#13851 - Supervision Notes Property Ch. 12

PROPERTY

Step 1 – Characterisation

Contract, tort or property?	Contract Rome I Regulation Look at whether B has paid/whether bicycle is suitable for its purpose Seller owns the bicycle: implied term in English domestic law (Sale of Goods Act 1979, s12) Property When buyer is asserting that because of sale to buyer, seller has no title to transfer to anyone else (i.e. buyer is claiming bicycle itself) ? proprietary question. E.g. Kuwait Airways Corp v Iraqi Airways Co Facts: Ds had possession of 10 aircrafts which were taken from claimants by Iraqi forces during first Gulf War. Some aircrafts were damaged/destroyed when they were returned. Claimants: Wanted delivery up of aircraft/recover damages for wrongful interference with claimants’ property/ value of aircraft. Defendants: relied on Iraqi law; asserted good title to aircraft, Resolution of Iraqi Council gave them aircraft so claimants no longer owned aircraft, can’t claim in tort for damage. Central issue of determination: property issue – did Iraqi Resolution give title to aircraft to D thereby defeating claim in tort?
Voluntary or involuntary?	Where property has been requisitioned or nationalised by state/dealt with by court as part of execution of judgment Involuntary transfer Consider different factors, particularly public policy reasons
Movable or immovable?	Property: personalty and realty Distinction is not the same distinction as in domestic law Categorisation largely depends on physical characteristics of property If unclear, apply lex situs Immovables: land in England, all interests in land (including leases) NB Leases are personalty in domestic law (Freke v Lord Carbery) Property abroad: characterised as immovable or movable according to lex situs
Tangible or intangible?	Factual – property is either factual or it isn’t factual. Tangibles: e.g. bicycle, painting Exception: share certificates evidence of ownership, physical possession of certificate is enough to have complete title of share Intangibles: sum in credit, debts, patents, shares, etc Williams v Colonial Bank C of A: distinction should be drawn between possession of certificates and ownership of shares Law of England determined ownership of physical share certificates in a NY company But did not determine effect of possession of certificates as matter of any rights against the company What governs effect of possession of certificate? For law governing existence of share/debt Law of incorporation determines questions of membership of company – what rights are given to members/how title can pass

Contract, tort or property?

Contract

Rome I Regulation
Look at whether B has paid/whether bicycle is suitable for its purpose
Seller owns the bicycle: implied term in English domestic law (Sale of Goods Act 1979, s12)

Property

When buyer is asserting that because of sale to buyer, seller has no title to transfer to anyone else (i.e. buyer is claiming bicycle itself) ? proprietary question.

E.g. Kuwait Airways Corp v Iraqi Airways Co

Facts: Ds had possession of 10 aircrafts which were taken from claimants by Iraqi forces during first Gulf War. Some aircrafts were damaged/destroyed when they were returned.
Claimants: Wanted delivery up of aircraft/recover damages for wrongful interference with claimants’ property/ value of aircraft.
Defendants: relied on Iraqi law; asserted good title to aircraft, Resolution of Iraqi Council gave them aircraft so claimants no longer owned aircraft, can’t claim in tort for damage.
Central issue of determination: property issue – did Iraqi Resolution give title to aircraft to D thereby defeating claim in tort?

Voluntary or involuntary?

Where property has been requisitioned or nationalised by state/dealt with by court as part of execution of judgment

Involuntary transfer
Consider different factors, particularly public policy reasons

Movable or immovable?

Property: personalty and realty

Distinction is not the same distinction as in domestic law
Categorisation largely depends on physical characteristics of property
If unclear, apply lex situs

Immovables: land in England, all interests in land (including leases)

NB Leases are personalty in domestic law (Freke v Lord Carbery)

Property abroad: characterised as immovable or movable according to lex situs

Tangible or intangible?

Factual – property is either factual or it isn’t factual.

