



COURT OF APPEAL FOR ONTARIO

CITATION: Yaiguaje v. Chevron
    Corporation, 2014 ONCA 40

DATE: 20140116

DOCKET: M43289 and M43291 (C57019)

MacPherson J.A. (In Chambers)

BETWEEN

Daniel Carlos Lusitande Yaiguaje,
    Benancio Fredy Chimbo Grefa, Miguel Mario Payaguaje Payaguaje, Teodoro Gonzalo
    Piaguaje Payaguaje, Simon Lusitande Yaiguaje, Armando Wilmer Piaguaje
    Payaguaje, Angel Justino Piaguaje Lucitante, Javier Piaguaje Payaguaje, Fermin
    Piaguaje, Luis Agustin Payaguaje Piaguaje, Emilio Martin Lusitande Yaiguaje,
    Reinaldo Lusitande  Yaiguaje, Maria Victoria Aguinda Salazar, Carlos Greea
    Huatatoca, Catalina Antonia  Aguinda Salazar, Lidia Alexandria Aguinda Aguinda,
    Clide Ramiro Aguinda  Aguinda, Luis Armando Chimbo  Yumbo, Beatriz Mercedes
    Grefa Tanguila,
Lucio Enrique Grefa Tanguila, Patricio Wilson Aguinda
    Aguinda, Patricio Alberto  Chimbo Yumbo, Segundo Angel Amanta Milan, Francisco Matias
    Alvarado Yumbo, Olga Gloria Grefa Cerda, Narcisa Aida Tanguila Naryaez, Bertha
    Antonia Yumbo Tanguila, Gloria Lucrecia Tanguila Grefa, Francisco Victor
    Tanguila Grefa, Rosa Teresa Chimbo Tanguila, Maria Clelia Reascos Revelo,
    Heleodoro Pataron Guaraca, Celia Irene Viveros Cusangua, Lorenzo Jose Alvarado
    Yumbo, Francisco Alvarado Yumbo, Jose Gabriel Revelo Llore, Luisa Delia
    Tanguila Narvaez, Jose Miguel Ipiales Chicaiza, Hugo Gerardo Camacho Naranjo,
    Maria Magdalena Rodriguez Barcenes, Elias Roberto Piyahuaje Payahuaje, Lourdes
    Beatriz Chimbo Tanguila, Octavio Ismael Cordova Huanca, Maria Hortencia 
    Viveros Cusangua, Guillermo Vincente Payaguaje Lusitande, Alfredo Donaldo
    Payaguaje Payaguaje and Delfin Leonidas Payaguaje  Payaguaje

Plaintiffs (Respondents/Responding Parties)

and

Chevron Corporation
,

Chevron Canada Limited

and

Chevron
    Canada

Finance

Limited

Defendants (Appellants/
Moving Parties
)

Clarke Hunter, Q.C. and Robert Frank, for the moving
    party Chevron Corporation

Benjamin Zarnett and Peter Kolla, for the moving party
    Chevron Canada Limited

Alan J. Lenczner, Q.C., and Brendan Morrison, for the
    responding parties

Heard: January 15, 2014

On motion to stay the Order of this court dated December
    17, 2013.

MacPherson
    J.A.:

[1]

The
    moving parties, Chevron Corporation and Chevron Canada Limited, seek a stay of
    the Order of this court dated December 17, 2013, which held that the Superior
    Court of Justice has jurisdiction to hear an action by the responding parties seeking
    recognition and enforcement of a judgment for approximately $9.51 billion
    rendered by Ecuadors National Court of Justice.  The moving parties were
    ordered to file statements of defence by January 16, 2014 and to pay costs of
    $100,000 ($50,000 each) to the responding parties.

[2]

Pursuant
    to s. 65.1(1) of the
Supreme Court Act
, R.S.C. 1985, c. S-26 (
SCA
),
    the moving parties may bring their motion for a stay before a single judge of
    this court if they have served and filed a notice of application for leave to
    appeal.  The moving parties did so three days ago, on January 13, 2014.

