We live in world where globalization is in full force and borders have become virtually obsolete. This reality is highlighted even more so in the business world. Private companies look to expand beyond their respective countries to profit from a world market. However, while globalization has opened the door to new possibilities and a world market, it has also led to an increase in the number of cross border litigations.
The term “foreign judgment” means a judgment obtained outside of Ontario – whether in another Canadian province or territory, in the United States or elsewhere. In Ontario, the Reciprocal Enforcement of Judgment Act allows for the registration of all judgments from all the provinces and territories (with the exception of Quebec). Subject to certain formalities found in the Rules of Civil Procedure and provisions of the Act, judgments from these jurisdictions in Canada can be enforced in Ontario. Some of the requirements for enforcements are that reasonable notice of the application be given to the judgment debtor in situations where the judgment debtor was not personally served with process in the original action, did not appear or defend or otherwise submit to the jurisdiction of the original court.
Once registered, the foreign judgment will receive full effect in Ontario. As stated in article 4 of the Act, when an extra-provincial judgment is registered, the judgment is, as from the date of the registration, of the same force and effect and proceedings may be taken thereon as if it had been a judgment originally obtained or entered up in the registering court on the date of the registration. Furthermore, the registering court has the same control and jurisdiction over the judgment as it has over judgments given by itself.
The Act, however, also imposes prior conditions which must be met before a judgment creditor may register his judgment. For instance, no judgment shall be ordered to be registered under this Act if it is shown to the registering court that,
(a) the original court acted without jurisdiction; or
(b) the judgment debtor, being a person who was neither carrying on business nor ordinarily
resident within the jurisdiction of the original court, did not voluntarily appear or otherwise
submit during the proceedings to the jurisdiction of that court; or
(c) the judgment debtor, being the defendant in the proceedings, was not duly served with the
process of the original court and did not appear, despite the fact that the judgment debtor
was ordinarily resident or was carrying on business within the jurisdiction of that court or
agreed to submit to the jurisdiction of that court; or
(d) the judgment was obtained by fraud; or
(e) an appeal is pending, or the judgment debtor is entitled and intends to appeal against the
(f) the judgment was in respect of a cause of action which for reasons of public policy or for some
other similar reason would not have been entertained by the registering court; or
(g) the judgment debtor would have a good defence if an action were brought on the original
Article 3 of the Act has been the cause of some remarkable legal issues that were resolved by Canadian case law. It is important to note that one of the main preconditions for the Ontario courts to recognize and enforce a foreign judgment is to recognize the foreign courtâ€™s jurisdiction over the subject matter. Jurisdiction is either established by any of the following three situations:
1. At the time of commencement of the foreign proceeding, the defendant was residing or was present in the foreign state in question and if the defendant is a corporation, the jurisdiction is established from the conduct of the business.
2. The defendant submitted to the jurisdiction of the foreign court by express agreement or by appearing before the foreign court
3. A real and substantial connection existed between the foreign jurisdiction and the action or damages suffered.
The Supreme Court of Canada case, The Morguard, has substantially altered how courts deal with foreign judgments on two different levels. Justice La Forest, who wrote the unanimous decision, noted that the old common law rules, based on territoriality, sovereignty, independence and attornment, were outdated and that a much modern approach based on the principle of comity and reciprocity were needed as a basis of recognizing foreign judgments. The infringement on the nation’s sovereignty would be justified in the presence of mutual convenience between states. The earlier views of distrusting the justice system of other countries, he argued, was outdated and emphasized that the business community operated on a world economy and so the law had to accommodate “the flow of wealth, skills and people across state lines”. Even Canada’s federal system was indicative of the fact that comity should be even stronger between provinces, simply because they share a much deeper bond than nations given the fact they share citizenship and a common market.
Thus, the Morguard case revolutionized Canadian international private law by establishing the principle of â€œfull-faith and creditâ€ which required judicial decisions and provincial legislations be recognized and enforced in the courts of all other Canadian provinces and territories
Another aspect of the Morguard case was created with the intention of creating a legal test for courts. The â€œreal and substantialâ€ test was developed which required courts to analyze the connection that must exist between the action or the parties and the court hearing the dispute. This test is a requirement that courts must respect prior to recognizing and enforcing the foreign judgments.
