Jurisdiction of Courts (Foreign Land) Act 1989

The Act primarily affects three classes of litigants and their advisers.

First, parties to civil disputes whose underlying transaction or alleged wrong has a connection to land outside New South Wales but who have a jurisdictional nexus with NSW. This includes residents of NSW who own or contract in respect of land in other Australian States, New Zealand, the United Kingdom, or any foreign country. It also catches companies registered in NSW or carrying on business here whose directors or officers are sued in relation to foreign immovable property.

Second, legal practitioners—particularly commercial litigators, property lawyers and equity specialists—who must now advise clients that the old “foreign land = no jurisdiction” rule no longer applies in NSW. The Act alters the threshold advice given at the pleading and forum-selection stages. Practitioners in jurisdictions that retain a version of the Mozambique rule (for example, certain Australian States that have not enacted equivalent legislation) must be alert to the differential treatment.

Third, judges and court administrators in the Supreme Court, District Court and, to a lesser extent, the Local Court. The legislation requires them to distinguish between the now-abolished jurisdictional bar and the residual discretion to decline jurisdiction on appropriateness grounds. In practice, this has led to an increase in contested forum applications in cases with an international or interstate immovable-property element.

The Act has indirect effects on foreign landowners and foreign courts. A defendant who owns land in a jurisdiction that still adheres to the strict Mozambique rule may find themselves defending in NSW even though the land itself cannot be the direct subject of an in rem order. Conversely, courts in the situs jurisdiction may be asked to recognise or enforce consequential orders made by an NSW court (for example, an order that a trustee transfer foreign land in accordance with an equitable obligation). The Act therefore subtly shifts the balance of judicial comity in cross-border property disputes.

It does not affect criminal proceedings, public-law challenges to administrative decisions, or statutory schemes that contain their own extraterritoriality provisions (for example, the Real Property Act 1900 (NSW) or Commonwealth native-title legislation). Nor does it bind the Commonwealth or other States directly; each must decide whether to enact parallel legislation or rely on common-law developments.

The Act creates no new substantive duties or rights in the sense of obligations owed between citizens. Its effect is to enlarge the jurisdictional rights of potential plaintiffs and to confirm the procedural rights of defendants to argue forum non conveniens.

Plaintiffs now enjoy the right to invoke the jurisdiction of any NSW court without the Mozambique rule being raised as a complete bar. This is not an absolute right; it is contingent upon the existence of an independent basis for jurisdiction (personal jurisdiction, submission, or a statutory long-arm provision). Once that basis exists, s 3 removes what was previously an insuperable obstacle.

Defendants retain the important right under s 4 to apply for a stay or dismissal on the ground that NSW is not the appropriate forum. The statutory language mirrors the test in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 and subsequent authorities: the defendant must show that another forum is clearly or distinctly more appropriate. The existence of foreign land is now merely one factor—albeit often a powerful one—to be weighed in the Spiliada/Voth balancing exercise, rather than an automatic jurisdictional defect.

Courts themselves are placed under a duty to consider the appropriateness discretion. The words “is not required to exercise jurisdiction” in s 4 are permissive rather than mandatory, but once a party raises the issue, the court must engage with it. Failure to do so would constitute an error of law reviewable on appeal.

There are no reporting obligations, licensing requirements or ongoing compliance duties of the kind found in modern regulatory statutes. The Act is self-executing upon proclamation and operates as a standing removal of a common-law rule.

The Act contains no offence provisions, no civil penalty regime and no enforcement machinery. It is not a regulatory statute. Non-compliance is therefore impossible in the conventional sense. The only “sanction” is the risk that a court will decline jurisdiction under s 4, leaving the plaintiff to recommence proceedings in a more appropriate forum with the attendant cost and delay.

Because the Act is jurisdictional, an erroneous failure to apply s 3 (that is, wrongly treating the Mozambique rule as still operative) would render any subsequent judgment a nullity for want of jurisdiction, subject to appeal or collateral attack. Conversely, an erroneous refusal to exercise the s 4 discretion could found an appeal on House v The King grounds or, in the appellate context, a claim that the discretion miscarried.

Enforcement of any orders ultimately made under the enlarged jurisdiction remains governed by the ordinary law: common-law recognition, registration under the Foreign Judgments Act 1991 (Cth) where applicable, or reciprocal enforcement arrangements. The Jurisdiction of Courts (Foreign Land) Act 1989 itself plays no role in that subsequent stage.

