Prepared By Timothy C. Platnich
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The law has recently evolved to make it easier in Alberta (and other provinces of Canada) to enforce foreign judgments against a person residing in or with assets in Alberta.
Situations often arise as follows. Person A is carrying on business in a state such as Arizona. The business fails. Person A owes several creditors money. Person A leaves Arizona and takes up residence in Alberta. Person A has assets in Alberta.
Person B is a creditor. Person B sues Person A in Arizona. Person A does not defend the lawsuit and ultimately Person B obtains a judgment against Person A in Arizona. Person A has left no assets in Arizona. Person B will only be able to collect on its judgment if it can pursue Person A in Alberta. Is this possible?
The general answer under modern Alberta conflict law is "yes", with certain provisos.
Some provisos are as follows:
- Person A must have been validly served with process under Arizona law;
- The Arizona judgment must be for a sum certain and must be final and conclusive;
- The Arizona judgment must not have been obtained by fraud;
- The Arizona judgment must not be in respect of certain kinds of debts which are unenforceable in Alberta such as a gambling debt.
Provided that Person B can meet the applicable conditions, Person B could sue Person A in Alberta on the Arizona judgment. This would entail hiring an Alberta law firm. The Alberta law firm, after being provided with the requisite information including copies of relevant documentation, would first ascertain whether there are any bars to enforcing the foreign judgment in Alberta. Assuming no such bars exist, some searches should be made in an attempt to determine the extent of Person AÂs assets in Alberta. Such searches may be inconclusive however.
Assuming Person B wishes to proceed further, then a lawsuit would be commenced to enforce the Arizona Judgment. Person B may be required to attend in Alberta to prosecute the action. However in some cases this may not be required.
The above analysis has used Arizona as an example. The same analysis applies with respect to a judgment obtained in any Province of Canada or any State of the United States. The analysis may equally apply to other jurisdictions as well, however this becomes less clear depending on the nature of the legal system involved. The above analysis also is restricted to the option of suing on the original judgment. Other options may be available such as enforcement under reciprocal enforcement legislation or suing on the original cause of action.
If you have a judgment against a person now residing or carrying on business in Alberta and wish to enforce that judgment, we would be happy to advise you in this regard. We would advise against trying to enforce a foreign judgment without the assistance of a lawyer as this area of law can become quite technical and complicated.
For further information about litigation, please do not hesitate to contact us.