Grayson Consulting Inc. v. Lloyd

Ontario Reports Court of Appeal for Ontario

Juriansz, D.M. Brown and L.B. Roberts JJ.A.

February 6, 2019

144 O.R. (3d) 507 | 2019 ONCA 79

Case Summary

Limitations — Foreign judgments — Limitation period for action to enforce foreign judgment starting to run when time to appeal foreign judgment expired — Defendant not appealing foreign judgment — Appeal by several of his co-defendants not postponing running of limitation period vis-à-vis defendant — Plaintiff aware from outset of foreign action that defendant was resident of Ontario but claiming not to have known that defendant had assets in Ontario until more than three years after judgment was granted — Plaintiff not acting with due diligence — Action statute-barred.

The plaintiff obtained default judgment against the defendant and others in South Carolina in August 2014. Some of the defendant's co-defendants appealed, but the defendant did not. The plaintiff commenced an action in Ontario to recognize and enforce the foreign judgment in December 2017. It claimed that it did not know that the defendant had assets in Ontario until October 2017. The plaintiff obtained an ex parte Mareva injunction against the defendant. The motion judge subsequently set aside the Mareva injunction on the basis that the enforcement action was statute-barred. The plaintiff appealed, seeking orders restoring the Mareva injunction and declaring that the action was not statute-barred.

Held, the appeal should be dismissed.

The two-year limitation period under the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B applies to a proceeding on a foreign judgment. The limitation period begins to run, at the earliest, when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision, unless the claim on the foreign judgment was not discovered within the meaning of s. 5 of the Limitations Act until a date later than the appeal decision. Under the United States Federal Rules of Appellate Procedure, the time to appeal the South Carolina judgment expired 30 days after the judgment was entered. The defendant did not appeal the foreign judgment within that period. Rule 54(b) of the Federal Rules of Civil Procedure, which deals with judgment on multiple claims or involving multiple parties, did not alter the appeal period. The appeals by co-defendants did not postpone the running of the limitation period vis-à-vis the defendant. The enforcement action was not commenced within two years after the expiration of the appeal period for the South Carolina judgment.

The motion judge did not err in failing to find that time did not begin to run until the plaintiff had actual knowledge that the defendant had assets in Ontario. The plaintiff was aware from the outset of the South Carolina litigation that the defendant was a resident of Ontario. The motion judge was entitled to find that, once the South Carolina judgment became final, the plaintiff was under an obligation to conduct itself with due diligence with respect to seeking enforcement opportunities against the defendant and that it was already in possession of enough information about the defendant's real and substantial connection to Ontario that it ought to have taken investigatory steps when the South Carolina judgment became final, or shortly thereafter. In the circumstances, when the 30-day period to appeal the South Carolina judgment expired, a proceeding to enforce the judgment in Ontario was an "appropriate means" to remedy the plaintiff's loss. The enforcement action was statute-barred.

Authorities

Cases Applied:

Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44

Other Cases Referred To:

• Aetna Financial Services Ltd. v. Feigelman, [1985] 1 S.C.R. 2
• Allen v. Hay, 64 S.C.R. 76
• General Motors Acceptance Corp. of Canada, Ltd. v. Town and Country Chrysler Ltd., 2007 ONCA 904
• Lind v. Sweden
• Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 76 S. Ct. 895, 100 L. Ed. 1297 (1956)
• White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23

Statutes Referred To:

• Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4, 5

Rules and Regulations Referred To:

• Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 4.1

Proceedings

APPEAL from the order of J.F. Diamond J., [2018] O.J. No. 2081, 2018 ONSC 2020 setting aside a Mareva injunction.

Counsel:

Gregory Sidlofsky, for appellant.

Marc Munro, for respondent.

The judgment of the court was delivered by

D.M. Brown J.A.:

I. Overview

[1] The appellant, Grayson Consulting, Inc. ("Grayson"), obtained an August 20, 2014 default judgment in the amount of US$451,435,577.37 against the respondent, Clifford Lloyd, in the United States District Court for the District of South Carolina (the "SC Default Judgment").

[2] On December 8, 2017, Grayson commenced this Ontario action to recognize and enforce the SC Default Judgment. On December 20, 2017, Grayson secured an ex parte Mareva injunction against Mr. Lloyd.

[3] By order dated April 3, 2018, the motion judge set aside the Mareva injunction, holding that the action to enforce the SC Default Judgment was commenced outside the time period prescribed by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B.

