Hague Convention Choice of Court Agreement and the Common Law 2007

B. Individual Jurisdictions Briefly Considered

[38] This part considers the various common law jurisdictions in turn, with particular emphasis on the ways in which legislative provisions in force in those jurisdictions might alter the common law as described in the preceding part.

Alberta

[39] Alberta has no statutes which make the situation there any different than the general situation described in the foregoing part. The one difference to take note of with respect to Alberta relates to its rules for service ex juris with respect to contractual choice-of-court clauses. Unlike other provinces’ court rules, Alberta’s rules of court do not permit a plaintiff to serve a defendant outside of Alberta without leave of the court. They do, however, expressly provide that contractual submission is one instance where leave may be granted,[38] and presumably it normally would be. The possibility remains, however, that an Alberta judge or master might refuse to grant leave in such circumstances, thus denying the plaintiff access to the Alberta courts and creating a violation of the key art. 5 obligation of the Convention (see para. 14).

[40] Accordingly, if Alberta were to adopt the Convention its rules of court regarding service ex juris would have to be modified so as to stipulate that, in cases where art. 5 of the Convention provided that the courts of Alberta had exclusive jurisdiction over a dispute, plaintiffs would have a right (that is, would not require leave of the court) to serve defendants ex juris. This does not amount to a significant difference of principle between Alberta law and the general common law described in the last part. As noted in the last part, legislation implementing the Convention would have to override the common law power to decline jurisdiction on grounds of forum non conveniens. In Alberta it would also have to override a judge’s power to decline to grant leave to serve ex juris in situations covered by the Convention.

British Columbia

[41] B.C.’s Rules of Court used to allow service ex juris without leave of the court in cases where the parties had contractually accorded jurisdiction to that province’s courts. That changed on 4 May 2006 when B.C. brought its Court Jurisdiction and Proceedings Transfer Act[39] into force. The CJPTA does not allow service ex juris without leave simply on the basis that the parties have contractually granted jurisdiction to that province’s courts. In B.C. parties who seek to sue there and have the B.C. courts take jurisdiction based solely on a contractual choice-of-court clause (exclusive or otherwise) now have to seek leave of the court to serve defendants outside that province. Accordingly, just as with Alberta, legislation implementing the Convention in B.C. would have to eliminate any chance that a B.C. judge would fail to grant that leave – otherwise there would be a breach of the obligation in art. 5 of the Convention.

[42] In addition, the CJPTA has enacted a sort of statutory forum non conveniens provision. In British Columbia this is found in s. 11 of the CJPTA. This means that the points dealt with above in paras. 25-31 apply somewhat differently in B.C., since there the power of judges to stay or dismiss proceedings otherwise properly brought before them has been set out in legislation. In particular, s. 11(2)(a) of B.C.’s CJPTA invites courts to consider “the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum”. This clearly goes against the Convention’s approach to court jurisdiction in both art. 5 and art. 6.

[43] In interpreting this provision of CJPTA the British Columbia Court of Appeal recently noted that

the CJPTA provisions regarding forum non conveniens were meant to be assimilated into the existing body of common law and that the Chambers judge was required to consider and apply the case law already in existence at the time the statute came into force, as well as cases decided subsequently.[40]

Were British Columbia to adopt the Convention, its implementing legislation would have to state that it prevailed over that province’s CJPTA, or at least over s. 11 of that statute.

[44] In addition, British Columbia has a provision in its Court Order Enforcement Act which precludes enforcement of foreign judgments “given for loss or injury that arises out of exposure to or the use of asbestos that has been mined in British Columbia”.[41] That provision could conceivably clash with the Convention. This matter is dealt with below in Section V at para. __.

Manitoba

[45] Manitoba has no statutes that alter the general common law situation described in the previous part. Its Rules of the Court of Queen’s Bench,[42] permit plaintiffs to serve defendants outside of Manitoba when the parties to a contract have given jurisdiction to the Manitoba courts. The initial requirement of Convention art. 5 is thus satisfied. Manitoba’s Court of Queen’s Bench Act[43] contains statutory confirmation of that court’s power to stay proceedings brought before it, which includes the forum non conveniens power.

New Brunswick

[46] Like Manitoba, New Brunswick’s Rules of Court grant plaintiffs the right to serve defendants ex juris without leave of the court where the parties have contractually granted jurisdiction to New Brunswick’s courts (r. 19.01(g)(iv)). Rule 19.05 is the rule that would permit a defendant so served to bring a motion to stay or dismiss proceedings on grounds of forum non conveniens. In that respect, New Brunswick is like Manitoba in conforming to the general common law position outlined in the preceding part. That is, insofar as the Convention’s obligations regarding adjudicatory jurisdiction are concerned, New Brunswick’s statutes present no special problems.

