Mere Presence As a Ground of International Competence in South African Private International Law

MERE PRESENCE AND INTERNATIONAL COMPETENCE IN PRIVATE

INTERNATIONAL LAW

RICHARD FRIMPONG OPPONG 

ABSTRACT

A contested basis of international competence in the enforcement of foreign judgments is mere presence. Comparative study reveals that the courts are divided, academics have generally been critical of it and, except in the US, legislators have shied away from using it.

The paper assesses the propriety of mere presence as a basis of international competence against the background of a recent South African decision in which the court affirmed this basis of international competence.

KEYWORDS: Enforcement of Judgments; International Competence; Mere Presence.

A. INTRODUCTION

Business people on the move between states face the risk of becoming amenable to the jurisdiction of a foreign court, the exercise of which may potentially result in a judgment debt being given against them. The common law insists that mere presence in a state is a basis on which its courts can assume jurisdiction over a foreign domiciled defendant.1 At the same time, there are old authorities that support mere presence as a basis of international

 LLB, BL (Ghana) LLM (Cantab) LLM (Harvard). Lecturer in Law, Lancaster University Law School. 1 Colt Industries v Sarlie [1966] All ER 673; Maharanee v Wildenstein [1972] All ER 689. When a court assumes jurisdiction on the basis of mere presence, it may decline to exercise that jurisdiction on the application of the defendant for a stay of proceedings under the doctrine forum non conveniens.

1 competence in actions to enforce foreign judgments.2 Some of these authorities have been assessed as explainable on other grounds, or constrained by their context.3 Obiter dicta aside, there is no recent direct authority in the common law world in favour of mere presence as founding international competence.4 In fact, there are cases that deny mere presence as a basis of international competence. The Supreme Court of the Straits Settlement objected to

2 Herman v Meallin (1891) 8 WN (NSW) 38 (where the New South Wale court enforced a Victorian default judgment given against the defendant. The Victorian court assumed jurisdiction while he was

“passing through” Victoria to New South Wales); Carrick v Hancock (1895) 12 TLR 59 (where the

English court enforced a Swedish judgment given against the defendant. The Swedish court assumed jurisdiction while he was on “a short visit” to Sweden); Forbes v Simmons (1914) 20 DLR 100 (where the Alberta Supreme Court enforced a British Columbia judgment given against the defendant. The

British Columbian court assumed jurisdiction while he was on “a causal visit” to his wife who was ill in Vancouver).

3 See, eg D McClean, Morris: Conflict of Laws (London, Sweet and Maxwell, 5th ed, 2000) suggesting that the decision of Carrick v Hancock, usually cited as authority on this point, could be explained on the basis of submission. In Carrick, the defendant duly appeared to the writ. Although he did not remain in Sweden during the proceedings, he was represented throughout. He put in a defence and even counterclaimed. As regards Forbes v Simmons, ibid, it is arguable that the considerations which inform the enforcement of inter-provincial judgments in federal states like Canada are not necessarily the same for inter-country judgments. The Supreme Court of Canada has affirmed this point in Morguard Investments Ltd. v De Savoye [1990] 3 SCR 1077, 76 DLR (4th) 256.

4 See, eg Adams v Cape Industries [1990] Ch 433, 519 where the Court of Appeal held that “in the absence of authority compelling a contrary conclusion, we conclude that a voluntary presence of an individual in a foreign country, whether permanent or temporary and whether or not accompanied by residence, is sufficient to give the courts of that country territorial jurisdiction over him under our

2 presence as a basis of international competence.5 In the Canadian Supreme Court case of

Beals v Saldanha,6 Justice LeBel in his dissent rejected the continued recognition of presence as a basis of international competence suggesting that it is arbitrary and formalistic rather than fair and reasonable. It is also noteworthy that several statutory alternatives to common law enforcement that provide for the registration of foreign judgments refer to residence (rather rules of private international law;” Morguard, ibid, [43] where the fact that the “defendant was within the jurisdiction at the time of the action” was held to be an appropriate exercise of jurisdiction for the purpose of recognising a judgment from another province within Canada. In Adams the issue was the presence or residence of a company [not an individual] in a foreign country for the purpose of international competence. In Morguard, the issue was whether jurisdiction founded on service ex juris in an action relating to land situated in Alberta was sufficient for the purpose of international competence. However, in the US such cases could rarely arise at common law because in many states mere presence suffices for international competence under the Uniform Foreign-Country Money

Judgments Recognition Act of 2005. Under section 5(a)(1) of the Act, a foreign-country judgment may not be refused recognition for lack of personal jurisdiction if the defendant was served with process personally in the foreign country. This section should be read with section 4(c)(6) which provides that a court need not recognise a foreign-country judgment if, in the case of jurisdiction based only on personal service, the foreign court was seriously inconvenient for trial of the action.

5 RMS Veerappa Chitty v MLP Mootappa Chitty [1894] II SSLR 12 cited in A Briggs, “Crossing the

River by Feeling the Stones: Rethinking the Law on Foreign Judgments” () 8 Singapore

Yearbook of International Law 1, 9-10.

6 [2003] 3 SCR 416, 234 DLR 4(th) 1, [209]. Although in Morguard, the court was prepared to recognise presence as a basis of international competence in the enforcement of inter-provincial judgments, in Beals where the real and substantial connection test developed in Morguard was extended to international judgments, the majority was silent on the issue of presence as international

3 than presence) as a basis on which a foreign court will be taken to have had jurisdiction for the purposes of enforcing its judgment.7 The absence of any mention of presence in these enactments of the common law is telling.8

Generally, writers have been critical of mere presence as founding international competence.

The learned authors of Cheshire and North’s Private International Law suggest that it is debatable whether the defendant’s presence in the foreign country for a short time will suffice for international competence in an action to enforce a foreign judgment.9 To them “casual presence, as distinct from residence, is not a desirable basis of jurisdiction.”10 In Australia,

Nygh and Davis assert that there is little doubt that a foreign judgment founded on temporary

competence for the purpose of enforcing judgments from other countries.

7 See, eg Australia Foreign Judgment Act 1991, s 7(2)(a)(iv) and 7(a)(3)(iv); New Zealand: Reciprocal

Enforcement of Judgment Act 1934, s 6(1)(b) and 6(3)(a)(iv); United Kingdom: Foreign Judgment

(Reciprocal Enforcement) Act 1933, s 4(2)(a)(iv).

8 For an excellent historical account of the evolution of these statutory schemes for the enforcement of foreign judgments see generally KW Patchett, Recognition of Commercial Judgments and Awards in the Commonwealth (London, Butterworths, 1984), 3-35.

9 PM North and JJ Fawcett, Cheshire and North’s Private International Law (London, Butterworths,

1999), 408.

10 Ibid, 409. See also L Collins (ed), Dicey, Morris and Collins on the Conflict of Laws (London,

Sweet and Maxwell, 2006), 592 expressing doubt as to whether casual presence is a desirable basis of jurisdiction. HE Read, Recognition and Enforcement of Foreign Judgments in the Common Law Units of the British Commonwealth (Cambridge, Harvard University Press, 1938), 150 noting that such a basis of international competence is not desirable on practical grounds.

4 presence will be recognised, but they find Cheshire and North’s critique of the rule just.11 In

Canada, Castel and Walker suggest that although a foreign court may have jurisdiction founded on presence, in this day and age only ordinary residence seems to conform to the constitutional principles enunciated in Morguard v. De Savoye.12

The recent unanimous decision of the South African Supreme Court of Appeal in Richman v.

Ben-Tovim13 needs to be evaluated against this background. South Africa’s primary legal system comprises a mixture of the Roman-Dutch law and English common law. South

African cases are routinely cited and relied on in other Southern African countries.14 It is likely Richman will be followed in other Southern African countries. South Africans live in one of the most prosperous countries in Africa, and actively maintain international

11 PE Nygh and M Davis, Conflict of Laws in Australia (Australia, LexisNexis Butterworths, 2002),

12 J-G Castel and J Walker, Canadian Conflict of Laws (Canada, LexisNexis Butterworths, 2001),

14.5.c.

