COURT OF APPEAL FOR ONTARIO

Transcription

1 COURT OF APPEAL FOR ONTARIO CITATION: Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44 DATE: DOCKET: C61847 BETWEEN Larry M. Belowus, for the appellant David M. McNevin, for the respondent Heard: November 7, 2016 Strathy C.J.O., Pardu and Brown JJ.A. Independence Plaza 1 Associates, L.L.C. and John Figliolini Applicant (Respondent in appeal) Respondent (Appellant) On appeal from the judgment of Justice Thomas J. Carey of the Superior Court of Justice, dated February 5, Strathy C.J.O.: [1] This appeal raises two questions: (a) What limitation period applies to a proceeding on a foreign judgment in Ontario? and (b) When does that limitation period begin to run?

2 Page: 2 [2] The motion judge found that the limitation period was the two-year basic limitation period specified in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. It began to run when the appeal of the foreign judgment was dismissed. [3] For the reasons that follow, I would dismiss the appeal and answer the questions it raises as follows: A. BACKGROUND (a) A two-year limitation period applies to a proceeding on a foreign judgment; and (b) The limitation period begins to run, at the earliest, when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision. The time may be longer if the claim was not discovered within the meaning of s. 5 of the Limitations Act, 2002, until a date later than the appeal decision. [4] On January 24, 2013, the respondent obtained a judgment against the appellant in the New Jersey Superior Court for the payment of US$115,248. An appeal to the Appellate Division was dismissed on July 17, [5] On May 1, 2015, the respondent brought an application in the Ontario Superior Court of Justice to recover damages based on the New Jersey judgment, in an equivalent amount expressed in Canadian dollars. The application was commenced more than two years after the New Jersey judgment was rendered, but less than two years after the dismissal of the appeal.

3 Page: 3 [6] The appellant pleaded that the proceeding was time-barred. He argued that the limitation period was two years under s. 4 of the Limitations Act, 2002 and that time ran from the date of the first-instance New Jersey judgment. The result, he said, was that the limitation period expired before the application was commenced in Ontario. [7] The application judge rejected this defence and granted judgment in favour of the respondent. B. THE APPLICATION JUDGE S REASONS [8] The application judge held that the proceeding on the New Jersey judgment was in time because it was commenced within two years of the dismissal of the New Jersey appeal. [9] He found support for his decision that time ran from the date of the New Jersey appeal in Part III, Art. III, s. 1 of the Reciprocal Enforcement of Judgments (U.K.) Act, R.S.O. c. R.6 ( REJUKA ), which provides that a judgment of a United Kingdom court may be enforced in Ontario within six years after the date of judgment or, where there have been proceedings by way of appeal against the judgment, after the date of the last judgment given in those proceedings (emphasis added). [10] He also found support in the Supreme Court of Canada s decision in Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19, [2010] 1 S.C.R. 649.

4 Page: 4 Rothstein J. held at para. 57 that a judgment debtor s non-performance of the obligation created by a foreign arbitration judgment is only discoverable under the Alberta Limitations Act, R.S.A. 2000, c. L-12, on the date the appeal period expires or, if an appeal is taken, the date of the appeal decision (emphasis added). [11] In the application judge s view, it would be inefficient and promote a multiplicity of proceedings to require a foreign judgment creditor to commence an Ontario proceeding pending an appeal of the underlying judgment. [12] The application judge found it unnecessary to consider the respondent s alternative argument that its proceeding on the New Jersey judgment fell under s. 16(1)(b) of the Limitations Act, 2002, which states that there is no limitation period in respect of a proceeding to enforce an order of a court, or any other order that may be enforced in the same way as an order of a court. He suggested, however, that this court might wish to reconsider its decision in Lax v. Lax (2004), 70 O.R. (3d) 520 (C.A.), which dealt with the limitation period for a proceeding on a foreign judgment under the predecessor to the Limitations Act, 2002.

