2015 ONSC 6394, 2015 ONSC 6394

Continental Casualty Company v. R. Symons, as successor ininterest to G. Symons, et al. [Indexed as: Continental Casualty Co. v. Symons Estate] Ontario Reports Ontario Superior Court of Justice, Glustein J. October 21, 2015 127 O.R. (3d) 758 | 2015 ONSC 6394 Case

Summary Conflict of laws — Foreign judgment — Enforcement — Defendants appealing Indiana judgment but not seeking stay pendingappeal — Indiana judgment being final for purposes of enforcement in Ontario despite pending appeal — Issue of mentalincompetence of one defendant at time of trial irrelevant in enforcement proceedings where [page759] defendants did not seekany relief in Indiana action other than order excusing defendant from testifying in person — Defendants failing to establish thatthey were denied natural justice — Recognition and enforcement of Indiana judgment ordered but interim stay of enforcementgranted.

The plaintiff obtained judgment on its counterclaim in an Indiana action. The defendants appealed, but did not seek a stay of thejudgment pending appeal. The plaintiff brought a motion for

summary judgment recognizing and enforcing the Indiana judgment inOntario. At the time of the motion, the Indiana appeal had been heard, but the judgment had not yet been released. Held, the motion should be granted. The Indiana judgment was a final judgment for the purposes of enforcement in Ontario despite the fact that the judgment was underappeal. A foreign judgment is final for the purposes of enforcement when the foreign court has no power to vary or abrogate thejudgment, even though the judgment is subject to appeal.

The mental incompetence of one of the defendants, G, at the time of the trial was irrelevant in the enforcement proceedings. It is not therole of the enforcing court to make a finding as to whether a defendant was incompetent at the time of trial. The role of the court is toreview the process before the foreign court in order to be assured that the process was fair. The defendants had not sought any relief inthe Indiana action other than an order excusing G from testifying at trial.

If G believed he was going to be denied natural justice becausehe was incompetent, he had the opportunity to bring a motion to adjourn the trial or take other steps before the Indiana court. There wasno evidence that the Indiana court's determination that G was personally liable for fraud was made without fair process. The defendantsfailed to establish that they were denied procedural fairness. An interim stay of enforcement was granted until the earlier of (

i) the date the Indiana appellate court released its decision and thedefendants' rights had either expired or been exhausted; or (ii) December 15, 2015, when the court would hear submissions and reviewevidence on the interim stay. Arrowmaster Inc. v. Unique Forming Ltd. (1993), (ON SC), 17 O.R. (3d) 407, [1993] O.J. No. 2737, 29 C.P.C. (3d)65, 43 A.C.W.S. (3d) 1082 (Gen. Div.); Four Embarcadero Center Venture v. Mr. Greenjeans Corp. (1998), (ONSC), 64 O.R. (2d) 746, [1988] O.J. No. 210, 26 C.P.C. (2d) 248, 9 A.C.W.S. (3d) 348 (H.C.J.), apld Beals v. Saldanha, [2003] 3 S.C.R. 416, [2003] S.C.J.

No. 77, 2003 SCC 72, 234 D.L.R. (4th) 1, 314 N.R. 209, J.E. 2004-127, 182O.A.C. 201, 39 B.L.R. (3d) 1, 39 C.P.C. (5th) 1, 113 C.R.R. (2d) 189, 127 A.C.W.S. (3d) 648; Pro Swing Inc. v. Elta Golf Inc., [2006] 2S.C.R. 612, [2006] S.C.J. No. 52, 2006 SCC 52, 273 D.L.R. (4th) 663, 354 N.R. 201, J.E. 2006-2235, 218 O.A.C. 339, 41 C.P.C. (6th) 1,

52 C.P.R. (4th) 321, EYB 2006-111169, 152 A.C.W.S. (3d) 70, consd CSA8-Garden Village, LLC v. Dewar, [2013] O.J. No. 4558, 2013 ONSC 6229, 369 D.L.R. (4th) 125, 235 A.C.W.S. (3d) 372 (S.C.J.);Kavoussi v. Moos, [2014] O.J. No. 2220, 2014 ONSC 2612 (S.C.J.); Smythe v. Lymburner, [2015] O.J. No. 2757, 2015 ONSC 2719(S.C.J.), distd Other cases referred to Chevron Corp. v. Yaiguaje, [2015] S.C.J.

No. 42, 2015 SCC 42, 22 C.C.L.T. (4th) 1, 73 C.P.C. (7th) 1, 38 B.L.R. (5th) 171, 388 D.L.R.(4th) 253, 2015EXP-2554, J.E. 2015-1413, EYB 2015-256214, 256 A.C.W.S. (3d) 583; [page760] Four Embarcadero Center Venture v.Kalen (1988), (ON SC), 65 O.R. (2d) 551, [1988] O.J. No. 411, 27 C.P.C. (2d) 260, 10 A.C.W.S. (3d) 9, 1988CarswellOnt 412 (H.C.J.); Morguard Investments Ltd. v. De Savoye, (SCC), [1990] 3 S.C.R. 1077, [1990] S.C.J. No.135, 76 D.L.R. (4th) 256, 122 N.R. 81, [1991] 2 W.W.R. 217, J.E. 91-123, 52 B.C.L.R. (2d) 160, 46 C.P.C. (2d) 1, 15 R.P.R. (2d) 1, 24A.C.W.S. (3d) 478; OZ Optics Ltd. v.

Dimensional Communications Inc., [2004] O.J. No. 4543, 134 A.C.W.S. (3d) 1002 (Div. Ct.);Sincies Chiementin S.p.A. (Trustee of) v. King, [2010] O.J. No. 5124, 2010 ONSC 6453, 195 A.C.W.S. (3d) 681 (S.C.J.); Van Damme v.Gelber (2013), 115 O.R. (3d) 470, [2013] O.J. No. 2750, 2013 ONCA 388, 363 D.L.R. (4th) 250, 42 C.P.C. (7th) 100, 307 O.A.C. 81,228 A.C.W.S. (3d) 91, affg [2012] O.J. No. 5394, 2012 ONSC 6277 (S.C.J.) [Leave to appeal to S.C.C. refused [2013] S.C.C.A. No.342] Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 106, 121 Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c.

