Presented by: David McNevin Miller Canfield LLP AND. Joe Vernon Miller canfield paddock and stone LLP
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1 Presented by: David McNevin Miller Canfield LLP AND Joe Vernon Miller canfield paddock and stone LLP When will courts enforce foreign judgments? Bars to enforcement Limitation Period How to enforce a foreign judgment-action or Application? After Obtaining Judgment- How to Collect? 1
2 A foreign judgment is prima facie enforceable in Canada if: The foreign court had jurisdiction to deal with the issue; The judgment is final and conclusive; and The judgment is for an ascertainable sum of money, or if it is not a money judgment, its terms are sufficiently clear The Real and Substantial Connection Test Bealsv. Saldanha(2003) SCC72 Is there a real and substantial connection between the original court and the defendant; the cause of action, or the subject matter of the action? 2
3 A foreign judgment is final if the court issuing the judgment ceased to have the power to rescind, vary, or re-open the judgment. A foreign judgment may still be considered final and conclusive where the appeal period has not expired, or when an appeal is pending before the foreign court, unless a stay of execution has been granted. The possibility of an appeal is a bar to enforcement in the context of foreign arbitral awards. The obligation to pay the award becomes exigibleon the date the appeal period expires or, if an appeal is taken, the date of the appeal decision. Yugraneftvs. RexxManagement Corp 2010 SCC19 This means that a failure to make payment on that date would constitute non-performance of the obligation, and at that time enforcement proceedings may be brought. 3
4 non-monetary foreign judgments can also be enforced, depending on a number of factors, including: requirements of comity; whether the judgment requires the Canadian court to interpret foreign law; and the burden of enforcement on the Canadian judicial system. Pro Swing Inc. v. EltaGolf Inc SCC52 A foreign judgment may be impeached if it: Is based on foreign penal, revenue, or public law; Was obtained by fraud; Is contrary to natural justice; or If it violates public policy. 4
5 Notice is Key Most common defence to the enforcement of American judgments in Ontario: defendant received inadequate notice, and therefore the American judgment offends the principles of natural justice It is important for the plaintiff to arrange for personal service of the defendant with the American originating process in order to preempt this defence Limitations Act, 2002 governs in Ontario Two year basic limitation period The limitation period begins to runwhen the foreign judgment is a) final and res judicata in the foreign jurisdiction; and b) when it is conclusive on the merits Aforeign judgment may still be considered final and conclusive where the appeal period has not expired, or when an appeal is pending, as long as there is no stay of enforcement OZ Optics Ltd. v. Dimensional Communications Inc2004 CanLII (ON SC) 5
6 Two year basic limitation period applies Limitation period does not begin to run until the obligation to pay the award becomes exigible, which is the date the appeal period expires, or if an appeal is taken, the date of the appeal decision. Yugraneftv. RexxManagement Corp SCC19 In either instance (judgment or arbitral award) the limitation period will only run if the creditor knew or ought to have known that the injury warrants bringing a proceeding Ex. When did the creditor discover the debtor had assets in Canada? 6
7 Action or Application? Conflicting approaches in the case law Justice MacKenzie in Nuvexheld that where the Reciprocal Enforcement of Foreign Judgments Act does not apply, a foreign judgment may be enforced by action or application. Nuvex Ingredients Inc. v. Snack Crafters Inc. (2005) ONSC 1413 However, Justice Kane in Noel decided that the enforcement of a foreign judgment from a nonreciprocating state should be brought by action, not application Noël et Associés, S.E.N.C.R.L. v. Sincennes, 2012 ONSC
8 Applications are still being brought to enforce non-reciprocating foreign judgments. For example, in Johnson & Johnson Finance Corp. v. KavoussiEstate, a 2014 decision of the ONSC, the Court allowed the exact matter contemplated by Justice Kane in Noelto be brought by application. Another option is to commence an action, then bring a motion for summary judgment pursuant to Rule 20, requesting that the court find there is no genuine issue requiring a trial. 8
9 Examination in aid of execution; Writ of Seizure and Sale; Writ of Sequestration; Writ of Possession; Writ of Delivery; Notice Garnishment; and Contempt Orders Generally Principle of Comity the recognition of a judicial or legislative act of another nation that permits foreign judgments to be recognized in [the U.S.] Electrolines, Inc. v. Prudential Assurance Co., Ltd, 260 Mich. App. 144, 156 (2003) 9
10 Uniform Enforcement of Foreign Judgments Act MCL et seq Uniform Foreign-Country Money Judgments Recognition Act MCL et seq Application: Burden on party seeking recognition (1) Except as otherwise provided in subsection (2), this act applies to a foreign-country judgment to the extent that both of the following apply: (a) The judgment grants or denies recovery of a sum of money. (b) Under the law of the foreign country where rendered, the judgment is final, conclusive, and enforceable. MCL
11 (2) This act does not apply to a foreign-country judgment, even if the judgment grants or denies recovery of a sum of money, to the extent that the judgment is any of the following: (a) A judgment for taxes. (b) A fine or other penalty. (c) A judgment for divorce, support, or maintenance or other judgment rendered in connection with domestic relations. MCL Court must recognize a foreign-country judgment subject to certain exceptions: Burden is on the party resisting enforcement Court shall not recognize the foreign judgment if any of the following apply: (a) (b) (c) The judgment was rendered under a judicial systemthat does not provide impartial tribunals or procedures compatible with the requirements of due process of law. The foreign court did not have personal jurisdiction over the defendant. The foreign court did not have jurisdiction over the subject matter. MCL
12 Court may, but need not, recognize the foreign judgment if any of the following apply: (a) (b) (c) (d) The defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend. The judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case. The judgment or the cause of action on which the judgment is based is repugnant to the public policy of this state or of the United States. The judgment conflicts with another final and conclusive judgment Court may, but need not, recognize the foreign judgment if any of the following apply: (e) (f) (g) (h) The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be determined otherwise than by proceedings in that foreign court. If jurisdiction was based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action. The judgment was rendered in circumstances that raise substantial doubt about the integrity of the rendering court with respect to the judgment. The specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law. 12
13 Once recognized (1) At the time of the filing of the foreign judgment, the judgment creditor or his or her attorney shall make and file with the clerk of the court an affidavit setting forth the name and last known address of the judgment debtor and the judgment creditor. * * * * * * (4) A foreign judgment filed under this act shall not be enforced until 21 days after the date notice of the filing of the foreign judgment is mailed. Allianz Suisse Versicherungs-Gesellschaftv. Miller, 24 F.Supp.3d 670 (2014) Isackv. Isack, 274 Mich. App. 259 (2007) 13
14 Garnishment Creditor s Examination Fraudulent Conveyances Thank you David McNevin & Joe Vernon 14
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