5 Page: 5 C. THE SUBMISSIONS OF THE PARTIES (1) The Appellant [13] The appellant submits that the application judge erred in holding that the limitation period began to run from the disposition of the New Jersey appeal. He submits it ran from the date of the first-instance judgment in New Jersey. [14] He relies on this court s decision in Lax, holding that a foreign judgment is characterized as a simple contract debt, and argues that the basic two-year limitation period in s. 4 of the Limitations Act, 2002 applies. He also relies on a line of Ontario jurisprudence establishing that a foreign judgment is final for the purpose of suing on it in Ontario even if the time for appeal has not expired or an appeal is pending: see Four Embarcadero Center Venture v. Mr. Greenjeans Corp. (1988), 64 O.R. (2d) 736 (H.C.); and Continental Casualty Company Co. v. Symons Estate, 2015 ONSC 6394, 127 O.R. (3d) 758. (2) The Respondent [15] The respondent maintains that no limitation period applies to a proceeding on a foreign judgment because it falls under s. 16(1)(b) of the Limitations Act, [16] Alternatively, it says that if there is a two-year limitation period, the case law concerning when a foreign judgment becomes final has no application under the

6 Page: 6 Limitations Act, 2002 and that time does not begin to run until appeal rights in the foreign jurisdiction have been exhausted. D. ANALYSIS [17] The correct approach to resolving the two questions raised by this appeal begins and ends with the provisions of the Limitations Act, 2002, which is a comprehensive and exhaustive scheme for dealing with limitation periods: Intact Insurance Co. of Canada v. Lombard General Insurance Co. of Canada, 2015 ONCA 764, 128 O.R. (3d) 658, at paras , leave to appeal to S.C.C. refused, [2016] S.C.C.A. No. 10 and [2016] S.C.C.A. No. 11. [18] Accordingly, I will begin my analysis by explaining the purpose of statutes of limitation. I will then examine the relevant provisions of the former Ontario Limitations Act, R.S.O. 1990, c. L.15, and their interpretation in the case law. Finally, I will discuss the legislative history of the Limitations Act, 2002 and the relevant provisions of the statute. Against this background, I will address the two questions raised by this appeal. (1) Discussion (i) The purposes of statutes of limitation [19] Limitations statutes reflect public policy about efficiency and fairness in the justice system. There are three broad policy justifications for limitation statutes:

7 Page: 7 Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] 1 S.C.R. 623, at paras [20] First, they promote finality and certainty in legal affairs by ensuring that potential defendants are not exposed to indefinite liability for past acts: Hare v. Hare (2006), 83 O.R. (3d) 766 (C.A.), at para. 41. They reflect a policy that, after a reasonable time, people should be entitled to put their business and personal pasts behind them and should not be troubled by the possibility of stale claims emerging from the woodwork. [21] Second, they ensure the reliability of evidence. It is inefficient and unfair to try old claims because evidence becomes unreliable with the passage of time. Memories fade, witnesses die and evidence gets lost. After a reasonable time, people should not have to worry about the preservation of evidence: K.M. v. H.M., [1992] 3 S.C.R. 6, at p. 30. [22] Third, and related to this, limitation periods promote diligence because they encourage litigants to pursue claims with reasonable dispatch. [23] Other justifications have been given, including the interest in the efficient use of public resources through the expeditious resolution of disputes and the desirability of adjudicating disputes on the basis of contemporary values and standards: see Graeme Mew, The Law of Limitations, 3d ed. (Toronto, LexisNexis, 2016), at pp

8 Page: 8 (ii) The former Limitations Act, R.S.O. 1990, c. L.15 [24] Section 45(1)(g) of the former Limitations Act contained a six-year limitation period for an action on a simple contract or debt. A long line of cases held that an action on a foreign judgment was an action on a simple contract debt for limitations purposes and therefore subject to that six-year limitation period: see Lax, at para. 11; Rutledge v. United States Saving & Loan Co. (1906), 37 S.C.R. 546, at p. 547; and Bedell v. Gefaell (No. 1), [1938] O.R. 718 (C.A.), at p This view was based on the fiction of an implied promise by the foreign judgment debtor to pay the amount of the judgment. As Feldman J.A. noted, at para. 13 of Lax, this fiction was necessary because, unlike a domestic judgment, a foreign judgment cannot be directly enforced [in Ontario] by execution. Rather, an action must be brought to enforce the debt it creates. [25] Section 45(1)(c) of the former Limitations Act also contained a twenty-year limitation period on an action upon a judgment or recognizance. In Lax, at paras , Feldman J.A. confirmed that this provision did not apply to an action on a foreign judgment. It applied to an action brought in order to toll the limitation period to enforce a domestic judgment using the execution procedures set out in r. 60 of the Rules of Civil Procedure, R.R.O. 1990, Reg [26] The practice of bringing an action on a domestic judgment to toll the limitation period for its enforcement within the province was discussed by the

