Ontario counsel for American clients.

The Courts and the Procedure

Civil claims in Ontario of any size are heard in the Superior Court of Justice, a single trial court of general jurisdiction whose judges are appointed by the federal governmentCourts of Justice Act, R.S.O. 1990, c. C.43. The Superior Court has all the jurisdiction, power and authority historically exercised by the courts of common law and equity in England and Ontario (s. 11(2)). The Commercial List is a Toronto Region practice direction, not a separate court, and it sits with its own judges and its own scheduling.. In Toronto, insolvencies, receiverships, and other complex corporate and commercial matters go to the Commercial List, a specialized roster of judges who manage their cases actively and can hear urgent matters within days. Appeals go to the Court of Appeal for Ontario, and from there to the Supreme Court of Canada only with leave. There is no federal and state split to think about. The Federal Court exists, but it hears a short list of subjects, among them intellectual property, admiralty, and claims against the federal government, and an ordinary commercial dispute does not go there.

The shape of a lawsuit will be familiar. A statement of claim is issued and served, a statement of defence follows, the parties exchange documents and examine each other under oath, motions are argued, the case is set down for trial, and the losing party may appeal. The Rules of Civil Procedure govern all of it, and the vocabulary is close to yours, with a few translations. An examination for discovery is a deposition of a party, a motion for summary judgment is what it is in your courts, and a factum is a brief. An American lawyer cannot appear in the Superior Court, so the file needs Ontario counsel, but nothing prevents the American firm from staying involved, and on most cross-border files it does.

Costs follow the event. The losing party is ordered to pay a portion of the winner's legal fees, typically on the partial indemnity scale, which in practice recovers something in the range of half to two thirds of what was actually spent, plus disbursements. A plaintiff who makes a formal offer to settle under Rule 49 and then does as well or better at trial recovers costs on the higher substantial indemnity scale from the date of the offer, and a defendant whose offer the plaintiff fails to beat recovers its own costs from that date, so offers are made early and taken seriously. The rule cuts both ways for an American plaintiff. Winning brings a costs award. Losing brings an order to pay, and a plaintiff who is ordinarily resident outside Ontario can be ordered at the outset to post security for the defendant's costsRules of Civil Procedure, r. 56.01(1)(a). The order is discretionary. A foreign plaintiff with sufficient assets in Ontario, or an obviously strong claim, may avoid it, and the amount is set in stages as the action proceeds., a remedy that is generally unavailable to a defendant in the United States.

Juries are rare in commercial cases. A party can serve a jury notice in most civil actions, but claims for equitable relief, including injunctions, specific performance, and accountings, are tried by a judge alone by statute, and in a complex commercial case the notice is usually struckCourts of Justice Act, s. 108(2). The listed claims are tried without a jury. Section 108(3) lets the court strike a jury notice in any other action where the issues are unsuited to a jury.. The judge finds the facts, applies the law, and gives written reasons, and an appellate court disturbs findings of fact only for palpable and overriding error. Punitive damages exist but are exceptional and modest by American standards, and there is no treble damages regime. An American client used to the settlement pressure that a jury and an open-ended damages exposure create should expect a quieter dynamic here, in which the costs rules do much of that work instead.

Discovery is narrower and more structured. Each party must list every relevant document in its possession, control, or power in a sworn affidavit of documents, without waiting to be asked, and produce the ones that are not privileged. Oral discovery is one examination of one representative of each adverse party, capped at seven hours in total for each examining party unless the parties agree or the court orders otherwise, and non-parties can be examined only with leaveRules of Civil Procedure, rr. 30.03, 31.05.1, 31.10. Rule 29.2 requires proportionality in every discovery decision. Rule 30.1 is the deemed undertaking, under which evidence obtained on discovery may be used only in the proceeding in which it was obtained, unless the court orders otherwise.. There are no depositions of witnesses at large and no attorney-issued subpoenas. Evidence obtained on discovery is subject to a deemed undertaking and cannot be used in another proceeding, including one in the United States, without leave. Expert evidence comes by written report on a fixed schedule before trial. The American client's first reaction is usually that the process is thin. The second, after a few months, is usually that it is cheaper.