R.5, ss. 2(3), 3 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 9.01, 20.08, 63.01, 63.03(3) MOTION for

summary judgment recognizing and enforcing a foreign judgment. Lou Brzezinski and Varoujan Arman, for plaintiff. Sean N. Zeitz, for defendants. [1] GLUSTEIN J.: — The plaintiff, Continental Casualty Company ("Continental"), brings a motion for

summary judgment recognizingand enforcing in Ontario an "amended final judgment" (the "Indiana judgment") issued against the defendants on July 14, 2014 by theUnited States District Court, Southern District of Indiana, Indianapolis Division (the "Indiana Court"), plus its taxable court costs andaccrued interest on the Indiana judgment as may be converted to an amount in Canadian currency in accordance with s. 121 of the Courtsof Justice Act, R.S.O. 1990, c. C.43 ("CJA"). [2] The defendants oppose the motion and seek

summary judgment dismissing Continental's action to recognize and enforce the Indianajudgment. [3] In the alternative, the defendants seek an order staying enforcement of the Indiana judgment pursuant to s. 106 of the CJA and rule20.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the "Rules"), until such time as the United States Court of Appeals for theSeventh Circuit (the "Indiana Appellate Court") releases its decision and the defendants' rights of appeal have either expired or beenexhausted. [4] The defendant Robert Symons ("Robert"), in his capacity as executor of the estate of Gerald Gordon Symons ("Gordon"), seeks anorder restricting the domesticated judgment and any [page761] ensuing writs of seizure and sale to refer to the defendant as "The Estateof Gerald Gordon Symons" rather than to "Robert Symons, as successor in interest to G.

Gordon Symons also known as Gerald GordonSymons, and as Trustee of the Estate of Gerald Gordon Symons". [5] Robert (as executor of Gordon's estate) also submits that the Indiana judgment against Gordon did not comply with the principles ofnatural justice. [6] At the hearing, Continental sought an adjournment of the interim stay request of the defendants in order to file responding evidence,on the basis that the issue of a stay was only raised in the defendants' factum delivered prior to the hearing.

Counsel agreed that (i)Continental could return to court upon filing such additional evidence; and (ii) if the court ordered recognition and enforcement of theIndiana judgment, the only issue for the present hearing in relation to the stay would be the terms of an "interim interim" stay, i.e., a stay

until the full hearing of an interim stay could be addressed by the court. [ 7 ] For the reasons I discuss below, I grant Continental's motion for recognition and enforcement of the Indiana judgment. I stay execution of this order until the earlier of (

i) the date the Indiana Appellate Court releases its decision and the defendants' rights of appeal have either expired or been exhausted; and (ii) December 15, 2015, the date on which counsel are to return with any additional evidence and argument on the interim stay issue. With respect to Robert, the Indiana judgment is recognized and enforced against Robert in his capacity as executor of the estate of Gordon.

The Indiana Action [ 8 ] Continental obtained the Indiana judgment in civil action no. 1:01-cv-00799-RLY-MJD (the "Indiana action") in respect of default under a transaction and agreement entered into between Continental and three Indiana corporations (the "IGF Companies") controlled by Gordon and his sons, Alan and Douglas Symons. In the Indiana action, Continental's claims proceeded by counterclaim in proceedings initially commenced by the defendants. [ 9 ] All of the defendants entered affirmative defences to Continental's counterclaim and were represented by counsel in the Indiana action.

On March 22, 2007, the Indiana Court granted Continental

summary judgment in its favour on the IGF Companies' claims against Continental. On March 31, 2007, the Indiana Court granted Continental

summary judgment on Continental's claim against the IGF Companies. [page762] [ 10 ] The remaining claims ("counts" is the term used in the Indiana action) were considered by the Indiana Court at a trial on November 18-21, 2008 and January 8 and 9, 2009. The defendants in the Indiana action were represented by counsel and remain represented by counsel in the pending appeal discussed below. [ 11 ] At that trial, Gordon brought a successful motion to be excused from testimony at trial, on the basis that travel to Indiana from his home in Florida would have an adverse impact on his health.

In an affidavit filed for that motion, Dr. Zimmerman, Gordon's Florida physician, stated that he had treated Gordon for "non-Hodgkin's lymphoma requiring chemotherapy, hypertension, an abdominal aortic aneurysm, chronic low back pain, degenerative joint disorder in both knees that required left knee replacement 1 [cents] years ago, spinal stenosis, chronic lower extremity pain, chronic sacroiliac pain, and short term memory loss". [ 12 ] In Dr.

Zimmerman's medical opinion, Gordon's "age, prior medical history, and memory impairment not only jeopardizes his health but also his ability to testify competently" and "the stress of testifying, whether it be near his current residence in Florida or at a trial in Indianapolis, would not only be detrimental to [Gordon's] health, but also threaten his life and that requiring him to travel would also be detrimental to his health and threaten his life". [ 13 ] Gordon did not move to strike Continental's counterclaims against him or otherwise request any other relief with respect to the Indiana action on the basis of his alleged mental incompetency.

Gordon did not seek a stay due to health issues. He only asked to be relieved of the requirement under subpoena to testify and the Indiana Court granted that request after Continental opposed the motion. [ 14 ] In a 135-page judgment, dated October 19, 2009, the Indiana Court ruled that the individual defendants, Gordon and his sons, Alan and Douglas Symons, had engaged in a series of acts involving the fraudulent transfer of funds from the IGF Companies and that the individual defendants had personally gained from those fraudulent activities.

The Indiana Court pierced the corporate veil and issued judgment against the individual defendants, as well as against the IGF Companies. [ 15 ] Between October 19, 2009 and July 14, 2014, a number of procedural issues were addressed which prevented the issuance of a final judgment. On July 14, 2014, the Indiana Court issued an order summarizing the procedural history of the case and directing that an amended final judgment be issued.

