CITATION: CIMA Plastics Corporation v. Sandid Enterprises Ltd., 2011 ONCA 589
DATE: 20110914
DOCKET: C53330
COURT OF APPEAL FOR ONTARIO
Gillese, Armstrong and Karakatsanis JJ.A.
BETWEEN
CIMA Plastics Corporation
Plaintiff (Respondent)
and
Sandid Enterprises Ltd.
Defendant (Appellant)
Counsel: J.D. Skinner, for the Defendant (Appellant) Laurie L. Aitchison, for the Plaintiff (Respondent)
Heard: August 24, 2011
On appeal from the judgment of Justice Hugh K. O’Connell of the Superior Court of Justice dated January 20, 2011.
ENDORSEMENT
[1] The appellant appeals from the order granting the respondent’s motion for summary judgment to enforce an Illinois default judgment in the amount of $88,995.97 US plus prejudgment interest plus costs of $5000.
[2] The appellant Sandid is an Ontario company that contracted with an Illinois company Pro Tech to act as its sales agent and sell Pro Tech’s goods to Ontario customers in Canada. Sandid obtained a judgment against Pro Tech in Ontario for unpaid sales commissions. It then commenced garnishment proceedings against Pro Tech’s Ontario customer who owed Pro Tech money.
[3] The respondent Cemi Plastics, another Illinois company, purchased Pro Tech’s accounts receivable before Sandid obtained the judgment against Pro Tech. Cemi brought an action against Sandid in Illinois, claiming that it gave notice to Sandid that the money it sought to garnish from the Ontario creditor was owed to it and not Pro Tech. While Sandid initially sought to challenge the jurisdiction of the Illinois court, the Illinois judge advised that it was required to enter an appearance in order to argue a lack of jurisdiction. Sandid chose not to do so.
[4] Cemi obtained default judgment against Sandid for tortious interference with an existing business agreement and abuse of process. Ultimately, the creditor paid the money to Cemi and the Illinois judgment against Sandid was reduced to reflect only Cemi’s legal fees and finance charges. Cemi brought an action to enforce the Illinois judgment in Ontario.
[5] Cemi then moved for summary judgment. The motion judge granted judgment, finding that there was a real and substantial connection between Illinois and the claim, and Illinois and the defendant.
[6] The appellant submits on appeal:
There was no evidence to prove the foreign judgement.
The motion judge erred in granting judgment to enforce the Illinois judgment as there was no real and substantial connection between Illinois and the appellant or between Illinois and the causes of action in the claim.
The motion judge erred because it was contrary to public policy to recognize the Illinois judgment.
Proof of the foreign judgment
[7] We do not accept the appellant’s submission that there was insufficient evidence to prove the Illinois judgment before the motion judge. The affidavit evidence and the attached exhibits provided evidence to support the motion judge’s finding. In any event, this challenge was not raised below and was not seriously pursued in oral argument.
Real and Substantial Connection
[8] It is common ground that in order to enforce a foreign judgment, the Canadian court must be satisfied that the foreign court assumed jurisdiction on the same basis as a domestic court. The “real and substantial connection” test applies to the enforcement and recognition of foreign judgments: see Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416, at paras 28- 29.
[9] In Van Breda v. Village Resorts Ltd. (2010), 2010 ONCA 84, 98 O.R. (3d) 721 (C.A.), leave to appeal to S.C.C. granted, [2010] S.C.C.A. No. 174; [2010] S.C.C.A. No. 114, heard and reserved March 21, 2011 this court held at para. 84 that “[t]he core of the real and substantial connection test is the connection that the plaintiff’s claim has to the forum and the connection of the defendant to the forum, respectively.”
[10] The appellant submits that the summary motion judge erred in finding a real and substantial connection between Illinois and the causes of action in the claim and between Illinois and Sandid. In particular, the appellant submits that the judge erred in: relying upon the reasons of the foreign judge as to jurisdiction; failing to consider the specific causes of action in the Illinois claim; and refusing to consider the underlying Ontario litigation and garnishment proceedings.
[11] In assessing the real and substantial connection test, the motion judge turned first to what he understood to be the Illinois judge’s reasons for determining that Illinois had jurisdiction to issue default judgment. It appears that the Illinois judge sought submissions on jurisdiction before granting default judgment. However, it is common ground that the Illinois judge gave no reasons for his decision. The motion judge appears to have been referring to counsel’s submissions in support of the motion.
