Cortés v. Yorkton Securities Inc.

2007 BCSC 282err1 Cortes v. Yorkton Securities Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Cortés v. Yorkton Securities Inc., 2007 BCSC 282 Date: 20070228 Docket: S001142 Registry: Vancouver Between: José Ricardo Najas Cortés Plaintiff And Yorkton Securities Inc. Defendant Before: The Honourable Mr. Justice Myers Reasons for Judgment Counsel for the Plaintiff: G.J. Tucker S. Stephens Counsel for the Defendants: D. Neave J.L. Oliver Date and Place of Trial: December 6-8, 2006 Vancouver, B.C. I. INTRODUCTION [1] The plaintiff, an Ecuadorian resident, brought this action to enforce a judgment granted in his favour by the Eight Civil Court of Pichincha, Ecuador. The matter is before me on the defendant's Rule 18A motion seeking a dismissal of the action. [2] The parties agree that the defendant did not have actual notice of the Ecuadorian action. That is because the notification (in the form of a letter without the writ or any other documentation enclosed) was mailed to the address of an office in Chile, which had been closed for two years. [3] The defendant argues that an unsuccessful attempt by the plaintiff to enforce the judgment in Illinois renders the issue of the judgment's enforceability here res judicata. In the alternative, it argues that the judgment is unenforceable because it was obtained through fraud perpetrated on the Ecuadorian court, which went to its jurisdiction, and due to a breach of natural

justice. These allegations both arise from lack of actual notice of the proceedings. [4] The plaintiff denies that there was any fraud perpetrated on the Ecuadorian court. It says that service was effected in accordance with Ecuadorian procedure. The plaintiff denies that there was any breach of natural justice and says that, in any event, the defendant must apply to the Ecuadorian court to set aside the judgment before it raises the issue of natural justice here. II. FACTS [5] The defendant, now known as Orion Securities Inc., is an Ontario corporation with offices in Toronto and in Vancouver, amongst other places. One aspect of its business is underwriting. I will refer to it as "Yorkton Canada" or simply "Yorkton", depending on the context. It operated a subsidiary based in Chile, Yorkton Securities (Chile) Ltda. I will refer to this as "Yorkton Chile". The plaintiff is Ecuadorian and resides in that country. [6] The plaintiff and Yorkton Chile entered into a written agreement dated April 1, 1993. By that agreement Yorkton Canada appointed the plaintiff as its representative in Ecuador. The thrust of the business relationship was that the plaintiff would bring mining financing work to Yorkton Chile and Yorkton Canada. [7] The plaintiff was appointed Yorkton Canada's Ecuadorian attorney. The Ecuadorian Law on Companies provides that: "companies negotiating or contracting

obligations in Ecuador are required to have an attorney-in-fact or representative in Ecuador, to answer demands and comply with their corresponding obligations". [8] The agreement was drafted on the letterhead of Yorkton Chile. Yorkton Chile's Santiago address was printed on the masthead. The bottom of the letterhead listed the addresses in Canada and England of Yorkton Canada. [9] In September 1994, Yorkton Chile terminated its relationship with the plaintiff. In April 1995, Yorkton Canada revoked its appointment of the plaintiff as its attorney in Ecuador. It did not appoint another attorney. [10] There was no evidence as to whether Yorkton Canada or Yorkton Chile continued to do business in Ecuador after this. [11] In March 1995, Yorkton Chile closed its office in Santiago. [12] The plaintiff commenced his action in Ecuador around May 1997. The action named Yorkton Canada as the sole defendant. [13] On December 9, 1996, the plaintiff applied to a judge of the Civil Court of Pichincha for the appointment of a "curator", who is meant to represent the interests of an absent company in legal proceedings. In his sworn statement in support of the application he stated: In order to initiate the corresponding legal and judicial actions against YORKTON SECURITIES INC. it is necessary to previously name a COURT APPOINTED ATTORNEY in view that YORKTON SECURITIES does not have an

attorney-in-fact in Ecuador Rather than break the chronological narrative, I will review the Ecuadorian legal basis for this in the next section of these reasons. [14] On June 13, 1997, the court appointed Dr. Peñafiel, a lawyer, to be Yorkton's curator. The plaintiff had no role in the selection of Dr. Peñafiel. [15] Dr. Peñafiel wrote to Yorkton Canada at its former Chilean office, that had been closed for two years, informing them of the claim. He made no efforts to verify the address or to ascertain any alternate addresses to which the notice could be sent. [16] The letter, dated June 17, 1997, was brief, and I quote it in full: MESSRS. YORKTON SECURITIES INC. this is to inform you that on 13 June 1997, under the prevailing Law, I have been appointed by the Judge of the Eight Civil Court of Pichincha of Ecuador as Court Appointed Attorney for Yorkton Securities Inc. in the Oral Summary Hearing Docket No. 784-97-ENT filed against you by Mr. José Ricardo Najas Cortés in the Eight Civil Court of Pichincha, Ecuador. I notify you for the pertinent legal actions required in this case. [17] The writ initiating the plaintiff's claim was not included with the letter, nor was any other document. [18] The letter was not returned to Dr. Peñafiel and he says he did not know that Yorkton had vacated that address. [19] The plaintiff's claim went to trial in Ecuador in 1999. As referred to

in the Peñafiel letter, the trial was in the form of an "oral summary hearing". On February 9, 1999 the court issued an order granting judgment in favour of the plaintiff. It noted that Dr. Penafiel appeared on Yorkton's behalf as its court appointed attorney and that Yorkton, through its attorney, did not deny the accusations made in the suit. The court concluded by ruling that damages should be "calculated by experts validly incorporated into the lawsuit ...". Not having had notice of the trial, Yorkton took no part in it, other than through Dr. Peñafiel, who called no witnesses. [20] The February 9 order was not served on Yorkton. It would have had three days in which to appeal the order. The curator did not appeal on behalf of Yorkton. [21] On March 28, 1999 the Judge in the Ecuador Action issued an Order to settle - i.e., calculate - interest on the Ecuador Default Judgment and designated an expert who submitted his report on that issue. That order was not served on Yorkton. [22] On April 28, 1999 the court issued the following order or judgment addressing the issue of damages, which I quote in full: Quito, 28 April 1999 ORAL, SUmmary HEARING: Jose Ricardo Najas against - Yorkton Securities Inc. EIGHT CIVIL COURT OF PICHINCHA: Quito 28 April 1999 at O8h: 30. WHEREAS the Court Appointed Attorney of Yorkton Securities Inc. has not f i l e d any observations to the

