Mar 1, 2017

When Should a Court Refuse to Recognize a Foreign Divorce?

Zhang v. Lin, 2010 ABQB 420 (CanLII)

When Should a Court Refuse to Recognize a Foreign Divorce: Zhang v. Lin, 2010 ABQB 420.

February 28, 2017

Robert K. Omura

The Facts

The parties were married in China in 1986. Both were engineers in China. They had lived in Alberta for 14 years. Their only child, who was 22 years old, had been accepted to the Faculty of Medicine at the University of Alberta.

The wife was 52 and working 4 days a week due to health issues. She earned $11/hour. Her income for 2008 was $34,252. The husband earned $80,000 in 2008 for 8 months work.

In February, 2008, the husband moved to Texas. In Texas, an individual must reside in the state for at least 6 months before commencement of divorce proceedings. A few days short of 6 months (August 7, 2008), the husband applied for a Texas divorce, stating that the family property was worth less than $50,000. He was granted the divorce which did not require him to pay child support for his adult child or spousal support and which made an unequal distribution of the matrimonial property. In 2009, the husband moved to Virginia.

In September, 2008, the wife filed for a divorce in Alberta. The husband defended the action in October, 2008, saying that he would pay $836 a month for support of his son until he gets his final degree or stops attending university, or until he is 26 years old in May, 2014. He also agreed that the matrimonial property should be divided in a just and equitable manner, and that the wife could remain in the matrimonial home until 2014 in lieu of support.

From as early as September, 2008, the wife’s lawyer was in contact with the Texas court. In a letter from the wife’s lawyer to the Texas court on January 13, 2009, the wife’s lawyer advised the Texas court that the wife was not opposed to a Texas divorce, however, there were outstanding issues of custody, access, child support, spousal support and property division, so the proper forum for the divorce and corollary relief was Alberta. The Texas court granted the husband’s divorce on January 21, 2009.

In November, 2009, the husband attempted to amend his Statement of Defence, referring to the decision of the Texas court.

At the time of the hearing, the matrimonial property was worth about $820,000, including a home worth about $320,000, and an RRSP in the husband’s name worth about $192,500 and one in the wife’ name worth about $97,000.

The Disposition of the Case

Veit J. refused to recognize the Texas divorce. Since there was insufficient information available as to the husband’s ability to pay child support or spousal support, those matters, along with the division of matrimonial property, had to go to trial.

First, she considered the Divorce Act. Section 22(1) of the Divorce Act did not apply because the husband had not been a resident of Texas for at least one year prior to commencement of the Texas divorce proceedings. Section 22(1) states:

22(1) A divorce granted, on or after the coming into force of this Act, pursuant to a law of a country or subdivision of a country other than Canada by a tribunal or other authority having jurisdiction to do so shall be recognized for all purposes of determining the marital status in Canada of any person, if either former spouse was ordinarily resident in that country or subdivision for at least one year immediately preceding the commencement of proceedings for the divorce.

Second, she considered the common law of conflicts in divorce cases, citing Orabi v. El Qauod, 2005 NSCA 28; Pitre v. Nguyen, 2007 BCC 161; and the text of Castel and Walker, Canadian Conflict of Laws. Section 22(3) retains the common law rules for conflicts. In Orabi, the Nova Scotia Court of Appeal noted that:

[14] Section 22(3) recognizes common law principles governing the recognition of foreign divorce decrees. Domicile was the traditional common law test. Following the decision of the House of Lords in Indyka v. Indyka [1967] 2 All E.R. 689, Canadian courts added “real and substantial connection” as a basis for recognition: Powell v. Cockburn (1976), 68 D.L.R. (3d) 700 (S.C.C.) at 707-708; Holub v. Holub (1976), 71 D.L.R. (3d) 698 (M.C.A.) at 699-700. Later cases have stated subcategories to these two basic tests for recognition of a foreign divorce. These subcategories are summarized by Julien Payne, Payne on Divorce, 4th ed., p. 111:

… Section 22(3) of the Divorce Act expressly preserves pre-existing judge made rules of law pertaining to the recognition of foreign divorces. It may be appropriate to summarize these rules. Canadian courts will recognize a foreign divorce: (i) where jurisdiction was assumed on the basis of the domicile of the spouses; (ii) where the foreign divorce, though granted on a non-domiciliary jurisdictional basis, is recognized by the law of the domicile of the parties; (iii) where the foreign jurisdictional rule corresponds to the Canadian jurisdictional rule in divorce proceedings; (iv) where the circumstances in the foreign jurisdiction would have conferred jurisdiction on a Canadian court had they occurred in Canada; (v) where either the petitioner or respondent had a real and substantial connection with the foreign jurisdiction wherein the divorce was granted; and (vi) where the foreign divorce is recognized in another foreign jurisdiction with which the petitioner or respondent has a real and substantial connection.

Although the aforementioned rules were established by decisions of the English courts, they have generally been followed by Canadian courts, at least in those provinces that adhere to the common law tradition.

To the same effect: Castel and Walker, Canadian Conflict of Laws, 5th ed., p. 17-6.

