Feed aggregator

Constitue une discrimination relative au sexe le refus d’une couverture maladie professionnelle au motif d’une fraude uniquement établie par la signature d’un contrat de travail quelques jours après une procédure de FIV.

en lire plus

Luís de Lima Pinheiro, Professor of Law at the University of Lisbon, has given his so-called “Last Class” earlier this week, thus putting an end to his activity as a Professor at the graduate level in this Law School (while remaining active in post-graduate courses).

The online lecture, in Portuguese, is available here.

The University of Silesia in Katowice hosted in 2019 a conference on the the Application of the Succession Regulation in the EU Member States.

The papers presented at the conference have recently been published, under the editorship of Maciej Szpunar, in Problemy Prawa Prywatnego Międzynarodowego, a periodical specifically devoted to private international law.Below are the abstracts of (and the links to) the various contributions.

After the conference GEDIP held its meeting in Katowice and celebrated honorary doctorate awarded to Professor Paul Lagarde. The report from the conference is available here and from GEDIP’s meeting here.

Maciej Szpunar, Foreword

The current volume of “Problemy Prawa Prywatnego Międzynarodowego” — the leading Polish periodical in the field of private international law — is primarily devoted to the Regulation No 650/2012 of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (“the Succession Regulation”).

Paul Lagarde, La réserve héréditaire dans le règlement 650/2012 sur les successions

The article addresses the issues relating to the protection of forced heirs in international context with a particular focus on the provisions of the EU Succession Regulation pertaining thereto. It contrasts common law tradition with the solutions adopted in French law, whereby certain relatives are entitled to the hereditary reserve (la réserve héréditaire). The author discusses selected examples taken from a body of French case-law dealing with the issue in question. Amongst the cases touched upon by the author are those concerning the successions of Johnny Hallyday and Maurice Jarre, which were two cases widely discussed in the recent French jurisprudence.

Jürgen Basedow, “Member States” and “Third States” in the Succession Regulation

The author advocates a flexible approach with respect to the interpretation of the term “Member State” as employed in the Succession Regulation, allowing the differentiation between “participating” and “non-participating” States. It does not mean that the term “Member State” should always be interpreted in a wide sense including the three non-participating States: Denmark, the Republic of Ireland, and the United Kingdom. Whether a wide or a narrow interpretation is appropriate depends on the context and the purpose of the single provision. Most provisions contained in the chapter on jurisdiction refer to participating Member States only. But some articles such as the Article 13 of the Regulation, provide a counter-example. A uniform interpretation of the concept of Member State in all provisions of the Succession Regulation seems far too sweeping. It reminds of Begriffsjurisprudenz and does not take account of the purpose of the single provisions. In particular, it disregards the need for the cross-border protection of individual rights in a Union with open frontiers.

Christian Kohler, Application of the Succession Regulation by German courts — Selected Issues

The article concerns the notion of “court” in the Succession Regulation. This notion is used in the Brussels I and Brussels Ia Regulations, where it does not necessarily have the same scope. The author attempts to interpret the concept in the light of the recitals to the Succession Regulation (in particular Recital 20) and of the case law of the Court of Justice. The very general description of the concept contained in Article 3(2) of the Regulation might potentially embrace other authorities and legal professionals, where they exercise judicial functions by way of delegation of power from the court. In the author’s view, the European Court, especially in Oberle and WB v Notariusz Przemysława Bac correctly navigated its way through the Succession Regulation and ruled in a way which is both coherent as regards the operation of the Regulation and consistent with the intentions of the legislator. The above judgments are analysed also with regard to Poland’s omission to notify notaries as “courts” under Article 79 of the Succession Regulation. The European Court found that the criteria for determining whether an authority or a legal professional, in particular a notary public, constitutes a “court” are determined by Article 3(2) and not by Article 79. Consequently, Poland’s omission to notify was not conclusive, but was in any event correct in substance. The author expresses the opinion that the judgment is accurate on this point.

