Recognition and Enforcement of Foreign Judgments by Canadian Courts

Introduction
Prior to 1990, the law applying to the enforcement of foreign judgments by Canadian courts could be described as trite. Unless a Canadian defendant voluntarily submitted ('attorned') to the jurisdiction of a foreign tribunal, or was present before it, such a defendant could safely ignore the outcome of the foreign proceeding. The plaintiff had to sue the Canadian defendant anew in a Canadian court in order to merit a response from the Canadian courts. This refusal to recognize rules of comity extended to such extremes that internal, provincial jurisdictions were treated as being equally impenetrable as foreign ones; hence, a judgment obtained in British Columbia was treated no differently in an Ontario court than one obtained in India.

In 1990, the Supreme Court of Canada embraced the concepts of international comity in the case of Morguard Investments Ltd. v. de Savoye (hereinafter Morguard). Although Morguard was first and foremost a constitutional decision dealing with the interprovincial enforcement of judgments within the Canadian federal state, the Court chose to consider the application of its rationale to foreign judgments. Justice La Forest, speaking for a unanimous court, emphasized the need for Canadian courts to recognize notions of international comity in deference to the requirements of modern international commerce:

"The business community operates in a world economy and we correctly speak of a world community even in the face of decentralized political and legal power. Accommodating the flow of wealth, skills and people across state lines has now become imperative. Under these circumstances, our approach to the recognition and enforcement of foreign judgments would appear ripe for reappraisal. Certainly, other countries, notably the United States and members of the European Economic Community, have adopted more generous rules for the recognition and enforcement of foreign judgments to the general advantage of litigants."

Morguard declared that the rules of Canadian private international law would henceforth be governed by the concept of comity. Comity was defined by the Court as the systematic accommodation of foreign laws within Canada in the interests of furthering the practical goal of ensuring an environment in which there was an orderly, fair and secure system for international commerce.

Morguard dispensed with the necessity of showing that the defendant voluntarily attorned to the originating jurisdiction as a precondition to initiating enforcement proceedings in Canada. Rather, all the foreign litigant has to demonstrate is that:

• the adjudicating court had properly exercised jurisdiction, according to its own rules; and
• there is a 'real and substantial connection' between the originating jurisdiction and the determinative features of the lis or the defendant as a party, such that the adjudicating court can establish:
  • a nexus between the subject matter of the action and the territory where the action is brought;
  • a connection between the damages suffered and the jurisdiction;
  • a substantial connection between the defendant and the forum; and
  • sufficient contacts that the originating jurisdiction may have had to the defendant or the subject matter of the suit.

This test was further refined by Justice La Forest in the subsequent case of Hunt v. T & N plc., where he stated that the right way to assess the 'reasonableness' of a foreign court's assumption of jurisdiction was not a mechanical accounting of connections between a case and a territory, but a decision guided by "the requirements of order and fairness.

Although Morguard was a case involving the enforcement of interprovincial judgments, the courts have almost universally applied Morguard in enforcing true 'foreign' judgments. For foreign litigants, Morguard has simplified the enforcement procedure. Provided that the adjudicating court properly exercises its jurisdiction according to its own rules, there is a 'substantial connection' between the subject matter of the litigation and the jurisdiction, and the defendant fails to raise a recognized defence, the foreign judgment ought to be enforced in Canada.

The practical effect of the new rule for Canadian individuals or corporations who receive notice that they are being sued outside Canada is that they almost always advised to defend the action, provided they have the financial capacity to do so. As long as some tenuous connection could arguably be said to exist between the litigation and the jurisdiction where the suit was brought, it would be too great a risk to allow the action to go undefended.

In the aftermath of Morguard, there has arisen a great deal of uncertainty in Canada regarding the present status of the rules for the enforcement of foreign judgments. Within Canada, commentators have expressed concern that the courts may now be too eager to facilitate the enforcement of foreign judgments. In particular, problems are posed by judgments rendered in foreign judicial systems which do not follow Canadian standards of procedural fairness, or that do not provide Canadian-style due process, or which allow for compensatory or punitive damage awards that are unusually large by Canadian standards

This paper will endeavour to canvass the manner in which the Morguard decision has been applied to the enforcement of international judgments, the concerns that arise under such application, and current proposals for legislation intended to provide a more predictable regime of enforcement of foreign judgments.

International Application of Morguard to Date
Judgments Granted by Legal Systems Very Different from that of Canada Judges in Canada have not yet been forced to answer some of the difficult questions that arise from Morguard. The foreign judgments that have come before Canadian courts for enforcement since 1990 have, for the most part, been judgments granted in either the United States or the United Kingdom. The courts have yet to be faced with the prospect of enforcing a judgment granted in an action that a Canadian defendant declined to defend, where the legal system granting the judgment was significantly different from the Canadian system, and where the cost and difficulty of instructing counsel to defend the action would have been exacerbated by distance, complexity and language barriers.