report prepared by the Expert Witness of Liquidation, therefore assuming the acceptance of this report, all its parts and contents are fully approved. Yorkton Securities Inc. through its Court Appointed Attorney Dr. Jorge Peñafiel Revelo has twenty four hours to pay or relinquish goods worth an amount that does not exceed the fixed sum of Fourteen Million F i f t y Thousand Dollars, Dollars US$14.050.000,00. Notify the Parties, Dra. Beatriz Suarez, Judge I am informing you for legal purposes. Clerk [23] The plaintiff served the judgment on Yorkton at its Vancouver office in September 1999. The service was done by letters rogatory. That was not a requirement under Ecuadorian law. It would have been sufficient to serve the curator. [24] The plaintiff commenced this action in British Columbia to enforce the Ecuadorian judgment in February 2000. [25] In June 2004, the plaintiff registered the Ecuadorian judgment in Illinois and commenced an action in the Circuit Court of Cook County, to enforce it in accordance with the Uniform Foreign Money - Judgments Recognition Act, 735 ILCS 5/12-618. [26] In response, Yorkton Canada applied to quash the registration of the Ecuadorian judgment. White J. granted that application on September 28, 2004. White J. gave very brief reasons in which he said he adopted Yorkton's arguments. Those arguments were similar to those made in this application,

in that they relied on lack of notice provided to Yorkton. [27] The plaintiff appealed the Order of White J. The Illinois Appellate Court denied the appeal on December 20, 2005. The basis for its reasoning was that the notice of the action sent by the curator to the Chilean address was not reasonably calculated to reach Yorkton Canada. The court held that due process had not been complied with. [28] On November 28, 2006 the Chief Judge of the Ecuadorian Supreme Court of Justice wrote the following letter: PRESIDENCY OF THE SUPREME COURT OF JUSTICE. - Quito, November 28, 2006; at 10:30. - In accordance with the Article 23, Numeral 15 of the Political Constitution of the Republic, who institute, recognize and guarantee from the State the right of the persons to request from the authorities and to receive the attention and the pertaining answers at the proper time; we accept Mr. José Ricardo Najas Cortés request and dispose to inform and communicate officially through the Minister of Foreign Relations to the President of the Supreme Court of British Columbia that Ecuador is a social State of right, sovereign, independent and democratic; with responsible presidential government; that all the Juridical Function is independent in the practice of their duties and obligations without the interference of any other State Function in their own affairs; the Due Process is guaranteed,

observing the legal and impartial basic guarantees, without the reduction of the guarantees established in the Constitution, the international agreements and the law. As consequence, if Yorkton Securities Inc., /Orion Securities Inc., would like to request the reverse of the Judgment in the Ecuadorian legal action 1997-0784-EMT and SOO1142 Vancouver Registry, if relevant and the facts are demonstrated in legal and proper manner, will receive due attention and will have all the rights and guarantees according the Political Constitution of the Republic of Ecuador, the enforcement of international agreements and the Law, in similar conditions for Ecuadorian and foreigners, without any discrimination.- As acting General Secretary in reason of vacancy in that position, will act Doctora Isabel Garrido Cisneros clerk of the First Civil Court of the Supreme Court of Justice. Be complied. Signature Dr. Jaime Velasco Dávila

PRESIDENT OF THE SUPREME COURT OF JUSTICE. [29] This letter was provided to Yorkton's counsel by the plaintiff's counsel. It does not appear to have been sent to this court.

1. The legal basis for the appointment of the curator [30] I will attempt to summarise the procedure pursuant to which the curator was appointed and notice was sent to Yorkton Chile's closed Chilean office. [31] The starting point is Articles 6 and 9 of the Companies Law of Ecuador: (a) Article 6 sets out the obligations of foreign companies to have an attorney in Ecuador: All national and foreign companies negotiating or contracting obligations in Ecuador are required to have an attorney-in-fact or representative in Ecuador, to answer demands and comply with their corresponding obligations. In addition to the requirements of Article 415 of the Companies Law, if the activities of a foreign company in Ecuador imply the execution of public works, provision of public services or production of natural resources of the country, such company will be required to establish a company in Ecuador according to Section XIII of this Law. (b) Article 9 provides the consequence for not having an attorney: Companies or other legal persons who incur an obligation in Ecuador, which must be complied within the Republic, and do not have a legal representative, shall be considered as debtors in hiding and may be represented by a Curator (Court appointed legal representative) according to Article 512 of the Civil Code. [32] As mentioned above, prior to his termination the plaintiff had been Yorkton

Canada's attorney, but he was not replaced. There appears to be no debate that Yorkton Canada was required to have an attorney in Ecuador, at least when it was doing business there. [33] Article 512 of the Civil Code provides for the appointment of a curator: Generally, a Curator shall be appointed for the property of an absent person when the following circumstances exist: 1. If his whereabouts are not known or, at least, if the person is no longer in contact with his family and if such lack of communication gives rise to serious damages to the absent person or to third parties; and 2. If no attorney-in-fact has been appointed, or if one has been appointed for special matters or businesses only. [34] Article 519 of the Civil Procedure Code requires that a curator, who is appointed to represent a person whose whereabouts are unknown, ascertain that person's whereabouts and then use every effort to contact them. It states: If the whereabouts of an absent person are not known, the first duty of the curator will be to ascertain them. Once the whereabouts of the absent person are known, the curator must use every effort to contact him. [35] I have set out the bare bones of the statutory framework. The parties and their experts on Ecuadorian law differ as to the interpretation and operation of these provisions as well as other aspects of Ecuadorian law that bear upon whether the curator was validly appointed, and what the plaintiff was required to disclose to the Ecuadorian court when he applied for the appointment of the curator. III. THE PARTIES' POSITIONS 1. Res Judicata [36] Yorkton argues that the Illinois proceedings create an issue estoppel, which is determinative of this proceeding. In the alternative, it says that the related concept of abuse of process applies.

2. Fraud going to the jurisdiction of the Ecuadorian court [37] The fraud argument is based on the proposition that proper Ecuadorian procedure was not followed in obtaining the appointment of the curator. This is so, the defendant argues, because the plaintiff was not entitled to have a curator appointed unless the defendant was unable to be located. The plaintiff and his lawyer, however, knew that Yorkton was located in Canada and knew of its addresses. That should have been disclosed to the court. Not doing so amounts to fraud going to the court's jurisdiction. Further, it is argued, the curator should have taken proper steps to ascertain the whereabouts of Yorkton. [38] In response, the plaintiff says that it had no obligation to disclose Yorkton's whereabouts to the court. It was entitled to the appointment of a curator merely on the basis that Yorkton did not have an attorney in Ecuador at the time the action was commenced. With respect to the manner in which the curator purported to serve Yorkton, the plaintiff acknowledges that the steps taken by the curator were deficient. However, the plaintiff says he is not responsible for that, since the curator was appointed by the court. He also says that this deficiency was a mere technicality.

