H.M.B. Holdings Ltd. v. Antigua and Barbuda, 2020 ONCA 122021 SCC 44 (39130)

“Antigua and Barbuda (“Antigua”), a country comprised of several islands in the Caribbean, expropriated property owned by H.M.B. Holdings Limited (“HMB”), a private company incorporated in Antigua. Litigation ensued at the Judicial Committee of the Privy Council, and Antigua was ordered to compensate HMB for the expropriation. Years later, HMB brought a common law action in British Columbia to enforce the foreign judgment in that province. Antigua did not defend the action, and as a result, HMB obtained a default judgment. HMB then commenced an application in Ontario to enforce the British Columbia judgment by having it registered under the Reciprocal Enforcement of Judgments Act (“REJA”). The application judge found that ss. 3(b) and 3(g) of the REJA — which prescribe, as conditions of registration, that the judgment debtor be carrying on business within the jurisdiction of the original court and that the judgment debtor have no good defence on the original judgment  barred registration. A majority of the Court of Appeal upheld the application judge’s conclusion on the basis of s. 3(b) alone.”

The SCC (5:0) dismissed the appeal. 

Chief Justice Wagner wrote as follows (at paras.1-2, 37-42, 44, 48-50):
 
“In this appeal, H.M.B. Holdings Limited (“H.M.B.”) seeks an order pursuant to Ontario’s Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5 (“REJA”), for the registration of a default judgment it obtained in British Columbia against Antigua and Barbuda (“Antigua”) to enforce a judgment granted by the Judicial Committee of the Privy Council awarding compensation for expropriation. The problem is one of statutory interpretation, and in particular, the interpretation and application of ss. 3(b) and 3(g) of the REJA. If either of these provisions applies, H.M.B. is barred from registering the default judgment under the REJA.

The application judge found that both provisions barred registration under the statute. A majority of the Court of Appeal of Ontario upheld the application judge’s conclusion on the basis of s. 3(b) alone. For the reasons that follow, I agree with the Court of Appeal and conclude that this appeal must be dismissed.


 

In cases involving a representative, the question of whether the representative has been carrying on the foreign corporation’s business or has been doing no more than carry on their own business will necessitate an investigation of the functions they have been performing and all aspects of the relationship between them and the foreign corporation (p. 530). In particular, the following questions are relevant to the assessment of whether the representative has been carrying on the foreign corporation’s business:

  • (a)   whether or not the fixed place of business from which the representative operates was originally acquired for the purpose of enabling them to act on behalf of the foreign corporation;
  • (b)   whether the foreign corporation has directly reimbursed the representative for the cost of their accommodation at the fixed place of business and the cost of their staff;
  • (c)   what other contributions, if any, the foreign corporation makes to the financing of the business carried on by the representative;
  • (d)   whether the representative is remunerated by reference to transactions (e.g., by commission), by fixed regular payments or in some other way;
  • (e)   what degree of control the foreign corporation exercises over the running of the business conducted by the representative;
  • (f)    whether the representative reserves part of their accommodation and part of their staff for conducting business related to the foreign corporation;
  • (g)   whether the representative displays the foreign corporation’s name at their premises or on their stationery, and if so, whether the representative does so in a way as to indicate that they are a representative of the foreign corporation;
  • (h)   what business, if any, the representative transacts as principal exclusively on their own behalf;
  • (i)     whether the representative makes contracts with customers or other third parties in the name of the foreign corporation or otherwise in such manner as to bind it; and
  • (j)     if so, whether the representative requires specific authority in advance before binding the foreign corporation to contractual obligations (pp. 530-31).

Lord Justice Slade further held that even this list of questions is not exhaustive and that the answer to any of them is not necessarily conclusive as to whether a representative has been carrying on a foreign corporation’s business in a certain jurisdiction (p. 531).

In Chevron, this Court followed the Adams approach and explained how the term “carrying on business”, as part of traditional presence-based jurisdiction at common law, should be interpreted in Canada. Gascon J., writing for the Court, stated the following:

  • To establish traditional, presence-based jurisdiction over an out-of-province corporate defendant, it must be shown that the defendant was carrying on business in the forum at the time of the action. Whether a corporation is “carrying on business” in the province is a question of fact. In Wilson, in the context of statutory registration of a foreign judgment, the Alberta Court of Appeal was asked to assess whether a company was carrying on business in the jurisdiction. It held that to make this determination, the court must inquire into whether the company has “some direct or indirect presence in the state asserting jurisdiction, accompanied by a degree of business activity which is sustained for a period of time”. These factors are and always have been compelling indicia of corporate presence; as the cases cited in Adams v. Cape Industries Plc., [1990] 1 Ch. 433 [Ch. Div.], at pp. 467-68, per Scott J., demonstrate, the common law has consistently found the maintenance of physical business premises to be a compelling jurisdictional factor. LeBel J. accepted this in Van Breda when he held that “carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there”. [Emphasis added; citations omitted; para. 85.]

