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On Time and Place in Choice of Law for Property
Published online by Cambridge University Press: 17 January 2008
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John takes Mary for a romantic evening walk in Covent Garden and declares that a diamond he owns, which is in a vault in France, is now hers. One month later, without having received the diamond, Mary leaves John for another. Within a year, John has engaged himself to Jane, upon whom he also bestows the diamond. John and Jane spend their honeymoon in Paris and, while they are there, John ‘delivers’ the diamond to Jane. Mary sues Jane in England for conversion and asks that Jane be ordered to return the diamond to her. According to English law, the transfer of title by way of gift depends on delivery.1 Thus, since only Jane took delivery, she has title and Mary's claim will be dismissed. In French law, by contrast, property in a gift passes without delivery.2 As a result, Mary has title to the diamond and Jane is holding it unlawfully. The case turns exclusively on the choice-of-law question, ‘Which law should govern?’
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References
1 Irons v Smallpiece (1819) 2 B & Aid 551; Cochrane v Moore (1870) 25 QBD 57 CA; re Cole (a Bankrupt) exparte Trustee v Cole [1964] Ch 175 CA.
2 Art 938, Code Civil.
3 This rule assumes that every piece of property has an identifiable situs or an attributable situs. It requires a special formulation of the rule for property in transit, and an attribution of a situs for intangible property. Most systems have dealt with these problems in ways similar to those described in Cheshire and North, Private International Law (13th edn 1999 by North and Fawcett), at 955.
4 All these considerations are mentioned by Grodecki in his comparative study, ‘Intertemporal Conflict of Laws’, 3 International Encyclopedia of Comparative Law, ch 8, para 60.
5 (13th edn 2000, ed Lawrence Collins), Rule 116. See also Grodecki, Ibid. For recent consideration, confirmation and application of this rule, see Glencore International AGv Metro Trading International Inc [2001] 1 Lloyds Rep 283.
6 Unless the lex situs attaches importance to them. If there is one area in which the renvoi should be accepted, it is the area of property (see Dicey and Morris, op cit above, paras 4–023, 4–024, 24–007).
7 If French law permits people to contract out of its provisions, expressly or implicitly, the question whether the parties did indeed contract out will, of course, be taken into account.
8 To the extent that the transaction of gift is contractual. On the relevance of the lex contractus to proprietary issues, see Glencore International AG v Metro Trading International Inc [2001] 1 Lloyds Rep 283. Even where it is not considered a contract, it is probable that the lex causae would in this case be English law since all the relevant contacts are to England.
9 Dicey and Morris, op cit above, Rule 117. See also Grodecki, op cit above on the universality of this rule.
10 Winkworth v Christies, Manson & Woods Ltd [1980] Ch 496.
11 Dicey and Morris, op cit above, Rule 117.
12 On the question how we determine who had title in the intervening period, see below.
13 Batiffol, Droit International Privé (7th edn 1983), para 511.
14 Clearly, were the question ‘Who has title?’ to arise in an English court before any acquisitive event takes place, the court would say that title rests in whoever acquired it under the law of A. But the court's willingness to recognise a right acquired under the law of B which could not have been so acquired under the law of A cannot mean anything but that the crossing of the border had a ‘diminishing’ effect on the title acquired in A. Similarly, were property to be transferred from A to B by a person who had acquired title in A, where title is subject to market overt, and in B, there is no doctrine of market overt, subsequent acts which would transfer title under law A, might be regarded as having no effect at all. Again, if asked prior to those acts what kind of title the holder exercised, a court would refer to the law of A. But the fact that the law of B would not recognise a subsequent transfer cannot but mean that crossing the border ‘envigorated’ the title and immunised it from certain kinds of divestitive acts.
15 This solution requires proving the choice of law rules of the present situs and not just the property rules of the law of the original situs. This additional burden is one disadvantage of the proposed solution. But, of course, only the person wishing to rely on those rules will have to prove them. In the absence of such proof, the court will make do with the proof offered by the opposing party of the law of the original situs or, despite the fact that the issues is property, will perhaps rely on the presumption of similarity of laws and apply the lexfori.
16 It is not immediately clear where the conversion should be regarded as having taken place. It is not only wrongful taking of the property but also wrongful withholding of the property which constitutes conversion. But for the purposes of this discussion we can assume that Mary chooses to sue on the basis that the conversion took place in England, if only in part because under Ruritanian law she has no cause of action, and that this position is accepted. The alternative assumption, that the conversion took place in Ruritania, is discussed below.
17 Private International Law (Miscellaneous Provisions) Act 1995, Part III.
18 Here too, unlike the area of obligations, it is possible to issue a judgment which will bind ‘the whole world’ and not just the immediate parties to the action.
19 In a system in which a person's personal status is governed by one, and only one law, such as Israel, where personal status is, in general, governed only by the law of the nationality, the problem is very clearly posited as an exact parallel of the situation in property. But in English law too, substantive validity, unlike formal validity, is subject only to the personal law, and is not affected by the lex loci celebrationis (unless that is also the lexfori). Substantive validity includes the capacity to marry. The rule for capacity to marry—which includes virtually any non-formal condition for marriage—refers to the antenuptial domicile of the parties. There is some support for the view that the intended matrimonial domicile should govern. See in general Dicey and Morris, op cit above, Rule 68. In either case, acquiring English domicile after the marriage will not invalidate the marriage, even if the couple would not have been able to marry had they been English at the time of the marriage.
