20] I would dismiss the appeal with costs to the wife in any event of the cause.
Appeal dismissed.
NOTES
1. Although Laycraft CJ concluded that habitual residence referred to the quality of resi-
dence and not its duration, it is evident that the latter factor weighed heavily, even deci-
sively, in his conclusion. In this he relied on the following passage from Lane J’s decision in
Cruse v Chittum, [1974] 2 All ER 940 at 942-43 (Fam D):
“[H]abitual” must indicate a quality of residence, rather than a period of residence. … [It] must not
be temporary or of a secondary nature, … [it] requires a regular physical presence which must
endure for some time.
Are these statements “self-contradictory”? See Nygh (1995) at 217.

2. In Re J (A Minor) (Abduction: Custody Rights), [1990] 2 AC 562 at 578-79, Lord Brandon
stated:
A person may cease to be habitually resident in country A in a single day if he or she leaves it
with a settled intention not to return to it but to take up long-term residence in country B
instead. Such a person cannot, however, become habitually resident in country B in a single day.
An appreciable period of time and a settled intention will be necessary to enable him or her to
become so. During that appreciable period of time the person will have ceased to be habitually
resident in country A but not yet have become habitually resident in country B.
In Z v Z, [2009] EWHC 2626 (Fam), an English court concluded, in relation to divorce juris-
diction under the Brussels II (Revised) Regulation, that “one can in appropriate circumstances
establish habitual residence very quickly, in my judgment very quickly indeed” (para 88).
However, that decision was rendered in the context of the autonomous concept of “habitual
residence” in European Union law which, unlike English law, does not accord particular sig-
nificance to the length of time a person spends in or out of a country, whether for the pur-
poses of acquiring or losing habitual residence.
III. Residence 195
3. There is English authority, in line with the approach taken to ordinary residence, that
one may be habitually resident in more than one country at the same time. The same is not
true under the autonomous concept of habitual residence in European Union law:
So far as material for present purposes these authorities demonstrate two things: first, that
“habitual residence” has an autonomous meaning in EU law, and that its meaning in EU law is
not the same as its meaning in our domestic law; second, that, in distinction to our domestic law
(contrast Ikimi v Ikimi [2001] EWCA Civ 873, [2002] Fam 72), at any given time a person can have
only one habitual residence for the purposes of BIIR [Brussels II Revised, Regulation (EC) No
2201/2003]. Those two propositions have never been doubted.
L (A Child), [2012] EWCA Civ 1157 at para 67.

4. The following excerpt provides a useful summary of the relevance and meaning of the
concept of “habitual residence” in European Union law:
Rafal Manko, “ ‘Habitual Residence’ as Connecting Factor in EU Civil Justice Measures”

European Parliament Library Briefing (22 January 2013), online: <http://www.europarl.europa
.eu/RegData/bibliotheque/briefing/2013/130427/LDM_BRI(2013)130427_REV1_EN.pdf>
A perceived weakness of both nationality and domicile is their rigidity in connecting a person
to their country of origin. This is considered inadequate especially in the context of free move-
ment of persons. According to a recent report, over 12 million EU citizens live in a different
Member State (MS) than that of their nationality and they are often integrated into the social
environment of their country of residence. Therefore, determination of their capacity to marry
or to make a will according to the law of the MS of their nationality is considered inappropriate.
In particular, it could lead to discrimination of EU citizens who are residents but not nationals of
a given MS.
Habitual residence is viewed as superior to nationality and domicile as a connecting factor
owing to its flexibility. However, precisely because it is not defined strictly, it can be difficult to
prove in more difficult cases.
The Succession Regulation

Habitual residence occupies a prominent position in the recently adopted Succession Regula-
tion [Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on
jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforce-
ment of authentic instruments in matters of succession and on the creation of a European Certificate
of Succession]. In particular, it provides that the courts of the state in which the deceased had
their habitual residence at the time of death shall have, in principle, jurisdiction over the entire
succession and that the applicable law should also, in principle, correspond to the deceased’s
habitual residence. …
The preamble to the Regulation indicates that when assessing habitual residence, all circum-
stances of the deceased’s life, both at and before their death, ought to be considered. Habitual
residence should be based on a “close and stable connection” with a state. Factors to be taken
into account include the duration, regularity, conditions and reasons for staying in a country.
Habitual residence in someone’s country of origin can be maintained through social and family
ties, despite their having moved abroad. The nationality of the deceased and the location of
their assets could be a decisive factor in the case of persons who have lived in many states or
travelled between different states without settling permanently.
Other EU Legislation
Habitual residence has been used as principal or subsidiary connecting factor in EU legislation
concerning conflict rules, including:
• Regulation on the law applicable to contractual obligations (Rome I);

• Regulation on the law applicable to noncontractual obligations (Rome II);
• Regulation on the law applicable to divorce and separation (“Rome III”);
• Regulation on jurisdiction and the recognition and enforcement of judgments in matri-
monial matters and the matters of parental responsibility; and
• Regulation on jurisdiction, applicable law, recognition and enforcement of decisions and
cooperation in matters relating to maintenance obligations.
The notion of habitual residence also appears in a number of current legislative proposals in
the field of conflict rules, including in the proposed regulations on jurisdiction, applicable law
and the recognition and enforcement of decisions in matters of matrimonial property regimes
and regarding the property consequences of registered partnerships; as well as in the proposal
for amending the Insolvency Regulation.
Residence or habitual residence is also used as a connecting factor in EU public law legisla-
tion, including social security coordination, the European Arrest Warrant, as well as the Staff
Regulations of EU officials.
Habitual Residence in CJEU Case Law

Within the private international law field, the Court of Justice of the EU (CJEU) has shed some
light on the notion of habitual residence in the context of child abduction. The Court underlined
the importance of the integration of a child into their social and family environment, pointing
out that habitual residence is a question to be decided by the national court in light of the spe-
cific factual circumstances [Case C-497/10]. According to the CJEU, such factors may include the
duration, regularity, conditions and reasons for the child’s stay in a given place and the family’s
move there, the child’s nationality, the place where they attend school, what languages they
speak, as well as their family and social relationships.
CJEU case law in other fields of law could be of assistance in the area of private international
law [Case C-523/07]. Within the sphere of social security, the Court underlined that habitual resi-
dence has an autonomous meaning under EU law [Case C-90/97 Swaddling, [1999] ECRI-1075]. It
indicated that it corresponds to the habitual centre of interests of a person [Case C-523/07],
adding that in order to assess where someone’s habitual residence is located, the length of resi-
dence, the length and purpose of absence, as well as the person’s apparent intention must be
taken into account [Case C-102/91]. Under the Staff Regulations of EU officials the CJEU has ruled
that the place of habitual residence is the place where one has established a permanent centre
of interests with the intention of giving it a lasting character [Case C-452/93 P]. Finally, in the
context of the European Arrest Warrant, the CJEU found that a person is “resident” in a MS when
they have established their “actual place of residence” there [Case C-66/08].
5. Civil Code of Quebec. On whether a distinction exists between ordinary and habitual
residence, consider the wording of the French and English versions of the definition of “resi-
dence” in the Civil Code of Quebec (emphasis added):
Art. 77 La résidence d’une personne est le lieu où elle demeure de façon habituelle; en cas
de pluralité de résidences, on considère, pour l’établissement du domicile, celle qui a le carac-
tère principal.
Art. 77 The residence of a person is the place where he ordinarily resides; if a person has
more than one residence, his principal residence is considered in establishing his domicile.
III. Residence 197
6. In Mark v Mark, [2006] 1 AC 98, the House of Lords held that the illegality of a person’s
presence did not preclude the establishment of a domicile or habitual residence in England,
observing that the concepts of residence for immigration and private law purposes should
remain distinct. The same approach is reflected in the Canadian cases that have dealt with
this issue in the context of domicile: see Jablonowski v Jablonowski, [1972] 3 OR 410, 28 DLR
(3d) 440 (H Ct J), and Adoption—152, 2015 QCCA 348. In contrast, in Blair v Chung, 2006 ABQB
534, 63 Alta LR (4th) 84, the court rejected a divorce application on the basis that because the
motivation of the applicant in seeking a divorce was to legalize his status, allowing him to
proceed would undermine Canadian immigration policy. Less controversially, in Silva v John
Doe, 2016 ONSC 307, the court concluded that an applicant for compensation from a fund
established for victims of motor vehicle accidents was not ordinarily resident in Ontario so
as to be eligible for compensation. Although the evidence showed that he had been living
in Ontario for some nine years prior to the accident, his presence was illegal and he had been
deported back to Brazil by the time the application was heard. In concluding that the illegal-
ity of his presence was relevant to the interpretation of ordinary residence for the purposes
of the legislation establishing the fund, the court observed:
[51] I do not believe that it was the intention of the Ontario Legislature in enacting this
statute to allow a person the opportunity to reap the benefits of ordinary residency in Ontario
via a clandestine life through the passage of time. Even though the Act, as remedial legislation,
ought to be interpreted liberally, I do not find the plaintiff to be a member of the specific class
of Ontarians sought to be protected by this Act.
[52] While the plaintiff did enjoy a continuous physical presence in Ontario, that is but one
factor to consider. The plaintiff’s presence was the result of deception, and he never sought to
regularize his illegal status (a status of which he was well aware) until after he was made subject
to a deportation order.
[53] Taking all of these factors into account, and in the circumstances of this case, I find that
the plaintiff was not ordinarily resident in Ontario as of the date of the accident.
E. Relevance of Context
Haig v Canada; Haig v Canada (Chief Electoral Officer)

[1993] 2 SCR 995
[On October 26, 1992, two referendums were held in Canada concerning proposed
amendments to the Canadian constitution (“the Charlottetown Accord”), one in Quebec
under the authority of provincial law and the other in the rest of Canada under the
authority of federal law. The conduct of the federal referendum was governed by the
Canada Elections Act, RSC 1985, c E-2. Under that Act, any Canadian citizen of 18 years
of age who, on the enumeration date, was ordinarily resident within one of the polling
divisions established for the referendum would be entitled to cast a ballot. The Quebec
referendum was to be conducted in accordance with the provisions of the Election Act,
RSQ, c E-3.3. Under that Act, any Canadian citizen of 18 years of age who, on the polling
day, had been domiciled in Quebec for six months would be entitled to cast a ballot. In
August 1992, Graham Haig moved from Ontario to Quebec. On the enumeration day for
the federal referendum he was, therefore, no longer ordinarily resident in a polling
division in Ontario. At the same time, having been domiciled in Quebec for less than six
months, he did not meet the eligibility requirements under Quebec law. The result was,
of course, that Mr. Haig was not enumerated and consequently could not vote in either
referendum. He unsuccessfully challenged this result on both statutory interpretation and
Charter grounds. What follows are Cory J’s reasons in the Supreme Court on the statutory
interpretation issue.]
CORY J: … In this appeal consideration must be given to the nature of the right to vote
and how statutes which enact that right should be interpreted.
The Approach to the Interpretation of Statutory Franchise Provisions

All forms of democratic government are founded upon the right to vote. Without that
right, democracy cannot exist. The marking of a ballot is the mark of distinction of citizens
of a democracy. It is a proud badge of freedom. While the Canadian Charter of Rights and
Freedoms guarantees certain electoral rights, the right to vote is generally granted and
defined by statute. That statutory right is so fundamental that a broad and liberal inter-
pretation must be given to it. Every reasonable effort should be made to enfranchise
citizens. Conversely, every care should be taken to guard against disenfranchisement. …
The Importance of the Right to Vote on the Referendum

During the course of the hearing an argument was advanced that a referendum was
distinct from and less important than an election. It was argued that, as a result, the gener-
ous principles applicable to the right to vote in elections should not apply with the same
force to a referendum. I cannot accept that contention. A vast amount of public study,
effort and time was expended in drafting the terms of the Charlottetown Accord. Every
effort was made to advise Canadians of the importance of the referendum pertaining to
it and the significance of the vote of every citizen. The number of voters exercising their
franchise in the referendum was comparable to the turnout in federal elections. In the
minds of most Canadians, the referendum was every bit as important as an election. If it
was not, then Canadians would be clearly justified in wondering what all the fuss was
about. The same principles applicable to the right to vote in elections should be applied
in the same manner to the right to vote in a referendum.
Residency Requirements and the Interpretation of “Ordinarily Resident”

It follows that it was the duty of the Chief Electoral Officer to insure that as many Can-
adians as possible were enfranchised in every situation where that result could be attained
without infringing the law.
Let us review the legislation governing the referendum and the right to vote in that
referendum.
• • •
Sections 50(1), 53(1) and 55(1) to (5) of the Canada Elections Act, RSC, 1985, c. E-2
(as adapted for the purposes of a referendum by SOR/92-430) read:
III. Residence 199
50(1) Every person who

(a) has attained the age of eighteen years, and
(b) is a Canadian citizen,
is qualified as an elector.
53(1) Subject to this Act, every person who is qualified as an elector is entitled to have
his name included in the list of electors for the polling division in which that person is
ordinarily resident on the enumeration date for the referendum and to vote at the polling
station established therein.
55(1) The rules in this section and sections 56 to 59 and 62 apply to the interpretation
of the expressions “ordinarily resident” and “ordinarily resided” in any section of this Act in
which those expressions are used with respect to the right of a voter to vote.
(2) Subject to this section and sections 56 to 59 and 62, the question as to where a person
is or was ordinarily resident at any material time or during any material period shall be
determined by reference to all the facts of the case.
(3) The place of ordinary residence of a person is, generally, the place that has always
been, or that the person has adopted as, the place of his habitation or home, and to which
he intends to return when he is away from it.
(4) Where a person usually sleeps in one place and has his meals or is employed in
another place, the place of his ordinary residence is where the person sleeps.
(5) A person can have only one place of ordinary residence and it cannot be lost until
another is gained.
Haig deposed that he resided in Ottawa from June 18, 1989 until August 1992 when
he moved to Hull, Quebec. Thus he did not qualify to vote in the Quebec referendum
because he had not been a resident of that province for the requisite statutory period of
six months. It must be remembered that Haig did not seek to challenge the validity of the
Quebec legislation. Rather he sought to be enfranchised pursuant to the provisions of the
federal Act.
My colleague [L’Heureux-Dubé J] takes the position that Haig, when he moved to Hull,
lost his Ontario residency for voting purposes. With respect, I think the Chief Electoral
Officer could well have come to a different conclusion.
At the outset, it must be remembered that originally the right to vote was tied to
ownership of property. A person owning property in several ridings could cast a vote in
each of them. The provisions pertaining to residency were aimed at preventing “plural
voting” by prohibiting property owners from voting in more than one riding. The resi-
dency requirement was designed to facilitate the attainment of the principle of one person
one vote. It should not be used too readily as a means of depriving a person of any right
to vote.
The residential requirement was considered in Re Provincial Elections Act (1903), 10
BCR 114 (SC en banc). This case was concerned with persons who were temporarily
outside the province but who nonetheless wished to be sworn as voters. Walkem J stated
(at pp. 120-21):
It is a rule that franchise Acts should be liberally construed. The object of the Elections Act
is to enfranchise and not disfranchise, persons who possess the necessary qualifications for
being placed on the Voters’ List; and hence the Act should, if possible, be so construed as to
forward that object. …
This approach had been earlier affirmed by the Ontario Court of Appeal in Re Voters’
List of the Township of Seymour (1899), 2 Ont. Elec. 69 where, with respect to harvesters,
MacLennan JA held: “… temporary absence, even of very considerable duration, is not
inconsistent with continuous residence, where the franchise is concerned.” (pp. 74-75)
This repetition of the principle of enfranchisement coupled with a recollection of the
historical object of the residency requirement provides a useful point of commencement
for considering the key phrase “ordinarily resident.” The Canada Elections Act deals spe-
cifically with various specific aspects of residency as well as the general rule to be applied
in determining a voter’s residence. For example, the residence of summer residents is
determined by s. 57; that of students and migrant workers in s. 58; those in charitable
missions by s. 59 and members of Parliament by s. 60. The general residency rule is
expressed under s. 55(2). It provides that the ordinary residence of a voter “shall be
determined by reference to all the facts of the case.” Subsections 3 and 4 of the same sec-
tion provide:
(3) The place of ordinary residence of a person is, generally, the place that has always
been, or that the person has adopted as, the place of his habitation or home, and to which
he intends to return when he is away from it.
(4) Where a person usually sleeps in one place and has his meals or is employed in
another place, the place of his ordinary residence is where the person sleeps.
Subsection 3 uses the word “generally” and subs. 4 uses the word “usually.” By the use
of these words, it can be seen that the framers of the legislation expected that there would
be exceptions to the usual residency rule. Human existence itself is transitory. The resi-
dence of human beings is even more so. It is seldom that a Canadian can now be referred
to as “a lifetime resident of such and such a district.” Ours is now a highly mobile society
whose members will frequently move about the country. This mobility does not mean
that the right to vote should be considered any less important than it was in earlier times.
Indeed if a modern democracy is to function effectively the right is even more precious
than before. Our whole concept of residency must be more flexible than ever before. It
follows that the term “ordinarily resident” in an enfranchising statute should be inter-
preted broadly in the context of today’s mobile society and in the light of the vital import-
ance of the right to vote.
The case which in my view demonstrates the proper approach that should be taken to
residency as it pertains to the right to vote is Hipperson v. Newbury District Electoral
Registration Officer, [1985] QB 1060 (CA). In that case the English Court of Appeal
determined that the nuclear protesters who were camped outside the Greenham Common
air base were residents of that district. The court came to this conclusion despite the
obviously temporary nature of this town of tents. Sir John Donaldson MR found that the
issue of the permanence of a settlement was a question of fact and degree. At page 1073
he wrote:
Permanence, like most aspects of residence, is a question of fact and degree. … All human
affairs have a degree of impermanence, the precise degree being best forecast in the light of
experience.
Another example of the flexibility which must be given to the concept of residence is
presented by the much older case of Re Fitzmartin and Village of Newburgh (1911), 24
III. Residence 201
OLR 102 (Div. Ct.). Fitzmartin lived on a farm. The farm was located partly in one muni-
cipality while the farmhouse was in another. Middleton J sensibly held (at p. 104):
“Residence” is a word of very elastic meaning … the “residence” required by the statute is not
governed by such narrow considerations, but is such a residence as can be fairly regarded as
giving the voter the right to be entered as a citizen of the municipality in question. [emphasis
added]
Turning to more recent Canadian cases, Tenold v. Chapman (1981), 9 Sask. R 278 (QB),
held that a person who had been living in Ottawa since 1974, first as an MP for a Sas-
katchewan riding and subsequently as a senatorial assistant was, for voting purposes, to
be deemed ordinarily resident in Saskatchewan. The court balanced the facts presented.
For example, although the applicant rented and maintained a small apartment in Ottawa,
had a bank account in that city and obtained and used a province of Ontario health card,
his relationship to Saskatchewan was such that he could properly be found to be ordinarily
resident in that province.
In the case of Fells v. Spence, [1984] NWTR 123 (SC), the term “ordinarily resident”
for electoral purposes was again considered. An application was brought to strike Spence
as a candidate on the grounds that he did not meet the residency requirements. Spence
had moved to the Territory with his family when he was ten years old. However he left
to attend university, travel and work. In 1976 he declared himself a resident of Kingston,
Ontario, in order to run for mayor. Later he worked as an assistant to a cabinet minister
in Ottawa for three years. However he frequently travelled to Yellowknife and stayed with
his parents on those occasions. He expressed the intention of returning to live perma-
nently in Yellowknife. He held a territorial driver’s licence and health insurance card. In
those circumstances it was held that he complied with the residential requirement.
Marshall J appropriately held (at p. 130):
In my view, “ordinarily resident” under the Elections Ordinance of the Northwest Territories
ought to be generously interpreted. … If a man or woman can reasonably, on all the facts,
fit within the statute, then let that person run. Democracy wants candidates.
These cases demonstrate the appropriate approach that courts should take to the concept
of residence as a requirement of exercising the right to vote.
I note as well that it has been very sagely written that any scheme of enumerating voters
should be drawn up with a view to insuring that the right to vote is given to the greatest
possible number of eligible voters. T.H. Qualter in The Election Process (1970), at p. 21,
observed that an ideal enumeration scheme is one administered so as to maximize eligibil-
ity. In Canada, the Chief Electoral Officer has been remarkably successful in this regard.
In parliamentary elections approximately 98 percent of the eligible voters are registered
and there would appear to be very little if any administrative disenfranchisement (Boyer,
supra [Election Law in Canada: The Law and Procedure of Federal, Provincial and Terri-
torial Elections, vol 1 (Toronto: Butterworths, 1987)], at p. 426). I can see no reason for
departing from this approach and practice under the Referendum Act [SC 1992, c 30].
The very nature of the Referendum Act encourages a very broad view of residence. In a
parliamentary election, the location of votes can make a substantial difference in the elec-
tion of a candidate in each riding. That is not true of a federal referendum where the exact
location of any ballot is much less important. Further, the argument made in favour of
residential requirements as providing an indication that the voter is reasonably acquainted

with local issues and candidates is obviously not present in a referendum where all Can-
adians are called upon to vote on a question that transcends riding boundaries.
In my view, it would be wrong to automatically hold that those who had moved to
Quebec before the referendum enumeration date could, on that basis alone, be denied
the right to vote in a federal polling division outside Quebec. They could still properly
exercise this franchise if it could possibly be said that they retained a substantial connec-
tion to a polling division within the federal referendum area. They could well be found
to be “ordinarily resident” for the purpose of voting depending on the factual evidence
placed before electoral officials. It can never be forgotten that the term “ordinarily resi-
dent” must be given a broad and liberal interpretation with a view to enfranchising the
voter. It would be completely contrary to the objects of the Canada Elections Act and our
concept of democratic government if rigid rules were applied too quickly and disenfran-
chised Canadians desirous of voting in a referendum without real justification. The
connections of Haig to an Ottawa riding or any other riding within the federal referendum
area should have been explored in this case. His move to Hull should not have had the
automatic result of depriving him of his right to vote. However, it is impossible to deter-
mine the exact policy of the Chief Electoral Officer on this issue. The appellant chose to
move directly before the courts without first seeking to be enumerated in a polling division
within the federal referendum area where it could well have been found that he retained
sufficient ties to enable him to vote.
The Referendum Act, through its incorporation of the provisions of the Canada Elec-
tions Act, provides that once an initial voter’s list is drawn up citizens can then seek to
have their names added to it. It is significant that this first list is referred to as “prelimin-
ary” (see s. 65(1)). The revision of the list takes place before a “revising officer” acting as
a justice of the peace (s. 68 and Sch. IV, rules 42 et seq.). At this stage a person may apply
to be included. The appellant did not avail himself of this procedure.
He undoubtedly took this course because of his intention to seek a ruling that would
treat all persons who had moved to Quebec within six months of the referendum voting
date as a class of voters entitled to enfranchisement. Unfortunately, this makes it impos-
sible for the court to determine whether, under the requisite flexible test of residency, the
appellant was qualified to cast his vote in the federal referendum area. There is simply no
evidence upon which a finding could be made that he retained the necessary connection
to a federal polling division to enable him to vote. Had the referendum not been held it
might have been appropriate to remit the matter to a revising officer for an examination
of the facts. This no longer can be done.
Nor should declaratory relief be granted. It is true that often the judicial interpretation
of a statute can lead to the granting of a declaratory order by the court. Nonetheless,
declaratory relief is a matter of discretion which should only be exercised in a clear case.
The referendum is now long past and in the circumstances presented in this case declara-
tory relief should not be granted.
III. Residence 203
NOTES
1. The principal judgment in the case was delivered by L’Heureux-Dubé J. She took a very
different approach to the statutory interpretation issue from Cory J. However, after reading
his reasons, she expressed herself to be in full agreement with his approach to the interpret-
ation of enfranchising statutes and the meaning of ordinary residence in that context.
Iacobucci J dissented, concluding that the federal legislation was aimed at a national refer-
endum, and that, while the purpose of the Referendum Act was to include all voters, the
effect was to deprive those in the position of Haig of the ability to participate in expressive
activity protected under s 2(b) of the Charter. Lamer CJ also dissented, stating that, while he
agreed with Cory J with respect to the proper approach to the definition of residency, he
also agreed with Iacobucci J concerning s 2(b) of the Charter. McLachlin J delivered separate
reasons in which she said she would have agreed with Iacobucci J had she been able to
conclude that the federal law had enacted a truly national referendum.
2. Almost 200 years ago, James LJ wrote in Ex parte Breull: Re Bowie (1880), 16 Ch D 484 at
487 (CA):
[T]he words “residence” and “business” have no actual definite technical meaning but … you
must construe them in every case in accordance with the object and intent of the Act in which
they occur.
Much more recently, Hughes J stated in Hussain v Canada (Minister of Public Safety & Emer-
gency Preparedness), 2008 FC 234 at para 18:
In law, the word “resident” or “residence” is one that must be considered carefully having regard
to all the circumstances. There is no precise or single meaning. Residence is not to be confused
with temporary move or sojourn.
3. In Lavallee v Ferguson, 2016 FCA 11, the Federal Court of Appeal was required to inter-
pret a provision in the Cowessess First Nation #73 Custom Election Act requiring an elected
chief to take up permanent residency on the Home Reserve within three months of assum-
ing office. The evidence showed that the chief had made ongoing and legitimate efforts to
take up physical residence on the reserve, but had been frustrated in his efforts by other
members of the band. The Band Council declined to order a by-election, but this was
reversed by the Federal Court. On appeal, the Federal Court of Appeal concluded (at para 29)
that “it was reasonable for the Band Council, in declining to order a by-election, to in effect
interpret the Election Act—which forms part of Cowessess First Nation law—and the ‘take up
permanent residence’ provision contained in sections 5.01 and 12.03 in particular, in a way
that recognized the unusual, even extraordinary, circumstances of this case.” The court
cautioned that courts should “hesitate to interfere with the duly elected Band Council’s
application of the Election Act in its efforts to govern its affairs when confronted with such
extraordinary circumstances” and observed that the Federal Court, in failing to take account
of those circumstances, “did not show sufficient deference to the Band Council’s decision”
(at para 30).
IV. CORPORATIONS
National Trust Company Limited v Ebro Irrigation and

Power Company Limited
[1954] OR 463, [1954] 3 DLR 326 (SC)
SCHROEDER J: … It is well established that the domicile of a corporation is in the country

in which it was incorporated. In Cheshire on Private International Law, 4th ed. 1952, at
pp. 193-4, it is stated that:
Questions concerning the status of a body of persons associated together for some enterprise,
including the fundamental question whether it possesses the attribute of legal personality,
must on principle be governed by the same law that governs the status of the individual, i.e.
by the law of the domicil. What this law is admits of no doubt if we reason upon the analogy
of the individual. Every person, natural and artificial, acquires at birth a domicil of origin
by operation of law. In the case of the natural person it is the domicil of his father, in the case
of the juristic person it is the country in which it is born, i.e. in which it is incorporated.
• • •
In Gasque v. Commissioners of Inland Revenue, [[1940] 2 KB 80], Macnaghten J quotes

from a judgment of Holmes J in Bergner & Engel Brewing Company v. Dreyfus (1898), 70
Am. St. Rep. 251, as follows: “A corporation has its domicil in the jurisdiction of the state
which created it, and, as a consequence, has no domicil anywhere else.”
In Baroness Wenlock v. River Dee Company (1887), 36 Ch. D 674 at 685, Bowen LJ
stated: “What you have to do is find out what this statutory creature is and what it is meant
to do; and to find out what this statutory creature is you must look at the statute only,
because there, and there alone, is found the definition of this new creature.” …
And as was stated by Macnaghten J in the Gasque case at p. 84: “The domicil of origin,
or the domicil of birth, using with respect to a company a familiar metaphor, clings to it
throughout its existence.”
It follows that the instrument of incorporation and the law of a corporation’s domicile
govern not only its creation and continuing existence, but also all matters of internal
management, the creation of share capital, and related matters, so that to determine
questions affecting the status of a Canadian company and matters relating to its internal
management reference must be had not only to the letters patent creating it and any sup-
plementary letters patent and its by-laws but also to the powers and duties of the directors
as set forth in s. 92 of The Companies Act, RSC 1952, c. 53. …
The principle enunciated above is very clearly stated in 20 Corpus Juris Secundum,
1940, s. 1802, pp. 21-3:
Every corporation necessarily carries its charter wherever it goes, for that is the law of its
existence. Whatever disabilities are thereby placed upon the corporation at home it retains
abroad, and whatever legislative control it is subjected to at home must be recognized and
submitted to by those who deal with it elsewhere with knowledge of such limitations. Hence,
a corporation can exercise no powers in a state other than that of its creation except such as
are conferred upon it by its charter and the laws creating and governing it; and this principle
applies even as to the mode in which, or the officers or agents by whom, a corporation is
IV. Corporations 205
required by its charter provisions or by the law of its corporate domicile to contract or act.
Furthermore, subject to certain well-established exceptions, considered infra … , the rule is
fairly general that a corporation is subject in other jurisdictions even to the general laws of
the state of its creation, where such laws are intended as restrictions upon the powers of the
corporation.
In accordance with the foregoing rules, it is held that a corporation’s charter and the laws
of its domicile govern with respect to the fact and duration of the existence of the corpora-
tion, its internal affairs and management, its capacity to sue, the authority of its directors to
represent it or to bring an action, its power to make particular contracts, the validity of
conveyances of corporate property, the corporation’s right to issue stock, its right to guarantee
dividends upon stock, the validity of transfers of its stock, and the validity of bonus stock
issued to directors.
Apart from burdens which may be imposed upon them by the laws of a state which a
foreign corporation enters and in which it undertakes to do business, considered infra … ,
the rights and liabilities of stockholders and directors are determined by the charter and
governing laws of the state in which the corporation is created.
• • •
The law of a company’s domicile also governs as to the persons who are entitled to act
as directors of that corporation and the manner of their selection. On this point reference
may be made to Banco De Bilbao v. Sancha; Same v. Rey, [1938] 2 KB 176, [1938] 2 All
ER 253.
NOTES
1. Under art 307 of the Civil Code of Quebec, the “domicile of a legal person is at the place
and address of its head office,” which may not always coincide with the place under whose
laws it is constituted. However, in line with the approach reflected above, art 3083 (para 2)
of the Code provides that the “status and capacity of a legal person are governed by the law
of the State under which it is constituted, subject, with respect to its activities, to the law of
the place where they are carried on.”
2. In general, the jurisdiction under the law of which a corporation is constituted is the
proper forum for litigation relating to the corporation’s internal management and affairs: see
e.g. Gould v Western Coal Corp, 2012 ONSC 5184 at paras 319-339; Ironrod Investments Inc v
Enquest Energy Services Corp, 2011 ONSC 308; and Takefman c Golden Hope Mines Ltd, 2015
QCCS 4947.
3. While the status and internal affairs of a corporation are governed by the law of its
domicile, most jurisdictions have enacted legislation requiring a foreign corporation, as a
condition of carrying on business locally and using local judicial and other legal processes,
to be registered or licensed locally, to disclose certain information, and to nominate an in-
province agent to accept service of process and other official notices: see e.g. Extra-Provincial
Corporations Act, RSO 1990, c E.27.
4. The registered head office or place of incorporation of a corporation may have no real
or substantial connection with its actual place of business and activities, having been chosen
for other reasons. Accordingly, “residence” is the principal criterion used to determine the
liability of corporations to taxation on their world income under the Income Tax Act. The
statute does not define the term. In general, reliance is placed on common law principles
under which a corporation is resident for taxation purposes in the country in which its cen-
tral management and control is exercised:
A company cannot eat or sleep but it can keep house and do business. We ought, therefore, to
see where it really keeps house and does business. … [A] company resides for purposes of
income tax where its real business is carried on … and the real business is carried on where the
central management and control actually abides. … This is a pure question of fact to be deter-
mined, not according to the construction of this or that regulation or bye-law, but upon a
scrutiny of the course of business and trading.
De Beers Consolidated Mines Limited v Howe, [1906] AC 455 at 458 (HL), Lord Loreburn.
In Fundy Settlement v Canada, 2012 SCC 14, [2012] 1 SCR 520, the Supreme Court of Canada
confirmed that the residence of a trust will be determined by the principle that, for purposes
of the Income Tax Act, a trust resides where its real business is carried on, which is where the
central management and control of the trust actually takes place: see further Income Tax
Folio S6-F1-C1, Residence of a Trust or Estate; see generally Hogg, Magee & Li.
5. The concept of corporate residence used for income tax purposes is not generally
applied outside that context. Rather, the term should be interpreted purposefully and vari-
ably, depending on the legal context in which the issue arises. Where the legal context
relates to the general activity of the corporation, it may be that it will be considered resident
in any jurisdiction where it carries on business through an establishment: see Canada Life v
CIBC, [1979] 2 SCR 669; see also Spar Aerospace Ltd v American Mobile Satellite Corp, [1998] RJQ
2802 (SC), and Montréal (Ville) c Dinasaurium Production Inc, [1999] RJQ 2563 (CA).
6. The Court Jurisdiction and Proceedings Transfer Act, promulgated by the Uniform Law
Conference in 1994 and now in force in various provinces (see Chapter 6), adopts “ordinary
residence” as a basis for in personam judicial jurisdiction over both individuals and corpora-
tions. The term “ordinary residence” is not defined, but guidance is provided for a corpora-
tion, partnership, or unincorporated association (ss 7-9). Thus, British Columbia’s Court
Jurisdiction and Proceedings Transfer Act, SBC 2003, c 28, states with respect to corporations:
7 A corporation is ordinarily resident in British Columbia, for the purposes of this Part, only if
(a) the corporation has or is required by law to have a registered office in British Columbia,
(b) pursuant to law, it
(i) has registered an address in British Columbia at which process may be served
generally, or
(ii) has nominated an agent in British Columbia upon whom process may be served
generally,
(c) it has a place of business in British Columbia, or
(d) its central management is exercised in British Columbia.
However, jurisdiction may exist over a defendant entity that does not satisfy these criteria
if the lesser presence is accompanied by activity within the jurisdiction relating to the cause
of action:
10 Without limiting the right of the plaintiff to prove other circumstances that constitute a
real and substantial connection between British Columbia and the facts on which a proceeding
is based, a real and substantial connection between British Columbia and those facts is pre-
sumed to exist if the proceeding
• • •
V. The Principle of Proximity 207
(e) concerns contractual obligations, and

(i) the contractual obligations, to a substantial extent, were to be performed in Brit-
ish Columbia, [or]
• • •
(h) concerns a business carried on in British Columbia.
7. In Club Resorts Ltd v Van Breda, 2012 SCC 17, [2012] 1 SCR 572, the Supreme Court of
Canada concluded that domicile, residence, or carrying on business within the jurisdiction
were all presumptive connecting factors for the purpose of exercising assumed jurisdiction
in tort actions under the common law “real and substantial connection” approach: see
paras 86, 87, and 90. Justice LeBel did not elaborate on the meaning of domicile or residence
but appeared to assume that, “in the case of a legal person,” both terms referred to “the
location of its head office”: see para 86. With respect to “carrying on business,” he thought
that this generally required “some form of actual, not only virtual, presence in the jurisdic-
tion, such as maintaining an office there or regularly visiting the territory of the particular
jurisdiction”: see para 87. He also observed that jurisdiction could be “based on traditional
grounds, like the defendant’s presence in the jurisdiction” (see para 79) without explaining
the meaning of “presence” in this latter context.
In Chevron Corp v Yaiguaje, 2015 SCC 42, the court clarified that for the purpose of trad-
itional presence-based jurisdiction against corporate defendants, presence should be
equated with “carrying on business” in the forum seeking to assert jurisdiction. Although the
meaning of “carrying on business” was a question of fact, the concept generally required
some form of direct or indirect presence accompanied by some degree of sustained activity
such as maintaining a physical office: see para 85. If service was effected within the jurisdic-
tion on a corporate defendant carrying on business in this sense, there was no need for an
additional connection between the underlying dispute and the defendant’s presence within
the jurisdiction: see paras 84 to 87. On the other hand, for the purposes of assumed jurisdic-
tion over a defendant served outside the jurisdiction, the availability of “carrying on busi-
ness” as a presumptive connecting factor, and, if available, the circumstances in which it
might be rebutted, might vary depending on the nature of the cause of action: see para 91.
V. THE PRINCIPLE OF PROXIMITY

If the ascertainment of one’s personal law is ultimately a fact- and context-specific exercise,
where is the “intellectual economy” in retaining the concept of domicile or variations on the
concept of residence? Why not simply apply the principle of proximity under which an indi-
vidual’s personal law would be the law of the jurisdiction to which he or she is most substan-
tially connected for the purpose of the issue at hand? See Carter; Walker at para 4.16; and
Fentiman (1986). “Real and substantial connection” has been accepted by the legislature as
an appropriate jurisdictional connecting factor for persons in some contexts: see e.g.
ss 22(1)(b)(v) and 41(2)(b)(iv) of the Children’s Law Reform Act, RSO 1990, c C.12, in relation to
custody and access orders, and s 26(d) of the Family Maintenance Act, CCSM c F20, in relation
to the recognition of extraprovincial determinations of paternity. Recall also the proposal of
the English and Scottish Law Commissions to use a substantial connection test to determine
the domicile of children and of persons lacking the mental capability to form the requisite
intention to establish a domicile.
VI. SELECTED BIBLIOGRAPHICAL REFERENCES

Acorn, Annalise. “Gender Discrimination in the Common Law of Domicile and the Applica-
tion of the Canadian Charter of Rights and Freedoms” (1991) 29 Osgoode Hall LJ 419.
Applegate, K. “Stifel v. Hopkins Revisited: Domicile and the Effects of Compulsion” (2001) 32
Rutgers LJ 583.
Atkin, Bill. “The Domicile Act 1976” (1977) 7 NZULR 286.
Brierley, John EC & Roderick A Macdonald, eds. Quebec Civil Law: An Introduction to Quebec
Private Law (Toronto: Emond Montgomery, 1993).
Canada Revenue Agency. Income Tax Folio S5-F1-C1, Determining an Individual’s Residence
Status (26 November 2015).
Carter, PB. “Domicil: The Case for Radical Reform in the United Kingdom” (1987) 36 ICLQ 713.
Cavers, David F. “ ‘Habitual Residence’: A Useful Concept?” (1972) 21 Am U L Rev 475.
Corr, John Bernard. “Interest Analysis and Choice of Law: The Dubious Dominance of Domi-
cile” (1983) Utah L Rev 651.
Corson, Christopher. “Reform of Domicile Law for Application to Transients, Temporary Resi-
dents, and Multi-based Persons” (1981) 16 Colum JL & Soc Probs 327.
Fawcett, James. “Result Selection in Domicile Cases” (1985) 5 Oxford J Leg Stud 378.
Fawcett, James & Janeen Carruthers. Cheshire, North & Fawcett Private International Law, 14th
ed (Oxford: Oxford University Press, 2008).
Fentiman, Richard. “Activity in the Law of Status: Domicile, Marriage, and the Law Commis-
sion” (1986) 6 Oxford J Leg Stud 353.
Fentiman, Richard. “Domicile Revisited” (1991) 50 Cambridge LJ 445.
Ferrière, Claude de. La jurisprudence du code de Justinian: Conférée avec les ordonnances roy-
aux, les coutumes de France, et les décisions des cours souveraines (Paris: Jean Cochart, 1684).
Forsyth, Christopher. “The Domicile of the Illegal Resident” (2005) 1 J Priv Intl L 335.
Gaius, Edward Poste, Edward Arthur Whittuck, AHJ Greenidge & Francis de Zulueta. Gai
Institutiones, or, Institutes of Roman Law (Oxford: Clarendon Press, 1904).
Halpern, Jack V. “Residence or Domicile: A State of Mind? (Case Comment: Glow v. The Queen,
92 DTC 6467; [1992] 2 CTC 245 (FCTD))” (1993) 41 Can Tax J 129.
West, 2010).
Hogg, Peter W, Joanne E Magee & Jinyan Li. Principles of Canadian Income Tax Law, 8th ed
(Toronto: Carswell, 2013) ch 3, Residence.
Kaufman, D. “Fiscal Residence of Corporations in Canada” (1984) 14 RD Université de Sher-
brooke 509.
VI. Selected Bibliographical References 209
Kaye, P. “The Meaning of Domicile Under United Kingdom Law for the Purposes of the 1968
Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Com-
mercial Matters” (1988) 35 Nethl Intl L Rev 181.
Lam, Mary. “Annotation, Re Koo” (1992) 19 Immig L Rep (2d) 2.
Law Commission. Private International Law: The Law of Domicile (Law Com No 168) (Scot Law
Com no 107) (London: Her Majesty’s Stationery Office, 1987).
Manitoba Law Reform Commission. Report on the Law of Domicile (Winnipeg: The Commis-
sion, 1982).
McClean, JD. “The Meaning of Residence” (1962) 11 ICLQ 1153.
McEleavy, P. “Regression and Reform in the Law of Domicile” (2007) 56 ICLQ 453.
North, Peter. “Domicile” in Private International Law Problems in Common Law Jurisdictions
(Dordrecht, Netherlands: Martinus Nijhoff, 1993) ch 1.
Nygh, Peter. Conflict of Laws in Australia, 6th ed (Sydney: Butterworths, 1995).
Nygh, Peter. “The Reception of Domicil into English Private International Law” (1961) 1 Tas-
manian U L Rev 555.
Oda, H. Basic Japanese Laws (Oxford: Clarendon Press, 1997).
Pilkington, MP. “Illegal Residence and the Acquisition of a Domicile of Choice” (1984) 33
ICLQ 885.
Poste, Edward. Elements of Roman Law, 3rd ed (Oxford: Clarendon Press, 1890).
Rafferty, Nicholas. “Domicile: The Need for Reform” (1977) 7 Man LJ 203.
Reese, Willis LM. “Does Domicil Bear a Single Meaning?” (1955) 55 Colum L Rev 589.
Reese, Willis LM & Robert S Green. “That Elusive Word, ‘Residence’ ” (1953) 6 Vand L Rev 561.
Romañach, Julio Jr. Civil Code of Spain (Baton Rouge, La: Lawrence Publishing Co., 1994).
Smart, P StJ. “Domicile of Choice and Multiple Residence” (1990) 10 Oxford J Leg Stud 572.
Taleghany, MAR. The Civil Code of Iran (Littleton, Colo: Fred B Rothman & Co, 1995).
Trakman, Leon. “Domicile of Choice in English Law: An Achilles Heel?” (2015) 11 J Priv Intl L
317.
Wade, JA. “Domicile: A Re-Examination of Certain Rules” (1983) 32 ICLQ 1.
Canada, 2005) (loose-leaf).
Weintraub, Russell J. “An Inquiry into the Utility of ‘Domicile’ as a Concept in Conflicts Analy-
sis” (1965) 63 Mich L Rev 961.
Weintraub, Russell J. Commentary on the Conflict of Laws, 2nd ed (Mineola, NY: Foundation
Press, 1980).
Winter, LI de. “Nationality or Domicile?” (1969) 128 Rec des Cours 349.
Wurfel, Seymour W. “Jet-Age Domicil: The Semi-Demise of Durational Residence Require-
ments” (1975) 11 Wake Forest L Rev 349.
Yiannopoulos, Athanassios N. “Wills of Movables in American International Conflicts Law: A
Critique of the Domiciliary ‘Rule’ ” (1958) 46 Cal L Rev 185.
PA R T T W O
Jurisdiction
CHAPTER SIX
Jurisdiction in Personam
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
II. Parties to an Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
A. Plaintiffs: Standing to Sue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
B. Immunities from Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
III. Circumstances Justifying Assumption of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
A. Jurisdiction Simpliciter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
1. Defendants Within the Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
2. Defendants Outside the Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
B. Class Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
IV. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
I. INTRODUCTION
This chapter deals exclusively with the rules and principles governing one form of jurisdic-
tion—jurisdiction in personam. Matrimonial causes, probate and administration, and actions
involving title to immovable property, inter alia, are governed by special jurisdictional rules
addressed in subsequent chapters.
The common law provinces still adhere generally to the inherited English approach to
jurisdiction. That model consists of jurisdictional rules modified by a discretion to decline to
exercise jurisdiction in a particular case. The common law courts may also exercise discretion
to prohibit commencement or continuation of an action elsewhere. This chapter focuses on
the rules relating to the existence of jurisdiction or, as it has come to be called, the issue of
jurisdiction simpliciter. In those provinces that have enacted the Court Jurisdiction and Pro-
ceedings Transfer Act (reproduced below in Section III.A.2, “Defendants Outside the Jurisdic-
tion”), the same issue is referred to as territorial competence. The principles governing
discretion, known as forum non conveniens, are articulated in the material in the Chapter 7.
Nevertheless, although the contours of the English model can be detected in each of the
provinces, there are significant differences in the content and operation of the laws among
the provinces. Each province has its own set of rules describing the circumstances in which
the courts of that province will have jurisdiction. Sometimes those rules are located in the
rules of court; sometimes they are located in statutes. Wherever they are located, the juris-
dictional rules must comply with the constitutional standard enunciated in Morguard Invest-
ments Ltd v De Savoye [1990] 3 SCR 1077, 76 DLR (4th) 256, and confirmed in Club Resorts Ltd v
Van Breda, 2012 SCC 17, [2012] 1 SCR 572 (reproduced in Chapter 3). Moreover, all Canadian
provinces have abandoned the English model of the ex parte application for permission to
213
214 Chapter 6 Jurisdiction in Personam
serve process ex juris; a plaintiff may serve process on a defendant outside the province “as
of right” if the claim falls within the provincial jurisdictional rules.
II. PARTIES TO AN ACTION

For material on parties generally, see Chapter 11, Law of Procedure.
There are some persons whose status prohibits them from bringing an action and there
are some whose status confers immunity from action. These are matters of forum procedural
law and are preliminary considerations.
A. Plaintiffs: Standing to Sue

Provincial statutory laws may require companies incorporated outside the province,
whether elsewhere in Canada or in some non-Canadian jurisdiction, to register if they plan
to carry on business in the province. The carrying on of business is legally defined. One
means of encouraging such companies to comply with the registration requirements is to
impose penalties of varying kinds. In the case below, for example, a New York corporation
that had entered into a contract with an Ontario company was found on the facts to be
carrying on business in Ontario such that it could not maintain an action in Ontario without
being licensed.
Success International Inc v Environmental Export

International of Canada Inc
(1995), 23 OR (3d) 137, 123 DLR (4th) 147 (Gen Div)
MacPHERSON J:
Success’s ultimate submission, based on the case law, is that the contract between it
and EEI is a single or isolated transaction (Linde) that happened to take place in Ontario
but does not go so far as to constitute carrying on business within Ontario (John Deere
Plow). Although this submission is not without merit, in my view it must fail. I reach this
conclusion for several reasons.
First, although the Success-EEI relationship is based on a single contractual trans-
action, the magnitude and duration of the transaction, and the activities associated with
it, distinguish it from the simple transactions considered in the cases relied upon by
Success. In Linde, there was a contract for the installation of machinery ordered from
outside Saskatchewan. In Euclid, the extra-provincial corporation simply took a mortgage
on one piece of land in Ontario. And in Pacific Fruit, the transaction was a sale of goods
by correspondence through a broker. In John Deere, the goods were shipped from Win-
nipeg to Calgary; there was no certainty that they would even reach British Columbia.
The Success-EEI contract, on the other hand, contemplated a minimum of almost six
months (with extensions also contemplated and provided for in the contract) of hard
work by both companies in Kitchener, Ontario. A great deal of heavy and sophisticated
tire manufacturing material must be assembled, organized, refurbished and packed at the
II. Parties to an Action 215
site in Kitchener. It is true that EEI plays the lead role in many of these activities. However,
Success’s role is both extensive and continuous.
The record before me establishes clearly how deeply involved Success is in the activities
unfolding in Kitchener. Success has its own office there. It is a large office, occupying about
4,000 sq. ft. Success pays rent of $2,100 per month for the office. Success has prepared
and utilizes documents (e.g., letter paper, packing slips) with its corporate name and the
Kitchener office address on them. The office is equipped with telephones, a fax machine
and other equipment.
Success also has a large staff working at the Kitchener site. Success’s records indicate
that it has employed either 22 or 24 people in performing its part of the contract. Some
of those people are highly qualified professionals, including engineers. At least nine,
including Mr. Anderson, the engineer in charge, have been brought in from New York
and Ohio. In his affidavit, the President of Success, John Shaw, affirmed:
Currently, Success has on contract, 22 persons working on this project. I verily believe that
EEI has no more than 20 people dedicated to this project.
Moreover, Shaw has himself visited the Kitchener site, as he affirmed in his affidavit, “many
times, for several days at a time.”
Success’s response to this picture of major business activity on its part in Kitchener is
to allege that much of the activity has been required by EEI’s unwarranted delays in
performing its contractual obligations. However, the record indicates otherwise. Success
rented its office space early in the anticipated life of the contract, Mr. Anderson has been
in full-time attendance in Kitchener since the start of the contract, and he affirmed in his
affidavit that Success has had “sufficient staff on site since June, 1993,” which is the month
when the contract was signed.
I find it instructive that in their affidavits both Mr. Shaw and Mr. Anderson use the
word “project” to describe Success’s activities in Kitchener pursuant to the contract.
Moreover, Mr. Shaw uses the word “team” to describe Success’s participants in the activi-
ties. I believe that these are words which accurately describe Success’s role in the fulfilment
of the contract. The contract is not a simple transaction like the one-time purchase dis-
cussed in some of the cases. Rather, it is a large, long-term, sophisticated commercial
project which requires both corporate parties to devote a great deal of time, effort, person-
nel and corporate leadership to it.
Second, it will be recalled that the definition provision in the Extra-Provincial Corpor-
ations Act contains both positive and negative components. Section 1(2) defines what is
“carrying on business” and s. 1(3) says what is not. In my view, the language of both
subsections points towards inclusion of Success’s activities within the definition. I admit
that the wording in s. 1(2)(a) is somewhat circular. Nevertheless, having an office in
Ontario is one of the indicia of carrying on business and Success has a large office in
Kitchener. Moreover, s. 1(c) (“it otherwise carries on its business in Ontario”), although
circular, nevertheless suggests that the legislature intended that the notion of carrying on
business should be broadly interpreted to cover situations not within the legislature’s
contemplation when the statute was enacted.
Turning to s. 1(3), it sets out explicitly some situations that do not constitute carrying
on business:
1(3) An extra-provincial corporation does not carry on its business in Ontario by reason
only that,
(a) it takes orders for or buys or sells goods, wares and merchandise; or
(b) offers or sells services of any type,
by use of travellers or through advertising or correspondence.
These are a small number of very narrow exceptions and they are not defined inclu-
sively. Accordingly, the inference I draw is that the legislature recognized that some
commercial transactions engaged in by extra-provincial corporations should not attract
the licensing requirements of the Extra-Provincial Corporations Act. However, both the
decision by the legislature to enumerate specifically some exceptions and the actual
content of the exceptions suggest that most commercial transactions and activities with
some nexus in Ontario were intended to attract the responsibilities imposed by the Act.
Third, in a leading case in the domain of commercial contract law, Consolidated-Bathurst
Export Ltd. v. Mutual Boiler and Machinery Ins. Co. (1979), 112 DLR (3d) 49, [1980] 1 SCR
888, [1980] ILR ¶1-1176, Estey J spoke of interpreting a contract in a way which “promotes
a sensible commercial result” (p. 58). In the present case, there are both a commercial
contract and a corporate statute to interpret. Nevertheless, in my view, Estey J’s admoni-
tion is equally relevant.
What is the sensible commercial result in this case? I think it is the conclusion that a
New York company which opens a large office in Kitchener, furnishes it with equipment
and supplies, brings in from Ohio a full-time project manager, employs 22 workers,
professional and labourers, including nine brought in from the United States, labels its
workforce “a team” and its activities “a project,” and contemplates that all of this will be
in place for a minimum of almost six months (with extensions being anticipated and
provided for) is “carrying on business” in Ontario.
In Weight Watchers International Inc. v. Weight Watchers of Ontario Ltd. (1972), 31
DLR (3d) 645, 9 CPR (2d) 77, [1973] 1 OR 549 (Ont. HCJ), Lieff J said, at p. 650:
It would appear that the question of whether an extra-provincial corporation is carrying on
business within a Province is one of fact and the circumstances of each particular case are
closely examined to determine the real relationship between the extra-provincial company
and its provincial contract.
In this case, my conclusion is that the real relationship between Success, a New York
company, and its Ontario contract establishes that Success is carrying on business in
Ontario. It follows, by virtue of ss. 4(2) and 21(1) of the Extra-Provincial Corporations Act,
that it cannot maintain this application to enforce the arbitrator’s June 30, 1994 award. …
The standing of an unorganized entity is not regulated by statute, however, and so must
be resolved by the application of basic conflicts principles. Does a ruined temple have
standing to commence an action as a plaintiff? Bumper Development Corp Ltd v Commis-
sioner of Police of the Metropolis, [1991] 4 All ER 638 (CA) held that the recognition of the
legal status of a ruined Indian temple accorded by the law of the place in which it was situ-
ated did not offend English public policy. For an equivalent Canadian decision, see
III. Circumstances Justifying Assumption of Jurisdiction 217
International Association of Science and Technology for Development v Hamza 1995 ABCA 9, 28
Alta LR (3d) 125 (reproduced in Chapter 11).
B. Immunities from Suit

A claim of immunity from suit is a claim for sovereign immunity and so raises issues sound-
ing in constitutional law (Crown immunity) or in public international law (state immunity).
Such immunities are now regulated by statutes such as the Crown Liability and Proceedings
Act, RSC 1985, c C-50; Crown Proceeding Act, RSBC 1996, c 89; and State Immunity Act, RSC
1985, c S-18.
III. CIRCUMSTANCES JUSTIFYING ASSUMPTION OF JURISDICTION

A. Jurisdiction Simpliciter
Theories of territorial sovereignty give to the sovereign the right to control any person phys-
ically present in the territory. The corollary of that theory is an absence of power to regulate
persons in other jurisdictions because that would constitute an interference with the sover-
eignty of that jurisdiction. So, at common law, English courts were entitled to assume juris-
diction over any person present in England on whom a writ could be served. Service of a writ
on a defendant in England gave the English court jurisdiction as of right subject only to
discretionary principles of self-restraint.
This common law rule was expressly approved in Morguard (reproduced in Chapter 3) and
continues to apply in all the provinces that have not adopted the Court Jurisdiction and Pro-
ceedings Transfer Act (reproduced below in Section III.A.2).
1. Defendants Within the Jurisdiction
Maharanee of Baroda v Wildenstein

[1972] 2 All ER 689 (CA) (footnote omitted)
LORD DENNING MR:

The plaintiff, the Maharanee of Baroda, lives in France; but she has lived in England
for long periods, and has had many flats and large houses in this country. She is intimately
connected with English social life. She frequently visits England for considerable periods,
and has horses in training here. She has a stud farm in Ireland.
The defendant, Daniel Wildenstein, lives in Paris. He is an art dealer of international
repute. In September 1970 Paris Match published an article about him. It describes him
as the greatest art dealer in the world. The business was founded by his grandfather in
Paris and New York. It was extended by his father to London, who had a gallery in New
Bond Street and a small flat above it. Daniel Wildenstein himself succeeded to it. He was
at all material times a director of Daniel Wildenstein Ltd., the important art dealers of
147 New Bond Street in London. Mr. Wildenstein is also connected with the important
New York house of Wildenstein Inc. He has another great interest, racehorses. He has a
stud farm in Ireland, and he comes over to England from time to time for the races here.
Both the Maharanee and Mr. Wildenstein speak perfect English. In 1965 the Mahara-
nee’s son, the Prince of Baroda, was invited to go to the house of Mr. Daniel Wildenstein
at 57 rue la Boetie, Paris. He was told there were some beautiful old masters which the
Maharanee might like to purchase. At the house he was shown a painting called “La
Poésie.” It was said to be by a great French artist, François Boucher. After some negotia-
tion, the picture was purchased by the Maharanee at a sum which in English money was
put at £32,920. It was delivered to the Maharanee there in Paris—a purchase by her from
Mr. Wildenstein.
In July 1966 Mr. Wildenstein gave a certificate of authenticity and value. It was on the
notepaper of the English company—Wildenstein & Co. Ltd., 147 New Bond Street, Lon-
don W1. The directors were named as Daniel Wildenstein (French) and R. Hunter FCA.
The certificate says (translated into English):
I, the undersigned, Daniel Wildenstein, director of Wildenstein & Co. Ltd., certify that the
painting by François Boucher, “L’Étude ou la Poésie, 0.95 x 1.25 m., belonging to Her High-
ness the Maharanee of Baroda, has this day a value of 450,000 French Francs. 20th July, 1966.
Daniel Wildenstein.
The Maharanee brought the picture to England. On 6th December 1967 it was put up for
sale by Sothebys in a catalogue of important old master paintings. At the beginning of
the catalogue Sothebys set out a glossary saying that, if the forename and surname of the
artist is given, it means that, in the opinion of Sothebys it is a work by the artist. There is
a photograph of the picture. It says: “La Poésie” by François Boucher. It describes it as:
“the property of Her Royal Highness The Maharanee of Baroda—‘La Poésie,’ a girl in pale
blue and white drapery reclining, holding a book and a lyre.” That catalogue is a repre-
sentation by Sothebys that, in their opinion, it was a work by François Boucher.
The painting was not sold by Sothebys at that sale. I presume it did not reach the
reserve price. Perhaps some people had doubts about its authenticity. A little later, the
picture was shown to Mr. Francis Watson, who is the Surveyor of Her Majesty’s Works of
Art, but not of her pictures. He only saw it for a few minutes, but he is said to have
expressed the view that it was not a Boucher. In July 1968 it was put in the hands of
Christie’s, who are art dealers equal in repute to Sothebys. On 18th October 1968 Christie’s
wrote to the Maharanee’s solicitors:
In confirmation of our telephone conversation I am writing to say that in our opinion the
painting of a female allegorical figure representing poetry, which was sent to us on July 26th,
cannot be regarded as an autograph work by François Boucher, but would appear to be a
work from his immediate circle of followers. We think that it might make about £750 at
auction and in the event of the owner deciding to sell we would not recommend a reserve
of more than about £500-£600.
On 3rd September 1969 the solicitors for the Maharanee issued a writ against Mr. Wilden-
stein. The statement of claim set out the circumstances in which she bought the picture;
saying that it was represented to be by Boucher; but alleging that it was not by Boucher.
She claimed rescission and repayment to her of the money which she had paid. In the
writ, the Maharanee gave her address as Claridges in Brook Street—the hotel where she
was staying at the time. Mr. Wildenstein’s address was given as 147 New Bond Street,
because he was at that time a director of the English company.
The writ was not served on Mr. Wildenstein at that time because he was not in London.
Those advising the Maharanee waited until he came over here. In June 1970 Mr. Wilden-
stein came over for the Ascot races. On Saturday, 20th June 1970, the writ was served on
him at the race course at Ascot. His solicitors entered an appearance. They now seek to
set the writ aside. The master and the judge have set it aside. The Maharanee appeals to
this court.
In this case the writ has been properly served on the defendant in this country. This
makes the case very different from those in which the defendant is in a foreign country
and the plaintiff has to seek leave to serve him out of the jurisdiction. It is also different
from those cases in which the plaintiff has already started an action in another country,
and the question is whether he should be allowed to start another action in this country
on the same subject-matter. In this case the plaintiff has validly invoked the jurisdiction
of our courts in this, the one and only action she has brought.
[Lord Denning went on to consider whether the English court should decline to exercise
jurisdiction as a matter of discretion.]
EDMUND DAVIES LJ:

Although these proceedings have not reached the stage of delivery of a defence, we
know that, in the words used by the defendant himself in his first affidavit sworn on
September 17th 1970: “If this matter comes to trial one of the main issues in it will be the
question whether the painting ‘La Poésie’ is in fact by François Boucher or not.” Indeed,
for all we know to the contrary from such affidavit evidence as is presently available, that
may well be the only issue—apart, that is, from the matter of damages in the event of the
plaintiff succeeding in establishing liability.
The nature of the contract, the circumstances in which it was made, the supranational
nature of the dispute to which it has given rise, the identity and internationally peripatetic
habits of the parties, and the service of the writ in this action on the defendant at Ascot
on 20th June 1970, are all matters already dealt with by Lord Denning MR and call for
no further treatment by me. But one thing should be made clear: unless the plaintiff knows
full well that she has no cause of action (and that is not suggested), she did no wrong in
taking out a High Court writ in the first place (foreigner though she is) and serving it
here at the first available opportunity on the defendant (foreigner though he also is). Both
in taking it out and serving it (albeit when the defendant was only fleetingly on British
soil) she was doing no more than our law permits, even though it may have ruined his
day at the races. Some might regard her action as bad form; none can legitimately con-
demn it as an abuse of legal process: see Colt Industries Inc. v. Sarlie. But there are clear
indications that Bridge J thought otherwise, and that this notion coloured his approach
to the whole case and, as I respectfully think, led him astray.
[Stephenson LJ delivered a concurring judgment.]
Locating a corporation for the purposes of service of the writ or other originating process
within the jurisdiction is a little more difficult than locating a natural person. An extraprovin-
cial or foreign company that has registered in a province pursuant to provincial company
legislation is clearly present in that province for jurisdictional purposes. There may, however,
be other companies, considered to be present because they are carrying on business, that are
not so registered. A related question, of course, is how the writ or other originating process
should be served on the corporate defendant. This is a question of procedure for the forum.
Chevron Corp v Yaiguaje

2015 SCC 42
[Ecuadorian villagers obtained a judgment in Ecuador for damages caused by environ-

mental pollution against Chevron, a Delaware corporation, for US$9.1 billion. Chevron
did not pay the judgment. The judgment creditors brought an enforcement action against
Chevron in New York state. Chevron argued that the Ecuador judgment had been
obtained by fraud. The judgment creditors then commenced an action for recognition
and enforcement in Ontario against both Chevron and Chevron Canada. Chevron Canada
argued that it was not a party to the Ecuador judgment and that Ontario had no jurisdic-
tion over it. Chevron Canada was a subsidiary of Chevron but not a directly held sub-
sidiary. The court allowed the action to be continued against Chevron Canada. The
portion of the judgment dealing with the jurisdiction of the Ontario court over Chevron
Canada is reproduced below.]
GASCON J (for the court):

[84] While Van Breda simplified, justified, and explained many critical aspects of Can-
adian private international law, it did not purport to displace the traditional jurisdictional
grounds. LeBel J. explicitly stated that, in addition to the connecting factors he established
for assumed jurisdiction, “jurisdiction may also be based on traditional grounds, like the
defendant’s presence in the jurisdiction or consent to submit to the court’s jurisdiction,
if they are established.” In other words, “[t]he real and substantial connection test does
not oust the traditional private international law bases for court jurisdiction”: para. 79.
[85] To establish traditional, presence-based jurisdiction over an out-of-province
corporate defendant, it must be shown that the defendant was carrying on business in
the forum at the time of the action. Whether a corporation is “carrying on business” in
the province is a question of fact: Wilson v. Hull (1995), 174 A.R. 81 (C.A.), at para. 52;
Ingersoll Packing Co. v. New York Central & Hudson River R.R. Co. (1918), 42 O.L.R. 330
(S.C. App. Div.), at p. 337. In Wilson, in the context of statutory registration of a foreign
judgment, the Alberta Court of Appeal was asked to assess whether a company was carry-
ing on business in the jurisdiction. It held that to make this determination, the court must
inquire into whether the company has “some direct or indirect presence in the state
asserting jurisdiction, accompanied by a degree of business activity which is sustained
for a period of time”: para. 13. These factors are and always have been compelling indicia
of corporate presence; as the cases cited in Adams v. Cape Industries Plc, [1990] 1 Ch. 433,
at pp. 467-68, per Scott J., demonstrate, the common law has consistently found the
maintenance of physical business premises to be a compelling jurisdictional factor:
LeBel J. accepted this in Van Breda when he held that “carrying on business requires some
form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office
there”: para. 87.
[86] The motion judge in this case made the following factual findings concerning
Chevron Canada’s Mississauga office:
Chevron Canada operates a business establishment in Mississauga, Ontario. It is not a mere
“virtual” business. It runs a bricks and mortar office from which it carries out a non-transitory
business with human means and its Ontario staff provides services to and solicits sales from
its customers in this province. [para. 87]
These findings have not been contested. They are sufficient to establish presence-based
jurisdiction. Chevron Canada has a physical office in Mississauga, Ontario, where it was
served pursuant to Rule 16.02(1)(c), which provides that valid service can be made at a
place of business in Ontario. Chevron Canada’s business activities at this office are sus-
tained; it has representatives who provide services to customers in the province. Canadian
courts have found that jurisdiction exists in such circumstances: Incorporated Broadcasters
Ltd. v. Canwest Global Communications Corp. (2003), 63 O.R. (3d) 431 (C.A.), at para. 36;
Prince v. ACE Aviation Holdings Inc., 2013 ONSC 2906, 115 O.R. (3d) 721, appeal dis-
missed and cross-appeal allowed 2014 ONCA 285; 120 O.R. (3d) 140; Abdula v. Canadian
Solar Inc., 2011 ONSC 5105, 92 B.L.R. (4th) 324, aff ’d 2012 ONCA 211, 110 O.R. (3d)
256; Wilson; Charron v. Banque provinciale du Canada, [1936] O.W.N. 315 (H.C.J.).
[87] The motion judge’s analysis was correct, and the Ontario Court of Appeal had no
need to go beyond these considerations to find jurisdiction. As several lower courts have
noted both prior to and since Van Breda, where jurisdiction stems from the defendant’s
presence in the jurisdiction, there is no need to consider whether a real and substantial
connection exists: Incorporated Broadcasters Ltd., at para. 29, cited with approval in Prince
(C.A.), at para. 48; Patterson v. EM Technologies, Inc., 2013 ONSC 5849, at paras. 13-16.
In other words, the question of whether jurisdiction exists over Chevron Canada should
begin and end with traditional, presence-based jurisdiction in this case.
• • •
[93] Second, one aspect of the plaintiffs’ claim in this case is for enforcement of
Chevron’s obligation to pay the foreign judgment using the shares and assets of Chevron
Canada to satisfy its parent corporation’s debt obligation. In this respect, the subject matter
of the claim is not the Ecuadorian events that led to the foreign judgment to which
Chevron Canada is a stranger, but rather, at least arguably, the collection of a debt using
shares and assets that are alleged to be available for enforcement purposes. In an enforce-
ment process like this for the collection of a debt against a third party, assets in the juris-
diction through the carrying on of business activities are undoubtedly tied to the subject
matter of the claim. From that standpoint, seizable assets are not merely the subject matter
of the dispute, they are its core. In this regard, the third party is the direct object of the
proceedings. When a plaintiff seeks enforcement against a third party to satisfy a foreign
judgment debt, the existence of assets in the province may therefore well be a highly
relevant connecting factor of the sort needed for such an action to proceed. Indeed, it is
hard to identify who, besides the province, would have jurisdiction over a company for
enforcement processes against that company’s assets in the province.
(3) Conclusion
[94] Chevron Canada was served in juris, in accordance with Rule 16.02(1)(c), at a
place of business it operates in Mississauga, Ontario. Traditional, presence-based juris-
diction is satisfied. Jurisdiction is thus established with respect to it. As indicated for
Chevron, the establishment of jurisdiction does not mean that the plaintiffs will neces-
sarily succeed in having the Ecuadorian judgment recognized and enforced against
Chevron Canada. A finding of jurisdiction does nothing more than afford the plaintiffs
the opportunity to seek recognition and enforcement of the Ecuadorian judgment. Once
past the jurisdictional stage, Chevron Canada, like Chevron, can use the available pro-
cedural tools to try to dispose of the plaintiffs’ allegations. This possibility is foreign to
and remote from the questions that must be resolved on this appeal.
[95] Further, my conclusion that the Ontario courts have jurisdiction in this case
should not be understood to prejudice future arguments with respect to the distinct cor-
porate personalities of Chevron and Chevron Canada. I take no position on whether
Chevron Canada can properly be considered a judgment-debtor to the Ecuadorian judg-
ment. Similarly, should the judgment be recognized and enforced against Chevron, it
does not automatically follow that Chevron Canada’s shares or assets will be available to
satisfy Chevron’s debt. For instance, shares in a subsidiary belong to the shareholder, not
to the subsidiary itself. Only those shares whose ownership is ultimately attributable to
the judgment debtor could be the valid target of a recognition and enforcement action.
It is not at the early stage of assessing jurisdiction that courts should determine whether
the shares or assets of Chevron Canada are available to satisfy Chevron’s debt. As such,
contrary to the appellants’ submissions, this is not a case in which the Court is called
upon to alter the fundamental principle of corporate separateness as reiterated in BCE
Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at least not at this junc-
ture. In that regard, the deference allegedly owed to the motion judge’s findings concerning
the separate corporate personalities of the appellants and the absence of a valid foundation
for the Ontario courts’ exercise of jurisdiction is misplaced. These findings were reached
in the context of the s. 106 stay. As I stated above, the Court of Appeal reversed that stay,
and this issue is not on appeal before us.
2. Defendants Outside the Jurisdiction

At common law, until the mid-19th century, parties could be served only within England. But
by statute, the Common Law Procedure Act 1852 (UK), Parliament modified the common law
and authorized English courts to assume jurisdiction even when the defendant could not be
found in England and served there. This extended jurisdiction was not unlimited. Parliament
defined or described a finite number of circumstances in which jurisdiction might be
assumed. These circumstances consisted of some connection between the cause of action
or the parties and England. Statutory authorization for service of writs outside England
(ex juris), located for decades in the Rules of Court, RSC, Order 11, is now set out in the Civil
Procedure Rules (CPR), Part 6 as supplemented by Practice Direction 6B. (The English common
law and statutory rules for jurisdiction have been replaced for European Community actions
by the Civil Jurisdiction and Judgments Act, 1982 (UK), which implements the treaty obliga-
tions of the United Kingdom.) Under Order 11, and now under CPR rule 6.37, a plaintiff who
has decided to commence an action in England and who needs to serve the defendant
ex juris makes an ex parte application to the English court for permission or leave to serve
ex juris. The court will grant leave to serve the defendant ex juris only if the plaintiff estab-
lishes that: (1) there is a good arguable case on the merits, (2) the circumstances of the case
fall within one of the connections defined by the rules, and, as a matter of discretion, (3) Eng-
land is forum conveniens—the appropriate forum. The House of Lords in Seaconsar Far East
Ltd v Bank Markazi Jomhouri Islami Iran, [1993] 3 WLR 756, reduced the plaintiff’s obligation
to establish a good arguable case to an obligation to establish only that there is a serious
issue to be tried.
All Canadian jurisdictions have either legislation (the Court Jurisdiction and Proceedings
Transfer Act (CJPTA), enacted in British Columbia, Saskatchewan, and Nova Scotia, and the
Civil Code in Quebec) or rules of court (rule 30 in Alberta; rule 17 in Manitoba, Ontario, and
PEI; rule 19 in New Brunswick; and rule 6.07 in Newfoundland and Labrador) that adhere
generally to the English Order 11 model, and all have some process that determines whether,
as a matter of discretion, the province is the most appropriate jurisdiction for the action
(discussed in Chapter 7). There are, however, variations with respect to the descriptions of
the circumstances deemed to constitute a sufficient connection and, in most provinces,
service under the provincial rules may be effected without leave of the court. Common cir-
cumstances involve the commission of a tort in the province or a breach of contract in the
province. (Moran v Pyle National (Canada) Ltd, the first case reproduced below, creates a
uniquely Canadian flexible legal test for locating a tort for jurisdictional purposes.) Never-
theless, the same three English questions are asked if the defendant, served ex juris, objects,
although there may be differences among the provinces as to whether to apply the standard
of “a good arguable case” on the merits or some other standard, such as “a serious issue to
be tried.”
The Model Act version of the CJPTA is set out below. In the CJPTA, jurisdiction simpliciter
is referred to as territorial competence. The CJPTA is in force in Saskatchewan, British Colum-
bia, and Nova Scotia.
Court Jurisdiction and Proceedings Transfer Act

Uniform Law Conference of Canada (comments omitted)
Part 1
Interpretation
Definitions
1. In this Act
“person” includes a state;
“plaintiff ” means a person who commences a proceeding, and includes a plaintiff by way
of counterclaim or third party claim;
“proceeding” means an action, suit, cause, matter or originating application and includes
a procedure and a preliminary motion;
“procedure” means a procedural step in a proceeding;

“state” means
(a) Canada or a province or territory of Canada, and
(b) a foreign country or a subdivision of a foreign country;
“subject matter competence” means the aspects of a court’s jurisdiction that depend on
factors other than those pertaining to the court’s territorial competence;
“territorial competence” means the aspects of a court’s jurisdiction that depend on a
connection between
(a) the territory or legal system of the state in which the court is established, and
(b) a party to a proceeding in the court or the facts on which the proceeding is
based.
Part 2
Territorial Competence of Courts of [Enacting Province or Territory]
Application of this Part
2(1) In this Part, “court” means a court of [enacting province or territory].
(2) The territorial competence of a court is to be determined solely by reference to
this Part.
• • •
Proceedings in personam
3. A court has territorial competence in a proceeding that is brought against a person
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,
(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 [enacting province or territory] at the time
of the commencement of the proceeding, or
(e) there is a real and substantial connection between [enacting province or terri-
tory] and the facts on which the proceeding against that person is based.
• • •
Residual discretion
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 [enacting province or territory] in which the plaintiff
can commence the proceeding, or
(b) the commencement of the proceeding in a court outside [enacting province or
territory] cannot reasonably be required.
• • •
Real and substantial connection

10. Without limiting the right of the plaintiff to prove other circumstances that con-
stitute a real and substantial connection between [enacting province or territory] and the
facts on which a proceeding is based, a real and substantial connection between [enacting
province or territory] and those facts is presumed to exist if the proceeding
(a) is brought to enforce, assert, declare or determine proprietary or possessory
rights or a security interest in immovable or movable property in [enacting province
or territory],
(b) concerns the administration of the estate of a deceased person in relation to
(i) immovable property of the deceased person in [enacting province or terri-
tory], or
(ii) movable property anywhere of the deceased person if at the time of death
he or she was ordinarily resident in [enacting province or territory],
(c) is brought to interpret, rectify, set aside or enforce any deed, will, contract or
other instrument in relation to
(i) immovable or movable property in [enacting province or territory], or
(ii) movable property anywhere of a deceased person who at the time of death
was ordinarily resident in [enacting province or territory],
(d) is brought against a trustee in relation to the carrying out of a trust in any of
the following circumstances:
(i) the trust assets include immovable or movable property in [enacting province
or territory] and the relief claimed is only as to that property;
(ii) that trustee is ordinarily resident in [enacting province or territory];
(iii) the administration of the trust is principally carried on in [enacting prov-
ince or territory];
(iv) by the express terms of a trust document, the trust is governed by the law
of [enacting province or territory],
(e) concerns contractual obligations, and
(i) the contractual obligations, to a substantial extent, were to be performed in
[enacting province or territory],
(ii) by its express terms, the contract is governed by the law of [enacting prov-
ince or territory], or
(iii) the contract
(A) is for the purchase of property, services or both, for use other than in
the course of the purchaser’s trade or profession, and
(B) resulted from a solicitation of business in [enacting province or territory]
by or on behalf of the seller,
(f) concerns restitutionary obligations that, to a substantial extent, arose in [enact-
ing province or territory],
(g) concerns a tort committed in [enacting province or territory],
(h) concerns a business carried on in [enacting province or territory],
(i) is a claim for an injunction ordering a party to do or refrain from doing
anything
(i) in [enacting province or territory], or
(ii) in relation to immovable or movable property in [enacting province or
territory],
(j) is for a determination of the personal status or capacity of a person who is

ordinarily resident in [enacting province or territory],
(k) is for enforcement of a judgment of a court made in or outside [enacting prov-
ince or territory] or an arbitral award made in or outside [enacting province or terri-
tory], or
(l) is for the recovery of taxes or other indebtedness and is brought by the Crown
[of the enacting province or territory] or by a local authority [of the enacting province
or territory].
[The remaining provisions of the CJPTA dealing with discretion and with transferring
proceedings have not been reproduced.]
For a detailed analysis of the CJPTA see Black, Pitel & Sobkin.
Morguard (reproduced in Chapter 3) imposed a constitutional standard on the assump-
tion of jurisdiction and introduced some confusion about the jurisdictional rules. Morguard
held that a real and substantial connection between the province and the action is required
by the Constitution but declined to define the nature of a real and substantial connection.
Before Morguard, courts simply asked whether the circumstances described in the rules of
court and identified by the plaintiff as relevant to the cause of action were satisfied. Since
Morguard, satisfaction of the rule alone may not be sufficient—the court may ask whether
there is a real and substantial connection between the action and the province.
Club Resorts Ltd v Van Breda, 2012 SCC 17, [2012] 1 SCR 572 (the second case reproduced
below) held that the constitutional and conflicts standards are distinct tests, but failed to
flesh out the constitutional standard. Nevertheless, in holding that Ontario had jurisdiction
in the circumstances, Van Breda provided considerable guidance concerning constitutionally
acceptable circumstances for the assumption of jurisdiction over out-of-province defend-
ants. In combination with two other cases decided at the same time, Éditions Écosociété Inc v
Banro Corp, 2012 SCC 18, [2012] 1 SCR 636, and Breeden v Black, 2012 SCC 19, [2012] 1 SCR 666,
Van Breda overruled the more comprehensive approach endorsed by Muscutt v Courcelles
(2002), 60 OR (3d) 20, 213 DLR (4th) 577 (CA), in favour of a rule-based, minimalist approach
to determination of a real and substantial connection for purposes of jurisdiction, an
approach consistent with the CJPTA and the various provincial rules of court dealing with
assumed jurisdiction.
Logically, the court must determine jurisdiction before it can exercise any discretion. The
plaintiff must thus satisfy the court that there is a real and substantial connection between
the action and the province before the defendant needs to invoke forum non conveniens.
Because Van Breda declined to adopt the Muscutt v Courcelles expanded approach to deter-
mination of jurisdiction simpliciter, and returned to a rule-based approach, discretion is again
a significant element in the jurisdictional decision even in Ontario: see Chapter 7.
The third, fourth, and fifth cases below have been selected to illustrate the post-Van
Breda approach to determination of judicial jurisdiction. Court v Debaie, 2012 ABQB 640
concerns the location of the tort of defamation and raises some important procedural issues.
Tamminga v Tamminga, 2014 ONCA 478 and JTG Management Services Ltd v Bank of Nanjing
Co Ltd, 2015 BCCA 200 both involve contractual connections.
The final case, Chevron Corp v Yaiguaje, 2015 SCC 42, poses a difficult challenge to anyone
attempting to reconcile it with Van Breda. In upholding the Ontario court’s assumption of
jurisdiction over a defendant outside Ontario for purposes of recognition and enforcement
of an Ecuadorian judgment, the court rejected the need for there to be a real and substantial
connection between the defendant or the cause of action and the province.
Moran v Pyle National (Canada) Ltd

[1975] SCR 393, 43 DLR (3d) 239
DICKSON J: This appeal from the Court of Appeal for Saskatchewan presents in a juris-
dictional context the question of the place of commission of a tort.
According to the statement of claim, the averments of which I accept as true solely for
the purpose of testing jurisdiction, William Franklin Moran, an electrician employed by
International Minerals and Chemical Corporation (Canada) Ltd. was fatally injured at or
near the Town of Esterhazy in the province of Saskatchewan while removing a spent light
bulb manufactured by the defendant-respondent Pyle National (Canada) Ltd. (Pyle). At
the time of the accident Mr. Moran was standing on a ladder propped against a steel “I”
beam. While unscrewing the bulb Mr. Moran touched the metal base and was electro-
cuted. The plaintiffs-appellants, who are the widow and children of the deceased, claim
that Pyle was negligent in the manufacture and construction of the bulb and negligent in
failing to provide an adequate system of safety checks to prevent its product containing
faulty wiring from leaving its plant, or from being distributed or sold or used.
Pyle does not carry on business in the province of Saskatchewan and has no property
or assets in Saskatchewan; all of the company’s manufacturing and assembling operations
take place in the province of Ontario with components being manufactured either in
Ontario or in the United States. Pyle sells all of its products to distributors and none
directly to consumers. The company has no salesmen or agents within Saskatchewan.
Section 54 of the Queen’s Bench Act, RSS 1965, c. 73, provides:
54. Notwithstanding anything in section 53, no action shall be brought in Saskatchewan
for damages in respect of a tort committed outside the province except by special leave of
the Court or a judge.
On a Chamber’s motion, Disbery J, in a written decision held, assuming Pyle to be neg-

ligent as alleged, such negligence occurred in Ontario and the tort was committed outside
Saskatchewan [25 DLR (3d) 718, [1972] 3 WWR 161]. Disbery J, however, granted the
plaintiffs special leave under s. 54 to commence an action in Saskatchewan and made an
order allowing service of the proposed statement of claim and writ of summons in the
province of Ontario. Pyle appealed successfully and the order of Disbery J was set aside
[30 DLR (3d) 109, [1972] 5 WWR 456]. In the opinion of the court s. 54 was enacted to
enable the court at its discretion to decline jurisdiction when it could be shown that the
action would be more conveniently tried in another forum, and not to confer jurisdiction.
In the view which I take of this case, for the reasons which follow, it is unnecessary to
consider further s. 54 of the Queen’s Bench Act.
The cause of action herein is founded on the Fatal Accidents Act, RSS 1965, c. 109. Is
the fact that the action is brought under the Fatal Accidents Act of Saskatchewan in respect
of a death which occurred within the province of Saskatchewan sufficient of itself to give
jurisdiction to the Saskatchewan courts? I do not think so. Although s. 3(2) of the Act
provides that the action shall be brought in the court of Queen’s Bench, s. 3(1) requires
that the wrongful act, neglect or default must be such as, if death had not ensued, would
have entitled the person injured to maintain an action. If one attributes to the Legislature
of the province of Saskatchewan the intention to legislate intra-territorially, as one must,
then s. 3 should be construed as limited to a wrongful act, neglect or default which is
committed in Saskatchewan. It follows that the right of the person injured to maintain
an action is ascertainable only when the locus delicti commissi has been determined. The
Act itself does not help to determine the locus delicti commissi; it is the locus which
determines the application of the Act.
The task of determining the situs of a tort is of some difficulty. A number of tests which
one might apply are to be found in the cases and in the learned journals but none has
been free of criticism and I think it fair to say that no clear principle has emerged. The
difficulty has not been diminished by the failure in many of the cases to distinguish
between jurisdiction and choice-of-law. The rules for determining situs for jurisdictional
purposes need not be those which are used to identify the legal system under which the
rights and liabilities of the parties fall to be determined.
Traditionally, the view has been held that jurisdiction in a personal action rests upon
physical power and the ability of the court to enforce any judgment it may render. Juris-
diction, therefore, normally depends upon the presence of the defendant within the
territorial limits of the court or upon the voluntary submission of the defendant to the
authority of the court: Sirdar Gurdyal Singh v. Rajah of Faridkote, [1894] AC 670; Lung v.
Lee, [1929] 1 DLR 130, 63 OLR 194. But to this general rule there are exceptions, one of
which is the assertion by the courts of England and Canada of jurisdiction in respect of
torts committed within the territorial limits of the court. Over a tort committed in the
province of Saskatchewan the courts of the province of Saskatchewan have jurisdiction
wherever the residence of the defendant may be. Rule 27(1)(e) of the Rules of Practice and
Procedure for the court of Queen’s Bench for Saskatchewan recognizes this and permits
service of a writ of summons on a defendant out of the jurisdiction to be effected without
order whenever “the action … is founded on a tort committed within the jurisdiction.”
The issue, therefore, before us, the sole issue, is whether the tort alleged was committed
within the province of Saskatchewan. If so, Pyle, a federally incorporated Canadian com-
pany, not resident in the province of Saskatchewan, is subject to the jurisdiction of the
courts of the province of Saskatchewan. The allegedly careless (a neutral word which I will
use rather than the word “negligent”) manufacture of which appellants complain occurred,
it is alleged, in Ontario, while the resultant damage occurred in Saskatchewan. Was the
tort committed in the province of Ontario or in the province of Saskatchewan?
One theory which has been advanced as a means of ascertaining the situs or locus of
a tort is sometimes referred to as the “place of acting” theory, i.e., the place where the
original act of the defendant which caused the final damage occurred. The theory has the
effect of dividing a tort into its constituent elements, the tort of negligence being divided
into (1) a duty of care, (2) breach of that duty, and (3) damage, and each of these meta-
physical fragments is given a geographic ascription. The jurisdiction in which the careless
act is alleged to have occurred is, however, held to be determinative, to the exclusion of
the jurisdiction in which the hurt was suffered. Logically, it would seem that if a tort is to
be divided and one part occurs in state A and another in state B, the tort could reasonably
for jurisdictional purposes be said to have occurred in both states or, on a more restrictive
approach, in neither state. It is difficult to understand how it can properly be said to have
occurred only in state A.
The place of acting theory finds support in the case of George Monro, Ltd. v. American
Cyanamid & Chemical Corp., [1944] 1 KB 432, in which the plaintiff, sole distributor in
the British Isles of defendant’s “de-ratting” product cyanogas, sued defendant, a New York
corporation, to recover moneys paid by plaintiff on a judgment obtained by a Shropshire
farmer following use of cyanogas. The writ was endorsed “for damages for negligence and
breach of contract.” The plaintiff sought to serve notice of the writ out of the jurisdiction
under Or. XI, r. 1 which allowed such service whenever the action was founded on a tort
committed within the jurisdiction. Plaintiff failed to get the order. Scott LJ found the
affidavit filed in support of the application “gravely defective.” Goddard LJ considered [at
p. 439] “It would be sufficient to dispose of this appeal to say that the affidavit … does
not show that that claim brought against the corporation comes within Or. XI.”
Du Parcq LJ agreed “that the affidavit does not show what the alleged negligence is.” These
findings on the shortcomings of the affidavit were sufficient to dispose of the motion but
the learned Justices of Appeal went further and expressed some obiter dicta, du Parcq LJ
said, pp. 440-1:
Having been instructed by Mr. Ryder Richardson on the subject, I am willing to infer that
the negligence alleged is that the corporation put on the market a dangerous substance with
written instructions to use it in a dangerous way. That act of commission was done in
America and it is highly artificial to say that the tort was committed within the jurisdiction
of the English courts. The principle of the rule is plain. Looking at the substance of the matter
without regard to any technical consideration, the question is: Where was the wrongful act,
from which the damage flows, in fact done? The question is not where was the damage suf-
fered, even though damage may be of the gist of the action.
Goddard LJ said, p. 439:

Here the alleged tort which was committed was a wrongful act or default. It was the sale of
what was said to be a dangerous article without warning as to its nature. That act was com-
mitted in America, not in this country.
And at p. 440:
Therefore it would be a very strong thing for an English court to exercise jurisdiction over
an American in respect of an act committed by him in America, although some damage
might be alleged to be suffered in England, when the act in America might not be considered
by the courts of that country to be tortious at all.
Scott LJ said, p. 437:

I express no opinion whether, if an act were committed out of the jurisdiction which did not
give rise to a cause of action in tort until something further had happened within the jurisdic-
tion, the resultant damage could properly be regarded as flowing from a tort taking place
within the jurisdiction. It is not necessary to decide that question in the present case.
Although the Monro case is frequently cited as authority for the proposition that the
place of harm does not determine the situs of a tort, nevertheless it is to be observed that
the judgments of the court, which were unreserved and, to a great extent obiter, did not
consider in depth the question of situs. The clarity of the conclusions reached was unfortu-
nately blurred by imperfections of the affidavit and by the emphasis placed on the discre-
tionary nature of the order. It may also be open to question whether the judgment can
properly stand in the face of the characterization of a tort by the House of Lords in Watson
v. Winget, Ltd., [1960] SLT 321, to which I will later revert. A Canadian case which must
be considered is Abbott-Smith v. Governors of University of Toronto (1964), 45 DLR (2d)
672, 49 MPR 329. An application for service ex juris rested upon allegations of careless
manufacture of Sabin Oral Polio Vaccine by the intended defendant at Toronto, admin-
istration of the vaccine to the plaintiff in Nova Scotia by persons other than servants or
agents of the defendant, from which the plaintiff suffered in Nova Scotia an attack of
paralytic polio-myelitis and was permanently disabled. The question posed by Ilsley CJ,
who wrote the main judgment was whether careless manufacture outside of Nova Scotia,
combined with damage suffered by the plaintiff in Nova Scotia, is a “tort committed or
wrong done” within Nova Scotia. The learned Chief Justice referred to several American
authorities, including Corpus Juris, vol. 62, p. 1110, note (a) [at 678]:
(1) The locus delicti, whose law governs, has been held to be the place at which the right
of the person injured was invaded, as distinguished, on the one hand, from that at which the
conduct in breach of duty took place on the part of the person producing the injury …
(2) and, on the other hand, from the place at which the consequent damage, for which
recovery was sought, occurred.
He quoted [at pp. 678 and 679] Cheshire, Private International Law, 6th ed., (1961),
pp. 294-5:
It is submitted, therefore, that the locus delicti is the first place where the sequence of events
is complete so as to create a cause of action. Or, to repeat the American Restatement: “The
place of wrong is in the State where the last event necessary to make an actor liable for an
alleged tort takes place.” What that last event is must be decided by the lex fori.
If this view is correct, it conflicts with those expressed by the two Lords Justices in the
Monro Case.
and
… no act or default is tortious until all the things necessary to give the plaintiff a cause of
action have occurred. If of three facts necessary to give a cause of action only two have
occurred, there is a tort in embryo, but not a complete tort. The third fact has still to occur,
and it would seem that the place in which its occurrence completes the tort constitutes the
locus delicti. By reason of something that has happened in this place it is possible to say for
the first time that a tort has been committed.
and “A tort must be committed before it can be said where it was committed” and [at
p. 680] from Dicey’s Conflict of Laws, 6th ed. (1949), p. 804:
There is some difficulty in holding that a tort is committed in New York, when there is no
possible liability in tort until injury is suffered in England.
but he did not choose to follow any of these authorities. He observed that, despite certain
remarks of Goddard LJ in the Monro case, there is no cause of action for negligence unless
there is (1) a duty of care; (2) a breach of that duty, and (3) damage, and conceded “It may
be that the tort of negligence is not committed until the damage is sustained” but, not-
withstanding, concluded that:
… this does not, in my opinion, necessarily mean that for the purposes of Order XI the tort
should be regarded as having been committed at the place where the damage was
sustained.
The learned Chief Justice rested his judgment on the Monro case and upon several
early Canadian authorities. The earliest is Oligny v. Beauchemin et al. (1895), 16 PR (Ont.)
508, in which Boyd C, p. 511, held that:
Proof of some damage in Ontario, which is no doubt a continuation of the original tort
committed in Quebec, does not appear sufficient to attract to this Province the whole cause
of action.
Chancellor Boyd, in this passage, would seem to suggest that before a tort can be said
to be committed in a province all of its constituent elements must be found within the
province, a concept which has been generally rejected in later authorities. He would also
seem to characterize the “damage” as merely a “continuation of ” and not part and parcel
of, integral to, and sine qua non of “the original tort committed in Quebec.” The next case
upon which Ilsley CJ relied was Anderson v. Nobel’s Explosive Co. (1906), 12 OLR 644.
The claim here was against defendants, manufacturers of explosives, for negligence in
allowing a fuse, which had been purchased by the plaintiff ’s employees, and which injured
the plaintiff at a place in Ontario, to be manufactured and sold in a defective condition,
the manner in which the fuse reached the plaintiff ’s employers not being alleged or sug-
gested. The facts of the case are much like those of the case at bar, and because the case
was followed in other cases which strongly influenced the judgment of Ilsley CJ, Beck v.
Willard Chocolate Co. Ltd., [1942] 2 DLR 1140, 57 NSR 246, and Paul v. Chandler & Fisher
Ltd., [1924] 2 DLR 479, 54 OLR 410, it would be well to quote at some length from what
was said by Anglin J, as he then was, delivering the judgment of the Divisional Court
composed of Mulock CJ, Ex. D, Anglin and Clute JJ, pp. 650-1:
… I find myself quite unable to follow Mr. Phelan’s argument that the tort which gave rise
to that cause of action was “committed” within Ontario. The charge preferred against the
defendants is that they were “negligent in allowing the fuse (which injured the plaintiff) to
be manufactured and sold in a defective condition.” How this fuse reached the employers of
the plaintiff is not alleged or suggested. The manufacture and the sale by the defendants,
negligence in both of which the plaintiff alleges as the tort or wrong committed by the
defendants, must, in the absence of any contrary allegation, be deemed to have taken place
in Scotland, where the defendants carry on business. If these alleged negligent acts constitute
the wrong done by the defendants, though a result of that wrong—perhaps a more or less
direct result—may have been injury sustained by the plaintiff in this Province, it seems to
me impossible to maintain that such wrong or tort was committed in Ontario or elsewhere
than in Scotland. It is true that the invasion of the plaintiff ’s right of personal security
occurred in this Province, but a wrong or tort comprises also the wrongful act or omission
of the alleged tort-feasor. Before it can be said that a tort has been committed in Ontario
within the meaning of Rule 162(e) it must be established, I think, that the wrongful act or
omission of the tort-feasor which caused the injury to the plaintiff, took place in this Prov-
ince. That is not, and could not well be, alleged by the present plaintiff, and, if it were, the
Court, in the exercise of the discretion which it certainly possesses in regard to the applica-
tion of the provisions of Rule 162(e), should, in such a case as that now before us, decline to
permit service out of the jurisdiction.
If the careless acts of manufacture constitute the wrong done by the defendants to the
plaintiff, then Anderson v. Nobel’s Explosive Co. and those cases which followed it, includ-
ing the Abbott-Smith case, were correctly decided. For myself, I have great difficulty in
believing that a careless act of manufacture is anything more than a careless act of manu-
facture. A plaintiff does not sue because somebody has manufactured something care-
lessly. He sues because he has been hurt. The duty owed is a duty not to injure. As Pollock
on Torts, 2nd ed., p. 14, has said:
Our law of torts, with all its irregularities, has for its main purpose nothing else than the
development of the precept—alterum non laedere—“Thou shalt do no hurt to thy neighbor,”
a trust to which Atkin LJ gave judicial expression in M’Alister (or Donoghue) v. Stevenson,
[1932] AC 562. The same thought is found in Salmond on Torts, 15th ed. (1969), p. 10: “A
tort is a species of civil injury or wrong” and in Fleming on Torts, 4th ed. (1971), pp. 1-2:
“Tort liability … exists primarily to compensate the person injured. …”
If the essence of a tort is the injury or wrong, a paramount factor in determining situs
must be the place of the invasion of one’s right to bodily security. In a Donoghue v. Steven
son case, can carelessness in manufacture be separated from resulting injury? The juris-
dictional act can well be regarded, in an appropriate case, as the infliction of injury and
not the fault in manufacture. Pyle is being sued because Moran suffered harm, not because
some unidentified employee of Pyle’s was allegedly careless. As long ago as 1892 Bowen LJ,
in Ratcliffe v. Evans, [1892] 2 QB 524 at p. 528, said: “… where no actual and positive right
(apart from the damage done) has been disturbed, it is the damage done which is the
wrong”; and Viscount Simonds in Overseas Tankship (UK) Ltd. v. Morts Dock & Engin-
eering Co. Ltd. (The “Wagon Mound”), [1961] AC 388 at p. 425, said:
It is, no doubt, proper when considering tortious liability for negligence to analyse its ele-
ments and to say that the plaintiff must prove a duty owed to him by the defendant, a breach
of that duty by the defendant, and consequent damage. But there can be no liability until the
damage has been done. It is not the act but the consequences on which tortious liability is
founded. Just as (as it has been said) there is no such thing as negligence in the air, so there
is no such thing as liability in the air.
(Emphasis mine.)
Watson v. Winget, Ltd., [1960] SLT 321, was a limitation of actions case arising out of
a claim for personal injuries against a manufacturer based on Donoghue v. Stevenson,
supra. It fell to the House of Lords to construe the statutory phrase “act, neglect or default
giving rise to the action.” The nub of the case and in my opinion the true characterization
of the tort of negligence is to be found, I think, in the speech of Lord Denning, pp. 331-2:
So here the wisdom of the common law lies in this, that it holds the breach of duty to be, not
the carelessness in manufacture, nor the putting into circulation of a faulty machine, but the
wrongful infliction of damage …
Lord Reid in Watson v. Winget, Ltd. quoted what Lord Wright had said in delivering
the judgment of a Board of the Privy Council in Grant v. Australian Knitting Mills, Ltd.,
[1936] AC 85 at p. 104:
… the duty cannot at the time of manufacture be other than potential or contingent, and
only can become vested by the fact of actual use by a particular person.
There is one other case to which reference should be made, Distillers Co. (Bio-Chemicals)
Ltd. v. Thompson, [1971] 1 All ER 694. Distillers was a manufacturer of pharmaceuticals
in Great Britain. Some of its preparations included thalidomide, a substance which it
obtained in bulk from German manufacturers. The finished products were sold in Aus-
tralia but not by Distillers. The case for the plaintiff child, born without arms and with
defective eyesight, was that her mother took the Distillers’ product Distival of which the
principal ingredient was thalidomide, during pregnancy, with harmful effect on the foetus
of the unborn child. The mother of the plaintiff had purchased the Distival in New South
Wales. The question before the court was whether the cause of action was one which arose
within New South Wales. Lord Pearson considered three possible theories, the first—that
the “cause of action must be the whole cause of action, so that every part of it, every
ingredient of it, must have occurred within the jurisdiction.” This draconian theory was
ruled out as “too restrictive for the needs of modern times.” Lord Pearson commented,
p. 699:
The defendant has no major grievance if he is sued in the country where most of the ingre-
dients in the cause of action against him took place. In such a case, if the first theory were
accepted, the plaintiff, if lacking time and money for following the defendant to the defend-
ant’s country and suing him there, would be deprived of any remedy.
The second of the three possible theories—“that it is necessary and sufficient that the
last ingredient of the cause of action, the event which completes the cause of action and
brings it into being, has occurred within the jurisdiction” with its emphasis on “last
ingredient,” irrespective of its importance, was also rejected. Lord Pearson said, p. 699:
The last event might happen in a particular case to be the determining factor on its own
merits, by reason of its inherent importance, but not because it is the last event.
and
… the search is for the most appropriate court to try the action, and the degree of connection
between the cause of action and the country concerned should be the determining factor.
Lord Pearson would seem to be moving toward a form of “real and substantial con-
nection” test not unlike the “substance of the wrongdoing” test which Winn LJ applied in
Cordova Land Co. Ltd. v. Victor Bros. Inc., [1966] 1 WLR 793 (QB). Consideration of the
second theory was concluded with this observation [at p. 700]:
The right approach is, when the tort is complete, to look back over the series of events
constituting it and ask the question: where in substance did this cause of action arise?
As I understand it, their Lordships rejected any mechanical application of the “last
event” theory in favour of a more flexible, qualitative and quantitative test. The third
theory—“that the act on the part of the defendant which gives the plaintiff his cause of
complaint must have occurred within the jurisdiction”—was considered by their Lord-
ships to be “inherently reasonable, as the defendant is called on to answer for his wrong
in the courts of the country where he did the wrong.” The third theory followed the rule
laid down in Jackson v. Spittall (1870), LR 5 CP 542, but that was a breach of contract case
and no difficulty was experienced in determining where the breach occurred. As Lord
Pearson said, p. 700:
The Court did not have to consider where the wrongful act should be considered to have
taken place in an action for negligence. The defendant does not merely by behaving negligently
give the plaintiff any cause for complaint in law. The plaintiff has such a cause for complaint if
the defendant’s negligence has caused damage to the plaintiff.
(Emphasis mine.) In the result there was held to be negligence in New South Wales caus-
ing injury to the plaintiff in New South Wales. The goods were not defective or incorrectly
manufactured, the negligence lay in “failure to give a warning that the goods would be
dangerous if taken by an expectant mother in the first three months of pregnancy.” It will
be noted that the act, in this case the omission, on the part of the defendant which gave
the plaintiff a cause of complaint in law occurred in a jurisdiction in which defendant
was neither resident nor carrying on business.
Generally speaking, in determining where a tort has been committed, it is unnecessary,
and unwise, to have resort to any arbitrary set of rules. The place of acting and the place
of harm theories are too arbitrary and inflexible to be recognized in contemporary juris-
prudence. In the Distillers’ case and again in the Cordova case a real and substantial
connection test was hinted at. Cheshire, 8th ed. (1970), p. 281, has suggested a test very
similar to this; the author says that it would not be inappropriate to regard a tort as having
occurred in any country substantially affected by the defendant’s activities or its conse-
quences and the law of which is likely to have been in the reasonable contemplation of
the parties. Applying this test to a case of careless manufacture, the following rule can be
formulated: 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. This rule recognizes the import-
ant interest a state has in injuries suffered by persons within its territory. It recognizes
that the purpose of negligence as a tort is to protect against carelessly inflicted injury and
thus that the predominating element is damage suffered. 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 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 danger-
ously defective goods placed in the interprovincial flow of commerce.
In the result, I am of the opinion that the courts of the province of Saskatchewan have
jurisdiction to entertain the action herein. I would conclude with this caveat. For the
purpose of considering the jurisdictional point, it has been assumed, as I have stated, that
the facts are as alleged in the statement of claim and it has been assumed that upon those
facts the plaintiffs have a good cause of action in law on the principle in Donoghue v.
Stevenson. The facts and the law remain to be litigated and nothing in this judgment
should be taken as an approval of what underlies either assumption.
I would allow the appeal with costs here and in the Court of Appeal for Saskatchewan.
Appeal allowed.

2012 SCC 17, [2012] 1 SCR 572
LeBEL J (for the court):
I Introduction
[1] Tourism has grown into one of the most personal forms of globalization in the
modern world. Canadians look elsewhere for the sun, or to see new sights or seek new
experiences. Trips are planned and taken with great expectations. But personal tragedies
do happen. Happiness gives way to grief, as in the situations that resulted in these appeals.
A young woman, Morgan Van Breda, suffered catastrophic injuries on a beach in Cuba.
A family doctor and father, Dr. Claude Charron, died while scuba diving, also in Cuba.
Actions were brought in Ontario against a number of parties, including the appellant
Club Resorts Ltd. (“Club Resorts”), a company incorporated in the Cayman Islands that
managed the two hotels where the accidents occurred. Club Resorts sought to block those
proceedings, arguing that the Ontario courts lacked jurisdiction and, in the alternative,
that a Cuban court would be a more appropriate forum on the basis of the doctrine of
forum non conveniens. The same issues have now been raised in this Court. …
[LeBel J summarized the facts and the judicial history. He then discussed the constitu-
tional limitations on provincial conflicts rules, including jurisdictional rules (reproduced
in Chapter 3), the Ontario Court of Appeal decision in Muscutt v Courcelles (2002), 60
OR (3d) 20, and the modification of the Muscutt approach in Van Breda.]
(8) Framework for the Assumption of Jurisdiction

[66] In this Court, as in the Court of Appeal, the parties and the interveners have
expressed sharply different views about whether and how the law of conflicts should be
changed in respect of the assumption of jurisdiction. As might be expected, the disagree-
ments extend to the impact of possible changes on the outcome of these appeals. The
conflicting approaches articulated in this Court reflect the tension between a search for
flexibility, which is closely connected with concerns about fairness to individuals engaged
in litigation, and a desire to ensure greater predictability and consistency in the institu-
tional process for the resolution of conflict of laws issues related to the assumption and
exercise of jurisdiction. Indeed, striking a proper balance between flexibility and
predictability, or between fairness and order, has been a constant theme in the Canadian
jurisprudence and academic literature since this Court’s judgments in Morguard, Hunt,
Amchem and Tolofson.
[67] The real and substantial connection test is now well established. However, it is
clear that dissatisfaction with it and uncertainty about its meaning and conditions of
application have been growing, and that there is now a perceived need for greater direction
on how it applies. I adverted above to the need to draw a distinction between the consti-
tutional test and the rules of private international law—two aspects of the law of conflicts
that have sometimes been conflated in previous cases. At this point, it is necessary to
clarify the rules of the conflict of laws in a way that is consistent with the constitutional
constraints on the provinces’ courts but does not turn every private international law issue
into a constitutional one.
[68] The legislatures of several provinces, as well as the Ontario Court of Appeal in
Muscutt and Van Breda-Charron, have responded to these concerns and attempted to
provide guidance for the application of the real and substantial connection test. We can
build upon these legislative developments and judgments. Indeed, Sharpe J.A. referred
in Van Breda-Charron to what he described, perhaps with some optimism, as an emerging
consensus in Canadian law on how to resolve these issues. On the basis of this perhaps
fragile consensus and these developments and judgments, this Court must craft more
precisely the rules and principles governing the assumption of jurisdiction by the courts
of a province over tort cases in which claimants sue in Ontario, but at least some of the
events that gave rise to the claims occurred outside Canada or outside the province. I will
also consider how jurisdiction should be exercised or declined under the doctrine of
forum non conveniens. This said, I remain mindful that the Court is not of course tasked
with drafting a complete code of private international law. Principles will be developed
as problems arise before the courts. Moreover, all my comments about the development
of the common law principles of the law of conflicts are subject to provisions of specific
statutes and rules of procedure.
[69] When a court considers issues related to jurisdiction, its analysis must deal first
with those concerning the assumption of jurisdiction itself. That analysis must be
grounded in a proper understanding of the real and substantial connection test, which
has evolved into an important constitutional test or principle that imposes limits on the
reach of a province’s laws and courts. As I mentioned above, this constitutional test reflects
the limited territorial scope of provincial authority under the Constitution Act, 1867. At
the same time, the Constitution acknowledges that international or interprovincial situ-
ations may have effects within a province. Provinces may address such effects in order to
resolve issues related to conflicts with their own internal legal systems without overstep-
ping the limits of their constitutional authority (see Castillo).
[70] The real and substantial connection test does not mean that problems of assump-
tion of jurisdiction or other matters, such as the choice of the proper law applicable to a
situation or the recognition of extraprovincial judgments, must be dealt with on a case-
by-case basis by discretionary decisions of courts, which would determine, on the facts
of each case, whether a sufficient connection with the forum has been established. Judicial
discretion has an honourable history, and the proper operation of our legal system often
depends on its being exercised wisely. Nevertheless, to rely completely on it to flesh out
the real and substantial connection test in such a way that the test itself becomes a conflicts
rule would be incompatible with certain key objectives of a private international law
system.
[71] The development of an appropriate framework for the assumption of jurisdiction
requires a clear understanding of the general objectives of private international law. But
the existence of these objectives does not mean that the framework for achieving them
must be uniform across Canada. Because the provinces have been assigned constitutional
jurisdiction over such matters, they are free to develop different solutions and approaches,
provided that they abide by the territorial limits of the authority of their legislatures and
their courts.
[72] What would be an appropriate framework? How should it be developed in the
case of the assumption and exercise of jurisdiction by a court? A particular challenge in
this respect lies in the fact that court decisions dealing with the assumption and the exer-
cise of jurisdiction are usually interlocutory decisions made at the preliminary stages of
litigation. These issues are typically raised before the trial begins. As a result, even though
such decisions can often be of critical importance to the parties and to the further conduct
of the litigation, they must be made on the basis of the pleadings, the affidavits of the
parties and the documents in the record before the judge, which might include expert
reports or opinions about the state of foreign law and the organization of and procedure
in foreign courts. Issues of fact relevant to jurisdiction must be settled in this context,
often on a prima facie basis. These constraints underline the delicate role of the motion
judges who must consider these issues.
[73] Given the nature of the relationships governed by private international law, the
framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made
up “on the fly” on a case-by-case basis—however laudable the objective of individual
fairness may be. As La Forest J. wrote in Morguard, there must be order in the system,
and it must permit the development of a just and fair approach to resolving conflicts.
Justice and fairness are undoubtedly essential purposes of a sound system of private
international law. But they cannot be attained without a system of principles and rules
that ensures security and predictability in the law governing the assumption of jurisdiction
by a court. Parties must be able to predict with reasonable confidence whether a court
will assume jurisdiction in a case with an international or interprovincial aspect. The need
for certainty and predictability may conflict with the objective of fairness. An unfair set
of rules could hardly be considered an efficient and just legal regime. The challenge is to
reconcile fairness with the need for security, stability and efficiency in the design and
implementation of a conflict of laws system.
[74] The goal of the modern conflicts system is to facilitate exchanges and communi-
cations between people in different jurisdictions that have different legal systems. In this
sense, it rests on the principle of comity. But comity itself is a very flexible concept. It
cannot be understood as a set of well-defined rules, but rather as an attitude of respect
for and deference to other states and, in the Canadian context, respect for and deference
to other provinces and their courts (Morguard, at p. 1095; R. v. Hape, 2007 SCC 26, [2007]
2 S.C.R. 292, at para. 47). Comity cannot subsist in private international law without order,
which requires a degree of stability and predictability in the development and application
of the rules governing international or interprovincial relationships. Fairness and justice
are necessary characteristics of a legal system, but they cannot be divorced from the
requirements of predictability and stability which assure order in the conflicts system. In
the words of La Forest J. in Morguard, “what must underlie a modern system of private
international law are principles of order and fairness, principles that ensure security of
transactions with justice” (p. 1097; see also H.E. Yntema, “The Objectives of Private Inter-
national Law” (1957), 35 Can. Bar Rev. 721, at p. 741).
[75] The development and evolution of the approaches to the assumption of jurisdic-
tion reviewed above suggest that stability and predictability in this branch of the law of
conflicts should turn primarily on the identification of objective factors that might link
a legal situation or the subject matter of litigation to the court that is seized of it. At the
same time, the need for fairness and justice to all parties engaged in litigation must be
borne in mind in selecting these presumptive connecting factors. But in recent years, the
preferred approach in Canada has been to rely on a set of specific factors, which are given
presumptive effect, as opposed to a regime based on an exercise of almost pure and
individualized judicial discretion.
[76] For example, the statutes based on the CJPTA and Book Ten of the Civil Code of
Québec rely on specific facts linking the subject matter of the litigation to the jurisdiction.
These factors are considered in order to determine whether a real and substantial con-
nection exists for the purposes of the conflicts rules.
[77] In the CJPTA, in the case of tort claims, s. 10(g) refers to the situs of a tort as a
specific factor connecting the act with the jurisdiction. The identification of the situs of
a tort may well lead to further questions, to which the CJPTA does not offer immediate
answers, such as: Where did the acts that gave rise to the injury occur? Did they happen
in more than one place? Where was the damage suffered or where did it become apparent?
Other connecting factors might also become relevant, such as the existence of a contrac-
tual relationship (s. 10(e)) or a business carried on in the province (s. 10(h)). Jurisdiction
can also be presence-based, when the defendant resides in the province (s. 3(d)). Likewise,
the Civil Code of Québec contains a list of factors that must be considered in order to
determine whether a Quebec authority has jurisdiction over a delictual or quasi-delictual
action (art. 3148).
[78] Some authors take the view that the true core of the revised Van Breda-Charron
test consists of a set of objective factual connections. Likewise, the Court of Appeal stated
in Van Breda-Charron that the issue was essentially about connections: “The core of the real
and substantial connection test is the connection that the plaintiff ’s claim has to the forum
and the connection of the defendant to the forum respectively” (para. 84; T. Monestier,
“A ‘Real and Substantial’ Improvement? Van Breda Reformulates the Law of Jurisdiction
in Ontario,” in T.L. Archibald and R.S. Echlin, eds., Annual Review of Civil Litigation, 2010
(2010) 185, at pp. 204-7). In my view, identifying a set of relevant presumptive connecting
factors and determining their legal nature and effect will bring greater clarity and predict-
ability to the analysis of the problems of assumption of jurisdiction, while at the same
time ensuring consistency with the objectives of fairness and efficiency that underlie this
branch of the law.
[79] From this perspective, a clear distinction must be maintained between, on the
one hand, the factors or factual situations that link the subject matter of the litigation and
the defendant to the forum and, on the other hand, the principles and analytical tools,
such as the values of fairness and efficiency or the principle of comity. These principles
and analytical tools will inform their assessment in order to determine whether the real
and substantial connection test is met. However, jurisdiction may also be based on
traditional grounds, like the defendant’s presence in the jurisdiction or consent to submit
to the court’s jurisdiction, if they are established. The real and substantial connection test
does not oust the traditional private international law bases for court jurisdiction.
[80] Before I go on to consider a list of presumptive connecting factors for tort cases,
I must define the legal nature of the list. It will not be exhaustive. Rather, it will, first of
all, be illustrative of the factual situations in which it will typically be open to a court to
assume jurisdiction over a matter. These factors therefore warrant presumptive effect, as
the Court of Appeal held in Van Breda-Charron (para. 109). The plaintiff must establish
that one or more of the listed factors exists. If the plaintiff succeeds in establishing this,
the court might presume, absent indications to the contrary, that the claim is properly
before it under the conflicts rules and that it is acting within the limits of its constitutional
jurisdiction (J. Walker, “Reforming the Law of Crossborder Litigation: Judicial Jurisdic-
tion,” consultation paper for the Law Commission of Ontario (March 2009), at pp. 19-20
(online)). Although the factors set out in the list are considered presumptive, this does
not mean that the list of recognized factors is complete, as it may be reviewed over time
and updated by adding new presumptive connecting factors.
[81] The presumption with respect to a factor will not be irrebuttable, however. The
defendant might argue that a given connection is inappropriate in the circumstances of
the case. In such a case, the defendant will bear the burden of negating the presumptive
effect of the listed or new factor and convincing the court that the proposed assumption
of jurisdiction would be inappropriate. If no presumptive connecting factor, either listed
or new, applies in the circumstances of a case or if the presumption of jurisdiction result-
ing from such a factor is properly rebutted, the court will lack jurisdiction on the basis of
the common law real and substantial connection test. I will elaborate on each of these
points below.
(a) List of Presumptive Connecting Factors

[82] Jurisdiction must—irrespective of the question of forum of necessity, which I
will not discuss here—be established primarily on the basis of objective factors that con-
nect the legal situation or the subject matter of the litigation with the forum. The Court
of Appeal was moving in this direction in the cases at bar. This means that the courts must
rely on a basic list of factors that is drawn at first from past experience in the conflict of
laws system and is then updated as the needs of the system evolve. Abstract concerns for
order, efficiency or fairness in the system are no substitute for connecting factors that give
rise to a “real and substantial” connection for the purposes of the law of conflicts.
[83] At this stage, I will briefly discuss certain connections that the courts could use
as presumptive connecting factors. Like the Court of Appeal, I will begin with a number
of factors drawn from rule 17.02 of the Ontario Rules of Civil Procedure. These factors
relate to situations in which service ex juris is allowed, and they were not adopted as
conflicts rules. Nevertheless, they represent an expression of wisdom and experience
drawn from the life of the law. Several of them are based on objective facts that may also
indicate when courts can properly assume jurisdiction. They are generally consistent with
the approach taken in the CJPTA and with the recommendations of the Law Commission
of Ontario, although some of them are more detailed. They thus offer guidance for the
development of this area of private international law.
[84] I would not include general principles or objectives of the conflicts system, such
as fairness, efficiency or comity, in this list of presumptive connecting factors. These
systemic values may influence the selection of factors or the application of the method of
resolution of conflicts. Concerns for the objectives of the conflicts system might rule out
reliance on some particular facts as connecting factors. But they should not themselves
be confused with the factual connections that will govern the assumption of jurisdiction.
[85] The list of presumptive connecting factors proposed here relates to claims in tort
and issues associated with such claims. It does not purport to be an inventory of connect-
ing factors covering the conditions for the assumption of jurisdiction over all claims
known to the law.
[86] The presence of the plaintiff in the jurisdiction is not, on its own, a sufficient
connecting factor. (I will not discuss its relevance or importance in the context of the
forum of necessity doctrine, which is not at issue in these appeals.) Absent other con-
siderations, the presence of the plaintiff in the jurisdiction will not create a presumptive
relationship between the forum and either the subject matter of the litigation or the
defendant. On the other hand, a defendant may always be sued in a court of the jurisdic-
tion in which he or she is domiciled or resident (in the case of a legal person, the location
of its head office).
[87] Carrying on business in the jurisdiction may also be considered an appropriate
connecting factor. But considering it to be one may raise more difficult issues. Resolving
those issues may require some caution in order to avoid creating what would amount to
forms of universal jurisdiction in respect of tort claims arising out of certain categories
of business or commercial activity. Active advertising in the jurisdiction or, for example,
the fact that a Web site can be accessed from the jurisdiction would not suffice to establish
that the defendant is carrying on business there. The notion of carrying on business
requires some form of actual, not only virtual, presence in the jurisdiction, such as main-
taining an office there or regularly visiting the territory of the particular jurisdiction. But
the Court has not been asked in this appeal to decide whether and, if so, when e-trade in
the jurisdiction would amount to a presence in the jurisdiction. With these reservations,
“carrying on business” within the meaning of rule 17.02(p) may be an appropriate con-
necting factor.
[88] The situs of the tort is clearly an appropriate connecting factor, as can be seen
from rule 17.02(g), and from the CJPTA, the Civil Code of Québec and the jurisprudence
of this Court since Tolofson. The difficulty lies in locating the situs, not in acknowledging
the validity of this factor once the situs has been identified. Claims related to contracts
made in Ontario would also be properly brought in the Ontario courts (rule 17.02(f)(i)).
[89] The use of damage sustained as a connecting factor may raise difficult issues. For
torts like defamation, sustaining damage completes the commission of the tort and often
tends to locate the tort in the jurisdiction where the damage is sustained. In other cases,
the situation is less clear. The problem with accepting unreservedly that if damage is
sustained at a particular place, the claim presumptively falls within the jurisdiction of the
courts of the place, is that this risks sweeping into that jurisdiction claims that have only
a limited relationship with the forum. An injury may happen in one place, but the pain
and inconvenience resulting from it might be felt in another country and later in a third
one. As a result, presumptive effect cannot be accorded to this connecting factor.
[90] To recap, in a case concerning a tort, the following factors are presumptive con-
necting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the province.
(b) Identifying New Presumptive Connecting Factors

[91] As I mentioned above, the list of presumptive connecting factors is not closed.
Over time, courts may identify new factors which also presumptively entitle a court to
assume jurisdiction. In identifying new presumptive factors, a court should look to con-
nections that give rise to a relationship with the forum that is similar in nature to the ones
which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized presumptive connecting
factors;
(b) Treatment of the connecting factor in the case law;
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private international law of other legal
systems with a shared commitment to order, fairness and comity.
[92] When a court considers whether a new connecting factor should be given pre-
sumptive effect, the values of order, fairness and comity can serve as useful analytical tools
for assessing the strength of the relationship with a forum to which the factor in question
points. These values underlie all presumptive connecting factors, whether listed or new.
All presumptive connecting factors generally point to a relationship between the subject
matter of the litigation and the forum such that it would be reasonable to expect that the
defendant would be called to answer legal proceedings in that forum. Where such a
relationship exists, one would generally expect Canadian courts to recognize and enforce
a foreign judgment on the basis of the presumptive connecting factor in question, and
foreign courts could be expected to do the same with respect to Canadian judgments.
The assumption of jurisdiction would thus appear to be consistent with the principles of
comity, order and fairness.
[93] If, however, no recognized presumptive connecting factor—whether listed or
new—applies, the effect of the common law real and substantial connection test is that
the court should not assume jurisdiction. In particular, a court should not assume juris-
diction on the basis of the combined effect of a number of non-presumptive connecting
factors. That would open the door to assumptions of jurisdiction based largely on the
case-by-case exercise of discretion and would undermine the objectives of order, certainty
and predictability that lie at the heart of a fair and principled private international law
system.
[94] Where, on the other hand, a recognized presumptive connecting factor does
apply, the court should assume that it is properly seized of the subject matter of the litiga-
tion and that the defendant has been properly brought before it. In such circumstances,
the court need not exercise its discretion in order to assume jurisdiction. It will have
jurisdiction unless the party challenging the assumption of jurisdiction rebuts the pre-
sumption resulting from the connecting factor. I will now turn to this issue.
(c) Rebutting the Presumption of Jurisdiction

[95] The presumption of jurisdiction that arises where a recognized connecting fac-
tor—whether listed or new—applies is not irrebuttable. The burden of rebutting the
presumption of jurisdiction rests, of course, on the party challenging the assumption of
jurisdiction. That party must establish facts which demonstrate that the presumptive
connecting factor does not point to any real relationship between the subject matter of
the litigation and the forum or points only to a weak relationship between them.
[96] Some examples drawn from the list of presumptive connecting factors applicable
in tort matters can assist in illustrating how the presumption of jurisdiction can be rebut-
ted. For instance, where the presumptive connecting factor is a contract made in the
province, the presumption can be rebutted by showing that the contract has little or
nothing to do with the subject matter of the litigation. And where the presumptive con-
necting factor is the fact that the defendant is carrying on business in the province, the
presumption can be rebutted by showing that the subject matter of the litigation is
unrelated to the defendant’s business activities in the province. On the other hand, where
the presumptive connecting factor is the commission of a tort in the province, rebutting
the presumption of jurisdiction would appear to be difficult, although it may be possible
to do so in a case involving a multi-jurisdictional tort where only a relatively minor ele-
ment of the tort has occurred in the province.
[97] In each of the above examples, it is arguable that the presumptive connecting
factor points to a weak relationship between the forum and the subject matter of the litiga-
tion and that it would accordingly not be reasonable to expect that the defendant would
be called to answer proceedings in that jurisdiction. In such circumstances, the real and
substantial connection test would not be satisfied and the court would lack jurisdiction
to hear the dispute.
[98] However, where the party resisting jurisdiction has failed to rebut the presump-
tion that results from a presumptive connecting factor—listed or new—the court must
acknowledge that it has jurisdiction and hold that the action is properly before it. At this
point, it does not exercise its discretion to determine whether it has jurisdiction, but only
to decide whether to decline to exercise its jurisdiction should forum non conveniens be
raised by one of the parties.
[99] I should add that it is possible for a case to sound both in contract and in tort or
to invoke more than one tort. Would a court be limited to hearing the specific part of the
case that can be directly connected with the jurisdiction? Such a rule would breach the
principles of fairness and efficiency on which the assumption of jurisdiction is based. The
purpose of the conflicts rules is to establish whether a real and substantial connection
exists between the forum, the subject matter of the litigation and the defendant. If such
a connection exists in respect of a factual and legal situation, the court must assume
jurisdiction over all aspects of the case. The plaintiff should not be obliged to litigate a
tort claim in Manitoba and a related claim for restitution in Nova Scotia. That would be
incompatible with any notion of fairness and efficiency.
[100] To recap, to meet the common law real and substantial connection test, the party
arguing that the court should assume jurisdiction has the burden of identifying a pre-
sumptive connecting factor that links the subject matter of the litigation to the forum. In
these reasons, I have listed some presumptive connecting factors for tort claims. This list
is not exhaustive, however, and courts may, over time, identify additional presumptive
factors. The presumption of jurisdiction that arises where a recognized presumptive con-
necting factor—whether listed or new—exists is not irrebuttable. The burden of rebutting
it rests on the party challenging the assumption of jurisdiction. If the court concludes
that it lacks jurisdiction because none of the presumptive connecting factors exist or
because the presumption of jurisdiction that flows from one of those factors has been
rebutted, it must dismiss or stay the action, subject to the possible application of the forum
of necessity doctrine, which I need not address in these reasons. If jurisdiction is estab-
lished, the claim may proceed, subject to the court’s discretion to stay the proceedings on
the basis of the doctrine of forum non conveniens. I will now turn to that issue.
[LeBel J proceeded to discuss the doctrine of forum non conveniens (see Chapter 7).
Applying the principles discussed, Ontario was found to have jurisdiction on the basis of
a contract having been made in the province.]
Court v Debaie
2012 ABQB 640
ROSS J:
I. Introduction
[1] In applications in each of these companion cases, the Defendants seek to set aside
service outside of Alberta of the Statements of Claim upon them. Alternatively, the
Defendants seek to dismiss or stay the actions on the grounds that there is no real and
substantial connection with Alberta or pursuant to the doctrine of forum non conveniens.
II. Facts
[2] The Plaintiffs, Cheryl Court and Twyla Campbell, live in Alberta. They are the
daughters of Mr. Ruf, who also lives in Alberta. The Defendants, Carolyn Debaie and
Wendy MacKay, are, respectively, the daughter and sister of Mrs. Ruf. Mr. and Mrs. Ruf
lived together in Alberta at the time of the alleged events. Ms. Debaie lives in Nova Scotia
and Ms. MacKay lives in Ontario.
[3] The Statements of Claim in these actions allege that, in January 2012, Ms. Debaie
and Ms. MacKay published defamatory comments about the Plaintiffs on their Facebook
pages. The defamatory comments related to the Plaintiffs’ alleged treatment of Mrs. Ruf.
[4] The Statements of Claim allege that at the time the Defendants posted the comments
on their Facebook pages, the Facebook options on the pages were set to open access. As
a result, anyone with an internet connection could view the comments. The posted com-
ments would also appear on the “wall” of the Defendants’ Facebook “friends.” Ms. Debaie
is alleged to have had 286 Facebook friends and Ms. MacKay to have had 51 Facebook
friends at the time of the postings.
[5] Ms. Debaie filed an affidavit in the application stating that only seven of her 289
Facebook friends resided in Alberta in January 2012. Six of the seven Facebook friends
had no connection with the Plaintiffs and one was the Plaintiff, Ms. Court. Ms. MacKay
deposed that only one of her 51 Facebook friends resided in Alberta in January 2012.
[6] The Plaintiffs also filed affidavits. They stated that in January 2012 they accessed the
Defendants’ Facebook pages and viewed posts containing defamatory statements against
them. They gave evidence that the posts were “public” and therefore visible to anyone
with access to the internet. They also stated that they were advised by their sister, Karen
Hache, who lives in Canmore, Alberta, and believe that Ms. Hache viewed the Facebook
pages and saw the defamatory comments. Ms. Hache did not swear an affidavit and the
admissibility of the Plaintiffs’ hearsay evidence is an issue in the Defendants’ applications.
III. Real and Substantial Connection

(i) Law
[7] Service outside Alberta and in Canada is governed by Rule 11.25(1) of the Alberta
Rules of Court, Alta Reg 124/2010 (“New Rules”). Rule 11.25(1) reads:
11.25(1) A commencement document may be served outside Alberta and in Canada
only if
(a) a real and substantial connection exists between Alberta and the facts on which a
claim in the action is based, and
(b) the commencement document discloses the facts in support and specifically refers
to the grounds for service of the document outside Alberta and in Canada.
[8] Rule 11.25(3) sets out a number of grounds for service outside Alberta. These are
circumstances in which a real and substantial connection is presumed to exist. These
include where the claim relates to a tort committed in Alberta: New Rules, Rule 11.25(3)(d).
[9] The principles governing a real and substantial connection and these applications
have been reviewed by the Supreme Court of Canada (“SCC”) in a series of recent decisions.
[10] In Club Resorts Ltd v Van Breda, 2012 SCC 17 (“Club Resorts”), the SCC held
that the common law test of real and substantial connection depends on the demonstra-
tion of a presumptive connecting factor, such as the place where a tort was committed.
The lack of a presumptive connecting factor cannot be replaced by a case-by-case exercise
of discretion: Club Resorts at para 70.
[11] The SCC reviewed a number of possible presumptive connecting factors relating
to claims in tort and held that neither the presence of the plaintiff in the jurisdiction, nor
sustaining damage in the jurisdiction, constitutes a presumptive connecting factor: Club
Resorts at paras 86 and 89. In a case concerning a tort, the presumptive connecting factors
that entitle a court to assume jurisdiction over a dispute are:
(Club Resorts at para 90.)
[12] In the SC actions, the only possible connecting factor is the place of the tort.
[13] The SCC applied the Club Resorts analytical framework to the tort of defamation
in Éditions Écosociété Inc v Banro Corp, 2012 SCC 18 (“Éditions Écosociété”). The SCC
held that the tort of defamation is “crystallized upon publication of the libellous material”
and “publication occurs when libellous material is read by a third party”: Éditions Éco-
société at para 34. Where libellous material is printed in a book that is circulated in a
library, there is an inference of publication establishing jurisdiction: Éditions Écosociété
at para 34.
[14] In Éditions Écosociété the plaintiff provided evidence that 15 copies of the book
were circulating in Ontario libraries and one copy had been checked out. This entitled
the Ontario court to take jurisdiction:
38 Here, the alleged tort of defamation occurred in Ontario. Noir Canada was distributed
in Ontario. At this stage of the proceedings, the plaintiff need not show evidence of harm or
that the book was read. The plaintiff need only allege publication and its allegations should
be accepted as pleaded unless contradicted by evidence adduced by the defendants.
(Éditions Écosociété at para 38).
[15] In Breeden v Black, 2012 SCC 19 (“Breeden”), the SCC applied Club Resorts in a
case where allegedly defamatory material had been posted in press releases on a company
website. The SCC held:
20 It is well established in Canadian law that the tort of defamation occurs upon publica-
tion of a defamatory statement to a third party. In this case, publication occurred when the
impugned statements were read, downloaded and republished in Ontario by three newspapers.
(Breeden v Black at para 20).
[16] A question that is not addressed by these decisions is whether, in the case of
publication on the internet, there must be evidence that statements were read or down-
loaded, or whether there may be an inference of publication in certain circumstances,
analogous to the presence of books in a library.
[17] This question was addressed in a concurring decision by Deschamps J in the case
of Crookes v Newton, 2011 SCC 47 (“Crookes v Newton SCC”), an appeal of a trial decision.
The issue in Crookes v Newton SCC was whether posting an internet hyperlink to defama-
tory material constituted publication, particularly in the absence of evidence as to whether
someone had actually used the hyperlink or read the defamatory material. The majority
of the SCC held that a hyperlink, by itself, is not “publication” of the content to which it
refers. As a result, the majority of the Court did not consider whether proof of publication
required evidence that someone had used the hyperlink or read the material.
[18] However, in her concurring decision, Deschamps J commented on publication
on the internet:
55 … “Publication” has an established meaning in the law of defamation. It refers to the
communication of defamatory information in such a way that it is “made known to a third
party”: Gaskin v. Retail Credit Co., [1965] S.C.R. 297, at p. 299. Professor Brown explains that
“[i]t is a bilateral act by which the publisher makes available to a reader, listener or observer
in a comprehensible form the defamatory information” (R.E. Brown, Brown on Defamation
(2nd ed. (loose-leaf)), at para. 7.2). Thus, publication has two components: (1) an act that
makes the defamatory information available to a third party in a comprehensible form, and
(2) the receipt of the information by a third party in such a way that it is understood.
62 … Publication is not complete until someone other that the person referred to receives
and understands the defamatory information … . In the context of the internet, a simple
reference, absent evidence that someone actually viewed and understood the defamatory
information which it directs third parties, is not publication of that content.
63 … [P]ublication is not complete unless the plaintiff adduces evidence that satisfies,
on a balance of probabilities, the requirements of the second component of publication: that
a third party received and understood the information to which reference is made.
94 Whether defamatory information is readily available is a question of fact. A court
asked to infer that information has been made readily available should consider all circum-
stances related to the case with which a third party would be able to gain access to it. Defama-
tory information is readily available if, in the circumstances, it can be immediately accessed.
In other words, there must be no meaningful barrier that would prevent a third party from
receiving it.
109 … [T]he requirements of the second component of publication can be satisfied either
by adducing direct evidence or, and this is more likely, by asking the court to draw an infer-
ence. Inferring that defamatory information has been read and understood is not new. In
Gaskin, the Court, quoting Gatley on Libel and Slander, observed (at p. 300):
It is not necessary for the plaintiff in every case to prove directly that the words
complained of were brought to the actual knowledge of some third person. If he proves
facts from which it can reasonably be inferred that the words were brought to the
knowledge of some third person, he will establish a prima facie case.
[19] The issue of publication on the internet had also been discussed by the British
Columbia Court of Appeal. In Crookes v Newton, 2009 BCCA 392 (“Crookes v Newton
CA”), Saunders JA, for the majority, held that proof of publication of material on the
internet requires proof that someone has read the material:
80 There are two aspects to the publication element of the tort of defamation. The first,
relating to the defendant as publisher, concerns the act of promulgating the impugned item.
The second, relating to the third party receiver of the impugned item, concerns the receipt
of that item by a person within the court’s jurisdiction. (I refer to the issue of jurisdiction
because publication, to be actionable, must be within this jurisdiction, and publication of
internet material occurs where the words are read. …)
[20] Mr. Crookes also commenced a separate defamation action against Yahoo! Inc.
(“Yahoo”): Crookes v Yahoo, 2007 BCSC 1325 (Crooks v Yahoo SC), aff ’d 2008 BCCA 165.
Yahoo was not the author of the allegedly defamatory material, but was sued for having
provided the means by which the material was published: an internet service that allows
users to create online discussion groups (“GPC-Members Group”). The suit was dismissed
for lack of jurisdiction because Mr. Crookes had not provided evidence that the material
had been downloaded or read in British Columbia. In Crookes v Yahoo SC, the application
judge held:
26 With respect to internet communications, the site of the alleged defamation is where
the damage to reputation occurs … . It is when a person downloads the impugned material
from the internet that the damage to the reputation may be done, and it is at that time and
place that the tort of defamation is committed.
29 Mr. Crookes must show that alleged defamatory postings on the GPC-Members
website, hosted by Yahoo on servers outside British Columbia, were accessed, downloaded
and read by someone in British Columbia, thereby damaging his reputation in British Col-
umbia. Mr. Crookes has neither alleged nor tendered any evidence that any individual in
British Columbia has downloaded and read the impugned material posted on the GPC-
Members website.
30 Publication is an essential element for an action in defamation. In this case, the plead-
ings are deficient as there is no pleading alleging the purported defamatory postings were
published in British Columbia … . There is no evidence anyone read the material in British
Columbia and there is no basis for this court to draw that inference.
[21] The Court of Appeal affirmed the decision, noting that while publication on a
public website such as a Government of Canada website might support a presumption of
publication, “the mere fact a statement was posted on a website with the kind of restricted
access there was in this case” did not support the presumption it was read by anyone in
British Columbia: Crookes v Yahoo, 2008 BCCA 165 at para 6 (Crookes v Yahoo CA).
(ii) Defendants’ Position

[22] The Defendants submit the service outside of Alberta of the Statements of Claim
should be set aside. The Defendants argue that the British Columbia decisions in Crookes
v Yahoo SC and Crookes v Newton CA, and the concurring decision of Deschamps J in
Crookes v Newton SCC, correctly describe the requirement of proof of publication as a
condition of jurisdiction in a defamation action. Following those decisions, the Defend-
ants argue that evidence that statements were posted on Facebook is not evidence that
the statements were read by anyone in Alberta.
[23] The only additional evidence that the Plaintiffs have provided is their own affi-
davits where they state that their sister read the comments in Alberta. The Defendants
argue that this evidence is insufficient on two grounds. First, that it is hearsay and second,
that it fails to explain how the Plaintiffs’ sister came to access the material. If the Plaintiffs’
sister accessed the Facebook comments because of the Plaintiffs’ actions, this would
amount to republication by the Plaintiffs for which the Defendants would not be liable:
O(J) v Strathcona-Tweedsmuir School, 2010 ABQB 559 at para 51.
(iii) Procedural and Substantive Context

[24] The Defendants’ arguments fail to consider important procedural and substantive
points.
[25] The procedural context in which the issue of publication arises is important. The
Defendants’ applications seek to set aside the service of the Statements of Claim and to
dismiss the actions for lack of jurisdiction. In this context, the standard of proof of pub-
lication that would apply at trial, as discussed in Crookes v Newton SC and Crookes v
Newton CA, does not apply.
[26] As held in Éditions Écosociété, “[a]t this stage of the proceedings, the plaintiff
need not show evidence of harm”: Éditions Écosociété at para 38. The Plaintiffs do not
need to prove that the comments were read and understood by someone as referring to
the Plaintiffs. Instead the Plaintiffs’ “need only allege publication and its allegations should
be accepted as pleaded unless contradicted by evidence adduced by the defendants”:
Éditions Écosociété at para 38.
[27] The evidence supporting the Defendants’ position, or the lack of evidence sup-
porting the Plaintiffs’ position, must be clear in the procedural context of these applica-
tions. In responding to the application to set aside service outside the jurisdiction, the
Plaintiffs need to make out only a “good arguable case.” This standard, which applied to
justify the granting of a service ex juris order under Rule 30 of the Alberta Rules of Court,
Alta Reg 390/1968 (“Old Rules”), continues to apply under the New Rules in determining
whether service outside Alberta ought to be set aside: Scott & Associates Engineering Ltd
v Ghost Pine Windfarm LP, 2011 ABQB 630 at para 40.
[28] Essentially the same standard, the demonstration of a “genuine issue for trial,”
applies to the Plaintiffs’ response to the Defendants’ application to dismiss. Again, the
standard has not changed with the New Rules: Kwan v Superfly Inc, 2011 ABQB 343 at
para 20 and cases cited therein.
[29] Another consequence of the procedural context is that hearsay evidence is admis-
sible under Rule 13.18 of the New Rules:
13.18(1) An affidavit may be sworn
(a) on the basis of personal knowledge, or
(b) on the basis of information known to the person swearing the affidavit and that
person’s belief.
(2) If an affidavit is sworn on the basis of information and belief, the source of the infor-
mation must be disclosed in the affidavit.
(3) If an affidavit is used in support of an application that may dispose of all or part of a
claim, the affidavit must be sworn on the basis of the personal knowledge of the person
swearing the affidavit.
[30] This compares with Rule 305 of the Old Rules which allowed hearsay evidence
on “interlocutory motions”:
305(1) Affidavits shall be confined to the statement of facts within the knowledge of the
deponent.
(2) In an action or proceeding to which a corporation is a party any affidavit required
by these Rules to be made by a party may be made by an officer, servant or agent of the cor-
poration having knowledge of the facts required to be deposed to, who shall state therein
that he has that knowledge.
(3) On interlocutory motions affidavits containing statements as to the belief of the
deponent with the source and grounds thereof may be admitted.
[31] While there are some differences in wording, case law under the Old Rules
remains instructive in interpreting Rule 13.18: Renfrew Insurance Ltd v Donald, 2012
ABQB 228 at para 19.
[32] An application to set aside service outside the jurisdiction does not, in and of
itself, dispose of a claim. Of course, if the application is not granted, the case will continue.
But even if the application is granted, if the time for service of the statement of claim has
not expired, the plaintiff may obtain further evidence and serve again: Thod Investment
Ltd (cob Jeff Parry Promotions) v André-Philippe Gagnon Inc, 2005 ABQB 601 at para 16.
In addition, the doctrine of res judicata does not apply to a second application for service
ex juris, although it is subject to the exercise of judicial discretion: Stainton v Milner Fraser,
1999 ABQB 575 at para 19, Talbot v Pan Ocean Oil Corporation and Pan Ocean Oil Ltd
(1977), 3 Alta LR (2nd) 354 at para 9 (ABCA).
[33] It is true that the applicant who seeks to dismiss an action on the ground of lack
of jurisdiction seeks a final disposition of the action, and, like other applicants for sum-
mary judgment, cannot rely on hearsay: Airco Aircraft Charters Ltd v Edmonton Regional
Airports Authority, 2010 ABQB 397 at para 25, aff ’d 2010 ABCA 354, Yellowbird v Samson
Cree Nation No 444, 2003 ABQB 535 at para 16.
[34] However, the respondent to the application, who does not seek to dispose of the
action but to have it proceed to trial, may rely on hearsay: Airco Aircraft Charters Ltd v
Edmonton Regional Airports Authority at para 26, Murphy Oil Co v Predator Corp, 2006
ABCA 69 at para 38.
[35] This practice under the Old Rules is consistent with the wording of Rule 13.18(3),
which provides that “[i]f an affidavit is used in support of an application that may dispose
of all or part of a claim, the affidavit must be sworn on the basis of the personal knowledge
of the person swearing the affidavit” (emphasis added). Rule 13.18 does not require that
an affidavit used in response to such an application be based on personal knowledge. Thus
both the wording of Rule 13.18(3), and the previous practice, allow the use of hearsay in
a respondent’s affidavit.
[36] The substantive point which is ignored in the Defendants’ argument is that
publication need not always be proved by direct evidence. Publication may be inferred
from other evidence in appropriate cases. Justice Deschamps was specific about this and
held that “if a plaintiff proves facts from which it is reasonable to infer that the words
were brought to the knowledge of some third person, that will establish a prima facie case
of publication”: Crookes v Newton SCC at para 109.
[37] The Defendants’ reliance on Crookes v Yahoo as establishing that the Plaintiffs
must provide direct evidence that the defamatory material was read by someone in Alberta
is misplaced. Both courts in that case specifically acknowledged both the role of pleadings
and of inferences in considering whether an action should be dismissed for lack of juris-
diction. The British Columbia Supreme Court stated:
30 In this case, the pleadings are deficient as there is no pleading alleging the purported
defamatory postings were published in British Columbia … . There is no evidence anyone
read the material in British Columbia and there is no basis for this court to draw that
inference.
(Crookes v Yahoo SC at para 30).
[38] The Court of Appeal held that the application judge correctly dismissed the action
on the grounds that the “pleaded case was deficient and no evidence had been adduced
on the application that the statements had been read in this province, or that would permit
an inference to that effect to be drawn”: Crooks v Yahoo CA at para 7.
(iv) Analysis
[39] Applying these principles to the Defendants’ applications, I note firstly that the
pleadings in these actions are deficient. The Statements of Claim allege that the Defendants
live in Nova Scotia and Ontario, and that they published the defamatory words by way
of their Facebook pages. It is alleged that the Facebook pages were set to open access so
that anyone could view the defamatory words, that the words would appear on the Face-
book pages of “friends” linked to the Defendants’ Facebook pages, and that the words
were commented upon by other persons. However, there is no allegation that the words
were published in Alberta.
[40] During the applications, evidence was provided by the Defendants that each of
them had Facebook friends residing in Alberta at the time of the postings—seven in the
case of Ms. Debaie and one in the case of Ms. MacKay. The Plaintiffs gave evidence that
they were advised by their sister, Ms. Hache who lives in Canmore, Alberta, and believe
that she viewed the Defendants’ Facebook pages and saw the defamatory comments. This
evidence responds to the deficiency in the pleadings and provides some direct evidence
of publication in Alberta, as well as evidence from which an inference can be drawn
establishing a prima facie case that the material was read by a person or persons in Alberta.
[41] The Plaintiffs’ evidence is admissible hearsay as it complies with the requirements
of Rule 13.18 of the New Rules by stipulating the source of the hearsay and the Plaintiffs’
belief in it. The Defendants argue that, even if admissible, the evidence should be given
no weight as it does not state how Ms. Hache became aware of the postings. The Defend-
ants submit I should assume that it was through republication by the Plaintiffs.
[42] However, the Defendants did not cross-examine the Plaintiffs on their affidavits.
The Plaintiffs are certainly able to give evidence about whether or not they republished
the postings to their sister; the Defendants were not disadvantaged by having the Plaintiffs,
rather than their sister, available for cross-examination on this subject. In the absence of
cross-examination, and given that the Plaintiffs are required to establish only a triable or
arguable case of publication in Alberta, I am prepared to rely on their affidavits as some
direct evidence that the postings were read in Alberta.
[43] More persuasive evidence of publication in Alberta is, in my view, provided by
the Defendants’ own evidence that each of them had at least one Facebook friend in
Alberta at the time of the postings. Combined with the Plaintiffs undisputed evidence
that the consequence of this is that the Defendants’ postings would appear on the “wall”
of those friends’ Facebook pages, without any intervening action by the friends, justifies
an inference that the postings were read by those friends. The postings were thus pub-
lished in Alberta. This is a different situation from a hyperlink, or even a general website,
in which potential readers must take action to access the posted material. None of the
cases cited by the Defendants involved a similar situation, in which residents of the prov-
ince, who had already signed up for Facebook pages of their own, would have the allegedly
defamatory words automatically appear on their computer screens when they next signed
in to their own Facebook pages.
(v) Conclusion
[44] I conclude that the evidence on these applications provides support for an argu-
able or triable case that the allegedly defamatory material was published in Alberta. This
is sufficient to establish the presumptive connecting factor of a tort committed in Alberta

and, therefore, a real and substantial connection between this jurisdiction and the action.
The applications to set aside service outside Alberta and the applications to dismiss the
actions for lack of jurisdiction are dismissed.
IV. Forum Non Conveniens

[45] In the alternative, the Defendants seek an order staying the actions on the
grounds of forum non conveniens.
[The discussion of forum non conveniens is omitted. Ross J concluded that the defendants
had not persuaded her that either Nova Scotia or Ontario would be a more suitable
forum.]
NOTE
For other cases concerning procedural considerations arising on jurisdiction motions, see:
AG Armeno Mines and Minerals Inc v Newmont Gold, 2000 BCCA 405, 190 DLR (4th) 173 and
MTU Maintenance Canada Ltd v Kuehne & Nagel International Ltd, 2007 BCCA 552, 287 DLR
(4th) 215.
Tamminga v Tamminga
2014 ONCA 478 (footnote incorporated into text)
STRATHY JA (Juriansz and Tulloch JJA concurring):
Introduction
[1] An Ontario resident was injured when she fell off a truck in Alberta. She com-
menced an action in the Ontario Superior Court of Justice against the owner and operator
of the truck, who lives in Alberta, and a corporate co-owner of the truck, which is regis-
tered and carries on business in Alberta. She also sued her Ontario automobile insurer.
The issue is whether her insurance contract is a sufficient “presumptive connecting factor”
under Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572 to give this court
jurisdiction over the non-resident defendants. For the reasons that follow, I conclude that
it is not and would dismiss this appeal from the motion judge’s order staying the action
against those defendants.
The Facts
[2] The appellant, Karen Tamminga, lives in Ontario. She was injured in Alberta while
a passenger on a truck operated by her relative, the respondent William Tamminga. Mr.
Tamminga and his company, the respondent Tamminga Farms Inc., owned the truck. Mr.
Tamminga is an Alberta resident and Tamminga Farms carries on business exclusively
in Alberta.
[3] The appellant had surgery in Alberta after the accident and returned to Ontario
where she had additional treatments.
[4] Several months after the accident, the appellant commenced an action against the
respondents in the Superior Court of Justice. She sued State Farm in the same action,
claiming uninsured or underinsured coverage under her standard automobile policy. [The
respondents have not provided any information concerning their insurance coverage, if
any. Accordingly, it is uncertain whether State Farm will be required to provide uninsured
or underinsured coverage.] In response, the respondents brought a motion to stay the
proceeding based on absence of jurisdiction or, alternatively, forum non conveniens. The
appellant subsequently amended her pleading to include a claim against State Farm for
statutory accident benefits.
The Motion Judge’s Reasons

[5] The motion judge granted the respondents’ motion and stayed the proceeding
against them. She concluded the court lacked jurisdiction simpliciter over the respondents.
The appellant’s residence in Ontario and the damages she suffered in Ontario were not
presumptive connecting factors under Van Breda. Nor was the fact that the respondents
might be proper parties to the claim against State Farm.
[6] The motion judge rejected the appellant’s submission that the arrangement she
made with Mr. Tamminga to visit him on his farm was a contractual connecting factor.
Nor was her insurance contract with State Farm a”contract connected with the dispute”
between the appellant and the respondents. The respondents were not parties to the
insurance contract and the appellant had a direct right of action against State Farm
without having to join the respondents.
[7] Having found the appellant had not discharged the burden of identifying a pre-
sumptive connecting factor, the motion judge stayed the action. Although not required
to address the forum conveniens issue, she found that Alberta was, in any event, the con-
venient forum.
[8] I will begin by summarizing the Van Breda decision.
Van Breda
[9] Van Breda is the leading authority on jurisdiction over non-resident tortfeasors
and torts occurring outside Ontario. There, the Supreme Court of Canada set out a
framework for the assumption of jurisdiction in tort cases that was intended to address
the need for certainty and predictability. It identified a list of connecting factors that would
permit the court to presumptively assume jurisdiction.
[10] Justice LeBel, who gave the judgment on behalf of the Supreme Court, identified
the following as presumptive connecting factors in tort cases, at para. 90:
[11] LeBel J. also identified certain factors that are not presumptively connecting. The
presence of the plaintiff in the jurisdiction is not a presumptive connecting factor: para. 86.
Nor is the fact that damages were sustained in the jurisdiction: para. 89. Nor is the com-
bined effect of a number of non-connecting factors: para. 93.
[12] Where a presumptive connecting factor is established, the burden shifts to the
defendant to show the connection between the subject matter of the litigation and the
forum is weak. Justice LeBel suggested that in the case of a contractual connecting factor,
the presumption of jurisdiction can be rebutted by showing that “the contract has little
or nothing to do with the subject matter of the litigation”: para. 96.
[13] If jurisdiction is established, the inquiry turns to forum conveniens.
[14] Justice LeBel noted that the list of presumptive connecting factors is not neces-
sarily complete. Over time, new factors may be identified that would give presumptive
jurisdiction. In identifying such factors, the court will look to the degree of similarity
between the connecting factor and the established factors, and the treatment of the
proposed connecting factor in the case law, in statute law and in private international law
and other legal systems: para. 91. The new presumptive connecting factor must “point to
a relationship between the subject matter of the litigation and the forum such that it would
be reasonable to expect that the defendant would be called to answer legal proceedings
in that forum”: para. 92. The strength of the relationship can be assessed using the values
of order, fairness and comity.
[15] Justice LeBel summarized the new approach at para. 100 as follows:
To recap, to meet the common law real and substantial connection test, the party arguing
that the court should assume jurisdiction has the burden of identifying a presumptive con-
necting factor that links the subject matter of the litigation to the forum. In these reasons, I
have listed some presumptive connecting factors for tort claims. This list is not exhaustive,
however, and courts may, over time, identify additional presumptive factors. The presumption
of jurisdiction that arises where a recognized presumptive connecting factor—whether listed
or new—exists is not irrebuttable. The burden of rebutting it rests on the party challenging
the assumption of jurisdiction. If the court concludes that it lacks jurisdiction because none
of the presumptive connecting factors exist or because the presumption of jurisdiction that
flows from one of those factors has been rebutted, it must dismiss or stay the action, subject
to the possible application of the forum of necessity doctrine, which I need not address in
these reasons. If jurisdiction is established, the claim may proceed, subject to the court’s
discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.
[16] The facts of Van Breda give some guidance about the role of a contract connected
with the dispute as a connecting factor. Ms. Van Breda sustained catastrophic injuries
while at a resort in Cuba, allegedly as a result of the negligence of the resort operator,
Club Resorts. Although she and her spouse were Ontario residents, they moved to Alberta
after the accident and then to British Columbia, where most of her damages and pain and
suffering occurred. Club Resorts was incorporated in the Cayman Islands. There was little
evidence of factual connections to Ontario and LeBel J. did not accept that Club Resorts’
advertising in Ontario gave rise to a connection.
[17] However, Ms. Van Breda’s spouse, Mr. Berg, was a professional squash player and
had a contractual relationship with a travel agency that recruited squash and tennis profes-
sionals for Club Resorts. Mr. Berg was to give lessons to guests at the resort in exchange
for free room and board for himself and Ms. Van Breda. Thus, LeBel J. found at para. 116
that Ontario had jurisdiction because “[a] contract was entered into in Ontario and a
relationship was thus created in Ontario between Mr. Berg, Club Resorts and Ms. Van
Breda, who was brought within the scope of this relationship by the terms of the contract.”
He added at para. 117 that “[T]he events that gave rise to the claim flowed from the
relationship created by the contract.” The contract was a presumptive connecting factor
that entitled the court to assume jurisdiction over the out-of-province defendant.
The Parties’ Positions on Appeal

[18] The appellant acknowledges that, absent her insurance contract with State Farm,
Van Breda does not support jurisdiction in this case. She does not suggest that there is
any basis for the recognition of a new presumptive connecting factor.
[19] The appellant submits the motion judge erred in finding that State Farm’s insur-
ance policy was not a “contract connected with the dispute” and thus a presumptive
connecting factor under Van Breda. She submits that the threshold to establish a presump-
tive connecting factor is a low one. Relying on the facts of Van Breda itself, she submits
that the defendant need not be a party to the contract. Moreover, the strength of the
connection between the contract and the dispute is a factor to be considered at the second
stage of the Van Breda analysis, when the defendant may rebut the connection, and not
the first stage. She says that, having established the presumptive connecting factor, the
onus was on the respondents to show that the connection was a weak one. The respond-
ents failed to discharge their burden and the action should have been permitted to proceed
in Ontario.
[20] The respondents submit the motion judge correctly found that the appellant’s
insurance contract was not connected to the dispute so as to bring them under Ontario’s
jurisdiction. Unlike Van Breda, where the plaintiff ’s injury occurred in the context of
performance of the contract, the insurance contract in this case had nothing to do with
the events giving rise to the tort claim. The insurance contract only became pertinent
after the tort had occurred. The appellant could pursue her direct right of action against
State Farm in Ontario without any need to involve the respondents. Even if the contract
were somehow connected to the tort claim, the speculative and contingent nature of the
claim against State Farm would make it a weak and hypothetical connection.
Analysis
[21] This court considered the contractual connecting factor in Export Packers Co. v.
SPI International Transportation, 2012 ONCA 481. The plaintiff, a dealer in food products,
had purchased a shipment of pork in Quebec and stored it temporarily in a warehouse
used by the vendor and operated by a Quebec company called EDN. The plaintiff then
sold the pork to a Florida company and contracted with the defendant, SPI, to arrange
for the transportation of the pork from EDN’s warehouse to Florida. SPI, in turn, engaged
an Ontario company to actually truck the cargo. Unfortunately, EDN mistakenly released
the cargo to a fraudster, who absconded with it.
[22] The plaintiff sued SPI in Ontario and SPI in turn brought third party proceedings
against EDN, asserting that it negligently released the cargo to the fraudster without
obtaining proper identification.
[23] This court affirmed the motion judge’s dismissal of the claim against EDN on the
basis of lack of jurisdiction. The appellant had argued that there were several contracts
connected with the dispute. This court noted, however, that the contracts in question had
no connection with the proposed third party:
The three contracts relied upon by the appellant relate to arrangements between the owner,
the broker and the proposed carrier of the cargo. They have no connection to EDN other
than they anticipate that the cargo would be picked up at EDN’s warehouse in Quebec. The
dispute in issue between SPI and EDN relates solely to the alleged negligence of EDN in
releasing the cargo. The contracts relied upon do not address the issue of release of the cargo
by EDN as storer. That dispute will be resolved according to the laws of Quebec. (para. 14)
[24] This court concluded, at para. 16, that there was no contract “sufficiently con-
nected” to the dispute to raise a presumption of a real and substantial connection to
Ontario. Moreover, the contract between EDN and its customer, the company that had
sold the pork to the plaintiff, was expressly subject to the law and jurisdiction of Quebec.
[25] In comparison with Export Packers Co., the contract in the present case is even
further removed from the events giving rise to the dispute. An automobile insurance
contract “anticipates” accidents generally, but the tortfeasor will not be identifiable in
advance. Unlike the contract in Van Breda, there is nothing that connects the appellant’s
insurance contract to the respondents. They are not parties to or beneficiaries of the
contract. The appellant was not visiting the farm in Alberta for any reason related to the
contract. The connection between the insurance policy and the dispute only arises in the
aftermath of the tort and its application is conditional on the outcome of the appellant’s
claim against the tortfeasors.
[26] In a word, there is no nexus between the insurance contract and the respondents.
[27] This conclusion is consistent with the decision of this court in Gajraj v. DeBernardo
(2002), 60 O.R. (3d) 68 (C.A.), one of the Muscutt companion cases. There, Sharpe J.A.,
writing for the court, held that the inclusion of a claim against the plaintiff ’s automobile
insurer did not serve to “bootstrap” jurisdiction over the non-resident defendants:
In my view, on the facts of this case, the claim against Allstate does not fortify the case for
assuming jurisdiction against the New York defendants. At this stage of the proceedings, the
claim against Allstate is entirely speculative in nature. Counsel for the plaintiffs conceded
that joining Allstate was a purely precautionary measure and that the plaintiffs do not at
present know whether or not the New York defendants have adequate insurance coverage.
It seems to me that this situation is very different from the situation in McNichol Estate v.
Woldnik (2001), 150 O.A.C. 68. In McNichol, the core of the plaintiff ’s claim was against the
domestic defendants and adding the foreign defendant was necessary to avoid a multiplicity
of proceedings. By contrast, here the core of the claim is against the New York defendants
and the claim against the Ontario defendant is entirely secondary and contingent. Jurisdiction
over claims against extra-provincial defendants should not be bootstrapped by such a second-
ary and contingent claim against a provincial defendant. (para. 20)
[28] It is also consistent with the prevailing line of authority in the Ontario Superior
Court of Justice. In three recent cases of Ontario residents involved in automobile acci-
dents in the state of New York, judges of that court have held that the plaintiff ’s insurance
policy is not a “contract connected with the dispute”: Misyura v. Walton, 2012 ONSC
5397; Paraie v. Cangemi, 2012 ONSC 6341; Mitchell v. Jeckovich, 2013 ONSC 7494. In
both Misyura and Paraie, the court was influenced by the speculative and contingent
nature of claims for uninsured and underinsured coverage, as discussed in Gajraj.
[29] An exception is Cesario v. Gondek, 2012 ONSC 4563, relied upon by the appellant,
but distinguished by the motion judge on the basis that the plaintiffs had been in two
accidents, there were joint tortfeasors allegedly responsible for the plaintiffs’ damages and
those damages were considered inseparable. She noted that the presence of the plaintiffs’
insurer in Ontario was not a factor that entered into the determination. The case was
clearly distinguishable, for those reasons.
[30] I conclude, therefore, that the motion judge correctly stayed the action against
the respondents.
[31] Both parties also made submissions on the issue of forum conveniens. As I would
dismiss the appeal on the jurisdictional ground, it is unnecessary to deal with this issue.
Disposition
[32] For these reasons, I would dismiss the appeal. The respondents are entitled to
their costs fixed at $7500, inclusive of disbursements and all applicable taxes.
JTG Management Services Ltd v Bank of Nanjing Co Ltd

2015 BCCA 200
KIRKPATRICK JA (Garson and Harris JJA concurring):

[1] The appellant, Bank of Nanjing Co. Ltd. (“Nanjing Bank” or the “Bank”), appeals
from the order entered on July 22, 2014 in the Supreme Court that dismissed its applica-
tion to dismiss or stay the action brought by JTG Management Services Ltd. (“JTG”) for
alleged breaches of the bank’s obligations under a letter of credit. Nanjing Bank’s applica-
tion was brought pursuant to Rules 21-8(1) and 14-1 of the Supreme Court Rules and ss.
3(e), 10(e)(i) and 11 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003,
c. 28 (the “Act). Put simply, Nanjing Bank asserted that the British Columbia Supreme
Court did not have territorial competence to decide the dispute, and that China is the
more appropriate forum.
Background
[2] The following background, relevant to the issues on appeal, is taken from JTG’s
Amended Notice of Civil Claim.
[3] JTG was formerly known as Trans-Pacific Trading Ltd. (“Trapa”). It was incorpor-
ated pursuant to the laws of British Columbia. Trapa carried on the business of lumber
trading from Richmond, B.C. Trapa’s business included the export of softwood lumber
produced in British Columbia to customers in China. Following the events material to
the underlying action, Trapa sold the business but retained all right, title and interest to
the claim asserted in the action.
[4] Nanjing Bank is a Chinese bank whose shares are listed on the Shanghai Stock
Exchange. As part of its business, the bank offers trade services, including the issuance
of export letters of credit.
[5] On or about July 11, 2011, Trapa entered into an agreement with Nanjing Overseas
Wood Co. Ltd. (“Nanjing Overseas”) for the sale of a custom order of lumber in three
shipments, to be delivered to Nanjing Overseas in Shanghai, China.
[6] In order to provide Trapa with a secure means of payment, Nanjing Overseas
caused Nanjing Bank to issue an irrevocable export letter of credit in favour of Trapa (the
“letter of credit”).
[7] Nanjing Bank provided the letter of credit to the Royal Bank of Canada (“RBC”)
as an advising bank. RBC then delivered the letter of credit to Trapa’s bank, the Bank of
Montreal (“BMO”), in Toronto. The letter of credit designated BMO as the “advise
through” bank. BMO acted as Trapa’s agent throughout.
[8] The letter of credit incorporated by reference The International Chamber of Com-
merce’s Uniform Customs and Practice for Documentary Credits (2007 Revision).
[9] The letter of credit provided that Nanjing Bank irrevocably promised and under-
took to pay to Trapa an amount of up to USD$2,010,000 upon presentation of certain
enumerated documents, set out in paragraph 46A of the letter of credit (the “Required
Documents”). Those documents include documents of title necessary to deal with the
goods, in this case, lumber, that is the subject matter of the sales agreement with Nanjing
Overseas.
[10] The letter of credit, which is in English, provides, among other things, that:
(a) the place of expiry is “Canada”;
(b) the beneficiary is Trapa, with an address in Richmond, B.C.;
(c) the credit is “available with … any bank by negotiation”; and
(d) Trapa was permitted to specify payment instructions.
[11] On October 19, 2011, in connection with the second of three shipments of lumber
to Nanjing Overseas, Trapa provided the Required Documents to BMO in its capacity as
the “advise through” bank. Trapa pleaded that, in issuing the letter of credit in favour of
Trapa, the Nanjing Bank knew that presentation could be made by BMO to RBC at loca-
tions in Canada, including Vancouver, or to any other bank in British Columbia or
otherwise.
[12] BMO presented the Required Documents to Nanjing Bank and demanded accept-
ance and payment of USD $742,875.29, pursuant to the terms of the letter of credit (the
“first presentation”).
[13] Nanjing Bank advised Trapa, through BMO, in a communication received on
November 1, 2011, that it would not honour the first presentation. It cited a discrepancy
between the volume of lumber, the packing list, and the invoice. Trapa pleads that there
was no discrepancy.
[14] However, in order to remove any uncertainty, Trapa revised the Required Docu-
ments to remove the alleged discrepancy and again presented them to Nanjing Bank
through BMO. The second presentation was also refused. The Bank did not give notice
of any discrepancies in the Required Documents and did not return the documents,
notwithstanding demands to do so.
[15] On November 22, 2011, Nanjing Bank informed Trapa, through BMO, that it
had received an order of the Chinese Court freezing the Required Documents. On or
about the same date, Nanjing Overseas commenced proceedings in China against Trapa
arising out of the sales agreement.
[16] Trapa pleads that, as a result of the alleged breach by Nanjing Bank under the
letter of credit, Trapa has suffered loss and damage in British Columbia.
In the Supreme Court

[17] The chambers judge, in reasons indexed as 2014 BCSC 715, reviewed the forego-
ing background, the nature of the letter of credit, JTG’s claim, and the positions of the
parties.
• • •
[20] Ultimately, the judge concluded that territorial competence had been established.
She stated:
[58] I am satisfied that, in this matter, territorial competence is presumed to exist in
respect of the plaintiff. First, this matter concerns a business carried on in British Columbia
(s. 10(h) of the Court Jurisdiction and Proceedings Transfer Act). This is disputed, as the
defendant argues that the plaintiff has sold its business and is now a mere holding company.
There is no dispute that at the time the letter of credit was entered into, the plaintiff carried
on business in this Province. Also, the plaintiff in the pleadings, supported by the affidavit
material, denies that the cause of action was sold and maintains its right to carry on with
this action.
[59] Second, I find that there is an arguable case that the contractual obligations at issue
were to be, to a substantial extent, performed in British Columbia. It must be remembered
that the threshold of establishing territorial competence is not a high one. The advising bank
was in British Columbia, the advise-through bank was in British Columbia, and negotiation
and receipt of payment were to take place at a bank in British Columbia.
[60] Even if the above presumption had not been established, I find that the facts as
pleaded by the plaintiff and discussed above establish an arguable case that there is a real
and substantial connection to British Columbia in this case. I find, applying Purple Echo and
the case law following upon that decision, that the defendant has not shown that it is plain
and obvious that this Court does not have jurisdictional competence.
[21] The judge then considered whether the Supreme Court should decline to exercise
its territorial competence under s. 11 of the Act … .
• • •
[24] The judge ultimately concluded:

[87] In conclusion, I find the Nanking Bank has failed to meet its burden and establish
China as the clearly more appropriate forum so as to displace the plaintiff ’s right to choose
their forum. The relevant considerations favour the plaintiff continuing in its forum of choice
and I thus find that this is not one of those exceptional cases where the court should decline
its jurisdiction.
On Appeal
[25] Nanjing Bank submits that the judge erred:
(a) by relying on assessments of facts that were unsupportable and/or contradicted
in the pleadings and evidence in order to find a presumption under s. 10(e)(i) of
the Act;
(b) by applying the wrong test for a presumption under s. 10(h) of the Act, and ignor-
ing the factors that demonstrated s. 10(h) did not apply;
(c) by relying on irrelevant or incorrectly stated facts to find a real and substantial
connection to B.C.; and
(d) in finding that forum non conveniens should not apply by relying on incorrectly
assessed facts, many of which contradicted her earlier assessment of the same
facts.
[26] JTG concedes the judge erred in applying s. 10(h) of the Act. JTG did not take
the position that s. 10(h) applied and does not seek to support the order on the ground
that the proceeding concerns a business carried on in British Columbia. It nonetheless
submits the error does not undermine the order.
Discussion
[27] The fault line in the opposing parties’ positions lies on whether presentation of
the Required Documents (Nanjing Bank) or payment (JTG) is the proper focus in deter-
mining a real and substantial connection.
[28] In both its factum and oral argument, Nanjing Bank made detailed submissions
that addressed what it submits is the key issue—the point at which a viable cause of action
accrues. Thus, Nanjing Bank contends the judge ignored the fact that the relevant per-
formance under the letter of credit was to take place in Nanjing, China, citing:
(a) Nanjing Bank was under no obligation to make payment under the letter of credit
until the Required Documents were presented to Nanjing Bank’s designated office
in Nanjing, China;
(b) Examination of the Required Documents, and thus the decision to make payment
90 days after acceptance, was to take place in Nanjing, China;
(c) The letter of credit was applied for by Nanjing Overseas in Nanjing, China; Trapa
did not apply for, negotiate, or otherwise participate in the issuance of the letter
of credit with Nanjing Bank;
(d) The letter of credit was not concerned with whether the lumber came from British
Columbia and only required that the lumber was exported from a “North Amer-
ican Port”;
(e) The letter of credit did, however, require that the lumber be “CFR” (cost to freight)
to Shanghai, China;
(f) No cause of action on this letter of credit could accrue until presentment of
conforming Required Documents was made by delivery to Nanjing Bank’s desig-
nated office in Nanjing, China; and
(g) The substance of the letter of credit, payment on presentation of documents, was
to be performed in Nanjing, China.
[29] Thus, Nanjing Bank submits there was no basis on which the judge could con-
clude that s. 10(e)(i) of the Act applied. It says other factors relied upon by the judge—the
locations of the advice through bank or the negotiation by the beneficiary were irrelevant
to the analysis, and, in any event, pointed to Ontario, not British Columbia, as the jurisdic-
tion in which the contract was to be substantially performed.
[30] JTG submits the central issue is whether it has an arguable case that the contrac-
tual obligations under the letter of credit were, in the words of s. 10(e)(i) of the Act, “to a
substantial extent” to be performed in British Columbia. JTG says this burden was satisfied
on the pleadings that I have set out above.
[31] The Amended Notice of Civil Claim asserts that Nanjing Bank had an obligation
to pay the sum demanded by Trapa in British Columbia. Importantly, the performance
specified under the letter of credit was payment by Nanjing Bank against presentation of
the Required Documents. Negotiation of payment was available to Trapa through any
bank, including, but not limited to, RBC in Vancouver. Critically, Trapa was permitted to
specify the place of payment. Thus, JTG says that the failure to make payment in British
Columbia constituted a breach of contract in British Columbia.
[32] The issue can be further distilled to the following proposition: in which jurisdic-
tion should the dispute be decided—the one in which, it is alleged, the decision to breach
the contract was made (China); or the one in which, it is alleged, the actual breach
occurred (British Columbia)?
[33] Support for JTG’s position can be found in the third edition of L. Sarna, Letters
of Credit, (Toronto: Thomson Carswell, 1989) at 9-3:
Where payment is the remedy sought, the actual or direct connection with a forum is
established through the place stipulated for the performance of the obligation of payment,
even if a choice as to the place is available, and the place of acceptance of confirming docu-
ments is elsewhere.
[34] As JTG submits, there is no question that Trapa’s claim for damages for breach
of the letter of credit involves activity in other jurisdictions, including the transmission
of documents through bank branches in Ontario and Nanjing Bank’s examination of
documents in China. The fact that payment on the letter of credit must occur through
international banking channels is not determinative of the jurisdictional inquiry because
the ultimate obligation under this letter of credit does not depend on the location of the
financial intermediaries facilitating it. The fundamental basis for jurisdiction, which JTG
presses, and which the judge accepted, was Nanjing Bank’s contractual obligation under
the letter of credit to pay Trapa in British Columbia.
[35] In cases involving international commerce, such as the one before us, more than
one court may properly assert jurisdiction over the parties’ dispute. This result flows from
the practical realities of doing business across jurisdictions, which, as I discuss below,
may mean that the obligations arising under an international commercial contract are
performed by the parties in each of their respective jurisdictions. Therefore, the domestic
jurisdictions of the issuing bank and the beneficiary to a letter of credit may well have a
lawful basis in asserting territorial competence.
[36] In determining whether a contract is to be performed “to a substantial extent”
in British Columbia, a court must look at the contract in its entirety and, in particular,
the nature of the obligations that arise under it: North America Steamships Ltd. v. HBC
Hamburg Bulk Carriers GmbH & Co. KG., 2010 BCCA 501 at para. 16. The essential obli-
gation arising under a letter of credit, which is an instrument designed to facilitate inter-
national trade, is for the issuing bank to pay the named beneficiary on the presentation
of certain predetermined documents. It is a fundamental feature of such arrangements
that the parties connected to it are doing business in separate jurisdictions, which is what
necessitates the use of letters of credit in the first place. I say “connected” to it because the
motivating force behind a letter of credit is the sale of goods from exporters in one juris-
diction to importers in another, with the issuing bank becoming involved at the behest
of the importer. All of this is to say that the jurisdictional analysis must take into account
the basic international character of the letter of credit and the possibility that the issuing
bank and the beneficiary to it will each perform their respective obligations in their
respective home jurisdictions.
[37] Fundamentally, the inquiry with respect to s. 10(e)(i) of the Act concerns the
existence of circumstances that connect performance of the contract to the forum. In
asking whether the obligations were to be performed in British Columbia, the inquiry
focuses on the expectations of the parties as to performance at contract formation: see
North America Steamships Ltd. at para. 16. Put another way, the Act requires the Court
to engage in a preliminary interpretive inquiry to determine the limited question of the
jurisdiction (or jurisdictions) where the parties intended the contract to be performed.
The phrase “performed to a substantial extent” clearly denotes that the contract may be
performed in multiple jurisdictions; thus, it is no bar to the operation of s. 10(e)(i) to say
that the contract was intended to be performed in more than one jurisdiction (which is
typical in a letter of credit arrangement). It is entirely possible to have an international
contractual arrangement whereby both parties to the contract perform obligations “to a
substantial extent” in their home jurisdictions.
[38] In this case, it was a clear and implied term of the letter of credit that Trapa would
perform its obligations under the letter of credit (e.g., preparation of the Required Docu-
ments) in British Columbia. In this regard, I note that Trapa was entitled to provide
instructions that it receive payment in British Columbia and it was free to prepare the
Required Documents in British Columbia. It was, moreover, reasonably foreseeable at
formation of the contract that Trapa would perform its obligations in British Columbia.
The receipt of payment and the preparation of the Required Documents constitutes, in
my view, a substantial portion of the contractual obligations arising under the letter of
credit for the purpose of the jurisdictional analysis, which I emphasize is not otherwise
a formal inquiry into the interpretation of the parties’ contract. In that regard, I note that
the fact that the letter of credit did not expressly require that any obligation be fulfilled
in a particular jurisdiction is not determinative of the jurisdictional inquiry.
[39] For all of these reasons, it is clear the obligations under the letter of credit were
to be performed “to a substantial extent” in British Columbia.
[40] As set out above, the facts as pleaded establish that there is an arguable case that
the obligations arising under the letter of credit were to be performed, to a substantial
extent, in British Columbia. In these circumstances, I am unable to see that the judge
erred in her ultimate finding that the presumption of territorial competence had not been
rebutted by Nanjing Bank.
[41] As a final comment, I note that, in general, if the parties to an international com-
mercial agreement wish to have disputes flowing from agreements adjudicated in a par-
ticular jurisdiction, regardless of where the contract is to be performed, then it is always
open to them to include a forum selection clause in the agreement. This extends to letter
of credit arrangements such as the one at issue in the present litigation, which does not
have a forum selection clause.
[The court held, finally, that the defendant bank had not persuaded it that China was a
more suitable forum.]
Chevron Corp v Yaiguaje

2015 SCC 42
GASCON J (for the court):
I. Overview
[1] In a world in which businesses, assets, and people cross borders with ease, courts
are increasingly called upon to recognize and enforce judgments from other jurisdictions.
Sometimes, successful recognition and enforcement in another forum is the only means
by which a foreign judgment creditor can obtain its due. Normally, a judgment creditor
will choose to commence recognition and enforcement proceedings in a forum where
the judgment debtor has assets. In this case, however, the Court is asked to determine
whether the Ontario courts have jurisdiction to recognize and enforce an Ecuadorian
judgment where the foreign judgment debtor, Chevron Corporation (“Chevron”), claims
to have no connection with the province, whether through assets or otherwise. The Court
is also asked to determine whether the Ontario courts have jurisdiction over a Canadian
subsidiary of Chevron, Chevron Canada Limited (“Chevron Canada”), a stranger to the
foreign judgment for which recognition and enforcement is being sought.
[2] The courts below found that jurisdiction existed over Chevron. They held that the
only connection that must be proven for recognition and enforcement to proceed is one
between the foreign court and the original action on the merits; there is no preliminary
need to prove a connection with Ontario for jurisdiction to exist in recognition and
enforcement proceedings. They also found there to be an independent jurisdictional basis
for proceeding against Chevron Canada due to the place of business it operates in the
province, and at which it had been duly served.
[3] I agree with the outcomes reached by the courts below with respect to both Chev-
ron and Chevron Canada and I would dismiss the appeal. In an action to recognize and
enforce a foreign judgment where the foreign court validly assumed jurisdiction, there is
no need to prove that a real and substantial connection exists between the enforcing forum
and either the judgment debtor or the dispute. It makes little sense to compel such a
connection when, owing to the nature of the action itself, it will frequently be lacking.
Nor is it necessary, in order for the action to proceed, that the foreign debtor contempor-
aneously possess assets in the enforcing forum. Jurisdiction to recognize and enforce a
foreign judgment within Ontario exists by virtue of the debtor being served on the basis
of the outstanding debt resulting from the judgment. This is the case for Chevron. Juris-
diction also exists here with respect to Chevron Canada because it was validly served at
a place of business it operates in the province. On the traditional jurisdictional grounds,
this is sufficient to find jurisdiction.
II. Backgrounds and Facts

[4] The dispute underlying the appeal originated in the Lago Agrio region of Ecuador.
The oil-rich area has long attracted the exploration and extraction activities of global oil
companies, including Texaco, Inc. (“Texaco”). As a result of those activities, the region is
said to have suffered extensive environmental pollution that has, in turn, disrupted the
lives and jeopardized the futures of its residents. The 47 respondents (the “plaintiffs”)
represent approximately 30,000 indigenous Ecuadorian villagers. For over 20 years, they
have been seeking legal accountability as well as financial and environmental reparation
for harms they allegedly have suffered due to Texaco’s former operations in the region.
Texaco has since merged with Chevron.
[5] In 1993, the plaintiffs filed suit against Texaco in the United States District Court
for the Southern District of New York. In 2001, after lengthy interim proceedings, the
District Court dismissed their suit on the grounds of international comity and forum non
conveniens. The following year, the United States Court of Appeals for the Second Circuit
upheld that judgment, relying in part on a commitment by Texaco to submit to the juris-
diction of the Ecuadorian courts should its motion to dismiss succeed: Aguinda v. Texaco,
Inc., 303 F.3d 470 (2d Cir. 2002).
[6] In 2003, the plaintiffs filed suit against Chevron in the Provincial Court of Justice
of Sucumbíos. Several years of litigation ensued. In 2011, Judge Zambrano ruled in the
plaintiffs’ favour, and ordered Chevron to pay US$8.6 billion in environmental damages,
as well as US$8.6 billion in punitive damages that were to be awarded unless Chevron
apologized within 14 days of the judgment. As Chevron did not apologize, the punitive
damages award remained intact. In January 2012, the Appellate Division of the Provincial
Court of Justice of Sucumbíos affirmed the trial judgment. In November 2013, Ecuador’s
Court of Cassation upheld the Appellate Division’s judgment, except on the issue of puni-
tive damages. In the end, the total amount owed was reduced to US$9.51 billion.
[7] Meanwhile, Chevron instituted further U.S. proceedings against the plaintiffs’
American lawyer, Steven Donziger, and two of his Ecuadorian clients, seeking equitable
relief. Chevron alleged that Mr. Donziger and his team had corrupted the Ecuadorian
proceedings by, among other things, ghost-writing the trial judgment and paying Judge
Zambrano US$500,000 to release it as his own. In 2011, Judge Kaplan of the United States
District Court for the Southern District of New York granted preliminary relief in the
form of a global anti-enforcement injunction with respect to the Ecuadorian judgment:
Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (S.D.N.Y. 2011). The United States Court
of Appeals for the Second Circuit overturned this injunction in 2012, stressing that “[t]he
[plaintiffs] hold a judgment from an Ecuadorian court. They may seek to enforce that
judgment in any country in the world where Chevron has assets”: Chevron Corp. v.
Naranjo, 667 F.3d 232 (2d Cir. 2012), at pp. 245-56. In 2014, Judge Kaplan of the District
Court held that the Ecuadorian judgment had resulted from fraud committed by Mr.
Donziger and others on the Ecuadorian courts: Chevron Corp. v. Donziger, 974 F. Supp.
2d 362 (S.D.N.Y. 2014). That decision and the underlying allegations of fraud are not
before this Court.
[8] Since the initial judgment, Chevron has refused to acknowledge or pay the debt
that the trial court said it owed, and it does not hold any Ecuadorian assets. Faced with
this situation, the plaintiffs have turned to the Canadian courts for assistance in enforcing
the Ecuadorian judgment, and obtaining their financial due. On May 30, 2012, after the
Appellate Division’s decision but prior to the release of the 2013 judgment of the Court
of Cassation, they commenced an action for recognition and enforcement of the Ecuador-
ian judgment against Chevron, Chevron Canada and Chevron Canada Finance Limited
in the Ontario Superior Court of Justice. The action against the latter has since been
discontinued.
[9] Chevron, a U.S. corporation incorporated in Delaware, was served at its head office
in San Ramon, California. Chevron Canada, a Canadian corporation governed by the
Canada Business Corporations Act, R.S.C. 1985, c. C-44, with its head office in Alberta, is
a seventh-level indirect subsidiary of Chevron, which has 100 per cent ownership of every
company in the chain between itself and Chevron Canada. The plaintiffs initially served
Chevron Canada with their amended statement of claim at an extra-provincially registered
office in British Columbia. Later, they served the company at a place of business it operates
in Mississauga, Ontario.
[10] In serving Chevron in San Ramon, the plaintiffs relied upon Rule 17.02(m) of
Ontario’s Rules of Civil Procedure, R.R.O. 1990, Reg. 194, (“Rules”) which provides that
service may be effected outside of Ontario without leave where the proceeding consists
of a claim “on a judgment of a court outside Ontario.” In serving Chevron Canada at its
Mississauga office, the plaintiffs relied upon Rule 16.02(1)(c), which requires that personal
service be made on a corporation “by leaving a copy of the document … with a person
at any place of business of the corporation who appears to be in control or management
of the place of business.”
[11] In their amended statement of claim, the plaintiffs sought: (a) the Canadian
equivalent of the award of US$18,256,718,000 resulting from the 2012 judgment of the
Appellate Division of the Provincial Court of Justice of Sucumbíos; (b) the Canadian
equivalent of costs to be determined by the Ecuadorian court; (c) a declaration that the
shares of Chevron Canada are available to satisfy the judgment of the Ontario court;
(d) the appointment of an equitable receiver over the shares and assets of Chevron Canada;
(e) prejudgment interest from January 3, 2012; and (f) all costs of the proceedings on a
substantial indemnity basis, plus all applicable taxes. In response, the appellants each
brought a motion in which they sought substantially the same relief: (1) an order setting
aside service ex juris of the amended statement of claim; and (2) an order declaring that
the court had no jurisdiction to hear the action, and dismissing or permanently staying it.
[The judicial history was described. The court next considered Chevron’s argument that
the Ontario courts had no jurisdiction simpliciter.]
(1) Jurisprudential Guidance Prior to Van Breda

[28] Contrary to Chevron’s contention, this Court has never required there to be a
real and substantial connection between the defendant or the action and the enforcing
court for jurisdiction to exist in recognition and enforcement proceedings.
[29] This Court’s modern judgments on recognition and enforcement begin with the
1990 decision in Morguard. There, the Court expanded the traditionally limited bases upon
which foreign judgments could be recognized and enforced. Before Morguard, a foreign
judgment would be recognized and enforced only if the defendant in the original action
had been present in the foreign jurisdiction, or had consented to the court’s jurisdiction:
S.G.A. Pitel and N.S. Rafferty, Conflict of Laws (2010), at p. 53; Morguard, at p. 1092. These
traditional bases for recognition and enforcement attracted criticism as being unduly
restrictive, particularly as between sister provinces: see, e.g., V. Black, “Enforcement of
Judgments and Judicial Jurisdiction in Canada” (1989) 9 Oxford J. Legal Stud. 547.
[30] In Morguard, La Forest J., writing for the Court, held that the judgments of another
province could and should also be recognized and enforced where the other province’s
court assumed jurisdiction on the basis of a real and substantial connection between the
action and that province: pp. 1102 and 1108. In his view, the traditional grounds for rec-
ognition and enforcement had been retained based on a misguided notion of comity,
unsuited to “the need in modern times to facilitate the flow of wealth, skills and people
across state lines in a fair and orderly manner”: p. 1096. Moreover, the traditional recogni-
tion and enforcement rules were tailored to circumstances that had existed at a time when
it would have been difficult for the defendant to defend “an action initiated in a far corner
of the world in the then state of travel and communications”: p. 1097. The need to revisit
the traditional rules was particularly acute in a federal state like Canada, to which “con-
siderations underlying the rules of comity apply with much greater force”: p. 1098.
[31] In arriving at his conclusions, La Forest J.’s analysis focused entirely on whether
the court of the other province or territory had “properly, or appropriately, exercised juris-
diction in the action”: p. 1102. He intimated no need to interrogate the enforcing court’s
jurisdiction, either in his discussion of the law or in its application to the facts of the case.
Instead, once a real and substantial connection between the original court and the action
is demonstrated, and it is clear that the original court had jurisdiction, the resulting judg-
ment “should be recognized and be enforceable” in the other provinces: p. 1108.
[32] This Court revisited the prerequisites to recognition and enforcement in 2003 in
Beals. It held that the real and substantial connection test should also apply to the money
judgments of other countries’ courts. In reasons written by Major J., the majority of the
Court found that the principles of order, fairness, and comity that underlay the decision
in Morguard, while originally cast in the interprovincial context, were equally compelling
internationally: paras. 25-27. According to Major J., “[i]nternational comity and the
prevalence of international cross-border transactions and movement call for a moderniza-
tion of private international law”: para. 28. Where a real and substantial connection
existed between the foreign court and the action’s subject matter or its defendants, the
foreign judgment should be recognized and enforced: para. 29.
[33] Here again, the Court did not articulate or imply a need to inquire into the
enforcing court’s jurisdiction; the focus remained squarely on the foreign jurisdiction. In
Major J.’s view, the following conditions must be met before a domestic court will enforce
a judgment from a foreign jurisdiction:
The enforcing court, in this case Ontario, must determine whether the foreign court had a
real and substantial connection to the action or the parties, at least to the level established
in Morguard, supra. A real and substantial connection is the overriding factor in the deter-
mination of jurisdiction. …
If a foreign court did not properly take jurisdiction, its judgment will not be enforced. …
• • •
Once the “real and substantial connection” test is found to apply to a foreign judgment,
the court should then examine the scope of the defences available to a domestic defendant
in contesting the recognition of such a judgment.
(Beals, at paras. 37-39)
[34] Thus, in the recognition and enforcement context, the real and substantial con-
nection test operates simply to ensure that the foreign court from which the judgment
originated properly assumed jurisdiction over the dispute. Once this is demonstrated, the
defendant has an opportunity to prove that one of the defences to recognition and enforce-
ment should apply. No mention is made of any need to prove a connection between the
enforcing jurisdiction and the action. In the end, the test articulated for recognition and
enforcement in Morguard and Beals is “seemingly straightforward”: T.J. Monestier, “Juris-
diction and the Enforcement of Foreign Judgments” (2014), 42 Adv. Q. 107, at p. 110.
[35] Three years later, in Pro Swing, the Court once more extended the scope of Can-
adian recognition and enforcement law, this time in relation to non-monetary foreign
judgments. Traditionally, to be recognizable and enforceable, a foreign judgment had to
be “(a) for a debt, or definite sum of money” and “(b) final and conclusive”: para. 10,
quoting Dicey and Morris on the Conflict of Laws (13th ed. 2000), vol. 1, Rule 35, at
pp. 474-75). In Pro Swing, the Court held that non-monetary foreign judgments should
also be capable of being recognized and enforced in Canada. In its view, “the conditions
for recognition and enforcement can be expressed generally as follows: the judgment must
have been rendered by a court of competent jurisdiction and must be final, and it must
be of a nature that the principle of comity requires the domestic court to enforce”: para.
31. Chevron contends that it was in the course of this judgment that the Court clearly
expressed what had been implicit in Morguard and Beals: the need to assess the Canadian
forum’s jurisdiction before recognizing and enforcing the foreign judgment. In this regard,
Chevron points to para. 28 of the majority’s reasons, where Deschamps J. wrote: “Under
the traditional rule, once the jurisdiction of the enforcing court is established, the peti-
tioner must show that he or she meets the conditions for having the judgment recognized
and enforced.”
[36] I cannot accede to Chevron’s submission that this phrase was intended to alter
this Court’s clear guidance in Morguard and Beals for two reasons. First, this Court’s
insistence in Pro Swing that jurisdiction must be established prior to determining whether
the foreign judgment should be recognized and enforced is hardly controversial: juris-
diction must, of course, always be established regardless of the type of action being
brought. Otherwise, the court will lack the power to hear and determine the case. Where
Chevron’s submission fails, however, is in assuming that the only way to establish juris-
diction is by proving the existence of a real and substantial connection between the foreign
judgment debtor and the Canadian forum. In my view, jurisdiction in an action limited
to recognition and enforcement of a foreign judgment within the province of Ontario is
established when service is effected on a defendant against whom a foreign judgment debt
is alleged to exist. There is no requirement, nor need, to resort to the real and substantial
connection test.
[37] Second, Deschamps J. clearly stated the prerequisites to recognition and enforce-
ment elsewhere in her reasons, and did not insist or expand upon such a requirement.
She wrote:
The foreign judgment is evidence of a debt. All the enforcing court needs is proof that the
judgment was rendered by a court of competent jurisdiction and that it is final, and proof of
its amount. The enforcing court then lends its judicial assistance to the foreign litigant by
allowing him or her to use its enforcement mechanisms.
(Pro Swing, at para. 11)
This statement is consistent with Morguard and Beals: there is no need to probe the
relationship between the enforcing forum and the action or the defendant. Deschamps
J.’s one prior, passing reference to the need for the enforcing court to have jurisdiction
cannot serve as a basis for inferring the existence of a significant, and previously unstated,
hurdle to recognition and enforcement that simply does not exist. As is evident from her
reasons, she retained the focus on jurisdiction in the original foreign proceeding.
(2) Effect of Van Breda

[38] Chevron also places considerable reliance upon this Court’s decision in Van
Breda. In my view, this reliance is misplaced. While there is no denying that the Van Breda
decision carries great importance in many areas of Canadian conflict of laws, its intended
scope should not be overstated. Nothing in Van Breda altered the jurisdictional inquiry
in actions to recognize and enforce foreign judgments as established by this Court in
Morguard, Beals and Pro Swing.
[39] In Van Breda, LeBel J. clearly specified the limited areas of private international
law to which the decision was intended to apply. First, he noted at para. 16 that three
categories of issues are “intertwined” in private international law: jurisdiction, forum non
conveniens and the recognition of foreign judgments. Although he acknowledged that
“[n]one of the divisions of private international law can be safely analysed and applied in
isolation from the others,” LeBel J. nonetheless cautioned that “the central focus of these
appeals is on jurisdiction and the appropriate forum,” that is, only two of the three cat-
egories of issues at play in private international law: para. 16. He went on to propose an
analytical framework and legal principles applicable to the assumption of jurisdiction
(one way of establishing jurisdiction simpliciter) and for deciding whether to decline to
exercise it (forum non conveniens). Nowhere did he purport to analyze or modify the
principles applicable to the recognition and enforcement of foreign judgments, the area
of private international law that is the central focus of this appeal.
[40] Second, LeBel J. further—and repeatedly—confined the principles he developed
in Van Breda to the assumption of jurisdiction in tort actions. For example, he said:
“… this Court must craft more precisely the rules and principles governing the assumption
of jurisdiction by the courts of a province over tort cases in which claimants sue in
Ontario, but at least some of the events that gave rise to the claims occurred outside Can-
ada or outside the province”: para. 68. He later added the following: “Before I go on to
consider a list of presumptive connecting factors for tort cases, I must define the legal
nature of the list”: para. 80. Perhaps most tellingly, LeBel J. stated, at para. 85: “The list of
presumptive connecting factors proposed here relates to claims in tort and issues associ-
ated with such claims. It does not purport to be an inventory of connecting factors cover-
ing the conditions for the assumption of jurisdiction over all claims known to the law.”
[41] To accept Chevron’s argument would be to extend Van Breda into an area in
which it was not intended to apply, and in which it has no principled reason to meddle.
In fact, and more compellingly, the principles that animate recognition and enforcement
indicate that Van Breda’s pronouncements should not apply to recognition and enforce-
ment cases. It is to these principles that I will now turn.
(3) Principles Underlying Actions for Recognition and Enforcement

[42] Two considerations of principle support the view that the real and substantial
connection test should not be extended to an enforcing court in an action for recognition
and enforcement. First, the crucial difference between an action at first instance and an
action for recognition and enforcement is that, in the latter case, the only purpose of the
action is to allow a pre-existing obligation to be fulfilled. Second, the notion of comity,
which has consistently underlain actions for recognition and enforcement, militates in
favour of generous enforcement rules.
(a) Purpose of Recognition and Enforcement Proceedings

[43] Canadian law recognizes that the purpose of an action to recognize and enforce
a foreign judgment is to allow a pre-existing obligation to be fulfilled; that is, to ensure
that a debt already owed by the defendant is paid. As Pitel and Rafferty explain, such an
action “is based not on the original claim the plaintiff had pursued against the defendant
but rather on the obligation created by the foreign judgment”: p. 159; see also P.M. Perell
and J.W. Morden, The Law of Civil Procedure in Ontario (2nd ed. 2014), at ¶11.177. The
following comment made by McLachlin C.J. in Pro Swing (although in dissent) also
reflects this logic: “Barring exceptional concerns, a court’s focus when enforcing a foreign
judgment is not on the substantive and procedural law on which the judgment is based,
but instead on the obligation created by the judgment itself ”: para. 77.
[44] Important consequences flow from this observation. First, the purpose of an
action for recognition and enforcement is not to evaluate the underlying claim that gave
rise to the original dispute, but rather to assist in enforcing an already-adjudicated obli-
gation. In other words, the enforcing court’s role is not one of substance, but is instead
one of facilitation: Pro Swing, at para. 11. The court merely offers an enforcement mech-
anism to facilitate the collection of a debt within the jurisdiction. This entails that the
enforcing court does not exercise jurisdiction in the same way as it does in actions at first
instance. In a first instance case like Van Breda, the focus is on whether the court has
jurisdiction to determine the merits of a substantive legal claim; in a recognition and
enforcement case, the court does not create a new substantive obligation, but instead
assists with the fulfillment of an existing one.
[45] It follows that there can be no concern that the parties are located elsewhere, or
that the facts underlying the dispute are properly addressed in another court, factors that
might serve to undermine the existence of a real and substantial connection with the
forum in first instance adjudication. The defendant will, of course, not have a significant
connection with the forum, otherwise an independent jurisdictional basis would already
exist for proceeding against him or her. Moreover, the facts underlying the original judg-
ment are irrelevant, except insofar as they relate to potential defences to enforcement.
The only important element is the foreign judgment itself, and the legal obligation it has
created. Simply put, the logic for mandating a connection with the enforcing jurisdiction
finds no place.
[46] Second, enforcement is limited to measures—like seizure, garnishment, or exe-
cution—that can be taken only within the confines of the jurisdiction, and in accordance
with its rules: Pro Swing, at para. 11; J. Walker, Castel & Walker: Canadian Conflict of Laws
(6th ed. (loose-leaf)), at p. 11-52. The recognition and enforcement of a judgment there-
fore has a limited impact: as Walker states, “[a]n order enforcing a foreign judgment
applies only to local assets” (p. 14-11). The enforcing court’s judgment has no coercive
force outside its jurisdiction. Whether recognition and enforcement should proceed
depends entirely on the enforcing forum’s laws. The dispute does not contain a foreign
element that would make resort to the real and substantial connection test necessary.
Walker adds that, as a result, since enforcement concerns only local assets, “there is no
basis for staying the proceedings on the grounds that the forum is inappropriate or that
the judgment debtor’s principal assets are elsewhere”: ibid.
[47] Third, and flowing from this reality, any potential constitutional concerns that
might sometimes emerge in conflict of laws cases simply do not arise in recognition and
enforcement proceedings. In Morguard, the Court elaborated a conflict of laws rule and
also hinted, without deciding, that the test might have constitutional foundations:
pp. 1109-10. In Hunt v. T&N plc, [1993] 4 S.C.R. 289, the Court confirmed that Morguard
had created a constitutional principle that was applicable to the assumption of jurisdiction.
LeBel J. later reaffirmed and clarified this in Van Breda, where he noted that the real and
substantial connection test has a dual nature: first, it serves as a constitutional principle;
second, it constitutes a conflict of laws rule: at paras. 22-24. He stated that “in Canadian
constitutional law, the real and substantial connection test has given expression to the
constitutionally imposed territorial limits that underlie the requirement of legitimacy in
the exercise of the state’s power of adjudication”; he added that the test “suggests that the
connection between a state and a dispute cannot be weak or hypothetical,” as such a con-
nection “would cast doubt upon the legitimacy of the exercise of state power over the
persons affected by the dispute”: para. 32.
[48] No concern about the legitimacy of the exercise of state power exists in actions
to recognize and enforce foreign judgments against judgment debtors. As I have explained,
when such an action comes before a Canadian court, the court is not assuming jurisdic-
tion over the parties in the same way as would occur in a first instance case. The enforcing
court has no interest in adjudicating the original rights of the parties. Rather, the court
merely seeks to assist in the enforcement of what has already been decided in another
forum. As Deschamps J. aptly stated in Pro Swing, “[t]he enforcing court … lends its
judicial assistance to the foreign litigant by allowing him or her to use its enforcement
mechanisms”: para. 11. The manner in which the court exercises control over the parties
is thus different—and far less invasive—than in an action at first instance.
[49] In most recognition and enforcement proceedings, the only factor that draws a
foreign judgment creditor to the province is the potential for assets upon which to ultim-
ately enforce the judgment. Enforcement is limited to the seizable assets found within the
province. No constitutional concern about the legitimacy of this exercise of jurisdiction
emerges. I acknowledge that, under provincial legislation, a recognition and enforcement
judgment issued in one province may be capable of being”registered” in another province,
thus offering some advantage to plaintiffs who have already successfully obtained a
recognition and enforcement judgment. Nevertheless, the existence of such legislation

does not alter the basic fact that absent some obligation to enforce another forum’s judg-
ments, the judicial system of each province controls access to its jurisdiction’s enforcement
mechanisms, whenever a foreign judgment creditor seeks to seize assets within its territory
in satisfaction of a foreign judgment debt.
[50] In addition, the obligation created by a foreign judgment is universal; there is no
competing claim to jurisdiction with respect to it. If each jurisdiction has an equal interest
in the obligation resulting from a foreign judgment, it is hard to see how any concern
about territorial overreach could emerge. Simply put, there can be no concern about
jurisdictional overreach if no jurisdiction can reach further into the matter than any other.
The purposes that underlie recognition and enforcement proceedings simply do not
require proof of a real and substantial connection between the dispute and Ontario,
whether for constitutional reasons or otherwise.
(b) The Notion of Comity in Recognition and Enforcement Proceedings

[51] Beyond this, it must be remembered that the notion of comity has consistently
been found to underlie Canadian recognition and enforcement law. In Morguard, this
Court stated that comity refers to “the deference and respect due by other states to the
actions of a state legitimately taken within its territory,” as well as “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”: pp. 1095-96,
quoting with approval the U.S. Supreme Court’s foundational articulation of the concept
of comity in Hilton v. Guyot, 159 U.S. 113 (1895), at pp. 163-64; see also Spencer v. The
Queen, [1985] 2 S.C.R. 278, at p. 283, per Estey J., concurring.
[52] The Court’s formulation of the notion of comity in Morguard was quoted with
approval in Beals: para. 20. In Hunt, the Court observed that “ideas of ‘comity’ are not an
end in themselves, but are grounded in notions of order and fairness to participants in
litigation with connections to multiple jurisdictions”: p. 325. In Tolofson v. Jensen, [1994]
3 S.C.R. 1022, the Court again referred to the notion of comity, stating that it entails
respect for the authority of each state “to make and apply law within its territorial limit,”
and that “to accommodate the movement of people, wealth and skills across state lines,
a byproduct of modern civilization, [states] will in great measure recognize the determin-
ation of legal issues in other states”: p. 1047. In Pro Swing, the Court described comity as
a “balancing exercise” between “respect for a nation’s acts, international duty, convenience
and protection of a nation’s citizens”: para. 27. Finally, in Van Breda, LeBel J. emphasized
that the goal of modern conflicts systems rests on the principle of comity, which, although
a flexible concept, calls for the promotion of order and fairness, an attitude of respect and
deference to other states, and a degree of stability and predictability in order to facilitate
reciprocity: para. 74. This is true of all areas of private international law, including that
of the recognition and enforcement of foreign judgments.
[53] As this review of the Court’s statements on comity shows, the need to acknow-
ledge and show respect for the legal acts of other states has consistently remained one of
the principle’s core components. Comity, in this regard, militates in favour of recognition
and enforcement. Legitimate judicial acts should be respected and enforced, not
sidetracked or ignored. The concepts of order and fairness in which comity is grounded
are not affronted by rejecting Chevron’s proposed extension of the real and substantial
connection test. This is so for several reasons.
[54] First, in recognition and enforcement proceedings, order and fairness are pro-
tected by ensuring that a real and substantial connection existed between the foreign
court and the underlying dispute. If such a connection did not exist, or if the defendant
was not present in or did not attorn to the foreign jurisdiction, the resulting judgment
will not be recognized and enforced in Canada. The judgment debtor is free to make this
argument in the recognition and enforcement proceedings, and indeed will have already
had the opportunity to contest the jurisdiction of the foreign court in the foreign proceed-
ings. Here, for instance, it is accepted that Chevron attorned to the jurisdiction of the
Ecuadorian courts. As Walker writes, “[t]he jurisdictional requirements of order and
fairness considered in the context of direct jurisdiction operate to promote the inter-
national acceptance of the adjudication of a matter by a Canadian court”: p. 14-1 (empha-
sis in original). There is no similar requirement of international acceptance in the context
of the recognition and enforcement of a foreign judgment.
[55] Second, no unfairness results to judgment debtors from having to defend against
recognition and enforcement proceedings. In essence, through their own behaviour and
legal noncompliance, the debtors have made themselves the subject of outstanding obliga-
tions. It is for this reason that they may be called upon to answer for their debts in various
jurisdictions. Of course, the principles of order and fairness are also protected by provid-
ing a foreign judgment debtor with the opportunity to convince the enforcing court that
there is another reason why recognition and enforcement should not be granted: see Beals,
at paras. 39 et seq.
[56] Third, contrary to Chevron’s argument, a requirement that the defendant have a
real and substantial connection with the enforcing court in the sense of being present or
having assets in the province would only undermine order and fairness. In recognition
and enforcement proceedings, besides an unlikely attornment by the defendant, the only
way a real and substantial connection with the enforcing forum could be achieved, in the
end, is through presence or assets in the jurisdiction. However, presence will frequently
be absent given the very nature of the proceeding at issue. Indeed, Rule 17.02(m) is
implicitly based on an expectation that the defendant in a claim on a judgment of a court
outside Ontario will not be present in the province. Requiring assets to be present in the
jurisdiction when recognition and enforcement proceedings are instituted is also not
conducive to order or fairness. For one thing, assets such as receivables or bank deposits
may be in one jurisdiction one day, and in another the next. If jurisdiction over recogni-
tion and enforcement proceedings were dependent upon the presence of assets at the time
of the proceedings, this may ultimately prove to only benefit those debtors whose goal is
to escape rather than answer for their liabilities, while risking depriving creditors of access
to funds that might eventually enter the jurisdiction.
[57] In today’s globalized world and electronic age, to require that a judgment creditor
wait until the foreign debtor is present or has assets in the province before a court can
find that it has jurisdiction in recognition and enforcement proceedings would be to turn
a blind eye to current economic reality. The motion judge rightly opined as follows on
this subject:
In an age of electronic international banking, funds once in the hands of a judgment debtor
can quickly leave a jurisdiction. While it is highly unlikely that a judgment debtor would
move assets into a jurisdiction in the face of a pending recognition action, in some circum-
stances judgment debtors may not control the timing or location of the receipt of an asset
due to them; control may rest in the hands of a third party as a result of contract or otherwise.
Where a judgment creditor under a foreign judgment learns that its judgment debtor may
come into possession of an asset in the foreseeable future, it might want the recognition of
its foreign judgment in advance of that event so that it could invoke some of the enforcement
mechanisms of the receiving jurisdiction, such as garnishment. To insist that the judgment
creditor under a foreign judgment await the arrival of the judgment debtor’s asset in the
jurisdiction before seeking recognition and enforcement could well prejudice the ability of
the judgment creditor to recover on its judgment. Given the wide variety of circumstances—
including timing—in which a judgment debtor might come into possession of an asset, I do
not think it prudent to lay down a hard and fast rule that assets of the judgment debtor must
exist in the receiving jurisdiction as a pre-condition to the receiving jurisdiction entertaining
a recognition and enforcement action. [para. 81]
I note that in one Ontario lower court decision, albeit in the context of forum non conven
iens, the existence of assets has been held to be irrelevant to the jurisdictional inquiry:
see BNP Paribas (Canada) v. Mécs, (2002), 60 O.R. (3d) 205 (S.C.J.).
[58] In this regard, I find persuasive value in the fact that other common law juris-
dictions—presumably equally concerned about order and fairness as our own—have also
found that the presence of assets in the enforcing jurisdiction is not a prerequisite to the
recognition and enforcement of a foreign judgment.
[59] In Tasarruf Mevduati Sigorta Fonu v. Demirel, [2007] 1 W.L.R. 2508, for example,
the England and Wales Court of Appeal (Civil Division) held that “a claimant seeking to
enforce a foreign judgment by action does not have to show that there are assets in the
jurisdiction. To require him to do so would be tantamount to construing the rule as if it
were limited in that way”: para. 29. The court also held that to be granted permission to
serve ex juris (permission that is needed under the applicable English procedural rules),
the claimant is required to show “that he has a good arguable case in the action, that is
that he has a good arguable case that judgment should be given based upon the foreign
judgment”: para. 29. The court continued, holding that the claimant “must ordinarily …
show further that he can reasonably expect a benefit from such a judgment”: ibid. How-
ever, on the facts of the case, it held that service ex juris should be permitted where the
defendant did not possess assets in England at the time, but had a “reasonable possibility”
of having assets in London “one of these days”: para. 40.
[60] The High Court of Ireland followed a similar approach in Yukos Capital S.A.R.L.
v. OAO Tomskneft VNK, [2014] IEHC 115, in an arbitration context, holding that “the
presence of assets within the jurisdiction is not a pre-requisite for the granting of leave
to serve out of the jurisdiction on an application to enforce a Convention Award”:
para. 112. Although the court quoted with approval the passages from Tasarruf to the
effect that the applicant must demonstrate that some potential benefit would accrue
should the recognition and enforcement action succeed, it nevertheless accepted, with
no hesitation, that “the seeking of recognition and enforcement of an award in a country
where the losing party may have no assets in order to obtain the imprimatur of a respected
court upon the award is acceptable”: para. 128.
[61] The U.S. courts appear to be divided on the prerequisites to recognition and
enforcement: see R.A. Brand, “Federal Judicial Center International Litigation Guide:
Recognition and Enforcement of Foreign Judgments” (2013), 74 U. Pitt. L. Rev. 491. Some,
as exemplified by the decision in Lenchyshyn v. Pelko Electric, Inc., 723 N.Y.S.2d 285 (App.
Div. 2001), take a broad approach. In Lenchyshyn, the Supreme Court of New York,
Appellate Division, held that personal jurisdiction need not be established over judgment
debtors for recognition and enforcement to proceed. In the court’s view, “[r]equiring that
the judgment debtor have a ‘presence’ in or some other jurisdictional nexus to the state
of enforcement would unduly protect a judgment debtor and enable him easily to escape
his just obligations under a foreign country money judgment” (p. 292); moreover, no
constitutional obligation exists to satisfy such a requirement (p. 289). The court concluded
that “even if defendants do not presently have assets in New York, plaintiffs nevertheless
should be granted recognition of the foreign country money judgment … and thereby
should have the opportunity to pursue all such enforcement steps in futuro, whenever it
might appear that defendants are maintaining assets in New York”: p. 291. The same court
recently reiterated the Lenchyshyn approach in Abu Dhabi Commercial Bank PJSC v. Saad
Trading, Contracting and Financial Services Co., 986 N.Y.S.2d 454 (App. Div. 2014). Other
state and district courts have also adopted its reasoning: Haaksman v. Diamond Offshore
(Bermuda), Ltd., 260 S.W.3d 476 (Tex. App. 2008); Pure Fishing, Inc. v. Silver Star Co., 202
F. Supp. 2d 905 (N.D. Iowa 2002).
[62] As the motion judge below correctly pointed out, some U.S. courts have taken a
different approach. For instance, the Michigan Court of Appeals stated the following in
Electrolines, Inc. v. Prudential Assurance Co., 677 N.W.2d 874 (2004):
We hold that where plaintiff failed to identify any property owned by defendants in Michigan,
the trial court erred in holding that it was unnecessary for plaintiff to demonstrate that the
Michigan court had personal jurisdiction over defendants in this common-law enforcement
action.
• • •
We have not found any authorities indicating that the foundational requirement of
demonstrating a trial court’s jurisdiction over a person or property is inapplicable in enforce-
ment proceedings. [pp. 880 and 884]
Other U.S. courts have adopted an even more extreme position, holding that “attachment
of assets of the judgment debtor within the state is not sufficient to provide jurisdiction,
and that personal jurisdiction over the judgment debtor is necessary”: Brand, at p. 506,
citing Base Metal Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory,” 283 F.3d 208
(4th Cir. 2002), cert. denied, 537 U.S. 822 (2002).
[63] As this review of the case law indicates, many courts in common law jurisdictions
have been hesitant to make the presence of assets a prerequisite to jurisdiction in recogni-
tion and enforcement proceedings. While it is true that some have nonetheless seen fit to
limit the existence of jurisdiction in other ways (notably, by requiring that judgment
creditors prove that a benefit will result from successful recognition and enforcement
proceedings), they have done so in the context of different procedural rules and distinct
constitutional considerations.
[64] Turning to the works of Canadian conflict of laws scholars, most support the
view that requiring a real and substantial connection through the defendant being present
or having assets in the province is not necessary for the purposes of a recognition and
enforcement action. Walker, for instance, writes:
The security of crossborder transactions rests on the confidence that the law will enable the
prompt and effective determination of the effect of judgments from other legal systems. For
this reason, there are no separate or additional jurisdictional requirements, such as the residence
of the defendant or the presence of the defendant’s assets in the jurisdiction, for a court to deter-
mine whether a foreign judgment may be recognized or enforced. [Emphasis added; p. 14-1.]
[65] Perell and Morden express a similar view:

Subject to the defences, a Canadian court will enforce a foreign judgment if the foreign court
or foreign jurisdiction had a “real and substantial connection” to the dispute. However, it is
not necessary for the plaintiffs to establish that Ontario has a real and substantial connection
with the litigation; it is sufficient to show that the foreign court that gave the judgment had
a real and substantial connection with the matter. [Footnotes omitted; ¶11.181.]
[66] Pitel and Rafferty take a somewhat different position in the following passage:
Because an action on the foreign judgment is a new legal proceeding, issues of jurisdiction
… must be considered at the outset. If the defendant is resident in the country in which
recognition and enforcement is sought, it will be easy to establish jurisdiction. But in many
cases the defendant will not be resident there: he or she will only have assets there, which
the plaintiff is going after to enforce the judgment. Typically the presence of assets in a prov-
ince is an insufficient basis for taking jurisdiction over a foreign defendant. But most prov-
inces have made specific provision to allow for service ex juris in such cases. For example,
in Ontario service outside the province can be made as of right where the claim is “on a
judgment of a court outside Ontario.” … [T]he plaintiff would still need to show a real and
substantial connection to the province in which enforcement was sought. Under this test,
the presence of assets may be insufficient to ground substantive proceedings but they should
virtually always be sufficient to ground proceedings for recognition and enforcement.
[Footnote omitted; pp. 159-60.]
[67] This statement, however, has been criticized by at least one lower court judge
who “decline[d] to follow that theory for the following reasons: (1) they cite no authority
for the theory that they advance (neither case law nor academic commentary); and (2) the
preponderance of precedent is to the contrary”: CSA8-Garden Village LLC v. Dewar, 2013
ONSC 6229, 369 D.L.R. (4th) 125, at para. 43. I am inclined to agree with this criticism.
Pitel and Rafferty’s statement does not accord with the principles discussed above that
underlie actions for the recognition and enforcement of foreign judgments.
[68] In my view, there is nothing improper in allowing foreign judgment creditors to
choose where they wish to enforce their judgments and to assess where, in all likelihood,
their debtors’ assets could be found or may end up being located one day. In this regard,
it is the existence of clear, liberal and simple rules for the recognition and enforcement
of foreign judgments that facilitates the flow of wealth, skills and people across borders
in a fair and orderly manner: Walker, at p. 14-1. Requiring a real and substantial connec-
tion through the presence of assets in the enforcing jurisdiction would serve only to
hinder these considerations, which are important for commercial dealings in an increas-
ingly globalized economy. It is true that the absence of assets upon which to enforce a
foreign judgment may, in some situations, have an impact on the legitimate use of the
judicial resources of an enforcing court, and in turn on the court’s exercise of its discre-
tionary power to stay the proceeding. The absence of assets may also influence the
appropriateness of the choice of a given forum for the enforcement proceedings. These
issues do not relate, however, to the existence of jurisdiction, but to its exercise; as this
Court emphasized in Van Breda, “a clear distinction must be drawn between the existence
and the exercise of jurisdiction”: para. 101.
[69] Facilitating comity and reciprocity, two of the backbones of private international
law, calls for assistance, not barriers. Neither this Court’s jurisprudence nor the principles
underlying recognition and enforcement actions requires imposing additional jurisdic-
tional restrictions on the determination of whether a foreign judgment is binding and
enforceable in Ontario. The principle of comity does not require that Chevron’s submis-
sions be adopted. On the contrary, an unambiguous statement by this Court that a real
and substantial connection is not necessary will have the benefit of providing a “fixed,
clear and predictable” rule, which some say is necessary in this area: T.J. Monestier, “A
‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2007), 33 Queen’s L.J.
179, at p. 192. Such a rule will clearly be consistent with the dictates of order and fairness;
it will also allow parties “to predict with reasonable confidence whether a court will
assume jurisdiction in a case with an international or interprovincial aspect,” as LeBel J.
in Van Breda insisted they should be able to do: para. 73. Moreover, a clear rule will help
to avert needless and wasteful jurisdictional inquiries that merely thwart the proceedings
from their eventual resumption. As some have noted, our courts “should exercise care in
interpreting rules and developing legal principles so as not to encourage unnecessary
motions,” since “[i]n many cases, the defendant’s challenge to service ex juris is just
another dilatory tactic that provincial rules of civil procedure have sought to avoid”: G.D.
Watson and F. Au, “Constitutional Limits on Service Ex Juris: Unanswered Questions
from Morguard” (2000), 23 Adv. Q. 167, at p. 205. To accept Chevron’s submissions would
be to ignore this wise counsel.
[The court found no Ontario statute law to the contrary but noted, without drawing any
conclusions, the existence in three provinces of the CJPTA.]
(5) Summary
[75] Case law, principle, relevant statutes and practicality all support a rejection of
Chevron’s contention. Jurisdiction in an action for recognition and enforcement stems
from service being effected on the basis of a foreign judgment rendered in the plaintiff ’s
favour, and against the named defendant. There is no need to demonstrate a real and
substantial connection between the dispute and the enforcing forum. To conclude other-
wise would undermine the important values of order and fairness that underlie all con-
flicts rules: Van Breda, at para. 74, quoting Morguard, at p. 1097. Moreover, such a
conclusion would be inconsistent with this Court’s statement in Beals that the doctrine
of comity (to which the principles of order and fairness attach) “must be permitted to
evolve concomitantly with international business relations, cross-border transactions, as
well as mobility”: para. 27. Cross-border transactions and interactions continue to mul-
tiply. As they do, comity requires an increasing willingness on the part of courts to rec-
ognize the acts of other states. This is essential to allow individuals and companies to
conduct international business without worrying that their participation in such relation-
ships will jeopardize or negate their legal rights.
[76] In this case, jurisdiction is established with respect to Chevron, which was served
ex juris pursuant to Rule 17.02(m) of the Rules. The plaintiffs alleged in their amended
statement of claim that Chevron was a foreign debtor as a result of “the final Judgment
of the Appellate Division of the Provincial Court of Justice of Sucumbios of Ecuador of
January 3, 2012”: Joint A.R., vol. 1, p. 102. While this judgment has since been varied by
the Court of Cassation, this occurred after the amended statement of claim had been filed.
The original judgment remains largely intact, although, as noted, the Court of Cassation
reduced the total amount owed. The plaintiffs have sufficiently pleaded the Ontario courts’
jurisdiction over Chevron.
[77] In closing on this first issue, I wish to emphasize that when jurisdiction is found
to exist, it does not necessarily follow that it will or should be exercised: A. Briggs, The
Conflict of Laws (3rd ed. 2013), at pp. 52-53; see also Van Breda, at para. 101. Establishing
jurisdiction merely means that the alleged debt merits the assistance and attention of the
Ontario courts. Once the parties move past the jurisdictional phase, it may still be open
to the defendant to argue any or all of the following, whether by way of preliminary
motions or at trial: that the proper use of Ontario judicial resources justifies a stay under
the circumstances; that the Ontario courts should decline to exercise jurisdiction on the
basis of forum non conveniens; that any one of the available defences to recognition and
enforcement (i.e. fraud, denial of natural justice, or public policy) should be accepted in
the circumstances; or that a motion under either Rule 20 (summary judgment) or Rule
21 (determination of an issue before trial) of the Rules should be granted. The availability
of these potential arguments, however, does not oust the jurisdiction of the Ontario courts
over the plaintiffs’ action for recognition and enforcement.
B. Class Actions
Class action legislation now exists in virtually every province. There are two basic models:
opt-in class actions and opt-out class actions. An opt-in plaintiff class consists of non-
resident individuals who ask to join the action. An opt-out plaintiff class consists of individ-
uals declared by the court to be members of the class but who are given the opportunity to
decline to participate. Once judgment is delivered in the class action or, more commonly, a
settlement is approved, all the members of the class are bound by it and prohibited by the
legislation from commencing another action against the defendant. The recognition and
enforcement issues raised by class actions are considered in Chapter 8.
The jurisdiction simpliciter and territorial jurisdiction issues are, as the following cases
illustrate, complicated by the sheer number of plaintiffs and the fact that many are non-
residents, whether the relevant class action statute is an opt-in or opt-out model. Moreover,
all the acts or transactions constituting the cause or causes of action for the non-residents
plaintiffs may have occurred outside the province.
Harrington v Dow Corning Corp

2000 BCCA 605, 193 DLR (4th) 67
HUDDART JA:
[1] This appeal is from an order certifying this action as a class proceeding, [1996]
BCJ No. 734. The claim is against manufacturers of silicone breast implants and Bristol-
Myers Squibb Company, a supplier of silicone. A resident and non-resident subclass were
described, each comprised of women who have been implanted with silicone gel breast
implants and suffered an injury caused by the implant. The reasons of Mr. Justice Mac-
kenzie, then of the Supreme Court, are reported at (1996), 22 BCLR (3d) 97 (SC). The
action has been resolved since the certification order was made with regard to the Dow
defendants as part of a North America-wide settlement.
[2] The respondent, Helen Harrington, was appointed the representative plaintiff of
the Resident Class and Betty Gladu was appointed for the Non Resident Class. Their claim
is that silicone breast implants cause local complications and systemic disease, sometimes
referred to as auto-immune and connective tissue diseases. They allege that given the risks
of the implantation of these devices, they should not be manufactured or marketed for
use in a human body. Alternatively, they allege that the manufacturers and distributors
are under a duty to warn a potential customer of the harm inherent in the use of the
prosthesis to permit the customer a fully informed choice whether to have a surgeon
implant one in her body. Only the claims in negligence are relevant to this appeal. The
case management judge excluded contractual claims from class determination because
they applied to a limited number of individuals in special circumstances where privity of
contract existed. He set down the common issue: are silicone gel breast implants reason-
ably fit for their intended purpose?
[3] Silicone is the name given to a family of synthetic polymers. The bonds between
its elements do not exist in nature. Silicone polymers come in the form of liquid or oil,
gel, and elastomer (rubber). They are not to be confused with silicon (Si) compounds
such as sodium silicate, silica gel, and siliceous earth. The most common example of a
silicone is polydimethylsiloxane (PDMS), of which most, if not all, breast implant shells
and silicone liquid or gel fillings are made. The evidence suggests there is no substantial
difference among the various styles of implants produced by the manufacturers.
[4] The appellants claim to have manufactured and distributed, through hospitals and
physicians, about 80 different styles of implants; all have a silicone elastomer shell filled
with silicone gel or a saline solution. They are persuaded that there is no reliable scientific
evidence supporting any association between silicone breast implants and systemic dis-
ease, whether classic or atypical. They consider the risks of rupture and local complications
to be manageable. Since 1975, medical professionals have been provided with information
about such risks by way of package inserts.
[5] First, the appellants ask this court to set aside the certification order because the
issue stated does not meet the requirements for a “common issue” under the Class Proceed-
ings Act, RSBC 1996, c. 50. Second, if it does, they submit a class proceeding is not the
preferable procedure for its resolution. The respondent asks this court to vary the certifi-
cation order to include saline-filled breast implants in the common issue and the women
who received them in both subclasses.
[6] Finally, if a class proceeding is the preferable procedure for the resolution of the
common issue, the appellants seek to have the members of the class restricted to residents
whose claims have a real and substantial connection with British Columbia.
• • •
The Jurisdictional Issue

[69] Jurisdiction involves two concepts: jurisdiction simpliciter and forum (non) con
veniens. The first is a question of law, the second involves an exercise of discretion. The
appellants allege that the case management judge erred in law when he included in both
the resident and non-resident classes, women whose claims lack a real and substantial
connection with British Columbia. The well-settled test for jurisdiction simpliciter requires
such a connection between the forum and either the defendant or the subject-matter of
the litigation. The appellants do not suggest that British Columbia is an inconvenient
forum or that another forum is more appropriate.
[70] The respondent accepts that many of the non-resident class and some of the
resident class cannot establish jurisdiction simpliciter under a strict application of the real
and substantial connection test. She asks this court to relax the traditional approach to
claims to jurisdiction, so that the benefits of a class action may be made available to all
Canadian residents wishing to have their claims against the appellants resolved in this
province. The Attorney-General would have this court restate the test for jurisdiction in
class proceedings as a real and substantial connection with the litigation already before
the court.
[71] The only direct connection of any appellant with British Columbia is the sale of
a breast implant to women who were implanted in British Columbia. The appellants
acknowledge jurisdiction on that basis no matter where a claimant resides. It appears they
did not dispute the Supreme Court’s jurisdiction to adjudicate the claims of residents
before Mr. Justice Mackenzie. I agree with the respondent that this ground of appeal must
fail as regards them because the courts of this province are justified in asserting jurisdic-
tion over residents’ claims under the principles laid down in Moran v. Pyle, [1975] 1
SCR 393.
[72] The issue regarding non-residents without a direct connection to this province
is more difficult to resolve.
[73] The respondent is of the view that an extension to these non-residents is explicitly
permitted by s. 16(2) of the Class Proceedings Act:
16(2). … , a person who is not a resident of British Columbia may, … opt into that class
proceeding if the person would be, but for not being a resident of British Columbia, a
member of the class involved in the class proceeding.
One way of expressing the issue on this aspect of the appeal is to ask whether the proced-
ural mechanism of the Class Proceedings Act permits the Supreme Court to take jurisdic-
tion it would not otherwise be empowered to exercise. The respondent considers that it
does and that, in the absence of a challenge to the constitutionality of s. 16(2), this ground
of appeal must fail.
[74] The authorities and literature to which we were referred do not address the
application of s. 16(2). However, it is expressed in the same terms as those recommended
in 1996 by the Uniform Law Conference of Canada in its Uniform Class Proceedings Act,
s. 16(2). The latter has been the subject of some comment insofar as the Legislatures have
chosen opting in over opting out. Opting in is seen as having the advantage of “indicating
that the non-resident accepts the jurisdiction of the court such that they would be pre-
cluded by the doctrine of res judicata from later suing or benefitting from a suit brought
in another jurisdiction.” [Class Actions, Consultation Memorandum no 9 (Alberta Law
Reform Institute, March 2000) at 31.] The equivalent Ontario statute does not mention
residency. However, Ontario courts have developed the concept of a “national” class
purporting to bind both resident and non-resident members who have been given rea-
sonable notice of the proceeding and have not opted out: Nantais v. Telectronics Proprietary
(Canada) Ltd., … [(1995), 25 OR (3d) 331 (Gen Div), leave to appeal denied (1995), 40
CPC (3d) 263 (Ont Div Ct) and (1996), 7 CPC (4th) 206 (Ont CA)]. In refusing leave to
appeal, Zuber J commented at 206 that the effect of an order “remains to be seen,” and
that the “law of res judicata may have to adapt itself to the class proceeding concept.” He
did not undertake that analysis nor has any court before or since.
[75] The appellants accept on the plain wording of the provision that a non-resident
whose claim can meet the requirements of jurisdiction simpliciter is entitled to opt in to
the proceeding because that person would be a member of the class if she were a resident
of British Columbia. Thus, a Newfoundland resident implanted in British Columbia could
opt into this class proceeding. This interpretation gives effect to the inclusion in s. 16(2)
of the words “… if the person would be, but for not being a resident of British Columbia,
a member of the class …” and a purpose to the provision. The respondent takes the view
that s. 16(2) is unnecessary for that purpose; a subclass of non-residents with claims with
a real and substantial connection to British Columbia could be created without it, as
Carom v. Bre-X Minerals Ltd. (1999), 43 OR (3d) 441 (Gen. Div.) illustrates. Thus, the
respondent argues, the Legislature must have intended to “allow an extra-provincial
subclass to be created for people who would not otherwise be allowed to participate in
the British Columbia forum.”
[76] Moreover, the respondent submits, the concept of a real and substantial connec-
tion should be understood in the context of the procedural innovation to permit mass
tort claims by way of class action. In her view, the relevant factors will differ when the
wrong alleged is the sale of a defective product to thousands of mobile claimants rather
than of one carelessly produced product to a single purchaser.
[77] Finally, and in any event, the respondent submits, a decision on whether the court
has jurisdiction over an individual class member’s claim can await a challenge by a defend-
ant in an individual trial. If unchallenged, a woman who opts into a class is likely to be
estopped from suing again in her own or another forum [Harrington v Dow Corning Corp
(1997), 29 BCLR (13d) 88 (SC)].
[78] Mr. Justice Mackenzie remarked at paras. 10 and 11 of his reasons that the Class
Proceedings Act is procedural in nature and neither seeks to extend the jurisdiction of
British Columbia courts beyond its constitutionally recognized limits, nor to define those
limits. He acknowledged that the court would not have jurisdiction over the non-resident
claims aside from the class proceeding but concluded that the British Columbia court
does have jurisdiction simpliciter on the subject matter of the action. At para. 16, he posed
a question to himself:
Nitsuko [Canadian International Marketing Distribution Ltd v Nitsuko Ltd (1990), 68 DLR
(4th) 318 (BCCA)] and Con Pro [Ell v Con-Pro Industries Ltd (1992), 11 BCAC 174 (CA)]
clearly state that this court has no jurisdiction over non-resident claims standing alone.
However, those decisions do not address the problem of mass tort claims spreading across
provincial lines which raise the same issue of liability. The common issue in this case has
already been defined: “Are silicone gel breast implants reasonably fit for their intended pur-
pose?” Does that common liability issue establish a “real and substantial connection” suffi-
cient to found jurisdiction over claims otherwise beyond this court’s jurisdiction?
At para. 18, he answered the question:

It is that common issue which establishes the real and substantial connection necessary for
jurisdiction.
[79] In reaching that conclusion, he had regard for the concerns expressed in Amchem
Products Inc. v. British Columbia (Workers Compensation Board), [1993] 1 SCR 897 by
Sopinka J at 911-912:
With the increase in free trade and the rapid growth of multi-national corporations it has
become more difficult to identify one clearly appropriate forum for this type of litigation.
The defendant may not be identified with only one jurisdiction. Moreover, there are fre-
quently multiple defendants carrying on business in a number of jurisdictions and distribut-
ing their product or services world wide. As well, the plaintiffs may be a large class residing
in different jurisdictions. It is often difficult to pinpoint the place where the transaction giving
rise to the action took place. Frequently, there is no single forum that is clearly the most
convenient or appropriate for the trial of the action but rather several which are equally
suitable alternatives.
[80] Similar considerations moved Mr. Justice La Forest to comment in Tolofson v.

Jensen, [1994] 3 SCR 1022 at 1048-49:
As Morguard and Hunt also indicate, the courts in the various states will, in certain circum-
stances, exercise jurisdiction over matters that may have originated in other states. And that
will be so as well where a particular transaction may not be limited to a single jurisdiction.
Consequently, individuals need not in enforcing a legal right be tied to the courts of the
jurisdiction where the right arose, but may choose one to meet their convenience. This fosters
mobility and a world economy.
and at 1049:
… In Canada, a court may exercise jurisdiction only if it has a “real and substantial connec-
tion” (a term not yet fully defined) with the subject matter of the litigation.
[81] This adaptation of the law to the reality of national and international commerce
in the interest of comity among provinces and nations is a continuing process, as Mr.
Justice La Forest pointed out in Morguard Investments Ltd. v. De Savoye, [1990] 3 SCR
1077 at 1078. He found guidance as to the manner in which a court could properly exer-
cise jurisdiction in Mr. Justice Dickson’s opinion in Moran, supra. At 1106, he wrote:
… [Dickson J] rejected any rigid or mechanical theory for determining the situs of the tort.
Rather, he adopted “a more flexible, qualitative and quantitative test,” posing the question,
as had some of the English cases there cited, in terms of whether it was “inherently reason-
able” for the action to be brought in a particular jurisdiction, or whether, to adopt another
expression, there was a “real and substantial connection” between the jurisdiction and the
wrongdoing.
[82] At 1109, he dealt with constitutional concerns this way:

The private international law rule requiring substantial connection with the jurisdiction
where the action took place is supported by the constitutional restriction of legislative power
“in the province.” … The restriction to the province would certainly require at least minimal
contact with the province, and there is authority for the view that the contact required by
the Constitution for the purposes of territoriality is the same as required by the rule of private
international law between sister-provinces.
[83] In Moran, supra, Mr. Justice Dickson found a real and substantial connection in
the injury caused by the defendant by a flexible application of the test for the location of
a tort. At 409, he formulated a rule appropriate to a case of careless manufacture and
explained it as follows:
… [W]here 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. This rule recognizes the important interest a state has in injuries
suffered by persons within its territory. It recognizes that the purpose of negligence as a tort
is to protect against carelessly inflicted injury and thus that the predominating element is
damage suffered. By tendering his products in the market place directly or through normal
distributive channels, a manufacturer ought to assume the burden of defending those prod-
ucts 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 the
goods. This is particularly true of dangerously defective goods placed in the interprovincial
flow of commerce.
[84] In my view, this rule is sufficient to justify the inclusion in the resident class of
all women resident in British Columbia who allege they are suffering harm from the use
of silicone breast implants manufactured and put into the flow of commerce negligently
by an appellant. Any manufacturer of breast implants would understand that any injury
would follow the user in whom they were implanted into whatever jurisdiction the user
might reside from time to time.
[85] It might be said that all women who suffer injury from breast implants may opt
into the class proceeding because they would all come within the language of s. 16(2).
But, as Mr. Justice Mackenzie noted, this procedural provision does not seek to extend
the jurisdiction of British Columbia courts beyond their constitutionally recognized
limits. Rather, it tells a court that the Legislature accepts, even encourages, a decision to
include non-residents in class proceedings as a matter of public policy. This policy makes
good sense. Section 16(2) may preclude the court from certifying a national class on an
opting out basis, as was done in Nantais, supra. However, it accords with requirements of
comity, and with the policy underlying the enactment of legislation enabling class actions
to determine the liability of defendants for mass injury in one forum to the extent claim-
ants may wish and fairness to the defendants may permit.
[86] Jurisdiction simpliciter is not a rigid concept, capable of determination only by
the strict application of rules. The location of a tort has never been the beginning of the
enquiry. Nor is it now. It was an exception to the traditional rules for asserting jurisdiction.
In this regard, it is worth recalling Mr. Justice Dickson’s brief review of the development
of jurisdictional rules in Moran, supra, at 397. He noted that traditionally jurisdiction
rested upon the “physical power and the ability of the Court to enforce any judgment it
may render” and thus, normally, on the defendant’s presence in the jurisdiction or on his
voluntary submission to the court’s authority. Yet, he noted, Canadian and English courts
also asserted jurisdiction “in respect of torts committed within the territorial limits of
the Court,” whatever the residence of the parties.
[87] The justification for claiming or refusing jurisdiction rests upon the principles
of order and fairness sometimes called comity. Comity, especially inter-provincial comity,
calls for the meshing of the principles of res judicata, the rules for the recognition and
enforcement of orders, the rules for the issuance of anti-suit injunctions, and the rules
for the assumption of jurisdiction. Thus do Canadian courts respect each other’s territorial
jurisdiction while ensuring that good sense prevails in the commercial world. In Canada,
this meshing requires a provincial court to place reasonable restrictions on its assertion
of jurisdiction. A real and substantial connection is the test of that limit. If this test is met,
constitutional limits will not be breached as Mr. Justice La Forest explained in Hunt v.
T&N plc, [1993] 4 SCR 289.
[88] The decision to refuse certification in Werner v. Saab-Scandia AB, [1980] CS 798
(Que. SC); aff ’d. (19 February 1982), Montreal, 500-09-001005-800 (Que. CA) must be
viewed in this context. So, too, must Master Bolton’s opinion in Seguin-Chand v. McAl-
lister, [1992] BCJ No. 237 (BCSC) that the continuing suffering of damages in British
Columbia could not found jurisdiction where the negligence causing the injury and the
original injury occurred outside British Columbia. If proper regard is to be had for the
principles explained in Hunt, supra, the failure of a non-resident (or resident) plaintiff to
allege that a cause of action arose in British Columbia cannot be decisive of jurisdiction
simpliciter.
[89] When regard is had to the considerations underlying the imposition of limits to
claims of jurisdiction, I consider that Mr. Justice Mackenzie was right to find jurisdiction
simpliciter had been established. Moreover, British Columbia is an appropriate court for
the resolution of the common issue. If, at some point, an appellant forms the view that
another court is more appropriate, whether for the claims as a whole or for some of them,
it can apply for the appropriate relief under one or more of the provisions (up to and
including decertification) of the Class Proceedings Act designed to ensure the proceedings
are fair to all parties. The powers conferred on the case management and trial judges are
such that a learned intermediary defence or a causation issue specific to one or more
non-residents should be capable of accommodation by way of the certification of a further
sub-class or at the individual determination stage. The Class Proceedings Act presumes
good will and cooperation in resolving differences on the part of all parties.
[90] The jurisdictional rules being functional, the values protected by the real and
substantial connection test dictate the factors relevant to its application. The fundamental
values are fairness to the parties and orderly decision-making. As Mr. Justice La Forest
noted in Hunt v. T&N plc, supra, at 325, “the connections relied on under the traditional
rules are a good place to start.” However, broad principles of order and fairness must
prevail. A decision whether a court has jurisdiction must not depend on a mechanical
application of a rigid test.
[91] Some cases will not require a court to move beyond the traditional rules. If a
defendant is within the jurisdiction or has submitted to judgment by agreement or attorn-
ment or if a wrong has been committed within the jurisdiction, the test will normally be
satisfied. This is the result because no injustice results from a court taking jurisdiction in
such cases and orderly decision-making within Canada is respected. If a more appropriate
forum from the defendant’s perspective exists for resolution of the dispute, the court’s
discretion to decline jurisdiction as a forum non conveniens may obviate the need for any
decision about jurisdiction simpliciter.
[92] Where the traditional rules are not adequate to ensure fairness and order then
other considerations will become relevant. One such consideration will be the nature of
the subject matter of the action. In this case, the alleged wrongful acts are defective manu-
facture or failure to warn. When a manufacturer puts a product into the marketplace in
any province in Canada, it must be assumed that the manufacturer knows the product
may find itself anywhere in Canada if it is capable of being moved. As I suggested earlier
in these reasons, it is reasonable to infer that a manufacturer of a breast implant knows
that every purchaser will wear that implant wherever she resides, and that if the implant
causes injury then the suffering will occur wherever she resides, and require treatment
in that location. By the action of sale, the manufacturer risks an action in any province.
In these circumstances, there can be no injustice in requiring a manufacturer to submit
to judgment in any Canadian province. The concept of forum non conveniens is available
to deal with any individual case where a different forum is established as more appropriate.
As Mr. Justice La Forest remarked in the passage I quoted from Tolofson, supra, in some
circumstances individuals need not be tied to the courts of the jurisdiction where the
right arose, but may choose one to meet their convenience.
[93] The existence of a certified class proceeding cannot be ignored when that action
will resolve an issue of fact common to the claims being asserted by those who seek to
join it. As Mr. Justice Rehnquist noted in Phillips Petroleum Co. v. Shutts, 472 US 797
(1985) at paras. 22 and 23:
… the class action was an invention of equity to enable it to proceed to a decree in suits where
the number of those interested in the litigation was too great to permit joinder. The absent
parties would be bound by the decree so long as the named parties adequately represented
the absent class and the prosecution of the litigation was within the common interest. The
modern class action serves that same purpose, while also permitting the pooling of claims
otherwise uneconomical to litigate.
[94] Submissions founded on concern about the scarcity of judicial resources must
have regard to the legislative expression of the province’s willingness to provide a forum
for the resolution of such non-resident claims. Ontario courts interpret the equivalent
Ontario legislation as encouraging the determination of common issues on a national
opting out basis by a court with a real and substantial connection to the action. The
Uniform Law Commission recommends an opting in provision that permits inclusion of

non-resident claims if the claimant’s residence is the only reason for exclusion.
[95] At the very least, the existence of a certified class proceeding must mean that the
connections between the proposed claims and the province must be examined not only
from the perspective of the defendants, but also from the perspective of the proposed
class of plaintiffs.
[96] In saying this, I 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. The court’s concern is to respect constitutional
requirements. That concern was at the root of the Supreme Court’s decision in Morguard,
supra, where the distinction between jurisdiction and convenience was drawn clearly for
the first time.
[97] The appellants acknowledge the jurisdiction of British Columbia courts to
determine the claims of at least those resident and non-resident class members implanted
in British Columbia. They are defending the class action. I have found that the British
Columbia courts have jurisdiction to determine the claims of all residents. I accept that
presence in the jurisdiction for the purpose of the defence of one claim does not create
presence in the jurisdiction for the purpose of the prosecution of another independent
claim. However, I do not accept that proposition as precluding a court from taking account
of that presence for the purpose of determining whether the existence of a certified class
action with a common issue provides a real and substantial connection between the
province and the subject matter of the claim that a non-resident seeks to have resolved
in the same class proceeding.
[98] The appellants are manufacturers of an allegedly defective product for personal
use which they market throughout Canada. Such a person must anticipate the possibility
of being haled into any Canadian court. The issue of that product’s fitness is common to
all purchasers wherever they reside. The Supreme Court has properly accepted jurisdiction
over all claims by purchasers resident in British Columbia. The appellants are defending
those claims. The Supreme Court has certified an issue common to all purchasers for
resolution in a class proceeding. These are compelling reasons for British Columbia courts
to accept jurisdiction. British Columbia has more than a little interest in accommodating
a national resolution of this dispute.
[99] New types of proceedings require reconsideration of old rules if the fundamental
principles of order and fairness are to be respected. To permit what the appellants call
“piggy backing” in a class proceeding is not to gut the foundation of conflict of laws
principles. Rather, as I have tried to explain, it is to accommodate the values underlying
those principles. To exclude those respondents who do not reside in British Columbia
from this action because they have not used the product in British Columbia would, in
these circumstances, contradict the principles of order and fairness that underlie the
jurisdictional rules. By opting in the non-resident class members are accepting that their
claims are essentially the same as those of the resident class members. To the extent the
appellants can establish they are not, they can be excluded by order of the case management
or trial judge upon application. So can a class certified in another province, as the Dow
Settlement Order in this proceeding illustrates.
[100] For these reasons, I am satisfied Mr. Justice Mackenzie was correct to find that
the existence of a common issue of fact constituted sufficient connection to found juris-
diction in this case.
[101] It follows from these reasons that I would dismiss the appeal and the
cross-appeal.
[Rowles and Ryan JJA concurred with Huddart JA. Esson and Finch JJA issued dissenting
judgments.]
Ward v Canada (Attorney General)

2007 MBCA 123, 286 DLR (4th) 684 (some headings omitted)
FREEDMAN JA:
[1] This appeal concerns a proposed class action. The claim is based on harm allegedly
caused by the spraying of herbicides, including “Agent Orange,” at Canadian Forces Base
Gagetown, in New Brunswick, commencing as early as the mid-1950’s and continuing in
certain respects to the present day. The action is at an early stage, and this appeal is about
the jurisdiction of the Court of Queen’s Bench of Manitoba.
[2] This action has been commenced by Doug Ward, a Manitoba resident (the “plain-
tiff ”), against Ministers of the Federal Crown (the “Crown”), alleging that damage has
been sustained by the plaintiff in Manitoba as a result of the spraying of herbicides in New
Brunswick by the Crown. The Crown is resident in every province and territory of Canada.
If a Manitoba resident plaintiff sues a Manitoba resident defendant alleging damage
sustained here, the court will have, and will typically exercise, jurisdiction over that action.
In this action, however, it is very likely that non-residents will be included in the class of
plaintiffs, if and when that class is finally identified, and if and when this action is certified
as a class action. Therein lies the source of the present problem.
[3] There are two issues in this appeal. First, in light of the prospective inclusion of
non-residents in the class of plaintiffs, does the Manitoba court have jurisdiction? Second,
if it does, in the particular circumstances of this claim should the court exercise that juris-
diction? The first issue is a matter of law, while the second is a matter of judicial discretion.
[4] The Crown moved before a judge to have the action dismissed or stayed. It argued
that only the courts of New Brunswick could properly take jurisdiction over this action.
It also argued that, even if a Manitoba court had jurisdiction as a matter of law, in the
circumstances it should decline to exercise it and should defer to the courts of New
Brunswick. The judge dismissed the Crown’s motion. I agree with the conclusions reached
by the judge, and, for the reasons that follow, would dismiss the Crown’s appeal.
[5] The amended statement of claim in this matter (no statement of defence has yet
been filed) asserts that between 1956 and 2005 the Crown sprayed various chemicals,
most of which included high levels of dioxins, on CFB Gagetown. The claim alleges that
dioxin is “the most toxic chemical ever produced.” The claim asserts that the chemicals
sprayed included carcinogens and that the chemicals caused very serious damage to many
persons. The claim lays out in considerable detail allegations that, if proven, and if applic-
able to a large number of plaintiffs, could result in a judgment of some magnitude.
[6] The plaintiff lives in Manitoba and was a member of the military stationed at CFB
Gagetown in the mid-1970’s. He alleges that certain medical problems he has encountered
are the result of the spraying of the chemicals by the Crown. He states that he is a repre-
sentative of a class of persons which he describes as: “All individuals (including their
estates) and other legal entities who claim to have suffered or expect to suffer injury to
their persons or their property as a result of the spraying of various chemicals by the
Defendant at CFB Gagetown between 1956 and 2005.” The injuries allegedly suffered by
these persons include cancer of various kinds, reproductive/birth disorders and many
other kinds of illnesses.
[7] Claims similar to the present one have been filed by the plaintiff ’s counsel in most
or all Canadian provinces, in each case with a plaintiff resident in the particular province.
In the provinces which, like Manitoba, have some form of class action legislation, the
claims have been filed as class actions.
[8] The Class Proceedings Act, CCSM, c. C130 (the Act), came into force in this prov-
ince on January 1, 2003. In the Act, a class action, the commonly used term, is called a
class proceeding. I will use the terms interchangeably. Among the provisions of the Act
that should be noted is s. 6(3), which permits the division of a class of plaintiffs into resi-
dent and non-resident subclasses.
[9] The Act is what the parties describe as “opt out” legislation. Members of a certified
class of plaintiffs may opt out of the proceedings (s. 16), but if they do not do so they are
treated as part of the class. This is contrasted with the situation in certain other provinces
that have class action legislation where a plaintiff must “opt in” to participate. This “opt
out” feature, together with favourable provisions on costs (discussed below), means that
Manitoba is considered a “plaintiff-friendly” class action jurisdiction. See Ward K. Branch,
Class Actions in Canada, looseleaf (Aurora: Canada Law Book, 2006) at para. 11.197.
[Freedman JA set out the reasons of the trial judge and the arguments of the representative
plaintiff and the defendant Crown.]
1. Jurisdiction Simpliciter
[35] The traditional basis of a court’s jurisdiction in an action for injury to the person
was explained by Dickson J (as he then was) in Moran v. Pyle National (Canada) Ltd.,
1973 CanLII 192 (SCC), [1975] 1 SCR 393 at 397 in these terms:
Traditionally, the view has been held that jurisdiction in a personal action rests upon physical
power and the ability of the Court to enforce any judgment it may render. Jurisdiction,
therefore, normally depends upon the presence of the defendant within the territorial limits
of the Court or upon the voluntary submission of the defendant to the authority of the
Court. …
[36] This view has a foundation grounded in longstanding practice and precedent. As
was aptly expressed by Professor S.G.A. Pitel & C.D. Dusten, “Lost in Transition: Answer-
ing the Questions Raised by the Supreme Court of Canada’s New Approach to Jurisdic-
tion” (2006), 85 Can. Bar Rev. 61 at 68-69: “… the historic roots of presence-based
jurisdiction cannot be over-emphasized. As a matter of precedent, common law courts

have taken jurisdiction based on presence for hundreds of years …”
[37] Many cases were cited to us where the defendant was not resident in the juris-
diction, a very important factor, which distinguishes those cases from this. It is central
to the first issue here that the Crown’s presence in this jurisdiction satisfies the traditional
test outlined in Moran. The issue here is different than the one in those other cases. The
issue may be described this way: should there be a new or modified approach to jurisdic-
tion in a proposed class action, in circumstances where, if the action was an individual
action, the court would clearly have jurisdiction? That issue will first be considered from
the perspective of jurisdiction simpliciter.
[38] As the judge correctly observed, challenges to jurisdiction simpliciter are rare
where both the plaintiff and the defendant reside within the jurisdiction. I agree with his
statement that in this action jurisdiction simpliciter would ordinarily be satisfied without
consideration of whether there is a “real and substantial connection” between the claim
and this province. After all, there is a resident plaintiff who is suing resident defendants,
asserting damage suffered in this province, and those circumstances would usually be
sufficient to vest jurisdiction simpliciter in the court. The Morguard “real and substantial
connection” test was developed in an entirely different situation; in that case, the defend-
ant was in a province different from the one where the action was commenced.
[39] But, while this action at present has only one plaintiff, it is intended that it be
certified as a class action. If it is certified, there will be many, probably a majority, of non-
resident plaintiffs, or class members. For that reason, the Crown argued that jurisdiction
simpliciter should not be found to exist here, notwithstanding the Crown’s presence, unless
the acts or omissions in question occurred within Manitoba. The judge rejected this
approach, and I agree with his doing so.
[40] One of the clearest explanations for why the potential inclusion of non-residents
in the class of plaintiff should not deprive a court of the jurisdiction simpliciter it would
otherwise have can be found in the decision of the British Columbia Court of Appeal in
Harrington v. Dow Corning Corp., 2000 BCCA 605 (CanLII), 2000 BCCA 605, 144 BCAC
51. That was a class action involving a number of issues, and the certification order
included non-residents in the class, even though they had not used the product in British
Columbia. For the majority, Huddart JA examined the jurisdictional issues (at
paras. 69-99). She noted that jurisdiction simpliciter is a question of law. She reviewed the
“real and substantial connection” test and then said (at para. 91):
Some cases will not require a court to move beyond the traditional rules. If a defendant is
within the jurisdiction … the test will normally be satisfied. This is the result because no
injustice results from a court taking jurisdiction in such cases and orderly decision-making
within Canada is respected. …
She pointed out that the question of whether a more appropriate forum existed could be
dealt with under the forum non conveniens analysis.
[41] Huddart JA also said that (at para. 92): “Where the traditional rules are not
adequate to ensure fairness and order then other considerations will become relevant … .”
In this case, in my opinion, the Crown has not, or at least has not yet, shown that the
traditional, presence-based approach to establishing jurisdiction would result in other
than fairness and order. The traditional tests still apply, such that where the parties each
have a presence within the province, and there is a connection such as the sustaining of
damages within the province, there is normally no need to go further and see whether
there exists the “real and substantial connection” referred to in Morguard. I agree with
the views expressed by the British Columbia Court of Appeal in Teja et al. v. Rai, 2002
BCCA 16 (CanLII), 2002 BCCA 16, 162 BCAC 187 (at para. 23, also per Huddart JA),
that the “real and substantial connection” test does not override the traditional tests, since
that test was “developed for non-traditional situations.”
[42] More recently, the Ontario Court of Appeal confirmed that the traditional rules
for the assumption of jurisdiction were alive and well, and had not been subsumed into
the “real and substantial connection” test where the defendant was present in the juris-
diction. In Incorporated Broadcasters Ltd. v. Canwest Global Communications Corp., 2003
CanLII 52135 (ON CA), (2003), 63 OR (3d) 431, 169 OAC 1, leave to appeal dismissed,
[2003] SCCA No. 186 (QL), Rosenberg JA, for the court, said (at para. 29):
… The real and substantial connection test applies where a court seeks to assume jurisdiction
over defendants that have no presence in the jurisdiction. The real and substantial connection
test serves to extend jurisdiction of the domestic courts over out-of-province defendants. It
is not a pre-requisite for the assertion of jurisdiction over defendants, even out-of-province
defendants, that may be present in the jurisdiction. …
[43] Rosenberg JA discussed certain aspects of Morguard, in these terms (at para. 30):
… The court held that provinces should recognize each other’s judgments when it was
appropriate for the court that gave the judgment to have assumed jurisdiction. At pages
1103-04 SCR, La Forest J explained the traditional limits of jurisdiction. As he said, the
question of appropriate jurisdiction “poses no difficulty where the court has acted on the
basis of some ground traditionally accepted by courts as permitting the recognition and
enforcement of foreign judgments—in the case of judgments in personam where the defend-
ant was within the jurisdiction at the time of the action or when he submitted to its judgment
whether by agreement or attornment.” Where the defendant is within the jurisdiction, the
court has jurisdiction over the person. …
[44] The “real and substantial connection” test was formulated in Morguard, where
the defendant was in another province (and the case was about the enforceability of an
Alberta judgment in British Columbia). At p. 1103, the judgment states that there was
“no difficulty” in assuming jurisdiction based on the presence of the defendant. I agree
with Pitel and Dusten, op. cit., at p. 64, that there was no suggestion in Morguard that the
court was modifying the traditional test for jurisdiction based on the presence of the
defendant, and requiring a real and substantial connection, where the defendant was
present. The “real and substantial connection” test was intended to deal with a different
category of jurisdictional cases, namely, those involving assumed jurisdiction, and not
jurisdiction based on presence or agreement.
[45] But later cases have raised questions as to the scope of that test; see, for example,
Beals v. Saldanha, 2003 SCC 72 (CanLII), 2003 SCC 72, 2003 SCC 72 (CanLII), [2003] 3
SCR 416, where Major J, for the majority, said (at para. 37):
… A real and substantial connection is the overriding factor in the determination of juris-
diction. The presence of more of the traditional indicia of jurisdiction (attornment, agree-
ment to submit, residence and presence in the foreign jurisdiction) will serve to bolster the
real and substantial connection to the action or parties. …
[46] This is not readily reconcilable with Morguard, but perhaps the answer is that a
court assessing jurisdiction based on the defendant’s presence can always stay proceedings
based on forum non conveniens (see Pitel and Dusten, op. cit., at p. 69). I am satisfied that,
for the purposes of determining jurisdiction simpliciter, the real and substantial connec-
tion test has no application in this action, where the plaintiff and the defendants each
have a presence in the jurisdiction and the plaintiff alleges he sustained damage here.
[47] I return to the issue described in para. 37; does the prospective certification of
this proceeding as a class action deprive the court of the jurisdiction simpliciter which it
otherwise clearly has? In my view it does not. The Supreme Court of Canada recently
discussed this very issue, in Bisaillon v. Concordia University, 2006 SCC 19 (CanLII), 2006
SCC 19, 2006 SCC 19 (CanLII), [2006] 1 SCR 666. Writing for the majority, LeBel J said
(at paras. 16-19, 22):
The class action has a social dimension. Its purpose is to facilitate access to justice for citizens
who share common problems and would otherwise have little incentive to apply to the courts
on an individual basis to assert their rights … This Court has already noted that legislation
on class actions should be construed flexibly and generously. …
The class action is nevertheless a procedural vehicle whose use neither modifies nor
creates substantive rights … It cannot serve as a basis for legal proceedings if the various
claims it covers, taken individually, would not do so …
… Thus, unless otherwise provided, the substantive law continues to apply as it would in
a traditional individual proceeding. …
Similarly, recourse to this procedural vehicle does not change the legal rules relating to
subject-matter jurisdiction. …
• • •
In short, the class action procedure cannot have the effect of conferring jurisdiction on
the Superior Court over a group of cases that would otherwise fall within the subject-matter
jurisdiction of another court or tribunal. Except as provided for by law, this procedure does
not alter the jurisdiction of courts and tribunals. Nor does it create new substantive rights. …
[emphasis added]
[48] In these proceedings the Court of Queen’s Bench of Manitoba has jurisdiction
simpliciter. The prospective addition of non-resident plaintiffs to the class would only
become relevant at certification, or in the forum non conveniens analysis, to which I now
turn.
[The court found no reason to interfere with the trial judge’s decision that Manitoba was
forum conveniens. The appeal was dismissed.]
Kaynes v BP, PLC

2014 ONCA 580
SHARPE JA:
[1] In this proposed class action, the respondent plaintiff alleges that the appellant,
BP, PLC (“BP”), made misrepresentations in documents it sent to shareholders. The
plaintiff asserts the statutory cause of action for secondary market misrepresentation
conferred by Part XXIII.1 of the Securities Act, R.S.O. 1990, c. S.5.
[2] The plaintiff purchased his shares over the New York Stock Exchange (“NYSE”).
The proposed class definition includes all residents of Canada who acquired BP securities
between May 9, 2007 and May 28, 2010 wherever those securities were purchased. The
issue raised on this appeal is whether Ontario has or should assert jurisdiction over the
plaintiff ’s claim and the claims of proposed class members who purchased BP shares on
foreign exchanges.
[3] BP concedes that Ontario has jurisdiction to entertain the claims of those members
of the proposed class who purchased their shares on the Toronto Stock Exchange (TSX”),
but contends that there is no real and substantial connection between Ontario and the
claims of Canadian residents who, like the plaintiff, purchased their shares on foreign
exchanges. Alternatively, BP argues that even if there is jurisdiction simpliciter, Ontario
should decline to exercise that jurisdiction on grounds of forum non conveniens.
[4] The motion judge dismissed BP’s jurisdictional challenge. For the following rea-
sons, I agree with the motion judge that Ontario does have jurisdiction simpliciter, but I
respectfully conclude that she erred in principle in failing to decline jurisdiction on
grounds of forum non conveniens.
Facts
[5] The plaintiffs claim relates to the April 2010 Deep Water Horizon oil spill that
occurred in the Gulf of Mexico. The plaintiff alleges that BP made certain misrepresenta-
tions in its public disclosures, before and after the spill, related to its operations, safety
programs, and the accident that impacted the price of BP shares.
[6] The plaintiff owns 1404 BP American Depository Shares (“ADS”), a form of equity
security currently listed for trading only on the NYSE. The plaintiff purchased all his
shares over the NYSE. ADS were formerly listed on the TSX but were delisted on August
15, 2008 due to low trading volume. BP’s common shares are listed for trading on the
London Stock exchange (“LSE”) and the Frankfurt Stock Exchange (collectively, the
“European Exchanges”) but they have never been listed on the TSX.
[7] BP, a UK Corporation headquartered in London, England, does not own any real
or personal property in Canada, nor does it carry on business in Canada. However, BP
was a “reporting issuer” under Ontario’s securities regulatory regime during the period
when ADS were traded on the TSX. In January 2009, after ADS were delisted from the
TSX, BP ceased to be a reporting issuer in Ontario and other Canadian provinces on the
following condition that it undertake to continue to send relevant investor documents to
its shareholders in Canada:
[BP] undertakes to continue to send or provide to its security holders in Canada all disclosure
material that it is required to send or provide to U.S. resident holders of [BP’s] securities of
the same class or series, in the same manner and at the same time that such material is
required to be sent or provided to US resident security holders under applicable US federal
securities laws or exchange requirements.
[8] While there is some dispute as to what documents the plaintiff actually received,
BP does not dispute that it was required by the undertaking to send him the documents
specified in the undertaking.
[9] The proposed class consists of all residents of Canada who acquired BP equity
securities, whether common shares or ADS, between May 9 2007 and May 28, 2010 and
who held some or all of those securities through the end of the proposed class period.
[10] The proposed class excludes those who purchased shares on the NYSE and do
not opt out of a parallel proceeding currently underway in the United States District Court
for the Southern District of Texas. That proceeding is based upon the same alleged mis-
representations. Certification in the U.S. proceedings was denied in December 2013 on
the ground that the plaintiffs had failed to demonstrate that damages could be determined
on a class basis in accordance with binding authority from the United States Supreme
Court: In re: BP Plc Securities Litigation, 4:10-md-2185 (S.D.Tex, Dec., 2013). However,
the plaintiffs were given leave to make a second attempt at establishing the elements
necessary for certification.
Legislation
[11] The plaintiff ’s claim is based upon Part XXIII.1 of the Securities Act, the relevant
portions of which are as follows:
138.1 In this Part,
“responsible issuer” means,

(a) a reporting issuer, or
(b) any other issuer with a real and substantial connection to Ontario, any securities
of which are publicly traded
• • •
138.3(1) Where a responsible issuer or a person or company with actual, implied or

apparent authority to act on behalf of a responsible issuer releases a document that contains
a misrepresentation, a person or company who acquires or disposes of the issuer’s security
during the period between the time when the document was released and the time when the
misrepresentation contained in the document was publicly corrected has, without regard to
whether the person or company relied on the misrepresentation, a right of action for dam-
ages. …
[Sharpe JA recounted the decision of the motion judge.]

