It has been more than fifteen years since Justice La Forest explained the Supreme Court's understanding of the concept of "comity" and its relation to sovereignty. In Morguard Investments Ltd. v. De Savoye, Justice La Forest began by explaining that it is "one of the basic tenets of international law, that sovereign states have exclusive jurisdiction in their own territory" and, as such, "a state's law has no binding effect outside its jurisdiction."2 But, Justice La Forest continued, "[m]odern states … cannot live in splendid isolation." He explained how the doctrine of comity should encourage courts of one province to recognize the judgments of another. Justice La Forest's conception of comity – described at greater length below – has been applied in a myriad of contexts, giving rise to judicial cooperation with respect to discovery issues, foreign judgments, and international insolvencies.
But while many Canadian judges have been willing to lend a helping hand to their cross-border colleagues, it is clear that comity can only extend so far. The interests of justice require, on many occasions, that a judge pick up the gauntlet and deal with the problem locally. Allowing defendants to play one jurisdiction off against another can result in neither jurisdiction controlling the proceeding, with the interests of justice being defeated in both. In a very real sense, justice dictates and demands that sovereignty be asserted where appropriate, without regard to the consequences across the border.
This tension between comity and sovereignty is becoming increasingly important in today's legal environment, which has seen increased crackdowns on alleged corporate malfeasance. Where the alleged victims are located on both sides of the border, for example, where the corporate entity is listed on exchanges in both the United States and Canada, it is inevitable that two different legal regimes will come into contact.
This article considers the legal issues arising from this tension between comity and sovereignty. The article begins by discussing the concepts of sovereignty and comity, and explains how those concepts have been developed in the sixteen years since Morguard. It then proceeds to consider the application of those concepts in an arguably sweeping analysis of two interrelated areas of law involving corporate crackdowns: regulatory corporate criminal enforcement; and civil actions, in particular, class actions, alleging corporate misconduct.
There are certain key findings that arise as a result of this analysis. Principally, it is clear that the doctrines of comity and territoriality have not been applied by the lower courts in a manner that will effect predictable results. Rather, these doctrines have been applied in a manner that can create one result in one case and the diametric opposite result in another. Only in the clearest of cases – where there can be no question that a failure to respect comity would have significant implications to the foreign state – can it be confidently predicted that comity will be respected.
In the rest of the cases, the courts appear to invoke comity on the one hand, or territoriality on the other, in whichever way that serves an unstated goal of ensuring that alleged corporate wrongdoers are brought to justice, either in criminal proceedings or in civil actions. But even that unstated goal will not be served in every case: where it is highly impractical to use the Canadian judicial system to pursue alleged corporate wrongdoers, Canadian courts will not acquiesce, even if it permits the alleged corporate wrongdoer to arguably escape justice in this country.
In a very real sense, within certain limits, the courts of this country apply the doctrine of "comity if necessary, but not necessarily comity", in pursuit of the goal of making alleged corporate wrongdoers accountable for their actions.
The Supreme Court's modern approach to comity was first developed in Morguard Investments. The plaintiffs in that case were two mortgagees who obtained judgments in foreclosure actions that followed a default on the mortgages by De Savoye. The actions were commenced in Alberta but by that time, De Savoye had moved to British Columbia. The originating process was served on De Savoye in British Columbia, but he failed to appear. After obtaining judgment in Alberta, the plaintiff s commenced an action in British Columbia to enforce the judgment for deficiencies from the foreclosure proceedings in Alberta. The trial court enforced the judgment, and the Court of Appeal upheld. De Savoye sought and obtained leave to appeal from the Supreme Court of Canada, where Justice La Forest wrote on behalf of the unanimous seven-judge panel.
Justice La Forest began his judgment with an analysis of foreign law. He explained the English position whereby the courts in that country would only recognize foreign judgments in certain circumstances. He explained how the English position was "unthinkingly" adopted in Canada and applied to judgments in sister provinces, with no consideration having been given to the federal nature of the country.
To La Forest J., it was time to shake free from the vestiges of the British past, and recognize the reality of the "modern state", as he dubbed it, explaining:3
The world has changed since the above rules were developed in 19th century England. Modern means of travel and communications have made many of these 19th century concerns appear parochial. The business community operates in a world economy and we correctly speak of a world community even in the face of decentralized political and legal power. Accommodating the flow of wealth, skills and people across state lines has now become imperative. Under these circumstances, our approach to the recognition and enforcement of foreign judgments would appear ripe for reappraisal.
For Justice La Forest, the notion of "comity" required increased recognition of foreign judgments, particularly judgments of other provinces within a federal country that at least in theory had a common market. And what was comity? Here, Justice La Forest adopted the following definition:4
"Comity" in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws . . .
Justice La Forest found that the Alberta court properly had jurisdiction of the action, as there was a real and substantial connection with Alberta. Absent any allegations of fraud or conflict with the public policy of the recognizing jurisdiction (which were not alleged in this case), the judgment simply ought to be enforced.
After the decision was released in 1990, Justice La Forest's definition of "comity" was invoked by a number of courts in a variety of circumstances, both to justify cooperation and a refusal to cooperate with the foreign jurisdiction.
Courts routinely applied the above-quoted passage in extending the principles set out in Morguard to recognize (or refuse to recognize) international judgments5 and in staying (or refusing to stay) domestic proceedings in favour of parallel foreign proceedings.6 The invocation of the notion of comity to both recognize and refuse to recognize international judgments, and to both stay and refuse to stay domestic proceedings, may give additional credence to one author's comment that "[c]omity is a chameleon word."7
The Supreme Court's conception of "comity" was extended beyond mere assertions of jurisdiction and the enforcement of judgments. In one case, a judge agreed that a party to a proceeding was not required to produce documents where legislation in another province would have prohibited their removal from the province.8 On appeal, the Court of Appeal found that the trial judge properly applied the concept of comity, which "means that a court will not, generally speaking, order a person subject to another jurisdiction to violate a law of that other jurisdiction."9 In another case, the fact that "comity" was not an "absolute obligation" was relied upon by the court in refusing to allow a party to invoke secrecy obligations imposed by a foreign country to avoid questions posed during an examination for discovery.10
In the following decade, the Supreme Court itself had the opportunity to reconsider and extend the notion of comity to areas other than interprovincial recognition of judgments. The first such occasion was in Amchem Products Inc. v. British Columbia (Workers Compensation Board).11 Amchem involved the flip-side of comity: in this case, a British Columbia court asserted jurisdiction over an action, and enjoined the plaintiff s from continuing proceedings in Texas. The injunction was upheld on appeal.
Sopinka J., writing for the court, explained once again the concept of forum non conveniens, and the circumstances in which a Canadian court would issue an anti-suit injunction. After adopting the definition of "comity" set out in Morguard, Sopinka J. introduced a new formulation of the concept, which involves reciprocity. He stated:
In a world where comity was universally respected and the courts of countries which are the potential fora for litigation applied consistent principles with respect to the stay of proceedings, antisuit injunctions would not be necessary. A court which qualified as the appropriate forum for the action would not find it necessary to enjoin similar proceedings in a foreign jurisdiction because it could count on the foreign court's staying those proceedings. […]
While the above scenario is one we should strive to attain, it has not yet been achieved. Courts of other jurisdictions do occasionally accept jurisdiction over cases that do not satisfy the basic requirements of the forum non conveniens test. Comity is not universally respected. In some cases a serious injustice will be occasioned as a result of the failure of a foreign court to decline jurisdiction. It is only in such circumstances that a court should entertain an application for an anti-suit injunction.
