Foreign Judgments - Common Law 1996



E. Subsidiary Issues Related to Enforcement Mechanisms

[90]    There are several subsidiary issues to be discussed.

1. Effect of the Foreign Judgment.

[91]  The Enforcement of Canadian Judgments Act provides that, once a foreign judgment becomes enforceable it has the same effect as if it were a judgment of the superior court of unlimited trial jurisdiction in the enforcing territory (s. 4). We know of no good argument why the law on this point should be otherwise. This issue seems uncontroversial.

2. Limitation period.

[92]  The Uniform Enforcement of Canadian Judgments Act addresses this issue for intra-Canadian judgments. Section 5 of the UECJA provides that the applicable limitation period is the shorter of the limitation period in the original jurisdiction and that in the jurisdiction in which recognition is sought. Interestingly this does not provide complete uniformity, since different provinces have different limitation perios. Uniformity in this area is to be preferred, but we note that the ULCC has already addressed this issue in its Uniform Limitations Act. Section 7 (2)(g) of the ULA provides a limitation period of 6 years for actions on foreign judgments.

However Canadian provinces have been slow to modernize their laws in this area and consequently uniformity does not prevail. In light of that the approach in s. 5 of UECJA provides the best model. Depending on the different types of judgment covered by the act, it may be appropriate to provide for different limitation periods, as is done in the draft Canada-France Convention.

3. Conversion rate for foreign currency.


[93]  The question here is selection of the date for ascertaining the rate at which a foreign judgment granted in a currency other than Canadian dollars should be converted to Canadian dollars. A statutory provision selecting such a date has not heretofore been a part of Canadian uniform legislation dealing with foreign judgments. Canadian courts have not been consistent in developing a common law rule on this point. Most courts convert at the date of the second (i.e. the Canadian) judgment, but some convert at the date of the original foreign judgment. In addition we note that Québec's Civil Code has a provision on this issue (art. 3161 -- convert as of the date of the original decision). Furthermore a bill currently before Parliament (Bill C-5, 35th Parl., 2nd Sess.) would amend the Bankruptcy and Insolvency Act to add a new provision to deal with this issue in respect of foreign bankruptcy claims (s. 275 - convert to Canadian currency as of the date of filing of the notice, the proposal, or the bankruptcy, depending on a range of factors). The same bill would amend the Companies' Creditors Arrangement Act by adding a new section dealing with the same issue in respect of corporate reorganizations (s. 18.6(8) - convert as of the date of the initial application to court).

[94]  The Uniform Foreign Money Claims Act, promulgated six years ago, deals with this issue, and arguably a uniform act dealing with foreign judgments should not duplicate that. We think there are good arguments for dealing with this issue in a uniform act on foreign judgments. First, some provinces might adopt the foreign judgments act but not adopt the Foreign Money Claims Act (which deals with a range of other issues). Such provinces would then lack a statutory provision dealing with this issue, and that would produce a lack of uniformity. Secondly, even if a province enacted both the UFMCA and a uniform act on foreign judgments, it is not certain that a court would necessarily see the conversion-date rule in the UFMCA as applying to the enforcement of foreign judgments. Ontario courts, who have a provision similar to the UFMCA in s. 121 of the Courts of Justice Act, have not always applied it to actions on foreign judgments. We accept the payment-date conversion rule in the UFMCA, but we think there are good reasons for including that rule, to be of mandatory application, in a uniform foreign judgments act. If the decision is made to include periodic payments for maintenance (see above, par. 21-25) then some other mechanism might have to be selected, since calculating the conversion rate every month or so might prove to be a hardship.

4. Post-judgment interest.

[95]  Section 7 of UECJA addresses post-judgment interest for extraprovincial judgments but it does not provide a complete model for a statute dealing with foreign judgments. This is so because with foreign judgments (most of which are presumably in foreign currency) the issue is tied to the foregoing one -- the date for the conversion from the foreign to Canadian currency. There is an argument to be made that the applicable post-judgment interest rate should be the rate applicable in the foreign jurisdiction up until the time chosen for conversion into Canadian currency; thereafter it should be the rate in the enforcing jurisdiction. If a payment-date conversion is selected, then the foreign rate should be applicable until that time. This is the rule in English case law, and we understand that it will also be the rule selected by British Columbia in the regulations to its Foreign Money Claims Act. We support that rule, and if a uniform statute on foreign judgments includes a foreign currency conversion rule it should also include a provision on interest.

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