Analysis
(1) Did the Motion Judge Err in Finding That Ontario Has Jurisdiction Over
the Claims of Those Class Members Who Purchased Their Shares
on Foreign Exchanges?
[18] Van Breda holds that to establish a real and substantial connection between either
the defendant or the subject matter of the claim and the forum, the plaintiff must establish
one of four “presumptive connecting factors” or establish a new connecting factor.
[19] The first two presumptive connecting factors identified in Van Breda relate to the
connection between the forum and the defendant. A presumptive connecting factor to
Ontario as the forum is made out where the defendant is (i) domiciled or resident in
Ontario, or (ii) carries on business in Ontario. It is not disputed that BP lacks a sufficient
presence in Ontario to establish either of these presumptive connecting factors.
[20] The second two presumptive factors relate to the connection between the forum
and the plaintiff ’s claim. A presumptive connecting factor is made out where (iii) the
claim is for a tort committed in Ontario, or (iv) a contract connected with the dispute
was made in Ontario. The plaintiff does not argue that the securities he and other class
members purchased on foreign exchanges can be said to arise from a contract connected
with the dispute that was made in Ontario. It follows, accordingly, that the only presump-
tive connecting factor capable of supporting jurisdiction in this case is if the claim is for
a tort committed in Ontario.
[21] BP submits that the motion judge erred in finding that, on the facts alleged by
the plaintiff, it committed the statutory cause of action created by s. 138.3(1) in Ontario.
For convenience, I repeat here the relevant statutory language:
Where a responsible issuer or a person or company with actual, implied or apparent author-
ity to act on behalf of a responsible issuer releases a document that contains a misrepresentation,
a person or company who acquires or disposes of the issuer’s security during the period
between the time when the document was released and the time when the misrepresentation
contained in the document was publicly corrected has, without regard to whether the person
or company relied on the misrepresentation, a right of action for damages. … [Emphasis added.]
[22] BP’s two central arguments are based on the words I have [emphasized] in
s. 138.3(1).
[23] First, BP focusses on the requirement that the responsible issuer release a docu-
ment containing a misrepresentation. BP contends that for the statutory tort to be com-
mitted in Ontario, the document containing the alleged misrepresentation must be
released in Ontario. BP does not have a presence in Ontario and the point of the initial
release of the documents was outside the province. Therefore, it cannot be said BP did
something in Ontario that could amount to the commission of the statutory tort.
[24] BP’s second central submission is that as the effect of the statute is to do away
with the element of reliance, the motion judge erred by adopting by analogy the test for
the situs of the common law tort of negligent misrepresentation, namely, the place where
the negligent misrepresentation was received and relied upon. BP submits that the net
effect of the motion judge’s focus on deemed reliance by Ontario investors is to base
jurisdiction on nothing more that the plaintiff ’s place of residence, a connecting factor
said in Van Breda to be insufficient to ground jurisdiction.
[25] In my view, accepting BP’s submissions would revert to a long-rejected test for
determining the place of commission of a tort, ignore the purpose of s. 138.3, and unduly
restrict its ordinary meaning.
[26] BP’s shares are no longer listed on a Canadian exchange and BP has ceased to be
a reporting issuer but BP has undertaken to continue to make disclosure to its Ontario
shareholders. When it released the documents that contain the alleged misrepresentations,
BP knew by virtue of the undertaking it had given, that even if the initial point of release
was outside Ontario, the document was certain to find its way to Ontario and to its
Ontario shareholders.
[27] Since Dickson J.’s landmark decision in Moran v. Pyle National (Canada) Ltd.,
[1975] 1 S.C.R. 393, Canadian courts have rejected the rigid and unduly mechanical “place
of acting” test for determining the place of commission of a tort for purposes of determin-
ing jurisdiction. Moran v. Pyle involved a defective light bulb that was manufactured in
Ontario and that caused injury in Saskatchewan. The defendant did not carry on business
in Saskatchewan, all its manufacturing and assembly operations were in Ontario and it
did not directly sell it products in Saskatchewan. The Supreme Court held that the tort
was committed in Saskatchewan. As Dickson J. explained at p. 409:
[W]here 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 … . By tendering his products in the market place directly or
through normal distributive channels, a manufacturer ought to assume the burden of defend-
ing those products wherever they cause harm as long as the forum into which the manufac-
turer is taken is one that he reasonably ought to have had in his contemplation when he so
tendered his goods.
[28] In my view, the same line of reasoning applies here. By releasing a document
outside Ontario that BP knew it was required to send to Ontario shareholders, BP com-
mitted an act with sufficient connection to Ontario to qualify as the commission of a tort
in Ontario.
[29] I find the reasons of Goudge J.A. in Central Sun Mining Inc. v. Vector Engineering
Inc. 2013 ONCA 601, 117 O.R. (3d) 313 (C.A.) instructive on this issue. That case involved
a claim for negligent misrepresentation based on reports prepared in the United States
and sent to the plaintiff ’s office in Vancouver. Decisions relying on those reports were
made by senior executives of the plaintiff located in Ontario. There was some question as
to whether the reports had been sent to Ontario. This court found that even if they had
not, there was a sufficient connection with Ontario to establish a real and substantial
connection for purposes of jurisdiction (at para. 33):
The respondents foresaw that their studies would be received by the appellant and acted on
in Toronto. They should have expected to be called to account in Ontario. In the modern
world where corporations have various offices in various locations, corporate defendants
should not escape liability simply because they send their studies to an office of the plaintiff
outside Ontario with the clear understanding that it will be acted on in Ontario.
[30] While the present case does not involve a claim for negligent misrepresentation,
I see no reason not to hold, by analogy, that when BP released documents that it was
legally required to provide its Ontario shareholders, it committed an act that that had an
immediate and direct connection with Ontario, an act that is sufficient to establish a real
and substantial connection between the claim of this plaintiff and Ontario. In my view,
the legislature could not have intended that a foreign corporation such as BP could avoid
the reach of Ontario’s securities regime simply because the initial point of release of the
document was outside Ontario.
[31] I do not accept BP’s argument that the motion judge erred in her interpretation
of Abdula [v Canadian Solar Inc, 2012 ONCA 211] or that Abdula stands as authority for
the proposition that for purposes of s. 138.3(1), the point of release of the documents
must be Ontario. The defendant in Abdula was a federally incorporated company with
offices, including its principal executive office in Ontario. Its shares were publicly traded
on the NASDAQ exchange in the United States but not on any Canadian exchange. The
issue on appeal was whether the defendant was a “responsible issuer” as defined by
s. 138.1. The defendant was not a “reporting issuer” so the question was whether the
defendant fell within s. 138.1(b): “any other issuer with a real and substantial connection
to Ontario, any shares of which are publicly traded.” Writing for the court, Hoy J.A.
reviewed the history and purpose of the continuous disclosure regime under the Securities
Act and the statutory cause of action created by s. 138.3. She concluded, at para. 72, that
“the words ‘publicly traded’ in paragraph (b) of the definition of ‘responsible issuer’ do
not mean ‘publicly traded in Canada.’ ” The real and substantial connection that brought
the defendant in Abdula within the reach of s. 138.1 was its presence in Ontario and the
fact that the documents were, in the words of Hoy J.A. at para. 89, “released or presented”
in Ontario (emphasis added).
[32] The decision in Abdula does not establish the proposition that the word “releases”
in s. 138.3(1) requires that the actual point of release of the document be in Ontario.
Abdula recognizes, at para 88, that “[e]xtra-territorial application is specifically envisaged
by the paragraph (b) of the definition of ‘responsible issuer’ with its reference to issuers
with a ‘real and substantial connection’ to Ontario.” Abdula also stands for the proposition
that the liability created by s. 138.3 extends to securities traded on foreign exchanges. And
most importantly, Abdula equates documents “released” with documents “presented” in
Ontario.
[33] In my view, the reasoning and result in Abdula is entirely consistent with, and
supportive of, the proposition that BP’s actions in providing Ontario shareholders with
information as required by US securities law pursuant to its undertaking were sufficient
to establish the presumptive connecting factor of a tort committed in Ontario.
[34] For these reasons, I reject BP’s submission that the motion judge erred in conclud-
ing that, based on the facts alleged by the plaintiff, the statutory tort of secondary market
misrepresentation was committed in Ontario.
[Sharpe JA then dealt with the issue of forum non conveniens, holding that BP had dem-
onstrated the existence of a clearly more appropriate forum. The plaintiff ’s claim was
stayed.]
IV. Selected Bibliographical References 295
NOTE
In Infineon Technologies AG v Option Consommateurs, 2013 SCC 59, [2013] 3 SCR 600, the
Supreme Court of Canada held that Quebec courts had jurisdiction simpliciter in a class
action brought against the manufacturers of microchips known as DRAM. The allegation
was that the defendant manufacturers engaged in price fixing and that the inflated price
was passed on to indirect purchasers. The lead plaintiff, a resident of Quebec, purchased a
computer online. The contract provided that it was governed by Ontario law and deemed it
to have been made in Ontario. None of the defendants carried on business in Quebec. The
court held that direct economic damage suffered in Quebec as a result of a contract entered
into in that province constituted a sufficient connection for jurisdiction simpliciter.
IV. SELECTED BIBLIOGRAPHICAL REFERENCES

Black, Vaughan. “Simplifying Court Jurisdiction in Canada” (2012) 8 J Priv Intl L 411.
Black, Vaughan, Stephen Pitel & Michael Sobkin. Statutory Jurisdiction: An Analysis of the Court
Jurisdiction and Proceedings Transfer Act (Toronto: Thomson Reuters Canada Limited,
2012).
Blom, Joost. “New Ground Rules for Jurisdictional Disputes: The Van Breda Quartet” (2012)
53 Can Bus LJ 1.
Blom, Joost. “The Enforcement of Foreign Judgments: Morguard Goes Forth into the World”
(1997) 28 Can Bus LJ 373.
Edinger, Elizabeth. “Spar Aerospace: A Reconciliation of Morguard with the Traditional Frame-
work for Determining Jurisdiction” (2003) 61 Advocate 511.
Monestier, Tanya J. “A ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2007)
33 Queen’s LJ 179.
Pitel, Stephen. “Checking in to Club Resorts: How Courts Are Applying the New Test for Juris-
diction” (2013) 42 Adv Q 190.
Pitel, Stephen & Cheryl D Dusten. “Lost in Transition: Answering the Questions Raised by the
Supreme Court of Canada’s New Approach to Jurisdiction” (2006) 85 Can Bar Rev 61.
Saumier, Genevieve. “Morguard’s Vapour Trail: A Comment on Spar Aerospace” (2003) 5 Can
Intl Lawyer 199.
CHAPTER SEVEN
Discretion to Decline Jurisdiction

and Injunctions to Restrain
Foreign Proceedings
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
II. The English Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
III. The Canadian Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
A. Jurisdiction-Selecting and Arbitration Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349
1. Jurisdiction-Selecting Clauses: The Common Law Rule . . . . . . . . . . . . . . . . . . . 350
2. Arbitration Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
B. Class Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
I. INTRODUCTION
At common law, English courts always asserted and exercised a discretion to stay local pro-
ceedings commenced by service within England, to set aside service of a writ that had been
served outside England, and to issue an injunction prohibiting the commencement or con-
tinuation of foreign proceedings. Until the mid-1970s, the exercise of the discretion to stay
local proceedings after service in England and to issue injunctions was rare even though
writs were frequently set aside after service ex juris. In 1974, in a landmark judgment, The
Atlantic Star, [1974] AC 436 (HL), the House of Lords held that non-English legal systems were
worthy of greater respect and deference than English courts had been according them and
decided, in consequence, that the discretion to stay local English proceedings in favour of
foreign proceedings should be exercised more generously and graciously, and therefore
more frequently. Rapid development of new formulas for the exercise of that discretion
ensued, raising new issues as to the relationship between the exercise of discretion after
service in England and service ex juris and between the discretion to stay local English pro-
ceedings and to issue an injunction prohibiting the commencement or continuation of for-
eign proceedings.
The role of discretion in the common law world and its general absence in the civil law
world were lucidly described by Lord Goff in Airbus Industrie GIE v Patel, [1999] 1 AC 119 (HL)
at paras 11 and 12:
[11] This part of the law is concerned with the resolution of clashes between jurisdictions.
Two different approaches to the problem have emerged in the world today, one associated with
the civil law jurisdictions of continental Europe, and the other with the common law world. Each
297
298 Chapter 7 Discretion to Decline Jurisdiction
is the fruit of a distinctive legal history, and also reflects to some extent cultural differences
which are beyond the scope of an opinion such as this. On the continent of Europe, in the early
days of the European Community, the essential need was seen to be to avoid any such clash
between member states of the same community. A system, developed by distinguished schol-
ars, was embodied in the Brussels Convention, under which jurisdiction is allocated on the basis
of well-defined rules. This system achieves its purpose, but at a price. The price is rigidity, and
rigidity can be productive of injustice. The judges of this country, who loyally enforce this sys-
tem, not only between United Kingdom jurisdictions and the jurisdictions of other member
states, but also as between the three jurisdictions within the United Kingdom itself, have to
accept the fact that the practical results are from time to time unwelcome. This is essentially
because the primary purpose of the Convention is to ensure that there shall be no clash
between the jurisdictions of member states of the Community.
[12] In the common law world, the situation is precisely the opposite. There is, so to speak,
a jungle of separate, broadly based, jurisdictions all over the world. In England, for example,
jurisdiction is founded on the presence of the defendant within the jurisdiction, and in certain
specified (but widely drawn) circumstances on a power to serve the defendant with process
outside the jurisdiction. But the potential excesses of common law jurisdictions are generally
curtailed by the adoption of the principle of forum non conveniens—a self-denying ordinance
under which the court will stay (or dismiss) proceedings in favour of another clearly more appro-
priate forum. This principle, which has no application as between states which are parties to the
Brussels Convention, appears to have originated in Scotland (partly, perhaps, because of the
exorbitant Scottish jurisdiction founded upon arrestment of the defendant’s goods in Scotland:
see The Atlantic Star [1974] AC 436, 475F-G, per Lord Kilbrandon), and to have been developed
primarily in the United States; but, at least since the acceptance of the principle in England by
your Lordships’ House in Spiliada Maritime Corporation v. Cansulex Ltd. [1987] AC 460, it has
become widely accepted throughout the common law world—notably in New Zealand (see
Club Mediterranée NZ v. Wendell [1989] 1 NZLR 216); in Australia, though in a modified form (see
Voth v. Manildra Flour Mills Pty. Ltd. (1990) 65 ALJR 83); in Canada (see Amchem Products Inc. et al.
v. Workers’ Compensation Board et al. (1993) 102 DLR (4th) 96); and in India, as is exemplified by
the litigation in the present case. It is of interest that it also appears to have been adopted in
Japan, a country whose system has been much influenced by German law: see the article by
Ellen Hayes in (1992) 26 UBC Law Rev. 41, 112. The principle is directed against cases being
brought in inappropriate jurisdictions and so tends to ensure that, as between common law
jurisdictions, cases will only be brought in a jurisdiction which is appropriate for their resolution.
The purpose of the principle is therefore different from that which underlies the Brussels Con-
vention. It cannot, and does not aim to, avoid all clashes between jurisdictions; indeed parallel
proceedings in different jurisdictions are not of themselves regarded as unacceptable. In that
sense the principle may be regarded as an imperfect weapon; but it is both flexible and prac-
tical and, where it is effective, it produces a result which is conducive to practical justice. It is
however dependent on the voluntary adoption of the principle by the state in question; and, as
the present case shows, if one state does not adopt the principle, the delicate balance which the
universal adoption of the principle could achieve will to that extent break down.
The Supreme Court of Canada decision in Amchem Products Inc v British Columbia (Workers’
Compensation Board) referred to by Lord Goff in Patel (reproduced below in Section III, “The
Canadian Cases”) adopts and purports to follow the English authorities with respect to both
stays and anti-suit injunctions, but does not quite achieve that objective. Compare the lead-
ing English cases with Amchem. Because the court followed the English authorities, the
English cases remain relevant in Canada.
II. The English Cases 299
II. THE ENGLISH CASES
Spiliada Maritime Corp v Cansulex Ltd

[1987] AC 460 (HL)
LORD GOFF OF CHIEVELEY:

My Lords, there is before your Lordships an appeal, brought by leave of your Lordships’
House, against a decision of the Court of Appeal (Oliver and Neill LJJ) ([1985] 2 Lloyd’s
Rep. 116) whereby they reversed a decision of Staughton J in which he refused an applica-
tion by the respondents, Cansulex Ltd., to set aside leave granted ex parte to the appellants,
Spiliada Maritime Corp., to serve proceedings on the respondents outside the jurisdiction.
The effect of the decision of the Court of Appeal was, therefore, to set aside the leave so
granted and the proceedings served on the respondents pursuant to that leave.
(1) The Facts of the Case

As this appeal is concerned with an interlocutory application, I must, like the courts below,
take the facts from the affidavit evidence filed on behalf of the parties. The appellants
(whom I shall refer to as “the shipowners”) claim to be (and can, for the purposes of this
appeal, be accepted as being) the owners of a bulk carrier, of about 20,000 tonnes dead-
weight, called the Spiliada. The shipowners are a Liberian corporation, and their vessel
flies the Liberian flag; but their managers are in Greece, though some part of the manage-
ment takes place in England. The respondents (whom I shall refer to as “Cansulex”) carry
on business in British Columbia as exporters of sulphur. The shipowners chartered their
vessel to an Indian company called Minerals and Metals Trading Corp. of India Ltd.
(whom I shall refer to as “MMTC”) under a voyage charter dated 6 November 1980, for
the carriage of a cargo of sulphur from Vancouver to Indian ports. The charterparty
contained a London arbitration clause. Pursuant to that charterparty, the vessel proceeded
to Vancouver and there loaded a cargo of sulphur between 18 and 25 November 1980.
The sulphur was loaded on board the vessel by order of Cansulex, who were f.o.b. sellers
of the sulphur to MMTC. Bills of lading were then issued to, and accepted by, Cansulex.
The bills were shipped bills, Cansulex being named as shippers in the bills. Clause 21 on
the reverse of the bills of lading provided that, subject to certain clauses which are for
present purposes immaterial, the bills of lading “no matter where issued, shall be con-
strued and governed by English law, and as if the vessel sailed under the British Flag.” The
bills were signed by agents for and by authority of the master. The cargo was discharged
at ports in India between 20 December 1980 and 6 February 1981.
It has been alleged by the shipowners that the cargo of sulphur so loaded on the vessel
was wet when loaded and as a result caused severe corrosion and pitting to the holds and
tank tops of the vessel. The shipowners have claimed damages from Cansulex in respect
of the damage so caused. The shipowners rely on the age of the ship at the time of the
voyage (she was then three years old) and the condition of the holds before and after the
voyage. The shipowners have advanced their claim against Cansulex as shippers under
the contract of carriage contained in or evidenced by the bills of lading to which I have
already referred, basing their claim on art. 4, r. 6 of the Hague Rules incorporated into
the bills, and on a warranty implied by English law that dangerous cargo will not be
shipped without warning. Arbitration proceedings have also been commenced by the
shipowners against MMTC in London under the arbitration clause in the voyage charter.
It is open to MMTC to bring arbitration proceedings in London against Cansulex under
the sale contract between them, by virtue of the London arbitration clause in that contract.
Leave was obtained by the shipowners to issue and serve a writ on Cansulex outside the
jurisdiction on a ground contained in RSC Ord. 11, r. 1(1)(f)(iii), viz. that the action was
brought to recover damages in respect of the breach of a contract which was by its terms
governed by English law.
Cansulex then applied for an order to set aside such leave and all subsequent proceed-
ings. The application came before Staughton J on 26 October 1984. The hearing of the
application took place while there was proceeding before Staughton J a very similar action,
in which Cansulex were also defendants. That action concerned a ship called the Cam-
bridgeshire, owned by an English company, Bibby Bulk Carriers Ltd. In it, the owners
claimed damages for damage alleged to have been caused to their vessel by a cargo of
sulphur loaded on her at Vancouver in November and December 1980, for carriage to
South Africa and Mozambique. The defendants in the action were the charterers of the
ship, Cobelfret NV, and three shippers: Cansulex, Petrosul International Ltd. and Can-
adian Superior Oil Ltd. In that action, Cansulex (supported by Petrosul International Ltd.,
another Canadian company) who had been served with proceedings outside the juris-
diction on the same ground as in the present case, applied in September 1982 for the leave
to serve proceedings on them outside the jurisdiction, and all subsequent proceedings,
to be set aside. Staughton J heard that application and dismissed it, holding that there was
a good arguable case that the Canadian companies were parties to a contract governed
by English law, and that the case was a proper one for service out of the jurisdiction (see
Bibby Bulk Carriers Ltd. v. Cobelfret NV, The Cambridgeshire (6 October 1982,
unreported)). There was no appeal from that decision. The trial of the Cambridgeshire
action started on 15 October 1984, again before Staughton J. He recorded in his judgment
in the present case that there were no less than 15 counsel engaged in the Cambridgeshire
action; that each was equipped with 75 files; and that the then estimate for the length of
the trial was six months.
There has been another set of proceedings concerning damage to a vessel alleged to have
been caused by a wet sulphur cargo shipped at Vancouver. This concerned a ship called
the Roseline. The matter came before the Federal Court of Canada in March 1984, the
defendant being Petrosul International Ltd. (see Union Industrielle et Maritime v. Petrosul
International Ltd., The Roseline (23 March 1984, unreported)). The owners of the Roseline
claimed a declaration that a contract existed between them and Petrosul under which dis-
putes were to be referred to arbitration in Paris. The contract was said to have been contained
in or evidenced by a bill of lading, in which Petrosul were named as shippers. Reed J upheld
a contention by Petrosul that they were not a party to any contract with the owners, or at
least not a party to any contract containing an arbitration clause; the judge’s conclusion
was reached on the basis that the bill of lading, in the hands of Petrosul, “partook of the
nature of a receipt or a document of title,” and that use for this purpose did not make the
document a contractual one so far as Petrosul were concerned. There is doubt whether a
similar conclusion would be reached in English law; Staughton J was told that there was
an unreported decision of Mustill J to the contrary effect (see The Athanasia Comninos
[1981], Com. LR 132). However, Staughton J held, and it is now accepted by Cansulex,
that in the present case there is a good arguable case that Cansulex were parties to the bill
of lading contract, and so parties to a contract governed by English law.
It is right that I should record that the judge was told that there were other disputes
concerning similar damage to ships alleged to have been caused by sulphur loaded at
Vancouver; but he knew no more about them.
• • •
(4) Submissions of Counsel

Before your Lordships, the shipowners submitted that the Court of Appeal, having
accepted that the judge applied the correct test, went beyond its limited power of review
of the exercise of the judge’s discretion. The real reason for its intervention was that it
disagreed with the weight attached by the judge to the Cambridgeshire factor and was
then, it was submitted, over-astute to discover an error which would enable it to substitute
its own discretion for his. For Cansulex, on the other hand, it was submitted that the
Court of Appeal was fully entitled to interfere with the judge’s exercise of his discretion,
substantially for the reasons given by it; but it was further submitted that, in any event,
both the judge and the Court of Appeal should have applied the more stringent test set
out in the passage from Lord Diplock’s speech in the Amin Rasheed case, [1983], 2 All ER
884 at 893, [1984] AC 50 at 68 which, if correctly applied, should certainly have led to the
same order as that made by the Court of Appeal.
In considering the submissions of counsel, for whose assistance I am most grateful, it
is necessary to review the applicable principles. I say this for two particular reasons. First,
since the courts below have been troubled by apparent differences between observations
of Lord Diplock and Lord Wilberforce in the Amin Rasheed case, it is, I think, desirable
that this House should now resolve those differences. Second, since the question of the
relevance of a time-bar has now arisen in a number of cases, including the present, it is
desirable that this House should give further consideration to the relevance of what has
been called a “legitimate personal or juridical advantage,” with special reference to time-
bars. But, in any event, the law on this subject is still in a state of development; and it is
perhaps opportune to review the position at this stage, and in particular to give further
consideration to the relationship between cases where jurisdiction has been founded as
of right by service of proceedings on the defendant within the jurisdiction, but the defend-
ant seeks a stay of the proceedings on the ground of forum non conveniens, and cases
where the court is invited to exercise its discretion, under RSC Ord. 11, to give leave for
service on the defendant out of the jurisdiction.
(5) The Fundamental Principle

In cases where jurisdiction has been founded as of right, i.e. where in this country the
defendant has been served with proceedings within the jurisdiction, the defendant may
now apply to the court to exercise its discretion to stay the proceedings on the ground
which is usually called forum non conveniens. That principle has for long been recognised
in Scots law; but it has only been recognised comparatively recently in this country. In
The Abidin Daver, [1984] 1 All ER 470 at 476, [1984] AC 398 at 411 Lord Diplock stated
that, on this point, English law and Scots law may now be regarded as indistinguishable.
It is proper therefore to regard the classic statement of Lord Kinnear in Sim v. Robinow
(1892), 19 R (Ct. of Sess.) 665 at 668 as expressing the principle now applicable in both
jurisdictions. He said:
… the plea can never be sustained unless the Court is satisfied that there is some other tri-
bunal, having competent jurisdiction, in which the case may be tried more suitably for the
interests of all the parties and for the ends of justice.
For earlier statements of the principle, in similar terms, see Longworth v. Hope (1865), 3
Macph. (Ct. of Sess.) 1049 at 1053 per the Lord President (McNeill) and Clements v.
Macaulay (1866), 4 Macph. (Ct. of Sess.) 583 at 592 per the Lord Justice-Clerk (Inglis),
and for a later statement, also in similar terms, see Société du Gaz de Paris v. SA de Naviga-
tion “Les Armateurs Français” 1926, SC (HL) 13 at 22 per Lord Sumner.
I feel bound to say that I doubt whether the Latin tag “forum non conveniens” is apt to
describe this principle. For the question is not one of convenience, but of the suitability
or appropriateness of the relevant jurisdiction. However, the Latin tag (sometimes
expressed as forum non conveniens and sometimes as forum conveniens) is so widely used
to describe the principle, not only in England and Scotland, but in other Commonwealth
jurisdictions and in the United States, that it is probably sensible to retain it. But it is most
important not to allow it to mislead us into thinking that the question at issue is one of
“mere practical convenience.” Such a suggestion was emphatically rejected by Lord
Kinnear in Sim v. Robinow (1892), 19 R (Ct. of Sess.) 665 at 668 and by Lord Dunedin,
Lord Shaw and Lord Sumner in the Société du Gaz case 1926, SC (HL) 13 at 18, 19, and
22 respectively. Lord Dunedin said, with reference to the expressions forum non competens
and forum non conveniens:
In my view, “competent” is just as bad a translation for “competens” as “convenient” is for
“conveniens.” The proper translation for these Latin words, so far as this plea is concerned,
is “appropriate.”
Lord Sumner referred to a phrase used by Lord Cowan in Clements v. Macaulay (1866),
4 Macph. (Ct. of Sess.) 583 at 594, viz. “more convenient and preferable for securing the
ends of justice,” and said:
… one cannot think of convenience apart from the convenience of the pursuer or the
defender or the Court, and the convenience of all these three, as the cases show, is of little,
if any, importance. If you read it as “more convenient, that is to say, preferable, for securing
the ends of justice,” I think the true meaning of the doctrine is arrived at. The object, under
the words “forum non conveniens” is to find that forum which is the more suitable for the
ends of justice, and is preferable because pursuit of the litigation in that forum is more likely
to secure those ends.
In the light of these authoritative statements of the Scottish doctrine, I cannot help think-
ing that it is wiser to avoid use of the word “convenience” and to refer rather, as Lord
Dunedin did, to the appropriate forum.
(6) How the Principle Is Applied in Cases of Stay of Proceedings

When the principle was first recognised in England, as it was (after a breakthrough in The
Atlantic Star, Atlantic Star (owners) v. Bona Spes (owners), [1973] 2 All ER 175, [1974] AC
436) in MacShannon v. Rockware Glass Ltd., [1978] 1 All ER 625, [1978] AC 795, it cannot
be said that the members of this House spoke with one voice. This is not surprising;
because the law on this topic was then in an early stage of a still continuing development.
The leading speech was delivered by Lord Diplock. He put the matter as follows ([1978]
1 All ER 625 at 630, [1978] AC 795 at 812):
In order to justify a stay two conditions must be satisfied, one positive and the other negative:
(a) the defendant must satisfy the court that there is another forum to whose jurisdiction he
is amenable in which justice can be done between the parties at substantially less inconven-
ience or expense, and (b) the stay must not deprive the plaintiff of a legitimate personal or
juridical advantage which would be available to him if he invoked the jurisdiction of the
English court.
This passage has been quoted on a number of occasions in later cases in your Lordships’
House. Even so, I do not think that Lord Diplock himself would have regarded this passage
as constituting an immutable statement of the law, but rather as a tentative statement at
an early stage of a period of development. I say this for three reasons. First, Lord Diplock
himself subsequently recognised that the mere existence of “a legitimate personal or
juridical advantage” of the plaintiff in the English jurisdiction would not be decisive: see
The Abidin Daver, [1984] 1 All ER 470 at 475, [1984] AC 398 at 410, where he recognised
that a balance must be struck. Second, Lord Diplock also subsequently recognised that
no distinction is now to be drawn between Scottish and English law on this topic, and
that it can now be said that English law has adopted the Scottish principle of forum non
conveniens: see The Abidin Daver, [1984] 1 All ER 470 at 476, [1984] AC 398 at 411. It is
necessary therefore now to have regard to the Scottish authorities; and in this connection
I refer in particular not only to statements of the fundamental principle, but also to the
decision of your Lordships’ House in the Société du Gaz case 1926, SC (HL) 13. Third, it
is necessary to strike a note of caution regarding the prominence given to “a legitimate
personal or juridical advantage” of the plaintiff, having regard to the decision of your
Lordships’ House in Trendtex Trading Corp. v. Crédit Suisse, [1981] 3 All ER 520, [1982]
AC 679, in which your Lordships unanimously approved the decision of the trial judge
([1980] 3 All ER 721) to exercise his discretion to stay an action brought in this country
where there existed another appropriate forum, i.e., Switzerland, for the trial of the action,
even though by so doing he deprived the plaintiffs of an important advantage, viz. the
more generous English procedure of discovery, in an action involving allegations of fraud
against the defendants.
In my opinion, having regard to the authorities (including in particular the Scottish
authorities), the law can at present be summarized as follows.
(a) The basic principle is that a stay will only be granted on the ground of forum non
conveniens where the court is satisfied that there is some other available forum, having
competent jurisdiction, which is the appropriate forum for the trial of the action, i.e., in
which the case may be tried more suitably for the interests of all the parties and the ends
of justice.
(b) As Lord Kinnear’s formulation of the principle indicates, in general the burden of
proof rests on the defendant to persuade the court to exercise its discretion to grant a stay
(see, e.g., the Société du Gaz case 1926, SC (HL) 13 at 21 per Lord Sumner and Anton
Private International Law (1967), p. 150). It is, however, of importance to remember that
each party will seek to establish the existence of certain matters which will assist him in
persuading the court to exercise its discretion in his favour, and that in respect of any
such matter the evidential burden will rest on the party who asserts its existence. Further-
more, if the court is satisfied that there is another available forum which is prima facie
the appropriate forum for the trial of the action, the burden will then shift to the plaintiff
to show that there are special circumstances by reason of which justice requires that the
trial should nevertheless take place in this country (see para. (f) below).
(c) The question being whether there is some other forum which is the appropriate
forum for the trial of the action, it is pertinent to ask whether the fact that the plaintiff
has, ex hypothesi, founded jurisdiction as of right in accordance with the law of this coun-
try, of itself gives the plaintiff an advantage in the sense that the English court will not
lightly disturb jurisdiction so established. Such indeed appears to be the law in the United
States, where “the court hesitates to disturb the plaintiff ’s choice of forum and will not do
so unless the balance of factors is strongly in favour of the defendant” (see Scoles and
Hay, Conflict of Laws (1982), p. 366, and cases there cited); and also in Canada, where it
has been stated that “unless the balance is strongly in favour of the defendant, the plain-
tiff ’s choice of forum should rarely be disturbed” (see Castel, Conflict of Laws (3d ed.,
1974) p. 282). This is strong language. However, the United States and Canada are both
federal states; and, where the choice is between competing jurisdictions within a federal
state, it is readily understandable that a strong preference should be given to the forum
chosen by the plaintiff on which jurisdiction has been conferred by the constitution of
the country which includes both alternative jurisdictions.
A more neutral position was adopted by Lord Sumner in the Société du Gaz case 1926,
SC (HL) 13 at 21, where he said:
All that has been arrived at so far is that the burden of proof is upon the defender to maintain
that plea. I cannot see that there is any presumption in favour of the pursuer.
However, I think it right to comment that that observation was made in the context of a
case where jurisdiction had been founded by the pursuer by invoking the Scottish prin-
ciple that, in actions in personam, exceptionally jurisdiction may be founded by arrest of
the defender’s goods within the Scottish jurisdiction. Furthermore, there are cases where
no particular forum can be described as the natural forum for the trial of the action. Such
cases are particularly likely to occur in commercial disputes, where there can be pointers
to a number of different jurisdictions (see, e.g., European Asian Bank AG v. Punjab and
Sind Bank, [1982] 2 Lloyd’s Rep. 356), or in Admiralty, in the case of collisions on the
high seas. I can see no reason why the English court should not refuse to grant a stay in
such a case, where jurisdiction has been founded as of right. It is significant that in all the
leading English cases where a stay has been granted there has been another clearly more
appropriate forum: in The Atlantic Star, [1973] 2 All ER 175, [1974] AC 430 (Belgium),
in MacShannon’s case, [1978] 1 All ER 625, [1978] AC 795 (Scotland), in Trendtex Trading
Corp. v. Crédit Suisse, [1981] 3 All ER 520, [1982] AC 679 (Switzerland) and in The Abidin
Daver, [1984] 1 All ER 470, [1984] AC 398 (Turkey). In my opinion, the burden resting
on the defendant is not just to show that England is not the natural or appropriate forum
for the trial, but to establish that there is another available forum which is clearly or
distinctly more appropriate than the English forum. In this way, proper regard is paid to
the fact that jurisdiction has been founded in England as of right (see MacShannon’s case,
[1978] 1 All ER 625 at 636-637, [1978] AC 795 at 819-820 per Lord Salmon); and there
is the further advantage that on a subject where comity is of importance it appears that
there will be a broad consensus among major common law jurisdictions. I may add that
if, in any case, the connection of the defendant with the English forum is a fragile one
(for example if he is served with proceedings during a short visit to this country), it should
be all the easier for him to prove that there is another clearly more appropriate forum for
the trial overseas.
(d) Since the question is whether there exists some other forum which is clearly more
appropriate for the trial of the action, the court will look first to see what factors there are
which point in the direction of another forum. These are the factors which Lord Diplock
described, in MacShannon’s case, [1978] 1 All ER 625 at 630, [1978] AC 795 at 812, as
indicating that justice can be done in the other forum at “substantially less inconvenience
or expense.” Having regard to the anxiety expressed in your Lordships’ House in the
Société du Gaz case 1926, SC (HL) 13 concerning the use of the word “convenience” in
this context, I respectfully consider that it may be more desirable, now that the English
and Scottish principles are regarded as being the same, to adopt the expression used by
Lord Keith in The Abidin Daver, [1984] 1 All ER 470 at 479, [1984] AC 398 at 415 when
he referred to the “natural forum” as being “that with which the action has the most real
and substantial connection.” So it is for connecting factors in this sense that the court
must first look; and these will include not only factors affecting convenience or expense
(such as availability of witnesses), but also other factors such as the law governing the
relevant transaction (as to which see Crédit Chimique v. James Scott Engineering Group Ltd.
1982 SLT 131), and the places where the parties respectively reside or carry on business.
(e) If the court concludes at that stage that there is no other available forum which is
clearly more appropriate for the trial of the action, it will ordinarily refuse a stay: see, e.g.
the decision of the Court of Appeal in European Asian Bank AG v. Punjab and Sind Bank,
[1982] 2 Lloyd’s Rep. 356. It is difficult to imagine circumstances when, in such a case, a
stay may be granted.
(f) If, however, the court concludes at that stage that there is some other available
forum which prima facie is clearly more appropriate for the trial of the action, it will
ordinarily grant a stay unless there are circumstances by reason of which justice requires
that a stay should nevertheless not be granted. In this inquiry, the court will consider all
the circumstances of the case, including circumstances which go beyond those taken into
account when considering connecting factors with other jurisdictions. One such factor
can be the fact, if established objectively by cogent evidence, that the plaintiff will not
obtain justice in the foreign jurisdiction: see The Abidin Daver, [1984] 1 All ER 470 at
476, [1984] AC 398 at 411 per Lord Diplock, a passage which now makes plain that, on
this inquiry, the burden of proof shifts to the plaintiff. How far other advantages to the
plaintiff in proceeding in this country may be relevant in this connection, I shall have to
consider at a later stage.
(7) How the Principle Is Applied in Cases Where the Court Exercises
Its Discretionary Power Under RSC Ord. 11
As I have already indicated, an apparent difference of view is to be found in the speeches
of Lord Diplock and Lord Wilberforce in the Amin Rasheed case, [1983] 2 All ER 884 at
891, 893, 896, [1984] AC 50 at 65-66, 68, 72. In that case Lord Diplock said:
… the jurisdiction exercised by an English court over a foreign corporation which has no
place of business in this country, as a result of granting leave under Ord. 11, r. 1(1)(f) for
service out of the jurisdiction of a writ on that corporation, is an exorbitant jurisdiction, i.e.
it is one which, under general English conflict rules, an English court would not recognise as
possessed by any foreign court in the absence of some treaty providing for such recognition.
Comity thus dictates that the judicial discretion to grant leave under this paragraph of Ord. 11,
r. 1(1) should be exercised with circumspection in cases where there exists an alternative
forum, viz. the courts of the foreign country where the proposed defendant does carry on
business, and whose jurisdiction would be recognised under the English conflict rules.
Again, he said:
… the onus under Ord. 11, r. 4(2) of making it “sufficiently appear to the Court that the case
is a proper one for service out of the jurisdiction under this Order” lies on the would-be plain-
tiff. Refusal to grant leave in a case falling within r. 1(1)(f) does not deprive him of the oppor-
tunity of obtaining justice, because ex hypothesi there exists an alternative forum, the courts
of the country where the proposed defendant has its place of business where the contract
was made, which would be recognised by the English courts as having jurisdiction over the
matter in dispute and whose judgment would be enforceable in England. The exorbitance of
the jurisdiction sought to be invoked where reliance is based exclusively on r. 1(1)(f)(iii) is
an important factor to be placed in the balance against granting leave. It is a factor that is
capable of being outweighed if the would-be plaintiff can satisfy the English court that justice
either could not be obtained by him in the alternative forum; or could only be obtained at
excessive cost, delay or inconvenience.
In contrast, Lord Wilberforce said:

RSC Ord. 11, r. 1(1) merely states that, given one of the stated conditions, such service is
permissible, and it is still necessary for the plaintiff (in this case the assured) to make it
“sufficiently appear to the Court that the case is a proper one for service out of the jurisdiction
under this Order” (RSC Ord. 11, r. 4(2)). The rule does not state the considerations by which
the court is to decide whether the case is a proper one, and I do not think we can get much
assistance from cases where it is sought to stay an action started in this country, or to enjoin
the bringing of proceedings abroad. The situations are different (compare the observations
of Stephenson LJ in Aratra Potato Co. Ltd. v. Egyptian Navigation Co., The El Amria, [1981]
2 Lloyd’s Rep. 119 at 129). The intention must be to impose on the plaintiff the burden of
showing good reasons why service of a writ, calling for appearance before an English court,
should, in the circumstances, be permitted on a foreign defendant. In considering this ques-
tion the court must take into account the nature of the dispute, the legal and practical issues
involved, such questions as local knowledge, availability of witnesses and their evidence and
expense.
In Ilyssia Cia Naviera SA v. Bamaodah, [1985] 1 Lloyd’s Rep. 107, the Court of Appeal
had to consider the apparent difference between the two approaches expressed by Lord
Diplock and Lord Wilberforce. Ackner LJ resolved the difference as follows (at 113):
[Counsel for the defendant] submits that Lord Diplock’s statement was intended to be an
exhaustive one. When reliance is based exclusively upon r. 1(1)(f)(iii), it is only capable of
being outweighed if the would-be plaintiff can satisfy the English court that either justice
cannot be obtained by him in the alternative forum or could only be obtained at excessive
cost, delay or inconvenience. Like Mr. Justice Staughton, I do not accept that submission. As
I read the speech in the context of that case as a whole Lord Diplock was emphasizing that
where exclusive reliance is placed upon r. 1(1)(f)(iii) then the burden of showing good
reasons justifying service out of the jurisdiction is a particularly heavy one, and he illustrated
this by the examples which he gave of the situations which were capable of tipping the balance
in favour of the granting of leave. Thus construed, as the learned Judge points out, there is
no conflict between Lord Diplock’s statement and that of Lord Wilberforce … Lord Wilber-
force there states that in order to decide whether the case is a proper one the Court must
take into account the nature of the dispute, the legal and practical issues involved, such
questions as local knowledge, availability of witnesses and their evidence and expense.
May LJ spoke in similar terms (at 118). The practical effect was, however, as is reflected
in the judgment of Oliver LJ in the present case, that the statement of principle of Lord
Wilberforce was accepted as being the applicable principle.
With that conclusion, I respectfully agree; but I wish to add some observations of my
own. The first is this. Lord Wilberforce said that he did not think that we can get much
assistance from cases where it is sought to stay an action started in this country, or to
enjoin the bringing of proceedings abroad; in this connection he referred to certain
observations of Stephenson LJ in Aratra Potato Co. Ltd. v. Egyptian Navigation Co., The
El Amria, [1981] 2 Lloyd’s Rep. 119 at 129. It is right to point out that, in the relevant
passage in his judgment in that case, Stephenson LJ was only expressing caution with
regard to assimilating cases of a stay to enforce a foreign jurisdiction clause with cases of
a stay on the principle of forum non conveniens under MacShannon’s case. He was not
addressing himself to the question of the applicable principles under RSC Ord. 11, and,
while sharing Lord Wilberforce’s concern about help to be derived, in Ord. 11 cases, from
cases where an injunction is sought to restrain proceedings abroad. I respectfully doubt
whether similar concern should be expressed about help to be derived from cases of forum
non conveniens. I cannot help remarking on the fact that when Lord Wilberforce came,
at the end of the passage from his speech which I have quoted, to state the applicable
principle, his statement of principle bears a marked resemblance to the principles applic-
able in forum non conveniens cases. It seems to me inevitable that the question in both
groups of cases must be, at bottom, that expressed by Lord Kinnear in Sim v. Robinow
(1892), 19 R (Ct. of Sess.) 665 at 668, viz. to identify the forum in which the case can be
suitably tried for the interests of all the parties and for the ends of justice. That being said,
it is desirable to identify the distinctions between the two groups of cases. These, as I see
it, are threefold. The first is that, as Lord Wilberforce indicated, in the Ord. 11 cases the
burden of proof rests on the plaintiff, whereas in the forum non conveniens cases that
burden rests on the defendant. A second, and more fundamental, point of distinction
(from which the first point of distinction in fact flows) is that in the Ord. 11 cases the
plaintiff is seeking to persuade the court to exercise its discretionary power to permit
service on the defendant outside the jurisdiction. Statutory authority has specified the
particular circumstances in which that power may be exercised, but leaves it to the court
to decide whether to exercise its discretionary power in a particular case, while providing
that leave shall not be granted “unless it shall be made sufficiently to appear to the court
that the case is a proper one for service out of the jurisdiction” (see RSC Ord. 11, r. 4(2)).
Third, it is at this point that special regard must be had for the fact stressed by Lord
Diplock in the Amin Rasheed case, [1983] 2 All ER 884 at 891, [1984] AC 50 at 65 that
the jurisdiction exercised under Ord. 11 may be “exorbitant.” This has long been the law.
In Société Générate de Paris v. Dreyfus Bros. (1885), 29 Ch. D 239 at 242-243 Pearson J
said:
… it becomes a very serious question … whether this Court ought to put a foreigner, who
owes no allegiance here, to the inconvenience and annoyance of being brought to contest
his rights in this country, and I for one say, most distinctly, that I think this Court ought to
be exceedingly careful before it allows a writ to be served out of the jurisdiction.
That statement was subsequently approved on many occasions, notably by Farwell LJ in

The Hagen, [1908] P 189 at 201, [1908-10] All ER Rep. 21 at 26 and by Lord Simonds in
your Lordships’ House in Tyne Improvement Comrs. v. Armement Anversois SA, The Brabo,
[1949] 1 All ER 294 at 305, [1949] AC 326 at 350. The effect is, not merely that the burden
of proof rests on the plaintiff to persuade the court that England is the appropriate forum
for the trial of the action, but that he has to show that this is clearly so. In other words,
the burden is, quite simply, the obverse of that applicable where a stay is sought of pro-
ceedings started in this country as of right.
Even so, a word of caution is necessary. I myself feel that the word “exorbitant” is, as
used in the present context, an old-fashioned word which perhaps carries unfortunate
overtones; it means no more than that the exercise of the jurisdiction is extraordinary in
the sense explained by Lord Diplock in the Amin Rasheed case, [1983] 2 All ER 884 at
891, [1984] AC 50 at 65. Furthermore, in Ord. 11 cases, the defendant’s place of residence
may be no more than a tax haven to which no great importance should be attached. It is
also significant to observe that the circumstances specified in Ord. 11, r. 1(1), as those in
which the court may exercise its discretion to grant leave to serve proceedings on the
defendant outside the jurisdiction, are of great variety, ranging from cases where, one
would have thought, the discretion would normally be exercised in favour of granting
leave (e.g., where the relief sought is an injunction ordering the defendants to do or refrain
from doing something within the jurisdiction) to cases where the grant of leave is far
more problematical. In addition, the importance to be attached to any particular ground
invoked by the plaintiff may vary from case to case. For example, the fact that English law
is the putative proper law of the contract may be of very great importance (as in BP
Exploration Co. (Libya) Ltd. v. Hunt, [1976] 3 All ER 879, [1976] 1 WLR 788, where, in
my opinion, Kerr J rightly granted leave to serve proceedings on Mr. Hunt out of the
jurisdiction); or it may be of little importance as seen in the context of the whole case. In
these circumstances, it is, in my judgment, necessary to include both the residence or
place of business of the defendant and the relevant ground invoked by the plaintiff as
factors to be considered by the court when deciding whether to exercise its discretion to
grant leave; but, in so doing, the court should give to such factors the weight which, in
all the circumstances of the case, it considers to be appropriate.
(8) Treatment of “a Legitimate Personal or Juridical Advantage”

Clearly, the mere fact that the plaintiff has a legitimate personal or juridical advantage in
proceedings in England cannot be decisive. As Lord Sumner said of the parties in the
Société du Gaz case 1926, SC (HL) 12 at 22:
I do not see how one can guide oneself profitably by endeavouring to conciliate and promote
the interests of both these antagonists, except in that ironical sense, in which one says that
it is in the interests of both that the case should be tried in the best way and in the best tri-
bunal, and that the best man should win.
Indeed, as Oliver LJ pointed out in his judgment in the present case, an advantage to the
plaintiff will ordinarily give rise to a comparable disadvantage to the defendant; and simply
to give the plaintiff his advantage at the expense of the defendant is not consistent with
the objective approach inherent in Lord Kinnear’s statement of principle in Sim v. Robinow
(1892), 19 R (Ct. of Sess.) 665 at 668.
The key to the solution of this problem lies, in my judgment, in the underlying fun-
damental principle. We have to consider where the case may be tried suitably for the
interests of all the parties and for the ends of justice. Let me consider the application of
that principle in relation to advantages which the plaintiff may derive from invoking the
English jurisdiction. Typical examples are: damages awarded on a higher scale; a more
complete procedure of discovery; a power to award interest; a more generous limitation
period. Now, as a general rule, I do not think that the court should be deterred from
granting a stay of proceedings, or from exercising its discretion against granting leave
under RSC Ord. 11, simply because the plaintiff will be deprived of such an advantage,
provided that the court is satisfied that substantial justice will be done in the available
appropriate forum. Take, for example, discovery. We know that there is a spectrum of
systems of discovery applicable in various jurisdictions, ranging from limited discovery
available in civil law countries on the continent of Europe to the very generous pre-trial
oral discovery procedure applicable in the United States of America. Our procedure lies
somewhere in the middle of this spectrum. No doubt each of these systems has its virtues
and vices; but, generally speaking, I cannot see that, objectively, injustice can be said to
have been done if a party is, in effect, compelled to accept one of these well-recognised
systems applicable in the appropriate forum overseas. In this, I recognise that we appear
to be differing from the approach presently prevailing in the United States: see, e.g., the
recent opinion of Judge Keenan in Re Union Carbide Corp. (12 May 1986) in the District
Court for the Southern District of New York, where a stay of proceedings in New York,
commenced on behalf of Indian plaintiffs against Union Carbide arising out of the tragic
disaster in Bhopal, India in December 1984, was stayed subject to, inter alia, the condition
that Union Carbide was subject to discovery under the model of the United States Federal
Rules of Civil Procedure after appropriate demand by the plaintiff. But in the Trendtex
case, [1981] 3 All ER 520, [1982] AC 679 this House thought it right that a stay of proceed-
ings in this country should be granted where the appropriate forum was Switzerland, even
though the plaintiffs were thereby deprived of the advantage of the more extensive English
procedure of discovery of documents in a case of fraud. Then take the scale on which
damages are awarded. Suppose that two parties have been involved in a road accident in
a foreign country, where both were resident, and where damages are awarded on a scale
substantially lower than those awarded in this country. I do not think that an English
court would, in ordinary circumstances, hesitate to stay proceedings brought by one of
them against the other in this country merely because he would be deprived of a higher
award of damages here.
But the underlying principle requires that regard must be had to the interests of all the
parties and the ends of justice; and these considerations may lead to a different conclusion
in other cases. For example, it would not, I think, normally be wrong to allow a plaintiff
to keep the benefit of security obtained by commencing proceedings here, while at the
same time granting a stay of proceedings in this country to enable the action to proceed
in the appropriate forum. Such a conclusion is, I understand, consistent with the manner
in which the process of saisie conservatoire is applied in civil law countries; and cf. s. 26
of the Civil Jurisdiction and Judgments Act 1982, now happily in force. Again, take the
example of cases concerned with time-bars. Here a special problem arises from the fact
that, in English law, limitation is classified as a procedural rather than as a substantive
matter. Let me consider how the principle of forum non conveniens should be applied in
a case in which the plaintiff has started proceedings in England where his claim was not
time-barred, but there is some other jurisdiction which, in the opinion of the court, is
clearly more appropriate for the trial of the action, but where the plaintiff has not com-
menced proceedings and where his claim is now time-barred. Now, to take some extreme
examples, suppose that the plaintiff allowed the limitation period to elapse in the appro-
priate jurisdiction, and came here simply because he wanted to take advantage of a more
generous time-bar applicable in this country; or suppose that it was obvious that the
plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he
did not trouble to issue a protective writ there; in cases such as these, I cannot see that
the court should hesitate to stay the proceedings in this country, even though the effect
would be that the plaintiff ’s claim would inevitably be defeated by a plea of the time-bar
in the appropriate jurisdiction. Indeed, a strong theoretical argument can be advanced
for the proposition that, if there is another clearly more appropriate forum for the trial
of action, a stay should generally be granted even though the plaintiff ’s action would be
time-barred there. But, in my opinion, this is a case where practical justice should be
done. And practical justice demands that, if the court considers that the plaintiff acted
reasonably in commencing proceedings in this country, and that, although it appears that
(putting on one side the time-bar point) the appropriate forum for the trial of the action
is elsewhere than England, the plaintiff did not act unreasonably in failing to commence
proceedings (for example by issuing a protective writ) in that jurisdiction within the
limitation period applicable there, it would not, I think, be just to deprive the plaintiff of
the benefit of having started proceedings within the limitation period applicable in this
country. This approach is consistent with that of Sheen J in The Blue Wave, [1982] 1 Lloyd’s
Rep. 151. It is not to be forgotten that, by making its jurisdiction available to the plaintiff,
even the discretionary jurisdiction under RSC Ord. 11, the courts of this country have
provided the plaintiff with an opportunity to start proceedings here; accordingly, if justice
demands, the court should not deprive the plaintiff of the benefit of having complied with
the time-bar in this country. Furthermore, as the applicable principles become more
clearly established and better known, it will, I suspect, become increasingly difficult for
plaintiffs to prove lack of negligence in this respect. The fact that the court has been asked
to exercise its discretion under RSC Ord. 11, rather than that the plaintiff has served
proceedings on the defendant in this country as of right, is, I consider, only relevant to
consideration of the plaintiff ’s conduct in failing to save the time-bar in the other relevant
alternative jurisdiction. The appropriate order, where the application of the time-bar in
the foreign jurisdiction is dependent on its invocation by the defendant, may well be to
make it a condition of the grant of a stay or the exercise of discretion against giving leave
to serve out of the jurisdiction, that the defendant should waive the time-bar in the foreign
jurisdiction; this is apparently the practice in the United States of America.
(9) Application of the Principles to the Facts of the Present Case

The judge proceeded on the basis that the relevant test was that “if the English court is
shown to be distinctly more suitable for the ends of justice, then the case is a proper one
for service out of the jurisdiction.” The applicable principles are, I believe, as I have stated
them to be; and the judge’s approach was in accordance with those principles. I am
therefore unable to accept the submission made on behalf of Cansulex that there was any
material error of principle on the part of the judge.
I turn then to the question whether the Court of Appeal was entitled to interfere with
the judge’s exercise of his discretion. First, I take the criticism of the judge’s assessment
of the factor of availability of witnesses. It was said that he erred in thinking that all
Cansulex’s expert witnesses in the Cambridgeshire action were from England, whereas in
fact two were from England, and four were from elsewhere. However, as I have recorded,
this was drawn to his attention at the end of his judgment: he then took into account the
true position, and said that this difference was not of significance. No doubt, in making
that observation; he had it in mind that all the owners’ expert witnesses in the Cam-
bridgeshire action were from England. Next, Neill LJ commented ([1985] 2 Lloyd’s Rep.
116 at 123):
… even on [the judge’s] own analysis of the facts the convenience of the parties and the
witnesses probably tilted the scales towards British Columbia as the forum, but certainly did
not show that an English court would be “distinctly more suitable for the ends of justice.”
Similar observations were made by Oliver LJ. For my part, I consider, with all respect,
that these comments were not justified. At this stage, the judge did not have to apply the
overall test, but merely to assess the merits of the particular factor under consideration,
and I cannot help but think that the judge, with all his experience derived from hearing
a substantial part of the Cambridgeshire action, was better placed to make an assessment
of this factor than the Court of Appeal.
Turning to the factor of multiplicity of proceedings, the judge referred to the possibility
of MMTC being joined as co-defendants in the English proceedings as problematical.
Before the Court of Appeal counsel submitted on behalf of Cansulex that the other pro-
ceedings were at most a neutral factor and certainly did not bring the scales down on the
side of England, Neill LJ saw force in this criticism. But, once again, the judge did not
have to decide, and did not decide, that this particular factor was decisive of the case.
Moreover, if (as I think) the judge gave weight to this factor, he was, in my judgment,
entitled to do so. There is much to be said, in the interests of justice, in favour of the
shipowners’ claims against both Cansulex and MMTC being tried in the same proceed-
ings; and, having regard to the advice given to MMTC by their solicitors, there was a
prospect that, if it was decided that the case should be heard in England, MMTC would,
acting in their own interests, accept their own solicitors’ advice. Indeed, if this were to
happen, it might also be agreed that a claim over by MMTC against Cansulex should be
included in the same proceedings, rather than be arbitrated in London under an arbitra-
tion clause in the sale contract.
But the crucial point, in the judge’s view, was the Cambridgeshire factor. This was
regarded, certainly by Neill LJ, as relevant; and in this I find myself to be in agreement.
The criticism of the judge’s view of this factor goes, therefore, to its weight, as Neill LJ
indicated when he said that it seemed to him that the judge attached far too much import-
ance to this factor. With all respect, however, when I read the judgments of both Oliver
and Neill LJJ, I consider that they underrated it. I believe that anyone who has been
involved, as counsel, in very heavy litigation of this kind, with a number of experts on
both sides and difficult scientific questions involved, knows only too well what the learn-
ing curve is like: how much information and knowledge has to be, and is, absorbed, not
only by the lawyers but really by the whole team, including both lawyers and experts, as
they learn about the interrelation of law, fact and scientific knowledge, having regard to
the contentions advanced by both sides in the case, and identify in their minds the crucial
matters on which attention has to be focused, why these are the crucial matters, and how
they are to be assessed. The judge in the present case has considerable experience of litiga-
tion of this kind, and is well aware of what is involved. He was, in my judgment, entitled
to take the view (as he did) that this matter was not merely of advantage to the shipowners,
but also constituted an advantage which was not balanced by a countervailing equal dis-
advantage to Cansulex, and (more pertinently) further to take the view that having
experienced teams of lawyers and experts available on both sides of the litigation, who
had prepared for and fought a substantial part of the Cambridgeshire action for Cansulex
(among others) on one side and the relevant owners on the other, would contribute to
efficiency, expedition and economy, and he could have added, in my opinion, both to
assisting the court to reach a just resolution, and to promoting a possibility of settlement,
in the present case. This is not simply a matter, as Oliver LJ suggested, of financial advan-
tage to the shipowners: it is a matter which can, and should, properly be taken into
account, in a case of this kind, in the objective interests of justice.
For these reasons alone, I am of the opinion that this is a classic example of a case
where the appellate court has simply formed a different view of the weight to be given to
the various factors, and that this was not, therefore, an appropriate case for interfering
with the exercise of the judge’s discretion. But, in addition, there are two other factors
which the judge could, but did not, take into account, in support of the conclusion which
he in fact reached. First, he was, in my judgment, entitled to take into account, in assessing
the Cambridgeshire factor, the fact that, although the owners in the two cases were differ-
ent, the solicitors for the owners were in both cases instructed by the same insurers; and
he was also entitled to take into account that the insurers of the shipowners in the present
case are managed in England. Usually this is a matter of no concern in English litigation;
because, in subrogation claims, the action is in this country (unlike other countries)
brought in the name of the assured, and the rights being enforced are the rights of the
assured. But in the case of an application such as that in the present case, it is shutting
one’s eyes to reality to ignore the fact that it is the insurers who are financing the litigation
and are dominus litis; and this is, in my view, a relevant factor to be taken into account
(see the Société du Gaz case, 1926 SC (HL) 13 at 20 per Lord Sumner). Second, it was a
relevant factor that this litigation was being fought under a contract of which the putative
governing law was English law; and that this was by no means an insignificant factor in
the present case, since there was not only a dispute as to the effect of the bill of lading
contract (as to which, as I have already recorded, there appears to be some difference of
opinion between English and Canadian judges), but also, it appears, as to the nature of
the obligations under the contract in respect of what is usually called dangerous cargo.
However, had the judge taken these matters into account, they would only have reinforced
the conclusion which he in fact reached.
(10) The Effect of the Time-Bar in British Columbia

On the view of the case which I have formed, it is not strictly necessary to consider the
effect of the time-bar in British Columbia; but, since the point has been fully argued before
us, I propose briefly to express my views on it.
First, I cannot think that the fact (if it be the case) that the shipowners’ claim was not
time-barred if brought in the federal courts of Canada in provinces other than British
Columbia (one suggestion was the federal court sitting in the neighbouring province of
Alberta) was of any relevance. On this, I accept the submission of the shipowners that it
cannot be in the interest of the parties or in the interests of justice that the action should
effectively be remitted to a forum which cannot be described as appropriate for the trial
of the action.
Second, I do not think that the discretionary power which is, I understand, vested in
the courts of British Columbia to waive the time-bar, is relevant in this case. The point is
simply that the shipowners’ claim is not time-barred in England but may be treated as
time-barred in British Columbia. In these circumstances, the question inevitably arises
whether the English court, if it were minded to set aside the leave to serve proceedings
on Cansulex out of the jurisdiction, should do so on the condition that Cansulex should
waive any right to rely on the time-bar applicable in British Columbia.
So it is necessary to consider whether justice required the imposition of such a term.
The evidence before the Court of Appeal showed that neither the shipowners nor their
legal advisers were aware of the two-year limitation period applicable in British Columbia.
Cansulex did not draw the matter to their attention in their affidavit evidence; the ship-
owners’ solicitors simply stumbled on it when investigating the availability of suitable
lawyers in Vancouver. Next, although Cansulex had applied to the English court to set
aside the proceedings in the Cambridgeshire action, they had not appealed from the judge’s
adverse decision on the point and the Cambridgeshire action had proceeded to trial.
Furthermore, had the shipowner’s solicitors considered the matter, experience would have
indicated that, having regard to the law as generally understood to prevail before the
decision of this House in the Amin Rasheed case, [1983] 2 All ER 884, [1984] AC 50, in
which the speeches were delivered in July 1983, and to the prominence hitherto given to
legitimate personal and juridical advantages in the English jurisdiction (see, in particular,
the decisions of the Court of Appeal in Britannia Steamship Insurance Association Ltd. v.
Ausonia Assicurazioni SpA, [1984] 2 Lloyd’s Rep. 98 and the Ilyssia case, [1985] 1 Lloyd’s
Rep. 107), it was improbable that any different conclusion would be reached on an applica-
tion to set aside the leave granted in the present case. In this connection, it is to be
observed that the shipowners’ cause of action against Cansulex in the present case must
have accrued in November 1980 (when the loading of the cargo on board the Spiliada in
Vancouver was completed) and so was prima facie time-barred in British Columbia by
November 1982, nine months before the decision of this House in the Amin Rasheed case.
In my judgment, had the point arisen, I would have been minded to hold that, in all the
circumstances of the case, the shipowners had acted reasonably in commencing proceed-
ings in this country, and that they had not acted unreasonably in failing to commence
proceedings in British Columbia before the expiry of the limitation period there. In these
circumstances, had I agreed with the Court of Appeal that the judge erred in the exercise
of his discretion, I would nevertheless only have set aside the proceedings, to enable
proceedings to be brought in British Columbia, on the condition that Cansulex should
waive its right to reply on the time-bar in British Columbia.
However, for the reasons I have given I would allow the appeal with costs here and
below, and restore the order of Staughton J.
(11) Postscript
I feel that I cannot conclude without paying tribute to the writings of jurists which have
assisted me in the preparation of this opinion. Although it may be invidious to do so, I
wish to single out for special mention articles by Mr. Adrian Briggs, “Forum non conven-
iens—now we are ten” (1983), 3 LS 74 and “The Staying of Actions on the Ground of
‘Forum Non Conveniens’ in England Today,” [1984] Lloyd’s MCLQ 227, and the article
by Miss Rhona Schuz, “Controlling Forum-Shopping: The Impact of MacShannon v.
Rockware Glass Ltd.” (1986), 35 ICLQ 374. They will observe that I have not agreed with
them on all points; but even when I have disagreed with them, I have found their work
to be of assistance. For jurists are pilgrims with us on the endless road to unattainable
perfection: and we have it on the excellent authority of Geoffrey Chaucer that conversa-
tions among pilgrims can be most rewarding.
Appeal allowed.
[Concurring judgments were delivered by Lords Keith, Templeman, Griffiths, and

MacKay.]
Société Nationale Industrielle Aérospatiale v Lee Kui Jak

[1987] 3 WLR 59 (PC)

There is before their Lordships an appeal by the appellants, SNI Aérospatiale (whom
their Lordships will refer to as “SNIAS”), from a judgment of the Court of Appeal of
Brunei Darussalam delivered on 20 March 1987, in which the Court of Appeal dismissed
an appeal from a decision of Mr. Commissioner Rhind (delivered orally on 22 December
1986 and in writing on 16 January 1987) declining to grant an injunction restraining the
respondents from continuing proceedings commenced by them in the 61st Judicial
District Court of Harris County, Texas.
The matter has arisen as follows. On 16 December 1980 a Puma 330J helicopter crashed
near Kuala Belait in Brunei. There were 12 people on board; all were killed. Among those
killed was Yong Joon San.
Yong Joon San was a very successful businessman. His home was in Brunei, where he
lived with his wife and children. His main business (carried on by him under the name
of Yong Joon San General Contractor) was a business in his sole proprietorship concerned
with providing catering services to oil rigs and other structures operating off Brunei. He
also had a much smaller business in Malaysia called Yong & Co., which was likewise in
his sole proprietorship. It appears from the evidence presently available that Yong Joon
San was making a very substantial income from his business activities, and especially
from his catering business in Brunei, and that in addition he was making substantial sums
on the New York Stock Exchange. One estimate given of his income in the year before his
death was over $US1.8m. It has also been stated that, by the time of his death, he had
accumulated a fortune in the region of $US20m.
The Puma helicopter which crashed was manufactured by SNIAS in France in 1978.
SNIAS are a French company in the ownership of the French state. The helicopter in
question was owned by an English company, British and Commonwealth Shipping Co.
(Aviation) Ltd. (British and Commonwealth); but it was at all material times operated
and serviced by Bristow Helicopters Malaysia Sdn. Bhd. (Bristow Malaysia), an associated
company of Bristow Helicopters Ltd. (Bristow UK), and was under contract to Sarawak
Shell Bhd. and so was based at Miri Airport in Sarawak. The Bristow companies are
ultimately owned by British and Commonwealth.
The Brunei government ordered an inquiry into the accident. The inquiry was con-
ducted by the Brunei chief inspector of accidents, Mr. J.M. Holden. His report was submit-
ted to the Director of Civil Aviation of Brunei on 20 July 1982. The main conclusion of
the report was as follows:
… the most likely cause of the accident was a planetary gear failure in the second stage of
the two stage epicyclic main gear box reduction gear; the associated metal debris caused
jamming within the rotating assemblies, generating forces which fractured the common
epicycle ring gear and the main gearbox casing. This resulted in a gross instability in the
rotor system which caused blades to strike the fuselage.
It was further concluded that “the initial cause of the accident was due to the mistaken
health monitoring of the gearbox leading to a deterioration of the mechanical condition
of the gearbox components.” (Another possible cause was briefly mentioned, but their
Lordships were informed that this is no longer regarded as a serious possibility and it can
therefore be disregarded.)
The point about “mistaken health monitoring of the gearbox” is explained in the body
of the report. The maintenance practices to be followed in the event of gearbox contamina-
tion are set out in the SNIAS maintenance manual, which refers to nickel or carbon steel
particles taken from the filter and magnetic plug, and lays down a procedure to be followed
in the event of over 50 mm2 of such particles being collected. As is pointed out in the report,
this implies that debris from the filter and magnetic plug should be laid out and measured
on a cumulative basis until the maximum allowable measured area (50 mm2) is reached;
at that stage, the relevant component (either main gearbox or main rotor head) should
be returned to the factory and a new component fitted. The report continues:
On 30 January 1980 instructions had been received at Miri from Bristow Helicopters Ltd. in
the United Kingdom, following advice from [SNIAS], that “metal particles which are less
than 50 mm sq., i.e. 6 × 8 mm are acceptable.” This was attempting to confirm the information
contained in the Standard Practices Manual. Despite the above clarification, all the engineers
concerned with the maintenance of Puma 9 M-SSC at Miri misinterpreted the maximum
allowable area of particles of 50 mm2 (50 square millimetres) and in all cases it was under-
stood to mean the area of a square with 50 mm sides (2500 square millimetres). According
to Bristow’s Deputy Chief Engineer at Miri, the practices recommended in the Maintenance
and Standard Practices Manuals were carried out but there is no written record of the daily
measured or cumulative total area of particle debris obtained from the filter and the magnetic
plug. However, the actual debris was retained and subsequently handed over to the investiga-
tors who assessed the total area as 1580 mm2 (1580 square millimetres) or over thirty times
the maximum allowable area.
It was however later stated in the report:

… although the Standard Practices Manual is categoric in stating that a gearbox which has
produced more than 50 mm2 of metal should be removed and returned to the factory, the
Miri engineers had some justification for thinking that this instruction was not to be taken
too literally.
In para. 3 of the report headed “Conclusions,” finding 2 is as follows:

Gross contamination of the main gearbox magnetic plug and filter had occurred during the
six weeks preceding the accident. The particles had undoubtedly originated from the second
stage planet pinion bearing surfaces. Maintenance personnel had wrongly interpreted the
amount of allowable debris as defined in the [SNIAS] Standard Practices Manual, due to the
mistaken interpretation of an unfamiliar metric term.
And in para. 4, headed “Recommendations,” the first recommendation is as follows:

Any possibility of misinterpretation of the terms used in the Puma Standard Practices
Manual, on the allowable areas of debris from the main gearbox, should be corrected.
Proceedings were started by Yong Joon San’s widow, Lee Kui Jak, on her own behalf as
widow and (with her husband’s brother) as administrator of her husband’s estate; they
are the respondents to the present appeal. For convenience their Lordships will refer to
them as “the plaintiffs.” Three sets of proceedings were started, in December 1981, in
Brunei, France and Texas respectively. The Brunei proceedings were issued on 9 December
1981 against Bristow Malaysia as first defendants and SNIAS as second defendants; they
were served on SNIAS in December 1982. It was alleged that Bristow Malaysia were solely
responsible for the accident; as against SNIAS, allegations were made of negligent design
and manufacture, but no particulars were given. The French proceedings were against
SNIAS alone. No further steps were taken in those proceedings, and they have been dis-
continued long ago. The Texas proceedings were also issued on 9 December 1981. Among
the plaintiffs was a Richard Kittrell; it appears that he is a New York attorney who was
appointed administrator for the purpose of the proceedings, and was as such simply a
nominal plaintiff. There were eight defendants in the Texas proceedings, who fall into
three groups: (1) SNIAS, together with two United States associates of SNIAS: Aerospatiale
Helicopter Corp. (AHC), a Texas corporation, and European Aerospace Corp. (EAC), a
Delaware corporation; (2) Bristow Malaysia, together with two United States associated
companies: Bristow Helicopters Inc., a Connecticut corporation, and Bristow Offshore
Helicopters Inc., a Texas corporation; and (3) Sarawak Shell Bhd., together with Shell Oil
Co., a Delaware corporation. The plaintiffs’ claim against SNIAS was advanced under the
Texas Wrongful Death Statute (§71.031 of the Texas Civil Practice and Remedies Code),
which can apparently be invoked notwithstanding that the deceased had no connection
with Texas and that the “accident causing death occurred elsewhere, jurisdiction being”
asserted on the basis that SNIAS were doing business in Texas by selling their products
to purchasers in Texas, i.e. to their subsidiary AHC. The lawyers responsible for launching
the Texas proceedings were Messrs. Speiser Krause & Madole of New York, a specialist
firm of aviation lawyers, acting on the instructions of the plaintiffs’ Brunei lawyer, Mr.
Szetu. The reasons for launching them were subsequently stated by Mr. Szetu (in an affi-
davit dated 30 January 1984) to be (1) the more favourable Texas law on product liability
and (2) the higher level of damages awarded in courts in the United States. Shortly after
the Texas proceedings were commenced, the Texas lawyers acting for SNIAS attempted
to have the case removed to the federal court; but in mid-1982 the federal court remitted
the case back to the state court.
In the course of 1983 an agreement was reached whereby all proceedings as between
the plaintiffs on the one hand and the Bristow companies and the Shell companies on the
other hand were settled. A general release was granted to these companies by the plaintiffs
and by Richard Kittrell. The amount payable, and no doubt paid, to the plaintiffs under
the settlement was $US430,000; of this sum, $107,500 was to go to Speiser Krause &
Madole and Mr. Kittrell. The settlement, together with an apportionment between the
widow and her three children, was approved by the chief registrar in Brunei on 24 June
1984. SNIAS were not parties to the settlement, and their Lordships were told that they
were never invited to be parties to it.
Meanwhile, it appears that little progress was being made in the Texas proceedings
against SNIAS and their associated companies. However, in March 1985 the plaintiffs
decided to instruct fresh attorneys in the United States, changing from Speiser Krause &
Madole of New York to a Mr. Mithoff and a Mr. Jacks, members of two comparatively
small firms which practise in Houston, Texas, and which specialize in personal injury
claims. Thereafter, it seems that they proceeded to obtain discovery with a view to estab-
lishing jurisdiction over the three Aerospatiale defendants. However, in February 1986 a
vigilant computer drew the attention of the Texas court to the lack of progress in these
proceedings, and the court of its own motion took the formal step of listing the case for
dismissal for want of prosecution. On 14 March 1986 the plaintiffs filed a motion to retain;
and on 28 May 1986 the defendants filed a motion to dismiss on the ground of forum non
conveniens. The court decided not to dismiss the action for want of prosecution, but fixed
a trial date for 10 November 1986. Briefs were filed on the motion to dismiss on the
ground of forum non conveniens. This motion was opposed by the plaintiffs on two
grounds: (1) that, where a claim is made under the Texas Wrongful Death Statute, as a
matter of construction the doctrine of forum non conveniens has no application; and
(2) that, in the alternative, the court should in any event exercise its discretion to refuse
the defendants’ motion on the ground of forum non conveniens. On 14 August 1986 the
Texas court refused the defendants’ motion. In accordance with the practice of that court,
no reasons were given for the decision; it is impossible therefore to know whether the
decision was made on the first or the second ground advanced by the plaintiffs, nor, if the
decision was made on the second ground, for what reasons it was held that the Texas
court should not give effect to the doctrine of forum non conveniens. Furthermore, under
the procedure of the Texas court, no appeal lay from this decision. An attempt was made
to have the decision reviewed by petitioning the Court of Appeals for a writ of mandamus;
but this failed, the petition being dismissed on 2 October 1986. A further petition to the
Texas Supreme Court was dismissed on 5 November 1986; and a petition for a rehearing
was dismissed on 3 December 1986. By then, the defendants had exhausted their remedies
in Texas. Meanwhile, the plaintiffs’ new Texas attorneys had turned their attention to the
substantive issues in the case, taking depositions from a number of employees of AHC in
Texas. The trial date of 10 November 1986 was vacated as impracticable; and a new date was
fixed for February 1987. That date, too, has since been vacated; the trial in Texas is at pres-
ent fixed for 1 June 1987. Between December 1986 and March 1987 a number of deposi-
tions were taken by the plaintiffs’ Texas attorneys in France from employees of SNIAS.
In December 1986, having failed in their attempts to obtain dismissal of the proceedings
against them and their associated companies in Texas, SNIAS turned their attention to the
possibility of obtaining an injunction from the Brunei court restraining the plaintiffs from
continuing the Texas proceedings. Having taken advice from English and Brunei solicitors,
it was decided to make an immediate application because it transpired that a judge would
be available until 23 December 1986 but that thereafter no judge would be available until
late January 1987. Accordingly, the application was made to Mr. Commissioner Rhind on
20 December 1986; on 22 December, he refused to grant an injunction, giving his reasons
in writing later, on 16 January 1987. It is now accepted on both sides that, due to the lim-
ited time available, the evidence laid before the commissioner was inadequate and, to some
extent, misleading. Their Lordships trust that, in these circumstances, they will not be
thought to be lacking in courtesy if they do not refer to his judgment.
SNIAS then lodged a notice of appeal and, having regard to the urgency of the matter,
a court of appeal was specially assembled to hear the appeal in March 1987. The hearing
began on 19 March. Substantial further evidence was put in by both sides in the course
of the hearing of the appeal; indeed, it was common ground between the parties that the
Court of Appeal should consider the matter de novo. An additional reason for taking this
course was that a full report of the decision of the House of Lords in Spiliada Maritime
Corp. v. Cansulex Ltd., The Spiliada, [1986] 3 All ER 843, [1987] AC 460, was available to
the Court of Appeal; no such report had been available to Mr. Commissioner Rhind.
Furthermore, during the hearing undertakings were given by both sides, no doubt with
a view to fortifying their respective positions. The plaintiffs first stated that, if SNIAS
wished for trial by judge alone in Texas, the plaintiffs would agree to such a trial. Second,
they accepted that, the law of Brunei being applicable both as to liability and quantum in
respect of the trial of the matter in Texas, no claim lay against SNIAS either (a) in conse-
quence of strict liability or (b) for punitive damages. In their turn, SNIAS gave a number
of undertakings. These run to nearly three pages; the full text is appended to this opinion.
The most important are the following:
1. To provide the Plaintiffs within 28 days with two irrevocable Letters of Credit drawn
in their favour and confirmed by a first class bank within Brunei in the terms annexed
hereto …
5. That the Texas proceedings shall be permitted to continue until completion of pre-trial
discovery. (SNIAS’ position is that they are willing to undertake that they will procure
AHC to make any further documentary discovery of documents in the possession
custody or power of AHC which Plaintiffs may require. SNIAS are unwilling to accept
further deposition-taking in Texas unless the Court takes the view that no injunction
will be granted in the absence of such undertaking).
6. To agree to a trial date in September/October 1987 or as soon thereafter as may be
convenient to the Court and to cooperate in every way practicable to keep such date
effective.
7. To cooperate in every practicable way in the admission to the Bar of Brunei Darussalam
as ad hoc members for the purposes of his action of: William Thomas Jacks and Richard
Warner Mithoff.
8. To take all such steps as may be necessary to obtain all relevant consents for the use in
this action of any documents obtained by discovery in the Texas Action. …
The undertakings of SNIAS included in addition two alternative clauses regarding the
payment of the costs of the plaintiffs’ Texas attorneys.
In addition, there were certain developments regarding the position of Bristow Malay-
sia. In the course of the hearing before the Court of Appeal, a contribution notice was
served on Bristow Malaysia by SNIAS. It has been suggested that this was in fact too late,
because Bristow Malaysia were no longer parties to the action. But this was disputed, and
in any event Bristow Malaysia have indicated their readiness to accept service within the
jurisdiction of the Brunei court of any third party notice issued by SNIAS. It appears that,
whereas Bristow Malaysia are vigorously resisting Texas jurisdiction on the ground that
they have never done business in Texas, they have indicated their readiness to submit to
the jurisdiction of the courts in Brunei to enable the whole case to be determined there.
On the same day, 18 March 1987, SNIAS accepted service of a writ issued against them
on 16 December 1986 (one day before the expiry of the limitation period) by the owners
of the crashed helicopter together with the insurers of the hull.
• • •
The law relating to injunctions restraining a party from commencing or pursuing legal
proceedings in a foreign jurisdiction has a long history, stretching back at least as far as
the early nineteenth century. From an early stage, certain basic principles emerged which
are now beyond dispute. First, the jurisdiction is to be exercised when the “ends of justice”
require it (see Bushby v. Munday (1821), 5 Madd. 297 at 307, [1814-23] All ER Rep. 304
at 306 per Leach V-C and Carron Iron Co. v. MacLaren (1855) 5 HL Cas. 416 at 453, 10
ER 961 at 976 per Lord St. Leonards (in a dissenting speech, the force of which was, how-
ever, recognised by Lord Brougham (see 5 HL Cas. 416 at 459, 10 ER 961 at 979)). This
fundamental principle has been reasserted in recent years, notably by Lord Scarman in
Castanho’s case and by Lord Diplock in British Airways Board v. Laker Airways Ltd., [1984]
3 All ER 39 at 46, [1985] AC 58 at 81. Second, where the court decides to grant an injunc-
tion restraining proceedings in a foreign court, its order is directed not against the foreign
court but against the parties so proceeding or threatening to proceed. As Leach V-C said
in Bushby v. Munday, 5 Madd. 297 at 307, [1814-23] All ER Rep. 304 at 306:
If a Defendant who is ordered by this Court to discontinue a proceeding which he has com-
menced against the Plaintiff, in some other Court of Justice, either in this country or abroad,
thinks fit to disobey that order, and to prosecute such proceedings, this Court does not
pretend to any interference with the other Courts; it acts upon the Defendant by punishment
for his contempt in his disobedience to the order of the Court …
There are, of course, many other statements in the cases to the same effect. Third, it follows
that an injunction will only be issued restraining a party who is amenable to the jurisdic-
tion of the court against whom an injunction will be an effective remedy: see e.g., Re North
Carolina Estate Co. (1889), 5 TLR 328 per Chitty J. Fourth, it has been emphasised on
many occasions that, since such an order indirectly affects the foreign court, the jurisdic-
tion is one which must be exercised with caution: see e.g., Cohen v. Rothfield, [1919] 1 KB
410 at 413, [1918-19] All ER Rep. 260 at 261 per Scrutton LJ and, in more recent times,
Castanho’s case [1981] 1 All ER 143 at 149, [1981] AC 557 at 573 per Lord Scarman. All
of this is, their Lordships think, uncontroversial; but it has to be recognised that it does
not provide very much guidance to judges at first instance who have to decide whether
or not to exercise the jurisdiction in any particular case.
The decided cases, stretching back over a hundred years and more, provide however
a useful source of experience from which guidance may be drawn. They show, moreover,
judges seeking to apply the fundamental principles in certain categories of case, while at
the same time never asserting that the jurisdiction is to be confined to those categories.
Their Lordships were helpfully taken through many of the authorities by counsel in the
present case. One such category of case arises where an estate is being administered in
this country, or a petition in bankruptcy has been presented in this country, or winding-up
proceedings have been commenced here, and an injunction is granted to restrain a person
from seeking, by foreign proceedings, to obtain the sole benefit of certain foreign assets.
In such cases it may be said that the purpose of the injunction is to protect the jurisdiction
of the English court. Indeed, one of their Lordships has been inclined to think that such
an idea generally underlies the jurisdiction to grant injunctions restraining the pursuit
of foreign proceedings: see South Carolina Insurance Co. v. Assurantie Maatschappij “de
Zeven Provincien” NV, [1986] 3 All ER 487 at 499, [1987] AC 24 at 45 per Lord Goff; but
their Lordships are persuaded that this is too narrow a view. Another important category
of case in which injunctions may be granted is where the plaintiff has commenced pro-
ceedings against the defendant in respect of the same subject matter both in this country
and overseas, and the defendant has asked the English court to compel the plaintiff to
elect in which country he shall alone proceed. In such cases there is authority that the
court will only restrain the plaintiff from pursuing the foreign proceedings if the pursuit
of such proceedings is regarded as vexatious or oppressive: see McHenry v. Lewis (1882),
22 Ch. D 397 and Peruvian Guano Co. v. Bockwoldt (1882), 23 Ch. D 225, [1881-5] All
ER Rep. 715. Since in these cases the court has been presented with a choice whether to
restrain the foreign proceedings or to stay the English proceedings, we find in them the
germ of the idea that the same test (i.e., whether the relevant proceedings are vexatious
or oppressive) is applicable in both classes of case, an idea which was to bear fruit in the
statement of principle by Scott LJ in St. Pierre v. South American Stores (Gath & Chaves)
Ltd., [1936] 1 KB 382 at 398, [1935] All ER Rep. 408 at 414 in relation to staying proceed-
ings in this country, a statement of principle now overlaid by the adoption in such cases
of the Scottish principle of forum non conveniens, which has been gratefully incorporated
into English law.
The old principle that an injunction may be granted to restrain the pursuit of foreign
proceedings on the grounds of vexation or oppression, though it should not be regarded
as the only ground on which the jurisdiction may be exercised, is of such importance,
and of such apparent relevance in the present case, that it is desirable to examine it in a
little detail. As with the basic principle of justice underlying the whole of this jurisdiction,
it has been emphasised that the notions of vexation and oppression should not be
restricted by definition. As Bowen LJ said in McHenry v. Lewis (1882), 22 Ch. D 397 at
407-408:
I agree that it would be most unwise, unless one was actually driven to do so for the purpose
of deciding this case, to lay down any definition of what is vexatious or oppressive, or to draw
a circle, so to speak, round this Court unnecessarily, and to say that it will not move outside
it. I would much rather rest on the general principle that the Court can and will interfere
whenever there is vexation and oppression to prevent the administration of justice being
perverted for an unjust end. I would rather do that than attempt to define what vexation and
oppression mean; they must vary with the circumstances of each case.
In Peruvian Guano Co. v. Bockwoldt (1882), 23 Ch. D 225 at 230, [1881-5] All ER Rep.
715 at 716 Jessel MR gave two examples of vexatious proceedings. One, which he called
pure vexation, occurs when the proceedings are so utterly absurd that they cannot possibly
succeed. Another occurs when the plaintiff, not intending to annoy or harass the defend-
ant, but thinking he could get some fanciful advantage, sues him in two courts at the same
time under the same jurisdiction. He went on to say that similar, although not perhaps
the same, considerations apply in a case where the actions are brought one in a foreign
country and one in this country. Referring to McHenry v. Lewis, he summed up the pos-
ition as follows: that it is not vexatious to bring an action in each country where there are
substantial reasons of benefit to the plaintiff. Now, it is easy to see why in many cases this
is so, as, indeed, the nineteenth century cases show. For example, there may be assets
available for execution in a foreign country, or another party may only be amenable to
the jurisdiction of the courts of the foreign country. Indeed, it has been stressed that there
is no presumption that a multiplicity of proceedings is vexatious (see e.g. McHenry v.
Lewis, 22 Ch. D 397 at 400 per Jessel MR) and that proceedings are not to be regarded as
vexatious merely because they are brought in an inconvenient place (see Hyman v. Helm
(1883), 24 Ch. D 531 at 537 per Brett MR). But their Lordships, bearing in mind the words
of caution expressed by Bowen LJ in McHenry v. Lewis, 22 Ch. D 397 at 407-408 quoted
above, think it wise to remember the breadth of the jurisdiction. In particular, the possibil-
ity must be borne in mind that foreign proceedings may be restrained not only where
they are vexatious, in the sense of being frivolous or useless, but also where they are
oppressive; and also that, as Bowen LJ observed, everything depends on the circumstances
of the particular case, and new circumstances have emerged which were not, perhaps,
foreseen by our Victorian predecessors. Their Lordships refer, in particular, to the fact
that litigants may now be encouraged to proceed in foreign jurisdictions, having no con-
nection with the subject matter of the dispute, which exercise an exceptionally broad
jurisdiction and which offer such 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 recognised principle of forum non
conveniens should ensure that the foreign court will itself, where appropriate, decline to
exercise its own jurisdiction, especially as the existence of any particular advantage to the
plaintiff in that jurisdiction (e.g., availability of assets for execution within the jurisdiction)
can usually be protected, if thought appropriate, by granting a stay on terms. But a stay
may not be granted; and, if 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.
As Bowen LJ said in Peruvian Guano Co. v. Bockwoldt, 23 Ch. D 225 at 233, [1881-5] All
ER Rep. 715 at 718, the court will interfere when a party is acting under colour of asking
for justice “in a way which necessarily involves injustice” to others.
Now, as already recorded, in Castanho’s case [1981] 1 All ER 143 at 150, [1981] AC
557 at 574 Lord Scarman expressed the opinion that it was no longer necessary to examine
the earlier case law. He said:
I turn to consider what criteria should govern the exercise of the court’s discretion to impose
a stay or grant an injunction. It is unnecessary now to examine the earlier case law. The
principle is the same whether the remedy sought is a stay of English proceedings or a restraint
on foreign proceedings.
He then proceeded to refer to the much-quoted dictum from the speech of Lord Diplock
in MacShannon’s case, [1978] 1 All ER 625 at 630, [1978] AC 795 at 812, and said ([1981]
1 All ER 143 at 151, [1981] AC 557 at 575):
Transposed into the context of the present case, this formulation means that to justify the
grant of an injunction the defendants must show (a) that the English court is a forum to
whose jurisdiction they are amenable in which justice can be done at substantially less
inconvenience or expense, and (b) the injunction must not deprive the plaintiff of a legitimate
personal or juridical advantage which would be available to him if he invoked the American
jurisdiction. (Lord Scarman’s emphasis.)
Now it is to be observed, in the first place, that that approach has been overtaken by
events in the form of the decision of the House of Lords in Spiliada Maritime Corp. v.
Cansulex Ltd., The Spiliada, [1986] 3 All ER 843, [1987] AC 460. If Lord Scarman’s
approach were to be adapted to take account of the statement of principle expressed in
The Spiliada as applicable in cases of stay of proceedings, it would presumably read as
follows. To justify the grant of an injunction the defendant must show (a) that the English
court is the natural forum for the trial of the action to whose jurisdiction the parties are
amenable and (b) that justice does not require that the action should nevertheless be
allowed to proceed in the foreign court.
In practice, however, the principle so stated would have the effect that, where the par-
ties are in dispute on the point whether the action should proceed in an English or a
foreign court, the English court would be prepared, not merely to decline to adjudicate
by granting a stay of proceedings on the ground that the English court was forum non
conveniens, but, if it concluded that England was the natural forum, to restrain a party
from proceeding in the foreign court on that ground alone. Their Lordships cannot think
that this is right. Not only does it conflict with the observation of Brett MR in Hyman v.
Helm referred to above, but it leads to the conclusion that, in a case where there is simply
a difference of view between the English court and the foreign court as to which is the
natural forum, the English court can arrogate to itself, by the grant of an injunction, the
power to resolve that dispute. Indeed, in a passage in his speech in British Airways Board
v. Laker Airways Ltd., [1984] 3 All ER 39 at 45, [1985] AC 58 at 80 Lord Diplock appears
to have been ready to give credence to this approach. But, with all respect, such a conclu-
sion appears to their Lordships to be inconsistent with comity, and, indeed, to disregard
the fundamental requirement that an injunction will only be granted where the ends of
justice so require. Furthermore, if it were right, it would lead to the remarkable conclusion
that, in a case such as MacShannon’s case, the Scottish court, having concluded that
Scotland was the natural forum for the trial of the action, might for that reason alone
grant an interdict restraining the plaintiffs from proceeding in England. Their Lordships
are fortified in their opinion by the fact that, on examining a number of authorities from
the United States (for the citation of which they are much indebted to counsel), a country
where the principle of forum non conveniens is recognised as applicable in cases of stay
of proceedings, and also authorities from the law of Scotland in which that principle has
long been so applicable, they can find no trace of any suggestion that the principles applic-
able in cases of stay of proceedings and in cases of injunctions are the same. On the
contrary, the principles applicable in those countries in cases of injunctions to restrain
foreign proceedings bear a marked resemblance to those which have been applicable for
many years in this country. Certainly, this has long been the law in Scotland: see, e.g.,
Young v. Barclay (1846), 8 Dunl. (Ct. of Sess.) 774, where an interdict was granted restrain-
ing the pursuit of proceedings overseas on the ground that they were oppressive. There
are numerous cases in the United States to the like effect. It is enough for present purposes
to refer to Moore, Federal Practice (2d ed., 1986) vol. 7, pt. 2, para. 65.19.
For all these reasons, their Lordships are of the opinion that the long line of English
cases concerned with injunctions restraining foreign proceedings still provides useful
guidance on the circumstances in which such injunctions may be granted, though of
course the law on the subject is in a continuous state of development. They are further of
the opinion that the fact that the Scottish principle of forum non conveniens has now been
adopted in England and is applicable in cases of stay of proceedings provides no good
reason for departing from those principles. They wish to observe that, in The Spiliada,
[1986] 3 All ER 843 esp. at 857-858, [1987] AC 460 esp. at 480 per Lord Goff, care was
taken to state the principle of forum non conveniens without reference to cases on injunc-
tions. They cannot help but think that the suggestion in Castanho’s case that the principle
is the same in cases of stay of proceedings and in cases of injunctions finds its origin in
the fact that the argument of counsel before the House of Lords appears to have proceeded
very substantially on that assumption. In the opinion of their Lordships, in a case such
as the present where a remedy for a particular wrong is available both in the English (or,
as here, the Brunei) court and in a foreign court, the English (or Brunei) court will, gener-
ally speaking, only restrain the plaintiff from pursuing proceedings in the foreign court
if such pursuit would be vexatious or oppressive. This presupposes that, as a general rule,
the English or Brunei court must conclude that it provides the natural forum for the trial
of the action, and further, since the court is concerned with the ends of justice, that
account must be taken not only of injustice to the defendant if the plaintiff is allowed to
pursue the foreign proceedings, but also of injustice to the plaintiff if he is not allowed to
do so. So, as a general rule, the court will not grant an injunction if, by doing so, it will
deprive the plaintiff of advantages in the foreign forum of which it would be unjust to
deprive him. Fortunately, however, as the present case shows, that problem can often be
overcome by appropriate undertakings given by the defendant, or by granting an injunc-
tion on appropriate terms, just as, in cases of stay of proceedings, the parallel problem of
advantages to the plaintiff in the domestic forum which is, prima facie, inappropriate can
likewise often be solved by granting a stay on terms.
• • •
It is against that background that their Lordships have to consider the crucial question,
which is whether in the circumstances of this case an injunction should be granted to
restrain the plaintiffs from further proceeding in Texas. The mere fact that the courts of
Brunei provide the natural forum for the action is, for reasons already given, not enough
of itself to justify the grant of an injunction. An injunction will only be granted to prevent
injustice, and, in the context of a case such as the present, that means that the Texas
proceedings must be shown in the circumstances to be vexatious or oppressive.
• • •
Their Lordships are of the opinion that for the plaintiffs to be permitted to proceed in
a forum, Texas, other than the natural forum, Brunei, with that consequence could,
indeed, lead to serious injustice to SNIAS, and that the plaintiffs’ conduct in continuing
with their proceedings in Texas in these circumstances should properly be described as
oppressive. Furthermore, no objection to the grant of an injunction to restrain the plain-
tiffs from continuing with these proceedings can be made by them on the basis of injustice
to them, having regard to the undertakings given by SNIAS. It follows that, in their Lord-
ships’ opinion, an injunction should be granted.
Airbus Industrie GIE v Patel

[1999] 1 AC 119 (HL)
[In this case, the House of Lords was called on to decide whether the English court would
grant an anti-suit injunction in circumstances where there was no relevant connection
between the English jurisdiction and the proceedings in question other than that the
appellants, who were resident in England, were subject to the jurisdiction and could
effectively be restrained by an injunction granted by an English court. The English resi-
dents were plaintiffs in an Indian action commenced as a result of an airplane crash in
India. Subsequent to their commencing the Indian action, they had commenced another
action in Texas. The Indian court had granted an anti-suit injunction prohibiting continu-
ation of the Texas action, which they had ignored. An action was commenced in England
seeking recognition and enforcement of the Indian injunction or an English anti-suit
injunction. Recognition of the Indian injunction was refused by the trial judge and no
appeal was taken on that issue. In refusing to grant an English anti-suit injunction pro-
hibiting continuation of the Texas action, Lord Goff set out the following principles.]

[24] I approach the matter as follows. As a general rule, before an anti-suit injunction
can properly be granted by an English court to restrain a person from pursuing proceed-
ings in a foreign jurisdiction in cases of the kind under consideration in the present case,
comity requires that the English forum should have a sufficient interest in, or connection
with, the matter in question to justify the indirect interference with the foreign court
which an anti-suit injunction entails.
[25] In an alternative forum case, this will involve consideration of the question
whether the English court is the natural forum for the resolution of the dispute. The
proper approach in such cases was considered in some depth by Sopinka J in the Amchem
Products case [(1993), 102 DLR (4th) 96], where he said (at p. 119):
The first step in applying the [Aerospatiale] analysis is to determine whether the domestic
forum is the natural forum, that is the forum that on the basis of relevant factors has the
closest connection with the action and the parties. I would modify this slightly to conform
with the test relating to forum non conveniens. Under this test the court must determine
whether there is another forum that is clearly more appropriate. The result of this change in
stay applications is that where there is no one forum that is the most appropriate, the domes-
tic forum wins out by default and refuses a stay, provided it is an appropriate forum. In this
step of the analysis, the domestic court as a matter of comity must take cognizance of the
fact that the foreign court has assumed jurisdiction. If, applying the principles relating to
forum non conveniens outlined above, the foreign court could reasonably have concluded
that there was no alternative forum that was clearly more appropriate, the domestic court
should respect that decision and the application should be dismissed. Where there is a genu-
ine disagreement between the courts of our country and another, the courts of this country
should not arrogate to themselves the decision for both jurisdictions. In most cases it will
appear from the decision of the foreign court whether it acted on principles similar to those
that obtain here, but, if not, then the domestic court must consider whether the result is
consistent with those principles. In a case in which the domestic court concludes that the
foreign court assumed jurisdiction on a basis that is inconsistent with principles relating to
forum non conveniens and that the foreign court’s conclusion could not reasonably have been
reached had it applied those principles, it must go then to the second step of the [Aerospatiale]
test (i.e., whether to grant an injunction on the ground that the ends of justice require it).
His exposition is of considerable interest; for present purposes, however, it is not necessary
for me to give the matter detailed consideration.
[26] In a single forum case this approach, as I have pointed out, can have no applica-
tion. In such a case it may however be possible to establish a sufficient connection with
the English forum. In particular this may, as the Midland Bank case [Midland Bank Plc v
Laker Airways Ltd, [1986] QB 689 (CA)] suggests, involve consideration of the extent to
which the relevant transactions are connected with the English jurisdiction or it may, as
Judge Wilkey’s statement of principle [in Laker Airways Ltd v Sabena Belgian World
Airlines, 731 F (2d) 909 at 926-27 (DC Ct Apps 1984)] suggests, involve consideration of
the question whether an injunction is required to protect the policies of the English forum.
[27] The general principle which I have outlined above is, I understand, consistent
with the approach adopted by the Supreme Court of Canada in the Amchem Products
case. It is also close to the stricter approach adopted by the Second Circuit, the Sixth
Circuit and the District of Columbia Circuit in the United States. It may be said that the
traditional way in which the principles applicable in cases of anti-suit injunctions have
been formulated in this country corresponds to the “laxer” approach applied in the Fifth,
Seventh and Ninth Circuits, in that the latter refers to vexation, oppression and inequitable
hardship. But, as I see it, the problem which has arisen in such an acute form in the present
case requires the English courts to identify, for the first time, the limits which comity
imposes on the exercise of the jurisdiction to grant anti-suit injunctions. In truth, the
solution which I prefer gives (as does the statement of the law by Judge Wilkey) due
recognition to comity but, subject to that, maintains (as do the statements of the law by
Judge Posner) the traditional basis of the jurisdiction as being to intervene as the ends of
justice may require.
[28] In any event, however, I am anxious that the principle which I have stated should
not be interpreted too rigidly. I have therefore expressed it as a general rule. This is con-
sistent with my statement of the law in Aerospatiale, an alternative forum case, to the effect
that “as a general rule” the court granting the injunction must conclude that it is the
natural forum for the trial of the action (see [1987] AC 871, 896). It is also consistent with
Judge Wilkey’s statement (see 731 F 2d. 909, 926-7) that anti-suit injunctions are “most
often” necessary for the two purposes which he specified. Indeed there may be extreme
cases, for example where the conduct of the foreign state exercising jurisdiction is such
as to deprive it of the respect normally required by comity, where no such limit is required
to the exercise of the jurisdiction to grant an anti-suit injunction. In the present case
Hobhouse LJ attached particular importance to the fact that, at the material time, the
state of Texas did not recognise the principle of forum non conveniens. For my part, how-
ever, I cannot accept that this was sufficient to entitle the English court to intervene in
the present case, bearing in mind that the principle is by no means universally accepted,
and in particular is not accepted in most civil law countries.
The Present Case

[29] I ask myself therefore whether there is any other aspect of the present case which
would render the intervention of the English court consistent with comity. The facts upon
which Airbus particularly relies are that there is a forum other than Texas, viz. India,
which is indeed the natural forum for the dispute, but which is unable to grant effective
injunctive relief restraining the appellants from proceeding in Texas because they are
outside the jurisdiction of the Indian courts; however, since the appellants are amenable
to the jurisdiction of the English courts, Airbus is in effect seeking the aid of the English
courts to prevent the pursuit by the appellants of their proceedings in Texas, which may
properly be regarded as oppressive but which the Indian courts are powerless to prevent.
[30] I must first point out that, for the English court to come to the assistance of an
Indian court, the normal process is for the English court to do so by enforcing a judgment
of the Indian court. However, as the present proceedings have demonstrated, that is not
possible here. An attempt was made by Airbus to persuade Colman J to enforce, or at
least to recognise, the Indian judgment; but he declined to do so, and Airbus has not
appealed from that part of Colman J’s decision. So Airbus is relying simply on the English
court’s power of itself, without direct reliance on the Indian court’s decision, to grant an
injunction in this case where, unusually, the English jurisdiction has no interest in, or
III. The Canadian Cases 327
connection with, the matter in question. I am driven to say that such a course is not open
to the English courts because, for the reasons I have given, it would be inconsistent with
comity. In a world which consists of independent jurisdictions, interference, even indirect
interference, by the courts of one jurisdiction with the exercise of the jurisdiction of a
foreign court cannot in my opinion be justified by the fact that a third jurisdiction is
affected but is powerless to intervene. The basic principle is that only the courts of an
interested jurisdiction can act in the matter; and if they are powerless to do so, that will
not of itself be enough to justify the courts of another jurisdiction to act in their place.
Such are the limits of a system which is dependent on the remedy of an anti-suit injunction
to curtail the excesses of a jurisdiction which does not adopt the principle, widely accepted
throughout the common law world, of forum non conveniens.
Conclusion
[31] For the reasons I have given, I would allow the appeal on the first issue, and set
aside the injunction ordered by the Court of Appeal.
III. THE CANADIAN CASES

Although built on the foundation of English and Privy Council cases, the Canadian versions
of discretion diverged from the English version with respect to allocation of the burden of
proof and the procedure for obtaining an anti-suit injunction. The abolition in each province
of the ex parte application for service ex juris and, more recently, the enactment in a few
provinces of the Uniform Law Conference of Canada model statute, The Court Jurisdiction
and Proceedings Transfer Act (CJPTA), contributed to the Canadian position on allocation of
the burden of proof, but the Supreme Court of Canada decision in Amchem (below) is the
sole source of the Canadian approach to anti-suit injunctions.
Amchem gave the Supreme Court of Canada its first opportunity since 1976 to discuss
judicial discretion to restrain local proceedings (known as the doctrine of forum non conven
iens when the burden of proof is on the defendant). In Teck Cominco, the court faced the
issue of the proper exercise of discretion under the CJPTA in the notoriously difficult context
of parallel actions (lis alibi pendens). Most recently, the court in Van Breda, after a lengthy
discussion of the constitutional and conflicts meanings of a real and substantial connection,
addressed the doctrine of forum non conveniens, confirming its existence as a necessary ele-
ment in the jurisdictional analysis.
Amchem Products Inc v British Columbia (Workers’ Compensation Board)

[1993] 1 SCR 897, 102 DLR (4th) 96
SOPINKA J:
This is an appeal from the grant of an interlocutory injunction restraining tort proceed-
ings in a foreign court. The issue requiring determination in this case is whether the
anti-suit injunction issued in British Columbia which seeks to prevent the appellants from
pursuing their action against the respondents in Texas should be set aside. The resolution
of this issue requires an examination of our rules of private international law relating to
forum non conveniens and anti-suit injunctions.
As noted by A.V. Dicey and J.H.C. Morris, The Conflict of Laws, 11th ed., vol. 1 (Lon-
don: Stevens and Sons, 1987), at p. 391:
This topic has become of increasing modern importance as a result of a variety of factors
including the greater ease of communication and travel; the tendency of courts in many
countries to extend their jurisdiction over events and persons outside their territory; and a
greater awareness of foreign laws and procedures, which in turn may lead to “forum-
shopping.”
Facts
The individual appellants consist of 194 persons who have suffered injury which they
claim is due to exposure to asbestos or who are dependants of deceased persons affected
by asbestos. In July of 1988, nine of the individual appellants commenced an action in
the Texas District Court, Harrison County, Texas, seeking damages from the respondent
asbestos companies. Eventually, the number of individual plaintiffs swelled to 194 in
number. In all but 40 of these claims, the Workers’ Compensation Board of British Col-
umbia (“the Board”) has a subrogated interest, by virtue of having paid compensation in
the form of disability or death benefits to workers whose health was adversely affected by
exposure to asbestos, and hence is dominus litis. Any damages recovered beyond the
Board’s interest are to be paid to the claimants. The appellant, Cassiar Mining Corporation
(hereinafter “Cassiar”) is a British Columbia corporation which has mined asbestos in
that province. It was named a defendant in the action in British Columbia by the respond-
ent asbestos companies although no injunction was sought against it. It is alleged that in
any actions in British Columbia by the appellants, the respondent asbestos companies
would seek contribution and indemnity from Cassiar. Most of the claimants are or were
residents of the provinces of British Columbia at the time the injuries were sustained,
although some of the claimants are residents of Alberta, Manitoba, New Brunswick and
the American state of Washington.
The respondents are all companies involved in the manufacture, sale or supply of
asbestos and asbestos products. None of the respondents has any connection with the
province of British Columbia. Most of the asbestos companies were incorporated and
have their principal place of business and manufacture in the United States, although
there is no concentration of them in any single state. Although none of the respondents
was incorporated in the state of Texas, most of them carry on business in that state in the
form of asbestos manufacturing plants. Certain of the respondents have maintained their
principal asbestos manufacturing facilities (Garlock, Inc.) or corporate headquarters
(National Gypsum Company and Flexitallic Gaskett Company) in Texas at various times.
The respondent, National Gypsum, maintains a principal place of business in Texas. One
respondent, Carey Canada Inc., is a Quebec company with its principal place of business
in Quebec. Carey Canada is a subsidiary of an American corporation. T & N plc (here-
inafter “T & N”) is a company incorporated in the United Kingdom which carried on
business in Texas through a licensee who had offices in Houston and San Antonio, Texas.
The appellants allege that the respondent asbestos companies, with the possible excep-
tion of T & N and Carey Canada Inc., engaged in the following tortious conduct in the
United States: making decisions pertaining to the manufacture of various asbestos-con-

taining products; failing to provide adequate warnings and instructions for the use,
application and removal of asbestos-containing products; failing to notify workers and
others likely to be exposed of the dangers of asbestos exposure known to the asbestos
companies; and conspiring to suppress knowledge of those dangers. This court has
recently held in a related asbestos case that the conspiracy action should not be struck
out as disclosing no reasonable cause of action: Hunt v. Carey Canada Inc. (1990), 74 DLR
(4th) 321, [1990] 2 SCR 959, 4 CCLT (2d) 1.
The appellants allege that exposure to asbestos occurred in various jurisdictions,
including the United States, Canada (British Columbia, Alberta, Manitoba, Quebec and
New Brunswick) and Europe. The respondents, on the other hand, submit that virtually
all of the alleged exposure occurred while the appellants were resident and working in
British Columbia. On December 19, 1988, Baxter J of the Texas District Court found
jurisdiction and venue in Harrison County, Texas, under s. 71.031 of the Texas Civil Pro-
cedure and Remedies Code, on the basis that the asbestos companies had not discharged
the onus of showing that they did not carry on business in Texas. According to the
respondents, this ruling was not appealed because, under Texas law, such a ruling on
jurisdiction cannot be appealed until after trial of the action.
After the action was commenced in Texas, most of the 33 corporate defendants filed
special appearances challenging jurisdiction and venue and seeking a stay of the action
on the grounds that Texas was forum non conveniens. Six of the defendants, however,
including one of the respondents on this appeal (Owens-Corning Fiberglas Corporation),
filed “general answers” which are seen in Texas law to concede in personam jurisdiction.
The claimants (appellants in this action) opposed the forum non conveniens motion in
Texas on the ground that forum non conveniens had no application because the doctrine
had been statutorily abolished in Texas: see Dow Chemical Co. v. Castro Alfaro, 786 SW
2d 674 (Tex., 1990), certiorari denied 59 USLW 3460 (1991). On July 14, 1989, Leggat J
of the Texas District Court dismissed without reasons the companies’ motion to dismiss
due to forum non conveniens. The District Court subsequently denied a motion to recon-
sider this decision and the asbestos companies petitioned the Texas Supreme Court for
leave to file a writ of mandamus with respect to the forum non conveniens issue. This
petition was overruled and a further motion to reconsider that decision was denied by
the Texas Supreme Court. A scheduling order was made in September, 1989, setting a
jury trial for December 10, 1989.
In November, 1989, the asbestos companies brought applications in the Supreme Court
of British Columbia seeking anti-suit injunctions against the appellants, in order to
prevent the continuation of the Texas actions. The asbestos companies also brought a
claim for abuse of process. On November 10, 1989, an ex parte injunction was granted
by Cowan J restraining the continuation of the Texas proceedings. On November 20,
1989, those claimants who were not residents of British Columbia sought and obtained
an injunction in Texas to prevent the respondents from obtaining similar injunctions
against them in Canada. This is referred to as an “anti-anti-suit” injunction. It expired on
December 8, 1989.
T & N brought separate proceedings in British Columbia because it is its position that
the facts relating to it are different from the other respondents, in that T & N was sued in
Texas as if it were an American company. It had been linked to a Pennsylvania company
with which it had licensing and other agreements for the sale of asbestos in the United
States. T & N states that a company by the name of Atlas had the exclusive right to dis-
tribute all of their products in Canada. Hence, T & N submits, the claimants could not
have been exposed to its products.
The asbestos companies’ applications were heard by Esson CJSC who granted the
injunctions, on terms, including a requirement that the respondents attorn to the juris-
diction of the British Columbia courts should the appellants bring fresh actions in that
province. The asbestos companies’ claim for abuse of process was struck out. The appel-
lants appealed to the Court of Appeal for British Columbia, which dismissed their appeals.
At the hearing of the appeal, the Flintkote Company pursued a cross-appeal for abuse of
process. The Court of Appeal upheld the striking of this claim and dismissed the
cross-appeal.
On May 12, 1992, I granted a motion to adduce further evidence so that this court
would have before it a more complete record of the proceedings in the Texas courts, the
connection of the respondents to that jurisdiction and the proceedings that have taken
place in the rest of Canada since the injunction was granted.
• • •
Choosing the Forum in Modern Litigation

This court has not considered this question since its decision in Antares Shipping Corp.
v. The Ship “Capricorn” (1976), 65 DLR (3d) 105, [1977] 2 SCR 422, 7 NR 518. Meanwhile
the business of litigation, like commerce itself, has become increasingly international.
With the increase of free trade and the rapid growth of multinational corporations it has
become more difficult to identify one clearly appropriate forum for this type of litigation.
The defendant may not be identified with only one jurisdiction. Moreover, there are
frequently multiple defendants carrying on business in a number of jurisdictions and
distributing their products or services world-wide. As well, the plaintiffs may be a large
class residing in different jurisdictions. It is often difficult to pinpoint the place where the
transaction giving rise to the action took place. Frequently, there is no single forum that
is clearly the most convenient or appropriate for the trial of the action but rather several
which are equally suitable alternatives. In some jurisdictions, novel principles requiring
joinder of all who have participated in a field of commercial activity have been developed
for determining how liability should be apportioned among defendants. In this climate,
courts have had to become more tolerant of the systems of other countries. The parochial
attitude exemplified by Bushby v. Munday (1821), 5 Madd. 297 at p. 308, 56 ER 908 at
p. 913, that “[t]he substantial ends of justice would require that this Court should pursue
its own better means of determining both the law and the fact of the case” is no longer
appropriate.
This does not mean, however, that “forum shopping” is now to be encouraged. The
choice of the appropriate forum is still to be made on the basis of factors designed to
ensure, if possible, that the action is tried in the jurisdiction that has the closest connection
with the action and the parties and not to secure a juridical advantage to one of the liti-
gants at the expense of others in a jurisdiction that is otherwise inappropriate. I recognize
that there will be cases in which the best that can be achieved is to select an appropriate
forum. Often there is no one forum that is clearly more appropriate than others.
The courts have developed two forms of remedy to control the choice of forum by the
parties. The first and more conventional device is a stay of proceedings. This enables the
court of the forum selected by the plaintiff (the domestic forum) to stay the action at the
request of the defendant if persuaded that the case should be tried elsewhere. The second
is the anti-suit injunction, a more aggressive remedy, which may be granted by the
domestic court at the request of a defendant or defendants, actual or potential, in a foreign
suit. In the usual situation the plaintiff in the domestic court moves to restrain the defend-
ant or defendants from launching or continuing a proceeding in the courts of another
jurisdiction. Occasionally, as in this case, the defendants in a foreign jurisdiction who
allege that the plaintiff in that jurisdiction has selected an inappropriate forum seek an
injunction from the courts of the alleged appropriate forum, in which no proceeding is
pending, to restrain continuation of the foreign proceedings. While the restraining order
operates in personam on the plaintiff in the foreign suit and not on the foreign court itself,
it has the latter effect and therefore raises serious issues of comity.
Although both the remedy of a stay and an injunction have as their main objectives
the selection of an appropriate forum for the trial of the action, there is a fundamental
difference between them which is crucial to the development of the principles which
should govern each. In the case of the stay the domestic court determines for itself whether
in the circumstances it should take jurisdiction whereas, in the case of the injunction, it
in effect determines the matter for the foreign court. Any doubts that a foreign court will
not regard this as a breach of comity are dispelled by reading the reaction of Wilkey J of
the District of Columbia Circuit of the United States Federal Court of Appeal in Laker
Airways v. Sabena, Belgian World Airlines, 731 F2d 909 (1984), in which the British courts
restrained Laker from continuing an anti-trust suit in United States courts against British
airlines. In assessing the role of comity in the formulation of the principles which should
inform the exercise of this power, I adopt the definition of comity approved by Justice La
Forest in Morguard Investments Ltd. v. De Savoye (1990), 76 DLR (4th) 256 at p. 269,
[1990] 3 SCR 1077, 46 CPC (2d) 1:
It has been suggested that by reason of comity, anti-suit injunctions should either never
be granted or severely restricted to those cases in which it is necessary to protect the
jurisdiction of the court issuing the injunction or prevent evasion of an important public
policy of the domestic forum: see Richard W. Raushenbush, “Antisuit Injunctions and
International Comity” (1985), 71 Va. Law Rev. 1039, and Laker Airlines. A case can be
made for this position. In a world where comity was universally respected and the courts
of countries which are the potential fora for litigation applied consistent principles with
respect to the stay of proceedings, anti-suit injunctions would not be necessary. A court
which qualified as the appropriate forum for the action would not find it necessary to
enjoin similar proceedings in a foreign jurisdiction because it could count on the foreign
court staying those proceedings. In some cases, both jurisdictions would refuse to decline
jurisdiction as, for example, where there is no one forum that is clearly more appropriate
than another. The consequences would not be disastrous. If the parties chose to litigate
in both places rather than settle on one jurisdiction, there would be parallel proceedings,
but since it is unlikely that they could be tried concurrently, the judgment of the first court
to resolve the matter would no doubt be accepted as binding by the other jurisdiction in
most cases.
While the above scenario is one we should strive to attain, it has not yet been achieved.
Courts of other jurisdictions do occasionally accept jurisdiction over cases that do not
satisfy the basic requirements of the forum non conveniens test. Comity is not universally
respected. In some cases a serious injustice will be occasioned as a result of the failure of
a foreign court to decline jurisdiction. It is only in such circumstances that a court should
entertain an application for an anti-suit injunction. This then indicates the general tenor
of the principles that underlie the granting of this form of relief. In order to arrive at more
specific criteria, it is necessary to consider when a foreign court has departed from our
own test of forum non conveniens to such an extent as to justify our courts in refusing to
respect the assumption of jurisdiction by the foreign court and in what circumstances
such assumption amounts to a serious injustice. The former requires an examination of
the current state of the law relating to the stay of proceedings on the ground of forum non
conveniens, while the latter, the law with respect to injunctions and specifically anti-suit
injunctions.
Forum Non Conveniens

The law of Canada and other common law countries on this subject evolved from the law
of England which was most recently restated by the House of Lords in Spiliada Maritime
Corp. v. Cansulex Ltd., [1987] 1 AC 460. In setting out the principles which should guide
a British court, Lord Goff, who delivered the main judgment, stated at p. 477 that “on a
subject where comity is of importance, it appears that there will be a broad consensus
among major common law jurisdictions.” The English approach has gone through several
stages of evolution tending to a broader acceptance of the legitimacy of the claim of other
jurisdictions to try actions that have connections to England as well as to such other
jurisdictions. Other common law jurisdictions have either accepted the principles in
Spiliada, or an earlier version of them.
• • •
The current state of the law in Canada is summed up adequately by Ellen L. Hayes in
“Forum Non Conveniens in England, Australia and Japan: The Allocation of Jurisdiction
in Transnational Litigation” (1992), 26 UBC Law Rev. 41 at pp. 42-3:
The status of the doctrine of forum non conveniens in Canada is unclear. In general terms
the Canadian courts have looked to English authorities when considering forum non con-
veniens issues. Their specific approach, however, is not consistent. The most recent cases
from the Western provinces refer to the current English test, but at the same time resist
adopting a comprehensive test or rule which would result in an “overly legalistic approach.”
The Ontario courts, on the other hand, have fallen behind the English courts’ development
of the doctrine and continue to apply a test which has now been replaced by the House of
Lords. There is confusion in many of the cases as to whether the test is different when the
defendant is served within the jurisdiction rather than ex juris, where the burden of proof
lies and the weight to be given personal or juridical advantages to the plaintiff of proceeding
in the home jurisdiction.
The only recent decision of this court on the subject is Antares, supra, which, while an
admiralty case in the Federal Court, discusses the general principles relating to forum
non conveniens. At p. 123, Ritchie J, for the majority, stated the test that should be applied
when the court is asked to stay an action on this ground:
In my view the overriding consideration which must guide the Court in exercising its discre-
tion by refusing to grant such an application as this must, however, be the existence of some
other forum more convenient and appropriate for the pursuit of the action and for securing
the ends of justice.
This case was decided before Spiliada and MacShannon [Rockware Glass Ltd v MacShan-
non, [1978] 2 WLR 362 (HL)]. It is significant that there is no mention in the statement
of general principles of any requirement that the domestic proceeding be shown to be
oppressive or vexatious. There is no specific discussion of the second condition of the
English rule but it is clear from the judgment that a principal factor in the determination
that there was no alternative forum more convenient than Canada was the fact that it was
the only jurisdiction in which the plaintiff could obtain an effective judgment. The ship,
which was the subject of the suit, had been arrested in Quebec and the bond posted to
obtain its release was security for enforcement of any judgment obtained in Canada. No
such security was available in the other jurisdictions which were potential appropriate
fora for the action. Accordingly, Canada was the most convenient forum for both “the
pursuit of the action” and “for securing the ends of justice.”
In my view, there is no reason in principle why the loss of juridical advantage should
be treated as a separate and distinct condition rather than being weighed with the other
factors which are considered in identifying the appropriate forum. The existence of two
conditions is based on the historical development of the rule in England which started
with two branches at a time when oppression to the defendant and injustice to the plaintiff
were the dual bases for granting or refusing a stay. The law in England has evolved by
reworking a passage from the reasons of Scott LJ in St. Pierre v. South American Stores
(Gath & Chaves), Ltd., [1936] 1 KB 382 (CA), which contained two conditions. In its
original formulation the second condition required the court to ensure that there was no
injustice to the plaintiff in granting the stay. No doubt this was because the oppression
test concentrated largely on the effects on the defendant of being subjected to a trial in
England. When the first condition moved to an examination of all the factors that are
designed to identify the natural forum, it seems to me that any juridical advantages to the
plaintiff or defendant should have been considered one of the factors to be taken into
account. The weight to be given to juridical advantage is very much a function of the
parties’ connection to the particular jurisdiction in question. If a party seeks out a juris-
diction simply to gain a juridical advantage rather than by reason of a real and substantial
connection of the case to the jurisdiction, that is ordinarily condemned as “forum shop-
ping.” On the other hand, a party whose case has a real and substantial connection with
a forum has a legitimate claim to the advantages that that forum provides. The legitimacy
of this claim is based on a reasonable expectation that in the event of litigation arising
out of the transaction in question, those advantages will be available.
Finally, I observe that Antares, supra, was a case in which leave to serve ex juris was
required. The court did not, however, consider this an important matter in formulating
the test. It seems to me that whether it is a case for service out of the jurisdiction or the
defendant is served in the jurisdiction, the issue remains: is there a more appropriate
jurisdiction based on the relevant factors. If the defendant resides out of the jurisdiction
this is a factor whether or not service is effected out of the jurisdiction. Residence outside
of the jurisdiction may be artificial. It may have been arranged for tax or other reasons
notwithstanding the defendant has a real and substantial connection with this country.
The special treatment which the English courts have accorded to ex juris cases appears to
be based on the dictates of Or. 11 of the English rules which imposes a heavy burden on
the plaintiff to justify the assertion of jurisdiction over a foreigner. In most provinces in
Canada, leave to serve ex juris is no longer required except in special circumstances and
this trend is one that is likely to spread to other provinces. This phenomenon was con-
sidered by the High Court of Australia in Voth [v Manildra Flour Mills Pty Ltd (1990), 65
AJLR 83], in reaching its conclusion that the test should be the same for service ex juris
cases and others. Whether the burden of proof should be on the plaintiff in ex juris cases
will depend on the rule that permits service out of the jurisdiction. If it requires that
service out of the jurisdiction be justified by the plaintiff, whether on an application for
an order or in defending service ex juris where no order is required, then the rule must
govern. The burden of proof should not play a significant role in these matters as it only
applies in cases in which the judge cannot come to a determinate decision on the basis
of the material presented by the parties. While the standard of proof remains that applic-
able in civil cases, I agree with the English authorities that the existence of a more appro-
priate forum must be clearly established to displace the forum selected by the plaintiff.
This was the position adopted by McLachlin JA (as she then was) in Avenue Properties
Ltd. v. First City Development Corp. (1986), 32 DLR (4th) 40, [1987] 1 WWR 249, 7 BCLR
(2d) 45 (CA). She emphasized that this had particular application where there were no
parallel foreign proceedings pending.
This review establishes that the law in common law jurisdictions is, as observed by
Lord Goff in Spiliada, remarkably uniform. While there are differences in the language
used, each jurisdiction applies principles designed to identify the most appropriate or
appropriate forum for the litigation based on factors which connect the litigation and the
parties to the competing fora. A review of the law of Japan by Ellen L. Hayes in the study
to which I refer above (at p. 63) led her to conclude that similar principles are applied
there. Regard for the principles of international comity to which I have referred suggests
that in considering an anti-suit injunction the fact that a foreign court has assumed juris-
diction in circumstances which are consistent with the application of the above principles
is an important factor militating against granting an injunction.
• • •
Anti-Suit Injunction
• • •
Canadian jurisprudence is not widely developed on this subject-matter. Even the early
cases, however, admonished that the power to restrain foreign proceedings should be
exercised with great caution and that the strict purpose of such injunctions was to prevent
the abuse of the courts by vexatious actions. There is no decision of this court on the point.
Two recent Nova Scotia decisions dealt with anti-suit injunctions. Canadian Home
Assurance Co. v. Cooper (1986), 29 DLR (4th) 419, 18 CCLI 279, 10 CPC (2d) 195 (NS SC,
App. Div.) pre-dated the English judgment of SNI [Société Nationale Industrielle Aéro
spatiale v Lee Kui Jak, [1987] 3 All ER 510 (PC)]. In that case, an injunction was granted
upon MacKeigan JA’s findings that the foreign action involving the same parties was of
no value to the respondents since if its resolution was the same as the domestic action, it
would not add to the domestic judgment, and, if the judgment were not the same, it would
not be recognized in the domestic jurisdiction because of what would be considered to
be a jurisdictional error. Without discussion of the governing principles, the injunction
was granted. In the later Nova Scotia case of Rowan Companies, Inc. v. DiPersio (1990),
69 DLR (4th) 224, 41 CPC (2d) 257, 96 NSR (2d) 181 (CA), which was decided after SNI,
an anti-suit injunction was refused by the Court of Appeal. Jones JA, delivering the judg-
ment for the court, stated that the balance of convenience favoured the respondent. The
factors he relied on were that the action was brought in the lex loci delicti which was the
appropriate forum and that the applicant carried on business in the foreign jurisdiction
where, presumably, some of the witnesses resided. He found at p. 240 that the action could
not be termed “frivolous or vexatious.”
In the recent Alberta Queen’s Bench decision in Allied-Signal Inc. v. Dome Petroleum
Ltd., [1989] 5 WWR 326, 67 Alta. LR (2d) 259, Medhurst J purported to apply the English
principles enunciated in SNI in an action for an anti-suit injunction. He stated at p. 334:
After considering all of the submissions that have been made, it is my view that these applica-
tions before me should be decided on the basis of which forum is more suitable for the ends
of justice in determining the issues in dispute. This includes a consideration of the tripartite
test for obtaining interlocutory injunctions in other proceedings.
Medhurst J concluded that on the basis of the forum conveniens test the injunction should
be granted. He added that the injunction might also be justified on two further grounds:
(1) the foreign action is oppressive due to the risks of inconsistent findings and subsequent
actions for contribution and indemnity, and (2) the tripartite test for granting interim
injunctions which includes consideration of the public interest and private interests of
the parties was satisfied.
Kornberg v. Kornberg (1990), 76 DLR (4th) 379, 47 CPC (2d) 58, 30 RFL (3d) 238
(Man. CA); leave to appeal to the Supreme Court of Canada refused 79 DLR (4th) vii,
[1991] 1 SCR x, 48 CPC (2d) 29n, is a case which applied the SNI principles. The majority
of the Court of Appeal recognized that the principles applicable to an anti-suit injunction
were not the same as those applicable to a stay of domestic proceedings. Philp JA, writing
for the majority, held that an anti-suit injunction should not be granted unless continuing
the foreign proceedings would lead to injustice to the other party or the pursuit of the
foreign proceedings was vexatious and oppressive. This decision was in contrast to the
Manitoba Court of Appeal decision in Aikmac Holdings Ltd. v. Loewen (1989), 42 CPC
(2d) 139, [1989] 6 WWR 759, 66 Man. R (2d) 295, which applied the English approach
in Castanho [v Brown & Root (UK) Ltd, [1981] AC 557 (HL)], which was overruled in
1987 by the Privy Council in SNI.
No consistent approach appears to emerge from these cases other than recognition of
the principle that great caution should be exercised when invoking the power to enjoin
foreign litigation.
The Test
In my view, the principles outlined in SNI should be the foundation for the test applied
in our courts. These principles should be applied having due regard for the Canadian
approach to private international law. This approach is exemplified by the judgment of
this court in Morguard, supra, in which La Forest J stressed the role of comity and the
need to adjust its content in light of the changing world order. I now turn to the formu-
lation of the test in light of the foregoing.
First, it is useful to discuss some preliminary aspects of procedure with respect to
anti-suit injunctions. As a general rule, the domestic court should not entertain an applica-
tion for an injunction if there is no foreign proceeding pending. While quia timet injunc-
tions are granted by the courts, that is done only if the applicant establishes that some
threatened action by the defendant will constitute an actionable civil wrong. In general,
an injunction is a remedy ancillary to a cause of action: see Case Comment, Elizabeth R.
Edinger (1992), 71 Can. Bar Rev. 117 at p. 127. In this respect the anti-suit injunction is
unique in that the applicant does not have to establish that the assumption of jurisdiction
by the foreign court will amount to an actionable wrong. Moreover, although the applica-
tion is heard summarily and based on affidavit evidence, the order results in a permanent
injunction which ordinarily is granted only after trial. 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.
If the foreign court stays or dismisses the action there, the problem is solved. If not,
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.
In any case in which an action has been commenced in the domestic forum, it can be
expected that the domestic forum is being put forward as an appropriate forum by the
plaintiff. In resisting a stay, the plaintiff will also contend that there is no other forum
which is clearly more appropriate and that, therefore, the defendant has not complied
with the test which I have outlined above. If no action has been commenced in the
domestic forum, it has no juridical basis for entertaining an application for an injunction
unless it is contended by the applicant that the action should have been commenced in
the domestic forum as the more appropriate place of trial and it is potentially an appropri-
ate forum.
The first step in applying the SNI analysis is to determine whether the domestic forum
is the natural forum, that is the forum that on the basis of relevant factors has the closest
connection with the action and the parties. I would modify this slightly to conform with
the test relating to forum non conveniens. Under this test the court must determine
whether there is another forum that is clearly more appropriate. The result of this change
in stay applications is that where there is no one forum that is the most appropriate, the
domestic forum wins out by default and refuses a stay, provided it is an appropriate forum.
In this step of the analysis, the domestic court as a matter of comity must take cognizance
of the fact that the foreign court has assumed jurisdiction. If, applying the principles
relating to forum non conveniens outlined above, the foreign court could reasonably have
concluded that there was no alternative forum that was clearly more appropriate, the
domestic court should respect that decision and the application should be dismissed.
When there is a genuine disagreement between the courts of our country and another,
the courts of this country should not arrogate to themselves the decision for both juris-
dictions. In most cases it will appear from the decision of the foreign court whether it
acted on principles similar to those that obtain here, but, if not, then the domestic court
must consider whether the result is consistent with those principles.
In a case in which the domestic court concludes that the foreign court assumed juris-
diction on a basis that is inconsistent with principles relating to forum non conveniens
and that the foreign court’s conclusion could not reasonably have been reached had it
applied those principles, it must go then to the second step of the SNI test. I prefer the
initial formulation of that step without reference to the terms “oppressive or vexatious.”
At p. 522, Lord Goff states:
This presupposes that, as a general rule, the English or Brunei court must conclude that it
provides the natural forum for the trial of the action, and further, since the court is concerned
with the ends of justice, that account must be taken not only of injustice to the defendant if
the plaintiff is allowed to pursue the foreign proceedings, but also of injustice to the plaintiff
if he is not allowed to do so. So, as a general rule, the court will not grant an injunction if, by
doing so, it will deprive the plaintiff of advantages in the foreign forum of which it would be
unjust to deprive him.
(Emphasis added.) That case was decided on the basis of the injustice to SNI by reason of
the loss of juridical advantages in Brunei but not available to it in Texas. The characteriza-
tion of this loss as oppressive added nothing to the analysis. This is especially so since
neither “oppressive” nor “vexatious” was satisfactorily defined in SNI nor, from my reading
of the cases, anywhere else. If flexibility is the desired objective, it is achieved by the use
of the term “injustice” which, in addition, is more in keeping with the language of the
statutes which provide for injunctive relief. For example, the British Columbia Law and
Equity Act, RSBC 1979, c. 224, s. 36, authorizes an injunction when “it appears to the
court to be just or convenient.”
When will it be unjust to deprive the plaintiff in the foreign proceeding of some per-
sonal or juridical advantage that is available in that forum? I have already stated that the
importance of the loss of advantage cannot be assessed in isolation. The loss of juridical
or other advantage must be considered in the context of the other factors. The appropriate
inquiry is whether it is unjust to deprive the party seeking to litigate in the foreign juris-
diction of a judicial or other advantage, having regard to the extent that the party and the
facts are connected to that forum based on the factors which I have already discussed. A
party can have no reasonable expectation of advantages available in a jurisdiction with
which the party and the subject-matter of the litigation has little or no connection. Any
loss of advantage to the foreign plaintiff must be weighed as against the loss of advantage,
if any, to the defendant in the foreign jurisdiction if the action is tried there rather than
in the domestic forum. I pointed out in my discussion of the test for determining the
forum non conveniens that loss of juridical advantage is one of the factors and it will have
been considered in step one. It will also be considered in the second step to determine
whether, apart from its influence on the choice of the most appropriate forum, an injustice
would result if the plaintiff is allowed to proceed in the foreign jurisdiction. The loss of a
personal or juridical advantage is not necessarily the only potential cause of injustice in
this context but it will be, by far, the most frequent. Indeed most of the authorities involve
loss of juridical advantage rather than personal advantage. None the less, loss of personal
advantage might amount to an injustice if, for example, an individual party is required
to litigate in a distant forum with which he or she has no connection. I prefer to leave
other possible sources of injustice to be dealt with as they arise.
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.
[Sopinka J determined that the asbestos companies had not satisfied either step of the test
for the issuance of an anti-suit injunction and the claimants’ appeal was allowed.]
Teck Cominco Metals Ltd v Lloyd’s Underwriters

2009 SCC 11, [2009] 1 SCR 321, 303 DLR (4th) 385
McLACHLIN CJ (for the court):

[1] Teck Cominco Metals Ltd. (“Teck”) sued the Lombard General Insurance Co. of
Canada (“Lombard”), Lloyd’s Underwriters (“Lloyd’s”) and Seaton Insurance Co.
(“Seaton”) (collectively referred to as the “Insurers”) for coverage in relation to environ-
mental damage alleged to have occurred in the United States, downstream from Teck’s
British Columbia smelter. Teck commenced its action in Washington State. The Insurers
commenced parallel coverage proceedings in British Columbia. The issue on this appeal
is whether the British Columbia proceedings should be stayed. The courts below ruled
they should not be stayed. I agree with that result, and would dismiss the appeal.
I. Facts
[2] Teck has various mining and smelting operations in British Columbia. In 2002
and 2003 it gave notice to the Insurers of four claims or potential claims in respect of
environmental damage arising from activities of a predecessor company, Cominco Ltd.
The claims or potential claims arose from Cominco’s operations in four British Columbia
sites: Port McNeill, Pinchi Lake, Vancouver and Trail.
[3] The largest claim arises from the discharge of waste material known as “slag” into
the Columbia River adjacent to Teck’s smelter in Trail. Allegedly, the discharge accumu-
lated in the Upper Columbia River and Lake Roosevelt in Washington State. In an action
filed in the U.S. District Court in 2004 (the “U.S. Environmental Action”), numerous
private citizens and the State of Washington seek to hold Teck liable under a U.S. statute
(the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
§§ 9601-9675) for environmental property damage allegedly caused by the contamination.
[4] Teck takes the position that the Insurers are required to defend and indemnify it
in the U.S. Environmental Action. In the period of 1958 to 1985, Cominco Ltd. purchased
general and excess liability insurance policies from the Insurers (the “Policies”). Apart from
coverage limits, the Policies provide similar coverage, requiring each insurer to defend and
indemnify Teck in the event of any alleged liability resulting from an occurrence of prop-
erty damage taking place during the period of coverage anywhere in the world. Teck says
that the alleged contamination in Washington State is covered by the Policies.
[5] The Insurers deny that they are obligated to compensate Teck on various grounds.
[6] The extent of the damages faced by Teck in the U.S. Environmental Action is not
known; however, it is expected to exceed the limits underlying each of the policies, which
collectively total over $779 million. (See motions judgment, 2006 BCSC 1276, 60 B.C.L.R.
(4th) 261, at paras. 35 and 63, and Court of Appeal judgment, 2007 BCCA 249, 67 B.C.L.R.
(4th) 101, at paras. 16-17.)
[7] On November 23, 2005, Teck commenced an action in the Washington State
Superior Court seeking a declaratory judgment regarding its right to insurance coverage
under the Policies in respect of the U.S. Environmental Action (the “U.S. Coverage
Action”). On that same day, Lloyd’s commenced an action in the Supreme Court of British
Columbia seeking declaratory orders regarding their obligation (or lack thereof) to defend
or indemnify Teck in respect of the claims or potential claims concerning the four British
Columbia sites. Seaton, a defendant in the Lloyd’s action, also filed a counterclaim. Lom-
bard subsequently filed a similar action to Lloyd’s. (The Insurers’ actions are collectively
referred to as the “B.C. Coverage Action.”)
[8] The parties have each taken various steps to obtain jurisdictional rulings in order
to have the insurance coverage matter adjudicated in their preferred court. As a result,
the U.S. Coverage Action was moved from the Washington State Superior Court to the
United States District Court for the Eastern District of Washington (“U.S. District Court”).
The Insurers filed a motion in the U.S. District Court seeking an order to dismiss Teck’s
claims against them in the U.S. Coverage Action. Teck filed similar motions in the British
Columbia Supreme Court seeking orders staying the B.C. Coverage Action.
[9] On May 1, 2006, Suko J. of the U.S. District Court denied the Insurers’ applications
to dismiss Teck’s claims against them on the basis of forum non conveniens.
[10] By agreement of the parties, the U.S. District Court temporarily stayed the
proceedings in the U.S. Coverage Action pending this Court’s disposition of the appeal.
II. Judicial History

A. Supreme Court of British Columbia (Davies J.), 2006 BCSC 1276,
60 B.C.L.R. (4th) 261
[11] The chambers judge held that s. 11 of the Court Jurisdiction and Proceedings
Transfer Act, S.B.C. 2003, c. 28 (“CJPTA”), is “part of a comprehensive remedial statutory
scheme that is intended to codify the determination of jurisdictional issues in British
Columbia” (para. 102). He denied the stay of the B.C. Coverage Action … .
• • •
B. Court of Appeal for British Columbia (Newbury, Mackenzie and

Kirkpatrick JJ.A.), 2007 BCCA 249, 67 B.C.L.R. (4th) 101
[13] Newbury J.A., writing for the court, found that the chambers judge properly
considered and weighed each factor in s. 11(2) of the CJPTA. She agreed with Davies J.
that the principle of comity did not require deference to the first court to assert jurisdic-
tion. Finding no error in Davies J.’s conclusion that British Columbia was the more
appropriate forum for the trial of the coverage action, Newbury J.A. dismissed Teck’s
appeal.
III. Relevant Statutory Provisions

[14] Section 11 of the CJPTA provides that:
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 circum-
stances 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.
IV. Issues
[15] The only issue on this appeal is whether the coverage proceedings commenced
in British Columbia should be stayed, in view of the prior parallel proceedings in Wash-
ington State and the assertion of jurisdiction by the U.S. District Court. Resolving this
issue requires us to consider the application of s. 11 of the CJPTA in circumstances where
prior proceedings have been commenced outside British Columbia and the foreign court
has refused to stay its action.
[16] The reasons will go on to consider whether the chambers judge acted properly
in rejecting the Teck’s application to decline jurisdiction and stay the B.C. Coverage
Action, having regard to the appropriate test.
V. Analysis
• • •
[17] Teck submits that where a foreign court has assumed jurisdiction in parallel
proceedings, the usual multifactored test under s. 11 of the CJPTA must give way to a
“comity-based” test that respects the foreign court’s decision to take jurisdiction.
[18] In favour of this approach, Teck argues that there is a distinction between a situ-
ation where it is submitted that a foreign court would be the appropriate forum, and the
situation where a foreign court has in fact asserted jurisdiction. 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 is the appropriate forum to hear the
dispute. Teck argues that where a foreign court has asserted jurisdiction on the basis of
factors similar to those found in s. 11 of the CJPTA, s. 11 does not apply and the court
may decline jurisdiction simply on the basis that the foreign court has asserted jurisdic-
tion, and that comity requires that the domestic court recognize that prior assertion of
jurisdiction.
[19] An alternative, slightly softer version of this argument is that assertion of juris-
diction by the foreign court is a factor of overwhelming significance in the determination
of whether the local forum is appropriate (forum conveniens) and that, since the US
District Court has positively asserted jurisdiction, the British Columbia courts are effect-
ively bound to stay the parallel actions in British Columbia.
[20] I will consider each of these arguments in turn.
[21] The first argument is that s. 11 of the CJPTA does not apply where a foreign court
has asserted jurisdiction. I cannot agree. The CJPTA creates a comprehensive regime that
applies to all cases where a stay of proceedings is sought on the ground that the action
should be pursued in a different jurisdiction (forum non conveniens). It requires that in
every case, including cases where a foreign judge has asserted jurisdiction in parallel
proceedings, all the relevant factors listed in s. 11 be considered in order to determine if
a stay of proceedings is warranted. This includes the desirability of avoiding multiplicity
of legal proceedings. But the prior assertion of jurisdiction by a foreign court does not
oust the s. 11 inquiry.
[22] Section 11 of the CJPTA was intended to codify the forum non conveniens test,
not to supplement it. The CJPTA is the product of the Uniform Law Conference of Canada.
In its introductory comments, the Conference identified the main purposes of the pro-
posed Act, which included bringing “Canadian jurisdictional rules into line with the
principles laid down by the Supreme Court of Canada in Morguard Investments Ltd. v.
De Savoye, [1990] 3 SCR 1077, and Amchem Products Inc. v. British Columbia (Workers’
Compensation Board), [1993] 1 SCR 897” (Uniform Law Conference of Canada—Com-
mercial Law Strategy (loose-leaf), at p. 3). Further, the drafters of the model Act confirmed
that s. 11 of the CJPTA was intended to codify the common law forum non conveniens
principles in “comments to section 11”:
11.1 Section 11 is meant to codify the doctrine of forum non conveniens, which was
most recently confirmed by the Supreme Court of Canada in Amchem Products Inc. v. British
Columbia (1993). The language of subsection 11(1) is taken from Amchem and the earlier
cases on which it was based. The factors listed in subsection 11(2) as relevant to the court’s
discretion are all factors that have been expressly or implicitly considered by courts in the
past. [p. 11]
Section 11 of the CJPTA thus constitutes a complete codification of the common law test
for forum non conveniens. It admits of no exceptions.
[23] Teck submits that the usual multifactored test under s. 11 of the CJPTA must give
way to a “comity-based” test when a foreign court positively asserts jurisdiction. To the
extent this argument implies that the usual test does not give due comity to foreign courts,
it must be rejected. Section 11 of the CJPTA is itself a comity-based approach. As will be
discussed, comity is not necessarily served by an automatic deferral to the first court that
asserts jurisdiction. It follows that Teck’s argument, that s. 11 does not apply where a
foreign court has already asserted jurisdiction over the matter, cannot succeed.
[24] Alternatively, it is argued that if s. 11 applies, the assertion of jurisdiction by the
foreign court is an overriding and determinative factor in the s. 11 analysis. This argument
also must be rejected.
[25] First, had actual assertion of jurisdiction by a foreign court been seen as a factor
that should override all others, one would have expected the legislature to have stated this
expressly. Rather, avoidance of multiplicity of proceedings is simply listed along with other
factors. This suggests that the existence of foreign proceedings is only one factor, among
many, to be considered in a forum non conveniens analysis.
[26] Second, the authorities are against this contention. Teck says 472900 B.C. Ltd. v.
Thrifty Canada Ltd. (1998), 168 DLR (4th) 602 (BCCA), Westec Aerospace Inc. v. Raytheon
Aircraft Co., 1999 BCCA 243, 67 BCLR (3d) 278, and Ingenium Technologies Corp. v.
McGraw-Hill Cos., 2005 BCCA 358, 49 BCLR (4th) 120, support the fact that a prior
assertion of jurisdiction is a factor of overwhelming significance. In Thrifty, the British
Columbia Supreme Court declined to stay its proceedings in view of a prior assertion of
jurisdiction by the Ontario court over a parallel action. The Court of Appeal allowed the
appeal on the basis that the chambers judge erred by giving no weight to the fact the
parties had expressly agreed that the contract would be interpreted in accordance with
Ontario law and had agreed to attorn to the jurisdiction of the court of Ontario. Ultim-
ately, it was the various connections to Ontario, not simply the prior assertion of juris-
diction by the Ontario court, that warranted the granting of a stay in the British Columbia
proceedings.
[27] In Westec, the defendant commenced an action in Kansas. Shortly thereafter, the
plaintiff sued in British Columbia. The Court of Appeal, in determining whether to grant
a stay in the British Columbia action, considered a number of factors, including: place of
incorporation, place of business, location of assets and the formation and performance
of the contract. (Unlike Thrifty, the foreign court had not asserted jurisdiction.) The Court
of Appeal concluded that both fora had “a real and substantial connection to the dispute”
(para. 46) and ultimately decided to stay the British Columbia action on the basis that
the plaintiff had failed to establish a juridical advantage that would be lost if the proceed-
ings were stayed.
[28] The final case relied on by Teck is Ingenium. In Ingenium, the British Columbia
Court of Appeal reviewed the chambers judge’s decision not to stay the British Columbia
action in the face of a positive assertion of jurisdiction by the US District Court for the
Southern District of New York over parallel proceedings in New York. The Court of Appeal
found that the chambers judge was correct in concluding that “the existence of parallel
proceedings does not trump all other factors” (para. 9). However, the court went on to
allow the appeal on the basis that the chambers judge erred in attaching no significance to
the fact the US District Court had positively asserted jurisdiction in her analysis. I do not
consider that Ingenium laid down a new test for the determination of forum non conveniens
in cases where a foreign court has assumed jurisdiction in parallel proceedings.
[29] Finally, policy considerations do not support making a foreign court’s prior
assertion of jurisdiction an overriding and determinative factor in the forum non conven-
iens analysis. To adopt this approach would be to encourage a first-to-file system, where
each party would rush to commence proceedings in the jurisdiction which it thinks will
be most favourable to it and try to delay the proceedings in the other jurisdiction in order
to secure a prior assertion in their preferred jurisdiction. Technicalities, such as how long
it takes a particular judge to assert jurisdiction, might be determinative of the outcome.
In short, considerations that have little or nothing to do with where an action is most
conveniently or appropriately heard, would carry the day. Such a result is undesirable and
inconsistent with the language and purpose of s. 11, discussed above.
[30] Also, the extent to which approaches to the exercise of jurisdiction differ on an
international level also weighs in favour of rejecting Teck’s approach. A distinction should
be made between situations that involve a uniform and shared approach to the exercise
of jurisdiction (e.g. inter-provincial conflicts) and those, such as the present, that do not.
In the latter, blind acceptance of a foreign court’s prior assertion of jurisdiction carries
with it the risk of declining jurisdiction in favour of a jurisdiction that is not more appro-
priate. A holistic approach, in which the avoidance of a multiplicity of proceedings is one
factor among others to be considered, better serves the purpose of fair resolution of the
forum non conveniens issue with due comity to foreign courts.
[31] For the foregoing reasons, I conclude that s. 11 of the CJPTA applies to the
motions before the British Columbia courts to decline jurisdiction, and that the prior
assertion of jurisdiction by the US District Court is merely one factor to be considered,
among others.
B. Applying the Proper Principles, Did the Chambers Judge Err in Permitting
the BC Coverage Action to Continue?
[32] As set out earlier, the chambers judge dismissed Teck’s motions to stay the BC
Coverage Action. In arriving at this conclusion, the chambers judge carefully considered
all of the factors mandated for consideration by s. 11(2) of the CJPTA, namely: the com-
parative convenience and expense for the parties to the proceeding and for their witnesses,
in litigating in the court or in any alternative forum (s. 11(2)(a)); the law to be applied to
issues in the proceeding (s. 11(2)(b)); the desirability of avoiding multiplicity of legal
proceedings (s. 11(2)(c)); the desirability of avoiding conflicting decisions in different
courts (s. 11(2)(d)); the enforcement of an eventual judgment (s. 11(2)(e)); and the fair
and efficient working of the Canadian legal system as a whole (s. 11(2)(f)).
[33] Before this Court, Teck argued that the chambers judge erred in disregarding the
fact that the insurance coverage sought was in relation to damages claimed in Washington
State. Teck submits that the US District Court’s assertion of jurisdiction should be
respected because the issues in the environmental action brought by Washington residents
under US legislation may impact on the issue of insurance coverage in this action.
[34] The difficulty with this submission is that the chambers judge carefully considered
these arguments and the totality of the evidence before him. Having done so, he deter-
mined that the central issues in the coverage actions (disclosure, risk assessment, and
policy interpretation) weighed in favour of British Columbia, and that the only coverage
issues properly the substance of the US Environmental Action are inconsequential.
[35] He was alive to the fact that the environmental damage had occurred in Wash-
ington State, but held that that fact alone did not lead to the conclusion that foreign law
should apply to the coverage action. On the contrary, he concluded that it would be
unreasonable to apply Washington law because, inter alia, Teck’s alleged wrongful actions
occurred solely in Canada, the proceedings involved other British Columbia sites with
no connection to Washington State, and the Washington residents are not beneficiaries
to the Policies.
[36] The chambers judge was also alive to the concern that on a forum non conveniens
application, the court should strive to avoid a situation where two jurisdictions may be
dealing with the same subject matter. While finding the US District Court’s prior assertion
of jurisdiction to be a factor of high importance, he concluded that it could not prevail
in view of the fact British Columbia was the forum most closely connected with Teck and
the Policies, and that Washington State, a jurisdiction with at best a tenuous connection
to the parties and the Policies, was not an appropriate forum.
[37] I see no error in the reasons or the conclusion of the chambers judge. He con-
sidered all the relevant factors under s. 11 of the CJPTA. Those factors support his decision
to refuse to stay the BC Coverage Action.
[38] Teck argues that a refusal to stay the BC Coverage Action places the parties in the
difficult position of having legal proceedings on the issue of insurance coverage in two
separate jurisdictions. While I am sympathetic to the difficulties presented by parallel
proceedings, the desire to avoid them cannot overshadow the objective of the forum non
conveniens analysis, which is “to ensure, if possible, that the action is tried in the jurisdic-
tion that has the closest connection with the action and the parties” (Amchem, at p. 912).
[39] Teck also argues that to allow the coverage action to proceed in British Columbia
raises problems with regard to the enforcement of any judgment obtained in the US
Coverage Action. If the US District Court proceeding (which has been temporarily stayed
pending the outcome of this appeal) were to conclude first, the resultant judgment would
ordinarily be enforceable in Canada. Would the British Columbia court be bound to
recognize the judgment, thus effectively nullifying the British Columbia proceeding? Or
would recognition of the foreign judgment be precluded on the basis that there is ongoing
litigation on the same subject matter in British Columbia? Professor Black and Mr. Swan
suggest the availability of three approaches to this problem: (1) a race where the first
judgment handed down prevails; (2) an absolute preference for local proceedings; or (3)
a middle ground that adopts a general first-to-judgment rule but affords additional
defences to enforcement that may be engaged in some circumstances: V. Black and J.
Swan, “Concurrent Judicial Jurisdiction: A Race to the Court House or to Judgment?”
(2008), 46 CBLJ 292.
[40] I do not propose to answer this question, as it was not fully developed in the
courts below or before us; nor is the answer necessary in order to dispose of the appeal.
As mentioned above, the enforcement issue was disposed of by the chambers judge on
the basis that he was satisfied that it was unlikely that Teck would have to resort to exe-
cution proceedings in order to obtain satisfaction from the Insurers.
[41] For the foregoing reasons, I would dismiss the appeal, costs to the respondents.

2012 SCC 17, [2012] 1 SCR 572
[Extracts from this decision dealing with constitutional issues and jurisdiction simplicter
are reproduced in Chapters 3 and 6.]
LeBEL J (McLachlin CJ and Deschamps, Fish, Abella, Rothstein and Cromwell JJ concur-
ring):
(9) Doctrine of Forum Non Conveniens and the Exercise of Jurisdiction

[101] As I mentioned above, a clear distinction must be drawn between the existence
and the exercise of jurisdiction. This distinction is central both to the resolution of issues
related to jurisdiction over the claim and to the proper application of the doctrine of
forum non conveniens. Forum non conveniens comes into play when jurisdiction is estab-
lished. It has no relevance to the jurisdictional analysis itself.
[102] Once jurisdiction is established, if the defendant does not raise further objec-
tions, the litigation proceeds before the court of the forum. The court cannot decline to
exercise its jurisdiction unless the defendant invokes forum non conveniens. The decision
to raise this doctrine rests with the parties, not with the court seized of the claim.
[103] If a defendant raises an issue of forum non conveniens, the burden is on him or
her to show why the court should decline to exercise its jurisdiction and displace the
forum chosen by the plaintiff. The defendant must identify another forum that has an
appropriate connection under the conflicts rules and that should be allowed to dispose
of the action. The defendant must show, using the same analytical approach the court
followed to establish the existence of a real and substantial connection with the local
forum, what connections this alternative forum has with the subject matter of the litiga-
tion. Finally, the party asking for a stay on the basis of forum non conveniens must
demonstrate why the proposed alternative forum should be preferred and considered to
be more appropriate.
[104] This Court reviewed and structured the method of application of the doctrine
of forum non conveniens in Amchem. It built on the existing jurisprudence, and in par-
ticular on the judgment of the House of Lords in Spiliada Maritime Corp. v. Cansulex Ltd.,
[1987] 1 A.C. 460. The doctrine tempers the consequences of a strict application of the
rules governing the assumption of jurisdiction. As those rules are, at their core, based on
establishing the existence of objective factual connections, their use by the courts might
give rise to concerns about their potential rigidity and lack of consideration for the actual
circumstances of the parties. When it is invoked, the doctrine of forum non conveniens
requires a court to go beyond a strict application of the test governing the recognition
and assumption of jurisdiction. It is based on a recognition that a common law court
retains a residual power to decline to exercise its jurisdiction in appropriate, but limited,
circumstances in order to assure fairness to the parties and the efficient resolution of the
dispute. The court can stay proceedings brought before it on the basis of the doctrine.
[105] A party applying for a stay on the basis of forum non conveniens may raise
diverse facts, considerations and concerns. Despite some legislative attempts to draw up
exhaustive lists, I doubt that it will ever be possible to do so. In essence, the doctrine
focusses on the contexts of individual cases, and its purpose is to ensure that both parties
are treated fairly and that the process for resolving their litigation is efficient. For example,
s. 11(1) of the CJPTA provides that a court may decline to exercise its jurisdiction if,
“[a]fter considering the interests of the parties to a proceeding and the ends of justice,” it
finds that a court of another state is a more appropriate forum to hear the case. Section
11(2) then provides that the court must consider the “circumstances relevant to the
proceeding.” To illustrate those circumstances, it contains a non-exhaustive list of factors:
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. [s. 11(2)]
[106] British Columbia’s Court Jurisdiction and Proceedings Transfer Act, which is
based on the CJPTA, contains an identical provision—s. 11—on forum non conveniens.
In Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321, at
para. 22, this Court stated that s. 11 of the British Columbia statute was intended to
“codify” forum non conveniens. Article 3135 of the Civil Code of Québec provides that
forum non conveniens forms part of the private international law of Quebec, but it does
not contain a description of the factors that are to govern the application of the doctrine
in Quebec law. The courts are left with the tasks of developing an approach to applying it
and of identifying the relevant considerations.
[107] Quebec’s courts have adopted an approach that, although basically identical to
that of the common law courts, is subject to the indication in art. 3135 that forum non
conveniens is an exceptional recourse. A good example of this can be found in the judg-
ment of the Quebec Court of Appeal in Oppenheim forfait GMBH v. Lexus maritime inc.,
1998 CanLII 13001, in which an action brought in Quebec was stayed in favour of a
German court on the basis of forum non conveniens. Pidgeon J.A. emphasized the wide-
ranging and contextual nature of a forum non conveniens analysis. The judge might
consider such factors as the domicile of the parties, the locations of witnesses and of pieces
of evidence, parallel proceedings, juridical advantage, the interests of both parties and
the interests of justice (pp. 7-8; see also Spar Aerospace, at para. 71; J.A. Talpis with the
collaboration of S.L. Kath, “If I am from Grand-Mère, Why Am I Being Sued in Texas?”
Responding to Inappropriate Foreign Jurisdiction in Quebec – United States Crossborder
Litigation (2001), at pp. 44-45).
[108] Regarding the burden imposed on a party asking for a stay on the basis of forum
non conveniens, the courts have held that the party must show that the alternative forum
is clearly more appropriate. The expression “clearly more appropriate” is well established.
It was used in Spiliada and Amchem. On the other hand, it has not always been used
consistently and does not appear in the CJPTA or any of the statutes based on the CJPTA,
which simply require that the party moving for a stay establish that there is a “more
appropriate forum” elsewhere. Nor is this expression found in art. 3135 of the Civil Code
of Québec, which refers instead to the exceptional nature of the power conferred on a
Quebec authority to decline jurisdiction: “… it may exceptionally and on an application

by a party, decline jurisdiction … .”
[109] The use of the words “clearly” and “exceptionally” should be interpreted as an
acknowledgment that the normal state of affairs is that jurisdiction should be exercised
once it is properly assumed. The burden is on a party who seeks to depart from this normal
state of affairs to show that, in light of the characteristics of the alternative forum, it would
be fairer and more efficient to do so and that the plaintiff should be denied the benefits
of his or her decision to select a forum that is appropriate under the conflicts rules. The
court should not exercise its discretion in favour of a stay solely because it finds, once all
relevant concerns and factors are weighed, that comparable forums exist in other prov-
inces or states. It is not a matter of flipping a coin. A court hearing an application for a
stay of proceedings must find that a forum exists that is in a better position to dispose
fairly and efficiently of the litigation. But the court must be mindful that jurisdiction may
sometimes be established on a rather low threshold under the conflicts rules. Forum non
conveniens may play an important role in identifying a forum that is clearly more appro-
priate for disposing of the litigation and thus ensuring fairness to the parties and a more
efficient process for resolving their dispute.
[110] As I mentioned above, the factors that a court may consider in deciding whether
to apply forum non conveniens may vary depending on the context and might include the
locations of parties and witnesses, the cost of transferring the case to another jurisdiction
or of declining the stay, the impact of a transfer on the conduct of the litigation or on
related or parallel proceedings, the possibility of conflicting judgments, problems related
to the recognition and enforcement of judgments, and the relative strengths of the con-
nections of the two parties.
[111] Loss of juridical advantage is a difficulty that could arise should the action be
stayed in favour of a court of another province or country. This difficulty is aggravated
by the possible conflation of two different issues: the impact of the procedural rules
governing the conduct of the trial, and the proper substantive law for the legal situation,
that is, in the context of these two appeals, the proper law of the tort. In considering the
question of juridical advantage, a court may be too quick to assume that the proper law
naturally flows from the assumption of jurisdiction. However, the governing law of the
tort is not necessarily the domestic law of the forum. This may be so in many cases, but
not always. In any event, if parties plead the foreign law, the court may well need to
consider the issue and determine whether it should apply that law once it is proved. Even
if the jurisdictional analysis leads to the conclusion that courts in different states might
properly entertain an action, the same substantive law may apply, at least in theory, wher-
ever the case is heard.
[112] A further issue that does not arise in these appeals is whether it is legitimate to
use this factor of loss of juridical advantage within the Canadian federation. To use it too
extensively in the forum non conveniens analysis might be inconsistent with the spirit and
intent of Morguard and Hunt, as the Court sought in those cases to establish comity and
a strong attitude of respect in relations between the different provinces, courts and legal
systems of Canada. Differences should not be viewed instinctively as signs of disadvantage
or inferiority. This factor obviously becomes more relevant where foreign countries are
involved, but even then, comity and an attitude of respect for the courts and legal systems
of other countries, many of which have the same basic values as us, may be in order. In
the end, the court must engage in a contextual analysis, but refrain from leaning too
instinctively in favour of its own jurisdiction. At this point, the decision falls within the
reasoned discretion of the trial court. The exercise of discretion will be entitled to defer-
ence from higher courts, absent an error of law or a clear and serious error in the deter-
mination of relevant facts, which, as I emphasized above, takes place at an interlocutory
or preliminary stage. I will now consider whether the Ontario courts properly assumed
jurisdiction in these cases and, if so, whether they should have declined to exercise it on
the basis of forum non conveniens.
(10) Application
[113] Before discussing the outcomes in the two appeals, I must note that the evidence
was not the same in Van Breda and Charron, although they did raise similar legal issues
and their factual matrices were the same in important aspects. The Court of Appeal rightly
observed that the evidence about Club Resorts’ activities in Ontario was not identical in
the two cases. In particular, the plaintiffs in Charron, unlike the plaintiffs in Van Breda,
asserted that the SuperClubs group of companies, to which the appellant Club Resorts
belonged, maintained an office near Toronto and that Club Resorts had availed itself of
that office’s services. They also relied on the fact that representatives of Club Resorts had
travelled to Ontario to promote their business. Moreover, it is important to note that in
considering the decisions of the courts below, this Court must show deference to the
findings of fact of the judges of the Superior Court of Justice.
(a) Van Breda

[114] In Van Breda, there is little evidence about the existence of sufficient factual
connections. Ms. Van Breda’s accident and physical injuries happened in Cuba. Mr. Berg
and Ms. Van Breda were living in Ontario at the time of their trip. After the accident,
however, they did not return to Ontario, as they moved first to Calgary and later to British
Columbia, where they were living when they brought their action. Ms. Van Breda’s dam-
age, pain and suffering have happened mostly in British Columbia, like most of the
treatments she has received. In addition, the evidence is essentially silent about Club
Resorts’ activities in Ontario, except on one point which I will address below. Moreover,
I do not accept that evidence of advertising in Ontario would be enough to establish a
connection. Advertising is often international, if not global. It is ubiquitous, crossing
borders with ease. It does not, on its own, establish a connection between the claim and
the forum. If advertising sufficed to create a connection with a forum, commercial organ-
izations of a certain size could be sued in courts everywhere and anywhere in the world.
The courts of a victim’s place of residence would possess an almost universal jurisdiction
over diverse and vast classes of consumer claims.
[115] The motion judge and the Court of Appeal concluded, however, that a sufficient
connection between the claim and the province arose out of the contractual relationship
created between Mr. Berg and Club Resorts through the defendant Denis. Mr. Denis, who
operated a specialized travel agency known as Sport au Soleil, had an agreement with
Club Resorts under which he found tennis and squash professionals and sent them to
Club Resorts hotels. In exchange for bed and board at a resort, each professional would
give a few hours of instruction to guests of the hotel during his or her stay. It appears that
Mr. Denis received some form of compensation from Club Resorts.
[116] I find no reviewable error in the findings that Mr. Denis had the authority to
represent Club Resorts and that a contract existed under which Mr. Berg was to provide
services to Club Resorts. The benefit of this contract, accommodation at the resort, was
extended to Ms. Van Breda, who was injured while there in the context of Mr. Berg’s
performance of his contractual obligation. Deference is owed to the motion judge’s find-
ings. No palpable and overriding error has been established. A contract was entered into
in Ontario and a relationship was thus created in Ontario between Mr. Berg, Club Resorts
and Ms. Van Breda, who was brought within the scope of this relationship by the terms
of the contract.
[117] The existence of a contract made in Ontario that is connected with the litigation
is a presumptive connecting factor that, on its face, entitles the courts of Ontario to assume
jurisdiction in this case. The events that gave rise to the claim flowed from the relationship
created by the contract. Club Resorts has failed to rebut the presumption of jurisdiction
that arises where this factor applies. On this basis, I would uphold the Court of Appeal’s
conclusion that there was a sufficient connection between the Ontario court and the
subject matter of the litigation.
[118] Whether the Superior Court of Justice should have declined jurisdiction on the
basis of the doctrine of forum non conveniens remains to be determined. Club Resorts
had the burden of showing that a Cuban court would clearly be a more appropriate forum.
I recognize that a sufficient connection exists between Cuba and the subject matter of the
litigation to support an action there. The accident happened on a Cuban beach, at a hotel
managed by Club Resorts. The initial injury was suffered there. Some of the potential
defendants reside in Cuba. However, other issues related to fairness to the parties and to
the efficient disposition of the claim must be considered. A trial held in Cuba would
present serious challenges to the parties. There may be problems with witnesses, concerns
about the application of local procedures, and expenses linked to litigating there. All
things considered, the burden on the plaintiffs clearly would be far heavier if they were
required to bring their action in Cuba. They would face substantial additional expenses
and would be at a clear disadvantage relative to the defendants. They might also suffer a
loss of juridical advantage. But on this point the evidence is far from clear and satisfactory.
In the end, the appellant has not shown that a Cuban court would clearly be a more
appropriate forum. I agree that the motion judge made no reviewable error in deciding
not to decline to exercise his jurisdiction, and I would affirm the Court of Appeal’s judg-
ment dismissing the appeal from that decision.
A. Jurisdiction-Selecting and Arbitration Clauses

Parties to a contract often agree at the time of contracting on the applicable law (a choice of
law clause) and on the forum for resolution of disputes between them (a jurisdiction-
selecting clause). There may also be an agreement to use arbitration instead of or before
litigation to resolve disputes (an arbitration clause). Arbitration clauses are governed by
statutes.
In the not-too-distant past, the common law held that jurisdiction-selecting clauses were
void. It was considered contrary to public policy to oust the jurisdiction of the courts. How-
ever, public policies change over time. Public policy generally now favours such clauses. In
consequence, the common law now gives great, but not absolute, deference to such agree-
ments. By statute, the common law deference may, of course, be made absolute or
eliminated.
There are always critical issues concerning the validity and the interpretation of jurisdiction-
selecting and arbitration clauses that must be resolved before the court can exercise its
discretion, but those are matters of substantive contract law. Nevertheless, they are raised in
some of the cases set out below.
The Supreme Court of Canada’s decision in ZI Pompey Industrie, below, explains and justi-
fies the common law approach. Though not unambiguously, that approach was confirmed
in Momentous.ca. Saskatchewan and British Columbia have wrestled with the problem of
integrating the common law approach to jurisdiction-selecting clauses into the CJPTA and,
although they follow different routes, both provinces follow ZI Pompey Industrie.
1. Jurisdiction-Selecting Clauses: The Common Law Rule
ZI Pompey Industrie v ECU-Line NV

2003 SCC 27, [2003] 1 SCR 450, 224 DLR (4th) 577
BASTARACHE J:
[1] The appellant submits that the appropriate test on a motion for a stay of proceed-
ings to uphold a forum selection clause in a bill of lading is the “strong cause” test, as set
out by Brandon J in The “Eleftheria”, [1969] 1 Lloyd’s Rep. 237 (Adm. Div.). The respond-
ents, however, contend that the Federal Court of Appeal was correct in applying the tri-
partite test for interlocutory injunctions established in American Cyanamid Co. v. Ethicon
Ltd., [1975] 1 All ER 504 (HL). In my view, there is no legal or policy justification for
setting aside the “strong cause” test in the context of a stay of proceedings to uphold a
forum selection clause in a bill of lading. The dispute in this case arises under or in con-
nection with the bill of lading. Its broad, unambiguous and unqualified forum selection
clause was clearly intended to cover the dispute that gave rise to this appeal.
I. Facts
[2] The respondent Polyfibron Technologies Inc. purchased a photo processor and
four “sub-assemblies” located in France from the respondent Z.I. Pompey Industrie for
resale to its customer, the respondent Ellehammer Packaging Inc. The cargo was to be
delivered directly to Ellehammer in Seattle, Washington. Polyfibron retained the services
of the respondent John S. James Co., a freight forwarder, to arrange for the importation
of the cargo. John S. James Co., in turn, retained the services of the respondent Société
lyonnaise de messageries nationales (“S.L.M.N. Shipping”), which made arrangements
with ECU-Line France, a division of the appellant ECU-Line N.V., a Belgian company,
for carriage of the cargo by sea.
[3] The respondent John S. James Co. was aware that the cargo could not be trans-
ported by rail without there being a significant risk of it sustaining damage and communi-
cated this fact to the respondent S.L.M.N. Shipping.
[4] Under a clean on-board bill of lading executed at Lyon, France on January 23,
1997, the appellant was to carry the cargo from Antwerp, Belgium, to Seattle. The bill of
lading designates John S. James Co. as the “consignee,” Antwerp as the “port of loading,”
and Seattle as the “port of discharge.” It bears the following forum selection clause:
The contract evidenced by or contained in this bill of Lading is governed by the law of Bel-
gium, and any claim or dispute arising hereunder or in connection herewith shall be deter-
mined by the courts in Antwerp and no other Courts.
The back of the bill of lading contains, among other provisions, the following clause:
12. METHODS AND ROUTE OF TRANSPORTATION
(1) The Carrier may ant [sic] any time and without notice to the Merchant: use any means
of transport or storage whatsoever; load or carry the Goods on any vessel whether named
on the front hereof or not; transfer the Goods from one conveyance to another including
transshipping or carrying the same on another vessel than that named on the front hereof
or by any other means of transport whatsoever; at any place unpack and remove Goods
which have been stuffed in or on a Container and forward the same in any manner whatso-
ever; proceed at any speed and by any route in his discretion (whether or not the nearest or
most or customary or advertised route) and proceed to or stay at any place whatsoever once
or more often and in any order; load or unload the Goods from any conveyance at any place
(whether or not the place is a port named on the front hereof as the intended Port of Loading
or intended Port of Discharge); …
(2) The liberties set out in (1) above be [sic] invoked by the Carrier for any purposes
whatsoever whether or not connected with the Carriage of the Goods. Anything done
accordance [sic] with (1) above or any delay arising therfrom [sic] shall be deemed to be
within the contractual Carriage and shall not be a deviation or whatsoever nature or degree.
[5] The appellant transported the cargo from Antwerp to Montréal, where it was
unloaded. From there the cargo was carried by train to Seattle. The respondents filed an
action for damages of $60,761.74 in the Federal Court of Canada, alleging that the cargo
was damaged while in transit by rail. The appellant denied the cargo had been damaged,
arguing in the alternative that any damage had been caused by the respondents, third
parties, or events for which it was not responsible. The appellant also brought a motion
seeking a stay of proceedings on the basis that the bill of lading required disputes to be
determined exclusively by the courts of Antwerp.
II. Relevant Statutory Provisions

[6] The following statutory provisions are central to this appeal:
Federal Court Act, RSC 1985, c. F-7
50(1) The Court may, in its discretion, stay proceedings in any cause or matter,
(a) on the ground that the claim is being proceeded with in another court or juris-
diction; or
(b) where for any other reason it is in the interest of justice that the proceedings be
stayed.
Marine Liability Act, SC 2001, c. 6

46(1) If a contract for the carriage of goods by water to which the Hamburg Rules do
not apply provides for the adjudication or arbitration of claims arising under the contract in
a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court
or arbitral tribunal in Canada that would be competent to determine the claim if the contract
had referred the claim to Canada, where
(a) the actual port of loading or discharge, or the intended port of loading or dis-
charge under the contract, is in Canada;
(b) the person against whom the claim is made resides or has a place of business,
branch or agency in Canada; or
(c) the contract was made in Canada.
III. Judicial History

A. Federal Court of Canada, Trial Division (1999), 179 FTR 254
[7] The appellant sought a stay of proceedings before the Federal Court, pursuant to
s. 50 of the Federal Court Act, arguing that the courts of Antwerp were the proper juris-
diction to deal with any disputes arising from the bill of lading. The prothonotary held
that the appellant had moved for a stay within reasonable time given the implementation
of new court rules and had therefore not attorned to its jurisdiction. The prothonotary
accepted and applied the “strong cause” test as set out in the The “Eleftheria” characterizing
its finding in the following way, at paras. 4-5:
… I accept that ECU-Line prefers to litigate in a familiar jurisdiction and does not bring up
the Antwerp jurisdiction merely to seek procedural advantage. Other factors favouring the
upholding of the jurisdiction clause include reasonable connections with Belgium, Belgian
and French witnesses, that any time bar which might preclude the plaintiffs from bringing
their case in Antwerp has been waived, that no security has been posted and that enforcement
of a Belgian judgment against the carrier, a Belgian company, should present no particular
difficulties.
I accept, from the Plaintiffs’ point of view, that there will be Canadian and American
witnesses, including from the American east-coast freight forwarder through whom the
Plaintiff, Polyfibron Technologies Inc., arranged the carriage. Certainly the Tribunal of
Commerce in [Antwerp], which would decide the case under the jurisdiction clause, con-
ducts its proceedings in Flemish and decides cases on the basis of documents and statements,
a procedure precluding witnesses and cross-examination. There may also be considerably
more delay in most instances than in the Federal Court and all the more so in the case of an
appeal. There are also some lesser factors which favour litigation in Vancouver.
The prothonotary concluded, at para. 5, that the factors raised by the respondents, while
“substantial,” were “just short [in this instance] of the strong case” which, by The “Elef
theria”, the respondents had to present in order to override the forum selection clause.
[8] However, the prothonotary added that the respondents had presented a persuasive
case that the bill of lading had come to an end in Montréal. For that reason, there was no
forum selection clause to apply to the dispute. Notwithstanding clause 12 of the bill of
lading, the prothonotary, relying on Professor W. Tetley’s Marine Cargo Claims (3rd ed.
1988), accepted the presumption that a serious and willful breach or deviation of a con-
tract of carriage may bring into question exclusion or limitation clauses in the contract.
The prothonotary’s response to the appellant’s contention that issues of fundamental
breach or deviation should be determined on the merits by the trial judge was the follow-
ing, at para. 8:
The answer to this is not complex. An interim injunction, obtained on an interlocutory
application, which requires a testing of the waters by looking at the strength of the case, the
harm being caused and the balance of convenience, is analogous to denial of a stay of the
basis of a strong case that the jurisdiction clause is just not applicable. The interim injunction
does not handicap the trial judge, nor should the denial of a stay on the basis that the juris-
diction clause is in all likelihood not available. Any prejudice to ECU-Line in having to liti-
gate in Canada can be compensated by costs.
The prothonotary stated that it was common knowledge that rail carriage is usually
accompanied by vibration, bumps and jolts, though considered this to be immaterial to
the present case in which the intent to deviate was the sole issue. The prothonotary
concluded that the appellant’s deviation from the bill of lading was both unreasonable
and voluntary. Relying on Captain v. Far Eastern SS. Co. (1978), 7 BCLR 279 (SC), the
prothonotary concluded that there was no contract at the time the appellant discharged
the cargo in Montréal and thus no forum selection clause upon which it could rely.
[9] The motion for a stay of proceedings to uphold the forum selection clause was
therefore denied.
B. Federal Court of Canada, Trial Division (1999), 182 FTR 112

[10] The court concluded that the prothonotary was obliged to take into account all
the circumstances of the case in determining whether the respondent had demonstrated
a “strong cause” in favour of denying a stay, pursuant to the test set out in The “Eleftheria”,
an inquiry that did not preclude him from concluding that the bill of lading ended in
Montréal and that its forum selection clause did not apply thereafter. The court added
that in any event the appellant would have the opportunity to raise its arguments regarding
the existence of the bill of lading and its forum selection clause before a trial judge.
[11] The court dismissed with costs the motion to set aside the order of the prothonotary.
C. Federal Court of Appeal (2001), 268 NR 364

[12] The Court of Appeal held that the test for reviewing decisions of a prothonotary
is whether the prothonotary’s exercise of discretion was clearly wrong and that the test
for reviewing the exercise of discretion of a motions judge is whether sufficient weight
was given to all relevant considerations.
[13] The Court of Appeal concluded that The “Eleftheria” did not govern the case …
[and that]
[15] … the proper test to apply in stay applications is the tripartite test employed for
the purposes of obtaining interlocutory injunctions.
[16] The Court of Appeal dismissed the appeal with costs.
IV. Issues
[17]
1. What is the proper test on a motion brought for a stay of proceedings to enforce
the forum selection clause in a bill of lading?
2. Does that test contemplate an inquiry into whether there was a fundamental
breach or deviation, or should such an inquiry be left to the decision maker in the
agreed forum?
V. Analysis
[18] Discretionary orders of prothonotaries ought to be disturbed by a motions judge
only where (a) they are clearly wrong, in the sense that the exercise of discretion was based
upon a wrong principle or a misapprehension of the facts, or (b) in making them, the
prothonotary improperly exercised his or her discretion on a question vital to the final
issue of the case: Canada v. Aqua-Gem Investments Ltd., [1993] 2 FC 425 (CA), per Mac-
Guigan JA, at pp. 462-63. An appellate court may interfere with the decision of a motions
judge where the motions judge had no grounds to interfere with the prothonotary’s
decision or, in the event such grounds existed, if the decision of the motions judge was
arrived at on a wrong basis or was plainly wrong: Jian Sheng Co. v. Great Tempo S.A.,
[1998] 3 FC 418 (CA), per Décary JA, at pp. 427-28, leave to appeal refused, [1998] 3 SCR
vi. For the reasons below, I conclude that the decisions of the prothonotary, the motions
judge and the Court of Appeal are clearly wrong.
A. Stays of Proceedings to Enforce a Forum Selection Clause

[19] Pursuant to s. 50(1) of the Federal Court Act, the court has the discretion to stay
proceedings in any cause or matter on the ground that the claim is proceeding in another
court or jurisdiction, or where, for any other reason, it is in the interest of justice that the
proceedings be stayed. For some time, the exercise of this judicial discretion has been
governed by the “strong cause” test when a party brings a motion for a stay of proceedings
to enforce a forum selection clause in a bill of lading. Brandon J set out the test as follows
in The “Eleftheria”, at p. 242:
(1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign
Court, and the defendants apply for a stay, the English Court, assuming the claim to be
otherwise within the jurisdiction, is not bound to grant a stay but has a discretion whether
to do so or not. (2) The discretion should be exercised by granting a stay unless strong cause
for not doing so is shown. (3) The burden of proving such strong cause is on the plaintiffs.
(4) In exercising its discretion the Court should take into account all the circumstances of
the particular case. (5) In particular, but without prejudice to (4), the following matters,
where they arise, may be properly regarded: (a) In what country the evidence on the issues
of fact is situated, or more readily available, and the effect of that on the relative convenience
and expense of trial as between the English and foreign Courts. (b) Whether the law of the
foreign Court applies and, if so, whether it differs from English law in any material respects.
(c) With what country either party is connected, and how closely. (d) Whether the defendants
genuinely desire trial in the foreign country, or are only seeking procedural advantages.
(e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because
they would (i) be deprived of security for that claim; (ii) be unable to enforce any judgment
obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial,
religious or other reasons be unlikely to get a fair trial.
[20] Forum selection clauses are common components of international commercial

transactions, and are particularly common in bills of lading. They have, in short, “been
applied for ages in the industry and by the courts”: Décary JA in Jian Sheng, supra, at para.
7. These clauses are generally to be encouraged by the courts as they create certainty and
security in transaction, derivatives of order and fairness, which are critical components
of private international law: La Forest J in Morguard Investments Ltd. v. De Savoye, [1990]
3 SCR 1077, at pp. 1096-97; Holt Cargo Systems Inc. v. ABC Containerline N.V. (Trustees
of), [2001] 3 SCR 907, 2001 SCC 90, at paras. 71-72. The “strong cause” test remains rel-
evant and effective and no social, moral or economic changes justify the departure
advanced by the Court of Appeal. In the context of international commerce, order and
fairness have been achieved at least in part by application of the “strong cause” test. This
test rightly imposes the burden on the plaintiff to satisfy the court that there is good reason
it should not be bound by the forum selection clause. It is essential that courts give full
weight to the desirability of holding contracting parties to their agreements. There is no
reason to consider forum selection clauses to be non-responsibility clauses in disguise.
In any event, the “strong cause” test provides sufficient leeway for judges to take improper
motives into consideration in relevant cases and prevent defendants from relying on
forum selection clauses to gain an unfair procedural advantage.
[21] There is a similarity between the factors which are to be taken into account when
considering an application for a stay based on a forum selection clause and those factors
which are weighed by a court considering whether to stay proceedings in “ordinary” cases
applying the forum non conveniens doctrine: E. Peel in “Exclusive jurisdiction agreements:
purity and pragmatism in the conflict of laws,” [1998] LMCLQ 182, at pp. 189-90. The
latter inquiry is well settled in Canada: Amchem Products Inc. v. British Columbia (Workers’
Compensation Board), [1993] 1 SCR 897. In the latter inquiry, the burden is normally on
the defendant to show why a stay should be granted, but the presence of a forum selection
clause in the former is, in my view, sufficiently important to warrant a different test, one
where the starting point is that parties should be held to their bargain, and where the
plaintiff has the burden of showing why a stay should not be granted. I am not convinced
that a unified approach to forum non conveniens, where a choice of jurisdiction clause
constitutes but one factor to be considered, is preferable. As Peel, supra, notes, at p. 190,
I fear that such an approach would not
ensure that full weight is given to the jurisdiction clause since not only should the clause
itself be taken into account, but also the effect which it has on the factors which are relevant
to the determination of the natural forum. Factors which may otherwise be decisive may be
less so if one takes into account that the parties agreed in advance to a hearing in a particular
forum and must be deemed to have done so fully aware of the consequences which that
might have on, for example, the transportation of witnesses and evidence, or compliance
with foreign procedure etc.
In my view, a separate approach to applications for a stay of proceedings involving forum

selection clauses in bills of lading ensures that these considerations are properly taken
into account and that the parties’ agreement is given effect in all but exceptional circum-
stances. See also M.P. Michell, “Forum Selection Clauses and Fundamental Breach: Z.I.
Pompey Industrie v. ECU-Line N.V., The Canmar Fortune” (2002), 36 Can. Bus. LJ 453, at
pp. 471-72.
B. The Inappropriateness of the Tripartite Test

[22] The respondents adopted the Court of Appeal’s holding in favour of extending
the tripartite test for interlocutory injunction to motions for a stay of proceedings to
enforce a forum selection clause in a bill of lading. The tripartite test was set out as follows
by this Court in RJR—MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311,
at p. 334:
First, a preliminary assessment must be made of the merits of the case to ensure that there
is a serious question to be tried. Secondly, it must be determined whether the applicant would
suffer irreparable harm if the application were refused. Finally, an assessment must be made
as to which of the parties would suffer greater harm from the granting or refusal of the rem-
edy pending a decision on the merits.
In support of the move to the tripartite test, the Court of Appeal quoted, at para. 29, with
approval this Court’s statement in [Manitoba Attorney General v] Metropolitan Stores
[[1987] 1 SCR 110], at p. 127:
A stay of proceedings and an interlocutory injunction are remedies of the same nature. In
the absence of a different test prescribed by statute, they have sufficient characteristics in
common to be governed by the same rules and the courts have rightly tended to apply to the
granting of interlocutory stay the principles which they follow with respect to interlocutory
injunctions.
While a stay of proceedings to enforce a forum selection clause may be of the same nature
as an interlocutory injunction, I must respectfully disagree with the conclusion of the
Court of Appeal.
[23] The conclusion of the Court of Appeal is not supported by this Court’s decision
in Metropolitan Stores. The two main issues in that case were whether the Court of Appeal
erred in failing to recognize a presumption of constitutional validity where legislation is
challenged under the Charter, and what principles govern the exercise of a Superior Court
judge’s discretionary power to order a stay until the constitutionality of impugned legis-
lation has been determined. The context of a constitutional challenge has little in common
with the case at bar. Indeed, Metropolitan Stores did not involve forum selection clauses,
and the underlying desirability of holding contracting parties to their bargain was not at
issue. That case did not concern private international law; consequently, considerations
of comity, uniformity of law, forum shopping and related issues were neither canvassed
nor addressed by the Court.
[24] As recently as 1998, Décary JA, for a unanimous Federal Court of Appeal in Jian
Sheng, confirmed at para. 10 the appropriateness of the “strong cause” test in Canada, a
case in which the issue was whether the forum selection clause in a bill of lading was void
for uncertainty:
Where, in admiralty matters before this Court, a defendant applies for a stay pursuant to
section 50 of the Federal Court Act … on the basis of a jurisdiction clause found in a bill of
lading, the defendant has the burden of persuading the Court that the conditions of applica-
tion of the clause have been met. Once the Court is satisfied that the clause applies, the
burden of proof then shifts to the plaintiff to show sufficiently strong reasons to support the
conclusion that it would not be reasonable or just in the circumstances to keep the plaintiff
to the terms of the contract … . These “strong reasons” have been summarized in the often-
quoted reasons of Brandon J (as he then was) in The “Eleftheria”. …
In Jian Sheng, the forum selection clause contained in the bill of lading required the
defendant to show it was the carrier and what was its principal place of business. Jian
Sheng does not, as the Court of Appeal held in the case at bar, undermine in any way the
“strong cause” test. Indeed, the tripartite test adopted by the Court of Appeal in this case
constitutes a significant and unjustified departure from the jurisprudence not only of the
Federal Court, but also of provincial courts, and those of other jurisdictions. See for
instance: The “Seapearl” v. Seven Seas Dry Cargo Shipping Corp., [1983] 2 FC 161 (CA),
per Pratte JA, at pp. 176-77, and per Lalande DJ, at p. 180; Anraj Fish Products Industries
Ltd. v. Hyundai Merchant Marine Co. (2000), 262 NR 270 (FCA), at para. 5; Sarabia v.
“Oceanic Mindoro” (The) (1996), 26 BCLR (3d) 143 (CA), at paras. 37-38, leave to appeal
refused, [1997] 2 SCR xiv; Maritime Telegraph and Telephone Co. v. Pre Print Inc. (1996),
131 DLR (4th) 471 (NSCA), at p. 483; Morrison v. Society of Lloyd’s (2000), 224 NBR (2d)
1 (CA), at para. 14, leaves to appeal refused, [2000] 2 SCR viii and xi; Trendtex Trading
Corp. v. Credit Suisse, [1982] AC 679 (HL); The Bremen v. Zapata Off-Shore Co., 407 US
1 (1972), at p. 15; Advanced Cardiovascular Systems Inc. v. Universal Specialties Ltd., [1997]
1 NZLR 186 (CA), at p. 190.
[25] There are also compelling public policy reasons in favour of upholding the “strong
cause” test. If the tripartite test were employed to deal with situations like the case at bar,
most forum selection clauses would be rendered unenforceable, creating commercial
uncertainty by unduly minimizing the importance of contractual undertakings. Instead
of requiring a plaintiff to demonstrate a “strong cause” to not enforce a forum selection
clause, the burden would be on the applicant to establish the elements of the tripartite
test. The “strong cause” test rightly places the onus on the plaintiff who commences suit
contrary to the terms of a forum selection clause.
[26] Applying the tripartite test to a situation of this nature is also problematic because
the first part of the test requires the court to evaluate the likelihood of success on the
merits of the case. This part of the test is designed to allow a motions judge the oppor-
tunity to deal with legal issues in preliminary proceedings without prejudice to the final
adjudication of their merits. In the case of motions to stay proceedings based on a forum
selection clause in a bill of lading, such a process would be impossible because there is
normally no determination on the merits. Either the stay will be granted, and the proceed-
ings in Canada will come to an end, or the stay will be denied and the defendant will have
to defend the case on the merits in Canada, losing the benefit of the jurisdiction clause.
For this reason the rule governing such stay applications cannot be based on a test that
relies on the likelihood of success on the merits.
[27] The test propounded by the Court of Appeal would make it difficult to establish
harm in the context of a stay application based on a forum selection clause. Indeed, I can
think of no instance where a defendant would suffer irreparable harm by being required
to defend a lawsuit in a Canadian court. I am not satisfied that litigation costs dispropor-
tionate to the amount of the claim would constitute irreparable harm, as the respondents
have argued. The “strong cause” test reflects the desirability that parties honour their
contractual commitments and is consistent with the principles of order and fairness at
the heart of private international law, as well as those of certainty and security of trans-
action at the heart of international commercial transactions. I see no reason to depart
from the traditional approach for a stay of proceedings when the applicability of a forum
selection clause is at issue. The Court of Appeal in effect read the choice of jurisdiction
clause out of the contract. This approach is, in my view, untenable.
[28] The respondents submit we ought to accord little weight to the forum selection
clause in the bill of lading because bills of lading are, as a general rule, contracts of adhe-
sion, devised unilaterally by the appellant. This submission is without merit despite the
fact that bills of lading are often issued on pre-printed forms. See Carnival Cruise Lines,
Inc. v. Shute, 499 US 585 (1991), at pp. 593-94.
[29] Bills of lading are typically entered into by sophisticated parties familiar with the
negotiation of maritime shipping transactions who should, in normal circumstances, be
held to their bargain. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 US 528
(1995). The parties in this appeal are corporations with significant experience in inter-
national maritime commerce. The respondents were aware of industry practices and could
have reasonably expected that the bill of lading would contain a forum selection clause.
A forum selection clause could very well have been negotiated with the appellant, in light
of the respondent John S. James Co.’s insistence that S.L.M.N. Shipping transport the cargo
solely by sea. There is no evidence that this bill of lading is the result of grossly uneven
bargaining power that would invalidate the forum selection clause contained therein.
C. Fundamental Breach and Deviation

[30] Having concluded that the “strong cause” test governs whether to grant a stay in
the context of a bill of lading with a forum selection clause, I turn to whether, in taking
into account all the circumstances of the particular case, the Court should consider issues
arising under the contract. The respondents submit the Court should do just that, relying
in part on the following passage from Professor Tetley in Marine Cargo Claims, supra, at
p. 99:
When however the breach is so serious, usually the result of a fraudulent or wilful act, the
courts have questioned whether the carrier may rely on the terms of the contract or the law,
and in particular, whether the carrier may rely on the exclusion or limitation clauses in the
contract and the law because he has seemingly placed himself outside of the contract and
the law.
In my view, the prothonotary erred in law when he determined the forum selection clause
was void as a result of the alleged deviation stemming from the discharge of the cargo in
Montréal.
[31] Issues respecting an alleged fundamental breach of contract or deviation there-

from should generally be determined under the law and by the court chosen by the parties
in the bill of lading. The “strong cause” test, once it is determined that the bill of lading
otherwise binds the parties (for instance, that the bill of lading as it relates to jurisdiction
does not offend public policy, was not the product of fraud or of grossly uneven bargaining
positions), constitutes an inquiry into questions such as the convenience of the parties,
fairness between the parties and the interests of justice, not of the substantive legal issues
underlying the dispute. See Mackender v. Feldia A.G., [1966] 3 All ER 847 (CA), per Lord
Denning, at pp. 849-50, and per Lord Diplock, at p. 852. Put differently, a court, in the
context of an application for a stay to uphold a forum selection clause in a bill of lading,
must not delve into whether one party has deviated from, or fundamentally breached an
otherwise validly formed contract. Such inquiries would render forum selection clauses
illusory since most disputes will involve allegations which, if proved, will make the agree-
ment terminable or voidable by the aggrieved party. Moreover, while the choice of forum
for the determination of the existence of the agreement would be made without reference
to the forum selection clause in the contract, if the agreement were found to remain intact,
resort to the said clause would presumably be necessary to decide the appropriate forum
in which to settle the rights of the parties under the agreement.
[32] The position adopted by the Court of Appeal would remove many disputes from
the reach of a widely framed forum selection clause by the mere allegation of various
types of wrongful conduct. In my view, where, as here, the parties agree that claims or
disputes arising under or in connection with a bill of lading are to “be determined by the
courts in Antwerp and no other Courts,” a proceeding in which one party contends that
the other party deviated from the agreement such as to give the former the right to ter-
minate or void the contract remains a proceeding in respect of a claim or dispute arising
under or in connection with the bill of lading: Fairfield v. Low (1990), 71 OR (2d) 599
(HC), at pp. 605-8; Ash v. Lloyd’s Corp. (1992), 9 OR (3d) 755 (CA), at p. 758, leave to
appeal refused, [1992] 3 SCR v; Morrison, supra, at paras. 13 and 19. See also Drew Brown
Ltd. v. The “Orient Trader”, [1974] SCR 1286, per Ritchie J, at p. 1288, and per Laskin J, at
p. 1318, where an alleged deviation was found not to displace an otherwise valid choice
of law clause.
[33] The conclusion that allegations of deviation or fundamental breach are matters
arising under the contract that should not be considered in determining whether to give
effect to a forum selection clause is supported by the construction approach to funda-
mental breach considered by our Court in Guarantee Co. of North America v. Gordon
Capital Corp., [1999] 3 SCR 423, a case concerning the use of fundamental breach in the
context of time limitation provisions. Discussing Hunter Engineering Co. v. Syncrude
Canada Ltd., [1989] 1 SCR 426 (a case involving fundamental breach in the context of
clauses excluding liability), the Court said this, at para. 52:
[W]hether fundamental breach prevents the breaching party from continuing to rely on an
exclusion clause is a matter of construction rather than a rule of law. The only limitation
placed upon enforcing the contract as written in the event of a fundamental breach would
be to refuse to enforce an exclusion of liability in circumstances where to do so would be
unconscionable, according to Dickson CJ, or unfair, unreasonable or otherwise contrary to
public policy, according to Wilson J.
In my view, the policy rationale in support of the construction approach applied to exclu-
sion and time limitation clauses is equally applicable to forum selection clauses in bills
of lading.
[34] In the case at bar, it is unnecessary to determine whether there has been a fun-
damental breach or deviation because the forum selection clause clearly covers such a
dispute. The language of the clause is unambiguous and not subject to any qualifications,
and the parties’ bargain was not unconscionable or unreasonable. The clause becomes
relevant precisely in disputes such as this one, as it regulates the way in which liability for
deviation or breach of contract is to be established.
[35] This approach is sound for policy reasons. Stay applications in the Federal Court
should be brought quickly after commencement of the suit and consequently, the parties
will have limited knowledge and information regarding the strength or weakness of their
opponent’s case. Issues regarding whether there has been, for instance, an unreasonable
deviation raise complicated questions of fact that require a consideration of all the cir-
cumstances giving rise to the alleged deviation.
[36] Given my conclusions, I do not consider it necessary to address the issue of the
relationship between deviation and fundamental breach. Suffice it to say that, in this case,
either allegation concerns a dispute arising under or in connection with the bill of lading.
There is no need to consider the applicability of the doctrine of separability.
D. Section 46 of the Marine Liability Act

[37] Section 46(1) of the Marine Liability Act, which entered into force on August 8,
2001, has the effect of removing from the Federal Court its discretion under s. 50 of the
Federal Court Act to stay proceedings because of a forum selection clause where the
requirements of s. 46(1)(a), (b), or (c) are met. This includes where the actual port of
loading or discharge is in Canada. In this case, there would be no question that the Federal
Court is an appropriate forum to hear the respondents’ claim but for the fact that s. 46
does not apply to judicial proceedings commenced prior to its coming into force: Incre-
mona-Salerno Marmi Affini Siciliani (I.S.M.A.S.) s.n.c. v. Ship Castor (2002), 297 NR 151,
2002 FCA 479, at paras. 13-24. Section 46 of the Marine Liability Act is therefore irrelevant
in this appeal.
[38] Indeed, s. 46(1) would appear to establish that, in select circumstances, Parlia-
ment has deemed it appropriate to limit the scope of forum selection clauses by facilitating
the litigation in Canada of claims related to the carriage of goods by water having a mini-
mum level of connection to this country. Such a legislative development does not, how-
ever, provide support for the fundamental jurisprudential shift made by the Court of
Appeal in the case at bar. To the contrary, s. 46(1) indicates Parliament’s intent to broaden
the jurisdiction of the Federal Court only in very particular instances that can easily be
ascertained by a prothonotary called upon to grant a stay of proceedings pursuant to the
forum selection clause of a bill of lading. Section 46(1) in no way mandates a prothonotary
to consider the merits of the case, an approach in line with the general objectives of
certainty and efficiency, which underlie this area of the law.
E. Application of the Law to the Facts of This Case

[39] I am of the view that, in the absence of applicable legislation, for instance s. 46(1)
of the Marine Liability Act, the proper test for a stay of proceedings pursuant to s. 50 of
the Federal Court Act to enforce a forum selection clause in a bill of lading remains as
stated in The “Eleftheria”, which I restate in the following way. Once the court is satisfied
that a validly concluded bill of lading otherwise binds the parties, the court must grant
the stay unless the plaintiff can show sufficiently strong reasons to support the conclusion
that it would not be reasonable or just in the circumstances to require the plaintiff to
adhere to the terms of the clause. In exercising its discretion, the court should take into
account all of the circumstances of the particular case. See The “Eleftheria”, at p. 242;
Amchem, at pp. 915-22; Holt Cargo, at para. 91. Disputes arising under or in connection
with a contract may not be regarded by a court in determining whether “strong cause”
has been shown that a stay should not be granted.
[40] In this case, the bill of lading and its forum selection clause have been entered
into and are otherwise binding on the parties. The prothonotary began by properly apply-
ing the “strong cause” test. In so doing the prothonotary weighed the fact that the appellant
prefers to litigate in a familiar jurisdiction and does not bring up the jurisdiction clause
merely to seek a procedural advantage; there are reasonable connections with Belgium;
there are Belgian and French witnesses; any time bar which may preclude the respondents
from bringing their case in Belgium has been waived; no security has been posted; and
the enforcement of a Belgian judgment against the appellant should present no particular
difficulties. The prothonotary also accepted the respondents’ arguments that there will be
Canadian and American witnesses in these proceedings; the Tribunal de commerce in
Antwerp conducts its proceedings in Flemish and decides cases on the basis of documents
and statements, a procedure precluding witnesses and cross-examination; and, there may
be more delay in Belgium than in Canada, especially if there is an appeal. The prothono-
tary concluded that the factors in favour of denying a stay, while substantial, were just
short of the “strong cause” test which the respondents had the burden of meeting. I see
no reason why the prothonotary’s conclusion on this point should be set aside. However,
the prothonotary erred by subsequently turning his attention to a dispute arising under
the bill of lading and in effect extending the tripartite test for interlocutory injunctions
to motions for a stay of proceedings involving forum selection clauses contained in bills
of lading.
VI. Disposition
[41] The prothonotary, to the extent he applied the “tripartite test,” erred in law, as
did the Court of Appeal in concluding that the appropriate test for a stay of proceedings
involving a bill of lading with a forum selection clause was the “tripartite test” for inter-
locutory injunctions. The “strong cause” test does not contemplate an inquiry into the
question of establishing whether the surrounding contract is voidable. Such questions are
best left to the decision maker in the forum agreed upon.
[42] Accordingly, I would allow the appeal, overturn the judgments of the courts
below, and issue a stay of proceedings in favour of the appellant, with costs throughout
to the appellant.
Momentous.ca Corp v Canadian American Association of Baseball Ltd

2012 SCC 9, [2012] 1 SCR 359
THE COURT (McLachlin CJ and LeBel, Fish, Rothstein, Cromwell, Moldaver, and Kara-
katsanis JJ):
[1] Shortly after filing a statement of defence, the respondents Canadian American
Association of Professional Baseball Ltd., Inside the Park LLC, Greg Lockard, Dan
Moushon and Bruce Murdoch (the “Can-Am respondents”) moved under Rule
21.01(3)(a) of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to dismiss the
claim on the ground that Ontario courts had no jurisdiction because the appellants had
signed agreements providing that disputes would be arbitrated or litigated in North Caro-
lina. The motion judge dismissed the action against all the respondents on the basis of
these arbitration and forum selection clauses (2009 CanLII 65823 (Ont. S.C.J.)). The Court
of Appeal for Ontario upheld the decision (2010 ONCA 722, 103 O.R. (3d) 467).
[2] The parties to this appeal did not contest the finding of the Court of Appeal that
certain respondents had attorned to the jurisdiction, although the motion judge had found
that there had been no attornment. As a result, we do not comment on that issue. Nor
did the appellants suggest that the dispute falls outside the ambit of the choice of forum
or arbitration clauses to which they had agreed.
[3] At issue in this appeal is whether the Can-Am respondents could move under Rule
21.01(3)(a) to seek dismissal of the action based on the arbitration and forum selection
clauses in the agreements, notwithstanding the delivery of a statement of defence. The
appellants submit that a party that delivers a statement of defence on the merits is pre-
cluded from relying upon a forum selection clause, even where the statement of defence
explicitly seeks to enforce the clause. We disagree.
[4] The Ontario Rules of Civil Procedure provide two rules under which a party may
challenge whether an Ontario court can or should hear an action.
[5] Rule 17.06 permits a party who has been served with an originating process outside
Ontario to move for an order setting aside the service or staying the proceeding on the
grounds that service is not authorized by the Rules or that Ontario is not a convenient
forum for the hearing of the proceeding. This rule requires that the motion be brought
before the party delivers a defence, notice of intent to defend or notice of appearance.
[6] The Can-Am respondents did not proceed under Rule 17.06. They did not argue
that there was no real and substantial connection to Ontario or that there was a more
convenient forum.
[7] Rule 21.01(3)(a) permits a defendant to seek a stay or dismissal of the action on
the basis that the court has “no jurisdiction over the subject matter of the action.” Thus,
when another forum—an arbitration panel, a tribunal or another court—has the exclusive
jurisdiction to deal with the claim, the Ontario Superior Court of Justice will not take
jurisdiction, based upon agreement or statute.
[8] We agree with Laskin J.A. that the Can-Am respondents were entitled to bring a
motion under Rule 21.01(3)(a) to ask the court to dismiss the action because the parties
had agreed to arbitrate and litigate disputes in another forum. Although the motion must
be brought promptly, we agree with Laskin J.A. that there is nothing in Rule 21.01(3)(a)
that requires it to be brought before delivery of a statement of defence. Within the frame-
work provided by the Ontario Rules of Civil Procedure, a statement of defence that spe-
cifically pleads a foreign forum selection clause does not amount to consent that Ontario
assume jurisdiction so as to preclude consideration on the merits of whether to enforce

the clause.
[9] In Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, this
Court confirmed that, in the absence of specific legislation, the proper test in determining
whether to enforce a forum selection clause is discretionary in nature. It provides that
unless there is a “strong cause” as to why a domestic court should exercise jurisdiction,
order and fairness are better achieved when parties are held to their bargains.
[10] The appellants did not argue that there was any reason, apart from the delivery
of a statement of defence, for the court to determine that there was “strong cause” for
Ontario to displace the forum that the parties have agreed should resolve their disputes.
We agree with the Court of Appeal that the motion judge did not err in the exercise of
her discretion to dismiss the action under Rule 21.01(3)(a).
[11] With respect to the second issue, whether the claims against the respondents the
City of Ottawa and Mr. Wolff could be dismissed, we agree with the reasons of Laskin J.A.
[12] Accordingly, we would dismiss the appeal, with costs.
Hudye Farms Inc v Canadian Wheat Board

2011 SKCA 137
JACKSON JA (Ottenbreit and Herauf JJA concurring):

[1] This is an appeal from a decision of Sandomirsky J., declining territorial compe-
tence over the within action and transferring it to Manitoba, pursuant to The Court
Jurisdiction and Proceedings Transfer Act, S.S. 1997, c. C-41.1, (the “CJPTA”) (see: 2011
SKQB 29, [2011] 5 W.W.R. 506). For the reasons that follow, the appeal is dismissed.
[2] I will review the facts briefly only. They are fully set forth in the decision of San-
domirsky J.
[3] Hudye Farms Inc., Hudye Soil Services Inc. and Hudye Inc. sued the Canadian
Wheat Board (“CWB”) for breach of contract, breach of fiduciary duty and defamation.
The statement of claim alleges that CWB refused to fulfill its contractual obligations, and
breached its fiduciary obligations to Hudye Farms Inc. The statement of claim also alleges
that CWB spread misleading information about all three plaintiffs, regarding the sale of
an ineligible variety of wheat to farmers in the Yorkton area.
[4] The contract between Hudye Farms Inc. and CWB contains a forum selection
clause, which reads as follows:
GENERAL
8(c) This Agreement shall be governed and construed in accordance with the laws of the
Province of Manitoba. The courts of the Province of Manitoba shall have exclusive jurisdic-
tion in the case of any dispute.
Hudye Soil Services Inc. and Hudye Inc. are not parties to that contract and have no other
separate contractual relationship with CWB.
[5] After having been served with the above claim, CWB applied for two orders: (i) an
order, under Rule 99 of The Queen’s Bench Rules and s. 10 of the CJPTA, staying the actions
of all three companies in Saskatchewan on the basis of a forum selection clause contained
in its contract with Hudye Farms Inc.; and (ii) an order, pursuant to s. 12 of the CJPTA,
transferring the actions to Manitoba. The matter came on for hearing in the Queen’s Bench
chambers in Yorkton before Sandomirsky J.
[6] After referring to the relevant case law, including Z.I. Pompey Industrie v. ECU-Line
N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, and considering the matter in some detail, San-
domirsky J. concluded that “the courts are generally bound to hold the parties to their
contract, which includes their choice of law and forum” (at para. 41). Hudye Farms Inc.,
Hudye Soil Services Inc. and Hudye Inc. appeal from that decision.
[7] The Appellants submit that Sandomirsky J. erred in two ways. First, they submit
that the learned chambers judge was obliged first to determine whether Saskatchewan
has territorial competence, and, since Saskatchewan clearly does have territorial compe-
tence over the proceedings, that should have ended the matter. Second, they argue that
Sandomirsky J. erred by failing to find “strong cause” to overcome the effect of the exclu-
sive jurisdiction clause contained in the contract between Hudye Farms Inc. and CWB.
In relation to this second argument, the Appellants ask this Court to consider: (i) the
nature of the contract, being a contract of adhesion, and a lack of knowledge on the part
of Hudye Farms Inc. as to the forum selection clause; (ii) the fact that there are three
parties who are plaintiffs in this action: Hudye Farms Inc., Hudye Soil Services Inc. and
Hudye Inc.; and (iii) the fact that there are two causes of action, notably a claim for a
breach of fiduciary duty and a claim in defamation, which are not governed by a forum
selection clause. On these latter two points, the Appellants rely heavily on Hans v. Volvo
Trucks North America Inc., 2010 BCSC 1700.
[8] The Appellants are quite correct in this one respect. As a matter of theory, a ques-
tion as to the appropriate forum does not arise unless the territory, where an action has
been commenced, has territorial competence over the action. The validity and effect of a
forum selection clause arise as part of the determination of whether the territory should
decline territorial competence and not as part of the determination of whether the territory
has competence at all (see: Viroforce Systems Inc. v. R&D Capital Inc., 2011 BCCA 260,
336 D.L.R. (4th) 570 and Microcell Communications Inc. et al v. Frey et al, 2011 SKCA 136.
[9] A court considers whether to give effect to the forum selection clause as part of
the exercise of determining whether jurisdiction should be declined pursuant to s. 10 of
the CJPTA:
that a court of another state is a more appropriate forum in which to try the proceeding.
(2) A court, in deciding the question of whether it or a court outside Saskatchewan is
the more appropriate forum in which to try a proceeding, shall consider the circumstances
relevant to the proceeding, including:
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
[10] While there is no specific reference to a forum selection clause in s. 10, as the
Court held in Microcell, supra, Pompey continues to apply notwithstanding the enactment
of the CJPTA. In Pompey, the Supreme Court of Canada restated the “strong cause” test
in these terms:
[39] … [T]he court must grant the stay unless the plaintiff can show sufficiently strong
reasons to support the conclusion that it would not be reasonable or just in the circumstances
to require the plaintiff to adhere to the terms of the clause. In exercising its discretion, the
court should take into account all of the circumstances of the particular case.
[11] The effect of a valid forum selection clause must be considered in the context of
a consideration of the “fair and efficient working of the Canadian legal system as a whole”
(see s. 10(2)(f)), but the presence of a forum selection clause is not just one factor among
many contained in s. 10 (Microcell). The burden is initially on the plaintiff/respondent to
demonstrate strong cause not to enforce the forum selection clause. As part of the com-
mon law of Canada, great weight is given to the parties’ contractual choice of the appropri-
ate forum.
[12] When a defendant applies pursuant to the CJPTA for an order that the Court
decline competence over an action, the framework for analysis takes this general form:
1. Does the Province have territorial competence over the matter? If no, the action
cannot continue. It may be appropriate in a given case to bypass this issue and
proceed to the next step.
2. If the Province has territorial competence or assuming territorial competence, has
the defendant/applicant established that the forum selection clause is valid, clear
and enforceable and that it applies to a cause of action before the Court? If no, the
application fails.
3. If the forum selection clause is valid, clear and enforceable, and it applies to a
cause of action before the Court, has the plaintiff/respondent shown strong cause
why the Court should not give effect to the forum selection clause?
4. If the plaintiff/respondent has not shown strong cause why the Court should not
give effect to the forum selection clause, the Court should consider, according to
the application before it, whether it is appropriate to transfer the proceeding to
some other territory pursuant to Part III of the CJPTA.
If the answer to the third question is yes, it remains at least theoretically possible that the
defendant may be able to demonstrate some other basis for the Court to decline compe-
tence pursuant to s. 10 (see: Viroforce at para. 14).
[13] The decision to decline territorial competence, in the face of a forum selection
clause, is essentially a discretionary decision (see: Pompey, paras. 18-19, and Microcell at
para. 109). A chambers judge must evaluate and weigh all of the relevant circumstances
and decide where, on the balance beam of the law, the case rests. As a discretionary deci-
sion, it is reviewable according to the standard of review applicable to such decisions, i.e.,
error in principle or some other abuse of discretion.
[14] When applying the “strong cause” test, the Supreme Court of Canada in Pompey,
considered these factors, arising from the particular facts of the case before it, in support
of granting a stay: (i) the defendant preferred to litigate in a familiar jurisdiction and did
not raise the forum selection clause merely to seek a procedural advantage; (ii) the
presence of reasonable connections with Belgium; (iii) the fact of Belgian and French
witnesses; (iv) any time bar which may preclude the respondents from bringing their case
in Belgium had been waived; (v) no security had been posted; and (vi) the enforcement
of a Belgian judgment against the appellant should present no particular difficulties. In
opposition to those factors, Bastarache J. considered such matters as these: (i) Canadian
and American witnesses would be required to travel to Belgium; (ii) the Tribunal de
commerce in Antwerp conducts its proceedings in Flemish and decides cases on the basis
of documents and statements, a procedure precluding witnesses and cross-examination;
and (iii) there may be more delay in Belgium than in Canada, especially if there is an
appeal. Notwithstanding these countervailing considerations, Bastarache J. found no
reason why the prothonotary’s conclusion as to the absence of a strong cause should be
set aside.
[15] In this case, Sandomirsky J. did not determine, as part of his written reasons,
whether Saskatchewan has territorial competence over the action, but that is not in any
way fatal. He did not need to resolve this issue. In any event, it is clear that he assumed
Saskatchewan has territorial competence, which of course it has. The CWB is registered
to carry on business in Saskatchewan and carries on business here such that territorial
competence is established by reference to s. 4(d) and s. 6 of the CJPTA. Numerous addi-
tional factors also point to a real and substantial connection between the territory and
the case according to s. 4(e) of the CJPTA.
[16] In determining whether to decline territorial competence, in face of the forum
selection clause, Sandomirsky J. appropriately considered the factors put forward by the
Appellants and weighed them with the other factors, which support giving effect to the
forum selection clause. With respect to the nature of the contract, and the company’s
knowledge of its terms, Sandomirsky J. found that the “plaintiff group of companies are
reasonably experienced and sophisticated producers” (at para. 41). No basis exists to
dispute that finding. The CWB does not assert the forum selection clause to gain a pro-
cedural advantage. Indeed, CWB has conducted itself in an entirely reasonable manner
and, at one time, would have permitted the action to be heard in the Judicial Centre of
Regina rather than Yorkton. When the Appellants insisted not only on a Saskatchewan
court but on the choice of a particular judicial centre in Saskatchewan, CWB did not apply
simply to stay the action in Saskatchewan, but asked that the action be transferred to
Manitoba. As in Pompey, no procedural bar exists to proceeding with the case in Manitoba
or to enforcing the judgment in Manitoba. Saskatchewan witnesses will be required to
travel to Manitoba, but CWB employees, resident in Manitoba, will also be called as wit-
nesses, which renders hardship a neutral factor as no matter which way the Court decides,
one party will suffer the hardship of travel, if it becomes necessary to proceed with a trial.
[17] As to the presence of three separate causes of action, the Appellants rejected any
possibility of severing the actions (at para. 3). Indeed, the parties agree that the actions
are inter-related and that they should be heard together. In the face of this agreement,
once the Court determined that it must give effect to the forum selection clause in the
contract, the Court was required to decline territorial competence for all of the reasons
set forth in s. 10(2) of the CJPTA in relation to the two other actions.
[18] I should note that the Appellants cited a number of other decisions in support
of their appeal, all of which are distinguishable. In such decisions as Voce Enterprises Ltd.
v. K-Swiss Inc., 2006 BCSC 1256, 34 C.P.C. (6th) 179 and Schleith v. Holoday (1997), 31
B.C.L.R. (3d) 81 (C.A.) (QL), the forum selection clause was found to be ambiguous. No
such finding can be made in this case. A decision like Northern Sales Co. v. Saskatchewan
Wheat Pool (1992), 78 Man. R. (2d) 200 (C.A.) significantly predates Pompey, and may
arguably be explained by referring to the weight given by the Court of Appeal to the
discretionary nature of the decision under appeal. Unlike in Hans v. Volvo Trucks North
America Inc., it is not possible to say that the principal cause of action, i.e., the claim in
contract in this case, is not covered by the forum selection clause.
[19] In light of these reasons, I see no basis to set aside Sandomirsky J.’s decision to
decline territorial competence, in relation to the whole of the action, and to transfer the
proceedings to Manitoba.
[20] The appeal is dismissed with costs on Column 2.
Douez v Facebook, Inc

2015 BCCA 279, leave to appeal granted 2016 CanLII 12162 (SCC)
BAUMAN CJBC (Lowry and Goepel JJA concurring):
I. Introduction
[1] Facebook appeals from orders declaring that British Columbia is not forum non
conveniens (CA41917) and certifying the underlying action as a class proceeding
(CA41918). For the following reasons, I would allow the appeal in CA41917 and enter a
stay of proceedings. This would render CA41918 moot and I decline to address it.
II. Facts
[2] Facebook is a Delaware company with its head office in California. It operates a
popular online social network at facebook.com.
[3] It is and always has been free to join and use facebook.com. However, in order to
become a member one must first agree to Facebook’s Terms of Use.
[4] Facebook earns the vast majority of its revenue from selling advertising on face-
book.com. These appeals involve a type of advertising called “Sponsored Stories.” Face-
book.com has a popular feature called the “like” button. When a member presses the
“like” button on a post, his or her friends may receive a notification to that effect in their
“newsfeeds,” essentially their personal homepages. This is a convenient way for members
to share content with their friends. Sponsored Stories were paid advertisements that
looked much like ordinary “like” notifications. When a member pressed the “like” button
on a post associated with a business, political party, charity or other entity that had
purchased Sponsored Stories, an advertisement featuring the member’s name and portrait
was sometimes displayed on the newsfeeds of that member’s friends. The member was
not notified before or after the advertisement was displayed.
[5] Ms. Douez is a resident of B.C. and member of facebook.com. She alleges that her
name and portrait were featured in Sponsored Stories without her consent. She com-
menced an action against Facebook in the B.C. Supreme Court, relying on a statutory tort
created by the Privacy Act, R.S.B.C. 1996, c. 373, s. 3(2):
It is a tort, actionable without proof of damage, for a person to use the name or portrait of
another for the purpose of advertising or promoting the sale of, or other trading in, property
or services, unless that other, or a person entitled to consent on his or her behalf, consents
to the use for that purpose.
[6] Ms. Douez then applied to have her action certified as a class proceeding under
the Class Proceedings Act, R.S.B.C. 1996, c. 50. The proposed class was all B.C. residents
whose name or photograph was featured in Sponsored Stories.
[7] Facebook, for its part, applied with a request that the Court decline to exercise its
territorial competence on the ground that B.C. is forum non conveniens. This phrasing
was somewhat idiosyncratic. Ordinarily one would apply for a stay of proceedings. Noth-
ing turns on this, however, and I proceed on the understanding that Facebook’s application
was for a stay of proceedings.
III. Decision Under Appeal

[8] The chambers judge published combined reasons for the two applications. As
noted, I will address only the application for a stay of proceedings.
[9] The judge began by noting that Facebook relied principally on its Terms of Use,
to which all users must agree in order to create an account on facebook.com. The Terms
of Use included a unilateral forum selection clause in favour of the courts of Santa Clara
County, California:
You will resolve any claim, cause of action or dispute (claim) you have with us arising out of
or relating to this Statement or Facebook exclusively in a state or federal court located in
Santa Clara County.
[10] Ms. Douez relied upon s. 4 of the Privacy Act:

Despite anything contained in another Act, an action under this Act must be heard and
determined by the Supreme Court.
Ms. Douez submitted that the effect of this provision was that her action could not be
tried in Santa Clara County, or indeed anywhere but the B.C. Supreme Court.
[11] The judge cited Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, for the test
as to whether a court should decline to exercise its territorial competence because of a
forum selection clause. The party relying on the forum selection clause must show it is
valid, clear and enforceable, and that it applies to the cause of action. If this is established,
the burden then switches to [the] other party to show “strong cause” for the court to
decline to enforce the forum selection clause.
[12] The judge accepted that Facebook had shown, at least prima facie, that the clause
was valid, clear and enforceable. She did not decide whether Facebook had shown the
forum selection clause applied to Ms. Douez’s claim. She disposed of the issue by holding
that, even assuming Facebook had met its burden, s. 4 of the Privacy Act “overrides” the
forum selection clause or, alternatively, Ms. Douez had shown strong cause to not enforce
the forum selection clause.
[13] The judge held that s. 4 of the Privacy Act confers exclusive jurisdiction on the
B.C. Supreme Court, to the exclusion of other courts worldwide. Accordingly, a court in
Santa Clara would not have jurisdiction to hear Ms. Douez’s claim. To enforce the forum
selection clause would therefore be to exclude Facebook from liability under the Privacy
Act. However, this could not be the legislative intent of s. 4. Rather, the judge held, the
intent of s. 4 was to override any forum selection clauses in favour of courts other than
the B.C. Supreme Court.
[14] The judge also held, alternatively, that Ms. Douez had shown strong cause to not
enforce the forum selection clause. In a sense this was simply a different way of framing
her conclusion that s. 4 overrides the forum selection clause. To deprive Ms. Douez of
her right to bring a claim under s. 3(2) of the Privacy Act would be contrary to the legis-
lative intent of the Privacy Act and to public policy more generally. Thus, the forum
selection clause should not be enforced.
[15] The judge then considered the factors in s. 11 of the Court Jurisdiction and
Proceedings Transfer Act, S.B.C. 2003, c. 28 (“CJPTA”). That section sets out a non-
exhaustive list of factors a court must consider when deciding whether to decline to
exercise its territorial competence on the ground that it is forum non conveniens.
[16] The judge reasoned that the comparative convenience and expense for the parties
favoured B.C. over Santa Clara, because it would be easier for Facebook to bring its records
here than for Ms. Douez to litigate her claim there.
[17] The judge stated that, at the early stage of the stay application, it was not yet clear
which law would be applied to the merits. The Terms of Use contained a choice of law
clause selecting California law:
The laws of the State of California will govern this Statement, as well as any claim that might
arise between you and us, without regard to conflict of law provisions.
[18] However, the judge indicated that this may not be enforceable against Ms. Douez.
More importantly, while the B.C. Supreme Court could determine that California law
applies (perhaps defeating the claim), a Santa Clara court would lack jurisdiction under
the Privacy Act to determine which law applies. This consideration also favoured B.C.
[19] The judge concluded that B.C. is not forum non conveniens and dismissed Face-
book’s application for a stay of proceedings.
IV. Grounds of Appeal

[20] Facebook submitted the judge erred in (1) interpreting s. 4 of the Privacy Act to
override the forum selection clause, (2) holding that Ms. Douez had shown strong cause
to not enforce the forum selection clause, and (3) failing to decide whether California or
B.C. law applies to the merits.
V. Analysis
A. Analytical Framework
[21] The first issue to be considered is how the Pompey test for forum selection clauses
relates to the analytical framework for forum non conveniens in the CJPTA. When the
defendant relies upon a forum selection clause, should the court consider the Pompey test
and then, if necessary, carry out the CJPTA analysis, or should the court consider the
Pompey test as part of the CJPTA analysis? This issue did not arise in Pompey because that
proceeding began in Federal Court and there is no CJPTA at the federal level.
[22] As noted, the Pompey test requires the party relying on the forum selection clause
to show it is valid, clear and enforceable, and that it applies to the cause of action. The
burden then switches to the other party to show “strong cause” for the court to decline to
enforce the forum selection clause.
[23] The CJPTA provides as follows:
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 circum-
stances relevant to the proceeding, including
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
[24] The judge concluded that the Pompey test was a separate inquiry that should be
conducted first, with the CJPTA analysis following if necessary (at para. 29).
[25] An apparent difficulty with this approach is that, in Teck Cominco Metals Ltd. v.
Lloyd’s Underwriters, 2009 SCC 11, a B.C. case, Chief Justice McLachlin described s. 11
of the CJPTA as “a complete codification of the common law test for forum non conven-
iens” that “admits of no exceptions” (at para. 22).
[26] Facebook submitted the judge’s approach was correct, relying principally on
Viroforce Systems Inc. v. R&D Capital Inc., 2011 BCCA 260, and Preymann v. Ayus Tech-
nology Corporation, 2012 BCCA 30.
[27] In Viroforce, this Court held that the Pompey test is a separate inquiry. Mr. Justice
Tysoe for the Court did not refer to Teck. He relied on Momentous.ca Corp. v. Canadian
American Assn. of Professional Baseball Ltd., 2010 ONCA 722 at paras. 35-39, reasoning
as follows (at para. 14):
In my opinion, the [CJPTA] does not alter the general approach to be taken when the parties
agree to a forum selection clause. If it is determined or assumed that the British Columbia
court has territorial competence, the issue is whether the court should decline jurisdiction,
either because the forum selection clause ought to be enforced or a consideration of the
factors contained in s. 11 of the [CJPTA] leads to the conclusion that a court in another
jurisdiction is a more appropriate forum. The existence of a forum selection clause can, by
itself, be sufficient reason for a court to decline jurisdiction, and it is not simply one of the
factors to consider in making a determination under s. 11. It will not be necessary in all cases
to first determine whether there is territorial competence because it may be clear that the
forum selection clause will govern the outcome of the matter.
[28] Momentous was appealed to the Supreme Court of Canada. In very brief per
curiam reasons (indexed as 2012 SCC 9), dismissing the appeal, the Court did not com-
ment on the analytical framework employed by the Court of Appeal.
[29] Viroforce was considered in Microcell Communications Inc. v. Frey, 2011 SKCA
136. Saskatchewan also has a CJPTA (S.S. 1997, c. C-41.1). Madam Justice Jackson dis-
agreed with this Court’s analytical approach. In her view, forum selection clauses should
be considered as factors bearing on “the fair and efficient working of the Canadian legal
system as a whole” within the meaning of s. 11(2)(f) of the CJPTA (at paras. 106-115; see
also Hudye Farms Inc. v. Canadian Wheat Board, 2011 SKCA 137 at paras. 8-11).
[30] In Preymann, this Court revisited Viroforce and also considered Microcell and
Hudye. Madam Justice Garson rejected the submission that Viroforce was inconsistent
with Teck (at paras. 37-39). She noted that, in Pompey, the Court referred to the need for
“a separate approach to applications for a stay of proceedings involving forum selection
clauses” (at para. 21). “If forum non conveniens is exhaustively codified in s. 11 (Teck) but
forum selection clauses trigger a separate inquiry (Pompey), there is no concern that Teck
and Viroforce conflict” (at para. 39). She found no reason to depart from the Viroforce
analysis.
[31] I consider that we are bound by Viroforce and Preymann. In B.C., when the
defendant relies upon a forum selection clause, the Pompey test is a separate, standalone
inquiry that is conducted first. The CJPTA analysis may be conducted second, if
necessary.
B. Evidentiary Issues
[32] The parties agreed that, under the Pompey test, Facebook bears the persuasive
burden of showing that the forum selection clause is valid, clear and enforceable, and that
it applies to the cause of action. The persuasive burden then switches to Ms. Douez to
show “strong cause” for the court to decline to enforce the forum selection clause.
[33] However, the parties did not agree as to whether either of them bears an eviden-
tiary burden to adduce expert evidence about the law of the selected forum, i.e., the law
of California.
[34] Facebook submitted that it bears no such evidentiary burden, for two reasons.
First, Pompey did not refer to an evidentiary burden and the Pompey test is a separate,
standalone inquiry in B.C. Second, it is “axiomatic” that, absent evidence to the contrary,
foreign law must be presumed to be the same as B.C. law. Thus, Facebook said, this Court
could determine whether California has territorial competence simply by assuming that
California has the same territorial competence rules as does B.C.
[35] I agree with Facebook that it was not required to adduce expert evidence about
California rules of territorial competence. I accept its first submission. The Pompey test
is a separate inquiry in B.C. and that test, in my view, does not expressly or impliedly
impose an evidentiary burden on the party relying on the forum selection clause. The
Pompey test requires Facebook to show only that the clause is valid, clear and enforceable,
and that it applies to this proceeding. This test does not entail any evidentiary burden.
[36] In my opinion, Ms. Douez had the option of adducing evidence that shows Santa
Clara courts would lack territorial competence over this proceeding. If this proceeding
could not be heard in Santa Clara, the forum selection clause would effectively operate
as an exclusion of liability clause. That might amount to strong cause to not enforce it.
[37] While my acceptance of Facebook’s first submission is dispositive, I feel compelled
to express doubt about Facebook’s alternative submission. The principle relied upon by
Facebook is not incorrect, but I doubt it operates in the manner Facebook submitted. If
it did, in certain cases within the CJPTA framework, it would effectively reverse the evi-
dentiary burden. To be clear, this problem would be limited to the CJPTA framework for
forum non conveniens; it would not arise in the Pompey framework for forum selection
clauses.
[38] Another forum could not be more appropriate if the proceeding could not even
be heard there. For this reason, a court will generally be reluctant to stay proceedings
without some evidence that the proposed alternate forum will have territorial competence
(see Spiliada Maritime Corp. v. Cansulex Ltd., [1987] A.C. 460 at 476 (H.L.); Hindocha v.
Gheewala, [2003] UKPC 77 at para. 22). (Alternatively, the party seeking the stay might
agree, as a term of the stay, to attorn to the alternate forum (see Lubbe v. Cape Plc, [2000]
UKHL 41 at para. 50).)
[39] Facebook is correct that, when a B.C. choice of law rule provides that the law of
a foreign jurisdiction applies to the merits of a proceeding but there is no available expert
evidence about that foreign law, the court will presume it is the same as B.C. law (Old
North State Brewing Co. v. Newlands Services Inc. (1998), 58 B.C.L.R. (3d) 144 at para. 39
(C.A.)). In my opinion, however, this principle likely applies only in the context of choice
of law. I doubt that foreign territorial competence rules should, in the absence of evidence,
be presumed to be the same as our own.
[40] Foreign territorial competence rules (particularly in civil law states) often do
differ from our rules. Thus, if a party seeking a stay declined to adduce evidence about
the territorial competence rules of its proposed alternate forum, in some cases the pre-
sumption would make it seem as though the alternate forum would have territorial
competence, when it actually would not. In these cases the party without the persuasive
burden would effectively be compelled to adduce evidence about the territorial compe-
tence rules of the alternate forum (unless that forum was less appropriate than B.C. for
other reasons). In my view, the persuasive and evidentiary burdens should coincide.
[41] It is convenient at this point to provide a summary of my interpretation of the
analytical framework in different types of applications for stays of proceedings:
(a) If the defendant does not rely on a forum selection clause, the analytical frame-
work in s. 11 of the CJPTA applies. The defendant must identify a specific alternate
forum and show that it would be more appropriate for the proceeding to be heard
and determined there. In most cases the court will expect the defendant to adduce
opinion evidence from an expert in the law of the alternate forum, indicating that
that forum would have territorial competence under its own law. (I leave open the
possibility that the persuasive burden may switch to the plaintiff in some circum-
stances. In such cases evidentiary concerns would be less salient because the
defendant’s preferred forum may be inappropriate for reasons other than a lack
of territorial competence.)
(b) If the defendant does rely on a forum selection clause, the Pompey test applies
instead. The defendant must show only that the clause is valid, clear and enforceable,
and that it applies to the cause of action. (The defendant need not adduce expert
evidence indicating that the forum would have territorial competence under its
own law.) The persuasive burden then switches to the plaintiff, who must show
strong cause to decline to enforce the clause. In this regard the plaintiff may choose
to adduce expert evidence that the forum would lack territorial competence under
its own law, as this may (on its own or in combination with other factors) amount
to strong cause. If the plaintiff shows strong cause, the defendant may submit that
the court should nonetheless find it is forum non conveniens on the analytical
framework in s. 11 of the CJPTA. (Again, I leave open the possibility that the per-
suasive burden under the CJPTA may switch to the plaintiff in some circumstances.)
C. Is the Forum Selection Clause Valid, Clear and Enforceable, and Does It Apply
to This Cause of Action?
[42] The trial judge accepted on a prima facie basis that Facebook had shown the
clause to be valid, clear and enforceable. She did not decide whether the clause applied;
she assumed arguendo that it did.
[43] Ms. Douez did not submit that the forum selection clause is unenforceable against
her, or that it does not apply to this dispute. She appears to accept that Facebook met its
burden under the Pompey test.
[44] However, Ms. Douez did raise an issue as to the enforceability of the forum
selection clause against members of her proposed class who are under 19 years of age.
Relying on the Age of Majority Act, R.S.B.C. 1996, c. 7, s. 1, she submitted that persons
who are under 19 do not have the capacity to contract and therefore cannot validly agree
to a forum selection clause. However, even assuming Ms. Douez is correct that persons
who are under 19 cannot validly contract, the issue at this stage is whether the forum
selection clause is enforceable against her. Logically, only if the clause is unenforceable
against Ms. Douez can the action continue and potentially be certified as a class proceed-
ing. At this point in the analysis there is no class; there is only Ms. Douez (see Ezer v.
Yorkton Securities and Danzig, 2004 BCSC 487 at para. 29, aff ’d 2005 BCCA 22).
D. Does Section 4 of the Privacy Act Override the Forum Selection Clause?
[45] The judge held that s. 4 of the Privacy Act confers exclusive jurisdiction on the
B.C. Supreme Court, to the exclusion of other courts worldwide. In this sense, s. 4 “over-
rides” the forum selection clause by providing that the courts of Santa Clara do not have
jurisdiction to hear this proceeding.
[46] Facebook submitted that this conclusion was in error. It said s. 4 of the Privacy
Act means only that the B.C. Supreme Court has jurisdiction to the exclusion of other
courts in B.C.—in particular, the Provincial Court, which cannot grant injunctions or
other equitable relief that may be necessary to enforce the Privacy Act. Ms. Douez
responded that similar arguments have been rejected in a number of analogous cases in
various jurisdictions.
[47] In my respectful opinion, the judge erred in her interpretation of s. 4. She failed
to give effect to the principle of territoriality
• • •
[73] In conclusion, the judge erred in interpreting s. 4 of the Privacy Act to “override”
the forum selection clause by depriving California courts of territorial competence over
Privacy Act proceedings. Section 4 is a rule of subject matter competence that, like all
B.C. law, applies only in B.C. California courts determine for themselves, using California
law, whether they have territorial competence over any given proceeding.
E. Has Ms. Douez Shown Strong Cause to Not Enforce the Clause?
[74] The judge also concluded, alternatively, that Ms. Douez had shown strong cause
for the Court to decline to enforce the forum selection clause. This conclusion also
depended on her interpretation of s. 4 of the Privacy Act. If the courts of California would
not have territorial competence to hear this proceeding, then a stay in B.C. would effect-
ively deprive Ms. Douez of her right to bring a claim under s. 3(2). In that case the forum
selection clause would operate like an exclusion of liability clause. According to the judge,
this would be contrary to the legislative intent of the Privacy Act and to public policy
more generally.
[75] I agree with the judge that, if the effect of a stay would be to extinguish Ms.
Douez’s claim, that might very well be strong cause not to enforce the forum selection
clause. However, as already explained, s. 4 of the Privacy Act does not deprive California
courts of territorial competence to hear this proceeding.
[76] Because the burden to show strong cause rests on Ms. Douez, the first issue is
whether Ms. Douez otherwise established that California courts would not have territorial
competence (under California law) over this proceeding.
[77] In my opinion, Ms. Douez failed to provide the Court with any reason to conclude
that this proceeding could not be heard in the courts of Santa Clara. There is no evidence
in the record as to California private international law. This Court cannot conduct its own
research and take judicial notice (see Duchess Di Sora v. Phillipps, [1863] 10 H.L. Cas. 624
at 640; Bumper Development Corporation v. Commissioner of Police of the Metropolis,
[1991] W.L.R. 1362 at 1369 (E.W.C.A.)).
[78] To be clear, I am not making a finding that California courts would have territorial
competence. I make no finding one way or the other. I find only that Ms. Douez did not
show California courts would not have territorial competence.
[79] It remains to be considered whether Ms. Douez demonstrated other factors that
would amount to strong cause for this Court to not enforce the forum selection clause.
However, all her submissions depended on the judge’s conclusion that the courts of Santa
Clara would lack territorial competence. Once this conclusion falls away, Ms. Douez is
left with no arguments capable of convincing this Court to decline to enforce the forum
selection clause.
[80] In sum, the judge’s holding that Ms. Douez had shown strong cause is under-
mined by the judge’s erroneous interpretation of s. 4 of the Privacy Act. Ms. Douez did
not make any submissions that did not depend on the same interpretation. I am left with
no choice but to conclude that Ms. Douez did not show strong cause. I would enforce the
forum selection clause.
F. CJPTA, Section 11
[81] In light of my conclusions on the Pompey test, it is unnecessary for me to consider
Facebook’s submission that the judge erred in concluding B.C. was not forum non con-
veniens within the CJPTA framework.
[82] However, I would remark that I do not agree with Facebook that the judge
erred—at least as a matter of private international law—in not deciding the choice of law
issue.
[83] The CJPTA requires a judge hearing an application for a stay of proceedings to
“consider … the law to be applied” (s. 11(b)). As a matter of plain language, “consider”
does not mean “decide.” More importantly, it will often not be possible at the early stage
of a stay application to decide which law applies to the merits. It is not always clear which
choice of law rule applies. Even when it is, some rules are quite fact dependent. Renvoi
may also need to be considered. In short, choice of law is complicated and I interpret
s. 11(b) of the CJPTA to require only that the judge grapple with the issue, recognizing
that it will often not be possible to fully resolve this issue at the early stage of a stay applica-
tion. A good example, albeit one that was decided before the CJPTA was enacted, is
Loewen Group Inc. v. Continental Insurance Co. of Canada (1997), 44 B.C.L.R. (3d) 387
at paras. 25-32 (S.C.).
[84] I recognize that these factors may be less salient in the instant case, because Ms.
Douez agreed to a choice of law clause selecting California law “without regard to conflict
of law provisions” (which I take to mean “excluding the operation of renvoi”). Still, the
judge did not fail to apply s. 11(b) by merely considering, rather than deciding, which law
applies to the merits. (I do not express a view as to whether she erred as a matter of the
law applying to certification applications.)
VI. Conclusion
[85] For these reasons, I conclude the judge erred in law (chiefly in her interpretation
of s. 4 of the Privacy Act) when deciding not to enforce the forum selection clause. I agree
with Facebook that the clause should be enforced. I would therefore allow the appeal in
CA41917 and enter a stay of the underlying action. (Ms. Douez is at liberty to bring her
action in California.) This disposition of CA41917 would render CA41918 moot and I
decline to address it.
NOTES
1. Strong cause. The Ontario Court of Appeal addressed the nature of “strong cause” in
Expedition Helicopters Inc v Honeywell Inc, 2010 ONCA 351. For the court, Juriansz JA stated:
[24] A forum selection clause in a commercial contract should be given effect. The factors
that may justify departure from that general principle are few. The few factors that might be
considered include the plaintiff was induced to agree to the clause by fraud or improper induce-
ment or the contract is otherwise unenforceable, the court in the selected forum does not
accept jurisdiction or otherwise is unable to deal with the claim, the claim or the circumstances
that have arisen are outside of what was reasonably contemplated by the parties when they
agreed to the clause, the plaintiff can no longer expect a fair trial in the selected forum due to
subsequent events that could not have been reasonably anticipated, or enforcing the clause in
the particular case would frustrate some clear public policy. Apart from circumstances such as
these, a forum selection clause in a commercial contract should be enforced.
2. Legislation may exempt certain kinds of contracts, such as consumer and employment
contracts, or certain actions, such as class actions, from the general common law rule favour-
ing jurisdiction selecting clauses. For example, art 3149 of the Civil Code of Quebec provides
that in a conflicts context, a waiver of jurisdiction by a consumer or an employee may not be
set up against that party. Alternatively, legislation may eliminate judicial discretion.
Article 3148 of the Civil Code of Quebec treats jurisdiction-selecting clauses as conclusive.
In GreCon Dimter inc v JR Normand inc, 2005 SCC 46, [2005] 2 SCR 401, the Supreme Court
resolved perceived conflicts between various provisions of the Civil Code of Quebec in favour
of art 3148.
Similarly, the Hague Convention on Choice of Court Agreements (2005) treats jurisdiction
selecting clauses in civil or commercial matters as absolute unless, under art 6,
(a) the agreement is null and void under the law of the State of the chosen court;
(b) a party lacked capacity to conclude the agreement under the law of the State of the
court seised;
(c) giving effect to the agreement would lead to manifest injustice or would be manifestly
contrary to the public policy of the State of the court seised;
(d) for exceptional reasons beyond the control of the parties, the agreement cannot reason-
ably be performed; or
(e) the chosen court has decided not to hear the case.
Canada is not yet a signatory. Is there a substantial difference between the common law
strong cause test and the Hague Convention approach?
2. Arbitration Clauses
Just as a court may be asked to stay a local action in favour of a forum selected by the par-
ties, so it may be asked to stay local proceedings in deference to an agreement to arbitrate.
The applicant may invoke the inherent discretion of the court to control its own process and,
in addition, the applicant will be able to rely on jurisdiction to stay bestowed on the court by
federal and provincial legislation. Canada acceded to the New York Convention on the Recog-
nition and Enforcement of Foreign Arbitral Awards (1958) and virtually all provinces have
enacted legislation implementing both that Convention and a version of the United Nations
Commission on International Trade Law (UNCITRAL) UNCITRAL Model Law on International
Commercial Arbitration (1985). The statutes implement a policy of encouraging arbitration
and specify the limited discretionary grounds left to the courts to refuse stay applications
when the parties have agreed to arbitrate disputes.
British Columbia, for example, has a Foreign Arbitral Awards Act, RSBC 1996, c 154 (repro-
duced in part in Chapter 8), an International Commercial Arbitration Act, RSBC 1996, c 233, and
a Commercial Arbitration Act, RSBC 1996, c 55. Similar legislation can be found in other prov-
inces and there is, in addition, a federal Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp).
Common to all the statutes are provisions similar to s 8 of the British Columbia International
Commercial Arbitration Act:
8(1) If a party to an arbitration agreement commences legal proceedings in a court against
another party to the agreement in respect of a matter agreed to be submitted to arbitration, a
party to the legal proceedings may, before or after entering an appearance and before delivery
of any pleadings or taking any other step in the proceedings, apply to that court to stay the
proceedings.
(2) In an application under subsection (1), the court must make an order staying the legal
proceedings unless it determines that the arbitration agreement is null and void, inoperative or
incapable of being performed.
(3) Even if an application has been brought under subsection (1) and even if the issue is
pending before the court, an arbitration may be commenced or continued and an arbitral
award made.
The Supreme Court of Canada held recently that the provision does not require the court to
have the first crack at determining whether the arbitration clause is operable. The ordinary
rule is that the arbitrator should decide on its own jurisdiction: Dell Computer Corp v Union
des consommateurs, 2007 SCC 34, [2007] 2 SCR 801, 284 DLR (4th) 577.
Prince George (City) v McElhanney Engineering Services Ltd

(1995), 9 BCLR (3d) 368 (CA)
CUMMING JA:
[1] This is an appeal, brought pursuant to leave granted 26 January 1995 by a justice
of this Court, from the order of Parrett J pronounced 30 December 1994, refusing to stay
that part of the action brought by the plaintiff/respondent, the City of Prince George
(Prince George), against the defendant/appellant, A.L. Sims & Sons Ltd. (Sims). The
application to stay was brought under s. 15 of the Commercial Arbitration Act, SBC 1986,
c. 3 which provides that the court shall stay proceedings in respect of a matter agreed to
be submitted to arbitration unless the court determines that the arbitration agreement is
“null and void, inoperative or incapable of being performed.”
[2] Parrett J determined that the arbitration agreement had become “inoperative.” I
shall set out later, in extenso, his reasons for reaching this conclusion.
Background Facts
[3] On 5 August 1993, Sims entered into a contact with Prince George for the con-
struction of a buttress and related earth works for University Way in Prince George, made
necessary following an earlier landslide which occurred during the construction of the
road by another contractor. McElhanney Engineering Services Ltd. (McElhanney) was
nominated by Prince George as the “consultant” under the contract. The contract between
Sims and Prince George contained a mandatory arbitration clause which provided:
S.C. 8 SETTLEMENT OF DISPUTES
8.1 In the event of a dispute between the Owner and the Contractor, either party shall
have the right to give notice to the other, requiring that the matter be referred to an arbitrator.
This shall be deemed to be a submission to arbitration within the meaning of the Arbitration
Act. The decision of the arbitrator shall be final and binding on both parties.
[4] Difficulties were experienced in the performance of the contract. The amount of
waste material rose from an estimated 40,000 cubic metres to in excess of 200,000 cubic
metres. The work was delayed and performed in winter months at additional and
increased costs to Sims.
[5] In December of 1993, Prince George replaced McElhanney as consultant under
the contract with its own chief engineer, Mr. Halldorson.
[6] On 24 January 1994, Prince George commenced proceedings against McElhanney,
claiming damages for the expenses and costs incurred by Prince George in completing
the work, including the work performed by Sims. There is no arbitration agreement in
the contract between Prince George and McElhanney.
[7] Throughout the course of the work, Sims made it known to Prince George that it
intended to present a claim for its increased costs. By letter dated 7 February 1994, Sims
provided details of the claim it intended to present, including particulars of the circum-
stances giving rise to the claim.
[8] On 16 March 1994, Sims presented a claim to Prince George entitled “A Request
for Additional Compensation.” The claim related to the increased volume of waste material
under the contract and its impact with respect to time and costs. On 29 March 1994,
Prince George rejected the claim and indicated it “shall submit this claim to arbitration”
under the contract.
[9] On 3 May 1994, Prince George notified Sims of its intent to claim against it and
confirmed that arbitration “was the most expedient method of resolving these issues.”
[10] On 13 June 1994, Prince George asked the BC Arbitration and Mediation Institute
to appoint an arbitrator for Sims’ impact claim and Prince George’s counterclaim. Mr.
Tom White was appointed as arbitrator.
[11] Prince George objected to the appointment of Mr. White on the grounds of pos-
sible bias. On 30 September 1994, Prince George provided a list of acceptable arbitrators
to replace Mr. White and threatened to have one of its candidates appointed by court
order. Shortly thereafter, Mr. White resigned.
[12] On 3 November 1994, Prince George agreed to the appointment of Mr. Mullen
as arbitrator. Mr. Mullen accepted the appointment and requested counsel arrange a
conference to discuss preliminary matters.
[13] Prince George issued a Certificate of Total Performance on 3 November 1994.
On 2 November 1994, Prince George delivered a claim in writing to Sims for damages
for breach of contract in excess of $2 million for delay and failure to follow the contract
specifications.
[14] Prince George commenced this action against Sims and McElhanney on 10
November 1994. Prince George’s claim against Sims is for damages for delay in construc-
tion, breach of contract and negligent performance of work required pursuant to the
contract. The claim against McElhanney is for damages in the design and supervision of
construction of the work done by Sims.
[15] By notice of motion dated 24 November 1994, Sims applied for an order pursuant
to s. 15 of the Commercial Arbitration Act staying the action brought by Prince George
on the ground that Prince George and Sims were parties to an arbitration agreement.
Sims did not seek any stay of Prince George’s action against McElhanney.
[16] The application came on for hearing before Parrett J on 5 December 1994. Rea-
sons for judgment were delivered on 30 December 1994.
[17] Parrett J refused the stay application on the basis, shortly put, that:
(a) the arbitration clause was inoperative or incapable of being performed because
the plaintiff ’s actions raised broader issues against the co-defendant McElhanney
which were inter-related with the arbitrable issues between the plaintiff and the
defendant Sims; and
(b) in the alternative, the court would exercise a residual jurisdiction to refuse the
stay where there was a risk of multiple proceedings and inconsistent results.
[Cumming JA quoted extensively from Parrett J’s judgment.]
Issues
[20] In its factum, Sims submits that the learned chambers judge erred in refusing
Sims a stay of proceedings under s. 15 of the Commercial Arbitration Act as follows:
(a) in construing “inoperative” as meaning “inconvenient” or importing a forum conveniens
test in an application for a stay of proceedings; and
(b) in the alternative, applying, in effect, a residual discretion to refuse a stay in circum-
stances of multiple issues and multiple parties by misinterpreting Gulf Canada Re-
sources Ltd. v. Arochem International Ltd. (1992), 66 BCLR (2d) 113 (CA).
Discussion
[21] Section 15 of the Commercial Arbitration Act provides:
15(1) Where a party to an arbitration agreement commences legal proceedings in a court
against another party to the agreement in respect of a matter agreed to be submitted to
arbitration, a party to the legal proceedings may, before or after entering an appearance and
before delivery of any pleadings or taking any other step in the proceedings, apply to that
court to stay the legal proceedings.
(2) In an application under subsection (1), the court shall make an order staying the
legal proceedings unless it determines that the arbitration agreement is null and void, inop-
erative or incapable of being performed.
[22] There are three prerequisites to the application of s. 15. They are:
(a) the applicant must show that a party to an arbitration agreement has commenced
legal proceedings against another party to the agreement;
(b) the legal proceedings must be in respect of a matter agreed to be submitted to
arbitration; and
(c) the application must be brought timely, i.e. before the applicant takes a step in the
proceeding. (Gulf Canada Resources Ltd. v. Arochem International Ltd., supra, at
119-120.)
[23] As to (a), it is common ground that Sims and Prince George are parties to an
arbitration agreement. This was so found by the learned chambers judge. However, as
noted above, the contract between Prince George and McElhanney contained no provision
for arbitration.
[24] As to (b), it was contended on behalf of Prince George that, for a variety of rea-
sons, there was no evidence before Parrett J of the existence of a dispute between the
parties and therefore nothing to arbitrate. Counsel for Prince George submitted, among
other arguments, that Sims had not made a claim against Prince George, that it had failed
to follow the claims procedures contained in the general conditions of their contract, and
that its claim, if any, was out of time as not having been made during the construction
period and was barred by the issuance, unilaterally on the part of Prince George and
without application by Sims therefore, of a Certificate of Total Performance. In response,
counsel for Sims submitted that compliance with the prescribed claims procedures had
been waived by Prince George and that issues of this sort were, in any event, for the arbi-
trator and not the court to determine.
[25] It is apparent that all of these arguments focus upon the claim advanced, or to
be advanced, by Sims against Prince George and are totally irrelevant to the question
before us which is: does the claim made by Prince George in its action against Sims raise
a dispute which falls within the arbitration agreement? The learned trial judge in the
passage I have quoted refrained from reaching any conclusion on this point.
[26] In my respectful opinion, it is clear beyond peradventure that there exists a
dispute between the parties which involves matters agreed to be submitted to arbitration.
[27] Under the arbitration agreement, disputes are matters which were agreed to be
submitted to arbitration. A dispute is defined in section GC7 of the contract as:
7.1 Differences between the parties to the Contract as to the interpretation, application
or administration of this Contract or any failure to agree where agreement between the
parties is called for, herein collectively called disputes, …
[28] Prince George has a dispute with Sims. Prince George has commenced these
proceedings seeking damages in excess of $2 million for breach of contract or the negligent
performance of obligations under the contract. We were advised by counsel that the
statement of claim filed on behalf of Prince George in this action advances the same claims
as those contained in the claim for damages it delivered to Sims on 2 November 1994.
While it is true that the issues raised may be refined and defined more precisely in the
defence to be filed by Sims in response, that step had not been taken for the simple reason
that, if it had been taken, Sims would forego its right to have the matter arbitrated. (See
Stancroft Trust Ltd. v. Can-Asia Capital Co. (1990), 43 BCLR (2d) 341 per Southin JA at
346). Nonetheless, the very fact that Sims moved for a stay of proceedings leads inexorably
to the conclusion that it does not accept but, on the contrary, disputes the claims made
against it in the lawsuit Prince George has commenced. I note, as well, that it has done
so in a timely way by launching its motion for a stay some two weeks after the writ was
issued.
[29] I turn now to the question of whether the arbitration agreement was “inoperative”
or “incapable of being performed.” Parrett J concluded that it was inoperative or incapable
of being performed because of the existence of broader issues between Prince George and
McElhanney which were inter-related with the issues between Prince George and Sims,
and which would remain undetermined by the arbitration process given the absence of
an arbitration clause in the contract between Prince George and McElhanney.
[30] In considering this question, we have the advantage of having been referred to a
number of authorities which were not cited to the learned judge below.
[31] In Kaverit Steel and Crane Ltd. v. Kone Corp. (1992), 87 DLR (4th) 129, 85 Alta.
LR (2d) 287, the Alberta Court of Appeal considered legislation essentially identical to
s. 15 of the Commercial Arbitration Act. The facts in that case are set out in the headnote
[DLR]:
A distributorship agreement contained a clause providing that: “Any dispute arising out of
or in connection with this agreement shall be finally settled without recourse to the courts,
in accordance with the Rules of Conciliation and Arbitration of the International Chamber
of Commerce …” By s. 2 of the International Commercial Arbitration Act, SA 1986, c. I-6.6,
the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, a Schedule
to the Act, applies in Alberta. By art. II, s. 3 of the Convention: “The court of a Contracting
State … shall, at the request of one of the parties, refer the parties to arbitration, unless it
finds that the … agreement is null and void, inoperative or incapable of being performed.”
The distributor commenced an action in Alberta alleging, among other things, a breach of
the agreement by the licensor, which sought a stay and a reference to arbitration. The judge
refused the stay on the grounds that some of the issues in the action fell outside the scope
of the arbitration clause, and that some parties to the action were not parties to the arbitration
agreement.
[32] In giving the judgment of the Court, Kerans JA said, at 138-140:

The power to grant or withhold a reference under the International Commercial Arbitration
Act is very limited, and the statute does not permit a decision on the test invoked by the
learned chambers judge, which resembles the forum conveniens test. For the purpose of
argument, I accept the possibility (albeit I suspect very slim) of two suits at the same time,
and even contradictory findings. Nevertheless, that is the method chosen by the parties. The
Act directs me to hold them to their bargain. Section 2(1) of the International Commercial
Arbitration Act makes the Convention part of the law of Alberta. It says that the Convention
“applies in the Province.” The Convention, art. II, s. 3 provides that:
3. The court of a Contracting State … shall, at the request of one of the parties,
refer the parties to arbitration, unless it finds that the said agreement is null and void,
inoperative or incapable of being performed. (Emphasis added.)
The learned chambers judge relied upon the qualifying words. He held that an inconvenient
reference was an “inoperative” one. I do not agree. It may not operate conveniently, but it
cannot be said to be inoperative. The view taken by the learned chambers judge adds a gloss
to the word that it cannot, in all the circumstances, reasonably bear.
It is common ground that the evident purpose of Alberta’s acceptance of the Convention
is to promote international trade and commerce by the certainty that comes from a scheme
of international arbitration. As Justice Potter Stewart said in Scherk v. Alberto-Culver, 417
US 506 (1974) at p. 516:
… uncertainty will almost inevitably exist with respect to any contract touching two
or more countries, each with its own substantive laws and conflict-of-laws rules. A
contractual provision specifying in advance the forum in which disputes shall be liti-
gated and the law to be applied is, therefore, an almost indispensable precondition to
achievement of the orderliness and predictability essential to any international busi-
ness transaction.
That purpose would not be served by adopting an interpretation that puts the entire
scheme at risk. The forum conveniens test almost always would defeat arbitration because,
as Justice Stewart said in Scherk, it would invite “unseemly and mutually destructive jockey-
ing.” Indeed, one argument of the learned chambers judge relied upon the fact that, after
arbitration, the parties might regurgitate some issues during enforcement proceedings in
Alberta. This fear exists in every case, of course. If we yield to it, no dispute would go to
arbitration. The same can be said of a leash on arbitration that is as short as the pleading of
opposing counsel is long, which sacrifices certainty to wit. (I accept the statement of Mr.
Redmond that the drafting of the statement of claim here occurred before the arbitration
issue arose. Mr. Redmond will, I hope, take it as a compliment that I knew that before he
told me: if driven, he has the skill to plead more nuanced issues than those under review.)
In modern commercial disputes, it is almost inevitable that many parties will be involved
and very unlikely that all parties will have an identical submission. The problem of multiple
parties, which drove the decision of the chambers judge here, will exist in almost every case.
There is no question that proliferation of litigation is a possibility. Redfern and Hunter, in
Law and Practice of International Commercial Arbitration (Sweet and Maxwell, 1986),
describe, at p. 141 and following, the problems and some solutions, including a model
submission. In any event, the Convention cannot reasonably be taken as having abandoned
any attempt at arbitration when this problem arises.
In my view, the proviso about “null and void, inoperative, and incapable of being
enforced” simply preserves the rule in Heyman v. Darwins Ltd. cited earlier. [[1942] AC 356
(HL)]. The arbitrator cannot decide whether the submission is valid. Its validity and enforce-
ability must be pronounced upon before the referring court can enforce it by a reference and
stay. It is not valid if it, or the contract in which it is found, is, by operation of domestic law
in the referring tribunal, either void or unenforceable. The proviso is an echo of the law about
void contracts (“null and void”), unenforceable contracts (“inoperative”), and frustrated
contracts (“incapable of being enforced”): see Paczy v. Haendler & Natermann, [1981] 1
Lloyd’s Rep. 302 at pp. 307-8.
• • •
In the result, I would allow the appeal and direct that all issues between the distributor
and the licensor that rest upon the existence of the contract be stayed and referred for deci-
sion as directed in the submission.
[33] The learned chambers judge was not referred to M.J. Mustill & S.C. Boyd, The
Law and Practice of Commercial Arbitration in England, 2d ed. (London: Butterworths,
1989) at 464-465 where the learned authors said:
The expression “inoperative” has no accepted meaning in English law, but it would seem apt
to describe an agreement which, although not void ab initio, has for some reason ceased to
have effect for the future. Three situations can be envisaged in which an arbitration agreement
might be said to be “inoperative.” First, where the English Court has ordered that the arbi-
tration agreement shall cease to have effect, or a foreign court has made a similar order which
the English Court will recognize. Second, as is discussed in Chapter 32, there may be cir-
cumstances in which an arbitration agreement might become “inoperative” by virtue of the
common law doctrines of frustration, discharge by breach, etc. Third, the agreement may
have ceased to operate by reason of some further agreement between the parties. But the fact
that issues in the arbitration overlap issues in proceedings between parties who are not bound
by the arbitration agreement does not make the agreement “inoperative”. (emphasis added)
[34] The learned chambers judge was also not referred to J.B. Casey, International and
Domestic Commercial Arbitration (Carswell, 1993) at 4-14 where the learned author said:
To find that an arbitration agreement is inoperative is again to deal with the situation in
which there is an agreement, but for some reason it is no longer enforceable. For example,
it may be alleged that the parties have by subsequent agreement or conduct determined to
suspend the operation of the arbitration agreement, or another court has declared the
agreement to be unenforceable … It is not sufficient to say that because the court action raises
issues outside the scope of the arbitration agreement per se, or because the action involves some
parties that are not parties to the arbitration agreement, that the agreement should be consid-
ered “inoperative”. (emphasis added)
[35] With respect to “incapable of being performed,” Casey says:

According to Mustill & Boyd, “incapable of being performed” connotes something more
than mere difficulty or inconvenience or delay in performing the arbitration. For example,
it is not sufficient to say it is incapable of being performed where one party could not or
would not come up with the deposit necessary to pay the arbitrator. The incapacity must
come from something beyond the control of the parties; for example, where the arbitration
agreement specifies a particular arbitrator must hear the matter, but he or she is not available.
[36] In Boart Sweden A.B. v. N.Y.A. Stromnes A.B. (1988), 41 BLR 295 (Ont. HC), the
court allowed an application for a stay of proceedings pending arbitration where there
were multiple parties and multiple issues. The court said at 302-303:
Public policy carries me to the consideration which I conclude is paramount having regard
to the facts of this case, and that is the very strong public policy of this jurisdiction that where
parties have agreed by contract that they will have the arbitrators decide their claims, instead
of resorting to the Courts, the parties should be held to their contract.
• • •
To deal with all these matters in a single proceeding in Ontario instead of deferring to the
arbitral process in respect of part of the action and temporarily staying the other parts of the
action, would violate that strong public policy.
It would also fail to give effect to the change in the law of international arbitration which,
with the advent of art. 8 of the Model Law and the removal of the earlier wide ambit of discre-
tion, gives the Courts a clear direction to defer to the arbitrators even more than under the
previous law of international arbitration.
I conclude that nothing in the nullity provisions of art. 8 prevents this Court from giving
effect to the clear policy of deference set out in the article.
To conclude otherwise would drive a hole through the article by encouraging litigants to
bring actions on matters related to but not embraced by the arbitration and then say that
everything had to be consolidated in Court, thus defeating the policy of deference to the
arbitrators.
[37] These authorities establish that, as a general principle, the mere fact that there
are multiple parties and multiple issues which are inter-related and some, but not all,
defendants are bound by an arbitration clause is not a bar to the right of the defendants
who are parties to the arbitration agreement to invoke the clause.
[38] There are numerous authorities to the same effect, of which the following are
some: Lonrho Ltd. (U.K.) v. Shell Petroleum Co. (U.K.), January 31, 1978, Court Decisions
on New York Convention 1958, 320 (Ch. D); Roy v. Boyce (1991), 57 BCLR (2d) 1987
(SC); Stancroft Trust Ltd. v. Can-Asia Capital Co., supra; Sandbar Construction Ltd. v.
Pacific Parkland Properties (1992), 66 BCLR (2d) 225 (SC); BWV Investments Ltd. v.
SASKFERCO Products Inc. (1994), 119 DLR (4th) 577 (Sask. CA).
[39] For these reasons I would give effect to the appellant’s first ground of appeal.
[40] Finally, I turn to the question of the jurisdiction of the court to refuse to order a
stay of proceedings in a situation where the prerequisites of s. 15(1) of the Commercial
Arbitration Act (the “domestic act”) have otherwise been met. This will require an exam-
ination in some detail of precisely what was decided by this Court in Gulf, supra.
[41] In this regard, Prince George sets out its position in the following passage of its
factum:
It is submitted that the learned trial judge did not err in exercising his discretion to refuse a
stay in the circumstances of this case. Although there may be many situations where the
court should exercise its discretion and grant the stay it is submitted that where arbitration
will be incapable of resolving the dispute between the parties and where there are third parties
to the action who are not subject to the arbitration agreement a stay should never be granted.
The learned chambers judge cited multiplicity of proceedings, possible inconsistent results
and extra expense as his reasons for refusing the stay in these circumstances. All of those
considerations are relevant if the intent of Supreme Court Rule 1(5) is to be honoured.
(emphasis added)
[42] Additionally, Prince George sought to draw a distinction between arbitrations

under the domestic act and international arbitrations conducted under the International
Commercial Arbitration Act, SBC 1986, c. 14, subsections 8(1) and (2) of which are cast
in terms identical to subsections 15(1) and (2) of the domestic act. I shall deal with this
latter submission first.
[Cumming JA considered the arguments and amendments to the legislation.]
[45] It is apparent that there is no difference in substance between the two statutes. I
conclude that the distinction which Prince George attempts to draw between them is
without foundation and I would reject it.
[46] In the Gulf case, supra, the defendant refused to take delivery of 375,000 barrels
of crude oil, as the price at the time of delivery had fallen by $10 a barrel. The plaintiff
notified the defendants that it accepted their repudiation of the contract. Both defendants
replied, stating that one of them was not a party to the contract. Although the contract
contained an arbitration clause, the plaintiff sued for damages. The defendants obtained a
stay under s. 8 of the International Commercial Arbitration Act, and the plaintiff appealed.
[Cumming JA quoted extensively from Gulf.]
[51] In my respectful view, the submissions on behalf of Prince George are the result
of an excessively literal construction of the language found in para. 36, standing alone
and overlooking the context in which it was employed.
[52] It is clear, reading the judgment in Gulf, supra, in its entirety, that there is no such
discretion as Parrett J appears to have assumed. Paragraph 36 must be read in conjunction
with para. 39. The final words of para. 39 set forth the circumstances in which the court
may be said to have a residual jurisdiction to refuse a stay:
Only where it is clear that the dispute is outside the terms of the arbitration agreement or
that a party is not a party to the arbitration agreement or that the application is out of time
should the court reach any final determination in respect of such matters on an application
for a stay of proceedings.
[53] Thus if a party is alleged to be a party to an arbitration agreement, but that party
clearly establishes that it is not a party to such an agreement, the court has a residual
jurisdiction to refuse a stay. This is no more than a jurisdiction to satisfy itself that the
prerequisites of s. 8 of the Act have, in fact, been met. If those prerequisites clearly have
not been met, then the court should refuse a stay. If it is arguable whether the prerequisites
have been met, then the stay should be granted and the issue can be resolved in the arbi-
tration. These principles apply equally to s. 15 of the Domestic Act.
[54] In my view, nothing in the reasons of Hinkson JA supports the view that if any
of the named litigants, on whichever side of the record they are found, are not party to
the arbitration agreement, the one who is must be denied the right to invoke the arbitra-
tion clause in the agreement to which it is a party.
[55] For these reasons I would allow the appeal and direct that a stay of the proceed-
ings brought by Prince George against Sims be granted.
[56] The appellant should be entitled to its costs.
Both Ontario and Quebec have enacted consumer protection legislation declaring any term
in a consumer agreement (which would include an arbitration clause) to be invalid insofar as
it restricts a consumer’s right to litigate or to commence a class action. Neither province
made its legislation expressly retroactive: Dell Computer Corp v Union des consommateurs,
2007 SCC 34, [2007] 2 SCR 801, 284 DLR (4th) 577; Smith Estate v National Money Mart Com-
pany, 2008 ONCA 746, 303 DLR (4th) 175. Prospectively, does such legislation render an
arbitration clause null and void, inoperative, or incapable of being performed?
B. Class Actions
The problem of parallel class actions is often settled without judicial intervention by
cooperation between lead counsel in the different actions in the various provinces. But, in
the absence of any agreement to, for example, exclude the residents of Quebec from a
national class action in Ontario, the discretion of the court to stay the local action or, possi-
bly, to prohibit continuation of a foreign proceeding, will likely be invoked. The doctrine of
forum non conveniens (and its application in the context of an anti-suit injunction case such
as Speers Estate v Reader’s Digest Association (Canada) ULC, [2009] OJ No 2332 (QL) (Sup Ct J))
is not modified for class actions but the factors for consideration in a class action will include
factors peculiar to class actions.
In Dell Computer Corp v Union des consommateurs, above, the Supreme Court held that, as
a matter of Quebec law, the existence of an arbitration clause in a contract must be given
deference and will therefore prevent commencement of a class action. MacKinnon v National
Money Mart Company, 2009 BCCA 103, 304 DLR (4th) 331, held that Dell changes the law on
the relationship between arbitration clauses and class actions for British Columbia as well.
Ward v Canada (Attorney General)

2007 MBCA 123, 286 DLR (4th) 684
[The facts in this case and the reasons for judgment holding that Manitoba had jurisdic-
tion simpliciter are reproduced in Chapter 6. The herbicide alleged to have caused damage
to the plaintiff class had been sprayed by the defendant Crown in New Brunswick. The
defendant wished to have the Manitoba class action stayed, arguing that New Brunswick
was the most appropriate forum for the action.
The trial judge considered the following factors in exercising his discretion: the location
of the majority of the parties; the location of key witnesses and evidence; contractual
provisions that specify applicable law or accord jurisdiction; the avoidance of a multiplicity
of proceedings; the applicable law and its weight in comparison to the factual questions
to be decided; geographical factors suggesting the natural forum; and whether declining
jurisdiction would deprive the plaintiff of a legitimate juridical advantage available in the
domestic court.]
FREEDMAN JA:
• • •
2. Forum Non Conveniens

[49] Given that the court has jurisdiction simpliciter, should it nevertheless decline to
exercise it? It should if there is a forum that is more appropriate or convenient for the
judicial resolution of the claim. The standard to be met is quite high. In Amchem [Products
Inc v British Columbia (Workers’ Compensation Board), [1993] 1 SCR 897], the Supreme
Court made it clear that “the existence of a more appropriate forum must be clearly
established to displace the forum selected by the plaintiff ” (at p. 921). In Spar Aerospace
Ltd. v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 SCR 205, LeBel J cautioned
that “the doctrine of forum non conveniens is to be applied exceptionally” (at para. 79).
[50] In para. 14 above [factors listed above] will be found an enumeration of most of
the principal factors usually considered by a court when deciding which forum is most
appropriate. See also the judgment of Greenberg J in Whirlpool Canada Co. v. National
Union Fire Insurance Co. of Pittsburgh, PA et al., 2005 MBQB 205, 2005 MBQB 205, 198
Man. R (2d) 18 at para. 20. The judge in the present case considered these factors, and
explained in some detail why he had concluded that the Crown, which carries the burden
of establishing that there is a more appropriate forum than Manitoba, had not discharged
that burden. I can find no fault with his analysis. Moreover, since his decision on this issue
is based on the exercise of his discretion, we ought not to interfere with the decision, even
if we disagree with it, unless the judge misdirected himself or his decision is so clearly
wrong as to amount to an injustice. See Elsom v. Elsom, [1989] 1 SCR 1367 at 1375. Neither
of those circumstances exists here.
[51] The Crown sought to show that New Brunswick was clearly the more convenient
jurisdiction for litigating this action, in light of the obvious connection the claim has with
that province. The burden on the Crown was quite high, but regardless of that burden,
the outcome depends on a consideration of all relevant factors, with the overriding goal
of preserving both fairness and order. See Hunt v. T&N plc, [1993] 4 SCR 289 at 325.
[52] The judge observed that the fact that New Brunswick law would apply in the
determination of liability was not a significant factor. The courts of Manitoba could apply
New Brunswick law. Perhaps most importantly, said the judge, the plaintiff has a right to
choose the forum, provided that he is not “forum shopping,” that is, simply suing in the
most beneficial or advantageous place to litigate. See [Tolofson v Jensen; Lucas (Litigation
Guardian of) v Gagnon] [1994] 3 SCR 1022 at 1052. I agree with those comments, and
wish to add one or two of my own. These relate directly to the issue posed above (see
para. 37), that is, whether the proposed class action nature of this claim should modify
the approach to the forum non conveniens analysis.
[53] In explaining why he rejected the Crown’s proposed rules for national class
actions, the judge discussed a number of matters touching upon the degree of connection
between New Brunswick and this claim. He noted that the records were stored in Ottawa,
that it was unlikely that experts would come from New Brunswick, that the vast majority
of class members “probably” do not live in that province, and few of the witnesses still
reside there. Against this backdrop the judge was not satisfied that the courts of New
Brunswick (the jurisdiction proposed by the Crown) could do justice between the parties
at substantially less inconvenience and expense than could the courts of Manitoba.
[54] The judge was influenced by his acceptance of the general right of a plaintiff to
choose his forum, and he acknowledged that where there are juridical advantages for a
plaintiff that right may be enhanced. In certain circumstances the exercise of that right
may be constrained; that will typically be the case if a plaintiff is engaged in forum shop-
ping. The Crown, in effect, argues that the plaintiff is doing just that. The judge rejected
that argument, as would I. There are sound reasons for the judge to have concluded that,
at least so far as the action stands today, Manitoba is an appropriate jurisdiction for the
resolution of this claim.
[55] Recognizing that this is a proposed class action, it is clear that there are some
significant juridical advantages to the plaintiff in pursuing this action in this province.
[56] First and foremost are the provisions of the Act. The Act offers to a plaintiff the
potentially very considerable advantage that flows from the opt out nature of its provi-
sions. All potential members of a class are included in the action unless they take steps
not to be included. This differs from some other class action statutes, which require posi-
tive opt in action by a prospective class member (at least with respect to non-residents).
For example, in New Brunswick, a person who is not a resident of that province must opt
in, in order to become a member of the class (s. 18(3)). It is undisputed that the Manitoba
scheme is attractive from the perspective of a plaintiff, as one would intuitively expect
that an opt out approach would result in a larger class than would an opt in approach.
[57] Perhaps most significantly the costs regime under the Manitoba scheme is very
attractive to a representative plaintiff in a class action. Such a person is significantly
insulated from serious exposure to an award of costs. In New Brunswick, for example,
costs are generally to be awarded in accordance with the Rules of Court (s. 39(1)), and
there are no special costs provisions regarding representative plaintiffs. Costs in Manitoba
can only be awarded against a representative plaintiff in limited circumstances, found in
s. 37 of the Act:
Costs
37(1) Subject to this section, no costs may be awarded against any party with respect to
any stage of a class proceeding, including a motion for certification under subsection 2(2)
or section 3, or any appeal arising from a class proceeding.
Considerations re costs
37(2) The Court of Queen’s Bench or The Court of Appeal may only award costs to a
party in respect of a motion for certification or in respect of all or any part of a class proceed-
ing or an appeal arising from a class proceeding if
(a) at any time that the court considers that there has been vexatious, frivolous or
abusive conduct on the part of any party;
(b) at any time that the court considers that an improper or unnecessary motion or
other step has been made or taken for the purpose of delay or increasing costs or for any
other improper purpose; or
(c) at any time that the court considers that there are exceptional circumstances that
make it unjust to deprive another party of costs.
Assessment of costs
37(3) A court that orders costs under subsection (2) may order that those costs be
assessed in any manner that the court considers appropriate.
Class members not liable for costs

37(4) Class members, other than a person appointed as a representative plaintiff, are not
liable for costs except with respect to the determination of their own individual claims.
[58] The Act represents, of course, the expressed will of the Legislature, which has
quite deliberately crafted this legislation in a fashion designed to encourage and facilitate
class actions in this province, provided, of course, that there is a solid jurisdictional basis
for such actions to be brought here. In Amchem, Sopinka J discussed the concept of
juridical advantage in these terms (at p. 920):
… The weight to be given to juridical advantage is very much a function of the parties’ con-
nection to the particular jurisdiction in question. If a party seeks out a jurisdiction simply
to gain a juridical advantage rather than by reason of a real and substantial connection of
the case to the jurisdiction, that is ordinarily condemned as “forum shopping.” On the other
hand, a party whose case has a real and substantial connection with a forum has a legitimate
claim to the advantages that that forum provides. The legitimacy of this claim is based on a
reasonable expectation that in the event of litigation arising out of the transaction in question,
those advantages will be available.
[59] So, given (1) the presence here of the plaintiff, (2) his as yet unchallenged asser-
tion of damage sustained here, (3) the presence here of the Crown, (4) the clear juridical
advantage to the plaintiff of prosecuting a class action in this province, and (5) no apparent
significant juridical disadvantage to the Crown, there was sound reason for the judge to
have exercised his discretion in favour of this province as forum conveniens. There is no
reason, or basis, to interfere with his decision, and I would dismiss the appeal.
[60] There is one further matter to address. That relates to the timing of the Crown’s
motion, and particularly to the forum non conveniens aspect of the motion. Frequently
such motions are not brought until the certification stage. See Carom v. Bre-X Minerals
Ltd. (1999), 43 OR (3d) 441 (Gen. Div.), McCutcheon v. The Cash Store Inc. (2006), 27
CPC (6th) 293 (Ont. SCJ), and Pardy et al. v. Bayer Inc., 2003 NFSCTD 109, 229 Nfld. &
PEIR 242, aff ’d 2003 NLCA 45. Contra, see, for example, cases cited in I.F. Leach, “Pre-
liminary Motions in Class Proceedings: Certification and Other Contenders” (2005) 2
Can. Class Act. Rev. 141 at 160-61. In Englund et al. v. Pfizer Canada Inc. et al., 2006 SKQB
6, 274 Sask. R 172, Klebuc J (as he then was) held that granting a stay prior to certification
would be premature. There were similar proceedings in Ontario, and in denying the stay
the judge said (at para. 41):
… A stay order in these circumstances would amount to an abdication of this court’s respon-
sibility to persons within its jurisdiction … Should an Ontario court certify the Ontario
Action with class provisions that protected the interests of claimants contemplated in the
Sask Action, or vice versa, serious consideration then could be given regarding which action
should be stayed, or whether a transfer of part of either action would be practical. …
[61] In Pardy, Mercer J said (at para. 15):

… Prior to its certification as a class proceeding, an action should not be considered to have
been commenced by a member of the putative class who is not a representative plaintiff, in
the absence of class [sic] evidence of that member’s participation in the action. …
[62] At present there is only one plaintiff. There is still a limited amount of evidence
before the court. At some point the plaintiff must seek certification of the proceeding as
a class proceeding, and further evidence will undoubtedly be presented. The proposed
class of plaintiffs may comprise residents and non-residents or be divided into subclasses.
[63] It would not be surprising if at the certification stage, depending on all the evi-
dence before the court at the time, including the likely composition of the class, the Crown
renewed its motion, or at least the forum non conveniens aspect of its motion. While the
Act clearly contemplates that there could be a subclass of non-residents, the Crown may
nevertheless decide to argue, perhaps only with respect to non-residents (whether or not
they are a separate subclass), and based on all the evidence then before the court, that it
has become clear that Manitoba no longer has jurisdiction simpliciter or has become forum
non conveniens.
[64] The case management powers in the Act (see ss. 12 and 13) permit the court “at
any time” to make appropriate orders, including orders to stay proceedings. Such a motion
would require the court to consider, on the basis of the additional facts before it, whether
it had or should exercise jurisdiction over non-resident plaintiffs, or even over resident
plaintiffs. In sustaining the judge’s decision, I would expressly reserve the right to the
Crown to make such a motion.
[65] There will be future opportunities, as the plaintiff acknowledges, for a Manitoba
court to take into account events that might transpire in the courts of other provinces,
and, if appropriate, to reflect in a subsequent order those principles of judicial comity
referred to in Morguard [Investments Ltd v De Savoye, [1990] 3 SCR 1077] and Harrington
[v Dow Corning Corp, 2000 BCCA 605], among other cases. The present order is not
necessarily the last Manitoba word in this case on the subject of jurisdiction.
[66] As indicated above, I would dismiss the appeal. As to costs, s. 37 of the Act is
quoted above. This action is not yet a “class proceeding,” defined in s. 1 as a proceeding
certified as such. It may become one, or it may never become one. The Act states that “no
costs may be awarded against any party with respect to any stage of a class proceeding,”
except in certain limited circumstances. We did not hear argument on the question of
costs, nor was the matter addressed to any extent in the facta submitted by the parties. I
would, therefore, permit the parties to file written submissions on costs, within 30 days
of the date of these reasons (the plaintiff within 15 days, and the Crown by the 30th day),
and a decision on costs will follow soon after.

Black, Vaughan. “Conditional Forum Non Conveniens in Canadian Courts” (2013) 39 Queen’s
LJ 41.
Black, Vaughan & John Swan. “Concurrent Judicial Jurisdiction: A Race to the Courthouse or
to Judgment? Lloyd’s Underwriters v. Cominco Ltd.” (2008) 46 Can Bus LJ 292.
Briggs, Adrian. “The Unrestrained Reach of an Anti-Suit Injunction: A Pause for Thought”
[1997] LMCLQ 90.
Castel, Matthew E. “Anti-Foreign Suit Injunctions in Common Law Canada and Quebec
Revisited” (2012) 40 Adv Q 195.
Edinger, Elizabeth. “Conflict of Laws—Jurisdiction—British Columbia Residents Bringing
Action for Damages in Texas Against Non-British Columbia Resident Defendants—
Defendants Seeking Anti-Suit Injunction in British Columbia: Amchem Products v. Workers’
Compensation Board” (1992) 71 Can Bar Rev 117.
Edinger, Elizabeth. “The Problem of Parallel Actions: The Softer Alternative” (2010) 60 UNBLJ
116.
Pitel, Stephen GA. “The Canadian Codification of Forum Non Conveniens” (2011) 7 J Priv Intl L
251.
Raphael, Thomas T. The Anti-Suit Injunction (Oxford: Oxford University Press, 2008).
Saumier, Genevieve & Jeffrey Bagg. “Forum Selection Clauses Before Canadian Courts: A Tale
of Two (or Three?) Solitudes” (2013) 46 UBC L Rev 439.
PA R T T H R E E
Foreign Judgments
CHAPTER EIGHT
Recognition and Enforcement of

Foreign Judgments and
Arbitral Awards
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
II. The Common Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
A. Pecuniary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
1. Final and Conclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
2. Jurisdiction of the Foreign Court in the International Sense . . . . . . . . . . . . . . 400
3. Defences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426
B. Non-Pecuniary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438
C. Class Action Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
III. Conversion by Registration: Statutory Modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
A. Reciprocal Enforcement of Judgments Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
B. The 1924 and 1958 Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480
C. The Post-Morguard Model Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486
IV. Arbitral Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491
V. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
I. INTRODUCTION
It is a fundamental tenet of territorial sovereignty that the laws and orders of one sovereign
cannot be directly enforced in the territory of another. The corollary is that all jurisdictions
have rules that provide for “conversion” of foreign orders to local orders, enforceable by local
processes. Nothing prevents a sovereign from waiving the right to require conversion of
foreign judgments and orders, but few incursions have yet been made. Similarly, nothing
prevents one state from denying recognition to judgments and orders of all other states, but
such a degree of non-cooperation is not considered to be in the self-interest of the state.
The material in this chapter deals with the rules for converting pecuniary and non-pecuniary
in personam judgments only. In rem judgments are subject to their own special rules. It is a
nice question of Canadian constitutional law whether those special rules also are subject to
scrutiny under the Morguard principle (Morguard Investments Ltd v De Savoye, [1990] 3 SCR
1077, 76 DLR (4th) 256 (reproduced in Chapter 3)) and, if so, how they will fare.
The traditional English common law rules for recognition and enforcement of foreign
judgments can best be described as grudging. They concede to foreign courts a far narrower
jurisdiction than English courts are prepared to assume for themselves. In fact, they concede
393
394 Chapter 8 Recognition and Enforcement of Foreign Judgments and Arbitral Awards
to foreign courts only the equivalent of the grounds for English jurisdiction as of right—pres-
ence and submission. In addition, the common law provides the foreign judgment debtor
with a variety of defences to recognition and enforcement that may allow the English court
to refuse recognition even where the foreign court is conceded to have had jurisdiction
according to the forum rules.
The common law provinces adhered faithfully to the common law rules until 1990, miti-
gating their narrowness only by devising a statutory process of conversion for judgments
from selected foreign jurisdictions that went to the mode of conversion but not the grounds.
The reciprocal enforcement of judgments statutes authorized conversion by registration of
the foreign judgment in place of the traditional common law action.
In 1990, the Supreme Court of Canada effected a radical change to the common law rules
for recognition and enforcement by its decision in Morguard. It created a new basis for
assessing the jurisdiction of the foreign court. The new rule was said by the court to be only
another common law rule and to be applicable only within Canada, but the court in Hunt v
T&N plc, [1993] 4 SCR 289, 109 DLR (4th) 16 (reproduced in Chapter 3) subsequently held it to
be a constitutional rule. In Beals v Saldanha, 2003 SCC 72, [2003] 3 SCR 416, 234 DLR (4th) 1
(reproduced below in Section II.A, “Pecuniary Judgments”), the court finally formally
approved the extension of the new basis to non-Canadian judgments. The new basis for
recognition is so broad and imprecise that it is likely to replace the traditional common law
rules or, at least, to force a defendant into submission within the meaning of the traditional
rules because of uncertainty about the application of the new rule. Concern about that
uncertainty and the breadth of the Morguard rule persuaded the United Kingdom Supreme
Court to reject the Morguard expansion of the common law bases for recognition of foreign
judgments in Rubin v Eurofinance SA, [2012] UKSC 46.
In Pro-Swing Inc v Elta Golf Inc, 2006 SCC 52, [2006] 2 SCR 612 (reproduced below in Sec-
tion II.B, “Non-Pecuniary Judgments”), the Supreme Court made another radical change to
the traditional common law rules by approving, at least in principle, the recognition and
enforcement of non-pecuniary orders issued by foreign courts.
The increasing attractiveness, domestically and internationally, of arbitration as an
alternative to litigation produced a legislative response of encouragement. In result, there is
an abundance of legislation dealing with arbitration sorted by category (domestic, com-
mercial, and international). That legislation includes rules for recognition and enforcement
of arbitral awards.
More recently, the common law rules for recognition and enforcement of Canadian (and
only Canadian) judgments and orders have been supplemented—and modified—by prov-
incial statutes based on a model statute drafted by the Uniform Law Conference of Canada.
II. THE COMMON LAW RULES

A. Pecuniary Judgments
The traditional common law rules require the foreign judgment creditor to persuade the
forum that:
1. the foreign judgment is final and conclusive, and
2. the foreign court had jurisdiction in the international sense.
II. The Common Law Rules 395
An action on a pecuniary foreign judgment at common law has traditionally been viewed
as an action in debt, the debt having been created by the foreign judgment. Technically, it
was an action in assumpsit. For limitation period purposes, an action on a foreign judgment
was, therefore, subject to the same limitation period as a domestic action in debt, often six
years, regardless of the limitation period attached to the enforcement of a judgment in
either the forum or the originating jurisdiction.
A number of provinces have now reduced the limitation period for all causes of action to
two years. Not all have enacted a provision dealing with actions on foreign judgments. In
Ontario, for example, the Limitations Act, SO 2002, c 24 creates a two-year limitation period
for all causes of action (with some specified exceptions), but imposes no limitation periods
on enforcement of judgments. Commission de la Construction du Québec v Access Rigging Ser-
vices Inc, 2010 ONSC 5897, held that a foreign judgment was subject to the two-year limitation
period. In British Columbia, on the other hand, the Limitation Act, SBC 2012, c 13, contains a
provision expressly dealing with foreign judgments and setting a limitation period of the
earlier of ten years and the limitation period of the originating jurisdiction. The relevant lim-
itations legislation (and, where relevant, the case law) of each province must be consulted.
Another distinction between domestic and foreign judgments is that the doctrine of res
judicata does not apply to foreign judgments. The cause of action is not considered to have
merged in the foreign judgment. It may be possible, therefore, for a plaintiff to sue again on
the original cause of action should the foreign judgment be one not recognizable by the
forum.
The traditional common law rules were more or less incorporated into the reciprocal
enforcement of judgments legislation enacted in all the provinces, but those statutes have
never been amended to incorporate Morguard expressly. Such statutes include limitation
period provisions, however, so changes to the general limitations statutes do not affect the
limitation periods for registration.
1. Final and Conclusive
Nouvion v Freeman
(1889), 15 App Cas 1 (HL)
LORD HERSCHELL:
My Lords, this appeal arises in an action brought by the appellant, the plaintiff below,
for the administration of the estate of a deceased gentleman named Henderson. In order
to found his claim to an order for the administration of that estate it became necessary
for him to shew that he was a creditor of the deceased. The case presented by him for the
purpose of making that out was that he had obtained a judgment of a foreign court upon
which he was entitled to sue in this country, and which in this country established the
existence of a debt. Under those circumstances the court ordered that there should be
first tried the issue, “whether the judgment or decree” upon which he relied, one pro-
nounced on the 5th of April 1878, “and the other judgments or decrees whereof particulars
have been delivered, or any and which of them, are orders or judgments upon which the
claim of the plaintiff in this action or some and what part of it can be sustained.”
It appears that Mr. Henderson, the administration of whose estate is in question, had
purchased certain properties in the district of Seville of the plaintiff, Mr. Nouvion, and that
the deeds by which these properties were conveyed, and which contained an obligation to
make certain payments, were registered in the registry of the district of San Roman, and
where deeds of that description are so registered, according to the law of Spain, the person
who is entitled to payment under them can obtain what is called an “executive” judgment.
It is necessary to state distinctly what the nature of that judgment is; because I think
it will be found that the decision of your Lordships must be determined by that consider-
ation. In an action of this nature only a very limited number of defences can be raised by
the person sued. He cannot impeach the instruments upon which the action is founded
or shew that they were obtained by fraud, or that on any other ground they did not
properly form the basis of an obligation on his part. He can only defend himself by such
defences as are open to him on the assumption that the deeds were valid, and in the first
instance did create the obligation. He may shew that there has been a waiver, or that he
has discharged the obligation by payment or otherwise, but substantially I think those
are the only defences open to him. It is open to either of the parties to such an instrument
to sue in the same court in another form of action, which is called a declaratory or plenary
action, and which is said to be the ordinary course, not as meaning that the other is a
course which can only be taken under exceptional circumstances, but that the one con-
forms to the general and ordinary rules of procedure in an action in the Spanish courts,
and that the other is a special procedure allowed in particular cases. In such a plenary
action, to which either of the parties may have recourse, every defence which may be
available is open as well as every consideration establishing the ground of action; and
such a plenary action may be instituted by either of the parties to the executive action;
that is to say, the party against whom the decision has been pronounced in the executive
action, be he plaintiff or defendant, is at perfect liberty to sue in a plenary action for the
purpose of obtaining a declaration of the rights of the parties; and in such a plenary action
the fact that a judgment has been delivered in an executive action cannot be set up as at
all affecting the rights of the parties, either in the way of proof or of title to succeed in the
plenary action. The same points which have been decided in the executive action can
again be raised in the plenary action, as well as other questions which were not open in
the executive action. No effect is given, in the court in which it was pronounced and in
which afterwards the plenary action may be pending, to the judgment in the executive
action as being res judicata and as finally concluding the rights of the parties upon any
point whatever.
My Lords, in the present case the plaintiff, Mr. Nouvion, who was a party to the agree-
ments which I have mentioned, and which had been duly registered, brought an executive
action, and in that executive action, a decree was pronounced in these terms: “Let an
order of execution be issued against the property and goods of Mr. William Henderson
for the principal amount of 697,135 reales, 60 centimos, and also for the amount of the
legal interests thereon from the date of default being made by not meeting” certain drafts
which are there mentioned.
It appears that owing to the absence of Mr. Henderson from Spain it became necessary,
in accordance with the procedure of the Spanish courts, to send letters requisitorial to this
country, that is to say, to Scotland, where Mr. Henderson was resident, and to obtain from
the Spanish consul in Scotland a return to those letters, which intimated that Mr. Henderson
had not discharged, as he would then have had an opportunity of doing, the liability which
was declared by the judgment. Thereupon Mr. Henderson having intervened and having
alleged that the debt was not due by reason of a promise of the plaintiff not to sue him,
and that point having been decided against him, a decree was made, which I think may
properly be termed a final decree in that action, that the distraint be carried into effect,
“and in virtue thereof sale by auction be made of the property attached, and out of the
proceeds thereof entire and complete payment to the executive plaintiff of the amount of
the principal demanded” with interest and costs.
My Lords, the plaintiff relies upon that judgment as being sufficient to entitle him,
when he sues upon it in the courts of this country, to a judgment for the amount of the
debt for which it was ordered that execution should issue, and the only question in this
case is whether, under the circumstances which I have mentioned, that judgment is suf-
ficient to entitle him in the courts of this country to a judgment for his debt as being a
creditor of the deceased person, Mr. Henderson.
Now, my Lords, there can be no doubt that in the courts of this country effect will be
given to a foreign judgment. It is unnecessary to inquire upon what principle the courts
proceed in giving effect to such a judgment, and in treating it as sufficient to establish the
debt. Reliance was placed upon a dictum by Parke B and Alderson B in the case of Wil-
liams v. Jones [(1845), 13 M & W 628, 633], where the law is thus stated: “Where a Court
of competent jurisdiction has adjudicated a certain sum to be due from one person to
another, a legal obligation arises to pay that sum, on which an action of debt to enforce
the judgment may be maintained.” But it was conceded, and necessarily conceded, by the
learned counsel for the appellant, that a judgment, to come within the terms of the law
as properly laid down, must be a judgment which results from an adjudication of a court
of competent jurisdiction, such judgment being final and conclusive. I shall of course
have something to say upon the meaning which must be given to those words, but the
general proposition in that form is not disputed by the learned counsel for the appellant.
They contend that this judgment is final and conclusive, and no doubt in a certain sense
that must be conceded. It puts an end to and absolutely concludes that particular action.
About that there can be no manner of doubt—in that sense it is final and conclusive. But
the same may be said of some interlocutory judgments upon which there can be no ques-
tion that an action could not be maintained; they do settle and conclude the particular
proceeding, the interlocutory proceeding, in which the judgment is pronounced. It is
obvious, therefore, that the mere fact that the judgment puts an end to and finally settles
the controversy which arose in the particular proceeding, is not of itself sufficient to make
it a final and conclusive judgment upon which an action may be maintained in the courts
of this country, when such judgment has been pronounced by a foreign court.
My Lords, I think that in order to establish that such a judgment has been pronounced
it must be shewn that in the court by which it was pronounced it conclusively, finally, and
for ever established the existence of the debt of which it is sought to be made conclusive
evidence in this country, so as to make it res judicata between the parties. If it is not
conclusive in the same court which pronounced it, so that notwithstanding such a judg-
ment the existence of the debt may between the same parties be afterwards contested in
that court, and upon proper proceedings being taken and such contest being adjudicated
upon, it may be declared that there existed no obligation to pay the debt at all, then I do
not think that a judgment which is of that character can be regarded as finally and
conclusively evidencing the debt, and so entitling the person who has obtained the judg-
ment to claim a decree from our courts for the payment of that debt.
The principle upon which I think our enforcement of foreign judgments must proceed
is this: that in a court of competent jurisdiction, where according to its established pro-
cedure the whole merits of the case were open, at all events, to the parties, however much
they may have failed to take advantage of them, or may have waived any of their rights,
a final adjudication has been given that a debt or obligation exists which cannot thereafter
in that court be disputed, and can only be questioned in an appeal to a higher tribunal.
In such a case it may well be said that giving credit to the courts of another country we
are prepared to take the fact that such adjudication has been made as establishing the
existence of the debt or obligation. But where, as in the present case, the adjudication is
consistent with the non-existence of the debt or obligation which it is sought to enforce,
and it may thereafter be declared by the tribunal which pronounced it that there is no
obligation and no debt, it appears to me that the very foundation upon which the courts
of this country would proceed in enforcing a foreign judgment altogether fails.
It has been suggested that a judgment obtained in an “executive” action may be
regarded as analogous to a judgment obtained in a common law action in the time prior
to the Judicature Act, the execution of which might be restrained by a Court of Equity,
so as to prevent the plaintiff who had succeeded in such an action from obtaining the
fruits of his judgment. I do not think that such an analogy is a complete one; but even if
it were more complete than I think it to be, it appears to me that it would afford very little
assistance to your Lordships unless we could know what had been the course adopted
with regard to such judgments in countries in whose system of law the same force and
effect are given to foreign judgments as are given in the courts of this country. Upon that
point we have had no information whatsoever.
Then, my Lords, it is said that such a judgment is analogous to a judgment which has
been obtained upon which a suit may be instituted in the courts of this country, even
although an appeal may be pending. It appears to me that there is a vital distinction
between the two cases. Although an appeal may be pending, a court of competent juris-
diction has finally and conclusively determined the existence of a debt, and it has none
the less done so because the right of appeal has been given whereby a superior court may
overrule that decision. There exists at the time of the suit a judgment which must be
assumed to be valid until interfered with by a higher tribunal, and which conclusively
establishes the existence of the debt which is sought to be recovered in this country. That
appears to me to be in altogether a different position from a “remate” judgment, where
the very court which pronounced the “remate” judgment (not the Court of Appeal) may
determine, if proper proceedings are taken, that the debt for which this “remate” judgment
is sought to be used as conclusive evidence has no existence at all.
My Lords, the plaintiff in such a suit, an executive suit, is not, by the decision which
is now under appeal, deprived of his rights. He may still sue upon the original cause of
action. Of course it may happen, as in this particular case, that such a suit is barred by
lapse of time, but that is an accident. The right of the plaintiff to sue on his original cause
of action is not at all interfered with by the judgment which has been pronounced; and
in such an action, if it were brought, all questions upon which the rights of the parties
depend, and by the solution of which the obligation to pay must ultimately be determined,
would be open to consideration and could be dealt with by the courts, and finally and
conclusively settled. I do not, therefore, see that there is any wrong or any hardship done
by holding that a judgment which does not conclusively and for ever as between the
parties establish the existence of a debt in that court cannot be looked upon as sufficient
evidence of it in the courts of this country.
Very ingenious arguments have been urged upon your Lordships by the learned
counsel for the appellant, and they have strenuously contended that the proper course
would be to permit such a judgment to be sued upon and that justice might be done by
staying proceedings as might be done in the case of an English judgment sued upon,
which was under appeal.
But no authority has been cited, no case has been referred to, which supports the view
put forward on the part of the appellant that an action upon such a judgment as this could
be maintained, and I certainly cannot advise your Lordships to make such a precedent,
because it appears to me, after giving due weight to all the arguments of the learned
counsel for the appellant, that on the whole the result would as a general rule be likely to
be mischievous and to work injustice rather than justice between the parties.
For these reasons I move your Lordships that the judgment appealed from be affirmed,
and the appeal dismissed with costs.
[Concurring judgments were rendered by Lords Watson, Bramwell, and Ashbourne.]
A judgment is considered final and conclusive for purposes of recognition and enforcement
even if there is still time to appeal the originating judgment and even if that judgment is
under appeal: see Colt Industries v Sarlie (No 2), [1966] 1 WLR 1287 (CA). An action to convert
may, therefore, be commenced even though the court may be vested with jurisdiction to
stay proceedings. The British Columbia Supreme Court Civil Rules provide e.g. in r 19-3(9):
A defendant in an action on a foreign judgment, whether or not it is a reciprocally enforceable
judgment, on proof that an appeal or other proceeding in the nature of an appeal is pending,
or the time for an appeal has not expired, may apply for an order staying the proceeding until
the determination of the appeal or other proceeding on terms that the court may impose.
In Pro-Swing Inc v Elta Golf Inc, 2006 SCC 52, [2006] 2 SCR 612 (reproduced below in Sec-
tion II.B), the court held that, to be enforceable, non-pecuniary orders must be clear and
specific. In South Pacific Import Inc v Ho, 2009 BCCA 163, the court found that a California
pecuniary judgment was not sufficiently clear and specific to be considered final and con-
clusive for purposes of conversion by registration. Levine JA stated:
[53] On its face, the California judgment is for a definite sum of money, and is final and
conclusive. It is not certain, either on its face or from the record, however, whether it is payable
to SPI and Mr Go jointly, severally, or jointly and severally. It does not distinguish between the
claims of SPI and Mr Go.
The court ordered the registration of the California judgment set aside.
The fact that an action may be commenced, even though it may be stayed, can be of
considerable significance to the foreign judgment creditor from the enforcement perspec-
tive. The bare commencement of the action will give that plaintiff standing to issue a
pre-judgment garnishing order (where available) or to apply for a Mareva injunction: see
NEC Corp v Steintron International Electronics Ltd (1985), 52 OR (2d) 201, 5 CPC (2d) 187 (H Ct J).
Both pre-judgment remedies are directed to prevention of dry judgments by preservation
of assets. Both, of course, are subject to judicial review and neither may be found to be
appropriate in the circumstances of a particular case, but the common law action is, in this
respect, superior to conversion by the statutory mode that prohibits registration until the
appeal has been determined or the appeal period has expired. In the absence of registration,
the foreign judgment creditor has no standing to apply for pre-judgment assistance except,
possibly, in Alberta under part 3 of the Civil Enforcement Act, RSA 2000, c C-15. This defect
(from the judgment creditor perspective) has been remedied in the Uniform Law Confer-
ence of Canada (ULCC) Model Act, the Enforcement of Canadian Judgments and Decrees Act.
That statute permits registration of a Canadian judgment even when subject to appeal.
2. Jurisdiction of the Foreign Court in the International Sense

A foreign court will be held to have had jurisdiction in the international sense for purposes
of recognition and enforcement of a particular judgment if any one of three conditions is
satisfied:
1. the defendant was present in the jurisdiction at the time the action was commenced;
2. the defendant voluntarily submitted to the jurisdiction of the foreign court; or
3. there was a real and substantial connection between the action and the jurisdiction.
Other bases, such as nationality, domicile, and ownership of property in the foreign jurisdic-
tion, were canvassed in early judgments, such as Schibsby v Westenholz (1870), LR 6 QB 154, but
none can now be considered a reliable basis for according jurisdiction to the foreign court.
a. Presence
Presence for natural persons is easy to determine as a matter of fact but there may be a
question of law for purposes of determining jurisdiction as to whether presence must be of
any minimum duration. The presence of legal entities is a matter of mixed fact and law. The
law governing corporate presence for purposes of local jurisdiction, discussed in Chapter 6,
is equally applicable to corporate presence for the establishment of jurisdiction in the inter-
national sense in the context of recognition and enforcement.
Forbes v Simmons
(1914), 20 DLR 100 (Alta SC)
SIMMONS J:
This is a motion for judgment under Rule 103 Judicature Ordinance upon a foreign
judgment recovered against the defendant in British Columbia. When action was brought
in British Columbia, the defendant was domiciled in the province of Alberta but was
served with the writ while on a casual visit in the province of British Columbia. On the
material filed there is a dispute as to whether an appearance filed by solicitors was author-
ized by the defendant and I am not able to find that it was authorized and I, therefore,
deal with the matter on the basis that no appearance authorized by the defendant was
filed. The defendant contests the validity of the British Columbia judgment on the ground
of absence of jurisdiction as the defendant did not enter an appearance and did not agree
to submit to jurisdiction of the foreign court. The defendants rely on Sirdar Gurdyal Singh
v. Rajah of Faridkote, [1894] AC 670, and Emanuel v. Symon, [1908] 1 KB 302, Lord
Selborne in delivering judgment in the East Indian case above cited, discusses very fully
the law governing the extent to which territorial legislation can give jurisdiction which
any foreign court ought to recognize against any foreigner who owes no allegiance or
obedience to the power which so legislates; and the expression of Blackburn J, in Schibsby
v. Westenholz, LR 6 QB 155 at 161 that
if at the time when the obligation was contracted the defendants were within the foreign
country, but left it before the suit was instituted, we should be inclined to think the laws of
that country bound them, though before finally deciding this we should like to hear the
question argued.
is commented upon by Lord Selborne in these words:

[U]pon this sentence it is to be observed that beyond doubt in such a case the laws of the
country in which an obligation was contracted might bind the parties, so far as the inter-
pretation and effect of the obligation was concerned, in whatever forum the remedy might
be sought. The learned Judge had not to consider whether it was a legitimate consequence
from this, that they would be bound to submit on the footing of the contract or otherwise,
to any assumption of jurisdiction over them in respect of such a contract, by the tribunals
of the country in which the contract was made, at any subsequent time, although they might
be foreigners resident abroad: that question was not argued and did not arise in the case there
before the Court, and if this is what Blackburn J meant, their lordships could not regard any
mere inclination of opinion on a question of such large and general importance, on which the
Judges themselves would have desired to hear argument, if it had required decision, as entitled
to the same weight which might be due to a considered judgment of the same authority.
In the same judgment Lord Selborne observes:

Territorial jurisdiction attaches (with special exceptions) upon all persons either permanently
or temporarily resident within the territory while they are within it, but it does not follow
them after they have withdrawn from it and when they are living within another independent
territory. It exists always as to land within the territory and it may be exercised over movables
within the territory, and in questions of status or succession governed by domicile, it may
exist as to persons domiciled, or who, when living, were domiciled within the territory. As
between different provinces under one sovereignty (e.g. under the Roman Empire), the
legislation of the sovereign may distribute and regulate jurisdiction: but no territorial legis-
lation can give jurisdiction of any foreign Court ought to recognize against foreigners who owe
no allegiance or obedience to the power which so legislates.
In a personal action to which none of these cases of jurisdiction apply a decree pro-
nounced in absentem by a foreign Court to the jurisdiction of which the defendant has not
in any way submitted himself is by international law an absolute nullity.
The defendant seeks to come under the effect of this rule on the ground that he should
not be considered as a resident of British Columbia, either temporary or otherwise as his
presence there was casual and for the purpose of visiting his wife who was ill in the
hospital at Vancouver. I am not able to give effect to this contention. The essence and
foundation of the jurisdiction is the fact that the person or property, as the case may be,
is within the territory. If the defendant could succeed on this ground it would have the
effect of curtailing in a considerable degree the well established doctrine of the supremacy
of a state within its own territory. An exception, however, is made in accordance with
international law in favour of the person of the Sovereign, Ambassador or diplomatic
agent of the foreign country. See Dicey on the Conflict of Laws, 360, and Hall on Inter-
national Law, ss. 49-53.
I cannot find any authority for the proposition that the special circumstances under
which the defendant was present in the foreign jurisdiction where action was begun and
service made upon him would have the effect of modifying the general rule that territorial
jurisdiction is effective against him on account of his presence in the territory when action
was begun and process served upon him.
The plaintiff is entitled to succeed on his motion for judgment and costs of this
application.
Judgment for plaintiff.
b. Submission
A defendant in a foreign action may discover that a step taken in that action is found by the
recognizing court to have constituted submission to the jurisdiction of the foreign court.
That step must have been voluntarily undertaken. There is no finite list of ways in which a
defendant may voluntarily submit but some forms of submission are more common than
others.
First National Bank of Houston v Houston E & C Inc

[1990] 5 WWR 719 (BCCA)
SOUTHIN JA (Woods and Gibbs JJA concurring):

This is an appeal from a judgment pronounced after a trial pursuant to R 18A [[1989]
BCWLD 444, CLD 275] awarding the plaintiff judgment upon a foreign judgment, namely,
that of the District Court of Harris County in Texas bearing date of August 26, 1985, in
the amount of $51,978 US and interest—what the exact numbers are in Canadian dollars
I have not checked.
The writ in this action was issued on the 4th October, 1985. The plaintiff in its amended
statement of claim asserted not only the judgment but also that the defendant company
gave a promissory note for $50,000 in August, 1984 to the plaintiff and that the personal
defendants had in February, 1984 guaranteed repayment of all the debts of the company,
past, present, and future. The plaintiff thus claimed both on the original cause of action
and upon its judgment.
There were numerous defences raised in the statements of defence delivered in Nov-
ember, 1985, including the usual complete denial of everything. Some of the other
defences go to the enforceability of the judgment and others to the merits of the under-
lying cause of action. …
• • •
The evidence discloses that the proceedings were commenced in Texas on the 19th
April, 1985. On the 19th June, 1985 a firm of lawyers filed or delivered (whatever is done
in Texas) a document called an original answer.
• • •
As to … [the issue of attornment] it raises questions of law and one of fact. The first
question is whether either before the judgment in Texas by the Answer filed the 19th of
June, 1985 or after by the Bill of Review, the defendants voluntarily submitted to the
jurisdiction of the Texas court as that term of voluntary submission has been explained
in such cases as Henry v. Geopresco Int. Ltd., [1976] QB 726, [1975] 3 WLR 620, [1975] 2
All ER 702, a judgment of the Court of Appeal and which has been adopted by this court
in a case in 1982, the name of which escapes me for the moment.
To appear without protest in a foreign action has always been considered a voluntary
submission under our rules of the conflict of laws. Were it not for the attack on the author-
ity of Mr. Schwartz, the answer of the 19th of June is the equivalent of an appearance
without protest.
What then of that attack? The affidavits do not say that Mr. Schwartz had no authority
to act for these defendants nor that he did without instructions file that answer. What Mr.
Schwartz says is that he had no instructions to attorn. But a litigant can by the acts he
does or which are done on his behalf attorn although he has no intention of doing so as
was indeed the case I think in the Henry decision. He is nonetheless attorning even if he
has been given erroneous legal advice as to what constitutes a submission or what the
result will be of the act which he does. If a lawyer has no authority to do the act he did,
that is to say here, file the answer, it may be that what appears to be a submission is no
submission. That need not be decided. Upon the evidence in this case it was open to the
learned judge below to find, in effect, that the lack of authority was not made out. The
burden of proving that was, in my view, upon the defendants.
I should make some reference to the Bill of Review. Mr. Russell says it was brought
after the judgment and therefore cannot constitute a submission so as to make this judg-
ment one that could be sued upon. To put it another way, he says that if the cause of action
on the judgment was not complete on the date it was entered in August, 1985, because
there had then been neither service nor submission, the cause of action could not be made
complete by a subsequent submission. I need not decide that point and prefer to leave it
to an occasion when the decision of it is essential to the parties’ rights.
In this court other issues were raised that are not referred to in the judgment below.
One was founded on para. 12 of the amended statement of defence. The evidence of the
so-called alteration is that it did not change anything at all from what was intended by
the parties, that is to say, a promissory note in certain terms from the corporate defendant
to the plaintiff. The alteration that is referred to did not change that. The note remained
what it was supposed to be.
Another issue touched on was an argument that the whole of the procedure in Texas
concerning jurisdiction over defendants out of the jurisdiction is contrary to our notions
of substantial justice. But, there was no admissible evidence before us as to the law of
Texas and foreign law is a question of fact. I must assume, there being no admissible
evidence to the contrary, that its law as to service out of the jurisdiction is essentially the
same as ours. If a foreign jurisdiction’s law as to service out of the jurisdiction or means
of service is essentially the same as ours it cannot be contrary to our notions of substantial
justice. In my view, the evidence here simply did not lead to a conclusion as I have said
that the law of Texas is different from ours.
For these reasons I would dismiss the appeal.
Clinton v Ford
(1982), 37 OR (2d) 448, 137 DLR (3d) 281 (CA)
HOULDEN JA (Dubin and Blair JJA concurring):

On July 8, 1981, His Honour Judge Sullivan, pursuant to a motion under Rule 63
[rep & sub O Reg 1030/80, s 1], awarded judgment to the plaintiff for $6,011.55 together
with post-judgment interest and costs. In this appeal the defendant seeks an order setting
aside the judgment and referring the matter back to the county court for trial. Although
the amount involved in the appeal is not large, the appeal raises some very difficult
problems in the conflict of laws.
In 1976, the plaintiff and the defendant were both resident in South Africa. The defend-
ant was a solicitor, practising law at Westville, South Africa. In August, 1976, the plaintiff
entered into an agreement with the defendant for the purchase of a Land Rover motor
vehicle. In August, 1977, the defendant moved to the city of Hamilton in the province of
Ontario. He has resided in Ontario since that time.
On March 22, 1978, the plaintiff obtained an ex parte order in the Supreme Court of
South Africa authorizing the Deputy Sheriff of Durban to hold three parcels of land in
South Africa owned by the defendant pending the final determination of an action to be
brought by the plaintiff against the defendant for cancellation of the agreement for the
purchase of the Land Rover. The order also gave the plaintiff leave to issue an edictal
citation for an order declaring the purchase agreement to be lawfully cancelled and for
judgment for SA rand 2,300, and to serve the citation upon the defendant in Hamilton.
The edictal citation, which is the equivalent of our writ of summons and statement of
claim, was issued on July 17, 1978. Together with a copy of the order of March 22nd, it
was personally served on the defendant at the city of Hamilton on August 15, 1978.
When examined for discovery in this action, the defendant testified that, when he was
served with the edictal citation, he entered an appearance by mail. He stated that he
entered the appearance because he “realized if I didn’t do anything that there were three
properties that a judgment would be taken and the three properties would be sold.” There
is no copy of the appearance in the material filed with this appeal.
The edictal citation required the defendant to file and serve within 30 days of the service
of the citation a notice of intention to defend the action, giving an address for service in
South Africa for all notices and documents in the action. The citation makes no reference
to entering an appearance. On his examination for discovery, the defendant swore that he
filed a notice of intention to defend as required by the citation. The defendant gave the
address of his former law firm in South Africa as the address for service of documents.
On September 21, 1978, the plaintiff brought an application for summary judgment
in the South African action. In response to the application, the defendant filed an affidavit
dated October 3, 1978, outlining the nature of his defence. A defendant’s plea (the
equivalent of our statement of defence) was filed on behalf of the defendant. In his exam-
ination for discovery, the defendant alleged that he gave no instructions to his solicitors
to file the plea. The plea is dated October 31, 1978. Neither the affidavit nor the plea
contested the jurisdiction of the South African court, or the validity of the seizure of the
defendant’s property; instead, in both the affidavit and the plea, the defendant defended
the action on the merits.
The plaintiff proceeded with his motion for judgment and on May 3, 1979, obtained
default judgment in the Supreme Court of South Africa against the defendant for SA rand
2,300, interest at 11% per annum to date of payment and costs. The defendant was not
represented on the motion for judgment. The attorneys for the plaintiff subsequently taxed
their costs at SA rand 1,020.26.
On April 29, 1980, the plaintiff issued a writ in the County Court of the Judicial District
of Hamilton-Wentworth for the amount due on the judgment of May 3, 1979. The plaintiff
claimed SA rand 3,570.73 made up as follows: judgment debt SA rand 2,300, interest at
11% from the date of judgment to the date of the issue of the writ SA rand 250.47, and
costs SA rand 1,020.26. No credit was given in the writ for any realization from the
defendant’s properties in South Africa that had been seized under the order of March 22,
1978. The defendant entered an appearance and filed an affidavit of merits.
In November, 1980, the plaintiff filed and served a statement of claim. In the statement
of claim, the plaintiff claimed judgment for $5,631.39, being the equivalent in Canadian
dollars of SA rand 3,570.73 as at the date of the statement of claim. The defendant filed
and served a statement of defence. The defendant was examined for discovery on May
26, 1981.
In June, 1981, the plaintiff moved for judgment pursuant to Rule 63. On July 8, 1981,
His Honour Judge Sullivan awarded the plaintiff judgment in the amount of $6,011.55,
made up of $5,631.39, the Canadian dollar equivalent of the South African judgment,
and pre-judgment interest at 11% from the date of the issuance of the statement of claim
to the date of judgment in the amount of $380.16. The judgment bears post-judgment
interest at 20% per annum.
The appellant advanced a number of grounds for setting aside the judgment of His
Honour Judge Sullivan. In my opinion, only three of these require comment.
I
The defendant contends that he did not voluntarily attorn to the jurisdiction of the South
African court, but that the steps taken by him to defend the South African action were
taken with the sole purpose of protecting his South African assets; and hence the judg-
ment is not binding on him.
In Henry v. Geopresco Int’l Ltd., [1976] 1 QB 726, the English Court of Appeal reviewed
the law on the enforceability of foreign judgments and summed up its conclusions in the
following three propositions (at pp. 746-7):
(1) The English courts will not enforce the judgment of a foreign court against a defendant
who does not reside within the jurisdiction of that court, has no assets within that jurisdiction
and does not appear before that court, even though that court by its own local law has juris-
diction over him. (2) English courts will not enforce the judgment of a foreign court against a
defendant who, although he does not reside within the jurisdiction of that court, has assets
within that jurisdiction and appears before that court solely to preserve those assets which have
been seized by that court. (3) The English courts will enforce the judgment of a foreign court
against a defendant over whom that court has jurisdiction by its own local law (even though
it does not possess such jurisdiction according to the English rules of conflict of laws) if that
defendant voluntarily appears before that foreign court to invite that court in its discretion
not to exercise the jurisdiction which it has under its own local law.
(My emphasis.) It is, of course, the second proposition that is relevant for this case.
The learned editors of Dicey and Morris on The Conflict of Laws, 10th ed. (1980), vol. 2,
at pp. 1049-50, after criticizing the judgment in Henry v. Geopresco Int’l Ltd., supra, on
grounds that are irrelevant to this appeal discuss the problem that arises in this case. After
referring to the Foreign Judgments (Reciprocal Enforcement) Act, 1933, which provides
that an appearance solely for the purpose of protecting or obtaining the release of property
seized or threatened with seizure is not a voluntary appearance, the editors ask this ques-
tion: “How far does this represent the common law rule?” They give the following answer:
First, it is clear that an appearance is not involuntary at common law merely because it is
motivated by the fact that the defendant has property within the jurisdiction of the foreign
court on which execution may be levied in the event of judgment going against him by
default; still less is an appearance involuntary when it is made because, although the defend-
ant has no property within the jurisdiction of the foreign court, his business often takes him
there, so that the judgment might be made effective against him. Secondly, an appearance is
not involuntary when it is made after execution has been levied under the judgment in order
to rescue the property which is the subject-matter of the execution. Thirdly, if property is
seized and the defendant appears and defends the case on the merits, the appearance is not
involuntary. But there are weighty dicta to the effect that an appearance merely in order to
save property arrested or attached as a basis of the jurisdiction of the foreign court will not
be regarded as voluntary at common law. Thus there may be cases in which the defendant
may appear to oppose the seizure on jurisdictional grounds, e.g. where he denies he has
property within the jurisdiction or where he challenges the validity of the seizure. In such
cases, at any rate, the appearance should not be regarded as voluntary.
(My emphasis.)
In the present case, the defendant could have elected to ignore the proceedings in
South Africa. If he had done so, the South African judgment would clearly not have been
enforceable against him. However, if he had followed this course of action, he would have
lost his property in South Africa even though there might have been no basis for juris-
diction of the South African court, or even though the seizure of his property was invalid.
In my opinion, the defendant should have had the right to appear in the South African
action for the purpose of (a) contesting the validity of the seizure of his property, or
(b) contesting the jurisdiction of the South African court, without attorning to the juris-
diction of the South African court: see The “Dupleix”, [1912] P 8; Henry v. Geopresco Int’l
Ltd., supra, at pp. 747-8; Cheshire and North’s, Private International Law, 10th ed. (1979),
at p. 640; Beale, A Treatise on the Conflict of Laws (1935), vol. 1, §82.6, pp. 352-3.
There is no proof before us that it is possible in South Africa to enter a conditional or
limited appearance. However, even if this is not possible under South African procedure,
the defendant in his defence to the application for summary judgment or in his plea could
have limited his defence to the two matters that I have mentioned. Instead, he chose to
defend the action on the merits. Having done so, I think that his appearance was a vol-
untary one, notwithstanding the seizure of his property prior to the issue of the edictal
citation. He is, therefore, bound by the South African judgment: see Read, Recognition
and Enforcement of Foreign Judgments (1938), p. 161.
Mid-Ohio Imported Car Co v Tri-K Investments Ltd

(1995), 129 DLR (4th) 181 (BCCA)
WOOD JA (orally) (Cumming and Ryan JJA concurring):

This appeal is from a summary judgment, pursuant to Rule 18A [34 CPC (3d) 369, 5
BCLR (3d) 271, 44 ACWS (3d) 234], dismissing the appellant’s claim for judgment against
the respondents for an amount equal to the equivalent in Canadian dollars of a judgment
for $334,930.50 (US), which the appellant obtained against the respondents in the Court
of Common Pleas in and for Franklin County, Ohio, one of the United States of America.
The trial judge, in giving effect to the pleaded defences, found that the respondents had
not attorned to the jurisdiction of the Ohio court, and that there was no real or substantial
connection between the appellant’s cause of action and the state of Ohio. Having reached
those conclusions, it was unnecessary for her to decide the third objection raised against
giving effect to the Ohio judgment, namely, that there was a manifest error on the face of
that judgment such that the court below ought to review the matter on its merits.
The facts giving rise to the action in the Ohio Court of Common Pleas are conveniently
summarized in the reasons of the trial judge [at 372-73]:
The plaintiff is an Ohio corporation which sells new and used cars in Columbus, Ohio. The
defendants, Tri-K Investments Ltd. and Van Royal Capital Inc., are both companies incor-
porated under the laws of the Province of British Columbia. There is conflicting evidence as
to the roles of both the defendants, Peter Triska and Tony Grieco, in the companies. The
defendant, Murray De Weerdt was a principal and/or employee of a company which is not
a party to this action. Mr. De Weerdt acting as an independent broker brought the request
for purchase of the cars from the plaintiff company to the defendant company. There was no
evidence that there was a regular business relationship between Mr. De Weerdt and either
the plaintiff company or any of the defendants. At the commencement of this motion the
plaintiff consented to dismissal of the action against Murray De Weerdt. The roles and con-
nections between all the defendants are unclear; however, all of them were involved in a
contract to supply expensive automobiles, Acura Model NSX, to the plaintiff.
The contract was entered into on or about August, 1990 for the purchase and sale of seven
Acura NSX automobiles. The contract came about after De Weerdt contacted Triska as agent
for Tri-K requesting a contract for the purchase and sale of automobiles for his client, who
was the plaintiff. The defendant Tri-K asked Grieco to fax a copy of a contract to De Weerdt
who in turn forwarded it to the plaintiff. The contract was executed by the plaintiff who
returned it to Tri-K in British Columbia.
None of the defendants carry on business in Ohio, reside in Ohio, have assets in Ohio
nor advertise their business in Ohio. The only connection with Ohio is through this one
contract with an Ohio resident.
The first vehicle, located in Ontario, was transferred to the plaintiff ’s agent who drove it
to Ohio. An agreement was made, and payment received, for delivery of a second vehicle. A
dispute arose as to who was to pay customs and brokerage charges. As a result, the second
vehicle was never received by the plaintiff.
The Ohio action was commenced on December 21, 1990 on the basis of breach of con-
tract, unjust enrichment, fraud and conversion. An action was also commenced by the
plaintiff in the British Columbia Supreme Court. The defendants retained an Ohio attorney
who filed a Motion to Dismiss. This motion was, under the Ohio Rules of Court, aimed at
disputing the jurisdiction of the Ohio Court including a submission that Ohio was not the
forum conveniens. In addition, apparently as allowed for under the Ohio rules, certain tech-
nical pleading issues were raised, in the alternative, in the same motion. These technical
issues were that the complaint failed to state a claim recognizable in Ohio law; and, the
pleading of fraud was insufficiently particular. The motion was denied and as a result, the
attorney for the defendants withdrew. No further appearances were made on behalf of the
defendants. A default judgment was entered against all of the defendants on January 7, 1992.
The Ohio judgment, which was entered jointly and severally against all defendants,
was itemized as follows:
(a) $82,310 (US) as compensatory damages;
(b) $246,930 (US) as punitive damages; and
(c) $15,690.50 (US) as reimbursement for attorney’s fees.
We were advised that since the judgment below the appellant has discontinued all
proceedings against the respondents De Weerdt and Grieco. Thus, this appeal is brought
only with respect to the claim for judgment against the respondents Tri-K Investments
Ltd., Van Royal Capital Inc. and Peter Triska.
None of these three respondents appeared before this court when the matter was
argued yesterday. It appears that their counsel of record withdrew in February of this year.
Unsuccessful efforts have been made to serve a notice of hearing on them, both by per-
sonal service and by ordinary mail, at the address for delivery left with the court by their
former counsel. In light of those efforts, and in accordance with the Rules of Court, we
held that the appellant was entitled to proceed with its appeal.
In dealing with the issue of attornment, the trial judge made the following observations
[at 374-76]:
The law is clear that to both protest jurisdiction and make submissions on the merits of an
action gives rise to attornment but, appearing solely to protest jurisdiction is not attornment.
Dovenmuehle v. Rocca Group Ltd. (1981), 34 NBR (2d) 444 (CA), at 449.
The issue for resolution is, are there issues which can be the subject of submissions before
a court which are not concerned with jurisdiction, but which also do not qualify as “the
merits”? The plaintiff argues that, in the context of private international law, “the merits”
means “any matter other than jurisdiction.” In other words, matters which in one’s home
jurisdiction are considered technical, become matters going to the merits when argued before
a foreign jurisdiction.
The defendants argue that technical matters do not change category with jurisdictions
unless of course they are considered matters of “the merits” in one of the jurisdictions in
question. That is not posited in this case.
I cannot find support for the definition of “merits” as argued for by the plaintiffs in either
the cases cited or in any additional sources such as the following dictionary definitions.
In Black’s Law Dictionary, 6th ed. (St. Paul, Minn.: West, 1990), at p. 990 merits as defined
as:
The substance, elements, or grounds of a cause of action or defense.
In the Dictionary of Canadian Law (Scarborough, Ontario: Carswell, 1991), at p. 634

merits is defined as:
Used to describe a good cause of action or defence when it is based not on technical
grounds, but on the real issues in question.
Further, the Canadian Law Dictionary (Toronto: Law and Business Publications (Canada),
1980), at p. 244 defines merits as:
In practice, a person is said to have a good claim or defence on the merits when his
claim or defence is based on the real matter in question, and not on any technical
ground. A defence on the merits is such an allegation of factual controversy as raises
a triable issue.
Two of the dictionary definitions clearly distinguish technical grounds from merits.
However, based on the plaintiff ’s argument there is a distinction between merits in a conflict
of laws action versus any other action.
In arguing the merits a party attorns because they have argued the court has no jurisdic-
tion; yet, by arguing the merits the same court is asked to exercise its disputed jurisdiction.
The reasoning is explained by Lord Denning in Re Dulles’ Settlement; Dulles v. Vidler, [1951]
2 All ER 69 (CA), referred to by the New Brunswick Court of Appeal in Dovenmuehle at p. 456:
I quite agree, of course, that if he fights the case, not only on the jurisdiction, but also
on the merits, he must then be taken to have submitted to the jurisdiction, because
he is then inviting the court to decide in his favour on the merits, and he cannot be
allowed, at one and the same time, to say that he will accept the decision on the merits
if it is favourable to him and will not submit to it if it is unfavourable. But when he
only appears with the sole object of protesting against the jurisdiction, I do not think
he can be said to submit to the jurisdiction.
The plaintiff also relies on Henry v. Geopresco International Ltd., [1975] 2 All ER 702
(CA), and, in particular, the following words of Roskill LJ at pp. 720-21:
For our part we think that where any issues arise for decision at any stage of the
proceedings in the foreign court and that court is invited by the defendant as well as
by the plaintiff to decide those issues, “the merits” are voluntarily submitted to that
court for decision so that the submission subsequently binds both parties in respect
of the dispute as a whole, even if both would not have been so bound in the absence
of that voluntary submission. Were that not so, the submission of a preliminary issue
(whether of fact or of law) to a foreign court for decision would not be a voluntary
submission to the jurisdiction of that court, and if a defendant lost on that issue he
could nonetheless thereafter challenge the jurisdiction of that court to try the remain-
ing issues—a proposition which we venture to think cannot be sustained.
However, this case supports the position that appearing solely to argue lack of jurisdiction
constitutes voluntary submission or attornment which clearly is no longer the law applicable
in this jurisdiction. The case does not consider the issue before this court.
In Re McCain Foods Ltd. v. Agricultural Publishing Co. (1979), 103 DLR (3d) 724 (Ont. HC),
the court held that by submitting the issue of the validity of the writ to the foreign court, the
defendants had voluntarily attorned. The issue of the validity of the writ is a technical ground
as opposed to a matter of the merits of the case; therefore, it is argued this case supports the
plaintiff ’s position that in the context of the present case, “merits” means anything other
than jurisdiction. However, on appeal, this Ontario High Court decision attracted the fol-
lowing comments. In dismissing the appeal on other grounds, Blair JA for the Ontario Court
of Appeal wrote at p. 734:
In dismissing this appeal we are not to be taken as approving the view of Cromarty J
that the appellants by entering a conditional appearance and applying to set aside the
writ voluntarily attorned to the jurisdiction of the New Brunswick Court and, con-
sequently, were bound by that Court’s decision. This view was founded upon Harris
v. Taylor, [1915] 2 KB 580, and Henry v. Geoprosco Int’l Ltd., [sic] [1976] QB 726, which
decisions have attracted considerable criticism. There is no need to consider these
authorities for the purpose of our decision in this case. We do not consider ourselves
bound by them and we reserve our view on them for another day.
Since this is the clearest authority referred to me to support the plaintiff ’s proposition of the
meaning of “the merits” in private international law, I find that position less than
convincing.
In conclusion on this issue, I find that in the present case the defendants did not ask the
Ohio Court to consider the case on the merits. Although technical grounds were raised in
the Motion to Dismiss, a procedure apparently allowed under the Ohio rules on a motion
to contest jurisdiction, the grounds were raised in the alternative to the jurisdictional argu-
ment. Once the Motion to dismiss was refused, the defendants took no further part in the
Ohio action. Therefore, the defendants, in my opinion, never attorned to the Ohio Court’s
jurisdiction.
With respect, I am of the view that the trial judge erred in reaching the conclusion she
did on the issue of attornment.
Until recent times the common law rule was narrow and inflexible. Any appearance
not made under duress was deemed to have been made voluntarily. Duress in this context
was limited to those circumstances in which property belonging to the protesting party
had been seized by process and was in the custody of the foreign court: see Voinet v. Barrett
(1885), 55 LJQB 39 (CA); Boissière & Co. v. Brockner & Co. (1889), 6 TLR 85 (Ch. Div.);
and Harris v. Taylor, [1915] 2 KB 580 (CA).
In Re Dulles’ Settlement Trusts; Dulles v. Vidler (No. 2), [1951] 2 All ER 69 (CA), Den-
ning LJ made the following comment (at p. 72):
I cannot see how anyone can fairly say that a man has voluntarily submitted to the jurisdic-
tion of a court when he has all the time been vigorously protesting that it has no jurisdiction.
If he does nothing and lets judgment go against him in default of appearance, he clearly does
not submit to the jurisdiction. What difference in principle does it make, if he does not merely
do nothing, but actually goes to the court and protests that it has no jurisdiction? I can see
no distinction at all. I quite agree, of course, that if he fights the case, not only on the juris-
diction, but also on the merits, he must then be taken to have submitted to the jurisdiction,
because he is then inviting the court to decide in his favour on the merits, and he cannot be
allowed, at one and the same time, to say that he will accept the decision on the merits if it
is favourable to him and will not submit to it if it is unfavourable. But when he only appears
with the sole object of protesting against jurisdiction, I do not think he can be said to submit
to the jurisdiction …
This statement, by only one of three Lords Justices presiding in that appeal, could be
viewed as representing a marked departure from earlier authority. It received criticism in
some quarters, but was characterized as a refreshing salute to common sense in others.
In a subsequent decision in Henry v. Geopresco International Ltd., [1975] 2 All ER 702
(CA), the Court of Appeal asserted that it had never been authoritatively decided whether
a defendant who appears solely to protest against jurisdiction of a court thereby submits
to that court’s jurisdiction. The following passages from the judgment of Roskill LJ dem-
onstrate a reluctance to fill that void in the common law (at pp. 719-21):
We therefore say no more than that we are not deciding that an appearance solely to protest
against the jurisdiction is, without more, a voluntary submission. But we do think that the
authorities compel this court to say that if such a protest (for example) takes the form of, or
is coupled with, what in England would be a conditional appearance and an application to
set aside an order for service out of the jurisdiction and that application then fails, the entry
of that conditional appearance (which then becomes unconditional) is a voluntary submis-
sion to the jurisdiction of the foreign court. The defendant need not appear there, condition-
ally or unconditionally. He can stay away. But as the cases say, he may prefer to take his chance
on a decision in his favour. If he does so, he must also accept the consequences of a decision
against him.
We appreciate that on this view the dividing line between what is and what is not a vol-
untary submission and what is and what is not an appearance solely to protest against the
jurisdiction is narrow and may often be difficult to draw satisfactorily. But, as we think, it
must depend in each case on what it was that the defendant did or refrained from doing in
relation to the jurisdiction of the foreign court.
• • •
For our part we think that where any issues arise for decision at any stage of the proceed-
ings in the foreign court and that court is invited by the defendant as well as by the plaintiff
to decide those issues, “the merits” are voluntarily submitted to that court for decision so
that that submission subsequently binds both parties in respect of the dispute as a whole, even
if both would not have been so bound in the absence of that voluntary submission. Were that
not so, the submission of a preliminary issue (whether of fact or of law) to a foreign court for
decision would not be a voluntary submission to the jurisdiction of that court, and if the defend-
ant lost on that issue he could nonetheless thereafter challenge the jurisdiction of that court to
try the remaining issues—a proposition which we venture to think cannot be sustained.
(Emphasis added.)
As the trial judge pointed out, the decision in Henry v. Geopresco International has also
been the subject of some criticism. It has also received uncertain if not uneven application.
Its effect has been expressly reserved for future consideration in Ontario: Re McCain Foods
Ltd. and Agricultural Publishing Co. Ltd. (1979), 103 DLR (3d) 734n, 14 CPC 168, 26 OR
(2d) 768n (CA). On the other hand, it has been adopted in New Brunswick as standing
for the proposition that an appearance solely to protect jurisdiction, without more, does
not amount to a voluntary submission: Dovenmuehle v. Rocca Group Ltd. (1981), 34 NBR
(2d) 444 (CA).
In my view, any confusion or uncertainty arising from these decisions, regarding the
extent to which the strict common law rule has been varied, has been settled in this juris-
diction by recent amendments to our Rules of Court. Rule 13(10) provides that an applica-
tion may be brought to set aside an order for service ex juris of an originating process
without entering an appearance. Rule 14(6) provides, inter alia, that whether or not a
person has entered an appearance he may apply to the court for a declaration either that
the court has no jurisdiction over him in the proceeding, or that in any event it should
decline jurisdiction. Rule 14(8) provides:
14(8) An application made under Rule 13(10) or subrule (6) of this rule does not consti-
tute acceptance of the jurisdiction of the court.
(Emphasis added.)
These provisions were added to the rules at the same time as “conditional appearances”
were abolished. Thus, for policy reasons, it has now been settled that applications to strike
orders for service ex juris and challenges to jurisdiction, both simpliciter and forum con-
veniens, can now be brought in this jurisdiction without the applicant being deemed to
have thereby submitted to the jurisdiction of the court. In my view, these provisions in
the rules are properly regarded as legislated exceptions to the strict common law rule,
which otherwise prevails, that any submission to the jurisdiction of the court which is
not made under duress will be deemed to have been made voluntarily.
To summarize, I am of the view that the law in British Columbia today entitles a party
to an action to dispute an order for service ex juris upon him of an originating proceeding,
and to challenge jurisdiction, both simpliciter and forum conveniens, without the risk that
bringing such applications will constitute acceptance by him of the jurisdiction of the
court. Beyond that, the common law prevails such that unless an appearance before the
court is made under duress, it will be regarded as voluntary.
In this case, all respondents who are presently before this court applied for an order
that the plaintiff ’s claim of fraud be struck for lack of particularity. Had the Ohio court
ruled in their favour on that application, they would unquestionably have accepted the
judgment. In my view, they must equally accept the decision against them, because by
combining that application with one that challenged the jurisdiction of the Ohio court,
they thereby attorned to that court’s jurisdiction over them in the dispute as a whole. The
same effect resulted from the application of the respondent Triska to have the complaint
against him dismissed for failure to state a claim recognized by law.
This decision makes it unnecessary to consider the alternate ground of appeal chal-
lenging the trial judge’s finding that there was no real and substantial connection between
the underlying cause of action and the state of Ohio.
It follows that the appeal must be allowed. During argument, counsel for the appellant
agreed that if he succeeded on either ground of appeal this court could do no more than
remit the matter to the trial court for determination of the final issue raised below,
namely, whether there was a manifest error on the face of the judgment of the Ohio court.
Accordingly, I would allow the appeal, set aside the order of the trial judge and I remit
the matter to the court below for determination of that final issue.
The appellant is entitled to costs.
Could the same result have been reached without r 14(8)?