Justice Sopinka continued with the "reciprocal comity" approach later in his reasons:
The result of the application of these principles is that when a foreign court assumes jurisdiction on a basis that generally conforms to our rule of private international law relating to the forum non conveniens, that decision will be respected and a Canadian court will not purport to make the decision for the foreign court. The policy of our courts with respect to comity demands no less. If, however, a foreign court assumes jurisdiction on a basis that is inconsistent with our rules of private international law and an injustice results to a litigant or "would-be" litigant in our courts, then the assumption of jurisdiction is inequitable and the party invoking the foreign jurisdiction can be restrained. The foreign court, not having, itself, observed the rules of comity, cannot expect its decision to be respected on the basis of comity.
In that same year, Justice La Forest also elaborated on the notion of comity. In Hunt v. T&N plc,12 the court considered a Quebec statute that purported to prohibit the removal of documents from the jurisdiction, which had the effect of preventing their use in a British Columbia action. In finding that the Quebec statute was constitutionally inapplicable to other provinces, Justice La Forest explained that the notion of comity was firmly rooted in notions of fairness:
One must emphasize that the ideas of "comity" are not an end in themselves, but are grounded in notions of order and fairness to participants in litigation with connections to multiple jurisdictions.
The tie between "comity" and "order" was affirmed on a number of subsequent occasions by the Supreme Court.13
The Supreme Court took the next natural step in its evolution of thought on the role of comity by extending the Morguard principles to a judgment delivered in a foreign country. In Beals v. Saldhana,14 the court applied the same "real and substantial connection" test in determining whether or not to recognize a judgment issued in a foreign jurisdiction. Justice Major, writing for the majority, began where Justice La Forest left off : appealing to notions of order and fairness: "The principles of order and fairness ensure security of transactions, which necessarily underlie the modern concept of private international law."15 Justice Major continued:
International comity and the prevalence of international cross-border transactions and movement call for a modernization of private international law. The principles set out in Morguard, supra, and further discussed in Hunt v. T&N plc, [1993] 4 S.C.R. 289, can and should be extended beyond the recognition of interprovincial judgments, even though their application may give rise to different considerations internationally. Subject to the legislatures adopting a different approach by statute, the "real and substantial connection" test should apply to the law with respect to the enforcement and recognition of foreign judgments.
Justice Major continued with another theme initially developed by Justice La Forest, being reciprocal comity. He explained that "Like comity, the notion of reciprocity is equally compelling both in the international and interprovincial context."16
Justice Major concluded that, where a foreign court has a real and substantial connection to the subject matter in dispute, and absent a defence such as fraud, public policy or natural justice, the judgment ought to be applied in Canada.17
Whether or not the ultimate decision in Beals v. Saldhana (which enforced the judgment) was correct, and there are those who think otherwise,18 it is clear that the tripartite concepts of order, fairness, and reciprocity, was firmly entrenched in the Canadian notion of comity.
So much for comity. The courts have made clear that, where the interests of fairness, order, and reciprocity so dictate, they will lend a hand to courts in foreign jurisdictions. Comity will also prevent them from restraining litigants in foreign jurisdictions, except in rare circumstances. Comity will direct the courts to decline jurisdiction in favour of another where it is appropriate to do so.
But what of territoriality, and what of sovereignty? Are these concepts no more than archaic vestiges of an anachronistic past? As will be explained in the following sections, the time has not yet arrived to mourn the passing of these concepts. To the contrary, their application is – and should be – as robust now as it was when Morguard was written. But to understand how that is so, it is necessary to understand how Canadian courts understand the term.
Territoriality and sovereignty are distinct but separate concepts as they relate to notions of comity. Courts may refuse to act upon foreign judgments, for example, because they seek to preserve the sovereignty of the domestic government. So, when courts refuse to enforce foreign tax laws, they do so because:
[E]nforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes and … an assertion of sovereign authority by one State within the territory of another … is (treaty or convention apart) contrary to all concepts of independent sovereignties. 19
But, as others have pointed out, Canadian courts have not viewed themselves as mere administrative officials enforcing local laws, "but as a pre-political form of governance distinct from the territorially confined mandate of local political government."20 In a very real sense, the assertion of sovereignty may be viewed as the court asserting its own control, not merely those of the legislature that appointed it.
The concept of "territoriality" served as the juxtaposition to comity in Morguard. Justice La Forest defined the territoriality concept as follows:21
This principle reflects the fact, one of the basic tenets of international law, that sovereign states have exclusive jurisdiction in their own territory. As a concomitant to this, states are hesitant to exercise jurisdiction over matters that may take place in the territory of other states. Jurisdiction being territorial, it follows that a state's law has no binding effect outside its jurisdiction.
At its core, territoriality is invoked as a basis of a court's jurisdiction. The following passage was adopted by the Supreme Court in this regard:
The fundamental bases for the exercise of jurisdiction by a State are rooted in two aspects of the modern concept of the State itself: defined territory and a permanent population. In principle, a State has jurisdiction over all persons, property and activities in its territory; a State also has jurisdiction over its nationals wherever they may be.22
Either territoriality or comity also can be invoked by a domestic court to refuse to apply domestic law to acts occurred abroad. For example, as discussed below, Canadian courts are reluctant to impose Charter standards on investigations conducted abroad, even when the evidence obtained from those investigations is subsequently sought to be introduced in Canadian proceedings. This can be viewed both as a limiting effect of territoriality (i.e., territoriality confers a power to assume jurisdiction within the court's territory, and not beyond) and as an extension of comity (i.e., respect for other countries dictate that a court not extend its laws to the foreign jurisdiction).
There is another aspect of "sovereignty" that may be considered by courts when considering cross-border enforcement of corporate criminal prosecutions. It is well-recognized that transborder criminal activities can be encouraged by the failure of one state to properly enforce its criminal laws. "Asymmetries" of criminal law enforcement not only permit law-breakers to evade prosecution, but can in fact encourage cross-border criminal acts.23 While the "cross-border" nature of corporate criminal acts may be simply fortuitous, such as the case of an inter-listed company, in other circumstances, the criminal conduct may have been encouraged by a lack of enforcement in another jurisdiction. Canadian courts, in refusing to assert territoriality or sovereignty and to take control of a proceeding against a defendant, have to be mindful of the fact that their failure to do so, may have greater repercussions in the future.24
In the face of spectacular corporate collapses following certain alleged (and in some cases, now proven) criminal activity, it comes as no surprise that regulators and prosecutors are increasingly cracking down on corporate crime. This crackdown occurs at a time when issuing companies are increasingly cross-listing their securities in multiple jurisdictions.25 As a result, prosecutions and civil actions commenced in one jurisdiction may have a very real effect on parallel proceedings in another. Similarly, the alleged corporate criminal acts in question may not have occurred solely in one country, making any subsequent prosecution inherently "transnational".26
Canadian courts will be expected to consider the extent to which they should stand aside and permit (or facilitate) foreign countries to take control of the process. They will also be required to consider the extent to which defendants can expect to rely on domestic procedural or constitutional protections in foreign proceedings, particularly where evidence from the foreign proceedings may be imported back to the domestic proceedings. To answer these questions, and others raised by cross-border criminal prosecutions or civil actions based thereon, courts can reasonably be expected to invoke considerations of territoriality on the one hand, and comity on the other.
In general terms, the fact that victims of corporate crime reside in one territory or another should not, in and of itself, be determinative as to whether a Canadian regulator will assert jurisdiction over a potential defendant. It may be irrelevant to the Ontario Securities Commission, for example, whether the SEC has assumed jurisdiction or not. Parallel proceedings north and south of the border are not uncommon.
Issues of comity and sovereignty therefore arise not so much in relation to the assumption of jurisdiction, but rather, with the consequences of assuming that jurisdiction. In particular, defendants in regulatory investigations have reason to consider the possibility that information they provide may ultimately find its way to parallel proceedings south of the border.
In Ontario, securities regulators can commence an investigation through what is known as a "section 11 order" or a "section 12 order", which relates to the relevant provisions of the Ontario Securities Act.27 These provisions confer a number of broad powers on the Securities Commission, which include the power to appoint a person to examine "any documents or other things" in the possession of the target or any other person. Section 13 empowers an investigator to summon individuals and examine them under oath and to compel the production of documents. Failure to comply can result in a conviction resulting in a fine or imprisonment.
