Court File and Parties
Court File No.: CV-17-569596 Date: 2019/05/02 Ontario Superior Court of Justice
Between: Select Comfort Corporation, Plaintiff
- and - Maher Sign Products Inc., Defendant
Counsel: David A. Ziegler, for the Plaintiffs Mark Adilman, for the Defendant
Heard: In writing
Perell, J.
Reasons for Decision - Supplementary
[1] On April 23, 2019, I released my Reasons for Decision in a summary judgment motion in an action to enforce a foreign judgment. I granted judgment to the Plaintiff, Select Comfort Corporation. [1]
[2] On May 1, 2019, I received a letter from Select Comfort’s counsel, advising me that Select Comfort’s submissions with respect to the Convention on Contracts for International Sale of Goods were mistaken.
[3] On the summary judgment motion, Select Comfort submitted that the agreement in the immediate case was governed by the United Nations Convention on Contracts for International Sale of Goods, which is a part of Ontario law pursuant to the International Sales Conventions Act, R.S.O. 1990, c. I.10. Unless expressly excluded by the parties, the Convention applies to contracts of sale of goods between parties whose places of business are in different states, and the Convention governs the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. Under the Convention, there is a four-year limitation period for claims arising from defects that begins to run from the date on which the goods are delivered to the buyer.
[4] In Select Comfort’s counsel’s letter of May 1, 2019, which was reviewed by counsel for the Defendant Maher Sign Products Inc., I was advised as follows:
Specifically, although we continue to maintain that the UN Convention on the International Sale of Goods (the “CISG”) has the force of law in Ontario, we have now learned that its complementary text, the Limitation Convention, does not. Indeed, the Ontario International Sales Conventions Act provides that the Limitation Convention has “force of law in Ontario on and after the day it enters into force in accordance with Article 44 of the Convention.” In other words, when Canada has ratified the Limitation Convention. We are now aware that Canada has not yet done so.
Given that it is the Limitation Convention, and not the CISG itself, that contains the four-year limitation period which Select Comfort argued applied to the parties’ relationship, Select Comfort would not have advanced the argument in paragraphs 89-91 of Select Comfort’s factum and paragraphs 34-37 of Select Comfort’s reply factum had counsel been aware that it had not yet been ratified. Indeed, we now recognize that this argument is wrong at law. Instead, Select Comfort would have confined its submissions with respect to limitation to those made in paragraphs 88 (and in particular footnote 96 in that paragraph), and 92-101 of the factum.
Although Select Comfort still believes that the overall Decision remains correct, Select Comfort acknowledges, as indicated above, that this error may have an impact on the Decision, and particularly paragraphs 50-52.
We provided a draft of this letter to counsel for Maher Sign Products prior to having it delivered to Your Honour. Counsel for Maher Sign Products wishes to advise Your Honour that the submissions made in its responding factum at paragraphs 3, 16-18, 24(e), 26(f), and 49-51, address the limitations issue.
[5] As noted in counsel’s letter, in my Reasons for Decision, I discussed the matter of the public policy defence to an action to enforce a foreign judgment at paragraphs 50-52 as follows:
The public policy defence precludes the enforcement of a foreign judgment that is contrary to the Canadian concept of justice. To determine whether enforcement of a foreign judgment would be contrary to public policy, the court must consider the historical and factual context of the proceedings that led to the granting of the judgment, and where there are competing public policy imperatives, whether overall, enforcement would be contrary to public policy.
In the immediate case, the only public policy arguments concerned the policies associated with respecting choice of forum clauses and with the alleged circumvention of limitation periods. I have already dealt with the so-called exclusive choice of forum clause in the immediate case and it does not raise a public policy argument.
As for limitation periods, Maher Sign did not rebut Select Comfort’s argument that the agreements in the immediate case are governed by the United Nations Convention on Contracts for International Sale of Goods. Maher Signs action was timely in Minnesota and it would have been timely if brought in Ontario. There was no circumvention of any limitation periods. Thus, Maher Sign’s public policy defence fails at liftoff.
[6] Based on counsel’s letter, it now appears that Maher Sign’s public policy defence based on an alleged circumvention of limitation periods does not fail at liftoff. It, nevertheless, fails in flight, and I see no reason to change the outcome of the summary judgment motion.
[7] In paragraphs 89 to 101, Select Comfort makes two discrete arguments. One argument, which for present purposes, I need not come to any conclusion about is that based on discoverability principles, had Select Comfort brought an action in Ontario, it would not have been statute-barred and, therefore, there was no circumvention of any limitation period by bringing an action in Minnesota.
[8] Select Comfort’s second argument, with which I agree, is that even if the Ontario action had been statute-barred, it would not be against Ontario’s public policy to enforce the judgment that Select Comfort obtained in Minnesota. This second argument is set out in paragraphs 92 to 95 of Select Comfort’s factum, as follows:
Even if it is determined that the CISG would not apply, and that the U.S. Action would have been statute-barred if commenced in Ontario, the commencement of the U.S. Action in the Minnesota District Court was neither fraudulent nor did it offend principles of Canadian public policy.
So long as there was a real and substantial connection to Minnesota, and the action was not statute-barred in Minnesota, that the action would have been statute-barred in Ontario is not determinative.
The case law is clear that where a party’s case has a real and substantial connection with a forum, that party “has a legitimate claim to the advantages that that forum provides.” [3] Indeed, the Supreme Court of Canada has sanctioned the right of a party with a real and substantial connection to a given forum to seize juridical advantages that forum provides. It is entirely permissible for a plaintiff to commence a claim in one jurisdiction where it would be statute-barred in another. [4]
As has already been established, here, there was a real and substantial connection between the state of Minnesota and the subject matter of the Plaintiff’s claim. Accordingly, Plaintiff’s commencement of the U.S. Action was not improper. The Plaintiff also did not have an obligation to inform the Minnesota District Court of a limitations period that was not applicable.
[9] Maher Sign’s counterargument in paragraphs 3, 16-18, 24 (e), 26 (f) and 49-51 of its factum is the fact-based argument that Select Comfort commenced an action in Minnesota more than two years after it had notice of alleged defects in the signs and therefore Select Comfort knew that its action would have been statute-barred under Ontario limitation laws.
[10] Maher Sign’s counterargument may or may not counter the discoverability argument made by Select Comfort, but it does not counter Select Comfort’s second argument that there is no Ontario public policy that precludes the enforcement of the Minnesota judgment.
[11] For these reasons, I see no reason to change the outcome of Select Comfort’s summary judgment motion.
Perell, J. Released: May 2, 2019