9 Page: 9 British Columbia Court of Appeal in Young v. Verigin, 2007 BCCA 551, 72 B.C.L.R. (4th) 332, at paras Newbury J.A. observed that in British Columbia, the limitation period for an action on a domestic judgment for the payment of money was reduced from twenty to ten years by the Limitations Act, S.B.C. 1975, c. 37, s. 3(2)(f). That provision was then amended by the Enforcement of Canadian Judgments and Decrees Act, S.B.C. 2005, c. 29, by inserting the word local before the word judgment, presumably to clarify that the provision did not apply to foreign judgments: see Limitation Act, S.B.C. 2012, c. 13, s. 7(a). [27] In Lax, this court rejected the suggestion of Cumming J., in obiter, in Girsberger v. Kresz (2000), 47 O.R. (3d) 145 (S.C.), at paras , aff d on other grounds, (2000), 50 O.R. (3d) 157 (C.A.), that the historical classification of foreign judgments as simple contract debts should be abandoned in order to give full faith and credit to foreign judgments on the basis of comity, order and fairness. Cumming J. s suggestion would have subjected foreign judgments to the twenty-year limitation period in s. 45(1)(c) of the former Limitations Act. (iii) The history of the Limitations Act, 2002 [28] The Limitations Act, 2002 was the culmination of several attempts, beginning in the late 1960s, to reform, consolidate and simplify the law of limitations in Ontario. The history of those attempts was set out by Weiler J.A. in York Condominium Corp. No. 382 v. Jay-M Holdings Ltd., 2007 ONCA 49, 84

10 Page: 10 O.R. (3d) 414, at paras See also McConnell v. Huxtable, 2013 ONSC 948, 113 O.R. (3d) 727, at paras , aff d, 2014 ONCA 86. [29] The purpose of the new statute was to replace a complex, obscure and confusing regime of multiple limitation periods with a simple and comprehensive scheme. The new scheme consists of a basic two-year limitation period applicable to most claims, an ultimate limitation period of fifteen years and a statutorily-enshrined discoverability principle. It was intended to promote certainty and clarity in the law of limitation periods: see Dilollo Estate (Trustee of) v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 81, 117 O.R. (3d) 81, at para. 61. (iv) The Limitations Act, 2002 [30] The following provisions of the Limitations Act, 2002 are relevant: Definitions In this act claim means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission; Application (1) This Act applies to claims pursued in court proceedings other than [not applicable]. Basic Limitation Period 4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

11 Page: 11 Discovery 5. (1) A claim is discovered on the earlier of, (a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). Presumption (2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. No limitation period 16. (1) There is no limitation period in respect of, (b) a proceeding to enforce an order of a court, or any other order that may be enforced in the same way as an order of a court; [31] Because the proceeding on the New Jersey judgment brought by the respondent in this appeal is a claim pursued in a court proceeding, it falls within the comprehensive and exhaustive scheme of the statute.

12 Page: 12 [32] The Limitations Act, 2002 eliminated its predecessor s twenty-year limitation period for an action upon a judgment or recognizance. However, it included a proceeding to enforce an order of a court or any other order that may be enforced in the same way as an order of a court in the proceedings for which there is no limitation period under s. 16(1). (2) Does s. 16(1)(b) apply to a proceeding on a foreign judgment? [33] I turn now to the first question raised in this appeal whether there is any limitation period applicable to a proceeding on a foreign judgment. Section 16(1) of the Limitations Act, 2002, which had no counterpart in the former statute, created a class of claims that are subject to no limitation period, rather than the basic two-year limitation period or the ultimate fifteen-year limitation period. [34] The matters covered by s. 16(1) are, in summary, as follows: claims for declaratory relief, if no consequential relief is sought; claims to enforce an order of a court or any other order that may be enforced in the same way as an order of a court; claims for support or maintenance in family law matters; proceedings to enforce a domestic arbitration award; proceedings under the Civil Remedies Act, 2001, S.O. 2001, c. 28;

13 Page: 13 claims by debtors or creditors in possession of collateral; claims in relation to sexual assault, sexual misconduct in relation to minors and assault on minors; and certain proceedings by the Crown or other agencies in relation to claims by the Crown or in relation to government programs, loans or grants. [35] The interpretation of s. 16(1)(b) has been the subject of conflicting decisions of the Ontario Superior Court of Justice. In Commission de la Construction du Quebec v. Access Rigging Services Inc., 2010 ONSC 5897, 104 O.R. (3d) 313, McLean J. dealt with an application to enforce a 2005 Quebec judgment in Ontario. The application was brought in Quebec is not a reciprocating party to the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5 ( REJA ). Hence, the basic two-year limitation period applied unless the claim fell within s. 16(1)(b) of the Limitations Act, The judgment debtor sought to dismiss the application as time-barred. [36] The judgment creditor, relying on Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, and Girsberger argued that comity supported a liberal interpretation of s. 16(1)(b) as being applicable to foreign judgments. [37] McLean J. rejected this argument, finding that the two-year limitation period applied. Relying on Lax, he held that nothing in the wording of order of a court in s. 16(1)(b) shows an intention to change the common law position that a

