Ontario Court Of Appeal Rules Ricochet Judgments Not Available At Common Law

• Published date: 12 October 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Babin Bessner Spry LLP
• Author: Mr Aaron Gold

Overview

The Ontario Court of Appeal recently considered the circumstances in which an Ontario court will recognize and enforce the judgment of another Canadian province which has itself recognized and enforced a foreign judgment.¹ H.M.B. is the first Canadian decision considering the availability of "ricochet judgments" at common law, and emphasizes the care claimants must take in selecting the appropriate province(s) to commence recognition and enforcement proceedings.

Background

The appellant, H.M.B. Holdings Limited ("H.M.B."), owned a hotel in Antigua and Barbuda which was severely damaged by Hurricane Luis in September 1995. The Antiguan government expropriated the property in 2007, leading to years-long litigation at several levels of court regarding the valuation of the property. In May 2014, the Judicial Committee of the Privy Council held that the respondent, the Attorney General of Antigua and Barbuda ("Antigua"), was required to pay H.M.B. approximately US$26.6 million, plus interest (the "Privy Council Judgment").² Only a portion of the judgment debt was paid.

In October 2016, H.M.B. commenced an action in the Supreme Court of British Columbia to recognize and enforce the Privy Council Judgment under the Court Jurisdiction and Proceedings Transfer Act.³ Antigua did not defend the action, and H.M.B was granted default judgment for approximately C$30 million (the "BC Judgment") to satisfy the outstanding judgment debt.

In May 2018, H.M.B. brought an application to register the BC Judgment in Ontario under the Reciprocal Enforcement of Judgments Act.⁴ It was unsuccessful at first instance, and on appeal to the Ontario Court of Appeal⁴ and the Supreme Court of Canada.⁶

In May 2019, H.M.B. commenced a new action seeking recognition and enforcement of the BC Judgment at common law.

The Motion Judge's Decision

Antigua moved for summary judgment to dismiss the action,⁷ arguing that no real and substantial connection existed between British Columbia and the Privy Council Judgment for the purpose of H.M.B.'s recognition and enforcement proceedings.

Antigua also argued that it was an abuse of process for H.M.B. to bring an action for recognition and enforcement of the BC Judgment in Ontario, rather than seeking enforcement of the Privy Council Judgment directly. Noting that the present action was commenced five years after the Privy Council Judgment was rendered, Antigua argued that a ricochet judgment would allow H.M.B to avoid Ontario's two-year...