Canada: The Second Opinion: Specific Performance Art — The Ontario Court Of Appeal Enforces A Foreign Order To Deliver Up A Valuable Painting

Since 2006, Canadian common law courts have possessed the power to enforce foreign judgments that do more than merely award monetary damages.  For example, it is now possible to seek the enforcement, in Canada, of a foreign order that granted an injunction or an award of specific performance.  The rules governing the enforcement of such foreign non-monetary judgments remain somewhat opaque.  A recent ruling of the Ontario Court of Appeal, Van Damme v. Gelber, 2013 ONCA 388, has provided some (incremental) clarification of the applicable principles.

Historically, Canadian common law courts would only consider enforcing foreign judgments that involved the payment of a specified amount of money.  Other forms of foreign orders (e.g., injunctions, orders for specific performance, etc.) could not be enforced.  That law changed with the decision of the Supreme Court in Pro Swing Inc. v Elta Golf Inc, [2006] 2 S.C.R. 612.  Unfortunately, the Pro Swing ruling provided little concrete guidance to subsequent courts regarding the circumstances in which it would be appropriate to exercise this new and extraordinary power.

The Van Damme decision involved a dispute over an extremely valuable work of art.  The painting had allegedly been sold by a wealthy Canadian (living in Monaco) to a wealthy Belgian.  The painting was physically situated in Toronto, but the parties' agreement specified that any disputes were to be determined in the courts of New York.

The vendor denied that he had legally agreed to sell the painting, and the purchaser commenced an action in New York to enforce their agreement.  A parallel proceeding was commenced in Ontario, and the parties agreed on consent that the painting would not be moved outside the jurisdiction.

After considerable jurisdictional skirmishing, the New York court found in favour of the purchaser and issued an order for specific performance, requiring the vendor to deliver the painting as per the terms of the parties' agreement.  This order was affirmed on appeal in New York.

The purchaser came before the Ontario courts seeking to enforce the New York court's order of specific performance.  The Ontario trial judge granted the request, and issued his own order enforcing the New York award of specific performance.

The vendor appealed on two grounds:

  • First, it was argued that the New York court had lacked jurisdiction to issue the order against the vendor.  As such jurisdiction in New York is a prerequisite to the enforcement in Ontario of the New York order, the Ontario trial judge was required to assess the issue for himself.
  • Secondly, it was not appropriate for the Ontario trial judge to enforce the New York award of specific performance because such an equitable remedy would not have been issued by an Ontario court in a purely domestic proceeding.

The Ontario Court of Appeal dismissed both of these arguments.  First, the Court found that, as the vendor had clearly attorned to the jurisdiction of the New York court, that court had possessed the requisite jurisdiction to issue the order of specific performance.  (In making this determination, the Court of Appeal found it unnecessary to consider the very interesting question of the extent to which the Ontario trial judge could rely on the jurisdictional findings of the New York court, as opposed to assessing for himself that court's claim to jurisdiction.)

The Court of Appeal turned to the substantive question of the propriety of an Ontario court enforcing the New York award of specific performance.  The Court of Appeal accepted that, under the Supreme Court's Pro Swing principles, a factor to be considered in enforcing such a foreign order is whether  – in a hypothetical domestic proceeding governed by Canadian law – such an award would have been made at first instance by a Canadian court.  This was not a matter that the trial judge appeared to expressly consider.

The Court of Appeal dismissed this as an issue, however, deciding that (i) because the parties did not expressly raise this argument before the trial judge, he had not been required to consider it, and (ii) in any event, had the matter come before a Canadian court at first instance, that court would have granted the requested order of specific performance in all of the circumstances.

Thus, the post-Pro Swing law remains in a state of gradual development.  The one point that emerges from Van Damme is that, if you wish to raise a defence based on Pro Swing's amorphous principles, you must do it expressly and not assume that the court will consider the principle of its own volition.

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