Defenses To The Enforcement Of Foreign Judgments: Post-Pro Swing: A Fourth Defense?


In Morguard Investments Ltd. v. De Savoye1, Justice La Forest made a convincing case for replacing the territoriality-based test for the recognition of foreign judgments to a substantial connection test, which he argued was more consistent with our modern global economy.2 The "real and substantial connection" test adopted in Morguard applied to money judgments between Canadian provinces. Subsequent judgments before the Supreme Court of Canada held that the real and substantial connection test should be extended to the enforcement of money judgments from truly foreign courts (i.e. foreign countries)3 and further that this same criterion should be employed to address the recognition and enforcement of non-money judgments issued by foreign courts.4

Following Morguard, a foreign litigant is only required to show:

That the foreign judgment was "issued by a court acting through fair process and with properly retrained jurisdiction,"5 There exists a "real and substantial connection" between: - the issue in the action and the location where the action is commenced; - the damages suffered and the jurisdiction; and - the defendant and the originating forum;6 and The defendant fails to raise a recognized defence.7 The Supreme Court's modern approach has increasingly simplified the enforcement procedure for foreign litigants in Canada. So long as principles of natural justice are satisfied in the originating court's decision, the enforcing Canadian court is not interested in the substantive or procedural law of the foreign jurisdiction in which the judgment sought to be enforced was rendered.8 This means once jurisdiction simpliciter is established by a domestic Canadian court, using the "real and substantial connection" test, the issues to be raised will be limited to the application and scope of the defences available to a domestic defendant seeking to have a Canadian court refuse enforcement of a foreign judgment.9

Both the majority and dissenting opinions of the Supreme Court of Canada in Beals affirmed that once the foreign court's jurisdiction is recognized, there are only three limited defences to an action for enforcement in Canada; namely:

Fraud, Denial of Natural Justice, and Public Policy. The majority did not liberalize any of the existing common law defences to recognition and enforcement, determining that they applied equally to truly foreign judgments as to interprovincial judgments.

The Majority decision in Beals, delivered by Major J., held that the extension of the Morguard principles to foreign judgments and the resulting change in the jurisdiction test, did not require a reconsideration of the traditional common law defences to recognition and enforcement of judgments. Major J. stated:10

Unusual situations may arise that might require the creation of a new defence to the enforcement of a foreign judgment. However, the facts of this case do not justify speculating on that...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT