Rainard v Tan, 2023 ABKB 50

Court of King’s Bench of Alberta Citation: Rainard v Tan, 2023 ABKB 50 Date: 20230125 Docket: 2001 14385 Registry: Calgary Between: Alex Rainard Plaintiff - and - Felix Josef Tan Defendant _______________________________________________________ Reasons for Judgment of the Honourable Justice K.D. Nixon _______________________________________________________ Introduction [ 1 ] On December 13, 2021, the Master (now Applications Judge) granted the application of the Plaintiff (“Mr. Rainard”) for

summary judgment to enforce a Swiss judgment for debt against the Defendant (“Mr. Tan”). The Swiss judgment was granted in September 2018 following a trial. [ 2 ] As Switzerland is not a party to the Reciprocal Enforcement of Judgments Act , RSA 2000, c R-6 , Mr. Rainard commenced a separate action in Alberta to enforce the foreign judgment. [ 3 ] Foreign judgments will be enforced in Canada where there is a real and substantial connection to the subject matter of the action or to the defendant, subject to a limitations defence: Beals v Saldanha , 2003 SCC 72 at para 32 [ Beals ].

The main defences to enforcement of a foreign action are fraud, public policy and lack of natural justice: Beals at paras 40-41 . [ 4 ] In his Statement of Defence, Mr. Tan raised the following defences: 1. the action on the Swiss judgment was statute-barred by the limitation period; 2. he was entitled to immunity pursuant to the doctrine of laches; 3. the Swiss judgment was not obtained in accordance with Canadian concepts of natural justice or procedural fairness because the Swiss court: a. accepted the evidence of Mr. Rainard’s former partner and close friend that Mr.

Tan had signed the loan agreement, despite the fact that the loan agreement was in a language he did not understand and despite his evidence he did not sign the loan agreement; b. reversed the burden of proof, requiring him to prove he did not sign the loan agreement;

c. reversed the burden of proof requiring him to prove he did not receive the funds in cash rather than requiring Mr. Rainard to prove he had withdrawn, transferred or delivered funds to Mr. Tan. 4. the Swiss judgment was contrary to the basic tenets of the Canadian justice system and the method and procedures employed by the Swiss court did not accord with common law principles of the laws of Canada and was not in accordance with Canadian principles of natural justice and procedural fairness. Application for

Summary Judgment Before the Applications Judge [ 5 ] The reasons issued by the Swiss court in granting judgment to Mr. Rainard along with an affidavit sworn by Mr. Rainard were before the Applications Judge. In his affidavit, Mr. Rainard deposed that he had entered into a private loan agreement with Mr. Tan whereby he agreed to loan, and did in fact loan, to Mr. Tan CHF 1.55 million. After a trial, at which both he and Mr. Tan were represented by counsel, the court considered his evidence and that of Mr. Tan as well as third-party witnesses and a forensic handwriting expert report.

The Court granted judgment in the amount of CHF 930,000. Judgment for the balance of the CHF 1.55 million was not granted because it had not yet become due. Mr. Tan did not provide any evidence before the Applications Judge. [ 6 ] The Applications Judge found that there was no merit to any of the defences raised by Mr. Tan, and thus there were no genuine issues for trial. She granted

summary judgment to Mr. Rainard. Limitation Period and Laches [ 7 ] While Mr. Rainard filed his claim in Alberta 2 years and 72 days after the Swiss judgment was granted, the Applications Judge found that, because the limitation period was suspended for 75 days by Ministerial Order M.O. 27/2020 (“the Ministerial Order”), the claim was not filed out of time. [ 8 ] With regard to laches, the Applications Judge concluded that there was no delay in pursuing an action on the Swiss judgment to avail Mr. Tan of this defence. The judgment was obtained in 2018. Mr. Rainard commenced his action in Alberta in November 2020 and filed his

summary judgment application in February 2021. Breach of Natural Justice, Procedural Fairness and Public Policy [ 9 ] Mr. Tan argued before the Applications Judge that the Swiss court had reversed the burden of proof, requiring him to prove he had not signed the loan agreement and, further, according to Swiss law, Mr. Rainard was not required to prove that any money had changed hands but rather that he, Mr. Tan, had the onus to prove he had received no money. [ 10 ] Mr. Tan bore the burden of establishing unfairness in the Swiss legal system: Beals at para 61 .

