Enforcing Foreign Judgements in Canada

The Canadian trade-mark RIDENT for golf clubs is confusingly similar to the US trade-mark TRIDENT for golf clubs.  That’s the easy part.  Now, how do you confine a Canadian company from selling its RIDENT brand golf clubs over the internet to US consumers who may be familiar with the rival TRIDENT brand?  We’ve got e-commerce, intellectual property rights and court orders.  Just the thing to take to the Supreme Court of Canada.

In Pro Swing Inc. v. Elta Golf Inc. 2006 SCC 52, the Supreme Court of Canada (SCC) tackled this problem on a number of levels.  Pro Swing, owner of the TRIDENT trade-mark in the US, initially obtained an order from a US court, stipulating that the Canadian company, Elta Golf, should cease sales of RIDENT brand golf clubs into the US.  But in practical terms, the court order was only enforceable in the US and Elta Golf was an Ontario-based company.  Pro Swing commenced a lawsuit in Canada to enforce its US judgement. 

Traditionally, foreign judgements can be enforced in Canada where they are a final order to pay a defined sum of money.  Or put another way, where compliance is relatively easy to enforce and monitor: either the money has been paid, or it hasn’t.  In the Pro Swing case, the US order was a “foreign non-monetary judgment”.  In other words, it carried with it a number of non-monetary orders and stipulations.  The SCC has now clarified that these types of orders can be enforced in Canada. Unfortunately, the court was split on when they should be enforced. Here are some of the factors the Canadian court will take into consideration:

●       are the terms of the foreign order clear enough?

●       is the foreign order sufficiently limited in scope?

●       is it a final order?

●       is enforcement of the order a justifiable use of Canadian judicial resources? 

In the end Pro Swing’s US judgement was not enforced by the court. The lessons for business?  First, foreign litigants seeking to enforce their foreign judgements in Canada now have a greater range of options available to them; they are not confined to monetary orders alone.  Secondly, because of the thicket of issues which a Canadian court will consider, it is wise for US counsel to seek advice from Canadian counsel prior to drawing up the terms of the US order to ensure it stands the greatest chance of enforcement in Canada.  Third, in practical terms, the world of e-commerce just got a little cozier: cross-border business and internet sales mean that Canadian and US companies will continue to come into conflict and this decision effectively shrinks the gap between foreign and Canadian courts.

Calgary - 09:59 MST

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  1. […] The Federal Court disagreed with the Commissioner and clearly stated that “PIPEDA gives the Privacy Commissioner jurisdiction to investigate complaints relating to the transborder flow of personal information.” The court also noted that absent an investigation and a corresponding report, the complainant’s avenue to an award of damages would be closed. Citing Pro Swing v. Elta, the court noted that “A money judgment may be enforced in another jurisdiction.” This is a curious observation, since Pro Swing is a Canadian decision about enforcement of a foreign judgement in Canada, and any possible order against Accusearch would involve the enforcement of a Canadian judgment in the US, a matter for a U.S. court to decide. This decision will open the door to investigations of foreign companies and will result in some interesting enforcement challenges. […]

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