20 Unlike the case of property, in the case of marriage, two personal laws might be involved and the system will have to decide how to deal with this problem. Three solutions suggest themselves: determining each party's status independently of the other's according to his or her own law; determining both parties’ status jointly by referring for each only to his or her own law (the distributive approach); determining both parties’ status jointly by referring for each to both laws (the cumulative approach). For the differences between these approaches, see Palsson, L, Marriage in Comparative Conflict of Laws: Substantive Conditions (1981), 106 ffGoogle Scholar. This problem exists in every system which refers to a law which is not necessarily common to both the parties. The first option is rarely, if ever, adopted since it creates odd situations such as where a wife is married to a bachelor and vice versa. The Israeli court for example, following their understanding of the English case law, has adopted the distributive approach and requires that each of the parties have acquired the relevant status in his or her own law before it can be recognised for either of them (Funk-Schlesinger v Minister of Interior) 17 PD 225 (1962).
21 (1963) 42 DLR 2d 622.
22 As indicated above (n 19) the personal law in Israel is the national law. In Israel too, it is accepted that a couple with foreign nationality, having married under their national law in circumstances that would not have created the status of marriage in Israeli law will be regarded as married even once they become Israeli nationals. In other words, it also acts on the rule that the personal law at the time of the change in status governs, according to which, the original couple in this case would be regarded as still married. But Israel has no territorial law of personal status; it applies religious law to its own nationals, and even to some non-nationals. In the religious courts, which have exclusive jurisdiction over matters of marriage and divorce of Jews in Israel, a gett will be sufficient to dissolve a religious marriage, even if that marriage still has civil force. The civil courts have not ruled on this question but there are obiter dicta to the effect that Jewish law is a residuary personal law for all Jews. It is thus not unlikely that, despite the general rule subjecting the validity of status-changing acts to the personal law at the time of the change, the parties to the first marriage would indeed both be regarded as free to remarry in Israeli law.
23 In English law, there is now a statutory solution to at least part of this problem. S 50(b) of the Family Law Act, 1986 permits a person to remarry in England if his/her foreign divorce is recognised in English law, even if it is not recognised in his/her domiciliary law. The opposite question, whether he/she can remarry when the divorce is recognised in the domiciliary law but not in England, is not resolved. Furthermore, this provision is not designed specifically for the problem of a change in the connecting factor.
24 See Levontin, , Choice of Law and Conflict of Laws (1976), 109–10.Google Scholar
25 Levontin suggests that the court be guided in this connection by the pleadings, and that the formulation of the pleadings can be decisive. I suggest not only that in cases where the property or the propositus is not subject to forum law at the time of the proceedings, are the two questions not identical (as Levontin demonstrates) but also that the formulation of the pleadings has nothing to do with the issue. In such cases, the court is simply not asking the right question if it uses the same rule for a foreign domiciliary as it uses for a local domiciliary.
26 Here too, the question whether we should refer only to the law of the propositus or also to the law of the other party to the status arises. Here too, it is far neater to require a coincidence of views between the two relevant laws. But this problem has nothing to do with the issue under discussion here.
27 The editors of Dicey and Morris cite as an example of the incidental question the case of reservation of title, when A transfers property to B in X with reservation of title till payment in full. B takes the property to country Y and sells it to C. In Y the conditions of the sale did not meet the requirements of market overt, but Y's choice of law rule refers to the domiciliary law of B— which is the law of country Z, and not to law X, the lex situs which recognises A's title. Under law Z the reservation of title is void and B acquired title. The question who has title arises in country L. The editors regard this as an incidental question: the validity of the second transfer in Y cannot be determined without taking into account Y's choice rule which regards B as having title, so that even without market overt, B could transfer title to C. This situation is different from the situation discussed in this paper. The situation described in Dicey assumes that a proprietary event took place in Y, whereas the situation I am discussing treats property in Y before any such event has taken place. See Dicey and Morris, op cit, above p 975.
28 There is no generally accepted position on the question how to treat the incidental question in choice of law. See Dicey and Morris, op cit, above paras 2–044–2–063.
29 Grodecki would seem to take this view since he mentions the case in which the position we take on the intertemporal question creates an incidental question (Ibid para 69).
30 See also Levontin, op cit, above 102, 106.
31 There is no necessary connection between the position we take on the incidental question and the way we analyse the problem of a change in the connecting factor. But there may be a reverse connection—between the way we decide the effect of a change in the connecting factor to a third country and the incidental question. The discussion suggests that there is no point in determining title in a way that does not conform with the present lex situs. If the issue is in personam— between two parties—why should the forum not act on its own view of the situation and impose in personam obligations on people even if the property is in a place which does not recognise the state of affairs acted upon? Indeed why not act in matters in personam according to one's own view, and only in proprietary matters according to the present lex situs? There is no need to be consistent in all matters, it is true. But it seems wrong to hold a person liable in tort on the assumption that the property belongs to the plaintiff and, at the same time, hold him entitled to pass title to a third party. It thus seems more principled to hold that when the forum is in control of the property or status, it is competent to refer to the original situs or domicile, but that when it is only forum it must refer all such questions to the present situs or domicile.