The Applications Judge found that the Swiss Court did not reverse the burden of proof and require Mr. Tan to establish that he did not sign the loan agreement. In its reasons, the Swiss court stated that “the person has to prove the existence of an alleged fact which derives rights from it” and that Mr. Rainard was “required to fully prove his claim.” The Swiss court held that Mr. Tan had raised sufficient concerns about the validity of the loan agreement and its authenticity that Mr. Rainard had to prove both the validity of the agreement and the authenticity of Mr. Tan’s signature. [ 11 ] In finding that Mr.

Tan had signed the loan agreement, the Swiss court concluded that the investigation of a forensic handwriting expert appointed by the court strongly supported that the signature on the loan agreement was genuine and came from Mr. Tan and, further, concluded that the relationship between the witness to Mr. Tan’s signature and Mr. Rainard “does not account for lack of credibility.” [ 12 ] Mr. Tan argued that there was no requirement in Swiss law to prove that the funds were advanced, and it was sufficient to agree that funds are owed.

He submitted that it was, therefore, unfair and contrary to Canadian law to enforce the judgment. The Applications Judge concluded that there was insufficient information before her to assess Mr. Tan’s argument that because he “should have been permitted to argue that the funds were not advanced” the Swiss procedure was unfair. It was unclear to the Applications Judge whether Mr. Tan had raised an argument at trial that the funds were not advanced.

She noted that the Swiss judgment focused on the authenticity of the loan agreement and it was clear that the Swiss court had found that loans had been granted pursuant to the loan agreement. [ 13 ] The Applications Judge noted that Mr. Tan was required to put his best foot forward in response to the application for

summary judgment but had not provided a transcript of the trial proceedings or any expert evidence about Swiss law regarding proof that funds were advanced to establish that the Swiss proceedings were unfair. He had not, therefore, established that this was a genuine issue for trial. [ 14 ] Lastly, the Applications Judge found that Mr. Tan had not provided any evidence to support a public policy defence.

The public policy defence prevents enforcement of a foreign judgment that is contrary to the Canadian concept of justice, meaning the foreign law is contrary to our view of basic morality: Beals at para 71 . [ 15 ] The Applications Judge noted that while Mr. Tan argued that the Swiss judgment was contrary to the basic tenets of the

Canadian justice system and contrary to Canadian public policy, he did not allege bias or corruption and provided no particulars or evidence of how the Swiss procedure would offend Canadian concepts of justice, other than the arguments already referred to. The Applications Judge rejected the argument that the Swiss judgment would shock the conscience of the reasonable Canadian: Beals at para 77 . Appeal [ 16 ] Mr. Tan appeals the Applications Judge’s decision.

He submits that: 1. the Applications Judge was incorrect in her conclusion that the Ministerial Order suspending the limitation period applied to a claim by Mr. Rainard, who is not a resident of Alberta; and 2. evidence filed in this appeal from his Swiss attorney establishes that there is a genuine issue requiring a trial in respect of the defences of breach of natural justice, procedural fairness and public policy on the basis that the Swiss court reversed the burden of proof and placed the onus on him to prove that he did not receive any money from Mr. Rainard.

Standard of Review [ 17 ] The standard of review on an appeal from an Applications Judge is correctness: Jacobs v McElhanney Land Surveys Ltd , 2019 ABCA 220 at para 153 , leave to appeal to SCC refused, 38939 (16 April 2020). [ 18 ] The court may permit new evidence to be filed in support of an appeal from an applications judge’s judgment if the judge hearing the appeal is of the opinion that it is relevant and material: Alberta Rules of Court , AR 124/2010, rule 6.14(3) . Mr. Tan provided an affidavit from the Swiss attorney who represented him in the Swiss trial.

The affidavit provides some additional information about the Swiss legal process, and, to that extent, it is relevant and material. The question is the weight to be given to it. As discussed below, however, it does not provide evidence of a meritorious defence. It does not raise a genuine issue requiring a trial. Analysis Limitation Period [ 19 ] Mr. Tan argued before the Applications Judge that the Ministerial Order suspending the limitation period was intended to apply to actions by Albertans not actions by a foreigner such as Mr.

