TMI Blog1990 (12) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... r carried on business in Alberta since. The mortgages fell into default and the respondents brought action in Alberta. The appellant was served with process in the actions by double registered mail addressed to his home in British Columbia pursuant to orders for service by the Alberta court in accordance with its rules for service outside its jurisdiction. There are rules to the same effect in British Columbia. The appellant took no steps to appear or to defend the action. There was no clause in the mortgages by which he agreed to submit to the jurisdiction of the Alberta court, and he did not attorn to its jurisdiction. The respondents obtained judgments nisi in the foreclosure actions. At the expiry of the redemption period, they obtained Rice Orders against the appellant. Under these orders, a judicial sale of the mortgaged properties to the respondents took place and judgments were entered against the appellant for the deficiencies between the value of the property and the amount owing on the mortgages. The respondents then each commenced a separate action in the British Columbia Supreme Court to enforce the Alberta judgments for the deficiencies. Judgment was g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld, at p. 527, that: . . . where the parties have agreed that something is to be done in this country, some part of the subject-matter of the contract is to be executed within this country, it is a sort of consent of the parties that wherever they may be living, or wherever the contract may have been made, that question may be litigated in this country. In Seaton J.A.'s view, this reasoning led logically to the assumption of jurisdiction, and reciprocally to the recognition by other courts. In this context, he cited Travers v. Holley, [1953] 2 All E.R. 794, where the English Court of Appeal had recognized a divorce decree granted in New South Wales on the ground that the English courts would in similar circumstances have exercised jurisdiction in the same way. If that reasoning were to be applied to courts of other provinces, judgments of other provinces should be enforced if the British Columbia courts exercise similar jurisdiction. Seaton J.A. acknowledged, however, that this view has not prevailed in judgments in personam in which class the judgments concerned here fell. However, he noted that the leading case on the point, Emanuel v. Symon, [1908] 1 K.B. 302 (C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the defendant appellant was outside Alberta at the time the actions were brought and judgment given, the Alberta rules for service outside the jurisdiction permitted him to be served in British Columbia. These rules are similar to those in other provinces, and specifically British Columbia. The validity of such rules does not appear to have been subjected to much questioning, a matter to which I shall, however, return. The issue, then, as already mentioned, is simply whether a personal judgment validly given in Alberta against an absent defendant may be enforced in British Columbia where he now resides. The English Background The law on the matter has remained remarkably constant for many years. It originated in England during the 19th century and, while it has been subjected to considerable refinement, its general structure has not substantially changed. The two cases most commonly relied on, Singh v. Rajah of Faridkote, [1894] A.C. 670 (P.C.), and Emanuel v. Symon, supra, date from the turn of the century. I shall confine myself to a discussion of the latter because it is the more frequently cited. In Symon, the defendant, while residing and carrying on busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case was ultimately explained on the basis that the defendant there was the holder of a public office in the place where the judgment was obtained and so constructively present there at the time of the judgment; see Symon, supra, at pp. 310-11. One might also have been permitted to speculate that one who enters into a contract while residing in a given jurisdiction consents to the jurisdiction of the courts there as Blackburn J. seemed prepared to do in Schibsby v. Westenholz (1870), L.R. 6 Q.B. 155, at p. 161, but this possibility too was scotched in Symon; see per Lord Alverstone C.J., at p. 308. Until the 1950s, then, the various circumstances identified by Buckley L.J. in Symon exhausted the possible cases in which a foreign judgment would be recognized in England. A change came, however, with the case of Travers v. Holley, supra, in 1953. There the English Court of Appeal had to consider whether they should recognize a divorce granted to a wife in New South Wales pursuant to a statute giving the New South Wales court jurisdiction to grant a divorce to a wife who was domiciled there at the time she was deserted by her husband, even though her husband had later acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment properly obtained in the Manx courts for a tort committed there whether the defendant voluntarily submitted to the jurisdiction or not, just as we would expect the Manx courts in a converse case to recognise a judgment obtained in our courts