Conflict of Laws

Introduction

Conflict of laws essentially refers to the body of rules within a national legal system that local courts would select as appropriate to govern disputes with a foreign element.  Conflict of laws is therefore not similar to public international law, and it is not a legal system regulating the relations between states but involves the assessment of a body of rules in a national legal framework towards the most appropriate rules to be selected to govern and resolve a dispute. Conflict of laws forms part of the private law of each country that deals with cases with a foreign element, and unlike public international law, private individuals are involved and not state entities. Three main issues involved in conflict of laws are:

• which court has jurisdiction to resolve the dispute;
• which law will be applied to the dispute; (this means that a court has a set of conflict of laws rules that it must apply to find the law which will apply to the dispute. These conflict of law rules are also referred to as choice of law rules); and
• is or will there be recognition and enforcement of the judgment. In this instance, we will apply legal theory to a scenario involving estate planning and wills. 

The problem statement

Let’s describe a scenario where the deceased enjoyed dual citizenship of South Africa and Serbia.  The deceased also owed a significant sum of money in Serbia, although she only had a South African will currently wound up by the executor of her estate.  Upon her death, a Serbian court proceeded with probate and since Serbia does not enjoy freedom of testation that sum of money was distributed to the deceased’s heirs, all South African citizens, and as a consequence was not available to be repatriated to South Africa to give effect to the deceased’s last wishes as stated in her will.   The question now arises of whether the South African authorities enjoy jurisdiction to overrule the Serbian court and to repatriate that sum of money already distributed through probate proceedings in Serbia in order to give effect to the deceased wishes as they were stated in her last will executed in this country. 

The legal framework

Money generally is seen as movable property, which serves as an important distinction from immovables for our scenario.  Under South African private international law, the choice-of-law rules as far as movables are concerned refer to the lex ultimi domicilii (domicile upon death) irrespective of where the asset is located, and the lex rei sitae (the law where the property is situated) regarding immovable assets.  In general, the law of the testator’s domicile will be applicable to movable property and the law of the lex rei sitae to immovable property. This approach is known as the so-called dualist approach to the conflict of laws, with the domicile serving as the connecting factor for movable property.  A will is, furthermore, interpreted by the law intended by the testatrix, which is presumed to be the law of her domicile at execution.  South African courts held, respectively in Estate Wright v Wright (1908) 25 SC 769 [774-775]), and in Wynn NO & Westminster Bank Ltd NO v Oppenheimer (1937 TPD 91 [100]), that the distribution of movable assets of the deceased is governed by the deceased’s lex domicilii at the time of her death, even if those movable assets are situated outside South Africa.   Available case law, therefore, proposes South African jurisdiction over the money held in Serbia at the time.   Considering furthermore that the deceased enjoyed dual citizenship of South Africa and Serbia, and indeed was domiciled in South Africa, the conclusion to be reached is that South African law applies to the money held in Serbia, seen from a South African perspective. 

Serbian law should also be taken into consideration, though.  Specifically, the probate proceedings in Serbia are regulated by the provisions of the Inheritance Act and by the provisions of the Law on Non-Contentious Proceedings of that country.  When it comes to the jurisdiction of Serbian courts for the probate proceedings with a foreign element, the rules are stipulated in the Serbian Law on Resolving Conflict of Laws with Regulations of other Countries.   A foreign element on the side of a deceased exists if the deceased was a foreign citizen or if she was a Serbian citizen who had an immovable or movable estate outside of Serbia at the time of death – which indeed is the case in our scenario.   In probate proceedings, the court determines who the heirs of the deceases are, which property makes up her estate, and which rights from the estate belong to heirs, legatees, and other persons. 

Jurisdictional analysis

For purposes of our scenario, seen from a South African perspective, lex domicilii governs succession rights with regards to movable assets found outside South Africa’s borders, which was the case in our scenario.  In contrast, Serbian courts have jurisdiction to hear cases relating to the movable assets of Serbian citizens if the movable property is situated within the territory of Serbia, again, as the case was in our scenario, or if a foreign authority does not have jurisdiction under the law of the country in which the property is situated, or has declined jurisdiction.  Importantly foreign judgments relating to moveable property will be recognised in South Africa, though, if the moveable property was within the foreign court’s jurisdiction at the commencement of the action, that being the basis of the foreign court’s jurisdiction, which also was the case here.   

Conclusion

This is a conflict of laws matter, and more than one interpretation is therefore possible, at least one each from the jurisdictions under review.  Yet, it is for this reason that rules exist for conflict of law matters, and following these rules to their logical conclusion often is difficult, cumbersome, costly and depending on the discretion of the parties involved.  From the aforementioned, however, given the Serbian Law on Resolving Conflict of Laws with Regulations of other Countries, it appears that a Serbian court at least in theory may have considered to relinquish its jurisdiction over the money held there by the deceased had a South African court on behalf of the deceased estate claimed jurisdiction.  To the question whether the Serbian court’s decision could have been challenged by a South African court for purposes of our scenario, the answer appears to be affirmative, but only so within the appeal period of fourteen days allowed by the Serbian court upon its order at the time.  The question of whether the Serbian court’s decision  in our scenario should have been challenged constitutes a practical and a normative matter, because variables such as costs, chances of success, the time it may have taken and consequential delays with the winding up of the deceased estate, to name those immediately relevant, may all have played a role in such a decision. 

Lessons to be learnt

The lesson, of course, is that everyone owing assets abroad should consider to maintain a separate wills for each of those countries where they owe meaningful assets, whether movables or immovables.  This lesson applies in particular when the testator is faced with countries without the freedom of testation, a legal dispensation signalling that assets will be distributed in accordance with each country’s rules of inheritance.  This, in its own turn, requires careful estate planning with the assistance of specialists with knowledge of private international law.  

Disclaimer

The information published on this website is provided as general information and does not constitute or should not be interpreted as providing advice.

Before we publish any information we make every effort to ensure that the information we publish is correct and true. Since the time of this publication new information may have become available and the information may not yet have been updated. Please consult with one of our professionals on any specific advice required.

We accept no responsibility for any loss or damage, whether direct, indirect or consequential, which might arise from reliance on the information published by us on these pages.

Please refer to the full terms and conditions of the website.

Copyright © Indevaldi. All rights reserved. For permission to reproduce any information, article or publication, please contact us info@indevaldi.co.za