At some point, the 'alienness' of the foreign legal system will be factor in determining whether the judgments it issues will be enforced. The disadvantage of the Morguard and Hunt decisions is that they leave the question of enforceability to be decided on a case-by-case evaluation of the myriad factors that must comprise 'order and fairness.” Until the courts begin to test judgments originating from non-Anglo nations under Morguard principles, it cannot be said with any degree of certainty what bearing the geographical placement of a foreign court, the language and traditions of a foreign legal system, the organization of a foreign Bar and the content of relevant foreign law will have on the perceived justice of holding a Canadian defendant liable to such foreign default judgments.

Quantum of the Judgment
No Canadian court would dispute the proposition that American judicial pronouncements emanate from a comparable legal system entitled to comity between nations. What is of concern to Canadians is that American courts apply very different standards in respect to awarding damages in civil cases, particularly tort claims, which a Canadian defendant would simply not be subjected to if the same suit were commenced on the merits in a Canadian jurisdiction. In personal injury cases in Canada, non-pecuniary damages are subject to a court-imposed maximum of $250,000, to be awarded only in the most extreme cases of personal injury. American judgments are not subject to such limits. In Stoddard v. Accurpress Ltd., a worker in Connecticut was injured while using a machine at his workplace, and he sued the British Columbia firm that had manufactured the machine for negligence in the courts of Connecticut. The manufacturer chose not to defend the action in Connecticut, and the plaintiff received a default judgment for US$1.12 million. Approximately US$1 million of that sum was for non-pecuniary damages including pain and suffering. The judgment was held enforceable in British Columbia. In the course of a motion to extend time for filing an appeal of that decision in British Columbia, the plaintiff argued that the damages were so out of line with Canadian standards that they should be denied enforcement on grounds of public policy. The Court of Appeal indicated that it was prepared to give serious consideration to that argument. The case was ultimately settled and accordingly we have no further words of wisdom from the Court of Appeal on this issue. In the unreported decision of Old North State Brewing v. Newland Services Inc, the British Columbia Court of Appeal recognized a North Carolina judgment awarding treble damages and found that the decision was not contrary to Canadian conceptions of public policy, essential justice and morality.

Hardship to the Canadian Defendant
No reported case has yet dealt with a Canadian plaintiff arguing that he or she failed to defend on the merits in a foreign jurisdiction on the basis of financial hardship. There is however a very recent Ontario court decision in which the court refused to stay proceedings commenced in Ontario against a Danish company who had initiated a prior claim against the Canadian defendant in Denmark. In rendering its decision, the court considered the fact that "the defendant is a small company and its entire management team would have to attend in Denmark at any trial which would cause untold hardship and expense to its business.' This decision seem to indicate that the courts are prepared to consider the individual circumstances of each defendant, at least in determining the appropriate forum in which to litigate.

This issue presents serious jurisprudential difficulties. The underlying policy of the Morguard test is that Canadian courts should respect judgments issued by foreign courts, provided that those foreign courts acted reasonably in assuming jurisdiction over the matter. The court's examination of factors giving rise to a 'real and substantial connection' between the litigation and the foreign jurisdiction is intended to assess the reasonability of such assumption of jurisdiction. If considerations of 'order and fairness' are adjudged to include factors personal to the individual plaintiff, such as financial hardship, it calls into question the very basis upon which enforceable judgments may be created by litigating outside of Canada. Will foreign plaintiffs need to inquire into the financial status of a Canadian defendant before they can hazard a guess as to whether it will be worth their time and expense to litigate in their native jurisdiction? The predictability necessary for 'accommodating the flow of wealth, skills and people across state lines' will be utterly lost if the already numerous considerations subsumed in the concept of 'real and substantial connection' are multiplied by the creation of further concepts relevant to enforcement.

Canadian Defendants in Business in Foreign Jurisdictions
It has been held that a single transaction of a Canadian borrowing or purchasing on credit from a foreign creditor may be sufficient to justify enforcement of a judgment obtained outside Canada by that foreign creditor. However, the situation changes where a foreign business actively encourages Canadians, by advertising or otherwise, to do business with it. Such persons may be held to have chosen to do business in a Canadian jurisdiction, and to be therefore obligated to seek redress in such jurisdiction.

Canadians who actively engage in international business will generally be expected to subject themselves to the law of the countries where they are doing business. An extreme case of this occurred in United States of America v. Ivey. There, a statute that effectively stripped the protection of the corporate veil from directors and shareholders of corporations in regard to certain environmental offences was held to permit enforcement of a Michigan judgment granted against a Michigan corporation, against the Canadian residents who were the controlling owners of that company.