[4] Grayson appeals and seeks orders restoring the Mareva injunction and declaring that its action is not statute-barred.

[5] For the reasons set out below, I would dismiss the appeal. I see no error in the motion judge's conclusion that Grayson's action is statute-barred and, on that basis, the Mareva injunction should be set aside.

II. Jurisdiction

[6] Mr. Lloyd raises a preliminary issue as to whether this appeal more properly lies to the Divisional Court because the order setting aside the Mareva injunction is interlocutory in nature. However, Mr. Lloyd does not press this argument with vigour, noting that the law on this issue is unclear. Given that in the course of setting aside the Mareva injunction the motion judge found that the enforcement action was statute-barred, thereby giving effect to a substantive defence that would end the action, I conclude that this court has the jurisdiction to consider the appeal.

III. The South Carolina Action

[7] In August 2007, the bankruptcy trustee of Derivium Capital, LLC, commenced action No. 07-CV-02992-DCN in the United States District Court for the District of South Carolina (the "District Court"), against Mr. Lloyd and others, alleging that the defendants had defrauded numerous investors in a Ponzi or pyramid investment scheme (the "2992 Action"). The complaint alleged that Derivium had been used as one of the vehicles by which to perpetrate the fraud. At one point, Mr. Lloyd had acted as corporate counsel for Derivium.

[8] The action against Mr. Lloyd and his co-defendants was one of several commenced relating to the failed Derivium investment scheme.

[9] In June 2008, Mr. Lloyd, a resident of Ontario, filed an answer in the 2992 Action. In November 2012, Grayson was substituted as plaintiff for the bankruptcy trustee.

[10] Mr. Lloyd moved to dismiss the action for failure to state a claim against him. By order dated September 9, 2013, the District Court dismissed some of the claims pleaded against Mr. Lloyd, but allowed others to continue. At that point, Mr. Lloyd stopped participating in the proceeding.

[11] A trial was held in two of the Derivium-related actions: the 2992 Action in which Mr. Lloyd and Tsuei Consultants, LLC were two of many defendants, and action No. 07-CV-0593-DCN in which Nigel Wood was a defendant (the "593 Action"). Following the trial, in May 2014 Grayson and other plaintiffs in the 2992 and 593 Actions moved for judgment "as a matter of law" against Mr. Lloyd and two other defendants — Tsuei Consultants and Wood — on the basis that each of the defendants had failed to comply with court orders and appear at the trial. In the alternative, Grayson argued that default judgment should issue against Mr. Lloyd.

[12] That motion was joined with one in a related action, the "Sandifer Action", in which default judgment was sought against Metarizon LLC, a company of which Jonathan Sandifer was the principal.

[13] On August 20, 2014, the District Court released an order dealing with the motions in the three actions. In his order, the District Court judge observed that the Grayson plaintiffs had had ample time to pursue their claims against the "few remaining defendants", including Mr. Lloyd, but their motions did not address all outstanding claims in the 2992, 593 and Sandifer Actions. He stated: "The court interprets plaintiffs' silence as voluntary dismissal and will dismiss any claims not discussed in the three pending motions."

[14] The District Court judge granted (i) default judgment against Mr. Lloyd and Tsuei Consultants in the 2992 Action; (ii) default judgment and entry of judgment against Wood in the 593 Action; and (iii) default judgment against Metarizon in the 593 and Sandifer Actions. As noted, the default judgment granted against Mr. Lloyd was for the amount of US$451,435,577.37. Significantly, the District Court judge also dismissed "any and all remaining claims against all other defendants that have not otherwise been addressed by this order" in the 2992, 593 and Sandifer Actions, save for those against Mr. Sandifer, which had been stayed by reason of his bankruptcy.

[15] No appeal was taken from the SC Default Judgment against Mr. Lloyd. Appeals were taken to the United States Court of Appeals for the Fourth Circuit (the "Appeal Court") against some of the orders made in respect of other defendants in the three actions. I will consider the effect of those appeals on the SC Default Judgment against Mr. Lloyd in more detail later in these reasons.

[16] On March 7, 2016, the Appeal Court rendered judgment on the consolidated appeals in the 2992, 593 and Sandifer Actions. It then issued a March 29, 2016 mandate in the consolidated appeals stating that on that date its March 7 judgment took effect.