3. Natural Justice [39] Yorkton's natural justice argument, on the other hand, does not rest on the assertion that Ecuadorian procedures were not followed. Rather, even if those procedures were properly followed, the defendant says that the resulting lack of personal service does not comport with Canadian notions of natural justice. [40] In response, the plaintiff says that a judgment will be enforced in Canada as long as the local procedure was followed. [41] The plaintiff also argues that Yorkton can apply to set aside the judgment in Ecuador. If successful, this would result in a new trial. Where such recourse is available, even if there has been some irregularity or mistake, which resulted in the lack of notice, the judgment will be enforced. (The plaintiff does not say this argument applies if there was fraud going to the jurisdiction). [42] Yorkton submits that if natural justice has not been followed, it is irrelevant whether or not there was the ability to apply to set the judgment aside. In the alternative, Yorkton says that the time for applying to set aside the judgment ran out prior to it being served with the judgment. The plaintiff disputes the latter assertion, and, once again, this issue was the subject of expert evidence. IV. Issue Estoppel and Abuse of Process [43] As stated by the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., [2001] 2

S.C.R. 460, 2001 SCC 44 at para. 25, the three criteria for issue estoppel are: (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. [44] There is no issue that the parties are the same in both this action and the Illinois action. However, for the reasons I outline below, I am unable to conclude that the required element of finality is present or that the issues are the same. [45] As a preliminary point I wish to make it clear that my comments are directed to the circumstances of this case in which: (a) the prior judgment on enforceability is one of a foreign court and not a sister province; and (b) the plaintiff does not seek to overturn a finding of fact made by another court.

1. Finality [46] A civil cause of action may only be brought once. Choice of law and jurisdictional principles ensure that a case is adjudicated under the appropriate law and tried in the most appropriate forum. [47] The purpose of issue estoppel is to avoid duplicative litigation. As stated by Binnie J. in Danyluk: 18. The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry. A person should only be vexed once in the same cause. Duplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided. 19 Finality is thus a compelling consideration and judicial decisions should generally be conclusive of the issues decided unless and until reversed on appeal. However, estoppel is a doctrine of public policy that is designed to advance the interests of justice. [48] However, different considerations apply to an action to enforce a judgment. A party who has the benefit of a judgment in its favour is entitled to multiple bites at the cherry: it is entitled to attempt to enforce that judgment in any and all jurisdictions until it is paid in full. [49] In my view, an action to enforce a judgment is not meant to be final except in the jurisdiction in which the enforcement action was brought. The issue in front of the Illinois courts was whether the judgment was enforceable in Illinois, not whether it was enforceable in other countries. [50] I conclude that the necessary element of finality is lacking in this case.

2. Same Issues [51] As I discuss in the following section, a foreign judgment is not to be enforced in Canada where it is contrary to Canadian public policy, or where it was obtained in breach of Canadian concepts of natural justice. [52] Standards for the recognition of foreign judgments vary from jurisdiction to jurisdiction. Were a foreign court's decision on the enforceability of a foreign judgment determinative in subsequent enforceability proceedings in Canada, it would not be Canadian standards that would be applied. If I were to regard the Illinois Court of Appeal's decision as determinative, I would, in effect, be delegating to a foreign court my responsibility to ensure that Canadian standards of natural justice were complied with. [53] It is of course quite possible that a prior judgment rendered in a different jurisdiction on the issue of enforceability could be based on similar or identical principles to those in Canada. In fact, in the case at bar, Yorkton attempted to show that Illinois legal concepts and standards with respect to natural justice and fraud going to jurisdiction are the same as ours. But an attempt to prove that the foreign court's standards are the same as Canadian ones simply adds one more step to the process, since the ultimate test is dependant on Canadian standards. In my view, those standards should be addressed directly, rather than through

an attempt to show that a foreign judgment on enforceability is res judicata. [54] As I have said above, the case might be very different if the defendant was relying on a judgment from another Canadian province. That is because the courts are to apply Canadian standards and there is the unifying supervision by the Supreme Court of Canada, but that is not an issue I need decide in this case. [55] Likewise, the result might be different if the court in Illinois made a finding of fact that the plaintiff wished to challenge in this case, such as whether notice had in fact been given. Once again that is not the case here: the underlying facts relating to whether, when and how notice was given are not in issue. Nor is there any dispute with respect to what transpired in Ecuador regarding the appointment of the curator.

3. Abuse of Process [56] Yorkton also relies on the doctrine of abuse of process. [57] As was said by Arbour J. in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77, 2003 SCC 63 at para. 37: ... Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where the strict requirements of issue estoppel (typically the privity/mutuality requirements) are not met, but where allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice. [58] Arbour J. also noted, at para. 38, "[t]he policy grounds supporting abuse of process by relitigation are the same as the essential policy grounds supporting issue estoppel". [59] In my view, the analysis I have adopted with respect to issue estoppel is equally applicable to abuse of process and its underlying policy. Therefore, I reach the same the conclusion, namely that the plaintiff is not estopped by the decision of the Illinois Court of Appeal from seeking enforcement of the Ecuadorian judgment here. [60] I conclude this issue by making the obvious observation that my finding that the Illinois Court of Appeal's judgment is not determinative of this litigation does not preclude it from having persuasive value. V. NATURAL JUSTICE 1. Was there a

breach of natural justice? [61] A foreign judgment will not be enforced in Canada if it was not obtained in accordance with Canadian principles of natural justice. [62] The requirement that timely notice of a claim should be given to a defendant is fundamental to our concept of natural justice. [63] Both of those propositions were made clear by Major J. in Beals v. Saldanha, [2003] 3 S.C.R. 416, 2003 SCC 72. The detailed facts of the case are more relevant to the following section of this judgment, but I will set them out here to put the case in context. [64] In Beals, the Ontario defendants were sued in Florida with respect to a land transaction. A defence was filed by one of the co-defendants without the knowledge of the other, but there was no question that the they had all been served with notice of the action. The plaintiff's complaint was amended twice, but the defendants did not file defences to the amended complaints. [65] The defendants were served with a motion to note them in default, to which they did not respond. Consequently, the Florida court issued an order noting the defendants in default, thus they were deemed to have admitted the truth of the allegations in the complaint. [66] Next, the defendants were served with a notice of a jury trial to assess damages. They did not respond to this, nor did they appear at the trial. The jury awarded $210,000 in

compensatory damages and $50,000 in punitive damages plus post-judgment interest. The defendants were served with notice of the judgment. [67] The defendants did not appeal the judgment. Nor did they make use of a procedure which permitted them to apply to have the judgment set aside on grounds of "excusable neglect", "fraud", or "other misconduct of an adverse party". The reason they did not do so was that they received incorrect legal advice that the judgment could not be enforced against them in Ontario. [68] The plaintiffs commenced an enforcement action in Ontario. By the time it was heard, the judgment, together with interest, reached the sum of $800,000 Cdn. [69] The majority held that there was no breach of natural justice because the defendants had been served with notice of the action and all steps taken within it. [70] Major J., for the majority, stated: 60 A domestic court enforcing a judgment has a heightened duty to protect the interest of defendants when the judgment to be enforced is a foreign one. The domestic court must be satisfied that minimum standards of fairness have been applied to the Ontario defendants by the foreign court. 62 Fair process is one that, in the system from which the judgment originates, reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system.