Tangibles: e.g. bicycle, painting
- Exception: share certificates evidence of ownership, physical possession of certificate is enough to have complete title of share
Intangibles: sum in credit, debts, patents, shares, etc

Williams v Colonial Bank

C of A: distinction should be drawn between possession of certificates and ownership of shares

Law of England determined ownership of physical share certificates in a NY company
But did not determine effect of possession of certificates as matter of any rights against the company

What governs effect of possession of certificate?

For law governing existence of share/debt
Law of incorporation determines questions of membership of company – what rights are given to members/how title can pass

Step 2 – Immovables

Jurisdiction

Court must decide whether it has jurisdiction, before deciding what the choice of law rule for property questions over foreign immovable property might be.

Art 22: English court cannot take jurisdiction over proceedings, which have as their object a right in rem in immovable property located in another MS.
National rules: English court does not have jurisdiction over question of title to foreign immovable property located in third state.

British South Africa Co v Companhia de Mocambique: H of L, held, it did not have jurisdiction in an action for trespass to land in Africa. Cannot decide an action of title nor one for possession for foreign land.
Hesperides Hotels v Aegean Turkish Holidays: H of L, refused to hear an action in respect of an alleged conspiracy made in England to trespass in hotel in Cyprus.

Exceptions to rule

Civil Jurisdiction and Judgments Act 1982, s30	Modified Mocambique rule. Actions for trespass or other torts affecting immovable property situated outside England/EU can be heard in English court Rare still for English court to exercise its discretion to decide dispute Applicable law: foreign law
English trust/will	If will/trust concerns in whole or in part with foreign land, question of title thereto arises incidentally. English court can act upon person of the trustee or personal representative
Equitable jurisdiction in personam	English courts can act in personam upon a defendant within jurisdiction to enforce personal obligation, incumbent upon D when subject matter is land abroad. Makes decree of specific performance against D D is in contempt of court if disobeyed Basic requirements D is within jurisdiction Subject matter arises out of contract between parties/concerns D’s fraudulent or other unconscionable conduct, or arises from equitable or fiduciary relationship Act D is ordered to do must not be illegal or impossible by lex situs Requirement 2 – Explanation Contract: Penn v Lord Baltimore decree of specific performance was made to enforce contract to fix boundaries of Pennsylvania and Maryland. Fraud: Cranstown v Johnston creditor refused debtor’s tender of payment to recoup money owed to him and put up debtor’s land at public sale but bought it himself at low price. Held, ordered to reconvey land, otherwise gross injustice arises. Masri v Consolidated Contractors International: C of A, appointed receiver to collect in oil revenues over concession in Yemen belonging to judgment debtor company. Order itself had no in rem effect (i.e. didn’t alter title to property/receiver’s success in obtaining actual title to property) Any other equity or fiduciary relationship Privity of obligation between parties Norris v Chambers: held, court had no jurisdiction to determine matter; neither original company or vendor were parties to the action Cf Mercantile Investment & General Trust v River Plate Co: court, held had jurisdiction to enforce charge since Ds had expressly agreed to respect claimant’s rights when taking transfer of land.

Civil Jurisdiction and Judgments Act 1982, s30

Modified Mocambique rule.

Actions for trespass or other torts affecting immovable property situated outside England/EU can be heard in English court
Rare still for English court to exercise its discretion to decide dispute
Applicable law: foreign law

English trust/will

If will/trust concerns in whole or in part with foreign land, question of title thereto arises incidentally.

English court can act upon person of the trustee or personal representative

Equitable jurisdiction in personam

English courts can act in personam upon a defendant within jurisdiction to enforce personal obligation, incumbent upon D when subject matter is land abroad.

