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Appeal Court Dicta

Foreign Judgments - Common Law

. Agrest v. Pekker

In Agrest v. Pekker (Ont CA, 2023) the Court of Appeal briefly walked-through a straightforward foreign (Russian) judgment enforcement case:
[9] Recently, in early 2019, Mr. Agrest learned through a mutual acquaintance that Mr. Pekker has significant assets in Canada. Based on this new information, Mr. Agrest brought an application in Canada to enforce the Russian judgment.

[10] Following the hearing of the enforcement application, the Russian judgment was recognized and enforced.

[11] The application judge reviewed the applicable law and based his decision on Beals v. Saldanha, 2003 SCC 72 (CanLII), [2003] 3 S.C.R. 416. He found that Mr. Pekker had not made out the defence that he was denied natural justice during the proceedings in Russia. As such, the Russian proceedings were not contrary to Canadian notions of fundamental justice.

[12] We see no error in the application judge’s decision or reasoning.

[13] Throughout the Russian proceedings, Mr. Pekker was given adequate notice of the claim made against him and was granted the opportunity to defend the claim. Further, he had the opportunity to raise the issue of insufficient notice on appeal to the Moscow City Court. The appellate court made a factual finding that Mr. Pekker was given adequate notice, and Mr. Pekker did not avail himself of the opportunity to further appeal this finding in Russia.

[14] There is no evidence as to the arguments made and the evidence presented on the appeal. We see no basis on which to interfere with the application judge’s decision on either substantive or procedural grounds. In our view, the minimum standards of fairness were met in the Russian process.
. CSA8-Garden Village, LLC v. Dewar

In CSA8-Garden Village, LLC v. Dewar (Superior Court, 2013) the court briefly canvasses the procedure in Ontario courts for enforcing a foreign money judgment:
[33] Following Beals, the test for recognition and enforcement of foreign money judgments is as follows. First, the party seeking to enforce the foreign judgment must establish that the foreign court took jurisdiction according to Canadian conflict of laws rules, i.e. there must be a “real and substantial connection” between the subject matter of the litigation and the foreign jurisdiction. Second, the judgment must be for a fixed sum of money. Third, the judgment must be final and conclusive. Fourth, the party resisting the foreign judgment bears the burden of establishing any applicable defences, including fraud, public policy and lack of natural justice. See also Bank of Mongolia v. Taskin, 2011 ONSC 6083 (CanLII), [2011] O.J. No. 4572 (Div. Ct.), aff’d 2012 ONCA 220 (CanLII), [2012] O.J. No. 1469; Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52 (CanLII), [2006] 2 S.C.R. 612.
. H.M.B. Holdings Limited v. Antigua and Barbuda

In H.M.B. Holdings Limited v. Antigua and Barbuda (Ont CA, 2022) the Court of Appeal considered a 'richochet' judgment, a foreign judgment recognized for enforcement in another Canadian province and then sought to be enforced in Ontario - here under the Reciprocal Enforcement of Judgments Act (Act). That Ontario proceeding was denied, as were further appeals to the Supreme Court of Canada. The applicant now seeks to enforce the BC judgment under the common law. This extract of the case deals with the substance of the later Ontario common law proceedings [paras 23-31], and the court holds that the common law does not tolerate such foreign 'ricochet' proceedings [paras 32-57 (not extracted)]:
[23] This case raises the issue of the circumstances, if any, in which an Ontario court should recognize and enforce a recognition and enforcement judgment from another province pursuant to the common law. While there is a handful of cases where Canadian courts have permitted ricochet judgments, those cases do not directly address the court’s legal authority for doing so at common law. Accordingly, I start my analysis with a review of the general principles that apply to the recognition and enforcement of foreign judgments. I then apply the principles distilled from this review to the circumstances of this case. Finally, I address H.M.B.’s arguments that prior decisions in Canada have permitted ricochet judgments.

[24] As set out below, I have concluded that the common-law test for the recognition and enforcement of foreign judgments does not contemplate the viability of ricochet judgments. Accordingly, while I would uphold the motion judge’s decision dismissing H.M.B.’s action, I arrive at this outcome using a different path.

