Foreign Judgments - Common Law 1996



II. SCOPE AND CONTENT OF A MODEL ACT

A. General Considerations

[15]  An initial question is which types of judgments should be dealt with in a model act. We deal with that in section B. The next issue is how the relevant foreign judgments should be treated, and that occupies sections C, D and E.

[16]  Statutes dealing with the recognition and enforcement of foreign judgments generally deal with either or both of two broad categories of issues. The first may be labelled conditions for recognition and enforcement. This denotes the various requirements that a foreign judgment must have before it will be eligible for recognition or enforcement in the courts of a Canadian province. "Recognition" would include recognition of the judgment as res judicata so as to bar a subsequent, inconsistent claim against a party to the judgment by another party to it. The second category of issues concerns mechanisms for enforcement: what steps must be taken to render enforceable a foreign judgment which meets the conditions for enforcement, and what effects does a judgment have when those steps are taken? A statute need not deal with both of these matters. For example, in the United States the Uniform Foreign Money-Judgments Recognition Act - which, it should be noted, has not been uniformly adopted by all states - deals with conditions for recognition. It does not, however, address the manner of enforcement. Rather it leaves that up to the individual states. Conversely, in Canada it would be possible (though not very useful) to have a statute which addressed the manner of enforcement but which said nothing about the conditions for enforcement. We say nothing at this stage about whether a uniform model act should address both conditions for recognition and manner of enforcement. We make the distinction only so that we might deal with them separately, on the understanding that they are not necessarily linked.

B. Scope of a Model Act

1. General

[17]  To what sort of foreign judgments should a uniform act apply? Presumably, it should apply to final money judgments in in personam suit in most civil and commercial matters. Equally, it should presumably not deal with recognition of (1) foreign divorces (a matter which is addressed in the Divorce Act), (2) child custody orders (which are already subject to existing statutory régimes), or (3) declarations of personal status (the rules for the recognition of which have always been treated as different from the rules for recognizing in personam judgments). There are also compelling reasons to exclude (4) foreign judgments in rem (because they create rights in property, and territorial competence turns on the location of the property) and (5) foreign judgments in bankruptcy and insolvency proceedings (the recognition of which is usually not a matter of absolute obligation but of discretion based on comity, by means of which a judge can take account of the interplay between the orders of courts in different jurisdictions). Between those two relative certainties lie some more debatable matters.

2. Penal Judgments

[18]  The Uniform Enforcement of Canadian Judgments Act (1992 ULCC Proceedings) does not permit enforcement of an extraprovincial judgment "for the payment of money as a penalty or fine for committing an offence" (s. 2 (1)(b)). It is difficult to imagine why we would want to be any more generous to foreign judgments in such matters, and we think there will be little debate that an act for foreign judgments should contain a comparable provision. The terms "penalty" and "fine" are not defined in the UECJA, but that does not appear to present a problem.

3. Taxes

[19]    Common law courts never used to enforce foreign judgments for taxes. Recently, however, some courts have carved out exceptions to that rule and others have construed "taxes" narrowly. Some foreign taxes, such as municipal water rates, are akin to a fee for service, and it is not clear what the justification for refusing to enforce such a judgment would be. This is an issue which should be examined closely. It may be the case that some -- probably most -- foreign tax judgments should be excluded from the operation of a model foreign judgments act. It is not clear, however, that there is any reason to reverse the effect of recent court decisions which have enforced some foreign tax (or tax-like) judgments.

4. Public law judgments

[20]   There is some authority for the proposition that common law courts will not enforce foreign judgments in respect of "public laws". This bar was thought to be related to that for foreign revenue and penal laws. This question should be examined with respect to any model statute. We note that a recent, well-reasoned decision of the Ontario General Division rejected the "public law" bar to enforcement of a foreign country judgment: United States of America v. Ivey (1995), 130 D.L.R. (4th) 674. The reasons for judgment in that case provide a convincing argument for rejecting the public law bar in Canadian law.

5. Maintenance Orders

[21]  It is common, both in Canada and elsewhere, to see court orders for maintenance as raising issues sufficiently distinct from those of general civil judgments as to justify excluding them from general statutes and treating them separately. Maintenance orders are excluded from the Uniform Enforcement of Canadian Judgments Act (by s. 2 (1)(a)) and dealt with in the Reciprocal Enforcement of Maintenance Orders Act. While it is undeniable that maintenance orders present some special concerns, it is not clear that those concerns are so special as to justify the ghettoization of maintenance orders in a special statute. That arguably has the affect of harming women, who are the overwhelming majority of judgment creditors in maintenance action.

