NOVA SCOTIA COURT OF APPEAL
[Cite as: Ross Ritchie Ltd. v. Sydney Steel Corp., 2001 NSCA 100]
Freeman, Hallett and Flinn, JJ.A.
BETWEEN:
ROSS RITCHIE LIMITED, a body corporate
Appellant
- and -
SYDNEY STEEL CORPORATION, a body corporate
Respondent
REASONS FOR JUDGMENT
Counsel: Janet M.R. Clark for the appellant
John E. MacDonell for the respondent
Reinhold M. Endres, Q.C. for the Attorney General of Nova Scotia
Appeal Heard: May 11, 2001
Judgment Delivered: June 19, 2001
THE COURT: Appeal dismissed per reasons for judgment of Hallett, J.A.; Freeman and Flinn, JJ.A. concurring.
HALLETT, J.A.:
[1] This is an appeal from the dismissal by Justice Goodfellow of the appellant’s application inter partes to have a judgment of the County Court for the District of York in the Province of Ontario entered February 25, 1981, recognized and enforced in Nova Scotia against the respondent Sydney Steel Corporation (“Sysco”).
[2] Sysco has filed a notice of contention asserting that Goodfellow, J.’s decision should be affirmed on “grounds in addition to those given”.
[3] The application by the appellant was not made pursuant to the Reciprocal Enforcement of Judgments Act, R.S.N.S. 1989, c. 388. The application was pursuant to the common law. Section 11 of that Act states:
11 Nothing in this Act deprives a judgment creditor of the right to bring a proceeding on the original cause of action or for the recovery of the amount of his judgment instead of proceeding under this Act. R.S., c. 388, s. 11.
[4] Sysco’s sole business is the operation of a steel plant. Sysco was established pursuant to an Act of the Nova Scotia Legislature being Chapter 1 of the Acts of 1967, 2nd Session. The Act is cited as the Sydney Steel Corporation Act, R.S.N.S. 1989, c. 456 (the “Sysco Act”). The object of the Corporation as stated in the Sysco Act is to continue the operation of the Sydney plant for sufficient time to assess the long term future of the plant and to give effect to that assessment (s. 21).
[5] The Sysco Act empowers the Governor in Council to expend every sum of money that the Governor in Council considers necessary or incidental to continue the operation of the Sydney plant for a sufficient time to assess the long term future of Sydney works (s. 5(f)).
[6] Section 23 of the Act states:
23 Except as otherwise provided in this Act, the Corporation shall have all the powers of a company incorporated pursuant to the Companies Act. 1967 (2nd Sess.), c. 1, s. 22.
[7] Section 24 is relevant to the issues raised on this appeal. Section 24 provides:
24 (1) Subject to this Section, the provisions of the Proceedings against the Crown Act shall apply mutatis mutandis to the Corporation.
(2) For the purpose of this Section, a reference in the Proceedings against the Crown Act
(a) to the Crown shall be construed as a reference to the Corporation;
(b) to the Minister of Finance shall be construed as a reference to the Treasurer of the Corporation;
(c) to the Consolidated Fund of the Province shall be construed as a reference to the funds of the Corporation.
(3) In proceedings pursuant to this Section an action shall be brought against the Corporation in the name of the Corporation.
(4) Where a document or notice must be served upon or given to the Corporation pursuant to this Section or the Proceedings against the Crown Act, it shall be served upon or given to the Attorney General and such service shall be and shall be deemed to be service upon the Corporation. 1972, c. 61, s. 2.
[8] Sections 10, 18 and 17(2) and 25 of the Proceedings Against the Crown Act, R.S.N.S. 1989, c. 360, amended 1991, c. 16 provide:
10 Nothing in this Act authorizes proceedings against the Crown except in the Supreme Court or a county court. R.S., c. 360, s. 10.
18. No action shall be brought against the Crown unless two months previous notice in writing thereof has been served on the Attorney General, in which notice the name and residence of the proposed plaintiff, the cause of action and the court in which it is to be brought shall be explicitly stated.
17. (2) In proceedings against the Crown, judgment shall not be entered against the Crown in default of appearance or pleading without the leave of the court to be obtained on an application of which notice has been given to the Crown.
25 (1) Except as provided in this Act, proceedings against the Crown are abolished.
[9] Sysco has operated the plant since 1967.
[10] In February 1977 the appellant entered into an agreement with Sysco whereby the appellant was to carry out an assessment of equipment at Sysco’s plant in Sydney, Nova Scotia. The appellant appears to be an engineering consulting firm situated in Ontario. The appellant was paid for this work (Ross Ritchie affidavit dated August 8th, 2000, para. 1). In that affidavit Ross Ritchie, President of the appellant company, also asserts that on or about December 23, 1977, the appellant entered into a second contract with Sysco whereby the appellant would prepare a written report of its findings in relation to the assessment. He asserts this was a separate request for services by Sysco. Ross Ritchie’s affidavit deposes that he prepared the written report and sent it via air mail to Sysco. He deposes that he sent an invoice to Sysco in the amount of $3,894.91 for the work performed in creating the report and that he did not receive payment. The record shows that the invoice was dated January 16th, 1979, and was in the amount of $3,109.51, not $3,894.91. It would appear from the invoice that the report was completed and forwarded on January 4th, 1978 but as is evident was not invoiced until a year later.
