YAPI ve KREDI BANKASI ANONIM SIRKETI APPLICANT - v. –, 2023 SKKB 126
Opinion
KING ’S BENCH FOR SASKATCHEWAN 2023 SKKB 126 Date: 2023 06 16 Docket: QBG-RG-01686-2022 Judicial Centre: Regina BETWEEN: YAPI ve KREDI BANKASI ANONIM SIRKETI APPLICANT - and – HUSEYIN ARSLAN RESPONDENT Counsel: Michael W. Milani, K.C. and William Lane for the applicant Deron Kuski, K.C., Shawna Sparrow and Kevin Mellor for the respondent DECISION ROBERTSON J. June 16, 2023 Contents Paragraphs INTRODUCTION .. 1 BACKGROUND .. 2-7 Basic facts . 2-4 Evidence . 5-6 Chronology of events . 7 ISSUES . 8
POSITION OF PARTIES . 9-10 Bank .. 9 Mr.
Arslan . 10 ANALYSIS . 11-80 The Enforcement of Foreign Judgments Act 12-13 Case law .. 14-19 Burden of Proof . 20-22 Onus of proof 20-21 Standard of proof 22 Jurisdiction of Turkish Courts . 23-26 Saskatchewan Filing requirements . 27 Reasons for refusal to register . 28-29 Final Decision? . 30-43 Certain Amount? . 44-47 Natural justice and procedural fairness? . 48-79 Access to Justice . 51-56 Standard requirement 57-58 Purpose of court fees . 59-61 Ability to pay . 62-68 Payment deadline . 69-76 Turkish Courts inherent jurisdiction to consider fairness . 77 Conclusion . 78-79 Decision . 80 Costs . 81 Order . 82 INTRODUCTION [ 1 ] This decision addresses an originating application to register a foreign judgment in Saskatchewan.
For the reasons which follow, the application is granted. BACKGROUND Basic facts [ 2 ] The applicant Yapi ve Kredi Bankasi Anonim Sirketi [Bank] is a commercial bank operating in the Republic of Turkey. The Bank loaned money in Turkish Lira [TL] and United States of America dollars [USD] to a Turkish company, Arista Yatirim ve Yonetim Holdings A.S. [Arista]. The respondent Huseyin Arslan [Mr. Arslan] was one of several guarantors for the loan. [ 3 ] Arista failed to repay the loans and the Bank looked to the guarantors for payment.
The Bank obtained judgment in Turkey which it now seeks to register under The Enforcement of Foreign Judgments Act , SS 2005, c E-9.121 [ Act ]. [ 4 ] The judgment debt amount is large. The Bank, in the originating application at para. 3(f)(i)(
a) stated the outstanding principal amount of the Arista debt as $64,215,150 USD, but the judgment includes other amounts. An affidavit filed by the Bank (Cemal Aybars Sanal sworn December 20, 2022 at para. 36) listed amounts then owing by Mr. Arslan in excess of $200 million in Canadian currency. Mr. Arslan restated these amount in his brief of law at para. 18.
Evidence [ 5 ] The parties filed six affidavits: For the Bank: (
a) Dr. Selcuk Oztek, attorney, sworn December 13, 2022 [Oztek Affidavit]; (
b) Cemal Aybars Sanal, assistant general manager of legal administration of the Bank, sworn December 20, 2022 [Sanal Affidavit #1]; (
c) Turgut Agar, translator, sworn December 20, 2022 [Agar Affidavit #1]; (
d) Cemal Aybars Sanal, sworn March 24, 2023; (
e) Turgut Agar, translator, sworn April 28, 2023 [Agar Affidavit #2]; and For Mr. Arslan: (
f) Huseyin Arslan, respondent, sworn April 4, 2023 [Arslan Affidavit]. [ 6 ] The expert opinion on Turkish law and procedure provided by Dr. Oztek is attached to his affidavit as exhibit “C” in its original Turkish and to the Agar Affidavit #1 as exhibit “C” translated to English. [Oztek Opinion]. References below to the Oztek Opinion are to the English translation. Chronology of events [ 7 ] The following chronology of events affidavit evidence can be gleaned from the filed materials: 2015 March 31 Bank served Mr.
Arslan with default notice and demand for payment of Arista debt (Sanal Affidavit #1 at para. 12) May 12 Bank commenced enforcement proceedings against guarantors, including Mr. Arslan (Arslan Affidavit at para. 5) May 15 Mr.
Arslan filed objection petition (Sanal Affidavit #1 at para. 14) This stopped debt enforcement (Oztek Opinion at p. 28) June 4 Bank commenced lawsuit against guarantors (Sanal Affidavit #1 at para. 18; and Arslan Affidavit at para. 8) This is described as an action for revocation of objection (Oztek Opinion at p. 28) July 13 Arista declared bankrupt by the Commercial Court of First Instance (Arslan Affidavit at para. 4) 2017 September 15 Mersin 1 st Commercial Court of First Instance [Trial Court] decision accepting part of Bank’s claim and dismissing objection by Mr.
Arslan (Sanal Affidavit #1 at para. 21; Arslan Affidavit at para. 7; and Agar Affidavit #2 at Exhibits “A” and “B”) November 14 Bank filed notice of appeal against Trial Court decision (Sanal Affidavit #1, para. 27; and Arslan Affidavit, para. 8) November 17 Mr. Arslan filed notice of appeal against Trial Court decision (Sanal Affidavit #1 at para. 26; and Arslan Affidavit at para. 8) December 25 Adana Regional Court of Justice [Turkish Court of Appeal] decision declining Mr.