Will a defendant who takes no part in an action be found to have submitted to the juris-
diction of the foreign court if that defendant has entered into a contract containing a
jurisdiction-selecting clause naming that court? If the cause of action is contract? If the cause
of action is tort or breach of fiduciary duty?
c. A Real and Substantial Connection: The Morguard Rule

In Moses v Shore Boat Builders Ltd (1993), 106 DLR (4th) 654 (BCCA), the BC Court of Appeal
upheld the recognition and enforcement of an Alaskan judgment on the basis of the Mor-
guard rule (Morguard Investments Ltd v De Savoye [1990] 3 SCR 1077, 76 DLR (4th) 256 (repro-
duced in Chapter 3)). The defendant appealed on the ground that the Morguard doctrine
applied only to Canadian judgments (leave to appeal to SCC refused, [1994] 1 SCR xi). Courts
in all provinces thereafter extended the Morguard rule to non-Canadian judgments.
Braintech Inc v Kostiuk, 1999 BCCA 169, below, is such a case. It is one of the few cases in which
a real and substantial connection has been found not to have existed.
At approximately the same time that Moses was decided in the British Columbia Court of
Appeal, an action was brought in Ontario for the recognition and enforcement of a pecuni-
ary Florida default judgment in connection with the sale of immovable property in that
state. Until Beals v Saldanha, below, reached the Supreme Court of Canada, the arguments
revolved exclusively around the application to the Florida judgment of the common law
defences (discussed below). During argument at the Supreme Court, counsel were invited to
make submissions on the extension of the Morguard rule to non-Canadian judgments.
Ultimately, the court unanimously upheld that extension but the individual judgments may
have raised more questions than they answered. Portions of the judgments of both Major J,
for the majority, and LeBel J, who dissented on the applicability of the defences to the
enforcement of a foreign judgment, follow.
Beals v Saldanha
2003 SCC 72, [2003] 3 SCR 416, 234 DLR (4th) 1
MAJOR J:
A. The “Real and Substantial Connection” Test and Foreign Judgments

[24] The question then is whether the real and substantial connection test should
apply to the recognition and enforcement of foreign judgments?
[25] In Moran [v Pyle National (Canada) Ltd, [1973] 1 SCR 393], at p. 409, it was
recognized that where individuals carry on business in another provincial jurisdiction,
it is reasonable that those individuals be required to defend themselves there when an

action is commenced:
By tendering his products in the market place directly or through normal distributive chan-
nels, a manufacturer ought to assume the burden of defending those products wherever they
cause harm as long as the forum into which the manufacturer is taken is one that he reason-
ably ought to have had in his contemplation when he so tendered his goods.
That reasoning is equally compelling with respect to foreign jurisdictions.

[26] Although La Forest J noted in Morguard [Investments Ltd v De Savoye, [1990] 3
SCR 1077] that judgments from beyond Canada’s borders could raise different issues than
judgments within the federation, he recognized the value of revisiting the rules related
to the recognition and enforcement of foreign judgments (at p. 1098):
The business community operates in a world economy and we correctly speak of a world
community even in the face of decentralized political and legal power. Accommodating the
flow of wealth, skills and people across state lines has now become imperative. Under these
circumstances, our approach to the recognition and enforcement of foreign judgments would
appear ripe for reappraisal. [Emphasis added.]
Although use of the word “foreign” in the above quotation referred to judgments rendered
in a sister province, the need to accommodate “the flow of wealth, skills and people across
state lines” is as much an imperative internationally as it is interprovincially.
[27] The importance of comity was analysed at length in Morguard, supra. This doc-
trine must be permitted to evolve concomitantly with international business relations,
cross-border transactions, as well as mobility. The doctrine of comity is
grounded in the need in modern times to facilitate the flow of wealth, skills and people across
state lines in a fair and orderly manner. (Morguard, supra, at p. 1096)
This doctrine is of particular importance viewed internationally. The principles of order

and fairness ensure security of transactions, which necessarily underlie the modern
concept of private international law. Although Morguard recognized that the considera-
tions underlying the doctrine of comity apply with greater force between the units of a
federal state, the reality of international commerce and the movement of people continue
to be “directly relevant to determining the appropriate response of private international
law to particular issues, such as the enforcement of monetary judgments” (J. Blom, “The
Enforcement of Foreign Judgments: Morguard Goes Forth into the World” (1997), 28
Can. Bus. LJ 373, at p. 375).
[28] International comity and the prevalence of international cross-border trans-
actions and movement call for a modernization of private international law. The principles
set out in Morguard, supra, and further discussed in Hunt v. T&N plc, [1993] 4 SCR 289,
can and should be extended beyond the recognition of interprovincial judgments, even
though their application may give rise to different considerations internationally. Subject
to the legislatures adopting a different approach by statute, the “real and substantial con-
nection” test should apply to the law with respect to the enforcement and recognition of
foreign judgments.
[29] Like comity, the notion of reciprocity is equally compelling both in the inter-
national and interprovincial context. La Forest J discussed interprovincial reciprocity in
Morguard, supra. He stated (at p. 1107):
… if this Court thinks it inherently reasonable for a court to exercise jurisdiction under
circumstances like those described, it would be odd indeed if it did not also consider it rea-
sonable for the courts of another province to recognize and enforce that court’s judgment.
In light of the principles of international comity, La Forest J’s discussion of reciprocity is

also equally applicable to judgments made by courts outside Canada. In the absence of a
different statutory approach, it is reasonable that a domestic court recognize and enforce
a foreign judgment where the foreign court assumed jurisdiction on the same basis as the
domestic court would, for example, on the basis of a “real and substantial connection” test.
[30] Federalism was a central concern underlying the decisions in Morguard, supra,
and Hunt, supra. In the latter, La Forest J stated that he did not think that “litigation
engendered against a corporate citizen located in one province by its trading and com-
mercial activities in another province should necessarily be subject to the same rules as
those applicable to international commerce” (Hunt, supra, at p. 323). Recently, Spar
Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 SCR 205, 2002 SCC 78, sug-
gested, in obiter, that it may be necessary to afford foreign judgments a different treatment
than that recognized for interprovincial judgments (per LeBel J, at para. 51):
However, it is important to emphasize that Morguard and Hunt were decided in the context
of interprovincial jurisdictional disputes. In my opinion, the specific findings of these deci-
sions cannot easily be extended beyond this context. In particular, the two cases resulted in
the enhancing or even broadening of the principles of reciprocity and speak directly to the
context of interprovincial comity within the structure of the Canadian federation. …
Although La Forest J and LeBel J suggested that the rules applicable to interprovincial
versus foreign judgments should differ, they do not preclude the application of the “real
and substantial connection” test to both types of judgments, provided that any unfairness
that may arise as a result of the broadened application of that test be taken into account.
[31] The appellants submitted that the recognition of foreign judgments rendered by
courts with a real and substantial connection to the action or parties is particularly trouble-
some in the case of foreign default judgments. If the “real and substantial connection” test
is applied to the recognition of foreign judgments, they argue the test should be modified
in the recognition and enforcement of default judgments. In the absence of unfairness or
other equally compelling reasons which were not identified in this appeal, there is no
logical reason to distinguish between a judgment after trial and a default judgment.
[32] 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 substan-
tial one.
[33] In the present case, the appellants purchased land in Florida, an act that repre-
sents a significant engagement with the foreign jurisdiction’s legal order. Where a party
takes such positive and important steps that bring him or her within the proper jurisdic-
tion 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.
[34] The “real and substantial connection” test is made out for all of the appellants.
There exists both a real and substantial connection between the Florida jurisdiction, the
subject matter of the action and the defendants. As stated in J.-G. Castel and J. Walker,
Canadian Conflict of Laws (5th ed. (loose-leaf)), at p. 14-10:
For the recognition or enforcement in Canada of a foreign judgment in personam, the foreign
court must have had jurisdiction according to Canadian rules of the conflict of laws.
In light of Canadian rules of conflict of laws, Dominic Thivy attorned to the jurisdiction
of the Florida court when he entered a defence to the second action. His subsequent
procedural failures under Florida law do not invalidate that attornment. As such, irrespec-
tive of the real and substantial connection analysis, the Florida court would have had
jurisdiction over Mr. Thivy for the purposes of enforcement in Ontario.
[35] A Canadian defendant sued in a foreign jurisdiction has the ability to redress any
real or apparent unfairness from the foreign proceedings and the judgment’s subsequent
enforcement in Canada. The defences applicable in Ontario are natural justice, public
policy and fraud. In addition, defendants sued abroad can raise the doctrine of forum non
conveniens. This would apply in the usual way where it is claimed that the proceedings are
not, on the basis of convenience, expense and other considerations, in the proper forum.
[36] Here, the appellants entered into a property transaction in Florida when they
bought and sold land. Having taken this positive step to bring themselves within the
jurisdiction of Florida law, the appellants could reasonably have been expected to defend
themselves when the respondents started an action against them in Florida. The appellants
failed to defend the claim pursuant to the Florida rules. Nonetheless, they were still
entitled, within ten days, to appeal the Florida default judgment, which they did not. In
addition, the appellants did not avail themselves of the additional one-year period to have
the Florida judgment for damages set aside. While their failure to move to set aside or
appeal the Florida judgment was due to their reliance upon negligent legal advice, that
negligence cannot be a bar to the enforcement of the respondents’ judgment.
[37] There are conditions to be met before a domestic court will enforce a judgment
from a foreign jurisdiction. The enforcing court, in this case Ontario, must determine
whether the foreign court had a real and substantial connection to the action or the par-
ties, at least to the level established in Morguard, supra. A real and substantial connection
is the overriding factor in the determination of jurisdiction. The presence of more of the
traditional indicia of jurisdiction (attornment, agreement to submit, residence and pres-
ence in the foreign jurisdiction) will serve to bolster the real and substantial connection
to the action or parties. Although such a connection is an important factor, parties to an
action continue to be free to select or accept the jurisdiction in which their dispute is to
be resolved by attorning or agreeing to the jurisdiction of a foreign court.
[38] If a foreign court did not properly take jurisdiction, its judgment will not be
enforced. Here, it was correctly conceded by the litigants that the Florida court had a real
and substantial connection to the action and parties.
• • •
LeBEL J:
[205] In conclusion, I agree with Major J that considerations of comity, order and
fairness support the application of the “real and substantial connection” test to the rec-
ognition and enforcement of judgments originating in foreign countries. In my view,
however, the application of the test should be purpose-driven and contextual. What
constitutes a connection sufficient to meet the test will not be the same in every context.
The jurisdiction test should reflect the difference between the international and inter-
provincial contexts and the greater hardship that litigation in a foreign country can entail.
There is no good reason why Ontario courts should have to treat a judgment from
Florida—or one from China, Turkmenistan or Sierra Leone—exactly like a judgment
from another Canadian province.
[206] I would also question whether international comity requires us to move as far
as the majority does in the direction of openness to foreign judgments when the position
of jurisdictions with which we tend to compare ourselves is less generous. In England and
Australia, for example, the Emanuel v. Symon [[1908] 1 KB 302 (CA)], supra, framework
remains substantially unchanged and the jurisdiction of a foreign court must be based
on the presence or residence of the defendant in the foreign jurisdiction or on the defend-
ant’s voluntary submission (see, e.g., Dicey and Morris on the Conflict of Laws, supra, at
pp. 487 and 503; P.E. Nygh, Conflict of Laws in Australia (6th ed. 1995), at p. 138). The
US position is more liberal, but still does not go as far as the majority does in this case.
Generally, US states will apply the “minimum contact test” to foreign-country judgments
as they do to judgments of sister states. This test is made out when a non-resident defend-
ant seeking to avail himself of some benefit within a state affirmatively acts in a manner
which he knows or should know will result in a significant impact within the forum state
(see, e.g., Mercandino v. Devoe & Raynolds, Inc., 436 A.2d 942 (N.J. Super. App. Div. 1981),
at p. 943). Thus, a connection between the foreign jurisdiction and the cause of action
alone, in the absence of purposive conduct by the defendant establishing a connection
between himself and the forum, would be insufficient as a basis for jurisdiction and
enforceability in the US. In such a case, however, the “real and substantial connection”
test as it is interpreted by the majority would always be satisfied.
[207] Finally, I would note that the logic on which the Morguard test is founded sug-
gests that it should supersede, rather than complement, the traditional common law bases
of jurisdiction. In my view, it is not necessary to ask whether any of the traditional grounds
are present and then go on to ask whether there is a real and substantial connection (as
the majority reasons suggest, at para. 37). There should be just one question: is the “real
and substantial connection” test made out?
[208] This Court noted in Hunt, supra, that the traditional grounds were generally
sound bases of jurisdiction and were “a good place to start,” but also observed that “some
of these may well require reconsideration in light of Morguard” (p. 325). Such factors as
contractual agreement to accept jurisdiction and habitual residence in the foreign forum
are usually very clear examples of the kind of connection that reasonably supports the
assumption of jurisdiction. Attornment by actively defending the action in the foreign
jurisdiction is a slightly different kind of connection; because the defendant has chosen
to have his day in court in the foreign forum, no unfairness results from the enforcement
of the foreign court’s judgment.
[209] In some cases, however, the traditional grounds may be more arbitrary and
formalistic than they are fair and reasonable. Under the traditional rules, for example,
jurisdiction could be acquired by serving a defendant who was present in the jurisdiction,
even if her presence was only fleeting and was completely unconnected to the action, and
in the absence of any other factor supporting jurisdiction. Another example is the com-
mon law rule that an appearance solely for the purpose of challenging the jurisdiction of
the foreign court was an attornment to its jurisdiction, which was argued (but not com-
mented on by the court) in United States of America v. Ivey (1995), 26 OR (3d) 533
(Gen. Div.). Circumstances such as these may not amount to a real and substantial con-
nection, and in my view they should not continue to be recognized as bases for jurisdic-
tion just because they were under the traditional rules.
Braintech Inc v Kostiuk

1999 BCCA 169, 171 DLR (4th) 46
GOLDIE JA (for the court):

[1] On 7 May 1997 the respondent (“Braintech”) obtained a default judgment in the
District Court of Harris County in the state of Texas against the appellant (“Kostiuk”).
On 9 May 1997 Braintech commenced an action on this judgment in the Supreme Court
of British Columbia. On 2 April 1998, after a summary trial Braintech obtained a judg-
ment, [1998] BCJ No. 3201, in its favour from which the present appeal is taken.
Issues
[2] The issues may be grouped as follows: …
2. Whether a fraud was practised on the Texas court of which cognizance should be
taken in the courts of British Columbia.
3. Whether there was a real and substantial connection between Texas and the
wrongdoing alleged to have taken place in that state.
• • •
[14] It is convenient at this point to outline the circumstances which gave rise to the
litigation in Texas.
[15] Braintech described itself in its first pleading (the “Original Petition”) filed in the
District Court:
5. Braintech, Inc. is a developmental stage company with corporate offices located in
Vancouver, British Columbia and research and development facilities located in Austin,
Texas. BrainTech is involved in design and development of advanced recognition systems
based on its patented and highly adaptable set of computer-based pattern matching
algorithms.
As a corporation in the “developmental stage” it makes no claim it produces and sells its
systems.
[16] It asserts itself to be a publicly held company whose stock is bought and sold via
OTC Bulletin Board trading. The location of the OTC exchange is not stated. From other
references it may be inferred it is not in Canada.
[17] In 1996 Kostiuk is alleged to have used the Internet to transmit and publish
defamatory information about Braintech. Specifically, the means of dissemination was
alleged in Braintech’s amended pleading (the “Amended Petition”) as follows:
8. A discussion group or bulletin board has been established on the Internet to facilitate
discussion and exchange of information regarding technology stocks and investments. This
discussion group, which is operated under the name Silicon Investor, allows those interested
in technology companies like BrainTech to exchange information relevant to possible invest-
ments in such companies.
I will refer to this bulletin board as “Silicon Investor.”

[18] Kostiuk, who is described as a businessman, denies he was ever personally served
with any process in the Texas proceeding. He alleges he was thereby denied the oppor-
tunity of presenting substantive defences.
[19] The electronic transmission and publication of the defamatory statements are,
as I have said, in issue. There are no particulars in the record of either the information
transmitted by Kostiuk or of his defences to the allegations of defamation and business
disparagement. It was assumed at trial and here that both are valid causes of action sound-
ing in tort.
[20] Before considering whether either was committed in whole or in part in Texas,
it will be necessary to describe briefly the modes of service used by Braintech to invoke
the jurisdiction of the Texas court.
[21] [I]t is apparent that Kostiuk was recognized by Braintech to be a non-resident
who had neither a place of business in Texas nor one who had appointed an agent in Texas
for service. It is the commission in Texas of a tort, in whole or in part, which deems him
to have done business there and deemed him to have appointed the Secretary of State his
agent for service.
[22] Braintech contends that Kostiuk was duly served by service of the Original Peti-
tion on the Secretary of State who thereupon was under the statutory duty to give notice
to Kostiuk. As will be seen, this mode of service and its failure to operate in the manner
contemplated are relevant to the determination of whether comity requires the courts
here to give effect to the assertion of jurisdiction over a non-resident as well as to the
question of whether there was a fraud practised on the District Court.
[23] In the case at bar the Original Petition was filed in the District Court 1 November
1996 and assigned Cause No. 965578. It alleged Kostiuk to be an individual residing at
“… 2408 Westhill Court, West Vancouver, British Columbia, V7S 3A5 …” (the “Westhill
Court address”).
[24] The petition was served on the Secretary of State on 7 November and his letter,
addressed to the Westhill Court address given him by Braintech’s attorney in Texas, was
sent by registered mail, return receipt requested, on 15 November 1996. It contained a
copy of the petition and the District Clerk’s notice that default judgment may be taken if
no answer was filed within 20 days of service. In fact, it was sent to an incorrect address.
Since February, 1996 Kostiuk had resided at 602, 195—21st Street, West Vancouver (the
“21st Street address”).
[25] It appears the letter was accepted at the Westhill Court address by Kostiuk’s father
who lived there, as had Kostiuk until February, 1996. However, the return receipt
requested by the Secretary of State was still attached to the envelope Kostiuk’s father gave
him in late November or early December, 1996. Without that receipt the Texas court had
no notion of when the time to file an answer would expire.
[26] It will be apparent the efficacy of service on the Secretary of State depended on
the correctness of the address given him to which he was to send the Petition and the
notice warning the recipient an action had been commenced against him and of the
consequences of a failure to appear.
[27] By a certificate dated 27 January 1997 the Secretary of State informed Mr. Court-
ney, Braintech’s attorney in Texas, that a copy of what was served on him on 7 November
was forwarded to Kostiuk at the Westhill Court address on 15 November and that as of
27 January, no response to the registered letter, return receipt requested, had been received.
[28] On 11 February 1997 Braintech filed in the Texas court the Amended Petition.
It too alleged Kostiuk’s residence to be the Westhill Court address.
[29] Nothing in the record indicates service of the Amended Petition on the Secretary
of State. Instead, it appears that personal service on Kostiuk was to be attempted. A local
process server, a Mr. Livingston, was hired. He deposed by affidavit dated 20 February
1997 (Livingston No. 1) and filed in the Texas court he had personally served Kostiuk the
day before at the 21st Street address. Two other affidavits of Mr. Livingston were filed in
the British Columbia court: Livingston No. 2 of 14 January 1998 and Livingston No. 3 of
26 February 1998.
[30] Meanwhile, Kostiuk who became aware of the original petition through his father,
did nothing. He was led to believe he had not been validly served. He denies he was per-
sonally served with the Amended Petition on 19 February 1997 at the 21st Street address.
• • •
The Standard of Review of a Foreign Judgment by a Canadian Court

[40] The starting point is the judgment of the Supreme Court of Canada in Morguard
[[1990] 3 SCR 1077]. In that case De Savoye (the appellant) owned land in Alberta subject
to two mortgages. When the mortgages fell into arrears the mortgagees commenced
proceedings in Alberta. Meanwhile the appellant had left that province and service was
effected in accordance with the rules for service ex juris of the Alberta court. The appellant
took no steps to appear or to defend the actions.
[41] The mortgagees obtained judgments nisi and, at the expiration of the redemption
period, orders for judicial sale of the mortgaged properties to themselves. Judgments were
entered against the appellant for the deficiencies. Each mortgagee then commenced a
separate action in the Supreme Court of British Columbia to enforce the Alberta judg-
ments for the deficiencies. The issue in the Supreme Court of Canada was the recognition
to be given by the courts in province A to an in personam judgment of the courts in
province B granted in default of appearance of the non-resident defendant.
[42] Mr. Justice La Forest, speaking for the court, concluded that considerations which
reflected modern requirements of commerce and the reality of modern means of com-
munication justified a departure from 19th century standards. At 1079 he said:
These concerns, however, must be weighed against fairness to the defendant. The taking of
jurisdiction by a court in one province and its recognition in another must be viewed as
correlatives and recognition in other provinces should be dependent on the fact that the
court giving judgment “properly” or “appropriately” exercised jurisdiction. It may meet the
demands of order and fairness to recognize a judgment given in a jurisdiction that had the
greatest or at least significant contacts with the subject matter of the action. But it hardly
accords with principles of order and fairness to permit a person to sue another in any jurisdic-
tion, without regard to the contacts that jurisdiction may have to the defendant or the subject
matter of the suit. If the courts of one province are to be expected to give effect to judgments
given in another province, there must be some limit to the exercise of jurisdiction against
persons outside the province. If it is reasonable to support the exercise of jurisdiction in one
province, it is reasonable that the judgment be recognized in other provinces.
The approach of permitting suit where there is a real and substantial connection with the
action provides a reasonable balance between the rights of the parties. It affords some protec-
tion against being pursued in jurisdictions having little or no connection with the transaction
or the parties.
[Emphasis added.]
[43] As to the difficulties which may be experienced with the new test, Mr. Justice
La Forest said at 1108:
I am aware, of course, that the possibility of being sued outside the province of his residence
may pose a problem for a defendant. But that can occur in relation to actions in rem now. In
any event, this consideration must be weighed against the fact that the plaintiff under the
English rules may often find himself subjected to the inconvenience of having to pursue his
debtor to another province, however just, efficient or convenient it may be to pursue an action
where the contract took place or the damage occurred.
and at 1110:
There are as well other discretionary techniques that have been used by courts for refusing
to grant jurisdiction to plaintiffs whose contact with the jurisdiction is tenuous or where
entertaining the proceedings would create injustice, notably the doctrine of forum non con-
veniens and the power of a court to prevent an abuse of its process; for a recent discussion,
see Elizabeth Edinger, “Discretion in the Assumption and Exercise of Jurisdiction in British
Columbia” (1982), 16 UBCL Rev. 1.
There may also be remedies available to the recognizing court that may afford redress to
the defendant in certain cases such as fraud or conflict with the law or public policy of the
recognizing jurisdiction. Here, too, there may be room for the operation of s. 7 of the Charter.
None of these questions, however, are relevant to the facts of the present case and I have not
given them consideration.
[44] In the case before him he observed Alberta was the place where the real properties
were situate; where the contracts were entered into and where the affinity between a
foreclosure proceeding and an action on the covenant was most apparent.
[45] The trial judge in the case at bar instructed himself with respect to the Morguard
test, namely, whether there was a real and substantial connection to Texas, and concluded
that the evidence strongly supported there being such a connection. For reasons I will
next discuss I am of the view he erred.
Real and Substantial Connection

[46] I will consider first the connection between Texas and the injury alleged.
[47] It is here the judgment of the Supreme Court of Canada in Amchem [[1993] 1
SCR 897] is helpful. It does not appear to have been drawn to the attention of the trial
judge.
[48] In Morguard the fairness of the process in a foreign jurisdiction was not directly
in issue as the proceedings were wholly within the Canadian federation. On the other
hand, in respect of a true foreign judgment fairness to the non-resident defendant required
that the judgment be issued by a court acting through fair process with properly restrained
jurisdiction. See Morguard at 1103.
[49] Comity thus becomes an element in the case at bar.
[50] In Amchem its importance arose in the context of an anti-suit injunction issued
by the Supreme Court of British Columbia restraining those subject to it from pursuing
a tort remedy in Texas for asbestos related injuries. Although the facts are complex, in its
simplest form the action in Texas was commenced by plaintiffs resident in British Col-
umbia against corporations unconnected with this province but which were alleged, as
to some of them, to do business in Texas. Upon being served most of the corporate
defendants specially appeared in the Texas court to claim Texas was not a convenient
forum. The doctrine or rule commonly known as forum non conveniens has been abol-
ished in Texas. The application for a stay of proceedings failed.
[51] In the British Columbia court the corporate defendants sought a declaration this
province was the “natural forum” as most of the plaintiffs were residents claiming damages
for injuries suffered here. Actions had been commenced here and the right to maintain
an action which included an alleged conspiracy on the part of defendants who did not
do business here had been confirmed by the Supreme Court of Canada. As well, many of
the plaintiffs here were in receipt of compensation from the Workers’ Compensation
Board of this province giving rise in the latter to subrogated rights.
[52] A major reason why the chambers judge in Amchem granted the anti-suit injunc-
tion was the abolition of the rule of forum non conveniens in Texas. This was regarded as
oppressive, arising from the defendants’ need to defend parallel actions in two jurisdictions.
[53] As has been seen it was unnecessary in Morguard to consider the case of compet-
ing jurisdictions to which the recognized principle of comity applied with full force. This
was the situation in Amchem.
[54] Mr. Justice Sopinka, speaking for the court in Amchem, adopted the same defin-
ition of comity as was adopted in Morguard, namely, the following from the judgment in
the Supreme Court of the United States in Hilton v. Guyot (1895), 159 US 113 at 163-64:
[55] He identified the principle of forum non conveniens as the means of implementing
the balancing of interests called for in the last clause of this definition. But, he expressly
held its abolition in Texas did not have the conclusive weight adopted in the British Col-
umbia courts. At 937 he said:
With due respect to the trial judge, the principle of comity to which I have referred does not
require that the decision of the foreign court be based on the doctrine of forum non conveniens.
Many states in the United States and other countries do not apply that principle. Indeed,
until comparatively recent times, it was not applied in England. Does this mean that a decision
of the courts of one of these countries which, in the result, is consistent with the application
of our rules would not be entitled to respect? The response must be in the negative. It is the
result of the decision when measured against our principles that is important and not neces-
sarily the reasoning that leads to that decision. Moreover, while the Texas courts do not apply
a forum non conveniens test as such, they are required to comply with Section 1 of the
Fourteenth Amendment to the Constitution of the United States which operates to limit the
power of a state to assert in personam jurisdiction over a non-resident defendant. … The due
process requirements are satisfied when in personam jurisdiction is asserted over a non-resident
corporate defendant that has “certain minimum contacts with [the forum] such that the main-
tenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”
[Citations omitted.]
[56] If the obligation to defer to the comity which is to be accorded the default judg-
ment of the District Court of Harris County pronounced 7 May 1997 is to be tested by
the principle of forum non conveniens some flesh must be put on the bare bones of “real
and substantial connection.”
[57] That this is the task of the courts of the jurisdiction of the resident against whom
the judgment is sought to be enforced seems clear from what was said in Amchem at 914:
While the above scenario is one we should strive to attain, it has not yet been achieved. Courts
of other jurisdictions do occasionally accept jurisdiction over cases that do not satisfy the
basic requirements of the forum non conveniens test. Comity is not universally respected. In
some cases a serious injustice will be occasioned as a result of the failure of a foreign court
to decline jurisdiction. It is only in such circumstances that a court should entertain an
application for an anti-suit injunction. This then indicates the general tenor of the principles
that underlie the granting of this form of relief. In order to arrive at more specific criteria, it
is necessary to consider when a foreign court has departed from our own test of forum non
conveniens to such an extent as to justify our courts in refusing to respect the assumption of
jurisdiction by the foreign court and in what circumstances such assumption amounts to a
serious injustice. The former requires an examination of the current state of the law relating
to the stay of proceedings on the ground of forum non conveniens, while the latter, the law
with respect to injunctions and specifically anti-suit injunctions.
[Emphasis added.]
[58] It is apparent the “real and substantial connection” relied upon for the assumption
of jurisdiction by the Texas court is the alleged publication there of a libel which affected
the interests of resident present and potential investors. This is true only if the mode of
communication through the Internet supports this conclusion.
[59] It is trite law that a libel is only committed when the defamatory material is
published to at least one person other than the complainant.
[60] I earlier referred to the constitutional limitation in the United States on the exer-
cise of personal jurisdiction. In Zippo Manufacturing Company v. Zippo DotCom, Inc. 952
F Supp. 1119 (WD Pa. 1997) the following occurs at 1122 (with citations omitted):
A three-pronged test has emerged for determining whether the exercise of special personal
jurisdiction over a non-resident defendant is appropriate: (1) the defendant must have suf-
ficient “minimum contacts” with the forum state, (2) the claim asserted against the defendant
must arise out of those contacts, and (3) the exercise of jurisdiction must be reasonable. …
The “Constitutional touchstone” of the minimum contacts analysis is embodied in the first
prong, “whether the defendant purposefully established” contacts with the forum state. …
Defendants who “ ‘reach out beyond one state’ and create continuing relationships and obliga-
tions with the citizens of another state are subject to regulation and sanctions in the other
State for consequences of their actions.” … “[T]he foreseeability that is critical to the due
process analysis is … that the defendant’s conduct and connection with the forum State are
such that he should reasonably expect to be haled into court there.” … This protects defend-
ants from being forced to answer for their actions in a foreign jurisdiction based on “random,
fortuitous or attenuated” contacts. … “Jurisdiction is proper, however, where contacts
proximately result from actions by the defendant himself that create a ‘substantial connection’
with the forum State.”
There are established criteria. The court went on to consider the advent of Internet at
p. 1123-4:
[I-3] Enter the Internet, a global “ ‘super-network’ of over 15,000 computer networks used
by over 30 million individuals, corporations, organizations, and educational institutions
worldwide.” … The Internet makes it possible to conduct business throughout the world
entirely from a desktop. With this global revolution looming on the horizon, the development
of the law concerning the permissible scope of personal jurisdiction based on Internet use
is in its infant stages. The cases are scant. Nevertheless, our review of the available cases and
materials reveals that 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. This sliding scale is consistent with well developed personal jurisdiction
principles. 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 juris-
dictions. 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. … The middle ground
is occupied by interactive Web sites where a user can exchange information with the host
computer. In these cases, the exercise of jurisdiction is determined by examining the level
of interactivity and commercial nature of the exchange of information that occurs on the
Web site.
[Emphasis added.]
[61] From what is alleged in the case at bar it is clear Kostiuk is not the operator of
Silicon Investor. It is equally clear the bulletin board is “passive” as posting information
volunteered by people like Kostiuk, accessible only to users who have the means of gaining
access and who exercise that means.
[62] In these circumstances the complainant must offer better proof that the defendant
has entered Texas than the mere possibility that someone in that jurisdiction might have
reached out to cyberspace to bring the defamatory material to a screen in Texas. There is
no allegation or evidence Kostiuk had a commercial purpose that utilized the highway
provided by Internet to enter any particular jurisdiction.
[63] It would create a crippling effect on freedom of expression if, in every jurisdiction
the world over in which access to Internet could be achieved, a person who posts fair
comment on a bulletin board could be haled before the courts of each of those countries
where access to this bulletin could be obtained.
[64] In the default judgment it is recited that the allegations of the Original and
Amended Petitions “have been admitted.” This simply reflects the convention in Texas
that if a defendant who has been properly served does not appear the allegations in the
petition are admitted as proven. This is a deemed admission which does not assist the
respondent in establishing a real and substantial connection between the appellant and
the Texas court.
[65] In the circumstance of no purposeful commercial activity alleged on the part of
Kostiuk and the equally material absence of any person in that jurisdiction having “read”
the alleged libel all that has been deemed to have been demonstrated was Kostiuk’s passive
use of an out of state electronic bulletin. The allegation of publication fails as it rests on
the mere transitory, passive presence in cyberspace of the alleged defamatory material.
Such a contact does not constitute a real and substantial presence. On the American
authorities this is an insufficient basis for the exercise of an in personam jurisdiction over
a non-resident.
[66] The record demonstrates British Columbia was the natural forum for the resolu-
tion of a dispute between two residents. For the following reasons (which are not exhaus-
tive) the connections in the case at bar show that Texas was not even an appropriate forum:
1. Kostiuk is a non-resident of Texas who has neither done business nor maintained
a place of business nor appointed an agent for service there. His only connection
is “deemed” by virtue of the allegation of having committed a tort in Texas.
2. Braintech is a Nevada corporation domiciled in British Columbia. According to
the Standard & Poor service excerpt exhibited to Kostiuk’s affidavit of 18 February
1998, it was incorporated in Nevada on 4 March 1987 and has undergone a num-
ber of name changes before assuming its present name in 1987. As of 31 December
1996 its transfer agent was located in Salt Lake City; its office in North Vancouver,
British Columbia; its stock was traded on the OTC Bulletin Board (the location of
which is not identified); and its principal officers (Chairman, President and Vice
President and Chief Financial Officers) were located in North or West Vancouver.
3. Braintech has had no presence in Texas since 31 December 1996. Between 1 Sep-
tember and 31 December 1996 its technical development activities are said to have
been centered in Austin, Texas. Between January 1994 and the fall of 1995 its head
office was located in Arizona. In the fall of 1995 it was moved to Vancouver.
4. No person in Texas is alleged to have seen the alleged defamatory material and
the witnesses required to prove its damages are acknowledged to be citizens of
Canada. The only proof of damages in the record is the McDonald affidavit of 17
April 1997, sworn in Vancouver.
5. No juridical advantage is alleged to accrue in Texas which is not available if a
defamation action was brought in British Columbia.
6. The authorities cited in Braintech’s brief in support of default judgment relate to
the use within Texas of electronic communication for actual business purposes.
None support the passive posting on an electronic bulletin board as constituting
in itself the commission of a tort within Texas.
7. 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.
8. The mode of service in the case at bar falls below the minimum constitutional
standards for an American court.
[67] The authorities which support the last are found in Zippo Manufacturing Company
v. Zippo Dotcom, Inc., supra. The affidavit of Mr. Kyle R. McElroy, an attorney practising
in the state of Texas, expresses the opinion that Kostiuk was not properly served under
Texas law and that as a result the default judgment is void. Mr. McElroy’s opinion rests, at
least in part, on a failure to meet Texas standards. This would appear to be a matter for the
Texas courts. It is the constitutional limitation which may properly be taken into account
in determining whether comity requires recognition of the foreign court’s jurisdiction.
[68] The Canadian cases relied on by the respondents either antedate Morguard and
Amchem or demonstrate the consequence of actually doing business in a foreign juris-
diction. See: Moses v. Shore Boat Builders Ltd. (1993), 83 BCLR (2d) 177 (BC CA).
Conclusion
[69] In my opinion the trial judge erred in failing to consider whether there were any
contacts between the Texas court and the parties which could, with the due process clause
of the 14th Amendment to the Constitution of the United States, amount to a real and
substantial presence. In the circumstances revealed by record before this court, British
Columbia is the only natural forum and Texas is not an appropriate forum. That being
so, comity does not require the courts of this province to recognize the default judgment
in question.
[70] I would allow the appeal, set aside the judgment below and dismiss the action.
3. Defences
The common law provides a defendant in an action for recognition and enforcement of a
foreign judgment with a number of possible defences. Judgments based on foreign penal
or revenue laws are not enforceable and neither are those based on laws that are contrary to
the public policy of the forum. Chapter 4 sets out the cases and notes elucidating the scope
of these defences. Additional defences are that the foreign judgment was obtained by fraud
or in breach of natural justice. Beals v Saldanha is now the leading case on the scope of the
defences of fraud, breach of natural justice, and forum public policy. The case is set out
below with the facts that allowed the defendants to raise defences to the recognition and
enforcement of the Florida judgment. It is not a defence, however, that the foreign court
erred in law, even if the error in law was one concerning the law of the recognizing court. The
court being asked to recognize a foreign judgment is not sitting as an appellate court.
Godard v Gray
(1870), LR 6 QB 139
BLACKBURN J (Mellor J concurring):

In this case the plaintiffs declare on a judgment of a French tribunal, averred to have
jurisdiction in that behalf.
The question arises on a demurrer to the second plea, which sets out the whole pro-
ceedings in the French court. By these it appears that the plaintiffs, who are Frenchmen,
sued the defendants, who are Englishmen, on a charterparty made at Sunderland, which
charterparty contained the following clause, “Penalty for non-performance of this agree-
ment, estimated amount of freight.” The French court below, treating this clause as fixing
the amount of liquidated damages, gave judgment against the defendants for the amount
of freight on two voyages. On appeal, the superior court reduced the amount to the
estimated freight of one voyage, giving as their reason that the charterparty itself “fixait
l’indemnité à laquelle chacune des parties aurait droit pour inexécution de la convention
par la faute de l’autre; que moyennant paiement de cette indemnité chacune des parties avait
le droit de rompre la convention,” and the tribunal proceeds to observe that the amount
thus decreed was after all more than sufficient to cover all the plaintiffs’ loss.
All parties in France seem to have taken it for granted that the words in the charter-
party were to be understood in their natural sense; but the English law is accurately
expressed in Abbott on Shipping, part 3, c. 1, s. 6, 5th ed. p. 170, and had that passage
been brought to the notice of the French tribunal, it would have known that in an English
charterparty, as is there stated, “Such a clause is not the absolute limit of damages on either
side; the party may, if he thinks fit, ground his action upon the other clauses or covenants,
and may, in such action, recover damages beyond the amount of the penalty, if in justice
they shall be found to exceed it. On the other hand, if the party sue on such a penal clause,
he cannot, in effect, recover more than the damage actually sustained.” But it was not
brought to the notice of the French tribunal that according to the interpretation put by
the English law on such a contract, a penal clause of this sort was in fact idle and inopera-
tive. If it had been, they would, probably, have interpreted the English contract made in
England according to the English construction. No blame can be imputed to foreign
lawyers for not conjecturing that the clause was merely a brutum fulmen. The fault, if any,
was in the defendants, for not properly instructing their French counsel on this point.
Still the fact remains that we can see on the face of the proceedings that the foreign
tribunal has made a mistake on the construction of an English contract, which is a ques-
tion of English law, and that, in consequence of that mistake, judgment has been given
for an amount probably greater than, or, at all events, different from that for which it
would have been given if the tribunal had been correctly informed what construction the
English contract bore according to English law.
The question raised by the plea is, whether this is a bar to the action brought in England
to enforce that judgment, and we are all of opinion that it is not, and that the plaintiff is
entitled to judgment. …
• • •
But there still remains a question which has never, so far as we know, been expressly
decided in any court.
It is broadly laid down, by the very learned author of Smith’s Leading Cases, in the
original note to Doe v. Oliver, 2 Sm. LC 2d ed. at p. 448; that “it is clear that if the judgment
appear on the face of the proceedings to be founded on a mistaken notion of the English
law,” it would not be conclusive. For this he cites Novelli v. Rossi, 2 B & Ad. 757 (ECLR
vol. 22); which does not decide that point, and no other authority; but the great learning
and general accuracy of the writer makes his unsupported opinion an authority of weight;
and accordingly it has been treated with respect. In Scott v. Pilkington, 2 B & S at p. 42
(ECLR vol. 110), 31 LJ (QB) at p. 89, the court expressly declined to give any opinion on
the point not then raised before them. But we cannot find that it has been acted upon;
and, it is worthy of note that the present very learned editors of Smith’s Leading Cases
have very materially qualified his position, and state it thus, if the judgment “be founded
on an incorrect view of the English law, knowingly or perversely acted on;” the doctrine
thus qualified does not apply to the present case, and there is therefore, no need to inquire
how far it is accurate.
But the doctrine as laid down by Mr. Smith does apply here; and we must express an
opinion on it, and we think it cannot be supported, and that the defendant can no more
set up as an excuse, relieving him from the duty of paying the amount awarded by the
judgment of a foreign tribunal having jurisdiction over him and the cause, that the judg-
ment proceeded on a mistake as to English law, than he could set up as an excuse that
there had been a mistake as to the law of some third country incidentally involved, or as
to any other question of fact.
It can make no difference that the mistake appears on the face of the proceedings. That,
no doubt, greatly facilitates the proof of the mistake; but if the principle be to inquire
whether the defendant is relieved from a prima facie duty to obey the judgment, he must
be equally relieved, whether the mistake appears on the face of the proceedings or is to be
proved by extraneous evidence. Nor can there be any difference between a mistake made
by the foreign tribunal as to English law, and any other mistake. No doubt the English court
can, without arrogance, say that where there is a difference of opinion as to English law,
the opinion of the English tribunal is probably right; but how would it be if the question
had arisen as to the law of some of the numerous portions of the British dominions where
the law is not that of England? The French tribunal, if incidentally inquiring into the law
of Mauritius, where French law prevails, would be more likely to be right than the English
court; if inquiring into the law of Scotland it would seem that there was about an equal
chance as to which took the right view. If it was sought to enforce the foreign judgment
in Scotland, the chances as to which court was right would be altered. Yet it surely cannot
be said that a judgment shown to have proceeded on a mistaken view of Scotch law could
be enforced in England and not in Scotland, and that one proceeding on a mistaken view
of English law could be enforced in Scotland but not in England.
If, indeed, foreign judgments were enforced by our courts out of politeness and cour-
tesy to the tribunals of other countries, one could understand its being said that though
our courts would not be so rude as to inquire whether the foreign court had made a
mistake; or to allow the defendant to assert that it had, yet that if the foreign court itself
admitted its blunder they would not then act: but it is quite contrary to every analogy to
suppose that an English court of law exercises any discretion of this sort. We enforce a
legal obligation, and we admit any defence which shows that there is no legal obligation
or a legal excuse for not fulfilling it; but in no case that we know of is it ever said that a
defence shall be admitted if it is easily proved, and rejected if it would give the court much
trouble to investigate it. Yet on what other principle can we admit as a defence that there
is a mistake of English law apparent on the face of the proceedings, and reject a defence
that there is a mistake of Spanish or even Scotch law apparent in the proceedings, or that
there was a mistake of English law not apparent on the proceedings, but which the defend-
ant avers that he can show did exist. …
• • •
For these reasons we have come to the conclusion that judgment should be given for
the plaintiffs.
Beals v Saldanha
2003 SCC 72, [2003] 3 SCR 416, 234 DLR (4th) 1
MAJOR J:
[5] The appellants were Ontario residents. In 1981, they and Rose Thivy, who is
Dominic Thivy’s wife and no longer a party to this action, purchased a lot in Florida for
US$4,000. Three years later, Rose Thivy was contacted by a real estate agent acting for the
respondents as well as for William and Susanne Foody (who assigned their interest to the
Bealses’ and are no longer parties to this action) enquiring about purchasing the lot. In
the name of her co-owners, Mrs. Thivy advised the agent that they would sell the lot for
US$8,000. The written offer erroneously referred to “Lot 1” as the lot being purchased
instead of “Lot 2.” Rose Thivy advised the real estate agent of the error and subsequently
changed the number of the lot on the offer to “Lot 2.” The amended offer was accepted
and “Lot 2” was transferred to the respondents and the Foodys.
[6] The respondents had purchased the lot in question in order to construct a model
home for their construction business. Some months later, the respondents learned that
they had been building on Lot 1, a lot that they did not own. In February 1985, the respond-
ents commenced what was the first action in Charlotte County, Florida, for “damages
which exceed $5,000.” This was a customary way of pleading in Florida to give the Circuit
Court monetary jurisdiction. The appellants, representing themselves, filed a defence. In
September 1986, the appellants were notified that that action had been dismissed volun-
tarily and without prejudice because it had been brought in the wrong county.
[7] In September 1986, a second action (“Complaint”) was commenced by the
respondents in the Circuit Court for Sarasota County, Florida. That Complaint was served
on the appellants, in Ontario, to rescind the contract of purchase and sale and claimed
damages in excess of US$5,000, treble damages and other relief authorized by statute in
Florida. This Complaint was identical to that in the first action except for the addition of
allegations of fraud. Shortly thereafter, an Amended Complaint, simply deleting one of
the defendants, was served on the appellants. A statement of defence (a duplicate of the
defence filed in the first action) was filed by Mrs. Thivy on behalf of the appellants. The
trial judge accepted the evidence of the Saldanhas that they had not signed the document.
Accordingly, the Saldanhas were found not to have attorned. As discussed further in these
reasons, Dominic Thivy’s situation differs.
[8] In May 1987, the respondents served a Second Amended Complaint which modi-
fied allegations brought against a co-defendant who is no longer a party, but included all
the earlier allegations brought against the appellants. No defence was filed. A Third
Amended Complaint was served on the appellants on May 7, 1990 and again, no defence
was filed. Under Florida law, the appellants were required to file a defence to each new
amended complaint; otherwise, they risked being noted in default. A motion to note the
appellants in default for their failure to file a defence to the Third Amended Complaint
and a notice of hearing were served on the appellants in June 1990. The appellants did
not respond to this notice. On July 25, 1990, a Florida court entered “default” against the
appellants, the effect of which, under Florida law, was that they were deemed to have
admitted the allegations contained in the Third Amended Complaint.
[9] The appellants were served with notice of a jury trial to establish damages. They
did not respond to the notice nor did they attend the trial held in December 1991. Mr.
Foody, the respondent Mr. Beals, and an expert witness on business losses testified at the
trial. The jury awarded the respondents damages of US$210,000 in compensatory damages
and US$50,000 in punitive damages, plus post-judgment interest of 12 percent per annum.
Notice of the monetary judgment was received by the appellants in late December 1991.
[10] Upon receipt of the notice of the monetary judgment against them, the Saldanhas
sought legal advice. They were advised by an Ontario lawyer that the foreign judgment
could not be enforced in Ontario because the appellants had not attorned to the Florida
court’s jurisdiction. Relying on this advice, the appellants took no steps to have the judg-
ment set aside, as they were entitled to try and do under Florida law, or to appeal the
judgment in Florida. Florida law permitted the appellants ten days to commence an appeal
and up to one year to bring a motion to have the judgment obtained there set aside on
the grounds of “excusable neglect,” “fraud” or “other misconduct of an adverse party.”
[11] In 1993, the respondents brought an action before the Ontario Court (General
Division) seeking the enforcement of the Florida judgment. By the time of the hearing
before that court, in 1998, the foreign judgment, with interest, had grown to approximately
C$800,000. The trial judge [(1998), 42 OR (3d) 127] dismissed the action for enforcement
on the ground that there had been fraud in relation to the assessment of damages and for
the additional reason of public policy. The Ontario Court of Appeal [(2001), 54 OR (3d)
641], Weiler JA dissenting, allowed the appeal.
• • •
B. Defences to the Enforcement of Judgments

[39] Once the “real and substantial connection” test is found to apply to a foreign
judgment, the court should then examine the scope of the defences available to a domestic
defendant in contesting the recognition of such a judgment.
[40] The defences of fraud, public policy and lack of natural justice were developed
before Morguard, supra, and still pertain. This Court has to consider whether those
defences, when applied internationally, are able to strike the balance required by comity,
the balance between order and fairness as well as the real and substantial connection, in
respect of enforcing default judgments obtained in foreign courts.
[41] These defences were developed by the common law courts to guard against
potential unfairness unforeseen in the drafting of the test for the recognition and enforce-
ment of judgments. The existing defences are narrow in application. They are the most
recognizable situations in which an injustice may arise but are not exhaustive.
[42] Unusual situations may arise that might require the creation of a new defence to
the enforcement of a foreign judgment. However, the facts of this case do not justify
speculating on that possibility. Should the evolution of private international law require
the creation of a new defence, the courts will need to ensure that any new defences con-
tinue to be narrow in scope, address specific facts and raise issues not covered by the
existing defences.
(1) The Defence of Fraud

[43] As a general but qualified statement, neither foreign nor domestic judgments will
be enforced if obtained by fraud.
[44] Inherent to the defence of fraud is the concern that defendants may try to use
this defence as a means of relitigating an action previously decided and so thwart the
finality sought in litigation. The desire to avoid the relitigation of issues previously tried
and decided has led the courts to treat the defence of fraud narrowly. It limits the type of
evidence of fraud which can be pleaded in response to a judgment. If this Court were to
widen the scope of the fraud defence, domestic courts would be increasingly drawn into
a re-examination of the merits of foreign judgments. That result would obviously be
contrary to the quest for finality.
[45] Courts have drawn a distinction between “intrinsic fraud” and “extrinsic fraud”
in an attempt to clarify the types of fraud that can vitiate the judgment of a foreign court.
Extrinsic fraud is identified as fraud going to the jurisdiction of the issuing court or the
kind of fraud that misleads the court, foreign or domestic, into believing that it has juris-
diction over the cause of action. Evidence of this kind of fraud, if accepted, will justify
setting aside the judgment. On the other hand, intrinsic fraud is fraud which goes to the
merits of the case and to the existence of a cause of action. The extent to which evidence
of intrinsic fraud can act as a defence to the recognition of a judgment has not been as
clear as that of extrinsic fraud.
[46] A restrictive application of the defence of fraud was endorsed in Woodruff v.
McLennan (1887), 14 OAR 242. The Ontario Court of Appeal stated, at pp. 254-55, that
the defence could be raised where
the recovery was collusive, [the] defendant had never been served with process, … the suit
had been undefended without defendant’s default, … the defendant had been fraudulently
persuaded by plaintiff to let judgment go by default … or some fraud to defendant’s prejudice
committed or allowed in the proceedings of the other Court. …
Woodruff established that evidence of fraud that went to the merits of the case (intrinsic)
was inadmissible. Only evidence of fraud which misled a court into taking jurisdiction
(extrinsic) was admissible and could bar the enforcement of the judgment.
[47] Woodruff, supra, was subsequently modified by the Ontario Court of Appeal. See
Jacobs v. Beaver (1908), 17 OLR 496, at p. 506:
… the fraud relied on must be something collateral or extraneous, and not merely the fraud
which is imputed from alleged false statements made at the trial, which were met by counter-
statements by the other side, and the whole adjudicated upon by the Court and so passed
on into the limbo of estoppel by the judgment. This estoppel cannot, in my opinion, be dis-
turbed except upon the allegation and proof of new and material facts, or newly discovered and
material facts which were not before the former Court and from which are to be deduced the
new proposition that the former judgment was obtained by fraud. The burden of that issue is
upon the defendant, and until he at least gives prima facie evidence in support of it, the
estoppel stands. And it may be, as I have before stated, that when such evidence is given, and
in order to fully prove this new issue, the whole case should be re-opened. [Emphasis added.]
The court, in Jacobs, acknowledged that in addition to evidence of extrinsic fraud, evi-
dence of intrinsic fraud was admissible where the defendant could establish “proof of new
and material facts” that, not being available at the time of trial, were not before the issuing
court and demonstrate that the judgment sought to be enforced was obtained by fraud.
[48] Contrary to the decision of the Ontario Court of Appeal in Jacobs, the courts of
British Columbia take a different view. In Roglass Consultants Inc. v. Kennedy, Lock (1984),
65 BCLR 393, the British Columbia Court of Appeal maintained the strict approach to
the fraud defence set out in Woodruff. It held that only extrinsic fraud could be raised in
defence of the enforcement of a foreign judgment.
[49] In Powell v. Cockburn, [1977] 2 SCR 218, it was clear that the aim in refusing rec-
ognition of a judgment because of fraud “is to prevent abuse of the judicial process” (p. 234).
In that case, the Court did not address fraud going to the merits of a judgment but did
confirm that fraud going to jurisdiction (extrinsic fraud) is always open to impeachment.
[50] What should be the scope of the defence of fraud in relation to foreign judgments?
Jacobs, supra, represents a reasonable approach to that defence. It effectively balances the
need to guard against fraudulently obtained judgments with the need to treat foreign
judgments as final. I agree with Doherty JA for the majority in the Court of Appeal that
the “new and material facts” discussed in Jacobs must be limited to those facts that a
defendant could not have discovered and brought to the attention of the foreign court
through the exercise of reasonable diligence.
[51] The historic description of and the distinction between intrinsic and extrinsic
fraud are of no apparent value and, because of their ability to both complicate and confuse,
should be discontinued. It is simpler to say that fraud going to jurisdiction can always be
raised before a domestic court to challenge the judgment. On the other hand, the merits
of a foreign judgment can be challenged for fraud only where the allegations are new and
not the subject of prior adjudication. Where 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.
[52] Where a foreign judgment was obtained by fraud that was undetectable by the
foreign court, it will not be enforced domestically. “Evidence of fraud undetectable by the
foreign court” and the mention of “new and material facts” in Jacobs, supra, demand an
element of reasonable diligence on the part of a defendant. To repeat Doherty JA’s ruling,
in order to raise the defence of fraud, a defendant has the burden of demonstrating that
the facts sought to be raised could not have been discovered by the exercise of due dili-
gence prior to the obtaining of the foreign judgment. See para. 43:
A due diligence requirement is consistent with the policy underlying the recognition and
enforcement of foreign judgments. In the modern global village, decisions made by foreign
courts acting within Canadian concepts of jurisdiction and in accordance with fundamental
principles of fairness should be respected and enforced. That policy does not, however, extend
to protect decisions which are based on fraud that could not, through the exercise of reasonable
diligence, have been brought to the attention of the foreign court. Respect for the foreign court
does not diminish when a refusal to enforce its judgment is based on material that could
not, through the exercise of reasonable diligence, have been placed before that court.
[Emphasis added.]
Such an approach represents a fair balance between the countervailing goals of comity
and fairness to the defendant.
[53] Although Jacobs, supra, was a contested foreign action, the test used is equally
applicable to default judgments. Where the foreign default proceedings are not inherently
unfair, failing to defend the action, by itself, should prohibit the defendant from claiming
that any of the evidence adduced or steps taken in the foreign proceedings was evidence
of fraud just discovered. But if there is evidence of fraud before the foreign court that
could not have been discovered by reasonable diligence, that will justify a domestic court’s
refusal to enforce the judgment.
[54] In the present case, the appellants made a conscious decision not to defend the
Florida action against them. The pleadings of the respondents then became the facts that
were the basis for the Florida judgment. As a result, the appellants are barred from attack-
ing the evidence presented to the Florida judge and jury as being fraudulent.
[55] The appellants have not claimed that there was evidence of fraud that they could
not have discovered had they defended the Florida action. In the absence of newly dis-
covered evidence of fraud, I agree with the Court of Appeal that the trial judge erred in
admitting evidence he found established fraud. He erred in law by failing to limit “new
and material facts” to facts which could not have been discovered by the appellants by
the exercise of reasonable diligence.
[56] There was no evidence before the trial judge to support fraud. In fact, the trial
judge, himself, stated (at p. 131):
No record of the damage assessment proceedings exists, and the evidence heard by the jury
is unknown. There is similarly no record of the instructions given to the jury by the trial
judge.
In the absence of such evidence, the trial judge erred in concluding that there was fraud.
It is impossible to know whether the evidence now sought to be adduced by the appellants
had been previously considered by the jury. The respondent Mr. Beals and an expert on
business losses both testified before the Florida jury and gave uncontradicted evidence.
Before the Ontario court, Mr. Beals was available for questioning but was not called upon
by the appellants to address the allegations of fraud. Similarly, the respondents’ counsel
in the Florida action testified but no questions of fraud were raised with him.
[57] No evidence was led to show that the jury was misled (deliberately or not) on the
extent of the damages. The admitted facts presented to the jury included allegations of
fraudulent misrepresentations and loss of profits. The claim by the respondents was for
damages to recoup the purchase price of the land, loss of profits and punitive damages.
The nature of the damages sought, as well as the admitted facts presented to the Florida
jury, was evidence upon which that jury could reasonably reach the damages that it did.
I agree with the majority in the Court of Appeal that, although the amount of damages
awarded may seem disproportionate, it was a palpable and overriding error for the trial
judge to conclude on the dollar amount of the judgment alone that the Florida jury must
have been misled.
[58] As the appellants did not provide any evidence of new and previously undiscover-
able facts suggestive of fraud, the defence of fraud cannot form the basis of a valid chal-
lenge to the application for enforcement of the respondents’ judgment.
(2) The Defence of Natural Justice

[59] As previously stated, the denial of natural justice can be the basis of a challenge
to a foreign judgment and, if proven, will allow the domestic court to refuse enforcement.
A condition precedent to that defence is that the party seeking to impugn the judgment
prove, to the civil standard, that the foreign proceedings were contrary to Canadian
notions of fundamental justice.
[60] A domestic court enforcing a judgment has a heightened duty to protect the
interests of defendants when the judgment to be enforced is a foreign one. The domestic
court must be satisfied that minimum standards of fairness have been applied to the
Ontario defendants by the foreign court.
[61] The enforcing court must ensure that the defendant was granted a fair process.
Contrary to the position taken by my colleague LeBel J, it is not the duty of the plaintiff
in the foreign action to establish that the legal system from which the judgment originates
is a fair one in order to seek enforcement. The burden of alleging unfairness in the foreign
legal system rests with the defendant in the foreign action.
[62] Fair process is one that, in the system from which the judgment originates,
reasonably guarantees basic procedural safeguards such as judicial independence and fair
ethical rules governing the participants in the judicial system. This determination will
need to be made for all foreign judgments. Obviously, it is simpler for domestic courts to
assess the fairness afforded to a Canadian defendant in another province in Canada. In
the case of judgments made by courts outside Canada, the review may be more difficult
but is mandatory and the enforcing court must be satisfied that fair process was used in
awarding the judgment. This assessment is easier when the foreign legal system is either
similar to or familiar to Canadian courts.
[63] In the present case, the Florida judgment is from a legal system similar, but not
identical, to our own. If the foreign state’s principles of justice, court procedures and judi-
cial protections are not similar to ours, the domestic enforcing court will need to ensure
that the minimum Canadian standards of fairness were applied. If fair process was not
provided to the defendant, recognition and enforcement of the judgment may be denied.
[64] The defence of natural justice is restricted to the form of the foreign procedure,
to due process, and does not relate to the merits of the case. The defence is limited to the
procedure by which the foreign court arrived at its judgment. However, if that procedure,
while valid there, is not in accordance with Canada’s concept of natural justice, the foreign
judgment will be rejected. The defendant carries the burden of proof and, in this case,
failed to raise any reasonable apprehension of unfairness.
[65] In Canada, natural justice has frequently been viewed to include, but is not lim-
ited to, the necessity that a defendant be given adequate notice of the claim made against
him and that he be granted an opportunity to defend. The Florida proceedings were not
contrary to the Canadian concept of natural justice. The appellants concede that they
received notice of all the legal procedure taken in the Florida action and that the judge
of the foreign court respected the procedure of that jurisdiction. The appellants submit,
however, that they were denied natural justice because they were not given sufficient
notice to enable them to discover the extent of their financial jeopardy.
[66] The appellants claim to have been denied the opportunity to assess the extent of
their financial jeopardy because the respondents’ claim failed to specify the exact dollar
amount of damages and types of damages they were seeking. The Florida claims, particu-
larly the Third Amended Complaint, made it clear that the damages sought were poten-
tially significant. The complaints filed in Florida raised allegations of fraud and sought
punitive damages, both of which allow for the possibility of a substantial award of dam-
ages. Treble damages were sought. Repayment of the purchase price, the amount lost by
the respondents due to their inability to construct a model home on the lot, the expenses
incurred in preparing that lot and lost revenue due to the respondents’ inability to con-
struct a model home to be used in their construction business were all sought in the Third
Amended Complaint. In light of knowing the types of damages claimed, not being pro-
vided with a specific dollar value of the amount of damages sought cannot constitute a
denial of natural justice. The appellants were mistaken when they presumed that the
damages award would be approximately US$8,000.
[67] The respondents did not give notice that an expert on the assessment of business
losses would testify before the Florida jury. The failure to disclose witnesses in a notice
of assessment is not a denial of natural justice.
[68] LeBel J would expand the defence of natural justice by interpreting the right to
receive notice of a foreign action to include notice of the legal steps to be taken by the
defendant where the legal system differs from that of Canada’s and of the consequences
flowing from a decision to defend, or not defend, the foreign action. Where such notice
was not given, he would deny enforcement of the resulting judgment. No such burden
should rest with the foreign plaintiff. Within Canada, defendants are presumed to know
the law of the jurisdiction seized with an action against them. Plaintiffs are not required
to expressly or implicitly notify defendants of the steps that they must take when notified
of a claim against them. This approach is equally appropriate in the context of inter-
national litigation. To find otherwise would unduly complicate cross-border transactions
and hamper trade with Canadian parties. A defendant to a foreign action instituted in a
jurisdiction with a real and substantial connection to the action or parties can reasonably
be expected to research the law of the foreign jurisdiction. The Saldanhas and Thivys
owned land in the State of Florida and entered into a real estate transaction in that state.
When served with notice of an action against them in the State of Florida, the appellants
were responsible for gaining knowledge of Florida procedure in order to discover the
particularities of that legal system.
[69] My interpretation of the Florida legal system differs from that of LeBel J in that
I am of the opinion that the appellants were fully informed about the Florida action. They
were advised of the case to meet and were granted a fair opportunity to do so. They did
not defend the action. Once they received notice of the amount of the judgment, the
appellants obviously had precise notice of the extent of their financial exposure. Their
failure to act when confronted with the size of the award of damages was not due to a lack
of notice but due to relying on the mistaken advice of their lawyer.
[70] For these reasons, the defence of natural justice does not arise.
(3) The Defence of Public Policy

[71] The third and final defence is that of public policy. This defence prevents the
enforcement of a foreign judgment which is contrary to the Canadian concept of justice.
The public policy defence turns on whether the foreign law is contrary to our view of
basic morality. As stated in Castel and Walker [Canadian Conflict of Laws, 5th ed. (2002)],
at p. 14-28:
… the traditional public policy defence appears to be directed at the concept of repugnant
laws and not repugnant facts. …
[72] How is this defence of assistance to a defendant seeking to block the enforcement
of a foreign judgment? It would, for example, prohibit the enforcement of a foreign judg-
ment that is founded on a law contrary to the fundamental morality of the Canadian legal
system. Similarly, the public policy defence guards against the enforcement of a judgment
rendered by a foreign court proven to be corrupt or biased.
[73] The appellants submitted that the defence of public policy should be broadened
to include the case where neither the defence of natural justice nor the current defence
of public policy would apply but where the outcome is so egregious that it justifies a
domestic court’s refusal to enforce the foreign judgment. The appellants argued that, as
a matter of Canadian public policy, a foreign judgment should not be enforced if the award
is excessive, would shock the conscience of, or would be unacceptable to, reasonable
Canadians. The appellants claimed that the public policy defence provides a remedy where
the judgment, by its amount alone, would shock the conscience of the reasonable Can-
adian. It was argued that, if the respondents and their witnesses were truthful in the
Florida proceeding, it must follow that the laws in Florida permit a grossly excessive award
for lost profits absent a causal connection between the acts giving rise to liability and the
damages suffered. Such a result, the appellants submitted, would shock the conscience of
the reasonable Canadian. I do not agree.
[74] Blom [“The Enforcement of Foreign Judgments: Morguard Goes Forth into the
World” (1997) 29 Can Bus LJ 373] predicted the appellants’ request for the expansion of
the public policy defence (at p. 400):
The only change that the Morguard approach to recognition may bring in its wake is a greater
temptation to expand the notion of public policy, so as to justify refusing a foreign default
judgment that meets the Morguard criteria, but whose enforcement nevertheless appears to
impose a severe hardship on the defendant.
[75] The use of the defence of public policy to challenge the enforcement of a foreign
judgment involves impeachment of that judgment by condemning the foreign law on
which the judgment is based. It is not a remedy to be used lightly. The expansion of this
defence to include perceived injustices that do not offend our sense of morality is
unwarranted. The defence of public policy should continue to have a narrow application.
[76] The award of damages by the Florida jury does not violate our principles of mor-
ality. The sums involved, although they have grown large, are not by themselves a basis
to refuse enforcement of the foreign judgment in Canada. Even if it could be argued in
another case that the arbitrariness of the award can properly fit into a public policy argu-
ment, the record here does not provide any basis allowing the Canadian court to re-
evaluate the amount of the award. The public policy defence is not meant to bar
enforcement of a judgment rendered by a foreign court with a real and substantial con-
nection to the cause of action for the sole reason that the claim in that foreign jurisdiction
would not yield comparable damages in Canada.
[77] There was no evidence that the Florida procedure would offend the Canadian
concept of justice. I disagree for the foregoing reasons that enforcement of the Florida
monetary judgement would shock the conscience of the reasonable Canadian.
[Binnie J, like LeBel J, dissented. He found that there was a breach of natural justice
consisting of lack of adequate notice in this case. He examined the facts in greater detail
than any other judge at any level of decision in the case. The following extract summarizes
his views.]
BINNIE J (Iacobucci J concurring):

[81] The question raised by this appeal is the sufficiency of the notice provided to
Ontario defendants (the appellants) of Florida proceedings against them by two Sarasota
County real estate developers over the sale of an empty residential building lot in 1984
for US$8,000. The subject matter of their contract turned out to be the wrong lot. The
respondents kept the lot (they say they did not intend to purchase) and sued the appellants
for damages.
[82] The Florida default judgment now commands payment of over C$1,000,000, an
award described by the Ontario trial judge as “breathtaking.” The damages were assessed
by a Florida jury in less than half a day.
[83] If the notice had been sufficient, I would have agreed reluctantly with the majority
of my colleagues that the default judgment against them would be enforceable in Ontario
despite the fact the foreign court never got to hear the Ontario defendants’ side of the
story. Their failure to participate using the procedures open to them in Florida would
have bound them to the result. However, in my view, the appellants’ inactivity in the face
of their mushrooming legal problem is explained by the fact they were kept in the dark
about the true nature and extent of their jeopardy. They were not served with some of the
more important documents on liability filed in the Florida proceeding before they were
noted in default, nor were they served with other important documents relevant to the
assessment of damages filed after default but prior to the trial at which judgment was
entered against them. Proper notice is a function of the particular circumstances of the
case giving rise to the foreign default judgment. In this case, in my view, there was a failure
of notification amounting to a breach of natural justice. In these circumstances, the
Ontario courts ought not to give effect to the Florida judgment.
I. Real and Substantial Connection

[84] I agree with Major J that the “real and substantial connection” test developed in
Morguard Investments Ltd. v. De Savoye, [1990] 3 SCR 1077, Hunt v. T&N plc, [1993] 4
SCR 289, at p. 325, and Tolofson v. Jensen, [1994] 3 SCR 1022, at p. 1058, provides an
appropriate conceptual basis for the enforcement in Canada of final judgments obtained
in foreign jurisdictions as it does for final judgments obtained in other provinces.
[85] That said, I recognize that there are significant differences between enforcement
of a foreign judgment and enforcement of judgments from one province or territory to
another within the Canadian federation. As La Forest J observed in Morguard (at p. 1098):
The considerations underlying the rules of comity apply with much greater force between
the units of a federal state. …
Morguard went on to refer to “[t]he integrating character of our constitutional arrange-

ments” (p. 1100), including (1) common citizenship, (2) interprovincial mobility of cit-
izens, (3) the common market among the provinces envisaged by our Constitution, and
(4 the essentially unitary structure of our judicial system presided over by the Supreme
Court of Canada. The constitutional flavour of the Morguard analysis was picked up and
emphasized in Hunt, supra, and again in Spar Aerospace Ltd. v. American Mobile Satellite
Corp., [2002] 4 SCR 205, 2002 SCC 78, at para. 53. We should not backtrack on the
importance of that distinction.
[86] It stands to reason that if the issues posed by the enforcement of foreign judg-
ments differ from the issues encountered in the enforcement of judgments among the
provinces and the territories, the legal rules are not going to be identical. Accordingly,
while I accept that the Morguard test (“real and substantial connection”) provides a
framework for the enforcement of foreign judgments, it would be prudent at this stage
not to be overly rigid in staking out a position on available defences beyond what the facts
of this case require. Both Major J (paras. 39-41) and LeBel J (paras. 217-18) acknowledge
(with varying degrees of enthusiasm) that a greater measure of flexibility may be called
for in considering defences to the enforcement of foreign judgments as distinguished
from interprovincial judgments. The time will come when such a re-examination of
available defences will be necessary. The need for such a re-examination does not arise
in this case. The appellants come within the traditional limits of the natural justice defence,
and their appeal should be allowed on that ground. …
Does the due diligence requirement for fraud apply to fraud going to jurisdiction as well as
to fraud going to the merits? See e.g. Lang v Lapp, 2010 BCCA 517. Is there an obligation on a
defendant to have exhausted foreign local remedies before invoking the defence of breach
of natural justice? See Cortés v Yorkton Securities Inc, 2007 BCSC 282, 278 DLR (4th) 740.
B. Non-Pecuniary Judgments
In Hunt v T&N plc, [1993] 4 SCR 289, 109 DLR (4th) 16 (reproduced in Chapter 3), the Supreme
Court held that Quebec was constitutionally required to recognize an order from a British
Columbia court and, therefore, that a Quebec statute that amounted to a pre-emptive
refusal of recognition was constitutionally inapplicable within Canada. The BC order was
non-pecuniary. It was an order for discovery of documents. In 2006, the court took Hunt to
its logical common law conclusion and authorized recognition and enforcement of non-
pecuniary judgments generally.
Pro-Swing Inc v Elta Golf Inc

2006 SCC 52, [2006] 2 SCR 612
DESCHAMPS J (LeBel, Fish, and Abella JJ concurring):

[1] Modern-day commercial transactions require prompt reactions and effective
remedies. The advent of the Internet has heightened the need for appropriate tools. On
the one hand, frontiers remain relevant to national identity and jurisdiction, but on the
other hand, the globalization of commerce and mobility of both people and assets make
them less so. The law and the justice system are servants of society, not the reverse. The
Court has been asked to change the common law. The case for adapting the common law
rule that prevents the enforcement of foreign non-money judgments is compelling. But
such changes must be made cautiously. Although I recognize the need for a new rule, it
is my view that this case is not the right one for implementing it.
I. Background and Judicial History

[2] The appellant, Pro Swing Inc., manufactures and sells customized golf clubs and
golf club heads. It owns the Trident trademark in the US. On April 27, 1998, Pro Swing
filed a complaint against eight defendants for trademark infringement in the United States
District Court for the Northern District of Ohio Eastern Division (“Ohio court”). The
respondent, Elta Golf Inc., an Ontario resident, was named as a defendant. In the action,
Pro Swing alleged that Elta was offering and selling golf clubs or golf club heads on its
Web site under the infringing trademark Rident. On July 6, 1998, in Ontario, Mr. Frank
Lin, as president of Elta, signed a declaration in which he stated that he now knew of Pro
Swing’s trademark. He declared that he had three golf clubs or golf club heads bearing
the mark Rident, that he had never sold any and that he would discontinue advertising
and distributing the clubs or club heads. The declaration was incorporated into a settle-
ment agreement which stated that Pro Swing relied on the representations of Elta as to
the use of Rident on golf clubs or golf club heads. Elta further represented in the agree-
ment that it had discontinued marketing or using golf clubs or golf club heads bearing
the mark Trident, Rident, Riden or Trigoal, and it undertook not to purchase, sell or use
club components bearing those marks or a confusingly similar mark without the author-
ization of Pro Swing. It also undertook to deliver to Pro Swing’s counsel any clubs or golf
club heads and marketing material in its possession, and to modify its Web page. On July
28, 1998, a consent decree was endorsed by Matia J of the Ohio court … .
[3] On December 20, 2002, Pro Swing filed a motion for contempt of court, alleging
that Elta had violated the consent decree by failing to surrender the items and by advertis-
ing and selling club heads. Pro Swing filed a declaration stating that an investigator had
purchased two golf club heads on the Internet, one bearing the Trident and the other the
Rident mark, for delivery in Ohio. On February 25, 2003, after finding that Elta had
violated the consent decree, Matia J issued a contempt order … .
[4] As the Superior Court judge noted, the orders overlap to a certain extent ((2003),
68 OR (3d) 443). The relevant elements are as follows:
1. an injunction prohibiting Elta from purchasing, marketing, selling or using golf clubs
or components bearing Pro Swing’s trademark or any confusingly similar variations
of it (consent decree, at para. 7; contempt order, at para. 2);
2. an order that Elta surrender and deliver all infringing clubs and/or components in its
possession, along with any advertising, packaging, promotional or other materials, to
counsel for Pro Swing (consent decree, at para. 8; contempt order, at para. 6);
3. an order for an accounting of all infringing golf clubs and/or components sold since
the consent decree (contempt order, at para. 3);
4. an order for compensatory damages based on profits derived through sales of infringing
goods since the consent decree (contempt order, at para. 4);
5. an order for costs and attorney’s fees against Elta (contempt order, at para. 5);
6. an order that Elta provide the names of and contact information for the suppliers and
purchasers of infringing goods, and that it pay the costs of a corrective mailing (con-
tempt order, at paras. 7 and 8); and
7. an order that Elta recall all counterfeit and infringing goods (contempt order, at para. 9).
[5] In June 2003, Pro Swing filed in the Ontario Superior Court of Justice a motion
for recognition and enforcement of the consent decree and the contempt order. Elta
objected that the two judgments could not be recognized or enforced because they did
not meet the common law requirements of being final judgments in personam for a fixed
sum of money and that the contempt order was excluded from recognition and enforce-
ment because it was quasi-criminal in nature.
[6] While acknowledging that the traditional common law rule required that the
judgment be for a fixed sum of money, the Superior Court judge found that the latest
jurisprudence opened the way for a relaxation of the rule. She found it clear from the
terms of the consent decree that extraterritorial application was intended. She declared
the consent decree valid and enforceable in Ontario. On the contempt order, she was of
the view that it was restitutionary in nature and engaged a dispute between private parties.
She found that parts of the contempt order were duplicative of the consent decree and
were not final, and concluded that the portions not offending the finality requirement
could be severed. She recognized paras. 3, 7, 8 and 9 of the contempt order and declared
them to be enforceable.
[7] Elta appealed the Superior Court’s judgment, asking for its reversal. Pro Swing
cross-appealed, asking for recognition and enforcement of the entire contempt order. The
Court of Appeal stated that it was inclined to agree that the “time is ripe for a re-examination
of the rules governing the recognition and enforcement of foreign non-monetary judg-
ments” ((2004), 71 OR (3d) 566, at para. 9) … .
[8] However, the Court of Appeal found that the orders were not “sufficiently certain
in [their] terms” to be enforced, giving as an example the issue of extraterritoriality it
qualified as critical. The Court of Appeal also noted that Pro Swing could have taken
action in Ontario based on the settlement agreement, or for infringement of its trademark
rights if such rights extended to Canada. As well, the court was of the view that Pro Swing
could have instituted proceedings to obtain the information it required to provide to the
Ohio judge the proposed damage award contemplated in the contempt order. The Court
of Appeal allowed the appeal and dismissed the cross-appeal. Pro Swing was granted leave
to appeal to this Court.
[9] Two issues are raised in this appeal: whether foreign non-money judgments can
be recognized and enforced, and whether such a change to the existing common law rule
entails additional considerations reflecting the new needs created by expanding judicial
assistance to foreign countries and litigants in this way. This last issue is not formally
raised by the appellant, but it is inherently linked to the departure from the traditional
rule. To allow for the recognition and enforcement of non-money orders will open the
door to a number of equitable orders. The crux of this issue is to determine the consider-
ations relevant to the recognition and enforcement of such orders.
II. Traditional Common Law Rule

[10] The traditional common law rule is clear and simple. In order to be recognizable
and enforceable, a foreign judgment must be “(a) for a debt, or definite sum of money
(not being a sum payable in respect of taxes or other charges of a like nature or in respect
of a fine or other penalty); and (b) final and conclusive, but not otherwise” (Dicey and
Morris on the Conflict of Laws (13th ed. 2000), vol. 1, Rule 35, at pp. 474-75 (footnotes
omitted)). Similarly, J.-G. Castel and J. Walker, in Canadian Conflict of Laws (6th ed.
(loose-leaf)), at para. 14.6, state that “[a] foreign judgment in personam given by a court
of competent jurisdiction is enforceable provided that it is final and conclusive, and for
a definite sum of money.”
[11] The foreign judgment is evidence of a debt. All the enforcing court needs is proof
that the judgment was rendered by a court of competent jurisdiction and that it is final,
and proof of its amount. The enforcing court then lends its judicial assistance to the
foreign litigant by allowing him or her to use its enforcement mechanisms. Professor
Vaughan Black explains the consequences of the recognition and enforcement of a money
judgment at common law in “Enforcement of Foreign Non-money Judgments: Pro Swing
v. Elta” (2006), 42 Can. Bus. LJ 81, at p. 89:
That is, [the Canadian court] always uses its own rules on such matters as the availability of
garnishment, the effect of garnishment on employment, the effect of a payment into court,
the date of conversion from a foreign currency into the local money, and the proper proced-
ures for seizure and attachment. Likewise, even when enforcing a money judgment from [a
foreign court, the Canadian court] employs its own exemptions legislation, its own rules for
controlling competition among judgment creditors, and its own rules on post-judgment
interest. In short, when a Canadian court recognizes a foreign judgment that says that the
defendant must pay the plaintiff a sum of money, that foreign judgment is simply evidence
of a debt. The recognizing court goes about collection (or limiting collection) of that debt in
its own way. [Emphasis in original.]
[12] As this Court confirmed in Beals v. Saldanha, [2003] 3 SCR 416, 2003 SCC 72,
absent evidence of fraud or of a violation of natural justice or of public policy, the enforc-
ing court is not interested in the substantive or procedural law of the foreign jurisdiction
in which the judgment sought to be enforced domestically was rendered.
[13] It is significant that, under the traditional common law rule, the recognition and
enforcement of a money judgment does not require an interpretation of the foreign law,
nor does it reach deeply into the structure of the domestic court’s justice system, since
the money obligation created by the foreign judgment is sufficient evidence to enforce it
in the Canadian justice system. Care must thus be taken not to lose sight of the limited
impact the common law rule has on our justice system. Judicial assistance under the new
rule will move beyond triggering mechanisms necessary to collect a debt. The separation
of judicial systems is thus likely to be altered, since a domestic court enforcing a foreign
non-money judgment may have to interpret and apply another jurisdiction’s law. Professor
Black illustrates this by way of the following example (at p. 89):
A [foreign court] might issue an injunction which spells out in great detail what, when and
how a defendant must do (or refrain from doing) something. If [a Canadian court] recognizes
such an injunction then the courts in [the foreign country] have been permitted to reach
deeply into the enforcement regime of [Canada]. It is the original [foreign order] (albeit
confirmed by [a Canadian court]) that will control what the defendant must and must not
do in [Canada]. Of course, if the defendant in [Canada] fails to comply with the order then
any contempt proceedings in [Canada] will be conducted in accordance with [Canadian]
procedure. But apart from that, when [a Canadian court] agrees to enforce an injunction
issued by a court in [a foreign country], then [the foreign country] is dictating and control-
ling the enforcement process in [Canada], something that does not occur when [the Can-
adian court] enforces a foreign money judgment.
[14] To depart from the fixed-sum component of the traditional common law rule
will open the door to equitable orders such as injunctions, which are key to an effective
modern-day remedy. The recognition and enforcement of equitable orders will require a
balanced measure of restraint and involvement by the domestic court that is otherwise
unnecessary when the court merely agrees to use its enforcement mechanisms to collect
a debt.
[15] I agree that the time is ripe to revise the traditional common law rule that limits
the recognition and enforcement of foreign orders to final money judgments. However,
such a change must be accompanied by a judicial discretion enabling the domestic court
to consider relevant factors so as to ensure that the orders do not disturb the structure
and integrity of the Canadian legal system.
III. Case for Changing the Common Law Rule

[16] I have read the Chief Justice’s reasons, and I agree that there is a compelling
rationale for a change in the common law requirement. However, it must be recognized
that a departure from the common law rule will necessarily affect both commercial activity
and judicial assistance in an era of large-scale cross-border commerce, e-commerce and
cross-border litigation.
[17] For these reasons, it is important to bear in mind the need to proceed cautiously
in implementing any change. Professor Black recognizes that the principles of comity,
order and fairness articulated in Morguard [Investments Ltd v De Savoye, [1990] 3 SCR
1077] favour the recognition and enforcement of foreign non-money judgments, but he
tempers his observation by noting the need to develop a careful and nuanced approach
that attends to the features of non-money orders. In the same vein, Professor Jeff Berry-
man, in “Cross-Border Enforcement of Mareva Injunctions in Canada” (2005), 30 Adv. Q
413, underscores the fact that equitable remedies are context-dependent and subject to
amendment at the time of enforcement; he maintains that they do not lend themselves
well to simply being endorsed by Canadian courts.
[18] On a more general note, a number of law professors and practitioners have com-
mented on the enforcement of foreign judgments and have insisted on the need to adapt
the possible defences and to redefine the approach to comity to ensure that foreign judg-
ments do not conflict with domestic law. Professor Adrian Briggs, in “Crossing the River
by Feeling the Stones: Rethinking the Law on Foreign Judgments” (2004), 8 SYBIL 1,
comments positively on the Morguard test as applied to international law but questions
whether the acceptance of new bases of jurisdictional competence should entail the
development of new defences tailored specifically to them. Similarly, Professor Jeffrey
Talpis and Joy Goodman, in “A comity of errors,” Law Times, vol. 14, No. 2, January 20,
2003, at p. 7, suggest that the public policy defence should be widened to allow a court to
refuse to enforce a judgment that is manifestly unreasonable under the law of the domestic
forum. Finally, Professor Janet Walker, in “Beals v. Saldanha: Striking the Comity Balance
Anew” (2002), 5 Can. Int’l Law. 28, stresses that the “requirements of comity as they are
reflected in the rules for enforcing foreign judgments are changing along with the cir-
cumstances in which they operate” (p. 29).
[19] In summary, most of the commentators are not against finding new ways to adjust
the law to suit modern realities, but they insist on the need for a cautious approach. As
Briggs puts it, at p. 22: “It cannot be right to make radical changes to [jurisdiction] while
supposing that this has no impact on the [defences]. … [I]ncremental, intuitive, coherent,
development is what common law does best, and is how the common law conflict of laws
works best.”
[20] Morguard has led the way to developing the common law to better serve the
interests of all litigants, foreign and domestic. The need to move towards a rule more
flexible than a total bar is compelling. However, the change must be made having regard
to issues that the old rule was not concerned with. The instant case provides an oppor-
tunity to consider how the rule against enforcing non-monetary judgments can be
changed in the context of equitable orders, like injunctions, and how the specific nature
of such orders makes it necessary to view enforcement from a new perspective.
IV. Nature of Equitable Judgments

[21] A change in the traditional common law rule will be as important as was the
passage, for the purpose of establishing jurisdiction over a defendant, from the service
or attornment of the defendant requirement to the real and substantial connection test.
The latter test is flexible and its formulation has allowed it to be applied in various and
evolving circumstances. Similarly, the change from the traditional common law rule to
the recognition and enforcement of foreign non-money judgments should be accompa-
nied by the incorporation of flexible factors that reflect the specific, and varied nature of
equitable orders.
[22] At common law, the typical remedy is an award for damages. However, a wide
range of equitable remedies are available, and they take various forms. Their commonality
is that they are awarded at the judge’s discretion. Judges do not apply strict rules, but
follow general guidelines illustrated by such maxims as “Equity follows the law,” “Delay
defeats equities,” “Where the equities are equal the law prevails,” “He who comes to equity
must come with clean hands” and “Equity acts in personam” (Hanbury & Martin Modern
Equity (17th ed. 2005), at paras. 1-024 to 1-036, and I.C.F. Spry, The Principles of Equitable
Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages (6th ed.
2001), at p. 6). The application of equitable principles is largely dependent on the social
fabric. As Spry puts it:
… the maxims of equity are of significance, for they reflect the ethical quality of the body of
principles that has tended not so much to the formation of fixed and immutable rules, as
rather to a determination of the conscionability or justice of the behaviour of the parties
according to recognised moral principles. This ethical quality remains, and its presence
explains to a large extent the adoption by courts of equity of broad general principles that
may be applied with flexibility to new situations as they arise. [p. 6]
[23] The traditional rule does not leave any room for discretion as regards such con-
siderations or forms of relief. In contrast, equitable orders are crafted in accordance with
the specific circumstances of each case. The most relevant equitable remedies for the
purposes of the present case are specific performance, that is, an order by the court to a
party to perform its contractual obligations, and the injunction, that is, an order to a party
to do or refrain from doing a particular act.
[24] Despite their flexibility and specificity, Canadian relief orders are fashioned fol-
lowing general guidelines. The terms of the order must be clear and specific. The party
needs to know exactly what has to be done to comply with the order. Also, the courts do
not usually watch over or supervise performance. While the specificity requirement is
linked to the claimant’s ability to follow up non-performance with contempt of court
proceedings, supervision by the courts often means relitigation and the expenditure of
judicial resources. This factor is discussed by R.J. Sharpe, in Injunctions and Specific Per-
formance (2nd ed. (loose-leaf)), at para. 7.480:
From this perspective, the supervision concern differs from other criteria determining the
availability of specific relief. It is based not upon the weighing of relative advantage and
disadvantage to the parties but rather on the weighing of the advantage of doing justice by
granting specific relief against the general cost to society of having justice administered. By
way of contrast to specific relief, damage awards do hold certain advantages. A money judg-
ment is final and enforcement is left to the administrative rather than the judicial machinery
of the court. The cost of enforcement is largely borne by the parties. A decree for specific
performance does involve a substantially higher risk that further judicial resources will be
required. The more complex or extended the performance, the more likely further proceed-
ings will be needed to ascertain whether the defendant has complied with his or her obliga-
tions. This fear of extended and complex litigation and the need for repeated requests for
judicial intervention may be seen as a legitimate concern. The cost to society of providing
the resources necessary to implement specific performance decrees is properly considered
by the court when weighing the advantages the specific relief might otherwise offer.
Doucet-Boudreau v. Nova Scotia (Minister of Education), [2003] 3 SCR 3, 2003 SCC 62, a
case in which the judge retained jurisdiction to supervise compliance with an order
enjoining the Government of Nova Scotia to use its best efforts to provide French language
facilities and programs, demonstrates the possible extent of judicial involvement where
injunctive relief is ordered. This burden on the judicial system may be justified in the con-
text of the constitutional protection afforded to linguistic minorities, but may not be war-
ranted when the cost is not proportionate to the importance of the order. The Latin maxim
de minimis non curat praetor conveys the long-established rule that claims will be enter-
tained only if they are important enough to warrant the expenditure of public resources.
[25] Equally important concerns can be raised by other types of orders, like anti-suit
injunctions, and search or freezing orders. The question of their territorial scope is highly
relevant. In Unifund Assurance Co. v. Insurance Corp. of British Columbia, [2003] 2 SCR
63, 2003 SCC 40, and Hunt v. T&N plc, [1993] 4 SCR 289, the Court refused to give extra-
territorial effect to provincial statutes. The frontiers of the foreign state are the very reason
why its judgments need to be recognized and enforced abroad. Should the orders not be
assessed to ensure that their form is compatible with domestic law? Under the traditional
rule, the issue of clarity and specificity is not a concern, but if injunctive relief is to be
enforced, its territorial scope has to be specific and clear. Canadian residents should not be
made subject to unforeseen obligations from a foreign court or to orders in a form unknown
to Canadian courts. This issue goes not to the jurisdiction of the foreign court, but either
to the framing of new conditions for recognition and enforcement or to new defences.
V. Considerations Particular to Equitable Orders

[26] Under the traditional common law rule, courts have relied on the notion of
comity to justify the recognition and enforcement of foreign judgments. But it is worth
noting that in Morguard, the Court took a balanced approach to comity. In that case,
La Forest J first referred to (at p. 1096):
… the real nature of the idea of comity, an idea based not simply on respect for the dictates
of a foreign sovereign, but on the convenience, nay necessity, in a world where legal authority
is divided among sovereign states of adopting a doctrine of this kind.
He adopted the more complete formulation of the concept of comity (at p. 1096)
developed by the US Supreme Court in Hilton v. Guyot, 159 US 113 (1895), at p. 164:
… 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 conven-
ience, and to the rights of its own citizens or of other persons who are under the protection
of its laws.
[27] Comity is a balancing exercise. The relevant considerations are respect for a
nation’s acts, international duty, convenience and protection of a nation’s citizens. Where
equitable orders are concerned, courts must take care not to emphasize the factor of
respect for a nation’s acts to the point of imbalance. An equitable order triggers consider-
ations of both convenience for the enforcing state and protection of its judicial system. I
mention these two considerations because they will be of particular relevance in the
present case.
[28] Under the traditional rule, once the jurisdiction of the enforcing court is estab-
lished, the petitioner must show that he or she meets the conditions for having the
judgment recognized and enforced. In the case of an equitable order, it is at this stage that
considerations specific to the particular nature of such orders should be contemplated. If
the particular concerns raised by equitable orders are considered by the judge at the stage
of determining whether the order is suitable for enforcement, they will not ordinarily
need to be raised again at the defence stage. The traditional defences relating to the merits
or to procedure, which are summarized in Beals, should not be different for equitable
orders than for common law judgments. However, there might be other considerations,
such as laches, that would make it inequitable to enforce a foreign judgment. Such con-
siderations should not generally entail revisiting the merits of the case.
[29] The present case does not require the consideration of defences particular to the
nature of equitable orders. Thus, I do not have to expand on Major J’s dictum in Beals that
the evolution of private international law may require the creation of new defences
(para. 42). The existing defences do not need to be broadened for the purposes of the case
at bar. Similarly, the finality requirement, which is indispensable, although more complex
in the context of an equitable order than in that of a common law order, could be the
object of further commentary. However, these topics need not be fully addressed in the
present case. Revisiting the defences and defining the finality requirement in the context
of equitable orders are better left for another day.
[30] In contemplating considerations specific to the recognition and enforcement of
equitable orders, courts can draw the relevant criteria from other foreign judicial assist-
ance mechanisms based on comity. Forum non conveniens and letters rogatory are mech-
anisms that, like the enforcement of foreign judgments, rely on comity. For these
mechanisms, as for the enforcement of equitable orders, the balancing exercise of comity
requires a careful review of the relief ordered by the foreign court. This review ensures
that the Canadian court does not extend judicial assistance if the Canadian justice system
would be used in a manner not available in strictly domestic litigation. It could be tempt-
ing to use form over substance as the distinctive criterion. However, the distinction
between form and substance can sometimes be elusive or even misleading. In considering
the order it is asked to enforce, the domestic court should instead scrutinize the impact
of the order. Relevant considerations may thus include the criteria that guide Canadian
courts in crafting domestic orders, such as: Are the terms of the order clear and specific
enough to ensure that the defendant will know what is expected from him or her? Is the
order limited in its scope and did the originating court retain the power to issue further
orders? Is the enforcement the least burdensome remedy for the Canadian justice system?
Is the Canadian litigant exposed to unforeseen obligations? Are any third parties affected
by the order? Will the use of judicial resources be consistent with what would be allowed
for domestic litigants?
[31] The evolution of the law of enforcement does not require me, at this point, to
develop exhaustively the criteria a court should take into account. As cases come up,
appropriate distinctions can be drawn. For present purposes, it is sufficient to underscore
the need to incorporate the very flexibility that infuses equity. However, the conditions
for recognition and enforcement can be expressed generally as follows: the judgment must
have been rendered by a court of competent jurisdiction and must be final, and it must
be of a nature that the principle of comity requires the domestic court to enforce. Comity
does not require receiving courts to extend greater judicial assistance to foreign litigants
than it does to its own litigants, and the discretion that underlies equitable orders can be
exercised by Canadian courts when deciding whether or not to enforce one.
VI. Application to the Case at Bar

A. Preliminary Comments
[32] I reviewed the facts at the beginning of these reasons and need not expand on
them save to mention the peculiar circumstances in which the case proceeded in this
Court. Elta’s factum was due on September 7, 2005. On October 17, 2005, Elta’s attorney
filed a notice of withdrawal and on October 26, Mr. Frank Lin, who signed the 1998 dec-
laration for Elta, informed the Registrar that the company’s “financial circumstances” did
not permit it to incur further legal fees. He confirmed the information by fax on a sheet
of paper bearing no letterhead. The hearing proceeded ex parte, a circumstance that could
not have been foreseen when leave was granted.
[33] Since equity is about ethics and the prevention of unconscionable conduct, it
may be tempting to spring into action to remedy conduct by Elta that looks like blatant
defiance of the law and the judicial system. However, care must be taken to ensure that
the law and the justice system are not harmed by engaging them too quickly in a manner
that accommodates only one aspect of comity. Three issues are relevant to determining
whether the orders rendered in this case meet the conditions for recognition and enforce-
ment. The first, raised by Elta, relates to the quasi-criminal nature of a contempt order,
the second to the burden on the judicial system and the third to the extraterritorial nature
of the orders. In addition, I feel bound to say a few words concerning the public policy
defence. While it might have been possible to resolve some of the issues had Elta appeared
before the Court, its absence, and the reasons given for its absence, reinforce my conclu-
sion that the circumstances do not lend themselves well to the recognition and enforce-
ment of the orders.
B. Quasi-Criminal Nature of the Contempt Order

[34] It is well established that Canadian courts will not enforce a penal order, either
directly or indirectly (Castel and Walker, at para. 8.3). This point is pertinent only to the
recognition and enforcement of the contempt order. The Superior Court judge reasoned
that the contempt order was restitutionary in nature and engaged a dispute between
private parties (para. 17). This narrow view of contempt of court conflicts with Matia J’s
finding that, “[b]ased upon these violations, Elta Golf is in contempt of this Court” (AR,
at p. 102), and with this Court’s finding in Vidéotron Ltée v. Industries Microlec Produits
Électroniques Inc., [1992] 2 SCR 1065:
The penalty for contempt of court, even when it is used to enforce a purely private order, still
involves an element of “public law,” in a sense, because respect for the role and authority of
the courts, one of the foundations of the rule of law, is always at issue. [p. 1075]
In Vidéotron, the Court opted for a unified approach to the nature of the contempt of
court order, thus setting aside the distinction between the civil and criminal aspects that
prevails in the United States: Gompers v. Bucks Stove & Range Co., 221 US 418 (1911), at
p. 441.
[35] In Canadian law, a contempt order is first and foremost a declaration that a party
has acted in defiance of a court order. Consequently, a motion for contempt of court
cannot be reduced to a way to put pressure on a defaulting debtor or a means for an
aggrieved party to seek indemnification. The gravity of a contempt order is underscored
by the criminal law protections afforded to the person against whom such an order is
sought. Not only is that person not compellable (Vidéotron, at p. 1078) but he or she is
not competent to act as a witness for the prosecution: Canada Evidence Act, RSC 1985,
c. C-5, s. 4; P.-A.P. v. A.F., [1996] RDJ 419 (CA). The significance of a contempt order is
also evident from the sanction faced by the offender. In Canada, an individual in contempt
of court can be committed to jail (see Ontario Rules of Civil Procedure, RRO 1990, Reg.
194, r. 60.11) or may face the imposition of any other sanction available for a criminal
offence, such as a fine or community service: Westfair Foods Ltd. v. Naherny (1990), 63
Man. R (2d) 238 (CA). Thus, both the process used to issue a declaration of contempt and
the sanction bear the imprint of criminal law.
[36] The “public law” element of a declaration of contempt and the opprobrium
attached to it eclipse the impact of a simple restitutionary award. As a matter of principle,
the quasi-criminal nature of the contempt order precludes the enforcement of such orders
in Canada.
[37] The Superior Court judge did not acknowledge the differences between the Can-
adian and American views on contempt. She ignored the declaration of contempt,
expunged the duplicative parts from the contempt order and declared only the new
injunctive relief to be recognizable and enforceable. I am not satisfied that it was appropri-
ate to reconfigure the order in this way.
[38] The reconfiguration led the court to attribute to the contempt order a nature
different from the usual nature of such orders in Canada. To sidestep the difficulty by
severing the order hardly addresses the argument based on the quasi-criminal nature of
the order and is a course to be avoided. Severance requires the receiving court to consider
the merits of the order and risks affecting its substance. Even if severance does not distort
the purpose of the order, it tests the limits of the enforcing court’s familiarity with the
foreign law, a topic discussed below.
[39] Because of their criminal component, contempt orders should not be enforceable
in Canada. I note, on this issue, that according to K. MacDonald, in “A New Approach to
Enforcement of Foreign Non-Monetary Judgments” (2006), 31 Adv. Q 44, at p. 56, citing
the Restatement of the Law (Third): The Foreign Relations Law of the United States (1987),
Part IV, ch. 8, § 481, the US courts, while allowing the recognition of judgments granting
injunctions, will not generally enforce such orders. According to this view, neither the
consent decree nor the reconfigured contempt order would be enforced in the US.
C. Integrity of the Justice System

[40] In choosing a remedy, a court of equity must consider whether the remedy is
appropriate. Such is the case when deciding whether to issue an injunction. Judicial econ-
omy is one of the many considerations the court must evaluate. In private international
law, this concern is addressed in the principle of comity. As mentioned above, comity
concerns not only respect for a foreign nation’s acts, international duty and convenience,
but also the protection of a nation’s citizens and domestic values.
[41] In Amchem Products Inc. v. British Columbia (Workers’ Compensation Board),

[1993] 1 SCR 897, the Court recognized that prejudice to a party is relevant to the choice
of forum. Similarly, if a plaintiff has a choice between courses of action and one of these
is less burdensome for the receiving court, he or she can rightly be asked to take the less
burdensome one.
[42] On the issue of the use of judicial resources, the Court of Appeal stated that the
denial of recognition and enforcement did not leave Pro Swing without a remedy. It in
fact mentioned two other possible courses of action for Pro Swing to take: a separate
action and letters rogatory. The first would be burdensome for Pro Swing and would not
give full faith and credit to the Ohio judgment. However, letters rogatory should have
been considered.
[43] Letters rogatory are used to obtain evidence in the form of testimony, statements
or documents for use in proceedings before foreign courts: Canada Evidence Act, s. 46,
and Ontario Evidence Act, RSO 1990, c. E.23, s. 60. This form of judicial assistance, like
the recognition and enforcement of foreign orders and forum non conveniens, rests on
the principle of comity: District Court of the United States, Middle District of Florida v.
Royal American Shows, Inc., [1982] 1 SCR 414.
[44] Letters rogatory are allowed by virtue of s. 46 of the Canada Evidence Act and
applicable provincial legislation. One of the requirements is that a proceeding be pending
before the Ohio court: Zingre v. The Queen, [1981] 2 SCR 392; Re International Association
of Machinists & Aerospace Workers and Qantas Airways Ltd. (1983), 149 DLR (3d) 38
(Ont. HCJ). In this case, the proceeding may be considered to be pending before the Ohio
court because the very reason the order is rendered is to enable Pro Swing to return before
Matia J to determine the damage award.
[45] Subject to their being duly obtained, letters rogatory may be viewed as a useful
means to obtain the evidence required by Matia J to finalize the damage award in the
contempt proceeding in Ohio. This course of action would have the benefit of avoiding
duplication of the enforcement proceedings in Ontario with those in Ohio. Moreover,
letters rogatory are truly incidental to the proceedings, which is how the Superior Court
judge characterized the parts of the contempt order she agreed to recognize and enforce.
[46] In addition to considering alternate means to reach a particular outcome, a court
may consider whether the matter merits the involvement of the Canadian court. The
receiving court’s willingness to extend its judicial resources may depend on the import-
ance of the case compared to the damage the plaintiff would suffer if his or her request
were refused. In the present case, given the facts that the consent agreement was con-
cluded on the basis of only three golf clubs or golf club heads, that only two golf club
heads were purchased in the investigation and that Elta chose not to appear owing to
“financial circumstances,” there is a concern that the judicial machinery could be deployed
only to find that Pro Swing’s debtor is insolvent.
[47] True, it would encourage deceit, fraud and similar misconduct if courts were
systematically to require litigants to demonstrate the damage they would suffer should
enforcement be denied. Nevertheless, when the circumstances give rise to legitimate
concerns about the use of judicial resources, the litigant bears the burden of reassuring
the court that the matter is worth going forward with.
[48] The appropriateness of using local judicial resources is a factor included in the
convenience aspect of the principle of comity. It does not allow judges to determine
whether the order is correct, but provides minimal protection for our justice system.
D. Familiarity with the Foreign Law

[49] I alluded earlier to the problem of interpreting a foreign order in light of Canad-
ian law, which might be different from the foreign law. When faced with the need to
interpret the law, the receiving court must ensure that no conflict results from the nature
attributed to the order after the enforcement judgment is rendered.
[50] In the case of a contempt order, because of the different approaches in the US and
in Canada, the conflict is real. In the US, according to Gompers, a civil contempt order is
remedial only and is issued for the benefit of the complainant. However, if the same con-
tempt order is recognized and enforced in Canadian law, it becomes a Canadian contempt
order that has a quasi-criminal nature and exposes the offender to imprisonment.
[51] Differences in laws might trigger different obligations. It is important that the
receiving court does not have to venture into uncertain territory to interpret orders whose
terms are based on rules with which the court is not familiar. Also, courts should not
expose litigants to consequences to which they would not be exposed under the foreign
law. Aware of their limitations, receiving courts should use their discretion to refrain from
enforcing orders that subject Canadian litigants to unforeseen obligations.
E. Extraterritoriality
[52] The Superior Court was of the view that the wording of the consent decree made
it clear that extraterritoriality was intended by the parties. However, the judge did not
comment on the contempt order. The Court of Appeal found both orders unclear as to
the scope of their extraterritorial application. The issue is important both because the
transactions were made over the Internet and because the trademark was protected only
in the US.
[53] Extraterritoriality is a long-recognized concern not only because a law normally
applies solely in the jurisdiction where it is enacted, but also because courts lack familiarity
with foreign justice systems. Courts will tend to find solutions to limit spheres of conflict.
In Hunt, a Quebec statute was found not to prevent the enforcement of a BC order. In
Unifund, an Ontario statute was held not to apply to a BC corporation. In Aetna Financial
Services Ltd. v. Feigelman, [1985] 1 SCR 2, the Court was of the view that a Mareva injunc-
tion should have been refused because the assets in question were not at risk when moved
to Quebec.
[54] This Court commented on the particular nature of an Internet transaction in
Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet
Providers, [2004] 2 SCR 427, 2004 SCC 45. It stated that “a telecommunication from a
foreign state to Canada, or a telecommunication from Canada to a foreign state, ‘is both
here and there’ ” (para. 59).
[55] Truly, when Mr. Frank Lin signed the declaration stating that he had three golf
clubs or golf club heads in inventory and agreed to surrender them to Pro Swing’s counsel,
he must have understood that an eventual incorporation of the settlement agreement into
a consent decree could bind him to deliver goods located in Ontario.
[56] However, the same extraterritorial application cannot be said of the orders
contained in the consent decree and the contempt order that enjoined him from purchas-
ing and selling the material. Since the trademark protection is the one recognized in the
US and the Internet transaction took place in both Ohio and Ontario, the transaction can
be said to have occurred in Ohio. The Internet component does not transform the US
trademark protection into a worldwide one. Whether Elta could, by consent, have agreed
to such an extension is a matter of interpretation. The Superior Court found the terms
clear, but the Court of Appeal found them doubtful. In my view, in the absence of explicit
terms making the settlement agreement a worldwide undertaking, the consent decree
cannot be said to clearly apply worldwide.
[57] In addition to prohibiting the purchase and sale of designated material, the
contempt order enjoins Elta “to make an accounting to Pro Swing of all golf club and/or
golf club components it has sold which bear the TRIDENT or RIDENT marks, or any
other confusingly similar designation, since the entry of the Consent Decree … [and to]
include a sworn statement of account of all gross and net income derived from sales of
TRIDENT and RIDENT golf clubs or golf club components … .” It imposes an obligation
to account for all sales, even sales that may fall outside the scope of Pro Swing’s trademark
protection. To interpret the contempt order as applying outside the US would offend the
principle of territoriality.
[58] Extraterritoriality and comity cannot serve as a substitute for a lack of worldwide
trademark protection. The Internet poses new challenges to trademark holders, but equit-
able jurisdiction cannot solve all their problems. In the future, when considering cases
that are likely to result in proceedings in a foreign jurisdiction, judges will no doubt be
alerted to the need to be clear as regards territoriality. Until now, this was not an issue
because judgments enforcing trademark rights through injunctive relief were, by nature,
not exportable.
F. Public Policy Defence

[59] Elta did not raise a public policy defence. However, public policy and respect for
the rule of law go hand in hand. Courts are the guardians of Canadian constitutional
values. They are sometimes bound to raise, proprio motu, issues relating to public policy.
An obvious example of values a court could raise proprio motu can be found in United
States v. Burns, [2001] 1 SCR 283, 2001 SCC 7. In that case, the Court took Canada’s
international commitments and constitutional values into consideration in deciding to
confirm a direction to the Minister to make a surrender subject to assurances that the
death penalty would not be imposed. Public policy and constitutional requirements may
also be at stake when the rights of unrepresented third parties are potentially affected by
an order. In the case at bar, over and above the concerns articulated by the Court of Appeal
and the defences raised by Elta, there are, in my view, concerns with respect to parts of
the contempt order inasmuch as it requires the disclosure of personal information that
may prima facie be protected from disclosure.
[60] The quasi-constitutional nature of the protection of personal information has
been recognized by the Court on numerous occasions: H.J. Heinz Co. of Canada Ltd. v.
Canada (Attorney General), [2006] 1 SCR 441, 2006 SCC 13, at para. 28; Lavigne v. Can-
ada (Office of the Commissioner of Official Languages), [2002] 2 SCR 773, 2002 SCC 53,
at para. 24; Dagg v. Canada (Minister of Finance), [1997] 2 SCR 403, at paras. 65-66. In
Burns, the Court required assurances that our constitutional protections would be extended
to individuals found on Canadian soil; in the same way, courts should be mindful of the
values that merit constitutional or quasi-constitutional protection. In light of the quasi-
constitutional status attributed to privacy, the order enjoining Elta to provide all credit
card receipts, accounts receivable, contracts, etc. could be problematic. The range of
documents is wide and most of them contain personal information that might be protected.
[61] Because no submissions were made on this point, we do not know if there is any
information or evidence relevant to applicable exceptions. The documents contain per-
sonal information that may prima facie be protected for the benefit not of the person from
whom disclosure is sought, but of the persons to whom the information belongs. This is
but an example of public policy considerations that judges must consider before agreeing
to recognize and enforce a judgment on a foreign country’s behalf.
G. Summary
[62] In summary, the orders are problematic from many points of view. The contempt
order is quasi-criminal in nature and the intended territorial scope of the injunctive relief
in the consent order is uncertain. Moreover, it is unclear that recognition and enforcement
of the judgment is the appropriate tool amongst the various judicial assistance mechan-
isms or that the matter is an appropriate one for lending judicial assistance in the form
requested. Additional concerns relating to the potential violation of privacy rights should
also be addressed.
[63] The list of problems is long, too long to use the courts’ equitable jurisdiction to
accommodate Pro Swing. In Barrick Gold Corp. v. Lopehandia (2004), 71 OR (3d) 416
(CA), Blair JA stated that the courts had the choice of throwing up their hands in despair
or protecting the public against impugned conduct. In the case at bar, the choice is not
as clear, as this is an instance where a court’s refusal to enforce the orders cannot be
equated with an abdication of its duties. To refuse to enforce the orders is an appropriate
exercise of equitable discretion and amounts to allowing the Ohio court to continue the
proceedings with the judicial assistance of the Ontario courts, but to a lesser extent than
has been requested.
VII. Conclusion
[64] Private international law is developing in response to modern realities. The real
and substantial connection test and the enforcement of equitable relief granted in foreign
countries are but two examples of its evolution. The Internet puts additional pressure on
the courts to reach out to the same extent as the Web. At the same time, courts must be
cautious to preserve their nation’s values and protect its people. The time is ripe to change
the common law rule against the enforcement of foreign non-monetary judgments, but,
owing to problems with the orders the appellant seeks to have enforced, the Court cannot
accede to its request.
[65] For these reasons, I would dismiss the appeal.
[McLachlin CJ, Bastarache and Charron JJ concurring, disagreed with the majority with
respect to the eligibility of the order in question for recognition and enforcement.
McLachlin CJ made the following comments on the principles governing recognition and
enforcement of non-pecuniary orders.]
McLACHLIN CJ:
[95] Finality demands that a foreign order establish an obligation that is complete and
defined. The obligation need not be final in the sense of being the last possible step in the
litigation process. Even obligations in debt may not be the last step; orders for interest
and costs may often follow. But it must be final in the sense of being fixed and defined.
The enforcing court cannot be asked to add or subtract from the obligation. The order
must be complete and not in need of future elaboration.
[96] Clarity, which is closely related to finality, requires that an order be sufficiently
unambiguous to be enforced. Just as the enforcing court cannot be asked to supplement
the order, so it cannot be asked to clarify ambiguous terms in the order. The obligation
to be enforced must clearly establish what is required of the judicial apparatus in the
enforcing jurisdiction.
[97] Clarity means that someone unfamiliar with the case must be able to ascertain
what is required to meet the terms of the order. Sometimes the judge who made the order
is the best person to determine whether its terms have been fulfilled. For example, Rule
60.11 of the Ontario Rules of Civil Procedure, RRO 1990, Reg. 194, provides that a con-
tempt order to enforce an order requiring a party to do an act or refrain from doing an
act “may be obtained only on motion to a judge in the proceeding in which the order to
be enforced was made.” This reflects the view that before finding a person in contempt—a
serious imputation—the judge who made the order should assess the infringing conduct
to be sure that it merits the sanction. This point is taken up by J.-G. Castel and J. Walker
in Canadian Conflict of Laws (6th ed. (loose-leaf)), vol. 1, who posit that “[i]t stands to
reason that the court that makes an order requiring a party to perform a contract or to
deliver goods may be in a unique position to know whether the terms of the order have
been met” (p. 14-21). A court asked to enforce a foreign judgment of this type would have
to assess whether questions may arise as to what constitutes compliance with the obliga-
tion. If there is a real risk that such questions may arise, enforcement of the judgment
may be inappropriate.
[98] Having discussed the requirements of finality and clarity and the rationale that
supports them, I turn to how they may be assessed. A court should not refuse to enforce
a foreign non-monetary judgment merely because there is a theoretical possibility that
questions may arise in the course of enforcement. The hypothetical possibility that
enforcement may require active supervision is not enough to permit a court to decline
enforcement. A decision not to enforce on the grounds of lack of finality or clarity would
have to be based on concerns apparent on the face of the order or arising from the factual
or legal context. As elsewhere in the law, mere speculation would not suffice.
[99] Deschamps J suggests that the equitable nature of injunctions and other non-
monetary judgments may require Canadian courts to revisit the meaning of the finality
requirement and recognize new defences. She highlights the potential costs of supervising
equitable orders. I agree that judicial economy is a legitimate consideration (see para. 93).
But judicial economy should not be overemphasized. In recent years, courts have taken
an active approach, imposing orders requiring supervision when necessary. Doucet-
Boudreau v. Nova Scotia (Minister of Education), [2003] 3 SCR 3, 2003 SCC 62, is the
best-known example, but search orders and freezing orders are part of the same general
trend (see generally R.J. Sharpe, Injunctions and Specific Performance (2nd ed. (loose-
leaf)), at paras. 1.260-1.490).
[100] Orders with penal consequences would constitute a third type of restriction on
the enforcement of non-money judgments. It is generally accepted that Canadian courts
will not enforce a foreign penal law or judgment, either directly or indirectly. As Castel
and Walker explain:
A penal law is a law that imposes a punishment for a breach of a duty to the state—as opposed
to a remedial law, which secures compensation for a breach of a duty owed to a private per-
son. … Liability that is restitutionary in nature and that is not imposed with a view to punish-
ment of the party responsible is not regarded as penal in nature. [Footnotes omitted; p. 8-2.]
It is for each state to impose its own punishments, penalties and taxes, and other states
are not obliged to help them. When we move to penal orders, we move out of the realm
of private international law and into public law. As a result, Canadian courts will not
entertain an action for the enforcement of a foreign penal, revenue, or other public law,
nor will they enforce a foreign judgment ordering the payment of taxes or penalties that
gives effect to the sovereign will of a foreign power.
[101] For the purpose of this case, the three classes of restrictions on enforcement of
non-money judgments discussed above should suffice. It may be that as the law develops
other types of problems will be recognized. However, that can be left for future cases.
A pecuniary judgment creates a cause of action classified as a debt action. What is the legal
nature of the obligation created by a non-pecuniary order? What is the appropriate limita-
tion period for commencing an action for its recognition and enforcement?
In determining whether the foreign court had jurisdiction in the international sense, is it
sufficient if there was a real and substantial connection between the action and the foreign
jurisdiction or must the defendant have been present or submitted? Does Impulsora Turistica
de Occidente SA de CV v Transat Tours Canada Inc, 2007 SCC 20, [2007] 1 SCR 867, 281 DLR (4th)
385 provide the answer? For a case that recognized and enforced an injunction, see United
States of America v Yemec, 2010 ONCA 414.
C. Class Action Judgments

Class actions usually produce a settlement, but because that settlement must be judicially
approved, it is treated like a judgment. It is also usually the defendant in the class action who
wants the settlement to be recognized everywhere. The defendant desires recognition for
purposes of res judicata, prevention of further actions. Class action statutes purport to bind
everyone in the class and to bar further actions. Opt-out class action statutes pose a particu-
lar problem—members of the class may have been unaware of the litigation and of their
own membership in the class.
A majority of provinces with class proceedings statutes have the opt-out model. Apart
from the recognition and enforcement conflicts issues discussed in the next case and follow-
ing note, there may be issues yet to be resolved concerning the constitutional validity of any
legislation purporting to bind non-resident involuntary plaintiffs.
Currie v McDonald’s Restaurants of Canada Ltd

(2005), 74 OR (3d) 321, 250 DLR (4th) 224 (CA)
SHARPE JA (for the court):

[1] The plaintiff Greg Currie brings a proposed class action alleging wrongdoing in
relation to promotional games offered to customers of McDonald’s Restaurants of Canada
Ltd. (“McDonald’s Canada”). He is met with an Illinois judgment approving the settlement
of a class action brought on behalf of an American and international class of McDonald’s
customers, including the customers of McDonald’s Canada (the “Boland judgment”). The
Illinois court directed that notice of the class action to Canadian class members be given
by means of an advertisement in Maclean’s magazine. Currie did not participate in the
Illinois proceedings but Preston Parsons, the named plaintiff in another Ontario class
proceeding, represented by the same law firm and purporting to represent the same class,
appeared in the Illinois court to challenge the settlement.
[2] The central issue on this appeal is whether the Boland judgment is binding so as
to preclude Currie’s proposed class action in Ontario.
Facts
[3] I adopt the following summary of the essential facts from the reasons of the motion
judge.
1. In the period between January 1, 1995 and December 31, 2001—and earlier—
McDonald’s sponsored numerous promotional games, or contests, of chance—or
chance and skill—at its restaurants in North America. Some, but not all, of these
were made available in the Canadian restaurants. Prizes of different kinds and
amounts were to be awarded. Participation in the games was, to a large extent, tied
to the purchase of food at the restaurants. Simon Marketing Inc.—a corporation
based in California that provided businesses with marketing services involving the
provision and operation of promotional games—was retained for that purpose by
McDonald’s.
2. On August 21, 2001, Jerome Jacobson—a senior employee of Simon Marketing—
and a number of other individuals were indicted for embezzling prizes allocated
to McDonald’s games.
3. The proceedings in Boland were commenced on the following day. The class-action
complaint alleged that Jacobson had directed prizes to specific individuals and
claimed damages against McDonald’s and Simon Marketing Inc. for consumer
fraud and unjust enrichment. The plaintiffs sued on behalf of themselves and “all
customers of McDonald’s who paid money for McDonald’s food products in order
to receive a subject contest game piece for subject contest promotions between
1995 and the present.”
4. Settlement discussions in the Boland action were conducted from October 2001
and culminated in a settlement agreement between the plaintiffs and McDonald’s
on April 19, 2002.
5. The settlement agreement provided that the parties would apply to the Circuit
Court of Cook County, Illinois for preliminary certification of the proceedings as
a class action and for preliminary approval of the settlement as “fair, reasonable
and adequate to the class and to members of the public.” Further orders were to
be requested to approve the terms of a notice to class members—and the manner
in which it was to be disseminated—to provide class members with an opportunity
to opt out of the class and the settlement by a date to be specified and to make the
settlement—and the releases to be provided to McDonald’s and its subsidiaries—
binding on those who did not do so. The terms of the releases were broad. They
covered all claims—referred to in the settlement agreement as “Released Claims”—
relating to McDonald’s promotional games under common law or statute, and
specifically for breach of the consumer protection laws of any jurisdiction, contract,
unjust enrichment, fraud, negligent misrepresentation, breach of fiduciary duty,
strict liability and unfair or deceptive trade practices. The Released Claims would
have covered each of the claims subsequently pleaded in the Parsons and Currie
actions even though not all of the material facts on which they were based had
been pleaded in Boland. The original Complaint was amended to extend the class
to persons who had participated, or attempted to participate, in promotional games
sponsored by McDonald’s since 1979.
6. On May 8, 2002, the application for the above orders was heard by Judge Stephen
Schiller in Chicago and, on June 6, 2002, he granted the preliminary relief
requested with some modifications to the proposed notice to class members.
August 28, 2002 was designated as the final date for members to opt out and a final
fairness hearing was to be held on September 17, 2002.
7. The manner in which notice was to be given to customers in Canada was specifi-
cally addressed at the preliminary hearing on May 8, 2002 and the order of the
court provided for the approved form of notice to be published in each of three
French-language newspapers in Quebec on July 15, 2002 and in Maclean’s maga-
zine on July 15 and July 22 as well as in two US publications that had circulation
in Canada.
8. Jacobson had pleaded guilty to the criminal charges and, at the trial of his alleged
conspirators, he gave evidence on August 19, 2002 that McDonald’s had instructed
Simon Marketing Inc. that the “random” selection of winners of “high value” prizes
was to be manipulated to ensure that no such prizes would be awarded to contes-
tants in Canada. No such allegation had been—or was ever—made in the Boland
action.
9. After a US attorney had notified the firm of Paliare Roland in Toronto, the firm
placed information about the US proceedings on its website and was subsequently
contacted by the plaintiff, Preston Parsons. The Parsons action was commenced
by statement of claim on September 13, 2002. As I have indicated, the causes of
action that were pleaded were based on allegations that reflected those made by
Jacobson, to which I have just referred, as well as those in the Complaint filed in
Boland.
10. On September 16, 2002, a group of Canadians, including Mr. Parsons, moved for
leave to intervene in the Boland proceedings to object to the settlement of that
action. The documents filed in the court in Illinois named Paliare Roland as solici-
tors for Mr. Parsons although members of the firm did not—and could not—
represent him in proceedings in that jurisdiction.
11. At the Final Fairness Hearing on September 17, 2002, submissions were made by
a US attorney on behalf of the Canadian objectors. The hearing was adjourned to
October 10, 2002 to permit written submissions. It continued on that date after
written submissions of the objectors and responding submissions on behalf of the
plaintiffs in Boland had been filed.
12. The Currie action was commenced on October 28, 2002 with Paliare Roland as
solicitors of record.
13. On January 3, 2003, Judge Schiller released his decision dismissing the objections
of the Canadian objectors. The terms of the settlement were given final approval
and the certification order was made final. On April 8, 2003, the formal order of
the court was entered containing, among other things the release of McDonald’s
and its subsidiaries by the members of the class and a declaration that all members
of the class who had not opted out were bound by the terms of the order.
14. An appeal by Mr. Parsons from the decision of Schiller J was dismissed on July 31,
2003 on the ground that the order of the learned judge was not then a final order
as the question of costs had not been dealt with.
[The motions judge found that Parsons had attorned and was bound by the Boland deci-
sion but he refused to stay or dismiss the Currie action. McDonald’s appealed.]
[8] The following issues arise on this appeal.

1. Should the Ontario courts recognize and enforce the Boland judgment against
Currie and the non-attorning Canadian class members he seeks to represent?
2. Did the notice to the Canadian class members satisfy the requirements of natural
justice?
3. Is Currie precluded by the doctrines of res judicata or abuse of process from
prosecuting his claim in Ontario?
Analysis
1. Should the Ontario courts recognize and enforce the Boland judgment against
Currie and the non-attorning Canadian class members he seeks to represent?
[9] It is common ground on this appeal that if the Boland judgment should be recog-
nized in Ontario under the applicable conflict of laws principles, Currie and the members
of the class he seeks to represent are bound by it and that Currie’s proposed class action
would be precluded. It is also common ground that the issue of whether the Ontario
courts should recognize and enforce the Illinois judgment approving the settlement turns
upon the application of the principles enunciated by the Supreme Court of Canada in
Morguard Investments Ltd. v. De Savoye, [1990] 3 SCR 1077 and Beals v. Saldanha, [2003]
3 SCR 416.
[10] In Morguard, the Supreme Court of Canada identified the twin principles of
“order and fairness” and “real and substantial connection” for the assessment of the
propriety of conflict of laws jurisdiction. As La Forest J explained at p. 1102, “order and
justice militate in favour of the security of transactions,” an interest fostered in the modern
world of increased trans-border activity by freer recognition and enforcement of
judgments from other jurisdictions. But embedded in the principles of order and fairness
is also the notion of jurisdictional restraint. The interest of security of transactions gained
by the party seeking enforcement must be balanced with the need for fairness to the party
against whom enforcement is sought. As La Forest J put it at 1103: “it hardly accords with
principles of order and fairness to permit a person to sue another in any jurisdiction,
without regard to the contacts that jurisdiction may have to the defendant or the subject-
matter of the suit … Thus, fairness to the [party against whom enforcement is sought]
requires that the judgment be issued by a court acting through fair process and with
properly restrained jurisdiction.”
[11] The “real and substantial connection” test serves to control the assertion of juris-
diction. It is described variously in Morguard, at pp. 1104-9, as a connection “between
the subject-matter of the action and the territory where the action is brought,” “between
the jurisdiction and the wrongdoing,” “between the damages suffered and the jurisdiction,”
“between the defendant and the forum province,” “with the transaction or the parties,”
and “with the action.” The real and substantial connection test is a flexible one, “a term
not yet fully defined” (Tolofson v. Jensen, [1994] 3 SCR 1022 at 1049), and there is no strict
or rigid test to be applied. (Hunt v. T&N plc, [1993] 4 SCR 289 at 325).
[12] Morguard dealt with the recognition and enforcement of inter-provincial judg-
ments. In Beals, those same principles were adapted and applied to international judg-
ments. Writing for the majority, at para. 37, Major J described real and substantial
connection as “the overriding factor in the determination of jurisdiction.” …
[13] The novel point raised on this appeal is the application of the real and substantial
connection test and the principles of order and fairness to unnamed, non-resident plain-
tiffs in international class actions.
[14] Ontario residents frequently engage in cross-border activities that may become
the subject of class action litigation in Ontario, in another province or in a foreign juris-
diction. Several Ontario trial courts have authorized national and international classes: … .
[citations omitted.] Legislation in several provinces specifically contemplates the inclusion
of non-resident class members: … . [Citations omitted.]
[15] There are strong policy reasons favouring the fair and efficient resolution of
interprovincial and international class action litigation: … . [Citations omitted.] Conflict
of law rules should recognize, in appropriate cases, the importance of having claims finally
resolved in one jurisdiction. In some cases, Ontario courts will render judgments affect-
ing the rights of non-residents and in other cases, Ontario residents will be affected by
class action proceedings elsewhere. Ontario expects its judgments to be recognized and
enforced, provided its courts assert jurisdiction in a proper manner and comity requires
that, in appropriate cases, Ontario law should give effect to foreign class action judgments.
[16] Recognition and enforcement rules should take into account certain unique
features of class action proceedings. In this case, we must consider the situation of the
unnamed, non-resident class plaintiff. In a traditional non-class action suit, there is no
question as to the jurisdiction of the foreign court to bind the plaintiff. As the party initiat-
ing proceedings, the plaintiff will have invoked the jurisdiction of the foreign court and
thereby will have attorned to the foreign court’s jurisdiction. The issue relating to recogni-
tion and enforcement that typically arises is whether the foreign judgment can be enforced
against the defendant.
[17] Here, the tables are turned. It is the defendant who is seeking to enforce the
judgment against the unnamed, non-resident plaintiffs. The settling defendants, plainly
bound by the judgment, seek to enforce it as widely and as broadly as possible in order
to preclude further litigation against them. Henry Paul Monaghan, “Antisuit Injunctions
and Preclusion Against Absent Nonresident Class Members” (1998) 98 Columbia Law
Review 1148 at 1155-56, warns of the need to guard against potential abuses by settling
class action defendants who “welcome class action suits as a vehicle for limiting overall
liability, sometimes at bargain-basement prices.” Before enforcing a foreign class action
judgment against Ontario residents, we should ensure that the foreign court had a proper
basis for the assertion of jurisdiction and that the interests of Ontario residents were
adequately protected.
[18] To determine whether the assumption of jurisdiction by the foreign court satisfies
the real and substantial connection test and the principles of order and fairness, it is
necessary to consider the situation from the perspective of the party against whom
enforcement is sought. In many cases, the actions of the non-resident class member will
assist in determining jurisdiction. Take, for example, the case of an Ontario resident who
orders goods from a foreign mail order merchant or who buys securities on a foreign
stock exchange. The Ontario resident has engaged in a cross-border transaction with a
foreign entity. The cause of action arises at least in part in the foreign jurisdiction. It would
not be unreasonable, from the perspective of the Ontario resident, to expect that legal
claims arising from the transaction could be properly litigated in the foreign jurisdiction.
Nor is it unreasonable, whether from the perspective of the foreign defendant or from
that of the Ontario plaintiff, to expect that class action litigation in the foreign jurisdiction
should dispose finally of the Ontario plaintiff ’s claim.
[19] In this case, however, the unnamed, non-resident class members have done
nothing to invite or invoke Illinois jurisdiction. The respondents offer this analogy: would
Ontario law recognize the jurisdiction of Illinois to entertain a suit by the appellants for
a declaration of non-liability against the respondents? That is the legal and practical effect
of the Illinois judgment so far as they are concerned. If a judgment of non-liability by the
foreign court would be recognized and enforced in Ontario, so too should the courts of
Ontario recognize and enforce the foreign class action settlement. However, if the foreign
non-liability judgment would not be recognized and enforced, an Ontario court should
hesitate to recognize and enforce the foreign class action settlement against the non-
resident plaintiff.
[20] This analogy is of some assistance, but I am not persuaded that a model entirely
based upon the position of the defendant in a traditional two-party lawsuit can adequately
capture the legal dynamics and complexity of the situation of an unnamed plaintiff in
modern cross-border class action litigation. The position of the class action plaintiff is
not the same as that of a typical defendant. Rules for recognition and enforcement of class
action judgments should reflect those differences. The class action plaintiff is not hauled
before a foreign court and required to defend him or herself upon pain of default judg-
ment. As stated by Rehnquist J in the leading American decision, Phillips Petroleum
Company v. Shutts, 472 US 797 at 809 (1985), “[un]like a defendant in a civil suit, a class-
action plaintiff is not required to fend for himself.” Class action regimes typically impose
upon the court a duty to ensure that the interests of the plaintiff class members are ade-
quately represented and protected. This is a factor favouring recognition and enforcement
against unnamed class members: see John C.L. Dixon, “The Res Judicata Effect in England
of a US Class Action Settlement” (1997) 46 ICLQ 134 at 136, 150-51.
[21] On the other hand, I accept the respondent’s basic point that it would be wrong
simply to approach the issue of jurisdiction by asking whether the Illinois court would
have jurisdiction over the respondents at the suit of Canadian plaintiffs. The court must
have regard to the rights and interests of unnamed plaintiffs who did not participate in
the Boland proceedings. The question of jurisdiction should be viewed from the perspec-
tive of the Ontario client of a McDonald’s Canada restaurant, participating in a promo-
tional prize giveaway presented by McDonald’s Canada, who has done nothing to invoke
or submit to the jurisdiction of the Illinois court.
[22] The principal connecting factors linking the cause of action asserted in Currie’s
proposed class action to the state of Illinois are that the alleged wrong occurred in the
United States and Illinois is the site of McDonald’s head office. The alleged wrongful
conduct, manipulating the “random” selection of winners of “high value” prizes to ensure
that no such prizes would be awarded to contestants in Canada, occurred in the United
States. This factor is a “real and substantial connection” in favour of Illinois jurisdiction.
While constitutional arrangements may put interprovincial suits on something of a dif-
ferent plain, as noted by Cumming J in Wilson v. Servier Canada Inc. (2000), [50 OR (3d)
219 (Sup Ct J)], above at 241, Ontario courts have certified national class actions “if there
is a real and substantial connection between the subject-matter of the action and Ontario”
in the expectation that “other jurisdictions on the basis of comity should recognize the
Ontario judgment.”
[23] On the other hand, the principles of “order and fairness” require that careful
attention be paid to the situation of ordinary McDonald’s customers whose rights are at
stake. These non-resident class members would have no reason to expect that any legal
claim they may wish to assert against McDonald’s Canada as result of visiting the restau-
rant in Ontario would be adjudicated in the United States. The consumer transactions
giving rise to the claims took place entirely within Ontario. The consumers are residents
of Canada and the McDonald’s Canada is a corporation that conducts its business in
Canada. Damages from the alleged wrong were suffered in Ontario. The Currie plaintiffs
themselves did nothing that could provide a basis for the assertion of Illinois jurisdiction,
while McDonald’s Canada invited the jurisdiction of the courts of Ontario by carrying
on business here.
[24] The locus of the alleged wrong indicates a real and substantial connection with
Illinois, but recognizing Illinois jurisdiction could be unfair to the ordinary McDonald’s
customer who would have no reason to suspect that his or her rights are at stake in a
foreign lawsuit and who has no link to or nexus with the Boland action.
[25] To address the concern for fairness, it is helpful to consider the adequacy of the
procedural rights afforded the unnamed non-resident class members in the Boland action.
Before concluding that Ontario law should recognize the jurisdiction of the Illinois court
to determine their legal rights, we should be satisfied that the procedures adopted in the
Boland action were sufficiently attentive to the rights and interests of the unnamed non-
resident class members. Respect for procedural rights, including the adequacy of repre-
sentation, the adequacy of notice and the right to opt out, could fortify the connection
with Illinois jurisdiction and alleviate concerns regarding unfairness. Given the substantial
connection between the alleged wrong and Illinois, and given the small stake of each
individual class member, it seems to me that the principles of order and fairness could be
satisfied if the interests of the non-resident class members were adequately represented
and if it were clearly brought home to them that their rights could be affected in the
foreign proceedings if they failed to take appropriate steps to be removed from those
proceedings.
[26] In the circumstances of this case, it is not necessary for me to consider the issue
of adequacy of representation in detail. I note, however, that American commentators
have raised the “race-to-the bottom” concern: see Monaghan, above. A sophisticated
defendant may persuade plaintiffs’ counsel to accept a sharply discounted recovery rate
for non-resident (including Canadian or Ontario) plaintiffs. The foreign representative
plaintiff ’s interests may conflict with those of the Ontario class, or not fully encapsulate
the interests of the Ontario class. Recognition and enforcement rules must be attentive
to these possibilities and retain sufficient flexibility to address concerns of this nature.
[27] On the other hand, provided the interests of non-resident class members were
adequately represented, recognition and enforcement of foreign class proceedings would
seem desirable. Recognition of the judgment would encourage the defendant to extend
the benefits of the settlement to non-residents. Non-resident class members would receive
a benefit without resorting to litigation and the defendant would buy peace from further
litigation.
[28] The right to opt out is an important procedural protection afforded to unnamed
class action plaintiffs. Taking appropriate steps to opt out and remove themselves from
the action allows unnamed class action plaintiffs to preserve legal rights that would other-
wise be determined or compromised in the class proceeding. Although she was not
referring to inter-jurisdictional issues, in Western Canadian Shopping Centres Inc. v.
Dutton, [2001] 2 SCR 534 at para. 49, McLachlin CJC identified the importance of notice
as it relates to the right to opt out: “A judgment is binding on a class member only if the
class member is notified of the suit and given an opportunity to exclude himself or herself
from the proceeding.” The right afforded to plaintiff class members to opt out has been
found to provide some protection to out-of-province claimants who would prefer to liti-
gate their claims elsewhere: Webb v. K-Mart Canada Ltd. (1999), 45 OR (3d) 389 at 404
(SCJ). It is obvious, however, that if the right to opt out is to be meaningful, the unnamed
plaintiff must know about it and that, in turn, implicates the adequacy of the notice
afforded to the unnamed plaintiff.
[29] The respondent submits that recognition should be withheld absent an order
requiring non-resident plaintiffs to opt in: see D.L. Bassett, “US Class Actions Go Global:
Transnational Class Actions and Personal Jurisdiction” (2003) 72 Fordham Law Review
41. In some provinces (Alberta: Class Proceedings Act, SA 2003, c. C-16.5, s. 17(1)(b);
British Columbia: Class Proceedings Act, RSBC 1996, c. 50, s. 16(2); Saskatchewan: The
Class Actions Act, SS 2001, c. C-12.01, s. 18(2); Newfoundland and Labrador Class Actions
Act, SNL 2001, c. C-18.1, s. 17(2)) legislation requires out of province plaintiffs opt in to
class proceedings. There may well be cases where the nature of the rights and interests at
stake would make such a requirement appropriate as a prerequisite to recognition and
enforcement, but I do not accept the suggestion that unnamed plaintiffs should always
be required to opt in as a prerequisite to recognition. In my view, the case at bar does not
fall into the category where an “opt in” order should be required. Here, the interest of each
individual plaintiff is nominal at best. An order requiring members of the plaintiff class
to opt in would, as a practical matter, effectively negate meaningful class action relief.
[30] In my view, provided (a) there is a real and substantial connection linking the
cause of action to the foreign jurisdiction, (b) the rights of non-resident class members
are adequately represented, and (c) non-resident class members are accorded procedural
fairness including adequate notice, it may be appropriate to attach jurisdictional conse-
quences to an unnamed plaintiff ’s failure to opt out. In those circumstances, failure to
opt out may be regarded as a form of passive attornment sufficient to support the jurisdic-
tion of the foreign court. I would add two qualifications: First, as stated by La Forest J in
Hunt v. T&N plc, above at p. 325, “the exact limits of what constitutes a reasonable
assumption of jurisdiction” cannot be rigidly defined and “no test can perhaps ever be
rigidly applied” as “no court has ever been able to anticipate” all possibilities. Second, it
may be easier to justify the assumption of jurisdiction in interprovincial cases than in
international cases: see Muscutt v. Courcelles (2002), 60 OR (3d) 20 at paras. 95-100 (CA).
[31] The motion judge determined that the notice given to the non-resident class
members was inadequate. He observed that traditional conflict of laws doctrine treats
adequacy of notice as an element of natural justice that can be raised as a defence to
enforcement, once the jurisdiction of the foreign court has been established. He did not
find it necessary to decide, on the facts of this case, whether or not the notice issue had
a bearing on jurisdiction. As I have already explained, it is my opinion that the notice
issue does bear upon jurisdiction. I consider the motion judge’s ruling on the adequacy
of notice below and conclude that there is no basis upon which I would interfere with
that ruling. I would apply it to the question of jurisdiction and hold that as the unnamed
plaintiffs were not afforded adequate notice of the Boland proceedings, the Ontario courts
should not recognize and enforce the Boland judgment against Currie and the non-
attorning Canadian class members he seeks to represent.
[32] I would add this observation. Even if the Boland judgment is not accorded rec-
ognition and enforcement, it may still have some impact upon Currie’s proposed class
action in Ontario because of the principle against double recovery. As a result of the
Boland judgment, certain benefits were conferred upon Canadian McDonald’s patrons.
If the Currie action succeeds on the merits, then the trial judge will likely take into account
the benefits already received by the plaintiff class in order to determine the appropriate
remedy and prevent over-compensation.
[33] Accordingly, I conclude that Currie and the unnamed members of the class he
seeks to represent (excluding the Parsons group) are not bound by the Boland judgment.
2. Did the notice to the Canadian class members satisfy the requirements of
natural justice?
[34] In the Boland action, the Illinois court ordered that notice be given in Canada
by means of two advertisements in Maclean’s Magazine for English Canada and in La
Presse, Le Journal de Québec and Le Journal de Montréal for Quebec. Notice was also
published in three US publications with circulation in Canada, People Magazine, USA
Today and four copies of TV Guide.
[35] The respondents rely upon the evidence of Todd Hilsee, an individual with
experience in developing notice programs for class actions. In Hilsee’s opinion, the notice
to Canadian members of the plaintiff class in Boland was inadequate. Relying on “net-
reach” analysis, he asserts that the notice had reached only 29.9% of Canadian adults who
frequent burger restaurants. The notice approved in the United States, meanwhile, would
have reached 72% of American fast food patrons.
[36] In response to Hilsee’s evidence, the appellants filed the affidavit of Wayne Pines,
who prepared the Boland notice plan. He stated that Maclean’s readership, in addition to
circulation figures, should be considered, as should the impact of the notice in the US
publications with circulation in Canada. Pines also swore that the notice to Canadians in
Boland was more effective and broader than the notice approved in Chadha v. Bayer Inc.
(1999), 43 CPC (4th) 91 (Ont. SCJ).
[37] The motion judge made the following findings at para. 58 with respect to the
adequacy of the notice in the Boland action:
I am satisfied that it would be substantially unjust to find that the Canadian members of the
putative class in Boland had received adequate notice of the proceedings and of their right
to opt out. Quite apart from the form and contents of the notice—Mr. Hilsee’s reference to
“wall to wall legalese” conveys no more than a hint of its eye-glazing opaqueness—I believe
that its dissemination in Canada was so woefully inadequate that the decision should be held
to offend the rules of natural justice recognized in this court and, on that ground, to be not
binding on the Canadian members of the putative class in Boland, other than those whom
I have found to have submitted to the jurisdiction of the court in Illinois. It would not, in
my judgment, be at all reasonable to consider publication in two issues of Maclean’s magazine
as adequate notice to unilingual English-speaking Canadians—or, indeed, to French-
speaking Canadians outside Quebec—who were customers of McDonald’s. Nor, as the
question is governed by the laws of this jurisdiction, do I believe it would be helpful to
speculate whether the decision of Schiller J on the adequacy of the notice plan would have
been the same if, at the preliminary hearing, he had been provided with the true circulation
of Maclean’s magazine or if the mistake in the initial declaration had been drawn to his
attention at the final hearing.
[38] I am not persuaded that we should interfere with the motion judge’s findings.
They are essentially factual in nature and therefore entitled to deference on appeal to this
court.
[39] It was open on the evidence for the motion judge to conclude that the wording
of the notice was so technical and obscure that the ordinary class member would have
difficulty understanding the implications of the proposed settlement on their legal rights
in Canada or that they had the right to opt out. As I have already indicated, that right is
of vital importance to the jurisdiction of the foreign court in international class action
litigation. The right to opt out must be made clear and plain to the non-resident class
members and I see no basis upon which to disagree with the motion judge’s assessment
of this notice.
[40] Nor would I interfere with the motion judge’s finding that the mode of notice
was inadequate. The appellants opted to publish the notice in a publication that is not
ordinarily used in English-Canada for such purposes and there was evidence that this
notice reached only a small proportion of the members of the plaintiff class. It was open
on the evidence for the motion judge to conclude that such notice was inadequate.
[41] The appellants argue that the motion judge erred in law by applying a higher
standard to the notice than would be applied in an Ontario class action. They point out
that under Ontario law, there is no absolute requirement for effective notice in class
actions and, where the stake of an individual class member is extremely low, notice
requirements may be tailored accordingly. In the present case, the individual class member
could assert no more than a mathematical chance to win a prize and given the low value
of such a claim, Ontario law sets a very low standard. The Class Proceedings Act, SO 1992,
c. 6, ss. 17 and 20 direct the Ontario courts making directions regarding notice to consider,
inter alia, the cost of notice, the size of the class and the nature of the relief sought. The
Act specifically permits the court, having regard to these matters, to dispense with notice
where appropriate (s. 17(2)). In consumer class actions involving large plaintiff classes
asserting claims that are essentially insignificant on an individual basis, Canadian courts
have approved notice arguably less effective than that approved in the case at bar: Chadha
v. Bayer, above; Wilson v. Servier Canada Inc. (2002), above.
[42] I agree that the motion judge appears not to have assessed the adequacy of the
Canadian notice against the standard mandated by Ontario law for Ontario class actions.
I disagree, however, that he erred is so doing. In assessing the fairness of the foreign
proceedings, “the courts of this country must have regard to fundamental principles of
justice and not to the letter of the rules which, either in our system, or in the relevant
foreign system, are designed to give effect to those principles” (Adams v. Cape Industries
plc, [1990] Ch. 433 at 559 (CA). The adequacy of the notice had to be assessed in terms
of what is required in an international class action involving the assertion of jurisdiction
against non-residents. While Ontario’s domestic standard my have some bearing upon
that issue, I do not agree that it is conclusive, particularly in light of the importance of
notice to the jurisdictional issues discussed above.
[43] In my view, the motion judge was entitled to look, as he did, to the standard the
American court applied to its own residents. American and Canadian class members had
similar if not identical interests at stake and there was no relevant basis upon which the
Illinois court could have concluded that one standard of procedural fairness was appropri-
ate for the American class and another for the Canadian. In the result, the Illinois court
applied a different and lower standard in determining what notice should be given to the
Canadian plaintiffs. I would not interfere with the motion judge’s conclusion that there
was a denial of natural justice. Natural justice surely requires that similarly situated liti-
gants be accorded equal (although not necessarily identical) treatment.
3. Is Currie precluded by the doctrines of res judicata or abuse of process from
prosecuting his claim in Ontario?
[44] The appellants argue that Currie should be bound by Boland judgment on the
basis that he is in the same interest as or a privy to Parsons. Parsons did not appeal the
motion judge’s finding that he attorned to the jurisdiction of the Illinois court; therefore,
he is bound by it. The allegations in the Currie action are the same as those advanced by
Parsons. The Currie action was brought as a protective measure to preserve the right to
bring an action in Canada on behalf of the same class of plaintiffs in the event of an
adverse ruling against Parsons in Illinois. The same law firm that represented Parsons
commenced the Currie action after Parsons’ appearance in the Illinois court.
[45] The appellants submit that the Currie action should be dismissed on the basis of
res judicata or as an abuse of process. They argue that Currie makes essentially the same
allegations as were made by Parsons and that the Currie action is nothing more than a
deliberate attempt to avoid the effect of an adverse ruling against Parsons. Currie and
Parsons are, the appellants submit, alter egos of each other, neither having any significant
personal interest in their claims and both making the same allegations. The real plaintiff,
and the only entity with a real stake in the claim, is the law firm that represents both
Currie and Parsons. The appellants urge us to look to the practical realities of class actions.
We are asked to focus on the centrality of the lawyers to a process in which the represent-
ative plaintiffs play what is at best a nominal role.
[46] I am not persuaded that res judicata applies here or that there are grounds for
this court to interfere with the motion judge’s refusal to apply the abuse of process doc-
trine. The parties are not the same—Currie took no part in the Boland proceedings and
McDonald’s Canada was not named as a defendant in that action. Further, Currie’s alleg-
ations specifically related to the Canadian patrons were made by Parsons in objecting to
the settlement, but they did not form part of the claim advanced by the representative
plaintiff in Boland.
[47] The appellants say that Currie and Parsons are privies, relying on the extended
definition of privity identified by Farley J in Bank of Montreal v. Mitchell (1997), 143 DLR
(4th) 697 at 739 (Ont. Gen. Div.), aff ’d (1997), 151 DLR (4th) 574 (Ont. CA) and applied
in Banque Nationale de Paris (Canada) et al. v. Canadian Imperial Bank of Commerce et
al. (2001), 52 OR (3d) 161 (CA): … . [Quotation omitted.]
[48] The motion judge rejected this submission. He found that there was no evidence
that Currie deliberately stood by while the battle was being fought elsewhere. There was
no evidence that Currie was even aware of the proceedings in the United States until
shortly before his own action was commenced. Currie refused, on his counsel’s advice,
to provide any information that he had received from his counsel about the Boland and
Parsons proceedings. The motion judge found, at para. 82, that even if he were to draw
from Currie’s refusal the adverse inference that the Currie was tainted by Parsons’ attorn-
ment, that still did not provide a basis for finding Currie to be a privy of Parsons or the
Currie action to be an abuse of process. The motion judge found that protection of the
interests of the putative class was a legitimate tactic:
There is nothing to suggest that Mr. Currie’s decision to commence the Currie action—and
any involvement of his solicitors in that decision—was motivated by any consideration other
than a desire to protect the interests of members of the putative class in the Parsons action
who had not participated in the Boland proceedings. Such members could not then be
compelled to participate in the Parsons action, I have found that Mr. Parsons had no authority
to submit their rights to the jurisdiction of the court in Illinois and, in view of the inadequacy
of the notice of the Boland proceedings given in Canada, I cannot assume that any of the
members of the putative class in the Currie action, other than the objectors, were aware of
the proceedings in Illinois or of the Parsons action. In these circumstances, I decline to find
that they—or Mr. Currie—were privies of Mr. Parsons or that the commencement and
continuation of the Currie action should be considered to be an abuse of process (at para. 83).
[49] I agree with the motion judge and I reject the submission of the appellants that
we should analyze this issue on the basis that the law firm was the real litigant, or that the
link provided by the law firm to both Parsons and Currie was sufficient to make them
privies. No doubt from a purely financial perspective, the law firm had a greater stake in
the outcome than Parsons, Currie or any individual member of the proposed class. How-
ever, the financial stake of the class as a whole exceeded that of the law firm. In any event,
I am not persuaded that the legal rights of the parties are to be assessed on the basis of
their lawyers’ pecuniary interest in the outcome. The legal claims that are being advanced
belong to Parsons, Currie and to the members of the proposed class, not to the law firm.
[50] Lawyers are not ordinarily considered to be in privity of interest with their clients:
see Carl Zeiss Stiftung v. Rayner and Keeler Ltd. (No. 2), [1957] AC 853 at 910 and 937.
The propriety of the procedures taken in the presentation of legal claims should be
assessed from the perspective of the clients’ legal rights. The law firm’s job was to protect
the legal interests of its individual clients and the legal interests of the proposed class.
Currie had no contact with Parsons; nor, it would seem, did he know anything about the
Parsons action or the steps that Parsons was taking to pursue it in Ontario and in Illinois.
The same can be said for the unnamed members of the class Currie proposes to represent.
In that light, it is difficult to see how Currie or those unnamed class members can be said
to be bound under the Bank of Montreal v. Mitchell principle because they have adopted
a tactical “stand by” position, rather than participating in the Illinois proceedings.
[51] This case is distinguishable from Shaw v. BCE Inc., [2004] OTC 28. In Shaw,
Farley J struck out the statement of claim in a proposed class proceeding only to be met
with another claim, substantially similar to the one he struck out, advanced by another
representative plaintiff represented by the same law firm. Farley J found that the new
statement of claim failed to disclose a cause of action and he struck it out on that basis.
He added that, in any event, the representative plaintiff fell within the extended definition
of privity from Bank of Montreal v. Mitchell. An appeal to this court was dismissed on the
ground that the new statement of claim failed to disclose a cause of action: (2004), 189
OAC 9. This court declined to comment on the res judicata issue. In Shaw, the case for
application of res judicata was significantly stronger than in the present case. There had
been a determination on the merits that the claim lacked validity and that the new claim
did not differ in substance from the claim that had been struck out. The merits of signifi-
cant aspects of the Parsons claim, those specifically pertaining to Canadian customers,
have never been considered. In any event, as I have already found that the expanded Bank
of Montreal v. Mitchell definition of privity does not apply here, and as Shaw rests on that
same principle, Shaw has no application here.
[52] For these reasons, I would dismiss the appeal.
NOTE
In Canada Post Corp v Lépine, 2009 SCC 16, [2009] 1 SCR 549, 304 DLR (4th) 539, the Supreme
Court dismissed an appeal by Canada Post seeking orders directing Quebec courts to recog-
nize an Ontario settlement of a class action that included residents of Quebec and staying
the equivalent Quebec class action. The Quebec action was commenced by Lépine on
February 6, 2002; the Ontario action was commenced on March 28, 2002; and a BC action
was commenced on May 7, 2002. The Ontario class included persons from all provinces
except British Columbia. On December 22, 2003, the Ontario court certified the Ontario
action and approved the settlement. On December 23, 2003, the Quebec court certified a
class action limited to Quebec residents. Canada Post applied to the Quebec court for rec-
ognition of the preclusive effect on the Quebec class of the Ontario settlement. The case
turned on the proper interpretation of the Civil Code of Quebec but it has relevance to com-
mon law Canada. The court held:
1. Quebec courts should not consider whether the foreign court was forum conveniens
in determining pursuant to art 3155(4) whether the foreign court had jurisdiction;
2. the notice requirements discussed in Currie v McDonald’s Restaurants “constitute a fun-
damental principle of procedure in the class action context” and “are no less compelling
in a case concerning recognition of a judgment from within Canada” (para 43); and
3. commencement of a class action in Quebec was sufficient for purposes of the first
seised exception under art 3155(4); certification was not required.
With respect to the problem of overlapping class actions, the court suggested that the
solution must be found by the provincial legislatures. LeBel J stated:
[56] In addition to its conclusions of law, the Quebec Court of Appeal seems to have had
reservations or concerns about the creation of classes of claimants from two or more provinces.
We need not consider this question in detail. However, the need to form such national classes
does seem to arise occasionally. The formation of a national class can lead to the delicate prob-
lem of creating subclasses within it and determining what legal system will apply to them. In the
context of such proceedings, the court hearing an application also has a duty to ensure that the
conduct of the proceeding, the choice of remedies and the enforcement of the judgment
effectively take account of each group’s specific interests, and it must order them to ensure that
clear information is provided.
[57] As can be seen in this appeal, the creation of national classes also raises the issue of
relations between equal but different superior courts in a federal system in which civil proced-
ure and the administration of justice are under provincial jurisdiction. This case shows that the
decisions made may sometimes cause friction between courts in different provinces. This of
course often involves problems with communications or contacts between the courts and
between the lawyers involved in such proceedings. However, the provincial legislatures should
pay more attention to the framework for national class actions and the problems they present.
More effective methods for managing jurisdictional disputes should be established in the spirit
of mutual comity that is required between the courts of different provinces in the Canadian
legal space. It is not this Court’s role to define the necessary solutions. However, it is important
to note the problems that sometimes seem to arise in conducting such actions.
Counsel for Lépine did not formally intervene in the Ontario proceeding before it was
certified but he did write a detailed letter to the Ontario court explaining that an application
was also being made in Quebec for certification. Could that letter be considered to have
amounted to attornment? On what factors might that characterization depend? Cf Re Over-
seas Food Importers and Brandt (1982), 126 DLR (3d) 422 (BCCA), in which the British Columbia
Court of Appeal held that a letter delivered to the German Consulate General in Vancouver
and written to a German court amounted to submission.
Meeking v Cash Store Inc

2013 MBCA 81
CAMERON JA (Chartier and Beard JJA concurring):
Introduction
[1] This appeal concerns: (i) whether a court in Ontario had jurisdiction to certify a
class action and approve a corresponding settlement that purported to be binding on
Manitoba residents where the transactions giving rise to the claim occurred wholly within
Manitoba and, if so, (ii) the conditions which must be met before the settlement is rec-
ognized and enforced in Manitoba. This raises issues related to the principles of both
private international law and the conflict of laws, on the one hand, and Canadian consti-
tutional law, on the other.
[2] For the reasons that follow, I conclude that the Ontario court properly exercised
jurisdiction in certifying a class action, which included potential plaintiffs resident in
Manitoba as class members, and in approving of a settlement judgment with respect to
that action. However, on the facts of this case, certain portions of the Ontario judgment
are not enforceable in Manitoba because proper notice was not given.
Background and Proceedings

[3] In April 2010, the plaintiff filed a statement of claim in the Manitoba Court of
Queen’s Bench against all of the defendants pursuant to The Class Proceedings Act,
C.C.S.M., c. C130, on his own behalf and on behalf of “all residents of Manitoba” and “any
persons resident outside of Manitoba who have elected to claim in this action, in a manner
to be determined by the Court” (the putative class). In essence, the statement of claim
concerns broker fees that were alleged to have been unlawfully collected in the defendants’
loan businesses.
[4] The plaintiff ’s claim has been preceded by similar claims in Ontario, British Col-
umbia and Alberta. Indeed, the claim in Ontario resulted in the proceedings that are the
subject of this appeal. Specifically, in McCutcheon v. The Cash Store Inc. [(2006)], 80 O.R.
(3d) 644 (S.C.J.), Cullity J. certified a class action against The Cash Store. The resultant
certification order included “[a]ny person in Canada, resident outside the Provinces of
British Columbia and Alberta, who borrowed money as a ‘payday loan’ from a Cash Store
location.” Therefore, the certification order purported to include Manitoba residents,
including the plaintiff. Of note, it only included the defendant, The Cash Store, and not
the other named defendant, 1152919 Alberta Ltd. carrying on business as Instaloans.
[5] After the certification decision in McCutcheon, the corresponding class action was
resolved by a court-approved settlement incorporated in a judgment by Cullity J. (the
McCutcheon settlement judgment). The McCutcheon settlement judgment defined the
“class” to which it was applicable as including persons in Manitoba who had obtained a
payday loan from The Cash Store and those who had obtained a payday loan from
1152919 Alberta Ltd. (operating as Instaloans), who had repaid the loans at the time that
notice of the settlement was given.
[6] The McCutcheon settlement judgment ordered that a copy of the “Schedule ‘C’
notice” (the notice) be provided to all potential claimants by: a) first class mail to the last
known address of all class members; b) posting the notice in each of The Cash Store
locations in Canada, except Alberta and British Columbia; c) causing a copy of the notice
to be referred to in various press releases; d) causing a copy of it to be posted on class
counsel’s website; e) causing a copy to be placed on The Cash Store’s website; and, f) order-
ing that class counsel provide a copy of the notice to any person who requested it. The
notice was accompanied by “Appendix 1,” which was a form to be filled out by those who
wished to participate in the “Distribution Plan.”
[7] The McCutcheon settlement judgment provided deadlines for any class member
to opt out of the class action and for those who wished to participate in the Distribution
Plan resulting from the settlement. It provided that the failure of a class member to
indicate that he or she wished to participate in the Distribution Plan by the deadline would
bar that class member from participating in it. It also provided that any class member
who did not opt out of the action released the defendants from any claims arising out of
the facts asserted in the action. Finally, it provided that, unless a class member opted out
of the action, all further claims against the defendants were released and those class
members would be barred from further proceedings with respect to the action.
[8] The plaintiff did not opt out or indicate his intent to participate in the Distribution
Plan before the deadline. Rather, well after the deadline, he filed the statement of claim
that is the subject of these proceedings. He claimed that he did not notice the posters that
were placed in The Cash Store that he frequented. Further, he said he did not read the
mail sent to him from The Cash Store or Instaloans and, therefore, did not see the notice
that was sent to him in accordance with the McCutcheon settlement judgment.
[9] In response to the statement of claim filed by the plaintiff, the defendants filed a
notice of motion requesting an order that the McCutcheon settlement judgment be rec-
ognized in Manitoba and, that it be enforced against the plaintiff and the putative class
for which the plaintiff sought to act as a representative. The motion requested a declaration
that the plaintiff be estopped from relitigating the subject matter of the McCutcheon
settlement judgment.
[10] The motion judge allowed the defendants’ motion for recognition and enforce-
ment in part. It is his decision that is the subject of this appeal.
[Cameron JA reviewed the decision of the motions judge.]
[18] To summarize, the motion judge concluded that the McCutcheon settlement
judgment should be recognized and enforced in Manitoba only with respect to payday
loans from The Cash Store.
[Cameron JA set out the issues, the arguments of the parties, and the history of class
actions.]
National Class Actions: Conflict of Laws and the Real and Substantial
Connection Test
[48] National class actions involve the assumption of jurisdiction by a provincial
superior court over a plaintiff class that includes and purports to bind non-residents of that
province. Correspondingly, the superior court of the province of the non-resident plaintiff
maintains the authority to determine whether any judgment resulting from the assump-
tion of jurisdiction will be recognized and enforced in that province. The issues involved
in the assumption of jurisdiction and the recognition of, and enforcement of, judgments
resulting from that assumption raise both constitutional and conflict of laws issues.
[Cameron JA discussed Morguard and Hunt.]
Application of the Real and Substantial Connection Test to International

Class Actions
[59] As stated, the real and substantial connection test has its genesis in private inter-
national law. Therefore, it is helpful to examine the development of the real and substantial
connection test in that context.
[60] In Currie v. McDonald’s Restaurants of Canada Ltd. [(2005)], 74 O.R. (3d) 321
(C.A.), the court was tasked with considering whether a class action settlement judgment
made in Illinois (the Illinois class action), was binding on residents of Ontario. The litiga-
tion was based on improperly run promotional games by McDonald’s, resulting in the
senior employees of the marketing company that operated the games being indicted for
embezzling the prizes. In the embezzlement trial, evidence was led that McDonald’s
instructed the employees that no high value prizes were to be awarded to Canadians.
Notwithstanding that the Illinois class action ostensibly included all affected Canadians
who had not opted out, Currie and others commenced their own class action against
McDonald’s in Ontario. McDonald’s defended the class action on the basis that the issues
had been resolved in the Illinois class action, and it applied for a declaration that all
members of the class who had not opted out of the Illinois class action were bound by it.
[61] In considering whether or not the Illinois court properly assumed jurisdiction
over potential plaintiffs (including Currie) residing in Ontario, Sharpe J.A. noted that the
“novel point raised on this appeal is the application of the real and substantial connection
test and the principles of order and fairness to unnamed, non-resident plaintiffs in inter-
national class actions” (at para. 13).
[62] In considering the issues, he commented on the nature of class actions and the
importance of the recognition of judgments, stating (at paras. 15-16):
There are strong policy reasons favouring the fair and efficient resolution of interprovincial
and international class action litigation: Vitapharm Canada Ltd. v. F. Hoffman-La Roche Ltd.,
[2001] O.J. No. 237, 6 C.P.C. (5th) 245 (S.C.J.), at para. 27, affd [2002] O.J. No. 1400, 20 C.P.C.
(5th) 65 (Div. Ct.), affd [2003] O.J. No. 868, 30 C.P.C. (5th) 107 (C.A.); Wilson v. Servier
Canada Inc. [(2000), 50 O.R. (3d) 219] at pp. 243-44 O.R. (S.C.J.); Wilson v. Servier Canada
Inc. (2002), 59 O.R. (3d) 656, at pp. 664-70 O.R. Conflict of law rules should recognize, in
appropriate cases, the importance of having claims finally resolved in one jurisdiction. In
some cases, Ontario courts will render judgments affecting the rights of non-residents and
in other cases, Ontario residents will be affected by class action proceedings elsewhere.
Ontario expects its judgments to be recognized and enforced, provided its courts assert
jurisdiction in a proper manner and comity requires that, in appropriate cases, Ontario law
should give effect to foreign class action judgments.
Recognition and enforcement rules should take into account certain unique features of class
action proceedings. In this case, we must consider the situation of the unnamed, non-resident
class plaintiff. In a traditional non-class action suit, there is no question as to the jurisdiction
of the foreign court to bind the plaintiff. As the party initiating proceedings, the plaintiff will
have invoked the jurisdiction of the foreign court and thereby will have attorned to the foreign
court’s jurisdiction. The issue relating to recognition and enforcement that typically arises is
whether the foreign judgment can be enforced against the defendant. [emphasis added]
[63] He then commented that, in determining whether the real and substantial con-
nection test and the principles of order and fairness have been satisfied, it is necessary to
consider the situation from the position of “the party against whom enforcement is sought”
(at para. 18). In that case, as in this case, the plaintiff Currie argued that the court should
analogize to a traditional two-party lawsuit.
[64] In considering the issue, Sharpe J.A. rejected the strict application of a two-party
lawsuit analogy, stating (at paras. 20-21):
This analogy is of some assistance, but I am not persuaded that a model entirely based upon
the position of the defendant in a traditional two-party lawsuit can adequately capture the
legal dynamics and complexity of the situation of an unnamed plaintiff in modern cross-
border class action litigation. The position of the class action plaintiff is not the same as that
of a typical defendant. Rules for recognition and enforcement of class action judgments should
reflect those differences. The class action plaintiff is not hauled before a foreign court and
required to defend him or herself upon pain of default judgment. As stated by Rehnquist J. in
the leading American decision, Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S. Ct. 2965
(1985), at pp. 809, “[un]like a defendant in a civil suit, a class-action plaintiff is not required
to fend for himself.” Class action regimes typically impose upon the court a duty to ensure that
the interests of the plaintiff class members are adequately represented and protected. This is a
factor favouring recognition and enforcement against unnamed class members: see John C.L.
Dixon, “The Res Judicata Effect in England of a U.S. Class Action Settlement” (1997) 46
I.C.L.Q. 134, at pp. 136, 150-51.
On the other hand, I accept [Currie’s] basic point that it would be wrong simply to
approach the issue of jurisdiction by asking whether the Illinois court would have jurisdiction
over [Currie] at the suit of Canadian plaintiffs. The court must have regard to the rights and
interests of unnamed plaintiffs who did not participate in the [Illinois class action] proceed-
ings. The question of jurisdiction should be viewed from the perspective of the Ontario client
of a McDonald’s Canada restaurant, participating in a promotional prize giveaway presented
by McDonald’s Canada, who has done nothing to invoke or submit to the jurisdiction of the
Illinois court. [emphasis added]
[65] I agree with the reasons given by Sharpe J.A. Class action proceedings are not
strictly comparable to a lawsuit involving two parties and must be looked at from the
unique circumstances they present as a class action.
[66] In Currie, the court concluded that the real and substantial connection test was
satisfied on the basis that (at para. 22):
The principal connecting factors linking the cause of action asserted in Currie’s proposed
class action to the state of Illinois are that the alleged wrong occurred in the United States
and Illinois is the site of McDonald’s head office. The alleged wrongful conduct, manipulating
the “random” selection of winners of “high value” prizes to ensure that no such prizes would
be awarded to contestants in Canada, occurred in the United States. …
Therefore, the court concluded that the Illinois court properly assumed jurisdiction over
non-resident Canadian plaintiffs. However, despite the above, the court upheld the motion
judge’s conclusion that the judgment was not enforceable because the requirements of
procedural justice were not met. Specifically, the motion judge concluded that “the word-
ing of the notice was so technical and obscure that the ordinary class member would have
difficulty understanding the implications of the proposed settlement on their legal rights
in Canada or that they had the right to opt out” (at para. 39). The court held that these
factual findings of the motion judge were entitled to deference (see para. 38).
The Real and Substantial Connection Test: Presumptive Connecting Factors

[67] After the decision of the motion judge in this case, the Supreme Court of Canada
had the opportunity to revisit the real and substantial connection test in the context of
private international law in Van Breda. That case dealt with two different actions that gave
rise to issues relating to the assumption of jurisdiction and the conflict of laws. The facts
are that, in two separate cases, plaintiffs were injured while vacationing in Cuba. Actions
were brought in Ontario against Club Resorts Ltd., a company incorporated in the Cay-
man Islands, which managed the two hotels where the accidents occurred. Club Resorts
Ltd. argued that the Ontario courts lacked jurisdiction to determine the matter.
[68] LeBel J. emphasized that he was considering the common law conflicts rule and
leaving constitutional territorial concerns for another day. Specifically, he stated (at para. 34):
This case concerns the elaboration of the “real and substantial connection” test as an appro-
priate common law conflicts rule for the assumption of jurisdiction. I leave further elaboration
of the content of the constitutional test for adjudicative jurisdiction for a case in which a conflicts
rule is challenged on the basis of inconsistency with constitutionally imposed territorial limits.
To be clear, however, the existence of a constitutional test aimed at maintaining the consti-
tutional limits on the powers of a province’s legislature and courts does not mean that the
rules of private international law must be uniform across Canada. Legislatures and courts
may adopt various solutions to meet the constitutional requirements and the objectives of
efficiency and fairness that underlie our private international law system. Nor does this test’s
existence mean that the connections with the province must be the strongest ones possible or
that they must all point in the same direction. [emphasis added]
[69] While LeBel J. considered it important to be mindful of the distinction between

the real and substantial connection test for private international law and that for consti-
tutionally imposed territorial limits, he did not clearly explain that distinction. Presum-
ably, it would prevent the extraterritorial reach of provincial legislation in circumstances
as described in the Hunt case.
[70] LeBel J. recognized that there was dissatisfaction with the real and substantial
connection test and with its meaning. He commented that case law often conflated the
distinction between the constitutional test and the rules of private international law.
Therefore, he found that it was “necessary to clarify the rules of the conflict of laws in a
way that is consistent with the constitutional constraints on the provinces’ courts but does
not turn every private international law issue into a constitutional one” (at para. 67).
[71] Ultimately, LeBel J. held that, for the purpose of conflict of laws, a non-exhaustive
list of presumptive connecting factors should be used in the application of the real and
substantial connection test. He clarified that jurisdiction must “be established primarily
on the basis of objective factors that connect the legal situation or the subject matter of
the litigation with the forum” (at para. 82). Further, he stated that, while abstract issues
such as fairness, efficiency or comity were not to be included in the list of presumptive
connecting factors, “[t]hese systemic values may influence the selection of factors or the
application of the method of resolution of conflicts” (at para. 84).
• • •
Application of the Real and Substantial Connection Test Where the Facts Material
to a Non-Resident Plaintiff Occurred in That Non-Resident Plaintiff ’s Province
[76] In this case, the plaintiff is not a resident of Ontario. He is a resident of Manitoba.
Furthermore, the transactions giving rise to his claim all occurred within Manitoba.
[77] Because the motion judge held that the fact that the defendants were carrying
on business in Ontario was sufficient to satisfy the real and substantial connection test,
he did not significantly analyze this issue. However, in McCutcheon, Cullity J. was alive
to the issue when he certified the proceeding on the basis that the common issues were
sufficient to satisfy the real and substantial connection test for the purpose of inclusion
of non-residents, including potential Manitoba plaintiffs, in the national class action.
[78] In reaching his conclusion, Cullity J. followed a line of jurisprudence that has
been slowly developing, wherein provincial superior courts have certified multi-jurisdic-
tional class actions involving non-resident class members. The concept was explained by
Winkler J. (as he then was) in Baxter v. Canada (Attorney General), [2005] O.T.C. 391
(S.C.) (at para. 12):
… In several recent cases it has been held that the certified common issues in a class action
can serve as a basis for the proper assumption of jurisdiction by the court over extra-pro-
vincial parties. (See: Harington v. Dow Corning Corp. (2000), 193 D.L.R. (4th) 67 (B.C. C.A.);
Wilson v. Servier (2000), 50 O.R. (3d) 219(S.C.), (2000), 52 O.R. (3d) 20 (Div. Ct.), leave to
appeal denied, [2001] S.C.C.A. No. 88, S.C.C. Bulletin, 2001, p. 1539.) The thrust of Har-
rington and Wilson, in relation to the jurisdiction determination, is that where a class action
involving intra-provincial plaintiffs could be certified, and the common issues forming the basis
for the certification are shared by both the resident class and extra-provincial non-residents
against the defendant, the existence of such common issues provides a “real and substantial
connection” of the non-residents to the forum in relation to the action. … [emphasis added]
[79] Some authors opine that this expansion of the real and substantial connection
test is territorially unconstitutional. For example, Peter W. Hogg & S. Gordon McKee,
“Are National Class Actions Constitutional?” (2010) 26 N.J.C.L. 279, state (at p. 284):
… The superior court of the province only has jurisdiction inside the boundaries of the
province. And the provincial Legislature lacks jurisdiction to enact laws with effect outside
the boundaries of the province, so that the Legislature cannot expand the jurisdiction of its
courts outside the boundaries of the province, which, of course, is territory exclusively
occupied by the courts of the other provinces (or foreign countries). …
[80] The jurisdictional argument is based on the notion that, in order for the court to
assume jurisdiction over a class proceeding, the court must have jurisdiction over each
and every class member and that class action legislation is procedural in nature and cannot
convey substantive rights. In this regard, reliance is placed on the case of Bisaillon, wherein
the court held that the class action procedure does not alter the jurisdiction of courts.
Finally, they argue that reliance on the factor of common issues in the real and substantial
connection analysis conflates the test for certification with the test for jurisdiction.
[81] Relying on the above analysis, the plaintiff maintains that, because the Ontario
court would not otherwise have jurisdiction over him or his action, class action proceed-
ings cannot cloak it with jurisdiction.
[82] First, I agree with the defendants that the plaintiff ’s interpretation of Bisaillon
and Dell is too wide. Both cases can be distinguished on the basis that they dealt with
subject-matter jurisdiction, and not the broader questions of the real and substantial
connection test and constitutional territorial jurisdiction. The motion judge was correct
when he held that (at para. 48):
… The facts in those cases bear no resemblance to the facts at issue here. Nor did the Supreme
Court provide any instruction on whether it is open to a Canadian court in a class proceeding
to make orders binding non-resident, non-attorning class members. …
[83] Next, contrary to the opinions of Hogg and McKee, others contend that provincial
superior courts are not subject to the same territorial limits as provincial legislatures. This
position was summarized by Winkler C.J.O. in the recent case of Parsons v. The Canadian
Red Cross Society [2013 ONSC 3053]. In that case, the court was tasked with determining
whether it had jurisdiction to sit in another province to hear a motion concerning a pan-
Canadian settlement agreement of class actions involving various provinces. In holding
that the court did have jurisdiction, he stated (at paras. 26-27):
AG Ontario further submits that Ontario courts historically could not hold hearings outside
Ontario. However, it did not point to any constitutional or statutory limitation on the geo-
graphical location where the provincial superior courts may sit in order to adjudicate on the
issues raised in a proceeding.
Professor Janet Walker observes in her article, “Are National Class Actions Constitutional?—
A Reply to Hogg and McKee” (2010) 48 Osgoode Hall L.J. 95, at pp. 105-108, that there is
no provision in the Constitution Act, 1867 (U.K.), 30 & 31 Vict., c. 3., that addresses or could
be said to confine the superior courts’ jurisdiction to adjudicate within territorial boundaries.
Equally, there is no provision of the Constitution that speaks to the physical location where
the superior courts must sit.
[84] In Wilson v. Servier Canada Inc. (2002), 59 O.R. (3d) 656 (S.C.J.), Cumming J.
considered the same issue, concluding (at paras. 59-61):
Section 129 of the Constitution Act, 1867 provides that the court retains its pre-Confederation
jurisdiction except as thereafter altered by Parliament or the legislature of the province within
the scope of their respective constitutional authority.
Section 92 of the Constitution Act, 1867 sets forth the exclusive powers of provincial
legislatures. Section 92 does not restrict the pre-Confederation jurisdictional reach of the
courts. The third “whereas” clause in the preamble to the Constitution Act, 1867 states that
it is the authority of Parliament and the provincial legislatures, together with the nature of
the Executive Government, that is being provided for in the Constitution Act, 1867.
In my view, the [Class Proceedings Act, 1992, SO 1992, c 6] recognizes and affirms the
court’s inherent jurisdiction to include non-resident claimants within an Ontario action
where jurisdiction in respect of that action is rooted constitutionally, as in the case at hand,
i.e., where there is a real and substantial connection between the subject matter of the action
and the representative plaintiff and Ontario class members. [emphasis added]
[85] Recently, this line of reasoning was also adopted by Popescul J. (as he then was)
in Thorpe v. Honda Canada Inc., 2011 SKQB 72, 373 Sask.R. 71, wherein he concluded
that the “opt-out” model of multi-jurisdictional class action legislation in Saskatchewan
was constitutional and certified a class action that included non-residents.
[86] The above jurisprudence emphasizes that s. 129 of the Constitution Act, 1867
provides that “all Courts of Civil and Criminal Jurisdiction … shall continue … as if the
Union had not been made” subject to repeal, abolishment or alteration by the Parliament
of Canada or by the Legislature of the respective provinces in accordance with the author-
ity provided. Correspondingly, provincial legislation has continued the historical power
of the courts. For example, s. 11(2) of the Ontario Courts of Justice Act, R.S.O. 1990,
c. C.43, provides that the Superior Court of Justice has all of “the jurisdiction, power and
authority historically exercised by courts of common law and equity in England and
Ontario.” Similarly, in Manitoba, s. 32 of The Court of Queen’s Bench Act, C.C.S.M.,
c. C280, provides:
Jurisdiction of Court
32 The court is and continues to be a court of record of original jurisdiction and possesses
and may exercise all such powers and authorities as by the laws of England are incident to a
superior court of record of civil and criminal jurisdiction in all civil and criminal matters
and possesses and may exercise all the rights, incidents and privileges of those courts as fully
to all intents and purposes as they were on July 15, 1870 possessed and exercised by any of
the superior courts of common law at Westminster, the Court of Chancery at Lincoln’s Inn,
the Court of Probate or by any other court in England having cognizance of property and
civil rights and of crimes and offences.
[87] As already stated, the law of class actions developed in the Court of Chancery,
which was a court of superior jurisdiction. Halsbury’s Laws of England (2d ed.) Vol. 8
(Toronto: Butterworth & Co. (Canada), Ltd., 1933), describes the territorial jurisdiction
of superior courts (at para. 1173):
… The jurisdiction of the superior courts … extends in civil cases over the whole of England
and Wales … though in certain circumstances the jurisdiction may be more extensive, and
the courts may take cognizance of personal actions in respect of contracts or torts though
the cause of action may have arisen abroad or the parties be foreigners. …
[88] Applied to Canada, the jurisdiction of the superior court would be throughout
the country and not limited to a particular province.
[89] As previously stated, the law of class actions developed in the Court of Chancery.
In R.W. White’s, “Equitable Obligations in Private International Law: The Choice of Law,”
(1986) 11 Sydney L. Rev. 92, the author extensively examined the jurisdiction of the Court
of Chancery. He contrasted the historical and traditional practice of the Courts of Law
with the Court of Chancery by noting that, in the Courts of Law, “the foundation of
jurisdiction was the amenability of the defendant to the command of the summons in the
originating writ, which depended primarily on his presence in England” (at p. 96). How-
ever, he continued by explaining that (ibid):
… In the Court of Chancery the mere presence of the defendant in England was neither a
necessary nor a sufficient criterion for the assumption of jurisdiction over him. Jurisdiction
depended upon the residence or domicile of the defendant within England, or on the cause
of action arising, or the subject matter of the suit being situated, in England.
Of note, this test is similar to the real and substantial connection test enunciated by the
Supreme Court in Morguard.
[90] In support of his position, White considered the English case of Tanfield v. Irvine
(1826), 2 Russ. 149, concluding (at p. 97):
… For the Court of Chancery jurisdiction was not defined by the amenability of the defend-
ant to service. As a general rule the Court would not entertain the proceedings if the defendant
did not have adequate notice of them, and the adequacy of notice was secured by the defend-
ant being properly served. The subpoena could not be served effectually outside the territorial
jurisdiction, and therefore the Court generally could not entertain proceedings over a
defendant abroad. But this was so for reasons of natural justice, not jurisdiction. Although
service was subject to territorial limits, jurisdiction was not founded on amenability to
service. [emphasis added]
[91] Of course, White’s article dealt with private international law and not constitu-
tional law. Nonetheless, the parallel manner in which the two areas of law have evolved,
and their interconnectivity, cannot be ignored.
[92] As the above illustrates, the constitutional territorial jurisdiction of provincial
superior courts may not necessarily be defined by the legislative jurisdiction of the provinces.
[93] The Canadian jurisprudence to which I have referred that would allow for com-
mon issues to be considered as a presumptive connecting factor in the real and substantial
connection test is persuasive. Fairness to non-resident plaintiffs is achieved through the
notification process and opt-out provisions, while, at the same time, the policy consider-
ations favouring class actions described by McLachlin C.J.C. in Western Canadian Shop-
ping are fulfilled. Further, the constitutional principle of federalism is respected.
Expansion of the Presumptive Real and Substantial Connecting Factors to

Include Common Issues Pursuant to Van Breda
[94] While the presumptive connecting factors for the real and substantial connection
test outlined in Van Breda concerned private international law, considering the parallel
development of constitutional law regarding the issue of jurisdiction, it is appropriate to
apply the presumptive connecting factors to situations where the matter at issue is the
court’s territorial jurisdiction. Therefore, in this case the principles regarding the recogni-
tion of a new presumptive connecting factor, as outlined in Van Breda, will be applied.
[95] The application of the test for the recognition of a new presumptive connecting
factor, as outlined in para. 73 herein, shows that the common issues factor is similar to the
recognized presumptive connecting factors in that it deals with the subject matter of the
wrongdoing. The wrongs committed are the same across the country. Next, the jurispru-
dence I reviewed has considered common issues to be a factor sufficient to satisfy the real
and substantial connection test within Canada. Furthermore, initiatives such as the
“Report of the Uniform Law Conference of Canada’s Committee on the National Class and
Related Interjurisdictional Issues: Background, Analysis and Recommendations,” Uniform
Law Conference of Canada, Civil Law Section (9 March 2005), online: Branch MacMaster
LLP, Barristers & Solicitors <http://www.branchmacmaster.com/storage/articles/
ULCC_Report.pdf>, strongly endorse the concept of national class actions with opt-out
clauses, despite an acknowledged awareness of the constitutional debate. Finally, class
action legislation in a number of provinces, including Manitoba and Ontario, allows for
national class actions and the inclusion of non-resident plaintiffs, subject to opt-out clauses.
[96] In considering the above, it must be remembered that, in Van Breda, LeBel J.
stated that the connections with the province need not be the strongest ones possible in
order to fulfill the real and substantial connection test. Further, to recognize common
issues as a presumptive connecting factor in circumstances where the court has territorial
jurisdiction over the defendant(s) and the representative plaintiff is consistent with the
principles of order, comity and fairness.
[97] Therefore, I would conclude that, in circumstances where the court has territorial
jurisdiction over both the defendant and the representative plaintiff in a class action
proceeding, common issues between the claim of the representative plaintiff and that of
non-resident plaintiffs is a presumptive connecting factor, sufficient to give the court
jurisdiction over non-resident plaintiffs.
Recognition and Enforcement of Class Action Judgments: Procedural Fairness

[98] When a court has properly assumed jurisdiction over a class action involving
non-residents, jurisprudence has confirmed that recognition and enforcement of the
resulting judgment in another province or country involves a consideration of the pro-
cedures leading up to and giving effect to that judgment.
[99] In Lépine, the Supreme Court of Canada considered the ability of an Ontario
court to assume jurisdiction over Québec residents in a national class action and the
subsequent recognition and enforcement of the settlement judgment from the Ontario
court. The class action in Lépine arose as a result of an offer by the Canada Post Corpor-
ation for lifetime internet access via certain software that the corporation sold to its
customers. However, Canada Post discontinued the lifetime internet service approximately
one year after its implementation. Class action proceedings were initiated in Ontario,
Québec and British Columbia. British Columbia and Ontario accepted an offer to settle
by Canada Post however; Québec refused the offer. Certification and settlement approval
proceedings were initiated in Ontario and Québec. Mr. Lépine asked the Ontario court
not to include Québec residents in the class. Despite this, the resulting certification order
and corresponding settlement agreement purported to include “[a]ny person in Canada,
not a resident of the Province of British Columbia” (at para. 9). The day after the Ontario
certification and settlement approval, the Québec Superior Court approved a class action
against Canada Post that was limited to Québec residents.
[100] The recognition and enforcement of the Ontario judgment in Québec was
governed by the Civil Code of Québec, S.Q., 1991, c. 64 (the C.C.Q.). The court noted that,
as a whole, the rules for identifying connecting factors were set out in the C.C.Q., but in
essence, they complied with the basic requirement that there be a real and substantial
connection (see paras. 19, 25). Article 3168 of the C.C.Q. identified that one of the factors
favoring recognition included situations where the defendant was domiciled in the coun-
try where the decision was rendered. I note that the connecting factors in the legislation
are similar to the presumptive connecting factors listed in Van Breda. As stated earlier,
Van Breda also included the place where a “defendant carries on business” (at para. 90)
as constituting a presumptive connecting factor. Based on the fact that, in Lépine, Canada
Post had its head office in Ontario, the Supreme Court held that the Ontario court had
properly assumed jurisdiction over the proceedings.
[101] Concerning recognition and enforcement, a. 3155(3) of the C.C.Q. provided
that any decision rendered by a foreign authority must be recognized unless an exception
applied. One exception was where there has been a contravention of the fundamental
principles of procedure. Writing on behalf of the court in Lépine, LeBel J. noted that a
judge hearing an application for recognition and enforcement should not examine the
merits of the judgment. Nevertheless, at the stage of recognition, the court must be
concerned “not only with the procedure prior to the judgment but also with the proced-
ural consequences of the judgment” (at para. 41). He went on to explain the significance
of procedural fairness in class action proceedings (at para. 42):
A class action takes place outside the framework of the traditional duel between a single
plaintiff and a single defendant. In many class proceedings, the representative acts on behalf
of a very large class. The decision that is made not only affects the representative and the
defendants, but may also affect all claimants in the classes covered by the action. For this
reason, adequate information is necessary to satisfy the requirement that individual rights
be safeguarded in a class proceeding. The notice procedure is indispensable in that it informs
members about how the judgment authorizing the class action or certifying the class proceed-
ing affects them, about the rights—in particular the possibility of opting out of the class
action—they have under the judgment, and sometimes, as here, about a settlement in the
case. …
[102] Despite the fact that the issue of enforceability was governed by the C.C.Q., in
support of his position, LeBel J. cited with approval the Ontario Court of Appeal decision
in Currie with respect to the common law governing procedural fairness and the issue of
notice (at para. 43):
The Ontario Court of Appeal stressed the importance of notice to members in a case involv-
ing an application for recognition of a judgment rendered in Illinois, in the United States. It
emphasized the vital importance of clear notices and an adequate mode of publication (Currie
v. McDonald’s Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321, at paras. 38-40). In a class
action, it is important to be able to convey the necessary information to members. Although it
does not have to be shown that each member was actually informed, the way the notice pro-
cedure is designed must make it likely that the information will reach the intended recipients.
The wording of the notice must take account of the context in which it will be published and,
in particular, the situation of the recipients. In some situations, it may be necessary to word
the notice more precisely or provide more complete information to enable the members of
the class to fully understand how the action affects their rights. These requirements constitute
a fundamental principle of procedure in the class action context. In light of the requirement
of comity between courts of the various provinces of Canada, they are no less compelling in
a case concerning recognition of a judgment from within Canada. Compliance with these
requirements constitutes an expression of such comity and a condition for preserving it

within the Canadian legal space. [emphasis added]
[103] Ultimately, the court in Lépine concluded that the Ontario judgment “did not
properly explain the impact of the judgment certifying the class proceeding on Québec
members of the national class established by the Ontario Superior Court of Justice” (at
para. 46). Therefore, the court held that the fundamental principles of procedure were
not followed and the Ontario judgment was not enforceable in Québec. Thus, despite the
fact that the enforceability of the order was governed by legislation as opposed to the
common law, the common law provided the standard by which the court interpreted the
legislation.
Analysis
Issue 1: Did the Motion Judge Err in His Determination That the Ontario Court
Properly Assumed Jurisdiction over Non-Resident Manitobans in the
McCutcheon Class Action?
[104] The parties agree, as do I, that the standard of review with respect to whether
the court in Ontario properly exercised jurisdiction is a question of law, and the standard
of review is correctness.
[105] There are two aspects to the question of jurisdiction in this case—the jurisdic-
tion of the Ontario court over proceedings in Ontario affecting Ontario residents, and
the jurisdiction of the Ontario court over proceedings in Ontario affecting non-residents
of Ontario. The motion judge, relying on Lépine, found that the Ontario court had juris-
diction because the defendants were carrying on business in Ontario (see para. 49).
However, as argued by the plaintiff, the issue of real and substantial connection was agreed
to by the parties in Lépine and did not receive substantial analysis in that case. Based on
Currie, I would find that, while the carrying on of business in Ontario is sufficient to
establish jurisdiction over the proceedings as they affect Ontario residents, more is
required for the Ontario court to have jurisdiction over non-residents of Ontario.
[106] In Currie, the court noted that, when determining whether a real and substantial
connection exists for the purpose of jurisdiction, a court should consider the perspective
of the non-resident plaintiff who has done nothing to invoke or submit to the jurisdiction
of the foreign court. In this case, I have determined, consistent with the principles set out
in Van Breda, that in circumstances where there is jurisdiction in a traditional sense over
the defendant and the resident representative plaintiff in a class action proceeding, the
factor of common issues between the claim of the resident representative plaintiff and the
non-resident plaintiff is a presumptive connecting factor in the application of the real and
substantial connection test regarding the court’s jurisdiction over the non-resident plain-
tiffs. Having found that the defendants have established that there are sufficient common
issues between the claims of the representative plaintiff and those of the non-resident
plaintiffs in Manitoba, I would conclude that the Ontario court properly assumed juris-
diction over the Manitoba plaintiff, despite the fact that he did not attorn to the jurisdic-
tion of the Ontario court.
[107] Furthermore, for the reasons stated in paras. 76-97, the recognition of common
issues as a presumptive connector, in the circumstances I have outlined, does not consti-
tute an unconstitutional expansion of the real and substantial connection test.
[108] The connecting factor is a presumption and, like the other presumptions created
in Van Breda, it is not absolute and can be rebutted in appropriate circumstances. In this
case, the plaintiff failed to rebut the presumption.
[The court held that the motions judge had been correct in his analysis of procedural
fairness; insufficient notice had been given to Manitoba residents with respect to loans
borrowed from Instaloan.]
NOTE
The Supreme Court granted leave to appeal. The case was scheduled to be heard on Janu-
ary 12, 2015. Unfortunately for those hoping for clarification by the Supreme Court, the hear-
ing was adjourned sine die because Cash Stores and related companies, having commenced
reorganization proceedings under the Companies’ Creditors Arrangement Act, RSC 1985, c C-36,
were granted a stay pursuant to that statute.
III. CONVERSION BY REGISTRATION: STATUTORY MODES

A. Reciprocal Enforcement of Judgments Statutes
As early as 1924, the ULCC promulgated model acts designed to facilitate recognition and
enforcement of foreign judgments. The 1924 model act was revised in 1958. Adopted by
many provinces, these statutes were the first legislative effort to modify the traditional com-
mon law approach to recognition and enforcement of foreign judgments. After Morguard,
the ULCC promulgated new model acts that incorporated the new basis for recognition and
enforcement created by the Supreme Court of Canada.
B. The 1924 and 1958 Statutes

In Morguard Investments Ltd v De Savoye, [1990] 3 SCR 1077, 76 DLR (4th) 256 at 279-80, La For-
est J states that “[t]he Reciprocal Enforcement of Judgments Acts in the various provinces were
never intended to alter the rules of private international law. They simply provided for the
registration of judgments as a more convenient procedure than was formerly available—
that is, by bringing an action to enforce a judgment given in another province.” For the most
part, this assertion holds true and the principles and rules enunciated in common law
actions are applicable to cases under the acts. The reverse is also, generally, true. Neverthe-
less, use of reciprocal enforcement legislation involves the process of statutory interpreta-
tion so that differences may develop between the two methods of conversion.
There is more than one model of reciprocal legislation in use in Canada, because some
provinces adopted the 1924 and some the 1958 versions of the registration model. More-
over, because these models depend on the province entering into reciprocal agreements
with other jurisdictions, each province has its own list of reciprocating states. All Canadian
common law provinces reciprocate with each other but there are variations from province
III. Conversion by Registration: Statutory Modes 481
to province as to the non-Canadian reciprocating states. Can a judgment creditor take

advantage of these variations in the lists of non-Canadian reciprocating states and chain
judgments to get to the jurisdiction in which the judgment debtor’s assets are located? In
British Columbia, the answer is that creditors cannot create a chain of judgments by taking
advantage of the list of reciprocating states in another province: see Owen v Rocketinfo, Inc,
2008 BCCA 502, 305 DLR (4th) 370.
The reciprocal enforcement acts incorporate the traditional common law bases for rec-
ognition and enforcement but not the Morguard rule because they pre-date Morguard.
The attraction of this mode of conversion of foreign judgments is its economy and effi-
ciency. The cost to register is low and the times allowed for registration, notification, and
objection are short and are usually treated as absolute.
Central Guaranty Trust Co v Deluca

[1995] NWTR 200 (SC)
VERTES J:
[1] The defendants apply to set aside the ex parte registration of an Ontario judgment
in this court pursuant to the Reciprocal Enforcement of Judgments Act (the “Act”). This
application raises the question of the extent to which a recent judgment of the Supreme
Court of Canada dealing with recognition of “foreign” judgments has affected, if at all,
proceedings under this statute. Since the Act is modelled on uniform legislation in force
in most provinces, the question is not unique to this jurisdiction.
[2] On March 27, 1992, the plaintiff obtained default judgment against the defendants
in Ontario. The action was based on foreclosure of a mortgage on property in Ontario.
The defendant, Nancy Deluca, was served with process from the Ontario court in Ontario.
The defendant, Ramon Antonio Deluca, was personally served in Iqaluit, Northwest
Territories, where, he says, he has been living since 1983. The Ontario property which
was the subject of the foreclosure action was apparently the former matrimonial home
of the defendants.
[3] On February 9, 1994, the plaintiff applied ex parte to register the Ontario judgment
pursuant to the Act. The relevant statutory provisions are:
2(1) Where a judgment has been given in a court in a reciprocating jurisdiction, the
judgment creditor may apply to the Supreme Court within six years after the date of the
judgment to have the judgment registered in the Supreme Court.
(2) On an application under subsection (1), the Supreme Court may order the judgment
to be registered in the Supreme Court.
(3) An order for registration under this Act may be made ex parte in all cases in which
the judgment debtor was personally served with process in the original action, or in which,
though not personally served, the judgment debtor appeared or defended or otherwise
submitted to the jurisdiction of the original court, but in all other cases reasonable notice of
the application for the order must be given to the judgment debtor.
(4) No order for registration shall be made if it is shown to the Supreme Court to which
the application for registration is made that
(a) the original court acted without jurisdiction;
(b) the judgment debtor, being a person who was neither carrying on business nor
ordinarily resident within the jurisdiction of the original court, did not voluntarily appear
or otherwise submit during the proceedings to the jurisdiction of that court;
(c) the judgment debtor, being the defendant in the proceedings, was not duly served
with the process of the original court and did not appear, notwithstanding that the judg-
ment debtor was ordinarily resident or was carrying on business within the jurisdiction
of that court or agreed to submit to the jurisdiction of that court;
(d) the judgment was obtained by fraud;
(e) an appeal is pending or the time within which an appeal may be taken has not
expired;
(f) the judgment was in respect of a cause of action that for reasons of public policy
or for some similar reason would not have been entertained by the registering court; or
(g) the judgment debtor would have a good defence if an action were brought on the
original judgment.
• • •
6.(1) Where a judgment is registered pursuant to an ex parte order,

(a) within one month after the registration or within a further period that the register-
ing court may order, notice of the registration shall be served on the judgment debtor in
the same manner as provided by the rules of the registering court for service of statements
of claim; and
(b) the judgment debtor, within one month after the judgment debtor has had notice
of the registration, may apply to the registering court to have the registration set aside.
(2) On an application referred to in paragraph (1)(b), the Supreme Court may set aside
the registration on any of the grounds mentioned in subsection 2(4) and on any terms that
the Supreme Court thinks fit.
• • •
9. Nothing in this Act deprives a judgment creditor of the right to bring an action on his
or her judgment instead of proceeding under this Act.
[4] The ex parte application was initially returned for further information. A subse-
quent ex parte application was filed on May 9, 1994, and the order registering the Ontario
judgment was issued the same day.
[5] A copy of the ex parte registration order was served on Mr. Deluca in Iqaluit on
May 25, 1994. It was also served on Ms. Deluca in Ontario on August 29, 1994. This
application to set aside the ex parte order was not filed until November 18, 1994, well
beyond the one-month time limit prescribed by s. 6(1)(b) of the Act. It will be noted that
service on Ms. Deluca was not effected within the one-month period as required by
s. 6(1)(a) of the Act; but I find that to be of no consequence since Ms. Deluca was at all
relevant times present in the jurisdiction of the original court where the judgment can
be enforced against her and there is no indication that she has ever resided in this juris-
diction. As will be seen, the basis of the defendants’ application is that Mr. Deluca, and
only that defendant, was not within the jurisdiction of the original court. There are no
arguments advanced specifically in respect of Ms. Deluca. As a formality, therefore, I
hereby extend the time for service on Ms. Deluca nunc pro tunc in accordance with
s. 6(1)(a) of the Act.
[6] One of the defendants’ solicitors has sworn an affidavit explaining that no applica-
tion was brought earlier because he was under the impression that the one-month time
limit to apply could be extended. No argument was advanced at the hearing before me
that the time limit in s. 6(1)(b)—unlike that in s. 6(1)(a)—can be extended. Indeed, as
will also be seen, there is no power to do so. It seems to me that what may to some extent
have prompted this application at this time was the service of a garnishee summons on
Mr. Deluca.
[7] The defendants’ submission is that the basic statutory requirements for an applica-
tion to be made ex parte have not been met. They say that the requirement in s. 2(3) that
“the judgment debtor was personally served with process in the original action” means
personal service within the jurisdiction of the original court. If the defendant was served
outside of the jurisdiction, and did not submit to the jurisdiction of the original court,
then the judgment is a nullity (except in the original jurisdiction) and therefore cannot
be registered. Further, they submit that since it is a nullity, and since the lack of personal
service within the jurisdiction goes to the basic entitlement to proceed ex parte, the one-
month time limit does not apply to this application. For these propositions the defendants
rely on long-standing authority: Wedlay v. Quist (1953), 10 WWR (NS) 21 (Alta. CA);
Traders Group Ltd. v. Hopkins (1968), 64 WWR 698 (NWT Terr. Ct.), aff ’d. (1968), 66
WWR 573 (NWT CA).
[8] In addition, the defendants submit that the plaintiff ’s solicitors breached their duty
to the court in the manner in which the ex parte order was obtained. They say that the
interpretation given to s. 2(3) noted above is of such significant authority that the relevant
cases should have been brought to the attention of the chambers judge (in this case myself)
who was asked to issue the order. In fact the two case authorities noted above are referred
to for consideration by counsel in a practice direction issued in 1977 for ex parte applica-
tions under the Act.
[9] It is to state the obvious when I say that judges cannot be expected to know or, if
they did once know, to remember all the relevant law in a particular area. Judges depend
on counsel to alert them to the relevant authorities. As stated by de Weerdt J in Harvey
Fulton Whse Carpet Sales Ltd. v. Pye, [1990] NWTR 143 (SC), at p. 145:
Applicants seeking relief from the court on an ex parte basis are, however, under the duty of
disclosing all facts material to their applications for relief, more particularly those facts which
may reflect adversely on their applications. This duty is one to be zealously performed on
their behalf by members of the legal profession (and students-at-law) representing such
applicants. Likewise, members of the profession and their students have a duty to bring to
the attention of the chambers judge any statutory or other authority which may reflect
adversely on an ex parte application.
[10] In the Rules of Court, on a general basis, there are requirements set out for the
contents of the memorandum that accompanies an ex parte application. Rule 341(3) states:
(3) An ex parte application shall be accompanied by a memorandum to the judge setting
forth particulars of the material filed, a summary of the relevant facts, reference to the
authorities, rules and enactments relied upon and the relief sought.
As noted above by de Weerdt J, any reference to the authorities relied upon should also
make note of significant contrary authorities (especially ones that have received appellate
court approval).
[11] The ex parte applications in this case made no reference to any authorities except
a blanket general reference to the Act and the Rules of Court relating specifically to pro-
ceedings under the Act. Considering the fact that Mr. Deluca was “personally served with
process,” but not within the original jurisdiction, then the statutory interpretation of that
phrase provided by the authorities noted above should have been brought to my attention
in the ex parte memorandum.
[12] While I think the plaintiff ’s solicitors may be faulted for not disclosing relevant
authorities, I do not think that default should be decisive as to the merits of this applica-
tion. Such default may, however, have a direct bearing on other incidental matters such
as costs.
[13] On the merits of the application, the plaintiff submits that the interpretation set
forth in Wedlay v. Quist and Traders Group Ltd. v. Hopkins is no longer good law. The
argument is that the requirement to interpret the phrase “personally served with process”
so as to mean personal service within the jurisdiction of the original court is one that was
based on the common law and the common law has now evolved, at least in Canada, to
where there is now no need and indeed wrong to incorporate this additional qualification.
For this, the plaintiff relies on the Supreme Court of Canada judgment of Morguard
Investments Ltd. v. De Savoye (1990), [1990] 3 SCR 1077, [1991] 2 WWR 217, 46 CPC
(2d) 1, 76 DLR (4th) 256.
[14] Prior to Morguard, recognition of “foreign” judgments, including judgments of
other jurisdictions within Canada, rested on the common law rule of private international
law that a court will recognize the judgment of a foreign court only where either (a) the
defendant was personally served within the territory of the foreign court, or (b) the defend-
ant voluntarily submitted to the jurisdiction of the foreign court. This was the law adopted
in the Wedlay case and subsequently applied in the Traders Group case. The Morguard
judgment, however, established a new test for recognition based on a “real and substantial
connection” between the jurisdiction and the action. La Forest J, writing on behalf of the
court, stated that “the courts in one province should give full faith and credit … to the
judgments given in another province or a territory, so long as that court has properly, or
appropriately, exercised jurisdiction in the action” (p. 237 WWR).
[15] Interestingly, the facts in Morguard parallel to some extent the facts in this case.
Both actions deal with foreclosure actions over property in the original jurisdiction. Both
actions are based on judgments obtained by default after service ex juris on the defendants.
The significant difference in the two actions, however, is that Morguard was an action on
the judgment while the case before me is an application to register under the Act.
[16] Statutes for the reciprocal enforcement of judgments did not, as noted in Mor-
guard, alter the rules of private international law. They simply provide a convenient
procedure for the registration of judgments as opposed to bringing an action. This is made
clear by s. 9 of the Act which preserves the right to bring an action.
[17] But what effect, if any, does Morguard have on the Act? The cases that have con-
sidered this question to date have concluded that when an application is brought to recipro-
cally register a judgment, as opposed to bringing an action, then the specific requirements
of the statute must be complied with notwithstanding the dictates of Morguard and
whatever changes to the common law it affected: Acme Video Inc. v. Hedges (1993), 12 OR
(3d) 160 (CA); TDI Hospitality Management Consultants Inc. v. Browne, [1994] 9 WWR
153 (Man. CA); see also Cardinal Couriers Ltd. v. Noyes (1993), 13 CPC (3d) 144[, [1993]
5 WWR 704] (Sask. CA).
[18] Professor Peter W. Hogg, one of Canada’s leading constitutional scholars, attaches
a more far-reaching significance to the Morguard judgment. He suggests that the effect
of Morguard is that there is now an implicit full faith and credit rule in the Constitution
of Canada. While he points out that it is unclear from the reasons for judgment whether
the Morguard rule of recognition is a new constitutional requirement or simply a new
common law rule, he also refers to Hunt v. T&N plc, [1993] 4 SCR 289[, [1994] 1 WWR
129], in which La Forest J, again for the unanimous court, explained the Morguard deci-
sion as establishing a constitutional requirement that was beyond the power of provincial
or territorial legislatures to override. See Hogg, Constitutional Law of Canada (3rd ed.,
1992), s. 13.5(c) (1994 update).
[19] Whether one regards Morguard as enacting a constitutional requirement or
effecting a change in the common law, the result in this case is the same. There is now no
room to add an implicit requirement for personal service “within the jurisdiction” to the
explicit requirement of simply “personal service.” One of the changes to the common law
rules is that a “foreign” judgment may be enforced where the court of one jurisdiction
renders judgment against a resident of another jurisdiction provided that the defendant
was served in compliance with the original court’s rules for service ex juris and has a
substantial connection with the original court’s jurisdiction. Therefore, in my opinion,
the common law on which Wedlay and Traders Group are based has changed and it is
now sufficient, for the purpose of bringing an ex parte application under s. 2(3) of the
Act, to establish, in the plain words of the section, that “the judgment debtor was person-
ally served with process in the original action.” That is the case here and the ex parte
application was properly brought.
[20] My interpretation of the impact of the Morguard judgment on s. 2(3) of the Act
does not in any way alter the specific requirements of the Act in other ways. For example,
if one chooses to reciprocally enforce a judgment under the Act and there is evidence
establishing one of the criteria in s. 2(4), then the judgment cannot be enforced. The alterna-
tive approach of an action on the judgment, however, is still available in such circumstances.
[21] In this case the defendant Mr. Deluca has put forth an argument that he at least
neither carried on business in, nor was a resident of, nor submitted to, the jurisdiction of
the original court. There is affidavit evidence on behalf of the plaintiff arguing otherwise.
It may be that this defendant has a good argument under s. 2(4)(b) of the Act to oppose
registration. But it is a matter of some dispute. This argument, however, cannot be enter-
tained because it is brought out of time.
[22] As noted previously, s. 6(1)(b) of the Act requires that an application to set aside
an ex parte registration be brought within one month after the judgment debtor had notice
of the registration. Mr. Deluca was served over 6 months ago.
[23] In the recent case of Concord Mortgage Group Ltd. v. Northern Geophysics Ltd.
(NWT SC No. 05225; October 3, 1994), Richard J held that the one-month time limit in
s. 6(1)(b) is mandatory and cannot be extended. I respectfully adopt his comments (at
p. 7 of the unreported judgment):
In my view when the legislature sets out the procedures for litigants to utilize in certain
specific circumstances, a court ought to respect the parameters of the statutory regime
enacted by the legislators. To do otherwise is to re-write the legislation.
See also Yorkshire Trust Co. v. Mallett (1986), 71 AR 23 (CA).

[24] The application to set aside the ex parte order of May 9, 1994, is dismissed.
[25] Having regard to my earlier comments regarding the failure of the plaintiff ’s
solicitors to bring the relevant authorities to light on the ex parte application, and not-
withstanding the plaintiff ’s success on this application, there will be no costs awarded.
Application dismissed.
C. The Post-Morguard Model Acts

Following Morguard, the ULCC drafted more model statutes dealing with recognition and
enforcement of Canadian judgments. Many, but not all, provinces and territories have
enacted at least one of them. Some provinces enacted one model act and then replaced it
with a second model act. The first ULCC model act is limited to recognition and enforcement
of pecuniary judgments. The second model act includes recognition and enforcement of
non-pecuniary judgments.
These model acts apply exclusively to all Canadian judgments, including those origina-
ting in Quebec, without the need for any form of reciprocal agreement. All require blind full
faith and credit—courts are prohibited from evaluating the “international” jurisdiction of the
originating province: see s 6(3)(a) of British Columbia’s Enforcement of Canadian Judgments
and Decrees Act, below. According to the ULCC website, the model statutes eliminate the
common law defences of fraud and breach of natural justice: see s 6(3)(c) of the British Col-
umbia Act.
Enforcement of Canadian Judgments and Decrees Act

SBC 2003, c 29
Definitions
1(1) In this Act:
“Agreement” means the Trade, Investment and Labour Mobility Agreement Between
British Columbia and Alberta;
“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 Col-
umbia 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

(c) that declares rights, obligations or status in relation to a person or thing,
and, subject to section 1.1, includes a TILMA award, 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 administra-
tion of the estate of a deceased person;
“enforcement” includes requiring that a Canadian judgment be recognized by any person
or authority, whether or not further relief is sought;
“enforcing party” means a person entitled to enforce a Canadian judgment in the province
or territory where the judgment was made;
“panel” means a panel convened under Article 26 or 29 of the Agreement;
“registered Canadian judgment” means a Canadian judgment that is registered under this
Act.
“TILMA award” means
(a) a monetary award within the meaning of Article 29(7) of the Agreement if no
judicial review has been requested in relation to that award under Article 31(1) within
the 15 day period referred to in that Article,
(b) a monetary award within the meaning of Article 29(7) of the Agreement if
(i) judicial review has been requested in relation to that award under Article
31(1) within the 15 day period referred to in that Article, and
(ii) the judicial review court determines that the award should neither be set
aside nor remitted to a panel, or
(c) if judicial review has been requested under Article 31(1) of a monetary award
within the meaning of Article 29(7) of the Agreement and the judicial review court
remits the award to a panel, the monetary award as confirmed or amended by that
panel,
and includes an award of costs under Article 32(1) of the Agreement.
(2) When used in relation to a TILMA award,
(a) a reference in this Act to a judge, registrar, clerk or other proper officer of the
court that made the judgment is deemed to be a reference to a member of the panel
that made the TILMA award,
(b) a reference in this Act to the province or territory where the judgment was
made is deemed to be a reference to British Columbia, and
(c) a reference in sections 6(1) and (3)(a) and (c) and 10(a) and (b) to a proceeding
is deemed to be a reference to the proceedings that led to the TILMA award.
TILMA awards
1.1(1) If a Canadian judgment or a registered Canadian judgment is a TILMA award,
(a) sections 6(2)(c)(ii) to (iv) and 9 do not apply, and
(b) a reference in section 4 to sections 5 and 6 is deemed to be a reference to sec-
tions 5 and 6(1), (2)(a), (b) and (c)(i), (3) and (4).
(2) If a registered Canadian judgment is a TILMA award against the government, the
following must accord with the Crown Proceeding Act:
(a) enforcement of that registered Canadian judgment under section 4 of this Act;
(b) an order in respect of that registered Canadian judgment under section 6(2)(a),
(b) or (c)(i) of this Act.
(3) Subject to subsection (2), nothing in subsection (1) affects the power of the
Supreme Court to make, in relation to a registered Canadian judgment that is a TILMA
award, any order in relation to the enforcement of that registered Canadian judgment,
including, without limitation, any order
(a) staying or limiting the enforcement of that registered Canadian judgment, or
(b) respecting the procedure to be used for the enforcement of that registered
Canadian judgment,
that the court may make in relation to the enforcement of any other order or judgment
of the court.
Right to register Canadian judgment

2(1) Subject to subsection (2), a Canadian judgment, whether or not the judgment is
final, may be registered under this Act for the purpose of enforcement.
(2) A Canadian judgment that requires a person to pay money may not be registered
under this Act for the purpose of enforcement unless it is a final judgment.
(3) A Canadian judgment that also contains provisions for relief that may not be
enforced under this Act may be registered under this Act except in respect of those
provisions.
Procedure for registering Canadian judgment

3(1) A Canadian judgment is registered under this Act by paying the fee prescribed
by regulation and by filing in the registry of the Supreme Court
(a) a copy of the judgment, certified as true by a judge, registrar, clerk or other
proper officer of the court that made the judgment, and
(b) the additional information or material required by the Rules of Court.
(2) Law enforcement authorities acting in good faith may, without liability, rely on
and enforce a purported Canadian judgment that
(a) was made in a proceeding between spouses, and
(b) enjoins, restrains or limits the contact one party may have with the other for
the purpose of preventing harassment or domestic violence,
whether or not the judgment has been registered in the Supreme Court under subsection (1).
Effect of registration
4. Subject to sections 5 and 6, a registered Canadian judgment may be enforced in
British Columbia as if it were an order or judgment of, and entered in, the Supreme Court.
Time limit for registration and enforcement

5(1) A Canadian judgment that requires a person to pay money must not be registered
or enforced under this Act
(a) after the time for enforcement has expired in the province or territory where
the judgment was made, or
(b) later than 10 years after the date on which the judgment became enforceable
in the province or territory where it was made.
(2) Equitable doctrines and rules of law in relation to delay apply to the enforcement
of a Canadian judgment, to the extent that it provides for relief other than the payment
of money.
Application for directions

6(1) A party to the proceeding in which a registered Canadian judgment was made
may apply to the Supreme Court for directions respecting its enforcement.
(2) On an application under subsection (1), 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
(i) such an order could be made in respect of an order or judgment of the
Supreme Court under the Rules of Court or any enactment relating to legal rem-
edies and the enforcement of orders and judgments,
(ii) the party against whom enforcement is sought has brought, or intends to
bring, in the province or territory where the Canadian judgment was made, a
proceeding to set aside, vary or obtain other relief in respect of the judgment,
(iii) an order staying or limiting enforcement is in effect in the province or
territory where the Canadian judgment was made, or
(iv) the judgement is contrary to public policy in British Columbia.
(3) Notwithstanding subsection (2), the Supreme Court must not make an order
staying or limiting the enforcement of a registered Canadian judgment solely on the
grounds that
(a) the judge, court or tribunal that made the judgment lacked jurisdiction over
the subject matter of the proceeding that led to the judgment, or over the party against
whom enforcement is sought, under
(i) principles of private international law, or
(ii) the domestic law of the province or territory where the judgment was made,
(b) the Supreme Court would have come to a different decision on a finding of fact
or law or on an exercise of discretion from the decision of the judge, court or tribunal
that made the judgment, or
(c) a defect existed in the process or proceeding leading to the judgment.
(4) An application for directions must be made under subsection (1) before any meas-
ures are taken to enforce a registered Canadian judgment if
(a) the enforceability of the judgment is, by its terms, subject to the satisfaction of
a condition, or
(b) the judgment was obtained without notice to the persons bound by it.
Interest on registered judgment

7(1) To the extent that a registered Canadian judgment requires a person to pay
money, interest is payable as if it were an order or judgment of the Supreme Court.
(2) For the purpose of calculating interest payable under subsection (1), the amount
owing on the registered Canadian judgment is the total of
(a) the amount owing on that judgment on the date it is registered under this Act,
and
(b) interest that has accrued to that date under the laws applicable to the calculation
of interest on that judgment in the province or territory where it was made.
Recovery of registration costs

8. An enforcing party is entitled to recover all costs, charges and disbursements
(a) reasonably incurred in the registration of a Canadian judgment under this Act,
and
(b) assessed or allowed by a registrar of the Supreme Court.
Enforcing parties’ other rights not affected by registration

9. Neither registering a Canadian judgment nor taking other proceedings under this
Act affects an enforcing party’s right to bring an action on the Canadian judgment or on
the original cause of action.
Application of Act
10. This Act applies to
(a) a Canadian judgment made in a proceeding commenced after this Act comes
into force, and
(b) a Canadian judgment made in a proceeding commenced before this Act comes
into force and in which the party against whom enforcement is sought took part.
IV. Arbitral Awards 491
IV. ARBITRAL AWARDS

Arbitral awards may be enforced at common law if converted to judgments but reliance on the
common law has been rendered unnecessary by the enactment at both the federal and prov-
incial levels of legislation implementing the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (New York, 1958) (“the New York Convention”) and the UNCITRAL
Model Law on International Commercial Arbitration (1985) (“the Model Law”). The various
implementing statutes are not identical and there are overlaps and problems of determining
which is the applicable statute and whether a particular statute applies, but both the New
York Convention and the Model Law require recognition of foreign arbitral awards, and that
recognition is not contingent on reciprocity with the jurisdiction in which the arbitration
took place. In addition to the arbitration legislation mandating recognition, the definition of
judgment in the provincial reciprocal enforcement legislation includes arbitration awards “if
the award, under the law in force in the state where it was made, has become enforceable in
the same manner as a judgment given by a court in that state” so that recognition and
enforcement of arbitral awards may be possible under those statutes too.
Although recognition and enforcement of foreign arbitral awards is required, that
requirement is not absolute. The statutes set out circumstances justifying a court in refusal
to recognize a foreign arbitral award. The relevant article in the New York Convention is art V.
Foreign Arbitral Awards Act

RSBC 1996, c 154, Schedule
Article V
1. Recognition and enforcement of the award may be refused, at the request of the
party against whom it is invoked, only if that party furnishes to the competent authority
where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applic-
able to them, under some incapacity, or the said agreement is not valid under the law
to which the parties have subjected it or, failing any indication thereon, under the law
of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of
the appointment of the arbitrator or of the arbitration proceedings or was otherwise
unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration, provided that, if the decisions on matters
submitted to arbitration can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to arbitration may be recognized
and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in
accordance with the agreement of the parties, or, failing such agreement, was not in
accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or
suspended by a competent authority of the country in which, or under the law of
which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the com-
petent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration
under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public
policy of that country.
Article VI
If an application for the setting aside or suspension of the award has been made to a
competent authority referred to in article V(1)(e), the authority before which the award
is sought to be relied upon may, if it considers it proper, adjourn the decision on the
enforcement of the award and may also, on the application of the party claiming enforce-
ment of the award, order the other party to give suitable security.
Schreter v Gasmac Inc

(1992), 7 OR (3d) 608, 89 DLR (4th) 365 (Gen Div)
FELDMAN J: This is an application to enforce a foreign arbitration award under the

Ontario International Commercial Arbitration Act, RSO 1990, c. I.9, or, alternatively, under
the federal United Nations Foreign Arbitral Awards Convention Act, SC 1986, c. 21.
Enforcement is resisted by the respondent on the following grounds:
(1) The matter was commenced incorrectly as an application rather than an action
and is not authorized under Rule 14 of the Rules of Civil Procedure.
(2) As the award was confirmed by a court judgment in the state of Georgia where
the arbitration was held, the award has merged in the judgment and can only be
enforced as a foreign judgment and not as an arbitration award.
(3) The respondent has a substantial counterclaim which it has not yet asserted. This
proceeding should be stayed while the respondent arbitrates the counterclaim in
Georgia or asserts it in the present proceeding.
(4) There was a denial of natural justice because the arbitrator failed to give reasons,
limiting the respondent’s right to judicial review of the award, and the court’s ability
to discern whether the award goes beyond the proper submission to arbitration.
(5) It would be contrary to the public policy of this province to enforce the award
because the award includes a substantial sum which appears to represent an
acceleration of future damages not contemplated by the agreement between the
parties, and contrary to the law of this jurisdiction.
Facts
On November 13, 1987, Schreter and his company, Enatech Corporation entered into an
agreement in writing with the respondent, Gasmac Inc. (Gasmac Canada), and its sub-
sidiary, Gasmac Incorporated (Gasmac US), for the sale of certain assets along with the
right to manufacture and sell burners and related equipment in the United States and
Canada, and included provision for the payment of royalties and commissions to Schreter.
The agreement provided that the governing law of the agreement was the law of the state
of Georgia. Paragraph 16 of the agreement is an arbitration clause which provides:
Any dispute arising out of, in connection with or in relation to this agreement or its inter-
pretation shall be determined by binding arbitration conducted in Atlanta in accordance
with the then-existing rules of the American Arbitration Association. The parties renounce
resort to judicial proceedings in connection with this agreement other than to enforce an
arbitration award.
At the time of the agreement, Schreter and Enatech operated in Georgia, Gasmac Canada
in Ontario, and Gasmac US in Pennsylvania.
The applicant demanded arbitration by letter of April 17, 1989, requesting the following
relief:
(a) $20,000 minimal annual royalties past due plus interest;
(b) $80,000 accelerated minimal annual royalty payments which would have been
due later had the respondent not breached the contract;
(c) an accounting for all royalties in excess of the minimum annual royalties;
(d) an accounting for payment of all sales commissions;
(e) damages for breach of the best efforts clause;
(f) damages for the cost of the applicant obtaining insurance;
(g) attorneys’ fees, costs and expenses.
The respondent and Gasmac US received notice of the submission from the American
Arbitration Association in a letter of April 20, 1989, which included information about how
to counterclaim, and which provided a list of proposed arbitrators to which objection could
be taken. No objection was taken to any of those listed, nor was a counterclaim asserted.
The arbitration hearing took place on August 21 to 22, 1989, in Atlanta before Todd
Deveau, one of the listed arbitrators from the American Arbitration Association. George
and Martin Scarborough of the respondent along with Georgia counsel appeared in
person at the hearing. All parties presented evidence and argument briefs on the merits
and on certain issues of arbitrability and jurisdiction, including the claim for accelerated
payment, the claim for the cost of liability insurance which was governed by a separate
but related agreement, and the claim for attorneys’ fees, not referenced in the agreement.
The arbitral award dated October 19, 1989, was delivered without reasons, and awarded:
(1) on the claim, $91,186.87 (US);
(2) on the claim for attorneys’ fees, $14,000 (US);
(3) interest at the rate of 12% on the total award.
No steps were initiated by Gasmac Canada nor Gasmac US to challenge or set aside
the award. The applicant filed a motion to confirm the award in the United States District
Court, Northern District of Georgia, Atlanta Division on March 13, 1990, pursuant to
the United States Arbitration Act, Title 9 US Code No. 9. On that hearing, the respondent
and Gasmac US did not seek to vary or set aside the award, but did oppose confirmation
on the following grounds: (1) the court lacked personal jurisdiction over Gasmac Canada,
and (2) subject-matter jurisdiction because the award did not properly exceed $50,000;
(3) the arbitrator exceeded his power by accelerating payment; (4) the award lacked
foundation in reason or fact and legally lacked rationality. Both Gasmac corporations
appeared by counsel on the hearing and further affidavit evidence was filed on behalf of
Gasmac Canada.
The US court rejected all of these arguments in reasons delivered June 26, 1990, and
the award was confirmed by judgment dated June 29, 1990.
The Legislation
International Commercial Arbitration Act—The Model Law
The Ontario Act came into force on June 8, 1988, but applies to commercial arbitration
agreements and awards whether made before or after that date (s. 2(2)). It brings into
force in Ontario the Uncitral Model Law on International Commercial Arbitration adopted
by the United Nations Commission on International Trade Law on June 21, 1985. The
Model Law is a Schedule to the Act. Chapter VIII of the Model Law is entitled “Recognition
and Enforcement of Awards” and contains arts. 35 and 36 which are set out in full:
Article 35.
Recognition and enforcement
(1) An arbitral award, irrespective of the country in which it was made, shall be recog-
nized as binding and, upon application in writing to the competent court, shall be enforced
subject to the provisions of this article and of article 36.
(2) The party relying on an award or applying for its enforcement shall supply the duly
authenticated original award or a duly certified copy thereof, and the original arbitration
agreement referred to in article 7 or a duly certified copy thereof. If the award or agreement
is not made in an official language of this State, the party shall supply a duly certified transla-
tion thereof into such language.
Article 36.
Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the country in which
it was made, may be refused only:
(a) at the request of the party against whom it is invoked, if that party furnishes to
the competent court where recognition or enforcement is sought proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some
incapacity; or the said agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereon, under the law of the country where the
award was made, or
(ii) the party against whom the award is invoked was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable
to present his case, or
(iii) the award deals with a dispute not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration, provided that, if the decisions on matters
submitted to arbitration can be separated from those not so submitted, that part of
the award which contains decisions on matters submitted to arbitration may be rec-
ognized and enforced, or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties or, failing such agreement, was not in
accordance with the law of the country when the arbitration took place, or
(v) the award has not yet become binding on the parties or has been set aside or
suspended by a court of the country in which, or under the law of which, that award
was made; or
(b) if the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration
under the law of this State, or
(ii) the recognition or enforcement of the award would be contrary to the public
policy of this State.
(2) If an application for setting aside or suspension of an award has been made to a court
referred to in paragraph (1)(a)(v) of this article, the court where recognition or enforcement
is sought may, if it considers it proper, adjourn its decision and may also, on the application
of the party claiming recognition or enforcement of the award, order the other party to
provide appropriate security.
Section 11 of the Act provides that an arbitral award recognized by the court is enforceable
in the same manner as a judgment or order of the court.
The Model Law applies to international commercial arbitrations conducted in Ontario
or elsewhere, but the only articles which apply to arbitrations conducted outside Ontario
are arts. 35 and 36, as well as arts. 8 and 9 which deal with other court functions where
there is an arbitration agreement.
The applicant has complied with art. 35(2). Therefore the court shall enforce the award
which shall be recognized as binding unless the court exercises its discretion based on
one of the grounds set out in art. 36. The onus is on the respondent under art. 36(1)(a)
to prove that one of the grounds exists for the court to exercise its discretion to refuse to
recognize or enforce the arbitral award. Even then, the court is not obliged to refuse
recognition of the award. Alternatively, under art. 36(1)(b) there is no onus of proof on
the respondent to prove that the award is contrary to the public policy of Ontario, but if
the court so finds, it still retains discretion to recognize an award even in such a case.
Section 13 of the Act provides guidance to an interpreting court by permitting recourse
to two commentaries on the Model Law, the Report of the United Nations Commission
on International Trade Law on the work of its eighteenth session (June 3 to 21, 1985) (the
“June 1985 Report”), and the Analytical Commentary contained in the Report of the
Secretary-General to the eighteenth session of the United Nations Commission on Inter-
national Trade Law (the “Analytical Commentary”). These are published in The Canada
Gazette, Part I, Vol. 120, No. 40, October 4, 1986, Supplement.
United Nations Foreign Arbitral Awards Convention Act: The New York Convention
The constitutional validity of the federal Act has recently been addressed in the Federal
Court of Appeal decision in Compania Maritima Villa Nova SA v. Northern Sales Co.
(1991), 30 ACWS (3d) 626, [1991] FCJ No. 1163 (CA), released November 20, 1991. That
court held that the federal Act is “valid federal legislation for the recognition and enforce-
ment in Canada of foreign arbitral awards having a federal character in a constitutional
sense. Questions will no doubt arise in individual cases as to whether a particular award
is one whose enforcement falls within the proper ambit of the legislation.”
No argument was addressed on this application as to the constitutional applicability
of the federal Act to this award, nor to any distinctions between the federal and Ontario
Acts which might affect the judgment of this court on the recognition and enforcement
of this award. It is therefore unnecessary to address the applicability of the federal Act for
the purposes of this decision.
The Issues
(1) The Application Procedure
The respondent submits that the procedure to enforce a foreign judgment is by action
and that by analogy the same procedure should be used to enforce a foreign arbitration
award, particularly where the reference to “application” is not contained in the Act itself,
but only in the Model Law which is a Schedule to the Act.
Rule 14.05(2) of the Rules of Civil Procedure permits the commencement of a proceed-
ing by application if a statute so authorizes. The International Commercial Arbitration Act
provides that the Model Law is in force in Ontario. The Model Law is made a Schedule
to the Act and is enacted as part of the Act. No authority was cited to suggest that the
Model Law is any less an enactment of the legislature of this province because it was
enacted in the form of a schedule.
Under art. 35(1) of the Model Law: “An arbitral award, irrespective of the country in
which it was made, shall be recognized as binding and, upon application in writing to the
competent court, shall be enforced subject to the provisions of this article and of article
36.” (I note that one reading of this clause may suggest that the court application refers
only to enforcement rather than recognition of an award. Article 36 makes it clear that
both recognition and enforcement are in the discretion of the court. The Analytical Com-
mentary explains that the award may be recognized for other purposes without court
recognition for enforcement: pp. 164-5, para. 4.)
In the case of Chilian v. Augdome Corp. (1991), 78 DLR (4th) 129, 49 CPC (2d) 1, 2 OR
(3d) 696, the Ontario Court of Appeal clarified the issue of the propriety and availability of
the two modes of commencing a proceeding, by action and by originating notice. Where a
statute uses the word “apply” or “application,” the proceeding may be commenced by ori-
ginating notice although it may also be commenced as an action. In my view, it is appropri-
ate that a foreign arbitral award be able to be recognized by this court using Rule 14.
Oftentimes there will be no dispute and the application will proceed expeditiously to an
order. In such cases, as well as where the material facts can be put before the court by affi-
davit evidence and cross-examination thereon if necessary, it would be unnecessarily
cumbersome, costly and inefficient for the matter to be required to proceed by way of action.
Referring to rule 2.01(2) (an originating process shall not be set aside because the other
should have been used), the Court of Appeal pointed out that a court may order the one
mode of commencement if either unauthorized or inappropriate, to be treated as the
other. In this case, the respondent takes the secondary position that there are facts in
dispute and that the matter should be treated as an action or the trial of an issue ordered.
For reasons set out below, the application will be disposed of based on the material before
the court.
I also note that the argument of this case proceeded only after extensive affidavit evi-
dence as well as cross-examination thereon was prepared and transcripts filed. It would
be more appropriate to challenge the jurisdiction of the court to hear the case by applica-
tion before such a record is created. On such a motion, even if the application procedure
is held to be available, the court and the parties may determine at an early stage the most
expeditious procedure for putting the necessary evidence before the court.
(2) Merger of the Award into the Georgia Judgment

The respondent submits that the Ontario International Commercial Arbitration Act cannot
apply where the arbitral award has been made an order or judgment of a foreign court.
The argument is that at that point the award itself no longer exists as it has merged in the
judgment, and only the foreign judgment can be enforced under the common law rules
for enforcement of foreign judgments.
This argument is based on a decision of the High Court of Ontario in Stolp & Co. v.
Browne & Co., [1930] 4 DLR 703, 66 OLR 73, which stands for two propositions: (1) an
Ontario court will not enforce a foreign arbitral award; and (2) where a foreign award is
confirmed by a judgment of the court where the award was made, that judgment can be
enforced in our courts as the award is merged in the judgment. For the proposition that
the award merges in the confirmatory judgment, the court only quoted from the textbook,
Piggott’s Foreign Judgments and Jurisdiction (1908), as follows (pp. 95-6):
The decision of a dispute by any other person or body, even with consent of the parties, does
not amount to a judgment; the remedy in case of failure to carry out the decision would
probably lie on the contract to refer the dispute and accept the decision. Thus an award of
an arbitrator abroad does not come within the definition of a foreign judgment until it is
made an order of Court; it is then merged in that order, (emphasis added) which is in effect
the judgment of the Court in the matter.
Both the first proposition and the doctrine of merger from the Stolp decision have
been questioned by textbook writers (see, for example, McLeod, The Conflict of Laws,
1983 ed., at pp. 660 and 664; and Castel, Canadian Conflict of Laws, 2nd ed., Supplement,
pp. 38-9, para. 183), nor is there reported authority which follows or approves the case.
The learned authors of Russell on Arbitration, 20th ed. (1982), p. 368, point out that Piggott
was in error, and that the law in England (which was the same in Canada) was that
although a cause of action merges in a local judgment, a foreign judgment does not merge
nor efface the underlying cause of action. Therefore, there was no basis for suggesting it
would merge or efface an arbitral award which it confirms.
In Dicey and Morris, The Conflict of Laws, 11th ed., the learned authors also discuss
this issue. They point out first that the question whether the award has merged in the
judgment on the award is to be determined by the lex fori of the enforcing court. In
England, the doctrine of non-merger in relation to foreign judgments has been abolished
by statute, so that although the authors take the view that as a matter of policy the entry
of judgment abroad on the award for the purposes of enforcement should not bar enforce-
ment of the award in England, in fact the effect of merger may be that only the judgment
may be enforced there (pp. 564-5).
The new law of Ontario on the enforcement of foreign commercial arbitral awards is
the International Commercial Arbitration Act, including its Schedule, the Model Law.
Article 35 makes mandatory the recognition and enforcement of an award upon compli-
ance with that article, and subject to the grounds for refusal set out in art. 36. There is no
definition of “arbitral award” in the articles of the Model Law which apply to foreign
awards. However, read in the context of arts. 35 and 36, the arbitral award is the award of
the arbitrator or of the arbitration tribunal itself. Nothing in those articles suggests that
if an award has been confirmed by a court order or judgment in the jurisdiction where
the award was made, it will not then be enforced in Ontario.
It is clear that any such bar to enforcement would create a gaping hole in the scope of
the Act and in the assistance and encouragement it is able to offer to those who wish to
use the mechanism of international commercial arbitration with relative ease and with
confidence in the enforcement procedure.
The Model Law recognizes the possibility of court involvement after the award in art.
36(1)(a)(v) which provides that one ground for refusal of recognition or for a stay of the
recognition proceedings is if “the award has not yet become binding on the parties or has
been set aside or suspended by a court of the country in which, or under the law of which,
that award was made.”
As the grounds set out in art. 36 including art. 36(1)(a)(v) are discretionary, it is within
the discretion of the Ontario court, that is, the enforcing court, to recognize and enforce
the arbitral award even where it has not become binding or has been set aside by a court
in the jurisdiction of the award. It would be anomalous indeed if an Ontario court were
precluded from enforcing a confirmed arbitral award under the Model Law, but allowed
to enforce an award that no longer exists in its “home jurisdiction” because it has been
set aside.
The respondent argues that if in accordance with the law of Georgia the award has
merged in the Georgia judgment, then there is no award to enforce and the Ontario Act
can have no initial application. The court was referred to some commentary in Russell on
Arbitration (p. 368) and in Domke on Commercial Arbitration, revised ed. (1990), cumu-
lative supplement (p. 506), suggesting that in many states of the United States the award
does merge in the confirming judgment, possibly precluding further action on the award.
However, the respondent has not brought evidence before the court to suggest and
prove that the confirmatory judgment of the Georgia court had the effect of effacing the
underlying award, rather than being just a common procedure for obtaining enforcement
of the award in Georgia. At the end of argument there was a request for an adjournment
for the respondent to make further inquiries and, if so advised, to bring further evidence
before the court on the Georgia law. As there had already been ample opportunity to put
relevant evidence before the court including evidence to raise a triable issue, the adjourn-
ment was denied. Furthermore, the effect of any such evidence is unclear when, as set out
in Dicey and Morris, op. cit., it is the lex fori, i.e., the law of Ontario, which determines
whether the award has merged for the purpose of recognition and enforcement in Ontario.
The doctrine of merger is not addressed in the Ontario Act implementing the Model
Law, nor do the two commentaries on the law referred to in s. 13 of the Act raise the issue
of the effect of a confirmatory judgment on the existence of the award for the purpose of
enforcement. The purpose of enacting the Model Law in Ontario and in other jurisdictions
is to establish a climate where international commercial arbitration can be resorted to
with confidence by parties from different countries on the basis that if the arbitration is
conducted in accordance with the agreement of the parties, an award will be enforceable
if no defences are successfully raised under arts. 35 and 36.
The decision in the Stolp case denying direct enforcement of a foreign award and
requiring a foreign judgment confirming the award, is directly contrary to the Model Law
which, in effect, overrules it for foreign commercial arbitration awards. There is no basis
or reason to give further effect to part of the underlying rationale for that decision, the
doctrine of merger of the award in a confirmatory judgment.
Following on the merger argument, the respondent made many submissions attacking
the enforceability of the Georgia judgment. The applicant has clearly not sought to enforce
that judgment as its application is brought pursuant to the Ontario and federal Acts for
enforcing foreign arbitration awards. Therefore there is no need to deal with those issues
raised by the respondent.
(3) Outstanding Counterclaim

One of the remedies sought by the respondent was a stay of the application to allow the
respondent to pursue a counterclaim through further arbitration in Georgia or by way of
action or counterclaim in the within proceeding in the courts of Ontario. Since the argu-
ment of the application, counsel has advised by written correspondence that Gasmac
Canada has withdrawn its claim for arbitration in Georgia. Arbitration is clearly the only
procedure contemplated in the agreement between the parties and it is the only one for
which there was an argument at least, that this court could adjourn this application pursu-
ant to art. 36(1)(a)(v) and (2).
(4) Denial of Natural Justice by Failure to Give Reasons for the Award and
the Applicability of Art. 36(1)(a)(iii)
The issue of natural justice is addressed in art. 36(1)(a)(ii) as one of the grounds for refusal
to recognize or enforce the award. The components of natural justice referred to are notice,
and the ability of the respondent to present its case. There is no issue on these two matters
raised in this case. The respondent had adequate notice of the arbitration and full oppor-
tunity to present its case through counsel with presentation of evidence and legal briefs.
The article does not refer to the lack of reasons for an award, nor to error of law on the
face of the record. The respondent argues that failure to provide reasons may have pre-
cluded the respondent from initiating judicial review proceedings.
It is true that reasons are important for any award as they demonstrate to the parties
that their evidence and arguments have been understood and considered. They also
provide the basis for challenge of a factual or legal conclusion in certain circumstances.
A very significant consequence of the failure to give reasons in the context of the Model
Law, is the inability of the parties to determine if the award deals with a dispute beyond
the terms of the submission (art. 36(1)(a)(iii)), or if the recognition or enforcement of
the award is contrary to the public policy of Ontario (art. 36(b)(ii)).
One of the complaints of the respondent was that the submission included a claim for
indemnity for product liability insurance which insurance was required under a “com-
panion agreement” to the main agreement, and which former agreement did not contain
an arbitration clause. This jurisdiction issue was raised before the arbitrator. Because there
are no reasons, it is unclear whether the arbitrator took jurisdiction over that issue and
whether any portion of the award includes indemnity for the insurance.
I am satisfied that in the circumstances of this case, this failure does not amount to a
ground upon which this court should exercise its discretion to refuse enforcement of the
award for two reasons. The first is because the parties agree that the substantial portion
of the award on the claim represents damages for accelerated royalty payments. Based on
the evidence of the applicant before the arbitrator, $90,437.50 (US) represented accelerated
royalties, overdue sales commissions and overdue consulting fees. That leaves only an
insubstantial part of the award, $748.97 (US), which might be attributable to insurance.
The more important reason is that the insurance issue was submitted and if it was
included by the arbitrator, it was included on the basis that under Georgia law the com-
panion agreement involved matters which came within the scope of the arbitration clause
in the main agreement. Under art. 36(1)(a), the burden was on the respondent to provide
proof that under Georgia law, which is the governing law of the agreement, the arbitrator
was incorrect in this conclusion. To the extent that we have any evidence of Georgia law
on the point, it is to the contrary and is contained in the confirmatory judgment of the
Georgia court.
The same analysis holds true on the complaint by the respondent that the arbitrator
acted beyond his jurisdiction and beyond the terms of the agreement by including attor-
neys’ fees in the award, and by accelerating the royalty payments when the contract
provided that they were payable over five years. The arguments were made to the arbitra-
tor, and in the case of the accelerated payment, also to the Georgia court. They each
applied Georgia law and concluded that both the acceleration and the inclusion of
attorneys’ fees were not inappropriate. Because it is Georgia law which governs, the
respondent must provide to this court evidence of Georgia law if it wishes to demonstrate
that the award dealt with matters not properly within the submission.
The failure to give reasons, although less helpful to the parties, is not on its own a
ground for refusing to enforce this award, nor has the respondent satisfied the onus upon
it to rely on art. 36(1)(a)(iii).
(5) Public Policy: Article 36(1)(b)(ii)

The respondent submits that the public policy of Ontario should be more broadly con-
strued when a court is reviewing an arbitral award as opposed to the judgment of a foreign
court, and that this court should be prepared to look more closely at the merits underlying
the award decision, in exercising its discretion to refuse to recognize an award. In par-
ticular, the respondent argues that the acceleration of royalty payments for breach of
contract is contrary to the law of Ontario, and that this error of law is contrary to the
public policy of this province.
The concept of public policy in the context of impeachment of a foreign judgment was
discussed in the case of Four Embarcadero Center Venture v. Kalen (1988), 27 CPC (2d)
260, 65 OR (2d) 551, 10 ACWS (3d) 9 (HCJ). There the respondent also wished to chal-
lenge the foreign judgment on the merits and invoked the public policy ground as the
basis for so doing. The court rejected the argument (pp. 288-90):
I agree that in the final analysis it is for the trial judge to decide, inventively or not, whether
the circumstances of this case call for refusal to enforce the rights and obligations created by
the foreign Court on the grounds that to do so would be contrary to the public policy of
Ontario, but the defendant must do more than raise the public policy as an issue. He has not
done so. What he intends is to urge upon the Court that the foreign judgment ought not to
be enforced because the plaintiffs had no valid claim against him on the merits and that the
judgment awarded by default without trial of the merits is wrong. In my opinion the law as
I have defined it on the authorities has been conclusively settled against that argument.
Having regard to the state of the law, I can see no justification for the Court reaching the
conclusion that enforcement in this action would be contrary to public policy on the ground
that the California judgment was wrong, or that it did not proceed to trial on the merits, or
that the defendant had a good defence on the merits if they had been adjudicated in a full
trial. To do so would be tantamount to the Court rejecting what has, for a century and a half,
been established in this jurisdiction as fundamental common law principles. The subject
matter (merits) on which the defendant seeks to have discovery is irrelevant.
Mr. Pattillo supports his argument on the public policy ground by reference to the writ-
ings of learned jurists on this subject, viz., Castel op. cit. p. 153 and McLeod op. cit. p. 620.
The authors’ comments essentially outline the principle that the scope of public policy is
never closed and may be extended by the Court of the forum as the circumstances require.
That states no more than trite law or truism. There is no suggestion that any of the above
factors urged in this case would justify such an extension. Both authors refer to Read, p. 292,
in drawing the principle that the forum ought not to enforce the judgment for the payment
of money if action on the original claim could not be maintained because of illegality under
the law of the law district where enforcement is sought. Professor McLeod puts it at p. 621
that the public policy prohibition ought to be invoked only if the judgment involves an act
that is illegal in the forum or where the action involves acts repugnant to the orderly func-
tioning of the social or commercial life of the forum. An obvious example would be the
enforcement of a gambling debt which would be illegal in Ontario. No such element is
asserted in the case at Bar, which, as I have said is essentially that the California judgment
is wrong or is a breach of natural justice.
The June 1985 Report also gives some guidance on the intended scope of the public
policy ground for refusal of recognition (p. 63):
296. In discussing the term “public policy,” it was understood that it was not equivalent
to the political stance or international policies of a State but comprised the fundamental
notions and principles of justice. …
297. … It was understood that the term “public policy” which was used in the 1958 New
York Convention and many other treaties, covered fundamental principles of law and justice
in substantive as well as procedural respects. Thus, instances such as corruption, bribery or
fraud and similar serious cases would constitute a ground for setting aside. It was noted, in
that connection, that the wording “the award is in conflict with the public policy of this State”
was not to be interpreted as excluding instances or events relating to the manner in which
an award was arrived at.
The concept of imposing our public policy on foreign awards is to guard against
enforcement of an award which offends our local principles of justice and fairness in a
fundamental way, and in a way which the parties could attribute to the fact that the award
was made in another jurisdiction where the procedural or substantive rules diverge
markedly from our own, or where there was ignorance or corruption on the part of the
tribunal which could not be seen to be tolerated or condoned by our courts.
It is true that arbitral awards have been viewed with less confidence than judgments
of a court because the procedures of the courts are more regulated and standardized, and
judges are sworn to uphold those procedures and to apply the law, while the qualifications
and training of arbitrators may diverge greatly. And it is of concern to a court in this
jurisdiction that a party to a foreign arbitration may feel that justice was not done or that
the award is perverse in law.
However, if this court were to endorse the view that it should reopen the merits of an
arbitral decision on legal issues decided in accordance with the law of a foreign jurisdic-
tion and where there has been no misconduct, under the guise of ensuring conformity
with the public policy of this province, the enforcement procedure of the Model Law
could be brought into disrepute.
A similar sentiment was expressed by the United States Court of Appeals Second
Circuit in the case of Waterside Ocean Nav. Co. Inc. v. International Nav. Ltd., 737 F2d 150
(1984):
This defense must be construed in light of the overriding purpose of the Convention, which
is “to encourage the recognition and enforcement of commercial arbitration agreements in
international contracts and to unify the standards by which agreements to arbitrate are
observed and arbitral awards are enforced in the signatory countries,” … Thus, this court has
unequivocally stated that the public policy defense should be construed narrowly. It should
apply only where enforcement would violate our “most basic notions of morality and justice.”
And see, for example, the analysis of the British Columbia Court of Appeal in Quintette
Coal Ltd. v. Nippon Steel Corp., [1991] 1 WWR 219, 50 BCLR (2d) 207, 23 ACWS (3d)
531 (CA).
In this case, the respondent had a full hearing and full argument in front of the arbi-
trator. The arbitrator did not accept its evidence or its position on the law. The parties
agreed to submit all disputes to arbitration in Georgia and that Georgia law would apply.
There is precedent in our law for the acceleration of future payments as damages for
anticipatory breach, subject to the duty to mitigate (for example, in commercial leases:
Highway Properties Ltd. v. Kelly Douglas & Co. (1971), 17 DLR (3d) 710, [1971] SCR 562,
[1972] 2 WWR 28), so that the concept of acceleration without previous agreement cannot
be said to be, per se, contrary to the public policy of Ontario. There is no basis in these
circumstances for this court to direct the retrial of the issues on the merits.
Conclusion
The award of the arbitrator filed with this court is therefore recognized by this court under
art. 35 of the Ontario Act Schedule, and may be enforced in accordance with s. 11 of that
Act.
If the parties wish to attend or make written submissions as to the costs of this applica-
tion, they may do so within two weeks of the date of release of these reasons. Otherwise,
costs shall follow the event.
Application granted.
V. Selected Bibliographical References 503
V. SELECTED BIBLIOGRAPHICAL REFERENCES

Berryman, Jeffrey. “Cross-Border Enforcement of Mareva Injunctions in Canada” (2005) 30
Adv Q 413.
Black, Vaughan. “Commodifying Justice for Global Free Trade: The Proposed Hague Judg-
ments Convention” (2000) 38 Osgoode Hall LJ 237.
Black, Vaughan. “Enforcement of Foreign Non-Money Judgments: Pro-Swing v. Elta” (2006)
42 Can Bus LJ 81.
Briggs, Adrian. “Crossing the River by Feeling the Stones: Rethinking the Law on Foreign
Judgments” (2004) 8 SYBIL 1.
MacDonald, Ken. “A New Approach to Enforcement of Foreign Non-Monetary Judgments”
(2006) 31 Adv Q 44.
Mazey, Edward. “The Enforcement of Labour Orders Outside the Jurisdiction of Origin” (2001)
59 UT Fac L Rev 25.
Monestier, Tanya J. “Foreign Judgments at Common Law: Rethinking the Enforcement Rules”
(2005) 28 Dal LJ 163.
Monestier, Tanya J. “Jurisdiction and the Enforcement of Foreign Judgments” (2013) 42 Adv Q
107.
Monestier, Tanya J. “Lepine v. Canada Post: Ironing Out the Wrinkles in the Interprovincial
Enforcement of Class Judgments” (2008) 34 Adv Q 499.
Oppong, Richard Frimpong. “Enforcing Foreign Non-Money Judgments: An Examination of
Some Recent Developments in Canada and Beyond” (2006) 39 UBC L Rev 257.
Pitel, Stephen GA. “Enforcement of Foreign Judgments: Where Morguard Stands After Beals”
(2004) 40 Can Bus LJ 189.
Pitel, Stephen GA. “Enforcement of Foreign Non-Monetary Judgments in Canada (and
Beyond)” (2007) 3 J Priv Intl L 241.
Saumier, Geneviève. “Competing Class Actions Across Canada: Still at the Starting Gate After
Canada Post v. Lepine?” (2010) 48 Can Bus LJ 462.
Saumier, Geneviève. “The Recognition of Foreign Judgments in Quebec: The Mirror Crack’d?”
(2002) 81 Can Bar Rev 677.
Saumier, Geneviève. “USA – Canada Class Actions: Trading in Procedural Fairness” (2005) 5:2
Global Jurist Advances 1.
Walker, Janet. “Beals v. Saldanha: Striking the Comity Balance Anew” (2005) 5 Can Intl Lawyer
28.
Walker, Janet. “Recognizing Multijurisdiction Class Action Judgments Within Canada: Key
Questions—Suggested Answers” (2008) 46 Can Bus LJ 450.
PA R T F O U R
Choice of Law: General

CHAPTER NINE
Choice of Law Methodology
I. Choice of Law as Part of the System of Private International Law . . . . . . . . . . . . . . . . . . . 508

A. Practical Function of Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
B. Choice of Law as an Expression of Theories of Private International Law . . . . . . 509
II. The Standard or Classical Approach to Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
A. Nature of the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
1. Components of the Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
2. Multilateral and Unilateral Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . 513
3. Reference to More Than One Legal System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
B. The Process of Applying the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
1. Establishing the Choice of Law Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
2. Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516
3. Following the Connecting Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517
4. Application of the Legal Rule Indicated by the Choice of Law Rule . . . . . . . . 519
III. Perceived Shortcomings of the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
A. Arbitrariness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
B. No Account Systematically Taken of Real Conflict of State Policies That
Underlie the Choice of Law Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
C. No Account Systematically Taken of International and
Interprovincial Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
IV. Alternatives to the Classical Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
A. Common Characteristic: Issue Particularized Rather Than Categorized . . . . . . . 536
B. Proper Law Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
C. Governmental Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537
D. Principles of Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540
E. The Second Restatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
F. The “Better Law” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
G. Substantive Rules for Multistate Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
H. Defenders of the Traditional System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
V. The Present Orientation of Canadian Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
The purpose of this chapter is to place choice of law in its context in private international law
as a whole, to examine the traditional method for choice of law used in Canadian law, and to
examine the shortcomings of the traditional method. Newer alternative methods are out-
lined, and the chapter concludes with a brief indication of the current methodological ori
entation of Canadian choice of law. The discussion of choice of law theory in this chapter
507
508 Chapter 9 Choice of Law Methodology
builds on material in Chapter 2. The analysis of the actual technique of choice of law, both
traditional and new, introduces the chapters that follow this one, which are, for the most
part, concerned with choice of law.
I. CHOICE OF LAW AS PART OF THE SYSTEM OF PRIVATE

INTERNATIONAL LAW
A. Practical Function of Choice of Law

Choice of law is an integral part of all legal systems, both in practical terms and in terms of
conceptual structure. To all intents and purposes, it is a practical necessity because no rea-
sonably developed system of justice could function with a principle of strict territoriality of
law. Under such a principle, every individual and every corporation that visited, took up resi-
dence, or undertook transactions in a country would find that all their rights and obligations,
without exception, were subject to the law of that country as far as that country’s courts
were concerned. People who came in married would be regarded as unmarried as soon as
they crossed the frontier, if the local marriage law was different from the one under which
they had married. Title to property they owned would be lost, if the law under which they
had obtained title differed from the local rules for transferring title. Contracts they had made
under another law, if it was different from the local law, could be invalidated just because the
dispute ended up before a local court.
So, from the Middle Ages, when the laws of western Europe started to emerge as a patch-
work of differing local customs, lawyers have developed legal rules for choice of law. These
are rules according to which, where it is felt to be more consonant with justice, people’s
rights and obligations can be determined by reference to a law other than that of the forum
(the country in which a court sits). These rules allow people and property to move from one
country or province to another, and to undertake transactions that straddle borders, without
having the disparities in local laws undermine their personal status or the security of their
rights, at least not without good reason. So a marriage that is valid under the law of the
country where it is celebrated usually stays valid in the eyes of other countries to which the
parties may move. An interest in property that is duly acquired under the law of one country
is usually not divested by the owner of the property moving to another country. An act that
is perfectly legal in the country where it is done is usually not turned into a tort just because
the person who did it can be dragged before the court of another country, and so on.
Some areas of private law can do without choice of law rules. One reason is that in certain
matters the court’s jurisdiction may be such as to exclude disputes that are closely linked to
another country’s law. The prime example is the granting of a divorce. As is explained in
Chapter 18, nobody can petition a Canadian court for a divorce unless the petitioner or the
respondent has been ordinarily resident in the province for at least a year immediately pre-
ceding the commencement of the proceeding. Because there is bound to be at least that
much connection with Canada, there is no felt need to apply any law other than Canadian
law to the granting of the divorce or the corollary matters of maintenance and custody. In
other words, no choice of law rule has ever been developed for the granting of divorces.
Another reason for this, of course, is that the right to a divorce (or the right to resist a divorce)
is not seen as something that vests in a person like a right of property or a contractual right.
I. Choice of Law as Part of the System of Private International Law 509
The fact that the couple may have lived most of their life together in another country, whose
grounds for divorce are more restrictive or more generous than Canada’s, is not seen as giv-
ing either party a right to invoke the law of that other country in preference to Canada’s.
Another reason why choice of law is virtually excluded in some areas is that the law on
these subjects is internationally uniform, or nearly so. This uniformity can be established by
a multilateral treaty like the Warsaw and Montreal Conventions dealing with airlines’ liability
for death, injury, or property damage suffered on an international flight: see the Carriage by
Air Act, RSC 1985, c C-26 or the Vienna Convention on International Sales of Goods: see the
International Sale of Goods Act, RSBC 1996, c 236 and its equivalent in other provinces and in
the federal jurisdiction. These cover certain specific types of international transactions.
The practical importance of choice of law varies with the area of law. In a strongly cultur-
ally based area like family law, for example, the difference between legal systems is often
far-reaching. In the law of obligations, general rules are broadly similar among legal systems,
but the differences may still be vital in particular cases. For instance, the general law of
contract may not be very different as between two jurisdictions, but consumer protection
or securities legislation may differ extensively. Similarly, even if their general concept of what
is tortious may not differ much, two jurisdictions may have radically different approaches to
damages. Limitation periods vary greatly among jurisdictions and so are a frequent source
of conflicts problems. In many commercial transactions the differences between legal sys-
tems are likely to be modest, because commercial laws tend to converge in the interests of
the business community. Moreover, commercial parties can manage the choice of law issues
to a large extent through the principle of party autonomy—that is, their ability to agree in
advance on which law will govern their transaction: see Chapter 13.
Choice of law rules themselves can differ, of course, from one system of private inter-
national law to the next. This, along with differences in procedural law, means that the ability
to litigate a dispute in one jurisdiction rather than another may in practice be a more crucial
issue for the parties than choice of law itself. As is discussed in Chapter 7, the choice of forum,
too, is something the parties can agree on in advance, although courts may override such
agreements in some circumstances.
B. Choice of Law as an Expression of Theories of Private International Law

Aside from its practical function, choice of law is intimately bound up with the whole theor-
etical and conceptual framework of private international law. This is truer of choice of law
than it is of the other major components of private international law. Rules of jurisdiction, in
civil law to the same extent as in common law countries, have typically been as much the
byproduct of rules of procedure as the logical expression of underlying principles of justice.
The enforcement of foreign judgments, at least as far as the common law was concerned,
was in turn conceived as an extension of the rules of jurisdiction of the domestic courts. But
choice of law has tended to be a structure erected on the foundation—shifting over time, it
is true—of basic perceptions of what private international law is about. The judges, who by
and large are the ones who have created the field of choice of law, have usually worked with
little or no legislative guidance. Compared with most areas of domestic law, the volume of
decisions has been small. The result has been a set of rules that has been shaped fairly dir-
ectly by the judges’ views of the way in which the legal systems of different countries (or
provinces) ought, in principle, to relate to one another.
Throughout the history of private international law, it has been choice of law that has
attracted the lion’s share of scholarly interest. Each major theorist in turn has sought to
explain how choice of law can be brought back to certain first principles. Until early in this
century the almost universal opinion was that the source of choice of law lay in the territor-
iality of legal rules. There were many schools of thought about how this territoriality trans-
lated into a system of choice of law, but few doubted that territoriality, in one way or
another, was the basis of the system.
Thus the “statutist” theories of mediaeval Italy, taken up by renaissance France, classified
all legal rules as “real” or “personal.” The former determined the rights relating to things,
such as property, within the territory of the sovereign; the latter determined the personal
status and rights of persons who were subject to that sovereign. Here, the territorial opera-
tion of the law was seen as mediated through the dichotomy of real and personal rules, a
dichotomy that proved inadequate to deal with important areas of law, such as obligations.
Later on, in the 19th century, as international commerce flourished and Europeans moved
about the globe, territorial theories became more elaborate. For example, the German
scholar Savigny developed a highly influential theory of choice of law at the centre of which
was the idea that every “legal relation” had a natural “seat” in a particular territory and was
therefore subject to the law of that territory.
Theories about how choice of law should be done by the courts are closely linked to
theories about why courts should apply any law other than their own. As long as it was
believed that choice of law was a logical imperative, dictated by the nature of law and of its
territorial operation, it was possible to believe that the courts of each country were bound
to apply the rules of other countries in defined cases. But the latter idea was hard to square
with another aspect of the territoriality of law—namely, the independent sovereignty of
each state. Dutch scholars of the 17th century were the first to lay stress on the sovereign
right of the state to have its courts apply whatever law it pleased. These scholars accepted
that the laws of other countries might be, and routinely were, applied, but explained this on
the ground of “comity.” Each sovereign state chose to respect the laws of other states and
apply them in cases where that was appropriate, and expected other states to do the same
in return. This was neither a matter of obligation nor of logical imperative, but of the enlight-
ened self-interest of a state in promoting a viable private international legal order.
Once it was accepted that applying foreign law was a matter of sovereign free choice,
choice of law theory no longer had to justify itself by reference to logical first principles
rooted in notions of the territoriality of law. In other words, there was no conclusive reason
why choice of law decisions could not be based on pragmatic rather than on doctrinal
grounds. But the appeal of doctrine remained strong. For instance, the mid-19th century
author (and US Supreme Court justice) Joseph Story affirmed, “It is plain that the laws of one
country can have no intrinsic force, proprio vigore [by virtue of their own operation], except
within the territorial limits and jurisdiction of that country”: Story at 11, §7. On the other
hand, Story thought that the same concept of sovereignty implied a system of choice of law
rules based on the notion of vested rights. This is the idea that rights “vest” in a person by
reason of that person living, doing something, or owning something in the territory of a state.
As Story put it, at 28, §18: “[T]he laws of every state affect, and bind directly all property,
whether real or personal, within its territory; and all persons who are resident within it …
and also all contracts made and acts done within it.” It was the duty of the courts to recog-
nize rights that flowed from a foreign law’s “affecting” and “binding” property, persons, or
II. The Standard or Classical Approach to Choice of Law 511
contracts within that country’s territory. The vested rights theory held sway in the United
States until the 1930s and dominated the American Law Institute’s Restatement (First) of
Conflict of Laws (1934). Less dogmatically, it also marked English private international law.
The fundamental weakness of the vested rights theory, as of other choice of law systems
based in one way or another on the territorial operation of law, is that all such systems are
ultimately circular. For example, the Restatement (First) thought that if two parties made a
contract in a particular country, that country’s law necessarily governed their obligations.
The parties’ acts placed the contract within the territorial jurisdiction of that country: see
§332. But the only reason that that country’s law “must” govern their obligations is that the
choice of law rule says it must. It is impossible to demonstrate logically that the place of
making a contract (or any other manifestation of the contract) is and must be the critical
factor in associating the contract with a particular legal system. It may make sense to choose
the law of the place of contracting, the place of performance, or some other aspect of the
contract, but that choice cannot be claimed as inherent in the nature of a contract. A satisfy-
ing explanation for the choice must rest on other grounds—for example, convenience, party
expectations, or the connection of the contract with the economy of a country—and that
takes choice of law out of the realm of abstract principle and into the realm of pragmatic
pros and cons.
This has been the movement of choice of law theory for most of this century. The greatest
scholarly impetus for this shift has come from American scholars, beginning with the legal
realists of the 1920s and ’30s. Their most notable representative was W.W. Cook, who suc-
ceeded in demolishing the intellectual edifice of vested rights and the Restatement (First)
(see Cook) and in clearing the way for the alternative choice of law theories that have flour-
ished since. Some of these will be discussed below.
However, despite the profound changes in choice of law theory during the past 90 years,
the actual rules according to which choice of law decisions are made in the Anglo-Canadian
system have remained amazingly stable. That is because they have given reasonably satis-
factory results. Whatever their origin may have been—and they were always more pragmati-
cally oriented than the American rules of the Restatement (First)—they have managed to
hold their own, even in an increasingly pragmatic theoretical environment. American
scholarship since the 1960s has turned against rules of the traditional type on the ground
that the methodology itself is fundamentally at odds with a truly rational approach toward
choice of law. This criticism has had a good deal of effect in the courts of the United States,
but only a marginal impact on the Anglo-Canadian choice of law system. So, before examin-
ing that critique, and the alternative methodologies that have been proposed to replace
them, the traditional choice of law method must be examined in some detail.
II. THE STANDARD OR CLASSICAL APPROACH TO CHOICE OF LAW

A. Nature of the Choice of Law Rule
1. Components of the Rule
Choice of law principles have traditionally been expressed in rules that say that a particular
type of legal issue is to be determined according to the internal law of a country (which in
this context means law district) with which the case has a defined connection. (By “internal
law” is meant the law that applies to a case arising entirely within that country.) This may be
called the classic form of choice of law rule because it has been the basis of both civil and
common law systems of choice of law for the past 150 years. It is still, with very few excep-
tions, the standard form of choice of law rule in Canadian law. Here are some examples:
Formal validity of a marriage is governed by the law of the country in which the marriage is
celebrated.
Capacity to enter into a marriage is governed by the law of the country in which the party said to
be incapable is domiciled. (The legal position is actually more complicated, but this will do for the
present purpose.)
Liability in tort is governed by the law of the country in which the tort was committed. (Also a
simplification.)
A testamentary disposition is essentially valid if it complies with the law of the country in which
the testator was domiciled when she died.
Matters of judicial procedure are governed by the law of the forum (the country in which the
court hearing the case is sitting).
As emphasized, each choice of law rule identifies a category of legal issue—for example,
formal validity of a marriage or liability in tort—and says that an issue falling under that cat-
egory must be decided according to the law of a country designated by means of a “con-
necting factor”—place of celebration of the marriage, domicile, place of commission of the
tort, or place in which the case is being heard. The designated legal system may be that of
another province, a foreign nation, a subdivision of a foreign nation (such as a state of the
United States), or the forum itself.
Note that one connecting factor is somewhat different from the others in that it does not
depend on identifying one or more relevant geographical or legal links between the facts
and a particular jurisdiction. This connecting factor is party autonomy. The court deciding
on the choice of law gives effect to the parties’ intention, expressed in advance, that a par-
ticular system of law will apply to their legal act or transaction. The main example of party
autonomy is in choice of law relating to contracts, but there is some scope for it in relation
to other deliberate legal acts, such as making a will or setting up a trust.
It is important to realize that, as a practical matter, a choice of law rule comes into play
only if a party to the legal dispute (1) pleads that an issue should be decided by a law other
than that of the forum (a “foreign” law, which may be that of another province); and
(2) proves, as a fact, that the outcome of the issue is different under the foreign law than it is
under the law of the forum (the lex fori). If none of the parties to a dispute raises the question
of choice of law, the court must simply decide the issue according to the rules of its own
legal system. The same applies, even if a party does rely on a foreign legal rule, if that party
fails to satisfy the court as to what the relevant foreign legal rule is or how it applies to the
facts. Again, the court must apply its own law: see Chapter 10. Without doubt, most potential
choice of law issues are never raised, either because the foreign law would just lead to the
same result as the lex fori, or because it is not worth anybody’s while to marshal the evidence
(usually affidavit or viva voce testimony of an expert) to prove the foreign legal rule.
2. Multilateral and Unilateral Choice of Law Rules

Choice of law rules, such as those in the examples above, are sometimes described as “multi
lateral,” in the sense that they determine the respective fields of application of the lex fori
and of foreign legal systems. They function as a kind of umpire, giving the nod to a rule of
the lex fori or a rule of foreign law based on the legal systems to which the connecting factor
in the rule points. This distinguishes them from “unilateral” choice of law rules, which indi-
cate only when one country’s (usually the forum’s) internal legal rule should apply to a par-
ticular issue, without saying anything about when any other country’s internal legal rule
should be applied.
Obviously, unilateral choice of law rules are inadequate to be the basis of a complete
choice of law system. If a case falls outside the scope of application of the relevant country’s
rule, as indicated by the unilateral choice of law rule, there is nothing to tell you which other
country’s rule ought to apply.
3. Reference to More Than One Legal System

Not all choice of law rules, however, relegate a category of issue exclusively to one defined
legal system. Some are rules of alternative reference. For example:
A testamentary disposition is formally valid if that part of the will complies with the require-
ments of the law of any of the following countries: that in which the testator was domiciled when
she died; that in which the testator was domiciled when she executed the will; that in which the will
was executed; that of which the testator was a national [citizen]; or that in which the property
disposed of was located.
This is by way of example only; the actual rule differs from province to province, depending
on legislation. A rule of this type allows a party to invoke any one of several systems of law
in order to resolve the issue in a particular way—in this example, to uphold the disposition.
Rules of alternative reference are always used to provide various means to a positive out-
come (the validity of some claim or right).
The converse of a choice of law rule of alternative reference is a choice of law rule of
cumulative reference. Such a rule requires a court to apply the rules of two (there are no rules
referring to more than two) legal systems, not as alternatives to each other but in combina-
tion with each other, in the sense that the claim must satisfy the rules of both systems. In
practical terms, the particular legal claim or right fails if it is invalid under either of the two
laws. A rule of cumulative reference is unattractive because it makes a party whose case
happens to be connected with two countries worse off—by having two potential grounds
of failure—than if it were just connected with one country. A notoriously bad rule of this
type long prevailed in the area of torts. A plaintiff had a claim for a tort committed outside
the forum country only if what the defendant did was both actionable as a tort under the law
of the forum and wrongful by the law of the place where the tort was committed. The
Supreme Court of Canada abolished it in 1994: see Tolofson v Jensen, [1994] 3 SCR 1022
(reproduced in Chapter 12). The only area in which rules of cumulative reference may still
survive is family law, where the existence of a legal relationship between two people (such
as parent and child) who are domiciled in different countries may depend on whether the
facts satisfy the tests of the law in both their respective countries: see Chapter 20.
B. The Process of Applying the Choice of Law Rule

The process of applying a choice of law rule is usually analyzed in a quasi-chronological
fashion. First, you characterize the issue—is it within the category of issues to which the rule
applies? Then, you follow the connecting factor to a particular legal system—what is the
country of the place of celebration, domicile, or other relevant factor? Finally, you apply the
law that you find in the country to which the connecting factor has led you. In fact, the
mental process is not as linear as this sequence suggests, but it is a useful way to segregate
the conceptual issues that arise in the traditional choice of law process: see Falconbridge at
37-49 for what is probably the clearest exposition of the steps in the classical method.
Remember that a choice of law problem arises whenever a party asks (or, if the case has
not yet reached a court, might ask) a court to decide an issue by applying a foreign legal rule.
In order to do that, the party must (aside from proving the content of the rule) persuade the
court
1. that there is a choice of law rule, as the party says;
2. that the choice of law rule does embrace, by the category of issues to which it refers,
the foreign legal rule the party relies on (this is “characterization” of the foreign legal
rule);
3. that the choice of law rule, via its connecting factor, does point to the foreign country
in question; and
4. that the choice of law rule should be applied so as to make the foreign legal rule
operate, as the party says, to establish the party’s claim or right.
These four aspects of the process are discussed in turn below.
1. Establishing the Choice of Law Rule

Any party who relies on a foreign legal rule must justify its application by invoking a choice
of law rule. Different legal systems use different approaches to choice of law. For instance,
common law jurisdictions traditionally decide issues relating to personal status—for
example, marriage or legitimacy—by applying the law of the person’s domicile (which, to
simplify somewhat, means permanent residence). Civil law jurisdictions traditionally apply
the law of the country of which the person is a citizen, which may be a completely different
country. So, it is quite possible for a choice of law question to be decided according to
one country’s law if the issue arises in the court of a common law jurisdiction and by another
country’s law if it arises in the court of a civil law jurisdiction. There is no such thing as an
internationally accepted system of choice of law. So the choice of law rule invoked by a party
must be drawn from a specified jurisdiction.
That jurisdiction is, and must be, the forum itself. Choice of law rules, whether judge-
made or statutory, are, in positivist terms, commands to the court by the law-making author-
ities of the court’s own country. The law says to the judge: “Here is the basis on which you
must decide whether to apply a rule of our own internal law or a rule of foreign law to decide
on a particular person’s legal rights. You are not free to apply or not to apply rules of foreign
law as the spirit moves you. You can only apply rules of foreign law if the choice of law rule
says that you can.” The fact that, in reality, Canadian choice of law rules are often framed in
terms that leave a court a great deal of leeway does not alter the fact that they are rules of
law that bind all courts within the relevant Canadian jurisdictions.
In the common law provinces and territories of Canada, and in the federal jurisdiction, the
source of choice of law rules is mostly common law. Partly because of the Supreme Court of
Canada’s ultimate jurisdiction to declare the common law for these jurisdictions, the choice
of law rules are the same among all of them except where legislation has taken the place of
the common law.
Statutory choice of law rules are, so far, relatively rare. Most of them are of the unilateral
type. That is, they define the spatial extent of one country’s—the forum’s—internal legal
rules. They do so by telling a court to apply a particular statutory rule of the forum even to
cases that have connections with a country other than the forum. For instance, in a British
Columbia case, a British Columbia resident had invested in a Toronto real estate project.
When the project’s finances deteriorated, the Ontario developer sued the investor for fur-
ther contributions, which were owed under the terms of the contract of purchase. The
investor asked the British Columbia court to apply a provision of a British Columbia statute
that made such real estate investment contracts unenforceable unless the developer had
provided the investor in advance with a prospectus, which the Ontario company had not
done. The British Columbia Court of Appeal said that the statutory rule had to be applied,
even to this out-of-province investment, if that is what the statute, properly construed,
demanded. If the statute did require the provision to be applied to such a case (which was
for the trial judge to decide), it would be, in effect, a statutory choice of law rule: see Avenue
Properties Ltd v First City Development Corporation Ltd (1986), 32 DLR (4th) 40, 7 BCLR (2d) 45
(CA), included in Chapter 13.
Statutory choice of law rules of the multilateral type, defining the spatial reach of foreign
law as well as of lex fori, are found less often in Canada than the unilateral ones, but they
exist. For instance, s 15 of the Family Law Act, RSO 1990, c F-3, says:
The property rights of spouses arising out of the marital relationship are governed by the inter-
nal law of the place where both spouses had their last common habitual residence or, if there is
no place where the spouses had a common habitual residence, by the law of Ontario.
The UNCITRAL Model Law on International Commercial Arbitration (1985), art 28(2) directs
an arbitral tribunal, where there is no agreement by the parties as to which rules of law will
govern their dispute, to “apply the law determined by the conflict of laws rules which it
considers applicable.” The tribunal is thus directed to choose from among the choice of law
rules that are used in the different legal systems in question. Most Canadian jurisdictions
have modified art 28 so that the arbitral tribunal is not bound to apply “conflict of laws
rules”—that is, choice of law rules employed in the states in question—to determine the
applicable rule of law. Instead, the tribunal “must apply the rules of law it considers to be
appropriate given all the circumstances surrounding the dispute”: International Commercial
Arbitration Act, RSBC 1996, c 233, s 28(3); International Commercial Arbitration Act, RSO 1990,
c I-9, s 6; cf the Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp). In other words, the
choice of law need not be made according to pre-existing conflict of laws rules drawn from
a relevant legal system, but may be guided by the tribunal’s own assessment of the pros and
cons of applying a particular rule of law to the issue. In arbitrations governed by these prov-
inces’ acts, the choice of law process is thus removed from the control of any state’s legal
system and placed in the unfettered hands of the arbitrators.
2. Characterization
A choice of law issue arises because one party says, “The court should apply this particular
rule of the law of country X because that is what the choice of law rule requires,” and the
other party opposes the application of that rule of law. The choice of law rule will be framed,
as we have seen, in terms of a category like, for example, “formal validity of a testamentary
disposition” or “liability in tort.” So an essential link in the party’s chain of argument is that
the particular rule of X law that the party wants the court to apply is indeed a rule relating to
the formal validity of a testamentary disposition, liability in tort, or whatever the terms of the
choice of law rule are. “Characterization” (or “classification,” a synonym) is the decision,
ultimately made by a court, as to how to categorize a particular rule of internal law—
whether a rule of the lex fori or of the law of a foreign country—for the purpose of applying
the court’s choice of law rules. It is sticking a choice of law label on some country’s rule of
internal law.
The characterization of many legal rules is obvious. A rule that a person is liable for delib-
erately striking another is a rule of liability in tort. A rule that a marriage must be solemnized
in a civil ceremony is a rule of the formal validity of marriage. A rule that a will must be
attested by two witnesses is a rule of the formal validity of a testamentary disposition. And so
on. But a fair number of borderline instances can arise. Is a rule that a person under 18 needs
the consent of a parent to get married a rule of capacity to marry (which is the subject of one
choice of law rule) or a rule of the formal validity of a marriage (which is the subject of a dif-
ferent choice of law rule)? Is a rule that damages for pain and suffering are limited to a maxi-
mum of $250,000 a rule of liability in tort (referable to the law of the place of the accident) or
a rule of procedure (referable to the lex fori)? Is a rule that you cannot sue for breach of con-
tract more than six years after the breach a rule of contractual liability or a rule of procedure?
A lawyer or judge confronted with these borderline issues has to decide whether the
internal legal rule in question—regardless of whether the rule is one of domestic or foreign
law—belongs to one category or another. In other words, under which choice of law rule
should the particular internal legal rule fall—the rule about capacity to marry or the rule
about formal validity of marriage? The rule about liability in tort or the rule about proced-
ure? And so forth. Now, according to what principles should that decision be made? If you
are looking at a rule of Transylvanian law, and experts in that country’s legal system tell you
that the rule is one of, say, capacity to marry as far as Transylvania is concerned, is that deci-
sive for the purpose of applying your own choice of law rule relating to capacity to marry?
In many cases the short answer is that, as far as the court doing the characterizing is
concerned, the proper characterization of the legal rule has been decided by precedent
binding on the court. In other words, it is established law in the court’s own jurisdiction that
the choice of law rule referring to “capacity to marry” does, or does not, include a rule like
the Transylvanian one. Since (1) it is the forum’s own choice of law rule that has to be applied
and (2) characterization is, in effect, the interpretation of the scope of that choice of law rule,
it follows logically that (3) characterization must involve the interpretation of the legal cat-
egory according to the meaning given to that category in the forum’s own choice of law
system. To the extent that the category has been defined by precedent, that definition must
prevail. Even if the judge is not constrained by precedent, the judge’s task is to interpret the
category consistently with the pattern of categorization established for other parts of the
forum’s choice of law system.
That said, it is essential to remember three things. The first is that the categories used in
choice of law rules are not arbitrary, abstract categories. They are expressions of the appropri-
ate reach of the choice of law rule. Every choice of law rule has, or ought to have, a rationale,
and the appropriate reach of the rule is the one most consistent with its rationale. The best
example of this is the rule that procedure is governed by the lex fori. The main rationale for
this rule is practical. The rules that form the machinery of justice are an integrated whole, and
it makes sense, when justice is being administered by a court in X, to follow the X judicial
procedures rather than substitute a Y procedure that may not fit well into the X judicial mech-
anism. (There are subordinate rationales, including the expectations of parties, but the prac-
tical one clearly dominates.) So a rule that is an intrinsic part of the machinery of administering
justice should, in principle, be considered procedural, and a rule that is severable from the
judicial machinery should be considered, not procedural, but substantive—for example, a
rule of formal validity of a testamentary disposition, a rule of tort liability, or a rule of capacity
to marry. Characterization is a functional operation, not an abstractly conceptual one.
The second point to remember follows from the first. Since characterization is just the
process of giving an appropriate reach to a choice of law rule, there is no reason why it
should draw its distinctions along any lines other than those appropriate to the particular
choice of law context. Categories used in other legal contexts, even when they are given the
same label as a choice of law category, are framed with different purposes in mind. For that
reason, their boundaries may be drawn differently from the choice of law category that
bears the same name. This is as true when characterizing a rule of domestic law as it is when
dealing with a rule of foreign law.
The clearest example is found in the rule of private international law that a penal law of a
foreign country will not be enforced by a court of the forum. (This is not strictly a choice of
law rule, but a rule that excludes a certain type of foreign legal rule from the ordinary choice
of law system.) The leading case, Huntington v Attrill, [1893] AC 150 (PC) (Ont) (reproduced in
Chapter 4), turned on whether a particular statutory rule in New York, making directors per-
sonally liable for a corporation’s debts, was penal for the purposes of the rule that an Ontario
court cannot enforce a foreign penal law. Evidence was tendered that American courts had
in fact described the law as penal in other contexts. The Privy Council said that this was irrel-
evant. The question was whether the law was penal within the meaning of this particular
rule, which the Privy Council held it was not.
The third and final point is that, although characterization employs legal categories as
the forum conceives of them, what have to be characterized are rules from other countries’
legal systems as well as from the forum. If it is a foreign legal rule that must be characterized,
the court should be alive to the terminological and conceptual differences that may exist
between the foreign legal system and its own. Superficial resemblances may mask funda-
mental differences and vice versa. So a court should take as cosmopolitan a view as possible
when deciding whether a foreign legal rule, in pith and substance (to borrow a constitu-
tional law expression), falls under one or other of the forum’s own choice of law categories:
see Falconbridge at 70.
3. Following the Connecting Factor

The party who wants a foreign legal rule to be applied must not only fit the legal rule into
the category to which the choice of law rule applies (characterization), but must also show
that the choice of law rule’s connecting factor indicates the law of the foreign country in
question. This is a process akin to characterization because, here also, it is the proper mean-
ing of the choice of law rule that is at issue. Once again, it is the private international law of
the forum that logically must supply the meaning of the connecting factor. Only in that way
can the choice of law rule operate consistently with the conceptions that underlie it and are
integral to the lex fori’s choice of law system. A clear example of a court’s saying this is Re
Annesley, [1926] 1 Ch 692. The issue was whether a woman who came originally from England
had made valid testamentary dispositions, and this depended on where she was domiciled
when she died. According to the English definition of “domicile,” the answer was France
because she had lived there for 40 years with no intention of returning to England. If she
were domiciled in France and French law applied, a portion of the dispositions would be
invalid. Those who stood to gain from those dispositions argued she still had to be domiciled
in England because she had never taken the steps necessary to acquire legal domicile (the
French word) in France according to the meaning of “domicile” in French law. (Acquiring
domicile was a prerequisite for citizenship, but she had never applied for French citizenship.)
The judge held that in applying the English choice of law rule based on domicile, it had to be
domicile in the English sense that was the criterion. The fact that she had not acquired
domicile in the French sense was beside the point.
Many cases present no difficulty whatever in applying the connecting factor. This is true
of connecting factors that are based, more or less, totally on a physical fact—like the loca-
tion of property or the place where a clearly discernible event happened, such as the cele-
bration of a marriage or the execution of a will. However, the more the connecting factor is
a legal construct, the more room there is for argument. For instance, the question where
somebody was domiciled at a particular time is notoriously unpredictable because it turns
on the innermost intentions of that person (who, moreover, in many cases, is dead or, if alive,
is disposed to remember those intentions selectively: see Chapter 5. Even as seemingly
straightforward a question as where a tort was committed can be tricky to resolve if the
defendant’s tortious act or omission took place in one country but harmed the plaintiff in
another: see Moran v Pyle National (Canada) Ltd, [1975] 1 SCR 393, 43 DLR (3d) 239 (repro-
duced in Chapter 6).
Even more difficult, in some respects, is a connecting factor that itself is a composite of
connections, the best example being the test used to find the proper law of a contract if the
parties to the contract did not agree on it. That test is usually put in terms of the system of
law with which the contractual transaction had its “closest and most real connection.” Apply-
ing that test means evaluating all the circumstances relating to the transaction, including the
domicile, residence, or place of business of the parties; the place of performance; the terms
in which the contract was drafted; the fact that similar contracts were made with people in
a number of countries; and many more: see Chapter 13. This is often described as a “centre
of gravity” (or, more pejoratively, “contact-counting”) test. The relative weight given to each
of the heterogeneous collection of factors is obviously more a matter of instinct than of
rational calculation. The only reason the test works is that it is flexible and avoids the arbi-
trariness of determining the choice of law issue by single factors like where the contract was
made or where it was to be performed.
If people or things have moved around in the course of the events giving rise to the dis-
pute, it may be crucial to know as of what date the connecting factor is to be determined:
see the discussion in Section II.B.4.c.iii, “The Time Element,” below.
4. Application of the Legal Rule Indicated by the Choice of Law Rule

a. Generally
Even if the relevant choice of law rule otherwise indicates that a certain foreign internal legal
rule is applicable to a case, there are still a number of reasons why this may not happen.
Some of these are exceptions to the application of a choice of law rule and others are due to
ambiguities that are inherent in the choice of law system itself.
b. Exceptions to the Application of a Choice of Law Rule

The major exceptions to a choice of law rule take two forms. One is simply the existence of a
more specific choice of law rule that mandates a different result. Usually, the more specific
choice of law rule takes the form of a statutory directive of the lex fori. For example, in the
Avenue Properties case discussed above, the general choice of law rule applicable to con-
tracts said that the contract by which the British Columbia resident invested in the Ontario
development was governed by Ontario law, as the proper law of the contract. But, as we saw,
the Court of Appeal was prepared to “trump” this general choice of law rule with a more
specific one contained in a British Columbia statute, making the British Columbia prospectus
requirement applicable even to vendors of real estate investments located out of province.
If the British Columbia legislature, in effect, commanded that this rule should prevail, the
statutory choice of law rule (a “unilateral” rule, as we saw) would, to that extent, displace
Ontario law as the law by which the parties’ rights were to be decided.
The other exception is that the foreign rule of law may be barred from application by
being a rule of penal law, a rule of tax law, or against the public policy of the forum. Public
policy, in this context, is a narrow concept referring to the fundamental moral or social val-
ues underlying the forum’s legal system: on penal and revenue laws and public policy, see
Chapter 4.
c. Ambiguities in the Application of a Choice of Law Rule

i. Renvoi
Renvoi (French for “looking back”) is a controversial aspect of the classical choice of law
method. It stems from an ambiguity in the type of conflicts rule that says, “Issue X is governed
by the law of Y.” What is meant by applying the “law of Y”? It could mean applying the “domes-
tic” law of Y—that is, the rules of law that a Y court would apply to a case where there was no
foreign element. Or it could mean applying the “whole” law of Y, including the conflicts rules
that a Y court would apply to the actual case, which does involve elements foreign to Y. The
following case is the fullest consideration that any common law court has given to renvoi.
Neilson v Overseas Projects Corp of Victoria Ltd

(2005), 223 CLR 331, [2005] HCA 54 (footnotes incorporated)
[Barbara Neilson’s husband was employed by Overseas Projects Corp (OPC) to work on
a project in Wuhan in the People’s Republic of China (PRC). The family lived in Wuhan
in an apartment provided by OPC. Ms. Neilson fell down the stairs in the apartment. She
claimed that the stairs were dangerous and that OPC was in breach of a tort duty of care
toward her to take reasonable care for her safety. The duty of care and breach of it by OPC
were found at trial and damages were assessed. The legal point on which the case was
appealed to the High Court was the effect the trial judge ought to have given to the second
sentence in art 146 of the General Principles of Civil Law of the PRC (1987). Article 146
provided:
With regard to compensation for damages resulting from an infringement of rights, the law
of the place in which the infringement occurred shall be applied. If both parties are nationals
of the same country or domiciled in the same country, the law of their own country or of
their place of domicile may also be applied.
The reason this mattered was that the General Principles also included (in art 136) a
one-year limitation period for actions for compensation for bodily harm. This period had
run when Ms. Neilson brought her action in Western Australia, the family’s home state.
Under Australian conflicts principles, the law governing tort liability was the law of the
place where the tort occurred (lex loci delicti), without any exception. The Canadian rule
is the same but, at least in international cases, has some room for exceptionally applying
another system of law that is more closely connected with the facts and the issues. Fol-
lowing the lex loci delicti rule, and treating limitations rules as substantive rather than
procedural (which Australian and Canadian conflicts rules now do), the law of the PRC
applied to the limitations issue. But the question then arose—what was included in “the
law” of the PRC?
The plaintiff argued that the law of the PRC to be applied included the rule in the
second part of art 146, and adduced expert evidence that, the plaintiff said, showed that
a court in the PRC would apply Australian law to the case because both the plaintiff and
the defendants (OPC and its liability insurer) were “of the same country or domiciled in
the same country.” This meant that the limitation law of “Australia” would be applied,
which, it was assumed, meant the limitation period of Western Australia and of Victoria,
where OPC was based. (The limitation period was the same in the laws of the two states.)
In short, the plaintiff contended that, via art 146 of the PRC General Principles of Civil
Law, the applicable limitations rule was the Australian rule, under which the claim was
not statute-barred.
This argument was accepted by McKechnie J at trial in the Western Australia Supreme
Court, but rejected on appeal by the Full Court. The Full Court, whose judgment was
given by McLure J, held that the rule in art 146 was a conflict of laws rule, and that an
Australian court, when applying the lex loci delicti, applied only the domestic PRC rule,
not the PRC’s conflict of laws rules. In other words, this was not a situation in which renvoi
had any place.
The High Court allowed Ms. Neilson’s appeal by a majority of 5 to 2. The judgment
most representative of the majority was that of Gummow and Hayne JJ:]
[65] The particular issues which must be examined in this appeal concern a foreign
tort. They stem from one fundamental question. What is meant by the lex loci delicti? In
particular, what is to be done when the law of the place of commission of the tort would
apply the law of a different place because it attaches significance to a particular feature of
the factual circumstances such as the nationality or domicile of one or more of the parties?
That is, what is to be done when Australian law chooses the place where the tort is com-
mitted as the relevant connecting factor, but the law of that place treats another connecting
factor, such as nationality or domicile, as determining the applicable law?
[66] The parties to the appeal proffered different answers to these questions. They
agreed, however, upon two points. First, there is no determinative judicial authority.
Secondly, the answers to the questions that have been identified are to be provided by
considerations of basic principle, not by simply pointing to the fact that Australian law
chooses the law of the place of commission of the tort. Noting that Australian law makes
that choice does no more than pose the questions; it does not answer them. As will appear,
the answers to be given to the questions require the appeal to be allowed.
[After reviewing the facts and the decisions below, Gummow and Hayne JJ continued.]
General Principles
[84] Legal scholars have devoted much attention and effort to suggesting what is to
be done when the law of the forum, deciding the rights and obligations of parties to a
dispute which has some connection with a foreign legal system, looks to that foreign legal
system only to find that it would decide the parties’ rights and obligations by reference
to either the law of the forum or the law of another legal system. To put the question
another way, if the law of the forum chooses one connecting factor as determining the
choice of law, but the law chosen by the forum treats some other connecting factor as
determinative, to which system does the forum look in deciding the rights and obligations
of the parties?
[85] In some early cases where this problem was recognised and examined, the foreign
law chosen by the forum as the governing law (the lex causae) would have applied the
law of the forum. (Collier v Rivaz (1841) 2 Curt 855 [163 ER 608]; Kahn-Freund, General
Problems of Private International Law, (1976) (Kahn-Freund) at 286 referring to the Forgo
case, Cass. civ. 24.6.1878, DP 1879.1.156; S. 1878.1.429, and the Soulier case, Cass. req.
9.3.1910, DP 1912.1.262.) That came about because the law of the forum chose the place
of occurrence of events as the relevant connecting factor, whereas the foreign law chose
as the connecting factor a status of the parties—nationality or domicile.
[86] It is in this context that, some years later, metaphorical references to renvoi
(“return” or “reference back”) entered the English legal lexicon (see the Note at (1898) 14
Law Quarterly Review 231; Griswold, “Renvoi Revisited,” (1938) 51 Harvard Law Review
1165) as the description to be applied to the problem and its solution. That is, the problem
was presented as if some dialogue occurred between jurisdictions. Would a foreign juris-
diction to whose law the forum had referred, “refer” the issue back to the forum and say
that forum law should be applied? Would the forum “accept” the reference back? Could
there be an infinite regression of reference, followed by reference back?
[87] An immense amount of scholarly literature has been produced. Subsets of the
problem have been identified as cases of single renvoi or double renvoi. Scholars have
asserted that there was not (Cowan, “Renvoi Does Not Involve a Logical Fallacy,” (1938)
87 University of Pennsylvania Law Review 34) or there was (Griswold, “In Reply to Mr
Cowan’s Views on Renvoi,” (1939) 87 University of Pennsylvania Law Review 257) a
fundamental logical fallacy underlying what was happening. One leading scholar has said
of the literature that it is “extensive and partly of very high quality” and that, as a result,
“[i]t is difficult to believe that anyone could produce any argument which has not already
been advanced” (Kahn-Freund at 285). But the scholarly debate has focused more upon
theoretical explanations for the method of solution than upon the principal and essentially
practical concern of the courts, which is to decide the controversies that are tendered by
the parties for decision.
[88] Against this background it is necessary to begin consideration of the problems
presented in this appeal by stating some premises from which the examination proceeds.
Three premises are identified. They can be referred to as “No advantage”; “Certainty and
simplicity”; and “The significance of theories of renvoi.”
No Advantage
[89] The first and most important premise for considering the issues raised in the appeal
is that the rules adopted should, as far as possible, avoid parties being able to obtain advan-
tages by litigating in an Australian forum which could not be obtained if the issue were to
be litigated in the courts of the jurisdiction whose law is chosen as the governing law.
[90] Once Australian choice of law rules direct attention to the law of a foreign juris-
diction, basic considerations of justice require that, as far as possible, the rights and obliga-
tions of the parties should be the same whether the dispute is litigated in the courts of
that foreign jurisdiction or is determined in the Australian forum. This is not a consider-
ation which seeks uniformity for the sake of the aesthetic value of symmetry. Nor is it a
precept founded in notions of international politeness or comity (Kahn-Freund at 318).
As has been said, comity is “either meaningless or misleading”; it is “a matter for sover-
eigns, not for judges required to decide a case according to the rights of the parties” (North
(ed), Cheshire’s Private International Law, 9th ed (1974) at 4; cf North and Fawcett (eds),
Cheshire and North’s Private International Law, 13th ed (1999) at 5).
[91] Rather, adopting a rule that seeks to provide identical outcomes is neither more
nor less than an inevitable consequence of adopting a choice of law rule to which there
is no exception. To apply that choice of law rule in a way that would permit a party to
gain some advantage by litigating in the courts of the forum, rather than the courts of the
jurisdiction whose law provides the governing law, would constitute a considerable
qualification to that choice of law rule. A party could gain an advantage by litigating in
the courts of the forum rather than the courts of the foreign jurisdiction only if the forum
were to choose to apply only some of the law of that foreign jurisdiction. And to do that
would make a significant inroad upon what on its face is stated to be an unqualified choice
of the law which is to govern the rights and obligations of the parties: the lex loci delicti.
Certainty and Simplicity

[92] The second premise for consideration of the problem is that certainty and sim-
plicity are desirable characteristics, not only when stating the applicable rule, but also
when a court comes to apply the rule. Perhaps they are ideals that can never be attained.
But as Kahn-Freund pointed out (Kahn-Freund at 320), the intellectual challenge pre-
sented by questions of conflict of laws is its main curse. Whenever reasonably possible,
certainty and simplicity are to be preferred to complexity and difficulty.
[93] Certainty and simplicity are important consequences of adopting (Pfeiffer [2000]
HCA 36; (2000) 203 CLR 503 at 539-540 [83]-[86] per Gleeson CJ, Gaudron, McHugh,
Gummow and Hayne JJ; Zhang [2002] HCA 10; (2002) 210 CLR 491 at 517 [66] per
Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) the rule that the lex loci delicti
governs questions of substance in tort and rejecting (Pfeiffer [2000] HCA 36; (2000) 203
CLR 503 at 538 [79]-[80] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ)
exceptions or qualifications, flexible or otherwise, to that rule. What have come to be
known as “flexible exceptions” to choice of law rules are necessarily uncertain (Pfeiffer
[2000] HCA 36; (2000) 203 CLR 503 at 538 [79] per Gleeson CJ, Gaudron, McHugh,
Gummow and Hayne JJ; cf Babcock v Jackson 191 NE 2d 279 (1963) and subsequent
decisions about guest passenger liability). That is the inevitable consequence of their
flexibility. Experience reveals that such rules generate a wilderness of single instances.
Especially is that so if the application of the exception depends upon giving content to
qualitative expressions like “more significant relationship … to the occurrence and the
parties” (Restatement of Conflict of Laws, 2d, vol 1, Ch 7, Topic 1, Title B, “Particular Torts,”
(1971), §146). And experience also dictates that these difficulties are not removed by refer-
ence to considerations such as State interests. (Alaska Packers Association v Industrial
Accident Commission of California 294 US 532 (1935); Allstate Insurance Co v Hague [1981]
USSC 37; 449 US 302 (1981); Phillips Petroleum Co v Shutts [1985] USSC 170; 472 US 797
(1985); Franchise Tax Board of California v Hyatt [2003] USSC 3092; 538 US 488 (2003).)
[94] To take no account of what a foreign court would do when faced with the facts
of this case does not assist the pursuit of certainty and simplicity. It does not assist the
pursuit of certainty and simplicity because it requires the law of the forum to divide the
rules of the foreign legal system between those rules that are to be applied by the forum
and those that are not. This requires the forum to impose on a foreign legal system, which
must be assumed is intended to constitute an integrated system of interdependent rules,
a division which that system may not make at all. And to make that division, the forum
must consider hypothetical circumstances which are not identical to those of the case
under consideration. Neither dividing the rules of the foreign legal system nor the manner
of effecting that division assists the pursuit of certainty and simplicity.
[95] An example may illustrate the point. A foreign legal system may make separate
provision for the kinds of loss sustained by a person as a result of a traffic accident,
recoverable from the party whose negligence caused that loss, according to whether the
negligent party was a national of, or domiciled in, that foreign country. The differences
may reflect not only different insurance arrangements for “local” drivers from those
applying to others but also different social security and health arrangements. That is, the
foreign legal system may also make provision in its social security and health legislation
for giving larger benefits to those who are nationals of, or domiciled in, the country than
the benefits allowed to others. If the Australian choice of law rules look only to the
“domestic” law of that country, what account is to be taken of these different social security
and health provisions in deciding the extent of the liability to an Australian citizen of the
Australian employer of a negligent “local” driver sued in an Australian court? Is reference
to be made only to the foreign law that deals with recovery of damages? Is reference to
be made to the social security and health provisions? Any division that is made is neces-
sarily an incomplete and incoherent reflection of the law of that place.
The Significance of Theories of Renvoi

[96] Thirdly, as may be apparent from what has already been said, scholarly analyses
of renvoi by the metaphors of “reference,” “reference back” and “acceptance” do not
provide a sure footing upon which to construct applicable rules. The metaphors of refer-
ence, reference back and acceptance suggest, wrongly, the existence of some dialogue
between legal systems. They therefore mask the nature of the task being undertaken. That
task is to determine, here as an element of the common law of Australia, the source and
content of rules governing the rights and obligations of parties to a particular controversy.
[97] No less importantly, such theories depend upon the underlying assumption,
referred to in connection with considerations of certainty and simplicity, that it is useful,
apparently as an exercise in characterisation by the law of the forum, to attempt to divide
foreign legal systems between rules of “domestic law” and choice of law rules. That this
assumption underpins much of the scholarly analysis of renvoi is apparent from the
treatment of that subject in the work of Dicey and his later editors. (See, for example,
Dicey, The Conflict of Laws, (1896) at 75; Dicey and Morris on the Conflict of Laws, 13th
ed (2000), vol 1 at 65.) There, the problem of renvoi is dealt with by definition. The “law
of a country” is defined (Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1
at 65), when applied to a foreign country, as “usually the domestic law of that country,
sometimes any domestic law which the courts of that country would apply to the decision
of the case.”
[98] As mentioned earlier, the distinction between the domestic law of the foreign
jurisdiction and its conflict of laws rules may not be easy to draw. To draw such a distinc-
tion invites difficulties of the same kind as have so long attended the distinction between
procedural and substantive questions (Pfeiffer [2000] HCA 36; (2000) 203 CLR 503 at
542-543 [97] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). But even if
those difficulties could be overcome, why should a choice of law rule which provides that
the rights and obligations of the parties to a proceeding are to be resolved according to
the law of a foreign jurisdiction refer to some but not all of that foreign law in deciding
those rights and obligations? Why should choice of law be premised upon the results of
imposing on a foreign legal system a division which that foreign system may not make?
[99] Those questions are not to be answered by choosing one theory of renvoi as the
premise from which subsequent arguments proceed. Choosing a single overarching theory
of renvoi as informing every question about choice of law would wrongly assume that
identical considerations apply in every kind of case in which a choice of law must be made.
But questions of personal status like marriage or divorce, questions of succession to
immovable property, questions of delictual responsibility and questions of contractual
obligation differ in important respects. Party autonomy may be given much more empha-
sis in questions of contract than in questions of title to land. Choice of governing law may
be important in creating private obligations by contract but less important when the
question is one of legal status. Choosing one theory of renvoi as applicable to all cases
where a choice of law must be made would submerge these differences. No doubt that is
why Kahn-Freund urged (Kahn-Freund at 290) that in this field dogmatism must yield
to pragmatism.
[100] Where, as in the present case, the focus falls upon choice of law in tort, attention
must be paid to the reasons that underpin reference to the lex loci delicti as the law
governing questions of substance that arise in cases of that kind. As the joint reasons in
Zhang explain ([2002] HCA 10; (2002) 210 CLR 491 at 509-515 [43]-[60]), the bases upon
which the law of the forum was once given a controlling role in relation to delictual lia-
bility, because of connections perceived between the law of civil delict and the criminal
law of the forum, are now seen as infirm. Rather, as those joint reasons demonstrate
([2002] HCA 10; (2002) 210 CLR 491 at 515-517 [61]-[65]), adopting the lex loci delicti
accommodates requirements of certainty with the modern phenomenon of the “move-
ment of people, wealth and skills across state lines” (Tolofson v Jensen [1994] 3 SCR 1022
at 1047 per La Forest J). As one North American scholar has put it (Walsh, “Territoriality
and Choice of Law in the Supreme Court of Canada: Applications in Products Liability
Claims,” (1997) 76 Canadian Bar Review 91 at 110), “[i]n an age of high personal and
professional mobility, the significance attached to the concept of the personal law is in
decline; activity-related connections are increasingly thought to offer a more stable and
predictable criterion for choice of law.”
[101] In applying the lex loci delicti, was Art 146 of the General Principles relevant,
or was it to be discarded from consideration as not being a part of what an Australian
court classifies as the “domestic” law of China? OPC submits that Art 146 was to be
discarded for that reason. The appellant contends to the contrary.
Was Article 146 Relevant?

