Summary:
This article explores the exceptions to the common law rule which dictates that a foreign court does not have jurisdiction to make orders relating to or concerning land (real property) in another jurisdiction. Rather than trying to squeeze a matter into one of the existing exceptions, the writer advocates that perhaps it is time for all Australian jurisdictions to follow in the footsteps of New South Wales and abolish the Mocambique Rule once and for all.
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Has the time come to abolish the Mocambique rule?
First published in Hearsay, Issue 46, 2010.
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The general rule of the private international law, commonly referred to as the “Mocambique rule”,[1] is that a foreign court does not have the jurisdiction to make orders relating to or concerning land in another jurisdiction.
In Nudd v Taylor[2] Justice Holmes (as she then was) held that the application of the Mocambique rule to foreign immovables has been accepted in Australia as between the states, between the Commonwealth and the States, and in respect of foreign states.
There is however exceptions to the Mocambique rule, which hitherto, are unfortunately not very well defined.
It is to be noted that this rule has already been abolished in New South Wales via the Jurisdiction of Courts (Foreign Land) Act 1989 (NSW). This act simply states in section 3 thereof that “The jurisdiction of any court is not excluded or limited merely because the proceedings relate to or may otherwise concern land or immovable property situated outside New South Wales.”
In all the other States, affected parties still have to resort to the murky realm of exceptions to the Mocambique rule. The two main exceptions most commonly resorted to, are the ones alluded to by Lord Hershell LC in his judgment in the Moqambique case:
- “With 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 jurisdiction as if they were situate in England.”
- “In the exercise of the undoubted jurisdiction of the Courts it may become necessary incidentally to investigate and determine the title to foreign lands.”
The first exception referred to above, known as the in personam exception, is reasonably clear. The second however, is a bit more complicated. In Nudd v Taylor Justice Holmes stated:[3]
“Plainly enough, the question of what is so fundamental as to amount to a determination of title, and what is merely incidental, is one of degree and can be difficult to resolve. In Dagi v BHP (No 2)17 Byrne J considered the rule and the second exception, concluding, “the court will refuse to entertain a claim where it essentially concerns rights, whether possessory or proprietary, to or over foreign land, for these rights arise under the law of the place where the land is situate and can be litigated only in the courts of that place. The claim must, not merely concern those rights; it must essentially concern them. This is because the rights must be the foundation or gravamen of the claim.”
Her Honour however made it clear that these are separate and independent exceptions to the Mocambique rule. Even though a claim can be found to be a determination of title or even if the proprietary rights form the gravamen of the claim, and would therefore exclude jurisdiction of the foreign court in accordance with the Mocambique rule, the foreign court will nevertheless exercise jurisdiction if there is an equitable obligation between the parties concerning the property, as was the basis of the decision in the Nudd case.[4]
The application and scope of the Mocambique rule in modern day private international law has been expounded by the High Court, Chancery Division in the more recent case of Griggs Group Ltd v Ross Evans and Anor[5] by Deputy Judge Peter Prescott QC where it was held that the in personam jurisdiction in relation to property situated abroad, has existed for at least 250 years. The ratio is that the jurisdiction is not over the property, but over the person, even though the result is to alter the ownership of foreign land.
However, proceedings which have as their primary object rights in rem in immovable property, that is to say, rights which are good as against the whole world and not just inter partes, will be caught by the Mocambique rule .
This is also in line with the modern international private law trend, as evidenced by for example Article 16(1) of the Brussels convention which provides that, in proceedings which have as their object rights in rem in immovable property, or tenancies of immovable property, the courts of the Contracting State in which the property is situate, shall have exclusive jurisdiction. But as pointed out by Peter Prescot QC, Article 16(1) turns out to be narrow, in that it only applies where the principle purpose of the proceedings is to assert rights in rem.
If determining the rights in rem turns out to be merely incidental to the main proceedings, the second exception to the Mocambique rule, as referred to herein above, could find application. The party will however first have to satisfy the court that the possessory or proprietary rights to or over the foreign land in question, do not form the foundation of the claim, but is merely incidental thereto.
In considering the salient facts in Singh v Singh,[6] it is evident that how the relief is framed, will sometimes determine whether or not any of the exceptions to the Mocambique rule, will find application. In this case two brothers were involved in a property dispute regarding the transfer of immovable property situated in Malaysia, which the one brother was supposed to hold on trust for the other, but contra thereto transferred to his own wife and daughter.
The brother for whom the property was held on trust (the respondent) brought proceedings in Western Australia against his brother and his brother’s wife and daughter (the appellants) to prevent them from further alienating the property and for an order to transfer the property back to him. All the parties were resident in Western Australia and hence the court had jurisdiction over the persons involved. But did the court have the jurisdiction to grant the relief as prayed for?
The majority held that it did, and stated that:[7]
“The case does not concern the Mocambique rule itself. The respondent’s claim falls within an exception to the rule. This is because in this case the respondent does not deny that the appellant is the legal owner of the Malaysian land, ie the registered proprietor and does not seek an in rem judgment. His complaint is that the appellant became the registered proprietor by reason of the train of events beginning in Perth, when the appellant signed a transfer of the Malaysian land, and ending with the registration of the transfer in Malaysia. It was contended that this was an alienation of property with the intent of the appellant to defraud his creditors. The respondent having become aware of the alienation of the Malaysian property elected to exercise his right to avoid the alienation based on his allegation that the appellant had the intent to defraud. In the Supreme Court, he asks for declarations concerning the conduct of the appellant and the other defendants and in personam relief against the defendants. If the respondent’s claims are upheld then the court will ‘act upon the conscience’ of the appellant and his wife and daughter. The jurisdiction is not over the property but over the person of each of the defendants.”
It therefore appears that the general rule of the private international law that a foreign court does not have the jurisdiction to make orders relating to or concerning land in another jurisdiction, has rather become the exception, than the norm, seeing that it is strictly limited to those proprietary claims in rem that form the gravamen or foundation of the claim.
With the Mocambique rule still in place, affected parties in all states, except for New South Wales, who want to approach a local court for relief re foreign land, are still forced to resort to the murky realm of exceptions to the Mocambique rule and to carefully draft the relief sought in such a way as to bring it in line with one of the accepted exceptions, just in order to clear the jurisdiction hurdle. The question can therefore legitimately be asked: “Has the time not come for Queensland to abolish the Mocambique rule?”
WJ Kilian
20 August 2010
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[1] As formulated in the case of British South Africa Co v Companhia de Mocambique [1893] AC 602 (Moqambique case).
[2] [2000] QSC 344.
[3] At paragraph [10].
[4] See par [14] of the judgment.
[5] [2004] EWHC 1088 (Ch).
[6] (2009) WASCA 53.
[7] At paragraph 22.