ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LANE, GREER AND EPSTEIN JJ.
B E T W E E N:
JUANITA MONTEIRO
Gregory M. Sidlofsky, for the Plaintiff (Appellant)
Plaintiff
- and -
THE TORONTO DOMINION BANK
Colin C. Taylor, for the Defendant (Respondent)
Defendant
-and-
JOSEPH MONTEIRO, EVELYN MONTEIRO and FRANK MONTEIRO
Third Parties (Respondents)
Debra L. Stephens for the Third Parties (Respondents)
Heard at Toronto: October 24, 2005
1The appellant, Juanita Monteiro appeals, by leave of Pitt J., to the Divisional Court from the Order of the Honourable Mr. Justice H.J.W. Siegel dated October 5, 2004, dismissing the appellant’s motion for summary judgment brought against the defendant/respondent, Toronto Dominion Bank of Canada (“TD”).
2Juanita Monteiro is the daughter of Daisy and Sales Monteiro. Daisy and Sales resided in Kuwait, and after his death, Daisy remained a resident of Kuwait until her death in 1993. At the time of her death, Daisy had some $700,000 in an account in the TD in Toronto. Under her Will, made August 24, 1989, these funds were left to Juanita. For some reason, the TD accepted instructions from a lawyer acting for Joseph Monteiro, Juanita’s brother, without notice to Juanita, to transfer these funds to a bank in Switzerland to an account in Joseph’s name.
3The respondent in appeal, Evelyn Monteiro, is the widow of Joseph Monteiro, now deceased, and is a defendant in a third party claim brought by TD against Joseph Monteiro, Evelyn Monteiro and Joseph Monteiro’s brother, Frank Monteiro. Frank and the late Joseph will sometimes be referred to as “the brothers” in these reasons.
Litigation in Kuwait
4In 1994, Juanita commenced an action in Kuwait against her brothers to confirm the validity of Daisy’s Will. The brothers defended alleging, first, that the 1989 Will was not properly executed with the result that a previous Will, made in 1985, was the valid one; and second, that the funds had never belonged to Daisy, but were given to her by Sales for her use during her lifetime only and so passed to the brothers under the father’s Will. TD was not a party to the Kuwait proceedings.
5On March 25, 1995, the Kuwait Court of First Instance found the 1989 Will to be valid and enforceable and declared that Juanita was entitled to “all the properties provided for”. The brothers appealed.
6On June 14, 1999, the Kuwait Court of Appeal, First Circuit Personal Status Court, upheld the 1989 Will but referred to it as a “grant contract”, also called a Donation Contract, not as a Will. It did so by applying Kuwait civil law in the absence of proof of Indian law, which was the personal law of the parties. The court determined that the document granted to Juanita the property identified in the Will, but referred the matter to the Kuwait Experts Department for a precise determination of the assets owned by Daisy.
7On October 15, 2000, the Experts Department determined that the TD bank account was owned by Daisy, although it had little information about it. On April 27, 2003 the Court (First Circuit Personal Status) considered the report of the Experts Department as to what were the assets covered by the “grant contract” (the Will of 1989). It noted that the Experts Department report found that the “moveable properties involved in the ‘grant contract’ of August 24, 1989” were originally the property of Daisy and no other person. These properties included the TD account. The court accepted the report and concluded in its judgment of April 27, 2003 that the money in the TD Bank Account now belonged to Juanita by virtue of the finding that the funds were Daisy’s and passed to Juanita by the “grant contract”.
8The brothers appealed from the decision of the Kuwait Court of Appeal to the Court of Cassation, apparently the highest court in Kuwait. According to Joseph’s affidavit, Juanita also appealed the decision that the property passed to her under a donation contract and not a Will. The brothers requested a stay of judgment pending resolution of this litigation in Canada about the TD account. On June 29, 2003, the Court of Cassation, Second Personal Status Circuit, refused to suspend the execution of the judgment pending the appeal.
9Joseph died in early 2004. His appeal in Kuwait was apparently delayed pending receipt by counsel of special powers of attorney from all of his heirs, but was scheduled for a first hearing in April 2004, together with Juanita’s appeal.
