Yaiguaje et al. v. Chevron Corp. et al., (2013) 313 O.A.C. 285 (CA)

• Judge: MacPherson, Gillese and Hourigan, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: November 01, 2013
• Jurisdiction: Ontario
• Citations: (2013), 313 O.A.C. 285 (CA);2013 ONCA 758

Yaiguaje v. Chevron Corp. (2013), 313 O.A.C. 285 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. DE.017

Daniel Carlos Lusitande Yaiguaje, Benancio Fredy Chimbo Grefa, Miguel Mario Payaguaje Payaguaje, Teodoro Gonzalo Piaguaje Payaguaje, Simon Lusitande Yaiguaje, Armando Wilmer Piaguaje Payaguaje, Angel Justino Piaguaje Lucitante, Javier Piaguaje Payaguaje, Fermin Piaguaje, Luis Agustin Payaguaje Piaguaje, Emilio Martin Lusitande Yaiguaje, Reinaldo Lusitande Yaiguaje, Maria Victoria Aguinda Salazar, Carlos Greea Huatatoca, Catalina Antonia Aguinda Salazar, Lidia Alexandria Aguinda Aguinda, Clide Ramiro Aguinda Aguinda, Luis Armando Chimbo Yumbo, Beatriz Mercedes Grefa Tanguila, Lucio Enrique Grefa Tanguila, Patricio Wilson Aguinda Aguinda, Patricio Alberto Chimbo Yumbo, Segundo Angel Amanta Milan, Francisco Matias Alvarado Yumbo, Olga Gloria Grefa Cerda, Narcisa Aida Tanguila Naryaez, Bertha Antonia Yumbo Tanguila, Gloria Lucrecia Tanguila Grefa, Francisco Victor Tanguila Grefa, Rosa Teresa Chimbo Tanguila, Maria Clelia Reascos Revelo, Heleodoro Pataron Guaraca, Celia Irene Viveros Cusangua, Lorenzo Jose Alvarado Yumbo, Francisco Alvarado Yumbo, Jose Gabriel Revelo Llore, Luisa Delia Tanguila Narvaez, Jose Miguel Ipiales Chicaiza, Hugo Gerardo Camacho Naranjo, Maria Magdalena Rodriguez Barcenes, Elias Roberto Piyahuaje Payahuaje, Lourdes Beatriz Chimbo Tanguila, Octavio Ismael Cordova Huanca, Maria Hortencia Viveros Cusangua, Guillermo Vincente Payaguaje Lusitande, Alfredo Donaldo Payaguaje Payaguaje and Delfin Leonidas Payaguaje Payaguaje (plaintiffs/appellants/respondents by way of cross-appeal) v. Chevron Corporation, Chevron Canada Limited and Chevron Canada Finance Limited (defendants/respondents/appellants by way of cross-appeal)

(C57019; 2013 ONCA 758)

Indexed As: Yaiguaje et al. v. Chevron Corp. et al.

Ontario Court of Appeal

MacPherson, Gillese and Hourigan, JJ.A.

December 17, 2013.

Summary:

The plaintiffs were indigenous Ecuadorian villagers who asserted that Chevron Corp. had extensively polluted an area of Ecuador. The plaintiffs obtained a judgment in Ecuador against Chevron for $9.51 billion (US) in environmental and health tort claim damages. They sought to enforce the judgment in Canada against Chevron and its Canadian subsidiary, Chevron Canada (the defendants). Without attorning to the court's jurisdiction, the defendants moved for an order setting aside the service ex juris of the claim against them, a declaration that the Ontario court had no jurisdiction to hear the action and an order dismissing or permanently staying the action.

The Ontario Superior Court, in a decision reported at [2013] O.T.C. Uned. 2527, held that the Ontario courts had jurisdiction to hear the action, but stayed the action on its own initiative under s. 106 of the Courts of Justice Act on the basis that Chevron lacked assets in the jurisdiction and the plaintiffs had "no hope of success" in piercing the corporate veil of Chevron Canada. The plaintiffs appealed from the order imposing the stay. The defendants cross-appealed from the finding regarding jurisdiction.

The Ontario Court of Appeal allowed the appeal, setting aside the stay, and dismissed the cross-appeals.

Conflict of Laws - Topic 8

General - Principle of comity - [See first and second Conflict of Laws - Topic 6606 ].

Conflict of Laws - Topic 603

Jurisdiction - General principles - Jurisdiction simpliciter (territorial competence) - [See all Conflict of Laws - Topic 6606 ].