Where a Canadian is not actively involved in pursuing business in a foreign jurisdiction, but merely sells products or services from Canada to foreign buyers, many variables will come into play in determining whether a judgment is enforceable in Canada. Where the Canadian defendant dealt directly with the foreign buyer, a real and substantial connection between the litigation and the foreign jurisdiction will usually be found, but it may depend on the degree to which the contract was formed and performed in Canada. For example, there is a case in which an Ohio car dealer approached a British Columbia car dealer, in British Columbia and offered to purchase certain cars from it. The parties entered into a contract in British Columbia, and at least one of the cars was delivered to the Ohio dealer in Ontario. In an action for the enforcement of a judgment obtained in Ohio by the Ohio car dealer for breach of the contract, it was held that there was an insufficient connection between the litigation and Ohio, and the British Columbia court accordingly refused to enforce the default judgment awarded in Ohio.

Finality of the Judgment
To be enforceable in Canada, a foreign judgment must be final and res judicata in the originating jurisdiction. The court that granted the judgment must have no further power to rescind or vary its decision. It is important to note, however, that this only applies to the court that originally granted the judgment; the enforceability of a foreign judgment is not affected by the fact that a higher court may have the power to rescind or vary the judgment of the originating court on appeal.

If a foreign judgment is under appeal in the originating jurisdiction, a Canadian court will not refuse to enforce that foreign judgment. Instead, it will often choose to stay its decision regarding enforceability, pending the decision of the foreign appellate court. From a practical point of view, it makes sense to wait until all avenues of appeal have been exhausted before seeking to enforce the judgment in Canada, unless you have reason to believe that the Canadian defendant is dissipating assets or making itself judgment proof.

Choice of Forum Clauses
Many contracts include a standard clause in which the parties agree that a dispute between them will be brought to arbitration, or subject them to the exclusive jurisdiction of a given court. Where a plaintiff brings an action in a jurisdiction that violates such a clause and receives a judgment, will that judgment be enforced in Canada? In the case of Khalij Commercial Bank Ltd. v. Woods, the plaintiff, a commercial bank incorporated in the United Arab Emirates, sued in Ontario to enforce a banking debt pursuant to an instrument which provided that the agreement was to be interpreted according to the laws of Dubai and that the civil court of Dubai was to have jurisdiction. At the trial of the action, the defendant disputed the jurisdiction and contended that the debt should not be enforced. The Ontario court found that it had jurisdiction notwithstanding the agreement, stating that such clauses are interpreted to confer concurrent but not exclusive jurisdiction on the foreign court. However, in interpreting the contract, the Ontario court was required to apply the law of Dubai.

Defences to the Enforcement of Foreign Judgments
Where it is established that the foreign court has jurisdiction, the only recognized defences to an action for enforcement in Ontario are as follows:

i. the judgment was obtained by fraud;
ii. the judgment was obtained in contravention to principles of natural justice;
iii. the enforcement of the judgment would be contrary to the public policy of Ontario;
iv. the defendant was not a party to the foreign suit.

Paragraphs (i) and (ii) are self-explanatory.

Denial of Natural Justice
When defendants argue that a foreign judgment should not be enforced because of a denial of natural justice, they usually do so on the basis that the defendant received inadequate notice, or no notice, of the foreign proceedings. The question to be asked is whether substantial injustice has been caused by a lack of notice, including consideration of whether the defendant had a remedy in the foreign court.

Public Policy
The defence that recognition of a foreign judgment is contrary to public policy has to date been narrowly defined, turning on the question of whether the foreign law is contrary to 'essential morality.' If foreign law is to be refused any effect on public policy grounds, it must violate some fundamental principle of justice, some prevalent conception of good morals, or some deep-rooted tradition of the forum. This is especially true when the foreign law or judgment is invoked to defer a claim or a defence available under the foreign law. To do so amounts to denying the plaintiff or defendant access to the local courts.

In the wake of Morguard, the possibility exists that the courts will expand the ambit of this defence in order to deal with 'hard cases' involving unfamiliar legal systems, financial hardship to the defendant, or very high awards of non-pecuniary damages. Should the 'public policy' defence be expanded to deal with such situations, the transparency and predictability necessary for the achievement of the goal of facilitating international commerce would be further obscured by the uncertain application of a vague doctrine.

Reopening the Merits
It is well established in Anglo-Canadian law that a foreign money judgment which is final and enforceable in Ontario is, subject to certain well-defined and narrow ground of impeachment, conclusive as to any matter thereby adjudicated. Such judgment cannot be impeached for any error of fact or law. If the judgment is wrong it will, subject to any appeal, nevertheless be enforced in an action brought in Ontario."

