The Supreme Court of Canada's decision in Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, released November 17, 2006, marks an important advance in the common law. Historically, only final money judgments of foreign courts have been enforced in Canada. After Pro Swing, a final judgment of a foreign court containing different relief — like an injunction or order for specific performance — may be enforced. The word "may" is emphasized because, although all Justices who heard the appeal believed the time was ripe to permit enforcement of non-monetary judgments, it is apparent that judicial discretion will govern in future cases. In Pro Swing, a bare majority (4–3) refused to enforce the foreign order, because it lacked sufficient clarity and was obtained in a contempt proceeding.
Pro Swing was a U.S. manufacturer of customized golf clubs who owned the TRIDENT trade mark. Pro Swing discovered that Elta was offering infringing goods for sale on its Web site. Proceedings were commenced against Elta in the U.S. District Court in Ohio. The parties consented to a judgment that, among other things, enjoined Elta from marketing confusingly similar products. Pro Swing later brought a contempt motion alleging that Elta had violated the terms of the consent decree by selling unauthorized goods. The U.S. court granted a contempt order, which Pro Swing sought to enforce in Ontario.
Two issues were before the Supreme Court: first, whether non-monetary foreign judgments should be enforced in Canada and second, what considerations would apply for such judgments to be enforced.
The majority concluded that non-monetary orders could be enforced in circumstances where the judgment was rendered by a court of competent jurisdiction, final, and consistent with judicial comity. The majority decided, however, not to enforce Pro Swing's judgment, based on their view of the applicable considerations. The first reason given was that, under Canadian law, a civil contempt order has a penal or "quasi-criminal" aspect (potentially subjecting the defendant to unforeseen obligations) and purely civil or equitable obligations could not be severed from the contempt order. The second reason was that Pro Swing had used the wrong approach by not first seeking letters rogatory from the U.S. District Court to compel Elta to disclose sales information so that damages could be quantified. A third reason for refusing enforcement was that the U.S. order lacked clarity as to whether it was intended to have extra-territorial application. Finally, the majority raised concerns about whether parts of the order required disclosure of personal information that may prima facie be protected from disclosure.
In a strong dissent written by the Chief Justice, the minority concluded that, as a matter of principle, non-monetary orders were enforceable, subject to the same defences — fraud, public policy, and natural justice — as monetary orders. The applicable considerations for enforcing non-monetary orders comprised the twin requirements of finality and clarity as well as application of the principle that orders with penal consequences would not be enforced. Applying those principles, the minority concluded that the U.S. order obtained by Pro Swing was final, sufficiently clear as to extra-territorial effect, and restitutionary rather than penal.
Pro Swing significantly enhances remedial possibilities for international litigants in Canada. The Supreme Court observed that private international law must develop to reflect modern realities. The Court believed that in the Internet age, "commercial transactions require prompt reactions and effective remedies" and that the "common law must evolve in a way that takes into account the important social and economic forces that shape commercial…relationships." To obtain enforcement or recognition of a foreign non-monetary order, however, a litigant must strive for clarity and otherwise ensure the order conforms to the considerations outlined in the majority decision.