The case of King v Lang Michener, 2017 ONSC 1917 (one of three related actions), began with a transaction that went awry. The Plaintiff, Gregory King, a lawyer at Aylesworth and later Gowling Lafleur Henderson LLP, acted in a transaction relating to a new hotel in China with an Italian company, Sincies Chiementin SpA (“Sincies”), and various other foreign individuals and businesses. Mr. King received a 5% interest in the hotel, and Aylesworth was to receive payment for legal fees. Sincies went bankrupt, and one of its assets, a $600,000.00 USD deposit, vanished. Sincies’ trustee in bankruptcy eventually sued Mr. King, among others, in Italy, to try to recover the money.
Mr. King did not defend the Italian proceedings. The Italian court ruled against him, and ordered him to pay the deposit. Mr. King did not pay the judgment on the grounds that the Italian court lacked jurisdiction. Sincies’ trustee then followed Mr. King to Ontario and commenced enforcement proceedings. In 2007, Justice Whalen of the Ontario Superior Court granted summary judgment in the enforcement action and held that the Italian Court acted with jurisdiction. The Court of Appeal dismissed Mr. King’s appeal, and leave to appeal to the Supreme Court of Canada was denied. LawPro had denied coverage as Mr. King did not advise them of the Italian claim until after enforcement proceedings began in Ontario.
Mr. King then commenced three proceedings:
1. An action against the Italian lawyers who acted against him in the Italian proceeding, on the basis that they were in a conflict of interest when they acted against him;
2. An action against a partner at Gowlings, John O’Toole, who provided allegedly negligent advice, and against Gowlings for contribution and indemnity; and
3. A counterclaim against Lang Michener LLP (to Lang Michener’s action relating to payment for fees), the law firm that acted for Mr. King in the Ontario enforcement action.
The Defendants in all three actions brought motions for summary judgment, dismissing Mr. King’s claim.
The Italian Defendants argued that Ontario had no jurisdiction over Mr. King’s claim, and alternatively Ontario was not a convenient forum. Justice Corbett agreed, and concluded that Ontario did not have jurisdiction simpliciter over Mr. King’s claims. He further held that even if he had concluded Ontario would have jurisdiction, it was not a convenient forum.
In the second action, Mr. O’Toole and Gowlings argued that the claims against him were barred by operation of the statutory limitation period. Gowlings also alleged that there was no basis for a finding of indemnity by Gowlings. The allegations against Mr. O’Toole were based on alleged negligent advice provided in December 1998 and January 1999, advising Mr. King not to attorn to the jurisdiction of the courts of Italy, and not to report the Italian claim to LawPro until Ontario enforcement proceedings commenced. The claim against Gowlings was dismissed, as was the claim not to report the claim to LawPro. Justice Corbett, however, held there was a triable issue regarding the alleged advice not to attorn to the jurisdiction of the courts of Italy.
With respect to the third action, Lang Michener argued on its motion for summary judgment that the issues Mr. King alleged were not pursued were in fact fully argued, and that the allegations made by Mr. King were collateral attacks on the Ontario trial and appellate decisions. Further, Lang Michener’s position was that it was not retained by Mr. King to provide advice on his claims against LawPRO. Justice Corbett held that Mr. King’s negligence claims connected with the argument before Justice Whelan were barred by the collateral attack rule, and were dismissed.
This case serves as an important reminder of the potential consequences a litigant may endure should they fail to respond when served with a lawsuit originating in a foreign jurisdiction, as a foreign judgment may be enforced in Canada.
The lawyers at Gilbertson Davis LLP have expertise in enforcement of foreign judgments and arguing summary judgment motions. Should you require assistance with Enforcement of a Foreign Judgment, or a Summary Judgment motion, contact us for an initial consultation.