The only line of authority permitting a defendant to defend the case underlying a foreign judgment in a Canadian court is a line of cases from British Columbia, which have been expressly disavowed by other Canadian jurisdictions. This line of cases allows a defence to be made on the merits where the foreign judgment exhibits a 'manifest error' on its face.

The temptation to reopen a case on its merits will come in the inevitable case where a court finds that while it was reasonable for the plaintiff to bring suit in a foreign jurisdiction, it was equally reasonable for the particular defendant not to defend the action in that jurisdiction. Prior to Morguard, when the only basis for enforcing a foreign judgment was attornment to the jurisdiction or being served in that jurisdiction, the same questions of fairness did not arise. At present, the Canadian common law has devised no mechanism to cope with new arguments of fairness that may be raised by the enforcement of foreign judgments according to the Morguard decision.

Likewise, financial hardship and other 'hard cases' may put pressure on the traditional doctrine that an enforceable foreign judgment is conclusive on the merits.

The Special Case of Quebec
Quebec is a civil law jurisdiction that considers all decisions rendered outside the province foreign. Pursuant to section 3155 of the Civil Code of Quebec (the 'Civil Code'), a Quebec authority will declare a judgment rendered outside Quebec enforceable, except where:

• the foreign authority had no jurisdiction to render the judgment ; and
• in the other circumstances listed in that section.

Lack of Jurisdiction
It is interesting to note that section 3164 of the Civil Code, which came into force on January 1, 1994, acknowledges the jurisdiction of foreign authorities to render judgments enforceable in Quebec where the disputes giving rise to such judgments are substantially connected with the country that was seized of the case. The effect of the Morguard decision in this provision is easily recognizable.

A foreign authority's jurisdiction to grant judgment will not be recognized where Quebec law: (i) has granted exclusive jurisdiction to its authorities to hear the case; (ii) has granted exclusive jurisdiction to hear the case to a different foreign authority; or (iii) recognizes that exclusive jurisdiction to hear the case has been conferred to an arbitrator.

In personal actions of a patrimonial nature, the jurisdiction of a foreign authority to render judgment will only be recognized if:

• the defendant was domiciled in the country where the decision was rendered;
• the defendant had an establishment in the country where the decision was rendered and the dispute related to its activities in that country;
• a prejudice was suffered in the foreign country or from an injurious act which took place in that country;
• the obligations arising from a contract were to be performed in the foreign country;
• the parties have submitted to the foreign authority (but the renunciation by a consumer or a
• worker of the jurisdiction of the authority of his place of domicile may not be set up against him); or
• the defendant has recognized the jurisdiction of the foreign authority.

Other Circumstances
The foreign authority's competence will not be recognized if:

i. the decision is subject to ordinary remedy, or is not final or enforceable at the place where it was rendered ;
ii. the decision contravenes fundamental principles of procedure;

• a dispute between the same parties, based on the same facts and having the same
• object, has given rise to a judgment rendered or pending in Quebec, or has been
• decided in a third country and the judgment rendered in that third country meets the necessary conditions for recognition in Quebec;
• the outcome of the foreign decision rendering the judgment is manifestly
• inconsistent with public order as understood in international relations; or
• the judgment relates to tax matters, and the obligations imposed thereby result from
• Quebec taxation laws which are not recognized by the foreign jurisdiction granting that judgment.

Where the foreign judgment has been rendered by default, the plaintiff must prove that the act of procedure initiating the proceedings was correctly served on the defendant, in accordance with the law of the place where the judgment was rendered. However, if the defendant can establish either that he was unable to learn of the act of procedure which initiated the proceedings, or that he was not given sufficient time to offer a defence, the Quebec authority may refuse recognition or enforcement of the foreign judgment.

A Quebec authority will not refuse recognition or enforcement of a foreign judgment on the sole ground that the court which granted the judgment did so by applying the law differently than would be the case under private international law rules set by the Civil Code.

Procedure for Enforcement
An application for recognition and enforcement of a foreign decision may be made by way of a motion. It may also be made incidentally, even in defence, if it comes within the jurisdiction of the Quebec court.

A copy of the decision must be attached to the application with an attestation emanating from a competent pubic officer stating that the decision is no longer, in the country in which it was rendered, subject to ordinary remedy and that it is final or enforceable. If the decision was rendered by default, evidence that proceedings were duly served will also be attached. If the decision is in a language other than French or English, a translation authenticated in Quebec must accompany it.

