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Appellate Litigation

When seeking to enforce a foreign judgment in Ontario, the applicant generally needs to prove that (1) a court of competent jurisdiction issued the foreign judgment, (2) the judgment is final, and (3) the judgment is for a definite sum of money.  Once these requirements are met, the burden shifts to the respondent to prove one of the limited defences available to recognize and enforce a foreign judgment.  These defences include fraud, public policy and lack of natural justice.  The latter defence was the focus of a recent decision of the Superior Court of Justice in Roger Vanden Berghe NV v. Merinos Carpet Inc.

Applicant Obtains Judgment Against the Respondent in Belgium and Seeks to Enforce the Judgment in Ontario

The Merinos case involved a Belgian company that, among other things, manufactured and sold rugs and fabrics.  Liquidators were appointed with respect to the company after it was dissolved in 2018.  They reviewed outstanding invoices previously issued to the company’s customers, including the Respondent, Merinos.  Merinos was an Ontario company operating in Mississauga and involved in the wholesale and distribution of carpets and rugs.  The liquidators commenced a proceeding against Merinos in a Belgian Court in January 2020 to recover the amounts owed.  Merinos did not appear in the proceeding, and in December of that year, the Belgian Court granted judgment, ordering Merinos to pay €84,493.11 together with interest and costs.

In June of 2022, the Applicant commenced a proceeding in the Superior Court of Justice seeking recognition and enforcement of the Belgian judgment in Ontario.  The matter was brought to a hearing in June of 2023.

Court Reviews the Law on the Recognition and Enforcement of Foreign Judgments

The Court began its decision by noting that the focus of a proceeding for recognition and enforcement of a foreign judgment is not on the original claim advanced by the applicant but “on the obligation created by the foreign judgment.”  The Court referred to Chevron Corp. v. Yaiguaje. It noted it is not the Court’s role to adjudicate the underlying claim but rather to assist in enforcing the obligation created by the judgment itself.

Court Finds the Applicant Meets the Three Required Elements for Recognition and Enforcement

The Court then considered the three elements an applicant must prove to have a foreign judgment recognized and enforced.  In assessing whether the Belgian Court had properly assumed jurisdiction, it concluded there was “a real and substantial connection” between that Court and the subject matter of the dispute.  The Court noted that the products that were the subject of the invoices in issue had been ordered from a Belgian company, the orders for them had been processed in Belgium, the products had been shipped from Belgium, the invoices for the products had been issued in Belgium, and the parties had contractually agreed that the orders were governed by Belgian law and that “any contractual disputes would be referred to Belgian Courts.”   Further, the Belgian judgment was final for a definite sum of money.  Accordingly, the Applicant had proven the three necessary elements for recognizing and enforcing the foreign judgment.

Respondent Raises Defence of Lack of Natural Justice On Basis of Manner in Which Documents Were Served

The burden then shifted to Merinos to prove one of the available defences.  In this regard, Merinos primarily argued a lack of natural justice because the documents had not been properly served on it by Ontario’s Rules of Civil Procedure.  Specifically, it argued it had not been personally served with the Belgian Writ of Summons and that the Writ had been mailed to an incorrect address.  Merinos also argued that the hearing of the Belgian Court proceeding had been scheduled for a date and time during which travel had been impossible because of COVID-19 restrictions. 

Parties Disagree Over Whether Documents Were Personally Served on the Respondent

In its decision, the Court carefully set out the facts surrounding the service of the Belgian Writ of Summons.

In January 2020, the Writ of Summons issued in the Belgian Court proceeding was sent by registered mail to the purported address of Merinos at 1100 Courtney Park Drive East in Mississauga.  The Writ required Merinos to appear at the public hearing before the Belgian Court in May of that year.  There was also some indication before the Superior Court of Justice in the enforcement proceeding that the Writ may have also been served at that address in the manner directed by The Hague Convention, although the Court noted there was no evidence before it confirming whether such service had occurred.  In any event, judgment was granted when Merinos did not appear in the Belgian proceeding.  

A copy of the Belgian judgment was then served at the above address in March 2021. In December 2021, lawyers for the Applicant sent a letter to Merinos demanding payment regarding the Belgian judgment.  This letter was sent to 1611 Courtney Park and 1561 Courtney Park East in Mississauga.  Merinos did not respond to the letter.

Merinos’s Director and General Manager filed an affidavit in the enforcement proceeding indicating that Merinos’s registered address was 1611 Courtney Park, not 1100 Courtney Park.  He also indicated that the postal code used in the Writ of Summons was wrong.

In response, the lawyer for the Applicant submitted evidence indicating that while 1100 Courtney Park may not have been the Applicant’s registered address, it was a proper business address of Merinos.  Indeed, this address was listed as the company’s address in a credit report.  Likewise, Google Street View photos showed that a business called “Merinos Rugs” operated at 1100 Courtney Park when the photos were taken in 2019.  The Applicant also put forward other evidence confirming that Merinos used this address, although the Court noted that some of this evidence showed differing postal codes for the 1100 Courtney Park address.

Court Rules Personal Service is Not Necessary To Ensure Natural Justice

Concerning the issue of whether personal service of the Writ was necessary, the Court concluded that “the defence of lack of natural justice applies where the foreign proceedings were contrary to Canadian notions of fundamental justice and minimum standards of fairness.”  According to the Court, such notions and standards “do not require strict compliance with the specific service rules” in the Rules of Civil Procedure.  Instead, they simply require that “the defendant be given adequate notice of the claim against it and be granted an opportunity to defend.”  The Court also noted that earlier jurisprudence from the Supreme Court of Canada in Beals v. Saldanha did not require personal service.

Was the Respondent Given Adequate Notice and an Opportunity to Defend?

In considering whether Merinos had been given adequate notice and an opportunity to defend, the Court placed particular emphasis on the fact that Merinos did not adduce any evidence stating it had not operated out of the 1100 Courtney Park address at the time it was served, nor did it provide any evidence indicating it did not receive the Writ at that address.  Further, no evidence indicated Merinos was unaware of the Belgian Court proceeding.  For these reasons, the Court found that Merinos had been given adequate notice of the Belgian proceeding.

In addition, the Court referred to the Applicant’s evidence showing that Merinos operated out of the 1100 Courtney Park address and noted that, even if the 1611 Courtney Park address was correct, Merinos had still failed to reply to the letter sent to that address.  On this basis, the Court concluded that Merinos had ignored the Applicant “no matter the address that was used.”  The incorrect postal code was likewise deemed irrelevant.  In short, the Court equated the position of Merinos with respect to the Belgian judgment to that of a defendant in a default judgment proceeding in Ontario.  

Concerning the argument about COVID-19 restrictions, the Court found that Merinos could have made inquiries about participating in the Belgian proceeding by videoconference or retained counsel in Belgium, which it failed to do. 

For these reasons, Merinos’ defence of lack of natural justice was deemed to fail.

Defences of Fraud and Public Policy Also Fail

Merinos also raised the defence of fraud, arguing that statements in the Writ of Summons had misled the Belgian Court. Still, the Ontario Court noted that no evidence had been adduced before it to support that defence.  Merinos also raised the defence of public policy, but the Court found no merit to this, as there was no evidence that the Belgian law applied to the case was “contrary to our view of basic morality.”

The Court thus granted the Application to recognize and enforce the Belgian judgment.

Contact the Lawyers at Milosevic & Associates in Toronto for Advice Respecting the Enforcement of Foreign Judgments 

The experienced legal team at Milosevic & Associates will provide practical and effective representation in enforcing and recognizing foreign judgments.  Contact us online or by phone at (416) 916-1387 to speak with us.