Section 16 of the Ontario Securities Act provides that no person shall disclose the nature or content of a section 11 or 12 order, the name of any person being examined under section 13, or any information obtained under section 13, or any documents produced under that section. Section 17 of the Securities Act permits the OSC to disclose any of this information to a third party, but disclosure of section 13 testimony to a person responsible for the enforcement "of the criminal law" of another jurisdiction can only be made with the written consent of the person from whom the testimony was obtained.
Targets of regulatory, quasi-criminal, or criminal proceedings can take some comfort that the information they provide will not be fed to U.S. counterparts by their counsel or others at the company, and section 17 similarly constrains the OSC in directly providing section 13 testimony to a police force or a person responsible for the "criminal law" (but presumably, not regulatory law). However, the fact remains that the OSC, the SEC, and others, have signed a number of agreements providing for cross-border cooperation.28 Targets may have reasonable concerns that information not falling squarely within the four corners of section 17 (e.g., derivative evidence obtained through the section 13 examination) may find that information used in the U.S.
Where the OSC seeks to obtain information that has reasonable prospects of trickling down to the U.S. (by reason of its international agreements), can the target refuse to answer on the ground that the information can be used to incriminate him or her in a manner that contravenes foreign constitutional rights? Should territoriality protect the target in this instance, or would comity suggest that cooperation should be afforded to the foreign jurisdiction, even if it conferred benefits otherwise unavailable under the domestic law?
That issue was squarely raised in A. v. Ontario Securities Commission.29 In that case, an unnamed individual had been subpoenaed pursuant to sections 11 and 13 of the Securities Act. The target sought to quash the summons on the grounds that the testimony sought would be used in furtherance of a criminal prosecution. In addition:
it is urged that there is a danger or risk that the Applicant's testimony may be used against him by American authorities without the protections afforded under the Charter. In the presence of that danger or risk, this Court should not compel the Applicant to testify.
The court permitted the OSC to conduct the examinations, commenting:
I do not accept either the OSC cannot be trusted or that the investigative regime following on the s. 11(a) Orders directed to Mr. A. will necessarily result in his testimony under oath being "given" to U.S. authorities in circumstances where he would lose Fifth Amendment protection.
Without invoking the doctrine by name, Justice Campbell cited the doctrine of comity, stating:
It would be surprising indeed, given the need for cross-border securities enforcement, if a U.S. Court did not pay attention to, let alone honour, a Canadian process designed to preserve derivative use immunity of validly taken testimony in Canada.
And as such, the court refused to grant the blanket protection sought by the target who raised concerns based on pending proceedings in the U.S.
In his reasons, Justice Campbell referred to his recent decision in Catalyst Fund General Partner Inc. v. Hollinger Inc.30 In that case, an Inspector appointed at the instance of a shareholder of Hollinger Inc. sought to examine Conrad Black, David Radler, and Jack Boultbee, in connection with a court-appointed inspection of Hollinger Inc. following a prima facie showing of oppression. Black and the others objected, citing the fact that they were under criminal investigation in the United States. They argued that it was abhorrent that they be compelled to answer questions, which could ultimately be used in the United States. The problem reflected a key difference between the constitutional protection afforded witnesses in Canada and the U.S.: in Canada, a witness can be compelled to give self-incriminating evidence, but the further use of that evidence is strictly controlled; whereas in the U.S., the witness can assert the Fifth Amendment rights and refuse to answer the question in the first place.
In a sense, the Catalyst case did not fit easily within the existing paradigms of comity on the one hand, or territoriality, on the other. To the extent that comity relates to respecting the laws of a foreign jurisdiction, and not off ending the courts in that foreign jurisdiction, it could hardly be said that compelling an individual to testify would necessarily off end the U.S. courts. After all, if they were so offended, they could simply prohibit the use of the evidence in the U.S. proceedings. On the other hand, given that comity results in giving effect to foreign judgments rendered in another state, is it such a stretch to suggest that procedural protections granted to a litigant in a foreign state should be similarly respected when the actions of a Canadian court could thwart those protections?
Similarly, another issue had to be considered by Campbell J.: the court-appointed Inspector had a statutory mandate, authorized by the court, to get to investigate and report. The Inspector satisfied the court that Black et al. had evidence relevant to the investigation. Slavish deference to the U.S. Fifth Amendment rights could effectively defeat the mandate of the court-appointed Inspector.
In a classic showing of "comity if necessary, but not necessarily comity", Justice Campbell granted the Inspector's motion to examine Black et al. under oath. To the extent the U.S. authorities wanted the evidence obtained by the Inspector, they would need to avail themselves of the Mutual Legal Assistance Treaty, which arguably would prevent the disclosure of information in a manner that would violate the targets' U.S. constitutional rights. But Campbell J. was willing to accept, for the purposes of argument, that the MLAT may not guarantee the protection of Black's Fifth Amendment Rights.
Instead, Justice Campbell established a process whereby Black and the others could object to a question being posed, relying on their Fifth Amendment rights, and that question would be subsequently reviewed by the court. This is the first case, to the authors' knowledge, of a modern Canadian court permitting a witness to refuse to answer a question on self-incrimination grounds. As such, it is almost revolutionary.
It was not known what would happen when the court was asked to review a question to which Black and the others objected. Presumably, the court would consider whether the question would elicit a self-incriminating answer. But it is not known what would happen if the court agreed that the question would elicit an answer that could tend to incriminate the witness. The court could refuse to allow the question to be posed, or perhaps it could fashion a protective order to prevent further dissemination of any response. The resolution of these issues was simply not known at the time of the judgment, because no questions had been asked. This was an important point for the Court of Appeal in dismissing the appeal:31
Campbell J. indicated that he was prepared to rule on whether the appellants should be compelled to answer specific questions and we regard that as the appropriate context in which to consider the appellants' rights. Also, like Campbell J., we are not persuaded that Canada is completely powerless to protect those under its jurisdiction.
The remedy provided, in both of the cases discussed above, was categorical in one sense, and "contextual" in another. First, targets of alleged regulatory and criminal offences cannot expect to have a categorical exemption from investigations simply because parallel investigations may be underway in the U.S. Second, even where there are questions posed in a manner that give reason for concern that they may incriminate, and those incriminating answers may be exported to the U.S., the Canadian courts are more likely to fashion a flexible remedy than provide any blanket exemption. "Comity light", one might say.
Another area of intersection between comity and territoriality involves the collection of evidence by law enforcement officials abroad for use in Canadian proceedings. This issue, thus far considered by the Supreme Court only in the context of non-commercial criminal cases, is likely to resurface in modern investigations of corporate criminal activity that transgresses national boundaries. Accordingly, how the Supreme Court has considered the issue thus far may have profound implications for cross-border investigations and enforcement of cases of corporate malfeasance.
The issue relates to the application of the Charter abroad. Where American officials seek and obtain evidence that will ultimately be used in a Canadian prosecution, will the Charter apply? Will comity dictate that Canadian courts give deference to the laws applicable to American law enforcement officials, or will territoriality apply to any evidence used in the Canadian proceedings?
