COURT FILE NO.: CV-22-00683303-0000 DATE: 20231128 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ROGER VANDEN BERGHE NV IN LIQUIDATION BY ITS LIQUIDATOR, RIK CRIVITZ Applicant – and – MERINOS CARPET INC. Respondent
Counsel: Darren Marr, for the Applicant Riaz S. Ahmed, for the Respondent Sydney Hodge, for Riaz S. Ahmed
HEARD: June 9, 2023
VERMETTE J.
Endorsement
[1] The Applicant applies for the recognition and enforcement in Ontario of a judgment granted by Ghent Business Court, Kortrijk Division, First Chamber, a court in Belgium (“Belgian Court”) dated December 17, 2020, bearing case number A/20/00877 (“Belgian Judgment”).
[2] The Belgian Judgment was rendered by a court of competent jurisdiction, is final and is for a definite sum of money. The Respondent has not discharged its burden to establish the availability of a defence to the recognition of a foreign judgment. Accordingly, the Application is granted.
A. FACTUAL BACKGROUND
1. The parties and their relationship
[3] Roger Vanden Berghe NV (“Vanden Berghe”) was a Belgian limited liability company established in 1971. Prior to its liquidation, its business included the purchase, sale, import, export and manufacture of rugs, yarns, fabrics. furniture fabrics, carpets, textile fibres and other textiles. It was located in Belgium.
[4] In November 2018, Vanden Berghe was dissolved. Two Belgian lawyers were appointed as the liquidators for the company (“Liquidator”). They were confirmed by an order of the Belgian Court dated November 6, 2018 (“Liquidation Order”).
[5] The Respondent Merinos Carpet Inc. (“Merinos”) is a company incorporated pursuant to the laws of Ontario. It carries on business in Mississauga, Ontario as a wholesaler and distributor of rugs and carpets. Merinos’ Corporate Profile Report states that its registered or head office address is 1611 Courtney Park Drive, Mississauga, Ontario, L5T 1V9 (“1611 Courtney Park”).
[6] Merinos was a long-time customer of Vanden Berghe and had made a number of orders of textile products from Vanden Berghe over several years. The orders were processed in Belgium.
[7] Van Berghe’s contracts included terms and conditions, notably the following clause:
- APPLICABLE LAW – DISPUTES
The present terms are applicable to all our contracts, to the exclusion of eventual terms of our buyer. The Belgian law is applicated with the exception of the retention of title clause. For this clause the law of the country of buyer’s domicile is applicated. Disputes arising out of our contracts shall be referred to the Courts of the district of Kortrijk (Belgium) or, at our discretion, to the Courts at the buyer’s domicile.
2. The Belgian proceeding and the Belgian Judgment
[8] Following the Liquidation Order and a review of outstanding invoices issued to customers of Vanden Berghe, the Liquidator concluded that Merinos owed funds to Vanden Berghe under several outstanding invoices for its textile orders (“Invoices”). According to the Liquidator, the principal amount owed under the Invoices was €82,633.11.
[9] The Liquidator commenced a proceeding against Merinos in the Belgian Court bearing case number A/20/00877 (“Belgian Proceeding”). The Belgian Proceeding was commenced by way of a writ of summons issued by the Liquidator dated January 10, 2020 (“Writ of Summons”).