Rainard, an Estonian, to enforce a foreign judgment. [ 20 ] The Ministerial Order was issued in response to the COVID-19 pandemic. It provides: 1. Limitation periods are suspended in the enactments under Appendix A from March 17, 2020 to June 1, 2020. 2. Any period of time within which any step must be taken in any proceeding or intended proceeding is suspended subject to the discretion of the court, tribunal, or other decision-maker from March 17, 2020 to June 1, 2020. 3. For clarity, the limitation period or period of time resumes running on June 1, 2020 and the temporary suspension period shall not be counted.

The Limitations Act , RSA 2000, c L-12 is listed in Appendix A. [ 21 ] The Applications Judge concluded that Mr. Rainard’s action, which was filed 2 years and 72 days after the Swiss judgment was issued, was filed in time because the limitation period was suspended for 75 days. Given this finding, she did not find it necessary to address Mr. Rainard’s argument that the limitation period did not expire two years after the Swiss judgment was granted but two years after he discovered that Mr. Tan had assets in Alberta. [ 22 ] In this appeal, Mr.

Tan submits that the Applications Judge was incorrect in concluding that the Ministerial Order extending the limitation period by 75 days applied to Mr. Rainard’s action. He submits that the Ministerial Order did not apply to actions filed by non-Albertans. Further, Mr. Tan submits that the Ministerial Order only suspends limitations that otherwise would have expired between March 17, 2020 and June 1, 2020. [ 23 ] I find no error in the Applications Judge’s conclusion that the Ministerial Order suspending the limitation period applied to Mr. Rainard’s action. [ 24 ] Since the Applications Judge granted

summary judgment, our Court of Appeal in O’Chiese First Nation v DLA Piper (Canada) LLP , 2022 ABCA 197 [ O’Chiese ] held that the Ministerial Order suspended the limitation periods of the listed enactments, which include the Limitations Act , effectively extending time limits by 75 days: paras 9, 13.

Further, the Court held that the Ministerial Order was put in place to address the immediate problem of limitation periods continuing to run during a time in which litigants were unable to fully access the courts and, therefore, the Order must be interpreted in a broad and generous manner and any doubts arising from the difficulties of language should be resolved in favour of the claimant: O’Chiese at para 10. [ 25 ] Further, while the

preamble in the Ministerial Order references the State of Public Health Emergency in Alberta because of the COVID-19 pandemic and the fact that social distancing requirements severely restricted the ability of individual Albertans to take steps to preserve their rights, the suspension of the limitation periods is not restricted in application to legal actions by Albertans nor does

it exclude legal actions by non-Albertans. Mr. Tan’s proposed

interpretation of the Ministerial Order is contrary to broad and generous

interpretation mandated by our Court of Appeal in O’Chiese . Breach of Natural Justice, Procedural Unfairness and Public Policy [ 26 ] As noted earlier in these Reasons, the Applications Judge concluded that Mr. Tan had not met his onus to establish that there was merit to the defences of breach of natural justice, procedural unfairness or public policy. The party seeking to impugn a foreign judgment must prove, on the balance of probabilities, that the foreign proceedings were contrary to the Canadian notions of fundamental justice: Beals at para 59 .

The burden of establishing the unfairness of the Swiss justice system rests on Mr. Tan: Beals at para 61 . [ 27 ] Mr. Tan’s argument with respect to the defence of public policy is that Swiss law regarding proof of advancement of funds offends Canadian principles of morality. Specifically, he submits that the Swiss law is morally repugnant because it required that he prove Mr. Rainard did not provide him with CHF 1.55 million in cash rather than requiring Mr. Rainard to prove not only that Mr.

Tan signed the loan agreement acknowledging receipt of CHF 1.55 million in cash but also prove that he had, in fact, provided the cash to Mr. Tan. [ 28 ] In support of his position, Mr. Tan relies on the affidavit of the Swiss attorney who represented him in the Swiss trial. The affidavit is a series of questions from Mr. Tan answered by the attorney. [ 29 ] The affidavit outlines the Swiss debt enforcement process and provides a more fulsome explanation of the Swiss proceedings to that outlined in the Swiss judgment about why the debtor is the plaintiff and the creditor is the defendant.