To these six factors, Fichaud J.A. in Orabi considered two more based on the rules of natural justice from Castel and Walker: (1) fraud; and (2) contrary to public policy. Here, Fichaud J.A. said:

Rules of Natural Justice

[17] I would dismiss the appeal for a second and independent reasons. Castel, p. 17-8 states:

Grounds for Refusing to Recognize Foreign Divorces

Although the foreign court that granted the decree may be jurisdictionally competent in the eyes of Canadian law, recognition will be refused if the respondent did not receive notice of the proceeding, especially if fraud was present. The jurisdiction of the foreign court must not be established “through any flimsy residential means” and the petitioner must not have resorted to the foreign court for any fraudulent and improper reasons such as solely “for the purpose of obtaining a divorce”. The foreign decree must not be contrary to Canadian public policy. Denial of natural justice may also be a reason for refusing recognition.

Payne, p. 112 states:

A foreign divorce may also be denied recognition where principles of natural justice have been contravened.

To the same effect: Indyka at pp. 706, 715 and 731.

The Court considered whether the husband had a real and substantial connection with Texas at the time he applied for the divorce. On this point, the evidence of the parties was that the husband moved to Texas to live and work, and had no intention of returning to Canada, even to visit. On the strength of that connection to Texas, the Court found that the husband had a real and substantial connection with Texas. However, the disparity between Texas law and Canadian law led Veit J. to reject the Texas divorce, since the Court could not recognize the Texas divorce and also grant the wife corollary relief. The Court at para. 70 considered that: (a) in the past ten years, the family had closer ties to Canada than to Texas, which could not be ignored given the very different results of a Texas divorce from an Alberta divorce; (b) Canadian law recognizes that adult children may be entitled to child support but Texas law does not; and (c) Texas law does not appear to give a former spouse’s claim for support similar consideration as in Canada.

However, the paucity of information on the husband’s ability to pay and the matrimonial property left the Court no choice but to put all matters over for trial.

The Marzara case

In Marzara v. Marzara, 2011 BCSC 408, the Court dealt with complicated and very acrimonious divorce proceedings involving difficult parties which lead Ross J. at para. 12 to “come to the conclusion that I cannot rely upon the evidence of either party”. Unlike Zhang, which was a chambers hearing, Marzara was a trial.

The parties married in Iran in 1980 and immigrated to Canada in 1986. The wife commenced divorce proceedings in B.C. in 2006, to which the husband filed a Statement of Defence, and followed by a judicial case conference in September, 2006. In May, 2007 the husband obtained an Iranian divorce. In June, 2007, the husband amended his statement of defence, saying that the Iranian divorce was final on the financial rights of the parties with respect to the Iranian assets and alimony.

Ross J. at paras. 73 and 79, citing Pitre at para. 13, held that a foreign divorce may not be recognized if it is contrary to Canadian public policy. Here, as in Zhang, there was a real and substantial connection to Iran. However, with over a million dollars of assets, an award to the wife of $30,000 and $1,500 for spousal support would not be fair. Further, the husband had responded to the wife’s divorce proceedings in B.C. In addition, the husband testified that the purpose of the Iranian divorce was to ensure that the B.C. court would not make an order concerning spousal support and the division of assets.

The Court granted the wife spousal support of an indefinite duration of $9,200 per month with no provision for a review. The interim order that each party pay the child $1,200 while the child remains in school was to continue. Family assets were to be divided so that the wife received $627,919, to be payable from the sale of the parties’ house.

Proceedings to Recognize a Foreign Judgment

A foreign divorce judgment has no force and effect in Canada until it is recognized by the court in Canada: see generally, Rand J. at pp. 143-44 and Locke J. at pp. 151-52 in Ontario (A.G.) v. Scott, [1956] S.C.R. 137. In R.N.S. v. K.S., 2013 BCCA 406, the father sought to have an Australian divorce recognized in B.C. The summary trial judge held that the Australian divorce was valid. There were no policy reasons to overturn the decision for fraud or public policy reasons. The wife could have applied for spousal support in Australia under similar grounds as in Canada. Further, a foreign divorce does not preclude a former spouse from seeking support under provincial legislation. Willcock J.A. said:

[47] A public policy argument cannot be made out because there is no basis upon which it can be said the appellant would be disentitled to support as a result of the recognition of the Australian divorce court.

Application to the Cheng v. Liu Case

It is not clear from the facts of Cheng v. Liu, 2017 ONCA 104 whether the wife argued that the Chinese divorce should not be recognized in Canada. If not res judicata or otherwise estopped, a collateral attack, or an abuse of process, from the first application before the Ontario court, it may be possible to argue that the Ontario court should not recognize the Chinese divorce on public policy grounds, despite the order of Baltman J. to stay the Ontario divorce proceedings in favour of the Chinese proceedings in 2009. It could be argued that his breach of the Baltman J. conditions, described at para. 13, rendered it impossible for the Chinese court to make proper findings as to spousal support.

The Court of Appeal noted at para. 14 that “[b]ecause of the way disclosure works in the Chinese legal system, the respondent did not learn that the appellant had not made full financial disclosure until the release of the judgment in China”. The Chinese court asked the husband to make disclosure. Contrary to the order of the Chinese court, the husband did not provide full disclosure of his Canadian property and income. Not only did this result in the Chinese court refusing jurisdiction for support and equalization, this was also contrary to the Baltman J. order in 2009 which compelled the husband to obey the procedural orders of the Chinese court.

For these reasons, it could be said that the Ontario court should not recognize the Chinese divorce.