The Action Against the TD Bank in Ontario
10Meanwhile, when Juanita learned that the money in the TD account had been transferred to Joseph, she commenced this action in Ontario against the TD, in September 1998. The TD issued a third party claim naming Joseph, Frank, and Joseph’s spouse, Evelyn Monteiro (“Evelyn”) as defendants.
11On May 23, 2000, Pepall J. refused a motion brought by Joseph to dismiss or stay the Ontario action pending the conclusion of the proceedings in Kuwait. Molloy J. granted leave to appeal from this decision to the Divisional Court on June 19, 2000. Molloy J. expressed concern with the status of the 1989 document. In Juanita’s pleadings, she claimed that she was bringing the action as executor of her mother’s Will. She now intended to amend the statement of claim to reflect the findings of the Kuwait Court of Appeal; she sought to assert that Juanita had owned the Bank Account since 1989 when it had been “given” to her. She intended to assert that in the alternative, she remained the beneficial owner under the document as a Will rather than as a donation contract. Molloy J. concluded: “It is one thing to plead such matters in the alternative where it is open to this court to make a determination. It is another thing altogether when the decision on that point is to be based on the ruling of a foreign court and the proceedings before that court have not yet been concluded” (at paragraph 9).
12The Divisional Court, however, agreed with the findings of Pepall J. when it heard the appeal. The panel agreed that the evidentiary record on the status and substance of the Kuwait court proceedings was wholly unsatisfactory. The moving party had not met the burden of showing the decision of Pepall J. had been clearly wrong.
13On February 14, 2002, Master Egan denied a motion brought by Juanita to amend the amended statement of claim, in which Juanita sought to assert that the bequest in the Will was actually an inter vivos gift. McCombs J. upheld this decision of Master Egan on June 17, 2002, stating that there was nothing in the record that could conceivably support the assertion that it was an inter vivos gift.
14The appellant moved for summary judgment against TD on October 23, 2003, claiming the sum of approximately $712,879.12 U.S. dollars, plus pre-judgment interest on that amount from August 12, 1993. The appellant also sought leave to amend her Amended Statement of Claim in the manner set out in Schedule A to her Notice of Motion, if necessary. The amendments sought to the amended statement of claim were to plead that:
by a judgment made on March 25, 1995 in Kuwait, the Kuwait Court of First Instance ruled that the Will of Daisy Monteiro (the mother of the appellant and two of the third parties), was valid, and therefore the appellant was entitled to Daisy’s bank account with TD;
the Kuwait appellate court dismissed an appeal of the March 25, 1995 judgment on April 27, 2003 and declared that the money in Daisy’s account with TD belonged to the appellant; and
the Kuwait appellate court refused to suspend the decision and held that the judgment could be enforced.
15The appellant elected not to proceed with her motion to amend the Amended Statement of Claim during her motion for summary judgment.
16Siegel J. dismissed Juanita’s motion for summary judgment on October 5, 2004. He stated at paragraph 29 of the endorsement that the Kuwait Court of Appeal’s finding that the Will was valid could be recognized, but the court could not recognize the Kuwaiti court’s finding with respect to the ownership of the bank account. The account was not within the control of the State of Kuwait, and therefore the finding of the Kuwait Court of Appeal was not a judgment in rem, even though the parties had submitted to the jurisdiction of the Kuwait courts. The question of the ownership of the bank account was thus a genuine issue for trial. Siegel J. noted that Juanita was not seeking to enforce an in personam judgment of the Kuwait courts against the Bank. In his view, the Ontario courts could only give effect to the judgment of the Kuwait Court of Appeal if it was a judgment in rem. Therefore, a genuine issue for trial existed with respect to ownership of the TD bank account, and specifically whether the account was owned by Joseph and Frank Monteiro as residuary beneficiaries of the Estate of their father, Sales Monteiro, upon the death of their mother, Daisy Monteiro.
17Alternatively, at paragraph 32 the motions judge stated that there was a genuine issue of trial as to whether or not the Kuwait decisions established the facts as pleaded in Juanita’s statement of claim. At paragraph 35, he noted “at a minimum”, the findings of the Kuwait Court of Appeal regarding the nature and timing of the alleged gift are not clear on the face of the translations provided. The Court of First Instance had ruled that the 1989 Will was valid and enforceable, but the Court of Appeal had referred to the document as a donation contract, not a Will. The meaning of this distinction was not clear and this lack of clarity required a trial. The lack of clarity was not assisted by the fact that Juanita had not taken a firm position on the legal characterization of the 1989 Will.
18As the learned motions judge found that there were other genuine issues of fact requiring a trial, he did not address in his endorsement, the matters raised by Evelyn Monteiro and TD to the effect that:
the decision of the Kuwait Court of Appeal, upon which the appellant relied, was not properly proved before the court; and
that if summary judgment was awarded, a stay of execution should be granted in Ontario until the outcome of the appeals in the Kuwaiti court were determined.
19Juanita applied for leave to appeal, which was granted by Pitt J.
Fresh Evidence:
20At the opening of the appeal, the appellant and the Third Parties each sought to introduce fresh evidence as to new developments, since the argument before Siegel J., in the litigation on-going in Kuwait in connection with the judgment on which the motion for summary judgment here is based. For reasons delivered orally, we permitted both sides to file the fresh evidence. There remained an outstanding issue as to the adequacy of the proof of these documents and of certain other Kuwaiti Court documents already in the evidence. It appeared that the history of the case was that formal proof under the seal of the Kuwaiti Court had not hitherto been insisted upon and so these documents were admitted on the same basis subject to further argument as to the status of all such Court records.
21The fresh evidence makes it clear that the proceedings in Kuwait are far from completed even now, a year after the release of Siegel J.’s decision refusing summary judgment. The Third Parties filed Kuwaiti Court documents showing that in March, 2005, the Court of Cassation, First Personal Status Circuit, released a decision confirming that it had allowed an appeal against the judgment of the Court of Appeal and had remitted the case to the Expert’s Department to consider further evidence as to the ownership of the bank accounts in Canada and in Kuwait in order to determine whether they passed under the Will or Donation Contract executed by Daisy Monteiro in favour of the plaintiff, Juanita Monteiro, or were the property of Daisy’s husband, Sales, and passed under his devise to the Third Parties.
22The plaintiff/appellant’s fresh evidence included a copy of the report of the Expert’s Department to the Court. This report concludes:
Concerning the account opened in Canada, what is clear is that it is in the name of the donor [Daisy Monteiro] and the appellants [Joseph and Frank Monteiro] did not provide documents making sure that the money deposited in this account were the property of their devisor [Sales Monteiro], in addition to the existence of a legal dispute with respect to this in Canada according to the words of the litigants about this.
23The report may or may not be accepted by the Court of Cassation; there is in the record no evidence as to that. If it is accepted, apparently the litigation in Kuwait would thereby end in the present plaintiff’s favour, but it is as unwise to speculate about other peoples’ legal systems as it is to speculate about our own. There may well be further recourse available to the Third Parties. On the evidence before us the case in Kuwait is not over and the judgment on which this motion was based is not actually final. Nevertheless it may be final in the sense required by the case law discussed below.
Standard of Review
24In Casurina Limited Partnership v. Rio Algom Ltd. (2004), 40 B.L.R. (3rd) 112 (C.A.), Feldman J.A. stated, at para. 22:
An appeal court is required to show deference to the decisions of trial and application judges on questions of fact including the drawing of inferences from facts, and on questions of mixed fact and law, and may only interfere if the judge has made a "palpable and overriding error". On questions of law, the lower court must be correct, including where findings on issues of mixed fact and law include an erroneous statement of the applicable law: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R 235.
25Where, as here, the record is largely a paper one, there is still deference to the motion judge’s findings of fact. This is not based on an advantage in dealing with the evidence of witnesses, but rather on the necessity for a degree of deference as an integral part of the proper working of the court system. In Equity Waste Management of Canada v. Halton Hills (Town), 35 O.R. (3rd) 321 (C.A.), the Court said:
Therefore, although the entire record before a trial judge or a motion judge consists of documentary or written evidence, as it does in this case, the judge's factual findings are entitled to deference on appeal. What standard of deference applies in such a case? It is not easy to articulate a standard less deferential than "manifest error" but falling short of "correctness". I suggest that it may simply be a matter of weight or emphasis, or that, plausibly, a uniform standard of appellate review should be applied to a trial judge's findings of fact, whether the evidence is entirely oral, entirely documentary or, more typically, a combination of the two.
