In United States Securities and Exchange Commission v. Frederick L. Sharp (2024 BCSC 1688) the Plaintiff security commission ("Commission") sought enforcement of a foreign judgment from the State of Massachusetts against the Defendant "Sharp" by summary judgment. Sharp's opposition was grounded on challenges to jurisdiction by the Massachusetts Court and arguing that he was not afforded natural justice.
In granting judgment to the Commission, the Court upheld the existing common law "real and substantial connection" test as the pertinent analysis for whether to recognize and enforce a foreign (and interprovincial) money judgment.
Sharp's submissions failed on all grounds. As to jurisdiction, the Court held that the issue to be considered is the connection between the foreign court and the cause of action/subject matter of the dispute, not necessarily the person – although that can be a factor. In terms of natural justice, the Court held that absent evidence of fraud or a violation of natural justice, its assessment ought to be restricted to the form of the foreign procedure and not the merits of the matter. Natural justice will be found if the defendant was reasonably guaranteed, inter alia basic procedural safeguards such as judicial independence and due process.
While litigants in cross-border disputes should certainly consider the benefits/drawbacks of competing jurisdictions in deciding where to commence proceedings, defendants should not knowingly ignore proceedings until they reach their doorstep, as it could prove to be a poor long-term strategy, precluding their ability to respond to the merits of the matter.
Originally published October 31, 2024
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