The calendar has its own features. In Toronto, Ottawa, and Windsor, an ordinary action goes to mandatory mediation within 180 days after the first defence unless the court orders otherwise or the parties agree to a later date, and most do until documents have been exchanged. Commercial List actions are exempt. Summary judgment is a genuine route to a decision on the merits, and since the Supreme Court's decision in HryniakHryniak v. Mauldin, 2014 SCC 7. Rule 20 lets the motion judge weigh evidence, evaluate credibility, and draw inferences on a motion. Summary judgment is granted where the process allows the judge to reach a fair and just determination on the merits without a trial. a motion judge may weigh evidence and decide the case if the record permits a fair result. Claims up to $200,000 proceed under a simplified procedure with tighter discovery, and the Small Claims Court hears claims up to $50,000. A trial date in Toronto commonly arrives one to three years after the action is set down. The basic limitation period is two years from the day the claim was discovered, with an ultimate period of fifteen yearsLimitations Act, 2002, S.O. 2002, c. 24, Sched. B, ss. 4, 5 and 15. The two-year period runs from discovery, defined in s. 5. Parties to a business agreement may vary or exclude the basic period by agreement (s. 22(5)).. Contingency fees are permitted in civil litigation, subject to statutory conditions.

Jurisdiction, Service & Evidence

Whether an Ontario court will hear a claim against an American defendant is decided under the framework in Club Resorts Ltd. v. Van BredaClub Resorts Ltd. v. Van Breda, 2012 SCC 17. The presumptive connecting factors for a tort claim are that the defendant is domiciled or resident in Ontario, carries on business in Ontario, committed the tort in Ontario, or that a contract connected with the dispute was made in Ontario. The list is not closed and the presumption can be rebutted.. The plaintiff needs a presumptive connecting factor between the dispute and Ontario, such as the defendant carrying on business here or a contract connected with the dispute having been made here. Once jurisdiction exists, the defendant may still ask the court to decline it on the ground that another forum, often the American one, is clearly more appropriate. The analysis is familiar to anyone who has argued a motion to dismiss for want of personal jurisdiction or a forum non conveniens motion, and the outcomes are similar. What Ontario courts do not do is issue anti-suit injunctions readily. An injunction against proceedings in a foreign court is reserved for cases in which that court has assumed jurisdiction in a way that offends the Canadian principles of comity, and parallel proceedings on both sides of the border are tolerated more often than an American client expects.

Service on a defendant in the United States does not require leave of the court in the ordinary commercial case. The Rules list the categories of claim that may be served outside Ontario, including a claim on a foreign judgment, and service in the United States proceeds under the Hague Service Convention, to which both countries are parties. Because the United States permits service by postal channels and by agents under the Convention, service on an American defendant is usually quick. The defendant served in the United States has forty days to deliver a defence, against twenty for a defendant served in Ontario. The reverse is also true, and an Ontario company served with American process should not treat it as optional. A default judgment obtained in a state court that had jurisdiction over the Ontario defendant under Canadian conflict rules will be enforced here without any review of the merits, which is the lesson of the leading Supreme Court case on the subject and a lesson learned by an Ontario family the hard way.

Evidence crosses the border in both directions, by different routes. An Ontario litigant who needs documents or testimony from a person in the United States can apply to a federal district court under 28 U.S.C. section 1782, which gives a party to a foreign court proceeding access to the full scope of American federal discovery, subject to the court's discretion, though since 2022 it is not available for private arbitrations28 U.S.C. § 1782. The applicant must be an interested person, the person from whom discovery is sought must be found in the district, and the discovery must be for use in a proceeding before a foreign tribunal. ZF Automotive US, Inc. v. Luxshare, Ltd., 142 S. Ct. 2078 (2022), confined the section to governmental and intergovernmental tribunals.. An American litigant who needs evidence in Ontario sends letters rogatory, which the Superior Court enforces under the Canada Evidence Act and the Ontario Evidence ActCanada Evidence Act, R.S.C. 1985, c. C-5, s. 46; Evidence Act, R.S.O. 1990, c. E.23, s. 60. The court asks whether the evidence is relevant, necessary for trial, not otherwise obtainable, not contrary to public policy, identified with reasonable specificity, and not unduly burdensome.. The Ontario court gives effect to the request as a matter of comity but does not rubber-stamp it. It asks whether the evidence is relevant and necessary, whether it can be obtained another way, whether the documents are identified with reasonable specificity, and whether the request is unduly burdensome, and it will narrow a request drafted to American discovery standards before enforcing it.