[11] The appellant commenced proceedings in the County Court for the District of York in the Province of Ontario in 1980 claiming $3,109.51 plus interest at 1% per month from January 16th, 1979. On February 25th, 1981, the appellant obtained judgment against Sysco in default of defence in the amount of $3,894.91 with costs of $122. and bearing interest at the rate of 18.25% per annum. Ross Ritchie asserts that the appellant has been unable to recover any of the amounts owing to it on the judgment.
[12] Almost 19 years later, on January 26th, 2000, the appellant gave notice to the Attorney General of Nova Scotia that it intended to bring an action against Sysco in the Supreme Court of Nova Scotia for damages as a result of the failure of Sysco to honour the Ontario judgment.
[13] On February 10th, 2000, Reinhold Endres, Q.C., counsel for the Attorney General wrote to the appellant’s counsel, Ms. Clark, stating that he anticipated that Sysco would respond.
[14] On September 5th, 2000, counsel for the appellant gave notice that an application would be made to the Supreme Court of Nova Scotia on the 28th day of September, 2000, for an order to recognize and enforce the Ontario judgment and that in support of the application would be the affidavits of Ross Ritchie and Janet Clark, the appellant’s Nova Scotia counsel .
[15] On September 11th, 2000, David Miller, Q.C., Sysco’s counsel, advised Ms. Clark that he had received from Mr. Endres the relevant documents and that he had been retained by Sysco to act in defence of the matter. He noted in his letter to her that Sysco could not be ready to proceed on September 28th. He questioned the appellant proceeding by way of application inter parties rather than an action and stated that he would have an associate look into this matter. He also stated:
I also note that Mr. Ritchie’s Affidavit refers to reports provided to Sysco and to invoices rendered. Please let me have copies of the reports and invoices as well as any correspondence between the parties concerning Mr. Ritchie’s work and his invoices.
As well, while the Affidavit attaches a copy of the Judgment of the Ontario County Court, copies of the pleadings are not attached and there is no indication of how service was effected on Sysco. Please also provide me with copies of those documents, particularly documents establishing service.
[16] On September 13, 2000, counsel for the appellant advised Mr. Miller that she would agree to adjourn the matter to October 17th and that she would respond to his request for documentation upon receiving further instructions from the appellant.
[17] On September 19th, 2000, Mr. Miller’s associate, John E. MacDonell, wrote Ms. Clark stating that he would appreciate hearing from her with respect to the information requested in Mr. Miller’s letter of September 11th. He went on to state that by agreeing to have the matter heard on October 18th he was not agreeing that it was appropriate for the matter to proceed by way of an application and that on the contrary, Sysco’s position was that the matter should be proceeding by way of an action and not an application.
[18] John Ritchie swore an affidavit on January 25th, 2001 in support of the application before this Court to adduce fresh evidence, namely, the affidavit of Wynn Hatcher showing that on November 14th, 1980, Mr. Hatcher had served Ernest Boutilier, the Vice-President - Administration of Sysco, with the notice of the claim issued out of the Ontario court in 1980. John Ritchie deposes that he had been a law partner of Mr. Feehely who had brought the action on behalf of the appellant against Sysco in 1980 and that in September of 2000 he had asked Mr. Feehley a copy of the affidavit of service. He was advised that the file had been destroyed. John Ritchie states that he contacted the Court for the District of York and requested a copy of the affidavit of service on Sysco. He deposes that he was told that the search could not be done immediately and could take several days. He does not state in his affidavit when this contact was made or to whom it was made or who provided the advice.
[19] On September 22nd, 2000, Ms. Clark forwarded to Mr. MacDonell a copy of the appellant’s January 16th, 1979, invoice to Sysco stating this was the invoice for which judgment was obtained in Ontario. The invoice would indicate that the engineering services related to a request for a report that was made to the appellant by D.L. Parsons who would appear to have been Sysco’s general counsel at the time. The invoice indicates that the report was entitled “Report on Sydney Improved Rail Mill”.
[20] On September 27th, 2000, Mr. MacDonell wrote Ms. Clark acknowledging receipt of the invoice. He also sought advice as to the status of Mr. Miller’s other requests in his letter of September 11th, 2000, namely, (i) the report referred to in the invoice; (ii) any correspondence between the parties concerning Mr. Ritchie’s work and his invoices; (iii) documents with respect to the Ontario action, in particular the pleadings and the Affidavit of Service on Sysco.
