Wednesday, 28 November 2012

Procedure for Enforcing a Quebec Judgment In Ontario

At first glance, an application seems clearly a better choice than an action for enforcing a foreign judgment, absent any indication of any viable defence to enforcement.  After all, the court will not be considering the merits of the foreign judgment -- those issues are all res judicata – and an application is available where it is unlikely that there will be any material facts in dispute (see Rule 14.05 (3) (h) of the Ontario Rules of Civil Procedure).  Discoveries are not necessary. 

However, the Superior Court of Justice recently dismissed such an application, ruling that a proceeding to enforce a judgment from a non-reciprocating jurisdiction such as Quebec must be brought as an action: see Noelet Associes v. Sincennes [2012] O.J. No. 3742 (P.B. Kane J.).  The case departs from previous decisions that clearly stated that such proceedings may be brought by application:  see for example, Commission de la Construction v. Access Rigging (2010), 104 O.R.(3d) 313 (S.C.J.), Nuvex Ingredients v.Snack Crafters (2005), 74 O.R. (3d) 397 (S.C.).  See also the recent case of Blizzard Entertainment v. Simpson [2012]O.J. No. 3807 (proceeding to enforce a judgment from California, a non-reciprocating jurisdiction, brought by application), and Cross Border Litigation – Interjurisdictional Practice and Procedure, by Kenneth MacDonald, at p. 272. 

            The Court in Noel explained that when one sues to enforce a foreign judgment, in fact one is suing to enforce a debt based on an implied promise to pay the foreign judgment, and that an application is not available to enforce a debt.  As such, Rule 14.02, which states that every proceeding shall be by action, as opposed to an application, unless the rules or a statute provide otherwise, bars the use of an application for enforcement of a foreign judgment. With respect, there is no reason why a proceeding to collect a debt cannot be brought by application, provided it is unlikely that there will be any material facts in dispute.    In Noel, it was abundantly clear that there were no facts in dispute -- no one appeared for the respondent. 

            The Court said its ruling does not apply to judgments from reciprocating jurisdictions because they can be enforced after registration, pursuant to the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, ch. R.5.   However, the Court overlooked the fact that for enforcement of judgments even from reciprocal jurisdictions, a proceeding will be brought if the judgment debtor asserts a defence to enforcement.  Based on the reasoning in Noel, presumably the creditor would have to proceed by action.   That statute, on the other hand, permits a judgment debtor with a defence to enforcement to use an application to set aside registration – see s. 6.

            The take home message from Noel is that even though a proceeding to enforce a foreign judgment may be well suited for an application, a creditor runs the risk of dismissal, and thus an action may be the safer choice.  

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