Executive Summary: Key Legal and Evidentiary Issues

• Recognition and enforcement in Ontario of a joint and several New York Supreme Court monetary judgment for USD 2,251,210 arising from an unpaid settlement agreement.
• Legal limits on defences to foreign judgment enforcement, including arguments about jurisdiction, voluntariness/duress in entering the settlement, and compatibility with Ontario law.
• Proper interpretation and application of Ontario civil procedure rules on amendments, crossclaims, and third party claims (Rules 26, 28, and 29), including the distinct prejudice tests.
• Whether crossclaims and third party claims for contribution and indemnity can be advanced in an Ontario enforcement action when the foreign court has already imposed joint and several liability.
• The role of delay and lack of explanation in seeking late third party claims, and how this factors into prejudice to the plaintiff’s pending summary judgment motion.
• Determination that contribution and indemnity issues are part of the underlying substantive dispute and cannot be relitigated in a foreign judgment enforcement proceeding.

Background and facts of the dispute

The litigation stems from a business dispute that was originally litigated in the Supreme Court of the State of New York. On November 23, 2020, Ephraim Atwal and a co-plaintiff, Sandesh Singh, commenced an action in New York against three defendants: Brian Semkiw, Rui Mendes, and Blair Baker. The New York Action was resolved by minutes of settlement rather than a full trial. Under those minutes, Semkiw, Mendes, and Baker agreed to pay a total of USD 2,000,000 to Atwal and Singh in eight instalments. The settlement also contained an escalation mechanism: if the payments were not made as agreed, Atwal and Singh would be entitled to a judgment for USD 2,250,000, minus any sums recovered, plus costs and disbursements. When no payments were made by the first due date of November 2, 2024, Atwal and Singh obtained judgment in New York on December 26, 2024. The judgment was joint and several as against all three defendants and totaled USD 2,251,210, reflecting the agreed uplift plus costs or related amounts. In 2025, Atwal alone commenced the Ontario proceeding (the “Ontario Action”) to recognize and enforce this New York judgment. Singh is not a plaintiff in Ontario, and Baker is not named as a defendant in Ontario; only Semkiw and Mendes are defendants in the Ontario Action. Atwal’s Ontario claim seeks recognition and enforcement of the New York judgment in the amount of USD 2,251,210 against Semkiw and Mendes on a joint and several basis.

Procedural history in the Ontario action

Atwal issued his Ontario statement of claim on May 29, 2025, seeking recognition and enforcement of the foreign judgment. Mendes delivered a statement of defence on July 18, 2025. In it, he attacked several aspects of the New York proceedings: he argued that the New York court lacked a real and substantial connection to the dispute and was not a court of competent jurisdiction, that his consent to New York’s jurisdiction and to the settlement was obtained under duress, that the settlement was not voluntary or enforceable, and that the New York judgment was flawed, imprecise, not final, and contrary to Ontario law. He also pointed to the fact that only one of the New York plaintiffs and only two of the three New York defendants were parties in the Ontario Action. Atwal replied to Mendes’ defence on August 19, 2025, disputing those assertions. Semkiw served a notice of intent to defend on August 8, 2025, and his statement of defence followed on September 3, 2025, advancing broadly similar positions to Mendes, including challenges to jurisdiction and enforceability. On November 17, 2025, Atwal served a motion for summary judgment to obtain quick enforcement of the New York judgment in Ontario; that motion remained outstanding, with no responding materials filed and no agreed timetable.

Defence amendments, proposed crossclaims and third party claims

In December 2025, after the summary judgment materials had been served, Semkiw and Mendes notified Atwal that they intended to amend their statements of defence. On January 30, 2026, both defendants served proposed amended defences and crossclaims. Initially, those crossclaims ran not only between Semkiw and Mendes but also purported to extend to Baker, even though he was not yet a party in Ontario. The defendants later revised their approach: they removed crossclaims against Baker and instead proposed to issue third party claims against him for contribution and indemnity, contingent on any liability they might face to Atwal in the Ontario Action. The proposed defence amendments also sought to add further detail regarding the circumstances of the New York settlement—particularly why, in their view, it was not voluntary and should be vulnerable to challenge. The crossclaims and proposed third party claims were framed as contribution and indemnity claims only, aimed at reallocating responsibility among the judgment debtors if Atwal succeeded in enforcing the New York judgment in Ontario. Because there was no consent from Atwal to either the crossclaims or the third party claims, the defendants required leave of the court and thus brought motions that were scheduled at triage court on February 12, 2026.