[102] The premises earlier described require the conclusion that choosing the lex loci
delicti as the law to govern questions of substance where a claim is made for a foreign tort
is not to be confined to reference to what the forum classifies as the domestic law of that
jurisdiction: the law that that foreign jurisdiction would apply in a case having no element
foreign to it but otherwise identical with the facts under consideration. At least where the
choice of law rules of the lex loci delicti depend upon a connecting factor other than place,
such as nationality or domicile, the lex loci delicti is the whole of the law of that place.
[103] There are some consequences entailed by that conclusion that should be noticed.
Two are obvious. First, if the foreign jurisdiction would choose to apply the law of the
forum, and not the law of the place where the wrong was committed, the forum should
apply its own law. Second, if the law of the place where the wrong was committed would
look to a third jurisdiction to provide the relevant law governing the resolution of substan-
tive questions, the forum should look to and apply the law of that third jurisdiction.
[104] Some other consequences that might be said to follow from the conclusion that
account is to be taken of a foreign jurisdiction’s choice of law rules in tort are less obvious
but should also be noticed. They should be noticed because they may be said to reveal
that, despite the first two consequences being acceptable, other consequences entailed by
a conclusion that reference should be made to the whole of the law of the place of com-
mission of the tort would arguably be less readily acceptable.
[105] The same kinds of question about choice of law may be presented not only
where, as the appellant contended to be the case here, the law of the forum and the law
of the place choose different connecting factors to determine the applicable law. They may
be presented in at least three other kinds of case. Thus, they may be presented where the
law of the forum and the law of the place use the same connecting factor but apply it
differently. They may be presented where the two jurisdictions would characterise the
problem differently (Harris, “Does Choice of Law Make Any Sense?,” (2004) 57 Current
Legal Problems 305 at 312-313). They may be presented if the law of the place applies no
single connecting factor but seeks to identify the so-called proper law of the tort. (See,
for example, Base Metal Trading Ltd v Shamurin [2005] 1 WLR 1157.)
[106] The present case is not of these kinds. But it is easy to imagine cases where
different legal systems would identify differently the place of commission of a tort, like
defamation, or liability for defective products. It is easy to imagine cases where different
legal systems would characterise a particular claim differently (as a claim in contract
rather than tort or vice versa). It is well known that some foreign jurisdictions have
adopted the proper law of the tort as the applicable choice of law rule.
[107] In all of these cases, the question would arise: is the law of the forum to take
account of what the foreign jurisdiction would do if the matter were to be litigated there?
The reasons which favour applying the whole of the law of the place of commission of the
tort, where that law adopts a connecting factor other than place of occurrence, are no less
applicable to the cases identified. Once the step is taken of giving effect to what the foreign
law would do when applying its choice of law rules, there is no reason to shrink from
doing that in any of the cases identified.
[108] Until the abandonment of rules that used the law of the forum as the governing
law in tort, no question of renvoi could arise in tort. The double actionability rule estab-
lished in Phillips v Eyre [(1870), LR 6 QB 1] gave only limited significance to the law of the
place where the tort was committed. But now that the rights and obligations of parties are
to be determined by reference to the lex loci delicti, it is necessary to confront directly the
problem of what is meant by that. For the reasons given earlier, in a case like the present,
reference to only part of that law would not give proper effect to the reasons that underpin
reference to the law of the place where the tort was committed—the lex loci delicti.
[109] It may be said that the result reached in these reasons, of understanding reference
to the lex loci delicti in this particular case as reference to the whole of the law of China,
represents a sharp departure from what hitherto has been understood to be a dominant
view in Anglo-Australian conflict of laws. In that regard, it must be recognised that some
leading scholars, particularly Dr J H C Morris and his successors as editors of Dicey, later
Dicey and Morris, on The Conflict of Laws, have exhibited a marked antipathy to renvoi.
Other scholars have taken a different view. (See, for example, Briggs, “In Praise and
Defence of Renvoi,” (1998) 47 International and Comparative Law Quarterly 877; Rimmel,
“The Place of Renvoi in Transnational Litigation—A Pragmatic Approach to an Imprac-
tical Doctrine,” (1998) 19 Holdsworth Law Review 55.) Morris and his successors have
said that “in all but exceptional cases the theoretical and practical difficulties involved in
applying the doctrine outweigh any supposed advantages it may possess.” (See, for example,
Dicey and Morris on the Conflict of Laws, 13th ed (2000), vol 1 at 73-74 (footnote omitted).)
[110] In so far as those authors spoke of practical difficulties the proposition is not
self-evidently true, but its validity need not be examined in this case. For present purposes,
it is enough to notice that those authors go on to accept that the doctrine should be
invoked if it is plain that the object of the relevant choice of law rule, in referring to a
foreign law, will on balance be better served by construing the reference to foreign law as
including the conflict rules of that law (Dicey and Morris on the Conflict of Laws, 13th ed
(2000), vol 1 at 74-76).
[111] A choice of law rule for foreign torts which requires reference to and application
of the lex loci delicti, without exception, is such a case. And whatever may be the conse-
quent difficulties in articulating a single coherent and overarching doctrine of renvoi for
the whole field of conflict of laws, adopting this rule need present no great practical dif-
ficulty. Indeed, to refer to the whole of the law of the place of commission of a tort runs
less risk of incoherence than does reference to only part of that law. And as these reasons
will later show, such difficulties as exist in the present case stem not from choosing to
apply the whole of Chinese law but from the nature of the evidence that was given at trial
about that law.
[112] In the present case, then, the primary judge was right to have regard to Art 146.
But how was it to be applied?
[Gummow and Hayne JJ then dealt with the inadequacies of the evidence led by the
plaintiff at trial on the way a Chinese court would apply art 146. They concluded that,
despite these shortcomings, “the trial judge was bound to conclude that Chinese law,
when applied to the facts of this case, would look to the law of the nationality or the
domicile of the parties” (at para 124).]
[129] What is meant when it is said that the law of the place where the tort was com-
mitted would apply the law of the country of nationality or domicile? There are two aspects
to that question. The first is like the question “what is meant by the lex loci delicti?” When
the foreign law refers to the law of the country of nationality or domicile, does that refer-
ence include the conflict of laws rules of that country? Secondly, what is to be done when
the country of nationality or domicile is a federal state? The first aspect of this question
conjures up the spectre, mentioned earlier in these reasons, of the infinite regression of
reference followed by reference back. The second suggests an inexactness of reference and
consequent difficulty in working out what the lex loci delicti requires. (The expression
“infinite regression” is taken from the debate between Professors Cowan and Griswold:
Cowan, “Renvoi Does Not Involve a Logical Fallacy,” (1938) 87 University of Pennsylvania
Law Review 34 and Griswold, “In Reply to Mr Cowan’s Views on Renvoi,” (1939) 87
University of Pennsylvania Law Review 257.)
Infinite Regression?
[130] The possibility of an infinite regression of reference was a principal reason
underpinning the Full Court’s conclusion in this case ((2004) 28 WAR 206 at 216 [47])
that to apply “the double renvoi doctrine to international torts would not promote cer-
tainty and predictability.” This was said to be because of the need to identify not only
Australia’s choice of law rules but also “the foreign country’s choice of law rules and its
attitude to renvoi” ((2004) 28 WAR 206 at 216 [47] (emphasis added)).
[131] In this particular case, however, Art 146 is not to be understood as permitting,
let alone requiring, a Chinese court to have regard to Australian choice of law rules. It
was not contended, and there was no evidence, that Art 146 was to be understood as
having that effect. Moreover, there is no basis in the context, provided particularly by
Art 8 of the General Principles and the heading to Ch VIII, that would warrant that
conclusion. Rather, both text and context point to Art 146 being understood as providing
for a once for all reference of the problem out of Chinese law and into the law of the
country of nationality or domicile. That may, perhaps, leave open the possibility in Chinese
law that a Chinese court would recognise the consequences of a reference by the law of
the country of nationality or domicile to a third legal system, but that is a question that
does not arise here. What is clear is that Art 146 is intended to achieve the result that the
rights and obligations of those who are nationals of, or domiciled in, another country are
to be determined by a law other than the law of China.
[132] It must nonetheless be recognised that there may be cases where the law of the
place where a tort is committed would determine the rights and duties of the relevant
parties by referring to all of the law of Australia, including Australian common law choice
of law rules. That is, there may be cases where Australia would look to the whole of the
law of that country only to find that country looking to the whole of the law of Australia.
It may be asked, where and how would such a circle of reference be broken? But this
approach to the matter is apt to introduce those notions of dialogue between legal systems
which have been disfavoured earlier in these reasons. The task is to consider the content
of the Australian choice of law rule which has fixed upon the lex loci delicti. (Harris,
“Does Choice of Law Make Any Sense?,” (2004) 57 Current Legal Problems 305 at 346.)
[133] In Casdagli v Casdagli, Scrutton LJ adverted to this issue in connection with the
law of a person’s domicile. ([1918] P 89. Scrutton LJ was in dissent but an appeal to the
House of Lords was allowed: [1919] AC 145.) What was to be done if the relevant law of
the foreign domicile of an English national applied the law of the nationality? He suggested
([1918] P 89 at 111) that one possible solution to the conundrum thus presented was to
regard the reference to the law of the domicile as requiring reference back to the law of
the forum “but not that part of [the law of the forum] which would remit the matter to
the law of domicil, which part would have spent its operation in the first remittance”
(emphasis added).
[134] It is not necessary to explore whether this solution should be adopted. For the
moment, it is enough to recognise the existence of the problem and to conclude that its
existence does not warrant departing from the conclusion, earlier expressed, that reference
to the lex loci delicti is to be understood as reference to the whole of that law. The Aus-
tralian choice of law rule will not yield disagreeable uncertainty and complexity if it is
interpreted as giving full effect to its selection as the lex causae of the whole of the foreign
law, even where what is classified as the foreign choice of law rule and which is thereby
adopted prefers Australian law as dispositive of the case. In such circumstances, to say
that the reference back to the law of the forum is “accepted” would be to do no more than
abide the consequences of the initial selection of the lex loci delicti. That choice of law
would not have miscarried where, by reason of the content of the lex loci delicti, the
outcome in the forum was the same as if there had been no initial choice of a foreign law.
[The rest of the judgment of Gummow and Hayne JJ is omitted. Gleeson CJ and Callinan
and Heydon JJ delivered concurring judgments. Kirby J dissented, not on the applicability
of renvoi, but on how the trial judge should have interpreted art 146; he thought the evi-
dence did not support the conclusion that a Chinese court would have applied Australian
law. McHugh J dissented because he thought renvoi should not be applied. See the fol-
lowing note.]
NOTES
1. In Neilson, McHugh J ended up rejecting renvoi by a process of eliminating the alterna-

tives. He could see no way out of the “infinite regression” if “total renvoi” (also known as
double renvoi) was used, which asks what the foreign court actually would do in the particu-
lar case. If the foreign court also used total renvoi (or had to be presumed to do so because its
attitude to renvoi was not proved, with the result that the law of the forum, which used total
renvoi, had to be applied by default), there was no logical way to determine the applicable
rule. The forum court would ask what the other would do and might find that the other court
would do what the forum court itself would do. Since total renvoi was logically unacceptable
because of the “infinite regression” (which the majority avoided by saying it was not raised by
the facts), the only choices left were to adopt single renvoi or reject renvoi altogether.
Nor, in McHugh J’s view, was single renvoi an acceptable technique. Because it looks at
the other jurisdiction’s conflicts rule, but ignores its renvoi rule, there is no guarantee that
the forum court will reach the same result as the other court would. It will if the foreign court
would not apply renvoi, but it will not if the foreign court would “accept the renvoi” back to
its own legal rule. The forum court, applying single renvoi, would ignore the reference back.
Because single renvoi could not reliably achieve the goal of uniformity of decision, McHugh J
held that the only logical position was to reject renvoi and apply Chinese “domestic” law—
that is, excluding any references a Chinese court would make to other systems of law.
The High Court’s application of renvoi in a tort case is, as Gummow and Hayne JJ noted at
para 109 of their judgment, quite out of step with the prevailing consensus. The case has
attracted much commentary: see Davies; Gray; Greene; Mortensen; and Schoeman. The
general trend is shown in the law that now governs choice of law in tort in the European
Union, Regulation (EC) No 864/2007 (“Rome II”), which is binding law in all the members
states (except Denmark, which did not subscribe to it). Article 24 of Rome II excludes renvoi:
“The application of the law of any country specified by this Regulation means the applica-
tion of the rules of law in force in that country other than its rules of private international
law.” The general theory of renvoi is discussed in Hughes.
2. Aside from its logical shortcomings, using renvoi to reach the very result that a hypo-
thetical foreign court would reach entails great practical problems. The forum court has to
rely on the testimony of experts not only as to foreign choice of law rules, which may be
controversial in themselves, but also as to the foreign attitude to renvoi, which, if the Canad-
ian position is anything to go by, may be completely obscure.
Re Annesley, [1926] 1 Ch 692 is the clearest English decision that applies renvoi. The ques-
tion was whether the validity of a woman’s testamentary dispositions of movables fell to be
decided by English or French law. The English conflicts rule referred this question to the law
of the testator’s last domicile, which, the court found, was France, where the woman had
lived for 40 years. However, evidence was submitted that, in French law, the validity of her
testamentary dispositions was a matter for the law of her nationality, which was still British,
and on this ground English law should be applied. The court decided (albeit with hesitation,
because the evidence was unclear on this point) that a French court would have “accepted
the renvoi” back from English law to French law and would have applied French internal law
to the issue. The court therefore applied French internal law. The court did not pursue the
question further than that. In other words, the judge did not ask himself whether the French
court would have investigated the English rules of renvoi to see if the English court would
“accept the renvoi” back again.
The very few Canadian cases that consider renvoi are not compelling in their reasoning.
There is an old Supreme Court of Canada decision on an appeal from Quebec, using partial
renvoi as one of two alternative grounds for holding a will formally valid: Ross v Ross (1894),
25 SCR 307. Two more recent cases on matrimonial property rights also discussed (appar-
ently partial) renvoi. One (Vladi v Vladi (1987), 39 DLR (4th) 563 (NSSC)) applied it, only to
reject the indicated foreign internal law (it was a case of reference onward to a third country)
on the ground of public policy. The other (Tezcan v Tezcan (1992), 62 BCLR (2d) 344, 87 DLR
(4th) 503 (CA)) just raised it obiter: see Chapter 21. Beyond that, only a few English cases, like
Re Annesley, support renvoi as part of our law for selected purposes. Walker takes an agnostic
position, suggesting that to rule renvoi out altogether on the grounds of complexity “seems
to place an arbitrary limit on the search for an applicable law in cases in which there might
seem to be a compelling reason to search beyond the substantive law of the lex causae” (at
para 5.2). Falconbridge, who devoted fully five of his essays (Falconbridge at 124-263) to the
subject of renvoi, suggested that its use might be supported in a narrow range of cases, deal-
ing mainly with title to property or the validity of legal instruments like wills: Falconbridge
at 141-42. In any event, there is authority that renvoi has no place in some parts of choice of
law, notably contracts: see Amin Rasheed Shipping Corp v Kuwait Insurance Co, [1984] AC 50
(HL), reproduced in Chapter 13.
Renvoi is also excluded by statute in some cases, as in the Family Law Act, RSO 1990, c F.3,
which contains the choice of law rule for determining matrimonial property rights. It refers
in s 15 specifically to the spouses’ rights being “governed by the internal law of the place
where both spouses had their last common habitual residence or, if there is no place where
the spouses had a common habitual residence, by the law of Ontario” (emphasis added).
There is at least one example of renvoi being required by statute, which is found in personal
property security legislation. The problem is where and how to register a security interest in
intangible property or property that is normally used in multiple jurisdictions. The standard
statutory rule is to apply the law of the jurisdiction in which the debtor is located (as defined)
when the security interest attaches. Some provinces’ statutes specify that the law to be
applied includes the conflict of laws rules of that jurisdiction: see e.g. Personal Property Secur-
ity Act, RSBC 1996, c 359, s 7(2). This reflects a policy to stay in step with the law that a court
of the debtor’s jurisdiction would actually apply to security interests in property possessed
by that debtor. Compare the Ontario legislation, which specifically excludes renvoi: Personal
Property Security Act, RSO 1990, c P.10, s 8.1.
ii. The Incidental Question

The incidental question is a logical dilemma that, like renvoi, arises because different coun-
tries have different choice of law rules. It is of less practical importance than renvoi as far as
decided cases are concerned, but it is troublesome when it does arise. That happens when
(1) the forum’s choice of law rule says to apply the law of X to a particular issue; (2) that issue
itself turns on a subissue that also raises a choice of law question (hence the label “incidental
question”); and (3) the answer given to that incidental question is different, depending on
whether the private international law of X or that of the forum is applied to the question.
For example, suppose the following:

1. The main issue is how a deceased person’s estate is to be distributed on her intestacy.
That is a question falling under the choice of law rule that intestate succession to movable
property (everything but interests in land) is governed by the law of the deceased’s last
domicile. The deceased died domiciled in X. The law of X says that a surviving spouse inher-
its a certain portion of the estate.
2. There is a subissue whether a particular claimant, A, was the spouse of the deceased.
That issue arises because the deceased was A’s second wife, and A’s first marriage was dis-
solved by a decree of a court in Y. The validity of that divorce decree raises a separate choice
of law question, incidental to the main issue.
3. The divorce is recognized as valid by the private international law of X, but not by the
private international law of the forum. Therefore, A has a valid claim to part of the estate if
X’s private international law is applied to the incidental question, but not if the forum’s pri-
vate international law is applied.
Methodologically speaking, the question is whether the incidental question should be
decided according to the private international law of the country whose law governs the
main question or according to the private international law of the forum. If, in this example,
the court applies the private international law of X and treats A as validly divorced from his
first wife, the court in a sense abandons its own standards as to which foreign divorces
ought to be recognized. It is recognizing, for this particular purpose, a foreign divorce that it
would not recognize generally. On the other hand, if the court judges the validity of A’s
divorce according to the rules of the forum’s private international law, it is holding disenti-
tled a claimant who would have a perfectly good right to a share of the estate in the eyes of
a court in X. It is A’s misfortune that the case is heard in the forum rather than in X.
It is generally accepted that there is no universally satisfactory answer to this methodo-
logical puzzle. As the example illustrates, there is bound to be some kind of inconsistency
no matter which solution is adopted. It is impossible to generalize about which form of
inconsistency is better and which is worse. The best one can do is to choose the preferable
solution by comparing the alternative outcomes in the light of the individual circumstances
of the case. The issues are analyzed by Gotlieb (1955 and 1977).
The best example of the incidental question in a decided case is Schwebel v Ungar, [1965]
SCR 148. The question was whether a couple were validly married. When they married, he
was domiciled in Ontario, she in Israel. Capacity to marry is usually governed by the law of
the domicile of the party whose capacity is in issue. The husband said that the wife had
lacked the capacity to marry him because her first marriage had not been validly dissolved.
She and her first husband, who were both originally from Hungary, had been divorced
before a rabbi in a camp in Italy on their way from Hungary to Israel after the Second World
War. That divorce was not recognized under Ontario’s recognition rules but it was regarded
as valid in Israel. So, if the court decided the incidental question (the validity of the divorce)
according to the private international law of the forum, the wife’s second marriage was
invalid. If the court decided it according to the private international law of Israel, the country
whose law governed the main question (her capacity to marry), the result was the opposite.
The latter was what the court did, but the exact significance of its decision is not altogether
clear because of ambiguities in the reasoning.
iii. The Time Element

In applying a choice of law rule of the classical type, there are two aspects that need to be
defined in terms of time. One is the connecting factor. People and things move around. As
of which moment in time is, say, a person’s domicile or a property’s situs to be determined?
The other is the content of the internal rules of law selected by the choice of law rule. Laws
change. As of which moment in time is the law in question being referred to?
As far as the connecting factor is concerned, the choice of law rule itself either expressly
or implicitly defines the date as of which the connecting factor is to be found. Intestate or
testate succession to movable property is governed by the law of the country in which the
deceased was domiciled at the time of death. Capacity to marry is determined by the law of
the domicile, at the time of the marriage, of the person whose capacity is in issue. The validity
of a transfer of tangible movable property is governed by the law of the country in which the
property is situated at the time of the purported transfer. And so forth.
Since the connecting factor is determined as of a certain date, the choice of law rule
implicitly refers to the legal system of the designated country as of that date. However, the
internal rules of that legal system may change between that date and the date that the par-
ties’ rights fall to be decided. Should such changes be taken into account in that decision?
There is no simple answer to this.
The easiest case is the one where the change in the internal rules of the designated legal
system is, according to the rules of the system itself, only prospective in its effect. If, for
example, a couple were validly married in country X in 2005, and in 2010 X changed the
formal requirements of a marriage so as to add some new requirement, a court in Y would
not need to worry about the change so long as X law itself provided (as in most legal systems
would be the case) that the change did not affect pre-2010 marriages. The Y court would
simply treat the change in the law as the X legal system itself treated it.
More difficult is the case where the change in the law does, according to the rules of the
legal system being considered, affect rights arising out of events that have already hap-
pened. Should the forum court give effect to the change just as a court in the other country
would? Courts have given different answers in different contexts. One often cited example
is Lynch v Provisional Government of Paraguay (1871), LR 2 P & D 268 (Prob & Divorce Ct). The
will of a deceased Paraguayan ruler was presented for probate in England. Its validity was
challenged on the ground that after his death, a law had been passed in Paraguay that
declared invalid any testamentary disposition he had made and purported to vest title to his
property, wherever situated, in the state of Paraguay. According to the English choice of law
rule, Paraguayan law, as the law of the deceased’s last domicile, governed the essential valid-
ity of his will in respect of movable property located in England or anywhere else. The Eng-
lish court held that the choice of law rule contemplated the law of the testator’s domicile at
death and, this meant, the law as it stood at the time of his death. The will was therefore not
invalidated by the subsequent Paraguayan legislation.
This can be contrasted with another well-known case, Starkowski v Attorney General,
[1954] AC 155 (HL). The issue there was the validity of a marriage between a couple who were
domiciled in Poland but who married in Austria in the immediate aftermath of the Second
World War. Owing to the confused legal situation at the time, their marriage ceremony had
not complied with the formalities that Austrian law then required. The law had later changed
to permit marriage ceremonies like theirs, and the change had been made to apply to
previous marriages, curing their invalidity. By the time the couple’s marriage was purport-
edly cured, however, they were domiciled in England. The House of Lords saw no reason to
deny effect to this change and held that the marriage had been validated. The obvious dif-
ference from the Lynch case is that the change operated to validate what had been done
rather than to invalidate it. The Law Lords reserved the question whether the result would
have been the same if either of the parties had remarried before the first marriage had been
validated, since in that case giving effect to the retroactive change would effectively invali-
date a second marriage that had initially been valid. That type of problem, but in converse,
came up in Ambrose v Ambrose (1961), 25 DLR (2d) 1 (BCCA). In 1958, a woman obtained an
order in California that backdated the effective date of her California divorce from her first
husband from 1939, when it originally became final, to 1931. This was held ineffective to vali-
date her 1935 second marriage. The court thought that the second marriage, which was
originally a nullity, could not be changed afterward to a valid marriage by operation of the
law of California, where neither of the parties to the second marriage was domiciled at the
time the divorce was backdated.
What these contradictory decisions show is that there is no simple rule for dealing with
changes in the law that a choice of law rule points to as governing a particular issue. The
difficult cases, however, are confined to situations where the change retroactively alters a
person’s status (as in Starkowski and Ambrose) or divests someone of title to property (as in
Lynch). Aside from these cases, a choice of law rule is taken to indicate the whole law of the
designated country, changes and all. There is no doubt, for example, that if parties make a
contract that is governed by the law of X, and that law changes afterward to make their
agreement void, that change will be given effect. The only possible qualification is that the
change may be refused recognition on the ground of public policy if it is perceived as violat-
ing fundamental principles of justice: see Chapter 4.
A third type of timing problem arises if the choice of law rule itself is altered after some
of the events in the case have already happened. If the change is made by legislation, it is, as
with any other statutory alteration of the law, a matter of construction of the Act whether
the change has effect in respect of events that have already occurred. Sometimes the legis-
lature makes the answer explicit. For instance, ss 22(1) and (2) of the Divorce Act, RSC 1985, c 3
(2nd Supp) contain two rules for the recognition of foreign divorces that are expressly made
applicable only to divorces granted after the respective provisions came into force. By con-
trast, if the change in the choice of law rule is a matter of judicial recasting of the common
law, the usual fiction is applied that the judges do not change the common law, they only
reveal what it has always been. This can have startling effects on people’s rights. One
example is the expansion of the range of divorces recognized at common law, which in
effect validated, in the eyes of Canadian law, many foreign divorces that would undoubtedly
have been treated as nullities if the issue had arisen before the law was judicially changed.
This retroactive effect was expressly considered and affirmed in Edward v Edward (1987), 39
DLR (4th) 654 (Sask CA) (reproduced in Chapter 18). Another, even more far-reaching,
instance is Morguard Investments Ltd v De Savoye, [1990] 3 SCR 1077, 76 DLR (4th) 256 (repro-
duced in Chapter 3), which broadened greatly the recognition of foreign money judgments.
A huge number of existing extraprovincial default judgments that until then could not be
enforced in the province were made enforceable by a stroke of the court’s pen.
III. PERCEIVED SHORTCOMINGS OF THE CLASSICAL METHOD

Despite its almost universal prevalence, the classical method of using choice of law rules has
sustained persistent criticism over the past 80 years. The criticism and the suggestions for
change have come overwhelmingly from academic writers, especially in the United States.
The general nature of their criticisms is illustrated by the materials in Chapter 2. Essentially,
there have been three strands to their arguments, as follows.
A. Arbitrariness
Choice of law rules of the traditional type are said to be arbitrary in several senses.
1. The idea that a category of issues is governed by the law of a particular jurisdiction,
because the facts are connected with that jurisdiction in certain respects, savours of abstract
conceptualism. It suggests that it is somehow inherent in the nature of things that the law of
that country should apply on a theory of vested rights (if parties do something in country X,
rights are “vested” in them by virtue of the law of X) or a kindred notion that a country has an
inherent “right” to have its law applied to certain people or certain transactions or property.
2. Some classical choice of law rules subject a whole range of very different choice of law
issues to the same law, just because all the issues happen to come under the rubric of, for
example, “contract rights” or “liability in tort.” The boundaries of the choice of law rules are
fixed on the basis of general categories of internal legal rules rather than by the characteris-
tics of the choice of law issues as such. It is not evident, for instance, why the question
whether a contract is void for violating currency exchange regulations should be deter-
mined by the same choice of law rule (apply the proper law of the contract) that determines
whether time is of the essence of the contract. One is a question of determining the appro-
priate reach of a state’s exchange control mechanisms, the other of giving effect to party
intention. For that reason, one might want to apply different laws to those issues, but they
are lumped together in a single choice of law rule.
3. Many choice of law rules employ connecting factors that themselves are inherently
arbitrary, like domicile or the locus of a tort. These are artificial constructs that, in borderline
cases, may turn on fine conceptual points rather than on solid factual differences.
4. Classical choice of law rules invite their own circumvention if their application leads to
unattractive results. Often, for example, a court can easily characterize a rule of internal law
so as to remove it from one choice of law rule and put it into another that yields a better
result (this is not formal validity, but essential validity; this is not a rule of contract law, but a
rule of procedure). This aspect again is a byproduct of the abstract legal categories that form
the basis of the choice of law rules. Similarly, concepts like domicile, or the closest and most
real connection between a contractual transaction and a legal system, lend themselves to
manipulation because they involve a complex evaluation of the facts.
B. No Account Systematically Taken of Real Conflict of State Policies

That Underlie the Choice of Law Issue
A related criticism levelled at choice of law rules of the traditional type is that they fail to take
into account, in any systematic way, the concrete issues that are posed by choice of law
III. Perceived Shortcomings of the Classical Method 535
cases. If one party wants a foreign internal legal rule to apply and the other wants the lex fori
or some other law to apply, their dispute touches the interests of those legal systems as well
as their own. One of the “real” issues at stake—some scholars have said the only real issue at
stake—is whether and in what way the forum and the foreign country are each “interested”
in having their respective rule applied to the case. A rational choice of law system, the argu-
ment runs, must explicitly take these governmental or state “interests” into account. The task
of the choice of law system is to give effect to these “interests” in a logically defensible man-
ner. The classical choice of law rules do not do this, according to the critics.
Although scholars argue about how realistic it is to talk about “governmental interests,”
all those who attach importance to the concept maintain that a court faced with a choice of
law issue can, and ought to, examine each country’s interest in having the relevant rule of its
internal law applied. This deduction is based on what the rule says, the purposes it is
designed to serve, and whether those purposes would in fact be served by applying the rule.
An example that looms large in the American scholarly literature and the cases is the rule,
which used to prevail in the United States, that liability in tort depends on the law of the
place of the tort. According to the argument being discussed here, it is wrong to assume a
priori (as, in effect, the traditional rule in the United States did) that the country where the
tort takes place always has the greatest interest in every tort issue that may arise. The place
of the tort may be fortuitous, as in the case of an airplane accident that happens en route in
a state that is not the place of departure, the destination, or the home of any of the parties.
That state is unlikely to have any interest in having its law determine an issue in a tort action
that results from the accident. In other words, it has no stake in the issue. Even if the place of
the accident is not fortuitous, the particular issue may be one that has less to do with the act
or omission that gave rise to the accident than with the parties’ relative personal situations,
in which the parties’ home state or states may have more interest than the country where
the accident happened. The “guest statute” cases (see Babcock v Jackson, 191 NE (2d) 279 (NY
Ct Apps 1963) (reproduced in part in Chapter 12)), which involve statutory bars against pas-
sengers suing their drivers for injuries suffered in an accident, are prime examples of such an
issue. The argument is that a choice of law system is logically indefensible if it ignores this
aspect of the choice of law problem.
C. No Account Systematically Taken of International and

Interprovincial Policies
An extension of the argument that the classical system ignores the interests of the relevant
countries in having their respective rules applied to the case is that it likewise ignores the
interests of the interprovincial and international legal system as a whole. In the traditional
scheme, there is no room to evaluate whether, in respect of a particular issue, applying a
foreign country’s internal rule rather than the forum’s would contribute to a well-ordered
pattern of assigning rights and liabilities to parties who are involved in cross-border trans-
actions. The traditional choice of law rule itself may embody some such idea. For example,
the rule that a contract is formally valid if it complies with, inter alia, the law of the place of
contracting is designed to promote convenience in the making of contracts by letting the
parties follow the local form. The critics of the traditional method maintain that it would,
generally, be much better to evaluate not a broad choice of law rule but the solution of the
precise issue from the internationally and interprovincially systemic point of view.
IV. ALTERNATIVES TO THE CLASSICAL METHOD

A. Common Characteristic: Issue Particularized Rather Than Categorized
Because the drawbacks of the traditional choice of law method are all linked to the structure
of the classic choice of law rule—a category of legal issues is said to be governed by the law
of a designated country—the alternative methodologies that have been proposed over the
past 40 years have all involved scrapping such “jurisdiction-selecting” rules in favour of “rule-
selecting” approaches. That is, the choice of law question is particularized—should the court
apply this rule of the law of country X or that rule of the lex fori? The theory is that only by
framing the question in terms of the actual alternatives before it can a court face the genu-
ine issues that the choice of law involves. How the court ought to choose one alternative
over the other is a matter on which the advocates of the new methodologies are sharply
divided. They all agree, however, that the starting point is to identify the actual rules of
internal law that the respective parties wish to have applied.
This means that there are as many choice of law issues in a given case as there are steps
in a court’s reasoning, to which one country’s rule might be applied rather than another’s.
So, in a car accident case in which P sues D, there could be separate choice of law issues
about the standard of care that D owed P; about whether P’s relationship with D (marriage,
guest-passenger) precludes a tort action; about the effect of P’s contributory negligence; or
about D’s vicarious liability for the negligence of a third party in the accident. On each of
these issues there might be internal rules from two or more countries that might potentially
apply and the choice between them has to be made separately for each issue. By contrast, if
one applies a rule that “liability in tort” is governed by the law of the place of the accident,
all these issues (as long as they are all characterized as dealing with “liability in tort”) will be
relegated to a single law under the umbrella of that single choice of law rule.
This distinguishing of each concrete choice of law issue from the others in a case in order
to assess one choice of law issue independently from the others is a phenomenon that
scholars have dubbed dépeçage (literally, slicing up). It is the logical outcome of abandoning
the classical, jurisdiction-selecting approach to choice of law, which operates by fitting legal
issues into categories rather than examining each of them individually to find the right
choice of law.
Just how this process of individual assessment should be conducted is a matter on which
there are almost as many theories as there are scholars and judges who have occupied
themselves with the problem. Most of these involve, to a greater or lesser extent, the exam-
ination of the governmental interests at play in the decision. The discussion in the next few
pages is anything but a comprehensive survey of choice of law thinking over the past dec-
ades. Its purpose is just to show, in a summary way, some of the main ideas at work in the
scholarly literature and in the case law that has been influenced by it.
B. Proper Law Approach

One method that avoids dealing with governmental interests explicitly should be men-
tioned. This is the “proper law,” also described as a “centre of gravity,” “contact-counting,” or
“proximity” approach. It asks with which country the particular issue has its closest or most
real and substantial connection. It is the method that Anglo-Canadian private international
IV. Alternatives to the Classical Method 537
law uses to determine the proper law of a contract, but it can be applied to almost any
choice of law issue. It operates, as was noted earlier, by taking into account all the connec-
tions, factual and legal, between the particular issue and the various legal systems in ques-
tion. The great merit of this approach is flexibility, but it has some serious shortcomings. The
main one is that expressions like “closest” or “most real and substantial” do not convey any
precise meaning. A decision about where the centre of gravity of the issue lies must, there-
fore, be based either on sheer impressionism or on more or less inarticulate premises as to
which country’s rule ought to apply—for instance, because that outcome best gives effect
to the parties’ intentions or because the impact of the decision will mainly be felt in that
country. For this reason, except for the field of contracts, the proper law approach has
enjoyed little support as a method of general application to choice of law questions,
although judges now and then have used it: see e.g. Lord Denning MR in Sayers v Inter-
national Drilling Co NV, [1971] 1 WLR 1176 (CA). This reluctance to use the proximity approach
in choice of law contrasts, in Canadian private international law, with the courts’ extreme
fondness for it in the fields of jurisdiction and foreign judgments: see the critique by Castel.
C. Governmental Interests
Brainerd Currie was the American scholar who most forcefully highlighted the importance
of “governmental interests” and, indeed, made them the basis for his whole approach to
choice of law. One of Currie’s best-known illustrations of his thesis (see Currie, “Married
Women’s Contracts”) was based on Milliken v Pratt, 125 Mass 374 (1878), in which a married
woman was sued on her written guarantee of her husband’s debts. She signed the guaran-
tee at her home in Massachusetts, from where it was mailed to the creditor’s place of busi-
ness in Maine. According to Massachusetts law she was incapable of binding herself as
surety for her husband’s or any third party’s debts. According to Maine law she was liable.
The court applied a choice of law rule (which would not be law in Canada or in the United
States today) that the validity of the contract was governed by the law of the place of con-
tracting. This was found to be Maine law because the court thought that the wife’s unilateral
offer had been accepted in Maine by the creditor’s delivering goods to a carrier there to be
shipped to the husband.
Currie’s criticism of this reasoning was that it left out of account entirely the purpose of
the two internal legal rules and the extent to which applying one or the other would
advance the respective interests of Massachusetts and Maine. The purpose of the Massachu-
setts rule of incapacity, he suggested, was to protect married women. The women with
whose welfare Massachusetts was concerned were Massachusetts women, which for the
purposes of argument he took to mean women who resided in the state. Maine, on the other
hand, had decided that the security of transactions was of overriding value and that it out-
weighed any need to extend special protection to married women.
The choice of law decision, properly considered, was a matter of giving appropriate effect
to the competing interests of the two states. The factors that were relevant to such an analy-
sis were not the place of contracting but which of the two states had the incapacity rule and
in which state the defendant woman resided. If the defendant lived in the state that would
uphold the contract, the other state had no interest in extending its incapacity rule to pro-
tect a non-resident at the expense of a business located in the state. That was a “false con-
flict,” since applying the protective rule would not serve the purpose that underlay it. So the
contract should be upheld—no matter in which state the contract was made. If the defend-
ant lived in the incapacity state, that state had an interest in protecting her and that interest
conflicted with the other state’s interest in upholding the contract. That was a “true conflict”
of the states’ interests. Currie’s basic solution for true conflict cases was to apply the law of
the forum state, since he doubted the courts’ ability to weigh state interests against each
other. So, if the defendant lived in Massachusetts, whose rule protected her from liability,
and the plaintiff’s business was in Maine, whose rule imposed liability, the result would
depend on which state’s court heard the case. A Massachusetts court would resolve the true
conflict by applying the Massachusetts rule in favour of the defendant, whereas a Maine
court would resolve it by applying the Maine rule in favour of the plaintiff.
Currie proposed the following basic method for resolving choice of law problems:
“Notes” at 183-84:
1. Normally, even in cases involving foreign elements, the court should be expected, as a
matter of course, to apply the rule of decision found in the law of the forum.
2. When it is suggested that the law of a foreign state should furnish the rule of decision, the
court should, first of all, determine the governmental policy expressed in the law of the
forum. It should then inquire whether the relation of the forum to the case is such as to
provide a legitimate basis for the assertion of an interest in the application of that policy.
This process is essentially the familiar one of construction or interpretation. Just as we
determine by that process how a statute applies in time and how it applies to marginal
domestic situations, so we may determine how it should be applied to cases involving
foreign elements in order to effectuate the legislative purpose.
3. If necessary, the court should similarly determine the policy expressed by the foreign law
and whether the foreign state has an interest in the application of its policy.
4. If the court finds that the forum state has no interest in the application of its policy but
that the foreign state has, it should apply the foreign law.
5. If the court finds that the forum state has an interest in the application of its policy, it
should apply the law of the forum, even though the foreign state also has an interest in
the application of its contrary policy and, a fortiori, it should apply the law of the forum if
the foreign state has no such interest.
Notice two assumptions that underlie the use of governmental interests to guide choice
of law. One is that, for both the rule of the lex fori and for the rule of foreign law, the court can
determine the “policy” or “policies” embodied in the respective rules. The other is that the
“policy” of the rule can be translated into a natural or appropriate spatial application for the
rule, based on the state’s “interest” in having the “policy” of its rule apply wherever the state
has a particular kind of “relation … to the case.”
Although many scholars agree with parts of Currie’s analysis, very few have agreed with
all of it. Five points in the debate may be mentioned.
1. Exactly what kind of “interest” is the state supposed to have in the application of its
law? This has proved to be a more elusive concept than it might seem. Clearly it is linked in
some way to the idea that a country, through its internal legal rules, desires to effectuate
certain policies. But in what sense is this desire real? Whose desire is it—the legislature’s, the
government’s, or the courts’? Even assuming that they have single minds on the subject, do
any of them care, in any real sense, about whether their own country’s law applies in a par-
ticular cross-border case between private litigants?
The reply to such objections must essentially be that, if a country has laws intervening in
private relationships, those laws must be designed for a purpose. That purpose, presumably,
is to alter or control those relationships for the sake of the perceived interests of one or other
of the parties to the relationship or those of the community as a whole. A decision whether
to apply a country’s rules to a particular case has a direct bearing on the extent to which that
purpose is carried into effect. In that sense, the country must by definition have, at least
potentially, an interest in the outcome of the decision. It is wrong to look for a particular
actor who has that interest. It is the public interest, the interest of the country as a law-
creating entity, that is involved: see Kay at 133-34.
2. The country’s interest is said to be expressed in the “policies” underlying its laws.
Again, whose policies are they? Those of the legislators who voted for the law (if it is a stat-
ute) or those of the judges who developed it (if it is common law)? What if they had different
“policies” in mind when they supported the rule or just backed it as a political compromise?
Aside from the problem of identifying whose policies are meant, how is a judge, especially
a judge from another country, supposed to determine these policies? There may be grave
difficulties in examining extralegislative material—for example, to find the policies that
were discussed in the course of arriving at the rule in question. And, at yet another level, is
the inquiry solely concerned with a country’s substantive policies (the social and economic
goals it pursues within its borders) or does it extend to the country’s choice of law policies
(having to do with the pros and cons of arranging, in any particular way, the private legal
relationships that touch both it and other countries)?
3. Even if you accept that a country’s interests are genuinely at stake in a choice of law
decision and that its internal legal rules embody definable policies, there is a further prob-
lem. How, in any particular case, do you determine the spatial extent of a country’s interest
in furthering the policies behind its rule? The whole method of governmental interest analy-
sis rests on being able to say whether one or other country is interested, or not interested, in
having its rule applied to the particular case. That assumes that countries’ interests can be
said to have an appropriate or desirable spatial reach. For instance, in his example noted
earlier, Currie said that if a state had a rule that married women could not guarantee their
husbands’ debts, the purpose of the rule, which was to protect married women, meant that
the state was interested in protecting women who were domiciled in the state but not those
who were domiciled elsewhere. From that assumption flowed the rest of the analysis.
Some scholars have questioned whether there is any solid basis for the idea that a state’s
interest in seeing its policies advanced can be delineated in spatial terms. Why should Mas-
sachusetts not be interested in protecting married women from Maine? This assumption
that a state’s interests are parochially limited to its own citizens has been described as “more
appropriate to a tribal system of law than to that prevailing in the American Union”: Cavers
at 161, n 29. It has been noted that “the application of foreign law in certain situations is
conducive to the smooth functioning of international commercial and family relations and
such smooth functioning lies in the interest of the forum country”: Bogdan at 68. As another
writer puts it, “Why is it that only substantive policies matter, as opposed to choice of law
policies? And even if all that matters is substantive policies, is it possible that choice of law
rules might improve interstate cooperation and thus a state’s ability to achieve its substan-
tive purposes?”: Brilmayer at 76.
4. The part of Currie’s analysis that has had the least appeal to other scholars is his insist-
ence that in a “true conflict” case, in which both the forum country and a foreign country are
interested in having their respective internal rules applied, the court should always apply the
forum’s own rule. Currie thought that a court was neither competent nor constitutionally
authorized to weigh the respective values of the interests of two or more states, even if both
states were part of a federation. The only correct course was therefore to apply the rule of
the court’s own state, because there was no rational basis for doing anything else: Currie,
“Notes” at 181-82. This draconian view has found few adherents. Most writers prefer the idea
that, if two or more countries can be said to be interested in having their respective rules
applied in the case, there can be rational grounds for choosing among the countries’ rules.
In short, the result depends on the analysis of the “policies” represented by each country’s
rule and by the spatial dimension that is given to the “interests” of each country in having
those policies given effect in the particular case.
5. The most important distinction between Currie’s method and that of most of his
contemporaries (including Cavers) and successors is that Currie, more or less, restricted the
choice of law decision to a consideration of governmental interests. This is clear from his
five-point summary quoted earlier. According to his method, if the court finds that the forum
country has an interest, that effectively decides the issue because no competing interest of
another country can pre-empt the forum’s interest. The rule of the forum law should, there-
fore, apply. If the forum country has no interest but another country does have an interest,
the case is a “false problem” and the other country’s rule should be applied. If neither coun-
try has an interest in having its rule applied, the forum’s rule presumably applies by default
because there is no strong reason to displace it.
D. Principles of Preference
Aside from Currie, David F. Cavers has probably been the most influential publicist for new
choice of law methodology. In his major work on the subject, he eschewed the phrase “gov-
ernmental interests” because of its “misleading air of substantiality” (Cavers at 100) but
agreed with Currie’s argument that the starting point for a solution was to examine the
policies underlying the internal rules of law whose application is at stake. “The decisive fac-
tor in Prof. Currie’s method,” with which Cavers concurred, “is the finding that the applica-
tion of a law is reasonable in the light of the circumstances of the case and the policies the
law expresses”: Cavers at 102.
But, for Cavers, the reasonableness of applying one country’s rule rather than another’s
to a particular issue was more than just a question of determining the policies underlying
each rule of law, seeing whether those policies would be furthered by applying the rule in
the facts of the case, and dealing with any “true” conflict by applying forum law. A complete
methodology demanded more. In one of his best-known passages, he wrote (at 121-22):
If we are to avoid slipping into a chaos of essentially meaningless ad hoc decisions or, instead,
reverting to our inherited apparatus of mechanical, jurisdiction-selecting rules, I believe courts
and scholars must recognize that there is need for the development of rules and principles of
appropriate breadth to resolve the hard cases, those cases in which legislative purposes are
unclear or conflicting, cases which cannot be disposed of as posing either false conflicts or situ-
ations in which the claims of one state’s law to application are plainly preponderant. We may
have to accept the adequately articulated ad hoc decision as an interim substitute, but we
should persevere in the search for rules or principles which would determine when the law of a
state which served one purpose should be preferred to the law of another state which served a
different purpose. Such a rule or principle of preference would, of course, have to delimit the
range of circumstances under which the choice it called for would be made. Its protagonists
would have to justify it not only as a desirable accommodation of the conflicting laws of the
states involved but also as fair to the parties affected by the choice.
In his major work, Cavers formulated examples of the “principles of preference,” which he
argued should take the place of the traditional jurisdiction-selecting rules. These principles
of preference combine the basic assumptions of the governmental interest analysis with
other elements. Here is a principle of preference he proposed to deal with contractual cap-
acity (at 181):
Where, for the purposes of providing protection from the adverse consequences of incompe-
tence, heedlessness, ignorance, or unusual bargaining power, the law of a state has imposed
restrictions on the power to contract or to convey or encumber property, its protective provi-
sions should be applied against a party to the restricted transaction where (a) the person pro-
tected has a home in the state (if the law’s purpose were to protect the person) and (b) the
affected transaction or protected property interest were centered there or, (c) if it were not, this
was due to facts that were fortuitous or had been manipulated to evade the protective law.
Requirement (a) can be traced to the interest that the state with the protective rule is
assumed to have in protecting its “own” residents. So far, Currie would agree. But require-
ment (b) would give effect to that state’s interest only if the transaction was centred in that
state. To Cavers, this was desirable so as to “lead to little, if any, interference with ordinary
business activity in the nonprotective state: Cavers at 183. Thus, if the facts presented a
conflict between the protective state’s policy to protect the debtor with a home in the state
and the non-protective state’s interest in the security of transactions, Cavers’ solution was
always to give preference to the latter, irrespective of which state’s court was hearing the
case. Cavers, unlike Currie, was prepared to make an a priori judgment—as reflected in a
principle of preference—that one kind of state policy should be advanced at the expense of
another kind of state policy if, on the facts of the case, both policies are actually in play and
a choice must be made between giving effect to one or the other.
E. The Second Restatement

The Restatement (Second) of Conflict of Laws was published in 1971 under the reportership of
Professor Willis L.M. Reese. Its fundamental approach to choice of law reflected both the
governmental interest approach and the perception that other factors should also be part
of the choice of law equation. The core of its choice of law principles is §6:
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own
state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule
of law include
(a) the needs of the interstate and international system,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those
states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic principles underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.
Factors (b) and (c) reflect the governmental interest component of the scheme. Factor (a)
allows a court to shape its choice of law approach to further “harmonious relations between
states and to facilitate commercial intercourse between them.” (Comment (d) to §6, at 13.)
Factor (d) brings in the interests of the parties themselves. Factor (e) supports choice of law
decisions that promote the basic purposes of, for example, contract law or tort law, depend-
ing on the nature of the action. The remaining two factors encourage the development of
choice of law principles that can be applied with some consistency and predictability (fac-
tor (f)) and reasonable ease (factor (g)).
In relation to particular areas of choice of law, the Restatement translates the catalogue
of factors in §6 into “general principles.” In relation to particular issues, it states a presump-
tive solution that can be displaced by an evaluation of the §6 factors. For example, in §145,
the “general principle” relating to tort is as follows:
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by
the local law of the state which, with respect to that issue, has the most significant relationship
to the occurrence and the parties under the principles stated in §6.
(2) Contacts to be taken into account in applying the principles of §6 to determine the law
applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the
parties, and
(d) the place where the relationship, if any, between the parties is centered.
These contacts are to be evaluated according to their relative importance with respect to the
particular issue.
Then, for personal injuries, the following presumptive rule is given:

§146 In an action for a personal injury, the local law of the state where the injury occurred
determines the rights and liabilities of the parties, unless, with respect to the particular issue,
some other state has a more significant relationship under the principles stated in §6 to the
occurrence and the parties, in which event the local law of the other state will be applied.
The Restatement’s approach is therefore a set of compromises—among different meth-

odologies of choice of law and between having an open-ended decision-making approach
(§6) and specific rules (such as §146). Professor Brilmayer comments astringently (at 68):
The Second Restatement’s biggest problem may be its sponginess. The fact that there are three
levels of Restatement norms (Section Six, the general tort and contract principles, and the spe-
cific rules such as ones for insurance contracts) is problem enough, for it is not clear which level
is the appropriate one to refer to when the different levels of specificity conflict. To make things
worse, the rebuttable presumptions provide little or no guidance about what it takes for the
presumptions to be rebutted. The overall picture reminds one of the famous humorous defin-
ition of a camel: namely, a horse drafted by a committee. The Second Restatement has some-
thing for everyone, but that is precisely its problem. No matter what result you want to reach,
the Second Restatement provides support.
Whatever its weaknesses, the Restatement has added significantly to the climate of opin-
ion in the United States that favours re-examination, or outright rejection, of traditional
choice of law rules. It has been one of the catalysts for change. As far as tort choice of law is
concerned, its method has been adopted by about half the states and some other modern
approach has been adopted by many more: Hay, Borchers & Symeonides at 94. The Amer-
ican Law Institute has announced that it will begin work on a third Restatement on choice of
law, one of the hopes for which is that it will encourage a process of consolidation and
standardization among the wide range of approaches to choice of law that American courts
currently follow: Symeonides.
F. The “Better Law”

As §6 of the Restatement suggests by its factors (d), (e), and (f), a court can arguably base its
decision to apply country X’s law rather than country Y’s not only on considerations of the
respective interests of X and Y, but also on the court’s views of what will lead to a substan-
tively just result. A court can prefer the result that will better protect the parties’ expecta-
tions, that better reflects the “basic policies underlying the particular field of law,” and that
enhances “certainty, predictability and uniformity of result.” There exists a school of thought
that would take this to its logical conclusion and permit courts openly to prefer the rule that
the court thought was the “better law.” The original proponent of this idea was Professor
Robert A. Leflar. He acknowledges that “[s]uperiority of one rule of law over another, in terms
of socioeconomic jurisprudential standards, is far from being the whole basis for choice of
law, but it is one of the relevant considerations”: Leflar, McDougall & Felix at 297. In Leflar’s
view, it is better to be open about this element in the decision-making process rather than
to force judges to conceal their perception that one rule is substantively preferable to
another, a perception that is bound to influence their decision in any event.
G. Substantive Rules for Multistate Cases

Given the complexities and contradictions that have been encountered on the path of rein-
venting choice of law, some scholars have come to the conclusion that the whole notion of
a court having to choose between a rule of the law of country X and a rule of the law of
country Y is bankrupt. Rather, they suggest, a court should endeavour to devise a substan-
tive rule to deal with the specific problem of, for example, tort or contract in the context of
an interstate or international transaction. As one of the leading proponents of this view
(which he calls a “teleological approach”) has described it: “Rules of decision imported from
abroad would be presented to the court not as immutable precepts, but simply as models
which the forum should consider in framing an appropriate multistate rule”: Juenger at 286.
“The only choice of law approach still worth trying,” Juenger says, “is one that looks to values
that transcend state boundaries”: at 321. Over time, the specific substantive legal principles
developed by courts (or by legislatures) for resolving cross-border legal problems would
form a distinct branch of the law of contracts, the law of torts, and so on. Whatever the
abstract merits of this root-and-branch approach to resolving the choice of law puzzle, it has
so far proved too much of a break with the past—and probably too overt a venture in judi-
cial legislation—to command a great following among scholars or among courts.
H. Defenders of the Traditional System

It should be emphasized that by no means everybody agrees that the classical choice of law
method is unacceptable. Scholars from outside the United States, especially, have tended to
be skeptical of claims that the classical choice of law system should be totally revamped.
They tend to stress that it works relatively smoothly and, above all, provides reasonably
predictable results. The suggested alternative methods of choice of law tend to depend
heavily on case-by-case evaluation of the facts, interpretation of the policies underlying
competing internal legal rules, and value judgments about the rationality of applying those
rules to the facts. This is said to make the decision-making process a good deal less predict-
able than the traditional method and to expose it to the risk of manipulation by the judges
to suit their individual predilections.
A good representative of the traditionalists is Kahn-Freund. He criticized the argument
that choice of law decisions should be based partly or wholly on a comparison between the
results of applying one country’s internal law and the results of applying another’s. The trad-
itional choice of law rules have the merit, according to him, of being a relatively neutral
mechanism for deciding between the laws of different countries. Their operation does not
involve an assessment of whether the result of applying X law in the individual case is ration-
ally more appealing than the result of applying Y law. One just applies the law of the country
indicated by the connecting factor and that’s that. He said (at 153):
[A]s I am afraid of my own and of other people’s, especially judges’, inarticulated prejudices, I
prefer a clash between theory and practice, and even the reproach of hypocrisy, to the elevation
of Aristotle’s epieikeia [equity, or right proportion, as the spirit of the law] from an exception to
a rule, that is to a capitulation of the rule making to the decision making power.
In fact, the methodological debates about choice of law have been very much a common
law—or even North American common law—phenomenon. Scholars, courts, and legisla-
tures in civil law jurisdictions also grapple with the limitations of the classical method, but
the solutions there tend to be by way of adaptation rather than wholesale scrapping of the
choice of law apparatus. One experienced comparative lawyer has pointed to the different
views taken in civil and in common law traditions about the function of choice of law. He
links the difference to “the deductive, rule-based administration of law and justice in the civil
law as compared with the litigation-driven, the casuistic evolution of legal solutions in the
common law”: Hay at 392. His conclusion (at 394) is:
The divergence in American and European approaches to conflicts law therefore is only margin-
ally one of methodology. It continues to derive principally from different perceptions of the
goals and objectives of conflicts law.
V. THE PRESENT ORIENTATION OF CANADIAN CHOICE OF LAW

It is probably fair to say that the debates about choice of law methodology have made a far
bigger impression on the Canadian conflicts scholars than on the judges. One reason for this
is that it is tort cases, above all, that raise the tough methodological questions, and the sup-
ply of tort conflicts cases in Canada has been tiny compared with that in the United States.
Canada has only 13 provinces and territories, as compared with 50 states, so the volume of
cross-border tort cases is bound to be much smaller. In addition, except for Quebec, the
differences between the tort laws of the provinces have typically been less than those
between the tort laws of the American states. The Supreme Court of Canada has examined
the choice of law problem in depth only relatively recently: see Tolofson v Jensen, [1994] 3 SCR
1022 (reproduced in Chapter 12). It was a tort case. The result was a decisive and unanimous
rejection of the newer tendencies in the American courts in favour of a choice of law rule of
the classical type—namely, application of the law of the place of the tort. Predictability of
result, as so often, was at the forefront of the reasons for choosing the traditional path.
In Canada, therefore, at least up to now, the main value of the outpouring of scholarship
on choice of law methodology has not been as a guide to reinventing choice of law as a
working instrument, but as a way of seeing the underlying premises and limitations of the
classical method more clearly. As one recent survey of choice of law in the common law
systems concluded: Hartley at 204, “Excessive conceptualism should be avoided. What is
needed is open-minded thinking that focuses on the objectives to be attained in the area in
question—there is no single, over-arching policy objective in conflict of laws—and applies
the approach best suited to attaining them.”

American Law Institute. Restatement (Second) of Conflict of Laws (St Paul, Minn: American Law
Institute Publishers, 1971).
Bogdan, Michael. “Private International Law as Component of the Law of the Forum” (2010)
348 Rec des Cours 9.
Brilmayer, Lea. Conflict of Laws: Foundations and Future Directions (Boston: Little, Brown, 1991).
Castel, Jean-Gabriel. “The Uncertainty Factor in Canadian Private International Law” (2007)
52 McGill LJ 555.
Cavers, David F. The Choice-of-Law Process (Ann Arbor, Mich: University of Michigan Press, 1965).
Cook, Walter Wheeler. The Logical and Legal Bases of the Conflict of Laws (Cambridge, Mass:
Harvard University Press, 1942).
Currie, Brainerd. “Married Women’s Contracts: A Study in Conflict-of-Laws Method” in Currie,
Selected Essays on the Conflict of Laws (Durham, NC: Duke University Press, 1963) 77.
Currie, Brainerd. “Notes on Methods and Objectives in the Conflict of Laws” in Currie,
Selected Essays on the Conflict of Laws (Durham, NC: Duke University Press, 1963) 177.
Davies, Martin. “Renvoi and Presumptions about Foreign Law (comment: Neilson v Overseas
Projects Corp. of Victoria Ltd.)” (2006) 30 Melbourne UL Rev 244.
Falconbridge, John Delatre. Essays on the Conflict of Laws, 2nd ed (Toronto: Canada Law Book,
1954).
Gotlieb, AE. “The Incidental Question in Anglo-American Conflict of Laws” (1955) 33 Can Bar
Rev 523.
Gotlieb, AE. “The Incidental Question Revisited: Theory and Practice in the Conflict of Laws”
(1977) 26 ICLQ 734.
Gray, Anthony. “The Rise of Renvoi in Australia: Creating the Theoretical Framework” (2007)
30 UNSWLJ 103.
Greene, Janey. “Inflexibly Inflexible: Why Choice of Law in Tort Questions Still Won’t Go
Away” (2006) 33 Monash UL Rev 246.
Hartley, Trevor C. “The Modern Approach to Private International Law: International Litiga-
tion and Transactions from a Common-Law Perspective” (2006) 319 Rec des Cours 9.
Hay, Peter. “Flexibility Versus Predictability and Uniformity in Choice of Law” (1991) 226 Rec
des Cours 281.
Hay, Peter, Patrick J Borchers & Symeon C Symeonides. Conflict of Laws, 5th ed (St Paul, Minn:
West, 2010).
Hughes, David Alexander. “The Insolubility of Renvoi and Its Consequences” (2010) 6 J Priv
Intl L 195.
Juenger, Friedrich K. “General Course on Private International Law” (1985) 193 Rec des Cours
119.
Kahn-Freund, Otto. “General Problems of Private International Law” (1974) 143 Rec des Cours
139.
Kay, Herma Hill. “A Defense of Currie’s Governmental Interest Analysis” (1989) 215 Rec des
Cours 9.
Leflar, Robert A, Luther L McDougall & Robert L Felix, American Conflicts Law, 4th ed (Charlot-
tesville, Va: Michie, 1986).
Mortensen, Reid. “ ‘Troublesome and Obscure’: The Renewal of Renvoi in Australia” (2006) 2
J Priv Intl L 1.
Schoeman, E. “Renvoi: Throwing (and Catching) the Boomerang: Neilson v Overseas Projects
Corp. of Victoria Ltd.” (2006) 25 UQLJ 203.
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Canada, 2005) (loose-leaf).
CHAPTER TEN
Applying Foreign Law
I. Foreign Law and the Adversary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547

A. Foreign Law: Fact or Law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547
B. Implications of Party Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549
C. Where the Court Must Apply Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554
D. Where Foreign Law Must Be Excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
II. Pleading and Proving Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
A. Pleading Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
B. Proving Foreign Law Through Expert Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
C. Statutory Modes of Proof: Production of Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573
D. Admission or Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
E. Stated Case to Foreign Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
III. Within the Canadian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
A. Judicial Notice by the Supreme Court of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
B. Statutory Authority for Taking Judicial Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 576
C. Implications of the Constitutional Principles of Order and Fairness? . . . . . . . . . . 578
D. Pleading and Determining the Constitutionality of Extraprovincial Law . . . . . . 581
I. FOREIGN LAW AND THE ADVERSARY SYSTEM

A. Foreign Law: Fact or Law?
In common law courts, the responsibilities for assembling the relevant facts and the law are
divided between the parties and the judge. On the one hand, the parties have primary
responsibility for introducing the facts that will comprise the “record” of the case. They are
free to introduce into evidence what they regard as helpful facts and to leave any other
potentially relevant evidence to be introduced by the other party if it chooses to do so. This
is their role under the principle of party prosecution in the adversary system. On the other
hand, the judge has primary responsibility for determining the relevant legal principles and
how these principles apply to the facts, at least within the bounds of the theory of the case
as it is advanced by the parties.
There is some overlap in these roles. Judges may ask follow-up questions to verify their
understanding of the witnesses’ testimony, always taking care not to interfere with the par-
ties’ right to fashion the record as they see fit. And once the record has been established,
counsel make submissions on the law, bearing in mind both the obligation to alert the court
to all relevant authorities and the court’s entitlement to conduct its own legal research and
make its own pronouncements on the law, subject only to correction by an appellate court.
547
548 Chapter 10 Applying Foreign Law
In this context of divided responsibilities, foreign law is an anomaly. Of course, no one

genuinely mistakes it for anything but law. However, in the common law tradition, the pri-
mary responsibility for introducing foreign law into the adjudication has historically been
allocated to the parties and not to the court. As a result, the common law approach has been
described as treating foreign law as a “fact.”
This approach is unusual. In most European and Latin American legal systems foreign law
is treated as law; and it is applied ex officio by the court whether or not it is invoked by the
parties. Although the parties assist in ascertaining the foreign law that is to be applied, the
court has the final word. Information and opinions on the relevant foreign law may be
sought by the court from university-based comparative law institutes (a role fulfilled in
Germany by the Max Planck Institute for Foreign and International Private Law) with the
expense charged to the parties as part of the court costs: see further Sass; Dolinger; Hartley;
and Hausmann for a comparative analysis. In addition, the European Convention on Foreign
Law (“the London Convention”) provides a system to assist national courts in determining
the application of a foreign law in cases having a private international law component: see
further Rodger & Van Doorn. And where the court appoints an expert on the applicable
foreign law, the parties may seek the opportunity to pose follow-up questions or to commis-
sion their own expert opinions to supplement the court-appointed expert.
The common law approach of allocating primary responsibility for the introduction of
foreign law (“treating foreign law as a fact”) has wide-ranging practical implications for the
resolution of disputes in common law courts. While the term “choice of law” could create the
impression that the court chooses which country’s law to apply from a range of available
laws in much the same way as it identifies the appropriate legal doctrines or authorities from
the law of the forum, nothing could be further from the truth. The “choice,” where there is
one to be made, is usually a choice between the law of the forum, which will apply by
default, and a particular foreign law. The foreign law in question will apply only if counsel
decide that it is in the interests of their clients’ case to persuade the court that it should apply
it by reason of the relevant choice of law rules, and to apprise the court of the way in which
the application of that law affects the issues to be determined.
Some of the implications of applying foreign law in an adjudicatory system based on
party-prosecution are identified in the following excerpt.
Richard Fentiman, Foreign Law in English Courts:

Pleading, Proof and Choice of Law
(Oxford: Oxford University Press, 1998) at 3-5 (footnotes omitted)
[F]oreign laws are facts not laws. As such, they are beyond the scope of judicial notice,
being unknown and unknowable to the judge. Secondly, being facts, foreign laws must
be formally proved, generally by expert evidence, for a judge is unaware of their content.
Thirdly, being facts, foreign laws are subject to such principles of pleading as govern other
facts. This means that one who relies upon foreign law must expressly plead it, but, equally,
one who does not so rely need not do so. Fourthly, if foreign law is not pleaded, or is
pleaded but not adequately proved, a court will apply English law instead, for knowing
only English law it presumes foreign law to be the same.
• • •
I. Foreign Law and the Adversary System 549
[B]ecause courts are unaware of foreign law, they cannot know its content unless it is
pleaded and explained by a qualified expert. Nor can a court do anything but apply English
law when the proof of foreign [law] has failed, being ignorant of its content and knowing
only English law. Certainly, a court’s lack of notice of foreign law ensures that it cannot
properly undertake its own researches so as to establish foreign law itself. But this is not
to say that the English approach follows merely from a court’s lack of notice of foreign
law, nor even from the bare designation of foreign laws as facts. For what matters is not
that foreign laws are facts, but what this implies in English law. It is not inevitable, for
example, that a court should apply English law when the proof of foreign law has failed.
English law could as easily have responded by insisting that such a defective claim or
defence should simply be dismissed. Again, the picture might have been different had
English law committed itself to the principle iura novit curia, or to the application of the
lex causae as a matter of ordre public, or to a doctrine of parity between local and foreign
laws, or to a style of adjudication more interventionist than adversarial in which courts
may introduce issues ex officio. But English law did not do so. Instead its approach to
foreign law owes everything to the fact that, at the time when it became increasingly
necessary for courts to consider foreign law, it had already adopted the position that the
doctrine of judicial notice extended only to English law.
NOTES
1. Fentiman suggests that foreign law is treated as a fact both because, as a practical mat-
ter, courts are unaware of the contents of the law to be applied and because this approach
is a product of a position taken by the courts regarding the extent of judicial notice that
could be taken. To what extent do you think the approach is dictated by the logistical chal-
lenges of understanding the law in foreign legal systems? To what extent do you think the
approach is a tradition that is sound in principle and that should not be revisited?
2. Could it be both? Arguably, one fundamental historical difference between adjudica-
tion in the civil law and the common law is that civil law judges are mandated to apply the
provisions of the code (at least, where there is a code) to resolve the disputes before them
and common law courts have been mandated to resolve the disputes before them and, in so
doing, to draw on and contribute to the growing body of precedents. Could this particular
focus—on resolving the dispute rather than applying a pre-defined law—help to explain
why the need to supplement the available legal principles with relevant foreign legal prin-
ciples would seem to be something that could be left to the parties to determine as best
suits them?
B. Implications of Party Choice

What are the practical implications of subsuming the application of relevant foreign legal
rules under the principle of party prosecution? Should the matter be left entirely to the par-
ties to determine in the course of presenting their claims and defences to the court? Con-
sider the following case involving a dispute in which the parties’ agreement that the law of
British Columbia would apply was not performed in the course of adjudicating their dispute.
Old North State Brewing Co v Newlands Services Inc

[1999] 4 WWR 573 (BCCA)
FINCH JA:
[1] The defendant, a BC company, appeals the order … to enforce a judgment in favour
of the plaintiff granted by a North Carolina court for damages for breach of contract,
unfair trade practices, and other causes of action. The North Carolina court, applying the
provisions of a North Carolina fair trade statute, awarded treble damages and additionally
awarded punitive damages. The contract between the parties contained a clause concern-
ing choice of forum and choice of law as follows:
17. GOVERNING LAW
This Agreement will be governed by and interpreted in accordance with the laws of the
Province of British Columbia, Canada and the parties will attorn to the jurisdiction of the
Courts of the Province of British Columbia, Canada.
• • •
[14] … A Default Judgment was … issued against the defendant in favour of the
plaintiff by the North Carolina Court … .
• • •
[16] … [T]he plaintiff was awarded compensatory damages which were then trebled
pursuant to a North Carolina unfair trade practice statute. The court also awarded punitive
damages and attorney’s fees. The total judgment in favour of the plaintiff against the
defendant was US$1,188,474.13 together with interest accruing thereon at the rate of
6.06% per annum until paid.
[17] The defendant did not attorn to the jurisdiction of the North Carolina court, nor
did it contest its liability in that court. Neither the interpretation, nor the application of
British Columbia law was brought to the attention of the North Carolina Court.
[18] The plaintiff then brought this action in the British Columbia Supreme Court for
recognition and enforcement of the judgment of the North Carolina court. …
• • •
[20] In granting judgment in favour of the plaintiff, the learned summary trial judge
held that the contractual provision committing the parties to attorn to the jurisdiction of
the courts of British Columbia was not an exclusive choice of forum clause. Rather, the
paragraph granted concurrent jurisdiction to British Columbia courts with any other
court in which the matter was properly brought. He found that the North Carolina court
did have jurisdiction as a result of there being a real and substantial connection between
the cause of action and the state of North Carolina.
[21] The learned summary trial judge also held that although the contract provided
that British Columbia law was to govern the transaction, the defendant’s failure to defend
the proceeding in North Carolina and to prove British Columbia law as a matter of fact,
resulted in the North Carolina court being obliged to apply North Carolina law in the
absence of evidence of a different stipulation by the law of British Columbia.
• • •
[38] The defendant contends that even if the courts in North Carolina had jurisdiction,
they were bound by the provisions of clause 17 to apply British Columbia law. The defend-
ant submits that this was so even though it chose not to defend the suit in North Carolina.
It argued that the plaintiff had a duty to draw clause 17 to the attention of the North Caro-
lina court, and to adduce evidence in the North Carolina court as to the applicable law
of British Columbia. No authority was cited for this proposition, but the defendant
submits that to now permit the plaintiff to enforce the judgment based on North Carolina
law, would, in effect, be to condone the plaintiff ’s breach of contract.
[39] So far as the courts of North Carolina were concerned, BC law was foreign law.
Foreign laws are questions of fact which must be proven by evidence of persons who are
experts in that law. … If foreign law is not proven, it is assumed to be the same as the law
of the forum … . No burden of proof lies on the plaintiff to adduce evidence of foreign
law … .
[40] In this case, the defendant was properly served with the originating document
in the North Carolina action. If the defendant wished to rely on particular provisions of
British Columbia law to govern the proceeding in North Carolina, it had the option to
plead in the North Carolina action that British Columbia law was applicable and to prove
that law to the satisfaction of the North Carolina court. In the absence of such pleading
and proof, the North Carolina court had no obligation to make its own inquiries and
attempt to apply British Columbia law. As the North Carolina court had jurisdiction to
try the action, it had to assume that the law of British Columbia was the same as the law
of North Carolina in the absence of proof to the contrary.
[41] In any event, the defendant failed to defend the North Carolina action, despite
the opportunity to do so. In determining whether or not to enforce the North Carolina
judgment, it is not open to the British Columbia courts to question the judgment on the
merits, or to refuse to recognize and to enforce it because of any perceived error of law or
fact. The North Carolina judgment is to be treated as conclusive and unimpeachable in its
finding and application of both facts and law. The only forum in which any alleged error
by a North Carolina court could be raised is the North Carolina court itself, or in the
court of appeal from that court. An alleged error of law or fact is not a ground on which
a British Columbia court can refuse to recognize and enforce a foreign judgment … .
[42] Here, the defendant not only failed to appear to defend the action in North Caro-
lina, it made no attempt to set that judgment aside. No appeal was taken from the North
Carolina judgment. No effort was made in BC to obtain an anti-suit injunction against
the enforcement of the North Carolina judgment on the ground that it did not apply BC
law, or upon any other ground.
[43] In my respectful view, the North Carolina court was correct in applying North
Carolina law as though it were the same as the law in British Columbia. But even if it
erred in law, it is not open to the defendant to take that objection in this court. The learned
summary trial judge did not err in deciding this issue as he did. …
NOTES
1. The conclusion that “it is not open to the defendant to take that objection [that the
foreign court applied the wrong law] in this court” seems inevitable in light of the proscrip-
tion on reviewing the merits of foreign decisions in actions to enforce them. Is it also right to
say that a foreign court is correct to apply its own law in the face of a governing law clause
of the parties’ contract to the contrary? Such an occurrence would seem unlikely in a civil law
country where the judge would apply the governing law ex officio.
2. In the alternative, would it be reasonable to say that where the parties have notice of
the proceeding in a common law court, by omitting to introduce foreign law, they should be
taken to have waived their right under the contract to have some law other than that of the
forum apply? An Ontario court took this approach to a dispute involving a contract with a
choice of law clause in favour of Swedish law where the parties did not lead any evidence on
Swedish law: see Morgardshammar AB v HR Radomski & Co Ltd (1983), 145 DLR (3d) 111
(Ont HC), aff’d (1984), 5 DLR (4th) 576 (Ont CA).
3. Although counsel is under a professional duty to investigate the ramifications of
invoking foreign law, there may exist sound reasons of strategy, cost, or convenience for
choosing not to invoke foreign law. Fentiman (1992) at 149-52 identifies the following pos-
sibilities. First, it may be pointless to plead the foreign law—for example, because there is no
legal advantage to so doing, the foreign and the forum position on the particular points in
dispute between the parties being identical. Unless counsel is confident that the foreign and
forum law differ materially, it would be imprudent to impose the costs of unnecessary proof
on the client. Second, even where an apparent legal advantage exists, the time and expense
involved in proving the foreign law may outweigh the advantages to be obtained. Third,
counsel may decide to avoid foreign law because the outcome of its application is unpredict-
able, either because of the existence of conflicting expert views on the content or effect of
the foreign law or because the forum’s own choice of law rules on a particular issue are less
than firmly established: for a more detailed discussion, see Fentiman (1998) at 164-72.
4. Does the omission to prove a law other than that of the forum that is indicated by a
common law choice of law rule reflect a permissible choice on the part of the parties? Con-
sider the reasoning of the Supreme Court of Canada’s observations in the following excerpt
from its decision in Pettkus v Becker.
Pettkus v Becker
[1980] 2 SCR 834 at 853-54
DICKSON J (Laskin CJ and Estey, McIntyre, Chouinard and Lamer JJ concurring):

I would not wish to conclude without reference to the conflict of laws question lurking
in the background in this case. The evidence discloses that the parties were domiciled in
the province of Quebec from 1955 until at least August, 1971, when vacant property was
purchased in East Hawkesbury, Ontario. It is arguable that the laws of province of Quebec,
and not those of Ontario, should govern the rights of the parties. This point was not
pleaded, nor was it addressed by court or counsel in any of the earlier proceedings. It was
not alluded to during agreement in this court.
The position in law would seem to me to be as stated by Professor Jean Castel, in “Droit
international prive quebecois” (Butterworths, 1980, pp. 803-4). Although, before an
inferior court, the law of another province in Canada has to be proven in the same manner
as the law of a foreign country, that rule does not have application in an appeal to this
court. This court follows the rule drawn by the House of Lords in the case of Cooper v.
Cooper (1888), 13 App. Cas. 88 (HL), and takes judicial notice of the statutory or other
laws prevailing in every province and territory in Canada even in cases where such statutes
or laws may not have been proved in evidence in the courts below. This court, however,
does not take judicial notice of the law of another province unless that law has been
pleaded in the first instance. As Cannon J held in Canadian National Steamships Co., Ltd.
v. Watson, [1939] 1 DLR 273 at p. 278, [1939] SCR 11 at p. 18, it would be unfair for this
court to take, suo motu, judicial notice of the statutory laws of another province, ignored
in the pleadings.
NOTES
1. Notice that the Supreme Court observed that it can take “judicial notice of the statu-
tory or other laws prevailing in every province and territory in Canada even in cases where
such statutes or laws may not have been proved in evidence in the courts below.” In its
special role of establishing precedents that are binding on all the common law jurisdictions
in Canada, it seems appropriate that the Supreme Court be mandated to take into account
the laws of those jurisdictions. The special considerations that might apply to other issues of
“foreign” law within the Canadian federation are considered later in this chapter.
2. In Holt Cargo Systems Inc v ABC Containerline NV (Trustees of), 2001 SCC 90, [2001] 3 SCR
907, the Supreme Court confirmed the parties’ ability to agree not to rely on applicable for-
eign law as follows:
[50] … [I]t was up to Holt to prove Belgian law if Holt wished to rely on any difference
between the expected treatment of its claim under Belgian law as opposed to Canadian law.
The trial judge noted the absence of evidence on this point. However, as the parties were appar-
ently in agreement that Belgian law would not recognize Holt’s maritime lien both before [the
trial judge and the Court of Appeal], I do not think we should interfere with the Federal Court of
Appeal on this factual point.
3. In Tolofson v Jensen, [1994] 3 SCR 1022 at 1053, the Supreme Court reiterated that in
cases where the application of foreign law is indicated by a common law choice of law rule,
“the parties may either tacitly or by agreement choose to be governed by the lex fori if they
find it advisable to do so” by omitting to plead or prove the relevant foreign law.
4. Even if the parties did not turn their minds to it, a question of fairness could arise in
relation to the introduction of foreign law to a case only at the appellate stage. For a case
where the Supreme Court declined to entertain an argument based on the application of the
law of a province other than the province from which the appeal emanated because it had
not been pleaded or argued at first instance, see The Upper Ottawa Improvement Co v Hydro-
Electric Power Commission (Ontario), [1961] SCR 486.
5. Why does the Supreme Court suggest in this case and in Pettkus v Becker and Holt that
it would be unfair to take judicial notice of laws of another province that were ignored in the
pleading or to raise the potential application of foreign law? Could that be because, as an
appellate court that cannot reopen the record, a determination that different legal principles
should be applied could give rise to the need to consider evidence that the parties could not
now place before the court? Would the same principle apply to a court of first instance? In
other words, should a court also be constrained from raising the potential application of
foreign law when the parties are first presenting their respective cases where this could
affect the evidence that the parties had prepared to tender?
C. Where the Court Must Apply Foreign Law

Although foreign law is usually considered to be part of the claims and defences that the
parties are free to raise or not as they choose, this is not always the case. For example, in
some areas of law, statutes provide for the application of a particular law. Of course, no issue
arises where the parties duly plead and prove the law of the place identified in the statute,
but what if they do not? The Federal Court of Appeal considered this in the following excerpt
from The Mercury Bell, in which the Canada Shipping Act called for the matter to be governed
by the law of the ship’s registry, but that law was not pleaded or proved.
Fernandez v “Mercury Bell” (The)

[1986] 3 FC 454 (CA) (footnotes incorporated)
[The plaintiffs, Filipino nationals, had been hired in Manila to work on the M/V Mercury
Bell under individual employment contracts, but later learned that a “Special Agreement”
and “Collective Agreement” had been entered into between the owners of the Mercury
Bell and the International Transport Workers’ Federation (ITF) setting minimum wage
rates that were higher than they were being paid. Eventually, they decided to leave the
ship when it was docked in Montreal and sue in the Federal Court of Canada for the
difference. At first instance, the motions judge held that they were entitled to enforce the
terms of the ITF agreement on the basis that a collective labour agreement always super-
sedes employees’ individual contracts, but, on appeal, the shipowners argued that the
court was obliged to apply Liberian law to determine this.]
MARCEAU J (Lacombe J concurring):

… That, in a Canadian context, a collective agreement within the meaning of Canada
Labour Code, RSC 1970, c. L-1, would supersede individual contracts, is too well-settled
today to be questioned. The point here, of course, is that the context is not Canadian; this
ship flies a Liberian flag, the crew is Philippino, the contracts of employment were signed
in Manila, and the agreement sought to be enforced was executed in Australia. The ship
was arrested in Canada which gave the Canadian court jurisdiction, but that alone
obviously does not mean that Canadian law is applicable. Of course, when a Liberian ship
engaged in international trade happens to call at a Canadian port, the ship does not
become a federal undertaking and her crew a collective bargaining unit governed by the
Canada Labour Code.
There is no doubt that to determine the rights of seamen against the owners of the ship
on which they are serving, which is the subject matter of the action, the law of the ship’s
port of registry is to be looked at. … [S]. 274 of the Canada Shipping Act, RSC 1970,
c. S-9, … reads as follows:
274. Where in any matter relating to a ship or to a person belonging to a ship there
appears to be a conflict of laws, then, if there is in this Part any provision on the subject that
is hereby expressly made to extend to that ship, the case shall be governed by that provision;
but if there is no such provision, the case shall be governed by the law of the port at which
the ship is registered.
That this action must be disposed of on the basis of the law of Liberia is therefore
without question. … It so happens, however, that the law of Liberia was not proven before
the court, the parties having omitted to do so, and this is what causes the difficulty in this
case.
It is well-known that in countries governed by English law, a court is not entitled to
inquire proprio motu as to the content of the foreign law on the basis of which an action
brought before it should be disposed of. The court will not in principle take judicial notice
of foreign law; it will not even consider foreign law as an ordinary fact (which it is not,
in any event) about which it may require the parties to adduce satisfactory evidence. If
the parties, wilfully or inadvertently, fail to bring expert evidence of the foreign law, the
court will act as if the foreign law is the same as its own law, it will apply the lex fori. This
rule is peculiar to English law. It is contrary to that followed in other countries such as
France, where the judge is not only entitled to take judicial notice of the foreign law but,
at least according to the leading doctrine, is even required to do so in view of the public
order character of the rules of conflict of laws … . But it is a rule traditionally followed
by common law judges. (Although there are in Canada particular provincial legislations
which more or less interfere with it. …) The problem with this jurisprudential rule is that,
however old, basic and simple it may be, its real meaning and scope have never been
completely defined. What is still unclear is whether the lex fori applicable should include
the statute law or be limited to the common law. …
• • •
[T]his problem of the content of the lex fori applicable in the absence of proof of the
foreign law is generally seen as turning on a simple choice between the common law and
statute law. This is at least how it is presented by the commentators and while a few
contend that the common law alone is to be considered, most do not accept that statute
law can be excluded. A few quotations will help clarify the position of the two groups. In
Johnson, W.S. Conflict of Laws (2d Ed. 1962), we read at p. 54:
But it is also the English rule, followed in the United States and in the English law provinces,
that in the absence of proof of the foreign law it will not be presumed to be similar to the
statutory law of the forum where the conflict is to be decided. Like the rule, the exception,
seeing their common source, is followed in Quebec.
• • •
In Castel, J.-G., Canadian Conflict of Law (2d Ed. 1986), at pp. 145-46:
85. Absence of proof
If foreign law is not proved, it is assumed to be the same as the lex fori. This seems to
include statutes as well as the law established by judicial decision.
Where a foreign statute has been proved by admission, in the absence of proof to the
contrary, the court will assume that the rules of construction in the foreign country are the
same as those of the lex fori.
Some Canadian courts have doubted whether they are entitled to presume that the foreign
law is the same as the statute law of the forum. Thus, a distinction has sometimes been made
between the general foreign law, which in the absence of proof is presumed to be the same
as the lex fori, and the case where the lex fori has recently been changed by statute. In the
latter case the common law is applied unless the person who asserts that it does not prevail
proves it.
The presumption of identity, which is nothing more than a rule of convenience, should
be rejected. It would be better to say that in all cases, where foreign law is not proved, the
lex fori will prevail as the only law available.
• • •
On reviewing the relevant case law, however, one is inclined to doubt that the Canadian
judges have ever seen the resolution of the difficulty in quite the same light as the com-
mentators, i.e., as implying a clear choice between common law and statute law. …
• • •
In fact, I have not been able to find any significant judgment where the problem has
been dealt with on the basis of a clear distinction between common law and statute law.
What has appeared constant to me, however, in reading the cases, is the reluctance of
judges to dispose of litigation involving foreign people and foreign law on the basis of
provisions of our legislation peculiar to local situations or linked to local conditions or
establishing regulatory requirements. Such reluctance recognizes a distinction between
substantive provisions of a general character and others of a localized or regulatory
character; this distinction, a distinction formally endorsed I think by Cartwright J, in the
two passages I have just quoted, is wholly rational, which is more than can be said of a
simple division between common law and statute law. This English jurisprudential rule
that, in the absence of proof of the foreign law governing the case, the judge will apply
the law of the forum should not and cannot be seen, it seems to me, as a pure abandon-
ment of the rule of conflict, as if a rule of conflict was so unimportant that its application
could be left to the whim of the parties. In fact, it is not a genuine rule of conflict; the situ-
ation is in no way comparable to that which exists in the case of a renvoi, where the foreign
law refers back to the law of the forum It is a rule strictly related to the incidence of evi-
dence. The court does not repudiate the premise that the case is governed by and has to
be decided on the basis of the foreign law, but simply says that insofar as it is formally
aware, the foreign law is similar to its own law. It is, as noted by Castel, a pure rule of
convenience, and one which, it seems to me, can be rationally acceptable only when lim-
ited to provisions of the law potentially having some degree of universality. In my view,
there lies the solution to this case.
The law of Liberia is the law which is applicable here. We have no proof of that law, so
we must presume that it is similar to our law, but only insofar as the substantial provisions
thereof are concerned. Looking at the Canada Labour Code, it seems to me that the provi-
sions recognizing the role of labour unions, giving effect to collective agreements and, as
interpreted by the courts, recognizing the right of each individual employee to sue for his
wages under the agreement (The Hamilton Street Railway Company v. Northcott, [1967]
SCR 3) are fundamental and have that potential degree of universality, while the others,
namely those dealing with the role of the Canada Labour Relations Board and the require-
ment of arbitration for the settlement of disputes, are linked to Canadian circumstances
and purposes. I therefore consider that the ITF agreement has full force and effect under
Liberia law as it would have under the basic provisions of our Labour Code, regardless of
the fact that provisions for arbitration were not spelled out in it.
So, my conclusion finally is the same as that reached by the motions judge. His order
must, therefore, in my view, be sustained.
I would deny the appeal with costs.
NOTES
1. When the court in The Mercury Bell did not receive the parties’ assistance in fulfilling
the statutory mandate to apply the law of the flag, it had various options. The court could
have ignored the statutory requirement to apply the law of Liberia and instead could have
applied the relevant local law as if the requirement to apply foreign law did not exist.
Alternatively, it could have identified the relevant applicable law and conducted its own
research so as to apply that law. The court, however, chose a third option—that of applying
the law of the forum of general application (potentially including both common law and
statutory provisions). Do you agree with this approach? Would it be suitable in every
instance of statutorily mandated applications of foreign law where the applicable law is not
pleaded or proved by the parties?
2. In Royal Trust Corp of Canada v AS (W) S, 2004 ABQB 284, 35 Alta LR (4th) 32, the Alberta
Court of Queen’s Bench took a similar approach to the Federal Court in The Mercury Bell. The
court was asked by a trustee to provide advice and directions in the administration of a trust
that the settlor had expressed to be governed by the law of the Commonwealth of Massa-
chusetts. Under the Hague Convention of July 1985 on the Law Applicable to Trusts and on Their
Recognition, which had been enacted in Alberta, the trust was to be governed by the law
chosen by the settlor, but none of the parties adduced any evidence of the law of Massachu-
setts. Citing the decision in The Mercury Bell, the court held at paras 30-31:
[W]here the applicable foreign law is not proved to the court’s satisfaction, the court should
apply the general law of the forum, including provisions of statutory law that have some degree
of universality, but not provisions of a localized or regulatory character, which should be
excluded because they are particular to the forum.
In this case, the interpretation of the dispositive clauses of the Instrument will depend
mainly upon the application of rules of construction, which are universal in nature. In the
absence of proof of the law of Massachusetts, this court should apply the law of Alberta in deal-
ing with this application for advice and directions. While there is a concern that this fails to take
account of the Donor’s express intention that the Trust be governed by the law of Massachu-
setts, I have concluded that it is not inappropriate in this case to apply the Alberta law. I reach
this conclusion based on the lack of factors connecting this Trust to Massachusetts, on the
universal nature of the rules of construction to be applied and on the principles relating to proof
of foreign law as described by Castel and by Mr. Justice La Forest in Tolofson.
3. In The Mercury Bell and Royal Trust, the mandate to apply foreign law was found in a
statute, but there may be other reasons for the application of foreign law. Royal Trust sug-
gests one of them—the existence of an international obligation to apply a particular law.
Although this may give rise to interesting issues, beyond the scope of this discussion, of the
extent to which international law applies directly, it highlights other sources of the obliga-
tion to apply some law other than that of the forum. Fentiman (1998) suggests at 80-82 that
the English view that the pleading of foreign law is a voluntary matter for the parties may
have to be qualified in the light of the 1980 European Community Convention on the Law
Applicable to Contractual Obligations (“the Rome Convention”), which appears to make it
mandatory in contract cases for a court to consider which law applies to a contract by virtue
of the Convention.
4. Some common law commentators have advocated the mandatory application of for-
eign law ex officio to issues (such as status) that incorporate an element of public policy: see
e.g. Hay, Borchers & Symeonides at 607, n 4 and 608, n 8. A Canadian court expressed sym-
pathy for that proposition in the context of annulment proceedings involving a Polish mar-
riage but, in the circumstances, ultimately declined to order proof of Polish law: see Feiner v
Demkovicz (falsely called Feiner) (1973), 2 OR (2d) 121 (H Ct J).) In the United States, Weintraub
notes two exceptional decisions where the court unilaterally invoked foreign law: see Wein-
traub at 88, n 46. On the implications (if any) of the obligation of the courts to give full faith
and credit to sister-province laws on their ex officio authority to invoke foreign law, see the
discussion in Section III.C, “Implications of the Constitutional Principles of Order and
Fairness?”
5. To ease the litigation burdens in the field of family support, the provinces and territor-
ies of Canada have adopted uniform legislation to facilitate the determination and enforce-
ment of interjurisdictional support obligations. The legislation is designed to streamline the
process of determining the entitlements and enforcing the obligations of parties residing in
one province or territory whose dependants reside in reciprocating jurisdictions in Canada
and abroad. In a legislative scheme of this sort, it is important to minimize the cost to liti-
gants of matters such as pleading and proving foreign law. As a result, provisions such as
those below have been included.
Interjurisdictional Support Orders Act, 2002

SO 2002, c 13
Terminology
46. If, in a proceeding under this Act, a document from a court in a reciprocating
jurisdiction contains terminology different from the terminology in this Act or contains
terminology or is in a form different than that customarily in use in the Ontario court,
the Ontario court shall give a broad and liberal interpretation to the terminology or form
so as to give effect to the document.
Judicial notice of law of reciprocating jurisdiction

47(1) In a proceeding under this Act, the Ontario court shall take judicial notice of
the law of a reciprocating jurisdiction and, where required, apply it.
Proof of enactment
(2) An enactment of a reciprocating jurisdiction may be pleaded and proved for the
purposes of this Act by producing a copy of the enactment received from the reciprocating
jurisdiction.
Proof of appointment
48. In a proceeding under this Act, a document purporting to be signed by a judge,
officer of a court or public officer in a reciprocating jurisdiction is, unless the contrary is
proved, proof of the appointment, signature and authority of the person who signed it.
II. Pleading and Proving Foreign Law 559
Receipt in evidence
49(1) Statements in writing sworn to by the maker, depositions or transcripts of evi-
dence taken in a reciprocating jurisdiction may be received in evidence by an Ontario
court under this Act.
D. Where Foreign Law Must Be Excluded

In some circumstances, the courts will not apply foreign laws even if they are otherwise
applicable and properly proven. Such is the case when the foreign law is penal in nature—a
determination made by the lex fori: see McIntyre Porcupine Mines Ltd v Hammond (1975), 31
OR (2d) 452 (H Ct J). Also, courts will neither directly nor indirectly enforce the revenue laws
of another country: see United States of America v Harden, [1963] SCR 366. A foreign law may
further fail to apply where it is fundamentally offensive to the public policy of the forum: see
Spencer v The Queen (1983), 145 DLR (3d) 344 (Ont CA), aff’d [1985] 2 SCR 278, 21 DLR (4th) 756;
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5), [2002] 2 AC 883 (HL) (reproduced in
Chapter 4); for a more detailed discussion, see Chapter 4.
II. PLEADING AND PROVING FOREIGN LAW

A. Pleading Foreign Law
Under the classic common law view, if the decision is made to rely on foreign law, it must be
pleaded or the relevant evidence will not be admitted at trial. “Otherwise there is no oppor-
tunity for the person against whom the issue is raised to prepare to meet it”: see Winbigler v
Winbigler (1953), 10 WWR (NS) 131 at 136 (BCSC).
In some jurisdictions, the requirements of formal pleading have been relaxed. The United
States Federal Rules of Civil Procedure states in r 44.1: “A party who intends to raise an issue
about a foreign country’s law must give notice by a pleading or other writing.” To a similar
effect at the state level, see §4.01 of the Uniform Interstate and International Procedure Act, 13
ULA, approved by the National Conference of Commissioners on Uniform State Law in the
United States in 1962.
Even where there has been no formal relaxation of the pleading standards, liberal
approaches to the availability of amendments to pleadings, coupled with case management
and rules concerning expert witnesses that call for early notice of the intention to tender
expert evidence, tend to minimize the impact of formal pleading requirements on the par-
ties’ ability to introduce foreign law.
Nevertheless, the foreign law must be pleaded with sufficient particularity for the oppos-
ing party to understand the case that it must meet. In cases where applying foreign law is
not merely a question of pleading and proving a relatively simple legal rule that will be dis-
positive of the result, the need to plead it may go beyond alerting the opposing party to the
intention to do so. In such cases, questions may arise as to the adequacy of the pleading in
permitting the opposing party to appreciate the case it must meet.
Yordanes v Bank of Nova Scotia

(2006), 78 OR (3d) 590 (Sup Ct J)
[The plaintiffs commenced a class proceeding in Ontario on behalf of purchasers of bonds

issued by an Argentinian bank that was said to have been controlled by a Bahamian cor-
porate subsidiary of a Canadian chartered bank. The three corporations were said to have
operated as a single economic entity. The pleadings included many references to Argentin-
ian law with varying degrees of detail. The defendants moved to strike the statement of
claim as disclosing no reasonable cause of action because the references to foreign law
were not sufficiently particularized.]
CULLITY J:
[8] While the defendants do not deny that the complexity of the issues complicates
the task of pleading the plaintiffs’ case, they submit that it does not detract from the
importance to be attributed to the defendants’ ability to discern the case they have to meet
before they are required to plead. It is, their counsel submitted, imperative that the rules
of pleading be observed. They submit that the statement of claim falls far short of the
mark. They point to the plaintiffs’ apparent intention to rely on numerous causes of action
under the several different legal systems I have mentioned. They submit that many are
deficient because of inadequacies in the pleading of foreign laws, or a failure to plead
other material facts. Some, in their submission, are obviously untenable in law in that,
for example, they are based on Canadian statutes that are not intended to have extra-
territorial application, while the existence of others is said to be contrary to—or contra-
dicted by—the contents of documents incorporated into the statement of claim, or by the
plaintiffs’ responses to a demand for particulars delivered by the defendants. They describe
the statement of claim as fragmented and confusing, and replete with allegations devoid
of context, and conclusions devoid of particulars.
[9] The defendants’ objections to the pleading are so numerous, and comprehensive,
that their counsel submitted that the appropriate order would be to strike the statement
of claim in its entirety. I intend to make such an order not only because many of counsel’s
specific objections appear to me to be well-founded but, also, because the paragraphs of
the pleading tend to be inter-related. To strike them—or parts of them—individually
would not be satisfactory because of the effect this would have on other parts of the
pleading. Words would need to be inserted and this would involve an exercise in redrafting
the statement of claim that the court cannot properly undertake. …
[10] Many of the difficulties that would confront the defendants if they were expected
to plead to the statement of claim in its present form relate to the manner in which foreign
law has been pleaded. The extent to which details of the foreign laws have been provided
varies enormously. In some instances—such as in the references to the Consumer Protec-
tion Law of Argentina in paras. 51-56—a considerable amount of detail has been provided.
In other instances, a particular statute, or decree, has been relied on to support a conclu-
sion that the defendants had, or breached, a duty without any description of the provisions
of the governing law. In several paragraphs the alleged effect of the laws of a number of
different jurisdictions are referred to indiscriminately with the intention—nowhere
indicated in the pleading—that whichever law is found to be applicable will be presumed
to be the same as the laws of Ontario. Even where the intention to rely on the laws of
Argentina as applicable to aspects of certain claims is evident, it is, at times, not clear
whether such laws are intended to govern all aspects of the same claims. The problems
created for the defendants when attempting to understand the case they have to meet
with respect to particular claims on the basis of the descriptions of foreign law are exacer-
bated because of the necessity to cross-refer to other parts of the very lengthy pleading
to identify the material facts, including the relevant rules of foreign law.
[11] Provisions of foreign law referred to in a statement of claim are generally pleaded
as material facts on which the plaintiff relies. Material facts must be pleaded with sufficient
certainty to enable a defendant, and the court at trial, to identify the issues to be decided.
The degree of detail and precision required can, obviously, be determined only on a case-
by-case basis. In this case, the plaintiffs have referred to more than 50 provisions—Articles
and sections—of numerous Argentine statutes identified by name, and more than 25 from
other sources referred to variously as Decrees, General Resolutions, Laws and Acts with,
usually, a number and year attached. In my judgment, even if it is sufficient to plead only
the tenor and effect of the provisions—a question that I will consider—a significant
number of these references would fall short of an acceptable degree of particularity and,
as many of them interact and are relied on in combination, they—and other aspects of
the pleading of governing laws—produce an unacceptable lack of certainty.
• • •
[13] I do not discount the degree of difficulty involved in pleading foreign law to the
extent required by the facts and the nature of the plaintiff ’s claims. Nor do I intend to
disparage the quantity, or the quality, of the efforts made by plaintiffs’ counsel to produce
an acceptable pleading in this complex case. The plaintiffs have, however, chosen to pursue
in this court their claims under foreign laws, with all the complications and difficulties
created by the rule that such laws must be pleaded and proven as facts, and not in the
courts of Argentina—the jurisdiction with which the claims have the most obvious factual
connection and where judicial notice could be taken of the laws on which, for the most
part, the plaintiffs rely. The correct resolution of some of the issues raised by defendants’
counsel is by no means obvious and I have not found clear answers in the authorities. The
issues include, but are not confined to, the particularity with which foreign law is to be
pleaded in a case such as this. They extend, also, to the manner in which the plain and
obvious test in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, 74
D.L.R. (4th) 321 is to be applied to determine whether a pleading discloses a reasonable
cause of action under a foreign law. These questions are not answered by a simple recita-
tion of the established rule that foreign law must be pleaded and proven as a matter of
fact.
[14] It is, I think, clear that special difficulties can arise if the plain and obvious test
under rule 21.01(1)(b) is to be applied to a pleading that relies heavily on the contents of
foreign laws. … The rules for choice of law presuppose that foreign law can be satisfac-
torily pleaded and proven. The court cannot, however, take judicial notice of foreign law;
it must be pleaded, and proven, as a matter of fact. It follows that, in applying rule
21.01(1)(b), and in determining whether a reasonable cause of action has been disclosed,
the court must treat the contents of the foreign law, as pleaded, as the material facts relied
on for this purpose. Unless, however, the court must accept, as a fact presumed to be
correct, a plaintiff ’s assertion that a cause of action arises under foreign law—and, on that
ground alone, dismiss a motion under rule 21.01(1)(b)—such material facts must be
applied as prescriptive rules that are asserted to be—though at trial may be found not to
be—the determinative rules of the foreign law. The question for the court would then be
whether a reasonable cause of action is disclosed under the supposed rules when they are
applied to the other facts pleaded. For this purpose the court must, in a sense, apply the
supposed rules. This is a significantly different exercise than that performed by a court
on a motion under rule 21.01(1)(b) when the existence of a cause of action is to be deter-
mined by an application of the laws of this jurisdiction, and no questions of foreign law
are involved. …
[15] Other special features of motions to strike under rule 21.01(1)(b) where foreign
law has been pleaded relate to the choice of law and the application of the rules of plead-
ing. The rules governing the choice of law are part of the common law of Ontario and I
believe they cannot be ignored on a motion under rule 21.01(1)(b). If the plaintiffs have,
for example, pleaded a cause of action under a foreign law and it is plain and obvious that
the facts pleaded would not justify the application of such law, the pleading must be struck.
For this purpose, material facts that could justify the plaintiffs’ choice of such laws under
the conflicts rules of Ontario must, in my opinion, be pleaded and any other relevant
requirements of rule 25.06 must be observed. The fact that evidence might throw light
on, and determine, the correct choice of law is not to the point. The question on this
threshold pleadings motion is whether the plaintiffs’ choice could be established by the
facts pleaded on the assumption that they will be proven at trial.
[16] In this connection, I should mention that, at the commencement of the hearing,
I denied Mr Charney’s request that certain of the issues raised by the defendants should
be deferred to be dealt with at the hearing of the motion to certify the proceedings under
the CPA. As it is accepted that the test to be applied under s. 5(1)(a) of the CPA is the
“plain and obvious test” applicable on motions under rule 21.01(1)(b), I saw no reason
why all of the defendants’ submissions on the application of the rule should not be heard
together. It also appeared to me that, in view of the number and the nature of the defend-
ants’ objections to the statement of claim, and their counsel’s submission that it should
be struck in its entirety, it would be undesirable to proceed to the certification stage until
the status and contents of the pleading were clarified.
[17] The other point is that, although the Rules of Civil Procedure must be applied for
the purpose of a motion to strike, the manner of their application must reflect the substan-
tive elements of the foreign law and not those of the forum. If, for example, liability in
tort for negligent misrepresentation under a foreign system of law is pleaded, the substan-
tive rules of that law as set out in the pleading—and not those of the law of Ontario—
might well affect decisions on what the pleading must contain. The nature, and degree,
of the difficulty of the exercise that the court has to perform, without the assistance of
evidence—or, as on this motion, the text—of the foreign law must, I believe, increase the
difficulty of obtaining an order to strike under rule 21.01(1)(b) by an application of the
plain and obvious test. The question whether the text of a foreign law must be set out, or
incorporated, in a pleading is considered later in these reasons.
[18] The difficulties in adapting the plain and obvious approach to causes of action
that are said to arise under foreign law are such that, while preparing these reasons, I have
more than once doubted whether motions under rule 21.01(1)(b)—in which evidence is
inadmissible—provide an appropriate procedure for determining whether a reasonable
cause of action under foreign law has been disclosed in a pleading. A motion to determine
a question of law under rule 21.01(1)(a), with leave to adduce evidence of foreign law,
would be an alternative if the question can be distinguished from the one of fact involved
in determining the contents of such law. Motions under this rule have been made in the
past to determine whether a foreign law is applicable and, in some cases, the court has
taken the next step and determined the effect of a foreign law on an agreed statement of
facts: see, for example, Craig v. Allstate Insurance Co. of Canada (2002), 59 O.R. (3d) 590,
[2002] O.J. No. 2124 (C.A.) where the court construed a statute of the State of Florida and
concluded that it did not negate a cause of action that had been pleaded. The procedure
under Rule 20 could provide a further alternative.
[19] I note, again, that if an express, or implied, plea that a cause of action existed
under a particular foreign law is to be treated as itself a statement of fact that must be
presumed to be correct, there would appear to be no room for an application of rule
21.01(1)(b) to determine whether a cause of action existed under such law. It would seem
to follow that the procedures under rule 21.01(1)(a) or Rule 20 would have to be utilized
if a party wished to have the question determined before trial. Whether or not that is so,
it would, I believe, be preferable, as a general rule, to have such questions decided on the
basis of evidence of the foreign law—rather than on the court’s conclusion from a possibly
erroneous, or incomplete, description pleaded—and, in consequence, I believe either of
the alternative procedures would usually be more appropriate.
• • •
[33] The statement of claim contains numerous references to the laws of Argentina,
including specific statutes such as the Civil Code, the Corporate Bonds Act, the Stock
Exchanges and Securities Markets Act, the Commercial Companies Act, the Consumer
Protection Law and the Bankruptcy Law. There are also general references to Argentine
securities laws and Argentine jurisprudence, as well as to the laws of England, the Baha-
mas and New York.
[34] Counsel were agreed that the content of foreign law must be pleaded and proven
as a matter of fact. They disagreed on the requirements of pleading for this purpose. Two
particular issues arise. The first concerns the manner in which the statutory, or codified,
laws of a foreign jurisdiction must be pleaded; the second is whether it is permissible to
plead that the laws of a foreign jurisdiction apply without more—on the assumption that
this court will then apply the laws of Ontario.
[35] On the first question, the decision of Senior Master Marriott in The Bryant Press
Ltd. v. Acme Fast Freight Inc., [1951] O.W.N. 665 (H.C.J.) was that a particular statute, or
code, and the sections relied on, should be cited with a statement of their tenor and effect
added. …
• • •
[38] In Bryant, the issue concerned the pleading of a statute and it was not suggested
that different rules apply to statutes and other sources of law. Nor is any such distinction
referred to by Castel and Walker. Mr Peebles, however, submitted to the contrary. In his
submission, the authorities that I should follow require the parties to set out in their
pleading the words of the statutes on which they intend to apply. …
• • •
[44] As, on a motion under rule 21.01(1)(b), the court must assume that the facts
pleaded will be proven—and is not concerned with whether they are accurately
described—one might wonder why a plaintiff should ever be required to plead the actual
text of a foreign law. If, under the rule, the court is generally only concerned with the facts
as they are asserted to be, why should it not apply the same approach when foreign law
is pleaded? An answer, I believe, must be that the text of foreign laws will be required
when this is necessary to achieve an adequate degree of certainty to enable the opposing
party to plead. Moreover, if … the court can interpret the provisions of a foreign statute
in some cases, it may be that in order to determine whether a cause of action under such
a statute has been disclosed, it should require the text, and not merely a plaintiff ’s assertion
of its tenor and effect.
[45] Whether or not there is an inflexible rule that the text of all relevant statutory
provisions must be set out—or annexed to—a pleading, it appears to me that, in some
cases, this will be the most appropriate—as well as the most prudent and the simplest—
approach for counsel to adopt.
[46] I accept the submissions of defendants’ counsel that, in order to enable their
clients to plead in defence to the claims pleaded in this case, a translation of the text of
the provisions of all statutes and other written laws, decrees and resolutions on which
they intend to rely must be pleaded—and, preferably, incorporated by reference, rather
than inserted in the statement of claim. In my judgment, this is the only way in which an
acceptable degree of certainty can be achieved for the purpose of permitting the defend-
ants to plead. The number of the references to foreign law and the interaction between
them when they are relied on in combination, presents an unacceptably confusing picture.
I doubt whether the burden this will impose on plaintiffs’ counsel will be any greater than
that which would be involved in ensuring that a description of the contents of the laws—
one that would be binding on the plaintiffs at trial—was both an accurate and adequate
reflection of their tenor and effect. Particulars of foreign jurisprudence are to be provided
only where the plaintiffs have pleaded reliance on it. In such cases, it will be sufficient to
identify it and to describe the principles or propositions it is alleged to establish.
[47] The other preliminary issue on which counsel disagreed is whether it is permis-
sible for the plaintiffs to plead reliance on the laws of particular jurisdictions without
identifying particular laws or legal propositions. They have, for example, referred in
different parts of their pleading to the laws of England, the Bahamas and New York
without further detail or elaboration. Mr Charney explained that this was done on the
assumption, and with the intention, that, in the absence of evidence of such laws, the laws
of this jurisdiction will be applied.
[48] Such references do not satisfy the rules for pleading of foreign law that I have
mentioned. The defendants are entitled to insist that the plaintiffs’ position with respect
to foreign law is indicated clearly in their pleading. If the plaintiffs intend to rely on the
laws of Ontario, they should not plead that the laws of other jurisdictions apply without,
at least, also pleading that they are the same—or will be assumed by the plaintiffs at trial
to be the same—as the relevant laws of Ontario.
• • •
[51] In a case where the problems of choice of law may be crucial, and are undoubtedly
complex, I do not believe it is sufficient simply to invite the defendants—and the court at
trial—to select one of the competing jurisdictions identified in the statement of claim.
The plaintiffs must, in my opinion, either plead that the laws of a particular jurisdiction
apply—either without more, or in the alternative to those of other identified jurisdic-
tions—as well as the factual basis for each such plea, or rely specifically on the
presumption of similarity. Rule 25.06(4) permits a party to make inconsistent allegations

in a pleading but only “where the pleading makes it clear that they are being pleaded in
the alternative.”
• • •
[155] This action is unusual not merely for the number of foreign jurisdictions whose
laws may be applicable, but more particularly because of the degree of reliance placed on
numerous statutes and laws of one such legal system. Although no jurisdictional challenge
has been made, the difficulties of pursuing the claims in this court are formidable and, in
my opinion, the plaintiffs have not succeeded in meeting the threshold requirements for
pleading their case.
[156] The end result is that I have accepted the defendants’ submission that they
should not be required to plead in defence to the statement of claim in its present form. …
If the plaintiffs choose to file a fresh statement of claim they will, of course, have the
opportunity to address these criticisms to the extent that they may have any application
to its contents.
B. Proving Foreign Law Through Expert Evidence

At common law, foreign law must be proved as a matter of fact by the evidence of persons
who are experts in that law. In the absence of agreement or statutory authority, it is insuffi-
cient simply to place the text of the relevant foreign statute (even when authenticated),
judicial decision, or other authority before the court. Written sources and references are
normally admissible only when introduced in support of the evidence of expert witnesses,
in which event “the passages and references cited by them will be treated as part of their
testimony”: see Allen v Hay (1922), 64 SCR 76 at 80-81.
The most frequently quoted statement of who is qualified to act as an expert witness on
foreign law remains that by Falconbridge (1929) at 400, later reproduced in Falconbridge
(1954) at 833. Distilled from English and Canadian case authorities, Falconbridge’s rules posit
two classes of expert witnesses: first, those who have practised or applied the relevant for-
eign law as lawyers or judges, and second, law teachers and others whose office or position
requires them to have a working knowledge of the relevant foreign law. Examples of wit-
nesses who have qualified within this latter class include police officers, government offi-
cials, and even business persons. However, the court has a discretion to apply the “best
evidence” rule so as to require evidence by somebody in the first class. The issue of who is
(or is not) qualified to act as an expert witness is said to have generated more litigation than
any other in this area: see further Wood at 71-73; Klotz at 9-10; Walker, ch 7; and Collins, ch 9.
Expert evidence need not always be led by oral testimony. In cases where the personal
attendance of the foreign expert would be disproportionately costly or otherwise inconven-
ient or impracticable, the evidence may be taken abroad by commission: see Wood at 73-74;
Klotz at 11; and Walker at para 7.3, n 3. Foreign law may also be proved by the affidavit of an
expert if the parties consent or the forum’s rules of court allow, as they often do, as of right
for interlocutory proceedings and either as of right, or by consent, or court order for trial: see
Wood at 74; Walker at para 7.3, n 10; Walker points out that, in some provinces, expert affida-
vits are not sufficient as proof of foreign law.
The court is not required to accept at face value the evidence of the parties’ experts on
foreign law. The witness may be found to lack the necessary credentials to testify as an
expert. Even when the foreign expert is evidently well qualified, the court reserves discre-
tion to assess both the materials tendered and the interpretation of them proffered by the
expert in forming its own opinion of the foreign law on the basis of the whole of the evi-
dence before it. The scope of that authority is sometimes debated but it reflects the court’s
basic responsibility to weigh the evidence and assess its reliability, particularly where there
is conflicting evidence or, even when uncontradicted, it lacks credibility as “extravagant,”
“obscure,” “obviously false,” or manifestly inconsistent with the authorities cited: see e.g.
Murphy Estate v MNR, [1974] 28 DTC 6394 at 6400 (FCTD), and Allen v Hay (1922), 64 SCR 76 at
80-81. When the evidence of two experts conflicts, is the judge entitled to reject both and
to conduct independent research as might be done for a question of the law of the forum?
What if the judge is perfectly capable of reading the authorities for himself or herself?
Bumper Development Corp Ltd v Commissioner of Police of the Metropolis

[1991] 1 WLR 1362 (CA)
PURCHAS LJ:
In August or September 1976 … Ramamoorthi who lived in a hut near the site of a
ruined Hindu temple at Pathur in the state of Tamil Nadu was excavating sand or similar
material when his spade struck a metal object. … The object which Ramamoorthi struck
formed part of a series of bronze Hindu idols later identified as members of a “family”
and was a major idol known as a Siva Nataraja. We shall refer to the Siva Nataraja as the
“Pathur Nataraja” and the assembly of idols as the “Pathur bronzes.” The overwhelming
probability is that they formed part of the religious objects in the temple which had been
endowed in the late thirteenth century by a Hindu notable called Avui Thiru Viswanatha.
It was later accepted by all parties that the temple had lain in ruins and unworshipped for
a matter of centuries.
… Ramamoorthi realized that he had discovered objects of value. He reburied them
temporarily in the same pit and contacted a friend called Dorai. Dorai came to Pathur,
inspected the find and departed saying that he would find a buyer.
• • •
On 10 June 1982 Bumper purchased in good faith the London Nataraja from a dealer
called Sherrier. It is common ground that Sherrier produced a false provenance of the
Nataraja for the purpose of the sale. It was whilst it had been sent to the British Museum
for appraisal and conservation that the London Nataraja was seized by the Metropolitan
police as part of a policy of returning religious artefacts, which it was thought had been
stolen, to their owners in India. Bumper brought the action against the Commissioner of
Police of the Metropolis and two of his officers in detinue and conversion claiming the
return of the Nataraja and damages. The present proceedings result from the position
taken by the defendants as interpleaders and the addition of others as “claimants” to the
London Nataraja. Returning to the temple site at Pathur, amongst the surviving ruins and
materials there was a stone object of religious worship known as a Sivalingam. In the
normal Hindu temple of this period this stone would have been positioned in the sanctum
and would be the focus of religious worship. It is a carefully fashioned stone object rep-
resenting a phallus. It has survived and was discovered amongst the ruined remains of
the temple. Since the inception of these proceedings it has been reinstated as an object of
religious worship at the site of the temple. …
The issue which was tried by the judge related to the title possessed by the various
parties to the London Nataraja. The matter fell for consideration into two separate stages,
namely (1) were the London Nataraja and the Pathur Nataraja one and the same object?
and (2) if, and only if, it was established that they were, did any of the claimants have a
title to the Nataraja superior to Bumper’s? The judge delivered his judgment in two parts
accordingly and in this court the argument has been dealt with in the same way.
… On the second stage the judge held that the fourth claimant, namely the temple,
suing by its fit person, custodian or next friend, the third claimant, had proved a title to
the Nataraja superior to that of the title of Bumper.
… Bumper seeks a retrial of that part of the trial of the issue relating to the legal cap-
acity in India of the temple and/or the Sivalingam to hold title to property and pursue an
action in England either directly or through the third claimant in respect thereof.
• • •
It is clear that the true status in Hindu law of the third, fourth and fifth claimants in
the sense that they can enjoy a title to the Nataraja is central to the issues raised. We
propose to use the expression “juristic entity” as being a person, body of persons or object
who or which is recognized by the law concerned as being capable of enjoying legal pos-
session of or title to an object and of suing or being sued in respect thereof.
Ian Kennedy J reviewed at length not only the evidence of Hindu law as set out by
textbook writers and in Judgments delivered in the Indian courts, but also the oral evi-
dence given before him by the expert witnesses before reaching his conclusions as to
which claimants would be acceptable as juristic entities in the courts of Tamil Nadu, and
whether, and if so in what circumstances, such a party could claim a title to the Nataraja.
However, before coming to consider the evidence on this aspect of the case, it is conven-
ient to consider the position in the English courts. It is trite law that foreign law in our
courts is treated as a question of fact which must be proved in evidence. In the absence
of any evidence to the contrary, it is to be assumed to be the same as English law. It is
however the duty of the judge when faced with conflicting evidence from witnesses about
a foreign law to resolve those differences in the same way as he must in the case of other
conflicting evidence as to facts.
What is not so plain, however, is how he should deal with documentary evidence in
the form of textbooks and reports of judgments and decisions in foreign courts. Ian Ken-
nedy J expressed a firm view when rejecting the evidence upon one issue over which both
expert witnesses were agreed. This was to the effect that the third claimant did not have
a sufficient continuity of association with the temple to qualify as a “de facto” trustee:
I think they are both mistaken, and have failed to read in their true import the judgments
to which I have just referred [Reddy v Reddy AIR 1967 SC 436 and Vikrama Das v Daulat
Ram AIR 1956 SC 382]. It is well settled that the English courts will take the exposition of
its own law by the Supreme Court of another jurisdiction as wholly authoritative, and an
opinion to be preferred to that of any witness; that I do.
Unfortunately, the learned judge did not refer to any authority for this proposition, nor
were we in argument referred to any such authority. Mr. Calcutt QC attacked this part of
the judgment and in our view rightly so. This proposition as stated without qualification
does not find any support in Dicey and Morris, The Conflict of Laws (11th ed., 1987), r. 18,
p. 217:
(1) In any case to which foreign law applies, that law must be pleaded and proved as a
fact to the satisfaction of the judge by expert evidence or sometimes by certain other means.
(2) In the absence of satisfactory evidence of foreign law, the court will apply English law to
such a case.
The propositions in the notes to this rule, so far as relevant to this appeal, are based on
well-established authority …
(1) “An English court will not conduct its own researches into foreign law” (Dicey and
Morris, p. 222). See Duchess Di Sora v. Phillipps (1863), 10 HL Cas. 624 at 640, 11 ER 1168
at 1175 per Lord Chelmsford:
It seems, however, rather questionable whether the judge has a right to resort to the foreign
law itself for information, when the evidence of the witnesses is not satisfactory to his mind.
The witnesses are at liberty to adduce, in support or confirmation of their testimony, text
books, decisions of the foreign courts, or rather authorities, which, becoming a part of their
evidence, may enable the Judge to form his own opinion upon the particular text of foreign
law thus laid before him. But it seems contrary to the nature of the proof required in these
cases, that the Judge should be at liberty to search for himself into the sources of knowledge
from which the witnesses have drawn, and produce for himself the fact which is required to
be proved as a part of the case before him. As my noble and learned friend, Lord Brougham,
said in the Sussex Peerage Case ((1844) 11 CL & Fin 85 at 115, [1843-60] All ER Rep. 55 at
62), “the Judge has not organs to know and to deal with the text of the foreign law, and
therefore requires the assistance of a lawyer who knows how to interpret it.”
(2) “If the evidence of several expert witnesses conflicts as to the effect of foreign
sources, the court is entitled, and indeed bound, to look at those sources in order itself
to decide between the conflicting testimony” (Dicey and Morris, p. 223). See Earl Nelson
v. Lord Bridport (1845), 8 Beav. 527 at 537, [1843-60] All ER Rep. 1032 at 1036 per Lord
Langdale MR:
Such I conceive to be the general rule; but the cases to which it is applicable admit of great
variety. Though a knowledge of foreign law is not to be imputed to the Judge, you may impute
to him such a knowledge of the general art of reasoning, as will enable him, with the assist-
ance of the bar, to discover where fallacies are probably concealed, and in what cases he ought
to require testimony more or less strict. If the utmost strictness were required in every case,
justice might often have to stand still; and I am not disposed to say, that there may not be
cases, in which the judge may, without impropriety, take upon himself to construe the words
of a foreign law, and determine their application to the case in question, especially, if there
should be a variance or want of clearness in the testimony.
• • •
(3) The Court of Appeal, whilst slow to interfere as in all cases where the decision
involves findings of fact, may in appropriate cases be somewhat more ready to question
the trial judge’s conclusions than in normal cases …
The approach of the Divisional Court in Parkasho v. Singh was approved in the Court
of Appeal in Dalmia Dairy Industries Ltd. v. National Bank of Pakistan [1978] 2 Lloyd’s
Rep. 223 at 286 per Megaw LJ:
But a finding of fact on an issue of foreign law is a finding of fact of a very different character
from the normal issue of fact: we would adopt as correct the observations of Mr. Justice
Cairns (as he then was) in Parkasho v. Singh ([1967], 1 All ER 737 at 746, [1968] P 233 at
250) as to the position of an Appellate Court on a matter of this kind. An Appellate Court
must not by uncritical acceptance of a trial Judge’s conclusions of fact shirk its function of
considering the evidence afresh and forming its own view of the cogency of the rival conten-
tions, whilst of course always remembering that the trial Judge had the undoubted initial
advantage of having seen and heard the witnesses.
With these authorities in mind we have come to the conclusion that the learned judge
was not entitled to reject the evidence of the experts … [or] to rely upon his own researches
based on passages from Mukherjea Hindu Law of Religious and Charitable Trusts (1951)
without having the assistance of the expert witnesses and the submissions of counsel.
However, when the transcript of the evidence of one of Bumper’s three witnesses, a Mr.
Yadivelu, a commissioner and secretary to the Government of Tamil Nadu, is considered,
it is clear that the paragraphs to which the judge referred had already been referred to by
Mr. Yadivelu in his reports and were adopted by him in evidence. There is therefore
admissible evidence in support of the paragraphs in the textbook upon which the Judge’s
research was based. Mr. Calcutt’s submission therefore becomes largely academic. …
NOTES
1. In Bumper, the court was an English court interpreting the law of India. In that situation,
the texts referred to by the experts were likely to be treatises and common law judgments
written in English. Indeed, authorities from the English courts formed part of the precedents
relied on in the cases referred to by the experts. One can imagine how the judge might have
been tempted to think that he could read the cases and textbooks and interpret the law for
himself without relying on the experts. However, it is also easy to see why such an ad hoc
approach could yield unreliable results. Think of some of the more controversial or complex
precedents that you have studied in your courses this year, particularly those that gave rise
to lively debate in class discussion. Would you assume that a person who was trained in
another legal system would readily be able to interpret the status and import of those pre-
cedents in a reliable manner without the guidance of someone who had a working know-
ledge of the Canadian legal system and Canadian law?
2. The role of the tribunal in ascertaining the content of the applicable law in inter-
national commercial arbitrations is particularly challenging in view of the likelihood that one
or more members of the tribunal and one of the parties or their counsel will be trained in the
applicable law, but not all the members of the tribunal or all the parties and their counsel. In
its report for the Biennial Conference in Rio de Janeiro (August 2008), the Committee on
International Commercial Arbitration (ICA) examined the principle of iura novit curia (“the
judge knows the law”). In view of the lack of a shared understanding (or ignorance) of the
applicable law, the ICA Committee was concerned to fashion a series of recommendations
to safeguard against the issues of ultra petita—that a result could flow from considerations
of which the parties were unaware, or deliberations in which the parties did not have
adequate opportunity to participate.
3. Turning to a different challenge, what of the testimony of experts whose legal systems
are so different from that of the forum as to make the evidence of the law difficult to appreci-
ate? How should a court respond? Until recently, it was accepted that the lex fori applies by
default in cases where the foreign law is pleaded but insufficiently proved, as where the
witness fails to cite any authority for bald general statements: see Lear v Lear, [1973] 3 OR 935
at 941 (H Ct J), rev’d on other grounds (1975), 5 OR (2d) 572 (CA), and Westgate v Harris, [1929]
4 DLR 643 (Ont CA). Jurisdictions that accept the “foreign law as law” doctrine generally also
apply the lex fori in cases where the foreign law is impossible to ascertain as a practical mat-
ter: Dolinger at 238. The Law Reform Commission of Canada (LRCC), in its Report on the Law
of Evidence (1975), advocated giving the court another option—to dismiss the action: see
LRCC, Model Evidence Code (MEC), s 84(3). That recommendation was rejected in the 1982
Report of the Federal – Provincial Task Force on Uniform Rules of Evidence (RURE) at 53-54: see
also Hay, Borchers & Symeonides at 611-12, commenting on two American decisions where
the plaintiff’s claim was dismissed on default of proof of the foreign law.
4. Before the reform of the Civil Code of Quebec, courts in Quebec applied the lex fori in
cases where the foreign law was insufficiently proved. As with the common law presumption
that the forum’s law was identical to the foreign law, this approach was seen as leading to
awkward results. In the new Code, art 2809(2) gives more discretion to the courts to manage
a case where proof of the foreign law is inadequate: see Goldstein & Groffier at paras 99-100.
5. Consider the way in which this issue was approached in the following excerpt from the
decision of the Court of Appeal of Western Australia in Neilson, which was reversed on other
grounds by the High Court of Australia.
Mercantile Mutual Insurance (Australia) Ltd v Neilson

[2004] WASCA 60, rev’d (sub nom Neilson v Overseas Projects Corp
of Victoria Ltd) [2005] HCA 54
[While in China and staying in accommodations that had been provided by her husband’s
employer, Ms. Neilson suffered serious injuries when she fell off a landing on a flight of
stairs that had not been equipped with a balustrade. She sued the Australian company
responsible for maintaining the premises.]
McLURE J:
The trial Judge determined that the contract between Mr Neilson and OPCV [his
employer] was made in Victoria, that it contained an express term that OPCV would
maintain the accommodation in China in a reasonably fit condition for use as a residence
and that OPCV had breached that term because of the danger posed by the lack of a
balustrade at the top of the stairs. The trial Judge also found that Mrs Neilson was unable
to take the benefit of Mr Neilson’s contract with OPCV and that there was no express or
implied term in Mrs Neilson’s contract with OPCV relating to the provision, or standard,
of accommodation in China. There is no appeal from these findings.
The trial Judge then considered Mrs Neilson’s tortious claim. As previously noted, he
determined that the lex loci delicti should apply and that the place of the wrong was China.
Chinese Law and Legal System

Foreign law is a question of fact, not of law. It must be proved by a person who is expert
in that law. OPCV called Mr Hongliang Liu, the holder of a Bachelor of Laws from
Shanghai University, a Master of Laws from Macquarie University and a partner in a
Shanghai law firm. The trial Judge found him to be a relevantly qualified expert and an
honest and impartial witness. Mr Liu was the only expert called to give evidence concern-
ing Chinese law.
Mr Liu explained that Chinese law does not know of a doctrine of precedent and that
it finds its source within what we would regard as statutes or legislation. The trial Judge
found that the relevant legislation applicable to Mrs Neilson’s claim was the General
Principles of Civil Law of the People’s Republic of China adopted at the Fourth Conference
of the Third National People’s Congress on 12 April 1986 with effect from 1 January 1997
(“General Principles”). The Intermediate People’s Court in Wuhan had jurisdiction over
claims of the type made by Mrs Neilson.
• • •
Whether Claim Is Time Barred

It was accepted by all parties that matters affecting limitation are part of the substantive
law to be determined by the lex loci delicti and not a matter of procedure to which the lex
fori applies. Articles 135, 136 and 137 of the General Principles deal with limitation. They
materially provide:
Article 135 The period of limitation of actions on a request to the People’s Court for the
protection of civil rights is two years, unless otherwise stipulated by law.
Article 136 In the following cases, the period of limitation of action shall be one year:
(i) demand for compensation for bodily harm …
Article 137 The period of limitation of action shall be calculated from the time it was
known, or should have been known, that a right was infringed upon. If more than twenty
years have passed, however, since the date of the infringement of the right, the People’s Court
shall offer no protection. The People’s Court may, under special circumstances, extend the
period of limitation of actions.
This action was commenced in 1997. Accordingly, it was time barred in the absence
of the grant of an extension of time under Article 137 of the General Principles.
Mr Liu gave evidence that limitation periods are substantive under Chinese law and
operate to extinguish a cause of action as that is understood under Australian law. The
trial Judge, having regard to Article 137, rejected Mr Liu’s evidence concerning the
extinguishment of the cause of action. The trial Judge also rejected Mr Liu’s evidence that
limitation periods are substantive under Chinese law although he appears to link that
evidence with the issue of extinguishment. However, there is no suggestion the trial Judge
was characterising the limitation issue as procedural to which the lex fori applies and the
parties do not contend for that position. Nothing of significance to this appeal turns on
the trial Judge’s rejection of Mr Liu’s evidence in this regard.
It was Mr Liu’s uncontradicted evidence-in-chief that the relevant legislation applicable
to the determination of this case was the General Principles and the “Opinion of the
Supreme People’s Court on Implementation of the General Principles.” The latter provides
detail as to how the broad statements of rights and obligations in the General Principles
are to be implemented. It is also apparent that the Supreme People’s Court is a superior
court in the Chinese judicial hierarchy than the Intermediate People’s Court of Wuhan.
Mr Liu also gave uncontradicted evidence concerning Article 137. …
The trial Judge did not deal with all aspects of Mr Liu’s evidence relating to Article
137. He said (at [187]-[191]):
As to [Article 137], Mr Liu gave evidence:
“That’s a possibility. There are possibilities, so there is a way for the court to extend the
limitation, but that’s impractical … .”
The limitation, Mr Liu explained, is if the right-holder cannot exercise his right of request
due to the objective barriers during the legal time limitation period.
In my judgment the 20 year limitation period is absolute and would bar any claim com-
pletely. However a People’s Court may exercise discretion to extend a period of limitation
within a period of 20 years where there are special circumstances.
I am not a People’s Court. I am a Western Australian Judge applying Chinese law as my
criterion and in accordance with principles of fairness and justice. I am not bound by any
precedent.
In my opinion there are special circumstances why the limitation period should be
extended under Chinese law.
The special circumstances relied on by the trial Judge included the following: the par-
ties are Australian nationals, both were in China on a temporary project, Mrs Neilson
returned to Australia in 1992 and lived there thereafter, OPCV was aware at an early stage
of Mrs Neilson’s intention to commence proceedings and OPCV suffered no (relevant)
prejudice if the limitation period was extended.
There is no finding or suggestion by the trial Judge that Mrs Neilson was prevented by
any objective barrier from commencing proceedings within the limitation period. Indeed,
there is no evidence to support such a finding. In substance the trial Judge rejected Mr
Liu’s evidence as to what constitutes special circumstances, based as it was on the opinion
of the Supreme People’s Court.
An Australian court should only in exceptional circumstances make a finding about
the meaning and effect of a foreign statute contrary to the uncontradicted evidence of a
qualified expert in the law of that country: … It would be appropriate to reject the uncon-
tradicted evidence of such an expert if it was patently absurd or inconsistent with higher
judicial authority in the country concerned.
However, there is a distinction between identifying and expounding in general terms
the scope, meaning and effect of relevant statutory foreign law and giving an opinion as
to how that foreign law applies to the facts of a particular case, the latter impinging upon
the essential curial function: …
The trial Judge did not identify any relevant exceptional ground on which to reject Mr
Liu’s evidence. None have been identified. Further, the evidence was not of such a nature
as to impinge on the essential curial function. A reason given for the rejection of Mr Liu’s
evidence concerning Article 137 is that the trial Judge was not a People’s Court but a
Western Australian Judge. The implication is that the content and interpretation of Chi-
nese law differs according to whether the decision-maker is part of the Chinese judicial
system or the Australian judicial system. That cannot be correct. The trial Judge’s role in
construing Article 137 is to make findings of fact based on the expert evidence. Further,
the Opinion of the Supreme People’s Court cannot be put to one side or ignored on the
basis that Chinese law knows no doctrine of precedent. Mr Liu’s uncontradicted evidence
was that it is relevant to the determination of the detail of the General Principles. Finally,
the determination of the factual issue is not to be found in generalised notions of fairness
and justice to a particular claimant. There are broader questions of public policy involved
in this area of the law as is amply demonstrated in this Federation by the wide ranging
tort law reforms introduced to address third party liability insurance issues connected
with fault based claims.
I am satisfied that the trial Judge erred in rejecting the evidence of Mr Liu on the
interpretation of Article 137 of the General Principles. He should have accepted Mr Liu’s
evidence and found there were no special circumstances within the meaning of Article
137 that warranted the extension of the one year time limitation imposed by Article 136
of the General Principles and accordingly determined that Mrs Neilson’s claim under
Article 106 of the General Principles was time barred.
In summary, the trial Judge erred in applying Australian common law to the deter-
mination of Mrs Neilson’s tortious claim. He should have applied Chinese domestic law
and held that the claim was statute barred.
NOTE
Borrowing from the practices in the civil law, the Supreme Court of New South Wales has
established two memoranda of understanding, one with the Supreme Court of Singapore to
consider referring a matter of foreign law to the other jurisdiction for determination, and the
other with the chief judge of New York to maintain a standing panel of five volunteer appel-
late judges to answer questions of law referred to them by the Australian court: Spigelman;
Brereton.
C. Statutory Modes of Proof: Production of Copies

The Canada Evidence Act and various of the provincial evidence acts authorize (albeit in
rather antiquated terminology) the production in evidence, without expert intervention, of
official copies of the statutes and ordinances and other state and judicial documents of sister
jurisdictions and usually those of other former British colonies: see e.g. RSC 1985, c C-5,
ss 19-22; RSA 2000, c A-18, s 28; SS 2006, c E-11.2, s 41; CCSM c E150, s 34; RSO 1990, c E.23, s 25;
RSNB 1973, c E-11, ss 71-74; and RSNS 1989, c 154, ss 3ff. As Epstein J noted in Association of
Architects (Ontario) v Deskin (2000), 19 CCLI (3d) 275 at 283 (Ont Sup Ct J), under the Ontario
provision, “[t]he particular [foreign] statute, if a proper copy is produced, can have its mean-
ing determined by the court. It follows that a court can take judicial notice of another prov-
incial statute without requiring expert evidence.”
Supplementary expert evidence may be led on the interpretation of the extraprovincial
statute thus proved. However, expert evidence is not mandatory; otherwise legislative
intervention “would have been futile and the provisions themselves inoperative”: see Re
Thomas (1917), 45 NBR 148 at 163 (CA). In the absence of expert evidence, the meaning of
the foreign statute is decided in accordance with the rules of construction of the lex fori: see
Northern Trusts Co v McLean (1926), 58 OLR 683 at 684-85 (CA). In New Brunswick, this rule has
been codified in s 76 of the Evidence Act, above.
In practice, it seems that proof by production of foreign statutory law standing alone is
not that common. Most often, it is used simply as a supplement to the general method of
proof by expert evidence. The relevant foreign law is not always wholly contained in statute.
Even when it is, counsel “do not care to risk filing statutes without interpretation by experts,”
fearing a prejudicial construction; likewise, “the courts are reluctant to receive statutory
materials without explanation by experts,” fearing a misapplication of the foreign law: Wood
at 71.
D. Admission or Agreement
Of course, foreign law need not be proved formally if the parties agree on its legal effect—
for example, through an agreed statement of facts submitted prior to trial: see Azam v Jan,
2013 ABQB 301, and Davies v Collins, 2010 NSSC 457. Even when the parties cannot agree on
the effect of the foreign law, they may still be able to avoid the burden of calling expert
testimony by agreeing to submit written materials on the foreign law (either jointly or sep-
arately) for interpretation and application by the court. However, the court may refuse to
take on the task of determining the foreign law in this way if the issues presented are seen
as too complicated or if the materials submitted do not clearly evidence the relevant foreign
law. For this reason, “the court’s position on such proof must be known prior to trial to avoid
the embarrassment of being called on to present expert evidence when none has been
arranged to be available”: Wood at 61 and 59-61 generally.
E. Stated Case to Foreign Jurisdiction

The British Law Ascertainment Act, 1859 (Imp), 22 & 23 Vict, c 63, authorizes the courts in any
part of “Her Majesty’s dominions” to state a case for the opinion of a court in another part of
“Her Majesty’s dominions” on the law applicable to the facts so stated whenever it is neces-
sary or expedient to do so. Never widely used, the statute seems now to have fallen into
complete disuse. The Foreign Law Ascertainment Act, 1861 (Imp), 24 & 25 Vict, c 11 extended
the stated case procedure to the ascertainment of foreign law other than “British laws,” but
it applied only to states that might have been parties to conventions that were never made
and the Act was repealed in England in 1973.
A contemporary version of the stated case procedure is found in the European Convention
on Information on Foreign Law, European Treaty Series No 117 (1969). Under the Convention,
the judicial authority of a contracting state may request information on the law and the pro-
cedure of another contracting state by the transmission of a request stating the nature of the
case and the details of the information sought to the designated liaison officer of the other
contracting state: see Hay, Borchers & Symeonides at 604, n 7. In 1979, the Inter-American
Conference on Private International Law (a body of the Organization of American States)
approved a similar Convention on Proof of and Information on Foreign Law (18 ILM 1231
(1979)): see Dolinger, nn 120-122.
Even in the absence of statutory authority, it seems that a Canadian court by the consent
of the parties could submit a question of law to a court in another province for its opinion.
This was done in Re Komer, [1925] 2 DLR 86 (Ont Sup Ct (Bank)) where the Ontario registrar
III. Within the Canadian Federation 575
requested, obtained, and applied the opinion of a Superior Court judge in Quebec on a
question of Quebec law.
III. WITHIN THE CANADIAN FEDERATION

A. Judicial Notice by the Supreme Court of Canada
In the excerpt from its decision in Pettkus v Becker (above, Section I.B), the Supreme Court
noted its special position within the Canadian federation and the capacity to take judicial
notice of the laws of all the Canadian jurisdictions that flowed from that. This authority is
affirmed in the excerpt below from Hunt v T&N plc.
Hunt v T&N plc

[1993] 4 SCR 289
LA FOREST J:
There are several factors that suggest that the Supreme Court of Canada is not
restricted to the identical powers and procedures of the lower courts from which an appeal
is made. An important qualification is that the laws of a province other than that from
the courts of which an appeal is taken are not required to be proved as a fact. An early
case in support is John Morrow Screw and Nut Co. v. Hankin (1918), 58 SCR 74, in which
this court held that it could take judicial notice of the statutory or other laws prevailing
in provinces of Canada other than that in which the action originated. Anglin J quotes
from the older case of Logan v. Lee (1907), 39 SCR 311, at p. 313, where then Chief Justice
Fitzpatrick “announces”:
… after having consulted with my brother judges, that this court, constituted as an appellate
tribunal for the whole Dominion of Canada, requires no evidence as to what laws may be in
force in any of the provinces or territories of Canada. This court is bound to follow the rule
laid down by the House of Lords in the case of Cooper v. Cooper, [(1888), 13 App. Cas. 88],
and to take judicial notice of the statutory or other laws prevailing in every province and
territory in Canada, suo motû, even in cases where such statutes or laws may not have been
proved in evidence in the courts below, and although it might happen that the views as to
what the law might be, as entertained by the members of this court, might be in absolute
contradiction of any evidence upon those points adduced in the courts below.
This direct power of the court to consider the laws of the provinces has continued to
be acknowledged. For example, in Pettkus v. Becker, [1980] 2 SCR 834, at pp. 853-54,
Dickson J approved of Cooper v. Cooper (1888), 13 App. Cas. 88, and stated that this court
would take judicial notice of all laws prevailing in every province, even in cases where
such laws may not have been proved in evidence in the courts below, so long as such laws
had been pleaded in the first instance.
NOTE
The Federal Court has stated that it is likewise entitled, indeed obligated, to take judicial
notice of the laws of the Canadian provinces and territories: see Zien v The Queen (1986), 64
NR 282 (FCA). In Canada’s largely unitary judicial system, the provincially constituted courts
are, of course, expected to know and apply relevant federal law.
B. Statutory Authority for Taking Judicial Notice

CQLR c C-1991
2809. Judicial notice may be taken of the law of other provinces or territories of Can-
ada and of that of a foreign state, provided it has been pleaded. The court may also require
that proof be made of such law; this may be done, among other means, by expert testi-
mony or by the production of a certificate drawn up by a jurisconsult.
Where such law has not been pleaded or its content cannot be established, the court
applies the law in force in Québec.
NOTES
1. There is some evidence in early decisions of courts in the common law provinces
declining to take judicial notice of foreign law in the absence of express statutory authority:
see Canadian National Steamships Co Ltd v Watson, [1939] SCR 11, and Walkerville Brewing Co
v Mayrand, [1929] 2 DLR 945 (Ont CA). The 19th-century courts seem to have been less rigid:
see Cloyes v Chapman (1876), 27 UCCP 22 (CA), in which the court opined that United States
law could be determined without the need of experts because the reports were available in
the judge’s own library.
2. However, in Ross v Polak, [1971] 2 WWR 241 (Alta SCAD), on an application in Alberta to
enforce a Saskatchewan maintenance order, although no expert evidence was tendered on
Saskatchewan maintenance law, the court was presented with copies of the conflicting
Saskatchewan case law on the definition of a deserted child and proceeded to rule on the
correct interpretation. Presumably, the court recognized that the nature of the proceedings
required dispensing with the expense of expert evidence. In this, the court anticipated the
approach taken across Canada in the uniform interjurisdictional support legislation. For
example, s 47 of the Interjurisdictional Support Orders Act 2002, SO 2002, c 13 provides: “In a pro-
ceeding under this Act, the Ontario court shall take judicial notice of the law of a reciprocat-
ing jurisdiction and, where required, apply it.” It also states: “An enactment of a reciprocating
jurisdiction may be pleaded and proved for the purposes of this Act by producing a copy of
the enactment received from the reciprocating jurisdiction.”
3. More generally, the Canada Evidence Act and a number of the provincial evidence acts
authorize judicial notice to be taken of the laws of Canada, the provinces and the territories,
and usually of certain foreign countries (typically former British colonies, and including the
United States in the case of Manitoba): see RSC 1985, c C-5, s 17; RSBC 1996, c 124, ss 24, 24.1;
SS 2006, c E-11.2, s 40; CCSM, c E150, ss 29-30; RSNB 1973, c E-11, s 70(1); RSPEI 1988, c E-11, s 21;
RSNS 1989, c 154, s 3(3); RSNL 1990, c E-16, s 26; and see the Judicature Act, RSA 2000, c J-2, s 12.
4. Under some statutes, judicial notice is restricted to statutory law (for example, New
Brunswick), but under others, judicial notice may be taken of extraprovincial “laws” gener-
ally, including decisional law (for example, Manitoba).
5. The Alberta Act leaves the taking of judicial notice to the discretion of the court.
Courts in the province have generally declined “to embark on such a course of judicial advo-
cacy and research” even in relation to the law of a sister province”: see Royal Bank of Canada
v Neher, [1985] 5 WWR 667 (Alta QB); Mazarei v Icon Omega Developments Ltd, 2011 BCSC 259;
Nystrom v Tarnava (1996), 44 Alta LR (3d) 355 (QB) (reproduced below in Section III.C, “Impli-
cations of the Constitutional Principles of Order and Fairness?”). In contrast, the taking of
judicial notice is mandatory under the evidence acts in effect in British Columbia, Manitoba,
Saskatchewan, and Atlantic Canada—“Judicial notice shall be taken.” The Canada Evidence
Act also employs the imperative.
6. Whether permissive or mandatory, it seems that the judicial notice provisions were
once underused. Writing in 1985, Wood at 65 concluded:
[T]here is little reliance placed upon provisions for judicial notice of foreign law. Aside from
minor usage, such as in O’Donovan v. Dussault [[1973] 3 WWR 634 (Alta SCAD)] to supplement
pleading and proof on a specific “bit” of foreign legislation, judicial notice is virtually unutilized,
regardless of whether provision for judicial notice is permissive or mandatory. At best it fills in
“minor holes” in pleading and proof.
7. Apart from the antiquated terminology of the judicial notice provisions in the common
law provinces, a prominent reason for their underuse seems to be confusion about the
meaning of judicial notice. Does the court carry the burden of ascertaining the content and
effect of the foreign law of which notice is to be taken or can the parties be enjoined to give
assistance? And, more important, how is the foreign law to be determined in lieu of formal
proof? For a discussion of these problems, see Rioux v Berthelot (1996), 177 NBR (2d) 144 (QB),
in which Deschenes J ultimately ruled that the New Brunswick Evidence Act did not require
motions or trial judges to seek out the relevant legislation of another province and its inter-
pretation without the litigants’ help and supporting evidence.
8. The New Zealand Evidence Act allows a judge to ascertain foreign law without the
assistance of expert testimony. In a dispute involving the status of a duty of good faith in
New South Wales, the Privy Council in Dymocks Franchise Systems (NSW) Pty Ltd v Todd, [2002]
UKPC 50, on appeal from the Court of Appeal of New Zealand, had this to say about the con-
tinued value of expert evidence in many cases:
[54] On the other hand their Lordships are in complete agreement with the Court of Appeal
that this was an unsuitable case for a judge to seek to ascertain foreign law without the assist-
ance of expert testimony. First, throughout the common law world it is a matter of controversy
to what extent obligations of good faith are to be found in contractual relationships. Second, as
has been demonstrated, the pleading position in the present case was obscure, Dymocks plead-
ing that there was an obligation of good faith implied into the contract in relation to the Blue
Star affair but no such obligation on Dymocks in exercising its contractual right of termination.
Third, the expert evidence before the judge had been directed to the only issue before the
court at the time it was given i.e. good faith in exercising a power of termination. It emerged
from the experts’ evidence that such a limited obligation of good faith is much more clearly
established in the law of New South Wales than any wider general good faith obligation. Fourth,
the expert evidence shows that the legal analysis of an implied obligation of good faith in New
South Wales is far from clear. … If the judge was to choose between the two views, he undoubt-
edly needed to hear the evidence of the experts directed specifically to the point.
9. The new Civil Procedure Rules in Nova Scotia provide for a flexible approach to the
determination of foreign law:
Proof of law of another province
54.03(1) The legislation of another Canadian province or territory may be proved by refer-
ence to the official publication.
(2) The common law of a Canadian province or territory may be proved by reference to
decisions of the courts and authoritative sources.
(3) The civil law of Québec may be proved by reference to the Code Civil du Québec, other
applicable legislation, decisions of the courts, and authoritative sources.
(4) A party who satisfies the presiding judge on both of the following may lead opinion
evidence on the law of another province:
(a) the party has provided a report under Rule 55—Expert Opinion;
(b) the assistance of an expert is necessary and the opinion is otherwise admissible.
Proof of law of a foreign state

54.04(1) The law of a foreign state may be proved in either of the following ways:
(a) reference to official publications of legislation, judicial decisions, and authoritative
sources;
(b) expert opinion, introduced in accordance with Rule 55—Expert Opinion and the
rules of evidence.
(2) The law of a foreign state is presumed to be the same as the law of Nova Scotia, unless a
party gives notice by a pleading that the law of a foreign state is in issue and proves that the law
is not the same as the law of Nova Scotia.
10. On Canadian law reform proposals, for a clarification and further liberalization of the
powers of the courts to take judicial notice of extraprovincial law, see LRCC, Report at 45-46
and Model Evidence Code, notes at 104-5; Ontario Law Reform Commission at 236-37; and
RURE at 47-54.
C. Implications of the Constitutional Principles of Order and Fairness?

Walker at para 7.1 suggests that the Supreme Court’s position on the constitutionality of
choice of law rules could oblige Canadian courts to take judicial notice of the laws of other
Canadian provinces and territories. That possibility was taken up by Newbury JA for the Brit-
ish Columbia Court of Appeal in Pearson v Boliden Ltd, 2002 BCCA 624 at para 72:
Although this appeal, as argued, obviously raised questions about “foreign” law—here the lim-
itation period established by s. 175 of the Alberta [Securities] Act—the Chambers judge was not
provided with any expert evidence by any party explaining how an Alberta court would inter-
pret s. 175. No suggestion was made during argument that the court could not or should not
proceed in the absence of such expert opinion evidence, perhaps because we are here con-
cerned with the law of another province rather than that of a foreign state, and s. 175 is
obviously very similar to s. 140 of the British Columbia [Securities] Act. If counsel had thought
otherwise, there would have been submissions about the need for expert evidence during the
course of the hearing.
The implications of the full faith and credit doctrine on this issue are explored in an Aus-
tralian federal context in Sykes & Pryles at 275-76. The authors express the view that the full
faith and credit clause in the Commonwealth Constitution does away with the common law
conception of foreign law as fact as between the Australian states. They opine that to
“require the law of a sister state to be pleaded and proved as a fact would seem to contra-
vene the clear and emphatic direction to accord full faith and credit contained in” the Con-
stitution. In their view, if a sister state’s law is brought to a judge’s attention, then the judge
should be required to take judicial notice of it. Indeed, they suggest that a judge, of his or her
own volition, can raise the question of a sister state’s law.
Consider the following case in this context. Would the refusal to accept a copy of the
limitations statute of another province be justified today on the basis of its unreliability? Or
would it be justified on the basis of the incapacity of a judge today to appreciate adequately
the law of another province in the absence of expert evidence to assist in its interpretation?
Nystrom v Tarnava
(1996), 44 Alta LR (3d) 355 (QB)
[Tarnava rear-ended Nystrom in Saskatchewan. Nystrom sued Tarnava in Alberta. The

Saskatchewan limitation period had expired, but the Alberta limitation period had not.
Tarnava moved for summary judgment on the basis that the law of Saskatchewan includ-
ing its limitation period applied. She tendered in evidence her own affidavit to which she
attached true copies of the Saskatchewan legislation setting out the limitation period. The
master granted her motion. Nystrom appealed.]
YANOSIK J:
[15] With respect to Tarnava’s application for summary judgment pursuant to Rule
159(2), Tarnava alleges there is no merit to Nystrom’s claim because the law of Saskatch-
ewan applies to her action and her claim is barred by section 88 of the Highway Traffic
Act, RSS 1978 c. H-3.1. Tarnava is entitled to an order for summary judgment dismissing
Nystrom’s claim if I am satisfied that the substantive law of Saskatchewan applies to this
action in Alberta; that a limitation of action provision in a provincial statute is substantive
law, and not procedural; and that the limitation of action provision alleged and pleaded
by Tarnava, namely section 88 of Saskatchewan’s Highway Traffic Act, RSS c. H-3.1, has
been proved or can be otherwise judicially noticed or recognized to have been in force
and effect when Nystrom commenced her action against Tarnava and constitutes a bar
to Nystrom’s action.
[16] A motor vehicle accident in Saskatchewan between two residents of Alberta one
of whom subsequently sues the other in Alberta is categorized as an interprovincial tort
claim.
[17] It has now been authoritatively determined by the Supreme Court of Canada that
the substantive law to be applied to the determination of interprovincial tort claims is the
law of the place where the tort took place or the activity occurred, the lex loci delicti:
Tolofson v. Jensen; Lucas v. Gagnon (1994) 120 DLR (4th) 289. …
[18] In Tolofson v. Jensen (supra) the Court also determined, and this time unani-
mously, that statutory limitation enactments, and in particular section 88 of the
Saskatchewan Highway Traffic Act RSS 1978 c. H-3.1, which both counsel on that case
agreed was the law of Saskatchewan in December 1987 when Tolofson sued Jensen in
British Columbia for a tort committed in Saskatchewan, are to be considered or character-
ized as substantive law, not procedural. Clearly then, whatever the case may have been
before Tolofson, the categorization of statutory limitation periods as substantive law is
now recognized as law.
[19] I am satisfied that the substantive law of Saskatchewan, where the motor vehicle
accident between Nystrom and Tarnava occurred, governs this action in Alberta, and that
a limitation of action provision in a Saskatchewan statute is substantive law and not pro-
cedural. The issue that remains to be determined on this application is whether or not
the substantive law of Saskatchewan, and in particular the alleged limitation of action
provision in Saskatchewan’s Highway Traffic Act has been proved on Tarnava’s affidavit,
or whether the statute can be judicially noticed or recognized. Counsel for Nystrom does
not admit that the aforesaid statute and limitation provision was in force and effect at any
time material to Nystrom’s action against Tarnava and constitutes a bar to Nystrom’s
action.
[20] Counsel for Tarnava submits that Saskatchewan’s Highway Traffic Act, RSS 1978,
c. H-3.1 and the limitation of action provision section 88 has been proved on Tarnava’s
affidavit and constitutes a bar to Nystrom’s action. It is further submitted that if the Sas-
katchewan statute has not been proved on Tarnava’s affidavit that the statute can be
judicially noticed under section 33 of the Alberta Evidence Act, RSA 1980, Chap. A-21,
and that under section 12 of the Judicature Act, RSA 1980, Chap. J-1, the Court may take
judicial cognizance of the law of Saskatchewan. Counsel for Nystrom argues that Tarnava’s
affidavit does not prove the Saskatchewan statute, that the Court cannot take judicial
notice of the statute under the Alberta Evidence Act, and that the Court should not take
cognizance of the law of Saskatchewan under the Judicature Act.
[21] Dealing with Tarnava’s affidavit, I find that there is no proof positive of the Sas-
katchewan statute in her affidavit, or of the law of Saskatchewan applicable to Nystrom’s
action. Tarnava’s deposition relating to the Saskatchewan statute is based solely on advice
from her Alberta solicitors and her belief in that advice. She does not and cannot swear
positively to the statute law of Saskatchewan, and exhibiting the photocopy of a page
which Tarnava says is a true copy of a page in the statute adds nothing. The page is not
authenticated or verified by any Saskatchewan Government authority or legislative head
or otherwise in any formal manner. Tarnava’s affidavit contains no proof whatsoever of
the alleged Saskatchewan statute and the limitation of provision contained therein which
it is stated is a bar to Nystrom’s action.
• • •
[23] Under section 12 of the Judicature Act (supra) the Court may take judicial cog-
nizance of the law of any province in the same manner as of any law of Alberta. Section
12 states:
12. When in a proceeding in the Court the law of any province is in question, evidence
of that law may be given, but in the absence of or in addition to that evidence the Court may
take judicial cognizance of that law in the same manner as of any law of Alberta.
The section uses the permissive “may” rather than the obligatory “shall.” By the wording
of the section, the Court has a judicial discretion to take cognizance of the law of another
province where that law has not been otherwise proven. The question is whether this
Court should take judicial cognizance of the law of Saskatchewan when that law could
have easily been proven, and where the consequences of applying that law may result in
the dismissal of Nystrom’s action.
[24] In Royal Bank of Canada v. Neher (1985) 64 AR 22 Master Funduk refused to
take judicial notice of the law of British Columbia, statutory and otherwise, under section
12 on an application by the plaintiff for summary judgment. He stated that the laws of
foreign jurisdictions are questions of fact, and matters of expert evidence which should
be properly proven. He said he felt uncomfortable with merely taking judicial cognizance
of the BC law, and any disquiet must be resolved in favour of the defendant.
[25] Nystrom’s claims for damages as set out in her Statement of Claim are substantial.
She claims general damages of $100,000.00 plus such special damages and loss of income
that she can establish at trial, together with interest, and some of her special damage claims
are subrogated to Alberta Health Care. The Saskatchewan statute was not produced in
Court, and the law of Saskatchewan applicable to this case was not cited or referred to.
[26] In the circumstances of this case I am not prepared to take judicial cognizance
of the law of Saskatchewan in force and effect on June 11, 1993 when Nystrom caused her
Statement of Claim against Tarnava to be issued out of this Court. Without any proof of
that law I am being asked to take judicial cognizance of that law and give summary judgment
dismissing Nystrom’s claim. That is a severe and drastic consequence. That law could have
been easily proven, and should have been proven to my satisfaction, particularly when it
is alleged that by that law Nystrom’s action is barred and her claim should be dismissed.
[27] There being no proof before me of the substantive law of Saskatchewan barring
Nystrom’s action against Tarnava, Tarnava’s application for a summary judgment dismiss-
ing Nystrom’s action is dismissed.
[28] The Master’s Order granted on March 6, 1996 is hereby set aside. Nystrom is
entitled to costs against Tarnava on the application before the Master, and on the appeal
before me. Nystrom’s costs are to be taxed under Column 3 of Schedule C of the Alberta
Rules of Court.
D. Pleading and Determining the Constitutionality of Extraprovincial Law
Hunt v T&N plc

[1993] 4 SCR 289
LA FOREST J:
… The immediate issue in this appeal is whether the provisions of the Quebec Business
Concerns Records Act, RSQ, c. D-12, a “blocking statute,” provide a “lawful excuse” under
Rule 2(5) of the British Columbia Rules of Court, such that Quebec defendants to a civil
action in British Columbia can refuse to comply, as required by Rule 26 of the British
Columbia Rules of Court, with a demand for discovery of documents. The Quebec statute
prohibits inter alia the removal from the province of documents of business concerns in
Quebec that are required pursuant to judicial processes outside the province. The funda-
mental issue is whether this statute is ultra vires or whether it is constitutionally inapplic-
able to a judicial proceeding in another province.
• • •
Before considering the issue of constitutionality, it is necessary to examine a prelim-

inary question raised by the respondents and the Attorney General of Quebec. They
submit that this court has no jurisdiction to consider the constitutionality of this Act.
This, they say, flows from the operation of s. 45 of the Supreme Court Act, RSC, 1985,
c. S-26, which, they maintain, restricts this court’s jurisdiction to what the courts below
could have done, citing a remark from Beetz J’s reasons in Attorney General of Canada v.
Canard, [1976] 1 SCR 170, at p. 216. The courts below, they continue, properly accepted
that they had no jurisdiction to rule on the constitutionality of the Quebec statute. Con-
sequently, in their submission, this court lacks jurisdiction to reply to the constitutional
question framed by the Chief Justice.
I do not agree with this submission. In my view, the jurisdiction to at least consider
the constitutionality of another province’s legislation can be found in the right of any
superior court to consider and make findings of fact respecting the law of another juris-
diction for the purposes of litigation before it. This jurisdiction to consider the laws of
another province seems to me to be even more clearly justified when both jurisdictions
are Canadian and governed by our Constitution. I will look at each of these questions in
turn, and then address the specific jurisdiction of this court in the interpretation of the
laws of every province and their constitutionality.
Ordinary Power of Courts to Consider the Constitutionality of Foreign Law

I begin by noting that at common law the issue of what is foreign law, which most fre-
quently but not exclusively arises in conflicts law, is a question of fact to be determined
by the trial judge. In the present case, the law of Quebec is clearly a material fact for the
consideration of whether there was a “lawful excuse” under Rule 2(5) of the British Col-
umbia Rules of Court for failing to obey that province’s rules for discovery. It is also a
material fact in relation to the public policy of British Columbia. Since the Quebec statute
is material to these issues, it follows that the validity of that statute, its constitutionality,
is equally material.
In determining what constitutes foreign law, there seems little reason why a court
cannot hear submissions and receive evidence as to the constitutional status of foreign
legislation. There is nothing in the authorities cited by the respondents that goes against
this proposition. Quite the contrary, Buck v. Attorney-General, [1965] 1 All ER 882 (CA),
holds only that a court has no jurisdiction to make a declaration as to the validity of the
constitution of a foreign state. That would violate the principles of public international
law. But here nobody is trying to challenge the constitution itself. The issue of constitu-
tionality arises incidentally in the course of litigation. The distinction is clearly made by
Lord Diplock in Buck, at pp. 886-87:
The only subject-matter of this appeal is an issue as to the validity of a law of a foreign
independent sovereign state, in fact, the basic law prescribing its constitution. The validity
of this law does not come in question incidentally in proceedings in which the High Court
has undoubted jurisdiction as, for instance, the validity of a foreign law might come in ques-
tion incidentally in an action on a contract to be performed abroad. The validity of the foreign
law is what this appeal is about; it is nothing else. This is a subject-matter over which the
English courts, in my view, have no jurisdiction.
Similarly in Manuel v. Attorney General, [1982] 3 All ER 786 (Ch. D), while it was asserted
that the courts of one country should not pronounce on the validity of a statute of another,
the case where the question arises merely incidentally is expressly excepted.
The policy reasons for allowing consideration of constitutional arguments in determin-
ing foreign law that incidentally arises in the course of litigation are well founded. The
constitution of another jurisdiction is clearly part of its law, presumably the most funda-
mental part. A foreign court in making a finding of fact should not be bound to assume
that the mere enactment of a statute necessarily means that it is constitutional. Formal
determination of constitutionality is often purely fortuitous. It is often dependent on there
happening to be parties interested in challenging the statute. This is unlikely to happen
where, as in this case, most of the parties affected are outside the enacting jurisdiction.
In this case, the Quebec statute has never been challenged by Quebec litigants because it
does not arise in normal litigation in the province, and in extraprovincial litigation,
Quebec defendants benefit while Quebec plaintiffs are normally unaffected. Why should
a litigant not be able to argue constitutionality in the course of litigation that directly
raises the issue? As a practical matter, it is not much more difficult to determine consti-
tutionality than any other aspect of foreign law.
The fact that there is no mandatory provision for advising the appropriate Attorney
General does not make the procedure invalid. Nor do I see it as resulting in great
inconvenience. Situations like this are rare and the findings, essentially of a factual nature,
are not binding on the courts of other provinces. And if the constitutional issue is raised
in this court, there are provisions for advising the appropriate Attorney General.
The British Columbia courts in this case were commendably, but in my view exces-
sively, cautious in refusing to consider constitutionality even in this limited sense, at the
potential price of injustice to the plaintiff. With respect, I therefore find that the lower
courts were in error in believing that the rules of conflicts law prevented consideration
of the constitutionality of the laws of another jurisdiction.
The British Columbia courts in this case, therefore, did possess at least the normal
court power to consider and make findings of fact as to the constitutionality of the laws
of another jurisdiction. Such findings would have affected their conclusions on lawful
excuse, comity and public policy. To simply ignore the constitutional issues was an error
of law that vitiated their findings. Moreover, there is an additional factor that reinforces
and possibly augments the powers of the superior courts to consider the constitutional
issues, namely, that both jurisdictions in question are part of the same Canadian federation
and governed by the same Constitution. I shall now turn to that issue.
Impact of the Canadian Constitution

It is well established that a range of Canadian courts and tribunals in Canada are empow-
ered to consider the constitutionality of the laws they apply. In doing so, they are applying
the principle of the supremacy of the Constitution confirmed by s. 52(1) of the Constitu-
tion Act, 1982. This court has had to deal with the implications of this provision on a
number of occasions in different contexts. Thus in Douglas/Kwantlen Faculty Assn. v.
Douglas College, [1990] 3 SCR 570, and Cuddy Chicks Ltd. v. Ontario (Labour Relations
Board), [1991] 2 SCR 5, this court found that administrative tribunals expressly empow-
ered by their enabling statutes to interpret or apply any law necessary to reach their
findings had the power to apply the Canadian Charter of Rights and Freedoms. Similarly,
the court has ruled that some administrative tribunals are competent to consider issues
of the division of powers; see, for example, Northern Telecom Canada Ltd. v. Communi-
cation Workers of Canada, [1983] 1 SCR 733. The latter decision also held that the Federal
Court in the exercise of its statutory jurisdiction had the power and duty to review legis-
lation for constitutionality in determining issues arising before them; see Northern
Telecom, supra, at p. 740.
The same principle applies with, if anything, more force to the provincial superior
courts. These are the ordinary courts of the land having inherent jurisdiction over all
matters, both federal and provincial, unless a different forum is specified; see Ontario
(Attorney General) v. Pembina Exploration Canada Ltd., [1989] 1 SCR 206, at pp. 217-18.
Estey J felicitously put the matter in Attorney General of Canada v. Law Society of British
Columbia (the Jabour case), [1982] 2 SCR 307. He stated, at pp. 326-27:
There is, however, another and more fundamental aspect to this issue. The provincial superior
courts have always occupied a position of prime importance in the constitutional pattern of
this country. They are the descendants of the Royal Courts of Justice as courts of general
jurisdiction. They cross the dividing line, as it were, in the federal-provincial scheme of
division of jurisdiction, being organized by the provinces under s. 92(14) of the Constitution
Act and are presided over by judges appointed and paid by the federal government (sections
96 and 100 of the Constitution Act).
This approach, as he noted, is supported by previous cases from as early as Valin v.

Langlois (1879), 3 SCR 1, where Ritchie CJ emphasized that these courts “are not mere
local courts for the administration of the local laws” (p. 19) but “are the Queen’s Courts,
bound to take cognizance of and execute all laws, whether enacted by the Dominion
Parliament or the Local Legislatures” (p. 20) (emphasis added). See also Pigeon J in R v.
Thomas Fuller Construction Co. (1958) Ltd., [1980] 1 SCR 695, at p. 713.
This jurisdiction must include a determination of whether the laws sought to be applied
are constitutionally valid. In Laskin J’s words in Thorson v. Attorney General of Canada,
[1975] 1 SCR 138, at p. 151: “The question of the constitutionality of legislation has in
this country always been a justiciable question.” This was also referred to in Northern
Telecom, supra, where Estey J stated, at pp. 741-42:
It is inherent in a federal system such as that established under the Constitution Act, that the
courts will be the authority in the community to control the limits of the respective sover-
eignties of the two plenary governments, as well as to police agencies within each of these
spheres to ensure their operations remain within their statutory boundaries. Both duties of
course fall upon the courts when acting within their own proper jurisdiction. The Jabour
case, supra, was concerned with the superior courts of general jurisdiction in the provinces,
but the same principles apply to courts of subordinate jurisdiction when they are acting
within their limited jurisdiction as described by their constituting statute. Such courts must,
in the application of the laws of the land whether they be federal or provincial statutes,
determine, whether the issue arises, the constitutional integrity of the measure in question.
Such a court of limited jurisdiction must, of course, be responding to a cause properly before
it under its statute.
That is scarcely cause for surprise.

As noted in Cuddy Chicks, supra, at p. 14, the source of this jurisdiction is not tech-
nically s. 52(1) itself, which is silent on the jurisdictional point per se. Rather, the source
of the jurisdiction to consider such questions for administrative tribunals is their enabling
statutes. The superior courts in the provinces, however, have inherent jurisdiction to
enforce the provisions of the Constitution Acts as binding the governments in Canada.
Many constitutional challenges arise in the course of “normal” private litigation, and the
work of the courts would be stymied if they could not deal with the issue. As B. Strayer
has noted (The Canadian Constitution and the Courts (3d ed. 1988), at p. 145), there is
little standing issue because
[i]n such cases the individual is seeking to assert some right for himself. In the process of
establishing this right he contends that legislation or an administrative act which would
interfere with it is invalid. This is an incidental and collateral attack on the legislation or act
in the process of claiming a right peculiar to the claimant.
In principle, I see no reason why there should be a categorical rule to prevent a judge
from dealing with a constitutional issue that incidentally arises in the ordinary course of
litigation. As this court observed in [Morguard Investments Ltd v De Savoye, [1990] 3 SCR
1077], the guiding element in the determination of an appropriate forum must be prin-
ciples of order and fairness. In considering these principles, some of the considerations
set forth in Morguard bear repeating. At page 1103, the following statement appears:
Why should a plaintiff be compelled to begin an action in the province where the defendant
now resides, whatever the inconvenience and costs this may bring, and whatever degree of
connection the relevant transaction may have with another province? And why should the
availability of local enforcement be the decisive element in the plaintiff ’s choice of forum?
I recognize, of course, and this was mentioned in Morguard, that these considerations
must be weighed against the need for fairness to the defendant as well. This, as is there
noted at p. 1103, “requires that the judgment be issued by a court acting through fair
process and with properly restrained jurisdiction.”
So far as the first of these conditions is concerned, it is difficult to question the basic
fairness of the process given the essentially unitary nature of the Canadian court system;
see Pembina, supra, at p. 215. I would reiterate here what was said in Morguard, supra, at
pp. 1099-1100:
The Canadian judicial structure is so arranged that any concerns about differential quality
of justice among the provinces can have no real foundation. All superior court judges—who
also have superintending control over other provincial courts and tribunals—are appointed
and paid by the federal authorities. And all are subject to final review by the Supreme Court
of Canada, which can determine when the courts of one province have appropriately exer-
cised jurisdiction in an action and the circumstances under which the courts of another
province should recognize such judgments.
It may, no doubt, be advanced that courts in the province that enacts legislation have
more familiarity with statutes of that province. It must not be forgotten, however, that
courts are routinely called to apply foreign law in appropriate cases. It is thus only the fact
that a constitutional issue is raised that differentiates this case. But all judges within the
Canadian judicial structure must be taken to be competent to interpret their own
Constitution. In a judicial system consisting of neutral arbiters trained in principles of a

federal state and required to exercise comity, the general notion that the process is unfair
simply is not legally sustainable, all the more so when the process is subject to the super-
visory jurisdiction of this court.
This approach is even more persuasive where, as here, the issue relates to the consti-
tutionality of the legislation of a province that has extraprovincial effects in another
province. This is especially true where the constitutionality of the other province’s legis-
lation has never been challenged in the other province’s courts, and where moreover, as
here, such a challenge is unlikely. Where the violation is as much a violation against the
Constitution of Canada, then the superior courts which must legitimately face the issue
should be able to deal with the question. Against this position, it was observed that most
of the parties interested in the question as interveners would be in the province whose
statute is impugned. That may be, but where the alleged violation relates to extraterritorial
effect, many of the interested parties are also outside Quebec. Above all, it is simply not
just to place the onus on the party affected to undertake costly constitutional litigation in
another jurisdiction.
I agree that, because of the far-reaching impact of such rulings, the courts should
restrict themselves to hearing constitutional challenges to the legislation of other prov-
inces only where there is a real interest affected in their province. Unfortunately, there
are intractable “chicken and egg” problems: if the extraterritorial effects of the law are
themselves a prerequisite to the British Columbia court taking jurisdiction, then who is
to determine that such extraterritorial effects exist in a particular case? The process must
begin somewhere, and we must rely on the good sense of our superior courts in the
respective provinces to not gratuitously assume jurisdiction.
The problem in the end, then, involves issues of jurisdiction and whether that juris-
diction should be exercised. The British Columbia courts in related litigation (Hunt v.
T & N [Vancouver Reg No C885-383, 30 June 1989]), we saw, dismissed a challenge to
jurisdiction, and leave to this court was refused. That is scarcely surprising. The case would
appear to be similar to Moran v. Pyle National (Canada) Ltd., [1975] 1 SCR 393, where a
corporation that had in one province manufactured goods that were defective was sued
in a province where the plaintiff suffered damage as a result. As here, the manufacturer
must be taken to have known that the goods would be used outside the province of manu-
facture in the manner they were. Given the significant connection with the province where
the injury took place, it is difficult to see how it could be said to offend the principles of
order and fairness for the British Columbia courts to take jurisdiction. A court might, I
suppose, also be asked to consider whether it should decline jurisdiction on the basis of
the doctrine of forum non conveniens. Indeed the court in Hunt v. T & N, supra, was asked
to decline jurisdiction. But in my view the court was right to refuse to do so. The addi-
tional factor that the case involved the British Columbia court in considering the inter-
pretation and constitutional validity of the Quebec statute is not, given the considerations
that weigh in favour of the British Columbia court’s exercising jurisdiction, sufficient to
make a court of that province a forum non conveniens.
I do not deny that there are practical inconveniences, but actions dealing with activities
having extraprovincial effects must necessarily impose difficulties on one party or the
other. Counsel, however, argued that certain systemic inconveniences were involved.
There was, he stated, no mandatory provision to advise the Attorneys General, including
that of the province whose statute was attacked. Undoubtedly, the representations of the
Attorneys General are useful, but I see no reason why this should be fatal. The requirement
of such notice is a matter for statutory enactment in each jurisdiction; see B. Strayer, supra,
at pp. 73-86. It may be a factor to consider but it is just that. The courts and counsel for
the parties, who are after all principally affected, must be taken to have competence to
deal with the issues. At all events, the courts of other provinces are not bound by the
determination, and it is subject to review by this court when the Attorneys General are
required to be advised as, of course, they were in the present case.
The respondents also argued that this may lead to differing holdings on the constitu-
tionality of the statute in different provinces. It must be remembered, however, that this
is not uncommon in respect of federal statutes or identical statutes in different provinces.
And in the rare cases where this could cause a party difficulty, this could be dealt with by
this court. As Black and Swan, “New Rules for the Enforcement of Foreign Judgments:
Morguard Investments Ltd. v. De Savoye” (1991), 12 Advocates’ Q 489, note, commenting
on our decision in Bank of Montreal v. Metropolitan Investigation & Security (Canada)
Ltd., [1975] 2 SCR 546, it would likely do so in view of the fact that the division of powers
status of provincial legislation would be at stake.
I, therefore, conclude that the courts of British Columbia had jurisdiction to deal with
the constitutional issue and, consequently, so has this court.

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CHAPTER ELEVEN
Law of Procedure
I. The Substance/Procedure Distinction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591

II. Limitation of Actions (Prescription) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592
III. Remedial Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
A. Statute of Frauds and Like Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
B. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604
C. Recovery of Legal Costs and Pre-Judgment Interest . . . . . . . . . . . . . . . . . . . . . . . . . 608
IV. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
V. Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
A. Procedure or Substance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
B. Obtaining Evidence Across Borders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620
1. Requests for Assistance by Canadian Courts to Foreign Authorities . . . . . . . 620
2. Requests for Assistance by Foreign Authorities to Canadian Courts . . . . . . . 620
3. Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
4. Cross-Border Legal Assistance Within Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
I. THE SUBSTANCE/PROCEDURE DISTINCTION

CQLR c C-1991
3132. Procedure is governed by the law of the court seized of the matter.
NOTE
Article 3132 reflects the generally recognized rule that the law of the forum governs proced-
ure. The rule is grounded in the pragmatic demands of administrative convenience, indeed
administrative necessity. To require those involved in the administration of local justice to
know and apply a foreign procedural law would result in unacceptable delay and expense.
The fact that the forum controls its own procedure is approached traditionally as raising
an issue of characterization—which elements of the lex fori are procedural so as to command
application to the exclusion of the lex causae and which are substantive so as to be excluded;
conversely, which elements of the foreign lex causae are substantive so as to command
application and which are procedural so as to be excluded?
Many rules are so manifestly a part of the “procedural machinery” of the forum that their
characterization almost goes without saying. Thus, there seems to be general agreement
591
592 Chapter 11 Law of Procedure
that the following issues are the province of forum procedure: the appropriate court, the
form of pleadings, the service of process and notices, the mode of conduct of judicial pro-
ceedings generally, and the execution of judgments.
However, there are other more borderline issues in which the appropriate characteriza-
tion between substance and procedure is contested. The criterion of convenience that
underlies the application of forum procedural law does not always offer an obvious answer
in these borderline cases. Because there is always some inconvenience in applying foreign
law, focusing only on that criterion would tend to favour a procedural characterization at the
expense of the policies underpinning the forum’s choice of a different substantive law to
govern the merits.
In general, civil law systems have tended to resolve any doubt in favour of applying the
substantive lex causae, whereas the English courts traditionally applied a wider concept of
procedure. This latter tendency has sometimes been ascribed to an unthinking transfer of
characterization precedents from the domestic to the conflicts sphere, and sometimes to a
deliberate artificial use of the procedural label to ensure the applicability of forum law with-
out having to invoke directly the public policy doctrine or as an escape device from an overly
rigid choice of law rule: see Cook; Garnett.
As the materials in this chapter reflect, Canadian (and Australian) courts have begun to
embrace a narrower view of procedure along civilian lines, citing policy concerns with
inappropriate forum shopping, and the need to extend comity to diverse state policies in a
mobile global marketplace. In England, a similar change has come about not so much from
the courts but from Europe with the adoption of the Rome Regulations on the law applic-
able to contractual and non-contractual obligations: see Regulation (EC) 593/2008 of the
European Parliament and of the Council of 17 June 2008 on the law applicable to contractual
obligations (Rome I) and Regulation (EC) No 864/2007 of the European Parliament and of the
Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II). However,
as the materials also illustrate, procedural and substantive justice are often so inextricably
intertwined as to make perfect convergence elusive: see generally Illmer; Garnett.
II. LIMITATION OF ACTIONS (PRESCRIPTION)

CQLR c C-1991
3131. Prescription is governed by the law applicable to the merits of the dispute.
Article 3131 of the Civil Code of Quebec reflects the long-standing civil law view that issues of
prescription or limitation form an integral part of the substantive law applicable to the
merits of a dispute. The traditional common law approach was very different. The English
courts early on drew a distinction between statutes of limitation that operated merely to bar
the remedy (characterized as “procedural”) and those that extinguished the right (character-
ized as “substantive”). Under this approach, most limitation statutes were characterized as
procedural, with the result that forum limitation standards applied to all local litigation,
whether the merits were governed by local or foreign law.
II. Limitation of Actions (Prescription) 593
In 1969, the Ontario Law Reform Commission (OLRC) recommended reversal of the com-
mon law characterization, citing long-standing criticisms. First, the distinction between
limitation statutes that barred the remedy and those that extinguished the right was a dis-
tinction without a difference since the practical result in either case was to prevent the
plaintiff from pursuing a claim. Second, the approach encouraged claimants to shop for the
forum with the longest limitation period: see Ontario Law Reform Commission at 133-36.
The OLRC’s recommendation was rejected initially by the Uniform Law Conference of
Canada (ULC). The 1982 Uniform Limitations Act instead provided for the exclusive applica-
tion of forum limitations law, effectively codifying the traditional common law approach.
These conflicting recommendations seem to have led to something of a stalemate in
legislative developments. Then, in 1994, the Supreme Court definitively rejected the trad-
itional common law characterization as ill-considered and outdated.
Tolofson v Jensen
[1994] 3 SCR 1022
[The plaintiff, Kim Tolofson, sustained serious injuries when the car in which he was a
passenger, operated by his father, Roger, collided with a car operated by Leroy Jensen.
The accident occurred in Saskatchewan where Mr. Jensen resided and where his car was
registered. The Tolofsons were residents of British Columbia and their car was registered
there. The plaintiff was 12 years old at the time of the accident. Eight years later, on reach-
ing majority, he brought an action against both his father and Mr. Jensen in British Col-
umbia. His decision to sue in British Columbia rather than Saskatchewan was motivated
by two important differences between the laws of the two provinces. First, his action was
statute-barred under the limitation of actions rule in effect in Saskatchewan at the time
of the accident. Second, Saskatchewan law did not permit a gratuitous passenger to recover
in the absence of willful or wanton misconduct on the part of the host driver. The defend-
ants brought an application by consent for a determination whether British Columbia
was forum non conveniens or, alternatively, whether Saskatchewan law applied. The
motions judge dismissed the application and his decision was upheld by the Court of
Appeal. The Supreme Court of Canada allowed the appeal, ruling that: (1) the law of the
place of the tort governs choice of law in tort; consequently, the substantive law of Sas-
katchewan qua lex loci delicti governed the plaintiff ’s claim; and (2) the Saskatchewan
limitation rule was properly characterized as substantive rather than procedural, and
therefore applied to bar the plaintiff ’s claim. The part of the court’s decision dealing with
the first issue is reproduced in Chapter 12. What follows here are the court’s reasons on
the substance/procedure issue.]
LA FOREST J:
On the application of the lex loci delicti principle, it is clear that the substantive law
applicable in the Tolofson case is that of Saskatchewan. This immediately disposes of the
plaintiff ’s (respondent’s) argument respecting the different standard of care under British
Columbia and Saskatchewan law: it is the law of Saskatchewan that applies.
The argument concerning the applicable statute of limitation, however, depends upon
whether the limitation period prescribed by s. 180(1) of the Vehicles Act, RSS 1978, c. V-3,
should be characterized as substantive or procedural. The section reads as follows:
180(1) Subject to subsections (2) and (3), no action shall be brought against a person for
recovery of damages occasioned by a motor vehicle after the expiration of twelve months
from the time when the damages were sustained. [Emphasis added.]
Both parties proceeded on the assumption that, if Saskatchewan law applies, this legis-
lation, read in conjunction with The Limitation of Actions Act, RSS 1978, c. L-15, would
make the plaintiff ’s action statute-barred. Not surprisingly, then, the respondent would
like the legislation characterized as procedural, in order that the British Columbia pro-
vision should apply; the appellant, of course, wishes it characterized as substantive.
In any action involving the application of a foreign law the characterization of rules
of law as substantive or procedural is crucial for, as Cheshire and North, Cheshire and
North’s Private International Law (12th ed. 1992), at pp. 74-75, state:
One of the eternal truths of every system of private international law is that a distinction
must be made between substance and procedure, between right and remedy. The substantive
rights of the parties to an action may be governed by a foreign law, but all matters appertain-
ing to procedure are governed exclusively by the law of the forum.
The reason for the distinction is that the forum court cannot be expected to apply every
procedural rule of the foreign state whose law it wishes to apply. The forum’s procedural
rules exist for the convenience of the court, and forum judges understand them. They aid
the forum court to “administer [its] machinery as distinguished from its product” (Poyser
v. Minors (1881), 7 QBD 329, at p. 333, per Lush LJ). Although clearcut categorization has
frequently been attempted, differentiating between what is a part of the court’s machinery
and what is irrevocably linked to the product is not always easy or straightforward. The
legal realist Walter Cook has commented (The Logical and Legal Bases of the Conflict of
Laws (1942), at p. 166):
If we admit that the “substantive” shades off by imperceptible degrees into the “procedural,”
and that the “line” between them does not “exist,” to be discovered merely by logic and
analysis, but is rather to be drawn so as best to carry out our purpose, we see that our problem
resolves itself substantially into this: How far can the court of the forum go in applying the
rules taken from the foreign system of law without unduly hindering or inconveniencing
itself?
This pragmatic approach is illustrated by Block Bros. Realty Ltd. v. Mollard (1981), 122
DLR (3d) 323 (BC CA). In that case the issue was whether the requirement of s. 37 of the
Real Estate Act, RSBC 1979, c. 356, that a real estate agent be licensed in British Columbia,
should be categorized as procedural or substantive. The parties had executed a real estate
listing agreement in Alberta for land situated in British Columbia. The plaintiff, an agent
licensed in Alberta, sold the land to Alberta residents. The defendant vendor failed or
refused to pay the commission. The plaintiff sued in British Columbia. The lex causae was
Alberta. The defendant pleaded that the British Columbia licensing requirement was
procedural. The court, however, ruled that it was substantive, notwithstanding that the
section read: “A person shall not maintain an action … ,” language traditionally relied on
for a finding that a statute is procedural because it purported to extinguish the remedy,
but not the right; The court expressly relied on policy reasons for its decision. It stated,
at pp. 327-28:
If, however, the contract is governed by the law of Alberta and if the contract is valid under
the law of Alberta, the characterization of s. 37 as procedural would deprive the plaintiff of the
opportunity to enforce his legal rights in a British Columbia Court. The only purpose of s. 37
is to enforce the licensing sections, and it should be examined in this context. I think that
legislation should be categorized as procedural only if the question is beyond any doubt. If
there is any doubt, the doubt should be resolved by holding that the legislation is substantive.
This approach makes sense to me. It is right to say, however, that it is significantly different
from the early common law position as it relates to statutes of limitation.
The common law traditionally considered statutes of limitation as procedural, as
contrasted with the position in most civil law countries where it has traditionally been
regarded as substantive. The common law doctrine is usually attributed to the seventeenth
century Dutch theorist Ulrich Huber, whose celebrated essay De conflictu legum diversa-
rum in diversis imperiis (1686), became known in England during the reign of William
and Mary (see Edgar H. Ailes, “Limitation of Actions and the Conflict of Laws” (1933),
31 Mich. L Rev. 474, at p. 487; and Ernest G. Lorenzen, “Huber’s De Conflictu Legum”
(1919), 13 Ill. L Rev. 375, reprinted in Ernest G. Lorenzen, Selected Articles on the Conflict
of Laws (1947), at p. 136). By the early nineteenth century, the doctrine was firmly estab-
lished in England and in the United States. From the cases and academic commentary of
the time (see, for example, Huber v. Steiner (1835), 2 Bing. NC 202, 132 ER 80; Leroux v.
Brown (1852), 12 CB 801, 138 ER 1119; Nash v. Tupper, 1 Caines 402 (NY SC 1803); Ernest
G. Lorenzen, “Story’s Commentaries on the Conflict of Laws—One Hundred Years After”
(1934), 48 Harv. L Rev. 15, reprinted in Selected Articles, supra, at p. 181), one can glean
the two main reasons for the ready acceptance of this doctrine in Anglo/American juris-
prudence. The first was the view that foreign litigants should not be granted advantages
that were not available to forum litigants. This relates to the English preference for the lex
fori in conflict situations. The second reason was the rather mystical view that a common
law cause of action gave the plaintiff a right that endured forever. A statute of limitation
merely removed the remedy in the courts of the jurisdiction that had enacted the statute.
Such reasoning mystified continental writers such as M. Jean Michel (La Prescription
Libératoire en Droit International Privé, Thesis, University of Paris, 1911, paraphrased in
Ailes, supra, at p. 494), who contended that “the distinction is a specious one, turning
upon the language rather than upon the sense of limitation acts. …” In the continental
view, all statutes of limitation destroy substantive rights.
I must confess to finding this continental approach persuasive. The reasons that formed
the basis of the old common law rule seem to me to be out of place in the modern context.
The notion that foreign litigants should be denied advantages not available to forum liti-
gants does not sit well with the proposition, which I have earlier accepted, that the law that
defines the character and consequences of the tort is the lex loci delicti. The court takes
jurisdiction not to administer local law, but for the convenience of litigants, with a view
to responding to modern mobility and the needs of a world or national economic order.
Canadian courts have also begun to shatter the mystique of the second reason which
rests on the notion that statutes of limitation are directed at the remedy and not the right.
This court has in another context taken cognizance of the right of the defendant to be free
from stale claims in Martin v. Perrie, [1986] 1 SCR 41. There the plaintiff sued the defend-
ant doctor for having left an indissoluble suture inside her during surgery ten years earlier.
At the time of the surgery, in 1969, the Ontario period of limitation on malpractice suits
was 1 year from the time of the medical intervention. The discovery principle of limitation
was adopted by statute in 1975. The plaintiff launched her lawsuit within a year of having
discovered her problem in 1979. Her argument was that the statute of limitations, being
procedural, was necessarily retrospective. Although not explicitly stated, the plaintiff ’s
reasoning seems to have been as follows: if the previous statute of limitation did not bar
the right but merely the remedy, then the new statute of limitations created a new remedy
(or revived an old one) enabling her to enforce a right that had never been extinguished.
The court circumvented the distinction between the plaintiff ’s right and her remedy
by holding that the termination of a limitation period vests rights in the defendant.
Chouinard J, at p. 49, quoted with approval Lord Brightman in Yew Bon Tew v. Kenderaan
Bas Mara, [1983] 1 AC 553 (PC), at p. 563:
In their Lordships’ view, an accrued right to plead a time bar, which is acquired after the
lapse of the statutory period, is in every sense a right, even though it arises under an act which
is procedural. It is a right which is not to be taken away by conferring on the statute a retro-
spective operation, unless such a construction is unavoidable. [Emphasis added.]
While correctly considering that a statute of limitation vests a right in the defendant,
the Privy Council in Yew Bon Tew continued to cling to the old English view that statutes
of limitation are procedural. Nonetheless the case seems to me to demonstrate the lack
of substance in the approach. The British Parliament obviously thought so. The following
year the rule was swept away by legislation; the Foreign Limitation Periods Act, 1984, 1984
(UK) 1984, c. 16, declared that foreign limitation periods are substantive.
I do not think it is necessary to await legislation to do away with the rule in conflict of
laws cases. The principal justification for the rule, preferring the lex fori over the lex loci
delicti, we saw, has been displaced by this case. So far as the technical distinction between
right and remedy, Canadian courts have been chipping away at it for some time on the
basis of relevant policy considerations. I think this court should continue the trend. It
seems to be particularly appropriate to do so in the conflict of laws field where, as I stated
earlier, the purpose of substantive/procedural classification is to determine which rules
will make the machinery of the forum court run smoothly as distinguished from those
determinative of the rights of both parties.
Such a step has already been judicially attempted by Stratton CJNB in Clark v. Naqvi
(1990), 99 NBR (2d) 271 (CA). In that case Clark, in 1978, received medical treatment
from Dr. Naqvi in Nova Scotia. He commenced an action for injuries arising out of that
treatment in New Brunswick in 1984. The limitation period in respect of such proceedings
in Nova Scotia was one year. The majority of the New Brunswick Court of Appeal held
that the action was statute-barred (Ryan JA dissenting). Referring to both Yew Bon Tew
v. Kenderaan Bas Mara and Martin v. Perrie, Stratton JA held, at p. 275, that the limitation
period was substantive, notwithstanding that it was phrased “[t]he actions … shall be
commenced within … ,” because it created an accrued right in the defendant to plead a
time bar. Hoyt JA, while concurring in the result, was reluctant to make such a categorical
statement. Ryan JA, dissenting, was unwilling to abandon the traditional common law rule
that statutes of limitation are procedural, though he decided the case on different grounds.
In my view, the reasoning of Stratton CJNB is correct. He stated, at p. 276:
When I read the words used in s. 2(1)(d)(i) of the Nova Scotia Limitation of Actions Act in
their grammatical and ordinary sense, I conclude that the limitation period in respect of
actions for negligence or malpractice against a registered medical practitioner is one year
from the date of the termination of medical services. Moreover, in my view, the section was
enacted by the Legislature with the purpose and intention of protecting the medical profes-
sion from stale claims when evidence may no longer be available to defending litigants who
come within the protection of the section.
This is not to say that procedural rules of the forum may not affect the operation of
the statute of limitation of the lex loci delicti. Thus, whether or not a litigant must plead
a statute of limitation if he or she wishes to rely on it is undoubtedly a matter of procedure
for the forum; some rules of court or judicial interpretations of the rules require the
pleading of all or certain statutes. Limitation periods included in the various rules of
court, such as those for the filing of pleadings, are also undoubtedly matters of procedure.
These may be waived with leave of the court or the agreement of the other parties, as often
happens. Additionally, a substantive limitation defence such as the one in the case at bar
may be waived either by failure to plead it, if this is required, or by agreement.
The limitation defence has been properly pleaded in the case at bar and all parties
proceeded before us on the assumption that, if Saskatchewan law applies, it is a valid
defence. I do not accept that this defence is so repugnant to public policy that a British
Columbia court should not apply it. The extent to which limitation statutes should go in
protecting individuals against stale claims obviously involves policy considerations
unrelated to the manner in which a court must carry out its functions, and the particular
balance may vary from place to place. To permit the court of the forum to impose its
views over those of the legislature endowed with power to determine the consequences
of wrongs that take place within its jurisdiction would invite the forum shopping that is
to be avoided if we are to attain the consistency of result an effective system of conflict of
laws should seek to foster.
For these reasons I conclude that the Saskatchewan limitation rule applies in these
proceedings.
NOTES
1. On the impact of Tolofson on pending litigation commenced in reliance on the old

procedural characterization, see Hendsbee v Khuber (1995), 148 NSR (2d) 270 (SC); Brown v
Marwich (1995), 145 NSR (2d) 220 (CA); see also DiPalma v Smart (1996), 43 Alta LR (3d) 161
(QB), in which the court allowed an amendment to the statement of defence in light of the
Supreme Court’s decision (see DiPalma v Smart (2000), 90 Alta LR (3d) 171 (QB) for the final
disposition of this case). And see Desautels v Katimavik (2003), 175 OAC 201, in which Laskin JA
concluded that Tolofson’s characterization of limitations rules as substantive precluded the
exercise of judicial discretion under the lex fori to revive a limitations period that had expired
under the foreign law applicable to the substance of the claim.
2. A subsequent Nova Scotia case, Vogler v Szendroi, 2008 NSCA 18, 290 DLR (4th) 642,
raises questions as to the substantive scope of foreign limitations law. The case involved an
action initiated in Nova Scotia arising out of a car accident in Wyoming and governed as to
substance by Wyoming law. The action was filed with the Nova Scotia court just prior to the
expiry of the four-year Wyoming limitation period, but the defendant was not served with
the process of the Nova Scotia court for another three years. Under the Nova Scotia rules of
court, filing was sufficient to trigger the commencement of an action. However, the Wyo-
ming rules of civil procedure stipulated that, if service was not made within 60 days of filing,
the action was not considered to have commenced “for the purposes of limitation” until
service was made. Accordingly, the issue was whether the Wyoming service rule formed part
of the substantive limitations law of Wyoming and therefore was applicable to bar the Nova
Scotia action. The lower court held that the rule was “integral” to Wyoming limitations law
and therefore was substantive. The Court of Appeal reversed, concluding that the method
by which a plaintiff commences an action involves a court’s process as opposed to a liti-
gant’s substantive rights and therefore was properly classified as procedural. In reaching this
conclusion, the court was influenced by the reasoning of Janet Walker in the following
excerpt from “Twenty Questions (About Section 23 of the Limitations Act, 2002)” in W Gray,
L Kerbel-Caplan & J Ziegel, eds, The New Ontario Limitations Regime: Exposition and Analysis
(Toronto: Ontario Bar Association, 2005):
On one view, it might be supposed that, if the event that starts the time running on the limita-
tion period is a matter of substantive law, then so too should the event that stops the time from
running be regarded as a matter of substantive law. Contrary to this, the English courts apply
their own law to determine “whether, and the time at which, proceedings have been com-
menced in respect of any matter.” Although the Ontario Act does not seem to offer any guid-
ance on this, it is suggested that this is a sensible approach: first, because the question arises
only as a result of the commencement of the action in accordance with the Ontario Rules, sec-
ond, because the vagaries of service abroad may reduce a claimant’s ability to ensure this
occurs in a timely fashion, and finally because it is unlikely that the foreign limitation period
would have been designed to accommodate the delay that could occur in the service of docu-
ments for foreign proceedings.
The practice of the English courts noted in the excerpt above is derived from the Foreign
Limitation Periods Act 1984, 1984, c 16 (UK). While s 1(1) of the Act provides generally for the
application of the limitations rules of the law applicable to the substantive merits of a claim,
s 1(3) preserves the application of English law to determine the time when an action is con-
sidered to have been commenced for limitation purposes. This rule has since been super-
seded by the European Union’s Rome II Regulation, above, which instead endorses the
approach adopted by the lower court in Vogler. Article 15 of the Regulation lists the matters
explicitly brought within the scope of the applicable substantive law, and these include
“(h) … rules of prescription and limitation, including rules relating to the commencement,
interruption and suspension of a period of prescription or limitation.” It is arguable that the
Rome approach is more consistent with the narrower concept of procedure endorsed in
Tolofson, including the presumption that cases of doubt should be resolved in favour of a
substantive characterization. After all, a rule that makes the commencement of an action
dependent on service for the purposes of limitation would seem to relate to the same policy
concerns that inform limitations law generally—for example, the policy of protecting
defendants from claims based on stale evidence. If the court in Tolofson considered
limitations policy to be most appropriately set by the applicable substantive law, why should
that not extend to the whole of the foreign limitations law?
3. In John Pfeiffer Pty Ltd v Rogerson (2000), 203 CLR 503 at 542-44 (HCA) (footnotes omit-
ted), the majority of the High Court of Australia endorsed a narrowing of the procedural
characterization—so as to make issues relating to both limitations and damages substantive
for conflict of laws purposes—for reasons similar to those expressed in Tolofson:
As already indicated, the choice of law rules traditionally distinguish between questions of sub-
stance and questions of procedure. There is much history that lies behind the distinction, but
search as one may, it is very hard, if not impossible, to identify some unifying principle which
would assist in making the distinction in a particular case. But, as the majority said in McKain:
Though the dividing line is sometimes doubtful or even artificial, the need to distinguish
between substantive law and procedural law is clearly recognized for a number of forensic
purposes.
Some statutes of limitation have traditionally been held to be procedural on the basis that
they bar the remedy not the right; other limitation provisions have been held to be substantive.
But all limitation provisions can affect whether a plaintiff recovers. Questions of what heads of
damage are allowable have been held to be substantive; but questions of quantification of
damages have been held to be procedural. But all questions about damages can affect how
much a plaintiff recovers and, thus, statutes such as the NSW Compensation Act, which is in issue
in this case, alter the rights of plaintiffs and, also, the obligations of defendants.
Two guiding principles should be seen as lying behind the need to distinguish between
substantive and procedural issues. First, litigants who resort to a court to obtain relief must take
the court as they find it. A plaintiff cannot ask that a tribunal which does not exist in the forum
(but does in the place where a wrong was committed) should be established to deal, in the
forum, with the claim that the plaintiff makes. Similarly, the plaintiff cannot ask that the courts
of the forum adopt procedures or give remedies of a kind which their constituting statutes do
not contemplate any more than the plaintiff can ask that the court apply any adjectival law
other than the laws of the forum. Secondly, matters that affect the existence, extent or enforce-
ability of the rights or duties of the parties to an action are matters that, on their face, appear to
be concerned with issues of substance, not with issues of procedure. Or to adopt the formula-
tion put forward by Mason CJ in McKain, “rules which are directed to governing or regulating
the mode or conduct of court proceedings” are procedural and all other provisions or rules are
to be classified as substantive.
These principles may require further elucidation in subsequent decisions but it should be
noted that giving effect to them has significant consequences for the kinds of case in which the
distinction between substance and procedure has previously been applied. First, the applica-
tion of any limitation period, whether barring the remedy or extinguishing the right, would be
taken to be a question of substance not procedure (which is the result arrived at by the statutes
previously referred to). The application of any limitation period would, therefore, continue to be
governed (as that legislation requires) by the lex loci delicti. Secondly, all questions about the
kinds of damage, or amount of damages that may be recovered, would likewise be treated as
substantive issues governed by the lex loci delicti.
4. As noted above, the Tolofson (and Pfeiffer) approach to the characterization of limita-
tion rules is consistent with the modern English rule as adopted in the Foreign Limitation
Periods Act 1984, 1984, c 16 (UK). It is also consistent with the Rome Regulations, which like-
wise include prescription and limitation in the list of issues falling within the scope of the
applicable law: see Rome I, above, art 12(1)(d); Rome II, above, art 15(h).
5. In 2002, Ontario codified the Tolofson rule in its new limitation of actions statute, the
Limitations Act, 2002, SO 2002, c 24, Schedule B, s 23 of which provides that the limitations
law of Ontario or any other jurisdiction is to be classified as substantive law. It follows that
claims litigated in Ontario will be subject to the limitations law of the substantive law other-
wise applicable to the merits: for judicial confirmation, see Bieberstein v Kirchberger, 2013
ONCA 629. In 2012, British Columbia adopted the same approach in s 4(1) of its new Limita-
tion Act, SBC 2012, c 13, subject to one qualification. Where the claim alleges sexual miscon-
duct involving a minor, sexual assault, or assault and battery against a minor or a person in
an intimate or dependent relationship with the alleged perpetrator, s 4(2) requires the
application of British Columbia limitation law, which does not limit the time in which these
types of actions can be brought. The Manitoba Law Reform Commission also has recom-
mended the codification of Tolofson as most “consistent with modern choice of law think-
ing”: see Manitoba Law Reform Commission at 12.
6. Certain other provinces, however, have enacted legislation deviating from the Tolofson
approach. In 1989, the Alberta Law Reform Institute had recommended the application of
Alberta limitations law to all claims for relief before the Alberta courts, “notwithstanding
that, in accordance with conflict of law rules, the claim will be adjudicated under the sub-
stantive law of another jurisdiction”: see Alberta Law Reform Institute. In 1996, after Tolofson,
Alberta enacted the recommended provision as s 12 of the Alberta Limitations Act, RSA 2000,
c L-12. When Saskatchewan revised its limitations legislation in 2004, it adopted a similar
provision: see Saskatchewan Limitations Act, SS 2004, c L-16.1, s 27.
The apparent intent of s 12 of the Alberta statute was to make Alberta limitations law
exclusively applicable in actions in Alberta in line with the traditional procedural character-
ization. However, in Castillo v Castillo, 2005 SCC 83, [2005] 3 SCR 870, 260 DLR (4th) 439, a
majority of the Supreme Court of Canada interpreted the provision to permit the concurrent
application of the limitation rules of both Alberta law and the applicable substantive law.
The case arose out of an automobile accident in California. The passenger and driver were
both from Alberta. The passenger filed a claim against the driver in the Alberta courts just
prior to the expiry of the two-year Alberta limitation period, but after the expiry of the one-
year California period. California law as the lex loci delicti applied to the substance of the
claim. The driver argued that the Tolofson characterization of limitation issues as substantive
rendered the California period applicable. The passenger argued that s 12 of the Alberta
Limitations Act was intended to make Alberta limitations law exclusively applicable. The
Supreme Court, in line with the courts below, concluded that the California limitation period,
as part of the applicable substantive law, barred the claim. In the view of the majority, s 12
was not intended to revive a cause of action already barred by the applicable substantive
law at the time the Alberta action was commenced. The provision operated only to give
effect to Alberta limitations policy in situations where the applicable substantive law pro-
vided for a longer limitation period than Alberta law.
7. The effect of the interpretation adopted in Castillo is that a claimant in an Alberta
action governed by foreign law must satisfy the limitation requirements of both the applic-
able substantive law and Alberta law. If either the Alberta limitation period or the other
limitation period has expired, the claim cannot be pursued in Alberta. Alberta subsequently
amended its limitations statute to bring the wording of s 12 more explicitly in line with this
interpretation: see SA 2007, c 22. New Brunswick adopted the Alberta approach as s 24 of its
new Limitation of Actions Act, SNB 2009, c L-8.5, which came into full effect on May 1, 2012.
8. As noted above, the 1982 Uniform Limitations Act provided for the exclusive applica-
tion of the limitations law of the forum. The 1982 Act was implemented by Newfoundland in
1995: see Limitations Act, SNL 1995, c L-16.1, s 23. Unlike the wording of the Alberta statute
considered in Castillo, the wording of the Newfoundland provision makes it clear that New-
foundland limitations law applies to all actions commenced in the province to the exclusion
of all otherwise applicable substantive laws. The result is in line with the traditional common
law procedural classification.
9. The Alberta conflicts rule ensures that a litigant whose action is time barred by the
applicable substantive law cannot evade that restriction by shopping for a forum with a
longer limitation period. On the other hand, it also bars access to the Alberta courts in the
converse case where the Alberta limitation period has expired but the action remains alive
under the limitation rules of the applicable substantive law. Although the claimant may still
be able to pursue its claim before the courts of the jurisdiction whose laws apply, this may
not always be the most efficient or convenient venue, especially in cases such as Castillo
where both parties are resident in the forum.
10. The policy underlying the Alberta conflicts rule is presumably rooted in the desire to
protect local litigants, particularly locally resident defendants, from exposure to the limita-
tions policies of a foreign jurisdiction that “may not have a limitations law at all, or may have
one that is harsh or capricious.” These, in any event, were the concerns expressed by the ULC
when it recommended codification of the traditional procedural classification in the 1982
Uniform Limitations Act: see “Limitation of Actions: Alberta Report,” [1979] Unif L Conf Proc
155 at 211.
11. In 2005, the ULC endorsed a new Uniform Limitations Act codifying the Tolofson
approach. The background report addressed and rejected the argument that local limita-
tions policy should prevail over the conflict of laws considerations underpinning the Tolof-
son decision:
The Tolofson rule, based on the goal of achieving a coherent conflict of laws regime, effectively
sets one clear limitation period, consistent with the applicable law, to apply to a claim regard-
less of where that claim is litigated, and appears to be far more responsive to modern conditions
than the rule in the 1982 Uniform Act. In contrast, the 1982 Uniform Act’s rule, based on local
public policy, has the potential effect of encouraging forum shopping (for the longest limitation
period), frustrating the portability of rights and obligations across borders (as enforceability of
contractual provisions regarding limitation periods would become uncertain) and increasing
transaction costs by forcing parties to litigate in inappropriate jurisdictions.
See John Lee, “A New Uniform Limitations Act” (2004), online: <http://www.ulcc.ca>.
12. The Conference’s background report also expressed concern that there was a meas-
ure of constitutional risk in a rule that imposed forum limitations rules on a claim governed
by foreign substantive law. The constitutional issue formed the basis of Justice Bastarache’s
dissent in Castillo, above. In his view, because the Alberta statute did not require a meaning-
ful connection to Alberta to trigger the application of Alberta limitations law, it violated the
territorial limits on provincial legislative competence in s 92 of the Constitution Act, 1867. The
real and substantial connection required for adjudicatory competence was insufficient to
establish the kind of meaningful connection necessary to support legislative competence:
see further Walker; Robertson; Edinger.
13. In the United States, many state legislatures have enacted a so-called borrowing
statute under which, as in Alberta, the shorter of the forum’s and the foreign state’s limita-
tion period applies. Some of these statutes create an exception in favour of the forum limit-
ation period when the plaintiff is a resident of the forum: see e.g. NY CPLR §202 and Cal Civ
Pro 361. The Restatement (Second) of Conflict of Laws, §142 (1989) provides that the court
should determine the limitations period by applying the “substantial relationship” principles
of s 6. However, the Restatement then provides that “in general, unless the exceptional cir-
cumstances of the case make such a result unreasonable,” the substantial relationship
approach means that the forum will apply its own statute of limitations barring the claim.
The forum will also apply its own statute of limitations permitting the claim unless “mainten-
ance of the claim would serve no substantial interest of the forum,” and “the claim would be
barred under the statute of limitations of a state having a more significant relationship to the
parties and the occurrence.” Thus the Restatement approach represents only a minor shift
away from the forum law bias reflected in the traditional common law procedural classifica-
tion and in the Alberta rule.
III. REMEDIAL RELIEF

The traditional English approach to the characterization of limitation statutes provided
defendants with at least a technical basis for the argument that other statutory bars on
action drafted in similar language should also be classified as procedural. The Supreme
Court’s decisive rejection in Tolofson, above, of the historical English methodology should
put an end to this kind of argument. However, even prior to Tolofson, the courts in common
law Canada had rejected attempts by counsel to transform statutory bars on suit into mere
issues of procedure. A good example is afforded by the cases dealing with “seize or sue”
legislation—namely, statutory provisions aimed at the protection of the debtor under which
a secured creditor is required to elect between pursuing a debtor on his or her personal debt
obligation and enforcing its real rights against the collateral. Statutes of this type have a
manifestly substantive impact on liability and they are relatively convenient to ascertain and
apply by the forum. As such, they have been generally classified as substantive in character:
see Traders Finance Corporation v Casselman, [1960] SCR 242; Livesley v Horst Co, [1924] SCR
605; 243930 Alberta Ltd v Wickham (1990), 75 OR (2d) 289 (CA); German Savings Bank v Tetrault
(1904), 27 CS 447 (Qc SC); Canadian Acceptance Corporation v Matte (1957), 9 DLR (2d) 304
(Sask CA); Sigurdson v Farrow (1981), 15 Alta LR (2d) 180 (QB); but see to the contrary Alberta
Treasury Branches v Granoff (1984), 58 BCLR 370 (CA), Esson JA dissenting.
Similar issues are raised by statutory bars on claims by unlicensed real estate agents to
recover commissions owing on listing agreements and the like. Canadian courts have been
reluctant to apply domestic statutes of this type in actions having a conflicts character on
the basis simply of a procedural classification. The issue is seen as more properly analyzed
according to whether the mandatory policy underlying the forum statute was intended to
apply to the factual circumstances before the court notwithstanding the presence of extra-
territorial contacts: see Block Bros Realty Ltd v Mollard (1981), 27 BCLR 17 (CA); Avenue Prop-
erties Ltd v First City Development Corporation Ltd (1986), 7 BCLR (2d) 45 (CA). On the extent to
which public policy may supply a positive basis for invoking mandatory statutory provisions
of this nature, see Gillespie Management Corp v Terrace Properties (1989), 39 BCLR (2d) 337
(CA), reproduced in Chapter 4.
III. Remedial Relief 603
No-fault insurance legislation—increasingly common in the area of motor vehicle acci-

dents and well established for industrial injury—may bar or restrict civil recourse in tort for
bodily injury to the extent the victim is entitled to compensation from the relevant no-fault
insurance provider. Regardless of the statutory drafting technique, restrictions of this type
directly affect the very existence of the plaintiff’s right of action and have accordingly been
characterized as substantive: see Ngo v Luong, 2014 BCSC 516; Hurst v Leimer (1995), 26 OR
(3d) 760, 33 CCLI (2d) 82 (Gen Div). Once the substantive character of this type of provision is
conceded, its scope of application in cases with an extraprovincial connection depends on
a construction of the relevant wording, taking into account the policies underlying the no-
fault compensation regime. If the statutory wording is perceived as ambiguous—for
example, where the no-fault regimes of several jurisdictions are implicated on the facts—the
court may call in aid substantive choice of law principles in the interpretation exercise: see
MacDougall v Nova Scotia (Workers’ Compensation Appeals Tribunal), 2010 NSCA 92 at para 41.
A. Statute of Frauds and Like Requirements

The English courts, at an early stage, classified statute of frauds and like requirements for
written evidence of a contract as procedural in both the domestic and conflicts spheres.
Thus, in Leroux v Brown (1852), 138 ER 1119, s 4 of the English Statute of Frauds was held to bar
suit in England on an oral contract valid and enforceable by its proper law.
The decision in Leroux cannot be taken to represent the Canadian common law position.
First, the procedural classification is inconsistent with modern choice of law theory under
which a contract or other juridical act, as a general rule, is formally valid so long as it satisfies
the formal requirements of the lex causae (or indeed any other closely connected law): see
e.g. Rome I, above, art 11; Rome II, above, art 21. Second, Leroux was based on the same for-
malistic theory—thoroughly discredited in Tolofson, above—that supported the character-
ization of statutes of limitation as procedural—namely, that the typical statutory wording
(“no action shall be brought”) merely barred the procedural remedy rather than extin-
guished the substantive right. Thus Tolofson is implicit authority for the characterization of
statutes of fraud and like requirements as substantive. This conclusion finds support in the
decision of the Court of Appeal of Western Australia in Tipperary Developments Pty Ltd v The
State of Western Australia, [2009] WASCA 126 (22 July 2009) on the appropriate characteriza-
tion of s 4 of the Statute of Frauds. The case was decided after the High Court of Australia, in
John Pfeiffer Pty Ltd v Rogerson (2000), 203 CLR 503, had endorsed a narrow concept of “pro-
cedure” for the purposes of characterization for reasons similar to those advanced by La For-
est J in Tolofson. The court concluded at paras 79-81 that by parity of reasoning Pfeiffer made
s 4 of the Statute of Frauds substantive:
Matters of substance are governed by the lex causae (the law of the cause of action) and matters
of procedure are governed by the lex fori (the law of the forum). The appellant says the decision
of the High Court in John Pfeiffer Pty. Ltd. v. Rogerson, [2000] HCA 36; (2000) 203 CLR 503 applies
by parity of reasoning to render s 4 of the Statute of Frauds a matter of substance rather than
procedure for the purpose of determining whether the matter is governed by the proper law of
the contract or the law of the forum (if that is different).
In John Pfeiffer the plaintiff sued in the Supreme Court of the Australian Capital Territory for
damages in tort for personal injury suffered in New South Wales. New South Wales legislation
limited the amount of damages that could be awarded to the plaintiff for non-economic loss.
The law of the Australian Capital Territory imposed no relevant limit. The court held that the
limitation on damages, not being directed to governing or regulating the mode or conduct of
court proceedings, was a matter of substance rather than procedure and was therefore gov-
erned by the lex loci delicti (the law of the place where the tort was committed) not the lex fori.
The High Court said:
[M]atters that affect the existence, extent or enforceability of the rights or duties of the
parties to an action are matters that, on their face, appear to be concerned with issues of
substance, not with issues of procedure. Or to adopt the formulation put forward by
Mason CJ in McKain [v RW Miller and Company (SA) Pty Ltd [1991] HCA 56, (1991) 174 CLR 1]
“rules which are directed to governing or regulating the mode or conduct of court pro-
ceedings” are procedural and all other provisions or rules are to be classified as substan-
tive (543-544).
Applying the reasoning of the High Court in John Pfeiffer, s 4 of the Statute of Frauds would
be characterised as substantive not procedural for the purpose of the conflict of laws. Accord-
ingly, the section only applies because the proper law is that of Western Australia.
In the United States, the Restatement (Second) of Conflict of Laws (1971), §141 likewise
provides that whether a contract must be in writing or evidenced by a writing in order to be
enforceable is determined by the law applicable to the contract on the basis of the following
rationale:
Analytically, arguments can be made in favor of classifying the statute of frauds as either sub-
stantive or procedural for choice-of-law purposes. In support of a substantive classification, it
can be pointed out that application of a particular statute of frauds is likely to affect the rights
and liabilities of the parties under the contract. It can also be argued that at least the principal
purpose of the statute is to protect the parties from fraud by requiring that in order to be valid
and enforceable a contract must be entered into with certain prescribed formalities. The applic-
ability, or non-applicability, of a particular statute of frauds is also a question to which the par-
ties are likely to give consideration before entering into the contract. In favor of a procedural
classification and thus for application of the local law of the forum, it can be argued, on the
other hand, that the statute of frauds was designed to protect the courts by limiting the possi-
bilities of perjury and also perhaps by avoiding unseemly disputes between the parties as to
whether there was a contract at all and, if so, what were its provisions. The phraseology of cer-
tain statutes of frauds might also be thought to support a procedural classification. … The
courts have rarely espoused the arguments stated above which would support a procedural
classification. Also the arguments in favor of a substantive classification are the stronger and the
more persuasive.
B. Damages
Early in the last century, the Supreme Court held that all issues relating to the nature and
extent of the obligation, including the measure of damages in an action in respect of a
contract governed by foreign law, are not matters of procedure but matters of substance or
liability: see Livesley v Horst Co, [1924] SCR 605. The English authorities on which this decision
was based were superseded by later cases in which the English courts drew a distinction
between “substantive” rules relating to which heads of loss are recoverable and “procedural”
rules relating to the assessment or quantification of damages: see J D’Almeida Araujo LDA v
Sir Frederick Becker & Co Ltd, [1953] 2 QB 329 at 336; Boys v Chaplin, [1971] AC 356 (HL) at
378-79, 382-83, 392-93, and 394. In 2007, in Harding v Wealands, [2007] 2 AC 1, the House of
Lords reaffirmed that this was the common law position and that it had been preserved by
s 14(3)(b) of the Private International Law (Miscellaneous Provisions) Act 1995, 1995, c 42 (UK).
Further, any statutory caps on the quantum of compensation recoverable under the foreign
law applicable to the substance of the claim were also to be classified as procedural and
therefore did not apply in an English forum.
The decision in Harding generated considerable commentary, none of it positive: see
Carruthers; Gray; Mortensen; Schoeman; Weintraub. As Weintraub colourfully observed in
his critique of the decision (at 311): “[T]reating quantification of damages as procedural
makes no sense. Quantification is the bottom line—what all the huffing and puffing at trial
is about.”
Harding no longer represents English law. The matter is now governed by Rome II, above;
see generally Maher v Groupama Grand Est, [2009] 1 WLR 1752. Article 15 of Rome II provides
that the law designated as applicable to non-contractual obligations under the regulation
governs “the existence, the nature and the assessment of damages or the remedy claimed.”
With respect to the law applicable to contractual obligations, the traditional English charac-
terization had already been superseded by the European Community Convention on the Law
Applicable to Contractual Obligations 1980 (the Rome Convention). Under art 10(1)(c), the
substantive law governing a contract also governs “the consequences of breach, including
the assessment of damages in so far as it is governed by rules of law,” provided that this is
within the powers conferred on the forum court by its procedural law. Article 1(c) of Rome I,
above, which replaces the Rome Convention, carries forward this provision.
In Wall v Mutuelle De Poitiers Assurances, [2014] EWCA Civ 138, the English Court of Appeal
was called on to interpret the scope of the law applicable to the “assessment of damage or
remedy claimed” under art 15(c) of Rome II in a personal injury claim governed by French
law. In concluding that a broad interpretation was warranted, Lord Justice Jackson reasoned
as follows (at paras 32-38):
The relevant provision. Article 15 of Rome II provides:
The law applicable to non-contractual obligations under this Regulation shall govern in
particular:
• • •
(c) … the assessment of damage or remedy claimed.
The parties disagree about what “law applicable” means in this context.
The rival contentions. The rival contentions are as follows:
i) The claimant contends that in the phrase “law applicable” the word “law” should be con-
strued narrowly. It means legal rules which dictate a result. Thus, in the context of article
15(c) of Rome II, the claimant contends that “law” has the following meaning: “fixed legal
rules which dictate expressly the amount to be recovered.”
ii) The defendant contends that in the phrase “law applicable” the word “law” should be
construed broadly. It includes practices, conventions and guidelines. Thus, in the context
of article 15 (c) of Rome II, the defendant contends that “law” includes “practices, conven-
tions and guidelines regularly used by judges in assessing damages under their law.”
My view. In my view the defendant’s contention is correct. As Professor Dworkin has elo-
quently demonstrated, the law comprises both rules and principles. Principles do not dictate
results, but they exert influence. The judge arrives at the result in any given case by applying the
appropriate rules and taking into account those principles which bear upon the problem. See
Ronald Dworkin, Taking Rights Seriously, Duckworth 1977 (passim) and Law’s Empire, Harvard
University Press 1986 (chapter 7, “Integrity in Law”). Whether one is talking about civil law or
common law, it is unduly restrictive to confine the notion of “law” to black letter rules.
Application to the present case. As Longmore LJ has explained, it appears from the expert
evidence that French judges normally award personal injury damages by reference to the cat-
egories drawn up by M. Dintilhac. In relation to permanent aesthetic loss French judges normally
have regard to the tariffs published by the Paris Court of Appeal. We are not told what tariffs
exist for other categories of non-pecuniary damage, but it seems probable that such tariffs
exist. These are not black letter rules. Judges have discretion to depart from them to such extent
as they deem appropriate in particular cases. In my view, the Dintilhac guidance and any prevail-
ing tariffs constitute part of the “law” which under article 15 of Rome II “shall govern … the
assessment of damage or remedy claimed.” The trial judge in the present case, with the assist-
ance of expert evidence, should apply the Dintilhac guidance and any prevailing tariffs for
non-pecuniary damage, subject to the same margin of discretion as a French judge would have.
Consequence of the claimant’s contention. The claimant’s contention would produce bizarre
results. In Spain there is a statutory scheme for the assessment of damages following a road
traffic accident. This is set out in the Motor Vehicles Act 2004. Under this scheme the amount of
compensation depends upon the number of points which the claimant achieves. A medical
expert assesses the severity of the injuries. On the basis of that assessment the amount of
compensation is determined by statute. The charts which convert points to compensation are
updated from time to time by reference to inflation. The most recent update was in 2013.
Accordingly, on the claimant’s analysis, if C is injured in Spain and sues in England, he recovers
damages on the Spanish scale. If C is injured in France and sues in England, he recovers damages
on the English scale. This is because the Dintilhac guidance and any prevailing tariffs for non-
pecuniary damage (such as those issued by the Paris Court of Appeal), though followed in
practice by judges, are not formal rules of law. I do not believe that Rome II was intended to lead
to such bizarre results.
Objectives of Rome II. The objectives of Rome II are set out in the preamble. The recitals of
particular relevance are 6, 14, 16 and 33. Recital 33 specifically refers to the assessment of dam-
ages for the victims of road traffic accidents. In my view, the clear intention of Rome II is that
both the rules and principles governing the assessment of damages for such victims should be
those of the state where the accident occurred, regardless of where the victim sues. This will
promote certainty, clarity and fairness, all of which are objectives of Rome II.
Conclusion. In the present case, therefore, the claimant is entitled to recover all heads of
recoverable loss which are recognised in France. The judge assessing non-pecuniary losses
should have regard to the Dintilhac guidance and any prevailing tariffs for damages (such as
those issued by the Paris Court of Appeal) to the same extent that a French judge would do so.
In Stevens v Head (1993), 176 CLR 433 (HCA), the High Court of Australia had decided, by a
majority of 4:3, that a statutory cap on the recovery of damages under New South Wales law
was of a procedural nature and therefore inapplicable in proceedings in Queensland, not-
withstanding that the action was otherwise governed by New South Wales law. Subse-
quently, in John Pfeiffer Pty Ltd v Rogerson (2000), 203 CLR 503 (HCA), the High Court
reconsidered Stevens, concluding that a limitation on damages imposed by a different New
South Wales statute was a substantive rule and therefore applicable as part of the substan-
tive lex causae. A majority of the court concluded, more broadly (at 544), that “all questions
about the kinds of damage, or amount of damages that may be recovered, would likewise
be treated as substantive issues governed by the lex loci delicti” (emphasis in original). This
conclusion is consistent with §171 of the American Law Institute’s Restatement (Second) of
Conflict of Laws (1971), which provides that “the law having the most significant relationship
to the issue determines the measure of damages.”
These international developments are consistent both with early Supreme Court authority
(see Livesley, above) and with the spirit of the Supreme Court’s decision in Tolofson, above,
which decisively rejected the mechanical distinction between right and remedy on which the
procedural classification of quantification issues is based. Thus it is somewhat surprising that
in two cases decided after Tolofson, Canadian courts applied the traditional English common
law approach to characterization: Wong v Wei (1999), 65 BCLR (3d) 222 (SC) and Somers v
Fournier (2002), 60 OR (3d) 225 (CA) (the latter case is reproduced in Chapter 12). Both cases
involved the appropriate characterization of the upper limit imposed by the Supreme Court
on the recovery of non-pecuniary damages in tort: see Andrews v Grand & Toy Alberta Ltd,
[1978] 2 SCR 229; Thornton v Prince George School District No 57, [1978] 2 SCR 267; Arnold v Teno,
[1978] 2 SCR 287. As authority for the proposition that the cap should be characterized as
procedural and therefore applicable in forum proceedings otherwise governed by foreign
law, both courts relied on the Australian High Court decision in Stevens in which, as noted
earlier, a similar cap on compensation was likewise characterized as procedural, and did not
have the benefit of the High Court’s subsequent reversal of position in Pfeiffer, above.
However, the courts were influenced as much or more by policy concerns as precedent.
The accidents in both cases had occurred in the United States and were therefore governed
as to substance by the law of the state where the accident occurred pursuant to the lex loci
delicti rule adopted in Tolofson. On the other hand, both the victims and the defendants
were forum residents and the courts were clearly of the view that Canadian compensation
policies were thereby directly implicated. Indeed, in Wong v Wei, the court held that the cap
on damages should apply, as a matter of substantive choice of law analysis, pursuant to the
suggestion in Tolofson that an exception might be made to the exclusive application of the
lex loci delicti in the international context to avoid an injustice. The court’s characterization
of the cap as procedural was offered only as a secondary justification in the event that its
conclusion that the exception could be applied was overturned on appeal. In Somers v
Fournier, the Ontario Court of Appeal had already concluded that the “injustice” exception
should be limited to truly exceptional situations: Wong v Lee (2002), 58 OR (3d) 398 (CA). Con-
sequently, the procedural characterization of the cap was the only mechanism available to
the court to displace the lex loci delicti in favour of forum compensation policy.
The evolving Australian jurisprudence may reflect a similar temptation to adopt a proced-
ural characterization as an indirect means of escape from an inconvenient choice of law
result. In Pfeiffer, above, the High Court had adopted the lex loci delicti rule for choice of law
only for intrastate torts. In its later decision in Régie National des Usines Renault SA v Zhang
(2002), 210 CLR 49 (HCA), the court extended the lex loci delicti rule to international tort litiga-
tion. However, the majority (at 76) reserved for further consideration whether the propos-
ition, established in Pfeiffer, that “all questions about the kinds of damage, or amount of
damages … are substantive issues governed by the lex loci delicti,” should be applied in
cases of foreign tort. The decision to reserve on this question is puzzling because there was
nothing in the High Court’s reasoning on the characterization issue in Pfeiffer to indicate why
the line between substance and procedure should be drawn any differently in international
cases: see on this point the remarks of Sir William Aldous in Harding v Wealands, [2005] 1 WLR
1539 (CA) at para 94. It may be that the court wished to preserve flexibility in applying the
lex loci delicti on issues of damages in the international context. However, this would more
logically and transparently be accomplished by recognizing a flexible exception to the
choice of law rule in the first instance as opposed to reviving the mechanical forum bias, and
the attendant risks of forum shopping, inherent in the traditional English approach to char-
acterization: see generally Mortensen. In any event, while the question still remains open,
the Australian lower courts have consistently characterized issues relating to the quantifica-
tion of damages as substantive: see Garnett at 335-36.
C. Recovery of Legal Costs and Pre-Judgment Interest

In Somers v Fournier (2002), 60 OR (3d) 225 (CA) (reproduced in Chapter 12), the Ontario Court
of Appeal was confronted with the appropriate characterization of rules relating to the
award of legal costs and the award of pre-judgment interest. New York law—the law applic-
able to the merits of the claim—did not permit recovery for either, whereas Ontario law, the
law of the forum, allowed both. Reasoning that the award of costs is primarily a discretionary
judicial tool used to control the litigation process as opposed to forming part of the lis
between the parties, the court characterized the Ontario rule as procedural and therefore
applicable. The Quebec Superior Court likewise has characterized the award of legal costs as
procedural and therefore governed by the Quebec Code of Civil Procedure: see Kadar (Estate
of), 2016 QCCS 109 at para 54.
On the other hand, reasoning that the primary purpose of an award of pre-judgment
interest is to compensate a plaintiff for delay in receiving its damages, and thus akin to a
head of damage, the court characterized this issue as substantive and therefore governed by
New York law. In the United States, the Restatement (Second) of Conflict of Laws (1971), §207
comment likewise classifies pre-judgment interest as substantive. Although that classifica-
tion is not uniformly adhered to by state courts, a policy analysis (prevention of forum shop-
ping and the use of pre-judgment interest to compel settlement) favours the Restatement
approach: see Palmer.
IV. PARTIES
International Association of Science and Technology

for Development v Hamza
1995 ABCA 9, 28 Alta LR (3d) 125
[In connection with a matrimonial property action involving the defendants, Christa and
Mohamed Hamza, the plaintiffs—the International Association of Science and Technology
for Development (IASTD) and the International Society for Mini & Micro Computers
(ISMM)—sought a declaration that neither defendant had any legal or equitable interest
in the assets held in their names. Christa Hamza moved for an order striking out the
action on the basis that the plaintiffs lacked the legal status to sue in Alberta. Although
the plaintiffs were registered in Switzerland as societies and recognized as legal entities
under Swiss law, neither was incorporated or registered as any form of society or trade
IV. Parties 609
union under any provincial or federal law. The chambers judge dismissed her application
and Mrs. Hamza appealed.]
CONRAD JA:
Status to Sue Under Alberta Law Generally

[12] The appellant argues that to sue in Alberta, an entity must be either a person or
a corporation, and that this requirement should apply equally to foreign and resident
entities. The statement of claim does not allege an incorporated body and, in fact, the
respondent acknowledges that IASTD and ISMM are not incorporated.
[13] Leaving aside the question of a foreign entity, in general, a resident entity has
status to sue or be sued in Alberta if it is recognized under the statutory or common law
as a natural or statutory person. The term natural persons simply refers to living beings,
generally required to be of full age and mentally competent, but also includes aliens,
non-residents, convicts and accused persons, and in a representative capacity, mentally
incompetent persons and infants.
[14] Statutory persons are non-living entities recognized by law as possessing legal
personalities separate and apart from those of their constituent members. In Alberta,
corporations are deemed legal persons by virtue of s. 15(1) of the Alberta Business Cor-
poration Act, SA 1981, c. B-15 which reads:
15(1) A corporation has the capacity and, subject to this Act, the rights, powers and
privileges of a natural person.
[15] Societies duly registered pursuant to the Societies Act, RSA 1980, c. S-18 are
deemed to be corporations and are thus granted the status of a statutory person pursuant
to s. 10 of that Act which reads:
10. From the date of the certificate of incorporation, the subscribers to the application
and the other persons that from time to time become members of the society are a corpor-
ation and have all the powers, rights and immunities vested by law in a corporation.
[16] Other statutorily recognized or juridical persons include the Crown (federal and
provincial), as may be represented by the Attorney General, designated Ministers, officials
or other entities depending on legislative provision, as well as foreign sovereigns and states.
[17] Generally speaking, subject to certain statutory exceptions, other entities which
are neither natural nor statutory persons will lack the status to commence an action. Thus,
unincorporated associations and clubs are not legal entities capable of suing or being
sued: see Re Cummings v. Ontario Minor Hockey Association (1979), 26 OR (2d) 7 (CA);
Ladies of the Sacred Heart v. Armstrong’s Point Association (1961), 36 WWR 364 (Man.
CA). Actions involving an unincorporated association must be brought in the name of
the members involved, either personally or in a representative capacity.
[18] Having stated the general rule, the right to sue or be sued may be conferred upon
certain unincorporated associations by statute, either expressly or by legal implication.
For example, in Alberta, a trade union is a legal entity capable of suing or being sued, in
its own name, for limited purposes, by virtue of s. 23(1) of the Labour Relations Code, SA
1988, c. L-1.2 which states:
23(1) For the purposes of this Act, a trade union is capable of

(a) prosecuting and being prosecuted, and
(b) suing and being sued.
[19] Similarly, pursuant to R. 80 of the Alberta Rules of Court, any two or more persons
claiming to be entitled or alleged to be liable as partners in respect of a cause of action
and carrying on business within the jurisdiction may sue or be sued in the name of the
firm of which they were partners at the time when the cause of action accrued. I note,
however, R. 80 does not deprive or release the legal persons behind the firm name from
rights or liabilities which may arise from legal proceedings. The section simply provides
an administratively simple way of collectively naming all individuals behind the partner-
ship. So, while the action is brought in the name of a firm, there is behind that name legal
persons who do have status to sue. It must be realized that what is essential is that some
legal entity exists who is subject to court directions, judgments and costs. With respect
to R. 80, the law relating to partner liability would identify those legal entities responsible,
and on whose behalf suit is really brought.
[20] In this case, the appellant notes there is no statutory exception to the general rule
which would allow an unincorporated resident entity, similar in nature to the respondents,
to sue. This appears to be an accurate assessment of the law in this regard and were the
respondents resident in Alberta, they would lack the status to commence an action. How-
ever, as the respondents are foreign litigants, it is necessary to consider Alberta private
international law rules.
Alberta Law Relating to Foreign Litigants

(i) Foreign Persons
[21] The term person is not defined by the Alberta Rules of Court or the Alberta Busi-
ness Corporations Act. A definition provided by the Interpretation Act, RSA 1980, c. I-7,
s. 25(1)(p), states a person “includes a corporation and the heirs, executors, administrators
or other legal representatives of a person.” Nothing in the legislative enactments of Alberta
or the common law appears to limit the definition of a person to Alberta or even Canadian
residents.
[22] In relation to natural persons, it is trite law to state that a foreign individual has
status to commence an action in Alberta. An alien or foreign person (excluding enemies
of Canada) who voluntarily comes before an Alberta court undoubtedly has the legal
status to sue or be sued; see Porter v. Freudenberg, [1915] 1 KB 857 (CA), at pp. 867-69.
Whether the court has jurisdiction to hear the cause or grant the relief sought is another
issue. As mentioned earlier, that issue is not the subject of this appeal.
(ii) Foreign Corporations

[23] The capacity of a foreign corporation to commence and maintain legal proceed-
ings in Alberta seems to be constrained only by s. 282(1) of the Alberta Business Corpor-
ations Act, which reads:
282(1) An extra-provincial corporation while unregistered is not capable of commencing
or maintaining any action or other proceeding in any court in Alberta in respect of any
IV. Parties 611
contract made in the course of carrying on business in Alberta while it was unregistered.
[Emphasis added.]
Section 282(1) curtails only legal action relating to contracts made in the course of carry-
ing on business in the province. One might infer that unregistered foreign corporations
are competent to commence legal action relating to any other substantive rights other
than those derived from contracts “made in the course of carrying on business in Alberta.”
The prohibition is not to status itself. Rather, only particular causes are prohibited.
[24] This issue was dealt with by the Alberta Court of Queen’s Bench in Williston Basin
State Bank v. Shearer and Wall (1983), 28 Alta. LR (2d) 341. The case involved an Amer-
ican bank which sued on guarantees signed in Alberta by Alberta defendants. The defend-
ants applied to dismiss the action by reason of s. 196(1) of the Companies Act, RSA 1980,
c. C-20, the wording of which was equivalent to s. 282(1) of the Business Corporations
Act. In interpreting the intent of s. 196(1), Decore J stated at p. 344:
The important question though that must be answered concerning s. 196(1) of the Act is the
effect of the words “in respect of ” as contained in the Act. In my opinion, the placement of
those words indicates that a foreign company which is not registered in the province of
Alberta cannot commence action in respect of or concerning a contract which was entered
into in full or in part in the province of Alberta. This does not prevent a foreign company from
commencing and maintaining an action in the province of Alberta concerning a contract which
was not entered into in the province either in whole or in part. [Emphasis added.]
[25] This proposition was also recognized by the Saskatchewan Court of Appeal in
Alexander Hamilton Institutes v. Chambers, [1921] 3 WWR 520. In that case the plaintiffs
had proceeded to carry on business in Saskatchewan without prior registration as required
by a provincial law similar in substance to s. 282(1) of the Alberta Business Corporations
Act. Their action to enforce a contract made in the course of business was dismissed by
the court for their failure to comply with the strict statutory registration requirements.
However, in considering the general status of a foreign corporation to sue in the province,
Turgeon J stated at pp. 521-22:
In the first place, the general rule is that while foreign corporations may sue in the Courts
of this province, they must prove that they are incorporated in the foreign country. (National
Bank of St. Charles v. De Bernales, 1 Car. & P 569, 1 R & M 193.)
[26] This general rule was relied upon by the same court in the later case of Bondhold-
ers Security Corporation v. Manville, [1933] 4 DLR 699 (Sask. CA). The foreign corporate
plaintiff in that action sought relief against persons domiciled in the province upon
contracts made in another country. The court found that proof of the plaintiff ’s incorpora-
tion under the law of the country in which it alleged to be incorporated was sufficient to
allow it to sue in the province notwithstanding it was neither licensed nor registered in
the province. This principle has also long been recognized by the English courts: see
Henriques v. Dutch West India Co. (1728), 2 Ld. Raym 1532 at 1534-35 (HL); Lazard
Brothers & Co. v. Midland Bank Ltd., [1933] AC 289 (HL), at p. 297.
[27] Statutory and common law suggest therefore, as a general rule, that a foreign
corporation, duly incorporated under the laws of a recognized foreign state and given
power to sue, may sue in a common law province in its corporate name.
[28] Questions concerning the status of a foreign corporation within its home juris-
diction fall to be determined, on the analogy of natural persons, by the law of the place
of formation of the corporation: see Skyline Associates v. Small (1975), 50 DLR (3d) 217
(BC SC); Von Hellfeld v. Rechnitzer, [1914] 1 Ch. 748 (CA); J.G. Castel, Canadian Conflict
of Laws: 3d ed. (Toronto: Butterworths, 1993), at 534. For the sake of consistency, I will
refer to the place of formation, place of incorporation, or domicile of the corporation as
the “home jurisdiction.” This status must be specifically pleaded by the party relying on
it and proven as a matter of fact. Expert testimony is often used to meet this burden.
[29] The status to sue afforded foreign corporations is possibly founded upon general
principles relating to the comity of nations. These principles, as they relate to the recogni-
tion of foreign corporations, were considered by the Supreme Court of Canada in Can-
adian Pacific Railway v. Ottawa Fire Insurance Co. (1907), 39 SCR 405. Idington J, in
considering the right of an Ontario company to contract abroad, stated at pp. 447-49:
What happens, once the corporation is thus created, is that other provinces and foreign states,
either by the comity of nations or, perchance, in case of treaty, by force thereof, recognize
the existence of such a corporate body as a legal entity, doing the like kind of business for
the carrying on of which it was created.
Its contracts are thus recognized, when made beyond, or in relation to property beyond,
the bounds of its parent province.
It may plead and be impleaded beyond such bounds, as effectually as in its home. It may,
however, by the laws of the foreign province, or state, where it attempts to carry on business,
be prohibited in whole, or in part, or conditionally.
Once incorporation, for some specific purpose, within the field or sphere of subjects
assigned to the exclusive jurisdiction of a province, has been effected, the comity of nations
may and generally does all that is required, beyond the province.
This doctrine of the comity of nations, carrying with it, subject to those limitations I have
mentioned, this recognition of a foreign corporation, is as firmly embedded in, and an ever
growing part of, international law as anything can well be.
Short of treaties, securing a more definite basis, these legal entities, of the greatest nation,
and the humblest province, stand on the same level, and receive but the same sort of recogni-
tion from a foreign state.
This comity is but an extension of the earlier recognition of the individual foreigner.
The corporation is but a combination of individuals.
The recognition abroad of either the individual or the corporation, is begotten of the
needs of civilized men. The alien individual or corporation formerly had no rights abroad.
(iii) Unincorporated Foreign Entities

• • •
[31] In Skyline Associates v. Small, supra, a decision of the British Columbia Supreme
Court, a BC defendant attempted to strike the action brought by a Washington plaintiff
on the basis the plaintiff had no status to sue in BC under its own name. The plaintiff was
a partnership which did not carry on business in the province. The court seems to accept,
as a general proposition, that a foreign legal entity, separate and distinct from its constitu-
ent members, is in the same position as a foreign corporation and may sue in British
IV. Parties 613
Columbia in its own name. Aikins J, whose decision was affirmed by the Court of Appeal,
56 DLR (3d) 471 (BC CA), stated at p. 219:
The position then is that in the present matter there is only one issue before the Court. It is
this: is Skyline Associates, by the law of the State of Washington, a juridical person, separate
and distinct from its members? If it is, then Skyline Associates may sue in its firm name.
Mr. Justice Aikins ultimately determined, following consideration of Washington law,

that the plaintiff was not recognized by the laws of its home jurisdiction as a juridical
person, separate and distinct from its members, and thus it could not be accorded status
to sue in British Columbia.
[32] The general principles in Skyline Associates relating to recognition of foreign
juridical persons were applied by the same court in United Services Funds v. Richardson
Greenshields of Canada Ltd. (1987), 16 BCLR (2d) 187 (SC). In issue was the capacity of
a Massachusetts business trust to sue in its own name in British Columbia. Gibbs J, as he
then was, stated at p. 189:
There is no provision in the statutes of this jurisdiction or the rules of this court under which
the plaintiff trust can sue in the name which it has adopted for business purposes. However,
if it has standing or capacity to sue in the trust name in its “home” jurisdiction, it may com-
mence and conduct an action in that name here. That is the gravamen of the decision of
Aikins J (as he then was) in Skyline Associates.
This reasoning seems to allow status to sue in a name, even if the entity is not an entity
separate and distinct from its members.
[33] Reasoning similar to that found in the above quoted BC cases also appears to
have been the basis of the decision in the earlier Quebec case of Society Brand Clothes
Ltd. v. Amalgamated Clothing Workers of America, [1931] SCR 321. However, it must be
noted that the reasoning in this case was dependent on art. 79 of the Code of Civil Pro-
cedure which reads as follows:
All foreign corporations or persons, duly authorized under any foreign law to appear in
judicial proceedings, may do so before any court in the province.
The Court held that the foreign labour union was not a suable entity in Quebec as it was
not a juridical person under the laws of its home jurisdiction.
[34] A general statement of the law in Canada relating to the status of foreign corpor-
ations to sue in Canada is offered by J.G. McLeod in The Conflict of Laws (Calgary:
Carswell, 1983) at p. 455:
The willingness of the local courts to recognize the status of the foreign corporation as
defined by the domicile (or place of formation) may be pointed up in connection with the
recognition of legal personality. In certain systems of law an association of persons may be
endowed with the attribute of a legal personality without express legal incorporation or
formal recognition. In a number of continental countries partnerships and other unincor-
porated associations are regarded as persons or separate legal entities distinct from the
members of the association in law. In dealing with such associations, the status granted to
the association by the law of the country where the association was formed (the domicile)
will be recognized by the local courts.
Mr. McLeod relies on the Skyline Associates case and two early English cases, Wenlock v.
River Dee Co. (1883), 36 Ch. D. 674, affirmed (1885), 354 (HL) and Von Hellfeld v. Rech-
nitzer, [1914] 1 Ch. 748 (CA), in support of this position.
[35] The status of a foreign entity to sue in another jurisdiction was also addressed by
the House of Lords in Arab Monetary Fund v. Hashim, [1991] 2 AC 114. The issue before
the court was whether an organization created by agreement between certain Arab states
and Palestine should be afforded status to sue in the English courts. A decree of the foreign
states had conferred legal personality on the organization and created a corporate body.
The court held that by the comity of nations, the courts of the United Kingdom could and
should recognize the organization as being entitled to sue in the United Kingdom. Lord
Templeton appears to cite, with approval, at pp. 161-62, the following proposition drawn
from Australian case law:
In Chaff & Hay Acquisition Committee v. J.A. Hemphili and Sons Pty. Ltd. (1947) 74 CLR 375,
a committee of four persons created under a statute of South Australia to acquire property
in its collective name and to sue and be sued in its collective name was held by the High
Court of Australia not to be a corporation but though unincorporated it was a legal entity
in South Australia and as such was entitled to recognition outside the state in accordance
with the principle of the comity of nations. McTiernan J said succinctly at p. 390: “The courts
of one country give recognition, by a comity of nations, to a legal personality created by the
law of another country.” The courts of the United Kingdom can therefore recognise the
[organization] as a legal personality created by the law of the [foreign states].
[36] It is important to note that the foreign entity in Arab Monetary Fund, supra, was
incorporated in the foreign states. The strict precedential value of the case is therefore
limited to the proposition that a foreign entity incorporated by a foreign state will be
recognized by the courts of the United Kingdom. However, the proposition of law drawn
from the case of Chaff & Hay Acquisition Committee, supra, appears to be persuasive
dictum in support of courts extending recognition to all foreign entities which have legal
status to sue under the law of their domicile. The fact the foreign entity in Chaff & Hay
Acquisition Committee was not incorporated, but was nonetheless a legal entity by the
laws of its home jurisdiction, is particularly relevant in this regard.
Conclusion
[37] Overall, the law tends to support a granting of status in cases where the entity in
question is recognized as a legal or juridical person by the laws of its home jurisdiction,
in the sense of having status to sue. The principle of comity of nations appears to further
strengthen that position.
[38] The appellant suggests such broad recognition of foreign entities by Alberta
courts could result in preferable rules for foreign litigants over Alberta litigants. A foreign
unincorporated entity could be extended a status denied a comparable domestic entity.
Superficially, this may appear to be the case. However, the appellant overlooks what is, in
my view, the main concern. The entity before the court must be capable of assuming fully
the rights and liabilities of a legal person. Someone must be answerable for judgments,
court directions, costs, etc. The court can satisfy itself this concern will be met if the
foreign litigant is proven to be a legal person, separate and apart from its members, under
IV. Parties 615
the law of the foreign jurisdiction. If the foreign jurisdiction recognizes an entity, such as
a partnership, as a legal entity with status to sue, even if it is not for all purposes an entity
separate and apart from its members, the above concern can still be satisfied if the law of
the foreign jurisdiction is such that the actual legal persons who are responsible and
subject to the court’s directions and judgments are readily identifiable. For example, if
the entity were a foreign partnership, able to sue in the partnership name under foreign
law and the foreign law provides that the partners are liable for the actions of the partners,
the concern may be satisfied. This court is entitled to know that its directions and judg-
ments are enforceable against identifiable legal persons. If satisfied of that, by proof of the
foreign law, I am of the view the foreign entity with status to sue in its home jurisdiction
should be allowed to sue in Alberta. If a foreign litigant is incapable of proving it has status
to sue in the foreign jurisdiction, or that there are identifiable legal persons who are
answerable for court directions and orders against the foreign litigant, then the court
should require that proper parties be named.
[39] Moreover, the practice rules in Alberta are broad enough to address concerns
which the appellant raises relating to an award of costs against unsuccessful litigants. The
Alberta Rules of Court provide for security for costs from foreign litigants.
[40] In conclusion, the status of IASTD and ISMM to sue in Alberta is, at the very
least, a triable issue of law, subject to proof.
NOTES
1. The wide scope of comity. In Bumper Development Corp Ltd v Commissioner of Police of the
Metropolis, [1991] 4 All ER 638, the English Court of Appeal gave legal standing to a Hindu
temple because it was a legal person under the law of Tamil Nadu, the Indian state where it
was situated. The court reasoned that comity (except as limited by forum public policy) com-
pels that parties that have legal standing under foreign law be given standing in the forum
to enforce their rights. To hold otherwise, the court added, would be to permit a “fetter of an
artificial procedural nature” to deny such parties rights and, ultimately, to frustrate justice.
2. Necessity for proof of foreign status. In Re Indian Residential Schools, 2001 ABCA 216, 96
Alta LR (3d) 16, the plaintiffs, in a suit against the Roman Catholic Church, relied on Hamza,
above, for the proposition that the Church, alleged to be a foreign entity recognized as a
juridical person, could be sued in Alberta. The Court of Appeal distinguished Hamza on the
basis that the parties had not actually asserted or advanced evidence on the Church’s juridical
status under any foreign law. Additionally, the court noted that the preponderance of Can-
adian case law established that the Roman Catholic Church as such was not a legal entity.
3. Enforcement of assigned obligations. Although the cases are sometimes cited inter-
changeably, the question whether a foreign legal entity can sue or be sued in forum proceed-
ings is distinct from the question whether suit must be brought in the name of the assignor
or the assignee in actions to enforce an assigned obligation. In Regas Ltd v Plotkins, [1961] SCR
566, the Supreme Court characterized the latter question as procedural and therefore gov-
erned by the lex fori rather than the law governing the contract of assignment. However, the
lex fori was also the lex causae governing the assigned obligation. Thus, the result is equally
capable of rationalization on a different theory—namely, that the question whether an
assignee must join the assignor in a claim to enforce an assigned obligation is governed by
the law governing the liability of the third-party obligor and not the law governing the
relationship between the parties to the assignment. On this theory, the rules of the lex fori
would not apply if the action to enforce the assigned obligation was governed by a foreign
law rather than the lex fori. This approach would seem to be more consistent with the sub-
stantive concerns that underlie rules requiring action to be brought in the name of the
assignor (to protect the third-party obligor from the burden of multiple claims) than the
concern with simplifying the administration of justice that underlies the procedural charac-
terization.
4. Enforcement of subrogated claims. In the analogous area of subrogation, it seems also
to be accepted that the question whether the subrogatee is entitled to sue the third party
on the subrogated right of action in his or her own name is one of procedure within the
province of forum law: see Brown v Régie de l’assurance automobile du Québec (1990), 107 NBR
(2d) 11, 71 DLR (4th) 457 (CA), and United States v Bulley (1991), 55 BCLR (2d) 212 (CA). However,
the lex fori was also the lex causae in these cases and the results reached are therefore
equally capable of rationalization on a substantive choice of law analysis.
5. Direct actions against liability insurers. Whether a third party has a direct right of action
against the liability insurer of the person responsible has been characterized as a substantive
issue governed by the law applicable to the contract of insurance: see Sabell v Liberty Mutual
Insurance Co, [1973] 5 WWR 248 (BCSC); Thwaites v Aviva Assurances, [2010] Lloyd’s Rep IR 667
(Mayors and City of London Ct). The effect of this is consistent with the alternative reference
rule in Rome II that entitles a tort victim to bring a direct action against the insurer of the
person liable for compensation if permitted by either the law applicable to the insured’s lia-
bility or the law applicable to the contract of insurance: see Rome II, above, art 18; Prüller-Frey
v Brodnig and Axa Versicherung AG, [2015] EUECJ C-240/14.
6. Actions by personal representatives. The legal authority of the personal representative
of a deceased person under the law governing the administration of the deceased’s estate
to bring legal proceedings on behalf of the estate will be recognized in forum proceedings:
see Sanderson v Halstead, [1968] 1 OR 749 (H Ct J). Similarly, a tutor appointed by a Quebec
court to represent infants domiciled in that province was held to be entitled to institute an
action in Ontario against the executors of the will of a deceased Ontario domiciliary to
recover a legacy payable to the infants under the will: see Kelly v O’Brian (1916), 37 OLR 326
(Sup Ct J).
What of the converse fact pattern where the plaintiff relies on the lex fori for the authority
to bring an action governed by a foreign lex causae, under which the right of action is vested
in somebody else? The point arose in Samson v Holden, [1963] SCR 373, aff’g [1961] Que QB 239
(CA). In that case, the widow and sons of the victim of an automobile accident that occurred
in the state of Maine in the United States brought an action in Quebec to recover damages
against the Quebec driver responsible for the accident. Under Quebec law, the plaintiffs were
entitled to sue in their own names and on their own behalf. However, the victim had died
intestate and under the law of Maine, such actions had to be brought by the administrator.
One of the sons had been appointed administrator, but he took action with the other plain-
tiffs in his own right and not as administrator. In upholding the right of the plaintiffs to pro-
ceed, a majority in the Supreme Court of Canada, relying in part on the expert evidence of the
plaintiffs as to the characterization of the administrator requirement under Maine law, con-
cluded that it was procedural in nature and therefore inapplicable in Quebec proceedings.
7. Joint or joint and several liability. Whether a co-obligor is liable jointly or jointly and
severally touches on liability and the scope of liability and, as such, has been characterized
V. Evidence 617
as a question of substance governed by the law that governs the obligation on which liabil-
ity is founded: see Scandinavian American National Bank v Kneeland (1914), 24 Man R 168 (CA),
rev’d on other grounds (1914), 8 WWR 61 (SCC).
V. EVIDENCE
A. Procedure or Substance?
Prior to the adoption of the 1994 Civil Code, CQLR c C-1991, the Quebec jurisprudence was
divided on the appropriate characterization of evidentiary rules. The 1994 Code settled the
controversy in favour of a qualified substantive characterization:
3130. Evidence is governed by the law applicable to the merits of the dispute, subject to any
rules of the court seized of the matter which are more favourable to establishing it.
A substantive characterization was considered more consistent with the general civilian
approach and with the character of the Quebec rules on evidence in Book Seven, Evidence,
of the Code. In preserving the application of any forum rules that “are more favourable to”
the establishment of evidence, art 3130 also seeks to promote the forum policy favouring the
admissibility of evidence: see Ministère de la Justice, Commentaires du ministre de la Justice—
Le Code civil du Québec, t 2 (Québec: Les Publications du Québec, 1993).
In approaching the characterization exercise, the common law cases have tended to draw
a distinction between issues relating to the mode of proving a relevant fact including the
admissibility of evidence (procedural) and the question of what facts must be proved and
their effect once proved (substantive). A classic illustration is seen in In re Cohn, [1945] Ch 5.
A mother and daughter, German nationals and domiciliaries, were killed in an air raid in
London as a result of the same explosion, circumstances that made it impossible to factually
establish who died first. In the subsequent proceedings to determine succession to the
mother’s movable property, it was necessary to decide whether the property was to be
administered on the footing that the daughter survived the mother or vice versa. English law,
the lex fori, presumed the younger to have survived the older. German law, the substantive
law governing the succession, presumed them to have died simultaneously. Uthwatt J
applied German law to the survivorship issue, reasoning that the English presumption was
substantive and therefore inapplicable, and, conversely, that the German presumption was
substantive, and therefore applicable as part of the lex causae (at 7-8):
The mode of proving any fact bearing on survivorship is determined by the lex fori. The effect of
any fact so proved is for the purpose in hand determined by the law of the domicile [as the law
governing succession to movables under English choice of law rules]. The fact proved in this case
is that it is impossible to say whether or not [the daughter] survived [the mother]. Proof stops
there. Section 184 of the [English] Law of Property Act, 1925 [the source of the English survivor-
ship rule] does not come into the picture at all. It is not part of the law of the evidence of the lex
fori, for the section is not directed to helping in the ascertainment of any fact but contains a rule
of substantive law directing a certain presumption to be made in all cases affecting title to
property. As a rule of substantive law the section is relevant where title is governed by the law
of England. It has no application where title is determined by the law of any other country.
I turn now to consider the law of Germany in relation to the facts proved, unhampered by
s. 184 of the Law of Property Act, 1925. In my view, the provision contained in the article of July 4,
1939, is part of the general substantive law of Germany and not part of its law of evidence. Its
terms and the place in which the repealed article dealing with the same general subject-matter
was to be found make that clear. That rule of law has to be applied, inter alia, as part of the Law
of Inheritances, contained in the German Civil Code.
Similar reasoning is reflected in Henry v Henry Estate, 2014 MBCA 84. The plaintiff had filed
a statement of claim alleging that she was the lawful child and sole heir to the estate of her
putative father, who was a citizen and resident of the United Kingdom at the time of his
death. Although it was agreed by the parties that the substantive laws of the United King-
dom applied to her right of succession, a preliminary issue arose as to whether certain provi-
sions of the Manitoba Family Maintenance Act, CCSM c F20 should be characterized as
procedural and therefore applicable to bar her from establishing that the deceased was her
father. The relevant provisions stipulated that when the alleged father was deceased, a
paternity order could be issued only if one of the limited factual conditions giving rise to a
rebuttable presumption of paternity under the statute was satisfied. The executors of the
estate argued that the provisions were procedural in character as they related to the mode
of establishing the fact of parentage. In concluding that the provisions should be character-
ized as substantive, the motions judge focused on their underlying policy as intended to
limit the circumstances in which a claim for support or inheritance could be brought where
an alleged father was deceased and could not defend the proceeding and to provide some
level of protection to estate administrators. Since the application of the provisions would be
determinative of the plaintiff’s right, she concluded that they should be characterized as
substantive and therefore inapplicable. In upholding her ruling, the Court of Appeal
observed that to be procedural, “rebuttable presumptions must be primarily ‘a means to
assist the court in the fact-finding process’ and not be intended ‘to determine the findings
the court will make’ ” (at para 38, citing Janet Walker, Castel & Walker: Canadian Conflict of
Laws, 6th ed (Markham, Ont: LexisNexis Butterworths, 2005) (loose-leaf) at para 6.3(c)).
Issues of legal professional privilege have traditionally been treated as relating to the
admissibility of evidence and accordingly characterized as procedural. This characterization
is open to challenge in light of the Supreme Court of Canada’s assertions, albeit not in the
conflict of laws context, favouring a substantive characterization: see e.g. Canada (Privacy
Commissioner) v Blood Tribe Department of Health, 2008 SCC 44 at para 10, [2008] 2 SCR 574:
“While the solicitor – client privilege may have started life as a rule of evidence, it is now
unquestionably a rule of substance.” Although recognizing that in some circumstances
forum privilege law should be modified to take account of foreign rules, commentators cau-
tion against the adoption of a general substance-based characterization rule in the conflict
of laws context, not on the basis that the privilege is part of forum procedural law but
because it is fundamental to the administration of forum justice and reflects strong forum
public policy: see generally Kain; Garnett at 242.
Evidence is excluded from the scope of the choice of law rules in the Rome Regulations,
leaving the characterization issue to forum law. However, an exception is made for rules that
raise presumptions of law or determine the burden of proof. Both are explicitly governed by
the substantive law rendered applicable by the choice of law rules of the regulations: see
Rome I, above, arts 1(3), 18; Rome II, above, arts 1(3), 22.
The meaning of the evidence exclusion in the Rome Regulations was considered in Wall
v Mutuelle De Poitiers Assurances, [2014] EWCA Civ 138. In a personal injury action governed
by French law, a dispute arose between the parties as to whether expert evidence should be
V. Evidence 619
adduced according to English or French law. The English Court of Appeal concluded that
English law applied. In his concurring opinion, Lord Justice Jackson reasoned as follows (at
paras 39-46):
The relevant provision. Article 1.3 of Rome II provides:
This Regulation shall not apply to evidence and procedure, without prejudice to Articles
21 and 22.
The parties disagree about what “evidence and procedure” means in this context.
The rival contentions. The rival contentions are as follows:
i) The claimant contends that the phrase “evidence and procedure” in article 1(3) of Rome II
should be given its normal meaning. Accordingly the court in the present case should
follow normal English procedure in determining the extent of the claimant’s injuries and
the amount of his financial losses (in so far as those categories of loss are recoverable under
French law). This will entail receiving expert evidence from numerous different disciplines.
ii) The defendant contends that the phrase “evidence and procedure” in article 1(3) of Rome II
should be construed narrowly. Accordingly the court in the present case should not fol-
low normal English procedure in determining the extent of the claimant’s injuries and the
amount of his financial losses (in so far as those categories of loss are recoverable under
French law). Instead the court should only receive limited expert evidence. The principal
expert evidence should be a French style medico-legal opinion.
My view. In my view the claimant’s contention is correct. I reach this conclusion for two
reasons.
First, the claimant’s interpretation accords with the natural meaning of article 1(3). The
defendant’s interpretation involves imposing a strained and artificial construction on the pro-
vision. The policy argument for doing so, namely that this will achieve an outcome as near
identical as possible to the decision of a French court, is unconvincing.
Secondly, it is unrealistic and inefficient to expect courts to adopt the evidential practices of
a different jurisdiction when determining questions of fact. The courts of each European juris-
diction have developed evidential practices with which both their judges and practitioners are
comfortable. Germany, for example, has developed the “Relationsmethode,” in which the judge
exercises a high degree of control over the evidence to be received as the case develops. The
Netherlands have a different procedure, although there too the judge takes a dominant role in
the questioning of any oral witnesses. France has the procedures described by the experts in
this case. If an Englishman is injured in one of those jurisdictions and sues there, it is inconceiv-
able that the local courts will meekly adopt English evidential practices. There is no way that
those courts would countenance several days of oral evidence and extensive cross-examination
of experts in order to assess quantum of damages. The judges and practitioners do not have the
requisite experience to adopt our evidential practices. We do not have the requisite experience
to adopt theirs.
The costs rules of each jurisdiction are linked to the evidential practices. Germany, for
example, has a scheme of fixed costs for all categories of litigation. This is set out in (a) the Court
Fees Act (Gerichtkostengesetz vom 5 Mai 2004, zuletzt geändert am 10 Oktober 2013) and (b) the
Lawyers’ Fees Act (Gesetz über die Vergütung der Rechtsanwältinnen und Rechtsanwälte vom 5 Mai
2004, zuletzt geändert am 10 Oktober 2013). A scale of fees is prescribed according to the type
of case, the sum in issue and the stage at which it is resolved. For example, in a commercial claim
for €30 million, the costs payable by the losing party at trial are €558,510.50. This statutory costs
regime would become unworkable if the German courts were suddenly required to adopt
English evidential practices.
Conclusion. In the present case the court should follow English evidential practices. Accord-
ingly the court should follow its usual practice in relation to receiving expert evidence concern-
ing the extent of the claimant’s injuries, the amount of the claimant’s financial losses (in so far
as such losses are recoverable under French law) and similar matters.
In the result, therefore, the court will establish the facts using English evidential practices. It
will then assess damages in accordance with French law (“law” being broadly construed, as set
out above).
B. Obtaining Evidence Across Borders

1. Requests for Assistance by Canadian Courts to Foreign Authorities
Witnesses who are located outside the forum may be unavailable to attend in person or
available only at excessive cost and inconvenience. Provincial and federal civil procedure
rules vest Canadian courts with the discretion, on application, to issue an order for a com-
mission to obtain their evidence outside the jurisdiction: see e.g. Federal Court Rules,
SOR/98-106, rr 271-73; Ontario Rules of Civil Procedure, RRO 1990, Reg 194, rr 34.07, 36.03;
Quebec Code of Civil Procedure, CQLR c C-25, arts 426-437; Quebec Code of Civil Procedure,
CQLR c C-25.01, arts 499-503. In addition to granting the commission, the court may issue
letters rogatory or a letter of request or similar document asking the court or other authority
having jurisdiction where the person is located to assist in enforcing compliance. The Crim-
inal Code confers a similar authority on Canadian courts in the context of criminal proceed-
ings: see Criminal Code, RSC 1985, c C-46, ss 709(1)(b), 712, 713.1, 714, 714.2, 714.4, 714.5, 714.
2. Requests for Assistance by Foreign Authorities to Canadian Courts

See Freedman & Harney; Pengelley.
The Canada Evidence Act (civil, commercial, and criminal proceedings) and the evidence
acts of the common law jurisdictions (civil and commercial proceedings) vest Canadian
courts with the discretion to render local judicial assistance in response to requests from a
court in a foreign country before which legal proceedings are pending: see e.g. RSC 1985,
c C-5, ss 43-51 and RSO 1990, c E.23, s 60(1). A similar discretion is conferred on Quebec
courts: see the Special Procedure Act, CQLR c P-27, ss 9-27; see also Code of Civil Procedure,
CQLR c C-25.01, arts 504-506.
Local assistance can take the form of an order compelling the attendance of parties or
witnesses in the foreign jurisdiction or an order for examination and the production of docu-
ments locally in relation to the foreign proceedings. However, judicial assistance is discre-
tionary, based on comity rather than obligation, and will be refused or limited to the extent
of any conflict with Canadian policy. The basic framework was articulated by Justice Dickson
on behalf of the Supreme Court of Canada in Zingre v The Queen, [1981] 2 SCR 392 at 401:
It is upon this comity of nations that international legal assistance rests. Thus the courts of one
jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, not as a
matter of obligation, but out of mutual deference and respect. A foreign request is given full
force and effect unless it be contrary to the public policy of the jurisdiction to which the request
is directed (see Gulf Oil Corporation v. Gulf Canada Limited et al [[1980] 2 SCR 39]) or otherwise
prejudicial to the sovereignty or the citizens of the latter jurisdiction.
V. Evidence 621
In France (Republic) v De Havilland Aircraft of Canada Ltd (1991), 3 OR (3d) 705 at para 37
(CA), Justice Doherty observed that “[t]he considerations encompassed by the phrase ‘Can-
adian sovereignty’ … include an assessment of whether the request would give extra-terri-
torial authority to foreign laws which violate relevant Canadian or provincial laws … ;
whether granting the request would infringe on recognized Canadian moral or legal prin-
ciples … ; and whether the request would impose an undue burden on, or do prejudice to,
the individual whose evidence is requested.”
Section 27 of the Crown Liability and Proceedings Act, RSC 1985, c C-50, binds a federal Crown
agency, in a proceeding to which it is not a party, to the rules of practice and procedure of
the court in which proceedings are taken. The Ontario Court of Appeal has held that s 60 of
the Ontario Evidence Act, above, providing for the enforcement of foreign letters of request
for judicial assistance in relation to foreign proceedings, constitutes a rule of practice or pro-
cedure, not a rule of evidence. Accordingly, federal Crown agencies do not enjoy any a priori
immunity: see Lantheus Medical Imaging Inc v Atomic Energy of Canada Ltd, 2013 ONCA 264.
Note also Canada (Procureure générale) c Thouin, 2015 QCCA 2159, concluding that the Quebec
rules of civil procedure on examinations for discovery apply to federal Crown agencies.
3. Conventions
The Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters (18
March 1970) seeks to facilitate the transmission and enforcement of letters rogatory by
competent authorities through the establishment of central authorities in each state party
to the Convention. This Convention has 58 contracting states (as of December 2015) includ-
ing Australia, the United Kingdom, and the United States. Although Canada is not a party to
the Hague Convention, it is a party to a number of bilateral and multilateral conventions that
provide for the reciprocal taking of evidence in civil and commercial matters. These conven-
tions are not exclusive and do not preclude reliance on the procedures available under the
federal and provincial legislation explained above. However, the availability of a convention
is useful in situations where the other country, unlike Canada, does not have a procedure in
place for cooperating with requests for assistance from foreign courts.
4. Cross-Border Legal Assistance Within Canada

Canadian courts have authority to enforce letters of request from sister provinces and terri-
tories under the evidence statutes, discussed above, notwithstanding that the federal stat-
ute and certain of the provincial statutes purport to apply to proceedings in courts “outside
Canada” or “in a foreign country”: see e.g. Re Mulroney and Coates; Re Southam and Mulroney
(1986), 54 OR (2d) 353 (H Ct J); Lafarge Canada Inc v Khan (2008), 89 OR (3d) 619 (Sup Ct J).
The ULC’s Uniform Interprovincial Subpoena Act (1974 Proceedings at 189), subsequently
enacted by all the common law provinces and territories, provides for the enforcement
among reciprocating Canadian jurisdictions of subpoenas and similar documents to compel
non-resident persons to attend as witnesses and to produce documents in proceedings in
the province that issued the subpoena. The legislation has been interpreted by some courts
as not intended to apply to pre-trial discovery proceedings, making the alternative letter of
request procedure useful in that context: see HZ v Unger, 2013 ABQB 639. In Quebec, the new
Code of Civil Procedure provides a procedure for summoning witnesses resident in other
provinces or territories to attend before a Quebec court either in person or through remote
means, but this does not extend to pre-trial examination: see Code of Civil Procedure, CQLR
c C-25.01, arts 497-498.
In the context of regulatory and criminal proceedings initiated under Canadian law, Can-
adian courts have ordered discovery and the production of documents, notwithstanding
that disclosure was contrary to foreign law: see e.g. Caterpillar Tractor Co v Ed Miller Sales &
Rentals Ltd, 1988 ABCA 282, 90 AR 323; Spencer v The Queen, [1985] 2 SCR 278.
Constitutional considerations enter the picture when the same issue arises as between
provinces. The constitutional implications were addressed by the Supreme Court in Hunt
v T&N plc, [1993] 4 SCR 289 (reproduced in Chapter 3) in the context of the extraprovincial
scope of the Quebec Business Concerns Records Act, CQLR c D-12, which (like its Ontario
counterpart) prohibits the removal of business records from that province in response to a
judicial order issued outside the province. At issue was whether the prohibition on disclo-
sure under the Quebec statute (confirmed in the particular case by an order of the Quebec
Provincial Court) provided the Quebec defendants in a civil action in British Columbia with
a “lawful excuse” under the British Columbia rules of civil procedure for not complying with
a demand for discovery of their business records. The lower courts, acting on the assumption
that the Quebec Act was valid, concluded that the demands of interprovincial comity and
federalism required the courts of British Columbia to respect the legislation of a sister prov-
ince and refused to order compliance. The Supreme Court allowed the appeal on the basis
that the Quebec statute was constitutionally inapplicable to judicial proceedings in a sister
province and thus ultra vires in the circumstances of the case. The whole purpose of the
statute was to impede successful litigation in other jurisdictions by refusing recognition and
compliance with orders issued there. As such, it ran afoul of the constitutionally mandated
obligation of each province to give full faith and credit to judgments rendered by a court in
a sister province. In La Forest J’s view, that obligation was not limited to judgments—the end
product of litigation—but applied as well to pre-judgment proceedings in a sister prov-
ince—such as discovery—in the light of their importance to that end product. Given his
conclusion that the Act was ultra vires as violative of full faith and credit in its application to
sister province proceedings, it was unnecessary for La Forest J to decide whether the Act was
wholly unconstitutional because in pith and substance it related to a matter outside the
province so as to render it inoperative even in relation to foreign country proceedings.

