Beals v. Saldanha et al., (2001) 148 O.A.C. 1 (CA)

• Judge: Catzman, Doherty and Weiler, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 29, 2001
• Jurisdiction: Ontario
• Citations: (2001), 148 O.A.C. 1 (CA)

Beals v. Saldanha (2001), 148 O.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2001] O.A.C. TBEd. JL.002

Frederick H. Beals, III and Patricia A. Beals (plaintiffs/appellants) v. Geoffrey Saldanha, Leueen Saldanha, Dominic Thivy and Rose Thivy (defendants/respondents) and William Kelly (third party)

(C31065)

Indexed As: Beals v. Saldanha et al.

Ontario Court of Appeal

Catzman, Doherty and Weiler, JJ.A.

June 29, 2001.

Summary:

The plaintiffs' offer to purchase the defendants' Florida land (lot 2) referred to lot 1. The defendants amended the offer to read lot 2 and returned it. The plaintiffs accepted this counter offer and began construction on lot 1. The plaintiffs discovered that they had been building on the wrong lot and sued the defendants in Florida for recision and damages. The defendants were noted in default for failure to comply with a procedural rule that they were unaware of. A jury assessed damages and awarded the plaintiffs $260,000 U.S. including $50,000 U.S. punitive damages. An Ontario lawyer advised two of the defendants (the Saldanhas) that the Florida judgment was unenforceable in Ontario because they had not attorned to the jurisdiction. The lawyer was unaware that, because of a Supreme Court of Canada decision rendered almost a year earlier, there was a significant risk that the Florida decision was enforceable in Canada. The Saldanhas took no steps to set aside the Florida judgment. The plaintiffs sued to enforce the Florida judgment in Ontario. The defendants asserted that the judgment was unenforceable because it was obtained by fraud or, alternatively, because to do so would be contrary to the principles of natural justice and public policy. In the event that the plaintiffs' action succeeded, the Saldanhas sought indemnity from the Ontario lawyer.

The Ontario Court (General Division), in a judgment reported at 81 O.T.C. 161, held that the Florida judgment was unenforceable on the ground of fraud relating to damages. Alternatively, the court would have refused to enforce the judgment on the basis of public policy. Had the Florida judgment been enforceable in Ontario, the court would have allowed the Saldanhas' indemnity claim. The plaintiffs appealed. One of the defendants (Thivy) asserted that her assignment in bankruptcy and discharge therefrom relieved her of any liability she may have had to the plaintiffs.

The Ontario Court of Appeal, Weiler, J.A., dissenting, allowed the appeal as against all the defendants except Thivy. The court affirmed the dismissal of the action against Thivy.

Bankruptcy - Topic 8981

Discharge of debtor - Liabilities not released by discharge - General - Plaintiffs commenced an action in Ontario to enforce a Florida judgment against Thivy and others - Thereafter, Thivy made an assignment in bankruptcy and obtained an absolute discharge - The trustee in bankruptcy was discharged - There was no dividend paid to creditors - The Florida plaintiffs were not listed as creditors - In her defence to the Ontario action, Thivy pleaded her bankruptcy and her subsequent discharge in her statement of defence - Despite that pleading, the plaintiffs did not seek leave to continue the Ontario action against Thivy or to prove any claim in the bankruptcy - The Ontario Court of Appeal held that Thivy's discharge released her from the debt represented by the Florida judgment where the failure to list the plaintiffs as creditors in the bankruptcy was not intentional or fraudulent - See paragraphs to 86 to 94.

Conflict of Laws - Topic 6661

Foreign judgments - Action on foreign judgment - General principles - The Ontario Court of Appeal stated that "[t]he correctness in fact or in law of a foreign judgment is irrelevant in an action to enforce that judgment in Ontario. This is so regardless of whether the foreign judgment followed a trial of the merits or a default ... As the correctness of the decision of the foreign court is irrelevant, it follows that the merits of the claim or the merits of defences to the claim are equally irrelevant." - See paragraph 36.