Legal framework for amendments, crossclaims, and third party claims

The court carefully distinguished the procedural rules governing amendments, crossclaims, and third party claims. Under Rule 26.01 of the Ontario Rules of Civil Procedure, the court must generally grant leave to amend pleadings at any stage unless non-compensable prejudice would result, or unless the amendment is scandalous, frivolous, vexatious, an abuse of process, or discloses no reasonable cause of action. The Court of Appeal has confirmed that this test applies to amendments broadly: an amendment should be allowed unless it would have been struck under Rule 21.01(1)(b) if pleaded originally, meaning it must at least be legally tenable. To add crossclaims, Rule 28.03 directs that a defendant who has already delivered a defence may amend it in accordance with the Rule 26 regime to insert a crossclaim. The plaintiff’s suggestion that the stricter third party claim test under Rule 29 governs amendments to add crossclaims was rejected; the judge held that Rule 28.04(1)(b) deals with late delivery of a defence and crossclaim where the defendant is in default, not with amendments to an already-delivered defence. By contrast, third party claims fall under Rule 29.01 and 29.02. A third party claim must ordinarily be issued within 10 days of the statement of defence; otherwise, the defendant needs the plaintiff’s consent or leave of the court. In deciding whether to grant leave, the court must consider prejudice to the plaintiff, and this prejudice need not be “non-compensable.” Factors relevant to prejudice under Rule 29 include the length of delay, availability of facts, explanations for non-compliance and delay, potential duplication of discovery, impact on trial scheduling, and the apparent merit of the proposed third party claim.

Legal principles governing enforcement of foreign judgments

The endorsement reiterates the core common law approach to enforcing foreign judgments in Ontario. A foreign judgment is treated as a debt, and the enforcing court generally does not revisit the foreign court’s substantive or procedural law, provided the foreign court was of competent jurisdiction, the judgment is final, and no recognized defences apply. The principal defences are fraud, denial of natural justice, and public policy, along with forum non conveniens where the defendant has a basis to say the foreign forum was inappropriate. Once a real and substantial connection between the dispute and the foreign jurisdiction is established, the foreign judgment is prima facie enforceable, and the Ontario court will not relitigate the underlying merits or reallocate liability already determined abroad. The Supreme Court of Canada’s decision in Beals v. Saldanha is cited for the narrowness of these defences and the limited circumstances in which Canadian courts may refuse recognition of foreign judgments. The court also notes that, while new defences can arise in exceptional cases, they remain tightly constrained to guard against unfairness without undermining comity.

Application of the rules to amendments of the defences

Because Atwal consented to the defendants’ proposed amendments that expanded factual detail about the voluntariness of the New York settlement, leave to amend the defences for that purpose was straightforward. The judge found no non-compensable prejudice and no legal infirmity in allowing the defendants to more fully plead the circumstances they say rendered the settlement involuntary. This part of the relief was granted, aligning with the permissive stance of Rule 26.01 toward amendments that clarify or complete existing theories of defence, provided they are not abusive or futile.