Legislative Developments Arising from Morguard
n 1994, the Canadian Department of Justice initiated a study of legal reform in the area of the recognition and enforcement of foreign judgments. Consultation with various stakeholders brought to the attention of the Department of Justice many of the concerns expressed here. In particular, there was concern about the inability of Canadian defendants to predict when a foreign judgment would be enforced by a Canadian court. This, it was felt, put Canadian defendants at risk and at a commercial disadvantage for having to defend themselves abroad in costly and intimidating proceedings and of being exposed afterwards to a liberal regime of enforcement in Canada.

In response, it was requested that the Uniform Law Conference of Canada (the 'ULC') draft legislation to govern the recognition and enforcement of inter-provincial and foreign judgments. The ULC has created working groups that are in the process of preparing materials outlining the possible form and content of new uniform legislation in these areas.

Inter-Provincial Judgments
In 1992, the ULC adopted the Uniform Enforcement of Canadian Judgments Act and, in 1994, the Uniform Court Jurisdiction and Proceedings Transfer Act. These two statutes are applicable only to the enforcement of inter-provincial judgments. The first is intended to harmonize the enforcement of judgments issued by the provinces throughout Canada. The second is intended to provide a set of rules by which the courts may determine whether or not they have jurisdiction to hear a case where some elements of the case may be extra-provincial. To this date, only Saskatchewan has adopted both statutes. British Columbia and Prince Edward Island have each adopted the Uniform Enforcement of Canadian Judgments Act.

The Uniform Enforcement of Canadian Judgments Act embodies the notion that 'full faith and credit' should be given to judgments of the courts of all provinces within the Canadian judicial system. Judgments rendered in any province of Canada are enforceable in British Columbia, New Brunswick, Prince Edward Island and Saskatchewan, even if the province from which such a judgment was issued has not itself enacted the Uniform Enforcement of Canadian Judgments Act.

In order for the Uniform Enforcement of Canadian Judgments Act to apply, the provincial judgment to be enforced must be definitive, must have been rendered by a superior court exercising judiciary functions in a civil matter (except for certain decisions made under the Criminal Code and enforceable as civil judgments), and must provide for the payment of a sum of money. Such inter-provincial judgments are enforceable once registered in the province where enforcement is sought, as if they originated from that jurisdiction. Judgments for maintenance orders are excluded from this Act. They are dealt with under certain specific statutes that will not be discussed here.

The Uniform Enforcement of Canadian Judgments Act has the effect of repealing the common law approach whereby issues such as the original court's jurisdiction, the merits of the decision and the process for obtaining judgment, such as fraud and natural justice, can be raised. It limits the situations in which inter-provincial judgments will not be enforced to proceedings undertaken in the originating jurisdiction to restrict or reject the effect of the judgment, or where a judgment would be contrary to public order in the jurisdiction where enforcement is sought.

Inter-provincial judgments bear interest from the moment they are registered. The costs and disbursements related to the registration are recoverable in the enforcing jurisdiction.

In 1997, the Uniform Enforcement of Canadian Decrees Act was adopted by the ULC to address the enforcement of non-monetary inter-provincial judgments. This Act has been combined with the Uniform Enforcement of Canadian Judgments Act, and the two acts are now collectively known as the Uniform Enforcement of Canadian Judgments and Decrees Act.

In provinces where the above statutes have not been enacted, two possibilities arise; i) the principles of Morguard may be applied; or ii) less accommodating provincial legislation, such as the Reciprocal Enforcement of Judgments Act (R.S.O. 1990, c. R-5), may be applied.

Morguard
If the Morguard decision is now the constitutional rule in Canada, then it has the effect of amending, if not repealing, certain provisions of the reciprocal acts in Canada and its principles are the ones applicable between the provinces.

Reciprocal Acts
Unlike the Uniform Enforcement of Canadian Judgments and Decrees Act, the Reciprocal Enforcement of Judgments Act (Ontario) is based on the concept of reciprocity. All provinces, except Quebec, have adopted a similar statute. Judgments from Quebec will therefore be treated as foreign judgments by the other provinces.

The Reciprocal Enforcement of Judgments Act (Ontario) provides a registration procedure for inter-provincial judgments of reciprocating provinces. This Act provides that a court may decline to register an inter-provincial judgment where it finds that: (i) there was a lack of jurisdiction or due process; (ii) the judgment was obtained by fraud, (iii) an appeal or the right to appeal exists in the originating jurisdiction; (iv) the judgment offends public order in the jurisdiction of enforcement; and (v) a defence might have existed if action had been taken in the jurisdiction of enforcement.

As already mentioned, Quebec treats all judgments originating from outside the province, whether they originate from another province or another country, as foreign judgments, and its judgments receive the same treatment in the other provinces.

