Overview
The Ontario Court of Appeal recently considered the circumstances in which an Ontario court will recognize and enforce the judgment of another Canadian province which has itself recognized and enforced a foreign judgment.1 H.M.B. is the first Canadian decision considering the availability of "ricochet judgments" at common law, and emphasizes the care claimants must take in selecting the appropriate province(s) to commence recognition and enforcement proceedings.
Background
The appellant, H.M.B. Holdings Limited ("H.M.B."), owned a hotel in Antigua and Barbuda which was severely damaged by Hurricane Luis in September 1995. The Antiguan government expropriated the property in 2007, leading to years-long litigation at several levels of court regarding the valuation of the property. In May 2014, the Judicial Committee of the Privy Council held that the respondent, the Attorney General of Antigua and Barbuda ("Antigua"), was required to pay H.M.B. approximately US$26.6 million, plus interest (the "Privy Council Judgment").2 Only a portion of the judgment debt was paid.
In October 2016, H.M.B. commenced an action in the Supreme Court of British Columbia to recognize and enforce the Privy Council Judgment under the Court Jurisdiction and Proceedings Transfer Act.3 Antigua did not defend the action, and H.M.B was granted default judgment for approximately C$30 million (the "BC Judgment") to satisfy the outstanding judgment debt.
In May 2018, H.M.B. brought an application to register the BC Judgment in Ontario under the Reciprocal Enforcement of Judgments Act.4 It was unsuccessful at first instance, and on appeal to the Ontario Court of Appeal4 and the Supreme Court of Canada.6
In May 2019, H.M.B. commenced a new action seeking recognition and enforcement of the BC Judgment at common law.
The Motion Judge's Decision
Antigua moved for summary judgment to dismiss the action,7 arguing that no real and substantial connection existed between British Columbia and the Privy Council Judgment for the purpose of H.M.B.'s recognition and enforcement proceedings.
Antigua also argued that it was an abuse of process for H.M.B. to bring an action for recognition and enforcement of the BC Judgment in Ontario, rather than seeking enforcement of the Privy Council Judgment directly. Noting that the present action was commenced five years after the Privy Council Judgment was rendered, Antigua argued that a ricochet judgment would allow H.M.B to avoid Ontario's two-year limitation period.
The motion judge granted Antigua's motion on the first ground, concluding that there was no evidence of a real and substantial connection between British Columbia and the subject matter of the litigation, and therefore the BC Judgment was not enforceable in Ontario.
The Ontario Court of Appeal's Decision
The Ontario Court of Appeal held that the motion judge erred in focusing on whether there was a real and substantial connection between British Columbia and the original dispute, holding that the common law test for recognition and enforcement of original foreign judgments does not apply to the recognition and enforcement of ricochet judgments.8
Writing for the Court, Favreau J.A. confirmed that, as a general principle, Ontario courts will recognize and enforce the judgments of another jurisdiction as long as the original jurisdiction had a real and substantial connection with the claim or defendant and none of the bars to recognition and enforcement are present – for instance, if the foreign judgment was obtained by fraud, if the foreign court breached the rules of natural justice or if recognizing and enforcing the foreign judgment would be contrary to public policy.9
However, Favreau J.A. noted that different considerations arise in an action seeking recognition and enforcement of a ricochet judgment:
- Comity is not at issue. While recognition and
enforcement actions require the local court to show deference and
respect for judgments rendered by a foreign court, such concerns do
not arise when considering ricochet judgments. Recognition and
enforcement proceedings are local in scope, determined by the
legislative and procedural choices made by each province in respect
of the enforcement of judgments in its jurisdiction.
- Recognition and enforcement actions require a consideration of local laws. The purpose of a recognition and enforcement action is to assist the plaintiff in realizing on the foreign judgment – for instance, by providing access to seizable assets within the jurisdiction. The role of the local court is to facilitate enforcement in accordance with its own law, requiring a consideration of local legislation (including the applicable limitation period) to determine whether assets in the jurisdiction should be made available to satisfy the judgment debt.
The Court noted that recognizing the BC Judgment in Ontario would allow H.M.B. to circumvent Ontario's own recognition and enforcement rules, and deprive Antigua of valid defences that would have been available in an action for recognition and enforcement of the original judgment. Here, Favreau J.A. appeared sympathetic to Antigua's argument that an action by H.M.B. to enforce the Privy Council Judgment would have been statute-barred under the law of Ontario, and a ricochet judgment would thereby deprive Antigua of the limitations defence it would have otherwise had if H.M.B. sought recognition and enforcement of the Privy Council Judgment in Ontario.
Takeaway
Ricochet judgments are not available at common law in Ontario. Absent a statutory registration mechanism, Ontario courts will not recognize and enforce a recognition and enforcement judgment issued in another province. While the initial recognition and enforcement judgment may be relevant,10 the claimant must still seek recognition and enforcement of the original judgment in Ontario pursuant to the usual test by showing that the foreign court properly assumed jurisdiction over the dispute and that no defences to recognition and enforcement apply.
Footnotes
1. H.M.B. Holdings Limited v. Antigua and Barbuda, 2022 ONCA 630[H.M.B.].
2. The Attorney General v. HMB Holdings Ltd, [2014] UKPC 5.
4. H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), 2019 ONSC 1445; see also R.S.O. 1990, c. R.5 [REJA] (the REJA allows a judgment creditor to bring an application in Ontario to have a judgment rendered by the court of a reciprocating jurisdiction registered in the Superior Court of Justice).
5. H.M.B. Holdings Limited v. Antigua and Barbuda, 2020 ONCA 12.
6. H.M.B. Holdings Ltd. v. Antigua and Barbuda, 2021 SCC 44.
7. H.M.B. Holdings Ltd. v. Attorney General of Antigua and Barbuda, 2021 ONSC 2307.
8. H.M.B., supra note 1 at paras 36, 48.
9. H.M.B., supra note 1 at para 31.
10. For instance, the doctrines of res judicata, issue estoppel or abuse of process may simplify the second recognition and enforcement proceeding by precluding the defendant from arguing that the real and substantial connection test is not met.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
