On March 3, 2022, the Supreme Court of Canada granted leave to appeal from the British Columbia Court of Appeal’s decision in Lanfer v Eilers, 2021 BCCA 241 (Lanfer). The case concerns the recognition and enforcement of foreign judgments at common law and the main issue on appeal to the Supreme Court will be whether prior case law barring the recognition and enforcement of foreign non-money judgments that affect title to land outside the territory of the foreign court remains good law.
The case and decision
In Lanfer, the plaintiffs (appellants) sought recognition and enforcement of a German judgment that concerned land located in British Columbia by requiring the transfer of title to the land between the parties subject to the order. The German courts ordered the defendant (respondent), Ms. Eilers, to transfer title to the land to the plaintiffs. Ms. Eilers refused to do so and dealt with the land in breach of the terms of the German judgment. The chambers judge dismissed the application, holding that the German order was not capable of recognition and enforcement in British Columbia based on the rule in Duke v Andler, [1932] S.C.R. 734 (Duke).
As set out in Duke, it has traditionally been accepted in private international law that a domestic court would not recognize or enforce a foreign judgment that adjudicated on title to immoveable property located in the domestic court’s territorial jurisdiction (the foreign immovable rule). This formed part of the traditional view that only foreign money judgments could be recognized and enforced in Canada.
The British Columbia Court of Appeal considered whether the German order was offside the foreign immovable rule and the proper scope of that rule where the foreign judgment that affects land outside its territory is an in personam judgment akin to an order for specific performance. In other words, the question concerned whether Duke is, or continues to be, binding authority barring the recognition and enforcement of the German judgment in this case because it indirectly affects title to land.
The British Columbia Court of Appeal held that Duke was implicitly overruled by developments in case law, including by the decision of the Supreme Court of Canada in Pro Swing Inc v Elta Golf Inc, 2006 SCC 52 (Pro Swing). In that case, the Supreme Court held that Canadian courts may recognize and enforce foreign non-money judgments provided certain criteria are satisfied. The British Columbia Court of Appeal held that Pro Swing altered the common law principles engaged in the recognition and enforcement of foreign non-money judgments, including foreign in personam orders in the nature of specific performance. In short, the Court of Appeal concluded that Pro Swing has overtaken the salience of the distinction between foreign money and non-money orders, and that the categorical distinction between the enforceability of the different types of orders is no longer good law. Both money and non-money judgments can be recognized and enforced where the appropriate criteria are met. In Lanfer, it was therefore appropriate to enforce the German judgment through a vesting order. The appeal was allowed.
Takeaway
Lanfer is a significant development in the case law surrounding recognition and enforcement of foreign judgments. If upheld by the Supreme Court of Canada, this decision will allow courts to enforce non-money judgments concerning immovables, and would continue to pave the way for more complex foreign non-money judgments to be recognized and enforced in Canadian courts.
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