COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Owen v. Rocketinfo, Inc.,

 

2008 BCCA 502

Date: 2008120

Docket: CA035925

Between:

Murray Owen, an individual

Appellant

(Petitioner)

And

Rocketinfo, Inc., a Delaware corporation

Respondent

(Respondent)


Before:

The Honourable Madam Justice Ryan

The Honourable Mr. Justice Tysoe

The Honourable Mr. Justice Groberman

 

R. D. Bajer

Counsel for the Appellant

M. A. Thomas

Counsel for the Respondent

Place and Date of Hearing:

Vancouver, British Columbia

November 14, 2008

Place and Date of Judgment:

Vancouver, British Columbia

December 5, 2008

 

Written Reasons by:

The Honourable Mr. Justice Tysoe

Concurred in by:

The Honourable Madam Justice Ryan

The Honourable Mr. Justice Groberman

Reasons for Judgment of the Honourable Mr. Justice Tysoe:

Introduction

[1]                The issue raised on this appeal is whether a judgment obtained in Nevada and entered as a sister state judgment in California may be registered in British Columbia under the reciprocal enforcement provisions of Part 2 of the Court Order Enforcement Act, R.S.B.C. 1996, c. 78, when California, but not Nevada, has been declared to be a reciprocating state pursuant to section 37(1) of the Act.

[2]                In May 2005, the appellant and the respondent entered into a consulting agreement under which the appellant agreed to provide his services as the chief operating officer of the respondent.  The term of the agreement was 12 months, but it provided for its termination by either party, upon giving 30 days’ written notice.  The agreement also stated that it was to be governed by the laws of Nevada, and the parties consented and attorned to the jurisdiction of the courts of Nevada.

[3]                On October 25, 2005, the respondent terminated the appellant’s engagement.  In November 2005, the respondent commenced action S056057 against the appellant in the British Columbia Supreme Court alleging breach of contract, fraud, negligence and misrepresentation.  A process server was engaged to serve the writ of summons on the appellant in Idaho, but no affidavit of service has been located and the appellant has deposed that the action has not been served.  No further steps have been taken in the action.

[4]                On October 26, 2006, the appellant commenced an action against the respondent in the District Court of Clark County, Nevada, alleging breach of contract, breach of fiduciary duty, breach of an implied covenant of good faith and fair dealing, misrepresentation, malicious prosecution, negligence, wrongful termination and defamation.  The complaint was served on the respondent’s registered agent in Delaware, but it appears that the complaint did not come to the attention of any of the directors or officers of the respondent until mid-2007.

[5]                On January 17, 2007, the appellant was granted a default judgment against the respondent by the Nevada District Court.  It was in the amount of $46,419.78, comprised of $39,096.13 general damages, $3,440.31 prejudgment interest, $3,500.00 attorney’s fees and $383.34 disbursements.

[6]                On June 19, 2007, the judgment from the Nevada District Court was entered as a sister state judgment in the Superior Court of California, County of Orange (the judgment was reissued on October 16, 2007 because the original was lost in the mail).  Under the California Code of Civil Procedure, a judgment of a court of any state of the United States is entitled to be entered as a sister state judgment in a California superior court (subject to being subsequently vacated on grounds set out in the Code).  The appellant has deposed that the purpose of entering the Nevada judgment in California was two-fold: “to enable the Nevada Judgment to be enforced against any of [the respondent’s] assets in California, of which no action to date has been taken, and to assist in having the judgment ultimately entered in British Columbia, which is a reciprocating jurisdiction to California.”

[7]                In January 2008, the appellant commenced proceeding S080257 in the British Columbia Supreme Court seeking registration of the California judgment in the British Columbia Supreme Court.  The petition came on for hearing on March 14, 2008.  The chambers judge dismissed the petition, agreeing with both of the arguments put forward by the respondent (which were repeated on this appeal).  In reasons for judgment, 2008 BCSC 607, 293 D.L.R. (4th) 509, the chambers judge held that the registration of the judgment in British Columbia could defeat the intention of the Court Order Enforcement Act and that the use of the words “original court” in Rule 54 of the Rules of Court meant that the appellant was not able to satisfy the requirements of Rule 54 because the original court was Nevada, a non-reciprocating jurisdiction.  I agree with the conclusion of the chambers judge, but my reasoning is somewhat different from the submissions made by the respondent and accepted by the chambers judge.

