The (Near) Death of Chaining
Posted by Seva on January 19, 2009
Chaining foreign judgments is a practice of registering foreign judgments from jurisdiction to jurisdiction until you get to one that has a reciprocal enforcement of judgments relationships with your home province. Until very recently, I thought that chaining foreign judgments was a no-brainer in Canada. In fact, approximately a year ago, I posted a link to a handy table listing reciprocal jurisdictions for every province. Alas, whether or not this practice was valid before, it appears that the BCCA in Owen v. Rocketinfo, Inc. has greatly restricted or possibly even killed it.
The facts of Owen are simple. The plaintiff obtained a judgment against the defendant in Nevada, and registered it as a sister-state judgment in California. Because California is a reciprocating jurisdiction under the Court Order Enforcement Act, he then applied to register the California judgment in BC. The Chambers Judge who heard the application refused to register the judgment, leading to this appeal.
Tysoe J.A. (with Ryan and Groberman JJ.A. concurring) upheld the decision, concluding that the California judgment was not a “judgment” within the purview of Part 2 of the COEA, defined as:
“judgment” means a judgment or order of a court in a civil proceeding if money is made payable …;
The salient points of the court’s conclusion are as follows:
- Hickman v. Kaiser, where BCSC court allowed registration of an Idaho (reciprocating) judgment that in turn registered a Texas (non-reciprocating) judgment is not persuasive because it did not judicially determine the validity of the registration in BC (under the COEA);
- the “California judgment did not make money payable but, rather, it made the Nevada judgment enforceable in California”;
- the COEA definition of “original court” as “the court that gave the judgment”, considered in the context of other provisions of Part 2 of the COEA, indicates that the California judgment is not a “judgment”:
- paras. 29(3) and (4) require the originating process and a statement as to whether a defence was entered to be included with the registration application – the registration process in California involved neither an originating process nor an opportunity to defend;
- subpara. 29(6)(a)(ii) prevents registration if the original court lacked jurisdiction over the claim – inapplicable to the California court which did not adjudicate the claim;
- para. 29(6)(c) prevents registration where “the judgment debtor … was not duly served with the process of the original court and did not appear” – there was no originating process for registration in California and the defendant was not required to be served before the entry of the California judgment.
- para. 29(6)(g) prevents registration if “the judgment debtor would have a good defence if an action were brought on the judgment” – it was impossible to defend the California judgment, which is nothing more than entry of the Nevada judgment.
Ultimately, the court concluded that:
To allow the appellant’s judgment to be registered in British Columbia would have the effect of permitting the registration of a judgment granted by a court of a non-reciprocating jurisdiction, contrary to the intent of sections 29(1) and 37(1). In my view, the Legislature did not intend to provide for registration in British Columbia of a judgment granted by a court of another jurisdiction by an indirect method when it is not permitted to be done directly.
Clearly, the most immediate effect of the decision is to preclude registration of judgments from reciprocating states which are nothing more than registration of judgments from non-reciprocating sister-states. In other words, intra-U.S. chaining to a BC-reciprocating jurisdiction is no longer possible.
However, I believe that this does not fully close the door on chaining, at least if we consider intra-Canadian chaining. Under the Enforcement of Canadian Judgments and Decrees Act, a “Canadian judgment” is defined broadly as “a judgment, decree or order made in a civil proceeding by a [Canadian] court … (a) that requires a person to pay money, … (b) under which a person is required to do or not do an act or thing, or (c) that declares rights, obligations or status in relation to a person or thing”. A Canadian judgment “may be registered under this Act for the purpose of enforcement” (s. 2), and “may be enforced in British Columbia as if it were an order or judgment of, and entered in, the Supreme Court” (s. 3).
Furthermore, section 6(3) of the ECJDA provides that a court cannot refuse to register a Canadian judgment simply because the “the judge, court or tribunal that made the judgment lacked jurisdiction” or the court “would have come to a different decision on a finding of fact or law or on an exercise of discretion from the decision of the judge, court or tribunal”, or “a defect existed in the process or proceeding leading to the judgment.”
Thus, at least at first glance, it appears that the above definitions and registration provisions would require the court to register any judgment or order from another province, irrespective of whether said judgment is in itself a registration of another judgment.
Moreover, it is also possible that this inter-Canadian chaining method may also allow a party to register a intra-US chained judgment in BC that was successfully registered in another province the court of which has chosen (for whatever reason) not to follow Owen and allowed registration.
The only immediate wrinkle that I can see to this theory is that a court can in fact refuse to register a judgment where “the judgement is contrary to public policy in British Columbia” (s. 6(2)(c)(iv)). However, this section must be considered against given the high threshold for public policy defences set by the Supreme Court of Canada in Beals.