[10] Later in January 2020, a bailiff retained by the Liquidator served the Writ of Summons on Merinos by registered mail at the address 1100 Courtney Park Drive East, Mississauga, Ontario, L5T 1S7 (“1100 Courtney Park”). Sam Huysentruyt, one of the Liquidator’s Belgian lawyers, states the following in his affidavit on the issue of service:
I am informed by Beckers Luc (“Luc”), a process server/bailiff retained by the Liquidator, that in January, 2020, Luc, served the Writ of Summons on Merinos. Service was effected by registered mail to 1100 Courtney Park Drive East, Missisauga, Ontario L5T 1S7 Canada (“1100 Courtney Park”). 1100 Courtney Park is Merinos’ registered address and the address provided by Merinos to Vanden Berghe and the address on each of the Invoices. The registered mail was stamped as delivered on January 29, 2020 (the “Confirmation of Delivery”). […]
[11] It appears from the Writ of Summons that other steps were taken regarding service. The Writ of Summons, which is signed by the bailiff, states as follows:
In pursuance of the International Convention on the service and notification abroad of legal and extralegal documents in civil and commercial matters, drawn up at The Hague on November 15th, 1965 (approved by the law of January 24th, 1970 – Belgian Official Gazette of February 9th, 1971), entered into force for Canada on May 1st, 1989,
Sent, under registered cover, deposited today at the post office of Kortrijk
an application duly completed in English, corresponding to the model form attached as an appendix to the Convention,
a cheque for an amount of 100 CAD
two copies of the present writ (and of the documents mentioned therein), each copy of the writ accompanied by
a) a form drawn up in English, indicating the nature and the subject of the judicial document,
b) a translation in English,
to the central Authority designated by the above-mentioned Contracting State,
MINISTRY OF THE ATTORNEY GENERAL Ontario Court of Justice Court House 393 Main Street HAILEYBURY – ONTARIO POJ 1KO CANADA
Requesting the latter:
- to have one copy of the present writ, mentioned under 2 o above, as well as the form indicating the nature and the subject of the legal document and the translation, served on:
MERINOS CARPET INC., with registered office at 1100 Courtneypark Drive East, Mississauga, ONTARIO, L5T 1S7 CANADA
In compliance with the formalities prescribed in the laws of the addressed State for the service or notification of documents drawn up in that state and destined for persons residing there, in particular PURSUANT TO ARTICLE 5, PAR. 1 LITT. A of the above-mentioned Convention,
- to return to me the other copy, with the declaration provided for by article 6 of the Convention, stating that the request was carried out and also mentioning the form in which, the place where and the time at which this was done, the person to whom the document was handed over or, should the occasion arise, the circumstances which might have hindered the execution of the request.
And since article 10 of the above-mentioned Convention has no influence on the authority to send judicial documents directly by post to persons residing abroad, unless the State of destination objects – quod non – I also sent, in accordance with the provisions of article 40 of the Belgian Code of Civil Procedure, two copies of the present writ (and of the documents mentioned therein), each copy accompanied by a form indicating the nature and the subject matter of the document and by a translation in English, each copy separately by registered post with acknowledgement of receipt, to the address of the party concerned, serving my writ at the above-mentioned post office.
And I attached the receipt of the registered post to the original of the present writ.
[12] The Confirmation of Delivery referred to in the affidavit filed by the Applicant shows a Canada Post stamp dated January 29, 2020. There is no evidence in the record before me as to whether Canada served the Writ of Summons in accordance with The Hague Convention.
[13] The Writ of Summons required Merinos to appear at a public hearing before the Belgian Court on May 7, 2020 at 9:30 a.m.
[14] Merinos did not respond to the Belgian Proceeding.
[15] On December 17, 2020, the Belgian Court granted the Belgian Judgment. The first three paragraphs of the Belgian Judgment read as follows:
The court heard the plaintiff in an open session and took note of the documents filed and the exhibits in the case file. Articles 2, 37 and 41 of the Use of Languages in Judicial Matters Act of 15 June 1935 are applied.
By writ of summons of 10 January 2020, the plaintiff claims payment of €101,461.28 + interest and costs of the proceedings from the defendant.
At the hearing on 19 November 2020, to which the defendant was summoned by judicially recorded delivery dated 6 August 2020, the defendant did not appear, and the plaintiff called for judgment in default.
[16] Under the terms of the Belgian Judgment, the Belgian Court ordered Merinos to pay €84,493.11 to the Liquidator. It also awarded pre and post judgment interest at the following rates:
a. For €82,633.11 at the rate prescribed by Article 5 of the Act of 2 August 2002 (“August 2002 Act”) from the first day after the respective due dates of the Invoices until the day of payment.
b. For €1,860 at the statutory rate provided for in the Act of 5 May 1865 (“May 1865 Act”) from the date of the Writ of Summons until the date of payment. [1]
[17] The interest rate under the August 2002 Act for 2020 through 2022 was 8% per annum. The interest rate under the May 1865 Act was 1.75% per annum in 2020-2021 and 1.5% per annum in 2022.
[18] The Belgian Court also ordered Merinos to pay costs to the Liquidator as follows:
a. €694.53 for the summons and the costs of service in Canada;
b. €1,200 in litigation costs; and
c. €165 in court fees.
[19] On March 15, 2021, a process server retained by the Liquidator served Merinos with a copy of the Belgian Judgment, in the same manner as set out in the Writ of Summons. The Liquidator received no response from Merinos following the service of the Belgian Judgment.
