Private International Law – Prof. Walsh Summer 2005

Case Law

• 
  Traditional CML basis for foreign court recognition were
  

(2) submission to choice of court by contract or attornment.

• 
  Morguard adds third basis: (3) real and substantial connection to the foreign jurisdiction.
  
• 
  Within Can it’s setttled that courts have to, based on Constitutional imperative, give full faith and credit to sister province’s judgment. This is first put in Morguard, then affirmed in Hunt and most recently in Beals.
  
• 
  Expansion in doctrine of recgonition goes beyond sister province recognition but extends to US, European courts, etc. This is expansion of CML doctrine of intl comity and idea that Can should be open to respecting foreign judgments – provided there’s significant connection and other basis is met.
  
• 
  BUT we’re left w/ uncertainty w/ regards to the actual meaning of the connection.
  

• 
  De Savoye mortgaged lands from Morguard when he lived in AB. Then moved to BC.
  
• 
  Mortgages fell into default and Morguard took action in AB
  
• 
  De Savoye did not respond to actions (no attornment nor defense). Mortgage K did not specify jurisdiction.
  
• 
  In De Savoye’s absence, Morguard got property back and got judgments against DS for difference btwn value of property and the amount owing on the mortgages.
  
• 
  M then brought separate action in BC SC to enforce AB judgment. It was granted and reinforced in Court of Appeal
  

• 
  “Modern states cannot live in splendid isolation…The content of comity therefore must be adjusted in the light of a changing world order.”
  
• 
  Bc jur’n is territorial, a state’s law has no binding effect outside it’s jur’n. But modern states cannot live in isolation and do give effect to judgments given in other countries in certain circumstances. This is the basis for comity.
  
• 
  Comity is based on respect for foreign sovereign, justice, necessity, and convenience. It must be adjusted as times change.
  
• 
  Definition of comity:“‘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.” (Hilton v. Guyot, 159 U.S. 113 (1895))
  
• 
  The principles of order and fairness must underlie a modern system of private international law.
  
• 
  Courts made serious error in transposing rules developed for enforcement of foreign international judgments to enforcement of judgments of sister provinces. They contradict Constitution’s intentions to create single country w/ common market and citizenship
  
• 
  “The considerations underlying the rules of comity apply with much greater force between the units of a federal state… the 19^th Century English rules seem to fly in the face of the obvious intention of the Constitution to create a single country.”
  
• 
  This goal speaks to a strong need to enforce throughout the country the judgments given in one province.
  
• 
  Cannot argue for differential quality of justice among provinces since all judges are federally appointed and subject to review by the SCC, which determines when jur’n is overstepped and when to recognize judgments of one prov.
  
• 
  “The courts in one province should give full faith and credit, to use the language of the United States Constitution, to the judgments given by a court in another province or a territory, so long as that courts has properly, or appropriately, exercised jurisdiction in the action.”
  
• 
  “There does not see to be any compelling reason against recognizing a jurisdiction which the forum itself claims.” (JG Castel, “Recognition and Enforcement of Judgments…” McGill LJ (1971))
  
• 
  “If it is fair and reasonable for the courts of one province to exercise jurisdiction over a subject-matter, it should as a general principle be reasonable for the courts of another province to enforce the resultant judgment.”
  
• 
  Given proper jurisdiction, a judgment can be recognized or enforced in another province…but this presumption must still be weighed against fairness to the Df.
  
• 
  Order and fairness necessarily implies finding a connection btwn jur’n, Df and subject-matter of the suit.
  
• 
  Thus, in broadening the recognition and enforcement of judgments from other provinces there must be restraint to the exercise of jurisdiction. That limit is found in the real and substantial connection of the prov w/ the action.
  
• 
  There can also be other discretionary techniques that can be used by courts to refuse jurisdiction where contact with the jurisdiction is tenuous or where entertaining the proceedings would create injustice. These are notably the doctrine of forum non conveniens and the power of a court to prevent an abuse of its process
  
• 
  There may also be other remedies available to the defendant in the recognizing court such as fraud or conflict with the law or public policy of the recognizing jurisdiction. There may also be room for the operation of s. 7 of the Charter.
  