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Carruthers, Janeen M. “Substance and Procedure in the Conflict of Laws: A Continuing
Debate in Relation to Damages” (2004) 53 ICLQ 691.
Castel, Jean-Gabriel. “Procedure and the Conflict of Laws” (1970) 16 McGill LJ 603.
Cook, Walter W. “ ‘Substance’ and ‘Procedure’ in the Conflict of Laws” (1933) 42 Yale LJ 333.
Edinger, Elizabeth. “British Columbia v. Imperial Tobacco Canada Ltd.: Extraterritoriality and
Fundamental Principles” (2006) 43 Can Bus LJ 301.
Freedman, Bradley J & Gregory N Harney. “Obtaining Evidence from Canada: The Enforce-
ment of Letters Rogatory by Canadian Courts” (1987) 21 UBC L Rev 351.
Garnett, Richard. Substance and Procedure in Private International Law (Oxford: Oxford Univer-
sity Press, 2012).
Gray, Anthony. “Loss Distribution Issues in Multinational Tort Claims: Giving Substance to the
Substance” (2008) 4 J Priv Intl L 279.
Illmer, Martin. “Neutrality Matters: Some Thoughts About the Rome Regulations and the
So-Called Dichotomy of Substance and Procedure in European Private International Law”
(2009) 28 CJQ 237.
Kain, Brandon. “Solicitor-Client Privilege and the Conflict of Laws” (2012) 90 Can Bar Rev 245.
Keyes, Mary. “Substance and Procedure in Multistate Tort Litigation” (2010) 18 Torts LJ 201.
Malcai, Ofer & Ronit Levine-Schnur. “Which Came First, the Procedure or the Substance?
Justificational Priority and the Substance-Procedure Distinction” (2014) 34 Oxford J Leg
Stud 1.
Manitoba Law Reform Commission. Private International Law Report (Report No 119, 2009).
Mortensen, Reid. “Homing Devices in Choice of Tort Law: Australia, British and Canadian
Approaches” (2006) 55 ICLQ 839.
Ontario Law Reform Commission. Report on Limitation of Actions (Toronto: Department of the
Attorney General, 1969).
Palmer, Dustin K. “Should Prejudgment Interest Be a Matter of Procedural or Substantive Law
in Choice-of-Law Disputes?” (2002) 69 U Chicago L Rev 705.
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(2012) 91 Can Bar Rev 97.
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Alta L Rev 447.
Schoeman, Elsabe. “Harding v. Wealands: Substance v. Procedure in the English Courts”
(2007) 13 NZ Bus LQ 3.
Walker, Janet. “Castillo v. Castillo: Closing the Barn Door” (2006) 43 Can Bus LJ 487.
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House of Lords Makes a Bad Rule Worse” (2007) 42 Tex Intl LJ 311.
PA R T F I V E
Obligations
C H A P T E R T W E LV E
Torts
I. General Choice of Law Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627

A. The Rule in Phillips v Eyre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
B. Trends in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631
C. Developments in the United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643
D. The Current Law in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644
II. Particular Tort Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
A. Products Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
B. Fraudulent or Negligent Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678
C. Economic Torts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
1. Inducing Breach of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
2. Conspiracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
3. Passing Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
D. Torts Involving Interference with Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
E. Nuisance and Environmental Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
F. Defamation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
G. Statutory Tort Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685
III. Particular Issues in Tort Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
A. Tort Claims Connected to Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
B. Contributory Negligence and Multiple Tortfeasors . . . . . . . . . . . . . . . . . . . . . . . . . . 687
C. Interspousal Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
D. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
E. Vicarious Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
F. Subrogated Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
See generally Dolinger; Walker (2000).
I. GENERAL CHOICE OF LAW PRINCIPLES

The choice of law rules in torts cannot be understood without examining the way in which
they evolved in England and Canada. Developments in the United States are also relevant
because they have had an impact on the English and Canadian decisions. Hence, these
materials will include some cases, like Phillips v Eyre, that are clearly no longer law in Canada
but need to be examined because the recent cases are shaped by the reaction to these older
decisions.
627
628 Chapter 12 Torts
A. The Rule in Phillips v Eyre
Phillips v Eyre
(1870), LR 6 QB 1 (Ex Ch) (footnotes omitted)
[In 1865 a rebellion broke out in the British colony of Jamaica. It was suppressed with
severe force by the governor of the island, John Eyre (also famous as an explorer of Aus-
tralia). Eyre’s measures included the proclamation of martial law in some districts of the
island. His handling of the rebels became a political cause célèbre in England. The story
is told in Dutton at 283-84, 324-25, and 387-89; see also Handford. The Jamaica commit-
tee, an anti-Eyre group, arranged for one of the rebels, Phillips, to come to England. He
brought an action against Eyre for false imprisonment and other torts allegedly committed
by Eyre and the Crown’s servants during the restoration of order. In defence, Eyre pleaded
that, because of an act passed after the rebellion by the colonial legislature of Jamaica, he
was not liable. The act provided that any acts done in good faith by the governor and all
officers and other persons in the suppression of the rebellion were “thereby made and
declared lawful, and were confirmed.” Phillips demurred to this plea. The judgment of
the court, given by Willes J, was that Eyre was not liable because the Jamaican statute
removed the liability that would otherwise have existed.]
WILLES J:
The last objection to the plea of the colonial Act was of a more technical character;
that assuming the colonial Act to be valid in Jamaica and a defence there, it could not
have the extra-territorial effect of taking away the right of action in an English court. This
objection is founded upon a misconception of the true character of a civil or legal obli-
gation and the corresponding right of action. The obligation is the principal to which a
right of action in whatever court is only an accessory, and such accessory, according to
the maxim of law, follows the principal, and must stand or fall therewith. “Quæ accesso-
rium locum obtinent extinguuntur cum principales res peremptæ sunt.” A right of action,
whether it arise from contract governed by the law of the place or wrong, is equally the
creature of the law of the place and subordinate thereto. The terms of the contract or the
character of the subject-matter may shew that the parties intended their bargain to be
governed by some other law; but, prima facie, it falls under the law of the place where it
was made. And in like manner the civil liability arising out of a wrong derives its birth
from the law of the place, and its character is determined by that law. Therefore, an act
committed abroad, if valid and unquestionable by the law of the place, cannot, so far as
civil liability is concerned, be drawn in question elsewhere unless by force of some distinct
exceptional legislation, superadding a liability other than and besides that incident to the
act itself. In this respect no sound distinction can be suggested between the civil liability
in respect of a contract governed by the law of the place and a wrong.
Our courts are said to be more open to admit actions founded upon foreign trans-
actions than those of any other European country; but there are restrictions in respect of
locality which exclude some foreign causes of action altogether, namely, those which
would be local if they arose in England, such as trespass to land: Doulson v. Matthews,
and even with respect to those not falling within that description our courts do not
undertake universal jurisdiction. As a general rule, in order to found a suit in England
I. General Choice of Law Principles 629
for a wrong alleged to have been committed abroad, two conditions must be fulfilled.
First, the wrong must be of such a character that it would have been actionable if com-
mitted in England; therefore, in The Halley, the Judicial Committee pronounced against
a suit in the Admiralty founded upon a liability by the law of Belgium for collision caused
by the act of a pilot whom the shipowner was compelled by that law to employ, and for
whom, therefore, as not being his agent, he was not responsible by English law. Secondly,
the act must not have been justifiable by the law of the place where it was done.
• • •
As to foreign laws affecting the liability of parties in respect of bygone transactions,

the law is clear that, if the foreign law touches only the remedy or procedure for enforcing
the obligation, as in the case of an ordinary statute of limitations, such law is no bar to an
action in this country; but if the foreign law extinguishes the right it is a bar in this country
equally as if the extinguishment had been by a release of the party, or an action of our
own legislature.
NOTE
The formula provided by Willes J has two limbs. The first limb, that “the wrong must be of
such a character that it would have been actionable if committed in England,” stems from
The Halley (1868), LR 2 PC 193, decided two years before Phillips v Eyre. In The Halley, English
law was applied to absolve a British ship of liability for a collision in Belgian waters caused by
the negligence of a compulsory pilot. Under Belgian law the ship would have been liable. The
court apparently thought that there could be no liability in an English court for something
that gave no cause of action against the defendant according to English law. As confirmed
by Phillips v Eyre, this became a rule that, in order to sue in tort for acts done outside the
forum country, those acts must constitute a tort according to the lex fori.
The second limb of Willes J’s formula in Phillips v Eyre is that the defendant’s act “must not
have been justifiable by the law of the place where it was done.” This received a curious gloss
in Machado v Fontes, [1897] 2 QB 231 (CA). It was an action brought in England for an alleged
libel contained in a pamphlet in Portuguese that had been published in Brazil. The defendant
pleaded that the action should be dismissed because, by Brazilian law, the publication of the
pamphlet could not be the ground of legal proceedings against the defendant in which dam-
ages could be recovered. The plea was held bad because it did not negative criminal as well as
civil liability. The court thought that when Willes J used the words “not … justifiable” in the
second limb of his test, he was drawing a distinction from “actionable.” On this view, any
breach of any law, criminal or civil, of the place where the act was done means that the defen-
dant’s act was not “justifiable.” So, because of the first limb of the Phillips v Eyre formula, the
defendant’s civil liability can essentially rest on the lex fori alone, provided that the defendant’s
acts constitute some kind of wrong by the lex loci delicti (place of the wrongful act).
McLean v Pettigrew
[1945] SCR 62, [1945] 2 DLR 65
[The plaintiff sued in Quebec Superior Court for damages in respect of injuries she had
suffered as a passenger when the car driven by the defendant went off the road. The parties
were friends who lived in Montreal, Quebec and were taking a trip to Ottawa, Ontario.
The accident occurred in Ontario. The plaintiff ’s case was based on the quasi-delictual
responsibility—that is, liability for negligence—of the defendant according to Quebec
law. At the time, no civil action was possible under Ontario law because the Ontario
Highway Traffic Act barred any action by an injured gratuitous passenger against the
driver. This provision was also the subject of the New York Court of Appeals’ decision in
Babcock v Jackson, reproduced, in part, in Section I.B, “Trends in the United States.”]
TASCHEREAU J (for the majority):

I have no doubt that if the accident for which damages were claimed in the present
case had taken place in the province of Quebec, the appellant would be quasi-delictually
responsible. He can, in fact, be charged with going down a hill in rainy weather at too
great a speed, having regard to the dangerous condition of the road, a condition which
was pointed out by a sign visible to all, and having continued on his way at 30 miles an
hour around a curve at the same time carelessly applying his brakes. He certainly was
negligent and greater prudence no doubt would have prevented this unfortunate accident.
But, the parties are domiciled in Montreal where the action was instituted, and the
accident took place in the province of Ontario. Under these conditions, since contractual
responsibility is eliminated, in order to succeed, the plaintiff must establish in the first
place that the quasi-delict committed in Ontario would have given rise to an action for
damages in Quebec, if it had been committed in this latter province. In the second place,
he must also show that the act with which the driver is charged is, to use the expression
of the authors, “wrongful,” i.e., “nonjustifiable” according to the law of the place where
the quasi-delict was committed.
• • •
If the act with which McLean is charged does not give rise to a civil action in Ontario,
and if it is not “punishable” in the province, even if it is “wrongful” in Quebec, then the
respondent cannot succeed.
I have already said that if the quasi-delict had been committed in the province of
Quebec, the respondent could have claimed by virtue of art. 1053 CC but it is certain that
it has not been shown that civil recourse exists in Ontario against the gratuitous driver
for the benefit of a passenger who suffers bodily injuries as the result of an accident. On
the contrary, the Ontario law denies such action, and there is no ambiguity in the wording
of the Act.
Section 47 of the Highway Traffic Act reads as follows:
47(2) The owner or driver of a motor vehicle, other than a vehicle operated in the busi-
ness of carrying passengers for compensation, shall not be liable for any loss or damage
resulting from bodily injury to, or the death of any person being carried in, or upon, or
entering, or getting on to, or alighting from such motor vehicle.
Hence, no civil recourse exists in Ontario, but is the act “punishable,” and can it be
said that the appellant violated some provision of the Criminal Code or of the Ontario
Highway Traffic Act? The conduct of the appellant certainly cannot be characterized as
criminal, and I am not convinced that his carelessness or his incompetence reveal the
elements necessary to qualify his action as a crime. American Automobile Ins. Co. v.
Dickson, [1943] 2 DLR 15 at p. 21, SCR 143 at p. 150. But, it is otherwise, I believe, in
regard to the charge that he violated a provincial statute, which would make his act
punishable in Ontario, and as a result “not justifiable.” Section 27 of the Highway Traffic
Act [am 1939, c 20, s 6] reads as follows:
Every person who drives a motor vehicle on a highway without due care and attention or
without reasonable consideration for other persons using the highway shall be guilty of an
offence and shall be liable in the case of a first offence to a penalty of not less than $5 and
not exceeding $50, and in the case of a second or subsequent offence, within one year of the
commission of the first offence, to a penalty of not less than $10 and not exceeding $100, or
to imprisonment for a term not exceeding one month.
It is true that the Magistrate at Rockland acquitted the appellant of a charge under this
section, but that decision evidently does not have the authority of res judicata and cannot
bind the civil courts (La Foncière Compagnie d’Ass’ce de France v. Perras, [1943] 2 DLR
129, SCR 165). For my part, I am of the opinion, shared by the trial judge and the Court
of Appeal, that the appellant did not drive his car with the “due care and attention”
required by s. 27. For, it seems certain to me, that if he had shown due care and the neces-
sary attention, this accident would have been avoided.
• • •
It follows that the respondent has established two of the conditions necessary to involve
the responsibility of the appellant. The act with which she charges him is a quasi-delict
for which damages could be obtained in the province of Quebec, if it had been committed
in that province. She has also shown that it is “wrongful” in Ontario because it is a viola-
tion of a provincial statute. The appellant cannot be exonerated and the appeal must be
dismissed with costs.
[Rinfret CJC and Hudson and Estey JJ agreed with Taschereau J. Kellock J delivered a
concurring judgment.]
NOTE
In Canada, the rule in Phillips v Eyre, as construed in McLean v Pettigrew, continued to be

applied, albeit with increasing reluctance, until the late 1980s. The subsequent erosion and
final destruction of the rule are described in La Forest J’s judgment in Tolofson v Jensen,
reproduced in Section I.D, “The Current Law in Canada.”
B. Trends in the United States

American courts, unlike their English counterparts, had never regarded the lex fori as any
part of the choice of law rule in torts. Instead, they had applied the lex loci delicti alone. The rule
to this effect had been enshrined in the Restatement (First) of Conflict of Laws (1934). The
following case marked a decisive break with this rule, and with the whole approach to choice
of law that it represented.
Babcock v Jackson
191 NE (2d) 279 (NY Ct Apps 1963) (footnotes omitted)
FULD J (Desmond CJ and Dye, Burke, and Foster JJ concurring):

On Friday, September 16, 1960, Miss Georgia Babcock and her friends, Mr. and Mrs.
William Jackson, all residents of Rochester, left that city in Mr. Jackson’s automobile, Miss
Babcock as guest, for a weekend trip to Canada. Some hours later, as Mr. Jackson was
driving in the province of Ontario, he apparently lost control of the car; it went off the
highway into an adjacent stone wall, and Miss Babcock was seriously injured. Upon her
return to this state, she brought the present action against William Jackson, alleging
negligence on his part in operating his automobile.
At the time of the accident, there was in force in Ontario a statute providing that “the
owner or driver of a motor vehicle, other than a vehicle operated in the business of carry-
ing passengers for compensation, is not liable for any loss or damage resulting from bodily
injury to, or the death of any person being carried in the motor vehicle” (Highway Traffic
Act of Province of Ontario [Ontario Rev. Stat. (1960), ch. 172], §105, subd.). Even though
no such bar is recognized under this state’s substantive law of torts (see, e.g., Higgins v.
Mason, 255 NY 104, 108, 174 NE 77, 78-9; Nelson v. Nygren, 259 NY 71, 181 NE 52), the
defendant moved to dismiss the complaint on the ground that the law of the place where
the accident occurred governs and that Ontario’s guest statute bars recovery. The court
at Special Term, agreeing with the defendant, granted the motion and the Appellate Div-
ision, over a strong dissent by Justice Halpern affirmed the judgment of dismissal without
opinion.
The question presented is simply drawn. Shall the law of the place of the tort invariably
govern the availability of relief for the tort or shall the applicable choice of law rule also
reflect a consideration of other factors which are relevant to the purposes served by the
enforcement or denial of the remedy?
The traditional choice of law rule, embodied in the original Restatement of Conflict
of Laws (§384), and until recently unquestioningly followed in this court (see, e.g., Poplar
v. Bourjois, Inc., 298 NY 62, 66, 80 NE 2d 334, 335, 336; Kaufman v. American Youth
Hostels, 5 NY 2d 1016, 185 NYS 2d 268, 158 NE 2d 128, modfg. 6 AD 2d 223, 177 NYS
2d 587), has been that the substantive rights and liabilities arising out of a tortious occur-
rence are determinable by the law of the place of the tort. (See Goodrich, Conflict of Laws
[3d ed., 1949], p. 260; Leflar, The Law of Conflict of Laws [1959], p. 207; Stumberg, Prin-
ciples of Conflict of Laws [2d ed (1951)], p. 182.) It had its conceptual foundation in the
vested rights doctrine, namely, that a right to recover for a foreign tort owes its creation
to the law of the jurisdiction where the injury occurred and depends for its existence and
extent solely on such law. (See Hancock, Torts in the Conflict of Laws [1942], pp. 30-36;
Reese, The Ever Changing Rules of Choice of Law, Nederlands Tijdschrift Voor Interna-
tionaal Recht, [1962], 389.) Although espoused by such great figures as Justice Holmes
(see Slater v. Mexican Nat. R Co., 194 US 120, 24 S Ct. 581, 48 L Ed 900) and Professor
Beale (2 Conflict of Laws [1935], pp. 1286-92), the vested rights doctrine has long since
been discredited because it fails to take account of underlying policy considerations in

evaluating the significance to be ascribed to the circumstance that an act had a foreign
situs in determining the rights and liabilities which arise out of that act. “The vice of the
vested rights theory,” it has been aptly stated, “is that it affects to decide concrete cases
upon generalities which do not state the practical considerations involved.” (Yntema, “The
Hornbook Method and the Conflict of Laws,” 37 Yale LJ 468, 482-83.) More particularly,
as applied to torts, the theory ignores the interest which jurisdictions other than that
where the tort occurred may have in the resolution of particular issues. It is for this very
reason that, despite the advantages of certainty, ease of application and predictability
which it affords (see Cheatham and Reese, “Choice of the Applicable Law,” 52 Col. L Rev.
959, 976), there has in recent years been increasing criticism of the traditional rule by
commentators and a judicial trend towards its abandonment or modification.
Significantly, it was dissatisfaction with “the mechanical formulae of the conflicts of
law” (Vanston Bondholders Protective Committee v. Green, 329 US 156, 162, 67 S. Ct. 237,
239, 91 L Ed. 162) which led to judicial departure from similarly inflexible choice of law
rules in the field of contracts, grounded, like the torts rule, on the vested rights doctrine.
According to those traditional rules, matters bearing upon the execution, interpretation
and validity of a contract were determinable by the internal law of the place where the
contract was made, while matters connected with their performance were regulated by
the internal law of the place where the contract was to be performed. (See Swift & Co. v.
Bankers Trust Co., 280 NY 135, 141, 19 NE 2d 992; see, also, Restatement, Conflict of
Laws, §§ 332, 358; Goodrich, Conflict of Laws, [3d ed., 1949], pp. 342-43.)
In Auten v. Auten, 308 NY 155, 124 NE 2d 99, however, this court abandoned such
rules and applied what has been termed the “center of gravity” or “grouping of contacts”
theory of the conflict of laws. “Under this theory,” we declared in the Auten case, “the
courts, instead of regarding as conclusive the parties’ intention or the place of making or
performance, lay emphasis rather upon the law of the place ‘which has the most significant
contacts with the matter in dispute’ ” (308 NY, at p. 160, 124 NE 2d, at pp. 101-2). The
“center of gravity” rule of Auten has not only been applied in other cases in this state, as
well as in other jurisdictions, but has supplanted the prior rigid and set contract rules in
the most current draft of the Restatement of Conflict of Laws. (See Restatement, Second,
Conflict of Laws, §332b [Tentative Draft no. 6, 1960].)
Realization of the unjust and anomalous results which may ensue from application of
the traditional rule in tort cases has also prompted judicial search for a more satisfactory
alternative in that area. In the much discussed case of Kilberg v. Northeast Airlines, Inc.,
9 NY 2d 34, 211 NYS 2d 133, 172 NE 2d 526, this court declined to apply the law of the
place of the tort as respects the issue of the quantum of the recovery in a death action
arising out of an airplane crash where the decedent had been a New York resident and
his relationship with the defendant airline had originated in this state. In his opinion for
the court, Chief Judge Desmond described, with force and logic the shortcomings of the
traditional rule (9 NY 2d, at p. 39, 211 NYS 2d, at p. 135, 172 NE 2d, at p. 527):
Modern conditions make it unjust and anomalous to subject the traveling citizen of this state
to the varying laws of other states through and over which they move. An air traveler from
New York may in a flight of a few hours’ duration pass through commonwealths [limiting
death damage awards]. His plane may meet with disaster in a state he never intended to cross
but into which the plane has flown because of bad weather or other unexpected develop-
ments, or an airplane’s catastrophic descent may begin in one state and end in another. The
place of injury becomes entirely fortuitous. Our courts should if possible provide protection
for our own state’s people against unfair and anachronistic treatment of the lawsuits which
result from these disasters.
The emphasis in Kilberg was plainly that the merely fortuitous circumstance that the
wrong and injury occurred in Massachusetts did not give that state a controlling concern
or interest in the amount of the tort recovery as against the competing interest of New York
in providing its residents or users of transportation facilities there originating with full
compensation for wrongful death. Although the Kilberg case did not expressly adopt the
“center of gravity” theory, its weighing of the contacts or interests of the respective juris-
dictions to determine their bearing on the issue of the extent of the recovery is consistent
with that approach. (See Leflar, “Conflict of Laws,” 1961 Ann. Sur. Amer. Law, 29, 45.)
The same judicial disposition is also reflected in a variety of other decisions, some of
recent date, others of earlier origin, relating to workmen’s compensation, tortious occur-
rences arising out of a contract, issues affecting the survival of a tort right of action and
intrafamilial immunity from tort and situations involving a form of statutory liability.
These numerous cases differ in many ways but they are all similar in two important
respects. First, by one rationale or another, they rejected the inexorable application of the
law of the place of the tort where that place has no reasonable or relevant interest in the
particular issue involved. And second, in each of these cases the courts, after examining
the particular circumstances presented, applied the law of some jurisdiction other than
the place of the tort because it had a more compelling interest in the application of its law
to the legal issue involved.
The “center of gravity” or “grouping of contracts” doctrine adopted by this court in
conflicts cases involving contracts impresses us as likewise affording the appropriate
approach for accommodating the competing interests in tort cases with multi-state
contracts. Justice, fairness and “the best practical result” (Swift & Co. v. Bankers Trust Co.,
280 NY 135, 141, 19 NE 2d 992, 995, supra) may best be achieved by giving controlling
effect to the law of the jurisdiction which, because of its relationship or contact with the
occurrence or the parties, has the greatest concern with the specific issue raised in the
litigation. The merit of such a rule is that “it gives to the place ‘having the most interest
in the problem’ paramount control over the legal issues arising out of a particular factual
context” and thereby allows the forum to apply “the policy of the jurisdiction ‘most
intimately concerned with the outcome of [the] particular litigation.’ ” (Auten v. Auten,
308 NY 155, 161, 124 NE 2d 99, 102, supra.)
Such, indeed, is the approach adopted in the most recent revision of the Conflict of
Laws Restatement in the field of torts. According to the principles there set out, “The local
law of the state which has the most significant relationship with the occurrence and with
the parties determines their rights and liabilities in tort” (Restatement, Second, Conflict
of Laws, §379; also Introductory Note to Topic 1 of chapter 9, p. 3 [Tentative Draft no. 8,
1963]), and the relative importance of the relationships or contacts of the respective
jurisdictions is to be evaluated in the light of “the issues, the character of the tort and the
relevant purposes of the tort rules involved” (§379 [2], [3]).
Comparison of the relative “contacts” and “interests” of New York and Ontario in this
litigation, vis-à-vis the issue here presented, makes it clear that the concern of New York
is unquestionably the greater and more direct and that the interest of Ontario is at best
minimal. The present action involves injuries sustained by a New York guest as the result
of the negligence of a New York host in the operation of an automobile, garaged, licensed
and undoubtedly insured in New York, in the course of a weekend journey which began
and was to end there. In sharp contrast, Ontario’s sole relationship with the occurrence
is the purely adventitious circumstance that the accident occurred there.
New York’s policy of requiring a tort-feasor to compensate his guest for injuries caused
by his negligence cannot be doubted—as attested by the fact that the legislature of this
state has repeatedly refused to enact a statute denying or limiting recovery in such cases
(see, e.g., 1930 Sen. Int. no. 339, Pr. no. 349; 1935 Sen. Int. no. 168, Pr. no. 170; 1960 Sen.
Int. no. 3662, Pr. no. 3967)—and our courts have neither reason nor warrant for departing
from that policy simply because the accident, solely affecting New York residents and
arising out of the operation of a New York based automobile, happened beyond its bor-
ders. Per contra, Ontario has no conceivable interest in denying a remedy to a New York
guest against his New York host for injuries suffered in Ontario by reason of conduct
which was tortious under Ontario law. The object of Ontario’s guest statute, it has been
said, is “to prevent the fraudulent assertion of claims by passengers, in collusion with the
drivers, against insurance companies” (Survey of Canadian Legislation, 1 U Toronto LJ
358, 366) and, quite obviously, the fraudulent claims intended to be prevented by the
statute are those asserted against Ontario defendants and their insurance carriers, not
New York defendants and their insurance carriers. Whether New York defendants are
imposed upon or their insurers defrauded by a New York plaintiff is scarcely a valid legis-
lative concern of Ontario simply because the accident occurred there, any more so than
if the accident had happened in some other jurisdiction.
It is hardly necessary to say that Ontario’s interest is quite different from what it would
have been had the issue related to the manner in which the defendant had been driving
his car at the time of the accident. Where the defendant’s exercise of due care in the
operation of his automobile is in issue, the jurisdiction in which the allegedly wrongful
conduct occurred will usually have a predominant, if not exclusive, concern. In such a
case, it is appropriate to look to the law of the place of the tort so as to give effect to that
jurisdiction’s interest in regulating conduct within its borders, and it would be almost
unthinkable to seek the applicable rule in the law of some other place.
The issue here, however, is not whether the defendant offended against a rule of the
road prescribed by Ontario for motorists generally or whether he violated some standard
of conduct imposed by that jurisdiction, but rather whether the plaintiff, because she was
a guest in the defendant’s automobile, is barred from recovering damages for a wrong
concededly committed. As to that issue, it is New York, the place where the parties resided,
where their guest-host relationship arose and where the trip began and was to end, rather
than Ontario, the place of the fortuitous occurrence of the accident, which has the dom-
inant contacts and the superior claim for application of its law. Although the rightness or
wrongness of defendant’s conduct may depend upon the law of the particular jurisdiction
through which the automobile passes, the rights and liabilities of the parties which stem
from their guest-host relationship should remain constant and not vary and shift as the
automobile proceeds from place to place. Indeed, such a result, we note, accords with “the
interests of the host in procuring liability insurance adequate under the applicable law,
and the interests of his insurer in reasonable calculability of the premium.” (Ehrenzweig,
“Guest Statutes in the Conflict of Laws,” 69 Yale LJ 595, 603.)
Although the traditional rule has in the past been applied by this court in giving
controlling effect to the guest statute of the foreign jurisdiction in which the accident
occurred (see, e.g., Smith v. Clute, 277 NY 407, 14 NE 2d 455; Kerfoot v. Kelley, 294 NY
288, 62 NE 2d 74; Naphtali v. Lafazan, 8 NY 2d 1097, 209 NYS 2d 317, 171 NE 2d 462,
affg. 8 AD 2d 22, 186 NYS 2d 1010), it is not amiss to point out that the question here
posed was neither raised nor considered in those cases and that the question has never
been presented in so stark a manner as in the case before us with a statute so unique as
Ontario’s. Be that as it may, however, reconsideration of the inflexible traditional rule
persuades us, as already indicated, that, in failing to take into account essential policy
considerations and objectives, its application may lead to unjust and anomalous results.
This being so, the rule, formulated as it was by the courts, should be discarded. (Cf. Bing
v. Thunig, 2 NY 2d 656, 667, 163 NYS 2d 3, 11-12, 143 NE 2d 3, 9; Woods v. Lancet, 303
NY 349, 355, 102 NE 2d 691, 694.)
In conclusion, then, there is no reason why all issues arising out of a tort claim must
be resolved by reference to the law of the same jurisdiction. Where the issue involves
standards of conduct, it is more than likely that it is the law of the place of the tort which
will be controlling but the disposition of other issues must turn, as does the issue of the
standard of conduct itself, on the law of the jurisdiction which has the strongest interest
in the resolution of the particular issue presented.
The judgment appealed from should be reversed, with costs, and the motion to dismiss
the complaint denied.
[Van Voorhis J (Scileppi J concurring) dissented on the ground that no good reason had
been shown for abandoning the rule that the lex loci delicti determined liability in tort.
Van Voorhis J said at 286-87:
Attempts to make the law or public policy of New York State prevail over the laws and policies
of other States where citizens of New York are concerned are simply a form of extraterritorial-
ity. … If extraterritoriality is to be the criterion, what would happen, for example, in case of
an automobile accident where some of the passengers came from or were picked up in States
or countries where causes of action against the driver were prohibited, others where gross
negligence needed to be shown, some, perhaps, from States where contributory negligence
and others where comparative negligence prevailed?]
NOTE
In 1971, the American Law Institute’s Restatement (Second) of Conflict of Laws expressed the
general principle for choice of law in torts as follows in §145:
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by
the local law of the state which, with respect to that issue, has the most significant relationship
to the occurrence and the parties under the principles stated in §6.
(2) Contacts to be taken into account in applying the principles of §6 to determine the law
applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the
parties, and
(d) the place where the relationship, if any, between the parties is centered.
particular issue.
The principles in §6, referred to in §145(1), are noted in Chapter 9, Section IV.E. They
include a variety of factors relevant to the choice of law question, including the relevant
policies of the forum and other interested states, the protection of justified expectations, the
basic policies underlying the particular field of law, and predictability of result. So the factual
elements referred to in §145(2) are to be evaluated in terms of their relationship to these
policies and goals.
Is the choice of law approach in §145 of the Restatement (Second) identical with that
taken by Fuld J in Babcock v Jackson or is it different and, if so, in what respects? Can the
approach in Babcock v Jackson or the Restatement (Second) be called governmental interest
analysis, in whole or in part? On governmental interest analysis, see Chapter 9.
The New York case law, which is the focus of this section, is only one strand in a complex
pattern in the United States. Hay, Borchers & Symeonides (at 94) classify the tort choice of
law decisions in 52 American jurisdictions—the states plus the District of Columbia and
Puerto Rico—as follows: 10 jurisdictions follow the lex loci delicti rule of the Restatement
(First); 3 follow a “significant contacts” approach; 24 follow the “most significant relationship”
approach in the Second Restatement (see above), 2 follow a lex fori rule; and 6—including
New York—follow a combination of modern approaches. Another 2 applied interest analysis.
One of these, California, developed a theory of “comparative impairment.” The court should
make its choice of law decision based on “which state’s interest would be more impaired if
its policy were subordinated to the policy of the other state”: see Bernhard v Harrah’s Club,
546 P (2d) 719 at 723 (Cal SC 1976). Courts in the remaining 5 jurisdictions have been attracted
to the five “choice influencing considerations” proposed by Robert A Leflar, “Choice-Influencing
Considerations in Conflicts Law” (1966) 41 NYUL Rev 267, which include, at least as a tie-
breaker, which rule of law the court perceives to be the “better law”: see e.g. Lane v Celadon
Trucking Inc, 543 F (3d) 1005 (8th Cir 2008).
The New York cases, however, offer the most highly developed set of decisions—there
was one series on guest statutes alone. One issue that arose in several of the guest statute
cases was whether it made a difference that a New York resident passenger and a New York
resident driver did not travel together from New York into the guest statute state (as in
Babcock), but formed their relationship in that state. One decision thought that this should
alter the result, and applied the guest statute: see Dym v Gordon, 209 NE (2d) 792 (NY Ct Apps
1965). The Court of Appeals later reversed itself and held that it should not make a difference
because New York’s interest in seeing the plaintiff compensated deserved the same primacy
in either case: see Tooker v Lopez, 249 NE (2d) 394 (NY Ct Apps 1969). The line of guest statute
cases culminated, for the moment, in Neumeier v Kuehner, 286 NE (2d) 454 (NY Ct Apps 1972).
Again a New York resident had driven his car into Ontario, which (in 1969) still had a guest
statute. The difference from Babcock was that the passenger-victim was an Ontario resident
friend of the driver whom the driver had picked up in Ontario. The court concluded that New
York had no compelling interest that would justify disregarding the Ontario rule, which,
contrary to the view taken of it in Babcock, was seen as, perhaps, designed “to protect own-
ers and drivers against ungrateful guests” (at 455). This suggestion originated with Trautman
at 468-69: see Kell v Henderson, 263 NYS (2d) 647 (1965), aff’d mem 270 NYS 2d 552 (3d Dept
1966). The most important feature of the decision was the court’s acceptance at 457-58 of
three principles, originally proposed by Fuld CJ in Tooker v Lopez, above, at 404 for dealing
with guest statute cases:
1. When the guest-passenger and the host-driver are domiciled in the same state, and the
car is there registered, the law of that state should control and determine the standard of
care which the host owes to his guest.
2. When the driver’s conduct occurred in the state of his domicile and that state does not
cast him in liability for that conduct, he should not be held liable by reason of the fact that
liability would be imposed upon him under the tort law of the state of the victim’s domi-
cile. Conversely, when the guest was injured in the state of his own domicile and its law
permits recovery, the driver who has come into that state should not—in the absence of
special circumstances—be permitted to interpose the law of his state as a defense.
3. In other situations, when the passenger and the driver are domiciled in different states,
the rule is necessarily less categorical. Normally, the applicable rule of decision will be that
of the state where the accident occurred but not if it can be shown that displacing that
normally applicable rule will advance the relevant substantive law purposes without
impairing the smooth working of the multi-state system or producing great uncertainty
for litigants.
Two of these three rules were applied in Edwards v Erie Coach Lines Co, 952 NE (2d) 1033
(NY Ct Apps 2011). An Ontario bus collided with a New York tractor-trailer in New York. The bus
passengers sued the bus driver, the bus company that employed him, the New York resident
driver of the truck, and the trucking company. One issue was whether the “cap” on non-
pecuniary damages under Ontario law—the limit set by the Supreme Court of Canada in 1978
at $100,000; now roughly $340,000, inflation-adjusted—applied. The court held that it applied
as between the passengers and the bus driver and the other Ontario defendants because,
since they were all domiciled in Ontario, the first rule applied. It did not apply between the
passengers and the New York defendants because they were domiciled in different states
and so the third rule applied, leading to the law of New York as the place of the accident.
The court in Edwards noted that although in their original form the Neumeier rules
referred only to determining the standard of care that the host owes to a guest, the court
had applied the rules to other tort issues. It referred to Schultz v Boy Scouts of America Inc, 480
NE (2d) 679 (NY Ct Apps 1985), in which the issue was whether a charity was immune from
tort liability for sexual abuse of a teenage boy. The injury was suffered mainly at a Boy Scout
summer camp in New York. One defendant (the Boy Scouts) was a charity based in New
Jersey; the other (the Franciscan Brothers as operators of the victim’s New Jersey school) was
based in Ohio. New Jersey and Ohio law had an immunity rule, but New York law did not. In
the claim against the Boy Scouts the issue was decided by New Jersey law, pursuant to the
first Neumeier rule, because the plaintiff and the defendant charity were both domiciled in
New Jersey. As against the Franciscan Brothers, the third Neumeier rule pointed to the law of
New York as the locus delicti, because plaintiff and defendant were domiciled in different
states, but the court in Schultz held that the Ohio immunity rule should be applied under the
proviso to the third rule because it would “advance the relevant substantive law purposes”
of Ohio law and there was no policy conflict between it and the law of the victim’s domicile.
Note that the choice of law method followed by the New York courts, unlike the conven-
tional Canadian method, does not involve characterizing the rule of law in question as (for
example) substantive or procedural. In Edwards, the Ontario “cap” on damages was applied
(as against the Ontario defendants) although the forum was New York. In Somers v Fournier,
reproduced in part below, the Ontario Court of Appeal characterized the same rule as pro-
cedural, which meant that it had to be applied in an Ontario court. If the New York court had
followed the same approach it would not have applied the rule to any defendant because,
under the traditional method, the forum does not apply any rules of procedure other than
its own.
GlobalNet Financial.com Inc v Frank Crystal & Co Inc

449 F (3d) 377 (2d Cir 2006)
[GlobalNet, a Delaware corporation, was in the business of providing online news and
financial information to private investors in Europe and the United States and to online
trading facilities. Crystal was a commercial insurance broker that was incorporated,
licensed, and headquartered in New York. Among its offices in the United States were two
in Florida. Crystal arranged for directors’ and officers’ (D & O) liability coverage for
GlobalNet for the period from December 30, 1999 to December 30, 2001. The coverage
consisted of a primary policy and two excess liability policies, each with a different insurer.
Crystal also arranged for GlobalNet’s premium payments to be financed by AI Credit
Corp (AICCO). On January 7, 2000, Crystal sent the financing agreement with AICCO
to GlobalNet’s office, which at the time was located in Boca Raton, Florida, for GlobalNet
to sign and return with the $57,231 initial payment. From January 2000 to the summer of
2001, GlobalNet made the monthly premium payments to AICCO in Dallas, Texas. The
September 2001 payment was not made. AICCO sent notice that the payment was due.
When this payment was still not made, AICCO followed up with an intent to cancel notice
and a cancellation notice. As a result, GlobalNet’s coverage was cancelled effective Octo-
ber 21, 2001. The notices sent by AICCO had not reached GlobalNet because it had been
acquired by another company and it moved its offices from Florida to London, England.
GlobalNet had arranged for its mail to be forwarded to London by a related company in
Boca Raton, which received the notices, but for some reason failed to forward them.
GlobalNet sued Crystal, which had received from AICCO copies of the intent to
cancel and cancellation notices, for having failed to advise it of the impending cancellation
and thereby causing the loss of coverage. The action was brought in the United States
District Court for the Southern District of New York under diversity jurisdiction (the
parties being from different jurisdictions). The District Court granted Crystal summary
judgment. It applied the choice of law rules of New York and held that GlobalNet’s contract
and its tort claims against Crystal were both governed by New York law. Under that law,
Crystal could not be liable because an insurance broker’s liability does not extend to cir-
cumstances in which the insured knew or should have known of the cancelled coverage.
The Court of Appeals for the Second Circuit dismissed GlobalNet’s appeal. Miner Cir J
addressed the choice of law issues.]
MINER CIR J:
[14] GlobalNet alleged three causes of action against Crystal: professional negligence,
breach of fiduciary duty, and breach of contract, all arising from Crystal’s alleged failure
to notify GlobalNet of AICCO’s mailing of the Notice of Intent to Cancel and the Cancel-
lation Notice to GlobalNet for nonpayment of premium. GlobalNet posits that Florida
law should apply to its claims. Crystal argues that New York law should apply.
[15] A federal court exercising diversity jurisdiction must apply the choice of law
analysis of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020,
85 L. Ed. 1477 (1941); Gilbert v. Seton Hall Univ., 332 F.3d 105, 109 (2d Cir. 2003). Here,
the forum state is New York, as the action was properly venued in the United States District
Court for the Southern District of New York. Neither party disputes that New York’s
choice-of-law rules apply. The New York Court of Appeals has held that “the first step in
any case presenting a potential choice of law issue is to determine whether there is an actual
conflict between the laws of the jurisdictions involved.” In re Allstate Ins. Co., (Stolarz), 81
N.Y. 2d 219, 223, 597 N.Y.S. 2d 904, 613 N.E. 2d 936 (1993); see also Zurich Ins. v. Shear-
son Lehman Hutton, Inc., 84 N.Y. 2d 309, 618 N.Y.S. 2d 609, 642 N.E. 2d 1065 (1994).
[16] There is an actual conflict between the laws of New York and Florida concerning
these claims. Under Florida law, an insurance broker generally undertakes a fiduciary
relationship with an insured and may be held liable under theories of contract and tort
for violations of this fiduciary duty. See Almerico v. RLI Ins. Co., 716 So. 2d 774, 776 (Fla.
1998) (“As a general principle, an insurance broker is an agent of the insured.”); see also
Nu-Air Mfg. Co. v. Frank B. Hall & Co. of New York, 822 F.2d 987, 997 (11th Cir. 1987)
(“When a broker agrees to obtain insurance for a client, the broker becomes the client’s
agent. As agent, the broker owes his client a duty of care and a duty to exercise the skill
he holds himself out as having. A breach of these duties may subject the broker to liability
in both contract and tort.” (citations omitted)); Moss v. Appel, 718 So. 2d 199, 201 (Fla.
Dist. Ct. App. 1998) (concluding that a broker was in a continuing fiduciary relationship
with the insured). Under New York law, however, a broker is not in a special relationship
with an insured and generally owes the insured no more than the common-law duty to
procure the insurance coverage that the insured requests. Murphy v. Kuhn, 90 N.Y. 2d
266, 269-70, 660 N.Y.S. 2d 371, 682 N.E. 2d 972 (1997).
[17] Under New York law there are two different “choice-of-law analyses, one for
contract claims, another for tort claims.” Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386,
395 (2d Cir. 2001) (applying New York law), on remand to 2002 WL 31082955 (S.D.N.Y.
2002), aff ’d, 69 Fed. Appx 31 (2d Cir. 2003). Accordingly, we review each of GlobalNet’s
claims in turn.
A. Contract Claims
[18] The New York Court of Appeals has held that in contract cases, the “center of
gravity” or “grouping of contacts” analysis is to be applied in determining the choice of
law. Stolarz, 81 N.Y. 2d at 226, 597 N.Y.S. 2d 904, 613 N.E. 2d 936; see also In re Travelers
Indemnity Co. (Levy), 195 A.D. 2d 35, 38-39, 606 N.Y.S. 2d 167 (N.Y. App. Div. 1993). The
“center of gravity” or “grouping of contacts” choice of law theory allows a court to consider
a “spectrum of significant contacts.” Stolarz, 81 N.Y. 2d at 225-26, 597 N.Y.S. 2d 904, 613
N.E. 2d 936. In Stolarz, the New York Court of Appeals listed several factors which should
be considered in a conflict of law analysis in a contract case. These factors include “the
place of contracting, negotiation and performance; the location of the subject matter of
the contract; and the domicile of the contracting parties.” Id. at 227, 597 N.Y.S. 2d 904,
613 N.E. 2d 936 (citing Restatement (Second) of Conflict of Laws, §188(2) (1971)).
[19] The District Court found that this action involved a matter of coverage:
“… GlobalNet’s D & O carrier issued both a reservation of rights letter and a disclaimer
to GlobalNet. Therefore, the scope of the insurance coverage is at issue here … .” The
District Court, relying primarily on Avondale Industries, Inc. v. Travelers Indemnity Co.,
774 F. Supp. 1416, 1423 (S.D.N.Y. 1991), and Olin Corp. v. Ins. Co. of North America, 743
F. Supp. 1044, 1049 (S.D.N.Y. 1990), aff ’d, 966 F.2d 718 (2d Cir. 1992), determined that
New York law applied to the contract claims. The District Court, following Avondale
Industries, reasoned that “[b]ecause the risks covered by Global[N]et’s policy are not
limited to one state, … the law of the state where the policies were executed, issued and
brokered will be applied to the contract claims.”
[20] However, the at-issue contracts in this case are neither the insurance agreements
for D & O coverage between GlobalNet and the insurance carriers nor the premium
Financing Agreement between GlobalNet and AICCO. Here, the at-issue contract for
purposes of a choice-of-law analysis was the brokerage contract between GlobalNet and
Crystal. Under that contract, Crystal, as broker, procured and negotiated for the D & O
insurance policies on behalf of GlobalNet and arranged the premium Financing Agree-
ment for GlobalNet.
[21] Avondale and Olin are not applicable to the case at bar because both of those cases
involved matters of insurance coverage. See Avondale Industries, 774 F. Supp. at 1422-23
(stating that, where the insured’s interests include a “wide geographic[al] range,” New
York courts have applied the law of the state where the policies were executed, issued and
brokered, and where the insured had its principal place of business.); Olin, 743 F. Supp.
at 1049 (stating that, when insurance contracts are specifically at issue, “New York courts
have looked principally to the following factors: the location of the insured risk; the
insured’s principal place of business; where the policy was issued and delivered; the loca-
tion of the broker or agent placing the policy; where the premiums were paid; and the
insurer’s place of business”); Zurich Ins. Co., 84 N.Y. 2d at 317-18, 618 N.Y.S. 2d 609, 642
N.E. 2d 1065 (noting that in cases where insurance contracts are at issue, the applicable
law is the law of the state of the insured risk). Nonetheless, the choice-of-law analysis
remains the “center of gravity” or “grouping of contacts” for claims sounding in breach
of contract between a broker and an insured.
[22] Here, there is an adequate grouping of contacts to apply New York law to the
contractual claims. The policies were brokered in New York by Crystal, which is also a
corporation headquartered and licensed to do business in New York. GlobalNet, in
contrast, was incorporated in Delaware, with its principal place of business having moved
from Florida to London, England. The Financing Agreement between AICCO and
GlobalNet was prepared by Crystal and executed in New York. AICCO is also a New York
corporation. In the performance of its brokerage responsibilities, Crystal procured the
D & O coverage from National Union, whose address on the Schedule of Policies Adden-
dum to the Financing Agreement and on the Notice of Acceptance was listed as a New
York City address. We therefore see no reason to disturb the holding of the District Court
insofar as it held that New York law applies to GlobalNet’s breach of contract claim.
B. Tort Claim
[23] The New York Court of Appeals has held that “the relevant analytical approach
to choice of law in tort actions in New York” is the “[i]nterest analysis.” Schultz v. Boy
Scouts of Am., Inc., 65 N.Y. 2d 189, 197, 491 N.Y.S. 2d 90, 480 N.E. 2d 679 (1985). The
New York Court of Appeals has defined “interest analysis” as requiring that “[t]he law of
the jurisdiction having the greatest interest in the litigation will be applied and … the
[only] facts or contacts which obtain significance in defining State interests are those
which relate to the purpose of the particular law in conflict.” Id. (second and third alter-
ations in Schultz) (quoting Miller v. Miller, 22 N.Y. 2d 12, 15-16, 290 N.Y.S. 2d 734, 237
N.E. 2d 877 (1968)). “Under this formulation, significant contacts are, almost exclusively,
the parties’ domiciles and the locus of the tort. … .” Schultz, 65 N.Y. 2d at 197, 491 N.Y.S.
2d 90, 480 N.E. 2d 679.
[24] Under the interest-analysis test, torts are divided into two types, those involving
“the appropriate standards of conduct, rules of the road, for example” and those that relate
to “allocating losses that result from admittedly tortious conduct … such as those limiting
damages in wrongful death actions, vicarious liability rules, or immunities from suit.”
Mascarella v. Brown, 813 F. Supp. 1015, 1019 (S.D.N.Y. 1993) (quoting Schultz, 65 N.Y. 2d
at 198, 491 N.Y.S. 2d 90, 480 N.E. 2d 679). “If conflicting conduct-regulating laws are at
issue, the law of the jurisdiction where the tort occurred will generally apply because that
jurisdiction has the greatest interest in regulating behavior within its borders.” Cooney v.
Osgood Mach., Inc., 81 N.Y. 2d 66, 72, 595 N.Y.S. 2d 919, 612 N.E. 2d 277 (1993); see
Northwestern Mut. Life Ins. Co. v. Wender, 940 F. Supp. 62, 66 (S.D.N.Y. 1996). If the
conflict involves allocation of losses, the site of the tort is less important, and the parties’
domiciles are more important. Cooney, 81 N.Y. 2d at 72, 595 N.Y.S. 2d 919, 612 N.Y. 2d
277. Here, GlobalNet’s claim of professional negligence goes to Crystal’s failure to notify
it of the Intent to Cancel Notice and the Cancellation Notice.
[25] GlobalNet claims that its tort claims should be analyzed under the substantive
law of Florida because that state has a significant interest in regulating the conduct of
brokers who knowingly deal with a Florida-based insured to provide coverage for a risk
that was primarily located in Florida. GlobalNet asserts that Crystal’s conduct “arose out
of a business relationship with a Florida-based company, had an impact in Florida, and
had absolutely no impact whatsoever in New York.”
[26] The District Court found that “New York has a greater interest than Florida in
this litigation involving a tort that occurred [in New York] and in regulating the conduct
of brokers, insurance agents, premium finance companies and insurers licensed within
the state.” The District Court determined that “Crystal’s failure to act in notifying
Global[N]et” of the impending cancellation involved a tort implicating the regulation of
a broker’s conduct and that the failure to act occurred in New York. Because, for conduct-
regulating torts “the site of the tort is the controlling factor in the choice of law analysis,”
the District Court applied New York law to GlobalNet’s tort claims.
[27] The determination of the District Court was correct. Here, Crystal is licensed in
New York and maintains its principal place of business in New York. Crystal received the
notices at its New York office and received phone calls from AICCO regarding the missed
premium payment at that same office. Thus, Crystal’s failure to notify GlobalNet of the
Notice of Intent to Cancel and the Cancellation Notice was centered in New York. See
Northwestern Mut., 940 F. Supp. at 66 (applying the law of the state where the insurance
company’s refusal to honor a claim took place). Moreover, GlobalNet had already left
Florida for London by the time that Crystal’s alleged tort had occurred. Accordingly, New
York law applies to GlobalNet’s tort claim of professional negligence.
[The court went on to consider the merits of GlobalNet’s claim under New York law and,
like the District Court, concluded that the claim failed because GlobalNet was fully aware
of the payment schedule, its obligation to make the payments, and the consequences of
failure to do so. Moreover, it was not Crystal’s fault that GlobalNet did not receive the
notices.]
C. Developments in the United Kingdom

A reassessment of the rule in Phillips v Eyre (1870), LR 6 QB 1 (Ex Ch), reproduced above, finally
came in Boys v Chaplin, [1971] AC 356 (HL). This was a personal injury action arising out of a
road accident in Malta. Both the plaintiff and the defendant were British servicemen who
had no other connection with each other. The issue was whether the plaintiff was entitled to
damages for pain and suffering and loss of amenities. If the heads of damage were tested by
Maltese law, he was not. The House of Lords applied English law to the issue. The effect of
the decision was to retain the dual rule in Phillips v Eyre, but, according to what is usually
taken to be Boys v Chaplin’s ratio decidendi, strengthened the role of the lex loci delicti by
requiring civil actionability by that law. At the same time, the law lords decided that in a
suitable case, of which this was one, the lex fori could be applied alone if in respect of the
particular issue—here, heads of damage—applying the rule of the lex loci delicti would not
serve (in Lord Wilberforce’s words at 391) “any interest which the rule was devised to meet.”
Subsequently, the Privy Council, in a case from Hong Kong, held that the converse was also
true. In a suitable case the lex loci delicti could be applied to the exclusion of the lex fori: Red
Sea Ins Co Ltd v Bouygues SA, [1995] 1 AC 190.
This basically double-barrelled but sometimes single-barrelled rule was replaced by the
Private International Law (Miscellaneous Provisions) Act 1995 (UK), c 42, s 10 of which replaced
the common law with what was essentially a lex loci delicti rule with a flexible exception not
unlike that applied by the House of Lords in Boys v Chaplin.
This in turn has been superseded by European choice of law legislation. Regulation (EC)
No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable
to non-contractual obligations (Rome II) became binding throughout the member states of
the Union (except Denmark, which did not adopt it) for events occurring after January 11,
2009 (arts 31, 32). It is known as “Rome II” to distinguish it from the regulation dealing with
contractual obligations, known as “Rome I”: see Chapter 13. As the primary choice of law rule,
Rome II employs not a lex loci delicti test but a place of damage test. This is subject to a sec-
ondary rule that if both plaintiff and defendant are from the same jurisdiction, the law of
that jurisdiction will apply. Both these rules are subject to an exception where the case is
manifestly more closely connected with a country other than the one indicated by the rel-
evant rule. Article 4 reads as follows:
1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual
obligation arising out of a tort/delict shall be the law of the country in which the damage occurs
irrespective of the country or countries in which the indirect consequences of that event occur.
2. However, where the person claimed to be liable and the person sustaining damage both
have their habitual residence in the same country at the time when the damage occurs, the law
of that country shall apply.
3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly
more closely connected with a country other than that indicated in paragraphs 1 or 2, the law
of that other country shall apply. A manifestly closer connection with another country might be
based in particular on a pre-existing relationship between the parties, such as a contract, that
is closely connected with the tort/delict in question.
The secondary rule in para 2 is particularly significant, because many of the most trouble-
some cases on tort choice of law have involved plaintiffs and defendants who have a com-
mon home jurisdiction. Leading cases in the United States: Babcock v Jackson (reproduced
above in Section I.B), the United Kingdom: Boys v Chaplin (above), Australia: Neilson v Over-
seas Projects Corp (reproduced in Chapter 9), and Canada: Tolofson v Jensen (reproduced
below in Section I.D) were all of this type. In the first two cases, the courts found that the
choice of law principles were flexible enough to apply the law of the common home juris-
diction. In Neilson the choice of law rule was inflexible but the court was able to apply the
law of the parties’ common residence by using the mechanism of renvoi—that is, taking
account of the fact that a court in the locus delicti would actually have applied not its own
law but the law of the parties’ common domicile. Tolofson was the only case of the four in
which the court did not apply the law of the parties’ common residence because it held that,
at least in interprovincial cases, the lex loci delicti rule admitted of no exception: see further
the note following Somers v Fournier, below in Section I.D.
D. The Current Law in Canada
Tolofson v Jensen; Lucas (Litigation Guardian of) v Gagnon

[1994] 3 SCR 1022
LA FOREST J (Gonthier, Cory, McLachlin, and Iacobucci JJ concurring):

This court has in recent years been called upon to review a number of the structural rules
of conflicts of laws or private international law. In Morguard Investments Ltd. v. De Savoye,
[1990] 3 SCR 1077, and Hunt v. T & N plc, [1993] 4 SCR 289, the court had occasion to
revisit the law governing the jurisdiction of courts to deal with multi-jurisdictional
problems and the recognition to be accorded by the courts of one jurisdiction to a judg-
ment made in another jurisdiction. In Amchem Products Inc. v. British Columbia (Workers’
Compensation Board), [1993] 1 SCR 897, the court also examined the rules governing
when a court may refuse jurisdiction on the basis of forum non conveniens.
In the two appeals before us we are called upon to reconsider the “choice of law rule,”
i.e., which law should govern in cases involving the interests of more than one jurisdiction,
specifically as it concerns automobile accidents involving residents of different provinces.
The precise issue may be distilled from the facts of the two cases under appeal. The
plaintiffs, residents of province A, were passengers in an automobile registered and insured
in that province. The driver of the automobile in which they were travelling was a resident
of province A. The passengers were injured in a collision with another automobile in
province B. The driver of that automobile was a resident of province B, and his automobile
was registered in that province. In one of the cases, liability from the operation of the
automobile was covered by an insurance contract made in province B; in the other, it was
covered under the terms of province B’s “no-fault” insurance scheme. The plaintiffs
instituted an action for the resulting personal injuries in province A against both drivers.
The issue that arises is what law should be applied in determining the liability of the
defendant drivers.
The first of these cases also raises the following subsidiary issue. Assuming the applic-
able substantive law is that of the place where the tort arises, is the limitation period
established under that law inapplicable as being procedural law and so not binding on
the court hearing the case, or is it substantive law? For its part, the second case raises the
issue whether the Quebec no-fault insurance scheme applies to situations where some or
all the parties are non-residents.
Background
Tolofson v. Jensen
Facts
On July 28, 1979, the plaintiff (respondent) Kim Tolofson was a passenger in a car owned
and driven by his father, the defendant (appellant) Roger Tolofson. He was seriously
injured when the car was involved in an accident with a vehicle driven by the other
defendant (appellant) Leroy Jensen. The accident occurred in Saskatchewan. The Tolof-
sons were and remain residents of British Columbia and the car in which they drove was
registered and insured in that province. Jensen was and remains a resident of Saskatch-
ewan, and his car was registered and insured in that province.
The plaintiff Tolofson alleges that he suffered head injuries in the collision which
affected his learning capacity and his physical capabilities. He began an action in British
Columbia against both defendants seeking damages for these injuries on December 17,
1987, more than eight years after the collision occurred. He was only 12 years old at the
time of the accident. The parties both operated on the assumption that the plaintiff ’s
action is barred under Saskatchewan law because it must be brought within 12 months
of the accident. Such a suit is not barred in British Columbia. As well, under Saskatchewan
law a gratuitous passenger cannot recover unless “wilful or wanton misconduct” can be
established against the driver of the car in which he or she was a passenger. This is not
the case in British Columbia. Neither defendant admits liability.
The defendants then brought an application by consent pursuant to Rule 34 of the
Supreme Court Rules of British Columbia before Macdonald J seeking determination of
a point of law, namely, that the court was forum non conveniens or, in the alternative, that
the law of Saskatchewan applied with respect to the limitation period and the standard
of care for gratuitous passengers. That is the proceeding from which the first of these
appeals arises.
Judicial History
British Columbia Supreme Court (1989), 40 BCLR (2d) 90. On October 17, 1989, Mac-
donald J dismissed the application. He concluded that while he was impressed with the logic
of applying the “proper law of the tort,” he was bound by McLean v. Pettigrew, [1945] SCR
62, where this court upheld an action in respect of a single car accident in Ontario which
was successfully brought in Quebec under Quebec law by a passenger, a resident of Quebec,
against the owner and operator of the car, also a resident of Quebec. Having considered
the authorities, he concluded that choice of law was inextricably entwined with issues of
jurisdiction and forum conveniens, and that choice of law followed these determinations.
British Columbia Court of Appeal (1992), 65 BCLR (2d) 114. On the appeal to the
British Columbia Court of Appeal, the defendants no longer contended that the British
Columbia courts are without jurisdiction or should decline jurisdiction as being forum
non conveniens. They argued, however, that Macdonald J had erred in failing to separate
issues of jurisdiction and forum non conveniens from choice of law. In addition, they
submitted that the applicable law was that of Saskatchewan. Cumming JA, who gave
reasons for the Court of Appeal, agreed, at 120, that “even when the court finds jurisdiction
and refuses to stay an action based on forum non conveniens because a juridical advantage
is found in the forum, it is still necessary to examine choice of law independently.”
After an extensive review of the history of choice of law rules and their application in
recent Canadian cases, Cumming JA reviewed the facts of Lucas v. Gagnon (then at the
Ontario (General Division) level). He concluded that it made no difference that in that
case Lucas was a defendant on a cross-claim whereas in the present case Jensen was a
co-defendant. He adopted the reasoning of Hurley J in Gagnon that, not only was he
bound by McLean v. Pettigrew even on the facts of the case at bar, but even if he were not
so bound, he would hold that the law of the forum should apply since it had the most
significant relationship with the parties. In obiter, Cumming JA stated that this decision
was justified in that it met with the reasonable expectations of all the parties in that the
Saskatchewan defendant would have reasonably expected to be subject to a lawsuit
initially, and that both the limitation period and the gratuitous passenger laws of Sas-
katchewan had since been repealed.
Lucas (Litigation Guardian of) v. Gagnon

Facts
The Gagnon case is similar to the Tolofson case, except that in the Gagnon case the appel-
lant does not seek to avoid a limitation period and a higher standard of care in the juris-
diction where the accident occurred; he seeks rather to avoid the limits on liability
provided in the no-fault regime in effect in Quebec where the accident occurred. While
the amount that can be recovered under that regime is greater than can be recovered
under the unsatisfied judgment funds in other provinces, it is much less than can be
recovered in a tort action against the party at fault. I note that Ontario has entered into
an agreement regarding the application of the Quebec no-fault regime to Ontario residents
who have an accident in Quebec which, it was argued, has an impact on the result of this
case. This was not directly discussed in the courts below, and I shall only make reference
to it later.
The essential facts, for present purposes, are these. The plaintiff, Mrs. Gagnon, brought
action on her own behalf and as litigation guardian of two children against her husband,
Mr. Gagnon, for personal injuries suffered in an accident that occurred in the province
of Quebec when there was a collision between an automobile driven by her husband, in
which she was a passenger, and an automobile owned and operated by Mr. Lavoie. The
Gagnons are all residents of Ontario; Mr. Lavoie is a resident of Quebec.
Mrs. Gagnon originally included Mr. Lavoie as a defendant, but after the Ontario Court
of Appeal released its decision in Grimes v. Cloutier (1989), 61 DLR (4th) 505, which
distinguished McLean v. Pettigrew, supra, and held that a Quebec resident’s liability in
circumstances like the present case was governed by Quebec law, Mrs. Gagnon discon-
tinued her action against Mr. Lavoie. However, the defendant, Mr. Gagnon, had cross-
claimed against Mr. Lavoie and that cross-claim was not discontinued.
Mrs. Gagnon obtained 100% of the no-fault benefits (on the Quebec scale) to which
she was entitled under the Quebec scheme from Mr. Gagnon’s Ontario insurer. The
Ontario insurer was reimbursed by the Régie de l’assurance automobile du Québec (“La
Régie”), pursuant to a 1978 agreement between the Régie and Ontario’s Minister of
Consumer and Commercial Relations. Mrs. Gagnon could not bring an action for dam-
ages in Quebec because of the prohibition in s. 4 of the Quebec Automobile Insurance Act,
SQ 1977, c. 68. Her only option in seeking an award of damages was to sue in Ontario.
Mr. and Mrs. Gagnon then brought a motion on an agreed statement of facts for an
order under Rule 22 of the Ontario Rules of Civil Procedure to determine the following
questions: whether the Ontario court had jurisdiction; whether it should accept that
jurisdiction; whether Ontario law applied; and whether Mr. Gagnon was entitled to
maintain his action against Mr. Lavoie. It is from this proceeding that the appeal to this
Court emanates. Mr. Lavoie was not notified of the motion at first instance, did not concur
with the questions stated and did not attend.
Judicial History
Ontario Court, General Division (1991), 3 OR (3d) 38. The motion was heard by Hurley J.
He replied in the affirmative to all the questions set forth in the motion. He began his
analysis with Phillips v. Eyre (1870), LR 6 QB 1 (Ex. Ch.), which is the starting point for
the law in this area. He cited the general rule stated therein to the effect that to found a
suit in England for a wrong committed abroad, two conditions had to be met:
(1) the wrong would have been actionable if committed in England, and
(2) was not justifiable by the law of the place where the act was committed.
That case, he noted, had been followed by this court in McLean v. Pettigrew, supra,
where the second condition was held to be satisfied by the fact that the wrong was subject
to a penal prohibition in the place where the act was committed even though it was not
actionable there. McLean involved an action where the plaintiff and defendants were
residents of the same province and the action was brought there. The situation was similar
here as it related to the Gagnons. Assuming evidence of the second condition in Phillips
v. Eyre was established by evidence at trial, he concluded that an action would lie.
Though he had made reference to Grimes v. Cloutier, supra, and other Ontario juris-
prudence as it affected Quebec residents in relation to accidents that take place in Quebec,
Hurley J still thought the defendant’s claim against Mr. Lavoie could be pursued. In his
view, the fact that the defendant in the cross-claim was originally a defendant in the action
was irrelevant, since he was no longer so. Hurley J stated, at 43:
If I am not bound to apply McLean then, in my opinion, the reasonable expectations of the
plaintiffs and the defendant are that this sort of litigation would take place in Ontario accord-
ing to the law of Ontario, and I conclude that the defendant’s assertion in the action of a
claim over against a Quebec driver/owner does not alter those expectations. Rather, in my
opinion, it would be unfair to allow the addition of that claim over to alter the law applicable
from that of Ontario, which has the most significant relationship with the parties, to that of
Quebec.
Ontario Court of Appeal (1992), 11 OR (3d) 422. Mr. Lavoie and Mr. Gagnon then
appealed to the Ontario Court of Appeal, but only on the questions of whether Ontario
law applied and whether Gagnon was entitled to maintain his cross-claim against Lavoie.
The late Tarnopolsky JA stated the main question as whether Ontario or Quebec law
governed both the main action and the cross-claim. He examined whether the decision
of McLean v. Pettigrew, supra, should be distinguished on the basis that the defendant to
the cross-claim, who was not a party to the main action, was a resident of Quebec and
that the accident occurred in Quebec. He also considered, if McLean v. Pettigrew applied
to the main action, whether the choice of law with respect to the counterclaim was dif-
ferent having regard to the Court of Appeal’s decision in Grimes v. Cloutier, supra.
After reviewing the case law, Tarnopolsky JA emphasized that McLean v. Pettigrew
ought not to be applied rigidly to factual circumstances not closely similar to those in
that case. He held that McLean applied to the main action. As for the cross-claim, he found
the following, at 438:
In my opinion, given the facts of the case at bar it would be unjust if the action against Lavoie
were not bound by Grimes v. Cloutier. After all, Lavoie was a Quebec resident driving his car
in his own province. Therefore, when an Ontario resident is involved in an accident in
Quebec with a Quebec resident, although both the passenger and his or her driver are resi-
dents of Ontario, a claim against the Quebec driver must be barred by the Quebec non-
actionability law.
As a result, Ontario law, including conflict rules developed according to Phillips v. Eyre,
supra, was held to apply in the action of the respondents against the appellant Gagnon.
Since Lavoie was not a resident of Ontario and the accident occurred in Quebec, the facts
and law of Grimes v. Cloutier applied to any claim against him. The action was remitted
for trial on that basis.
Carthy JA agreed with Tarnopolsky JA but arrived at the conclusion that the cross-
claim should not proceed by a different route. He reviewed s. 2 of the Negligence Act, RSO
1990, c. N.1, and concluded, at 440, that, because Lavoie could not, on the authority of
Grimes v. Cloutier, have been sued alone, he was not a person who was or “would if sued
have been liable” in respect of the damage suffered by the respondent.
Blair JA, who found the views of his colleagues complementary rather than inconsis-
tent, agreed with both of them.
Historical Highlights of Choice of Law Rule in Tort

The genesis of the existing Canadian rule for the determination of choice of law for torts
arising outside a court’s territorial jurisdiction is the seminal case of Phillips v. Eyre, supra.
[La Forest J reviewed the facts and the decision in Phillips v Eyre.]
Willes J then went on to say that English courts are said to be more open to admit
actions founded on foreign transactions than those of other European countries, but he
added, at 28, that there are restrictions (e.g., trespass to land) that exclude certain actions
altogether, and “even with respect to those not falling within that description our courts
do not undertake universal jurisdiction” (emphasis added). He then immediately con-
tinued with the following frequently cited passage, at 28-29:
As a general rule, in order to found a suit in England for a wrong alleged to have been com-
mitted abroad, two conditions must be fulfilled. First, the wrong must be of such a character
that it would have been actionable if committed in England. … Secondly, the act must not
have been justifiable by the law of the place where it was done.
In this passage, Willes J appears to commingle the law dealing with what we would
today call jurisdiction and choice of law. The first rule is strictly related to jurisdiction as
is evident from its context, which I have just related. The second rule we would normally
think of as dealing with choice of law, which it is apparent from his earlier remarks was
the place of the wrong, the lex loci delicti. It was not, however, necessary for Willes J to
engage in this type of modern analysis. All he was doing was expressing a rule of double
actionability to permit suit in England; see Chartered Mercantile Bank of India v. Nether-
lands India Steam Navigation Co. (1883), 10 QBD 521 at 536-37.
The law was not to remain in this form. In Machado v. Fontes, [1897] 2 QB 231 (an
interlocutory appeal heard in a summary way by two judges), Willes J’s judgment was
read in a rather wooden manner to mean something quite different from what he, in my
view, had intended.
• • •
For my part, I would have thought the question whether a wrong committed in Brazil
by a Brazilian against another Brazilian gave rise to an action for damages should be
within the purview of Brazil, and that its being made actionable under English law by an
ex post facto decision of an English court would constitute an intrusion in Brazilian affairs
which an English court, under basic principles of comity, should not engage in. I could
understand the approach if the parties were both English nationals or domiciled in
England and there is some support in English cases for that measure of intervention; see
Chaplin v. Boys, [1969] 2 All ER 1085 (HL), per Lord Hodson at 1094, and Lord Wilber-
force at 1104; see also Lord Denning in the same case in the Court of Appeal, [1968] 1
All ER 283 at 289-90. I add parenthetically that it could well be argued (though the facts
were not conducive to that possibility) that, unlike a motor vehicle accident, the tort of
libel should be held to take place where its effects are felt, but the court simply assumed
that the place of the tort was Brazil.
In England, Machado v. Fontes was ultimately overruled by the House of Lords in
Chaplin v. Boys, supra. … While the ratio of the case is difficult to define with precision
(see Red Sea Insurance Co. v. Bouygues SA, [1995] 1 AC 190 (PC)), the summary of the
result set forth in the well known text of Dicey and Morris, Dicey and Morris on the
Conflict of Laws (11th ed. 1987), at 1365-66, has been generally accepted:
Rule 205(1) As a general rule, an act done in a foreign country is a tort and actionable
as such in England only if it is both
(a) actionable as a tort according to English law, or in other words is an act which, if
done in England, would be a tort; and
(b) actionable according to the law of the foreign country where it was done.
(2) But a particular issue between the parties may be governed by the law of the country
which, with respect to that issue, has the most significant relationship with the occurrence
and the parties.
None the less it was on the insecure foundation of Phillips v. Eyre as interpreted in
Machado v. Fontes that the existing Canadian law was erected by this court’s 1945 decision
in McLean v. Pettigrew. There, it will be remembered, a driver and his gratuitous passenger,
both domiciled in Quebec, had a car accident in Ontario, and the passenger sued the
driver in Quebec. Under Ontario law, the claim would not have been actionable. It would,
however, have been actionable in Quebec had it occurred there. Applying the prevalent
English law, the court found that since the tort was actionable in Quebec, and the driver’s
conduct, though not actionable in Ontario, was prohibited under the Highway Traffic Act
of that province, it was not “justifiable” in Ontario. It, therefore, upheld the plaintiff ’s
action under Quebec law.
The law as enunciated in McLean v. Pettigrew has remained the basic rule in Canada
ever since. However, its fundamental weaknesses began to be revealed in a series of
Ontario cases beginning in the 1980s. The first requiring discussion is Going v. Reid
Brothers Motor Sales Ltd. (1982), 35 OR (2d) 201 (HC). There the plaintiffs were seriously
injured in a collision with the defendant’s vehicle in Quebec owing to the negligence of
the defendant. All the parties resided in Ontario. In an action in Ontario, Henry J held
that the plaintiffs were entitled to recover damages in accordance with Ontario law despite
the fact that the no-fault scheme in Quebec, where the accident took place, extinguished
any action in respect of bodily injuries arising out of the accident. Had there been no
breach of Quebec law of any kind the action would not have been maintainable in Ontario;
see Walpole v. Canadian Northern Ry. Co., [1923] AC 113 (PC). However, in Going, the
defendant had been in breach of the Quebec Highway Traffic Code. Thus the action was
not “justifiable” in Quebec so, following the rule in McLean v. Pettigrew, the plaintiffs
could recover under Ontario law. Henry J noted that the effect was that the defendants,
who had no relationship with the plaintiffs apart from the accident, were deprived of the
protection of the law accorded them in Quebec where the action occurred; moreover, he
added, the rule encouraged forum shopping. Had either the British rule in Chaplin v.
Boys, supra, or the American rule (which applied the proper law of the tort), been in effect,
that would not have been the case. I note in passing that in this and the cases that followed,
reference is made to rules in other countries, but in none of these cases was the rule
approached on the basis of Canadian constitutional imperatives.
Ang v. Trach (1986), 57 OR (2d) 300 (HC), even more strongly underlines the deficien-
cies of the rule in McLean v. Pettigrew. There Ontario residents who were involved in a
motor vehicle accident in Quebec with a Quebec resident were held entitled to sue the
latter despite the fact that a Quebec resident must surely expect to be governed by Quebec
law in such circumstances. As Henry J observed, the rule, by applying the law of the forum
as to liability and assessment, in essence constitutes an extraterritorial extension of the
law of the forum. The situation in Going was at least supportable since the parties were
all Ontario residents. In Henry J’s view, the law of the place of the tort, or the proper law
(i.e., the place having the most substantial connection with the tort) a concept which has
been developed in the United States, would be more appropriate. He voiced the hope,
since repeated in many cases including those before us, that the matter would be addressed
by the appellate courts or by legislation.
Henry J’s prayer was answered by the Ontario Court of Appeal, at least to the extent
to which it could do so, in Grimes v. Cloutier, supra, and Prefontaine Estate v. Frizzle
(1990), 71 OR (2d) 385. In effect what the court did in the latter two cases was to confine
McLean v. Pettigrew to its particular facts. In other situations, it held, the rule of double
actionability set forth in Dicey and Morris following Chaplin v. Boys, supra, should be
followed. Accordingly, in Grimes v. Cloutier, it dismissed the action of an Ontario resident
against a Quebec resident for personal injuries suffered in an automobile accident in
Quebec. Since under the Quebec no-fault scheme no action existed in respect of the
accident, no action could be brought in Ontario. The same rule was applied in Prefontaine
Estate v. Frizzle where a Quebec resident sued an Ontario resident in respect of an accident
in Quebec.
It was against this background that the present cases arose. In Tolofson, we saw, the
British Columbia Court of Appeal followed the rule in McLean v. Pettigrew strictly, holding
that the British Columbia plaintiff could sue both the British Columbia defendant and
the Saskatchewan defendant in British Columbia under the laws of that province for
damages resulting from an automobile accident that occurred in Saskatchewan. Following
the principles enunciated in its earlier decisions, the Ontario Court of Appeal in Gagnon
held that the Ontario resident could sue the defendant who was also resident in Ontario,
but further held that the latter could not cross-claim for contributory negligence against
the Quebec defendant because that claim could not have been pursued in Quebec so the
double actionability rule was not satisfied.
Under these circumstances it is incumbent on this court to respond to the prayer
originally appearing in the reasons of Henry J in Ang v. Trach and repeatedly reiterated
in subsequent cases.
Critique and Reformulation

What strikes me about the Anglo-Canadian choice of law rules as developed over the past
century is that they appear to have been applied with insufficient reference to the under-
lying reality in which they operate and to general principles that should apply in respond-
ing to that reality. Often the rules are mechanistically applied. At other times, they seem
to be based on the expectations of the parties, a somewhat fictional concept, or a sense
of “fairness” about the specific case, a reaction that is not subjected to analysis, but which
seems to be born of a disapproval of the rule adopted by a particular jurisdiction. The
truth is that a system of law built on what a particular court considers to be the expecta-
tions of the parties or what it thinks is fair, without engaging in further probing about
what it means by this, does not bear the hallmarks of a rational system of law. Indeed in
the present context it wholly obscures the nature of the problem. In dealing with legal
issues having an impact in more than one legal jurisdiction, we are not really engaged in
that kind of interest balancing. We are engaged in a structural problem. While that
structural problem arises here in a federal setting, it is instructive to consider the matter
first from an international perspective since it is, of course, on the international level that
private international law emerged.
On the international plane, the relevant underlying reality is the territorial limits of
law under the international legal order. The underlying postulate of public international
law is that generally each state has jurisdiction to make and apply law within its territorial
limit. Absent a breach of some overriding norm, other states as a matter of “comity” will
ordinarily respect such actions and are hesitant to interfere with what another state
chooses to do within those limits. Moreover, to accommodate the movement of people,
wealth and skills across state lines, a by-product of modern civilization, they will in great
measure recognize the determination of legal issues in other states. And to promote the
same values, they will open their national forums for the resolution of specific legal dis-
putes arising in other jurisdictions consistent with the interests and internal values of the
forum state. These are the realities that must be reflected and accommodated in private
international law.
The earlier 19th century English cases, such as Phillips v. Eyre, were alive to the fact
that these are the realities and forces to which courts should respond in the development
of principles in this area. By the turn of the century, however, the English courts adopted
a positivistic rule-oriented approach that has since seriously inhibited the development
of rational principles in this area: see Morguard, supra, for an illustration of this in a dif-
ferent context. It is to the underlying reality of the international legal order, then, that we
must turn if we are to structure a rational and workable system of private international
law. Much the same approach applies within a federal system with the caveat that these
internal rules have their own constitutional imperatives and other structural elements.
For example, in Canada this court has a superintending role over the interpretation of all
laws, federal and provincial, and can thus ensure the harmony that can only be achieved
on the international level in the exercise of comity.
All of this is simply an application to “choice of law” of the principles enunciated in
relation to recognition and enforcement of judgments in Morguard, supra. There this
court had this to say, at 1095:
The common law regarding the recognition and enforcement of foreign judgments is firmly
anchored in the principle of territoriality as interpreted and applied by the English courts in
the 19th century; see Rajah v. Faridkote, supra. This principle reflects the fact, one of the
basic tenets of international law, that sovereign states have exclusive jurisdiction in their own
territory. As a concomitant to this, states are hesitant to exercise jurisdiction over matters
that may take place in the territory of other states. Jurisdiction being territorial, it follows
that a state’s law has no binding effect outside its jurisdiction.
• • •
Modern states, however, cannot live in splendid isolation and do give effect to judgments
given in other countries in certain circumstances. … This, it was thought, was in conformity
with the requirements of comity, the informing principle of private international law, which
has been stated to be the deference and respect due by other states to the actions of a state
legitimately taken within its territory.
As Morguard and Hunt also indicate, the courts in the various states will, in certain
circumstances, exercise jurisdiction over matters that may have originated in other states.
And that will be so as well where a particular transaction may not be limited to a single
jurisdiction. Consequently, individuals need not in enforcing a legal right be tied to the
courts of the jurisdiction where the right arose, but may choose one to meet their con-
venience. This fosters mobility and a world economy.
To prevent overreaching, however, courts have developed rules governing and restrict-
ing the exercise of jurisdiction over extraterritorial and transnational transactions. In
Canada, a court may exercise jurisdiction only if it has a “real and substantial connection”
(a term not yet fully defined) with the subject matter of the litigation: see Moran v. Pyle
National (Canada) Ltd., [1975] 1 SCR 393; Morguard, supra; and Hunt, supra. This test
has the effect of preventing a court from unduly entering into matters in which the juris-
diction in which it is located has little interest. In addition, through the doctrine of forum
non conveniens a court may refuse to exercise jurisdiction where, under the rule elaborated
in Amchem, supra (see esp. at 921, 922, 923), there is a more convenient or appropriate
forum elsewhere.
The major issue that arises in this case is this: once a court has properly taken juris-
diction (and this was conceded in both the cases in these appeals), what law should it
apply? Obviously the court must follow its own rules of procedure; it could not function
otherwise: see Chaplin v. Boys, supra. What is procedural is usually clear enough though
at times this can raise difficult issues. In the Tolofson case, for example, the parties have
raised the much debated question of whether a statute of limitation is of a procedural or
substantive character. I shall deal with that issue later. I will here turn to the more common
“choice of law” problem, and the principal issue in these appeals, namely, what is the
substantive law that should be applied in considering the present cases?
From the general principle that a state has exclusive jurisdiction within its own terri-
tories 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. There are situations, of course, notably where an act occurs in one place
but the consequences are directly felt elsewhere, when the issue of where the tort takes
place itself raises thorny issues. In such a case, it may well be that the consequences would
be held to constitute the wrong. Difficulties may also arise where the wrong directly arises
out of some transnational or interprovincial activity. There territorial considerations may
become muted; they may conflict and other considerations may play a determining role.
But that is not this case. Though the parties may, before and after the wrong was suffered,
have travelled from one province to another, the defining activity that constitutes the
wrong took place wholly within the territorial limits of one province, in one case, Quebec,
in the other Saskatchewan, and the resulting injury occurred there as well. That being so
it seems to me, barring some recognized exception, to which possibility I will turn later,
that as Willes J pointed out in Phillips v. Eyre, supra, at 28, “civil liability arising out of a
wrong derives its birth from the law of the place where it occurred, and its character is
determined by that law.” In short, the wrong is governed by that law. It is in that law that
we must seek its defining character; it is that law, too, that defines its legal consequences.
I have thus far framed the arguments favouring the lex loci delicti in theoretical terms.
But the approach responds to a number of sound 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 expecta-
tions 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 activ-
ities must be avoided.
Leaving aside the British practice, which itself is giving increasing deference to the lex
loci delicti, the practice of most states until recently favoured exclusive reference to the
lex loci. Thus the “Memorandum Dutoit” in Actes et documents de la Onzième session
(at 20) of the Hague Convention on Traffic Accidents has this to say:
[TRANSLATION] And in fact, courts in nearly all the member States have ruled in favour of
recourse in principle to the lex loci actus in cases of automobile collisions occurring abroad.
This statement is supported by an extensive footnote quoting the sources of this law in
all the member states. Quebec law, following European tradition, did the same: see art. 6,
Civil Code of Lower Canada. This was the case, as well, in the United States. This is attested
to in Babcock v. Jackson (1963), 12 NY (2d) 743, where Fuld J stated, at 746: “The trad-
itional choice of law rule, embodied in the original Restatement of Conflict of Laws (§384),
and until recently unquestioningly followed in this court … has been that the substantive
rights and liabilities arising out of a tortious occurrence are determinable by the law of
the place of the tort.” Similarly, Australia has bypassed British precedents by adopting the
lex loci delicti as the rule governing the choice of law in litigation within Australia: see
Breavington v. Godleman (1988), 80 ALR 362 (HC).
There may be room for exceptions but they would need to be very carefully defined.
It seems to me self evident, for example, that state A has no business in defining the legal
rights and liabilities of citizens of state B in respect of acts in their own country, or for
that matter the actions in state B of citizens of state C, and it would lead to unfair and
unjust results if it did. The same considerations apply as between the Canadian provinces.
What is really debatable is whether state A, or for that matter province A, should be able
to do so in respect of transactions in other states or provinces between its own citizens
or residents.
It will be obvious from what I have just said that I do not accept the former British
rule, adopted in McLean v. Pettigrew, that in adjudicating on wrongs committed in another
country our courts should apply our own law, subject to the wrong being “unjustifiable”
in the other country. As I see it, this involves a court’s defining the nature and conse-
quences of an act done in another country. This, barring some principled justification,
seems to me to fly against the territoriality principle. As well, if this approach were gener-
ally adopted, it would, in practice, mean that the courts of different countries would follow
different rules in respect of the same wrong, and invite forum shopping by litigants in
search of the most beneficial place to litigate an issue. Applying the same approach to the
units of a federal state like Canada would be even worse. Given the constant mobility
between the provinces as well as similar legal regimes and other factors, forum shopping
would be much easier.
There were in the 19th century context in which the British approach was established
a number of forces that militated in favour of the English rule. To begin with Great Britain
was the metropolitan state for many colonies and dependencies spread throughout the
globe over which it had sovereign legislative power and superintending judicial authority
through the Privy Council. Because of its dominant position in the world, it must have
seemed natural to extend the same approach to foreign countries, especially when this
dominance probably led to the temptation, not always resisted, that British laws were
superior to those of other lands (see Chaplin v. Boys, supra, at 1100). There was, as well,
the very practical consideration that proof of laws of far-off countries would not have
been easy in those days, and the convenience of using the law with which the judges were
familiar must have proved irresistible. All the social considerations enumerated above
are gone now, and the problem of proof of foreign law has now been considerably attenu-
ated in light of advances in transportation and communication, as Lord Wilberforce
acknowledged in Chaplin v. Boys. And as he further indicated (at 1100), one of the ways
in which this latter problem can be minimized in practice is by application of the rule
that, in the absence of proof of foreign law, the lex fori will apply. Thus the parties may
either tacitly or by agreement choose to be governed by the lex fori if they find it advisable
to do so.
In sum, I can find no compelling reason for following the law of the forum either as
enunciated in Chaplin v. Boys or in McLean v. Pettigrew, supra. The latter case has, of
course, the further disadvantage of applying the law of the forum when the action com-
plained of was not even actionable under the law of the place of the wrong. As well, as
will be seen, the application of that case in other contexts raises serious constitutional
difficulties. I would overrule it.
What then can be said of the double actionability rule along the lines adopted in
England in Chaplin v. Boys? I have already indicated, of course, that I view the lex loci
delicti rule as the governing law. However, because a rigid rule on the international level
could give rise to injustice, in certain circumstances, I am not averse to retaining a discre-
tion in the court to apply our own law to deal with such circumstances. I can, however,
imagine few cases where this would be necessary.
If one applies the lex loci delicti rule as the rule for defining the obligation and its
consequences, the requirement under the English rule that the wrong must also be a tort
when committed under English law seems to me to be related more to jurisdiction than
choice of law. There appears to be some merit to the requirement, especially when coupled
with a discretion not to enforce the requirement, but it may be wondered whether it is
not excessive, particularly if this calls for a meticulous examination of the law. Some
breathing room was allowed in Chaplin v. Boys, where the court there retained a discretion
to deal with a case without complying with the double actionability rule and it is of interest
that in the recent case of Red Sea Insurance Co. v. Bouygues SA, supra, the Privy Council
used the discretion to deal with a contract under the law of the place where the contract
was made rather than the law of the forum. However, given the fact that the jurisdiction
of Canadian courts is confined to matters in respect of which there is a real and substantial
connection with the forum jurisdiction, I seriously wonder whether the requirement that
the wrong be actionable in that jurisdiction is really necessary. It may force or persuade
litigants who are within the territorial jurisdiction of the court to sue elsewhere even
though it may be more convenient for all or most of the parties to sue here. The fact that
a wrong would not be actionable within the territorial jurisdiction of the forum if com-
mitted there might be a factor better weighed in considering the issue of forum non
conveniens or, on the international plane, whether entertaining the action would violate
the public policy of the forum jurisdiction. Certainly where the place of the wrong and
the forum are both in Canada, I am convinced that the application of the forum non
conveniens rule should be sufficient. I add that I see a limited role, if any, for considerations
of public policy in actions that take place wholly within Canada. What I have to say about
federal issues later strengthens my conviction that the appropriate rule is the lex loci delicti.
Should There Be an Exception Within Canada?

I turn then to consider whether there should be an exception to the lex loci delicti rule.
As I mentioned earlier, the mere fact that another state (or province) has an interest in a
wrong committed in a foreign state (or province) is not enough to warrant its exercising
jurisdiction over that activity in the foreign state, for a wrong in one state will often have
an impact in another. If we are to permit a court in a territorial jurisdiction to deal with
a wrong committed in another jurisdiction solely in accordance with the law of that court’s
jurisdiction, then some rule must be devised to displace the lex loci delicti, and that rule
must be capable of escaping the spectre that a multiplicity of jurisdictions may become
capable of exercising jurisdiction over the same activity in accordance with their own
laws. This would not only encourage forum shopping but have the underlying effect of
inhibiting mobility.
A means of achieving this has been attempted in the United States through an approach
often referred to as the proper law of the tort. This involves qualitatively weighing the
relevant contacts with the competing jurisdictions to determine which has the most sig-
nificant connections with the wrong. The approach was adopted by the majority in a
strongly divided Court of Appeals of New York in Babcock v. Jackson, supra, a case whose
facts were very similar to McLean v. Pettigrew, supra. The plaintiff, while a gratuitous
passenger in the defendant’s automobile, suffered injuries when the automobile was in an
accident. Both plaintiff and defendant were residents of New York, but the accident
occurred in Ontario where a statute absolved the owner and driver from liability for gra-
tuitous passengers. In an action in New York, the defendant moved for dismissal on the
ground that the law of Ontario applied. A majority denied the motion to dismiss. The court
stated that while the jurisdiction where the wrongful conduct occurred will usually govern,
justice, fairness and best practical results may better be achieved in tort cases with multi-
state contacts by according controlling effect to the law of the jurisdiction which, because
of its relationship and contact with the occurrence and the parties, has the greatest concern
with the issue raised in the litigation. There has been a tendency to adopt that approach
in a number of the American states, although it would appear the vast majority still apply
the law of the place of the injury: see Richards v. United States (1962), 369 US 1 at 11-14.
I leave aside for the moment the assumptions that a flexible rule better meets the
demands of justice, fairness and practical results and underline what seems to be the most
obvious defect of this approach—its extreme uncertainty. Lord Wilberforce in Chaplin v.
Boys, supra, at 1103, after setting forth the complexities and uncertainties of the rule, thus
summarized his view:
The criticism is easy to make that, more even than the doctrine of proper law of the con-
tract … where the search is often one of great perplexity, the task of tracing the relevant
contacts, and of weighing them, qualitatively, against each other, complicates the task of the
courts and leads to uncertainty and dissent (see particularly the powerful dissents in Griffith’s
case of Bell, Ch.J, and in Miller’s case of Breitel J).
I agree with Lord Pearson too, at 1116, that the proposed rule “is lacking in certainty and
likely to create or prolong litigation.” As illustrating the uncertainty, he referred to Dym
v. Gordon (1965), 209 NE 2d 792, in which four members of the court held that the law
of Colorado applied while the three dissenters would have applied the law of New York.
Even more difficult problems would arise where more than two states had interests in the
litigation. I therefore agree with the views expressed by the majority in Chaplin v. Boys.
There might, I suppose, be room for an exception where the parties are nationals or
residents of the forum. Objections to an absolute rule of lex loci delicti generally arise in
such situations: see Babcock, supra; McLean v. Pettigrew, supra. There are several reasons
why it is considered appropriate that the home state of the parties apply its own law to
them. It is perceived by some commentators to be “within the reasonable expectations of
the parties” to apply their home law to them (an assumption with which I disagree). It is
considered to be more convenient for both litigants and judges and to accord with forum
notions of “public policy” or justice. In Neumeier v. Kuehner (1972), 286 NE 2d 454 (NY
Ct. Apps.), the underlying rationale of the “justice” theory was succinctly put by Fuld CJ,
at 456: “It is clear that … New York has a deep interest in protecting its own residents,
injured in a foreign state, against unfair or anachronistic statutes of that state.” I shall
consider the issue of “public policy” first.
The imputed injustice of applying the lex loci delicti in the seminal choice of law cases
to which I have just referred arose from some aspect of the law of the locus delicti that the
court considered contrary to the public policy of the forum, i.e., unfair. In McLean, supra,
and Babcock, supra, it was Ontario’s notorious gratuitous passenger law. In Chaplin, supra,
it was the unavailability of general damages under Maltese law. In LaVan v. Danyluk
(1970), 75 WWR 500 (BC SC), it was the absence of a contributory negligence statute
under Washington law. In Tolofson, as between father and son (residents of British Col-
umbia), it is Saskatchewan’s guest passenger law and the short limitation period for infants
under Saskatchewan law.
I remain unconvinced by these arguments. These “public policy” arguments simply
mean that the court does not approve of the law that the legislature having power to enact
it within its territory has chosen to adopt. These laws are usually enacted on the basis of
what are often perceived by those who make them as reasonable, though they may turn
out to be unwise. The residents of the jurisdiction must put up with them until they are
modified, and one does not ordinarily ignore the law of the land in favour of those who
visit. True, it may be unfortunate for a plaintiff that he or she was the victim of a tort in
one jurisdiction rather than another and so be unable to claim as much compensation as
if it had occurred in another jurisdiction. But such differences are a concomitant of the
territoriality principle. While, no doubt, as was observed in Morguard, the underlying
principles of private international law are order and fairness, order comes first. Order is
a precondition to justice. At all events, similar anomalies occur if we create an exception
for domiciliaries. Thus why should we allow an exception for the lex fori to a driver and
passenger who lose control of their car and go off the road into a ditch, but not for a simi-
lar driver and passenger who crash into a negligently planted telephone pole or a negli-
gently erected road sign? Why should we allow an exception at all where two residents of
the forum fortuitously happen to meet each other head-on on the road? Should luck be
on your side because you happen to crash into another Ontario resident while driving in
Quebec, instead of crashing into a Quebecer?
I should add that the “public policy” problems, particularly between the provinces,
tend to disappear over time. Even since the launching of the Tolofson case, Saskatchewan
has repealed its guest passenger statute and has changed the rule regarding the limitation
period of minors. The biggest difference between provinces now is in insurance schemes,
and this only creates problems of quantum, not of liability.
There are as well more general arguments of convenience for allowing an exception to
the lex loci delicti rule. These are summarized in Professor Catherine Walsh’s article “ ‘A
Stranger in the Promised Land?’: The Non-Resident Accident Victim and the Quebec
No-Fault Plan” (1988), 33 UNBLJ 173, at 182. She states:
In this situation, where the defendant is resident in another jurisdiction whose domestic law
allows full tort recovery, it is argued, application of forum law neither prejudices the defend-
ant nor impinges on the interests of the jurisdiction where the accident occurred. The litiga-
tion, after all, will take place outside Quebec and the plaintiff ’s losses will be paid by the
defendant’s liability insurer, not the defendant personally. Indeed, from la Régie’s perspective,
it is likely preferable that non-residents should settle their rights and obligations inter se in
their home courts.
These considerations are not without weight, but others are advanced that are more
doubtful. When all parties are from the forum, so the argument goes, there are many
factors, not the least of which are the involvement of the health care system of their home
province and the defendant’s forum insurer, which are considered justifications for allow-
ing the plaintiffs and defendants to settle their affairs according to the lex fori. I observe,
however, that such considerations would “come out in the wash.” A province would
probably gain in as many cases as it would lose in others; in any event, the national health
plan tends to even this out.
Those who favour an exception refer to the fact that in the international context, the
Hague Convention on traffic accidents allows for an exception where all parties involved
in the accident are from the forum. Consequently, though Canada is not a signatory to
that Convention, it becomes useful to examine the underlying reasons for the adoption
of the exception.
On an examination of the travaux préparatoires, the reasons for the adoption of the
rule seem similar to those expressed in Professor Walsh’s article (see the Dutoit memo-
randum, supra). There were other reasons as well. One relates to guarding sovereignty: it
is considered appropriate that in an accident involving only residents of a single country,
that country should apply its law to the resolution of disputes without regard to the place
where the tort took place. Whatever relevance that may have in the international sphere,
I fail to see its application within a single country.
Another reason, more germane here, had to do with judicial convenience. There
appears to have been a desire that the Convention should, if possible, limit the number
of occasions when judges of the forum would have to apply foreign law; difficulties of
proof, the expense and inconvenience involved, and the possibility that the judge might
misinterpret the foreign law were all concerns. With the general rule of lex loci delicti, in
cases involving parties from two or more jurisdictions, chances are that the lawsuit will
take place in the country in which the tort took place. But when all parties are from
another state, the likelihood is that the lawsuit will take place in their home jurisdiction.
There is some merit to allowing judges in this situation to apply their own law. This factor
is, however, of less concern in matters arising within Canada. The laws of our common
law provinces, at least, are not that different from each other that their application would
give our judges and lawyers significant difficulty. Lord Wilberforce in Chaplin v. Boys
(at 1100) conceded the same on the international plane and set forth means, already
referred to, of accommodating the problems that might be posed, means that could be
equally useful here. What is more, in Canada, case law from other provinces is readily
available (and now available online), and lawyers called to the bar in several provinces
are to be found in every major city in this country.
Another point in favour of a strict rule is that it may be difficult to determine the ambit
of claims at the outset. The problems this raises could be exacerbated by the fact that
having an exception could encourage frivolous cross-claims and joinders of third parties.
If it is known that the lex fori will apply, when residents of the forum are the only parties
involved in an accident, but that the lex loci delicti will apply the moment any non-forum
natural or legal person is joined to the action, are we not encouraging those who wish to
be governed by the latter rule to dig up third parties from the locus delicti? Will there be
attempts to join, say, the company that erected the road sign they crashed into, or again,
a pedestrian who may have momentarily distracted them from their driving? More dif-
ficult still, will the defendant join another driver who was “Involved” in the accident (like
Mr. Lavoie), even though there is a high likelihood that the original defendant (as it is
argued is the case with Mr. Gagnon) will be found 100% liable.
One of the main goals of any conflicts rule is to create certainty in the law. Any excep-
tion adds an element of uncertainty, and leaves the door open to a resourceful lawyer to
attempt to change the application of the law. It is idealistic to say that, if there were no
truth to the allegations of negligence against a defendant or a third party, such party would
be able to have the case against it dismissed by way of summary judgment. The claim may
be framed in such a way that there is some doubt as to liability, and that may indeed be
the case. Motions judges are reluctant to grant summary judgments in any but the clearest
cases. Most matters would have to proceed to trial on the basis that the lex loci delicti
applied. If, at the end of the day, only parties from the forum were found liable, would
the applicable law “jump” to that of the forum?
Problems of this kind extend well beyond the courtroom. Clear application of law
promotes settlement. If one has to wait for litigation to see if complications of the kind I
have just described arise, then settlement will be inhibited. There is need for the law to
be clear. Indeed, if not strictly narrowed to situations that involve some timely and close
relationship between the parties, an exception could lead to injustice. It is one thing for
a passenger to sue his or her driver on a trip from one jurisdiction to another. It may be
another thing to permit suit in a case where the parties have been away from their own
jurisdiction for several years because the likelihood is that the owner of a vehicle would
then insure it on the basis of the local situation. A discretion along the lines proposed by
Lord Wilberforce in Chaplin v. Boys, supra, could, I suppose, be used, but this scarcely
contributes to certainty in the law.
On the whole, I think there is little to gain and much to lose in creating an exception to
the lex loci delicti in relation to domestic litigation. This is not to say that an exception
to the lex loci delicti such as contained in the Hague Convention is indefensible on the
international plane, particularly since it is enshrined in a convention that ensures reciprocity.
A similar reciprocal scheme might well be arranged between the provinces. As I have noted,
however, a rule along the lines of the Hague Convention is not without its problems and
does not appear to afford this country most of the advantages that Europeans may gain
from it. I note that Quebec has adopted a rule along the same lines in its new Civil Code, but
the appropriateness of a judicially created rule seems questionable, especially given the addi-
tional matters that require consideration in a federation. To these federal issues I now turn.
Federal Problems
[This section of La Forest J’s judgment is reproduced in Chapter 3.]
I shall therefore turn to the specific issues in the two cases under appeal.
[La Forest J proceeded to deal with the specific provisions of the lex loci delicti that were in
issue in this action. He characterized the Saskatchewan limitation provision in Tolofson v
Jensen as substantive, not procedural (this part of the decision is reproduced in Chapter 11).
It therefore applied to bar Kim Tolofson’s actions against his father and the Saskatchewan
driver. La Forest J then dealt with the lex loci delicti in Lucas (Litigation Guardian of ) v
Gagnon.]
In addition to his argument that the Quebec law governs on the ground that the lex
loci delicti was applicable, the appellant maintained that, in any event, Quebec law was
the applicable law by virtue of Quebec’s no-fault scheme. Since I have already decided
that the lex loci delicti should govern, it would be unnecessary to enter into a discussion of
the second argument, were it not for the fact that counsel for the respondent took a different
view of the effect of Quebec law, in particular having regard to Quebec’s new Civil Code.
The relevant portions of Quebec’s no-fault scheme appear in ss. 3 and 4 of the Quebec
Automobile Insurance Act, which read:
3. The victim of bodily injury caused by an automobile shall be compensated by the Régie
in accordance with this title, regardless of who is at fault.
4. The indemnities provided for in this title are in the place and stead of all rights,
recourses and rights of action of any one by reason of bodily injury caused by an automobile
and no action in that respect shall be admitted before any court of justice.
Barring other considerations, it seems clear to me that the legislature intended that
these provisions should apply to all persons who have an accident in Quebec regardless
of their province of residence, a policy which I noted earlier is clearly within its consti-
tutional competence.
This position is buttressed by the fact that, at the time of the accident, this was wholly
consistent with art. 6 of the Civil Code of Lower Canada which was in effect at the time
of the accident. That provision reads:
6. … The laws of Lower Canada relative to persons, apply to all persons being therein,
even to those not domiciled there.
In my view, then, the appellant is entitled to succeed on this ground as well.

The Quebec and Ontario governments certainly thought the Quebec no-fault scheme
applied to all accidents in Quebec, whatever the domicile of the persons involved. The
interprovincial Memorandum of Agreement between La Régie and the Ontario Minister
of Consumer and Commercial Relations, signed in 1978, is predicated on the assumption
that the Act covers all victims of accidents in Quebec, whether resident or not. In the
agreement, the Minister undertook to amend Schedule E of the Ontario Insurance Act,
RSO 1970, c. 224, to require that Ontario residents be indemnified by their respective
Ontario insurers for injuries sustained in automobile accidents occurring in Quebec in
accordance with Régie benefits and regardless of fault. The agreement begins with recitals
describing the application of Ontario and Quebec’s respective laws, of which the first and
last are the most pertinent:
1.1 WHEREAS by virtue of article 8 of the Automobile Insurance Act (LQ 1977 c. 68) the
victim of an automobile accident that occurred in Quebec who is not resident therein is
compensated by the Régie to the extent that he is not responsible for the accident unless
otherwise agreed between the Régie and the competent authority of the place of residence
of such a victim.
• • •
1.5 AND WHEREAS it is the desire of both parties that the resident of Ontario, other than
the uninsured who is a victim of an automobile accident occurring in Quebec, be entitled
to compensation on the same basis as a resident of Quebec and that his legal liability for such
an accident be no greater than that of a Quebec resident.
Now therefore, in consideration of the mutual covenants hereinafter, the parties hereby
agree as follows.
The new Civil Code does not change the situation of the parties in the present action;
as mentioned, it was not in effect at the time of the accident. In view of its implications
for other cases, however, I think it wise to deal with the case on the assumption that the
new Civil Code applies. The relevant provision reads as follows:
3126. The obligation to make reparation for injury caused to another is governed by the
law of the country where the injurious act occurred. However, if the injury appeared in
another country, the law of the latter country is applicable if the person who committed the
injurious act should have foreseen that the damage would occur.
In any case where the person who committed the injurious act and the victim have their
domiciles or residences in the same country, the law of that country applies.
Even assuming this provision were the operative one at the time of the accident, I am
convinced the language of the provisions of the Automobile Insurance Act is so clear that
it must have been intended to override the general law. Section 3 provides without excep-
tion that all automobile accident victims (and one must read here in the province) shall
be compensated by the Régie regardless of fault. Then s. 4 provides that these indemnities
“are in the place and stead of all rights, recourses and rights of action of any one by reason
of bodily injury caused by an automobile and no action in that respect shall be admitted
before any court of justice.” I observe that the provision removes not only rights of action
but “all rights … of any one.”
This method of approach receives support from the case of Szeto c. Fédération (La)
Cie. d’assurances du Canada, [1986] RJQ 218, before the Quebec Court of Appeal where
the court refused the claim of an accident victim against the Régie in respect of an auto-
mobile accident between two residents of Quebec in Ontario. That case, of course, arose
out of quite different facts, but the manner in which the court dealt with the relation of
the Automobile Insurance Act to the general law is of assistance. Paré JA (speaking for
himself and L’Heureux-Dubé JA) had this to say, at 220:
[TRANSLATION] It is true that the Automobile Insurance Act must be interpreted so as to
override the general law only to the extent that this is clearly stated. The fact remains that
the principle underlying it denies in a general way a right of action to all accident victims.
The statute thus clearly departs from the general rules of our civil law. The remedies retained
by the statute are thus retained only as exceptions and I wonder whether as a consequence
the provisions of s. 7 of the Act should not be so treated.
I, therefore, conclude that nothing in the provisions cited to us overrides the general
rule that the lex loci delicti applies to this case. Indeed I think these provisions buttress
this position by providing that Quebec law applies.
Disposition
Tolofson v. Jensen
The appeal should be allowed with costs throughout. The appellants’ application for a
declaration that the proper choice of law to be applied is the law of Saskatchewan and that
the Saskatchewan limitation period is substantive should be granted, and the action should
be referred to the Supreme Court of British Columbia Chambers for determination.
Lucas (Litigation Guardian of) v. Gagnon

The appeal should be allowed and the action of the respondents Tina Lucas and Justin
Gagnon, by their litigation guardian Heather Gagnon, and Heather Gagnon personally
should be dismissed. Question 2 of the agreed statement of facts should be answered as
follows:
2(a) Does Ontario tort law or Quebec law, as set out in the Automobile Insurance Act,
apply to this action?
Quebec law, as set out in the Automobile Insurance Act.

2(b) Is the appellant Réjean Gagnon entitled to maintain his cross-claim for contribution
and indemnity against the respondent Cyrille Lavoie?
No.
As agreed between these parties, there should be no order as to costs against the
respondents Tina Lucas and Justin Gagnon, by their litigation guardian Heather Gagnon,
and Heather Gagnon personally, in this court and the courts below. The respondent Cyrille
Lavoie should have his costs against the appellant unless the two agree otherwise.
SOPINKA J:
Subject to the observations of Justice Major with which I agree, I concur in the reasons
of Justice La Forest.
MAJOR J:
I have had the opportunity to read the reasons of Justice La Forest, and I agree that, in
general, the question of which province’s law should govern the litigation should be
determined by reference to the lex loci delicti (law of the place) rule. I also agree that, in
the present appeals, this rule governs which provincial laws should apply.
However, I doubt the need in disposing of these appeals to establish an absolute rule
admitting of no exceptions. La Forest J has recognized the ability of the parties by agree-
ment to choose to be governed by the lex fori and a discretion to depart from the absolute
rule in international litigation in circumstances in which the lex loci delicti rule would
work an injustice. I would not foreclose the possibility of recognizing a similar exception
in interprovincial litigation.
NOTES
This case obviously raises fundamental questions about the choice of law process. Consider
the following:
1. The Supreme Court thinks that the lex loci delicti rule seems axiomatic because it flows
logically 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.” In what sense is a rule of, say, negligence law an exercise
of jurisdiction? In what sense is that exercise of jurisdiction within a state’s territory? If the
premise is that such a rule is a commandment to persons present within the territory, does
that not assume the very point in issue—namely, what the spatial ambit of the rule should
be? How does this theory differ from the “vested rights” theory so criticized by American
scholars and courts? For a comparison of pre-Tolofson Canadian law with English and Amer-
ican law, see Junger.
2. La Forest J says:
[I]t 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. There are situations, of course,
notably where an act occurs in one place but the consequences are directly felt elsewhere,
when the issue of where the tort takes place itself raises thorny issues. In such a case, it may well
be that the consequences would be held to constitute the wrong. Difficulties may also arise
where the wrong directly arises out of some transnational or interprovincial activity. There ter-
ritorial considerations may become muted; they may conflict and other considerations may play
a determining role.
He refers in this passage to two situations: first, where the act and its consequences are
in two different countries; and second, where “the wrong directly arises out of some trans-
national or interprovincial activity.” Is he suggesting that the lex loci delicti rule may be
modified, or even dispensed with, in either of these situations? If so, does he offer any clues
as to how choice of law issues should be resolved in these situations? The specific torts dis-
cussed in Section II of this chapter can fall into one or the other of these categories and
sometimes both.
3. La Forest J says (in the extract reproduced in Chapter 3):
The nature of our constitutional arrangements—a single country with different provinces
exercising territorial legislative jurisdiction—would seem to me to support a rule that is certain
and that ensures that an act committed in one part of this country will be given the same legal
effect throughout the country.
The Canadian constitutional framework thus “supports” a choice of law rule that meets cer-
tain criteria. Does this mean that a choice of law rule that does not meet those criteria—
because it is uncertain or because it results in an act having different legal effects in different
parts of Canada—is constitutionally suspect, or even impermissible? If so, what does this
mean for the ability of a province to adopt statutory choice of law rules that are different
from those in the rest of Canada? This aspect of Tolofson is discussed in Castel (1995).
In this connection, note that the Civil Code of Quebec includes a variety of choice of law
rules that are different from those in common law Canadian jurisdictions. This includes the
rule for delicts, art 3126, quoted by La Forest J in the last part of his judgment. It does exactly
what the majority insisted the common law choice of law rule for torts, at least in intra-
Canadian cases, should not do—namely, make an exception to the lex loci delicti rule where
both plaintiff and defendant have their domicile or residence in a state other than the one
in which the tort occurred.
Somers v Fournier
(2002), 60 OR (3d) 225 (CA)
CRONK JA (Finlayson and Carthy JJA concurring):
I. Introduction
[1] This appeal and cross-appeal involve the choice of law to be applied in an inter-
national negligence action commenced in Ontario and arising from a two-car motor
vehicle accident which occurred in the state of New York. At issue, in particular, is the
choice of law applicable to claims in the action for costs, prejudgment interest and non-
pecuniary general damages.
[2] On April 9, 1990, Arthur and Lola Somers (the “Somers”), residents of Ontario,
were involved in a motor vehicle accident with a car driven by Steven D. Fournier
(“Fournier”), a resident of the state of New York, while on a road trip in New York state.
Lola Somers was a passenger in the vehicle being driven by her husband when it was
rear-ended by the vehicle operated by Fournier and owned by Fournier’s father. Ms.
Somers was also involved in a subsequent motor vehicle accident in Ontario on October
14, 1994. As a result of both accidents, several related lawsuits have arisen.
[3] In this action, commenced by the Somers in Ontario against Fournier and Liberty
Mutual Insurance Company (“Liberty Mutual”), the Somers claim compensatory damages
for personal injuries, prejudgment interest and costs arising from the 1990 accident (the
“Action”). The defendants in the Action attorned to the jurisdiction of the Ontario courts.
Thus, there is no challenge in the Action of Ontario as the proper forum. …
[4] At the time of the 1990 accident, Lola Somers was insured by Liberty Mutual under
an Ontario standard form automobile insurance policy. Neither that policy nor Ontario’s
statutory regime applicable in 1990 restricts an injured person’s right to sue an at-fault
motorist in tort for damages arising from injuries occasioned by a motor vehicle accident.
Further, the Liberty Mutual policy is silent on the choice of law applicable to claims arising
from accidents in foreign jurisdictions.
[5] Fournier enjoyed third party liability insurance coverage under a New York Central
Insurance Company policy at the time of the 1990 accident. That policy has limits of
$300,000 (US), inclusive of all damages, interest and costs.
[6] Fournier moved prior to trial for, among other relief, a declaration that the sub-
stantive law of New York state applies to the Action. By order dated June 29, 2001, Justice
C. Campbell held that the substantive law of New York state and the procedural law of
Ontario applies to the Action. He further concluded that prejudgment interest, costs and
Ontario’s “cap” on non-pecuniary general damages are procedural in nature and, therefore,
are governed in the Action by Ontario law.
[7] Fournier appeals the motions judge’s decision that: a) the procedural law of
Ontario applies to the Action, and b) that law governs claims in the Action for prejudg-
ment interest and costs. Ms. Somers cross-appeals the motions judge’s determination that
the substantive law of New York state applies to the Action and, in the alternative, his
conclusion that the “cap” on non-pecuniary general damages recognized under Ontario
law applies to claims in the Action for damages for non-pecuniary losses and expenses.
Mr. Somers abandoned a cross-appeal brought by him from the motions judge’s dismissal
of his claim for non-pecuniary general damages. He did not participate in this hearing.
[8] For the reasons that follow, I conclude that the substantive law of New York state
applies to the Action and that costs and Ontario’s “cap” on non-pecuniary general damages
are matters of procedure to which Ontario law applies in the Action. I further conclude,
however, that prejudgment interest is a matter of the substantive law of Ontario, which
law has no application to the Action. Accordingly, I would allow the appeal on that issue.
In all other respects, I would dismiss the appeal and cross-appeal, and confirm the order
of the motions judge.
II. The Issues

[9] There are three main issues on this appeal and cross-appeal:
(i) whether costs and prejudgment interest are matters of procedure to which
Ontario law (the lex fori) applies in the Action;
(ii) whether the substantive law of New York state (the lex loci delicti) applies to
the Action and, if so, whether an exception to the application of that law is
warranted in this case to avoid injustice; and
(iii) whether the “cap” on non-pecuniary general damages recognized under

Ontario law is a matter of procedural, rather than substantive, law with the
result that it applies to the Action as part of the law of the forum (the lex fori).
III. Analysis
[10] The motions judge found that (at para. 15):
(a) As a matter of New York state substantive law, no prejudgment interest is awardable
in personal injury compensation claims by statute.
• • •
(f ) Attorneys’ fees, as a matter of New York state substantive law, can not be awarded in
personal injury compensation arising from automobile accidents, as each party is responsible
for his or her own attorney’s expenses of the litigation.
(g) As a matter of New York state substantive law, there is no judicial cap or ceiling
governing the award of general damages, but the award is subject to review and must be
considered reasonable and truly reflective of the nature and extent of the injuries and the
effects of those injuries on the victim.
[11] Fournier makes two main submissions in support of his appeal. First, he argues
that New York state law concerning costs and prejudgment interest is substantive law and
that it applies to the Action. Accordingly, he asserts that the motions judge erred in
concluding that Ontario law concerning costs and prejudgment interest is procedural law
which applies to the Action. Second, and in any event, he submits that Ontario law relating
to costs and prejudgment interest should not operate to defeat his substantive law rights
under the law of New York state.
[12] In Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon (1994), 120 DLR
(4th) 289 (SCC), the Supreme Court of Canada held that the rule of private international
law that should be applied in tort cases is the lex loci delicti, that is, the law of the place of
the wrong. Thus, under Tolofson, the law to be applied to the substantive rights of parties
in tort cases is the law of the place where the activity occurred. However, the law of the
forum (the lex fori) applies to procedural matters. (See the reasons of La Forest J, writing
for a majority of the court, at pp. 304-305.)
[13] The distinction between procedural and substantive law is central to the issues
raised on this appeal and cross-appeal. That distinction is often difficult to discern. In
Tolofson, La Forest J addressed the important purpose of classifying a rule or legal require-
ment as substantive or procedural (at pp. 317-318 and 321):
In any action involving the application of a foreign law the characterization of rules of law
as substantive or procedural is crucial for, as Geoffrey Cheshire and Peter North, Cheshire
and North’s Private International Law, 12th ed. by Peter North and J.J. Fawcett (London:
Butterworths, 1992), at p. 74-5, state:
One of the eternal truths of every system of private international law is that a distinc-
tion must be made between substance and procedure, between right and remedy. The
substantive rights of the parties to an action may be governed by a foreign law, but all
matters appertaining to procedure are governed exclusively by the law of the forum.
The reason for the distinction is that the forum court cannot be expected to apply every
procedural rule of the foreign state whose law it wishes to apply. The forum’s procedural rules
exist for the convenience of the court, and forum judges understand them. They aid the
forum court to “administer [its] machinery as distinguished from its product”: Poyser v.
Minors (1881), 7 QBD 329 (CA) at p. 333, per Lush LJ. Although clearcut categorization has
frequently been attempted, differentiating between what is a part of the court’s machinery
and what is irrevocably linked to the product is not always easy or straightforward. …
[I]n the conflicts of laws field … the purpose of substantive/procedural classification is to
determine which rules will make the machinery of the forum court run smoothly as distin-
guished from those determinative of the rights of both parties. [Emphasis added.]
[14] This court has described the distinction between substantive and procedural law
in these terms:
Substantive law creates rights and obligations and is concerned with the ends which the admin-
istration of justice seeks to attain, whereas procedural law is the vehicle providing the means
and instruments by which those ends are attained. It regulates the conduct of Courts and liti-
gants in respect of the litigation itself whereas substantive law determines their conduct and
relations in respect of the matters litigated. [Emphasis added.]
(Sutt v. Sutt, [1969] 1 OR 169 (CA), at p. 175, per Schroeder JA.) With that distinction in
mind, I turn to an examination of whether costs, prejudgment interest and Ontario’s “cap”
on non-pecuniary general damages are matters of substantive, or procedural, law.
(1) Costs
[15] The authority in Ontario to award costs is conferred by s. 131 of the Courts of
Justice Act, RSO 1990, c. C.43 (the “Act”). That section empowers an Ontario court, in its
absolute discretion, to award “the costs of and incidental to a proceeding or a step in a
proceeding,” subject to the rules of court or the provisions of an Act, and to “determine
by whom and to what extent the costs shall be paid.” Ontario’s Rules of Civil Procedure
and associated case law establish various factors to be taken into account in determining
whether, and in what amount, costs should be awarded.
[16] Traditionally, costs have been regarded as a form of indemnification of the party
to whom they are awarded for the legal fees and expenses incurred in litigation (see Bell
Canada v. Consumers’ Association of Canada, [1986] 1 SCR 190 and Young v. Young, [1993]
4 SCR 3). While that indemnification principle continues to inform awards of costs, it is
not the exclusive, or necessarily the predominate, function of such awards. In contem-
porary litigation, costs serve many purposes. Among those purposes are the goals of
encouraging settlement and facilitating the management and control of the litigation
process. (See, generally, Mark M. Orkin, QC, Costs: The Bottom Line (Toronto: Law Society
of Upper Canada, 1999).)
[17] Thus, costs are both a discretionary indemnification device and a mechanism by
which abuses of the court’s processes may be deterred and penalized. Costs are routinely
used by Ontario courts to reward or sanction the conduct of parties prior to and during
the litigation process. Consistent with that function, subrule 57.01(2) of the Rules of Civil
Procedure ensures that success in litigation is not a guarantee of an award of costs. Under
that subrule, the courts are expressly empowered to award costs against a successful party,
in a proper case. Solicitor-and-client costs, or costs on a substantial indemnity basis, may
be awarded to penalize and deter reprehensible, scandalous or outrageous conduct, or
conduct deserving of sanction. Costs awarded against solicitors personally, because of
their conduct in a proceeding, have both punitive and compensatory aspects. (See Rule
57.01.) In addition, by Rule 49.10, costs can be utilized to promote settlement and to
encourage efficient and timely dispute resolution.
[18] Viewed from a multi-purpose perspective, therefore, costs are “a means by which
the ends of justice are attained” (Sutt v. Sutt, at p. 175, per Schroeder JA [paraphrased]).
They are an essential tool designed, in the words of La Forest J in Tolofson, to “make the
machinery of the forum court run smoothly” and to aid Ontario courts in “administer[ing]
[their] machinery as distinguished from [their] product” (at pp. 318 and 321).
[19] Finally, costs of litigation are incidental to the determination of the rights of the
parties. They are not part of the lis between litigants. In my view, the motions judge cor-
rectly concluded (at para. 61):
Costs are a defining part of our civil litigation process. They are appropriately characterized
as procedural since with the discretion granted, particularly to trial courts, the “machinery”
of the Court can be enabled to work effectively. A particular example of the operation of that
machinery is seen in the application of Rule 49 dealing with offers to settle.
[20] I am satisfied that in Ontario costs are a procedural matter governed by the lex
fori. In accordance with Tolofson, Ontario’s procedural law concerning costs applies to
the Action.
(2) Prejudgment Interest

[21] The Act also provides for awards of prejudgment and postjudgment interest. In
connection with the former, s. 128(1) of the Act reads:
A person who is entitled to an order for the payment of money is entitled to claim and have
included in the order an award of interest thereon at the prejudgment interest rate, calculated
from the date the cause of action arose to the date of the order.
Section 128(1) thus establishes a presumptive right to prejudgment interest, where an order
for the payment of money is made. Entitlement to prejudgment interest under s. 128(1)
does not apply where interest is payable by a right other than under s. 128 (s. 128(4)). There
is no suggestion in this case that a claim for prejudgment interest derives from other than
the Act.
[22] Entitlement to an award of prejudgment interest is not absolute, however, even
where an order for the payment of money is made. Section 130(1) of the Act authorizes
a court, in its discretion and where it considers it just to do so, to disallow prejudgment
interest, allow it at a rate higher or lower than that provided in s. 128, or allow it for a
period other than that provided in s. 128. The authority provided by s. 130 applies to
causes of action arising after October 23, 1989. (SO 1989, c. 67, s. 8.)
[23] Modern theories of prejudgment interest relate it to compensatory, rather than
punitive, goals. Awards of prejudgment interest are designed to recognize the impact of
inflation and to provide relief to a successful litigant against the declining value of money
between the date of entitlement to damages and the time when damages are awarded.
(See M.A. Waldron, The Law of Interest in Canada (Scarborough: Carswell, 1992) at
p. 127.) In Pagliarella v. Di Biase Brothers Inc. (1989), 68 OR (2d) 597 (CA), leave to appeal
to SCC refused SCC File No. 21500, SCC Bulletin 1989, p. 2316, Finlayson JA commented
(at p. 607):
It must be remembered that interest is merely the value of money and when we are speaking
of prejudgment interest we are talking about compensation for the victim with respect to
the delay necessitated by the time interval from the date on which the right to a money award
arises and the date on which it is awarded. It is, in the words of Chouinard J in Travelers Ins.
Co. of Canada v. Corriveau, [1982] 2 SCR 866 at p. 875, [1983] ILR [para.] 1-1601 sub nom. La
Compagnie d’Assurance Travelers du Canada v. Corriveau (SCC), merely “damages due to delay.”
[24] In Graham v. Rourke (1990), 75 OR (2d) 622 (CA), in considering a predecessor

version of s. 130 of the Act, this court stated (at p. 629, per Doherty JA):
Section 140 of the Act is worded widely enough to allow a trial judge to consider the conduct
of the proceedings, including the conduct of the parties or those acting through the parties,
when determining the appropriate rate of pre-judgment interest. Pre-judgment interest
cannot, however, become a means of punishing or rewarding a party to the proceedings.
Rather, pre-judgment interest must be viewed as part of the compensatory package provided
to the person wronged: Irvington Holdings Ltd. v. Black (1987), 58 OR (2d) 449, 14 CPC (2d)
229, 35 DLR (4th) 641, 20 OAC 390 (CA).
[25] Under the current Act, Ontario courts are required to take specific factors into
account in exercising their discretion under s. 130(1), including “the circumstances of
the case” (s. 130(2)(b)), “the conduct of any party that tended to shorten or to lengthen
unnecessarily the duration of the proceeding” (s. 130(2)(f)), and “any other relevant
consideration” (s. 130(2)(g)). Accordingly, the presumptive entitlement to prejudgment
interest of a successful litigant who obtains an order for the payment of money may be
displaced, varied or reduced, in the discretion of the court, based on conduct which
adversely affected the progress of the litigation. In that respect, the courts may utilize their
discretionary power to award, deny or vary a prejudgment interest award as a mechanism
to control the progress of litigation and, in proper cases, to sanction litigants. As observed
by M.A. Waldron in The Law of Interest in Canada, “many provincial statutes explicitly
recognize prejudgment interest as dependent in part upon the speedy conduct of proceed-
ings” (at p. 129). In Ontario, that direction is contained in s. 130(2)(f) and (g) of the Act.
[26] S.M. Waddams, in The Law of Damages, Looseleaf ed. (Toronto: Canada Law
Book Inc., 2000) indicates (at para. 7.930):
Where interest is in the court’s discretion, it can be withheld to mark the court’s disapproval
of excessive delay by the plaintiff in prosecuting the claim or increased in case of excessive
delay by the defendant. In Jefford v. Gee [[1970] 2 QB 130 (CA)], Lord Denning said: “In
exceptional cases, such as when one party or the other has been guilty of gross delay, the
court may depart from the [usual rules] by diminishing or increasing the award of interest,
or altering the periods for which it is allowed.” [Footnotes omitted.]
In Baud Corp., N.V. v. Brook (No. 2), the Supreme Court of Canada, in exercising its discretion
under s. 50 of the Supreme Court Act (dealing with interest after the date of the trial
judgment) reduced the interest that would normally have been allowable, because of the
plaintiff ’s delay in prosecuting the litigation. A similar discretion is exercisable in most
jurisdictions in respect of prejudgment interest. [Footnotes omitted.]
[27] This court has withheld or reduced interest in various circumstances of delay,
including where: a) a lengthy delay in the prosecution of an action was attributable to the
conduct of a litigant (Al-Qahtani-Shaw-Leonard Ltd. v. Crossworld Freight Ltd. (1988), 66
OR (2d) 256 (CA) and Sawadski v. Heil (1991), 86 DLR (4th) 364 (Ont. CA)); b) a delay
in production of documents occurred (Oakville Storage and Forwarding Ltd. v. Canadian
National Railway Co. (1991), 84 DLR (4th) 326, 5 OR (3d) 1 sub nom. Armak Chemicals
Ltd. v. Canadian National Railway Co. (CA), leave to appeal to SCC refused 86 DLR (4th)
viii, 137 NR 238n. (SCC)); and c) a delay occurred at the plaintiff ’s request (Hill v. Church
of Scientology of Toronto (1994), 114 DLR (4th) 1, 18 OR (3d) 385 (CA), affirmed [1995]
2 SCR 1130).
[28] In this case, Fournier and Liberty Mutual argue that prejudgment interest under
Ontario law is akin to a head of damage which is available to respond to a delay in the
delivery of awarded compensation. Consequently, they submit, prejudgment interest is
governed by the substantive law of Ontario which, by operation of the lex loci delicti rule
mandated by Tolofson, has no application to the Action. I agree.
[29] The motions judge concluded that (at paras. 63 and 64):
The awarding of pre-judgment interest to various heads of damage is of more recent origin
under the Ontario Rules of Civil Procedure. The hallmark of the procedure, as with costs, is
the discretion granted to the Court. [Citation omitted.]
For these reasons, I am satisfied that in this case the issues of costs and pre-judgment
interest should fall to be determined by the law of Ontario as a matter of procedure … [sic]
[Emphasis added.]
With respect, I disagree.

[30] The entitlement to claim prejudgment interest is established in Ontario not by
the Rules of Civil Procedure, as suggested by the motions judge, but by the Act. Section
128(1) of the statute confers a substantive right to claim prejudgment interest on a person
who is entitled to an order for the payment of money. That right may be displaced, varied
or reduced, in the discretion of the court, where the conduct of the claimant has adversely
affected the speedy progress of the litigation. The discretion of the court concerning
prejudgment interest relates to the denial or reduction, as distinct from the granting, of a
right. Accordingly, in my view, the character of the court’s discretion in connection with
prejudgment interest is qualitatively different from the nature of the wide discretion
afforded the court under s. 131(1) of the Act to grant, or deny, costs. The legislature,
through the Act, has established a specific policy with respect to prejudgment interest.
That policy does not include an unfettered discretion for Ontario courts on whether to
award prejudgment interest.
[31] I conclude, therefore, that in Ontario prejudgment interest is a matter of substan-
tive law. On my reading of Tolofson, there is no room for departure from the rule which
dictates application of the lex loci delicti (the law of New York state) to claims in the Action
for prejudgment interest.
(3) The Argument for an Exception to the Lex Loci Delicti Rule
[32] Ms. Somers argues on her cross-appeal that the motions judge erred in determin-
ing that the substantive law of New York state applies to the Action and related proceed-
ings arising out of the 1990 accident. In essence, she submits that the application to the
Action of the substantive law of New York state would create serious injustice, thus
bringing this case within the narrow category of cases identified in Tolofson as supporting,
on an exceptional basis, a departure from the lex loci delicti rule. In my view, that argument
cannot succeed, for the following reasons.
[33] The decision in Tolofson dictates that the substantive law of New York state applies
in the circumstances of this case unless the basis for an exception to the lex loci delicti
rule is demonstrated. A majority of the Supreme Court of Canada confirmed in Tolofson
that the courts retain a discretion to apply the local law (the lex fori) in international litiga-
tion where necessary to avoid injustice. That discretion is limited, however, and is to be
exercised only in compelling and exceptional circumstances (Tolofson, at pp. 307-308, per
La Forest J). This case involves international litigation.
[34] In the recent decision of this court in Wong v. Lee, [2002] OJ No. 885 (Ont. CA),
Feldman JA stated, writing for the majority, (at para. 16):
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.
However, as an example, the type of injustice the court sought to remedy in Hanlan [v Sernesky
(1998), 38 OR (3d) 479 (CA)] was the unavailability to an Ontario plaintiff of a complete
category of claim or cause of action according to the lex fori—the claims of family members
for damages pursuant to s. 61 of the Family Law Act. [Emphasis added]
[35] Tolofson was a domestic litigation case arising from a motor vehicle accident in
Saskatchewan. If the lex loci delicti applied, a limitation period applicable under Saskatch-
ewan law would bar any claims by the infant plaintiff and by gratuitous passengers,
whereas the applicable limitation period under the law of the forum (British Columbia)
would not have that effect. The Supreme Court of Canada unanimously concluded that
the law of Saskatchewan should apply, notwithstanding the expiry of the limitation period
provided under Saskatchewan’s law.
[36] In contrast, Wong v. Lee was an international action arising from an automobile
accident in New York state involving Ontario residents. In that case, if the law of New
York state applied, the defendant insurance company would be exposed to liability for
pecuniary damages without a deductible, whereas under Ontario law that would not be
the case. Based on Tolofson, a majority of this court concluded that such a consequence
was not an injustice that allowed for recognition of an exception to the lex loci delicti rule.
Rather, the defendant’s increased liability exposure was the necessary effect of applying
the lex loci delicti rule:
This articulation of the injustice appears to be merely another way of applying the public
policy of Ontario as defined in its law, and effectively treating the fact that all of the parties
are from the forum as in itself creating an injustice.
(at para. 17, per Feldman JA.)

[37] The lex loci delicti rule applies in international litigation notwithstanding a high
degree of connection between the litigants and the place of the forum. In Wong v. Lee, all
of the parties to the accident were resident in the forum, and had no connection with the
foreign jurisdiction where the wrong occurred (except that the accident occurred in the
foreign jurisdiction). Even in those circumstances, it was held that, on proper application
of the conflict of laws rule established in Tolofson, the lex loci delicti rule governed.
[38] The question here is whether an injustice would be occasioned by application to
the Action of the substantive law of New York state, sufficient to warrant an exception to
the lex loci delicti rule. In my view, the answer is “no.”
[39] In this case: a) the 1990 accident occurred in the state of New York, b) the alleged
tortfeasor resides in that jurisdiction, and c) Fournier’s policy of insurance was issued in
that jurisdiction. Lola Somers relies on a series of Canadian cases, in which the law of the
forum was applied in domestic and international motor vehicle accident litigation, to
support her argument that the substantive law of Ontario should apply to the Action: see
Lau v. Li (2001), 53 OR (3d) 727 (SCJ); Gotch v. Ramirez (2000), 48 OR (3d) 515 (SCJ);
Gill v. Gill, [2000] BCJ No. 1106 (BC SC); Wong v. Wei, [1999] BCJ No. 768 (BC SC); and
Hanlan v. Sernesky, supra. Those cases, many of which were specifically considered by
Feldman JA in Wong v. Lee, were decided before the decision of this court in Wong v. Lee
and, hence, are of little assistance.
[40] Ms. Somers argues that her present inability to claim no-fault benefits under New
York state automobile accident benefits legislation and the bar, due to the expiry of a
limitation period, to any claim by her for accident benefits from her own insurer of the
type and to the extent provided for under New York state legislation, dictate recognition
of an exception to the lex loci delicti rule. I disagree.
[41] The Liberty Mutual policy under which Ms. Somers was insured at the time of
the 1990 accident provides for an entitlement to accident benefits to a limit of $25,000.
Following the 1990 accident, it was open to Ms. Somers to claim no-fault accident benefits
under either Ontario or New York state benefits schemes. It is conceded that she elected
to claim, and received, benefits under Ontario’s no-fault benefits scheme and, thereafter,
commenced the Action in Ontario against the tortfeasor and her own insurer. In my view,
she cannot complain now of the consequences of her own election.
[42] Moreover, there is no evidence on the record before this court that the accident
benefits available to Ms. Somers under New York state law, when open to her to claim,
were greater than her entitlement to benefits under Ontario law. Thus, no actual prejudice
to Ms. Somers has been demonstrated as a consequence of her voluntary decision to sue
in this jurisdiction and her voluntary election to apply for, and to accept, Ontario no-fault
benefits. As Tolofson illustrates, denial of the opportunity to claim damages by reason of
the expiration of a limitation period does not constitute injustice sufficient to support an
exception to the lex loci delicti rule. Similarly, in the companion case of Lucas, operation
of a limit on liability by reason of a no-fault tort compensation regime did not meet the
requirement for demonstration of injustice sufficient to depart from the lex loci delicti
rule. Accordingly, the fact that Ms. Somers may no longer pursue accident benefits in
New York state, or additional or different benefits from her own insurer in Ontario, does
not support an exception to that rule in this case.
[43] Ms. Somers also submits that, when the Action was commenced, prevailing
Ontario law provided that the Action would be governed by the laws of Ontario (the lex
fori). She asserts, therefore, that it would be unjust now to apply the lex loci delicti rule.
That argument, in my view, is defeated by the Tolofson decision.
[44] Ms. Somers’ submission rests, in significant part, on the conflict of laws rule
enunciated in McLean v. Pettigrew, [1945] SCR 62, which permitted application of the law
of the forum in specified circumstances. That rule was expressly rejected by the Supreme
Court of Canada in Tolofson, in preference to the lex loci delicti rule. To state the obvious,
the actions in Tolofson and in the companion case of Lucas were commenced years prior
to the release of the Supreme Court of Canada’s decisions in those cases. Nevertheless,
the conflict of laws rule established by Tolofson was held to apply to the rights of the liti-
gants in both actions. This case rests on no different footing.
[45] In addition, prior to the decision in Tolofson, the lex loci delicti rule was applied
in proper cases notwithstanding McLean v. Pettigrew. (See, for example, Grimes v. Cloutier
(1989), 69 OR (2d) 641 (CA); and Prefontaine Estate v. Frizzle (1990), 71 OR (2d) 385
(CA).) Contrary to the argument advanced on behalf of Ms. Somers, therefore, it cannot
be assumed that the substantive law of Ontario would have applied to the Action but for
the decision in Tolofson.
[46] Finally, Ms. Somers contends that application of the lex loci delicti rule to the
Action would create serious procedural problems concerning the assessment of her dam-
ages and the resolution of the pending litigation. She emphasizes that multiple actions
relating to the 1990 accident are outstanding, and that her injuries overlap the two acci-
dents in which she was involved. In my view, that argument has no merit.
[47] Ontario courts are accustomed in contemporary litigation to the need to review
and apply foreign law, where required, and to distinguish among varying legal regimes and
rules in the assessment of liability and damages. Where necessary, the evidentiary basis
to support such distinctions in international cases is provided through admissible opinion
evidence. There is no reason to conclude here, in my view, that the smooth functioning
of the trial of the Action and related litigation, and the ability of the court to properly
assess issues of liability and damages at trial, will be compromised by the need to consider
and apply the substantive law of New York state and the procedural law of Ontario. In
addition, it is not unusual in personal injury actions in Ontario for the courts to be
confronted with the difficulties which sometime arise from the fact that an injured plain-
tiff was involved in more than one accident. That feature of this case is not remarkable.
(4) The Cap on Non-Pecuniary Damages Recognized Under Ontario Law

[48] In a well-known trilogy of cases decided in the 1970s, the Supreme Court of
Canada approved a uniform limit or “cap” on damages in personal injury cases for pain
and suffering and loss of amenities in the amount of $100,000 (Cdn.) in 1978 dollars.
(Andrews v. Grand & Toy Alberta Ltd., [1978] 2 SCR 229; Thornton v. Prince George School
District No. 57, [1978] 2 SCR 267; and Arnold v. Teno, [1978] 2 SCR 287 (collectively, the
“Trilogy”)). Adjusted for inflation, the amount of the cap is now almost three times the
sum set by the Trilogy. As outlined in the Trilogy, the intent of the cap is to provide a
rational justification and stable national basis in Canada for non-pecuniary loss compen-
sation, accepting that non-pecuniary losses and expenses are incapable of direct replace-
ment. (See Andrews v. Grand & Toy Alberta Ltd., at p. 261, per Dickson J.) Only in
exceptional cases may the cap set by the Trilogy be varied.
[49] In the alternative to her submission that an exception to the lex loci delicti rule
should apply to the Action, Ms. Somers argues on her cross-appeal that the motions judge
erred in characterizing Ontario’s cap on non-pecuniary general damages as procedural
in nature. The cap is significant in this case because no upper limit governs an award of
general damages under New York State substantive law. In contrast, if the cap recognized
under Ontario law is procedural in nature, application to the Action of the procedural
law of the forum, in accordance with Tolofson, will operate to impose the cap on any award
of non-pecuniary damages to Ms. Somers.
[50] Ms. Somers submits that the cap is not a matter of procedural law at all. She
contends that it is part of Ontario’s substantive law. Consequently, she argues that under
Tolofson it has no application to claims in the Action for damages for non-pecuniary losses
and expenses.
[51] 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. (See J.-G. Castel and J. Walker in Canadian Conflict of Laws, Looseleaf ed.
(Toronto: Butterworths, 2002), at 6.7 and L. Collins in Dicey and Morris on The Conflict
of Laws (London: Sweet & Maxwell, 2000) at p. 171.)
[52] In Wong v. Wei, supra, the issue to be decided was whether the law of California
(the lex loci delicti) or the law of British Columbia (the lex fori) applied to determine the
heads of damage and the quantification of damages claimed by the injured plaintiffs as a
result of a motor vehicle accident in California. As in this case, the plaintiffs sought to
recover damages in accordance with the law of a foreign jurisdiction (California) because
the law of the forum (British Columbia) included the cap on non-pecuniary damages
established by the Trilogy. No such limit applied in California. After reviewing the applic-
able case law, Kirkpatrick J of the British Columbia Supreme Court concluded (at para. 40):
[I]n my view, it is clear that the weight of current judicial and academic authorities supports
the proposition that the quantification or assessment of damages is a matter of procedural
law to be decided in accordance with the law of the forum. Thus, even if the law of California
applied to the substantive law on the heads of damage, the quantification would nevertheless
be determined according to the law of British Columbia because the quantification of dam-
ages is a procedural matter.
(See also Metaxas v. Galaxias, [1990] 2 FC 400 (FCTD).)

[53] In Australia, it has been held that statutory provisions which limit the amount
of damages which may be recovered in respect of non-economic loss are procedural in
nature. In Stevens v. Head (1993), 67 ALJR 343, while a minority of the High Court of
Australia concluded that a rule which imposes a ceiling on damages is substantive law, a
majority of the court stated (at para. 12, per Brennan, Dawson, Toohey and McHugh JJ):
When a plaintiff is entitled to enforce a civil liability in tort in respect of a tort committed
outside the forum territory, the quantification of damages to be awarded in respect of the
tort is a matter for the law of the forum. The quantification of damages is a matter distinct
from the kind of civil liability in respect of which damages are to be quantified.
The majority concluded that the statutory limit at issue did not pertain to the heads of
liability in respect of which damages might be awarded, but simply related to the quan-
tification of damages.
[54] The issue in Stevens v. Head concerned provisions of the Motor Accidents Act
1988 of New South Wales, which imposed a limitation on awards of damages for non-
economic losses both directly, by limiting the maximum amount which might be awarded,
and indirectly, by reference to two statutory formulae. In respect of those provisions, the
majority of the court concluded (at paras. 13-15):
[Section] 79 is plainly a provision which affects the measure of damages but does not touch
the heads of liability in respect of which damages might be awarded. It is simply a law relating
to the quantification of damages and that … is a matter governed solely by the lex fori.
Sub-section (1) of s. 79, although expressed as a prohibition on an award of damages for
non-economic loss unless the specified condition is satisfied … governs the quantification
of damages for non-economic loss by directing the court not to award any amount, even if
the condition specified in sub-s. (1) is satisfied, unless the amount … exceeds $15,000 or the
relevant amount indexed under s. 80. Sub-section (1) is not properly to be regarded as a
provision which denies the availability of damages under the heading of non-economic loss.
Similarly, sub-s. (4) of s. 79, though expressed as a prohibition on an award of damages for
$15,000 or less … assumes a liability which is susceptible of assessment … . In other words,
sub.-ss. (1) and (4) assume that a common law liability exists but direct the court not to exercise
its jurisdiction to award damages when it finds that the circumstances prescribed by those
respective provisions exist. …
It follows that s. 79 of the Motor Accidents Act is not to be construed as containing sub-
stantive provisions for the purposes of the conflict of law rules governing the assessment of
damages for extraterritorial but intranational torts. Adopting the distinction between heads
of damage and the quantification of damages in respect of heads of damage, s. 79 is a law with
respect to quantification. … [Emphasis added.]
(See also, Goryl v. Greyhound Australian Pty. Limited (1994), 68 ALJR 432 (HC), and
L. Collins in Dicey and Morris on The Conflict of Laws, at pp. 171-172.)
[55] English courts have also recognized a distinction between laws which deny a
remedy in respect of a particular head of damage in negligence (a substantive law) and
those which affect the quantification of damages concerning a particular head of damage
(a procedural law). (See Chaplin v. Boys, [1971] AC 356 (HL); Coupland v. Arabian Gulf
Petroleum Co., [1983] 2 All ER 434 (QB); and Caltex Singapore Pte. Ltd. v. B.P. Shipping
Ltd., [1996] 1 Lloyd’s Rep. 286 (HCJ), overruled on other grounds in Herceg Novi v. Ming
Galaxy, [1998] 4 All ER 238 (CA).)
[56] The cap established by the Trilogy does not bar a claim for damages for pain and
suffering and loss of amenities consequent upon personal injuries sustained in a motor
vehicle accident. In the language of the majority of the court in Stevens v. Head, at paras.
13-15, the cap assumes that liability exists “which is susceptible of assessment,” but directs
the courts to impose an upper limit on the quantum of damages which, as a result of such
assessment, may be awarded to a successful plaintiff in respect of non-pecuniary losses.
[57] In essence, therefore, the cap is a judicially imposed limit or restriction on liability
for non-pecuniary damages. It is a device developed in Canada to avoid excessive and
unpredictable damages awards concerning non-pecuniary losses and the corresponding
burden on society which follows from such awards. In my view, the policy considerations
which support the goal of avoiding such awards, articulated in the Trilogy, favour char-
acterization of the cap as a matter of procedural law. In addressing those policy consider-
ations, it is important to distinguish between the availability of heads of damage and the
quantification of an award of damages in respect of heads of damage.
[58] The amount of the cap can be varied in exceptional circumstances, according to
the facts and equities of the case. In contrast, the heads of damage are the claimed non-
pecuniary losses. In this case, they are pain and suffering, shock and lessened enjoyment
of life and normal activities, as pleaded by Ms. Somers. I conclude that the cap functions
as a limit or restraint on liability to be taken into account in fixing the quantum of dam-
ages otherwise to be awarded in respect of Ms. Somers’ pleaded non-pecuniary heads of
damage, if proven. The cap thus pertains to the procedural, rather than the substantive,
law of Ontario. It applies to the Action as part of the lex fori.
IV. Disposition
[59] Accordingly, for the reasons set out above, I would allow the appeal on the issue
of the choice of law applicable to prejudgment interest and set aside paragraph 2(b) of
the order of the motions judge. In all other respects, I would dismiss the appeal and
cross-appeal and confirm the order of the motions judge. As success on this appeal has
been divided, I would award no costs of the appeal. Fournier and Liberty Mutual are
entitled to their costs of the cross-appeal on a partial indemnity basis. This court was
informed upon completion of oral argument in this hearing that the parties had agreed
upon the costs of the appeal and cross-appeal, but the agreed-upon amount for costs was
not disclosed. Accordingly, in order to comply with the rule that now requires this court
to fix costs, Fournier and Liberty Mutual are to file their written submissions concerning
the costs of the cross-appeal, reflecting the costs thereof as agreed upon among the parties,
within 10 days from the release of this court’s decision.
Appeal allowed in part; cross-appeal dismissed.
NOTES
1. The restrictive approach taken in this case to the “international exception” suggested
by La Forest J in Tolofson was based on the Ontario Court of Appeal’s earlier decision in Wong
v Lee (2002), 58 OR (3d) 398 (CA) (cited by Cronk JA in para 34). The tort claims in that case
arose out of a single-vehicle accident in New York. The injured passenger, the driver, and the
owner of the car were all resident in Ontario, where the vehicle was registered and insured
with an Ontario insurer. The court held that there were no grounds for invoking the “inter-
national exception” so as to apply the substantive law of Ontario to the victim’s claims. The
majority reasons in that case are outlined in Somers. Borins JA dissented in Wong because he
II. Particular Tort Claims 677
thought that the Supreme Court of Canada’s intent in Tolofson must have been to leave trial
judges with a meaningful discretion in international cases, and the effect of the majority’s
decision was to reduce that discretion to practically none at all. The rigidity of the lex loci
delicti rule has led the Manitoba Law Reform Commission to propose legislating a flexible
exception for both domestic and international cases, allowing departure from the lex loci
delicti if “the issues in tort are more closely connected with another country”: Manitoba Law
Reform Commission at 8-9. Similar views are expressed by Walker (2000) and Pitel & Harper.
2. On the point that the “cap” on non-pecuniary damages was a rule of Ontario proced-
ural law, contrast how the issue was handled in Edwards v Erie Coach Lines Co, 952 NE (2d)
1033 (NY Ct Apps 2011), discussed above in the note following Babcock v Jackson.
II. PARTICULAR TORT CLAIMS

A. Products Liability
The most important Canadian conflicts case on products liability is Moran v Pyle National
(Canada) Ltd, [1975] 1 SCR 393, 43 DLR (3d) 239 (reproduced in Chapter 6). It dealt with the
issue of where a tort is committed for the purposes of the service ex juris rules based on a
tort having been committed in the province. Its reasoning with respect to the appropriate-
ness of taking jurisdiction was a major influence on the jurisdictional criterion of “real and
substantial connection” that was developed in Morguard Investments Ltd v De Savoye, [1990]
3 SCR 1077 (reproduced in Chapter 3). It is clear from Moran v Pyle that a tort can have more
than one locus for the purposes of serving as a basis for jurisdiction. The court was careful,
however, to point out that the issue of locus in the context of jurisdiction was distinct from
that of locus in the context of choice of law.
If a product is negligently manufactured in country A and sold through the normal chan-
nels of trade to an ultimate consumer in country B who is injured by the product, should tort
liability—or particular issues relating to it—be governed by the law of A or the law of B?
Suppose an American asbestos producer makes its product in an American state that
imposes strict liability for asbestos injuries. There is no negligence in manufacture or in a
failure to warn. The product passes through normal channels of trade to British Columbia
and causes injury there. Under British Columbia law the manufacturer is liable only if it was
negligent. Should the manufacturer be liable or not? What if the law – fact pattern is reversed
and the product is exported from a negligence state to a strict liability state? Whose law
should apply then? Consider how this type of problem might be handled under Tolofson v
Jensen, and under the American governmental interest approach (or approaches) and the
“better law” concept. Does the Supreme Court of Canada’s emphasis in Moran v Pyle—on the
interest that the province of injury, Saskatchewan, had in enabling the victim to seek redress
in its courts—point to a solution? If these questions seem intractable, take comfort from the
fact that the choice of law approach in the United States, with a huge volume of such litiga-
tion, “remains very much in a state of flux”: Hay, Borchers & Symeonides at 1028.
Rome II, the European Communities Regulation dealing with non-contractual liability,
which took effect in January 2009, includes in art 5 a special rule on products liability that,
like Moran v Pyle, gives weight to whether the defendant could foresee that the product
would be marketed in the jurisdiction the law of which is sought to be applied. Recall that
art 4(2), referred to in the opening phrase of art 5(1), says that if both the defendant and the
plaintiff have their habitual residence in the same country when the damage occurs, the law
of that country shall apply. The provision reads as follows:
1. Without prejudice to Article 4(2), the law applicable to a non-contractual obligation aris-
ing out of damage caused by a product shall be:
(a) the law of the country in which the person sustaining the damage had his or her
habitual residence when the damage occurred, if the product was marketed in that country;
or, failing that,
(b) the law of the country in which the product was acquired, if the product was mar-
keted in that country; or, failing that,
(c) the law of the country in which the damage occurred, if the product was marketed in
that country.
However, the law applicable shall be the law of the country in which the person claimed to be
liable is habitually resident if he or she could not reasonably foresee the marketing of the product,
or a product of the same type, in the country the law of which is applicable under (a), (b) or (c).
2. Where it is clear from the circumstances of the case that the tort/delict is manifestly more
closely connected with a country other than that indicated in paragraph 1, the law of that other
country shall apply. A manifestly closer connection with another country might be based in
particular on a pre-existing relationship between the parties, such as a contract, that is closely
connected with the tort/delict in question.
Provincial consumer warranty legislation may impose obligations on out-of-province

manufacturers or suppliers of products. The basis for the imposition of liability will usually
be that the goods are marketed in the province on behalf of or with the knowledge of the
manufacturer or supplier: see s 27 of the Consumer Product Warranty and Liability Act, SNB
1978, c C-18.1, as amended by SNB 2007, c 8, s 1; Walker (2005) at para 35.9.e.
B. Fraudulent or Negligent Misrepresentation

As with products liability, the only extensive consideration given to the private international
law aspects of misrepresentation has been in the context of disputes as to service ex juris.
Moran v Pyle National (Canada) Ltd, above, implies that, for jurisdictional purposes, tortious
misrepresentation, whether fraudulent or negligent, will usually be deemed to be commit-
ted in the country where the misrepresentation was received and acted on, because that
country is substantially affected by the wrong and the law of that country ought to have
been in the contemplation of the wrongdoer: see Canadian Commercial Bank v Carpenter
(1989), 62 DLR (4th) 734 (BCCA).
Would the choice of law issue likewise be resolved in favour of the country where the
plaintiff heard and acted on the misrepresentation? For example, in Central Sun Mining Inc v
Vector Engineering Inc, 2013 ONCA 601, American engineering consultants provided reports
to the plaintiff at its office in Vancouver concerning the operation of the plaintiff’s mine in
Costa Rica. Technical staff at the Vancouver office made recommendations to the head office
in Toronto, which acted on them in making key decisions about the Costa Rica mine. After a
major landslide put the mine out of business, the plaintiff sought to sue the consultants in
Ontario for giving negligent professional advice. The court held that the pleaded tort of
negligent misrepresentation was committed in Ontario for jurisdictional purposes. If the
issue had been choice of law, would the applicable law be that of Costa Rica, British Colum-
bia, or Ontario?
C. Economic Torts
For a discussion of where economic loss is localized, see Lehmann.
1. Inducing Breach of Contract

For jurisdictional purposes, following Moran v Pyle National (Canada) Ltd, above, it has been
held that acts done outside the province with the aim of inducing an out-of-province party
to break a contract with a party in the province can be a tort committed in the province. The
province is substantially affected by the wrong and the law of the province ought to have
been in the reasonable contemplation of the inducing party: see Ichi Canada Ltd v Yamauchi
Rubber Industry Co (1983), 144 DLR (3d) 533 (BCCA). It is worth noting that in Ichi Canada Ltd
the performance by the party in breach was to have been in Japan, but the tort of inducing
the breach of that obligation was held to have been committed in British Columbia for the
purposes of the service ex juris rule.
The choice of law aspect of inducing breach of contract was raised in Banco do Brasil SA v
The Alexandros G Tsavliris, [1992] 3 FC 735 (CA), aff’g [1990] 3 FC 260 (TD). A bank, through
solicitors in London, was alleged to have made threats to have a ship arrested in Panama,
which induced the shipowners to break their contract with the charterers by diverting the
ship around Cape Horn. The charterers’ action against the bank was dismissed because
according to Canadian law, as lex fori, the bank’s conduct was justified. The locus delicti was
assumed to be London. The lex fori was applied, of course, under the Phillips v Eyre rule. After
Tolofson v Jensen, which rejected a role for the lex fori in tort choice of law, would the issue of
liability be resolved according to English law? Would the proper law of the charterparty be
relevant or the law of the flag of the ship?
In Daebo Shipping Co Ltd v Ship Go Star, [2011] FCA 1015, Daebo, a South Korean company,
had subchartered a Maltese-registered ship from Nanyuan, another South Korean company
that itself possessed the ship under a subcharter. Daebo claimed that the shipowner, a Greek
company called Go Star, had induced Nanyuan to break the subcharter to Daebo by wrong-
fully giving Nanyuan notice of withdrawal of the ship. At the time of the alleged inducement
the ship was in Chinese waters. The Federal Court of Australia held that the tort was commit-
ted, for choice of law purposes, in China, mainly because Go Star had emailed notice of
withdrawal of the ship to Nanyuan at a Chinese email address and intended Nanyuan to rely
and act on the notice in China in relation to a vessel located there. Chinese law did not have
a tort of unlawful interference with contractual relations, so the action failed.
2. Conspiracy
As with the other torts just discussed, the locus of the tort of conspiracy will be determined
for jurisdictional purposes by whether the province was substantially affected by the con-
spiracy (usually because a substantial part of the damage was suffered there) and whether
the law of that province was within the reasonable contemplation of the alleged wrongdoer:
see Petersen v AB Bahco Ventilation (1979), 107 DLR (3d) 49 (BCSC). The acts furthering the
common purpose can take place in various countries, and the damages can be suffered in
yet more countries, so the problem of choice of law could be acute.
3. Passing Off
Passing off does not present acute choice of law problems because the tort is effectively
localized in a country. The claim is for damage to the goodwill attaching to the plaintiff’s
services or products in a particular market. If that market is in the forum country, it is almost
certainly the law of the forum that determines whether the elements of the tort—existence
of goodwill, misrepresentation, and damage—are made out. If the plaintiff’s business is
located in another country, the plaintiff can still have an action if there is valuable goodwill
among the local population who might travel to that other country and buy services or
goods from the plaintiff. The best recent example, also discussing the earlier cases, is Triple
Five Corporation v Walt Disney Productions, 1994 ABCA 120, 113 DLR (4th) 229.
It may be possible to sue in country A for passing off in a market in country B, but it is hard
to imagine any law other than that of country B governing the issues relating to liability,
including whether the plaintiff is the person legally entitled to the goodwill attaching to that
service or product in country B. In James Burroughs Distillers Plc v Speymalt Whisky Distrs Ltd,
[1989] SLT 561 (Ct Sess), a claim brought in Scotland for passing off Scotch whisky in Italy
failed because Italian law conferred the right of action on the distillery, not the plaintiff,
which had the United Kingdom trademark rights to the brand of whisky in question.
D. Torts Involving Interference with Property

Torts for negligently or intentionally interfering with immovable or tangible movable prop-
erty are usually easily localized at the place where the property is situated. Even in the rare
case in which the wrongful act takes place in a different jurisdiction, the location of the
property is probably still the weightiest factor in determining the lex loci delicti for the pur-
pose of choice of law: see Coady v Quadrangle Holdings Ltd, 2015 NSCA 13, a claim for conver-
sion of shares represented by a share certificate. The applicable law was that of the province
where the certificate was wrongfully dealt with by the broker, not the province from which
the converting party gave the broker instructions.
E. Nuisance and Environmental Damage

Pollutants and other nuisances that cross boundaries may give rise to choice of law prob-
lems, but they hardly appear in the law reports. One reason is the rule, still more or less in
place in Canada, that a court has no jurisdiction to hear a claim for tortious damage to
immovable property outside the province. This is based on the possibility that the court
might have to address the issue of title to that property, something that, traditionally, only
the courts where the property is situated are deemed to have power to do: see further the
discussion of jurisdiction in Chapter 14. Thus nuisance actions will usually have to be
brought in the province where the land is situated and it would be exceptional for the court
to apply any law but its own under those circumstances.
Assuming that the jurisdictional problem could be overcome, suppose province A, where
the land is situated, attaches liability to the nuisance or pollution, but province B, where the
defendant’s act or omission took place, does not. Is the defendant liable in either province?
This issue has come up in the context of whether province A has the constitutional power to
impose liability for damage done within its borders by pollutants that were legally discharged
into rivers in a neighbouring province. The Supreme Court of Canada thought not, because
province A would be legislating in pith and substance on civil rights outside the province:
see Interprovincial Co-operatives Ltd v R, [1976] 1 SCR 477; on the constitutional aspects, see
Chapter 3. In his dissenting judgment, Laskin CJ said that whether Manitoba (province A)
had legislated extraterritorially depended on whether Manitoba law was applicable to the
proposed wrong as a matter of choice of law. He thought that as a matter of choice of law
the tort should be viewed as having taken place in Manitoba, and therefore subject to
Manitoba law, because of “Manitoba’s predominant interest in applying its own law … to the
question of liability for injury in Manitoba to property interests therein” (at 500). The majority
did not base its decision directly on choice of law, but assumed that the place of acting was
the primary criterion for deciding whether the imposition of liability was extraterritorial.
F. Defamation
Defamation is another tort in which the country or countries where the defendant acted are
different from the country or countries where the harm was done. An additional complica-
tion is that, in theory, each publication of the defamatory material constitutes a separate
tort. Based on this rule, publication in the province has been held to mean that the tort was
committed in the province for jurisdictional purposes: see Jenner v Sun Oil Company Limited,
[1952] OR 240, [1952] 2 DLR (2d) 526 (SC) and Pindling v National Broadcasting Corp (1984), 49
OR (2d) 58, 14 DLR (4th) 391 (H Ct J).
Éditions Écosociété Inc v Banro Corp

2012 SCC 18, [2012] 1 SCR 636
[Banro, an Ontario-headquartered mining company, sued Éditions Écosociété, a Quebec-

based publisher, in Ontario for alleged defamation contained in a book, Noir Canada:
Pillage, corruption et criminalité en Afrique. The book was alleged to accuse Banro of
human rights violations and fraud in connection with its mining operations in the Demo-
cratic Republic of the Congo. Two French editions of the book were printed. Of the 5,000
copies printed, 93 were distributed to bookstores in Ontario and some copies were avail-
able in Ontario public libraries. The book could also be purchased on the publisher’s
website. In litigation in Ontario, the issues were whether the Ontario court had jurisdic-
tion simpliciter, to which the Supreme Court of Canada answered “yes,” and whether the
Ontario court should decline jurisdiction on the basis of forum non conveniens, to which
the court answered “no.” One of the factors relevant to the forum non conveniens question
was whether Banro’s claim was governed by the law of Ontario or the law of Quebec.
LeBel J’s analysis on the choice of law point follows.]
LeBEL J:
[49] One factor that must be considered in the forum non conveniens analysis is the
law applicable to the tort. Restricting the available choice of laws might be a way to curb
forum shopping. Indeed, there would be little strategic advantage to forum shopping if
the conflicts rules were to require application of the same law regardless of where the
matter is tried.
[50] In Tolofson v. Jensen, [1994] 3 SCR 1022, La Forest J. established lex loci delicti,
or the place where the tort occurred, as a general principle for determining choice of law
for torts. However, La Forest J. also left room for the creation of exceptions to the general
rule of lex loci delicti for torts such as defamation. The rationale for the rule is that in the
case of most torts, the occurrence of the wrong constituting the tort is its most substantial
or characteristic element, and the injury or consequences are typically felt in the same
place. In establishing lex loci delicti as a general rule, however, La Forest J. also recognized
that “[t]here are situations … notably where an act occurs in one place but the conse-
quences are directly felt elsewhere, when the issue of where the tort takes place itself raises
thorny issues. … Difficulties may also arise where the wrong directly arises out of some
transnational or interprovincial activity” (p. 1050).
[51] La Forest J. suggested that in such cases, “it may well be that the consequences
would be held to constitute the wrong” (p. 1050). Significantly, La Forest J. went so far as
to suggest without deciding that the tort of defamation may be just such a case: “[I]t could
well be argued … that, unlike a motor vehicle accident [the tort at issue in Tolofson], the
tort of libel should be held to take place where its effects are felt” (p. 1042). La Forest J.
thus left room for the creation of exceptions to the general rule of lex loci delicti for torts
such as defamation.
[52] The defendants argue against the application of lex loci delicti here. They submit
that the Ontario court should have declined to exercise its jurisdiction because Quebec
is the place of the most substantial publication, and therefore Quebec law is applicable.
The defendants cite Olde v. Capital Publishing Ltd. Partnership (1996), 5 CPC (4th) 95
(Ont. Ct. (Gen. Div.)), aff ’d (1998), 108 OAC 304, as standing for the proposition that we
should look to the standard of substantial publication to determine the centre of gravity
of the tort, and identify the most convenient forum on that basis. If I understand the
argument, Ontario could assume jurisdiction on the basis that the tort occurred there;
Ontario defamation law uses the traditional common law standard of publication, but
substantial publication would be considered to determine whether Ontario should, in
fact, exercise its jurisdiction based on whether or not its law would be applicable.
[53] The defendants’ argument is not persuasive. First, there is a factual difference
between Capital Publishing and the present case. In Capital Publishing, the libellous
material was published in a magazine distributed mainly in the United States; the record
showed that only one copy of the magazine was purchased in Ontario, while the vast
majority were sold in the United States (para. 3). In the present case, the majority of copies
were indeed distributed in Quebec, but the number of copies available in Ontario remains
substantial. Moreover, there is evidence that Écosociété actively promoted its book in
Ontario, unlike the situation where a copy of the libellous material is accessed by hap-
penstance in the forum of choice.
[54] Second, and as the English experience demonstrates, the substantial publication
requirement provides both courts and litigants with little guidance (see D. Price, K. Duodu
and N. Cain, Defamation: Law, Procedure & Practice (4th ed. 2009), at p. 448). One can
easily imagine a publication, such as a bestselling novel, being substantially published in
more than one jurisdiction, in which case, the problem of forum shopping and the mul-
tiplicity of jurisdictions would remain.
[55] More fundamentally, however, the use of the substantial publication requirement
in England reflects England’s merits-based approach to the assumption of jurisdiction,
which is arguably inconsistent with the Canadian approach of treating jurisdiction sep-
arately from the merits of a claim. The defamation law of Canada has not adopted the
substantial publication standard. In Canada, the evidentiary standard for proving publica-
tion remains the traditional common law standard, according to which a single instance
of publication is sufficient for the tort to crystallize. To adopt the standard of substantial
publication in the context of private international law would amount to a significant
change in the substantive tort. It would be anomalous to adopt a new standard in the
context of private international law but to continue applying the traditional standard in
the context of the substantive tort.
[56] While the defendants’ approach cannot be accepted, the question of whether the
lex loci delicti represents the proper rule for choice of law in defamation remains. Although
I need not decide the question in this case, I note that one possible alternative to the lex
loci delicti in defamation cases, which has gained some significant support, may be the
place of most substantial harm to reputation.
[57] It is well settled in Canadian law that the tort of defamation occurs upon publica-
tion to a third party—that is, when the allegedly defamatory material is read or down-
loaded by someone other than the plaintiff or the publisher. On the other hand, it is also
clear that the harm occasioned by the publication of a defamatory statement is not the
publication itself, but rather injury to the plaintiff ’s reputation. While the constitutional
right to the protection of freedom of expression must be upheld in the crafting of the law
of defamation, this Court has recognized that one of the primary purposes of the law of
defamation is to protect the reputation of the individual, which was elevated to quasi-
constitutional status in Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130:
Although it is not specifically mentioned in the Charter, the good reputation of the individual
represents and reflects the innate dignity of the individual, a concept which underlies all the
Charter rights. It follows that the protection of the good reputation of an individual is of
fundamental importance to our democratic society.
Further, reputation is intimately related to the right to privacy which has been accorded
constitutional protection. … The publication of defamatory comments constitutes an invasion
of the individual’s personal privacy and is an affront to that person’s dignity. [paras. 120-21]
[58] The importance of place of reputation has long been recognized in Canadian
defamation law. For example, the importance of permitting plaintiffs to sue for defamation
in the locality where they enjoy their reputation was recognized by the Ontario High
Court in Jenner v. Sun Oil Co., [1952] 2 DLR 526. In that case, McRuer CJHC found that
the plaintiff would not be able to satisfactorily “clear his good name of the imputation
made against him” other than by suing for defamation in the locality where he enjoyed
his reputation—that is, where he lived and had his place of business and vocation in life
(pp. 538 and 540).
[59] The approach adopted by McRuer CJHC is consonant with the one recently
adopted in Australia (see for example the Defamation Act 2005 (Qld.)). Prior to 2005, the
choice of law rule for the tort of defamation in Australia was lex loci delicti, as in Canada.
In 2004, acting on the recommendations of the Australian Law Reform Commission, the
Attorneys General of Australia’s States and Territories agreed to enact model provisions
which included a defamation-specific choice of law rule. In cases where a matter is pub-
lished in more than one Australian jurisdictional area, the rule establishes that the
applicable law is that of the jurisdictional area most closely connected to the harm occa-
sioned by the publication as a whole. In determining which jurisdictional area has the
closest connection with the harm, courts may take the following factors into account:
(a) the place at the time of publication where the plaintiff was ordinarily resident or, in
the case of a corporation that may assert a cause of action for defamation, the place
where the corporation had its principal place of business at that time; and
(b) the extent of publication in each relevant Australian jurisdictional area; and
(c) the extent of harm sustained by the plaintiff in each relevant Australian jurisdictional
area; and
(d) any other matter that the court considers relevant.
(Defamation Act 2005, s. 11(3))

[60] The Australian Law Reform Commission’s recommendations were motivated by
a concern that applying the lex loci delicti rule to such claims would encourage forum
shopping (Law Reform Commission, Report No. 11 Unfair Publication: Defamation and
Privacy (1979), at pp. 190-91). Concern about “forum shopping” has increased in recent
years, not only in Australia, but also in England, the United States and Canada. There
have been calls for the adoption in this country of an approach similar to the Australian
one. In particular, if Canadian courts are not ready to accept the proper law of the tort as
a rule of conflicts in defamation cases, Professor Castel has suggested the following:
For choice of law purposes, the tort of defamation should be deemed to be committed where
the plaintiff suffered the most injury to his or her reputation, that is, where substantial damage
occurred. Only one law would be relevant. For jurisdiction purposes, the plaintiff should be
given a wide choice depending upon the circumstances and provided that the court hearing
the case applies the proper law and not its own law as a matter of principle.
(J.-G. Castel, “Multistate Defamation: Should the Place of Publication Rule be Abandoned
for Jurisdiction and Choice of Law Purposes?” (1990), 28 Osgoode Hall L.J. 153, at p. 177
(emphasis in original); see also C. Martin, “Tolofson and Flames in Cyberspace: The
Changing Landscape of Multistate Defamation” (1997), 31 U.B.C.L. Rev. 127, at pp. 149
and 158.)
[61] It should be emphasized that this proposal would not result in a change to the
substantive tort of defamation. Rather, the approach already adopted in Australia and
recommended by Professor Castel appears to reflect the view that when it occurs at a
multistate level, the elements of the tort of defamation play different roles when the rules
of jurisdiction are applied than they do when the rules of choice of law are applied. In
Professor Castel’s opinion, “rules of jurisdiction and of choice of law address different
concerns and … the test of place of publication should not always be used for both pur-
poses” (p. 154).
[62] In the case at bar, whether we apply the lex loci delicti rule or consider the location
of the most substantial harm to reputation, the applicable law is that of Ontario and not
Quebec. As a result, whichever approach is adopted, this factor favours Ontario in the
forum non conveniens analysis. In this case, nothing turns on the question of whether lex
loci delicti ought to be abandoned as the choice of law rule in multijurisdictional defama-
tion cases. For this reason, I believe it prudent to leave this issue for another day.
NOTE
Breeden v Black, 2012 SCC 19, [2012] 1 SCR 666, decided at the same time as Éditions Écosociété,
was also a jurisdiction case involving libel claims. Black, who had lived much of his life in
Ontario and was well known there, was at the time of the decision serving a prison sentence
in the United States and it was not certain whether, having given up his Canadian citizenship,
his conviction would preclude his return to Canada. In discussing, as part of a forum non
conveniens analysis, whether Ontario law would apply to the libel claim, the Supreme Court
of Canada referred to its dicta in Éditions Écosociété and, as in that case, held that Ontario law
would apply irrespective of whether one applied the traditional lex loci delicti rule or the
“most substantial harm to reputation” approach. LeBel J noted at para 33 that Black had
undertaken not to bring any libel action in any other jurisdiction and had limited his claim to
damage to his reputation in Ontario. “As a result,” said LeBel J, “only harm resulting from
publication in Ontario need be considered.” He nevertheless also based his conclusion as to
where the most substantial harm occurred on the evidence of Black’s many connections
with Ontario and his extensive reputation there: see Castel (2013) for a discussion of the Can-
adian choice of law rules in defamation in the light of these two cases.
G. Statutory Tort Claims

A choice of law issue can arise because the plaintiff’s claim is based on a liability created by
statute. A familiar example of a statutory cause of action in tort is the right to recover dam-
ages under fatal accidents statutes for loss stemming from the death of a spouse or parent.
In Ontario, the dependants’ right of action extends to cases where the family member is not
killed but injured: see Family Law Act, RSO 1990, c F.3, s 61. If the death or injury of the family
member takes place in province A, can a dependant who lives in province B claim a right of
action in respect of the death or injury when that right exists only under the law of province B?
The answer seems to be no, because the dependant’s claim is seen as derivative from the
wrong done to the family member, which is governed by the lex loci delicti: see Bowes v Chali-
four (1992), 18 CPC (3d) 391 (Ont Gen Div); Bouchard v JL Le Saux Ltee (1984), 48 OR (2d) 799
(H Ct J), rev’d on other grounds (1986), 58 OR (2d) 124 (CA); Cox v Ergo Versicherung AG, [2014]
UKSC 22. In fact, an attempt by province B to give the dependant a right of action in respect
of an accident in another province may be constitutionally invalid on the ground of extrater-
ritoriality: see Moran v Pyle National (Canada) Ltd, [1975] 1 SCR 393 at 396.
Compare the technique that is typically used in workers’ compensation statutes. Taking
the Workers’ Compensation Act, RSBC 1996, c 492 as an example, the basic coverage is for
death or injury arising out of employment in an industry within the scope of the Act (s 5(1)),
“industry” being defined (s 1) as “establishment, undertaking, work, trade and business.”
That implicitly refers to an establishment, etc., located in the province, and so the death or
injury referred to must likewise arise out of an accident in the province. But the Act extends
coverage to workers injured outside the province if four conditions are fulfilled (s 8(1)). These
conditions are, essentially, that (1) the employment relationship is centred in the province,
(2) the employee has to work both in and out of the province, (3) the out-of-province work has
immediately followed in-province work for the same employer, and (4) the out-of-province
work has lasted less than six months. If compensation is also available under the law of the
place of the accident, the worker or his or her dependants must elect under which jurisdiction’s
law they will claim (s 9). In this way, a right to claim benefits for extraprovincial accidents is
limited to a case where virtually all the connections in the case, aside from the place of the
accident, are with the province.
After Tolofson v Jensen, can a person sue in province B on a statutory cause of action that
exists only in province A if the relevant events happened in province A? While Phillips v Eyre
lasted, such actions were precluded by the rule that the wrong had to be actionable by the
lex fori. Compare Exco Corp Ltd v Nova Scotia Savings & Loan Co (1987), 78 NSR (2d) 91 (SCTD),
where one Nova Scotia company, unsuccessfully, tried to sue another Nova Scotia company
in Nova Scotia for infringements of the Ontario Securities Act. Could such an action now be
brought? See Pearson v Boliden Ltd, 2002 BCCA 624, 222 DLR (4th) 453, reproduced in part in
Chapter 13.
III. PARTICULAR ISSUES IN TORT CASES

Problems can arise with respect to certain issues relating to tort liability. These problems
usually have to do with whether the issue should be characterized as a tort issue or as some-
thing else.
A. Tort Claims Connected to Contracts

What law governs the issue whether tort liability has been validly excluded by a provision in
a contract? Is it the law governing the tort liability itself (presumably the lex loci delicti) or is
it the proper law of the contract? The old case of Canadian Pacific Rlwy Co v Parent, [1917] AC
195 (PC) pointed in the direction of the former, but Sayers v International Drilling Co NV, [1971]
1 WLR 1176 (CA) held in favour of the latter. The question is one of characterization of the
issue. If the bar to a tort action is an express exclusion of liability in the contract, the effect of
that exclusion seems logically to depend on the proper law of the contract, as Sayers held. It
can be argued that there are really two issues: first, whether the exclusion of liability is valid
as a matter of contract law and, second, whether the exclusion of liability is permissible as a
matter of tort law. On this view, even if the proper law of the contract says the exclusion is
valid, the lex loci delicti (assuming that is the law governing tort liability) may still deny effect
to such an exclusion as a matter of tort policy: see Collins at para 35-139. If the bar arises not
out of a specific provision of the contract but out of the existence of a particular kind of
relationship, such as an employment relationship, the issue seems more naturally character-
ized as one relating solely to tort. This is because it concerns the inherent scope of tort liabil-
ity rather than the contractual limitation of it. In Johnson v Coventry Churchill Int’l Ltd, [1992]
3 All ER 14 (QBD), the issue was whether an English carpenter who was injured while working
on a project in West Germany was barred from suing his employer by a West German rule
(which was tied to an accident compensation scheme) that barred such a claim. The question
was analyzed in terms of tort choice of law and the action was allowed by way of exception
to the general rule (the English version of Phillips v Eyre) that required actionability by the lex
loci delicti.
III. Particular Issues in Tort Cases 687
B. Contributory Negligence and Multiple Tortfeasors

There is little doubt that the extent to which a plaintiff’s right of recovery is reduced by the
plaintiff’s own negligence is a matter of substantive law and so governed by the law that
governs the defendant’s liability, presumably the lex loci delicti: see Collins at paras 34-055
and 35-139. So, if contributory negligence is a complete bar by the lex loci delicti, the plain-
tiff’s cause of action will be defeated: cf Brown v Poland (1952), 6 WWR (NS) 368 (Alta SC) and
LaVan v Danyluk (1970), 75 WWR 500 (BCSC). Similarly, if the plaintiff’s harm was caused by
two or more tortfeasors, the plaintiff’s right to recover from any of them must logically
depend on the law that governs that particular defendant’s liability to the plaintiff for his or
her act or omission. If two or more defendants are jointly and severally liable, the right of one
defendant to contribution from the others is probably best characterized as a restitutionary
right, not a tort right, and so governed by the proper law of the restitutionary obligation
(which will almost certainly be the lex loci delicti if the wrongdoers’ respective torts were
committed in the same country): see Collins at para 36-107.
C. Interspousal Immunity
The only issue with respect to interspousal immunity is whether it ought to be characterized
as an aspect of the marriage relationship rather than as a tort defence. If the former is the
better view, the law to determine whether one spouse is immune from suit by the other
spouse will be the law that governs the rights arising from the marital relationship. That will,
presumably, be the law of the parties’ domicile (assuming they have a common domicile),
which may be different from the law that governs the tort liability issues, probably the lex
loci delicti. If the question is put in terms of which legal system has the greater interest in the
issue, that of the domicile or the lex loci delicti, the answer would clearly seem to be that of
the domicile. This is the solution favoured in the United States: see Restatement (Second) of
Conflict of Laws (1971), §169.
D. Damages
The traditional distinction between the substantive rules of damages, such as causation and
heads of damage, and the assessment of damages as procedure is discussed in Somers v
Fournier, reproduced above: see further the materials on damages in Chapter 11, Section III.B.
E. Vicarious Liability
Vicarious liability may be a product of common law rules—for example, an employer’s liabil-
ity for the torts of an employee—or of statute. There seems little doubt that vicarious liability
rules are to be characterized as substantive, not procedural: see Boyd v Wray; O’Connor v
Wray, [1930] SCR 231 and The Mary Moxham (1876), 1 PD 107 (CA). Donald v Huntley Service
Centre Ltd (1987), 61 OR (2d) 257, 42 DLR (4th) 501 (H Ct J) applied the Ontario statutory rule
imposing vicarious liability on a car owner for the negligence of a driver of the car to a Que-
bec car accident, explaining that vicarious liability was a question of “remedy.” As an abstract
proposition this seems inconsistent with principle, although the result in the case itself can be
explained as a curious side-effect of the rule in Phillips v Eyre, now abandoned. Nevertheless,
is the relevant rule necessarily that of the lex loci delicti (assuming that is the law determining
tort liability)?
Bagg v Budget Rent-A-Car of Washington-Oregon, Inc (1989), 35 BCLR (2d) 36 (CA) raises the
issue very well. The accident took place in the Rockies, just on the British Columbia side of
the British Columbia – Alberta boundary. The plaintiffs were a couple resident in Colorado
and a Massachusetts resident. They were travelling into British Columbia and planned to stay
a week. Their car collided with a rental car registered in the state of Washington and rented
there to a man domiciled in Japan. That man, who was killed in the accident along with his
wife, was driving in the opposite direction to the plaintiffs. The question arose whether the
plaintiffs’ action lay only against the estate of the Japanese driver or extended to Budget
Rent-A-Car of Washington-Oregon, Inc. If only the driver were liable, recovery would be lim-
ited, for practical purposes, to the insurance that formed part of his rental contract. If Budget
were vicariously liable, the plaintiffs had an avenue for recovery beyond the insurance limits.
Under Washington or Colorado law, Budget was not vicariously liable; under British Colum-
bia law, it was because the Motor Vehicle Act, RSBC 1979, c 288, s 79 made the owner vicari-
ously liable for the negligence of a person who drives the car with the owner’s consent. The
British Columbia Court of Appeal concluded that, on the facts of the case, British Columbia
law ought to apply to the question. Macdonald JA said, at 44:
It is irrelevant that the respondents [plaintiffs] had only been in British Columbia for a few
minutes and the Kobayashi [deceased driver’s] family only a few kilometres away from the
Alberta border when the accident occurred. The respondents were travelling west on Highway
16 and planned to spend about one week’s vacation in this province. The facts … show that
Budget had a relationship with British Columbia. As it expected, hundreds of Budget’s rented
vehicles came into this jurisdiction annually. Contemplating that situation it filed here a finan-
cial responsibility certificate pursuant to s. 97 of the Motor Vehicle Act. It insured itself against
vicarious liability which might be imposed by the laws of this province.
Although it decided to apply British Columbia law, the Court of Appeal entertained the
possibility that an issue relating to a tort committed in British Columbia, such as vicarious
liability, might be governed by the law of another jurisdiction. Consider whether Tolofson v
Jensen now forecloses that possibility.
F. Subrogated Claims
In common law jurisdictions, subrogation is the right recognized in equity whereby A, who
has indemnified a victim B for a loss for which C is legally responsible (as wrongdoer or
debtor), is entitled to sue C in B’s name and recoup the amount of the indemnity from any
amount recovered from C. Through subrogation, an insurer, for example, becomes in effect
the owner in equity of an interest in the chose in action represented by the insured’s tort
claim, equal to the amount of the indemnity. What law governs the existence and extent of
a right of subrogation?
This is actually an issue, not of tort choice of law, but of the transfer of an interest in intan-
gible movable property—namely, a chose in action: see generally Chapter 15. It is noted
here because it nearly always arises in connection with an insurer’s subrogation to a tort
claim, whether arising by contract or statute. The most extensive consideration of the choice
of law issue with respect to rights of subrogation is found in Brown v Régie de l’assurance
automobile du Québec (1990), 107 NBR (2d) 111, 71 DLR (4th) 457 (CA). The plaintiffs in that
case were residents of Quebec who were injured in an accident in New Brunswick. They
obtained benefits under the Quebec no-fault insurance scheme. The Quebec legislation
provided that, if benefits were paid to a victim of an out-of-province accident, the statutory
body in question (the régie) was subrogated to the victim’s rights and was entitled to recover
the amount it had paid from the person who was liable for the accident under the law of the
place where the accident occurred. The court held that in so far as the Quebec law created a
right of subrogation, it should be applied, since “subrogation is a private matter between the
victim and the compensating party” (at 461), and the relationship between the victims and
the régie was governed by Quebec law. But, in so far as the law created an independent
cause of action in favour of the régie, it was not applicable because New Brunswick law, as
the lex loci delicti, determined the causes of action that arose from the accident. The only
causes of action recognized by New Brunswick law were those of the victims. The régie was
therefore restricted to enforcing the victims’ claims by way of subrogation. It could only do
this by suing in the victims’ names, since the manner of implementing a right of subrogation
was a question of procedure. Brown was followed in Cowley v Brown Estate, 1997 ABCA 198,
147 DLR (4th) 282, which likewise gave effect to a statutory right of subrogation in favour of
the government of another province in its capacity as hospital and medical insurer of a vic-
tim injured in Alberta. The Ontario courts have likewise held (without reference to the earlier
cases) that the right of subrogation of an insurer is to be characterized as contractual in
nature and so governed by the proper law of the insurance contract: Kingsway General Insur-
ance Co v Canada Life Assurance Co (2001), 149 OAC 303 (CA). As in Brown and Cowley, this
approach was also held to apply to a statutory right of subrogation of a government medical
system: Matt (Guardian of) v Barber (2002), 216 DLR (4th) 574 (Ont CA); see also United States
of America v Bulley (1991), 79 DLR (4th) 108, 55 BCLR (2d) 212 (CA), which refused to recognize
a right of action vested in the United States government, according to American law, to
recover medical expenses the government had paid for a United States serviceman and his
family. The accident took place in British Columbia and British Columbia law therefore deter-
mined who had a right of action.

American Law Institute. Restatement (Second) of Conflict of Laws (St Paul, Minn: American Law
Institute, 1971).
Castel, Jean-Gabriel. “Back to the Future! Is the ‘New’ Rigid Choice of Law Rule for Interprov-
incial Torts Constitutionally Mandated?” (1995) 33 Osgoode Hall LJ 35.
Castel, Matthew. “Jurisdiction and Choice of Law Issues in Multistate Defamation on the
Internet” (2013) 51 Alta L Rev 153.
Collins, Lawrence, ed. Dicey, Morris & Collins on the Conflict of Laws, 15th ed (London: Sweet &
Maxwell, 2015).
Dolinger, Jacob. “Evolution of Principles for Resolving Conflicts in the Field of Contracts and
Torts” (2000) 283 Rec des Cours 187.
Dutton, Geoffrey. The Hero as Murderer: The Life of Edward John Eyre, Australian Explorer and
Governor of Jamaica, 1815-1901 (Sydney: Collins, 1967).
Handford, Peter. “Edward John Eyre and the Conflict of Laws” (2008) 32 Melbourne UL Rev
822.
West, 2010).
Junger, Robin. “A Proposed Choice of Law Methodology for Tort in Canada: Comparative
Evaluation of British and American Approaches” (1994) 26 Ottawa L Rev 75.
Lehmann, Matthias. “Where Does Economic Loss Occur?” (2011) 7 J Priv Intl L 527.
Manitoba Law Reform Commission. Private International Law (Winnipeg: Manitoba Law
Reform Commission, 2009).
Pitel, Stephen GA & Jesse Harper. “Choice of Law for Tort in Canada: Reasons for Change”
(2013) 9 J Priv Intl L 289.
Trautman, Donald T. “A Comment” (1967) 67 Colum L Rev 465.
Walker, Janet. “ ‘Are We There Yet?’: Towards a New Rule for Choice of Law in Tort” (2000) 38
Osgoode Hall LJ 331.
CHAPTER THIRTEEN
Contracts and Unjust Enrichment
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691
A. Contracts Subject to Internationally Uniform Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 691
B. Internationally Uniform Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692
C. Choice of Law by Arbitrators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693
II. The Proper Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
A. Express Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694
B. No Express Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707
C. Multiple Proper Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
D. Limits on the Parties’ Freedom to Choose the Proper Law . . . . . . . . . . . . . . . . . . . 731
1. Imposed by Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731
2. At Common Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732
III. Issues That May Be Referable to a Law Other Than the Proper Law . . . . . . . . . . . . . . . . . 739
A. Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739
B. Contractual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746
C. Formalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747
D. Mandatory Rules of Legal Systems Other Than the Proper Law . . . . . . . . . . . . . . 752
1. Rules of the Lex Fori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753
2. Rules of Foreign Laws Other Than the Proper Law . . . . . . . . . . . . . . . . . . . . . . . . 760
E. Third-Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
IV. The Law Governing Unjust Enrichment Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
V. Related Topics in Other Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774
I. INTRODUCTION
See generally Dolinger.
A. Contracts Subject to Internationally Uniform Laws

In the common law jurisdictions of Canada, choice of law in contracts is determined by
judge-made rules. Certain types of international contracts—notably, contracts of carriage
and contracts for the sale of goods—are subject to uniform laws established in international
conventions that have been implemented by federal or provincial legislation. Choice of law
is irrelevant to these contracts to the extent that they are governed by the internationally
agreed regime. The most important of these international conventions are:
691
692 Chapter 13 Contracts and Unjust Enrichment
• The Warsaw Convention for the Unification of Certain Rules Relating to International Car-
riage by Air (Warsaw Convention) (as amended at the Hague, 1955, and by Protocol No 4
of Montreal (1975) (Montreal Convention)), implemented by the Carriage by Air Act, RSC
1985, c C-26.
• The Hague-Visby Rules (originally agreed at Brussels, 1924, amended by Brussels proto-
cols, 1968 and 1979), implemented by the Marine Liability Act, SC 2001, c 6, Part 5. Sec-
tions 44-45 of this statute also provide for the replacement, at a date in the future, of
the Hague-Visby Rules by the United Nations Convention on the Carriage of Goods by Sea
(1978) (Hamburg Rules). Both sets of rules codify the rights and obligations of carriers
of goods by sea. The Marine Liability Act also implements the Convention on Limitation
of Liability for Maritime Claims, 1976 (London, 19 November 1976) and the Athens Con-
vention relating to the Carriage of Passengers and their Luggage by Sea (1974), both of
which deal with uniform limitations of liability for claims that fall within their scope.
• The United Nations Convention on Contracts for the International Sale of Goods (Vienna
1980), implemented for the federal jurisdiction by the International Sale of Goods Con-
tracts Convention Act, SC 1991, c 13, and for each province by a provincial statute—for
example, the International Sale of Goods Act, RSBC 1996, c 236.
The last Convention deals with the formation of the contract of sale and the rights and
obligations of the seller and buyer arising from such a contract, where the parties’ respective
places of business are in different states that are parties to the Convention (art 1(1)(a)), or
where the rules of Canadian private international law lead to the application of the law of a
state that is a party to the Convention (art 1(1)(b)). Certain types of sales of goods, including
sales of ships, are excluded (art 2). The parties may agree to exclude the operation of the
Convention altogether or in respect of particular issues (art 6).
Efforts to extend the idea of an internationally uniform law from these specific types of
contracts to the law of contracts generally are continuing, but unlikely to succeed in the near
future: for a major attempt at promoting a synthesis, see International Institute for the Uni-
fication of Private Law; for assessments of the pros and cons of uniform laws compared with
private international law, see Boele-Woelki; Kono.
B. Internationally Uniform Choice of Law Rules

If the law of contracts itself cannot be made internationally uniform, the next best thing,
from the point of view of ensuring that parties’ rights are predictable and not subject to
variation from one forum to another, is to have internationally uniform choice of law rules in
contract. The most important efforts to date in this respect are the uniform choice of law
rules that apply in the member states of the European Union. These were originally con-
tained in the Convention on the Law Applicable to Contractual Obligations (Rome Convention)
(1980), which has been replaced, with effect from December 17, 2009, by Regulation (EC)
No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable
to contractual obligations (Rome I) (called Rome I to distinguish it from Regulation (EC)
No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable
to non-contractual obligations (Rome II)). In this chapter, references are to Rome I unless the
Rome Convention is specified: for the official commentary on the Rome Convention, see
Giuliano & Lagarde; for a comparison of the Rome Convention and Rome I, see Lando &
I. Introduction 693
Nielsen. In 1994, the Organization of American States (OAS), at its Fifth Inter-American Spe-
cialized Conference on Private International Law, approved the Inter-American Convention on
the Law Applicable to International Contracts (the OAS Convention). Canada, as an OAS mem-
ber, may in due course become party to the latter Convention, but so far only Mexico and
Venezuela have ratified it: for comments on the Convention, see Juenger.
Both Rome I and the OAS Convention are referred to in notes below, by way of compari-
son to the current Canadian choice of law rules. Rome I applies to any case brought before a
court of a member state, whether or not the other country or countries connected with the
case are also members of the Union. The regulation applies “in situations involving a conflict
of laws, to contractual obligations in civil and commercial matters” (Rome I, art 1(1)). The law
indicated by the regulation’s rules may be the law of a non-member state (art 2). The OAS
Convention, by contrast, is expressly limited to “international contracts,” defined as those
where the parties have their habitual residence or establishments in different states that are
parties to the Convention, or where the contract has objective ties with more than one state
party (art 1). The law chosen according to the Convention’s rules, however, can be the law of
a non-party to the Convention (art 2). Both instruments exclude a list of issues or types of
contracts from their operation. Exclusions common to both are agreements dealing with
matrimonial or family obligations, succession matters, and arbitration.
The Hague Conference on Private International Law has promulgated a set of Principles
on Choice of Law in International Commercial Contracts (2015) (Hague Principles), which are
also referred to in the notes below. They are meant to be a model for what should be
included in national legal systems and international instruments on choice of law. They deal
only with the situation where the parties have agreed expressly or tacitly on the law to
govern their agreement. This is because their aim is to further party autonomy rather than
to provide a comprehensive body of principles for determining the governing law even
where the parties have not agreed.
C. Choice of Law by Arbitrators

If a contract dispute goes to arbitration and a choice of law issue presents itself, are the
arbitrators bound by the same choice of law rules as a court would be and, if so, which court?
These issues have been extensively debated but the practical question is relatively limited.
It reduces itself to the question whether, if the tribunal decides the choice of law issue differ-
ently from the way a court would have decided it, the award will be invalid in the eyes of a
court called on to review or enforce it.
For international arbitrations subject to the International Commercial Arbitration Act of a
province or of Canada, the answer to this question is clearly no. These statutes (based on the
UNCITRAL Model Law on International Commercial Arbitration (1985) (Model Law)) expressly
authorize the tribunal to “decide the dispute in accordance with the rules of law designated
by the parties as applicable to the substance of the dispute” (which, as will be seen below, a
court would also do). Failing a designation of the applicable law, art 28(2) of the Model Law
says that “the arbitral tribunal shall apply the law determined by the conflict of laws rules
which it considers applicable.” Most Canadian jurisdictions have altered this provision so as
to direct the arbitral tribunal to “apply the rules of law it considers to be appropriate given
all the circumstances surrounding the dispute”: see International Commercial Arbitration Act,
RSBC 1996, c 233, ss 28(1), (3); International Commercial Arbitration Act, RSO 1990, c I.9, s 6.
The federal statute does not make this change: Commercial Arbitration Act, RSC 1985, c 17
(2nd Supp). The freedom to “apply the rules of law it considers to be appropriate” means that
the tribunal is not bound by choice of law rules, whether those of the country in which the
tribunal sits or those of another country.
There is no equivalent choice of law provision for domestic (which for this purpose
includes interprovincial) arbitrations. It is possible, depending on the local arbitration legis-
lation, that an arbitrator sitting in province X commits a reviewable error of law by failing to
apply the X choice of law rules. No reported case in Canada has held this to be so, but
examples can be found in England. (Some of the leading English cases on the conflicts rules
applicable to contracts have arisen in this way: see e.g. Compagnie Tunisienne de Navigation SA
v Compagnie d’Armement Maritime SA, [1971] AC 572 (HL).)
II. THE PROPER LAW

An enormous range of issues falls within the choice of law rules for contracts. In addition to
the issues related to formation, interpretation, performance, and breach of the agreement,
the field includes such matters as the effect of contractual terms imposed by statute,
exchange-control rules, nationalization decrees, price controls, consumer protection legis-
lation, contractual capacity, and licensing requirements affecting a party to the contract.
Most, but not all, of the choice of law issues arising in contracts are resolved by reference to
a single law, the proper law of the contract. One of the reasons that such disparate issues
tend to be relegated to a single legal system is that the rights and obligations arising out of
a contract are usually thought of as forming, at least in principle, an interrelated whole. If
each party’s obligations depended on a different legal system, or if a single party’s obliga-
tions were derived from multiple legal systems, the result might well be incoherent. Hence
the determination of the proper law has become the key to fixing the rights and duties of all
the parties to the contract in relation to almost all the issues that can arise.
In the determination of the proper law, the role of the parties’ intention—meaning their
objectively manifested common intention—is crucial.
A. Express Choice of Law
Vita Food Products Inc v Unus Shipping Co

[1939] AC 277 (PC) (on appeal from NSCA) (footnotes incorporated)
LORD WRIGHT:
This appeal arises out of a claim made against the respondent, a body corporate incor-
porated under the law of Nova Scotia, now in liquidation, as owner of the motor vessel
Hurry On registered at the port of Halifax, Nova Scotia. The claim was made by the
appellant, a body corporate carrying on business at New York, in the United States, for
damage and loss suffered in respect of consignments of herrings which were being carried
in the Hurry On from Middle Arm, Newfoundland, to New York, and were delivered in
a damaged condition.
In January, 1935, the Hurry On was put up as a general ship for the carriage of cargo,
including herrings, from Newfoundland ports to New York. Middle Arm was one of these
II. The Proper Law 695
ports. At that port there were loaded in the Hurry On three lots of herrings in barrels for
carriage to New York. The appellant purchased the herrings from M.G. Basha, whose
name appears on the bills of lading. It is not clear when the property passed, but so far as
concerns this case the appellant may be treated as owner of the herrings at all material
times. Bills of lading were issued on behalf of the ship. They were dated Middle Arm,
January 15, 1935, and acknowledged receipt on board of the goods in apparent good order
and condition from M.G. Basha, and provided for delivery in the like apparent good
order and condition at New York, “unto order Commercial National Bank and Trust Co.,
notify Vita Food Products, New York, or his or their assigns.” W.A. Shaw acted for the
ship as broker or agent in Newfoundland to secure the cargo, and J. Poole acted as a sort
of super cargo, and signed the bills of lading for the ship. By some error or inadvertence
the bills of lading so signed by Poole were old ones used outside Newfoundland by Shaw
at other ports for other vessels, and did not incorporate the Hague Rules, which had been
adopted by the Carriage of Goods by Sea Act enacted in Newfoundland in 1932. It is this
fact or accident which has led to the questions agitated in this case.
The Hurry On sailed from Middle Arm on January 16, 1935, bound for New York with
the herrings on board. On January 18, 1935, she ran into bad weather and ice off the coast
of Nova Scotia. The captain decided to make for a port of refuge, but in the attempt to do
so ran ashore at Grady Point in Nova Scotia in a gale of wind. The ship was eventually got
off and taken to Guysboro, where the herrings were unloaded, reconditioned and for-
warded by another ship to New York. At New York the appellant took delivery of the
herrings in their damaged condition under the bills of lading and paid freight, and then
claimed for the damage to the herrings and for salvage and other expenses. The allegation
in the action that the ship was unseaworthy was rejected by the courts in Canada and
need not now be considered; it is, however, admitted that the loss was due to the captain’s
negligence in navigation. The provisions either of the bills of lading or of the Carriage of
Goods by Sea Act would exempt the respondent from liability for a loss due to negligence,
but it was contended on various grounds to be discussed later that, as the Act had not
been complied with, the exceptions did not avail the respondent, and that it was subject
to the liabilities of a common carrier. This contention was rejected by the Chief Justice of
Nova Scotia, where the action was brought, and also by the Supreme Court of the Prov-
ince. In addition the Supreme Court held that if the bills of lading were illegal, the parties
were in pari delicto and on that ground also the action must fail.
The bills of lading are in identical terms except as to the description of the goods
included in each parcel, and it will be convenient to begin by stating briefly the substance
of them and of the Act. The bills of lading contained, as already stated, an acknowledgment
that the goods had been received on board for carriage to New York, with a proviso that
they should be at shipper’s risk while at the dock pending loading. There was a later clause
by which in accepting the bill of lading the shipper, consignee and holder of the bill of
lading agreed to be bound by all its stipulations as fully as if the shipper, consignee or
holder had signed it. The bill of lading set out in detail the “Terms and Conditions of this
Contract Bill of Lading which are hereby mutually agreed upon as follows.” These terms
and conditions, so far as material, may be briefly summarized. There were the usual
exceptions of sea and other perils, and the usual exemptions of specified classes of damage
such as leakage, breakage and so forth. Of these latter clause 7 is specially material in this
case. It contains a general exemption in respect of the goods carried from liability for all
damage capable of being covered by insurance, and from liability above a certain value
per package unless a special declaration is made. There follows a wide general exemption
of loss or damage due to negligence of the shipowners’ servants at or after the commence-
ment of the voyage, or to unseaworthiness, provided all reasonable means had been taken
to provide against it. General average was to be settled according to York Antwerp Rules,
1924, and adjusted in the country selected by the owners. The same clause also provided
that “This contract shall be governed by English law.” By clause 8 the liability of the goods
to contribute to general average and similar charges was not to be affected though the
necessity for that contribution was due to negligence or unseaworthiness, provided, how-
ever, that due diligence was exercised to make the ship seaworthy and properly manned,
equipped or supplied. By clause 22 no claim was to be admitted unless made in writing
within fifteen days after delivery or failure to deliver the goods. Provision was also made
that in the case of shipments from the United States the Harter Act of 1893 was to apply.
It was also stipulated that, save as so provided, the bill of lading was subject to the terms
and provisions of and exemptions from liability contained in the then unrepealed Can-
adian Water Carriage of Goods Act, 1910, and the clause of that Act which declared illegal,
null and void any clauses exempting the shipowners from liability save in accordance with
the provisions of that Act was specifically incorporated. The Canadian Act only applies
to shipments of goods from any port in Canada, whether to ports in Canada or ports
outside Canada, and accordingly prima facie would not apply to a shipment from New-
foundland. In any event the incorporation of the Canadian Act, like the incorporation of
the Harter Act, would only have effect as matter of contract on the principles laid down
in Dobell v. Steamship Rossmore Co. [[1895] 2 QB 408].
The Newfoundland Act, passed in 1932, recited that it is expedient that the rules agreed
to as a draft convention for the unification of certain rules relating to bills of lading by
the delegates of a number of states, including the delegates representing His Majesty at the
International Conference on Maritime Law held at Brussels in October, 1922, and after-
wards amended at a further conference at Brussels in October, 1923, should, subject to
the provisions of the Act, “be given the force of law with a view to establishing the respon-
sibilities, liabilities, rights and immunities attaching to carriers under bills of lading.”
Of the sections of the Act, it is necessary to set out ss. 1 and 3 in full. They are as follows:—
Sect. 1: Subject to the provisions of this Act, the rules shall have effect in relation to and
in connection with the carriage of goods by sea in ships carrying goods from any port in this
Dominion to any other port whether in or outside this Dominion.
Sect. 3: Every bill of lading or similar document of title issued in this Dominion which
contains or is evidence of any contract to which the rules apply shall contain an express
statement that it is to have effect subject to the provisions of the said rules as expressed in
this Act.
Sects. 4, 5 and 6, sub-s. 3, contain certain provisions to which the rules are subject. Sect. 7
gives any court in Newfoundland having jurisdiction to the amount claimed power to try
any action for loss or damage to goods carried by sea to or from the Dominion of New-
foundland, notwithstanding any stipulation in the bill of lading or similar document.
The rules which are thus given the force of law are set out in full in the Schedule to the
Act. These rules, often called the Hague Rules, are identical with those scheduled to the
British Carriage of Goods by Sea Act, 1924, and have now been adopted with or without
modifications by certain foreign states, including recently the United States, and also by
the Crown Colonies, by Australia, by Canada, and by New Zealand. They confer rights
and immunities and also impose liabilities upon the shipowner; liabilities which he cannot
escape, since art. III(8) avoids any clause or agreement relieving the carrier from the
liability for negligence imposed by the rules or lessening that liability. But the Act and
rules only apply where a bill of lading is issued and there is no provision making it impera-
tive for the carrier to issue a bill of lading save on demand of the shipper.
If the rules are compared with the provisions of the bills of lading in suit, they agree
in substance in respect of the relevant matters—namely, liability in respect of negligence
and unseaworthiness. In some respects the rules go beyond the bills of lading, as for
instance where they provide that the carrier is to be released from liability if suit is not
brought within one year after delivery has been or should have been made. In other
respects the bills of lading contain provisions which are outside the scope of the Act and
rules. The bills of lading are furthermore documents of title which define the contractual
voyage and provide for general average and for the obligation to deliver the goods which
are received at the dock and actually loaded. Moreover they expressly stipulate that the
proper law of the contract is to be English law. It is necessary to bear such matters in mind
when the central questions in the case are being considered, that is, the questions whether
the failure to obey s. 3 of the Act is illegal under the law of Newfoundland, the place where
the contract was made, and whether that failure renders the contract void in the courts
of Nova Scotia, and in either event what is the resultant legal position. The learned Chief
Justice held that notwithstanding the non-inclusion of the clause paramount (by which
is meant the clause specified in s. 3) the bills of lading were effective documents but are
subject to the exemptions, not of the bills themselves, but to those prescribed in the rules,
and that in the circumstances the latter exemptions gave a good defence to the shipowner
so that the action failed. The Supreme Court also held that the action failed, but reached
that conclusion by a different route. The reasoning of the learned judges did not in all
respects agree, but in substance they held that disobedience to s. 3 constituted an illegality
in which both parties were equally concerned, and accordingly the action failed whether
laid in contract or in tort. They held that the appellant’s arguments involved it in a
dilemma, either the bills of lading were good or they were illegal. In either event the suit
failed.
Their Lordships are of opinion that the bills of lading were not illegal, and must be
accepted as valid documents by the courts of Nova Scotia. The precise meaning of this
statement, however, and the reasoning on which it is based require elucidation.
The first question to determine is the true construction of ss. 1 and 3 of the Act. Sect. 1
provides for the application of the rules to every bill of lading for the carriage of goods
by sea in ships from any port in Newfoundland to any other port, whether in or outside
that Dominion. The appellant contended that since s. 1 only provided that the rules should
have effect “subject to the provisions of this Act,” the rules could not apply to a bill of
lading unless the terms of s. 3 were complied with. Their Lordships do not so construe
the section. In their opinion the words “subject to the provisions of this Act” merely mean
in this connection that the rules are to apply but subject to the modifications contained
in ss. 2, 4, 5 and 6, sub-s. 3, of the Act. To read these words as meaning that the rules are
only to have effect if the requirements of s. 3 are complied with, would be to put an
unnecessarily wide interpretation upon them instead of the narrower meaning, which is
more natural and obvious. In their Lordships’ judgment s. 1 is the dominant section.
Sect. 3 merely requires the bill of lading to contain an express statement of the effect of
s. 1. This view of the relative effect of the sections raises the question whether the manda-
tory provision of s. 3, which cannot change the effect of s. 1, is under Newfoundland law
directory or imperative, and, if imperative, whether a failure to comply with it renders
the contract void, either in Newfoundland, or in courts outside that Dominion.
It will be convenient at this point to determine what is the proper law of the contract.
In their Lordships’ opinion the express words of the bill of lading must receive effect, with
the result that the contract is governed by English law. It is now well settled that by English
law (and the law of Nova Scotia is the same) the proper law of the contract “is the law
which the parties intended to apply.” That intention is objectively ascertained, and, if not
expressed, will be presumed from the terms of the contract and the relevant surrounding
circumstances. But as Lord Atkin, dealing with cases where the intention of the parties
is expressed, said in Rex v. International Trustee for, etc., Bondholders A.-G. [[1937] AC
500] (a case which contains the latest enunciation of this principle), “Their intention will
be ascertained by the intention expressed in the contract if any, which will be conclusive.”
It is objected that this is too broadly stated and that some qualifications are necessary. It
is true that in questions relating to the conflict of laws rules cannot generally be stated in
absolute terms but rather as prima facie presumptions. But where the English rule that
intention is the test applies, and 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 pos-
sible, provided the intention expressed is bona fide and legal, and provided there is no
reason for avoiding the choice on the ground of public policy. In the present case, however,
it might be said that the choice of English law is not valid for two reasons. It might be said
that the transaction, which is one relating to the carriage on a Nova Scotian ship of goods
from Newfoundland to New York between residents in these countries, contains nothing
to connect it in any way with English law, and therefore that choice could not be seriously
taken. Their Lordships reject this argument both on grounds of principle and on the facts.
Connection with English law is not as a matter of principle essential. The provision in a
contract (e.g., of sale) for English arbitration imports English law as the law governing
the transaction, and those familiar with international business are aware how frequent
such a provision is even where the parties are not English and the transactions are carried
on completely outside England. Moreover in the present case the Hurry On, though on a
Canadian register, is subject to the Imperial statute, the Merchant Shipping Act, 1894,
under which the vessel is registered, and the underwriters are likely to be English. In any
case parties may reasonably desire that the familiar principles of English commercial law
should apply. The other ground urged is that the choice of English law is inconsistent with
the provisions of the bill of lading, that in respect of certain goods the Harter Act or the
Canadian Water Carriage of Goods Act of 1910 (now repealed, but in force at the date of
the bill of lading) was to apply. It has been explained that the incorporation of these Acts
may have only contractual effect, but in any case, though the proper law of the contract
is English, English law may incorporate the provisions of the law of another country or
other countries as part of the terms of the contract, and apart from such incorporation
other laws may have to be regarded in giving effect to the contract. The proper law of the
contract does indeed fix the interpretation and construction of its express terms and
supply the relevant background of statutory or implied terms. But that part of the English
law which is commonly called the conflict of laws requires, where proper, the application
of foreign law; e.g., English law will not enforce a performance contrary to the law of the
place of performance in circumstances like those existing in Ralli Bros. v. Compania
Naviera Sota y Aznar [[1920] 2 KB 287], and the law of the place of performance, though
it will not be effective to affect the construction of the contract in regard to its substance
(which must be ascertained according to the rule of the proper law, as was held in Jacobs,
Marcus & Co. v. Crédit Lyonnais [(1883-4), 12 QBD 589]), will still regulate what were
called in that case the incidents and mode of performance in that place. English law will
in these and sometimes in other respects import a foreign law, but the contract is still
governed by its proper law. The reference to the United States and the Canadian Acts does
not on any view supersede English law which is to govern the contract, nor does New-
foundland law, though Newfoundland was the place where the contract was made, apply
to oust English law from being the law of the contract, and as such from being the law
which defines its nature, obligation and interpretation, though Newfoundland law might
apply to the incidents of performance to be done in Newfoundland. There is, in their
Lordships’ opinion, no ground for refusing to give effect to the express selection of English
law as the proper law in the bills of lading. Hence English rules relating to the conflict of
laws must be applied to determine how the bills of lading are affected by the failure to
comply with s. 3 of the Act.
If, however, by reason of this failure to obey the Act the bills of lading were illegal in
Newfoundland, it would not follow as a necessary consequence that a Nova Scotian court,
applying the proper law of the contract, would in its own forum treat them as illegal,
though the position of a court in Newfoundland might be different, if it held them illegal
by Newfoundland law. A court in Newfoundland would be bound to apply the law enacted
by its own legislature, if it applied, and thus might treat the bills as illegal, just as the
Supreme Court in the United States treated as void an exemption of negligence in a bill
of lading issued in the United States, though in relation to the carriage of goods to England
in an English ship: Liverpool and Great Western Steam Co. v. Phenix Insurance Co. [129
US 397 (1889)]. Such a clause, it was held, was against public policy and void by the law
of the United States, which was not only the law of the forum but was also held to be the
proper law of the contract. This decision may be contrasted with In re Missouri Steamship
Co. [(1889), 42 Ch D 321], where in similar circumstances the Court of Appeal, held that
English law did not apply the American rule of public policy, though the shipment took
place in America and the bill of lading was issued there, and that the clause, being valid
in English law, must receive effect.
With these considerations in mind it is necessary first to consider if the bills of lading
are illegal by Newfoundland law. If they are not, the question of illegality cannot arise in
the courts of another jurisdiction, e.g., those of Nova Scotia. Illegality is a concept of so
many varying and diverse applications, that in each case it is necessary to scrutinize the
particular circumstances with precision in order to determine if there is illegality and if
so what is its effect. As Lord Campbell said in reference to statutory prohibitions in Liver
pool Borough Bank v. Turner [2 De GF & J 502]:
No universal rule can be laid down for the construction of statutes, as to whether mandatory
enactments shall be considered directory only or obligatory with an implied nullification for
disobedience. It is the duty of courts of justice to try to get at the real intention of the legis-
lature by carefully attending to the whole scope of the statute to be construed.
In that case the court, by a careful examination of the object of the Act and the public
importance of compliance with it, held the transfer of a vessel to be a nullity for breach
of a registration law. The same result has been reached in other cases, some of which have
been cited in argument where breaches of statutes were held to nullify the transactions
in question, even without express words of nullification. On the other hand, cases can be
cited where the contract was not avoided by some particular illegality, e.g., Kearney v.
Whitehaven Colliery Co. [[1893] 1 QB 700], where an illegality in a certain respect in an
agreement of employment was held not to vitiate the whole contract. Each case has to be
considered on its merits. Nor must it be forgotten that the rule by which contracts not
expressly forbidden by statute or declared to be void are in proper cases nullified for
disobedience to a statute is a rule of public policy only, and public policy understood in
a wider sense may at times be better served by refusing to nullify a bargain save on serious
and sufficient grounds.
Are there such grounds for holding that the Newfoundland law does in Newfoundland
nullify bills of lading such as those in question? In their Lordships’ opinion there are not.
The matter can be tested by asking what would be the position if a bill of lading set out
in extenso the exact provisions of the rules, but failed to contain an express statement in
compliance with s. 3, that the provisions of the rules applied to it. Surely such a bill of
lading could not be regarded as illegal. Or again, what is the position where not only is a
shipment made in a Newfoundland port but the port of delivery also is in Newfoundland?
In such a case s. 1, by its own force, imports the rules, and s. 3 is merely an intimation of
what, if the parties concerned are all residents or natives of Newfoundland and bound by
that law, they must be taken to be aware. At least this is the position if Newfoundland law
governs the contract. It seems impossible to hold that in such cases the bills of lading
would be illegal and void. If that is so of a transaction beginning and ending in New-
foundland, and if such a transaction is not illegal, their Lordships do not think that such
a transaction is to be treated as illegal because the place of delivery is outside Newfound-
land and the parties or some of them are outside that Dominion and are not bound by
its laws. It is said that the rules are not made part of the contract save when there is an
express clause in the contract stating that they are to apply as provided in s. 3, and that
to hold the bills of lading legal and effective documents without such a clause would
frustrate the purpose of the Hague Rules and of the International Conference, which aims
at an obligatory unification of bills of lading all over the world, at least so far as particular
nations adopt them. The Act, however, does not in terms provide that the bill of lading is
to be deemed illegal and void merely because it contravenes s. 3, nor does it impose
penalties for failure to comply with s. 3, nor does it in terms expressly prohibit the failure.
Indeed there is nothing to prevent a contract of sea carriage in respect of which there is
no bill of lading at all: see Harland & Wolff v. Burns [[1931] SC 722]. The inconveniences
that would follow from holding bills of lading illegal in such cases as that in question are
very serious. A foreign merchant or banker could not be assumed to know or to inquire
what the Newfoundland law is, at any rate when the bill of lading is not expressed to be
governed by Newfoundland law and still less when it provides that it is governed by
English law, and it would seriously impair business dealings with bills of lading if they
could not be taken at their face value, and as expressing all the relevant conditions of the
contract. It was partly for that reason that in Dobell v. Steamship Rossmore Co. [[1895] 2
QB 408] the Court of Appeal refused to treat the Harter Act as having any effect as a
foreign law affecting the validity of the contract, but treated it only as part of the English
contractual document which expressly embodied it. A bill of lading fulfils other functions
than merely that of setting out the conditions of carriage. It is a document of title which
if endorsed passes the property, and which, if money is advanced upon it, as is done in
ordinary course of business, passes a special property by way of pledge to the banker or
other lender. It would be a grave matter if business men when dealing with a bill of lading
had in a case like the present to inquire into the foreign law ruling at the port of shipment.
All these reasons seem to justify the conclusion that the omission of what is called the
clause paramount does not make the bills of lading illegal documents, in whole or in part,
either within Newfoundland or outside it. Sect. 3 is in their Lordships’ judgment directory.
It is not obligatory, nor does failure to comply with its terms nullify the contract contained
in the bill of lading. This, in their Lordships’ judgment, is the true construction of the
statute, having regard to its scope and its purpose and to the inconvenience which would
follow from any other conclusion. If that is so, the bills of lading are binding according
to their terms and consequently the respondent is entitled to succeed in its defence.
But on the basis that the bills of lading were illegal in Newfoundland in that their issue
without the clause paramount was prohibited by the law of that country it was argued
that no court in any country would enforce their terms and exemptions, and the carriage
would therefore be upon the terms implied where goods are taken for carriage by a com-
mon carrier, i.e., subject only to the exception of the Act of God and the King’s Enemies.
No further terms, it was said, could be implied nor could any reliance be put upon the
provisions of the Hague Rules, since they had not been incorporated in the bills of lading
by the insertion of the clause paramount. The appellant contended that, unless the clause
was inserted, no contract between carrier and shipper which included the provisions of
the Hague Rules was entered into. Nor could the Act be said to have incorporated them
even in Newfoundland itself, since s. 1 only provided that the rules should have effect
“subject to the provisions of this Act,” a phrase which the appellant maintained meant
(inter alia) that the rules were not incorporated unless the provisions of s. 3 were complied
with. For reasons already explained their Lordships do not so construe the section.
But whatever view a Newfoundland court might take, whether they would hold that
the contracts contained in the bills of lading must be taken to have incorporated the Hague
Rules or whether they would hold them to have been illegal, the result would be the same
in the present case, where the action was brought not in a Newfoundland but in a Nova
Scotian court. It may be that, if suit were brought on these bills of lading in a Newfound-
land court, and the court held they were illegal, the court would refuse to give effect to
them, on the basis that a court is bound to obey the laws of its own legislature or its own
common law, as indeed the United States Supreme court did in Liverpool and Great
Western Steam Co. v. Phenix Insurance Co. [129 US 397 (1889)]. But it does not follow
that any other court could properly act in the same way. If it has before it a contract good
by its own law or by the proper law of the contract, it will in proper cases give effect to the
contract and ignore the foreign law. This was done in the Missouri case, both by Chitty J
and by the Court of Appeal. Lord Halsbury, having stated that the contrary view would
mean that no country would enforce a contract made in another country unless their laws
were the same, said
that there may be stipulations which one country may enforce and which another country
may not enforce, and that to determine whether they are enforceable or not you must have
regard to the law of the contract, by which I mean the law which the contract itself imports
to be the law governing the contract.
Having held that the law of the contract was English, he went on to hold that the exception
of negligence, even if of no validity in the place where made, must receive effect in English
law, although the exception of negligence was invalid in the United States as being against
the public policy of that country, and although to do an act contrary to public policy is
one type of illegal action. The same attitude is illustrated in Dobell v. Steamship Rossmore
Co. [[1895] 2 QB 408], where the Harter Act, which declares certain stipulations to be
unlawful and imposes penalties on shipowners inserting them in bills of lading, was not
considered as affecting the English contract as a part of the contract where its provisions
were infringed, save so far as it was expressly incorporated. Foreign law was also dis-
regarded in Trinidad Shipping Co. v. GR Alston & Co. [[1920] AC 888], where the contract
was an English contract and payment of certain rebates on freight were rendered illegal
by the law of the United States, where the freight was payable. From the rule which he
states Lord Halsbury in the Missouri case puts aside
questions in which the positive law of the country [sc. the foreign country] forbids contracts
to be made. Where a contract is void on the ground of immorality, or is contrary to such
positive law as would prohibit the making of such a contract at all, then the contract would
be void all over the world, and no civilised country would be called on to enforce it.
In this passage Lord Halsbury would seem to be referring to matters of foreign law of
such a character that it would be against the comity of nations for an English Court to
give effect to the transaction just as an English Court may refuse in proper cases to enforce
performance of an English contract in a foreign country where the performance has been
expressly prohibited by the public law of that country. The exact scope of Lord Halsbury’s
proviso has not been defined. There may also be questions in some cases as to the effect
of non-performance of conditions which by the foreign law of the place where a contract
was entered into are essential to its formation, though even in that case the validity of the
contract may depend on its proper law. But whatever the precise ambit of that saving
expression, it is clear that it does not apply to such a statutory enactment as s. 3, even if
disobedience to it were regarded as rendering the bill of lading in some sense illegal.
It is, however, necessary before parting with this aspect of the case to consider whether
The Torni [[1932] P 78] (in which the Court of Appeal affirmed the judgment of Langton
J) should be applied, as the respondent’s counsel contend it should, in the respondent’s
favour. The bills of lading in that case had been issued in Palestine, a territory over which
His Majesty held a mandate. Two bills of lading, the only bills material in the case, had
been endorsed to Hull merchants. The shipment was to Hull. The question was whether
these bills of lading were to be construed according to their actual terms or whether those
terms were supplemented or supplanted by the Hague Rules, there being a Sea Carriage
of Goods Ordinance in Palestine corresponding to the Newfoundland Act. There were
certain differences between that case and the present. One was that the bills of lading had
a clause providing that they were “to be construed in accordance with English law” not
as in the present case “shall be governed by English law.” In their Lordships’ judgment
that distinction is merely verbal and is too narrow to make a substantial difference. The
construction of a contract by English law involves the application to its terms of the rel-
evant English statutes, whatever they may be, and the rules and implications of the English
common law for its construction, including the rules of the conflict of laws. In this sense
the construing of the contract has the effect that the contract is to be governed by English
law. In addition, even apart from that term (and a fortiori with it) the form of the bill of
lading would point to it being an English contract: The Industrie [[1894] P 58]. The law
of the flag was Esthonian, which was not likely to be taken as the proper law of the con-
tract. The other distinction was in s. 4 of the Palestine Ordinance which corresponded to
s. 3 of the Newfoundland Act. The former section, which was otherwise identical with s. 3,
contained the additional words “and shall be deemed to have effect subject thereto,
notwithstanding the omission of such express statement.” In view of the effect of s. 1 as
construed by their Lordships the additional words seem to them to add nothing in sub-
stance. The indorsees were claiming in the action for damage and short delivery, and the
question was set down for trial as a preliminary issue whether the bills of lading were
subject to the provisions of the Ordinance. The Court of Appeal held that they were. The
grounds of this decision were that the bills would have been illegal because they did not
contain the stipulated express clause had it not been for the fact that its omission was
immaterial, because by the law of Palestine the clause was incorporated whether expressly
inserted or not and the bills of lading were therefore legal. It was also held that the stipula-
tion that the contract should be construed by English law did not mean that English law
should be the proper law of the contract but merely that English rules of construction, as
contrasted with English substantive law, should apply. The law of Palestine was the sub-
stantive law to be applied and governed the contract.
As already indicated their Lordships do not agree with this view. With the greatest
respect to the Court of Appeal their Lordships are of opinion that the decision is contrary
to the principles on which they have proceeded in the previous part of this judgment and
that it cannot be supported. The Palestine Ordinance, so far as appears, did not any more
than the Newfoundland Act make the contract illegal so as to nullify the contract. There
was no sufficient ground for refusing to give effect to the express or implied intention of
the parties that the proper or substantive law of the contract, that is the law by which it
was to be enforced and governed, should be English law. To do so is to contravene the
fundamental principle of the English rule of conflict of laws that intention is the general
test of what law is to apply. The effect of the judgment seems to be to read the bill of lading
as if it expressly provided that it was to be governed by the law of Palestine. Nor does the
Court of Appeal seem to have had its attention directed to the prima facie rule that an
English court dealing with a contract made in a foreign jurisdiction, as Palestine was, must
first ascertain what was the bargain of the parties and give effect to that bargain unless
debarred by some provision of the foreign law which binds the court. In general, for reasons
already explained, legislative provisions such as those in question do not have extra-
territorial effect and do not debar the court from giving effect to the bargain of the parties.
The exceptions to this general rule do not apply here. It may be that a court in Palestine,
bound to give effect to the laws under which it exercises jurisdiction, might arrive at a
different conclusion. No opinion can here be expressed on that matter nor would it be
material in considering the effect which a court outside Palestine should give to the
contract. Nor is it necessary to consider what the position would have been if the bills of
lading had expressed that they were governed by the law of Palestine. Their Lordships do
not think that they should follow or apply the reasoning in The Torni [[1932] P 78].
NOTES
1. The effect of the Judicial Committee’s decision was that the Hague rules did not apply
to the contract between carrier and cargo owner at all. A large number of nations, including
Newfoundland, Canada, and England, had, pursuant to an international convention, each
enacted the Hague rules so that the rules would mandatorily apply to shipments from their
own ports. The rules as enacted by Newfoundland were excluded, as the Judicial Committee
held, by the choice of English law as the proper law. The rules as enacted by Canada (the lex
fori in Nova Scotia) did not apply because the only connections with Nova Scotia were the
Hurry On’s port of registry and its owners’ place of incorporation. Notwithstanding that
English law was the proper law of the contract, the rules as enacted by England did not apply
because the shipment was not from an English port. Such a result clearly defeats the pur-
pose that all these legal systems had in common, of ensuring that the Hague rules would
govern any shipment from any of their ports. As Scrutton LJ said in The Torni, [1932] P 78, at
84: “[I]t will be quite simple for every shipowner to defeat the Convention and the whole
system under it by simply putting in a clause, ‘This bill of lading is to be construed by the law,
not of the place where it is made, but by the law of the place to which the ship is going.’ ”
How might the Privy Council have avoided this result?
2. Lord Wright says that the parties’ agreement as to the proper law must be given effect,
“provided the intention expressed is bona fide and legal, and provided there is no reason for
avoiding the choice on the ground of public policy.” Public policy is a relatively well-defined
concept in private international law, but what would be a “mala fide” or an “illegal” choice of
law? These questions, along with others, are discussed below in Section II.D, “Limits on the
Parties’ Freedom to Choose the Proper Law.”
3. The references in the bill of lading in Vita Food Products to the legislation of the United
States (the Harter Act) and Canada (the Carriage of Goods by Sea Act) are described by Lord
Wright as an “incorporation” of terms that “would only have effect as a matter of contract,”
and as an example that “English law may incorporate the provisions of the law of another
country or other countries as part of the terms of the contract.” These references did not
detract from the choice of English law as the proper law. Consider why parties who have
agreed on their contract being governed by the law of country X might want to incorporate
certain provisions of the law of country Y as terms of the contract.
One difference that is often pointed to is the consequence of a change in the law after the
contract is made. If rules are incorporated as terms, it is presumably the rules as they stand
when the contract is made that are incorporated. Because they are to be taken as terms of
the contract, they will not subsequently be changed by legislative amendments in the rel-
evant country. But the rules of the proper law may well change between the time the con-
tract is made and the time when an issue under the contract comes before a court, and such
changes, according to the usual view, are to be given effect if the proper law so dictates. In
other words, a contract can only derive its force from a “living” system of law, not a set of
rules frozen in time. Note that even in the case of incorporated terms it is conceivable that
the parties intend the reference to be to the law in force from time to time. One example
may be when an employer obtains insurance coverage for employees working abroad and
the benefits are defined as those that the employee would receive under the workers’ com-
pensation legislation of the home jurisdiction. The statutory terms incorporated by refer-
ence may be intended to be those in force when the injury occurs: cf Zurich Life Insurance
Company Limited v Branco, 2015 SKCA 71, which involved such a contract, although this par-
ticular issue did not arise.
4. There may be questions about the validity or construction of a choice of law clause
itself. By what system of law is the validity or construction of such a clause to be deter-
mined—the law indicated by the clause, the system of law that would be the proper law in
the absence of the clause, or the lex fori on the principle that this is a question of the applica-
tion of a conflicts rule? There is no real authority on this point, probably because there are
few major differences between legal systems on these issues so courts tend to sort them out
by construing the choice of law clause according to the court’s own views of what is reason-
able: see e.g. Ontario Bus Industries Ltd v The Federal Calumet, [1992] 1 FC 245 (TD) (construc-
tion of a choice of a judicial forum clause to see whether it should be treated as an implied
choice of law as well); see further Section III.A,“Formation.”
5. Lord Wright says:
There is … no ground for refusing to give effect to the express selection of English law as the
proper law in the bills of lading. Hence English rules relating to the conflict of laws must be
applied to determine how the bills of lading are affected by the failure to comply with s. 3 of the
[Newfoundland Carriage of Goods by Sea] Act.
Later in the judgment, after explaining that an agreement that a contract is “to be con-
strued in accordance with English law” means the same thing as “shall be governed by
English law,” he says:
The construction of a contract by English law involves the application to its terms of the relevant
English statutes, whatever they may be, and the rules and implications of the English common
law for its construction, including the rules of the conflict of laws.
Remembering that he is speaking of a case before a Nova Scotia court, does he mean that
a contract governed (according to the choice of law rules of the forum) by the law of country
X is thereby made subject also to the choice of law rules of country X? If so, it would amount
to saying that renvoi applies to contract choice of law: see Chapter 9. Later cases have held
that renvoi definitely has no place in the field of contracts: see Amin Rasheed Shipping Corp v
Kuwait Insurance Co, [1984] AC 50 (HL) (reproduced in Section II.B, “No Express Choice of
Law”), and so Lord Wright’s comments in this respect are treated as an aberration.
6. Rome I, the OAS Convention, and the Hague Principles all provide that the parties’
agreement as to the governing law is decisive (except in certain circumstances, mentioned
below): on the concept and use of party autonomy in contract choice of law, see Nygh; Walsh.
Article 3(1) of Rome I says:
A contract shall be governed by the law chosen by the parties. The choice shall be made expressly
or clearly demonstrated by the terms of the contract or the circumstances of the case. By their
choice the parties can select the law applicable to the whole or a part only of the contract.
The OAS Convention, art 7(1), provides:

The contract shall be governed by the law chosen by the parties. The parties’ agreement on this
selection must be express or, in the event that there is no express agreement, must be evident
from the parties’ behaviour and from the clauses of the contract, considered as a whole. Said
selection may relate to the entire contract or to a part of same.
Note that these provisions contemplate that the parties may make their choice of law either
expressly or by implication: see Section II.B.
In connection with the previous note, it is worth observing that Rome I (art 20), the OAS
Convention (art 17), and the Hague Principles (art 8) all exclude renvoi by stipulating that
applying the “law” of a country means applying its rules of law other than the rules of private
international law.
Compare these treaty provisions with those of the 1991 Civil Code of Quebec relating to
juridical acts (which include contracts):
3111. A juridical act, whether or not it contains any foreign element, is governed by the law
expressly designated in the act or the designation of which may be inferred with certainty from
the terms of the act.
• • •
The law may be expressly designated as applicable to the whole or to only part of a juridical act.
7. Can the parties choose to have their contract governed by two or more systems of law?
See Section II.C, “Multiple Proper Laws,” below.
8. Can the parties change the proper law after the contract is made? Logic would suggest
that they can, because they are free to amend their contract as they please. Such Anglo-
Canadian authority as there is comports with this position: see Collins at para 32-026; see
also para 32-052. Both Rome I (art 3(2)) and the OAS Convention (art 8) expressly contem-
plate an agreement to alter the choice of governing law. (The Civil Code of Quebec has no
equivalent.) The two provisions are similar. That in Rome I reads:
The parties may at any time agree to subject the contract to a law other than that which previ-
ously governed it, whether as a result of an earlier choice under this Article or of other provi-
sions of this Regulation. Any change in the law to be applied that is made after the conclusion
of the contract shall not prejudice its formal validity under Article 11 or adversely affect the
rights of third parties.
9. Can the parties agree that their contract is to be governed by no system of law at all?
Recognizing such a clause as effective would seem to lead to a conceptual impasse because,
if no system of law applies to the contract, it is hard to see what can give the contract its legal
force. For this reason it is usually assumed that parties cannot, by their own stipulation,
prevent their contract being governed by some system of law. More controversial is the
question whether they can prevent it being governed by any national system of law by
agreeing that their contract shall be governed by an internationally accepted body of rules.
This technique is attractive especially for commercial contracts between a sovereign state
and a private entity. The state usually does not want the contract to be governed by the law
of the private party’s country, but the private party does not want the contract to be gov-
erned by the state party’s law because the state could change that law so as to defeat the
private party’s interests. One possible solution would be to choose a “neutral” national
law—that is, the law of a third country, but agreeing on a denationalized set of rules may be
even more attractive. The Hague Principles (2015), which promote party autonomy, provide
(art 3):
The law chosen by the parties may be rules of law that are generally accepted on an inter-
national, supranational or regional level as a neutral and balanced set of rules, unless the law of
the forum provides otherwise.
See Saumier for a discussion of the background to art 3.

International arbitral tribunals have sometimes felt able to give effect to a choice of lex
mercatoria or international law: see the authorities cited in Collins at para 32-049; Grigera
Naón at 114-51. They can do so more easily than courts because the tribunal itself derives its
authority from the parties’ agreement and so can more easily take on itself the role of sup-
plying rules, from whatever source it sees fit, if the parties’ contract invites it to do so. A court
is less free in this respect because its ultimate responsibility is to obey the rules, including
private international law rules, of its national legal order, not merely to implement the par-
ties’ wishes: see also Karton.
B. No Express Choice of Law
Richardson International, Ltd v Mys Chikhacheva (The)

[2002] 4 FC 80, 2002 FCA 97
[Richardson, a Washington company whose CEO was Ms. Lynn Richardson, conducted
an international business of purchasing and marketing fish products. It claimed a mari-
time lien over a fishing trawler, the Mys Chikhacheva, which it had caused to be arrested
at the port of Nanaimo, British Columbia. Richardson’s claim was based on having sup-
plied necessaries for the benefit of the trawler—namely, financing for the refitting and
supply of the three-vessel fleet to which she belonged—in return for Richardson’s exclusive
right to market the fleet’s catch until the loan was paid off. The owner of the Mys Chikha
cheva was Bering Trawlers Ltd, which in turn was owned by a Russian consortium of
fishing companies. Bering had chartered the vessel by a bareboat charter to Starodubskoe,
a Russian company that was a member of the consortium. The agreements comprising
the “security package” relating to Richardson’s loan and its marketing rights were all made
with Starodubskoe. These were a mortgage agreement comprising a loan agreement and
the grant of a mortgage over Starodubskoe’s factory ship to Richardson; a promissory
note incorporated by reference in the mortgage agreement; and a marketing contract in
favour of Richardson. One of the questions in the present proceeding was whether Rich-
ardson had a maritime lien over the Mys Chikhacheva, and this depended on whether the
proper law of the relevant contract was the law of (one of) the United States, because
United States federal law, but not Canadian law (Russian law was not proved), grants a
maritime lien to a supplier of necessaries to the owner or the bareboat charterer of a vessel.
The trial judge held that United States law applied to the issue of the maritime lien because
the contractual relationship between the parties was governed by American law. He held
that various other arguments against the validity of the lien failed and that the amount
to which Richardson was entitled was US$336,969.84. The Federal Court of Appeal dis-
missed the appeal.]
MALONE JA (Strayer and Sharlow JJA concurring):

[20] Bering now asserts that the Trial Judge erred in law and fact in his conclusion
that the proper law of the contract was American law. Bering argues that the proper law
is that of Russia, but since it has not been proven, the applicable law is the law of Canada,
applying Fernandez v. “Mercury Bell” (The), [1986] 3 FC 454 (CA).
[21] In particular, Bering suggests that Dubé J erred in so far as he relied on various
clauses in the security package to find both an express and implied choice of American
law as the proper law of the contract, and that American law had the closest and most
substantial connection to the contract. Bering argues that, since Richardson has admitted
in its statement of claim that the necessaries were provided under the terms of the market-
ing contract and addendum, only the terms of that contract are relevant. In Bering’s view,
the other documents, namely, the promissory note and the mortgage, were ancillary to
the marketing contract. It follows from this assertion that all connecting factors arising
from the mortgage and promissory note must be disregarded, and that the Trial Judge’s
reliance on the House of Lords decision in Tomkinson v. First Pennsylvania Banking and
Trust Co., [1961] AC 1007 pointing to the law of the lender is misplaced.
[22] Turning to the marketing contract, Bering notes that there is no explicit choice
of law clause in that document, and, accordingly, this Court must apply the rule in Federal
Calumet [Ontario Bus Industries Inc v Federal Calumet (The) (1992), 150 NR 149 (FCA)],
and determine, with reference to all the circumstances, which law has the closest and
most substantial connection to the contract. In asserting that Russian law, not American
law meets this test, Bering relies on Castel, Canadian Conflict of Laws, 3rd ed. (Toronto:
Butterworths, 1994), at page 561. There, the author indicates that “[w]hen the place of
contracting is the same as the place of performance, the court may find it practically
impossible to apply any other law to the contract.”
[23] In this case, Bering points to the nature and location of the subject matter, and
the place and residence of the parties, which, in its view, indicates that Russian law is
closest in connection to the contract. In particular, it stresses that:
a. All contracts were negotiated and executed in Russia;
b. The vessels harvested fish in waters off eastern Russia, in the Sea of Ohkotsk, which
is surrounded on three sides by Russia;
c. The vessels sailed under the Russian flag;
d. The vessels were either owned or bareboat chartered by Russian corporations;
e. Fish transhipments were to take place either in or adjacent to Russian waters;
f. It is “implicit” that supplies and services would be likewise provided, and were in
fact so provided;
g. The vessels were Russian and Polish in origin; and
h. Starodubskoe’s place of residence is Russia, and Richardson carried on business in
Russia (though its head office was in Washington).
[24] Bering also argues that the Trial Judge placed too much weight on the arbitration
clause in the marketing contract. That clause indicates that the situs of the arbitration is
to be Washington, the appointing authority is the president of the Seattle Chamber of
Commerce, the language of the arbitration is to be English, and the arbitration is to
proceed under UNCITRAL Arbitration Rules [UN GAOR, December 15, 1976]. Bering
refers specifically to Rule 33, which provides that the parties themselves must choose the
proper law and that, should they fail to do so, the arbitral tribunal will apply the conflict
of laws rules it deems applicable. Accordingly, since the parties did not explicitly choose
the proper law, Bering submits that Russian law has the closest connection to the contract,
and should apply.
[25] Finally, Bering also argues that the Trial Judge erred in considering parol evidence
from Lynn Richardson as to the intention of the parties when the security package was
executed. This evidence is said to be irrelevant and self-serving, and should not have been
admitted.
[26] This Court in Federal Calumet, supra, indicated that a trial judge’s determination
of the proper law of a contract will be granted high levels of curial deference, being analo-
gous to a finding of fact. In that case, Marceau JA stated orally [at page 150]:
His finding must be seen, therefore, essentially as a finding of fact which should not be
overturned on appeal, since it is based on an appreciation of the circumstances from which
the legal system that was most closely connected to the transaction could be inferred.
[27] I also note, however, that in the very recent decision of this Court in Imperial Oil
Ltd. v. Petromar Inc., [2002] 3 FC 190 (CA), Stone JA concluded that the determination
of the proper law of a contract, in a case where the parties to the litigation have proceeded
on an agreed statement of facts, was a question of mixed law and fact rather than one of
fact simpliciter. In this case, it is not necessary to determine whether the question of the
proper law is purely factual or a question of mixed law and fact, because, in my analysis,
there is no basis under either characterization for interfering with the determination made
by Dubé J.
[28] The parties agree, and are correct to say, that Federal Calumet, supra, mandates
the proper process for determining the proper law of a contract. First, the Court must
determine whether there is an express choice of law by the parties. If there is none, then
the Court must determine whether the proper law can be inferred from the terms of the
contract and the surrounding circumstances, an exercise that requires the Court to
determine the system of law that has the closest and most real connection to the contract:
see Imperial Life Assurance Co. of Canada v. Colmenares, [1967] SCR 443, at page 448,
where Ritchie J stated as follows:
… the problem of determining the proper law of a contract is to be solved by considering
the contract as a whole in light of all the circumstances which surround it and applying the
law with which it appears to have the closest and most substantial connection.
This approach was also approved in Imperial Oil, supra.