against a resident in the Isle of Man on his being properly served out of our jurisdiction for a tort committed here. [Emphasis added.] This possibility of further extending the categories in the Symon case was, however, firmly rejected in In re Trepca Mines Ltd., [1960] 1 W.L.R. 1273 (C.A.), where the court stated that Travers v. Holley was limited to a judgment in rem in a matter affecting marital status, and that it was unwilling to take the step suggested by Denning L.J. in the Dulles case. In short, the English authorities afford no basis for extending the approach in Travers v. Holley to a personal obligation such as that existing in the present case; see also Schemmer v. Property Resources Ltd., [1975] 1 Ch. 273. Before concluding this review of the English background, I should make reference to Indyka v. Indyka, [1969] 1 A.C. 33, in which the House of Lords found another technique for going beyond the strict categories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 192 (Ont. C.A.); Eggleton v. Broadway Agencies Ltd. (1981), 32 A.R. 61 (Alta. Q.B.); Weiner v. Singh (1981), 22 C.P.C. 230 (B.C. Co. Ct.); Re Whalen and Neal (1982), 31 C.P.C. 1 (N.B.Q.B.); North American Specialty Pipe Ltd. v. Magnum Sales Ltd., B.C.S.C., No. C841410, February 11, 1985 (summarized in (1985), 31 A.C.W.S. (2d) 320). Essentially, then, recognition by the courts of one province of a personal judgment against a defendant given in another province is dependant on the defendant's presence at the time of the action in the province where the judgment was given, unless the defendant in some way submits to the jurisdiction of the court giving the judgment. Soon after the decision in Travers v. Holley, supra, however, Professor Kennedy began to argue for the extension of the reciprocity approach adopted in that case to personal actions, at least in the case of judgments given in other provinces; see `Reciprocity' in the Recognition of Foreign Judgments: The Implications of Travers v. Holley , op. cit. An unreported British Columbia case, Archambault v. Solloway, B.C.S.C., April 18, 1956, prompted a further article from his pen: Recognition of Judgments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been opened up on the merits had the defendant chosen to do so, but he deliberately chose not to do so, preferring to rest his defence on the grounds of no presence and no submission . In those circumstances, there being as between Alberta and British Columbia reciprocity of jurisdiction, it was appropriate to apply the principle that our courts should recognize a jurisdiction which they themselves claim. The British Columbia Court of Appeal in the present case has now added its support to the call that reason dictates the evolution of the common law to permit the enforcement of in personam judgments given in sister-provinces. The appellant in this case, of course, relies on the law as stated in Symon, supra. The respondents naturally rely on the Court of Appeal's judgment and particularly the reciprocity approach. Before going on, I should observe that academic writers have now engaged the issue on a broader plane than reciprocity; see Robert J. Sharpe, Interprovincial Product Liability Litigation (1982); John Swan, Recognition and Enforcement of Foreign Judgments: A Statement of Principle , in Springman and Gertner, op. cit., at pp. 691 et seq.; John Swa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled there, will be recognized by the courts of other states. In certain circumstances, as well, our courts will enforce personal judgments given in other states. Thus, we saw, our courts will enforce an action for breach of contract given by the courts of another country if the defendant was present there at the time of the action or has agreed to the foreign court's exercise of jurisdiction. This, it was thought, was in conformity with the requirements of comity, the informing principle of private international law, which has been stated to be the deference and respect due by other states to the actions of a state legitimately taken within its territory. Since the state where the judgment was given had power over the litigants, the judgments of its courts should be respected. But a state was under no obligation to enforce judgments it deemed to fall outside the jurisdiction of the foreign court. In particular, the English courts refused to enforce judgments on contracts, wherever made, unless the defendant was within the jurisdiction of the foreign court at the time of the action or had submitted to its jurisdiction. And this was so, we saw, even of actions that coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... highly integrated world economy, politically organized in a diversity of more or less autonomous legal systems, the function of conflict rules is to select, interpret and apply in each case the particular local law that will best promote suitable conditions of interstate and international commerce, or, in other words, to mediate in the questions arising from such commerce in the application of the local laws ; see Hessel E. Yntema, The Objectives of Private International Law (1957), 35 Can. Bar Rev. 721, at p. 741. As is evident throughout his article, what must