Enforcing a judgment obtained in Ontario can be a challenge when the party ordered to pay damages is reluctant to abide by the order, or if the party is unable to pay the amount awarded in court. However, Ontario courts and successful parties are equipped with various methods of enforcing these awards, such as garnishment of wages, registration of liens against property, and more.
The process becomes more complex when the judgment in question was delivered in a foreign jurisdiction. With companies expanding operations into global markets, largely thanks to online commerce, it is more and more common for businesses to engage in litigation outside the boundaries of the province, and even the country. When one party engaged in litigation is an Ontario business and damages are awarded in another jurisdiction, the wronged party may look to Ontario’s courts to enforce the award here. However, before a court in Ontario, or Canada, can enforce a foreign judgment, the court must first establish that it has the appropriate jurisdiction.
Requirements to Enforce a Foreign Judgment in Ontario
Before an Ontario court will take steps to enforce a foreign judgment against a party in the province, certain requirements must be met. While additional factors may be considered specific to each case, courts will look for the following before agreeing to enforce a foreign judgment in Ontario:
- The judgment must be final;
- The judgment must have been granted in person;
- The judgment must be for a defined sum of money;
- The order must have been granted by a court with proper jurisdiction over the matter; and
- In order to enforce a judgment against a defendant located in Ontario, the court must be satisfied that the defendant has a ‘real and substantial’ connection to the jurisdiction in which the judgment was granted.
A judgment does not necessarily have to originate outside of Canada to be considered ‘foreign’. For example, a plaintiff may seek to enforce an award granted in another province against a defendant in Ontario. In either case, the defendant must have a substantial connection to Ontario before the court will agree to enforce the award. Under Ontario’s Reciprocal Enforcement of Judgments Act, a plaintiff can apply to an Ontario court to register a judgment granted in a reciprocating state-registered in Ontario.
SCC Refuses to Enforce BC Judgment Against Debtor in Ontario
In a recent Supreme Court of Canada case, called H.M.B. Holdings Ltd. v. Attorney General of Antigua and Barbuda, the plaintiff, H.M.B. Holdings Ltd. (HMB), had obtained a multimillion-dollar order against the country of Antigua for the expropriation of property it owned in Antigua. The original judgment was granted by Antigua’s highest court in the spring of 2014. HMB was able to collect a portion of the awar. However, in the fall of 2016, there was still a significant amount outstanding. HMB sought and was granted, an order in British Columbia to enforce the order in that province. HMB took this step with the intention of then enforcing the British Columbia judgment in Ontario. HMB took this rather circuitous route to enforcement in Ontario because it had missed the two-year limitation period to enforce the Antigua judgment in Ontario. However, the limitation period in British Columbia was a much more generous ten years.
The defendant did not defend the British Columbia action, and HMB was granted default judgment to enforce the award in that province. HMB then attempted to have the British Columbia judgment registered in Ontario under the Reciprocal Enforcement of Judgments Act. The defendant participated in this matter, arguing that the judgment should not be registered in Ontario because the defendant had no substantial connection to British Columbia when HMB obtained its default judgment.
What Does it Mean to “Carry on Business” in a Jurisdiction?
Pursuant to s. 3(b) of the Reciprocal Enforcement of Judgments Act, “if 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”, then an Ontario court can refuse to enforce the judgment of the original court.
The defendant claimed that it fell within s. 3(b) of the Act in that Antigua was not ‘carrying on business’ in British Columbia. The country had no physical presence in British Columbia in the form of an embassy or consulate. Further, the sole connection it did have, a program through which the Antigua government encouraged foreign investment by granting citizenship to investors located throughout the world, was not sufficient to say Antigua was ‘carrying on business’ in British Columbia.
In all, there were four authorized representatives who had worked with the investor citizenship program in Canada, and none of the four were affiliated with the Antiguan government. Further, while the program operated in Canada, it was not specific to Canada. In fact, fewer than 1% of the participants in the program were Canadian.
To Enforce a Foreign Judgment a connection between the Judgment Debtor and the Province must be Established
The application judge in Ontario found that the investment program was insufficient to say that Antigua had been carrying on business in Canada, a finding that was echoed by the Ontario Court of Appeal.
The Supreme Court found no error in any of the judge’s findings, and in deference to the lower court, upheld the decision. The Supreme Court decision sheds light on limitations to the enforcement of foreign judgments in Ontario pursuant to the Reciprocal Enforcement of Judgments Act. While the Act can provide creditors with a simplified process for collection, its application can be quite fact-dependent, and establishing a sufficient connection between a judgment debtor and Ontario may prove difficult.
For Exceptional Representation Enforcing Foreign Judgments in Ontario, Contact Milosevic & Associates
Contact Milosevic & Associates in Toronto for unparalleled representation in complex corporate commercial litigation including enforcement of foreign judgments and debt collection. Our highly skilled litigation lawyers will help find the most effective solution for you and ensure that your legal issue is resolved positively and quickly. Our impressive track record speaks for itself. Call us at 416-916-1387 or contact us online to learn more about how we can help.