[20] On December 17, 2021, the Applicant’s lawyers sent a letter to Merinos demanding payment under the Belgian Judgment. The letter enclosed a copy of the Belgian Judgment. Merinos did not respond to this letter. The letter was sent to 1611 Courtney Park and 1561 Courtney Park Drive East, Mississauga, Ontario, L5T 1V9.
[21] To date, Merinos has not paid any amounts owing under the Belgian Judgment.
3. The Application
[22] This Application was commenced on June 28, 2022. The Application Record was served personally on Merinos on July 6, 2022. A copy of the Application Record was also sent by e-mail to Merinos’ lawyer on October 31, 2022.
[23] On October 11, 2022, counsel for the parties attended at Civil Practice Court. Justice Centa scheduled the hearing of the Application for June 9, 2023. He also ordered a timetable for the delivery of materials and other steps leading to the hearing. Pursuant to the court-ordered timetable, responding materials had to be delivered by December 9, 2022.
4. Late-served responding materials
[24] On June 5, 2023, four days before the hearing, Samit Basmaji, the Director and General Manager of Merinos, swore an affidavit. This affidavit was served on the Applicant on the same day.
[25] In his affidavit, Mr. Basmaji points out that contrary to what is stated in the Applicant’s affidavit evidence, Merinos’ registered address is 1611 Courtney Park, not 1100 Courtney Park. Mr. Basmaji attaches to his affidavit: (a) invoices issued by Vanden Berghe to Merinos and other shipping documents with the address 1611 Courtney Park; and (b) correspondence from the Liquidator addressed to Merinos at 1611 Courtney Park.
[26] Mr. Basmaji also notes that the postal code used in the Writ of Summons for the address 1100 Courtney Park is wrong. He attaches to his affidavit a Canada Post postal code lookup for 1100 Courtney Part that shows that the postal code should be L5T 1L7 instead of L5T 1S7.
[27] Mr. Basmaji states the following in his affidavit:
Even if Merinos was properly served, it would not have been able to attend the hearing of the Belgium Proceeding due to Covid-19 related travel restrictions. The Writ of Summons at Exhibit “E” of the Application Record indicates that the hearing was scheduled for May 7, 2020.
In fact, Belgium was enforcing travel restrictions due to Covid-19 until at least August 31, 2020, pursuant to which only essential travel was permitted. […]
It appears from the Judgment at Exhibit “G” of the Applicants’ [sic] record that the hearing was actually held on November 19, 2020. I do not know what travel restrictions existed at that time in Belgium, however Merinos never received notice of the hearing date in any event.
[28] Mr. Basmaji also gives evidence regarding the merits of the Applicant’s claim and he denies that Merinos owed any money to Vanden Berghe.
[29] On June 6, 2023, Riaz Ahmed, Merinos’ counsel, served two additional affidavits on the Applicant: a second affidavit of Mr. Basmaji and an affidavit of Mr. Ahmed.
[30] In his second affidavit, Mr. Basmaji explains Merinos’ non-compliance with the court-ordered timetable. He states that Merinos retained Mr. Ahmed with respect to this Application on August 22, 2022. On May 18, 2023, given that he had not heard from Mr. Ahmed since August 2022, Mr. Basmaji sent an e-mail to Mr. Ahmed asking for an update. Mr. Ahmed responded on June 2, 2023 and stated that he would call Mr. Basmaji shortly to discuss.
[31] Mr. Basmaji describes his subsequent telephone conversation with Mr. Ahmed as follows:
Shortly thereafter, on June 2, 2023, Mr. Ahmed contacted me by telephone to let me know that the application was scheduled for Friday, June 9, 2023. This was the first time I was notified of a hearing date for the application. Mr. Ahmed also told me for the first time that he attended Court in October, 2022 and agreed to a timetable for the hearing of the application without my knowledge.
I was shocked, surprised, and upset to learn that Mr. Ahmed went to Court without telling me and agreed to a timetable for the hearing of the application without advising me or obtaining instructions. Had I known about the application timetable and return date, I would have ensured that Merinos complied with same.
During my telephone discussion with Mr. Ahmed in the late afternoon on June 2, 2023, he advised me that he had reported the matter to his professional liability insurer.
Given our conversation in the late afternoon on Friday, June 2, 2023, I wanted to meet with Mr. Ahmed immediately to prepare materials as Merinos has always intended to respond to this application. As such, I met with Mr. Ahmed on Sunday, June 4, 2023 at which time I instructed Mr. Ahmed to immediately prepare responding materials. At that time, Mr. Ahmed provided me with a copy of the timetable Endorsement dated October 11, 2022 for the first time.
