RS v PR: Private International Law & Lis Pendens
Lis pendens is a Latin term meaning “suit pending”. It is typically used in Canada when someone claims a first right to a piece of real property—for example, when a spouse following a divorce claims a right to the matrimonial property. This claim must be resolved before anyone else can acquire the property. RS v PR, 2019 SCC 49, is concerned with international lis pendens, a different application of the concept. International lis pendens is a mechanism under Quebec private international law that allows a party to request a stay of proceedings for a claim in Quebec, pending the outcome of a decision based on the same dispute in a foreign jurisdiction. The purpose of this is to avoid a multiplicity of proceedings with potentially different outcomes, as well as to prevent abusive forum shopping. In RS v PR, the Supreme Court of Canada (the “Court” or “SCC”) clarified the conditions for international lis pendens under the Civil Code of Quebec (CCQ), as well as the scope of discretion to deny a stay even when the conditions are met.
Facts & Procedural History
RS v PR concerned a wealthy couple who met in Paris in the 90s, had two kids together by 2002, and married in 2004 in Belgium. They lived in Belgium for tax purposes from 2004 until 2013, when the family moved to Quebec. In 2014 the wife told her husband that she wanted a divorce. Within two weeks, two separate applications for divorce were brought: the husband brought an application in Belgium on August 12th and the wife did so in Quebec on August 15th.
The wife’s application in Quebec concerned a grant of divorce, liquidation of the matrimonial regime, child custody, support for her and her children, partition of the family patrimony and payment of a compensatory allowance. The husband’s application in Belgium sought only a divorce and liquidation of the matrimonial regime.
Soon after the initial filings, the husband brought a motion for a stay of the Quebec proceedings on the basis of international lis pendens, per art. 3137 CCQ. A few months later, as is allowed under Belgian law, the husband revoked all gifts given to his wife during the duration of their marriage. These gifts included their matrimonial home, a car, stock-exchange securities, jewellery, expensive handbags, and cash gifts, totalling approximately $33 million (para 13). This revocation of gifts became the centre of the stay motion in Quebec, as it would not have been permitted under Quebec law. The trial judge believed that the Belgian law discriminated against married couples because the same ability to revoke gifts did not apply to other relationships (para 50). As a result, the trial judge found that any Belgian decision would be incapable of recognition in Quebec—one of the pre-conditions to granting a stay— because it would be manifestly inconsistent with the public order. She ultimately found that the conditions for lis pendens were not met in this case and, even if they were, she would have exercised her discretion to decline to stay the proceedings (para 21).
The Quebec Court of Appeal overturned the trial judge’s decision and ordered a stay of proceedings. It stated that the trial judge erred because she put the burden on the party bringing the motion to meet the conditions for international lis pendens, despite the presumption that a foreign decision will be recognized. The Court of Appeal found that all conditions for international lis pendens were met. It also said that where the conditions are clearly met, a court retains no discretion to make a different determination.
Justice Gascon’s Majority Opinion
Under art. 3137 CCQ, three conditions must be met: first, the claim must have been filed in the foreign forum before being filed in Quebec; second, the two claims must regard the same parties, facts, and subject; and third, the decision of the foreign authority must be susceptible to recognition in Quebec (para 40). The majority justices clarified the factors to be considered in determining whether a foreign decision is susceptible to recognition in Quebec, as well as the parameters around the exercise of discretion under art. 3137 CCQ.
First, the majority determined that the onus lies on the party bringing the motion to demonstrate that the three aforementioned criteria are met (para 47). However, the burden on that party is low when it comes to the third criterion: in cases where a decision is pending before a foreign authority, one must only demonstrate that the decision of the foreign authority could plausibly be recognized in Quebec (para 48). The majority found that the husband had discharged his burden and that all three criteria were met (para 49).
As mentioned above, the trial judge had found that the third criterion was not met—that is, a Belgian decision was at “great risk” of being unsusceptible to recognition in Quebec—because the Belgian law allowing for the unilateral revocation of any gift given in the course of marriage was inconsistent with public order (para 50). However, both the Court of Appeal and the Supreme Court said that the trial judge’s analysis was too strict. First, the majority reminded us that the CCQ article clearly states it is the decision, not the law itself that must be considered (para 51). Second, for a decision to be recognized, it simply must be capable of being “harmoniously incorporated into the legal order of the Quebec forum” (para 52). A decision that cannot be recognized in Quebec is one that “will be manifestly inconsistent with public order as understood in international relations” (para 54). The majority found that this was not true of the case before them.
