In the recent Court of Appeal ruling of H.M.B. Holdings Limited v. Antigua and Barbuda, the Court of Appeal for Ontario considered whether an Ontario court should recognize and enforce a recognition and enforcement judgment (Ricochet Judgment) from another province pursuant to the common law.
Background:
The dispute between these parties has had a long history in the Ontario Courts and the Supreme Court of Canada.
The Applicant H.M.B. brought an application to have an enforcement judgment of the province of British Columbia (B.C.) recognized in Ontario. Pursuant to default proceedings, the Supreme Court of B.C. recognized and enforced a foreign judgment issued by the Judicial Committee of the Privy Council (the Privy Council).
The Respondent, the Attorney General of Antigua and Barbuda (Antigua) expropriated property owned by the appellant, located in Antigua and Barbuda. The Privy Council awarded compensation to H.M.B. for the expropriation.
Antigua did not defend or respond to H.M.B.’s recognition proceedings in B.C. and H.M.B. obtained a recognition judgment by default proceedings. H.M.B. then sought to have the judgment recognized in Ontario pursuant to the Reciprocal Enforcement of Judgments Act, (the REJA). That application and the appeals of H.M.B. arising therefrom, including to the Supreme Court of Canada, were unsuccessful.
See our other blogs regarding the other recognition rulings involving these parties for a full canvass of the background and the rulings in those cases, including our blogs on: the Court of Appeals ruling on REJA; the Supreme Court of Canada’s Ruling on REJA; and the Superior Court’s Ruling from which this Appeal arose.
The Appeal:
Having failed to have the judgment recognized in Ontario via the REJA, H.M.B. brought an action to recognize the B.C. Judgment in Ontario pursuant to common law. The Superior Court refused to do so. H.M.B. appealed that ruling to the Ontario Court of Appeal.
Importance of Ruling:
This is the first case considered by the Court of Appeal for Ontario that directly addresses the court’s legal authority for recognizing a Ricochet Judgment at common law.
Decision:
The Court held that the common-law test for the recognition and enforcement of foreign judgments does not contemplate the viability of Ricochet Judgments.
The Court of Appeal first summarized the common law legal principles which apply to the recognition of foreign judgments as set out in the Supreme Court of Canada decisions of Morguard Investments Ltd. v. De Savoye (Morguard); Beals v. Saldanha (Beals); and Chevron Corp v. Yaiguaje (Chevron).
The Court of Appeal citing the Supreme Court’s ruling in Chevron, held that the role of the enforcing court is to facilitate enforcement and that recognition and enforcement is a highly localized phenomenon. As such, nothing would be gained by mandating a link between the foreign dispute and the enforcing forum
Enforcement 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. It applies only to local assets and has no coercive effect outside of it’s jurisdiction.
The Supreme Court of Canada in Chevron was also cited by the Court of Appeal for the proposition that the existence of legislation that enables the “registration” of a judgment from another province 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.
The Court of Appeal based on the above rationale reiterated that as a general principle, recognition in one jurisdiction still requires an analysis of whether the original jurisdiction had a real and substantial connection with the claim or the defendant and whether any of the bars to recognition are present.
The Court of Appeal concluded that to have the B.C. court’s recognition judgment enforced in Ontario, would circumvent the proper inquiry of whether Ontario recognition laws are available to assist H.M.B. access to assets in Ontario to satisfy the original privy council judgment.
In so holding the Court of Appeal opined that the B.C. recognition judgment only decided whether the Privy Council Judgment should be recognized in B.C. according to the laws of B.C., and that approaching recognition and enforcement judgments (Ricochet Judgments) in the same way as original foreign judgments may deprive defendants of valid defences that would have otherwise been available if the recognition and enforcement of the original foreign judgment was sought in Ontario. The Court of Appeal cited a limitation period defence as a prime example and applicable to the case at bar.
The Court of Appeal citing Professor Janet Walker’s Canadian Conflict of Law, loose-leaf (2020-Rel. 82-9), 6th ed., Vol. 1 (Toronto: LexisNexis Canada Inc., 2021), § 14.1, at p. 14-2, emphasized the localized nature of recognition rulings, in holding that the determination of whether an original judgment should be recognized: must be made by each court in accordance with its own law. This precludes the enforcement of enforcement orders (ricochet judgments) whereby the enforceability of the judgment is measured not by the original judgment but by the initial enforcement judgment.
The Applicants concern in seeking recognition of the original judgment was the real prospect that Ontario’s two-year limitation period had been missed. The Court acknowledged that B.C. by contrast had a ten-year limitation period by which a foreign judgment can be recognized but rejected the notion of an applicant being able to thereby improperly circumvent the limitation period and deprive the respondent of a legitimate defence. However, the Court left the door open for the applicant to make a discoverability argument on the limitation issue, in the event H.M.B. moved to have the original judgment recognized in Ontario pursuant to common law principles.
Conclusion:
The door to the recognition of Ricochet Judgments appears to have been firmly closed by the Court of Appeal for Ontario.
It remains to be seen as to whether this decision will: mean the end of the enforcement efforts by H.M.B in Ontario; or whether H.M.B will elect to commence a further appeal of this ruling to the Supreme Court of Canada, as it did the previous ruling of the Court of Appeal made regarding the applicability of the REJA; or whether H.M.B. will now bring an application to have the Privy Council Decision recognized in Ontario, based on a discoverability argument.
A Supreme Court of Canada ruling on the issue of enforceability of Ricochet Judgments pursuant to common law may be helpful and would have broader national implications on the recognition of these types of judgments.
Do you need help with having a foreign judgment recognized and enforced in Ontario? The lawyers at Gilbertson Davis have experience in representing parties seeking to enforce foreign judgments in Ontario.
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