[22]  The main problem with maintenance orders at common law was that, as periodic orders subject to variation in the court which originally issued them, they were classed as "not final". Since only final orders could be recognized at common law, maintenance orders were denied enforcement. That problem has been overcome in the Reciprocal Enforcement Maintenance Orders Act. It will be noted, however, that the problem is only addressed if a Canadian province chooses to reciprocate with another jurisdiction. The provinces reciprocate among themselves. For this reason there was little problem in excluding maintenance orders from the Uniform Enforcement of Canadian Judgments Act -- the well-developed scheme in the Reciprocal Enforcement of Maintenance Orders Acts was already applicable throughout Canada. Some provinces also reciprocate with a variety of foreign jurisdictions respecting enforcement of maintenance orders. But reciprocation is far from universal, and to the extent that it is not maintenance creditors in non-reciprocating jurisdictions face enormous hurdles if the maintenance debtor is located in Canada.

[23]  It is quite possible to address this issue in a general model act. Such an act could adopt a provision like that in the Civil Code of Québec:

Art. 3160.A decision rendered outside Québec awarding periodic periodic payments of support may be recognized and declared enforceable in respect both of payments due and payments to become due.

A maintenance judgment would still have to meet the general conditions for enforceability, dealt with below, but would face no additional hurdles. We see two principal problems with including such a provision in a general model act. The first is that, since the existing Reciprocal Enforcement of Maintenance Orders Acts (REMO) are likely to continue, there will be the problem of potentially inconsistent régimes. Maintenance creditors with judgments from reciprocating jurisdictions would appear to have the option of proceeding either under the REMO scheme or under the new model act.

[24]  Secondly, the continuing exclusion of maintenance orders from general foreign judgment legislation preserves the possibility for Canadian jurisdictions to negotiate with foreign states for improved treatment of Canadian maintenance creditors. This is part of the recent Canada-France Convention, and it can also take place as individual provinces undertake discussions with potential reciprocating states under the REMO scheme. If maintenance judgments are included in a general statute that may result in the loss of one inducement for foreign states to agree to give improved treatments to Canadian maintenance creditors.

[25]   We are not convinced that either of considerations provide sufficient justification for the ongoing exclusion of support orders from a general statute. Accordingly we suggest that the ULC give consideration to the inclusion of maintenance orders in any general model act dealing with the enforcement of foreign judgments. We recognize, however, that problems of variation of maintenance orders tend to complicate matters and may militate in favour of dealing with them, as they are dealt with now, in a separate reciprocal enforcement statute.

6. Non-Money Judgments and Provisional Measures

[26]  The terms of reference for this report leave open the question of whether a model statute should deal with the enforcement of (1) final orders other than those for the payment of money, such as specific performance or an injunction, and (2) orders of a provisional or protective nature, such as interlocutory injunctions (including orders in the nature of a Mareva injunction) and disclosure orders. No Canadian legislation has dealt with these matters, but they are addressed in the Brussels and Lugano Conventions which deal with judgment enforcement within the European Union.

[27]  One problem with enforcement of interlocutory orders of foreign courts is that, by definition, they do not meet the common law criterion of finality. As mentioned in the previous section with respect to maintenance orders, at common law only those foreign judgments which were deemed final were enforceable. This criterion, however, was developed before the invention of such modern provisional measures as Mareva injunctions, Anton Piller orders, and related disclosure and receivership orders. It is arguable that the finality criterion was never intended to prevent recognition of such orders, and that the general considerations in favour of enforcement of foreign money judgments argue in favour of enforcement of at least some provisional and protective measures. Arguably Canadian courts should at least be given the discretion to enforce some foreign provisional orders. There has been little discussion of this matter in Canada, and there is not a great deal in the way of instructive case law. It may be the case then, that drafting provisions on this subject would be a difficult and contentious process and that, since it does not seem crucial it should be omitted. We think, however, that this is a matter that is likely to be of increasing importance in the future, and that the process of developing a model act should at least consider the possibility of including in such a statute provisions dealing with the recognition of protective and provisional measures of foreign courts.

[28]  We understand that at its August 1996 meeting the ULCC will be considering a proposed uniform act on this subject for domestic purposes (Interprovincial Enforcement of Non-Money Judgments Act). Discussions around that act may help decide whether it would be worthwhile making similar provision in a statute dealing with foreign judgments.

7. Judgments of Administrative Tribunals

[29]  In addition to applying to judgments from courts, s. 1 (b) of the Uniform Enforcement of Canadian Judgments Act states that it applies to a final order that is made in the exercise of a judicial function by a tribunal of a province or territory of Canada other than [enacting province or territory] and that is enforceable as a judgment of the superior court of unlimited trial jurisdiction in that province or territory . . . .

It is not clear that this same generous approach should be taken with respect to decisions of administrative tribunals of foreign countries. The fact that we have confidence in a foreign state's judiciary does not necessarily entail equal deference to such a state's administrative system. A solution would be to require that the foreign administrative award actually be converted into a court judgment, so that we are now simply dealing with a court judgment. Professors Talpis and Goldstein suggest in their report that this is unnecessary and that the UECJA approach to intra-Canadian administrative judgments should be extended to foreign ones. We think this may be overly generous to foreign administrative judgments, but certainly there are good arguments on either side and the ULCC should consider this point.

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