Court File and Parties

COURT FILE NO.: CV-19-633108

DATE: 20210412

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: H.M.B. Holdings Limited Plaintiff

AND:

The Attorney General of Antigua and Barbuda Defendant

BEFORE: Pollak J.

COUNSEL: Lincoln Caylor & Nina Butz, for the Plaintiff/Moving Party

Steve J. Tenai & Sanj Sood, for the Defendant/Responding Party

HEARD: December 8, 2020

ENDORSEMENT

[1] In this action, H.M.B. Holdings Limited (“HMB”) seeks an order pursuant to the common law to recognize and enforce a money judgment obtained in B.C. against the Attorney General of Antigua and Barbuda (the “AG”). It submits that Canadian provinces prima facie recognize judgments from other provinces, and that the AG seeks to challenge recognition by collaterally attacking B.C.’s statutes and laws. The AG counters that HMB is not entitled to ask to recognize a "ricochet" judgment in Ontario and seek dismissal of the Action. HMB relies on the common law which expressly allows for the recognition of judgments from courts of competent jurisdiction.

[2] In 2014, HMB was granted judgment against the AG by the Judicial Committee of the Privy Council. Partial payment has been made on this Judgment, with approximately CAD$25 million remaining outstanding.

[3] In 2017 (within the applicable ten-year limitation period in B.C.), HMB was granted default judgment against the AG recognizing the judgment in B.C. (the “Judgment”) for the amount of approximately CAD$30 million. The AG did not contest or appear in the default judgment proceeding in B.C.

[4] This is a motion for summary judgment in favour of HMB against the AG. The issues to be decided on this motion are whether the B.C. default Judgment should be recognized and enforced in Ontario.

[5] I agree with the parties that this is a summary judgment motion. I find that on the basis of the record, there is no genuine issue requiring a trial. I have considered and find that the requirements for summary judgment that are set out by our Supreme Court in the case of Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C. 7 and most recently by our Court of Appeal in Royal Bank of Canada v. 1643937 Ontario Inc. 2021 ONCA 98, have been met.

[6] The AG argues that this motion is an attempt by the HMB to avoid seeking recognition and enforcement of the Privy Council Judgment in Ontario directly, by seeking to recognize and enforce the derivative B.C. Enforcement Judgment. Such would deny the AG the substantive limitation period defence it has under Ontario law (which it did not have under B.C. law) to a debt obligation arising from the Privy Council Judgment.

[7] This Action was commenced on May 6, 2019, five years after the Privy Council Judgment.

[8] In 2019, HMB commenced this action in Ontario within two years of the BC Judgment, but after two years from the Privy Council Judgment.

[9] The AG submits that the B.C. Enforcement Judgment should not to be recognized and enforced in Ontario because:

a. B.C. did not have a real and substantial connection to the parties or subject matter to give rise to competent jurisdiction for purposes enforcement outside of B.C.; and

b. It is an abuse of process and hence contrary to public policy to seek to enforce an enforcement judgment (the B.C. Enforcement Judgment) rather than the original judgment (the Privy Council Judgment) to circumvent an available defence to the original judgment under Ontario law that did not exist under the laws of the enforcing jurisdiction (B.C.).

[10] The AG’s substantive limitations defence to the enforcement of the Privy Council Judgment in Ontario could not have been advanced in BCSC as that court’s jurisdiction was limited to considering enforcement within B.C. and not outside of its boundaries.

[11] In its statement of defence, the AG argues that there is no real and substantial connection between B.C. and the underlying dispute because jurisdiction was taken pursuant to statute and not the common law real and substantial connection test. However, HMB submits that provincial statutory provisions like those in the Court Jurisdiction and Proceedings Transfer Act, 2003 (2^nd Sess), c. 2, s.1 (CJPTA.), upon which the HMB relies, establish jurisdiction for the purposes of recognition and enforcement in accordance with Canada's conflicts of laws rules. While Canada's common law standard for establishing jurisdiction is the real and substantial connection test (or one of the traditional bases of jurisdiction), the Uniform Law Conference of Canada took a different approach in drafting the CJPTA in the 1990s, which has been passed, with a few variations, in B.C., Nova Scotia, Prince Edward Island, Saskatchewan and the Yukon.

[12] The Supreme Court of Canada has held in the case of Chevron v Yaiguaje, 2015 SCC 42, 2015 S.C.C. 42, "legislatures and courts may adopt various solutions to meet the constitutional requirements and the objectives of efficiency and fairness that underlie our private international law system".

[13] B.C. has enacted the CJPTA that departs from the common law and is valid as long as it is within constitutional limits. In the Chevron case, the Supreme Court acknowledged that the approach under the CJPTA differs from the common law approach applied in Ontario, but that the CJPTA did not violate Canadian conflict of laws rules. It is argued the question is not whether Ontario has the same law as B.C., but whether the B.C. statute is within constitutional limits, which according to Chevron is the case here.

[14] It is submitted that in this Action, the BC Court properly assumed jurisdiction pursuant to the CJPTA. The AG was noted in default, and a default money judgment was granted in the amount of CAD$28,765,975.41 representing the principal amount outstanding, plus CAD$1,475,337.19 representing interest on the principal amount outstanding, for a total of CAD$30,241,312.60 (the BC Judgment).

