Roger Vanden Berghe NV v. Merinos Carpet Inc., 2023 ONSC 6728.
This case is one telling example of “what not to do” when faced with foreign litigation. Its lesson is: whatever notice of foreign proceedings you receive and however you receive it, find good counsel and respond promptly. In Canadian law, a foreign judgment is more often than not simply proof of a debt, and the grounds for avoiding enforcement are very narrow.
In Merinos Carpet, a Mississauga wholesaler regularly purchased from a Belgian supplier. The sales contracts stipulated that Belgian courts and Belgian law applied. When the supplier dissolved, their Liquidator brought a Belgian action to collect accounts.
When Merinos did not obtain Belgian counsel to appear at the proceeding, a default judgment was granted and the Liquidator applied to enforce it in Ontario.
Merinos raised a procedural defence that it had not been properly served under the Hague Service Convention. That failure rested with the Ontario Ministry of the Attorney General (“MAG”), neglecting to arrange for personal service as required under the Hague Convention. However, the Liquidator had also posted their summons by registered mail to Merinos’ old, vacant address, which was still listed in the business registry, and Canada Post returned a delivery confirmation. In short, Merinos had effective notice of the foreign judgment.
Defendants can avoid enforcement of a foreign judgment by showing it was fraudulently obtained, against public policy, or where the proceeding has denied them natural justice or fairness.
Merinos argued that MAG’s failure, and the lack of personal service denied natural justice. However, a defendant can avoid enforcement of a foreign judgment only “where the foreign proceedings were contrary to Canadian notions of fundamental justice and minimum standards of fairness.” Canadian notions of fundamental justice and minimum standards of fairness do not strictly require personal service, only that a defendant is given adequate notice of a claim against it and an opportunity to defend.[1]
Tellingly, perhaps, Merinos apparently lost their case for a critical gap in their evidence. They identified all of the defects, or reasons why they might not have received proper notice, but never clearly denied notice was received. The Ontario Court appreciated that notice had been received and the technical defence to enforcement failed.
[1] Beals, at para 65.