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The Ontario Court of Appeal has at
last made clear that a two year limitation period applies to proceedings for
recognition and enforcement of foreign judgments. Strathy C.J.O., writing for a unanimous
court in Independence Plaza 1 Associates
v. Figliotini [2017] O.J. No. 243, also ruled that the period begin when an
appeal from the foreign judgment is dismissed, or if there was no appeal, when
the time for bringing an appeal expires.
Before Figliotini, there was uncertainty about whether a limitation period
applies, which I commented on in my July 29, 2016 post. Section 16 (2) of the Limitations Act, 2002, S.O. 2002, c. 24 says that there is no
limitation period for a “proceeding to enforce an order of a court, or any
other order that may be enforced in the same way as an order of a court”. But does that extend to foreign court
orders? The Court of Appeal had not
previously ruled on this provision, but had ruled, in Lax v Lax (2004), 70 O.R. (3d) 520 that the corresponding provision
in the predecessor statute (the Limitations
Act, R.S.O. 1990, ch. L 15 s. 45) did not include foreign judgments. In 2010 in Commission de la Construction du Quebec v Access Rigging (2010) 104
O.R. (3d) 313 a trial court had ruled that s. 16(2) does not extend to foreign
judgments. However, more recently
other judges cast doubt on this. In PT ATPK Resources v. Diversified Energy
2013 ONSC 5913 Justice Newbould held there was no reason to exclude foreign
judgments from the scope of s. 16(2), and that comity is a reason to include
them. In SA Horeca Financial v Light 2014 ONCA 811, a summary judgment
motion judge also disagreed with Access
RIgging, and on a motion to the Court of Appeal to lift a stay of
enforcement of a judgment in that case, Justice Weiler J.A. mentioned that
judge’s views without disagreeing with him.
In Figliotini, the Court
analyzed the issue in depth, and gave several reasons why s. 16 (2) does not
apply to foreign judgments. Here are the
main ones: One, at common law, a foreign
judgment cannot be directly enforced here; the judgment creditor must first
obtain a judgment for recognition and enforcement. As such, a foreign judgment is not an order
that “may be enforced in the same way as an order of a court”.
Two, a reason to apply a
limitation period to a foreign judgment but not to a domestic judgment is that
to enforce the former, one must first obtain a judgment enforcing that foreign
judgment, and in that proceeding the judgment debtor may raise defences such as
fraud and denial of natural justice. The reasons why enforcement of a domestic
judgment is not subject to a limitation period is that no proceeding is needed
to enforce it, and the underlying claim has already passed a limitations hurdle.
Three, to exempt foreign
judgments from the limitation period is inconsistent with the purposes of
limitation periods, which are to ensure that people are not exposed to claims
for an unreasonably long time, and to ensure that plaintiffs bring their claims
before evidence is lost. Problems with the
preservation and reliability of evidence are especially pronounced for foreign judgment
debtors.
As for when the limitation period
starts, the fact a foreign judgment is considered final (a requirement for
enforcement) even before the time for an appeal has run out does not have any bearing
on limitations. The test under the Limitations Act, 2002 is not when the judgment
(or order) is final, but when it is discovered. One
element of a claim being discovered is
when “a proceeding would be an appropriate means to seek to remedy [the loss]”
(s. 5(1) (a) 4). A proceeding to enforce
a foreign judgment would not be appropriate, Strathy C.J.O wrote, until the appeal
period has expired or all appeals have been exhausted. The Court did not say whether judgments
from which leave to appeal must be obtained would be treated any differently.
