July 10, 2018

Texas Injunction Enforced in Ontario – Update for U.S. Counsel. Zashko v. Touchgate and Ahmed, 2018 ONSC 3734

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Following the Supreme Court of Canada’s seminal case, Pro Swing Inc. v. Elta Golf Inc.,2006 SCC 52, the Ontario Superior Court of Justice recently enforced Texas injunctive relief and accompanying monetary judgments in Zashko v. Touchgate and Ahmed, 2018 ONSC 3734. It should be noted that there are strict criteria applied by Canadian Courts when deciding whether to enforce foreign injunctive and other non-monetary orders. It is always a good idea to contact competent Canadian counsel before obtaining a foreign non-monetary order that may ultimately be enforced in Canada.

The Zashko Case:

A Texas corporation commenced an application to enforce a final judgment of a Texas court against one individual and a company domiciled in Ontario. The Texas lawsuit surrounded a contract for the production of a Pakistani film. The Texas corporation claimed that the Ontario parties had breached the contract and it was successful in obtaining an interim injunction on notice against the Ontario defendants, which was subsequently extended. The Texas action was not defended by the Ontario parties despite being duly served and the Texas corporation ultimately obtained default judgment.

While the Texas judgment included monetary orders against the Ontario defendants, the judgment also enjoined the Ontario defendants from:

  • Claiming association with or ownership of the film;
  • Posting on social media or online any comments, videos or audio files related to the film;
  • Discussing the film in interviews or on the internet;
  • Distributing any photos, videos or audio files from the film or its production;
  • Revealing any information about the film including plots, story lines or musical scores; and
  • Destroying any photos, videos or audio files from the film or its production in their possession.

On the application to enforce the Texas judgment in Ontario, the defendants responded by asserting that the Texas judgment should not be enforced on the basis of a general argument that the Texas corporation had treated the Ontario defendants unfairly.

In considering whether to enforce the injunctive relief, the Ontario court reviewed the Supreme Court’s decision in Pro Swing and its criteria in determining whether to enforce non-monetary orders:

  • whether the terms of the order are clear and specific enough to ensure that the defendant will know what is expected from him or her.
  • whether the order is limited in its scope;
  • whether the originating court retained power to issue further orders;
  • whether the enforcement is the least burdensome remedy for the Canadian justice system;
  • whether the Canadian litigant is exposed to unforeseen obligations;
  • whether any third parties are affected by the order; and
  • whether the use of judicial resources will be consistent with what would be allowed for domestic litigants.

In reviewing the criteria set out in Pro Swing, the Ontario court found in favour of the Texas corporation and made an order recognizing and enforcing the Texas judgment in its entirety, including the injunction.

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