• 
  Here, action was in AB and rightly so, so there was R&S connection btwn the damages suffered and the jur’n.
  
• 
  Bc AB had proper jur’n, its judgment should be recognized and enforced in BC.
  

• 
  The principles of order and fairness underlie modern Private International Law. They serve to ensure justice through the balance of the security of transactions and fairness to the parties involved.
  
• 
  It is anarchic and unfair that a person should be able to avoid legal obligations in one province by moving to another.
  
• 
  Considerations underlying rules of comity apply with greater force between the units of federal state (i.e. between sister provinces and territories).
  
• 
  The obvious intention of the Constitution was to create a single country with a common market and common citizenship.
  
• 
  It is a constitutional imperative that courts in one province give “full faith and credit” to judgments of the courts of other provinces so long as those courts have properly or appropriately exercised jurisdiction in the action. If it is reasonable to support the exercise of jurisdiction in one province, then it is reasonable that the judgment be recognized in other provinces.
  
• 
  But proper jurisdiction demands that there be a real and substantial connection between the damages and the jurisdiction or the Df and the jurisdiction. This is the only requirement then for recognition and enforceability of sister province judgments.
  
• 
  Nonetheless, several defenses remain that could be invoked to refuse to recognize a sister province judgment. These are notably,
  

1. 
   the doctrine of forum non conveniens,
   
2. 
   the power of a court to prevent an abuse of its process,
   
3. 
   fraud,
   
4. 
   conflict with the law or public policy of the recognizing jurisdiction, or
   
5. 
   possibly s. 7 of the Charter.
   

• 
  This is clear case of recognizing sister province’s judgment. There are no foreign elements except that the debtor had moved to BC by the time that the process was served and the judgment made.
  
• 
  Mortgage taken at time when there was boom in real estate mkt. Followed by chilling crash. So Bank unable to recover its loan when it resold the repossessed land. So it sued to recover the resulting deficiency to satisfy the debt.
  
• 
  By this point, Df had moved to BC, so lender need BC courts to give effect to AB judgmt to get his $$$.
  
• 
  Traditional CML doctrine, if applied to the facts, would not allow BC courts to recognize the AB judgment.
  
• 
  Lender could not rely on residence or presence, nor had there been submission (by K or attornment) of served order
  
• 
  Lender had not thought to put a choice of court agreement in the mortgage K (now they do!)
  
• 
  If there was ever case crying out for expansion in CML doctrine this was it!
  
• 
  If recognition was refused, the result would be that by moving to very next province one could leave behind debts. This would be difficult policy result.
  
• 
  BC courts had made previous murmurings that they were prepared to look for weakness in CML doctrine. Hence council for lender willing to go ahead with case. LaForest follows the lead of BC courts.
  
• 
  Broad policy thinking that goes thru LaForest’s decision is one we can be sympathetic to particularly w/ these facts
  
• 
  Talks of how judges are appointed federally, how constitution and other legislation that all point to idea of justice.
  
• 
  But leaves a lot of qns unanswered.
  

• 
  Initial view coming out of Morguard was that R&S connection (bt foreign jur’n and subject matter of the claim) was third basis for recognition, added to the previous two rules. That structure is more or less reflected in the CCQ.
  
• 
  Overarching idea of R&S connection is one of order and fairness.
  
• 
  This makes us re-evaluate idea of physical presence as sufficient. Particularly transient physical presence (e.g. the plane going over Arkansas). So we must have a more rigorous requirement than mere physical presence.
  

• 
  Beals and Parsons cases have different interpretation of jurisdictional approach.
  
• 
  They result in there being 2 over-arching principles: (1) order and fairness and (2) real and substantial connection
  
• 
  Question is if they are complimentary or self-sufficient.
  

• 
  Hunt works in BC and suffers from cancer he alleges was caused by asbestos originating in Qc and sold by Df
  
• 
  Hunt sued Qc companies in BC for damages. In doing so, he req’d docs relating to the action. Docs were in Qc.
  