The [page763] Indiana judgment (labelled as the "amended final judgment" by the Indiana Court) was issued on July 14, 2014, for judgment in the amount of US$46,231,536, with post-judgment interest at US$139 per day since July 14, 2014. [ 16 ] The defendants appealed the Indiana judgment and argument was heard on February 9, 2015. The Indiana Appellate Court has not yet issued its decision. [ 17 ] The defendants did not post the supersedeas bond necessary under Indiana law to obtain a stay of enforcement and did not move for a stay of enforcement pending appeal.

Consequently, there is no stay pending the appeal of the Indiana judgment. Analysis [ 18 ] The defendants make four submissions: (

i) the Indiana judgment is not final since an appeal has been heard and a decision by the Indiana Appellate Court is pending; (ii) Robert (as executor of Gordon's estate) submits that there was a breach of natural justice before the Indiana Court since Gordon was allegedly mentally incompetent during the trial; (iii) even if the Indiana judgment can be recognized and enforced in Ontario, the court should order a stay of enforcement of the Indiana judgment pursuant to s. 106, CJA and rule 20.08 "until such time as the Indiana Appellate Court releases its decision and the Defendants' rights of appeal have either expired or been exhausted"; and (iv) Robert (as executor of Gordon's estate) submits that any recognition and enforcement of the Indiana judgment in Ontario as against Gordon should be against "The Estate of Gerald Gordon Symons" and not against "Robert Symons, as successor in interest to G.

Gordon Symons also known as Gerald Gordon Symons, and as Trustee of the Estate of Gerald Gordon Symons".

[19] I address each issue below. Issue 1: Is the Indiana Judgment final? [20] The defendants submit that the Indiana judgment is not final as the appeal has been heard and a decision by the Indiana AppellateCourt is pending. However, the cases below establish that a decision is final when the court disposes of the issues and [page764] nojurisdiction remains in the court to abrogate or vary it, regardless of whether an appeal is pending. [21] In Four Embarcadero Center Venture v. Mr. Greenjeans Corp. (1998), (ON SC), 64 O.R. (2d) 746, [1988] O.J.No. 210 (H.C.J.) ("Four Embarcadero"), Henry J. dismissed the defendants' motion for

summary judgment and determination of a pointof law. The defendants sought an order dismissing the action for enforcement of a money judgment obtained in the courts of Californiasince the decision was under appeal (see the issue as set out at Four Embarcadero, at paras. 1 and 11). [22] The defendants in Four Embarcadero submitted that the judgment could not be final while it was under appeal (Four Embarcadero,at para. 21). The applicable law in California, as in Indiana in the present case, was that the judgment was not stayed pending appealunless the appellant posted a supersedeas bond. Henry J. stated (Four Embarcadero, at para. 38): In

summary, under the law of California the trial court no longer has jurisdiction to reopen the judgment; enforcement of the judgmentmay however proceed because no undertaking or appeal bond has been provided by the defendants and the Court of Appeal has refused awrit of supersedeas and a stay. [23] Henry J. then conducted a thorough review of Commonwealth and Ontario case law which had considered the issue of whether aforeign judgment was final even though under appeal (Four Embarcadero, at paras. 40-62).

Henry J. held that the law for enforcement ofa foreign judgment for the payment of money requires "finality" in the sense that the foreign court cannot abrogate or vary the judgment,but is not dependent on whether an appeal is pending. Henry J. held [at paras. 63, 66-69 and 72]: At this point I conclude that the law of Ontario defining the conditions upon which a foreign judgment for the payment of money to theplaintiffs may found an action to recover the judgment debt, has adopted the rule in Nouvion v. Freeman, and has applied it to bothjudgments adjudicated upon the merits and to judgments by default.

Under the law of Ontario the question to be asked is: "What are thecharacteristics of the foreign judgment that enable the judgment debt to be recovered by action in Ontario?" The answer is: "A judgmentthat, under the laws of the jurisdiction where it was made, is final between the parties in the sense that under the foreign law the courtthat made it has no jurisdiction or residual power to abrogate or vary it or to retry the issue that it has decided.

The fact that an appealis pending which may result in its being rescinded or varied does not deprive the judgment of its finality in the sense mentioned." . . . . . The matter has therefore gone beyond the reach of the trial court except for enforcement. By reason of ss. 916 and 917.1 of theCalifornia Code of Civil Procedure, which apply to a money judgment, enforcement of the judgment is not stayed by the appeal unlessthe defendants give an [page765] undertaking or post an appeal bond as described; or the Court of Appeal has issued a writ ofsupersedeas and a stay. None of these conditions has occurred.

There is here a certain anomaly -- the action by California statute law is still "pending" and in that sense is neither final nor res judicata;yet it is a final judgment for purposes of appeal because it is not interlocutory, there being no further judicial action required by the trialcourt to determine the rights of the parties. It is also final in the sense that it is at present enforceable in California, by statute.

In my opinion, notwithstanding the statutory rule that while the appeal is pending the action is also deemed to be pending, in the eyes ofOntario law it is final because it meets the test that the court that made it no longer has jurisdiction to abrogate or vary it, and moreoverit is enforceable in California as a judgment debt. The question remaining therefore is whether the aspect that it is not regarded as res judicata under California law bars the Ontario action.In my opinion it does not. . . . . .

Third An [sic] action may be commenced in Ontario to enforce a foreign money judgment that is final in the above sense,notwithstanding that it is under appeal where there is no stay of enforcement so that under the foreign law it may be enforcednotwithstanding pendency of an appeal. The preservation of enforceability of the judgment in the foreign jurisdiction, notwithstanding apending appeal, is an additional important and relevant, but not essential, factor.

If the judgment may be enforced in the foreignjurisdiction there is no sound reason of justice why it should not be enforced in Ontario; to do so in this jurisdiction requires thejudgment creditor to proceed by action, whatever may be his procedural recourse in the foreign country. (Emphasis added) [24] The defendants submit that the court should not follow the reasons of Henry J. because the Indiana judgment is not res judicata andHenry J. stated, in Four Embarcadero Venture v. Kalen (1988), (ON SC), 65 O.R. (2d) 551, [1988] O.J.