Freezing & Tracing Assets in Ontario

Ontario courts grant the full range of equitable asset-preservation relief, and they grant it in aid of foreign proceedings as well as domestic ones. A Mareva injunction freezes the defendant's assets, in Ontario or worldwide, before judgment, on evidence of a strong prima facie case and a real risk that the assets will be dissipated or moved beyond reach, supported by full disclosure and an undertaking to pay damages if the injunction turns out to have been wrongly grantedThe Ontario test is applied on a without-notice motion supported by affidavit evidence, with a return date within days. The plaintiff must make full and frank disclosure of everything material, including facts that hurt its case, or the order will be set aside regardless of the merits.. A Norwich order compels a third party, typically a bank, to disclose the information needed to identify a wrongdoer or trace funds. A certificate of pending litigation ties up real property where the claim asserts an interest in the land itself. A receiver can be appointed over a business or a pool of assets where it is just or convenient. After judgment, the judgment creditor can examine the debtor under oath about assets and income, and the sheriff enforces writs against land and personal property while garnishment reaches bank accounts and receivables.

The interplay with American proceedings matters. A United States court will not enforce a foreign worldwide freezing order as such, though it can enjoin parties before it from moving assets they control, and an Ontario court will not ordinarily enforce an American attachment order. The practical rule is that freezing relief is obtained where the assets are. An American plaintiff with a claim pending in New York and a defendant whose money sits in Toronto applies in Toronto, and the firm has obtained worldwide Mareva and Norwich relief on a single without-notice motion for a group of investors in exactly that position. The same court will grant interim relief in aid of an arbitration seated in the United States.

Enforcing a U.S. Judgment in Ontario

There is no treaty between Canada and the United States on the recognition of judgments and no registration statute that covers them in Ontario. The Reciprocal Enforcement of Judgments Act extends only to designated Canadian provinces and territories, and the United Kingdom has its own statute. An American judgment is enforced the old way, by an action on the judgment in the Superior Court. The action treats the judgment as a debt. The Ontario court does not retry the case and does not ask whether the American court got it right. It asks whether the American court had jurisdiction in the Canadian sense, whether the judgment is final and conclusive, and whether any of a short list of defences appliesBeals v. Saldanha, 2003 SCC 72. A Florida default judgment against Ontario defendants who had chosen not to defend was enforced in Ontario. The real and substantial connection test applies to foreign judgments, and the defences of fraud, natural justice, and public policy are construed narrowly..

Jurisdiction is measured by the real and substantial connection between the American court and either the defendant or the subject matter of the action, or by the defendant's own conduct. A defendant who was resident in the state, who agreed to its courts in the contract, or who appeared and defended on the merits will not be heard to say the court lacked jurisdiction. Appearing only to contest jurisdiction is not submission. The Ontario court, for its part, needs no connection of its own to the dispute or to the defendant. The Supreme Court settled in Chevron Corp. v. YaiguajeChevron Corp. v. Yaiguaje, 2015 SCC 42. An Ontario court has jurisdiction over a recognition and enforcement action when the defendant is served, whether in Ontario or outside it under the Rules. Whether there are assets in Ontario goes to the usefulness of the exercise, not to jurisdiction. that a recognition action can be brought here on service of the claim, and that the presence or absence of assets in Ontario is a practical question rather than a jurisdictional one. Money judgments are the ordinary case. Since Pro Swing Inc. v. Elta Golf Inc. a non-money judgment such as an injunction can also be enforced in principle, with more caution and a closer look at whether its terms are clear enough to be obeyed in Ontario.