• 
  Qc Business Concerns Records Act prohibits removal from prov of docs relating to business concern in Qc pursuant to requirement of judicial authority outside the province. So Df did not hand over any documents
  
• 
  Hunt served demands for discovery of docs under Rule 26(1) of BC Rules of Court. Df said Qc Act prevented compliance. Hunt insisted but BC courts allowed such “lawful excuse” to not comply w/ judicial demands.
  
• 
  BC courts acted on basis that Qc Act was valid and BC courts had no jur’n over constitutional validity of Qc statute
  

• 
  Courts should have considered constitutional validity of Act. Conflict of laws doesn’t prevent questioning constitutionality of the laws of another jurisdiction.
  
• 
  The issue of what is foreign law is a matter of fact to be determined by the trial court. Determining constitutionality falls within this determination of material facts. That other jur’n is another Can prov abiding by same constitution only reinforces this idea.
  
• 
  However, courts should only hear constitutionality challenges to legislation of other province when it’s incidental to the litigation and only where there’s real interest affected in their province. Otherwise, forum non conveniens would militate against jurisdiction over the constitutional dispute.
  
• 
  The SCC is also not bound by the powers of the court from which it receives an appeal. It may exercise its plenary jurisdiction and powers in hearing a case, no matter where it originates.
  
• 
  Recognition and enforcement of other province’s judgments should be taken in light of Canadian legal interdependence
  
• 
  “The old CML rules relating to recognition and enforcement were rooted in an outmoded conception of the world that emphasized sovereignty and independence, often at the cost of unfairness.”
  
• 
  Greater comity is req’d in our modern era when intl transactions involve constant flow of products, wealth and ppl
  
• 
  Plus, inherent in Can federation that courts in e/ prov should give “full faith and credit” to judgments of other provs
  
• 
  Prov can enact laws that affect litigation in other prov but it must respect minimum standards of order and fairness.
  
• 
  This statute’s purpose is not to keep docs in prov but to impede successful litigation in other jur’ns by refusing recognition and compliance with orders issued there. This runs counter to comity!
  
• 
  Since courts are constitutionally constrained to take jurisdiction only where there are real and substantial connections to that place, the Qc Act is an anachronism that is inimical to interprovincial litigation if applied on interprovincial level.
  
• 
  At practical level this statute impedes courts from assuming full jurisdiction even when there are real and substantial connections.
  

• 
  Courts can determine the constitutionality of foreign laws, but only when it is incidental to the litigation and there is a real interest affected in their province.
  
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  Guiding element in determination of an appropriate forum must be principles of order and fairness.
  
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  Comity (i.e. minimum standards of order and fairness) must be respected when enacting legislation that affects litigation in other provinces.
  
• 
  
  

• 
  Qc Act constitutionally inapplicable to other provinces and to this case. This is because full faith and credit supposedly extends to the court order to furnish evidence in BC.
  
• 
  This case reinforces several of the principles put forward in Morguard:
  

1. 
   Canadian courts are constitutionally required to give full faith and credit to other provinces’ judgments.
   
2. 
   Order and fairness underpin all questions of PrIL, including jur’n and effect of foreign judgments.
   
3. 
   Real and substantial connection is constitutionally required in order to assume jurisdiction.
   
4. 
   Forum non conveniens operates as a further limit on real and substantial connection.
   

• 
  Hunt also seemed to state that unfairness of process would not be a defense to recognizing interprovincial judgments. At least, it suggest that those issues are to be addressed in an appeal in the original province’s courts.
  
• 
  It is also noted that the powers of the SCC are plenary no matter how the court is invoked.
  
• 
  There is also an interesting aside about how the federal government should be able to legislate in the area of PrIL under trade and commerce, citizenship, other headings, and POGG.
  

• 
  Saldanha is resident of Ont. He sold vacant lot in Fla to Beals.
  
• 
  In ’86, B sued S in Fla. Case underwent many amendments.
  
• 
  S filed original defense but did not respond to amendments and wasn’t notified of the amendments. In Florida law, these amendments required the refilling of a defense.
  
• 
  Jury awarded awarded B >US$200K by default judgment.
  
• 
  Ont lawyer advised S that foreign judgment could not be enforced in Ont. So S took no steps to contest or appeal in Florida.
  