IV. The Ontario Enforcement Action

The ex parte Mareva injunction

[17] Alan Grayson, the president of Grayson, deposed that after the mandate was issued he took steps to determine whether Mr. Lloyd had any assets. He contended that it was not until October 2017 that he discovered Mr. Lloyd had assets in Ontario, notwithstanding that Mr. Lloyd had lived in Ontario during the entirety of the South Carolina proceeding.

[18] On December 8, 2017, Grayson commenced this action to recognize and enforce the SC Default Judgment. Dietrich J. granted an ex parte Mareva injunction against Mr. Lloyd on December 20, 2017. On the return of the motion on January 2, 2018, Mr. Lloyd raised the issue that Grayson's claim was statute-barred. Dietrich J. extended the Mareva injunction until the hearing of Mr. Lloyd's motion relating to the limitation period issue.

[19] On January 30, 2018, Mr. Lloyd filed a statement of defence asserting numerous defences to the enforcement action, including that the claim was time-barred.

[20] The motion judge adjourned the motion to permit both parties to file expert evidence on issues relating to the procedures in the District and Appeal Courts.

The experts

[21] Both parties filed evidence from practising South Carolina attorneys. Grayson filed an affidavit from Mr. Joseph C. Wilson IV; Mr. Lloyd filed one from Mr. Brian C. Duffy.

[22] Mr. Wilson and Mr. Duffy did not file signed Form 53 acknowledgements of expert's duty. As the motion judge observed, at para. 22, "[n]either Wilson nor Duffy appear to be impartial, having been previously retained to act at various stages in the SC action and US Court of Appeal proceedings". Mr. Wilson had represented Grayson in the Derivium-related litigation; Mr. Duffy had acted for some of the defendants on the consolidated appeals to the Appeal Court. However, Mr. Duffy did state that his opinion had been prepared for use pursuant to rule 4.1 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, thereby recognizing the duties imposed by the Rules on experts.

[23] The lack of independence of the two attorney experts from the parties or the underlying litigation could well have affected the admissibility of their evidence: White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, at paras. 45 and 47. However, neither Mr. Wilson nor Mr. Duffy was cross-examined on their respective affidavits and neither party contested the admissibility of their evidence below or before this court. The motion judge evidently regarded the evidence as sufficiently reliable for consideration.

The reasons of the motion judge

[24] In setting aside the Mareva injunction, the motion judge held that the action was commenced outside the two-year time period prescribed by the Limitations Act, 2002. He reached that conclusion for two reasons.

[25] First, the motion judge held that it was "legally appropriate for Grayson to commence this proceeding seeking enforcement of the SC judgment after the time to appeal the SC judgment in South Carolina had expired (i.e. 30 days after August 22, 2014)" but the "proceeding was not commenced until over three years after that date": at para. 33.

[26] Second, the motion judge rejected Grayson's submission that the limitation period to enforce the SC Default Judgment did not begin to run until he actually knew Mr. Lloyd had exigible assets in Ontario. The motion judge stated, at para. 37:

[O]nce the SC judgment became final (i.e. 30 days after August 22, 2014), Grayson was under an obligation to conduct itself with due diligence with respect to seeking enforcement opportunities against Lloyd. While this does not mean that Grayson had an obligation to conduct a worldwide search of possible assets, it was already in possession of enough information about Lloyd's real and substantial connection to Ontario that it ought to have taken investigatory steps when the SC judgment became final, or shortly thereafter.

V. Issues on Appeal

[27] Grayson submits the motion judge made two errors in setting aside the Mareva injunction. First, the motion judge incorrectly held that the limitation period for an action to enforce the SC Default Judgment began to run 30 days after the date of its entry, August 22, 2014, instead of from the date of the Appeal Court's March 29, 2016 mandate in the consolidated appeals. Second, the motion judge erred in holding that Grayson ought to have known that Mr. Lloyd had exigible assets in Ontario as at the date of the SC Default Judgment.

VI. First Ground of Appeal: Did the Motion Judge Err in Holding that Time Began to Run 30 Days After the Date of the SC Default Judgment?

A. The governing legal principles

[28] In Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44, this court held, at para. 3, that (i) the basic two-year limitation period in s. 4 of the Limitations Act, 2002 applies to a proceeding on a foreign judgment; and (ii) the limitation period begins to run, at the earliest, when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision, unless the claim on the foreign judgment was not discovered within the meaning of s. 5 of the Limitations Act, 2002 until a date later than the appeal decision.

