Tag Archives: British Columbia

Can You Daisy-Chain Your Way Around a Limitation Deadline?

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The short answer is “no”.

The long answer is contained in this fascinating case from the Ontario Court of Appeal called H.M.B. Holdings Limited v The Attorney General of Antigua and Barbuda.

Background

If you get a civil court judgment against someone in another country, you can (in most cases) have that judgment registered in Canada.  You would want to do this if the party against whom you have a foreign civil judgment owns assets in Canada which you could potentially seize in satisfaction of your judgment. 

If you have a judgment in a country which has a reciprocal enforcement treaty with Canada (such as the United Kingdom), then you can simply apply at the Court office to have the foreign judgment registered as a judgment of the court in Canada.

If the country in which you have your judgment does not have a treaty with Canada, then you have to start a traditional lawsuit in the Canadian court in which you ask the court to grant a judgment recognising and incorporating the foreign judgment.  The deadline to bring this lawsuit is governed by the limitations law of whatever province you are commencing the lawsuit in. 

Ontario, via British Columbia?

H.M.B. Holdings Limited had a judgment from an Antiguan court against the Government of Antigua and Barbuda for millions of dollars.  H.M.B. Holdings must have believed that the Government of Antigua and Barbuda had assets in Ontario, because it wanted to have its Antiguan court judgment recognised in Ontario. 

The problem for H.M.B. Holdings was that the two-year limitation period to commence a lawsuit in Ontario had already expired.  (It had been more than two (2) years since it had obtained the court judgment from Antigua and Barbuda.)

However, the limitation deadlines are not the same across the country.  The deadline for starting a lawsuit in British Columbia to recognise a foreign judgment is six (6) years, not two (2).  A law in Ontario called the Reciprocal Enforcement of Judgments Act states that the courts in Ontario have to recognise court judgments obtained in other Canadian provinces.

H.M.B. Holdings decided to seek a court judgment in British Columbia, where the limitation deadline had not yet expired and then, within two (2) years of obtaining the British Columbian judgment, bring a lawsuit in Ontario to recognise the British Columbian judgment. 

Too clever by half?  Two (2) of the three (3) judges presiding at the Ontario Court of Appeal thought so.

When H.M.B. Holdings sued to have the British Columbia judgment registered in Ontario, the court dismissed the action.  H.M.B. Holdings appealed to the Court of Appeal. 

The “Original Judgment”

One of the legal issues considered by the Court was the meaning of the term “original judgment” in the Reciprocal Enforcement of Judgments Act.  The Act prohibits registration of a judgment where the judgment debtor would have a good defence if an action were brought on the “original judgment” [subsection 3(g)].  The majority held that “original judgment” referred to the Antiguan judgment.  Since Antigua and Barbuda would have valid limitations defence to an action to register the Antiguan judgment, the Act prohibits the registration of that “original judgment”, even if it takes a pit stop in Vancouver.

In dissent, Justice Nordheimer expressed his view that the term “original judgment” in the Act had to mean the specific judgment which the plaintiff sought to have registered which, in this case, was the British Columbian judgment. 

One can easily see both sides of this.  One could say that a litigant should not be allowed to do through the back door what it could not have done through the front door.  At the same time, one could equally say that judgment debtors should not be able to escape having to pay the judgment against them by having the enforcement proceedings defeated on procedural, rather than substantive, grounds.  There is also an argument that creative counsel should be rewarded, not punished, for using all of the legal mechanisms available to them in pursuit of justice for their client. 

UPDATE: We will have the opportunity to see this dispute go the next level, because the Supreme Court of Canada has granted H.M.B. Holdings Limited leave to appeal this decision. It will be fascinating to see how the Supreme Court deals with this question which divided the Ontario Court of Appeal.

In this case, the Plumage DOES Enter into it

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Mr. Davy purchased a parrot from Mr. Kidwai.  It was not a Norwegian Blue; it was an Eclectus.  Named Tiberius.  And he wasn’t pining for the fjords, but he was residing on the equally picturesque Salt Spring Island.

And in this case, the plumage DOES enter into it.

You see, this parrot started losing its feathers. Worried about its thinning plumage, Mr. Davy took it to a vet who informed him that the parrot had PBFD—Psittacine Beak and Feature Disease—and as a result now has a vastly reduced lifespan.  Tiberius is not yet an ex-parrot, but because of his PBFD he will run down the curtain and join the choir invisible much sooner than he otherwise would have. 

So Mr. Davy took Mr. Kidwai to the British Columbia Civil Resolutions Tribunal for having sold him a defective parrot.  Once we get past the irresistible similarities with the Monty Python sketch, the ruling in favour of Mr. Davy is quite interesting, and quite concerning for anyone who sells animals in Canada.

It is interesting, because the Member who decided the case found that Mr. Kidwai did not know, when he sold the parrot to Mr. Davy, that the parrot was sick.  So Mr. Davy’s action for fraudulent misrepresentation was dismissed. 

However, the Member went on to rule that BC’s Sale of Goods Act applied to the sale of this parrot.  The BC Sale of Goods Act specifies that goods sold in British Columbia must “be durable for a reasonable period of time having regard to the use to which they would normally be put and to all the surrounding circumstances of the sale”.  Relying on a previous case from the Civil Resolutions Tribunal which involved a puppy that developed seizures, the Member held that for the parrot to be “durable” within the meaning of the Act meant that the parrot had to remain healthy for six months after the sale. 

Because the parrot got sick less than six months after he was sold to Mr. Davy, the implied warranty of durability prescribed by the Sale of Goods Act had been breached and Mr. Kidwai had to repay 75% of the purchase price (only 75%, because Mr. Davy apparently got some value from having Tiberius as a pet) and also had to reimburse Mr. Davy for the veterinary fees he incurred. 

This case is not binding on other courts in Canada, but it nevertheless sets a very worrying precedent for anyone involved in breeding or animal husbandry.  I think very many kennel owners or breeders of domestic pets would be surprised to learn that when they sell an animal they are guaranteeing the animal’s health for six months after it leaves their premises.  Especially because most, if not all, of the factors which affect the animal’s health are out of the control of the breeder at that point. Equally concerning is the potential liability: not just for the price of the animal, but also for the cost of the owner’s veterinary bills, which the seller has no input on or control over.  This quirky case stands as a warning of the potential downside risk when selling pets.