In Sunlight General Capital LLC v. Effisolar Energy Corporation, 2023 ONCA 133, the Court of Appeal for Ontario affirmed the principle which it had previously established that the limitation period for the recognition and enforcement of a foreign judgment begins to run from the date on which the right of appeal with respect to that judgment expires, and not from the date on which the judgment was issued. Thus, in the circumstances of the particular case, an action on the foreign judgment in issue was brought in time.
Background
On October 18, 2018, the respondent obtained a judgment for approximately US$1.6 million against the appellant from the New York Supreme Court. On May 19, 2019, an appeal to the Appellate Division of the New York Supreme Court was administratively dismissed. The respondent moved to have the judgment recognized and enforced in Ontario on June 14, 2021. The Ontario Superior Court of Justice granted summary judgment in favour of the respondent, holding that the action was brought in time. The motion judge found that the limitation period began to run on May 19, 2019, the date on which the New York appeal was dismissed. The motion judge further held that, although the respondent’s Ontario action was brought outside the basic two-year limitation period under the Limitations Act, 2002, SO 2002, c 24, Sch B, pursuant to regulations enacted under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, O Reg 73/20, which suspended limitations periods for a six month period in light of the pandemic, the respondent’s action was not statute-barred. The motion judge also held that the criteria for the recognition and enforcement of a foreign judgment were otherwise satisfied.
The only issue raised by the appellant was the start date of the limitation period for recognition and enforcement of the New York judgment, the appellant’s position being that the limitation period began to run on October 18, 2018, the date the New York judgment was issued. Interestingly, after hearing oral submissions from the appellant, the Court of Appeal did not call on the respondent and dismissed the appeal with reasons to follow. In those reasons the Court of Appeal applied its previous decision in Independence Plaza 1 Associates L.L.C. v. Figliolini, 2017 ONCA 44 (“Independence Plaza”) as the parties had agreed with the principle enunciated in that case that “the limitation period on the enforcement of a foreign judgment begins to run from the date on which the right of appeal in respect of that judgment expires, the date on which the appeal is decided, or the date on which the appeal is dismissed.” The parties had also agreed that the appellant’s appeal in the New York action was dismissed on May 19, 2019. The appellant sought to resile from its agreement that the principles enunciated in Independence Plaza applied, but the Court of Appeal held that it was not appropriate to permit the appellant to change on appeal the basis on which the motion below was argued.
The appellant had otherwise requested, pursuant to section 13 of the Practice Direction Concerning Civil Appeals, that the appeal be heard by a panel of five judges in order to reconsider Independence Plaza; in particular, its principle that, in the usual case, it will not be legally appropriate to commence a proceeding in Ontario to enforce a foreign judgment “until the time to appeal the judgment in the foreign jurisdiction has expired or all appeal remedies have been exhausted.” That request was refused by the Associate Chief Justice and, in light of that refusal, the Court of Appeal declined to reconsider the holding in Independence Plaza.
The appeal was therefore dismissed, the New York judgment was given full force and effect, and the appellant was ordered to pay the respondent an amount in Canadian currency sufficient to purchase US$2.3 million, being the principal amount of the judgment plus interest.
Comment
The case not only represents an application of the principle of stare decisis, it also highlights the problem that can be encountered in attempting to retract on appeal a position taken at first instance. As for the substantive limitation issue relating to the time when the clock starts ticking for recognition and enforcement of a foreign judgment, that would appear to be well settled: “the limitation period on the enforcement of a foreign judgment begins to run from the date on which the right of appeal in respect of that judgment expires, the date on which the appeal is decided, or the date on which the appeal is dismissed.”
