#5154 - Pro Swing V. Elta Golf - Conflict of Laws BCL

Pro Swing v. ELTA Golf

Facts

Question

This case requires the Court to consider whether the common law should be extended to permit the enforcement of foreign non-money judgments and, if so, in what circumstances.

Holding

Recognition of non-money judgments must be permitted

The traditional common law position is that foreign judgments are recognizable and enforceable only if they meet two conditions. First, they must be for a definite sum of money. Second, they must be final and conclusive. These requirements ensure that in ordinary cases the merits of foreign judgments are not considered by an enforcing court. Barring exceptional concerns, a court's focus when enforcing a foreign judgment is not on the substantive and procedural law on which the judgment is based, but instead on the obligation created by the judgment itself.

These developments establish that the absolute common law ban on the enforcement of all foreign non-money judgments may no longer be useful and should be reconsidered.

The possibility of enforcing foreign non-money judgments would represent an incremental change in the common law of Canada. The principled approach to recognition of foreign monetary judgments in cases such as Morguard and Beals invites application of the same principles to non-money judgments in order to preserve the consistency and logic of this body of the law.

At the same time, care must be taken to ensure that recognition is confined to cases where it is appropriate and does not create undue problems for the legal system of the enforcing state or unfair results for the parties. Caution is in order.

The time has come to permit the enforcement of foreign non-money orders where the general principles of Morguard are met and other considerations do not render recognition and enforcement of the foreign judgment inadvisable or unjust.

When should non-money judgments be enforced?

1. Traditional Conditions

The foreign court order is seen as creating a new obligation on the defendant. In the case of a money judgment, this is a debt. In the case of a non-money judgment, it is a different sort of obligation. A court enforcing a foreign judgment is enforcing the obligation created by that judgment. In principle, it should not look beyond the judgment to the merits of the case. It enforces the obligation created by the foreign judgment by its own machinery.

The first category of restrictions on the recognition and enforcement of foreign non-money judgments should flow from the general enforcement requirements set out in Morguard. These ensure that jurisdiction was properly taken by the issuing court and that there are no general fairness considerations that should require the court to hesitate before enforcing the foreign judgment. As noted in Beals, the existing defences of fraud, public policy and natural justice are designed to guard against unfairness in its most recognizable forms. Although designed to apply to money judgments, these requirements must also be applicable in cases involving non-money remedies.

2. Finality and clarity

The second category of restrictions on the recognition and enforcement of foreign non-money judgments should relate to finality and clarity. These twin requirements are based on the principles of judicial economy and the separation of judicial systems, which themselves stem from comity, order and fairness. Finality and clarity are distinct concepts. The first requires completeness; the second lack of ambiguity. However, in practice they may overlap. An order that is not final is likely to be unclear and vice versa.

The related requirements of finality and clarity should ensure that the function of enforcing courts will be limited to enforcement of the obligation created by the foreign order and will not include re-litigation of the issues considered by the issuing court. On the level of principle, an attempt to enforce an order that is not final and clear will almost invariably amount to the inappropriate assumption of jurisdiction by the enforcing court over the dispute. It is settled law that the enforcing court does not consider the merits of the foreign decision, absent fraud, violation of natural justice or violation of public policy. On the practical level, it may be difficult for the enforcing court to supervise an incomplete or unclear order. Difficulties may stem from the enforcing judge's unfamiliarity with the foreign law and its procedures or from the cost burden on the enforcing court. An order that is not final may be changed by the...