13 2007 (2) South African Law Reports [SA] 283, reversing Richman v Ben-Tovim 2006 (2) SA 591

[Richman Trial]. The Supreme Court of Appeal is the highest court of appeal except in constitutional matters in the judicial system of South Africa. See Constitution of the Republic of South Africa 1996, art 168(3). For a comment of the trial court’s decision, see S Eiselen, “International Jurisdiction in

Claims Sounding in Money” (2006) 18 South African Mercantile Law Journal 45.

14 In Silverston (Pty) Ltd v Lobatse Clay Works [1996] Botswana LR 190 Justice Tebbutt held that “… the common law of Botswana is the Roman-Dutch law…. The Courts of Botswana have never been reluctant, in their own adaptation of the common law to the requirement of modern times, to have regard to the approach of the South African Courts and to the writings of authoritative South African academics.”

5 commercial relationships with the outside world. Furthermore, people regularly seek the enforcement of foreign money judgments there.15 Thus, for South African domiciliaries and foreigners transacting with people who own assets in South Africa this decision is important.

Moreover, it is the most direct recent judicial pronouncement on the issue in the common law world, and may potentially serve as persuasive authority in other jurisdictions.

B. RICHMAN v BEN-TOVIM

This was an action seeking to enforce in South Africa a default judgment obtained in England against the defendant. The defendant had been served with the relevant claim form at his hotel in London during a temporary visit.16 The cause of action related to legal services rendered and disbursements incurred by the plaintiff on the defendant’s behalf. At no stage did the defendant challenge the jurisdiction of the English court or apply for the proceedings to be set aside or stayed. The defendant argued that, under South African law, his mere physical presence in England at the time of the institution of the action was insufficient to accord the

15 An examination of the South Africa Law Reports (2000-2007), which is only one of the country’s reports, reveals over 10 cases involving the enforcement of foreign judgments. See, eg Seton Co v

Silveroak Industries Ltd 2000 (2) SA 215; Erskine v Chinatex Oriental Trading Co 2001 (1) SA 817;

Eden v Pienaar 2001 (1) SA 158; Purser v Sales 2001 (3) SA 445; Supercat Incorporated v Two

Oceans Marine 2001 (4) SA 27; Blanchard, Krasner & French v Evans 2002 (4) SA 87; Blanchard,

Krasner & French v Evans 2002 (4) SA 144; Mashchinen Frommer GmbH & CO KG v Trisave

Engineering & Machinery Supplies (Pty) Ltd 2003 (6) SA 69; Blanchard, Krasner & French v Evans

(4) SA 427; Society of Lloyd’s v Price 2005 (3) SA 549; Society of Lloyd’s v Romahn 2006 (4)

SA 23; Richman v Ben-Tovim 2006 (2) SA 591; Society of Lloyd’s v Price 2006 (5) SA 393

16 The judgment is silent on how long the defendant was in London.

6 English court international competence or jurisdiction to entertain the matter. The trial court upheld the defence, and dismissed the action. It reasoned that the defendant was neither domiciled nor resident in England at the time of the institution of the proceedings, and had not submitted to the jurisdiction of the English court. Consequently, the English court lacked the requisite international competence to entertain the matter. However, the Supreme Court of

Appeal held that a foreign court had jurisdiction to entertain an action sounding in money against any natural person who is merely physically present in that foreign state at the time of the institution of the action.

C. EXAMINATION OF THE RICHMAN DECISION

1. Mere Presence as International Competence: Arguments For and Against

Before Richman, there had been considerable debate in the South African case-law and academic writings as to whether mere presence suffices as a basis of international competence in South African law.17 Both the trial court and the appellate court acknowledged the existence of this debate. Interestingly, the trial court felt itself bound to an earlier decision,

17 See generally CF Forsyth, Private International Law, the Modern Roman Dutch Law including the

Jurisdiction of the High Court (Cape Town, Juta and Co, 4th edn, 2003), 401-2; C Schulze, On

Jurisdiction and the Recognition and Enforcement of Foreign Money Judgments (Pretoria, UNISA

Press, 2005), 22 where he suggests that mere physical presence is not a basis of international competence in South African law. Part of the confusion and debate in the area arose from the fact that the editor of the second edition of a leading South African text on jurisdiction had removed physical presence within a state from the previous edition’s listed bases of international competence on the ground that the weight of authority of other writers was against it.