No. 411,1988 CarswellOnt 412 (H.C.J.) ("Kalen"), that, to enforce a foreign judgment, it must be res judicata (Kalen, at para. 33). [25] However, in Kalen, Henry J. referred to Four Embarcadero as the basis for the principle that a "judgment of the foreign Court isfinal in the sense that the Court that made it no longer has the power to rescind or vary it; this test is not altered by reason that thejudgment is under appeal" (Kalen, at para. 32).

Further, in Four Embarcadero, Henry J. expressly held that "the action by Californiastatute law is still aepending' and in that sense is neither final nor res judicata" (Four Embarcadero, at para. 67). Consequently, Henry J.

held that a foreign judgment was final for the purposes of enforcement when there was no power in the foreign court to vary or abrogatethe judgment, [page766] even though the foreign judgment was not "final" or "res judicata" in the sense that it was subject to appeal. [26] Henry J.'s thorough analysis was followed by MacPherson J. (as he then was) in Arrowmaster Inc. v. Unique Forming Ltd. (1993), (ON SC), 17 O.R. (3d) 407, [1993] O.J. No. 2737 (Gen. Div.) ("Arrowmaster"). [27] In Arrowmaster, MacPherson J. granted the defendant's motion to enforce a monetary judgment of the Illinois court against theplaintiff.

The appeal of the Illinois judgment had been argued but the decision was pending (just as in the present case). The plaintifffiled a statement of claim in Ontario seeking to recover the amounts it had been awarded by the Illinois court (Arrowmaster, at paras. 3-5). MacPherson J. granted the motion for

summary judgment. He held that the Illinois decision was final (Arrowmaster, at para. 14): In the present case, the judgment and order of the United States District Court are final. In its original and amended orders (September21 and December 18, 1992) that court has dealt with all the matters before it. Its decision has been appealed and, indeed, the appeal hasbeen heard. Put simply, the litigation has completely and irrevocably passed out of the hands of the District Court. (Emphasis added) [28] MacPherson J. further held (Arrowmaster, at para. 17): In conclusion, the plaintiff Arrowmaster has a stronger case here for

summary judgment than the plaintiffs in both Morguard Investmentsand Four Embarcadero v. Kalen. In those cases the plaintiffs sought the enforcement of default judgments obtained in "foreign" (Albertaand California) jurisdictions. Here the defendants attorned to the jurisdiction of the Illinois court by making a full defence on the merits(including a counterclaim) and by participating in a three-day trial. Moreover, the judgment of the Illinois court is a full judgment dealingwith all of the relevant issues. In those circumstances, the Illinois judgment is worthy of enforcement in Ontario.

In MorguardInvestments, La Forest J. said, at p. 1096: In a word, the rules of private international law are grounded in the need in modern times to facilitate the flow of wealth, skills andpeople across state lines in a fair and orderly manner. The state line in Morguard Investments was the Alberta-British Columbia border. Here the nexus would be Illinois and Ontario. In myview, nothing turns on this difference. The underlying philosophy of Morguard Investments and the safeguards enunciated by Henry J. inEmbarcadero v.

Kalen, taken together, provide the appropriate framework for considering whether true "foreign", i.e., non-Canadian,court orders should be enforced in Ontario. The Illinois court order at issue in this case should be enforced. Moreover, in my view, thereis no triable issue with respect to its enforcement in Ontario. Hence Arrowmaster is entitled to an order for

summary judgment underRule 20. (Emphasis added) [page767] [29] Similarly, in OZ Optics Ltd. v. Dimensional Communications Inc., [2004] O.J. No. 4543, 134 A.C.W.S. (3d) 1002 (Div. Ct.) ("OZOptics"), Quigley J. adopted the approach in both Four Embarcadero and Arrowmaster. Quigley J. granted the application by thedefendant for (

i) enforcement of a New Jersey monetary judgment against the plaintiff and (ii) dismissal of the plaintiff's claim. [30] In OZ Optics, as in the present case, the plaintiff had "initiated an appeal of the judgment in New Jersey by way of notice of appealfiled on or about March 23, 2004", but "has not petitioned for a stay of the New Jersey judgment nor has it posted a superseded [sic]bond as is required under New Jersey law for an application to stay a judgment" (OZ Optics, at paras. 19-20). [31] Quigley J. reviewed the settled law that enforcement of foreign judgments in Ontario requires that it be final and conclusivelyestablish the debt, regardless of whether there is an appeal.

Quigley J. relied on Four Embarcadero and held (OZ Optics, at para. 27): The finality contemplated in the test for enforcement of foreign judgments simply requires that the court that pronounced the judgmentno longer has jurisdiction to abrogate or vary it. [32] Recently, in Van Damme v. Gelber, [2012] O.J. No. 5394, 2012 ONSC 6277 (S.C.J.) ("Van Damme"), affd (2013), 2013 ONCA 388, 115 O.R. (3d) 470, [2013] O.J. 2750 (C.A.), leave to appeal to S.C.C. refused [2013] S.C.C.A. 342, Lederer J. followed thesame approach for a non-monetary foreign judgment.

After lengthy litigation, the applicant, Van Damme, had obtained judgment in NewYork requiring delivery of a painting.

The respondent, Gelber, had taken many steps to set aside rulings in the past, and was appealingthe New York judgment (although he had not perfected the appeal at the date of the hearing). [33] Lederer J. relied on the decision of Henry J. in Four Embarcadero and held (Van Damme, at paras. 25-26): I find that there is no stay in place which would act as an impediment to an order enforcing the various orders and judgment of Mr.Justice Fried. [34] Justice Lederer's decision that a non-monetary judgment could be enforced in the same manner as a monetary judgment (eventhough an appeal was pending in New York) was upheld by the Court of Appeal.

Doherty J.A. held ( (2013), 2013 ONCA 388 ,115 O.R. (3d) 470, [2013] O.J. No. 2750 (C.A.), at para. 3): I would dismiss the appeal. The appellant attorned to the jurisdiction of the New York court by litigating the merits of the claim in thatjurisdiction. That attornment provided a basis upon which an Ontario court could properly recognize the New York judgment.Furthermore, the motion judge [page768] did not err by exercising his discretion in favour of enforcing the New York judgment, eventhough it was not a money judgment, but rather an order for specific performance.