Discussion

[8]                The appellant relies on the decision in Hickman v. Kaiser (1996), 28 B.C.L.R. (3d) 195 (S.C.), as authority for the proposition that a judgment that has been registered in a reciprocating jurisdiction may be registered under Part 2 of the Court Order Enforcement Act.  In that case, a judgment had been obtained in Texas (a non-reciprocating state), registered in Idaho (a reciprocating state) and then registered in British Columbia.  However, the issue in the decision related to the setting aside of a Mareva injunction and there was no judicial determination as to the validity of the registration in British Columbia.  The decision is not a considered  authority on the point capable of providing assistance to this Court.

[9]                In my opinion, the issue at hand is resolved by the interpretation of Part 2 of the Act.  For ease of reference, I attach Part 2 (including Schedule 2 thereto, referred to in section 29(4)) as an appendix to these reasons.

[10]            Both parties point to the decision in Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, for an articulation of the principle governing the interpretation of statutes:

26        In Elmer Driedger’s definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983):

            Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

Driedger’s modern approach has been repeatedly cited by this Court as the preferred approach to statutory interpretation across a wide range of interpretive settings.…  I note as well that, in the federal legislative context, this Court’s preferred approach is buttressed by s. 12 of the Interpretation Act, R.S.C. 1985, c. I-21, which provides that every enactment “is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects”.

Section 8 of the Interpretation Act, R.S.B.C. 1996, c. 238, has almost the same wording as section 12 of its federal counterpart.

[11]            California was declared to be a reciprocating state for the purpose of Part 2 pursuant to section 37(1) by Order in Council No. 1378/89, effective September 25, 1989.  The only other states of the United States of America which have been declared to be reciprocating states are Washington, Alaska, Oregon, Colorado and Idaho.

[12]            Two of the purposes of Part 2 are contained in sections 29(1) and 37(1), and in section 39.  Section 39 contains the express purpose of making uniform the law of the provinces that enact provisions equivalent to Part 2, but that purpose is not germane to this matter.  The purpose apparent from sections 29(1) and 37(1) is that registration of a judgment of a court of another jurisdiction will be permitted in British Columbia only if the Lieutenant Governor in Council is satisfied that reciprocal provisions will be made by the other jurisdiction for the enforcement of judgments given in British Columbia.  With this purpose in mind, I now turn to the interpretation of the words used in Part 2.

[13]            Section 29 provides for the registration of a judgment in the British Columbia Supreme Court if it “has been given in a court in a reciprocating state”.  The definition of the word “judgment” in section 28(1) is “a judgment or order of a court in a civil proceeding if money is made payable ....”  In my opinion, it is the Nevada judgment that made money payable by the respondent to the appellant.  The California judgment did not make money payable but, rather, it made the Nevada judgment enforceable in California.  This effect of the entry of the Nevada judgment is expressed in section 1710.35 of the California Code of Civil Procedure:

Except as otherwise provided in this chapter, a judgment entered pursuant to this chapter shall have the same effect as an original money judgment of the court and may be enforced or satisfied in like manner.

Although an entered sister state judgment is to have the same effect as an original money judgment and may be enforced like one, it is not an original money judgment and is not the judgment by which the money became payable.

[14]            As a result, the California judgment is not a “judgment” within the meaning of the definition contained in section 28, and the appellant is not entitled to have it registered under Part 2.  This interpretation is reinforced by several other provisions of Part 2.  Before referring to those other provisions, it is useful to first consider the meaning of the words “original court”. 

[15]            The definition in section 28 is:  “‘original court’ in relation to a judgment means the court that gave the judgment”.  In the face of this definition, I do not think anything can be taken from the word “original”.  In my opinion, it is meant to convey nothing more than it is the court that gave the judgment that its holder is now seeking to register in the British Columbia Supreme Court.  The term “original court” is used in contradistinction to the term “registering court” which is defined “in relation to a judgment” to mean “the court in which the judgment is registered under this Part”.  It does not resolve the question of whether the judgment sought to be registered is a “judgment” within the meaning of the definition contained in section 28.

[16]            This interpretation of the term “original court” is consistent with the decision in Girsberger v. Kresz, [1999] 7 W.W.R. 761, 135 Man. R. (2d) 34 (Q.B.).  In that case, the applicant obtained a judgment in Illinois, sued on that judgment in Ontario and obtained a judgment in Ontario.  The applicant registered the Ontario judgment in Manitoba under the Reciprocal Enforcement of Judgments Act, R.S.M. 1987, c. J20, which corresponds to Part 2 of the Court Order Enforcement Act.  In refusing to set aside the registration of the Ontario judgment in Manitoba, Jewers J. stated, at paragraph 21, that the “original court” would not be the Illinois court “because it is the Ontario judgment and not the Illinois judgment which is sought to be registered”.