This determination will need to be made for all foreign judgments. Obviously, it is simpler for domestic courts to assess the fairness afforded to a Canadian defendant in another province in Canada. In the case of judgments made by courts outside Canada, the review may be more difficult but is mandatory and the enforcing court must be satisfied that fair process was used in awarding the judgment. This assessment is easier when the foreign legal system is either similar to or familiar to Canadian courts.

64. The defence of natural justice is restricted to the form of the foreign procedure, to due process, and does not relate to the merits of the case. The defence is limited to the procedure by which the foreign court arrived at its judgment. However, if that procedure, while valid there, is not in accordance with Canada's concept of natural justice, the foreign judgment will be rejected. The defendant carries the burden of proof and, in this case, failed to raise any reasonable apprehension of unfairness.

65. In Canada, natural justice has frequently been viewed to include, but is not limited to, the necessity that a defendant be given adequate notice of the claim made against him and that he be granted an opportunity to defend. The Florida proceedings were not contrary to the Canadian concept of natural justice. The appellants concede that they received notice of all the legal procedure taken in the Florida action and that the judge of the foreign court respected the procedure of that jurisdiction. The appellants submit, however, that they were denied natural justice because they were not given sufficient notice to enable them to discover the extent of their financial jeopardy. [emphasis added] [71] It follows from the above that if Canadian standards of natural justice are not met, it matters not that the procedures of the foreign jurisdiction regarding notice and service were followed. Thus in Walters v. Tolman (2005), 47 B.C.L.R. (4th) 140, 2005 BCSC 838 at paras. 28 and 30, Melnick J. stated: 28 A foreign judgment can be impeached if the proceedings in which the judgment was obtained were contrary to natural justice (Leaton Leather & Trading Co. v. Kona (1997), 147 D.L.R. (4th) 377 (B.C.S.C.)). It has been held that failure to provide personal service to a party to the action is deemed to be contrary to natural justice. ... 30 Therefore it is a principle of the law in both

England and Canada that a foreign judgment will not be enforced even though the procedure of the foreign court for substitutional service is acceptable in that foreign jurisdiction. Thus, even though service upon Mr. Tolman and Mr. Alpen may be considered proper service upon Ms. Heinrich and Ms. Alpen in Washington State, that means of "service" is not acceptable in British Columbia. [emphasis added] [72] For the following reasons, it is my view that the procedure adopted in the current case was not in accordance with natural justice because the defendant was not given adequate notice of the claim. (I will deal with the issue of Yorkton's potential ability to apply to set aside the judgment later in these reasons). [73] The plaintiff was aware of the fact that Yorkton was located in Canada and that its Chilean office had been closed, as is evidenced by the following: (a) The Canadian and English addresses of Yorkton were printed on its letterhead. The agreement which was the subject of the Ecuadorian action was printed on the letterhead. (b) On December 14, 1994, the plaintiff's Ecuadorian counsel, Dr. Bustamante, wrote a demand letter to the chairman of Yorkton Canada, Mr. Giustra, at Yorkton's Vancouver address. (c) On July 25,, 1995, the Ecuadorian Ambassador to Canada wrote to Mr. Guistra, at Yorkton's Vancouver address stating: The Government of Ecuador has been following

with particular interest the initiatives that Yorkton Securities has undertaken to finance mining activities in my country. It has been brought to the attention of my government that Yorkton Securities has closed its office in Chile and has also terminated the agreement with Mr. Ricardo Najas who has been acting as your representative in Ecuador since April of 1993. We hope that these decisions will not diminish your involvement in future projects in Ecuador and respectfully request that all pending matters derived from the contractual agreement between Yorkton Securities and Mr. Najas be settled in a[n] amicable way as soon as possible. I have taken this matter to y[o]ur personal attention knowing that the grievances of Mr. Najas will be appropriately addressed since a financial institution such as Yorkton Securities holds its reputation as the most important asset. I would be grateful for a reply by August 9, 1995. [emphasis added] Mr. Najas refers to this letter in his affidavit as one of the various attempts to contact the defendant with respect to his claim. (d) To the knowledge of the plaintiff, the Ambassador discussed the Plaintiff's claim with Mr. Giustra in several telephone calls and he met personally with Mr. Giustra and discussed the plaintiff's claim in March 1996. (e) Between the time of the Ambassador's letter and the date the action was filed - May 13, 1997, -

there was further correspondence between both sides' Canadian counsel. The responses from Yorkton and its counsel may not have been to the plaintiff's liking - he says they were not substantive - but that is beside the point. The plaintiff and his counsel clearly knew that Yorkton was based in Canada, the addresses at which it could be easily served, and they knew that Yorkton's Chilean office had been closed. [74] In contrast, as I mentioned above, the judgment itself was served on Yorkton at its Vancouver office by letters rogatory. It was not served at the Chilean address. [75] The curator made no efforts to locate Yorkton. He simply wrote to the office in Chile that Yorkton had vacated. He apparently did this even though in his view he was under no obligation to notify the defendant at all. He said in his affidavit: I sent the Letter on my own initiative. Under Ecuadorian law, the court-appointed Curator has no obligation to notify a defendant or a company without a legal representative in Ecuador to receive and respond to documents in a legal proceeding. In accordance with my own principles of fairness and justice, I sent the Letter hoping to receive instructions or a response from the defendant. Any harm or penalty incurred by the defendant as a result of their failure to appoint a representative in Ecuador would be to their prejudice as, by law, the defendant was