Other Statutes
The ULC proposed the Uniform International Commercial Arbitration Act which adopts the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Model Law on International Commercial Arbitration. It has now been implemented in every jurisdiction in Canada.

Foreign Judgments
At its last meeting in August 1998, the ULC adopted a resolution resolving that a working group should prepare a draft Uniform Enforcement of Foreign Judgments Act and commentaries for consideration at the August 1999 Conference. It is intended that this Act deal with both monetary and non-monetary judgments. It is doubtful that this Act will propose that truly foreign judgments be accorded the same recognition as that proposed for inter-provincial decisions in the Uniform Enforcement of Canadian Judgments and Decrees Act. The working group was instructed to report back in August of 1999 with draft legislation for those cases involving unfamiliar legal systems and financial hardship on the defendant. This is perhaps a signal that the ULC sees potential problems with the recognition of judgments granted in jurisdictions far from Canada, where the cost of defending and the unfamiliarity of legal systems may complicate the issue of recognition of foreign judgments. It remains to be seen what processes the working group will propose to deal with these areas of uncertainty left behind in the wake of the Morguard decision.

A Uniform Enforcement of Judgments Convention Act was adopted in 1997 which for the time being provides for the adoption by each province of The Convention Between Canada and France on the Recognition and Enforcement in Civil and Commercial matters and on Mutual Legal Assistance in Maintenance.

Quebec has adopted the Act to Secure the Carrying Out of the Entente between France and Quebec respecting Mutual Aid in Judicial Matters (R.S.Q., c. A-20.1), which addresses technical issues such as the delivery of proceedings and judicial aid. This Act addresses the recognition and enforcement of French judgments only in a limited sense, in that deals with the status and capacity of persons, and particularly it may affect the enforcement of French judgments dealing with the custody of children and family support obligations.

Special Acts
Ontario has enacted one particular statute that deals with the recognition of judgments issued by the United Kingdom, entitled the Reciprocal Enforcement of Judgments (U.K.) Act (R.S.O. 1990, c. R-6). This Act implements the Convention between Canada and the United Kingdom of Great Britain and Northern Ireland Providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters, and provides for a registration procedure for British judgments. However, the Act and the Convention do not make enforcement of British judgments automatic, as they provide a list of reasons for which a court may refuse to register a judgment. The Convention is now part of the legislation of all Canadian provinces, including Quebec.

Ontario's Rules of Civil Procedure also provide that a foreign defendant will not be deemed to have attorned to Ontario's jurisdiction by entering a motion to dismiss the action based on lack of jurisdiction. Rules 17.06 (1) and (4) grant a party the right to assert certain defences without implicitly submitting to the court's jurisdiction. 'Rule 17.06(4)... embodies the Canadian common law position respecting attornment to jurisdiction. It provides for circumstances in which a foreign litigant can appear and protest the jurisdiction of our provincial court'.

Lawyers' Fees, Court Costs and the Calculation of Interest
Actions commenced in Canada for the enforcement of foreign judgments are no different than any other action when it comes to lawyers' fees, court costs, and the calculation of interest.

If the foreign plaintiff is successful in obtaining an order enforcing the foreign judgment, he or she will be entitled to costs fixed or assessed by the court granting the judgment pursuant to a tariff set by a provincial statute. In Ontario, generally speaking, the costs awarded by a court represent no more than one-half to two-thirds of the legal fees actually incurred by the party.

In respect to the calculation of interest, pre-judgment interest runs from the date the statement of claim is issued in Canada to the date of judgment, and post-judgment interest runs from the date of the judgment until the date of payment, at the rate specified in the statement of claim, or alternatively, in accordance with the interest rate prescribed by a provincial statute.

Prospects
The immediate post-Morguard era of enforcing foreign judgments has put Canadian defendants into varying degrees of shock and dismay. As a result, the Canadian Department of Justice initiated a study of legal reform in respect to the area of the recognition and enforcement of foreign judgments. The Uniform Law Conference is poised to present a draft Uniform Enforcement of Foreign Judgments Act and commentaries for consideration at their August 1999 conference. Since the working group was instructed to deal expressly with unfamiliar legal systems and financial hardship on the Canadian defendant, we will soon have an insight as to how Canadian courts may ultimately deal with judgments granted in jurisdictions having unfamiliar legal systems and cases involving financial hardship.

It is unknown at this time whether the legislation to be proposed will address the issue of a level playing field between jurisdictions. No international agreement on common standards of enforcement between the most affected jurisdictions has been proposed to date. The acceptance of such an international agreement, followed by domestic implementation and legislation, would guide courts in each participating state and would go a long way to 'accommodating the flow of wealth, skills and people across state lines' as envisioned by Morguard. Until the Canadian courts clarify some of the legacies of Morguard, foreign litigants would be well advised to consult with Canadian counsel prior to initiating any action against a Canadian defendant in a foreign jurisdiction, or defending an action in Canada.

