Cross-border commercial disputes are increasingly common, particularly in industries involving international supply chains. When a party obtains a judgment outside of Canada, a key question often arises: will Ontario courts recognize and enforce that foreign judgment?
The decision in Roger Vanden Berghe NV v. Korhani of Canada Inc. provides important guidance on this issue. The Ontario Court of Appeal reaffirmed the well-established test for recognizing foreign judgments and clarified the limited scope of defences available to parties seeking to resist enforcement.
This case is particularly instructive for businesses engaged in international commerce, as it underscores the risks of failing to respond to foreign proceedings and the difficulty of raising new arguments on appeal.
The dispute arose from a commercial relationship involving the sale of textiles. The respondent, a Belgian company, supplied goods to the appellant, an Ontario-based business. When the Belgian company entered liquidation, its liquidator identified unpaid invoices owed by the appellant and commenced legal proceedings in Belgium to recover the outstanding amounts.
The governing contract between the parties contained a jurisdiction clause specifying Belgium and its courts as a non-exclusive forum for resolving disputes. This clause would later prove significant.
The respondent served the Belgian Writ of Summons on the appellant by registered mail to its business address. An employee of the appellant acknowledged receipt of the materials. Despite this, the appellant did not respond to the proceeding. As a result, the Belgian court granted a final judgment in favour of the respondent for the unpaid amounts. When the appellant still failed to pay, the respondent brought an application in Ontario to recognize and enforce the Belgian judgment.
Ontario courts generally take a liberal approach to recognizing foreign judgments, provided certain criteria are met. The application judge applied the established test and concluded that recognition was appropriate.
To succeed, a party seeking recognition must demonstrate that:
In this case, the application judge found that all three elements were satisfied.
First, the Belgian court had jurisdiction, particularly given the contractual clause identifying Belgium as a forum for dispute resolution. Second, the judgment was final, having been issued by a competent court. Third, it involved a clearly defined monetary award based on unpaid invoices. As a result, the Belgian judgment was recognized in Ontario.
Even where the basic test is met, Ontario courts retain discretion to refuse recognition on limited grounds. These defences are narrowly construed and include:
The appellant attempted to resist recognition by arguing, among other things, that it disputed the underlying debt and that there were issues with service of the Belgian proceeding.
However, as the Court of Appeal emphasized, the merits of the underlying dispute are generally not open for reconsideration in a recognition proceeding. The focus is not on whether the foreign court was correct, but whether the judgment meets the criteria for enforcement.
The appellant also failed to establish a valid natural justice concern. The record showed that the appellant had been served and had chosen not to participate in the Belgian proceeding.
This highlights a critical point: a party cannot ignore foreign litigation and later attempt to relitigate the dispute in Ontario.
On appeal, the appellant sought to introduce new evidence addressing two issues:
The Court of Appeal rejected both arguments. Fresh evidence on appeal is governed by the well-known test from R. v. Palmer. To be admissible, the evidence must, among other things, be unavailable at trial despite due diligence and be capable of affecting the result.
The Court found that the proposed evidence did not meet this standard. It could have been presented before the application judge and, therefore, did not qualify as fresh evidence.
The appellant also argued that its previous legal counsel had been ineffective, particularly in failing to raise issues related to service.
The Court of Appeal firmly rejected this argument, emphasizing that ineffective assistance of counsel is not generally a basis for setting aside a civil judgment.
Absent exceptional circumstances, allegations of poor legal representation are matters between the client and the lawyer. They do not justify reopening a case or granting a new hearing.
The Court also rejected the appellant’s attempt to invoke a public interest exception, finding that it had no application in the circumstances.
Ultimately, the Court of Appeal found no error in the application judge’s decision. The Belgian court had jurisdiction, the judgment was final, and none of the recognized defences applied.
In particular, the appellant failed to establish any breach of natural justice that would justify refusing recognition of the foreign judgment.
The appeal was dismissed, and the respondent was awarded costs.
This decision offers several important lessons for Ontario businesses involved in international transactions.
Failing to respond to litigation in another jurisdiction can have serious consequences. If a valid judgment is obtained abroad, Ontario courts are likely to enforce it.
Contractual provisions identifying a foreign jurisdiction can significantly strengthen the case for recognition. Businesses should carefully review and understand these clauses when entering into international agreements.
Ontario courts will not revisit the merits of the underlying dispute. The available defences—fraud, natural justice, and public policy—are narrow and strictly applied.
Attempts to introduce new evidence on appeal are rarely successful. Parties must ensure that all relevant evidence and arguments are presented at the initial hearing.
Dissatisfaction with legal representation does not generally provide a basis to overturn a civil judgment. Clients must seek recourse against counsel separately, if warranted.
The decision reflects Ontario courts’ ongoing commitment to principles of comity and international cooperation. By recognizing and enforcing foreign judgments in appropriate cases, courts promote predictability and stability in global commerce.
At the same time, the case underscores the importance of procedural fairness. Where a party has been properly notified and given an opportunity to participate, Ontario courts will not intervene simply because the outcome is unfavourable.
For businesses operating internationally, this means that legal risks do not stop at national borders. A dispute in another country can quickly become enforceable in Ontario.
The commercial litigation lawyers at Milosevic & Associates serve clients across Ontario and can assess whether a foreign judgment is enforceable, identify potential defences, and develop a practical litigation strategy tailored to your circumstances. Whether you are seeking to enforce a foreign judgment or resist one, timely action is critical.
Contact the firm online or call (416) 916-1387 to schedule a consultation and protect your interests in complex international litigation matters.
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