7 Purser v Sales,18 in which a differently constituted Supreme Court of Appeal appeared to have endorsed the view that mere presence will not suffice for international competence

There are positive and negative sides to international competence founded on mere presence.19

On the positive side it offers a simple solution to the uncertainty introduced into the law when courts attempt to decide what kinds or degrees of presence will suffice for international competence. The uncertainties in determining degrees of presence are reflected in the variation of terms used to describe presence. Words like “mere,” “transient,” “fleeting,”

“temporary” “short” and “casual” are often used to describe presence, and, although apparently synonymous, have difficult quantitative and qualitative dimensions and entail uncertain discretionary assessments. Would one, two, three, or more days suffice? Would some few hours do? Is the motive behind the defendant’s presence in the jurisdiction relevant? Uncertainty adversely affects business and individual decision making. Increased transnational mobility on account of better means of transportation and more options exacerbate the difficulty posed by presence as a basis for international competence. In

Richman, the court accepted counsel’s argument on the need to extend the traditional grounds

18 2001 (3) SA 445, 450-1. In Richman, the Supreme Court of Appeal at page 287 characterised the observation in Purser as obiter.

19 In Adams, supra n 4, 519, the Court of Appeal seems to have shut the door to the use of policy oriented assessments of presence as a basis of international competence when it held that “the question whether residence or presence existed [for the purpose of international competence] at the time of the suit is determined by our courts not by reference to concepts of justice or by the exercise of judicial discretion; it is a question of fact which has to be decided with the help of the guidance given by the authorities.” [Emphasis added].

8 of international competence to cater for “itinerant businessmen.”20 Jurisdiction founded on presence is certain; the court does not have to trouble itself to assess the extent and character of the presence.21

In Forbes,22 one of the arguments in support of international competence founded on mere presence was that it is consistent with international law, which grants each state territorial jurisdiction that attaches to all persons permanently or temporarily resident within the state. A defendant who is allowed to successfully argue against international competence founded on mere presence would have been allowed to curtail to a considerable degree the well- established doctrine of the supremacy of a state within its own territory. Well established though it may be, it still begs the question as to why another state should respect (enforce) a judgment founded on the exercise of this territorial jurisdiction. It is suggested that a refusal to enforce a foreign judgment does not amount to a curtailment of the supremacy doctrine but rather affirms the territorial nature thereof.

There are aspects of jurisdiction founded on mere presence that suggest that it would be unwise to affirm it as a basis of international competence. Unfortunately, the trial court and the Supreme Court of Appeal did not take advantage of the opportunity to investigate the multi-dimensional nature and unravel the complexity of these aspects. South African courts

20 Richman, supra n 13, 289.

21 This can be contrasted with submission, residence, or real and substantial connection as bases of international competence.

22 Forbes, supra n 2, [4].

9 are noted for seeking comparative guidance from other foreign courts in making decisions.23

The Richman decision is of such significance and the issue debated to an extent that one would have expected the courts to consider comparative developments and case-law from other jurisdictions. Unfortunately, none of the cases cited by the courts was foreign. A comparative approach might have counselled them to proceed with caution. Indeed, superficial analysis is not limited to the judgments; critique of the rule in the leading texts on the subject also has often been limited to one-line statements failing to explain why such a rule is undesirable. The infrequency with which the issue arises may account for this cursory treatment.

It is difficult to reconcile mere presence as a basis of international competence with the theory of obligation which is sometimes seen as the foundation of the common law regime for the enforcement of foreign judgments.24 A legal obligation25 should be founded on actual 23 See generally C Forsyth, “The Value of Comparative Ethos to the Judicial Process in the Conflict of

Laws” in C Visser (ed), Essays in Honour of Ellison Kahn (Cape Town, Juta and Co, 1989), 151-172.

24 But see Collins, supra n 10, 592 suggesting that presence as a basis of jurisdiction is strengthened by those authorities which suggested that temporary allegiance to the local sovereign was one of the reasons the defendant was under an obligation to comply with its judgment. See also Heyns v

Demetriou [2001] Malawi High Court 52 where in an action to enforce a South African judgment in

Malawi the court held that the power to enforce a foreign judgment at common law “depends not on comity or reciprocity but on the defendant’s duty to the court of the judgment and the contract.”