As indicated, Merinos had no knowledge that its rights were in peril or there was non-compliance with any Court ordered timetable until Mr. Ahmed disclosed the existence of a timetable and return date to me in the late afternoon of June 2, 2023.
[32] In his affidavit, Mr. Ahmed acknowledges that he omitted to advise Mr. Basmaji of the attendance at Civil Practice Court on October 11, 2022, and that he did not inform Mr. Basmaji of the existence of Justice Centa’s endorsement until June 2, 2023.
[33] Mr. Ahmed states that, by inadvertence, he did not diarize the timetable deadlines for this Application in his calendar. As a result, he unintentionally failed to meet the December 9, 2022 deadline for the delivery of responding materials.
[34] On December 28, 2022, Mr. Ahmed received an e-mail from the Applicant’s counsel indicating that Merinos had failed to deliver responding materials by the December 9, 2022 deadline. Mr. Ahmed states the following in his affidavit:
I was extremely embarrassed that I missed the deadline to serve responding materials. As a result, I froze, feeling immobilized and depressed by my failure to prepare responding materials. As a result, I did not alert Mr. Basmaji to the existence of the timetable, nor did I advise him that the date to deliver the responding materials had been missed.
[35] Mr. Ahmed did not respond to subsequent communications from the Applicant’s lawyer as he “continued to freeze” and “feeling immobilized” by his failure to deal with the matter.
[36] Mr. Ahmed’s evidence regarding what happened on June 2, 2023 and the subsequent days is consistent with the evidence of Mr. Basmaji on this point.
[37] Merinos served a Factum on the Applicant on June 8, 2023, the day before the hearing.
5. Reply materials filed by the Applicant
[38] Also on June 8, 2023, the Applicant served a reply affidavit of Mr. Huysentruyt in response to Mr. Basmaji’s affidavit sworn on June 5, 2023. Mr. Huysentruyt acknowledges in his affidavit that he made an error in his first affidavit when he stated that 1100 Courtney Park was Merinos’ registered address. However, he denies that 1100 Courtney Park was not a proper business address used by Merinos. He also denies that by delivering the Writ of Summons to 1100 Courtney Park, the Liquidator did not serve Merinos with the Writ of Summons.
[39] Mr. Huysentruyt attaches to his reply affidavit an international credit report from a company that is now called Graydon CreditSafe (“Graydon”), which report was obtained on December 20, 2019 by the bailiff who served the Writ of Summons. Graydon is a company involved in the business of investigations and producing reports concerning corporate data and credit assessments. Graydon’s report listed 1100 Courtney Park as the current address for Merinos at that time.
[40] Mr. Huysentruyt also attaches to his affidavit photographs of 1100 Courtney Park taken by Google in May 2019 and October 2019 (“Google Street View Photographs”). The Google Street View Photographs reveal that a business called “Merinos Rugs” was operating at 1100 Courtney Park at the time the photographs were taken.
[41] In addition, the Applicant relies on the following publicly available records on the Internet, which are attached to Mr. Huysentruyt’s reply affidavit:
a. a search of Google and Google Maps which confirms 1100 Courtney Park as the head office for Merinos;
b. a Yellow Pages search which lists 1100 Courtney Park as the address for Merinos;
c. a Map Quest search which lists 1100 Courtney Park as an address for Merinos; and
d. a Dun & Bradstreet Business Directory Search which lists 1100 Courtney Park as the head office for Merinos and confirms Mr. Basmaji as its key principal.
[42] I note that some of the documents attached to Mr. Huysentruyt’s affidavit indicate that the postal code for 1100 Courtney Park is L5T 1S7 and other documents show the postal code L5T 1L7.
B. DISCUSSION
1. Admissibility of the materials that were served late
[43] Merinos’ responding affidavits and factum were served late, both under the court-ordered timetable and under the timelines set out in Rule 38.09 of the Rules of Civil Procedure.
[44] At the hearing, LawPro counsel sought leave to file the responding materials that were served late. She indicated that Merinos was prepared to proceed on that day if all of its materials were accepted. She also confirmed that Merinos did not take issue with the filing of the Applicant’s reply affidavit.
