November 12, 2021
On November 4, 2021, the Supreme Court of Canada clarified the law regarding when a judgment debtor “carries on business” for the purpose of the recognition and enforcement of foreign judgments in Canada. In H.M.B. Holdings Limited v. Antigua and Barbuda, the Court decided that a default judgment given in B.C. in an action to enforce a judgment originally issued in Antigua could not be registered in Ontario because the judgment debtor didn’t carry on business in B.C. at the time of the B.C. legal action.
As more businesses and entities globalize operations and (particularly in the wake of the COVID-19 Pandemic) grow their online presence, their exposure to foreign judgments will increase. Although the term “carry on business” is still broad and slightly uncertain, the Court’s decision makes it easier to discern when a business or entity is “carrying on business” in Canada for the purposes of enforcing a foreign judgment against it in Canada. The decision suggests that operating partially online in Canada likely isn’t enough to expose it to the enforcement of a foreign judgment in Canada. However, the maintenance of physical business premises is consistently regarded as a compelling factor in determining whether a party is “carrying on business” in a jurisdiction. Businesses and entities with even a moderate physical presence in Canada will be a target for foreign judgment enforcement. Such businesses and entities are wise to consider ways to structure their business operations to mitigate their exposure to foreign judgments.
Here’s a recap of how foreign judgments can be enforced in Canada and the Court’s decision in H.M.B. Holdings Limited v. Antigua and Barbuda.
The Enforcement of Foreign Judgments
A court can issue a monetary judgment against the unsuccessful party (the judgment debtor) at the end of legal proceedings. However, the issuance of a judgment doesn’t mean the successful party (the judgment creditor) automatically receives monies; it must still enforce the judgment against the judgment debtor’s assets. This is a more complex and difficult task when the judgment debtor’s assets are located in a foreign jurisdiction. In Canada, there are two main options to enforce a foreign judgment:
The Case
Antigua, a Caribbean country, expropriated property owned by H.M.B. Holdings Limited, an Antigua corporation. H.M.B. sued Antigua in Antigua for compensation. The Antiguan Court ordered Antigua to compensate H.M.B. Subsequently, H.M.B. sued Antigua in British Columbia to enforce the Antiguan judgment, and obtained a default judgment against Antigua. A year later, H.M.B. applied to enforce that B.C. judgment in Ontario pursuant to Ontario’s REJA. Antigua opposed this application, arguing it didn’t carry on business in B.C. at the time of the B.C. legal action. Antigua didn’t have a physical presence in B.C.: there was no consulate, office, employees, or direct marketing within the province. However, Antigua did have contracts with representatives for a citizenship investment program (CIP). The Ontario Superior Court and the Ontario Court of Appeal sided with Antigua, and dismissed H.M.B.’s REJA application. At the Supreme Court of Canada the issue was whether Antigua “carried on business” in B.C. at the time of the B.C. legal action. The Supreme Court of Canada agreed it did not, and as a result H.M.B. couldn’t register the B.C. judgment under Ontario’s REJA:
The Presence Test. To determine if a judgment debtor is carrying on business in a jurisdiction, a court must assess whether the judgment debtor has some actual direct or indirect presence in the jurisdiction accompanied by a degree of activity that is sustained for a period.
Application of the Test. The Court concluded Antigua was not “carrying on business” in B.C. during the B.C. legal action: it had no physical presence in B.C., it didn’t carry on any sustained business activity in B.C., and the CIP representatives weren’t agents of Antigua (they carried on their own business independent of Antigua), and the CIP had no particular focus on attracting investors from B.C.
Please contact your McInnes Cooper lawyer or any member of our Litigation Team @ McInnes Cooper to discuss how we can help you mitigate your exposure to foreign judgments in Canada.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
© McInnes Cooper, 2021. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.
