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Private International Law - Comity. Castillo v. Xela Enterprises Ltd.
In Castillo v. Xela Enterprises Ltd. (Ont CA, 2024) the Court of Appeal considers the issue of 'comity' between courts, here international courts:[72] Finally, the appellant argues that the contempt proceedings amount to the Canadian court punishing the appellant for either legitimately or illegitimately participating in the Panamanian criminal justice system, and that either way, that constitutes an interference with Panamanian sovereignty and is contrary to principles of international comity. The motion judge was correct to reject this submission as well.
[73] The doctrine of international comity is that “the Courts of one jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, not as a matter of obligation but out of mutual deference and respect”: R. v. Zingre, 1981 CanLII 32 (SCC), [1981] 2 S.C.R. 392, at p. 401. In Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, 1990 CanLII 29, at p. 1097, the Supreme Court identified the doctrine’s twin objectives: order and fairness. The court reiterated those objectives in Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, but stated that “order comes first. Order is a precondition to justice”: at p. 1058.
[74] In this case, the appellant was free to engage the Panamanian legal system as long as he abided by the provisions of the Order. The contemptuous conduct was making the Declaration to be used to initiate a criminal complaint against the Receiver without seeking leave of the court in Ontario, as required by the Appointment Order, para. 9. In addition, the evidence the appellant provided was misleading, incomplete and untruthful regarding his status with Xela and failed to reveal the appointment of the Receiver. Had the appellant sought and obtained leave and provided truthful evidence to the Panamanian authority, there would have been no basis to find contempt.
[75] I also reject the appellant’s argument that the court below “implicitly convert[ed] the Appointment Order into an anti-suit injunction”, and that this was a “serious breach of the principles of comity.” An anti-suit injunction is a remedy reserved for when a foreign court takes jurisdiction in circumstances that would cause a serious injustice: Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), 1993 CanLII 124 (SCC), [1993] 1 S.C.R. 897, at para. 30. Paragraph 9 of the Appointment Order, by contrast, is not concerned with ousting foreign jurisdiction in favour of Ontario, but rather with protecting the Receiver from inappropriate proceedings, foreign or local.
[76] There was no violation of international comity by making the contempt order against the appellant, which did not constrain the Panamanian authorities from conducting an investigation. The fresh evidence brought to this court is that the investigation proceeded but has now been terminated. . Mehralian v. Dunmore
In Mehralian v. Dunmore (Ont CA, 2023) the Court of Appeal considers (and dismisses) an appeal of an order that a marriage, recognized in Omani courts, was recognized in Ontario. In these quotes the court considers 'comity' between international courts:[26] In this case, the Divorce Recognition Judge’s finding that the applicant attorned to the jurisdiction of Omani courts is one of fact. He found that, although the applicant initially contested the jurisdiction of the Omani courts, she subsequently made a voluntary and rational choice to participate fully on the merits. This included litigating the merits of the divorce, in which she asserted that under Omani law her marriage to the respondent was invalid and that the respondent had made false statements in the course of obtaining the divorce. The applicant also sought and obtained relief from the Omani court, through the award of custody of M.
[27] The applicant has failed to identify any palpable or overriding error in the Divorce Recognition Judge’s finding that she attorned to the jurisdiction of the Omani courts. Rather, the applicant invites this court to substitute its own factual finding in place of that of the Divorce Recognition Judge.
[28] The Divorce Recognition Judge’s finding was firmly grounded in the factual record. Indeed, as he pointed out, his findings in this regard were based on facts that were essentially uncontested. I see no basis for disturbing his finding that the applicant attorned to the jurisdiction of Omani courts.
[29] In my view, this is sufficient to dispose of this appeal.
[30] Parties to an action are free to select or accept the jurisdiction in which their dispute is to be resolved: Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416, at para. 37. As the Divorce Recognition Judge noted, a party that has voluntarily attorned to the jurisdiction of a court has consented to having the issues in dispute determined by that court. Where jurisdiction is established through such consent, as in this case, it is unnecessary to consider whether there are other grounds upon which a court’s jurisdiction might be either recognized or challenged, such as whether the parties had a real and substantial connection with the jurisdiction in question: Wolfe v. Pickar, 2011 ONCA 347, 332 D.L.R. (4th) 157, at paras. 43-44.
[31] For the same reason, the Divorce Recognition Judge did not err in his finding that the applicant could not relitigate issues that she had unsuccessfully raised before the Omani court. These issues included whether the applicant had received valid notice of the Omani divorce and whether the respondent had committed fraud in obtaining the divorce.
[32] Although the Divorce Recognition Judge did consider whether the Omani divorce should not be recognized in Ontario because the divorce laws of Oman are contrary to Canadian public policy, in my view it was unnecessary for him to do so. This is because consent to the jurisdiction of the foreign court necessarily involves consent to the laws applicable in that jurisdiction.
[33] The Divorce Recognition Judge found that although the applicant was not required to agree that the validity of the parties’ divorce should be decided by the Omani courts, she voluntarily chose to do so. In so doing, she agreed to have the validity of the divorce determined in accordance with Omani law. Having consented to the application of Omani law, the applicant cannot now argue that the decision of the Omani court should not be recognized in Ontario because the law on which it was based is contrary to Canadian public policy.
[34] I would therefore dismiss the applicant’s appeal of the Divorce Recognition Order. . Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada
In Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada (Ont CA, 2022) the Court of Appeal considered an appeal in an international insurance case where an insured sued 22(!) insurers, and where the dispute was whether Ontario or New York had jurisdiction. In this quote the court considers the doctrine of 'comity' as it is an aspect of private international law:[22] As a starting point, we comment on international comity – a set of guiding principles underpinning the private international legal order. Based on the customs of mutual deference and respect between nations, “comity attenuates the principle of territoriality”: Spar Aerospace Ltd v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 S.C.R. 205, at para. 15. The Supreme Court has observed that international comity is at the root of the doctrines of both jurisdiction simpliciter and forum non conveniens: Spar Aerospace, at para. 21.
[23] In Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (SCC), [1990] 3 S.C.R. 1077, at para. 31, p. 1096, La Forest J. writing for the court, accepted the meaning of “comity” articulated by the Supreme Court of the United States. in Hilton v. Guyot, 159 U.S. 113 (1895), at pp. 163-164:“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 ... [24] La Forest J. also reiterated the Supreme Court’s approval in Zingre v. The Queen, 1981 CanLII 32 (SCC), [1981] 2 S.C.R. 392, of Chief Justice Marshall’s statement in The Schooner Exchange v. M'Faddon, 11 U.S. (7 Cranch) 116 (1812), at para. 31, p. 1097:“[C]ommon interest impels sovereigns to mutual intercourse” between sovereign states. In a word, the rules of private international law are grounded in the need in modern times to facilitate the flow of wealth, skills and people across state lines in a fair and orderly manner. [25] La Forest J. went on to note that “[t]he ultimate justification for according some degree of recognition is that if in our highly complex and interrelated world each community exhausted every possibility of insisting on its parochial interests, injustice would result and the normal patterns of life would be disrupted”, citing Arthur T. von Mehren and Donald T. Trautman, “Recognition of Foreign Adjudications: A Survey and A Suggested Approach” (1968) 81 Harv. L. Rev. 1601, at p. 1603. In Tolofson v. Jensen; Lucas (Litigation Guardian of) v. (Gagnon), 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, at para. 40, p. 1049, La Forest J. added an important note: “To prevent overreaching, however, courts have developed rules governing and restricting the exercise of jurisdiction over extraterritorial and transnational transactions”.
[26] Comity rests on the assumption of reciprocity and can be refused where reciprocity is not forthcoming: Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), 1993 CanLII 124 (SCC), [1993] 1 S.C.R. 897, at para. 56, p. 934. These principles remain in force. In Chevron Corp. v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69, the court repeated an earlier observation that “ideas of ‘comity’ are not an end in themselves, but are grounded in notions of order and fairness to participants in litigation with connections to multiple jurisdictions”: at para. 52.
[27] It is a truism that more than one place may have jurisdiction simpliciter over a dispute. And comity has sometimes led Canadian courts to defer (that is, to decline to exercise their own jurisdiction) when a foreign court has accepted jurisdiction.