underlie a modern system of private international law are principles of order and fairness, principles that ensure security of transactions with justice. This formulation suggests that the content of comity must be adjusted in the light of a changing world order. The approach adopted by the English courts in the 19th century may well have seemed suitable to Great Britain's situation at the time. One can understand the difficulty in which a defendant in England would find himself in defending an action initiated in a far corner of the world in the then state of travel and communications. The Symon case, supra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mulroney and Coates (1986), 27 D.L.R. (4th) 118 (Ont. H.C.), at pp. 128-29; Touche Ross Ltd. v. Sorrel Resources Ltd. (1987), 11 B.C.L.R. (2d) 184 (S.C.), at p. 189; Roglass Consultants Inc. v. Kennedy, Lock (1984), 65 B.C.L.R. 393 (C.A.), at p. 394. In any event, the English rules seem to me to fly in the face of the obvious intention of the Constitution to create a single country. This presupposes a basic goal of stability and unity where many aspects of life are not confined to one jurisdiction. A common citizenship ensured the mobility of Canadians across provincial lines, a position reinforced today by s. 6 of the Charter ; see Black v. Law Society of Alberta, [1989] 1 S.C.R. 591. In particular, significant steps were taken to foster economic integration. One of the central features of the constitutional arrangements incorporated in the Constitution Act, 1867 was the creation of a common market. Barriers to interprovincial trade were removed by s. 121 . Generally trade and commerce between the provinces was seen to be a matter of concern to the country as a whole; see Constitution Act, 1867, s. 91(2) . The Peace, Order and Good Government clause gives the federal P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Peace, Order and Good Government clause, empowered to legislate respecting the recognition and enforcement of judgments throughout Canada; see, for example, Black, op. cit., and Hogg, op. cit. The present case was not, however, argued on that basis, and I need not go that far. For present purposes, it is sufficient to say that, in my view, the application of the underlying principles of comity and private international law must be adapted to the situations where they are applied, and that in a federation this implies a fuller and more generous acceptance of the judgments of the courts of other constituent units of the federation. In short, the rules of comity or private international law as they apply between the provinces must be shaped to conform to the federal structure of the Constitution. This Court has, in other areas of the law having extraterritorial implications, recognized the need for adapting the law to the exigencies of a federation. Thus in Aetna Financial Services Ltd. v. Feigelman, supra, the Court set aside a court order, a Mareva injunction, issued against a federally incorporated company with its head office in Montr al and offices in Toronto, enjoini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting out of far-away havens, usually on the fringe of legally organized commerce. In the Canadian federal system, the appellant is not a foreigner, nor even a non-resident in the ordinary sense of the word. It is capable of `residing' throughout Canada and did so in Manitoba. It is subject to execution under any Manitoba judgment in every part of Canada. There was no clandestine transfer of assets designed to defraud the legal process of the courts of Manitoba. There is no evidence that this federal entity has arranged its affairs so as to defraud Manitoba creditors. The terminology and trappings of Mareva must be examined in the federal setting. In some ways, `jurisdiction' extends to the national boundaries, or, in any case, beyond the provincial boundary of Manitoba. For other purposes, jurisdiction no doubt can be confined to the reach of the writ of the Manitoba courts. [Emphasis added.] A similar approach should, in my view, be adopted in relation to the recognition and enforcement of judgments within Canada. As I see it, the courts in one province should give full faith and credit, to use the language of the United States Constitution, to the judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of judgments in personam where the defendant was within the jurisdiction at the time of the action or when he submitted to its judgment whether by agreement or attornment. In the first case, the court had jurisdiction over the person, and in the second case by virtue of the agreement. No injustice results. The difficulty, of course, arises where, as here, the defendant was outside the jurisdiction of that court and he was served ex juris. To what extent may a court of a province properly exercise jurisdiction over a defendant in another province? The rules for service ex juris in all the provinces are broad, in some provinces, Nova Scotia and Prince Edward Island, very broad indeed. It is clear, however, that if the courts of one province are to be expected to give effect to judgments given in another province, there must be some limits to the exercise of jurisdiction against