Michael Wilderspin, The Notion of “Court” under the Succession Regulation

The article concerns the notion of “court” in the Succession Regulation. This notion is used in the Brussels I and Brussels Ia Regulations, where it does not necessarily have the same scope. The author attempts to interpret the concept in the light of the recitals to the Succession Regulation (in particular Recital 20) and of the case law of the Court of Justice. The very general description of the concept contained in Article 3(2) of the Regulation might potentially embrace other authorities and legal professionals, where they exercise judicial functions by way of delegation of power from the court. In the author’s view, the European Court, especially in Oberle and WB v Notariusz Przemysława Bac correctly navigated its way through the Succession Regulation and ruled in a way which is both coherent as regards the operation of the Regulation and consistent with the intentions of the legislator. The above judgments are analysed also with regard to Poland’s omission to notify notaries as “courts” under Article 79 of the Succession Regulation. The European Court found that the criteria for determining whether an authority or a legal professional, in particular a notary public, constitutes a “court” are determined by Article 3(2) and not by Article 79. Consequently, Poland’s omission to notify was not conclusive, but was in any event correct in substance. The author expresses the opinion that the judgment is accurate on this point.

Stefania Bariatti, The Capacity and the Quality of Heir. Possible Interaction with Preliminary Questions

The article contains an overview of the rules relating to the scope of application of the EU private international law regulations. It addresses the treatment of the relevant preliminary questions, with special reference to the Succession Regulation. The issues are discussed in three steps. The first is connected with the way of interpreting the notions and concepts, such as marriage, adoption, legal capacity etc., where such matters as personal status, legal capacity or family relationship may come to the foreground as a preliminary question. The second is dealing with the law applicable to the preliminary question. The author compares pros and cons of the “independent reference” (lex fori) and the “dependent reference” (lex causae) solutions, considering the latter as less effective, producing more negative consequences. The third step embraces questions relating to the jurisdiction with respect to preliminary question.

Andrea Bonomi, The Regulation on Matrimonial Property and Its Operation in Succession Cases — Its Interaction with the Succession Regulation and Its Impact on Non-participating Member States

The Regulations on Matrimonial Property (No 2016/1103) and on the Property Consequences of Registered Partnerships (No 2016/1104) are new important pieces in the “puzzle” of European private international law. This article particularly focuses on the relationship between the Matrimonial Property Regulations and the Succession Regulation, two instruments which will often be applied in parallel because of the close connection between the two areas they govern. The author examines in particular the scope of those instruments as well as their interaction with respect to jurisdiction and applicable law. At the same time, an attempt is also made to assess the position of Poland and of those other Member States that are bound by the Succession Regulation, but not by the Matrimonial Property Regulation.

Piotr Rylski, The Influence of Bilateral Treaties with Third States on Jurisdiction and Recognition of Decisions in Matters on Succession — Polish Perspective

The aim of the study is to discuss the impact of bilateral international treaties concluded by EU Member States with third countries on jurisdiction and recognition of judgments in matters of succession from Polish perspective. The author discusses the main problems in the interpretation of Article 75 of Regulation 650/2012 and the possible conflict of this solution with the Treaty on the Functioning of the EU. The article indicates also practical problems related to the collision of bilateral treaties and Regulation No 650/2012 regarding, for example, the possibility of concluding choice-of-court agreements, recognition of foreign judgments in matters of succession and the possibility of issuing the European Certificates of Succession.

Krzysztof Pacuła, The Principle of a Single Estate and Its Role in Delimiting the Applicable Laws

This paper argues that the principle of unity of succession is one of the key concepts of the Succession Regulation. By operation of this principle on the jurisdictional level, the Regulation tends to favor a perspective of a single Member State when it comes to all issues related to succession. The principle of unity of succession does not of course eliminate the need to proceed to the characterization and to delimitate the scopes of conflict of laws rules at stake. However, this principle — aiming to promote a unitary vision of a single estate in all the Member States bound by the Regulation — sets a tone for some interpretative techniques that tend to favor succession-related characterization of the issues having some importance in the context of succession with cross-border implications. According to the Author, effet utile-driven characterization, on the one hand, and succession-friendly characterization of the issues falling within ‘gray areas’ created by the operation of Article 1(2) of the Succession Regulation, on the other hand, are among them.