[29] Turning to the reasons of the learned Trial Judge, he held that there was, in fact,
an express choice of American law in clause 27 of the mortgage agreement. That clause
reads:
[27] Governing Law. To the extent not governed by the laws of Russia, the Mortgage shall
in all respects be governed by and construed in accordance with the laws of the State of Wash-
ington. The Owner irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts situated in King County, Washington in any proceeding relating to this Mortgage and
agree that any process or summons in any such action may be served by mailing to Owner
a copy thereof. As used in this Section 27, “the laws of the State of Washington” include all
laws of the State of Washington except the conflicts of laws principles, it being the intent that
the substantive laws of Washington shall always apply. [Emphasis added.]
Dubé J reached that conclusion on the basis that the supply of necessaries to the Mys
Chikhacheva was carried out within a pre-existing commercial relationship arising from
the security package. The question, then, is whether he properly considered the mortgage
agreement at all.
[30] In my analysis, Dubé J properly considered the totality of the contractual relation-
ship between Richardson and Starodubskoe. Upon my review of the security package, it
is clear that none of the documents provide comprehensively for the supply of necessaries
to the vessels. Instead, as Richardson suggests, the supply of necessaries by Richardson
to Starodubskoe appears to be a key element in ensuring the attainment of the goal behind
the entirety of the security package, that is, the marketing of and profit from processed
fish products. The marketing contract provides only for the provision of Baader techni-
cians and for a set-off for “packaging, supplies and services,” and makes no specific
mention of fuel or other provisions.
[31] The addendum to the marketing contract provides for security over the products
created on the three vessels, and thus, in my view, links the marketing contract to the
other components of the security package. The addendum, portions of which are hand-
written, reads as follows:
It is understood that PRODUCER [Starodubskoe] is requesting RSM [Richardson] to finance
and manage re-furbishing of the M/V “Yuzhnie Kurily.”
RSM shall provide financing, technology and future vessel management based upon and
contingent upon the PRODUCER assigning all production of sterkoder trawler class vessels
“MYS SLEPIKOVSKOGO” and “CHIKHACHEVA” to RSM as collateral. This assignment may
be in the form of either a marketing contract or full vessel management.
[Handwritten portion appears as follows:]

Payment terms on loan for converting M/V Yuzhnie Kurily are as follows:
Oct. 1996—10% of money owed

May, 1997—30%
Oct., 1997—20%
May, 1998—40%
Until such time as the loan is repaid RIL holds title to all products produced on board MYS
SLEPIKOVSKOGO, MYS CHIKHACHEVA, and M/V Yuzhnie Kurily. Also, RIL will hold a
mortgage on M/V Yuzhnie Kurily as collateral.
In my analysis, the addendum to the marketing contract grants a security in favour of

Richardson over all production from the three vessels until the refit loan is fully repaid.
This surely indicates that the parties understood and intended their relationship to be
governed by a complex series of interrelated components, and not discrete, stand-alone
contracts; a conclusion bolstered by recitals in the mortgage which incorporate by refer-
ence the promissory note and refit loan. As a result, I conclude that the Trial Judge was
correct in having recourse to the full factual matrix behind the relationship between
Richardson and Starodubskoe.
[32] Even if the marketing contract were considered in isolation on the basis that it
is the only contract governing the supply of necessaries, I would conclude that the proper
law is that of the United States. The marketing contract contains no express choice of law
and therefore it would be necessary to determine the system of law that has the closest
and most substantial connection to the marketing contract: Imperial Life Assurance Co.
of Canada v. Colmenares, supra.
[33] In my analysis, the most compelling of all the factors in this case is the presence
of the arbitration clause in the marketing contract. As Castel, supra, writes at page 556:
If the parties agree that arbitration shall take place in a particular legal unit, the court will
usually, although not always, conclude that the parties have impliedly chosen the law of the
legal unit of arbitration as the proper law. Similarly, if the parties agree that the courts of a
particular legal unit shall have jurisdiction over the contract, there is a strong inference that
the law of that legal unit is the proper law. [Emphasis added.]
In this case, the arbitration clause reads as follows:

Any dispute which might arise from or in relation to this contract, if not settled by negotia-
tions, shall be settled by arbitration in accordance with UNCITRAL arbitration rules pres-
ently in force.
Place of arbitration shall be Seattle, Washington USA, the appointing authority shall be
the President of Chamber of Commerce in Seattle. The number of arbitrators shall be three
(3) and the language used for all documents and proceedings shall be English. Parties desire to
execute the award of arbitration voluntarily. Court of arbitration shall base its award on the
respective contract. [Emphasis added.]
[34] In my view, this clause is indicative of the parties’ implied intention to have
American law apply. Though not determinative, the arbitration clause is highly persuasive.
In Compagnie Tunisienne de Navigation S.A. v. Compagnie d’Armement Maritime S.A.,
[1971] AC 572 (HL), both Lords Diplock and Wilberforce commented on the persuasive
value of the arbitration clause in the absence of a contrary intention in the contract. Lord
Diplock [at page 609] was of the view that:
… an arbitration clause is generally intended by the parties to operate as a choice of the proper
law of the contract as well as the curial law and should be so construed unless there are compel-
ling indications to the contrary in the other terms of the contract. … [Emphasis added.]
[35] No contrary intention appears on the face of the marketing contract. Further,
Castel, supra, at pages 556-558 provides a list of possible factors which would indicate the
applicability of American law in this case:
Other factors from which the courts have been prepared to infer the intentions of the parties
as to the proper law are the legal terminology in which the contract is drafted, the form of the
documents involved in the transaction, the currency in which payment is to be made, the use
of a particular language, a connection with a preceding transaction, the nature and location of
the subject matter of the contract, the residence (but rarely the nationality) of the parties, the
head office of a corporation party to the contract, or the fact that one of the parties is a gov-
ernment. The proper law cannot be determined retrospectively by an event which at the time
the contract was made was merely an uncertain event in the future. Nor can the contract
float in an absence of law until the proper is determined, nor can it change from one legal
unit to another on the happening of subsequent events. [Emphasis added.]
[36] Certain of these factors are neutral. For example, the language of the marketing
contract, the residence and head office of the parties, and the location of the subject matter
do not point to either of the possible choices of law. However, the legal terminology and
form of the document appears to favour American law, as the agreements in their original
form were drafted by American lawyers; the currency is expressed to be in US dollars;
and, in terms of the marketing contract’s connection to preceding transactions, the
marketing contract incorporates by reference in the addendum the promissory note and
mortgage, which grants security to ensure repayment of that loan. Undoubtedly, the
mortgage and promissory note were executed to enable the parties to enter into the
marketing contract. Even when one considers that the contract was executed in Russia,
and performance was to occur, at least partly, in Russia, it is clear that the proper law is,
by implication, American.
[37] I take comfort from the reasons of Lord Morris of Borth-y-Gest in Tomkinson,
supra, at pages 1083-1084. In that case, the parties had decided that the law of Cuba would
apply to matters arising from the title to property, located in Cuba and held by an Amer-
ican creditor as security. Lord Morris held that references in the contract to Cuban law
under such circumstances was not necessarily to be taken as an implied choice of Cuban
law as the proper law of the contract. This was especially true where the circumstances,
on balance, indicated the implied choice of American law.
[38] I am also of the opinion that the Trial Judge erred in law by considering irrelevant
parol evidence from Lynn Richardson regarding her intentions when executing the
contract. While the Trial Judge [at paragraph 43] couched the admission of this evidence
in terms of gaining a fuller appreciation of “the factual matrix, the context, the environ-
ment within which the document was created,” it is also true that he found Mrs. Richard-
son’s comments as to her intentions to be material. The general rule is that, except under
limited circumstances, a party may not make representations or give evidence as to his
or her subjective intention at the time the contract was made (see Eli Lilly & Co. v. Novo-
pharm Ltd., [1998] 2 SCR 129). In this case, there are no special circumstances allowing
for its admission. However, in my analysis, his ultimate conclusion remains supportable
even in the absence of the parole evidence, as such evidence is but one minor component
among many that support his conclusion.
[The judgment on the remaining issues is omitted.]
NOTE
There are two rationales for determining the proper law of a contract when the parties have
not expressly agreed on one, and these two rationales are often not distinguished (includ-
ing, with respect, at some points in this case). One is that the parties, on the objective inter-
pretation of their contract, actually did reach implicit agreement on what the proper law
should be, but just did not spell it out in so many words. The Court of Appeal seems to take
this view when (at para 34) it says that the presence of the arbitration clause in the marketing
agreement shows the parties’ “implied intention to have American law apply.”
The other rationale, which the court refers to two paragraphs earlier, is that the contract
has its closest and most real connection to a particular system of law. This “closest and most
real connection” test is not a matter of the parties’ implied intention (although older cases,
in particular, often read as though it is). This is the test one reaches when the contract does
not show either an express or an implied agreement on the proper law. This point is illus-
trated by The Star Texas, [1993] 2 Lloyd’s Rep 445 (CA), in which a charterparty contained a
clause requiring arbitration “in Beijing or London in defendant’s option.” The plaintiffs, who
did not want to go to arbitration, argued that the arbitration clause was invalid because it
dictated the proper law and, since it referred to two places of arbitration, led to a “floating”
proper law that was impossible under English conflicts rules. The court held that this argu-
ment was misconceived. Because the arbitration clause did not connect the contract to a
particular jurisdiction, it could not indicate that the parties intended that a particular juris-
diction’s law should apply. The arbitration clause was perfectly valid. The proper law, there
being no indication of it in the arbitration clause, would have to be determined based on the
closest and most real connection test: see also the next case.
Rome I includes in its preambular recitals one (number 12) stating that an exclusive choice
of forum in favour of the courts or tribunals of a member state “should be one of the factors
to be taken into account in determining whether a choice of law has been clearly demon-
strated [for the purpose of art 3(1), the provision giving the parties freedom of choice].”
The OAS Convention, art 7(2), says: “Selection of a certain forum by the parties does not
necessarily entail selection of the applicable law.”
Imperial Life Assurance Co of Canada v Segundo Casteleiro Y Colmenares

[1967] SCR 443 (footnotes incorporated)
RITCHIE J:
This is an appeal brought with leave of this court from a judgment of the Court of
Appeal for Ontario [[1966] 1 OR 553, 54 DLR (2d) 386] (Porter CJ, dissenting), dismissing
an appeal from a judgment of Mr. Justice Stewart whereby he awarded the respondent
the sum of $8,744.22, being the equivalent in Canadian currency of the cash surrender
value, payable in American dollars, of two policies of insurance on the life of the respond-
ent which were issued through the appellant’s branch office in Havana, Cuba, in 1942 and
1947 at a time when the respondent was resident and domiciled in that country.
The sole question at issue in this appeal is whether the proper law of the contracts of
life insurance is the law of Ontario or the law of Cuba. In this regard the parties are agreed
that if the proper law of the contracts is found to be that of Ontario, the respondent is
entitled to succeed, but that if the law of Cuba applies, unless permission has been granted
by the National Bank of Cuba, the payment of the cash surrender value in dollars to a
person resident in the United States, as the respondent is and was in September 1961
when he surrendered the policies, would be an offence contrary to the Foreign Exchange
Contraband Law of Cuba.
The circumstances giving rise to this litigation have been thoroughly reviewed in the
courts below and they are not in dispute, but a brief résumé of the essential facts is, in my
opinion, necessary to any intelligible discussion of the law applicable thereto.
The two policies here in question were in identical terms and they were both written
in Spanish, which is the language of Cuba, for delivery by the appellant’s Cuban agent to
the respondent who was then a Cuban national and who had made application for the
policies in Cuba pursuant to an application form by which he agreed, inter alia:
That any policy granted pursuant hereto shall take effect only upon its delivery and upon
payment of the first premium thereon in full, to be vouched for by the Company’s printed
official receipt duly countersigned and provided that upon such delivery and payment there
shall have been no material change in my health or insurability since the completion of part 2
of my application.
The respondent’s offers as contained in his applications for these policies were by their
terms irrevocable and he specifically agreed to accept the policies if any when they were
issued. Before delivery the policies were duly authenticated before a Notary in accordance
with the law of Cuba.
It is contended on behalf of the appellant, on the basis of these facts, that the contracts
were made in Cuba and are governed by the law of that country.
On the other hand, it is pointed out by the respondent that the applications were
addressed to “The Imperial Life Assurance Company of Canada, Head Office, Toronto,
Canada” and were prepared at that office, where the policies were also prepared and that,
although these policies were written in Spanish, they were drawn in the common, standard
form as used in the province of Ontario and in conformity with the laws of that province.
These policies stipulated that they could not be varied except by writing thereon signed
at the head office of the company by two of its executive officers and that any interlinea-
tions, additions or alterations had to be attested by two of the said officers. It is also to be
noted that all payments under the policies, whether to or by the company, were required
to be made “by bank draft drawn on New York payable in legal currency of the United
States of America” and although it is true that many of the premiums were paid in pesos
in Cuba, I think it to be apparent that at the time when the contracts were made it was
contemplated that the cash surrender value would be payable in American dollars and it
is made clear in the policies themselves that the request for such payment was required
to be made in writing to the head office of the company at Toronto.
It is submitted on behalf of the appellant that the determination of the proper law
applicable to these contracts is governed by the fact that they were made in Cuba, but I
am by no means satisfied that they were so made. I am, on the other hand, of opinion that
the time of the making of the contracts was when the initial irrevocable offers contained
in the respondent’s applications were accepted by the mailing of the policies from the
appellant’s head office in Toronto. (See North American Life Assurance Co. v. Elson [(1903),
33 SCR 383], per Davies J at p. 392 and Milinkovich v. Canadian Mercantile Insurance Co.
[[1960] SCR 830], per Fauteux J at pp. 835 and 836.)
The respondent’s applications by their terms provided that they were not to be effective
until fulfilment of certain conditions which I have set out above and which are almost
identical with those required of all contracts of life insurance in Ontario unless the
application otherwise expressly provides to the contrary. This appears from the provisions
of s. 139(1) of The Insurance Act, RSO 1937, c. 256, which reads as follows:
139(1) Unless the contract or the application otherwise expressly provides, the contract
shall not take effect or be binding on either party until the policy is delivered to the insured,
his assign, or agent, or the beneficiary named therein and payment of the first premium is
made to the insurer or its duly authorized agent, no change having taken place in the insur-
ability of the life to be insured subsequent to the completion of the application.
The policies here in question both contain the following provision:

This policy and the applications herefor, a copy of which is attached hereto, taken together
shall constitute the entire contract between the parties.
It is thus apparent that although the policies did not become effective until the conditions
above referred to were fulfilled, which in fact occurred in Cuba, these conditions were
themselves a part of “the entire contract between the parties” which in my opinion was
concluded when the policies were mailed in Toronto. The fact that the parties agreed that
the policies were not to become effective until conditions were fulfilled in Cuba did not
alter the place where that agreement was made. It has long been recognized that when
contracts are to be concluded by post the place of mailing the acceptance is to be treated
as the place where the contract was made. As was said by Thesiger LJ in Household Fire
& Carriage Accident Insurance Company v. Grant [(1879), 4 Ex D 216 at 321]:
… as soon as the letter of acceptance is delivered to the post office, the contract is made as
complete and final and absolutely binding as if the acceptor had put his letter into the hands
of a messenger sent by the offerer himself as his agent to deliver the offer and receive the
acceptance.
In the course of his dissenting reasons for judgment in the Court of Appeal, the Chief
Justice of Ontario advanced the view that because the policies themselves contained
certain restrictive provisions relating to war and air travel which were not mentioned in
the applications, it followed that the contracts were not concluded by the mailing of these
policies. This ground was not relied on by the appellant and with the greatest respect I do
not think that under the circumstances the additions to the policies to which the learned
Chief Justice refers have the effect of changing the place where the contract was made
from the place of acceptance to that of delivery.
I am, however, in agreement with Mr. Justice MacKay who observed in the course of
the reasons for judgment which he delivered on behalf of the majority of the Court of
Appeal that:
The place where the contract was made is not by any means decisive in determining the
question of what law is applicable to the contract.
It now appears to have been accepted by the highest courts in England that the problem
of determining the proper law of a contract is to be solved by considering the contract as
a whole in light of all the circumstances which surround it and applying the law with
which it appears to have the closest and most substantial connection.
This test was adopted by the Privy Council in Bonython v. Commonwealth of Australia
[[1951] AC 201], where Lord Simonds said at p. 219:
… the substance of the obligation must be determined by the proper law of the contract, i.e.,
the system of law by reference to which the contract was made or that with which the trans-
action had its closest and most real connexion.
This approach to the problem was restated in the House of Lords in Tomkinson v. First
Pennsylvania Banking and Trust Co. [[1961] AC 1007], per Lord Denning at p. 1068 and
Lord Morris of Borth-y-Gest at p. 1081.
The many factors which have been taken into consideration in various decided cases
in determining the proper law to be applied, are described in the following passage from
Cheshire on Private International Law, 7th ed., p. 190:
The court must take into account, for instance, the following matters: the domicil and even
the residence of the parties; the national character of a corporation and the place where its
principal place of business is situated; the place where the contract is made and the place
where it is to be performed; the style in which the contract is drafted, as, for instance, whether
the language is appropriate to one system of law, but inappropriate to another; the fact that
a certain stipulation is valid under one law but void under another; … the economic con-
nexion of the contract with some other transaction; … the nature of the subject matter or
its situs; the head office of an insurance company, whose activities range over many countries,
and, in short, any other fact which serves to localize the contract.
In referring to the location of the “head office of an insurance company whose activities
range over many countries” as a factor to be taken into account in determining the proper
law of a life insurance contract, the learned author cites as his authority the cases of Pick
v. Manufacturers’ Life Insurance Company [[1958] 2 Lloyd’s Rep 93], and Rossano v.
Manufacturers’ Life Insurance Company [[1963] 2 QB 352], both of which have been
extensively reviewed in the courts below, but he expresses doubts, which I share, as to
whether they afford justification for the general proposition that the proper law of a
contract of life insurance is necessarily the country in which the head office of the insurer
is situated.
In the present case, however, in my view, the significance of the location of the head
office of the appellant company is underscored by the fact that the evidence makes it quite
plain that the actual decision to “go on the risk” was made there and could not have been
made in Havana. In this regard, in the course of his cross-examination, the appellant’s
general manager gave the following answers:
Q. We are clear that when the application was made in Havana it was a head office deci-
sion whether it could go on the risk?
A. Yes.
Q. And that decision could not be made in Havana?
A. No.
While it is clear that all relevant circumstances surrounding the making of a contract
are to be given due weight in determining the locality with which it is most closely associ-
ated, I am of opinion that in the present case the fact that both the applications and the
policies were prepared in Ontario in a common, standard form which complied with the
law of that province, is to be regarded as of preponderating importance in determining
the law governing the contracts.
I think it to be a reasonable inference that a person applying for insurance on a form

prepared at the head office of an Ontario company would anticipate that the policies which
he was to receive would be governed by the law of that province, and I think that the form
of the policies which were issued in the present case evidences the fact that the insurer
intended to be governed by that law.
For these reasons, as well as for those which have been so fully stated in the reasons
for judgment of Mr. Justice MacKay, I am of opinion that the proper law of these contracts
is the law of Ontario.
It would not be proper to leave this matter without making reference to the alternative
argument advanced by Mr. Sedgwick on behalf of the respondent which was based on
the case of Varas v. Crown Life Insurance Company (Superior Court of Pennsylvania,
October term 1964) and which was to the effect that even if other parts of the policy were
governed by Cuban law the option to take the cash surrender value of the policy was an
irrevocable offer which was accepted in Ontario and that, treating this phase of the
contract separately, it was to be regarded as governed by the law of that province. It is true
that the Varas case affords some authority for this proposition, but it appears to me that
there is nothing in the circumstances of the present case to support the unprecedented
proposition that the proper law of a continuing contract can shift from time to time. The
proper law of these contracts is to be determined as of the date when they were made.
Mr. Sedgwick also advanced the argument that as the appellant has always admitted
the validity of the contract and its liability thereunder and the sole question at issue is
whether the law of Ontario or the law of Cuba applies, the appellant should not have
appealed from the judgment of Stewart J and he points out that no appeal was taken from
the judgments at trial in the cases of Pick and Rossano, supra. In this regard, Mr. Sedgwick
submitted that a judgment of the Court of Appeal or of this court is of no more protection
to the insurance company in the Republic of Cuba than the judgment of Mr. Justice
Stewart and he contended that once the latter judgment was rendered, the lis, in so far as
the insurance company was concerned, disappeared. This argument appears to me to
disregard the realities of the situation. The finding that the law of Ontario applies might
well result in steps being taken by the Cuban authorities which would be prejudicial to
the appellant and I think that it had a very real interest in pursuing the matter. Under
these circumstances, I am of opinion that the appellant clearly had a right to appeal to
the Court of Appeal and to this court.
In view of all the above, I would dismiss this appeal with costs.
Appeal dismissed with costs.
NOTES
1. In Colmenares, Ritchie J uses various expressions to describe the proper law, including
“the law with which [the contract] appears to have the closest and most substantial connec-
tion,” “the locality with which [the contract] is most closely associated,” and the law by which
“the insurer intended to be governed.” Consider how these nuances of phrasing may affect
the way in which the factual elements concerning the contract are weighed against each
other. Consider also how far a court should be influenced by purely “legal” circumstances,
like the style of drafting of the contract, or the fact that a key provision is invalid under one
system of law but not under another. Does the phrasing of the test have a bearing on that
issue as well?
2. In Colmenares, the closest connection was found in one dominant factor, but other
cases involve more weighing of multiple factors. For example, in Lilydale Cooperative Limited
v Meyn Canada Inc, 2015 ONCA 281, the question was what law governed a contract for the
design and supply by an Ontario-based firm of a fryer-and-oven system for an Alberta cus-
tomer’s poultry processing plant located in that province. The court applied the Colmenares
test by looking at the nature and subject matter of the contract (it was important that it was
a contract to design as well as supply, which pointed to Ontario, where most of the design
work was done), the place of performance (again, mostly Ontario for the contract as a
whole), and the domicile and residence of the parties (which was a neutral factor because
the parties were from different provinces). Thus Ontario law governed the contract, which
meant that the Alberta limitation period, which was shorter than Ontario’s and had already
run, did not apply.
Amin Rasheed Shipping Corp v Kuwait Insurance Co

[1984] AC 50 (HL)
[This case is interesting because it led to a deeper than usual discussion about the nature
of the analysis for finding the proper law when the parties have not expressly agreed on
that law. The question was what law governed a policy of marine insurance issued by
Kuwait Insurance, based in Kuwait, to Amin Rasheed, a Liberian-incorporated shipping
company, which had its head office in Dubai. The insurance covered marine and war risks
to the hull and machinery of a cargo vessel, the Al Wahab, which traded in Arabian Gulf
waters only. Amin Rasheed had an English company that was a member of the Rasheed
Group obtain the policy on its behalf through London insurance brokers. The policies
were issued in Kuwait and forwarded to Amin Rasheed through the London brokers. The
premiums were paid to the London brokers. Amin Rasheed claimed that it had suffered
a constructive total loss of the Al Wahab, but the insurer refused to pay. Amin Rasheed
wanted to bring an action in England on the policy. Because Kuwait Insurance had no
presence in England, Amin Rasheed had to seek leave to serve it ex juris. Under the rel-
evant rule of court (RSC, Ord 11, r 1(1)(f)(iii)), leave could only be sought if the contract,
the enforcement of which was being sought, was by its terms or implication governed by
English law. Thus the court had to determine the proper law of the policy. The House of
Lords unanimously held that the policy was governed by English law, but that England
had not been shown to be forum conveniens for the action and so discretion should be
exercised against granting leave to serve the insurer ex juris.
In reaching the conclusion that the policy was governed by English law, Lord Diplock,
with whom three other law lords agreed, took a different route from Lord Wilberforce.]
LORD DIPLOCK:
… So the first step in the determination of the jurisdiction point is to examine the
policy in order to see whether the parties have, by its express terms or by necessary
implication from the language used, evinced a common intention as to the system of law
by reference to which their mutual rights and obligations under it are to be ascertained.
As Lord Atkin put it in Rex v. International Trustee for the Protection of Bondholders
Aktiengesellschaft, [1937] AC 500, 529:
The legal principles which are to guide an English court on the question of the proper law
of a contract are now well settled. It is the law which the parties intended to apply. Their
intention will be ascertained by the intention expressed in the contract if any, which will be
conclusive. If no intention be expressed the intention will be presumed by the court from
the terms of the contract and the relevant surrounding circumstances.
Lord Atkin goes on to refer to particular facts or conditions that led to a prima facie
inference as to the intention of the parties to apply a particular system of law. He gives as
examples the lex loci contractus or lex loci solutionis, and concludes:
But all these rules but serve to give prima facie indications of intention: they are all capable
of being overcome by counter indications, however difficult it may be in some cases to find
such.
There is no conflict between this and Lord Simonds’s pithy definition of the “proper
law” of the contract to be found in Bonython v. Commonwealth of Australia, [1951] AC
201, 219 which is so often quoted, i.e., “the system of law by reference to which the con-
tract was made or that with which the transaction has its closest and most real connec-
tion.” It may be worth while pointing out that the “or” in this quotation is disjunctive, as
is apparent from the fact that Lord Simonds goes on immediately to speak of “the con-
sideration of the latter question.” If it is apparent from the terms of the contract itself that
the parties intended it to be interpreted by reference to a particular system of law, their
intention will prevail and the latter question as to the system of law with which, in the
view of the court, the transaction to which the contract relates would, but for such inten-
tion of the parties have had the closest and most real connection, does not arise.
One final comment upon what under English conflict rules is meant by the “proper
law” of a contract may be appropriate. It is the substantive law of the country which the
parties have chosen as that by which their mutual legally enforceable rights are to be
ascertained, but excluding any renvoi, whether of remission or transmission, that the
courts of that country might themselves apply if the matter were litigated before them.
For example, if a contract made in England were expressed to be governed by French law,
the English court would apply French substantive law to it notwithstanding that a French
court applying its own conflict rules might accept a renvoi to English law as the lex loci
contractus if the matter were litigated before it. Conversely, assuming that under English
conflict rules English law is the proper law of the contract the fact that the courts of a
country which under English conflict rules would be regarded as having jurisdiction over
a dispute arising under the contract (in casu Kuwait) would under its own conflict rules
have recourse to English law as determinative of the rights and obligations of the parties,
would not make the proper law of the contract any the less English law because it was the
law that a Kuwaiti court also would apply.
I can state briefly what Lord Atkin refers to as the relevant surrounding circumstances,
at the time the policy was issued before I come to deal with its actual terms; since although
the policy contains no express provision choosing English law as the proper law of the
contract, nevertheless its provisions taken as a whole, in my opinion, by necessary implica-
tion point ineluctably to the conclusion that the intention of the parties was that their
mutual rights and obligations under it should be determined in accordance with the
English law of marine insurance.
[Lord Diplock noted that the place of performance had lost much of its significance as a
relevant factor because it became common for contracts to be negotiated and concluded
by electronic means between parties in different jurisdictions. The place of performance
was also of little weight in the present case. The agreed place of paying the premiums,
which was in Kuwait, was not even used by the parties.]
The crucial surrounding circumstance, however, is that it was common ground

between the expert witnesses on Kuwaiti law that at the time the policy was entered into
there was no indigenous law of marine insurance in Kuwait. Kuwait is a country in which
the practice since 1961, when it began to develop as a thriving financial and commercial
centre, has been to follow the example of the civil law countries and to embody the law
dealing with commercial matters, at any rate, in written codes. In Kuwait there had been
in existence since 1961 a Commercial Code dealing generally with commercial contracts
but not specifically with contracts of marine insurance. The contract of marine insurance
is highly idiosyncratic; it involves juristic concepts that are peculiar to itself such as sue
and labour, subrogation, abandonment and constructive total loss; to give but a few
examples. The general law of contract is able to throw but little light upon the rights and
obligations under a policy of marine insurance in the multifarious contingencies that may
occur while the contract is in force. The lacuna in the Kuwaiti commercial law has since
been filled in 1980 by the promulgation for the first time of a code of marine insurance
law. This code does not simply adopt the English law of marine insurance; there are sig-
nificant differences. However, it did not come into operation until August 15, 1980, and
it is without retrospective effect. It does not therefore apply to the policy which was
entered into at a time before there was any indigenous law of marine insurance in Kuwait.
I add here, in parenthesis, that this does not mean that before the Marine Insurance
code was promulgated Kuwaiti courts were disabled from trying cases involving contracts
of marine insurance, any more than the Commercial Court in England is disabled from
trying a case involving a contract whose proper law is French law. A number of claims
under marine insurance policies were in fact tried in Kuwaiti courts before the Kuwaiti
code of marine insurance came into effect. The courts were able to undertake this task
because the legal system of Kuwait includes a Code of Conflict of Laws. This incorporates
article 59 which deals with determining the proper law of a contract. The article provides
that in the case of a trans-national contract it
shall, from the standpoint of the substantive conditions governing it and the effects ensuing
from its conclusion, be subject to the law of the state … where the contract is concluded …
unless the contracting parties agree to the application of another law or circumstances suggest
that another law is the one contemplated for application.
This article expressly recognizes the duty of the Kuwaiti courts to give effect to the sub-
stantive law of some state other than Kuwait even where the contract is concluded in
Kuwait if circumstances suggest that the law of that other state was the one contemplated
for application; and, as will be seen when I come to the discretion point, a relevant cir-
cumstance in the case of contracts of marine insurance entered into in Kuwait before the
promulgation of the Kuwaiti Marine Insurance Code was the non-existence in Kuwait of
any indigenous marine insurance law.
• • •
… There was evidence, and even in the absence of evidence your Lordships could I
think take judicial notice of the fact, that the Standard Form of English Marine Policy
together with the appropriate Institute Clauses attached, was widely used on insurance
markets in many countries of the world, other than those countries of the Commonwealth
that have enacted or inherited statutes of their own in the same terms as the Marine
Insurance Act 1906. The widespread use of the form in countries that have not inherited
or adopted the English common law led both Bingham J and Robert Goff LJ to conclude
that the Standard Form of English Marine Policy and the Institute Clauses had become
internationalized; the “lingua franca” and the “common currency” of international insur-
ance were the metaphors that Bingham J used to describe it; while Robert Goff LJ, [1983]
1 WLR 228, 249, identified what he described as the basic fallacy in the argument of
counsel for the assured as being:
that, although the historical origin of the policy may be English and although English law
and practice may provide a useful source of persuasive authority on the construction of the
policy wherever it may be used, nevertheless the use of a form which has become an inter-
national form of contract provides of itself little connection with English law for the purpose
of ascertaining the proper law of the contract.
My Lords, contracts are incapable of existing in a legal vacuum. They are mere pieces
of paper devoid of all legal effect unless they were made by reference to some system of
private law which defines the obligations assumed by the parties to the contract by their
use of particular forms of words and prescribes the remedies enforceable in a court of
justice for failure to perform any of those obligations; and this must be so however wide-
spread geographically the use of a contract employing a particular form of words to
express the obligations assumed by the parties may be. To speak of English law and
practice providing a useful source of persuasive authority on the construction of the policy
wherever it may be used, begs the whole question: why is recourse to English law needed
at all? The necessity to do so is common ground between the experts on Kuwaiti law on
either side; it is because in the absence of an indigenous law of marine insurance in Kuwait
English law was the only system of private law by reference to which it was possible for a
Kuwaiti court to give a sensible and precise meaning to the language that the parties had
chosen to use in the policy. As the authorities that I have cited earlier show, under English
conflict rules, which are those your Lordships must apply in determining the jurisdiction
point, that makes English law the proper law of the contract.
LORD WILBERFORCE:
There is nothing unusual in a situation where, under the proper law of a contract,
resort is had to some other system of law for purposes of the law upon which the proper
law may draw. Such is frequently the case where a given system of law has not yet developed
rules and principles in relation to an activity which has become current, or where another
system has from experience built up a coherent and tested structure—as, for example, in
banking, insurance or admiralty law, or where countries exist with a common legal herit-
age such as the common law or the French legal system. In such a case, the proper law is
not applying a “conflicts” rule (there may, in fact, be no foreign element in the case) but
merely importing a foreign product for domestic use.
There is evidence before us that in relation to insurance, and in particular to cases
where Lloyd’s SG policies are used, courts in Europe do this, and that the courts in Kuwait
would act in a similar way, resorting, as to a source of their own domestic law, to English
law directly or indirectly via Turkish law.
So returning to the choice before us, it is between the proper law being English law,
or the proper law being Kuwaiti law, drawing in part at least on English interpretations.
This analysis, if correct, thus early in the discussion calls in question the validity of one
line of argument used to support the appellants’ case (that the governing law is English
law). That argument is simply (I am tempted to say simplistically) that since this contract
is in English language and form and embodies many technical expressions which can
only be explained by resort to English law, that shows that the proper law, the law govern-
ing the contract, must be English law. There are three reasons why this cannot be correct:
(1) As a matter of reasoning it inverts the process which has to be followed. Instead of
arguing from the proper law to that which governs interpretation it does the reverse. The
form of the contract may indeed be a factor to be considered in the search for the proper
law—it is so here, and an important one, but one to be considered with other factors.
(2) It is inconsistent with authority including that of this House. In Whitworth Street
Estates (Manchester) Ltd. v. James Miller & Partners Ltd., [1970] AC 583 the question for
decision was whether the proper law was that of England or of Scotland. The contract
was on an English RIBA form which had “many connections with English law” (Lord
Hodson, p. 606). It had, in fact, been built up and amended from time to time as the result
of English decisions. The decision, by a scarcely discernible majority, was that the proper
law was English, but this decision was arrived at by a careful weighing of factors, including
the nature and origin of the form. There can be little doubt that on either view, whichever
the proper law was held to be, the contract would have fallen to be interpreted according
to English law, but this circumstance alone was not regarded as decisive. Similarly, in
Compagnie Tunisienne de Navigation SA v. Compagnie d’Armement Maritime SA, [1971]
AC 572, the use of an English form of charter was regarded as a factor to be considered,
and the decision was that the proper law was French. Reliance was placed on some
observations of Lord Wright in the Privy Council case of Vita Food Products Inc. v. Unus
Shipping Co. Ltd., [1939] AC 277, 298. The passage is quoted in part by my noble and
learned friend, Lord Diplock. But, as I understand him, Lord Wright was concerned only
with the difference in terminology between that case and The Torni, [1932] P 78. I do not
read his observations as equating the law governing construction with the proper law: if
they were so intended, I could not, with respect, agree with them.
(3) The simple proposition that because a form of contract has to be interpreted in
accordance with English rules, or even decisions, the proper law must be English law
would have very unfortunate consequences. It is well known, and not disputed, that this
Lloyd’s SG policy is widely used, not only in the British Commonwealth, or countries
under British influence, but elsewhere, including countries in Europe. It is regularly used
in the Middle East and in the Arabian Gulf. It is a strong thing to say that, in the absence
of an express choice of law clause, the proper law of all such policies is to be regarded by
an English court as English.
The wide use made of this form of policy calls, on the contrary, for a careful examin-
ation in each case of the question what proper law is appropriate, the English law form
or derivation of the form being an (important) factor. I do not believe, with respect, that
this argument, which both Bingham J and Robert Goff LJ regarded as important, can be
disposed of by describing it as contending for an internationalized, or floating, contract,
unattached to any system of law—to do so does not do it justice. The argument is that the
Lloyd’s SG form of policy is taken into a great number of legal systems, sometimes by
statute, as in Australia, sometimes as a matter of commercial practice, as in Belgium or
Germany, or in the Arabian Gulf, and that in such cases, though their legal systems may,
and on the evidence do, resort to English law in order to interpret its terms, the contract
may be regarded as an Australian, Belgian, German, etc. contract. What has to be done
is to look carefully at all those factors normally regarded as relevant when the proper law
is being searched for, including of course the nature of the policy itself, and to form a
judgment as to the system of law with which that policy in the circumstances has the
closest and most real connection.
In my opinion, therefore, the classic process of weighing the factors must be followed,
with all the difficulties inherent in the process. They are well and clearly listed in the
judgment of Sir John Donaldson MR. I agree with him that the majority of the ingredients
said to connect the policy with English law are irrelevant or lacking in weight—these
include payment of premiums in sterling in London and the use of J.H. Minet & Co. Ltd.,
London brokers. The significant factors remain: (1) the use of this form of policy expressed
in the English language and requiring interpretation according to English rules and
practice; (2) the nationality of the parties, the defendants being incorporated and carrying
on business in Kuwait and the plaintiffs being Liberian and resident in Dubai (i.e. neither
in England nor in Kuwait); (3) the use of English sterling as the money of account; (4) the
issue of the policy in Kuwait—this I regard as of little weight; (5) provision in claims to
be paid in Kuwait. This, too, is of minor consequence in view of the practice, established
at the time of contracting, of settling claims in London. I think also, for myself, that it is
not without importance that the policy contains no choice of law clause. With a policy in
a form so essentially English, the absence of such a factor leaves the form and language,
as a pointer towards English law, without what one would consider as its natural coun-
terweight. I agree that omission of the Lombard Street or Royal Exchange or London
clause is insignificant, but I regard the incorporation of the Institute Clauses, with express
reference to English law provisions, as important. With no great confidence, and reluc-
tantly differing as to the ultimate conclusion from Bingham J and Robert Goff LJ, whose
reasoning in principle I approve and follow, I have reached the conclusion that English
law is the proper law of this particular contract.
NOTES
1. For cases where the parties have not agreed on the law to govern their contract, Rome I
deploys what might be described as a hierarchy of rebuttable rules. The first component is
a set of rules for different kinds of contracts (art 4(1)). The first three of these say that a con-
tract for the sale of goods is governed by the law of the seller’s habitual residence (para (a));
a contract for the provision of services, by the law of the service provider’s habitual residence
(para (b)); and a contract relating to a right in rem to immovable property or a tenancy of
immovable property, by the law of the country where the property is situated (para (c)).
There are five further rules for other types of agreement. If none, or more than one, of these
“listed category” rules apply, then art 4(2) stipulates that the contract “shall be governed by
the law of the country where the party required to effect the characteristic performance of
the contract has his habitual residence.” Both the rules in art 4(1) for listed types of contract
and the general rule in art 4(2) based on “characteristic performance” are subject to displace-
ment by a Bonython-like (Bonython v Commonwealth of Australia, [1951] AC 201) closest con-
nection rule in art 4(3):
3. Where it is clear from all the circumstances of the case that the contract is manifestly
more closely connected with a country other than that indicated in paragraphs 1 or 2, the law
of that other country shall apply.
Last, there is also a closest connection rule to deal with cases that cannot be resolved by
the preceding rules:
4. Where the law applicable cannot be determined pursuant to paragraphs 1 or 2, the con-
tract shall be governed by the law of the country with which it is most closely connected.
The concept of “characteristic performance,” which is referred to in art 4(2), originated in

Swiss judicial decisions and in scholarly writing: see Collins at para 32-076; Lipstein. It means
the performance that is characteristic of the particular type of contract. Most of the rules in
art 4(1) are premised on this notion. For a contract of sale, the characteristic performance is
the delivery of goods, and so the law of the seller’s habitual residence applies; for a contract
for services, it is the performance of those services, and so the law of the provider’s habitual
residence applies; and so on.
“Characteristic performance” is now also part of Canadian law. The Civil Code of Quebec
provisions on choice of law relating to juridical acts, including contracts, were obviously
influenced by the Rome Convention. Articles 3112 and 3113 state:
3112. If no law is designated in the act or if the law designated invalidates the juridical act,
the courts apply the law of the State with which the act is most closely connected in view of its
nature and the attendant circumstances.
3113. A juridical act is presumed to be most closely connected with the law of the State
where the party who is to perform the prestation which is characteristic of the act has his resi-
dence or, if the act is made in the ordinary course of business of an enterprise, has his
establishment.
For an argument that Australian choice of law in contract should also go in the direction of
the “characteristic performance” model, see Marshall.
The OAS Convention’s test for determining the proper law in the absence of party agree-
ment is as follows (art 9):
If the parties have not selected the applicable law, or if their selection proves ineffective, the
contract shall be governed by the law of the State with which it has the closest ties.
The Court will take into account all objective and subjective elements of the contract to
determine the law of the State with which it has the closest ties. It shall also take into account the
general principles of international commercial law recognized by international organizations.
Nevertheless, if a part of the contract were separable from the rest and if it had a closer tie
with another State, the law of that State could, exceptionally, apply to that part of the
contract.
2. The Civil Code of Quebec supplements the general presumption as to which system of
law has the closest connection with a juridical act, by rules (not presumptions) designating
the governing law of certain types of contract, if the parties have not designated a govern-
ing law. The two main categories are sales and contracts of employment. A contract of sale
is governed by the law of the country where the seller resides or has its place of business, but
the law of the buyer’s residence or place of business is the governing law if the contract was
negotiated and concluded in that country, provides expressly that delivery is to be made
there, or is formed on terms determined mainly by the buyer in response to a call for tenders
(art 3114, para 1). Sales of immovable property are governed by the law of the country where
it is situated (art 3114, para 2). Sales by auction or on a stock exchange are governed by the
law of the country where the auction is held or the exchange is situated (art 3115). A consumer
contract (defined in art 1384) is governed by the law of the country where the consumer is
resident, provided that any one of certain defined connections with that country is present
(art 3117, para 3). A contract of employment is governed, in the absence of a designation by
the parties, by the law of the country where the worker habitually carries on the work or, if
the employee does not habitually work in one country, the law of the country where the
employer has its domicile or establishment (art 3118, para 2).
Rome I has special, and quite detailed, rules in respect of contracts of carriage (art 5),
consumer contracts (art 6), insurance contracts (art 7), and individual employment contracts
(art 8). In respect of the last, the application of the law of the place where the employee
habitually works, etc., is subject to being displaced if the contract is more closely connected
with another country (art 8(4)).
C. Multiple Proper Laws

There is little case law to the effect that different parts of a contract can be subject to differ-
ent proper laws, although both Rome I (arts 3(1) and 4(1)) and the OAS Convention (arts 7(1)
and 9) specifically contemplate this possibility if the parties agree to “split” the proper law
or—exceptionally—if the parties have not agreed on a proper law and a court finds that
different parts of the contract are most closely connected with different systems of law: see
Montreal Trust Co v Stanrock Uranium Mines Ltd (1965), 53 DLR (2d) 594 (Ont H Ct J), where the
possibility was canvassed that bondholders’ rights might be governed by different laws
depending on whether they chose, as they had a right to do, to present the coupons for
payment in Canadian funds in Canada or for payment in American funds in the United
States. The court concluded that all bondholders’ rights were governed by the same proper
law—namely, the law of Ontario—which, it found, had the closest connection with the
contract taken as a whole.
Re Pope & Talbot Ltd

2009 BCSC 1552
WALKER J:
[1] Three insurers who issued Directors and Officers liability (“D&O”) policies in
favour of directors and officers of Pope and Talbot Inc. (“P&T Inc.”) and its subsidiaries,
including Pope and Talbot Ltd. (“P&T Ltd.”), seek a declaration that the proper law of
those policies is the law of the State of Oregon.
• • •
[4] P&T Ltd. is currently in receivership. PricewaterhouseCoopers Inc. (“PWC”) is

the receiver. Proceedings under the Bankruptcy and Insolvency Act, RSC 1985, c. B-3
(“BIA”) are stayed. Previously, P&T Ltd. applied for and received protection from its
creditors pursuant to the CCAA. The Directors Charge established by the Order of Chief
Justice Brenner on November 21, 2007 (during the CCAA proceedings), to respond to
certain types of claims that may be brought against the directors and officers of, inter alia,
P&T Ltd. and its parent company, P&T Inc., remains to be drawn upon. Insolvency
proceedings brought in Delaware on behalf of P&T Inc. have been deferred to the current
Canadian insolvency proceedings by the US Bankruptcy Court for the District of Dela-
ware. That insolvency is akin to Canadian CCAA proceedings as opposed to proceedings
under the BIA.
[5] The Directors Charge may only be drawn upon “to the extent that they [directors
and officers] do not have coverage under any directors’ and officers’ insurance policy, or
to the extent that such coverage is insufficient to pay amounts indemnified” by, inter alia,
P&T Inc. and P&T Ltd.
[6] PWC has asked for a determination of whether any of the policies cover certain
wage claims made by former employees of P&T Ltd. pursuant to s. 119 of the Canada
Business Corporations Act, RSC 1985, c. C-44 (“CBCA”). That determination will be made
at a subsequent hearing. The submissions made on behalf of P&T Inc. and P&T Ltd. on
this application were made by PWC.
[7] The insurers assert that the proper law of the policies is the law of Oregon. The
insureds, which in this case are P&T Inc., P&T Ltd., and the directors and officers of those
companies, argue that the proper law of the policies is the law of British Columbia. They
say that this a case where the language of the policies calls for the application of dépeçage
(a principle which recognizes more than one proper law of a contract), or alternatively,
if there is only one proper law of these policies, it is the law of British Columbia.
• • •
[45] Normally, the obligations of parties to a contract will be governed by the same
proper law. There are circumstances, however, where the proper law of a contract may be
different for different contractual matters or issues. According to J. - G. Castel, at 607:
While most contractual issues are governed by the proper law, the parties can agree that
different contractual issues may be governed by different laws. This is called dépeçage. There
is no authority to prevent the court from deciding that the objectively ascertained proper
law varies according to the contractual issues involved. However, the court will not do this
readily or without good reason.
Apart from express or implied agreement to the contrary, the obligations of both parties
will be governed by the same proper law.
• • •
[52] One English case has recognized that the proper law of a contract may be split even
in the absence of express or implied intention, where a severable part has a closer connection
with one jurisdiction than another. PWC cited the decision of the English Court of Queen’s
Bench in Libyan Arab Foreign Bank v. Bankers Trust Co., [1989] 1 Q.B. 728. There, Staugh-
ton J. recognized, at p. 747, that, “It is possible, although unusual, for a contract to have
a split proper law … : see Dicey & Morris The Conflict of Laws, 11th ed. (1987), p. 1163
and Chitty on Contracts, 25th ed. (1983), para. 2081,” and went on to accept a European
Economic Union Convention on the Law Applicable to Contractual Obligations:
Article 4 of the E.E.C. Convention of 19 June 1980 on the Law Applicable to Contractual
Obligations (Official Journal 1980 No. L.266, p. 1) (as I write not yet in force) provides:
“1. To the extent that the law applicable to the contract has not been chosen in accordance
with article 3, the contract shall be governed by the law of the country with which it
is most closely connected. Nevertheless, a severable part of the contract which has a
closer connection with another country may by way of exception be governed by the
law of that other country.”
That such a solution is not necessarily unacceptable to businessmen is shown by one of the
Australian printed forms of charterparty, which adopts it.
Mr. [Sumption] argues that difficulty and uncertainty would arise if one part of the
contract was governed by English law and another by New York law. I do not see that this
would be so, or that any difficulty which arose would be insuperable.
In essence, Staughton J. concluded that an English court may sever a portion of a contract
and apply a different proper law to it than that which it found applies to the rest of the
contract, on the basis that such portion has a “closer connection” to a different legal regime
(as opposed to first trying to determine the contractual intent).
[53] Determination of proper law in the case at bar, however, may be made on a
construction of the terms of the policies. Policy language contained in the instant policies
shows that the parties intended the application of dépeçage.
• • •
[98] A careful review of the insurance policies shows that the parties anticipated
dépeçage. The parties had ample opportunity to select one proper law, especially the law
of Oregon. They chose not to do so. This fact alone, however, does not lead to the conclu-
sion that the proper law of the policies is BC law.
[99] From examining each policy as a whole, and in particular, contractual language
allowing for different policy sections, claims, and “matters” to be interpreted according
to different legal regimes, it is clear that the parties intended the proper law to be deter-
mined in connection with the substance of the claim made (including relief sought) or
matter at issue.
[100] The instant case is an exceptional one, created by the parties’ contractual intent,
which is expressed through the use of specific language drafted by underwriters following
lengthy negotiations.
[101] For example, in the Federal policy, the parties agreed that voidance of the policy
for misrepresentation on the application for insurance is governed by the “applicable
insurance laws” of Oregon.
[102] Another example is Federal’s obligation to provide coverage for punitive and
exemplary damages is to be construed in accordance with a legal regime that may be
different than the law which governs the coverage section within which that obligation
is found.
[103] XL’s policy, for example, incorporates a definition of “Loss” that states its obli-
gation to provide coverage for “matters” and certain specified claims (set out in the def-
inition of “Loss”) is determined on the basis of their insurability by law. The drafters of
its policy contemplated, at least for certain specific claims, that a legal regime (most
favourable to insurability) may apply that is different than the legal regime by which the
rest of the policy is construed.
[104] My determination regarding the parties’ intent does not mean that the policies
exist in a vacuum. This is not a case, as was posited in Armar Shipping [Co Ltd v Caisse
Algérienne d’Assurance et de Réassurance, [1981] 1 WLR 207 (CA)] (at p. 505) where the
proper law “float[s] until the carrier, unilaterally, makes a decision.” Nor is this is a situ-
ation like that in Amin Rasheed (at p. 895), where the court was being asked to determine,
based on the use of a Lloyd’s form much used on an international scale, that the contract
is “an internationalised, or floating, contract, unattached to any system of law.” The policies
in this case are, in fact, connected to more than one jurisdiction and legal regime, e.g.,
British Columbia, Ontario, Delaware, Oregon, Indiana, New Jersey, Pennsylvania, New
York, and Connecticut. In my opinion, this is an extraordinary case, one where the parties
intended that a court having taken jurisdiction over the claim or matter in dispute would
determine the proper law according to its own laws.
[105] The facts in this case are more compelling than those in Libyan Arab Foreign
Bank (No. 2): here, the parties’ intention to apply dépeçage, and to which subject matters,
is manifest. Except for the application of Oregon insurance law to deal with misrepresenta-
tions contained in the application submitted to Federal, the parties did not specifically
set out the laws from a specific jurisdiction(s) to govern their obligations. Proper law is
left to be determined by the court hearing the dispute to find based on application of its
own laws, taking into account directing language in the policies (e.g., concerning punitive
and exemplary damages in Federal’s policy and those same damages along with multiplied
damage awards, fines, penalties, and taxes in XL’s policy).
[106] Simply because a court takes jurisdiction, it does not necessarily follow that
such jurisdiction’s legal regime will be applied as the proper law. Nor does the prospect
that more than one court can or does take jurisdiction to determine coverage obligations
in the policies affect the analysis. Principles of conflict of laws are flexible enough to deal
with fact patterns where more than one forum can take jurisdiction. In Amin Rasheed, at
p. 888, Lord Diplock said:
One final comment on what under English conflict rules is meant by “proper law” of a
contract may be appropriate. It is the substantive law of the country which the parties have
chosen as that by which their mutual legally enforceable rights are to be ascertained, but
excluding any renvoi, whether of remission or transmission, that the courts of that country
might themselves apply if the matter were litigated before them. For example, if a contract
made in England were expressed to be governed by French law, the English court would
apply French substantive law to it notwithstanding that a French court applying its own
conflict rule might accept a renvoi to English law as the lex loci contractus if the matter were
litigated before it.
Thus, proper law may always be ascertained. Moreover, application of repugnant laws
from a legal regime arguably connected to the policies may be avoided on the ground of
public policy: Vita Food, p. 521.
[107] That the parties in the instant case intended a multi-faceted approach to the
proper law of the contract at the time the policies were issued, tied to the substance of the
claims, matters, or coverage sections in issue, is demonstrated by the circumstances exist-
ing at the time.
[108] D&O liability coverage was being provided on a worldwide basis at a time when
the bulk of P&T Inc.’s revenue (and debt) was generated by its Canadian operations,
through its subsidiary P&T Ltd. Although the majority of claims could thus be expected
to arise from the Canadian operations, underwriters also expressed concern over possible
bankruptcy proceedings in the US. Financial insolvency loomed large. An approach to
proper law that is claim or matter dependent allowed the insurers to provide worldwide
D&O and “Organization” liability coverage in a manner that made commercial sense to
the parties having regard to the particular circumstances existing at the time the policies
were issued. This does not mean that the policies exist in a legal vacuum until a claim is
made against any or all of the insureds. For example, a dispute between Federal or National
Union, on the one hand, and any or all of their insureds, on the other, concerning voidance
for misrepresentation in the application will be determined by Oregon law (as per Endorse-
ments no. 7 and no. 2). For the XL policy, the definition of “Loss” mandates that such a
dispute would be determined according the law to which the entire policy is construed.
[109] Having taken jurisdiction, I must now determine the proper law to be applied.
In BC, the approach to determining the proper law of a contract is set out in Cansulex
[Ltd v Reed Stenhouse Ltd (1986), 70 BCLR 273 (SC)]. I propose to review the factors
outlined by Chief Justice McEachern, in ascending order of importance, to determine the
proper law to be applied to the policies:
(a) Where the policy was made:
The insurers did not suggest that each policy was made in a different jurisdiction,
and instead asserted Oregon was the place where the policies were made. For the
reasons set out in (c) below, I cannot find that the policies were made in Oregon.
The mere fact that the head office of P&T Inc. and the broker’s office were located
in Portland and that Federal had an office in Oregon, does not mean that the con-
tracts were made in Oregon. Section 5 of the Insurance Act deems them to have
been made in BC, a presumption that I find the insurers have not rebutted. This
factor favours BC law.
(b) The form of the policy:
No evidence was tendered to show that the insurance forms, all written in English,
are American, or for that matter, unique to or derived from any particular jurisdiction.
The liability concepts expressed in the policies are well known and widely used in
D&O and organization claims made insurance policies issued in Canada.
The premium amounts and payment obligations of the insurers are expressed
in US dollars, although the latter is expressed in terms of a conversion from foreign
currency to US currency. It is not unheard of for non-American companies to do
business in US currency.
In my opinion, this factor is neutral.
(c) Where the parties’ operations are located:
The insurers’ head offices and principal places of business are located in States other
than Oregon (New York, New Jersey, Indiana, Pennsylvania, and Connecticut).
Apart from Federal, there is no evidence to show that the other insurers had offices
in Oregon. Federal’s decision to accept the risk was made in several jurisdictions:
Los Angeles, Portland, and New Jersey. National Union’s decision to go on risk was
made in New York City. All of XL’s underwriting was carried out in Stamford, Con-
necticut. National Union’s policy was issued out of its office in New York City; XL’s
policy was issued out of its office in Connecticut.
The bulk of the operations of the Pope & Talbot Group were located in British
Columbia. Most of its employees were located, and I infer worked, in this jurisdic-
tion. The head office of the parent, P&T Inc., was located in Portland. It was incor-
porated in Delaware, where its insolvency proceedings were commenced.
In its application for insurance, the strength of the Canadian dollar was cited as
a significant reason for its adverse financial position. The remarks made by Federal’s
underwriters in their underwriting analysis demonstrate that the insurer was aware
that the proportion of P&T Inc.’s operations in BC (through its Canadian subsidi-
ary) were significant enough to result in considerable loss to the company when
the high Canadian dollar made its products from BC less competitive.
The facts surrounding this factor favour British Columbia law. Nothing other
than the location of an office for Federal, some aspect of underwriting by Federal,
the location of P&T Inc.’s head office in Oregon, and a mill operated by P&T Ltd.
in Halsey favours Oregon law. Having turned their minds to proper law, none of the
parties chose Oregon law as the law of their contracts. This omission is telling.
(d) The subject matter of the contract:
The subject matter of the contract is worldwide liability insurance for the directors
and officers of the Pope & Talbot Group as well as direct coverage for the “Organ-
izations” comprising that Group. Without considering the nature and location of
the operations of the Pope & Talbot Group, this factor is neutral. Once they are
considered, the law of BC is favoured as the proper law since the majority of the
operations of the Pope & Talbot Group, including its employees, were located in
BC at the time the policies were made.
(e) Where claims might be expected to arise:
The nature and location of the operations of the Pope & Talbot Group at the time
the policies were issued shows that, with the possible exception of bankruptcy
proceedings in the US, most of the claims could be expected to arise from Canadian
operations. This factor favours BC law.
[110] In the circumstances, I find that the policies have the closest and most substan-
tial connection with BC.
[111] In my respectful view, it would be a facile approach to conclude there is only

one proper law governing each policy, given the extraordinary language used in the pol-
icies. If I had to, then upon the application of the Cansulex factors, I would find the proper
law of the policies to be BC law at the time they were made.
[112] As McEachern C.J.S.C. said in Cansulex, at p. 290: “This is not really a case like
Colmenares because it was a reasonable inference in that case that a person applying in
Toronto to an Ontario corporation for a policy on a Canadian form would be governed
by Canadian law.” The facts of this case are more complex than in Colmenares, where a
standard form life insurance policy issued by a Canadian insurer was in issue.
[113] In this case, the CBCA s. 119 claims, which have no equivalent in Oregon, are
unique to the Canadian operations of the Canadian subsidiary of P&T Inc. They are
brought pursuant to a Canadian statute. The proper law of the policies to determine the
insurers’ coverage obligations for those claims is BC law.
[114] During submissions, the parties referred to the doctrine of reasonable expecta-
tions of the parties to support their position on the proper law. I have determined that
the policies are not ambiguous in terms of proper law. PWC argued that the policies were
ambiguous insofar as the proper law issue is concerned. Even if it could be said that they
are ambiguous—with the exception that in the Federal policy Oregon law is stipulated as
the proper law for Endorsements nos. 7 and 2, which govern the consequences of mis-
representation—application of the doctrine of reasonable expectations of the parties leads
to the same result in respect of the s. 119 claims.
[115] In terms of reasonable expectations, the circumstances extant at the time the
policies were issued (which I have set out in these reasons for judgment) leads me to
conclude that the parties expected BC law to apply to claims flowing out of the operations
of P&T Ltd. For claims arising from operations of P&T Inc., the parties expected the
proper law would be determined by the State in the United States taking jurisdiction.
Federal and National Union are each part of a different group of companies having at
least one other insurance company that carries on business in Canada. XL also has a
related company that carries on business in this country. In my respectful view, the insur-
ers, having chosen to underwrite coverage for P&T Ltd. and its directors and officers,
must be taken to have been aware of s. 5 of the BC Insurance Act and other like provisions
in other provincial insurance statutes, including Ontario (where P&T Ltd.’s registered and
records office is located).
[116] The s. 119 claims are unique to Canada and arise solely out of the BC operations.
The parties would reasonably have expected BC law to apply to determine the insurers’
coverage obligations under the policies.
D. Limits on the Parties’ Freedom to Choose the Proper Law

1. Imposed by Statute
As Vita Food Products itself indicated, a court is bound by any statute of the forum that dic-
tates what the governing law of a contract is to be or that invalidates the parties’ agreement
as to the governing law. Had the case been heard in Newfoundland, the court would have
been bound to apply the Hague rules as implemented in the Carriage of Goods by Sea Act
(Nfld), notwithstanding the parties’ choice of English law as the proper law. More recently, in
Agro Co of Canada Ltd v The “Regal Scout” (1983), 148 DLR (3d) 412 (FCTD), the Hague rules
(now the Hague-Visby Rules) were held to nullify an exclusive choice of forum in favour of the
Tokyo District Court contained in a bill of lading for the carriage of a cargo from Canada to
Japan. The rules (see art 3(8) of the Hague-Visby Rules) make null and void any clause in a bill
of lading that is subject to the rules, where the clause relieves the carrier or the ship from
liability otherwise than as provided in the rules. The Hague-Visby Rules apply wherever the
bill of lading was issued in, or the carriage was from a port in, a contracting state: see art 10.
The court was persuaded that if the case went before the Tokyo District Court the dispute
would be decided according to Japanese law, as the bill expressly provided. Because Japa-
nese law recognized a wider exemption for the shipowner than the Hague rules did, the
court held that giving effect to the choice of forum clause would violate the Hague rules and
therefore the choice of forum clause should be treated as void. This decision followed The
Hollandia, [1983] 1 AC 565 (HL).
Statutory rules invalidating a choice of governing law altogether are relatively rare. More
common are statutes that leave the choice of proper law in place, but require a particular
substantive rule or rules to be applied to the contract irrespective of the proper law: see
Section III.D, “Mandatory Rules of Legal Systems Other Than the Proper Law.”
2. At Common Law
Nike Infomatic Systems Ltd v Avac Systems Ltd

(1979), 105 DLR (3d) 455 (BCSC)
LOCKE J:
[1] This is a motion to set down and dispose of certain points of law prior to trial
pursuant to Rule 34.
[2] The plaintiff (“Nike”) is a British Columbia corporation which leases certain
audio-visual equipment and sells franchises for the operation of such equipment. The
defendant (Avac Systems Ltd.) (“Avac”) is an Alberta corporation and the defendant,
James Wallace (“Wallace”) apparently resides in that province and is a director of the
defendant company.
[3] On September 24, 1976, Nike and Avac signed a “direct distributor lease and service
agreement.” That agreement says in the third paragraph that “… Nike has selected the
distributor as a franchised Nike distributor in reliance upon the personal qualifications
and business ability of the person or persons who are named in paragraph third thereof. …”
[4] Paragraph third says:
THIRD: This agreement is a personal service contract and is entered into by NIKE and
distributor in reliance upon and in consideration of the personal qualifications and the
representations made to NIKE with respect thereto of the following named person or persons
who, it is agreed, will substantially participate, both a record and beneficially in the ownership
of distributorship (hereinafter called Owner or Owners) and/or will actively manage the
distributor operations (hereinafter called distributor operator or operators) … Name …
James Wallace … for the purpose of this Agreement the person or persons designated above
shall be responsible for any act or omission of any of distributor’s agents or employees which
may be contrary to the purposes and objectives of this Agreement or of any provision of this
Agreement.
[5] The motion paper sets out four questions for the decision of the court:
1. What is the proper law of the agreement sued upon? Specifically, what is the effect of
clause 20 in part NL-3 of the agreement which reads:
This Agreement is to be governed by and construed according to the laws of the

Province of BC. If, however, any provision in anywise contravenes the laws of any
state or jurisdiction where this agreement is to be performed, such provision shall be
deemed not to be a part of this agreement therein.
2. If the law of Alberta applies, is the agreement a “franchise” within the meaning of “The
Franchises Act” of Alberta?
3. If the answer to question 2 is in the affirmative what is the effect of Sections 5(1), 28,
32, 34 and 35 of The Franchises Act on the rights of the parties in this action?
4. If the law of Alberta applies to the agreement, and if the personal Defendant has
purported in any way to guarantee the indebtedness of the Defendant company to the Plain-
tiff, as that word is defined in the Guarantees Acknowledgement Act what is the effect of
failure to comply with the provisions of the guarantees Acknowledgement Act of Alberta?
[6] It was agreed that the argument by counsel that the two primary questions were
the determination of the proper law of the contract (Q 1), and if it was found that the
proper law was that of Alberta, what was the effect of the Franchises Act, 1971 (Alta.),
c. 38, on the rights of the parties? (Q 3). Both counsel agree that if Alberta law applied,
the documents sued on were in fact a franchise within the meaning of that statute (Q 2).
[7] As to the first point of the proper law, Q 1 accurately sets out cl. 20 of Part NL-3
of the contract. Were there no second sentence, there would be nothing to decide as the
parties have selected the applicable law. It is the second sentence which provides the dif-
ficulty, because it is conceded that neither ss. 5 [am. 1972, c. 42, s. 3] nor 28 [am. idem
s. 4] of the 1971 Alberta statutes, the Franchises Act, has been complied with.
[8] The relevant parts of that Act read:
2. Any trade in a franchise other than a pyramid sales franchise is exempt from the provi-
sions of section 5
(a) where the franchisor has a net worth on a consolidated basis, according to its
most recent audited financial statement,
(i) of not less than $5,000, or
(ii) of not less than $1,000,000 if the franchisor is at least 80 per cent owned by a
corporation which meets the requirements of subclause (i),
and
(b) where the franchisor
(i) has had at least 25 franchises conducting business at all times during the five-
year period immediately preceding the trade, or
(ii) has conducted business which is the subject of the franchise continuously for
not less than five years immediately preceding the trade, or
(iii) is at least 80 per cent owned by a corporation which meets the requirements
of subclause (i) or (ii)
• • •
5(1) On or after the specified operative date no person shall trade in a franchise in
Alberta either on his own account or on behalf of any other person until there have been
filed with the commission both an application for registration in the prescribed form and a
prospectus in respect to the offer of such franchise and until a receipt for the prospectus has
been obtained from the Registrar.
• • •
32(1) Every person who

• • •
(c) contravenes this Act or the regulations …

• • •
is guilty of an offence and liable on summary conviction to

• • •
(e) a fine of not more than $2,000 or to imprisonment for a term of not more than
one year, or to both, or,
(f) in the case of a company, a fine of not more than $25,000
together with ss. 34 and 35.
[9] The plaintiff argues very simply that by the first sentence of this paragraph the
parties have selected the applicable law, and the second sentence is severable or subordin-
ate. The defendant says first any such expressed intention is overridden by the fact that
the contract, which was signed in Alberta, was meant to be performed in Alberta, and
was an “Alberta contract” which should be governed by the law of that province; second,
the clause was ambiguous; third, the contract should be interpreted contra proferentem.
[10] The leading case is Vita Food Products Inc. v. Unus Shipping Co., [1939] 2 DLR 1,
[1939] AC 277, [1939] 1 WWR 433 (Privy Council). Lord Wright stated the accepted
principle at p. 8:
It is now well settled that by English law (and the law of Nova Scotia is the same) the proper
law of the contract “is the law which the parties intended to apply.” That intention is object-
ively ascertained and if not expressed will be presumed from the terms of the contract and
the relevant surrounding circumstances. But as Lord Atkin, dealing with cases where the
intention of the parties is expressed, said at p. 529 in Rex v. International Trustee for the
Protection of Bondholders Aktiengesellschaft, [1937] AC 500 (a case which contains the latest
enunciation of this principle), “Their intention will be ascertained by the intention expressed
in the contract if any, which will be conclusive.” It is objected that this is too broadly stated
and that some qualifications are necessary. It is true that in questions relating to the conflict
of laws rules cannot generally be stated in absolute terms but rather as prima facie presump-
tions. But where the English rule that intention is the test applies and where there is an
express statement by the parties of their intention to select the law of the contract, it is dif-
ficult to see what qualifications are possible, provided the intention expressed is bona fide
and legal, and provided there is no reason for avoiding the choice on the ground of public
policy. In the present case however it might be said that the choice of English law is not valid
for two reasons. It might be said that the transaction which is one relating to the carriage on
a Nova Scotian ship of goods from Newfoundland to New York between residents in these
countries contains nothing to connect it in any way with English law, and therefore that
choice could not be seriously taken. Their Lordships reject this argument both on grounds
of principle and on the facts. Connection with English law is not as a matter of principle
essential.
[11] In the Vita Food Products Inc. v. Unus Shipping Co. case the bill of lading issued
in Newfoundland stated that: “This contract shall be governed by English law.” The bills
of lading in error did not incorporate the Hague Rules. Section 3 of the Carriage of Goods
by Sea Act of Newfoundland stated that “every bill of lading … issued … shall contain an
express statement that it is to have effect subject to the provisions of the said Rules. …” It
was therefore argued that the bills of lading were illegal in Newfoundland in view of the
failure to comply with a clause paramount. Lord Wright’s answer is paraphrased in part
of the headnote [at 2]:
The proper law of a contract is the law which the parties intended to apply, and where they
have expressed their intention the contract will be governed by the law so chosen if their
expressed intention is bona fide, legal and not against public policy, and it is immaterial that
the contract has no connexion with such law and that it makes foreign statutes applicable to
certain eventualities.
[12] Dicey and Morris, The Conflict of Laws, 9th ed. (1973), adds a qualification at p. 730:
No court, it is submitted, 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.
[13] In the case at bar, the existence of the British Columbia plaintiff makes the con-
nection with British Columbia a real one and the grounds (even if needed) stronger than
in Vita Foods. I do not accept the first argument. As to the qualification, I see nothing in
it unless it could be advanced to indicate that the choice of law was not bona fide but only
an attempt to evade Alberta law. I think the phraseology and use of the word “therein” in
the second sentence shows the complete reverse. This was not really argued; this case can
clearly be distinguished, for example, from such a case as Golden Acres Ltd. v. Queensland
Estates Pty. Ltd., [1969] QLR 378, where the selection of law was not bona fide; and I see
no reason to apply the doctrine I have quoted from Dicey.
[14] As to the argument of ambiguity, if there is one—which I doubt—I decline to
apply it in this case.
[15] As to the third argument of contra proferentem, more often applied to other types
of documents, this interpretation could mean that the parties had signed a worthless piece
of paper. The law, where not compelled by the intractable facts, tries to uphold contracts
and Wilson CJSC, in Sharn Importing Ltd. v. Babchuk (1971), 21 DLR (3d) 349, [1971] 4
WWR 517, dealt with choice of law “in favorem negotii.” The facts are obviously different,
and in that case a witness admitted the contract was intended to form a binding contract.
In the case at bar, para. 3d says that this agreement is a personal service contract, and
while it is also other things, there is a real indication to me that this document was
intended to personally bind the parties. I adopt Wilson CJSC’s reasons for opting for a
system of law which will not defeat the contract but uphold it, and consider that this
principle overrides any contra proferentem interpretation which would void the expressed
intentions of the parties in the light of all the circumstances.
[16] I therefore say the proper law of the contract is British Columbia law.
[17] If I am wrong in my answer to Q 1, I am asked to decide Q 3 which assumes that
Alberta law applies and asked the effects of ss. 5(1), 28, 32, 34 and 35 of the Alberta
Franchises Act on the rights of the parties in the action. This raises two questions: (1) Is
the contract void? (2) Is it voidable?
[Locke J concluded that the statute, on its proper construction, did not render the parties’
contract void or voidable. The statutory penalties were the only consequences of a con-
travention of the Act. Thus the contract should be treated as valid, whether British Col-
umbia or Alberta law applied to it.]
NOTES
1. Golden Acres Ltd v Queensland Estates Pty Ltd, [1969] QLR 378 (SC), which Locke J cited
toward the end of the excerpt above, involved a claim for commission on a sale of a parcel of
land in Queensland. The claimant was a company registered in Hong Kong. It had been
retained by Queensland Estates to sell the property under a deed, executed by the vendor
in Queensland, that provided for “an exclusive world-wide franchise for the sole right to sell.”
Clause 4 of the deed stipulated that “[f]or all purposes arising out of” the agreement it
should be “deemed to be entered into in the colony of Hong Kong.” The vendor argued that
the agreed commission was not payable because a Queensland statute said that “a real
estate agent shall not be entitled to sue for, recover or retain any commission or other
remuneration for or in respect of any transaction” unless the agent was licensed under the
Act. The Hong Kong company said that the clause deeming the deed to have been entered
into in Hong Kong amounted to an express choice of Hong Kong law to govern the contract,
with the result that the Queensland statute did not apply.
Hoare J held that the choice of law was ineffective. He noted that Lord Wright, in Vita
Food Products, had said that the parties’ choice of law had to be bona fide. Hoare J said at
384-85:
It is argued by counsel for the claimant that there is nothing to controvert the bona fides of the
agreement to adopt the law of Hong Kong in the present case because it appears that Mr.
Steeley, who negotiated the agreement on behalf of [the Hong Kong agent], intended to find
purchasers of land in the Far East and a number of buyers were in fact residents of Hong Kong.
However, I am satisfied that Mr. Steeley was fully alive to the legal difficulties which would or
might arise in legally enforcing the agreement because of the provisions of the Queensland law
as to real estate agents and the attempt to invoke the law of Hong Kong was for the express
purpose of avoiding the application of the Queensland law. Without going into details, were it
not for the provisions of Clause 4 of [the deed], the “proper law of the contract” in respect of the
contract contained in that document would clearly be Queensland. I am satisfied that the selec-
tion of a law other than that of Queensland was made for the specific purpose of avoiding the
consequences of illegality which would or might have followed if the Queensland law applied.
The Queensland legislature has seen fit to enact legislation closely regulating the operation
of real estate agents in Queensland. While it may be that some of the evils sought to be avoided
by the enactment would only apply to acts performed in Queensland, one can see that it cer-
tainly could be contrary to the public interest if the operation of the statute as a whole could be
circumvented by the simple device of agreeing that some other law will apply to a contract
which would otherwise be subject to the restrictions imposed by the Act. Whilst appreciating
that public policy can be an unclear concept, generally speaking it would be contrary to public
policy for the legislative intention to be stultified by parties to a contract, of which the proper
law would be Queensland, selecting some other law for the purpose of avoiding the application
of Queensland law. The facts of each case are different and in some circumstances a bona fide
selection by the parties of some other law would not be contrary to public policy even though
some advantage would also accrue from the avoidance of Queensland law.
Hoare J held that in this case the attempted selection of Hong Kong law was “for no other
purpose than to avoid the operation of the Queensland law” and was therefore ineffective
as a mala fide selection.
On appeal, the High Court of Australia (see Freehold Land Investments Ltd v Queensland
Estates Pty Ltd (1970), 123 CLR 418) reached the same result, but simply by construing the
Queensland statute as applicable on its own terms. Walsh J said at 440:
The Parliament of Queensland could have legislated validly for the control of agents who
engaged, either in Queensland or elsewhere, in selling or buying or otherwise dealing with land
or other property situated within the State of Queensland. However the Act does not contain
any express statement by which its general words are confined by some territorial limitation. …
However I am of opinion that it is right to suppose that the relevant provisions of the Act …
should be construed so as to apply only to persons who in Queensland act as real estate agents
or carry on the business of a real estate agent.
The High Court found that, on the facts, the Hong Kong firm had acted as agent “in
Queensland,” and the statute therefore applied to deny it the commission: compare this
reasoning to that of the British Columbia Court of Appeal in Avenue Properties Ltd v First City
Development Corporation (1986), 32 DLR (4th) 40 (BCCA) (reproduced in Section III.D).
2. A case in which a choice of law in favour of Ontario law was applied to a sale of goods,
although the contract had little or no connection with Ontario, is Syncrude Canada Ltd v
Hunter Eng Co Inc (1984), 27 BLR 59 (BCSC), aff’d (1985), 68 BCLR 367 (CA), var’d [1989] 1 SCR
426, 57 DLR (4th) 321. There was probably no material difference in any event between the
Ontario law of sale of goods and the law of Alberta or the other related jurisdictions.
3. Rome I has a provision that limits the effect, if not the validity, of the parties’ choice of
law in respect of what might be called wholly domestic contracts (domestic in the sense of
being confined to a single country, not necessarily that of the forum). Article 3(3) states:
Where all other elements relevant to the situation at the time of the choice are located in a
country other than the country whose law has been chosen, the choice of the parties shall not
prejudice the application of rules of the law of that country which cannot be derogated from by
agreement.
What do you think the “elements relevant to the situation at the time of the choice” would
include?
The OAS Convention has no equivalent rule, but the Civil Code of Quebec does. Para-
graph 1 of art 3111, quoted above in Section II.A, “Express Choice of Law,” sets out the prin-
ciple that the parties are free to choose the law to govern their juridical act, whether or not
the act contains any foreign elements, but para 2 of that article provides:
Where a juridical act contains no foreign element, it remains nevertheless subject to the manda-
tory provisions of the law of the State which would apply in the absence of a designation.
The Hague Principles include only “international contracts” in their scope, and provide in
art 1(2) that a contract is international unless each party has its establishment in the same
state and their relationship and all other relevant elements, regardless of the chosen law, are
connected only with that state.
4. United States conflicts law, as reflected in the Restatement (Second) of Conflict of Laws
(1971), has not embraced the principle of party autonomy as wholeheartedly as the Anglo-
Canadian common law or the conventions. This is partly a question of method. As discussed
in Chapter 9, the Restatement is marked by an avoidance of rules of the classical type,
whereby a category of issues is “governed” by a particular country’s law. Instead, the
approach is to choose, from among the different states’ laws, the appropriate rules of law to
decide the particular issue before the court. This choice is made on the basis of a variety of
factors set out, in general terms, in §6(2). The “protection of justified expectations” is only
one of many factors, the others including, notably, the relevant policies of the forum and
other interested states. Thus, when it came to contracts, the drafters did not refer to “the
contract” being “governed” by one or other law. The rules are framed in terms of the law
governing an individual issue. And, with respect to each issue, the potential had to be rec-
ognized that the parties’ intentions might have to be subordinated to states’ legislative
interests. Here are the two main provisions relating to contracts:
§187(1) The law of the state chosen by the parties to govern their contractual rights and
duties will be applied if the particular issue is one which the parties could have resolved by an
explicit provision in their agreement directed to that issue.
(2) The law of the state chosen by the parties to govern their contractual rights and duties
will be applied, even if the issue is one which the parties could not have resolved by an explicit
provision in their agreement directed to that issue, unless either
(a) the chosen state has no substantial relationship to the parties or the transaction and
there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary to a fundamental policy
of a state which has a materially greater interest than the chosen state in the determination
of the particular issue and which, under the rule of §188, would be the state of the applicable
law in the absence of an effective choice of law by the parties.
• • •
§188(1) The rights and duties of the parties with respect to an issue in contract are deter-
mined by the local law of the state which, with respect to that issue, has the most significant
relationship to the transaction and the parties under the principles stated in §6.
(2) In the absence of an effective choice of law by the parties (see §187), the contacts to be
taken into account in applying the principles of §6 to determine the law applicable to an issue
include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicil, residence, nationality, place of incorporation and place of business of the
parties.
particular issue.
These provisions are followed by a number of sections dealing with specific issues in
certain types of contracts—for example, the validity of contracts for the sale of land,
III. Issues That May Be Referable to a Law Other Than the Proper Law 739
contracts for the sale of chattels, life insurance contracts, and contracts of suretyship. For
each one the Restatement gives a particular law that should be applied, always subject to a
finding that the law of some other state has a more significant relationship under the prin-
ciples stated in §6 to the transaction and the parties.
5. See further Section III.D.
III. ISSUES THAT MAY BE REFERABLE TO A LAW OTHER THAN

THE PROPER LAW
A. Formation
Mackender v Feldia AG
[1967] 2 QB 590 (CA) (footnotes incorporated)
LORD DENNING MR:

We are here concerned with a Lloyd’s jewellers’ block policy. In 1964 underwriters at
Lloyd’s issued a policy covering three European companies who deal in diamonds and
precious stones. One company is incorporated in Switzerland, another in Belgium and
the third in Italy. I will call them the diamond merchants. The policy covered the diamond
merchants against loss or damage to their stock of jewellery and precious stones. It was
a time policy for one year from April 16, 1964, to April 15, 1965. It covered their goods
anywhere in the world. The total sum insured was £450,000. The premium was £4,675.
The policy contained a foreign jurisdiction clause in these terms:
Notwithstanding that this policy has been effected in London, England, this policy shall be
governed exclusively by Belgian law and any disputes arising thereunder shall be exclusively
subject to Belgian jurisdiction, it being agreed that all summonses, notices or processes
requiring to be served upon the underwriters for the purposes of such jurisdiction shall be
deemed to be properly served if addressed to them and delivered to them care of Lloyd’s
agent at Antwerp.
In January 1965 a loss occurred in Naples. Mr. Myer was the representative in Italy of
the diamond merchants. He was in Naples on business, carrying nearly the whole of his
stock with him, diamonds and pearls worth nearly £50,000. All were in a small briefcase
which he carried but he had it tied to his wrist with a steel chain. He was talking to a
friend outside a shop when he was jostled. The briefcase was snatched from him. The steel
chain was broken or cut. All the diamonds and pearls were gone. The diamond merchants
made a claim on Lloyd’s underwriters for the loss. The precise figure was £48,266. The
underwriters engaged assessors to look into the claim. As the result of the investigation
they discovered, so they said, that the diamond merchants made a practice of smuggling
diamonds into Italy. They employed couriers to evade the Italian customs. It is said that
Mr. Myer may be prosecuted in Italy for illegally importing diamonds.
After considerable negotiation, Lloyd’s underwriters rejected the claim. They say that
it is contrary to English policy to insure goods which are intended to be smuggled into a
friendly foreign country. They also say that the diamond merchants were guilty of non-
disclosure and that they failed to disclose that it was in the course of their business to
smuggle goods into a friendly foreign country. Lloyd’s underwriters say that if they had
known of this fact, they would not have undertaken the insurance.
Where is the dispute to be tried? Lloyd’s underwriters would like it tried in England.
They have issued a writ in the English courts asking that the policy be declared void for
illegality and voidable for non-disclosure, and that it be rescinded or annulled. They
applied for leave to serve this writ out of the jurisdiction on the diamond merchants.
Roskill J granted leave ex parte. McNair J, after hearing the diamond merchants, affirmed
the decision. Now the diamond merchants appeal to this court. They point out that the
policy contains the foreign jurisdiction clause and they ask that this dispute be decided
in Belgium. The diamond merchants have themselves filed proceedings in the Belgian
court claiming payment of this £48,266 on account of the loss. They appear to have
obtained leave from the Belgian courts to serve proceedings on Lloyd’s underwriters and
those proceedings are being carried on in Belgium. The question we have to decide is
whether the English proceedings should now be continued.
The rules of court are wide enough to cover the case for service out of the jurisdiction.
RSC, Ord. 11, r. 1(f), says that it is permissible if an action is brought to annul or otherwise
affect a contract “made within the jurisdiction.” This contract was undoubtedly made
within the jurisdiction. The negotiations between the underwriters and the brokers were
here in London, the slip signed here, and the policy issued out of and signed at Lloyd’s
policy signing office.
But although there is jurisdiction to give leave, it is a matter of discretion as to whether
it should be granted. Mr. Dunn for the diamond merchants says that, in view of the foreign
jurisdiction clause, the court should not give leave. But Mr. MacCrindle for the underwrit-
ers says that the foreign jurisdiction clause ought not to be given such importance in this
case. He says that the foreign jurisdiction clause only applies where a contract has been
truly created and formed. Here he says that owing to the non-disclosure, there was no
true contract—no real consent by the underwriters—and that, on this basis, the contract
itself falls down, including even the foreign jurisdiction clause.
I can well see that if the issue was whether there ever had been any contract at all, as,
for instance, if there was a plea of non est factum, then the foreign jurisdiction clause might
not apply at all. But here there was a contract, and when it was made, it contained the
foreign jurisdiction clause. Even if there was non-disclosure, nevertheless non-disclosure
does not automatically avoid the contract. It only makes it voidable. It gives the insurers
a right to elect. They can either avoid the contract or affirm it. If they avoid it, it is avoided
in this sense, that the insurers are no longer bound by it. They can repudiate the contract
and refuse to pay on it. But things already done are not undone. The contract is not
avoided from the beginning but only from the moment of avoidance. In particular, the
foreign jurisdiction clause is not abrogated. A dispute as to non-disclosure is “a dispute
arising under” the policy and remains within the clause: just as does a dispute as to
whether one side or other was entitled to repudiate the contract: see Heyman v. Darwins
Ltd. [[1942] AC 356, 58 TLR 169, 1 All ER 337 (HL)].
It seems to me that Mr. MacCrindle’s argument (to the effect that non-disclosure strikes
out the whole contract) is not well founded. The foreign jurisdiction clause is a positive
agreement by the underwriters that the policy is governed exclusively by Belgian law. Any
dispute under it is to be exclusively by Belgian jurisdiction. That clause still stands and is
a strong ground why discretion should be exercised against leave to serve out of the
jurisdiction.
As to illegality, I would only say this: the underwriters were clearly innocent. The
diamond merchants may have had an unlawful intention to smuggle goods into a friendly
foreign country. But their illegality would not affect the formation of the contract. It would
only make it unenforceable. It would mean that they could not recover on the policy. This
dispute again comes within the foreign jurisdiction clause.
It all comes to this: the English courts have discretion whether or not to give leave to
serve this writ out of the jurisdiction. Seeing that the underwriters have agreed to a foreign
jurisdiction clause which gives exclusive jurisdiction to the Belgian courts, I think we
should allow these disputes to be decided in the courts of Belgium. We should not give
leave to serve this writ out of the jurisdiction.
I would therefore allow the appeal.
DIPLOCK LJ:
The contract which is the subject-matter of these proceedings was undoubtedly made
in England. The slip was initialled in London and the policy signed on behalf of under-
writers by the manager of Lloyd’s policy signing office there. The English High Court
accordingly had power to give leave to serve the writ upon the defendants outside the
jurisdiction, and unless service is set aside and the action stayed, it will have jurisdiction
to hear and to determine it. But leave to serve a writ outside the jurisdiction is always
discretionary. The jurisdiction which the High Court claims over defendants who are
neither present nor ordinarily resident in this country, when it grants leave under RSC,
Ord. 11, is wider than any corresponding jurisdiction which it recognizes as possessed
by a foreign court over defendants who are not present or ordinarily resident in the foreign
state. And because it is a claim which conflicts with the general principles of comity
between civilized nations, it is one which should be exercised with caution. I cannot do
better than echo the words of Scott LJ in George Monro Ltd. v. American Cyanamid &
Chemical Corporation [[1944] KB 432, 60 TLR 265, 266, [1944] 1 All ER 386, 388 (CA)]:
Service out of the jurisdiction at the instance of our courts is necessarily prima facie an
interference with the exclusive jurisdiction of the sovereignty of the foreign country where
service is to be effected. I have known many continental lawyers of different nations in the
past criticise very strongly our law about service out of the jurisdiction. As a matter of inter-
national comity it seems to me important to make sure that no such service shall be allowed
unless it is clearly within both the letter and the spirit of RSC, Ord. 11.
The application for leave to serve a writ outside the jurisdiction under RSC, Ord. 11,
is made ex parte. On that application, which in the present case came before Roskill J, the
only question on which he had to satisfy himself was whether the subject-matter of the
action prima facie falls within the ambit of RSC, Ord. 11. If it does and leave is granted,
the question whether the court in its discretion should allow the action to proceed falls
for decision when the defendant has entered a conditional appearance and applies to have
service set aside and the proceedings stayed. The application in this case came before
McNair J and it is his exercise of his discretion in refusing the application which this court
is asked to review.
The defendants’ case is simple. It needs no subtlety of exposition.

You underwriters, they say, in order to get this business, agreed with us, who carry on busi-
ness in civil law countries, that the policy should be governed by Belgian law upon which
we can readily obtain advice from our own lawyers at home, and, what is more important,
you undertook to accept the exclusive jurisdiction of the Belgian courts, with which our
lawyers at home are familiar, to hear and determine any disputes arising under it. All we ask
is that you should keep your word.
The plaintiffs’ answer is that the foreign jurisdiction clause does not apply to the particular
disputes which they seek to have determined in this section in the English court. They
claim that the policy either was void for illegality in English law or was voidable for non-
disclosure by the assured of material facts, and they have elected to avoid it. Disputes of
these kinds, they contend, are not disputes arising under the contract but are disputes as
to whether there is a contract at all.
I will deal first with illegality in isolation from non-disclosure. The policy was a jewel-
lers’ block policy insuring the stock-in-trade of the defendants against all risks, with
certain exceptions. It is alleged by the underwriters that the defendants in the course of
their business habitually traded in uncustomed goods, that is to say, they smuggled them
across the frontier into Italy in contravention of the Italian revenue law. It is relevant to
note that one of the excepted perils under the policy is “confiscation or requisition or
destruction of or damage to property by or under the order of any government or public
or local authority.” The insurance is not one of indemnity against the consequences of
smuggling. How then is the claim that the policy was void for illegality put? It is said that
the adventure insured was “tainted” with illegality, not under Belgian law but under
English law. This is a picturesque metaphor which invites analysis. English courts will not
enforce an agreement, whatever be its proper law, if it is contrary to English law, whether
statute law or common law; nor will they enforce it even though it is not contrary to
English law if it is void for illegality under the proper law of the contract. Furthermore,
subject to one exception, the English courts will not enforce performance or give damages
for non-performance of an act required to be done under a contract, whatever be the
proper law of the contract, if the act would be illegal in the country in which it is required
to be performed. The exception, the precise scope of which is unsettled and need not be
determined in the present case, is whether the illegality is a breach of a revenue or fiscal
law of a foreign state.
But unenforceability and voidness are not the same concept. To analyze the difference
it is convenient to distinguish between an “agreement,” which requires no more than a
consensus ad idem between the parties, and a “contract,” which is an agreement plus
something more. Where an agreement is wholly unenforceable because it is contrary to
English law, it may, if the proper law of the agreement is itself English law, accurately be
said to be void as a contract, that is, not to be a contract at all. For a contract is a species
of agreement which gives rise to legally enforceable rights and duties; and an agreement
which is contrary to English law, if that is also its proper law, gives rise to none. But if an
agreement, though contrary to English law, e.g., a marriage brokage contract, is not illegal
by its proper law, it cannot properly be said to be void and thus not a contract at all. It
does give rise to rights and duties which are legally enforceable elsewhere than in England.
It is a contract, but one which is unenforceable in the English courts. A fortiori a contract
which is not illegal by its proper law, but requires for its performance an act to be done
which would be illegal under the law of the country where the act is required to be done,
is not void. It is a contract which is, in a particular respect only, unenforceable in the
English courts. This is to be contrasted with an agreement which under its foreign proper
law is illegal and incapable of giving rise to legally enforceable rights and liabilities under
that law. Since the foreign proper law must be looked to for the legal effects of the agree-
ment, such an agreement may properly be said to be void, i.e., not to be a contract at all.
The proper law of the agreement is thus crucial to the question whether an agreement,
which would be illegal under English law, is void as a contract. The prima facie rule of
English conflict of laws—more liberal in this respect than many Continental systems—is
that the proper law of a contract is that system of law which the parties themselves have
agreed shall regulate the legally enforceable rights and duties to which their agreement
gives rise. In the present case the parties have expressly agreed that the proper law of the
policy shall be Belgian law. That they have so agreed must be treated as accepted, so far
as the claim that the policy is void for illegality considered in isolation is concerned. What
is in dispute in this claim is whether their undoubted agreement, embodied in the policy,
which includes their choice of Belgian as its proper law, does give rise to any legally
enforceable rights and duties under Belgian law. That in my view is a dispute arising under
the agreement, i.e., policy. And that dispute, according to the terms of the policy, must
be decided according to Belgian law. The Belgian courts are not only a convenient forum
for its resolution: they are the forum to which both parties agreed to submit. It is immater-
ial whether the English courts would enforce the contract at all or any particular claim
under it. No one is asking them to do so.
A claim that a contract is void for illegality does not raise any issue as to whether or
not the parties in fact agreed to the terms of the policy, including those in the foreign
jurisdiction clause. It concedes that they did, but asserts that their agreement gave rise to
no legally enforceable rights or duties. It thus raises no dispute about the consensus ad
idem of the parties as to the exclusive jurisdiction of the Belgian courts. But the alternative
claim of the underwriters to avoid the contract for non-disclosure of a material fact, it
has been ably argued on their behalf, does raise the question as to whether there was a
contract at all, and thus the question whether there was any agreement that Belgian law
should be the proper law of the contract. This question, it is argued, is to be determined
not by Belgian law but by a putative objective proper law, a concept which I find confusing,
but which is said in this case to be English law. Furthermore, it is contended that such a
question, by whatever law it is to be determined, is not a dispute arising under the policy
within the meaning of the foreign jurisdiction clause.
This argument, I think, is misconceived. It is based upon an imprecise use of the phrase
“avoid the contract.” Where acts done in England, in this case the oral negotiations
between the assured’s broker and the underwriters, the initialling of the slip and the
signing of the policy, are alleged not to have resulted in an agreement at all (i.e., where
there is a plea of non est factum) and the question is whether there was any real consensus
ad idem, it may well be that this question has to be determined by English law and not
by the law which would have been agreed by them as the proper law of the contract if
they had reached an agreement. But that is not the position when underwriters seek to
repudiate a contract upon discovering that material facts were not disclosed to them by
their assured before the policy was entered into.
Where English law is the proper law of a contract of insurance and so regulates the
legally enforceable rights and duties of the parties arising under their agreement, among
the incidents or legal characteristics in English law of a contract of insurance (which
distinguishes it from most other contracts) is the right of the insurer, if he discovers that
some material fact has not been disclosed to him by the assured during the negotiations
for the contract, to elect either to continue to perform the contract and to require its
continued performance by the assured, or to repudiate the contract, that is to say, to treat
it as at an end so far as concerns any future performance. If he elects to repudiate the
contract, consequential rights and duties as respects acts already done under the contract,
such as premiums already paid or claims already met, are other incidents or legal char-
acteristics of the contract under English law. Any disputed claim by an insurer to exercise
all or any of these rights which arise upon discovering that there has been non-disclosure
of a material fact is in my view clearly a dispute under the contract and falls within the
foreign jurisdiction clause.
The fallacy in the argument to the contrary is that when what is said to be a “voidable”
contract is said to be “avoided,” that does not mean that the contract never existed but
that it ceases to exist from the moment of avoidance, and that upon its ceasing there may
then arise consequential rights in respect of things done in performance of it while it did
exist which may have the effect of undoing those things as far as practicable. It is some-
times sought to assimilate the concept of avoidance of a voidable contract to the concept
of non est factum which prevents a contract ever coming into existence at all. It is argued
that innocent misrepresentation or, in the case of contracts of insurance, non-disclosure
of material facts vitiates consent and makes the apparent consent of the party misled, no
consent at all. But this is specious. What is really meant is that the party did in fact consent
but would not have done so if he had known then what he knows now. Fraud may raise
other considerations into which it is not necessary to go.
Whether one of the legal incidents or characteristics of the contract of insurance in
the present case is that the underwriters are entitled to repudiate for the non-disclosure
of the particular facts which they alleged have not been disclosed must be determined by
the proper law of the policy, which is Belgian law and not English law. So here again the
Belgian courts, to which the parties have expressly agreed to submit this kind of dispute,
is a forum conveniens.
Finally, is this a case where we should interfere with the exercise of his discretion by
McNair J? I agree with my Lord that it is. The judge sets out three reasons which influ-
enced him in exercising his discretion to allow the English action to proceed. The first
reason was that in his view neither of the disputes were disputes which fell within the
foreign jurisdiction clause. I have already indicated that in my view he was mistaken in
law in so holding. The second reason was his view upon the evidence before him at that
time that the Belgian courts would not have jurisdiction to determine the disputes which
the underwriters desired to raise in the English action. Further evidence has been filed
to show that in that respect he was mistaken upon the facts as to Belgian law. The third
reason, as I understand it, was that he took the view that there would be no inconvenience
in having two sets of proceedings because in point of fact the proceedings in England and
the proceedings in Belgium could not deal with the same issues. That was founded upon
the view that the Belgian courts had no jurisdiction to entertain the dispute which the
underwriters desired to raise.
I think, therefore, that the judge exercised his discretion upon a wrong view of English
law and a wrong view of the facts as to Belgian law.
[Diplock LJ concluded that the Court of Appeal should exercise its discretion in place of
the judge and deny leave to serve ex juris. Russell LJ gave a short concurring judgment.]
NOTES
1. Suppose that the issue had been whether the parties had reached an agreement, in
the sense of a consensus, at all. Diplock LJ says that in such a case “it may well be that this
question has to be determined by English law and not by the law which would have been
agreed by [the parties] as the proper law of the contract if they had reached an agreement.”
He was responding to counsel’s argument that voidness for illegality should be decided by
“a putative objective proper law, a concept which [Diplock LJ found] confusing, but which is
said in this case to be English law.” What do you suppose counsel meant by the concept of a
putative objective proper law? Would it be possible to define it in a non-confusing way? See
Libling; see also Albeko Schuhmaschinen AG v Kamborian Shoe Machine Ltd (1961), 111 LJ 519
(QBD), a brief reported case that raised the issue whether consensus had ever been reached
if the acceptance had been posted but not received. The two countries involved, England
and Switzerland, had different rules about whether mere posting of an acceptance was suf-
ficient to conclude a contract. The judge applied the Swiss rule (that there was no contract)
because Swiss law was, in his view, the proper law of “the contract” (the one that was not
formed), which was for a Swiss company to act as distributor in Switzerland for an English
company’s equipment: see generally Low.
2. In “battle-of-the-forms”-type cases, there may well be issues about whether a choice
of law clause in one or the other party’s form became part of the contract. This may be a
formation question—what documents formed part of the agreement?—or a question of
construction—whether the agreement includes two contradictory choice of law clauses.
Shipping cases, with their complex chains of standard form agreements, are a fertile source
of such problems: see Saint John Shipbuilding & Dry Dock Co v Kingsland Maritime Corp (1981),
126 DLR (3d) 332 (FCA) (which of two documents constituted the actual agreement) and
Canastrand Industries Ltd v The Lara S, [1993] 2 FCR 553, 60 FTR 1, aff’d (1994), 176 NR 31 (FCA)
(conflicting choice of law clauses in different documents that were part of the agreement).
The choice of law issue with respect to the formation or interpretation question is not really
discussed in either case; the court just decides the question according to, apparently, the lex fori.
The Hague Principles, in art 6(2), take a pragmatic approach to conflicting choices of law
made in standard forms. If under both purportedly chosen laws one of the sets of standard
terms prevails, the law designated in that set is the proper law. If under the purportedly
chosen laws different standard terms prevail, or no standard terms apply under either or
both laws, there is no choice of law.
3. Mackender involved an express choice of judicial forum. In the absence of such an
agreed choice, jurisdiction may turn on issues of forum non conveniens, and here, too, the law
governing the agreement or its formation may be relevant. In Eastern Power Limited v
Azienda Comunale Energia and Ambiente (1999), 178 DLR (4th) 409 (Ont CA), a Canadian plain-
tiff sued an Italian defendant on a letter of intent regarding a future joint venture agree-
ment, which was never concluded, to construct and operate an electricity generating plant
near Rome, Italy. In upholding a stay of the proceeding on the ground of forum non conveni-
ens, the court relied on, inter alia, the factors that any contract emerging from the letter of
intent had been formed in Italy, where the faxed acceptance was received, and that Italian
law was the proper law of the letter of intent and would have been the expressly chosen
proper law of the eventual joint venture agreement.
4. Questions of formation under Rome I are covered by art 10, which embodies a com-
bination of the “putative proper law” idea with a special rule to protect an individual from
being taken to consent when, under that person’s home law, there would be no consent.
1. The existence and validity of a contract, or of any term of a contract, shall be determined
by the law which would govern it under this Regulation if the contract or term were valid.
2. Nevertheless a party, in order to establish that he did not consent, may rely upon the law
of the country in which he has his habitual residence if it appears from the circumstances that it
would not be reasonable to determine the effect of his conduct in accordance with the law
specified in paragraph 1.
The Hague Principles, in art 6, take a similar approach to whether the parties to a com-
mercial contract have agreed on a choice of law. The basic rule is to apply “the law that was
purportedly agreed to” (art 6(1)). Article 2 supplements this by providing that if it would not
be reasonable to apply the purportedly chosen law to the issue whether a party consented
to the choice, the issue of consent is to be determined by the law of the state in which that
party has its establishment.
Article 12 of the OAS Convention is similar, with a somewhat looser rule dealing with the
issue of consent:
The existence and validity of the contract or of any of its provisions, and the substantive validity
of the consent of the parties concerning the selection of the applicable law, shall be governed
by the appropriate rules in accordance with chapter 2 of this Convention.
Nevertheless, to establish that one of the parties has not duly consented, the judge shall
determine the applicable law, taking into account the habitual residence or principal place of
business.
B. Contractual Capacity
Contractual capacity is a potential issue for entities like corporations and state agencies, but
the choice of law issue is usually straightforward. The legal status and capacity of a legal
entity other than a natural person is a matter for the law under which the entity was incorpor-
ated or otherwise created: see Chapter 11, Section IV, “Parties,” which touches on this issue.
However, the law that should govern a natural person’s capacity to contract is less obvious.
Probably because most legal systems now impose few restrictions on capacity to contract,
other than for minors, there is virtually no modern case law that discusses which law applies
to an issue of capacity. The only Canadian case is Charron v Montreal Trust Co, [1958] OR 597, 15
DLR (2d) 240 (CA). The question was the validity of a separation agreement entered into by a
husband and wife who had been domiciled (it was assumed for the purposes of argument) in
Quebec throughout their time together, although from their marriage in Ottawa in 1908 until
their separation in 1920 they lived in Ontario. It was argued on behalf of the husband’s estate,
which was sued for arrears under the 1920 agreement, that the husband had lacked the cap-
acity to enter into the separation agreement under the law of his domicile—Quebec. The
court held that the issue, which it treated as one of personal capacity (rather than essential
validity, which would arguably have been a more accurate characterization), should be
decided by Ontario law. Morden JA said at 244-45:
Apart from marriage and marriage settlements in which situations capacity is regulated,
broadly speaking, by the lex domicilii, there is no clear decision whether capacity to contract is
to be tested by the lex loci contractus or the lex domicilii. Examples could be given in particular
instances of the unfairness and unreality of applying one law or the other. To vary the facts of
the instant case, let us assume the spouses had been both domiciled and resident in Quebec
and had come to Ontario for a short visit during which the agreement under consideration was
made; upon such assumption, in my opinion, it would be against common sense to decide the
parties’ capacity by Ontario law. In the present case, the marriage had taken place in Ontario
and for many years thereafter and until the date of this agreement the parties had cohabited in
Ontario. It would be unrealistic in the circumstances here to apply Quebec law to decide the
parties’ capacity. The solution to this problem, in my opinion, is that adopted by the learned
writers on private international law and to decide that a party’s capacity to enter into a contract
is to be governed by the proper law of the particular contract, that is the law of the country with
which the contract is most substantially connected [citations omitted] … . In this case there is
no doubt that the proper law of the agreement was the law of Ontario, and by that law, neither
party to the agreement lacked the necessary capacity.
Note that the proper law referred to in this passage was the objective proper law of the con-
tract, not a proper law chosen by the parties. Presumably the parties could not give them-
selves capacity by agreeing on a different proper law (different, that is, from the law with
which the contract was most substantially connected) with a more liberal rule as to capacity.
Rome I expressly excludes from its scope questions relating to the status or legal capacity
of natural persons: see art 1(2)(a), but does include the following rule as art 13:
In a contract concluded between persons who are in the same country, a natural person who
would have capacity under the law of that country may invoke his incapacity resulting from the
law of another country, only if the other party to the contract was aware of that incapacity at the
time of the conclusion of the contract or was not aware thereof as a result of negligence.
The OAS Convention, art 5(a), similarly excludes questions of “the capacity of the parties,
or the consequences of nullity or invalidity of the contract as a result of the lack of capacity
of one of the parties.” It has no equivalent to art 13 of Rome I.
C. Formalities
Greenshields Inc v Johnston

(1981), 119 DLR (3d) 714 (Alta QB), aff ’d 1981 ABCA 332, 131 DLR (3d) 234
MEDHURST J:
[1] The plaintiff company Greenshields Incorporated carries on business as an invest-
ment dealer and stockbroker in a number of cities across Canada, including the cities of
Toronto in the province of Ontario and Edmonton in the province of Alberta.
[2] R.H. Johnston & Associates Ltd. (hereinafter called the defendant company) is a
company incorporated under the laws of the province of Alberta and the defendant
Raymond H. Johnston (hereinafter called Johnston) is the principal officer of the defend-
ant company and resides at Sherwood Park near Edmonton, Alberta.
[3] The plaintiff claims the sum of $14,410.96 and interest from the defendants as a
result of the following transactions that took place in the latter part of 1977 and early 1978.
[Medhurst J reviewed some of the evidence with respect to these transactions, which
involved the purchase by Johnston’s company of three lots of debentures.]
[13] The statement which has been entered as ex. 5 shows the amount owing by the
defendant company to the plaintiff on January 18, 1978, was $14,410.96. I am satisfied
that this debt has been proven against the defendant company.
[14] The more difficult problem to resolve is the claim by the plaintiff against the
defendant Johnston under the guarantee executed June 8, 1977, and entered as ex. 15.
[15] It was argued by counsel for the defendant Johnston that the guarantee is void as
a result of non-compliance with the Guarantees Acknowledgment Act, RSA 1970, c. 163,
and further it is void for uncertainty.
[16] In reply, counsel for the plaintiff stated that the guarantee is to be construed
according to the laws of the province of Ontario and that it does not need to comply with
the requirements of the Alberta Guarantees Acknowledgment Act, and that it is not void
for uncertainty.
[17] The guarantee was signed by the defendant Johnston on June 8, 1977, and he
stated in reply to the questions put to him on examination for discovery that he under-
stood the nature of the document. The document contains the following provision: “This
guarantee shall be construed in accordance with the laws of the province of Ontario.”
[18] It is admitted that this document does not comply with the Guarantees Acknow-
ledgment Act of Alberta in that there was no compliance with the requirement for the
person signing the obligation to appear before a notary public, as set out in s. 3.
[19] Counsel for the plaintiff submits that this is not necessary inasmuch as the applic-
able law is that of the province of Ontario. Evidence was given that there is no legislation
in Ontario similar in effect to the Guarantees Acknowledgment Act of Alberta. It is only
necessary that a contract of guarantee comply with the Statute of Frauds, which statute is
applicable in the province of Ontario.
[20] The question is whether a guarantee executed in Alberta, containing a choice of
law clause in favour of Ontario, is valid if it does not comply with Alberta law but does
meet Ontario requirements. In Castel, Introduction to Conflict of Laws, 4th ed. (1978), at
p. 166, acknowledgment before a public official is a question of formal validity of a contract.
A contract is formally valid if it meets the requirements of either (a) the law of the place
where it was made, or (b) the proper law of the contract. In this case the guarantee was
made in Alberta and it does not comply with the Alberta statute. It is not valid by (a), the
lex loci contractus. It remains to be ascertained whether it complies with (b), the proper
law. First the proper law must be ascertained. Then if it is different from Alberta law, it will
be applied unless it contravenes considerations of public policy. In R v. Int’l Trustee for the
Protection of Bondholders Aktiengesellschaft, [1937] AC 500 at p. 529, Lord Atkin said:
The legal principles which are to guide an English Court on the question of the proper law
of a contract are now well settled. It is the law which the parties intended to apply. Their
intention will be ascertained by the intention expressed in the contract, if any, which will be
conclusive. (The italics are mine.)
[21] In Dicey and Morris on the Conflict of Laws, 8th ed. (1967), a footnote at p. 692
indicates that Lord Wright later suggested that the foregoing must have been intended to
mean “prima facie conclusive.”
[22] Lord Wright expanded on his own views in Vita Food Products Inc. v. Unus Ship-
ping Co. Ltd., [1939] 2 DLR 1, [1939] AC 277, [1939] 1 WWR 433, a case of a contract to
ship goods from Newfoundland to New York, the contract being expressed to be governed
by English law. After quoting Lord Atkin’s dictum from the Bondholders case, supra, he
remarked at p. 290:
It is objected that this is too broadly stated and that some qualifications are necessary. It is
true that in questions relating to the conflict of laws rules cannot generally be stated in
absolute terms but rather as prima facie presumptions. But where the English rule that inten-
tion is the test applies and 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 expressed is bona fide and legal, and provided there is no reason for avoiding
the choice on the ground of public policy.
[23] It has been suggested (Castel, Conflict of Laws, 4th ed. (1978), at pp. 12-13) that
the foregoing represents the law in Canada. The issue, for the present purposes, becomes:
was the choice of Ontario law bona fide and legal, and is there no reason for avoiding the
choice on the ground of public policy?
[24] Dicey and Morris on the Conflict of Laws, 8th ed. (1967), suggest at pp. 699-700
that there may be some limitation on the parties’ ability to choose a law with no relation
to the contract:
The significance of the problem derives from a dilemma between the need for preventing
the parties from evading the mandatory provisions of the law with which the contract is
objectively most closely connected, and the need for enabling them to submit their contract
to a law connected with it through financial, commercial or other links not relevant to the
decision of the court and hence not disclosed to it.
No court, it is submitted, 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.
It is true that, in the past, English courts have not developed a doctrine of law evasion in
connection with the conflict of laws. Nevertheless, no one can maintain that persons who
really contract under one law can, by pretending that they are contracting under another
law, render valid an agreement which the former treats as void or voidable. If it is clear that
they did in fact contract under one law, no declaration of intention to contract under another
law, so as to give validity to the contract, will avail them anything. An evasive choice of law
is unreal and unreasonable and therefore without effect. Hence, the court “will not necessarily
regard” an express choice of law “as being the governing consideration where a system of
law is chosen which has no real or substantial connection with the contract looked upon as
a whole.” (Citing Re Claim by Helbert Wagg & Co. Ltd., [1956] Ch. 323 at 341.) The reason
is that the lack of connection may, in a given situation, be evidence of an evasive intent.
[25] In order to determine whether the law of Ontario regarding the guarantor’s right
to sue on a guarantee is contrary to Alberta public policy, it is necessary to define the
phrase “contrary to the law and policy.” In National Surety Co. v. Larsen, [1929] 4 DLR
918 at p. 941, [1929] 3 WWR 299, 42 BCR 1, the British Columbia Court of Appeal stated:
I do not think we should say that if the transaction is simply against “public policy” as we
view it, our Courts should refuse to enforce the mortgage security. The writers on conflicts
of laws do not confine the principle to questions of public policy solus. They speak of “essen-
tial public or moral interest,” and contracts “founded in moral turpitude,” and “inconsistent
with the good order and solid interests of society.” All such contracts … are void here. One
must look at the facts of the case under consideration and inquire if what took place … is
within the mischief of the phrases quoted.
[26] The Saskatchewan Court of Appeal in Canadian Acceptance Corp. Ltd. v. Matte
et al. (1957), 9 DLR (2d) 304, 22 WWR 97, [1956-60] ILR 1023n, likewise declared that
the courts would only refuse to apply foreign law where it conflicted with the “essential
public or moral interest” of the lex fori.
[27] In National Surety Co. v. Larsen, the court held that the law of Washington which
permitted indemnification for bail bonds should be applied. Under the law of British
Columbia, such a contract for indemnity was prohibited. Since the offence was committed
in Washington and the bail proceedings took place there, the Chief Justice of the British
Columbia Court of Appeal stated that British Columbia had no policy with regard to the
rules governing bail in Washington. The other members of the court simply concluded
that the court would not be justified in declining to enforce the contract since the Wash-
ington rule of law did not violate an “essential principle of justice” in British Columbia
and was not “inherently repugnant to the moral and public interests” of the province.
[28] A similar conclusion was reached by the court in Canadian Acceptance v. Matte.
In that case, it was argued that Manitoba legislation could not be applied to resolve the
dispute since it was contrary to the fundamental public policy of Saskatchewan. By per-
mitting a conditional sales vendor to sue the buyer for any deficiency which remained
after the goods had been sold, the Manitoba provision conflicted with the Saskatchewan
Limitation of Civil Rights Act. Martin CJS rejected this argument, however, stating that
the authorities demonstrated that the public policy rule had a limited application. The
court observed that the types of contracts to which the rule had been applied were those
concerning matters such as restraint of trade, champerty, interference with criminal
prosecution and collusion for the purpose of obtaining a divorce. The doctrine of policy
only seems to be invoked where the foreign law offends a principle of morality or justice
which commands almost universal recognition (see Dicey and Morris at p. 72). According
to Dicey and Morris at pp. 72 and 75:
… it is now well settled that the doctrine of public policy should only be invoked in clear
cases in which the harm to the public is substantially incontestable, and does not depend
upon the idiosyncratic inferences of a few judicial minds. …
In general, it is certainly untrue that contracts governed by a foreign law will not be
enforced in England if they are contrary to some imperative rule of English domestic law
which the parties to an English contract cannot disregard.
[29] In this instance the parties agreed that the agreement of guarantee would be
“construed in accordance with the laws of the province of Ontario.”
[30] There is a connection with the province of Ontario. The head office of the plaintiff
company is located in that province. The bond orders were placed through the office in
Toronto and confirmation vouchers were sent to the defendants from there. It cannot be
said that this choice of law clause was inserted for the purpose of evading the Alberta
statute.
[31] Furthermore, this clause would not offend the rules of public policy as they apply
to the circumstances in this case.
[32] This is not a situation where there would be substantial harm by invoking the
law of another jurisdiction.
[33] Accordingly the plaintiff will have judgment against the defendants for the amount
of its claim $14,410.96, together with interest thereon at the rate of 10% per annum from
February 1, 1978, with costs on the appropriate scale, no limiting rule to apply.
Judgment for plaintiff.
In affirming Medhurst J’s judgment, Stevenson JA (for the Court of Appeal) said:
We are in substantial agreement with the conclusions in the trial judge’s considered
judgment.
The first ground which the appellant urged was that the trial judge erred in finding that the
proper law of the contract was Ontario. In the light of the Drew, Brown and Vita cases we are of
the view that in these circumstances (which include a connection with the province of Ontario
as well as the express provisions of the contract), the proper law is that of Ontario.
The second major question involves the characterization of those portions of the Guarantees
Acknowledgment Act, RSA 1970, c. 163, requiring attendance before a notary public. In our view
those provisions are matters of substantive law not procedural. We are not here concerned with
characterizing the certificate: the question is whether the notarial attendance was required.
NOTES
1. The Alberta Guarantees Acknowledgment Act (now RSA 2000, c G-11) has been respon-
sible for a good deal of the modern Canadian case law on choice of law in contracts: see
Black. Black argues that courts dealing with a statute of this kind should decide on its appli-
cation by an “interpretive approach”—that is, by giving the statute such operation as it
ought to have in order to give proper effect to the legislative policies expressed in it. He
suggests at 242-43 that this approach would have led to Greenshields being decided the
other way. The guarantee was signed by an Alberta resident in favour of a company doing
business in Alberta and was therefore within the scope of operation of the statute on any
reasonable interpretation. The express choice of Ontario law should have been treated no
differently, he argues, from an express clause to the effect that the guarantee should be
binding regardless of failure to comply with the Act—to which, presumably, no Alberta court
would have given effect.
2. The Civil Code of Quebec regards the form of a juridical act as valid if it complies with
the law of the place where the act is made, the law of the place where the property that is the
subject of the act is situated, or the law of the domicile of one of the parties (art 3109).
3. Rome I’s rule for formal validity, if both parties are in the same country, is similar to that
applied in Greenshields—the contract is formally valid if it complies with the law that governs
the contract or the law of the place where the contract is concluded: art 11(1). If the parties
are in different countries, the contract is valid if it complies with the law that governs the
contract, the law of either of the countries where either of the parties or their agent is pres-
ent, or the law of the country of either party’s habitual residence: art 11(2). Certain consumer
contracts must comply with the formal requirements of the consumer’s habitual residence
(art 6(1)), unless the parties have agreed on a different law to govern their contract, but no
such choice may deprive the consumer of the protection of mandatory rules of the law of the
consumer’s habitual residence (art 6(2)). If the contract concerns a right in immovable prop-
erty or a right to use immovable property, the formal requirements of the law of the situs of
the immovable must be complied with if that law provides that it must be applied irrespec-
tive of where the contract is made or what law otherwise governs it: art 11(5).
The OAS Convention (art 13) makes the same distinction as Rome I between contracts
between parties in the same country and those between parties in different countries. In the
former case, the contract is valid if it complies with the law that governs the contract, with
“the law of the State in which the contract is valid,” or with the law of the place where the
contract is performed. In the latter case, the relevant laws, in addition to the law that governs
the contract, are the law of “one of the states in which [the contract] is concluded” and the
law of the place of performance.
D. Mandatory Rules of Legal Systems Other Than the Proper Law

See generally Hartley.
As we saw above, the proper law, in principle, is a matter of the parties’ choice. Even if the
parties do not agree on a governing law, the “closest and most real connection” test can be
applied in a way that takes into account the parties’ interests. Thus, the fact that the contract
is valid under one system of law but void under another or is drafted appropriately for one
system of law but not for another has been regarded, in some cases, as an indicator to the
closest and most real connection: see e.g. Imperial Life and Amin Rasheed, both excerpted
above. There is a fundamental tension between the concept that nearly all issues under the
contract are to be referred to a “proper law” the parties can choose and the obvious desire
by legislatures in every country to impose restrictions on contracting parties for reasons of
fairness, broad social policy, or economic regulation. How can the choice of law rules accom-
modate both the principle of party autonomy and the legitimate regulatory claims of coun-
tries that have some connection with the contract or the parties? This section deals with
situations in which a law other than the proper law—that is, a law that the parties have not
chosen—may nevertheless be held to determine the parties’ rights and obligations: see
Swan; Blom for general explorations of this problem in the Canadian context.
1. Rules of the Lex Fori

Since the rules of private international law are usually not of constitutional force, they are
subject to being overridden by legislative fiat. The ordinary treatment of foreign contracts
(here meaning contracts whose proper law is not the law of the forum) is that rules of the lex
fori apply to the contract only if the rules are procedural: see Chapter 11. However, the legis-
lature may choose to depart from the ordinary approach by directing the court to apply a
particular substantive rule even to a foreign contract. The legislature will do this if it regards the
policy behind the particular rule as important enough to prevail over the more general pol-
icies—notably party autonomy—underlying the rule that the proper law ordinarily governs.
Such a statutory directive may be express. A statutory rule that explicitly overrides the
parties’ choice of governing law in order to impose rules of the law of the forum is found in
the Unfair Contract Terms Act 1977 (UK), c 50, s 27(2). The statute invalidates, absolutely or
under certain circumstances, exemption or limitation clauses with respect to particular
obligations in both consumer and non-consumer contracts. Its provisions are to apply not-
withstanding any contract term that applies or purports to apply the law of a country out-
side the United Kingdom if (1) the term appears to have been imposed wholly or mainly for
the purpose of enabling the party imposing it to evade the application of the Act, or (2) in
the making of the contract one of the parties dealt as consumer (as defined) and was then
habitually resident in the United Kingdom and the essential steps necessary for the making
of the contract were taken there by that party or on that party’s behalf.
Often it is argued in support of applying a statutory rule of the lex fori that, even if the
legislature has not expressed its wish to have the rule apply even to foreign contracts—that
is, contracts governed by a law other than the lex fori—that wish can be inferred from the
terms of the statute. Consider the following case.
Avenue Properties Ltd v First City Development Corporation Ltd

(1986), 32 DLR (4th) 40 (BCCA)
[Mr. Coles, through his corporate vehicle Avenue Properties, purchased three units in a
real estate development in Toronto, Ontario from two companies developing the project
as a joint venture. The two vendors were First City, an Alberta corporation extraprovin-
cially registered to do business both in Ontario and in British Columbia, and an Ontario
corporation. The contracts of purchase expressly provided that they were to be governed
by the law of Ontario and that the parties “attorn to the jurisdiction of the Province of
Ontario.” Avenue Properties eventually notified the vendors that it would not be completing
the purchase because of the failure, among other things, of the vendors to comply with the
provisions of the British Columbia Real Estate Act, RSBC 1979, c 356 requiring that they
submit a prospectus for the development to the superintendent of insurance of British
Columbia and deliver such a prospectus to the purchaser. According to the Real Estate
Act, this failure made the agreement to purchase unenforceable. The vendors sued Avenue
Properties in Ontario for specific performance or damages. Avenue Properties filed
appearances and statements of defence in that action. Five months later, Avenue Properties
began the present action in British Columbia for a declaration that the agreements were
unenforceable under the Real Estate Act and claiming a return of deposits. First City, at
least, was served with process in British Columbia.
The present decision was on the vendors’ application that the proceedings against them
be stayed on the ground of forum non conveniens. The Court of Appeal, reversing the
chambers judge, held the proceedings should not be stayed. Its main reason was that the
vendors had not met the burden of showing that Ontario, and not British Columbia, was
the forum conveniens for the action. It also addressed the argument by Avenue Properties
that the court should allow the action to continue because it enjoyed a “legitimate advan-
tage” in a British Columbia court that it might well not have in the Ontario court—namely,
a good chance of having the British Columbia Real Estate Act applied in its favour.]
McLACHLIN JA (for the court):

A court can apply the law of its own jurisdiction in substitution or supplementation
for the proper law of the contract in two circumstances. The first is where the local law is
procedural. The second is where the local law, although substantive rather than proced-
ural, is of such a nature that it should be applied. The court has no alternative but to do
this where the local legislation specifically states that certain procedures will apply, not-
withstanding that the proper law of the contract may indicate otherwise. This sort of
provision is referred to by the authorities as a “choice of law rule.” Where the legislation
cannot be characterized as a “choice of law rule,” the court may nevertheless apply a pro-
vision of local law in preference to the foreign proper law of the contract where it is satis-
fied that it would be contrary to public policy to do otherwise.
The chambers judge considered only the first of the two situations in which the court
will apply law of its own jurisdiction notwithstanding that the proper law of the contract
is foreign. He repeatedly stated in his reasons for judgment that unless s. 62 of the British
Columbia Real Estate Act could be characterized as procedural, a British Columbia court
would not apply it. This forms the basis of his conclusion that the purchasers would lose
no juridical advantage by reason of a stay of their British Columbia proceedings. The
question of whether s. 62 is procedural or substantive is a difficult one. The tests are not
clear, and both counsel agree that policy considerations play a large role in the court’s
determination of this question. The chambers judge took into account such considerations
in concluding that s. 62 of the Real Estate Act should be regarded as substantive rather
than procedural, notwithstanding that it does not make the contract void for non-
compliance with the specified conditions, but rather only “unenforceable.”
However, it is my view that the chambers judge erred in failing to go on to consider
the possibility that, assuming s. 62 is substantive, a British Columbia court would apply
it on the basis that it constitutes a “choice of law rule”—that is, the legislature’s edict that
a person soliciting agreements for the sale of land in British Columbia, whether that land
is inside or outside the province, must comply with the British Columbia Act’s prospectus
requirements if he wishes the subsequent agreement to be enforceable in this province.
If the British Columbia legislation requiring prospectuses did not specifically apply to
sales of land outside the province, the situation might be different. However, the legislature
has expressly said that persons soliciting the sale of land in British Columbia, whether
that land is inside or outside the province, must comply with the Real Estate Act’s pro-
spectus requirements. Without deciding the issue at this stage, I think there is at least a
reasonable possibility that a British Columbia court, given this legislation, would accept
the “choice of law” argument that the legislature intended s. 62 to apply, notwithstanding
that the land and the proper law of the contract were foreign. Alternatively, given the
specificity of the provisions, it might be held that it is against public policy to enforce a
contract made in clear contravention of the British Columbia legislation.
The fact that the British Columbia law is expressly made applicable to solicitations
within British Columbia for the sale of land outside the province, distinguishes this case,
in my view, from the cases relied upon in this connection by the vendors. In Associated
Loan Co. v. Callaghan et al. (1957), 9 DLR (2d) 559 (Ont. CA), the interest rate provisions
of a loan did not comply with Canadian requirements. However, the Canadian legislation
did not purport to apply to loans made out of the province. Similarly, in Dodge et al. v.
Eisenman (1985), 23 DLR (4th) 711, 68 BCLR 327 (BC CA), there was no legislation
comparable to that in the case at bar dealing with the unenforceability of the contracts in
question in the event the statute had not been complied with. Similarly, in Block Bros.
Realty Ltd. v. Mollard et al. (1981), 122 DLR (3d) 323, 27 BCLR 17, [1981] 4 WWR 65
(BC CA), there was no legislation holding that if legislative requirements were not met,
the contract would be unenforceable. As a result, the only question was whether it would
be against public policy to permit the action to proceed, notwithstanding the fact that the
claimant was not licensed as required under the Real Estate Act, and the court in the
circumstances of that case concluded that it was not. Again, in Toronto-Dominion Bank
et al. v. Martin et al. (1985), 39 Sask. R 60, [1985] 4 WWR 557 (Sask. QB), the court noted
that the Saskatchewan provision which had not been complied with clearly had the goal
of protecting Saskatchewan land, not foreign land, citing this as another reason for its
conclusion that the proper law of the contract (British Columbia law) should be applied
to the exclusion of the Saskatchewan provision.
I conclude that there is a reasonable or fair possibility that a British Columbia court
may apply s. 62 of the Real Estate Act in this province, notwithstanding that Ontario law
is the proper law of the contract. I do not share counsel for the vendors’ optimism that
an Ontario court would do the same. First, there is a good possibility that the Ontario
court would characterize the provision in question as procedural rather than substantive,
in which case it would clearly not apply there. Second, if the Ontario court were to con-
sider s. 62 as substantive, it would probably decline to apply it on the basis that the parties
had chosen Ontario law as the proper law of the contract. The “choice of law” and public
policy arguments which can be raised in British Columbia cannot be raised in Ontario,
since the foundation of these arguments is a law in the jurisdiction in which the proceed-
ings are brought which is contrary to the proper law of the contract.
In the result, were it necessary to decide, I would conclude that the purchaser has
established that there is a fair possibility that it will gain a legitimate juridical advantage
by prosecuting its action in British Columbia rather than in Ontario.
NOTES
1. Consistent with the principle that the law of the forum, properly construed, can over-
ride the law that governs the contract according to the usual choice of law principles, Rome I
provides in arts 9(1) and (2):
organization, to such an extent that they are applicable to any situation falling within their
2. Nothing in this Regulation shall restrict the application of the overriding mandatory
provisions of the law of the forum.
Article 11(1) of the OAS Convention is to the same effect, as is art 11(1) of the Hague Principles.
2. Suppose that the contract in Avenue Properties had included an express, exclusive
choice of the courts of Ontario as the forum for disputes arising out of the agreement. Would
the British Columbia court have enforced such an agreement as against the British Columbia
party? If litigation did take place in Ontario and the Ontario court held that the British Col-
umbia statute did not apply to the contract, would the resulting judgment be enforceable
in British Columbia or would it be contrary to the public policy of British Columbia? Precisely
these issues arose in the actions brought by Lloyd’s of London against Ontario-resident
“names” (investors of underwriting capital in Lloyd’s). The “names” argued that they should
not be confined to litigation in England, as their contracts with Lloyd’s demanded, because
it would deprive them of their ability to invoke the prospectus requirements of Ontario
securities legislation. This argument failed: Ash v Lloyd’s Corp (1992), 9 OR (3d) 755, 94 DLR
(4th) 378 (CA). Then, after the English court held them liable, they argued that the judgment
should not be enforced in Ontario because the failure by the English court to apply Ontario
securities law made the English judgment contrary to the public policy of Ontario. This argu-
ment failed, too: Society of Lloyd’s v Meinzer (2001), 55 OR (3d) 688, 210 DLR (4th) 519 (CA)
(reproduced in Chapter 4).
3. A good example of a statute that expressly overrode the parties’ choice of law is the
Australian insurance legislation considered in Akai Pty Ltd v The People’s Insurance Co Ltd
(1996), 188 CLR 418. It required the statute to be applied to an insurance contract if the
proper law of the contract was that of an Australian jurisdiction in which the statute applied
or if the proper law “would be” that of one of those jurisdictions if “an express provision to
the contrary” in the contract were disregarded.
4. The following case sits on the cusp between contract and tort, but raises essentially
the same problem as Avenue Properties—namely, the territorial application of a provincial
statute that regulates the obligations arising out of business transactions.
Pearson v Boliden Ltd

2002 BCCA 624, 222 DLR (4th) 453
[A class action was brought in British Columbia on behalf of investors who had bought
shares in July 1997 on an initial public offering by Boliden Ltd, a mining concern. They
claimed damages for misrepresentations in the prospectus that accompanied the offering
and that Boliden had filed with the securities authorities of all ten provinces. The alleged
misrepresentations related to environmental safety at a Spanish mine owned by a Boliden
subsidiary. A tailings dam at the mine collapsed in April 1998 with the result that 10,000
hectares of land were contaminated by toxic waste. By November 1998, Boliden shares
had fallen from the initial public offering price of $16 to $5.35 a share. The claims being
pursued were based on the statutory cause of action provided by the Securities Act of each
province if the issuer’s prospectus for a “distribution” of securities contained a material

misrepresentation. Under this cause of action, investors who buy the securities during
the “period of distribution” have a right to seek damages from the issuer or seller of the
securities, the underwriters thereof, and other specified persons.
Under s 6(1) of the British Columbia Class Proceedings Act, RSBC 1996, c 50, non-
residents of British Columbia may be included as plaintiffs if they opt in to the litigation.
(Residents and non-residents must be in separate subclasses.) The plaintiffs in this action
were to include residents of all the other provinces. In the present phase of the proceeding
the defendants sought to have certain subclasses excluded from the action. Some of the
exclusions had to do with whether the plaintiffs met the general requirements of the cause
of action. Others, however, had to do with differences between the laws of the provinces.
Eight of the Acts deem the purchaser to have relied on the misrepresentation when buying
the securities. However, the New Brunswick Act did not include the statutory cause of
action at all. The Alberta Act contained a shorter limitation period than the others, and
this period had expired before the action commenced. The defendants therefore argued
that investors whose claims fell under these provinces’ statutes must be excluded from
the action. The problem was exactly how to define which investors should be excluded.
The chambers judge treated the question essentially as one of choice of law in tort, on
the basis that the statutory cause of action was analogous to the common law torts related
to negligent or fraudulent misrepresentation. Therefore the investor’s claim depended on
the law governing the statutory tort said to have been committed against that investor.
The law governing a claim in tort, according to Canadian conflicts rules, is (at least gener-
ally) the lex loci delicti (law of the place of the tort): see Chapter 12 and the leading case
of Tolofson v Jensen, [1994] 3 SCR 1022, reproduced there. So the investor’s claim was
subject to, for instance, Alberta law if Alberta was the locus of the tort. The locus of a tort
like misrepresentation, where the damage may be caused at a distance in space and time
from the wrongdoer’s acts or omissions, depends on the facts. This meant, according to
the chambers judge, that the definition of the excluded subclasses would require, in effect,
a summary trial on the issue of where the statutory wrong should be deemed to have been
committed as against the investors.
On appeal from the chambers judge’s decision, the British Columbia Court of Appeal
disagreed with the lex loci delicti approach.]
NEWBURY JA (Finch CJBC and Saunders JA concurring):

[53] The plaintiffs in the case at bar contend that the “lex loci delicti” concept may be
applied to a statutory cause of action such as that advanced here, and that the question
of which law is the lex loci delicti of the (alleged) wrong can be properly decided only after
a full assessment of the evidence relating to the transactions in question. In Mr. Klein’s
submission, it is at least arguable that, as the Chambers judge suggested, the Securities
Act of Ontario will be found to apply to all or most of the plaintiffs’ claims, since according
to the prospectus, Boliden’s office is located in Toronto and its accounting and legal advis
ors, and those of the underwriters, are Toronto firms or at least have offices there. These
might be slender reeds on which to rest a choice of law, but Mr. Klein suggested additional
facts might well be adduced at trial that would make the choice clearer.
[54] In one sense, however, Tolofson runs contrary to the plaintiffs’ argument.
La Forest J focussed on the place where the wrong occurred and on the legitimate interests
of states in attaching rights and liabilities to acts or conduct occurring within their terri-
torial confines. Indeed, he said it seemed “self-evident” that “State A has no business in
defining the legal rights and liabilities of citizens of State B in respect of acts in their own
country, or for that matter the actions in State B of citizens of State C.” (At 1052; emphasis
added.) If this is correct, Ontario would arguably be acting outside its authority in pur-
porting to provide a statutory claim to an investor in Vancouver, for example, who bought
Boliden shares through a Vancouver broker and on the basis of a prospectus filed with the
British Columbia Securities Commission, all in accordance with the British Columbia Act.
[55] Although Tolofson was concerned with a common law tort with inter-provincial
aspects, courts when considering the applicability and constitutional validity of securities
legislation have focussed on conduct or activity within the province rather than, for
example, the situs of particular contracts, the location of share registers or the residence
of particular parties. (See Edinger, [“Territorial Limitations on Provincial Powers,” 14 Ott
L Rev 57], at 78-80.)
[Newbury JA reviewed cases dealing with the application of securities legislation to selling
activities by traders in one province to purchasers resident in another province (Gregory
& Co Inc v Quebec Securities Commission, [1961] SCR 584; R v W McKenzie Securities Ltd
(1966), 56 DLR (2d) 56 (Man CA)); a case on the constitutional applicability of provincial
securities laws to a federally incorporated company (Multiple Access Ltd v McCutcheon,
[1982] 2 SCR 161); and one on the constitutionally permissible scope of legislation impos-
ing liability for polluting interprovincial waters (Interprovincial Co-operatives Ltd v The
Queen, [1976] 1 SCR 477).]
[62] From the foregoing, I take it that, as stated in Pezim v. British Columbia (Super-
intendent of Brokers), [1994] 2 SCR 557, at 589, the “primary aim” of the provincial
Securities Acts is the protection of the public from acts or conduct—particularly the
solicitation of trades and the sale of securities—taking place within the respective prov-
inces. As stated succinctly by Gillen, [Securities Regulation in Canada, 2nd ed (1998)], at
122, “… it is the vendor that is the object of the [legislation], and it is the purchaser that
the legislation is designed to protect.” The other goals of securities legislation—ensuring
the efficiency of capital markets and increasing public confidence in the markets (see
Johnston and Rockwell, [Canadian Securities Regulation, 2nd ed (1998)], at 2-4)—do not
detract from this principle.
[63] In a very real sense, then, the Acts are analogous to consumer protection legis-
lation. The conduct in the province of issuers, brokers and other market intermediaries,
wherever they may reside or carry on business, is regulated in order to protect the public,
and the integrity of the market, in that province. A dealer or broker may not trade in
British Columbia unless it is registered to do so under the British Columbia Act. It mat-
ters not where the intermediary (or its customer) resides or carries on business. Similarly,
an issuer that wishes to distribute shares in New Brunswick must comply with the pro-
spectus requirements of the New Brunswick Act. This is so regardless of where the docu-
ment is prepared or where the issuer has its head office. In this way, each province protects
the investing public from misconduct in its territory, but at the same time, honours the
principle of comity by respecting the legislative authority of other provinces to do likewise.
[64] I also take from the foregoing cases that the lex loci delicti choice of law rule is
not directly applicable to the question of which provincial Act or Acts may found a statu-
tory cause of action for misrepresentation in a prospectus. As La Forest J observed in
Tolofson, courts are limited in exercising their powers (as to choice of law issues) to the
same extent as the provincial legislatures. Thus, with all due respect to Mr. Klein’s argu-
ment, I do not agree that it is open to a plaintiff, or a court of law, to choose to apply the
Act of one province that will provide a cause of action in misrepresentation for a plaintiff
who was solicited in and purchased his or her shares pursuant to a distribution in another
province. Once the Act of a province applies to regulate (by means of a prospectus require-
ment) the “distribution” of securities taking placing within the province’s boundaries, the
same Act must surely be looked to for any statutory cause of action for misrepresentation
contained in the document. Its form, contents and filing are all mandated by the Act; the
creation of a right to civil damages for infringing the Act must also be found in that Act.
[65] This is not to suggest that a provincial Securities Act may not have extra-provincial
aspects or that activities in one province may not be incidentally affected by legislation
in another. (Gregory and McKenzie Securities are obvious examples; see also Global Securities
Corp. v. British Columbia (Securities Commission) [2000] 1 SCR 494.) Nor do I suggest that
an issuer or market intermediary may not be subject to more than one Act in carrying on
its business. The broad definition of “trade” in most of the Acts, extending to advertisements
and solicitations, means that an underwriter or investment dealer in Ontario, for example,
who mails out a monthly newsletter to all its clients across Canada, and who receives
orders from investors in Alberta, is subject to the Acts of both provinces—Alberta because
of the solicitation there, and Ontario because of the dealer’s preparation of the bulletin,
as well as its receipt of the buy order, there. But in respect of a misrepresentation contained
in a prospectus circulated in a province and deemed to be relied on by a person in purchas-
ing securities offered thereby, a court would in making a choice of law be bound to follow
the constitutional principle that it is the province in whose territory the securities are
distributed which has the jurisdiction (in the constitutional sense) to regulate the manner
in which the distribution is carried out and to attach civil consequences to non-compliance.
[66] There are also practical reasons that support this choice of law. In an industry in
which certainty and predictability are important, it avoids the complexity and uncertainty
of rules such as the lex loci delicti rule applied to torts and the “most substantial connec-
tion” rule applied to contracts. It provides a principled way through the thicket of the
many extra-provincial aspects that will be involved in any national securities distribu-
tion—the vagaries of where the issuer carries on business or maintains its share register,
where the prospectus was prepared, where the issuer’s directors reside, where the stock
exchange (or now, the securities depository) is located (if electronic records can be said
to be located anywhere), or where a particular plaintiff or defendant resided or carried
on business at any particular time. (As an example of the difficulty of determining the lex
loci delicti of a misrepresentation at common law, see Canadian Commercial Bank v.
Carpenter (1989), 39 BCLR (2d) 312 (BCCA).) As well, it comports with what a reasonable
investor would expect—that when he or she purchases shares offered under a distribution
taking place in a province, the securities legislation of that province will govern the filing
of the prospectus, its contents, and the rights and obligations of the parties thereunder.
[67] Finally, this approach seems to comport with the assumptions that underlie
current regulatory practice in Canada: see Re Aatra Resources Ltd. (1990), 13 OSCB 5109,
where the Ontario Securities Commission discussed, inter alia, its Interpretation Note
1.5. That Note includes the following advice to Ontario dealers and brokers:
Each Ontario registrant has the duty to take reasonable steps to ensure that trades in secur-
ities effected by or through such registrant do not involve trades of securities into Ontario or
to Ontario residents without compliance with the prospectus requirements of the Act or in
reliance on an exemption therefrom. More particularly, a registrant who sells, on behalf of
one of his clients, securities in Ontario or who purchases securities outside Ontario must
take reasonable steps to ensure that the transaction does not involve the distribution of secur-
ities not qualified in Ontario coming to rest in Ontario or with Ontario residents.
All Ontario registrants should establish standard procedures to prevent unlawful distributions
of securities into Ontario and to ensure that the registrant meets its continuing responsibility
to know both its clients and the securities being sold by or to its clients. [Emphasis added.]
(See also National Policy 47-201 regarding the distribution of securities on the Internet.)
[68] It follows in my view that the Chambers judge erred in holding open the possibil-
ity that a lex loci delicti rule might have applied to the statutory causes of action before
him, and that he should have applied to the first three contested subclasses of plaintiffs
the Act of the province in which the respective “distribution” (as defined) occurred. I turn
briefly to each of those subclasses.
[The rest of the court’s judgment is omitted. The subclass of purchasers who must be
excluded because their claim had to be under the New Brunswick statute, which did not
provide the cause of action available elsewhere, was therefore not defined as residents of
New Brunswick but as “those persons who purchased their Boliden shares pursuant to a
distribution in the province of New Brunswick”: para 69. Likewise, the Alberta subclass,
the claims of the members of which were statute-barred under the Alberta statute, con-
sisted not of residents of Alberta but of persons who purchased their shares pursuant to
the distribution in Alberta: para 71. For a general discussion of choice of law in multi-
jurisdictional class actions, see Scott.]
2. Rules of Foreign Laws Other Than the Proper Law

a. Law of the Place of Performance
Gillespie Management Corp v Terrace Properties

(1989), 62 DLR (4th) 221 (BCCA)
SOUTHIN JA:
[1] I have had the advantage of reading in draft the reasons for judgment of Cum-
ming JA. I agree with his disposition of the appeal.
[2] I desire, however, to add some words of my own.
[3] The contract was, throughout its term, capable of lawful performance if the
respondent acquired a licence.
[4] The issue which arises is whether a party to a contract can recover here consider-
ation due him for performance of his obligations or damages when he has been prevented
from performing when the contemplated performance was, in part, in a foreign jurisdic-
tion in which performance was or would be unlawful although the contract itself was not
unlawful either in this jurisdiction or by the law of the foreign jurisdiction.
[5] So far as counsel enlightened us, none of the previous authorities on illegal per-
formance was precisely of this nature and I am not prepared to say that the answer to that
question is invariably “No, he cannot recover.”
[6] The doctrine of illegality is founded on considerations of public policy—not for-
eign 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 unenforce-
able 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.
[7] In British Columbia, it is unlawful to act, as it is in the state of Washington, as an
agent for the collection of rents unless the agent has a licence. Without a licence, a person
who does such an act here cannot recover his fees.
[8] I consider that this court should give effect, as a matter of domestic public policy,
to a foreign public policy analogous to our own.
CUMMING JA (Legg JA concurring):

[9] The respondent and the appellants entered into a management agreement on
October 15, 1985, under which the respondent was to assume the management of the
appellant’s apartment building in the state of Washington, USA. The agreement was made
in British Columbia between the plaintiff, a British Columbia company, and the defend-
ants, Terrace Properties, a Washington limited partnership, and Dr. C.M. Papadopoulos,
a British Columbia resident and a general partner of Terrace. The agreement contained
a three-month notice provision for its termination.
[10] The appellants terminated the agreement on July 28, 1986. No notice pursuant
to the terms of the agreement was given to the respondent, nor was any payment in lieu
of notice made.
[11] The respondent then brought this action for damages for alleged breach of con-
tract. Paragraph 11 of its amended statement of claim reads:
11. The Plaintiff claims the sum of $10,252.97, particulars of which are as follows:
(a) management fees for the month of July 1986 . . . . . . . . . . . . . . $ 1,894.29

(b) management fees for August, September,
October 1986 (3 × $1,851.07) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,553.21
$ 7,447.50
US exchange as at July 31, 1986 at 1.3767 . . . . . . . . . . . . . . . . . . . . . $ 2,805.47
Total (Cdn.) $10,252.97
[12] At the trial a number of issues were raised in the evidence and on the pleadings
with respect to certain alleged breaches by the plaintiff of its management contract. The
trial judge, however, found that he was unable to conclude, on the balance of probabilities,
either that the respondent had broken its contract in general terms or that it should be
found guilty of misconduct or gross negligence or gross inefficiency.
[13] The only issue before us is whether, as the respondent was not licensed as a real
estate broker in the state of Washington, it could recover the commissions due under the
contract, or damages for its wrongful termination.
[14] In order to act as a broker which, under the terms of this agreement, it is con-
ceded the respondent was doing, it required a licence under Washington law.
[15] Under the provisions of Washington law, it is unlawful for any person to act as a
real estate broker, i.e., one who negotiates directly or indirectly in the lease or rental of
real estate, without first obtaining a licence.
[16] The Washington State Code provides:
18.85.100 License required—Prerequisite to suit for commission. It shall be unlawful for
any person to act as a real estate broker, associate real estate broker, or real estate salesman
without first obtaining a license therefor, and otherwise complying with the provisions of
this chapter.
No suit or action shall be brought for the collection of compensation as a real estate broker,
associate real estate broker, or real estate salesman, without alleging and proving that the
plaintiff was a duly licensed real estate broker, associate real estate broker, or real estate sales-
man prior to the time of offering to perform any such act or service or procuring any prom-
ise or contract for the payment of compensation for any such contemplated act or service.
The regulatory provisions of the Washington State Code apply to non-resident brokers
carrying on their functions within that state.
[17] The agreement was to be partly performed in the state of Washington and partly
performed in the province of British Columbia with, indeed, the majority of what was
called for under the agreement to be performed in this province.
[18] In this regard, the learned trial judge said:
[T]he day-to-day running of the defendant’s building was in the hands of the resident man-
agers, their supervision was in the hands of the plaintiff. That supervision, from the evidence
I conclude, was largely conducted by telephone calls which the plaintiff has shown were made
almost daily between Washington and British Columbia. There were visits every week or so
by the plaintiff ’s representative to Washington where a corporation connected with the
plaintiff had an interest in a number of buildings of which the plaintiff was also manager. To
that extent those visits to Washington involved a partial performance of the contract outside
British Columbia and in the State of Washington. But the plaintiff ’s main function, apart from
supervision of the resident managers, seems to have been to collect accounts and pay expenses,
obtain cheques from Dr. Papadopoulos and to provide accounts to him. All that work seems
to have been done in British Columbia. For that reason it seems to me that the law, if it is
the law, that the courts in British Columbia will not enforce a British Columbia contract if
performance is illegal in the place where the contract is to be performed has no application.
[19] The learned trial judge held (and in this court counsel for the appellant con-
ceded), that the proper law of the contract is that of British Columbia, but expressed
himself guided and bound by what was said in Block Bros. Realty Ltd. v. Mollard (1981),
122 DLR (3d) 323, [1981] 4 WWR 65, 27 BCLR 17 (BC CA), with respect to public policy
and said:
I conclude that nothing in the present case relating to the necessity, assuming there is one,
that the plaintiff be licensed in the State of Washington renders the enforcing of its contract
with the defendant in British Columbia as a British Columbian contract contrary to public
or moral interest or something founded in moral turpitude or something inconsistent with
the good order and solid interests of society.
[20] Accordingly, he allowed the respondent’s claim.

[21] But Block Bros. Realty Ltd. v. Mollard is distinguishable. In that case the plaintiff
sued to recover commission under an agreement for the sale of land situate in British
Columbia. The contract was made in Alberta. The plaintiff was a licensed broker in that
province but not in British Columbia. The defendants brought an application to dismiss
the action on the ground that s. 37(1) of the Real Estate Act, RSBC 1979, c. 356, which
provided that a person may not maintain an action for real estate commission unless he
proves he is licensed under the Act, is a bar. In sustaining the refusal of the chambers
judge to dismiss the action, the Court of Appeal held that the proper law of the contract
is the law of Alberta, not that of British Columbia, because the contract was made in
Alberta in the expectation that a purchaser would be found in that province. The convey-
ance of the property in British Columbia was only incidental to the performance of the
contract which was to be performed in Alberta. The situation here is quite different as
this contract called for the performance of acts in the state of Washington which could
not be described as merely incidental to it.
[22] With deference to the learned trial judge, it is my view that the illegality of the
respondent’s acts in performing, at least in part, its obligations under the contract in the
state of Washington, where there is an express prohibition against its doing so unless
properly licensed, renders its claim unenforceable in the courts of this province.
[23] In Dicey and Morris on the Conflict of Laws, 10th ed. (1980), p. 812, the rule is
stated:
Rule 151(1) The effect of a contract, i.e. the rights and obligations under it of the parties
thereto, is to be determined in accordance with the proper law of the contract.
(2) In the absence of evidence that the parties intended another law to apply, the mode
of performing a contract, as distinct from the substance of the obligation, is governed by the
law of the place at which the obligation is to be performed.
[24] In J.G. Castel: Canadian Conflict of Laws, 2d ed., the second branch of the rule
is put thus:
427. Illegality by the law of the place of performance. In England there is a substantial
weight of authority in support of the proposition that a contract illegal by the law of the
country where it is to be performed will not be enforced. Despite this authority, it is unclear
how far this rule is one of the conflict of laws rather than of domestic law. In all the relevant
cases either the contract was unenforceable because it offended against the public policy of
English law, the lex fori, or the proper law of the contract was English law and the contract
was invalidated by a rule of English domestic law.
The validity or enforceability of a Canadian contract will not be affected if the law of the
place of performance gives either or both of the parties an excuse for non-performance
without rendering the contract illegal.
Whilst the effect of illegality under the law of the place of performance may be unsettled,
there is no doubt that a contract is enforceable in Canada despite any illegality by the law of
the legal unit in which a party is resident or domiciled or of which he is a national, or where
he has his place of business, provided the law of that legal unit is not the proper law or the
law of the place of performance.
[25] In Ralli Bros. v. Compañia Naviera Sota y Aznar, [1920] 2 KB 287 (CA), an English
firm, on July 8, 1918, chartered a Spanish ship from a Spanish shipping company to carry
a cargo of jute to Barcelona at a freight of £50 a ton, one-half to be paid by charterers to
shipowners in London, the other half to be paid by the receivers of the cargo, a Spanish
firm at Barcelona, in Spanish currency. The charter-party, which was made in London,
contained no cesser clause as regards liability for freight. The ship sailed in October, 1918,
and half the freight was duly paid. By Royal Proclamation made on September 14, 1918,
under the laws of Spain, freight on jute to Spain was not to exceed 875 pesetas per ton.
The ship arrived in Barcelona to discharge, and at the then rate of exchange £50 exceeded
875 pesetas. The receivers paid the balance of the freight, making it up to 875 pesetas per
ton, but refused to pay more. The shipowners then claimed the excess from the charterers
in England.
[26] It was held that the charter-party was an English contract governed by English
law, but that it was invalid so far as its performance was illegal by the lex loci solutionis,
and that the charterers were not therefore bound to pay the excess of freight over 875
pesetas per ton.
[27] At p. 301 Scrutton LJ, after approving the rule as stated by Dicey, supra, said:
If I am asked whether the true intent of the parties is that one has undertaken to do an act
though it is illegal by the law of the place in which the act is to be done, and though that law
is the law of his own country; or whether their true intent was that the doing of that act is
subject to the implied condition that it shall be legal for him to do the act in the place where
it has to be done, I have no hesitation in choosing the second alternative. “I will do it provided
I can legally do so” seems to me infinitely preferable to and more likely than “I will do it,
though it is illegal.”
[28] That language is apposite here: the respondent could not legally do in Washington
what it undertook to do under the terms of this contract.
[29] In Zivnostenska Banka National Corp. v. Frankman, [1950] AC 57 (HL), Lord
Reid said, at p. 79:
I think that it is now settled law that, whatever be the proper law of the contract, an English
court will not require a party to do an act in performance of a contract which would be an
offence under the law in force at the place where the act has to be done.
[30] In Montreal Trust Co. v. Stanrock Uranium Mines Ltd. (1965), 53 DLR (2d) 594
at p. 606, [1966] 1 OR 258 (Ont. HC), Evans J (as he then was) said:
It is my opinion that the substance of the obligation is to be determined by one law only, i.e.,
the proper law of the contract. The method and manner of performance may be regulated
by the law in the place of performance notwithstanding that this is not the proper law of the
contract. In this respect there may be a “split” but only as to performance.
Dicey discusses this second presumption at p. 745, and cites the case of Chatenay v. Brazil-
ian Submarine Telegraph Co., [1891] 1 QB 79, where Lord Esher, MR, said the following at
p. 83:
But if it [the contract] is to be carried out partly in another country than that in which
it is made, that part of it which is to be carried out in that other country, unless
something appears to the contrary, is taken to have be[en] intended to be carried out
according to the laws of that country.
If it is not so carried out, it is, of course, illegal.

[31] In Leaper v. Grenadier Developments Ltd. (1982), 138 DLR (3d) 540, 38 BCLR
125 (BC CA), the plaintiff L., a mortgage broker whose licence had been cancelled, intro-
duced the plaintiff T., a licensed sub-broker employed by the plaintiff P. Co., to the
defendants. Largely as a result of T.’s efforts, the defendants obtained the loan they sought.
L. played no part in acquiring the loan after the initial contact was made. The plaintiffs
sued for commission for services as mortgage brokers. L.’s claim was dismissed because
of the licence cancellation. T. and P. were denied recovery on the basis that the taint of
illegality pervaded the whole claim.
[32] In allowing the appeals of Turner and Point Grey, Macfarlane JA for the court,
said at pp. 542-3 DLR:
Counsel agree that the test to be applied is that which was enunciated by Lord Dunedin in
Farmers’ Mart, Ltd. v. Milne, [1915] AC 106 at p. 113:
The test was laid down so long ago as 1816 in the case of Simpson v. Bloss (1816), 7
Taunt. 246, and the head-note there expresses it perfectly correctly: “The test, whether
a demand connected with the illegal transaction, is capable of being enforced at law, is
whether the plaintiff requires any aid from the illegal transaction to establish his case.”
That test was adopted and approved by the Supreme Court of Canada in Commercial Life
Ass’ce Co. v. Drever, [1948] 2 DLR 241 at p. 245, [1948] SCR 306.
The question then, in my opinion, is whether there is anything that Leaper did which
must be relied upon by the appellants in order to legally recover from the respondents the
value of their services. I think not. It is true that Leaper made the initial contact with the
respondents and introduced the appellant Turner to them. While that act may have entitled
Leaper, aside from illegality, to recover part of the commission from the appellants, it is not
an act upon which the appellants must rely in order to recover for their services from the
respondents. The important fact is that after the initial contact was made and until the loan
was obtained for the respondents, Leaper played no part in acquiring the loan for the
respondents. The services which resulted in the respondents obtaining a loan were performed
solely by Turner. Leaper may have made other inquiries, but they did not result in the acquisi-
tion of a loan by the respondents. In summary, I have concluded that the right of the appel-
lants to recover for the value of their services is not dependent in any way on any agreement
made between Leaper and the respondents.
[33] By contrast, in order to support its claim under para. 11(a) of its amended state-
ment of claim (for fees earned during the month prior to the receipt of notice of termin-
ation) the respondent would have to rely on what it had done in Washington during that
month; and to support its claim under para. 11(b) it would have to rely upon what it would
have done during the three month period following receipt of the notice of termination
had its services not been terminated. In both instances, however, what the respondent
would be relying upon were or would be acts which it was illegal for it to perform in the
state of Washington. Such claims as these cannot be sustained in the courts of this province.
[34] Accordingly, I would allow the appeal and dismiss the action with costs to the
appellant throughout.
Appeal allowed.
NOTE
Notice that none of the authorities cited by the Court of Appeal goes quite as far as the Court
of Appeal’s decision. Rule 151(2) in Dicey & Morris, 10th ed (1980), cited by the court, said that
the law of the place of performance governs “the mode of performing a contract, as distinct
from the substance of the obligation.” This refers to such local rules as those defining what
is legal tender in making payment or those defining holidays—rules dealing with the man-
ner in which a particular obligation ought to be performed. Gillespie dealt not with that kind
of rule but with a rule prohibiting certain conduct altogether. Ralli Bros v Compania Naviera
Sota y Aznar, [1920] 2 KB 287, also referred to by the Court of Appeal, held that an English
court would not award damages for the defendant’s refusal to commit an act (paying freight
in excess of the legal limit) that was illegal by the law of the place of performance. Gillespie,
however, was a case in which the illegal act (acting as a real estate broker without a licence)
had already been done and the party who did it was seeking to be compensated for services
rendered, albeit illegally rendered. Unlike in Ralli Bros, awarding such compensation would
not punish anyone for refusing to disobey the law of the place of performance. Is the result
fair? What interests of the country of performance (Washington) or of the forum (British Col-
umbia) were served by the Court of Appeal’s denial of compensation?
b. The Law of a Friendly Foreign State That the Parties Intend to Violate
If the parties’ agreement requires an act of performance to be done in a particular place, and
the act is illegal in that place, the law discussed in the previous section applies. Occasionally
there are cases where the obligations as set out in the contract can be performed without
doing anything illegal, but the evidence discloses that the parties actually intended to per-
form their contract in a way that does contravene the law of a foreign state—for example, a
contract for the sale of goods where the parties intend to smuggle the goods. This illegal
purpose has been held to make the contract unenforceable on the ground of the public
policy of the forum: see Regazzoni v KC Sethia (1944) Ltd, [1958] AC 301 (HL).
c. Law of the Place of Contracting

It is apparent from Vita Food Products (excerpted above) that Newfoundland law, as the law
of the place where the bill of lading was issued, had no special claim—that is, in the eyes of
a Nova Scotia court—to regulate a contract that the parties intended to be governed by
English law. It is true generally that the lex loci contractus, as such, is regarded as irrelevant if
the contract has another law as its proper law.
d. Other Interested State’s Law

1. The Anglo-Canadian private international law of contracts has so far developed no
rules to give effect to the regulatory interests of (1) any countries other than the country of
the proper law (whose law applies because the parties chose it or because it has the closest
and most real connection with the contract); (2) the forum (whose law applies if the local
legislature directs the court to apply it to the contract); and (3) the law of the place of per-
formance (which is applied if the issue relates to the “mode of performance” or to illegality
of an act of performance).
If it was felt that the legitimate regulatory concerns of another legal system should be
recognized by applying its law to a particular issue, there are two ways in which choice of law
rules to this effect could be framed. One is to devise rules for particular types of contract,
providing that, irrespective of the proper law, the mandatory rules—that is, rules the parties
cannot exclude—of a particular country must apply to that type of contract. The other is to
have a general rule that a court can apply the mandatory rules of any country that has what
the court finds is a sufficient connection with the contract for this purpose. The Civil Code of
Quebec and Rome I have rules of the former type. The OAS Convention does not. The Rome
Convention included a broad rule of the latter type that has been substantially narrowed in
Rome I. The OAS Convention refers to at least the possibility of a rule of the latter type.
2. Rules applicable to specific types of contracts. The Civil Code of Quebec (CCQ) and Rome I
both make special provision for consumer contracts and for employment contracts. Their
respective provisions are broadly similar. The consumer contract provisions (CCQ, art 3117;
Rome I, art 6) require the court, despite an express choice of law of a different country, to
apply the mandatory rules of the law of the consumer’s habitual residence to a consumer
contract in certain situations. Article 3117 of the Civil Code of Quebec states:
3117 The choice by the parties of the law applicable to a consumer contract cannot result in
depriving the consumer of the protection afforded to him by the mandatory rules of the law of
the State where he has his residence if the conclusion of the contract was preceded, in that
State, by a specific offer or by advertising and the consumer took in that State all the steps
necessary on his part for the conclusion of the contract, or if the order from the consumer was
received in that State.
The same rule also applies where the consumer was induced by the other contracting party
to travel to a foreign State for the purpose of concluding the contract.
The Rome I version is somewhat more generally worded, requiring only that the seller or
service provider pursue its activities in the country where the consumer habitually resides,
or “by any means, directs such activities to that country or to several countries including that
country.”
The employment contract provisions (CCQ, art 3118; Rome I, art 8) direct the court, despite
the express choice of the law of a different country, to apply the mandatory rules of the
country where the employee habitually works or, if the employee does not habitually work
in one country, the mandatory rules of the country where the employer has its domicile or
establishment. Article 8(4) of Rome I allows this law to be displaced if another country’s law
is more closely connected with the contract.
These provisions are obviously aimed at situations where there is both a powerful regula-
tory interest on the part of the country in question and a potential for abuse by a stronger
contracting party of the power to designate the governing law in the contract.
3. General rules. The Rome Convention, art 7(1), provided:
When applying under this Convention the law of a country, effect may be given to the manda-
tory rules of the law of another country with which the situation has a close connection, if and
in so far as, under the law of the latter country, those rules must be applied whatever the law
applicable to the contract. In considering whether to give effect to these mandatory rules,
regard shall be had to their nature and purpose and to the consequences of their application or
non-application.
This provision in the Convention was heavily criticized at the time the Convention was
drawn up for its inroad into the principle of party autonomy and the vagueness of the “close
connection” requirement. The controversy was defused by permitting countries to declare
by way of reservation that they would not be bound by the provision, and Germany and the
United Kingdom, among others, did so. Rome I, as a Regulation of the European Commun-
ities, is not subject to the power of reservation and, consequently, its framers had to expose
the fangs of art 7(1) to a considerable extent in order to achieve consensus. Article 7(1) of the
Convention (which was never actually invoked in a reported case: Lando & Nielsen at 1722)
is now replaced by arts 9(1) and (3) of Rome I:
organization, to such an extent that they are applicable to any situation falling within their
• • •
3. Effect may be given to the overriding mandatory provisions of the law of the country
where the obligations arising out of the contract have to be or have been performed, in so far
as those overriding mandatory provisions render the performance of the contract unlawful. In
considering whether to give effect to those provisions, regard shall be had to their nature and
purpose and to the consequences of their application or non-application.
The inroad into party autonomy is now permissible only if three cumulative criteria are
satisfied. The relevant provisions must be part of the law of the place of performance (no
more “close connection”); they must meet the description of “overriding mandatory provi-
sions” in that, because of their crucial role in protecting public interests, they are applicable
irrespective of the law that otherwise governs the contract; and they must actually make
performance “unlawful.” These criteria were to some extent inspired (Lando & Nielsen at
1722) by the English rule in Ralli Bros v Compania Naviera Sota y Aznar, [1920] 2 KB 287, dis-
cussed in Gillespie, which says that an English court will not enforce a contract, even though
valid by its proper law (which there was English), if to do so would make the defendant liable
for refusing to commit an act that is illegal by the law of the place of performance.
The OAS Convention has only a laconic provision (art 11(2)) that says:
It shall be up to the forum to decide when it applies the mandatory provisions of the law of
another State with which the contract has close ties.
Article 11(2) of the Hague Principles is to the same effect.

IV. The Law Governing Unjust Enrichment Claims 769
E. Third-Party Rights
Whether a contract confers rights or defences on a third party would seem generally to be
governed by the proper law of the contract. In Saint John Shipbuilding & Dry Dock Co v Kings
land Maritime Corp (1981), 126 DLR (3d) 332 (FCA), the trial judge and the Federal Court of
Appeal differed as to what the proper law of the contract of carriage was, but both held that
the proper law determined whether a stevedore, as a third party to the contract, could take
the benefit of an exclusion of liability contained in the contract.
Compare Zurich Life Insurance Company Limited v Branco, 2015 SKCA 71, which involved an
accident insurance claim by a welder employed by a Saskatchewan-based employer at a
mine in Kyrgyzstan. The welder was a Canadian citizen who lived in Portugal. One issue was
whether he could claim for mental distress and punitive damages. The group insurance pol-
icy had been taken out by the employer with a Swiss insurer and was expressly governed by
Swiss law, according to which these claims failed. By Saskatchewan law the claims were viable.
The court held that the employee was a beneficiary of the policy but not a party to it and so
was not bound by the choice of law clause as such. Nor did the clause expressly make Swiss
law applicable to the claims of the beneficiaries (which the court said obiter at para 158
would have been effective). Hence, the court held, the individual beneficiary’s claim was
subject to the system of law that had the closest connection with the claim. Under the cir-
cumstances of the case, including the fact that benefits under the policy were administered
in Switzerland, the claim was held to be more closely connected with Swiss law than Sas-
katchewan law.
IV. THE LAW GOVERNING UNJUST ENRICHMENT CLAIMS

Although unjust enrichment claims are distinct from claims on a contract, the handling of
the choice of law problem bears a strong resemblance to the choice of law approach to
contract, as the following case illustrates.
Minera Aquiline Argentina SA v IMA Exploration Inc

2006 BCSC 1102, aff ’d 2007 BCCA 319
[An Argentinian mining company, Minera Aquiline, alleged that IMA Exploration, a
British Columbia company, had acquired what turned out to be a rich mining property
in Argentina by misusing information (the BLEG A data) supplied to it in confidence by
employees of Newmont, an international mining company with headquarters in Colorado.
Newmont indirectly owned Minera at the time. The data were provided to IMA for the
purpose of its potential purchase of a mining property controlled and managed by Minera
called Calcatreu. IMA instead acquired another mining property by making unauthorized
use of the data. A good deal of the case, both at trial and on appeal, was about whether
the British Columbia court had jurisdiction to declare that IMA was under a constructive
trust to transfer this property to Minera, even though the property was an immovable in
a foreign country. Both courts held the answer was yes, because the claim was one against
IMA for the breach of a personal obligation rather than a claim directly asserting title to
the property itself. Both courts also held that the order should be granted. An issue
considered at trial, but not on appeal, was what law governed Minera’s claim.]
KOENISBERG J:
[182] The above analysis does not determine that British Columbia law ought to apply
to the issues in this action. It means only that the claim is not primarily a claim over a
foreign immovable dictating that the law of Argentina should apply. It remains to properly
characterize the claim and apply the appropriate choice of law rule.
[183] The parties agree that a claim for breach of confidence is a restitutionary claim
for unjust enrichment resulting from a breach of duty: Cadbury Schweppes Inc. v. F.B.I.
Foods Ltd., [1999] 1 S.C.R. 142, 59 B.C.L.R. (3d) 1, Lac Minerals Ltd. v. International
Corona Resources Ltd., [1989] 2 S.C.R. 574, 61 D.L.R. (4th) 14.
[184] There is also no dispute that the choice of law rule for unjust enrichment claims
is the “proper law of the obligation.” The parties disagree, however, on how to determine
what that proper law is in the circumstances of this case.
[185] Both parties rely on the choice of law rule set out by Dicey and Morris, On the
Conflict of Laws, 12th ed. (London: Stephens, 1993) at p. 1471, though they differ on how
the rule should be interpreted. Dicey and Morris state that the proper law of the obligation
is to be determined according to the following subrules:
(a) If the obligation arises in connection with a contract, its proper law is the law applicable
to the contract;
(b) If it arises in connection with a transaction concerning an immovable (land) its proper
law is the law of the country where the immovable is situated (lex situs); and
(c) If it arises in any other circumstances, its proper law is the law of the country where
the enrichment occurs.
[186] The plaintiff argues that these subrules were intended to apply in descending
order, such that subrule (a) would apply if the case involved a relevant contract irrespective
of whether the issue also involved a transaction concerning an immovable.
[187] According to the plaintiff, subrule (a) applies to the present case because the
phrase “arising in connection with” ought to be construed broadly to include non-
contractual claims that nevertheless relate to a relevant contract or pre-existing contractual
relationship: Sarabia v. Oceanic Mindoro (The) (1996), 26 B.C.L.R. (3d) 143, [1997] 2
W.W.R. 116 (C.A.). They rely in this respect on the broader statement of subrule (a) found
in Castel & Walker at §32.1, which mentions an obligation arising in connection with “a
pre-existing contractual relationship either actual or intended.”
[188] Although the plaintiff accepts, for the purpose of this alternative common law
claim only, that the BLEG A data may not have been strictly covered by the Confidentiality
Agreement, the plaintiff argues that the obligation of confidence with respect to the data
nevertheless arose “in connection with” that agreement or at least in connection with the
pre-existing contractual relationship between these parties. Absent that contractual
relationship, there would have been no delivery of the BLEG A data to the defendants
and no opportunity for the breach of confidence alleged here. The plaintiff submits that
in such circumstances, the court ought to conclude that the parties addressed their minds
to the choice of law that would govern their relationship, and subrule (a) must apply.
[189] The parties agree that the law this court should apply to the contract is B.C. law
because although the contract was governed by Colorado law, neither party pleaded or
proved that law. The court must therefore act as if Colorado law is the same as the law of
B.C.: “Mercury Bell” (The) v. Amosin, [1986] 3 F.C. 454, 27 D.L.R. (4th) 641 (Fed. C.A.).
[190] The plaintiff ’s submission, as I understand it, is based on logical inference and
the principle of freedom of contract. In effect, the plaintiff asks the court to infer from
the fact that the parties expressly chose the law of Colorado to govern the Confidentiality
Agreement that the parties intended Colorado law to govern all aspects of their business
relationship or at least all aspects of that relationship relating to the exchange of confi-
dential information. Following that inference, the plaintiff says, the court ought to respect
and give priority to the apparent choice of the parties, finding that the law of the Confi-
dentiality Agreement is the proper law of the obligation notwithstanding that the parties
did not expressly indicate that choice for the BLEG A data by executing a specific contract
with respect to it.
[191] The defendants challenge the plaintiff ’s hierarchical interpretation of Dicey and
Morris’s choice of law rules. They interpret the passage as citing independent rules
designed to apply in different circumstances. They emphasize that subrule (b) recognizes
the longstanding rule of non-interference with foreign immovables, which is based on
the need to ensure that any order affecting foreign land would not be unenforceable
because of a conflict with local laws.
[192] Moreover, the defendants dispute that the obligation alleged by the plaintiff in
the common law breach of confidence claim can be considered to have arisen “in con-
nection with a contract” because the plaintiff has advanced this claim as an alternative to
its claim based on the Confidentiality Agreement. The court is only concerned with a
common law claim if the contract between the parties is found to be inapplicable to the
issues in this litigation. Thus, according to the defendants, the obligation the plaintiff
asserts necessarily and expressly arises outside of contract, making subrule (a) irrelevant
to this action.
[193] While I agree with the plaintiff ’s submission that the phrase “in connection
with” ought to be more broadly interpreted than the phrase “arising under” (an alternative
phrase that might readily have been used if that was what had been intended), this does
not resolve the matter. The same phrase is repeated in the second subrule relied upon by
the defendants concerning an obligation that arises “in connection with” a transaction
concerning an immovable. The same broad interpretation applied to (a) must surely be
applied to (b).
[194] The crux of the issue on the facts of this case is whether the choice of law rules
set out by Dicey and Morris intended to be hierarchical. The plaintiff says this hierarchy
accords with common sense, logic, and proper respect for the principle of freedom of
contract, but was unable to cite any authority that recognizes such a hierarchy. I take the
defendant’s position to be that the principles of sovereignty and territoriality underlying
subrule (b) are at least equally if not more deserving of the court’s respect as freedom of
contract and any inference that may be drawn about the parties’ intended choice.
[195] In my view, any difficulty arising from the apparent clash of the first two subrules
can be resolved by taking a principled rather than a categorical approach to the choice of
law issue. The essential question to be answered in choosing the appropriate law to govern
a claim is, “what legal system has the closest and most real connection to the obligation?”
This principle is supported by the comments of Castel & Walker at §32.1:
Since choice of law rules tend to be based on the elements of a cause of action and not on
the appropriate consequences of seeking relief, the law governing a claim for unjust enrich-
ment will depend on the nature of the wrong giving rise to the claim. For instance, where
the obligation arises in connection with a pre-existing contractual relationship either actual
or intended, the obligation is most closely connected with the law applicable to the contractual
relationship. Similarly, the obligation to restore the benefit of an unjust enrichment in con-
nection with a person’s ownership of an immovable may have its closest and most real connec-
tion with the law of the legal unit where the immovable is situated. Thus, it has been proposed
that the law governing restitutionary claims in general should be the “law of the unjust factor.”
Should an analysis based on this approach fail to yield a compelling result, the obligation to
restore the unjust enrichment could be regarded as more closely connected with the law of
the place where the immediate or ultimate enrichment occurred since the enrichment is at
the heart of the action and “the law of the place of the defendant’s enrichment is more closely
connected with the defendant than the law of the place of the plaintiff ’s impoverishment.”
[196] Thus, the principle underlying the subrules set out by Dicey and Morris appears
to be the strength of the connection between the obligation and the competing legal
systems. Additional support for this statement of principle can be found in Christopher
v. Zimmerman (2000), 80 B.C.L.R. (3d) 229, where our Court of Appeal found that the
appropriate choice of law was the law of the place where the enrichment occurred because
that was the law that had “the closest and most real connection” with the obligation in
question. Similarly, in Unifund Assurance Co. v. Insurance Corp. of British Columbia, [2003]
2 S.C.R. 63, 2003 SCC 40 at para. 58, and Castillo v. Castillo, [2005] 3 S.C.R. 870, 2005
SCC 83 at para. 44, the Supreme Court of Canada emphasized the relative strength of the
connection when it held that the connection required for choice of law issues must be
more robust and requires a higher threshold than the “real and substantial” connection
applied to questions of jurisdiction.
[197] A choice of law rule based on a strong, meaningful connection between the law
and the obligation it will govern is consistent with the philosophy underlying private
international law. As Hessel E. Yntema expressed in the article, “The Objectives of Private
International Law” (1957), 35 Can. Bar Rev. 721, at p. 741, cited with approval in Morguard
Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, 52 B.C.L.R. (2d) 160 at para. 32:
In a highly integrated world economy, politically organized in a diversity of more or less
autonomous legal systems, the function of conflict rules is to select, interpret and apply in
each case the particular local law that will best promote suitable conditions of interstate and
international commerce, or, in other words, to mediate in the questions arising from such
commerce in the application of the local laws.
[198] Where claims involve multiple legal systems, the promotion of suitable condi-
tions for pursuing those claims and the principles of order and fairness can best be
achieved by applying the law of the place with the closest and most real connection to the
obligation in question.
[199] Castel & Walker in the quotation cited above suggests that Dicey and Morris’s
third subrule, “the law of the country where the enrichment occurs,” can be used essentially
as a tie-breaker should the application of the first two rules “fail to yield a compelling
result.” That interpretation is not wholly consistent with the language in subrule (c), which
specifies that the place of enrichment ought to be considered “in any other circumstances”;
that is, circumstances other than those in which a contractual relationship or an immov-
able is involved. However, because Dicey and Morris do not propose a choice of law for
a situation in which both (a) and (b) apply, it may be possible to stretch the language as
far as Castel & Walker suggest.
[200] In my view, a more principled approach to a case such as this one, where the
obligation arises in connection with both a pre-existing contractual relationship and a
transaction involving foreign land, would be to examine all the factors that could be rel-
evant to the strength of the connection between the obligation and the competing legal
systems. Such factors should be given weight according to a reasonable view of the evi-
dence and their relative importance to the issues at stake. Thus, each of the factors listed
by Dicey and Morris would be considered and weighed along with the following non-
exhaustive list of factors to determine which set of laws has the closest and most substan-
tial connection to the obligation.
• [w]here the transaction underlying the obligation occurred or was intended to
occur;
• [w]here the transaction underlying the obligation was or was intended to be car-
ried out;
• where the parties are resident;
• where the parties carry on business;
• what the expectations of the parties were with respect to governing law at the time
the obligation arose; and
• whether the application of a particular law would cause an injustice to either of the
parties.
[201] In many cases, perhaps most, it may be that the court will find after examining
all the connecting factors that the law of the place where the enrichment occurred is in fact
the law with the closest and most real connection to the obligation. However, in my view,
that is a conclusion that the court should reach only after full examination and analysis.
[202] The plaintiffs submit that “even if the court were to consider the place of enrich-
ment, IMA certainly treats the enrichment as its own.” Because IMA is incorporated in
British Columbia, a court applying the law of the place of the enrichment should apply
the law of B.C.
[203] The defendants point out that all of the circumstances giving rise to the obliga-
tion asserted by the plaintiffs occurred in Argentina. The BLEG A data was created in
Argentina, was delivered to the defendants in Argentina, and was used to stake mineral
claims in Argentina.
[204] In the circumstances, I find that the enrichment occurred in Argentina. That is
also where both parties carried on business at the time the obligation arose, and where
the data was intended to be used, even if the only permitted use or transaction in question
was, as I have found, the evaluation and sale of Calcatreu.
[205] One cannot ignore, however, the fact that neither of the parties involved in the
exchange of the BLEG A data were Argentine companies, and none of the principals
involved in the circumstances leading up to the breach of confidence were Argentinean.
The principal actors in this drama were all Canadians or Americans who lacked even a
superficial understanding of Argentine law with respect to the control and distribution
of confidential information. It is therefore very unlikely that these companies and indi-
viduals would have chosen or expected Argentine law to govern their actions and their
relationship.
[206] Conversely, each of the principal actors on both sides was aware of the Canadian
or Colorado law on this issue. Those were the systems of law under which both parties
routinely conducted their affairs. It is particularly significant, in my view, that Mr. Lhotka
admitted to being familiar with the Lac Minerals case and its implications at the time he
requested, received, and used the BLEG A data. Thus, the legal system that informed and
guided the perceptions and actions of the key players at the time the breach of confidence
occurred was Canadian and American law.
[207] In the circumstances, despite the fact that some important choice of law factors
point to Argentine law, I find that B.C. law, as it is described in Lac Minerals, has the
closest and most real connection to the obligation between these parties, and must apply
to determine liability of the common law claim.
NOTE
The Rome II regulation on the law applicable to non-contractual obligations has a set of
choice of law rules for unjust enrichment in art 10. The provision distinguishes between
unjust enrichment that concerns a relationship existing between the parties, such as one
arising from a contract or tort, and unjust enrichment that does not concern such a relation-
ship. In the former case the basic rule is to apply the law governing the relationship (para 1).
In the latter, it is to apply the law of the country where the parties habitually reside and
where the events giving rise to the enrichment took place, if these were all in the same coun-
try (para 2); failing that, the applicable law is that of the country in which the unjust enrich-
ment (as distinct from the events giving rise to it) took place (para 3). And all these rules are
subject to an overriding exception if the obligation arising out of the unjust enrichment is
manifestly more closely connected with another jurisdiction than the one indicated by the
rules (para 4).
V. RELATED TOPICS IN OTHER CHAPTERS

Most issues relating to the assignment of contracts are treated, for choice of law purposes,
as relating to the transfer of intangible movable property: see Chapter 15.
To the extent that a contract deals with title to property, the choice of law rules about the
validity of such transfers of title will be relevant: also noted in Chapter 15.

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60 UNBLJ 12.
PA R T S I X
Property
CHAPTER FOURTEEN
Immovables
I. Characterizing Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779

II. Exercising Jurisdiction Over Foreign Immovables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
A. The Moçambique Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782
B. Exceptions Based on Contract or Equity Between Parties . . . . . . . . . . . . . . . . . . . . 789
III. Recognizing Foreign Judgments Affecting Land in the Forum . . . . . . . . . . . . . . . . . . . . . 796
IV. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
A. Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804
B. Formal Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
C. Essential Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
D. Civil Code of Quebec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
V. Other Kinds of “Immovables” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807
Immovables give rise to special challenges in private international law—challenges that

affect every aspect of the analysis—characterization, jurisdiction, the recognition and
enforcement of foreign judgments, and the determination of the applicable law. This chap-
ter considers each of these in turn.
I. CHARACTERIZING IMMOVABLES
The first challenge in the private international law analysis of immovables is to determine
whether the case involves an immovable. In some situations, this will be obvious: whether A or
B owns the house in which they live is a question of title to an immovable; and whether A or B
owns the car parked in the driveway is a question of title to a movable. But what about
whether A or B is entitled to redeem the mortgage on the house if it goes into default? Is that
a question of contract—that is, the loan under which they borrowed the money—or is it a
question of title to the immovable that would be transferred upon foreclosure?
In this way, challenges in interjurisdictional property disputes can arise at the fundamen-
tal level of definition. Even if two legal systems agree on which laws should be applied to
questions relating to immovables and to questions relating to movables, each legal system
might draw the line between these types of property differently. Recognizing this, private
international lawyers in the common law long ago decided that they would abandon the
familiar terms “real property” and “personal property” and instead adopt the terms “immov-
ables” and “movables.” This underscored the commitment of common lawyers in questions
779
780 Chapter 14 Immovables
of private international law to undertake the process of characterization on the same basic
premises as their civil law counterparts. Here is what Lord Tomlin had to say in Macdonald v
Macdonald, [1932] SC 79 at 84 (HL):
The English law classifies property as real property or personal property. The terms moveable
and immoveable are not technical terms in English law when it is not regarding the law of a
foreign country. The Scots law distinguishes between property which is heritable and property
which is moveable, and, except to this extent, does not any more than the English law recognise
for internal purposes the antithesis between moveable and immoveable. But each system,
when brought into contact with a foreign system, does, in accordance with the principles of
what is called private international law, recognise the antithesis for the purpose of applying the
rule of comity that, in matters of succession, moveables devolve according to the law of the
domicile of the deceased and immoveables devolve according to the lex rei sitae.
The terms “movables” and “immovables” have become firmly established in the field of
private international law, despite the occasional suggestion to the contrary. These terms are
used even in cases in which both legal systems would otherwise rely on other concepts, such
as those of “realty” and “personalty.”
Sometimes it is not enough simply to amend the legal terminology and to harmonize the
legal principles. Even between legal systems that are similar to one another, there can be
differences in the contents of the categories—things that are considered immovables in one
system may be considered movables in another system. When this happens, which defin-
ition of “immovables” should be applied? Or, put differently, which law should be applied to
characterize the property in question as either movable or immovable?
As discussed in Chapter 9, when there is a discrepancy between the law of the forum and
some other potentially relevant law over a question of characterization, the law of the forum
usually applies. However, a different approach applies in the case of the distinction between
movables and immovables. Article 3078 of the Civil Code of Quebec (CCQ) provides that
“characterization of property as movable or immovable is made according to the law of the
place where it is situated.” As the following decision explains, this approach is also taken in
the common law provinces.
Hogg v Saskatchewan (Provincial Tax Commission)

[1941] 3 WWR 605 (Sask CA)
MACKENZIE JA:
[7] This is an appeal from a judgment of MacDonald J ([1941] 2 WWR 253) denying
the right of the Provincial Tax Commission acting under the authority of The Succession
Duty Act … to levy succession duty upon the beneficiaries of an estate in respect of certain
property consisting of 37 mortgages charged upon lands in the province of British Col-
umbia. These mortgages form part of the estate of an intestate, one Hannah Dalrymple,
who died domiciled in this province on March 2, 1939. …
• • •
[9] The right of the appellant to levy such duty depends primarily upon the question
whether the beneficiaries’ claim to the mortgages in question is based upon a “devolution
I. Characterizing Immovables 781
by or under the law of the province” as provided by s. 3(2) of The Succession Duty Act,
1938. This in turn depends upon the determination of the question whether the mortgages
are to be classed as “movables” or “immovables.” If movables they devolve upon the bene-
ficiaries under the law of this province pursuant to the classic rule “mobilia sequuntur
personam.” If not, they will devolve upon the persons entitled to take them according to
the law of British Columbia.
[10] A number of cases have been cited … where various courts of high authority
have held mortgages to be movables. Notwithstanding these decisions it is always to be
borne in mind that the question whether certain property is a movable or immovable
must be determined by the law of the country where it is situated. … Since this involves
the ascertainment of a condition of law subsisting in a jurisdiction other than Saskatch-
ewan, it must be treated as a question of fact … to be determined generally by the evidence
of experts … .
[11] … Mr. Norris deposes that according to the law of British Columbia not only lands
and houses thereon but also servitudes and easements and other charges on land such as
mortgages and trust estates are deemed to be in the sense of the law immovables. …
[12] Against these statements Mr. Long deposes that the division of property into
movables and immovables is no part of the law of British Columbia for the purpose of
distribution of estates of a person dying intestate, but that money secured by mortgages
on land in British Columbia devolves as personal property and not as real property under
the said law.
[13] Upon these affidavits, … while admitting the probable correctness of the alleg-
ations made by Mr. Norris, [the Board of Revenue Commissioners] express the opinion
that the same would only be relevant if the tax imposed by the Saskatchewan Succession
Duty Act were a tax on property. … [T]he board accepts without qualification Mr. Long’s
statement that the division of property into movables and immovables is no part of the
law of British Columbia for purposes of distribution of estates of persons dying intestate
or for the purpose of a taxation the basis of which is such distribution. The board appears
to have thought that this statement really disposes of the matter and makes the succession
in question taxable. … In coming to this conclusion it seems to me that they have failed
to take due cognizance of the fact that Mr. Norris’ affidavit is taken up with a statement
of the law of British Columbia having regard to the nature of the property, to wit, the
mortgages in question, in which respect he deposes that they are classified as immovables,
whilst Mr. Long directs his affidavit to a statement of that law having regard to a distribu-
tion of moneys secured by mortgage which he deposes devolve as personal and not as
real property.
[14] Since it is thus affirmed that the mortgages are classified as immovables, under
the law of British Columbia it follows that such was the law to be taken into account by
the appellant as determining the proper law of succession in this case. …
[15] In my opinion therefore the board should have found that the mortgages in
question did not devolve upon the beneficiaries under the law of this province within the
meaning of s. 3(2) of The Succession Duty Act, 1938, and that the judgment appealed from
is right in holding that they are not subject to assessment for succession duty by the prov-
ince of Saskatchewan.
NOTES
1. Hogg shows how the division of property into movables and immovables is important
both for transfers inter vivos and for succession. In Re Berchtold, [1923] 1 Ch 192, the court had
to choose between the characterization given to the property under the law of the situs that
applied to local cases and the law of the situs that applied for purposes of the conflict of
laws. In Berchtold, a count who had died domiciled in Hungary was entitled to an interest in
English land held on a trust for sale, but not yet sold. The question arose as to whether this
interest should pass to those entitled under Hungarian law or to those entitled under English
law. Even though, under English law (the lex situs), the count’s interest was considered per-
sonal property for domestic purposes, it was considered an immovable for the purpose of
the conflict of laws. The property was characterized as immovable because the land was
situated in England. English law governed because immovables are governed by the lex situs.
Had the count’s interest been considered a movable, the law of his domicile, Hungary, would
have been applied.
2. Re Berchtold was followed in In re Burke Estate, [1927] 3 WWR 718 (Sask KB), in which the
court concluded that a vendor’s interest in land in Saskatchewan, subject to an agreement
for sale, was an immovable and hence its devolution on an intestacy was governed by Sas-
katchewan law despite the fact that the deceased had died domiciled in Washington: cf Re
Hole, [1948] 2 WWR 754 (Man KB).
3. In War Eagle Mining Co v Robo Management Co (1995), 13 BCLR (3d) 362 (SC), the peti-
tioner sought a declaration from the BC court that the respondent had no interest in certain
mineral claims staked by the petitioner in northern Saskatchewan. The court held first that
the mineral claims were situated where the land to which they related was situated—Sas-
katchewan—and rejected the petitioner’s contention that the claims were like shares, and
hence located where their transfer documents were located—British Columbia. The claims
were immovables under Saskatchewan law as the lex situs despite the fact that, by British
Columbia law, the claims would have been characterized as chattels. As a result, the court
concluded that it had no jurisdiction to hear the matter pursuant to the Moçambique rule,
discussed below.
II. EXERCISING JURISDICTION OVER FOREIGN IMMOVABLES

A. The Moçambique Rule
One of the reasons courts are concerned with characterizing immovables in a consistent
manner is that this can affect their jurisdiction to decide the matters in dispute. The general
rule is stated in a unilateral fashion in art 3152 of the Civil Code of Quebec, which provides:
“Quebec authorities have jurisdiction to hear a real action if the property in dispute is situ-
ated in Quebec.” McLachlin JA (as she then was) stated the common law rule in bilateral
fashion as follows in Tezcan v Tezcan (1987), 11 RFL (3d) 113 at 117, 20 BCLR (2d) 253, [1988] 2
WWR 264 (CA): “The general rule is that the courts of a country have no jurisdiction to adjudi-
cate on the right and title to lands not situate within its borders. Only the courts of the juris-
diction in which lands are situate may adjudicate on the right and title to such lands.” This
rule is sometimes described as the Moçambique rule, after the following case in which it was
first definitively pronounced.
II. Exercising Jurisdiction Over Foreign Immovables 783
British South Africa Co v Companhia de Moçambique

[1893] AC 602 (HL) (footnotes incorporated)
[T]he plaintiffs by their statement of claim alleged (inter alia) that the plaintiff company
was in possession and occupation of large tracts of land and mines and mining rights in
South Africa; and that the defendant company by its agents wrongfully broke and entered
and took possession of the said lands, mines and mining rights, and ejected the plaintiff
company, its servants, agents and tenants therefrom; and also took possession of some of
the plaintiffs’ personal property and assaulted and imprisoned some of the plaintiffs.
• • •
The plaintiffs claimed (inter alia) (1) a declaration that the plaintiff company were
lawfully in possession and occupation of the lands, mines and mining rights and other
property; (2) an injunction restraining the defendant company from continuing to occupy
or from asserting any title to the said lands, mines and mining rights, and from withhold-
ing and keeping possession of the said other property; (3) £250,000 damages.
The statement of defence in paragraph 1, … whilst denying the alleged title and the
alleged wrongful acts, said that the lands, mines and mining rights were situate abroad,
to wit in South Africa, and submitted that the court had no jurisdiction to adjudicate
upon the plaintiffs’ claim. …
LORD HERSCHELL LC:

My Lords, the principal question raised by this appeal is whether the Supreme Court
of Judicature has jurisdiction to try an action to recover damages for a trespass to lands
situate in a foreign country.
• • •
It was admitted in the present case, on behalf of the respondents, that the court could
not make a declaration of title, or grant an injunction to restrain trespasses, the respond-
ents having in relation to these matters abandoned their appeal in the court below. But it
is said that the court may inquire into the title, and, if the plaintiffs and not the defendants
are found to have the better title, may award damages for the trespass committed. My
Lords, I find it difficult to see why this distinction should be drawn. It is said, because the
courts have no power to enforce their judgment by any dealing with the land itself, where
it is outside their territorial jurisdiction. But if they can determine the title to it and compel
the payment of damages founded upon such determination, why should not they equally
proceed in personam against a person who, in spite of that determination, insists on
disturbing one who has been found by the court to be the owner of the property?
It is argued that if an action of trespass cannot be maintained in this country where
the land is situate abroad a wrong-doer by coming to this country might leave the person
wronged without any remedy. It might be a sufficient answer to this argument to say that
this is a state of things which has undoubtedly existed for centuries without any evidence
of serious mischief or any intervention of the legislature … .
But there appear to me, I confess, to be solid reasons why the courts of this country
should, in common with those of most other nations, have refused to adjudicate upon
claims of title to foreign land in proceedings founded on an alleged invasion of the pro-
prietary rights attached to it, and to award damages founded on that adjudication.
The inconveniences which might arise from such a course are obvious, and it is by no
means clear to my mind that if the courts were to exercise jurisdiction in such cases the
ends of justice would in the long run, and looking at the matter broadly, be promoted.
Supposing a foreigner to sue in this country for trespass to his lands situate abroad, and
for taking possession of and expelling him from them, what is to be the measure of dam-
ages? There being no legal process here by which he could obtain possession of the lands,
the plaintiff might, I suppose, in certain circumstances, obtain damages equal in amount
to their value. But what would there be to prevent his leaving this country after obtaining
these damages and re-possessing himself of the lands? What remedy would the defendant
have in such a case where the lands are in an unsettled country, with no laws or regular
system of government, but where, to use a familiar expression, the only right is might?
Such an occurrence is not an impossible, or even an improbable, hypothesis. It is quite
true that in the exercise of the undoubted jurisdiction of the courts it may become neces-
sary incidentally to investigate and determine the title to foreign lands; but it does not
seem to me to follow that because such a question may incidentally arise and fall to be
adjudicated upon, the courts possess, or that it is expedient that they should exercise,
jurisdiction to try an action founded on a disputed claim of title to foreign lands.
• • •
Whilst Courts of Equity have never claimed to act directly upon land situate abroad,
they have purported to act upon the conscience of persons living here. … “[W]ith regard
to any contract made, or equity between persons in this country, respecting lands in a
foreign country, particularly in the British dominions, this court will hold the same juris-
diction as if they were situate in England.”
NOTES
1. In the Moçambique judgment, Lord Herschell observed that “[i]t might be a sufficient
answer to this argument [against the exclusive jurisdiction of the courts of the situs] to say
that this is a state of things which has undoubtedly existed for centuries without any evi-
dence of serious mischief or any intervention of the legislature.” Do you agree? Or are you
more compelled by the counterargument that “if an action of trespass cannot be maintained
in this country where the land is situate abroad a wrong-doer by coming to this country
might leave the person wronged without any remedy”?
2. The rule has been controversial throughout its history. On the one hand, the relation-
ship between the Moçambique rule and the modern “real and substantial connection” test
was noted by Saunders J in War Eagle Mining Co v Robo Management Co (1995), 13 BCLR (3d)
362 at 365-66 (SC), thus suggesting its continued vitality in Canada. In an early decision, in
Brereton v Canadian Pacific Railway Co (1898), 29 OR 57 (H Ct J), the Moçambique principle was
extended to cover a suit in respect of negligent damage to foreign land. Later, in Albert v
Fraser Companies Ltd, [1937] 1 DLR 39 (NBSC (AD)), the plaintiff, a New Brunswick resident,
sued a New Brunswick corporation for negligently and wrongfully obstructing the flow of
waters from Quebec to New Brunswick with the result that her land, which was just across
the border in Quebec, had been damaged. She sought damages and an injunction to
restrain the defendant’s wrongful activity in New Brunswick. The majority applied the
Moçambique rule and held that there was no jurisdiction to entertain either claim, even in a
case where title to the land was not in dispute.
3. On the other hand, in dissent in Albert, above, Harrison J agreed that New Brunswick
could not determine directly title to land outside New Brunswick or the right to possession
of it, but the principles underlying this restriction did not apply to an action for damages in
tort, particularly where title to the land was not in dispute. In those days, if the plaintiff was
required to bring her action in Quebec, she could face problems in having the judgment
enforced in New Brunswick, where the defendant carried on business. Harrison J also sug-
gested that the Moçambique principle should not apply to wrongs committed in one Canad-
ian province causing damage to land in another Canadian province, because the House of
Lords could not have had this special situation in mind. Further, since the injunction sought
to restrain activities in New Brunswick rather than in Quebec and could be enforced only by
the courts of New Brunswick, he said it should have been considered. Adopting an approach
similar to the dissent in Albert, the Ontario High Court held in Malo and Bertrand v Clement,
[1943] 4 DLR 773 (Ont H Ct J) that it had jurisdiction to entertain a claim by former tenants
against their landlord for damages arising from the collapse of the roof of the building,
which was in Quebec, despite the existence of a dispute as to the ownership of the building.
4. Any doubt about the existence or scope of the Moçambique rule in England seemed
to have been dispelled in 1979 in the following decision by the House of Lords.
Hesperides Hotels Ltd v Muftizade

[1979] AC 508 (HL)
LORD WILBERFORCE:
My Lords, this appeal is from an order of the Court of Appeal setting aside the appel-
lants’ writ against the respondent Mr. Omer Faik Muftizade for want of jurisdiction.
The appellants are two companies registered under the laws of the Republic of Cyprus:
they are family concerns owned and controlled by Greek Cypriots. … After the Turkish
invasion those who controlled the appellants left Kyrenia and went to Limassol, which is
on the southern coast and is in the Greek Cypriot area. In 1976 it came to their knowledge
that efforts were being made in London to organise holiday tours to the hotels. … The
Turkish Federated State of Cyprus has as its representative in London, Mr. O.F. Muftizade,
respondent to this appeal.
[T]he appellants issued a writ with statement of claim endorsed against Aegean Turkish
Holidays Ltd. and Mr. Muftizade claiming damages, in effect for conspiracy, an account
of profits and an injunction restraining the defendants from conspiring to procure acts
of trespass to the appellants’ hotels. … Mr. Muftizade … contended that the court had no
jurisdiction to entertain the action upon the principle established by this House in British
South Africa Co. v. Companhia de Moçambique [1893] AC 602 (the “Moçambique case”).
• • •
First [the plaintiffs] contend that the rule established by that case has no application
where there is no dispute as to the title to foreign land and (I use their words) “no real
dispute over the right to possession of the foreign land.” This result, they say, can be
reached by a process of interpretation of the decision of this House without departing
from it.
Secondly they invite your Lordships to overrule, or depart from, the decision in the
Moçambique case, at least to the extent necessary to allow the present action to be brought.
Thirdly they argue that the rule has no application to an action based on a conspiracy
entered into in England even if the conspiracy is to effect or procure trespass to foreign land.
[Lord Wilberforce summarized the Moçambique rule by quoting rule 79 of Dicey & Mor-
ris, The Conflict of Laws, 9th ed (1973), which was in exactly the same terms as rule 39 of
the first edition of Dicey’s textbook set out below.]
The rule in the Moçambique case … is in two parts—if either applies, the court has no
jurisdiction. The second part refers to the recovery of damages for trespass and if correctly
stated must (subject only to the conspiracy point) preclude the action. So the questions
are (1) whether this part of the rule is correct in law, [and] (2) whether it should be read
subject to an exception for actions where no question as to title arises. My Lords, the
answer to the first of these questions cannot, in my opinion, admit of doubt. The history
of the rule, which is a long one, was examined in depth in the Moçambique case … . [I]t
was Lord Mansfield who attempted, in two cases … to support the doctrine that actions
for trespass against a defendant in England could lie. But this doctrine was decisively
rejected. …
It has not been revived since in any English reported case. …
The rejection of Lord Mansfield’s doctrine is inconsistent with any supposed limitation
of the rule to a case where title is disputed, for in neither of the cases decided by him was
there a dispute as to title. …
But, whether or not this House possesses greater powers of distinguishing earlier
decisions than does the Court of Appeal—a question which may raise some interesting
jurisprudential questions—I hardly find in this passage any encouragement to exercise
such powers as we have.
I therefore regard the formulation in Dicey, rule 79(2) as correctly stating the law.
Before considering whether we should overrule or depart from the Moçambique rule
in any respect I must deal with the argument that we have here the distinguishable claim
of a conspiracy formed in England. The majority in the Court of Appeal gave short shrift
to this argument and I think they were right. In my opinion the answer to this argument
is to be found in a passage in the judgment of Scarman LJ [1978] QB 205, 231:
But, more significant, the reliance upon the alleged conspiracy as distinct from the alleged
trespass which it is intended to effect is wrong in principle. The combination or agreement,
which is said to constitute (with overt acts and ensuing damage) the tort of conspiracy, is
unlawful only if there be the intention to effect a trespass upon foreign land. Unless that be
shown, there is nothing unlawful. And that can be established only if the court is prepared
to adjudicate upon the right to possession of the foreign land—which is exactly what the
House of Lords said the English courts may not do: see Lord Herschell LC in the passage
already cited.
I gratefully adopt this passage on which I am unable to improve.

• • •
I would allow the appellants’ appeal so far as to permit the action to continue as regards
the chattels but I would uphold the order striking out the writ and substantive claim so
far as they relate to land or immovable property in Cyprus.
NOTES
1. What do you make of Lord Wilberforce’s observation that the “appellants’ counsel has
assembled a massive volume of academic hostility to the rule as illogical and productive of
injustice”—commentary that would ordinarily be considered “of particular value” to the
English courts in this field—and his reluctance to depart from the status quo? Could the
result in Hesperides Hotels have something to do with the “political questions of some deli-
cacy” that might be raised by revising the rule, such that it should be something for the
legislature to address and not the courts? After all, the case arose in the context of the dis-
placement of the Cypriot owners of the hotels as a result of the Turkish invasion. Could a
pronouncement on the liability of the then current operators of the hotels have implications
for English foreign policy in respect of the countries in question? If so, might the issues in
Hesperides Hotels be better considered as an incident of the act of state doctrine, under
which every sovereign state is bound to respect the independence of every other sovereign
state and the courts will not sit in judgment of another government’s acts done within its
own territory?
2. If the result in Hesperides Hotels was influenced by the foreign relations issues that
formed the backdrop for the events giving rise to the claim of trespass, what does the Moçam-
bique rule stand for and what is its scope? Does the rule prohibit the determination of title
to foreign immovables? Does it also prohibit the recovery of damages for trespass to foreign
immovables? Does it admit of exceptions? To unravel this mystery, it may be helpful to return
to the analysis of the question provided in the first edition of Dicey’s The Conflict of Laws.
AV Dicey, The Conflict of Laws

(London: Sweet & Maxwell, 1896) at 209-18
Part I—Jurisdiction of the High Court

Chapter IV—General Rules as to Jurisdiction
(A) Where Jurisdiction Does Not Exist

• • •
(ii) In Respect of Subject Matter.

Rule 39.—Subject to the exception hereinafter mentioned, the Court has no jurisdic-
tion to entertain an action for
(1) the determination of title to, or the right to the possession of, any immovable
situate out of England (foreign land), or
(2) the recovery of damages for trespass to such immovable.
Comment
This rule is now well established, and, whatever be its historical origin,—a matter still
open to discussion,—is on the whole in conformity with that “principle of effectiveness”
which, as already explained, forbids a Court to give judgments which it cannot render
effective, or which it can render effective only by interfering with the authority of a foreign
sovereign or the jurisdiction of a foreign Court.
As to clause 1.—The principle of effectiveness amply justifies, even though it may not
historically account for, the refusal of English judges to adjudicate upon the title to, or
the right to the possession of, foreign land.
As to clause 2.—Respect for the principle of effectiveness does not, it may be said,
require or justify the refusal on the part of English judges to entertain actions for such
injuries to foreign land as admit of compensation in damages. This remark, however, is
more plausible than sound. It is impossible to keep an action for trespass to land free from
questions as to the title of the land; and injustice would often ensue were our Courts to
deal with the right to the ownership or the possession of the land. The refusal, therefore,
to entertain any action whatever with regard to foreign land is, whatever its origin, a
legitimate application or extension of the principle of effectiveness.
• • •
Exception.—The Court has jurisdiction to entertain an action against a person who is

in England respecting an immovable situate out of England (foreign land), on ground of
either—
(a) a contract between the parties to the action, or
(b) an equity between the parties
with reference to such immovable.
Comment
The principle on which this exception, derived from the practice of the Court of Chancery,
rests, is that though the Court has no jurisdiction to determine rights over foreign land,
yet, when from a person’s presence in England the court has jurisdiction over him, the
Court will compel him to dispose of, or otherwise deal with, his interest in foreign land
so as to give effect to obligations which he has incurred with regard to the land. The obliga-
tions which the court will thus enforce are not easily brought under any one definite head.
Westlake describes them as obligations relating to immovables which arise from or as
from, a person’s own contract or tort. Foote states that “the English Courts, acting in
personam and not in rem, will make decrees, upon the ground of a contract or other equity
subsisting between the parties, respecting property situated out of the jurisdiction,” i.e.,
out of England.
This anomalous jurisdiction, it has been laid down, is grounded, like all other juris-
diction of the Court [of Chancery], not upon any pretension to the exercise of judicial or
administrative rights abroad, but on the circumstance of the person of the party on whom
this order is made being within the power of the Court. If the Court can command him
to bring home goods from abroad, or to assign chattle interest, or to convey real property
locally situate abroad; —if, for instance, as in Penn v. Lord Baltimore, it can decree the
performance of an agreement touching the boundary of a province in North America,
or, as in the case of Toller v. Carteret, can foreclose a mortgage in the Isle of Sark, … in
precisely like manner it can restrain the party being within the limits of its jurisdiction
from doing anything abroad, where the thing forbidden be a conveyance or other act in
pais, or the institution or prosecution of an action in a foreign Court.
The Courts of Equity in England are, and always have been, Courts of conscience,
operating in personam and not in rem; and in the exercise of this personal jurisdiction
they have always been accustomed to compel the performance of contracts and trusts as
to subject which were not either locally or ratione domicilii within their jurisdiction.
This indefinite jurisdiction is exceptional, and is (substantially) confined to cases in
which there is either a contract between the parties, or something of the nature of a trust.
The Court, further, will not make a decree which runs contrary to the law of the coun-
try where the land affected is situate. “If indeed, the law of the country where the land is
situate should not permit, or not enable, the defendant to do what the Court might
otherwise think it right to decree, it would be useless and unjust to direct him to do the
act; but when there is no such impediment, the Courts of this country, in the exercise of
their jurisdiction over contracts made here, or in administering equities between parties
residing here, act upon their own rules, and are not influenced by any consideration of
what the effect of such contracts might be in the country where the lands are situate, or
of the manner in which the Courts of such countries might deal with such equities.”
NOTES
1. Relying on the “principle of effectiveness,” Dicey’s rule provides that courts should not
purport to adjudicate disputes that will lead to orders in rem—that is, binding on the whole
world—affecting title to foreign land because they cannot ensure that those orders will be
enforced in the courts where the land is situate. However, courts are not precluded from
adjudicating disputes that will lead to orders in personam between the parties before them
who are subject to compulsory measures of enforcement, provided that the matters are
otherwise within the jurisdiction of the court, and provided that the orders can be carried
out by the party without contravening the laws of the place where the immovable is located.
Does this pragmatic and prudential analysis of the rule persuade you?
2. Does the “principle of effectiveness” help to explain the exceptions that have been
made to the Moçambique rule in the cases in the following section?
B. Exceptions Based on Contract or Equity Between Parties

The restrictions on jurisdiction reflected in the Moçambique rule have the potential to cause
considerable inconvenience. Recall that, in the Moçambique decision itself, Lord Herschell
mused on the difficulties that might be faced by the parties in a “case where the lands are in
an unsettled country, with no laws or regular system of government, but where, to use a
familiar expression, the only right is might.” As intriguing as that might be, the Moçambique
rule can also arise in a great many other situations that are far less exotic. Consider the fol-
lowing case in which one Ontario couple who spent the winters in Florida wished to seek
recovery in Ontario from another Ontario couple whose Florida condominium had a leaky
toilet that caused damage to their condominium in the unit below.
Godley v Coles
(1988), 39 CPC (2d) 162 (Ont Div Ct), aff ’d (1988), 40 CPC (2d) xlvi (Ont H Ct J)
CARNWATH DCJ (orally):

[T]he plaintiffs, who are husband and wife, reside in the city of Burlington, in the
province of Ontario. They are the joint owners of a condominium located in the city of
Bradenton in the state of Florida. …
The defendants, also husband and wife, reside in the city of St. Catharines, in the
province of Ontario, and are the owners of a condominium unit located directly above
the plaintiffs’ condominium unit. …
The statement of claim alleges that towards the end of May or beginning of June 1987,
water escaped into the plaintiffs’ condominium unit from a crack in the toilet tank owned
by the defendants and located in the defendants’ condominium unit; allegations of dam-
age are made on behalf of the plaintiffs with particular reference to the walls, ceiling, floor,
carpet, furniture, wall-hangings and other personal items contained in the condominium.
[I]t is the … submission of the defendants … that the plaintiffs are not entitled to bring
the action in the province of Ontario based upon the principle … that the province of
Ontario has no jurisdiction to entertain an action to recover damages for a trespass to
land situate abroad. That was the rationale of what is referred to as the Mocambique case,
supra.
Counsel for the moving party relies also on the case of Hesperides Hotel Ltd. v. Muf-
tizade, [1978] 2 All ER 1168.
The Mocambique case was referred to in the Brereton case, … which latter case involved
the proposed action in the province of Ontario for the negligent management of the CPR
Railway Line whereby the plaintiff ’s premises, it was alleged, burned down. In the Brereton
case it should be noted the plaintiff ’s title to the land was in dispute, and the court found,
among other things, that the issue had to be decided by the law of the place where the
land was situate … .
• • •
The question of bringing action in another jurisdiction for remedies in personam where
land has been involved, and the rationale of the Mocambique case has been considered at
some length in two articles to which the court has been referred by counsel for the
respondents: the first article being “Torts and Foreign Immovables Jurisdiction in Conflict
of Laws,” published in 18 UWO Law Review 295, authored by Messieurs Welling and
Heakes; the second article referred to is that contained in the edition of Conflict of Laws,
c. 2, part 3, authored by Professor James G. McLeod, and published by Carswell in 1983.
The thrust of both of these articles is to call into question the application of the doctrine
in Mocambique in every situation where an interest in land is involved in an action in a
foreign jurisdiction, even though the predominant qualities of the action in the foreign
jurisdiction relate to an action in personam, and where the interest in land is of secondary
importance. To quote from p. 298 of the article written by Messieurs Welling and Heakes:
Extended application of the rule precluding jurisdiction in actions relating to foreign
immovables can have draconian effects.
The article goes on to treat some examples which, in the opinion of the authors, should
preclude the application of the Mocambique principle in every instance where an interest
in land is involved.
In the matter before the court, the statement of claim and the statement of defence
indicate that a substantial proportion of the damages contained in the heads of the state-
ment of claim may well be found to be damages to movables, as opposed to immovables.
Both counsel concede that it is open to a court in Ontario to assume jurisdiction over an
action in which the plaintiff seeks to recover damages caused by negligence to movables
in another jurisdiction. The question is whether the introduction of minute or some
damage to immovables raises the application of the Mocambique principle in every instance
to the effect that the plaintiffs are precluded from suing in the province of Ontario.
I have concluded that the presence of some damage to immovable property in this case
should not disentitle the plaintiffs from bringing their action in the province of Ontario.
It is clear in the cases referred to me that one of the underlying principles, and perhaps
the primary underlying principle, for the existence of the Mocambique rule is to ensure
that in actions where title to property is in question, the jurisdiction in which the property
is located must hear the matter to the exclusion of every other jurisdiction, and with that
principle no one would disagree. The difficulty arises when that principle is extended to
fact situations where title to the property is not in issue, but rather damage caused by the
negligent acts of another person to immovable property is in question. In [Charron v La
Banque Provinciale du Canada, [1936] OWN 315] at 318, and referring to the Brereton
decision, Mr. Justice Hogg is reported as follows:
The defendant cited Brereton v. Canadian Pacific Railway Company (1898), 29 OR 57, as
authority that a direction be made that this action should not be entertained by an Ontario
court. This case is distinguishable from the present case in that in the Brereton case the title
to land in the Province of Manitoba was in dispute and that issue could be tried only in
Manitoba. There was also a claim for loss of household goods and such action could be
maintained in Ontario, but it was held that the action should not be severed into two parts,
and, as the principal complaint was as to the title of land, jurisdiction to entertain the action
as a whole must turn upon the locality of the land and that therefore the action must be tried
in the Province of Manitoba where the land was located. In the opinion of the late Chancellor
Boyd who heard the motion “the cases show that although jurisdiction exists in Ontario yet
it may rest in the sound discretion of the Court as to whether the action shall be entertained.”
• • •
Unlike the Brereton case, in the matter before me title to the land is not in dispute. The
characterization of the Brereton matter by Mr. Justice Hogg, as me, where the principal
complaint was as to the title of the land is completely different from the case before me.
If the Brereton case is authority for the proposition that in every instance where a plaintiff
sues for negligence, or seeks to sue for negligence, in the province of Ontario, and where
that negligence, in another jurisdiction, has resulted in damage, however slight, to what
can be described as “immovable property” and that, therefore, the plaintiff is precluded
from suing in Ontario, I disagree with that conclusion in Brereton. I prefer the underlying
rationale of Mr. Justice Hogg in the Charron case where he finds that Brereton was decided
mainly on the basis that title to the land was in dispute.
Having reviewed the two articles previously referred to above, I agree with the conclu-
sion of the authors, that the application of the rule in Mocambique should be restricted
to the facts of that case and that it should not be taken for authority that wherever damage
to land is included in the statement of claim, that an action for negligence to recover those
damages should be precluded from being brought in the province of Ontario where the
land is situate elsewhere.
On the rationale contained in the articles, I prefer to restrict the application of the
Mocambique rule, and find that on the facts before me the plaintiff should be entitled to
continue his action in this jurisdiction.
NOTE
Godley v Coles addresses the question of the scope of the Moçambique rule and whether the
rule applies in cases where title is not in dispute. The next decision considers the in personam
exception to the rule.
Ward v Coffin
(1972), 27 DLR (3d) 58 (NBSC (AD))
HUGHES JA (Limerick and Bugold JJA concurring):

This brings us to the question whether the plaintiff can maintain an action in this court
to enforce his agreement of sale of lands situate in Quebec against the defendant who is
a resident of and was served with the writ of summons in the action within this province.
The plaintiff ’s action is for specific performance of his agreement of sale with the
alternative claim for damage for its breach. Such an action is one in personam. There can
be no doubt that the court has jurisdiction over the defendant who resides in New Bruns-
wick and was served here. …
Where there is jurisdiction over the person the court has jurisdiction to entertain
an action for specific performance of an agreement of sale of lands situate outside the
province. …
[Upon reference to the principles described above in the excerpt from Dicey’s Conflict of
Laws, Hughes JA continued.]
No expert testimony was adduced to show, nor was it suggested by counsel, that the
lex loci rei sitae, i.e., the law of the province of Quebec, does not allow a contract for the
sale of land to be carried into effect if it is not in writing or if it is not signed by the party
to be charged but merely by an agent who has not been appointed in writing. As stated
by Lord Cottenham [in Re Courtney, Ex p Pollard (1840), Mont & Ch 239], a court in
trying an action in personam is not influenced by any consideration of what the effect of
the contract might be in the country where the lands are situate.
In so far as the formalities of the contract are concerned the plaintiff ’s contract being
one relating to land is valid if it complies either with the proper law of the contract, i.e.,
the lex situs, or the lex loci contractus: …
… The contract having been made in this province the law of New Brunswick applies: … .
While the formalities of an agreement of sale of immovables are sufficiently observed

if they comply with the law of the place where the agreement is entered into a conveyance
or transfer of an interest in land is always governed by the lex situs. Dicey’s states at pp. 657-8:
It is clearly established by judicial authority and no longer controversial among learned
writers that a contract with regard to land is governed by its proper law as defined in the
preceding chapter. A conveyance or transfer of an interest in land, on the other hand, is
always governed by the lex situs. If, by a contract made in England, X, a British subject resi-
dent in England, agrees to sell French land to A, another British subject resident in England,
the contractual relationship between X and A may, and probably will, be governed by English
law, but French law will govern the conveyance of the land.
The duty imposed on the defendant by the agreement of sale is therefore to convey the
properties in accordance with the law of the province of Quebec where the properties are
situate.
NOTES
1. The jurisdiction relied on in Ward v Coffin dates back at least as far as Penn v Lord Balti-
more (1750), 1 Ves Sen 444, 27 ER 1132 (Ch), in which the English courts ordered specific
performance of an obligation to convey land in America, and Tulloch v Hartley (1841), 1 Beav
114, in which the English courts ordered specific performance of an obligation to convey
land in Canada. In recent years this jurisdiction has been exercised to allow a mortgagee of
foreign land to enforce the mortgagor’s personal covenant to pay: see Wincal Properties Ltd
v Cal-Alta Holdings Ltd, [1983] 3 WWR 57 (Alta QB), and to enforce trust or partnership obliga-
tions with respect to foreign land: see Kung v Kung (1990), 42 BCLR (2d) 145 (CA).
2. Matrimonial property disputes (discussed in Chapter 21) have proved fertile ground for
the exercise of the jurisdiction exemplified by Ward v Coffin. In Macedo v Macedo (1996), 19
RFL (4th) 65 (Ont Gen Div), for example, the court, having personal jurisdiction over the
husband, ordered him to sell land registered in his name in Portugal and share the net pro-
ceeds with his wife in partial satisfaction of his obligations under Ontario’s Family Law Act,
RSO 1990, c F.3. Alternatively, the husband could simply pay his wife a lump sum to represent
her share of the asset. In fact, as Wright J noted in Hunter v Hunter, 2005 SKQB 93 at para 21,
there is a “distinction between most jurisdictions, including Saskatchewan, where family
property legislation is a debtor – creditor statute that divides value, as opposed to jurisdic-
tions such as British Columbia, where the legislation creates property rights.” Consistent with
this approach, in Webster v Webster (1997), 32 OR (3d) 679 (Gen Div), Ferrier J granted an
interim order enjoining the husband from proceeding with the partition of land in Bermuda
pending the final determination of the wife’s claims under Ontario’s Family Law Act.
3. Part 3 of the Court Jurisdiction and Proceedings Transfer Act (CJPTA), now in force in Sas-
katchewan, British Columbia, and Nova Scotia, served to overcome a “conundrum” in one
case where a couple who had lived in Saskatchewan, but whose immovable property was
across the border in Alberta, were confined to the courts of their residence (Saskatchewan)
for the resolution of matrimonial property disputes, but required a determination affecting
title to the immovable property in Alberta: Mundt v Mundt Estate, 2006 SKQB 34. Pursuant to
Part 3 of the CJPTA, the court in Saskatchewan was able to transfer the proceeding to Alberta.
Catania v Giannattasio
(1999), 174 DLR (4th) 170 (Ont CA) (footnote incorporated)
LASKIN JA:
[1] The question on this appeal is whether an Ontario court has jurisdiction to declare
void a deed executed in Ontario, transferring title to foreign land.
• • •
[3] The appellants and the respondent live in Ontario. They are the only children of
Eugenio Catania, who died on January 17, 1993.
[4] By the terms of the deed, called a “Deed of Gift and Acceptance,” Mr. Catania
gifted a house and a parcel of land in Salerno, Italy to the appellants. The deed, which was
written in Italian, was signed in Ontario by Mr. Catania and the appellants on April 2,
1990. The respondent is not a party to the deed.
[5] Earlier, in 1983, Mr. Catania had made a holograph will in which he bequeathed
the same house and parcel of land to the appellants. The will, unlike the deed, provides
for a right-of-way over the property around the house in favour of all three children and
a right of first refusal in favour of the respondent’s son on any sale of the house.
[6] After his father died, the respondent began proceedings in Italy to determine the
validity of his father’s holograph will and to have his father’s property dealt with according
to Italian succession law. Those proceedings are still unresolved.
[7] In March 1997, the appellants registered the deed in the land registry office in Italy.
In May 1997, the appellants asked the respondent whether he wished to buy the house
and parcel of land. Otherwise, the appellants said that they intended to sell both prop-
erties. The respondent replied by bringing an application to the Ontario Court (General
Division) in which he challenged the validity of the deed, alleging that his father was
mentally incapacitated when he signed the deed and therefore did not understand the
nature of the document. …
• • •
[9] I doubt whether the respondent has standing to attack the validity of the deed. He
is not a party to it and he does not claim to be either the administrator or executor of his
father’s estate. He argues, however, that he has standing because he is a beneficiary under
his father’s will. Even if being a beneficiary gives him standing to challenge the validity
of the deed, he cannot do so in an Ontario court.
[10] The deed transfers title to land in Italy. The general rule is that Canadian courts
have no jurisdiction to determine title to or an interest in foreign land. …
[11] … The courts of most countries insist on the exclusive right to decide disputes
over their own lands. Thus, ordinarily a judgment by a Canadian court on a disputed title
to foreign land would be ineffective. If Canadian courts cannot grant an effective judgment
or an enforceable remedy concerning land in a foreign country, they should decline juris-
diction to decide these disputes. The respondent submits, however, that the Ontario courts
do have jurisdiction to decide the validity of the deed. He argues that, although the dec-
laration he seeks affects title to the properties in Italy, he is only asking for what amounts
to equitable relief against two Ontario residents.
[12] I do not accept this argument. Admittedly, … a long line of authorities has held
that Canadian courts have jurisdiction to enforce rights affecting land in foreign countries
if these rights are based on contract, trust or equity and the defendant resides in Canada.
In exercising this jurisdiction, Canadian courts are enforcing a personal obligation

between the parties. In other words, they are exercising an in personam jurisdiction. This
in personam jurisdiction is an exception to the general rule that Canadian courts have no
jurisdiction to decide title to foreign land. The exception recognizes that some claims may
have both a proprietary aspect and a contractual aspect. Canadian courts, however, will
exercise this exceptional in personam jurisdiction only if four criteria are met. These four
criteria, of which the second is central to this appeal, are discussed by McLeod [The
Conflict of Laws (Calgary: Carswell, 1983) at 323-25]:
In order to ensure that only effective in personam jurisdiction is exercised pursuant to the
exception, the courts have insisted on four prerequisites:
(1) The court must have in personam jurisdiction over the defendant. The plaintiff must
accordingly be able to serve the defendant with originating process, or the defendant
must submit to the jurisdiction of the court.
(2) There must be some personal obligation running between the parties. The jurisdiction
cannot be exercised against strangers to the obligation unless they have become per-
sonally affected by it.
• • •
An equity between the parties may arise in various contexts. In all cases, however, the
relationship between the parties must be such that the defendant’s conscience would
be affected if he insisted on his strict legal rights.
• • •
(3) The jurisdiction cannot be exercised if the local court cannot supervise the execution
of the judgment.
• • •
(4) Finally, the court will not exercise jurisdiction if the order would be of no effect in the
situs. … The mere fact, however, that the lex situs would not recognize the personal
obligation upon which jurisdiction is based will not be a bar to the granting of the order.
[13] The appellants submit—and I agree with them—that the respondent does not
meet the second criterion. The deed created an obligation on the father, and now his estate,
to transfer the two properties to the appellants. It does not create any contractual or other
legal obligation between the respondent and the appellants. The respondent is a “stranger”
to the deed and nothing in the record suggests that he is personally affected by his father’s
obligation to the appellants. Moreover, I find no equities between the children that would
affect the conscience of the appellants if they insisted on their rights under the deed. For
these reasons, the respondent cannot invoke the exceptional in personam jurisdiction of
the Ontario courts. Any dispute over title to the two properties, including any dispute
over the validity of the deed and its terms, should be decided by the Italian courts.
NOTES
1. Catania raises squarely the concern that in personam orders relating to title to immov-
ables can have in rem implications—that is, those affecting parties not before the court—
and thereby create the potential for inconsistent results. Since these inconsistent results
could be resolved only in the courts of the place where the title to the immovable was
registered, the court declined to exercise jurisdiction. Do you think that the result was influ-
enced by the evident accessibility of the courts in the lex situs to the parties? Would the result
vary depending on the ability of the court to join all affected parties as necessary and proper
parties?
2. In Mountain West Resources Ltd v Fitzgerald (2002), 6 BCLR (4th) 97 (CA), the chambers
judge had declined jurisdiction over the claim relating to mineral rights in Nevada by apply-
ing the Moçambique rule. On appeal, the court held that the claim did not in fact raise issues
of title to the mineral claims, but rather raised questions of equity from the defendant’s
alleged breach of fiduciary duty and the duties owed under the Company Act. Thus the court
was not asked to make a decision in rem, but only a decision in personam against the defend-
ant, which it had jurisdiction to make.
3. This distinction was explored further in Minera Aquiline Argentina SA v IMA Exploration
Inc, 2006 BCSC 1102, aff’d 2007 BCCA 319, in which the trial court made an order declaring
that land in Argentina was held on a constructive trust for the plaintiff and ordering its
conveyance. The court noted the exception to making such an order that could arise in situ-
ations in which the local law forbade such a transfer. Citing R Griggs Group Ltd v Evans, [2005]
Ch 153 at para 68, it pointed out at para 179, that a court “would not order the defendant to
defy the laws of the foreign state; an exercise not only pointless, but disrespectful to the
authority of the sovereign of that state. But usually the local sovereign does permit privately
owned land to be alienated.” In Minera, the court chose to make a specific order because,
under the circumstances, damages would have been inadequate. Compare this result with
Khan Resources Inc v WM Mining Co (2006), 79 OR (3d) 411 (CA), where the court relied on evi-
dence that the Mongolian authorities would not give effect to a decision made in Ontario
concerning title to property; and Precious Metal Capital Corp v Smith, [2008] OJ No 1236 (QL)
(Sup Ct J), aff’d 2008 ONCA 577, 297 DLR (4th) 746 (Ont CA), in which the court relied on the
“in personam exception” to the Moçambique rule.
III. RECOGNIZING FOREIGN JUDGMENTS AFFECTING

LAND IN THE FORUM
The corollary to the rules restricting the jurisdiction of courts over title to foreign immov-
ables is seen in cases involving attempts to enforce foreign orders concerning title to
immovables in the forum. As is provided in art 3165 of the Civil Code of Quebec, “[t]he juris-
diction of foreign authorities is not recognized by Québec authorities … where, by reason of
the subject matter … Quebec law grants exclusive jurisdiction to its authorities to hear the
action which gave rise to the foreign decision.” In the classic decision in Duke v Andler, the
Supreme Court of Canada declined to give effect to an order of the California court, which
purported, in the event of a refusal by the defendant to transfer property in British Colum-
bia, to give authority to an official of the California court to transfer the property.
III. Recognizing Foreign Judgments Affecting Land in the Forum 797
Duke v Andler
[1932] SCR 734, [1932] 4 DLR 529
SMITH J:
On September 25, 1925, the appellant George E. Duke entered into a contract with
Josephine Promis, Augusta Col, Sophia Promis, Mary Gillespie, and Oscar Promis for the
purchase of certain real estate in the city of Victoria, in the province of British Columbia.
• • •
All the parties to the contract were, at the time, residents of California, and the sur-
vivors and executors of the two vendors, who died shortly after the date of the contract,
have continued to be residents of that state.
This contract or another conveyance was placed in the hands of the Alameda County
Title Ins. Co., it is claimed in escrow, which company handed over the contract or the
other conveyance to the defendant G.E. Duke, who registered same and thus became the
registered owner of the Victoria property, which he conveyed to his wife, the defendant
Margaret E. Duke, who mortgaged it for $30,000.
The vendors brought action in the Superior Court of the state of California in and for
the county of Alameda, against the defendants, to rescind and cancel the contract and the
mortgage, and to require the defendants to re-convey to the plaintiffs the Victoria prop-
erty … .
• • •
The judgment entered in the Superior Court of California … is as follows:

• • •
It is Ordered, Adjudged and Decreed that the defendants G.E. Duke and Margaret E.
Duke, execute, acknowledge and deliver, and cause to be recorded and registered according
to the forms and laws of British Columbia, Dominion of Canada, within 30 days of notice
of entry hereof, a deed of conveyance of said “Victoria Property” … .
• • •
It is further Ordered and Adjudged that in the event of the failure or refusal of G.E. Duke
and/or Margaret E. Duke, defendants herein, to so convey said “Victoria Property” within
said time, George E. Gross, Clerk of this Court, be, and he is hereby, appointed as Commis-
sioner of this Court; and said George E. Gross, as such Commissioner, is hereby ordered and
empowered to make, execute and deliver such deed, and cause the same to be so recorded
and registered, and to do and perform any and all other acts as may be necessary or proper,
to effect and perfect a conveyance of said “Victoria Property” … .
• • •
The defendants refused to execute a conveyance, as ordered by this judgment, and a

conveyance was executed in their name by George E. Gross, County Clerk and Commis-
sioner of the Superior Court, pursuant to the terms of the judgment.
• • •
The question involved is whether or not the judgment of the foreign court on the
question of title and ownership of this real property situate in British Columbia is to be
recognized as final and to be enforced by the courts of British Columbia.
• • •
There is … a long line of cases in which it has been held that English courts will enforce
rights affecting real estate in foreign countries if such rights are based on contract, fraud
or trust, and the defendant resides in England.
An early case of this kind is Penn v. Lord Baltimore, 1 Ves. Sen. 444, 27 ER 1132, where
an agreement in reference to lands in Pennsylvania made in England was sought to be
enforced, the residence of the parties being in England. It was held that there was juris-
diction. The Lord Chancellor says, at p. 447:
The conscience of the party was bound by this agreement; and being within the jurisdiction
of this court … which acts in personam, the court may properly decree it as an agreement,
if a foundation for it.
• • •
In Henderson v. Bk. of Hamilton (1894), 23 SCR 716, in this court it is pointed out that
Courts of Equity held that where personal equities existed between parties over whom
they had jurisdiction, though such equities might have reference to lands situate without
the jurisdiction, they would give relief by a decree operating not directly upon the lands,
but strictly in personam, and that such decrees would have been unenforceable in the
foreign jurisdiction, and might have brought the courts decreeing them into collision
with the former, within whose local jurisdiction the lands were situated.
• • •
[S]uch a judgment is in personam only, and affects the conscience of the parties within
the jurisdiction of the court, and stands on an entirely different footing in the courts of
the country where the land is situated from the ordinary judgment coming within the
general rule, such as a foreign judgment for debt.
In the present case the plaintiffs sue in British Columbia to enforce a judgment of the
California courts deciding that the plaintiffs are the owners of the British Columbia land
in question, rather than the defendants, one of whom is the registered owner. In Califor-
nia, it must be conceded that that judgment has effect only in personam, but if the courts
of British Columbia were obliged to enforce it between the same parties, without question,
there would be no practical difference, in effect, between such a judgment and a judgment
for a debt, and the distinction so much insisted on in the authorities referred to would be
of no real consequence.
In my opinion the rule stated by Dicey quoted above, that the courts of a foreign coun-
try have no jurisdiction to adjudicate upon the title or the right to the possession of any
immovable not situate in such country, and the statement in the authorities referred to,
that controversies in reference to land can only be decided in the state in which it depends,
and that judgments of foreign courts purporting to deal with the title and with rights to
lands in another country can only be enforced by proceedings in personam, show that the
judgment of the court of California here in question does not, in British Columbia, affect
the title to the lands in question, and is not a judgment that should be enforced by the
courts of British Columbia as binding there on the parties.
NOTES
1. The Supreme Court of Canada rejected the proposition that a foreign court could
make an order conveying property in Canada that would have direct effect. Would this leave
a judgment creditor without recourse? Could a judgment creditor seek an order in the courts
of the situs to transfer the property based on the findings of his or her entitlement as deter-
mined by the foreign court?
2. Recall in Hesperides Hotels that the first justification that Lord Wilberforce gave for
retaining the Moçambique rule was that “the rule is accepted with differing degrees of force
and emphasis in other jurisdictions of the common law.” The Supreme Court of Canada in
Duke v Andler also seemed concerned to align the standards for the recognition and enforce-
ment of foreign judgments with those of the other country in question—in this case, the
United States. Or, perhaps to be more accurate, the court noted that the Full Faith and Credit
clause (art IV, s 1) of the United States Constitution, which establishes the standards for the
recognition and enforcement of judgments between states within the Union, “does not make
judgments of the courts of one state dealing with lands in another binding on the courts of
the latter.” Does this suggest that the Moçambique rule, based as it has been on Dicey’s
“principle of effectiveness,” would eventually change with the willingness of the courts in
situations like that in Ward v Coffin (reproduced above in Section II.B, “Exceptions Based on
Contract or Equity Between Parties”) to relieve successful litigants of the need to relitigate
disputes that have given rise to foreign in personam orders to convey title to immovables?
3. In Jeske v Jeske (1983), 36 RFL (2d) 376 (Alta QB), the Alberta court agreed that British Col-
umbia could not assert a jurisdiction to determine title to immovables located in Alberta. On
the other hand, a judgment of the British Columbia court, having personal jurisdiction over the
parties in a matrimonial property claim, ordering a husband to pay a lump sum to his wife,
was entitled to enforcement in Alberta even though the British Columbia court, in assessing
the amount of the lump sum, had taken into account the value of immovables in Alberta.
4. Returning to the question posed in the first note above, in Duke v Andler the Supreme
Court of Canada held that a foreign judgment ordering the transfer of land had effect only
in personam. Does this mean that a court in the place where the land is situated cannot
enforce it? Or does it mean merely that there is no requirement of comity that it do so? If that
is the case, does it have a discretion to enforce the order, or must it insist that the successful
party relitigate the matter before it? In other words, is it permitted to recognize the judgment
and make its own order concerning the title to the property? The following decision consid-
ers this question.
O’Hara v Chapman Estate and MacVicar

[1988] 2 WWR 275 (Sask CA)
WAKELING JA (Gerwing JA concurring):

[20] This appeal involves a determination of whether the appellant (O’Hara) is pre-
cluded from pursuing this action in Saskatchewan for the reason the issues have already
been litigated in the courts of Manitoba. …
[21] Appeal is taken on the grounds that the action brings into issue the title to land
in Saskatchewan; therefore the courts of this province have exclusive jurisdiction to decide
such an issue. It is contended that as the judgment in Manitoba was an in personam judg-
ment it could not conclusively determine the title to land in the province of Saskatchewan.
• • •
[23] There can be no doubt that O’Hara has already alleged his entitlement to this land
in Saskatchewan. He did this as a defence to the administrator’s action for an accounting
of the rents and profits from a house in Winnipeg and farmland in Saskatchewan. O’Hara
defended this action, asserting these properties were his as a result of a trust arising
through an arrangement between the deceased and O’Hara’s mother, the sister of the
deceased. The existence of such a trust and agreement for sale was denied by the admin-
istrator; this issue was fully litigated, and it was concluded by the trial judge that O’Hara
was not the beneficial owner as he alleged, and the so-called agreement for sale was
invalid. The formal judgment dealing with this portion of the action is worded as follows:
2. THIS COURT DOTH DECLARE that certain lands located in the Province of Saskatch-
ewan … are not and never have been subject to any trusts or estates in favour of the Defend-
ant JOHN ROBERT O’HARA and are an asset of the Estate of the late ERIN MAY CHAPMAN,
deceased, and doth order and adjudge the same accordingly.
• • •
[25] At this point, it is useful to point out that the farmland in this province was
registered in the name of the deceased Erin May Chapman, and it has been transmitted
into the name of the administrator, all in the ordinary course of estate administration.
No specific order has been made in Manitoba, and none has been sought which deals
specifically with title to this land.
[26] It is, however, true that O’Hara has, by his own voluntary action, attempted to
prove his entitlement to the land in the Manitoba courts. He could have responded to the
action of the administrator by seeking adjournments while he actively pursued his claim
to title in this province. Instead, he made the choice of forum for his claim and, upon
being unsuccessful, now seeks to have it relitigated in this province. It is equally true that
had O’Hara succeeded, the Manitoba courts had, through control of the administrator
and its administration of the estate, the power to see that title to the Saskatchewan lands
was conveyed to the appropriate party without further resort to the courts of this province.
[27] That the Manitoba Court of Appeal takes the position that this matter was prop-
erly before it can hardly be doubted, since it has on application been prepared to prevent
O’Hara from frustrating its judgment by holding him in contempt for filing a lis pendens
registered by him against the Saskatchewan land when this action was commenced. No
doubt they felt entitled to do so because they recognized they 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 come to Manitoba where it could be enforced. They
were therefore dealing in the only way they could to prevent O’Hara from frustrating the
due administration of this estate which was properly before the courts in Manitoba. It
was, no doubt, viewed as an estate in which the areas of disagreement had been litigated
and after long and unwarranted delay extending over a period in excess of 20 years, it
should be wound up. The Manitoba Court of Appeal was prepared to exercise its coercive
powers over O’Hara and the administrator to see the estate was duly administered in
accordance with its judicial decisions.
[28] I, like the learned chambers judge, have no difficulty in concluding that the estate
issues have properly been left to the Manitoba courts. The deceased was a Manitoba resident,
the estate was probated there and the administrator is an official of that province. The
problems relating to the estate administration and trust relationship between the deceased
and O’Hara were issues which have been quite properly dealt with in that jurisdiction.
[29] An explanation of the basis for the exercise of this in personam jurisdiction over
the Saskatchewan land is best set forth in the recent decision of Hamelin v. Hamelin, [1985]
3 WLR 629, [1985] 2 All ER 1037 (CA), wherein Kerr LJ, for the court, reviews and sum-
marizes the position on the exercise of jurisdiction over objects movable or immovable
outside the court’s jurisdiction. Rather than quote extensively from this judgment, I prefer
to say it is apparent to me that certain general principles have now been established which
impact on this case.
(1) It was quite proper for the Manitoba courts to rule as they did on this issue, as an
in personam judgment to be enforced by whatever coercive power that court has
over the parties before it.
(2) The Manitoba court has no power to make an in rem pronouncement which would
be binding in another jurisdiction. It is apparent that no such attempt has been
made in this case.
(3) It is recognized that it is up to the courts in the jurisdiction where the property is
situate to deal with the foreign judgment in such fashion as it considers appropriate,
and this is necessarily recognized by the court granting the in personam judgment.
That is, the judgment must be enforced by the coercive methods available to the
court in question and not by dependence upon the acceptance of the binding nature
of the judgment in the courts in the jurisdiction in which the property is situate.
[30] The Hamelin case is more directly focused on the question of the validity of the
Manitoba decision than on the appropriate role of the courts where the real property is
situate. Nonetheless, it is of assistance to recognize that the in personam remedy given in
Manitoba was within that court’s jurisdiction as opposed to a judgment issuing from a
foreign court, which must be perceived as seeking to resolve a problem by meddling in
an area beyond its competence.
[31] I also acknowledge that in my view there is nothing objectionable in recognizing
some elements of reciprocity in respect of a judgment of this nature emanating from the
courts of our neighbour province. To the extent the law permits, I am inclined to give
support to the enforcement of this existing judgment. The law I shall deal with later, but
I also wish to indicate fairness dictates no different answer. O’Hara has had a full trial and
an appeal on precisely the issue he seeks to raise here. Most people must be content with
such an opportunity. If he proceeds again in this jurisdiction, O’Hara is being given a
second chance not many, if any, can hope to obtain. There can be no question here of an
infringement of his right to have the issue fully litigated. This court … has already
expressed its view that the prospect of two trials on the same issue, with the possibility
of two different results, constitutes an abuse of process as it leads to a lack of public
confidence in the administration of justice.
[32] I cannot see it in the interests of the administration of justice to have the Mani-
toba courts, in the exercise of what I believe to be their rightful jurisdiction, saying the
estate should be settled without regard for the appellant’s alleged interest under a trust of
land given his mother, while at the same time the courts in this province are determining
that, while they have no right to say how a Manitoba estate is to be administered, the
estate land located in Saskatchewan belongs to the appellant. If it is possible, that stalemate
should surely be avoided. It can readily be avoided here by the exercise of a judicial discre-
tion which rather happily permits the issue to be resolved on the basis of a full trial and
appeal that have already been held in the courts of Manitoba.
[33] The question then that must be faced is the lawful one of whether the chambers
judge did have a discretion or is O’Hara permitted to pursue this action in Saskatchewan
as of right. The appellant contends that there is no discretion here; the existence of
O’Hara’s right to bring this action is affirmed by both the common law and statute. I deal
first with the common law.
[34] The argument of O’Hara’s counsel is rather compelling. In its simplest terms, it
contends a judgment in rem as to the title to land can only be obtained in the jurisdiction
where the land is located. Such a judgment would have been the result of the action which
the learned chambers judge has struck out as being an abuse of process.
[35] The appellant relies heavily upon the common law position as clearly stated by
Smith J in … Duke v. Andler … .
[36] What I see in Duke v. Andler is a statement that it is not appropriate to rely on a
foreign judgment to obtain an in rem judgment in the same terms as the foreign judgment
in the jurisdiction where the real property is located. While this statement may result in
two trials in respect of the same issue, it is nonetheless preferable to permitting an in
personam judgment to be equated to an in rem judgment, thereby frustrating a distinction
which has long existed. This position, as adopted in Duke v. Andler, is based on the accept-
ance of the principle that no court should make an order which it is unable to enforce. …
[37] The use of the British Columbia courts to enforce the California judgment was
precisely what was attempted in Duke v. Andler. If the California court felt in the first
instance its order could be enforced by its coercive powers over the litigants, something
must have changed that situation, for those relying upon it eventually found it necessary
to resort to the courts of British Columbia in order to obtain effectual enforcement of
their order. They were therefore seeking to enforce the California judgment by relying on
the power of the courts in another jurisdiction where the land was located because they
could not do that through the authority of the original California judgment.
[38] That is clearly not what is happening here. The Manitoba court has continued to
exercise its coercive power to enforce its judgment. Nobody has brought action to enforce
the terms of that judgment in this jurisdiction as a basis for an in rem judgment dealing
with the title to land, such as was done in Duke v. Andler. By having control over the estate
and perhaps the parties interested in the estate, the Manitoba courts may well be able to
enforce their in personam judgment which, as I have stated, was founded upon a sound
jurisdictional base. What the courts of this province have been asked to do is to frustrate
that coercive power of the Manitoba courts by permitting a similar action to proceed in
this province. I see nothing in Duke v. Andler which restricts the exercise of the discretion
of the Queen’s Bench judge to determine whether such second action constitutes an abuse
of process. In fact it so clearly appears to be inappropriate to permit two actions on the
same issue, it would take the most persuasive, in fact compelling, authority to convince
me such a second action should be permitted to proceed. There was such compelling
authority in Duke v. Andler, for the California court had no acceptable jurisdictional basis
in the first place, and it clearly made an order that could not be enforced, or there would
not have been need to resort to the British Columbia courts. Neither of these attributes
is present in this case, and I therefore have no difficulty in distinguishing this case from
that of Duke v. Andler.
• • •
[42] I am of the view that in this case the Manitoba courts were within their rights to
litigate the issues dealing with the relationship between the deceased and the appellant
and, if in so doing they touched on matters which bear upon but do not specifically declare
the state of title to land in this province, it was their right to do so. The Manitoba courts
have consistently shown themselves ready to permit enforcement of their in personam
judgment by remedies which are open to it, namely, by the issuance of contempt warrants
and the proceedings relating to the passing of accounts in the estate. If we now conclude
that their in personam judgment is preserved by ss. 3 and 5 of the Foreign Judgments Act,
even though that judgment indirectly serves to determine an in rem issue which the
appellant seeks to bring in this province, I do not perceive it as inappropriate or unjust
that such issue be struck down. It is not a situation where the appellant has failed to have
a full hearing to obtain a ruling on his rights in respect of the assets of this estate. What
he wishes to have is a second full hearing, and on the face of it that is an abuse of process
unless his entitlement is such to negate the existence of a judicial discretion. For the
reasons I have mentioned, I do not conclude that this entitlement is a right of such stature
as to preclude the existence of the discretion exercised by the chambers judge. …
SHERSTOBITOFF JA (dissenting):
[7] The judgment of the Supreme Court of Canada in George E. Duke and Another v.
Josephine Andler and Others, [1932] S.C.R. 734, is directly on point and governs this case. …
• • •
[14] The fact that the Manitoba court had jurisdiction in personam is irrelevant to this
case. The Manitoba judgment, insofar as it affects land in Saskatchewan, is an in rem
judgment and only Saskatchewan courts have jurisdiction to give in rem judgments
respecting land in the province.
[15] While the Manitoba court may have had jurisdiction in personam, thereby affect-
ing the conscience of the parties within the jurisdiction of the court, the judgment in this
province stands on a different footing: it is, in this province, unenforceable to the extent
that it is an in rem judgment affecting lands in this province—and there is no question
that it does affect lands in this province.
[16] That being so, the Manitoba litigation and resulting judgment cannot be relied
upon to establish abuse of process, for one cannot do indirectly what cannot be done
directly. To strike out the claim would, in effect, give recognition to the Manitoba judg-
ment and would, in effect, enforce it.
[17] Furthermore, to permit this action to be dismissed for abuse of process because
of the Manitoba judgment would result, as Smith J observed, in elimination of the distinc-
tion between in rem and in personam judgments so much insisted upon by the authorities
and also by the Act. A plea of abuse of process would be available every time there was a
foreign judgment respecting Saskatchewan lands. The result would be that all foreign
judgments respecting lands in the province would be treated the same as foreign judg-
ments for debt. The Supreme Court has said that we cannot do so. The Foreign Judgments
Act says that we cannot do so.
[18] The result may not be convenient and may not be fair to the respondents, but the
principle is too important to be ignored. Acceptance of a plea of abuse of process would
be an abdication of jurisdiction in respect of a matter over which Saskatchewan courts
have exclusive jurisdiction.
IV. CHOICE OF LAW

A. Capacity
The courts tend to apply, as a universal rule, the law of the situs to govern all questions relat-
ing to one party’s capacity to transfer immovables. Thus, in Landry v Lachapelle, [1937] 2 DLR
504 (Ont CA), the parties were married in Quebec under a regime of separation of property
as provided by an ante-nuptial contract. At all times, they remained domiciled in Quebec.
Subsequent to the marriage, however, the wife acquired land in Ontario. Later, she conveyed
the land to herself and her husband as joint tenants. Upon her death, her executor attacked
the husband’s title to the Ontario land based on Quebec law, which provided that spouses
could not confer benefits inter vivos on each other. By Ontario law, no such incapacity was
placed on a married woman. The court held that Ontario law, as the law of the situs, applied
and that, as a result, the husband’s title was inviolate.
In reaching its conclusion, the court did not address the question whether the Quebec
law was designed to apply to all married couples domiciled in Quebec, irrespective of where
their property was situated, or whether the Ontario law was intended to confer capacity on
married women domiciled out of the province: see Falconbridge at 629-31.
The court emphasized that it was dealing with a question of title and conveyance, not
with the validity of a contract with respect to land. The following case did concern a contract
over foreign land. The court, however, made no attempt to ascertain the proper law of the
contract but simply applied the law of the situs.
Bank of Africa v Cohen

[1909] 2 Ch 129 (CA) (footnote incorporated)
[A married woman, domiciled and resident with her husband in England, executed, in
England, a deed by which she agreed to mortgage to the plaintiff bank, carrying on busi-
ness in England and the Transvaal, land in the Transvaal to secure past and future loans
to her husband. The plaintiff sued for specific performance of the deed. The defendant
argued that, by the Roman-Dutch law in force in the Transvaal, a married woman was
incapable of becoming a surety for her husband. The trial judge dismissed the bank’s
claim. Its appeal was rejected by the English Court of Appeal.]
BUCKLEY LJ:
The first question in this case is whether the bank can, by way of specific performance,
clothe themselves with the character of mortgagees of the land in Johannesburg. Upon
this question the relevant instrument is the bond dated December 4, 1906, by which the
defendant declares that she renounces in favour of the bank the benefit of all rights
IV. Choice of Law 805
whatsoever which the laws of the Transvaal grant her in relation to the land. If this instru-
ment be carefully scrutinized it will be found that its whole operation and effect is to
appoint an attorney to charge, mortgage, or transfer the land, and for that purpose to
execute the necessary instruments and to appear before the Registrar of Deeds and make
declarations of value, acknowledgment of indebtedness, and so on, and to take all steps
necessary for recording and registering the same. The grantor is to incur no personal
liability, and the acts which the attorney is empowered to do are exclusively acts relating
to the land. The relevant law of the Transvaal is in this court a question of fact. The learned
judge has found the fact, and I agree with him in his finding. The substance of it is that
he finds that unless and until a married woman who does not fall within certain exceptions
has gone through certain formalities she is under the Roman-Dutch law incapacitated
and incapable of entering into a contract of suretyship for her husband. I may expand
that statement of the law and state my own view as follows:—A married woman’s contract
of suretyship for her husband cannot be described (in terms familiar in our own law) as
being either void or voidable. It must be stated, I think, in the form that she has a contin-
gent capacity to become bound by such a contract. Thus, if she holds a particular char-
acter, that of a trader, or if she receives a pecuniary benefit from the contract (a matter
which may have to be ascertained ex post facto), or if after explicit explanation of the exact
nature of her rights she formally renounces the Senatus Consultum Velleianum and the
Authentica si qua mulier, she may be bound by such a contract. But unless and until some
one of those conditions is satisfied the contingency upon which she becomes capable has
not happened and she remains incapable of becoming bound by the contract. A renun-
ciation in general terms such as those in the power of attorney of December 4, 1906, is
not sufficient. She must renounce explicitly. If the true effect of the evidence is that she
must renounce before the contract is entered into, specific performance is on that ground
impossible, for the lady did not renounce before execution. If, on the other hand, renun-
ciation before the contract is entered into is not essential, still the conditions under which
the defendant would have become capable of contracting have not been satisfied, with
the result, I think, that the contract, as one dealing with an immovable in the Transvaal,
is not and cannot by way of specific performance be rendered binding upon her. We were
pressed with Ex parte Pollard [Mont & Ch 239]. That was a case in which there was no
incapacity. The mortgagor was capax and had purported to mortgage the land, but accord-
ing to the lex situs his mortgage was ineffectual. The land therefore was not bound. The
mortgagor had power to mortgage, had contracted to mortgage, but had not mortgaged.
According even to Scottish law, however, his contract to mortgage could have been enforced
in personam although his mortgage had no effect in rem. What was held was that under
those circumstances the property came into the hands of the assignees of the intending
mortgagor charged with the equity contained in the contract. That is a decision which has
no application where there is not capacity. A judgment for specific performance here would
mean that this court should order the defendant, after having had her rights explained to
her, to renounce the Senatus Consultum Velleianum and Authentica si qua mulier, whereas
the law to be applied is that the wife, after explanation of her rights, may refuse to renounce
them. Specific performance in that sense is, in my judgment, impossible. Mr. Dicey’s
language (Conflict of Laws, 2nd ed., p. 501) I think is correct, that a person’s capacity to
make a contract with regard to an immovable is governed by the lex situs.
NOTE
On the assumption that the law of the situs was the applicable law, should the court have
considered whether the Transvaal would have regarded its law as protecting married
women domiciled abroad? See Collins at para 23-070; Falconbridge at 629.
B. Formal Validity
It is clear that the formal validity of a transfer of immovables is governed by the law of the
situs. Therefore, in Adams v Clutterbuck (1883), 10 QBD 403, a conveyance of shooting rights
over Scottish land, executed in England between two Englishmen, was held valid despite
not being under seal as required by English law. No seal was required by Scottish law.
On the other hand, a contract over foreign land, valid by its proper law, may be enforced
despite the fact that it does not constitute an interest in the land according to the law of the
situs. Thus, in Re Smith, Lawrence v Kitson, [1916] 2 Ch 206, the testator had executed a deed in
England by which he charged land in Dominica as security for loans made to him by his sis-
ters. He also agreed to execute a legal mortgage of the land whenever required to do so. By
Dominican law, this deed was insufficient to create a valid charge on the land. After the testa-
tor’s death, his sisters sued his executors to have a legal mortgage executed in their favour
according to the requirements of Dominican law. The court held that they were entitled to
succeed since the deed constituted a valid contract under English law, the proper law.
C. Essential Validity
Again it is clear that the law of the situs determines all questions relating to the essential
validity of a transfer of immovables—such as whether an encumbrance on title has been
validly created. In Chatillon v The Canadian Mutual Fire Insurance Co (1877), 27 UCCP 450, for
example, the plaintiff had taken out with the defendant in Ontario a policy of fire insurance
on land situated in Quebec. When the plaintiff later claimed under the policy, the defendant
argued that the plaintiff had falsely stated that the land was unencumbered. This defence
was successful because under Quebec law, as the law of the situs, the land was subject to a
lien in favour of an unpaid vendor.
Where, however, the question concerns a contract with respect to foreign land, then,
once again, the law governing the contract must be consulted. Thus, in British South Africa Co
v De Beers Consolidated Mines Ltd, [1910] 2 Ch 502 (CA), rev’d on different grounds, [1912] AC
52 (HL), Cozens-Hardy MR said at 515:
[A]n English contract to give a mortgage on foreign land, although the mortgage has to be
perfected according to the lex situs, is a contract to give a mortgage which—inter partes—is to
be treated as an English mortgage and subject to such rights of redemption and such equities
as the law of England regards as necessarily incident to a mortgage.
D. Civil Code of Quebec

Article 3097, CCQ states in part:
Real rights and their publication are governed by the law of the place where the property con-
cerned is situated.
V. Other Kinds of “Immovables” 807
V. OTHER KINDS OF “IMMOVABLES”

The obvious characteristic of immovables as discussed in this chapter is that they cannot be
physically relocated. But is that their legally relevant defining feature? To play the devil’s
advocate: does a truck become an immovable when it is out of service and can no longer be
repaired? Does a historic building cease to be an immovable when it is relocated for the
purposes of redeveloping the site on which it was built?
For the purposes of the legal analysis that responds to the distinctive features of immov-
ables, it might be suggested that their key characteristic lies in the fact that the validity of
any claims to rights to them is ultimately referable to a public register in the place where
they are located. Other kinds of property share this feature as well. These kinds of property
have been described in art 24 of the Brussels I Regulation below.
Jurisdiction and the Recognition and Enforcement of Judgments in Civil

and Commercial Matters (Brussels I)
Regulation (EU) No 1215/2012 of the European Parliament and of
the Council of 12 December 2012
Article 24
The following courts of a Member State shall have exclusive jurisdiction, regardless of the
domicile of the parties:
(1) in proceedings which have as their object rights in rem in immovable property or
tenancies of immovable property, the courts of the Member State in which the
property is situated.
However, in proceedings which have as their object tenancies of immovable
property concluded for temporary private use for a maximum period of six consecu-
tive months, the courts of the Member State in which the defendant is domiciled
shall also have jurisdiction, provided that the tenant is a natural person and that
the landlord and the tenant are domiciled in the same Member State;
(2) in proceedings which have as their object the validity of the constitution, the nullity
or the dissolution of companies or other legal persons or associations of natural or
legal persons, or the validity of the decisions of their organs, the courts of the
Member State in which the company, legal person or association has its seat.
In order to determine that seat, the court shall apply its rules of private inter-
national law;
(3) in proceedings which have as their object the validity of entries in public registers,
the courts of the Member State in which the register is kept;
(4) in proceedings concerned with the registration or validity of patents, trade marks,
designs, or other similar rights required to be deposited or registered, irrespective
of whether the issue is raised by way of an action or as a defence, the courts of the
Member State in which the deposit or registration has been applied for, has taken
place or is under the terms of an instrument of the Union or an international
convention deemed to have taken place.
Without prejudice to the jurisdiction of the European Patent Office under the
Convention on the Grant of European Patents, signed at Munich on 5 October 1973,
the courts of each Member State shall have exclusive jurisdiction in proceedings
concerned with the registration or validity of any European patent granted for that
Member State;
(5) in proceedings concerned with the enforcement of judgments, the courts of the
Member State in which the judgment has been or is to be enforced.
NOTES
1. Does the link between immovables as discussed in this chapter and these other kinds
of property shed light on the legal framework that applies to them? Could this link be in the
purported in rem quality of the decision that is made? To what extent do you think that the
jurisdictional restrictions and the exceptions to those restrictions that operate in respect of land
should apply also to these kinds of “immovables”? To what extent do you think that the pres-
sures of increased international mobility and communications in respect of these other kinds
of property will prompt reconsideration of the law as it applies to traditional “immovables”?
2. On the analogy to restrictions on title to foreign immovables, it was observed in Re
Wheatland Industrial Park Inc, 2013 BCSC 27 at para 36 that
[m]atters of internal management of a corporation should be determined by courts of the cor-
poration’s domicile: Gould v. Western Coal Corporation, 2012 ONSC 5184 at paras. 327-336; Ironrod
Investments Inc. v. Enquest Energy Services Corp, 2011 ONSC 308 at paras. 14-21; Zi Corporation v
Steinberg, 2006 ABQB 92 at paras. 67-76; Voyage Co Industries Inc. v. Craster, [1998] BCJ No 1884
(SC) at para. 12; Incorporated Broadcasters Ltd. v. Canwest Global Communications Corp., [2001]
O.J. No. 4882 at para. 94.
In that case, joint venturers applied for the appointment of a receiver to manage the
development of an industrial park in which they had bought interests in the land. The proj-
ect was insolvent, the mortgage was in default, and foreclosure proceedings had com-
menced. The British Columbia court held that the remedy sought was proprietary and not
personal and that the matter had to be transferred to the courts of Alberta where the com-
pany was incorporated.
3. In the following excerpt, the Ontario Superior Court of Justice makes the clear link
between title to foreign land and shares in foreign corporations. Note the reliance on con-
siderations that echo the “principle of effectiveness” articulated by Dicey more than a
century ago.
Galustian v The SkyLink Group of Companies, Inc

2010 ONSC 292
SPENCE J:
[1] This motion involves a dispute about the jurisdiction of this Court to hear the
underlying action. In the action, the plaintiffs, who are foreign persons located in Dubai,
have sued the defendants with respect to shares in a Dubai company and an alleged
conspiracy and an alleged defamation. Each of the defendants move for an order
V. Other Kinds of “Immovables” 809
dismissing the action on the basis that the Court lacks the jurisdiction to adjudicate it, or
for alternative relief.
• • •
Comity and the Standards of Jurisdiction, Recognition and Enforcement

Prevailing Elsewhere
[61] This factor of the Muscutt [v Courcelles (2002), 60 OR (3d) 20 (CA)] analysis
looks to the enforceability of the order in the foreign jurisdiction and the jurisdictional
rules applicable there and internationally. As set out in Muscutt, supra, at paragraph 102:
… [I]n international cases, it may be helpful to consider international standards, particularly
the rules governing assumed jurisdiction and the recognition and enforcement of judgments
in the location in which the defendant is situated.
[62] The common law has developed strict rules regarding the assumption of juris-
diction where the remedy sought by the plaintiff affects foreign real estate or other prop-
erty rights that are based on records maintained in foreign registers, such as securities. …
[citing Walker]
[63] In Precious Metal Capital Corp. v. Smith (2008), 92 O.R. (3d) 701 (C.A.), paras. 17,
21 and 22, the Ontario Court of Appeal recently held that the real and substantial con-
nection test was the exclusive test for assumed jurisdiction in Ontario, and that remedy-
based considerations, as set out in older case law, are now subsumed within the Muscutt
analysis. In reforming the law in this area, the Court of Appeal made it clear that a foreign
Court’s unwillingness to enforce an Ontario order was a highly relevant factor … .
[64] In the present case, the uncontradicted evidence is clear that a Dubai court would
refuse to enforce any Ontario order that purported to declare rights in the securities of a
Dubai corporation. Indeed, on the evidence, no Ontario order in this proceeding would
be enforceable in Dubai, because the Dubai court would consider itself the appropriate
forum and Ontario’s assumption of jurisdiction improper. As the Ontario Court of Appeal
has held in Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 60 O.R. (3d) 76 (C.A.)
at para. 23 “[i]f an Ontario judgment would not be enforceable in [the defendant’s home
jurisdiction], there would be little or no advantage in allowing the Ontario plaintiffs to
litigate their claims here.”
[65] Similarly, in Khan Resources Inc. v. W.M. Mining Co, LLC (2006), 79 O.R. (3d)
411 (C.A.) at paras. 15 and 24, the Ontario Court of Appeal held that Ontario’s courts
lacked jurisdiction over a claim for proprietary relief on the basis that the order sought
by the Plaintiff would be unenforceable in the jurisdiction where the property was located.
Although Khan involved real property, rather than personal property, foreign securities are
regulated property rights. For this reason, they raise similar concerns to foreign real estate.
[66] For the above reasons, this factor strongly militates against the Court’s assump-
tion of jurisdiction.
NOTES
1. As explained in Chapter 6, the approach to taking jurisdiction is now no longer

based on the Muscutt analysis mentioned by the court, but rather on the principles from
Club Resorts Ltd v Van Breda, 2012 SCC 17, [2012] 1 SCR 572. How would the court consider the
same issues under those principles?
2. The challenges in characterizing foreign property as either immovable or movable for
the purposes of determining jurisdiction and applicable law are bound to increase. In
Inukshuk Wireless Partnership v NextWave Holdco LLC, 2013 ONSC 5631, the court accepted
that there was a good arguable case for jurisdictional purposes that wireless spectrum
licenses were “property,” but rejected the proposition that they were immovables:
[45] IWP contends that the law respecting the situs of a real property lease may be applied
by analogy and refers to authority that provides that for the purpose of determining the choice
of law to be applied to a lease, a lease is considered an immovable and the law to apply is the
law of the situs of the property: see Malo v. Clement, [1943] O.J. No. 237 (H.C.). I do not think this
is an apt analogy. A lessee holds a property interest in the land. The holder of a licence of spec-
trum holds no property interest in the radio frequencies specified in the licence.
See also, in the context of registered intellectual property rights, Lucasfilm Ltd v Ainsworth,
[2011] UKSC 39.

Carruthers, Janeen M. The Transfer of Property in the Conflict of Laws (Oxford: Oxford Univer-
sity Press, 2005).
Maxwell, 2015).
Edinger, Elizabeth. “Is Duke v. Andler Still Good Law in Common Law Canada?” (2011) 51 Can
Bus LJ 52.
1954).
Gelowitz, Mark A. “Bomac and O’Hara: Abuse and Abdication” (1989) 53 Sask L Rev 163.
Stevens, Robert. “Restitution or Property? Priority and Title to Shares in Conflicts of Laws”
(1996) 59 Mod L Rev 741.
Wass, Jack. “The Court’s In Personam Jurisdiction in Cases Involving Foreign Land” (2014) 63
ICLQ 103.
Welling, Bruce & EA Heakes. “Torts and Foreign Immovables: Jurisdiction in Conflict of Laws”
(1979-80) 18 UWO L Rev 295.
CHAPTER FIFTEEN
Movables
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
II. Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
A. Transfer of Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
B. Security Interests in Tangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825
III. Mobile Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827
IV. Intangible Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
B. A Unitary or Pluralistic Choice of Law Approach? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828
C. Characterization: Outright Assignment Versus Grant of Security . . . . . . . . . . . . . 828
D. Contractual Relations Between the Assignor/Grantor and the
Assignee/Secured Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829
E. Relations Between the Assignee/Secured Creditor and the Debtor
on the Assigned Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829
F. Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
G. Effectiveness Against Third Parties and Priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830
2. Determining the Location of the Assignor/Grantor . . . . . . . . . . . . . . . . . . . . . . . 832
V. Money and Documentary Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
VI. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835
B. Directly Held Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 836
C. Intermediated Securities (Security Entitlements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 837
D. Workability of a Global Choice of Law Approach to Intermediated
Securities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838
VII. Deposit Accounts with Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839
VIII. Selected Bibliographical References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840
I. INTRODUCTION
The common law choice of law rules applicable to the transfer of movables inter vivos are
underdeveloped. They start with the general idea that the governing law is that of the situs
of the property. This conclusion is based on an amalgam of ideas—the analogy to immov-
ables, considerations of enforcement, and a concern for the reasonable expectations of the
parties. However, uncertainties remain about what types of issues are covered by the lex
situs, whether a different rule might be more appropriate for subcategories of movables, and
how any distinct choice of law rule for movables meshes with other choice of law rules, such
as the proper law of contracts.
811
812 Chapter 15 Movables
A preliminary distinction might be drawn between the law applicable to the rights of the
immediate parties to a transfer of movables and the law applicable to the effectiveness of
the transfer against competing claimants—for example, another transferee of the same
movable or the attaching creditors of the transferor. It is sometimes suggested that the
rights of the immediate parties to a transfer, whether by sale, lease, assignment, or security
agreement, ought to be determined by the proper law of their agreement. On the other hand,
while some legal systems recognize a distinction between the inter partes and third-party
effectiveness of a transfer, in others, a transfer that is effective between the immediate par-
ties takes effect simultaneously against third parties. This diversity of conceptual approaches
makes it difficult, in devising a workable choice of law formula, to sever the law applicable to
the effectiveness of a transfer between the parties from the law applicable to its effective-
ness against third parties.
In any event, in the case of third-party disputes involving tangible movables, the usual
reference, at least since Cammell v Sewell, below, is to the lex situs of the property involved.
As the rule is often put, the validity of a transfer of movables and its effect on the property
rights of any person claiming to be interested therein are governed by the law of the country
where the property is situated at the time of the transfer (lex situs). However, where the rel-
evant transaction is the grant of a security interest in tangible movables, it will be seen that
the choice of law analysis has been modified by the statutory choice of law rules in the per-
sonal property security acts (PPSAs) in effect in all the common law provinces and the three
territories and the counterpart articles in the Civil Code of Quebec.
The transfer of intangible property inter vivos raises additional problems in determining
the governing law. In some instances, the right to intangible property may be represented
by a document, such as a bill of exchange (cheque, promissory note) or a corporate security
certificate, and transfer of the property may customarily involve transfer of the possession
of the document. In these cases, the analogy to the transfer of tangible property has seemed
sufficiently strong to support application of the lex situs of the document. However, the anal-
ogy breaks down with general intangibles—for example, the assignment of the right to a
debt—where the identification of a situs is necessarily artificial.
There is also an emerging consensus that with respect to the law applicable to the trans-
fer of of intangible claims, the lex situs rule should be abandoned in favour of separate choice
of law rules to govern the various issues arising from the transfer and taking into account the
different types of intangible claims. As elaborated later in the chapter, this development has
been influenced by legislation, both in Canada and internationally. Of particular importance
again are the statutory choice of law rules contained in the PPSAs and the counterpart provi-
sions in Book Ten, Private International Law, of the Civil Code of Quebec.
II. TANGIBLE MOVABLES

A. Transfer of Tangible Movables
Application of the lex situs rule in the context of tangible movables gives rise to difficulties
owing to the ease with which those movables may be relocated across borders. For example,
if A transferred goods to B while the goods were located in country X, and B transferred the
goods to C after the goods were moved to country Y, the lex situs rule does not indicate
whether the law of X or Y should govern a dispute between A and C. The solution cannot be
II. Tangible Movables 813
found by referring to the reasonable reliance of the parties, since A and C each reasonably
relied on their local law. Nor is a solution easy to extrapolate from a comparative law analysis
of the prevalent substantive rules. In the common law provinces, most provincial law is built
on the common law doctrine of security of title with only modest statutory exceptions. In
circumstances where the owner has entrusted possession of goods to someone else and
that person improperly transfers the goods to an innocent third party, these statutory excep-
tions provide that the innocent third party should acquire a good title. Other legal systems,
however, offer protection to innocent third parties in a far broader range of circumstances.
In any event, the predominant common law choice of law solution, at least in relation to
some types of disputes, seems to give controlling effect to the second transaction.
Cammell v Sewell
(1860), 5 H & N 728, 157 ER 1371 (Exch Ch)
[Deals (fir or pine boards) were shipped from Russia on board a Prussian ship consigned
to English merchants. On route, the ship drove from her anchorage onto the rocks at
Smaage in Norway. The cargo was not materially damaged. It was unloaded onto two
small islands, where it was exposed to injury from the weather and sea water.
The captain notified the English consignees of the wreck, who gave notice of abandon-
ment and claimed as for a total loss from their English insurers, the plaintiffs.
On the advice of surveyors who examined the vessel and its cargo, the captain sold the
cargo by public auction to Mr. Clausen, the British vice-consul. The plaintiffs’ represent-
ative protested against the sale, and subsequently brought action in Norway to have it set
aside. The Norwegian court confirmed the sale.
The cargo was shipped to England under a bill of lading endorsed to the defendants, who
had made advances to Clausen on the cargo. The plaintiffs claimed the goods when they
arrived in England. The goods were sold by auction and the plaintiffs claimed the proceeds.
The Court of Exchequer (Pollock CB, Martin B, and Channell B) found for the defend-
ants on the ground that the Norwegian judgment was in the nature of a judgment in rem
and as such conclusively determined the title to the deals. The plaintiffs appealed.]
CROMPTON J:
In this case the majority of the court (Cockburn CJ, Wightman, Williams, Crompton,
and Keating JJ) are of opinion that the judgment of the Court of Exchequer should be
affirmed. At the same time we are by no means prepared to agree with the Court of
Exchequer in thinking the judgment of the Diocesan Court in Norway conclusive as a
judgment in rem, nor are we satisfied that the defendants in the present action were
estopped by the judgment of that court or what was relied on as a judicial proceeding at
the auction. It is not, however, necessary for us to express any decided opinion on these
questions, as we think that the case should be determined on the real merits as to the
passing of the property.
If we are to recognize the Norwegian law, and if according to that law the property
passed by the sale in Norway to Clausen as an innocent purchaser, we do not think that
the subsequent bringing the property to England can alter the position of the parties. The
difficulty which we have felt in the case principally arises from the mode in which the
evidence is laid before us in the mass of papers and depositions contained in the appendix.
We do not see evidence in the case sufficient to enable us to treat the transaction as
fraudulent on the part of Clausen, although there are circumstances which would have
made it better for him not to have become the purchaser. Treating him, therefore, as an
innocent purchaser, it appears to us that the questions are—did the property by the law
of Norway vest in him as an innocent purchaser? and are we to recognize that law? The
question of what is the foreign law is one of fact, and here again there is great difficulty
in finding out from the mass of documents what is the exact state of the law. The conclu-
sion which we draw from the evidence is, that by the law of Norway the captain, under
circumstances such as existed in this case, could not, as between himself and his owners,
or the owners of the cargo, justify the sale, but that he remained liable and responsible to
them for a sale not justified under the circumstances; whilst, on the other hand, an
innocent purchaser would have a good title to the property bought by him from the agent
of the owners.
It does not appear to us that there is anything so barbarous or monstrous in this state
of the law as that we can say that it should not be recognized by us. Our own law as to
market overt is analogous; and though it is said that much mischief would be done by
upholding sales of this nature, not justified by the necessities of the case, it may well be
that the mischief would be greater if the vendee were only to have a title in cases where
the master was strictly justified in selling as between himself and the owners. If that were
so, purchasers, who seldom can know the facts of the case, would not be inclined to give
the value, and on proper and lawful sales by the master the property would be in great
danger of being sacrificed.
There appears nothing barbarous in saying that the agent of the owners, who is the
person to sell, if the circumstances justify the sale, and who must, in point of fact, be the
party to exercise his judgment as to whether there should be a sale or not, should have
the power of giving a good title to the innocent purchaser, and that the latter should not
be bound to look to the title of the seller. It appears in the present case that the one pur-
chaser bought the whole cargo; but suppose the farmers and persons in the neighbour-
hood at such a sale buy several portions of the goods, it would seem extremely
inconvenient if they were liable to actions at the suit of the owner, on the ground that
there was no necessity for the sale. Could such a purchaser coming to England be sued
in our courts for a conversion, and can it alter the case if he re-sell, and the property comes
to this country?
Many cases were mentioned in the course of the argument, and more might be col-
lected, in which it might seem hard that the goods of foreigners should be dealt with
according to the laws of our own or of other countries. Amongst others our law as to the
seizure of a foreigner’s goods for rent due from a tenant, or as to the title gained in them,
if stolen, by a sale in market overt, might appear harsh. But we cannot think that the goods
of foreigners would be protected against such laws, or that if the property once passed by
virtue of them it would again be changed by being taken by the new owner into the for-
eigner’s own country. We think that the law on this subject was correctly stated by the
Lord Chief Baron in the course of the argument in the court below, where he says “if
personal property is disposed of in a manner binding according to the law of the country
where it is, that disposition is binding everywhere.” And we do not think that it makes
any difference that the goods were wrecked, and not intended to be sent to the country
where they were sold. We do not think that the goods which were wrecked here would
on that account be the less liable to our laws as to market overt, or as to the landlord’s
right of distress, because the owner did not foresee that they would come to England. …
[O]n the evidence before us, we cannot treat Clausen otherwise than as an innocent
purchaser, and as the law of Norway appears to us, on the evidence, to give a title to an
innocent purchaser, we think that the property vested in him, and in the defendants as
sub-purchasers from him, and that, having once so vested, it did not become divested by
its being subsequently brought to this country, and, therefore, that the judgment of the
Court of Exchequer should be affirmed.
[Byles J dissented.]
NOTES
1. Why did the court focus on the Norwegian transaction in a dispute between the plain-
tiffs and the defendants? What preliminary issues were ignored, and is it assumed that the
rules applicable to them are the same everywhere? What law determines the insurer’s right
of subrogation and what law determines whether the defendants’ title depends on the title
of Clausen?
2. Did the original owners or the English buyers anticipate that the ship or its cargo
would be diverted to Norway? Would the purchasers of the goods from the master in Nor-
way have been able to distinguish between the authority of local and foreign masters?
3. Does the Norwegian law protect the purchaser from the master of a ship in distress in
any circumstances? Assuming the Norwegian law is based on the view that the owners of the
cargo have either impliedly authorized such sales in particular circumstances or should
know that they could occur, would the Norwegian law be concerned that the goods may
have been shipped in a jurisdiction where no such authority is implied or contemplated?
4. In line with the general common law rule, art 3097 of the Civil Code of Quebec provides:
“Real rights and their publication are governed by the law of the place where the property
concerned is situated.” But para 2 of art 3097 states an exception for goods in transit: “How-
ever, real rights on property in transit are governed by the law of the State of their place of
destination.” How might application of this rule have affected the decision in Cammell?
Winkworth v Christie Manson and Woods Ltd

[1980] 1 Ch 496
[Works of art were stolen from their owner (the plaintiff) in England and subsequently
taken to Italy, where they were sold and delivered to the Marchese Paolo Da Pozzo (the
second defendant). The Italian purchaser then sent the goods to England to be sold by
Christie’s. The English owner brought an action against Christie’s and the Italian purchaser
to recover the works of art still in Christie’s possession and damages for the works already
sold. The action against Christie’s was discontinued after Christie’s gave an undertaking
not to part with possession of the works of art or their proceeds pending the determina-
tion of the plaintiff ’s action against the Italian purchaser.
The master directed that a point of law should be determined as a preliminary issue—
namely, whether English domestic law or Italian domestic law should be applied to
determine title to the goods and the proceeds of their sale.
The second defendant pleaded that, under Italian law, he acquired a good title to the
works of art.]
SLADE J:
The grounds upon which Mr. Gilman, on behalf of the second defendant, submitted
the crucial issue falls to be determined in accordance with Italian law are essentially very
simple. There is, he submits, a general rule of private international law that the validity
of a transfer of movable property and its effect on the proprietary rights of any persons
claiming to be interested therein are governed by the law of the country where the prop-
erty is situated at the time of the transfer (“lex situs”). He specifically recognized that there
are five exceptions to this rule. The first is the exception summarized as follows in Dicey
& Morris, The Conflict of Laws, 9th ed. (1973), at 539:
If goods are in transit, and their situs is casual or not known, a transfer which is valid and
effective by its proper law will (semble) be valid and effective in England.
The second exception to the general rule accepted and asserted by Mr. Gilman arises
where a purchaser claiming title has not acted bona fide. The third exception is the case
where the English court declines to recognize the particular law of the relevant situs,
because it considers it contrary to English public policy. The fourth exception arises where
a statute in force in the country which is the forum in which the case is heard obliges the
court to apply the law of its own country. One example of the application of this exception
might have been the former section 24 of the Sale of Goods Act 1893, recently repealed.
Fifthly, Mr. Gilman recognized that special rules might apply to determine the relevant
law governing the effect of general assignments of movables on bankruptcy or succession.
None of these exceptions, however, it was submitted on behalf of the second defendant,
has any relevance on the facts of the present case.
[The court referred to Cammell v Sewell and several other authorities.]
Faced with these and a number of other 20th century authorities on the same lines,
Mr. Mummery, on behalf of the plaintiff, accepted that as a general rule the validity of a
transfer of movables is governed by the lex situs and that accordingly the principle of
Cammell v. Sewell would have the effect of rendering Italian law the relevant law for the
purpose of determining the rights of the second defendant and the vendor in Italy, from
whom he purchased, as between themselves and their respective successors in title. He
pointed out, however, that the present case is, in contrast, concerned with the respective
proprietary rights of the second defendant and the plaintiff. He pointed out the many
circumstances which cumulatively give this case a strong association with England, at
least if it be regarded solely from the standpoint of his client. At the time of the theft, the
goods were situated in England, in the ownership and lawful possession of a person who
was domiciled in England. The plaintiff neither knew of nor consented to the removal of
the goods from England or anything which made such removal more probable. The goods
have now been voluntarily redelivered to England where they or their proceeds of sale
still remain. Finally, it is an English court which is now hearing the matter.
Laying emphasis on what may be called these English connecting factors, Mr. Mum-
mery advanced two main propositions as possible avenues of escape from the principle
of Cammell v. Sewell. Briefly, the first was, that for the purpose of applying this principle
to determine the respective rights of the plaintiff and the second defendant in the peculiar
circumstances of this case, the lex situs should be treated as being English, rather than
Italian law. The second was that if, contrary to his first submission, the application of the
principle of Cammell v. Sewell would result in the relevant issue being determined accord-
ing to Italian law, then the exceptional facts of the case bring it outside this principle.
No authority has been cited the facts of which can be said to be precisely on all fours
with the present case, in the sense that all the English connecting factors relied on by Mr.
Mummery are present. Since, however, I have found three decisions especially illumin-
ating in the context of his two principal submissions, I shall refer to these decisions in
some detail.
[The court considered Cammell v Sewell; Alcock v Smith, [1892] 1 Ch 238; and Embiricos
v Anglo-Austrian Bank, [1905] 1 KB 677.]
These being the most relevant authorities cited to me, I now return to consider Mr.
Mummery’s two principal submissions in slightly greater detail. In support of the first of
them, he referred me to a general statement in Halsbury’s Laws of England, 4th ed., vol. 8
(1974), para. 632, p. 433, to the effect that the location of property is a matter for English
law and that it is possible for property to be regarded as having different locations for
different purposes. He accepted that, for the purpose of determining the respective rights
in the goods of the Italian vendor and the second defendant as between themselves, the
situs of the goods must be regarded as Italy. In his submission, however, it does not follow
that the situs of the goods must be regarded as Italian for the purpose of determining the
respective proprietary claims of the plaintiff and the second defendant. For the latter
purpose, he suggested, on the particular facts of the present case, the court is entitled and
obliged to hold that the situs of the goods remained English throughout. They were in
England at the date of the theft; they are still here; they never left England with the plain-
tiff ’s consent; there was never any voluntary act on his part which connected or was even
likely to connect the goods with any foreign system of law. In these circumstances, Mr.
Mummery submitted, the alleged connection of the situs with Italy, for the purpose of
determining the plaintiff ’s rights, is a spurious connection which should be disregarded
by the court.
This line of argument was supported by no relevant authority and, though attractively
presented by Mr. Mummery, in my judgment does not itself avail the plaintiff for these
short reasons. It is in my judgment abundantly clear from the authorities already cited that,
in appropriate circumstances, the court is prepared to follow the principle of Cammell v.
Sewell by applying the law of country A, in favour of a person who acquires title to personal
property under the law of that country, even though the effect of such application is to
destroy the proprietary rights of a former owner, who never himself possessed the prop-
erty in country A and never consented, expressly or implicitly, to its going to country A.
This was the situation in Cammell v. Sewell itself, where, as Cockburn CJ pointed out in
argument, 5 H & N 728, 735: “… the goods were wrecked on the coast of Norway, and
came there without the owner’s assent.” It was the situation also in Embiricos v. Anglo-
Austrian Bank, [1905] 1 KB 677, where the court applied Austrian law so as to divest the
title of the injured original owners, even though they had done nothing to consent to the
cheque finding its way to Austria. Furthermore, the plaintiff ’s English domicile cannot
avail him in this context, any more than it availed the English plaintiffs in Cammell v.
Sewell. Nor can presence of the goods, or their proceeds, in England at the date of the
hearing entitle the plaintiff to assert that their situs should be treated as English for the
purpose of any application of the principle of that decision. As Crompton J there said, 5
H & N 728, 742-43: “… we do not think that the subsequent bringing the property to
England can alter the position of the parties.”
Accordingly, I think it clear that, if the principle of Cammell v. Sewell applies at all on
the facts of the present case, then the lex situs of the relevant disposition cannot be treated
as being English rather than Italian. Intolerable uncertainty in the law would result if the
court were to permit the introduction of a wholly fictional English situs when applying
the principle to any particular case, merely because the case happened to have a number
of other English connecting factors.
It therefore follows that, if the plaintiff is to succeed, he must satisfy the court that the
second principal submission made on his behalf is correct, namely that the principle of
Cammell v. Sewell does not apply to this case, because the particular circumstances bring
it within an exception to that principle.
I have already mentioned that Mr. Gilman, on behalf of the second defendant, accepted
that there are a number of well-recognized exceptions to this principle. For present pur-
poses the most significant of them is that based on public policy.
[The court referred to Halsbury’s Laws of England, 4th ed, vol 8 (1974) at 315, para 418.]
If therefore a case arose where, by reference to the principle of Cammell v. Sewell, a

person claimed a title to goods in an English court, which he would not be able to establish
by reference to English law alone, and the content of the particular foreign law on which
he relied was so outrageous that this court regarded it as wholly contrary to justice and
morality, then it would, I conceive, probably refuse to recognize the rights conferred on
the claimant by the relevant foreign law.
Mr. Mummery, however, clearly correctly in the absence of evidence, pointed out that
for the purpose of the present application, he did not rely on the content of the relevant
Italian law as a reason why this court should refuse to recognize any rights of ownership
thereby conferred on the second defendant vis-à-vis the plaintiff. He did not assert that
such content was contrary to justice or morality. Instead, he asserted a further exception
to the principle of Cammell v. Sewell which, he suggested, must apply on the facts of the
present case and was in the following terms: where movables have been stolen from
country A or otherwise unlawfully taken from the owner in country A and are then
removed from country A without the owner’s knowledge or consent and are then dealt
with in country B without his knowledge or consent and are then returned voluntarily to
country A, the law of country A should be applied to determine whether the original
owner is or is not still the owner of the movables.
Mr. Mummery accepted that there is no English authority which directly supports this
proposition, but submitted that there is likewise no authority which shows it to be incor-
rect. Three particular considerations, he suggested, support the conclusion that as a matter
of public policy, regardless of the content of the particular law of country B, the court
should apply the law of country A, rather than that of country B, in the circumstances
which he postulated. First, if at the time of the court hearing, the goods are situated in
country A rather than country B, there can be no objection on the grounds of ineffect-
iveness to the court in country A applying its own law. Secondly, he pointed out, in the
circumstances postulated, there has been no voluntary act on the part of the original
owner, which has led to the connection of the goods with the legal system of country B.
Thirdly, in Mr. Mummery’s submission, the concept of security of titles is an important
one and country A is justified in making an exception to the general principle of Cammell
v. Sewell, for the purpose of securing a prior title recognized by its own system of law.
As to the first of these three considerations, the presence of the goods in country A at
the time of the trial certainly removes one potential practical obstacle, which might
otherwise deter the court in that country from applying its own law; no court likes to
make an order which will probably be unenforceable in practice. In my judgment, how-
ever, it affords no further positive support at all to Mr. Mummery’s proposition. There
have been many cases, for example, Cammell v. Sewell itself and Todd v. Armour, 9 R 901,
in which the court of country A has declined to apply the law of that country, despite the
presence of the goods in question in that country at the time of the trial.
As to the second of these considerations urged by Mr. Mummery, it appears that in
the United States of America the courts of at least a number of states regard the knowledge
of an owner that his chattel has been removed into another state as being relevant to the
question whether the law of that other state should be applied for the purpose of deter-
mining whether his title has been divested. I was referred to Beale’s Treatise on the Conflict
of Laws (1935), vol. 1, pp. 298, 299. There it was submitted that the great weight of author-
ity in the United States of America supported the view that:
… the law of a state into which chattels have been surreptitiously removed without the
knowledge of an owner and against his will does not apply its law to divest the title of the
absent owner … Such little authority as there is, therefore, is to the effect that a state has no
jurisdiction over the title of an absent owner in a chattel which has been brought into the
state without any act of his sufficient to submit his interest in the chattel to the jurisdiction
of the state.
I was however also referred to a learned monograph by P.A. Lalive, The Transfer of
Chattels in the Conflict of Laws (1955), see particularly at pp. 175-184, and an article by
Dr. J.H.C. Morris, The Transfer of Chattels in the Conflict of Laws, in The British Year Book
of International Law 1945, p. 232, see particularly, at pp. 240-241, in which the theories
advanced in this context by Mr. Beale have been subjected to searching criticism. Mr.
Mummery did not go so far as to adopt any of Mr. Beale’s wide propositions for the pur-
pose of his argument. He suggested, however, that the broad considerations of policy,
which have influenced many American states in protecting the title of an owner who has
not consented to his goods being removed to another state, are relevant for this court, in
determining whether it should formulate the new exception to the rule in Cammell v.
Sewell which he invites me to apply.
[The court referred to Edgerly v Bush, 81 NY 199 (NY Ct App 1880).]
Though Mr. Mummery suggested that the latter decision of a New York court is per-
suasive authority in his favour, I find it of no assistance for present purposes, since, with
due respect, the judgment of the court is expressed in such confusing language that it is
impossible to extract from it any coherent reasons for the ultimate decision.
Despite this second consideration advanced by Mr. Mummery in support of the sug-
gested exception to the principle of Cammell v. Sewell, there have been a number of
English cases, for example, Cammell v. Sewell itself and Embiricos v. Anglo-Austrian Bank,
[1905] 1 KB 677, in which the court of country A has applied the law of country B to
determine the ownership of goods, even though there has been no kind of voluntary act
on the part of the original owner, which has led to the connection of the goods with the
legal system of country B. Furthermore, in Embiricos v. Anglo-Austrian Bank, the original
removal of the property in question from the plaintiff ’s possession had been unlawful. I
find it impossible to derive from the English cases any principle that the absence of such
voluntary act should preclude or even deter the court of country A from applying the law
of country B in accordance with the principle of Cammell v. Sewell. For all these reasons
I do not think that the absence of any such voluntary act or the fact of an original unlawful
removal constitutes an affirmative reason why I should adopt the suggested exception to
that principle. At best it removes one additional obstacle which might have confronted
the plaintiff, if he had expressly or implicitly agreed to the goods going to the foreign
country or knew that they were going there, as, for example, in Inglis v. Robertson, [1898]
AC 616.
I turn now to the remaining consideration urged on me by Mr. Mummery, namely
that, on the facts of his hypothetical case, country A is justified in making an exception
to the general principle of Cammell v. Sewell for the purpose of securing a title recognized
by its own system of law. This, I think, is by far his strongest point. In principle, any court
must surely regard, with some initial sympathy, the position of a blameless person, such
as the plaintiff in the present case, who, if attention is paid solely to the law of the country
of that court, has at all material times had and retained good title to the goods which are
the subject of his claim.
On the other hand, there are other equally powerful—I think more powerful—counter-
balancing considerations. Security of title is as important to an innocent purchaser as it
is to an innocent owner whose goods have been stolen from him. Commercial conven-
ience may be said imperatively to demand that proprietary rights to movables shall gener-
ally be determined by the lex situs under the rules of private international law. Were the
position otherwise, it would not suffice for the protection of a purchaser of any valuable
movables to ascertain that he was acquiring title to them under the law of the country
where the goods were situated at the time of the purchase; he would have to try to effect
further investigations as to the past title, with a view to ensuring, so far as possible, that
there was no person who might successfully claim a title to the movables by reference to
some other system of law; and in many cases even such further investigations could result
in no certainty that his title was secure. In these circumstances, there are, in my view, very
strong grounds of business convenience for applying the principle of Cammell v. Sewell
even in a case such as the present. Maugham J said in In re Anziani, [1930] 1 Ch. 407,
420, with reference to the principle: “Business could not be carried on if that were not so.”
This was putting the point very strongly. I think, however, that most undesirable uncer-
tainty in the commercial world would result if the choice of the system regulating the
validity of a disposition of chattels were to depend not only on the situation of the goods
at the time of the disposition, but also on the additional factors suggested on behalf of
the plaintiff.
It must be accepted that exclusive reference to the lex situs must cause hardship to a
previous owner in some cases, particularly if his goods have been moved to and sold in
a foreign country without his knowledge or consent. Crompton J, however, in the passage
already quoted, from 5 H & N 728, 744-745, in the majority judgment in Cammell v.
Sewell, expressly recognized that the English law as to stolen goods acquired by a pur-
chaser under sale in market overt might seem harsh to a former foreign owner, but
expressed the view that it made no difference that such owner did not intend them to be
sent to the country where they were sold. The English court, I do not doubt, would ordin-
arily expect a foreign court to apply the principle of Cammell v. Sewell and recognize the
title of a person who has acquired a title to goods under English law, by virtue of a pur-
chase in England in market overt at a time when they were situated in England. And this
will be the case even though such foreign court on an exclusive application of its own law,
would have regarded a previous owner, from whom the goods had been stolen, as having
a better title. If this would be the attitude of the English court, it could not, in my judg-
ment, solely on the pretext of a newly formulated exception to the rule in Cammell v.
Sewell either logically or reasonably, refuse to recognize the title to goods of a person who
has acquired a title to them under Italian law by virtue of a purchase in Italy at a time
when they were situated in Italy. And it makes no difference that the English court, on an
exclusive application of its own law, would have regarded the previous owner, from whom
the goods had been stolen in England, as having a better title to them.
[The judge summarized his conclusions.]
I must therefore accept the second defendant’s submission that the relevant question
of title falls to be determined in accordance with Italian law. This decision, however, must
be subject to one proviso. I have heard no evidence as to the content of Italian law. Though
the plaintiff ’s counsel has not sought to submit that either of these things is likely to occur,
it is theoretically possible that the trial judge, on hearing such evidence, could form the
view that the particular content of the relevant Italian law was such that the public policy
of this country required him to disregard any rights asserted by the second defendant by
reference to such law. Alternatively, it is theoretically possible that the evidence as to
Italian law would show that the Italian court would itself apply English law, on the par-
ticular facts of the present case, for the purpose of determining the rights of the second
defendant vis-à-vis the plaintiff and vice versa. In this event I suppose it would be open
to the plaintiff to argue that English law should, in the final result, be applied by the
English court by virtue of the doctrine of renvoi. By this judgment I do not intend to
deprive the plaintiff of the right to argue either of these two points at the trial.
NOTES
1. There is an obvious difference between the position of the original owners in Cammell
v Sewell and Winkworth—the former involves a cargo being shipped internationally and the
latter involves a work of art that the original owner did not expect or intend would leave
England. Although the owner in Cammell v Sewell may not have expected the cargo to be
unloaded in Norway, in a more general sense it did undertake the risks associated with inter-
national commerce.
2. Winkworth puts the choice of which lex situs to apply to third-party disputes in its
starkest form. Presumably the original owners relied on local law with its emphasis on secur-
ity of title and the social policy of discouraging theft by making it harder to dispose of stolen
goods. At the same time, the third-party purchasers presumably relied on their local law
with its emphasis on the security of transactions. In fact, the law relied on by the third parties
takes the extreme form of protecting them even though there was no entrusting of the
goods by the original owners. In a sense, each party, especially if it is an informed commer-
cial entity, might anticipate the circumstances when reliance on local law will not protect it.
So, the choice of one lex situs over another might seem a bit arbitrary. However, notice how
the application of foreign law is not undone when the goods are returned to England and
sold there even though no English purchaser would normally enjoy such protection. Does
the court reach this result because it would be anomalous to hold that someone with a good
title cannot give a good title? Would this be any more anomalous than the domestic rule that
parties can sometimes give a better title than they have?
3. Winkworth creates an obvious problem for local law enforcement because it could
encourage the use of foreign havens to launder stolen property.
Maden v Long
[1983] 1 WWR 649 (BCSC)
[The plaintiffs sold a mobile home to the defendant Lauren Deming Hall (who was using
the alias John Wesson). The sale took place in the state of Washington. The plaintiffs
delivered the mobile home to Hall upon payment of the agreed-on down payment. When
the time came for payment of the balance, the mobile home had disappeared. By means
unknown, the mobile home found its way to the lot of a dealer in Surrey, British Columbia.
The defendant Banting purchased the mobile home from the dealer in British Columbia
and moved it to Dawson Creek, where he and his family had lived in it for five years.
The plaintiff claimed damages for wrongful possession of the home.]
BOUCK J:
[8] An expert in Washington law gave evidence on behalf of the plaintiffs. He testified
that when the plaintiffs gave up possession to Wesson on 29th September 1977, title to
the mobile home probably passed to Wesson. He went on to say that the sale agreement
dated 28th September 1977, which reserved title to the plaintiffs until full payment of the
purchase price, was probably effective only to retain a “security interest” in the plaintiffs.
[9] On a further analysis of Washington law, he stated that a purchaser in Washington
does not acquire title to goods where they are obtained through fraud punishable as
larcenous under the criminal law. In 1975 the Washington Criminal Code was revised
and a section was enacted which provides:
Theft and Larceny Equated. All offences defined as larcenies outside this title shall be treated
as thefts as provided in this title.
[10] It was his opinion that in Washington state, since 1975, the word larceny has only
one meaning—theft. If title to a chattel is transferred to a purchaser on the basis of materi-
ally false representations by the purchaser, this amounts to larcenous theft. In his view,
the false representation of an alias by Hall and the representation that he intended to
perform the contract of 28th September 1977 were not bona fide and can be defined as
larceny or theft in Washington.
[11] It is agreed between the parties that Hall was convicted of theft in Washington
state some time after 31st October 1977 when the plaintiffs discovered the mobile home
was missing from Chelan, Washington.
Law
[12] Two sections of the Sale of Goods Act, RSBC 1979, c. 370, require interpretation.
They read:
28. When the seller of goods has a voidable title to them, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, if he buys them
in good faith and without notice of the seller’s defect of title.
29(1) Where goods have been stolen and the offender is prosecuted to conviction, the
property in the goods stolen revests in the person who was the owner of the goods, or his
personal representative, notwithstanding any intermediate dealing with them, whether by
sale in market overt or otherwise.
(2) Notwithstanding any enactment to the contrary, where goods have been obtained by
fraud or other wrongful means not amounting to theft, the property in the goods shall not
revest in the person who was the owner of the goods, or his personal representative, by reason
only of the conviction of the offender.
[13] For the plaintiffs, it is argued that since Hall was convicted of theft in Washington
state, he had a void title which did not permit transfer of ownership in the mobile home
to either Biggins [the dealer] or Banting. But the defendants submit the title held by Hall
was voidable and not void since the transaction between the plaintiffs and Hall in Sep-
tember 1977 does not amount to theft in Canada. Thus, the problem is mainly one of
statutory interpretation and conflict of laws.
[14] For a variety of reasons, English common law did not face the same kind of
dilemma in its early development. Growth in this area of the law comes mostly from
Canadian and American authorities: Dicey and Morris, The Conflict of Laws, 10th ed.
(1980), vol. II, p. 562. In the beginning, common law held that movables were governed
by the law of the domicile of the owner: Winans v. AG, [1910] AC 27 at 32 (HL). That rule
did not prove satisfactory when applied to the inter vivos transfer of chattels and today,
in Canada, the validity of a transfer of tangible movable property is governed by the law
where the movable is at the time of the transfer: Castel, Canadian Conflict of Laws, (1977),
vol. II, p. 378. It has become known as the lex situs rule.
[15] In this instance, the mobile home was in Washington state at the time of the transfer
from the plaintiffs to Hall. Then it was in British Columbia at the time of the transfer from
Biggins to Banting. Since there are these two lex siti, what law governs? Almost invariably
the authorities apply the law in the country or province where the goods actually are at
the time of litigation: Traders Finance Corp. Ltd. v. Dawson Implements Ltd. (1958), 26
WWR 561, 15 DLR (2d) 515 at 517 (BC SC) (Whittaker J): sale of a motor vehicle con-
ditional sales agreement in Alberta; car taken to British Columbia and sold to defendant
purchaser in good faith for value; British Columbia law applied. Century Credit Corp. v.
Richard, [1962] OR 815, 34 DLR (2d) 291 at 293-94 (CA): motor vehicle sold by condi-
tional sales agreement to purchaser in Quebec; car taken to Ontario and sold there to
purchaser in good faith for value; Ontario law applied.
[16] There are several reasons for this rule. One must assume that when the legislature
enacted the Sale of Goods Act, it meant to provide for an orderly transfer of goods in
British Columbia with an idea of protecting its own citizens. Throughout the reported
cases the courts adopt this theme. Although a foreign plaintiff will be treated fairly, he
will never be placed in a better position than a comparable dissatisfied resident plaintiff
complaining about the same kind of transaction which took place within the boundaries
of the province. Put in the context of this case, Washington state law cannot give the
plaintiffs any better title than they would get in British Columbia if the original sale and
disposition on 28th and 29th September 1977 occurred here instead of in Washington.
[17] Similarly, when the legislature speaks of stolen goods, theft and fraud (section 29),
it must have in mind the meaning of these words in Canadian law. For example, it could
not be thinking of theft as it is known in, say, Mexico, Japan, or the United States of
America. Consequently, I must look at the facts surrounding the transaction in Wash-
ington on 28th and 29th September 1977 and decide whether the plaintiffs’ title is pro-
tected by our Sale of Goods Act.
[18] On 29th September 1977 I know the plaintiffs voluntarily gave up possession of
the mobile home to Hall on his promise to pay the balance due by 1st November 1977.
In return, they received a signed contract and a down-payment of $1,500. An examination
of s. 283 of the Criminal Code, RSC 1970, c. C-34, shows this is not theft because Hall did
not acquire possession “fraudulently and without colour of right.” At best, Hall may be
guilty of a crime arising from either obtaining goods by false pretenses or by fraud: Crim-
inal Code of Canada, ss. 319 and 320 [am. 1972, c. 13, s. 29, 1974-75-76, c. 93, s. 31]; …
[19] In these circumstances, s. 29(2) of the Sale of Goods Act specifically declares that
since the mobile home was obtained by fraud or other means not amounting to theft,
property in the chattel does not revest in the plaintiffs. Should I be obliged to apply
Washington state law, the result would frustrate the objectives of the Sale of Goods Act.
This is because the plaintiffs, as residents of Washington, would be entitled to succeed,
whereas if the original dealings on 28th and 29th September 1977 occurred in British
Columbia, they would not. Because one purpose of our laws is to give a foreign resident
no better title than he would get if he were resident in the province from the beginning,
I decline to apply the Washington state definition of theft to s. 29 of our Sale of Goods Act.
[In spite of the fact that there was no evidence that Hall delivered the mobile home to the
British Columbia dealer, Bouck J found that the defendant Banting was also protected
under s 30(2) of the Sale of Goods Act because the dealer received delivery of the home
from a buyer in possession.]
NOTES
1. Is Bouck J’s statement that the courts invariably apply the law in the country or prov-
ince where the goods actually are at the time of litigation accurate?
2. Notice the way Bouck J describes the position of a foreign plaintiff: “Washington state
law cannot give the plaintiffs any better title than they would get in British Columbia if the
original sale and disposition … occurred here instead of in Washington.” Are the plaintiffs
relying on the sale to Hall to establish their title? Why should a Washington citizen’s conduct
in Washington be governed by a foreign law?
3. Have the defendants relied on the protection given to them by British Columbia law if
they cannot tell whether a previous owner had a voidable or void title?
B. Security Interests in Tangible Movables

Disputes involving competing claims to movables may also occur when a person grants a
security interest in his or her tangible assets to secure payment of a debt or performance of
some other obligation. The claims of the secured creditor may come into conflict with the
claims of third parties, such as the holder of a competing security interest, transferees of the
encumbered asset, judgment creditors of the grantor seeking to attach the grantor’s prop-
erty, and a bankruptcy trustee claiming the asset on behalf of the grantor’s general creditors.
At the substantive level, these types of disputes are governed by the PPSAs in effect in
the common law provinces and the three territories. Essentially, these statutes recognize the
importance of security devices in the provision of credit by allowing the parties to create
them freely, but protect third parties who may be affected by them by requiring public noti-
fication (usually by registration or a transfer of physical possession of the asset) of their
existence. The process of giving notice and the protected status that such notice gives to a
secured creditor against competing claimants is called “perfection.”
The PPSAs also establish choice of law rules to govern the proprietary aspects of a
secured transaction, including the validity of the security interest and the effects of perfec-
tion or non-perfection against competing claimants. For security interests in ordinary
goods, the applicable law is the lex situs of the goods in conformity with the common law
rule: see e.g. Personal Property Security Act, RSO 1990, c P.10, s 5(1) [Ont PPSA].
The PPSAs recognize that a subsequent change in the location of the goods may pose
risks for third parties who deal with the goods at their new location and might reasonably
expect any security interest in the goods to be registered or otherwise perfected locally. This
risk is addressed by requiring the secured creditor to reperfect its security interest in accord-
ance with local law whenever goods subject to a security interest that attached abroad are
brought into the enacting jurisdiction. To preserve continuity of the perfected status of its
security interest, the secured creditor must reperfect before the expiry of a stipulated grace
period: see e.g. Ont PPSA, s 5(2).
The Civil Code of Quebec also adopts the lex situs rule for security interests in tangible
movables (art 3102) and a reperfection (republication) rule where an encumbered asset
subject to a foreign security interest is relocated to Quebec (art 3104). However, the
formulation of the general lex situs rule in art 3102 is somewhat different. The validity of the
security interest is governed by the law of the jurisdiction where the asset is located when
the security interest attaches, whereas publication (perfection) and its effects are governed
by the law of the jurisdiction where the collateral is currently situated. Under this formula-
tion, a change in the location of the goods does not affect the law applicable to validity—
but it does bring about a change in the law applicable to perfection and the effects of
perfection or non-perfection.
With the exception of the Saskatchewan statute, the PPSAs generally do not make this
temporal distinction: for Saskatchewan, see Personal Property Security Act, 1993, SS 1993,
c P-6.2, ss 5(1) and (1.1). Validity, perfection, and the effects of perfection or non-perfection
are all governed by the lex situs of the encumbered asset at the time of creation of the secur-
ity interest. This formulation apparently negates the application of the new lex situs follow-
ing relocation of the asset except to the extent, noted above, that local reperfection is
necessary to maintain continuity of perfection.
However, consider a priority conflict between the original secured creditor and the
holder of a security interest granted in the goods following their relocation. If the effects of
perfection of the first security interest are governed by the original lex situs, and the effects
of perfection of the second security interest are governed by the new lex situs, which lex situs
governs a priority completion between them?
A literal reading of the reference to the law applicable to the effects of perfection or non-
perfection does not encompass issues of priority except to the extent that perfection is a
precondition to the third-party effectiveness of the security interest. This gap opens the
door to the continued application of the choice of law approach in Cammell v Sewell, above.
Under this approach, the priority rules of the original lex situs would apply to priority con-
tests involving third parties who acquired their interest prior to relocation whereas the prior-
ity rules of the new lex situs would govern contests involving third-party interests—including
competing security interests—granted after the relocation.
The courts have not directly addressed the question whether the common law approach
continues to apply. In the decided cases, the courts have tended to assume that the priority
rules of the new lex situs govern contests involving a third party who acquired its interest after
the relocation: see Re Adair (1985), 49 OR (2d) 583, 15 DLR (4th) 596 (CA), whereas the original
lex situs governs contests between security interests that both attached prior to the reloca-
tion: see Advance Diamond Drilling Ltd (Receiver of) v National Bank Leasing Inc (1992), 67 BCLR
(2d) 173 (SC). So the results in practice have tended to conform to the common law approach.
On the other hand, in a case involving a car sold in Quebec on conditional sale terms, the
Ontario court applied Quebec law to determine priority between the Quebec creditor and a
buyer who had purchased the car in Ontario after its removal into that province but before
the Quebec seller had reperfected its interest by registration in the Ontario registry: see
General Motors Acceptance Corp of Canada Ltd v Town & Country Chrysler Ltd, [2005] OJ No 1378
(QL) (Sup Ct J), aff’d 2007 ONCA 904, 288 DLR (4th) 74. The installment seller had reregistered
in Ontario before the expiry of the grace period required by the Ont PPSA, and the court
ruled that this had the effect of preserving the conditional seller’s rights under the Civil Code
of Quebec. However, the result would have been the same even if the Ontario priority regime
had been applied.
III. Mobile Goods 827
III. MOBILE GOODS

Application of the lex situs rule is problematic in the case of inherently mobile goods—that
is, goods that by virtue of their normal function are used in more than one jurisdiction. The
PPSAs substitute a more stable connecting factor. The law of the jurisdiction where the
grantor is located applies if the goods are held by the grantor as equipment or as inventory
for lease (as opposed to sale): see e.g. Ont PPSA, s 7(1)(a)(ii). No equivalent exception to the
general lex situs has been recognized at common law in the case of outright transfers of
mobile equipment, with the result that the applicable law may differ depending on whether
the dealing in the mobile goods is an outright transfer or the grant of a security interest.
The Civil Code of Quebec applies the law of the grantor’s location to all goods ordinarily
used in more than one jurisdiction, even where the grantor holds the goods as consumer
goods or as inventory for sale. In the case of consumer goods, this difference from the PPSAs
is unlikely to lead to the application of a different law in practice since the goods and the
grantor usually will be located at the same place. However, where the mobile goods are
inventory held for sale in several jurisdictions, the difference between the PPSAs and the
Civil Code of Quebec will be more significant and may produce a different outcome where
inventory is located both in Quebec and in a PPSA jurisdiction depending on where the issue
is litigated.
The PPSAs and the Civil Code of Quebec also differ in their approaches to the determina-
tion of the grantor’s location for the purposes of identifying the applicable law. This point is
addressed later in the chapter in Section IV, “Intangible Movables.”
The Convention on International Interests in Mobile Equipment (2001) (the Cape Town Con-
vention) seeks to eclipse the conflicts problems presented by highly mobile equipment by
providing an internationally uniform substantive law framework. The Convention contem-
plates the establishment of international registries for the public disclosure of, and ordering
of priorities among, interests in mobile equipment. The Convention is designed to be
implemented incrementally through the adoption of asset-specific protocols that adapt the
general framework of the Convention to the particular type of asset. Thus far, protocols have
been adopted for aircraft frames and engines (in force 1 March 2006), railway rolling stock
(not yet in force), and space assets (not yet in force), and work is under way on a protocol for
agricultural, construction, and mining equipment.
The Protocol to the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment (Cape Town, 16 November 2001) (the Aircraft Protocol) applies
to security interests in commercial aircraft frames and engines including sales subject to a
reservation of title to secure the price as well as leases and outright sales. It has achieved
widespread take-up by states, including Canada. Implementing legislation has been enacted
federally and in all 13 provinces and territories: see e.g. International Interests in Mobile Equip-
ment Act (Aircraft Equipment), 2002, SO 2002, c 18, Schedule B. The implementing legislation
took effect in most provinces and territories on April 1, 2013. Further information on the
Convention, the Aircraft Protocol, and other protocols is available on the website of the
sponsoring organization, the International Institute for the Unification of Private Law, online:
UNIDROIT <http://www.unidroit.org>.
IV. INTANGIBLE MOVABLES

A. Introduction
The assignment of an intangible claim raises complex legal issues. First, the contract of
assignment itself creates a contractual relationship between the assignor and the assignee.
Second, consideration must be given to the impact of the assignment on the rights and
obligations of the assignor and the assignee on the one hand, and the person obligated on
the assigned claim on the other. Third, an assignment of a claim involves the transfer of an
asset—the right to performance of the assigned obligation—and therefore raises issues as
to its proprietary effects against third parties whose own claims may be in conflict with the
rights of the assignee. These potential competing claimants include, notably, a prior or
subsequent assignee of the same claim as well as the attaching creditors of the assignor and
its trustee in bankruptcy. The same complications arise where the transaction involves the
grant of security in an intangible claim as opposed to its outright assignment.
The Canadian common law jurisprudence on the appropriate choice of law approach to
the assignment of intangibles is virtually non-existent. The English case law is sparse and
dated and has been described—accurately—as unhelpful and confusing: see Moshinsky;
Bridge. As this section of the chapter explains, guidance must instead be sought in the con-
flicts literature and in legislative developments both within Canada—in particular, the PPSAs
and the Civil Code of Quebec—and internationally.
B. A Unitary or Pluralistic Choice of Law Approach?