The first recent case to consider the applicability of the Charter to foreign investigations was R. v. Harrer.32 In that case, the accused had been questioned in the United States by officials in that country, and in the course of that questioning, gave statements implicating herself in criminal conduct in Canada. She had not been advised of her right to counsel, as would be required by Canadian Charter jurisprudence. Rather, in questioning the appellant, the American officials carried out their respective duties under American law where the Miranda rule did not require any such warning under the circumstances.33
The trial judge originally excluded one of her statements on the ground that the police failed to give her a second right-to-counsel warning when their questioning changed focus. The Court of Appeal allowed the appeal on the ground that there was no Charter breach as the Charter did not apply to interrogations in the United States and as such, evidence could not be excluded under s. 24(2). The general issue for the Supreme Court to consider, therefore, was whether and to what extent evidence obtained by foreign peace officers in a manner that, if obtained by Canadian police in Canada, would be in contravention of the Charter was admissible at the trial of an accused in Canada for an offence committed in Canada.34
The Supreme Court did not require that the Charter be applied to these extraterritorial confessions, because to do so "would truly be giving the Charter impermissible extraterritorial application."35 The court thought it obvious that "Canada cannot impose its procedural requirements in proceedings undertaken by other states in their own territories", even if those proceedings led to a Canadian prosecution."36 Fundamental to the court's decision was the fact that the American officials were not acting on behalf of any government of Canada which would by necessity, pursuant to s. 32(1) of the Charter, require the application of the protections contained within the Charter.
Furthermore, La Forest J. stated:
And I see no reason why evidence obtained in other countries in a manner that does not conform to our procedures should be rejected if, in the particular context, its admission would not make the trial unfair. For us to insist that foreign authorities have followed our internal procedures in obtaining evidence as a condition of its admission in evidence in Canada would frustrate the necessary cooperation between the police and prosecutorial authorities among the various states of the world.37
Turning to the question of fairness, the Court held that whether the evidence was obtained legally in the foreign jurisdiction would be a factor in determining the fairness of the proceeding within the Canadian proceedings, but ultimately, in coming to a decision, the court is bound to consider the whole context of the case. When the protections required under s. 32 of the Charter are not engaged, evidence will only be excluded when the court determines it would be unfair to admit it in the Canadian proceedings.38
The Supreme Court considered the applicability of the Charter to evidence obtained abroad one year later, in R. v. Terry.39 Terry was arrested by U.S. police on an extradition warrant. In the course of that arrest, the U.S. police, complying with American legal requirements, failed to advise the accused of his right to counsel. The principal issue for the Supreme Court was whether the failure of the American official to advise Terry of his right to counsel at the time of his arrest constituted a violation of his s. 10(b) Charter rights rendering the statement subsequently obtained susceptible to exclusion under s. 24(2) at his trial in Canada.40
Following the court's previous decision in R. v. Harrer, McLachlin J., as she then was, held that the evidence gathered by American officials was not subject to the Charter. A finding that the Charter could be applied abroad would be counter to the territoriality principle; the settled rule that a state is only competent to enforce its laws within its own territorial boundaries.41
Furthermore, Justice McLachlin stated, the practice of cooperation between police of different countries pursuant to bilateral mutual legal assistance treaties does not make the law of one country applicable to another. The sovereign authority of Canada ends with the sending of the request for assistance. Even had the American officials been acting in response to a treaty request, as opposed to the informal basis under which they were operating, the Charter would still not govern the conduct of foreign officials.
The personal decision of a foreign officer or agency to assist the Canadian police cannot dilute the exclusivity of the foreign state's sovereignty within its territory, where its law alone governs the process of enforcement. The gathering of evidence by these foreign officers or agency is subject to the rules of that country and none other. Consequently, any cooperative investigation involving law enforcement agencies of Canada and the United States will be governed by the laws of the jurisdiction in which the activity is undertaken.42
It followed, therefore, that the Charter did not apply to the American officials when they detained the appellant. The court refused to exclude the evidence under s. 24(2) of the Charter based on the grounds of fairness. The court held that it was not "unfair" to treat evidence gathered abroad differently from evidence gathered on Canadian soil.
In a slightly different set of circumstances, the Supreme Court in R. v. Cook,43 once again considered the application of the Charter to evidence obtained abroad. The accused, an American citizen, was arrested under a warrant in the United States in response to a Canadian extradition request. Upon arrest, the accused was read his Miranda rights pursuant to American law. Two days after the arrest, detectives from the Vancouver police department interviewed the accused in the United States, but did not initially advise him of his right to counsel nor that he was not required to speak to the detectives.
As the arrest and interrogation of the accused was carried out by Canadian law enforcement officials, s. 32(1) of the Charter was engaged and therefore required the Canadian officials to abide by Canadian law when questioning the accused. Furthermore, the application of the Charter to the actions of Canadian officials did not interfere with the sovereign authority of the United States.44 As such, the Charter applied to the taking of the accused's statement by Canadian police in the United States in connection with their investigation of an offence committed in Canada for criminal prosecution to take place in Canada. The court found that the accused's right under s. 10(b) was breached.
The result of the above cases leads to the conclusion that a court will, generally speaking, not impose Charter standards on foreign investigations, but if induced by the principles of fairness, may exclude such evidence if it would affect the right of the accused to a fair trial.
Where regulatory or criminal proceedings have been commenced against individuals or corporations for corporate malfeasance, class actions are sure to follow. Where multiple class actions have been commenced in foreign jurisdictions as well as Canadian ones, issues of comity and territoriality invariably arise. Specifically, these concepts are most likely to be invoked when the court considers (a) issues of establishing substantive jurisdiction; and (b) issues of procedures to be followed by the court.
With respect to jurisdiction, comity issues can arise (as we have discussed above) where a defendant asserts that there is insufficient connection between the territorial jurisdiction of the court and the substance of the cause of action. But with class actions, there is an added layer of jurisdictional complexity for the plaintiff s. In particular, in multi-jurisdictional class actions, the courts have been required to consider the extent to which absent class members in the home jurisdiction can be bound by class actions decided in foreign jurisdictions.45 In considering this issue, a court must consider the extent to which individuals resident in a foreign jurisdiction can adequately represent individuals in the domestic jurisdiction, and the appropriateness of applying a foreign law to redress the claims of domestic plaintiff s.46 The court must also consider whether the absent class members had adequate notice of the foreign proceeding, because of a perceived unfairness in binding class members to a settlement or judgment in a foreign action of which they had no notice.
The converse situation must also be considered by Canadian courts grappling with domestic class actions purporting to include absent class members resident outside the domestic jurisdiction. For example, with alleged corporate malfeasance actions, courts sometimes are required to consider whether foreign plaintiff s who purchased shares on a domestic stock exchange can sue locally, or conversely, whether domestic plaintiff s who purchased shares on a foreign stock exchange can sue locally.
Both of these situations involve considerations of comity on the one hand and territoriality on the other, on multiple levels. And in all instances, the courts must weigh those concepts with an overarching concern about whether their decisions will increase, or decrease, the effective pursuit of corporate wrongdoers (or, in class action terms, whether the decision furthers two of the goals of the legislation, being "behaviour modification" and "access to justice").
The issue of whether an Ontario court will recognize a judgment rendered by a foreign court in a foreign class proceeding purporting to include Ontario residents in its class definition, was squarely raised by the Court of Appeal in Currie v. McDonald's Restaurants of Canada Ltd.47 In that case, the defendants sought to stay an Ontario class action on the ground that the action had been settled in a class proceeding in the United States, which included Ontario residents as class members. The Ontario class plaintiff s objected, on the ground that the U.S. court had improperly asserted jurisdiction, and that the Ontario class members had inadequate notice of the foreign proceeding. At first instance, the motions judge refused to stay the proceeding. The defendants appealed.
The Court of Appeal began its analysis by reference to the Supreme Court's analysis of the "real and substantial connection" test flowing from Morguard and subsequent cases. In so doing, the court embraced the notion of reciprocal comity, but with a slight twist:48
Ontario expects its judgments to be recognized and enforced, provided its courts assert jurisdiction in a proper manner and comity requires that, in appropriate cases, Ontario law should give effect to foreign class action judgments.