14 Page: 14 foreign judgment cannot be directly enforced in Ontario and that it must be converted into a domestic judgment that is enforceable in Ontario. In previous iterations of the act, the analogous term judgment referred to domestic judgments that could be enforced in Ontario without bringing a proceeding on the judgment. [38] Moreover, McLean J. held that to interpret s. 16(1)(b) as applicable to proceedings on foreign judgments would be inconsistent with REJA, which contains a six-year limitation period for the registration of judgments of the courts of other provinces and territories, except Quebec. 1 He found that the judgment creditor s argument would lead to the incongruous result that there was no limitation period applicable to proceedings on Quebec judgments in Ontario, but proceedings on the judgments of other provinces would have a six-year limitation period. [39] McLean J. observed that the purpose of the Limitations Act, 2002 was to simplify the previously complex scheme of limitations and said it would have been simple enough to include foreign judgments in s. 16(1)(b), had that been the legislature s intention. It was not the court s responsibility to make a change that the legislature had not. 1 REJA is not exclusive, as s. 8 provides that [N]othing in this Act deprives any judgment creditor of the right to bring an action for the recovery of the amount of a judgment instead of proceeding under this Act. It would appear, therefore, that the judgment creditor can either bring a proceeding on the foreign judgment or proceed under REJA.

15 Page: 15 [40] In PT ATPK Resources TBK (Indonesia) v. Diversified Energy and Resources Corp., 2013 ONSC 5913, Newbould J. questioned the reasoning in Access Rigging. He suggested that knowledge of a foreign judgment did not fit well with the language of knowledge of injury loss or damage in the discoverability provision in s. 5 of the Limitations Act, In his view, it made more sense to treat a claim for the enforcement of a foreign judgment as having no limitation period under s. 16(1)(b), to which the discoverability provision does not apply. This, he said, would also be more consistent with the principles of comity expressed by the Supreme Court of Canada in Beals v. Saldhana, 2003 SCC 72, [2003] 3 S.C.R. 416, and Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R [41] In S.A. Horeca Financial Services v. Light, 2014 ONSC 4551, 2 Murray J. disagreed with Access Rigging and preferred the reasoning in PT ATPK. He also referred to Beals, noting the importance of comity. In contrast to the view taken in Access Rigging, he suggested that the legislature s failure to exclude foreign judgments from s. 16(1)(b) was significant. [42] It falls to this court, as a matter of first impression, to interpret whether s. 16(1)(b) applies to a proceeding on a foreign judgment. The words of s. 16(1)(b) are to be read in light of the language of the provision as a whole, their context 2 The decision of Murray J. is unreported. However, it is discussed by Weiler J.A. in the context of a motion to lift a stay pending its appeal to this court. See SA Horeca Financial Services v. Light, 2014 ONCA 811.

16 Page: 16 within the statutory scheme, and the purposes of the Limitations Act, 2002: see R. v. Hajivasilis, 2013 ONCA 27, 114 O.R. (3d) 337, at para. 23; and Ayr Farmers Mutual Insurance Co. v. Wright, 2016 ONCA 789, at paras. 26, 28-29, [43] First, therefore, I consider the language of s. 16(1)(b) as a whole. [44] Phrases serving parallel functions and associated by the disjunction or in a statutory provision influence each other s meaning. The parallelism invites the reader to look for a common feature among the terms to resolve any ambiguities: Ruth Sullivan, The Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014), at p The Supreme Court has stated that a term or an expression should not be interpreted without taking the surrounding terms into account in order to identify a common thread : Opitz v. Wrzesnewskyj, 2012 SCC 55, [2012] 3 S.C.R. 76, at paras. 40, 43. [45] In my view, the term order of a court in s. 16(1)(b) takes its meaning, in part, from the parallel phrase immediately associated with it namely, any other order that may be enforced in the same way as an order of a court (emphasis added). I observe that a similar parallel phrase is found in s. 19(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, which provides that [a] certified copy of a tribunal s decision or order in a proceeding may be filed in the Superior Court of Justice by the tribunal or by a party and on filing shall be