The foregoing comments are of a general nature, and are not intended nor should they be used as a substitute for legal advice or opinions which can be rendered only when related to specific fact situations.

(1990), 76 D.L.R. (4th) 256; [1990] 3 S.C.R. 1077 (S.C.C.) [Morguard hereinafter cited to D.L.R.]. Id., at 270. Id., at 268-269. Id., at 273-273. (1993), 109 D.L.R. (4th) 16 (S.C.C.) [Hunt hereinafter cited to D.L.R.]. Id., at 42. The sole decision which has accepted the argument that Morguard is to be confined to Canadian judgments is the lower court decision in Evans Dodd v. Gambin Associates (1994), 17 O.R. (3d) 803 (Ont. Gen. Div.). For affirmation of the applicability of Morguard to foreign judgments generally, see Clarke v. LoBianco (1991), 84 D.L.R. (4th) 244 (B.C. S.C.) (California judgment); Minkler & Kirschbaum v. Sheppard (1991), 60 B.C.L.R. (2d) 360 (B.C. S.C.) (Arizona judgment). See also Fabrelle Wallcoverings & Textiles Ltd. v. North American Decorative Products Inc. (1992), 6 C.P.C. (3d) 170 (Ont. Gen. Div.) (English judgment), United States of America v. Ivey (1995), 130 D.L.R. (4th) 674 (Ont. Gen. Div.); affirmed 139 D.L.R. (4th) 570 (Ont. C.A.) (Michigan judgment), Moses v. Shore Boat Builders Ltd. (1994), 106 D.L.R. (4th) 654 (B.C. C.A.); leave to appeal refused 109 D.L.R. (4th) vii (S.C.C.) (Alaska judgment), Commercial Agency v. Jarvis (1996), 46 C.P.C. (3d) 223 (Alta. Q.B.) (Oregon judgment), American Savings & Loan Association v. Stechishin (1993), 14 Alta. L.R. (3d) 255 (Alta. Q.B.) (Hawaii judgment), Stoddard v. Accurpress Manufacturing Ltd., [1994] 7 W.W.R. 332 (B.C. S.C.) (Connecticut judgment), Federal Deposit Insurance Corp. v. Vanstone (1992), 88 D.L.R. (4th) 448 (B.C. S.C.) (Oklahoma judgment), McMickle v. Van Straaten (1992), 93 D.L.R. (4th) 74 (B.C. S.C.) (California judgment), First American Bank and Trust (Receiver of) v. Garay (1994), 36 C.P.C. (3d) 319 (Ont. Gen. Div.), affirmed 49 C.P.C. (3d) 326 (Ont. C.A.) (Florida judgment), Lolito v. Scantlebury (1995), 38 C.P.C. (3d) 105 (P.E.I. S.C.) (Maine judgment), Allen v. Lynch (1993), 21 C.P.C. (3d) 99 (P.E.I. S.C.) (Massachusetts judgment), Arrowmaster Inc. v. Unique Forming Ltd. (1993), 17 O.R. (3d) 407 (Ont. Gen. Div.) (Illinois judgment). Department of Justice (Canada), Report on a Study by the Federal Department of Justice Concerning Possible Law Reform on Recognition and Enforcement of Foreign Judgments in Canada (July 1995), at 3. ATL Industries Inc. v. Han Eol Ind. Co. and Bank of Montreal [1995], (Ont. Ct. Gen. Div.), Farley, J. (Korean judgment recognized pursuant to Morguard principles. The court stated that there was much evidence to indicated that the Korean court should be seen as a court of competent jurisdiction). See Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229, 83 D.L.R. (3d) 452 (S.C.C.). Supra, at note 7. [1993] B.C.J. No. 2573 (QL), Court file no. CA017775 (B.C. C.A.). Old North State Brewing v. Newlands Services Inc., 1998, (B.C.C.A) Fresh Mix Ltd. v. Bilminco A/S [1990] O.J. No. 756 (Ont. Ct. Gen. Div.), Hemiston, J. Supra, at note 2. Fabrelle Wallcoverings & Textiles Ltd. v. North American Decorative Products Inc. (1992), 6 C.P.C. (3d) 170 (Ont. Gen. Div.); American Savings & Loan Association v. Stechisin (1993), 14 Alta. L. R. (3d) 255 (Alta. Q.B.). First City Trust Co. v. Inuvik Automotive Wholesale Ltd., [1993] N.W.T.R. 273 (Northwest Terr. S.C.) (1995), 130 D.L.R. (4th) 674, 26 O.R. (3d) 533 (Ont. Gen. Div.). Fresh Mix Ltd. v. Bilminco A/S, supra, note 14. Moses v. Shore Boat Builders Ltd. (1994), 106 D.L.R. (4th) 654 (B.C. C.A.), leave to appeal refused (1994), 109 D.L.R. (4th) vii (S.C.C.). Mid-Ohio Imported Car Co. v. Tri-K Investments Ltd. (1993), 5 B.C.L.R. (3d) 271, 34 C.P.C. (3d) 369 (B.C. S.C.). The ruling was reversed by the Court of Appeal on the grounds that the defendant had willingly attorned to the jurisdiction of the Ohio court: (1996), 129 D.L.R. (4th) 181 (B.C. C.A.) Khalij Commercial Bank Ltd. v. Woods, (1985), 17 D.L.R. (4th) 358 (Ont. H.C.J.) North State Brewing v. Newlands Services Inc., supra, note 13. Fresh Mix Ltd. v. Bilminco A/S, supra, note 14. Boardwalk Regency Corp. v. Maalouf (1992), 88 D.L.R. (4th) 612 at 622 (Ont. C.A.). Old North State Brewing v. Newlands Services Inc., supra, note 13. Dicey & Morris op cit., pp. 460-463 Gacs v. Maierovitz (1968), 68 D.L.R. (2d) 345 (B.C. S.C.). Sections 3165(1) and (2) of the Civil Code of Quebec Sections 3165(1) and 3168 of the Civil Code of Quebec Section 3168 of the Civil Code of Quebec Section 3155 (2), (3), (4), (5) and (6) and 3162 of the Civil Code of Quebec Section 3156 of the Civil Code of Quebec Section 3157 and 3158 of the Civil Code of Quebec Section 785 of the Code of Civil Procedure of Quebec Section 786 of the Code of Civil Procedure of Quebec

