You're the proud owner of a shiny new judgment issued by a United States court. Now you need to enforce it. Unfortunately, the debtor lives in Canada and appears to think the border offers impenetrable protection from your efforts to collect. Fortunately, Canada offers a variety of ways to enforce your judgment against its residents.
First, however, you will need to domesticate your judgment in Canada. Several options exist. The initial question to ask is “where in Canada does the debtor live?” If the answer is British Columbia, you may find the domestication process relatively easy. For U.S. judgments meeting certain requirements, British Columbia recognizes them in reciprocity through the British Columbia Court Order Enforcement Act, B.C. Rev. Stat. ch. 78 et seq. (“COEA”). The COEA allows you to register your judgment from a reciprocal U.S. state (currently Washington, Alaska, California, Oregon, Colorado, and Idaho) before the judgment expires (or 10 years pass). That registration gives you an order from the British Columbia Supreme Court allowing you to enforce your judgment in Canada.
As with most seemingly easy processes, that’s not the whole story. You will need the following documents to register your judgment: a statutory certificate from the U.S. court issuing the judgment in substantially the form required by the COEA, plus an affidavit containing a certified copy of the judgment and certificate. You will also need declarations containing the following information: a statement that you are entitled to enforce the judgment; a statement that the judgment does not fall unto the COEA’s exceptions to registrations (see below); the debtor’s and creditor’s names, businesses, and usual or last known address(es); service information; and the amount owing on the judgment. B.C. Sup. Ct. R. 19-3(3)(a)-(b). The B.C. Supreme Court Rules and COEA contain additional information and forms required to register the judgment—you will want to review those carefully to make sure you meet all the requirements.
Although the B.C. Court Rule does not require you to notify the debtor of your application for registration, you must provide notice of the registration within one month after the registration. B.C. Sup. Ct. R. 19-3(6).
Under some circumstances, the B.C. court will refuse to register your judgment. Those include problems with the judgment, like the issuing court lacked jurisdiction, you obtained the judgment by fraud, the debtor would possess a “good defense if an action were brought on the judgment,” or that a B.C. court would not issue such a judgment for public policy reasons. COEA, B.C. Rev. Stat. ch. 78, § 29(6)(a)-(g). The B.C. court may also refuse to register your judgment if the debtor (1) did not appear in your lawsuit (and neither conducted business nor resided in your state) or (2) did not appear in your lawsuit and you did not serve him or her with process (and he or she conducted business or resided in your state). Id.
Although this rule appears to prevent registration of default judgments in cases in which the debtor did not appear, a choice of forum provision in a contract may permit you to avoid the jurisdictional problems that the debtor could raise under the rule. For instance, if the debtor contracted with you to submit himself or herself to the jurisdiction of a court in your state, he or she may have “otherwise submit[ted]” to the jurisdiction of that court. See Emanuel v. Symon, 1 K.B. 302 (1908).
If your debtor does not reside in British Columbia, or you cannot register your judgment in B.C., you will need to follow the alternate procedure for enforcing U.S. judgments in Canada. Canadian courts do not automatically enforce judgments entered by U.S. courts. Instead, you must convert a U.S. judgment into a Canadian judgment that is enforceable against a debtor in a particular province.
This conversion process requires retaining Canadian counsel to file an action for the amount of the debt in the province in which the debtor (or his or her assets) resides. Your Canadian counsel will then file a motion for summary judgment based on the U.S. judgment.
In the Canadian action, you must show the Canadian court that the U.S. court possessed jurisdiction to hear the dispute. That requires you to show a “real and substantial connection” between the foreign jurisdiction and the persons, events, and circumstances that led to the foreign judgment. Morguard Investments Ltd v De Savoye, [1990] 3 SCR 1077; Beals v Saldanha, 2003 SCC 72. This test presents a low-bar, fact-specific inquiry: for instance, if you and the debtor signed the disputed contract in the U.S. jurisdiction issuing the judgment, such a connection may exist. Club Resorts Ltd v Van Breda, 2012 SCC 17. Canadian courts will also recognize and enforce default judgments. Beals v Saldanha, [2003] SCC 72.
As with the COEA, you must also show that you properly served the debtor with notice of the underlying lawsuit. Canadian courts do not require compliance with technical service requirements of international treaties or regulations; instead, you must simply provide notice of the lawsuit that comports with “natural justice.” For instance, compliance with Washington State’s Uniform Arbitration Act (UAA) likely would meet this requirement, as it mandates the following notice:
… person gives notice to another person by taking action that is reasonably necessary to inform the other person in ordinary course, whether or not the other person acquires knowledge of the notice. A person has notice if the person has knowledge of the notice or has received notice. A person receives notice when it comes to the person's attention or the notice is delivered at the person's place of residence or place of business, or at another location held out by the person as a place of delivery of such communications.
RCW 7.04A.020
To err on the safe side, you may want to retain a Canadian process server to serve notice on the debtor.
Irrespective of the method you use to obtain an enforceable judgment in Canada, once a Canadian court issues a declaration of enforceability, your judgment becomes enforceable in the same manner as a domestic Canadian judgment. Much like the U.S., Canada permits judgment creditors to garnish wages, obtain a “writ of seizure and sale,” and examine the debtor regarding his or her assets.
