Macmillan Inc v Bishopsgate Investment Trust Plc and Others (No 3): CA 2 Nov 1995

The question of ownership of a company is to be decided according to law of country where the company is incorporated. Conflict of laws rules are to be used to look to the issue in the case not the cause of action.
Staughton LJ said: ‘In any case which involves a foreign element it may prove necessary to decide what system of law is to be applied, either to the case as a whole or to a particular issue or issues. Mr. Oliver, for Macmillan Inc., has referred to that as the proper law; but I would reserve that expression for other purposes, such as the proper law of a contract, or of an obligation. Conflict lawyers speak of the lex causae when referring to the system of law to be applied. For those who spurn Latin in favour of English, one could call it the law applicable to the suit (or issue) or, simply, the applicable law.
In finding the lex causae there are three stages. First, it is necessary to characterise the issue that is before the court. Is it for example about the formal validity of a marriage? Or intestate succession to moveable property? Or interpretation of a contract?
The second stage is to select the rule of conflict of laws which lays down a connecting factor for the issue in question. Thus the formal validity of a marriage is to be determined, for the most part, by the law of the place where it is celebrated; intestate succession to moveables, by the law of the place where the deceased was domiciled when he died; and the interpretation of a contract, by what is described as its proper law.
Thirdly, it is necessary to identify the system of law which is tied by the connecting factor found in stage two to the issue characterised in stage one. Sometimes this will present little difficulty, though I suppose that even a marriage may now be celebrated on an international video link. The choice of the proper law of a contract, on the other hand, may be controversial.’
Auld LJ said: ‘Subject to what I shall say in a moment, characterisation or classification is governed by the lex fori. But characterisation or classification of what? It follows from what I have said that the proper approach is to look beyond the formulation of the claim and to identify according to the lex fori the true issue or issues thrown up by the claim and defence. This requires a parallel exercise in classification of the relevant rule of law. However, classification of an issue and rule of law for this purpose, the underlying principle of which is to strive for comity between competing legal systems, should not be constrained by particular notions or distinctions of the domestic law of the lex fori, or that of the competing system of law, which may have no counterpart in the other’s system. Nor should the issue be defined too narrowly so that it attracts a particular domestic rule under the lex fori which may not be applicable under the other system: see Cheshire and North’s Private International Law , 12th ed., pp. 45-46, and Dicey and Morris , vol. 1, pp. 38-43, 45-48.’ (p. 407 B/D)
‘I agree with the judge when he said [1995] 1 W.L.R. 978, 988: ‘In order to ascertain the applicable law under English conflict of laws, it is not sufficient to characterise the nature of the claim: it is necessary to identify the question at issue.’ Any claim, whether it be a claim that can be characterised as restitutionary or otherwise, may involve a number of issues which may have to be decided according to different systems of law. Thus it is necessary for the court to look at each issue and to decide the appropriate law to apply to the resolution of that dispute.’
Auld, Staughton LJJ
Ind Summary 11-Dec-1995, Gazette 29-Nov-1995, Times 07-Nov-1995, [1996] 1 WLR 387, [1995] EWCA Civ 55, [1996] 1 All ER 585
Bailii
England and Wales
Citing:
Appeal fromMacmillan Inc v Bishopsgate Investment Trust Plc and Others (No 3) ChD 1-Jul-1993
Bona fide chargees for value of shares situated in New York and held on trust for Macmillan were able, by application of New York law, to take the shares free of Macmillan’s prior equitable interest of which the chargees had had no notice. Where . .
CitedNorris v Chambres 1861
A company director had committed suicide; the claim was brought by his estate. The company had been established in England to work a Prussian coal mine, and the director had personally advanced a large sum towards its purchase. The company agreed to . .

Cited by:
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knight_axaQBD2009
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CitedGorjat v Gorjat ChD 29-Jun-2010
The claimant, daughters of the deceased by his first marriage challenged a transfer of a significant sum by their father before his death, saying that he lacked mental capacity. . .

These lists may be incomplete.
Updated: 03 June 2021; Ref: scu.83285