About the Enforcement of Foreign Judgments in Canada

A judgment from the United States or another foreign country, as well as Quebec, is not automatically enforceable in Canada. To enforce these judgments, the judgment creditor must start a new lawsuit in Ontario.

Canadian courts now tend to incorporate the “full faith and credit” principle (a principle that is entrenched into the U.S. Constitution). This means that one jurisdiction gives the benefit of the doubt to the laws of another jurisdiction, respecting and enforcing that jurisdiction’s decisions unless there is a very good reason not to do so.  This does not mean that U.S. judgments will automatically be accepted in Ontario, but it means that it is usually likely that they will be.

Relevant Factors

To grant enforcement of any foreign judgment, an Ontario court typically must be satisfied of three things.

First, the court that granted the judgment must have had jurisdiction to try the case, according to its own rules. If the judgment debtor was physically present in the jurisdiction, or actually defended the lawsuit, then the court’s jurisdiction is  automatically assumed.  The defendant is said to have attorned to the jurisdiction of the foreign court. If the judgment debtor was not physically present, then the judgment creditor must prove that there was a “real and substantial connection” that justified the foreign court assuming jurisdiction over the dispute.

Second, the court that granted the judgment must have acted in accordance with due process.  In other words, the court’s legal procedure must have been just and fair.

Third, the original judgment must have been a final judgment. This does not mean a judgment that cannot be appealed, but a judgment that the originating court itself cannot change.

The Role of Canadian Law

A Canadian court will not usually be concerned with whether the foreign judgment would have been granted under Canadian law; the judgment debtor cannot argue that the judgment should not be enforced because he/she would not be liable in Canada. The question is merely whether the original court acted fairly and in accordance with basic principles of justice, and whether the court had jurisdiction to pass judgment on the judgment debtor.

Possible Defences to the Enforcement of a Foreign Judgment in Canada

Some common defences against the enforcement of a foreign judgment are:

1. The original judgment was obtained fraudulently.
2. The judgment was contrary to natural justice (the original trial was not fair, or did not give the judgment debtor a proper opportunity to make his or her case).
3. It would be against Ontario public policy to grant the judgment (for example, the original judgment must not be based on laws that conflict strongly with the underlying morality of Canadian law; this does not normally apply to U.S. judgments, since the Canadian and American legal systems are similar).
4. The judgment debtor was not given notice of the original proceedings and therefore did not have the opportunity to appear in court and defend himself or herself.
5. The judgment is for the enforcement of a foreign penal law.

Procedural Steps For Enforcing a U.S. and Foreign Judgment in Ontario, Canada

Typically, a judgment creditor does not have to go to the time and expense of trying the whole case over again.  The issues in the Ontario enforcement action are related to the manner that the foreign judgment was obtained rather than the underlying merits of the original foreign action.  As such, an action for the enforcement of a foreign judgment is analogous to the enforcement of a simple debt.   Actions for the enforcement of most foreign judgments usually proceed by way of a summary judgment motion, which asks the court to declare that there is no genuine issue for trial and rule in the judgment creditor’s favour.  Interest and the legal costs of the Ontario enforcement action are usually awarded in the new Ontario judgment.

Once the Ontario court finds in the judgment creditor’s favour, then the judgment creditor has a valid Ontario judgment, and can then proceed to enforce it the way he or she would enforce any Ontario judgment.

Enforcing a U.K. Judgment or Extra-provincial Judgment in Ontario

Ontario courts will recognize and respect the judgments of courts in other provinces (except Quebec judgments, which are treated as a foreign judgment) as well as U.K. courts, and enforce them in Ontario where appropriate.

Factors

The test for registering a U.K. or extra-provincial (except Quebec) judgment in an Ontario court is:

• You must show that the judgment was in the judgment creditor’s favour and that he or she is entitled to enforce it.
• You must show that the original judgment is final and the court cannot rescind it. (If the judgment was final in the originating court, but is now being appealed, an Ontario court will usually wait until the appeal process is over before enforcing the judgment.)

Exceptions

Enforcing a U.K. or extra-provincial judgment does not require a separate action, so there is no “defence” per se to be made. However, there are some cases where the court might still refuse to enforce the judgment based on the facts. A U.K. judgment will not be enforced in Ontario where the court has reason to believe that:

1. The original judgment was obtained fraudulently.
2. The judgment was contrary to natural justice.
3. It would be against Ontario public policy to grant the judgment
4. The judgment debtor was not given notice of the original proceedings and therefore did not have the opportunity to appear in court and defend himself or herself.
   If the judgment was arrived at fairly, it will not be set aside because the original court made errors of fact or law; it is not up to the Canadian court to decide whether the original judgment was right, merely that it was arrived at by a fair process.

Procedure for Enforcement

A successful U.K. or extra-provincial judgment creditor must bring an application in Ontario for registration of the original judgment. This must be done no later than six years after the original judgment was handed down (if there was an appeal, then the limitation period is six years after the appeal judgment).

The judgment creditor must also submit an affidavit that sets out all the facts necessary to demonstrate that he or she qualifies to register the judgment, as well as a copy of the original judgment from the U.K. or extra-provincial court.

Once this material has been submitted to the court, registration will be granted as long as the above stated factors are fulfilled.

Once the judgment has been registered, it can be enforced in Ontario as if it had been directly granted by an Ontario court.