Conflict of Laws - Topic 6661

Foreign judgments - Action on foreign judgment - General principles - The Ontario Court of Appeal stated that some Canadian authorities permit a defendant to rely on allegations of fraud which go to the merits of the claim determined by the foreign judgment, but only where the defendant relies on new facts or newly discovered facts to support the allegation of fraud - New facts referred to facts which came into existence after the foreign judgment was obtained - Newly discovered facts referred to facts which existed at the time the foreign judgment was obtained but were not known to the defendant - Newly discovered facts were limited to those facts which could not have been discovered prior to the granting of the foreign judgment through the exercise of reasonable diligence - See paragraphs 40 to 44.

Conflict of Laws - Topic 6663

Foreign judgments - Action on foreign judgment - Bars - Plaintiffs in a Florida action obtained default judgment against defendants resident in Ontario, because of the defendant's noncompliance with a procedural rule - A Florida jury assessed damages - An Ontario trial judge refused to enforce the judgment in Ontario because the assessment of damages had been obtained by fraud in the Florida court or, alternatively, because of public policy - The Ontario Court of Appeal held that the judgment was enforceable in Ontario - With respect to the fraud defence, the trial judge erred in relying on facts that could have been discovered prior to the Florida judgment by the exercise of reasonable diligence - Further, there was no evidence that the Florida jury was deliberately misled on the damage assessment - Enforcement of the judgment would not contravene public policy - The defence of public policy was to be applied narrowly.

Practice - Topic 5921

Judgments and orders - Enforcement of foreign judgments - General - [See both Conflict of Laws - Topic 6661 ].

Practice - Topic 5927

Judgments and orders - Enforcement of foreign judgments - Bars - Public policy - [See Conflict of Laws - Topic 6663 ].

Practice - Topic 5928

Judgments and orders - Enforcement of foreign judgments - Defences - [See Conflict of Laws - Topic 6663 ].

Practice - Topic 5934

Judgments and orders - Enforcement of foreign judgments - Registration or enforcement - Defences - [See Conflict of Laws - Topic 6663 ].

Cases Noticed:

Morguard Investments Ltd. et al. v. De Savoye (1990), 122 N.R. 81; 76 D.L.R.(4th) 256 (S.C.C.), refd to. [paras. 34, 108].

United States of America v. Ivey et al. (1996), 93 O.A.C. 152; 30 O.R.(3d) 370 (C.A.), affing. (1995), 26 O.R.(3d) 533 (Gen. Div.), leave to appeal refused [1996] S.C.C.A. No. 582; 218 N.R. 159; 104 O.A.C. 80 (S.C.C.), refd to. [paras. 36, 116].

Four Embarcadero Center Venture v. Kalen (1988), 65 O.R.(2d) 551 (H.C.), refd to. [para. 36].

Powell v. Cockburn (1976), 8 N.R. 215; 68 D.L.R.(3d) 700 (S.C.C.), refd to. [para. 37].

Abouloff v. Oppenheimer (1882), 10 Q.B.D. 295, refd to. [para. 38].

Owens Bank Ltd. v. Bracco, [1992] 2 All E.R. 193 (H.L.), refd to. [para. 38].

Roglass Consultants Inc. v. Kennedy (1984), 65 B.C.L.R. 393 (C.A.), refd to. [para. 39].

Jacobs v. Beaver (1908), 17 O.L.R. 496 (C.A.), refd to. [paras. 40, 156].

India et al. v. Bumper Development Corp., [1995] 7 W.W.R. 80; 171 A.R. 166 (Q.B.), leave to appeal refused [1996] 3 S.C.R. vi; 206 N.R. 71; 193 A.R. 240; 135 W.A.C. 240, refd to. [para. 40].

International Corona Resources Ltd. v. LAC Minerals Ltd. (1988), 66 O.R.(2d) 610 (H.C.), refd to. [paras. 44, 157].

Whitehall Development Corp. v. Walker et al. (1977), 17 O.R.(2d) 241 (C.A.), affing. (1977), 15 O.R.(2d) 130 (C.A.), refd to. [paras. 44, 157].

Boardwalk Regency Corp. v. Maalouf (1992), 51 O.A.C. 64; 6 O.R.(3d) 737 (C.A.), refd to. [para. 83].

Smyth, Re (1965), 8 C.B.R.(N.S.) 202 (Ont. S.C.), refd to. [para. 92].

