Ontario: a clever but futile attempt to avoid an expired limitation period in foreign judgment enforcement

The Superior Court decision in H.M.B. Holdings Limited v. The Attorney General of Antigua and Barbuda reads like an exam question: can you use a chain of foreign judgment enforcement proceedings to avoid a limitations issue? Nope.

The plaintiff obtained a judgment from the Privy Counsel against the defendant and then commenced an action in BC to enforce the judgment and obtained default judgment.  The plaintiff then applied Ontario to enforce the BC judgment pursuant to the Reciprocal Enforcement of Judgments Act.  This proceeding was timely.

The defendant opposed the application successfully on the basis of s. 3(g) of the Act, which provides that the court shall not grant judgment if the judgment debtor would have a good defence to an action brought on the original judgment.  If the application were brought on the original judgment—the Privy Counsel judgment—it would be statute-barred.  Thus an application brought to enforce a judgment enforcing the Privy Counsel judgment must also fail.

Ontario: The potential consequence of serving a Statement of Claim out-of-time

Scenario: A plaintiff pursues a claim by statement of claim issued within the limitation period, fails to serve the statement of claim within the time prescribed by the rules, the court refuses leave for late service, and if the plaintiff were to reissue the statement of claim the claim pursued in it would be statute-barred.  Is the claim out of time?  According to the Court of Appeal in Sultan v. Hurst, yes:

[1]         The appellant appeals the decision of the motion judge refusing to validate the late service of the statement of claim. The claim was issued within the two year limitation period following the accident, but was served more than two years after the expiry of the six month limit to serve a statement of claim set out in r. 14.08(1) of the Rules of Civil Procedure. By the time the claim was served, the limitation period had expired. Therefore, the practical effect of the motion judge’s order was to prevent the plaintiff from pursuing his claim.

I have trouble with this reasoning.  The proceeding in respect of the claim was commenced in time, which means there can be no limitations defence.  I gather that the motion judge found late service rendered the proceeding a nullity (or struck out the statement of claim?).  The motion judge’s decision isn’t available, so we can only speculate.  Either way, the impact of the decision was evidently that there was no longer a proceeding, and so it became necessary for the plaintiff to commence a new proceeding in respect of the same claim, but this new proceeding was out of time.

The Court of Appeal seems to have taken for granted that non-compliance with r. 14.08(1) nullifies (practically, if not technically) a proceeding.  I’m not sure this is necessarily so.