(1) General principles that apply to the recognition and enforcement of foreign judgments

[25] In Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (SCC), [1990] 3 S.C.R. 1077, the Supreme Court established that the test for determining whether a court in one province should recognize and enforce a judgment from another province is whether there is a “real and substantial connection” between the court that issued the judgment and the proceeding or the parties in the original jurisdiction: at pp. 1108-9. However, even where there is such a real and substantial connection, the enforcing court retains a residual discretion to refuse to recognize and enforce a judgment where doing so would create an injustice or be tantamount to an abuse of process. In adopting this approach, the court emphasized the importance of comity; namely, the need for the courts of one province to show deference and respect for judgments rendered by the courts of other provinces: Morguard, at pp. 1102-3.

[26] In Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416, the Supreme Court confirmed that the rationale for recognizing and enforcing interprovincial judgments in Morguard “is equally compelling with respect to foreign jurisdictions”: at para. 25. Again, the court emphasized that the rationale for recognizing and enforcing foreign judgments is comity; that is, the importance of respect between sovereign states: see Beals, at paras. 27-29, citing Morguard, at pp. 1096, 1107.

[27] Accordingly, in Beals, the court confirmed that the real and substantial connection test applies to the process by which Canadian courts may recognize and enforce judgments granted by courts in foreign jurisdictions. In applying this test, the court must first consider whether the foreign jurisdiction has a real and substantial connection with the defendant or the subject matter of the litigation: at paras. 37-39. Next, the court can refuse to recognize and enforce the foreign judgment if it was obtained by fraud, if the foreign court breached the rules of natural justice or if recognizing and enforcing the foreign judgment would be contrary to public policy: at paras. 35, 40. The court emphasized that the issue of public policy has a narrow application and is only to be invoked where it is appropriate for the court to condemn the foreign law on which the judgment is based: para. 75.

[28] More recently, in Chevron Corp. v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69, the Supreme Court reaffirmed that the real and substantial connection test applies to the recognition and enforcement of foreign judgments by Canadian courts. In Chevron, the Supreme Court addressed the issue of whether a Canadian court must have a real and substantial connection with the subject matter of the claim or the defendant before taking jurisdiction in an action for recognition and enforcement. Specifically, the court addressed whether a defendant must be present or have assets in the jurisdiction as a precondition to recognizing and enforcing a judgment in that jurisdiction. In that context, the court held that “there is no need to probe the relationship between the enforcing forum and the action or the defendant”: at para. 37. Instead, the enforcing court has jurisdiction over the defendant as long as there was effective service on the defendant against whom recognition and enforcement is sought: Chevron, at para. 36.

[29] The court explained the rationale for this approach by reviewing the differences between an original judgment and a recognition and enforcement judgment. The court noted that the role of the enforcing court is to facilitate enforcement, not to probe the merits of the original claim: Chevron, at para. 44. The court emphasized, at para. 46, that recognition and enforcement of foreign judgments is a highly localized phenomenon, and therefore nothing would be gained by mandating a link between the foreign dispute and the enforcing forum:
[E]nforcement is limited to measures ― like seizure, garnishment, or execution ― that can be taken only within the confines of the jurisdiction, and in accordance with its rules: [Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612], at para. 11; J. Walker, Castel & Walker: Canadian Conflict of Laws (6th ed. (loose-leaf)), at p. 11-52. The recognition and enforcement of a judgment therefore has a limited impact: as Walker states, “[a]n order enforcing a foreign judgment applies only to local assets” (p. 14-11). The enforcing court’s judgment has no coercive force outside its jurisdiction. Whether recognition and enforcement should proceed depends entirely on the enforcing forum’s laws. [Emphasis added.]
[30] At para. 49, the court in Chevron further emphasized the localized nature of recognition and enforcement proceedings, noting that each province controls the rules for recognizing and enforcing foreign judgments in its territory:
Enforcement is limited to the seizable assets found within the province. No constitutional concern about the legitimacy of this exercise of jurisdiction emerges. I acknowledge that, under provincial legislation, a recognition and enforcement judgment issued in one province may be capable of being “registered” in another province, thus offering some advantage to plaintiffs who have already successfully obtained a recognition and enforcement judgment. Nevertheless, the existence of such legislation does not alter the basic fact that absent some obligation to enforce another forum’s judgments, the judicial system of each province controls access to its jurisdiction’s enforcement mechanisms, whenever a foreign judgment creditor seeks to seize assets within its territory in satisfaction of a foreign judgment debt. [Emphasis added.]
[31] Accordingly, as a general principle, a court in one jurisdiction will recognize and enforce the judgments of another jurisdiction, as long as the original jurisdiction had a real and substantial connection with the claim or the defendant, and as long as none of the bars to recognition and enforcement referred to above are present.


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