[29] When the time to appeal a foreign judgment expires is a matter of the law of the foreign jurisdiction. In Ontario, foreign law is treated like a fact, the proof of which generally requires opinion evidence from a properly qualified expert. The appropriate standard of appellate review on questions of foreign law is correctness: General Motors Acceptance Corp. of Canada, Ltd. v. Town & Country Chrysler Ltd., 2007 ONCA 904, at para. 35.

B. Application of the governing legal principles

The expiration of the appeal period under the Federal Rules of Appellate Procedure

[30] In his opinion, Mr. Duffy — the expert proffered by Mr. Lloyd — expressly considered the operation of both the United States Federal Rules of Civil Procedure and Federal Rules of Appellate Procedure. He opined that the SC Default Judgment "was final and appealable on August 20, 2014, and no party appealed that judgment within the thirty-day timeframe".

[31] By contrast, Mr. Wilson, the expert relied upon by Grayson, did not express an opinion based on the Federal Rules of Civil Procedure and Federal Rules of Appellate Procedure on the issue framed by this court in Figliolini — i.e., when did the time to appeal the foreign judgment expire? Mr. Wilson did not opine on when the time for filing a notice of appeal of the SC Default Judgment expired under Rule 4 of the Federal Rules of Appellate Procedure.

[32] Instead, Mr. Wilson sought to re-cast the Figliolini test as an inquiry into when all proceedings in the foreign jurisdiction had "run their course". Although no party appealed the SC Default Judgment against Mr. Lloyd, Mr. Wilson contended that the existence of the consolidated appeals in respect of other defendants in the Derivium litigation meant that all proceedings in the foreign jurisdiction had not run their course until the Appeal Court released its mandate on March 29, 2016. Only then did time begin to run in respect of any action to enforce the SC Default Judgment against Mr. Lloyd.

[33] Mr. Wilson's opinion mischaracterizes the test in Figliolini, which this court set out clearly at paras. 3(b) and 77 of its decision:

The limitation period begins to run, at the earliest, when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision. The time may be longer if the claim was not "discovered" within the meaning of s. 5 of the Limitations Act, 2002, until a date later than the appeal decision.

In the usual case, it will not be legally appropriate to commence a legal proceeding on a foreign judgment in Ontario until the time to appeal the judgment in the foreign jurisdiction has expired or all appeal remedies have been exhausted. The foreign appeal process has the potential to resolve the dispute between the parties. If the judgment is overturned, the debt obligation underlying the judgment creditor's proceeding on the foreign judgment disappears.

[34] At para. 80 of Figliolini, this court noted that "this approach avoids the risk of multiplicity of proceedings by not requiring the judgment creditor to commence a proceeding on a foreign judgment in Ontario before all proceedings in the foreign jurisdiction have run their course". However, the reference to whether proceedings "have run their course" was made in respect of the status of the foreign proceedings as between the foreign judgment creditor and the foreign judgment debtor, not as between the foreign judgment creditor and any other party to the foreign litigation.

[35] In the present case, there was no dispute that neither Grayson nor Mr. Lloyd appealed the SC Default Judgment within the 30-day appeal period available to them under Rule 4 of the Federal Rules of Appellate Procedure. In the ordinary course, time under the Limitations Act, 2002 would have started to run upon the expiration of the 30-day appeal period in accordance with the principles in Figliolini.

The effect of rule 54(b) of the Federal Rules of Civil Procedure on the expiration of the appeal period

[36] However, Grayson submits that the ordinary course application of the Figliolini principles must be modified by taking into account the operation of rule 54(b) of the Federal Rules of Civil Procedure, which states:

Judgment on Multiple Claims or Involving Multiple Parties. When an action presents more than one claim for relief — whether as a claim, counterclaim, crossclaim, or third-party claim — or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.

[37] In their submissions, Grayson and Lloyd advance different interpretations of rule 54(b) and its effect on the running of the appeal period for the SC Default Judgment. However, neither party filed American case law that described the origins and purpose of rule 54(b).

[38] When reviewing a lower court's findings of fact regarding foreign law, this court may not reinterpret the law. However, we can "consider the 'evidence' upon which the expert opinion is based to determine if there is a reasonable relationship between the evidence upon which the opinion is based and the opinion itself": Lind v. Sweden, at para. 36. In so doing, this court may examine for itself the legislation and precedents referred to by the experts: Allen v. Hay, 64 S.C.R. 76, at p. 81 S.C.R.