This is an interesting twist, because if reciprocity is viewed from this lens, then one must ask whether the Canadian court would only recognize a judgment where the foreign legislation provided that the non-residents "opt in" to the class. After all, that is the case in a number of jurisdictions in Canada.49 If a B.C. court would only assume jurisdiction over non-residents if they opt into the class, would reciprocal comity require the B.C. court to ignore a judgment from a foreign court who assumed jurisdiction over non-residents who did not similarly opt in? The issue was not squarely at issue in Currie because the Ontario legislation does not contain that requirement.50
The court concluded that it would recognize a foreign judgment to preclude an Ontario class action in the following circumstances:
In my view, provided (a) there is a real and substantial connection linking the cause of action to the foreign jurisdiction, (b) the rights of non-resident class members are adequately represented, and (c) non-resident class members are accorded procedural fairness including adequate notice, it may be appropriate to attach jurisdictional consequences to an unnamed plaintiff 's failure to opt out. In those circumstances, failure to opt out may be regarded as a form of passive attornment sufficient to support the jurisdiction of the foreign court.
In Currie, however, the foreign court provided a mechanism for notice to class members that reached substantially fewer Canadians than the mechanism for notifying American residents. The court also had issues with the form and content of the notice. Accordingly, the court found that the U.S. court had improperly asserted jurisdiction over the plaintiff s when it approved the settlement (a finding that may not fit well with traditional forum non conveniens caselaw, because normally a court assumes jurisdiction at the beginning, not the end, of a case51), and affirmed the motion judge's decision, refusing to stay the action.
A Quebec court subsequently relied on the decision in Currie to refuse to give effect to an Ontario class action settlement in a manner that would bar a Quebec class action. In Lépine c. Société canadienne des postes,52 the court found that the notice issued to Quebec residents under the Ontario order was inadequate, and accordingly, refused to stay the Quebec action. The importance of this case is not so much in its ultimate decision, but rather, on the general principles that appear to have been adopted, namely, that an Ontario judgment could defeat a Quebec class action, provided that notice was appropriate.
Interesting questions will arise where there are notable differences in the substantive law standards that can be applied in the two jurisdictions. Canadian class members might be happy to take the benefits of foreign laws that, for example, award treble damages or significant punitive damage awards. But would they be equally willing to be bound by shorter limitation periods, or defences available only in the foreign jurisdiction? Canadian class members (although not their counsel53) might be willing to accept the benefits of a lucrative settlement in the U.S., but will they be equally willing to accept a defeat on the merits, having not opted out after notice was given to them? Other interesting questions will arise about whether "reciprocal comity" will rear its head once more, if a U.S. jurisdiction refuses to enforce a judgment flowing from an international class action commenced in Canada. Finally, it will be interesting to observe whether courts give effect to concern that by recognizing U.S. class action judgments, the court may be defeating the provincial legislative intent as reflected in legislation specifically passed to deal with class action abuses found in the U.S.54
Those questions may be addressed by courts sometime in the future. For now, this decision has implications on the pursuit of civil remedies for corporate malfeasance. Most notably, while on the facts of Currie the foreign judgment was not enforced, the Ontario Court of Appeal has opened the door for the enforcement of judgments rendered in international class actions. In theory, and subject to certain qualifications discussed below, that could increase the effectiveness of civil prosecutions of corporate wrongdoers. Had the court invoked territoriality in refusing to bind resident class members to a foreign class action judgment, the message to U.S. class counsel would have been that they should not include Ontario residents in their class. That, in turn, could have resulted in corporate wrongdoers escaping liability in at least one jurisdiction, if no parallel proceeding were commenced in Ontario. Even if there were Ontario proceedings commenced, a forced fragmentation of proceedings would at the minimum increase the cost of prosecuting the civil action.55
The flip side of the jurisdictional issue with international class actions concerns the ability or willingness of a Canadian court to include non-resident members of the class. As discussed above, certain of the Canadian provinces have passed legislation that permits the inclusion of non-resident class members, so long as they opt in.56 As this relates to the discussion of corporate crime, the issue is: to what extent will Canadian courts embrace non-resident victims of corporate criminal acts as putative members of a class?
The starting point for this discussion is the decision rendered by Justice Brockenshire in Nantais v. Telectronics Property (Can.) Ltd.57 In that case, class counsel sought to certify a national class in the Ontario courts. The defendants opposed the inclusion of non-resident class members. Relying heavily on a U.S. Supreme Court case, Brockenshire J. certified the national class. In so doing, Brockenshire J. noted that there was "nothing in the Act to prevent" the certification of a national class, and to him, it appeared "eminently sensible" to have questions of liability determined in one proceeding.58 Leave to appeal was subsequently denied.59
Two years later, the B.C. courts entered the national class discussion in Harrington v. Dow Corning Corp.60 In that case, the plaintiff s attempted to certify a class which sought damages for defective silicon gel breast implants on behalf of resident and non-resident claimants. The court granted the motion and rejected the argument that including non-resident members would be an "unwarranted intrusion" into the jurisdictions that had chosen not to pass class proceedings legislation. The decision was upheld on appeal, where the B.C. Court of Appeal commented that "where traditional rules are not adequate to ensure fairness and order then other considerations will become relevant."
The opposite result occurred in Bittner v. Louisiana-Pacific Corp.,61 another B.C. decision rendered in the same year as Harrington. The action related to allegations of negligent design and manufacturing of wood siding. Proposed class members included a subclass of non-residents. The court refused to certify the national class, commenting that:62
The distinctions reduce the ability to make findings that are uniform for the entire class. They create different interests between class members and the various jurisdictions. The provincial distinctions increase management difficulties by requiring the court to consider multiple legal regimes, and will result in the creation of individual trial processes that are sensitive to choice of law issues.
Nowhere in the decision was there any reference to comity, territoriality, sovereignty, Morguard, or any of the other concepts referred to in the Supreme Court's jurisprudence. But the effect of the decision was clear: the Court was not willing to take carriage of a multi-faceted action that would be bogged down in the minutiae of regional differences.
The next major case to consider the certification of class members outside the domestic province was Carom v. Bre-X Minerals Ltd.63 In that case, class counsel sought to certify a class that included persons wherever resident (within Canada) who fell within the class definition unless they opted out of the class. Like Brockenshire J., Justice Winkler noted that the Ontario legislation did "not preclude such a class definition."64 Relying on Morguard and Hunt, Justice Winkler stated that that it was permissible to apply a statute extraterritorially, where there was a real and substantial connection with the subject-matter of the dispute, and where the assumption of jurisdiction accords with the principles of order and fairness.
Interestingly, the opposite result occurred in the U.S. Bre-X class actions. A class action was commenced in Texas, which purported to be on behalf of all investors whether resident in the United States or in Canada. Some of the wrongful acts were said to have occurred in Canada, others were said to have occurred in the U.S. The Texas court refused to assume jurisdiction with respect to claims of Canadian shareholders who purchased their securities on Canadian exchanges.65 The court found that Canadian claims could not be "bootstrapped" to U.S. claims and that independent jurisdiction had to be established for the Canadian plaintiff s.66
Back in Ontario, Justice Brockenshire had an opportunity to reconsider the national class issue in Webb v. K-Mart Canada Ltd.67 That class action sought damages on behalf of a proposed national class consisting of thousands of employees who had been terminated after Hudson's Bay Company had purchased all of the Canadian K-Mart stores and closed many of them. Like he did in Nantais, Brockenshire J. certified the national class, relying on the opt-out provisions of the provincial legislation as being "adequate protection" to extra-provincial class members seeking to prosecute their own action.68
The next major case to consider the issue was Wilson v. Servier Canada Inc.69 The class definition in that case again embraced non-residents, and the defendants argued that the Ontario class action legislation was unconstitutional to the extent that it purported to extend the jurisdictional authority of the provincial court to embrace extraprovincial class members. Justice Cumming rejected those arguments and certified the national class. Relying on Morguard and Hunt, Cumming J. found that there was a real and substantial connection between Ontario and the claims asserted by the Ontario plaintiff s. The court found that the policy objectives underlying the class proceeding legislation militated in favour of extending the procedural protection of the Ontario legislation to residents from other provinces.70 Leave to appeal was denied.71
In Hoy v. Meditronic,72 a B.C. court again approved certification of a class proceeding that contained a non-resident sub-class. In so doing, the court relied heavily on the Court of Appeal's decision in Harrington, and found that it was "indeed appropriate" to certify the class action with a non-resident sub-class.