Conflict of Laws - Topic 6606

Foreign judgments - General - Recognition of judgment of foreign state - The plaintiffs were indigenous Ecuadorian villagers who asserted that Chevron Corp. had extensively polluted an area of Ecuador - The plaintiffs obtained a judgment in Ecuador against Chevron for $9.51 billion (US) in environmental and health tort claim damages - They sought to enforce the judgment in Canada against Chevron and its Canadian subsidiary, Chevron Canada (the defendants) - Brown, J., held that the Ontario courts had jurisdiction to hear the action - The Ontario Court of Appeal agreed - The court rejected the defendants' argument that the principle of comity and the constitutional limitations of the Ontario court required the court to apply the real and substantial connection test at two stages of the recognition and enforcement, asking whether there was a real and substantial connection between the litigation's subject matter and both the foreign court that issued the judgment and the court being asked to recognize and enforce it - In recognition and enforcement actions relating to foreign judgments, the exclusive focus of the real and substantial connection test was on the foreign jurisdiction - There was no parallel or even secondary inquiry into the relationship between the legal dispute in the foreign country and the domestic Canadian court being asked to recognize and enforce the judgment - Applying these principles to Chevron, it was clear that the Ecuadorian judgment could be recognized and enforced against Chevron in Ontario - See paragraphs 23 to 30.

Conflict of Laws - Topic 6606

Foreign judgments - General - Recognition of judgment of foreign state - The plaintiffs were indigenous Ecuadorian villagers who asserted that Chevron Corp. had extensively polluted an area of Ecuador - The plaintiffs obtained a judgment in Ecuador against Chevron for $9.51 billion (US) in environmental and health tort claim damages - They sought to enforce the judgment in Canada against Chevron and its Canadian subsidiary, Chevron Canada (the defendants) - Brown, J., held that the Ontario courts had jurisdiction to hear the action - On the defendants' appeal, the Ontario Court of Appeal discussed the "fundamental differences in the constitutional limitations and imperatives of comity between an action of first instance and an action to enforce a judgment" - In an action of first instance, an Ontario court exceeded its constitutional authority when it assumed jurisdiction of a case where there was no real and substantial connection to Ontario - Similarly, this assumption of jurisdiction offended the principle of comity because one or more other jurisdictions had a real and substantial connection to the litigation's subject matter - In an action to enforce, there was no constitutional issue because the decision was limited to the enforceability of the judgment in Ontario - There was also no comity concern because the Ontario court did not purport to intrude on matters that were properly within another court's jurisdiction - Therefore, in a case of first instance, the requirement of a finding of a real and substantial connection between the subject matter of the litigation and Ontario was necessary in order to respect the principle of comity and to assure that the court's constitutional authority was not exceeded - These constitutional and comity imperatives were not in issue where the court was being asked to enforce a foreign judgment - Thus, there was no need to analyze whether there was a real and substantial connection between Ontario and the subject matter - See paragraphs 31 to 35.

Conflict of Laws - Topic 6606

Foreign judgments - General - Recognition of judgment of foreign state - The plaintiffs were indigenous Ecuadorian villagers who asserted that Chevron Corp. had extensively polluted an area of Ecuador - The plaintiffs obtained a judgment in Ecuador against Chevron for $9.51 billion (US) in environmental and health tort claim damages - They sought to enforce the judgment in Canada against Chevron and its Canadian subsidiary, Chevron Canada (the defendants) - Brown, J., held that the Ontario courts had jurisdiction to hear the action - The Ontario Court of Appeal agreed - Brown, J., was correct to note Chevron Canada's "bricks and mortar" presence in Ontario - The court also noted Chevron Canada's significant relationship with Chevron - In light of the economically significant relationship between Chevron and Chevron Canada and given that Chevron Canada maintained a non-transitory place of business in Ontario, an Ontario court had jurisdiction to adjudicate a recognition and enforcement action against Chevron Canada's indirect corporate parent that also named Chevron Canada as a defendant and sought the seizure of the shares and assets of Chevron Canada to satisfy a judgment against the corporate parent - See paragraphs 36 to 40.

