Renvoi: Lex Situs Conflictus

Canadian Conflict of Laws Blawg by Seva Batkin

Posts Tagged ‘civil procedure’

A Cornucopia of Conflicts Goodies

Posted by Seva on November 18, 2008

The decision of Mr. Justice Grauer in Lailey v. International Student Volunteers, Inc., 2008 BCSC 1344 provides a cornucopia of interesting conflict of laws points dealing with rebuttal of CJaPTA real and substantial connection presumptions, a general prohibition against bootstrapping actions over which the court does not have jurisdiction simpliciter to actions where the court does have jurisdiction, and consequences of such bootstrapping on otherwise valid ex juris service. It is always amazing how much useful law can come out of a relatively run-of-the-mill student volunteer trip to Ecuador.

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Expert Evidence on Law of Other Provinces

Posted by Seva on July 21, 2008

The requirement for proving foreign law via expert evidence, and a presumption of similarity to lex fori in the absence of such evidence, has been trite law for some time. However, as the decision of Mr. Justice Matsuhara in Seidel v. Telus Communications Inc., 2008 BCSC 933 shows, at least part of this triteness is that no one has bothered to assail this proposition. In Seidel, the plaintiff, seeking the court’s conclusion that the law of Quebec on the subject of arbitration and certification of class action proceedings was substantially different from that of BC, argued that expert evidence on the law of Quebec is unnecessary and inadmissible. She argued that the court was qualified to consider Quebec law, particularly its statutory scheme, without additional help.

Unsurprisingly, the court disagreed with this assertion. Instead, it proceeded to analyze the question of admissibility via the principled approach to expert evidence from R. v. Mohan, focusing on necessity. The court took into account that foreign law has traditionally been proven by expert evidence, that Quebec law, under its civil tradition, is statutory; that under s. 24(2)(e) of the B.C. Evidence Act, the court must take judicial notice of statutes of other provinces; and that a judicially noticed fact is not open to rebuttal (R. v. Spence). The resolution of this dilemma lay in the conclusion that there is a difference between judicially noticing the existence of a foreign statute, and receiving expert evidence on its meaning and effect within that legal system. As Matsuhara J. concluded at para. 24:

It would be audacious of me to conclude that simply because I can read the translations of the provisions of the Civil Code I have the capacity to fully understand and interpret the meaning of such provisions. In other words, this is information that is “outside of the experience the trier of fact”, which makes expert evidence necessary.

As a not-so-long-ago law student, I find that it is always useful to find a case expounding on an otherwise trite principle of law and confirming its validity via principled analysis.

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Procedural Corporate Law

Posted by Seva on July 10, 2008

In an action involving foreign corporations or corporate-like trusts, how should the question of plaintiff shareholders’ standing to make a claim be decided? This issue was addressed by Madam Justice Newbury confirmed in Everest Canadian Properties Ltd. v. Mallmann, 2008 BCCA 276. Considering the classic rule from Foss v. Harbottle, which dictates that a shareholder cannot sue for injury to the corporation, she confirmed that this is a procedural rule. Thus, a shareholder’s standing is to be determined in accordance with lex fori even if the corporation involved is foreign. I think that it may useful to reproduce the two key paragraphs from the judgment where Newbury J.A. pays heed not only to precedents, but to academic literature on this subject as well:

12 Although the characterization of the rule in Foss v. Harbottle for conflicts of law purposes was not discussed by the court below, it is implicit in Ross J.’s reasons and in counsel’s arguments that the rule is a procedural one and that therefore the lex fori applies to determine a shareholder’s standing to sue. This was the view taken in Heyting v. DuPont, [1964] 2 All E.R. 273, 1 W.L.R. 843 (C.A.), where a shareholder of a Jersey company sought to sue, in England, a corporate director for misfeasance. At the outset of his reasons, Russell L.J. said this:

This appeal is from a decision of Plowman J. that a claim, asserting liability of a director of a Jersey incorporated limited liability company, to the company for damages for misfeasance, could not be put forward by a shareholder suing on behalf of himself and shareholders other than the allegedly liable director, who held the majority of shares and could therefore control a vote on whether the company should be a plaintiff in such a claim. It thus appears that the question is whether this is a case in which a departure from the rule in Foss v. Harbottle is required. I dare say that the rule in Foss v. Harbottle is a conception as unfamiliar in the Channel Islands as is the Clameur de Haro in the jurisdiction of England and Wales. But clearly this is a matter of procedure to be decided according to the law of this forum. [At 848; emphasis added.]

13 Although this reasoning was questioned by one writer (see Anthony Boyle, “A Liberal Approach to Foss v. Harbottle” (1964) 27 Mod. L. Rev. 603), the same author in a later article (“The Shareholders’ Derivative Action in the English Conflict of Laws” (2000) Eur. Bus. L. Rev. 130) retreated from his previous position and agreed that “… the principle of the company as the proper plaintiff (even if it rests upon the concept of corporate personality) should probably be regarded as procedural. Certainly the conditions that govern the use of the derivative actions are essentially procedural.” (At 131.) In Canada, although the matter is not free from doubt, the better view would appear to accord with Heyting v. DuPont. (See, e.g., Baniuk v. Carpenter (No. 2) (1987) 85 N.B.R. (2d) 385, at 393-4, 217 A.P.R. 385 (C.A.) and Teck Corp. v. Millar, [1973] 2 W.W.R. 385 at 388-9, 33 D.L.R. (3d) 288 (B.C.S.C.), at para. 13; cf. King v. On-Stream Natural Gas Management Inc., [1993] B.C.J. No. 1302 (S.C.) (QL) at para. 67.)

