• by Christina Hinds
Originally published in the OFLM 2023-6 edition
Overview
Yan v. Xu (2023 ONSC 1288) is a case that reminds us that the public policy defence to enforce a foreign judgment is extremely narrow. The fact that the Canadian law would have arrived at a different result than a foreign court will not be sufficient for the court to refuse enforcement of a foreign judgment.
Introduction
The recent Superior Court decision of Yan v. Xu dealt with the enforcement of foreign judgments and the narrow defences available once it is determined that the foreign court had jurisdiction.
As held by the Supreme Court of Canada in Pro Swing Inc. v. Elta Golf Inc. (2006 SCC 52), (citing the earlier SCC decision of Beals v. Saldanha – 2003 SCC 72) “absent evidence of fraud or of a violation of natural justice or of public policy, the enforcing court is not interested in the substantive or procedural law of the foreign jurisdiction in which the judgment sought to be enforced domestically was rendered.” (emphasis added)
In Yan v. Xu, both parties commenced separate family law proceedings upon separation. The father commenced proceedings in China (dealing with divorce, child support and property division) and the mother commenced proceedings in Ontario (dealing with decision-making responsibility and parenting time under the Divorce Act).
In 2018, a final order was made in Ontario. The mother thereafter amended her application to seek child support and spousal support pursuant to the Family Law Act.
In February 2023, Justice Diamond heard the mother’s motion for interim child support and interim spousal support. The father brought a cross-motion seeking summary judgment granting an order recognizing and enforcing the Chinese judgments (thereby precluding the relief sought by the mother under the Family Law Act). The father’s motion for summary judgment was successful and the mother’s motion was dismissed.
After a review of the law applicable to summary judgment motions, Diamond J. set out the test applicable to recognizing and enforcing foreign judgments.
Enforcement of Foreign Judgments
First, the court must determine if the foreign court had jurisdiction. This will typically involve application of the “real and substantial” test developed by the Supreme Court of Canada in Beals v. Saldanha. However, attornment to the foreign court will also result in the foreign court being granted and maintaining jurisdiction (litigating the foreign claim on its merits rather than simply challenging the jurisdiction of the foreign court).
As there was no dispute that the mother had attorned to the Chinese court, Diamond J. moved on to the second stage of the analysis – whether the mother could avail herself to any of the “three essential defences” - extrinsic fraud, a denial of natural justice, and public policy.
Justice Diamond found that there was no evidence of any extrinsic fraud. Regardless, the defence of fraud was not available to the mother as she attorned to the Chinese court.
The defence of the denial of natural justice was also not available to the mother as the Chinese court applied the “minimum standards of fairness” – the mother was served with notice of the proceedings, actively participated, and filed submissions which were acknowledged in the final judgments. The defence of natural justice is concerned with forum and process, not the merits of the foreign proceedings.
The Defence of Public Policy
To invoke the defence of public policy, the foreign law upon which the judgment is based must offend our sense of morality or shock the court’s conscience. The defence of public policy is concerned with “repugnant law” – not “repugnant facts”. It involves impeaching the foreign judgment and condemning the foreign law on which the judgment is based.
Diamond J. provided an example of a successful use of the public policy defence. In Kariminia v. Nasser (2018 BCSC 695), the BC Supreme Court considered an Iranian court order that denied a woman a divorce on the basis that an Islamic divorce was only available to a man, not a woman. The BC Supreme Court held that this was against Canadian public policy and was contrary to section 15 of the Canadian Charter of Rights and Freedoms.
Child Support Lower than the Guideline Amount
In Yan, the Chinese court ordered child support at an amount that was $1,300 below the monthly Guideline amount.
The mother argued that the father had forum shopped to find the “cheapest international child support rates” and that the Chinese judgments should not be enforced as that approach is “so offensive to this court’s moral conscious”.
The mother’s argument was not successful.
Justice Diamond held that the fact that the Chinese court awarded child support less than dictated by the Guidelines “does not offend or shock the conscious” of the court. The Chinese court had jurisdiction to deal with the issue of child support and the principles underlying the Guidelines are “arguably irrelevant” to the foreign court’s decision.
Diamond J. noted the conflicting reasoning in the recent decision of Vyazemskaya v. Safin (2022 ONSC 7311). That case dealt with a Russian judgment which the wife alleged the husband obtained through forum shopping in order to avoid paying spousal support. In that case the wife was not eligible to receive spousal support under Russian law. The court agreed with the wife and held that the husband’s behaviour involved the type of “moral and fundamental values” that inform the public policy defence. Diamond J. stated that the court’s decision in Vyazemskaya v. Safin was based on “admittedly repugnant facts” rather than repugnant law.
Inability to Claim Spousal Support
The Chinese court did not make an order for spousal support as there is no right to claim spousal support within the Chinese family law regime. The mother argued that her inability to claim spousal support “so offends the Canadian sense of morality that the Chinese judgment should not be recognized and enforced in Ontario”.
Diamond J. considered the evidence of the father’s expert who explained that property division is the primary means of providing financial resources to separating spouses. There is no stand-alone concept of spousal support.
In China, property division is a one-time payment, by way of a potential unequal division of marital property if warranted by the circumstances. The Chinese regime considers the roles during the marriage and whether a spouse is unable to meet their basic needs upon separation. However, it is solely a function of the marital property upon separation and not a function of the current or ongoing income of the payor spouse, or maintaining the standard of living enjoyed during the marriage.
As acknowledged by the court, under the Chinese regime, a spouse with little to no income would be “out of luck” if the separating spouses had no property upon separation, even if the other spouse had an extremely high income.
While sympathetic to the mother’s “somewhat dire” financial situation, Diamond J. stated that such facts were “legally irrelevant” in determining whether the defence of public policy applies.
Diamond J. reviewed the British Columbia Supreme Court’s decision in Cao v. Cheng (2020 BCSC 735) – a case “nearly on all fours” with the motions before him. In that case, Justice Forth rejected the public policy defence and found the Chinese judgments to be enforceable, stating that the public policy defence cannot be invoked only because the foreign law is based on different policies or leads to a different outcome than the Canadian law would.
While there is no stand-alone concept of spousal support under the Chinese law, the Chinese regime does divide the financial resources of spouses by way of property division and may result in an unequal division of property.
The Chinese regime considers the ability of spouses to meet their basic needs upon separation and the roles held during the marriage. Justice Diamond found that while this does not amount to spousal support as defined in Canadian law, the law upon which the Chinese judgments were based did not amount to the type of “shock to our moral conscience” sufficient to invoke the public policy defence.
Conclusion
Differences between Canadian law and foreign law will not, in and of itself, be sufficient to invoke the defence of public policy.
It is common for Canadian decisions to arrive at different results than foreign courts. We, for example, apply the Child Support Guidelines and well-established principles of spousal support.
However, just because another court does not mirror our judgments, this will not be sufficient for a court in Canada to refuse enforcement of the foreign judgment in question.
Although some people like to wear t-shirts that say “Toronto vs. Everyone”, in family law, “Canadian Judgements vs. Everyone” will unlikely make the fashion trend.