Maksymilian Pazdan, Maciej Zachariasiewicz, Highlights and Pitfalls of the EU Succession Regulation

The EU Succession Regulation constitutes a remarkable achievement of unification of conflict of law rules at the European level. It has importantly changed the landscape for all those interested in succession law, in particular, the notaries and the estate planning practitioners. The present article takes up a number of selected issues that arise under the Regulation. The paper first identifies certain general difficulties that result either from the complex nature of the matters addressed or from a somewhat ambiguous wording of the rules adopted by the EU legislator. The attention is devoted to the exceptions to the principle of the unity of legis successionis, the dispositions upon death, and the intertemporal questions resulting from the change of the conflict of laws rules in the Member States which occurred on 17th August 2015 when the Regulation started to be applied. The paper then moves to some of the more specific issues arising under the Regulation. To that effect, it first looks at the Polish Act of 2018 governing the ”succession administration” of the enterprise, which forms part of the estate. The argument is made that the rules contained in the 2018 Act should be applied by virtue of Article 30 of the Succession Regulation because they constitute “special rules” in the meaning of this provision. Second, the notion of a “court” under Article 3(2) of the Regulation is discussed in light of the recent judgment of the CJEU in case C-658/17 WB, where the European Court found that a Polish notary issuing the deed of certification of succession is not a “court” for purposes of Article 3(2). The paper provides a critical account of the Court’s decision.

In a landmark decision in the case of Okpabi and others v Royal Dutch Shell Plc and Another, the United Kingdom Supreme Court (“UKSC”) ruled on a jurisdictional issue on whether the claimants/appellants have an arguable case that the defendants/respondents – Royal Dutch Shell (an English domiciled company) – owed them a common law duty of care so as properly to found jurisdiction against a foreign subsidiary company (Shell Petroleum Development Corporation Limited, domiciled in Nigeria) as a necessary and proper party to the proceedings. This jurisdictional aspect was concerned with whether there was a real issue to be tried against the anchor defendant – Royal Dutch Shell (an English domiciled company).

The facts of the case was that the claimants/appellants, who are Nigerian citizens alleged that as a result of the negligence of  Shell Petroleum Development Corporation Limited, numerous oil spills have occurred from oil pipelines and associated infrastructure operated in the vicinity of the claimants’/appellants’ communities. It is said that these oil spills have caused widespread environmental damage, including serious water and ground contamination, and have not been adequately cleaned up or remediated. It is also alleged that as a result of the spills, the natural water sources in the claimants’/appellants’ communities cannot safely be used for drinking, fishing, agricultural, washing or recreational purposes.

The High Court and Court of Appeal resolved this jurisdictional issue against the claimants/appellants, but the UKSC found merit in their appeal.

 

Brexit has dealt a major blow to judicial cooperation in Europe. With the end of the transition period, the Brussels I bis Regulation became inapplicable in the relation between the UK and the EU. Some authors, however, took the view that the Regulation’s predecessor, the Brussels Convention of 1968, would continue to apply (see e.g. here and here). The main argument was that the Brussels Convention is an international treaty and not an instrument of EU law. Moreover, and contrary to the Rome Convention on the law applicable to contractual obligations, the Brussels Convention had not been fully replaced by a regulation and continued to apply with regard to some overseas territories.

This debate seems now to come to a close. On 29 January 2021, the British government informed the European Council of its view that the Convention has ceased to apply to the UK and Gibraltar with the expiry of the transition period on 1 January 2021. The unofficial document was posted on Twitter by Steven (“Steve”) Peers from the University of Essex (thanks to Felix Krysa for sharing the tweet with me). It reads in relevant part:

The Government of the United Kingdom hereby notifies the Secretary-General of the Council of the European Union that it considers that the Brussels Convention 1968 and the 1971 Protocol, including subsequent amendments and accessions, ceased to apply to the United Kingdom and Gibraltar from 1 January 2021, as a consequence of the United Kingdom ceasing to be a Member State of the European Union and of the end of the Transition Period.

Does this finally close the argument? Not for sure. The communication merely reflects an opinion by the British government, which as such is of no legal consequence. The Vienna Convention on the Law of Treaties enumerates the cases in which an international convention is terminated. A unilateral denunciation is not among them. Absent an impossibility of performance, a fundamental change of circumstances or a breach by one party, an agreement by the parties is required to suspend the operation of a treaty.

Since the Brussels Convention bound the UK to no less than 14 EU Member States, it may take some time and effort to reach agreement that the Brussels Convention is all over. The mere information of the European Council by the British government is certainly not sufficient. Of course, the EU and the UK could also enter into a new treaty. The British government has lodged an application to join the Lugano Convention, but it is still awaiting an answer from the EU.