[3]

In
RJR
-
MacDonald
    Inc. v. Canada (Attorney General)
, [1994] 1 S.C.R. 311, at p. 334, the
    Supreme Court of Canada articulated a three-part test for obtaining a stay of a
    judgment pending appeal: (1) is there a serious question to be tried (i.e., to
    be determined on the appeal); (2) will the moving party suffer irreparable harm
    if the stay is not granted; and (3) does the balance of convenience favour
    granting the stay?

(1)

Serious question

[4]

In
    Ontario, as well as in other jurisdictions, this component of the
RJR
-
MacDonald
test has been modified in the context of stays pending leave to appeal
    applications to the Supreme Court of Canada.  This court, and other appellate
    courts, have held that a judge hearing a stay motion must engage not only in an
    assessment of the merits of the proposed appeal (i.e., is there a serious issue
    to be determined); in addition, the judge must consider the factors in s. 40(1)
    of the
SCA
and assess whether there is some merit in the leave application,
    and especially whether the appeal raises an issue of public importance.

[5]

As
    explained by Laskin J.A. in
BTR Global Opportunity Trading Limited v. RBC
    Dexia Investor Services Trust
, 2011 ONCA 620,

283 O.A.C. 321,
at paras. 18 and 19:

Ordinarily, the threshold for showing a
    serious issue to be adjudicated is low.  However, the criteria for
    granting leave to appeal to the Supreme Court of Canada add another layer to
    this component of the test.  Under s. 40(1) of the
Supreme Court Act
,
    R.S.C. 1985, c. S-26, the Supreme Court of Canada typically grants leave to
    appeal only in cases of public or national importance.  Thus, a provincial
    appellate court judge hearing a motion for stay pending leave to appeal to the
    Supreme Court of Canada must take account of the stringent leave requirements
    in the
Supreme Court Act
: see
Merck
    & Co. v. Nu-Pharm Inc.
(2000), 5 C.P.R. (4th) 417
    (F.C.A.) and
Ontario Public Service Employees Union v. Ontario
    (A.G.)
(2002), 158 O.A.C. 113.

The Supreme Court of Canada itself decides
    when leave should be granted and does not give reasons for doing so. As
    Rothstein J.A. noted in
Merck
, this puts provincial appellate court
    judges in a somewhat awkward position. Nonetheless, the stay test requires
    that I make some preliminary assessment of the merit of the leave motion.

[6]

I
    have no hesitation in concluding that the moving parties have established both
    branches of the serious question component of the test.

[7]

The
    proposed appeals raise at least three serious questions: (1) the proper test to
    determine the jurisdiction of a provincial superior court to hear and determine
    an action for recognition and enforcement of a foreign judgment; (2) the test
    for jurisdiction of a provincial superior court when faced with a claim to recognize
    and enforce a foreign judgment against a non-party to the foreign judgment; and
    (3) potentially, consideration of the role of a corporate veil-piercing
    analysis with respect to related corporations in the context of the recognition
    and enforcement of a foreign judgment against a corporate defendant.

[8]

I
    also conclude that these legal questions easily meet the public importance
    component of s. 40(1) of the
SCA
.  They raise significant legal issues
    that lie at the heart of private international law.

(2)

Irreparable harm

[9]

The
    moving parties assert that they will suffer irreparable harm in two respects if
    a stay is not granted.

[10]

First, the moving
    parties submit that, without a stay, they will be forced to choose between
    risking attornment to the jurisdiction of the Ontario court by filing a defence
    by January 16, 2014 or being noted in default and subjected to default
    proceedings, either of which would irreparably harm their proposed appeals by
    rendering them moot.

[11]

I do not accept this
    submission.  This court has stated that where a court order requires a party to
    file a defence, compliance with the order, including related conduct of
    depositions and discoveries, does not constitute attornment in the face of an
    ongoing jurisdictional challenge: see
Van Damme v. Gelber
, 2013 ONCA
    388, 115 O.R. (3d) 470, at para. 23.  Moreover, and importantly, the responding
    parties have explicitly stated in their factum (para. 28) that if the moving
    parties simply provide them with their statements of defence (without formally
    filing them), the respondents are content to receive the same, without
    prejudice to the Chevron companies Leave to Appeal Applications and will not
    claim that by doing so they have attorned to the jurisdiction of the Ontario
    Superior Court of Justice.  See
BTR Global
, at para. 31.  I see no
    reason not to accept and respect this undertaking.

