Blakes Guide to Litigation and Dispute Resolution in Canada

1. Choice of Law and Requirement to Prove Foreign Law

The applicable law for any given legal action will depend on the type of claim. For example:

An action in tort (a civil wrong not arising from a breach of contract) is governed by the law of the place where the tort occurred. However, a Canadian court may decline jurisdiction or decline to apply foreign law in certain circumstances. Accordingly, the choice of law for an action in tort depends on the particular facts of the situation and a consideration of competing doctrines.
The jurisdiction for an action in contract may be determined by express contractual language, or a court will determine which law should apply after deciding which jurisdiction is most closely connected to the transaction. To this end, the court will look at factors such as where the contract was made, where it was to be performed, the residence of the parties, the legal form of the contract, the contract’s language and the terms of arbitration or exclusive jurisdiction clauses.
Regarding property, the applicable law for conflicts of law purposes will depend on whether the property is movable or immovable. Generally, immovable property is real property, and movable property is personal property. Immovable property is subject to the law of the jurisdiction in which it is located. The law applicable to movable property will depend on the circumstances of the action.

Canadian courts treat foreign law as a matter of fact rather than as a matter of law. As such, the party relying on foreign law must plead and prove that law. Foreign law is proven through the testimony of experts. If the foreign law is not proven to the satisfaction of the court, the court will apply the law of its own jurisdiction. A court will not apply the law of a foreign jurisdiction in certain circumstances, including if that law would offend the province’s public policy.

2. Enforcement of Foreign Judgments

To enforce a foreign judgment in Canada, a party must obtain an order from a Canadian court. Canadian courts have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments. Among other things, the foreign court must have had jurisdiction. The foreign court’s jurisdiction is determined by considering whether there was a real and substantial connection between the defendant and the foreign jurisdiction at the time the action was commenced. If the defendant was resident in the foreign jurisdiction when the action was started, or if the defendant voluntarily submitted or agreed to submit to the jurisdiction of the foreign court, the foreign court will be recognized as having jurisdiction. The rules governing the enforcement of a foreign judgment under Quebec’s civil law regime are slightly different.

Canadian courts have adopted a generous and liberal approach to the recognition and enforcement of foreign judgments.

Among other things, a foreign judgment will not be enforced if the judgment was obtained by fraud on the part of the party seeking its enforcement, the proceedings under which the foreign judgment was obtained were contrary to the principles of natural justice, or the underlying cause of action on which the foreign judgment is based is contrary to the public policy of the province in question. In addition, Canadian courts will not enforce judgments based on criminal/quasi-criminal, taxation or public laws of a foreign jurisdiction.

In addition to the common law, several of the provinces have enacted legislation governing the reciprocal enforcement of judgments. The legislation allows a judgment creditor in certain circumstances to apply to the court of that province for an order registering the foreign judgment. This can only be done if the foreign judgment is from a reciprocal jurisdiction, as set out in the reciprocal enforcement of judgments legislation. A foreign judgment, if recognized in a Canadian province under the common law rule, may be exported from one reciprocating province in Canada to others under reciprocal enforcement of judgments legislation. Once a foreign judgment is registered, it has the same force and effect as a judgment given in the registering court. Additionally, the registering court will have the same control and jurisdiction over the foreign judgment as it has over its own judgments. The reciprocal enforcement of judgments legislation in the various provinces does not alter the rules of private international law. It simply provides for the registration of judgments as a more convenient procedure than the former procedure of bringing an action to enforce a judgment.

3. Obtaining Evidence for Foreign Proceedings

3.1 Taking Evidence in Canada for Foreign Proceedings

A party to litigation outside of Canada may require the assistance of a Canadian court in obtaining evidence from witnesses in Canada for use in the foreign trial. Typically, such assistance is sought by way of a letter of request or a letter rogatory that is a formal request by a foreign court to a judge of a Canadian superior court requesting the taking of evidence from an individual resident in Canada.

The foreign litigant first obtains the letter of request from the foreign court where the action is pending. The foreign court’s procedure will govern at this stage. The letter of request should name the witness to be examined, describe the nature of the evidence sought and indicate why the evidence of the witness is relevant and necessary. After obtaining the letter of request, the foreign litigant must make an application to the court in the resident Canadian province of the witness for an order to enforce the letter of request.

The country in which the requesting court is situated need not be a party to a treaty with Canada. However, a Canadian court will not grant an order where doing so would offend Canadian sovereignty or be contrary to Canadian public policy.

Depending on the subject-matter of the dispute, the Canada Evidence Act or the evidence act of the province in which the witness resides will generally govern the procedure by which the letter of request is enforced. The Canadian court has the discretion to order for use in a foreign trial the examination of a witness or the production of a document, or both, regardless of whether the witness is a party to the foreign action or merely a person with relevant information. Canadian courts generally enforce letters of request to gather evidence to be used at trial. Depending on the relevant statutory authority and the rules of procedure of the requested court, they also have discretion to enforce letters of request for pre-trial proceedings in appropriate circumstances. The local superior court may limit the scope of questions or documents to be produced. In doing so, the court is guided by local rules of evidence and procedure.

3.2 Taking Foreign Evidence for Canadian Proceedings

A Canadian court may order the appointment of a commissioner to take the evidence from a witness who is outside Canada. The transcript of the examination may then be used at trial without requiring the witness to be present in Canada.

Canadian courts may issue letters of request asking a foreign court or authority to assist in compelling a witness to appear before a commissioner in the foreign jurisdiction to answer questions for pre-trial discovery. Enforcing the letter of request from the Canadian court is in the foreign court’s discretion and governed by the procedural rules of that jurisdiction. As such, it may be prudent in the letter of request to ask that an oath be administered and that a cross-examination of the witness be conducted.

3.3 Civil Procedure Conventions

Unlike the United States, Canada is not a party to The Hague Convention on Civil Procedure but is a party to The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Thus, except where the evidence is offered voluntarily, obtaining evidence in Canada for use in a foreign civil proceeding, and vice versa, is facilitated by way of letters of request. Canada has entered into approximately 25 bilateral conventions that indicate how letters of request should be transmitted to the proper Canadian authority.