[28] Two decisions of this court provide a useful example. In Kaynes v. BP, plc, 2014 ONCA 580, 122 O.R. (3d) 162, leave to appeal refused, [2014] S.C.C.A. No. 452, this court stayed an Ontario class action in favour of a pending class action in the U.S. based on very similar allegations, covering substantially the same period, and embracing the claims of all the BP shareholders. However, when the American class action was dismissed on a procedural motion unrelated to jurisdiction, this court reinstated the Ontario class action: Kaynes v. BP, plc, 2016 ONCA 601, 133 O.R. (3d) 29.
[29] But comity does not entail that a Canadian court will always defer to a foreign court’s decision to take jurisdiction: Teck Cominco Metals Ltd. v. Lloyd's Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321, at para. 23.
[30] Teck Cominco is in some ways a mirror reflection of this case. Teck Cominco was a Canadian mining company whose operations in British Columbia caused environmental damage in the United States. The environmental damage led to an American class action against Teck Cominco. The company sued its insurers in Washington State after they refused to defend it there. The insurers started a parallel proceeding in British Columbia seeking to clarify their obligations. The American court asserted jurisdiction first and refused the insurers’ motion to stay the proceedings in favour of the British Columbia court. The Canadian courts also refused to stay the proceedings. The matter was appealed to the British Columbia Court of Appeal and then to the Supreme Court. Both courts agreed that an American court’s assertion of jurisdiction was not determinative of a Canadian court’s decision to stay. We understand that the proceedings in both jurisdictions settled shortly before duplicate trials were to start.
[31] The result in Teck Cominco was not ideal because the parties were compelled to litigate in two jurisdictions. However, this outcome is not inconsistent with comity in the Canadian understanding of the concept. We return to Teck Cominco in the forum non conveniens analysis. . Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada
In Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada (Ont CA, 2022) the Court of Appeal considered comity, as an aspect of forum non conveniens international jurisdiction, in a complex international litigation:[10] The critical issue is which of Ontario or New York is, on all the facts, the more convenient forum in which to try the case, based on the usual principles, in which comity plays a role.
[11] As this court observed in James Bay Resources Ltd. v. Mak Mera Nigeria Ltd., 2015 ONCA 781, 128 O.R. (3d) 198, at paras. 11-13, following Teck Cominco Metals Ltd. v Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321, at paras. 21, 29, comity is not a stand-alone factor but is part of the case-specific assessment of forum non conveniens. Vale relies particularly on Teck Cominco, where the Supreme Court rejected the argument that the assumption of jurisdiction by a U.S. District Court was dispositive, holding instead, at para. 31, that this was only one factor to be considered. See also Club Resorts Ltd. v Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572.
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[14] Not much, if anything, should turn on which action was started first (New York), or which jurisdiction first issued a decision on forum non conveniens (Ontario). The Supreme Court admonishes in Teck Cominco, at paras. 29-30, that this form of competition between jurisdictions is wrong and unprincipled. The issue of which court should decide the litigation should be determined on true forum non conveniens principles:Finally, policy considerations do not support making a foreign court’s prior assertion of jurisdiction an overriding and determinative factor in the forum non conveniens analysis. To adopt this approach would be to encourage a first-to-file system, where each party would rush to commence proceedings in the jurisdiction which it thinks will be most favourable to it and try to delay the proceedings in the other jurisdiction in order to secure a prior assertion in their preferred jurisdiction. Technicalities, such as how long it takes a particular judge to assert jurisdiction, might be determinative of the outcome. In short, considerations that have little or nothing to do with where an action is most conveniently or appropriately heard, would carry the day. Such a result is undesirable and inconsistent with the language and purpose of s. 11 [of the applicable legislation], discussed above.
Also, the extent to which approaches to the exercise of jurisdiction differ on an international level also weighs in favour of rejecting Teck’s approach. A distinction should be made between situations that involve a uniform and shared approach to the exercise of jurisdiction (e.g. interprovincial conflicts) and those, such as the present, that do not. In the latter, blind acceptance of a foreign court’s prior assertion of jurisdiction carries with it the risk of declining jurisdiction in favour of a jurisdiction that is not more appropriate. A holistic approach, in which the avoidance of a multiplicity of proceedings is one factor among others to be considered, better serves the purpose of fair resolution of the forum non conveniens issue with due comity to foreign courts. [15] Another, more graphic, way of putting the point is that courts should avoid facilitating an “unseemly race by each party to trial and judgment in the forum of its choice”: McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del. 1970).
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