Anderson v. Anderson, 2012 ABQB 743

Court of Queen ’ s Bench of Alberta Citation: Anderson v. Anderson, 2012 ABQB 743 Date: 20121130 Docket: 1101 12090 Registry: Calgary Between: Reed Anderson Plaintiff - and - Cynthia Anderson Defendant _______________________________________________________ Memorandum of Decision of J.B. Hanebury, Master in Chambers _______________________________________________________ [ 1 ] This is an application to register a foreign judgment for costs in this jurisdiction. The parties appeared before the court in morning chambers and Ms. Anderson, the defendant, was unrepresented by counsel.

Counsel for the judgment creditor provided in support of his application the decision by the Supreme Court of Canada in Beals v. Saldanha , 2003 SCC 72 ( Beals ). [ 2 ] No case law was provided by Ms. Anderson, however she handed up a large binder of materials which referred to two compact discs. These discs were also provided by her at a later date by mail, and she and counsel subsequently provided copies of the relevant court orders. These extensive materials were reviewed and the compact disc recording of the hearing before the original decision maker, Judge Breithaupt, was played back.

[ 3 ] The sole issue between the parties is whether this judgment for costs, obtained in Oregon, can be enforced in Alberta against Ms. Anderson, who is resident in this jurisdiction. [ 4 ] To make this determination I will first outline the salient facts as gleaned from the materials provided and then review and apply the law. FACTS [ 5 ] Reed Anderson seeks the registration of his judgment against his sister, Cynthia Anderson, in the sum of $33,929.29 USD plus post judgment interest at 9 % per annum from October 28, 2010, and the further sum of $272 USD plus interest at 9% from May 17, 2012.

The original judgment of $33,929.29 is for attorney fees, ie. costs on a solicitor and client basis. [ 6 ] The decision was appealed by Cynthia Anderson to the Court of Appeals of the State of Oregon and the appeal was unsuccessful. “Attorney fees”, ie. solicitor and client costs, were not allowed for the unsuccessful appeal; only costs of $272.00 were awarded. However, this outstanding costs award is only a small part of the entire dispute between the siblings. [ 7 ] The underlying action relates to three family trusts that came to an end with the death of their mother, Vieanna Eleanor Anderson.

It appears from the materials filed that the trust records were not well maintained and, in fact, were in some disarray.

As a result, after the death of their mother, there was some dispute amongst the siblings as to who owed what, if any, money to the trusts, when and if interest was, or should be, charged and what money each sibling should receive. [ 8 ] Cynthia Anderson, perhaps with hindsight ill-advisedly, at one point sent an email to her brother Reed stating: I have decided to lock up the settlement of the estate and any further disbursements all because I have lots of questions regarding the integrity of our family and the money they have taken from Mom. Plan on it.

This is going to be a long, drawn out affair. [ 9 ] The dispute among the siblings went to the Oregon Clackamas County Circuit Court. Ms. Anderson hired a lawyer. Unfortunately, it appears that the lawyer did not proceed with dispatch. Ultimately there was a request for production of documents to Ms. Anderson’s counsel which appears to have been ignored. There was then a motion to compel production and a court order requiring production. [ 10 ] Meanwhile, over three thousand accounting records had apparently been provided by the trustee of the trusts. It is unclear when and to whom these documents were provided.

Ms. Anderson’s counsel says in a letter that he believed they went to her. In any event, it appears that they were not reviewed and analyzed promptly after their receipt. [ 11 ] Ms. Anderson fired her lawyer and hired a new lawyer. [ 12 ] In the meantime Ms. Anderson’s siblings brought a motion seeking to have the estate disbursed summarily in the way they thought appropriate. They relied on the above-noted paragraph from Ms.

Anderson’s email and argued that she had not provided the necessary documentation to back up her alleged concerns with the proposed distribution. [ 13 ] An application was brought for a postponement of the hearing by Ms. Anderson’s new lawyer. It was refused. [ 14 ] Ultimately the application for a

summary determination of the matter was heard and the Court granted the application. The primary basis for the Court’s determination was that, assuming Ms. Anderson’s affidavits were admissible, they contained only

allegations without any documentary backup. [ 15 ] It does not appear that written reasons were given. The oral record of the proceedings confirms this as Judge Breithaupt dealt with the matter on a point by point basis, hearing from the parties on each point. Therefore the only written record provided was a copy of an order entitled General Judgment of Dismissal with Prejudice, dated Sept. 14, 2010. It dismissed Ms.

Anderson’s claims and said that there “is no just reason for delay in entering a general judgment consistent with this Order dismissing [her] claims in this matter with prejudice.” It allowed the other siblings to apply for their costs. [ 16 ] An application was subsequently brought for attorney’s fees, and the Court issued its decision by way of a letter dated October 13, 2010. The Court found that the siblings were the prevailing parties and there was statutory authority for an award of attorney fees, ie. solicitor and client costs.