Conflict of Laws - Topic 9286

Practice - Stay of proceedings - Where action (or part of action) should not be tried in Canada - The plaintiffs were indigenous Ecuadorian villagers who asserted that Chevron Corp. had extensively polluted an area of Ecuador - The plaintiffs obtained a judgment in Ecuador against Chevron for $9.51 billion (US) in environmental and health tort claim damages - They sought to enforce the judgment in Canada against Chevron and its Canadian subsidiary, Chevron Canada (the defendants) - Brown, J., held that the Ontario courts had jurisdiction to hear the action, but stayed the action on his own initiative under s. 106 of the Courts of Justice Act on the basis that Chevron lacked assets in the jurisdiction and the plaintiffs had "no hope of success" in piercing the corporate veil of Chevron Canada - The Ontario Court of Appeal allowed the plaintiffs' appeal - Brown, J., erred in granting the stay for a number of reasons - The defendants were sophisticated parties that had chosen not to attorn to the court's jurisdiction except to move for dismissal or a stay of the action on the basis of a lack of jurisdiction - Brown, J.'s, stay was entirely his own construct - No party sought it - The issue was not argued - While s. 106 entitled the court to grant a stay on its own motion, the circumstances in which this could be done were rare - Brown, J., made significant findings about the defendants' corporate structures without giving the plaintiffs a chance to make legal arguments and compile a record - Even though there was no forum non conveniens motion before him, Brown, J., essentially imported such a notion into his reasoning, pointing to New York as a better forum - The plaintiffs did not deserve to have their entire case fail on the basis of an argument against their position that was not even made and to which they had not had an opportunity to respond - See paragraphs 41 to 73.

Courts - Topic 560

Judges - Powers - Authority to act ex mero muto (on own motion) - [See Conflict of Laws - Topic 9286 ].

Practice - Topic 5921

Judgments and orders - Enforcement of foreign judgments - General - [See all Conflict of Laws - Topic 6606 ].

Practice - Topic 5937

Judgments and orders - Enforcement of foreign judgments - Registration or enforcement - Stay of - [See Conflict of Laws - Topic 9286 ].

Cases Noticed:

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81, appld. [para. 26].

Beals v. Saldanha et al., [2003] 3 S.C.R. 416; 314 N.R. 209; 182 O.A.C. 201; 2003 SCC 72, appld. [para. 26].

Pro Swing Inc. v. Elta Golf Inc., [2006] 2 S.C.R. 612; 354 N.R. 201; 218 O.A.C. 339; 2006 SCC 52, refd to. [para. 26].

Club Resorts Ltd. v. Van Breda - see Van Breda et al. v. Village Resorts Ltd.

Van Breda et al. v. Village Resorts Ltd., [2012] 1 S.C.R. 572; 429 N.R. 217; 2012 SCC 17, dist. [para. 26].

BNP Paribas (Canada) v. Mécs, [2002] O.T.C. 505; 60 O.R.(3d) 205 (Sup. Ct.), refd to. [para. 30].

Regal Constellation Hotel Ltd. (Receivership), Re (2004), 188 O.A.C. 97; 71 O.R.(3d) 355 (C.A.), refd to. [para. 42].

Cowles et al. v. Balac et al. (2006), 216 O.A.C. 268; 83 O.R.(3d) 660 (C.A.), refd to. [para. 43].

Gruner v. McCormack, [2000] O.T.C. 143; 45 C.P.C.(4th) 273 (Sup. Ct.), refd to. [para. 54].

1247902 Ontario Inc. v. Carlisle Power Systems Ltd. et al., [2003] O.J. No. 6300, refd to. [para. 55].

Aguinda et al. v. Texaco Inc. (2002), 303 F.3d 470 (2d Cir.), refd to. [para. 65].

Chevron Corp. v. Donziger (2011), 768 F.Supp.2d 581 (S.D.N.Y), refd to. [para. 67].

Chevron Corp. v. Naranjo (2012), 667 F.3d 232 (2d Cir.), refd to. [para. 67].

Statutes Noticed:

Courts of Justice Act, R.S.O. 1990, c. C-43, sect. 106 [para 41].

Authors and Works Noticed:

Walker, Janet, Halsbury's Laws of Canada: Conflict of Laws, 2011 Reissue (2011), HCF-69 [para. 30].

Counsel:

Alan J. Lenczner, Q.C., and Brendan Morrison, for the appellants/respondents by way of cross-appeal;

Clarke Hunter, Q.C., Anne Kirker, Q.C., and Robert Frank, for the respondent/appellant by way of cross-appeal, Chevron Corporation;

Benjamin Zarnett, Suzy Kauffman and Peter Kolla, for the respondent/appellant by way of cross-appeal, Chevron Canada Limited.

This appeal and these cross-appeals were heard on October 31 and November 1, 2013, by MacPherson, Gillese and Hourigan, JJ.A., of the Ontario Court of Appeal. On December 17, 2013, MacPherson, J.A., delivered the following judgment for the court.