Pro Swing Inc. v. Elta Golf Inc., (2006) 354 N.R. 201 (SCC)

• Judge: McLachlin, C.J.C., Bastarache, LeBel, Deschamps, Fish, Abella and Charron, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 17, 2006
• Jurisdiction: Canada (Federal)
• Citations: (2006), 354 N.R. 201 (SCC);2006 SCC 52

Pro Swing Inc. v. Elta Golf Inc. (2006), 354 N.R. 201 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2006] N.R. TBEd. NO.034

Pro Swing Inc. (appellant) v. Elta Golf Inc. (respondent)

(30529; 2006 SCC 52; 2006 CSC 52)

Indexed As: Pro Swing Inc. v. Elta Golf Inc.

Supreme Court of Canada

McLachlin, C.J.C., Bastarache, LeBel, Deschamps, Fish, Abella and Charron, JJ.

November 17, 2006.

Summary:

An American company (Pro Swing) sued a Canadian company (Elta Golf) and others for trademark infringement. The matter was settled in the United States by a consent de­cree providing for non-infringement, the re­turn of offending product, etc. After learn­ing that Elta Golf continued to sell infring­ing product over the internet, Pro Swing ob­tained a consent order in the United States. Pro Swing moved for an order recog­nizing and enforcing the consent decree and con­tempt order in Canada. Elta Golf objected, relying on the traditional common law rule precluding enforcement of foreign non-mon­etary judgments in Canada.

The Ontario Superior Court, in a judgment reported [2003] O.T.C. 1146, held that the traditional common law rule had been re­laxed. The consent decree, which the court found to have intended extraterritorial appli­cation, was valid and enforceable in Ontario. Since parts of the contempt order were du­pli­cative of the consent decree and not final, those portions of the contempt order not of­fending the finality requirement were en­forceable in Ontario. Elta Golf appealed. Pro Swing cross-appealed, seeking enforce­ment of the entire contempt order.

The Ontario Court of Appeal, in an en­dorse­ment reported at (2004), 71 O.R.(3d) 566, allowed Elta Golf's appeal and dis­missed Pro Swing's cross-appeal. Although it was time to recognize and enforce foreign non-monetary judgments, the consent decree and contempt order were not sufficiently cer­tain in their terms to be enforced. Pro Swing appealed.

The Supreme Court of Canada, McLachlin, C.J.C., Bastarache and Charron, JJ., dissent­ing, dismissed the appeal. The court agreed that "the time is ripe to change the common law rule against the enforcement of foreign non-monetary judgments, but, owing to prob­lems with the orders [Pro Swing] seeks to enforce" this was not an appropriate case to change the rule.

Conflict of Laws - Topic 6606

Foreign judgments - General - Recognition of judgment of foreign state - [See all Prac­tice - Topic 5930.1 ].

Practice - Topic 5930.1

Judgments and orders - Enforcement of for­eign judgments - Non-monetary judg­ments - An American company (Pro Swing) and a Canadian company (Elta Golf) settled a trademark infringement ac­tion in the U.S. by consent decree - Elta Golf allegedly violated the consent decree by making subsequent internet sales - Pro Swing obtained a contempt order in the U.S. - Elta Golf objected to enforcement of the foreign non-monetary judgments as being precluded by the traditional common law rule that enforcement of foreign judg­ments was limited to final and conclusive judgments for a definite sum of money - The Supreme Court of Canada agreed that it was time to change the common law rule to include enforcement of foreign non-monetary judgments - However, problems with the orders made this an inappropriate case to change the common law rule - The quasi-criminal nature of contempt orders pre­cluded enforcement in Canada - It was uncertain whether it was appropriate to use local judicial resources where a less bur­densome alternate approach, such as letters rogatory, was available - A conflict existed where contempt orders were char­acterized dif­ferently in Canada and the U.S. (re­me­dial only in U.S.) - The consent decree, grant­ing injunctive relief, lacked clarity absent explicit terms making the settlement agreement a worldwide under­taking - Inter­preting the contempt order to apply outside the U.S. offended the territoriality principle - Finally, public policy and con­stitutional requirements were at stake where the rights of unrepresented third parties might be af­fected - The court stated that "the list of prob­lems is long, too long to use the court's equitable jurisdic­tion to accommo­date Pro Swing".

