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

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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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