(Emphasis added) [35] In addition to the submission that the Indiana judgment is not "final" since it is not "res judicata" as an appeal is pending (which Irejected above), the defendants further rely on the decisions of the Supreme Court in Beals v. Saldhana, [2003] 3 S.C.R. 416, [2003]S.C.J. No. 77, 2003 SCC 72 ("Beals") and Pro Swing Inc. v. Elta Golf Inc., [2006] 2 S.C.R. 612, [2006] S.C.J.

No. 52, 2006 SCC 52("Pro-Swing"), in which the court affirmed the principle that enforcement of foreign judgments is consistent with principles of comityand require a final and conclusive decision. [36] However, those decisions do not alter the common law principles of finality and conclusiveness relied upon in all of the abovedecisions. Foreign judgments are "final" and "conclusive" when they cannot be varied or abrogated, regardless of whether under appeal(Four Embarcadero, at para. 44). [37] The decisions in Beals and Pro Swing confirm the common law (from Morguard Investments Ltd. v.

De Savoye, (SCC), [1990] 3 S.C.R. 1077, [1990] S.C.J. No. 135, which was considered by MacPherson J. in Arrowmaster) that a final judgment isrequired to be enforced under the principles of comity, but do not alter the law as to the meaning of "final" and "conclusive" in thecontext of a pending appeal. To the contrary, both Beals and Pro Swing were considered by the court in Van Damme. [38] Further, the principle of comity to permit enforcement of final foreign judgments (even if an appeal is pending) is consistent withthe most recent Supreme Court of Canada decision on enforcement of foreign judgments.

In Chevron Corp. v. Yaiguaje, [2015] S.C.J.No. 42, 2015 SCC 42 ("Chevron"), Gascon J. held (Chevron, at para. 44): [T]he purpose of an action for recognition and enforcement is not to evaluate the underlying claim that gave rise to the original dispute,but rather to assist in enforcing an already-adjudicated obligation. In other words, the enforcing court's role is not one of substance, but isinstead one of facilitation . . .

The court merely offers an enforcement mechanism to facilitate the collection of a debt within thejurisdiction. . . . in a recognition and enforcement case, the court does not create a new substantive obligation, but instead assists with thefulfillment of an existing one. [39] The above language in Chevron is consistent with the detailed review of the law by Henry J. in Four Embarcadero, and thesubsequent case law.

A foreign judgment is final and conclusive when the foreign court cannot vary or abrogate that [page769] decision.The foreign judgment is enforceable in the foreign jurisdiction when there is no stay and no supersedeas bond has been posted. The courtin Chevron affirmed that the role of the Ontario courts is to facilitate that enforcement under the principles of comity. [40] The defendants rely on a series of cases decided by C. Brown J. (CSA8-Garden Village, LLC v. Dewar, [2013] O.J. No. 4558, 2013ONSC 6229 (S.C.J.) ("CSA8"); Kavoussi v. Moos, [2014] O.J.

No. 2220, 2014 ONSC 2612 (S.C.J.) ("Kavoussi"); and Smythe v.Lymburner, [2015] O.J. No. 2757, 2015 ONSC 2719 (S.C.J.) ("Smythe")). However, in all of those cases, the judgment was either notunder appeal (CSA8, at para. 34), had been appealed and dismissed (both to the California appeal court and Supreme Court in Kavoussi,at para. 44), or had not been appealed (Smythe, at para. 36). None of these cases stand for the proposition that if a judgment is appealed,it no longer becomes final. [41] The defendants rely on the Ontario Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5 (the "Act").

Section 3 of the Act("s. 3") provides that no judgment shall be ordered to be registered under the Act if it is shown to the registering court that an appeal ispending or the judgment debtor is entitled and intends to appeal against the judgment. [42] The defendants' position is that the requirement for registration under s. 3 that no appeal be pending supports a similar requirementunder the common law for foreign judgments.

However, that submission is not supported by any of the case law discussed above. [43] Further, the fact that s. 3 was expressly included in the Act with respect to registration of a Canadian provincial or territorialjudgment could just as easily be supportive of a common law position that registration and enforcement of a foreign judgment couldproceed despite an appeal. Under Ontario law, there is an automatic stay of a monetary judgment pending appeal (rule 63.01) and theActapplies that same approach to judgments from Canadian provinces and territories subject to the Act.

There was no material before thecourt to demonstrate whether those provinces have similar stays of monetary judgments pending appeal in their rules of practice. [44] Using the converse logic to the defendants' submission, if the legislature had considered it appropriate to prohibit recognition andenforcement of final foreign judgments under appeal (or even if there is an intention to appeal), it could have done so but did not.[page770] [45] In any event, it is not even clear that the Act prohibits court recognition and enforcement of provincial and territorial decisions whenunder appeal.

Continental submits that the Act is limited to a registration process with a registrar or clerk (s. 2(3) of the Act) and does notprohibit enforcement by the court when the decision is under appeal. It is not necessary for me to decide this issue as the Act is limited tosubscribing provinces and territories and cannot be read to alter the settled common law applied in the cases I discuss above. [46] The defendants submit that "the Supreme Court of Canada [in Pro Swing] effectively applied this requirement of registration in the[Act] as a condition precedent applicable to the Dominion as a whole".

However, the Supreme Court cases support the comity ofenforcing judgments.

There is no suggestion in either Beals, Pro Swing, or Chevron that an enforceable foreign judgment should not berecognized and enforced in Ontario just because it is under appeal. [47] Further, the foreign jurisdictions considered by the courts in Four Embarcadero, Arrowmaster, OZ Optics and Van Damme all hadstatutory provisions that no stay of a monetary judgment is permitted under appeal, unless the appellant posts a supersedeas bond, as inthe present case. [48] Consequently, final foreign judgments under appeal are enforceable in Ontario and the role of the Ontario court ought to be one of"facilitation" (as per Gascon J. in Chevron), consistent with the law set out in the authorities reviewed in Four Embarcadero andfollowed by Ontario courts.

