Friday, 28 June 2019

Legal Test for Risk of Unfairness in Foreign Court Systems Evolves

     Recent news reports about the fierce resistance in Hong Kong to a proposal to allow extradition to the People’s Republic of China, and about the imprisonment of dissidents in Saudi Arabia,  remind us that some foreign countries have judiciaries that often fail to deliver justice, due to bias or corruption, and that Canadians have a legitimate concern about being subjected to them.   

     This concern can arise where a defendant asks the Canadian court to decline jurisdiction in favour of a foreign court based on forum non conveniens, or where a judgment creditor asks a Canadian court to enforce a foreign judgment.   

     Until recently the standard of evidence to establish that a foreign court is corrupt and to be avoided was unreasonably high.    In Oakwell v Evernorth (2006) 81 O.R. (3d) 388 (C.A.), a judgment debtor, Evernorth, defended a proceeding to enforce a judgment from Singapore in a commercial matter. Evernorth led uncontroverted evidence of government interference in political (not commercial) trials in Singapore, but no evidence of interference in its own case.   The Ontario Court Appeal rejected this defence, saying that Evernorth needed to have proven interference in its own case in Singapore, and needed to have proven actual bias, as opposed to reasonable apprehension of bias. 

     In Garcia v Tahoe Resources, 2015 BCSC 2045 the plaintiffs were protestors who allegedly had been shot at the defendant’s mine in Guatemala by security guards. They sued the Canadian owner in B.C.  The defendant moved to stay the proceeding on the grounds that the courts of Guatemala are a more appropriate forum.   The plaintiffs led evidence of unfairness of those courts, and the court found there are some problems there.  In granting the stay, the motion court ruled that:
where the forum non conveniens analysis points to a clearly more appropriate forum, then the plaintiff must take the forum as he finds it even if it is in certain respects less advantageous to him unless he can establish that substantial justice cannot be done in the appropriate forum.  (para. 64).

     More recently the test has become less onerous.   The B.C. Court of Appeal reversed the motion court decision in Garcia (2017 BCCA 39), saying the motions judge had applied the wrong test, and had inappropriately placed the onus on the plaintiff.    The proper test is “whether there is a real risk of an unfair process in the foreign court”, which is incidentally the test used in the United Kingdom (para. 115 and 124).  The Court said “It is inadequate to ask whether the foreign forum is capable of providing justice.” (para. 124).       As well, the issue of unfairness is to be treated as one of the factors in the forum non conveniens analysis.  Insofar as it is the party that advocates for moving the case to a foreign court has the onus of showing the foreign court is more appropriate, that party must show there is no real risk of an unfair process.     

      This ruling has not been appealed.      The B.C. Court of Appeal applied the real risk test again in Araya v Nevsun Resources (2017) BCCA 401), another case involving abuses at a Canadian-owned mine overseas (Eritrea). The defendant has appealed to the Supreme Court of Canada but not on this issue.    

     In Evernorth, the Court called for evidence of corruption in the party’s own case; evidence of corruption in other cases from the same court would not suffice.   The Court also required evidence of actual bias, not just a reasonable apprehension of bias.    Should the test in a foreign judgment enforcement case differ from the test in a forum non conveniens case?   In the former, the plaintiff’s case has been tried in the foreign court and a judgment has been rendered, whereas in the latter the case has not yet been tried. 

     However, this is not a reason to require the judgment debtor to prove corruption   Proof of corruption and bias is almost by definition very difficult to obtain.  If a judgment was affected by a bribe or political interference, how is a litigant expected to know that the reason he lost is not the reason the judge gave in written reasons but instead a bribe from the plaintiff, or a discreet phone call from a higher-ranked government official whose interests, financial, political or other, are affected?  The defendant cannot expect disclosure.  It is not impossible, but very unlikely, that he/she will find out at all, let alone before its too late.   Evidence of corruption in other cases in the same court, or evidence that the judicial system lacks safeguards against corruption, or evidence that judges are vulnerable to outside influences should be given at least some weight, albeit less weight than evidence of corruption in one’s own case.  To ignore that evidence altogether is to turn a blind eye to that corruption. 

     The Court of Appeal in Garcia made clear that although the evidence of corruption was general, not case-specific, it cannot be ignored, although it will carry only limited weight (para. 125-126).  With that caveat, it makes sense to extend the “real risk” test to judgment enforcement cases.  That is, the court should ask whether there is a real possibility that the foreign judgment was the product of an unfair process in the foreign court”.  Otherwise, to enforce a foreign judgment is to put at risk public confidence in our own justice system.


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