Nos services sont également offerts en français.

The Appeal of H.M.B. Holdings Ltd. v. Antigua and Barbuda: Reloading “Ricochet Judgments”

In its specialized disciplines, Aquilina Law publishes articles, research, reviews and more
The Appeal of H.M.B. Holdings Ltd. v. Antigua and Barbuda: Reloading “Ricochet Judgments” Aquilina Law August 17, 2021

The Appeal of H.M.B. Holdings Ltd. v. Antigua and Barbuda: Reloading “Ricochet Judgments”

Introduction On January 9, 2020, the Ontario Court of Appeal released its judgment dismissing the appeal of an order in the case of H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69. This affirmed the lower court’s decision, which refused to register a judgment of the British Columbia Supreme Court recognizing a Privy Council judgment against the Antiguan Government in favour of the plaintiff, Half Moon Bay’s (H.M.B.). However, the Court of Appeal’s dissenting judgment raises questions as to the operation of legislation governing the reciprocal enforcement of judgments and, more broadly, the functionality of private international law, in Canada.

Case History In 1995, Hurricane Luis destroyed a resort belonging to H.M.B. in Antigua & Barbuda. The Antiguan Government decided to expropriate the property and a dispute arose as to the compensation the Government owed to H.M.B. following the expropriation. H.M.B. was awarded damages by the Judicial Committee of the Privy Council, the highest court of certain British territories and Commonwealth countries such as Antigua.

H.M.B. sought to have the Antiguan judgment recognized so as to enforce it against the Antiguan Government’s assets in Ontario. However, Ontario’s two-year limitation period to enforce a foreign judgment had lapsed. To get around this, H.M.B. obtained a default judgment in British Columbia (B.C.) at common law to have the judgment registered, a procedure for which there is a ten-year limitation period.

H.M.B applied to the Ontario Superior Court to have the B.C. judgment recognized using the Reciprocal Enforcement of Judgments Act (the “REJA”), which permits near automatic recognition of decisions of all Canadian provinces (except Quebec) in Ontario. According to its Sections 3(b) and 3(g), this regime does not apply if the judgment debtor was not carrying out business or ordinarily resident in the jurisdiction, did not attorn, or if it would have a good defence if an action were brought on the original judgment. [1] We examined this case, which dealt with these REJA sections, in an earlier article available here, whereby the Superior Court of Justice dismissed H.M.B.’s application; H.M.B. then appealed this decision.

Questions on Appeal The Court of Appeal examined two points argued by H.M.B. namely, that the application judge erred in failing to:

  1. apply the legal criteria for “carrying on business” more liberally, to find Antigua was carrying on business in B.C. at the relevant time; and
  2. interpret “original judgment” to mean the B.C. judgment, not the Privy Council judgment. [2]

For the first of H.M.B.’s contentions, the Court of Appeal examined the lower court’s decision as to whether the Antiguan Government was carrying on business in B.C. at the relevant time. Firstly, the majority disregarded the lower standard argued by H.M.B. that the determination of whether one is carrying on business only requires finding some direct or indirect presence in the state asserting jurisdiction accompanied by a degree of business activity which is sustained for a period of time. [3]

The majority examined the factors that the Superior Court relied upon to flush out the legal tests in Chevron or Van Breda to determine whether Antigua carried on business in B.C. [4] The majority did not find that there was a palpable and overriding error and, as a result, the Court of Appeal gave deference to the trial judge’s finding that Antigua was not carrying on business in B.C. at the relevant time.The majority further noted that the Superior Court’s analysis of Section 3(b) of the REJA did not deprive H.M.B. from a remedy as they could have brought a common law action in addition to bringing an application under the REJA. However, they failed to do so within the two- year limitation period. [5]

At this point, since Section 3(b) barred H.M.B. from registering the judgment in Ontario under the REJA, the Court did not consider it necessary to decide on the meaning of ‘original judgment’. The Court of Appeal ultimately dismissed the appeal.

Dissent More interestingly, Justice Nordheimer dissented in this case on both questions. Regarding the first question, he claimed that Chevron rejected the notion that Van Breda was applicable in cases revolving around the recognition and enforcement of foreign judgments. He argued that Van Breda has, at first instance, “no application in a case such as this where the judgment that the creditor seeks to enforce is itself a judgment issued for the enforcement of a foreign judgment.”[6] Rather, the learned judge suggested that after Chevron, the courts “adopted a generous and liberal approach to the recognition and enforcement of foreign judgments”. [7]

In applying this standard, he posited that “in light of the facts of this case, one does not need a physical presence. Indeed, in this digital age, it is often unnecessary to have any physical presence in order to carry on a business.” He asserted that commercial reality dictates that companies may carry out business through other entities, which maintain their own business operations. Even if the four representatives of the Antiguan Government based in B.C. were not legal agents, it did not change the fact that, according to his broader standard, Antigua was conducting business through them in B.C. In his view, this resulted in a palpable and overriding error.

Justice Nordheimer then examined the second question to see if registration was proscribed in this instance due to a good defence being available on the “original judgment”. He looked to the REJA and noted that “original court” is defined as ‘the court by which the judgment was given. There can be no dispute that, in this case, ‘judgment’ meant the B.C. judgment since it is that judgment that was sought to be registered.” [8] By Justice Nordheimer’s contention, the trial judge’s interpretation “undermines the purpose of the REJA, which is to facilitate the enforcement of judgments properly issued by reciprocating jurisdictions.” [9]

Justice Nordheimer held that Antigua would not have had a good defence to the action commenced in B.C. to enforce the Privy Council Judgment. As a result, he would have allowed the appeal.

Conclusion HMB Holdings’ case against the Government of Antigua serves as an approach to the reciprocal enforcement of foreign judgments into the next decade. With a dissenting appeal judge, there is potential for this case to be heard by the Supreme Court. The interconnectedness of private international legal principles ensure that if this case is heard by the Supreme Court, then it will likely redefine Chevron and the applicability of all Canadian foreign recognition regimes.

[1] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2019] O.J. No. 1133 at para 9.

[2] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 7.

[3] This is the test set out in Wilson v Hull [1995] AJ No 896; H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 23.

[4] The Superior Court referenced Club Resorts Ltd. v. Van Breda 2012 SCC 17. It determined that for a party to be carrying on business in a province they must have a meaningful presence. The Superior Court also referred to Yaiguaje v. Chevron 2015 SCC 42, which noted that the meaningful presence in the province “must be accompanied by a degree of business activity over a sustained period of time”. For more information, see H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2019] O.J. No. 1133 para 50.

[5] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 32.

[6] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 40.

[7] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 41

[8] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 51.

[9] H.M.B. Holdings Ltd. v. Antigua and Barbuda (Attorney General), [2020] O.J. No. 69 at para 53.

Article written by Martin Aquilina, with assistance from Alexander Krush

This article is for informational purposes only and does not constitute legal advice. If you wish to seek legal advice, contact Martin Aquilina today.

Write a comment
Your email address will not be published. Required fields are marked *