The Act operates as a carve-out from the common law of jurisdiction. It sits alongside, and is reinforced by, the Service and Execution of Process Act 1992 (Cth) for interstate matters and the Trans-Tasman Proceedings Act 2010 (Cth) for New Zealand. In federal jurisdiction, the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and its State counterparts interact indirectly: once an NSW court has jurisdiction under the 1989 Act, cross-vesting considerations may still lead to a transfer to another Australian court.

The statute does not disturb choice-of-law rules. The lex situs continues to govern title to immovable property (Potter v Broken Hill Pty Co Ltd (1906) 3 CLR 479). Equitable claims, however, may be governed by the law of the forum or the proper law of the obligation, subject to the principle that a court will not make orders that contradict the lex situs (Nabbs v Black [2022] NSWSC 456 at [78]).

In the international context, the Act must be read with the common-law rules on foreign sovereign immunity and the Foreign States Immunities Act 1985 (Cth). A foreign state’s immovable property situated in Australia may still attract immunity, but the Act removes any additional Mozambique-based objection where the land is overseas.

The legislation has been cited in support of the more liberal approach to jurisdiction seen in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 and subsequent decisions. It also interacts with the Civil Procedure Act 2005 (NSW), particularly ss 5 and 6 on the overriding purpose, when courts are considering whether to stay proceedings under s 4.

No direct conflict with Commonwealth legislation arises because the regulation of State court jurisdiction over foreign land falls within State legislative competence. The Act is therefore not subject to s 109 inconsistency.

The Act has remained virtually unamended since its commencement on 1 January 1990. The only formal change has been the updating of its short title and citation to conform with modern drafting practice under the Interpretation Act 1987 (NSW). No substantive amendments have been made because the policy underlying the abolition of the Mozambique rule has not been revisited. The rule was widely regarded as an anachronism even in 1989, reflecting 19th-century imperial notions of sovereignty over land that had little relevance in a modern federation or globalised economy.

The New South Wales Law Reform Commission’s 1984 report Foreign State Immunity and its earlier work on jurisdiction provided the intellectual foundation. The Commission noted that the rule produced arbitrary results: a contract dispute concerning land in Victoria could not be heard in Sydney even if both parties lived in the same suburb. The 1989 Act was the legislative response.

There has been no recent review or amendment because subsequent case law has confirmed the Act’s utility without exposing major defects. Courts have applied it to disputes ranging from family-law property settlements involving overseas real estate to complex commercial joint-venture litigation. The absence of amendment also reflects the fact that the forum non conveniens safeguard in s 4 has proved sufficiently flexible to prevent forum-shopping.

The leading case remains Mansour v Mansour (1990) 20 NSWLR 497, decided shortly after commencement. The Supreme Court confirmed that s 3 abolished the rule for both in personam and (to the extent possible) in rem claims, but emphasised that the Act did not authorise the making of orders directly affecting foreign title registers. Powell J observed that the statute “sweeps away the Mozambique rule root and branch” but leaves intact the lex situs choice-of-law principle.

Subsequent decisions have tested the boundaries. In BHP Billiton Ltd v Schultz (2004) 221 CLR 400 the High Court, while dealing with a different statutory regime, cited the 1989 Act as an example of legislative willingness to expand jurisdiction over matters with interstate elements. In Valceski v Valceski [2006] NSWSC 1405, Brereton J applied the Act to a family-law dispute involving land in Croatia, holding that the existence of foreign immovable property did not oust jurisdiction but was a significant factor in the s 4 discretion.

Controversy has occasionally arisen in the context of native-title and indigenous land claims. Commentators have asked whether the Act permits NSW courts to adjudicate claims brought by Australian Aboriginal groups in respect of traditional land now situated in Papua New Guinea or other Pacific jurisdictions. The better view is that s 3 removes the jurisdictional bar but that the Mabo principles and the Native Title Act 1993 (Cth) are territorially limited.

Another area of academic debate concerns the relationship between the Act and the Hague Convention on Choice of Court Agreements. Because the Convention deals with exclusive jurisdiction clauses, a clause nominating a foreign court for a dispute concerning land may still engage the s 4 discretion. No superior-court decision has yet authoritatively resolved the interaction.

