“Carry on business”: Supreme Court of Canada confirms meaning of key phrase in reciprocal enforcement statute



Canada Publication November 16, 2021


The Supreme Court of Canada (SCC) provides guidance concerning the meaning of “carrying on business” under section 3(b) of Ontario’s Reciprocal Enforcement of Judgments Act (REJA).1

Most Canadian provinces have developed reciprocal enforcement statutes, which set out a process for registration in that particular province of a judgment from a “reciprocating jurisdiction” (another Canadian province or territory, except Quebec).2 In Ontario, once registered, the judgment is treated as if it had been issued by an Ontario court. There are several defences available for the judgment debtor to resist registration. In particular, registration is barred if a judgment debtor shows it was not “carrying on business” in the jurisdiction of the original court that made the judgment.3

In HMB Holdings v Antigua, the SCC has confirmed that whether a judgment debtor “carries on business” in a province is a question of fact. It requires: (i) actual presence (such as maintaining physical premises); and (ii) business activity for a sustained period of time. Common law factors used to determine jurisdiction are directly applicable to this analysis.


In 2007, the Caribbean country of Antigua and Barbuda (Antigua) expropriated a beachfront resort property belonging to H.M.B. Holdings Ltd. In May 2014, the Judicial Committee of the Privy Council ordered Antigua to compensate HMB for the expropriation. 

In October 2016, HMB brought a common law action in the BC Supreme Court to enforce the Privy Council order. Antigua failed to defend the BC action, and HMB obtained default judgment (the BC judgment).

At the time of the BC action, Antigua had no physical presence in the province. Instead, Antigua had contracts with “authorized representatives,” each with businesses, premises and employees in BC for the purposes of the country’s Citizenship by Investment Program (CIP). The CIP encouraged investment in Antigua by granting citizenship to potential investors and their families. Introductions to investors were facilitated by the authorized representatives in BC, and Antigua paid the representatives a finder’s fee in return. 

In 2018, HMB applied to the Ontario Superior Court for an order registering the BC judgment in Ontario under REJA.

Judicial history

The Ontario Superior Court dismissed HMB’s application, finding that section 3(b) of REJA precluded the registration of the BC judgment because Antigua was not “carrying on business” in BC. HMB had tried to argue that Antigua had carried on business through its CIP and authorized representatives, but the application judge found that the CIP was a government program, not a business activity, and the representatives were not agents of the Antiguan government since they conducted their own business independently.

Alternatively, registration would be precluded by section 3(g): Antigua would have had a limitations defence if HMB had brought a common law action to enforce the original Privy Council judgment in Ontario.4 

The Ontario Court of Appeal affirmed the application judge’s analysis of “carrying on business” under section 3(b) and dismissed the appeal on that basis. It determined that it was unnecessary to consider section 3(g), which precludes registration of a judgment if “the judgment debtor would have a good defence if an action were brought on the original judgment.”

Supreme Court of Canada decision

“Carrying on business”

A majority of the SCC upheld the lower courts’ interpretation of “carrying on business” under section 3(b). The SCC did not consider the section 3(g) argument.

Although REJA does not define “carrying on business,” it is an established common law concept. At common law, “carrying on business” is part of the traditional bases of establishing jurisdiction (i.e. presence and consent to the jurisdiction). The SCC found that section 3(b) codifies this concept, and thus the jurisprudence governing common law jurisdiction is directly applicable to its interpretation.

Citing Chevron5 and Adams,6 the SCC found that “carrying on business” refers to an entity’s actual presence in the jurisdiction, plus a degree of business activity that is sustained for a period of time. Virtual presence alone will not suffice – for example, simply advertising in the jurisdiction, or having a website that can be accessed from the jurisdiction. 