Arslan’s request for legal assistance, including waiver of appeal filing fees, and directing letter be sent requiring payment within one week (Arslan Affidavit at para. 11 and Exhibit “A”; and Oztek Opinion at p. 50) 2018 January 29 Letter to Mr. Arslan from Turkish Court of Appeal warning that appeal fee must be paid within one week (Agar Affidavit at para. 12 and Exhibit “B”) November 9 Appeal decision upholding 2017 decision declining Mr.
Arslan’s request for fee waiver (Oztek Opinion at p. 51) 2019 May 28 Turkish Court of Appeal decision dismissing appeals from both parties (Sanal Affidavit #1 at para. 29; Arslan Affidavit at para. 13; and Agar Affidavit #2 at Exhibit “C” and “D”) September 3 Bank filed appeal to Supreme Court of Appeals of Turkey [Turkish Supreme Court] (Sanal Affidavit #1 at para. 31) December 11 Turkish Supreme Court denied Mr. Arslan’s request for filing fee waiver (Arslan Affidavit at para. 17; and Oztek Opinion at p. 52)
2020 February 6 Turkish Court of Appeal decision requiring Mr.
Arslan pay filing fee within one week or appeal request will be deemed waived (Arslan Affidavit at para. 16 and Exhibit “C”) 2021 June 24 Supreme Court of Appeals of Turkey dismissed appeals (Agar Affidavit #1 at Exhibits “A” and “B”; and Arslan Affidavit at para. 17) 2022 July 8 Bank filed Originating Application with the Court of Queen’s Bench for Saskatchewan seeking to register Turkish judgment 2023 June 8 Application heard in Regina Civil Chambers by Robertson J. with decision reserved ISSUES [ 8 ] The issue is whether the court should grant the Bank’s application to register the Turkish judgment.
This involves consideration of four questions:
(1) Has the Bank met the requirements under the Act for registration? If so, then has Mr. Arslan established a reason for refusal to register, in particular:
(2) Is the decision final?
(3) Is the monetary amount awarded in the decision certain?
(4) Was the Turkish judicial process contrary to natural justice or procedural fairness in that the appeal filing fees prevented access to justice? POSITION OF PARTIES Bank [ 9 ] The Bank says it has met the requirements for registration of a foreign judgment. While the Saskatchewan Court of King’s Bench exercises a supervisory jurisdiction to protect the integrity of the system, its role is primarily one of facilitation to ensure that international commerce continues through reciprocal respect for judgments. Mr. Arslan [ 10 ] Mr.
Arslan says that the Turkish judgment cannot be registered for any one of three reasons: 1) The decision is not final; 2) The amount of the judgment debt is not certain; or 3) The procedure was contrary to principles of natural justice because exorbitant court fees created a barrier to appeal of the Trial Court decision. ANALYSIS [ 11 ] Before turning to the questions, I will review the statutory framework, case authorities and burden of proof relevant to this application.
The Enforcement of Foreign Judgments Act [ 12 ] The Act in s. 12 provides for the enforcement of foreign judgments in Saskatchewan by registration of the foreign judgment. The Act constitutes a complete code. [ 13 ]
Section 14 provides that upon registration, the foreign judgment is enforceable as if it were a judgment of this Court. Registration 12(1) A foreign judgment that is enforceable pursuant to this Act may be registered pursuant to this Part.
(2) If a foreign judgment contains parts that may be enforced separately, the judgment creditor may register the judgment with respect to those parts at different times.
(3) The judgment creditor must give to the judgment debtor a notice of intention to register a foreign judgment with respect to one or more of its parts: (
a) indicating which of the grounds set out in
section 8 are being relied on to claim that the court in the state of origin had jurisdiction to make the foreign judgment; and (
b) identifying the parts.
(4) A judgment creditor may register a foreign judgment by filing with the enforcing court: (
a) a copy of the foreign judgment certified as true by a proper officer of the court that made the order; (
b) a copy of the notice mentioned in subsection (3); (
c) an application to modify the foreign judgment, if the judgment creditor is of the opinion that the judgment must be amended by the enforcing court to render it enforceable; and (
d) a certified translation of the foreign judgment into either English or French, if it was not given in one of those languages. . . . Enforcement 14(1) On registration, a foreign judgment is enforceable as if it were a judgment of the enforcing court.
Case law [ 14 ] The Supreme Court of Canada has considered registration of foreign judgments in Beals v Saldanha , 2003 SCC 72 , [2003] 3 SCR 416 [ Beals ] , Pro Swing Inc. v Elta Golf Inc ., 2006 SCC 52 , [2006] 2 SCR 612 , [ Pro Swing ] and Chevron Corp. v Yaiguaje , 2015 SCC 42 , [2015] 3 SCR 69 [ Chevron ] . [ 15 ] In Beals , Major J. writing for the majority at paras. 59-60 and 64 discussed the requirement that the procedure by which the foreign judgment was obtained conform to minimum standards of fairness.
(2) The Defence of Natural Justice 59 As previously stated, the denial of natural justice can be the basis of a challenge to a foreign judgment and, if proven, will allow the domestic court to refuse enforcement. A condition precedent to that defence is that the party seeking to impugn the judgment prove, to the civil standard, that the foreign proceedings were contrary to Canadian notions of fundamental justice. 60 A domestic court enforcing a judgment has a heightened duty to protect the interests of defendants when the judgment to be enforced is a foreign one.