Jan 26, 2023
In November 2022, the Ontario Court of Appeal definitively decided an organization whose information systems are breached by a malicious third…
Nov 21, 2022
On November 10, 2022, the Supreme Court of Canada examined the interaction of arbitration and bankruptcy and insolvency proceedings, deciding a…
Jul 18, 2022
The Supreme Court of Canada’s “Jordan” framework, introducing strict timelines for determining unreasonable delay in the context of…
Mar 31, 2022
On March 18, 2022, the Supreme Court of Canada confirmed that an Indigenous government can still satisfy the impecuniosity requirement for an…
Feb 8, 2022
We updated this publication on December 15, 2022. On May 17, 2022, the P.E.I. Non-disclosure Agreements Act took effect, significantly…
Feb 3, 2022
On January 26, 2022, the British Columbia Court of Appeal extended an injunction preventing protesters from interfering with a logging…
Dec 16, 2021
We updated this publication on December 21, 2022. The name of the game is to have a plan to mitigate the risk that a data breach will happen…
Aug 3, 2021
On July 29, 2021, the Supreme Court of Canada refined the test for determining when a plaintiff has discovered a claim for the purpose of a…
Mar 1, 2021
The Supreme Court of Canada continues to develop and clarify the organizing principle of good faith performance in contract law. In its 2014…
Jan 18, 2021
The Supreme Court of Canada, in the 2014 case of Bhasin v. Hrynew, recognized a general organizing principle of good faith performance in…
Jul 6, 2020
On June 26, 2020, the Supreme Court of Canada released Uber Technologies Inc. v. Heller, a much-awaited decision regarding the enforceability of…
May 11, 2020
The Supreme Court of Canada recently released a much-awaited decision regarding the Companies’ Creditors Arrangement Act (CCAA). The CCAA is…
Mar 10, 2020
The global COVID-19 (a.k.a. Coronavirus or SARS-CoV-2) outbreak has implications for many commercial relationships, its evolving nature and…
Feb 14, 2020
NOTE: On July 23, 2021, the Supreme Court of Canada agreed with the Newfoundland & Labrador Court of Appeal’s decision respecting the law,…
Jan 14, 2020
On December 23, 2019, the Newfoundland and Labrador Court of Appeal effectively eliminated the category of “knowledgeable fact witness” in…
Nov 18, 2019
Effective December 1, 2019, the New Brunswick government will finally finalize the reform of N.B.’s money judgment enforcement regime with the…
Dec 4, 2018
On November 30, 2018, a majority of the judges of the Supreme Court of Canada decided the media doesn’t get any special protection from the…
Jun 11, 2018
On June 6, 2018, the Supreme Court of Canada considered the test for jurisdiction over an allegedly defamatory Internet article – the…
Feb 15, 2018
Mandatory interlocutory injunctions - court orders, made in the context of a lawsuit, that a party take positive action as opposed to refrain…
Jan 12, 2018
Whether a provincial court will grant police a “production order” under the Criminal Code of Canada requiring a non-Canadian company to…
Jun 28, 2017
On June 28, 2017, the Supreme Court of Canada confirmed a Canadian court can issue an interlocutory injunction (an order requiring an entity or…
Jun 23, 2017
On June 23, 2017, the Supreme Court of Canada decided that in a contest between the choice of forum clause in Facebook’s online terms of use…
Jun 5, 2017
On June 2, 2017, the Supreme Court of Canada decided that where a plaintiff advances a claim for negligently caused psychological or psychiatric…
Mar 15, 2017
On March 9, 2017, the N.S. Court of Appeal stopped building inspection claims in their tracks when it decided that a defence based section…
Nov 28, 2016
On November 25, 2016, the Supreme Court of Canada decided privilege wins again - twice. In two separate decisions - Lizotte v. Aviva Insurance…
Aug 17, 2016
The Newfoundland and Labrador Court of Appeal recently affirmed the test for confirming a cause of action and thus resetting a limitation period…
Jul 19, 2016
On July 15, 2016 the Supreme Court of Canada, in a long-awaited decision, resisted the invitation to re-write the traditional rules for the…
Jul 29, 2015
On July 27, 2015, the Federal Court of Canada decided a lawsuit by medical marijuana program participants against the Federal Government…
Jul 21, 2015
On July 16, 2015, the New Brunswick Court of Appeal ordered an insurer to produce a significant amount of its financial and business information…
Feb 18, 2015
The new NS Limitations of Actions Act – the legislation that determines the limitation period (time limit) in which a lawsuit must be started…
Nov 14, 2014
On November 13, 2014, the Supreme Court of Canada (SCC) effected a significant development in Canadian contract law by recognizing the…
Nov 3, 2014
Note: On November 20, 2014 the NS Government passed the final form of Bill 64, Limitations of Actions Act into law. The final form of the Act…
Sep 9, 2014
Effective October 1, 2014, the New Brunswick Rules of Court will change – some Rules for the first time since they came into effect in 1982.…
May 26, 2014
On May 23, 2014 the Federal Court of Canada decided the Federal Treasury Board Secretariat’s interpretation of the policy for compensating…
May 21, 2013
In its April 2013 decision in Re Stan, the Alberta Securities Commission provides issuers with a practical approach to the assessment of both a…
Jan 8, 2013
On November 19, 2012, the Supreme Court of Canada (SCC) unanimously ruled a B.C. public school system’s failure to provide adequate and…
Mar 6, 2009
“Contamination Claims: Long Tails or Just Dogs? Practical and Legal Issues of Litigating Contaminant Slow-Leak Cases”, Cdn Journal of…
Subscribe to McInnes Cooper to stay current with our leading insights on legal updates, trends, news, events, and services.