[21] On October 10th, 2000, Ms. Clark wrote to Mr. MacDonell with respect to this request. She stated:
We take the position that the documentation requested by you is not relevant to this proceeding. It is our position that the decision of the Supreme Court of Canada in Morguard Investments Limited v. DeSavoye (1990), 76 D.L.R. (4th) 256 established that a judgment by any Canadian province is entitled to enforcement in any other province so long as there was a substantial connection between the original province granting judgment and the subject matter of that proceeding. As a result, the documents requested are not relevant to the question of whether or not this Ontario judgment is enforceable in Nova Scotia.
[22] On October 13th, 2000, J.A. (Jim) Rudderham, the President/Chief Executive Officer of Sysco signed an affidavit stating that he had reviewed the affidavits of Ross Ritchie and Janet Clark in support of the application and went on to state:
3. THAT I have made enquiries among SYSCO personnel, including past and present employees and officers, and have been unable to locate anyone who recalls this matter, or who recalls SYSCO being served either with a Notice of Intended Action, or the Action itself.
4. THAT Mr. Ritchie in his affidavit states that the alleged contractual dealings upon which the Ontario action was based took place in 1977. To the best of my information and belief SYSCO was not resident in Ontario at that time, and did not carry on business in that province, having no sales office or other offices in Ontario, and having no employee in that province soliciting business.
[23] On October 18th , 2000, the appellant’s application was adjourned until November 14th, 2000, at which time the application was heard by Justice Goodfellow. He dismissed the application on two grounds: (i) that there had been no proof of service of the notice of claim on Sysco and, therefore, no proof that the Ontario court had properly exercised jurisdiction in entering the judgment; and (ii) that the proceeding to recognize and enforce the Ontario judgment ought to have been by way of an action rather than an application as it was not a proceeding in which the principal question was likely to be a question of law but rather disputed questions of fact would likely arise including whether or not there was a real and substantial connection between Ontario and the subject-matter of the proceeding and whether Sysco was properly served with notice of the action and of the action itself. He concluded by stating that the appellant had the option of bringing a common law action on the Ontario judgment.
[24] John Ritchie deposes that on November 14th, 2000, he was informed by Ms. Clark that she appeared before Justice Goodfellow on the application and that she had argued that proof of service was not required and that she requested an adjournment if proof of service in the Ontario action was required but that Justice Goodfellow dismissed the application without providing an adjournment to allow for proof of service.
[25] Three days later, on November 17th, 2000, John Ritchie received from the Ontario court a copy of Mr. Hatcher’s affidavit of service. He attached a copy of that affidavit to his affidavit in support of the motion to adduce fresh evidence before this Court.
[26] On November 22nd, 2000, Ms. Clark sent a copy of the affidavit of service to Mr. MacDonell and on December 17th Justice Goodfellow signed his oral judgment rendered on November 14th.
[27] The transcript of the hearing before Justice Goodfellow discloses that he had indicated to counsel for the appellant that he was having difficulty with certain aspects of the application. Counsel for the appellant asked Justice Goodfellow what aspects of the application were a problem and she queried whether his concerns related to service. Justice Goodfellow stated in response:
Well, the fact that you are unable to provide proof of service and it ought to have been in the file. They just sat on the judgment for nineteen, whatever number of years it is, and to have this horrendous level of interest arise which if you take it at common law, you’re always entitled to sue on the judgment. The judgment is a common law right of action. You could have sued eighteen years ago. If you were successful you’d get 5% interest, now you sit on the thing and come in looking for 18 ½%.
[28] The appellant sought recognition of the Ontario judgment in the amount of $3,894.91 plus costs of $122.00 and interest of $14,362.49.
[29] Further on Justice Goodfellow stated in response to a comment by counsel for the appellant:
Court: Well, if the debt had never been incurred, you’d never be able to sue, I mean that’s - I’m sure they didn’t pay it because they don’t think they owe it and they say that there are questions of fact to be decided. Do you have anything further you want to add, I think you may have to go to the Appeal Court but I’m not going to grant your Application.
Clark: On the basis of the service?
Court: I’ll give you a decision and it’s basically this. This is an Application whereby Ritchie seeks to enforce default judgment apparently granted by the County Court of the District of York. There is no proof of service. Is there anything you want to add for the record?
MacDonell: For the record, My Lord, the invoice is in the materials.
Court: Does it say anything about interest?
MacDonell: Interest?? to Mr. Rudderham’s Affidavit because Ms. Clark did provide it to us in (inaudible) as far as I can tell there’s no mention of interest.