The domestic court must be satisfied that minimum standards of fairness have been applied to the Ontario defendants by the foreign court. 61 The enforcing court must ensure that the defendant was granted a fair process. Contrary to the position taken by my colleague LeBel J., it is not the duty of the plaintiff in the foreign action to establish that the legal system from which the judgment originates is a fair one in order to seek enforcement.
The burden of alleging unfairness in the foreign legal system rests with the defendant in the foreign action. 62 Fair process is one that, in the system from which the judgment originates, reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system. This determination will need to be made for all foreign judgments. Obviously, it is simpler for domestic courts to assess the fairness afforded to a Canadian defendant in another province in Canada.
In the case of judgments made by courts outside Canada, the review may be more difficult but is mandatory and the enforcing court must be satisfied that fair process was used in awarding the judgment. This assessment is easier when the foreign legal system is either similar to or familiar to Canadian courts. 63 In the present case, the Florida judgment is from a legal system similar, but not identical, to our own.
If the foreign state’s principles of justice, court procedures and judicial protections are not similar to ours, the domestic enforcing court will need to ensure that the minimum Canadian standards of fairness were applied. If fair process was not provided to the defendant, recognition and enforcement of the judgment may be denied. 64 The defence of natural justice is restricted to the form of the foreign procedure, to due process, and does not relate to the merits of the case. The defence is limited to the procedure by which the foreign court arrived at its judgment.
However, if that procedure, while valid there, is not in accordance with Canada’s concept of natural justice, the foreign judgment will be rejected. The defendant carries the burden of proof and, in this case, failed to raise any reasonable apprehension of unfairness. [ 16 ] In Pro Swing Inc at para 11 , the Supreme Court of Canada confirmed that a foreign judgment must be certain and final to be recognized and enforced in Canada. 11 The foreign judgment is evidence of a debt.
All the enforcing court needs is proof that the judgment was rendered by a court of competent jurisdiction and that it is final, and proof of its amount. The enforcing court then lends its judicial assistance to the foreign litigant by allowing him or her to use its enforcement mechanisms. … [ 17 ] In Chevron , Gascon J. writing for the majority at paras. 43-44 and 53 reviewed the purpose of recognition and enforcement proceedings: (
a) Purpose of Recognition and Enforcement Proceedings [43] Canadian law recognizes that the purpose of an action to recognize and enforce a foreign judgment is to allow a pre-existing obligation to be fulfilled; that is, to ensure that a debt already owed by the defendant is paid. As Pitel and Rafferty explain, such an action “is based not on the original claim the plaintiff had pursued against the defendant but rather on the obligation created by the foreign judgment”: p. 159; see also P. M. Perell and J. W. Morden, The Law of Civil Procedure in Ontario (2nd ed. 2014), at ¶11.177.
The following comment made by McLachlin C.J. in Pro Swing (although in dissent) also reflects this logic: “Barring exceptional concerns, a court’s focus when enforcing a foreign judgment is not on the substantive and procedural law on which the judgment is
based, but instead on the obligation created by the judgment itself” (para. 77). [44] Important consequences flow from this observation. First, the purpose of an action for recognition and enforcement is not toevaluate the underlying claim that gave rise to the original dispute, but rather to assist in enforcing an already-adjudicated obligation. Inother words, the enforcing court’s role is not one of substance, but is instead one of facilitation: Pro Swing, at para. 11. The court merelyoffers an enforcement mechanism to facilitate the collection of a debt within the jurisdiction.
This entails that the enforcing court doesnot exercise jurisdiction in the same way as it does in actions at first instance.
In a first instance case like Van Breda [Club Resorts Ltd. vVan Breda, 2012 SCC 17, [2012] 1 SCR 572], the focus is on whether the court has jurisdiction to determine the merits of a substantivelegal claim; in a recognition and enforcement case, the court does not create a new substantive obligation, but instead assists with thefulfillment of an existing one. . . . [53] As this review of the Court’s statements on comity shows, the need to acknowledge and show respect for the legal acts of otherstates has consistently remained one of the principle’s core components.
Comity, in this regard, militates in favour of recognition andenforcement.
Legitimate judicial acts should be respected and enforced, not sidetracked or ignored. … [18] In Britton v Simon (Estate), 2016 SKQB 30, 395 DLR (4th) 139 [Britton] Kalmakoff J. (as he then was) referredto Beals and Chevron in the context of an application under the Act, concluding at para. 25 that natural justice and procedural fairnesshad three aspects: 1) notice of the claim; 2) opportunity to defend; and 3) opportunity to be heard. [30] In order for a foreign judgment to be enforceable, the process by which it was produced does not have to be perfect, nor does it haveto be the fairest process imaginable.
It must simply be one which satisfies the enforcing court that minimum applicable standards offairness were met: Beals, at para 60. Generally speaking, minimum standards of natural justice and procedural fairness require thatdefendants in a civil action be given adequate notice of the claim being made against them, the opportunity to defend the case, and the opportunity to be heard: Society of Lloyd’s v Saunders (2001), (ON CA), 210 DLR (4th) 519 (Ont CA).
Meredifferences in procedure, court rules, or the manner in which discretionary decisions are made do not equate to a denial of natural justice:Contacare [Contacare Inc. v CIBA Vision Corp., 2011 ONSC 4276]; Lasersight Inc. v Wiese, 2001 BCCA 345. [19] In Double Diamond Distribution Ltd. v Garman Turner Gordon LLP, 2021 SKCA 61, [Double Diamond] thecourt dismissed an appeal from a decision to grant an order enforcing a judgment of a Nevada Court. In doing so, Leuer J.A., writing forthe court, referred to Beals, Chevron and Britton in discussing the statutory scheme under the Act.