There has been no constitutional challenge. The legislation is plainly within State power under s 107 of the Australian Constitution and does not purport to affect federal judicial power.

Most practitioners still instinctively assume that foreign land equals automatic jurisdictional difficulty. The single biggest “gotcha” is failing to plead and prove an independent basis of jurisdiction before relying on the 1989 Act. Section 3 is not a long-arm statute; it merely removes one historical barrier. Many pleadings are struck out not because of the Mozambique rule but because the plaintiff cannot establish personal jurisdiction or a recognised gateway under UCPR r 10.2.

A second trap is believing that the Act allows direct in rem actions. Courts have repeatedly stated that an NSW court will not order the transfer of title to foreign land or issue a writ of possession over foreign real estate. The relief must be framed in personam—specific performance, constructive trust, damages, or an order to execute foreign documents. Failure to frame relief correctly can lead to the action being dismissed even though jurisdiction exists.

Third, the s 4 discretion is not a simple “convenience” test. In Renault v Zhang the High Court emphasised that the plaintiff’s choice of forum should not be displaced unless the defendant demonstrates that the foreign forum is clearly more appropriate. Foreign land is a weighty factor but not decisive if, for example, all witnesses and documents are in NSW and the defendant has submitted to NSW jurisdiction by contract.

A fourth subtlety is the interaction with anti-suit injunctions. Because the Act enlarges jurisdiction, an NSW court may be more willing to grant an anti-suit injunction to restrain proceedings in the situs jurisdiction where the NSW proceeding was commenced first and the parties have a contractual connection with NSW. This power must be exercised with extreme caution given comity concerns (CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345).

Finally, practitioners acting for foreign defendants sometimes overlook that the Act applies to land situated in other Australian States. The old rule applied equally to interstate land. The 1989 Act therefore quietly facilitates a significant volume of intra-Australian property litigation that would once have required proceedings in the Supreme Court of the situs.

Compliance is not onerous because the statute is enabling rather than prescriptive.

1. Identify the jurisdictional foundation first. Before commencing, confirm that the court has personal jurisdiction over the defendant or that a statutory long-arm provision applies. Only then rely on the 1989 Act to overcome any foreign-land objection.

2. Frame relief in personam. Draft pleadings and prayers for relief so that any order can be satisfied by the defendant’s personal action (executing a transfer, paying money, creating a trust). Avoid language that sounds like an in rem claim over foreign title.

3. Anticipate a forum-non-conveniens application. Prepare evidence on the location of witnesses, documents, the governing law, and the practical enforceability of any judgment in the foreign jurisdiction. The s 4 discretion will usually be the real battleground.

4. Consider parallel proceedings and lis alibi pendens. Where proceedings are already on foot in the situs jurisdiction, evaluate whether an anti-suit injunction or a stay is the appropriate response. The 1989 Act does not preclude such applications.

5. Advise on recognition and enforcement at the outset. Clients must understand that a favourable NSW judgment may still require fresh proceedings or registration in the foreign country. The Act removes a barrier to hearing the case; it does not guarantee extraterritorial effect.

6. Check federal overlays. In matters involving corporations, bankruptcy or family law, ensure that the specific statutory regime (Corporations Act, Bankruptcy Act, Family Law Act) does not contain its own jurisdictional limits that the 1989 Act cannot override.

7. Keep limitation periods in mind. Because the Act operates retrospectively under s 5, a cause of action that would have been statute-barred only in the foreign jurisdiction may still be litigated in NSW if the NSW limitation period has not expired. Conversely, foreign limitation statutes may be applied as substantive law under the Choice of Law (Limitation Periods) Act 1993 (NSW).

For corporate counsel and government lawyers, the simplest compliance measure is to maintain a checklist that asks, for any dispute with an immovable-property element: (a) situs of land, (b) independent basis of NSW jurisdiction, (c) whether relief can be framed in personam, and (d) whether a s 4 application is likely and how it will be met. Regular training for litigation teams on the distinction between the abolished rule and the surviving discretion is also advisable.

In conclusion, the Jurisdiction of Courts (Foreign Land) Act 1989 is a model of economical legislative drafting. Its continued relevance more than three decades after enactment demonstrates that sometimes the most effective reform is the simple removal of an outdated common-law obstacle.