Court: (inaudible) this is an Application whereby Mr. Ritchie seeks to enforce a default judgment apparently granted by the County Court of District of York in the Province of Ontario on February 25, 1981. The judgment appears to have been signed not by a Judge of the Court but by the Clerk. The Judge makes no reference to service having been properly effected on the Defendant Sydney Steel Corporation. The Affidavit of Mr. [Rudderham] filed with this Court on October 13 is as follows: Sysco was not a resident of Ontario at the time the subject contractual dealings were alleged to have taken place nor was Sysco carrying on business in that province having no sales office or other office in Ontario and no employees in that province soliciting business. The Ontario judgment provides for interest of 18.25% per annum with the invoice ???? making no mention of interest. I made reference all through [to] our own Court of Appeal decision of Wilson and it’s clear that if an action had been taken on the common law right of action on the judgment, that if the action had been taken on the common law right of action on the judgment, that it would have produced an interest rate of 5% and a major substantial portion of the claim is in fact interest at the rate of 18.25%. Sysco’s solicitors’ have requested Ritchie to provide copies of the original Ontario pleadings in proof that they were properly served on Sysco which Ritchie is unable to provide anything by way of confirmation, with the argument being based solely on the matter of the Rules. As I indicated, the judgment was signed by a Clerk. The judgment has to fundamentally be based upon service. This matter preceded the Morguard case and at that time it required either the presence or consent. In any event, Sysco submits, and I think appropriately that this proceeding is not appropriate for hearing by way of application as it is not one which the sole principal question is likely to be a question of law. It is one which a disputed question of fact will likely arise including: (1) where (sic) [whether] there’s a real substantive connection between Ontario and the subject matter of the proceeding; (2) whether Sysco was properly served with the notice of action and the action itself; (3) whether Ritchie sought and received leave to enter judgment against Sysco and if so, whether Sysco was properly served with the notice of application for leave. (Inaudible) Ritchie, if he’s not prejudiced, he can bring a common law action on the judgment and [I] would also make note that it’s acknowledged that the ability to bring action within the six year period is this ability is acknowledged. In the circumstances, I must dismiss the Application with costs.
[30] The transcript of Justice Goodfellow’s oral decision leaves a lot to be desired. I have listened to the tape of Justice Goodfellow’s concluding remarks; the transcript is inaccurate. The essence of what Justice Goodfellow said is that the appellant has an option to bring a common law action on the judgment and that the appellant’s disability to bring the action within six years is acknowledged. The only reference I have found relevant to this statement is a sentence in the pre-hearing brief filed by Sysco’s counsel with Justice Goodfellow. The sentence is as follows:
Sysco submits that the only option open to Ritchie is to bring a common law action on the judgment.
I have not been able to find in either Sysco’s pre-hearing brief to Justice Goodfellow or in the transcript of the hearing any reference to an acknowledgment that the appellant was under a disability that might be relevant in determining if the proceeding for recognition and enforcement is barred by any limitation of actions legislation.
[31] On February 2nd, 2001, the appellant gave notice that an application would be made to this Court for an order allowing the admission of the affidavit of Wynn Hatcher sworn to on November 20th, 1980 re: service on Sysco as new evidence. The application was supported by the affidavit of John Ritchie to which I have previously referred.
[32] The affidavit of Wynn Hatcher of Sydney, Nova Scotia, Deputy Sheriff, sworn before a notary public of this Province, states that on November 14th, 1980 he personally served Ernest Boutilier, Vice President - Administration of Sysco with notice of service out of Ontario of the claim for the price of the engineering services performed claiming the sum of $3,109.51. The notice served provided that if Sysco wished to defend the action it must serve upon the appellant or his lawyer a copy of an affidavit of merit showing the nature of the defence. If service of the defence is not made within 40 days, judgment could be given against Sysco in default.
[33] On the hearing of this appeal we heard the application to adduce fresh evidence at the outset of oral argument. We reserved decision on that application.
[34] There are a number of issues raised by the parties. The appellant identifies the following:
A) Was the Notice of Intended Action served on the Respondent sufficient to meet the requirement under the Proceedings Against the Crown Act?
B) Should this proceeding for recognition of a judgment have been brought by way of Originating Notice (Action) and not Originating Notice (Application)?
C) Is proof of service of the Ontario proceedings required in an application for recognition of the Ontario judgment in Nova Scotia and, if so, did Justice Goodfellow err in law by failing to apply the principles of natural justice in not granting an adjournment to allow the Appellant an opportunity to provide proof of service?
D) Is the Respondent the “crown” for the purposes of the application of the doctrine of crown immunity?
E) Was the Appellant required to serve notice of intended action and/or obtain leave before entering default judgment against the Respondent in Ontario.
F) Did the Ontario court properly exercise jurisdiction and/or was there a “real and substantial connection” between the original proceedings in Ontario and the jurisdiction of Ontario?
G) Did Goodfellow, J. err in law in considering irrelevant evidence in determining whether the Ontario judgment was entitled to recognition in Nova Scotia, including the interest on the Ontario judgment and the fact that the Ontario judgment was signed by a clerk of the court?