There are three defences, and all of them are narrow. The first is fraud, meaning fraud going to the jurisdiction of the foreign court or fraud that could not have been discovered and raised there by the exercise of due diligence. The second is a denial of natural justice, meaning that the defendant was not given notice or a fair opportunity to be heard by the standards of Canadian procedure. The third is public policy, meaning that the judgment enforces a law or a result contrary to the fundamental morality of the Canadian legal system, a high bar that the size of an American damages award does not clear on its own. An Ontario defendant who wants to fight should fight in the American court, where the merits can still be argued, because by the time the judgment arrives in Toronto the merits are closed.

The procedure is compact. A statement of claim pleads the judgment, the jurisdiction of the American court, the finality of the judgment, and the facts that answer the defences, and it is served in Ontario or in the United States without leave under the rule that covers claims on foreign judgments. Most recognition actions are decided on a motion for summary judgment on affidavit evidence with an exemplified copy of the judgment attached. The American amount is converted into Canadian dollars under the Courts of Justice Act, and post-judgment interest runs at the rate provided by the law of the state where the judgment was given rather than at the Ontario rateCourts of Justice Act, ss. 121 and 129(3); Currency Act, R.S.C. 1985, c. C-52, s. 12. The conversion date is governed by s. 121, and the foreign post-judgment rate applies to a judgment on a foreign judgment.. The Ontario judgment that results is enforced like any other, by writ of seizure and sale, garnishment, examination of the debtor in aid of execution, and, where the facts justify it, by receivership. The Ontario judgment does not travel automatically to the rest of Canada. Whether a judgment that itself enforces a foreign judgment can be registered under another province's reciprocal statute is unsettled, and Ontario's Court of Appeal will not enforce such a judgment at common law, so where the debtor's assets sit in more than one province the American judgment is sued on in each of them, with each province's limitation period watchedH.M.B. Holdings Ltd. v. Antigua and Barbuda, 2021 SCC 44, left open whether a recognition judgment from one province can be registered in another under the reciprocal enforcement statutes. H.M.B. Holdings Ltd. v. Antigua and Barbuda, 2022 ONCA 630, held that Ontario courts will not enforce such a judgment at common law, because it would strip the debtor of the defences available against the original judgment.. The procedure and the defences are covered at greater length in the firm's guide to enforcing a foreign judgment in Ontario.

The limitation period is the point most often missed. Ontario's basic two-year period applies to an action on a foreign judgment, and the Court of Appeal has held that it runs from the day the American judgment became final, meaning the day the time to appeal expired or the day the appeal was decidedIndependence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44, followed in Sunlight General Capital LLC v. Effisolar Energy Corporation, 2023 ONCA 133, where the period ran from the dismissal of the New York appeal rather than from the original judgment.. Discoverability principles apply, and the Court of Appeal has left room for them to extend the period where the creditor could not reasonably have known that a proceeding in Ontario was needed, but that is an argument to make in the rare case rather than a plan. An American judgment creditor with an Ontario debtor should instruct Ontario counsel as soon as the appeal period at home has run, and earlier if the debtor's assets are already moving.

Enforcing an Ontario Judgment in the United States

An Ontario judgment travels south on comity and on state law. There is no federal recognition statute. Most states have enacted the Uniform Foreign-Country Money Judgments Recognition Act of 2005 or its 1962 predecessor, and the remaining states recognize foreign judgments under common-law comity principles that reach similar results. New York's version sits in article 53 of the Civil Practice Law and Rules, and Nevada's in chapter 17 of the Nevada Revised StatutesN.Y. C.P.L.R. art. 53; Nev. Rev. Stat. §§ 17.700 to 17.820. The 2005 Act applies to judgments that grant or deny a sum of money and are final, conclusive, and enforceable where rendered. Recognition may be sought by an action or, where an action is already pending, by counterclaim, cross-claim, or affirmative defence.. Under the uniform statutes an Ontario money judgment that is final, conclusive, and enforceable in Ontario must be recognized unless the Ontario system did not provide impartial tribunals and due process, or the Ontario court lacked personal or subject-matter jurisdiction. A second list of discretionary grounds covers lack of notice, fraud, public policy, conflict with another judgment, and an inconvenient forum, and a handful of states add a reciprocity requirement. None of these is a review of the merits.