required to appoint such a representative and failed to do so. [76] The plaintiff says he acknowledges that the curator should have taken steps to locate the defendant and serve it. However, he says that this was a mere technical error. I do not agree. I cannot see how the failure to take steps to ascertain the location of a defendant and effectively serve it can be a mere technical matter when the defendant never received actual notice through any other means. [77] The plaintiff argues that the curator was appointed by the court and that he had nothing to do with the manner in which the curator purported to serve Yorkton. [78] I do not consider that to be relevant, or at least not determinative. Natural justice was either complied with or not. Even if this were a relevant consideration, the application to appoint the curator was not mandatory. The plaintiff could have simply served Yorkton with the writ in Canada but chose not do so. He cannot completely distance himself from the procedure which was followed. [79] The plaintiff relies on the breach of Yorkton to maintain an attorney in Ecuador. Even if there was such an obligation, the failure to do so cannot avoid the necessity of taking reasonable steps to notify Yorkton of the claim. As was said by the Illinois Court of Appeal dealing with this issue in Najas Cortés v. Orion Secs. Inc. (2006), 362 Ill. App. 3d 1043: Najas'

argument is premised on his claim that Ecuadorian law required Yorkton "to maintain a legal representative in Ecuador." While we accept that claim as true for purposes of our decision, we are not presented with any explanation how this duty to maintain a representative in Ecuador somehow translates into a duty to maintain an address to receive legal notice in Chile so as to provide a basis to conclude that regular mail sent to that office (even two years after it closed) was nonetheless "reasonably calculated to provide actual notice". [80] I note there is no allegation that Yorkton was attempting to avoid service, nor could there be any basis for such an allegation. [81] Substitutional service is, of course, not in and of itself a breach of natural justice. But the substitutional service, as with any manner of service, must, to use the terminology of the U.S. case law, be reasonably calculated to apprise the defendant of the action and to afford it the opportunity to defend. That was not the case here, and I agree with the Illinois Appellate Court's conclusion. [82] I therefore conclude that the failure to take effective steps to provide Yorkton with notice of the action was a breach of natural justice.

2. What is the significance of Yorkton's failure to apply in Ecuador to have the judgement set aside? [83] The plaintiff argues that the defendant's natural justice argument must fail because Yorkton had (and still has) the ability to apply to the Ecuadorian court to have its judgment set aside, but did not do so. In the alternative, the plaintiff suggested that I adjourn this application in order to allow the defendant to apply in Ecuador to have the judgment set aside. That procedure is known as a "nullification action". [84] The legal proposition advanced by the plaintiff was stated in its argument as follows: in deciding whether the foreign judicial system meets the requirements of natural justice, the Canadian court will look to whether there is adequate recourse in the foreign jurisdiction against a judgment granted without notice. Where there is such recourse, even if there has been some irregularity or mistake which resulted in the lack of notice (so long as there has not been extrinsic fraud) the judgment will be enforced. [85] The parties disagree as to if and when Yorkton's right to set aside the judgment has expired. Yorkton says that, in any event, it is not required to avail itself of the Ecuadorian remedy. (a) The Nullification Action [86] A "nullification action" is a separate action brought by a defendant to have a judgment set aside, as opposed to a motion in

the original action. If the judgment is nullified, the plaintiff would then have to prove its claim against the defendant. [87] There appears to be no dispute that, at a minimum, the judgment may be nullified by the Ecuadorian court if it is convinced that the curator should not have been appointed, or that he did not properly fulfill his duties, or both. In his supplemental argument, the plaintiff says that the success of a nullification action is a certainty. But that contradicts the plaintiff's own expert, Dr. Barrera, who says that the judgment will be set aside if Yorkton could demonstrate lack of proper service or lack of jurisdiction. Further, the letter from Judge Velasco quoted above does not go so far as to say that the outcome of a nullification action was a certainty. Finally, the curator, whom the plaintiff maintains was validly appointed, takes the position that service of Yorkton was not necessary. [88] What is not agreed is whether a nullification action is still available to the defendant, or whether it was available before Yorkton was served. The plaintiff argues that the time for the defendant to bring a nullification action has not run out; the defendant argues that it expired before it was served. Each side has supporting affidavits from their legal experts. [89] Much of the argument on this issue related to whether Yorkton still has the ability to bring

the nullification action. However, it appears to me that the real issue of timing is whether Yorkton had the ability to bring a nullification action for a reasonable time after it was served with the judgment. That is so because if the ability to make use of local remedies is relevant (which I address in the next section), it would not be logical to allow the defendant to take advantage of its own delay in taking the necessary steps to set the judgment aside. [90] As I have mentioned above, the opinions of the parties' experts on Ecuadorian law on this issue are at variance. In fact, there is virtually no common ground between them. [91] Both parties have argued that I cannot make determinations as to Ecuadorian law without, at least, the benefit of cross-examinations on the affidavits. (This position was taken in different contexts. The plaintiff argued this in relation to the issue as to whether Ecuadorian procedure was followed; the defendant in relation to this issue). I agree with those submissions and therefore decline to decide this issue. I will therefore not summarise these opinions here. [92] I can, however, draw this conclusion from the evidence and the case law cited to me: Ecuadorian law is uncertain on the issue. (b) The significance of available remedies in the foreign court to the impeachment of a judgment on the ground of lack of notice [93] The plaintiff's

argument raises the following general issue: in order to impeach a foreign judgment on the ground of breach of natural justice arising out of lack of service, must a defendant have availed itself of remedies in the foreign court? [94] For the purposes of this analysis I will assume that the time for Yorkton to bring a nullification action had not expired within a reasonable time after it was served with the judgment. (In the following section, I will assume that this is uncertain). [95] In support of the legal proposition it advances, the plaintiff relies on two authorities, one from England and one from Ontario. [96] The English decision is Jeannot v Fuerst (1909), 25 T.L.R. 424 (K.B.), a decision of Bray J. In that case, the French plaintiff obtained a judgment against the English defendant in France. In compliance with the French Civil Code, the writ was served by leaving a copy of it at the office of the Proceureur-Général. Having concluded that the defendant had, by virtue of a contractual provision, submitted to the jurisdiction of the French tribunal, Bray J. stated: Notwithstanding all this, however, I do not feel able to say that the proceedings were contrary to natural justice. The French courts in the case of foreigners residing abroad did not take the same precautions as we do to avoid injustice. There is an absolute right to come in and defend before execution, and

even after execution I gather from the expert's evidence that in a proper case the defendant might be allowed to come in and defend. I have nothing to show that if at the end of November he had chosen to appear and ask for leave to defend he would not on the facts before me have been allowed to do so. [97] However, it is clear to me that the view expressed by Bray J. has been superseded in England by the Court of Appeal's decision in Adams v Cape Industries, [1991] 1 All E.R. 929 (C.A.), the leading case on enforcement of foreign judgments in England. [98] Adams involved a default judgment obtained in the United States. The action involved asbestos claims by multiple plaintiffs. The Court of Appeal refused to enforce the judgment against the defendants on the basis that they had no physical presence in the United States. However, it went on to consider the issue of natural justice. While this part of the decision is therefore obiter, the court took pains to consider the issue fully. [99] The defendants in Adams were validly served but chose to ignore the action. They were notified of the initial judgment, which was for damages to be assessed and also of the hearing to assess damages. Once again, they chose to ignore the proceedings and a damage assessment hearing was heard without them being present. The trial judge did not assess damages on an individual basis. Rather he

