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FOREIGN JUDGMENTS - Action on foreign judgment - Enforcement

Wednesday, May 15, 2019 @ 7:26 AM  


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Appeal by the defendant Li from an order holding her and her husband jointly and severally liable to pay debts owed to the plaintiff under Chinese judgments plus interest at an annual rate of 60 per cent. The plaintiff made short-term loans to the defendants’ corporation, guaranteed by the defendants. The corporation defaulted on the loans. The defendants were represented at a mediation conducted by the Chinese Court that resulted in a settlement agreement. Two judgments affirmed the settlement agreement. The defendants’ petition for a retrial was dismissed. In the plaintiff’s application to enforce the Chinese judgments, the summary trial judge found the defendants attorned to the jurisdiction of the Chinese Court. He rejected the defendants’ assertion the judgments were obtained by fraud. He found they had not shown any breach of natural justice. The defendants were found to owe $5,041,019 plus interest of $16,308,923. The summary trial judge applied the principle of notional severance to reduce the annual rate of interest from 73 per cent to 60 per cent.

HELD: Appeal dismissed. The defendant failed to show the Chinese judgments were obtained in breach of the minimum standards of fairness given she and her husband had attorned to the jurisdiction of the Chinese court and participated at every stage. The trial judge did not err in applying the concept of notional severance to reduce the interest component of the Chinese judgments. There was no principled reason why notional severance could not be available for foreign judgments. Dissenting reasons were provided.

Wei v. Mei, [2019] B.C.J. No. 567, British Columbia Court of Appeal, M.V. Newbury, D.M. Smith and P.M. Willcock JJ.A., April 9, 2019. Digest No. TLD-May132019006