• 
  Damages weren’t paid and B started an action in Ont to enforce Fla judgment. Bc of interest and other amendments, damages now at approx. US$800K
  

• 
  “Subject to the legislatures adopting a different approach, the “real and substantial connection” test, which has until now only been applied to interprovincial judgments, should apply equally to the recognition and enforcement of foreign judgments.”
  
• 
  Thus, foreign judgments are enforceable if significant R+S connection exists bt cause of action + foreign court.
  
• 
  Here such a connection exists bt Fla jur’n, subject matter of action and the Df.
  
• 
  Since Fla court properly took jur’n its judgment must be recognized and enforced by domestic court unless there’s a defense that bars enforcement.
  
• 
  There are 3 such defenses: (1) fraud (2) natural justice (3) public policy
  

(2) Natural justice: restricted to form of the foreign procedure and to due process. This does not relate to merits of the case. Had the procedure not been in accordance w/ Can’s concept of natural justice, judgment would have been rejected. S did not raise reasonable apprehension of unfairness. S was given fair opportunity to respond to Fla action but chose not to because of negligent legal advice. That negligence cannot preclude enforcement of B’s judgment.

• 
  s. 7 was rejected as a possible defense against the financial effects of a judgment, whether domestic or foreign.
  

• 
  Agree that R&S connection test is appropriate conceptual basis for enforcement of final foreign judgments
  
• 
  Here, Fla did have jur’n, but important q’n is whether S were sufficiently informed to determine if they should participate in it or let it go by default.
  
• 
  Natural justice defense applies bc B’s complaint didn’t adequately convey to S importance of decision to be made and the case was subsequently transformed by the amendments.
  
• 
  Cumulatively, events show an unfair procedure which in this case failed to meet standards of natural justice. Fla court did not take adequate steps to inform S what default of pleading entailed and this is heart of the appeal.
  
• 
  Canadian resident cannot be presumed to know the law of another jur’n.
  
• 
  S also not told that B settled w/ other parties in Fla and had other recourses to object to headings of liability (e.g. punitive damages), leaving S as sole target at damages trial.
  

• 
  R&S connection test needs modification when applied to judgments outside Canadian federation.
  
• 
  Propriety of foreign court’s jur’n should be carried out in way that acknowledges additional hardship put on Df who is required to litigate in foreign country. Purposive, principled framework should also not be confined questions of jurisdiction
  
• 
  “Liberalizing the jurisdiction side of the analysis while retaining narrow, strictly formulated categories on the defence side is not a coherent approach.”
  
• 
  Jur’n test itself should be applied so assumption of jur’n won’t be recognized if unfair to the Df.
  
• 
  Comity as obligation bt sovereign nations not same as bt prov. Bc of contextual and purposive approach, rules of recognition and enforcement of foreign country judgments should carefully reflect realities of intl context and calibrated w/ objective of faciliting intl interactions. However, This does not mean that they should be as liberal as the interprovincial rule.
  
• 
  Hence there is a need for necessary connections to be applied more strictly, in way that gives due weight to protection of Can Df w/out disregarding legitimate interests of foreign claimants.
  
• 
  “This approach is consistent with both the flexible nature of international comity as a principle of enlightened self-interest rather than an absolute obligation, and the practical differences between the international and interprovincial contexts.”
  
• 
  Sway rests on connection being strong enough to make it reasonable for Df to be expected to litigate there.
  
• 
  The greater the burden on the defendant to litigate in the foreign jurisdiction, the stronger the connection must be.
  
• 
  To treat foreign judgmt equally to one from another prov fails to account for differences bt interprovincial and intl contexts and does not reflect diff bt assuming jur’n and enforcing foreign judgment.
  
• 
  Accordingly, the defences to effects of foreign judgments should also be made more generous – e.g. fraud could still be pleaded even if it was previously discoverable if the default of the defendant was demonstrably reasonable.
  
• 
  In this case, even the more generous public policy and fraud defences are not made out, but natural justice defence is bc S was not given sufficient notice of extent and nature of claims against him.
  
