The traditional common-law rule to enforce a foreign judgment required that the judgment be final and conclusive, for a definite sum of money, and be rendered by a court of competent jurisdiction. Absent evidence of fraud, a violation of natural justice or of public policy, the enforcing court was only focused on the obligation created by the judgment itself.

Both the majority and minority decisions of the Court agreed that similar considerations should apply to the enforcement of judgments, whether monetary or not. Criteria for the enforcement of non-monetary judgments were outlined by both decisions, but in different terms. Deschamps J., writing for the majority, expressed the condition as follows: the decision "must be final, and it must be of a nature that the principle of comity requires the domestic court to enforce." Chief Justice McLachlin, writing for the minority, identified three classes of restrictions: principles of order and fairness; finality and clarity; and orders with penal consequences.

The difference in the application of the test to the facts of this case turned on the classification of the American orders. Pro Swing filed a complaint in Ohio against Elta Golf for trademark infringement. The parties entered into a settlement agreement, which was endorsed by a consent decree of the U.S. District Court in July 1998. The decree enjoined Elta Golf from purchasing, marketing or selling golf clubs or golf club components bearing the Trident mark or confusingly similar variations. In 2002, Pro Swing brought a motion for contempt of court alleging that Elta Golf had violated the consent decree, and a contempt order was issued by the U.S. District Court in Ohio. Pro Swing then filed with the Ontario Superior Court a motion for recognition and enforcement of the consent decree and the contempt order. The motions judge severed part of the contempt order and enforced the rest. The Court of Appeal set aside the motions judge's decision.

For the majority of the Supreme Court, three issues were relevant to determining whether the orders rendered in this case met the conditions for recognition and enforcement: the quasi-criminal nature of a contempt order; the burden on the judicial system; and the extraterritorial nature of the orders.

Because of their criminal component, the majority held that contempt orders should not be enforceable in Canada. Moreover, the Court noted that severing the offending parts of the contempt order should not be permitted since the Court would necessarily have to consider the merits of the order or risk affecting its substance.

The minority disagreed that the contempt order was "penal," arguing that the Court has long maintained the distinction between civil and criminal contempt. While foreign criminal contempt orders are clearly penal and cannot be enforced by Canadian courts, the minority felt that the same should not be said of foreign civil contempt orders.

The majority placed particular emphasis on judicial economy, and noted the Court of Appeal's statement that the denial of recognition and enforcement did not leave Pro Swing without a remedy. There were two other possible courses available to it: a separate action and the use of letters rogatory. The majority felt that the second option, which was less burdensome, should have been considered. The majority also noted that a court may consider whether the matter merits the involvement of the Canadian court. When the circumstances give rise to legitimate concerns about the use of judicial resources, the litigant bears the burden of reassuring the court that the matter is nevertheless worth proceeding with.

The minority agreed that judicial economy is a legitimate consideration, but argued that it should not be over- emphasized. A decision not to enforce on the grounds of lack of finality or clarity would have to be based on concerns apparent on the face of the order or arising from the factual or legal context. In this case, Elta Golf never suggested in the courts below that an accounting or production would pose difficulties. In these circumstances, the hypothetical possibility of the need for future court supervision should not preclude the recognition of the foreign order.

The key issue for the majority, and the Court of Appeal before it, was the issue of extraterritoriality, both because the transactions Pro Swing complained of took place over the internet, and because the trademark was protected only in the United States. The majority held that the orders in question were ambiguous with respect to their extraterritorial application. In the opinion of the majority, to interpret the contempt order as applying outside the United States would offend the principle of territoriality: extraterritoriality and comity cannot serve as a substitute for a lack of worldwide trade-mark protection.

The minority saw no ambiguities about the extraterritorial application of the consent decree and the contempt order. The minority felt there was no need for the artificially high standard set by the majority when a plain reading of the decree made its extraterritoriality sufficiently clear.

In sum, the Supreme Court of Canada has confirmed that non-monetary foreign judgments may be enforced in Canada, so long as they are rendered by a court of competent jurisdiction, are clear and final, and none of the possible defences (fraud, natural justice, and public policy) apply. The impact of this decision, however, does not appear to extend to foreign Mareva, or freezing orders, where parallel proceedings and orders will still likely be required.

Interestingly, prior to the release of the Pro Swing ruling, two Ontario courts enforced non-monetary foreign judgments: Re Cavell Insurance Co. (2006), 80 O.R. (3d) 500 (Ont. C.A.) and Re Grace Canada Inc. [2006] O.J. No. 3643 (Ont. S.C.J.[Commercial]). Both these decisions recognized foreign orders that were neither "final" nor "monetary," but neither decision was referred to in Pro Swing. The increasing cross-border nature of litigation, commercial or otherwise, will inevitably give rise to novel issues for the courts in the enforcement of foreign judgments. Although the Pro Swing case provides some guidance, its application to future cases may prove tricky.

FOOTNOTE
1] 2006 SCC 52 (November 17, 2006); Elta Golf Inc. did not appear before the Supreme Court of Canada and so the appeal was heard ex parte.