17 Page: 17 deemed to be an order of that court and is enforceable as such (emphasis added). [46] The common feature or common thread linking these parallelisms is the concept of enforceability. Section 16(1)(b) of the Limitations Act, 2002 applies to court orders and to other orders, such as those of persons exercising a statutory power of decision, that are enforceable in the same way as a court order. [47] This common thread within s. 16(1)(b) does not extend to foreign judgments. The domestic judgments contemplated by the provision are directly enforceable in Ontario by means of the execution procedures in r. 60 of the Rules of Civil Procedure, including writs of seizure and sale, garnishment, or the appointment of a receiver: Lax, at para. 21. By contrast, like an order of a foreign arbitral tribunal, the debt obligation created by a foreign judgment cannot be directly enforced in Ontario in the absence of reciprocal enforcement legislation such as REJA or REJUKA. A proceeding in Ontario must be brought first: see Lax at paras ; Yugraneft at para. 45; Chevron Corp. v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69, at para. 43. That proceeding may result in a judgment or order of the Ontario court. The resulting order may be enforced as an order of the court, with no applicable limitation period. [48] Thus, the judgment of a foreign court is one step removed from being an order of a court for the purpose of s. 16(1)(b) of the Limitations Act, It is not

18 Page: 18 on the same level as an order of an Ontario court or any other order, such as an order of an Ontario statutory decision maker, which may be enforced as an order of a domestic court. This was adverted to by Feldman J.A. in Lax, at para. 31, in explaining why she did not agree with the approach taken by Cumming J. in Girsberger: [A]s long as only domestic judgments can be enforced by execution and the other methods discussed above, and therefore foreign judgments must be transformed into domestic judgments or registered before they are enforceable as domestic judgments, there is not parity of treatment. [49] There are good reasons for giving different treatment for limitations purposes to the enforcement in Ontario of a judgment of an Ontario court, on the one hand, and a judgment of a foreign court, on the other hand. The principle of territorial sovereignty means that the judgment of a court has effect only inside the territory in which the court is located and cannot be enforced outside its borders: Stephen G.A. Pitel & Nicholas S. Rafferty, Conflict of Laws, 2d ed. (Toronto: Irwin Law, 2016), at p The extraterritorial enforcement of a court s order is not a legitimate exercise of state power: see Tolofson v. Jensen, [1994] 3 S.C.R. 1022, at p. 1052; Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at para. 31; Chevron, at paras ; and Endean v. British Columbia, 2016 SCC 42, 401 D.L.R. (4th) 577, at para. 45.

19 Page: 19 [50] Thus, while a domestic judgment can be enforced as of right in Ontario, it is necessary to bring a proceeding on a foreign judgment. If that proceeding is successful, it will give rise to an Ontario judgment which can be directly enforced in the province. [51] Furthermore, a judgment creditor who brings an Ontario proceeding on a foreign judgment must show that the foreign court had jurisdiction and that the judgment is final and for the payment of money (or that it would be appropriate for the Ontario court to recognize it as enforceable within the province even if it is interlocutory or non-monetary): see Pro Swing; Chevron; and Cavell Insurance Co. (Re) (2006), 80 O.R. (3d) 500 (C.A.), at para. 41. [52] The foreign judgment debtor is entitled to raise defences to the proceeding, such as fraud, denial of natural justice and public policy: see Beals. These defences distinguish foreign judgments from local judgments, against which the sole recourse is an appeal : Janet Walker & Jean-Gabriel Castel, Canadian Conflict of Laws, loose-leaf (Rel. 54-3/2016 Pub.5911), 6th ed. (Toronto: LexisNexis, 2005), at para [53] I conclude that the language of s. 16(1)(b) of the Limitations Act, 2002 suggests that the term order of a court refers to an order of a domestic court. [54] Second, I consider the statutory context of s. 16(1)(b) of the Limitations Act, 2002.

20 Page: 20 [55] Section 16(1)(b) also takes its meaning from the surrounding provisions of s. 16. When statutory provisions are grouped together, the legislature is presumed to have drafted each with the others in mind: Inland Revenue Commissioners v. Hinchy, [1960] A.C. 748 (H.L.), at p They tend to illuminate each other s meaning because they share a single idea : Ruth Sullivan, Statutory Interpretation, 3d ed. (Toronto, Irwin Law, 2016), at p [56] The other provisions grouped together in s. 16 pertain to claims such as family law support awards, sexual assault claims and government claims that are considered so important that, for one policy reason or another, they should have no limitation period at all. For example, the policy reason underlying the exemption for sexual assault claims is grounded in the likelihood that the dynamic of the relationship will impede the autonomy of the victim : Boyce v. Toronto (City) Police Services Board, 2011 ONSC 53, at para. 40, aff d, 2012 ONCA 230. [57] In this context, it is important to identify the policy reason for including claims to enforce an order of a court in the subset of claims that have no limitation period under s. 16. In my view, the reason is that such claims have already passed a limitations hurdle under Ontario law a court order can only be obtained if the underlying cause of action giving rise to it was not time-barred.