25 It is important here to distinguish two kinds of obligations, namely the judgment debt and the legal duty to pay the judgment debt. The former informs the nature of the application or cause of action to enforce the judgment (eg assumpsit, summary judgment, provisional sentence). The latter is the reason why the defendant can be made to pay the judgment debt. But because here the foreign court which

10 circumstances. If a state imposed an obligation (debt and duty) on an individual and expected it to be honoured, it is fair and reasonable to expect that the defendant’s obligation to pay the judgment sum at wherever he has assets be linked with the factual matrix that underlies the cause of action. A court should not fall prey to the illusion of sitting as an ‘international judicial tribunal’ open to the beck and call of litigants who are exempt from the need to establish a proper nexus between the litigants, the cause of action, and the state.26 Where jurisdiction is founded solely on mere presence, it is arguable whether it offers such connection as to merit an obligation due from the defendant to satisfy the judgment debt at wherever he has assets. It appears that the dispute was connected with England not only by the defendant’s presence,27 but also by the fact that the plaintiff’s consultancy firm was based in England. This firm rendered services to the defendant. This aspect was not pursued in either one of the Richman judgments, however.

On the assumption that the obligation theory holds good in South African law on recognition and enforcement, the question as to whom the defendant’s obligation to satisfy the debt is owed remains to be answered: is it to the individual plaintiff, or to the state where he was present and the litigation took place, or to both? In the case of an obligation owed to the plaintiff, the existence of a cause of action, be it in contract, tort, or otherwise creates a imposed the duty is incapable of enforcing it, the enforcing court demands that the foreign court acted properly in imposing that duty, hence the need for international competence.

26 See Willow Investment v Mbomba Ntumba [1997] Tanzania LR 47. Things are different in cases where both parties have decided to voluntarily submit to the jurisdiction of the court although that state may have no other association with the underlying cause of action.

27 Richman Trial, supra n 13, 597.

11 relationship between the parties from which, undeniably, an obligation to make good any resulting damage arises. Where the defendant owes a civil obligation to the plaintiff, one would expect the forum in which the obligation is judicially sanctioned or imposed to have some connection with the factual matrix giving rise to the obligation. Mere presence within the forum hardly satisfies this requirement. Where a civic obligation exists towards the state, it is similarly hard to imagine that a transient presence there could give rise to an obligation in the form of a judgment debt and a duty to satisfy the judgment, long after the defendant might have left the jurisdiction.28 The foundation of this obligation is weaker where, as in Richman, the defendant failed to enter appearance or defend the action. By not appearing, the defendant in essence denies that any obligation is due. In Europe, it is noteworthy that even though the

Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in

Civil and Commercial Matters [Brussels Regulation] can be characterised as very much pro- enforcement, a foreign judgment against a European Union domiciled defendant founded on mere presence shall not be recognised under the Regulation.29

Arguably, jurisdiction founded on mere presence undermines the legitimate expectations of defendants. A defendant may legitimately expect to be sued in the state where he is domiciled, resident, does business, voluntarily submits to the exercise of jurisdiction or where the cause of action arose. A defendant hardly expects to be served with a claim form to which he must

28 Public policy considerations fix people within a state, even if fleeting, with knowledge of its criminal laws; ignorance of the law is no excuse. However, it is debatable whether there are similar public policy reasons compelling people with a fleeting presence in a state to be sued there, and if yes, whether the resulting judgment should be enforced abroad.

29 Council Regulation (EC) No 44/2001 [2001] OJ L21/1, article 3(2) and 35 (1).

12 defend or at least contest on the pain of a default judgment given against him while shopping duty free in transit at Heathrow. The prospect of another country enforcing such a judgment is even more frightening. Furthermore, such jurisdiction is open to abuse. In Richman, it appears from some of the defendant’s defences that he had been misled by the nature of the documents served on him whilst in England and that he had relied on an undertaking by the plaintiff not to institute or conduct proceedings against him in England.30 Such jurisdiction offends the cardinal principles of fairness and reasonableness on which legal systems are founded. Thus, it is unsurprising that, as regards European Union domiciled defendants, this basis of jurisdiction is proscribed under article 3(2) of the Brussels Regulation.31

There is a distinct advantage to plaintiffs suing in a forum of their choice, even if that is where a defendant was merely present. Considerations of cost, legal aid, limitations, extent of possible awards, and the applicable law may all influence their decision. Motivated by legitimate self-interest, plaintiffs seldom make these determinations with regard to the interests of defendants. This brings to the fore the issue of whether in enforcing judgments founded on mere presence, the South African courts are affording enough protection to South

Africans or people with assets in South Africa, who are sued abroad. The issue of whom to protect or which interests to serve often presents itself when reform of or change in private international law is at stake. For example, in Canada, the adoption of the real and substantial

30 Richman Trial, supra n 13, 594.

31 Council Regulation, supra n 29. Compare Burnham v Superior Court of California 495 US 604

(Supreme Court 1990) where the US Supreme Court held that the Due Process Clause does not deny a

State’s court jurisdiction over a non-resident, who was personally served with process while temporarily in that State in an action unrelated to his or her activities in the State.

13 connection test for the enforcement of foreign judgments has been criticised as not affording enough protection to Canadians sued abroad. The much criticised American conflicts revolution, if it accomplished little else, served to expose the multiple interests at stake in the application of conflict rules. While it is possible for parties sued abroad on the basis of mere presence to defend the suit abroad or apply for the proceedings to be stayed, the cost imposed on defendants may not be wholly recoverable in court. Additionally, stay of proceedings is not as of right.

It is paradoxical that the Supreme Court of Appeal enforced a judgment founded on a basis of jurisdiction which would have been insufficient under domestic South African law.32 The pervasive doctrine of effectiveness prevents the South African courts from assuming jurisdiction merely on the basis of the foreign defendant’s presence within the jurisdiction.

There must be an attachment of the defendant’s assets to found or confirm jurisdiction.33

Indeed, so persistent is this requirement of effectiveness in South African law that it has been argued and held that, as between two foreign parties, submission alone is not enough to confer jurisdiction on the South African courts.34 Granted, there is a distinction between national and international competence and the bases of both competences need not, and indeed often does

32 Schulze, supra n 17, 22.

33 Additionally, a foreigner temporarily present in South Africa could be arrested to found jurisdiction although the courts have doubted the constitutionality of this procedure. See Himelsein v Super Rich

1998 (1) SA 929, 936; Naylor v Taylor 2006 (3) SA 546, 557; Tsung v Industrial Development Corp. of SA Ltd 2006 (4) SA 177, 181.

34 Chong Sun Wood Products Pte Ltd v K & T Trading Ltd 2001 (2) SA 651; Hulse-Reutter v Godde

2001 (4) SA 1336.

14 not, coincide. It follows that the fact that a state will assume jurisdiction on a particular ground does not mean it will enforce a foreign judgment founded on the exercise of jurisdiction on the same basis. Nonetheless, in principle rules on international competence ought to mirror national jurisdictional rules; after all, why would a court enforce a judgment it does not have jurisdiction to give assuming it was sitting as the foreign court but applying its national jurisdiction rules?35

From a human rights and constitutional law perspective, it may be argued that the enforcement of a default judgment founded on mere presence violates the South African

Constitution, and more particularly the constitutional guarantee of right to fair hearing which is binding on the judiciary, among others.36 Indeed, under the Constitution the courts are enjoined to develop or limit the common law in order to give effect to the Bill of Rights.37 It is unfortunate that the human rights dimension of this rule was not argued or considered by the court. This is not to suggest that the English court was bound to respect the South African constitutional guarantees.38 However, where a national court enforces a decision founded on a

35 The issue here should not be confused with enforcing a judgment which is based on a cause of action or legislation not available in the enforcing forum. See, eg Eden v Pienaar 2001 (1) SA 158 where it was held that the mere fact that a foreign statute (in this instance Israeli legislation which created liability for negotiating in bad faith) embodied concepts not recognised by South African law did not of itself constitute a ground for refusing to enforce the judgment.