[35] Sysco raises the following issues in its notice of contention:
1. Should this Honourable Court hear and consider new evidence, namely an Affidavit of Service of Wynn Hatcher sworn to on November 20, 1980, on the hearing of this appeal?
2. Should the Learned Chambers Judge have dismissed the application on the additional basis that the Respondent was entitled to rely on the doctrine of Crown immunity and therefore could only be sued in the Supreme Court of Nova Scotia?
3. Should the Learned Chambers Judge have dismissed the application on the additional basis that the Appellant was required to follow the service provisions in the Proceedings Against the Crown Act, (Nova Scotia) or the Proceedings Against the Crown Act, (Ontario) and had offered no evidence in that regard?
4. Did the Learned Chambers Judge err in law in finding that the Appellant was required to prove service of the action leading to the Ontario judgment, and if so, in not granting an adjournment to allow the Appellant a further opportunity to provide proof of service?
5. Did the Learned Chambers Judge err in concluding that this proceeding for recognition of a judgment should have been brought by way of Originating Notice (Action) and not Originating Notice (Application)?
6. Should the Learned Chambers Judge have dismissed the application on the additional basis that there was no real and substantial connection between the Respondent and the Province of Ontario?
7. Should the Learned Chambers Judge have dismissed the application on the additional basis that the interest rate in the Ontario judgment was contrary to law and public policy and thus could not be enforced in Nova Scotia?
DISPOSITION OF THE APPEAL:
[36] It is not necessary to deal with all of the issues identified by the parties as I am satisfied that Justice Goodfellow did not err in dismissing the application.
[37] In Canadian Conflict of Laws - J.G. Castel, 4th, 1997, dealing with the subject of enforcement at common law of foreign judgments in personam, the author states at p. 271, § 153:
153. Actions on Foreign judgments
Subject to certain qualifications, a judgment in personam of a foreign court of competent jurisdiction is capable of recognition and enforcement in the common law provinces and territories of Canada. Apart from statute, it will not be enforced directly by execution or any other process, but will be regarded as creating a debt between the parties to it, the debtor’s liability arising from an implied promise to pay the amount of the foreign judgment. The debt so created is a simple contract debt and not a specialty debt, and is subject to the appropriate limitation period.
[38] In Castel’s text it is clear that when he uses the term “foreign judgment” this includes both a judgment rendered abroad and one rendered in a sister province (see footnote 5 at p. 271).
[39] And at p. 292 the author states:
175. Proceedings in the provinces
An action on a foreign judgment is usually begun by a writ endorsed with a statement of claim for the amount of the judgment debt and costs, and summary judgment may be given for the plaintiff.
[40] Civil Procedure Rule 9.02 provides that a proceeding, in which the sole or principal question at issue is or is likely to be a question of law and one in which there is unlikely to be any substantial dispute of facts, shall be commenced by filing an Originating Notice (Application Inter Parties). Rule 9.03 is not relevant. Rule 9.04 provides that every other proceeding which is not within the provisions of Rules 9.02 or 9.03 shall be commenced by filing an originating notice (action).
[41] Counsel have not brought to our attention any decisions relating to the recognition and enforcement of foreign judgments at common law that proceeded by way of an application rather than an action. The following cases proceeded by way of action: Gourmet Resources International Inc. (Trustee of) v. Paramount Capital Corp., [1991] O.J. No. 2293 (Ont. Ct. Gen Div.) (Q.L.); Dent Wizard International Corp. v. Sears, [1999] O.J. No. 1987 (Superior Ct. Justice) (Q.L.); Black Gold Potato Sales Inc. v. Garibaldi, [1994] O.J. No. 1163 (C.J., Gen. Div.) (Q.L.); Bedell v. Gefaell (No. 1), [1938] O.R. 718 (C.A.); Four Embarcadero Center Venture v. Kalen, [1998] O.J. No. 411 (H.C.J.) (Q.L.); Rutledge v. United States Savings and Loan Co., [1906] 37 S.C.R. 546. That is not to say that a common law application could not be brought for recognition of a foreign judgment if such application met the requirements of Civil Procedure Rule 9.02.
[42] A court hearing an action for recognition and enforcement of a judgment of a court of a sister province against a non-resident defendant of the sister province would need to have facts upon which it could reach a reasoned conclusion as to whether or not the court of the sister province properly exercised jurisdiction.
[43] The proceeding to enforce the Ontario judgment ought to have been commenced by way of originating notice (action) as there are questions of fact that would have to be resolved in order to determine whether a court in Nova Scotia or Ontario was the proper forum for adjudication of the appellant’s contractual claim. The evidence of Mr. Rudderham, as set forth in his affidavit, is that Sysco was not a resident of or doing business in Ontario in 1977. Furthermore, there is no one at Sysco who remembers anything about the claim out of which the Ontario judgment arises. While Mr. Ross Ritchie says there were two separate contracts with Sysco he has not produced any evidence from which the Court could be satisfied that the preparation of the report was not part and parcel of the alleged contract made to assess the equipment at the Sydney steel plant. The assessment of the equipment was, of necessity, carried out at the plant in Nova Scotia. The Report was apparently written in Ontario.