[17]            However, the existence of the term “original court” is important in considering the other provisions of Part 2 and, in particular, in deciding whether the California judgment qualifies as a “judgment” that can be registered under Part 2.  It is important because “original court” means the court that gave the “judgment”, and the issue is whether the type of judgment given by the California court is the type of judgment contemplated by Part  2 to have been given by the original court.

[18]            In my view, there are several other provisions of Part 2 that reinforce the conclusion that the term “judgment” does not include a judgment registered or entered on the basis of a judgment granted by a court of another jurisdiction pursuant to legislation for the reciprocal enforcement of judgments or the full faith and credit doctrine.

[19]            The first of these provisions is contained in subsections (3) and (4) of section 29, which specify that, where subsection (2) applies (an application for an order for registration without notice to any person, including the judgment debtor), a certificate in the form set out in Schedule 2, issued from the original court, must accompany an application to register a judgment in British Columbia.  Paragraph 1 of Schedule 2 refers to a writ of summons or statement of claim.  This is a reference to an originating process, such as the complaint issued by the Nevada court and served on the respondent.  There was no originating process in California, where the judgment was entered upon the filing of a sworn statement containing information about the sister state judgment.  The two options for paragraph 2 of Schedule 2 depend on whether a defence was entered.  There was an opportunity for a defence to have been entered in the Nevada action, but not in the California process. 

[20]            The remainder of these provisions are contained in subsection (6), which sets out the circumstances in which a judgment cannot be registered in British Columbia.  Three of these circumstances relate to the kind of action commenced in Nevada, but not to the California process.  Subparagraph (a)(ii) refers to the original court having acted without authority “to adjudicate concerning the cause of action or subject matter that resulted in the judgment”.  Such a phrase is inapplicable to the California process because it did not involve the possibility of adjudicating upon the causes of action asserted by the appellant against the respondent.  Paragraph (c) includes the wording “the judgment debtor … was not duly served with the process of the original court and did not appear”.  There was no originating process in California, and the respondent was not required to be further served before the entry of the California judgment.  Paragraph (g) is perhaps the most important of these provisions under section 29(6).  It provides that the judgment cannot be registered in British Columbia if “the judgment debtor would have a good defence if an action were brought on the judgment”.  It would be possible to bring an action on the Nevada judgment, but not on the California judgment (which is nothing more than entry of the Nevada judgment).

[21]            My interpretation of the term “judgment” is consistent with the purpose of the legislation as contained in sections 29(1) and 37(1).  To allow the appellant’s judgment to be registered in British Columbia would have the effect of permitting the registration of a judgment granted by a court of a non-reciprocating jurisdiction, contrary to the intent of sections 29(1) and 37(1).  In my view, the Legislature did not intend to provide for registration in British Columbia of a judgment granted by a court of another jurisdiction by an indirect method when it is not permitted to be done directly.  Otherwise, when the Lieutenant Governor in Council declared a state to be a reciprocating state, it would have the effect of declaring all of the jurisdictions that are reciprocal to that jurisdiction to also be states reciprocal to British Columbia for the purpose of registering judgments.  In the case of declaring California to be a reciprocating state, the Lieutenant Governor in Council would effectively be declaring all other states of the United States of America to be reciprocating states because California permits the entry of sister state judgments issued by a court of any of the states of the United States.

[22]            It is interesting to note that in 2003 the Uniform Law Conference of Canada, which promotes uniform statutes for the purpose of harmonizing the laws of the provinces and territories of Canada, adopted and recommended for enactment the Uniform Enforcement of Foreign Judgments Act (which, to date, has been implemented in Saskatchewan as S.S. 2005, c. E-9.121).  The Uniform Act contains an express provision to the effect that it does not apply to foreign judgments that recognize the judgment of another foreign state (section 3).  The only commentary by the Conference on the provision is that the proposed Act “applies only to original foreign judgments and not to judgments recognizing a foreign judgment”.

Conclusion

[23]            I would dismiss the appeal.