[47] However, when it comes to enforcement of foreign judgments there is a New Brunswick act that slightly alters the general common law scenario described above. New Brunswick has a statute that sets out different and more restrictive rules for the enforcement of foreign judgments than are found in the other common law provinces: the Foreign Judgments Act.[44] This act is based on the 1933 Foreign Judgments Act promulgated by the ULCC’s predecessor, the Conference of Commissioners of Uniformity of Legislation in Canada, though it was not enacted in New Brunswick until 1950. There is a possibility of a clash between this statute and the Convention in that a judgment that New Brunswick would be required to enforce under the Convention might be a judgment that, according to the Foreign Judgments Act, must be denied enforcement.

[48] The potential for such clashes does not seem great, but it is certainly conceivable. For instance, the Foreign Judgments Act states that judgments foreign judgments involving injury in respect of immoveable property in New Brunswick, shall not be enforced in that province.[45] There are other respects in which New Brunswick’s Foreign Judgments Act appears to provide defences to enforcement that are at least somewhat broader than those found in the Convention.[46] It is thus possible to imagine a case in which the parties have designated the court of some foreign country as having exclusive jurisdiction over disputes arising from their contract, and where that country’s courts have rendered a judgment that has been brought to New Brunswick for enforcement. In such a case there might be no applicable defences to enforcement under the Convention, but New Brunswick’s Foreign Judgments Act might offer the judgment debtor defences to enforcement. Accordingly, if New Brunswick were to implement the Convention it would have to ensure that the implementing legislation made it clear that if a clash with the Foreign Judgments Act arose then the Convention prevailed.

Newfoundland and Labrador

[49] As with Manitoba and New Brunswick, Newfoundland and Labrador’s Rules of the Supreme Court allow service ex juris in cases where contractual parties have accorded its courts jurisdiction.[47] The Judicature Act[48] of Newfoundland and Labrador contains statutory confirmation of that province’s courts’ powers to stay actions brought before them. These provisions are just instances of the general common law scenario described in the previous part. Implementing the Convention in Newfoundland and Labrador appears to present no special problems.

Northwest Territories

[50] The Northwest Territories’ rules of court allow service ex juris without leave where there has been contractual designation of N.W.T. courts.[49] Implementing the Convention in the N.W.T. does not appear to present special problems.

Nova Scotia

[51] Nova Scotia’s Civil Procedure Rules are unique in their approach to service ex juris, a fact which attracted the notice of the Supreme Court of Canada in Morguard.[50] Rule 10.07(1) allows service with the leave of the court “on a person elsewhere than in Canada or one of the states of the United States”. Where a potential defendant falls outside the scope of r. 10.07(1) – that is, where the defendant is present somewhere in Canada or the U.S. – then no leave is required, and this is so regardless of the presence or absence of affiliating links between the underlying cause of action and the province of Nova Scotia. Accordingly, in a case where the parties to an international commercial contract had given exclusive jurisdiction to the Nova Scotia courts then (1) if the defendant was present in Canada or the U.S. service ex juris could be effected without leave, and (2) if the defendant was elsewhere leave would be required under r. 10.07(1), raising the possibility that leave might be denied. Were Nova Scotia to implement the Convention its implementing legislation would have to override r. 10 where the Convention applied. It would have to provide for service ex juris where there was an exclusive choice-of-court clause that fell within the terms of the Convention.

[52] Like other provinces, Nova Scotia has a provision which authorizes stays of jurisdiction. Civil Procedure Rule 14.25(1)(a) is the rule that authorizes motions for forum non conveniens.

[53] Nova Scotia has passed the Court Jurisdiction and Proceedings Transfer Act[51] but has not yet brought it into force. If it should bring that statute into force then the observations above with respect to the British Columbia version of that uniform act would apply to Nova Scotia as well.

Nunavut

[54] The situation in Nunavut is the same as in the Northwest Territories.[52] Its Judicature Act and rules of court are the same as those of the N.W.T. on the points relevant to the Convention.

Ontario

[55] There are no Ontario statutes which make the situation in that province any different from the general common law scene described in the preceding part. The Rules of Civil Procedure provide, in r. 17.02(f)(iii), for service outside Ontario in proceedings on claims

in respect of a contract where . . . the parties to the contract have agreed that the courts of Ontario are to have jurisdiction over legal proceedings in respect of the contract . . . .

Motions to set aside that service or to stay the action on grounds of forum non conveniens may be brought under r. 17.06, and the courts’ general power to stay matters that are brought before them is confirmed in the Courts of Justice Act.[53]

Prince Edward Island

[56] As with Ontario, in P.E.I. there are no statutes which make the situation in that province any different from the general common law scene described in the preceding part. Prince Edward Island’s Rules of Civil Procedure are modeled closely on Ontario’s. As in Ontario, rule 17.02(f)(iii) permits service ex juris without leave in cases where contracting parties have given that province’s court jurisdiction over disputes arising from their contract. And r. 17.06 allows defendants so served to bring a motion setting aside the service or staying the proceeding on the ground of forum non conveniens.