Rejection of crossclaims for contribution and indemnity

The more contentious question was whether Semkiw and Mendes could insert crossclaims against each other for contribution and indemnity in the Ontario enforcement action. Mendes argued that he was simply preserving his right to seek contribution and indemnity against co-judgment debtors if Atwal succeeded in enforcing the joint and several New York judgment, invoking the Negligence Act as conferring a general right of contribution among concurrent tortfeasors. The plaintiff, however, objected on the basis that such crossclaims would effectively reopen apportionment of liability already determined by the New York court, undermine the limited nature of defences in foreign judgment enforcement, and cause further delay and expense. The judge agreed that, while the crossclaims were not abusive in the sense of an improper collateral attack, they were legally untenable in this particular procedural setting. The New York judgment had imposed joint and several liability and did not address contribution or indemnity among defendants. In an enforcement action of that judgment, the Ontario court’s task is to decide whether the foreign judgment should be recognized and enforced, not to allocate fault or revisit underlying liability among co-defendants. As a result, crossclaims for contribution and indemnity in this recognition proceeding would introduce new substantive issues not determined in New York, contradicting the limited scope of Beals and related jurisprudence. The Negligence Act was held to be inapplicable because the case is not about fault-based apportionment of damages, but about enforcing a pre-existing foreign monetary judgment. On this basis, the court found the proposed crossclaims to be legally untenable and refused leave to add them.

Third party claims against Baker and prejudice analysis

The defendants also sought leave to bring third party claims against Baker, the third judgment debtor in the New York Action, again for contribution and indemnity if they were held liable to Atwal. They framed these third party claims as consistent with the Negligence Act and efficient case management, and relied on authority suggesting that Rule 29.01(a) is a procedural gateway for properly founded contribution and indemnity claims. Mendes argued additionally that New York procedure did not require third party claims to be brought in the original action, and that it would be unfair to bar him from pursuing Baker in Ontario now that Atwal was enforcing the judgment only against two of the three original defendants. Atwal countered that such third party claims would further delay his summary judgment motion, risk jurisdictional challenges by Baker, and amount to a relitigation of the underlying disputes rather than a straightforward enforcement of the foreign judgment. The court held that, just as with the crossclaims, the proposed third party claims were legally untenable in an enforcement proceeding. Because the New York court had already imposed joint and several liability without making any finding on contribution or indemnity, allowing Ontario third party proceedings would require reopening substantive issues the enforcement court is not supposed to revisit. The enforcement court, as Justice Perell has underscored in prior authority, is not concerned with the foreign court’s substantive or procedural law and does not adjudicate internal reallocations of liability arising from the underlying dispute. On that basis alone, the proposed third party claims failed the requirement of having at least some merit or a viable legal basis under Rule 29.01. In any event, the judge also conducted a prejudice analysis in the alternative and found that, even if the claims had some arguable merit, the plaintiff would suffer prejudice from the delay that third party proceedings would introduce. The defendants had provided no explanation for failing to bring third party claims earlier or for waiting until after the summary judgment materials were served. In the absence of a reasonable explanation, courts may infer that delay was intentional, and this weighed against granting the procedural indulgence. Because the core issues in the Ontario Action are confined to whether the New York judgment should be recognized and enforced, adding two third party claims would expand the scope of litigation and push back the hearing of the summary judgment motion, to Atwal’s detriment. Balancing the recognized factors on delay and prejudice, the court held that leave to issue third party claims should also be denied on that ground.

Outcome and identification of the successful party and monetary amount

In the result, the court granted the defendants leave to amend their statements of defence solely to elaborate on the circumstances of the New York settlement, but dismissed the rest of their motions. The proposed crossclaims between Semkiw and Mendes for contribution and indemnity were refused on the basis that such relief is not available in an action that is confined to enforcing a foreign judgment imposing joint and several liability. The proposed third party claims against Baker were likewise refused as legally untenable in this enforcement context and, in the alternative, as prejudicial to Atwal because of unexplained delay and the resulting postponement of his summary judgment motion. This endorsement does not resolve whether the New York judgment will ultimately be recognized and enforced in Ontario, nor does it quantify or award any costs; the judge instead encouraged the parties to agree on costs of the motions, failing which brief written submissions would be received, and no specific dollar figure was fixed. On this motion, the outcome is mixed: Semkiw and Mendes succeeded in expanding their pleaded narrative about the voluntariness of the New York settlement, while Atwal successfully blocked the crossclaims and third party claims that would have complicated and delayed his effort to enforce the foreign judgment. The underlying New York judgment remains for USD 2,251,210 on a joint and several basis, but the Ontario court has not yet ordered that amount to be paid in Ontario, and the costs of this motion have not been determined; accordingly, the precise total monetary award and costs in favour of any party in Ontario cannot yet be stated.