The Supreme Court of Canada confirmed in Beals v. Saldanha that the principles of comity must be applied when considering and enforcing judgments of other courts. Ontario courts will generally recognize and enforce American judgments against Canadian parties with assets in Ontario where a final judgment for a defined sum of money is awarded by a court of competent jurisdiction.
Enforcement of US judgments is pursued by commencing an application (generally a summary procedure relying on a “paper record”) or by starting an action (and often seeking summary judgment within the action). A party seeking to enforce a US judgment must satisfy the court that there is a “real and substantial connection” between the foreign jurisdiction and the subject matter giving rise to the claim.
The three main defences to the enforcement of foreign judgments are fraud, denial of natural justice and public policy concerns. The Court of Appeal recently refused to add a fourth defence: “a meaningful opportunity to be heard.”
A foreign judgment obtained by fraud may not be enforced by a Canadian court. The defence is a narrow one, however, in order to avoid relitigation of the merits of the underlying action. The defence may be raised with respect to jurisdiction, as grounds for impeaching the foreign judgment. In the case of intrinsic fraud, or fraud going to the merits of the case, the defence can only be successfully raising in limited circumstance, such as where material facts arose that were not previously discoverable through due diligence.
A foreign judgment may also be unenforceable if it resulted from proceedings that were contrary to notions of fairness and fundamental justice. These might include the right to be given adequate notice of the claim or the right to be granted an opportunity to defend. The denial of natural justice defence has been raised in international disputes involving accusations of corruption. However, Canadian courts have not been willing to endorse this defence, particularly where the parties attorned to the foreign jurisdiction.