What is important for this appeal is the kind of error that justifies intervention by an appellate court. An error of law obviously justifies intervention. An appellate court may interfere with a finding of fact if the trial judge or motion judge disregarded, misapprehended, or failed to appreciate relevant evidence, made a finding not reasonably supported by the evidence, or drew an unreasonable inference from the evidence.
26The finding that a triable issue exists is a question of mixed law and fact and accordingly attracts deference from a reviewing court on the issue of the judge’s appreciation of the evidence, but not on the issues of law.
Analysis
27I first address the question of whether the Kuwait judgment is a final one, given that it is at present under appeal. It is settled law that no foreign judgment will be enforced here that is not final and conclusive.1 At first glance, one would think that the fact that a judgment is actually under appeal would render it a good deal less than conclusive, but the cases say otherwise. The test is whether the judgment is final in the court which gave it. If that is so, it is final and can be a basis for action here notwithstanding an appeal. As Henry J. said in Four Embarcadero Center Venture et al. v. Mr. Greenjeans Corp. et al. (1988), 64 O.R. (2nd) 746, 767:
An action may be commenced in Ontario to enforce a foreign money judgment that is final in the above sense, notwithstanding that it is under appeal where there is no stay of enforcement so that under the foreign law it may be enforced notwithstanding pendency of an appeal. …. If the judgment may be enforced in the foreign jurisdiction there is no sound reason of justice why it should not be enforced in Ontario; ….
28The evidence shows that the Kuwait Court has refused to stay the judgment under appeal and, accordingly, it remains enforceable here and can properly be the subject of an action to enforce it. Should judgment be granted against the TD while the appeal is still pending, it would be the usual course to stay the enforcement of the judgment of our court, or otherwise protect the rights of the parties until the foreign appeal is disposed of.2
29The respondents further submitted that the Kuwait judgment was not for a specific sum and so was not enforceable. The judgment awarded two bank accounts, including the account with TD “together with their money”, to the plaintiff. While no specific sum is stated, the balance in the account when it was transferred to the account of Joseph is a readily ascertainable sum. The plaintiff has pleaded the specific sum that she believes ought to have been there and the truth is in the knowledge of the TD. It seems to me that the judgment gives precise guidance as to what is involved. In Pro Swing Inc. v. Elta Golf Inc., 71 O.R. (3rd) 566 (C.A.), the Court of Appeal reversed a summary judgment enforcing a foreign judgment. The motions judge had held that the rule as to a fixed sum ought to be relaxed in the light of recent developments in the recognition of foreign judgments in our jurisprudence. The Court of Appeal found that the foreign judgment was vague on important matters and allowed the appeal. It expressed some sympathy with the judge’s view that the time was ripe for the relaxation of the rule, but found it would not have saved the judgment before it:
However, had the rule about the enforcement of non-monetary judgments been relaxed, a foreign judgment would still have to be sufficiently certain in its terms so that the Ontario courts could enforce it without having to interpret or vary it.
30The Supreme Court of Canada has granted leave to appeal (March 17, 2005) and so the rule will be re-examined. In my view, the present foreign judgment is sufficiently certain in its terms that it needs no interpretation, just the amount of the balance on the day of transfer. Since the TD can readily fill the gap, it would be unjust to permit it to evade the Kuwait judgment by withholding the simple fact necessary to make it effective.
31Turning to the merits of the summary judgment motion, there is ample evidence in the record to support the need for a trial to determine the ownership of the funds in the TD account, unless the TD is bound by the ultimate decision in Kuwait. The affidavit of Joseph and documents before the court reveal a triable issue as to whether the funds were Daisy’s or were her husband’s even though in her name, and so passed to the brothers. That is the very issue being determined in Kuwait. The central issue here in Ontario is whether the TD is bound by the Kuwait decision when it was not a party to that proceeding. The motions judge refused to grant summary judgment based on an analysis that the TD would not be bound by the Kuwait judgment as it was not in rem but was in personam against the defendants only and did not bind the world. In my view, while that analysis appears to be correct so far as it goes, it does not resolve the question of whether the TD can re-litigate the ownership of these funds. That depends on whether the Kuwait judgment is capable of raising an issue estoppel against the TD on the ownership issue.