Jaffe v. Miller, Metropolitan Toronto Condominium Corp. et al. (1993), 13 O.R. (3d) 745 at 764.

Intrelationships are almost always contractual in nature. In some other jurisdictions, such as some of the United States, the concept of at-will employment applies.This distinction potentially gives rise to issues when transferring employees from one jurisdiction to another or when a number of jurisdictions are involved in an employee relationship.

In the Canadian context, terms of an employment contract may be drawn from the actual terms expressly agreed upon by the parties, either orally or in writing, terms implied by law or by industry practice, as well as terms which have been formulated by the conduct of the parties throughout an employment relationship. This contractual framework gives rise to a variety of minimum rights and obligations, whether or not intentionally created by the parties.

For example, where an employment contract does not provide for a termination notice period, a Canadian court will find as an implied term of the contract that termination of the contract by either party occurs only on "reasonable notice." While the amount of reasonable notice required by an employee has been construed by the courts as being a relatively short period, reasonable notice on the part of an employer can result in a very substantial notice period. A number of factors can impact on the assessment of reasonable notice: the duration of employment; the duties and responsibilities of the employee; the employee's age; whether the employee's position was managerial; as well as the availability of alternative employment. At present, the maximum notice awarded in the common law provinces of Canada is generally 24 months.

In jurisdictions where the concept of at-will employment applies, there must be an express intention to create a contractual relationship. Without such an intention, there are no terms which will be implied into the employment relationship. Thus, for example, employees may be terminated without notice or payment of any kind. Such an employment arrangement in Canada is automatically void, because it is contrary to provincial employment standards legislation. It also invites the potentially costly application of the common law termination notice provisions. Accordingly, if multiple jurisdictions are relevant to an employment relationship, both employers and employees ought to obtain legal advice applicable in each jurisdiction to determine their respective rights and obligations.

If one jurisdiction's laws are determined to be more favourable than another, the choice of law governing a particular employment contract can be made a term of a written contract, even if the contract is not performed in that jurisdiction. However, a choice of foreign law will be enforceable in Canada only if the express notice of termination provided for in an employment contract is no less than the employee's minimum entitlement to such notice in the province where the contract is performed.

If no choice of law is provided for in an employment contract, an assessment will be required to determine which jurisdiction has the closest connection with the contract, in the event of a dispute. Such assessments can be time-consuming, costly and uncertain, especially if performance of the contract occurs in many jurisdictions, if the place of performance is different from an employee's place of residence or if an employee's salary is paid from a jurisdiction different from the jurisdiction in which the contract is performed. In such circumstances, it is far more desirable for the parties to contractually settle their respective rights and obligations under an appropriate choice of law at the outset of a new employment relationship.

The foregoing comments are of a general nature, and are not intended nor should they be used as a substitute for legal advice or opinions which can be rendered only when related to specific fact situations.

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