36 Constitution of the Republic of South Africa 1996, article 8(1) and 34.

37 Ibid, article 8(2)(3).

38 It was held in Kaunda v The President of the Republic of South Africa 2005 (4) SA 235 that the Bill of Rights does not have extra-territorial reach; it does not bind foreign governments.

15 breach of principles reflected in its constitution, it shows little respect for its constitutional values.39 It must be recalled that in Richman, the defendant did not challenge the jurisdiction of the English court nor did he apply for the proceedings to be set aside or stayed at any stage, although he had that right. The issue here is whether the ‘sin’ of the defendant in not taking advantage of the right to contest the foreign proceeding, and potentially getting a fair hearing, should be visited on him in the domestic forum. Resolving this issue should involve an assessment of all the relevant facts including the potential cost of defending or challenging the foreign action, whether it was likely the foreign court would have declined jurisdiction, and the basis on which the foreign court assumed jurisdiction.

The Richman decision may also have an adverse economic impact. Private international lawyers have generally shied away from statistically measuring the impact of their discipline on business or individual decisionmaking. However, emerging scholarship indicates private international law considerations influence the international allocation of resources.40 It is

39 See generally JJ Fawcett, “The Impact of Article 6(1) of the ECHR on Private International Law”

(2007) 56 International and Comparative Law Quarterly 1; B Juratowitch, “The European Convention on Human Rights and English Private International Law” (2007) 3 Journal of Private International

Law 173.

40 See, eg RA Brand, “Recognition and Enforcement of Judgments as a Trade Law Issue: The

Economics of Private International Law” in J Bhandari and AO Sykes (ed), Economics Dimensions of

International Law: Comparative and Empirical Perspectives (Cambridge University Press, 1997),

592; AO Sykes, “Transnational Tort Litigation as a Trade and Investment Issue" (Stanford Law and

Economics Olin Working Paper No. 331 January 2007) http://ssrn.com/abstract=956668 accessed on

23 August 2007; JL Goldsmith and AO Sykes, “Lex Loci Delictus and Global Economic Welfare:

16 possible to envisage a situation where people, aware of the decision and its implications for their assets in South Africa, will relocate these assets to jurisdictions that demand stricter standards before allowing the assets to be used to satisfy a foreign judgment debt.41

2. Richman and the Future of International Competence

In the light of the explanation for the decision, namely the need to facilitate international trade and commerce, it is debateable whether the Richman decision has set the stage for the recognition of other liberal grounds of international competence in South Africa. In Supercat

Incorporated v. Two Oceans Marine42 the plaintiff sought enforcement of a Florida judgment against the defendant South African company. The Florida court assumed jurisdiction on the basis that the tort involved fraud, and had been committed within its jurisdiction. At the time of the action the defendant was neither resident nor domiciled in Florida. However, appearance had been entered and the jurisdiction of the court denied. Thereafter, it failed to proceed with its defence. It was held that the Florida court was not internationally competent under South African law. Counsel for the plaintiff referred to Canadian cases relating to the real and substantial connection test. Counsel argued that the traditional approach to the recognition of foreign judgments has been rendered obsolete by the exigencies of

Spinozzi v ITT Sheraton Corp” (2007) 120 Harvard Law Review 1137.

41 In Zwyssig v Zwyssig 1997 (2) SA 467 the defendant unsuccessfully argued that the South African court had no jurisdiction to entertain a provisional sentence application seeking to enforce a foreign judgment because he was neither domiciled nor resident in South Africa. The fact that a defendant is not resident or domiciled in South Africa will not suffice to deny the courts jurisdiction to enforce the foreign judgment. The presence of assets in South Africa will be enough.

42 2001 (4) SA 27.

17 international trade, and called for a new approach.43 The judge found the Canadian cases

“informative” but felt “not inclined or, sitting as a single judge, entitled to ignore the considerable weight of judicial authority in this country.”44

This will not be the last time the real and substantial connection test will rear its head in South

Africa. In Richman, the court queried why “a party armed with a final and conclusive judgment of an English court should not be entitled, prima facie at least, if only on grounds of comity between civilised nations and having regard to the current global environment, to relief in our courts.” If this query points to the future direction of the law, then a more liberal foreign judgment enforcement regime is to be expected.