[44] The appellant’s counsel took the view that Justice Goodfellow could not look behind the Ontario judgment for any purpose. With respect, that view seems to me to be wrong. It is quite apparent from the decision in Morguard Investments Ltd. v. de Savoye, [1990] 3 S.C.R. 1077 that the Supreme Court of Canada is of the opinion that the constitutional structure of Canada, while it demands that provinces recognize and enforce the judgments of sister provinces, that right is predicated on the provincial superior court (that is considering whether or not the judgment of a sister province should be recognized), being satisfied that the judgment in question was a result of the court in which the judgment was entered having properly or appropriately exercised jurisdiction in the action ([1990] 3 S.C.R. at 1102 - 1103).
[45] In Morguard at 3 S.C.R. p. 1103, LaForest, J., writing for the Court, stated:
... the taking of jurisdiction by a court in one province and its recognition in another must be viewed as correlatives, and I added that recognition in other provinces should be dependent on the fact that the court giving judgment “properly” or “appropriately” exercised jurisdiction. It may meet the demands of order and fairness to recognize a judgment given in a jurisdiction that had the greatest or at least significant contacts with the subject-matter of the action. But it hardly accords with principles of order and fairness to permit a person to sue another in any jurisdiction, without regard to the contacts that jurisdiction may have to the defendant or the subject-matter of the suit; see Joost Blom, “Conflict of Laws — Enforcement of Extraprovincial Default Judgment — Reciprocity of Jurisdiction: Morguard Investments Ltd. v. De Savoye” (1989), 68 Can. Bar Rev. 359, at p. 360. Thus, fairness to the defendant requires that the judgment be issued by a court acting through fair process and with properly restrained jurisdiction.
[46] LaForest, J. then posed the question:
... when has a court exercised its jurisdiction appropriately for the purposes of recognition by a court in another province?
[47] He answered the question as follows:
This poses no difficulty where the court has acted on the basis of some ground traditionally accepted by courts as permitting the recognition and enforcement of foreign judgments — in the case of judgments in personam where the defendant was within the jurisdiction at the time of the action or when he submitted to its judgment whether by agreement or attornment. In the first case, the court had jurisdiction over the person, and in the second case by virtue of the agreement. No injustice results.
The difficulty, of course, arises where, as here, the defendant was outside the jurisdiction of that court and he was served ex juris. To what extent may a court of a province properly exercise jurisdiction over a defendant in another province? The rules for service ex juris in all the provinces are broad, in some provinces, Nova Scotia and Prince Edward Island, very broad indeed. It is clear, however, that if the courts of one province are to be expected to give effect to judgments given in another province, there must be some limits to the exercise of jurisdiction against persons outside the province.
[48] He concluded, after reviewing several cases and commentaries, that the approach of permitting suit in the province where there is a real and substantial connection with the action provides a reasonable balance between the rights of the parties and that the approach affords some protection against being pursued in jurisdictions having little or no connection with the transaction or the parties.
[49] Although he expressly stated that it was unnecessary to pronounce definitively on the constitutionality of rules respecting service out of the jurisdiction, LaForest, J. found attractive the view that a substantial connection between the defendant outside the jurisdiction and the forum province must be:
... of a kind which makes it reasonable to infer that the defendant has voluntarily submitted himself to the risk of litigation in the courts of the forum province.
[50] The burden of proving that the Court granting the judgment had jurisdiction to do so upon a recognized ground rests on the plaintiff seeking, by common law action, enforcement and recognition of the foreign judgment (Castel, 4th, p. 273; Adams v. Cape Industries plc, (1990), 2 W.L.R. 657 at p. 765). I recognize Justice LaForest’s view in Morguard that the courts in the past have made a serious error in transposing the rules developed for the enforcement of foreign judgments to the enforcement of judgments from sister provinces. He indicated that the considerations underlying the rules of comity apply with much greater force between the units of a federal state such as Canada. However, it seems reasonable to me to apply the principle expressed in Adams v. Cape Industries plc to a common law action for recognition of a judgment of a sister province as the principle accords with the standard rule that the burden is on a plaintiff to prove the necessary facts to support the plaintiff’s claim for recognition of a judgment of a sister province. The appellant did not bring an application under the Reciprocal Enforcement of Judgments Act, R.S.N.S. 1989, c. 388. Under that Act the burden of proving that the provincial court granting the judgment improperly exercised jurisdiction would be on the judgment debtor (s. 3(5) and s. 7). Applications for registration of a judgment of a reciprocating state under that Act must be brought within six years of the entry of the judgment. The appellant was clearly out of time.