Makes decree of specific performance against D
D is in contempt of court if disobeyed

Basic requirements

D is within jurisdiction
Subject matter arises out of contract between parties/concerns D’s fraudulent or other unconscionable conduct, or arises from equitable or fiduciary relationship
Act D is ordered to do must not be illegal or impossible by lex situs

Requirement 2 – Explanation

Contract:
- Penn v Lord Baltimore decree of specific performance was made to enforce contract to fix boundaries of Pennsylvania and Maryland.
Fraud:
- Cranstown v Johnston creditor refused debtor’s tender of payment to recoup money owed to him and put up debtor’s land at public sale but bought it himself at low price. Held, ordered to reconvey land, otherwise gross injustice arises.
- Masri v Consolidated Contractors International: C of A, appointed receiver to collect in oil revenues over concession in Yemen belonging to judgment debtor company.
  - Order itself had no in rem effect (i.e. didn’t alter title to property/receiver’s success in obtaining actual title to property)
Any other equity or fiduciary relationship
- Privity of obligation between parties
- Norris v Chambers: held, court had no jurisdiction to determine matter; neither original company or vendor were parties to the action
- Cf Mercantile Investment & General Trust v River Plate Co: court, held had jurisdiction to enforce charge since Ds had expressly agreed to respect claimant’s rights when taking transfer of land.

Choice of law

Immovable property: lex situs

Transfer, extinction of interests in immovable and formal/essential validity of transfers all governed by lex situs
No exceptions to rule.

Adams v Clutterbuck

Two domiciled Englishmen in England entered into lease of land in Scotland.

Lease was not under seal. Argued that the shooting rights were not appurtenant to land, as was true under English law.

Held: Scottish law determined issue.

Under that law, no seal was required. Therefore, rights were appurtenant to land.

Application of lex situs includes renvoi
Capacity to convey or take conveyance of foreign land is governed by lex situs as well

Bank of Africa v Cohen

A married woman domiciled in England, by a deed executed here, agreed to make mortgage to bank in England of her land in South Africa to secure her husband’s debts.

Under South African law, she had no capacity to do so.

Therefore, sued for breach of duty.

Held: no liability because she had no capacity to enter into agreement.

In the absence of choice, the applicable law will be lex situs subject to an exception where it is clear from all circumstances that the contract is manifestly more closely connected with another law.

British South Africa Co v de Beers

Contract concerned with land in Northern and Southern Rhodesia was held to be governed by English law.

Questions of capacity?

Do not fall directly within scope of Rome I Regulation
But could argue that applicable law determined by the Regulation could also determine question so capacity falling outside its scope

Formal validity of contract concerning immovable property is determined according to Rome I Regulation.

Freed contracts from formal requirements
Contract will be formally valid if complied with formal requirements of place where it is made/those of applicable law

Step 3 – Tangible movables

Jurisdiction

Brussels I Regulation currently contains no ground of jurisdiction based upon presence of property in territory of English court.

Usual rules based on domicile of defendant applies
English court can assert jurisdiction in rem for claim for ownership, possession, mortgage or condemnation of ship if claim is served on ship physically
No in rem jurisdiction for other forms of tangible property

General rule: lex situs

Problematic when tangible movable property changes location law in one place may be different from law of different location in which property is now found.

If tangible property has remained in one country, that country’s law will determine title to the asset
Where situs has changed by asset being moved from one country to another:

If X acquired title by law of Utopia when goods were there, X’s title is recognised in England, unless then transaction happens when they are then in Ruritania where law of Ruritania gives title to Y. Here, Y’s title prevails over X.
No transaction takes place in Ruritania/one takes place but gives no title to Y X’s title will continue to be recognised.

Cammell v Sewell

X owned cargo of timber, title to which he acquired by Russian law when it was in Russia.

Shipped from Russia to England on Prussian ship, which was wrecked on coast of Norway.

Ship’s master sold timber to Y in Norway.

Sale gave Y title under Norwegian law, but not under English law.

Y brought timber to England, X sued Y in England claiming title to it.

Court, held: Y’s title acquired by Norwegian law when timber was in Norway prevailed over that of X.

Winkworth v Christie, Manson and Woods Ltd

Some paintings owned by claimant were stolen in England, then taken to Italy where they were sold to second defendants.

Paintings returned to England, accepted for auction by first defendant auctioneers.

Claimant sought declaration that paintings were his property.

English law:

Thief cannot give better title...

#13851 - Supervision Notes Property Ch. 12 - Conflict of Laws

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