Leuer J.A. wrote at para. 36 about thelimited role of a court considering an application to register a foreign judgment: [36] The fundamental reason why a Saskatchewan court asked to register a foreign judgment does not have broad-based authority toinquire into the details of the substantive and procedural law on which that judgment is based is because of the nature of the obligation itis being called to enforce.
In Chevron, Gascon J. explained that an action on a foreign judgment was “based not on the original claim theplaintiff had pursued against the defendant but rather on the obligation created by the foreign judgment” (at para 43, quoting fromStephen G.A. Pitel and Nicholas S. Rafferty, Conflict of Laws (Toronto: Irwin Law, 2010) at 159). This explains why “the purpose of anaction for recognition and enforcement is not to evaluate the underlying claim that gave rise to the original dispute, but rather to assist inenforcing an already-adjudicated obligation” (Chevron at para 44).
For this reason, “the facts underlying the original judgment areirrelevant, except insofar as they relate to potential defences to enforcement” (at para 45). From these and other decisions, I accept that on an application to register a foreign judgment, the court must focus on the requirements ofthe Act and avoid straying into other territory. Burden of Proof Onus of proof [20] The applicant has the onus of satisfying the statutory requirements for registration.
If it satisfies thoserequirements, then the foreign judgment will be registered and enforceable in Saskatchewan unless the respondent establishes one of thestatutory reasons for refusal to register. [21] Beals at para 61, Britton at paras 27-28 and Double Diamond at paras 79-88 confirm that, once the statutoryrequirements for registration are satisfied, the party opposing registration bears the onus of proving, on a balance of probabilities, one ofthe reasons for refusal to register. Standard of proof [22] In either case, the standard of proof is the civil standard of balance of probabilities.
Jurisdiction of Turkish Courts [23] Subsection 4(
a) of the Act provides that a foreign judgment cannot be enforced in Saskatchewan if the court ofthe state of origin lacked jurisdiction over the judgment debtor or subject-matter. Sections 8-11 of the Act provide criteria for a foreigncourt to have jurisdiction. While not argued, I am satisfied that on these facts the Turkish courts had jurisdiction. [24] The parties to the agreements were Turkish companies and residents. The relevant agreements were made inTurkey under Turkish law. The litigation over the Bank’s claim was commenced and conducted in Turkish courts over several years.
Mr.Arslan participated in the litigation as a party and vigorously defended the Bank’s claim against him, advancing defences which wereunsuccessful. [25] There is no allegation or evidence of fraud or other impropriety in the court proceedings which would be
grounds for refusal under s. 11 of the Act (leaving aside the complaint of breach of natural justice considered below). [ 26 ] Current concerns about the rule of law and judicial independence in Turkey are not new and do not preclude enforcement of Turkish judgments. Muduroglu Ltd. v T.C. Ziraat Bankasi , [1986] QB 1225 (CA), affirmed [1986] 3 All ER 682 (CA) involved the issue of forum for adjudication of a dispute over an indemnity payable on a guarantee. Turkey was at that time under military rule, raising the question of whether there could be a fair trial in Turkey.
The Queen’s Bench justice drew a distinction between military trials and political trials and civil trials, writing at pp. 1237 and 1248: [1986] QB 1225 at 1237 In discussing the evidence, the judge drew a distinction between political trials, and trials before the military courts, and civil trials. He concluded that there was a perfectly satisfactory and mature legal system in Turkey, effective to deal with civil commercial cases, and no evidence of personal risk to the plaintiffs' directors or witnesses or lawyers.
He was satisfied that if the matter went to Turkey the plaintiffs would receive a fair trial of their case. [1986] QB 1225 at 1248 … On the one hand, the court must not adopt any line of reasoning which involves a finding or assumption of impropriety or unfairness on the part of an organ of a friendly foreign state, without solid evidence to support it. On the other hand, the court must not be too unworldly. It must recognise that there are parts of the world where things are badly wrong, and that by virtue of this very fact it may be impossible to obtain direct and complete evidence of the grounds of complaint.
A balance must be struck. Saskatchewan filing requirements [ 27 ] The Bank has satisfied the s. 12 filing requirement for registration. The Turkish judgment was issued within the ten year limit under s. 5. The Turkish judgment is therefore eligible for registration. Reasons for refusal to register [ 28 ] The onus therefore passes to Mr. Arslan to provide reason why the foreign judgment should not be registered.
Section 4 of the Act lists reasons for refusal. [ 29 ] Mr. Arslan advanced three reasons which he says justify refusal to register the foreign judgment: 1) the decision is not final; 2) the amount of judgment debt is not certain; and 3) the judicial process by which the judgment was obtained breached natural justice and procedural fairness. These reasons will be considered in turn below.
Final Decision? [ 30 ] The Act in s. 2 defines “foreign judgment” as “a final decision made in a civil proceeding by a court of a foreign state …”: “foreign judgment” means a final decision made in a civil proceeding by a court of a foreign state, rendered by means of a judgment, order, decree or similar instrument in accordance with the laws of that state, and includes a final decision made by an adjudicative body other than a court if the enforcing court is satisfied that the adjudicative body is the body that determines disputes of the kind in question in that state; [ 31 ] Mr.
Arslan argues that the Turkish judgment is not final because of references in the decision of the Turkish Supreme Court to referral back to the Trial Court, thereby allowing for further proceedings. This argument was only raised at the hearing. [ 32 ] The Turkish Supreme Court judgment, in the final paragraph of text at page 4, dismissed the appeal, approved the judgment of the Turkish Court of Appeal and then directed “that a copy of the case file be sent to the Court of First Instance for proceedings under
Article 372 of the Turkish Civil Procedure Code, and a copy of this judgment be sent to the Regional Court of Justice …”. [ 33 ] First, I do not read the references as inviting continued litigation of the claim. That
interpretation is contrary to the Oztek Opinion which addresses the issue of finality at pages 29, 46-48 and 59-62. While at page 59 he recognizes the possible remedy of retrial after appeal, he states that it “is an extraordinary (totally exceptional) remedy resortable only upon satisfaction of extremely strict certain conditions …”. He concludes at page 62 that a retrial is not available in this case. [ 34 ] Second, the procedure of returning the case file to the Trial Court and providing a copy of the judgment to the court below are similar to the process in Canada.
The Oztek Opinion at page 45 refers to the transmittal of the case file from the Trial Court to the Turkish Court of Appeal, similar to the process in Saskatchewan. [ 35 ] Third,
Article 372 of the Turkish Civil Procedure Code [ Turkish Code ] was not filed by either party and does not appear to be described in the filed materials. So it is entirely speculative to suggest it allows for further litigation. (While I have not considered it for the purpose of this decision, the on-line version of the Turkish Code shows
article 372 to be an innocuous provision titled “Notification of the Supreme Court Decision”.) [ 36 ] Fourth, there is no evidence of further litigation of the claim in the Turkish courts. On the contrary, the Oztek Opinion at p. 62 states there were no further proceedings after the decision of the Turkish Supreme Court. 8. In Arista case, we believe that the Defendants cannot rely upon any one of the causes listed hereinabove for application for retrial. According to the information and documents given to us, the Defendants have not filed a request of “retrial” for any reasons or on any ground as per now.
[ 37 ] An analogy can be drawn from the Double Diamond decision cited above. If an appeal is not taken from a decision of our Saskatchewan Court of Appeal, it is final. There was an application for re-hearing of Double Diamond which was dismissed: 2021 SKCA 152 . The fact that such re-hearings, which are rare, are available does not mean that decisions of the Saskatchewan Court of Appeal are not final.
And if no such application is made, the ability to seek a re-hearing is irrelevant to the question of finality. [ 38 ] From the materials filed, I find that the parties accepted and treated the decision of the Turkish Supreme Court as final. Given that court is the apex court in Turkey, that acceptance is not surprising. [ 39 ] Mr. Arslan also pointed to Sekerbank T.A.S. v Arslan , 2019 SKQB 283 at para 35 [ Sekerbank ] , affirmed on appeal Arslan v Sekerbank T.A.S. , 2020 SKCA 104 , as supporting a finding that the Turkish judgment was not final.
Sekerbank also involved an application to register a foreign judgment, as evidence of the lack of finality in Turkish courts. However, in Sekerbank at para 35 Layh J. expressly declined to make a decision about the finality of that Turkish decision, because of a lack of convincing evidence. [35] Without convincing evidence, I am unprepared to make a “final” decision in Saskatchewan about the finality of a decision over which the Saskatchewan court has no authority.
Fundamentally, the affidavits show a powerfully apparent conflict on a point that is determinative not only of the application to terminate the preservation order, but also of the liability under the guarantees executed in Turkey and perhaps, consequently, of the fraudulent conveyance action in Saskatchewan. I cannot resolve these conflicts without making challenging credibility findings. Courts have consistently cautioned against assessing credibility and deciding which of two conflicting affidavits is true.
Conflicting affidavits on a material point do not allow a court to finally decide an issue, and certainly not to decide such a hugely consequential issue as would result in this instance. [ 40 ] In Sekerbank , both parties had filed affidavits from Turkish lawyers about Turkish law. Those affidavits were contradictory, in particular on the key issue of finality ( see Sekerbank at paras 14 - 34 ).
Layh J. concluded at para. 34 that “These affidavits reveal an incomprehensibly complex judicial system that even legally trained Turkish lawyers cannot describe with unanimity.” [ 41 ] Foreign law is a question of fact which must be proved through a witness expert in the subject foreign law: see Contacare Inc. v CIBA Vision Corporation , 2011 ONSC 4276 at para 22 . Foreign judgments necessarily arise from different legal systems. Unfamiliarity with those systems, on its own, is no bar to registration. [ 42 ] Sekerbank must be read in light of the contradictory evidence before that court.
In this case, there is a single expert report from a highly credentialed Turkish lawyer: see Oztek Affidavit at Exhibit “A” Curriculum Vitae. The report is clear, comprehensive and uncontradicted. It concludes that the decision sought to be registered is a final decision. [ 43 ] Having regard to all of the evidence before me, I am satisfied that the foreign judgment sought to be registered is a final decision as required by the Act . Certain Amount? [ 44 ] Mr. Arslan argues that the amount of judgment debt is not ascertainable, so cannot be registered.
I disagree. [ 45 ] The amount of the claim was argued at trial and on appeal. The decisions from the Turkish courts, which are reproduced and translated in the materials filed as referenced above, state precise amounts, albeit in different currencies.
See: Trial Court decision at pp. 5-6 (Agar Affidavit #2 at Exhibit “B”); Turkish Court of Appeal decision at pp. 9-11 (Agar Affidavit #2 at Exhibit “D”); and Turkish Supreme Court decision at p. 3 (Agar Affidavit #1 at Exbibit “B”). [ 46 ] As the Bank conceded, the exact amount of the judgment will have to be calculated for the final order, should registration be granted. That will involve a few steps: 1) converting amounts stated in the Turkish judgments as USD and TL to Canadian dollars; 2) adding interest where applicable; and 3) adding the various amounts.