[51] The appellant’s application proceeded on the basis of Ross Ritchie’s opinion that the contract giving rise to the appellant’s cause of action was a separate contract made in Ontario. Rudderham’s affidavit puts this assumption in dispute. In 1981, when the Ontario judgment was entered, the real and substantial connection test expressed in Morguard did not exist. There is no evidence that Sysco had consented to or attorned to the jurisdiction of the Ontario court. There is evidence that Sysco was not a resident of or doing business in Ontario. Assuming, without deciding, that a Nova Scotia court, in 2001, should apply the real and substantial connection test expressed in Morguard in 1990 when considering whether or not to recognize the Ontario judgment entered in 1981, the facts adduced by the appellant, in the face of the Rudderham evidence and the fact that the appraisal of the equipment was carried out in Nova Scotia, appear to be insufficient to prove that there was a real and substantial connection between the parties or the transaction, and the Province of Ontario. Furthermore, when one considers the provisions of the Sysco Act, the Proceedings Against the Crown Act and the facts, to the extent known, is the “connection” to Ontario of a kind that would make it reasonable to infer that Sysco had voluntarily submitted itself to the risk of litigation in the courts of Ontario?
[52] In summary, the appellant’s proceeding should have been commenced by originating notice (action) as this would have been the appropriate procedure in which all the facts necessary to resolve the legal questions could be assembled and effectively put before the Nova Scotia court and a proper decision rendered on the disputed facts. Justice Goodfellow did not err in dismissing the application on the ground that the proceedings did not fit within Civil Procedure Rule 9.02.
[53] Justice Goodfellow did not err in dismissing the application on the ground that there was not proof of service of the notice of the appellant’s claim on Sysco. He concluded that the appellant had ample time to obtain the Affidavit of Service and did not do so. The facts support his conclusion.
[54] In my opinion, the appellant has failed to meet the so-called Palmer test for the admission of fresh evidence in this Court. In Thies v. Thies (1992), 110 N.S.R. (2d) 177, this Court applied the Palmer test in civil proceedings and the procedure established in R. v. Nielsen and Stolar , [1988] 1 S.C.R. 480 for dealing with such applications. In Thies, Freeman, J.A. at p. 179 stated:
The test for the admission of fresh evidence on appeals was set out by McIntyre, J. writing for the Supreme Court of Canada in R. v. Palmer (1979), 30 N.R. 181; 50 C.C.C. (2d) 193 (S.C.C.):
(1) the evidence should generally not be admitted if, by due diligence, it could have been adduced at trial provided that this general principle will not be applied as strictly in a criminal case as in civil cases ...
(2) the evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;
(3) the evidence must be credible in the sense that it is reasonably capable of belief, and
(4) it must be such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.
The procedure which should be followed when an application is made to a court of appeal for the admission of fresh evidence is set out by McIntyre, J., again writing for the Supreme Court of Canada, in R. v. Neilson and Stolar (1988), 82 N.R. 280; 52 Man. R. (2d) 46, 40 C.C.C. (3d) 1, at p. 8:
‘... the motion should be heard and, if not dismissed, judgment should be reserved and the appeal heard. In this way, the Court of Appeal has the opportunity to consider the question of fresh evidence against the whole background of the case and all the other evidence in the case. It is then in a position where it can decide realistically whether the proffered evidence could reasonably have been expected to affect the result of the case. If, then, having heard the appeal, the court should be of the opinion that the evidence could not reasonably have affected the result, it would dismiss the application for the introduction of fresh evidence and proceed to the disposition of the appeal. On the other hand, if it should be of the view that the fresh evidence is of such nature and effect that, taken with the other evidence, it would be conclusive of the issues in the case, the Court of Appeal could dispose of the matter then and there. Where, however, the fresh evidence does not possess that decisive character which would allow an immediate disposition of the appeal but, nevertheless, has sufficient weight or probative force that if accepted by the trier of fact, when considered with the other evidence in the case, it might have altered the result at trial, the Court of Appeal should admit the proffered evidence and direct a new trial where the evidence could be heard and the issues determined by the trier of fact.’ (emphasis added)
[55] While the evidence of Mr. Hatcher is both relevant and credible, I would not admit the Hatcher affidavit as by due diligence it could have been adduced at Chambers on November 14th, 2000. As early as September 2000, counsel for Sysco requested the Affidavit of Service. On October 10th, 2000, Ms. Clark advised Sysco’s counsel that the affidavit in proof of service of the notice of claim on Sysco was irrelevant to the question of whether or not the Ontario judgment was enforceable in Nova Scotia. It was on November 14th, 2000, that the application was dismissed. I would note that on that date, counsel for the appellant advised Mr. John Ritchie that the application had been dismissed. Three days later on November 17th, Mr. Ritchie had obtained the Affidavit of Service from the Ontario Court.