On the question of a court’s exercise of discretion, the majority agreed with the trial judge that, even when all three criteria for an international lis pendens are met, the court may reject the motion for a stay (para 67). The three conditions for lis pendens do not inquire into the parties’ connection to the foreign jurisdiction, which means that, without discretion, abusive forum shopping could still occur (para 69). This discretion should be exercised in accordance with the principles governing forum non conveniens, keeping in mind that forum non conveniens can expunge the claim while lis pendens simply delays the claim before the court (paras 71-77). This means that it is appropriate for the court to exercise discretion more flexibly with respect to lis pendens decisions. The considerations include where the parties live; the location of physical evidence, experts, and witnesses; where a contract was formed; and any advantages to one party or the other depending on the forum.
The majority’s final point on the trial judge’s exercise of discretion was that, when reviewing discretionary decisions of a lower court, deference is owed to that decision-maker. The Court found that when the Court of Appeal raised concerns over the trial judge’s failure to consider whether a Quebec decision could be recognized in Belgium, it did not establish that the trial judge’s exercise of discretion was unreasonable (para 85). Therefore, its intervention on that point was inappropriate and the trial judge’s decision should be restored (para 95).
Justice Abella’s Concurring Opinion
In her sole concurring opinion, Justice Abella supported the trial judge’s determination that a decision in the Belgian court would be unsusceptible to recognition in Quebec because it would be manifestly inconsistent with public order. Under the Belgian article in question, the revocation of gifts given during marriage can be unilateral, absolute, and declared by a simple letter (para 109). The Belgian courts have no discretion in their decision on this matter, such that the intentions behind such a revocation as well as its consequences are immaterial (para 110). Justice Abella explained that this law is both discriminatory because it applies only to married couples and not other types of relationships, and allows for catastrophic economic consequences, as would befall the wife in this case (paras 111-114). It is these consequences that offend the public order, which dictates equality and agency for both spouses in marriage (para 141). Hence, Justice Abella found that the conditions for a stay were not met, and therefore it was unnecessary to consider the exercise of discretion by the trial judge (para 143).
Justice Brown’s Dissenting Opinion
Justice Brown aligned himself much more closely with the Quebec Court of Appeal in his sole dissenting opinion. He honed in on the trial judge’s findings that none of the conditions for an international lis pendens motion were met and argued that these findings discouraged a thorough consideration of her exercise of discretion. As a result, he opposed the majority’s willingness to defer to the trial judge’s exercise of discretion, which he also believed contained errors of law. For example, Justice Brown was concerned that the trial judge did not turn her mind adequately to the implications of a multiplicity of proceedings or the possibility of conflicting judgments, nor did she use her discretion to prevent abusive forum shopping (paras 172-178). Since these considerations form the basis for judicial discretion in international lis pendens decisions, Justice Brown believed her exercise of discretion was improper (para 189). He would have dismissed the appeal, with costs.
Balancing International Comity with Domestic Values
RS v PR showcases the SCC justices carefully considering their role as arbiters of international private law disputes and balancing it with a commitment to effecting justice for individual parties according to domestic laws and policies. In RS v PR, all members of the Court agreed that a foreign decision would be unsusceptible to recognition in Quebec only it if clearly violates international relations’ notion of public order, suggesting that a failure to meet this burden would occur only in very unusual circumstances. In creating this low threshold, the majority cited, among other reasons, a commitment to international comity. Comity encourages states to accept decisions made in foreign jurisdictions to promote judicial efficiency as well as to demonstrate respect and deference to other states. This is one way in which Canadian courts can and do participate in international relations.
Belgium is a democratic state with which Canada is friendly. Even so, both the trial judge and Justice Abella voiced great concern with a legal regime that allows for the unilateral revocation of gifts given during a marriage, arguing that it goes against not only our Charter of Rights and Freedoms but also international relations norms of public order. It seems to me that the majority justices were aware of the impact this decision could have on Canada’s relationship with Belgium but also appreciated Justice Abella’s perspective. As a result, the majority chose to reject the stay through an exercise of discretion, rather than finding that a Belgian judgment could not be accepted in Quebec. By affirming that judicial discretion remains open even after all three conditions for international lis pendens are met and also affirming the deference higher courts owe to trial judges, the SCC left room for Quebec courts to avoid causing a confrontation with international jurisdictions while still choosing to continue with a proceeding in Quebec. That proceeding would then accord with domestic laws and related public policy objectives. We do not often get to see the SCC justices navigate international terrain and RS v PR demonstrates the balancing and care that must be engaged when they do.