[45] The Applicant objected to the late-served evidence and argued that both Mr. Ahmed and Mr. Basmaji had been negligent in moving this matter forward. The Applicant stated that accepting the late-served evidence would cause it prejudice as it did not have the opportunity to conduct cross-examinations and it did not want to adjourn the hearing of the Application.
[46] After hearing the parties’ submissions, I held that I would accept and consider Merinos’ affidavit evidence and factum. Civil proceedings should be decided on their merits, and the court’s preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. See H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173 at paras. 25-27. Further, while the Applicant wished to avoid an adjournment, its reply affidavit did not contain any evidence of prejudice should the matter be adjourned.
[47] Even though Merinos was not seeking an adjournment, an adjournment was a possible consequence of admitting the late-served evidence, and it was my view that the weighing of the relevant factors that a judge may consider when exercising the discretion to grant or refuse an adjournment favoured Merinos in the circumstances of this case. See Ariston Realty Corp. v. Elcarim Inc. at para. 34 (Ont. S.C.J.).
[48] After I ruled on the admissibility of Merinos’ evidence, counsel for the Applicant stated that the Applicant still wished to proceed on that day. As a result, the matter was not adjourned and I heard the parties’ submissions on the merits of the Application.
2. General principles applicable to the recognition and enforcement of foreign judgments
[49] The purpose of a proceeding to recognize and enforce a foreign judgment is to allow a pre-existing obligation to be fulfilled; that is, to ensure that a debt already owed by the defendant is paid. Such a proceeding is not based on the original claim the plaintiff pursued against the defendant, but, rather, on the obligation created by the foreign judgment. Barring exceptional concerns, a court’s focus when enforcing a foreign judgment is not on the substantive and procedural law on which the judgment is based, but instead on the obligation created by the judgment itself. Since the purpose of an action for recognition and enforcement is to assist in enforcing an already-adjudicated obligation and not to evaluate the underlying claim that gave rise to the original dispute, the enforcing court’s role is not one of substance, but one of facilitation. See Chevron Corp. v. Yaiguaje, 2015 SCC 42 at paras. 43-44 (“Chevron”).
[50] Canadian courts have adopted a generous and liberal approach to the recognition and enforcement of foreign money judgments: see Chevron at para. 27. All the enforcing court needs is proof that the judgment: (1) was rendered by a court of competent jurisdiction; (2) is final; and (3) is for a definite sum of money: see Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52 at paras. 10-11 (“Pro Swing”). A foreign court will be found to have properly assumed jurisdiction where it had a real and substantial connection with the litigants or with the subject matter of the dispute, or where the traditional bases of jurisdiction were satisfied: see Chevron at para. 27 and Tracy v. Iran (Information and Security), 2017 ONCA 549 at para. 85 (“Tracy”).
[51] Once the three elements set out above have been established, the burden shifts to the objecting party to establish the availability of a defence to the recognition of a foreign judgment: see Tracy at para. 87. The defences available are fraud, public policy and lack of natural justice: see Beals v. Saldanha, 2003 SCC 72 at para. 40 (“Beals”).
[52] The test that applies to a default judgment is the same than the test that applies to a judgment after trial: see Beals at para. 31.
[53] In order to raise the defence of fraud, a defendant has the burden of demonstrating that the facts sought to be raised could not have been discovered by the exercise of due diligence prior to the obtaining of the foreign judgment: see Beals at para. 52.
[54] The defence of lack of natural justice will apply where it is proved, to the civil standard, that the foreign proceedings were contrary to Canadian notions of fundamental justice. The domestic court must be satisfied that minimum standards of fairness have been applied to the defendant by the foreign court. A fair process is one that, in the system from which the judgment originates, reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system. The defence of natural justice is restricted to the form of the foreign procedure, to due process, and does not relate to the merits of the case. Natural justice includes, but is not limited to, the necessity that a defendant be given adequate notice of the claim made against it and that it be granted an opportunity to defend. See Beals at paras. 59-60, 62, 64-65.
[55] The defence of public policy has a narrow application and is not a remedy to be used lightly. It prevents the enforcement of a foreign judgment which is contrary to the Canadian concept of justice. This defence turns on whether the foreign law is contrary to our view of basic morality. For example, it prohibits the enforcement of a foreign judgment that is founded on a law contrary to the fundamental morality of the Canadian legal system or that is rendered by a foreign court proven to be corrupt or biased. This defence does not extend to perceived injustices that do not offend our sense of morality. See Beals at paras. 71-72, 75.
