March 25, 2020
Author: Curtis Marble
The media has recently reported that corporate insolvencies in 2019 were up 10 percent, and personal insolvencies are up 15%. With this downturn in Alberta, American and other international businesses need to be prepared to rapidly move to enforce judgments against Alberta judgment debtors.
There are a number of factors that foreign parties should be aware of. One of the key factors is whether or not the judgement is potentially covered by the Reciprocal Enforcements of Judgments Act, R.S.A. 2000, c.R-6 (REJA), or whether it will be appropriate to proceed with enforcement pursuant to the common law.
A critical factor to consider is whether enforcement of the foreign judgment is likely to become statute-barred.
Does the Reciprocal Enforcement of Judgments Act Apply to Your Foreign Judgment?
The REJA sets out those jurisdictions from which a judgment can be registered by way of an Order from the Alberta Courts. In particular, Section 2(1) of Act reads as follows:
“When a judgment has been given in a Court in a reciprocating jurisdiction, the judgment creditor may apply to the Court of Queen’s Bench within six years after the date of the judgment to have the judgment registered in the Court, and on the application the Court may order the judgment to be registered accordingly.”
In order for a judgment to be registered in this matter the requirements are relatively simple the judgement must be from a reciprocating jurisdiction and those jurisdictions are listed in the regulations and the judgement must satisfy the requirements at Section 2(2) which are as follows:
“In order for registration under this Act may be made ex parte in any case in which the judgment debtor:
(a) was personally served with process in the original action, or
(b) though not personally served, appeared or defended, or returned or otherwise submitted to the jurisdiction of the original Court,
And in which under the laws of the Country of the original Court the time within which an appeal may be made against the judgment has expired and no appeal is pending or appeal has been made and has been dismissed.”
This process under REJA – if applicable – significantly streamlines the normal common law process for the enforcement of a foreign judgment within Alberta. Unfortunately, judgment creditors may find that they are not from a jurisdiction that is covered under this. Indeed, the only jurisdictions covered outside of Canada are Australia, Washington State, Idaho and Montana.
Accordingly, if one is a judgment creditor not from these states the normal Common Law process for the enforcement of judgments will apply and must be undertaken within the normal 2 year limitation period applicable in Alberta and not pursuant to the 6 year time period for the registrations of judgments that is provided for under REJA.
This may create significant problems in cases where it is ultimately determined – after the 2 year period has run – that an application under REJA was not appropriate.
Limitations Issues of Foreign Judgments Under the Reciprocal Enforcement of Judgments Act
In the case of Laasch v. Turenne, 2009 ABQB 267, for example, a judgment creditor from Montana had secured a large money judgment in Montana. As a money judgment from a reciprocating jurisdiction one may automatically assume that the judgment from that jurisdiction might be automatically enforceable in Alberta. That is not necessarily correct.
There are certain defences set out in that Reciprocal Enforcement of Judgments Act including at Section 2(6)(b) where it is made clear that if a person is not ordinarily resident within the reciprocating jurisdiction, or did not voluntarily submit to the proceedings of that Court, the judgment may not be enforceable against them. Put differently, this means that if one is seeking to enforce a foreign judgment against a debtor that did not voluntarily appear in the foreign Court the Reciprocal Enforcement of Judgments Act may not apply. In Laasch v. Turenne, this resulted in the judgment creditor not being able to enforce their judgment under the Reciprocal Enforcement of Judgments Act. By the time the inapplicability of the Act was determined, it was too late to enforce their judgment using the common law process.
Enforcing Foreign Judgments in Alberta
In the current economic climate, it may be necessary for foreign judgment creditors to move quickly to enforce their judgment in Alberta. REJA provides an efficient mechanism to do this. But, creditors should be cautious. To proceed, a creditor should first determine whether REJA applies, and what counter-arguments the other side may have against its application.
If it is possible that REJA will not apply, then the wise judgment creditor may wish to proceed to enforce their judgment using the common law process instead.
If you need help to navigate the enforcement process, please give us a call.