The Court then said: The objections made by Cynthia, like her objections to the accounting in this matter, are not specific or detailed and lack evidentiary support. The record indicates that Cynthia may have decided strategically to fight a long and drawn out battle. That strategy is subject to the risk of losing and having put other parties in the litigation to the expense of representation. The court has considered the factors set forth in ORS 20.075. There is evidence in the record that Cynthia threatened and followed a strategy of a long and drawn out fight.

Based on that, and the nature of the case that Cynthia presented at the

summary judgment hearing, the court finds that the position of Cynthia was often, if not always, taken in bad faith The position that Cynthia took was entirely factual in nature and she did not produce admissible evidence at the hearing to support her positions. Her positions were therefore objectively unreasonable. An award here will serve to deter improper conduct and not deter proper objections founded in actual evidence and proof. Cynthia had opportunities to settle matters but appears to have chosen only litigation as a remedy.

Cynthia has made no showing that the time or rates supporting the applications are unreasonable. The applications for fees are granted in their entirety. Counsel for Reed, Nancy and Terry are directed to prepare appropriate forms of supplemental judgment. [ 17 ] The

summary determination dismissing Ms. Anderson’s arguments that the accounting was improper and insufficient was appealed. The appeal was dismissed without reasons, but the subsequent Appeal Court order provided that there would be no award of solicitor and client costs for the appeal itself as Ms. Anderson had “raised a legitimate issue on appeal on the merits and also raised a reasonable argument on appeal concerning the award of attorney fees below.” [ 18 ] One of Ms. Anderson’s siblings, her brother Reed Anderson, then brought this application to register the judgments for costs in this jurisdiction.

LAW [ 19 ] The Supreme Court of Canada, in the Beals decision (supra), sets out several steps that must be followed by the court when determining whether or not a foreign judgment will be registered in a Canadian jurisdiction. [ 20 ] First, the applicant must establish that the foreign court took jurisdiction pursuant to the Canadian “real and substantial connection” test. This test requires that there be a significant connection between the foreign court and the cause of action. [ 21 ] In this case, the test is not in issue as Ms.

Anderson submitted to the jurisdiction of the foreign court by retaining counsel and participating in the proceedings: Van Breda v. Village Resorts Limited , 2012 SCC 17 .

[ 22 ] The next step requires the respondent, in this case Ms. Anderson, to establish one of the allowed defences to the registration of the foreign judgment. Those defences are described by the Supreme Court of Canada in the Beals decision: fraud, the lack of natural justice in the foreign jurisdiction and public policy. The Court noted that the defences are “narrow in application”: Beals para. 41 . The Court recognized that the list was not exhaustive and new defences may need to be developed in the future.

However, it stated, any such new defences would also need to be narrow in scope. [ 23 ] The Court explained why, over time, only very narrow defences to the registration of a foreign judgment have been allowed. The underlying reason for the narrowness of the defences was, and remains, comity. Comity is the deference and recognition that courts of one jurisdiction give to the law, proceedings and judicial decisions of another jurisdiction. Comity requires, when there is a real and substantial connection between the defendant and the decision making jurisdiction, that a balance be struck.

As the law has developed, the Courts have found that these defences permit the appropriate balance between the necessary deference to the decisions of another jurisdiction and fairness for the residents of this jurisdiction: Beals para. 40 - 42 . [ 24 ] With that overview, I turn to a consideration of the three defences in light of the facts in this case. While Ms. Anderson’s opposition is to the registration of a judgment for costs, to consider whether it should be registered the underlying decision must be examined.

Fraud [ 25 ] Generally, neither foreign nor domestic judgments will be enforced if obtained by fraud. However, the courts are concerned that defendants could try to use this defence to re-litigate an already-determined action and thereby thwart the objective of finality in litigation.

To avoid this result, the courts have interpreted the defence of fraud narrowly and limited the type of evidence allowed in response to an application for the registration of a foreign judgment: Beals para. 44 . [ 26 ] For this reason, the courts have categorized fraud as “intrinsic” and “extrinsic”. [ 27 ] Extrinsic fraud is fraud that goes to the actual jurisdiction of the original court or fraud that misleads either the original court or this court into believing that the original court has jurisdiction over the claim.

Evidence of this kind of fraud can justify the setting aside of the original judgment. [ 28 ] In this case there is no evidence of extrinsic fraud. There is no indication that the Oregon court was somehow misled into believing that it had jurisdiction over the claim when it did not. [ 29 ] Intrinsic fraud is fraud that goes to the actual merits of the case and to the existence of a cause of action. To raise intrinsic fraud, the defendant must show that the facts upon which he or she is relying could not have been discovered by the exercise of due diligence prior to the granting of the foreign judgment.