The next relevant case was McNaughton Automotive Ltd. v. Co-operators General Insurance Co.73 In that case, an Ontario court refused to certify a class action that included non-residents. The action involved allegations that the defendant insurers breached a statutory condition in their automobile insurance policies concerning the calculation of salvage costs. In striking the extra-provincial part of the claim, Justice Haines noted that there were:
Significant differences in the legislative insurance regimes in each province, and accordingly, "order and fairness would not be served by assuming jurisdiction over claims of persons in those provinces and territories where the relevant statutory provisions are materially different from those in Ontario."
The Saskatchewan courts entered the national debate about national classes in Englund v. Pfizer Canada Inc.74 In that case, the defendants sought to stay the Saskatchewan action which included non-residents, in favour of an uncertified Ontario action. The court refused:
I reject BI Canada's submission that the Ontario CPA allows for the creation of a "national class" that binds non-Ontario residents unless they opt out of a class action certified in Ontario because the laws of Saskatchewan do not recognize legislation enabled by other jurisdictions that intentionally encroaches on the right of its residents to seek judicial recourse for losses they suffered as a consequence of a tort or other breach of the law committed within the Province.
[…]
Should the Sask Action be certified, I am satisfied that the courts of Ontario would apply the principles of comity, order and fairness when determining whether a similar action commenced in Ontario should be stayed given the direction in Morguard, supra, that courts of a province give good faith and credit to the judgment of the courts of the sister province where the real and substantial connection test is satisfied.
Again, these are interesting twists on notions of comity – suggesting that the Saskatchewan action, which has yet to render judgment, should stay a parallel proceeding in Ontario action embracing Saskatchewan plaintiff s, simply because Saskatchewan was the province in which the plaintiff s were the "first to file". Where there are multiple class actions filed within Ontario itself, the court does not simply which claim should proceed simply by asking who issued the claim first.75
Finally, Justice Cullity certified an almost-national class in McCutcheon v. Cash Store Inc.76 In this case, the plaintiff s sought to certify a class proceeding that included all residents of Canada, except British Columbia, who obtained a payday loan from the defendants, where the interest rates for those loans were alleged to be usurious. B.C. residents were excluded because there was another action pending. Relying on McNaughton, defence counsel argued that there was no Ontario connection between non-resident plaintiff s and the defendants. Justice Cullity distinguished McNaughton, on the ground that there were insufficient differences among the provinces with respect to the governing law.77
Defence counsel also asked Justice Cullity to exclude Alberta residents on the ground that there was a yet-uncertified class proceeding pending in that province. Justice Cullity invoked the doctrine of comity in considering the issue:
I have, in previous cases, indicated that, for reasons of comity, I would ordinarily defer to the jurisdiction of other Canadian courts - in which substantially identical or overlapping proceedings are pending - by excluding persons resident within their respective provinces or territories from a class to be accepted for the purpose of the CPA. I would follow the same practice in this case subject to the possibility that an order certifying the proceedings in this case might subsequently be amended to expand the class in the event that the proceedings in Alberta are permanently stayed, or discontinued, without a settlement on the merits.
What can one take from what might appear to be a fairly disparate treatment of the "national class" issue by courts across the nation? While it is arguable that the law may be considered unsettled,78 the majority of cases to date indicate that the courts are willing to embrace non-resident class plaintiff s, and that neither of the doctrines of comity nor territoriality will stand in the way except, possibly, when there is another proceeding pending in another province. And while these cases have all related to class members in other provinces, and the Supreme Court has given indications that there may be a difference for comity purposes between the provinces as compared with foreign states, it appears to be simply a matter of time before a Canadian court embraces plaintiff s resident in another country.
One might also be able to usefully juxtapose the decisions in this area of law (the assumption of jurisdiction over non-resident plaintiff s) with the area of law described in the prior section (the recognition of judgments in foreign jurisdictions to bind residents in the domestic jurisdiction). In both areas, the courts have (largely) encouraged an approach that discourages fragmented proceedings. Where a judgment has been rendered that encompasses non-residents, that judgment generally will be recognized to bind residents who seek to commence a separate proceeding locally. Similarly, where a class action is commenced which will include non-residents (as opposed to requiring a separate proceeding in each province), the courts have generally, although not always, agreed.
Returning to the thesis of the paper, there are certain implications for civil litigants seeking redress against alleged corporate misconduct by way of a class action. First, to the extent that defendants seek to escape liability through a forced fragmentation of proceedings, it appears that Canadian courts will not permit defendants to rely on the constitutional division of powers in Canada to advance that goal. Second, it appears that notions of comity – respect for the laws of a foreign jurisdiction – do not extend to the point where Canadian courts will decline jurisdiction out of a concern of interfering with the foreign jurisdiction.79 Third, the comments of the Supreme Court that the laws of Canada do not apply to a foreign jurisdiction – the extension of territoriality described above – have not precluded certification of class proceedings that include non-resident plaintiffs.
Comity and territoriality, or at least the formulations of these concepts thus far espoused by appellate courts and applied by courts of first instance, appear to not stand in the way of plaintiff s seeking to redress corporate criminal acts. To the extent that the local class action is properly framed, the domestic court is the best suited to effect the remedy, and class counsel can properly assert the interests of non-resident victims of corporate crime, Canadian courts appear to be well-positioned to permit aggrieved victims to pursue remedies without needless fragmentation.
Just as Canadian courts have employed a "flexible" approach to comity on the substantive law issues surrounding the assumption of jurisdiction over non-resident plaintiff s or the recognition of judgments from foreign courts, the same can be said for procedural advantages sought by parties seeking remedies for alleged corporate wrongdoing.
A case in point is the decision of Justice Cumming in Vitapharm v. F. Hoffmann La Roche.80 Here, Canadian class counsel in an uncertified class proceeding sought access to discovery material produced in parallel United States class proceedings. The defendants sought an anti-suit injunction of sorts to prevent the plaintiffs from intervening in the U.S. proceedings, and from modifying the U.S. protective order protecting that discovery material in the U.S. from public disclosure. The defendants objected that the plaintiff had no right of discovery in Ontario until the action was certified, and as such, it was inappropriate to permit them to seek access to confidential materials filed in the United States until certification had been granted.
Justice Cumming disagreed. He commented on the lack of precedents on the issue, and referred to the doctrines of comity and sovereignty in the process:81
There appears to be no precedent for the intervention by a Canadian litigant in foreign proceedings for the purposes of having access to the discovery evidence generated by the litigants in the foreign action. However, pursuant to 28 U.S.C. § 1782, United States statutory federal civil procedure facilitates foreign litigants by providing assistance when they wish to conduct discovery in the U. S. in aid of foreign litigation. This cooperative approach is based upon "...considerations of comity and sovereignity [sic] that pervade international law." John Deere Ltd. v. Sperry Corp., 754 F.2d 132 (U.S. C.A. 3rd Cir. 1985) ("John Deere") at 135. Reciprocity by the foreign court is not a precondition for this assistance. John Deere, supra at 135.
Justice Cumming also commented on what he perceived to be a need for greater judicial cooperation in the modern economic environment:82
As a result of the inexorable forces of globalization and expanding international free trade and open markets, there will be an ever-increasing inter-jurisdictional presence of corporate enterprises. This is seen particularly in respect of American and Canadian business activity, given the extent of cross-border trade. If both societies are to maximize the benefits of expanding freer trade and open markets, the legal systems of both countries must recognize and facilitate an expeditious, fair and efficient regime for the resolution of litigation that arises from disputes in either one or both countries.