[56] The evidence also fails the fourth requirement of the Palmer test. Fresh evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced, be expected to have affected the result. Having concluded that the proceeding should have been commenced by way of originating notice (action) and not an application inter partes, and having been satisfied that Justice Goodfellow did not err in dismissing the application on that basis, admission of the Hatcher affidavit would not have affected the result, namely, that the appellant’s application was dismissed.
[57] Counsel for the appellant has submitted that the Palmer test should not be applied to this application. I see no reason to depart from the standard test for the admission of fresh evidence as established in Palmer and applied by this Court in the civil proceedings. In my opinion the decision in Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897 relied on by the appellant in argument for the admission of the evidence has no application. That case dealt with an appeal from the granting of an interlocutory injunction. The application before Justice Goodfellow was not of an interlocutory nature. There is no reason to follow Amchem, that decision turned on unique facts of that proceeding. With respect to the proceeding before Justice Goodfellow, the appellant had an opportunity to put before the Court all relevant material but did not do so. Nor do I feel the decision of this Court in Cavanagh v. Cavanagh (1999), 175 N.S.R. (2d) 331 (C.A.) has application. In that case the fresh evidence did not relate to the issues before the trial court as in this appeal, but rather, related to an allegation that the trial was unfair as the appellant alleged that he had been denied assistance of counsel. This Court admitted the evidence relating to this issue but dismissed that ground of appeal to which the fresh evidence related. The decision of this Court in Irving v. Irving (1994), 164 N.S.R. (2d) 330, where the Court concluded that the test in Palmer was not the appropriate test to apply on the application to adduce the kind of evidence that was before the Court in Irving, is of no assistance to the appellant. In Irving the evidence sought to be introduced related to an issue that was not before the trial judge. This Court admitted the evidence but dismissed the appeal. In the fresh evidence application before us, the evidence relates to one of the key issues that was before Goodfellow, J.; that is, whether or not Sysco was properly served with a notice of the appellant’s claim prior to the Ontario judgment being entered in 1981. I cannot see that there are any special circumstances that ought to be exercised in this case to admit the evidence by application of a test other than Palmer.
[58] The appellant’s application was dismissed on procedural grounds. In exercising his discretion to dismiss the application on such grounds, Justice Goodfellow stated that it was open to the appellant to commence an action for recognition and enforcement of the Ontario judgment. Whether the action will be successful or not is another question. However, the appellant’s opportunity to bring an action for recognition and enforcement of the Ontario judgment no doubt influenced Justice Goodfellow in not granting the adjournment requested by the appellant. He did not err in the exercise of his discretion.
[59] There are a number of issues raised on this appeal, including conflicts of law questions and Crown immunity for Sysco. It is not necessary to deal with all of the issues in view of my disposition of the appeal but I will comment briefly on the issue of Crown immunity for Sysco as this was a matter that was argued vigorously with representations from the Attorney General of Nova Scotia assisting the Court. This is an issue which can be put to rest. I agree with the submission of Ms. Clark that; (i) Sysco is not Her Majesty in the Right of the Province of Nova Scotia (the Crown); and (ii) that s. 24 of the Sysco Act does not confer Crown status on Sysco.
[60] Historically, the Crown was immune from legal proceedings. The Proceedings Against the Crown Act did not confer immunity on the Crown. The purpose of that Act was simply to waive Crown immunity to the extent provided in that Act. The Sysco Act does not say that Sysco is the Crown; it does not even say that Sysco is a Crown corporation. On this basis, together with an analysis of what Sysco does, this Court in Sydney Steel Corp. v. AL E & C Ltd. (1983), 58 N.S.R. (2d) 369 (C.A.) decided that Sysco was not entitled to Crown immunity so as to defeat a limitation of actions defence in a claim which Sysco had initiated. Sysco does not have Crown immunity, either under its own Act or pursuant to the Proceedings Against the Crown Act.
[61] However, subject to the provisions of s. 24 of the Sysco Act, it is a corporation to which the provisions of the Proceedings Against the Crown Act apply mutatis mutandis. There are still a number of questions that need to be answered respecting the interpretation of s. 24 of the Sysco Act and the extent to which the Proceedings Against the Crown Act has application to these proceedings and the proceedings that resulted in the Ontario judgment. Included in those questions is whether or not s. 24 of the Sysco Act and/or ss. 10, 17(2) and 18 of the Proceedings Against the Crown Act are procedural or substantive provisions.
[62] In summary, as I am satisfied that Justice Goodfellow did not err in dismissing the application before him on procedural grounds. I would dismiss the appeal with costs to the respondent in the amount of $1500 plus disbursements.
Hallett, J.A.
Concurred in:
Freeman, J.A.
Flinn, J.A.