Morguard Investments Ltd. v. De Savoye
[1990] 3 S.C.R. 1077Supreme Court of Canada from British Columbia
Present: Dickson C.J. and La Forest, L’Heureux-Dubé,
Sopinka, Gonthier, Cory and McLachlin JJ.
FACTS: Appeal from a decision upholding a judgment granting an order of enforcement of an Alberta judgment in British Columbia. The appellant mortgaged certain lands situated in Alberta to the respondent. The appellant was then residing in Alberta. He then moved to British Columbia and had not resided or carried on business in Alberta since then. The mortgages fell into default and the respondent brought an action in Alberta. The appellant did not defend the action and there was no clause in the mortgage by which he agreed to submit to the jurisdiction of the Alberta court. The respondent obtained a foreclosure order and judgment for the deficiencies between the value of the property and the amount owing on the mortgage. The respondent then commenced action in British Columbia to enforce the Alberta judgment for the deficiencies. Judgment was granted and upheld by the Court of Appeal. The appellant appealed to the Supreme Court of Canada.
ISSUE: At issue was whether the British Columbia court could enforce an Alberta judgment in respect of a personal action brought while the defendant was not resident in Alberta.
HELD: Appeal dismissed. The 19th century English rules of territoriality served their purpose in international law but are inappropriate to interprovincial relations today. The rules of comity apply with much greater force between the units of a federal state. The courts in one province should give full faith and credit to the judgments given by a court in another province or territory. It is anarchic and unfair that a person should be able to avoid legal obligations arising in one province simply by moving to another province. However, these concerns must be weighed against fairness to the defendant. It may meet the demand of fairness if the jurisdiction issuing the judgment has a significant contact with the subject matter of the action. In the present case, the action for the deficiencies properly took place in Alberta where the property was situated and the contract was formed. Both parties also resided there at the material time of the contract. Thus, the Alberta court properly had jurisdiction and the judgment should be recognized and enforceable in British Columbia.
Comments:
CW notes that it is shocking to think that a ∆ could escape liability from a K entered i
der a decision.
Thus, adjudicatory jurisdiction is limited by a territorial principle that requires a real and substantial connection between the litigation and the forum in which the judgment rendered.
La Forest refers to ‘order and fairness’—the points above are simply applications of this. At a conflict of law level, however, ORDER trumps FAIRNESS! This only makes sense because in commercial law, fairness really does rather stem from order.
At the international level, La Forest does not suggest that the constitution demands ff&c. But he does say that crts should make every effort to give effect to the judgments of other countries if there is a R & S connection.
So, in a nutshell, La Forest’s decision is based on FEDERALISM (inter-provincial) and COMITY (international).
Comity can be over-ridden if there are public policy considerations.
As an side, bear in mind that Reciprocal Enforcements of Judgments Acts within the provinces do not stand in the way of Morguard.