3. Application to this case
[56] I find that the Belgian Court properly assumed jurisdiction and had a real and substantial connection with the subject matter of the dispute. As pointed out by the Applicant, the products were ordered from a Belgian Company, the orders were processed in Belgium, the products were shipped from Belgium, the Invoices were issued in Belgium, and the parties agreed that Belgian law governed the orders and that any contractual disputes would be referred to Belgian Courts.
[57] I also find that the Belgian Judgment is final and for a definite sum of money. It is a final order for the payment of liquidated damages, and has not been appealed or set aside.
[58] Given that the required elements for the recognition of a foreign judgment have been established, the burden shifts to Merinos to demonstrate the availability of a defence to the recognition of a foreign judgment. Since the purpose of a proceeding for the recognition and enforcement of a foreign judgment is not to evaluate the underlying claim that gave rise to the original dispute, the evidence adduced by Merinos regarding the merits of the Liquidator’s claim against it is irrelevant in this Application.
[59] The only arguments raised in Merinos’ factum relate to the defence of lack of natural justice. However, at the hearing, Merinos’ counsel attempted to raise the other two defences, i.e., fraud and public policy. I will first discuss the defence of lack of natural justice.
[60] Merinos argues that it was not served in accordance with the Rules of Civil Procedure and that personal service was not even attempted. It points out that the Writ of Summons was mailed to an incorrect address.
[61] Merinos also submits that it was not given an opportunity to defend the claim because the hearing was scheduled for a time during which travel was not possible due to COVID-19, and was rescheduled to another date without notice to Merinos.
[62] In my view, there is no merit to the argument that the absence of personal service is in itself sufficient to raise the defence of lack of natural justice. As stated above, the defence of lack of natural justice applies where the foreign proceedings were contrary to Canadian notions of fundamental justice and minimum standards of fairness. Canadian notions of fundamental justice and minimum standards of fairness do not require strict compliance with the specific service rules set out in the Ontario Rules of Civil Procedure. Rather, they require that the defendant be given adequate notice of the claim against it and be granted an opportunity to defend: see Beals at para. 65. The giving of adequate notice does not necessarily require personal service.
[63] Merinos relies on the decision of the Supreme Court of British Columbia in Cortés v. Yorkton Securities Inc., 2007 BCSC 282 (“Cortés”), in particular paragraph 71 where the court quotes from a 2005 decision of the Supreme Court of British Columbia which states that: (a) failing to provide personal service to a party to an action is contrary to natural justice, and (b) a foreign judgment will not be enforced in Canada even though the procedure of the foreign court for substitutional service is acceptable in that foreign jurisdiction.
[64] In my view, Merinos’ reliance on paragraph 71 of the decision in Cortés is misplaced for the following reasons:
a. In Cortés, the parties agreed that the defendant did not have actual notice of the foreign action: see Cortés at para. 2. Despite the quote included in paragraph 71, the court’s analysis is not based on the fact that there was no personal service, but, rather, on the fact that the defendant was not given adequate notice of the claim: see Cortés at paras. 72 and 82. The court even states the following at paragraph 81:
Substitutional service is, of course, not in and of itself a breach of natural justice. But the substitutional service, as with any manner of service, must, to use the terminology of the U.S. case law, be reasonably calculated to apprise the defendant of the action and to afford it the opportunity to defend. That was not the case here […].
Thus, it is clear that Cortés does not support Merinos’ position that a failure to effect personal service is in and of itself a breach of natural justice and a sufficient basis to refuse to recognize and enforce a foreign judgment.
b. Subsequent decisions in British Columbia have recognized that “adequate notice” of an originating process does not require personal service: see, e.g., Lonking (China) Machinery Sales Co. Ltd. v. Zhao, 2019 BCSC 1110 at para. 34 and LLS America LLC (Trustee of) v. Stanford, 2019 BCSC 53 at paras. 46-48.
c. Ultimately, the applicable test which binds this Court is the test that was set out by the Supreme Court of Canada in Beals, and it does not require personal service. The Supreme Court of Canada referred to the necessity of giving a defendant adequate notice and an opportunity to defend.
[65] Merinos also relies on paragraphs 131-135 of Cortés in its factum. Merinos’ reliance on these paragraphs is similarly misplaced:
a. As acknowledged by the court in Cortés, the analysis in these paragraphs is based on the reasoning of the minority in Beals, not on the majority’s reasoning.
b. These paragraphs are obiter, as indicated by the heading “Alternative analysis”.
c. These paragraphs address the issue of whether a defendant has to avail itself of remedies in the foreign court in order to impeach a foreign judgment on the ground of breach of natural justice. This argument was not raised in this case.