Astreinte

Fonds de garantie

Appel civil

Katoen Natie Bulk Terminals et General Services Antwerp
Liberté d'établissement
Une loi qui réserve le travail portuaire à des ouvriers reconnus comme tels peut être compatible avec le droit de l’Union si elle vise à garantir la sécurité dans les zones portuaires et la prévention des accidents du travail

The new issue of International & Comparative Law Quarterly (Volume 70, Issue 1) is out. Some of the articles relate to private international law. Their abstracts are provided below. The whole issue is available here.

Roy Goode, Creativity and Transnational Commercial Law: From Carchemish to Cap Town

This article examines the creative aspects of a range of international commercial law instruments which have in common that they seek to bypass traditional doctrine in order to increase commercial efficiency and ease of transacting. In short, the purpose of the harmonising measure is functional in that it seeks to overcome a serious obstacle to cross-border trade by providing commercially sensible solutions to typical problems regardless whether this disturbs established legal theory, which should always the servant of the law, not its master. Creativity applies not only to the formulation of an instrument but also to its interpretation. Those entrusted with preparing a commentary on the detail of such an instrument are likely to face difficult issues of interpretation which may take years to surface and may only be resolved by a willingness to risk error in order to provide the reader with clear guidance rather than sheltering behind the presentation of alternative interpretations, while at the same time resisting the temptation to ascribe to words in a convention the meaning they would have under one’s own national law.

At least one of the instruments examined was conceptually flawed; it is mentioned to highlight the danger of over-ambition in delineating the sphere of application of the convention concerned. Undisciplined creativity comes at a cost. Another convention, and a highly successful one, is referred to only to demonstrate the value of creative ambiguity.

Enrico Partiti, Polycentricity and Polyphony in International Law: Interpreting the Corporate Responsibility to Respect Human Rights

Complex multi-actors and multi-level governance structures have emerged in areas that were traditionally exclusively the preserve of the State and treaty-making. The adoption of the United Nations Guiding Principles on Business and Human Rights (UNGP) affirmed a corporate responsibility to respect human rights to be implemented through human rights due diligence (HRDD), ie via management processes. The open-ended character of the UNGP generated the emergence of other soft instruments offering guidance to corporations in structuring HRDD. This contribution conceptualises the UNGP from the perspective of regulation as a principles-based exercise in polycentric governance reliant on regulatory intermediaries for interpretation. It then assesses the role of various sui generis normative instruments in providing interpretation to the UNGP and, how the presence of an additional layer of interpretative material contributes to the institutionalisation of responsible corporate conduct. The analysis of instruments drafted by international, non-governmental and business organisations reveals both a decentralising tension between different intermediaries due to disagreements and divergence concerning the precise extent of corporate human rights responsibilities, as well as attempts to centralise the interpretation of the UNGP. The article concludes by recommending some caution towards the employment of polycentric governance regimes and their lack of centralised interpretive authority in this domain of international law and suggests possible ways to formally establish centralised interpretation.

Vid Prislan, Judicial Expropriation in International Investment Law

This article examines the notion of judicial takings in international law and its reflection in the practice of investment tribunals. It takes stock of the already significant body of arbitral jurisprudence dealing with expropriation claims grounded in, or relating to, the acts or omissions of courts, with a view to developing a coherent theory of judicial expropriations. It is suggested that, due to the courts’ specific role in the determination of the underlying proprietary rights that are the very object of international legal protection, judicial measures warrant different conceptual treatment from measures by other State organs. Traditional approaches to expropriation analysis do not take this sufficiently into account and therefore do not provide adequate tools for distinguishing legitimate judicial measures from undue interferences with investors’ rights. It is argued that a sui generisapproach is hence needed: where proprietary rights are primarily affected by the impugned judicial action, it is first necessary to determine whether such action is itself wrongful under international law, for only then can it be treated as an act of expropriation. However, the proper analytical approach will ultimately depend on the circumstances of each case and traditional approaches, such as the sole effects doctrine, may still be appropriate where the judicial injury actually flows from wrongful legislative or executive conduct.

