Court of Appeal for Ontario

Docket: C65364

Judges: Juriansz, Brown and Roberts JJ.A.

Between

Brahma Finance (BVI) Limited and Nicholas Eaton Crocker Barham Applicants (Respondents)

and

Datawind Inc. Respondent (Appellant)

Counsel

For the Appellant: Katrina Marciniak

For the Respondents: Paul-Erik Veel and Madison Robins

Heard: December 3, 2018

On appeal from: The order of Justice Heather McArthur of the Superior Court of Justice, dated April 5, 2018.

Reasons for Decision

[1] The appellant, Datawind Inc., appeals the order of the application judge registering the June 21, 2017 order (the "Costs Order") of the United Kingdom High Court of Justice, Chancery Division (the "Foreign Court") pursuant to the Convention for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters (the "Convention") set out in the Schedule to the Reciprocal Enforcement of Judgments (U.K.) Act, R.S.O. 1990, c. R.6 (the "Act").

[2] At the hearing of the appeal, we dismissed the appeal, with reasons to follow. These are those reasons.

[3] In its factum, Datawind argues that for the purposes of the Convention the Foreign Court could not be regarded as having jurisdiction because Datawind was not a named plaintiff or defendant in the U.K. proceeding, it was merely a respondent to the third-party cost application brought against it by the respondents under rule 46.2 of the United Kingdom Civil Procedure Rules. However, at the hearing of the appeal Datawind clarified that its primary arguments were that the Costs Order could not be registered under the Convention as it is not for a definite amount and that Datawind had been denied natural justice in the third-party cost proceeding. Datawind is no longer questioning the jurisdiction of the Foreign Court.

[4] That was an appropriate position for Datawind to take given the circumstances of this case: (i) the third-party cost proceeding is an available procedure under the U.K. Civil Procedure Rules; (ii) when served with a notice of the respondents' intention to seek costs against it, Datawind attorned to the jurisdiction of the Foreign Court, consenting to an order joining it to the proceedings for the purposes of costs; (iii) Datawind opposed the third-party cost application on the merits; (iv) a real and substantial connection existed between the Foreign Court and the action in which the third-party cost application arose because Datawind was the sole shareholder of the claimant, Tablet Investments (Guernsey) Limited, which had commenced the action in the Foreign Court; and (v) Datawind is a person against whom the judgment is enforceable under the law of the territory of the Foreign Court. Accordingly, the Foreign Court clearly had jurisdiction over Datawind for the purposes of the Convention: Arts. I(f) and V(1)(f)[1]; Janet Walker, Canadian Conflict of Laws, loose-leaf (2017), 6th ed. (Toronto: LexisNexis, 2005), at p. 14-116.

[5] However, Datawind submits the application judge committed two errors in registering the Costs Order.

First Error: Definite Sum Requirement

[6] First, Datawind contends that the application judge erred by registering the Costs Order when it was not an order for a definite and ascertainable sum of money. Para. 1 of the Costs Order requires Datawind to pay the respondents "costs incurred in this action to be the subject of detailed assessment on the standard basis if not agreed"; Para. 3 requires Datawind "to make an interim payment on account of the [respondents'] said costs in the sum of £87,000 by 4 pm on 5 July 2017"; and para. 4 orders Datawind to pay the respondents' costs of the third-party cost application "summarily assessed at £21,756 by 4 pm on 5 July 2017." Datawind submits that only the costs ordered by para. 4 constitute a final order for a definite sum that is registrable under the Convention.

[7] We do not agree. Art. II(3) of the Convention states that its enforcement provisions "apply only to a judgment whereby a sum of money is made payable." The interim payment on account of costs contained in para. 3 of the Costs Order constitutes such a judgment. Its payment was due by a specified date and payment of the amount was not made conditional upon the future conduct of an assessment. Moreover, in the third-party costs proceeding, the presiding officer noted that "[i]t is accepted, on behalf of [Datawind], that it is appropriate to make a payment on account of costs": [2017] EWHC 3479 (Ch), at para. 48. Finally, although para. 1 of the Costs Order contemplates a future assessment process to fix the amount of third party costs payable in addition to the interim payment on account, the respondents concede in para. 84 of their factum that they have not commenced such an assessment procedure and "are by now well out of time to do so."

Second Error: Natural Justice

[8] Second, Datawind contends that the Costs Order should not be registered as it was obtained through a process that involved a denial of natural justice. Datawind argues that the absence of the ability to cross-examine the respondents on their third party cost materials in the Foreign Court denied it natural justice.

[9] In advancing this argument, Datawind draws on the defence of lack of natural justice to a common law action to enforce a foreign judgment. In such actions, the enforcing court must be satisfied that minimum standards of fairness have been applied by the foreign court: Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416, at para. 60.

[10] In Society of Lloyd's v. Saunders (2001), 55 O.R. (3d) 688 (C.A.), this court was not prepared to decide whether a denial of natural justice not specifically referred to in Arts. IV(1) and (2) of the Convention is included within the ambit of Art. IV(1)(e), which provides that registration of a judgment shall be refused or set aside if the "enforcement of the judgment would be contrary to public policy in the territory of the registering court": at para. 20. Instead, this court assumed, for the purpose of its analysis, that a denial of natural justice can be considered to be contrary to public policy and therefore within the public policy ground for refusal to register under Art. IV(1)(e) of the Convention. No denial of natural justice was found.

[11] Adopting the same approach, we see no denial of natural justice to Datawind in the U.K. third-party cost proceedings. During its participation in those proceedings, Datawind raised no objection to the absence of cross-examination in the process. Moreover, the procedure on the U.K. third-party cost application afforded Datawind a full opportunity to respond to the respondents' materials and to make submissions – written and oral – on the application. The process under the U.K. Civil Procedures Rules more than met minimum standards of fairness, and we see no basis for an argument that enforcement of the Costs Order would be contrary to the public policy of Ontario.

Conclusion

[12] For those reasons, we see no error by the application judge in registering the Costs Order pursuant to the Convention. The appeal is dismissed.

[13] Based on the agreement of the parties, Datawind shall pay the respondents their costs of this appeal fixed in the amount of $9,300, inclusive of disbursements and applicable taxes.

"R.G. Juriansz J.A." "David Brown J.A." "L.B. Roberts J.A."

Footnote

[1] Article I(f) states: "In this Convention … 'judgment debtor' means the person against whom the judgment was given and includes any person against whom the judgment is enforceable under the law of the territory of origin." Article V(1)(f) states: "For the purposes of Article IV(1)(c) the original court shall be regarded as having jurisdiction if … (f) the jurisdiction of the original court is otherwise recognized by the registering court."