Practice - Topic 5930.1

Judgments and orders - Enforcement of for­eign judgments - Non-monetary judg­ments - The Supreme Court of Canada agreed that it was time to cautiously change the traditional common law rule pre­cluding enforcement of foreign non-monetary judgments in Canada - The court stated that "in considering the order it is asked to enforce, the domestic court should instead scrutinize the impact of the order. Relevant considerations may thus include the criteria that guide Canadian courts in crafting domestic orders, such as: Are the terms of the order clear and specific enough to ensure that the defendant will know what is expected from him or her? Is the order limited in its scope and did the originating court retain the power to issue further orders? Is the enforcement the least burdensome remedy for the Canadian jus­tice system? Is the Canadian litigant ex­posed to unforeseen obligations? Are any third parties affected by the order? Will the use of judicial resources be consistent with what would be allowed for domestic liti­gants?" - See paragraph 30.

Practice - Topic 5930.1

Judgments and orders - Enforcement of for­eign judgments - Non-monetary judg­ments - The Supreme Court of Canada stated that "the conditions for recognition and enforcement [of foreign non-monetary judgments] can be expressed generally as follows: the judgment must have been ren­dered by a court of competent jurisdic­tion and must be final, and it must be of a na­ture that the principle of comity requires the domestic court to enforce. Comity does not require receiving courts to extend great­er judicial assistance to foreign liti­gants than it does to its own litigants, and the discretion that underlies equitable or­ders can be exercised by Canadian courts when deciding whether or not to enforce one" - See paragraph 31.

Cases Noticed:

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81, refd to. [para. 7].

Beals v. Saldanha et al., [2003] 3 S.C.R. 416; 314 N.R. 209; 182 O.A.C. 201; 2003 SCC 72, refd to. [para. 12].

Doucet-Boudreau et al. v. Nova Scotia (Minister of Education) et al., [2003] 3 S.C.R. 3; 312 N.R. 1; 218 N.S.R.(2d) 311; 687 A.P.R. 311; 2003 SCC 62, refd to. [para. 24].

Unifund Assurance Co. v. Insurance Corp. of British Columbia, [2003] 2 S.C.R. 63; 306 N.R. 201; 176 O.A.C. 1; 2003 SCC 40, refd to. [para. 25].

Hunt v. Lac d'Amiante du Québec ltée et al., [1993] 4 S.C.R. 289; 161 N.R. 81; 37 B.C.A.C. 161; 60 W.A.C. 161, refd to. [para. 25].

Hilton v. Guyot (1894), 159 U.S. 113 (S.C.), refd to. [para. 26].

Videotron ltée et Premier Choix: TVEC Inc. v. Industries Microlec produits elect­roniques Inc. et autres, [1992] 2 S.C.R. 1065; 141 N.R. 281; 50 Q.A.C. 161, refd to. [para. 34].

Gompers v. Bucks Stove & Range Co. (1911), 221 U.S. 418 (S.C.), refd to. [para. 34].

A.F. v. P.P., [1996] R.D.J. 419 (C.A.), refd to. [para. 35].

Westfair Foods Ltd. v. Naherny et al. (1990), 63 Man.R.(2d) 238 (C.A.), refd to. [para. 35].

Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.), [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1, refd to. [para. 41].

District Court of the United States, Middle District of Florida v. Royal American Shows Inc., [1982] 1 S.C.R. 414; 41 N.R. 181; 36 A.R. 361, refd to. [para. 44].

International Association of Machinists & Aerospace Workers and Qantas Airways, Re (1983), 149 D.L.R.(3d) 38 (Ont. H.C.), refd to. [para. 44].

Feigelman et al. v. Aetna Financial Ser­vices Ltd. et al., [1985] 1 S.C.R. 2; 56 N.R. 241; 32 Man.R.(2d) 241, refd to. [para. 53].

Society of Composers, Authors and Music Publishers of Canada v. Canadian Asso­ciation of Internet Providers et al., [2004] 2 S.C.R. 427; 322 N.R. 306; 2004 SCC 45, refd to. [para. 54].

United States of America v. Burns and Rafay, [2001] 1 S.C.R. 283; 265 N.R. 212; 148 B.C.A.C. 1; 243 W.A.C. 1; 2001 SCC 7, refd to. [para. 59].

Heinz (H.J.) Co. of Canada Ltd. v. Canada (Attorney General), [2006] 1 S.C.R. 441; 347 N.R. 1; 2006 SCC 13, refd to. [para. 60].

Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403; 213 N.R. 161, refd to. [para. 60].

Barrick Gold Corp. v. Lopehandia et al. (2004), 187 O.A.C. 238; 71 O.R. (3d) 416 (C.A.), refd to. [para. 63].

R. v. Salituro, [1991] 3 S.C.R. 654; 131 N.R. 161; 50 O.A.C. 125, refd to. [para. 85].

Uniforêt Pâte Port-Cartier Inc. v. Zerotech Technologies Inc., [1998] B.C.T.C. Uned. 112; [1998] 9 W.W.R. 688 (S.C.), 86].

Tolofson v. Jensen and Tolofson, [1994] 3 S.C.R. 1022; 175 N.R. 161; 77 O.A.C. 81; 51 B.C.A.C. 241; 84 W.A.C. 241, refd to. [para. 94].

United Nurses of Alberta v. Alberta (Attor­ney General), [1992] 1 S.C.R. 901; 135 N.R. 321; 125 A.R. 241; 14 W.A.C. 241, refd to. [para. 106].

Lavigne v. Commissioner of Official Lan­guages (Can.) et al., [2002] 2 S.C.R. 773; 289 N.R. 282; 2002 SCC 53, refd to. [para. 120].

Authors and Works Noticed:

Berryman, Jeff, Cross-Border Enforce­ment of Mareva Injunctions in Canada (2005), 30 Adv. Q. 413, generally [para. 17].

Black, Vaughan, Enforcement of Foreign Non-money Judgments: Pro Swing v. Elta (2006), 42 Can. Bus. L.J. 81, pp. 89 [paras. 11, 13]; 96 [para. 88].

Briggs, Adrian, Crossing the River by Feeling the Stones: Rethinking the Law on Foreign Judgments (2004), 8 SYBIL 1, p. 22 [para. 19].

Castel, Jean-Gabriel, and Walker, Janet, Canadian Conflict of Laws (6th Ed. 2005) (2006 Looseleaf Update, Release 3), vol. 1, pp. 8-2 [para. 100]; 14-21 [para. 97]; para. 14.6 [para. 10].

Dicey, A.V., and Morris, J.H.C., Conflict of Laws (13th Ed. 2000), vol. 1, pp. 474, 475 [para. 10].

Hanbury, Harold Greville, and Martin, Jill E., Mod­ern Equity (17th Ed. 2005), pp. 1-024 to 1-036 [para. 22].

MacDonald, Ken, A New Approach to Enforcement of Foreign Non-Monetary Judgments (2006), 31 Adv. Q. 44, p. 56 [para. 39].

Sharpe, Robert J., Injunctions and Specific Per­formance (2nd Ed. 1992), (2005 Loose­leaf Update, Release 13), paras. 1.260 to 1.490 [para. 99]; 7.480 [para. 24].

Spry, Ian C.F., The Principles of Equitable Remedies: Specific Performance, Injunc­tions, Rectification and Equitable Dam­ages (6th Ed. 2001), p. 6 [para. 22].

Talpis, Jeffrey, and Goodman, Joy, A com­ity of errors, Law Times, vol. 14, No. 2, (Jan­uary 20, 2003), p. 7 [para. 18].

Uniform Law Conference of Canada: Com­mercial Law Strategy (2005 Loose­leaf), pp. 3 [para. 81]; 4 [para. 82].

Walker, Janet, Beals v. Saldanha: Striking the Comity Balance Anew (2002), 5 Can. Int'l L. 28, p. 29 [para. 18].

Counsel:

Raymond F. Leach and Janet A. Allinson, for the appellant;

No one appearing for the respondent.

Solicitors of Record:

Siskind, Cromarty, Ivey & Dowler, Lon­don, Ontario, for the appellant.

This appeal was heard on December 15, 2005, before McLachlin, C.J.C., Bastarache, LeBel, Deschamps, Fish, Abella and Char­ron, JJ., of the Supreme Court of Canada.

On November 17, 2006, the judgment of the Court was delivered in both official languages and the following opinions were filed:

Deschamps, J. (LeBel, Fish and Abella, JJ., concurring) - see paragraphs 1 to 65;

McLachlin, C.J.C. (Bastarache and Char­ron, JJ., concurring), dissenting - see paragraphs 66 to 123.