Citing the three goals of class proceedings legislation – facilitating access to justice, judicial efficiency and behaviour modification – Justice Cumming dismissed the motion to enjoin the plaintiff s' efforts to access U.S. discovery material. Subsequent appeals from that decision were dismissed.
On the other side of the border, U.S. courts have generally been willing to grant access to Canadian plaintiff s seeking access to discovery material adduced in U.S. class proceedings. The U.S. court granted leave to intervene to the Ford plaintiff s, although not giving them access to the materials until the appeals from Justice Cumming's decision had been exhausted.83 Canadian plaintiff s were given intervenor status and the ability to access U.S. discovery materials in both In re Baycol Products Litigation84 and In re Linerboard Antitrust Litigation.85 Also, in Intel Corp. v. Advanced Micro Devices Inc.,86 the U.S. Supreme Court endorsed certain principles permitting foreign plaintiff s seeking direct production of materials for discovery purposes (whether or not those materials had been produced in U.S. litigation).
While this is simply one narrow issue – the extent to which Canadian courts will permit their plaintiff s to seek access to discovery materials abroad, and the extent to which U.S. courts will receive them – it is nonetheless useful in discussing the interplay of comity and territoriality in an age of corporate crackdowns.
Returning to the concepts of comity, sovereignty, territoriality, order, and fairness developed by the Supreme Court, one might ask whether much has changed with respect to those concepts in the sixteen years since La Forest J. wrote his reasons in Morguard. Have the concepts been changed to reflect the modern times, and in particular, the modern regulatory environment of corporate crackdowns?
In a word, no. The concepts have not been significantly developed since Morguard was written. What has changed is the application of the principles to new areas of law and to new circumstances. And in the application of those concepts, it cannot be said that the courts have elevated one concept or another to a status that will dictate similar results in all cases. To the contrary, it appears that comity can result in a domestic court barring a domestic class action in favour of a foreign judgment, while not preventing a domestic court from asserting jurisdiction over non-resident class members. Comity can be invoked to provide some protection, albeit not blanket protection, to the foreign constitutional rights of a target of criminal and regulatory investigations. Meanwhile, comity will prevent the application of the Charter in investigations conducted by foreign governments abroad.
In short, comity and territoriality serve as tools for a court seeking to ensure the effective prosecution of alleged corporate wrongdoers – whether by governmental agencies or by private litigants. And in this regard, it may be that practicality should triumph over doctrinal coherence. The doctrine of "comity if necessary, but not necessarily comity" may be the necessary doctrine to ensure effective redress of alleged corporate wrongdoing.
1. Both of Bennett Jones LLP (Toronto). The authors acknowledge the assistance of Sarah Crowe, an articling student at Bennett Jones, for her assistance in researching matters covered in this paper. The authors are grateful to Arthur Peltomaa of Bennett Jones for his valuable comments on a draft of this paper. Any errors or omissions are, of course, those of the authors.
2. Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 at 1095.
3. Morguard Investments, supra note 2 at 1096.
4. Morguard Investments, supra note 2 at 1096 citing Estey J. in Spencer v. The Queen, [1985] 2 S.C.R. 278 at 283.
5. Braintech Inc. v. Kostiuk (1999), 171 D.L.R. (4th) 46 (B.C.C.A.) at para. 54, leave to appeal to S.C.C. dismissed, [1999] S.C.C.A. No. 236; Wilson v. Hull (1995), 128 D.L.R. (4th) 403 (Alta. C.A.); Moses v. Shore Boat Builders Ltd. (1993), 106 D.L.R. (4th) 654 (B.C.C.A.) at para. 23, leave to appeal to S.C.C. dismissed, [1994] 1 S.C.R. xi; Oz Optics Ltd. v. Dimensional Communications Inc., [2004] CarswellOnt 4551 (S.C.J.) at para. 30.
6. Ingenium Technologies Corp. v. McGraw-Hill Cos. (2005), 255 D.L.R. (4th) 499 (B.C.C.A.) at para. 11; Blinds to Go Inc. v. Harvard Private Capital Holdings Inc. (2003), 232 D.L.R. (4th) 340 (N.B.C.A.) at para. 24; Mllenbeck v. Ford Motor Co. of Canada (2000), 13 C.P.C. (5th) 287 (B.C.C.A.) at para. 9; Craig Broadcast Systems Inc. v. Frank N. Magid Associates Inc. (1998), 155 D.L.R. (4th) 356 (Man. C.A.) at para. 17; Folkes v. Greensleeves Publishing Ltd. (1997), 76 C.P.R. (3d) 359 (Ont. Gen. Div.) at para. 17; Cook v. Parcel, Mauro, Hultin & Spaanstra, P.C. (1997), 143 D.L.R. (4th) 213 (B.C.C.A.) at para. 38; ABB Power Generation Inc. v. CSX Transportation (1996), 47 C.P.C. (3d) 381 (Ont. Gen. Div.).
7. L. Collins, "Foreign Relations and the Judiciary" (2002), 51 I.C.L.Q. 485 at 504. Collins is not the only critic of the concept: see M. D. Ramsey, "Escaping 'International Comity'", (1997-1998) 83 Iowa L. Rev. 891; L. Weinberg, "Against Comity", (1991-1992) 80 Geo. L.J. 53; and see the discussion in E. Robertson, "Comity Be Damned: The Use of Antisuit Injunctions against the Courts of A Foreign Nation", 147 U. Pa. L. Rev. 409 (1998-1999).
8. 26327602 Que. Inc. v. Pizza Pizza Canada Inc., [1991] R.J.Q. 2951 (S.C.), aff'd (1993), 103 D.L.R. (4th) 45 (Que. C.A.). The trial judge's decision was sharply criticized as "bad practice" by the Supreme Court in Hunt v. T&N plc, [1993] 4 S.C.R. 289.
9. Pizza Pizza, ibid. at para. 6.
10. Arab Banking Corp. v. Coopers & Lybrand, [1996] Q.J. No. 1436 (S.C.), aff'd [1997] A.Q. No. 77 (C.A.). 11. [1993] 1 S.C.R. 897.
12. Hunt, supra note 8.
13. Holt Cargo Systems Inc. v. ABC Containerline N.V. (Trustees of ), [2001] 3 S.C.R. 907; Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 S.C.R. 205.
14. [2003] 3 S.C.R. 416.
15. Beals, ibid. at 436-437.
16. Ibid. at 437.
17. Ibid. at 441.
18. See, e.g., J. Walker, "The Great Canadian Comity Experiment Continues" (2004), 120 Law Quarterly Review 365.
19. Government of India (Ministry of Finance) v. Taylor, [1955] A.C. 491 (H.L.).
20. J. Walker, "Foreign Public Law and the Colour of Comity: What's the Difference Between Friends", 38 Can. Bus. L.J. 36 at 54.
21. Morguard Investments, supra note 2 at 1078.
22. R. v. Cook, [1998] 2 S.C.R. 597 at 618.
23. For a useful discussion, see, N. Passas, "Globalization and Transnational Crime: Effects of Criminogenic Asymmetries" in P. Williams and D. Vlassis (eds.), Combating Transnational Crime (London: Frank Crass, 2001) at 22-56.
24. This is particularly the case in the absence of international treaties or agreements on crossborder law enforcement. On this point, see R. Godson and P. Williams, "Strengthening Cooperation Against Transnational Crime: A New Security Imperative," in P. Williams and D. Vlassis (eds.), Combating Transnational Crime (London: Frank Crass, 2001). at 321-356. J.C. Coffee, Jr., "Racing Towards the Top?: The Impact of Cross-Listings and Stock Market Competition on International Corporate Governance" (2002), 102
25. Colum. L. Rev. 1757, at pp. 1770-1772; TSX Review (Dec. 1996), p. 55.
26. It should be obvious that this article is referring to "transnational" crime, being crime that involves acts, perpetrators, or victims that cross borders. This may be slightly more encompassing than the United Nations' definition of "transnational crime", being "offences whose inception, prevention and/or direct or indirect effects involved more than one country.": Fourth United Nations Survey of Crime Trends, and in all events, this is to be distinguished from "international crime" such as that which attracts the interest of the International Criminal Court. For a discussion, see G.O.W. Mueller, "Transnational Crime: Definitions and concepts", in P. Williams and D. Vlassis (eds.), Combating Transnational Crime (London: Frank Crass, 2001).
