In commercial litigation matters, parties may obtain and seek to enforce judgments made outside of Ontario in commercial litigation matters. In cross-border disputes, a party seeking to enforce a foreign judgment must proceed through a particular legal process within the appropriate time frame for a provincial court to recognize and enforce the foreign judgment.
A recent decision from the Court of Appeal for Ontario affirms the limitation period that applies in matters concerning foreign judgments and provides guidance on how appellate courts may address an issue when a party seeks to retract its position set forward in earlier stages of the litigation.
Respondent obtains judgment from New York court
In Sunlight General Capital LLC v. Effisolar Energy Corporation, the respondent, Sunlight General Capital LLC, obtained a judgment from the New York Supreme Court for $1.6 million against the appellant, Effisolar Energy Corporation (the appellant) on October 18, 2018.
On May 19, 2019, the appellant appealed the judgment. However, the appeal was administratively dismissed. On June 14, 2021, the respondent commenced an action in Ontario to recognize and enforce the New York judgment.
Recognition and enforcement action not statute-barred in Ontario
The Ontario Superior Court of Justice granted summary judgment in favour of the respondent after finding that the Ontario action was commenced in time. The motion judge found that the limitation period for the Ontario action began to run on May 19, 2019, which was the date the New York appeal was dismissed.
Despite the respondent’s recognition and enforcement action being brought outside the ordinary two-year limitation period, the motion judge determined that, due to the pandemic, the limitation periods were suspended for six months pursuant to the Reopening Ontario (A Flexible Response to COVID-19) Act. Therefore, the motion judge held that the respondent’s action was not statute-barred in Ontario.
Appellant argues limitation period began on date New York judgment was issued
Upon finding that the elements required for recognizing and enforcing a foreign judgment, as set out in Beals v. Saldanha, were met, the motion judge:
- Granted summary judgment in favour of the respondent;
- Ordered that the New York judgment be recognized and given full force and effect in Ontario;
- Ordered the appellant to pay the respondent an amount in Canadian currency sufficient to purchase (approximately) US$2.3 million, being the principal amount of the judgment plus interest; and
- Declared that the respondent was entitled to enforce the New York judgment in Ontario.
On appeal, the appellant contested the start date of the limitation period for recognizing and enforcing the New York judgment. The appellant argued that the motion judge erred in finding that the limitation period began to run on the date the New York appeal was dismissed. Alternatively, they argued that the limitation period commenced on October 18, 2018, when the New York judgment was issued.
Court of Appeal dismisses appeal
After hearing the appellant’s oral submissions, the Court of Appeal for Ontario did not call on the respondent, instead dismissing the appeal.
The Court of Appeal noted that this argument was not raised with the lower court and applied its previous decision in the matter of Independence Plaza 1 Associates L.L.C. v. Figliolini, stating that the appellant had agreed that:
“… the limitation period on the enforcement of a foreign judgment begins to run from the date on which the right of appeal in respect of the judgment expires, the date on which the appeal is decided, or the date on which the appeal is dismissed.”
The Court also noted that the parties had agreed that the appellant’s New York appeal was dismissed on May 19, 2019, and the appellant sought to abandon its agreement that the decision from Independence Plaza 1 Associates L.L.C. v. Figliolini applied. However, the Court declined to allow the appellant to change this agreement, which was the basis on which the motion was argued.
The appellant also sought to hear the appeal by a panel of five judges to reconsider whether the principles in Independence Plaza 1 Associates L.L.C. v. Figliolini applied. However, this argument was rejected by the Associate Chief Justice. As a result, the Court was not prepared to reconsider the holding in the case.
Ultimately, the Court of Appeal dismissed the appeal. Instead, the New York judgment was recognized and given full force and effect, and the appellant was ordered to pay the respondent the principal judgment amount plus interest totalling USD$2.3 million.
This case emphasizes the issues that may arise when attempting to retract, on appeal, a position taken at first instance. It also reaffirms that the limitation period for recognition and enforcement of foreign judgments runs from “the date on which the right of appeal in respect of that judgment expires, the date on which the appeal is decided, or the date on which the appeal is dismissed.” Due to the complexities that can arise in disputes regarding foreign judgment enforcement, it is essential to consult with an experienced commercial litigation lawyer.
Contact the Commercial Litigators at Milosevic & Associates in Toronto for Advice on Foreign Judgment Enforcement
The experienced commercial litigation lawyers at Milosevic & Associates in Toronto frequently provide clients with skilled representation in debt collection and enforcement of foreign judgment disputes. Our highly skilled team of litigators helps clients develop practical solutions that suit their needs and allow for swift resolution of their legal issues. To schedule a consultation with a member of our team to learn how we can assist you, contact our office by phone at 416-916-1387 or reach out to us online.