MICHAEL WEIR et al v SIMANIC DEVELOPMENTS INC. et al

THE I IN THE HI COURT OP JUSTI s~r. CHRISTOPHER FE DERA'r I s (CIVIL) NO. 125 OF 1996 BETWEEN: MICHAEL WEIR and IGNA'r KANEFF -AND- s SIMANIC DEVELOPMENTS INC. and MICHAEL SIMANIC Mr. J. Quinlan for PI if Mr. D. Kelsick for" t [)efenllllnts 30th -"lay, 1 -lYPJiMIi_NT Mll.NDEM.I:_"~_!_. Litigation plaintiffs and ts going on for srune t . It started in On 88 when a company call simanic Developments Inc. (" ) , brought suit against Messrs. Weir and Kaneff, fs Justice dismis was ordered to Y costs.

2.is al e t the costs were duly ass Ontario at Can.$85,182.63. They are quite anxious to n:cover those costs. They have d(i!e ided to go after Simanic in Federation. of st. Christopher and Nevis. They wish to enforce Canadian award of costs. To this end they filed a specially endorsed writ in. this jurisdiction in December, 199('5. There was some delay in the filing of a Defence. A judgment in default of defence was accordingly entered by the plaintiffs on 3rd February, 1997. Simanic promptly applied to set aside ~ this judgment. They argued that they had a good defence to the action. Their defence was that the alleged assessment of costs was never made. In any event, they claimed, the Cunudian taxation proceedings were tainted because of certain irregularities. 'I1b.ey <ire currently pursuing thtlt lUtltter in the courts in Canada. The application to set aside the default judql11ent obtained in these courts was heard by the Hon. Mr. Justice Smith. His order was to the effect that the judgment of the plaintiffs will be set aside if simanic plettded in their Defence that they had applied in Canada to set aside the taxation of the costs. Such a Defence was duly filed. On the 21st March, 1997, the default judgment entered by the plaintiffs was set aside The plaintiffs {-ire not satisfied. They e<.msider thtit the Defence as filed has no merit. 'l'hey have accordingly applied by II sununons to this court for an ordel.- that the Defence be struck out. They say that no pl.-opel' defence ill law to their claims is disclosed. It is this swmnons of the plaintiffs whicb came before me on Friday 9th May, 1997. Hr. Quinlan for the plaintif f s conceded tila t n }tiotion had indeed been filed by Simu.nic in Ontario. It must be 138.1d however that this court would have been much better served if we ha.d been given greater details about thiH Canadian Motion. At rate it was agreed that the filed Mot tween these

3.same parties and that the costs wel-e thereby chall Notwithstanding the pendency of the Motion in Cowlsel for the plaintiffs insisted that the Canadiun judgment is enforceable here. '1'he learning, he states, clearly suggests that even where a foreign judgment is appe~led or subject to appeal, it is still enforceable as lony us there is no stay of execution. The Ontario taxation proceedings, he asserted, are "intrinsic to the Ontario Judgment and are accordingly clothed with its legal cOllsequences i.e. enforceability in the • jurisdiction even if liable to be set aside in Canada." Counsel refel-red me to a number of authorit including COL~ INDUS~RIES, INC. vs. SARLIE (l966) 3 A.E.R. 85; BERLINER -i ,'INDUS~RIEBANK va. JOS~ (l97l) 2 A.,E.R. l5l3; and HALSB. 4t.h Edn. Vol. 8 Para. 134. Mr. Quinlan obviously linked together as a single, indivisible package the order in Canada awarding costs to the plaintiffs and the alleged assessment that had been made of those costs. He did not quite put it this way but I understand his submission to be thut this court ought not to concern itself with whether there has been any irregularity in the assessment • procedure. Once the costs huve been assessed, howsoever they may have been, they become an "intrinsic" part of the judgment at once fully enforceable in St. Christopher and Nevis. " The case of NOUVION vs. FREEMAN (l889) l5 App. Cas. l, particularly the jUdgment therein of Lord Herschell, is regarded as one of the leading autllorities on the principles governing the enforcement of foreign judgments. It is referred to by all of the authorities cited by Hr. Quinlan. It is 8 case of the House of Lords. I believe it would be salutary to quote at some length