The affidavit does not, however, support Mr. Tan’s contention that there is a genuine issue requiring trial regarding whether the alleged reversal of the burden of proof that funds were advanced to him provides a public policy defence to the enforcement of the Swiss judgment. [ 30 ] The attorney was asked to “[e]xplain that when debts are alleged there is an automatic presumption that they are true and that the defendant must prove otherwise, i.e., that he or she did not receive the funds.” [ 31 ] The expert responded as follows: The legal situation is not like the question above suggests.

As Alex Rainard’s claim was based on a signed recognition of debt, he was able to obtain a court decision to set aside the opposition Felix Tan had raised.

Even if, in the following court proceedings, Felix Tan denied that he had signed the loan agreement and that he had received the loan totaling CHF 1.55 million, this was not (completely) successful, as an expert had confirmed the authenticity of the signature of Felix Tan on the loan agreement and the loan installments were paid out in cash and without receipts, what seemed confirmed by the witnesses Jenifer Osterwalder und Volodymyr Fedyunin. [ 32 ] As noted earlier in these Reasons, Mr.

Tan did not provide any affidavit evidence before the Applications Judge or in this appeal that he did not receive the loan amount he acknowledged in the loan agreement nor any evidence that he was denied the opportunity in the Swiss court to make that argument. [ 33 ] The Swiss judgment refers to the loan agreement in which Mr. Tan expressly and in writing recognized the receipt of the loan amount of CHF 1.55 million from Mr. Rainard: Considerations at para 2. As noted by the Applications Judge, the Swiss court stated that Mr. Rainard was required to fully prove his claim.

The Swiss court stated that “[t]he creditor is required to fully prove his claim, which appears credible on the basis of debt acknowledgment, for which he bears the full burden of proof…”: Considerations at para 3. The court stated that Mr. Rainard was required to prove the validity of the loan agreement as well as the authenticity of Mr. Tan’s signature. [ 34 ] In its judgment, the Swiss court referred to the evidence of a third-party witness who confirmed that Mr. Rainard had lent considerable sums to Mr. Tan in several installments in the relevant time period and also witnessed Mr. Rainard give cash to Mr.

Tan Considerations at paras 3.5.1, 3.5.2. The Swiss court also referred to and assessed the statements of the parties and assessed the credibility of Mr. Rainard and Mr. Tan: Considerations at para 3.5.3. [ 35 ] In considering the evidence, including the forensic handwriting expert, the court concluded that Mr. Tan had signed the loan agreement and that by signing it he “expressly acknowledged that he had received the loan amount of CHF 1.55 million from [Mr. Rainard] in several installments”: Considerations at para 4.

The court then concluded that “[i]f there is debt acknowledgment, the burden of proof is reversed and the [debtor] must prove that the debt does not exist…”: Considerations at para 4. The court concluded that Mr. Tan had not provided that proof: Considerations at para 4. [ 36 ] Mr. Tan has not met his onus to establish a meritorious defence on the basis of public policy. The public policy defence turns on whether the foreign law is contrary to Canadians’ view of basic morality and justice: Beals at para 71 . According to the Swiss judgment, the court found that Mr. Rainard had proven the debt by virtue of Mr.

Tan’s written acknowledgement of receipt of the loan amount of CHF 1.55 million. Upon Mr. Rainard’s proof that Mr. Tan acknowledged the debt in writing, the onus was on Mr. Tan to prove otherwise. [ 37 ] I see nothing in this application of Swiss law and procedure that offends the Canadian concept justice or would shock the conscience of the reasonable Canadian: Beals at para 77 . Further, Mr.

Tan did not provide the Court with any case law or authorities that indicate it is contrary to the principles of our justice system to have a process whereby a creditor must prove the authenticity of a debt acknowledgement and the debtor must then bring evidence to prove that, despite this authenticity, the debt does not exist. Mr. Tan has not met his onus to establish that Swiss law offends Canadian concepts of justice.

Conclusion [ 38 ] In conclusion, the appeal is dismissed. [ 39 ] If the parties cannot agree on costs of this application within 30 days of this order, they may make written submissions on costs not to exceed 5 pages (excluding authorities). Heard on the 04 th day of January, 2023. Dated at the City of Calgary, Alberta this 25 th day of January, 2023. K.D. Nixon J.C.K.B.A. Appearances: Brad J. Findlater for the Plaintiff E. Jane Butcher for the Defendant