A recent decision from the Ontario Superior Court of Justice in a dispute involving a film production agreement highlights the “generous and liberal approach” taken by Canadian courts with respect to the recognition and enforcement of foreign judgments. Even where the judgment includes both monetary and injunctive relief (including orders to take down all social media posts), the Ontario court will tend to adhere to the spirit of upholding the obligations created by the foreign judgment.
In Zashko v. Touchgate and Ahmed, the applicant Zashko Entertainment Inc., a Texas corporation with its principal place of business in Houston, brought an application in Texas for breach of contract against Toronto based company, Touchgate Global Inc. and its Toronto based sole registered director, Ahmed. The dispute was with respect to a production agreement in relation to a Pakistani film (the “Agreement”). The Agreement provided that Zashko would invest in and co-produce the film. The Agreement provided that it was governed by Texas law.
For reasons that are not delved into in the decision, Zashko took the position that Touchgate and Ahmed fundamentally breached the Agreement and started a civil action in Texas. Although the respondents were served in Toronto pursuant to the Hague Service Convention, they did not appear before the Texas court, and they did not challenge its jurisdiction or file an answer. The Texas court issued default judgment which included monetary relief by way of an order for damages, fees and costs, as well as injunctive relief, including, inter alia, orders permanently enjoining the respondents from claiming association with or ownership of the film, discussing/posting about the film in any way including on social media, distributing/revealing any information about the film and requiring the respondents to produce relevant documents about the film such as copies of all contracts and releases, the final music score and media related to the film or its production. The respondents were also ordered to remove and/or delete any comments, photos, videos or audio that they had previously posted online about the film.
The respondents appeared before the judge of the Ontario Superior of Justice to oppose the applicant’s request that the Ontario court recognize and enforce the Texas judgment. The judge began the analysis by reviewing the relevant legal principles behind the “generous and liberal” approach in Canada to the recognition and enforcement of foreign judgments. The purpose of such an application is to allow a pre-existing obligation to be fulfilled; it is not based on the original claim that the plaintiff brought against the defendant in the foreign jurisdiction, but rather on the obligation created by the foreign judgment, hence the underlying facts are irrelevant except as they relate to any potential defences to enforcement. The test is for the applicant to establish that there was a real and substantial connection between the foreign court and the underlying dispute and that the judgment was final and conclusive. Once that has been established, the respondent bears the onus of establishing any applicable defences, which include, fraud, denial of natural justice or public policy.
On the facts of the case, the application judge held that the Texas court properly assumed jurisdiction given that that there was a presumptive connecting factor, i.e.: a contract connected with the dispute was made in the jurisdiction, the Agreement having been completed in Texas. The judge also held that the Texas judgment was final as no appeals were filed in Texas and that there was no evidence that the aforementioned defences to enforcement were established.
With respect to the injunctive relief provided for in the Texas judgment, the judge acknowledged that the Ontario court must scrutinize the impact of the order, and ask itself such questions as: Are the terms of the order clear and specific enough to ensure that the defendant will know what is expected from him or her? Is the order limited in its scope and did the originating court retain power to issue further orders? Is the enforcement the least burdensome remedy for the Canadian justice system? Is the Canadian litigant exposed to unforeseen obligations? Are any third parties affected by the order? Will the use of judicial resources be consistent with what would be allowed for domestic litigants?
The judge concluded that the terms of the injunction are simple, clear and specific and it would be obvious to the respondents what they cannot do; applying the rest of the criteria for scrutinizing the impact of the foreign injunctive relief, the judgment in its entirety should be enforced.
Tae Mee Park’s practice includes insurance defence in a variety of different industries including the defence of media and entertainment companies in defamation, copyright, cyber risk and liability, privacy and SLAPP suits.