The Perils of Ignoring a Foreign Lawsuit

Written on November 1, 2013.

A recent decision from New Brunswick highlights the perils of a defendant ignoring a lawsuit brought in a foreign jurisdiction. In the case of Ward v. Nackawic Mechanical Ltd., 2013 NBQB 296 (CanLII),  the plaintiffs obtained an order enforcing an Ohio Court default judgment in the amount of CDN $965,980. The case arose from an incident involving the plaintiff Robert Ward, who fell from an aircraft de-icing vehicle in August 2007 and sustained injuries. The decision gives no indication what Ward was doing in a de-icing vehicle in August.

In any event, the plaintiffs sued, among others, the alleged manufacturer of the de-icing vehicle – a corporation located in New Brunswick. An officer of the manufacturer filed a pro forma answer to the plaintiffs’ complaint in the Ohio Court and participated in pre-trial conferences by telephone. However the manufacturer did not retain counsel in Ohio and did not otherwise defend the plaintiffs’ motion for default judgment. As a result, the plaintiffs obtained default judgment against the manufacturer.

The plaintiffs sought to enforce that judgment in the Court of Queen’s Bench of New Brunswick, where presumably, the manufacturer had assets to satisfy the judgment. New Brunswick recently enacted a law – the Foreign Judgments Act, 2011 to govern circumstances wherein a party seeks to enforce a judgment obtained from a foreign Court. The manufacturer advanced a number of arguments under that statute, as well as jurisidction, public policy and natural justice arguments. The manufacturer brought forward evidence that it had a good defence to the original lawsuit in Ohio, including the fact that it may not have supplied the de-icing vehicle in question. However, the Court rejected all arguments noting that the manufacturer was clearly aware of the Ohio litigation and had an opportunity to respond, but elected not to. As such it entered a judgment of the New Brunswick Court in the amount of CDN $965,980 plus $4,000 for costs.

This cases reflects a trend in Canadian courts to enforce foreign judgments, following the Supreme Court of Canada’s decision in Beals v. Saldanha 2003 SCC 72 (CanLII).