21 Page: 21 [58] This was the policy reason suggested by the British Columbia Law Reform Commission, in its 1974 Report on Limitations, for the argument that no limitation period should apply to claims to enforce domestic court orders. As quoted by Newbury J.A. in Young v. Verigin, at para. 7, the commission wrote: Furthermore, the successful plaintiff cannot be said to have slept on his rights. He has taken action, and as a consequence recovered judgment. It might be argued, with considerable justification, that no limitation period whatsoever should exist with respect to the enforcement of judgments. It may seem unfair that the plaintiff who has been put to the trouble and expense of obtaining a judgment to enforce a right or obligation should face a further limitation period with respect to the exercise of his rights under the judgment. Why should he not be free to pursue his rights under the judgment at his leisure if he so chooses? [59] It follows that the term order of a court in s. 16(1)(b) should be interpreted as referring to an order of a domestic court only. A proceeding on a foreign judgment has not passed any Ontario limitations hurdle. If the action on the foreign judgment is successful, it results in an Ontario judgment, which is subject to no limitation period. But that can only be justified if the underlying cause of action based on the foreign judgment has already passed a limitations hurdle in Ontario. [60] I find support for this conclusion in the Report of the Ontario Law Reform Commission on the Limitation of Actions (Toronto: Department of the Attorney General, 1969), at pp The report stated, at p. 49, that there was good

22 Page: 22 reason to apply the longer twenty-year limitation period in the former Limitations Act to actions on domestic judgments because, in terms later adopted by the British Columbia report, the successful plaintiff cannot be said to have slept on his rights. He has taken action and, as a consequence, recovered judgment. However, the report nevertheless recommended that foreign judgments should remain subject to the six-year limitation period governing debts in the former Limitations Act, notwithstanding the artificiality of treating them as simple contract debts. [61] It is also noteworthy that several provinces have subjected foreign judgment proceedings to a special limitation period that is distinct from the one that applies to proceedings on domestic judgments. British Columbia s Limitation Act subjects local judgment proceedings to a ten year limitation period in s. 7, but it deals with extraprovincial judgments separately. Section 2(1)(l) of Manitoba s The Limitation of Actions Act, C.C.S.M., c L150, treats Canadian judgments differently from other judgments. Newfoundland sets a six-year limitation period on an action to enforce a foreign judgment and a ten-year period on actions to enforce a judgment of a court in the province: see Limitations Act, S.N.L. 1995, c. L-16.1, s. 6(1)(g). And Prince Edward Island s Statute of Limitations, R.S.P.E.I. 1988, c. S-7, s. 2(1)(f) distinguishes between extraprovincial judgments and other judgments.

23 Page: 23 [62] The statutory context therefore suggests that the language of s. 16(1)(b) of the Limitations Act, 2002 is confined to orders of domestic courts. [63] Third, and finally, I consider s. 16(1)(b) in light of the purposes of limitations statutes. [64] It would be contrary to the purposes of limitations statutes to interpret s. 16(1)(b) as exempting foreign judgments from any limitation period. If it were always possible to bring a proceeding on a foreign judgment in Ontario without time limitation, no matter when and where it was obtained, the debtor would be indefinitely exposed to the prospect of defending such proceedings in Ontario. As was pointed out in the Ontario Law Reform Commission s report at p. 50, problems associated with the preservation and reliability of evidence are especially pronounced for foreign judgment debtors. This militates in favour of having some limitation period apply to proceedings on foreign judgments. As well, exempting such proceedings from a limitation period would not encourage diligence or reasonable dispatch on the part of the foreign judgment creditor, who, unlike domestic judgment creditors, has not already surmounted an Ontario limitations hurdle. [65] Before concluding, I would remark that, despite their undoubted importance, the principles of comity expressed in Morguard, Beals, Chevron and Cavell do not require the absence of any limitation period for a proceeding on a foreign

