Enforcing Washington Judgments in British Columbia: "reciprocating State" Status for Washington Will Make Enforcement Easier
| Publication year | 1990 |
| Citation | Vol. 13 No. 03 |
Canada has long been one of the most important trading partners for the United States.(fn1) Canada, primarily British Columbia, is the second most important international trading partner of Washington State.(fn2) In 1986, trade between Washington and Canada exceeded $3.5 billion dollars.(fn3)
This trade relationship will be enhanced by the fact that both the United States Senate and the Canadian Parliament have ratified the United States-Canada Free Trade Agreement, which went into effect on January 1, 1989.(fn4) By its terms, this agreement drastically reduces or eliminates tariffs on commerce between the two nations within the next ten years.(fn5) As a result, the ratification signals the beginning of a period of increased commercial activity between American and Canadian business people.(fn6) This is particularly true between Washington and British Columbia where tariffs have prevented competition between the adjoining state and province.(fn7)
Increased trade will benefit the economies on both sides of the border. However, with the increased trade, disputes will inevitably increase. The parties involved will want a speedy, fair, and efficient method of settling these disputes. A final judgment, enforceable in either state or province, is one means of improving the process.
On July 5, 1989, the Executive Council of the Province of British Columbia passed an Order in Council declaring the State of Washington the first American "reciprocating state"(fn8) for purposes of Part 2 of British Columbia's Court Order Enforcement Act.(fn9) As a result, subject to certain requirements, most judgments of Washington State courts are now more easily and quickly recognized and enforced by the British Columbia Supreme Court.(fn10)
The order was the result of a formal request from the Washington State Attorney General to the Attorney General for British Columbia.(fn11) The request was prompted by problems, real and anticipated, in litigation involving Washington and British Columbia residents.
Prior to this declaration, successful litigants whose attempts to enforce Washington judgments in British Columbia were unsuccessful were required to commence new proceedings in British Columbia courts. Such relitigation is particularly problematic in commercial transactions where the delay and added expense can be devastating. Therefore, by reducing the probability of relitigation, reciprocity will facilitate the expansion of trade and commerce between Washington and British Columbia.
Part I of this Article will discuss the importance of foreign judgment enforcement. In Part II, the procedural requirements of enforcing a Washington judgment in British Columbia will be outlined. Finally, in Part III, potential enforcement problems for Washington judgment creditors under British Columbia's Court Order Enforcement Act will be considered.
I. The Ability to Enforce Judgments in a Foreign Forum Is Critical for Washington Judgment Creditors
The last stage in a fully litigated legal dispute is the collection of the judgment by the prevailing party. Even when litigation and judgment enforcement occur in a single jurisdiction, this can be the most difficult step in the litigation process. The problem is compounded when a litigant attempts to enforce a judgment in another country. Enforcement problems might be alleviated by a contractual choice of forum clause.(fn12) If, for example, the parties choose Washington as the forum jurisdiction, the parties will litigate under the law of the state of Washington. Ultimately, however, any Washington judgment obtained by a prevailing plaintiff will have to be enforced in the jurisdiction where the defendant's assets are located.
It has long been possible to enforce the judgments of British Columbia courts in Washington under Washington's Uniform Foreign Money Judgments Recognition Act.(fn13) However, prior to the recent order made under British Columbia's Court Order Enforcement Act, Washington judgment creditors taking Washington judgments to British Columbia courts have had difficulty enforcing those judgments. British Columbia courts often simply refused to recognize the Washington judgments because the provincial government did not recognize Washington as a reciprocating state. Washington judgment creditors were forced either to forego collecting the debt or to relitigate the case in a British Columbia court. Fortunately, the task of enforcing Washington judgments in British Columbia courts will be easier now that Washington is a reciprocating state under British Columbia's Court Order Enforcement Act.(fn14)
In order to enforce a foreign judgment, a court must first recognize the judgment.(fn15) Historically, principles of sovereignty have made some courts reluctant to recognize judgments rendered by the courts of foreign nations.(fn16) There is a tension between the need to protect sovereign interests and the need for universal recognition of foreign judgments:
By ignoring foreign judgments, courts prejudice the interests of foreign creditors who, like all creditors, want to protect themselves against the risk of their debtor's insolvency or any other impediment to the enforcement of their claims.(fn18) A secondary effect of nonrecognition by a state is that it makes it less likely that the foreign forum will recognize the judgments of that state.(fn19)
The United States and Canada are similar in that enforcement of foreign judgments is not expressly governed by federal law in either country. Instead, state law in the United States, and provincial law in Canada, govern the recognition and enforcement of foreign judgments.(fn20)
In 1975, the Washington State Legislature enacted the Uniform Foreign Money Judgments Recognition Act.(fn21) The legislature, by this enactment, attempted to ease enforcement of British Columbia judgments in Washington.(fn22) Under the Act, the expectation was that British Columbia would reciprocate and Washington judgment creditors would be able to enforce Washington judgments in British Columbia.(fn23) Unfortunately, mere passage of the Act proved insufficient. Unlike the Act, British Columbia's Court Order Enforcement Act requires each foreign state to be separately declared a reciprocating state.(fn24)
In 1987, the Washington State Attorney General formally requested that British Columbia issue an Order in Council recognizing Washington as a reciprocating state.(fn25) To become a reciprocating state, as the term is used in British Columbia's Court Order Enforcement Act, Washington first had to meet the British Columbia requirement that it recognize and enforce judgments of British Columbia courts. Washington's adoption of the Uniform Foreign Money Judgments Enforcement Act met this requirement. Thus, British Columbia complied with the Attorney General's request and the Order in Council became effective on July 6, 1989.(fn26) Consequently, Washington now enjoys reciprocating state status.
Under British Columbia's Court Order Enforcement Act, a Washington judgment creditor must apply to the British Columbia Supreme Court to register the Washington judgment. Normally, the judgment will be registered if the application is in the proper form and no defects existed in the original proceeding. The possible defects are set out in section 31 of the Court Order Enforcement Act.(fn27)
A British Columbia court will not register a judgment if the original court acted without jurisdiction, without authority to adjudicate the cause of action, or without the ability to hold the judgment debtor liable.(fn28) A determination that the original court lacked jurisdiction over the judgment debtor reflects either that the judgment debtor was not carrying on business within the jurisdiction of the original court or was not a resident of the state of the original court. In either situation, if the judgment debtor did not appear or submit(fn29) to the jurisdiction of the original "court, the British Columbia court will find that personal jurisdiction over the judgment debtor was lacking and the judgment will not be registered.(fn30) Additionally, if the judgment debtor was not duly served with process of the original court or did not appear, a judgment may not be registered.
These requirements are...
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