• 
  Has policy concern that enforcement of this judgment would shock conscience of Canadians, since Fla Pl appears to have taken adv of S’s difficult position to pursue interests as aggressively as possible and secure sizeable damage awards. Implication of majority is that Can Dfs are now obliged to participate in foreign lawsuits no matter how meritless, on pain of potentially devastating consequences from w. Can courts will be powerless to defend them
  

• 
  “R&S connection” test should apply equally to recognition and enforcement of foreign judgments. Test requires that significant connection exist btwn cause of action and the foreign court. (Not necessarily defendant and foreign court.)
  
• 
  3 defenses to recognition of foreign judgment when the R&S connection test met: (1) fraud, (2) natural justice and (3) public policy. All carry high burden of proof.
  

• 
  Binnie Dissent: judgment based on inadequate notice is violative of natural justice and default judgment that rests on such an unfair foundation should not be enforced.
  
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  LeBel Dissent: R&S connection test must be applied + strictly in foreign judgment cases. To not do so fails to account for differences bt interprovincial and intl contexts and does not reflect diff bt assuming jur’n and enforcing foreign judgment.
  

• 
  Binnie’s dissent puts extra pressure on foreign court to ensure non-resident is aware of laws. Is this buden too high?
  
• 
  LeBel’s dissent makes R&S connection test very flaky and malleable for foreign judgments.
  
• 
  “Subject to the legislatures adopting a different approach” probably tries to leave the door open to CCQ’s differences from CML jurisdictions or the enactment of reform legislation. In international sphere, sovereignty still applies and trumps comity.
  

• 
  For testing jur’n of foreign courts, we must apply R&S connection test. The test is satisfied in a variety of ways: residence of Df, subject matter connection, and even consent or submission
  

¶37 (Major) “A real and substantial connection is the overriding factor in the determination of jur’n. The presence of more traditional indicia of jur’n (attornment, agreement to submit, residence and presence in the foreign jur’n) will serve to bolster the real and substantial connection to the action of the parties.”

• 
  This leaves it unclear whether R&S connection is sufficient on its own or whether it needs to be complemented. It also makes unclear whether there are other factors that suffice (w/out R&S connection) such as presence, attornment or K.
  
• 
  Even more important in this judgment is, going back to ¶29, that R&S connection test for domestic jur’n is same as test for permissible basis for foreign country jur’n.
  
• 
  This means Can will recognize foreign judgment if, based on same facts, our courts would take jur’n. Goes w/ idea of reciprocity.
  
• 
  But, this is a misuse of “reciprocity”. True reciprocity would be if foreign courts also used R+S to recognize Can judgments.
  
• 
  LeBel’s dissent objects to this idea. Concerned bc CCQ claims far more expansive jur’n for Qc courts than it is willing to concede for foreign courts.
  
• 
  LeBel additional reason for concern: that test for jur’n should also be same for domestic as for intl contexts. Thinks there should be higher threshold for recognizing intl judgment than for domestic/interprovincial ones.
  

• 
  Class action suit brought first in IL bc of fraud in McDonald’s promo game. Suit included non-resident Canadians
  
• 
  IL court directed notice of class action to Canadians by given on ads in Mclean’s and 3 Qc newspapers.
  
• 
  Currie did not participate in IL proceedings. Parsons challenged IL settlement. Both represented by same law firm.
  
• 
  Boland judgment in IL gave settlement in the US. If accepted in Ont, Currie’s proposed class action is precluded.
  
• 
  Extra info came out after settlement on how McD ordered for high value prizes not be awarded in Can.
  
• 
  Parsons action dismissed bc he had attorned to IL jur’n.
  
• 
  Trial judge would not dismiss nor stay Currie action bc, though IL court had jur’n over non-resident, non-attorned Pl class members, adequate notice given was so inadequate it violated rules of natural justice.
  
• 
  So Boland not recognized and enforced so as to bind Currie’s class action.
  

(1) Should Ont courts recognize and enforce Boland judgment against Currie and non-attorning Can class members?

(2) Did notice to Can class members satisfy the requirements of natural justice?

(3) Is Currie precluded by doctrines of res judicata or abuse of process from prosecuting his claim in Ont?

• 
  Recognizing and enforcing IL judgment approving settlement turns upon application of Morguard’s 2 principles for assessment of propriety of conflict of laws jur’n: “order and fairness” and “real and substantial connection”
  
• 
  Fairness to the party against whom enforcement is sought requires that judgment be issued by court acting through fair process and w/ properly restrained jur’n.
  