The court found that this approach “represents a fair balance between the countervailing goals of finality and fairness to the defendant”: Beals para. 45 - 52 . [ 30 ] Ms. Anderson makes a number of allegations that arguably fall within the definition of intrinsic fraud. For example, she alleges that the trustees failed to prepare proper accountings of the trusts; failed to deal fairly with her; obscured relevant facts; and, failed to disclose to the Oregon courts the shortcomings in their records and analysis while claiming the trusts were ready to be disbursed to the beneficiaries.

Assuming, without deciding, that these allegations meet the definition of intrinsic fraud, Ms. Anderson has not demonstrated that this information could not have been discovered by her or her counsel by the exercise of due diligence prior to the granting of the foreign judgment. What appears to have happened, as best can be discovered from the material before this Court, is a serious breakdown in communication between Ms. Anderson and her initial counsel such that records were not reviewed and affidavits highlighting the evidence supporting Ms.

Anderson’s allegations were not prepared in time for the court hearing. [ 31 ] In short, there may have been further facts Ms. Anderson could have presented to the Oregon courts, but she has not demonstrated to this court that she or her counsel could not have discovered those facts with due diligence. This defence cannot be used to avoid the registration of the judgment.

Natural Justice [ 32 ] The second defence is the denial of natural justice. The defendant must prove on the balance of probabilities that the foreign proceedings were contrary to Canadian notions of fundamental justice. The Canadian court must be satisfied that “minimum standards of fairness” has been applied by the foreign court. The process must have been fair. A fair process is one that provides reasonable guarantees of basic procedural safeguards such as judicial independence and has fair and ethical rules governing the participants in the judicial system: Beals para. 62 .

The court noted that the defence of natural justice “is restricted to the form of the foreign procedure, to due process, and… not to the merits of the case”: Beals para. 64 . [ 33 ] The Court noted that an assessment of this factor is easier when the foreign legal system is similar to or familiar to Canadian courts. In Beals the Court found that the legal system in Florida is a similar system. [ 34 ] In this case, as in Beals , the judicial system is not unlike the Canadian judicial system. There are basic procedural safeguards in place to ensure judicial independence and a fair process.

There is an appeal process to ensure that errors of the first instance can be corrected, a process that Ms. Anderson utilized. [ 35 ] The Supreme Court of Canada has made it clear that this court is not to look at the final decision to determine if it was fair. That would result in the substitution of the decision of one court for that of another and would fly in the face of the principle of comity. The determination to be made is whether the process is founded on procedural safeguards that allow for the operation of a fair judicial system.

The Oregon court system, like the Florida court system, is a system not unlike that found in Canada. No evidence was provided to indicate that the Oregon court system is founded on something other than similar procedural safeguards to those operating here. [ 36 ] The defence of a lack of natural justice does not operate in this case to stop the registration of the Oregon judgment. Public Policy [ 37 ] This defence requires a consideration of whether the foreign law is contrary to Canadians’ view of basic morality.

In other words it prohibits the enforcement of a foreign judgment that is based on laws contrary to the fundamental morality of our legal system. This defence also guards against the enforcement of a judgment rendered by a foreign court that has been proven to be corrupt or biased: Beals para’s 71 - 72. The defendant in Beals argued that the defence of public policy should go further. He asked that it be broadened to include the case where the outcome is so egregious that the refusal of a domestic court to enforce a foreign judgment is justified.

He cited as an example an award of damages that is excessive and would shock or be unacceptable to reasonable Canadians. [ 38 ] The Court refused to expand the defence of public policy is such a case as it would be, in essence, impeaching the foreign judgment by “condemning the foreign law on which it is based”: Beals para. 75 .

It said that “the expansion of this defence to include perceived injustices that do not offend our sense of morality is unwarranted [and] the defence of public policy should continue to have a narrow application.” In short, the fact that the damages may not have been comparable to what would have been awarded in Canada was not a basis for a public policy defence: Beals para’s. 75, 76. [ 39 ] In this case the law relied upon is not contrary to Canadians’ view of basic morality. In fact, similar applications occur in Canadian courts quite regularly.

This Court may have responded differently to the application or may not agree with the ultimate outcome, but that does not provide grounds for an arguable defence to the registration of the foreign judgment. CONCLUSION [ 40 ] In

summary, the Supreme Court of Canada has made clear the importance of comity and, subject to some narrow exceptions, foreign judgments are to be respected. In short, in order to fulfill certain public policy goals in an increasingly global world, defendants living in Canada will only be allowed to avoid foreign judgments in certain narrow circumstances.

[ 41 ] The application is allowed. The Oregon judgment for costs may be registered in Alberta, in Canadian dollars at the rate of exchange as of the date of the issuance of this decision. The applicant is entitled to its costs of this application in the sum of $500.00 inclusive of disbursements. Heard on the 07 th day of September, 2012. Dated at the City of Calgary, Alberta this 30 th day of November, 2012. J.B. Hanebury M.C.C.Q.B.A. Appearances: G. Stephen Panunto Peacock Linder & Halt LLP for the Plaintiff Ms. Cynthia Anderson