Enforcing Foreign Judgments in Canada (Video)

Author(s): Adam Hirsh

Sep 15, 2023

As transactions have become increasingly globalized, commercial disputes frequently cross international borders, resulting in non-Canadian businesses having to seek relief or assistance from Canadian courts. Canadian judicial processes can be complex with substantive factual and legal consideration. However, there is a trend of increased flexibility and willingness from Canadian courts to engage with interlocutory orders, including injunctions, from foreign jurisdictions. The law in this area is evolving.

In the video below, Osler partner Adam Hirsh outlines what non-Canadian parties can expect when navigating the Canadian judicial system.

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Video transcript

ADAM: Hi, I’m Adam Hirsh and I am a partner in Osler’s Litigation Department.

In today’s increasingly global business landscape, disputes frequently cross international borders, resulting in non-Canadian businesses having to seek relief or assistance from the Canadian courts.

This could include compelling a witness who is a resident in Canada to give evidence in a foreign proceeding, litigating an international dispute in Canadian courts, or working with the Canadian courts to enforce a judgment received in a foreign jurisdiction against a Canadian defendant.

Today, I’m going to talk to you specifically about enforcing foreign judgments, and incremental developments in the area of law regarding interlocutory orders.

Generally, a Canadian court will enforce a non-Canadian judgment if the following three criteria are met:

First, the judgment comes from a court of competent jurisdiction; second, the judgment is final and conclusive; and third, the judgment is adequately precise.

Canadian courts typically don’t analyze the merits of the underlying foreign decision, only whether these criteria are present. I won’t touch on it here, but for more information about what it means for a court to be of “competent jurisdiction”, you can see my article: Enforcing Foreign Judgments in Canada, available online at Osler.com.

In 2006, in the Pro Swing case, Canada’s Supreme Court expanded what it means for a foreign judgment to be “adequately precise”. Previously, Canadian courts had only enforced judgments for a specific monetary amount. After Pro Swing, they now also enforce a broader range of foreign judgments, including orders for declaratory relief, orders for specific performance, and permanent injunctions (which are orders permanently restraining or prohibiting certain actions by a defendant).

That brings us to the final requirement: whether a judgment is “final and conclusive”. Prior to Pro Swing, Canadian law was clear that interlocutory relief – court orders that occur while the foreign proceeding is ongoing – could not be enforced in Canada, as they are not “final” orders. However, the law in this area is evolving.

Because interlocutory injunctions are such a powerful tool in business disputes, the incremental changes in Canadian law opening the door to enforcing foreign interlocutory injunctions are worth exploring.

In 2006, in a case called Cavell, Ontario’s Court of Appeal held that a foreign interlocutory order (although not an injunction), could be enforced in Canada. The Court of Appeal reviewed the underlying rationales for why Canadian courts require the foreign order to be final:

• First, finality ensures that the domestic court knows precisely what it is enforcing;
• Second, finality removes the risk of injustice if the foreign order is subsequently changed in a future foreign order; and
• Third, finality removes the risk of undermining public confidence in the judicial system, if a domestic court were to enforce a foreign order that then subsequently changed.

In Cavell, the Court of Appeal determined that each of those rationales were satisfied and therefore, the foreign order could be enforced, even though it was an interlocutory order.

In 2014, in a case called Oesterlund, the Ontario Superior Court enforced an interlocutory injunction granted in Florida in a divorce case involving significant assets.

Most recently, in 2021, in a case called Pelletier, the Alberta Court of Appeal enforced an interlocutory freezing order (a type of interlocutory injunction) from the Cayman Islands against the defendants.

The defendants specifically argued that the order should not be enforced, as it was not final. The Court of Appeal held that the finality requirement was not “black and white”. Although bankruptcy proceedings in the Cayman Islands were ongoing, the freezing order itself was final, contained clear and specific terms, and was limited in scope.

These three cases show a trend of increased flexibility and willingness from Canadian courts to engage with interlocutory orders, including injunctions, from foreign jurisdictions; however, it must be stressed that the law in this area is still developing.

If an interlocutory injunction is required against a Canadian defendant, the safest and most reliable option continues to be to start new proceedings in Canada seeking injunctive relief. However, if a foreign jurisdiction has already ordered injunctive relief, recent developments indicate it may be possible to have the relief enforced by a Canadian court.

If you want to find out more about this or other issues around enforcing foreign judgments, please reach out to me or the Litigation group at Osler.