[15] The BC Court properly assumed jurisdiction over the BC Action pursuant to sections 3 and 10(k) of the CJPTA. Section 3 provides that a B.C. court has territorial competence in a proceeding only if there is a real and substantial connection between B.C. and the facts on which the proceeding is based.

[16] HMB asserts that the statutory presumption, set out in Section 10(k) of the CJPTA, satisfies the “real and substantial connection” requirement at common law for purposes of recognition and enforcement of the B.C. Enforcement Judgment in Ontario. This proposition is at the heart of this dispute.

[17] It is submitted by the AG that at common law, however, a judgment issued by a court in one province is not immediately enforceable by a court in another province. The court which has issued the judgment must have appropriately exercised its common law jurisdiction.

[18] The AG submits that HMB’s argument confuses jurisdiction for local purposes with the required common law jurisdiction for purposes of enforcing a judgment outside of B.C. (enforcement with B.C.).

[19] In the Chevron case, the Supreme Court of Canada held that in actions to recognize and enforce foreign judgments within the limits of the province it is the act of service in accordance with local rules that grants the enforcing court its jurisdiction.

Enforcement is limited to measures – like seizure, garnishment, or execution – that can be taken only within the confines of the jurisdiction, and in accordance with its rules… The recognition and enforcement of a judgment therefore has a limited impact: as Walker states, “[a]n order enforcing a foreign judgment applies only to local assets”… The enforcing court’s judgment has no coercive force outside its jurisdiction (emphasis added).

[20] The AG submits that the local jurisdiction presumed by the CJPTA did not grant the BCSC jurisdiction for purposes of allowing for the enforcement of the B.C. Enforcement Judgment extra-provincially.

[21] In CIMA Plastics Corp. v. Sandid Enterprises Ltd., 2011 ONCA 589, the Court of Appeal for Ontario considered whether a summary judgment motion enforcing an Illinois order was properly decided. The issue was whether the Illinois court had properly assumed jurisdiction. The Court of Appeal held that our court is not bound by the Illinois judge’s determination of jurisdiction,” and that the issue was to be determined with reference to the Canadian “real and substantial connection test.”

[22] I agree that these principles apply to this matter.

[23] I therefore conclude that the fact that the provisions of the CJPTA provide a rebuttable presumption of a real and substantial connection between B.C. courts and a proceeding to enforce a foreign judgment for purposes of local enforcement, does not alleviate the requirement to establish that there was a real and substantial connection in accordance with the common law standard established by the Supreme Court of Canada in Chevron.

[24] On the basis of the record, it is not disputed that AG did not submit to the jurisdiction of the B.C. Court and there is no evidence to establish a real and substantial connection for the B.C. court to have appropriate authority to enforce the B.C. Enforcement Judgement outside of that province. I agree that on this basis, the Action should be dismissed.

[25] The AG further relies on Canadian Conflict of Laws, 6^th Ed., Professor Janet Walker who has written:

“There is no expectation that a Canadian court will recognize and enforce another court’s determination of enforceability. It is a determination that must be made by each court in accordance with its own law. This precludes the enforcement of enforcement orders, sometimes described as “ricochet judgments,” whereby the enforceability of the judgment is measured not by the original judgment but by the initial enforcement judgment.” (emphasis added)

[26] There is no jurisprudence where a Canadian court has been asked to recognize and enforce another enforcement judgment instead of seeking to enforce the original judgment giving rise to the debt obligation.

[27] To summarize, our Supreme Court of Canada in the Chevron case has held that enforcement decisions are intended to apply only within the local jurisdiction. Further, as there was no real and substantial connection between the AG and B.C. this Action must dismissed.

[28] The AG also refers to Professors Pitel and Rafferty in Conflicts of Law as follows:

The enforcing court does not examine whether the foreign courts properly followed the foreign country’s rules of taking jurisdiction. It also does not examine whether the taking of jurisdiction by the foreign court was done in a way that would comply with its own rules for taking jurisdiction. Rather than use either of these approaches, the common law has developed a separate and special test to evaluate the foreign court’s taking of jurisdiction. Prior to Morguard, to satisfy this test the foreign court had to have taken jurisdiction in one of two ways based on the defendant’s presence in the foreign country at the start of the litigation or based on the defendant’s submission to the foreign country’s jurisdiction. In Morguard, a groundbreaking decision by the Supreme Court of Canada, the court created an additional permissible basis. If there was a real and substantial connection between the dispute and the foreign forum, then this test of jurisdictional competence would be satisfied. There are therefore three ways to meet this part of the test. Presence, submission, or a real and substantial connection. If the foreign court has taken jurisdiction on some other basis, its decision will not be enforced.

[29] As I find that the requirements for this Court to grant summary judgment have been met, I can arrive at a fair and equitable decision on the basis of the factual record in this case. For the above noted reasons, I dismiss this Action.

Costs

[30] As the AG is the successful party on this motion for summary judgement dismissing the action against the AG, it is entitled to be awarded its costs on a partial indemnity basis. The moving party Plaintiff had requested costs of $96,483.53 on a partial indemnity basis if it were to be the successful party on this motion. After hearing submissions on costs, I find that the request of the Defendant AG to be awarded costs on a partial indemnity basis in the amount of $33,000 are just and reasonable in the circumstances as dictated by the rules and required by our jurisprudence and in particular in the Boucher case. As a result, this action is dismissed with costs of $33,000 on a partial indemnity basis inclusive of all costs and disbursements awarded to the Defendant.

Pollak J.

Date: April 12, 2021