27. R.S.O. 1990, c. s.5.
28. Canadian/U.S. Memorandum of Understanding, January 7, 1998, (1988), 11 O.S.C.B. 114; International Organization of Securities Commissions Multilateral Memorandum of Understanding (2002), 26 O.S.C.B. 7157.
29. [2006] O.J. No. 1768 (S.C.J.).
30. (2005), 255 D.L.R. (4th) 233 (Ont. S.C.J.), aff'd (2005), 79 O.R. (3d) 70 (C.A.).
31. (2005), 261 D.L.R. (4th) 591 (Ont. C.A.).
32. [1995] 3 S.C.R. 562.
33. Harrer, ibid. at p. 569.
34. Ibid. at 566.
35. Ibid. at 571.
36. Ibid. at 574.
37. Harrer, supra note 32 at 574.
38. Ibid. at 575.
39. [1996] 2 S.C.R. 207.
40. Terry, ibid. at 213.
41. Ibid. at 215.
42. Terry, supra note 40 at 217.
43. Cook, supra note 22.
44. Cook, ibid. at 616.
45. A useful discussion of these issues can be found in H.P. Glenn, "The Bre-X Affair and Cross-Border Class Actions" (2000), 79 Cdn Bar Rev. 280.
46. E. Snow, "Protecting Canadian Plaintiff s in International Class Actions: The Need for a Principled Approach in Light of Currie v. McDonald's Restaurants of Canada Ltd." 2(2) Cdn Class Action Rev. 217 (Dec. 2005).
47. [2005] O.J. No. 506 (C.A.).
48. Currie, supra note 49 at para. 15.
49. Class Proceedings Act, S.A. 2003, c. C-16.5, s. 17(1)(b); Class Proceedings Act, R.S.B.C. 1996, c.50, s. 16(2); The Class Actions Act, S.S. 2001, c. C-12.01, s. 18(2); Newfoundland and Labrador Class Actions Act, SNL2001, c. C-18.1, s. 17(2))
50. Still, the court did consider whether it should only recognize foreign judgments where the foreign court required non-residents to "opt in", and concluded that this was not an invariable requirement: Currie, supra at para. 29.
51. This point has other criticisms as well, as discussed in Snow, "Protecting Canadian Plaintiffs", supra note 47.
52. [2005] Q.J. No. 9805 (S.C.).
53. One author has commented that the "economic rewards" of class actions to Canadian counsel will flow instead to the U.S. class actions bar: R. Slepchik, "Heightening Security at the Border: Addressing the Enforcement of Foreign Class Actions", 2(2) Cdn Class Action Rev. 307, at p. 310. Whether that is a legitimate concern that should affect judicial sentiment is a topic best left for another article.
54. Slepchik, supra at pp. 310-311. If such concerns become paramount, quare whether such concerns could be equally applied at the interprovincial level, where there are clear differences between certain of the legislative regimes. In Ontario, for example, the representative plaintiffs must have a cause of action against each and every named defendant. Not so in British Columbia. Would such a difference preclude recognition of a B.C. judgment embracing Ontario class members?
55. Arguably. Given that successful class counsel can obtain multipliers of their fees in a cost award against an unsuccessful defendant in Ontario, additional class actions (if all successful) could increase transaction costs to the defendant. However, the Ontario portion of an international class action may be so small that it would be prohibitive for an Ontario class action to be commenced on its own.
56. See footnote 50 above.
57. (1995), 25 O.R. (3d) 331 (Gen. Div.).
58. Nantais, ibid at 335, 347.
59. (1995), 25 O.R. (3d) 347 (Div. Ct.).
60. (1997), 29 B.C.L.R. (3d) 88 (Sup .Ct.); aff'd 82 B.C.L.R. (3d) 1; leave to appeal to S.C.C. dismissed, [2001] S.C.C.A. No. 21.
61. (1997), 43 B.C.L.R. (3d) 324 (Sup. Ct.).
62. Bittner, ibid. at para. 59.
63. (1999), 43 O.R. (3d) 441 (Gen. Div.); aff'd (1999) 46 O.R. (3d) 315 (Div. Ct.); rev'd in part allowing class certification to extend to include claims for negligent misrepresentation, (2000) 51 O.R. (3d) 236 (Ont. C.A.); leave to appeal to S.C.C. dismissed [2000] S.C.C.A. No. 660.
64. Carom, ibid. at 447.
65. McNamara v. Bre-X Minerals Ltd., 32 F. Supp.2d 920 (E.D. Tex. 1999), motion for reconsideration denied, 68 F.Supp.2d 759 (E.D. Tex 1999).
66. McNamara, ibid. at 923.
67. (1999), 45 O.R. (3d) 389 (Gen. Div.).
68. Webb, ibid.
69. (2000), 50 O.R. (3d) 219 (Gen. Div.) [Wilson].
70. Wilson, ibid. at 243.
71. (2000), 52 O.R. (3d) 20 (Div.Ct.), leave to appeal dismissed, (2001), 154 O.A.C. 198 (S.C.C.).
72. (2001), 94 B.C.L.R. (3d) 169 (S.C.), affirmed (2003), 14 B.C.L.R. (4th) 32 (C.A.).
73. (2003), 66 O.R. (3d) 112 (S.C.J.).
74. [2006] S.J. No. 9 (Q.B.).
75. See Vitapharm v. F. Hoff man. La Roche (2000), 4 C.P.C. (5th) 169 (Ont. S.C.J.).
76. 2006 CarswellOnt 2973 (S.C.J.).
77. Those same substantial differences in proving foreign law were not an impediment to certifying a class that included non-resident members in Lieberman v. Business Development Bank of Canada, 2006 BCSC 242, where it was simply accepted that foreign law could be proved with experts.
78. With defence counsel proclaiming that national class actions may possibly be a thing of the past (see F.P. Morrison et al., "The Rise and Possible Demise of the National Class in Canada", 1(1) Cdn Class Action Rev. ( January 2004) 67) and class counsel suggesting that cooperation among the plaintiffs' bar could solve the problems (see W. Branch and C. Rhone, "Chaos or Consistency? The National Class Action Dilemma" 1(1) Cdn. Class Action Rev. ( January 2004) 3).
79. With the exception of Justice Cullity's comments in Cash Store, supra. It will be interesting to see how courts will respond if an American court refuses to recognize a judgment rendered by a Canadian court that assumes jurisdiction in this manner, the courts may reconsider the appropriateness of assuming jurisdiction over the non-resident plaintiffs.
80. (2001) 6 C.P.C. (5th) 245 (Ont. S.C.J.), aff'd (2002), 212 D.L.R. (4th) 563 (Ont. Div. ct.), aff'd (2003), 223 D.L.R. (4th) 445 (Ont. C.A.), lv. to app. refused (2003), 194 O.A.C. 199 (S.C.C.).
81. Vitapharm, supra note 81. at 254.
82. Vitapharm, ibid. at 251.
83. Ultimately the case settled, and no decision was rendered by the U.S. court.
84. MDL No. 1431 (D. Minn. 2003), as cited in D. Houston and J. Pratt, "Jurisdictional Issues in International Cartel Cases: A Canadian Perspective", in Stephen G.A. Pitel, Litigating Conspiracy: An Analysis of Competition Class Actions (Toronto: Irwin Law, 2006), at p. 311.
85. 333 F.Supp.2d 333 (E.D. Pa. 2004).
86. 542 U.S. 241 (2004).