1. Williams v.

Canada
90 DLR (4th) 129 (SCC)
October 10; 1992

Doctrine: The “residence of the debtor test” is inapplicable in determining the situs of taxation.
The connecting factors which are potentially relevant should be weighed in light of three important
considerations: the purpose of the exemption; the type of property in question; and the incidence
of taxation upon that property.

Facts: The appellant, a member of an Indian Band, received regular employment insurance
benefits from 1984 for because of his former employment with a logging company. The work was
performed on the reserve, the employer was located on the reserve, and the appellant was paid on
the reserve. In addition to regular benefits, the appellant also received “enhanced” insurance
benefits paid in respect of a job creation project administered on the reserve pursuant to a written
agreement between the Indian Band and the Canada Employment and Immigration
Commission. The regular and enhanced benefits were paid by the Commission’s regional center
in Vancouver.
The appellant received a notice of assessment by the Minister of National Revenue
which included in his income for 1984 the regular and enhanced employment insurance
benefits. Under the Indian Act , both the regular and enhanced unemployment insurance benefits
were exempt from taxation. The issue in this case is the situs of employment insurance benefits
received by an Indian for the purpose of the exemption from taxation.

Issue: W/N the unemployment insurance paid within the Indian reservation are taxable.

Held:

The conflicts of law principle of “residence of the debtor” is not applicable. The
case provides that “the proper approach to determining the situs of intangible personal property
is for a court to evaluate the various connecting factors which tie the property to one location
or another. In the context of the exemption from taxation in the Indian Act , the connecting
factors which are potentially relevant should be weighed in light of three important
considerations: the purpose of the exemption; the type of property in question; and the
incidence of taxation upon that property. Given the purpose of the exemption, the ultimate
question is to what extent each connecting factor is relevant in determining whether taxing the
particular kind of property in a particular manner would erode the entitlement of an
Indian qua Indian to personal property on the reserve.”

The location of the employment which gave rise to the qualification for the
unemployment insurance benefits is a a relevant factor in identifying the situs of the
benefits. In this case, since the location of the qualifying employment was on the reserve, the
benefits received by the appellant were also located on the reserve. This conclusion also applies
to the enhanced benefits. The appellant only qualified for participation in the job-creation
program because he had been receiving regular unemployment insurance benefits, that is,
because of his prior employment that had ceased. It follows that both the regular and enhanced
benefits were exempt from taxation pursuant to the Indian Act.
 2. Morguard Investments v. De Savoye

76 DLR (4th) 256 (SCC)

December 20, 1990

Doctrine: Between provinces, full faith and credit should be given to other Courts’ decision so
long as they are working within their jurisdictions. In the case of someone being sued out-of-
province, a flexible approach should be used to determine whether there is a substantial connection
between the defendant and the place they are being sued.

Facts: Morguard Investments Limited and Credit Foncier Trust Company, became mortgagees of
land in Alberta in 1978. The appellant, Douglas De Savoye, who then resided in Alberta, was
originally guarantor but later took title to the land and assumed the obligation of mortgagor. Shortly
afterwards he moved to British Columbia, and he has not resided or carried on business in Alberta
since. The mortgages fell into default and the respondents brought action in Alberta. The appellant
was served with process in the action by registered mail addressed to his home in British Columbia.

The appellant chose not to appear or defend his actions. The respondents obtained judgment ex
juris in the foreclosure action, and then obtained orders for the judicial sale of the properties. They
then initiated separate action in the British Columbia Supreme Court to enforce the Alberta
judgments for the shortfall.

Issue: W/N the the Court shall accord recognition to the ruling of one province when the defendant
did not reside there.

Held: Yes. Between provinces, full faith and credit should be given to other Courts’ decision so
long as they are working within their jurisdictions. In the case of someone being sued out-of-
province, a flexible approach should be used to determine whether there is a substantial connection
between the defendant and the place they are being sued.
‘Comity’ in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere
courtesy and good will, upon the other. But it is the recognition which one nation allows within its
territory to the legislative, executive or judicial acts of another nation, having due regard both to
international duty and convenience, and to the rights of its own citizens or of other persons who
are under the protection of its laws. Following the principle of Full Faith and Credit, “the courts in
one province should give full faith and credit, to use the language of the United States Constitution,
to the judgments given by a court in another province or a territory, so long as that court has
properly, or appropriately, exercised jurisdiction in the action”. Defendant’s inconvenience in
being sued by someone in another province is offset by their inconvenience in suing someone in
another province. Plaintiff won.
 3. Tolofson v. Jensen

120 OR (4th) 289 (SCC)

December 15, 1994

Doctrine: The primary determiner in selecting a country's law in tort should be the lex loci or
the location where the tort occurred.

Facts: Mrs. Gagnon brought action on her own behalf and as litigation guardian of two children
against her husband, Mr. Gagnon, for personal injuries suffered in a Quebec traffic accident
involving her husband and Mr. Jensen. The Gagnons were residents of Ontario; Mr. Jensen was
a resident of Quebec. Mrs. Gagnon discontinued her action against Mr. Jensenfollowing an
Ontario Court of Appeal judgment that a Quebec resident's liability was governed by Quebec
law. Mr. Gagnon, however, had cross-claimed against Mr. Jensen and that cross-claim was not
discontinued.