[12]

Second, the moving
    parties contend that, without a stay, if the costs ordered by this court are
    paid to the
ex juris
plaintiffs who are resident in Ecuador, there is
    no assurance they will be returned if leave to appeal is granted and the appeal
    succeeds.

[13]

In a case that has
    lasted 20 years in several countries and continents, where the existing
    judgment in question is for $9.51 billion, and where Chevron has been
    represented by excellent commercial litigators in those countries, I find this
    submission surprising.  The costs award of this court is for $100,000, a small
    amount against the backdrop of the reality of this
uber
-expensive,
    worldwide litigation.  In any event, my assumption is that
all
parties
    in this litigation, be they Chevron or Ecuadorian villagers, will respect final
    costs orders of the relevant Canadian court, especially the Supreme Court of
    Canada.

[14]

Nonetheless, as noted
    in
RJR-MacDonald
, at p. 341,

Irreparable refers to the nature of the harm
    suffered rather than its magnitude. It is harm which either cannot be
    quantified in monetary terms or which cannot be cured, usually because one
    party cannot collect damages from the other.  The fact that one party may be
    impecunious does not automatically determine the application in favour of the
    other party who will not ultimately be able to collect damages, although it may
    be a relevant consideration.

[15]

While the prospect of
    the moving parties permanently losing the costs awarded by this court after
    succeeding on appeal may not represent a serious harm, it may reflect an
    irreparable harm as that  term is defined in
RJR-MacDonald
.

[16]

In conclusion, the
    moving parties have made a very weak showing that they will suffer irreparable
    harm if the stay is not granted.

(3)

Balance of convenience

[17]

The third branch of
    the test concerns the balance of convenience as between the parties, including
    which of the parties will suffer the greater harm from the stay being granted
    or refused: see
RJR
-
MacDonald
, at p. 342.

[18]

In my view, the
    balance of convenience favours the moving parties.  The jurisdictional issue
    they raise is a serious one that deserves to be resolved before they are forced
    to take steps to mount a substantive defence in the Ontario action.  The moving
    parties have moved expeditiously to file their leave applications in the
    Supreme Court of Canada; they did so in less than half the 60-day period
    allowed by the
SCA
.  In almost all cases, the Supreme Court of Canada
    disposes of leave applications in a timely fashion, approximately three to four
    months.  Accordingly, it is likely that these applications for leave will be
    determined by late spring.  Obviously, if the Supreme Court of Canada grants
    leave, there would be no point in any of the parties taking further steps in
    the Ontario action until the jurisdiction issue is resolved by that court. 
    Alternatively, if the Supreme Court of Canada denies leave, the Ontario action
    can proceed on the merits, with only a few months pause awaiting that courts
    decision.

Conclusion

[19]

The serious issue
    and balance of convenience factors favour the moving parties.  The irreparable
    harm factor favours the responding parties.  In these circumstances, it is
    worth recalling what Laskin J.A. said in
Circuit World Corp. v. Lesperance
(1997), 33 O.R. (3d) 674 (C.A.), at p. 677: These three criteria are not
    watertight compartments.  The strength of one may compensate for the weakness
    of another.  Generally, the court must decide whether the interests of justice
    call for a stay.  In a similar vein, Laskin J.A. said in
BTR Global
,
    at para. 16: These three components of the test are interrelated in the sense
    that the overriding question is whether the moving party has shown that it is
    in the interests of justice to grant a stay.

[20]

In my view, a stay is
    justified in the interests of justice.  For me, the determinative factor is the
    balance of convenience analysis set out above.  The jurisdictional issue raised
    by the moving parties in their applications for leave to appeal is a
    significant one.  They have taken appropriate and timely steps to apply for
    leave to appeal to the Supreme Court of Canada, where it will almost certainly
    be dealt with in about three or four months.  There would be very limited
    prejudice to the responding parties from the Ontario action awaiting the
    Supreme Court of Canadas leave decisions.

Disposition

[21]

The motions are
    granted.  The Order of this court dated December 17, 2013, is stayed pending
    the determination of the leave applications to the Supreme Court of Canada.

[22]

The parties agree that
    they should bear their own costs.

Released: January 16, 2014 (J.C.M.)

J.C. MacPherson J.A.