assessed damages on an average damage amount per plaintiff based in large measure on averages of awards in similar cases that the judge had presided over. The Court of Appeal agreed with the trial judge that this was tantamount to an approach which would be appropriate at settlement negotiations and was therefore the antithesis of an award based upon the individual entitlements of the respective plaintiffs. [100] The court concluded that there was a breach of natural justice. It then considered whether the defendants were required to make use of the remedies available to them in the foreign court. It stated at p.1051: We accept that no authority binding in this court has been cited to us establishing the proposition that for which [plaintiff's counsel] has contended. It is at least clear that our law does not oblige a defendant who can show that a foreign judgment has been obtained by fraud to have used any available remedy in the foreign court with reference to that fraud if he is successfully to impeach that judgment in our courts: see Abouloff v. Oppenheimer & Co. (1882) 10 Q.B.D. 295, [1881-5] All ER Rep. 307 and Jet Holdings Inc. v. Patel [1989] 2 All ER 648, [1990] 1 Q.B.

335. The position may well be the same where there has been a breach of natural justice of the two primary kinds considered by Atkin L.K. in Jacobson v. Frachon, [138 L.T. 386, 392] namely, absence of notice of the proceedings or failure to afford the defendant an opportunity of substantially presenting his case. [emphasis added] [101] Several paragraphs later the Court of Appeal referred to the plaintiff's reliance on Jeannot, amongst other cases, and continued at p.1052: Since the ultimate question is whether there has been proof of substantial injustice caused by the proceedings, it would, in our opinion, be unrealistic in fact and incorrect in principle to ignore entirely the possibility of the correction of error within the procedure of a foreign court which itself provides fair procedural rules and a fair opportunity for remedy. The court must, in our judgment, have regard to the availability of a remedy in deciding whether in the circumstances of any particular case substantial injustice has been proved. However, the relevance of the existence of the remedy and the weight to be attached to it must depend upon factors which include the nature of the procedural defect itself, the point in the proceedings at which it occurred and the knowledge and means of knowledge of the defendants of the defect and the reasonableness in the circumstances of requiring or expecting that

they made use of the remedy in all the particular circumstances. (at 570 C-E). [102] The factors considered by the Court of Appeal included the fact that the defendants chose to ignore the action, both initially and at the damage assessment stage. What appeared to have been the key consideration was that the defendants did not become aware of the method pursuant to which damages were assessed until the lawsuit was commenced in England to enforce the judgment. [103] The court concluded that the judgment should not be enforced. [104] It will be noted from the underlined portion in the first passage I quoted from Adams that the Court of Appeal drew a distinction between primary breaches of natural justice, which included failure to give notice, and other breaches of natural justice. In the Court of Appeal's view, where there is a primary breach of natural justice "it may very well" be the case that the issue of resort to the remedies available in the foreign jurisdiction are completely irrelevant. Where the breach is not a primary one - as was the case in Adams - then the factors of the case need to be considered. However, whether the breach is of the primary kind or not, in the Court of Appeal's view, the failure of the defendant to make use of a remedy in the foreign jurisdiction is not an absolute bar to the impeachment of the judgment. [105] The Ontario case relied on by the

plaintiff is Oyj v. Reinikka, (1999), 100 O.T. C. 77 (Ont.S.C.J.). That case involved a judgment in Finland, which the plaintiff sought to enforce in Ontario. The defendant had attorned to the jurisdiction of the Helsinki court in the loan agreements, which were the subject of the action. The plaintiff sought the assistance of the Province of Ontario to serve the defendant pursuant to a Convention. The province mistakenly stated in a certificate that it had attempted to serve the defendant but was unable to do so. In fact, it made no such effort. Accordingly judgment was granted against the defendant in Finland. [106] In the enforcement proceedings in Ontario, the trial judge, Pitt J., was of the view that the mere irregularities in the prescribed procedure did not, without more, amount to a denial of natural justice. He then went on to state: 14. Even if I am wrong in my analysis of the nature and significance of the procedures followed by the Finnish Court in proceeding to judgment on the basis of substitutional service, it seems that any suggestion of a denial of natural justice was effectively resolved when the Finnish Court served the respondent personally with the judgment and provided him with the opportunity to reopen the litigation. The right to have the case retried is a right even more extensive in scope than a right of appeal, which is generally limited to points of

law and unreasonable findings of fact. [107] The case went to appeal (see (2001), 133 O.A.C. 1, 96 A.C.W.S. (3d) 350), and in a one paragraph endorsement, the Court of Appeal stated: It is not in dispute that the appellant had been properly notified of the automatic right to a trial on the merits of the claim contained in the original proceedings when he was served with the default judgment. The appellant did not avail himself of its right. We therefore find no error in the decision of Pitt J. to register the Finnish judgment. The appeal is therefore dismissed with costs. [108] The decision in Oyj pre-dates the Supreme Court of Canada's decision in Beals. I doubt that the conclusion that lack of personal service is a mere irregularity can still be sustained after Beals in view of the passages from it which I quoted above. [109] Yorkton relied on Leaton Leather & Trading Co. v. Kong (1997), 147 D.L.R. (4th) 377 33 B.C.L.R. (3d) 388 (B.C.S.C.). In that case, Saunders J., as she then was, considered whether a defendant's failure to appeal a Hong Kong judgment precluded it from relying on the defence of breach of natural justice. The defendant missed the deadline for filing affidavits in response to a summary judgment application. He was not represented by counsel and the documents served on him were in English which he did not understand very well. He appeared at the hearing, but

was not allowed to present his case because of the missed deadline. The Master hearing the matter granted judgment against him. [110] Saunders J. stated, at para. 22: The defendants' failure to appeal stems from the same ignorance of legal procedure which led to the judgment issuing against them without consideration of the merits of the case. In these circumstances, the failure to appeal does not, in my view, revitalize enforceability of the judgment. The original judgment was obtained contrary to natural justice, and I see no reason in principle why failure to appeal will make enforceable in a foreign jurisdiction a judgment gained by denying a litigant the right to be heard. [111] That case does not go quite as far as Yorkton submits. It cannot stand for the proposition that failure to make use of a remedy in the foreign court is never a factor in a natural justice argument, because in Leaton the failure to appeal arose as a result of the defendants not being aware of the possibility of an appeal. And, of course, that is not the case here. Yorkton does not allege that it was not aware of the possibility of bringing an action to set aside the judgment. [112] The issue of availment of available remedies in the foreign court was dealt with by the minority judgments in Beals. (Unlike the majority, they found that there was a breach of natural justice). [113] Binnie J.,