The Ontario Court on a motion brought by Mr. and Mrs. Gagnon decided that the Ontario court
had jurisdiction, that the Ontario court should accept that jurisdiction, that Ontario law applied,
and that Mr. Gagnon was entitled to maintain his action against Mr. Jensen. Mr. Gagnon and
Mr. Jensen appealed on the questions of whether Ontario law applied and whether Mr. Gagnon
could maintain his cross-claim against Mr. Jensen. The Ontario Court of Appeal held that
Ontario law applied in the action against Mr. Gagnon but that the law of Quebec applied with
respect to any claim made against Mr. Jensen since he was not a resident of Ontario and the
accident occurred in Quebec.

Issue: Whether Mr. Lavoie should be governed by the tort law of Quebec, where the accident
happened, or Ontatrio, where the plaintiffs reside.

Held: The rule of private international law that should generally be applied in torts is the law of
the place where the activity occurred -- the lex loci delicti. However, it should be noted that the
lex loci delicti is substantive only. Matters of procedural law are governed by the forum where the
claim is heard. The lex loci delicti determines the tortious character of the conduct; the standard
of care; the duty owed to the plaintiff, causation, conditions for liability, contributory negligence
and assumption of risk, imputed negligence, joint liability, the question whether an interest is
entitled to legal protection, defenses including the statute of limitation, duty or privilege to act,
and survival of the action. With respect to damages and contribution, the lex loci delicti covers
questions of remoteness and the heads of damage, whereas their quantification, that is the measure
of damages, is governed by the lex fori.
4. US v. Ivey
120 OR (3d) 533 (Gen. Div.)
March 24, 1995

Doctrine: Judgments of the foreign country may be enforceable against a resident of another
country if that resident has a real and substantial connection in the foreign country.

Facts: Ivey, an Ontario resident, had a controlling interest in a Michigan corporation specializing
in waste disposal. He was subject to a default and summary judgment by the US court for
reimbursing the costs incurred in a clean up of waste in Michigan, undertaken by the US
Environment Protection Agency (EPA) for which his company was found responsible. The law
under which he was found civilly responsible for the costs incurred, is a stringent law without an
equivalent in Ontario – the defenses this statute permits are limited to force majeur or
acts/omissions by third parties in certain narrowly defined circumstances. Ivey claims he is not
responsible for the environmental waste damage as he was insufficiently in control of the activities
which caused the damage.

Ivey defended himself against enforcement of the US judgment saying that the US Disctrict court
lacked personal jurisdiction over him.

Issue: W/N the US judgment in favor of Ontario residents enforceable in Ontario.

Held: YES. US District court has jurisdiction because the commercial activity and the locus of the
law and the cause of action that draws on it, are both in Michigan thus there is sufficient real and
substantial connection. According to the Morgaurd precedent, this grants personal jurisdiction over
the defendant. Because the amounts sought from Ivey correspond directly to those spent on the
clean-up, they are a reimbursement obligation not a punishment. The Court ruled that “where
foreign law is applicable, Canadian courts will generally apply that law even if the result may be
contrary to domestic law”. As for the statute comparison, the similarities are more striking than
the differences and this actually works to weaken Ivey’s position. “While measures chosen by our
legislature do not correspond precisely with those chose by the US Congress, they are sufficiently
similar in nature to defeat any possible application of a public policy defense.
5. Kuwait Airways v. Iraqi Airways

2 AC 883 (HL)

May 16, 2002

Doctrine: When deciding an issue by reference to foreign law, the court of England must have a
residual power, to be exercised exceptionally, to disregard a provision in the foreign law when to
do otherwise would affront basic principles of justice and fairness which the court seeks to apply
in the administration of justice. Violation of international law is considered as against public
policy.

Facts: The plaintiff, Kuwait Airways Corporation (‘KAC’), was the owner of ten aircraft that were
situated at Kuwait International Airport at the time of the invasion of Kuwait by Iraqi military
forces in 1990. The aircraft were seized by the Iraqi forces, and the Iraqi Government ordered them
to be flown to Iraq. The Government, which is styled as the Revolutionary Command Council
(‘RCC’), then passed two resolutions proclaiming the sovereignty of Iraq over Kuwait. The RCC

also adopted Resolution 369 dissolving KAC and transferring all its property 
 worldwide,

including the 10 aircraft, to the state-owned Iraqi Airways Co. KAC commenced proceedings

against the Republic of Iraq and IAC claiming the return of 
 its 10 aircraft or payment of their

value, and damages. In 1991, 4 of the 10 aircraft were destroyed by a bombing other 
 6 were

evacuated to Iran. Following negotiations with the government of Iran, the 6 remaining aircraft
were eventually flown back to Kuwait, with KAC paying Iran for the cost of keeping, sheltering
and maintaining them.

Issue: W/N the English court has jurisdiction over the case filed by KAC against Iraqi airways.

Held: YES because resolution 369 issued by KAC is against public policy. When deciding an issue

by reference to foreign law, the court of England must 
 have a residual power, to be exercised

exceptionally, to disregard a provision in the foreign law when to do otherwise would affront basic
principles of justice and fairness which the court seeks to apply in the administration of justice.
The resolution was part and parcel of the Iraqi seizure of Kuwait and its assets and the assimilation
of these assets into the political, social and economic structure of Iraq. That this seizure and
assimilation were flagrant violations of rules of international law of fundamental importance is

beyond argument. 
 The acceptability of a provision of foreign law must be judged by

contemporary standards. The courts of this country should give effect to clearly established rules
of international law. Iraq’s fundamental breach of international law can properly cause the courts
to say that a law depriving those whose property has been plundered of the ownership of their
property in favor of the aggressor’s own citizens will not be enforced or recognized in proceedings
in this country.