“The Honourable Mr. Justice Tysoe”

I agree:

“The Honourable Madam Justice Ryan”

I agree:

“The Honourable Mr. Justice Groberman”

APPENDIX

Part 2 of the Court Order Enforcement Act, R.S.B.C. 1996, c. 78

PART 2 – RECIPROCAL ENFORCEMENT OF COURT ORDERS

Definitions and interpretation for Part

28 (1)   In this Part:

"judgment" means a judgment or order of a court in a civil proceeding if money is made payable and includes an award in an arbitration proceeding if the award, under the law in force in the state where it was made, has become enforceable in the same manner as a judgment given by a court in that state, but does not include an order for the periodical payment of money as alimony or as maintenance for a spouse or former spouse or reputed spouse or a child or any other dependant of the person against whom the order was made;

"judgment creditor" means the person who obtained the judgment, and includes the person's executors, administrators, successors and assigns;

"judgment debtor" means the person against whom the judgment was given, and includes any person against whom the judgment is enforceable in the state in which it was given;

"original court" in relation to a judgment means the court that gave the judgment;

"registering court", in relation to a judgment, means the court in which the judgment is registered under this Part.

  (2)      All references in this Part to personal service mean actual delivery of the process, notice or other document to be served, to the person to be served with it personally, and service must not be held not to be personal service merely because the service is effected outside the state of the original court.

Application for registration of judgment

29 (1)   If a judgment has been given in a court in a reciprocating state, the judgment creditor may apply to have the judgment registered in the Supreme Court unless

(a)        the time for enforcement has expired in the reciprocating state, or

(b)        10 years have expired after the date the judgment became enforceable in the reciprocating state.

(1.1)     On application under subsection (1), the Supreme Court may order that the judgment be registered.

  (2)      An order for registration under this Part may be made without notice to any person in any case in which

(a)        the judgment debtor

(i)         was personally served with process in the original action, or

(ii)        although not personally served, appeared or defended, or attorned or otherwise submitted to the jurisdiction of the original court, and

(b)        under the law in force in the state where the judgment was made,

(i)         the time in which an appeal may be made against the judgment has expired and no appeal is pending, or

(ii)        an appeal has been made and has been disposed of.

  (3)      In a case to which subsection (2) applies, the application must be accompanied by a certificate issued from the original court and under its seal and signed by a judge or the clerk of that court.

  (4)      The certificate must be in the form set out in Schedule 2, or to the same effect, and must set out the particulars as to the matters mentioned in it.

  (5)      In a case to which subsection (2) does not apply, notice of the application for the order as is required by the rules or as the judge considers sufficient must be given to the judgment debtor.

  (6)      An order for registration must not be made if the court to which the application for registration is made is satisfied that

(a)        the original court acted either

(i)         without jurisdiction under the conflict of laws rules of the court to which application is made, or

(ii)        without authority, under the law in force in the state where the judgment was made, to adjudicate concerning the cause of action or subject matter that resulted in the judgment or concerning the person of the judgment debtor,

(b)        the judgment debtor, being a person who was neither carrying on business nor ordinarily resident in the state of the original court, did not voluntarily appear or otherwise submit during the proceedings to the jurisdiction of that court,

(c)        the judgment debtor, being the defendant in the proceedings, was not duly served with the process of the original court and did not appear, even though he or she was ordinarily resident or was carrying on business in the state of that court or had agreed to submit to the jurisdiction of that court,

(d)        the judgment was obtained by fraud,

(e)        an appeal is pending or the time in which an appeal may be taken has not expired,

(f)         the judgment was for a cause of action that for reasons of public policy or for some similar reason would not have been entertained by the registering court, or

(g)        the judgment debtor would have a good defence if an action were brought on the judgment.

  (7)      Registration may be effected by filing the order and an exemplification or certified copy of the judgment with the registrar of the court in which the order was made, and the judgment must be entered as a judgment of that court.

  (8)      If a judgment provides for the payment of money and also contains provisions for other matters, the judgment may only be registered under this Part for the payment of money.

Jurisdiction to issue certificate 

30        If the original court is a court in British Columbia, that court has jurisdiction to issue a certificate for registration of a judgment in a reciprocating state. 

Application of Foreign Money Claims Act 

31        If a judgment sought to be registered under this Act makes payable a sum of money expressed in a currency other than the currency of Canada,

(a)        the Foreign Money Claims Act applies to ascertain the amount of Canadian currency payable under it,

(b)        the registering court must certify the amount payable under the judgment, in accordance with paragraph (a), on its registration, and

(c)        on its registration, the judgment is deemed to be a judgment for the amount so certified. 