[39] Applying the approach described in the Lind and Allen cases, when one works through the cases referred to by Mr. Duffy in his expert report, together with the cases they in turn cite, one is led to the seminal decision of the United States Supreme Court in Sears, Roebuck and Co. v. Mackey, 351 U.S. 427, 76 S. Ct. 895 (1956) that explains the origins and purpose of rule 54(b).

[40] Under U.S. federal law a federal court of appeals has jurisdiction over appeals "from all final decisions of the district courts of the United States": 28 U.S.C. 1291. Before the adoption of the Federal Rules of Civil Procedure in 1939, United States federal courts applied the general rule that a judgment on some, but not all, of the claims in an action was not a final decision of the whole case and there was no authority for treating anything less than the whole case as a judicial unit for purposes of appeal: Sears, Roebuck, at pp. 431-32 U.S.

[41] That changed with the enactment of the Federal Rules of Civil Procedure in 1939. As described by the United States Supreme Court in Sears, Roebuck, at p. 432 U.S.:

[T]here came an increased opportunity for the liberal joinder of claims in multiple claims actions. This, in turn, demonstrated a need for relaxing the restrictions upon what should be treated as a judicial unit for purposes of appellate jurisdiction. Sound judicial administration did not require relaxation of the standard of finality in the disposition of the individual adjudicated claims for the purpose of their appealability. It did, however, demonstrate that, at least in multiple claims actions, some final decisions, on less than all of the claims, should be appealable without waiting for a final decision on all of the claims.

[42] To meet this need, rule 54(b) was promulgated in 1939, with amendments subsequently made to it. The purpose of the rule was described in Sears, Roebuck, at pp. 435-37 U.S.:

I[t] does not relax the finality required of each decision, as an individual claim, to render it appealable, but it does provide a practical means of permitting an appeal to be taken from one or more final decisions on individual claims, in multiple claims actions, without waiting for final decisions to be rendered on all the claims in the case. The amended rule does not apply to a single claim action nor to a multiple claims action in which all of the claims have been finally decided. It is limited expressly to multiple claims actions in which "one or more but less than all" of the multiple claims have been finally decided and are found otherwise to be ready for appeal.

To meet the demonstrated need for flexibility, the District Court is used as a "dispatcher". It is permitted to determine, in the first instance, the appropriate time when each "final decision" upon 'one or more but less than all' of the claims in a multiple claims action is ready for appeal. This arrangement already has lent welcome certainty to the appellate procedure. Its "negative effect" has met with uniform approval. The effect so referred to is the rule's specific requirement that for "one or more but less than all" multiple claims to become appealable, the District Court must make both "an express determination that there is no just reason for delay" and "an express direction for the entry of judgment." A party adversely affected by a final decision thus knows that his time for appeal will not run against him until this certification has been made.

The District Court cannot, in the exercise of its discretion, treat as "final" that which is not "final" within the meaning of s. 1291. But the District Court may, by the exercise of its discretion in the interest of sound judicial administration, release for appeal final decisions upon one or more, but less than all, claims in multiple claims actions.

[43] Grayson argues that since appeals by other parties in the three grouped Derivium actions proceeded after the issuance of the SC Default Judgment against Mr. Lloyd and Mr. Lloyd's name was included in the appeals' style of cause, the SC Default Judgment "adjudicate[d] few[er] than all the claims or the rights and liabilities of fewer than all the parties". As a result, according to Grayson, the SC Default Judgment could be "revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities" pursuant to rule 54(b). It follows, Grayson submits, that Mr. Lloyd could have re-opened the SC Default Judgment up until the Appeal Court issued its March 2016 mandate in respect of the consolidated appeals, even though Mr. Lloyd did not participate in the consolidated appeals.

[44] The motion judge rejected Grayson's argument stating, at paras. 29-31:

In my view, Grayson's position is incorrect. Grayson's position — that Lloyd could have moved to re-open the SC action as against him had the result of Grayson's consolidated appeals been of benefit to Lloyd's jurisdiction argument — runs contrary to the holdings in Figliolini. The time for Lloyd to appeal the SC judgment in South Carolina expired 30 days after the date the SC judgment was released. It cannot lie in Grayson's mouth to state that the SC action had yet to run its course because all appeal remedies had yet to be exhausted when neither Grayson nor Lloyd sought any relief against each other within the consolidated appeals.