The work is in the preparation. An Ontario judgment recognized abroad should carry findings on jurisdiction and on the notice given to the defendant, a clear money sum, and a record of how the defendant was served, and the firm drafts the Ontario proceeding with the American recognition action in mind where the defendant's assets are known to be in the United States. Once recognized, the judgment is enforced with the state's ordinary tools, which are writs of execution, garnishment, and, in New York, restraining notices served on banks and turnover orders. We prepare the record and work with counsel in the state where the assets are, and in Nevada Denis Grigoras is himself admitted. One limit should be understood in advance. Freezing relief in aid of an Ontario claim must be obtained from the American court under its own attachment and injunction rules, since an Ontario Mareva injunction will not be enforced there as such.

Arbitral Awards and the New York Convention

An arbitral award crosses the border more easily than a judgment. Canada and the United States are both parties to the New York Convention, and Ontario applies it through the International Commercial Arbitration Act, 2017, which schedules the Convention and the UNCITRAL Model Law. An award made in the United States is recognized and enforced in Ontario on an application to the Superior Court with the award and the arbitration agreement, and the court may refuse only on the grounds listed in the Convention and in article 36 of the Model Law: an invalid agreement, a party who was not given proper notice, an award that goes beyond the submission, a tribunal or procedure that departed from the agreement, an award that has been set aside at the seat, non-arbitrable subject matter, or public policy. The merits are not reviewed. Ontario allows ten years from the award, or from the end of any set-aside proceeding, to apply for enforcementInternational Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5, s. 10. Compare Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19, which applied Alberta's two-year limitation period to a foreign award before Ontario legislated a ten-year period., a far longer window than the two years allowed for a judgment.

The reverse direction works the same way. An award made in Toronto is enforced in the United States under chapter 2 of the Federal Arbitration Act by a petition to confirm, which must be brought within three years of the award and which the federal court decides on the Convention grounds alone. For an American company contracting with a Canadian one, this is the strongest practical argument for an arbitration clause. A Toronto-seated award is enforceable across the United States by petition, and a New York-seated award is enforceable in Ontario by application, without the state-by-state recognition proceedings that a judgment requires.

Cross-Border Insolvency

When an American counterparty files for bankruptcy protection, the Canadian side of the case is handled under Part XIII of the Bankruptcy and Insolvency Act, or under Part IV of the Companies' Creditors Arrangement Act for larger restructuringsBankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss. 267 to 284. The foreign representative applies for recognition of the foreign proceeding. Recognition of a foreign main proceeding, one in the jurisdiction where the debtor has its centre of main interests, brings an automatic stay of proceedings against the debtor's Canadian property (s. 271). Courts must cooperate with the foreign court to the maximum extent possible (s. 275).. The trustee, debtor in possession, or other representative appointed in the Chapter 11 or Chapter 7 case applies to the Ontario court for recognition of the American proceeding. If the debtor's centre of main interests is in the United States the proceeding is recognized as a foreign main proceeding and an automatic stay follows in Canada; otherwise the stay and other relief are discretionary. The Commercial List applies the Judicial Insolvency Network guidelines, as do the Delaware and Southern District of New York bankruptcy courts, so coordinated hearings between Toronto and those courts are routine. For an American creditor of an Ontario debtor the picture is reversed. Ontario proposals, receiverships, and bankruptcies proceed under the same statute, on the Commercial List, with the American creditor entitled to participate on the same footing as a Canadian one.

International Arbitration Seated in Toronto

Toronto is a good seat for an arbitration between an American and a Canadian party, and a neutral one when the Canadian party is elsewhere in the country. Ontario adopted the 2006 text of the Model Law, which most of the United States and much of Canada has not, and its courts take the hands-off approach the Model Law prescribes. The tribunal rules on its own jurisdiction first, court intervention is confined to the cases the Model Law names, an award can be set aside only on the article 34 grounds and only within three months, and interim measures are available from the tribunal and from the court. The ICC, the ICDR, and the ADR Institute of Canada all administer arbitrations seated here, hearing facilities in Toronto are built for the purpose, and the time zone is New York's. The firm's arbitration practice, including the drafting of the clause, the conduct of the case, and the court proceedings around the award, is described on the Arbitration page.