Saskatchewan

[57] Like British Columbia, Saskatchewan has enacted a Court Jurisdiction and Proceedings Transfer Act.[54] It came into force on 1 March 2004. So the observations made with respect to British Columbia’s version of that statute and its potential to clash with the Convention would apply here too.

[58] To date Saskatchewan is the only province to have enacted the ULCC’s Uniform Enforcement of Foreign Judgments Act. That province’s Enforcement of Foreign Judgments Act[55] came into force in April 2006. Although not as restrictive as the legislation it replaced,[56] the EFJA, like the New Brunswick statute discussed above in paras. 47-48, still provides defences to enforcement of a foreign judgment not found in the Convention. The conflict would only come at the enforcement stage; that is, the clash would be with the obligation under art. 8 of the Convention to recognize a judgment given by a court in a contracting state which had taken jurisdiction over a contract with an exclusive choice-of-forum clause. Here are ways that Saskatchewan’s EFJA differs from the enforcement obligations under the Convention.:

n EFJA s. 6(2) permits a Saskatchewan court enforcing a foreign judgment to decline to enforce that portion of the compensatory award that the Saskatchewan court deems to be “excessive in the circumstances”. The Convention has no comparable provision (though see below at paras. 69-71).

n EFJA s. 4 (e) permits a Saskatchewan court to refuse to enforce an otherwise enforceable judgment if it was “obtained by fraud”. The comparable provision in the Convention (art. 9 (d)) is narrower and only permits non-enforcement where the foreign judgment “was obtained by fraud in connection with a matter of procedure”.

The former of these is presumably the greater concern. It is aimed at multiple damages in the USA, which can be granted in contract suits in a number of circumstances.[57] If Saskatchewan implemented the Convention then – like New Brunswick with its Foreign Judgments Act – it would have to provide that in the event of a clash the Convention prevails over the EFJA.

Yukon Territory

[59] The Yukon has passed the Court Jurisdiction and Proceedings Transfer Act[58] based on the ULCC’s uniform act, but as of July 2007 that statute has not been brought into force. The Yukon’s rules of court are, mutatis mutandis, the Rules of the Supreme Court of British Columbia.[59] This presents a curious situation when it comes to the Yukon’s service ex juris rules, since Rule 13(1) of those B.C. rules provides:

Service of an originating process or other document on a person outside British Columbia may be effected without leave in any of the circumstances enumerated in section 10 of the Court Jurisdiction and Proceedings Transfer Act.

In other words, although the Yukon Territory has not proclaimed in force its own Court Jurisdiction and Proceedings Transfer Act, when it comes to service ex juris it seems to have adopted the B.C. version of that statute. The result of this would seem to be that the situation in the Yukon is the same as that set out above in the sub-section on British Columbia.

Federal

[60] Other treaties comparable to the Convention – such as the New York Convention and the Canada-UK Judgments Convention – have been implemented not only at the provincial level but at the federal one as well.[60] The Convention would require such implementing legislation. Presumably Canada’s Federal Court would not often be required to act pursuant to the Convention, since most of the subject matter areas that might entail recourse to that court are excluded from the Convention. These include most intellectual property matters, carriage by sea, marine pollution and limitation of maritime claims, antitrust, and validity of entries in public registers. However, there certainly are claims under the Convention that could implicate Federal Court jurisdiction. For instance, proceedings are not excluded from the scope of the Convention merely by the fact that one of the parties to the contract with a choice-of-court clause is a state or governmental agency.[61] So international sale of goods contracts involving the Government of Canada as one of the contracting parties would fall within the Convention, and parties to those might well exclusively designate the Federal Court of Canada as the place to resolve their disputes.

[61] The Federal Court of Canada applies the doctrine of forum non conveniens so the point made in paras. 25-31 applies with respect to it. That is, federal legislation implementing the Convention would have to (1) stipulate that where jurisdiction existed under the Convention the Federal Court should not resort to forum non conveniens to stay or dismiss it and (2) where the jurisdiction otherwise existed under the rules of the Federal Court but where the Convention indicated such jurisdiction should be declined, the Convention should prevail.

[62] Under Canada’s Foreign Extraterritorial Measures Act[62] there are provisions which limit the enforcement of foreign judgments in certain circumstances. Section 7.1 prohibits enforcement of judgments “given under the law of the United States entitled Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996”, and s. 8 permits the Attorney General of Canada to declare that foreign-country judgments shall not be enforced in Canada if they will or might adversely affect “significant Canadian interests in relation to international trade or commerce involving a business carried on in whole or in part in Canada”. It is not inconceivable that these non-enforcement provisions could clash with an obligation to enforce a judgment under the Convention. Parliament might address this by amending FEMA to stipulate that its non-enforcement provisions should never operate to override an obligation arising under the Convention to enforce a foreign judgment. However, the chances of such a clash occurring seem so remote as to hardly be worth bothering about. Note that I mention FEMA here under the Federal sub-heading, but its operation is not confined to the Federal Court of Canada. It could employ to enforcement proceedings in any Canadian court.

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018