In Beals v. Saldanha, Canadaâ€™s Supreme Court took the opportunity to broaden the scope of the â€œreal and substantialâ€ test to apply to international foreign judgments. Justice La Forest stated that the reasoning and principles that make up the â€œreal and substantialâ€ test and which apply to provincial recognition of judgments should equally apply to the recognition and enforcement of judgments made by courts in other countries.
Judgments From the United Kingdom
While Ontario courts recognize and enforce judgments from other Canadian provinces, the U.K., and France via statutes and treaties, Ontarioâ€™s common law also allows the recognition and enforcement of judgments from non-treaty foreign states.
The historical relationship between England and Canada, also promoted and facilitated the recognition and enforcement of judicial decisions from the United Kingdom. This is evidenced by the Reciprocal Enforcement of Judgments (U.K.) Act which creates a law out of a convention with the United Kingdom. In Article three, the Act states that,
â€œWhere a judgment has been given by a court of one Contracting State, the judgment creditor may apply in accordance with Article VI to a court of the other Contracting State at any time within a period of six years after the date of the judgment â€¦ to have the judgment registered, and on any such application the registering court shall, subject to such simple and rapid procedures as each Contracting State may prescribe and to the other provisions of this Convention, order the judgment to be registered.â€
Like the Reciprocal Enforcement of Judgment Act in Ontario, the enforcement of UK judgments also has conditions that must be met in order for the judgment to be recognized and enforced. The registration of an U.K. judgment will be refused or set aside if,
â€œ(a) the judgment has been satisfied;
(b) the judgment is not enforceable in the territory of origin;
(c) the original court is not regarded by the registering court as having
(d) the judgment was obtained by fraud;
(e) enforcement of the judgment would be contrary to public policy in the
territory of the registering court;
(f) the judgment is a judgment of a country or territory other than the territory of
origin which has been registered in the original court or has become
enforceable in the territory of origin in the same manner as a judgment of that
(g) in the view of the registering court the judgment debtor either is entitled to
immunity from the jurisdiction of that court or was entitled to immunity in the
original court and did not submit to its jurisdiction.â€
Finally, recognition in Ontario of a judgment arising from the U.K. will need to follow the procedures set out in article 73 of the Rules of Civil Procedure. This requires a notice of an application and must be supported by an affidavit that confirms the statements contained in the notice and must be accompanied by the judgment itself and the original proof of service of the originating process of the United Kingdom court.
The situation with Quebec is quite interesting. Ontarians must be wary when involved in a litigation involving parties from Quebec. The problem with recognizing a Quebec judgment includes various matters such as the prescribed limitation period as was highlighted by the Commission de la Construction du QuÃ©bec v Access Rigging Services Inc case. In that case, the applicant had initiated legal action in Quebec for amounts paid under an employment plan. After being awarded a default judgment in November 2005, the applicant brought an application before the Ontario Superior Court of Justice in 2010 to enforce the judgment in Ontario. The respondent in that case argued that the applicant’s enforcement proceeding was barred due to the basic two-year limitations period in the Limitations Act, 2002.
The applicant argued that no limitation period should have applied to enforce the Quebec judgment because of its general terminology. Thus, by analogy, the fact that the Limitations Act, 2002 provided for an unlimited period for the enforcement of judgments made by Ontario courts, it necessarily applied to the enforcement of foreign judgments, including Quebec.
The court ruled otherwise and decided that proceedings to enforce foreign judgments are subject to the basic two-year statutory limitations period. Justice McLean stated that the legislative objective of the Limitations Act, 2002 was to “to simplify an otherwise complex scheme of limitations,” as opposed to altering the way foreign judgments are handled. Justice McLean stated that after reading the Limitations Act, 2002 on its whole, there was no reason to believe that an unlimited prescription period should apply for foreign judgments.
The Quebec situation should not be confused with the situation that exists with the other provinces because Quebec is the only province that does not have a reciprocating legislation. As noted by some authors, The Reciprocal Enforcement of Judgments Act sets out a system where judgments rendered in reciprocating provinces and territories can be enforced in Ontario through a simple registration system. In those types of situations, the judgments can be registered in Ontario within six years of the date the judgment was given.