| Morguard Investments Ltd. v. De Savoye | |||||||||
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| Hearing: April 23, 1990 Judgment: December 20, 1990 |
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| Holding | |||||||||
| A foreign judgment from another province will be enforced where there is a "real and substantial connection" to the forum | |||||||||
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Chief Justice: Brian Dickson |
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| Reasons given | |||||||||
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Unanimous reason by: La Forest J. |
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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.
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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.
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.
Justice La Forest wrote the unanimous reasons of court for dismissing the appeal. After surveying the case law in both England and the United States he noted that the old common law rules, based on territoriality, sovereignty, independence and attornment, were outdated.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.[1] The solution was to limit the jurisdiction to where there is a "real and substantial connection" between the action and the province.[2] He intentionally left the meaning of "real and substantial connection" open, stating
It seems to me that the approach of permitting suit where there is a real and substantial connection with the action provides a reasonable balance between the rights of the parties. It affords some protection against being pursued in jurisdictions having little or no connection with the transaction or the parties. In a world where even the most familiar things we buy and sell originate or are manufactured elsewhere, and where people are constantly moving from province to province, it is simply anachronistic to uphold a "power theory" or a single situs for torts or contracts for the proper exercise of jurisdiction.—at 1108-1109
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: