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Goodmans Q&A: Are Injunctions of Non-Canadian Courts Enforceable in Canada?

January-23-2007

Lawyer Peter Ruby
Area Corporate Finance and Securities, Technology, Intellectual Property

Summary

Q&A

Q :

Are Injunctions of Non-Canadian Courts Enforceable in Canada?

A :

In an important recent change to Canadian common law, in Pro Swing Inc. v. Elta Golf Inc., the Supreme Court of Canada unanimously concluded that it was now time to allow injunctions issued by non-Canadian courts to be enforceable in Canada, in appropriate circumstances, because "[m]odern-day commercial transactions require prompt reactions and effective remedies. The advent of the Internet has heightened the need for appropriate tools."

Historically, the Canadian common law provided that a foreign judgment was not enforceable unless the judgment was for a debt or a definite sum of money, among other factors. As a result, for example, a U.S. court could award damages for intellectual property infringement that would be enforceable in Canada, but a Canadian court would not enforce a U.S. injunction prohibiting the defendant from continuing to infringe the plaintiff’s rights in Canada. With the release of the Supreme Court of Canada’s decision in Pro Swing, however, a final judgment of a foreign court for non-monetary relief, including orders for injunctive or specific performance relief, may be enforceable in Canada.

Although the Supreme Court did not develop an exhaustive list of criteria a court should take into account when deciding whether or not to enforce foreign non-money judgments, the Court outlined general conditions for enforcement. As a result, when attempting to enforce such judgments in Canada, you should be aware that the following conditions will apply:

  • The order must be rendered by a court of competent jurisdiction
  • The order must be final
  • The order must be of such a nature requiring a Canadian court to enforce it. Considerations include the extent to which the order’s territorial scope is explicit, specific and clear, and whether the denial of recognition and enforcement of the foreign order would leave the applicant without a remedy and taking into account principles of judicial economy

In addition to the above conditions, lower courts were instructed to incorporate "the very flexibility that infuses equity" and exercise "the discretion that underlies equitable orders" when deciding whether or not to enforce foreign non-money orders. In light of the very general guidance provided by the Court, it remains unclear in exactly what circumstances a particular order will be enforceable.

Therefore, if you want a non-Canadian court order for non-monetary relief to be enforced in Canada, you may wish to have the order structured in a manner that maximizes its chances of Canadian enforcement. Conversely, a Canadian at risk from a foreign court order may wish to take into account the possibility that the order could be enforced in Canada.

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1 [2006] S.C.J. No. 52.
2 Notably, on the facts before it in Pro Swing, the Court declined to enforce the U.S. injunction at issue.