persons outside the province. It will be obvious from the manner in which I approach the problem that I do not see the reciprocity approach as providing an answer to the difficulty regarding in personam judgments given in other provinces, whatever utility it may have on the international ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, was not an easy question. One theory was that it was situated where the wrongful action took place (there Ontario). Another would have it that it is the place where the damage occurred. But as Dickson J. noted, at p. 398: Logically, it would seem that if a tort is to be divided and one part occurs in state A and another in state B, the tort could reasonably for jurisdictional purposes be said to have occurred in both states or, on a more restrictive approach, in neither state. It is difficult to understand how it can properly be said to have occurred only in state A. At the end of the day, he rejected any rigid or mechanical theory for determining the situs of the tort. Rather, he adopted a more flexible, qualitative and quantitative test , posing the question, as had some English cases there cited, in terms of whether it was inherently reasonable for the action to be brought in a particular jurisdiction, or whether, to adopt another expression, there was a real and substantial connection between the jurisdiction and the wrongdoing. Dickson J. thus summarized his view, at pp. 408-9: Generally speaking, in determining where a tort has been committed, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his approach from the normal distributive channels of products and, in particular, the interprovincial flow of commerce . If, as I stated, it is reasonable to support the exercise of jurisdiction in one province, it would seem equally reasonable that the judgment be recognized in other provinces. This is supported by the statement of Dickson J. in Zingre, cited supra, that comity is based on the common interest of both the jurisdiction giving judgment and the recognizing jurisdiction. Indeed, it is in the interest of the whole country, an interest recognized in the Constitution itself. The above rationale is not, as I see it, limited to torts. It is interesting to observe the close parallel in the reasoning in Moran with that adopted by this Court in dealing with jurisdiction for the purposes of the criminal law; see Libman, supra. In particular, barring express or implied agreement, the reasoning in Moran is obviously relevant to contracts; indeed, the same activity can often give rise to an action for breach of contract and one in negligence; see Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147. As Professor Sharpe observes in Interprovincial Product Liability Litigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng substantial connection with the jurisdiction where the action took place is supported by the constitutional restriction of legislative power in the province . As Gu rin J. observed in Dupont v. Taronga Holdings Ltd. (1986), 49 D.L.R. (4th) 335 (Que. Sup. Ct.), at p. 339, [TRANSLATION] In the case of service outside of the issuing province, service ex juris must measure up to constitutional rules. The restriction to the province would certainly require at least minimal contact with the province, and there is authority for the view that the contact required by the Constitution for the purposes of territoriality is the same as required by the rule of private international law between sister-provinces. That was the view taken by Gu rin J. in Taronga where, at p. 340, he cites Professor Hogg, op. cit., at p. 278, as follows: In Moran v. Pyle, Dickson J. emphasized that the sole issue was whether Saskatchewan's rules regarding jurisdiction based on service ex juris had been complied with. He did not consider whether there were constitutional limits on the jurisdiction which could be conferred by the Saskatchewan Legislature on the Saskatchewan courts. But the rule whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, properly be made to the grounds there stated. In particular, counsel drew attention to s. 31(6) and especially para. (b) thereof. Section 31(6) reads as follows: 31. . . . (6) No order for registration shall be made if the court to which application for registration is made is satisfied that (a) the original court acted either (i) without jurisdiction under the conflict of laws rules of the court to which application is made; or (b)the judgment debtor, being a person who was neither carrying on business nor ordinarily resident in the state of the original court, did not voluntarily appear or otherwise submit during the proceedings to the jurisdiction of that court; There is a short answer to this argument. The Reciprocal Enforcement of Judgments Acts in the various provinces were never intended to alter the rules of private international law. They simply provided for the registration of judgments as a more convenient procedure than was formerly available, i.e. by bringing an action to enforce a judgment given in another province; see First City Capital Ltd. v. Winchester Computer Corp., [1987] 6 W.W.R. 212 (Sask. C.A.). This is in fact made ..... 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