Mmiselo Freedom Qumba, Assessing African Regional Investment Instruments and Investor-State Dispute Settlement

This article examines the rejection of the International Investor–State dispute (ISDS) system across the African continent and its replacement with a range of domestic and regional alternatives. It assesses the advantages of the two principal options for African countries: retaining the current ISDS system, or using local courts and regional tribunals. To this end, the dispute resolution mechanisms proposed in the Pan-African Investment Code, the 2016 Southern African Development Community Finance and Investment Protocol, the SADC model BIT, the Common Market for Eastern and Southern Africa, Economic Community of West African States and East African Community investment agreements and domestic approaches are critically examined. The argument is then advanced that African countries should not abandon ISDS because replacing it with isolated domestic or regional mechanisms does not reduce any of the risks. In particular, for foreign investors, the risk associated with the adjudication of investment disputes in potentially biased, politically influenced domestic courts may prove too high. African host nations, in turn, risk sending out the wrong message concerning their commitment to the protection of foreign investments. Instead of veering off course, perhaps the time has come for African States to display the political will to remain within the ISDS system and contribute to its reform from within.

The issue also contains review, by Nahel Asfour, of Contract Law in Contemporary International Commerce: Considerations on the Complex Relationship between Legal Process and Market Process in the New Era of Globalisation by Gianluigi Passarelli, Nomos: Baden-Baden 2019. Other views on the book have been expressed by Chukwuma Okoli on the Conflictoflaws blog.

By Maria Hook (University of Otago, New Zealand) and Jack Wass (Stout Street Chambers, New Zealand)

When a couple divorce or separate, and the court is tasked with identifying what property is to be allocated between the parties, calculation of the net pool of assets usually takes into account certain debts. This includes matrimonial debts that that are in the sole name of one spouse, and even certain personal debts, ensuring that the debtor spouse receives credit for that liability in the division of matrimonial property.  However, where a spouse owes a liability that may not, in practice, be repaid, deduction of the debt from the pool of the couple’s property may result in the other spouse  receiving a lower share of the property than would be fair in the circumstances. For example, a spouse owes a debt to the Inland Revenue that is, in principle, deductible from the value of that spouse’s assets to be allocated between the parties. But the debtor spouse has no intention of repaying the debt and has rendered themselves judgment-proof. In such a case, deduction of the debt from the debtor spouse’s matrimonial property would leave the other spouse sharing the burden of a debt that will not be repaid.

This result is patently unfair, and courts have found a way to avoid it by concluding that, in order to be deductible, the debt must be one that is likely to be paid or recovered (see, eg, Livingstone v Livingstone (1980) 4 MPC 129 (NZHC)). This enquiry can give rise to conflict of laws issues: for example, there may be questions about the enforceability of a foreign judgment debt or the actionability of a foreign claim. Ultimately, the focus of the inquiry should be on the creditor’s practical chances of recovery.

In the relatively recent Cook Islands case of Webb v Webb, the Privy Council ([2020] UKPC 22) considered the relevance of a New Zealand tax debt to matrimonial property proceedings in the Cook Islands. The Board adopted a surprisingly narrow approach to this task. It concluded that the term “debts” only included debts that were enforceable against matrimonial property (which in this case was located in the Cook Islands), and that the debts in question were not so enforceable because they would be barred by the “foreign tax principle”.  Lord Wilson dissented on both points.

Background

The parties – Mr and Mrs Webb – lived in the Cook Islands when they separated. Upon separation, Mr Webb returned to New Zealand. Mrs Webb commenced proceedings against Mr Webb in the Cook Islands under the Matrimonial Property Act 1976 (a New Zealand statute incorporated into Cook Islands law), claiming her share of the couple’s matrimonial property that was located in the Cook Islands.

Mr Webb, however, owed a judgment debt of NZ$ 26m to the New Zealand Inland Revenue. He argued that, under s 20(5) of the Act, this debt had to be deducted from any matrimonial property owned by him. Under s 20(5)(b), (unsecured) personal debts had to be deducted from “the value of the matrimonial property owned by” the debtor spouse to the extent that they “exceed the value of any separate property of that spouse”. Given the size of Mr Webb’s debt, the effect of s 20(5)(b) would have been to leave Mrs Webb with nothing.  She argued that the debt fell outside of s 20(5)(b) because it was not enforceable in the Cook Islands and Mr Webb was unlikely to pay it voluntarily.

