Staking Claims Against Foreign Defendants in Canada: Choice of Law and Jurisdiction Issues Arising from the in Personam Exception to the Mocambique Rule for Foreign Immovables


Canadian courts have struggled in distinguishing between in personam jurisdiction and subject-matter jurisdiction (and specifically the Mocambique rule). In particular, they appear to overlook the two-fold jurisdictional requirement that in order to proceed in a given case they must have both types of jurisdiction - in personam and subject-matter - and that when jurisdictional challenges arise due to the fact that the dispute deals with foreign immovables Canadian courts, influenced by the post-Morguard focus on in personam jurisdiction, are dealing with the foreign land question under the rubric of in personam jurisdiction, not under the traditional heading of subject-matter jurisdiction. Part of the problem stems from a judicial preference to apply the Mocambique rule as exclusively a legal rule, while allowing for the in personam exception as a corollary to the "real and substantial connection" test and the Muscutt factors. Professor McLeod's four pre-requisites for the in personam exception from his seminal text "The Conflict of Laws" remain a relevant doctrinal basis for establishing jurisdiction simpliciter over foreign defendants in claims involving foreign immovables. While Professor McLeod was writing about the four pre-requisites for the in personam exception in 1983, his doctrinal approach remains relevant for determining subject-matter jurisdiction over claims involving foreign immovables.

However, since Professor McLeod's first pre-requisite only addresses presence-based and consent-based jurisdiction, the court's have sometimes resorted to the Muscutt factors to assume jurisdiction over property-based claims, which offend the Mocambique rule. The Muscutt factors for assuming jurisdiction should be limited to traditional non-property claims in lieu of service-based or consent-based jurisdiction. The process of characterization is ultimately discretionary. However, the determination of jurisdiction simpliciter is not.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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