In the US Court of Appeal caption, Grayson is listed as a "Plaintiff -- Appellant", Vision and Total are listed as "Defendants -- Appellees" (another word for respondent), and Lloyd is listed as a "Defendant". While Lloyd may have been listed as a party to the appeal in the caption, he is not listed as a respondent to Grayson's appeal.

Lloyd never appealed the SC judgment, and Grayson never appealed the SC judgment against Lloyd. As such, no relief against each other was available to either Grayson or Lloyd in the consolidated appeal. The SC judgment against Lloyd could not have been overturned by the US Court of Appeal since its jurisdiction to do so was never engaged by Grayson and/or Lloyd themselves.

[45] I see no error in the motion judge's analysis that warrants appellate intervention. I reach that conclusion for two reasons.

[46] First, the expert evidence filed by Grayson does not support its submission that as Mr. Lloyd could have reopened the SC Default Judgment at any time up until the Appeal Court's mandate, the time to appeal the SC Default Judgment did not expire until the date of the mandate.

[47] Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure requires that a notice of appeal must be filed with the district clerk within 30 days after entry of the judgment or order appealed from. The SC Default Judgment was entered on August 20, 2014. Although Mr. Wilson referred to rule 54(b) in his affidavit, he offered no opinion about the effect of that rule on when the 30-day appeal period under the Federal Rules of Appellate Procedure began to run in respect of the SC Default Judgment. Indeed, his opinion is devoid of any consideration of the jurisprudence surrounding the effect of rule 54(b) on the SC Default Judgment, including the effect on any appeal period for the SC Default Judgment under the Federal Rules of Appellate Procedure in light of appeals taken from other orders in the consolidated actions.

[48] Second, by contrast, Mr. Duffy dealt at some length with the rule 54(b) jurisprudence and its potential application to the South Carolina proceedings. He opined that the direction of entry of a final judgment referred to in the rule was not required in respect of the SC Default Judgment issued against Mr. Lloyd in the 2992 Action because,

[A]s of August 20, 2014, the Clerk and/or District Court had entered final judgments in the form of dismissals, jury verdicts, or default judgments with respect to all of the defendants in the -2992 Case. As of August 20, 2014, the only remaining, pending claims were against Defendant Sandifer, and he was not a party to the -2992 Case.

Consequently . . . the August 20, 2014 Order rendered the August 20, 2014 judgments final -- even though the stayed claims against Sandifer in the other, consolidated matter had not been adjudicated -- because the Order adjudicated all remaining claims in the -2992 Case and the finality of the judgments would not affect Mr. Sandifer's rights in the bankruptcy proceeding. Thus, all of the interests underlying the finality rule and Appellant Grayson's actions, as well as common sense, dictate that the judgments were in fact final and appealable as of August 20, 2014.

[49] This part of Mr. Duffy's opinion finds support in the Appeal Court's March 29, 2016 mandate, which stated that its judgment entered March 7, 2016 (the "March 7 Appeal Judgment") took effect on March 29, 2016. The March 7 Appeal Judgment disclosed that Grayson and other plaintiffs had appealed two rulings of the District Court: (i) its dismissal of claims against Vision International People Group, P.L., for want of jurisdiction; and (ii) its dismissal of claims against Randolph Anderson, Patrick Kelley and Total Eclipse International Ltd. on the basis that they disclosed no cause of action recognized by South Carolina law. Vision International and Total Eclipse had been named as defendants in the 2992 Action and another proceeding. Anderson and Kelley were not defendants in the 2992 Action.

[50] The March 7 Appeal Judgment dismissed both appeals, affirming the District Court's judgments in respect of Vision International, Total Eclipse, Anderson and Kelley. The Mandate subsequently issued by the Appeal Court on March 29, 2016 indicated that it was in respect only of the appellees, Vision International, Total Eclipse, Anderson and Kelley, and stated: "The judgment of this court, entered March 7, 2016, takes effect today."

[51] Significantly, the March 7 Appeal Judgment did not purport to deal with any other judgment issued by the District Court. Specifically, it did not affect the SC Default Judgment. To state the obvious, that is understandable because neither Grayson nor Mr. Lloyd appealed the SC Default Judgment.

