Beals v Saldanha

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Beals v Saldanha

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Hearing: February 20, 2003
Judgment: December 18, 2003
Full case nameGeoffrey Saldanha, Leueen Saldanha and Dominic Thivy v. Frederick H. Beals III and Patricia A. Beals
Citations [2003] 3 S.C.R. 416, 2003 SCC 72
Docket No. 28829
Prior history Judgment for Beals in the Court of Appeal for Ontario.
Ruling Appeal dismissed.
Holding
The "real and substantial connection" test should apply to conflict of law issues related to recognition and enforcement of non-Canadian judgments.
Court Membership
Chief Justice: Beverley McLachlin
Puisne Justices: Charles Gonthier, Frank Iacobucci, John C. Major, Michel Bastarache, Ian Binnie, Louise Arbour, Louis LeBel, Marie Deschamps
Reasons given
Majority Major J. (paras. 1-80), joined by McLachlin C.J. and Gonthier, Bastarache, Arbour and Deschamps JJ.
Dissent Binnie J. (paras. 81-131), joined by Iacobucci J.
Dissent LeBel J. (paras. 132-267)

Beals 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. The Court held that foreign judgments were enforceable in Canada where there was a "real and substantial connection" between the foreign jurisdiction and the subject matter giving rise to the claim.

Supreme Court of Canada highest court of Canada

The Supreme Court of Canada is the highest court of Canada, 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. Its decisions are the ultimate expression and application of Canadian law and binding upon all lower courts of Canada, except to the extent that they are overridden or otherwise made ineffective by an Act of Parliament or the Act of a provincial legislative assembly pursuant to section 33 of the Canadian Charter of Rights and Freedoms.

Conflict of laws concerns relations across different legal jurisdictions between natural persons, companies, corporations and other legal entities, their legal obligations and the appropriate forum and procedure for resolving disputes between them. Conflict of laws especially affects private international law, but may also affect domestic legal disputes e.g. determination of which state law applies in the United States, or where a contract makes incompatible reference to more than one legal framework.

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 Libman v. The Queen (1985). It is used in several circumstances in matters of conflict of laws.

Contents

Background

Geoffrey and Leueen Saldanha and Dominic Thivy were residents of Ontario and sold lots they owned in Florida to Frederick and Patricia Beals. Beals brought an action against Saldanha and Thivy when it was discovered that the defendants did not actually own the property they sold. A defence was filed with the Court but did nothing afterwards and defaulted. A jury awarded Beals $260,000 in damages.

Thivy and Saldanha were informed by a lawyer in Ontario that the judgment could not be enforced and so they did nothing.

Soon Beals brought an action in Ontario to enforce the judgment, which had grown to $800,000 with interest.

At trial the judgment was denied on the basis that the damages had been improperly assessed. On Appeal the Court allowed the foreign judgment.

The issue before the Supreme Court was whether a judgment issued by a Court in Florida could be enforced in Ontario, and whether the defendant could seek refuge under section 7 of the Charter .

The Canadian Charter of Rights and Freedoms, in Canada often simply the Charter, is a bill of rights entrenched in the Constitution of Canada. It forms the first part of the Constitution Act, 1982. The Charter guarantees certain political rights to Canadian citizens and civil rights of everyone in Canada from the policies and actions of all areas and levels of the government. It is designed to unify Canadians around a set of principles that embody those rights. The Charter was signed into law by Queen Elizabeth II of Canada on April 17, 1982, along with the rest of the Act.

Reasons of the court

In a six to three decision, the Court found that the judgment was enforceable. The Court applied the "real and substantial connection" test from the earlier decision of Morguard v. De Savoye to the international context. The test requires the Court to consider whether the subject-matter of the suit or the person involved had a "real and substantial" connection with the country. The Court noted, however, that judgments with sufficient connection will not be enforced if they are contrary to Canadian public policy, contrary to natural justice, or obtained through fraud.

Dissent

Justice LeBel, in dissent, argued for a strengthening of the available defences. He noted that the result in this case was overly harsh and unfair by imposing an 800,000 judgment on an 8,000 property due to essentially bad luck. [1] He proposed that the real and substantial connection test be modified in the international context to reflect the added hardships imposed on litigating in a foreign country. [2]

In his view, the defences of fraud and natural justice should be broadened in international matters [3] and an additional residual category should be allowed for injustices that do not easily fit into the main categories using what lower court called a "judicial sniff test".

LeBel pointed to a number of examples such as the Hague Conference on foreign judgments had proposed to grant domestic judges to lower foreign punitive damages. [4] and the Loewen case, where a Mississippi jury awarded 500 million in damages against a BC company for anti-competitive practices. [5]

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References

  1. para. 132
  2. para. 134
  3. para.217-218
  4. para. 220
  5. para. 228