Early conflicts analysts favoured a unitary choice of law rule to resolve the diversity of issues
involved in the assignment matrix. Drawing on the medieval maxims mobilia sequuntur per-
sonam (movables follow the person) and mobilia ossibus inhaerent (movables inhere in the
bones), they advocated application of the law of the domicile of the assignor, as the original
“owner” of the assigned obligation: see Wolff at 539-40; Moshinsky at 591, citing Joseph
Story, Commentaries on the Conflict of Laws (Boston: Hilliard, Gray & Company, 1834), n 2.
Later writers advocated a pluralistic approach in which the different sets of issues that might
arise within the assignment matrix were assigned the connecting factor most appropriate
for those issues. In the English conflict of laws, this approach is associated with John Morris
circa 1949: see Moshinsky at 592.
Internationally, a pluralistic approach is reflected in the United Nations Convention on the
Assignment of Receivables in International Trade (New York, 2001) (the Receivables Conven-
tion), not yet in force, and in art 12 of the Convention on the law applicable to contractual
obligations opened for signature in Rome on 19 June 1980 (the Rome Convention), now super-
seded by art 14 of the Regulation (EC) No 593/2008 of the European Parliament and of the
Council of 17 June 2008 on the law applicable to contractual obligations) (Rome I). However,
consensus on which issues should be assigned to what law has proved more elusive, particu-
larly when it comes to issues relating to the proprietary effects of assignments: see Kieninger
& Sigman; Struycken; Moshinsky; Bridge; Walsh.
C. Characterization: Outright Assignment Versus Grant of Security

The term “assignment” is not uniformly understood. In some legal systems, it designates an
outright sale of the relevant obligations, as distinct from their hypothecation as collateral for
IV. Intangible Movables 829
secured debt. In others, it encompasses all transactions intended to vest property rights in
the assigned asset in another person, whether by way of ownership or merely security. In
principle, there is no reason to have a different choice of law rule for outright and security
assignments. Indeed, such a distinction would unnecessarily complicate the conflicts regime
from the point of view of both the person obligated on the assigned claim and competing
claimants. The law applicable to their rights vis-à-vis the assignee would turn on the some-
times blurred dividing line between outright and security assignments. Moreover, priority
between competing assignments, one by sale and the other by security, would end up being
governed by different laws, leading to an impasse. Consequently, the choice of law rules set
out in both the Receivables Convention and Rome I apply to both the transfer of and the
creation of security interests in intangible claims.
In Canada, the PPSAs likewise give an extended meaning to the concept of “security
interest” in the case of “accounts” to include outright transfers: see e.g. Ont PPSA, s 2(b).
Consequently, the PPSA choice of law rules apply to both the grant of security in accounts
and their outright transfer. While the outright transfer of non-monetary intangible claims is
not directly covered by the PPSA choice of law regime, the courts have applied it to analogous
transactions outside the strict scope of the statute in other contexts: see GMAC Commercial
Credit Corp of Canada v TCT Logistics Inc (2004), 70 OR (3d) 321, 6 PPSAC (3d) 163 (CA). It is
therefore arguable that the PPSA rules might be extended to the assignment of intangible
claims generally as a matter of judicial development, particularly given the international
developments.
D. Contractual Relations Between the Assignor/Grantor

and the Assignee/Secured Creditor
There is a widespread consensus that the purely contractual aspects of the relationship
between the assignor and the assignee (or the grantor and the secured creditor in the case
of a security assignment) are governed by the usual rules applicable to choice of law for
contract: see e.g. art 14(1) of Rome I and art 28 of the Receivables Convention; see also Des-
champs & Walsh.
E. Relations Between the Assignee/Secured Creditor

and the Debtor on the Assigned Receivable
There also seems to be a general agreement that issues relating to the relations between
the assignee/secured creditor, on the one hand, and the debtor who owes performance of the
assigned obligation, on the other, should be governed by the law applicable to the assigned
obligation: see art 14(2) of Rome I and art 29 of the Receivables Convention; art 3120 of the
Civil Code of Quebec. This rule is founded in the substantive law of assignment. Although legal
systems generally permit the unilateral assignment of intangible obligations, this is subject
to the condition that the legal rights of the debtor obligated on the assigned claim not be
adversely affected by the assignment, or at least not until after receipt of notice or knowledge
of the assignment. Application at the choice of law level of the law governing the assigned
obligation ensures that the debtor’s original rights and obligations can be changed by the
assignment only to the extent permitted by the law under which the debtor undertook
those rights and obligations. Thus the law applicable to the assigned obligation determines
the impact of the assignment on the debtor’s defences and rights of setoff, the conditions
under which the assignment can be invoked against the debtor, and any question relating
to whether the debtor’s obligations have been discharged.
There is some difference in wording between Rome I and the Receivables Convention.
Whereas Rome I refers to “the law governing the receivable to which the assignment
relates,” art 29 of the Receivables Convention refers to the law governing the original con-
tract between the assignor and the debtor on the assigned obligation. The only reason for
the difference in wording is that, unlike Rome I, the Receivables Convention applies only to
contract-generated receivables.
F. Assignability
The Rome Convention included “assignability” in the list of issues referable to the law gov-
erning the assigned receivable pursuant to art 12(1), and the same ambiguous terminology
was carried over in art 14(1) of Rome I. Insofar as assignability relates to the effectiveness of
any contractual restrictions or prohibitions on assignment contained in an agreement
between the assignor/grantor and the debtor, application of the law governing the assigned
obligation is appropriate. Such agreements are inevitably predicated on the debtor’s desire
for protection against having to deal with a new creditor. Consequently, application of the
law governing the assigned obligation is consistent with the debtor-protection motivation
for the inclusion of anti-assignment clauses in an agreement.
However, assignability could also be taken to refer to statutory or judicial restrictions on
the assignment of certain types of intangibles. In some instances, these restrictions may be
intended to protect the debtor—for example, restrictions on the assignment of debts owing
by the government or governmental agencies. More commonly, they are designed for the
protection of the assignor/grantor or his or her family or dependants—for example, restric-
tions on the assignment of wages and pension and life insurance entitlements—and are in
principle more appropriately governed by the law of the location of the assignor/grantor.
The Receivables Convention avoids the ambiguity inherent in the term “assignability” in
favour of more explicit guidance. Thus, the effectiveness of contractual restrictions on
assignment are explicitly included in the list of issues governed by the law applicable to the
relationship between the assignee/secured creditor and the debtor on the assigned receiv-
able under art 29. Legal restrictions on the assignability of certain types of intangibles are
expressly excluded from the Convention, leaving it open for a court to select the applicable
law by reference to the policy—protection of the debtor or protection of the assignor/
grantor—underlying the particular restriction.
G. Effectiveness Against Third Parties and Priority

1. General
The assignment of or grant of a security interest in an intangible claim has implications for
third parties beyond the immediate parties and the debtor on the assigned receivable. The
assignee or secured creditor’s right in the assigned obligation may come into conflict with a
competing assignee or secured creditor or with the claims of the attaching creditors or
insolvency administrator of the assignor/grantor. In sorting out these contests, states adopt
a wide diversity of approaches at the substantive level. All systems adopt a first-in-time rule,
at least as a starting point, but differ on the relevant event. In some systems, notice of the
assignment or security interest must be registered in a public registry to take effect against
third parties, and ranking among successive assignees and secured creditors depends on the
order of registration. In other systems, priority turns simply on when the first assignee or
secured creditor reached agreement with the assignor. In still other systems, the assignment
or grant of security is not effective against third parties until the debtor on the receivable is
either notified of or accepts the assignment, and the first assignee or secured creditor to
give notice prevails. Even among jurisdictions that adopt the same general theory, there is
considerable variation in the exceptions and qualifications: see Hein Kötz, “Rights of Third
Parties: Third Party Beneficiaries and Assignment “ in International Encyclopedia of Compara-
tive Law, vol VII, ch 13 (Tübingen: Martinus Nijhoff, 1990); Kieninger & Sigman.
These differences in approaches make it critical to determine what law should govern the
effectiveness of the assignee or secured creditor’s right against third parties and priority
between competing assignees and secured creditors of the same claim. The Rome Conven-
tion did not settle the matter. Scholarly and judicial opinion was divided on whether art 12
was even intended to apply to the property aspects of assignments. Even among those who
thought that art 12 applied, there was disagreement over which of its two branches con-
tained the appropriate rule. Some regarded art 12(1), insofar as it referred “the mutual obli-
gations of the assignor and assignee” to the proper law of the contract between them, as
thereby also determinative of the law applicable to the relative property rights acquired by
subsequent third parties claiming through the assignor. Others took the view that art 12(2),
insofar as it covered issues of “assignability” and the assignee’s right to payment from the
debtor, should also determine the law applicable to priority among competing claimants:
see Kieninger & Sigman; Struycken; Moshinsky; Bridge; Walsh.
The replacement of the Rome Convention by Rome I did not resolve the controversy. The
initial draft supported application of the law of the state in which the assignor was located.
This is the solution adopted in arts 22 and 31 of the Receivables Convention. The Convention
refers issues relating to the “priority” of the assignee’s rights in an assigned receivable to the
law of the state where the assignor is located. The term “priority” is defined broadly to cover
not just contests between successive assignees of the same receivables but also all issues
relating to the effectiveness of the assignee’s putative property rights in the assigned receiv-
ables against competing claimants, including creditors of the assignor and the assignor’s
insolvency representative.
However, consensus could not be reached during the legislative process leading up to the
adoption of Rome I. The matter has not been taken off the drafting table. Article 27(2) of
Rome I required the European Commission to produce a report to the European Parliament
and the Council of the European Union on the issue by June 2010, together with proposals
for the amendment of the rules, if appropriate. That deadline has long passed with no solu-
tion yet agreed to.
Application of the law of the state in which the assignor/grantor is located enjoys the
widest support. The reasons why are best understood by comparing it to the alternatives.
Application of the law governing the contract of assignment would enable an assignor/
grantor and an assignee/secured creditor to select a law potentially inimical to the protection
of third parties, including the assignor’s creditors. Even if the applicable contract law was
objectively determined, the connecting factors relevant to the determination of the law
applicable to the contract of assignment are not the same as those relevant to the relation-
ship between the assignee and third parties. Moreover, this approach would not yield a
solution in cases involving priority between competing assignees/secured creditors, given
the very real possibility that a contract choice of law analysis would result in different and
potentially conflicting laws for each assignment contract. Application of the law of the state
in which the assignee/secured creditor is located suffers from the same deficiency. The law
governing the assigned obligation has the relative advantage of being objective. However,
the issues for which a choice of law rule is needed involve third parties claiming competing
rights through their relationship with the assignor/grantor, not the debtor. Moreover, while
this solution would yield a single governing law in the case of an assignment of a single
intangible, it would result in the application of different governing laws where the transac-
tion covered receivables owed to the assignor/grantor by debtors located in different states
and would produce uncertainty as to the governing law where the transaction extended to
the assignor/grantor’s future receivables. Application of the law of the assignor’s location
does not suffer from these deficiencies.
In Canada, the PPSAs refer to the law of the grantor’s location to determine the validity
and effects of perfection or non-perfection of security interests in intangible claims see e.g.
Ont PPSA, s 7(1)(a)(i). As noted above, the PPSAs also apply to the outright assignment of
accounts (intangible claims for the payment of a monetary amount). Consequently, the law
of the grantor’s location also governs the proprietary aspects of outright assignments of
intangibles in the form of accounts. In Quebec, art 3105 of the Civil Code of Quebec likewise
applies the law of the grantor’s location to the validity, publication, and effects of publica-
tion of security interests granted in “incorporeal movables.” However, art 3105 does not
apply on its face to the outright transfer of intangible claims, with the result that the default
lex situs rule in art 3102 applies. It follows that different and potentially conflicting laws may
apply in a competition, for example, between an outright transferee of a receivable and a
secured creditor with a security interest in the same receivable. One means of resolving the
impasse would be to deem an intangible claim to be located in the jurisdiction where the
grantor is located for the purposes of art 3102.
2. Determining the Location of the Assignor/Grantor

Under art 5(h) of the Receivables Convention, the assignor is presumed to be located at its
place of business or at his or her habitual residence in the rare case of an assignor without a
place of business. But what if the assignor is an enterprise with multiple places of business
or branches in different states? In such a case, it is necessary to designate one place of busi-
ness as controlling. Otherwise, the assignee’s priority status would be governed by multiple
and potentially conflicting priority regimes.
Two choices are possible: the de facto centre of the assignor’s business—that is, its chief
executive office or centre of administration—or its legal centre—that is, the place under
whose law it is constituted and where its registered “head office” is located.
From the point of view of the assignee, a registered head office or equivalent test pro-
vides greater certainty and predictability than one predicated on a firm’s administrative
centre. The former is easily ascertained by checking the public records of the state under
whose laws the entity was constituted. Locating the latter is a subjective and fact-dependent
exercise, which may give rise to interpretive difficulties on particular facts. Moreover, a
company’s administrative centre is more easily relocated and more prone to relocation than
its registered head office or place of incorporation.
The Receivables Convention nonetheless adopts a de facto centre of business test: under
art 5(h), an assignor with places of business in more than one state is deemed to be located
in the state where its central administration is exercised. This approach was thought to be
most appropriate for several reasons. First, the law of that jurisdiction is more likely to be in
the reasonable contemplation of assignees and creditors who enter into business dealings
with the assignor. Second, application of that law eliminates any incentive for assignors to
incorporate in an insolvency haven to the potential prejudice of its creditors. Relatedly, the
assignor’s real centre of administration is also the place where the principal insolvency pro-
ceedings involving the assignor are most likely to be commenced. This means that the law
of the insolvency forum will typically coincide with the substantive law applicable to prior-
ities, decreasing the costs of having to plead and prove a foreign law, and eliminating the
potential for conflict with the public policy of the insolvency forum.
The Convention approach is generally compatible with the approach currently taken by
the PPSAs to determining the location of a grantor/assignor for choice of law purposes: see
e.g. Ont PPSA, s 7(3). A grantor/assignor is deemed to be located at the debtor’s place of
business. A grantor who has no place of business is deemed to be located at his or her prin-
cipal residence. Where a grantor/assignor has a place of business in more than one jurisdic-
tion, it is deemed to be located in the jurisdiction where its chief executive office is located.
The concept of chief executive office refers to the place where the management of the
business is centred, as opposed to the head office specified in its corporate documents, and
is therefore close to the Convention’s “centre of administration” approach.
Under the Civil Code of Quebec, the place where the grantor is located is determined for
choice of law purposes by reference to the concept of domicile: see art 3105, para 1. In the
case of a natural person, domicile will generally equate with a person’s habitual residence,
assuming that this is intended to be his or her principal establishment: see art 75. However,
for legal persons, art 307 defines domicile as the place and address of its head office. In
practice, this is often referred to as the registered office test, in view of the fact that corpor-
ations are generally required to designate a head office in their publicly filed constitutive
documents.
When a financing transaction includes a connection to Quebec, the difference between
the current PPSA location rules and the Civil Code of Quebec approach may lead to a different
applicable law. For example, if a grantor/assignor maintains its registered office in Quebec and
its chief executive office in Ontario (or vice versa), a prudent secured creditor/assignee would
need to register, and interested third parties would need to conduct searches, in the registries
of both provinces. Moreover, since the priority effects of registration (or non-registration)
may be different under the PPSA and the Civil Code of Quebec, any priority dispute arising out
of the transaction may be decided differently depending on whether it is adjudicated before
the Ontario or Quebec courts.
Compared to the Code’s registered office location test, the PPSAs’ “chief executive office”
approach requires what may sometimes be a difficult factual determination as to where the
day-to-day decision-making of a business entity is centred. Where an entity appears to have
multiple centres of operation for different aspects of its business in different jurisdictions,
identification of the chief executive office may prove difficult and secured creditors/assignees
may have to take into account multiple possible locations.
In an effort to address the legal uncertainty and additional costs inherent in the concept
of chief executive office, new rules for determining the location of a grantor/assignor were
implemented in the Ont PPSA with effect from December 31, 2015: see Ont PPSA, s 7.2. Under
the new “bright-line” rules, a corporation, partnership, or other organization organized
under the law of a Canadian province or territory that requires its organization to be dis-
closed in a public record is deemed to be located in the province or territory under the laws
of which it is incorporated, continued, or amalgamated. Corporations organized under fed-
eral law are deemed to be located in the province or territory where the registered head
office of the corporation is located (1) as set out in the statute or instrument under which the
grantor was incorporated, or (2) as set out in the grantor’s bylaws if (1) does not apply.
A similar approach applies to an organization organized under the law of a state within
the United States or under an American federal law that requires its organization to be dis-
closed in a public record: the organization is deemed to be located in the state under whose
law it is organized or, in in the case of an organization organized under federal law, in the
state that federal law or the organization designates if federal law authorizes it to make a
designation, and otherwise in the District of Columbia. This aspect of the new Ontario rules
essentially replicates the grantor location rules for United States organizations set out in
art 9 of the Uniform Commercial Code (UCC) in the United States: see UCC §§9-307(e), (f), (h).
The amendments also introduce new location rules for partnerships that are not limited
partnerships. If the partnership agreement states that it is governed by the laws of a Canad-
ian province or territory, the partnership is deemed to be located in the designated province
or territory. In the absence of a designated law, the chief executive office rule applies. A simi-
lar location rule applies to trustees acting for a trust. If the trust instrument states that it is
governed by the laws of a province or territory of Canada, the trustees are deemed to be
located in that province or territory; in the absence of a governing law clause, the trustees
are deemed located in the jurisdiction where the administration of the trust is principally
carried out. It is unclear whether the reference to the place of principal administration here
denotes something different from the default chief executive office test.
The new rules may somewhat reduce but will not eliminate the existing uncertainty and
disharmony.
First, the Civil Code of Quebec’s registered office location rule applies to all legal persons,
whereas the new PPSA rules are limited to Canadian corporations and United States organ-
izations organized under Canadian and American law respectively. The residual chief execu-
tive office rule continues to apply to all other grantors/assignors. Presumably this limitation
was out of a concern with incorporations of convenience where the law under which the
entity is incorporated does not bear any real relationship with its actual business.
Second, while the Ontario amendments are sometimes presented as bringing the PPSAs
in line with UCC art 9, this is not quite accurate. UCC art 9 applies the chief executive office
test to corporations organized under non – United States law, including Canadian law: see
UCC §9-307(b)(3). Consequently, if there is any risk of litigation occurring in the United States,
registration of a security interest or outright assignment should continue to be made in the
state, province, or territory where a Canadian corporation has its chief executive office if this
is different from the location of its registered office.
Third, from the perspective of third parties, the new location rules for trustees and part-
nerships that are not limited partnerships lack transparency. While a potential secured
creditor or assignee usually will be given access to the partnership agreement or trust
VI. Investment Securities 835
instrument to determine what law governs, the same is not necessarily true for other third
parties who may lack leverage over the grantor/assignor, including its judgment creditors
and trustee in bankruptcy, whose rights are also governed by the law designated in the
agreement or instrument. Moreover, there is no equivalent to these rules in the Civil Code of
Quebec or UCC art 9. Consequently, they introduce a new source of disharmony in interprov
incial and cross-border dealings. To be safe, a prudent secured creditor/assignee will need to
continue to also take account of the law of the jurisdiction where the chief executive office
of the trustees or the partnership is located in transactions with factual connections to the
United States. For transactions with connections to Quebec, account will also need to be
taken of the law of the domicile of the trustees or partners. In addition, relative to either a
registered office or chief executive office test, a test that refers to the terms of the partnership
agreement or trust instrument is potentially less stable since it can more easily be changed.
Among the other PPSA jurisdictions, Saskatchewan and British Columbia have enacted
equivalent amendments and it is anticipated or at least hoped that these will be proclaimed
in force and that the other PPSA jurisdictions will follow suit in order to preserve uniformity
among the PPSA choice of law regimes. But even if the other PPSA jurisdictions move
quickly, transitional considerations are apt to complicate the determination of the applicable
law, where the location of the grantor/assignor is the relevant connecting factor, for some
years to come.
V. MONEY AND DOCUMENTARY INTANGIBLES

In line with the common law, the PPSAs extend the traditional lex situs rule applicable to tan-
gible movables to a security interest in money or in documentary intangibles—for example,
negotiable instruments such as cheques or promissory notes—where the secured creditor
is in possession of the collateral: see e.g. Ont PPSA, s 5(1). For non-possessory security inter-
ests in these types of assets, the law of the location of the grantor applies: see e.g. Ont PPSA,
s 7(1)(b). The Civil Code of Quebec adopts the same general approach: see arts 3102 and 3105.
This bifurcated approach poses potential difficulties if a non-possessory security interest
comes into conflict with the interest of a transferee or secured creditor who has taken pos-
session of the asset. If the priority rules of the two jurisdictions are not the same, which
should prevail? The statutes do not provide any express guidance in this scenario. However,
in principle, the law of the location of the asset at the time the competing claimant acquired
his or her interest in the asset should prevail on the theory that, where intangibles repre-
sented by a document are customarily transferred by delivery of the document, a person
taking delivery of the document would reasonably expect the lex situs to govern the propri-
etary status of his or her claim.
VI. INVESTMENT SECURITIES

A. Introduction
In Canada, the substantive and choice of law rules governing the holding, transfer, and grant
of security in investment securities have been codified in provincial legislation. In the com-
mon law provinces, the relevant rules are found in legislation modelled on the Uniform Securi-
ties Transfer Act and in complementary provisions in the PPSAs: see e.g. Securities Transfer Act,
2006, SO 2006, c 8, ss 44-46 [Ont STA]; Ont PPSA, s 7.1. The Uniform Securities Transfer Act—
and the complementary PPSA provisions—were prepared by the Canadian Securities
Administrators USTA Task Force and approved in 2004 by the Uniform Law Conference of
Canada. The reforms essentially duplicate arts 8 and 9 of the Uniform Commercial Code in the
United States in force in all states. On the background to the securities transfer legislation,
see Eric T Spink & Maxime A Paré, “The Uniform Securities Transfer Act: Globalized Commer-
cial Law for Canada” (2004) 19 Bus & Fin L Rev 321. On the applicability of the provincial
legislation to federally incorporated entities, see Poonam Puri & Gil Lan, “Who Needs Paper
Anymore? Rationalizing an Allocation of Government Responsibility for the Transfer of
Securities” (2007) 23 Bus & Fin L Rev 1.
Quebec has enacted substantively equivalent legislation. The securities transfer legislation
sets out the basic substantive framework for securities holding and transfer: see An act respect-
ing the transfer of securities and the establishment of security entitlements, CQLR c T-11.00. The
substantive rules governing the grant of security in investment assets are found in Book Six,
Prior Claims and Hypothecs, of the Civil Code of Quebec while the choice of law rules for both
the transfer and grant of security are set out in arts 3108.1 to 3108.8 of Book Ten.
The applicable conflicts rules vary depending on whether one is dealing with a “security”
or a so-called security entitlement.
B. Directly Held Securities

Under the securities transfer legislation, the concept of an investment “security” is conceived
in classical terms as consisting in the bundle of intangible rights traditionally enjoyed by the
holder of a security directly against the issuer. The validity of the security, the duties of the
issuer to a person claiming entitlement to a security, and the enforceability of the holder’s
rights against the issuer are governed by the law of the jurisdiction in which the issuer is
incorporated or otherwise constituted (or, if permitted by that law, by another law specified
by the issuer): see Ont STA, s 44; Civil Code of Quebec, arts 3108.1 to 3108.5.
The law applicable to priority contests between competing claimants to the same security
depends on whether the security is issued in certificated or uncertificated form. Certificated
securities are those represented by a paper certificate. Certificated securities as a matter of
substantive law can be transferred by delivery of the certificate with any necessary endorse-
ment: see Ont STA, s 68(1). At the choice of law level, this fact permits application of the
traditional lex situs rule. Accordingly, the law of the jurisdiction in which the security certifi-
cate is located at the time of its delivery determines whether a competing claim to the
security it represents may be asserted against a person to whom the security certificate is
delivered: see Ont STA, s 44; Civil Code of Quebec, art 3108.6.
Uncertificated securities are those in which title to the security is represented by an entry
on the issuer’s share register. Uncertificated securities as a matter of substantive law can be
transferred by entering the name of the transferee on the share register maintained by the
issuer or the issuer’s transfer agent or by the issuer entering into a “control agreement” with
the transferee in which the issuer agrees to comply with the transferee’s instructions with-
out the further consent of the registered holder: see Ont STA, s 68(2). At the choice of law
level, the law of the jurisdiction in which the issuer is incorporated or otherwise constituted
determines whether an adverse claim may be asserted against a person to whom the trans-
fer of a security is registered in the records of the issuer or who obtains control through a
VI. Investment Securities 837
control agreement. Alternatively, if permitted by the issuer’s law, the applicable law may be
another law specified by the issuer (such as the law of the state where the register is main-
tained): see Ont STA, ss 44(2)(d) and 44(3); Civil Code of Quebec, arts 3108.2(3) and 3108.3.
The choice of law rules governing the validity, perfection, and priority of a security inter-
est in a security parallel the choice of law rules governing the proprietary aspects of outright
transfers. For certificated securities, the applicable law is the law of the jurisdiction where
the certificate is located: see Ont PPSA, ss 7.1(1)(a) and (2)(a); Civil Code of Quebec, art 3108.8(1).
For uncertificated securities, the applicable law is the law of the jurisdiction under which the
issuer is constituted (or, if permitted by that law, the law specified by the issuer): see
Ont PPSA, ss 7.1(1)(b) and (2)(b); Civil Code of Quebec, art 3108.8(2). These general rules are
subject to two specific qualifications. The law of the jurisdiction in which the grantor is
located governs whether a security interest in a security is perfected by registration. The law
of the grantor’s location also determines whether a security interest granted by a broker or
securities intermediary is perfected automatically upon its creation: see Ont PPSA, s 7.1(5);
Civil Code of Quebec, art 3108.8(2).
C. Intermediated Securities (Security Entitlements)

Today, dealings in publicly traded securities are no longer primarily carried out by the trans-
fer of physical certificates or the recording of holders’ names in a register maintained by the
issuer. Instead, securities are held and transferred through electronic book credits and
debits in accounts maintained by tiers of intermediaries. In the intermediated system, an
investor’s interest in a security is recorded on the books of an intermediary, usually a licensed
broker or bank. The investor’s intermediary in turn will have its interests recorded on the
books of another intermediary and so on up to the last intermediary at the top of the chain,
usually a central securities depository such as the Canadian Depository for Securities Limited
(CDS) or the Depository Trust Company (DTC) in the United States. On the intermediated
holding system, see generally Spink & Paré, above; Rogers; Thévenoz; Paech.
Under the securities transfer statutes, an investor who has securities credited to an
account maintained with an intermediary does not acquire any property right in the under-
lying securities nor does it have any direct rights against the issuer of the security. Its interest
is instead limited to a “security entitlement” consisting of the bundle of intangible rights
specified by the legislation that may in general only be exercised against its securities inter-
mediary. The investor’s intermediary, in turn, has only a security entitlement against the
intermediary with whom it holds its account, and so on up the chain. The bundle of rights
that constitutes a security entitlement can be described as a property right in only a limited
sense—each account holder has an indirect or derivative pro rata interest in the holding of
its own, immediate intermediary, and then primarily only for the purpose of ensuring the
collective priority of all account holders in the event of the intermediary’s bankruptcy
against the intermediary’s creditors other than a secured creditor of the intermediary who
has obtained control: see Ont STA, part VI; see generally Spink & Paré, above; Puri & Lan,
above.
In line with the substantive concept of a security entitlement in the Ont STA, the choice
of law rules for issues relating to the validity, perfection, and priority of a security interest
granted in a security entitlement focus on intermediary-related connecting factors. The
applicable law is determined in the first instance by reference to the law chosen in the
account agreement between the intermediary and the holder of the security entitlement to
govern these issues or, if no law is designated, the law chosen by the parties to govern that
agreement. In the unusual event that no law is specified in the account agreement, the legis-
lation provides a cascading set of intermediary-centric rules for determining the applicable
law: see Ont PPSA, ss 7.1(1)(c) and (2)(c); Civil Code of Quebec, art 3108.8(3).
The same choice of law approach determines the law applicable to the following issues:
(1) the acquisition of a security entitlement from a securities intermediary; (2) the rights and
duties of the securities intermediary and the entitlement holder arising out of the security
entitlement; (3) whether the securities intermediary owes any duty to a person who has an
adverse claim to a security entitlement; and (4) whether an adverse claim may be asserted
against a person who acquires a security entitlement from the securities intermediary or
who acquires rights in a security entitlement from the entitlement holder: see Ont STA,
s 45(3); Civil Code of Quebec, art 3108.7.
The choice of law approach to security interests in investment property in the form of
security entitlements is further complicated by applying the law of the grantor’s location to
the issue of (1) whether a security interest in a security entitlement is perfected by registra-
tion and (2) whether a security interest granted by a securities intermediary is considered to
be perfected solely by the fact of its attachment: see Ont PPSA, s 7.1(5); Civil Code of Quebec,
arts 3108.8(3) and 3108.8, para 2. When these qualifications operate, the result is to split the
law governing the perfection of a security interest from that governing its validity and prior-
ity. This is unlikely to be problematic in the American and Canadian context in view of the
uniformity among all provinces, territories, and states of the substantive law applicable to
the transfer and grant of security interests in investment property. Difficult problems will be
encountered, however, in applying this approach if one or the other of the relevant connect-
ing factors points to the law of another country with a significantly different substantive law
framework for securities held through intermediaries rather than directly with the issuer.
D. Workability of a Global Choice of Law Approach to

Intermediated Securities?
The operation of the choice of law rules for security entitlements set out above poses a pre-
liminary difficulty of characterization. The concept of a security entitlement is a statutory
construct defined for the purposes of Canadian and American securities legislation as con-
sisting in the bundle of rights specified in that legislation: see e.g. Ont STA, s 1: “ ‘security
entitlement’ means the rights and property interest of an entitlement holder with respect to
a financial asset that are specified in Part VI.” However, legal systems outside Canada and the
United States may accord the account holder a very different set of substantive rights.
Indeed, the applicable law may not even conceptualize an account holder’s rights against its
intermediary as a category of asset distinct from the underlying securities: in some legal
systems, for example, the account owner is considered to own the underlying securities
credited to its account even though it may have to depend on its intermediary to exercise its
rights against the issuer. On the diverse national law frameworks governing the substantive
aspects of securities held with an intermediary, see Thévenoz; Paech; Micheler. Consequently,
for the choice of law rules to be workable, the concept of a security entitlement must be
understood generically to refer to the bundle of substantive rights held by an account
holder, the content and characterization of which is determined by the applicable law.
VII. Deposit Accounts with Financial Institutions 839
On this point, the Hague Securities Convention provides greater conceptual clarity: see the
Convention of 5 July 2006 on the Law Applicable to Certain Rights in Respect of Securities held with
an Intermediary. The Convention establishes a choice of law regime to deal with the propri-
etary aspects of securities credited to an account held with an intermediary. The applicable
law is determined in a manner broadly compatible with the approach in the Canadian stat-
utes. However, rather than using a term like “security entitlement” derived from a particular
substantive law framework, art 1 of the Convention employs the generic concept of “secur-
ities held with an intermediary” defined to mean the rights of an account holder resulting
from a credit of securities to a securities account. Article 2 then includes, among the issues
referred to the applicable law, “the legal nature and effects against the intermediary and
third parties” of the rights resulting from a credit or debit of securities to a securities account.
The Convention has not yet attracted sufficient support to enter into force. In the view of
some, a choice of law approach derived from the intermediary – account holder relationship
is workable only among jurisdictions like Canada and the United States in which the account
holder has rights only against its immediate intermediary and that intermediary’s own hold-
ings. For jurisdictions in which the account holder has a property interest in the underlying
securities or retains rights against the issuer, it is argued that the choice of law analysis would
instead require consideration of connecting factors related to the issuer and the underlying
securities: for an attempted rebuttal of that argument, see Rogers; for a persuasive analysis
showing that private international law cannot resolve the legal uncertainty inherent in the
holding and crediting and debiting of securities through accounts maintained by tiers of
intermediaries across multiple jurisdictions with incompatible domestic legal frameworks,
see Paech.
If a globally workable choice of law solution is infeasible, this leaves cross-border unifica-
tion of the substantive law as the only alternative. This is the ambitious goal of the UNIDROIT
Convention on Substantive Rules for Intermediated Securities (the Geneva Securities Conven-
tion), adopted in 2009, not yet in force. The Convention establishes a basic “functionalist”
legal framework for the intermediated securities holding system that is broadly compatible
with the American and Canadian securities transfer legislation: see further Thévenoz; Paech.
For an analysis of even more ambitious proposals to employ modern technology to replace
the intermediated system with a return to a framework in which investors’ rights are once
again based on a direct relationship with the issuer, see Micheler; Paech.
VII. DEPOSIT ACCOUNTS WITH FINANCIAL INSTITUTIONS

Funds deposited to a bank account are not set aside as belonging to the customer. Rather,
they become the property of the bank and are replaced by the obligation of the bank to pay
the equivalent amount to the customer. Thus, in general property law, a deposit account has
come to be characterized simply as a debt owed by the bank to its customer. It constitutes a
subspecies of pure intangible property since its value is not reified in any tangible document
capable of being negotiated, such as a cheque or a certificated security.
Consistent with this conceptualization, the general choice of law rules for intangible
movables addressed in Section IV of this chapter traditionally have also applied to deposit
accounts without distinction. However, the new substantive regime for security interests in
deposit accounts implemented in the Civil Code of Quebec in 2016 brought with it new choice
of law rules for security in this form of collateral. The new rules are broadly in line with the
existing PPSA and Code choice of law approaches to security interests in security entitle-
ments outlined above. Thus, as a general rule, the law governing the validity, perfection, and
priority of security in a deposit account is the law chosen by the parties in the agreement
governing the deposit as being the law applicable to these issues or, if no law is designated,
the law chosen by the parties as the law applicable to the deposit agreement. In the event
that no law may be determined on the basis of the account statement, the applicable law
is the law of the state in which the decision-making centre of the depository institution is
located. Publication of the security interest by registration is governed by the law of the
state in which the grantor is domiciled: see Civil Code of Quebec, art 3106.1.
The Quebec regime is broadly in line with the approach taken in art 9 of the Uniform
Commercial Code: see UCC §9-304. A principal aim of the new regime in both its substantive
and choice of law dimensions is to facilitate the use of “cash collateral” in the securities lend-
ing and derivatives markets. For the same reason, Ontario has designated the enactment of
a new regime for deposit accounts in its PPSA as a priority: see Ontario Ministry of Govern-
ment and Consumer Services, Business Law Agenda: Priority Findings and Recommendations
Report (June 2015). Consequently, commensurate changes to the PPSA substantive and
choice of law rules for deposit accounts are anticipated in the near future.
VIII. SELECTED BIBLIOGRAPHICAL REFERENCES

Batiffol, Henri. “Assignment (Cession de créance)” in Lectures on the Conflict of Laws and Inter-
national Contract: Delivered at the Summer Institute on International and Comparative Law,
University of Michigan Law School, August 5-20, 1949 (Buffalo, NY: William S. Hein, 1982).
Baxter, Ian. “Conflicts of Law and Property” (1964) 10 McGill LJ 1.
Bridge, Michael. “The Proprietary Aspects of Assignment and Choice of Law” (2009) 125 Law
Q Rev 671.
Carruthers, Janeen. The Transfer of Property in the Conflict of Laws (Oxford: Oxford University
Press, 2005).
Comment. “Multistate Accounts Receivable Financing: Conflicts in Context” (1958) 67 Yale LJ
402.
Cuming, Ronald, Catherine Walsh & Roderick Wood. Personal Property Security Law, 2nd ed
(Toronto: Irwin, 2012).
Deschamps, Michel J & Catherine Walsh. “United Nations Convention on the Assignment of
Receivables in International Trade: Pre-Implementation Report” in Uniform Law Confer-
ence of Canada, Annual Proceedings, Civil Section Documents (2005), online: <http://
www.ulcc.ca>.
Falconbridge, John Delatre. “Contract and Conveyance in the Conflict of Laws: Part II” (1933)
81 U Penn L Rev 817.
Forsyth, Christopher. “Certainty Versus Uniformity: Renvoi in the Context of Movable Prop-
erty” (2010) 6 J Priv Intl L 637.
Garcimartín Alférez, FJ. “Assignment of Claims in the Rome I Regulation: Article 14” in Franco
Ferrari and Stefan Leible, eds, Rome I Regulation: The Law Applicable to Contractual Obliga-
tions in Europe (Berlin: Sellier de Gruyter, 2009).
Goode, Roy. “The Assignment of Pure Intangibles in the Conflict of Laws” [2015] LMCLQ 289.
Hartley, Trevor C. “Choice of Law Regarding the Voluntary Assignment of Receivables” (2011)
60 ICLQ 29.
Kieninger, Eva-Maria & Sigman, Harry C. “The Law of Assignment of Receivables: In Flux, Still
Uncertain, Still Non-Uniform” in Harry C Sigman & Eva-Maria Kieninger, eds, Cross-Border
Security Over Receivables (Berlin: Sellier de Gruyter, 2009).
Micheler, Eva. “Intermediated Securities and Legal Certainty,” LSE Legal Studies Working
Paper 3/2014, online: <http://ssrn.com/abstract=2336889>.
Moshinsky, Mark. “The Assignment of Debt in the Conflict of Laws” (1992) 109 Law Q Rev 591.
Ooi, Maisie. “Intermediated Securities: The Choice of a Choice of Law Rule” in Louise Gullifer
& Jennifer Payne, eds, Intermediated Securities: Legal Problems and Practical Issues (Oxford:
Hart, 2010).
Paech, Philipp. “Market Needs as Paradigm: Breaking Up the Thinking on EU Securities Law”
in Pierre-Henri Conac, Ulrich Segna & Luc Thévenoz, eds, Intermediated Securities (Cam-
bridge: Cambridge University Press, 2013).
Rogers, James Steven. “Conflict of Laws for Transactions in Securities Held Through Inter-
mediaries” (2006) 39 Cornell Intl LJ 285.
Struycken, Teun HD. “The Proprietary Aspects of International Assignment of Debts and the
Rome Convention, Article 12” (1998) 24 LMCLQ 345.
Thévenoz, Luc. “Intermediated Securities, Legal Risk, and the International Harmonisation of
Commercial Law” (2008) 13 Stan JL Bus & Fin 384.
Walsh, Catherine. “Receivables Financing and the Conflict of Laws: The UNCITRAL Draft
Convention on the Assignment of Receivables in International Trade” (2001) 106 Dickin-
son L Rev 159.
Weintraub, Russell. “An Inquiry into the Utility of ‘Situs’ as a Concept in Conflicts Analysis”
(1966) 52 Cornell L Rev 1.
Wolff, Martin. Private International Law, 2nd ed (Oxford: Clarendon, 1950) 502-76.
CHAPTER SIXTEEN
Succession
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843
II. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844
A. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 845
B. Distinction Between Administration and Succession . . . . . . . . . . . . . . . . . . . . . . . . 848
C. Recognition of Foreign Personal Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . 857
III. Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867
A. Jurisdiction and Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868
B. Intestate Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875
C. Testate Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 879
1. Formal Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880
2. Essential Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881
3. Personal Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883
4. Interpretation or Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 884
5. Revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890
IV. Dependants’ Relief Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894
V. The Claims of Foreign States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
I. INTRODUCTION
In common law jurisdictions, a person’s property, apart from some significant exceptions
such as jointly owned property, life insurance, and pension proceeds, passes upon death to
a personal representative appointed or formally recognized by the courts. The role of the
personal representative is to gather in the deceased’s property, pay off his or her debts, and
distribute the balance to those beneficially entitled. The personal representative is the only
person entitled to deal with the deceased’s property. The personal representative is called
an executor if he or she is appointed by the deceased in a will and an administrator if he or
she is appointed by the courts. However, in either case, the personal representative is not
entitled to act until he or she has received a grant from the court. The court grants probate
to an executor appointed in a will and grants letters of administration in other situations—
where no executor has been named in the will, where the named executor is unable or unwill-
ing to act, or where the deceased died intestate. The grant is made in solemn form if made
in contested proceedings and in common form if the application for the grant is unopposed.
Some provinces have modernized some of the archaic language used in this area of the
law. For example, as of January 1, 1995, this language has been replaced in the Ontario Rules
of Civil Procedure and forms (but not the Ontario legislation) with “plain” language. A personal
843
844 Chapter 16 Succession
representative is now called an “estate trustee” and the grant of probate or grant of letters
of administration is now a “certificate of appointment of estate trustee with (or without) a will.”
This manner of distributing property upon death tends to compound the potential con-
flict of laws issues, since the office and function of the personal representative are treated
separately from questions relating to the ultimate entitlement to the deceased’s property. In
other words, the courts distinguish between administration and succession. In very general
terms, questions of administration are governed by the law of the country that appointed
the personal representative, and that appointment is based on the location of the deceased
person’s assets. In similarly general terms, questions of succession to movable property are
governed by the last domicile of the deceased person, and questions of succession to immov-
able property are governed by the lex situs. For the most part, the conflicts rules relating to
administration and succession are several decades old and there are few recent leading cases.
II. ADMINISTRATION
The Canadian common law provinces now have comprehensive legislation governing the
appointment and function of personal representatives. This legislation is based on historical
principles that devolved from the venue requirements of the Ecclesiastical Courts in England
(the courts that administered the movable property of deceased persons until the 19th
century). Essentially, these courts acted on a strict territorial basis, requiring the separate
administration of local assets in each ecclesiastical province. The existence of local assets
was a precondition for a local grant that operated only within the province. For some time
after the administration of estates was transferred to the common law courts, the existence
of local assets was necessary to enable the court to grant probate or letters of administra-
tion. Hence, the location of assets was of fundamental importance. It was relatively easy to
locate tangible property, but the courts had to develop rules to determine the location of
intangible property for this purpose. Moreover, the local asset requirement occasionally
threatened to lead to an impasse if foreign jurisdictions, where assets were located, required
a grant from the deceased’s domicile or residence.
The court’s jurisdiction has since been expanded. In the United Kingdom, this happened
under the Administration of Justice Act, 1932, s 2. The modern provincial statutes usually
authorize the making of a grant notwithstanding that the deceased left no local assets. How-
ever, since the existence of local assets remains a sufficient basis for jurisdiction, the case law
on locating intangible property remains relevant.
Although the modern legislation has expanded the jurisdiction of the courts to make a
grant, the effect of the grant is still local in character. There is still the need for separate
administration, according to local law, in each jurisdiction where assets are located.
While the common law required the separate administration of an estate in each jurisdic-
tion where assets were located and refused to recognize the authority of a foreign personal
representative without a local grant, there were (and are) various practices that help to
coordinate these separate administrations. These practices recognize the primacy of the last
domicile of the deceased person. For instance, a local grant will normally be made to a rep-
resentative who has been appointed by the appropriate authority in the country in which
the deceased was last domiciled. The local (or ancillary) representative is normally required to
collect and safeguard local assets, pay off creditors, and turn over the balance to the domi-
ciliary (or principal) representative for distribution to those beneficially entitled to the estate.
II. Administration 845
Moreover, if a dispute arises concerning entitlement to the estate, the courts will attempt to
avoid multiple and conflicting proceedings by invoking modern rules for declining local
jurisdiction and staying foreign actions. In applying these rules, central importance will be
attached to the last domicile of the deceased.
The modern provincial statutes have also adopted the British practice of allowing the
“resealing” of certain foreign grants made by reciprocating states (largely those within the
Commonwealth). This practice, under which a foreign grant is given a local confirmation,
may reduce the documentation required in an uncontested application but the advantages
of this procedure over an application for an ancillary grant are not otherwise obvious.
In spite of these attempts to coordinate the administration of estates, multiple proceed-
ings are still required and completely uniform treatment of the estate in all jurisdictions is
not always achieved. This is primarily due to the fact that the rules of administration are not
uniform and in each jurisdiction the representative is required to administer according to
local rules. In addition, the courts’ refusal to enforce the revenue laws of a foreign state
(discussed in Chapter 4) may also lead to differences.
The advantage of a more unified administration of estates under the supervision of a
single judicial authority led several countries to sign the Convention of 2 October 1973 Con-
cerning the International Administration of the Estates of Deceased Persons, which was pre-
pared by the Hague Conference. The Convention provides for the issuing of an international
certificate designating the person entitled to administer the movable property of a
deceased person and indicating his or her powers. The certificate is to be issued by the
competent authority in the state of the last habitual residence of the deceased and will be
recognized by other states, although such recognition can be made dependent on either
(1) a determination by a local authority following an expeditious procedure, or (2) publica-
tion. Moreover, art 21 of the Convention allows other states to subject the holder of the
certificate to the same local supervision and control as that applicable to local representa-
tives. Given the Convention’s vagueness about the amount of local reservation that is per-
mitted, it creates more of a discretionary than a mandatory scheme and its effect in practice
may depend on the willingness of ratifying states to give up local supervision and control.
The Convention has not yet been signed or ratified by Canada.
A. Jurisdiction
The provisions below are examples from Ontario law setting out the court’s jurisdiction to
appoint a personal representative. Note how s 7 of the Estates Act allocates jurisdiction, and
how the Ontario Rules of Civil Procedure provide for two ways that foreign personal repre-
sentatives can acquire authority to act under local law.
Estates Administration Act

RSO 1990, c E.22
2(1) All real and personal property that is vested in a person without a right in any
other persons to take by survivorship, on the person’s death, whether testate or intestate
and despite any testamentary disposition, devolves to and becomes vested in his or her
personal representative from time to time as trustee for the persons by law beneficially
entitled thereto, and, subject to the payment of the person’s debts and so far as such prop-
erty is not disposed of by deed, will, contract or other effectual disposition, it shall be
administered, dealt with and distributed as if it were personal property not so disposed of.
(2) This section applies to property over which a person executes by will a general
power of appointment as if it were property vested in the person.
Estates Act
RSO 1990, c E.21
5. Letters of administration shall not be granted to a person not residing in Ontario,

but this does not apply to resealing letters under section 52.
• • •
7(1) An application for a grant of probate or letters of administration shall be made

to the Superior Court of Justice and shall be filed in the office for the county or district
in which the testator or intestate had at the time of death a fixed place of abode.
(2) If the testator or intestate had no fixed place of abode in Ontario or resided out of
Ontario at the time of death, the application shall be filed in the office for the county or
district in which the testator or intestate had property at the time of death.
(3) In other cases the application for probate or letters of administration may be filed
in any office.
• • •
52(1) Where probate or letters of administration or other legal document purporting

to be of the same nature granted by a court of competent jurisdiction in the United
Kingdom or in a province or territory of Canada or in any British possession is produced
to and a copy thereof deposited with a registrar of the Superior Court of Justice and the
amount required by the Estate Administration Tax Act, 1998 is deposited with an officer
of the court as on a grant of probate or administration, the probate or letters of adminis-
tration or other document shall, under the direction of the judge, be sealed with the seal
of the Superior Court of Justice, and thereupon is of the like force and effect in Ontario
as if the same had been originally granted by the Superior Court of Justice, and is, so far
as regards Ontario, subject to any order made by such court, or on appeal therefrom, as
if the probate or letters of administration had been granted thereby.
(2) Letters of verification issued in the Province of Quebec shall be deemed to be a
probate within the meaning of this section.
(3) The letters of administration shall not be sealed with the seal of the Superior Court
of Justice until a certificate has been filed under the hand of the registrar of the court that
issued the letters that security has been given in such court in a sum of sufficient amount
to cover as well the assets within the jurisdiction of such court as the assets within Ontario,
or in the absence of such certificate, until like security is given to the judge of the Superior
Court of Justice covering the assets in Ontario as in the case of granting original letters
of administration.
Ontario Rules of Civil Procedure

RRO 1990, Reg 194, Rule 74.08
Confirmation by Resealing of Appointment of

Estate Trustee With or Without a Will
(1) An application for confirmation by resealing of the appointment of an estate
trustee with or without a will that was granted by a court of competent jurisdiction in the
United Kingdom, in a province or territory of Canada or in any British possession (Form
74.27) shall be accompanied by,
(a) two certified copies of the document under the seal of the court that granted
it, or the original document and one certified copy under the seal of the court that
granted it;
(b) the security required by the Estates Act; and
(c) such additional or other material as the court directs.
(2) A confirmation by resealing of the appointment of an estate trustee with or without
a will shall be in Form 74.28.
Ontario Rules of Civil Procedure

RRO 1990, Reg 194, Rule 74.09
Certificate of Ancillary Appointment of Estate Trustee With a Will

(1) An application for a certificate of ancillary appointment of an estate trustee with
a will where the applicant has been appointed by a court having jurisdiction outside
Ontario, other than a jurisdiction referred to in rule 74.08, (Form 74.27) shall be accom-
panied by,
(a) two certified copies of the document under the seal of the court that granted
it;
(b) the security required by the Estates Act; and
(c) such additional or other material as the court directs.
(2) A certificate of ancillary appointment of an estate trustee with a will shall be in
Form 74.29.
NOTE
There appears to be little practical difference between resealing and an ancillary grant in
Ontario. However, a person not residing in Ontario can apply only for resealing, not an ancil-
lary grant, of foreign letters of administration: see the Estates Act, s 5. This means, for
example, that a United States resident, with a grant from an American court, could not apply
for resealing (not falling within s 52(1) of the Estates Act) and could only apply for an ancillary
grant if the original grant was one of probate rather than letters of administration. There
may be other differences in other provinces.
B. Distinction Between Administration and Succession

The administration of an estate is governed exclusively by the law of the country from which
the personal representative derives his or her authority. A provincial personal representative
must administer an estate according to the law of the province from which he or she obtains
the grant, whether the administration is principal or ancillary.
Re Kloebe
(1884), 28 Ch D 175
[This action involved the administration of the estate in England of an intestate who died
domiciled in Greece. The deceased carried on business in England and his only assets
were situated in England. The deceased died insolvent owing debts to both English and
foreign creditors.]
PEARSON J:
At the end of the argument I stated I had no doubt what my decision should be, but
in consequence of my being told that there were decisions of learned judges to whom I
am bound to pay, and do pay, the greatest respect, who had supported a contrary conten-
tion, I thought it better to look at those judgments to see if they really supported that
contention, and I am glad to find that they do not. It appeared to me, if that contention
had anything in it, it must have been the practice of the court to inquire in actions for the
administration of deceased persons domiciled abroad as to the nationality of creditors,
and I can find no case in which the court in distributing assets has made an inquiry as to
the nationality of different creditors, or ordered that English creditors should be paid in
priority to others. There is not a fragment of authority for such a practice. I think Mr.
Westlake in a passage cited lays down the law perfectly correctly. In sect. 102 of the last
edition of his work on Private International Law, he says: “Every administrator, principal
or ancillary, must apply the assets reduced into possession under his grant in paying all
the debts of the deceased, whether contracted in the jurisdiction from which the grant
issued or out of it, and whether owing to creditors domiciled or resident in that jurisdic-
tion or out of it, in that order of priority which according to the nature of the debts or of
the assets is prescribed by the laws of the jurisdiction from which the grant issued.” All
that is there said, and no doubt correctly, is that although mobilia sequuntur personam,
in the collection, the lex fori must be observed: so also is it to be observed in the admin-
istration of those assets when collected. Therefore, if a man dies domiciled in England,
possessing assets in France, the French assets must be collected in France, and distributed
according to the law of France. If the French creditors are entitled according to that law
to be paid in priority, that rule must be observed, because it is the lex fori, and for no other
reason. But if it should happen that a man died domiciled in France, leaving assets in
England, those assets can only be collected under an English grant of administration, and
being so collected must be distributed according to the law of England. No doubt in a
case in which French assets were distributed so as to give French creditors, as such, prior-
ity, in distributing the English assets the court would be astute to equalize the payments,
and take care that no French creditors should come in and receive anything till the English
creditors had been paid a proportionate amount. But subject to that, which is for the
purpose of doing what is equal and just to all the creditors, I know of no law under which
the English creditors are to be preferred to foreigners. On the other hand the rule is they
are all to be treated equally, subject to what priorities the law may give them, from what-
ever part of the world they come, and in the case cited by Mr. Cookson of De La Vega v.
Vianna [(1830), 1 B & Ad 284], Lord Tenterden says [at 288]: “A person suing in this
country must take the law as he finds it; he cannot, by virtue of any regulation in his own
country, enjoy greater advantages than other suitors here, and he ought not therefore to
be deprived of any superior advantage which the law of this country may confer. He is to
have the same rights which all the subjects of this kingdom are entitled to.” And that has
been the rule in this country, as far as I know, from the earliest time. …
[T]he law of England has always been that you must enforce claims in this country
according to the practice and rules of our courts, and according to them a creditor,
whether from the furthest north or the furthest south, is entitled to be paid equally with
other creditors in the same class. I must refuse to alter that which has always been the law
of this country, and which I must say, for the sake of honesty, I hope will always be the
law of this country. …
NOTES
1. In Re Kloebe the court decided that both English and foreign creditors could claim
against the estate assets located in England and that they would be treated equally accord-
ing to English law. This suggests that the priority of creditors is a matter of administration.
What does the court mean when it refers to assets being “distributed”? What is the essential
difference between questions concerning the priority of creditors and questions concerning
the priority of beneficiaries?
2. In Re Kloebe the court stated that if any creditor receives priority in a foreign adminis-
tration, the English court should defer the claim of that creditor until other local creditors
have been paid a proportionate amount. The example discussed in the case suggests a for-
eign priority system based on parochial or nationalistic grounds. What if the foreign prior-
ities are less obviously contrary to the English court’s sense of fair play or public policy? If the
courts of each jurisdiction try to compensate for the actions of the other, does the ultimate
distribution depend on which court goes first, or is there an impasse?
Re Wilks
[1935] Ch 645
FARWELL J:
This summons raises a curious question which seems at present to be free from author-
ity as to the powers of administrators in this country over property in England of persons
who died domiciled abroad.
In this case the deceased was possessed of property in various parts of the world and
was admittedly domiciled in Ontario, Canada. He left wills dealing with his property
abroad, but he omitted to make a will dealing with his English estate, and, accordingly,
letters of administration have been granted to the plaintiff and the first defendant in this
country. Their duty is to administer the estate according to the law of this country; but
in distributing the estate among the beneficiaries the rights of the parties must be gov-
erned by the law of the domicil. In the present case the testator’s property in this country
consisted, amongst other things, of a considerable holding of shares in a private company.
The shares are by no means readily saleable and the legal personal representatives are
anxious, if they can properly do so, to postpone the sale of the shares for the present. The
persons entitled to the testator’s property in this country, according to the law of Ontario,
are the widow, who is entitled to one-third, and the children, all of whom are infants.
According to the law of the domicil it would not be possible for the administrators in that
country to retain these shares on behalf of the infants: they would be bound, according
to that law, to sell them at once. If, therefore, having once paid all the debts and other
administration expenses the administrators in this country have ceased to have any
administrative duties beyond distributing the property among the persons entitled,
according to the law of Ontario, it must follow that the rights of those parties must be
regulated by the law of the domicil, in which case these shares must be sold. The question,
therefore, is at what point the administrators cease to administer the estate in this country
and become trustees for the purpose of distributing the estate amongst the persons
interested. So long as they are performing the duties of administrators their powers and
rights are to be found in the Administration of Estates Act, 1925. If, on the other hand,
their only duty is to distribute the estate amongst the persons entitled, according to the
law of the domicil, then the powers which are given to them as administrators under the
Act can no longer avail. Part III of the Administration of Estates Act, 1925, consisting of
ss. 32 to 44, is headed “Administration of Assets,” and the Fourth Part of the Act is headed
“Distribution of Residuary Estate.” So that it would look as though the intention of the
legislature was to include in Part III all those duties which fall to an administrator and in
Part IV to deal with the rights of the parties as to distribution of the assets after the
administration has been completed. In Part III, which is the part which deals with the
administration of assets, s. 33, sub-s. 1, provides …
[Farwell J quoted s 33(1), which provides that the personal representatives have power to
postpone the sale and conversion of assets for such period as they may think proper.
Farwell J then quoted the rest of s 33.]
It is noticeable that that section appears to deal with a case of an infant becoming
absolutely entitled on an intestacy of a person dying after the Act of 1925. If that section
deals only with persons domiciled in this country, it seems to be a curious provision,
because under the Act it is no longer possible for an infant to become absolutely entitled
on the intestacy of a person domiciled in this country, since the Act itself makes an infant’s
interest contingent upon his attaining twenty-one or marrying; therefore it looks as
though this section is contemplating an intestacy in the case of a person dying domiciled
abroad. Whether that be so or not, and I do not propose to found my judgment on that
proposition, it appears to me that this is a matter of administration and that the admin-
istrators are entitled to exercise the power of postponement which is given them by the
Act. They have in their hands money which, no doubt, is the property of the infants, but
in respect of which they can get no receipt from the infants because they are still infants.
I think that it would be possible for them under s. 42 to appoint a trustee for the infants,
and that they could do as administrators. Equally, in my judgment, it is open to them as

administrators to exercise the powers to postpone the sale which they are given by s. 33,
and until they can distribute the estate by handing over the proceeds or the property to
persons who can give them a good receipt for it they are trustees, but trustees holding the
property in their character as administrators and having, therefore, the powers which are
given to administrators under s. 33 of the Administration of Estates Act, 1925. The power
to postpone given by the Act is a power given to administrators and, in my judgment, it
is exercisable over the assets which are in this country until the administrators can get a
good discharge for the money in their hands from the persons who are beneficially entitled
to it. I propose to make a declaration to that effect.
NOTES
1. Apart from asserting that the question is one of administration, does the court in Re
Wilks provide any principle or test to determine what is a question of administration?
2. In Re Kehr, [1951] 2 All ER 812 (Ch D), an intestate domiciled in Germany left property in
England. He was survived by a wife and son. Personal representatives were appointed in
England and they applied to the court to determine whether they could appoint trustees of
the infant son’s property with authority to apply the income and capital for the infant’s
maintenance. The court held that the appointment of such trustees and their authority to
maintain the infant were matters of administration and governed by English law.
Re Lorillard
[1922] 2 Ch 638 (CA)
LORD STERNDALE MR:

This is an unusual question arising in certain administration proceedings in this coun-
try and in the United States of America. It seems to me to be entirely a matter of discretion,
and I do not see my way to differ from the decision of Eve J. The testator, who was domi-
ciled in America, died in this country. Administration proceedings are going on both in
America and in England. In England there are no debts. There are debts in America which
according to English law are statute barred, but not so according to the law of New York.
If claims in respect of these debts had been made here they would rightly have been
rejected. The English administrator asked for the directions of the court as to what course
he ought to pursue. For the beneficiaries in England it was contended that the American
creditors were completely barred, the debts being over twenty years old. For the creditors
in New York it was contended that as the testator was at the time of his death domiciled
there the American administration was the principal proceeding to which the English
administration was merely ancillary, and that accordingly the applicant as administrator
in New York was entitled to receive the surplus assets in England remaining after the
satisfaction of the testator’s debts in order that they might be applied in paying the debts
of bona fide creditors in any part of the world and for this purpose they ought to be
transferred to America. The authorities do not throw much light upon the question as to
the duty of the English administrator. It would seem to be his duty to see that the debts
are paid—i.e., debts which are due according to English law. Eve J has made an order
giving the American creditors a period of two months within which to bring in their
claims in this country, and intimating that if they did not do so the surplus assets would
be distributed among the beneficiaries. The American creditors, however, did not present
their claims, presumably knowing that if they did so they would be rejected. It is argued
that it is still the duty of the English administrator to transfer the moneys in his hands to
the American administrator. I cannot see any principle under which it is necessary for
the English court in such circumstances to order the administrator here to hand over the
surplus assets to the American administrator. No authority has been cited in favour of
such a course, and I cannot say that Eve J has wrongly exercised his discretion in the
matter. The appeal must therefore be dismissed.
[Warrington and Younger LJJ delivered judgments to the same effect.]
Appeal dismissed.
NOTES
1. Leaving aside issues arising upon death, what would happen if a debt were statute-
barred in one country and not in another? Could you obtain a judgment in the jurisdiction
where the action was not barred and then try to enforce that judgment where an action on
the original debt was barred? Are similar tactics available to creditors in Re Lorillard? Could
the creditors get recognition of a New York judgment, or would the English court recognize
the judgment as only affecting New York assets?
2. Re Lorillard can be contrasted with Re Donnelly (1911), 2 OWN 1388 (H Ct J), in which the
court held that the administrator in an ancillary jurisdiction must remit local assets (once
local creditors are paid) to the principal administrator without considering how those assets
would then be allocated. Which approach do you prefer? See also Re Achillopoulos, [1928]
Ch 433 and In the Estate of Weiss, [1962] P 136.
Jewish National Fund Inc v Royal Trust Co

[1965] SCR 784
JUDSON J (Spence J concurring) (dissenting):

The testator left his residuary estate to be used by the trustees of the Jewish National
Fund Inc., New York, as a continuing and separate trust for the purchase of the best lands
available in Palestine, the United States of America or any British Dominion, and the
establishment thereon of a Jewish colony or colonies, the land to be rented on such terms
as might be decided on by the Jewish National Fund and the proceeds of the rentals to be
used for the purchase of further lands on the basis outlined above. It was also provided
that the receipt of the monies by the Jewish National Fund from the Royal Trust Co. (the
executor and trustee under the will) was to release them from any further responsibility.
• • •
The Jewish National Fund is a corporation which was incorporated in 1926 under the
laws of the state of New York. Its principal objects are to collect gifts to be devoted to the
purchase of land in Palestine for the purpose of promoting and furthering the religious,
cultural, physical, social, agricultural and general welfare of Jewish settlers and inhabitants
of Palestine now or hereafter residing there, and to aid, encourage and promote the
development of Jewish life in Palestine. There is evidence in the record that a gift to this
corporation would be recognized as a valid charitable gift under the laws of the state of
New York.
• • •
CARTWRIGHT J (Martland and Ritchie JJ concurring):

… The validity of the residuary bequest having been questioned by some of the next
of kin, the executor applied to the court by way of originating notice to have the matter
determined.
In the courts below it was the contention of the next of kin that the residuary clause
was void for uncertainty and alternatively that it created a perpetual trust which was not
charitable and therefore void. For the appellant it was argued that the residuary bequest
constituted an absolute gift to it and alternatively that it was not void for uncertainty and
created a good charitable trust.
After stating these submissions, Lett CJBC continued as follows (43 DLR (2d) at p. 419):
There was no suggestion in argument that the construction of the will is governed by any
law other than that of British Columbia, since the testator was domiciled in this Province
prior to and at the time of his death. No argument was advanced on any question relating
to the conflict of laws.
In this court, in addition to the grounds on which it had relied below, the appellant,
for the first time, took the position (i) that in the law of British Columbia the rule against
perpetuities is one based on considerations of internal policy and does not apply to
invalidate a trust of movables created by a testator domiciled in British Columbia if the
trust is to be administered outside that province, (ii) that the trust created by the residuary
clause is to be administered in the state of New York, (iii) that the question before us
should be determined according to the law of that state, and (iv) that by that law the trust
is charitable and valid.
In my opinion, the argument that there was an absolute gift to the appellant cannot be
supported; it was rejected by each of the members of the Court of Appeal and there is
nothing that I can usefully add to their reasons on this point.
If the question is to be determined in accordance with the law of British Columbia I
agree with the conclusion of the Court of Appeal that the residuary clause does not require
the trustees to devote the fund or its proceeds to purposes which are charitable in law
and that the trust is void as offending the rule against perpetuities. On this branch of the
matter I am content to adopt the reasons of Davey JA.
Turning now to the appellant’s argument summarized above which was advanced for
the first time in this court it would seem that prima facie the applicable law is that of
British Columbia.
• • •
For the purposes of this appeal I am prepared to assume, without finally deciding, that
if the testator had directed that his residuary estate be paid to the appellant to be used by
its trustees for the purchase of a tract or tracts of the best land obtainable in the state of
New York to be held for the purposes set out in the residuary clause the validity of the
clause should be determined by the law of the state of New York, and it would have been
necessary to consider whether that law has been sufficiently proved.
But this is not what the testator has done. He has given to the trustees the choice of
purchasing lands in Palestine, the United States of America or any British Dominion. I
have already indicated my agreement with the conclusion of the Court of Appeal that if
the applicable law is that of British Columbia the bequest is invalid. Unless the contrary
is alleged and proved the presumption is that the law of all the other countries in which
the trustees might decide to purchase is the same as that of British Columbia. It seems to
me that a trust of movables void under the law of the testator’s domicile and under that
of many other countries in which the trustees are authorized to carry it out cannot be
rendered valid by the circumstance that the trustees are permitted, but not required, to
carry it out in a country in which it would be regarded as valid. To hold otherwise would,
in my opinion, be an extension of the exception to the general rule, that the essential
validity of a gift of movables is to be determined by the law of the testator’s domicile,
unwarranted by the two cases of Fordyce v. Bridges (1848), 2 Ph. 497, 41 ER 1035 and Re
Mitchner, [1922] St. R Qd. 252, which were chiefly relied on in support of the appellant’s
argument. Such an extension does not appear to me to be justified by any decision to
which we have been referred. It would be productive of inconvenience and uncertainty
and would be inconsistent with the underlying rule that a trust is not a valid charitable
trust unless the trustees are obligated, not merely permitted, to devote the trust funds to
a purpose which is charitable in law.
I agree with the submission of counsel for the next of kin that in the circumstances of
this case “the place of administration” of the trust would be the country in which the lands
were purchased and managed and that the place of residence of the trustees would be
irrelevant. I find nothing in the two cases last referred to which is contrary to this view.
In Fordyce v. Bridges, supra, it would seem from the report that the testator was domi-
ciled in England, that the trustees resided there and that the personal estate was situate
there. By the will the trustees were given a discretion to invest the personal estate either
in the purchase of lands in England on specified limitations which were valid by the law
of England or in the purchase of lands in Scotland in a regular Scotch entail the limitations
of which were valid by the law of Scotland but would have been void as a perpetuity by
the law of England. It was held that the personal estate could be validly invested in the
purchase of lands in Scotland. It was the law of the situs of the lands purchased that
governed not the law of the residence of the trustees. The will did not give the trustees
any power to invest the personal estate in the purchase of lands in England subject to the
limitations of a regular Scotch entail, which purchase would have been invalid by the law
of England. In the case at bar, the trustees in New York are authorized to purchase lands
in British Columbia on trusts invalid by the law of that province.
In Re Mitchner, supra, the testator, domiciled in Queensland, directed his executors to
pay part of his residuary trust funds to named persons in Germany who were to deal with
such funds on certain trusts. The Supreme Court of Queensland held that this direction
was void as offending the rule against perpetuities; see Re Mitchner, [1922] St. R Qd. 39.
This decision was varied by the High Court of Australia by a judgment which declared
that the gifts did not infringe the law against perpetuities and referred the questions back
to the Supreme Court. What occurred at the second hearing in the Supreme Court is
summarized in the headnote at p. 253 as follows:
Held, that the bequest was a valid bequest according to Queensland law; but that the Court
would not pronounce finally on its validity until informed whether it was practical to give
effect in Germany to the trusts declared, and whether the law of Germany would allow them
to be carried into effect, because if they could not be carried into effect in Germany, the
Queensland Court could not administer cy-près, and the bequest would fail.
It would appear that the law first applied was that of the testator’s domicile which governed
subject to ascertaining that the trusts could be lawfully carried out in Germany.
To hold that the validity of a trust of personalty to be laid out in the purchase of land
created by the will of a testator should be determined not by the law of his domicile or by
the law of the situs of the land directed to be purchased (or perhaps by application of
both) but by the law of the residence or the domicile of the trustee appointed to make the
purchase would, in my opinion, be contrary to authority and productive of uncertainty
and inconvenience in the administration of estates. What, it may be asked, would be the
result if the trustee at the date of the testator’s death resided in a jurisdiction by the laws
of which the trust was invalid and a year later moved into a jurisdiction by the laws of
which the trust was valid? The difficulty suggested by this question is only one of several
which would result from attaching importance to the residence or domicile of the trustee.
While that case was in no way concerned with the geographical location of the trustee
or with the conflict of laws, the following words used by Lord Macnaghten in Dunne v.
Byrne, [1912] AC 407 at p. 410, appear to me to be appropriate:
It is difficult to see on what principle a trust expressed in plain language, whether the words
used be sufficient or insufficient to satisfy the requirements of the law, can be modified or
limited in its scope by reference to the position or character of the trustee.
For the above reasons I would reject this argument of the appellant, even on the
assumption that it has been proved that the trust created by the residuary clause would
have been regarded as a valid charitable trust under the law of the state of New York. This
renders it unnecessary for me to decide whether the law of New York was sufficiently
proved. It also becomes unnecessary for me to consider the argument of the respondents,
which found favour with Lett CJBC, that the trust was void for uncertainty and I express
no opinion upon it.
In the result I would dismiss the appeal but would direct that the costs of all parties in
this court, those of the executor as between solicitor and client, be paid out of the residu-
ary estate of the testator.
JUDSON J (Spence J concurring) (dissenting):

The next of kin say that the law of the state of New York has nothing to do with the
administration of this trust, that the law of the situs of the purchase of land will govern
and that the will permits the trust to be administered in a multitude of places and that
the trust fails if it would be non-charitable in any of them. I think that the first assertion
is erroneous and that the rest falls with it. The British Columbia executorship has ended.
The residue is to be turned over to New York trustees upon clearly defined trusts which
are recognized as valid by the law of that state. At that moment it becomes a New York
trust to be administered there according to the law of the state. What difficulties of admin-
istration, if any, may be encountered outside the boundaries of that state are of no further
concern to the court of the domicile. The testator has directed the delivery of the residue
to trustees in a foreign jurisdiction where the trust is valid. The administration of the trust
from then on is controlled by the laws of a jurisdiction which recognizes its validity.
I would allow the appeal on this ground alone. However, the reasons delivered in the
Court of Appeal indicate that this point was not taken before that court. For this reason
I think that we should order that all parties should have their costs out of the estate, those
of the executor, between solicitor and client.
It is only necessary to mention briefly the other grounds of appeal that were argued.
The first was that as a matter of construction, it should have been held that this was an
absolute gift of residue. To me, this was clearly a gift in trust and I think that both courts
in British Columbia have correctly rejected this submission.
The other argument was that the Court of Appeal should have held, as did Wootton J,
that this was a valid charitable trust in British Columbia. The Court of Appeal thought
that this course was not open in view of the decision of the House of Lords in the Keren
case in [1932] AC 650. It is clear that Wootton J did not think that this decision concluded
the matter for all time. He was sitting in 1963. A lot had happened in the world since
1932. He felt that this enabled him to find that there was an identifiable world community
to be benefited by this disposition. In so finding I think that he was right but I recognize
that my opinion on this branch of the case is obiter.
I would allow the appeal and direct that all parties to these proceedings should have
their costs throughout, those of the executor as between solicitor and client.
NOTES
1. In Jewish National Fund, the testator created a separate and continuing trust. The
trustees of this trust were located in New York and the assets were to be located wherever
the trustees purchased land and wherever they kept any other funds. Where was the “place
of administration” of the trust? The majority of the Supreme Court of Canada concluded that
the place of administration was not where the trustees were located. The majority sug-
gested that it may be where the land purchased by the trust is located, but also seemed to
hold that it is not enough that the trust may be valid in one of the places where land could
be purchased. Is the latter view consistent with the modern rule against perpetuities, which
would restrict a grant so that a perpetuity was not created? Does the rule against non-
charitable perpetual trusts relate to the creation or administration of the trust?
2. In 1985, the Hague Conference on Private International Law adopted the Convention of
1 July 1985 on the Law Applicable to Trusts and on Their Recognition (Hague Convention) (in
force in some Canadian provinces: see e.g. International Conventions Implementation Act, RSA
2000, c I-6). Articles 6 and 7 of this Convention provide that a trust (including a testamentary
trust) shall be governed by the law chosen by the settlor or, where no applicable law has been
chosen, by the law with which the trust is most closely connected. However, art 4 provides
that “[t]he Convention does not apply to preliminary issues relating to the validity of wills or
of other acts by virtue of which assets are transferred to the trustee.” As well, art 15 provides:
The Convention does not prevent the application of provisions of the law designated by the
conflicts rules of the forum, in so far as those provisions cannot be derogated from by voluntary
act, relating in particular to the following matters—
(a) the protection of minors and incapable parties;

(b) the personal and proprietary effects of marriage;
(c) succession rights, testate and intestate, especially the indefeasible shares of spouses and
relatives;
(d) the transfer of title to property and security interests in property;
(e) the protection of creditors in matters of insolvency;
(f) the protection, in other respects, of third parties acting in good faith.
If recognition of a trust is prevented by application of the preceding paragraph, the court shall
try to give effect to the objects of the trust by other means.
In general, the Convention tries to distinguish between the rules applicable to the cre-
ation of a trust and the rules that govern the trust’s administration once it is validly created:
see Webster-Tweel v Royal Trust Corporation of Canada, 2010 ABQB 139 for a recent case on this
distinction. In the case of a testamentary trust, it may not be easy to distinguish between the
validity or administration of a will and the administration of a testamentary trust. In Jewish
National Fund, the executors of the estate and the trustees of the Fund were different
people. In many cases the executors and trustees will be the same. In fact, in many wills, all
of the estate is left to the executors in trust and there may be no clear point in time when the
executors stop administering the estate and begin to administer the testamentary trust.
Under the Convention, if a testator’s choice of law to govern the trust is ambiguous or
refers to several places, some of which would invalidate the trust (as in Jewish National Fund),
should the court give effect to that part of the testator’s choice that would validate the trust?
Should the court assume that the testator would sooner give his or her money to his or her
next of kin rather than have any part of the trust limited in this way?
3. In Kelemen v Alberta (Public Trustee), 2007 ABQB 56, 413 AR 305, the court was required
to interpret a testamentary trust. It considered whether the issue should be characterized as
one of estate administration, succession, or the administration of a trust. The court consid-
ered Re Wilks (reproduced above) and Re Pemberton (reproduced below in Section II.C,
“Recognition of Foreign Personal Representatives”) in coming to the conclusion that the
issue was one of trust administration. It accordingly applied the choice of law rules under the
1985 Hague Convention.
4. For more detailed analysis of choice of law for trusts, see Pitel & Rafferty, ch 20; Walker,
ch 28.
C. Recognition of Foreign Personal Representatives

The general rule is that foreign personal representatives have no authority to act, including
to commence proceedings to recover assets, without a local grant. However, foreign repre-
sentatives who have reduced estate property into their possession abroad can assert their
title without a local grant. The rationale for this exception is a bit obscure but, with tangible
property, may be based on a desire to enforce a right that is thought to have been vested
abroad. By a process of analogous reasoning, the exception has been extended to intangible
property, particularly specialty debts and simple debt claims that have been reduced to
judgment in a foreign court. In such cases the representative could sue locally on the foreign
judgment without a local grant.
As an exception to the general rule, a foreign personal representative appointed in the
jurisdiction of the deceased’s domicile upon death can bring proceedings to compel a local
personal representative to turn over surplus assets from that jurisdiction, a process dis-
cussed earlier in connection with cases like Re Lorillard: see Collins at para 26R-036.
Normally, a foreign personal representative cannot be sued in local proceedings. How-
ever, a foreign representative who improperly deals with local assets without a local grant
can be held liable as an executor de son tort. This doctrine prevents anyone acting locally
from claiming immunity from local supervision simply by failing to obtain a local grant.
Canadian Commercial Bank v Belkin

(1990), 73 DLR (4th) 678
THE COURT (Bracco and Stevenson JJA and Forsyth J):

[5] These two actions arise out of the insolvency of the Canadian Commercial Bank.
The actions involve a claim by the Crown and the Canadian Deposit Insurance Corpor-
ation et al., described as the CDIC action, and a claim by the liquidator, conveniently
called the CCB action. Among the defendants in those actions are the directors, one of
whom was the deceased Belkin, who died testate following the commencement of the
actions. In the CCB action he had been personally served, ex juris. He had not been served
in the other action. Orders permitting service, ex juris, upon the executors of his will were
made in this province. For the purposes of this appeal, we are concerned with an applica-
tion to set aside this service by the executors who have now proved the will in British
Columbia and appear here, under the Alberta Rules of Court, Alta. Reg. 338/83, Rule 27,
without attorning to the jurisdiction of the Alberta Court of Queen’s Bench.
[6] The executors do not question the suitability of Alberta as a forum for this litiga-
tion but elect not to appear voluntarily in this jurisdiction.
[7] The case illustrates the kind of private international law problem which lies at the
root of the rule prohibiting impleading foreign person representatives. This was errone-
ously described in argument as the rule in Nova v. Grove [(1982), 146 DLR (3d) 527,
[1982] 6 WWR 481 (Alta CA)]. Nova v. Grove did not establish any new rule of law but,
rather, applied an existing legal principle. As the English Court of Appeal noted in Dega-
zon v. Barclay’s Bank International Ltd., October 8, 1987 [unreported], after referring to
the discussion in Nova v. Grove, that the principle is “settled law.” It described the principle
in terms of Rule 133 of Dicey and Morris on the Conflict on Laws, 12th ed.
[8] The case illuminates the rationale for the rule. The executors are administering a
substantial estate and are subject to the jurisdiction of the courts of British Columbia. By
far the bulk of that estate is either personalty or British Columbia realty, all subject to
administration in accordance with the laws of British Columbia. The deceased’s affairs have
been organized as part of a complex estate plan. One of the executors is the widow and
we are told that the executors are anxious to convey the home property and to pay income
to her. There is litigation relating to the administration of the estate in British Columbia.
[9] The Alberta proceedings promise to be protracted and costly. Counsel for one of
the plaintiffs takes the position that once impleaded the executors will make any distribu-
tion in British Columbia at their peril, and will be personally liable to make up that dis-
tribution. The pleadings seek a money judgment and not any special or restricted relief
against the executors.
[10] The estate assets include some real property situate in Alberta, representing less
than 1% of the value of the estate. That property is subject to a lease. The judge [102 AR
266, at 269] points out that
… rent on a portion of the [Alberta] real estate is paid, by the terms of the lease, in Vancouver
and deposited into an estate account there. Taxes on the leased portion are paid indirectly
by the estate. Further, activities resulting from offer to purchase made prior to Mr. Belkin’s
death have been discontinued.
On the hearing of the appeal this latter sentence was explained: During the deceased’s
lifetime, one of the now executors had been discussing an offer to purchase made to the
deceased and following his death that executor (by telephone from British Columbia)
advised the interested parties that the negotiations would not be continued.
[11] In deciding the application relating to the CCB action the chambers judge dis-
tinguished Nova v. Grove on the basis that the statement of claim had been served, con-
cluding that the Court of Queen’s Bench
would not lose jurisdiction on his death. No new action has been commenced against the estate.
The judge held in the CDIC proceedings Nova v. Grove did not apply because the executors
had constituted themselves “executors de son tort,” which he found an exception to the
rule applied in Nova v. Grove. He said,
The cases indicate that only slight intermeddling is required. I find that the executors of the
estate of Morris Belkin have dealt with the assets in Alberta, albeit indirectly, so as to result
in their being considered executors de son tort. Their conduct is consistent with the intention
to “usurp the authority of an executor.” The executors cannot avoid obtaining a grant of
probate or letters of administration in Alberta while taking the benefit of the deceased’s
property otherwise dealing with the assets, free from liabilities … .
He then concluded that the same ground would also be available in the CCB action.
[12] In our view the question in the CCB action remains: may the foreign executors
be impleaded? Undoubtedly the cause of action survives the death of Mr. Belkin. It sur-
vives by the Survival of Actions Act, RSA 1980, c. S-30. It would survive against “his estate”
but as that is not an entity known by law some personal representative must be added to
represent that estate.
[The court referred to s 8(1) of the Survival of Actions Act and r 54 of the Alberta Rules
of Court.]
[14] In our view the rule is not to be construed as having extraterritorial effect so as
to authorize impleading a non-resident upon whom the estate has devolved. Jurisdiction
is essentially territorial. Alberta assumes jurisdiction over non-residents in many cases
(see Rule 30, for example) but, under the principle recognized in Nova v. Grove, cannot
assume jurisdiction over a foreign personal representative. That conclusion is consistent
with Abbott v. Browns (1921), 58 DLR 288, [1921] 1 WWR 1188, 16 Alta. LR 232 (CA).
[15] The rule does neither expressly nor impliedly purport to extend jurisdiction to a
non-resident (aside altogether the question of whether such an assumption of jurisdiction
would be recognized by any other forum). It is, of course, open to Alberta to maintain
proceedings against the estate in so far as it is properly represented within the province.
Thus, there may be appointed an administrator of Alberta assets, or an administrator ad
litem or an administrator by some other special grant.
[16] We must be careful not to fall into the trap of implying that because this forum
will not implead a foreign executor, a plaintiff with an Alberta claim against an estate is
precluded from enforcing it. Patently, that claim may be pursued in British Columbia.
Indeed, CCB has commenced parallel proceedings in British Columbia. There is no
apparent bar to CDIC doing so. Indeed, the court with jurisdiction, the British Columbia
court, might, if the claim is made there, require the executors to attorn to the Alberta
action or provide some other mechanism for deciding whether this claimant is a creditor
entitled to share in a distribution of assets under the control of the executors.
[17] The plaintiffs cannot say, and do not say, that Alberta is the only forum in which
this claim can be advanced. They say that Alberta is probably the more convenient forum
and therefore should assume jurisdiction. The court in Nova v. Grove, in common with
virtually all other courts, says that this forum should not assume jurisdiction over foreign
executors because the consequence is to interfere in the administration of a foreign estate.
[18] There can be no suggestion that British Columbia will ignore these claims. To
the contrary, British Columbia may have superior and more effective ways of determining
them while not ignoring the legitimate interests of other claimants, be they creditors,
dependants or beneficiaries.
[19] The chambers judge rightly, in our view, rejected the proposition that the Grove
case should not be applied qua other provinces. The same argument was made to us. We
simply reject the proposition that the citizen of the Canadian federation leaves his estate
hostage to litigation in every other part of the federation which assumes a jurisdiction to
establish a liability of the estate.
[20] If the plaintiffs could say that these proceedings had no effect on the due admin-
istration of the estate within British Columbia, the executors might safely be indifferent
to being impleaded here. If the action affected the administration of the estate, all the
judges in Nova v. Grove would have been united in rejecting Alberta as a competent forum.
[21] Nor do we say that an Alberta action cannot be maintained against some repre-
sentative of the estate. The Survival of Actions Act itself recognizes this possibility. How-
ever, an action against some representative of the estate with some limited grant is not a
patent interference with an administration outside of Alberta. The plaintiffs may very
well not be content with a proceeding so limited against such a representative because
they seek a right to share in the assets under administration in British Columbia.
[22] Before us the plaintiffs paraded the horror of an action having been started and
carried well into the trial process in this province against a defendant who then died.
Could Alberta not then refuse to implead his foreign executors? We will deal with that
horror when it arises. Suffice it to say that, at common law, the action would die even if
the executors were resident in the court room. Suffice it also to say that no one argued or
demonstrated that under modern legislation the foreign executors in British Columbia
could not be effectively pursued with that pending claim.
[23] Alberta cannot and should not implead these “foreign” executors.
[24] Both Alberta plaintiffs then seek to add the foreign executors, as “executors de
son tort.” It seems this would be a somewhat hollow victory because as Morden JA said
in Charron v. Montreal Trust Co. (1958), 15 DLR (2d) 240, [1958] OR 597 (CA) (also
quoted with approval in the English Court of Appeal decision to which we referred),
recovery against such a party is restricted to the assets with which such an “executor” has
intermeddled.
[25] The key to finding that someone is an executor de son tort is that he or she has,
within the jurisdiction, intermeddled with an asset. The judge here seems to have been
struck by the fact that the executors would ultimately have to take out some form of
administration to deal with Alberta land. This may be so, but they might also choose not
to so do. They might walk away from the Alberta land. To walk away from 1% of the estate
rather than participate in a lawsuit claiming an amount in excess of 100% of it is not
self-evident folly. Executors might leave the Alberta realty’s administration to some
Alberta representative of the estate. The assumption that they must reseal or take out
probate in Alberta is erroneous and does not found “intermeddling.” There is no evidence
of any “intermeddling” with the land in Alberta. The executors have done nothing in this
province regarding that land except to communicate to someone in this province that
they were not prepared to continue negotiations to dispose of it. They did, in British
Columbia, reimburse the tenant for real property taxes which the tenant paid. We doubt
that payment of taxes per se amounts to intermeddling having regard to the principle
behind the concept of an executor de son tort, namely, that someone who conducts himself
as an executor or administrator will be held responsible as such.
[26] We do not ignore the executors’ counter-argument that the chambers judge, could
not, on an application to set aside service ex juris, in the CCB action, defeat the application
by then finding personal representations to be executors de son tort. The documents
served upon them make no such allegations. We simply say, only, that the evidence would
not, in any event, justify the finding.
[27] The CDIC plaintiff made a further special argument. It claims as the Crown in
the right of Canada for its agent and invokes the Crown’s ancient prerogative to sue in
any court. When, in argument, we expressed some scepticism that this then empowered
the court to implead any defendant, we were met with the assertion that the prerogative
so extended and that this action could have been brought in any court in Canada and the
defendants would have been bound to answer it. This action, it is urged, could be brought
in any other province and the defendants bound to answer.
[28] In our view this prerogative cannot be stretched to enlarge the chosen forum’s
jurisdiction. The Court of Queen’s Bench lacks the jurisdiction to implead a foreign
executor; it cannot assume jurisdiction over that foreign executor. The fact that the federal
Crown can sue in it does not give it jurisdiction to implead any and every defendant the
Crown chooses to sue. We refer to one case which might be read as accepting that prop-
osition: The King v. Campbell (1901), 8 BCR 208 (Co. Ct.).
[29] We flatly disagree with that proposition. The prerogative is expressed in the fol-
lowing terms: “… the King has the undoubted privilege of suing in any court he pleases.”
(Chitty, Prerogatives of the Crown, at p. 244.)
[30] It would be an unwarranted extension of the prerogative to sue in any forum to
turn it into a prerogative to sue anybody in any forum. We also agree with the creditors
that the Crown, as any litigant, takes the forum with its practice and procedure and the
Alberta Queen’s Bench procedure is to decline to implead foreign executors.
[31] We note that during this judgment we have used the term “implead” in the usual
technical sense of asserting jurisdiction against the opposition of the parties sought to be
sued. There is nothing to prevent a plaintiff from naming a party nor preventing a named
party (such as these executors) from attorning or otherwise accepting the court’s authority.
We also use the term “foreign” in a private international law (conflicts) sense, namely, a
territory which does not share precisely the same law and that term “foreign” is used in
the same sense in our own Administration of Estates Act, RSA 1980, c. A-1, s. 30.
[32] We repeat that the plaintiffs may be right in their assertion that Alberta is not
only the convenient forum to try these proceedings, but it is unfortunate or unwise to
have parallel proceedings in British Columbia. That is a matter which the executors and
the courts responsible for the administration of the estate have to consider and decide. It
might, equally, be folly for the executors, beneficiaries and other claimants to the estate
to commit the assets of the estate to this protracted, costly Alberta litigation or for the
plaintiffs to do anything more than preserve their rights in British Columbia.
[33] The appeals are allowed and the service on the executors is set aside.
[34] Costs follow the event here and in both actions, subject to any representatives
that may be made. We repeat our appreciation to counsel for providing a joint book of
authorities, a practice to be commended and encouraged.
Appeals allowed.
NOTES
1. Since there were local assets in Alberta, someone would have eventually been granted
probate or letters of administration in Alberta. Once a local representative had been
appointed, could an action have been brought against the estate?
2. Could a judgment have been obtained in Alberta for more than the amount of the
local assets (indeed, for more than the value of the entire estate)?
3. Do we know whether the estate could claim an indemnity from the bank or a liability
insurer? If so, enforcement of any judgment might be possible in Alberta. If not, enforcement
of the judgment against the estate might have to occur in British Columbia. Would British
Columbia recognize a judgment obtained in Alberta against the estate?
4. Even though it is not a convenient forum, could an action be brought against the
estate in British Columbia?
5. What tactical advantage, if any, have the executors obtained as a result of this judgment?
6. In Nova v Grove, discussed in Canadian Commercial Bank v Belkin, Laycraft JA dissented.
Because of the substantial connections between the dispute and Alberta, he would have
allowed the foreign personal representative to be sued there. More recently, in Hill v Hill,
2010 ABQB 528, the judge followed the orthodox rule as a matter of precedent, but indicated
that had she been free to do so, she would have allowed the foreign personal representative
to be sued in Alberta. She stated, “The logic behind the rule is less compelling at times in the
modern world, where the ‘foreign jurisdiction’ is the province next door.” Is there a compel-
ling modern rationale for the rule? Should the law distinguish between litigation about the
estate itself and more general litigation involving the deceased person?
Re Pemberton
(1966), 59 DLR (2d) 44 (BCSC)
SMITH CCJ:
By his will dated November 7, 1961, Richard Laurence Stapylton Pemberton, who died
in Durham, England, on February 7, 1963, bequeathed to his great nephew, William
Laurence Ebel Fisher, all his shares in Lasqueti Land Company. This company, correctly
named Lasqueti Land Co. Ltd., to which I propose to refer simply as the company, is a
British Columbia company incorporated here on December 8, 1949.
Probate of this will was granted to the executors named therein, Barclays Bank Limited
and the widow of the testator, May Louise Pemberton, at the principal probate registry
of the High Court of Justice on May 8, 1963, the deceased having been at all material
times resident and domiciled in England. Both these executors are resident in England.
The legatee, William Laurence Ebel Fisher, was born on February 28, 1948, and is
therefore in law an infant. His father died in British Columbia in November, 1960, and
the infant has at all times material to these proceedings lived with his mother and sole
guardian, Judith Findlay, who is resident and domiciled in this province.
• • •
Before this order was made, the testamentary executors had applied to the company
here for, and had obtained, registration in their names of the shares of the company dealt
with by the above bequest. This registration, so far as the material before me discloses,
was accomplished without the executors having taken out a grant in this province.
There is, in my view, no doubt that the shares of this company are, for purposes of
administration, deemed to be located in the jurisdiction where they can be effectively
dealt with as between the company and its shareholders, i.e., in this instance, British
Columbia: Brassard v. Smith, [1925] 1 DLR 528, [1925] 1 WWR 311, 38 Que. KB 208,
[1925] AC 371 (PC); Erie Beach Co. Ltd. v. A-G Ont., [1930] 1 DLR 859, [1930] 1 WWR
31, [1930] AC 161 (PC). It is an equally well-established rule of the conflict of laws that
“A grant of administration or other authority to represent a deceased person under the
law of a foreign country has no operation in England”: Dicey’s Conflict of Laws, 7th ed.,
p. 581, rule 103; cf. Cheshire, Private International Law, 6th ed., pp. 548 et seq.; Falcon-
bridge, Conflict of Laws, 2nd ed., c. 26. Since this latter rule applies, mutatis mutandis, in
other common law jurisdictions, it follows that an English personal representative has no
status in British Columbia, so far as assets situated in this province are concerned, until
he has resealed his grant here.
It is therefore my opinion, that the English executors had no right, under British Col-
umbia law, to have the shares transferred to them, and the company had no right to effect
the transfer. All these parties, strictly speaking, are executors de ses torts, and accountable
for the intermeddling with the estate; New York Breweries Co. Ltd. v. Attorney-General,
[1899] AC 62, a decision of the House of Lords in which it was held that an English com-
pany had no right to transfer shares from the name of a deceased shareholder into the
names of his New York personal representatives until the New York will had been probated
in England.
However tenuous the position of the respondents to this petition, that of the petitioner
herself is, in my view, no stronger. Her claim, as will be shortly apparent, equally rests
upon the provisions of a will which so far has no official recognition in this province, and
to the implementation of the provisions of which the court cannot lend its assistance until
such recognition is accorded it.
This reasoning would seem to lead to the conclusion that the petition should be
adjourned, at least, until the English will has received recognition here; but on the assump-
tion that, in the light of the lengthy argument on, and the competent fashion in which,
the various points in issue were dealt with, both parties wish me to proceed on the
assumption that the correct procedural steps had, in fact, been taken, I propose to consider
the merits of the dispute from this point of view.
There is, I point out at this juncture, no trust provision applicable to these shares in
the will in question. The gift to this infant is absolute in terms, and not expressed to be
conditional upon his attaining his majority. Nor can I find anything in the context to
suggest that a trust should be implied in the circumstances.
There being, ex facie, an absolute gift, the petitioner here seeks an order vesting the
legal right to these shares in her, as the boy’s guardian. This order is sought because the
English executors, on legal advice, have refused both to transfer title of the shares to her,
and also to comply with her directions as to execution of an instrument relating to the
matter of the company’s internal management, both of which matters were requested of
them in writing by her solicitors.
It is obvious from the voluminous material filed by both sides here that the main bone
of contention between them is the existing management and directorate of the company.
Mrs. Findlay, on her own affidavits and by the admission of her counsel on the hearing,
is not happy with the way the company is being run. The shares, title to which is here in
issue, would, in conjunction with a voting trust agreement in her favour in respect of the
smaller block of the company’s shares which has also been introduced in evidence, con-
stitute her the majority shareholder in the company, and put her in a position at least until
the boy’s majority of controlling both its internal management and business activities.
The executors, on the other hand, express complete confidence in the present manage-
ment and directorate of the company. They are, they depose, kept fully and promptly
posted of all its activities, and all corporate decisions of any real consequence are made
only after and with their approval. All corporate and directors’ meetings are notified to
and attended by a representative of a local trust company appointed by them for that
purpose. They express the view that “the sound business judgment shown by the present
management backed by independent professional advisors whenever required is the best
way to protect the infant’s interest in the company.” This expression of opinion, for which
I am grateful, despite its potential usurpation of the function of the court, is, as might be
expected, concurred in by the two present directors of the company, one of whom holds
a block of shares only one less in number than the block held by the testator, with the
remaining share of his former block having been, it appears, transferred to qualify his
only co-director, a prominent solicitor and Queen’s Counsel of this city.
If I were of the view that the resolution of this matter depended to any extent whatever
upon questions as to the efficiency or adequacy of management, or the best interests of
the infant, I would be forced to look more closely into this “all is for the best in the best
of possible worlds” attitude much more closely than I either have done or propose to do.
It is, however, in my opinion, relevant only as indicating the depth of the chasm which
separates the viewpoints of the adverse parties as to the operation of the company itself.
In her customary cogent and persuasive manner, counsel for the petitioner founded
herself on the following propositions, which I paraphrase:
(1) The testator died domiciled in England.
(2) He left to the infant outright his shares in a British Columbia company, which can
only be effectively dealt with in this province.
(3) The English executors, by obtaining registration of these shares in their names on
the books of the company here, have submitted to the jurisdiction of this court.
(4) The guardian of the infant, who is here the petitioner, has by the law of this prov-
ince an absolute right, under s. 3 of the Equal Guardianship of Infants Act, to the
order she here seeks, relating as it does to “the estate” of the infant.
(5) The guardian and infant being both domiciled and resident in this province, the
jurisdiction of this court to make the order cannot be questioned.
Apart from conceding the accuracy of the first of these propositions, counsel for the
executors in his equally capable and well-reasoned argument contested the remaining
propositions and prefaced this contest by preliminary objections. One of these, relating
to the utility, in the circumstances here, of ss. 64 and 68 of the Trustee Act, RSBC 1960,
c. 390, I need only say that I cannot accede to. I am satisfied, on the basis of the decision
in Re Hyatt’s Trusts (1882), 21 Ch. D 846, and the Interpretation Act, RSBC 1960, c. 199,
s. 23(b), as well as the definition of the word “trustee” in the Trustee Act, s. 2, that if the
petitioner’s case is made out in other respects, the sections of the Trustee Act relied on by
her counsel enable the requisite order to be made.
The other preliminary objection is, in my view, of a more fundamental nature. It is,
simply put, that this court has no jurisdiction to deal with the matters here in issue because
the issue is one of administration, and the proper forum of the administration here is
England. The petitioner, on this footing, is asking in reality for an order that the executors
administer this estate in a particular way, and such an order can, it is submitted, only be
made by an English court.
Prima facie one might be excused for thinking that the transfer of property to the
guardian of an infant legatee is more a question of succession or distribution than of
administration. However, the judgment of Farwell J in Re Wilks, Keefer v. Wilks, [1935]
Ch. 645, discussed in Falconbridge, op. cit. at pp. 636-7, shows that this is not necessarily
so. See also Re Kehr, Martin v. Foges, [1952] Ch. 26. There can, I think, be no doubt “that
an administrator acting under an English grant, who does succeed in obtaining property
in a foreign country, is accountable for it as administrator in England”: Cheshire, op. cit.,
p. 555; see also Stirling-Maxwell v. Cartwright (1879), 11 Ch. D 522.
In the absence of direct authority on the point, I incline to the view that the correct
position is that submitted in argument by counsel for the infant in the Kehr case, supra,
viz., that for the purpose of the English courts, administration as such continues until an
infant beneficiary comes of age, but that once the “mechanical” administration has been
completed the English administrators become trustees on behalf of such infant beneficiary
for his share of the English estate.
Conceding, without deciding, on this basis, the jurisdiction of the English courts to
deal with this problem if it were brought before them, I return to the fact that I am faced
here with a petition by the guardian of an infant, both being resident and domiciled here,
in respect of shares the situs of which, as indicated above, is unquestionably in this
province. In these circumstances, what law governs the right of this guardian to administer
personal property bequeathed to an infant beneficiary? There would appear to be at least
three possibilities: (1) the law governing the administration of the deceased’s estate in this
province; (2) the lex domicilii of the infant; or (3) the law which determines succession
to moveables, i.e., the lex domicilii of the testator. The adoption of either of the first two
alternatives would point to the law of this province as the applicable law (see Dicey, op. cit.,
pp. 589 and 386, rules 109 and 51; Blackwood v. The Queen (1882), 8 App. Cas. 82, 52
LJPC 10, and Re Nanton Estate, [1948] 2 WWR 113, 56 Man. R 71) whereas the adoption
of the third would lead to English law. It is my view that the application of the law of
British Columbia to decide the merits of this application by the guardian is justified, on
the footing that that law, as the lex domicilii of the infant beneficiary, prima facie entitles
her to administer the infant’s property; see Dicey, op. cit., p. 386, rule 51.
If this be so, it appears to me to be clear that the courts of this province have jurisdic-
tion to give directions on, and to entertain, this application. I conclude, therefore, on this
branch of the case, that the factors of the death of the testator domiciled in England, and
the grant of probate in respect of his will in that country, are not per se sufficient to deprive
this court of jurisdiction so far as this petition is concerned.
To sum up my conclusions to this point:
1. The English letters probate should have been resealed in this province.
2. The administration of assets in British Columbia is governed by the law of this
province, and this court has jurisdiction to give directions concerning the dispos-
ition of the infant legatee’s share in this estate.
3. The guardian’s rights in this connection fall to be determined by the law of this
province as the lex domicilii of the infant legatee.
[The court then considered whether the guardian’s right to the order sought was an
absolute right or whether the court had a discretion.]
There remains, then, simply the question whether or not the Trustee Act affords such
discretion. I have concluded, in the absence of authority, that on the bare wording of s. 64
of that statute there is such a discretion; the section provides that the court “may” make
the vesting order here sought, and this word in its context is, in my view, permissive:
Interpretation Act, RSBC 1960, c. 199, s. 23(a). In my view, the discretion existing, I should
have regard, in deciding on its exercise, to the following factors:
(a) The English courts have concurrent jurisdiction in this matter, and the executors
are accountable to those courts for their administration.
(b) All the assets of the estate are being administered in that jurisdiction.
(c) There is nothing patently contrary to natural justice in maintaining the status quo
until the infant attains his majority in less than three years’ time.
(d) All the material before me establishes that the infant’s interests are being competently
attended to by the English executors, who are qualified to perform this function.
(e) There is no evidence whatever of the petitioner’s competence or qualifications in either
corporate affairs generally, or the areas of this company’s activities in particular.
(f ) The company’s affairs are, in the opinion of those best qualified to express opin-
ions, in perfectly satisfactory order.
III. Succession 867
In the result, I can see absolutely no evidence of benefit or advantage to the infant
accruing from the making of the order sought, and I am prepared to infer, from the
obvious results which would follow in the company’s affairs, and the apparent lack of
qualifications on the part of those causing them, that the infant’s position perhaps would,
and certainly might, be adversely affected if the shares were removed from the custody
of the executors. I would also, in the light of the evidence, be flying in the face of the testa-
tor’s wishes as expressed to his executors and deposed to by them; and this I am not
prepared to do in the absence of completely compelling authority.
I accordingly conclude, in the exercise of my discretion, that the petitioner has not
made out a case warranting the vesting order she seeks. The petition is, therefore, dis-
missed. In view of the novelty of the issue involved, I think it is a proper case in which to
request that counsel arrange to speak to the matter of costs.
Application dismissed.
NOTES
1. This case deals with claims against personal representatives. But it also deals with the
issue, considered earlier, of distinguishing between administration and succession.
2. What is the consequence of the improper act by the English executors of having the
shares registered in their names? Are they prevented from obtaining a grant in British
Columbia?
3. How has the court characterized the issue in dispute? Is the issue a matter of the
administration of an estate for the purpose of jurisdiction, but of the rights of a guardian
(governed by the lex domicilii of the infant) for the purpose of choice of law? Was a choice
between English and British Columbia law necessary? Is there any difference between these
two laws that would be relevant here?
4. If the nephew and his mother lived in England, do you think the English courts should
have any jurisdiction to hear this dispute? Would it make any difference if the shares had
been left to the executors as part of a testamentary trust? See the Hague Convention, dis-
cussed above, which distinguishes between the administration of an estate and the admin-
istration of a testamentary trust. Under the Convention, the law applicable to the trust would
be the law chosen by the settlor or, in the absence of a clear choice, the law with which the
trust is most closely connected. How would the courts determine when the administration
of the estate was completed and the administration of the trust commenced? See the discus-
sion following Jewish National Fund (reproduced above in Section II.B, “Distinction Between
Administration and Succession”).
III. SUCCESSION
The rules concerning the succession to property upon death distinguish between testate
(with a will) and intestate (without a will) succession and between movable and immovable
property. For intestate succession, the rules are relatively straightforward. For movable
property, jurisdiction is connected to the question of administration, which in turn is based
on the existence of local assets. However, in succession proceedings, the court’s jurisdiction
is not restricted to the determination of the entitlement to local assets. The applicable
choice of law is the last domicile of the deceased. Recognition of a foreign court’s succession
decision is based on the appropriateness of that court’s assertion of jurisdiction, which in
modern times should be based on either the existence of local assets or the domicile of the
deceased—or, perhaps, some more general standard such as the existence of some real and
substantial connection between the estate and the foreign jurisdiction.
For intestate succession, all questions concerning the succession to immovable property
are governed by the lex situs. However, in this area the reference to the lex situs is primarily a
choice of law rule. Courts have historically assumed jurisdiction to determine the entitle-
ment to foreign land as part of local proceedings, despite the general rule that local courts
have no jurisdiction over foreign immovable property: see Chapter 14. Moreover, there is
some modern authority that suggests that, for land located in Canada, Canadian courts
would recognize the judgments of foreign courts in similar circumstances.
In the case of testate succession, the rules are more complex. As with intestate succession,
jurisdiction is connected to administration or, more precisely, to the granting of probate,
which in turn is based on the existence of local assets. Similarly, recognition of foreign deci-
sions should be based on whether the foreign authority assumed jurisdiction in similar or
appropriate circumstances. However, the choice of law rules for testate succession are not as
simple as those for intestate succession. They start with the same general idea that succes-
sion to movable property should be governed by the law of the last domicile of the
deceased person and succession to immovable property should be governed by the lex situs.
However, these general principles have been modified so that some aspects of testate suc-
cession are governed by other laws. With some aspects, such as formal validity of the will,
the modification has been the result of periodic statutory intervention to allow testators to
use the form of various legal systems. Here the scope of the modification is fairly clearly
defined. For other aspects of testate succession, such as personal capacity to make a will (for
example, age or mental competence), construction (the rules for interpreting a will), and
questions associated with the validity and meaning of testamentary trusts, the existence
and scope of any modification are less clearly established by the authorities.
An attempt to standardize the choice of law rules in the area of succession was made by
the 1988 Hague Convention on the Law Applicable to Succession to the Estates of Deceased
Persons. One of the aims of the Convention is to have a single law govern succession to all of
the deceased’s property. The Convention is not in force in any Canadian province. See also,
in the European Union context, the European Succession Regulation, Regulation (EU) No
650/2012 of the European Parliament and of the Council of 4 July 2012 (Brussels IV). The Euro-
pean Union’s predominantly common law countries—the United Kingdom and Ireland—
have not opted into this regulation.
A. Jurisdiction and Recognition

As in other areas of private international law, questions of succession upon death can involve
jurisdiction, recognition, and choice of law issues. For the purposes of jurisdiction and rec-
ognition of foreign judgments, there are no important distinctions between testate and
intestate succession and the distinction between movable and immovable property may be
less significant than in other areas. For the purpose of choice of law, however, it is necessary
III. Succession 869
to distinguish between testate and intestate succession and between movable and immov-
able property.
As we have seen, jurisdiction to hear a dispute concerning succession upon death is
based on jurisdiction to administer the estate, which in turn is primarily based on the pres-
ence of local assets. We are here referring to jurisdiction in the private international law
sense. There may be other internal venue and jurisdictional rules within a country that assign
particular disputes to particular courts. For instance, some provinces may continue to distin-
guish between the validity of a will and its construction for some procedural purposes based
on the fact that the former was a matter within the jurisdiction of the surrogate courts and
the latter was within the jurisdiction of the courts of equity.
In exercising their jurisdiction in a dispute involving succession, the courts have not
restricted their decisions to determining entitlement to local assets. Instead, they have dealt
with the estate as a whole, including the entitlement to foreign land.
The courts of the deceased’s last domicile have jurisdiction to determine succession to
all of the deceased’s movable property, wherever it may be situated. The local courts will
recognize such an adjudication: see Senkiw v Muzyka (1969), 4 DLR (3d) 708 (Sask CA), aff’d
(1970), 12 DLR (3d) 544n (SCC). It is also arguable that foreign courts have jurisdiction to
determine the succession to all of the deceased’s property that was situated in the foreign
country at the time of the judgment irrespective of the deceased’s domicile at death: see
Collins at paras 27R-007 and 27-008.
There are two general issues relating to jurisdiction and recognition in this area that are
considered in the following material. The first is whether the modern doctrines of forum non
conveniens and lis alibi pendens apply to this area and, if so, how they apply. The second is
whether, as concerns title to land, Canadian courts will refuse to recognize a foreign asser-
tion of jurisdiction that they claim for themselves.
Gillespie v Grant
(1992), 4 Alta LR (3d) 122 (QB)
MASON SURR CT J:
[1] The issue raised in this application, and the cross-application by the respondents
Robert Cecil Grant and Debra Colleen Arbuthnot, is whether Alberta or British Columbia
is the proper forum for propounding for proof in solemn form the alleged last will and
testament and codicil of the late Arlo Bertram Grant, who died at Vancouver, British
Columbia, on January 7, 1991.
[2] The contested will and codicil were both drawn by K. Bruce Panton, a barrister
and solicitor of Richmond, British Columbia. The will was allegedly executed by the
deceased at Richmond, British Columbia, on June 4, 1990, and the codicil on December
18, 1990, both while he was resident in British Columbia.
[3] The beneficiaries of the estate, according to the terms of the will, are two of his
four children, his sons Thomas True Grant and Kenton Rex Grant, and his long-time
friend and business associate, David L. Gillespie, who is also one of the three named
executors. The other two executors are Harry Johnstone Noble, an Alberta lawyer, and
Howard G. Rowland, an Alberta chartered accountant, both of whom are long-time
friends of the deceased.
[4] According to the codicil, the deceased forgives any loans made to his two other
children, Robert Cecil Grant and Debra Colleen Arbuthnot, or any beneficiary of his will.
[5] At the time of the execution of the will, the deceased allegedly executed a statutory
declaration which sets out an explanation of why certain specific bequests of shares were
made to his two sons, Thomas True Grant and Kenton Rex Grant, both of whom are
Alberta residents; that prior to determining the disposition of his estate, he considered
the financial circumstances of each of his children; and that in his opinion adequate pro-
vision had been made for the proper maintenance and support of all his children during
his lifetime and according to the terms of his last will and testament.
[6] At the time of his death, Arlo Bertram Grant, known as Bud Grant, headed up a
large corporate enterprise involving a number of Alberta and British Columbia compan-
ies. A number of his shareholdings are concentrated in an Alberta company, 200245
Holdings Ltd., in which each of his children have share interests. The children also have
varying share interests in other of the companies. Mr. Gillespie also has share interests in
some of these companies.
[7] Within the corporate structure are hotels in both Alberta and British Columbia,
as well as other business and property enterprises. At the time of his death the major
project was and is the construction of a $25 million hotel in Surrey, British Columbia.
Mr. Grant’s estate is estimated to be of a value of between $9 million and $15 million. In
this considerable estate there is only one piece of real property owned by the deceased, a
summer cottage at Gull Lake, Alberta. There is no immovable property in British Col-
umbia owned by the deceased in his personal name except a joint tenant interest in a
condominium which devolved on his death to Mr. Carmen Grossi, whose relationship to
the deceased is later described in these reasons.
[8] Upon disclosure of the contents of the alleged last will and testament and codicil
of the late Mr. Grant to his two children, Robert Cecil Grant and Debra Colleen Arbuth-
not, they filed a caveat in the Surrogate Court of Alberta on February 1, 1991, and then
on February 4, 1991, filed a second caveat in the Surrogate Court of British Columbia.
The grounds stated in the caveat filed in this court are:
1. The Deceased left an alleged last will and testament dated the 4th day of June, 1990,
and an alleged first codicil thereto dated the 18th day of December, 1990 (herein-
after referred to collectively as the “Alleged Will”).
2. At all times material to the provision of instructions for the preparation of the
Alleged Will and the execution thereof, the Deceased lacked testamentary capacity
due to illness and/or the effects of medication.
3. Alternatively, the Deceased did not know or approve of the contents of the Alleged
Will.
4. In the further alternative, the Alleged Will was not duly executed in accordance
with the provisions of the Wills Act RSBC 1979 Chapter 434, and amendments
thereto.
5. In the further alternative, the Alleged Will was procured by the undue influence
of David L. Gillespie and/or other persons.
[9] In filing the caveat in this court, these respondents, the cross-applicants, gave as
an address for service a law firm in the city of Calgary.
III. Succession 871
[10] On March 22, 1991 these same respondents, Debra Colleen Arbuthnot and
Robert Cecil Grant, commenced proceedings in British Columbia by way of writ of sum-
mons and statement of claim against David L. Gillespie, Harry Johnstone Noble and
Howard G. Rowland in their capacity as executors and trustees of the will of Arlo Bertram
Grant, and against David L. Gillespie, Kenton Rex Grant and Thomas True Grant, requir-
ing proof in solemn form of the June 4, 1990 will. Appearances have been filed by all
defendants and statements of defence have been filed by Thomas and Kenton Grant.
[11] On the same date, Debra Colleen Arbuthnot and Robert Cecil Grant also com-
menced proceedings in British Columbia for relief under the Wills Variation Act, RSBC
1979, c. 435, and again named as defendants these applicants as the executors named in
the June 4, 1990 will as well as Kenton Rex Grant and Thomas True Grant. Appearances
have been filed by the named executors in these proceedings and they have also filed a
statement of defence.
[12] Section 2 of the Wills Variation Act of British Columbia permits an application
to the court to vary the provisions of the will of a testator, notwithstanding any law or
statute to the contrary where in the opinion of the court the testator failed to make
adequate provision for the proper maintenance and support of his wife or children. …
There is no qualification in the British Columbia statute that children over 18 years need
be mentally or physically disabled and by reason thereof, unable to earn a livelihood, in
order that they may claim as dependents, as is the case with the corresponding dependent
relief legislation in Alberta under the Family Relief Act, RSA 1980, c. F-2. This is a key
factor in the dispute between these parties as the respondents Robert Grant and Debra
Arbuthnot could not qualify as dependents under Alberta law to seek a court ordered
provision for maintenance and support.
[13] No stay of proceedings has been applied for by the defendant executors or by
Thomas or Kenton Grant in either of the British Columbia actions. However, the plaintiffs,
Robert Cecil Grant and Debra Colleen Arbuthnot, have not proceeded further with either
of these actions.
[14] As no resolution of the disputed issues raised in the British Columbia actions
followed the commencement of those proceedings, the applicants moved in Alberta, by
way of originating notice of motion, filed August 1, 1991, to seek the following directions:
(1) that the matter of propounding for proof in solemn form of the last will and testa-
ment and codicil be removed from the Surrogate Court of Alberta to the Court
of Queen’s Bench of Alberta;
(2) that the proceedings by way of proof in solemn form be in the Court of Queen’s
Bench of the province of Alberta; and
(3) a declaration that Alberta was the domicile of the deceased at the time of his
death or, alternatively, a declaration that Alberta is the forum conveniens for such
proceedings.
[15] The respondents, Robert Cecil Grant and Debra Colleen Arbuthnot, by cross-
motion filed September 27, 1991, applied for an order:
a) which stays the application for proof in solemn form of the alleged testamentary
documents of Arlo Bertram Grant within Alberta;
b) which stays the application for a declaration that Alberta was the domicile of
Arlo Bertram Grant at the time of his death, or in the alternative, which directs
a trial of an issue as to the domicile of the deceased during which trial viva voce
evidence can be given, or in the further alternative, which declares that British
Columbia was the domicile of Arlo Bertram Grant at the time of his death.
[16] In these proceedings, affidavits have been filed for the cross-applicants by Robert
Cecil Grant on behalf of himself and his co-cross-applicant, Debra Colleen Arbuthnot,
as well as an affidavit by Stewart Kehoe, a businessman in Vancouver, British Columbia.
In response, affidavits have been filed by all of the applicant executors, and by Ernest
Hickmore and James Melvin Scott, Alberta businessmen, by Viva Cummings, the
deceased’s sister, and by Carmen A. Grossi, all on behalf of the applicants. These affidavits
address the issues of testamentary capacity, undue influence and domicile of the deceased
in varying respects, depending upon the affiant and their personal knowledge. Extensive
cross-examinations of the affiants have been conducted by each side and were filed and
used in these applications.
Position of the Parties

[17] The applicants argue that the Court of Queen’s Bench has jurisdiction over the
probate proceedings in respect of the estate on the basis that the only immovable property
in the whole of the estate is situate in the province of Alberta. They further argue that
Alberta has jurisdiction over all movable property because the domicile of the late Arlo
Bertram Grant at death was Alberta. Based on these factors, they argue Alberta is the
proper forum for the determination of all matters and no question of lis alibi pendens or
forum conveniens arises.
[18] The respondents argue that British Columbia is the forum conveniens for deter-
mining the contentious business of proof of proper execution, the issue of capacity and
the issue of undue influence, all of which must be determined before a grant of probate
can be made. They contend that British Columbia has prima facie jurisdiction to hear the
matter because Bud Grant died there and made his will and codicil there. The respondents
acknowledge that there is jurisdiction in both Alberta and British Columbia to hear this
matter but argue that on the application of the law respecting forum conveniens, British
Columbia is the appropriate jurisdiction to determine the matter and a stay of the Alberta
proceedings should be effected on the basis of lis alibi pendens.
Jurisdiction
[19] The applicants and the respondents agree that both Alberta and British Columbia
have jurisdiction to entertain an application for probate of the last will and testament and
codicil of Bud Grant.
[20] Alberta’s jurisdiction is founded on the existence of immovable property within
Alberta; that is, the deceased’s ownership of the property at Gull Lake, Alberta. Section
39(2) of the Wills Act, RSA 1980, c. W-11, provides:
… the manner and formalities of making a will, and its intrinsic validity and effect, so far as it
relates to an interest in land, are governed by the law of the place where the land is situated.
III. Succession 873
See also s. 11(1) and (2) of the Surrogate Court Act, RSA 1980, c. S-28, and s. 2 of the
Administration of Estates Act, RSA 1980, c. A-1.
[21] British Columbia has prima facie jurisdiction because Bud Grant had one of his
residences there, made his will and codicil there, and died there: Re Page (1981), 10 ETR
247 (Ont. Surr. Ct.), at p. 250.
[22] However, by putting capacity and undue influence in issue in both jurisdictions,
the respondents, Robert Cecil Grant and Debra Colleen Arbuthnot, raise the issue of
domicile. The determination of domicile bears not only on testamentary capacity but also
on the succession to movable property which is the bulk of this estate.
• • •
[30] Insofar as the estate of Bud Grant is concerned, only movable property exists in
the province of British Columbia. Therefore, whether or not British Columbia has juris-
diction to deal with movable property depends upon whether or not Bud Grant’s domicile
was British Columbia at the time of death.
[31] The domicile of the late Bud Grant being an issue herein, it is necessary to review
his personal history based on the evidence and admitted facts before me on this application.
[Mason J reviewed Bud Grant’s life history and extensive business ventures as well as the
principles governing the acquisition of a domicile.]
[53] In the case at hand, I conclude a stay should not be issued with respect to the
Alberta proceedings and find that the issue of domicile must first be determined by this
court in proceedings by way of contentious business under the probate rules.
[54] In the event there is an issue of forum conveniens with respect to the issue of
domicile on the basis of lis alibi pendens, I conclude on a consideration of the law and the
proceedings to date that Alberta is the appropriate forum.
[Mason J referred to United Oilseed Products Ltd v Royal Bank (1988), 87 AR 337 (CA)
and Spiliada Maritime Corp v Cansulex Ltd, [1987] AC 460 (HL).]
[56] In determining the most appropriate or “natural forum,” Justice Stevenson [in
United Oilseed Products] emphasizes the importance of considering the location of docu-
ments and witnesses to be involved in the proceedings, as well as assessing relative
inconvenience and expense in order to determine where substantial justice might best be
done as between two competing forums. At p. 342, Justice Stevenson states:
In choosing a forum, the “natural forum” may have an advantage as being the home of both
the law and the evidence. In a choice of forum question, identifying the home of the evidence
is highly important.
[57] In applying the doctrine of forum conveniens as set out in United Oilseed, supra,
and Spiliada, supra, to this case, it is important to consider that Carmen Grossi, who
resides in British Columbia, would likely be a key witness as regards the intention of Bud
Grant with respect to a determination of his domicile at the time of his death. Likewise,
the executors of the will, two of whom are in Alberta and one in British Columbia, and
family members and friends of Mr. Grant, also spread throughout Alberta and British
Columbia, would likely give evidence on intention. On these facts alone, it would seem
that either British Columbia or Alberta would be an “appropriate and suitable forum” in
which to determine the issue of domicile according to United Oilseed, supra. However,
the fact that the proceedings are well under way in Alberta (affidavits on behalf of both
the applicants and respondents concerning the issue of domicile have been filed and
cross-examinations of the affiants have been conducted in this province) while the pro-
ceedings in British Columbia have not gone beyond the initial stages cannot be overlooked.
• • •
[59] I conclude that upon a consideration of the doctrine of forum conveniens as set
forth by the Alberta Court of Appeal in United Oilseed, supra, Alberta is the most appro-
priate forum, considering all factors, to determine the issue of domicile in this case.
Furthermore, I fail to see any prejudice to either the applicants or respondents in choosing
to determine the issue of domicile at a trial in Alberta. It is to both their advantages, given
the extent to which the matter has proceeded in Alberta, to continue to deal with the issue
of domicile here.
[60] The cross-applicants have requested that the domicile of Bud Grant at the time
of death be determined by a trial of the issue. Having regard to the fact that the onus of
proof rests with the cross-applicants, I have carefully considered the affidavit evidence
before the court as tested by the filed cross-examinations. I am convinced that a trial of
the issue is necessary because of the unusual circumstances of this case, not the least of
which is the fact that the deceased maintained two residences, one in each province. It is
important in this case to determine the intentions of the deceased from the time he
established his Vancouver residence until his death in order to make a proper determin-
ation of domicile.
• • •
[63] Therefore, I must refuse the cross-applicants’ request for a stay of the Alberta
proceedings but I direct that there be a trial of the issue of domicile in the Alberta Court
of Queen’s Bench. The issue of whether or not Alberta or British Columbia would be the
appropriate forum to continue the proceedings after domicile has been determined should
be left for consideration pending that determination.
[64] I note that if Mr. Grant is found to have died domiciled in Alberta, his testament-
ary capacity, the manner and formalities, and the intrinsic validity and effect of his will
with respect to all of his movables, both in Alberta and British Columbia, would be
determined according to Alberta law. British Columbia law would only apply if Mr. Grant
had land interests in that province and because his immovables are situated only in
Alberta, British Columbia would be without jurisdiction.
[65] If, however, Mr. Grant is found to have died domiciled in British Columbia, the
law of that province would be determinative of capacity and succession to all movables
in both provinces. Alberta law would apply to the only immovable, the Gull Lake property.
If British Columbia is found to be the domicile, both provinces will have jurisdiction in
the matter and the issue of forum conveniens may have to be determined having regard
to all of the circumstances of the case that exist at that time.
[66] The costs of these applications will be the costs in the cause.
Order accordingly.
III. Succession 875
NOTES
1. The case illustrates that while there may be a separate administration of the estate in
Alberta and British Columbia, it may be desirable to have the validity of the will determined
in one set of proceedings that is recognized everywhere. What are the rules that determine
which courts should assume jurisdiction? Should the location of assets be enough or should
all courts defer to those of the last domicile of the deceased? Should the doctrine of forum
non conveniens apply?
2. While the court in several places states that the British Columbia courts would have juris-
diction (based on a variety of factors), in other passages the court concludes that British Col-
umbia would have no jurisdiction unless the deceased was domiciled there. Why did the court
think that the British Columbia court would only have jurisdiction over movables located there
if the deceased was domiciled there? Is it because the real dispute in this case is about not
mental capacity or undue influence but the application of the British Columbia dependants’
relief legislation (the Wills Variation Act)? See Section IV, “Dependants’ Relief Legislation.”
3. The domicile of the deceased will ultimately be critical to the disposition of this dis-
pute because of the unique provisions of the Wills Variation Act. However, this is a choice of
law issue. How significant is the deceased’s domicile in determining jurisdiction? Is it just a
question of determining a convenient forum, or is there some difficulty in an Alberta court
exercising the unusual discretion given by the British Columbia statute? Is the approach of
the court practical, since the voluminous evidence of Bud and Carmen’s relationship and its
effect on domicile may be the same evidence that ultimately determines capacity, undue
influence, and the application of the statute? Can a testator have the mental capacity to
determine domicile but not to make a will?
4. Anglo-Canadian courts have traditionally assumed jurisdiction over foreign land in
succession matters: see e.g. R Griggs Group Ltd v Evans, [2005] Ch 153 at para 170. However,
does Duke v Andler, [1932] SCR 734, [1932] 4 DLR 529 (reproduced in Chapter 14) prevent them
from recognizing a foreign judgment that is based on a similar assertion of jurisdiction? See
O’Hara v Chapman Estate and MacVicar, [1988] 2 WWR 275 (Sask CA) (reproduced in Chapter 14);
see also Elizabeth Edinger, “Is Duke v. Andler Still Good Law in Common Law Canada?” (2011)
51 Can Bus LJ 52 at 69.
B. Intestate Succession
The choice of law rules applicable to intestate succession distinguish between movable
property (governed by the law of the last domicile) and immovable property (governed by
the law of the situs). This distinction creates several complications—the distinction is differ-
ent from that found in the domestic law between personalty and realty; the distinction is not
generally applied in many foreign legal systems; and the distinction prevents the application
of a single set of rules to determine entitlement to the estate. The fact that the distinction is
different from that found in the domestic law has been considered in Chapter 14. The fact
that other legal systems apply a unified choice of law rule to govern estates creates the pos-
sibility of forum shopping and conflicting judgments.
Some courts have invoked the concept of renvoi (see Chapter 9) to avoid these rules. How-
ever, a different technique is necessary to integrate the different preferential shares that may
be granted to spouses and children in the two legal systems. Otherwise, such preferential
shares may be stacked—that is, applied cumulatively—giving spouses and children more
than their entitlement under any domestic legal system.
Re Thom
(1987), 40 DLR (4th) 184 (Man QB)
OLIPHANT J:
Overview
The applicant (“the widow”) is the widow of a man (“the deceased”) who, at the time of
his death, was domiciled in Saskatchewan. He died intestate owning land and movables
in Saskatchewan and land in Manitoba. The respondents are the children (“the children”)
of the deceased.
In Saskatchewan, the widow obtained her preferential share of the deceased’s estate
under the Intestate Succession Act, RSS 1978, c. I-13, of that province.
She now claims entitlement to the spouse’s preferential share of the estate in Manitoba
as provided for in the Devolution of Estates Act, RSM 1970, c. D70.
The Issue
The question to be answered is whether a surviving spouse is entitled to the preferential
share provided for under Manitoba law, having already received a spouse’s preferential
share under Saskatchewan law.
The Facts
The deceased died intestate on April 23, 1984. At the time of his death, the deceased was
domiciled in Saskatchewan.
The deceased was married to the applicant who survived him. There are three children
of the union, each of whom is under 18.
The widow is the administratrix of the deceased’s estate. Letters of administration were
granted to her in Saskatchewan on August 21, 1984.
In addition to the assets he owned in Saskatchewan, the deceased was the registered
owner of a half section of land in Manitoba worth $104,600.
The widow has already received the sum of $40,000 plus one-third of the residue of
the net estate in excess of the $40,000 pursuant to Saskatchewan law. The Public Trustee
of Saskatchewan received two-thirds of that residue for the children.
The widow, who now lives at Neepawa, Manitoba, obtained resealed letters of admin-
istration here. She wants to sell the half section of land in Manitoba.
The widow says she is entitled to the first $50,000 of the sale proceeds plus one-half of
the residue remaining after deducting the $50,000, pursuant to Manitoba law.
Relevant Statute Law

Section 2(c) of the Intestate Succession Act of Saskatchewan (“the Saskatchewan Act”)
states “net value” means the value of the estate wherever situated, both within and outside
Saskatchewan, after the payment of charges, debts, expenses and succession duty.
III. Succession 877
When the net value of the estate exceeds $40,000, the spouse is entitled to $40,000 and
has a charge on the estate for that sum pursuant to s. 4.1(2) of the Saskatchewan Act.
Section 4.1(3)(b) of the Saskatchewan Act states that after payment of the $40,000, the
spouse gets one-third of the residue if there is more than one child.
The Devolution of Estates Act of Manitoba (“the Manitoba Act”) states, in s. 5(a) that
“estate” includes both real and personal property.
Section 6(2)(a) of the Manitoba Act provides that if the estate exceeds $50,000 in value
and there are children, the surviving spouse is entitled to $50,000 and has a charge on the
estate for that amount. Additionally, according to s. 6(2)(b) of the Manitoba Act, the
surviving spouse is entitled to one-half of the residue, after deducting the $50,000.
Applicant’s Position
The applicant relies upon the conflict of laws principle that in an intestacy, the law of
succession of land which governs is the law of the jurisdiction where that land is situated:
see Castel, Canadian Conflict of Laws, 2nd ed. (1986), at p. 345.
According to Manitoba law, because the land is here, the applicant asserts she is entitled
to the first $50,000 of the proceeds from the sale of land and one-half of the residue after
deducting $50,000.
The applicant relies also on the decision of Donovan J in Re Elder, [1936] 3 DLR 422,
[1936] 2 WWR 70, 44 Man. R 84. In that case, the deceased and his wife were domiciled
in British Columbia. The deceased owned land in Manitoba. By his will, the deceased
gave his wife a life estate in the homestead in British Columbia and certain personal
property. The husband left the balance of his estate, including the Manitoba land, to a son
by a former wife and to his grandchildren. The widow filed an election under the Dower
Act of Manitoba.
The court held that the wife was entitled to the share of land in Manitoba, as provided
for in the Dower Act of Manitoba, even though she and the deceased had been domiciled
in British Columbia.
According to Donovan J, at p. 427 DLR, p. 76 WWR, to use the total value of movables
and immovables in Manitoba, or of the total estate in both Manitoba and British Colum-
bia, as the basis for computing the widow’s share under the Dower Act of Manitoba, would
be an infringement of the law of the domicile of the husband and of the British Columbia
jurisdiction.
The Respondents’ Position

The respondents say the widow is entitled to one-third of the proceeds from the sale of
land because of the provisions of the Saskatchewan Act, which states that all assets, wher-
ever situate, are to be included in calculating the net value of the deceased’s estate.
According to the respondents, the conflict of laws principles are outmoded and should
not be applied.
The respondents rely upon two decisions to support their contention that land lying
outside the jurisdiction of the court can be taken into account in calculating the value of
the estate. Those decisions are Morgan v. Altman (1961), 34 WWR 453, and Re Williams,
[1983] 4 WWR 160, 13 ETR 163. The former is a decision of Monnin J as he then was;
the latter of Philp Co. Ct. J as he then was.
Both decisions dealt with calculating the value of estates under the Dower Act of
Manitoba. In each case, the court considered the value of land outside its jurisdiction for
the purpose of calculating the value of the respective estates.
Conclusion
The purpose of the Devolution of Estates Act is to provide for the equitable distribution
of the estate of a deceased person where there is an intestacy or partial intestacy.
The legislation, in both Manitoba and Saskatchewan, gives the surviving spouse a
preferential share, being a fixed amount in each province. The surviving spouse has a charge
upon the estate for that fixed amount. The residue, after payment of the fixed amount to
the surviving spouse, is then divided amongst the surviving spouse and children.
The equitable distribution of an estate dictates a consideration for children of a
deceased when the value of the estate exceeds the amount prescribed as being the pref-
erential share given legislatively to the surviving spouse.
The legislation is remedial. Section 13 of the Interpretation Act, RSM 1970, c. I80, says,
legislation shall be given such fair, large and liberal construction and interpretation as
best ensures the attainment of its objects.
The question is not whether assets outside the court’s jurisdiction should be considered
when calculating the value of the estate, but whether the equitable distribution of the
estate allows the surviving spouse to claim the full benefit of his or her preferential share
in more than one province, pursuant to the law in each respective province.
If I accept the widow’s position, an equitable distribution of the deceased’s estate would
not occur in this case. I therefore reject her position.
If I accept the children’s position, I would, in effect, be sitting as a court in Saskatch-
ewan, applying the law of that province. This is what is known as the doctrine of renvoi.
While English courts have applied the doctrine, courts in Canada have not been favour-
ably disposed to do the same. I cannot accede to the children’s submission.
Section 6(2) of the Manitoba Act creates a statutory debt in favour of the surviving
spouse. That debt must be paid before the residue of the estate is distributed. The legisla-
tion does not charge any specific asset with the debt. This has to do with the administra-
tion of the estate rather than succession.
The Manitoba Act prescribes a preferential share of $50,000 for the surviving spouse.
In this case, the widow has already received $40,000 under Saskatchewan law.
I therefore conclude that the applicant is entitled to a charge on the estate in Manitoba
in the sum of $10,000. After deducting that sum, she is entitled to one-half of the residue.
The children are entitled to share the remaining half as set forth in s. 6(4) of the Manitoba
Act.
If the question of costs cannot be resolved, counsel can speak to me.
Judgment accordingly.
NOTE
See also Re Vak Estate (1994), 20 OR (3d) 378, 117 DLR (4th) 122 (Gen Div), in which the deceased
died intestate in Manitoba. At the time of her death she had movable assets of $131,000 in
Manitoba and real property worth $42,000 located in Ontario. The husband’s preferential
III. Succession 879
share in Manitoba was $50,000 and in Ontario was $75,000. The court rejected the traditional
bifurcated choice of law rules to govern movable and immovable property. In their place, the
court first addressed the purpose of the competing statutes and concluded that they were
obviously designed to provide monetary protection for the surviving spouse in order to
raise children or to achieve a certain degree of financial independence and that this could
best be achieved by giving the surviving spouse the maximum share permitted under the
respective statutes. The court then concluded (at 128 DLR):
In my view, the word “estate” in the Manitoba statute should be interpreted as the whole of the
estate and “property” in the Ontario statute should include all assets owned “collectively” as
property is defined above, wherever situate.
The assets, irrespective of whether they are movables or immovables, should be assembled
under the administrator’s umbrella, and after setting aside the highest preferential share per-
mitted under the respective jurisdictions where the assets are located, the residue of the estate
be divided by the applicable law of the deceased’s usual or habitual place of residence.
This will serve to avoid time-consuming and expensive estate litigation which occurs in this
and other jurisdictions where residents of Manitoba have elaborate summer homes on Lake of
the Woods, Florida condominiums, as well as a transitory population in Canada whose places of
employment and assets are scattered throughout North America and elsewhere.
It will also avoid inequitable “double dipping” on the part of the surviving spouse, which in
smaller estates could well result in the children being disentitled to any share of their deceased
parent’s estate.
By using this approach it is unnecessary to decide whether the laws of Ontario or Manitoba
govern the disposition of the Ontario real estate, except to ascertain which of the two statutes
provides for the higher preferential share to the surviving spouse, which should be the share
allocated.
See Vaughan Black, annotation of Re Vak Estate (1994), 4 ETR (2d) 2.

In part, these cases respond to considerable criticism that has been directed at the choice
of law rule for intestate succession. They move toward a unified approach, applying the
same law to movable and immovable property. Arguably, this is more consistent with
domestic Canadian law on intestate succession: see Morris; Vaughan Black, Annotation to Re
Thom (1987), 27 ETR 185. It still leaves open the question of what the unified connecting
factor should be, with the leading options being the domicile upon death or the habitual
residence upon death.
C. Testate Succession
Testate succession starts with the same two basic rules that govern intestate succession,
applying the law of the domicile upon death for movable property and the lex situs for
immovable property. However, these rules have evolved to become more nuanced and
complex as they are applied to the different issues involved in testate succession. In particu-
lar, for movable property the universal application of the last domicile of the deceased has
given way to more particular or additional rules.
Many civil law countries use the same choice of law rule for both movable and immovable
property in testate succession. There are arguments that Canadian conflict of laws should
adopt the same approach. To some extent these arguments parallel the criticisms, discussed
above, of the bifurcated rule for intestate succession.
1. Formal Validity
In Bremer v Freeman (1857), 14 ER 508, the Privy Council, on appeal from the Prerogative
Court of Canterbury, refused to admit to probate the will of a British subject who died domi-
ciled in France. The will was formally valid under English law, but invalid under French law.
This decision led to the passage of Lord Kingsdown’s Act in 1861 by the United Kingdom
Parliament. This statute allowed British subjects to use the form of making a will as pre-
scribed by several different jurisdictions’ laws. The legislation was copied by the various
Canadian provinces, but it contained several anomalous limitations: see Bale.
Subsequent amendments suggested by the Uniform Law Conference of Canada and by
the Hague Convention of 5 October 1961 on the Conflict of Laws Relating to the Form of Testa-
mentary Dispositions have been adopted by various provinces. The modern provincial legis-
lation now allows testators to use the form of several different countries, at least as far as
movables are concerned. Thus, in Alberta, for example, ss 41(2) and (3) of the Wills and Suc-
cession Act, SA 2010, c W-12.2 restate the traditional common law choice of law rule in favour
of the law of the situs in the case of land and the law of the deceased’s last domicile in the
case of movable property. The statute then provides:
42. As regards the manner and formalities of making a will, so far as it relates to an interest
in movables, a will made either within or outside Alberta is valid and admissible to probate if it
is made in accordance with the law in force at the time of its making in the place where
(a) the will was made,
(b) the testator was domiciled when the will was made, or
(c) the testator had his or her domicile of origin.
• • •
48. On and after December 1, 1978, the uniform law on the form of an international will set
out in the Annex to the Convention is law in Alberta.
Article 1 of the Annex provides:

1. A will shall be valid as regards form, irrespective particularly of the place where it is made,
of the location of the assets and of the nationality, domicile or residence of the testator, if it is
made in the form of an international will complying with the provisions set out in Articles 2 to 5
hereinafter.
2. The invalidity of the will as an international will shall not affect its formal validity as a will
of another kind.
The legislation in some other jurisdictions is more generous than Alberta’s and also
expressly excludes any possibility of applying the doctrine of renvoi. Thus Ontario’s Succes-
sion Law Reform Act, RSO 1990, c S.26, while restating the traditional common law rule point-
ing to the situs in the case of land and the last domicile in the case of movable property
(s 36), and providing for wills in the international form (s 42), also provides:
37(1) As regards the manner and formalities of making a will of an interest in movables or in
land, a will is valid and admissible to probate if at the time of its making it complied with the
internal law of the place where,
(a) the will was made;
(b) the testator was then domiciled;
(c) the testator then had his or her habitual residence; or
(d) the testator then was a national if there was in that place one body of law governing
the wills of nationals.
III. Succession 881
(2) As regards the manner and formalities of making a will of an interest in movables or in
land, the following are properly made,
(a) a will made on board a vessel or aircraft of any description, if the making of the will
conformed to the internal law in force in the place with which, having regard to its registra-
tion, if any, and other relevant circumstances, the vessel or aircraft may be taken to have
been most closely connected;
(b) a will so far as it revokes a will which under sections 34 to 42 would be treated as
properly made or revokes a provision which under those sections would be treated as com-
prised in a properly made will, if the making of the later will conformed to any law by refer-
ence to which the revoked will or provision would be treated as properly made.
(c) a will so far as it exercises a power of appointment, if the making of the will conforms
to the law governing the essential validity of the power.
2. Essential Validity
Essential validity concerns issues such as whether a specific disposition is legally valid. This
can raise questions about whether the rule against perpetuities has been violated or
whether the testator has failed to make proper provision for particular dependants. Provin-
cial legislation incorporates the common law position whereby the essential validity of a will
of land is governed by the lex situs and the essential validity of a will of movable property is
governed by the law of the deceased’s domicile at death: see e.g. Wills and Succession Act, SA
2010, c W-12.2, s 41; Succession Law Reform Act, RSO 1990, c S.26, s 36.
In the Estate of Groos

[1904] P 269
[The deceased made a will shortly before her marriage. These events occurred in Holland,
where the deceased and her husband were domiciled. The couple subsequently moved to
England, where the deceased was domiciled at the time of her death.]
GORELL BARNES J (after stating the facts and reading a notarial translation of the will):
The point for my determination is whether the change of domicil renders the will bad
on account of the marriage, which took place after the execution of the will. The argument
addressed to me was based on the Act of 1861 (24 & 25 Vict. c. 114). The 3rd section of
that Act is as follows: “No will or other testamentary instrument shall be held to be
revoked or to have become invalid, nor shall the construction thereof be altered, by reason
of any subsequent change of domicil of the person making the same.” It was argued that
under this section a change of domicil did not effect a revocation of the will. The section
appears in and forms part of an Act which applies, according to its title, to the wills and
estates of British subjects.
The question raised is as to whether s. 3 applies to this case. In other words, does the
section apply generally, or is it limited to British subjects?
After looking into the authorities, I have some doubt whether, apart from s. 3, this will
should be treated as invalid, inasmuch as it was a good will at the time it was made and
valid as long as the parties were domiciled in Holland. Under these circumstances, might
it not reasonably be held that the will remained valid up to the time of the change of
domicil, and that it ought not to be treated as invalidated subsequently owing to change
of domicil? To hold otherwise would be equivalent to saying that the law of the after-
acquired domicil was to work back and affect a will at a time when the law of the country
where the will had been made shews it to have been a good will.
Having considered the authorities, I hold that s. 3 of the Act may reasonably be con-
strued as applicable to a case such as this. That so to hold is a matter of convenience cannot
be doubted. That the case may be held to be within the general terms of s. 3 is equally
beyond doubt. And it does not seem reasonable to hold that in this case s. 3 is to be limited
merely because, in the title, the Act is described as an Act to amend the law with respect
to wills of personal estate made by British subjects. I am of opinion that the Act ought not
to be construed in the restricted sense. This will may, therefore, be admitted to probate.
Re Groos
[1915] 1 Ch 572
SARGANT J:
The question now arises whether under the gift which I have read the husband takes
the whole of the estate or only a portion of it. It seems clear that according to the law of
Holland at the time when this will was executed and down to the present time a married
woman, who married without any community of goods (which was the case here), was
and is under the circumstances existing in the present case only entitled to dispose of
one-fourth of her estate, and was and is bound by law to allow three-fourths to go to her
children; and therefore there is no doubt that, if the parties had remained domiciled in
Holland, the appointment by the testatrix of her husband as heir of her estate—which Mr.
Bisschop conceded to amount to a residuary gift—would have operated only on one-
fourth of her estate. But, though that would have been the result in the circumstances
which I have supposed, in fact by the time when the testatrix died her testamentary
capacity had become enlarged by her acquisition of an English domicil and she was able
to dispose of the whole of her property, and the question is whether the subsequent
enlargement of her testamentary capacity has had the effect of enlarging the gift to her
husband. The analogous decision to which I have referred is In re Bridger [[1894] 1 Ch
297, 300]. In that case a testator by will dated June 29, 1891, bequeathed the residue of
his estate to trustees in trust to pay the income thereof to his wife for her life, and after
her decease in trust to pay such part of his residuary trust estate “which may by law be
given for charitable purposes” to the Brompton Hospital. The testator died on February
20, 1892, and in the interval between the date of his will and the date of his death the
Mortmain and Charitable Uses Act, 1891, became law, and therefore, though at the date
of the will the testator was not in a position to give real estate or impure personalty for
charitable purposes, he was able to do so at the date of his death. The question was whether
the gift to the Brompton Hospital was enlarged so as to include property of that descrip-
tion, and the Court of Appeal, affirming North J, held that it was, and the judgment of
Lindley LJ is, in my opinion, conclusive of the present case. After referring to s. 9 of the
Mortmain and Charitable Uses Act, 1891, he says: “Combining this section with s. 24 of
the Wills Act, the result appears to me to be that, if a testator devises or bequeaths to a
III. Succession 883
charity all the property which he can by law so devise or bequeath, the charity will take
whatever property answers this description at the testator’s death, and not only that which
answered the description when he made his will. Such a devise or bequest would, I
apprehend, clearly include property which a testator acquired a right to dispose of under
a general power conferred upon him after he made his will. An extension, whether by a
statute or otherwise, of a testator’s power of disposition in the interval between the mak-
ing of his will and of his death does not alter the meaning of his language, although such
extension will necessarily enlarge the legal effect of that language by making it apply to
more objects than previously it would have applied to.” In the present case Mr. Bisschop
conceded that though at the date of the will one-fourth only of her estate was at the dis-
posal of the testatrix, yet, if the Dutch law had been altered so that one-half could have
been left by her to her husband, the will would have operated on that one-half; but he
contended that, though that would have been so if the law had been altered, it was not so
if the alteration was due to a change in the status of the testatrix. That contention, however,
seems to me to be disposed of by the language of Lindley LJ, whose words are: “An exten-
sion, whether by a statute or otherwise.” In the present case I take the true meaning of
this will to be, not a gift by the testatrix of three-fourths of her estate to her children, but
a constitution of her husband as her heir or universal legatee so far as she could so con-
stitute him, recognizing at the same time that other persons might become entitled to
their legitimate portion in her estate. The legitimate portion having been swept away by
reason of the change of domicil, the result is, not that the meaning of the will is in any
way altered, but that the area of the property over which the will takes effect is enlarged
and the whole of the testatrix’s residue instead of one-fourth share only goes to the husband.
NOTES
1. Are the two decisions involving the Groos estate consistent? Are they necessary to give
effect to the testatrix’s intention? Does a consideration of the testatrix’s intention beg the
question about what effect the subsequent marriage should have on the validity of the
will—that is, under what circumstances might the testatrix have assumed that her will was
no longer valid at the time of her death?
2. Is the result of the two cases that a false conflict has been created—a result that would
not be reached under either domestic law? Do the facts suggest that this may not be such a
negative result?
3. Personal Capacity
Several academic authorities suggest that personal capacity to make a will disposing of
movable property should be governed by the law of the testator’s domicile at the time the
will is made rather than the testator’s domicile at the time of death. According to the first
edition of Jean-Gabriel Castel, Canadian Conflict of Laws, vol 2 (Toronto: Butterworths, 1977)
at 450: “To adopt another rule would be absurd as at the time of making his will, the testator
cannot foresee where he will be domiciled at the time of his death.” Perhaps it would be
absurd to apply the last domicile to invalidate a will that was made years earlier, on the basis
of lack of personal capacity. However, would it be absurd to imagine that a testator might
not rely on a rule invalidating his or her will at the time that it is made? Would a rule that held
the will valid under the deceased’s last domicile be any more absurd than the domestic rules
that sometimes allow for the subsequent ratification of acts done by people who lack cap-
acity because of age or mental infirmity? In the latest edition, Walker simply states (at
para 27.4.a, n 2) that the governing law “should be the law of the testator’s domicile at the
time of the making of the will”; see also Collins, para 27R-023. What would be a question of
personal capacity, as distinguished from a question of essential validity?
What law governs capacity to make a will disposing of immovable property? If the
immovable property is in the forum, must the court apply the lex situs or, for example, could
it apply the law of the domicile upon death?
4. Interpretation or Construction
In interpreting a will that has been validly made, it seems appropriate to try to determine
what governing law the testator might have had in mind, and to use that law for the inter-
pretation. Just as contract-makers bargain in the shadow of the law, so too do testators write
their wills against the background of a set of legal presumptions. There could be a fixed
(albeit presumptive) rule to determine what law the testator had in mind, but English and
Canadian courts seem to have shied away from adopting one. Instead, they have attempted
to determine the testator’s intention in a more contextual way. The conclusions in individual
cases may not always be convincing, and it may be tempting to speculate that the conclu-
sions are based on other unexpressed considerations.
In some provinces there are provisions similar to s 39 of the Ontario Succession Law Reform
Act, RSO 1990, c S.26:
Nothing in sections 34 to 42 precludes resort to the law of the place where the testator was
domiciled at the time of making a will in aid of its construction as regards an interest in land or
an interest in movables.
Does this section recognize a general rule that testators are presumed to intend their wills
to be interpreted by the law of their domicile when they drafted them? In some cases, this
may seem like their obvious intention at the time of drafting, but is that the relevant time?
Compare, for instance, the rule of the domestic law that a will is to be construed, with refer-
ence to the property comprised in it, to speak and take effect as if it had been executed
immediately before the death of the testator unless a contrary intention appears by the will.
Note also the following standard provision—for example, s 38 of Ontario’s Succession Law
Reform Act, above—in provincial legislation:
A change of domicile of a testator occurring after the will is made does not … alter its con
struction.
Re Cunnington
[1924] 1 Ch 68
EVE J:
The testator died on July 7, 1919, an English subject domiciled in France, having made
a will on August 12, 1915, in England and in English form, whereby he disposed of his
residuary estate in these terms: [His Lordship read the residuary gift in the will.] Two of
III. Succession 885
the residuary legatees died in his lifetime without issue, and if the will is to be construed
according to English law, there was an intestacy as regards two-tenths of the residue. But
as the testator died domiciled in France his will, so far as personal estate is concerned,
ought prima facie to be construed according to French law, and if so, it is admitted that
there is no intestacy and that the whole residue is equally divisible amongst the eight
surviving legatees. The real question I have to decide is whether there is any sufficient
evidence of an intention on the part of the testator to exclude the operation of the prima
facie rule I have mentioned. On behalf of the next of kin it has been argued that if the
whole will is looked at and its contents examined it is obvious that this Englishman must
have contemplated and intended that it should be construed according to English law. It
is certainly a will which would accurately be described as an English will, the benefactions
are given almost exclusively to English persons resident in England, the only exceptions
being the testator’s domestic servants, and finally the property comprising the residue is
in England. Does this combination of circumstances exclude the rule? I do not think it
does—indeed I think the authorities show that it does not. The facts in Anstruther v.
Chalmer [(1826), 2 Sim 1] were very similar. There the testatrix, a Scotswoman who died
domiciled in England, had made a will in Scotland and in Scotch form containing many
expressions peculiar to Scotch law. Amongst other bequests was an absolute one to a lega-
tee who predeceased her. According to English law that bequest would have lapsed, but
not so according to Scotch law; and on behalf of those claiming under the legatee it was
argued that having regard to the facts that the instrument was made in Scotland, in Scotch
form and by a lady of Scotch nationality, it was obviously intended to be construed accord-
ing to the law of Scotland. The Vice-Chancellor however held that there were no sufficient
grounds for not construing the will by the law of the domicil.
In Bradford v. Young [(1885), 29 Ch D 617] it was said by the Court of Appeal that if
it could be ascertained, either by direct statement in the will or by a combination of cir-
cumstances, that the testator intended to exclude the operation of the rule the Court was
bound to give effect to that intention. As I cannot find anything here which, either directly
or by implication, establishes an intention to exclude the rule, the will falls to be construed
according to the law of the domicil and the residue goes to the eight survivors.
NOTES
1. See also Re Manners, [1923] 1 Ch 220, where the English court interpreted a will accord-
ing to English law, being the law of the last domicile of the deceased, even though the will
was written in Spanish and was made in Nicaragua at a time when the testator was resident
there.
2. Castel, above, at 465-66 states that s 39 of the Ontario Succession Law Reform Act
(reproduced above) “recognizes the general rule that a will is to be interpreted in accordance
with the law intended by the testator which, in the absence of indications to the contrary, is
presumed to be the law of his domicile at the time the will was made.” Unfortunately, the
cases referred to in the supporting footnote do not support the text. In fact, the only judicial
statement of such a presumption in these cases is the obiter dictum in Re Bessette, [1942] 3
DLR 207 at 208 (Ont H Ct J), in which Hope J refers to his own earlier judgment in Re Wilkison,
[1934] 1 DLR 544 at 546 (Ont H Ct J), in which he in fact stated a presumption in favour of the
last domicile of the testator. In the current edition, the presumption in favour of the law of
the testator’s domicile at the time of making the will is repeated, though somewhat more
circumspectly in the form of a prima facie proposition: Walker at para 27.4.e. This is consistent
with the recent decision in Curati v Perdoni, [2012] EWCA Civ 1381 at para 16; see also Collins
at para 27R-057.
3. Would it be better, in the absence of express intention as to the governing law—for
example, a choice of law clause in the will—for the court to objectively determine the sys-
tem of law with which the will is most closely connected rather than attempt to ascertain the
testator’s intent?
Montano v Sanchez
[1964] SCR 317, 44 DLR (2d) 208
RITCHIE J:
This is an appeal from a judgment of the Court of Appeal for Ontario [34 DLR (2d)
14, [1962] OR 762] which set aside the judgment of Landreville J and gave an affirmative
answer to the following question upon which the opinion, advice and direction of the
court had been sought at the instance of the trustees of the estate of the late John Duff
MacDonald: “Is Maria Guadalupe Wardrope Sanchez entitled to share in the estate of
John Duff MacDonald as issue of John Duff MacDonald Wardrope?”
John Duff MacDonald was domiciled at Hamilton, Ontario, at the date of his death on
March 10, 1901, and by his last will provided inter alia that:
[The court quoted that part of the will that left property to “the issue of any deceased
grandchild living at the period of division.”]
The testator’s grandson, John MacDonald Wardrope, hereinafter referred to as John

Wardrope, who died intestate and domiciled in the state of Michoacan in the Republic of
Mexico before the death of the last surviving life tenant under the terms of the said will,
left two surviving daughters, one of whom, Elizabeth Lucia MacDonald Wardrope was
born on April 3, 1929, the issue of his lawful marriage with Lucia Montana Bosque, and
the other of whom, Maria Sanchez, was born on December 12, 1937, the child of his union
with Gudelia Sanchez, to whom he was not married.
It appears to be agreed by all concerned that John Wardrope was domiciled in Mexico
at the date of the birth of his second daughter and at the time when he acknowledged her
to be his child. Nor is it questioned that being still domiciled in Mexico, he married
Gudelia Sanchez in a religious ceremony on January 22, 1953, although they were never
married by the civil ceremony which is a prerequisite to legitimation by subsequent mar-
riage under the Civil Code of Mexico.
The sole question to be determined is whether Maria Sanchez is one of the “issue of
any deceased grandchild” of the testator so as to be entitled under the law of Ontario to
share in that portion of the personal estate of the testator now available for distribution
among such issue.
It is conceded that in construing an Ontario will the word “issue” is to be treated as
meaning “legitimate children,” and it is accordingly first necessary to determine the status
of any child claiming to be entitled under such a will.
III. Succession 887
Some of the difficulties to which the present circumstances give rise were expressed
by Kay J in Re Andros, Andros v. Andros (1883), 24 Ch. D 637 at pp. 639-40 in the following
language:
A bequest in an English will to the children of A means to his legitimate children, but the
rule of construction goes no further. The question remains who are his legitimate children.
That certainly is not a question of construction of the will. It is a question of status. By what
law is that status to be determined. That is a question of law. Does that comity of nations
which we call international law apply to the case or not? That may be a matter for consider-
ation, but I do not see how the construction of the will has anything to do with it. The matter
may be put in another way. What did the testator intend by this gift? That is answered by the
rule of construction. He intended A’s legitimate children. If you ask the further question, Did
he intend his children who would be legitimate according to English law or his actual legit-
imate children? How can the rule of construction answer that?
Before the enactment of the Legitimacy Act, 1926 (UK), c. 60, it was well established
in England that in the case of a child born out of wedlock whose father was domiciled in
that country at the time of its birth, the indelible taint of bastardy could not be removed,
but at least since the early 1880’s, it has been equally well recognized in the English courts
that if the laws of the country in which the putative father was domiciled at the date of
the birth of an illegitimate child provide for legitimation by a subsequent marriage of the
parents, then such a child would be recognized as being legitimate for the purpose of
inheriting personal property in England if the father, being still domiciled in the foreign
country, complied with the condition of marrying the mother.
[The court cited authority.]
The principle underlying many of these decisions is to the effect that recognition of
legitimation by subsequent marriage is predicated upon the domicile of the father at the
date of birth having given to the child a capacity of being made legitimate by such mar-
riage (see Re Grove, supra, [(1887), 40 Ch D 216] per Cotton LJ at p. 233), and it appears
from the decision of the majority of the Court of Appeal in England in Re Luck’s Settlement
Trusts, Walker v. Luck et al., [1940] Ch. 864, that that court would have extended this
principle to include legitimation by recognition if the father in that case had been domi-
ciled in the foreign jurisdiction at the date of the child’s birth. We are not concerned in
the present case with the somewhat vexed questions which have been raised by legal
writers as to the soundness of the proposition that subsequent legitimation should be
made dependent for its validity upon the law of the domicile of the father at the date of
the birth because, as has been indicated, it is conceded that John Wardrope was domiciled
in Mexico at all material times, and I am of opinion that under the circumstances of the
present case, the status of Maria Sanchez is to be determined according to the law of the
state of Michoacan. The question to be decided is whether that status is such as to enable
Maria Sanchez to participate in the estate of the late John Duff MacDonald as one of the
“issue” of his grandson.
In the case of Re Donald, Baldwin v. Mooney, [1929] 2 DLR 244, [1929] SCR 306, this
court declined to apply the cases dealing with legitimation by subsequent marriage to the
case of a foreign adoption and considered that the question was not one of status but
rather whether the child in question was a child within the meaning of the will which the
court was there considering. “Adoption” appears to me to differ from “legitimation by
recognition” in the sense that the latter can only apply to an illegitimate natural child of
the father who recognizes it whereas the former may apply to a legitimate orphan who is
adopted by strangers in blood. This would, in my opinion, provide a distinction between
the case of Re Donald, supra, and the present case, but in any event, the Donald case is,
in my view, to be regarded as subject to the limitations explained by Judson J in Re Gage,
Ketterer et al. v. Griffith et al., 31 DLR (2d) 662 at p. 669, [1962] SCR 241 at pp. 249 and
250, to which reference is made in the reasons for judgment of MacKay JA.
It is to be noted that after her father’s death, Maria Sanchez obtained an order from
the appropriate court in the state of Michoacan which read, in part, as follows:
It is hereby declared for all legal effects that Maria Guadalupe Wardrope Sanchez is the
daughter of John Duff MacDonald Wardrope having the right to bear his name and to receive
a portion of the estate and a living allowance as prescribed by law.
The courts in the present case have been assisted in determining the law of the state
of Michoacan by the evidence of Tomas Sanchez Baylon, a lawyer who practised for the
last ten years in that state and a substantial part of whose evidence is reproduced in the
reasons for judgment rendered on behalf of the Court of Appeal of Ontario by MacKay JA.
• • •
From the whole of Mr. Baylon’s evidence, I conclude that all the rights and capacities
and obligations requisite for the purpose of attaining the status of a legitimate child in
the province of Ontario are enjoyed by Maria Sanchez by virtue of the law of Michoacan.
There do, however, appear to be certain limitations having to do with parental control
and with the father’s inability to bring a child born out of wedlock into his home without
the consent of his wife, which afford a distinction recognized in Mexico and giving rise
to the differentiation there made between a natural child who has been recognized by its
parents and is still characterized as “illegitimate” and a child who is characterized as
“legitimate” by reason of its parents having been married in a civil ceremony after its birth.
In the course of his most persuasive argument, counsel for the appellant submitted that
the rights which are given to Maria Sanchez in Mexico are not accorded to her by virtue of
her having attained the status of “legitimate child” in that jurisdiction, and that unless the
Court of Appeal of Ontario could have found (which on the evidence it could not do) that
under the law of Mexico she is a legitimate child of her father, it was bound to find that under
that law she was illegitimate and therefore under the Ontario law could not inherit.
In support of this proposition reliance was placed on the decision of Hall VC in
Atkinson v. Anderson (1882), 21 Ch. D 100, where it was held that the recognized natural
children of an English native domiciled in Rome although capable of taking property by
succession according to Roman law were to be regarded as “strangers in blood” to their
natural father for the purpose of construing s. 10 of the Succession Duty Act, 1853.
This case had to do with the rate of tax to be levied on the proceeds of the sale of
English real estate which were to be divided under the terms of a valid English will
between the testator’s “four natural sons” who were named in the will, and the sole ques-
tion was whether these sons were “lineal issue of the testator” and as such liable to pay
duty at the rate of one percent only or “strangers in blood” to him and as such liable to
pay at the rate of ten percent.
III. Succession 889
This decision appears to me to be an isolated case turning on the construction of the

statute in question, and it does not, in my view, stand as an authority for the proposition
that the Court of Appeal of Ontario is precluded from looking behind the name which
the foreign law attaches to the sum total of the capacities and obligations accorded to a
person in the position of Maria Sanchez, so as to determine whether these capacities and
obligations would in fact be recognized in the province of Ontario as fulfilling the require-
ments necessary to the status of a legitimate child in that province.
In my opinion the title of “legitimacy” or “illegitimacy” when attached to the status of
an individual in any jurisdiction reflects the capacity or lack of capacity which the law of
that jurisdiction recognizes in the case of the individual concerned. Just as “legitimate”
when used in relation to a child is only a symbol employed to designate the legal rights
and obligations which flow from being born in wedlock, so the word “illegitimate” is used
to denote the limitations of capacity which attach to being born out of wedlock, and the
word “legitimation” is descriptive of the legal effects incident to being relieved of those
limitations.
Maria Sanchez, the sum total of whose capacities and obligations under the law of the
state of Michoacan include all those of a child born in wedlock in Ontario, in my opinion
has the status of a legitimate child in that province for the purpose here in question and
the fact that some social limitations may attach to her position in Mexico, and that her
status in that country is therefore described as “illegitimate,” can, in my view have no
effect on the standards required in order to qualify as a legitimate child for the purpose
of benefiting as one of “the issue” of the grandson of an Ontario testator.
For these reasons, as well as for those stated in the very full judgment delivered by
MacKay JA, I would dismiss this appeal with costs of all parties to be paid out of the trust
fund established under the will of the late John Duff MacDonald. The costs of the trustee
to be taxed on a solicitor-client basis.
Appeal dismissed.
NOTES
1. If the question is whom did the testator intend to benefit from his will, do you think it
is realistic to presume that he (or his legal advisers) had in mind the conflicts rules governing
legitimation? If the testator had drafted the will without legal advice (which in Montano v
Sanchez seems unlikely), it may seem just as artificial to presume that he knew the domestic
law concerning bastardy (although public awareness and sensitivity to that issue was prob-
ably quite different then from what it is now).
2. Would there be less, or more, doubt about what the testator meant by “issue” if he had
been domiciled in Mexico when the will was made?
3. Compare Montano v Sanchez with Ketterer v Griffith, [1962] SCR 241, 31 DLR (2d) 662, in
which a testator died in 1921 leaving a life estate to his daughter with the remainder to her
children. At the time of the testator’s death the daughter had no children, but subsequently,
after the passage of adoption legislation, adopted three. The daughter died in 1959 survived
by the three adopted children. The Child Welfare Act, RSO 1960, c 53 provided that adopted
children had the same status for all purposes as children born in lawful wedlock. Neverthe-
less, the Supreme Court of Canada held that the question was not one of status but of
construction of the will and that, as a matter of construction, the will excluded adopted
children. Note, however, that the law in relation to adoption changed after the testator’s
death, rather than between the time of making the will and his death. A few years after Ket-
terer v Griffith was decided, Ontario amended its legislation to provide that any reference to
a child or issue in a will is deemed to include an adopted child: see Re Fulton (1978), 19 OR (2d)
458 (CA).
4. In Re Fergusson’s Will, [1902] 1 Ch 483, a domiciled Englishman bequeathed a legacy to
his niece domiciled in Germany and provided that, in the event she predeceased him, the
legacy was not to lapse but was to be divided “amongst the next of kin” of the deceased
legatee. The niece predeceased the testator and a question arose as to the meaning of this
gift. Claims were made by the half sister, nephews, nieces, and stepchildren of the niece.
Under German law (the local law of Hamburg), brothers and sisters of the half blood were
not recognized as being in the same degree of relationship as brothers and sisters of the
whole blood, while under English law they were. Byrne J held that the will should be inter-
preted according to English law and distinguished case law that interpreted “children” in an
English will to include children who had acquired the status of legitimacy under a foreign
legal system. The judge commented (at 486-87):
Now, it is said here that, this being a gift in an English will to the next of kin of a German lady, it
is a question of status who are the next of kin; in my opinion, that is not the true view of the law.
It appears to me I must construe the will first, and I find the gift means a gift to the legatee’s
nearest blood relations; it may well be that, in consequence of the legatee being a German,
different persons may be entitled from those who would have taken had she been an English
woman, as, for instance, suppose she had left children legitimate according to German law, but
illegitimate according to English law, these children would take precedence, and would thus
oust a sister or a brother who would otherwise have been the persons entitled according to
English law, and then the question of status would come in; but that is a different thing from
what [counsel for the niece] asks me to do here, namely, to put an interpretation upon the
words used by this testator which shall entirely exclude the English construction of those words.
I have the words “next of kin” in an English will: I ask myself, what do they mean? The answer is
they mean nearest blood relations in the ascending and descending line, including those of the
half-blood, and I see no authority in any of the cases which have been cited to me for saying that
I ought to construe these words as meaning next of kin according to German law.
5. See also Re Bessette, [1942] 3 DLR 207 (Ont H Ct J), where the court held that the mean-
ing of “heir” in a will made by an Ontario domiciliary was to be determined by Ontario law
and not the personal law of the foreign legatee. More recently and to the same effect, see
Kelemen v Alberta (Public Trustee), 2007 ABQB 56 at paras 53-57, 413 AR 305 concerning the
meaning of “age of majority.”
5. Revocation
The rules for the revocation of wills are not uniform in Canada. In most provinces, a will can
be revoked by the execution of another will, by some written declaration of an intention to
revoke the will, or by some act of destroying the will with the intention of revoking it. In
some provinces the will may also be revoked by marriage, unless the will was declared to be
made in contemplation of marriage. Note also s 17 of Ontario’s Succession Law Reform Act,
RSO 1990, c S.26, which provides:
III. Succession 891
17(1) Subject to subsection (2), a will is not revoked by presumption of an intention to

revoke it on the ground of a change in circumstances.
(2) Except when a contrary intention appears by the will, where, after the testator makes a
will, his or her marriage is terminated by a judgment absolute of divorce or is declared a nullity,
(a) a devise or bequest of a beneficial interest in property to his or her former spouse;
• • •
[is] revoked and the will shall be construed as if the former spouse had predeceased the
testator.
For a consideration of the conflicts issues raised by this section, see Page Estate v Sachs
(1990), 72 OR (2d) 409 (H Ct J), aff’d without considering the conflicts issues (1993), 12 OR (3d)
371 (CA).
It is not easy to state what law should determine whether a will has been effectively
revoked in these various circumstances—at least not so as to formulate a general rule. The
Canadian case law has generally considered the relevant choice of law issue in two con-
texts—where there has been a subsequent will or subsequent marriage.
A series of Canadian cases supports the rule that a will can only be effectively revoked by
a subsequent will if the later will is formally and essentially valid under the law identified by
the appropriate choice of law rules. These cases have involved the effect of a subsequent
holograph will on the disposition of local land at a time when such wills were not formally
valid in the forum to dispose of land. By holding the earlier will revoked as to movable prop-
erty and not as to immovable property, the cases create the obvious danger of defeating the
testator’s intention, but this is part of the broader problem inherent in the separate treat-
ment of movable and immovable property.
The relevant choice of law to govern the effect of a subsequent marriage on the validity
of a will has been considered by few Canadian and English cases: see e.g. Allison v Allison
(1998), 56 BCLR (3d) 1 (SC).
Davies v Davies
(1915), 24 DLR 737 (Alta SC)
STUART J:
The initial question is whether, in determining whether the marriage revoked the will,
recourse should be had to the law of Alberta or to the law of the state of Montana. The
two grounds upon which it was contended that the law of Alberta should be applied in
determining the question were, first, that the chief property passing by the will was real
estate within Alberta; and second (though I did not understand this to be very much
pressed), that the testator died domiciled in Alberta.
In my opinion the law of Montana is the proper law to apply. The deceased was domi-
ciled there at the date of his first marriage, at the date of his will and at the date of his
second marriage. Neither at the date of the will nor at that of the second marriage did he
apparently have any real estate in Alberta. I am quite unable to see what possible relation
to the question of the effect upon the will of his subsequent marriage, the fact that long
afterwards he acquired some real estate in Alberta can have. If the marriage revoked the
will, then it did so when it took place. If it did not revoke the will, then the will continued
to be a good one if otherwise valid.
The exact point invoked seems to be dealt with in a note in Dicey, Conflict of Laws,
2nd ed., at pp. 505-6, where it is said:—
The applicability to a will of English land of the rule that marriage is a revocation thereof
may well appear to depend on the lex situs, but that matter is (semble) governed by the law
to which husband and wife become subject at the time of the marriage, i.e., generally speaking
the law of the matrimonial domicile.
The author refers to Re Martin, Loustalan v. Loustalan, [1900] P 211. The case is not
very directly in point, but on p. 240 Vaughan Williams LJ says:
The rule of the English law which makes a woman’s will null and void on her marriage is part
of the matrimonial law and not of the testamentary law.
This statement may seem strange when it is on the Wills Act that the direct enactment
is made that marriage revokes a will. But I rather incline to the view that the explanation
of what was in the judge’s mind is to be found in the circumstances that in that case the
court was enquiring into the question whether in an English court the law of France or
the law of England should be applied and that the law affecting the marriage might well
be that of France and the law affecting the will might be that of England or vice versa.
What he meant was, I think, that for the law relating to the effect of marriage upon a will
an English court must go to the law of the matrimonial domicile and not to the law of the
place where the property affected by the will is situated.
It no doubt is true that when the validity of a will is in question with respect to the
requisites of form and execution, this matter will be determined with respect to realty in
Alberta according to Alberta law and that it may be held bad in respect to that and yet be
a good will as to personalty if validly made according to the law of the testator’s domicile.
Pepin v. Bruyère, [1902] 1 Ch. 24. But the question of validity in respect of form as well
as questions of interpretations are very different from the question whether a will, per-
fectly valid as to form even when it is to be applied to real estate in Alberta, was revoked
by a subsequent marriage. As Vaughan Williams LJ says, that it is a matter not of testa-
mentary law but of matrimonial law.
It is easy to misunderstand the decision in Loustalan v. Loustalan, [1900] P 211. The
main contest was over the question of the domicile of the testatrix and her husband. The
controlling opinion upon appeal was that the domicile was English at the time of the
marriage and the majority therefore held that even with regard to moveables, the marriage
revoked the will. Lindley MR in his dissenting opinion held the will not to have been
revoked with respect to moveables because he thought the matrimonial domicile was
French and by French law the will was not revoked by marriage. But he expressly said
(p. 234) that in his opinion the will could not be held good as to the leaseholds which
were real estate and to which the lex domicilii did not apply. The majority on account of
the view they took of the question of domicile did not need to take much notice of the
distinction between moveables and immoveables. It would seem to me, however, that Dicey
is right in the suggestion he makes in the note referring to the case which I have quoted.
If the rule as to revocation of a will by marriage is part of the matrimonial law and not of
the testamentary law, it is difficult to see why or how there can be any distinction in this
respect between moveables and immoveables. It is true that in a sense the rule as applied
to a woman’s will may be looked upon as more peculiarly part of the matrimonial law
III. Succession 893
than as applied to a man’s will because at common law it was only a woman’s will, but not
a man’s will which was revoked by marriage. The revocation of a man’s will by marriage
is statutory law. Marriage had not such effect upon a man’s will prior to the Wills Act. But
in my opinion the extension of the rule to a man’s will by statute which deals with the
requisites of a proper will does not prevent the rule as applied to a man’s will from also
being looked upon as part of the matrimonial law.
I am bound to say that there would appear to me to be something exceedingly illogical
if not fatuous in saying that although a will may continue to be perfectly good after mar-
riage, because at the time of marriage no real estate in this province was possessed by the
testator, yet the very moment he takes some of his money, his personal property, and turns
it into real estate in Alberta, then in respect to that the will was revoked. Even though the
testator living and domiciled in Montana may not have had the slightest intention at the
date of his marriage of acquiring Alberta real estate, yet the Alberta court must hold that
with respect to any property which he might in future there acquire the will was revoked
by the marriage. Of course if he had owned real estate in Alberta at the date of the mar-
riage then the absurdity would not be so great; but even in that case I think the only
reasonable rule to apply is the rule prevailing in the matrimonial domicile. This case seems
to furnish an opportunity for the court to depart somewhat from the rigid rules which a
reverence for real estate and everything connected with it has introduced in England. Of
course English law prevails here by virtue of the statute, but when there is no direct pre-
cedent to be found as there appears not to be, I think it safe to adopt the suggestion of
such an authority as Dicey, particularly when the suggestion appeals to one as conformable
to reason, convenience, and common sense.
I hold therefore that to decide whether the marriage revoked the will we ought to look
to the law of Montana. It was part of the stated case not quoted above that the parties
agreed that I should take the revised Code of Montana of 1907 as sufficient proof of the
law of Montana; sec. 4747 of that Code reads as follows:—
If after making a will the testator marries and the wife survives the testator the will is revoked
unless provision has been made for her by marriage contract or unless she is provided for
in the will or in such way mentioned therein as to show an intention not to make such pro-
vision, and no other evidence to rebut the presumption of revocation must be received.
By clause 4 of this will the testator said:—

If I should again marry, as it is now my purpose to do, and if no children should be born to
me as a result of said contemplated marriage, then and in that event I give, devise, and
bequeath unto my proposed wife and unto my son by my divorced wife, Ernest Vernon
Davies, all the said rest, residue and remainder of my estate, share and share alike.
The disposition already made only amounted to the sum of $16 in all, so that he prac-
tically devised one-half of his estate to his intended wife.
Upon the argument two things were taken for granted. First, that there were no chil-
dren of the second marriage, and second, that the testator in fact married the person to
whom he was referring in the above-quoted clause from the will. He does not mention
her name in the will. Even if there had been issue, provision is made for them in the will
and a preceding clause of the Montana Code saves the will in such a case. The will was
made on August 5, 1903, and the marriage was in October, 1903. Upon the assumption
that he married the person intended, the effect of the section quoted is clearly to save the
will and prevent its revocation by the marriage.
With regard to a possible change of domicile to Alberta, I think the effect of sec. 33 of
the old North West Territories Act, which is still in force here, is that a change of domicile
will not revoke a will. Recourse to Lord Kingsdown’s Act is quite unnecessary upon that point.
The administrator with the will amended is therefore advised that the will and letters
of administration still stand good. The costs of all parties will be paid out of the estate.
Order accordingly.
NOTES
1. See also Re Martin, [1900] P 211; Seifert v Seifert (1914), 23 DLR 440 (Ont Sup Ct J); and the
criticism by Falconbridge at 114-15.
2. The statute law in Alberta has changed since Davies. Section 23(2)(a) of the Wills and
Succession Act, SA 2010, c W-12.2 provides that a will is not revoked by a marriage of the testa-
tor occurring on or after February 1, 2012.
3. In Davies v Collins, 2011 NSCA 79, the testator was dying in hospital when he entered
into an in extremis marriage. Such a marriage was valid under the law where he was (Trinidad),
but not under the law of his domicile at the time (Nova Scotia). Under both laws, marriage
revoked an earlier will, but the law of Trinidad had an exception to this for in extremis marriages.
The beneficiary under the prior will argued that it would be inconsistent for the court to
treat the marriage as valid but not give effect to the Trinidad exception for such marriages.
The Court of Appeal disagreed. It followed the rule that the effect on a will of a subsequent
marriage is determined by the law of the testator’s domicile at the time of the marriage. It
stated (at para 29):
The choice of domicile at the time of marriage best avoids the eccentric succession difference
between Trinidad and Nova Scotia arising from a marriage in extremis … accepting the validity
of the Trinidadian marriage should not oblige this Court to recognize succession consequences
unknown to Nova Scotia law and inimical to Dr. Davies’ presumed intention.
Do you agree with this reasoning? See Collins at para 27R-086.

The court also held that the rule should apply to both movable and immovable property
(at paras 18-19 and 31) rather than using the lex situs for the latter.
IV. DEPENDANTS’ RELIEF LEGISLATION

At common law a testator had unfettered discretion to dispose of all of his or her property.
However, provincial legislation now provides that the court can make an order for the
adequate support of the testator’s dependants. This legislation varies from province to prov-
ince in the definition of dependants and the amount of discretion given to the courts.
The provincial statutes do not contain specific conflict of laws provisions, but it is gener-
ally assumed that the legislation affects the essential or intrinsic validity of a will, so that
those choice of law rules (under statute or at common law) apply—generally, the law of the
last domicile of the deceased for movable property and the lex situs for immovable property.
IV. Dependants’ Relief Legislation 895
However, the statutes confer a judicial discretion on local courts that foreign courts may be
reluctant to exercise. This may not be a significant hurdle where the only conflict is in the
definition of dependency. However, some provinces, such as British Columbia, give the
courts a wider discretion than that found in other provinces: see Wills, Estates and Succession
Act, SBC 2009, c 13, s 60.
This difference in judicial discretion may account for the reluctance of provincial courts
to assume jurisdiction on the basis of local movable property when the deceased has died
domiciled abroad. Thus, the choice of law rules may be linked to the jurisdictional rules.
Re Urquhart Estate
(1991), 3 OR (3d) 699, 82 DLR (4th) 604 (Div Ct)
STEELE J:
This is an appeal from Austin J wherein he held that a life insurance policy (the “pol-
icy”) on the life of Charles Urquhart (the “deceased”) could not be attached under s. 59
of the Succession Law Reform Act, RSO 1980, c. 488 (the “SLR Act”) to provide support
to the deceased’s common law spouse because it was a group policy of insurance and
therefore not within the provisions of s. 72(1)(f) of the SLR Act. He also concluded that
the policy was not subject to the jurisdiction of this court and may not be enjoined in
these proceedings. He specifically referred to the decision in Moores v. Hughes (1981), 11
ETR 213, 37 OR (2d) 785, 136 DLR (3d) 516 (HC) and had difficulty in accepting the
interpretation of s. 72(1)(f) imposing a beneficial ownership in the deceased.
Austin J found that the deceased was domiciled in Ontario at the time of his death,
while resident in Florida.
The deceased was an employee of Mitel Incorporated (“Mitel US”), an American cor-
poration. Mitel Limited (“Mitel Canada”), the parent company of Mitel US, negotiated
with Canada Life Assurance Company (“Canada Life”) for group life policies for its
Canadian employees at the same time as group life policies were negotiated for the lives
of the Mitel US employees and Mitel UK employees. There are some differences between
the Canadian and US policies, one of which is that the US policy is payable in the United
States. Mitel Canada has its head office in Ontario. Mitel US has its head office in Florida.
Canada Life has its head office in Ontario.
The policy was between Mitel US and Canada Life and covered only employees that
worked for Mitel US in the United States. The policy was issued at Toronto, payable in
United States dollars at Detroit, Michigan and made no mention of what territorial law
governed the terms of the contract.
The premiums were paid by Mitel US. The administrative functions relating to the
policy were handled by Mitel US and not Canada Life. This included the death claims.
The death claims were made by Mitel US to Canada Life in Toronto, and the cheques
therefor were issued in Toronto but were drawn on a bank in Detroit. Michigan law
required Canada Life to hold funds on deposit in the United States to cover all potential
claims under policies issued in the United States.
The policy was a group insurance policy covering death, accidental death and disability
insurance. Insofar as any individual concerned it was a term policy with no cash surrender
value. The policy states that the policyholder is Mitel US and that the insurance on any
person will terminate on the date when the policy is no longer in force or when the person
is no longer an employee or is otherwise disqualified.
The policy provides that after termination of an insured under the policy, the insured
may apply to Canada Life for a policy of life insurance on any plan with level premiums,
other than term insurance, without further evidence of insurability. The conversion priv-
ilege, however, excludes many of the benefits provided under the policy in question and
does not protect the insured as to the level of premium.
The deceased applied for coverage under the policy in Washington, DC, and at all
times thereafter, until his death, worked for Mitel US and resided in the United States.
The beneficiary under the policy and the deceased’s will was the deceased’s son, Dolisie,
who resides in the province of Quebec. No provision was made in the will for the support
of the spouse, who resides in Florida.
The learned trial judge found that the insurance proceeds did not form part of the
estate, pursuant to s. 173(1) of the Insurance Act, RSO 1980, c. 218, and therefore s. 59 of
the SLR Act would have no application; the policy was owned by Mitel US and not the
deceased, and therefore s. 72(1)(f) of the SLR Act did not apply.
With a partial exception, Canada Life has been enjoined from paying the proceeds of
the policy to Dolisie, pending the determination of this appeal. The appellant requests
the continuation of such injunction until her claim under the SLR Act has been deter-
mined. If it were not for the injunction, Canada Life would have paid the proceeds to
Dolisie under the terms of the contract. Canada Life is concerned in this action because
it may be ordered to pay the proceeds twice; in the United States, under United States
contract law and in Ontario, if the appellant is successful. This court allowed fresh evi-
dence to be filed that a judgment has been obtained by the deceased’s estate in Florida
against Canada Life and that a garnishee has been made upon it in Michigan. I do not
believe that this evidence alters or enlarges the basic issues that were before the trial judge
or this court.
The group policy is a contract between Canada Life and Mitel US covering the lives of
the members of the group. There was no contractual relationship between Canada Life
and the deceased. Either Canada Life or Mitel could have terminated the policy without
the consent of the deceased. Section 148 of the Insurance Act provides that the deceased
was an insured and s. 178 of the Insurance Act gave the right to the deceased to sue upon
the group policy to enforce a right given to him under the group policy if the policy still
existed. However, the Insurance Act does not state that he is the owner of the policy. Even
if he were, the following sections of the Insurance Act are applicable:
176(1) Notwithstanding the Succession Law Reform Act, where in a contract or in an
agreement in writing between an insurer and an insured it is provided that a person named
in the contract or in the agreement has, upon the death of the insured, the rights and interests
of the insured in the contract,
(a) the rights and interests of the insured in the contract do not, upon the death of
the insured, form part of his estate; and
(b) upon the death of the insured, the person named in the contract or in the agree-
ment has the rights and interests given to the insured by the contract and by this Part
and shall be deemed to be the insured.
• • •
IV. Dependants’ Relief Legislation 897
173(1) Where a beneficiary is designated, the insurance company, from the time of the
happening of the event upon which the insurance money becomes payable, is not part of the
estate of the insured and is not subject to the claims of the creditors of the insured.
These sections, and particularly s. 173(1), provide that the insurance money is not part
of the estate of the insured. The Insurance Act was not referred to in Moores, supra, and I
see no basis for imputing a trust under the Insurance Act. For these reasons, I disagree
with the decision in Moores.
The relevant sections of the SLR Act are as follows:
59. On an application by or on behalf of the dependants or any of them, the court may
make an order suspending in whole or in part the administration of the deceased’s estate,
for such time and to such extent as the court may decide.
• • •
72(1) Subject to section 71, for the purpose of this Part, the capital value of the following
transactions effected by a deceased before his death, whether benefitting his dependant or
any other person, shall be included as testamentary dispositions as of the date of the death
of the deceased and shall be deemed to be part of his net estate for purposes of ascertaining
the value of his estate, and being available to be charged for payment by an order under clause
63(2)(f),
• • •
(e) any disposition of property made by the deceased in trust or otherwise, to the
extent that the deceased at the date of his death retained, either alone or in conjunction
with another person or persons by the express provisions of the disposing instrument, a
power to revoke such disposition, or a power to consume, invoke or dispose of the prin-
ciple thereof, but the provisions of this clause do not affect the right of any income bene-
ficiary to the income accrued and undistributed at the date of the death of the deceased;
(f) any amount payable under a policy of insurance effected on the life of the deceased
and owned by him; and
(g) any amount payable under a designation of beneficiary under Part III.
• • •
(3) Dependants claiming under this Part shall have the burden of establishing that the
funds or property, or any portion thereof, belonged to the deceased.
Nowhere in the Insurance Act, the SLR Act or in the contract is the “owner” defined as such.
In my opinion, para. (f) of s. 72(1) does not include the proceeds of the present policy
because the deceased was not the owner of the policy. I am reinforced in the view that
beneficial trust property is not included in para. (f) because the legislature obviously knew
the nature of trust property by referring to it in a different context in para. (e).
However, even if he were the owner of the policy, the proceeds do not form part of his
estate. The opening words of s. 72 do not contradict the Insurance Act and make them
part of the estate. They merely state that they are “deemed to be part of his net estate for
purposes of ascertaining the value of his estate” for charging purposes.
The law of Ontario, being the law of domicile, is applicable to these matters. Even if
the contract was subject to the law of some jurisdiction in the United States and not that
of Ontario, there is no evidence that such law differs from that of Ontario, and therefore
the decision would be the same.
The money in question does not form part of the deceased’s estate and, in my opinion,
s. 59 of the SLR Act is not applicable. The contract was made in, and the payment is pay-
able in, the United States and the person to whom payment is to be made is in the province
of Quebec. The money is not subject to the jurisdiction of this court, and therefore this
court has no power to enjoin the payment thereof in these proceedings.
Whether or not the proceeds may be deemed to be included for the purposes of cal-
culating whatever charge may be made by the defendant upon the estate is not expressly
before us. I would make no order or finding in that connection.
For these reasons I would dismiss the appeal. The costs of Canada Life on a party and
party basis should be paid from the insurance proceeds. The costs of Dolisie should be
paid by the appellant.
Appeal dismissed.
NOTES
1. Does Ontario law apply to determine who “owns” this insurance policy?
2. If the court had decided that the policy was “owned” by the deceased and could be
included for the purpose of ascertaining the value of the estate, how would this help the
applicant?
3. Why does the court conclude that the “money is not subject to the jurisdiction of this
court, and therefore this court has no power to enjoin the payment thereof in these pro-
ceedings”? Where could the applicant seek relief?
4. In determining whether adequate provision has been made for a dependent, is the
court to consider all of the assets, or only those assets within the scope of its conflict of laws
rules? For an example of a court taking the former approach, see Taylor v Farrugia, [2009]
NSWSC 801.
V. THE CLAIMS OF FOREIGN STATES

The courts’ refusal to recognize or enforce a foreign tax claim (see Chapter 4) may arise in
several different ways. Upon death, claims for unpaid income tax or estate or succession
duties may be raised. These claims can involve matters of administration or matters of suc-
cession. Stringam v Dubois, below, defines the scope of the revenue exception to recognition
and enforcement and illustrates how such claims can arise in the course of administration.
The courts’ treatment of foreign state revenue claims is in marked contrast to their treat-
ment of the claims of foreign creditors.
A related question is whether the courts will recognize the claim of a foreign state to the
property of the deceased when he or she dies intestate and where there are no surviving
next of kin. This has been seen by the English courts as a question of characterization, partly
or wholly determined by the law of the state making the claim. If the foreign state claims by
way of succession, its claim will prevail if its law is the applicable law governing succession.
However, if the foreign state claims by bona vacantia or jus regale, its claim will fail since
property is said to escheat to the state where it is located. The apparent willingness of the
English courts to accept a foreign state’s characterization of its claim as being that of an
V. The Claims of Foreign States 899
ultimate residual heir, and hence a matter of succession, may seem inconsistent with their
attitude toward foreign tax claims. Moreover, it may invite self-serving characterization by
the foreign state.
The rule that property escheats to the state where it is located makes the issue of locating
property particularly important in the case of intangible property and some rights associated
with land. Moreover, for this purpose, property will have to be located in only one jurisdiction.
This means that some rules—for example, that a debt is located wherever it can be enforced—
that are workable for questions of administration may not be workable in this context.
In relation to both a foreign state’s tax claim or claim to assets on intestacy there may be
some need for special treatment of Canadian provincial claims. Enforcement of provincial
tax claims may occur through interprovincial agreement or through the agency of the fed-
eral government. Further, restraint against overreaching provincial tax claims or claims on
intestacy may be found in the constitution.
Stringam v Dubois
1992 ABCA 325, 135 AR 64
[Reproduced in Chapter 4.]
NOTE
At one time there was considerable public concern that foreign beneficiaries in some coun-
tries would have most or all of their inheritance confiscated by foreign governments. In
Ontario, blocking legislation was passed in 1983 to try to prevent this from happening. It
required foreign beneficiaries who resided in countries designated by regulation to satisfy
the court that property would not be unduly depleted before they received it. Otherwise,
the property was to be held in trust for the foreign beneficiary. This blocking legislation was
repealed in 2009.
In the Estate of Maldonado

[1954] P 223 (CA)
[The deceased died in Spain with no next of kin. She was a Spanish subject and at the
time of her death was domiciled in Spain. Her estate consisted of movable property—
namely, securities in the custody of a London bank.
The state of Spain brought proceedings in the Probate, Divorce, and Admiralty Division
claiming that letters of administration to the estate of the intestate in England should
issue to the duly constituted attorney of the Spanish state as the sole and universal heir
to her estate by Spanish law. The defendant, the Treasury solicitor, claimed that the
deceased’s estate in England passed to the Crown as bona vacantia.
Article 956 of the Spanish Civil Code provided that when a person died intestate leav-
ing no issue, parents or grandparents, surviving spouse or collaterals within the sixth
degree, the state inherited as being the ultimus heres, the assets being devoted to charitable
institutions as therein mentioned.
There was a conflict of evidence among the Spanish lawyers, the witnesses for the
plaintiff asserting that under art 956 the Spanish state took the property of a deceased
intestate as heir, and the witnesses for the defendant asserting that it took the property
by virtue of a jus regale. Barnard J preferred the witnesses for the plaintiff on this point;
he said: “I am satisfied on the evidence before me that the state of Spain is a true heir just
as any individual heir according to Spanish law.” That finding was not challenged in the
Court of Appeal.
Barnard J decided in favour of the Spanish state. The Treasury solicitor appealed.]
JENKINS LJ:
The general rule to be applied in a case such as this is summed up in the maxim mobilia
sequuntur personam, and is thus stated in Dicey’s Conflict of Laws, 6th ed., at p. 814: “Rule
177. The distribution of the distributable residue of the movables of the deceased is (in
general) governed by the law of the deceased’s domicile (lex domicilii) at the time of his
death.” Thus, in the present case the personalty in question should, prima facie, devolve
in accordance with Spanish law, and, therefore, go to the state of Spain for application in
accordance with the provisions of article 956.
There is, however, an admitted exception to the general rule to the effect that if, accord-
ing to the law of the foreign state in which the deceased is domiciled, there is no one
entitled to succeed to the movable property of the deceased owing, for example, to the
bastardy of the deceased, or to the failure of kin near enough in degree to qualify for
succession under the law of the domicile, and, by the law of the foreign state, the state
itself is, in such circumstances, entitled to appropriate the property of the deceased as
ownerless property by virtue of some jus regale corresponding to our law of bona vacantia,
English law will not recognize the claim of the foreign state as part of the law of succession
of the domicile, but will treat it merely as being the assertion by the foreign state of a
prerogative right which has no extra-territorial validity and one which must yield to the
corresponding prerogative right of the Crown. That appears from Dicey at p. 818 in the
passage to which Evershed MR has already referred: “Where a person dies, e.g., intestate
and a bastard, and under the law of the country where he is domiciled there is no succes-
sion to his movables, but they are bona vacantia, and leaves movables situate in a country,
e.g., England, in which he is not domiciled, the title to such movables is governed by the
lex situs, i.e., under English law the movables being situate in England, the Crown is
entitled thereto. In such a case the foreign Treasury claims not by way of succession but
because there is no succession.”
The law of the relevant foreign state, however, may be such as to constitute the state
itself the successor to the deceased in the absence of any individual with a prior right of
succession under that law, and the question then arises whether the claim of the foreign
state should be recognized under the general rule as being the claim of a person entitled
to succeed according to the law of the domicile, or whether it should be treated as falling
within the exception, on the ground that the claim of the foreign state, as self-constituted
successor, does not differ in substance, or in principle, from a claim by a foreign state by
virtue of its paramount right to ownerless property within its dominions as bona vacantia
or the equivalent.
Accordingly, two questions were debated below: first, whether under the Spanish Civil
Code the state takes as a true heir or successor in the eye of Spanish law, or takes by virtue
of a jus regale; and secondly, if it takes in the former capacity, whether English law will
recognize the state of Spain as a true heir or successor for the purpose of the maxim
mobilia sequuntur personam. Barnard J, having heard evidence on both sides in regard to
the Spanish law, answered the first question in the former sense, and the second question
in the affirmative, holding in effect that the answer to the second followed from the answer
to the first. Barnard J’s decision on the first question has not been challenged by the Crown
in this court. The sole issue before us, therefore, is whether the state of Spain, being
admittedly according to its own law the true heir of, or successor to, the intestate, should
be recognized as such by English law in its application of the general rule that is expressed
in the maxim mobilia sequuntur personam.
This question has not been the subject of any direct decision, but the distinction
between a sovereign state claiming “jure regali” and claiming as true heir or successor was
recognized in In re Barnett’s Trusts [[1902] 1 Ch 847], and In re Musurus [[1936] 2 All ER
1666]. Inasmuch as the foreign law in each of those cases was held to give the foreign state
concerned a jus regale, as distinct from a true right of succession, there was no actual
decision on the present question; but the distinction was recognized. Indeed, as it was
pointed out, both those cases would have been susceptible of a short and simple answer
if the view then taken of the law had been that in no circumstances could a foreign state
claim the assets of a deceased intestate situated in this country, whether the claim was
founded on jus regale or on a true right of succession.
The question has also been discussed in various textbooks on this branch of the law.
In Dicey, at p. 818, the passage cited above continues: “It does not follow that the decision
would be the same if the law of the domicile was such that the foreign Treasury claimed
as ultimus heres. That would be a true case of succession and would, it is submitted, be
governed by the law of the domicile.” There are also the passages in the works on Private
International Law by Wolff, Bar and Cheshire, to which Evershed MR has referred. I treat
those passages as incorporated in this judgment. The conclusion of Barnard J, therefore,
has the support of no inconsiderable weight of learned opinion, and although, for my
part, I find it difficult to embrace with enthusiasm either side of this highly technical
question, his conclusion also commends itself to me on the ground of consistency.
In cases such as the present, English law professes to apply the law of the domicile to
the devolution of the intestate’s movables situated in this country. If the law of the domicile
is that of a foreign state under whose law of intestacy the state itself is the successor, why
should English law not give effect to that provision as part of the law of succession which
it professes to apply?
The reasons why it is claimed that English law does not do so are expressed in a variety
of ways. First, the distinction between succession by a sovereign state and the appropria-
tion of bona vacantia by a foreign state is said to be a mere matter of words. This argument
is not without persuasive force, but I do not think that the question can truly be said to
be one of distinction without difference. The foreign state can only succeed under its own
law of succession where the succession is governed by that law. On the other hand, where
the case is not one of succession, but of appropriation of ownerless property, the right
applies to any ownerless property which may be reached by the law of the foreign state
concerned, irrespective of the law by which its devolution is governed, provided only that
by the relevant law it is in fact ownerless.
Second, it is said that the foreign state, being omnipotent so far as its own law of suc-
cession is concerned, can constitute itself successor in circumstances in which it could
equally well rely on a claim based on jus regale. But in accepting the foreign state’s law of
succession, English law recognizes the foreign state as being the arbiter of what the suc-
cession is to be. The foreign state could, for instance, enact that older relatives should be
preferred to younger, or that male relatives should be preferred to female, or vice versa,
or even that fair-haired relatives should be preferred to dark-haired; and to such distinc-
tions, unreasonable as they might seem, English law would, as I understand the matter,
have no objection. Why, then, should English law stop short of recognizing the foreign
state itself as the successor where, according to its own law, it is indeed such? The answer
that English law recognizes it to be the function of the relevant foreign law to regulate
succession as between individual subjects or citizens, but declines to recognize rights
conferred by the foreign state on itself in exercise of that function, does not commend
itself to me. It involves distinctions at least as arbitrary and artificial as those discerned
by the Crown in the distinction between jus regale and true inheritance by the state. For
example, it was, I think, conceded in argument that if the Spanish law of succession
provided that in circumstances such as those of the present case the estate of the intestate
was to go to some person, or body, or corporation, other than the state itself for application
to charitable purposes such as those stated in article 956 of the civil code, there would be
no reason why the English courts, in applying the general rule to the inheritance, should
not recognize and allow effect to be given to that provision. Why, then, should not the
same result ensue where, as here, the estate goes by Spanish law to the Spanish state itself
for application to those same charitable purposes?
Third, it is said that private international law is concerned only with the rights of indi-
viduals and not with the competing rights of sovereign states. That may well be so. But it
is clear that English law recognizes the legitimate proprietary rights of foreign sovereign
states, and I see no reason why a right of succession to an intestate’s estate should not be
held to answer that description.
Fourth, it is said that English law should not recognize as “heir” or “successor” any
person not bound by some personal nexus with the deceased. I cannot follow this submis-
sion. The heir or successor is surely the person, whether related to the deceased or not,
who under the relevant law is entitled to inherit or to succeed.
Fifth, it is said that there is no reciprocity, because Spanish law would not give effect to
a claim by the Crown in respect of bona vacantia. But no one can state that Spanish law
would not recognize a right to succession belonging to the Crown if any such right existed,
and it could easily be made to exist by Act of Parliament if that were thought expedient.
There might be a case where a so-called right of succession claimed by a foreign state
could be shown to be in truth no more than a claim to bona vacantia. If so, it would, no
doubt, be right to apply the recognized exception to the general rule; but this has not been
shown to be such a case. On the contrary, it has been found (and the Crown has accepted
the finding) that the state of Spain is, in the eye of Spanish law, the true heir; and I would
add that, to my mind, notwithstanding what the President said in In re Musurus, the
conclusion that this is a case of genuine succession is reinforced by the circumstance that
the state of Spain is by article 956 of the Spanish Civil Code enjoined to apply the property
of the intestate to the charitable purposes therein mentioned.
Accordingly, for the reasons given by Evershed MR and such additional reasons as I
have been able to offer, I agree that this appeal fails and should be dismissed.
[Morris LJ delivered a concurring judgment.]
NOTES
1. If the distinction in the foreign law between claiming as ultimate heir or by jus regale
is not just a matter of words, is it based on the purported scope of the foreign law—namely,
whether it applies to the property of any local domiciliary or to any local property? Could the
foreign state have the best of worlds by claiming the property on either basis?
2. In Re Hole, [1948] 2 WWR 754 (Man KB) the deceased died intestate leaving no heirs or
next of kin. She was domiciled in Manitoba at the time of her death. One of her assets was
her interest as vendor under an agreement of sale of land situated in Saskatchewan.
In determining which province was entitled to the proceeds of the sale of land, Dysart J
stated (at 758-59):
Notwithstanding that counsel for both Provinces agree that all these assets are bona vacantia,
it seems necessary at the outset to state briefly the law relating to bona vacantia, especially in
so far as that law affects the nature of the title which the Crown takes in them.
“Bona vacantia is the name given to property to which no one can make a good claim, and
is said to be vested by law in the Crown to avoid the strife and contention to which a title arising
from mere occupancy might give rise. The distinguishing feature of the property is that it is
ownerless, i.e., it has no owner, and not that the owner cannot be found as in the case of lost or
abandoned property”: In re Musurus Estate, [1936] 2 All ER 1666 (editor’s note); In re Barnett’s
Trust, [1902] 1 Ch. 847, 71 LJ Ch. 408; 6 Halsbury, 2nd ed., pp. 827-8; 11 E & E Dig., p. 587.
The doctrine of bona vacantia is founded upon the common law theory that all property
must be in the ownership of someone at all times without interruption: Graysbrook v. Fox (1565),
1 Plowden 275, 75 ER 419, at 427-8. Under that theory, when the owner of the property dies
leaving no one who can rightfully claim it by devise, bequest, inheritance, or otherwise, the
property must instantly vest in some stranger to it; and by long-established law, the reigning
sovereign is the person in whom it should and does so vest. “The Crown does not claim it by
succession at all, but because there is no succession. … the principle was that the right to take
that which belonged to no one appertained to the Crown, as jura regalia”: Per Kekewich J at
p. 857 of In re Barnett’s Trust, supra.
The sovereign, however, takes not in his personal, but in his official capacity—that is, he
holds the property for those of his subjects in whose constitutional domain the property is
legally located at the time of the vesting: Rex ex rel Atty.-Gen. for Can. v. Atty.-Gen. for BC [1922] 3
WWR 269, 63 SCR 622, affirmed by the Privy Council, [1923] 3 WWR 1252, [1924] AC 213, 93 LJPC
76; In re Nudwud Malesko and Stevenson Estates; Atty.-Gen. for Can. v. Atty.-Gen. for Alta. [1928] 3
WWR 97, [1928] AC 475, 97 LJPC 106.
The title which the Crown thus takes comes therefore neither from nor through the last previ-
ous owner, but completely apart from and independent of that owner. And because succession
is not involved, all cases and statutes dealing with wills, with devolution, and with distribution
of property, are of no direct assistance to us.
The court went on to find that the deceased, as an unpaid vendor, had no interest in the
land; that the debt was a specialty debt located in Manitoba; and that, hence, the Manitoba
government was entitled to the proceeds. The conclusion that the deceased had no interest
in the land has been criticized: see Re Nuport Holdings Ltd and Michael Duff Estate; Re Quieting
of Titles Act, 2003 NLSCTD 63 at paras 40-42, 224 Nfld & PEIR 254.

Bale, G. “The Demise of Lord Kingsdown’s Act” (1964) 29 Sask Bar Rev 179.
Maxwell, 2015) ch 26, 27.
1954).
Fawcett, James J & Janeen M Carruthers. Cheshire, North & Fawcett Private International Law,
14th ed (Oxford: Oxford University Press, 2008) ch 31, 32.
Grahl-Madsen, Atle. “Conflict Between the Principle of Unitary Succession and the System of
Scission” (1979) 28 ICLQ 598.
Miller, Gareth J. International Aspects of Succession (Aldershot, UK: Ashgate Publishing, 2000).
Morris, JHC. “Intestate Succession to Land in the Conflict of Laws” (1969) 85 Law Q Rev 339.
O’Sullivan, Margaret R. “The Role of Domicile and Situs in Succession Matters” (1996) 15 Est
& Tr J 236.
Pitel, Stephen GA & Nicholas S Rafferty. Conflict of Laws, 2nd ed (Toronto: Irwin Law, 2016) ch 19.
Scoles, Eugene. “The Hague Convention on Succession” (1994) 42 Am J Comp L 85.
Butterworths, 2005) (loose-leaf) ch 26, 27.
PA R T S E V E N
Family Law
CHAPTER SEVENTEEN
Marriage and Cohabitation
I. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907
II. Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 909
A. Constitutional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910
B. Validity of Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
1. Formal Validity: Lex Loci Celebrationis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 912
2. Essential Validity: Lex Loci Domicilii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914
C. Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
III. Cohabitation and Civil Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 919
I. GENERAL
Questions relating to the validity and effects of marriage have long preoccupied private
international lawyers. Over the years, many of the concepts and techniques of private inter-
national law evolved within cases concerning marriage. Today, as the title of this chapter
indicates, marriage no longer occupies the same primary place. Indeed, widespread and
profound changes to the underlying substantive law necessarily affect private international
law and will eventually be reflected in transborder cases. The availability of statistics is crit-
ical to this development and, in this regard, it is worth noting that Statistics Canada started
recording the number of opposite-sex common law unions in 1981 and same-sex unions in
2001. The most recent data available is from the 2011 Census of Population, but the collec-
tion of marriage and divorce data was discontinued after 2008, so that is the last year for
which data is available. In 2008, there were just under 150,000 marriages in Canada, the
lowest number since 2004. The highest rate of marriage was in Newfoundland and Labrador
(52.9 percent) and the lowest was in Quebec (35.4 percent). Common law unions have
increased over the past three decades and in 2011 this represented 11.5 percent of the popu-
lation compared with 3.8 percent in 2008. Same-sex married couples were first counted in
2006 and by 2011 there were just under 65,000 such couples, of whom 30 percent were
married, compared with 16.5 percent in 2006.
This chapter attempts to reflect the rapidly changing landscape that currently character-
izes the law governing interpersonal relationships, of which marriage has, until recently,
been the paradigm. As a result, while traditional categories and issues remain relevant,
additional space has been devoted to extracts and notes concerning cohabitation and
same-sex relationships.
907
908 Chapter 17 Marriage and Cohabitation

Trends and Statistics
Chapter 1, “Population and Families,” online: UNSTATS <http://unstats.un.org/
unsd/gender/downloads/WorldsWomen2015_chapter1_t.pdf>
(footnotes omitted)
For many people, marriage is the first step in beginning a new life. However, in many
countries—representing a variety of social, cultural, legal and political systems—less
formal unions form the basis of family life. Included in the category of “other unions”
used in this chapter are informal consensual unions and civil unions based on cohabita-
tion and polygyny (when a man takes more than one wife).
Women and men around the world are marrying at later ages, reflecting increases in
education levels, later entry into the labour force, changing norms about formal marriage
and informal unions based on cohabitation, and increased economic independence and
empowerment for women. Women continue to marry a few years earlier than men. Cur-
rently at the global level, women marry at age 25 on average, while men marry at age 29,
about 1 year later for both compared to two decades ago.
• • •
Child marriage, defined as a formal marriage or informal union before age 18, is a
fundamental violation of human rights. Yet, marriage before age 18 is not allowed by law,
with or without parental consent, in only 10 out of 45 developed countries with available
information, and 35 out of 129 developing countries with available information. …
• • •
Globally in 2010, an estimated 26 per cent of women aged 20 to 24 were married before
age 18; this is only 5 percentage points lower than in 1995.Women who married before
age 15 accounted for most of the decline. Between 1995 and 2010, the proportion of
women aged 20 to 24 who married before age 15 declined from 12 per cent to 8 per cent.
The prevalence of child marriage remains highest in Southern Asia and sub-Saharan
Africa. In Southern Asia, 44 per cent of women aged 20 to 24 were married before age 18
and 16 per cent before age 15. The corresponding figures for sub-Saharan Africa were 40
per cent and 12 per cent, respectively.
• • •
While marriage remains the traditional path to establishing a family, other forms of
union also exist, including consensual unions or unions based on cohabitation. While
these relationships are usually recognized by society, they are not necessarily formalized
through civil unions and/or a legal contract, and are often not registered as unions in
statistical sources. Many women and men in informal unions categorize themselves as
“single” in censuses or surveys and are not listed as “married” or “in union” in datasets
that look at marital status. Furthermore, in many countries, informal unions are not
included as an option in census or survey forms. It is important to note that women in
informal consensual unions may be disadvantaged relative to women in legal marriages,
especially with respect to financial commitments in cases of separation.
II. Marriage 909
II. MARRIAGE
Mary Ann Glendon, The Transformation of Family Law

(Chicago: University of Chicago Press, 1989) at 35-36 and 83
[In the Western world], the law concerning an individual’s eligibility to enter the married
state, the permissible range of choice of spouses, and the preliminaries and procedures
required to conclude a legally valid marriage, has remained relatively stable. What change
there has been has mainly involved adjustment of age and parental consent requirements,
or waiting periods, or administrative matters. The picture is one of many small changes,
unremarkable in themselves, but together signalling a major transition in the way modern
legal systems intersect with marriage behavior. One aspect of this shift, a significant
deregulation of the formation of marriage, might be seen as an indication of the declining
importance of marriage as a determinant of social standing and economic security in
modern societies. Another aspect is that, somewhat paradoxically, the same developments
that represent a withdrawal of state interest in the formation of marriage have prefigured
and culminated in the legal recognition of marriage as a basic human right.
Viewed in their historical context, the apparently trifling changes … are the culmina-
tion of a long series of events that, beginning around 1800, gradually freed individuals
from most constraints on their ability to marry or on their choice of marriage partner.
Strict parental and family consent requirements designed to give families control over
the admission of new members began to be established in European laws in the mid-
sixteenth century and were the subject of elaborate regulation in the codes of the Enlight-
enment period, such as the Prussian General Code of 1794 and the French Civil Code of
1804. Over the course of the nineteenth century, these consent requirements began to be
relaxed. Certain other constraints on marriage which had been established less in response
to concerns of propertied families than according to various conceptions of the public
interest began to disappear too. …
In all respects, the transformation of marriage law has taken place through small steps.
But in recent years the difference between the extensive regulation of marriage formation,
which was once taken as self-evident, and the minimal controls which now exist has
become so great that the idea of a basic individual right to marry has emerged. …
The ensemble of minor changes in the manner in which the legal institution of mar-
riage is formed is one small but essential aspect of the revolution which is taking place in
the way Western governments interact with families in the late twentieth century … .
[L]egal distinctions between being married and being single and between marriage and
informal cohabitation are diminishing. In this light then, the ideologizing of the freedom
to marry has appeared on the scene just at the moment when legal marriage is losing
much of its traditional significance. As marriage impediments and formalities fall away,
those exercising the new-found “right to marry” may find that life on the other side of
the door which once was not so easy to open is not much different, in a legal sense, from
the life they left behind. In crossing the threshold, however, they may encounter an
unexpected intimacy with the state.
Over time, courts have made several statements regarding the nature of marriage from both
an individual and an institutional perspective. Certainly, the common law locus classicus
remains Lord Penzance’s definition of marriage as “the voluntary union for life of one man
and one woman, to the exclusion of all others”: see Hyde v Hyde (1866), LR 1 P & D 130 at 133.
This proposition was adopted by the Ontario High Court in Robb v Robb (1891), 20 OR 591
(H Ct J) and was restated by Parliament in the Modernization of Benefits and Obligations Act,
SC 2000, c 12, s 1.1. Challenges to that definition of marriage gave rise to litigation under the
Charter. In 2003, the Ontario Court of Appeal in Halpern v Canada (Attorney General) (2003),
65 OR (3d) 161 (CA) “reformulate[d] the common law definition of marriage as ‘the voluntary
union for life of two persons to the exclusion of all others’ ” (at para 156), holding that the
traditional definition violated equality rights on the basis of sexual orientation under s 15(1)
of the Charter. This case was followed by similar decisions in seven other provinces, leading
the federal government to introduce the Civil Marriage Act, SC 2005, c 33, which came into
force on July 20, 2005. The constitutional validity of the proposed new statute had previ-
ously been confirmed by the Supreme Court of Canada: Reference re Same-Sex Marriage,
2004 SCC 79, [2004] 3 SCR 698. The availability of marriage for same-sex couples in Canada
gives rise to questions of recognition of the status it confers in jurisdictions that retain the
traditional definition. Amendments to the Civil Marriage Act were made in 2013 to address
this issue: see below, Section II.B.2, “Essential Validity: Lex Loci Domicilii.”
A different challenge to the traditional definition of marriage relates to the exclusivity
criterion. Although polygamy is officially illegal in Canada, immigration has forced the courts
to confront the effects of foreign polygamous marriages in Canada. While the common law
was traditionally inimical to giving any recognition to such marriages, judicial and legislative
innovation eventually addressed the issue: cf Lim v Lim, [1948] 2 DLR 353 (BCSC); Re Hassan
and Hassan (1976), 12 OR (2d) 432 (H Ct J); see also further discussion below in Section II.B.2.
Despite the fact that the legal effects of marriage have largely been extended to unmar-
ried cohabitants, marriage does retain some incidents under Canadian law—namely, in
terms of matrimonial property: see Chapter 21. In addition, both the civil and religious insti-
tutions of marriage continue to be regulated, both in Canada and abroad. For that reason,
the validity of domestic and foreign marriages continues to be a relevant question from the
standpoint of private international law.
A. Constitutional Issues
The Constitution divides legislative power over marriage between the two levels of govern-
ment—s 91(26) of the Constitution Act, 1867 confers legislative jurisdiction on the federal
government over marriage and divorce, whereas s 92(12) attributes specific power over sol-
emnization of marriage in the province to provincial legislatures. The more general provin-
cial competence over property and civil rights (s 92(13)) is also the source of provincial
legislation over related matters—such as matrimonial property and incidents of separation:
see Katz for a discussion of the scope of the federal power.
The division of powers over marriage has been considered by the Supreme Court on a
few occasions, most notably in Kerr v Kerr, [1934] SCR 72. Appellate courts also have had to
deal with the constitutional aspects of marriage as it interacts with other areas of family law.
II. Marriage 911
Hill v Hill
[1929] 2 DLR 735 (Alta CA)
[This case involved the Married Women’s Act of Alberta, which permitted a married
woman to sue in her own name without the consent of her husband. On the claim that
this Act was ultra vires the provincial legislature, the court had the following to say.]
HARVEY CJA:
… While the rights of husband and wife have changed materially in the last century
through the action of the courts and the legislatures yet I do not see how it can successfully
be contended that the essential status of “marriage” has been thereby effected [sic], … the
subject assigned to the Dominion Parliament is “marriage” and not “husband and wife.” …
HYNDMAN JA (concurring):
I agree with the conclusions reached by the Chief Justice of the court and have little
to add except to emphasize the distinction between “marriage” itself and “civil rights” of
each of the parties consequent upon and arising out of the marriage. …
In my opinion the intent and meaning of the distribution of the powers was to give
the federal Parliament the exclusive right to legislate as to who shall or shall not be capable
of marrying; and the provincial what the individual rights of the parties shall be within
the province after marriage.
In SB v Alberta (Vital Statistics, Director), 1982 ABCA 312, 142 DLR (3d) 151, the court was consid-
ering the extent to which a provincial statute governing adoption could indirectly prohibit
marriage between adoptee and adoptive relatives. Kerans JA made the following statement:
[7] Canada can legislate about capacity to marry as an aspect of marriage and divorce,
which is a head of federal legislative competence under the Constitution Act, 1867. This is a
conventional statement of the law. But adoption laws are a valid exercise of provincial legislative
competence: see Reference Re Authority to Perform Functions Vested by Adoption Act, The Children
of Unmarried Parents Act, The Deserted Wives’ and Children’s Maintenance Act of Ontario, [1938]
SCR 398. The question, then, is whether an extension of the adopted status to marital capacity
is in pith and substance a matter of adoption or a matter of marriage and divorce. In my view,
the legislation is only about adoption and only incidentally affects marriage and divorce.
Accordingly it is a valid exercise of provincial legislative competence.
Since this case was decided, Parliament has enacted the Marriage (Prohibited Degrees) Act,
SC 1990, c 46, which, in s 2(2), provides that people related lineally by adoption cannot marry.
The federal Civil Marriage Act, SC 2005, c 33 also includes rules on essential validity: see below
Section II.B.2.
The constitutional division of powers over marriage in Canada means that a marriage
celebrated in one province will not automatically be recognized as valid in another province.
The provincial competence over the formal validity of marriage allows for diversity across
the country. The extraprovincial marriage is therefore subject to the same conditions regard-
ing its formal validity as a marriage celebrated in another country.
B. Validity of Marriage
Whether a marriage is valid or not usually arises as a preliminary issue in other litigious pro-
ceedings (except in nullity proceedings: see Chapter 19). For example, in challenging a will,
a legatee may claim that a “wife” named in a will is not, in fact, the testator’s spouse because
the parties had not obtained the required parental consent at the time of the marriage.
Faced with a charge of bigamy, a defendant may seek to impugn the validity of the first mar-
riage as void according to the laws of the country where it was celebrated. In immigration
cases, the validity of a foreign marriage will also determine whether one person can validly
sponsor another within the “family class” category: see Canada (Citizenship and Immigration)
v Hazimeh, 2009 FC 380.
The common law has traditionally distinguished between the formal requirements for a
valid marriage and the more substantive requirements (referred to as “essential validity”).
This distinction has been transposed to the constitutional division of powers in Canada such
that formal validity is considered to be within provincial competence and essential validity
to be within federal competence: see Kerr v Kerr, above. While this parallel is not necessarily
justified, the minimal federal intervention in relation to marriage has kept conflicts and chal-
lenges from arising.
A foreign marriage is often proved by the presentation of an official document such as a
marriage certificate or extract from a civil registry: for detailed consideration of the manner
of proving a foreign marriage, see Le v Le, 2008 ABQB 350, 92 Alta LR (4th) 385.
1. Formal Validity: Lex Loci Celebrationis

a. General
At common law, the distinction between formal and essential validity of marriage was intro-
duced in the following House of Lords’ decision.
Brook v Brook
(1861), 9 HL Cas 193
[The question in the case was the validity of a marriage performed in Denmark between
two British subjects, domiciled in England, who subsequently returned to England as
husband and wife. They had married in Denmark in order to avoid an English statutory
prohibition against marriage between a widower and the sister of his deceased wife; there
was no such prohibition in Danish law.]
THE LORD CHANCELLOR (LORD CAMPBELL):

… There can be no doubt of the general rule that “a foreign marriage, valid according
to the law of a country where it is celebrated, is good everywhere.” But while the forms
of entering into the contract of marriage are to be regulated by the lex loci contractus, the
law of the country in which it is celebrated, the essentials of the contract depend upon
the lex domicilii, the law of the country in which the parties are domiciled at the time of
the marriage, and in which the matrimonial residence is contemplated. Although the
forms of celebrating the foreign marriage may be different from those required by the law
II. Marriage 913
of the country of domicile, the marriage may be good everywhere. But if the contract of
marriage is such, in essentials, as to be contrary to the law of the country of domicile, and
it is declared void by that law, it is to be regarded as void in the country of domicile,
though not contrary to the law of the country in which it was celebrated.
• • •
It is quite obvious that no civilised state can allow its domiciled subjects or citizens,
by making a temporary visit to a foreign country to enter into a contract to be performed
in the place of domicile, if the contract is forbidden by the law of the place of domicile as
contrary to religion, or morality, or to any of its fundamental institutions.
A marriage between a man and the sister of his deceased wife, being Danish subjects
domiciled in Denmark, may be good all over the world, and this might likewise be so,
even if they were native born English subjects, who had abandoned their English domicile,
and were domiciled in Denmark. But I am by no means prepared to say, that the marriage
now in question ought to be, or would be, held valid in the Danish courts, proof being
given that the parties were British subjects domiciled in England at the time of the mar-
riage, that England was to be their matrimonial residence, and that by the law of England,
such a marriage is prohibited as being contrary to the law of God. The doctrine being
established that the incidents of the contract of marriage celebrated in a foreign country
are to be determined according to the law of the country in which the parties are domi-
ciled and mean to reside, the consequence seems to follow that by this law must its validity
or invalidity be determined.
This decision was followed in Berthiaume v Dastous, [1930] AC 79, in which, on appeal from a
Quebec judgment declaring a marriage valid, the Privy Council reversed on the grounds that
the formalities of the place of celebration (Paris) had not been observed, even though the
formalities would have created a valid marriage had it been celebrated in the parties’ com-
mon country (province) of domicile (Quebec). The result in Berthiaume v Dastous is now
avoided by art 3088 of the Civil Code of Quebec, which provides: “With respect to [a mar-
riage’s] formal validity, it is governed by the law of the place of its solemnization or by the
law of the State of domicile or of nationality of one of the spouses.” The current Quebec
choice of law rule on formal validity is now much more flexible and generous than the com-
mon law rule.
Nevertheless, under the common law rule, courts are prepared to recognize ceremonies
that are completely alien to those of their own law. For example, marriages by proxy have
been upheld where this was allowed under the lex loci celebrationis but not under the law of
the domicile: see Frustaglio v Barbuto, [1960] OWN 551 (H Ct J); Apt v Apt, [1948] P 83 (CA), but
not the reverse: see Hassan v Hassan, 2006 ABQB 544. For a more recent consideration of
proxy marriages, including those done by telephone, see Kazi v Canada (Citizenship and
Immigration), 2014 CanLII 83460 (Can IRB).
All of the common law provinces and territories have enacted rules governing the
requirements for the celebration of marriages and there is a core of uniform rules through-
out the country concerning the validity of religious or civil ceremonies, the issuance of a
marriage licence (in some provinces the publication of banns is allowed as an alternative),
the required presence of two witnesses, an absolute minimum age, and parental consent
under a certain age.
b. Parental Consent
As a result of poor reasoning in a few early cases, the traditional common law rule on par-
ental consent makes little sense—although one would intuitively expect parental consent
to be an issue of capacity, the common law has categorized it as a formality ever since the
decision in Ogden v Ogden, [1908] P 46 (CA). In that case, the English Court of Appeal held
that the parties could successfully avoid a parental consent requirement by marrying in
England despite the fact that, under French law, the law of the husband’s domicile, the union
was void for lack of capacity. This decision has been followed in Canada without question-
ing: see Kerr v Kerr, above; Alberta (Attorney-General) v Underwood, [1934] SCR 635. In both
cases, the Supreme Court of Canada upheld the constitutionality of provincial rules govern-
ing parental consent on the basis that, as mere formalities of marriage, the rules came within
provincial competence over the solemnization of marriage. This rule is, admittedly, quite
dated and, given strident criticism of its foundation, is certainly open to attack should it ever
reach an appellate court willing to tackle it anew.
c. Subsequent Validation
Legislation is sometimes enacted to cure, retroactively, defects in marriage formalities, in a
type of amnesty to respond to what would otherwise cause hardship. In Re Howe Louis
(1970), 14 DLR (3d) 49 (BCCA), a marriage had been celebrated in Saskatchewan according to
Chinese custom, but was not valid according to the provincial marriage statute. Legislation
was subsequently enacted in that province to validate marriages that were formally invalid
where the union had not been contested and where the parties had lived as husband and
wife since the date of celebration. Although this legislation came into force fully 23 years
after the impugned ceremony, it was deemed to have a validating effect such as to give the
surviving spouse a claim on the estate of her deceased husband: see also Luu v Ma, [1999] OJ
No 493 (QL) (Gen Div).
The rules governing retroactive validation operate smoothly when the parties have not
moved or have remained within Canada. The weaknesses of the rules appear where the
claiming party no longer resides at the place of celebration when the retroactive legislation
is passed: see Ambrose v Ambrose (1960), 25 DLR (2d) 1 (BCCA). This type of problem involves
questions of conflict of laws in time, discussed in Chapter 9.
2. Essential Validity: Lex Loci Domicilii

a. General
As previously noted, the essential validity of marriage is governed by the law of the domicile
of the parties at the time of marriage. A close reading of Brook v Brook, above, indicates that
this domicile was presumed to be common to both parties and that it remained the domicile
of the parties after the marriage’s celebration. Cases subsequently arose where either one or
the other of these assumptions was absent and the courts had to refine the lex loci domicilii
to cope with these more complex situations. Despite the passage of time, the issue has yet
to be settled in the literature, although the courts have tended to favour one approach.
There are basically two alternative choice of law rules—the dual domicile rule and the
intended matrimonial home rule. Under the former, each party is required to be capable of
marrying the other according to the law of each party’s ante-nuptial domicile. Although this
II. Marriage 915
is an onerous rule, it is the one that has been generally preferred by common law courts.
According to the latter doctrine, it is the law of the intended matrimonial home that is to
govern the capacity of both parties at the time of marriage.
From the perspective of a country of immigration, the second doctrine is intuitively
appealing and has received support in Canadian courts. In Feiner v Demkovicz (falsely called
Feiner) (1973), 2 OR (2d) 121, 42 DLR (3d) 165 (H Ct J), the Ontario court was assessing the
validity of a marriage between an aunt and nephew. The court applied the dual domicile
rule, which led it to Polish law. In the absence of proof of Polish law, it applied the lex fori,
which happened to be the law of the intended matrimonial home at the time of the mar-
riage and held the union to be void on the grounds of consanguinity. The judge asked
himself whether the application of Ontario law was not equally justified under the doctrine
of the intended matrimonial home.
At first blush, the Civil Code of Quebec appears to maintain the dual domicile rule in
art 3088. However, the intended matrimonial home rule may still be available—art 3082
specifies that a situation that is only “remotely connected” with the designated foreign law
may, by way of exception, be governed by a more closely connected law. The Federal Court
has admitted the relevance of the intended matrimonial home doctrine to determine the
validity of a marriage in an immigration context, but only in exceptional cases.
Canada (Minister of Employment and Immigration) v Narwal

[1990] 2 FC 385 (CA) (footnotes omitted)
[The court was considering the validity of a marriage celebrated in England between two
Indian citizens, one of whom was a Canadian landed immigrant. The husband returned
to India and the wife to Canada, where she made an application to sponsor her new
husband. Originally refused entry on a technical point, the husband’s appeal to the
Immigration Board was successful. On a further appeal by the government, the Federal
Court of Appeal dismissed the appeal but specifically reversed the lower tribunal on the
test applicable to determine essential validity.]
STONE JA (for the court):

The view I take of this case renders it unnecessary to decide whether the Board erred
in finding that the appellant had failed to sustain the burden of proving that the marriage
of August 18, 1986 was invalid on the ground that no custom existed in the law of India
that permitted a valid marriage of the respondent to the brother of her former husband.
As the Board points out, by the law of that country a marriage may be solemnized between
any two Hindus if, inter alia, the parties are not within the degrees of “prohibited relation-
ship” and that one may yet be solemnized even if they are so related if the custom or usage
governing each of them permits a marriage between them. It is also clear by that law that,
because of the earlier marriage, the respondent was, vis-à-vis Sukhwantjit Singh Narwal,
within the “prohibited relationship.”
It is my view that the Board erred in deciding that the substantial [sic] validity of the
marriage had to be determined by the law of India rather than by applicable law in Canada
which, it seemed accepted on both sides, contained no such bar to the marriage. The
traditional view is that the law governing capacity to marry is that of the domicile of both
parties at the time of the marriage. However, the respondent urged the Board to apply an
alternative theory, namely, that capacity is to be governed by the law of the intended
matrimonial home of both parties, a theory … discussed by the High Court of Justice of
Ontario in Feiner v. Demkovicz. …
While the Board in the present case found, in effect, the Feiner approach to be “emi-
nently reasonable and fair to all concerned,” it nevertheless concluded that it was inapplic-
able to the case at bar. …
The fact that the couple had not yet established a home here is not due to any lack of
interest or effort on their part but is, rather, due to their inability to convince the Canadian
authorities of the merit of the application. I am thus satisfied that the spirit of the intended
matrimonial home theory is indeed met and, accordingly, that the … marriage was valid
according to that theory.
[Marceau and MacGuigan JJA also sat on the appeal.]
Although support for this doctrine is rare, rarer still are the cases where this question arises.
Thus, while the weight of judicial authority is on the side of the dual domicile rule, the pres-
ence of an appellate decision favouring the alternative rule is equally significant.
b. Elements of Essential Validity

i. Consent
From the contractual aspect of marriage comes the requirement that each party consent to
it. The same rules governing the vitiation of consent in traditional contract theory are there-
fore applicable in a marriage context. And because consent is a precondition to the forma-
tion of a contract, its absence renders the marriage void ab initio. The consequences of
nullity to which this gives rise are discussed in Chapter 19.
ii. Capacity
A second relevant element of essential validity, and probably the most central, is capacity.
As discussed previously, the common law considers the question of parental consent to be
related to formal validity. All other questions of capacity, however, remain within the pur-
view of essential validity. These can, generally, be said to include age, consanguinity or
affinity, marital status, and other types of incapacities. Incapacities were often the product
of scientific ignorance or religious intolerance. With the secularization of marriage and the
advances of science, incapacities are largely a thing of the past in most western countries.
Nevertheless, Canadian law has retained some limitations, as have most other foreign laws.
Recall that competence over issues of essential validity has been judicially deemed to be
part of the federal jurisdiction over marriage and divorce.
An important implicit modification to the lex domicilii rule for capacity was made with
amendments to the Civil Marriage Act in 2013. The statute was originally adopted in 2005 to
allow for same-sex marriage in Canada. Because Canada was one of the first countries to do
so, several foreign couples, unable to marry in their home countries, travelled to Canada to
get married. Under the lex domicilii rule, these parties would be considered to lack capacity
to marry, whether under the dual domicile rule or the intended matrimonial home rule, given
II. Marriage 917
that, once married, these couples typically left the country. Despite this incapacity, marriages
between foreign couples were celebrated across the country. In response to this inconsistency
between law and practice (and also to address the problem it gave rise to regarding dissolu-
tion of these unions, discussed in Chapter 18), s 5 was enacted in the following terms:
5(1) A marriage that is performed in Canada and that would be valid in Canada if the
spouses were domiciled in Canada is valid for the purposes of Canadian law even though either
or both of the spouses do not, at the time of the marriage, have the capacity to enter into it
under the law of their respective state of domicile.
(2) Subsection (1) applies retroactively to a marriage that would have been valid under the
law that was applicable in the province where the marriage was performed but for the lack of
capacity of either or both of the spouses to enter into it under the law of their respective state
of domicile.
This rule, though not framed as a choice of law rule and not limited to same-sex marriage,
effectively connects essential validity to the lex celebrationis when the marriage is celebrated
in Canada. Where the marriage is celebrated abroad, s 5 does not apply. Thus, if a German
same-sex couple is married in England, their marriage should be considered invalid by a
court in Canada insofar as German law continues to prohibit same-sex marriage, given the
lex domicilii rule for essential validity. The only way around this result would be to invoke the
public policy exception to exclude the application of the German prohibition: see the discus-
sion of public policy in Chapter 4; see also below. Other states have responded to the disparity
in access to same-sex marriage by amending their choice of law rule on capacity—for example,
French law states that two people can enter into a same-sex marriage if at least one of them
is capable to do so either under the law of their nationality, domicile, or residence: art 202-1,
Loi n° 2013-404 du 17 mai 2013 ouvrant le mariage aux couples de personnes de même sexe.
Recognition abroad of same-sex marriages celebrated in Canada between foreigners
remains uncertain depending on the law in the state where recognition is sought. In Eng-
land, prior to legalization of same-sex marriage in 2014, a Canadian same-sex marriage was
treated as the equivalent of a civil union as defined under English law (Civil Partnership Act
2004, 2004, c 33 (UK)) and denied recognition as a marriage as a result of the lex domicilii rule
governing capacity and on the basis of public policy: Wilkinson v Kitzinger, [2006] EWHC 2022
(Fam); for recognition of foreign same-sex marriages in the United Kingdom today, see now
Marriage (Same Sex Couples) Act, 2013, c 30, s 10. In Israel, where same-sex marriages cannot
currently be celebrated, a court nevertheless ordered the local registration of a Canadian
marriage between Israeli nationals (Ben-Ari v Minister of the Interior (2006), HCJ 3045/05). In
the United States, prior to the 2015 Supreme Court ruling in Obergefell v Hodges legalizing
same-sex marriages across the country, New York state courts had given effect to same-sex
marriages celebrated in Canada even though the couples involved could not legally have
married in their home state: Martinez v County of Monroe, 850 NYS (2d) 740 (App Div 4th Dept
2008). It is worth noting that in most American states, unlike in Canadian provinces, all issues
of validity are governed by the lex loci celebrationis, including capacity, leaving only public
policy as a bar to the recognition of foreign marriages.
iii. Consanguinity
Another issue going to essential validity relates to consanguinity. This too is governed by a
federal statute, in the following terms.
Marriage (Prohibited Degrees) Act

SC 1990, c 46
1. This Act may be cited as the Marriage (Prohibited Degrees) Act.

2(1) Subject to subsection (2), persons related by consanguinity, affinity or adoption
are not prohibited from marrying each other by reason only of their relationship.
(2) No person shall marry another person if they are related lineally, or as brother or
sister or half-brother or half-sister, including by adoption.
3(1) Subject to subsection (2), a marriage between persons related by consanguinity,
affinity or adoption is not invalid by reason only of their relationship.
(2) A marriage between persons who are related in the manner described in subsec-
tion 2(2) is void.
4. This Act contains all of the prohibitions in law in Canada against marriage by reason
of the parties being related.
See SB v Alberta (Vital Statistics, Director), 1982 ABCA 312, 142 DLR (3d) 151; Feiner v Demkovicz
(falsely called Feiner) (1973), 2 OR (2d) 121, 42 DLR (3d) 165 (H Ct J) on consanguinity and affinity.
iv. Minimum Age

Regarding the minimum age to marry, the Civil Marriage Act was amended in 2015 to specify
that “no person who is under the age of 16 years may contract marriage” (s 2.2). As with all
other incapacities, the question arises as to the application of the lex domicilii rule. Does it
apply cumulatively—that is, must each party conform to both relevant laws? Or does it apply
disjointly, such that each party must be capable under his or her own law? Even if the latter
approach is adopted, this can lead to problems of cumulation when one party’s law is aimed
at the other party.
In the classic case of Pugh v Pugh, [1951] P 482, the foreign domiciled wife was under age
according to English law but not under her lex domicilii. The court found the marriage to be
void on the ground that the husband, being an English domiciliary, was unable to marry his
chosen spouse. Compare this to the decision of Sottomayor v De Barros (No 2) (1879), 5 PD 94,
in which two first cousins of Portuguese nationality were married in England, where they
lived thereafter. Under Portuguese law, a marriage between first cousins was prohibited in
the absence of a Papal dispensation. Having found that the wife was domiciled in Portugal
and the husband in England at the time of the marriage, the marriage was upheld on the
grounds that the Portuguese incapacity could not be set up against the English domiciliary
in a marriage celebrated in England. Given the judge’s reasons, this case supports neither
the intended matrimonial home doctrine nor the dual domicile doctrine. Instead, it is usually
explained as an illogical exception: see Lawrence Collins, ed, Dicey, Morris & Collins on the
Conflict of Laws, 15th ed (London: Sweet & Maxwell, 2015) at paras 17E-106 to 17-109.
v. Polygamous Marriages
Where polygamy is prohibited, a common cause of incapacity to marry is the subsistence of
a prior valid marriage (as provided in s 2.3 of the Civil Marriage Act). In such cases, the courts
must determine whether the first marriage was valid. More often than not, this question will
involve an evaluation of the validity of a foreign divorce or nullity decree, both of which are
III. Cohabitation and Civil Unions 919
discussed in subsequent chapters. Such determinations may also raise the problem posed
by incidental questions, a topic that was discussed in Chapter 9.
The prohibition against polygamy in Canada will prevent a Canadian domiciliary from
validly contracting a polygamous marriage even in a country where it is permitted and with
a person domiciled in that country: see e.g. Azam v Jan, 2013 ABQB 301; Azam v Jan, 2012
ABCA 197. The same prohibition will not, however, deny marital status and resulting rights to
persons in polygamous marriages that were validly contracted abroad. This is often pro-
vided expressly in provincial legislation.
Family Law Act

RSO 1990, c F.3
1(1) In this Act, …

“spouse” means two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the
part of a person relying on this clause to assert any right. …
(2) In the definition of “spouse,” a reference to marriage includes a marriage that is
actually or potentially polygamous, if it was celebrated in a jurisdiction whose system of
law recognizes it as valid.
See also the definition of spouse in the Family Property and Support Act, RSY 2002, c 83 and
the Family Law Act, RSPEI 1988, c F-2.1.
C. Public Policy
Public policy is always available as a means of protecting the fundamental legal principles of
the forum: see Chapter 4. In the context of marriage, this device was often employed in rela-
tion to consanguinity, polygamy, or other forms of marriage that challenged the orthodoxy
of Christian marriages. The secularization of marriage and the increased tolerance toward
different forms of marriage in Canada has reduced the scope for the exception: but see Vladi
v Vladi (1987), 39 DLR (4th) 563 (NSSC).
III. COHABITATION AND CIVIL UNIONS
Hague Conference on Private International Law, Update on the Developments

in Internal Law and Private International Law Concerning Cohabitation
Outside Marriage, Including Registered Partnerships
Preliminary Document No 5 of March 2015 for the attention of the Council of
March 2015 on General Affairs and Policy of the Conference (footnotes omitted)
[11] Globally, cohabitation outside marriage is on the rise as an alternative to marriage

or as a stage preceding marriage. This rise is coupled with an increasing birth rate outside
wedlock. Consequently, the challenges faced by unmarried cohabitees or registered
partners in an international context affect an ever-growing number of people, including

an increasing number of children that may require protection in a private international
law context.
• • •
[13] In the United Kingdom, for example, cohabitation outside marriage is the fastest
growing family type with the number having doubled since 1996, increasing from 6.5%
to 11.7% of the population, or 5.9 million people in 2012. It is predicted that by 2031, one
in four couples will be cohabiting outside marriage.
• • •
[16] Cohabitation outside marriage has also become a common part of family forma-
tion in the United States of America, serving both as a step towards marriage and as an
alternative to marriage. The 2010 Census revealed that 6.6% of all households were
unmarried partner households, totalling 7.7 million couples, marking a 41% increase
from the 2000 Census.
[17] In Canada, married couples remained the predominant family structure (67%)
in 2011 but between 2006 and 2011, the number of “common-law” couples rose by 13.9%,
more than four times the 3.1% increase for married couples.
[18] The number of registered partnerships specifically is also on the increase, for
instance, in Europe where many States now allow couples to register their relationships.
The figures are higher for jurisdictions which, like France, have created a system of regis-
tered partnerships open to both opposite-sex and same-sex couples. Thus in France, in
2000, one year after the entry into force of the statute creating the pacte civil de solidarité
(hereinafter, “Pacs”), there were approximately 23,000 Pacs; in 2006, the number had
increased to approximately 77,400 and in 2012 to approximately160,200.
• • •
[20] In legal systems which have instituted a form of registered partnership reserved
for same-sex couples, the figures are not as large but still remarkable in due proportion.
In Switzerland, for example, over 2,000 same-sex partnerships were registered within the
first year of this being allowed (2007). The figure decreased to 695 new partnerships in
2012 and 693 in 2013.
The Hague Conference concludes that the diversity of forms of cohabitation and registered
partnerships risks creating “limping relationships” if couples cross borders. Moreover, most
states have private international law rules for marriage only, creating significant uncertainty
for unmarried couples in terms of status and also for issues relating to property rights, suc-
cession, and children. The Hague Conference suggests that the development of inter-
national instruments to govern all private international law aspects of these domestic
relationships should be considered.
In Canada, the definition of cohabitation for the purpose of determining the parties’
rights and obligations inter se differs across and even within provinces. These rights and
obligations are often limited to support and do not necessarily extend to divisions of prop-
erty that remain within the sole purview of matrimonial law: see Chapter 21, Matrimonial
Property. The constitutionality of that restriction was confirmed by the Supreme Court in
Nova Scotia (Attorney General) v Walsh, 2002 SCC 83, [2002] 4 SCR 325. Questions relating to
III. Cohabitation and Civil Unions 921
children, such as custody and child support, are related to parenthood and not to marital
status: see Chapter 20.
For the purpose of support, the traditional notion of “spouse” has been expanded. In
British Columbia, for example, s 3(1) of the Family Law Act, SBC 2011, c 25, defines “spouse” as
including a person living with another, of the same or different gender, in a marriage-like
relationship for at least two years. In Manitoba, s 1 of the Family Maintenance Act, CCSM
c F20, has replaced the expression “common-law spouse” with “common-law partner,” the
latter being defined as a person who either, with another person, “registered a common-law
relationship,” or “not being married to the other person, cohabited with him or her in a
conjugal relationship (i) for a period of at least three years, or (ii) for a period of at least one
year and they are together the parents of a child.” The legislation continues to use the term
“spouse” to refer to a married person. In Ontario, the Family Law Act, RSO 1990, c F.3 has
retained the term “spouse” in reference to married couples (s 1), but expands the definition
to include cohabitants in the section of the statute dealing with support obligations (s 29).
Beyond the legislated extension of rights and obligations to unmarried cohabitants,
several provinces have moved to recognize cohabitation agreements, whether expressed as
mere contractual agreements or through some form of registered union or partnership: see
Ontario Family Law Act, s 56; Nova Scotia Vital Statistics Act, RSNS 1989, c 494, Part II, Domestic
Partners, creating the “domestic-partner declaration” (as amended in May 2001 and brought
into force June 4, 2001); Quebec Act Instituting Civil Unions and Establishing New Rules of Filia-
tion, SQ 2002, c 6 (in force June 24, 2002), adding a series of new articles to the Civil Code of
Quebec on the union itself (arts 521.1-521.19 and 3090.1-3090.3) and amending several provi-
sions in Book Ten, Private International Law, to deal with choice of law and recognition of
civil unions: see arts 3122-3123, 3144-3145, 3154, and 3167. The existence of these institutions
raises issues of capacity and recognition in transborder cases.
For example, the Nova Scotia regime specifies that “[a] person may not make a domestic-
partner declaration if the person is not ordinarily resident in the Province or the owner of
real property in the Province at the time of the registration of the declaration” (s 53(4)). In
Quebec, the law of the place of solemnization of the union governs its validity, thereby
enabling any person, wherever domiciled or resident, to enter into a civil union in Quebec,
subject to the substantive rules of formation in arts 521.1 to 521.5—that is, majority, consent,
and consanguinity. This result is largely similar to the rule for marriage under s 5 of the Civil
Marriage Act, discussed above, although the Quebec rule is a bilateral choice of law rule not
limited to union solemnized in Quebec. Dissolution of the Quebec civil union and its effects
are governed by the law of the domicile of the spouses or the lex loci celebrationis. Quebec
courts have jurisdiction over dissolution where one of the parties is domiciled or resident in
Quebec or if Quebec was the place of solemnization. Unlike Nova Scotia, therefore, Quebec
is better prepared to deal with foreign civil unions, whether these are called “registered
partnerships” or otherwise. As usual, the analogy of the institutions will be considered at the
characterization stage.
The issue of recognition outside the jurisdiction of celebration arises with civil unions as
it does with same-sex marriages. Where an analogous institution exists, the civil union is
more likely to be recognized. Thus, English courts will give effect to same-sex unions validly
registered in Quebec or Nova Scotia even when they refuse to recognize a marriage between
the same two persons: see Wilkinson v Kitzinger, [2006] EWHC 2022 (Fam). In Hincks v Gallardo,
2014 ONCA 494, the issue was the reverse—the effect to be given to an English civil union in
Ontario. In that case, the same-sex couple did not have access to marriage in England and
had instead registered their partnership as provided for by English law at the time. The
Ontario courts held that the rights and obligations conferred under English law were analo-
gous to marriage under Ontario law and that public policy imposed a characterization of the
couple as “spouses” under both the Ontario Family Law Act and the federal Divorce Act.
The diversity of regimes governing cohabitation and civil unions across Canada (and
elsewhere) can give rise to conflicts when persons cross borders, whether their relationship
survives or not. The risk of a change in civil status as one crosses borders, with the accompany-
ing effect on rights and obligations, has long sustained the quest for uniform choice of law
rules in the international arena, most notably at the Hague Conference on Private International
Law. The concern with so-called limping marriages, once thought to be a relic of the past, has
reappeared as a result of significant social change in relation to same-sex relationships.

Bailey, Martha. “Same-Sex Relationships Across Borders” (2004) 49 McGill LJ 1005.
Bailey, Martha, Beverley Baines, Bita Amani & Amy Kaufman. “Expanding Recognition of
Foreign Polygamous Marriages: Policy Implications for Canada” in Angela Campbell et al,
Polygamy in Canada: Legal and Social Implications for Women and Children—A Collection of
Policy and Research Reports (Ottawa: Status of Women Canada, 2005).
Black, Vaughan. “Choice of Law and Territorial Jurisdiction of Courts in Family Matters” (2013)
32 Can Fam LQ 53.
Bornheim, Jan Jakob. “Same-Sex Marriages in Canadian Private International Law” (2013) 51
Alta L Rev 77.
Carruthers, Janeen M. “Party Autonomy in the Legal Regulation of Adult Relationships: What
Place for Party Choice in Private International Law?” (2012) 61 ICLQ 881.
Fentiman, Richard. “The Validity of Marriage and the Proper Law” [1985] Cambridge LJ 256.
Gallo, Daniele, Luca Paladini & Pietro Pustorino, eds. Same-Sex Couples before National, Supra-
national and International Jurisdictions (Berlin: Springer-Verlag, 2014).
Katz, Leslie. “The Scope of the Federal Legislative Authority in Relation to Marriage” (1975) 7
Ottawa L Rev 384.
Kaufman, Amy J. “Polygamous Marriages in Canada” (2005) 21 Can J Fam L 315.
Shakargy, Sharon. “Marriage by the State or Married to the State? On Choice of Law in Mar-
riage and Divorce” (2013) 9 J Priv Intl L 499.
CHAPTER EIGHTEEN
Dissolution of Marriage and

Other Unions
I. Constitutional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924

II. Divorcing in Canada: Jurisdiction and Choice of Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . 925
A. Domicile as a Basis for Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
B. Broadening the Jurisdictional Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925
C. Parallel Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929
D. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930
III. Recognition of Foreign Divorces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
A. Interprovincial Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
B. Foreign Country Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
C. Doctrine of Preclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
D. Extrajudicial Divorces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935
IV. Dissolution of Other Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942
V. Spousal Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943
Just as a traditional chapter on “marriage” no longer reflects current law and social practice,
the usual chapter on “divorce” must also give way to a broader category that includes dis-
solution of all forms of conjugal unions. However, as alternative regimes of dissolution are
still only emerging in domestic law, the recognition and effect of these dissolutions across
borders remain highly uncertain. Divorce therefore remains the main focus of this chapter.
Information on divorce rates in Canada is no longer current because the collection of data
on marriage and divorce was discontinued from 2011 onward; as a result, only data from
2008 is available. This data indicates that the trend in the total divorce rate in Canada has
been relatively stable since the late 1990s, although the rate for shorter marriages (three
years) has been increasing fairly steadily. Alberta and Ontario have the highest rate among
provinces, while Quebec and Newfoundland and Labrador have the lowest.
923
924 Chapter 18 Dissolution of Marriage and Other Unions

Trends and Statistics
Chapter 1, “Population and Families,” online: UNSTATS <http://unstats.un.org/
unsd/gender/downloads/WorldsWomen2015_chapter1_t.pdf>
In most countries with available data, the proportion of women aged 45 to 49 who are
divorced or separated is at least 25 per cent higher than the proportion of men who are
divorced or separated. Overall, the disparities between women and men in this regard
are higher in developing than in developed regions. However, large variations are found
across countries within each region, both in terms of the prevalence of divorce or separa-
tion and the gender disparities associated with them.
Divorce is on the rise globally. The percentage of divorced or separated women in Latin
America and the Caribbean and in the developed regions has increased. In the developed
regions, over 17 per cent of women aged 45 to 49 on average are divorced or separated,
while in Latin America and the Caribbean, the prevalence is about 16 per cent. However,
these regional figures hide large variations among countries. For example, among
developed countries, the prevalence of divorced or separated women aged 45 to 49 in the
Czech Republic (24 per cent) and Lithuania (22 per cent) is more than twice that of
women in Japan (8 per cent) and Slovenia (10 per cent).
• • •
The prevalence of divorce remains low in Asia and Northern Africa compared to other
regions of the world. In the latter region, the proportions of divorced or separated women
aged 45 to 49 have been increasing very slowly during the past 20 years and currently
stand at about 5 per cent.
I. CONSTITUTIONAL ISSUES
Section 91(26) of the Constitution Act, 1867 confers legislative power on the federal govern-
ment over marriage and divorce. Unlike marriage, however, no element of divorce is attrib-
uted to the provinces. Despite this exclusive allocation of power, the federal government did
not, in fact, occupy the field until 1968, when it first enacted comprehensive legislation in
relation to divorce. Before that date, the regulation of divorce had been left to the common
law such that it varied according to the time of reception of common law in the various prov-
inces. In Newfoundland, Ontario, and Quebec there was no law at all and federal statutes
were specifically enacted to deal with divorce in those provinces: see D Mendes da Costa, ed,
Studies in Canadian Family Law, vol 1 (Toronto: Butterworths, 1972) at 362-65 for details of
pre-1968 divorce law in Canada.
The federal power is extensive and covers jurisdictional as well as substantive issues.
Since 1968, the federal competence extends to corollary relief such as child and spousal
support and custody, which had previously been controlled by the provinces. When these
three issues arise outside of divorce, they have remained within provincial jurisdiction. The
exclusive federal power over corollary relief has so far been immune from constitutional
challenge. Any conflict between federal and provincial law on these issues is a matter of
constitutional law and not of private international law and should be resolved in accordance
with the doctrine of federal paramountcy: see Peter Hogg, Constitutional Law of Canada,
5th ed (Toronto: Carswell, 2007) (loose-leaf) at para 27.8.
II. Divorcing in Canada: Jurisdiction and Choice of Law Rules 925
II. DIVORCING IN CANADA: JURISDICTION AND

CHOICE OF LAW RULES
A. Domicile as a Basis for Jurisdiction
On the concept of domicile generally, see Chapter 5. Before federal legislation, jurisdiction
over divorce was governed by the rule in Le Mesurier v Le Mesurier, [1895] AC 517 (PC) (Ceylon).
This rule stated that the courts of the parties’ domicile at the time divorce proceedings were
commenced had exclusive jurisdiction. Because at that time a married woman necessarily
shared her husband’s domicile, this rule gave rise to hardship. In AG Alta v Cook, [1926] AC 444
(PC), a wife tried to sue her husband for divorce in Alberta, where the couple had been resident
and where a decree of judicial separation had been obtained by the wife. Despite that separ
ation decree, the Alberta court declared itself incompetent to hear a divorce petition. The
court held that the husband had not lost his Ontario domicile and, since the wife could not
have a separate domicile from her husband’s, she could only institute proceedings in Ontario.
On appeal, the court held that domicile in Canada was sufficient to found divorce jurisdiction
in any one province, but this was reversed by the Privy Council. It held that each province of
Canada was equivalent to a separate country for the purpose of determining domicile,
despite the fact that the federal government had exclusive legislative power over divorce.
The strict common law rule, which combined with the married woman’s domicile of
dependency, eventually led to judicial reconsideration of the rule in Le Mesurier. And
although early federal legislation incorporated these judicial correctives, it was only with the
1985 amendments that the federal statute abandoned domicile in favour of residence as the
governing rule for jurisdiction over divorce within Canada.
B. Broadening the Jurisdictional Bases

The first federal legislative intervention occurred in 1930 to correct the patent injustice
revealed by Cook. The Divorce Jurisdiction Act, SC 1930, c 15 provided:
A married woman who either before or after the passing of this Act has been deserted by and
has been living separate and apart from her husband for a period of two years and upwards and
is still living separate and apart from her husband may, in any one of those provinces in Canada
in which there is a court having jurisdiction to grant a divorce … , commence in the court of such
province having such jurisdiction proceedings for divorce … and such court shall have jurisdic-
tion to grant such divorce provided that immediately prior to such desertion the husband of such
married woman was domiciled in the province in which such proceedings are commenced.
This intervention was typical for the time and followed earlier legislation in New Zealand
(Divorce Act, 1898, s 3 and, later, the Divorce and Matrimonial Causes Amendment Act, 1930)
and Australia (New South Wales, Matrimonial Causes Act, 1899, s 16(a) and, later, the Matri-
monial Causes Act, 1959). In both countries, the legislature had intervened to deem that a
husband’s abandonment of his New Zealand/New South Wales domicile did not alter the
domicile of his deserted wife in that jurisdiction. England did not follow suit until 1937, but
its provision was broader than the Canadian provision because it did not include a minimum
period of desertion: see Matrimonial Causes Act, 1937, s 13. The harshness of the domicile of
dependency was mitigated in the context of deserted wives seeking divorce; though jurisdic-
tion remained based on domicile, legislation gradually came to assimilate a certain period of
residence, usually three years, as sufficient to confer jurisdiction over a deserted wife’s peti-
tion in divorce. It was not until 1968 that residency was given a role in establishing divorce
jurisdiction in Canada. However, domicile remained essential and would maintain that status
until the 1985 reform. Nevertheless, the unfairness of the domicile of dependency was cor-
rected in the 1968 Act, which provided that a woman’s domicile for the purposes of divorce
was no longer linked to her husband’s.
Divorce Act
SC 1967-68, c 24
5(1) The court for any province [as defined in section 2] has jurisdiction to entertain
a petition for divorce and to grant relief in respect thereof, if,
(a) the petition is presented by a person domiciled in Canada, and
(b) either the petitioner or the respondent has been ordinarily resident in that
province for a period of at least one year immediately preceding the presentation of
the petition and has actually resided in that province for at least ten months of that
period.
• • •
6(1) For all purposes of establishing the jurisdiction of a court to grant a decree of
divorce under this Act, the domicile of a married woman shall be determined as if she
were unmarried and, if she is a minor, as if she had attained her majority.
The notion of ordinary residence was canvassed in Chapter 5. The absence of definition of
the term in the statute put the onus on the courts to distinguish it from domicile: see e.g.
MacPherson v MacPherson (1976), 13 OR (2d) 233, 70 DLR (3d) 564 (CA).
The historical connecting factor of domicile was jettisoned in the latest reform of divorce
jurisdiction that took place in 1985. Reform in this area was becoming widespread in com-
mon law jurisdictions. The move away from domicile began in the United Kingdom with the
enactment of the Domicile and Matrimonial Proceedings Act, 1973 under which domicile or
“habitual residence” of either spouse for a year could confer jurisdiction on an English court.
The rejection of domicile as the sole jurisdictional basis for divorce was based on two grounds—
the increase in foreign elements in divorce proceedings due to greater individual mobility
and the “excessively technical” nature of domicile as a connecting factor. According to North,
the general effect of the change was to “give greater weight than did the old law to the interests
of the parties and less to that of international order and comity”: see North at 103. Canadian
reform went even further, removing all mention of domicile as a basis for divorce jurisdiction.
Divorce Act
RSC 1985, c 3 (2nd Supp)
3(1) A court in a province has jurisdiction to hear and determine a divorce proceeding
if either spouse has been ordinarily resident in the province for at least one year immedi-
ately preceding the commencement of the proceeding.
(2) Where divorce proceedings between the same spouse are pending in two courts
that would otherwise have jurisdiction under subsection (1) and were commenced on
different days and the proceeding that was commenced first is not discontinued within
thirty days after it was commenced, the court in which a divorce proceeding was com-
menced first has exclusive jurisdiction to hear and determine any divorce proceeding
then pending between the spouses and the second divorce proceeding shall be deemed
to be discontinued.
(3) Where divorce proceedings between the same spouses are pending in two courts
that would otherwise have jurisdiction under subsection (1) and were commenced on
the same day and neither proceeding is discontinued within thirty days after it was com-
menced, the Federal Court has exclusive jurisdiction to hear and determine any divorce
proceeding then pending between the spouses and the divorce proceedings in those courts
shall be transferred to the Federal Court on the direction of that Court.
Thus Canadian citizens or domiciliaries living abroad will not have access to Canadian courts
until they have returned to Canada for a year. Because substantive divorce law requires a
separation of at least a year to obtain an uncontested divorce, this requirement does not
appear unduly harsh. However, if their country of residence applies a different jurisdictional
rule, they may be left without access to a court in which to start divorce proceedings. The
question may therefore arise whether, under the Morguard rule (Morguard Investments Ltd
v De Savoye, [1990] 3 SCR 1077, 76 DLR (4th) 256 (reproduced in Chapter 3)) of “real and
substantial connection,” a Canadian court could take jurisdiction in a divorce proceeding
notwithstanding the fact that the applicant does not meet the requirements under the Act.
On the other hand, it has been held that the statutory residence requirements of s 3 are
substantive and not merely procedural in nature; jurisdiction cannot be consensual nor can
it result from a failure to object by a respondent: see Droit de la famille—360, [1987] RDF 171
(CS Qc); Rothgiesser v Rothgiesser (2000), 46 OR (3d) 577 (CA); and more recently Nafie v
Badawy, 2015 ABCA 36. Because the Morguard criterion is probably a threshold, there is noth-
ing preventing the Divorce Act from imposing a more demanding basis for jurisdiction. An
amendment to the statute would be necessary to effect an extension of the jurisdictional
basis. Interestingly, this occurred in 2013, not through an amendment to the Divorce Act but
rather to the Civil Marriage Act.
As noted in Chapter 17, the Civil Marriage Act, SC 2005, c 33 eliminated the limitation of
civil marriage to opposite-sex couples: ss 2 and 4. Although the statute is not limited to
same-sex couples, the 2013 amendments were enacted to respond to the specific challenge
associated with same-sex marriages entered into in Canada by foreign couples whose home
jurisdictions did not recognize their marriage and would therefore not entertain proceed-
ings to dissolve them. Since these foreign spouses did not reside in Canada, they could not
seek a divorce under the Divorce Act because of its jurisdictional requirement under s 3(1).
Section 5 was added to the Civil Marriage Act to confirm the validity of the marriage despite
the lack of capacity under the law of the parties’ domicile at the time of celebration: see
Chapter 17, Section II.B.2, “Essential Validity: Lex Loci Domicilii.” Section 7(1) addresses access
to dissolution of the marriage before Canadian courts. The court of the province where the
marriage was performed may, on application, grant the spouses a divorce if
(a) there has been a breakdown of the marriage as established by the spouses having
lived separate and apart for at least one year before the making of the application;
(b) neither spouse resides in Canada at the time the application is made; and
(c) each of the spouses is residing—and for at least one year immediately before the
application is made, has resided—in a state where a divorce cannot be granted because that
state does not recognize the validity of the marriage.
(2) The application may be made by both spouses jointly or by one of the spouses with the
other spouse’s consent or, in the absence of that consent, on presentation of an order from the
court or a court located in the state where one of the spouses resides that declares that the other
spouse
(a) is incapable of making decisions about his or her civil status because of a mental
disability;
(b) is unreasonably withholding consent; or
(c) cannot be found.
• • •
8. For greater certainty, the Divorce Act does not apply to a divorce granted under this Act.
These provisions make clear that non-resident same-sex couples are not entitled to seek
a divorce or other corollary relief under the Divorce Act. Instead, they are entitled to seek only
a dissolution of their marriage under the Civil Marriage Act under specific and cumulative
conditions enumerated in s 7. These conditions essentially recognize a jurisdiction of neces-
sity—that is, where it is the only option available to the couple.
A further consequence of the Civil Marriage Act is relevant to divorce proceedings as
demonstrated in the following case involving a same-sex union entered into in the United
Kingdom at a time where marriage was not available—that is, prior to the coming into force
in 2014 of the Marriage (Same Sex Couples) Act 2013. In this case, the Ontario Court of Appeal
affirmed the trial judge’s conclusion that the couple was entitled to seek dissolution of their
foreign civil partnership under the Divorce Act on the grounds that they should be consid-
ered “spouses” as defined by the Civil Marriage Act.
Hincks v Gallardo
2014 ONCA 494
HOURIGAN JA:
[7] Mr. Gallardo and Mr. Hincks are Canadian citizens. They met in Ontario in August
2009. Shortly after, they began a relationship.
[8] Mr. Hincks, who is also a U.K. citizen, asked Mr. Gallardo to live with him in Eng-
land. In October 2009, Mr. Gallardo travelled to the U.K. on a Civil Partnership Entry Visa.
[9] On October 21, 2009, in London, England, the parties entered into a civil partner-
ship under the CPA [Civil Partnership Act 2004 (UK), c 33]. To become civil partners, Mr.
Hincks and Mr. Gallardo provided documents to show that neither of them was already
married nor a civil partner in another union. Mr. Hincks and Mr. Gallardo were then
interviewed separately to ensure that their relationship was genuine and that they under-
stood their rights and responsibilities as civil partners. To formalize their union, the parties
signed a civil partnership document in the presence of a registrar and two witnesses.
[10] In 2009, same-sex couples could not marry in the U.K. However, according to
two expert witnesses who provided evidence on the motion, the CPA created a parallel
regime to marriage that provided same-sex partners with the same legal, financial, and
practical benefits and burdens as married spouses.
[11] On January 15, 2010, the parties relocated to Toronto. Over the following year,
the parties’ relationship deteriorated and by February 2011 the relationship had ended.
[12] On February 28, 2011, Mr. Gallardo served an application for divorce on Mr.
Hincks. In support of his application, Mr. Gallardo swore an affidavit in which he deposed
that he and Mr. Hincks were married in England on October 21, 2009. On March 3, 2011,
Mr. Gallardo withdrew his application.
[13] In March 2011, Mr. Hincks commenced his own divorce application. He claimed
divorce, equalization of net family property, and spousal support. Alternatively, Mr.
Hincks claimed spousal support under the Family Law Act [RSO 1990, c F.3] [FLA].
[14] After receiving Mr. Hincks’ application, Mr. Gallardo took the position that the
parties were not married and that the application disclosed no cause of action. Mr. Hincks
then moved for a declaration that the parties’ civil partnership is a marriage under the
Civil Marriage Act.
• • •
[28] The interpretation by the motion judge of the terms “spouses” and “marriage” is
entirely consistent with the modern approach mandated by the Supreme Court of Canada.
Her interpretation achieves one of the fundamental purposes of the Divorce Act [RSC
1985, c 3] [DA] and the FLA: it provides the parties with an equitable and certain process
for resolving their economic issues arising out of the dissolution of their relationship. In
contrast, the interpretation urged upon us by the appellant would result in the parties
being effectively treated as legal strangers under the legislation and would force them to
assert their economic claims through more limited and less predictable means, such as
trust claims.
• • •
[31] The appellant makes the in terrorem argument that by declaring a U.K. civil
partnership to be the equivalent to marriage for the purpose of the DA and the FLA, the
motion judge has called into question the constitutionality of all Canadian civil partner-
ships. In his submission, if civil partnerships are marriages, then civil partnerships are
ultra vires the jurisdiction of the provinces. This argument is fundamentally flawed
because it fails to recognize that civil partnerships in Canada are available to both same-
sex and opposite-sex couples. They are, therefore, not the equivalent of U.K. civil partner-
ships that are restricted only to same-sex couples.
C. Parallel Proceedings
Although the Divorce Act foresees and resolves the potential for multiple proceedings within
Canada arising out of its jurisdictional rules (see ss 3(2) and 3(3)), it is silent in relation to
concurrent divorce proceedings outside Canada. In such cases, a Canadian court may find
itself faced with a motion to stay its own proceedings on forum non conveniens grounds or,
alternatively, to issue an anti-suit injunction against the applicant in the foreign proceedings.
Courts across the country have applied the traditional forum non conveniens analysis in
divorce proceedings: see the detailed analysis in Nicholas v Nicholas (1996), 139 DLR (4th) 652
(Ont CA). In provinces that have enacted the Court Jurisdiction and Proceedings Transfer Act
(CJPTA), discussed in Chapter 6, some courts have turned to that statute as the basis for
declining jurisdiction in divorce proceedings: Armoyan v Armoyan, 2013 NSCA 99, while the
British Columbia Court of Appeal has held that the CJPTA has “no application to divorce
proceedings” given the exclusive federal power over divorce: Kanwar v Kanwar, 2010 BCCA
407. The decision does not clarify whether this also excludes the availability of the doctrine at
common law. Quebec courts have consistently referred to forum non conveniens as embod-
ied in art 3135 of the Civil Code of Quebec to examine requests for stays under the Divorce Act:
see e.g. MIB c M-PL, 2005 QCCA 1023. The British Columbia case may thus be an anomaly.
The possibility of concurrent divorce proceedings will not, in itself, justify either a stay of
proceedings or an anti-suit injunction. In Kornberg v Kornberg (1990), 76 DLR (4th) 379
(Man CA), the couple had lived in Manitoba most of their lives but the husband moved to
Minnesota when they separated. He brought a divorce action in Manitoba and the wife
started proceedings in Minnesota. At trial, the husband obtained an anti-suit injunction
enjoining his wife from proceeding in Minnesota. The Court of Appeal reversed on the
grounds that the trial judge had applied the wrong test in granting the injunction. The court
held that neither Minnesota nor Manitoba was clearly or distinctly the forum conveniens, thus
rejecting both the husband’s injunction request and the wife’s motion to stay the Manitoba
proceedings. On the multiplicity of proceedings question, Philp JA, for the court, noted that
the Divorce Act provided for a “first out of the starting gate test” to allocate exclusive juris-
diction within Canada (s 3(2)) and that this was an appropriate solution within a federal sys-
tem. In an international context, he stated that other factors could not be excluded although
he did not specify what these were. He merely concluded at 388: “It may well be that as the
proceedings continue in Manitoba and in Minnesota, one forum will emerge as the natural
forum for the resolution of the parties’ matrimonial and property disputes. That, however, is
a matter beyond the record in this appeal.” In fact, the court subsequently allowed the
divorce action to be severed from the matrimonial property aspect of the case.
The result was similar in Armoyan v Armoyan, 2013 NSCA 99, involving competing divorce
proceedings in Nova Scotia and Florida, the latter having been filed first. Unlike in Kornberg
v Kornberg, above, the Nova Scotia court was able to rely on the tests for stays and anti-suit
injunctions articulated by the Supreme Court of Canada in Amchem Products Inc v British
Columbia (Workers’ Compensation Board), [1993] 1 SCR 897, 102 DLR (4th) 96, in addition to the
criteria for a stay under s 12 of the Nova Scotia CJPTA, specifically the “desirability of avoiding
conflicting decisions.” Considering that the Florida divorce would be entitled to recognition
under s 22(1) of the Divorce Act (as discussed below), the Nova Scotia court held that this was
a significant issue that should be taken into account by a trial judge examining a request for
a stay of Canadian proceedings. As a result, the Nova Scotia court granted the stay regarding
all issues except for the division of matrimonial property.
The relative stability of jurisdictional rules for divorce in Canada can be contrasted with
significant changes in Europe following the adoption of Council Regulation (EC) No 2201/2003
of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments
in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No
1347/2000 (“Brussels II bis”), in force since March 1, 2005.
D. Choice of Law
The Divorce Act does not contain any provisions dealing with choice of law. Indeed, the fed-
eral nature of the law avoids the possibility of divergent provincial substantive law. Upon
III. Recognition of Foreign Divorces 931
finding itself competent, a Canadian court will always apply the substantive rules of the
Divorce Act to determine whether a divorce decree should be granted, regardless of the
foreign domicile of the parties or the foreign domicile and residence of one of the parties.
The absence of a choice of law question follows from the long-standing reliance on domi-
cile as a jurisdictional basis coupled with the domicile of dependency of married women.
Because questions of personal status are normally governed by the law of the domicile, and
jurisdiction for divorce was traditionally based exclusively on domicile, no conflict of laws
could arise since only local domiciliaries could petition the local court—hence the lex fori
was applied qua lex domicilii. Now that residence founds jurisdiction, however, this link has
been severed and the question may arise as to why Canadian substantive law is necessarily
applied to foreign domiciliaries seeking a divorce here. No answer is to be found in the
statute itself.
A similar silence is observable in the recent Australian and New Zealand legislation as well
as in the United Kingdom statute. As North points out, this appears to confirm that common
law jurisdictions have simply opted for a lex fori rule in relation to applicable law for prag-
matic reasons—“it is cheaper and quicker to apply the law of the forum”: see North at 114.
Following the adoption of uniform rules on jurisdiction and recognition in family matters in
the European Union, there was significant pressure to move away from this lex fori model
and to adopt uniform choice of law rules for divorce. The result was the enactment of Council
Regulation (EU) No 1259/2010 of 20 December 2010 implementing enhanced cooperation in the
area of the law applicable to divorce and legal separation (Rome III). This instrument innovates
by granting limited party autonomy to spouses who may choose among four laws to govern
their divorce or legal separation: art 1. In the absence of choice, preference is given to the law
of the spouses’ habitual residence: art 8. Unusually, Rome III is not obligatory, and only those
member states who choose to participate are bound by it (it entered into force in 2012 and
currently applies in 16 European Union countries).
III. RECOGNITION OF FOREIGN DIVORCES

A. Interprovincial Context
Any divorce granted under the Divorce Act has full force and effect throughout Canada and
has the immediate effect of dissolving the marriage between the spouses: see s 13. In terms
of divorce, therefore, there is no distinction among Canadian provinces; the federal nature
of the law means that Canada is treated as having no internal borders. The issue of recogni-
tion does not even arise.
B. Foreign Country Decrees

The history of rules governing the recognition of foreign divorce decrees is long and tortu-
ous. It is closely linked to the jurisdictional and substantive aspects of divorce and the
changes occurring therein over the last century. This history remains relevant because it is
the source of modern jurisdictional principles in Canadian private international law—
namely, that a “real and substantial connection” between the litigation and the foreign
rendering court will justify recognition of the judgment in Canada. It was the House of Lords
in Indyka v Indyka, [1969] 1 AC 33 that introduced that criterion to replace the otherwise rigid
condition according to which only those foreign divorces granted by courts of the spouses’
domicile could be recognized. That rule gave rise to significant hardship because of the then
existing rules about the wife’s domicile of dependency. As explained by Joost Blom, “The
Recognition of Foreign Divorces in British Columbia” (1976) 34 Advocate 95 at 97-98:
(5) The most remarkable feature of this area of the law is the development in the common
law starting in 1967 with the House of Lords’ decision in Indyka v. Indyka [1969] 1 AC 33.
Although each of the five Law Lords expressed himself in slightly different terms than the
others, all five were unanimous in holding that domicile would no longer be the sole common
law basis for recognizing foreign divorces. The new principle they put forward has been sum-
marized in most of the cases following Indyka as a recognition rule based on a “real and substan-
tial connection” between either of the parties and the foreign jurisdiction. Usually habitual
residence and citizenship, especially the former, have been regarded as the most important
constituents of this “real and substantial connection.”
A series of English cases from 1967 to 1971, which were all at first instance, steadily expanded
the scope of this new recognition rule. … [S]everal cases have held that a real and substantial
connection with the jurisdiction granting the divorce is not necessary if the divorce is recog-
nized by a jurisdiction with which the petitioner is substantially connected. …
These developments were a welcome liberalization of the old recognition rules, but they
introduced very unwelcome vagueness about the criteria for recognition. How substantial is
real and substantial? How long a period of residence constitutes a sufficient connection? …
Partly as a result of such criticisms, the Indyka doctrine was abolished in England by the Recogni-
tion of Foreign Divorces and Legal Separations Act, 1971, in favour of a list of more definite statu-
tory grounds for recognition …—[namely,] domicile, habitual residence of either party, and
nationality of either party. Recognition by the law of the domicile is also retained as a ground. …
[This statutory change resulted from the United Kingdom’s ratification of the 1968 Hague Con-
vention on the Recognition of Divorces and Legal Separations.]
As a postscript to all these grounds for recognizing divorces, mention should be made of the
rule in Travers v. Holley [1953] P 246 (CA). That case … laid down that a foreign divorce can be
recognized if an English court could have taken jurisdiction in the same circumstances, mutatis
mutandis, as the foreign court did. The rule has been applied in Canada, and is probably still
good law. In the context of the Divorce Act [1968]’s jurisdiction rules, it means that a BC court can
recognize a foreign divorce if the petitioner was domiciled in the foreign country at the time of
the petition, and if, in addition, the petitioner or the respondent was ordinarily resident in that
country [in accordance with the prescriptions under the Act].
The 1985 reform to the Divorce Act maintained the direct connection between the juris-
diction and recognition rules that had existed in the 1968 Act. However, the abandonment
of the domicile requirement at the jurisdictional stage necessarily broadened the recogni-
tion rule as well. The provision dealing with recognition of foreign divorces now provides:
Divorce Act
RSC 1985, c 3 (2nd Supp)
22(1) A divorce granted, on or after [June 1, 1986], pursuant to a law of a country or

subdivision of a country other than Canada by a tribunal or other authority having juris-
diction to do so shall be recognized for all purposes of determining the marital status in
Canada of any person, if either former spouse was ordinarily resident in that country or
subdivision for at least one year immediately preceding the commencement of proceed-
ings for the divorce.
(2) A divorce granted, after July 1, 1968, pursuant to a law of a country or subdivision
of a country other than Canada by a tribunal or other authority having jurisdiction to do
so, on the basis of the domicile of the wife in that country or subdivision determined as if
she were unmarried and, if she was a minor, as if she had attained the age of majority, shall
be recognized for all purposes of determining the marital status in Canada of any person.
(3) Nothing in this section abrogates or derogates from any other rule of law respect-
ing the recognition of divorces granted otherwise than under this Act.
Since s 22(3) retains the common law recognition rules, this signifies the end of the parallel
between rules of jurisdiction and rules of recognition, the latter now being broader than the
former. That s 22(3) provides an autonomous basis for recognition of a foreign divorce
despite the absence of 12 months of residence in the country where it was granted is dem-
onstrated by the following case.
RNS v KS
2013 BCCA 406
WILLCOCK JA:
[1] This is an appeal from a summary trial judgment resulting in the recognition of
a divorce order granted by the Family Court of Western Australia on July 1, 2010.
• • •
[6] On April 22, 2009, R.N.S. commenced an action for divorce and for orders address-
ing financial and child custody issues in the Family Court of Western Australia.
[7] K.S. appeared in the Australian proceedings but took issue with the court’s juris-
diction on the basis that the claimant had not been ordinarily resident in Australia for 12
months preceding the commencement of the divorce application
• • •
[11] On April 7, 2010, the Family Court of Western Australia held the claimant’s
Australian citizenship was sufficient to found its jurisdiction but dismissed the action on
the ground the parties had not been separated for a period in excess of 12 months before
the commencement of the proceedings.
[12] On May 7, 2010, R.N.S. re-instituted divorce proceedings in Australia. K.S. was
served but did not oppose the granting of the divorce order, which was granted on July 1,
2010.
• • •
[23] The appellant argues, first, that the summary trial judge ought to have found the
respondent was not resident in Western Australia for at least one year as of the date the
divorce proceedings were commenced.
[24] It is clear from the reasons for judgment that the summary trial judge concluded
it was not necessary to address the question of the respondent’s place of ordinary resi-
dence. The judge looked, rather, to the grounds upon which the Australian court had
exercised jurisdiction and to the question whether under section 22(3) of the Divorce Act
the divorce ought to be recognized on the basis that R.N.S. had a real and substantial
connection with Australia.
[25] She clearly rejected the argument made by K.S., repeated in the factum on appeal,
that there is a “bright line” rule established by section 22(1) of the Divorce Act, that pre-
cludes recognition of the Australian divorce if neither the claimant nor the respondent
was ordinarily resident in Australia for at least one year preceding the commencement
of proceedings for the divorce.
• • •
[27] In my view, the learned chambers judge was correct in rejecting that argument
and considering whether there was a real and substantial connection with Australia in
determining whether the common law test for recognition preserved by section 22(3)
was met. There was clearly some evidence before her upon which she could conclude that
test had been met. The appellant now concedes that was the case.
[28] I would not accede to the argument that the summary trial judge erred in failing
to consider whether there was evidence of a real and substantial connection with Western
Australia. The issue was not canvassed before the summary trial judge. The appellant does
not cite any authority to the effect that this court ought to have looked to the real and
substantial connection with an Australian State before giving effect to a judgment under
Australian federal law to a person with a real and substantial connection to Australia.
There is no basis upon which we can question the jurisdiction of the Family Court of
Western Australia to grant what is on its face an order under a federal statute to a person
with a real and substantial connection to Australia.
[29] The appellant further argues that even where there is a real and substantial con-
nection with the divorce-granting jurisdiction a foreign divorce should not be recognized
where there has been “forum shopping” with a view toward finding a more favorable
matrimonial property regime. The summary trial judge did not expressly consider “forum
shopping,” but found there was insufficient basis on the evidence to find fraud or that the
respondent had commenced the Australian proceedings for improper reasons. The appel-
lant has not established that the summary trial judge applied an inappropriate test in
doing so, or that she ignored or misapprehended relevant evidence. There is no basis for
setting aside the judgment on this ground.
In order for a foreign divorce decree to be recognized in Canada, it must fulfill certain basic
conditions beyond simply meeting the requirement of appropriate jurisdiction of the ren-
dering court: the decree must be a final order requiring no further steps to dissolve the
marriage conclusively, it must not have been obtained by collusion or fraud, and the pro-
ceedings must have conformed to Canadian rules of natural justice—failure to notify the
other party will usually prevent recognition: see e.g. Orabi v Qaoud, 2005 NSCA 28. If all of
these conditions are met, the Canadian court will not inquire into the grounds on which the
foreign court granted the divorce or otherwise look at the merits of the case.
In Quebec, the Civil Code of Quebec, art 3167 provides for a broader recognition of foreign
divorces. It allows recognition where “one of the spouses had his domicile in the State where
the decision was rendered, or had his or her residence in that State for at least one year
before the institution of the proceedings, if the spouses are nationals of that State or, if the
decision has been recognized in any of those States.” The constitutionality of this provision
was considered by the Superior Court in 1997 in relation to an Algerian divorce. The lower
court declared art 3167 invalid on the basis that it encroached on federal power and con-
flicted with s 22 of the Divorce Act. On appeal, however, the Quebec Court of Appeal dis-
missed the appeal on other grounds, specifically refusing to deal with the constitutional
issue since it was not essential to its decision: Droit de la famille—2054, [1998] AQ No 1573
(QL) (CA). The constitutional question therefore remains unresolved. In an immigration con-
text, however, the minister of citizenship and immigration argued, and the tribunal agreed,
that there was a conflict between s 22(1) of the Divorce Act and Civil Code art 3167, and that
therefore the former should prevail: Jabiri v Canada (Citizenship and Immigration), [2009]
IADD No 1912 (QL) (IRB (AD)).
C. Doctrine of Preclusion
Can one spouse rely on his or her own invalid divorce to avoid obligations under a subse-
quent marriage or to obtain benefits flowing from the original marriage? In Downton v Royal
Trust Co, [1972] SCR 437, 34 DLR (3d) 403, the Supreme Court of Canada adopted a narrow
version of the preclusion doctrine, holding (at 413 DLR) that it applies against “a spouse who
has ignored the jurisdictional requirements for a valid dissolution and who would none the
less insist to his or her own pecuniary advantage that the law be applied strictly in his or her
favour in disregard of an attempted dissolution which is invalid.” The doctrine was said to be
limited to the above circumstance, and specifically not so as to deny a spouse “the right to
seek a divorce before a competent Court merely because that spouse earlier invoked the
jurisdiction of an incompetent foreign Court” (at 413 DLR): see Blom at 207ff for a discussion
of this case. In Knight v Knight (1995), 16 RFL (4th) 48 (Ont Gen Div), the husband had obtained
a Mexican divorce from his first wife prior to marrying the appellant in Pennsylvania. Both
parties were Ontario domiciliaries at the time. The marriage was valid under Pennsylvania
law. Thirty years later, the couple separated and the husband tried to avoid spousal support
by challenging the appellant’s marital status on the ground that the second marriage (and
the Mexican divorce) would not have been recognized in Ontario. The court held that the
doctrine of preclusion applied to estop the husband from denying the validity of the mar-
riage: cf Fromovitz v Fromovitz (1977), 16 OR (2d) 751 (H Ct J).
D. Extrajudicial Divorces
Immigration brings with it specific difficulties arising from forms of divorce that are not avail-
able within the domestic forum but that are recognized under legal systems with which the
parties are closely connected. More often than not these divorces flow from religious laws,
such as the Jewish get or Islamic talaq. In such cases, the divorce can often be effected with-
out recourse to judicial proceedings. Although s 22 of the Divorce Act refers to “other author-
ity having jurisdiction to do so,” there is no judicial precedent to suggest that this language
is sufficient to include an extrajudicial divorce: but see s 21.1, which explicitly deals with
certain aspects of religious law concerning divorce, specifically the removal of barriers to
religious marriage.
English courts have grappled with the question and have agreed to recognize such
divorces where the general jurisdictional criteria for recognition have been met. Thus in
Qureshi v Qureshi, [1971] All ER 325 (Fam Div), the court recognized a talaq divorce, even
though both the divorce and the marriage had taken place in England, on the grounds that
the spouses had remained domiciled in Pakistan throughout. Statutory reform in England
restricted this broad basis, denying recognition to extrajudicial divorces obtained within the
British Isles.
The first Canadian case to have dealt with an extrajudicial divorce is the Supreme Court
of Canada’s decision in Schwebel v Ungar, below.
Schwebel v Ungar
[1965] SCR 148 (headnote)
In 1945 the defendant was married to W in Budapest, Hungary, which country was their
domicile of origin. Before their marriage they had decided to leave Hungary permanently
for Israel and in furtherance of this intention they left Budapest three weeks after the
marriage and, having put themselves in the hands of a Jewish deputy, started for Israel in
company with many thousands of other Hungarians. In 1948, while still en route to Israel,
they obtained a Jewish bill of divorcement in Italy in conformity with rabbinical law by
appearing, in the presence of witnesses, before a rabbi at which time a formal document
entitled a “gett” was delivered to the defendant. This document was not recognized either
in Italy or in Hungary as bringing the marriage to an end, but it was so recognized in
Israel, where the defendant and W finally arrived a few weeks after the “gett” was delivered.
As to W’s life and activities after his arrival in Israel the evidence was sketchy; as to
the defendant, the evidence disclosed that she remained in Israel and lived with her
parents. Some years later, while on a trip to Ontario for the purpose of visiting relatives,
the defendant met and married the plaintiff in Toronto. Subsequently, the plaintiff
obtained a declaration in the Supreme Court of Ontario that the marriage solemnized
between the parties at Toronto was null and void because there was a valid and subsisting
marriage then in existence between the defendant and W. On appeal by the defendant
the judgment at trial was set aside. With leave of the Court of Appeal, an appeal by the
plaintiff was then brought to this court.
Held: The appeal should be dismissed.
The manner of their coming to Israel was such as to justify a finding that immediately
upon their arrival W and the defendant acquired a domicile of choice in that country,
where the dissolution of their marriage was recognized from the moment when the “gett”
was delivered to the defendant, and where each of them therefore had the status of a single
person with full capacity to enter into a valid and binding contract of marriage. The
defendant was thereafter free to continue and did continue to be domiciled in Israel as
an unmarried woman until the time of her marriage to the plaintiff. Accordingly, at the
time of her marriage in Toronto the defendant had the capacity to marry according to
the law of the country where she was then domiciled.
Although, as a general rule, under Ontario law a divorce is not recognized as valid
unless it was so recognized under the law of the country where the husband was domiciled
at the time when it was obtained, the Court of Appeal was correct in its conclusion that,
for the limited purpose of resolving the difficulty created by the peculiar facts of this case,
the governing consideration was the status of the defendant under the law of her domicile
at the time of her second marriage and not the means whereby she secured that status.
This rather extraordinary case has been the object of criticism, although it was followed in
Padolecchia v Padolecchia, [1967] 3 All ER 863 (P). In England, Fawcett & Carruthers at 53-54
refer to it in the context of the incidental question: see the discussion of the incidental ques-
tion in Chapter 9. It is described as an example of a case where the rule of capacity to marry
superseded the rule as to recognition of foreign divorces, the latter being treated as merely
incidental. It has been of limited assistance to Canadian courts faced with extrajudicial
divorces, as illustrated in two cases dealing with talaq divorces in the immigration context.
Amin v Canada (Minister of Citizenship and Immigration)

[2008] 4 FCR 531
BARNES J:
[1] This is an application for judicial review by Tariq Amin of a decision by the
Immigration Appeal Division of the Immigration and Refugee Board (Board) [Amin v
Canada (Minister of Citizenship and Immigration), [2007] IADD No 768 (QL)]. The only
issue raised is whether the Board erred by finding that Mr. Amin had failed to establish
the existence of a legally valid Pakistani divorce which would have permitted him to
sponsor his spouse from a second marriage to immigrate to Canada.
I. Background
[2] There is little factual controversy in this proceeding. It is the legal significance of
the facts that is in issue.
[3] Mr. Amin was first married in Pakistan in 1989. Thereafter, he successfully spon-
sored his first wife as a permanent resident to Canada. In 1993, Mr. Amin’s first marriage
was purportedly dissolved in Pakistan in accordance with the Islamic pronouncement of
talaq. The record contains a notarized Divorce Deed dated October 1993 signed by Mr.
Amin which asserts the dissolution of this marriage by the following declaration:
1. That the executant and the said Mst. Nazish Nayyar cannot live any more as husband
and wife within the limits of Almighty Allah as above stated.
2. That the executant hereby divorce his wife namely Mst. Nazish Nayyar daughter of
Nayyar Ali Khan, thrice:
“I hereby pronounce Talaq (divorce) upon above named Mst. Nazish Nayyar daughter
of Nayyar Ali Khan thrice in presence of witness” and she is no more wife and she is
“Harram” on me. The said Mst. Nazish Nayyar is free to contract marriage after the
expiry of “Iddat” period.
3. That the executant reserves his right to claim the custody of her minor children at any
time.
[4] It is perhaps noteworthy that the above Divorce Deed refers to the fact that Mr.
Amin was then residing in “America” and it is undisputed that his wife was living in
Canada. It is also undisputed that Mr. Amin’s declaration of divorce was not registered
under the Muslim Family Laws Ordinance, 1961 [Ordinance No VIII of 1961] until 2005.
[5] Mr. Amin remarried in Pakistan on March 15, 2002. When Mr. Amin attempted
to sponsor his new wife as a permanent resident to Canada, a question was raised regard-
ing the 1993 divorce and further evidence was requested to confirm that it was legally
valid in Pakistan. Mr. Amin then petitioned the Lahore High Court in Rawalpindi seeking
a declaration with respect to the effectiveness of his 1993 divorce declaration and the
lawfulness of his 2002 remarriage. The Court resolved the issue in the following way:
9. In the instant case, respondent No. 2 Tariq Amin contracted Nikah with the petitioner
on 15.3.2002 after about eight and a half years of Talaaq pronounced by him to his first wife
Mst. Nazish Nayyar on 11.10.1993. So, even though respondent No. 2 had not given a notice
to the Chairman, the divorce dated 11.10.1993 became effective in Shariah after expiry of 90
days on 11.1.1994, and the marriage contracted thereafter between the petitioner Mst. Aisha
Tariq and respondent No. 2 Tariq Ameen, it is held, is valid marriage.
[6] Notwithstanding this declaration, Mr. Amin’s sponsorship application was refused.
The visa officer who declined the application did so for the following reasons:
As per local family laws, in order to be legally accepted, a divorce must be registered with a
local arbitration council and a certificate must be issued from the local arbitration council
confirming the details of divorce …
[7] On May 31, 2006, Mr. Amin initiated an appeal from the visa officer’s decision but
the Board was also not satisfied that his 1993 divorce was legally valid. …
II. Issues
[8] Did the Board err by failing to recognize the legal validity of Mr. Amin’s talaq
divorce?
III. Analysis
[9] The issue before the visa officer and subsequently before the Board was whether
it had been proven that Mr. Amin’s 1993 Islamic divorce was one which would be recog-
nized for all purposes in Canada. The Board was not satisfied that that point had been
clearly established on the evidence tendered. …
[10] In order for Mr. Amin to sponsor his wife as a permanent resident, it was neces-
sary for him to prove that his first marriage had been legally dissolved. This is a precondi-
tion to a family class sponsorship because of the requirement in paragraph 117(9)(c) [as
amended by SOR/2004-167, s. 41] of the Immigration and Refugee Protection Regulations,
SOR/2002-227, that the sponsor of a spouse not be, at the time of sponsorship, married
to another person. Accordingly, for Canadian immigration purposes, polygamous mar-
riages are not recognized.
[11] The evidence put forward by Mr. Amin to establish the fact of a valid Pakistani
divorce was found by the Board to be equivocal and, indeed, it was.
[12] The declaration given by the Pakistan High Court in Lahore is far from conclusive
on this point and, in my view, the Board was correct in its appraisal of that decision. Judge
Paracha seems to have been quite deliberate in pronouncing that Mr. Amin’s 1993 talaq
divorce was “effective in Shariah” and, therefore, his second marriage was valid. However,
other portions of that decision noted that Mr. Amin’s talaq divorce was not registered
under the Muslim Family Laws Ordinance, 1961 until July 30, 2005 and became effective
on that date. While these observations appear somewhat incongruent, they may well be
reconciled by the fact that polygamous marriage is accepted under Shariah law or, as it
was put in Mr. Amin’s pleading to the Court:
That according to law as well as Islam the defendant No. 1 was free to contract marriage with
the plaintiff on the date when he contracted marriage with the plaintiff because after expiry
of 90 days a male is free to contract second marriage, even otherwise Qur’am Sunnah has
given a right to contract four marriages at one time whereas in the peculiar circumstances
of the case contracted second marriage with the plaintiff after divorce of his first wife, thus
he was legally free to contract marriage with plaintiff on the said date.
[13] What is left unanswered in the evidence is whether Mr. Amin’s failure to comply
with the dictates of the Muslim Family Laws Ordinance, 1961 rendered his 1993 talaq
divorce invalid for other than religious purposes in Pakistan. On the face of that Ordin-
ance, it is apparent that a talaq form of divorce is not “effective until the expiration of
ninety days from the day on which notice … is delivered to the Chairman” of the Arbi-
tration Council. This point is confirmed in the divorce certificate issued by the Arbitration
Council to Mr. Amin and which clearly stated that the 1993 divorce was made effective
only on July 30, 2005. That certificate goes on to state that “[t]he parties are now at liberty
to marry according to Muslim family law 1961.” I would add to this that there is consider-
able judicial authority from England which recognizes the significance of the statutory
scheme for legally validating a talaq divorce in Pakistan. In Quazi v. Quazi, [1980] AC
744 (HL), at page 825, Lord Scarman made the point as follows:
The divorce became under Pakistan law effective not, as under the classic Islamic law, on
pronouncement of talaq but upon expiry of 90 days, unless revoked, from the notice in
writing to the chairman of the union council. That this is the law of Pakistan brooks of no
doubt.
Also see: Fatima v. Secretary of State for the Home Department, [1986] 2 All ER 32 (HL),
per Lord Ackner, at pages 35-36.
[14] In the face of the above pronouncements, and notwithstanding Ms. Lee’s capable
arguments, the Board’s conclusion that Mr. Amin had not proven the legal validity in
Pakistan of his 1993 religious divorce was reasonable and therefore unimpeachable on
judicial review.
[15] It was argued on behalf of Mr. Amin that there is Canadian jurisprudence which
has recognized the legal validity of foreign religious divorces and that the Board erred by
failing to apply that authority.
[16] Mr. Amin relies upon the Supreme Court of Canada decision in Schwebel v.
Ungar, [1965] SCR 148, where the Court seems to have recognized the validity in Canada
of a Jewish rabbinical divorce. There are, however, differences between the circumstances
of that case and those which arise here. The evidence in Schwebel was to the effect that
such a religious divorce was formally conducted before a Rabbi and was recognized by
the State of Israel. There is no indication given that any Israeli statutory requirements
were not met and, indeed, this seems to have been the only available means of obtaining
a divorce in Israel at that time. Furthermore, the Court concluded its decision with [a]
note of caution with respect to its precedential value … .
[17] Ms. Lee also cited the Immigration Appeal Division decision in Bhatti v. Canada
(Minister of Citizenship and Immigration), [2003] IADD No. 519 (QL), where the Board
recognized a talaq divorce for the purposes of a family class sponsorship.
[18] The problem with the Bhatti decision is that it does not clearly indicate whether
the talaq divorce in issue there had been registered in accordance with the Muslim Family
Laws Ordinance, 1961. On one reading, the decision suggests that statutory compliance
had been met in that case as can be seen from the following passage (at paragraph 7):
In support of his position, the appellant provided a letter from a lawyer in Pakistan, a Statu-
tory Declaration and opinion letters from two family law lawyers in Toronto. The divorce
deed executed in June 1996 is an extra-judicial divorce in that it is a talaq or a divorce under
Muslim law. The letter from Samina Khan, who is a lawyer practicing before the High Court
in Islamabad and who acted for the appellant with respect to his 1996 divorce, states that
divorce in Pakistan is governed by the Muslim Family Laws Ordinance, 1961. The Muslim
Family Laws Ordinance, 1961 recognizes the talaq form of divorce. In the lawyer’s view, the
appellant’s divorce deed met the substantive and procedural requirements of the law. [Foot-
note omitted.]
[19] There are statements in the Bhatti decision which are difficult to accept. For
instance, the Board interpreted subsection 22(1) of the Divorce Act, RSC 1985 (2nd.
Supp.), c. 3, requiring that a foreign divorce be granted “by a tribunal or other authority
having jurisdiction,” as being met by an extrajudicial divorce such as the Muslim talaq.
As far as I can tell from the record before me and from relevant legal authorities, the
pronouncement of talaq is nothing more than a unilateral declaration of divorce made
by the husband, usually in the presence of witnesses, and sometimes recorded in a private
divorce deed. Such a process is clearly insufficient to fulfill the requirements of subsection
22(1) of the Divorce Act and, to the extent that the Bhatti decision suggests otherwise, it
is, with respect, wrong: see Chaudhary v. Chaudhary, [1984] 3 All ER 1017 (CA).
[20] I would add that, for the purpose of applying domestic law, I have serious reserva-
tions about the appropriateness of recognizing extrajudicial divorces of the sort in issue
here. The obvious intent of subsection 22(1) of the Divorce Act was to require that some
form of adjudicative or official oversight be present before Canada will recognize a foreign
divorce. This requirement would be fulfilled by the process dictated by the Muslim Family
Laws Ordinance, 1961: see Quazi, above, at page 825; and Chaudhary, above, at page 1025.
The obvious purpose of such oversight is to address important public policy issues which
can arise out of the domestic recognition of informal or religiously based divorces. Many
of those concerns were identified in the following passage from Chaudhary, above, at
pages 1031-1032:
The essentials of the bare talaq are, as I understand it, merely the private recital of verbal
formula in front of witnesses who may or may not have been specially assembled by the
husband for the purpose and whose only qualification is that, presumably, they can see and
hear. It may be, as it was in this case, pronounced in the temple. It may be, as it was here,
reinforced by a written document containing such information, accurate or inaccurate, as the
husband cares to insert in it. But what brings about the divorce is the pronouncement before
witnesses and that alone. Thus in its essential elements it lacks any formality other than ritual
performance; it lacks any necessary element of publicity; it lacks the invocation of the assistance
or involvement of any organ of, or recognised by, the state in any capacity at all, even if merely
that of registering or recording what has been done. Thus, though the public consequences
are very different, the essential procedure differs very little from any other private act such
as the execution of a will and is akin to the purely consensual type of divorce recognised in
some states of the Far East (see eg Ratanachai v. Ratanachai (1960) Times, 4 June, Varanand
v. Varanand (1964) 108 SJ 693 and Lee v. Lau [1964] 2 All ER 248, [1967] P 14).
In my judgment, and looking at the 1971 Act alone, such an act cannot properly be
described as a “proceeding” in any ordinary sense of the word, still less a “proceeding” in what
must, for the reasons given above, be the restrictive sense of the word as used in the Act.
• • •
[26] It follows from the above that, for the purposes of paragraph 117(9)(c) of the
Immigration and Refugee Protection Regulations, Mr. Amin’s first marriage was not effect-
ively dissolved until 2005 when the requirements of the Muslim Family Laws Ordinance,
1961 were met. Because, under Canadian law, Mr. Amin was still married to his first wife
when he married for a second time, his application to sponsor his second wife was statu-
torily barred. The after-acquired 2005 divorce decree does not overcome this statutory
impediment: see Canada (Minister of Citizenship and Immigration) v. Subala (1997), 134
FTR 298 (FCTD).
[The court therefore dismissed the application for judicial review.]
In Canada (Citizenship and Immigration) v Hazimeh, 2009 FC 380, the court faced a different
scenario involving a talaq divorce pronounced in Ontario in 1993 before a representative of
the Supreme Shiite Islamic Council. The spouses had been married in Lebanon and the
respondent had arrived in Canada shortly thereafter, sponsored by her husband. One month
later, the parties were divorced before the Islamic Council in Ontario. The divorce was regis-
tered with the Jaafari Religious Court of Saida in Lebanon in 1999 and, a few months later,
the respondent remarried, again in Lebanon. The validity of the divorce was challenged by
the Canadian visa officer when the respondent sought to sponsor her (second) husband.
The Federal Court dismissed the appeal, holding that the divorce in question was not one
that could be recognized under s 22 of the Divorce Act, since it was not granted “pursuant to
a law other than Canadian law.” This conclusion followed from the court’s ruling that divorce
in Canada could only proceed under the Divorce Act. In other words, the talaq pronounced
in Ontario was not recognized as a divorce in Canada and therefore its registration in Leba-
non could not modify that consequence. Despite the fact that registration in Lebanon gave
effect to the divorce under Lebanese law, this was of no avail to the respondent in Canada.
Had the original talaq been performed in Lebanon with timely registration prior to the second
marriage, the result should have been different under the Amin reasoning above.
Indeed, where the spouses’ extrajudicial divorce is pronounced in the country of their
residence and effective therein, there are no obvious jurisdictional grounds for refusing to
recognize the divorce under Canadian law. Barring breaches of procedural justice—such as
appropriate notice: see Orabi v Qaoud, 2005 NSCA 28—there are no strong public policy
objections to the recognition of valid foreign extrajudicial divorces pronounced at a time
when the parties have no objective connections to Canada: see Droit de la famille—072464,
2007 QCCS 4822, [2007] RJQ 2656, var’d [2008] JQ No 2383 (QL) (CA).
IV. DISSOLUTION OF OTHER UNIONS

The Nova Scotia regime of registered domestic partnerships provides for dissolution in the
following terms:
Vital Statistics Act

RSNS 1989, c 494
Termination of domestic partnership

55(1) A domestic partner becomes the former domestic partner of another person
after the earliest of the following events occur:
(a) the parties file with the Registrar an executed statement of termination in the
prescribed form;
(b) the parties live separate and apart for more than one year and one or both
parties has the intention that the relationship not continue;
(c) one of the domestic partners marries another person; and
(d) the parties have an agreement registered with the court pursuant to Section 52
of the Maintenance and Custody Act.
(2) For the purpose of clause (1)(b) and subsection 53(4), a period during which parties
have lived separate and apart is not considered to have been interrupted or terminated
(a) by reason only that either party has become incapable of forming or having an
intention that the relationship not continue if it appears to the court that the separation
would probably have continued if the party had not become so incapable; or
(b) by reason only that the parties have resumed cohabitation during a period of, or
periods totalling, not more than ninety days with reconciliation as its primary purpose.
(3) Where a circumstance listed in subsection (1) occurs terminating the domestic
partnership, subject to the provisions of any other statute expressly addressing the rights
of domestic partners, each of the former domestic partners has the same rights and obliga-
tions under the statutes referred to in subsection 54(2) that accrue to spouses by separation,
separation agreement, court order or death, as the case may be.
Whether or not dissolution is recognized outside Nova Scotia is tied to the preliminary ques-
tion of status recognition. As discussed in Chapter 17, the absence of similar regimes in other
common law provinces in Canada suggests that entrance into and dissolution of registered
partnerships should take place entirely within Nova Scotia for the rights and obligations
arising under the Act to be given any effect. Under the Civil Code of Quebec, however, a Nova
Scotia registered partnership would be recognized if validly solemnized in accordance with
Nova Scotia law. If the partners were both domiciled in Quebec at the time dissolution was
sought, such dissolution would take place in accordance with Quebec law (art 3090.2); if the
parties last lived together in Nova Scotia, the law of that province would apply to the dissolu-
tion (art 3090.3). As noted above, where a foreign registered civil union provides for rights
and obligations equivalent to marriage, a Canadian court may well consider that the Divorce
Act provides a means for dissolution should the jurisdictional requirement of residency in
Canada be met: see Hincks v Gallardo, 2014 ONCA 494.
V. Spousal Support 943
V. SPOUSAL SUPPORT
Under ss 15 and 16 of the Divorce Act, the court is competent to make corollary relief orders
concerning support and custody: see further Chapter 20 for a discussion of child support
and custody. The jurisdiction of the court is governed by s 4(1) and depends on ordinary resi-
dence within the province for a year prior to commencement of proceedings. These powers
have been held to be constitutional as necessarily incidental to jurisdiction in divorce: see
Zacks v Zacks, [1973] SCR 891, and not to infringe the Charter: see Qually v Qually, [1987] 2
WWR 553 (Sask QB), aff’d [1989] 2 WWR 268 (CA). Given the constitutional doctrine of para-
mountcy, existing provincial legislation governing support is displaced in favour of federal
law when these types of relief are sought in the context of divorce proceedings. Spousal
support claims pursued under the Divorce Act do not give rise to any choice of law issues
since the substantive rules for support are provided by the statute itself. Where the Divorce
Act does not apply, however, provincial legislative competence over support is operative
both in terms of jurisdictional rules and applicable law.
The question has arisen whether parties divorced abroad can invoke the jurisdiction of
superior courts under s 4 of the Divorce Act to obtain corollary relief (or under s 5 to vary such
relief associated with a foreign divorce). In 2000, the Ontario Court of Appeal rejected such
a possibility in Rothgiesser v Rothgiesser (2000), 46 OR (3d) 577 (CA). The court held that par-
ties could not consensually confer jurisdiction on Canadian courts under the Divorce Act and
that the superior court’s jurisdiction under the Act was dependent on the existence of a
Canadian divorce. Labrosse JA concluded at para 59 that “Parliament’s jurisdiction over sup-
port [was] ancillary to its jurisdiction over divorce pursuant to s. 91 of the Constitution Act,
1867. Any attempt to deal with support obligations in the absence of a Canadian divorce
would encroach on provincial jurisdiction.” This view has been followed by courts in other
provinces: see RNS v KS, 2013 BCCA 406; Leonard v Booker, 2007 NBCA 71, 321 NBR (2d) 340;
but see GM v MAF, [2003] RJQ 2516 (CA).
Where the Divorce Act does not apply, either because the parties are not divorcing or have
divorced abroad, support claims can only be brought under provincial law where legislation
provides for it. Since 2002, the common law provinces have put in place a largely uniform
system to deal with interjurisdictional support orders (ISOs): see the Interjurisdictional Sup-
port Orders Act of each province. The list of reciprocating jurisdictions is provided by regula-
tion in each province and covers all Canadian provinces (including Quebec), the three
territories, and several foreign jurisdictions, including the United States, the United King-
dom, and Hong Kong. Under this scheme, local authorities receive requests from local claim-
ants and these are forwarded to the foreign debtor’s jurisdiction for determination by the
courts of that jurisdiction. The orders made are then registered and enforceable in the
claimant’s home jurisdiction without further formalities. In terms of applicable law, the court
making the support order will apply the lex fori to determine entitlement to (and calculation
of) support, unless that law does not provide for support, in which case the court will look
to the law of the common habitual residence of the couple.
The question has arisen whether the procedure under the ISO regime is exclusive and
constitutes a “complete code” for support claims against out-of-province debtors in recipro-
cating states: see Jasen v Karassik, 2009 ONCA 245 (reproduced in Chapter 20).
Internationally, there have been numerous efforts to develop uniform rules governing
jurisdiction and choice of law for support claims, usually referred to as maintenance claims.
A set of instruments was put forward by the Hague Conference on Private International Law
in 1973 to govern the recognition of foreign maintenance orders and the law applicable to
their determination. Canada has not signed them. The recognition convention is in force in
22 countries and continues to attract adhesion, the latest being Ukraine in 2008. The applic-
able law convention was less successful, garnering only 14 adhesions, the last being Greece
in 2003. The Hague Conference set out to develop modern versions of both conventions and
in 2007 adopted the Convention of 23 November 2007 on the International Recovery of Child
Support and Other Forms of Family Maintenance and an accompanying Protocol of 23 Novem-
ber 2007 on the Law Applicable to Maintenance Obligations. In force since 2013, both instru-
ments allow for some party autonomy in agreements concerning spousal support (art 7),
while generally adhering to a choice of law rule designating the substantive law of the
maintenance creditor’s habitual residence. The latter rule conforms to the model under the
older 1973 Hague maintenance conventions. In terms of jurisdiction and recognition, the
Hague model follows the ISO approach by setting up administrative cooperation mechan-
isms to facilitate the establishment and management of interjurisdictional claims. Canada is
not a party to these new instruments: for details, see <http://www.hcch.net>.
In the European Union, uniform law on jurisdictional and choice of law issues relating to
maintenance is provided by Regulation (EC) No 4/2009, Maintenance Obligations.