[66] Merinos has the burden to demonstrate that it was not given adequate notice of the claim made against it and that it was not granted an opportunity to defend. Like the Applicant, I find the affidavit of Mr. Basmaji to be very telling with respect to what Mr. Basmaji does not state in it. Among other things, Mr. Basmaji does not state any of the following:
a. Merinos did not operate out of 1100 Courtney Park at the time the Writ of Summons was delivered;
b. Merinos did not receive the Writ of Summons delivered to 1100 Courtney Park; and
c. Merinos was not aware of the existence of the Belgian Proceeding.
[67] The absence of a clear statement of Mr. Basmaji on these points is in contrast with his clear statement that Merinos never received notice of the November 19, 2020 hearing date.
[68] In the absence of evidence that Merinos did not have notice of the Belgian Proceeding, I cannot find that Merinos was not given adequate notice of the proceeding. This is especially the case in light of the reply evidence filed by the Applicant that strongly suggests that Merinos operated out of 1100 Courtney Park at the relevant time. Further, I note that Merinos failed to respond to correspondence sent to 1611 Courtney Park (the “correct” address) demanding payment under the Belgian Judgment, i.e., the letter from the Applicant’s lawyers dated December 17, 2021. Thus, it appears that after the Belgian Proceeding was commenced, Merinos ignored the Applicant, no matter the address that was used. I also note that the issue of adequate notice and Merinos’ address was not raised until a few days before the hearing of the Application.
[69] The fact that the wrong postal code may have been used for 1100 Courtney Park does not ultimately matter given the Confirmation of Delivery and the absence of evidence that Merinos did not receive the Writ of Summons delivered to 1100 Courtney Park.
[70] The fact that Merinos may not have been given notice of subsequent steps in the Belgian Proceeding, including the rescheduling of the hearing to another date, does not constitute a breach of natural justice. Merinos received adequate notice of the Belgian Proceeding and ignored it. Merinos’ situation is similar to the situation of a defendant noted in default for not defending the proceeding. In Ontario, a defendant who has been noted in default is not entitled to notice of any step in the action and, subject to certain exceptions, need not be served with any document in the action: see Rule 19.02(3) of the Rules of Civil Procedure.
[71] I also reject Merinos’ argument that it was not given an opportunity to defend the claim because the hearing was scheduled for a time during which travel was not possible due to COVID-19. There is no evidence before me that Merinos made any inquiries about attending at the hearing after receiving the Writ of Summons. It may have been possible for Merinos to participate in the hearing by videoconference. Further, and in any event, Merinos did not have to attend the hearing personally and could have retained a lawyer in Belgium. There is no evidence before me that Merinos was unable to retain a Belgian lawyer or made any efforts to do so.
[72] Accordingly, I find that Merinos has not discharged its burden to prove the defence of lack of natural justice. I now turn to the other two defences raised by Merinos for the first time at the hearing.
[73] With respect to the defence of fraud, counsel for Merinos argued that the Belgian Court was misled in a number of ways as a result of some statements in the Writ of Summons. However, Merinos has not adduced evidence that could support the defence of fraud. In particular, Merinos has not demonstrated that the facts sought to be raised in support of the position that the Belgian Court was misled could not have been discovered by the exercise of due diligence prior to the obtaining of the Belgian Judgment: see Beals at para. 52.
[74] As for the defence of public policy, there is absolutely no merit to the argument that this defence could apply in this case. There is no evidence that the Belgian law that was applied in this case is contrary to our view of basic morality. I note that judgments are regularly obtained in Ontario based on unpaid invoices.
[75] In light of the foregoing, I conclude that Merinos has not discharged its burden to establish the availability of a defence to the recognition of the Belgian Judgment.
C. CONCLUSION
[76] The Application is granted.
[77] If costs cannot be agreed upon, the Applicant shall deliver submissions of not more than three pages (double-spaced), excluding the bill of costs, by December 8, 2023. Merinos shall deliver its responding submissions (with the same page limit) by December 22, 2023. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.
Vermette J.
Released: November 28, 2023
[1] I note that Mr. Huysentruyt states in his affidavit that this interest applies “as of the first day after the respective due dates of the Invoices until the date of payment”, but this is not what the Belgian Judgment states.