Actual presence in the jurisdiction might involve, for example, maintaining a physical office or other premises, or regularly visiting the territory of the particular jurisdiction and engaging directly with customers. An “indirect” actual presence may mean the physical premises are operated by an agent on the foreign entity’s behalf. Notably, the SCC did not actually elaborate on what is meant by a “virtual presence,” or a “direct or indirect actual presence,, but there is some brief guidance in the supporting jurisprudence considered by the SCC on this point.7 

Where an entity works with representatives in the foreign jurisdiction, the court should also consider the following, non-exhaustive indicators: 

  • Was the representatives’ premises originally acquired to enable them to act on behalf of the foreign entity?
  • What financial contributions does the foreign entity make to the representatives’ business, including reimbursement for accommodation, staff costs and remuneration?
  • How much control does the foreign entity exercise over operation of the representatives’ business and what image is presented to customers? For example, do the representatives display the entity’s name at the premises and on any paraphernalia?
  • Do the representatives contract with third parties in the entity’s name and do they have authority to bind it?

There was no error in the lower courts’ conclusion; Antigua was not carrying on business in BC. Antigua had no physical presence, consulate, office or any employees or agents, nor did it direct any marketing at BC residents. The authorized representatives merely facilitated introductions to investors and completed preliminary forms; they had no decision-making abilities, and did not create the requisite physical presence. HMB’s appeal was dismissed with costs.

Obiter: Justice Côté on REJA & recognition judgments

The majority left open a question on the nature of the BC judgment and whether it fell within the definition of “judgment” under section 1(1) REJA.8 

Since the issue was not argued, the majority gave no ruling on this point; Wagner C.J. (for the majority), simply referred to the BC judgment as a “derivative judgment” – a judgment that itself enforces a judgment of a non-reciprocating jurisdiction. 

Justice Côté concurred with the majority’s conclusion on section 3(b), but her views departed on this last point: the BC judgment was a “recognition judgment” – a judgment resulting from a common law action that recognizes a foreign judgment. Recognition judgments ensure that a debt is owed and money is payable, and therefore fall squarely within the definition under section 1(1) REJA. 

Justice Côté outlined the purpose of REJA and recognition judgments. She observed that, once a recognition judgment is issued in a reciprocating jurisdiction, statutes like REJA relieve a judgment creditor from having to bring multiple common law actions in different jurisdictions where the debtor’s assets could be located. This saves judicial resources throughout the country, prevents the risk of contradictory recognition judgments in different provinces or territories, and ensures maximum enforceability for the debt.


The decision signals an approach to how reciprocal enforcement statutes should be interpreted going forward – in particular, the applicability of common law jurisprudence on jurisdiction. This applies not just in Ontario, but across the provinces with similar reciprocal enforcement legislation. 

Practically, the exclusion of “virtual” presence from the definition of “carrying on business” is also interesting, given the shift we have seen in entities operating remotely in response to the pandemic. It is unclear how far the definition will be applied to other areas of law that involve considering if an entity is “carrying on business” in a particular area, such as laws requiring extra-provincial business registrations.


1   Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R. 5.

2   For example, the Reciprocal Enforcement of Judgments Act, R.S.A. 2000, c. R-6 in Alberta; the Court Order Enforcement Act, R.S.B.C., 1996, c. 78 in BC; the Reciprocal Enforcement of Judgments Act, C.C.S.M., c. J20 in Manitoba; the Reciprocal Enforcement of Judgments Act, S.S. 1996, c R-31 in Saskatchewan.

3   REJA, section 3(b), assuming it did not otherwise consent or submit to the original proceedings.

4   Section 3(g) REJA precludes registration if the judgment debtor would have a good defence if an action were brought on the original judgment, such as a common law action to enforce the Privy Council judgment in Ontario. The Ontario Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, section 4, provides for a two-year limitation period. The Privy Council judgment was obtained in May 2014, and HMB did not bring its common law enforcement action until October 2016 (the BC Limitation Act, S.B.C. 2012, c. 13, section 7, provides for a ten-year limitation period).

5   Chevron Corp. v. Yaiguaje, 2015 SCC 42.

6   Adams v. Cape Industries Plc., [1990] 1 Ch. 433.

7   Club Resorts v Van Breda, 2012 SCC 17, para 87; Wilson v Hull, 1995 ABCA 374, paras 12-16.

8   Section 1(1) REJA defines “judgment” as “a judgment or an order of a court in any civil proceedings whereby any sum of money is payable” 

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