That is essentially an accounting exercise and is expressly contemplated by the Act .
Section 13 of the Act provides for conversion of foreign currency to Canadian currency and s. 15 provides for calculation of interest. [ 47 ] Mr. Arslan also argued that some of the documents relied upon referred to his liability as a guarantor as “joint” or “joint and several”, thus creating uncertainty as to his liability. I fail to see how that makes the amount of the judgment debt uncertain. Mr. Arslan’s liability for the Arista debt, as determined by the Turkish courts, is certain.
Whether he has ability to recover amounts he pays the Bank from the other guarantors or judgment debtors does not make the amount of the judgment debt uncertain or remove his personal liability as determined by the Turkish judgments. Natural justice and procedural fairness? [ 48 ] The Act in ss. 4 (
f) and 11 provide that a foreign judgment obtained in violation of the principles of procedural fairness and natural justice cannot be enforced in Saskatchewan. Reasons for refusal 4 A foreign judgment cannot be enforced in Saskatchewan if: … (
f) the judgment was rendered in a proceeding that was conducted contrary to the principles of procedural fairness and natural justice; …
Recognition of foreign judgments 11 The rules in this Part that determine whether a foreign judgment is unenforceable for lack of jurisdiction in the court of the state oforigin over a party or subject-matter, or on account of fraud, public policy or a violation of the principles of procedural fairness andnatural justice, also apply, with any necessary modification, in determining whether a foreign judgment is binding on the parties so as tobe a defence to a claim, or conclusive of an issue, in an action in Saskatchewan. [49] Mr.
Arslan argues that his appeals were denied because of failure to pay exorbitant court fees which effectivelydenied him access to justice. This result was contrary to natural justice and procedural fairness as understood in Canada. If so, then theforeign judgment is unenforceable. [50] Britton at para 30 states the three features of natural justice and procedural fairness as: 1) adequate notice of theclaim; 2) the opportunity to defend; and 3) an opportunity to be heard. Mr. Arslan had and exercised these rights at the trial stage. That isnot disputed. There is also no question that Mr.
Arslan had notice of the appeals by the Bank and defended those appeals. The only issueis whether the dismissal of his appeals by the Turkish Court of Appeal and Turkish Supreme Court for failure to pay court filing feeswas contrary to minimum standards of natural justice and procedural fairness. Access to Justice [51] Access to justice is fundamental to the rule of law as understood in Canada. Court fees imposed by governmentwhich have the practical effect of denying access may infringe upon the core jurisdiction of superior courts, which is protected by s. 96of the Constitution Act, 1867.
Chief Justice McLachlin said as much writing for the majority in Trial Lawyers Association of BritishColumbia v British Columbia (Attorney General), 2014 SCC 59, [2014] 3 SCR 31 [Trial Lawyers]. [30]
Section 96 therefore restricts the legislative competence of provincial legislatures and Parliament ― neither level of government canenact legislation that abolishes the superior courts or removes part of their core or inherent jurisdiction: MacMillan Bloedel [MacMillanBloedel Ltd. v Simpson, [1995] 4 SCR 715], at para. 37; Reference re Remuneration of Judges of the Provincial Court of Prince EdwardIsland, (SCC), [1997] 3 S.C.R. 3 (“Provincial Judges Reference”), at para. 88. [31] It is not suggested that legislating hearing fees that prevent people from accessing the courts would abolish or destroy the existenceof the courts.
The question is rather whether legislating hearing fees that prevent people from accessing the courts infringes on the corejurisdiction of the superior courts. [32] The historic task of the superior courts is to resolve disputes between individuals and decide questions of private and public law.Measures that prevent people from coming to the courts to have those issues resolved are at odds with this basic judicial function.
Theresolution of these disputes and resulting determination of issues of private and public law, viewed in the institutional context of theCanadian justice system, are central to what the superior courts do. Indeed, it is their very book of business. To prevent this businessbeing done strikes at the core of the jurisdiction of the superior courts protected by s. 96 of the Constitution Act, 1867.
As a result,hearing fees that deny people access to the courts infringe the core jurisdiction of the superior courts. . . . [35] Here, the legislation at issue bars access to the superior courts in yet another way ― by imposing hearing fees that prevent someindividuals from having their private and public law disputes resolved by the courts of superior jurisdiction ― the hallmark of whatsuperior courts exist to do.
As in MacMillan Bloedel, a segment of society is effectively denied the ability to bring their matter before thesuperior court. [36] It follows that the province’s power to impose hearing fees cannot deny people the right to have their disputes resolved in thesuperior courts. To do so would be to impermissibly impinge on s. 96 of the Constitution Act, 1867.
Rather, the province’s powers unders. 92(14) must be exercised in a manner that is consistent with the right of individuals to bring their cases to the superior courts and havethem resolved there. [37] This is consistent with the approach adopted by Major J. in Imperial Tobacco [British Columbia v Imperial Tobacco Canada Ltd.,2005 SCC 49, [2005] 2 SCR 473]. The legislation here at issue ― the imposition of hearing fees ― must conform not only to the expressterms of the Constitution, but to the “requirements . . . that flow by necessary implication from those terms” (para. 66).
The right ofCanadians to access the superior courts flows by necessary implication from the express terms of s. 96 of the Constitution Act, 1867 aswe have seen. It follows that the province does not have the power under s. 92(14) to enact legislation that prevents people fromaccessing the courts. [38] While this suffices to resolve the fundamental issue of principle in this appeal, the connection between s. 96 and access to justice isfurther supported by considerations relating to the rule of law. This Court affirmed that access to the courts is essential to the rule of lawin B.C.G.E.U. v.