• 
  R&S connection test serves to control assertion of jur’n. It is flexible and there’s no strict or rigid test to be applied.
  
• 
  Beals adapts Morguard to intl judgments. Test used as the overriding factor in determination of jur’n; it requires a significant connection bt cause of action and the foreign court. The connection to foreign jur’n must be substantial.
  
• 
  The novel point raised in this appeal is application of R&S connection test and principle of order and fairness to unnamed, non-resident plaintiffs in intl class actions. (ouish! This is narrow!)
  
• 
  Importance of recognition of intl class action is to have claims finally resolved in one jur’n. Ont court that asserts jur’n in proper manner wants to be recognized and enforced. Comity requires that Ont law do same to foreign class action judgmts.
  
• 
  “Before enforcing a foreign (class action) judgment … [the court] should ensure that the foreign court had a proper basis for the assertion of jur’n and that interests of Ont residents were adequately protected” (i.e. R+S connection and order and fairness).
  
• 
  “To determine whether the assumption of jurisdiction satisfies the R&S connection test and the principles of order and fairness it is necessary to consider the situation from the perspective of party against whom enforcement is sought.” (here the unnamed, non-resident class members).
  
• 
  The reasonable expectations of the party against whom enforcement is sought should be considered.
  
• 
  The particular dynamics of class actions can also come into play. This forces upon the court a duty to ensure interest of Pl class members are adequately represented and protected.
  
• 
  IL court had jur’n and meets R&S connection test.
  
• 
  But principles of order and fairness are not met bc Currie Pl did nothing that could provide basis for assertion of IL jur’n, while McD Canada invited jur’n of Ont courts by carrying business there.
  
• 
  ^^ recognizing IL jur’n would be unfair to ordinary McD customer in Ont unless IL court respected procedural rights, including adequacy of representation, adequacy of notice and right to opt out, to alleviate these concerns
  

1. 
   Adequacy of representation speaks to possibility of quasi-fraud.
   

• 
  For example, accepting sharply discounted recovery rate for non-resident class members.
  

2. 
   Adequacy of notice speaks to “if it were clearly brought home to them that their rights could be affected in the foreign proceedings if they failed to take appropriate steps.”
   
3. 
   Right to opt out is a particular requirement of class actions where there are unnamed parties. In order to be meaningful, it implicates the adequacy of notice as to the opt out. Given adequate notice, however, the failure to opt out is “a form of passive attornment”.
   

• 
  Notice issue does bear upon jur’n and no adequate notice was given.
  
• 
  Ont courts should not recognize and enforce Boland judgment against Currie, but it can still impact class action suit by principle of no double recovery.
  

• 
  Agrees w/ trial judge that dissemination in Can was so woefully inadequate that IL decision offends rules of natural justice. This (and a lack of understandability) also took away right to opt out.
  
• 
  The domestic standard (as put forward in legislation) is irrelevant. What matters is the fundamental principles of justice themselves, not the letter of the rules in either system that are designed to give effect to those principles.
  
• 
  US and Can class members had similar interests at stake and there was no relevant basis upon w. IL court could have concluded that one standard of procedural fairness was appropriate for US class and another for Canadian.
  
• 
  “Natural justice surely requires that similarly situated litigants be accorded equal (although not necessarily identical) treatment.”
  

• 
  That it was same law firm for Parsons and for Currie is not important. The financial stake of the class as a whole exceeds that of the law firm and the legal rights being advanced are of the class members, not the law firm. Furthermore, Parsons would have no authority to submit their rights to the IL jurisdiction.
  
• 
  Res judicata has no bearing here. Parsons and Currie are not privies and doctrine of abuse of process is not applicable here.
  

• 
  “To determine whether the assumption of jur’n by foreign court satisfies the R&S connection test and the principles of order and fairness, it is necessary to consider the situation from perspective of party against whom enforcement is sought.”
  
