BARER v. KNIGHT BROTHERS LLC, 2019 SCC 13

It’s contradictory for Quebec residents to argue that a foreign court doesn’t have the power to decide a lawsuit against them, while bringing up points the court could use to resolve the dispute in their favour.

In this case Mr. Barer was a native of Quebec. He was president of two firms, one based in Montreal and the other based in the US state of Vermont. Knight Brothers was based in the Utah state of the United States, where the Vermont-based Corporation was involved in the project. After a contract dispute over the project, Knight Brothers sued Mr. Barer and his two firms in the Utah court. Mr. Barer asked the Utah court to dismiss the case against him summarily (i.e. without a full hearing). He claimed the court has no authority, but also argued that there were legal grounds why Knight Brothers’ claim could not proceed. The judge denied his motion to dismiss and Mr. Barer no longer defended himself. In the end, the Utah court decided in favour of Knight Brothers. Since Mr. Barer resided (and had assets) in Quebec City, Knight Brothers asked the Quebec court to accept the ruling.

A Quebec court must consent to acknowledge (or “recognize”) a foreign decision in the province in order to enforce it implying that determination would be limited to if the International Court has competence over the resident of Quebec. A foreign court ruling may be acknowledged and applied in Quebec if the citizen of Quebec has recognised the jurisdiction of the foreign court by “submitting to its jurisdiction.” If the court decides that there was no submission by its citizen, the individual suing the citizen of Quebec would not be allowed to be paid in Quebec, even if the international court has directed it to do so. However, there is lack of consensus as to which action would be considered a symbol of submission. In fact, there is no consensus as to whether anyone actually submits when they complain for “merits” to prevent a negative result while also saying that the international court would not have jurisdiction.

The apex court of Canada, after considering the facts on record ruled that the decision should be remembered in Quebec. It said that Mr. Barer had taken the lawsuit before the Utah court by claiming in his motion to dismiss the merits of the case. The judge said that Mr. Barer had to pay more than $1.2 million to Knight Brothers. The appeal was rejected by the Court of Appeal. The majority of the Supreme Court decided that the decision in Utah should be remembered in Quebec. It claimed that the defendants submit to the jurisdiction of the court as they present claims that (if accepted) would settle the conflict – or part of the dispute – on its merits. It would be unjust and impractical if somebody should attempt and persuade a foreign court on the facts while also being free to contest its authority at home if they did not like the outcome. As Mr. Barer challenged the merits of the case in his motion for dismissal, he referred the matter to the Utah court under Quebec statute.

If the Utah court had accepted this point, it would have ruled in its favour, and Knight Brothers would have had to accept it. Mr. Barer made a strategic decision and had to consider the implications. This case was unique to Quebec law, as set out in the Quebec Civil Code. The Civil Code refers to non-criminal procedural matters in Quebec.