Are you being sued in a foreign jurisdiction? Take it seriously!

A decision released on October 12, 2011 in Ontario Superior Court shows the dangers involved in ignoring a lawsuit brought against an Ontario resident in a foreign jurisdiction.

In Monte Cristo Investments LLC v. Hydroslotter Corporation et al., Mr. Justice Campbell dealt with a case in which an Ontario resident, Jean-Claude Bonhomme, was sued by Monte Cristo Investments LLC in California for breach of contract and various torts. The lawsuit related to money that Monte Cristo had invested in the operation of certain oil and gas wells in California.

Monte Cristo sued a number of local entities and individuals as well as Mr. Bonhomme.

If you are sued in a foreign jurisdiction, you are taking an enormous risk if you don’t hire a lawyer in that jurisdiction and defend yourself there.

Mr. Bonhomme did not defend the claim against him and, ultimately, Monte Cristo obtained a sizeable default judgment against all of the Defendants including him.

At that point, it appears that Mr. Bonhomme began to take the case seriously. He retained a California lawyer to bring a motion to try to set aside the judgment against him. He was not successful.

Monte Cristo then brought a motion in Ontario to “domesticate” the judgment so as to be able to enforce it against Mr. Bonhomme’s Ontario assets. Mr. Bonhomme vigorously opposed that motion.

Mr. Justice Campbell heard the motion and ruled in favour of Monte Cristo. He determined that a judgment against an Ontario resident obtained in a foreign court will be enforceable in Ontario as long as there is a real and substantial connection between the subject matter of the lawsuit (in this case, the oil wells) and the foreign jurisdiction itself.

Mr. Bonhomme attempted to persuade the court that the judgment ought not to be enforceable in Ontario unless Monte Cristo could prove a real and substantial connection between California and him. However, the court found that “a real and substantial connection with the subject matter of the action will satisfy the test even in the absence of any such connection with the Defendant”.

This means that if you are sued in a foreign jurisdiction, you are taking an enormous risk if you don’t hire a lawyer in that jurisdiction and defend yourself there. This is true even if you truly had absolutely nothing to do with the Plaintiff or any other parties, or with either the subject matter of the action or the foreign jurisdiction. For example, you could be a completely innocent bystander who has been sued in a foreign jurisdiction entirely by mistake. Even in such a case, you must arrange to defend yourself in the foreign jurisdiction, no matter how inconvenient or expensive that might be.

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