Enforcement of Foreign Judgments – Defences
– Meaningful Opportunity to be Heard –
Equitable Orders – Injunctions
The defendants operated cross-border telemarketing businesses
selling Canadian and foreign lottery tickets to U.S. customers. In
October 2002, a U.S. judge granted an ex parte
"Temporary Restraining Order with Asset Freeze and Order to
Show Cause Why a Preliminary Injunction Should not Issue"
against the defendants. The U.S. obtained a Mareva
injunction and Anton Pillar order days later from the
Ontario Superior Court of Justice, which were eventually set aside
on a finding that the court had been misled. The U.S. brought
proceedings against the defendants in Illinois, obtaining a
permanent injunction and a $19M judgment. The U.S. amended its
Ontario claim in 2005 to seek enforcement of that judgment. It
brought summary judgment for that part of its claim, which was
dismissed on the basis that there was a question as to whether the
defendants had a "meaningful opportunity to be heard" in
the U.S. proceedings. The decision on this motion, and two other
related motions, was the subject of this appeal to the Court of
The Court held that the motions judge erred in finding a genuine
issue for trial for a fourth "new defence" apart from the
three listed in Beals v. Saldanha, namely that of denial
of a "meaningful opportunity to be heard". Such a fourth
defence should not be added to the three defences in
Beals, as any new defence must be "narrow in
scope" and "raise issues not covered by the existing
defences". The "new" defence was indistinguishable
from the natural justice defence. Further, the facts in this case
were found not to support an argument that the defendants were
denied a "meaningful opportunity to be heard".
The defendants raised the argument, for the first time on
appeal, that the injunctive relief component of the U.S. judgment
should not be enforced. The Court of Appeal rejected this
submission. The factors set out by the Supreme Court of Canada in
Pro Swing militated in favour of enforcing the injunction.
Its terms were simple, clear and specific; there were no unforeseen
obligations to which the defendants would be exposed; it had
minimal effect on third parties; and its enforcement is consistent
with the types of orders that would be allowed for domestic
Finally, the defendants sought the enforcement of the damages
undertakings given by the U.S. on the Mareva and Anton
Pillar orders. The U.S. sought to resile from its undertaking
given on ex parte orders it wrongfully obtained, arguing
that the undertakings were worthless from the outset as no damages
could flow from the termination of an illegal operation. The Court
of Appeal rejected this argument, finding that this would undermine
the serious nature of a damages undertaking. While the quantum of
damages was an open question, it was not clear that the
defendants' damages claim was "plainly
unsustainable". Further, the orders were dissolved as a result
of the U.S. government's wrongful conduct in obtaining the
ex parte orders. While illegality is an important
consideration in determining whether to order a damages inquiry, it
does not automatically preclude a damages inquiry.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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