While the conclusion reached does not appear to be particularly controversial, it is always useful to have recent and persuasive authorities restating an old rule.

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Standard of Review of Jurisdiction Decisions in Ontario

Posted by Seva on April 22, 2008

Quick note about a decision of the Ontario Superior Court of Justice in Visram v. Chandarana. This was an appeal from a Master’s order dismissing a motion to stay the action on the ground that Ontario is forum non conveniens. Molloy J., after engaging in a principled analysis, concluded that decisions of Masters on jurisdictional questions deserve the same deference as those made by judges, and are subject to the same standard of review, imported from Equity Waste Management of Canada Corp v. Panorama Investment Group Ltd.:

What is important for this appeal is the kind of error that justifies intervention by an appellate court. An error of law obviously justifies intervention. An appellate court may interfere with a finding of fact if the trial judge or motion judge disregarded, misapprehended, or failed to appreciate relevant evidence, made a finding not reasonably supported by the evidence, or drew an unreasonable inference from the evidence.

The rest of the decision is not particularly eventful as Malloy J. confirmed that the Master correctly concluded that the defendants attorned to the court’s jurisdiction by filing a statement of defence, and that he also correctly considered the real and substantial connection test (based on Muscutt) and the forum non conveniens factors (based on Amchem).

Update: As Mr. Antonin Pribetic has very insightfully pointed out, this decision is also interesting because it affirms that attornment to the court’s jurisdiction eliminates the need to establish RaSC, thus making the court’s subsequent analysis effectively obiter. While this may be technically correct, the future persuasiveness of this decision may have been enhanced if the court considered the attornment-based jurisdiction and the Muscutt factors-based jurisdiction in the alternative, finding that in this case jurisdiction simpliciter could be established in either way.

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When All Else Fails…Say You Didn’t Get It

Posted by Seva on April 8, 2008

Here is yet another enforcement of foreign judgment case where the defence of “I did not receive it” was given considerable weight: CE Design Ltd. v. Saskatchewan Mutual Insurance Company, 2008 SKQB 12. However, unlike the B.C. case discussed in the previous post, this time the defence was successful.

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How to Compare Convenience and Expense

Posted by Seva on April 1, 2008

Many thanks to Mr. Pribetic, who has directed my attention to Liu v. Huang, 2008 BCSC 288, a recent decision of the BCSC declining jurisdiction in favour of Taiwan. While the parties resided in Vancouver, at least part time, the dispute concerned debt that arose and was supposed to be repaid in Taiwan.

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Final? Check! Jurisdiction? Presumed! Enforcement? Not in Small Claims Court!

Posted by Seva on March 31, 2008

Surfing for conflict of laws news, I came across a recent decision of the Nova Scotia Supreme Court in Direct Cash ATM Processing Partnership v. Eastside Billiards and Lounge Ltd., 2008 NSSC 77. Although not groundbreaking, I found the decision interesting with respect its discussion of conditions for enforcing foreign judgments at common law and the appropriate venue for such enforcement.

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Summary Enforcement of Foreign Judgments

Posted by Seva on March 11, 2008

Without breaking any new legal ground, the decision of Master Scarth in Suncom Inc. v. Andrew Stone Casino Promotions Ltd., 2007 BCSC 1904 illustrates some interesting practical points.

In Suncom, the plaintiff brought a Rule 18 application for summary judgment to recognize and enforce a default judgment obtained in Nevada. The relatively unusual aspect of this case was that it was brought under Rule 18, rather than Rule 18A, showing that the plaintiff had a very high degree of confidence in its case, arguing that “there is no defence to the whole or part of a claim, or no defence except as to amount” and deposing that it “knows of no fact which would constitute a defence to the claim.” To successfully defend against this application, the defendants merely had to show a “bona fide triable issue”.

The defendants in fact argued three triable issues, all rooted in Beals v. Saldanha, 2003 SCC 72: (1) lack of real and substantial connection between the Nevada court and the defendants, despite the presence of a jurisdiction selection clause; (2) defence of fraud; and (3) defence of public policy.

Master Scarth held that none of the defendant’s arguments raised a bona fide triable issue. With respect to jurisdiction simpliciter of the Nevada court, relying on Beals and Z.I. Pompey Industries v. ECU-Line N.V., 2003 SCC 27, she held that a jurisdiction selection clause demonstrates a prima facie real and substantial connection and must be enforced by the court in the absence of “strong cause to the contrary”. The defendants’ argument that the work under the contract was not performed in Nevada did not raise a “strong cause” as a triable issue. Relying on Zaidenberg v. Hamouth, 2005 BCCA 356, she concluded “that there is no triable issue relating to the defence of fraud, in that it is clear that there is no new evidence supporting the fraud defence which was not discoverable with due diligence prior to the default judgment being granted.” Finally, with respect to the argument that the Nevada judgment was contrary to the “Canadian concept of justice” because it included prima facie compensatory punitive damages, relying on Old North State Brewing Co. v. Newlands Services Inc. (1998), 58 B.C.L.R. (3d) 144, she concluded that “whether punitive damages are included in the judgment or not, there is no issue which merits a trial on that point” as “award of … punitive damages, cannot be considered to be contrary to the public policy of British Columbia”.

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