Whether the debt had to be enforceable against the matrimonial property in the Cook Islands

Lord Kitchin, with whom the majority agreed, concluded that s 20(5)(b) only applied to debts that were either enforceable against the matrimonial assets or likely to be paid out of those assets. Debts that were not so enforceable were not to be taken into account when dividing the matrimonial assets (unless the debtor spouse intended to pay them by using those assets in his name). A different interpretation would lead to “manifest injustice”, because if the Inland Revenue “cannot enforce its judgment against those assets, Mr Webb can keep them all for himself” (at [41]). If the Inland Revenue could not execute its judgment against the assets, and Mr Webb did not pay the debt, the reason for applying s 20(5)(b) – which was to protect a debtor spouse’s unsecured creditors – disappeared.

Lord Kitchin considered that this conclusion found support in Government of India v Taylor, where Viscount Simonds (at 508) had explained that the meaning of “liabilities” in s 302 of the Companies Act 1948 excluded obligations that were not enforceable in the English courts. The result in that case was that a foreign government could not prove in the liquidation of an English company in respect of tax owed by that company (at [42]).

In Webb, the judgment debt in question was a personal debt incurred by Mr Webb. However, Lord Kitchin seemed to suggest that the outcome would have been no different if the debt had been a debt incurred in the course of the relationship under s 20(5)(a) (at [46]). The word “debts” had the same meaning in s 20(5)(a) and (b), as referring to debts which are enforceable against the matrimonial property or which the debtor spouse intends to pay.

Lord Wilson did not agree with the Board’s interpretation. He considered that it put a gloss on the word “debts” (at [118]), and that it had “the curious and inconvenient consequence of requiring a court … to determine … whether the debt is enforceable against specified assets” (at [120]). Rather, a debt was a liability that was “likely to be satisfied by the debtor-spouse” or that was “actionable with a real prospect of recovery on the part of the creditor” (citing Fisher on Matrimonial Property (2nd ed, 1984) at para 15.6) – regardless of whether recovery would be against matrimonial or other assets (at [123]).

Applying this interpretation to the tax liability in question, Lord Wilson concluded that the liability was clearly actionable (because it had already been the subject of proceedings) and that the Inland Revenue did have a real prospect of recovery in New Zealand (at [126]-[127]). Mr Webb was living in New Zealand and was presumably generating income there, and the Commissioner had applied for the appointment of receivers of his property. This was sufficient to conclude that the debt was enforceable in New Zealand, “including on a practical level” (at [131]).  The facts were different from the case of Livingstone v Livingstone (1980) 4 MPC 129, where the New Zealand Court had concluded that a Canadian tax debt could “for practical purposes” be disregarded because the debtor had already left the country at the time the demand was issued, he had no intention of returning and he had removed his assets from the jurisdiction. In such a case, if the debtor spouse were permitted to deduct the foreign tax debt without ever actually repaying it, they could take the benefit of the entire pool of matrimonial assets and thus undermine the policy and operation of the whole regime.

In our view, Lord Wilson’s interpretation is to be preferred. The relevant question should be whether the debt is one that will be practically recoverable (whether in the forum or overseas). A debt may still be practically recoverable even if it is not enforceable against the matrimonial assets and is unlikely to be paid out of those assets. It is true that, in many cases under s 25(1)(b), the chances of recovery would be slim if the matrimonial assets are out of reach and the debtor spouse has no intention of paying the debt voluntarily (which seemed to be the case for Mr Webb: at [62]). By definition, personal debts are only relevant “to the extent that they exceed the value of any separate property of that spouse”, so in practice their recoverability would depend on future or matrimonial assets. Lord Wilson’s assessment of the evidence – as allowing a finding that there was a real likelihood that Mr Webb would have to repay the debt in New Zealand – is open to question on that basis. But that doesn’t mean that the debts must be enforceable against the matrimonial assets. While this interpretation would lead to fairer outcomes under s 25(1)(b) – because it avoids the situation of the debtor spouse not having to share their matrimonial assets even though the debt is recoverable elsewhere – it could lead to strange results under s 25(1)(a), which provides for the deduction of matrimonial debts that are owed by a spouse individually. It would be unfair, under s 25(1)(a), if such debts were not deductible from the value of matrimonial property owned by the spouse by virtue of being unenforceable against that property, in circumstances where the debts are enforceable against the spouse’s personal property.

