About the Enforcement of Treble Damages in Canada

Are Treble Damages Enforceable In Canada?

Treble damages are a form of damages by which the amount of actual damages is calculated and then multiplied by three.  This head of damages is created by statute and is intended to be punitive in nature.  Treble-damages laws are common in many United States jurisdictions.

A seminal Canadian case raised the question of whether such a high award of damages, one that is deliberately out of proportion to the actual harm suffered, can be enforced in Canada.  This was the Supreme Court of Canada’s decision in Beals v. Saldanha, [2003] 3 S.C.R. 416.

Here the Supreme Court dealt with the case of an Ontario family that had received a judgment against them by a Florida court, in a case concerning a piece of land they had sold in Florida to an American buyer.  The plaintiff in that case sought and won treble damages as permitted by a Florida statute; the jury calculated that the plaintiff was owed $70,000 for “the actual expenditures… plus loss of profit,” and then multiplied that by three.

The plaintiff, Beals, then sought to enforce the judgment in Canada.  The defendants, the Saldanha family, claimed that the judgment could not be enforced in Canada, and part of their argument was that the award of treble damages was unenforceable for reasons of public policy: such a high award of damages, they argued,  contrary to Canadian principles of justice and fairness.

Justice Major, for the majority, dismissed the argument that the extra-large award of damages should be unenforceable for reasons of Canadian public policy.  At paras 73-76 of the decision, he wrote that a very large sum of damages is not, in and of itself, immoral or unenforceable, as long as it is arrived at fairly by a court with a real and substantial connection to the case.  The fact that the damages are higher than they would be in Canada does not, in itself, make them unfair or unenforceable:

[76] The award of damages by the Florida jury does not violate our principles of morality. The sums involved, although they have grown large, are not by themselves a basis to refuse enforcement of the foreign judgment in Canada. Even if it could be argued in another case that the arbitrariness of the award can properly fit into a public policy argument, the record here does not provide any basis allowing the Canadian court to re-evaluate the amount of the award. The public policy defence is not meant to bar enforcement of a judgment rendered by a foreign court with a real and substantial connection to the cause of action for the sole reason that the claim in that foreign jurisdiction would not yield comparable damages in Canada.

Justice Binnie dissented from the majority, but for other reasons; in his dissenting opinion, he also agreed that treble damages were not unenforceable as a matter of public policy.  At paras 246-247, he wrote that since the Florida court’s decision was based on a fair trial and a fair application of Florida law, the high damages were not in and of themselves unfair:

[246] If the defence of public policy is understood as a bar to enforcing immoral or unjust foreign laws, it is not met here. The enforcement of such a large award in the absence of a connection either to harm suffered by the plaintiffs and caused by the defendants or to conduct deserving of punishment on the part of the defendants would be contrary to basic Canadian ideas of justice. But there is no evidence that the law of Florida offends these principles. On the contrary, the record indicates that Florida law requires proof of damages in the usual fashion. Treble damages are only available by statute to victims of crimes. There is no indication that punitive damages are available where the defendant’s conduct is not morally blameworthy.

The rule from Beals v. Saldanha, then, is that if a foreign court orders a very high award of damages, one that is much higher than would be awarded in a similar matter in Canada, it is enforceable in Canada as long as the original civil action was fair and done according to the laws of the original jurisdiction.  Even treble damages, which are by definition three times higher than the actual damage caused, are enforceable as long as they are in keeping with the original jurisdiction’s law.

17 replies
  1. John G
    John G says:

    The Uniform Enforcement of Foreign Judgments Act adopted in 2003 by the Uniform Law Conference of Canada (http://www.ulcc.ca/en/us/index.cfm?sec=1&sub=1e5) limits the enforceability of foreign civil judgments that go beyond compensating the plaintiff for his/her/its loss. This provision was intended to allay people’s nervousness at making readily enforceable judgments from the US that are by our standards inflated, either by treble damage statutes or by punitive juries.

    The Act is not in force in Ontario. It has been enacted to date only in Saskatchewan.

    Here is the relevant text:

    Limit of damages

    6. (1) Where the enforcing court, on application by a judgment debtor, determines that a foreign judgment includes an amount added to compensatory damages as punitive or multiple damages or for other non-compensatory purposes, it shall limit enforcement of the damages awarded by the foreign judgment to the amount of similar or comparable damages that could have been awarded in [the enacting province or territory.]

    Excessive damages

    (2) Where the enforcing court, on application by the judgment debtor, determines that a foreign judgment includes an amount of compensatory damages that is excessive in the circumstances, it may limit enforcement of the award, but the amount awarded may not be less than that which the enforcing court could have awarded in the circumstances.

    Costs and Expenses

    (3) In this section, a reference to damages includes the costs and expenses of the civil proceeding in the State of origin.

    Comments: The enforcement in Canada of foreign awards of damages which could include punitive, multiple or excessive compensatory damages that would otherwise be considered enforceable under this Act has raised and continues to raise a number of issues. This situation warrants that under the UEFJA the enforcing Canadian court being expressly empowered to limit the enforcement of damages so awarded that would be in excess of similar damages that could be awarded in similar circumstances had the action been filed in Canada. The defendant would have the onus of establishing that the damages awarded by the foreign court are in excess of awards normally granted in Canada.

    To clarify the rules, a distinction is made in s. 6 between punitive and multiple damages (para. 1) which are not considered compensatory, on the one hand, and excessive compensatory damages (para. 2) on the other, given the principles set forth by the S.C.C. in Hill v. Church of Scientology. In addition, the third paragraph provides that judicial costs and expenses are part of the damages award of which the enforcement could be limited.

    Compare the discussion on ‘public policy’ under s. 4(g) of the Uniform Act.

  2. Gil Zvulony Internet Lawyer
    Gil Zvulony Internet Lawyer says:

    Thanks John,

    Interesting. It might be worthwhile if one wanted to enforce such a judgment in Saskatchewan to initially seek enforcement under the common law in another province and then come to Saskatchewan.

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