32 Can Fam LQ 53.
Blom, Joost. “Divorce in the Canadian Conflict of Laws: Two Recent Developments” (1973) 11
Can YB Intl Law 193.
Cossman, Brenda. “Exporting Same-Sex Marriage, Importing Same-Sex Divorce” (2013) 32
Can Fam LQ 1.
Fawcett, James & Janeen M Carruthers. Cheshire, North & Fawcett: Private International Law,
14th ed (Oxford: Oxford University Press, 2008) ch 21.
Glenn, H Patrick. “On Blackstone, California Divorces, and the Retrospectivity of the Common
and Civil Laws: Edward v. Edward” (1989) 34 McGill LJ 186.
Leckey, Robert. “Families in the Eyes of the Law: Contemporary Challenges and the Grip of
the Past” (2009) 15:8 Institute for Research on Public Policy Choices, online: IRPP <http://
archive.irpp.org/choices/archive/vol15no8.pdf>.
McEleavy, Peter & Eimear Long. “The New Hague Maintenance Convention” (2008) 57 ICLQ 984.
North, Peter M. “Reform, but Not Revolution: Divorce” (1990) 220 Rec des Cours 97.
Robertson, Gerald B. “Public Policy and Recognition of Foreign Divorces: Zhang v. Lin and
Marzara v. Marzara” (2012) 49 Alta L Rev 745.
Shakargy, Sharon. “Marriage by the State or Married to the State? On Choice of Law in Mar-
riage and Divorce” (2013) 9 J Priv Intl L 499.
CHAPTER NINETEEN
Nullity
I. Void and Voidable Marriages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

II. Jurisdiction to Grant a Nullity Decree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
A. Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946
B. Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950
C. Place of Celebration of Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
III. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 951
IV. Recognition of Foreign Nullity Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
A. Jurisdiction of the Foreign Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954
B. Defences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959
I. VOID AND VOIDABLE MARRIAGES

Nullity is conceptually distinct from divorce. Divorce proceedings accept that the parties are
married and seek to end that marriage. In contrast, nullity proceedings attack the validity of
the marriage itself. If a marriage is annulled, the parties are not married and there is no need
to consider divorce.
In challenging a marriage, the law distinguishes between void and voidable marriages.
The former are treated as though they had never happened, whereas the latter are consid-
ered to have been a valid marriage up to the point of being annulled. In the past, this distinc-
tion has been particularly important in the determination of the domicile of the parties. As
discussed in Savelieff v Glouchkoff, below, at common law, in the case of a voidable marriage,
a married woman’s domicile was dependent on that of her husband until the marriage was
annulled, whereas a void marriage was regarded as a complete nullity and thus a woman
was free to acquire a domicile separate from that of her supposed husband. Canadian juris-
dictions, however, have now abolished a married woman’s domicile of dependency: see
generally Chapter 5.
There is still considerable doubt as to what law determines whether a particular marriage
is void or voidable: see Rafferty at 86-90. Some courts use the law of the forum to so deter-
mine. But there are cases, such as De Reneville v De Reneville, [1948] P 100 (CA) and Solomon
v Walters (1956), 3 DLR (2d) 78 (BCSC), that determine this using the law that governs the
validity or invalidity of the marriage—thus looking at the choice of law rule for marriage.
945
946 Chapter 19 Nullity
II. JURISDICTION TO GRANT A NULLITY DECREE

The rules governing the jurisdiction of the courts in nullity petitions are confused and not
always logical. In light of the real and substantial connection principle established in Morguard
Investments Ltd v De Savoye, [1990] 3 SCR 1077, 76 DLR (4th) 256 (reproduced in Chapter 3) in
the context of in personam jurisdiction, the question arises as to whether some of the exist-
ing grounds for nullity jurisdiction will survive and whether the existence of a real and sub-
stantial connection will now suffice for jurisdictional purposes.
A. Domicile
There is clear authority to the effect that the courts of the parties’ common domicile have
jurisdiction to annul a marriage: see e.g. Ward v Ward (1985), 66 NBR (2d) 44 (QB). The follow-
ing two cases deal with situations where the parties do not have a common domicile.
Savelieff v Glouchkoff
(1964), 45 DLR (2d) 520 (BCCA)
TYSOE JA:
In this action the plaintiff (appellant) asks for a declaration that the marriage between
himself and the defendant is null and void by reason of a prior subsisting marriage of the
defendant. The marriage took place in Algeria. The learned trial judge [41 DLR (2d) 767]
dismissed the action holding that the court had no jurisdiction. For the purpose of decid-
ing the jurisdictional question the learned trial judge assumed that at the commencement
of the proceedings the plaintiff was resident and domiciled in this province and that the
defendant was resident in Ontario, as was alleged by the plaintiff.
The learned trial judge felt himself bound by the judgment of this court in Shaw v.
Shaw, [1946] 1 DLR 168, 62 BCR 52, [1945] 3 WWR 577. In that case the wife sued to
have the marriage declared a nullity on the ground of her husband’s impotence. The
marriage had been celebrated in Alberta and the husband was resident and domiciled in
that province. The wife sought to have the courts of British Columbia assume jurisdiction
on the sole ground that she herself was a permanent resident of British Columbia. As
Robertson JA said at p. 174 DLR, p. 60 BCR, p. 584 WWR: “In the case at bar the only
fact to support jurisdiction is the residence of the petitioner in British Columbia.”
The jurisprudence on the subject of jurisdiction in actions for nullity of marriage is
not in an entirely satisfactory state. To realize this one has only to read the judgments in
Ross Smith v. Ross Smith, [1962] 2 WLR 388; and De Reneville v. De Reneville, [1948] P
100, and in cases in our own courts such as Shaw v. Shaw, supra; Gower (wrongly called
Starrett) v. Starrett, [1948] 2 DLR 853, [1948] 1 WWR 529; and Khan (otherwise Worresck)
v. Kahn (1959), 27 DLR (2d) 171, 29 WWR 181. Reference may also be had to Spencer v.
Ladd, Finlay v. Boettner, [1948] 1 DLR 39, [1947] 2 WWR 817; Bevand v. Bevand, [1955]
1 DLR 854, 35 MPR 244.
I think it is important to keep in mind the distinction between a marriage which is
merely voidable and one which is void ab initio and between the results which flow from
each of them. In Ross Smith v. Ross Smith, supra, at p. 434, Lord Guest said:
II. Jurisdiction to Grant a Nullity Decree 947
Although the decree in an action of nullity declares the marriage null and void ab initio, it is
recognised that in some respects at any rate there is a distinction between void and voidable
marriages. Void marriages are regarded as never having taken place, due to previous marriage
of one of the parties, lack of form and of formalities and the like. These marriages can be
treated by parties to them as null without the necessity of a decree. Voidable marriages are
valid marriages until annulled by the courts. The familiar grounds for annulling a voidable
marriage are impotence and any of the statutory grounds, of which wilful refusal is an example.
• • •
The fact is that when a court pronounces a decree of nullity in the case of a void mar-
riage it is not bringing any state of affairs about but is merely making a declaration as to
what the state of affairs had been and is.
The differences in the results flowing from void and voidable marriages carries forward
into the matter of the jurisdiction of the courts to pronounce nullity decrees. In my
opinion, where the marriage is void ab initio as distinct from being merely voidable, the
courts of British Columbia are invested with jurisdiction where the person seeking the
decree, whether it be the so-called husband or the so-called wife, is domiciled in British
Columbia when the proceedings are taken and had. Domicile of the petitioner gives
jurisdiction to make a declaration of his or her status. A void marriage does not create
married status. This logically follows from the fact that there is no marriage at all. There
is no “husband” and no “wife.” The woman who participates in the celebration of such a
void marriage cannot be said to acquire the domicile of the man for she has no husband
from whom she can acquire domicile.
De Reneville v. De Reneville, supra, was decided three years after Shaw v. Shaw. It was
a case in which an Englishwoman, who before her marriage to the respondent was domi-
ciled and resident in England, married the respondent, a domiciled Frenchman, in Paris,
and lived with him at various places in France and French possessions. After some years
she left him and returned to England and presented a petition in the English courts for
nullity on the ground of the incapacity or wilful refusal of the respondent, who appeared
under protest and objected to the jurisdiction. The issue of jurisdiction was ordered to
be tried separately. Jones J held that there was no jurisdiction, and the petitioner appealed.
With the consent of counsel the appeal proceeded on the basis that the court would decide
the question of jurisdiction on two alternative hypotheses, one that the marriage was void
and the other that the marriage was voidable. Dealing with the hypothesis that the mar-
riage was void, Lord Greene MR, with whom Somervell LJ agreed, said at pp. 112-3:
If, however, the marriage is by its proper law a void marriage no decree of any court is
required to avoid it. The petitioner in that case did not acquire the French domicile of the
respondent by operation of law; she was free to acquire it or not as she chose and, if she
acquired it, to abandon it or change it for a different domicile of choice. It is clear on the facts
that if she was competent to do so she did abandon her French domicile (which I am assum-
ing she had acquired) and that she thereby resumed her domicile of origin, which was
English. Her domicile, therefore, on the hypothesis that the marriage was void, was English.
This at once raises a question as to the jurisdiction of the English courts to entertain a petition
for nullity by a supposed wife who is in a position to prove that her supposed marriage was
void and that her domicile on that basis is English at the date of the presentation of the
petition. This situation seems never to have arisen before the case of White v. White, [1937]
P 111, which was decided by my brother Bucknill when a judge of first instance.
• • •
In White v. White my brother Bucknill used words with which (save as regards the refer-
ence to residence which was in my opinion unnecessary) I respectfully agree. He said: “It
seems to me just to the petitioner and also in the public interest that the petitioner, being
domiciled and resident in this country should have her status as a single or as a married
woman judicially established by this court.” This view does, of course, theoretically at least,
open up the possibility of conflicting judgments by the courts of the respective domiciles.
But if it be not the right view, and if the only court with jurisdiction is a court in a country
where both are domiciled, the problem of jurisdiction based on domicile in the case of a
void marriage where the domiciles are different would appear to be insoluble.
• • •
In Ross Smith v. Ross Smith, supra, Lord Reid said at p. 401:

I accept the view that a wife alleging a void marriage can rely on her own domicile before
marriage if there is nothing to show that it has been changed except the existence of the
marriage. But in the case of a voidable marriage she cannot do that and must admit until the
case has been decided that her domicile is that of her husband. That means that if the mar-
riage is only voidable there is a court of a common domicile whose decision will be para-
mount. But if the marriage is alleged to be void there may be no such court.
• • •
I would add the dictum of our brother Sheppard in Ambrose v. Ambrose (1960), 25 DLR
(2d) 1 at pp. 14-5, 32 WWR 433 at p. 447, as follows:
This Court has jurisdiction to entertain this nullity suit on the ground of the domicile of the
parties being in British Columbia: de Reneville v. de Reneville [1948] P 100, Lord Greene MR
p. 108, and also on the ground of the domicile of the petitioner being in British Columbia:
White v. White [1937] P 111, 106 LJP 49, referred to in de Reneville v. de Reneville by Lord
Greene at p. 113.
I should point out that the Ambrose case was one involving an allegedly void marriage
and the man and not the woman was the petitioner.
• • •
It seems to me that the authorities I have referred to provide strong support for the
opinion which I have expressed.
Shaw v. Shaw, supra, is clearly distinguishable from the case at bar on its facts. In it the
marriage was merely voidable and, by reason of this fact, the petitioner’s domicile was
that of her husband, which was Alberta. The question before the court is whether residence
of the petitioner was sufficient to found jurisdiction. Those were the facts upon which the
court came to the conclusion that it had no jurisdiction to grant a decree of nullity, and
the various dicta, some of which appear to be obiter, must be read in that light.
• • •
It is my opinion that, if the plaintiff is domiciled in British Columbia, and if by its

proper law the marriage between the parties was a void marriage, the court below had
jurisdiction to grant the plaintiff the relief asked for by him.
• • •
II. Jurisdiction to Grant a Nullity Decree 949
I would allow the appeal and set aside the judgment below, but in the circumstances,
this matter must be referred back to the learned trial judge to complete the trial and to
give judgment in accordance with the facts as he finds them.
[Separate concurring judgments allowing the appeal were given by Bird and Lord JJA.]
Davies v Davies
(1985), 40 Alta LR (2d) 203 (QB)
McDONALD J:
[1] At the conclusion of the evidence in this action for a decree of nullity of marriage,
I indicated that I was satisfied that the grounds had been proved, namely the impotence
of the defendant. I indicated that the question of this court’s jurisdiction to grant the
decree was one that I wished to consider.
[2] I have now concluded that the court has jurisdiction to grant the decree, for the
following reasons:
[3] The marriage is voidable, not void. It was celebrated in Ontario. Until the separa-
tion of the parties in 1984 they lived together in Ontario, where both were domiciled. In
my view the law governing the incidents of the marriage was that of Ontario. The Family
Law Reform Act, 1978 (Ont.), c. 2, s. 65, provides in part as follows:
65(1) For all purposes of the law of Ontario, a married man has a legal personality that
is independent, separate and distinct from that of his wife and a married woman has a legal
personality that is independent, separate and distinct from that of her husband.
(2) A married person has and shall be accorded legal capacity for all purposes and in all
respects as if such person were an unmarried person.
(3) Without limiting the generality of subsections 1 and 2 …
(c) the same rules shall be applied to determine the domicile of a married woman as
for a married man.
The effect of that statutory provision in the present case was that the wife’s domicile no
longer depended automatically on that of the husband. She was free to acquire a domicile
in Alberta even though her husband remained domiciled in Ontario.
[4] Therefore, when after the separation, that is, in late 1984, the wife moved to Alberta
and intended to make it her permanent home, she acquired domicile in Alberta according
to the law governing that incident of the marriage. As the petitioner wife was domiciled
in Alberta when the statement of claim was issued on 2nd January 1985, this court has
jurisdiction.
[5] There will therefore be a decree nisi annulling the marriage.
Decree granted.
NOTES
1. In Davies, why was the petitioning wife’s domicile not determined in accordance with
Alberta law as the law of the forum? Should it have been?
2. Are the jurisdictional rules different depending on whether the marriage is alleged to
be void or voidable? See Davison v Sweeney, 2005 BCSC 757 at paras 18-19, 42 BCLR (4th) 69.
3. Contrast Davies with Stuart v Stuart (1983), 34 RFL (2d) 104 (Ont H Ct J), in which the
Ontario court failed to apply Ontario’s Family Law Reform Act to determine a wife’s domicile
for the purposes of nullity jurisdiction and instead applied the common law rules.
4. Is the domicile of the respondent a sufficient basis for nullity jurisdiction? There are
dicta to the effect that it is: see e.g. Khan v Khan (1959), 21 DLR (2d) 171 at 174 (BCSC); Grewal v
Kaur, 2011 ONSC 1812 at paras 55-56.
5. Article 3144 of the Civil Code of Quebec provides:
Quebec authorities have jurisdiction in matters of nullity of marriage … if the domicile or place
of residence of one of the spouses or the place of solemnization of their marriage … is in Quebec.
B. Residence
Sangha v Mander
[1985] 6 WWR 250 (BCSC)
HUDDART LJSC:
[16] Although the jurisprudence is clear that “the jurisdiction in nullity suits depends
on the principles and rules which were observed in the ecclesiastical courts before 1857”
(Ramsay-Fairfax v. Ramsay-Fairfax, [1956] P 115 at 131-32, [1955] 3 WLR 849, [1955]
3 All ER 695 (CA), per Denning LJ), it is equally clear that “the jurisprudence on the
subject of jurisdiction in actions for nullity of marriage is not in an entirely satisfactory
state” (Savelieff v. Glouchkoff (1964), 48 WWR 335 at 337, 45 DLR (2d) 520 (BC CA), per
Tysoe JA).
[17] After reviewing the texts and the considerable number of authorities provided
to me by counsel in a most useful brief, I have concluded that joint residence is a sufficient
basis for the exercise of nullity jurisdiction, whether the marriage is void or voidable. I adopt
the reasoning of Denning LJ in Ramsay-Fairfax, supra, which was approved unanimously
by the English Court of Appeal. Our Court of Appeal had earlier put forward this view
in obiter dicta in Shaw v. Shaw, 62 BCR 52, [1945] 3 WWR 577, [1946] 1 DLR 168. It is
implicit, as well, in Gower v. Starrett, [1948] 1 WWR 529, [1948] 2 DLR 853 (Farris CJSC).
[18] The parties having both been resident in British Columbia at the commencement
of these proceedings, this court has jurisdiction to entertain the claim.
NOTES
1. There is a line of Canadian authority to the effect that residence of the respondent
alone within the province at the date of commencement of proceedings is a sufficient basis
for jurisdiction: see e.g. Adelman v Adelman, [1948] 1 WWR 1071 (Alta SC); Khan v Khan (1959),
21 DLR (2d) 171 (BCSC); Ward v Ward (1985), 66 NBR (2d) 44 (QB).
III. Choice of Law 951
2. As to the residence of the petitioner alone, see the discussion in Gwyn v Mellen (repro-
duced below in Section IV.A, “Jurisdiction of the Foreign Court”) and Savelieff v Glouchkoff
(reproduced above in Section II.A, “Domicile”).
C. Place of Celebration of Marriage

The fact that a marriage was celebrated in a particular country may be sufficient to give the
courts of that place jurisdiction to annul the marriage. This is the case in Quebec: see
art 3144 of the Civil Code of Quebec. In common law jurisdictions, however, the precise scope
of this basis for jurisdiction is still somewhat unclear. Such a jurisdiction was asserted in
Simonin v Mallac (1860), 2 Sw & Tr 67, 164 ER 917, and this decision has been followed in
Canada: see e.g. Reid v Francis, [1929] 3 WWR 102 (Sask CA).
In Ross Smith v Ross Smith, [1963] AC 280 (HL), many of the judges disapproved of the
reasoning in Simonin and, in the final analysis, a majority was in favour of confining the juris-
diction of the courts of the place of celebration to marriages alleged to be void. There are
indications that this approach will now be followed in Canada. In D v D (1973), 36 DLR (3d) 17
(Ont H Ct J), Lerner J, citing Ross Smith, refused to take jurisdiction over a voidable marriage
celebrated in Ontario. In Gwyn v Mellen (reproduced below in Section IV.A, “Jurisdiction of
the Foreign Court”), the British Columbia Court of Appeal assumed that the courts of that
province could take jurisdiction over a void, as opposed to a voidable, marriage celebrated
in British Columbia.
III. CHOICE OF LAW

The choice of law rules in nullity proceedings are the choice of law rules for the validity of
marriages, discussed in Chapter 17.
Particular problems have arisen in determining the law governing marriages impugned
on the ground of one party’s physical incapacity. Because this issue, discussed in the follow-
ing case, typically arises in proceedings to annul a marriage, it is considered in more detail in
this context rather than in Chapter 17.
Sangha v Mander
[1985] 6 WWR 250 (BCSC)
HUDDART LJSC:
[2] Miss Sangha went through a valid marriage ceremony with Mr. Mander on 17th
August 1982 in British Columbia. At the date of the marriage and at the date of com-
mencement of proceedings, both parties were resident in British Columbia. Miss Sangha’s
ante-nuptial domicile was British Columbia. Mr. Mander came to British Columbia from
the Punjab, his place of birth, for the marriage. No domicile of choice was proven; thus
for the purposes of this action I must accept that this domicile of origin continues.
Whether that be India or a political subdivision of that country, I cannot determine from
the evidence.
[3] Miss Sangha issued a writ claiming a declaration of nullity of the marriage because
of Mr. Mander’s impotence. The action is uncontested. The evidence persuades me that
Mr. Mander was unable to consummate the marriage. This impotence resulted in his
leaving the matrimonial home seven days after the marriage ceremony. Although Miss
Sangha knows he lives within British Columbia, she does not know his exact whereabouts.
• • •
[19] By the domestic law of British Columbia, this marriage is voidable for want of
capacity in Mr. Mander to consummate it. Although some jurisprudence and some text-
writers consider that the lex fori is the proper law by which to determine the ultimate
issue of the validity of this marriage, I do not agree. This view, held by the authors of Dicey
and Morris, The Conflict of Laws, 10th ed. (1980), vol. 1, pp. 374 et seq., relies on Easter-
brook v. Easterbrook, [1944] P 10, [1944] 1 All ER 90, and Hutter v. Hutter, [1944] P 95,
[1944] 2 All ER 368, and on the choice of law in divorce matters. In neither case was the
choice of law issue addressed directly.
[20] In my view, analogy with a case of divorce is a weak basis upon which to support
the choice of law in a nullity action. While it is evident that both remedies terminate a
legal relationship, the historical and theoretical foundations of the two remedies are almost
entirely different. For this reason, and in the absence of any clear statement to the contrary,
I believe it is more likely that the court in Easterbrook and Hutter applied the presumption
that the proper foreign law was the same as the domestic law of the forum.
[21] There is also support in the jurisprudence for the application of the lex loci
celebrationis: see Robert v. Robert, [1947] P 164, [1947] 2 All ER 22; Addison v. Addison,
[1955] NI 1. However, it appears to be settled in England that the lex loci celebrationis is
to be applied only in relation to formal validity: Brook v. Brook (1861), 9 HL Cas. 193, 11
ER 703. Indeed, the Court of Appeal overruled the Robert decision in De Reneville v.
De Reneville, [1948] P 100, [1948] 1 All ER 56.
[22] The judgment of Lord Greene in the De Reneville case suggests as a possibility
the law of the matrimonial domicile. Until that decision in 1948, the generally accepted
choice of law rules in England would have dictated the application of the law of Mr.
Mander’s ante-nuptial domicile, he being the person whose impotence was alleged and
impotence being characterized as a matter of incapacity existing at the time of marriage:
see Brook, supra, and Sottomayor v. De Barros (1877), 3 PD 1 (CA). That the latter view
is the law is supported by a considerable number of persuasive writers: see inter alia,
Davies, Family Law in Canada (1984), pp. 54-55; Cheshire and North, Private Inter-
national Law, 10th ed. (1979), pp. 402-404, and Falconbridge, “Annulment, Jurisdiction
and Law: Void and Voidable Marriages” (1948), 26 Can. Bar Rev. 907 at pp. 914-21.
[23] However, Sachs J in Ponticelli v. Ponticelli, [1958] P 204, [1958] 2 WLR 439, [1958]
1 All ER 357, reached the conclusion, after an examination of the authorities, that the lex
domicilii of the husband at the date the claim is made should be applied. This was a case
of wilful refusal, which is not a ground for nullity in British Columbia, but Sachs J reached
his conclusion as if it were a matter of incapacity.
[24] Because the lex fori and the lex domicilii coincided, Sachs J did not have to choose
between the two which he found to be exhaustive of the possibilities on the basis of his
analysis of the House of Lords decision in Brooks, supra. Although he regarded both
impotence and wilful refusal as matters of incapacity, Sachs J did not consider that the
appropriate law to govern the issue should be the ante-nuptial law of the person alleged
to be incapable.
III. Choice of Law 953
[25] The strongest argument in favour of the view taken in Ponticelli is that wilful refusal
is a post-nuptial event akin to other grounds for divorce and, as such, should be governed
by the law of the domicile of the parties during marriage. This argument is not persuasive
given that wilful refusal is not a ground for annulment in British Columbia, and that a
wife has an independent domicile for purposes of the Divorce Act where wilful refusal is
relevant as a ground for the application of the presumption of marriage breakdown.
[26] Sachs J also considered the danger that there might be divergent adjudications
as to status if the lex fori applied. This danger will not arise if each party’s capacity falls to
be determined by his or her ante-nuptial domiciliary law. If, as Sachs J suggests at p. 215
of his reasons, “the initial validity of a marriage should, in relation to all matters except
form and ceremony … be consistently decided according to the law of one country alone,”
then Lord Greene’s preference expressed in De Reneville for the law of the “matrimonial
domicile” seems a more reasonable alternative than the law of the domicile of the parties
during marriage (the husband’s domicile). Sachs J did not consider this possibility. The
failure to consider the ante-nuptial domicile of the impotent person and the intended
matrimonial domicile of the parties reduces the persuasive effect of the judgment.
[27] No jurisprudence was cited to me in which the court discussed the choice of law
where the wife has been the petitioner and the husband, alleged to be impotent, is domi-
ciled in another jurisdiction. De Reneville and Casey v. Casey, [1949] 2 All ER 110 (CA)
do not consider choice of law as a discrete issue. However, they are instructive because
their facts are similar to the case at bar. It is implicit in Casey that the Court of Appeal
was saying that the same system of law should be used to determine the void, voidable or
valid nature of the marriage for jurisdictional purposes and for status purposes. Applying
that principle in both cases, the English courts refused jurisdiction. There was no common
residence as in the case at bar. This is the analysis of De Reneville favoured by McLeod, The
Conflict of Laws (1983), pp. 276 et seq., with which I agree. The decision in De Reneville
is consistent with the ante-nuptial domiciliary law of the impotent person being applied.
[28] There has been no attempt at statutory amendment of the common law rules as
to domicile of the wife in a voidable marriage as in Ontario (Family Law Reform Act, RSO
1980, c. 152, s. 65(3)(c)) and England (Domicile and Matrimonial Proceedings Act, 1973
(UK), c. 45, s. 1). In any event, it is not certain that the wife’s possession of an independent
domicile during the currency of a marriage would affect the choice of law to determine
status in a nullity proceeding: Stuart v. Stuart (1983), 34 RFL (2d) 104 (Ont. HC).
[29] Mr. Chapman’s suggestion that the common law rule (that the law of the wife’s
domicile of dependence governs in the case of a voidable marriage) is contrary to s. 15 of
the Charter is attractive. However, it is not necessary to have recourse to the Charter to
decide the issue. Nor is it necessary to choose between the ante-nuptial domicile of the
impotent person and the intended “matrimonial domicile” of the spouses as the rule
governing the choice of law in this case. There is much to be said in support of both. The
former may be more rational, given that the issue of impotence is best characterized as
one of capacity, that the trend of legislative enactment is toward independent post-nuptial
domiciles, and that it is best supported by the limited jurisprudence. A matrimonial
domicile may be a practical alternative. Certainly it is a concept that requires definition.
[30] I find that the result in this case will be the same, whichever of these two alterna-
tives is selected.
[31] There is a presumption that unproven foreign law is the same as that of the forum.
This presumption may not correspond to fact. However, Mr. Mander had an opportunity
to appear—he chose not to do so. Miss Sangha does not know his exact whereabouts in
British Columbia. The pleadings alleged his domicile is unknown and his place of birth
as the Punjab, India.
[32] In these circumstances, the inability of Miss Sangha to prove the domicile of Mr.
Mander does not prevent her from taking the benefit of that presumption. In the result,
Miss Sangha is entitled to the declaration of nullity she seeks.
NOTES
1. What choice of law rule does the court apply? How does that rule compare to the
choice of law rules, discussed in Chapter 17, for formal and essential validity of marriage? Is a
broader or narrower rule being used?
2. Annulment based on lack of consent raises similar issues. Walker, at para 17.4(c), sug-
gests that a marriage can be annulled based on a lack of consent of a party if such consent is
lacking under the law of either party’s antenuptial domicile or, possibly, the law of the place
of celebration of the marriage. A narrower approach would apply only the law of the domi-
cile of the party whose consent is in issue.
3. In Sahibalzubaidi v Bahjat, 2011 ONSC 4075, the court, relying on Walker, emphasized
the notion that even if a marriage were valid under all applicable foreign legal systems, “it
seems that it may be annulled in accordance with the provisions of Canadian domestic law
by virtue of being the law of the place where the proceeding is instituted.” Is this approach
justifiable? The current language in Walker is different: “even if a marriage is not invalid by
one of these laws, it may be invalidated by a mandatory provision of Canadian law.”
IV. RECOGNITION OF FOREIGN NULLITY DECREES

A. Jurisdiction of the Foreign Court
A foreign nullity decree will be recognized as binding in Canada where it has been granted
by a court of competent jurisdiction. The major bases for a foreign court’s jurisdiction are
discussed in the following case.
Gwyn v Mellen
[1979] 6 WWR 385 (BCCA)
[The respondent married George Mellen in Argentina in 1960. She purported to divorce
Mellen in Mexico in February 1970, neither party appearing personally before the Mex-
ican court. In March 1970 she married the appellant in England. At the time of the mar-
riage, the appellant was working in England, but he had retained his domicile in Canada,
which he never lost at any time after the marriage. In March 1977, the respondent peti-
tioned in England for a divorce from the appellant. She later amended her English divorce
petition to seek, instead, a declaration of nullity and, in April 1978, a nullity decree was
granted. In the proceedings in British Columbia, she was attempting to enforce an order
IV. Recognition of Foreign Nullity Decrees 955
for interim maintenance granted in the English proceedings. Counsel for the appellant
agreed that the interim maintenance order could be recognized in British Columbia if
the English courts were regarded by British Columbia as having jurisdiction to annul the
marriage. The case therefore resolved itself into the question whether British Columbia
would recognize the English nullity decree.]
MacDONALD JA (Hinkson and Lambert JJA concurring):

[5] … The law governing recognition of foreign decrees of nullity is correctly stated
in Dicey and Morris, The Conflict of Laws, 9th ed. (1973), p. 364, in R 50. It states:
Rule 50.—A foreign decree of nullity will be recognised in England—
(1) if the parties were domiciled in such foreign country at the commencement of
the proceedings for nullity; or
(2) if the parties were resident of such foreign country at the commencement of the
proceedings for nullity; or
(3) if the nullity decree would be recognised by the courts of the country where, at
the date of the commencement of the proceedings, the parties were domiciled.
[6] At the commencement of the proceeding the appellant was domiciled in Canada
and the respondent in Texas. At that time she was resident in England but he in Canada.
There was only one cause of action, that for annulment. The application for interim main-
tenance was not in any way independent. It was just a part of the proceeding for annul-
ment. It could not be severed from it.
• • •
[8] I address myself … to the question whether the English nullity decree ought to be
recognized in this province. If the answer is “yes,” as I understand his position, Mr. Moir
does not contest the proposition that the interim maintenance order made in the same
proceeding should also be recognized here.
[9] The first ground on which Mr. Skorah submitted that the English court had juris-
diction, under our conflict of law rules, to grant a decree of nullity was that England was
the place of celebration of the marriage. Before turning to the cases relied on in support
of that proposition, it is important to note that this was a void, not voidable, marriage.
• • •
[13] [In Ross Smith v Ross Smith, [1963] AC 280, [1962] 1 All ER 344] a majority of
the House of Lords decided that there was no jurisdiction to annul a voidable marriage
simply because it was celebrated in England.
[14] This brings me to Merker v. Merker, [1963] P 283, [1962] 3 All ER 928. The [P]
headnote states these facts:
The parties went through a Roman Catholic ceremony of marriage in Germany in April, 1946,
when they were both domiciled in Poland and serving with the Polish Army in Germany.
No formalities of German law were complied with, and the marriage was subsequently
registered, in the absence of both parties, with the local registrar. Thereafter the wife left the
husband on the ground that he had treated her with cruelty and both parties agreed to take
steps with a view to the dissolution of the marriage. In February, 1947, a petition was filed in
the Aurich Provincial Court for a declaration of nullity on the ground that the local law relat-
ing to the formalities of a marriage had not been complied with and the court subsequently
declared the marriage to be null and void. Under the German law applicable to the marriage
in 1946 the marriage was deemed to be non-existent, no registrar having co-operated in its
celebration and the purported registration being of no legal effect to change the nature of
the marriage. Further, according to German law, although the Aurich court was a court of
competent jurisdiction, its decree purported to declare the marriage null and void whereas
on the facts the court should have declared it to be a non-existent marriage, there being a
legal distinction between the two. Accordingly, the decree would be regarded by the German
courts as a complete nullity.
In the autumn of 1947 the wife came to England, where she had since resided.
[15] Upon the petition of the wife for a declaration as to her status, Sir Jocelyn Simon
P found that the marriage purportedly celebrated on 22nd April 1946 had been validly
annulled on 30th April 1947 by the decree of the Aurich court. I quote from his judgment
at pp. 296-97:
A decree of nullity of marriage pronounced by a foreign court of competent jurisdiction will,
in the absence of fraud or unless contrary to natural justice, be recognized as binding and
conclusive by the courts of this country: Salvesen (von Lorang) v. Administrator of Austrian
Property, [1927] AC 641 (HL). The first question to determine is therefore whether the decree
of the Aurich court is in the international sense the judgment of a court of competent juris-
diction in the matter. In Corbett v. Corbett, [1957] 1 WLR 486 the district court of Jerusalem
had pronounced a decree of nullity on the ground of the bride’s incapacity to contract the
marriage in question. The bridegroom was not domiciled in Palestine at the time of the
proceedings; but Barnard J recognised the decree as binding, since the court had jurisdiction
as that of the place both of the celebration of the marriage and of the residence of the parties
at the marriage and of the residence of the parties at the time of the proceedings. The decision
has been criticised; but its authority as to jurisdiction seems now to have been placed beyond
doubt by the combined effect of Ross Smith v. Ross Smith [supra] and Travers v. Holley, [1953]
P 246 (CA). In the former case the House of Lords affirmed, in so far as it related to void
marriages, the decision in Simonin v. Mallac (1860), 2 Sw. & Tr. 67, 164 ER 917, that an
English court has jurisdiction in nullity when the marriage has been celebrated in England,
though refusing to extend the decision to voidable marriages. In Travers v. Holley the Court
of Appeal laid down that where the courts of this country claim a ground of matrimonial
jurisdiction it would be contrary to principle and inconsistent with comity to refuse to rec-
ognise the jurisdiction of a foreign court based on a similar ground. The Aurich court should
therefore, in my view, be recognised as competent to annul the marriage in this case, on the
ground that it was celebrated in Germany and was in German law properly void ipso jure.
• • •
[17] In Corbett v. Corbett, supra, at p. 489, Barnard J adopted the statement in Dicey’s
Conflict of Laws, 6th ed.:
The courts of a foreign country have jurisdiction to pronounce a decree of nullity of marriage
if— … (2) semble, if the marriage was celebrated in such foreign country …
A statement to such effect is not part of R 50, which I quoted earlier in Dicey and Morris,
The Conflict of Laws, 9th ed. In that latest edition at p. 368, in discussion of the ground
of residence in the foreign country the authors say this:
It will be recalled that in Ross Smith v. Ross Smith [supra] the House of Lords declined to
exercise jurisdiction to annul a voidable marriage on the basis that it had been celebrated
in England, and was equally divided on the question whether such jurisdiction would exist
in the case of a void marriage. It may be, therefore, that the place of celebration will decline
in importance as a basis for the recognition of foreign decrees.
But there is this important statement at p. 369:

Rule 50 has been deliberately confined to the cases in which foreign nullity decrees have so far
been recognised by English courts; but the decisions are few in number and the possibilities
have not yet been fully worked out. It cannot therefore be said that Rule 50 is exhaustive.
Then, in a footnote to that statement the text says:

Dicta in Merker v. Merker [supra] … suggest that the principle of Travers v. Holley [supra] …
might be extended to the recognition of foreign nullity decrees.
That is a reference to the portion of Sir Jocelyn Simon P’s judgment in Merker v. Merker
which I have quoted.
[18] Rayden on Divorce, 13th ed. (1979), gives this measure of recognition to Merker v.
Merker at p. 107:
24. Annulment by the Court of the locus celebrationis.—It has been decided that a decree
of nullity pronounced by the Court of the place where the marriage was celebrated will be
recognised by the English Court, provided that the marriage was void.
8 Hals. (4th) 362, in para. 500 is unequivocal:

Subject to certain exceptions, a decree of nullity of marriage pronounced by a foreign court
of competent jurisdiction will be recognised as binding and conclusive by the English court.
Such a decree would be recognised if, at the commencement of the proceedings in the foreign
country … in the case of a void marriage, if the marriage was celebrated in the country where
the decree was pronounced. A foreign decree of nullity will also be recognised in England
if the English court would have had jurisdiction in converse circumstances to entertain the
proceedings.
Next, I refer to R.H. Graveson, Conflict of Laws, 7th ed. (1974), which states this at p. 337:
Following the decision in Mitford [[1923] P 130] and employing the reasoning of reciprocity,
the court in Corbett v. Corbett [supra] recognised an Israeli decree of nullity of a marriage
celebrated in Jerusalem and void for lack of capacity to marry. Again, in Merker v. Merker
[supra], the court recognised a German decree of nullity of a purported marriage celebrated
in Germany by an extension to foreign decrees (Travers v. Holly [supra]) of the principle of
English jurisdiction over void marriages on the basis of the place of celebration. …
Finally I refer to Cheshire’s Private International Law, 9th ed. (1974), at p. 412:
(iii) Celebration of the marriage in the foreign forum
If the marriage is voidable, then as has just been stated, celebration in the foreign forum will
not confer jurisdiction on the foreign court. If the marriage is void, there is clear authority
for the view that a decree of nullity is effective in England if given by the court of the locus
celebrationis. However, once again the basis for such a conclusion appears to be reciprocity
with the English rule. The English rule is abolished by the Domicile and Matrimonial Proceed-
ings Act 1973 and so it is now very doubtful whether foreign decrees would be recognized
on this basis, save possibly in the case of decrees based on formal invalidity.
Corbett and Merker v. Merker are cited in support of this statement.

[19] The doubt raised by the Domicile and Matrimonial Proceedings Act, 1973 (Eng.),
c. 45, does not apply in this case. British Columbia will take jurisdiction in an action to
annul a void marriage if the marriage was celebrated in British Columbia. See Gower v.
Starrett, [1948] 1 WWR 529, [1948] 2 DLR 853 (BC), and Savelieff v. Glouchkoff (1964),
48 WWR 335, 45 DLR (2d) 520 (BC CA). So on the facts of this case, if the geographical
jurisdiction had been reversed, British Columbia would have taken jurisdiction on the
basis of being the place of celebration of the marriage alleged to be void. England took
jurisdiction on the basis of the residence of the wife, and, in 1977, would not have taken
jurisdiction on the basis of being the place of celebration of the marriage. However, in
my opinion, the principle of recognition based on reciprocity is founded on the concept
that both the domestic court and the foreign court would have exercised the jurisdiction
that the foreign court in fact exercised to decide the question that it decided. It is not a
part of the reciprocity principle that the jurisdiction must be assumed by each of the
courts for the same reason. The reciprocity principle was adopted in Robinson-Scott v.
Robinson-Scott, [1958] P 71, [1957] 3 All ER 473, though the residence basis on which
the English court would have taken jurisdiction, if the geographical jurisdictions had
been reversed, was different from the separate domicile basis on which the foreign court
founded its jurisdiction. That was a divorce case, but I consider that the reasoning under-
lying the decision in that case is applicable in a nullity case and that it is applicable to
British Columbia.
[20] In my judgment, the weight of authority is such that, on the basis of the reciproc-
ity principle, our courts should recognize the nullity decree pronounced in this case in
England since, on the facts of this case, and if the geographical jurisdictions had been
reversed, our courts would have assumed jurisdiction to hear this matter and to grant
such a decree.
[21] The application of the reciprocity principle is sufficient, on the facts of this case,
to decide the principal question in this appeal. However, even if my conclusion that the
reciprocity principle applies is wrong, either because British Columbia should not assume
jurisdiction to annul a void marriage celebrated in British Columbia or because the reci-
procity principle should only be applied where the basis on which the jurisdiction is
assumed is the same in both the domestic and the foreign court, then I would, nonetheless,
reach the same conclusion that we should recognize the English nullity decree in this
case. I would do so on the basis of the “real and substantial connection” principle flowing
from Indyka v. Indyka, [1969] 1 AC 33, [1967] 2 All ER 689 (HL).
[22] … Rayden, 13th ed., at p. 108, contains this paragraph:
26. Substantial Connection: Nationality.—If a nullity decree is granted by a Court where

one of the parties has a real and substantial connection, the Courts here would now recognize
such a decree.
Rayden relies, for this proposition, on Law v. Gustin, [1976] Fam. 155, [1976] 1 All ER
113. That was a decision of Bagnall J of the Family Division in England. It supports the
application of the Indyka principle to permit the recognition of a foreign decree of nullity
in circumstances where the reciprocity principle would not have had application.
[23] The majority of the Court of Appeal of Manitoba applied the principle to recog-
nize a West German divorce in Holub v. Holub, [1976] 5 WWR 527, 26 RFL 263, 71 DLR
(3d) 698. … Equally, the principle ought to be applied in British Columbia, on appropriate
facts, to recognize a foreign decree annulling a void marriage. Mrs. Mellen had a real and
substantial connection with England. She has been a resident without interruption in that
country from a date preceding the ceremony of marriage with Mr. Gwyn in March 1970.
Her domicile, if ascertained by reference to the same factors as would apply in the case
of any other individual capable of having an independent domicile, would be England.
• • •
[30] I would dismiss the appeal.
NOTES
1. For more detailed analysis of this issue see Rafferty; see also Pitel & Rafferty.
2. Does the test for recognition depend on whether the foreign decree is in respect of a
void or a voidable marriage?
3. Cases in which the parties have different domiciles are more complex. In Re Capon,
[1965] 2 OR 83, 49 DLR (2d) 675 (CA), the Ontario Court of Appeal was prepared to recognize
a nullity decree granted by the courts of the petitioner’s domicile. The court also intimated that
a decree granted by the courts of the respondent’s domicile would be recognized in Canada.
4. In Re Capon the court justified its approach, in part, on the basis of the reciprocity
principle. That principle, which also operates in respect of foreign divorce decrees, is that the
foreign decision will be recognized if the Canadian court, were it in the same position as the
foreign court, could have taken jurisdiction under its rules. What does the reciprocity prin-
ciple indicate should be the approach to recognizing a foreign nullity decree granted on the
basis of (1) the residence of both parties; (2) the residence of the petitioner; (3) the residence
of the respondent; and (4) the place of celebration of the marriage? How does Gwyn v Mellen
address these issues?
5. As discussed as an alternative basis in Gwyn, under the Indyka principle, a foreign nul-
lity decree can be recognized on the basis of a real and substantial connection between the
foreign jurisdiction and the dispute. This basis is separate from both recognition based on
domicile and recognition based on the reciprocity principle.
6. In Quebec, the guiding principle governing the jurisdiction of foreign courts is that of
reciprocity, provided that the dispute is substantially connected to the foreign country: see
Civil Code of Quebec, art 3164.
B. Defences
Like foreign divorce decrees, a foreign nullity decree will be refused recognition if it was
obtained by fraud: Lepre v Lepre, [1965] P 52 at 63; if it is contrary to public policy: Vervaeke v
Smith, [1983] 1 AC 145 (HL); or if it was obtained in breach of the principles of natural justice:
Lepre v Lepre, above.
In Gray v Formosa, [1963] P 239 (CA), the English Court of Appeal extended the reach of
the natural justice defence, which is traditionally confined to procedural improprieties. A
Maltese decree had annulled an English marriage on the ground that there had been no
religious ceremony in accordance with the husband’s Roman Catholic faith. The English
court held that the decree offended English notions of “substantial justice” and thus refused
to recognize it. This extension is controversial and some subsequent cases have suggested
that it should be confined to its particular facts: see Re Meyer, [1971] P 298.

Kennedy, Gr D. “Recognition of Foreign Divorce and Nullity Decrees” (1957) 35 Can Bar Rev 628.
Latey, William. “Basis of Jurisdiction in Nullity of Marriage” (1962) 78 Law Q Rev 417.
Lysyk, KM. “Jurisdiction and Recognition of Foreign Decrees in Nullity Suits” (1964) 29 Sask
Bar Rev 143.
Pitel, Stephen GA & Nicholas S Rafferty. Conflict of Laws, 2nd ed (Toronto: Irwin Law, 2016)
ch 23.
Rafferty, Nicholas S. “Recognition of Foreign Nullity Decrees” (1981-82) 46 Sask L Rev 73.
Smith, Raymond. “The Recognition of Foreign Nullity Decrees” (1980) 96 Law Q Rev 380.
Butterworths, 2005) (loose-leaf) ch 17.
CHAPTER T WENTY
Children
I. Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961
A. Constitutional Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
1. Division of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962
2. The Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
B. Jurisdiction and Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
1. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963
2. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968
C. Enforcement of Extraprovincial and Foreign Custody Orders . . . . . . . . . . . . . . . . . 968
D. International Child Abduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974
1. Non-Removal Clauses in Final Custody Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . 996
II. Child Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997
III. Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
A. The Hague Convention on Intercountry Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004
IV. Cross-Border Surrogacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013
In the family law context, custody (now commonly known as “parenting”), support, and
adoption are the subjects most closely associated with children. These issues can be imag-
ined in a transborder perspective, the question being how mobility affects status, rights, and
obligations between parents and children. The modern apprehension of children—as the
subjects rather than the objects of rights—and parents—as bearers of responsibilities rather
than powers—has also permeated private international law. The focus on furthering the
“best interests of the child” underlies international instruments relating to children, most of
which emanate from the Hague Conference on Private International Law. Two such conven-
tions, dealing with custody and adoption, are currently in force in Canada and are discussed
below, respectively, in Sections I.D and III.A, after a presentation of custody in the interprov-
incial context.
I. CUSTODY
Peter M North, “Reform, but Not Revolution: Children”

(1990) 220 Rec des Cours 127 at 127-28 and 133-35 (footnotes omitted)
The attitude of the common law to international disputes over children has been very
strongly influenced by the way in which child custody, and similar, disputes should be
961
962 Chapter 20 Children
resolved at the domestic level, and little influenced by general principles of private inter-
national law. It could never be argued that respect for international comity pervaded the
rules. The overriding consideration has been that in determining such issues the para-
mount consideration for the court should be the child’s welfare.
The impact of this can be seen in all three traditional private international law con-
texts—jurisdiction, choice of law and recognition—and only very recently has there been
change, much of it influenced by a political need for international co-operation. …
Concern for the welfare of the child led the English [and Canadian] judges to adopt
broad grounds for jurisdiction. The starting point for determining the inherent jurisdic-
tion of the court was the prerogative power of the Crown to act as parens patriae … . [As
a result] it was not only the child who was a British subject who merited the protection
of the English courts, but also the child who lived in England or, indeed, who was merely
present there.
• • •
Although parts of the common law world have seen significant developments in the
field of jurisdiction over custody disputes, the choice of law position seems unaffected.
The law of the forum is applied … . [O]ne of the policy justifications for the application
of the law of the forum [is] the fact that substantive family law requires the welfare of the
child to be regarded as the paramount consideration. That concern carries over from the
substantive law to influence the choice of law decision. …
The attitude of common law countries to the recognition and enforcement of custody,
guardianship or similar orders made in other jurisdictions reveals a staged development
in which three policy concerns can be identified. The first policy concern is that of the
welfare of the child being paramount … . The second is the concern to deal effectively
with orders made within a federal or multi-law district State; and the third is to respond
on the much broader international scene to the real social problem of child kidnapping
and similar behaviour facilitated by the ease of modern travel, and exacerbated by the
consequential increased likelihood of disputes arising between parties from different
cultures, religions or, indeed, political systems.
A. Constitutional Aspects
1. Division of Powers
Legislative competence over support and custody is exercised by both the federal and prov-
incial governments. In Papp v Papp, [1970] 1 OR 331 (CA), it was held that determinations of
custody were ancillary to divorce and therefore within federal power; this has never been
reconsidered. The Divorce Act, RSC 1985 (2nd Supp), c 3 provides that a custody issue should
be decided in the province with which the children have the closest connection: s 6(1). It is,
therefore, possible for the divorce petition and the custody issue to be heard in two different
places. Nevertheless, a custody claim must be filed with the court hearing the divorce peti-
tion, which then must decide whether a transfer of the custody claim is warranted: see Black
(1992). The wrongful removal of a child to another province cannot establish the closest
connection necessary to justify a transfer: see e.g. Kern v Kern (1989), 19 RFL (3d) 350 (BCSC).
If custody is not determined in the context of divorce proceedings under federal law, all issues
concerning custody and support are governed by provincial legislation. The constitutional
I. Custody 963
validity of this provincial competence was confirmed in Re: BC Family Relations Act, [1982] 1
SCR 62.
2. The Charter
In Young v Young, [1993] 4 SCR 3, the Supreme Court of Canada held that the “best interests
of the child” test used to determine custody and access does not violate the Canadian Char-
ter of Rights and Freedoms (“the Charter”). This suggests that provisions of the Divorce Act and
various provincial family law acts that give precedence to the best interests of the child over
parental rights are not unconstitutional.
On the other hand, there is uncertainty as to whether court orders relating to family law
issues are subject to the Charter. In Young v Young there was no agreement on whether judi-
cial orders resulting from the application of the “best interests of the child” test could be
challenged on Charter grounds. Out of seven judges, three clearly answered in the negative,
two reserved their view, one found it unnecessary to answer because “valid orders under the
‘best interests of the child’ standard cannot violate the Charter,” and the last did not clearly
state a position. The question whether custody orders that restrict the custodial parent’s
mobility rights violate s 6 of the Charter has not been squarely addressed. In Gordon v Goertz,
[1996] 2 SCR 27, the Supreme Court of Canada indicated that the best interest of the child
was the primary consideration, thereby implicitly rejecting any claim to a superior parental
mobility right. This result would no doubt be consonant with the caveat in s 6(3) that mobil-
ity rights are subject to “any laws or practices of general application in force in a province.”
A rule subjecting mobility of custodial parents to the best interests of the child would
appear to fall within the saving proviso of s 6(3). The approach from Gordon v Goertz is now
well established in cases involving relocation of a custodial parent: see e.g. Hejzlar v Mitchell-
Hejzlar, 2011 BCCA 230, and in some legislation: see Family Law Act, SBC 2011, c 25, ss 69-70.
B. Jurisdiction and Choice of Law

1. Jurisdiction
Decisions concerning custody of children can be made under federal law, in the context of
divorce, or under provincial law in all other contexts including divorce where the decree
does not include an order with respect to custody. Jurisdiction to hear motions for custody
was, generally, derived from the common law prerogative powers, otherwise known as
parens patriae jurisdiction, the meaning of which was expressed, as follows, by Lord Cran-
worth LC in Hope v Hope (1854), 4 De G M & G 328, 43 ER 534 at 541 (Ch):
[I]t is in the interest of the State and of the Sovereign that children should be properly brought
up and educated; and according to the principles of our law, the Sovereign, as parens patriae, is
bound to look to the maintenance and education (as far as it has the means of judging) of all his
subjects.
The scope of this inherent jurisdiction was, and remains, quite extensive. Originally, it con-
ferred jurisdiction over children who were domiciled, resident, or present in the territory,
and even those who were citizens though living abroad. Moreover, jurisdiction over a simi-
larly situated custodian could bestow jurisdiction over the child in that person’s custody. The
problems arising from such an approach in a federal state are obvious—the simple act of
bringing a child before a court will potentially give rise to a new examination of custody
regardless of previously rendered decisions in another province. In this area, the recognition
of foreign orders can be determinative of an issue. Issues related to the enforcement of for-
eign custody orders are discussed below.
To narrow the breadth of the parens patriae jurisdiction and thereby reduce the potential
for conflicting orders, statutory bases for jurisdiction have been enacted in several provinces
to deal with transborder cases. These are largely based on the Custody Jurisdiction and
Enforcement Act proposed by the Uniform Law Conference of Canada in 1982. As the Ontario
legislation specifies, the purpose of such legislation is to “recognize that the concurrent
exercise of jurisdiction by judicial tribunals of more than one province … in respect of the
custody of the same child ought to be avoided” and that Ontario courts should decline juris-
diction where “it is more appropriate for the matter to be determined by a tribunal having
jurisdiction in another place with which the child has a closer connection”: see Children’s Law
Reform Act, RSO 1990, c C.12, s 19(b). As a result, the legislation creates a hierarchy of jurisdic-
tional bases, starting with habitual residence: s 22(1)(a), moving to presence with connec-
tions to the province and no pending proceedings elsewhere: s 22(1)(b), and culminating
with a necessity or emergency power in cases where there is a risk of serious harm to the
child: s 23; see also Family Law Act, SBC 2011, c 25, s 74; New Brunswick Family Services Act,
SNB 1980, c F-2.2, s 130. A full discussion of jurisdiction under the Divorce Act and the Ontario
statute is found in Brooks v Brooks (1998), 41 OR (3d) 191, 163 DLR (4th) 715 (CA). Not all prov-
inces have adopted the uniform statute and therefore lack clear jurisdictional rules regard-
ing parent – child relations: see e.g. Family Law Act, SA 2003, c F-4.5, s 23(4)—jurisdiction over
guardianship order if child or proposed guardian lives in Alberta.
When a real and substantial connection to a province will confer jurisdiction, some prov-
incial statutes provide that it cannot be artificially created by wrongfully removing the child
to that province: see Ontario, s 22(3); New Brunswick, s 130.1. Moreover, even if jurisdiction
exists under the relevant provincial statute, a court can decline to exercise it when another
court is better placed to determine the custody matter: Ontario, s 25; British Columbia,
s 74(3); New Brunswick, s 130(5); see e.g. Pitts v De Silva, 2008 ONCA 9, 47 RFL (6th) 43.
Jurisdiction to vary a custody order must be established according to the same criteria as
jurisdiction to make an original order; hence, competence to first award custody does not
survive the departure of the child under normal circumstances. The interaction of these vari-
ous rules is explored in the following case.
Dovigi v Razi
2012 ONCA 361
[The pregnant mother left Ontario for California. The father understood this to be a visit.
The mother gave birth to their child in California with the intent to become a permanent
resident. The father brought an application in Ontario for shared custody. The mother
instituted custody proceedings in California. In Ontario, the motions judge exercised the
court’s parens patriae power to protect the child, assuming jurisdiction over the father’s
application. The mother appealed.]
I. Custody 965
JURIANSZ JA:
[1] This is an appeal from the order of Kiteley J. dated February 21, 2012 assuming
jurisdiction over a father’s application for temporary and permanent shared custody of
his child.
[2] The mother appeals, submitting that Ontario lacks jurisdiction over the custody
of and access to the child and, in the alternative, that Ontario should decline to exercise
jurisdiction and defer to California as the forum conveniens.
[3] The mother and father, who are the biological parents of the child, both resided in
Ontario during the course of their relationship. By November 2011, the parents were no
longer romantically involved. On November 26, 2011, the mother, then some seven months
pregnant, left Ontario for what the father understood was a visit to California. The child
was born on January 14, 2012 in California and the mother is now living there and intends
to become a permanent resident. The child has never been physically present in Ontario.
The motion judge found as a fact that the mother did not form the intention to live in
California until after the child was born, a finding the mother attacks on this appeal.
[4] The motion judge assumed jurisdiction by exercising the court’s parens patriae
power to protect the child. For the reasons that follow, I would allow the appeal.
A. The Motion Judge’s Decision

[5] The motion judge, citing James G. McLeod, Child Custody Law and Practice,
looseleaf (Scarborough, Ont.: Carswell, 2007), 3(3), observed that the two purposes of
jurisdictional requirements are to avoid concurrent jurisdiction and to discourage the
abduction of children. The first consideration does not apply in this case, she said, because
the issue of concurrent jurisdiction arose only when the appellant commenced proceed-
ings in California after being served with the respondent’s application in Ontario. The
second consideration does apply, she said, because “to decline to take jurisdiction in these
circumstances would be to encourage a pregnant mother to depart from the original
jurisdiction in circumstances that are arguably analogous to abduction” (at para. 21).
[6] … Section 22 of the CLRA [Children’s Law Reform Act, RSO 1990, c C.12] defines
when Ontario courts can exercise their jurisdiction to make an order for custody of or
access to a child. The motion judge held that s. 22(1)(b) did not apply because the child
was not physically present in Ontario at the commencement of the application. Section
22(1)(a) requires that the child be “habitually resident in Ontario” at the time of the
application. The circumstances of the child did not fall within the ambit of the definition
of “habitually resident” under s. 22, but, in her view, this constituted a gap in the statute,
since the child appeared to have no habitual residence under the statute. Given the statu-
tory gap, the fact that both parties had a real and substantial connection with Ontario, and
the fact that the mother’s proceedings in California were commenced only after the father’s
application was filed and served in Ontario, the motion judge concluded, at para. 24:
This is a situation in which it is necessary to invoke the parens patriae jurisdiction to deal
with the uncontemplated situation where it is necessary to do so for the protection of the
child who falls within that ambit. I am mindful that California’s laws and procedures are
similar to those of Ontario in that there are jurisdictional requirements, parents have equal
rights, and the best interests of the child is the principle upon which judgments are made.
However, until the [appellant] allegedly changed her mind, the expectation was that [the
child] would be parented in Ontario. There is evidence as to their respective parenting abil-
ities in Ontario. To protect the expectation that [the child] would be parented in Ontario,
this court must take jurisdiction. There is no basis to refrain from exercising jurisdiction
either under s. 19(b) or s. 25 of the CLRA.
• • •
C. Jurisdiction Over Custody Disputes

[9] The CLRA contemplates only four ways in which an Ontario court can exercise
its jurisdiction to make an order for custody of a child.
[10] First, under s. 22(1)(a) of the CLRA, an Ontario court may make an order for
custody of a child where the child is “habitually resident” in Ontario.
[11] Second, under s. 22(1)(b), where the child is not habitually resident in Ontario,
the court may exercise jurisdiction if the child is physically present in Ontario and other
requirements are met.
[12] Third, under s. 23, a court has jurisdiction to make an order for custody where
the child is physically present in Ontario and the court is satisfied that the child would,
on the balance of probabilities, suffer serious harm under certain specified circumstances
set out in the Act.
[13] Fourth, the court may exercise its parens patriae jurisdiction, which is specifically
preserved by s. 69 of the CLRA.
D. Analysis
[14] Of the heads of jurisdiction outlined above, the only two argued to be available
in this case are s. 22(1)(a)—the child is habitually resident in Ontario—and the court’s
parens patriae jurisdiction. I do not accept the respondent’s argument that the child is
“habitually resident” in Ontario because her parents, or at least one of her parents, are so
resident. In essence, counsel advocates a common law approach to “habitual residence”
in determining the court’s jurisdiction. However, it is elementary that a statutory defin-
ition must be applied when interpreting the very term defined. The phrase “a court shall
only exercise its jurisdiction” in s. 22 makes clear that the statute has superceded the
common law.
[15] The motion judge was correct to find that the circumstances of the child in this
case do not fall within the ambit of the statutory definition of “habitual residence.” She
was wrong, though, to conclude from that fact alone that there was a legislative gap. The
fact that circumstances fall outside a definition may be a matter of legislative design rather
than legislative oversight. Discerning the legislative design requires a close consideration
of the legislation.
[16] Section 22(1) limits when the court has jurisdiction to make an order for custody
or of access to a child on the basis that the child is either habitually resident in Ontario
at the commencement of the application for the order or, if not habitually resident, the
child is physically present in Ontario and meets a number of other criteria. Since the child
here was not physically present in Ontario, the focus becomes the child’s place of habitual
residence.
I. Custody 967
[17] To be “habitually resident” in Ontario is defined by s. 22(2) of the Act as follows:

(2) A child is habitually resident in the place where he or she resided,
(a) with both parents;
(b) where the parents are living separate and apart, with one parent under a separa-
tion agreement or with the consent, implied consent or acquiescence of the other or under
a court order; or
(c) with a person other than a parent on a permanent basis for a significant period
of time,
whichever last occurred.
[18] As can be seen, the definition contemplates three possible situations: where the
child is living with both parents, with one parent, or with neither parent. Where the child
is living with one parent the key provision is s. 22(2)(b), which specifies that the statutory
meaning of “habitually resident” differs from the common-law meaning. Even a child
with a stable and settled life in Ontario residing with one parent is not “habitually resi-
dent” here under the statute unless the child’s residence is in accordance with a separation
agreement, consent or a court order.
[19] The possibility that the child is living with one parent outside Ontario as a result
of abduction is specifically addressed by s. 22(3) of the CLRA, which provides that abduc-
tion does not change the “habitual residence” of a child.
[20] That the child is residing with one parent in California without a separation
agreement, consent or a court order no more indicates a gap in the statute than would a
child residing in Ontario with one parent in similar circumstances. I conclude that while
the motion judge was correct that the child does not fall within the ambit of the provisions
of the CLRA, she erred in finding that this results from a legislative gap.
[21] I turn to the motion judge’s reliance on the court’s parens patriae jurisdiction.
The Supreme Court of Canada in E. (Mrs.) v. Eve, [1986] 2 S.C.R. 388, [1986] S.C.J. No. 60
makes it clear, at p. 426 S.C.R., that the court’s parens patriae jurisdiction is “founded on
necessity, namely the need to act for the protection of those who cannot care for them-
selves.” In the circumstances of this case, there was no evidence that it was necessary for
the Ontario court to act for the protection of this child.
[22] First, the California court has taken jurisdiction over issues relating to the child’s
custody, and as the motion judge noted, California’s laws and procedures are similar to
those of Ontario, parents have equal rights, and the best interests of the child is the
principle upon which judgments pertaining to the child are made. This is not to say that
there could be no circumstances under which a child may be in need of this court’s protec-
tion even where the other state has comparable laws. The circumstances of this case,
however, simply do not give rise to any protection concern.
[23] Second, the motion judge erred by taking jurisdiction “[t]o protect the expectation
that [the child] would be parented in Ontario” (at para. 24). In so doing, she assumed the
conclusion of the inquiry into where the best interests of the child lay. Where it is in the best
interests of the child to be parented must be decided by the court with jurisdiction. The
outcome of the inquiry into best interests does not provide a basis for taking jurisdiction.
[The appeal was allowed.]

In the United States, jurisdiction and enforcement in matters of custody were harmonized
throughout the states with the promotion, in 1968, of the Uniform Child Custody Jurisdiction
Act. While it was adopted by all 50 states, varying implementation, conflicting interpreta-
tions, and intervening legislation (including the Hague Convention on the Civil Aspects of
International Child Abduction, reproduced below in Section I.D, “International Child Abduc-
tion”) led to a review of that instrument in 1997, culminating in a new uniform act, repealing
the former, and entitled the Uniform Child-Custody Jurisdiction and Enforcement Act (UCCJEA)
(1997), 9(1A) ULA (1999). Under §201, the UCCJEA reserves exclusive custody jurisdiction to
the child’s home state (defined as involving at least six months’ residence) and, in the
absence of such a state, to a state with significant connection to the child. States may decline
jurisdiction, in which case default jurisdiction may be asserted in another state. These rules
apply even where the “other” state is outside the United States. See Susan L v Steven L, 273
Neb 24 (Sup Ct 2007) for an example involving the courts of British Columbia and Nebraska;
see AL Estin, “Global Child Welfare: The Challenges for Family Law” (2011) 63 Okla LR 691 for
a discussion of the workings of the UCCJEA.
Internationally, there have been some efforts to harmonize jurisdictional rules governing
child custody. The Hague Convention of 1996 on Jurisdiction, Applicable Law, Recognition,
Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protec-
tion of Children includes specific rules governing jurisdiction and recognition in relation to
custody orders. It has so far been ratified by 43 states and has been in force since 2002. Can-
ada has not yet signed the 1996 Hague Convention; the United States signed in 2010, but has
yet to ratify it. In the European Union, similar rules are provided in Council Regulation (EC)
No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement
of judgments in matrimonial matters and the matters of parental responsibility, repealing Regu-
lation (EC) No 1347/2000 (“Brussels II bis”), in force since March 1, 2005.
2. Choice of Law
As in many family law areas, choice of law has never been considered relevant in relation to
custody rules. The law of the forum applies without fail, the justification being that the
interests of the child, given precedence under substantive domestic law, cannot be super-
seded by incompatible foreign rules. Jurisdictional rules, including the discretion to decline
jurisdiction, will often ensure that the lex fori is the appropriate law. In addition, where cus-
tody is decided as an ancillary to divorce, the lex fori rule for divorce is simply carried over:
see Chapter 18.
C. Enforcement of Extraprovincial and Foreign Custody Orders

As mentioned in Chapter 18, extraprovincial enforcement of an order made under the
Divorce Act does not involve rules of private international law since such an order is enforce-
able throughout the country. Orders made under provincial or foreign law, however, are
subject to general conflicts rules governing enforcement of extraprovincial or foreign judg-
ments. In fact, at common law, because custody orders are rarely considered to be “final,” it
is not possible to enforce a foreign custody order; such an order can only be considered by
I. Custody 969
the domestic court as an element to be weighed in the course of a new proceeding to deter-
mine or modify custody. The broad common law jurisdiction to hear applications for custody
despite existing foreign orders can lead to conflicting custody orders with all the hardship
that such a situation entails. Fortunately, legislation exists in all Canadian jurisdictions for the
enforcement of foreign and extraprovincial custody orders: see e.g. New Brunswick, s 130.2;
Ontario, s 41; British Columbia, ss 75-78. Although the specific provisions may differ across
the country, they generally follow similar principles, reflecting the underlying consistency in
substantive rules governing custody in domestic law.
The Ontario legislation was the model for the 1982 Custody Jurisdiction and Enforcement Act
devised by the Uniform Law Conference of Canada. This replaced the earlier 1974 Uniform
Extra-provincial Custody Orders Enforcement Act of the same organization: see the Proceedings
of the Uniform Law Conference for the relevant years, online: ULCC <http://www.ulcc.ca>.
Children’s Law Reform Act

RSO 1990, c C.12
Custody and Access—Extra-Provincial Matters

• • •
41(1) Upon application by any person in whose favour an order for the custody of or
access to a child has been made by an extra-provincial tribunal, a court shall recognize
the order unless the court is satisfied,
(a) that the respondent was not given reasonable notice of the commencement of
the proceeding in which the order was made;
(b) that the respondent was not given an opportunity to be heard by the extra-
provincial tribunal before the order was made;
(c) that the law of the place in which the order was made did not require the extra-
provincial tribunal to have regard for the best interests of the child;
(d) that the order of the extra-provincial tribunal is contrary to public policy in
Ontario; or
(e) that, in accordance with section 22, the extra-provincial tribunal would not
have jurisdiction if it were a court in Ontario.
(2) An order made by an extra-provincial tribunal that is recognized by a court shall
be deemed to be an order of the court and enforceable as such.
(3) A court presented with conflicting orders made by extra-provincial tribunals for
the custody of or access to a child that, but for the conflict, would be recognized and
enforced by the court under subsection (1) shall recognize and enforce the order that
appears to the court to be most in accord with the best interests of the child.
(4) A court that has recognized an extra-provincial order may make such further
orders under this Part as the court considers necessary to give effect to the order.
The more recent provisions in British Columbia specify the conditions for recognition of a
foreign order and for the making of a new order that supersedes it.
Family Law Act

SBC 2011, c 25
Recognition of extraprovincial orders

75(1) A court must recognize an extraprovincial order if all of the following apply:
(a) the extraprovincial tribunal would have had jurisdiction to make the order
under the rules that are applicable in British Columbia;
(b) each party to a proceeding in which the extraprovincial order was made had
(i) reasonable notice that the order would be made, and
(ii) a reasonable opportunity to be heard respecting the order;
(c) the extraprovincial tribunal was required by law to consider the best interests
of the child;
(d) it would not be contrary to public policy in British Columbia to recognize the
order.
(2) On recognition by a court,
(a) an extraprovincial order has the same effect, and may be enforced, as if it were
an order made under section 45 [orders respecting parenting arrangements], 51 [orders
respecting guardianship] or 59 [orders respecting contact], as applicable, and
(b) the court may, if necessary to give effect to the extraprovincial order, make any
order that the court may make under this Act.
(3) If an application is made to recognize more than one extraprovincial order and
the orders conflict, the court must recognize the order that is most consistent with the
best interests of the child.
Superseding extraprovincial orders

76(1) On application, a court may make an order that supersedes an extraprovincial
order that has been recognized under section 75 [recognition of extraprovincial orders] if
satisfied that
(a) the child would suffer serious harm if that child were to
(i) remain with, or be returned to, the child’s guardian, or
(ii) be removed from British Columbia, or
(b) a change in circumstances affects, or is likely to affect, the best interests of the
child and subsection (2) of this section applies.
(2) For the purposes of subsection (1)(b), an order may be made only if
(a) the child is habitually resident in British Columbia when an application is filed,
or
(b) the child is not habitually resident in British Columbia when the application is
filed, but the court is satisfied that
(i) the circumstances described in section 74(2)(b)(i), (ii), (v) and (vi) [deter-
mining whether to act under this Part] apply, and
(ii) the child no longer has a real and substantial connection with the place
where the extraprovincial order was made.
I. Custody 971
The advantage of the British Columbia scheme is that it responds to both jurisdictional ques-
tions when multiple jurisdictions are (potentially) involved and to the effect of any orders
rendered in a foreign jurisdiction, both on the exercise of the court’s jurisdiction and any
substantive decision on the merits.
Note that in several provinces the legislation has done away with the normal procedures
for proving foreign law and now allows judicial notice to be taken of foreign laws and judg-
ments: see e.g. Ontario, s 45.
The following decision highlights the narrow scope of the statutory recognition rules and
illustrates the difficulty of resisting a substantive review of the foreign custody order.
Gillespie v Gillespie
(1992), 10 OR (3d) 641 (CA)
MORDEN ACJO (Carthy and Weiler JJA concurring) (orally):

The primary issue in this appeal is whether the courts in Ontario should recognize
and enforce an order made by the Family Court in New Zealand on June 11, 1992 granting
custody to the appellant of the three children of the marriage between the appellant and
the respondent. The appellant is the father of the children and the respondent is the
mother. The children are six (a daughter) and four (twin boys) years of age.
In broad outline, the facts are as follows. The appellant is an American citizen who has
lived in New Zealand since 1971. He is currently a permanent resident of New Zealand
with employment there as a marine scientist. The respondent is a Canadian citizen who
was a permanent resident of New Zealand until she left the country in April 1992. The
parties were married in New Zealand on October 7, 1985 and they separated on February
24, 1990.
The parties had been involved in extensive litigation in New Zealand respecting their
marriage and the children for over two years before the respondent, without the know-
ledge or consent of the appellant, left the jurisdiction with the children on April 3, 1992.
In March of 1990, after the separation, the respondent filed an application seeking
custody of the children in the Family Court in Nelson, New Zealand. At the same time,
the appellant filed an application for specified access. On April 4, 1990 the court appointed
counsel for the children.
• • •
Judge Pethig ordered that the respondent have custody and the appellant unsupervised
regular weekly access. This went into effect in August 1991 and was increased on consent
to alternate weekends in October 1991.
In January 1992, the respondent gave the appellant 10 days’ notice, through her solici-
tor, that she had accepted a job in Dunedin, New Zealand, as of January 20, 1992 and
would be relocating there with the children on January 17. Dunedin is 800 kilometres
from Nelson. The appellant immediately brought an application in Family Court in Nelson
seeking custody, an order enforcing his access, and an order to restrain the respondent
from moving the children from Nelson.
The respondent did relocate in Dunedin in mid-January 1992. She agreed to two per-
iods of access by the appellant, being five days in March and one week in May 1992. Judge
McAloon in the Family Court in Nelson issued reasons in accordance with this agreement
on January 31. The matter was to come back before the court on February 26, 1992 for
pre-trial and March 19, 1992 for further hearing.
The matter could not proceed on March 19 due to other commitments of the judge.
The respondent had not wished to travel to Nelson, so her evidence was taken in the
Family Court in Dunedin on March 13, 1992. The matter was adjourned to June 11, 1992.
In early April, the appellant sent Easter cards to the children in Dunedin. These were
returned to him in late April marked “Gone No Address.” The appellant immediately
asked his solicitors to investigate. On April 22, 1992 they were advised by the respondent’s
solicitors that the respondent had left her job in Dunedin two weeks earlier and had left
no forwarding address.
The appellant immediately obtained a warrant from Judge McAloon on April 23, 1992
to obtain police assistance to prevent the removal of the children from New Zealand. He
subsequently learned, in May, that the respondent had left New Zealand with the three
children on April 3, travelling to Canada via Hawaii. He assumed that she would go to
Prescott, Ontario, where her parents live. This, in fact, proved to be the case. …
On June 11, 1992 the appellant’s application for custody was heard in New Zealand
before Judge McAloon. He noted that the application had been commenced in January
1992, and that the respondent had filed a defence. The respondent’s solicitor attended at
this hearing but, as she had no instructions, she was permitted to withdraw. Judge
McAloon heard oral evidence from the appellant and had the previous transcript of the
evidence of the respondent available to him, as well as “the contents of two substantial
files maintained by this Court in respect of these parties and these children.”
In his reasons, Judge McAloon said:
I would note that the court abhors this unilateral action by the respondent and notes that it
is undertaken with a view to denying access from father to children and from children to
father. If this was a matter which only affected Mr. Gillespie, the situation would be bad
enough, but the situation is aggravated considerably by this unilateral action of the respond-
ent being sufficient to deny the children their basic right, namely, access to and continuing
knowledge of their father. The court, as I said, will not tolerate behaviour of this type and
will not be prepared to see the law flouted by the unilateral action of one of the parties to
litigation and I come to the firm conclusion that in an effort to restore the rights of access to
the children, the court is more than entitled to examine the custody question de novo.
In examining the custody issue, the judge indicated that he was fully aware of the long
history of the matter. He referred to the rights of the children to see their father, to grow
up in a familiar environment, and to be in a stable situation. He found the respondent
had created a background of obstruction, non co-operation and denigration of the appel-
lant, against which the welfare of the children had to be considered. He made an order
granting custody of the three children to the appellant, reserving access to the respondent
to be exercised in New Zealand.
In the appellant’s notice of application in the Ontario Court (General Division), issued
on June 12, 1992, he sought an order that the respondent forthwith return the children
to Nelson, New Zealand, and other relief. The affidavit, which was served with the notice
of application, was sworn on June 3, 1992 and did not, for this reason, refer to the custody
order that was subsequently made on June 11. It was placed before the court in an affidavit
I. Custody 973
sworn by the appellant on June 24, 1992 and at the outset of the hearing it was said that
the appellant sought to enforce it.
The application was heard by MacLeod J on July 6, 1992 and she gave her decision on
July 10. In this decision she ordered that the respondent have permanent custody of the
children and that the Official Guardian represent the children, make an investigation
under the Courts of Justice Act, RSO 1990, c. C.43, and make a recommendation to the
court as to what, if any, access should be granted to the appellant. She also made detailed
provision with respect to interim access by the appellant. …
[In relation to the New Zealand order, MacLeod J made the following remark:]
I do not place any weight on a custody order which Mr. Gillespie obtained after the departure
of Mrs. Gillespie. The reason for that is: (1) it was not a determination on the merits; (2) it
was made, in my view, as a punishment to Mrs. Gillespie for removing the children; and
(3) the order did not reflect the best interests of the children. In my view, that order was, in
essence, an ex parte order, and does not deal with the true conflicting issues that remain
between the parties.
[The Court of Appeal then noted the provisions of the Children’s Law Reform Act most
material to the proceedings, including ss 22 and 40 to 43.]
The appellant’s major submissions are (1) that the learned judge of first instance erred
in not addressing the jurisdiction conferred on her under s. 41 of the Act to recognize
the June 11, 1992 order and in not making an order under this section or, alternatively,
(2) if she was entitled to consider the custody of the children on the merits, she came to
the wrong conclusion.
We think that it is necessary to consider the first submission only. MacLeod J made
no reference to any of the statutory provisions to which we have referred. We think that
she should have first addressed the power conferred on her by s. 41 to recognize and give
effect to the New Zealand order.
In our respectful view, on the facts of this case, the order should have been recognized.
We are satisfied that none of the clauses (a) to (e) in s. 41(1) are applicable to stand in the
way of recognition of the order. …
The only basis on which the respondent challenges the applicability of s. 41 is that
provided for in s. 41(1)(b)—that she was not given an opportunity to be heard by the New
Zealand court before the order was made … . On the facts, the respondent deliberately
chose not to avail herself of the opportunity to be personally present at the hearing.
Apart from submitting that s. 41(1)(b) was applicable, the only other ground for
opposing the enforcement of the New Zealand order was the respondent’s submission
that there had been “a material change in circumstances” within the meaning of this
expression in s. 42(1) … . The material change relied upon is the relocation of the children
from New Zealand to Ontario and the consequences of this move. With respect, in the
circumstances of a case such as this, if the mere fact of a relocation in the face of proceed-
ings in existence in the jurisdiction which were commenced when the children were
habitually resident in that jurisdiction, is regarded as a material change of circumstances,
this would defeat one of the principal objects of s. 41. We do not think there was any such
change in this case. …
It appears that MacLeod J did not recognize the New Zealand order because she did
not agree with it. With respect, this approach is not in accordance with the statutory
requirements. In any event, we do not agree that this order was not a determination on
the merits and, while the New Zealand court abhorred the unilateral action taken by the
respondent, the decision was based on a “primary regard to the welfare of the children.”
We note that there was before the New Zealand court substantially more evidence respect-
ing the marriage, the history of the proceedings, the children, and the children’s relation-
ship to their parents, than there was before MacLeod J.
For the foregoing reasons, the appeal is allowed, the order of MacLeod J is set aside,
and in its place there will be an order recognizing the New Zealand order and directing
that the children be returned to Nelson, New Zealand, within four weeks from this date
(November 12, 1992).
NOTE
In Miller v Miller (1999), 1 RFL (5th) 391 (Ont CA), the Ontario Court of Appeal was faced with
conflicting custody determinations, the first one rendered by an Ontario court and the later
one by a New York court. In considering the impact of Gillespie, the Court of Appeal held that
the application of s 41(1) of the Ontario Act “presupposes that there is no domestic order to
the contrary” (at 394). As a result, it refused to recognize the New York order. The facts also
revealed that the father had forcibly removed the children from the mother’s home, claiming
to have custody under the New York order. It is precisely the dramatic increase in such self-
help measures that prompted the elaboration of an international convention on child
abduction.
D. International Child Abduction

See generally Beaumont & McEleavy.
The Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduc-
tion was adopted to prevent abuse of jurisdictional rules for custody claims that flow from
the presence of a child within a particular jurisdiction. The objective of the Convention is to
remove the jurisdictional advantages potentially arising from the unilateral creation of links
to a territory for the purpose of gaining or modifying rights of custody over children. At the
time the Convention was negotiated, there was no consensus on appropriate jurisdictional
rules for custody matters. As a result, the member states chose instead to develop a rather
straightforward mechanism for the automatic return of a child wrongfully removed to the
place of that child’s habitual residence prior to the wrongful removal. Without defining the
jurisdictional rules for any country, the Convention nevertheless implicitly endorses the view
that the courts of a child’s habitual residence are presumed to be a forum conveniens for
addressing questions relating to the child and his or her parents. By removing the main
incentive for unilateral removal of children, the Convention is attacking one of the root
causes of international child abduction.
This Convention has been the most successful Hague convention ever put forward by
that institution, garnering 93 ratifications as of December 2015. It has spawned a vast case
I. Custody 975
law, available through a dedicated database, International Child Abduction Database

(INCADAT), and literature—all available through the Hague Conference on Private Inter-
national Law, online: HCCH <http://www.hcch.net>.
Canada was one of the four original signatories of the Convention, the main provisions of
which are set out below.
Convention on the Civil Aspects of International Child Abduction

Hague Conference on Private International Law (25 October 1980)
The States signatory to the present Convention,

Firmly convinced that the interests of children are of paramount importance in matters
relating to their custody,
Desiring to protect children internationally from the harmful effects of their wrongful
removal or retention and to establish procedures to ensure their prompt return to the
State of their habitual residence, as well as to secure protection for rights of access,
Have resolved to conclude a Convention to this effect and have agreed upon the fol-
lowing provisions:
Chapter I—Scope of the Convention

Article 1
The objects of the present Convention are:
(a) to secure the prompt return of children wrongfully removed to or retained in any
Contracting State; and
(b) to ensure that rights of custody and of access under the law of one Contracting
State are effectively respected in the other Contracting States.
Article 2
Contracting States shall take all appropriate measures to secure within their territories
the implementation of the objects of the Convention. For this purpose they shall use the
most expeditious procedures available.
Article 3
The removal or the retention of a child is to be considered wrongful where:
(a) it is in breach of rights of custody attributed to a person, an institution or any other
body, either jointly or alone, under the law of the State in which the child was habitually
resident immediately before the removal or retention; and
(b) at the time of removal or retention those rights were actually exercised, either
jointly or alone, or would have been so exercised but for the removal or retention.
The rights of custody mentioned in sub-paragraph (a) above, may arise in particular
by operation of law or by reason of a judicial or administrative decision, or by reason of
an agreement having legal effect under the law of that State.
Article 4
The Convention shall apply to any child who was habitually resident in a Contracting
State immediately before any breach of custody or access rights. The Convention shall
cease to apply when the child attains the age of 16 years.
Article 5
For the purposes of this Convention:
(a) “rights of custody” shall include rights relating to the care of the person of the
child and, in particular, the right to determine the child’s place of residence;
(b) “rights of access” shall include the right to take a child for a limited period of time
to a place other than the child’s habitual residence.
Chapter II—Central Authorities

Article 6
A Contracting State shall designate a Central Authority to discharge the duties which are
imposed by the Convention upon such authorities.
Federal States, States with more than one system of law or States having autonomous
territorial organizations shall be free to appoint more than one Central Authority and to
specify the territorial extent of their powers. Where a State has appointed more than one
Central Authority, it shall designate the Central Authority to which applications may be
addressed for transmission to the appropriate Central Authority within that State.
Article 7
Central Authorities shall co-operate with each other and promote co-operation amongst
the competent authorities in their respective States to secure the prompt return of children
and to achieve the other objects of this Convention.
In particular, either directly or through any intermediary, they shall take all appropriate
measures:
(a) to discover the whereabouts of a child who has been wrongfully removed or
retained;
(b) to prevent further harm to the child or prejudice to interested parties by taking
or causing to be taken provisional measures;
(c) to secure the voluntary return of the child or to bring about an amicable resolution
of the issues;
(d) to exchange, where desirable, information relating to the social background of the
child;
(e) to provide information of a general character as to the law of their State in con-
nection with the application of the Convention;
(f) to initiate or facilitate the institution of judicial or administrative proceedings with
a view to obtaining the return of the child and, in a proper case, to make arrangements
for organizing or securing the effective exercise of rights of access;
(g) where the circumstances so require, to provide or facilitate the provision of legal
aid and advice, including the participation of legal counsel and advisers;
I. Custody 977
(h) to provide such administrative arrangements as may be necessary and appropriate

to secure the safe return of the child;
(i) to keep each other informed with respect to the operation of this Convention and,
as far as possible, to eliminate any obstacles to its application.
Chapter III—Return of Children

Article 8
Any person, institution or other body claiming that a child has been removed or retained
in breach of custody rights may apply either to the Central Authority of the child’s habitual
residence or to the Central Authority of any other Contracting State for assistance in
securing the return of the child.
• • •
Article 12
Where a child has been wrongfully removed or retained in terms of Article 3 and, at the
date of commencement of the proceedings before the judicial or administrative authority
of the Contracting State where the child is, a period of less than one year has elapsed from
the date of the wrongful removal or retention, the authority concerned shall order the
return of the child forthwith.
The judicial or administrative authority, even where the proceedings have been com-
menced after the expiration of the period of one year referred to in the preceding para-
graph, shall also order the return of the child, unless it is demonstrated that the child is
now settled in its new environment.
Where the judicial or administrative authority in the requested State has reason to
believe that the child has been taken to another State, it may stay the proceedings or dis-
miss the application for the return of the child.
Article 13
Notwithstanding the provisions of the preceding Article, the judicial or administrative
authority of the requested State is not bound to order the return of the child if the person,
institution or other body which opposes its return establishes that:
(a) the person, institution or other body having the care of the person of the child was
not actually exercising the custody rights at the time of removal or retention, or had
consented to or subsequently acquiesced in the removal or retention; or
(b) there is a grave risk that his or her return would expose the child to physical or
psychological harm or otherwise place the child in an intolerable situation.
The judicial or administrative authority may also refuse to order the return of the child
if it finds that the child objects to being returned and has attained an age and degree of
maturity at which it is appropriate to take account of its views.
In considering the circumstances referred to in this Article, the judicial and adminis-
trative authorities shall take into account the information relating to the social background
of the child provided by the Central Authority or other competent authority of the child’s
habitual residence.
• • •
Article 16
After receiving notice of a wrongful removal or retention of a child in the sense of Arti-
cle 3, the judicial or administrative authorities of the Contracting State to which the child
has been removed or in which it has been retained shall not decide on the merits of rights
of custody until it has been determined that the child is not to be returned under this
Convention or unless an application under this Convention is not lodged within a rea-
sonable time following receipt of the notice.
Article 17
The sole fact that a decision relating to custody has been given in or is entitled to recogni-
tion in the requested State shall not be a ground for refusing to return a child under this
Convention, but the judicial or administrative authorities of the requested State may take
account of the reasons for that decision in applying this Convention.
Canada is a party to the Convention (Can TS 1983 No 35), which has been implemented in all
of the provinces: see generally Bailey. However, because custody is primarily within provin-
cial jurisdiction—that is, outside the divorce context—the Convention has been enacted by
way of provincial legislation. Unfortunately, the implementation has not been uniform; some
provinces have chosen to incorporate the Convention within existing custody legislation,
while others have enacted a separate statute: cf Children’s Law Reform Act, RSO 1990, c C.12,
s 46; Custody Jurisdiction and Enforcement Act, RSPEI 1988, c C-33, s 28; Children’s Law Act, RSNL
1990, c C-13, s 54; Child Custody Enforcement Act, CCSM c C360, s 17; and Family Law Act, SBC
2011, c 25, s 80 with International Child Abduction Act, SNB 1982, c I-12.1; Child Abduction Act,
RSNS 1989, c 67; Loi sur les aspects civils de l’enlèvement international et interprovincial
d’enfants, CQLR c A-23.01; and International Child Abduction Act, SS 1996, c I-10.11 and RSA
2000, c I-4. In some cases conflicts between domestic and international rules were resolved
by way of a paramountcy clause, whereas others remain silent. This diversity has been the
cause of disharmony across the provinces in terms of the interpretation and application of
the Convention: see Black (1993). This situation divided the Supreme Court of Canada in its
very first decision involving the Convention.
Thomson v Thomson
[1994] 3 SCR 551
LA FOREST J:
This appeal raises for the first time in this court the interpretation and application of
the Hague Convention on the Civil Aspects of International Child Abduction, Can. TS 1983
No. 35, to which Canada is a party. The underlying purpose of the Convention, as set
forth in its preamble, is to protect children from the harmful effects of their wrongful
removal or retention and to establish procedures to ensure their prompt return to the
state of their habitual residence.
The case arises in a context where a baby boy born in Scotland of Scottish parents was
taken by his mother to Canada in December 1992 to visit her parents in Manitoba. Once
I. Custody 979
there, she decided to stay permanently. At the time of the removal of the child, she had
been granted interim custody of the child following the breakdown of her marriage; the
father had, however, been granted interim access, and the court order contained a prohibi-
tion against the child being taken out of Scotland. The principal question is whether the
child should be returned to Scotland under the terms of the Convention or under other
provisions of the Act implementing the Convention in Manitoba, the Child Custody
Enforcement Act, RSM 1987, c. C360.
• • •
The husband’s application for the return of the child was heard by Davidson J of the
Manitoba Court of Queen’s Bench both under the terms of the Convention and under
provisions in its implementing Act, the Child Custody Enforcement Act of Manitoba.
At the outset, Davidson J stated that she was prepared to recognize the orders of the
Scottish courts and dealt with the objections raised to them in the following manner.
Whether or not the appellant knew of the non-removal clause in the interim order of
November 27, 1992, Mrs. Thomson did know of the access provisions contained in that
order and chose to ignore them. In addition, Davidson J found that Mrs. Thomson was
wilfully blind to the proceedings she had instituted in Scotland, and that she failed to
return the child once she became aware of the contents of the orders of the Scottish court
of November 27, 1992 [by which the mother was awarded interim custody] and Febru-
ary 3, 1993 [by which the father was granted an order of custody; this order was known
as a “chasing order”].
• • •
Davidson J then dealt with the appellant’s contention that the child was not wrongfully
removed within the meaning of Article 3 of the Convention. …
Davidson J held that the appellant’s custody right was a restricted one, which took
away her right to determine the child’s place of residence. Hence, by removing Matthew,
Mrs. Thomson had breached a term of her right of custody, and thus his removal was
wrongful within the terms of the Convention. The removal being wrongful, the subsequent
retention was also wrongful. …
On this basis, Davidson J ordered the return of the child to Scotland. She then went on
to consider the terms and conditions of the return that could be dictated by a Manitoba
court under s. 6(c) of the Child Custody Enforcement Act. In her view, that provision allowed
her to make such interim custody order as would be in the best interests of the child. While
on the evidence before her she believed it would, in the long-term, be in Matthew’s best
interests to remain in the custody of his mother, the issue was for the Scottish courts to
determine. She thought, however, that on an interim basis it was clearly in the best interests
of the child that he not be abruptly removed from his mother’s care. On that basis, she
ordered that interim custody of the child be granted to Mrs. Thomson, but that the child
was to be returned to the jurisdiction in Scotland where the order was made. To ensure
that Mrs. Thomson proceeded expeditiously to have matters resolved in Scotland, David-
son J further ordered that her interim custody order would expire in four months. …
On the appeal to the Court of Appeal [(1993), 88 Man R (2d) 204], Twaddle JA, for
the majority, … held that while the wife might well be technically right in her contention
that the child was not wrongfully removed, since she alone was the custodial parent, the
point was somewhat academic since the child was clearly wrongly retained in Manitoba
once the custody order in favour of the father was made.
• • •
Twaddle JA continued that although the guiding principle in all matters dealing with
the custody of a child is that the adjudicating court must make the order which is in the
best interests of the child, the parties to the Convention have agreed that the concurrent
exercise of custody jurisdiction is not in the best interests of a child (pp. 209-10). As
regards judicial comity, he held that if the Convention is fully applicable, the court in the
requested state must accept the other court’s order as having been made in accordance
with the guiding principle. That court, he added, must also accept that the child’s future
welfare will be safeguarded by the court in its home jurisdiction.
Finally, Twaddle JA found that the remedies available under s. 6 of the Act give more
flexibility than the requirement in Article 12 of the Convention, which requires that the
child be returned “forthwith.” He noted that, although the Scottish court purported to
have given a “final” order, from which the appellant’s appeal was dismissed, the case had
never been heard on its merits, and it was probable that the Scottish court would wish to
do this. However, he doubted that this event would transpire until the appellant returned
the child to Scotland. Thus he ordered the return of the child forthwith, and chided
Davidson J for having given an order “worded in such a way as to suggest that it is intended
to have continued effect after the child’s return to the foreign jurisdiction” (p. 212).
• • •
The Appeal to This Court

The appellant sought and was granted leave to appeal to this court. The leave application
and the hearing of the appeal were both heard on an expedited basis, and judgment was
rendered immediately after the hearing dismissing the appeal subject to undertakings
made by the respondent to which I shall later refer. That judgment was given with reasons
to follow. These are the reasons.
The case raises a number of broad issues regarding the purpose, application and inter-
pretation of the Convention and its interrelationship with the Act implementing it in
Manitoba. It also raises several more specific issues, relating to:
(1) the nature of the custody required by the Convention and whether there was
custody sufficient to trigger the operation of the Convention in this case;
(2) whether the child had been wrongfully removed from Scotland or wrongfully
retained in Manitoba so as to bring the case within the operation of the Convention;
(3) whether the return of the child would cause harm to the child sufficient within
the terms of the Convention or the Act to warrant refusal to return him; and
(4) the power of a court to which the application for return is made to accord remedies
to ameliorate difficulties the child might incur from the return.
I shall begin with the general issues concerning the Convention, then deal with the
particular issues before returning to the interrelationship between the Convention and
the Act.
Background to the Hague Convention

By the mid-1970s, the problem of international parental child abduction had reached
such proportions that the Commonwealth Law Ministers described it as being of
I. Custody 981
“immense social importance and requiring concrete early action” (Hague Conference on
Private International Law, Actes et documents de la Quatorzième session, t. III, Child
Abduction (1982) (hereinafter “Actes et documents”), at p. 15, n. 6). At a meeting of a
Special Commission of the Hague Conference on Private International Law held in Janu-
ary 1976, the Expert of Canada proposed that the Hague Conference undertake the
preparation of an international treaty dealing with the problem of the abduction of
children by one of their parents. The proposal was received with interest, and the Hague
Conference Secretariat proceeded with a study of the legal and social aspects of the
problem. A 1978 international study conducted by the Permanent Bureau of the Hague
Conference on Private International Law was informed of the following reported cases
of abductions: Australia (10), Belgium (15), Denmark (8), France (75); the scale of the
problem in the United Kingdom was indicated by the fact that in a 12-month period the
Home Office was asked to take precautions in airports and ports in 691 cases involving
69 different countries; see A.E. Anton, “The Hague Convention on International Child
Abduction” (1981), 30 Int’l & Comp. LQ 537. Though, as Anton has pointed out, these
numbers were relatively small, the risk of harm to the child and the certainty of distress
to the parents made it imperative that governments coordinate their efforts to prevent
this evil. At all events, the numbers showed signs of increasing. For example, between
1982 and 1984 (the United States did not implement the treaty until 1988), the number
of American citizens seeking the return of abducted children from abroad doubled, and
in 1986 there were 276 reported cases of parental child abduction in the United States;
see C.S. Helzick, “Returning United States Children Abducted to Foreign Countries: The
Need to Implement the Hague Convention on the Civil Aspects of International Child
Abduction” (1987), 5 Boston U Int’l LJ 119.
In March 1979 the Conference convened a Special Commission to examine the matter
and to consider possible solutions. At a further meeting of the Special Commission in
November 1979 a preliminary draft Convention was prepared which formed the basis for
discussion at the Fourteenth Session of the Hague Conference in October 1980.
At that session representatives of 28 states prepared a draft Convention on the Civil
Aspects of International Child Abduction which the Conference adopted by a unanimous
vote on October 24, 1980. The Convention was immediately made available for signature
by states, and Canada was one of four states to sign it on October 25, 1980. Scotland
implemented the Convention in 1986.
In Canada, effect was given to the Convention by provincial statutes. Manitoba, we
saw, made it part of its law by virtue of s. 17 of its Child Custody Enforcement Act which
contains other provisions for the enforcement of extra-provincial orders. I shall refrain
here from discussing the interrelation between the provisions of the Convention and the
Act, but before getting into the specific issues raised by the parties, it is useful to make a
few general remarks about the interpretation of international treaties and conventions
adopted in domestic legislation.
Structure and Interpretation

By and large, international treaties are interpreted in a manner similar to statutes. This is
evident from a perusal of Article 31 of the Vienna Convention on the Law of Treaties, Can.
TS 1980 No. 37, which reads:
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition
to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in
connexion with the conclusion of the treaty.
There is a significant difference, however, in the use that may be made of the legislative
history and other preparatory material. Article 32 provides that such material can be used
to confirm the meaning found under Article 31, or to resolve an ambiguity or obscurity
or avoid a result that is manifestly absurd or unreasonable. It reads:
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory
work of the treaty and the circumstances of its conclusion, in order to confirm the meaning
resulting from the application of article 31, or to determine the meaning when the interpret-
ation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.
It would be odd if in construing an international treaty to which the legislature has

attempted to give effect, the treaty were not interpreted in the manner in which the state
parties to the treaty must have intended. Not surprisingly, then, the parties made frequent
references to this supplementary means of interpreting the Convention, and I shall also
do so. I note that this court has recently taken this approach to the interpretation of an
international treaty in Canada (Attorney General) v. Ward, [1993] 2 SCR 689.
The travaux préparatoires to the Hague Convention are found in the Hague Conference
on Private International Law Actes et documents, supra. Also of interest is the article by
Anton, chair of the Special Commission, “The Hague Convention on International Child
Abduction,” supra.
I now turn to a closer examination of the purpose of the Convention. The preamble of
the Convention thus states the underlying goal that document is intended to serve: “[T]he
interests of children are of paramount importance in matters relating to their custody.”
In view of Helper JA’s remarks [as part of her dissenting judgment in the Manitoba Court
of Appeal] on this matter, however, I should immediately point out that this should not
be interpreted as giving a court seized with the issue of whether a child should be returned
to the jurisdiction to consider the best interests of the child in the manner the court would
do at a custody hearing. This part of the preamble speaks of the “interests of children”
generally, not the interest of the particular child before the court. This view gains support
from Article 16, which states that the courts of the requested state shall not decide on the
merits of custody until they have determined that a child is not to be sent back under the
Convention. I would also draw attention to the fact that the preamble goes on to indicate
the manner in which its goal is to be advanced under the Convention by saying:
I. Custody 983
Desiring to protect children internationally from the harmful effects of their wrongful
removal or retention and to establish procedures to ensure their prompt return to the State
of their habitual residence, as well as to secure protection for rights of access. …
The foregoing is entirely consistent with the objects of the Convention as set out in its
first Article. Article 1 sets out two objects: (a) securing the return of children wrongfully
removed to or retained in any contracting state; and (b) ensuring that the rights of custody
and access under the law of one contracting state are effectively respected in other con-
tracting states. Anton, supra, at pp. 542-43, indicates that prompt return was intended to
be predominant:
The Special Commission also considered—and, until recently, this would have been an
equally novel proposition for judges in common law countries—that the courts of the State
addressed should order the return of the child, subject to certain limited exceptions, despite
the possibility that further inquiries might disclose that the child’s welfare would be better
secured by its remaining in that State. … [T]he primary purpose of the Convention [is],
namely, as Article 1(a) states, to secure the prompt return of children wrongfully removed
to or retained in any Contracting State. The Commission started from the assumption that
the abduction of a child will generally be prejudicial to its welfare. It followed that, when a
child has been abducted from one country to another, international mechanisms should be
available to secure its return either voluntarily or through court proceedings.
It is clear from the wording of the preamble and Article 3 of the Convention, cited
supra, and from the travaux préparatoires that the primary object of the Convention is
the enforcement of custody rights. Article 3 provides that the removal or retention of a
child is to be considered wrongful where “it is in breach of rights of custody attributed to
a person, an institution or any other body, either jointly or alone, under the law of the
State in which the child was habitually resident immediately before the removal or reten-
tion.” Such rights of custody are given effect through proceedings for the return of the
child under Article 12.
By contrast, the Convention leaves the enforcement of access rights to the adminis-
trative channels of Central Authorities designated by the state parties to the Convention.
The duties of these central authorities, set forth in Article 21, are, unlike situations involv-
ing custody rights, not to return the child forthwith, but rather to cooperate “to promote
the peaceful enjoyment of access rights and the fulfilment of any conditions to which the
exercise of those rights may be subject,” including the initiation of or assistance “in the
institution of proceedings with a view to organizing or protecting these rights and secur-
ing respect for the conditions to which the exercise of these rights may be subject.”
Custody
Custody, as understood by the Convention, is a broad term that covers the many situations
where a person lawfully has the care and control of a child. The breach of rights of custody
described in Article 3, it will be remembered, are those attributed to a person, an institu-
tion or any other body by the law of the state where the child was habitually resident
immediately before the removal or retention. Article 3 goes on to say that custody may
arise by operation of law. The most obvious case is the situation of parents exercising the
ordinary care and control over their child. It does not require any formal order or other
legal document, although custody may also arise by reason of a judicial or administrative
decision, or by agreement.
[La Forest J went on to consider some of the preparatory work.]
It by no means follows, however, that the Convention applies to every case where a
child is removed from one country to another where a court order prohibits it. From the
emphasis placed in the Convention and the preparatory work on the enforcement of
custody, as distinguished from mere access, the proper view would appear to be that the
mandatory return dictated by the Convention is limited to cases where the removal is in
violation of the custody rights of a person, institution or other body. That is the view
adopted by Anton, supra, at pp. 546 and 554-55, who stated:
It is clear also from the definitions of custody and access in Article 5 that the removal or
retention of a child in breach merely of access rights would not be a wrongful removal or
retention in the sense of Article 3.
• • •
The Convention contains no mandatory provisions for the support of access rights com-
parable with those of its provisions which protect breaches of rights of custody. This applies
even in the extreme case where a child is taken to another country by the parent with custody
rights and is so taken deliberately with a view to render the further enjoyment of access rights
impossible.
Anton’s view gains support from the fact that the other four types of situations identi-
fied in the Dyer Report’s [Preliminary Document No 1, “Questionnaire and Report on
international child abduction by one parent”] survey as constituting “child abduction”
are all of a kind where the custodial parent is deprived of her or his right of custody.
In my view, that is the correct approach and, accordingly, I propose to deal with the
issue of whether there was a wrongful removal of Matthew on this basis.
Wrongful Removal
Before turning to the issue of whether there was an infringement of custody rights war-
ranting the return of Matthew under the Convention, I would like to dispose briefly of
two issues that were raised in the courts below.
The first of these concerns the possibility that the appellant did not know she was
violating the Scottish court’s order. In my view, this is irrelevant. Nothing in the nature
of mens rea is required; the Convention is not aimed at attaching blame to the parties. It
is simply intended to prevent the abduction of children from one country to another in
the interests of children. If the removal of the child was wrongful in that sense, it does
not matter what the appellant’s view of the situation was.
The second preliminary issue relates to the dispute regarding whether Matthew’s resi-
dence was in Scotland or in Manitoba at the relevant time. On the facts of this case, I
agree with the courts below that this issue is also without substance.
I turn then to the issue of whether there was a removal of Matthew from Scotland
constituting a breach of custody rights there. The appellant argued that Matthew’s removal
cannot be considered wrongful under the Convention because the appellant had interim
I. Custody 985
custody. For the respondent, reference was made to the letter of the central authority in
Scotland that a parent had custody of a child until a court ordered otherwise. The diffi-
culty, however, is that before Matthew’s removal from Scotland, there was a court order
awarding interim custody to his mother, leaving the respondent father with a mere right
of access. Under these circumstances, the court must determine what the law is as best it
can by reference to relevant decisions.
Three approaches have been taken in the case law. Common to all three is that the
courts have shown a strong disposition to give effect to the spirit of the Convention. The
first is to the effect that a removal in breach of a non-removal clause is contrary to the
terms of the Convention because such a removal is in breach of the custodial parent’s own
right of custody.
[La Forest J considered cases in which this approach was adopted.]
I confess to having some discomfort with this approach. By providing that “at the time
of removal or retention those rights [of custody] were actually exercised, either jointly or
alone, or would have been so exercised but for the removal or retention,” Article 3 would
seem to imply that the rights breached must have belonged to someone other than the
breaching party. That reading is confirmed by the structure of the Convention as well as
by the comments of those engaged in the drafting of the Convention, from which it
appears that primary protection to custody rather than access was intended. …
The second and third approaches mentioned hold that “the right to determine the
child’s place of residence” is a custody right divisible from the right to care for the person
of the child, and by virtue of a non-removal clause, this right vests in either the access
parent (the second approach), or the court (the third approach). These approaches gain
support from the open-ended wording of Article 5: “ ‘rights of custody’ shall include rights
relating to the care of the person of the child and, in particular, the right to determine the
child’s place of residence” (emphasis added).
[La Forest J reviewed English cases adopting one or the other of these two approaches.]
It seems to me that when a court has before it the issue of who shall be accorded custody
of a child, and awards interim custody to one of the parents in the course of dealing with
that issue, it has rights relating to the care and control of the child and, in particular, the
right to determine the child’s place of residence. It has long been established that a court
may be a body or institution capable of caring for the person of a child. As I explained in
E (Mrs.) v. Eve, [1986] 2 SCR 388, the Court of Chancery has long exercised wardship
over children in need of protection in the exercise of its parens patriae jurisdiction. But
I see no need to rely on jurisdiction emanating from this doctrine, which has understand-
ably “puzzled and concerned” other Contracting Parties; wardship, as we know it, does
not apparently exist in Scotland; see Nigel Lowe and Michael Nicholls, “Child Abduction:
The Wardship Jurisdiction and the Hague Convention,” [1994] Fam. Law 191, at p. 191.
This court heard no evidence on the legal effect under Scottish law of the insertion of
the non-removal clause in the interim custody order granted to Mrs. Thomson on Nov-
ember 27, 1992. Therefore we must interpret the clause without aid, from general prin-
ciples and by analogy to Canadian law. Under Canadian law, a non-removal clause may
be placed in an interim order of custody to preserve the court’s jurisdiction to make a

final determination of custody. It seems to me that when a court is vested with jurisdiction
to determine who shall have custody of a child, it is while in the course of exercising that
jurisdiction, exercising rights of custody within the broad meaning of the term contem-
plated by the Convention. In the words of Article 3(b), “at the time of removal or retention
those rights were actually exercised, either jointly or alone, or would have been so exer-
cised but for the removal or retention.” As noted earlier, the travaux préparatoires envision
this situation.
All of this seems particularly appropriate in the case at bar. The non-removal clause
here reads simply: “Of new Grants interim interdict quoad crave 2 ad interim against the
Defender from removing the said Matthew Paul Thomson furth of Scotland” (emphasis
in original). Given the underscoring twice of the word “interim,” it seems clear that the
non-removal clause was inserted into the custody order of November 27, 1992 to preserve
jurisdiction in the Scottish court to decide the issue of custody on its merits in a full hearing
at a later date. Thus the Scottish court became “an institution or any other body, either jointly
or alone, under the law of the State in which the child was habitually resident immediately
before the removal or retention” having custody rights within the meaning of Article 3.
The preservation of the access rights of the respondent would be merely a corollary effect
of the clause. The appellant’s removal of Matthew therefore constituted a breach of the
custody right of the Scottish court within the meaning of Article 3 of the Convention.
Article 12 of the Convention, therefore, charges this court to order his return “forthwith.”
It will be observed that I have underlined the purely interim nature of the mother’s
custody in the present case. I would not wish to be understood as saying the approach
should be the same in a situation where a court inserts a non-removal clause in a perma-
nent order of custody. Such a clause raises quite different issues. It is usually intended to
ensure permanent access to the non-custodial parent. The right of access is, of course,
important but, as we have seen, it was not intended to be given the same level of protection
by the Convention as custody. The return of a child in the care of a person having perma-
nent custody will ordinarily be far more disruptive to the child since the child may be
removed from its habitual place of residence long after the custody order was made. The
situation also has serious implications for the mobility rights of the custodian.
[La Forest J considered whether this could be a case of wrongful retention; he rejected
that submission on the following ground.]
There is nothing in the Convention requiring the recognition of an ex post facto custody
order of foreign jurisdictions. And there are several statements in the supplementary
material to support the view that “wrongful retention” under the Hague Convention does
not contemplate a retention becoming wrongful only after the issuance of a “chasing
order.” … [A] wrongful retention begins from the moment of the expiration of the period
of access, where the original removal was with the consent of the rightful custodian of
the child. …
Accordingly, I conclude that the order granted by the Scottish court in favour of the
father on February 3, 1993, standing alone, would not have been sufficient to ground an
application under the Hague Convention, as it could not, in itself, make the retention
wrongful. …
I. Custody 987
Exceptions to the Return of a Wrongfully Removed Child

Having determined that Matthew was wrongfully removed under the terms of the Con-
vention, Article 12 of the Convention mandates this court to order his return “forthwith”
unless his case fits into one of the exceptions set forth in Articles 12, 13 and 20. …
The only exceptions into which it is claimed Matthew fits are that of “serious harm”
under the Manitoba Act or “a grave risk … [of] physical or psychological harm” under
the Convention. It is argued that Matthew’s separation from his mother, who has been
his primary caretaker for the past 13 months, will cause such harm, and that such separa-
tion is the necessary consequence of an order of return, due to the currency of the Scottish
custody order in favour of the father of February 3, 1993. I shall deal with the matter on
the basis that both tests of harm are applicable to the present proceedings; I shall have
more to say about this later.
As noted by Davidson J, the tests for harm under the Manitoba Act and the Convention
are not expressed in the same terms. The former requires that the “child would suffer
serious harm if the child remained in or was restored to the custody … .” The latter
requires “a grave risk that his or her return would expose the child to physical or psych-
ological harm or otherwise place the child in an intolerable situation.” … [T]he inconsis-
tencies between the Convention and the Act are not so great as to mandate the application
of a significantly different test of harm. …
It has been generally accepted that the Convention mandates a more stringent test
than that advanced by the appellant. … In Re A (A Minor) (Abduction) [[1988] 1 FLR 365
(CA)], Nourse LJ, in my view correctly, expressed the approach that should be taken, at
p. 372:
… [T]he risk has to be more than an ordinary risk, or something greater than would normally
be expected on taking a child away from one parent and passing him to another. I agree …
that not only must the risk be a weighty one, but that it must be one of substantial, and not
trivial, psychological harm. That, as it seems to me, is the effect of the words “or otherwise
place the child in an intolerable situation.”
I hasten to add, however, that I do not accept Twaddle JA’s assessment that the risk con-
templated by the Convention must come from a cause related to the return of the child
to the other parent and not merely from the removal of the child from his present care-
giver. As this court stated in Young v. Young, [1993] 4 SCR 3, from a child centred perspec-
tive, harm is harm. If the harm were severe enough to meet the stringent test of the
Convention, it would be irrelevant from whence it came. I should observe, however, that
it would only be in the rarest of cases that the effects of “settling in” to the abductor’s
environment would constitute the level of harm contemplated by the Convention. By
stating that before one year has elapsed the rule is that the child must be returned forth-
with, Article 12 makes it clear that the ordinary effects of settling in, therefore, do not
warrant refusal to surrender. Even after the expiration of one year, return must be ordered
unless, in the words of the Convention, “it is demonstrated that the child is now settled
in its new environment.”
In the case at bar, there is no doubt that Matthew would suffer some psychological
harm in being torn from his mother’s custody and thrust into that of his father, especially
in light of the possibility that, on a re-hearing, the Scottish court may award final custody
back to the mother. To paraphrase Helper JA, it is not good for a child to be bounced from
one caregiver to another. This problem has been recognized by other courts. In Re L
[[1993] 2 FLR 401 (Fam Div)], the father was American and the mother British. They had
lived in Texas where the child was born in 1991. The mother wrongfully removed the
child to England. The father applied under the Hague Convention for the return of the
child, and the mother resisted the application under the exception in Article 13(b). The
mother adduced evidence from two developmental psychologists that to separate a mother
from a 19 month old would cause the child grave psychological harm. The court held that
this evidence went to the merits of a custody hearing. The court determined that the risk
of harm to the child would only arise if the mother refused to accompany the child or
was denied a visa to do so. Even so the court held that the harm was not severe enough
to invoke Article 13(b). At page 405, it stated:
Even if she still failed [to accompany the child to Texas or] to obtain such a visa, I do not
accept that there is a grave risk that Thomas would be exposed to psychological harm of the
necessary degree, or be placed in an intolerable situation of the necessary degree. After all,
he will be collected by his father here, and taken to Texas, and then will be cared for by his
father and by his paternal grandmother thereafter.
In light of the undertakings of the father in Re L to pay the mother’s airfare, to pay
interim support money, and to vacate the matrimonial home in Texas for her to stay there
with the child until the custody hearing, the court was satisfied that the child’s interests
were safeguarded while the Convention was honoured.
Remedies
As discussed earlier, the “chasing order” issued by the Scottish court complicates matters
in the case at bar, for it makes one objective of the Convention, a return to the status quo
as it existed before the wrongful removal, impossible to achieve without taking additional
action. The Convention does not provide specifically for remedial flexibility because it is
based on the primary assumption that the wrongful removal of a child necessarily has
harmful effects (see the preamble; see also Anton, supra, at p. 543). In interpreting the
Convention, courts have recognized that frequently an unqualified return order can be
detrimental to the short term interests of the child in that it wrenches the child from its
de facto primary caregiver. …
Given the preamble’s statement that “the interests of children are of paramount import-
ance,” courts of other jurisdictions have deemed themselves entitled to require undertak-
ings of the requesting party provided that such undertakings are made within the spirit
of the Convention: see Re L, supra; C v. C [[1989] 2 All ER 465 (CA)]; P v. P (Minors)
(Child Abduction), [1992] 1 FLR 155 (Eng. HC (Fam. Div.)); and Re A (A Minor) (Abduc-
tion), supra. Through the use of undertakings, the requirement in Article 12 of the
Convention that “the authority concerned shall order the return of the child forthwith”
can be complied with, the wrongful actions of the removing party are not condoned, the
long-term best interests of the child are left for a determination by the court of the child’s
habitual residence, and any short-term harm to the child is ameliorated.
Mr. Thomson has offered the following undertakings through his solicitors which this
Court has accepted:
I. Custody 989
(a) He will not take physical custody of Matthew upon Matthew’s return to Scotland
and not until a court permits such custody.
(b) That he will commence such proceedings as will enable the court of competent
jurisdiction in Scotland to determine within approximately 5 weeks of Matthew’s
return on an interim or final basis, the issue of Matthew’s care and control.
Interaction Between Convention and Manitoba Act

Davidson J made a four-month interim custody order in favour of the appellant. The
interveners before this court disagreed on whether the Manitoba Court of Queen’s Bench
had jurisdiction to grant such an order. This difference of opinion arises from the inter-
pretation of s. 6 of the Manitoba Act (which allows such interim orders as are in the best
interests of the child) and the interpretation of Articles 12 of the Convention (which
demands that a wrongfully removed child must be returned “forthwith”) and 16 (which
states that a court charged with determining a case by application of the Convention “shall
not decide on the merits of rights of custody” unless it has first determined that the child
is not to be returned under the Convention). The Attorney General of Canada submits
that, if a conflict exists between these provisions, the Convention must prevail. The Attor-
ney General of Manitoba submits that in such a case, the Manitoba legislation must prevail.
[La Forest J reviewed the different provincial enactments.]
It is, in strictness, not necessary to decide whether the provisions of the Child Custody
Enforcement Act conflict with the provisions of the Convention in the case at bar. …
I think it advisable, however, to set forth my views on the interrelationship of the
Convention and the other provisions of the Act in circumstances such as arose here. As
I see it, those provisions and the Convention operate independently of one another. …
[However,] the legislature’s adoption of the Convention is indicative of the legislature’s
judgment that international child custody disputes are best resolved by returning the child
to its habitual place of residence. …
In the present case, applications were made under both the provisions of the Act and
the Convention … . There is nothing in the Act indicating that when an application is
made under the Convention, the independent procedure provided by the Act (which,
unlike the Convention, is more narrowly directed at the enforcement of custody orders)
should be referred to. By adopting the Convention, then, the legislature must be taken to
do what it requires: promptly return a child wrongfully removed from its state of habitual
residence to that state. Unless the applicant chooses to abandon it, the application under
the Convention applies. Black [“Statutory Confusion on International Child Custody
Disputes” (1993) 9 Can Fam LQ 279], at pp. 281-82, thus puts the matter:
The Convention simply requires that, subject to a narrow list of exceptions, children wrongfully
removed from the country of their habitual residence be promptly returned to that state. The
courts in the contracting state where the “abducted” children are present have an obligation to
order such return. Article 16 of the Convention makes it clear that where there is an application
for the return of a child, such application takes precedence over any custody application. …
Thus, an application for return pursuant to the Convention preempts a local custody
application. Only if the application for return is refused—either because the Convention is
held to be inapplicable or because one of its narrow exceptions is found to operate—should

a custody application proceed. Since the court which decided to grant an order for return of
the children pursuant to the Convention would obviously not both order such return and
then proceed to determine custody, a successful application under the Convention entails
declining any custody jurisdiction the court might otherwise possess. [Emphasis in original.]
Thus, as I see it, Davidson J or Helper JA could not make an interim custody order under
s. 6 of the Act. …
[However, because] of the “chasing order” obtained by the applicant, the restoration
of the status quo, which in the words of the Explanatory Report (Actes et documents, supra,
at p. 429) “The Convention … places at the head of its objectives,” cannot be achieved.
Faced with this situation, the court must be assumed to have sufficient control over its
process to take the necessary action to meet the purpose and spirit of the Convention.
Here this court accepted undertakings made by the applicant which in the circumstances
before it appeared best calculated to achieve that end. However, such undertakings may
not always be forthcoming or for one reason or another this course may not be acceptable.
That is why I would not rule out the possibility that, in circumstances such as these, the
time frame for return proposed by Helper JA might be justified under the Convention. I
observe that Article 11 contemplates a period of six weeks when the authorities in the
requesting state may enquire about delay. …
[La Forest J, with whom a majority concurred, dismissed the appeal.]
Since Thomson, Canadian courts from all provinces have continued to hear cases involving
the application of the Hague Convention. The Supreme Court of Canada’s decision remains
a central reference for further interpretation of the Convention in Canada. Three issues have
often occupied the courts’ attention in several cases: (1) the applicable notion of custody;
(2) exceptions to the return of a child including domestic violence; and (3) the question of
undertakings, as shown in the following decision.
Finizio v Scoppio-Finizio
(1999), 46 OR (3d) 226 (CA)
MacPHERSON JA (Labrosse and Goudge JJA):
Introduction
This is an appeal from the decision of Paisley J dated June 23, 1999 in which he refused
to order the return of two young children to Italy pursuant to the Hague Convention on
the Civil Aspects of International Child Abduction, Can. TS 1983, No. 35, as implemented
in Ontario in the Children’s Law Reform Act, RSO 1990, c. C.12 (“the Convention”). The
application hearing before Paisley J and this appeal were both heard on an expedited basis
as required by the Convention [in article 11]. …
I. Custody 991
A. Factual Background
The appellant, Giampiero Finizio (“the husband”), is an Italian national with landed
immigrant status in Canada. He is 37 years old. He and his brother own a steel fabricating
factory in Italy.
The respondent, Grazia Scoppio-Finizio (“the wife”), was born in Italy and immigrated
to Canada in 1977. She is 36 years old. Her most recent employment was as a part-time
teaching assistant at the University of Bari in Italy.
The parties married on October 18, 1990. They have resided in Italy since the marriage.
There are two children of the marriage, Corinne aged 7 and Paola aged 2. The children
have dual citizenship and are fully bilingual.
The parties are agreed that there have been serious problems in their marriage recently.
They also agree that they separated in 1998. The wife states that the separation occurred
on August 25; the husband says the correct date was October 8. Nothing turns on this
six-week difference.
The wife claims that on November 17, 1998 two important, indeed traumatic, events
took place. First, her husband assaulted her, punching her in the face. Second, he withdrew
most of the funds in their joint bank account, leaving her the equivalent of $1,000 (Cdn.)
for her expenses.
On December 26 the wife brought the two children to Toronto, her previous home
before her marriage and the home of her parents. She does not intend to return to live in
Italy and does not plan to send the children back there.
When the husband became aware of what had transpired he took steps to challenge
the wife’s decision and conduct. On March 22, 1999 he brought an application in the
Ontario courts [claiming that the children were being wrongfully retained in Ontario in
violation of the Hague Convention and requesting their return to Italy].
The application came before Paisley J. On June 23, 1999 he rendered his decision. He
did not grant the declaration and return order sought by the husband. He found that the
wife had wrongfully removed the children from Italy. However, he refused to order their
return to Italy because to do so “would place them in an inherently intolerable situation
as well as exposing them to a grave risk of psychological harm” (reasons, at p. 5).
The husband appealed from Paisley J’s decision.
B. Legal Issues
The husband challenges Paisley J’s decision that the children should not be returned to
Italy because of the potential harm this might cause to the children. The wife supports
Paisley J’s decision on this point. However, the wife contends that it was not necessary for
the judge to reach this point; he should have dismissed the application on the basis that
the husband did not have a custody right sufficient to anchor his application based on the
Convention. Accordingly, on this appeal, as on the application before Paisley J, there are
two legal issues to consider:
(1) Was the removal by the wife of the children from Italy to Canada a wrongful
removal contrary to Article 3 of the Convention?
(2) If the removal of the children was wrongful, should the children be permitted to
continue to live in Canada because an order returning them to Italy would violate
Article 13 of the Convention?
C. Analysis
(1) The Article 3 Issue
• • •
Paisley J analyzed this article. He also carefully considered the leading Canadian case
dealing with the Convention, namely Thomson v. Thomson, [1994] 3 SCR 551, 163 NR
69. He concluded, at p. 4:
I am satisfied that, while the mother was and has always been the primary caregiver, the
husband was exercising shared custodial rights of the children according to Italian law in
the circumstances, that he has not abandoned them, and that removal of the children from
their country of habitual residence was wrongful pursuant to Article 3 of the Convention.
• • •
In an Article 3 analysis, the nature of the custody rights of the party seeking an order
for the return of children must be determined in accordance with the law of the habitual
residence of the children. As expressed by L’Heureux-Dubé J in W. (V.) v. S. (D.), [1996]
2 SCR 108 at pp. 130-31, 134 DLR (4th) 481:
[A]lthough the Convention adopts an original definition of rights of custody, the question of
who holds the “rights relating to the care of the person of the child” or the “right to determine
the child’s place of residence” within the meaning of the Convention is in principle determined
in accordance with the law of the State of the child’s habitual place of residence … .
There is no question that the habitual place of residence of the Finizio children is Italy.
Before December 26, 1998 they had known no other permanent home. Accordingly, the
custody rights of their parents must be determined in accordance with Italian law.
In my view, Paisley J was correct to conclude that “the husband was exercising shared
custodial rights of the children according to Italian law” (reasons, at p. 4). On this point,
the conflicting opinions of the Italian legal experts retained by the parties are not useful.
Rather, the determinative statement on the relevant Italian law and its application to the
circumstances of the Finizio/Scoppio-Finizio family is found in the letter from the Italian
Central Authority charged with administering the Convention in Italy. In a letter to the
Reciprocity Office of the Ministry of the Attorney General dated June 7, 1998, Magistrate
Anna Maria Teresa Gregori of the Ministry of Justice stated:
We refer to your letter of 3 June 1999, which reached us on June 5, and beg to reconfirm that
under Italian law, as already mentioned in our letter 9.3.99 children born during marriage are
legitimate issue of both parents, who have equal rights and duties towards them under articles
143, 144, 147 and 316 of the Civil Code. In particular according to article 316 “a child is
subject to parental authority till he/she comes of age or becomes emancipated.” Therefore, at
the time of abduction custody pertained to both parents as their marriage continued its effect
and Mr. Finizio took constant and effective part in his children’s upbringing and education.
It is not material that Mrs. Finizio holds another view, as referred in the above letter, since
she has no legislative instruments to prove her allegations and no provisions exist under
Italian law to the contrary.
In light of this clear statement by the Central Authority charged with the administra-
tion of the Convention in Italy, as well as the other evidence Paisley J considered, I
I. Custody 993
conclude that he was correct to hold that the husband had standing under Article 3 to
challenge the wife’s removal of the children from Italy.
It follows from this conclusion that it is necessary to consider whether Paisley J was
also correct in refusing to order the return of the children to Italy.
(2) The Article 13 Issue

Once a Canadian court determines that a child has been wrongfully removed from a foreign
country which is also a party to the Convention, the court is mandated to order the return
of the children to that country. That is because of Article 12 of the Convention … .
However, Article 12 does not provide an absolute rule of return. There are some cir-
cumstances in which a court can refuse to make a return order. These circumstances are
set out in Article 13 … .
• • •
Does the situation faced by the wife in Italy in the late fall of 1998 come within this
description of Article 13(b) of the Convention? In my view, it does not. I reach this
conclusion for several reasons.
First, there is no evidence that the husband has ever done anything to harm the chil-
dren. The wife makes no allegation that he has ever struck the children or otherwise
abused them in any way. On this point, the fact that the father continued to visit the
children after the alleged assault on November 17, 1998 indicates that the wife does not
fear that contact between the husband and children will be detrimental to the children.
Second, the alleged single incident of assault at the summer home in Italy is, even on
the wife’s evidence, the only incident of a physical altercation between the spouses in their
eight-year marriage.
I think there is no question that in certain circumstances a physical attack on a mother
could cause psychological harm to children. Indeed, this court said as much recently in
Pollastro v. Pollastro (1999), 43 OR (3d) 485, 171 DLR (4th) 32 (CA). However, the situ-
ation in the Finizio/Scoppio-Finizio family is far removed from the terrifying situation
chronicled by Abella JA in Pollastro.
In his reasons Paisley J said that “no safeguard was put in place for the protection of
the mother by the judicial system of Italy prior to her departure” (reasons, at p. 4). With
respect, I do not think that this is a fair criticism of the Italian judicial system. With respect
to the police, the matter is in their hands. The fact that no charges have been laid against
the husband should not give rise to speculation that the police are not performing their
duties properly. With respect to the courts, it needs to be emphasized that the wife took
no steps to raise issues of support or custody in the Italian courts before removing the
children to Canada. Accordingly, there was simply no role the Italian courts could play.
Third, there is simply no basis for suggesting that the Italian courts are not well-suited
to deal with matrimonial issues, including support, custody and access. I agree with Jen-
nings J who said in Medhurst v. Markle (1995), 26 OR (3d) 178 at p. 182, 17 RFL (4th)
428 at p. 432 (Gen. Div.):
It is to be presumed that the courts of another contracting state are equipped to make, and
will make, suitable arrangements for the child’s welfare.
The English courts have taken a similar position on this issue. In C. v. C. (Abduction:
Rights of Custody), [1987] 1 WLR 654 at p. 664 (CA), Lord Donaldson of Lymington MR
said:
It will be the concern of the court of the State to which the child is to be returned to minimize
or eliminate this harm and, in the absence of compelling evidence to the contrary or evidence
that it is beyond the powers of those courts in the circumstances of the case, the courts of
this country should assume that this will be done. Save in an exceptional case, our concern,
i.e., the concern of these courts, should be limited to giving the child the maximum possible
protection until the courts of the other country—Australia in this case—can resume their
normal role in relation to the child.
Fourth, in Thomson v. Thomson, supra, the Supreme Court of Canada indicated that
Canadian courts can impose undertakings on parties to deal with the transition period
between the time when a Canadian court makes a return order and the time at which the
children are placed before the courts in the country of their habitual residence. As
expressed by La Forest J at p. 599:
Through the use of undertakings, the requirement in Article 12 of the convention that “the
authority concerned shall order the return of the child forthwith” can be complied with, the
wrongful actions of the removing party are not condoned, the long-term best interests of
the child are left for a determination by the court of the child’s habitual residence, and any
short-term harm to the child is ameliorated.
It does not appear that the parties addressed the question of undertakings before
Paisley J. In my view, this is an important factor which counsel should place squarely
before a judge hearing a Convention application. The strong language of the Convention,
coupled with what I view as the height of the bar set by the Supreme Court in Thomson
v. Thomson, will inevitably result in many children being returned to the country from
which they have been wrongfully removed. Given that prospect, both counsel should be
prepared to deal fully with the issue of how the children are to be returned, and to do so
before the judge hearing the initial Convention application.
In this case, the wife raised this issue on the appeal and it was addressed by both
counsel in their oral submissions.
[The wife requested the following undertakings:]
(1) the husband should provide airline tickets for the wife and children,
(2) the husband should provide suitable housing that approximates the accommoda-
tion the parties enjoyed prior to separation for the wife and children exclusively,
(3) the husband should pay a lump sum of $35,000 Cdn. as prepaid support for six
months,
(4) the husband should be ordered to refrain from annoying, harassing or molesting
the wife, despite the limits of the jurisdiction of the Ontario Court.
Before this court, the husband agreed to the first and second undertakings. He also
agreed to the fourth undertaking, with the caveat that he was not admitting that he had
engaged in such conduct in Italy. With respect to the third undertaking, the husband
I. Custody 995
pointed out that on May 5, 1999 he filed a petition/claim for judicial separation in the
court in Bari, Italy. This petition places the issue of the custody of the children before the
Italian court. The matter will come before the court on October 20, 1999. In light of this
schedule, the husband undertook to pay the wife $5,000 immediately to assist her and
the children upon their return to Italy and to pay a further $5,000 on October 20, 1999
if for some reason the Italian court has not heard his application. Bearing in mind that
when the wife returned to Canada she brought with her approximately $200,000 which
had been designated for the purchase of a new home, the husband’s undertaking to
provide $10,000 as interim support strikes me as fair.
For these reasons, it has not been established that the return of the children to Italy
would constitute a “weighty risk of substantial harm” to the children.
I conclude with a final observation. In W. (V.) v. S. (D.), supra, L’Heureux-Dubé J
engaged in an extensive analysis of the Convention and of the Quebec statute implement-
ing the Convention in that jurisdiction. She stated, at pp. 135-36:
The automatic return procedure implemented by the Act is ultimately intended to deter the
abduction of children by depriving fugitive parents of any possibility of having their custody
of the children recognized in the country and thereby legitimizing the situation for which
they are responsible. To that end, the Act favours the restoration of the status quo as soon as
possible after the removal of the child by enabling one party to force the other to submit to
the jurisdiction of the court of the child’s habitual place of residence for the purpose of
arguing the merits of any custody issue. The Act, like the Convention, presumes that the
interests of children who have been wrongfully removed are ordinarily better served by
immediately repatriating them to their original jurisdiction, where the merits of custody
should have been determined before their removal.
In my view, this is a clear and powerful articulation of the philosophy and implications
of the Hague Convention on the Civil Aspects of International Child Abduction. In the
present appeal, a proper reading of the Convention, and of the decisions of the Supreme
Court of Canada in Thomson v. Thomson and W. (V.) v. S. (D.), requires that the Finizio
children return almost immediately to Italy, the country of their birth and of their habitual
residence until they were wrongfully removed.
NOTE
This continues to be the Canadian approach to claims of violence by one of the parents: see
Pollastro v Pollastro (1999), 43 OR (3d) 485 (CA) (return not ordered); Ellis v Wentzell-Ellis, 2010
ONCA 347 (return ordered).
The impact of family violence on the application of the Convention has been explored by
numerous authors with differing perspectives: compare Linda J Silberman, “The Hague Child
Abduction Convention Turns Twenty: Gender Politics and Other Issues” (2000) 33 NYUJ Intl L
& Pol 221 with Merle Hope Weiner, “International Child Abduction and the Escape from
Domestic Violence” (2000) 69 Fordham L Rev 593. At the Fifth Meeting of the Special Com-
mission to Review the Operation of the Hague Convention, held in 2006, the issue was raised
directly by the Swiss delegates, who sought an amendment to the Convention; it was
defeated after discussion suggested that the exception of “intolerable situation” under
art 13(b) was broad enough to include concerns about domestic violence directed at the
abducting parent: see Merle Hope Weiner, “Intolerable Situations and Counsel for Children:
Following Switzerland’s Example in Hague Abduction Cases” (2008) 58 Am U L Rev 335. The
issue arose again at the 2011 Special Commission meeting, and while it was recognized that
the interpretation of the art 13(b) exception was within the exclusive purview of state courts,
international consistency was said to be valuable. To that end, the meeting recommended
the creation of a working group to develop a guide to good practice on the interpretation
and application of art 13(b). Work is ongoing on this project.
Canadian courts have also been called on to interpret the exception to return based on
the fact that the child has “settled” in its new environment (art 12(b)); see e.g. Kubera v Kubera,
2010 BCCA 118.
To respond to interpretative challenges under the Convention, the Hague Conference has
also taken the international judicial cooperation route. This has given rise to the develop-
ment of protocols for direct judicial cooperation for member states. It has also created an
International Hague Network of Judges,which includes Justice Jacques Chamberland (Court
of Appeal of Quebec) and Justice Robyn Diamond (Court of Queen’s Bench (Family Division)
of Manitoba): see Hoole v Hoole, 2008 BCSC 1248, for an example of this judicial cooperation
mechanism in the Canada – United States context.
1. Non-Removal Clauses in Final Custody Orders

The presence of a non-removal clause in an interim custody order was sufficient to establish
that a foreign court held a right of custody in Thomson v Thomson. This does not, however,
answer the question whether a non-removal clause in a final custody order confers a cus-
tody right on the parent who is not granted custody. This issue arises because the definition
of custody in art 5 of the Convention includes the “right to determine the child’s place of resi-
dence.” The question becomes whether the right to determine a child’s residence, standing
alone, will amount to a custody right, the breach of which triggers the application of the
Convention. Academic commentary is divided on the issue, as is international case law: see
Beaumont & McEleavy at 75-82. In Canada, the Supreme Court in Thomson did not need to
answer this question but indicated, in obiter, that it was a complex one with implications for
the custodial parent’s mobility rights. This did not prevent the British Columbia Court of
Appeal, in Thorne v Dryden-Hall (1997), 148 DLR (4th) 508 (BCCA), from concluding that such
a non-removal clause in an English final custody order granted a right in the nature of cus-
tody in accordance with art 5 of the Convention. Note that the court relied expressly on the
definition of custody provided in the relevant English statute.
The Canadian common law position under domestic law was considered in Gordon v
Goertz, [1996] 2 SCR 27. In that case, McLachlin J (as she then was), writing for the majority,
held that the notion of custody does not in itself include a right to determine the place of
residence of a child (and that a unilateral move by the custodial parent could amount to a
change in circumstances sufficient to justify a judicial reconsideration of custody). Whether
this means that a non-removal clause is not necessary to give the access parent a right to
object to relocation is not clear. In a Hague Convention decision released on the same day,
W (V) v S (D), [1996] 2 SCR 108, L’Heureux-Dubé J held that “the right to apply for a modifica-
tion of custody rights” following a unilateral move by the custodial parent did not amount
to a right of custody under the Hague Convention. Unfortunately, in a single paragraph of
concurring reasons by McLachlin J, which actually carried the majority, the following
II. Child Support 997
statement appears: “I agree with L’Heureux-Dubé J subject to my comments in Goertz on the

rights and obligations of custodial parents.” However, since Goertz was not concerned with
the notion of custody under the Convention, but only under Ontario law, the direct rel-
evance of that decision to an international abduction case is undetermined. It remains
unclear, therefore, whether the absence of a non-removal clause in a final custody order will
exclude the possibility that a non-custodial parent shares a right to determine a child’s resi-
dence equivalent to a right of custody under art 5 of the Convention.
The interpretation of custody under the Convention continues to be considered by the
Hague Conference at special commissions, held six times since the adoption of the Conven-
tion in 1980. The problems associated with relocation and non-removal clauses were on the
agenda in 2001 and led to the following rather cryptic conclusion: “Courts take significantly
different approaches to relocation cases, which are occurring with a frequency not contem-
plated in 1980 when the Convention was drafted. It is recognised that a highly restrictive
approach to relocation applications may have an adverse effect on the operation of the 1980
Convention.” This lack of uniformity in interpretation of the Convention may be less pro-
nounced in the future, given the creation of INCADAT, the International Child Abduction
Database, accessible free of charge, online: HCCH <http://www.hcch.net>.
II. CHILD SUPPORT

As discussed in Chapter 18, child support can be ordered as a corollary to divorce under the
Divorce Act, in which case it does not give rise to any private international law issues in the
interprovincial context. Parties married abroad can seek child support within an application
for a divorce in Canada, so long as the residency requirement is met for jurisdictional pur-
poses. Any order will then be automatically enforceable throughout the country. Where the
parties have been divorced abroad, however, Canadian courts have no jurisdiction under the
Divorce Act to order child support or modify foreign support orders: see the discussion in
Chapter 18. In such cases, child support is governed exclusively by provincial law, with
respect to jurisdiction and applicable law as well as recognition and enforcement of foreign
orders. The rules are largely similar to those applicable to spousal support discussed in
Chapter 18 and only those areas of possible variance will be considered here.
Unlike the variations that may exist regarding entitlement to spousal support, all jurisdic-
tions in Canada impose obligations of child support on parents, whether parenthood is a
biological or legal fact. The court’s jurisdiction to hear a claim for child support is largely based
on the residence of one of the parents in the province, although the presence of the child may
also confer jurisdiction, particularly where a court retains so-called parens patriae jurisdiction.
In terms of applicable law, where jurisdiction is exercised under the federal Divorce Act,
the Federal Child Support Guidelines, SOR/97-175, apply: see generally Payne & Payne. The
Guidelines set out tables for the calculation of support for each province and territory. Inter-
jurisdictional cases are dealt with in s 3(3), which provides that, where the support debtor
lives in Canada, the table for the province of residence of the debtor will be used; where the
support debtor lives outside Canada (or where the residence is unknown), the table for the
province of residence of the claimant will be used. Where support is sought under provincial
law, similar guidelines have been adopted, largely along the lines of the federal model,
including the rules for interjurisdictional cases: see e.g. the Alberta Child Support Guidelines,
Alta Reg 147/2005, s 3(4).
With respect to recognition and enforcement, the rules are provided by the Interjurisdic-
tional Support Orders Act (ISOA) as enacted in each province: see the discussion regarding
spousal support orders in Chapter 18.
The issues of jurisdiction and recognition of foreign child support orders, including the
role of the ISOA, were canvassed in the following case.
Jasen v Karassik
2009 ONCA 245
O’CONNOR ACJO:
[1] By order dated April 24, 2007, Cohen J (the “application judge”) of the Ontario
Court of Justice varied the terms of a child support agreement (the “agreement”) pursuant
to provisions of the Family Law Act, RSO 1990, c. F.3 (the “FLA”). She ordered the father
to pay retroactive support as well as increased ongoing payments based upon the Ontario
Child Support Guidelines, O. Reg. 391/97 (the “Guidelines”).
[2] Czutrin J of the Superior Court of Justice (the “appeal judge”) allowed the father’s
appeal. He held that the Ontario Court of Justice did not have jurisdiction under the FLA
to vary the agreement because the agreement was interjurisdictional in nature. The father
lived in the United States and the appeal judge found the agreement was a “U.S. contract.”
In addition, the appeal judge concluded that the Interjurisdictional Support Orders Act,
2002, SO 2002, c. 13 (“ISOA”) provided a “complete code for interjurisdictional support
proceedings” and as a result, the Ontario Court of Justice did not have jurisdiction under
the FLA to vary the agreement.
[3] The mother appeals to this court with leave. I would allow the appeal. In my view,
the agreement is a “domestic contract” as defined in the FLA and as such, the Ontario
Court of Justice had the power to vary it under the FLA. In the case of interjurisdictional
support proceedings, the ISOA does not displace jurisdiction under the FLA; rather, it
provides an alternative process.
• • •
[15] On this appeal, the father argues that the Ontario Court of Justice lacked juris-
diction to vary the agreement under the FLA because he resided out of the jurisdiction
at the time the mother sought to vary the agreement.
[16] Jurisdiction may be asserted against an out-of-province father in three circum-
stances: the father is physically present in Ontario; the father consents, agrees or attorns
to the jurisdiction; or Ontario has a real and substantial connection to the matter being
litigated and service ex juris has been properly effected: Muscutt v. Courcelles (2002), 60
OR (3d) 20 (CA), at paras. 19-20.
[17] In this case, the father was not physically present in Ontario. However, he did
appear and participate, through his counsel, on the application. His counsel did not raise
any issue that service had not been properly effected nor did he argue that the court lacked
jurisdiction. In particular, his counsel did not take the position that the father’s residence,
New York State, was a bar to the Ontario court’s jurisdiction. In the circumstances, I am
satisfied that the father attorned to the jurisdiction of the Ontario court.
II. Child Support 999
[18] I am also satisfied that there was a real and substantial connection among the
parties, the subject matter of the application and the Ontario court such that the applica-
tion judge properly assumed jurisdiction. …
• • •
[55] The appeal judge accepted the father’s argument that even if the FLA gave the
Ontario Court of Justice jurisdiction to vary the agreement, that jurisdiction is displaced
by the ISOA which provides a scheme for the variation of support agreements. The father
argues that the ISOA provides the only means by which an applicant can apply to vary an
agreement when the payor resides out of Ontario in a reciprocating jurisdiction.
[56] With respect, I conclude that in accepting the father’s argument, the appeal judge
erred. In my view, a resident of Ontario may bring an application for support or variation
of a support agreement under either the FLA or the ISOA. Applicants who choose to bring
a support proceeding under the FLA against a non-resident father are required to effect
service ex juris and to show that Ontario has a real and substantial connection to the
subject matter of the application. If the applicant is successful, the regime provided in the
ISOA may be available to the applicant to enforce the resulting order in a reciprocating
jurisdiction.
[57] There are three reasons why I conclude that the ISOA does not constitute a “com-
plete code.” First, the issue of whether a particular statute provides a “complete code” for
the resolution of particular claims is ultimately a question of legislative intent: Regina Police
Assn. Inc. v. Regina (City) Board of Police Commissioners, [2000] 1 SCR 360, at para. 31.
There is nothing in the ISOA to suggest that it was intended to remove the right of appli-
cants to proceed under the FLA by effecting service ex juris and demonstrating that the
Ontario court has jurisdiction to hear the application.
[58] Second, the ISOA expressly preserves the continued availability of remedies under
other legislation. Section 51 of the ISOA reads:
This Act does not impair any other remedy available to a person, the Province of Ontario, a
province or territory of Canada, a jurisdiction outside Canada or a political subdivision or
official agency of the Province of Ontario, of a province or territory of Canada or of a juris-
diction outside Canada. [Emphasis added.]
[59] Third, the broader interjurisdictional support regime contemplates that applicants
will not be precluded from seeking remedies in their own domestic courts. The statutes
in reciprocating jurisdictions have provisions similar to s. 51 of the ISOA. The American
Uniform Interstate Family Support Act, which was drafted by the National Conference of
Commissioners of Uniform State Laws and adopted in reciprocating US states, explicitly
acknowledges the continuing availability of remedies under laws such as the FLA in
Ontario. Section 104 provides:
(a) Remedies provided by this [Act] are cumulative and do not affect the availability of
remedies under other law, including the recognition of a support order of a foreign country
or political subdivision on the basis of comity.
(b) This [Act] does not:
(1) provide the exclusive method of establishing or enforcing a support order under
the law of this State; [Emphasis deleted.]
[60] In arguing that the ISOA is a “complete code” for obtaining, varying and enforcing
support orders against non-resident payors, the father relies on the decision of the British
Columbia Court of Appeal in Virani v. Virani (2006), 264 DLR (4th) 524 and the decision
of the New Brunswick Court of Appeal in Booker v. Leonard (2007), 321 NBR (2d) 340.
In my view, both decisions are distinguishable and neither stands for the proposition that
the ISOA is a complete code for interjurisdictional support proceedings in all cases. To
the extent that they can be taken to stand for this proposition, I would decline to follow
them for the reasons stated above.
• • •
[67] While it is true that in Virani, Southin JA held that the court lacked jurisdiction
to make an original order for support under the domestic legislation against an out-of-
province father, the real concern in that case was the lack of connection among the subject
matter of the proceedings, the parties and the British Columbia court: see Kendregan v.
Kendregan, 2009 BCSC 23, at para. 42. In the circumstances of that particular case, allow-
ing the mother to serve the father with what was, in effect, a motion to vary a foreign
support order under the guise of a fresh application for support under the domestic
legislation would have been contrary to the interests of comity. Thus, Southin JA “could
not have had in mind a situation where there was a real and substantial connection
between the province and a non-resident father, nor was that issue before the court”:
Kendregan at para. 58.
[68] There is no reason why an applicant may not pursue an out-of-province father
for support or for variation of a support provision in a domestic contract where service
ex juris has been properly effected and the real and substantial connection test has been
met. The real and substantial connection test was developed with the interests of comity
in mind. …
[69] Finally, as a practical matter, I note that if the father’s argument that the only
means for obtaining an original support order or varying a support agreement is under
the ISOA, then issues of child access and custody would in some cases have to be dealt
with in a different proceeding than child support where there is a non-resident payor.
That would be an unfortunate result and one that would run contrary to the principle
that a multiplicity of legal proceedings should be avoided: see Courts of Justice Act, RSO
1990, c. C.43, s. 138.
[70] In summary, I am satisfied that the appeal judge erred in setting aside the applica-
tion judge’s order on the basis that the ISOA provided the only procedure by which the
mother’s variation application could be addressed.
Internationally, the Hague Conference adopted the Convention of 23 November 2007 on the
International Recovery of Child Support and Other Forms of Family Maintenance and an accom-
panying Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations. Both
instruments generally adhere, in relation to child support, to a jurisdictional rule connecting
the proceedings to the residence of the claimant or child and a choice of law rule that adopts
multiple connecting factors with a view to designating a substantive law that will provide
support to the alimentary creditor. These new instruments, in force since 2013, with 33
member states as of 2016, replace, regarding child support, two older Hague conventions—
namely the Convention of 24 October 1956 on the Law Applicable to Maintenance Obligations
III. Adoption 1001
Towards Children and the Convention of 15 April 1958 Concerning the Recognition and Enforce-
ment of Decisions Relating to Maintenance Obligations Towards Children—that were in force in
fewer than 20 countries. The new Hague model also follows the Canadian interjurisdictional
support orders (ISO) approach (discussed in Chapter 18) by setting up administrative coop-
eration mechanisms to facilitate the establishment and management of interjurisdictional
child support claims: for details on these instruments, see online: Hague Conference on Pri-
vate International Law <http://www.hcch.net>. Canada has yet to sign either instrument.
III. ADOPTION
Adoption is unknown to the common law. As a result, rules governing adoption are exclu-
sively statutory in nature. With Canada’s ratification in 1997 of the Hague Convention of 29
May 1993 on Protection of Children and Co-operation in Respect of Intercountry Adoption, pri-
vate international law rules governing adoption have become much more clearly defined.
The Convention is currently in force among 96 states. As with the Abduction Convention,
implementation of the Adoption Convention requires a statutory enactment in each prov-
ince: see e.g. Adoption Act, RSBC 1996, c 5, part 4; Intercountry Adoption (Hague Convention)
Implementation Act, SS 1995, c I-10.01; Intercountry Adoption (Hague Convention) Act, CCSM
c A3; Intercountry Adoption Act, 1998, SO 1998, c 29; Intercountry Adoption (Hague Convention)
Act, RSPEI 1988, c I-4.1. The Hague Conference proceedings are helpful in setting out the
background to the Adoption Convention in terms of jurisdiction, recognition, and choice of
law issues. As with the previously discussed Abduction Convention, the Adoption Conven-
tion has also been reviewed by special commissions (the most recent in 2015). Their reports
and recommendations are available online: Hague Conference on Private International Law
<http://www.hcch.net>.
Hague Conference on Private International Law

Proceedings of the Seventeenth Session, 10-29 May 1993, Tome II, Adoption—
Co-operation at 57, 65-75, 67-73
Introduction
Intercountry adoption is legally complex not only because the rules of private substantive
law governing adoption vary significantly from one country to another, giving rise to
problems of private international law—questions of jurisdiction, applicable law and
recognition of foreign adoptions—but also because in many countries intercountry adop-
tion is in addition subjected to various provisions which override those rules of private
international law: laws requiring preliminary permission to adopt a child in intercountry
cases, immigration laws, nationality laws and others. …
In comparison with the position two or three decades ago, [we are now facing] a double
worldwide trend: (1) an increasing incidence of full adoption, leading to (a) a complete
cut-off from the biological family and (b) to full integration in the adoptive family and
(2) an increasing involvement of the courts, not only in respect of full adoption but also
of simple adoption, which formerly was seen in many systems purely as a contractual
arrangement. …
The growing internationalization of adoption is reflected in an increased interest by

legislators for the private international law of adoption … . [R]eforms have only partially
been inspired by the two main conventions on the private international law of adop-
tion—the 1965 Hague Adoption Convention and the Inter-American Adoption Conven-
tion of 1984—whose solutions, moreover, take different directions.
A general distinction may be made between two approaches: some systems tend to see
adoption primarily in terms of the relationships it creates and the question then is what law
governs its conditions and effects. These systems focus on the question of applicable laws
and the problem of the jurisdiction of authorities remains of a subsidiary character. This
approach might be called the conflicts approach. Examples of this group of systems include
France, Germany, most Latin-American countries and Japan. Other systems, in contrast,
see adoption primarily as a decision of the courts (or administrative authorities) who
create a new status by virtue of the power conferred upon them by their own law, the lex
fori. Here the question of international jurisdiction is of primary importance, the applic-
able law being in principle the authorities’ own law. This might be called the jurisdictional
approach. Systems belonging to the common law or which have been influenced by it
such as the United Kingdom, Ireland, Australia, India, Sri Lanka, Israel, Cyprus, Canada,
the United States as well as some other countries like Switzerland, and more recently Italy,
belong to this group … . [E]ven in the systems following the conflicts approach, the role
of the courts in creating the adoption relationship is of growing importance. …
Choice of Law
It is here that the “conflicts approach” and the “jurisdictional approach” may lead to
significantly different results. Whereas in the former approach the personal law of the
adopters and/or the child are of primary importance, in the jurisdictional approach, even
in an international case, the courts will apply their own law, the lex fori. Yet, there would
seem to be growing agreement worldwide that whatever choice of law system is preferred,
the welfare of the child should be of paramount importance and should temper a mech-
anical application of conflict rules.
The jurisdictional approach, leading to the application by the courts of their own laws,
has the double advantage of simplicity and of producing a result which will generally
correspond to the social environment of the future adoptive family. With the welfare of
the child in view, some courts in the United Kingdom, which also in principle follow the
jurisdictional approach, have taken the view that “welfare” does not mean simply physical
or moral well-being but benefit in the widest sense. In order to avoid limping adoptions,
these courts have taken into account as a factual element the personal law of the child … .
[For example] taking the child’s personal law concerning the question of [parental] consent
may not only contribute to reducing problems of non-recognition, if may also help to
avoid the adoption being contested, for example by the child’s relatives.
In the systems following the jurisdictional approach the lex fori will not only govern
the conditions for the adoption but also its effects, with the exception of questions of
inheritance which are generally governed by the law designated by the conflict rules
concerning succession to the estates of deceased persons.
Systems following the conflicts approach distinguish between the conditions for and
the effects of adoption. As far as the conditions for adoption are concerned, no problem
III. Adoption 1003
arises where both the adopters and the adoptee have the same foreign personal law, be
that the law of the domicile or the national law. In intercountry situations, however, this
will generally not be the case. …
The trend in systems following the conflicts approach [including France, Germany,
Belgium, and Japan] is to submit the effects of the adoption to the same law as that gov-
erning its conditions, i.e. in most cases the personal law of the adopters. …
Recognition
The recognition or non-recognition of foreign adoptions is a question of great practical
importance in intercountry adoption in particular because several countries from which
many adoptive children come require that the child be adopted in the country of origin
either before the child leaves the country or some time thereafter. The field of recognition
is characterized by a considerable lack of uniformity. The core problem is the recognition
of a foreign adoption order by persons who are nationals of or domiciled or habitually
resident in the country where recognition is sought. All systems agree that (the recogni-
tion of) the foreign adoption must not be contrary to public policy (ordre public). Beyond
that, they vary considerably both as to the degree of liberalism of their recognition and
as to the criteria for recognition.
One of the most restrictive systems is that under the Italian Adoption Act of 1983. A
foreign adoption order obtained by Italian adopters has no effect in Italy, unless (1) the
adopters have previously obtained a declaration of suitability, (2) the adoption is in
accordance with the law of the State of origin, and (3) it is not contrary to the fundamental
principles of Italian law concerning family and children’s law. Even so, the adoption must
have been preceded by a trial period of at least one year and if that condition has not been
observed, the foreign adoption is considered simply as a pre-adoption placement which
after one year must be followed by an Italian adoption. For practical purposes, this means
that foreign adoptions will seldom be recognized. The restrictive attitude of the Italian
legislator is deliberate: it is an attempt to give the Italian courts full control over inter-
country adoption.
French private international law applies not only a jurisdictional test—a foreign court
must have based its jurisdiction on a ground which is internationally acceptable from the
French point of view—but it also requires that the foreign court must have applied a law
compatible with the result to which application of French choice of law rules by the French
court would have led. …
The rules for recognition of foreign adoptions in the United Kingdom are liberal and
so are generally the laws of other systems belonging to the common law group such as
Australia and Canada. The leading case here is In re Valentine’s settlement, [1965] Ch. 831
(CA). Lord Denning, speaking for the majority, held that since adoption creates a new
status and since questions affecting status are generally determined by the law of the
domicile, a foreign adoption “in order to be recognized everywhere, must be validly cre-
ated by the law of the domicile of the adopting parent. …”
[I]t would seem that there is growing agreement to apply a jurisdictional rather than
a choice of law test to the recognition of foreign adoptions.
A. The Hague Convention on Intercountry Adoption

Following are the main articles of the Convention, beginning with the preamble.
Convention on Protection of Children and Co-operation in

Respect of Intercountry Adoption
(Concluded 29 May 1993)
The States signatory to the present Convention,

Recognizing that the child, for the full and harmonious development of his or her
personality, should grow up in a family environment, in an atmosphere of happiness, love
and understanding,
Recalling that each State should take, as a matter of priority, appropriate measures to
enable the child to remain in the care of his or her family of origin,
Recognizing that intercountry adoption may offer the advantage of a permanent family
to a child for whom a suitable family cannot be found in his or her State of origin,
Convinced of the necessity to take measures to ensure that intercountry adoptions are
made in the best interests of the child and with respect for his or her fundamental rights,
and to prevent the abduction, the sale of, or traffic in children,
Desiring to establish common provisions to this effect, taking into account the prin-
ciples set forth in international instruments, in particular the United Nations Convention
on the Rights of the Child, of 20 November 1989 … .
Have agreed upon the following provisions—
Chapter I—Scope of the Convention

Article 1
The objects of the present Convention are—
a) to establish safeguards to ensure that intercountry adoptions take place in the best
interests of the child and with respect for his or her fundamental rights as recognized in
international law;
b) to establish a system of co-operation amongst Contracting States to ensure that
those safeguards are respected and thereby prevent the abduction, the sale of, or traffic
in children;
c) to secure the recognition in Contracting States of adoptions made in accordance
with the Convention.
Article 2
(1) The Convention shall apply where a child habitually resident in one Contracting
State (“the State of origin”) has been, is being, or is to be moved to another Contracting
State (“the receiving State”) either after his or her adoption in the State of origin by spouses
or a person habitually resident in the receiving State, or for the purposes of such an adop-
tion in the receiving State or in the State of origin.
(2) The Convention covers only adoptions which create a permanent parent – child
relationship.
• • •
III. Adoption 1005
Chapter II—Requirements for Intercountry Adoptions

Article 4
An adoption within the scope of the Convention shall take place only if the competent
authorities of the State of origin—
a) have established that the child is adoptable;
b) have determined, after possibilities for placement of the child within the State of
origin have been given due consideration, that an intercountry adoption is in the child’s
best interests;
c) have ensured that
(1) the persons, institutions and authorities whose consent is necessary for adop-
tion, have been counselled as may be necessary and duly informed of the effects of
their consent, in particular whether or not an adoption will result in the termination
of the legal relationship between the child and his or her family of origin,
(2) such persons, institutions and authorities have given their consent freely, in the
required legal form, and expressed or evidenced in writing,
(3) the consents have not been induced by payment or compensation of any kind
and have not been withdrawn, and
(4) the consent of the mother, where required, has been given only after the birth
of the child … .
Article 5
An adoption within the scope of the Convention shall take place only if the competent
authorities of the receiving State—
a) have determined that the prospective adoptive parents are eligible and suited to adopt;
b) have ensured that the prospective adoptive parents have been counselled as may
be necessary; and
c) have determined that the child is or will be authorized to enter and reside perma-
nently in that State.
Chapter III—Central Authorities and Accredited Bodies

Article 6
(1) A Contracting State shall designate a Central Authority to discharge the duties
which are imposed by the Convention upon such authorities.
(2) Federal States … shall be free to appoint more that one Central Authority and to
specify the territorial or personal extent of their functions. …
Article 7
(1) Central Authorities shall co-operate with each other and promote co-operation
amongst the competent authorities in their States to protect children and to achieve the
other objects of the Convention.
(2) They shall take directly all appropriate measures to—
a) provide information as to the laws of their States concerning adoption and other
general information, such as statistics and standard forms;
b) keep one another informed about the operation of the Convention and, as far
as possible, eliminate any obstacles to its application.
• • •
Chapter IV—Procedural Requirements in Intercountry Adoption

Article 14
Persons habitually resident in a Contracting State, who wish to adopt a child habitually
resident in another Contracting State, shall apply to the Central Authority in the State of
their habitual residence.
• • •
Article 17
Any decision of the State of origin that a child should be entrusted to prospective adoptive
parents may only be made if—
a) the Central Authority of that State has ensured that the prospective adoptive parents
agree;
b) the Central Authority of the receiving State has approved such decision, where such
approval is required by the law of that State or by the Central Authority of the State of
origin;
c) the Central Authorities of both States have agreed that the adoption may proceed;
and
d) it has been determined, in accordance with Article 5, that the prospective adoptive
parents are eligible and suited to adopt and that the child is or will be authorized to enter
and reside permanently in the receiving State.
Article 18
The Central Authorities of both States shall take all necessary steps to obtain permission
for the child to leave the State of origin and to enter and reside permanently in the receiv-
ing State.
• • •
Chapter V—Recognition and Effects of the Adoption

Article 23
(1) An adoption certified by the competent authority of the State of the adoption as
having been made in accordance with the Convention shall be recognized by operation
of law in the other Contracting States. …
Article 24
The recognition of an adoption may be refused in a Contracting State only if the adoption
is manifestly contrary to its public policy, taking into account the best interests of the
child.
• • •
III. Adoption 1007
Article 26
(1) The recognition of an adoption includes recognition of
a) the legal parent – child relationship between the child and his or her adoptive
parents;
b) parental responsibility of the adoptive parents for the child;
c) the termination of a pre-existing legal relationship between the child and his or
her mother and father, if the adoption has this effect in the Contracting State where it
was made.
(2) In the case of an adoption having the effect of terminating a pre-existing legal
parent – child relationship, the child shall enjoy in the receiving State, and in any other
Contracting State where the adoption is recognized, rights equivalent to those resulting
from adoptions having this effect in each such State.
(3) The preceding paragraphs shall not prejudice the application of any provision more
favourable for the child, in force in the Contracting State which recognizes the adoption.
Article 27
(1) Where an adoption granted in the State of origin does not have the effect of ter-
minating a pre-existing legal parent–child relationship, it may, in the receiving State which
recognizes the adoption under the Convention, be converted into an adoption having
such an effect—
a) if the law of the receiving State so permits; and
b) if the consents referred to in Article 4, subparagraphs c and d, have been or are
given for the purpose of such an adoption. …
Chapter VI—General Provisions

Article 28
The Convention does not affect any law of a State of origin which requires that the adop-
tion of a child habitually resident within that State take place in that State or which pro-
hibits the child’s placement in, or transfer to, the receiving State prior to adoption.
• • •
Article 35
The competent authorities of the Contracting States shall act expeditiously in the process
of adoption.
Article 36
In relation to a State which has two or more systems of law with regard to adoption
applicable in different territorial units—
a) any reference to habitual residence in that State shall be construed as referring to
habitual residence in a territorial unit of that State;
b) any reference to the law of that State shall be construed as referring to the law in
force in the relevant territorial unit … .
Article 37
In relation to a State which with regard to adoption has two or more systems of law
applicable to different categories of persons, any reference to the law of that State shall be
construed as referring to the legal system specified by the law of that State.
Article 38
A State within which different territorial units have their own rules of law in respect of
adoption shall not be bound to apply the Convention where a State with a unified system
of law would not be bound to do so.
Article 39
(1) The Convention does not affect any international instrument to which Contracting
States are Parties and which contains provisions on matters governed by the Convention,
unless a contrary declaration is made by the States Parties to such instrument. …
For further discussion and commentary on the Convention from a Canadian perspective, see
Black (1994).
Many of the cases dealing with foreign adoptions occur in the immigration context,
where the applicable regulations now specifically refer to the Hague Adoption Convention.
Indeed, s 117 of the Immigration and Refugee Protection Regulations, SOR/2002-227 states:
(2) A foreign national who is the adopted child of a sponsor and whose adoption took place
when the child was under the age of 18 shall not be considered a member of the family class by
virtue of the adoption unless
(a) the adoption was in the best interests of the child within the meaning of the Hague
Convention on Adoption; and
(b) the adoption was not entered into primarily for the purpose of acquiring any status
or privilege under the Act.
(3) The adoption referred to in subsection (2) is considered to be in the best interests of a
child if it took place under the following circumstances:
• • •
(d) the adoption was in accordance with the laws of the place where the adoption took
place;
(e) the adoption was in accordance with the laws of the sponsor’s place of residence and,
if the sponsor resided in Canada at the time the adoption took place, the competent author-
ity of the child’s province of intended destination has stated in writing that it does not object
to the adoption;
(f) if the adoption is an international adoption and the country in which the adoption
took place and the child’s province of intended destination are parties to the Hague Conven-
tion on Adoption, the competent authority of the country and of the province have stated
in writing that they approve the adoption as conforming to that Convention; and
(g) if the adoption is an international adoption and either the country in which the adop-
tion took place or the child’s province of intended destination is not a party to the Hague
Convention on Adoption, there is no evidence that the adoption is for the purpose of child
trafficking or undue gain within the meaning of that Convention.
III. Adoption 1009
Many cases dealing with intercountry adoption arise within the immigration context and
involve the interpretation of Canadian immigration law. These decisions may diverge from
decisions under provincial law, which vary across the country, as illustrated in the following
case.
ME v Alberta (Minister of Human Services)

2015 ABQB 251
MANDERSCHEID J:
[1] This is an application by ME (the “Applicant father”) and KE (the “Applicant
mother”) (collectively, the “Applicants”) with respect to SE (the “child”). The Applicants
seek a declaration of this Court that the kafala they obtained in the Republic of Sudan is
equivalent to an adoption order as contemplated by s 73 of the Child, Youth and Family
Enhancement Act (“CYFEA”). The other parties, Alberta (Minister of Human Services)
and Canada (Minister of Citizenship and Immigration Canada), stated that they take no
position in the application; however, the Province of Alberta has filed a written brief
together with an affidavit sworn by Anne Scully, Senior Manager of Adoption Services.
[2] The child was born on June 24, 2009 in the Republic of Sudan. The Applicants are
originally from Sudan and hold Sudanese and Canadian citizenship. In June 2009, the
Applicants travelled to Sudan to visit family and, while there, went on a tour of the Al
Maykoma Orphan Child Care House, an orphanage located in Khartoum, Sudan, where
they became acquainted with the child, an orphan. The child was three weeks old at the
time. On July 15, 2009, after completing the necessary steps, including obtaining approval
from the orphanage and the Ministry of Social Affairs of El Khartoum, Republic of Sudan,
the Applicants took the child under their exclusive care through the process of kafala.
[3] Because of the child’s status as an orphan, Sudanese law dictates that she is deemed
to be a Muslim, and thus, subject to Sharia law. In Sudan, Sharia law governs family mat-
ters. The Applicants are also of the Muslim faith.
[4] The concept of adoption, as understood in the Western world, does not exist in
Sharia law. Similar to other Muslim countries, the Sharia court in Sudan has the authority
to issue a kafala order; but, Sharia courts do not issue adoption orders.
[5] Kafala means “support” and is often likened to what, in Alberta, we would call a
permanent guardianship order. The concept of kafala is distinct from adoption in various
ways, including:
(i) it does not sever the bonds of filiation with the biological parents;
(ii) it does not change the nature of relationships for estate purposes or alter the
degrees of consanguinity; and
(iii) it does not alter the relationships between the child and members of the biologi-
cal or kafala families concerning prohibitions on marriage or intimate relation-
ships (i.e. incest).
[6] To formalize the care relationship, the Applicant father made a “Declaration of
Support” on August 1, 2009. This allowed the Applicants to obtain a birth certificate for
the child, naming them as the child’s parents and identifying her as their daughter. The
Applicants received a Kafala (Support) Certificate in Sudan in October or November

2009. (The evidence is unclear as to whether the certificate was dated October 11, 2009
or November 10, 2009.) The Applicants subsequently obtained a passport for the child.
• • •
[9] Armed with the original Kafala (Support) Certificate order, the Applicants traveled
with the child to Cairo, Egypt in 2009. They did so as there is a Canadian Embassy in
Cairo and they wanted to begin the process of bringing the child to Canada. Wading
through the bureaucratic immigration process resulted in a delay of approximately two
years. The Applicant father returned to Canada to work and support the family, leaving
the Applicant mother and the child in Egypt.
[10] While in Cairo, civil unrest erupted resulting in the Government of Canada
evacuating Canadian citizens and permanent residents. On February 6, 2011, Citizenship
and Immigration Canada (“CIC”) granted a Temporary Resident Visa to the child to
permit travel with the Applicant mother to Canada. The child has resided with the Appli-
cants in Edmonton since then.
• • •
[15] Notwithstanding the child’s presence in Alberta, the Applicants cannot adopt the
child pursuant to the laws of Alberta because the child is not a Canadian citizen or perma-
nent resident as required by s 62(3) of the CYFEA.
[16] The Applicants submit that the Sudanese Orders have the combined effect of
creating a permanent parent–child relationship. In making this submission, the Applicants
rely on the fact that the Sudanese Orders give them the rights to have full care and custody
of the child, change the child’s name, obtain a passport, travel with her, and decide where
she should reside. This, they say, has the same effect as an adoption in Alberta for the
purposes of s 73 of the CYFEA. In addition, and in accordance with Sharia tradition, the
Applicant mother nursed the child, thus creating a “milk-kinship” with the child. The
significance of this occurrence will be discussed below.
• • •
[18] The CYFEA and the Adoption Regulation, AR 187/2004, recognize three forms
of intercountry adoptions: (i) adoptions governed by the Hague Convention on Protection
of Children and Cooperation in respect of Inter-Country Adoption (“Hague Convention”),
(ii) government-facilitated intercountry adoptions, and (iii) private intercountry adop-
tions. As the Republic of Sudan is not a signatory to the Hague Convention and does not
have an adoption process established with Alberta, the Applicants fall within the ambit
of private intercountry adoptions.
[19] Section 73 of the CYFEA states:
73 An adoption effected according to the law of any jurisdiction outside Alberta has the
effect in Alberta of an adoption order made under this Act, if the effect of the adoption order
in the other jurisdiction is to create a permanent parent – child relationship.
• • •
[26] Part 2 of the CYFEA governs adoptions. Neither the CYFEA nor the Adoption
Regulation defines the term “adoption.” As such, the Court must read the words of the
CYFEA and the Adoption Regulation “in their entire context and in their grammatical
and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and
the intention of Parliament”: Rizzo & Rizzo Shoes, Re, [1998] 1 SCR 27 (SCC) at para 21,
III. Adoption 1011
154 DLR (4th) 193 [Rizzo]. It is clear that the scheme and object of the CYFEA is the
protection and well-being of children with an emphasis on acting in their best interests.
• • •
[45] In general, the concept of kafala does not terminate prior parent – child relation-
ships. On their face, it appears that the Sudanese Orders are not equivalent to an adoption
in Alberta as nothing purports to terminate the prior parent – child relationships, though
the Bahri Wasat Sharia Court Order does identify the child as an orphan. In addition,
nothing in the Sudanese Orders purports to affect degrees of consanguinity or prior
relationships between the child and her biological family members.
[46] However, in my view, this is not determinative. Rather, the focus needs to be on
whether the effect of the Sudanese Orders is capable of creating a permanent parent –child
relationship for the purposes of s 73 of the CYFEA.
[47] The case at bar is the first time, as far as I can tell, that the issue of kafala has
arisen in Alberta in the context of an application under s 73 of the CYFEA. On the one
hand, it would be easy to say that kafala is not adoption and therefore this would end the
matter. On the other hand, it may be beneficial for the Court to undertake a more fulsome
review of the effect of the kafala to determine whether it bears enough similarity to an
adoption, as we consider that term to mean, so that it complies with the object and pur-
pose of Part 2 of the CYFEA.
[48] Other jurisdictions have grappled with the issue of how to address “adoptions”
that do not fully terminate existing filial bonds (for example, “simple adoption” or kafala).
While the legislative schemes of the various jurisdictions and the language used in such
legislation differ from that in Alberta and are therefore of limited jurisprudential value,
the principles underlying their application are instructive.
[49] In Saskatchewan, The Adoption Act, SS 1998 c A-5.2, specifically contemplates
simple adoptions. The process for recognizing simple adoptions is set out at s 28 whereby
residents of Saskatchewan can apply for formal judicial recognition of a simple adoption
order. Section 2 defines “simple adoption order” as:
[A]n order of adoption granted in a jurisdiction other than Saskatchewan that does not
necessarily for all purposes:
(a) terminate all the rights and responsibilities that exist at law between a child and
the child’s birth parents; or
(b) make an adopted child the child of the adopting parents as if born to them.
[50] Like Saskatchewan, Quebec has a formal process for judicial recognition of
foreign adoptions. …
[51] In Adoption—11356, 2011 QCCA 2353, the Quebec Court of Appeal examined
the history of adoption law in Quebec. The issue in that particular case was the recognition
of a simple adoption effected in Haiti, which is not a signatory to the Hague Convention.
The simple adoption did not fully terminate filial bonds. In the end, the Court granted
the application for judicial recognition of the Haitian simple adoption.
[52] Unlike Saskatchewan and Quebec, the legislation in Alberta does not contain a
formal process for judicial recognition of a foreign adoption order. Section 73 of the
CYFEA is the only legislative pronouncement and it is quite restricted in scope. The sole
consideration for the Court is whether the effect of the foreign adoption creates a perma-
nent parent – child relationship. This consideration is unique among the adoption statutes
across Canada. No other Canadian jurisdiction requires its courts to determine whether
a permanent parent – child relationship has been created. …
[53] Because of the unique language in the CYFEA, I need not concern myself with
precisely defining the essential elements of an adoption. It matters not whether the foreign
order severs filial relationships, alters degrees of consanguinity, or makes prohibitions on
marriage. In light of the statutory interpretation analysis above, the sole determination
is whether the effect of the foreign adoption is to create a permanent parent – child
relationship.
• • •
[67] The global nature and reality of our modern society will require the common law
to accommodate situations not contemplated by the drafters of legislation. The question
that I must answer in this case is whether the common law is capable of stretching to
include kafala within our understanding of adoption, and if so, whether it should.
[68] While not opposing the application, counsel for Alberta (Minister of Human
Services) points to the recent Federal Court of Canada case of Mashooqullah v Canada
(Citizenship and Immigration), 2014 FC 982 [Mashooqullah] as an example of a judicial
finding that a kafala is not an adoption. Having reviewed that decision, and noting that
it is not binding but merely persuasive, it is distinguishable for two reasons: (i) the lan-
guage used in the Citizenship Act, RSC 1985, c C-29 is different from the language used
in s 73 of the CYFEA; and, (ii) as will be discussed in greater detail below, s 58.1 of the
CYFEA requires the Court (and all persons who exercise any authority or make any deci-
sions relating to adoptions) to consider certain factors in determining the best interests
of the child.
[69] The Legislature has made it explicitly clear in s 73 of the CYFEA that the only
characteristic to consider when looking at foreign adoptions is whether their effect is to
create permanent parent – child relationships.
[70] As the concept of kafala does not terminate pre-existing parent–child relationships,
kafala simpliciter, without more, will be insufficient to satisfy the requirements of s 73 of
the CYFEA. However, in situations as in this case, when the pre-existing parent – child
relationship does not exist because a child is an orphan, the effect of the kafala brought
about through the Sudanese Orders is to create a permanent parent – child relationship.
[71] It is inconsequential to me the nomenclature assigned to a foreign “adoption”—
whether it is “adoption,” “kafala,” or some other term. The critical determination is its
effect.
[72] Because the effect of the Sudanese Orders is to create a permanent parent – child
relationship, the kafala referred to in this application is an adoption for the purposes of
s 73 of the CYFEA. Furthermore, while not required by s 73, the prohibition on marriage
that results from the milk-kinship serves to amplify the similarities between the kafala
in this case and an adoption effected in Alberta.
• • •
[102] The uniqueness of the case at bar is amplified by the fact that the Republic of
Sudan is not a signatory to the Hague Convention. If it were, much of the analysis done
in this decision would be unnecessary because ss 92-105 of CYFEA govern the process
for adoptions made under the Hague Convention. Section 101 specifically contemplates
“adoptions” granted in foreign jurisdictions that do not have the effect of terminating a
pre-existing parent – child relationship. That section reads:
IV. Cross-Border Surrogacy 1013
If an adoption granted in a designated State does not have the effect of terminating a pre-
existing parent – child relationship, the Court may, on application, convert it into an adoption
having that effect only if the required consents are given for the purpose of such an adoption
[emphasis added].
[103] This provision is similar to the provisions in the Saskatchewan and Quebec legis-
lation that permit judicial recognition of adoptions that do not entirely conform to the
Canadian concept of adoption. It is unfortunate that the CYFEA does not contain a simi-
lar provision for non-Hague Convention adoptions, so as to fit the Applicants’ situation.
[104] The transient nature of our global society suggests that the issues facing the
Court in this application will likely surface in other cases. Legislative intent with respect
to kafala and simple adoptions (or evidence thereof) is lacking in Alberta. To this end, it
is hoped that this decision will provide some clarity for future proceedings.
In 2015, member states of the Hague Conference met to review the practical operation of the
Hague Intercountry Adoption Convention. They concluded that kafala should be discussed
in the near future, recognizing that consideration of kafala within the international adoption
regime is critical if states where Islamic law is applicable are to adhere to the Hague instrument.
More generally, should Canada decide to ratify the 1996 Hague Convention on Jurisdiction,
Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility
and Measures for the Protection of Children, this will have a significant impact on the law in the
various provinces, whose private international rules regarding children in the interjurisdic-
tional context will have to be amended. The same is true of relevant provisions of the Divorce
Act. Provincial legislatures responded positively to the ratification of two previous Hague
conventions dealing with children (on abduction and on adoption), thus suggesting that the
benefits of harmonization in this area are recognized and that the international solutions
proposed are considered to be appropriate. The fact that these instruments are largely
premised on pursuit of the “best interest of the child” makes them compatible with the
substantive principles of provincial and federal law in relation to children.
IV. CROSS-BORDER SURROGACY

Surrogacy is legal in Canada but cannot be commercial in nature: Assisted Human Reproduc-
tion Act, SC 2004, c 2, s 12. While some provinces have enacted legislation dealing with sur-
rogacy, it is not uniform and parentage issues may depend on the existence of a biological
link with at least one of the intended parents: see the definition of “surrogate” and the
comment to s 8 in the Uniform Child Status Act of 2010 proposed by the Uniform Law Confer-
ence of Canada. Moreover, the statutes do not specifically address the situation in which
surrogacy was arranged outside the province or the country: see Family Law Act, SBC 2011,
c 25, s 29; Family Law Act, SA 2003, c F-4.5, s 8.2; Birth Registration Regulations, NS Reg 390/2007,
s 5. Some statutes provide for the recognition of extraprovincial declaratory orders dealing
with parentage but these are not specifically related to situations involving surrogacy: see
Family Law Act, SBC 2011, c 25, ss 34-36; Children’s Law Act, SS 1997, c C-8.2, ss 50-52. Despite
this diversity, legal practice seems quite uniform across the country as regards declarations
of parentage of the intended parents resulting from surrogacy whether arranged in Canada
or abroad, as explained in the following extract:
The general approach in Canada of legislators, courts, and administrators, with the exception
of Québec, has been to attach few evidentiary, substantive, or procedural requirements to
surrogacy-related parentage applications. In the absence of statutory reform, judges and admin-
istrators have nonetheless made parentage declaration orders in favour of intended parents. No
jurisdiction requires formal judicial or administrative approval prior to conception. Inquiries are
neither required nor made into the circumstances of the surrogacy arrangement under either
statutory or judge-made law, such as the surrogate mother’s capacity to consent, the financial
arrangements, or the intended parent or parents’ fitness. While applications can be made
immediately after birth, in most jurisdictions the surrogate mother must give consent post-birth
and she must be given notice of the proceeding and would therefore have an opportunity to
express any concerns. Parentage applications can be made regardless of where the child was
born as long as the parents are domiciled in the province where the application is made.
Busby at 300-1.
Although Quebec stands apart because it considers surrogacy arrangements to be
against public policy: Civil Code of Quebec, art 541, its courts have nevertheless made parent-
age declarations in relation to surrogacy, both domestic and foreign, by distinguishing the
contractual invalidity of the agreement from the filiation issue: see Tremblay.
Note that for Canadian immigration and citizenship purposes a genetic link between the
Canadian parent and the child must be established: see Canada (Citizenship and Immigration)
v Kandola, 2014 FCA 85. When this is not present, adoption will be the only way to establish
parentage. This can be a challenge where the intended parents are listed as parents on the
child’s foreign birth certificate, thereby making adoption impossible.
Internationally, the landscape remains diverse with the majority of countries still consid-
ering surrogacy to be illegal. This often leads their domiciliaries to arrange foreign surrogacies
and then face challenges establishing their parentage in their home country. The growth of
commercial surrogacy in countries such as India, Thailand, Mexico, and Ukraine has also
raised concerns about exploitation of women in those countries. The Hague Conference has
been working on this topic since 2010 and may shortly embark on the process of drafting an
international convention on cross-border surrogacy.

Bailey, Martha. “Canada’s Implementation of the 1980 Hague Convention on the Civil
Aspects of International Child Abduction” (2000) 33 NYUJ Intl L & Pol 17.
Bala, Nicholas & Mary Jo Maur. “The Hague Convention on Child Abduction: A Canadian
Primer” (2014) 33 Can Fam LQ 267.
Bala, Nicholas & Andrea Wheeler. “Canadian Relocation Cases: Heading Towards Guidelines”
(2012) 30 Can Fam LQ 271.
Beaumont, Paul R & Peter E McEleavy. The Hague Convention on International Child Abduction
(Oxford: Oxford University Press, 1999).
32 Can Fam LQ 53.
Black, Vaughan. “GATT for Kids: New Rules for Intercountry Adoption of Children” (1994) 11
Can Fam LQ 253.
V. Selected Bibliographical References 1015
Black, Vaughan. “Section 6 of the Divorce Act: What May Be Transferred?” (1992) 37 RFL (3d)
307.
Black, Vaughan. “Statutory Confusion in International Child Custody Disputes” (1993) 9 Can
Fam LQ 279.
Busby, Karen. “Of Surrogate Mother Born: Parentage Determinations in Canada and Else-
where” (2013) 25 Can J Women & L 284.
Diamond, R Moglove. “Canadian Initiatives Respecting the Handling of Hague Abduction
Convention Cases” (2008) 50 RFL (6th) 275.
Hague Conference on Private International Law. A Preliminary Report on the Issues Arising from
International Surrogacy Arrangements (Preliminary Document No 10, March 2012).
Hague Conference on Private International Law. The Parentage/Surrogacy Project: An Updat-
ing Note (Preliminary Document No 3A, February 2015).
Heine, Todd. “Home State, Cross-Border Custody, and Habitual Residence Jurisdiction: Time
for a Temporal Standard in International Family Law” (2011) 17 Ann Survey of Intl & Comp
Law 9.
Kruger, Thalia. International Child Abduction: The Inadequacies of the Law (Oxford: Oxford
University Press, 2011).
O’Halloran, Kerry. The Politics of Adoption: International Perspectives on Law, Policy and Practice
(Dordrecht: Springer, 2015) ch 5, Intercountry Adoption and the Hague Convention; ch 9,
Canada.
Payne, Julien D & Marilyn A Payne. Child Support Guidelines in Canada, 2015 (Toronto: Irwin
Law, 2015).
Rains, Robert, ed. The 1980 Hague Abduction Convention: Comparative Aspects (London: Wildy,
Simmonds & Hill, 2014).
Schuz, Rhona. The Hague Child Abduction Convention: A Critical Analysis (Oxford: Hart, 2013).
Silberman, Linda. “Co-operative Efforts in Private International Law on Behalf of Children:
The Hague Children’s Conventions” (2006) 323 Rec des Cours 261.
Snyder, Steven H & Mary Patricia Byrn. “The Use of Prebirth Parentage Orders in Surrogacy
Proceedings” (2015) 39 Fam LQ 633.
Tremblay, Régine. “Surrogates in Quebec: The Good, the Bad, and the Foreigner” (2015) 27
CJWL 94.
CHAPTER T WENTY-ONE
Matrimonial Property
I. Introduction: The Common Law Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

II. Matrimonial Property Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
A. Three Approaches to Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1020
B. Domestic Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031
I. INTRODUCTION: THE COMMON LAW BACKGROUND

The various specialized rules for jurisdiction in family law matters are considered in Part Two,
“Jurisdiction,” and earlier chapters in this Part Seven, “Family Law.” The rules for jurisdiction
in respect of movable and immovable property are considered in Part Six, “Property.” This
chapter focuses on the choice of law issues arising in matrimonial property disputes.
Subject to legislation to the contrary, the law that governs the effect of marriage and
other similar unions, and their dissolution, on the property rights of the spouses depends on
whether they have entered into a domestic contract. Where they have not entered into a
domestic contract, their rights will be governed by the law of the matrimonial domicile.
Where they have entered into a domestic contract, the contract will be interpreted in accord-
ance with the proper law of the contract.
Historically, the matrimonial domicile was that of the husband. It was understood that the
wife impliedly consented to the adoption of the marital property regime of that country.
Having lost the capacity to maintain an independent domicile, the wife would then be pro-
tected from any changes to the property regime applicable under the law of that country
arising from a subsequent change in the couple’s domicile: see generally De Nicols v Curlier,
[1900] AC 21 (HL); Beaudoin v Trudel, [1937] OR 1, [1937] 1 DLR 216 (CA).
In the absence of an express or implied marriage contract, the law of the matrimonial
domicile governs the spouses’ rights to each other’s movables, whereas the law of the situs
governs their rights to each other’s immovables. The cases once suggested, however, that,
as regards movables, the matrimonial regime would vary with a change of domicile save in
so far as vested proprietary rights had been acquired under the law of the former domicile:
see generally Pink v Perlin & Co (1898), 40 NSR 260 (SC); Re Heung Won Lee (1962), 36 DLR (2d)
177 (BCSC); see also Rafferty at 179-95.
Insofar as the common law rules remain relevant in light of the matrimonial property
legislation that is discussed in the next section, the identification of the matrimonial domi-
cile must take account of the fact that a married woman’s domicile is no longer dependent
on that of her husband. This is evident in the relevant provisions of the Civil Code of Quebec.
1017
1018 Chapter 21 Matrimonial Property

CQLR c C-1991
3122. The law applicable to a conventional matrimonial or civil union regime is

determined according to the general rules applicable to the content of juridical acts.
3123. The matrimonial or civil union regime of spouses who have not entered into
matrimonial or civil union agreements is governed by the law of their country of domicile
at the time of their marriage or civil union.
If the spouses are at that time domiciled in different countries, the applicable law is
the law of their first common residence or, failing that, the law of their common national-
ity or, failing that, the law of the place of solemnization of their marriage or civil union.
3124. The validity of any agreed change to a matrimonial or civil union regime is
governed by the law of the domicile of the spouses at the time of the change.
If the spouses are at that time domiciled in different countries, the applicable law is
the law of their common residence, or, failing that, the law governing their matrimonial
or civil union regime.
At common law, if the couple entered into a domestic contract, their rights in respect of all
the property within the ambit of the contract would be determined by the contract, despite
any subsequent change in domicile. In Devos v Devos, [1970] 2 OR 323, 10 DLR (3d) 603 at 610
(CA), the court said:
It is settled … that where there is a marriage contract, the terms of the contract govern the
mutual rights of husband and wife in respect of the property affected by the contract which
may be then possessed or afterwards acquired.
It continued (at 611):
When a marriage contract exists … the rights of the parties cannot be affected by a subsequent
change of domicile, but will always be covered by the proper law of the marriage contract or
settlement. The foundation for this rule is the principle that a change of domicile cannot affect
existing contractual obligations.
In general, the validity of the contract was governed by the proper law, which, in the
absence of evidence to the contrary, was presumed to be the husband’s domicile at the time
of the marriage: see Vien Estate v Vien Estate (1988), 64 OR (2d) 230, 49 DLR (4th) 558 (CA).
There were suggestions, however, that capacity to enter into such a contract should be
governed by the domicile of the party allegedly incapable: see e.g. Charron v Montreal Trust
Co, [1958] OR 597, 15 DLR (2d) 240 (CA).
II. MATRIMONIAL PROPERTY LEGISLATION

See generally Walker, ch 25; McLeod & Mamo; Welling.
The common law provinces and the territories have enacted matrimonial property legis-
lation: see e.g. Matrimonial Property Act, RSA 2000, c M-8; Family Law Act, SBC 2011, c 25;
Family Property Act, CCSM c F25; Marital Property Act, SNB 2012, c 107; Family Law Act, RSNL
1990, c F-2; Family Law Act, SNWT 1997, c 18; Matrimonial Property Act, RSNS 1989, c 275;
II. Matrimonial Property Legislation 1019
Family Law Act, RSO 1990, c F.3; Family Law Act, RSPEI 1988, c F-2.1; Family Property Act, SS
1997, c F-6.3; Family Property and Support Act, RSY 2002, c 83. In general, the statutes provide
for the equal division of the value of certain assets upon the breakdown of the marriage,
subject to an agreement between the parties to the contrary. The statutes may also provide
for the ambit of such agreements and any restrictions on their operation.
The division of property contemplated by the legislation is made irrespective of which
spouse owns the assets in question in a formal sense. With few exceptions, the legislation
does not purport to alter these property rights, but instead to apportion their value
between the parties, creating a payment obligation on the part of one spouse to address
inequalities upon dissolution of the relationship.
The main exception is the British Columbia legislation, in which s 81 of the Family Law Act
states that, upon separation, each spouse is entitled to “an undivided half interest in all fam-
ily property as a tenant in common,” which purports to create actual property rights. As
explained in Tezcan v Tezcan (1992), 62 BCLR (2d) 344 (CA):
The rights which arise by operation of the Family Relations Act [now the Family Law Act] are not
simply matrimonial rights between the parties inter se. Part 3 of the Act differs from other similar
Canadian enactments, which create only a payment obligation between spouses and do not, as
does the British Columbia statute, create interests in real property. Upon dissolution of the mar-
riage the Act operates to vest a proprietary interest in land in the non-titled spouse, which
would be recognized in the land titles system and affect title in respect of all persons.
Despite the general similarity of the legislation in the common law provinces, there are still
significant and substantial differences in the various matrimonial property regimes that have
been established: see McLeod & Mamo. The most significant effect of the variations in the
legislation is in relation to the disposition of movables. This is because, as discussed in Chap-
ter 14, the courts will not assume jurisdiction to determine title to or the right to possession
of foreign immovables, nor will they recognize and enforce determinations by foreign courts
of title to or the right to possession of immovables situated in the forum: see e.g. Palmer v
Palmer, [1980] 2 WWR 557 (Sask CA): Hlynski v Hlynski (1999), 176 DLR (4th) 132 (Sask CA). In
Tezcan v Tezcan (1987), 46 DLR (4th) 176 (BCCA), therefore, McLachlin JA held that only the
courts of the situs had jurisdiction to determine proprietary interests in immovables.
However, the variations in the legislation do have an indirect impact on immovables
insofar as they mandate the courts’ dividing the value of all property, both local and foreign,
movables and immovables, and ordering one spouse to pay a sum of money to the other:
see Gomez-Morales v Gomez-Morales (1990), 100 NSR (2d) 137, 30 RFL (3d) 426 (CA); Hlynski v
Hlynski, above, or indeed to their requiring one spouse to pay the other a sum of money
representing that other’s interest in foreign land by virtue of British Columbia’s Family Law
Act: see Laurence v Laurence (1991), 56 BCLR (2d) 254, 33 RFL (3d) 27 (CA).
Equally, the courts may enforce a contract with respect to foreign land through in per-
sonam proceedings: see Forsythe v Forsythe (1991), 33 RFL (3d) 359 (BCSC). In Macedo v
Macedo (1996), 19 RFL (4th) 65 (Ont Gen Div), the court held that it could order a husband to
sell foreign land and to share the net proceeds equally with his wife based on its in personam
jurisdiction over the husband. Alternatively he could pay her a sum of money representing
one-half of the value of the foreign land. Equally, in Webster v Webster (1997), 32 OR (3d) 679
(Gen Div), the court granted the wife an interim order, pending the resolution of her claims
under Ontario’s Family Law Act, above, enjoining her husband from proceeding in Bermuda
with an application for the partition and sale of the parties’ Bermuda land.
A. Three Approaches to Choice of Law

In the first approach, exemplified by the Saskatchewan statute (and by the British Columbia
statute prior to 2011), the legislation contains no choice of law rules, but, as mentioned above,
the legislation authorizes the court to make orders affecting the property rights of the par-
ties. This was illustrated in the following decision, which considers several related issues.
Tezcan v Tezcan
(1992), 62 BCLR (2d) 344 (CA)
CUMMING JA:
Judgment Appealed From

This is an appeal from the judgment … finding that the proper law to be applied is that
of British Columbia and reallocating family property in British Columbia pursuant to
s. 51 of the Family Relations Act, 1979 R.S.B.C. c. 121 [see now Family Law Act, SBC 2011,
c 25, s 107]. This decision is reported at (1990), 44 B.C.L.R. (2d) 343, 68 D.L.R. (4th) 279.
Facts
The parties were born in Turkey.
• • •
The parties were married in Turkey on June 2, 1961. …

There were two children of the marriage: a son, Haluk, and a daughter, Kamer.
Throughout the marriage, the wife looked after and maintained the household and cared
for the children. She also made arrangements for numerous social functions related to
the advancement of the husband’s career.
In August 1961 the parties moved to Vancouver where the husband took a position as
a lecturer in the Faculty of Engineering at the University of British Columbia.
The husband also studied and participated in the real estate market. Three British
Columbia properties were purchased during the course of the marriage … .
In June 1966 the Tezcan family returned to Turkey and in 1967 came again to Vancou-
ver. Both of the parties obtained Canadian citizenship.
In 1968 the Tezcan family returned to Turkey, where they lived for the remainder of
their marriage. While the family lived in Turkey, the wife also cared for the husband’s
mother who lived with them.
The husband purchased properties in Turkey which, at the time of trial, were valued
at over $1 million.
The parties separated in June 1983. In early September 1983 the parties and their two
children met at Ulus, near Istanbul, to discuss the disposition of property acquired during
the marriage. No final agreement, however, was reached.
On September 18, 1983 the parties were divorced in Turkey. The Turkish divorce decree
did not deal with the property of the parties and no other proceedings have been taken
with respect to the property. The husband has exclusive title and right to the properties
in Turkey.
• • •
Issues
The appellant seeks to persuade this court that the law of Turkey should be the law applic-
able for determining the disposition of the matrimonial assets of the Tezcan marriage.
According to the Turkish regime, married persons would be deemed to hold separate
assets and therefore the respondent would not be entitled to any portion of the husband’s
property. The respondent submits that the law of British Columbia is the law applicable
for determination of division of matrimonial assets (in particular the Cornwall and
Blythwood properties). The trial judge agreed with the respondent and held that the law
of British Columbia (specifically the Family Relations Act) was the proper law to apply.
Specifically in his factum the appellant alleges the following errors in the judgment
under appeal:
I. As to Choice of Law the Trial Judge Erred

(a) He should have held that rights to Blythwood, being a movable, were to be adju-
dicated under the Turkish regime.
(b) He should have found an implied contract between the parties that they should
be governed by the Turkish regime.
(c) Choice of law for purposes of the Family Relations Act should be determined by
choosing the law of the jurisdiction with which the spouses have the most real
and substantial connection, in this case Turkey.
II. The Trial Judge Erred in the 70/30 Division He Made of Family Assets
(a) He should not have taken the appellant’s Turkish properties into account.
• • •
Discussion
To assess these contentions it is necessary to consider the matter in several discrete steps.
I. Characterization—Is This a Property or Matrimonial Claim?

(i) In order properly to determine which substantive law this court should resort to
for the resolution of this matter, it is first necessary to determine which choice of law rule
to apply in accordance with the conflicts rules of this province. The choice of law rule
instructs the court as to which substantive system of law it should apply to resolve the
issue in dispute. Obviously, the determination of the choice of law rule may affect the
ultimate outcome of the case. For example, one choice of law rule may point to the lex
domicilii (which might favour the appellant) and another may point to the lex situs (which
might favour the respondent).
(ii) In order to make the determination regarding the choice of law rule, this court
must first determine under which juridical category the matter is deemed to fall, i.e., how
is the claim properly characterized. A different choice of law rule (and thus perhaps a
different substantive law) may apply depending on whether the present claim is character-
ized as a property matter or as a matrimonial matter.
• • •
In the present case it is not necessary to establish a rigid rule regarding characterization
of claims into juridical categories for conflict of law cases. I reach this conclusion because,
according to either the Turkish law (as proven on the evidence) or the law of British Col-
umbia, the claim of the respondent in this case would properly be characterized as one
relating to property.
(a) Turkish Characterization

The learned trial judge found as a matter of fact that a Turkish court would characterize
this claim as one related to property. He said:
Both experts called by the plaintiff, Dr. Davran and Professor Uluocak, testified that a Turkish
court would characterize this claim as one related to property and, in accordance with the
lex rei sitae rule, refer it to British Columbia courts. … (68 D.L.R. (4th) p. 282-283)
• • •
In the court below Harvey J. stated:

[T]his claim is primarily a property claim which happens to arise within a marital context.
The context of the claim should not be confused with the essence of the claim. The essence
of this claim is property. (p. 284)
• • •
I agree with the learned trial judge that the claims of the respondent to the assets in
the present case pursuant to Pt. 3 of the Family Relations Act are to be considered property
claims for the purposes of the choice of law rules.
It is, therefore, next necessary to determine which choice of law rule applies to property
matters according to the conflicts rules of this province.
II. Choice of Law Rule for Property

It is common ground that the choice of law rules applicable to proprietary claims arising
from marriage are as follows:
(1) Claims to movable property are governed by the lex domicilii (i.e., the law of the
matrimonial domicile); and
(2) Claims to immovable property are governed by the lex situs unless;
(3) Any marriage contract (express or implied) provides otherwise (see 8 Halsbury’s
Laws of England, 4th Ed. paras. 513 and 515).
III. Are All Family Relations Act Claims to Be Considered Claims to Movables?
The appellant contends that all Family Relations Act claims should be considered as claims
to movables and thus governed by the lex domicilii (which in the present case would be
that of Turkey). In his factum he states:
A claim under the Family Relations Act is a claim based on the equities between the spouses,
a claim in personam, and it should not be categorized as a claim for title to real property.
I am unable to accept this submission.

The Act itself is clearly intended to confer proprietary rights to interests in land, which
are immovables. Section 53(2) [now s 97] specifically empowers the court to, inter alia:
(a) declare ownership of or right of possession to property;

(b) order that, on a division of property, title to a specific property granted to a spouse
be transferred to, or held in trust for, or vested in the spouse either absolutely, for
life or for a term of years; …
• • •
(d) order partition or sale of property and payment to be made out of the proceeds
of sale to one or both spouses in specified proportions or amounts; …
• • •
(g) where property is owned by spouses as joint tenants, sever the joint tenancy.
• • •
The rights which arise by operation of the Family Relations Act are not simply matri-
monial rights between the parties inter se. Part 3 of the Act differs from other similar
Canadian enactments which create only a payment obligation between spouses and do
not, as does the British Columbia statute, create interests in real property. Upon dissolu-
tion of the marriage the Act operates to vest a proprietary interest in land in the non-titled
spouse which would be recognized in the land titles system and affect title in respect of
all persons. …
I must therefore reject the appellant’s argument that all claims arising under the Family
Relations Act are to be characterized as claims to movables.
• • •
V. Is There an Implied Contract Between the Parties?

The learned trial judge stated, at 285:
[T]he critical question … is whether there is an express or implied marriage contract, the
effect of which governs the rights of the parties to the land in British Columbia. If there is,
then the lex rei sitae rule may not apply …
It is conceded by the appellant that there was no express contract made between the
parties in the present case. However, the appellant contends that there was an implied
contract which was created by operation of the Turkish Civil Code (the law according to
which the parties were married).
In the court below, Harvey J heard evidence of experts relating to Turkish law. He
concluded, as a matter of fact:
In the absence of an express contract, art. 170 of the Turkish Civil Code presumes that the
parties fall under the regime of separation of assets. Article 186 of the Turkish Civil Code
defines the separation of assets as follows:
186. The system under which the husband and wife each retain the ownership,
administration and usufruct of his or her own assets is called separation of assets.
(p. 286)
The appellant argues that by not expressly contracting out of this separation of assets
regime, the parties are to be taken as having impliedly contracted into this relationship
as a result of the Turkish Code. There is no question that in general, an implied contract
can arise as a result of the law under which parties have been married (De Nicols v. Curlier,
[1990] A.C. 21 (H.L.)). It is therefore necessary to determine whether such an implied

contract is to be found to exist in the present case.
The learned trial judge considered the evidence of the Turkish experts to determine
whether the operation of the Turkish Civil Code was such as to create an implied contract.
He examined the issue from the perspective of Turkish law and concluded:
The weight of the expert evidence in this case establishes that there is no implied contract
in the absence of an express contract. (p. 287)
This determination was a finding of fact. …

• • •
In the present case the parties were Turkish by birth, nationality and domicile through-
out the marriage. They were also resident in Turkey for most of their marriage. The
marriage itself took place in Turkey. … The correct law for determining the existence and
validity of an implied contract was therefore the law of Turkey. The learned trial judge
did not err in accepting the evidence of the Turkish experts in this regard. The finding
that there was not an implied contract according to Turkish law is a finding of fact and
there is no basis upon which that finding can be disturbed.
In addition, I would also note that the principal case relied upon by the appellant in
support of this argument was De Nicols v. Curlier, supra. In that case, an implied contract
was found to exist, but the English court relied on expert evidence to determine whether
an implied contract existed according to the laws of France.
• • •
VIII. Public Policy

Because I have concluded that the law of Turkey is not applicable in the present case (save
with respect to the limited determination that there was no implied contract between the
parties) I do not consider it necessary to determine whether application of the Turkish
laws relating to matrimonial property should be rejected by this court as being offensive
to public policy.
IX. Should the Value of the Turkish Properties Be Taken into Account in Division of
the British Columbia Properties Under the Family Relations Act?
The appellant submits that the learned trial judge erred by considering the value of the
Turkish properties held by the appellant when he apportioned the British Columbia
properties under the Family Relations Act. He states in his factum:
There is no definition of property in the BC Family Relations Act. The words of the statute
do not contemplate the taking into account of property in other jurisdictions.
There can be no question that the Act does not give the court the power to make orders
in respect of rights or title to land held in other jurisdictions: Duke v. Andler, [1932] S.C.R.
734. However, it is necessary to decide whether the court can consider those assets when
apportioning matrimonial property held within British Columbia.
In Wong v. Wong (1985), 60 BCLR 135 (S.C.), Cowan L.J.S.C. (as he then was) stated,
at 143:
Assuming the court made a determination that all or part of the British Columbia assets
were family assets for the purposes of the Act, it would then have to go on and consider
under s. 51 [now s 93] whether the equal division which would follow from such determin-
ation would be unfair. To do this effectively, as well as deal with the plaintiff ’s claim to the
Hong Kong assets, it would have to hear expert evidence as to the law of Hong Kong in order
to determine what rights under Hong Kong law the plaintiff might have to those assets. This
determination would have to be made to decide the issue of fairness even though this court
could not make any order specifically affecting the Hong Kong assets since those assets are
situate outside its jurisdiction. Even so, in my view, evidence would have to be called in this
regard from Hong Kong witnesses pertaining to the value of the Hong Kong assets before
the court could reasonably decide if an equal division of the British Columbia assets (assum-
ing they were found to be family assets) would be unfair.
In Laurence v. Laurence (1991), 56 B.C.L.R. (2d) 254 (B.C.C.A.), Hutcheon J.A. con-
sidered whether a British Columbia court has the jurisdiction to order that a sum of
money be made payable under the Family Relations Act in respect of a half interest in
property situated in New Zealand. Speaking for the court, Hutcheon J.A. stated at 257-258:
[The judgment in the court below] is an effective judgment so that the principle impeding
an exercise of jurisdiction is not involved. Unlike the circumstances in Duke v. Andler, supra,
no steps are required to be taken in the foreign jurisdiction to carry out the orders of the
court. The court is exercising its personal jurisdiction over Mr. Laurence …
[T]o carry out the objectives of the Family Relations Act, we should recognize the right
to a compensation order in the circumstances of land located in a foreign jurisdiction.
It would seem that to the extent that the respondent received a greater interest in the
British Columbia properties because of the trial judge’s consideration of the assets owned
in Turkey, that order is no different than the compensation order discussed in Laurence.
In Tezcan v. Tezcan (No. 1) (1987) 46 D.L.R. (4th) 176, McLachlin J.A. (as she then
was) stated at p. 181:
… assuming that a British Columbia court in such an action were to hold that the Family
Relations Act was applicable or that the equitable doctrine of constructive trust applied, it
would be open to the British Columbia court to take into account a division of property
made in another jurisdiction in determining what order, if any, should be made in relation
to the British Columbia land.
I agree with the learned trial judge’s conclusion that this reasoning should be applied
to regime-imposed division of property as well as court-ordered division of property in
the other jurisdiction.
I conclude that the trial judge did not err in law in considering the value of the Turkish
properties for the purposes of distributing the matrimonial properties in British Columbia.
NOTES
1. For an excellent discussion of this case, see Black (1993).

2. Tezcan v Tezcan was considered at some length in the Saskatchewan context by the
Saskatchewan Court of Appeal in Hlynski v Hlynski (1999), 176 DLR (4th) 132 (Sask CA). In that
case, the court took into account the value of land owned by the husband in Manitoba when
effecting a distribution of matrimonial property pursuant to Saskatchewan’s Matrimonial
Property Act (now Family Property Act, SS 1997, c F-6.3). In reaching its conclusion, the court
emphasized that the legislation in Saskatchewan, unlike that in British Columbia, did not
purport to create distinct rights of property. Cameron JA said at 145-46:
Based upon the statutory presumption that marriage is a partnership that entails diverse con-
tributions of equivalent value to the partnership, the Act confers upon the partners to a mar-
riage the right, upon application to the Court of Queen’s Bench, to a court ordered distribution
of their matrimonial property or its value in equal proportion, regardless of ownership, subject
to certain exceptions, exemptions, and equitable considerations. This constitutes a right to a
distributive share of, as distinct from a right of property in, the things comprising matrimonial
property or their value. Not only is this characterization of the right implicit in its derivation and
the terms in which it is conferred, especially the terms “distribution” of “the matrimonial prop-
erty or its value,” such characterization is made explicitly so by subsection 43(1): “No provision
of this Act vests any title to or interest in any matrimonial property of one spouse in the other
spouse.” It is only the court that may do so.
Hence the right [created by the statute] is not a proprietary one, but a personal one—a
personal right, grounded in the joint obligations of the parties to the marital partnership, to
apply to the court for the distributive share contemplated by the provisions of the statute.
Thus there was no need to have recourse to Manitoba law when taking into account the
value of the Manitoba land. Cameron JA continued at 149:
Suffice it to say that the court was not called upon in determining the claim to adjudicate upon
any right over, or in relation to, the land situate in Manitoba. It was not as though Mr. Hlynski’s
ownership of the land, or the extent of his interest therein, or some such question, was in issue,
requiring resort to the law of Manitoba. He admitted to holding title to the land, clear of encum-
brances, and admitted its value. And it is not as though she claimed any right of property in the
land.
The court, however, offered little insight as to what choice of law principles might be applied
in Saskatchewan.
Christopher v Zimmerman
2000 BCCA 532
SAUNDERS JA (Hollinrake and Ryan JJA concurring):

[1] The appellant Ms. Christopher appeals the order of the learned trial judge on a
Rule 18A application that her claim for a declaration of constructive trust is governed by
the law of Hawaii.
[2] The parties are not married. They met in Hawaii in 1988 and resided there together
until 1993. The degree, if any, to which they cohabited in a spousal relationship is disputed.
In 1993 the parties moved together to the mainland of the United States of America, and
from then until June of 1997, they resided in various states. In June 1997 they moved from
Florida to British Columbia and were together until separation in October 1998. They
have thus lived in four states in the United States of America and British Columbia.
[3] The respondent Mr. Zimmerman, also known as Mr. Zim, has moveable assets in
his name of some value. Ms. Christopher in this action seeks a declaration of constructive
trust as a remedy for unjust enrichment that she alleges Mr. Zimmerman has received
from her. It appears at this stage of the evidence that her opportunity to obtain such relief
is weaker in Hawaii than in British Columbia.
[4] Mr. Zimmerman sought an order under Rule 18A of the Rules of Court dismissing
the action, or alternatively, seeking an order that the proper law to be applied in the case
is the law of Hawaii.
[5] The learned trial judge, accepting the position expressed by then counsel for Mr.
Zimmerman, approached the question as one of domicile and treating the matter as
analogous to a dispute involving marital property:
In my view, in a modern context the determination of domicile ought not to rest on whether
the parties were married or not. Claims to moveable property are to be governed by the lex
domicilii or the law of the matrimonial domicile absent some express or implied agreement
to the contrary. Given the affidavit evidence of the plaintiff, I am satisfied that she has not
established that the defendant changed his domicile of choice to British Columbia.
Accordingly, the British Columbia court should decide the issues of trust on the basis of
the law of Hawaii.
[6] On appeal Ms. Christopher contends that the proper law of the claim is to be
determined on the basis that she claims in equity, and that it is not to be decided on the
rules relating to marital property. Further, she says determination of the law requires
findings of fact and cannot be answered on the basis of the filed affidavit materials.
[7] Mr. Zimmerman, through new counsel, agrees that the proper law should be
determined on the basis Ms. Christopher claims in equity but says that the trial judge’s
conclusion that the proper law is the law of Hawaii is, on the evidence, correct.
[8] The statute law in British Columbia does not address Ms. Christopher’s claim and
the question of the proper law of the dispute must be answered under the common law.
[9] Determination of the proper law of a claim requires the Court to first characterize
the claim and then to identify the choice of law rules that apply to the claim. It is then
that the Court considers the evidence to determine what law to apply based upon the
applicable choice of law rules. In this I refer to Tezcan v. Tezcan (1992), 62 B.C.L.R. (2d)
344 (C.A.).
[10] This case must be characterized as one concerning unjust enrichment, that is, it
is a claim in equity. It is not and could not be a claim about marital property, a claim which
would engage provisions of our statute law, because the parties are not married. On a
claim in equity, the substantive law concerns the principles of equity and is not dependent
upon the nature of the parties’ relationship.
[11] In Peter v. Beblow (1993), 101 D.L.R. (4th) 621 (S.C.C.), McLachlin J. (now C.J.C.)
warned against dividing unjust enrichment cases into two categories: commercial and
family. While this warning was given in the context of the substantive law relating to
constructive trust, it is equally apt to issues of the proper law of a dispute. Further, there
is no basis on which to treat claims involving relationships loosely termed common-law
differently from those involving other personal relationships such as child and parent, as
would be necessary if the marital property rules are applied to this case.
[12] I consider that the proper law of the issue is to be resolved on the basis that this
is a claim in equity.
[13] What then are the choice of law rules that apply to the claim?
[14] I accept the rules set out in Dicey and Morris on the Conflict of Laws, 12th ed.
(L. Collins, ed.) (London: Stevens, 1993), at p. 1471, dealing with a claim to restore the
benefit of an enrichment where the issue does not involve land and the obligation does
not arise in connection with a contract:
… its proper law is the law of the country where the enrichment occurs.
[15] This is similar to the test described in J.-G. Castel, Canadian Conflict of Laws,
4th ed. (Toronto: Butterworths, 1997), at p. 637-638:
The obligation to restore the benefit unjustly obtained [is] an independent obligation which
does not arise from the volition of the parties. It is governed by the proper law of the obli-
gation, that is, the law of the legal unit with which the obligation to make restitution has its
closest and most real connection. …
In the absence of any previous contractual relationship between the parties, the obligation
to restore the unjust enrichment has its closest and most real connection with the law of the
legal unit where the immediate or ultimate enrichment occurred since the enrichment is at
the heart of the action.
[16] This takes us to the question of what law applies. In my view, this issue must be
remitted to trial. I say this for three reasons:
a) the decision appealed does not contain findings of fact necessary to determine the
proper law on the basis that the claim is an unjust enrichment;
b) the evidence before the trial judge is sufficiently contradictory that the facts cannot
be found on the affidavits even if I considered that this Court should make the
factual findings, which I do not; and
c) some of the information required to decide this case, such as growth of the assets
in the various jurisdictions is not found in the affidavits.
[17] For these reasons, I would grant the appeal, set aside the order of the learned
Chambers judge that the law of Hawaii applies to the claim in equity, and remit the issue
to be tried on the basis that the proper law is to be decided on the rules relating to unjust
enrichment. Further, I would deny the applications of both parties to adduce fresh evi-
dence on this appeal.
NOTE
In Christopher v Zimmerman, the British Columbia Court of Appeal considered whether to

apply the principles discussed above regarding matrimonial property to a couple who were
not formally married. To what extent do you think that a distinction should be made on the
basis of the official marital status of the parties and, if so, with reference to which law?
In the second approach to choice of law, the Alberta, Manitoba, and New Brunswick statutes
provide for the scope of application of the legislation and, in this way, create a unilateral
choice of law rule. In the case of Alberta and Manitoba, the statutes do not provide guidance
on the applicable law when they do not apply. It has been suggested that, even where the
statutory test is not met, it should still be possible for the courts in those provinces to take
jurisdiction under general jurisdictional rules and to apply the common law choice of law
rules to determine the applicable law: see Walker at para 25.2.b.
Matrimonial Property Act

RSA 2000, c M-8
3(1) A spouse may apply to the Court for a matrimonial property order only if
(a) the habitual residence of both spouses is in Alberta, whether or not the spouses
are living together,
(b) the last joint habitual residence of the spouses was in Alberta, or
(c) the spouses have not established a joint habitual residence since the time of
marriage but the habitual residence of each of them at the time of marriage was in
Alberta.
(2) Notwithstanding subsection (1), if a petition is issued under the Divorce Act (Can-
ada) in Alberta, the petitioner or the respondent may apply for a matrimonial property
order.
This section was interpreted by the Alberta Court of Appeal in PA v KA, 1987 ABCA 52, 36 DLR
(4th) 631 (reproduced in Chapter 5).
Family Property Act

CCSM c F25
2(1) Except as herein otherwise provided, this Act applies to all spouses, whether
married before or after the coming into force of this Act and whether married within
Manitoba or a jurisdiction outside of Manitoba,
(a) if the habitual residence of both spouses is in Manitoba; or
(b) where each of the spouses has a different habitual residence, if the last common
habitual residence of the spouses was in Manitoba; or
(c) where each of the spouses has a different habitual residence and the spouses
have not established a common habitual residence since the solemnization of their
marriage, if the habitual residence of both at the time of the solemnization was in
Manitoba.
For an interpretation of the predecessor to this section, see Wolch v Wolch (1980), 19 RFL (2d)
307 (Man QB), var’d (1981), 20 RFL (2d) 325 (Man CA).
By s 2.1, the Family Property Act applies to common law partners, as defined in s 1(1), who
meet the same test of habitual residence.
New Brunswick’s statute contains provisions determining when the local regime should
be applied and creating a general choice of law rule pointing to the applicability of some
other regime.
Marital Property Act

SNB 2012, c 107
46(1) Parts 1, 2 and 3 of this Act apply with respect to

(a) property rights as between spouses who maintained their last common habitual
residence in the Province, and
(b) if there has been no common habitual residence, property rights as between
spouses one of whom has maintained his or her last habitual residence in the Province.
46(2) Any spouse who is not described in subsection (1) may apply under section 44
with respect to the ownership of or right to possession of any property, including the
division of property, and the Court shall dispose of the application in accordance with
the law of the last common habitual residence of the spouses, or if there is no such resi-
dence the last habitual residence of the applicant.
46(3) In disposing of an application referred to in subsection (2), the Court, in order
to give effect to the rights of any party with respect to any property, may make any order
that it might make if Parts 1, 2 and 3 applied with respect to the rights of the parties.
In the third approach, the statutes in Newfoundland and Labrador, Nova Scotia, and Ontario
contain a general choice of law provision.
Family Law Act

RSNL 1990, c F-2
32(1) The division of matrimonial assets and the ownership of moveable property as
between spouses, wherever situated, are governed by the internal law of the place where
both spouses had their last common habitual residence, or where there is no residence,
by the law of the province.
(2) The ownership of immoveable property as between spouses is governed by the
internal law of the place where that property is situated.
(3) Notwithstanding subsection (2), where the law of the province governs the division
of matrimonial assets, the value of the immoveable property, wherever situated, may be
taken into consideration for the purposes of this Part.
To similar effect, see s 17 of the Family Property and Support Act, RSY 2002, c 83.
Matrimonial Property Act

RSNS 1989, c 275
22(1) The division of matrimonial assets and the ownership of moveable property as
between spouses, wherever situated, are governed by the law of the place where both
spouses had their last common habitual residence or, where there is no such residence,
by the law of the Province.
(2) The ownership of immoveable property as between spouses is governed by the law
of the place where that property is situated.
(3) Notwithstanding subsection (2), where the law of the Province governs the division
of assets, the value of the immoveable property wherever situated may be taken into
consideration for the purposes of a division of assets.
Family Law Act

RSO 1990, c F.3
15. The property rights of spouses arising out of the marital relationship are governed
by the internal law of the place where both spouses had their last common habitual resi-
dence or, if there is no place where the spouses had a common habitual residence, by the
law of Ontario.
To similar effect, see s 16 of the Family Law Act, RSPEI 1988, c F-2.1, and s 47 of the Family Law
Act, SNWT 1997, c 18.
On the meaning of “last common habitual residence,” see Pershadsingh v Pershadsingh (1987),
60 OR (2d) 437, 9 RFL (3d) 359 (H Ct J); Adam v Adam (1994), 7 RFL (4th) 63 (Ont Ct J (Gen Div)).
Note that the statutes in New Brunswick and Nova Scotia do not refer specifically to the
application of the “internal” law of the chosen jurisdiction, thus leaving open the possibility
of applying some concept of the renvoi: see Vladi v Vladi (1987), 39 DLR (4th) 563 (NSSC).
B. Domestic Contracts
All of the provincial and territorial statutes, at least to some degree, permit the parties to
contract out of the statutory matrimonial property regime. Certain formalities are required
and, in some instances, those requirements can be stringent: see e.g. Matrimonial Property
Act, RSA 2000, c M-8, s 38.
Questions have arisen as to what constitutes a domestic contract or marriage contract for
the purposes of entitlement under the legislation. In the following case, the British Columbia
Supreme Court considered whether a “Maher” was a marriage contract.
Amlani v Hirani
2000 BCSC 1653
SINCLAIR PROWSE J:
[1] In this Rule 18A application, the Plaintiff, Mr. Amlani, is seeking an Order for
Divorce and an Order that all the claims for corollary relief be adjourned generally.
[2] Further, he is seeking a Declaration that the Marriage Contract, that he and the
Defendant, Ms. Hirani, made during their religious wedding ceremony, does not consti-
tute a marriage agreement under s. 61 of the Family Relations Act, R.S.B.C. 1996, c. 128
[now Family Law Act, SBC 2011, c 25, s 92].
• • •
[10] To put this application in context, the parties were married in a civil ceremony
on August 31, 1997. Subsequent to that, on June 13, 1998, they went through a religious
marriage ceremony. During their religious marriage ceremony, (as is the custom in the
Ismaili faith to which they are both adherents) they entered into a marriage contract (the
“Marriage Contract”).
[11] Pursuant to the terms of the Marriage Contract, Mr. Amlani agreed and under-
took to pay an agreed sum of money by way of “Maher” (also spelled “Mehr”) to Ms.
Hirani. Ms. Hirani confirmed her acceptance of the agreed sum of money by way of
Maher. (For convenience, a copy of the Marriage Contract has been attached to these
Reasons for Judgment as Schedule A).
[12] The issue raised in this hearing pertaining to the Marriage Contract was whether
it constituted a marriage agreement for purposes of s. 61 of the Family Relations Act.
[13] Specifically, s. 61(2) of the Family Relations Act provides that:
61(2) A marriage agreement is an agreement entered into by a man and a woman before
or during their marriage to each other to take effect on the date of their marriage or on the
execution of the agreement, whichever is later, for
(a) management of family assets or other property during marriage, or
(b) ownership in, or division of, family assets or other property during marriage, or
on the making of an order for dissolution of marriage, judicial separation or a declaration
of nullity of marriage.
[14] The facts in this case do not involve the situation described in s. 61(2)(a) of the
Family Relations Act, namely, the management of family assets or other property during
the marriage.
[15] Therefore the issue in this hearing was whether the Marriage Contract met the
requirements of a marriage agreement as described in s. 61(2)(b) of the Family Relations
Act.
[16] That is, is the Marriage Contract:
a) an agreement entered into by a man and a woman;
b) before or during their marriage to each other;
c) to take effect on the date of their marriage or on the execution of the agreement,
whichever is later;
d) for ownership in … other property;
e) during the marriage or on the making of an order for dissolution of the marriage,
judicial separation or a declaration of nullity of marriage.
[17] Addressing each of these requirements individually, the Marriage Contract was
made between a man and a woman. Specifically, it was made between Mr. Amlani and
Ms. Hirani.
[18] With respect to the requirement that the agreement be entered into before or
during their marriage, as was set out earlier in these Reasons for Judgment, Mr. Amlani
and Ms. Hirani entered into the Marriage Contract during their marriage. In particular,
they made it during their religious wedding ceremony which occurred approximately ten
months after they had been married in a civil ceremony.
[19] As far as the requirement that the agreement take effect on the date of the mar-
riage, or upon execution of the agreement, whichever is later, as is set out in the Marriage
Contract itself, it was to take effect upon execution. The wording of the contract itself
(which is all present tense) and the Official Note which is located at the bottom of the
Contract support this conclusion. In particular, in the Official Note, the Kamadia of his
Highness Prince Aga Khan Shia Imani Ismailia Jamat acknowledged, at the time of the
religious wedding ceremony, that the parties “who of their own free will and volition have
signed the foregoing Marriage Contract in our presence, are hereby declared married in
accordance with the Shia Imami Ismaili Tariqa. The said Contract has been signed by the
said parties in our presence after they have accepted all the conditions therein.”
[20] With respect to the requirement that the agreement provide “for ownership …
in other property,” the Marriage Contract pertains to Ms. Hirani’s ownership in the
Maher/Mehr Amount. Specifically, Mr. Amlani agreed and undertook “to pay an agreed
sum of money by way of ‘MAHER’ to my said wife.” Ms. Hirani, in turn, confirmed her
“acceptance of the agreed sum of money by way of Maher.” These terms establish that the
ownership of the Maher/Mehr Amount was to vest in Ms. Hirani.
[21] In this hearing, Mr. Amlani relied on the cases of Irving v. Irving (1988), 17 R.F.L.
(3d) 318 (B.C.C.A.) and Barrett v. Todoruk, [1992] B.C.J. No. 2718 (Q.L.) (S.C.), for sup-
port for the proposition that to constitute a marriage agreement under s. 61 of the Family
Relations Act the subject of that agreement had to be a family asset. As the Maher/Mehr
Amount did not constitute a family asset, he argued, the Marriage Contract was not a
marriage agreement.
[22] Section 61 of the Family Relations Act pertains to both “family assets” and “other
property.” To fall under this Section, the applicant must demonstrate that the agreement
pertains to one or the other. In the Irving case, the subject of the purported marriage
agreement was a family asset, namely, the family home. The ratio of that case, however,
was not that marriage agreements are limited to family assets. To the extent that the Bar-
rett case cites this as the ratio of Irving with respect that conclusion is in error.
[23] In the present case Ms. Hirani is not contending that the Maher/Mehr Amount
is a family asset as it does not fall within that definition as set out under s. 58 of the Family
Relations Act. Rather, she contends that the Maher/Mehr Amount constitutes “other
property”—that is property that would not otherwise be a family asset. The Maher/Mehr
Amount falls within that definition. That is, this is “other property” as described in s. 61.
[24] Given those conclusions, I am satisfied that Ms. Hirani has established this
requirement of s. 61(2)(b) of the Family Relations Act.
[25] With respect to the last requirement (that the ownership in the “other property”
occur during the marriage or upon the dissolution of the marriage), the Marriage Contract
itself does not specify when the Maher/Mehr Amount is to be paid. Rather, it simply refers
to Mr. Amlani agreeing to pay, and Ms. Hirani accepting the payment, “by way of Maher.”
[26] Although an inference could perhaps be drawn from the wording of those terms
that these monies were payable immediately, given that both of the parties agree that the
monies are (in any event) payable upon the breakdown of the marriage for purposes of
this application, I have concluded that it is not necessary to determine if any inferences
can be drawn from the terms of the Contract itself.
[27] With respect to these monies being payable upon the dissolution of the marriage,
in her affidavit sworn on March 20, 2000, Ms. Hirani testified that “[t]he Mehr Amount
is the amount that must be paid to me by the Plaintiff either upon the marriage or the
marriage breakdown, including a divorce. It is security for the wife and children, if any.”
[28] In his affidavit sworn on November 30, 1999, Mr. Amlani testified that “the Mehr
amount is a traditional custom of Muslim law that was intended to provide financial
compensation for a wife and children in the event of a marriage break-up. Muslim reli-
gious law did not allow a wife to pursue support for herself and any children, nor any
rights to property.”
[29] Although in his Examination for Discovery, Mr. Amlani testified that the Maher/
Mehr Amount was only payable if the wife was without civil remedies when the marriage
broke down (See: Questions 330 and 336), he did not include evidence of this limitation
in the evidence that he presented during this hearing. In any event, I was not satisfied
that the evidence in this case proved the existence of such a limitation.
[30] That is, the contention that is Maher/Mehr Amount was only payable in the
absence of civil remedies being available to Ms. Hirani directly contradicted his obliga-
tions as set out in the Marriage Contract. In particular, in the Marriage Contract Mr.
Amlani agreed, confirmed, and declared that his “undertaking to pay the agreed sum of
money by way of Maher to my said wife shall be in addition and without prejudice to and
not in substitution of all of my obligations provided for by the laws of the land.”
[31] Moreover, the contention that the Maher/Mehr Amount was only payable in the
absence of civil remedies for Ms. Hirani is inconsistent with the circumstances in this
case. That is, these parties were married in the United States. (Ms. Hirani is an American
citizen.) As a married couple, they lived in British Columbia. (Mr. Amlani is Canadian).
In both of these jurisdictions, Ms. Hirani has civil remedies available to her. If the payment
of the Maher/Mehr Amount only applied in the absence of civil remedies, as suggested
by Mr. Amlani in his Examination for Discovery, there would have been no reason for
these parties to have entered into the Marriage Contract.
[32] With respect to whether the evidence proves that it was a term of the Marriage
Contract that the Maher/Mehr Amount was payable upon the dissolution of the marriage,
I have concluded that term has been proven.
[33] As was set out in Gallen v. Butterley (1984), 53 B.C.L.R. 38 (C.A.) and Ahone v.
Holloway (1988), 30 B.C.L.R. (2d) 368 (C.A.), the parol evidence rule is not absolute and
evidence of oral terms may be admitted to prove additional terms to a written contract.
[34] This additional term (namely, that the Maher/Mehr Amount is payable upon the
dissolution of the marriage) does not contradict any of the written terms of the Marriage
Contract. Further, both of the parties agreed that at the very least the Maher/Mehr
Amount is payable upon the breakdown of the marriage. (Ms. Hirani testified that it can
also be paid during the marriage).
[35] Given these circumstances and this evidence, I have concluded that the Maher/
Mehr Amount being payable upon the breakdown of the marriage is a term of the Mar-
riage Contract.
[36] Having reached this conclusion, I am satisfied that the Marriage Contract met
the last requirement.
[37] As the Marriage Contract meets all of the requirements of s. 61(2)(b) of the
Family Relations Act, I am satisfied it constitutes a marriage agreement for purposes of
that section.
NOTES
1. The Ontario Superior Court of Justice made a similar determination in Ghaznavi v

Kashif-Ul-Haque, 2011 ONSC 4062, in which it was argued that a Maher was a religious con-
tract that did not give rise to agreements enforceable at law. See Fareen L Jamal, “Enforcing
Mahr in Canadian Courts” (2013) 32 Can Fam LQ 97.
2. The religious dimensions of domestic contracts were also considered by the Supreme
Court of Canada in Bruker v Markovitz, 2007 SCC 54, [2007] 3 SCR 607, in which a women
sought damages from her former husband for failing to provide her with a religious divorce
despite undertaking to do so in a separation agreement. She alleged that his 15-year delay
prevented her from remarrying. He argued that the agreement was unenforceable at law
and his right to religious freedom protected him from paying damages for its breach. The
court held that the promise to provide a get was part of a voluntary exchange of commit-
ments intended to have legally enforceable consequences, not something that required the
court to determine doctrinal religious issues.
3. Note that regardless of the validity of the agreement, in many jurisdictions a domestic
or marriage contract is by no means conclusive and the court retains a broad discretionary
power to divide property otherwise than in accordance with the agreement: see e.g. Family
Law Act, SBC 2011, c 25, s 93.
4. As these cases suggest, the allocations of rights and responsibilities pursuant to a dif-
ferent regime is generally permitted in the context of domestic agreements and a marriage
contract will not be invalid merely because it is stated to be governed by a law different from
that of the forum. In Porter-Conrad v Conrad, [1999] BCJ No 2017 (QL) (SC), counsel for the
plaintiff was unable to persuade the court to set aside the contract for this reason. As the
British Columbia court noted, “[t]he effect of this agreement does no more than say the
Alberta legislation is to apply, a matter that would not be in issue had the parties not moved
to this province.” The court went on to say:
[28] I conclude the parties fully understood the nature of the agreement. It is not possible
for the court to say that Alberta law, the law the parties chose, is unfair. The law does not
become unfair merely because they move to British Columbia. I conclude the agreement is a
valid contract and it is procedurally and substantively fair. In the result, the Matrimonial Property
Act of Alberta is the legislation to be applied to the distribution of assets in this case.
Turning to the application of foreign law to the question of validity, in Friedl v Friedl, 2008
BCSC 1222, aff’d 2009 BCCA 314, the British Columbia courts applied German law to deter-
mine that a pre-nuptial agreement, which excluded provisions of German law providing for
the equal division of property acquired during the marriage, was invalid and hence inapplic-
able. The courts applied German law as the proper law of the marriage agreement by virtue
of an express choice of law clause.
Friedl v Friedl
2009 BCCA 314
LEVINE JA (Newbury and Groberman JJ concurring):
Introduction
[1] Dr. Hans Peter Friedl appeals from the order of a justice of the Supreme Court
dividing the parties’ assets in accordance with s. 65 of the Family Relations Act, R.S.B.C.
1996, c. 128 (“FRA”) [now Family Law Act, SBC 2011, c 25, s 92]. The principle question
on the appeal is whether the trial judge erred in interpreting and applying expert evidence
of German law in finding that the parties’ pre-nuptial agreement made in Germany before
their marriage (the “Agreement”) was invalid.
[2] The trial judge’s reasons for judgment may be found at 2008 BCSC 1222.
[3] In my opinion, the trial judge made no error in interpreting the expert evidence
of German law, or in applying it in finding the Agreement was invalid. It is therefore not
necessary to address other arguments raised by the appellant concerning the application
of British Columbia law to the Agreement and the division of the parties’ assets on the
breakdown of their marriage. It follows that I would dismiss the appeal.
Background
[4] The parties entered into the Agreement immediately before their marriage, when
Ms. Friedl was four months pregnant with their first child. The Agreement was executed
before Dr. Jung-Heiliger, a notar in Liepzig, Germany. The Agreement provided for “the
marital property regime of the separation of property,” and that it would be interpreted
pursuant to German law. Under the “default” matrimonial property regime provided in
German statute law, the net gain from assets acquired by either spouse during the marriage
is evenly divided on marriage breakdown. Thus, under the Agreement, these provisions
of German law were excluded. The Agreement also dealt with inheritances, pensions and
spousal support, which were not in issue at trial and about which no issue is raised on
the appeal.
[5] The parties were married in Michigan in 1997, and lived in Germany until 2001,
when they moved to Kamloops. They have two children, a daughter born in 1997, and a
son born in 1999. They separated in 2006.
[6] The appellant had practised as an orthopaedic surgeon in Germany, but did not
practise in Canada. Prior to the marriage, he had acquired property in Germany, Switzer
land, and Michigan. After the marriage, he purchased additional property in Michigan,
homes in Germany and Kamloops, a ranch at Hyas Lake, near Kamloops, registered in
Friedl Development Ltd., property at Clearwater, BC, and an interest in a business,
“Proair,” purchased through Friedl Holdings Inc.
[7] The respondent was a physiotherapist before the marriage. She stopped working
shortly after, and by agreement of the parties, did not work outside the home throughout
the marriage but looked after the children and the household. Her credentials as a phys-
iotherapist in Germany were not recognized in Canada. When the parties separated, she
owned no property in her name.
[8] The respondent commenced divorce proceedings in British Columbia Supreme

Court in February 2006, claiming reapportionment of the family assets under s. 65 of the
FRA. In his statement of defence and counterclaim, the appellant claimed that the Agree-
ment governed the division of the parties’ assets, and that German law applied. In her
defence to the counterclaim, the respondent took the position that the Agreement was void
or voidable on the grounds of duress, undue influence, unconscionability, and unfairness.
[9] The appellant commenced a divorce action in Germany in March 2006. In March
2007, Judge Lips of the Family Court, District Court of Schoneberg, Germany, held that
the BC Supreme Court had undisputed jurisdiction over the divorce proceedings. The
appellant’s appeal from that decision was dismissed by the German Court of Appeal in
December 2007.
Trial Judge’s Reasons for Judgment

[10] The 16-day trial covered a wide range of issues between the parties. The parties’
evidence concerning the circumstances surrounding the creation of the Agreement varied
significantly. The trial judge made strong credibility findings against the appellant gener-
ally, and approached his assessment of the validity of the Agreement from that perspective
(at para. 30).
[11] Because the Agreement provided that it was governed by German law, the trial
judge referred to the evidence, in the form of two reports of a German law professor,
Professor Dieter Henrich, concerning the manner in which a German court would review
a marriage agreement, and the role of a German notar under German law generally and
in relation to the execution of marriage agreements. The reports had been obtained by
the appellant, but were put in evidence by the respondent.
[12] On the appeal, the appellant questions whether the first report was properly
admitted into evidence. From the record, there can be no doubt that it was, and it is not
necessary to deal with that issue further.
[13] After reviewing the evidence of Prof. Henrich, the trial judge concluded that,
despite the role of the notar, the respondent had not received independent legal advice
(at para. 39), and that the process that would be undertaken by a German court in assess-
ing the circumstances surrounding the execution of a marriage agreement where one of
the parties claimed it was unenforceable appeared to be similar to the approach that would
be followed in British Columbia (at para. 48).
[14] He found the following circumstances to have been proved by the respondent,
which bore on the validity of the Agreement (at para. 49):
(a) that Ms. Friedl did not see the proposed Marriage Agreement until she attended the
notar’s office in Leipzig on December 23, 2006;
(b) that Ms. Friedl did not have the opportunity to review the proposed Marriage Agree-
ment with her father or brother or both;
(c) that Ms. Friedl lacked the opportunity to review the terms of the proposed Marriage
Agreement with a lawyer of her own choosing and did not receive independent legal
advice as to the ramifications of her entering into the Marriage Agreement;
(d) that Dr. Friedl was more sophisticated in business, investments and property dealings
than Ms. Friedl and that she would have benefited from receiving independent legal
advice before signing the Marriage Agreement;
(e) that Dr. Friedl directed the preparation of the Marriage Agreement with legal advice
he received from his counsel, Mr. Schoning and his sister, Ms. Friedl-Schoning;
(f) that Dr. Friedl scheduled an appointment with the notar during a brief visit by the
parties to Leipzig with the time constraints precluding Ms. Friedl from fully reviewing
and discussing the Marriage Agreement to assist her in understanding its terms;
(g) that although the notar read the Marriage Agreement to Ms. Friedl I accept Ms. Friedl’s
testimony that she did not comprehend the implications of the terms of the Marriage
Agreement;
(h) that the Marriage Agreement was signed at a time when Ms. Friedl was stressed from
having to fly from Zurich to Leipzig and back to Zurich to sign the Marriage Agreement
on December 23 before she and Dr. Friedl flew to Michigan on December 25 where
they anticipated being married before the end of December, although the marriage did
not actually occur until January 3, 1997;
(i) that in December 1996 Ms. Friedl was pregnant, although no mention of her pregnancy
appears in the Marriage Agreement, nor is there any evidence that the notar was aware
of her pregnancy, a condition that is a significant but not conclusive factor for a German
court when assessing the validity of a Marriage Agreement according to Prof. Henrich;
(j) that at the time of signing the proposed Marriage Agreement Ms. Friedl was in the fifth
month of her pregnancy and suffering the stresses of pregnancy including tiredness;
(k) that Dr. Friedl told Ms. Friedl that he would not marry her unless she signed the Mar-
riage Agreement, a factor which is particularly relevant when considering the arrange-
ments in place for the marriage to occur soon after in the U.S.;
(l) that Ms. Friedl did not want her child to be born out of wedlock;
(m) that Dr. Friedl knew of Ms. Friedl’s pregnancy when the Marriage Agreement was being
drafted and later signed;
(n) that if the marriage foundered the Marriage Agreement, according to Prof. Henrich
provides for Dr. Friedl, whose income at the time was approximately $750,000 a year,
to pay minimal but not unconscionable support provisions to Ms. Friedl, but excluded
any responsibility to pay sickness and old-age support;
(o) that throughout the parties’ relationship, Dr. Friedl controlled and dominated Ms.
Friedl, particularly in an economic sense because soon after their marriage Ms. Friedl
terminated her employment due to her pregnancy, thereby losing the financial in-
dependence provided by that employment; and
(p) that the Marriage Agreement provided Ms. Friedl would receive 10,000 Deutsche
Marks, worth approximately $6,880 for every year of the marriage, a total of $62,000,
a pittance given Dr. Friedl’s 1996 income of $750,000 a year and the fact that Ms. Friedl
would be precluded from pursuing her own career and earning her own income as she
was to be out of the work force while she raised the parties’ two children and managed
the family’s home.
[15] The trial judge held (at para. 52) that in light of these factors the respondent had
established on a balance of probabilities that the appellant had obtained her signature on
the Agreement by duress, coercion or undue influence, rendering its terms invalid and
unenforceable. He held that the Agreement was null and void whether the situation is
considered under the law of Germany or that of British Columbia.
[16] He went on to hold (at para. 53) that because the Agreement was null and void,
this also included the choice of law clause which stated German law would govern the par-
ties’ termination of marriage. He held that it was therefore appropriate to apply the law
of British Columbia given the family’s substantial property ties and other links to the
Province, and applied Part 5 of the FRA to the division of their assets.
Issues on Appeal
[17] The appellant claims that the trial judge erred in setting aside the Agreement. He
argues that the trial judge misapprehended the expert evidence of German law concerning
the process that would be undertaken by a German court in reviewing a marriage agree-
ment, and misunderstood the function of a notar in German law.
[18] The appellant argues further that the trial judge erred in concluding on the facts
that the respondent had established duress, coercion, or undue influence.
Analysis
Application of German Law
[19] The Agreement provided that German law was to be applied “[f]or our marriage
as well as in case of its termination.” The parties’ agreement that German law applied
required that the validity of the Agreement be determined in accordance with German
law: see Tezcan v. Tezcan (1992), 38 R.F.L. (3d) 142 at paras. 65-66, 62 B.C.L.R. (2d) 344
(C.A.).
[20] For the purpose of applying foreign law, a BC court must rely on the evidence of
an expert competent to explain and interpret the foreign law, and the judge’s conclusion
on the foreign law is a finding of fact: see Buerger v. New York Life Assurance Co. (1927),
96 L.J.K.B. 930 at 939-943 (C.A.); Tezcan, at paras. 61-62.
[21] Despite these well-established principles for the application of foreign law, there
is authority that in certain circumstances a court must make its own decision as to that
law by examining the statutes and cases relied on by the foreign experts (see Sarabia v.
Oceanic Mindoro (The) (1996), 26 B.C.L.R. (3d) 143 at para. 11 (C.A.), where the experts
gave conflicting opinions as to the foreign law), and that the proper standard of appellate
review of a trial judge’s decision as to the foreign law is correctness, not palpable and
overriding error (see General Motors Acceptance Corp. of Canada, Ltd. v. Town and Coun-
try Chrysler Ltd. (2007), 88 O.R. (3d) 666 at paras. 28-35 (C.A.) [“GMAC”], where the
trial judge did not rely on the expert evidence but came to his own conclusion concerning
the foreign (Quebec) law).
• • •
Review of the Agreement

[30] Prof. Henrich’s two reports addressed the process a German court would under-
take in reviewing a marriage agreement. The parties are in agreement that, in both of his
reports, he spoke of a “two-stage process,” the first concerning the validity or effectiveness
of the agreement, and, if the agreement is determined to be valid, the second being an
examination of whether a party acts unconscionably in relying on the agreement at the

time of the divorce. The parties also agree that at the first stage, the court reviews the
various terms of the agreement to determine if any of them is “unethical”; the court will
review more strictly the “core areas of the consequences of divorce”; the “core areas of the
consequences of divorce” include support and pension rights but do not include marital
property; a separation of property regime will not, by itself, be considered illegal, and
therefore will not be the basis for finding an agreement to be invalid; and the first stage
includes an “overall assessment” of the circumstances of each of the spouses at the time
of execution of the agreement.
[31] The appellant says that the trial judge erred in three ways in considering the
factors that a German court would consider at the first stage of the review, and that the
error resulted from a misunderstanding or misapprehension of the differences between
Prof. Henrich’s first and second reports.
[32] First, the appellant says that while in the first report Prof. Henrich, in addressing
review generally, may have indicated that in considering the validity or effectiveness of
the agreement at the first stage, a German court will consider the marital property regime
as well as the other provisions of the agreement, he made it clear in his second report that
the German court will only review those provisions that fall within one of the “core areas
of the consequences of divorce.” Thus, the appellant says, when the trial judge (at para. 41)
referred to “marital property” as one of the “core areas,” he was not only mistaken, but
demonstrated his misunderstanding of Prof. Henrich’s evidence.
[33] Second, the appellant argues that the trial judge erred in taking into account the
respondent’s pregnancy in assessing the validity of the marital property provisions of the
Agreement, as Prof. Henrich’s second report made it clear that a woman’s pregnancy at
the time of execution of a marriage agreement is only relevant in assessing the effective-
ness of the provisions concerning the “core areas.”
[34] Third, the appellant takes issue with the trial judge’s reference to the judgment
of Judge Lips of the German Family Court in the litigation between these parties, as it
was not referred to in the expert evidence. The trial judge quoted from the translation of
Judge Lips’ judgment in the portion of his reasons for judgment in which he discussed
the jurisdiction of the BC Supreme Court (at para. 14). He underlined Judge Lips’ refer-
ence to marriage agreements bearing “close examination as regards content … according
to prevailing German case law.” Later in his reasons for judgment, after reviewing Prof.
Henrich’s evidence, the trial judge stated (at para. 47):
… However, as I interpret Prof. Henrich’s opinion, together with District Judge Lips’ March
9, 2007 decision, it is open for a German court, and thus this court, to consider the circum-
stances surrounding the making of a Marriage Agreement to determine its validity and
enforceability. I construe from the remarks of both Prof. Henrich and Judge Lips that if the
circumstances include coercion, duress or undue influence by one party to the agreement
over the other party, such as to leave the former in an advantageous position and the latter
in a disadvantageous position, then it is open for the court to determine whether the agree-
ment is valid and enforceable.
[35] The question for this Court is whether the trial judge made a palpable and over-
riding error in interpreting Prof. Henrich’s reports, leading him to err in concluding (at
para. 47) that it was open to him to consider the circumstances surrounding the making
of the Agreement, and if the circumstances include coercion, duress or undue influence,
that it was open to him to determine whether the agreement was valid and enforceable.
[36] The trial judge’s errors in referring to marital property as one of the “core areas
of the consequences of divorce,” and to Judge Lips’ decision as authority for German law
on the review of marriage agreements, are not “palpable and overriding errors,” in that
they did not play a material role in his interpretation and application of German law as
described in Prof. Henrich’s reports. The trial judge was clear that what he took from Prof.
Henrich’s reports was that a German court would “consider the circumstances surround-
ing the making of a Marriage Agreement to determine its validity and enforceability.”
Such a review was clearly described by Prof. Henrich in both of his reports as part of the
first stage of review, the “overall assessment” of the spouses’ individual circumstances at
the time of execution of the agreement. Prof. Henrich was clear, and the trial judge’s reasons
for judgment reflected this, that the “overall assessment” takes place after the German
court has reviewed the various terms of a marriage agreement for “effectiveness,” and that
an agreement will not be set aside only on the basis of the marital property provisions.
[37] In both of his reports, Prof. Henrich described the “individual circumstances at
the time of the execution of the agreement” as including the spouses’
… income and financial situation, the planned or already implemented set-up of their mar-
riage, as well as the effects on the spouses and their children. The goals intended by the spouses
with their agreement and other reasons that motivated the advantaged spouse to call for the
respective provision/agreement and that caused the disadvantaged spouse to comply with
this request must be taken into account. [citation omitted]
[38] In his first report. Prof. Henrich went on, as part of the same paragraph, to refer
to the wife’s pregnancy. He said:
… In such a context, it might be important whether the wife was in a position of constraint.
If, for example, a pregnant woman has only agreed to the execution of a contract that is
significantly disadvantageous for her since the husband would have refused to marry her
without such a marriage contract, the contract can be assumed to be unconscionable [citation
omitted]. However, the wife’s pregnancy upon the execution of the agreement alone is not
sufficient in order for the contract to become void. However, the pressure to execute the
agreement that has been exerted on her which takes advantage of her pregnancy is an indi-
cation of the wife’s negotiating position being weaker and should be a reason to intensify the
legal review. [citation omitted, emphasis added]
[39] In the second report, Prof. Henrich discussed the implications of pregnancy in
a separate section under the heading “Fairness at the time the prenuptial agreement was
entered into.” This was in response to specific questions put to him by appellant’s Canadian
counsel under that heading. Here he said:
b) The wife’s pregnancy at the time of the execution of the contract does not change the
existing legal situation. It can, however, be indicative of an unequal negotiation position at
the time of the contract execution, which would warrant a closer examination of the contract
contents [citations omitted]. Should the husband have taken advantage of the wife’s pregnant
condition to coerce her into accepting an agreement that either completely or to a significant
degree excludes rules falling under the core area of the law on the consequences of the
divorce, whereby this disadvantageous position of the wife is neither softened through other
advantages nor justified through the spouses’ special situation, the type of marriage envi-
sioned or lived by them, nor through other notable needs of the husband, this may be
regarded as unethical and can thus result in the agreement being declared nil [sic] and void
[citations omitted]. The important question in this context is: Would the wife have refrained
from entering into this agreement or an agreement with these terms if she had not been
pregnant? [emphasis added]
[40] In the first report, Prof. Henrich was referring to the “overall assessment” of the
circumstances surrounding the execution of the agreement, which the German court
engages in as part of the process of determining whether an agreement is valid. In the
second report, Prof. Henrich was referring to the fairness of the agreement, not its validity.
In either case, however, Prof. Henrich notes that it is a relevant circumstance for the court
to consider on review of an agreement for validity that if the wife was pregnant, whether
that condition indicates that she was “in a position of constraint” or there was “pressure”
exerted on her to execute the agreement, whether the husband took advantage of her
condition to “coerce” her to accept the agreement, and whether she would have refrained
from entering into the agreement if she had not been pregnant.
[41] The respondent’s pregnancy was one of the factors the trial judge considered in
reviewing the individual circumstances of the spouses at the time of execution of the
Agreement. That was entirely consistent with Prof. Henrich’s reports, and the trial judge’s
interpretation of them.
[42] I would not accede to this ground of appeal.
The Function of a Notar in German Law

[43] The trial judge summarized the evidence of Professor Henrich concerning the
role of a notar (at para. 37):
… Prof. Henrich described notars as individuals having legal training, are qualified to hold
a judicial office, and who are appointed by the state government. Under German law a notar
dealing with a Marriage Agreement is obliged to ascertain the parties’ intentions, clarify the
factual situation, and instruct the parties about the legal implications of the agreement they
wish to execute, including making them aware of any legal concerns that the notar may have.
[44] He concluded that the notar’s role in the execution of the Agreement did not
provide the respondent with independent legal advice. He said (at para. 39):
The defence [appellant] submits that the notar’s involvement in the execution of the parties’
Marriage Agreement provides Ms. Friedl with independent legal advice and protection with
respect to the fairness of the Marriage Agreement’s terms. While I give considerable deference
to the role of the notar in the execution of marriage agreements as he is a quasi judicial officer
appointed by the state, I am not convinced that a notar is necessarily in a position to provide
a party such as Ms. Friedl with independent legal advice. A relatively short meeting, attended
by both parties without the advantage of speaking separately to each party to ascertain their
respective concerns, if any, in the absence of their prospective spouse, would appear to limit
the information available to the notar. For example, there is no evidence that the notar was
aware that Ms. Friedl was pregnant when she signed the Marriage Agreement and there is
no reference to her pregnancy in the Marriage Agreement. Dr. Friedl, on the other hand, did
have independent legal advice, from Mr. Schoning and Ms. Friedl-Schoning, who both
participated in the preparation of the terms of the Marriage Agreement that were put before
the notar.
[45] The appellant says that the trial judge failed to appreciate Prof. Henrich’s descrip-
tion of a notar’s duties that are mandated by statute and directly relevant to the prevention
of coercion, duress or undue influence, including the following:
The Notar must “ensure that inexperienced and unskilled parties are not put at a disadvantage.”
“If the Notar has any doubts regarding the lawfulness of the transaction … he has to
include his instructions and the respective declarations of the parties in the record.”
The Notar “must explain to [the parties] the meaning and implications of the prenuptial
agreement …”
[46] The appellant argues that it must be presumed that the notar carried out his
statutory duties, and that displaces the requirement of BC law for independent legal
advice. He suggests that the respondent’s evidence that she did not understand the impli-
cations of the agreement when it was read to her by the notar amounts to accusing the
notar of a “gross dereliction of duty,” and that his signature attesting to carrying out his
statutory duties was “fraudulent.” He also claims that the trial judge’s conclusion that the
notar’s role did not amount to independent legal advice was wrongly based on “forum-
centric jurisprudence,” and was effectively a finding that “a foreign quasi-judicial official
was guilty of serious misconduct in office.”
[47] The appellant’s arguments are somewhat hyperbolic. The trial judge did not doubt
that the notar carried out his statutory duties. He concluded, however, taking into account
all of the circumstances surrounding the execution of the Agreement, including the short
duration of the meeting with the notar preceded and followed by flights from Zurich to
Leipzig and back, the lack of a meeting between the notar and the respondent separately
from the appellant, and the lack of an opportunity for the respondent to review drafts of
the Agreement before the meeting, that the notar’s functions did not satisfy him that the
respondent had been given the equivalent of independent legal advice. It was the appellant
who submitted to the trial judge that the notar’s function was analogous to the function
of independent legal advice in assuring that an agreement is not executed in circumstances
of coercion, undue influence, or duress.
Coercion, Duress or Undue Influence

[49] The appellant argues that the trial judge erred in concluding, on the facts as he
found them, that the respondent had established coercion, duress or undue influence. He
suggests that there was no expert evidence of the application of those concepts in German
law, and the respondent therefore failed to meet her burden of proof.
[50] The concepts of coercion, duress, and undue influence were expressly referred
to by Prof. Henrich in his reports. He noted that in determining the validity of a marriage
agreement, “it might be important whether the wife was in a position of constraint,”
whether there was “pressure” exerted on her to execute the agreement, whether the hus-
band has “taken advantage of the wife’s pregnant condition to coerce her into accepting
an agreement” [emphasis added]. Thus, the trial judge drew directly from the expert
evidence in construing Prof. Henrich’s opinions as referring to circumstances of coercion,
duress, or undue influence in the making of a marriage agreement (at para. 47).
• • •
Summary and Conclusion

[56] The trial judge did not misunderstand, or make any palpable and overriding
error, in interpreting and applying the expert evidence in respect of the process that would
be undertaken by a German court in reviewing a marriage agreement, the function of a
notar in German law, or the application of the concepts of coercion, duress, and undue
influence in determining the validity of a marriage agreement under German law. There
is therefore no basis for this Court to interfere with his conclusion that the Agreement
was invalid and unenforceable.

32 Can Fam LQ 53.
Black, Vaughan. “Tezcan v. Tezcan: Choice of Law in Matrimonial Property” (1993) 9 Can Fam
LQ 293.
McLeod, James G & Alfred A Mamo. Matrimonial Property Law in Canada (Toronto: Carswell,
1993) (loose-leaf).
Rafferty, Nicholas. “Matrimonial Property and the Conflict of Laws” (1982) 20 UWO L Rev 177.
Welling, Bruce. “Conflict of Laws Issues Arising from Matrimonial Property Statutes in Can-
ada” (1993) 9 Can Fam LQ 225.

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Private International Law in Common Law Canada Cases Texts and Materials 4th Edition Pitel

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STEPHEN G.A.

PITEL GENEVIÈVE SAUMIER

Private International Law in

STEPHEN G.A. PITEL

JOOST BLOM ELIZABETH EDINGER

GENEVIÈVE SAUMIER JANET WALKER

Emond Montgomery Publications Limited

We acknowledge the financial support of the Government of Canada.

Vice president, publishing: Anthony Rezek

Library and Archives Canada Cataloguing in Publication

Pitel, Stephen G. A., author

Includes bibliographical references.

1. Conflict of laws—Cases. 2. Conflict of laws—Canada—Cases. I. Blom, Joost, author

Pages v-vi constitute an extension of the copyright page.

Hague Conference on Private International Law Proceedings of the Seventeenth Session,

Preface to the Fourth Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

PART ONE GENERAL

Chapter Two History and Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter Three Conflicts and the Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Chapter Four Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Chapter Five Personal Connecting Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

V. The Principle of Proximity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

PART TWO JURISDICTION

PART THREE FOREIGN JUDGMENTS

PART FOUR CHOICE OF LAW: GENERAL

Chapter Ten Applying Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547

Chapter Eleven Law of Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591

IV. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608

PART FIVE OBLIGATIONS

Chapter Thirteen Contracts and Unjust Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

PART SIX PROPERTY

Chapter Fifteen Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811

Chapter Sixteen Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843

PART SEVEN FAMILY LAW

Chapter Eighteen Dissolution of Marriage and Other Unions . . . . . . . . . . . . . . . . . . . . . . . 923

Chapter Nineteen Nullity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 945

Chapter Twenty Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961

Chapter Twenty-One Matrimonial Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

Preface to the Fourth Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

PART ONE GENERAL

Chapter One Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter Two History and Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter Three Conflicts and the Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Chapter Four Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

V. Penal Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Chapter Five Personal Connecting Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Domicile and Habitual Residence Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168

PART TWO JURISDICTION

2. Defendants Outside the Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222

PART THREE FOREIGN JUDGMENTS

II. The Common Law Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394

PART FOUR CHOICE OF LAW: GENERAL

3. Following the Connecting Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517

Chapter Ten Applying Foreign Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547

C. Statutory Modes of Proof: Production of Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573

Chapter Eleven Law of Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591

PART FIVE OBLIGATIONS

McLean v Pettigrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630

Chapter Thirteen Contracts and Unjust Enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

PART SIX PROPERTY

Chapter Fifteen Movables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811

E. Relations Between the Assignee/Secured Creditor and the Debtor on the

Chapter Sixteen Succession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843