[ 49 ] For the above reasons, I find that the Indiana judgment is final even though an appeal decision is pending. Issue 2: Was there any denial of natural justice? [ 50 ] The defendant Robert, as executor of the estate of Gordon, submitted that Gordon was not mentally competent at the time of the trial, and asked this court to find a breach of natural justice based on the evidence filed before the court. I do not agree that this is the proper approach on an enforcement application. [ 51 ] In Beals , the court explained that enforcement could be denied in cases of a deprivation of natural justice.

The analysis of natural justice, however, depends on the process of the trial, not a determination by the enforcing court of whether a party was competent at trial. [ 52 ] A domestic court "must be satisfied that minimum standards of fairness have been applied to the Ontario defendants by the foreign court" and that the defendant had a "fair process". [page771] The burden of alleging unfairness in the foreign legal system rests with the defendant in the foreign action.

Fair process "reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system" and "[t]his assessment is easier when the foreign legal system is either similar to or familiar to Canadian courts" ( Beals , per Major J., at paras. 59-62). [ 53 ] Lebel J., in Beals (dissenting, but not on this point), stated that "The defence [of natural justice] concerns the procedure by which the foreign court reached its decision.

The clearest examples of a deprivation of natural justice occur when the defendant lacks notice of the foreign proceedings or an opportunity to present his case to the court" ( Beals , at para. 235 ). [ 54 ] In Pro Swing , Deschamps J. spoke for the majority and held ( Pro Swing , at para. 12), . . . absent evidence of fraud or a violation of natural justice or of public policy, the enforcing court is not interested in the substantive or procedural law of the foreign jurisdiction in which the judgment sought to be enforced domestically was rendered. [ 55 ] The defence of natural justice does not relate to the merits of the claim.

It is about the procedure or process. In Sincies Chiementin S.p.A. (Trustee of) v. King , [2010] O.J. No. 5124 , 2010 ONSC 6453 (S.C.J.) , Whalen J. held, at para. 194: The defence of natural justice does not relate to the merits of the claim. Rather, it is about the procedure or process by which the foreign court arrived at its judgment, for example some failure of the Canadian standard of due process. For the Defendant to succeed on this line of defence, the foreign court must have offended the Canadian concept of natural justice.

Similarly, to succeed in a public policy defence, the Defendant must satisfy the court that the judgment of the foreign court was based on foreign law that is contrary to the fundamental morality of the Canadian justice system, for example the judgment was the result of bias or corruption. The Defendant bears the onus of proof in both instances. (Emphasis added) [ 56 ] In Van Damme , Lederer J. reviewed the above principles and held that the New York decision was not in violation of natural justice.

He held ( Van Damme , at para. 58): The procedures in the foreign court, in this case the courts of the State of New York, need not replicate the procedures followed in Canada in order to meet the minimal standards of procedural fairness or conform to the requirements of Ontario public policy. There is nothing inherently unfair or contrary to Ontario concepts of public policy in judicial determinations being made based on transcripts and a written record, by an impartial decision-maker, following an adequate opportunity to be heard.

There is no reason to find that there was a denial of natural justice in the proceedings undertaken in New York. [page772] [ 57 ] Consequently, it is not the role of the enforcing court to make a finding as to whether a defendant was incompetent at the time of trial. The role of the court is to review the process before the foreign court to be assured that the process was fair. [ 58 ] In the present case, there is no evidence that the Indiana Court took any steps to deny the defendants a fair process. Gordon successfully sought an order that he not give evidence at trial.

The Indiana Court then heard all of the evidence led by the parties in the Indiana action. The defendants were represented by competent counsel at trial, who continues to represent the defendants on appeal. There is no suggestion that the defendants were not given notice of the proceedings or were not given a fair opportunity to present their case in court. [ 59 ] If Gordon believed he was going to be denied natural justice because he was incompetent or could not testify for medical reasons, he had the opportunity to bring a motion to adjourn the trial or take other steps before the Indiana Court.

His counsel took no such steps, and did not raise this issue as a ground of appeal. If the issue of mental competency had been raised in the Indiana action, the Indiana Court would have been able to deal with the issue as part of its trial process, and unless that process to consider the issue was not fair, it is not for an enforcing court to make a substantive finding of competency at trial. The issue is whether the trial process was unfair. [ 60 ] The defendants also seek to transform the substantive decision of the Indiana Court into a lack of fair process.

The defendants submit that Gordon could not have been found personally liable for fraud "without any relevant evidence" and "notwithstanding the fact the Indiana Court granted [Gordon's] request to avoid having to attend at Trial" (italics in original).

At the hearing of this motion, the defendants submitted that there was a higher standard of proof required to establish fraud or to lift the corporate veil, and, as such, Gordon ought not to have been found personally liable when he did not give evidence at trial. [ 61 ] However, the Indiana Court considered all of the evidence before it and found Gordon personally liable for fraud. There is no evidence that such a determination was made without fair process.

The choice of Gordon to bring a motion for an order that he was not required to testify, which was accepted by the Indiana Court, was part of that process and it cannot be said that a decision based on the existing evidence is a violation of natural justice.

[ 62 ] Similarly, the submission that the Indiana Court "discloses no reliance on any direct evidence from [Gordon]" is a substantive [page773] complaint, not a procedural fairness issue. The Indiana Court released a 135-page judgment in which it found, on the evidence, that Gordon was personally liable for fraud.

Robert submits that there was an error of natural justice since no reference was made to Gordon's "direct evidence", but Gordon sought exactly that result before the Indiana Court, i.e. , he successfully brought a motion that he not be required to testify. [ 63 ] The defendants' submission that the Indiana Court denied natural justice since a higher standard of proof is required for fraud as compared to proving "ordinary matters" is again a substantive issue and does not address procedural unfairness of the trial. [ 64 ] Consequently, there is no evidence to support a finding of procedural unfairness before the Indiana Court and, as such, this defence to enforcement fails. [ 65 ] For this reason, I make no finding as to whether Gordon was mentally incompetent at the time of the trial.