Technological advancement, the growth of international commercial relationships, the increased mobility of people across jurisdictions, and the demands of globalisation have led to

43 Supercat Incorporated v Two Oceans Marine 2001 (4) SA 27, 31.

44 Ibid, 31. The real and substantial connection test has been differently received in other jurisdictions.

In South Africa, Forsyth has argued that such a test “devoid of precise meaning, simply provides a veil for judicial discretion,” and “is not therefore supported as a ground for international competence.”

Forsyth, supra n 17, 408. However, in England, it has been suggested that “there is much to be said for adopting the real and substantial connection test or something similar.” North and Fawcett, supra n 9,

422. So far it appears the English courts have not acted on this suggestion. Briggs, in a brief survey of the law in Australia, New Zealand, Ireland, Singapore, and Malaysia, has also noted that they “[have not] departed from English law on what is required to establish the jurisdictional competence of a foreign court.” Briggs, supra n 5, 12.

18 calls for reconsideration of the law on the enforcement of foreign judgments.45 In Canada, these developments influenced the Supreme Court’s adoption of the real and substantial connection test as an additional basis of international competence,46 and the recent decision to enforce foreign non-money judgments.47 The same considerations influenced the Supreme

Court of Appeal in Richman. As was stated:

“there are compelling reasons why…in this modern age, traditional grounds of international competence should be extended, within reason, to cater for itinerant international businessmen. In addition it is now well established that the exigencies of international trade and commerce require that final foreign judgments be recognised as far as is reasonably possible in our courts and effect be given thereto.”48

The underlying internationalist outlook that informed Richman is not free from criticism. In

Canada, Professor Wai has warned against prioritising the international system on the strength of arguments like the need to facilitate international trade and commerce since this may mean that interests and values of individual parties to the litigation are lost or dealt with unfairly.49

45 See, eg Briggs, supra n 5.

46 Morgaurd, supra n 3; Beals, supra n 6. See generally J Blom and E Edinger, “The Chimera of the

Real and Substantial Connection Test” (2005) 38 University of British Columbia Law Review 373.

47 Pro Swing Inc v Elta Golf Inc [2006] 2 SCR 612, 273 DLR (4th) 663. See generally RF Oppong, “Canadian Courts Enforce Foreign Non-Money Judgments” (2007) 70 Modern Law Review 670; and: Stephen G A Pitel, ‘Enforcement of foreign non-monetary judgments in Canada (and beyond)’ (2007)3 Journal of Private International Law 000 48 Richman, supra n 13, 289.

49 R Wai, “In the Name of the International: The Supreme Court of Canada and the Internationalist

Transformation of Canadian Private International Law” (2001) 39 Canadian Yearbook of

International Law 117, 186-8.

19 Similar concerns relating to the inadequate protection of individual interests and expectations have been expressed about the private international law jurisprudence of the European Court of Justice, with its emphasis on state interests and systemic stability.50 It is unfortunate that the

Supreme Court of Appeal failed to identify or at least discuss the inherent dangers of its internationalist outlook especially in terms of not providing enough protection to residents of or people with assets in the jurisdiction sued abroad.

D. CONCLUSION

Richman is a landmark decision on the issue of mere presence as a basis of international competence. It addresses an issue for which there is no recent direct judicial pronouncement.

The factors which informed the decision have been used elsewhere and may be deployed in any jurisdiction for other more flexible and less formalistic grounds of international competence, such as the Canadian real and substantial connection test. However, any such move should take due account of national concerns and interests in the enforcing state. If not, that legal system exposes its citizens or people with assets in the jurisdiction to a risk they will not face elsewhere. This may ultimately motivate people to hedge against this risk by removing their assets from that jurisdiction.

50 See, eg Gasser v MISAT [2003] ECR 1-14693; Turner v Grovit [2004] ECR 1-3565; Owusu v Jackson [2005] ECR 1-1383; TC Hartley, “The European Union and the Systematic Dismantling of the Common Law Conflict of Laws” (2005) 54 International and Comparative Law Quarterly 813. Admittedly, all these cases related to jurisdiction. However the judicial philosophy which informs them can be applied in the enforcement of foreign judgments.