delivering a dissenting judgment on behalf of himself and Iacobucci J., stated: 127. The failure to exhaust local remedies in the foreign court is ordinarily a factor to be taken into account in determining whether a foreign judgment is enforceable in Ontario, but I do not think it is fatal here. We are dealing with a default judgment obtained, in my view, without compliance with the rules of natural justice. Moreover, even if the appellants had appealed, we are told that no record of the damage assessment proceedings exists. There is no transcript of the evidence heard by the jury. There is similarly no record of the instructions given to the jury by the trial judge. If the respondents complied with the letter of the Florida rules, as they say they did, a Florida appellate court might well uphold the default judgment. The Ontario court is faced with a different issue than that which would have confronted a Florida appellate court. Was the notice, notwithstanding presumed compliance with Florida court rules, sufficient to alert the foreign defendants to the case they had to meet, and the potential jeopardy they faced?

128. I agree in this respect with the view of the English Court of Appeal in Adams v. Cape Industries plc, [1991] 1 All E.R. 929, at pp.1052-53, that the availability of an appeal in the foreign jurisdiction is not necessarily determinative. Cape Industries was also a case of a default judgment.

129. I would also reject the argument that the appeal should be dismissed because the appellants ought to have moved "promptly" to set aside the default judgment for "excusable neglect". Such relief is normally available to a defendant who has formed an intention to defend but for some "excusable" reason had "delayed" in taking appropriate steps. The problem here is that the appellants had in fact filed a Statement of Defence but had decided, based on what they were told about the respondents' action, not to defend it further. The appellants' problem was not that they failed to implement an intention to defend, but that their intention not to further defend was based on a different case.

130. In these circumstances, I would not enforce a judgment based on (in my view) inadequate notice - and thus violative of natural justice - just because the appellants did not appeal the Florida judgment to the Florida appellate court, or seek the indulgence of the Florida court to set aside for "excusable neglect" a default judgment that rests on such a flawed foundation. [114] LeBel J., in another dissenting judgment, was of the view that the reasonableness of requiring the defendants to make use of the available remedies must be examined. He held that the defendants should not be penalized for the error of their lawyer. In addition, he stated that he adopted the reasoning in Adams and noted at para. 262 that: When the appellants received the Florida judgment, all they knew was the amount awarded against them. There was nothing to inform them of the method by which the Florida court reached its conclusion or to alert them to problems with that method that might form the basis of an appeal or a motion to set the judgment aside. [115] The plaintiff relied on the last two sentences of the following paragraph from the majority judgment delivered by Major J.: 69. My interpretation of the Florida legal system differs from that of LeBel J. in that I am of the opinion that the appellants were fully informed about the Florida action. They were advised of the case to meet and were

granted a fair opportunity to do so. They did not defend the action. Once they received notice of the amount of the judgment, the appellants obviously had precise notice of the extent of their financial exposure. Their failure to act when confronted with the size of the award of damages was not due to a lack of notice but due to relying on the mistaken advice of their lawyer. [emphasis added] [116] The plaintiff's submission ignores the first three sentences of that passage, which I have underlined. What those sentences point out is the crucial factor that in Beals, the defendant was served with the original action and with every step taken in the litigation. They chose not to defend. That is very different than the situation where a defendant has been served with nothing except the actual judgment itself. [117] Seen in that context, the passages from the judgment of Major J. relied on by the plaintiff provide no support to its argument. I do not see that it even touches on the issue of availment of foreign remedies. [118] I noted above that in Adams the Court of Appeal alluded to the distinction between cases of failure to give adequate notice and failure to provide the defendant with the opportunity to present his case, which are breaches of the "primary kind" on the one hand and on the other hand, other breaches of natural justice. Beals and Adams were cases of the latter

kind; the case at bar is the former. [119] There are, in my view, good reasons why failure to give notice should be treated differently from other breaches of natural justice insofar as the obligation to make use of remedies available in the foreign court is concerned. [120] First, the natural place for a defendant to raise an objection to alleged breaches of natural justice that take place during the course of a proceeding is in that proceeding and the appeal or review process that is available thereafter. After all, in such instances the defendant will, by definition, already be participating in the procedure. That is obviously not the case where there has been failure to give notice. [121] Second, a defendant who is named in a foreign action will normally have the ability to decide whether to mount a jurisdictional application, or to defend the action, or to ignore it. That is a decision it is entitled to make at the outset of the litigation. The plaintiff should not be able to force a defendant to make whatever is left of those decisions after a judgment is obtained. [122] Third, to require a defendant who has not been served to apply to the foreign jurisdiction to attempt to set aside a default judgment raises difficult issues of whether such an application would amount to an attornment to the foreign jurisdiction. (That concern is attenuated here, since Yorkton concedes

that there was a real and substantial connection between the claim and Ecuador. It does not concede that Ecuador was the appropriate forum. However, I am here considering the issue as one of general principle). [123] This consideration involves more than Canadian concepts of attornment. A Canadian defendant with assets in multiple jurisdictions takes the risk that those other jurisdictions might regard the availment of a foreign remedy as an attornment to the foreign forum even if a Canadian were to take a different view. [124] In Civil Jurisdiction and Judgments (London: Norton Rose, 2002), the author Adrian Briggs makes reference both to the ruling in Adams and to the dilemma a defendant is faced with in availing itself of remedies in the foreign jurisdiction: In Adams v. Cape Industries plc the question arose whether, if there was a procedure in the foreign court for correcting breaches of natural justice, it was incumbent upon the defendant to avail itself of it. The court held that is was not, at least in cases where a breach was fundamental and lay in depriving the defendant of notice of, or of an opportunity to take part in, the proceedings. However, in the case of procedural irregularity of a less fundamental kind, it may be that this objection may not be made to the English court. Clearly it will be difficult for a defendant to be sure how to proceed. If he appears