While both parties led some evidence on the issue, it is not necessary (or appropriate) for me to make a finding for the reasons I set out above. [ 66 ] For the above reasons, I grant

summary judgment for recognition and enforcement of the Indiana judgment. Issue 3: Is a stay of enforcement appropriate? [ 67 ] The defendants submit that a stay of enforcement of the

summary judgment is appropriate pending the decision of the Indiana Appellate Court and until "the Defendants' rights of appeal have either expired or been exhausted". [ 68 ] In Four Embarcadero , Henry J. held that a stay of execution of enforcement could be appropriate to safeguard the rights of a judgment debtor pending appeal ( Four Embarcadero , at para. 72).

He did not have to decide that issue as he dismissed the motion by the defendants to dismiss the plaintiff's enforcement action. [ 69 ] In Arrowmaster , MacPherson J. considered the issue of "whether a stay of execution should be granted" with respect to the enforcement of a foreign judgment when the appeal was brought "in a timely fashion and the results of that appeal are imminent" ( Arrowmaster , at para. 1). The defendants in that case advanced the same alternative argument as in the present motion. [ 70 ] MacPherson J. noted that the defendants had acted promptly to bring and hear the appeal.

He further noted that the decision from the appellate court would likely be released four to six months after the hearing ( Arrowmaster , at para. 19). [page774] [ 71 ] As in the present case, there was no evidence before the court in Arrowmaster as to whether the refusal of a stay would render the appeal nugatory or whether one or both parties would suffer some loss if the stay was either granted or refused.

MacPherson J. did not accept the bald assertion that the defendants would suffer irreparable harm if the stay was refused, and there was no evidence from the plaintiff about the importance of immediate enforcement ( Arrowmaster , at paras. 25-26). [ 72 ] MacPherson J. also held that it would not be "realistic" or "desirable" for a motion judge to make a determination of the bona fides or substance of the appeal ( Arrowmaster , at paras. 22-24). [ 73 ] MacPherson J. held that on the issue of a stay, it was appropriate to consider "one other particularly important factor, namely, the chronology and conduct of the litigation in the foreign jurisdiction, especially with respect to the appeal component of the litigation" ( Arrowmaster , at para. 24).

MacPherson J. considered that conduct and granted a stay. He held [at paras. 30-31 and 35-36]: On the chronology point, the defendants' argument for a stay is based on the following factors -- the defendants attorned to the jurisdiction of the Illinois trial court, they defended fully and fairly (e.g., without any delay) in that court, they appealed the decision promptly, the appeal has been heard, and a judgment from the appellate court is imminent.

In these circumstances, say the defendants, it is appropriate to permit the Illinois litigation to come to a full and final conclusion before permitting execution on the defendants' assets in Ontario. I find this argument persuasive. The case law makes it clear that a stay of execution pending a decision in an appeal is a matter of judicial discretion[.] . . . . . In the present case, I believe that a stay of execution is warranted.

In International Corona Resources, supra , Goodman J.A. said, at p. 255: I am of the view that as a general rule it is in the interest of justice that the " status quo " be maintained pending an appeal where such can be done without prejudicing the interest of the successful party. The fact situation in International Corona Resources (a huge mining operation) is very different from the simple contract action in this case. Nevertheless, in all the circumstances of this case I believe it appropriate to maintain the status quo until the Illinois appellate court has rendered its decision.

The case involves a monetary amount and there is no evidence before me that the plaintiff will be prejudiced if it receives the principal amount and accumulated interest a few months from now if the defendants' appeal is unsuccessful. Moreover, the appeal has been argued and the information, admittedly more informal that one would like, about a decision in four to six months from September 15, 1993 strikes me as reasonable. [page775] As well, both parties have, up to this time, conducted the litigation, fully and fairly, in the Illinois court.

In all of these circumstances, my conclusion is that the hardship factor cuts about equally for both parties but the chronology and process of litigation factor tells in favour of the defendants. They are entitled to an order staying execution of the

summary judgment obtained by the plaintiff until after the United States Appellate Court has rendered its decision.

(Emphasis added) [74] Finally, MacPherson J. rejected the plaintiff's submission that the failure to post a supersedeas bond was a basis to deny a stay. Heheld (Arrowmaster, at para. 29): The short answer to the plaintiff's argument on this point is that Rule 62 deals with stays of execution in Illinois. Since, presumably, thedefendants have no assets in Illinois it was unnecessary for them to give a supersedeas bond.

A conclusion that, by inference orextension, Rule 62 should be interpreted as laying down a procedural requirement for staying an execution on an Illinois court order inIllinois and in foreign jurisdictions would be, in my view, both outside the wording of Rule 62 and contrary to the fundamental principlethat laws are intended to operate within their territorial limits. [75] In OZ Optics, Quigley J. granted a motion by OZ Optics "for a stay of the enforcement of this judgment . . . pending the finaldetermination of the New Jersey action" (OZ Optics, at para. 41). [76] In Van Damme, the defendant Gelber sought a stay of Justice Lederer's enforcement decision pending the outcome of the New Yorkappeal (Van Damme, at para. 27).

Lederer J. held that there was no automatic right to a stay (Van Damme, at para. 28): This does not mean that, in every circumstance where there is no stay, the court will allow for enforcement but stay that determinationuntil after the appeal in the foreign jurisdiction has been completed and determined. The question of whether, in such circumstances, astay will be granted, is a matter of judicial discretion (see: Arrowmaster Inc. v. Unique Forming Ltd. (1993), (ON SC),17 O.R. (3d) 407, at para. 34). [77] As in Arrowmaster, Lederer J. found that the evidence did not support particular hardship on either side.

He then reviewed theconduct of the various appeals to consider "whether Gelber has proceeded with his various appeals, not in a good faith effort to resolvethe matter but, rather, to delay its resolution. Has he been and is he continuing to aerag the puck'?" (Van Damme, at para. 34). [78] Lederer J. noted that the motion before him was the "sixth attempt brought on behalf of Gelber to re-open the matter and contest thefinding that Gasiunasen was his authorized agent" and expressed a concern that "The court is not a hockey rink and its proceedings arenot a game. This is not a place to [page776] rag the puck.

