COURT OF APPEAL FOR ONTARIO

CITATION: Sincies Chiementin S.p.A. v. King, 2012 ONCA 653

DATE: 20121001

DOCKET: C53076

MacPherson, Armstrong and Blair JJ.A.

BETWEEN

Mario Venezia in his capacity as trustee in bankruptcy of Sincies Chiementin S.p.A.

Plaintiff (Respondent)

and

Gregory P. King

Defendant (Appellant)

Sean Dewart and Tim Gleason, for the appellant

Randy Pepper, for the respondent

Heard: September 24, 2012

On appeal from the judgment of Justice W. Larry Whalen of the Superior Court of Justice, dated November 30, 2010.

By the Court:

[1] The appellant, Gregory King, a Toronto lawyer who specializes in international business law, appeals the judgment of Whalen J. of the Superior Court of Justice dated November 20, 2010, granting summary judgment to recognize and enforce a judgment of the Civil Court of Rome dated August 25, 2001.

[2] The Italian court held that King was liable to the Italian corporation Sincies, essentially in tort, for $600,000 in damages plus costs, for his professional conduct as a lawyer in a failed joint venture.

[3] In a comprehensive judgment (208 paragraphs), the motion judge held that there was a real and substantial connection between the subject matter of the action and the Italian court, even though King did not attorn to its jurisdiction, and that the decision of the Italian court deserved to be recognized and enforced.

[4] In reaching this decision, the motion judge relied heavily on the decisions of the Supreme Court of Canada in Beals v. Saldanha, [2003] S.C.R. 416, and this court in Muscutt v. Courcelles (2002), 2002 CanLII 49497 (ON SC), 60 O.R. (3d) 641, and Charron Estate v. Village Resorts Ltd., 2010 ONCA 84.

[5] This appeal was originally scheduled to be heard on May 30, 2011, but was adjourned pending the decision of the Supreme Court of Canada in Charron Estate and a companion case. The Supreme Court of Canada rendered its decision on April 18, 2012 under the style Club Resorts Ltd. v. Van Breda, 2012 SCC 17.

[6] The appellant’s principal submission is that the motion judge erred by finding that there was a ‘real and substantial connection’ between King’s alleged misconduct and Italy.

[7] We agree that the motion judge’s analysis was anchored in this court’s decisions in Muscutt and Charron Estate and that he did not have the benefit of the Supreme Court of Canada’s decision in Van Breda. However, as the appellant acknowledges in his factum, Van Breda “simplified and clarified the law”. Although parts of the eight-pronged test from Muscutt were jettisoned, there is really very little difference between this court’s analysis in Charron Estate and the Supreme Court of Canada’s decision in Van Breda with respect to the core factors to be considered.

[8] In Van Breda, Lebel J. fashioned a list of four specific connecting factors that lead to a presumption that a court has jurisdiction. The third factor is that a tort was committed in the court’s territorial jurisdiction.

[9] In this case, the Civil Court of Rome carefully considered, on its own accord because King did not attorn to the jurisdiction, the question of whether a tort had been committed in Italy. The court concluded that, with regard to “extra-contractual action” (i.e. the tort claim), the tort was committed, and damage resulted, in Italy.

[10] In our view, a Canadian court should be very cautious in its scrutiny of the decision of a foreign court in determining whether a tort has been committed in its jurisdiction. In short, the Civil Court of Rome is better placed than us to determine its own laws.

[11] Once it is determined that a tort has been committed in the foreign jurisdiction, it brings the case within the third connecting factor from Van Breda, and a real and substantial connection is presumptively established.

[12] Here, the motion judge properly concluded that since there was a real and substantial connection between the subject matter of the action and the Italian court, the Italian judgment should be recognized and enforced in Ontario. Under Beals, at paras. 28-29, the principles of comity and reciprocity inform a Canadian judge’s determination of whether a foreign judgment should be enforced. The motion judge, at para. 189, was keenly aware of this:

Were the situation reversed, so that Sincies was a Canadian corporation with head offices in Ontario and all of the other facts discussed applying, and King as an Italian lawyer who assumed the same role he had in fact assumed in our case, I have no doubt that an Ontario court would have readily assumed jurisdiction… I see no reason why principles of comity and reciprocity should not be recognized in the circumstances of this particular case and foreign judgment.

[13] Further, the motion judge was cognizant of the principles of order and fairness that underlie the modern concept of private international law, and concluded, at para. 186:

It is not unfair that a professional who operates on a worldwide basis should be subject to foreign jurisdictions. [King] voluntarily entered into a solicitor/client relationship with a company he knew to be based in Italy, to whom he expected to give advice and from which he knew he would receive instructions, whatever dealings and transactions might occur as a result and wherever they might occur.

We agree with this analysis. The appellant knew that his advice would be received and acted on in Italy, as the evidence indicates it was. He is a sophisticated party who should have expected to be called to account in Italy.

[14] The appellant also contends that the motion judge erred in concluding that there was no denial of natural justice in the manner in which the Italian court proceedings unfolded. The basis for this submission appears to be that the appellant was not put on notice that criminal allegations of fraud were being made against him. He alleges that, because in Canada fraud has to be pleaded specifically, the failure to do so specifically in Italy was a denial of natural justice.

[15] We do not accept this submission. In our view, the motion judge was correct to conclude that the respondent’s actions did not deny the appellant the opportunity to participate in the Italian litigation had he wished to do so. While the word ‘fraud’ was not used in the writ, the material facts going to the appellant’s alleged conduct were clear in the writ. Further, the correspondence from King to the Italian Trustee in Bankruptcy that the appellant contends ought to have been submitted to the Italian court by the respondent contains the appellant’s response to the fraud allegations, demonstrating full well that he knew what allegations he was facing. The reality is that the Italian court proceeding was not an ex parte hearing; it proceeded as a default proceeding only because the appellant did not choose to appear in his own defence.

[16] Finally, the appellant submits that the motion judge erred in concluding that there was no fraud perpetrated by the respondent (by failing to disclose relevant information) on the Italian court.

[17] We do not accept this submission. After a careful and extended analysis, the motion judge concluded that “the Trustee and Giardina [the Trustee’s counsel] did not mislead the court. Nor can I conclude that either of the Trustee or Giardina abused their positions as officers of the court.” We agree with this conclusion.

[18] The appeal is dismissed. The respondent is entitled to its costs of the appeal fixed at $20,000, inclusive of disbursements and applicable taxes.

Released: October 1, 2012 (“J.C.M.”)

“J.C. MacPherson J.A.”

“Robert P. Armstrong J.A.”

“R.A. Blair J.A.”