24 Page: 24 judgment. Nor do they supersede the equally important policy rationales for limitations statutes. It is one thing to remove barriers to the extraterritorial recognition of foreign judgments. But it is quite another to grant them more generous status than any other debt obligation or to give them the same status as a domestic judgment for limitations purposes, thereby circumventing the very reasons for limitation periods. [66] I conclude, therefore, that s. 16(1)(b) of the Limitations Act, 2002 does not apply to proceedings on foreign judgments, and the applicable limitation period for the respondent s proceeding on the New Jersey judgment at issue in this appeal is the basic two-year period in s. 4. The result is that time begins to run when the claim is discovered within the meaning of s. 5. I turn to that question next. (3) When does time begin to run on a proceeding on a foreign judgment in Ontario? [67] The application judge found that the limitation period for the respondent to commence his proceeding on the New Jersey judgment ran from the date the New Jersey appeal was dismissed. As I have noted, he found that this was consistent with REJUKA and with the Supreme Court s approach to the enforcement of foreign arbitral awards in Yugraneft.

25 Page: 25 [68] The appellant submits that this is inconsistent with previous authorities, including the decision of Henry J. in Four Embarcadero and, more recently, the decision of Glustein J. in Continental Casualty. Those cases stand for the proposition that a proceeding on a foreign judgment may be commenced in Ontario even if the judgment is not final, in the sense that the time to appeal it in the foreign jurisdiction has not expired or it is actually under appeal. [69] In my view, those cases are of no assistance in resolving the issue of when time begins to run in a proceeding on a foreign judgment. The question of a judgment s finality is relevant not to statutory limitation periods to commence a proceeding on a foreign judgment, but to the conditions that a foreign judgment creditor must satisfy to succeed on the proceeding: see Cavell, at paras [70] The test under the Limitations Act, 2002 is not whether the judgment is final ; it is when the claim is discovered, a fact that is ascertained through the application of s. 5(1), aided by the presumption in s. 5(2). [71] I acknowledge the point made by Newbould J. in PT ATPK that, in the context of s. 5(1) of the Limitations Act, 2002, a proceeding on a foreign judgment does not fall particularly neatly into the definition of claim as a claim to remedy an injury, loss or damage that occurred as a result of an act or omission. However, the statute was meant to be comprehensive and exhaustive. Section 2(1) provides that it applies to claims pursued in court proceedings, and

26 Page: 26 s. 4 provides that the basic two-year limitation period applies unless this Act provides otherwise. [72] The words injury, loss or damage in s. 5(1) can reasonably refer to the debt obligation created by a foreign judgment and owed by the foreign judgment debtor to the creditor. The act or omission can reasonably refer to the debtor s failure to discharge the obligation once it became final. Viewed in this light, s. 5(1) can reasonably be viewed as applying to a proceeding on a foreign judgment. [73] I note, in this regard, that the discoverability provision in Alberta s Limitations Act differs from the Ontario provision in that it contains a definition of injury that includes the non-performance of an obligation. Rothstein J. adverted to this definition in Yugraneft, at para. 50. Although Newbould J. s comment in PT ATPK is a fair one, Justice Rothstein s reference lends weight to the observation that fitting a foreign judgment within the definition of injury in s. 5(1) of the Limitations Act, 2002 is not as strained as it might seem. [74] Section 5(1) provides that a claim is discovered on the earlier of: (a) the day on which the claimant first knew, among other things, that having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it ; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to

27 Page: 27 have known of the matters referred to in clause (a). The test in s. 5(1)(a) has been referred to as a subjective test because it looks to the claimant s actual knowledge, and the test in s.5(1)(b) as a modified objective test because it looks to what a reasonable person with the abilities and in the circumstances of the claimant ought to have known: see Ferrera v. Lorenzetti Wolfe Barristers and Solicitors, 2012 ONCA 851, 113 O.R. (3d) 401, at para. 70; and Crombie Property Holdings Limited v. McColl-Frontenac Inc. (Texaco Canada Limited), 2017 ONCA 16, at para. 35. [75] In 407 ETR Concession Co. v. Day, 2016 ONCA 709, at para. 48, Laskin J.A. explained that one reason why the legislature added appropriate means [in s. 5(1)(a)] as an element of discoverability was to enable courts to function more efficiently by deterring needless litigation. Appropriate means legally appropriate. For example, a tactical choice to delay commencement of a proceeding to engage in settlement discussions after a loss, injury or damage is known does not make the proceeding inappropriate: Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218, 109 O.R. (3d) 652, at para. 24. [76] Appropriateness must be assessed on the facts of each case, and case law applying s. 5(1)(a)(iv) is of limited assistance: Brown v. Baum, 2016 ONCA 325, 348 O.A.C. 251, at para. 41. However, it is noteworthy that courts have held that a proceeding is not legally appropriate until other mechanisms for resolving a