[52] Given the state of the record, I see no error in the motion judge's conclusion, at para. 29, that "[i]t cannot lie in Grayson's mouth to state that the SC action had yet to run its course because all appeal remedies had yet to be exhausted when neither Grayson nor Lloyd sought any relief against each other within the consolidated appeals". The District Court's August 20, 2014 order disposed of all remaining claims in the 2992 Action, in part by granting the SC Default Judgment. Under the Federal Rules of Appellate Procedure, the time to appeal the SC Default Judgment expired 30 days after the judgment's entry on August 20, 2014. Grayson failed to demonstrate that rule 54(b) of the Federal Rules of Civil Procedure altered that appeal period. Consequently, the motion judge correctly concluded that "[i]t was therefore legally appropriate for Grayson to commence this proceeding seeking enforcement of the SC judgment after the time to appeal the SC judgment in South Carolina had expired (i.e. 30 days after August 22, 2014)": at para. 33.

[53] Grayson did not commence this enforcement action until December 8, 2017, more than two years after the expiration of the appeal period for the SC Default Judgment. As a result, I see no error in the motion judge setting aside the Mareva injunction on the basis that Grayson had failed to demonstrate a strong prima facie case that it had commenced the action less than two years after the appeal period expired: Aetna Financial Services Ltd. v. Feigelman, [1985] 1 S.C.R. 2, at p. 27 S.C.R.

[54] Accordingly, I would not give effect to this ground of appeal.

VII. Second Ground of Appeal: Did the Motion Judge Err in Failing to Find that Time Did not Begin to Run Until Grayson had Actual Knowledge that Mr. Lloyd had Assets in Ontario?

[55] Grayson submits the motion judge erred in rejecting its argument that the limitation period ought not to commence until such time as it had actual knowledge that Mr. Lloyd had exigible assets within Ontario.

[56] I do not agree. While in Figliolini this court observed, at para. 82, that "[i]n a particular case, a claim based on a foreign judgment may not be discovered under s. 5 of the Limitations Act, 2002 until such time as the judgment creditor knew or ought to have known that the judgment debtor had exigible assets in Ontario and could be served with process", this court went on to emphasize that "[a]s s. 5(1)(b) makes clear, the discoverability assessment, including the appropriateness criterion, must take account of the factual context and the plaintiff's actual circumstances".

[57] Section 5(1) of the Limitations Act, 2002 states that a claim is discovered on the earlier of

(i) the s. 5(1)(a) date — i.e., the day on which the person with the claim first knew that the injury, loss or damage had occurred, was caused by an act or omission of the defendant, and a proceeding would be an appropriate means to seek to remedy it; and

(ii) the s. 5(1)(b) date — i.e., "the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in [s. 5(1)(a)]."

[58] In the present case, the reasons of the motion judge disclose he concluded that the day on which a reasonable person ought to have known of the matters referred to in s. 5(1)(a) was the date of entry of the SC Default Judgment. The motion judge held [at para. 37] that "once the SC judgment became final (i.e. 30 days after August 22, 2014), Grayson was under an obligation to conduct itself with due diligence with respect to seeking enforcement opportunities against Lloyd" and it "was already in possession of enough information about Lloyd's real and substantial connection to Ontario that it ought to have taken investigatory steps when the SC judgment became final, or shortly thereafter".

[59] That conclusion was amply supported by the evidence. The record was clear that throughout the South Carolina litigation, Grayson knew that Mr. Lloyd was a resident of Ontario practising law in Hamilton: at para. 36. In those circumstances, one would expect a reasonable judgment creditor to take prompt steps to enforce a foreign judgment in the jurisdiction where the judgment debtor resides when the time to appeal the foreign judgment expires or, if an appeal is taken, when the appeal is decided. In the circumstances, when the 30-day period to appeal the SC Default Judgment expired, a proceeding to enforce the judgment in Ontario was an "appropriate means" to remedy Grayson's loss. Accordingly, I would not give effect to this ground of appeal.

VIII. Disposition

[60] For the reasons set out above, I would dismiss the appeal.

[61] I would award Mr. Lloyd his costs of the appeal fixed on a partial indemnity basis at $16,000, inclusive of disbursements and applicable taxes.

Appeal dismissed.

Notes

1 Expert report of Mr. Duffy, Exhibit Book, Vol. 2, p. 435.

2 Ibid.

End of Document