before the foreign court to complain about the procedural irregularity he will, by his act of submission, confer undoubted jurisdiction upon the foreign court. Yet if he does not do so, he may not be entitled to raise his objection before the English court at the recognition stage, if it is otherwise held that the foreign court had international jurisdiction over him. [125] In my view, a plaintiff who has not given the defendant notice of its action should not be able to put the defendant in this difficult position by not providing it with proper service. [126] To put both the first and second points a different way, I do not think it is fair or reasonable to allow a plaintiff to obtain a procedural or logistical advantage over a defendant who has not been served with notice of the action in breach of natural justice. [127] There is one further consideration. As the English Court of Appeal noted in Adams (see the first passage from it which I quoted above), a defendant seeking to impeach a foreign judgment on grounds of fraud is not obliged to make use of any remedies available to it in the foreign jurisdiction. [128] One of the grounds of fraud which may be used to impeach a foreign judgment is the type of fraud alleged in this case, namely, to quote from Beals (at para. 45) "... fraud going to the jurisdiction of the issuing court or the kind of fraud that misleads the court,

foreign or domestic, into believing that it has jurisdiction over the cause of action". [129] Service has always been closely tied to jurisdiction. Lack of notice also goes to the issue of whether the foreign court took jurisdiction appropriately. It would be anomalous to require a defendant alleging breach of natural justice on the basis of non-service to make use of foreign remedies, but yet not impose the same obligation on a defendant who alleges fraud going to jurisdiction. [130] I therefore conclude that in cases where the breach of natural justice is one of failure to give notice, a defendant need not apply in the foreign jurisdiction to have the judgment set aside in order to impeach the judgment. (c) Alternative analysis [131] If wrong in the above analysis, I would apply the approach taken by the English Court of Appeal in Adams and the minority in Beals and examine the factors that are relevant to this case. In so doing, I reach the same conclusion. [132] The first consideration is the specific breach of natural justice - the "nature of the defect" to use the words from Adams. Here there was a failure to provide Yorkton with notice of the action. I have already commented in the prior section of the significance of this. [133] Yorkton was not only provided with no notice of the action, but it was not provided with notice of any of the steps taken in the

litigation. [134] The plaintiff was fully aware of the whereabouts of Yorkton and had corresponded with it directly and through lawyers with respect to his claim. [135] The service of the judgment on Yorkton via letters rogatory stand in sharp contrast to both the application of the appointment of the curator and the method employed by the curator in purporting to serve Yorkton. Even if the appointment of the curator under all the circumstances of the case was appropriate under Ecuadorian law (a point I need not decide: see the following section in this judgment on fraud), it was not mandatory. The plaintiff could easily have provided effective service on Yorkton. As LeBel J. said in Beals at para. 262, adopting the reasoning of Adams: "The plaintiffs had the responsibility of avoiding procedural errors that would prevent enforcement in England. I agree with this reasoning, which in my view is also applicable to the present case". [136] If Oyj is still good law after Beals (which I doubt: see above), there are two factors which existed in Oyj that are not present in the case at bar. In that case: (a) the defendant had contractually attorned to the jurisdiction of the Finnish Court; and (b) there was the absolute right given the defendant to re-open the litigation. [137] Under those circumstances - putting Beals to one side - it might be reasonable to force the defendant to

avail itself of the right it had to have the case re-heard on its merits. However, in the case at bar there was no attornment, the right to bring the nullification action in Ecuador is in doubt, and the result of such an action is not automatic. [138] I have not ignored the argument of the plaintiff that Yorkton has given no reasons, such as legal advice, for it not having commenced a nullification action. Although that was one of the considerations for the minority in Beals, that was because of the circumstances of that case. In any event, that would be one factor amongst others to take into consideration. [139] While it appears that the plaintiff himself cannot bring a nullification action and that it might be that he cannot recommence the litigation in Ecuador, I think he must bear the brunt of that, for the reasons I expressed in the prior section VI. Fraud going to jurisdiction [140] In view of my conclusion with respect to the natural justice argument, I need not deal with this issue, nor do I think I could deal with it. This is because, as I mentioned earlier in these reasons, the defendant's fraud on the court argument hinges on a finding that the plaintiff abused the procedures of the Ecuadorian court. The expert evidence on that is in direct conflict and it would not be open to me to resolve the issue on the basis of affidavit evidence. VII. CONCLUSION [141] I

conclude that Canadian standards of natural justice were not complied with and the Ecuadorian judgment is not enforceable here. [142] The defendant's 18A motion is allowed, and the plaintiff's action is dismissed with costs. "E. Myers, J." The Honourable Mr. Justice E. Myers March 5, 2007 - Revised Judgment Corrigendum to the Reasons for Judgment issued advising the following: ▫ The names of Counsel for the Plaintiff should be changed to include S. Stephens. ▫ The sixth line of the quote in para. 22 should be changed from: Securities Inc. Thas not f i l e d any observations to the report to read: Securities Inc. has not f i l e d any observations to the report ... ▫ The eighth line of the quote in para. 22 should have the apostrophe before the first word deleted: 'assuming the acceptance of this report, all its parts and ... to read: assuming the acceptance of this report, all its parts and ... ▫ Paragraph 24 should be changed from: [24] The plaintiff commenced this action in British Columbia to enforce the Ecuadorian judgment of 1999. to read: [24] The plaintiff commenced this action in British Columbia to enforce the Ecuadorian judgment in February 2000. ▫ Paragraph 45(b) should be changed from: (b) the defendant does not seek to overturn a finding of fact made by another court. to read: (b) the plaintiff does not seek to overturn a finding of fact made by another court. ▫

The first two lines of para. 52 should be changed from: Standards for the recognition of foreign judgments vary from jurisdiction to jurisdiction. Where a foreign court's decision on the enforceability of a foreign ... to read: Standards for the recognition of foreign judgments vary from jurisdiction to jurisdiction. Were a foreign court's decision on the enforceability of a foreign ... ▫ The word "defendant" in the second line of para. 55 should be changed to "plaintiff" so that the line now reads: fact that the plaintiff wished to challenge in this case, such as whether notice had ... ▫ Paragraph 93 should be changed from: [93] The plaintiff's argument raises the following general issue: in order to impeach a foreign judgment on the ground of breach of natural justice arising out of lack of service, must a defendant have availed itself of available remedies in the foreign court? to read: [93] The plaintiff's argument raises the following general issue: in order to impeach a foreign judgment on the ground of breach of natural justice arising out of lack of service, must a defendant have availed itself of remedies in the foreign court? ▫ Paragraph 95 should be changed from: [95] in support of the legal proposition it advances, the plaintiff relies on two authorities, one from England and one from Ontario. to read: [95] In support of the legal proposition it advances, the

plaintiff relies on two authorities, one from England and one from Ontario. ▫ Paragraph 99 should be changed from: ... Rather he assessed damages on an average damage amount per plaintiff based in large measure of averages of awards in similar cases that the judge had presided over. ... to read: ... Rather he assessed damages on an average damage amount per plaintiff based in large measure on averages of awards in similar cases that the judge had presided over. ...