It should be noted that the term “carrying on business” appeared in Van Breda as a presumptive connecting factor in the tort context for the purposes of assumed jurisdiction. Although this Court in Chevron cited Van Breda for the meaning of that term in the context of traditional presence-based jurisdiction, it is important to remember that traditional presence-based jurisdiction is an independently sufficient ground of jurisdiction that operates alongside the assumed jurisdiction of Van Breda (para. 79). If the term “carrying on business” held the same meaning in both contexts, this would create overlap between the two tests (see Pitel and Rafferty, at p. 94). If a corporate defendant were carrying on business in a jurisdiction such that a plaintiff could simply serve that defendant in juris and establish traditional presence-based jurisdiction, it is not clear why that plaintiff would ever try to establish “carrying on business” as a mere presumptive connecting factor going to assumed jurisdiction. This suggests that “carrying on business” as it appears in Van Breda, as a mere presumptive connecting factor for assumed jurisdiction, may be a less onerous standard than “carrying on business” for the purpose of establishing traditional presence-based jurisdiction.

I need not decide here whether the term “carrying on business” as it appears in Van Breda carries the same meaning as in the case law on traditional presence-based jurisdiction. However, it is safe to say that if the Van Breda standard is different, it is lower. In any event, the Van Breda requirements for “carrying on business” must also apply for the purposes of traditional presence-based jurisdiction. In Chevron, this Court recognized as much by quoting LeBel J.’s remark that “carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there”, in describing what it means to “carry on business” for the purposes of presence-based jurisdiction.

Chevron thus provided a clear definition of “carrying on business” as part of traditional presence-based jurisdiction at common law. For the reasons given above, this informs the interpretation of s. 3(b) of the REJA. In sum, to determine whether a defendant is carrying on business in a jurisdiction, the court must inquire into whether it has some direct or indirect presence in the jurisdiction, accompanied by a degree of business activity that is sustained for a period of time. Whether or not a corporation is “carrying on business” is a question of fact, and in order to determine whether this definition is met, the court should consider the 10 Adams indicia listed above. And some kind of actual presence, whether direct or indirect, is required. A physical presence in the form of maintenance of physical premises will be compelling, and a virtual presence that falls short of an actual presence will not suffice.

I am therefore unpersuaded by H.M.B.’s argument that the courts below erred in failing to interpret “carrying on business” in a “generous and liberal” manner in accordance with ChevronChevron itself affirms the test for carrying on business for the purposes of traditional presence-based jurisdiction. Section 3(b) of the REJA refers to the meaning of the term for those same purposes. As a result, the “generous and liberal” approach from Chevron does not modify the test for “carrying on business” in s. 3(b), as it is set out in Chevron itself.



In my view, there is no error of law in the application judge’s interpretation of s. 3(b) of the REJA, nor is there any palpable and overriding error in his assessment of whether Antigua was carrying on business in British Columbia.


 

In concluding that Antigua was not carrying on business in British Columbia, the application judge made the following five main findings of fact: (1) Antigua had no physical presence in British Columbia; (2) Antigua did not carry on any sustained business activity in British Columbia; (3) the four Authorized Representatives were not agents or Authorized Agents of Antigua; (4) the four Authorized Representatives were carrying on their own businesses that were independent of the businesses of the Antiguan government; and (5) the CIP had no particular focus on British Columbia or Canada; since its inception, there had been 1,547 applications for the program but only 9 of them had been from persons born in Canada (paras. 52 and 54).

All five of these findings of fact are supported by the evidentiary record and are without error. They are considerations that the trial judge weighed in coming to his conclusion that Antigua was not carrying on business in British Columbia. As the majority of the Court of Appeal held, the application judge clearly considered a number of factual circumstances before arriving at his conclusion, and in the absence of any palpable and overriding error, that conclusion is owed deference. I would uphold the application judge’s conclusion on this basis, without deciding the issue of whether offering citizenship in exchange for investment amounts to a “business” activity at all. Given the application judge’s other findings of fact in this case, it is unnecessary to consider this issue and I would decline to do so. In the result, s. 3(b) of the REJA bars H.M.B. from registering the British Columbia Judgment in Ontario under the statute. In light of this finding, it is unnecessary to consider whether s. 3(g) also bars H.M.B. from registering the British Columbia Judgment under the REJA, and I would decline to do so.”