4.from the judgment of Lord Herschell. At pages 9 10 he said this about foreign judgments which are sought to be " •• it must be shewn that such a judgment ••.•• conclusively, finally, and for ever established the existence of the debt •••••• so as to make res judicata between the parties. If it not conclusive in the same court which pronounced so that notwithstanding such a judgment the existence of the debt may between the same parties be afterwards contested in that court, and upon proper proceedings being taken and such contest being adjudicated upon, it may be declared that there existed no obligation to pay the debt at all, then I do not think that a judgment which that character can be regarded as finally and conclusively evidencing the debt, and so entitling the person who has obtained the judgment to claim a decree from our courts for the payment of that debt: The principle upon which I think our enforcement of foreign judgments must proceed is this: that in~a Court of competent jurisdiction, where according its established procedure the whole merits of the case were open, at all events, to the parties, however much they have failed to take advantage of them, or may have waived any of their rights, a final adjudication has -i been given that a debt or obligation exists which ,',' cannot thereafter in that cout't be disputed, aud can only be questioned in an appeal to a higher tribunal. In such a case it may well be said that to the Courts of another country we are take the fact that such adjudication has establishing the existence of the debt or Altllough that jud9ment was given over 100 years , is good law and I intend fully to heed Lord Herscheli/s observations. It would seem to me tllat in light of the nature of the objections made against the assessment procedure in Canada, the II Ontario award of costs is liable to be set aside by the very court whose judgment is sought to be enforced locally ie the Ontario Court of Justice (General Division). In the course argument, Mr. Quinlan admitted that in light of the pending Ontario Motion, the plaintiffs would not now be able to enforce in Ontario the specific award of costs that were assessed. Hy understanding is that enforceability of the award in Canada will have to await the determination of the Hotion. If that award cannot He enforced in Canada, then how can it be enforced here? I would have thought that the efficacy and validity of the foreign judgment in the country in which it originated is a precondition to its enforceability in this jurisdiction. 5 • , It was sought to draw the analogy of a pending appeal where has bewl no stay of execution. Undoubtedly, as pointed out by Lord Herschell, in such instances the f0~eign judgment may yet be enforced locally. Despite its challenge in a court of appellate jurisdiction in the foreign country such a judgment is still, pro tem, a fina~ and conclusive judgment. The lower court that pronounced on it would have finally and conclusl".ely determined the matter even though a higher tribunal may at some time in the future reverse the lower court. On this basis, provided that there is no general stay of execution, an action can be brought to wlforce such a judgment during the pendency of the appeal. See COL~ INDUS~RIKS. ~ This does not seem to be the case here. In one sense there is in some respects a final judgment. Costs to Messrs. Weir and Kaneff. But that judgment per se cannot be enforced until and unless those costs are first assessed. The assessment of the costs ~s itself a proceeding of a judicial nature. While that assessmwlt remains inconclusive, as 1 apprehend to be the case, -\. l' it cannot be said that every ingredient of the judgment which is sought to be enforced is "final and conclusive". There is also another issue which was raised by Counsel for th9 defendants. He submitted that this application is an attempt to revisit the order made by Justice smith and ought not to be entertained. There is some merit in this submission. The default judgment was set aside on the specific basis of the defendants filing a defence "showing that they have made a valid application to the relevant authorities in Canada to set aside the Taxation of Costs ••• 11 What good would Justice Smith's order <be if 1 were now to turn around and strike out that very defence? ~ Finally, Counsel for the plaintiffs urged that in the event that the Defence was not struck out this court should order that t~e costs be paid into court. ~ V I considered this submission ~t some lengtb. If both counsel had agreed that the Canadian authorities at the end of the day would award oosts of at least ~ certain minimum figure, then this submission would have been an attractive one. After all, ultimately the defendants will have to pay the plaintiffs some costs. But there was no such agreement and there is nothing before me which qives me any idea as to what those costs, properly taxed, are likely to be. They may remain at the current f\ V

6.figure or they may be varied. In the final analysis, I believe that ordering the defendants to pay into court a sum that is being questioned would be inconsistent with my earlier reasoning. This is an action to enforce a foreign judgment. Such a cause of action would ordinarily be dismissed if it is proved that the fOJ!lleign judgment is not final or conclusive. In my view, the judgment to be enforced is not yet in all respects final and conclusive. If I am right in this then there is at this point in time nothing to enforce save a general award of costs to the plaintiffs in the abstract. Until there is clarity from the court pronouncing the judgment in Canada as to p.reci~ely what those costs are, it is my view that this action should be stayed. I would so order. __ &~~~:_~ ____ L"""""' _____ _ Adrian D. Saunders High Court Judge /I

Suit NO. 125 OF 1996 Saunders, J. Delivered: 30/05/97