32The appellant submits that the TD has no interest in the funds and cannot assert any claim that does not derive from the brothers. Since the brothers are bound by the judgment, having attorned to the Kuwait jurisdiction, the TD is also bound. The TD is bound to deliver the funds to the true owner and the only persons with a claim to them have become bound by the Kuwait decision. The TD gave the funds to Joseph and its interest is entirely identical to his. It is a “privy” of the brothers and so bound even though not a party.
33The TD submits that it cannot be seen as a privy of the brothers. It was not a party to, and did not intervene in the Kuwait proceedings, nor was there any evidence that it could have intervened had it sought to do so. It had no arrangement with the brothers and no relationship to them except that it paid them the disputed funds.
34In Nana Ofori Atta II et al v. Nana Abut Bonsra II et al., [1958] A.C. 95 (P.C.), Lord Denning at p. 101 stated:
The general rule of law undoubtedly is that no person is to be adversely affected by a judgment in an action to which he was not a party, because of the injustice of deciding an issue against him in his absence. But this general rule admits of two exceptions: one is that a person who is in privity with the parties, a "privy" as he is called, is bound equally with the parties, in which case he is estopped by res judicata: the other is that a person may have so acted as to preclude himself from challenging the judgment, in which case he is estopped by his conduct.
35In Bank of Montreal v. Mitchell, [1997] O.J. No.602, aff’d 1997 14484 (ON CA), 151 D.L.R. (4th) 574 (C.A), Farley J. dealt with the privity issue at paragraphs 49 and 50:
For privity of interest to exist there must be a sufficient degree of connection or identification between the two parties for it to be just and common sense to hold that a court decision involving the party litigant should be binding in a subsequent proceeding upon the non-litigant party in the original proceeding. As discussed above, where that non-litigant party has sufficient interest in those original proceedings to intervene but instead chooses to stand by and have the battle in which he has a practical and legal concern fought by someone else, it is appropriate to have the non-litigant abide by that previous decision: see ATL at pp. 312-43; Spring Garden at pp. 998-10004. As well, of course, it is the Names' interest at the very base of this question of the fraud defence; the interest of the Banks in this regard is in essence derivative from that of the Names.
It appears that the Names were content to let the Banks stumble and fall in the English Actions and in that regard merely reminded the Banks that they risked their reimbursement action against the Names if they did not plead fraud against Lloyd's. In that, it appears that the philosophy of the Names was that a stumble by the Banks was as good as a win by the Banks in the English Actions. It mattered not to the Names whether they achieved legal (and economic success by either route); this should be contrasted to what might well be characterized as the more regular and appropriate view that the Names and the Banks were allies in the question of attempting to prove fraud by Lloyd's - a win by the Banks would be a win for the Names as they would not have to face a reimbursement claim by the Banks now. In ATL, the B of M and its customers were allies in the Korean litigation. Of course it may not have been timely or opportune for the Names to have fought a fraud battle with Lloyd's in 1993; they may have wished to have more time to prepare a "better case", or to have husbanded their scarce resources (although it would not appear that the Banks would have been prevented from interim billing the Names and collecting as to the legal costs of the English Actions) or to have seen how other cases came out or to have engaged in or prepared for resolution discussions. That of course is speculation. However to the extent that a win was a win for both the Banks and for the Names, they shared an identical interest in substance and therefore the Names had a privity of interest with the Banks in the English Actions.
36As in Mitchell, so here, the litigant brothers and the non-litigant TD share “an identical interest in substance” and a win for the one was a win for the other.
37In Danyluk v Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 SCR 460, Binnie J. dealt with the requirements to establish issue estoppel. At paragraph 59 he addressed the requirement that “the parties to the judicial decision or their privies must be the same persons as the parties to the proceedings in which the estoppel is raised or their privies”.
This requirement assures mutuality. If the limitation did not exist, a stranger to the earlier proceeding could insist that a party thereto be bound in subsequent litigation by the findings in the earlier litigation even though the stranger, who became a party only to the subsequent litigation, would not be: Machin, supra; Minott v. O'Shanter Development Co. (1999), 42 O.R. (3d) 321 (C.A.), per Laskin J.A., at pp. 339-40. The mutuality requirement was subject to some critical comment by McEachern C.J.B.C. when sitting as a trial judge in Saskatoon Credit Union Ltd. v. Central Park Ent. Ltd. (1988), 22 B.C.L.R. (2d) 89 (S.C.), at p. 96, and has been substantially modified in many jurisdictions in the United States: see Holmested and Watson, supra, at 21 s. 24, and G. D. Watson"Duplicative Litigation: Issue Estoppel, Abuse of Process and the Death of Mutuality" (1990), 69 Can. Bar Rev. 623.
The concept of "privity" of course is somewhat elastic. The learned editors of J. Sopinka, S. N. Lederman and A. W. Bryant in The Law of Evidence in Canada (2nd ed. 1999), at p. 1088 say, somewhat pessimistically, that "[i]t is impossible to be categorical about the degree of interest which Will create privity" and that determinations must be made on a case-by-case basis.
38In the text The Law of Evidence referred to above, at paragraph 19.84, the authors write:
Res judicata operates not only against the parties, but also against persons in privity with the parties. Privity, it is stated, may arise out of a blood relationship or a coincidence of title or interest.
And at 19.86:
It is impossible to be categorical about the degree of interest which Will create privity. It has been said that “there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was a party should be binding in proceedings to which the other is a party.
39In Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No 2), [1967] 1 A.C. 853 (H.L.) the majority of the House of Lords held that a foreign judgment was as conclusive as an English judgment and so could found an estoppel.5 It is clear, however, that the foreign judgment must be a final one.
40In Cavers v. Laycock, [1963] 2 O.R. 639, (H.C.J.) it was held that the rights of a passenger in vehicle A against the operator of vehicle B were entirely governed by the rights of the driver of vehicle A in which he was a passenger. As the court had already determined in an action between the two drivers that there was no negligence on the part of the driver of vehicle B, the passenger could not re-litigate the negligence issue in an action of his own. This case parallels our present case.
41The issue before the foreign court was the ownership of the fund. The TD has no claim to own this money. Its sole interest is that it paid the fund to the brothers and it would like them to win. That is not an interest apart from the interest of the brothers; rather the TD’s rights are wholly derived from the rights of the brothers. There is total identification between the TD and the brothers on the ownership issue. On the authorities cited, and in common sense, that fact means that the TD and the brothers are privies in the sense necessary to make it manifestly just to hold that the TD should be bound on the ownership issue by the decision of a court of competent jurisdiction to which those parties with a claim to ownership have attorned. If this were the only point in the case, I would allow the appeal and grant the summary judgment.
42Notwithstanding this conclusion, I would not grant summary judgment on this record. There are open issues, including as to the formal proof of the foreign judgment and the need to amend the pleadings to plead the actual basis on which the plaintiff is proceeding: the foreign judgment. As the Amended Statement of Claim now stands, it puts in issue the ownership of the fund as a matter to be decided by our court. If the plaintiff wants to proceed on the basis that the ownership issue is now decided by the Kuwait decision, she will have to amend to plead that position, as she apparently intended to do, but did not, on the motion before Siegel J. The present pleading does not provide a basis for a summary judgment based on the foreign judgment. If that amendment were made, the genuine issue for trial discerned by the motion judge in paragraphs 31, 32, 33, 34 and 35 of his reasons, as to whether the Kuwait judgment establishes the facts pleaded, would disappear as irrelevant. It would not be open to the TD to go behind the Kuwait judgment in that fashion.
43Although my reasons differ from those of the motion judge, in the result his refusal of summary judgment was correct.
44I would dismiss the appeal. Costs, if not agreed, should be addressed by the parties in brief written submissions to be filed by the end of January 2006.
Lane J.
Greer J.
Epstein J.
Released:
Footnotes
- McLeod, J.G.: The Conflict of Laws; Carswell, Calgary, 1983, pages 622 ff.
- McLeod, op.cit. pages 624-5
- (1995) 36 C.P.C. (3rd) 288
- House of Spring Gardens Ltd. v. Waite, [1990] 2 All E.R. 990 (C.A.)
- See Lord Reid at pages 917-8, Lord Hodson at page 925, Lord Upjohn at page 948, Lord Wilberforce at page 966; Lord Guest, dissenting at page 938.