• 
  Court needs to take steps to protect procedural rights of Pl class. This includes:
  

• 
  IF (a) there’s R&S connection linking cause of action to foreign jur’n, (b) rights of non-residents are adequately represented and (c) non-residents are accorded procedural fairness, THEN it may be appropriate to attach jur’n consequences to unnamed Pl’s failure to opt out. This w/ caveat that no test can be too rigidly applied and that it may be easier to justify assumption of jur’n in interprovincial cases than in intl cases.
  
• 
  Natural justice requires similarly situated litigants to be accorded equal (not necessarily identical) treatment
  

• 
  Sharpe J is one of leading judges on PrIL
  
• 
  Starts w/ order and fairness: compels us to think level of order preserving security of transactions. Stability of legal rights and their effectiveness created by that transaction. This means that we should be prepared to recognize and to give effect to a judgment rendered by another court and preserve the security of transactions.
  
• 
  Fairness, he says, means that we should be open to preserving security of transactions, this should only be done if rendered by court w/ proper jur’n.
  
• 
  Under this formulation order is a value of transaction and allows foreign judgment recognition. Fairness is viewed in light of Df, meaning there should be jur’nal restraint by foreign courts.
  
• 
  At this 2^nd (fairness) level R&S connection test plays role in controlling expansion of jur’n.
  
• 
  Treats connection w/ jur’n as either informing defendant connection or subject matter connection. Says nothing about submission and that’s helpful bc to extent majority in Beals talks about submission and choice of court as one of factors of R&S connection it is plainly wrong if there’s choice of law agreement. Helpful that he narrows it to defendant, subject matter or both.
  
• 
  His emphasis is on the test as being a flexible one and not yet fully defined or rigid. Important for Sharpe to set that discussion in that way bc he does something unusual in his ultimate ruling: he talks of foreign country judgments in class action and adds new element that can be taken into consideration.
  

• 
  Can there be class action in Ontario, based on something that’s already been settled in US? Df says that Pl wants to sue twice in same class action and if this is recognized it undermine US judgment.
  
• 
  Qn becomes class action involving unnamed palintiffs from another country, Canada.
  
• 
  In Canada, if you want to bring class action in province X, with defendant whose injuries have affected residents throughout Canada, what do you do? Should you be able to consolidate them in one province? Well, yes, or you’d have 13 diff proceedings and the bigger the class, the greater the benefits and savings for the Plaintiffs.
  
• 
  Should we allow US courts to be recognized deciding class action cases that involve Canadian victims? If principle is one of efficiency, then yes. But procedural safeties must be taken
  
• 
  Sharpe says that test should apply equally to class action as to any other type of proceeding, so we won’t recognize class action emanating from US unless R&S connection and order and fairness principles are both met.
  

• 
  Ont was HQ of McD Canada, so residence connection is satisfied, though Sharpe J recognizes it’s weak one.
  
• 
  Looks at how interests were not appropriately protected bc judgment came from settlement agreement.
  
• 
  So what is new is the test that Sharpe devises in context of this test: provided there’s R&S connection to foreign jur’n, provided that rights of non-resident class members are respected, and provided that there’s procedural fairness, including adequate notice, then judgment can be recognized.
  
• 
  What’s novel about this approach is that for purposes of testing the jur’n of foreign court first you have to show R&S connection but secondly there must be level of procedural fairness to the decision or to the process leading up to the decision. There has to be adequate protection of Pl’s rights.
  
• 
  Test for adequacy of jur’n is composed of traditional elements of R&S test and in addition seeks procedural fairness in sense of adequacy of representation of interests, adequacy of notice and right to opt out.
  
• 
  First one of adequacies is more difficult to treat under rubric of procedural fairness standing alone. He’s using jur’nal rubric to expand the defenses and recast them in a way that does not put the parties affected by class action in position of having to overcome the burden of proof.
  
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  This case raised the issue of notice. However, some Canadian jurisdictions (including Ontario) don’t require notice in many cases. Sharpe reasons that the US courts did not follow rules of fundamental justice by not applying their own rules of notice to the Canadian plaintiffs. So, even though our rules don’t apply that standard, they did not follow their own rules in the US. However, this case shows that class actions are just not as simple as normal actions because policy creates specific procedures.
  
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  It seems then that you can rely on the best of both worlds. Whichever standard is higher might prevail.