If judgment is in language other than English 

32 (1)   If a judgment sought to be registered under this Part is in a language other than the English language, the judgment or the exemplification or certified copy of it, as the case may be, must have attached to it for this Part a translation in the English language approved by the court.

  (2)      On approval being given under subsection (1), the judgment is deemed to be in the English language.

Effect of registration 

33        If a judgment is registered under this Part,

(a)        the judgment, from the date of the registration, is of the same effect as if it had been a judgment given originally in the registering court on the date of the registration, and proceedings may be taken on it accordingly, except that if the registration is made under an order made without notice to any person, a sale or other disposition of any property of the judgment debtor must not be made under the judgment before the expiration of one month after the judgment debtor has had notice of the registration or a further period as the registering court may order,

(b)        the registering court has the same control and jurisdiction over the judgment as it has over judgments given by itself, and

(c)        the reasonable costs of and incidental to the registration of the judgment, including the costs of obtaining an exemplification or certified copy from the original court and of the application for registration, are recoverable in the same manner as if they were sums payable under the judgment if the costs are taxed by the proper officer of the registering court and the officer's certificate is endorsed on the order for registration.

Order sought by one party only

34 (1)   If a judgment is registered under an order made without notice to any person

(a)        within one month after the registration or within a further period as the registering court may at any time order, notice of the registration must be served on the judgment debtor in the same manner as a writ of summons is required to be served, and

(b)        the judgment debtor, within one month after he or she has had notice of the registration, may apply to the registering court to have the registration set aside.

  (2)      On an application under subsection (1) (b), the court may set aside the registration on any of the grounds referred to in section 29 (6) and on terms the court thinks fit.

Rules of Court

35        Rules of Court may be made for practice and procedure, including costs, in proceedings under this Part and, until rules are made under this section, the rules of the registering court, including rules as to costs, apply with the necessary changes. 

Exercise of powers

36        Subject to the Rules of Court, any of the powers conferred by this Part on a court may be exercised by that court. 

Reciprocating jurisdictions

37 (1)   If the Lieutenant Governor in Council is satisfied that reciprocal provisions will be made by a state in or outside Canada for the enforcement of judgments given in British Columbia, the Lieutenant Governor in Council may by order declare that state to be a reciprocating state for this Part.

  (2)      The Lieutenant Governor in Council may revoke an order made under subsection (1), and the state for which the order was made ceases to be a reciprocating state for this Part. 

Saving

38 (1)   Nothing in this Part deprives a judgment creditor of the right to bring action on the judgment, or on the original cause of action,

(a)        after proceedings have been taken under this Part, or

(b)        instead of proceedings under this Part.

  (2)      The taking of proceedings under this Part, whether or not the judgment is registered, does not deprive a judgment creditor of the right to bring action on the judgment or on the original cause of action.

General purpose

39        This Part must be interpreted so as to effect its general purpose of making uniform the law of the provinces that enact it. 

SCHEDULE 2

[to the Court Order Enforcement Act, R.S.B.C. 1996, c. 78]

CERTIFICATE

Canada:

Province of British Columbia.

It is certified that, among the records of the court of .................................................., at .........................................., before the Honourable ............................., a justice [judge] of the court, in the Procedure Book there is record of an action, numbered as No. ................., between ............................... (plaintiff(s)) and ................................ (defendant(s)).

1.   The writ of summons [or statement of claim, as the case may be] was issued on ............ [month, day, year], and proof was provided to this court that it was served on the defendant by delivery of a copy of it to the defendant and leaving it with the defendant.

2.   No defence was entered, and the judgment was allowed by [proof, default or order]......................

[Or]

2.   A defence was entered and judgment was allowed at the trial [or as the case may be]......................

3.   Judgment was given on .............. [month, day, year].

4.   Time for appeal has expired and no appeal is pending [or an appeal against the judgment was made and was dismissed by the Court of Appeal and the time for any further appeal has expired and no further appeal is pending, or as the case may be].

5.   Further details if any.

6.   Particulars:

Claim as allowed.................................................................               $ ...............

Costs to judgment...............................................................               $ ...............

Subsequent costs...............................................................                $ ...............

Interest................................................................................                $ ...............

                                                                                                            _________

                                                                                                            $                

Paid on                                                                                                $ ...............

And the balance remaining due on the judgment for debt,
interest and costs is............................................                               ..................

In testimony of which we have fixed the seal of the court .................. at ....................., [month, day, year].

[Seal.]

A Justice [Judge] of the Court of

......................................

Or

Clerk of the Court of .............