## Facts

- Ontario residents agreed to sell Florida land to purchasers; due to a lot-number error, the purchasers built on a lot they did not own.
- The purchasers sued in Florida for rescission and damages relating to the Florida land transaction.
- The defendants initially defended but failed to respond to amended pleadings; under Florida procedure, they were treated as not defending the action and were noted in default.
- A Florida jury awarded US$210,000 compensatory damages and US$50,000 punitive damages; with interest and costs, the award later exceeded US$800,000.
- Relying on legal advice that the Florida judgment was unenforceable in Ontario, the defendants did not seek to set aside the default or appeal in Florida.
- The purchasers sued in Ontario to recognize and enforce the Florida judgment; one defendant asserted bankruptcy and discharge as a bar to liability.

## Issues

1. Whether the “real and substantial connection” test governs recognition and enforcement in Canada of judgments from foreign (non-Canadian) courts.
2. Whether enforcement was barred by any of the defences of fraud, denial of natural justice, or public policy.
3. Whether enforcement of a foreign civil money judgment against Canadian residents is barred by s. 7 of the Canadian Charter of Rights and Freedoms.
4. Whether one defendant’s Canadian bankruptcy and discharge prevented enforcement of the Florida judgment against her.

## Decision

- The Supreme Court of Canada, by a 6–3 majority, dismissed the appeal and enforced the Florida judgment in Ontario.
- The Court held that the real-and-substantial-connection test applies to foreign judgments and was satisfied because the dispute concerned Florida land and a Florida transaction litigated in Florida.
- The Court rejected the defences of fraud, natural justice, and public policy as not made out on the record.
- The Court held that s. 7 of the Charter did not bar enforcement of the foreign civil judgment.
- The Court did not accept bankruptcy and discharge as defeating enforcement in the circumstances.

## Legal Principles

- A foreign judgment is generally enforceable in Canada if the foreign court properly assumed jurisdiction, assessed by a real and substantial connection between the forum and the action or the defendant.
- Defences to enforcement are narrow and include:
  - Fraud: typically limited to extrinsic or newly discovered fraud not reasonably discoverable with due diligence before the foreign judgment; it is not a vehicle to re-argue the merits (including damages quantum).
  - Natural justice: focuses on procedural fairness (notice and meaningful opportunity to be heard), not substantive correctness; a defendant’s failure to participate, despite notice of the proceeding, generally will not establish the defence.
  - Public policy: applies only where enforcement would offend fundamental morality or basic legal values; a large award alone, including punitive damages and accrued interest, will not necessarily meet this threshold.
- Charter s. 7 is not ordinarily engaged by enforcement of a foreign civil debt judgment absent a deprivation of life, liberty, or security of the person contrary to fundamental justice.

## Conclusion

The Court enforced a Florida default judgment in Ontario, extending the real-and-substantial-connection framework to foreign judgments and confirming that fraud, natural justice, and public policy defences are exceptional and narrowly applied, with Charter s. 7 providing no general bar to enforcement of foreign civil money judgments.


Beals v. Saldanha, [2003] 3 S.C.R. 416 (Can. 2003)