28 Page: 28 dispute, such as a statutory remedial process, have been exhausted: see 407 ETR, at para. 40; U-Pak Disposals (1989) Ltd. v. Durham (Regional Municipality), 2014 ONSC 1103, at paras ; Kadiri v. Southlake Regional Health Centre, 2015 ONSC 621, at paras , aff d, 2015 ONCA 847; and Mew, at pp [77] In the usual case, it will not be legally appropriate to commence a legal proceeding on a foreign judgment in Ontario until the time to appeal the judgment in the foreign jurisdiction has expired or all appeal remedies have been exhausted. The foreign appeal process has the potential to resolve the dispute between the parties. If the judgment is overturned, the debt obligation underlying the judgment creditor s proceeding on the foreign judgment disappears. [78] This approach is consistent with the decision of the Alberta Court of Appeal in Laasch v. Turenne, 2012 ABCA 32, 522 A.R In that case, the court determined that the statutory limitation period to commence a proceeding on a Montana judgment began to run even while the creditor sought to register the judgment under Alberta s reciprocal enforcement legislation. The existence of the reciprocal enforcement statute did not displace the common law process for a proceeding on a foreign judgment. Therefore, the proceeding was warranted within the meaning of the discoverability provision of Alberta s Limitations Act even while the creditor sought registration.

29 Page: 29 [79] To regard a claim based on the foreign judgment as discoverable and appropriate only when all appeals have been exhausted is also consistent with the observations of Rothstein J. in Yugraneft. He stated, at para. 57, that the limitation period to enforce a foreign arbitral judgment under Alberta s Limitations Act starts to run when the time to appeal the judgment has expired or, where an appeal is taken, the date of the appeal decision. [80] Finally, as the application judge noted, this approach avoids the risk of multiplicity of proceedings by not requiring the judgment creditor to commence a proceeding on a foreign judgment in Ontario before all proceedings in the foreign jurisdiction have run their course. It furthers the purpose of s. 5(1)(a)(iv) of the Limitations Act, 2002 by deterring the unnecessary litigation that may result from commencing an Ontario proceeding on a foreign judgment that is subsequently overturned. [81] The foregoing approach to the discoverability of a foreign judgment does not preclude a foreign judgment creditor seeking an interim Mareva injunction to freeze exigible assets of the judgment debtor in Ontario before a proceeding on the foreign judgment is commenced in the province and the foreign appeal process is still running its course: see Chitel v. Rothbart (1983), 39 O.R. (2d) 513 (C.A.); and Aetna Financial Services v. Feigelman, [1985] 1 S.C.R. 2. Nor does the approach preclude a foreign judgment debtor obtaining a stay of execution of an Ontario judgment that the creditor obtained after successfully suing on a

30 Page: 30 foreign judgment that is still under appeal: see DSLangdale Two LCC v. Diasytek (Canada) Inc., [2004] O.T.C (S.C.), at paras [82] In a particular case, a claim based on a foreign judgment may not be discovered under s. 5 of the Limitations Act, 2002 until such time as the judgment creditor knew or ought to have known that the judgment debtor had exigible assets in Ontario and could be served with process: see Yugraneft at paras , 61. As s. 5(1)(b) makes clear, the discoverability assessment, including the appropriateness criterion, must take account of the factual context and the plaintiff s actual circumstances, and I reiterate that each case must be decided on its own facts: see 407 ETR, at paras. 34, [83] In the present case, I conclude that the respondent s claim based on the New Jersey judgment was discoverable on July 17, 2014, the date the appeal was dismissed in New Jersey. The respondent would not have reasonably known that a proceeding in Ontario would be an appropriate means to seek to remedy its loss until that date. Thus, the limitation period for the respondent to commence its proceeding on the New Jersey judgment began on that date. The respondent brought the proceeding on May 1, 2015, within the applicable twoyear limitation period. Hence, the proceeding was not time-barred.

31 Page: 31 E. ORDER [84] For these reasons, I would dismiss the appeal, with costs to the respondent in the amount of $9,000.00, inclusive of interest and all applicable disbursements. Released: G.R.S. January 18, 2017 George R. Strathy C.J.O. I agree G. Pardu J.A. I agree David Brown J.A.