The Board’s reliance on Government of India v Taylor [1955] AC 491 (HL) in this context is unhelpful. The question before the House of Lords was whether a creditor could claim in a liquidation for a debt that would not be enforceable in the English courts (regardless of whether the debt would be enforceable over certain – or any – assets). Under the Matrimonial Property Act, on the other hand, the court is not directly engaged in satisfying the claims of creditors, so the debt need not be an obligation enforceable in the forum court.  Neither need it be an obligation enforceable against matrimonial property, wherever located. It simply needs to be practically recoverable.

Whether the debt was enforceable against the matrimonial property in the Cook Islands

As we have noted, Lord Wilson argued that there was a real prospect of the debt being paid – the implication being that this was not a case about a foreign tax debt at all. Mr and Mrs Webb were New Zealanders, and Mr Webb had relocated to New Zealand before the proceedings were commenced in 2016 and had stayed there. The practical reality was that unless he found a way to meet his revenue obligations he would be bankrupted again. Lord Kitchin noted Mr Webb’s apparent determination to avoid satisfying his liabilities to the IRD. Nevertheless, there was no suggestion that Mr Webb would leave New Zealand permanently to live in the Cook Islands and there enjoy the benefits of the matrimonial property.

Nevertheless, the majority’s analytical framework required it to consider whether the tax debt was enforceable against the matrimonial property in the Cook Islands. The majority found that for the purpose of the foreign tax principle, the Cook Islands should be treated relative to New Zealand as a foreign sovereign state, despite their close historical and constitutional ties (and found that the statutory mechanism for the enforcement of judgments by lodging a memorial, cognate to the historical mechanism for the enforcement of Commonwealth judgments, did not exclude the foreign tax principle).

It was obvious that bankruptcy was a serious prospect, the IRD having appointed a receiver over Mr Webb’s assets shortly before the hearing before the Board. That begged the question whether the IRD could have recourse to the Cook Islands assets, but on this point the case proceeded in a peculiar way. The Board observed that it had been given no details of the steps that a receiver or the Official Assignee might be able to take to collect Cook Islands assets, going so far as to doubt whether the Official Assignee would even be recognized in the Cook Islands “for the Board was informed that there was no personal bankruptcy in the Cook Islands and the position of Official Assignee does not exist in that jurisdiction.” Section 655(1) of the Cook Islands Act 1915 states that “Bankruptcy in New Zealand shall have the same effect in respect to property situated in the Cook Islands as if that property was situated in New Zealand”, but the Board was not prepared to take any account of it, the provision having been introduced for the first time at the final appeal and there being some doubt about whether it was even in force.

The unfortunate consequence was that the Board gave no detailed consideration to the question of how the foreign tax principle operates in the context of cross-border insolvency, a point of considerable interest and practical significance.

The common law courts have been prepared to recognise (and in appropriate cases, defer to) foreign insolvency procedures for over 250 years, since at least the time of Solomons v Ross (1764) 1 H Bl 131, 126 ER 79 where the Court of Chancery allowed funds to be paid over to the curators of a debtor who had been adjudicated bankrupt in the Netherlands. But the relationship between this principle and the foreign tax principle has never been clear.

The UNCITRAL Model Law on Cross-Border Insolvency 1997 preserves states’ ability to exclude foreign tax claims from an insolvency proceeding. As to the common law, the New Zealand Law Commission (expressing what may be the best guide to the content of Cook Islands law) observed in 1999 that the policy justification for refusing enforcement of foreign tax judgments may not apply in the same way in the context of cross-border insolvency where the collective interests of debtors are concerned. It noted that a number of countries (including Australia, the Isle of Man and South Africa) had moved past an absolute forbidding of foreign tax claims where such claims form part of the debts of an insolvent debtor subject to an insolvency regime. It thus concluded that “foreign taxation claims may sometimes be admitted to proof in a New Zealand bankruptcy or liquidation.” While the Privy Council had a number of difficult issues to confront, it is perhaps unfortunate that they did not take the opportunity to bring clarity to this important issue.