Morguard Investments Ltd. v. De Savoye
Encyclopedia
Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 is the leading decision of the Supreme Court of Canada
on the enforcement of extraprovincial judgments. The Court held that the standard for enforcing a default judgment
from a different province is not the same as if it were from another country; rather the Court adopts the test from Indyka v. Indyka, [1969] 1 A.C. 33 (H.L.
) and the Moran v. Pyle National (Canada) Ltd.
, [1975] 1 S.C.R. 393 where there must be a "real and substantial connection
" between the petitioner and the country or territory exercising jurisdiction.
The appellant chose not to appear or defend his actions. The respondents obtained judgment ex juris in the foreclosure action, and then obtained orders for the judicial sale of the properties. They then initiated separate action in the British Columbia Supreme Court to enforce the Alberta judgments for the shortfall.
, independence and attornment
, were outdated. La Forest argued that a modern approach based on the principle of comity
("the deference and respect due by other states to the actions of a state legitimately taken within its territory") and reciprocity
were needed a basis of recognizing foreign judgments. The infringement on the nation's sovereignty is justified where there is mutual convenience between states. The earlier views of distrusting the justice system of other countries, he argued, was outdated. Instead, he emphasized that the business community operates on a world economy and so the law must accommodate "the flow of wealth, skills and people across state lines".
On the basis of Canada's federal system comity should be even stronger between provinces, which share a much deeper bond than nations, based on shared citizenship and a common market.
For La Forest, the concern was to define an outer limit of comity. The solution was to limit the jurisdiction to where there is a "real and substantial connection" between the action and the province. He intentionally left the meaning of "real and substantial connection" open, stating
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
on the enforcement of extraprovincial judgments. The Court held that the standard for enforcing a default judgment
Default judgment
Default judgment is a binding judgment in favor of either party based on some failure to take action by the other party. Most often, it is a judgment in favor of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law...
from a different province is not the same as if it were from another country; rather the Court adopts the test from Indyka v. Indyka, [1969] 1 A.C. 33 (H.L.
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
) and the Moran v. Pyle National (Canada) Ltd.
Moran v. Pyle National (Canada) Ltd.
Moran v. Pyle National Ltd., [1975] 1 S.C.R. 393 is a leading Canadian case on conflict of laws decided by the Supreme Court of Canada. The decision represented the biggest transformation in the law of conflicts for over 15 years until the later case of Morguard Investments Ltd. v...
, [1975] 1 S.C.R. 393 where there must be a "real and substantial connection
Real and substantial connection
In Canadian law, a real and substantial connection or the real and substantial connection test is a legal principle used to determine whether a subject matter falls within a jurisdiction. The phrase was first adopted in Canada in the Supreme Court of Canada decision of ...
" between the petitioner and the country or territory exercising jurisdiction.
Background
De Savoye, the appellant, was the mortgagor of a property in Alberta and resided in British Columbia. The mortgage defaulted and the respondents brought action in Alberta, for the land they had mortgaged in that same province.The appellant chose not to appear or defend his actions. The respondents obtained judgment ex juris in the foreclosure action, and then obtained orders for the judicial sale of the properties. They then initiated separate action in the British Columbia Supreme Court to enforce the Alberta judgments for the shortfall.
Issue
The main question placed before the court was the degree of recognition that should be accorded by the courts of one province to the judgments of another for a personal action brought forward in the second province when the defendant did not reside there.Reasons of the court
Justice La Forest wrote the unanimous reasons of court for dismissing the case. After surveying the case law in both England and the United States he noted that the old common law rules, based on territoriality, sovereigntySovereignty
Sovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...
, independence and attornment
Attornment
Attornment , in English real property law, is the acknowledgment of a new lord by the tenant on the alienation of land. Under the feudal system, the relations of landlord and tenant were to a certain extent reciprocal...
, were outdated. La Forest argued that a modern approach based on the principle of comity
Comity
In law, comity specifically refers to legal reciprocity—the principle that one jurisdiction will extend certain courtesies to other nations , particularly by recognizing the validity and effect of their executive, legislative, and judicial acts...
("the deference and respect due by other states to the actions of a state legitimately taken within its territory") and reciprocity
Reciprocity (international relations)
In international relations and treaties, the principle of reciprocity states that favours, benefits, or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind....
were needed a basis of recognizing foreign judgments. The infringement on the nation's sovereignty is justified where there is mutual convenience between states. The earlier views of distrusting the justice system of other countries, he argued, was outdated. Instead, he emphasized that the business community operates on a world economy and so the law must accommodate "the flow of wealth, skills and people across state lines".
On the basis of Canada's federal system comity should be even stronger between provinces, which share a much deeper bond than nations, based on shared citizenship and a common market.
For La Forest, the concern was to define an outer limit of comity. The solution was to limit the jurisdiction to where there is a "real and substantial connection" between the action and the province. He intentionally left the meaning of "real and substantial connection" open, stating
Aftermath
The test established in this case was later elaborated on in Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (Ont. C.A.) The Court of Appeal listed eight factors to be considered when determining whether there is a real and substantial connection:- the connection between the forum and the plaintiff's claim;
- the connection between the forum and the defendant;
- unfairness to the defendant in assuming jurisdiction;
- unfairness to the plaintiff in not assuming jurisdiction;
- the involvement of other parties to the suit;
- the court's willingness to recognize and enforce an extraprovincial judgment rendered on the same jurisdictional basis;
- whether the case is interprovincial or international in nature; and
- comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere.
See also
- List of Supreme Court of Canada cases
- Beals v. SaldanhaBeals v. SaldanhaBeals v. Saldanha, [2003] 3 S.C.R. 416, 2003 SCC 72 is a leading Supreme Court of Canada decision on the conflict of laws, where the Court established the requirements to enforce foreign judgments in Canada...
, [2003] 3 S.C.R. 416, 2003 SCC 72 - affirmed in international setting - Hunt v. T&N plcHunt v. T&N plcHunt v. T&N plc, [1993] 4 S.C.R. 289 is a landmark decision of the Supreme Court of Canada on conflict of laws. The Court ruled that the Quebec law prohibiting the removal of company documents from the province was constitutionally inapplicable to a British Columbia court order. The decision was...
(1993)