Hill v. Church of Scientology of Toronto and Manning (1992), 7 O.R.(3d) 489 (Gen. Div.), affd. (1994), 71 O.A.C. 161; 114 D.L.R.(4th) 1 (C.A.), affd. [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1; 126 D.L.R.(4th) 129, refd to. [paras. 98, 124].

Moses v. Shore Boat Builders Ltd. (1993), 35 B.C.A.C. 146; 57 W.A.C. 146; 106 D.L.R.(4th) 654 (C.A.), leave to appeal refused (1994), 172 N.R. 157; 48 B.C.A.C. 239; 78 W.A.C. 239; 109 D.L.R.(4th) vii (S.C.C.), refd to. [para. 16].

Arrowmaster Inc. v. Unique Forming Ltd. (1993), 17 O.R.(3d) 407 (Gen. Div.), refd to. [para. 116].

Hilton v. Guyot (1985), 159 U.S. 113, refd to. [para. 116].

R. v. Spencer (1985), 62 N.R. 81; 11 O.A.C. 207; 21 D.L.R.(4th) 756 (S.C.C.), refd to. [para. 116].

Hunt v. T & N plc - see Hunt v. Lac d'Amiante du Québec Ltée et al.

Hunt v. Lac d'Amiante du Québec Ltée et al., [1993] 4 S.C.R. 289; 161 N.R. 81; 37 B.C.A.C. 161; 60 W.A.C. 161, refd to. [para. 117].

Pemberton v. Hughes, [1899] 1 Ch. 781, refd to. [para. 123].

Monaco (Minister of State of the Principality) v. Project Planning Associates (International) Ltd. (1980), 32 O.R.(2d) 438 (Div. Ct.), refd to. [para. 123].

Reference Re Section 94(2) of the Motor Vehicle Act (B.C.), [1985] 2 S.C.R. 486; 63 N.R. 266, refd to. [para. 124].

Adams v. Cape Industries plc, [1991] 1 All E.R. 929 (C.A.), leave to appeal refused [1991] 1 All E.R. 1054 (C.A.), refd to. [para. 125].

Gauthier Manufacturing Ltd. v. Pont Viau (Cité), [1978] 2 S.C.R. 516; 21 N.R. 192, refd to. [para. 152].

Chitel v. Rothbart (1988), 29 C.P.C.(2d) 136 (Ont. C.A.), leave to appeal refused (1989), 98 N.R. 132; 34 O.A.C. 399 (S.C.C.), refd to. [para. 158].

Anderson v. Toronto-Dominion Bank (1986), 9 C.P.C.(2d) 179 (B.C.C.A.), refd to. [para. 158].

Canadian Fire Insurance Co. v. Robinson (1901), 31 S.C.R. 488, refd to. [para. 165].

Umlauf v. Umlauf (2001), 142 O.A.C. 328 (C.A.), refd to. [para. 165].

Family Trust Corp. v. Harrison (1986), 7 C.P.C.(2d) 1 (Ont. Dist. Ct.), refd to. [para. 165].

Bowman v. Kingsland Development Inc. (1983), 432 So.2d 660 (Fla. 5th Dist. Ct. App.), refd to. [para. 165, footnote 5].

Authors and Works Noticed:

Castel, J.-G., Canadian Conflict of Laws (4th Ed. 1997), pp. 161, 162 [para. 165].

Houlden, L.W., and Morawetz, C.H., Bankruptcy and Insolvency Law in Canada (3rd Ed. Revised) (1998), pp. 6-1.41 [para. 92]; 6-120 [para. 91]; 6-140.1 [para. 92].

O'Brien, J., Conflict of Laws (2nd Ed. 1999), pp. 275, 276, 277 [para. 122].

Counsel:

L. Levine, Q.C. and M. Boussidan, for the appellants;

P. Lukasiewicz and S. Stamm, for the respondents, Saldanhas;

N. Roth, for the respondents, Thivys.

This appeal was heard on May 8 and 9, 2000, by Catzman, Doherty and Weiler, JJ.A., of the Ontario Court of Appeal. The judgment of the court was released on June 29, 2001, including the following opinions:

Doherty, J.A., (Catzman, J.A., concurring) - see paragraphs 1 to 107;

Weiler, J.A., dissenting - see paragraphs 108 to 175.