Foreign Default Judgments Will be Enforceable in Ontario Despite “Excessive” Damage Awards

Dead End Survival, LLC v. Marhasin, 2019 ONSC 3453 (“Dead End Survival”) is yet another example of an Ontario Court recognizing and enforcing a default Judgment from a US District Court. In this instance the judgment included monetary and non- monetary relief.

In, Dead End Survival Justice Perell re-stated the principles governing the recognition and enforcement of foreign Judgments in Canada. In Dead End, the judgment in question emanated from the US District Court in the State of Georgia. The Plaintiff’s judgment included a permanent injunction as well as $2 million in statutory damages for trademark infringement.[1]

Dead End Survival LLC is a Michigan corporation that manufactures survival gear and sells it through online retailers under the trade name SharpSurvival. In the Georgia proceeding it alleged that the defendant, Marhasin, carrying on business in Ontario, sold counterfeit products that were manufactured in China. The products were sold online to customers, including those in Georgia. Therefore, the Georgia District Court assumed jurisdiction.

The Georgia District Court issued temporary restraining orders and later a permanent injunction enjoining Marhasin from infringing the SharpSurvival trademark. Marhasin was ordered to pay $2 million in statutory damages.

Marhasin did not defend, appeal or pay the judgment in Georgia.

Dead End Survival commenced an application in Ontario to enforce the Georgia District Court’s judgment. Perell J. found that there was a real and substantial connection between the dispute and the Georgia District Court and denied the defence of a fraud on the Georgia Court.[2] The public policy defence was raised in relation to an allegedly “excessive” statutory damages award and failed as Perell J. states:

The U.S. law about trademark infringement is not contrary to the Canadian concept of justice or basic morality. The public policy defense is narrowly construed and does not bar enforcement of a foreign judgment because the damages awarded in the foreign proceeding exceed what would have been awarded under Canadian law.”[3]

This case serves as a reminder that Canadian jurisdictions remain very receptive to the enforcement of U.S. judgments, whether obtained on default or after trial.  The defences to the recognition and enforcement of foreign judgments in Canada are severely limited and rarely successful.  

Chris MacLeod is a founding Partner of Cambridge LLP. His practice focuses on complex business litigation including cross-border dispute resolution, multi-jurisdictional litigation, and private international law. He is the chair of the firm's Chinese Services Group. Chris is a frequent speaker and writer on topics relevant to cross-border litigation, conflict of laws and private international law.

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