British Columbia (Attorney General), (SCC), [1988] 2 S.C.R. 214. As Dickson C.J. put it, “[t]herecannot be a rule of law without access, otherwise the rule of law is replaced by a rule of men and women who decide who shall and whoshall not have access to justice” (p. 230). The Court adopted, at p. 230, the B.C. Court of Appeal’s statement of the law ((1985), (BC CA), 20 D.L.R. (4th) 399, at p. 406): . . . access to the courts is under the rule of law one of the foundational pillars protecting the rights and freedoms of our citizens. . . .
Anyaction that interferes with such access by any person or groups of persons will rally the court’s powers to ensure the citizen of his or herday in court. Here, the action causing interference happens to be picketing. As we have already indicated, interference from whateversource falls into the same category. [Emphasis added.] As stated more recently in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, per Karakatsanis J., “without an accessible public forumfor the adjudication of disputes, the rule of law is threatened and the development of the common law undermined” (para. 26).
[39] The s. 96 judicial function and the rule of law are inextricably intertwined. As Lamer C.J. stated in MacMillan Bloedel , “[i]n the constitutional arrangements passed on to us by the British and recognized by the
preamble to the Constitution Act, 1867 , the provincial superior courts are the foundation of the rule of law itself” (para. 37). The very rationale for the provision is said to be “the maintenance of the rule of law through the protection of the judicial role”: Provincial Judges Reference , at para. 88 . As access to justice is fundamental to the rule of law, and the rule of law is fostered by the continued existence of the s. 96 courts, it is only natural that s. 96 provide some degree of constitutional protection for access to justice. [Emphasis in original] [ 52 ] Trial Lawyers was cited in Taylor v St.
Denis, 2015 SKCA 1 at paras 41-43 , 451 Sask R 187 [ Taylor ] , in dismissing Saskatchewan’s application for security for costs and Mr. Taylor’s application to waive the cost of transcripts for his civil appeal, estimated at $20,500. [ 53 ] It is important to note that Trial Lawyers and Taylor involved citizens challenging decisions of their government, which was a significant reason for the decision in Trial Lawyers (see para. 40 ). That aspect is not present in this foreign judgment, which decided a civil dispute between private parties. [ 54 ] In his brief dated April 4, 2023 at para. 27, Mr.
Arslan cited South Pacific Import, Inc. v Ho , 2009 BCCA 163 , 53 CBR (5th) 169 [ Ho CA ] for the proposition that “a fair process includes proper notice, an opportunity to respond and full appellate review .” (emphasis in original) I do not read Ho CA as going that far. [ 55 ] Ho CA dismissed an appeal against a decision of Blair J. dismissing an application to set aside registration of a foreign judgment: South Pacific Imports, Inc. v Ho , 2007 BCSC 211 [ Ho SC ] and 2007 BCSC 213 .
Ho CA at paras 37 and 40 referred to Ho SC at paras 29 and 36 where Blair J. stated that the California trial decision registered as a foreign judgment was reviewed on appeal in the California appeal court. Ho CA made the same observation at para. 55. I read those comments as recognizing the opportunity for appellate review as a factor to be considered in deciding whether there was a breach of natural justice. But not that “full appellate review” is a requirement for enforcement. [ 56 ] The argument about the appeal filing fees relates both to the amount of the fee and the deadline for payment.
I will deal with each of these complaints. But first I will address the nature of the appeal court filing fees. Standard requirement [ 57 ] There is no suggestion that Mr. Arslan was singled out for payment of these court filing fees. On the contrary, Mr. Arslan in his affidavit at para. 9 states that the appeal filing fees are a standard feature of Turkish law under
Article 344 of the Turkish Code . The Bank pre-paid similar filing fees for its appeals (Agar Affidavit #2 at Exhibit “D” Trial Court decision at p. 7) [ 58 ] In Turkey, as in Canada, court filing fees are payable upon filing. Failure to pay may result in the appeal not being filed or struck. This scheme is not contrary to natural justice or procedural fairness, also referred to as fundamental justice. Purpose of court fees [ 59 ] From my review of the materials, I conclude that the appeal filing fees in question serve in significant part as security for costs. Mr.
Arslan, in his brief of law at para. 26, described “dismissal of the appeal due to their failure to deposit the Appeal Costs” and in para. 30 likened
Article 344 of the Turkish Code “to a security for costs application in Canada.” [ 60 ] In Saskatchewan, The Queen’s Bench Rules in Rule 4-22 and The Court of Appeal Rules in Rule 53 provide for security for costs, but only on application. The purpose of security of costs is generally to ensure that court award of costs are paid. While Canadian courts generally award only partial cost recovery, some jurisdictions allow full cost recovery. [ 61 ] These differences in approach are legitimate policy choices and are not on their own contrary to fundamental justice.
Ability to pay [ 62 ] The significant difference here is the amount of the filing fee. This raises the question of ability to pay. [ 63 ] The Queen’s Bench Rules , Rule 4-24 states factors to consider on an application for security for costs, including “(
b) the ability of the respondent to the application to pay the costs award” and “(
d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the action”. These factors are intended to ensure that security for costs not create an undue barrier to access to justice, contrary to the Canadian concept of fundamental justice. [ 64 ] The appeal fees charged by the Turkish Court of Appeal and Turkish Supreme Court do seem exorbitant and likely to deter appeals. Mr.