Ultimately, the court has to protect its own process" (Van Damme, at para. 68). [79] Despite his concerns, Lederer J. granted "what I hope will be a short stay" which would remain in place until the appeal wasdetermined, provided that Gelber perfect his appeal by the date of issuance of reasons. Lederer J. further held that the stay would belifted "regardless of any appeals of that decision" (Van Damme, at paras. 69-71). [80] On the current evidence before the court, there is no evidence of hardship to either side. Further, the current evidence demonstratesprompt conduct by the defendants in bringing the appeal.

Consequently, I rely on Arrowmaster and Van Damme and grant the interiminterim stay until the earlier of (

i) the date the Indiana Appellate Court releases its decision and the defendants' rights of appeal haveeither expired or been exhausted; or (ii) December 15, 2015, when I will hear submissions and review evidence on the interim stay. [81] Continental sought an adjournment of the decision for an interim stay in order to introduce evidence to address the relevantevidentiary elements to oppose a stay and respond to the request for a stay set out in the defendants' factum.

The defendants reasonablyagreed to the adjournment of that issue, subject to the interim interim stay I have ordered above. [82] However, I note the cautionary words of Lederer J. in Van Damme. My order granting the interim interim stay or any subsequentorder for an interim stay, if appropriate, is without prejudice to Continental bringing a motion to the court to lift the stay upon evidencethat the defendants are not moving promptly to exhaust their rights of appeal.

The court's exercise of its discretion to the defendantsought not to be taken as carte blanche to delay enforcement for an indefinite period while dragging out appeal rights. [83] Finally, Continental sought terms of the interim interim stay that it be permitted to (

i) register writs of seizure and sale and (ii)examine Robert as executor of the estate of Gordon on a list of assets provided in an undertaking. I do not agree that such terms areappropriate. [84] Under a stay of execution, the general rule is that it is in the interest of justice to preserve the status quo pending an appeal(Arrowmaster, at paras. 35-36).

In the present case, permitting the registration of a writ of execution is a step in the execution process.The only exception under the Rules to permit such a step for Ontario judgments is pending an appeal (rule 63.03(3)), and to expand suchrelief would permit a form of execution when a stay has been ordered.

Further, such term would [page777] be inconsistent with the stayof execution ordered in all of the cases cited above. [85] Similarly, an examination of Robert as executor of the estate of Gordon on a list of assets would be an enforcement step and wouldalso be inconsistent with the stay of execution ordered in all of the cases cited above.

Issue 4: Should enforcement of the judgment be restricted to "The Estate of Gerald Gordon Symons"? [86] Robert (as executor of Gordon's estate) submits that he was not a party to the foreign litigation and was never intended to be aprincipal judgment debtor in accordance with the terms of the Indiana judgment.

Robert further submits that Ontario does not recognizethe foreign concept of "successor in interest" and, as such, it should not be recognized in this jurisdiction. [87] Robert also submits that a judgment against him as a "successor in interest" could cause a reasonable person to be confused thatRobert is personally liable either as a "successor in interest" to his late father or due to personal wrongdoing in Gordon's estate to theextent of over US$45 million in fraud.

Robert submits that the interests of justice and balance of convenience militate in favour ofnarrowing the identity of the judgment debtor to "The Estate of Gerald Gordon Symons". [88] At the hearing, Continental did not ask the court to recognize and enforce the Indiana judgment against Robert as "successor ininterest" as that term does not exist in Ontario law. However, I agree with Continental that it is appropriate to recognize and enforce the

Indiana judgment against Robert in his capacity as executor of Gordon's estate. [ 89 ] Rule 9.01 provides for proceedings to be brought against the executor of an estate and, as such, there is no legal basis to restrict the recognition and enforcement to "The Estate of Gerald Gordon Symons". [ 90 ] While Gordon's counsel submitted that there may be confusion as to whether Robert was personally involved in the impugned conduct or might be personally liable, I adopt the comments of the Indiana Court which considered a similar issue when Robert sought an order "changing the caption and paragraph C of the Amended Final Judgment from aeRobert Symons, as successor in interest of G.

Gordon Symons', to aeRobert Symons, as Executor of the Estate of G. Gordon Symons'" (see reasons dated December 12, 2014, at p. 2). Chief Judge Young held (at pp. 2-3): Under either scenario, Symons, who was substituted as a party pursuant to Federal Rule of Civil Procedure 25 [just as Robert is named as an executor [page778] under Rule 9], is a defendant only in his capacity as a representative of the Estate of G. Gordon Symons.

Accordingly, Symons' Motion to Amend [the Indiana Judgment] is DENIED . (Emphasis and block letters in original) [ 91 ] Similarly, my order that recognition and enforcement be permitted against Robert in his capacity as executor of Gordon's estate does not suggest any improper conduct by Robert or his personal liability with respect to the matters arising from the Indiana action. Order and Costs [ 92 ] I grant Continental's motion for

summary judgment and order the recognition and enforcement of the Indiana judgment against all of the defendants, with the order concerning Robert to be against him in his capacity as executor of Gordon's estate. I grant the interim interim stay until the earlier of (

i) the date the Indiana Appellate Court releases its decision and the defendants' rights of appeal have either expired or been exhausted; or (ii) December 15, 2015, when I will hear submissions and review evidence on the interim stay. [ 93 ] The defendants submit that costs should be reserved until the Indiana Appellate Court releases its decision and the defendants' rights of appeal have either expired or been exhausted.

I am not prepared to make such an order at this time as the standard procedure is for a court to order costs upon conclusion of the motion and there is no basis at this time to postpone costs until possibly many years of appeal have been exhausted. [ 94 ] However, I reserve costs of this motion to the hearing of the remaining issues on the interim stay. While Continental was successful in seeking recognition and enforcement, the defendants successfully obtained an interim interim stay without the terms sought by Continental.

Also, the motion for an interim stay returnable December 15, 2015 will incur further costs. All of those costs should be considered collectively at the hearing of the interim stay. [ 95 ] On consent, I also amend the title of proceedings by substituting the name for the defendant "Goran Capital, Inc." with "Goran Capital Inc." wherever it appears in the title of proceedings. [ 96 ] I thank counsel for their thorough written and oral submissions which were of great assistance to the court. Motion granted. End of Document