[12] The motion judge correctly noted that he was not bound by the Illinois judge’s determination of jurisdiction. However, the motion judge ultimately adopted a number of the ‘statements’ he attributed to the Illinois judge in finding that a real and substantial connection with Illinois had been established. To that extent, given the absence of reasons by the Illinois judge, the motion judge erred in considering the Illinois judge’s “reasons” as findings relating to jurisdiction.
[13] The motion judge acknowledged that Sandid had no connection with Illinois other than acting as a sales representative in Ontario, for Pro Tech, an Illinois company for six years. In finding a real and substantial connection, the motion judge relied upon the fact that the originating contract between Sandid and Pro Tech involved an Illinois company and a Canadian/American agreement. The motion judge found that the appellant’s action in Ontario and the garnishment were irrelevant to the issue of whether there was a real and substantial connection between the Illinois and the action brought in Illinois.
[14] While the motion judge correctly articulated the law, he did not specifically consider the nature of the causes of action in the Illinois claim. In our view, the motion judge erred in finding that the appellant’s Ontario action and garnishment were irrelevant to the issue of whether there was a real and substantial connection between Illinois and the claim for tortious interference with an existing business agreement and for abuse of process. The garnishment in Ontario formed the basis of the causes of action in the Illinois action.
[15] Nonetheless, given the undisputed evidence on the record relating to the nature of the Illinois claim and the Ontario garnishment proceedings, there was a real and substantial connection between Illinois and the Illinois claim. The litigation was brought by an Illinois company seeking redress for interference with the payment of an account receivable purchased from another Illinois company; the account receivable arose from the business carried on at least in part in Illinois; and the damages were suffered in Illinois. The principles of fairness, comity and enforceability all support the real and substantial connection between the forum and the claim.
[16] As a result, we are satisfied that there was no genuine issue requiring trial. On the record before him, the summary motion judge was correct in his conclusion that there was a real and substantial connection between the foreign jurisdiction and the action before it.
[17] We acknowledge that the connection between Illinois and the defendant is not strong. It is clear that Sandid had no business relationship with Cemi. Cemi simply purchased the accounts receivable from Pro Tech. Furthermore, the conduct of the defendant in issue, Sandid’s pursuit of garnishment proceedings in Ontario, occurred entirely outside Illinois. The connections relied upon by the motion judge all related to Sandid’s connection to Illinois in the underlying business relationship with Pro Tech that gave rise to the Ontario judgment against Pro Tech and the ensuing garnishment of its former creditor. Even in the underlying relationship, it is clear that Sandid never went to Illinois, he acted as sales representative for Pro Tech in Ontario for Ontario customers.
[18] However, given the real and substantial connection between Illinois and the plaintiff’s claim, the fact that the connection between Illinois and the Ontario defendant is not strong is not determinative. As noted by the Supreme Court of Canada in Beals, at para. 23, “[a] substantial connection with the subject matter of the action will satisfy the real and substantial connection test even in the absence of such a connection with the defendant to the action.”
Public policy defence
[19] The appellant submits that it was contrary to public policy to enforce a foreign judgment against an Ontario defendant for its conduct in enforcing a judgment issued by an Ontario Court. The Illinois claim was premised upon the fact that Sandid proceeded with the garnishment after it was given notice of Cemi’s right to the money. In other words, the appellant’s argument that the Illinois judgment is unfair is essentially a challenge to the merits of the plaintiff’s claim in the foreign judgment.
[20] We agree with the motion judge that there was no basis on this record to support a claim that the judgment was contrary to the ‘Canadian concept of justice’ or to our ‘basic view of morality’.
Disposition
[21] Accordingly, we are satisfied that there was no genuine issue requiring a trial on the question of whether there was a real and substantial connection with the foreign jurisdiction. The motion judge was therefore entitled to recognize the foreign judgment and issue judgement.
[22] The appeal is dismissed with costs to the respondent in the agreed amount of $6500, all inclusive.
“E.E. Gillese J.A.”
“Robert Armstrong J.A.”
“Karakatsanis J.A.”