Arslan in his affidavit at para. 10 states that the appeal fee to the Turkish Court of Appeal was 3,111,613.12 TL, equivalent to over $1 million Canadian, and at para. 17 that the appeal fee to the Turkish Supreme Court was the equivalent of $692,348.74 Canadian. [ 65 ] But the litigation costs awarded were also substantial. (Sanal Affidavit #1 at para. 21(c) – 2,206,019.88 TL described as Arista Litigation Costs).
So there would seem to be a relationship between the amount required as security for costs and the potential and ultimate cost award. [ 66 ] Further, the Turkish Code provides protection against loss of access to justice through provision for relief from payment of court filing fees. Mr. Arslan applied for such relief at both stages of appeal, but was denied based upon the court’s finding that he was solvent. (Arslan Affidavit at paras. 10-12, 15 and Exhibit “A” and Agar Affidavit #2 at Exhibit “D” Turkish Court of Appeal
decision at p. 7 – “the appeal filed by the Attorney for Defendants against the decision of refusal of its appeal application is baseless and non-acceptable.”) [ 67 ] On Mr. Arslan’s own evidence, he was “solvent” after the Trial Court decision, so was presumably a man of considerable means. (Arslan Affidavit at para. 18) Mr. Arslan in his brief of law at para. 36 states “the Turkish Defendants were not necessarily impecunious …”, a reminder that Mr. Arslan was not solely liable for the appeal filing fees.
The appeal filing fee payment could be shared amongst the several defendants. [ 68 ] While it is not the role of this Court on an application to register a foreign judgment to look behind the foreign judgment and re-consider the merits, these facts support the decision of the Turkish Court of Appeal to deny waiver of the appeal filing fees based on its determination of ability to pay. Payment deadline [ 69 ] Mr.
Arslan, in his affidavit at para. 18, agreed that he “was solvent at the time the appeal petitions were filed to the Regional Court and the Turkish Supreme Court.”, but says he was unable to pay the fees before the deadline. [ 70 ] An unreasonable deadline could prevent payment simply due to cash-flow or difficulty accessing available funds on short notice. But I do not accept that the claimed one-week deadline was the problem in this case. [ 71 ] First, Mr. Arslan was a sophisticated party, no stranger to the courts and represented by Turkish lawyers.
So the required payment of appeal filing fees should have come as no surprise. [ 72 ] Second, while Mr. Arslan’s claim of a one-week deadline is the truth, it is by no means the whole truth. There were extensions to that deadline. [ 73 ] The Oztek Opinion at pp. 45 and 48 explain that filing fees are payable upon filing of the appeal and that, if not paid, there is a one-week extension. (Arslan Affidavit at Exhibits “B” and “C”) That appears to be the one-week deadline to which Mr.
Arslan referred. [ 74 ] But while the initial deadline may have been short, that ignores the ability to and fact of his application for relief from payment and appeals of denial of that application. While ultimately unsuccessful, the application and appeals extended the time for payment. (Oztek Opinion at pp. 50-51 and 55; and Arslan Affidavit at Exhibit “A” p. 2) [ 75 ] As set out above in the chronology of events, Mr. Arslan filed his notice of appeal against the Trial Court decision on November 17, 2017. There then ensured a series of court decisions about the appeal filing fees resulting from Mr.
Arslan’s application and appeals. These ended with the Turkish Court of Appeal letter of February 6, 2020 requesting payment within one week. So, in fact, Mr. Arslan had over two years to make payment. [ 76 ] The ability to seek relief against the standard court fees is relevant to assessing the claim of denial of access to justice. Again, an analogy can be drawn to Saskatchewan where legal costs may deter prospective litigants and impede access to justice. Legal Aid is available in Saskatchewan, but is restricted both by income and range of services.
Saskatchewan litigants can also apply for relief against our court fees, but such relief is also subject to a financial means test. Turkish Courts inherent jurisdiction to consider fairness [ 77 ] While the failure to pay court filing fees meant that Mr. Arslan’s grounds of appeal would not be considered on the merits, he did have and exercised his right to contest the Bank’s appeal.
Further, the Oztek Opinion at pp. 54-55 explains that Turkish appeal courts retain jurisdiction to consider issues of fairness on appeal, regardless of whether that ground is pled. (Agar Affidavit #1 at Exhibit “C” at pp. 54-55) This jurisdiction is relevant to the question of whether the foreign judgment was obtained in breach of natural justice and procedural fairness. Conclusion [ 78 ] Mr. Arslan exercised his full rights as a party at trial. The Trial Court decision was decided on the merits after consideration of the defences. While Mr.
Arslan’s appeals were dismissed by the Turkish Court of Appeal and Turkish Supreme Court for failure to pay court fees, that only occurred after he exercised his rights to apply for relief, which considered his ability to pay. (Oztek Opinion at p. 51) [ 79 ] On the evidence before me, I find that Mr. Arslan has failed to establish that there was a breach of fundamental justice to justify refusal to register the Turkish judgment. Decision [ 80 ] The Bank has met the filing requirements for registration. Having regard to all of the circumstances and the law reviewed above, I find that Mr.
Arslan has not met the onus of establishing reason for refusal of registration of the Turkish judgment. The Bank’s application is therefore granted. Costs [ 81 ] The Bank is awarded costs on column 3 of the Tarriff of Costs. Order [ 82 ] The parties may file a consent order after calculating the amount of the judgment debt. If they are unable to
agree, then either party may contact the Local Registrar to arrange a date for appearance before me. J. D.N. ROBERTSON
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