Yes, I agree. Chevron Corp. and any of its US subsidiaries are prone to execution on an enforceable foreign judgment. The issue is whether Chevron Corp. has no liability in any other jurisdiction; a dubious proposition, at least from traditional tort theory and respondeat superior. That said, the Ecuador judgment is against Chevron Corp. only. If there is no horizontal or vertical integration, then enforcement is a fool’s errand. Beyond this, Ontario has absolutely no connection to Chevron, except that one Mississauga office. if anything, the enforcement action should have been commenced in B.C. or Alberta where the Canadian subsidiaries are headquartered.

The appeal will be interesting.

Thanks, Antonin, for commenting! I question whether it makes sense to regard this as a case of Chevron “[making] itself judgment-proof,” since there’s no question that the LAPs would have a complete remedy against Chevron in the United States—if they could establish that the Ecuadoran judgment was entitled to recognition and enforcement. If Chevron removed its assets from Ecuador, then I think you have a point. But as to any third country, it doesn’t seem to me that the LAPs have any basis for chiding Chevron for organizing its business however it wishes.

Here are my few observations having read Justice Brown’s decision.

The decision reflects the correct state of the Canadian law of jurisdiction in the context of recognition and enforcement of foreign judgments. Despite Chevron’s press releases and media reports to the contrary, the Ontario court denied Chevron’s motion to set aside service ex juris (i.e. service out of Ontario) on the Chevron defendants, including the US parent and the Canadian subsidiaries. The implication is that the Ontario court has in personam (personal) jurisdiction over all of the Chevron defendants.

Brown J. rejected the plaintiffs’ ‘reverse veil piercing’, which I discussed in my guest blog post at Letters Blogatory previously.

As you correctly point out, the Ontario court did not dismiss the enforcement proceedings. It did stay the proceedings without prejudice, since the absence of exigible assets is irrelevant in light of the common law and the analogues of the Reciprocal Enforcement of Judgments (United Kingdom) Act (REJUKA) and the International Commercial Arbitration Act, which adopts the UNCITRAL Model Law and New York Convention.

In my view, the fact that Chevron Corporation will never transfer assets into Ontario or any other Canadian province or territory is irrelevant. A judgment creditor is entitled to seek enforcement of a foreign judgment in any Canadian court. Unlike other common law jurisdictions, The Ontario court only plays a passive, supervisory role in post-judgment enforcement under Rule 60 of the Rules of Civil Procedure. The judgment creditor may take whatever steps it deems necessary to enforce a judgment (including a foreign judgment once deemed enforceable that is homologated or domesticated into an Ontario judgment) for writs of seizure of sale of land or property, writs of possession, garnishment, etc. Once a judgment is final, the limitation period to enforce is 20 years.

Interestingly, the decision is counter-intuitive on the issue of practicality of enforcement in lieu of any exigible assets. To my mind, the plaintiffs’ reverse veil-piercing theory is premised on the corporate structure of Chevron Corp. and Chevron Canada set up to avoid any inter-corporate liability. This begs the question of whether Chevron Corp. has conducted itself in the underlying Ecuador litigation to make itself judgment-proof, while enjoying the obvious benefits of marketing itself as a multinational or global corporation. Further, while Justice Brown is undoubtedly correct in concluding that Chevron Corp. and Chevron Canada are distinct legal entities with separate and independent boards of directors, the interesting question is whether there is any history of inter-corporate transactions that point to Chevron Corp. transferring assets to Chevron Canada on a non-arms’ length basis that belies its argument that it has no presence, dealings or assets in Canada.

I did find one Canadian casem that admittedly only obliquely suggests a history of inter-corporate dealings between parent and subsidiary, Stoney Tribal Council v. PanCanadian Petroleum Ltd., 1998 ABQB 286 (CanLII).

Appendix C to the decision lists a Lease History and reads in part:

APPENDIX C

LEASE HISTORY

The first lease was Lease 119-2220. It was granted to the California Standard Company on December 1, 1962. It was renewable for further terms of 10 years. The California Standard Company changed its name to Chevron Standard Limited (“Chevron”) on August 11, 1965
…

On September 14, 1983, Chevron transferred its 25 per cent undivided interest in Lease OL-5279 to Chevron Canada Limited (“Chevron Canada”). Lease OL-5279 was continued under IOGR, s. 18 for another 5 year term to November 30, 1992. On February 18, 1992, Chevron Canada transferred its 25 per cent undivided interest in Lease OL-5279 to PanCanadian ….

Admittedly, this is not a significant corporate presence, but it does negate the argument of a seamlessly distinct inter-corporate relationship between parent and subsidiary or no Canadian involvement by Chevron Corp. from its inception to date.

Finally in response to your posed questions:

First, what are the LAPs’ appellate options, and what will be the standard of appellate review?

Whether Ontario has jurisdiction to hear this action is a question of law and the standard of review is correctness. [Black v. Breeden, 2010 ONCA 547 (CanLII) (Ont. C.A.]

Second, assuming (contrary to fact, in this case) that the judgment debtor held shares of stock in a Canadian corporation, are those shares the kind of property that can be taken on execution, and if so, where can a judgment creditor seek that remedy? Just by way of comparison, in Massachusetts shares of stock cannot be taken on execution, but we have developed equitable and statutory “reach and apply” remedies that allow creditors to reach shares.

Yes, shares are exigible and can be seized by way of a writ of seizure and sale of property (writ of execution). The Personal Property Security Act, R.S.O. 1990, c.P.10 defines “intangible” to mean all personal property, including choses in action, that is not goods, chattel paper, documents of title, instruments, money or investment property.