The choice of seat is a negotiation, and an American party will sometimes insist on New York or Delaware. That is workable. An award made there is enforced in Ontario on application under the Convention, and an Ontario court will grant interim measures in aid of an arbitration seated in the United States. What matters more than the seat is that the clause is drafted with enforcement in mind, with institutional rules that fit the size of the likely dispute, a sole arbitrator for smaller matters, an express choice of governing law, a language, and a carve-out for court injunctions where assets may need to be frozen quickly.

Cross-Border Contracts

A supply, distribution, or services agreement between an American and a Canadian business raises a short list of drafting questions that decide how a dispute will go. The governing law should be one whose courts the parties can actually reach, and Ontario law is a familiar common-law choice for an American counterparty. The United Nations Convention on Contracts for the International Sale of Goods applies automatically to a sale of goods between parties in Canada and the United States, since both are contracting states, unless the contract excludes it, and a clause that simply chooses "the laws of Ontario" does not exclude it, because the Convention is part of Ontario lawInternational Sale of Goods Act, R.S.O. 1990, c. I.10. The Convention supplies implied conformity standards and a receipt rule for acceptance in place of the common-law postal rule, and it is silent on limitation periods, which are left to the domestic law that governs the contract, for an Ontario-law contract the Limitations Act, 2002. Parties who want the domestic Sale of Goods Act instead must say so.. A delivery term should name the Incoterms edition, and the clause should say who is the importer of record and who bears duties, surtaxes, and retaliatory tariffs, since a term that allocates "taxes" may not reach them and a tariff increase is not a force majeure event merely because performance became more expensive.

Three Canadian rules catch American drafters. An interest rate expressed monthly must also state the annual equivalent, or the creditor recovers only five per cent a year under the federal Interest Act. A contractual limitation period shorter than Ontario's two years is enforceable between businesses only where the statutory conditions are met. And a seller extending credit on goods delivered into Ontario protects itself with a security interest registered under the Personal Property Security Act, with the purchase-money priority preserved by notice and timely registration. On the dispute clause, the firm drafts from the enforcement end backwards, asking first where the counterparty's assets are and what kind of decision that jurisdiction will enforce, and then choosing court or arbitration, seat, and rules to fit.

Doing Business in Ontario, and the Nevada Practice

An American business can operate in Ontario through a subsidiary or directly. An Ontario corporation under the Business Corporations Act no longer requires any resident Canadian director, so a wholly American-managed board is possible, while a federal corporation under the Canada Business Corporations Act still needs a quarter of its directors to be resident Canadians. A United States corporation that carries on business in Ontario without incorporating here needs an extra-provincial licence. A private Ontario or federal subsidiary must also keep a register of the individuals who ultimately control it, though a wholly owned subsidiary of a listed parent is exempt, and a United States corporation operating under a licence has no equivalent Ontario obligation beyond keeping an agent for service here. An acquisition of control of a Canadian business, or the establishment of a new one, is notifiable under the Investment Canada Act, and, for a business outside the cultural sector, reviewable for net benefit only above a threshold that for American investors stands at 2.179 billion Canadian dollars in enterprise value for 2026Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.). The 2026 net benefit review threshold for trade agreement investors, which include investors from the United States and the European Union, is $2.179 billion in enterprise value; the general WTO threshold is $1.452 billion. Both adjust annually. A national security review can be ordered at any value., with a separate national security review available at any value. Sales tax registration, the Canada-United States tax treaty, and the permanent establishment question belong to the tax advisers, and we work alongside them. The firm's corporate and commercial work is described on the Business Law page, and the cross-border side of it on the International Business Law page.

Denis Grigoras has been licensed in Nevada since 2008, and the firm maintains a Nevada advisory practice delivered remotely, covering entity formation and governance under chapters 78 and 86 of the Nevada Revised Statutes, reincorporations into Nevada, asset-protection structuring, pre-suit work in online defamation and right of publicity matters, and the enforcement of Ontario judgments against Nevada assets. For an American client whose affairs already touch Nevada, or a Canadian one considering a Nevada entity, that side of the practice is described on the Nevada page.