U.S. judgment against Omar Khadr not likely enforceable in Canada

     The judgment, from the U.S. District Court in Utah in Morris and Speers v. Khadr (415 F. Supp. 2d 1323 (D. Utah 2006) is a default judgment, issued when Omar Khadr was a prisoner at Guantanamo Bay, Cuba.    According to the reasons for judgment, “given the obvious difficulties of serving process on Mr. Khadr personally… the plaintiff obtained leave to “serve notice by publication”, specifically, “by publishing one notice in a newspaper of general circulation in the Toronto Canada area, and by posting the complaint on the website www.september11classaction.com”.  There was no response from Khadr.    The Court proceeded to award damages of US$102,600,000, which was the amount claimed, plus costs.     

     One well-established defence to the enforcement of foreign judgments is breach of natural justice, for example if the defendant did not get proper notice of the proceeding.   Speers v Khadr is an excellent example of such a case. 

     It comes as no surprise that serving the papers on Khadr at Guantanamo is difficult.   After all, Khadr was denied access even to legal counsel for lengthy periods.   If a process server cannot serve papers there, and if for some reason the papers cannot be mailed to Khadr there, what are the chances that family members could bring the papers to him?  The jail is not easily accessible for someone living in Canada.    Presumably family members could inform him by telephone, but only if they knew themselves.  Why then did the court not require the plaintiffs to serve the papers on his relatives?     

     The Court chose service by publication instead.  Seriously, what are the chances the plaintiffs would pick, out of the four or more newspapers of general circulation in Toronto, the newspaper that the relatives usually read, if indeed they usually read any newspaper?   There are other sources of news, after all, including radio and television.   Even if the plaintiffs picked the right newspaper, the Khadr family might not read it everyday.  What are the chances they would read it on that one single day when the notice appeared, and that they would see the notice, which may well be an inconspicuous one in the legal notices section     In short, why would anyone think it likely that the proceeding would come to Khadr’s attention?  Quite possibly the plaintiffs aimed to obtain a judgment without Khadr ever knowing of the proceeding.    

    Neither Khadr, nor pretty much anyone, would ever be able to pay more than a tiny fraction of US$102,600,000, even if he worked all his life and paid every penny of his earnings to Speer.  One would expect that a court would require that great care be taken to ensure the defendant gets notice of such a big claim, or for that matter, even a claim one thousandth that size.       

     Even if the proceeding did come to his attention, would he even be able to instruct a lawyer for his defence, or be able to give evidence?   

     In short, Khadr has a very strong defence to enforcement. The U.S. court seems to have been highly sympathetic to the plaintiffs, and chillingly indifferent, or worse, to the defendant's right to notice.  If the judgment is held enforceable notwithstanding, one would have to question whether the enforcing court respected the principle of the rule of law.  

SCC Upholds Injunction Against Google - Comment Part I

            In a much-anticipated decision, the Supreme Court of Canada has upheld an injunction issued by the British Columbia Supreme Court requiring Google not to display any part of certain websites on any of its search results, not just at Google.ca or in Canada, but also at Google.com and anywhere in the world:   Google v. Equustek Solutions  2017 SCC 34. 

  

The case started when Equustek, a manufacturer in British Columbia,  sued Datalink Technologies, a former distributor of Equustek’s products, for passing off Equustek’s products as its own, stealing Equustek’s designs to make competing products, and the like.  Datalink initially defended the action, but later abandoned its defence and moved from British Columbia to an unknown location where it continued to market the products online.   Several injunctions directing Datalink to cease were ignored, leading the courts of British Columbia to conclude that the only way to stop Datalink was to prevent its websites from being found on internet searches.      See my posts on earlier stages of this case, on July 9, 2015 and Feb. 18, 2016. 

            The case drew a lot of attention.  At the Supreme Court there were thirty five intervenors, including some from the United States.  The decision was covered in the international media including the Guardian.        

      

However, the story is somewhat overhyped.  It is not the first time a court issued an injunction affecting what can be seen online in a foreign country.  Earlier this year the European Court of Justice upheld an order of a French court to remove content from websites elsewhere in the European Union:  Concurrence SARL v Samsung Electronics France  (see my blog dated Feb. 27, 2017).  That content violated a commercial agreement.

As well, Google did not raise new, unsettled legal issues in its appeal.   Its first argument was that non-parties cannot be the subject of an interlocutory injunction.  In fact, it is already settled law that non-parties can be bound by injunctions.     An example would be a Mareva injunction that is commonly directed against not only the defendant but also the defendant’s bank, so that the defendant cannot have its bank move funds. Another example would be an injunction requiring non-party internet service providers to block the ability of customers to access certain websites, in order to prevent facilitating infringements of trademarks. Just like in the Google case, these injunctions prevent a non-party from facilitating the conduct of a defendant the court seeks to restrain.      

Google’s second argument was that an interlocutory injunction ought not have extra-territorial effect.   (Google did not challenge the court’s jurisdiction over Google).  Again, it is well-settled law that courts can issue injunctions with international effects.  World-wide Mareva injunctions have been available for many years.   

Google also argued that the injunction could restrict freedom of expression and might violate laws of other countries. This is likely the aspect of the case that drew the most attention from observers.   But again, this appeal did not really engage any momentous human rights issue.  The expression in question was the marketing of pirated products.   Never has the S.C.C. accepted that “freedom of expression requires the facilitation of the unlawful sale of goods” (para 48).  Further, Google provided no evidence that the injunction has or will violate foreign laws.     Google’s concerns were, in the Court’s words, merely “theoretical”.   Google acknowledged “most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong” (para 44).  

Even so, there is a real issue as to whether the Google injunction would be enforced around the world.  Many countries do not enforce foreign non-monetary judgments of any kind, even if they do not affect fundamental freedoms such as freedom of expression. Oddly, the Court’s reasons say nothing about whether the injunction could be enforced abroad.  Courts have sometimes declined to issue injunctions with international effect in circumstances where there were little or no prospect of enforcement.     Let’s hope this ruling can be taken to mean that enforceability need not be a factor in deciding whether to issue it.   If someone pursues an injunction, even in the face of limited prospects for enforcement, the injunction is probably important to him.  What harm is there in granting it?  

    

In part two of this post, I will address the dissent’s very conservative stance regarding interlocutory injunctions. 

The PRC Enforces a Foreign Judgment

For a long time it has been virtually impossible to have a foreign judgment enforced in the People’s Republic of China (“PRC”).  The PRC civil procedure law does not allow for enforcement unless the PRC is obligated to under a treaty or on the basis of reciprocity: see Article 282 of the PRC Civil Procedural Law.  The PRC has entered into treaties regarding judgments, all of which are bi-lateral, with thirty countries, including Hong Kong, but Canada is not among them.  The PRC has until now never enforced a judgment on the basis of reciprocity.  Some countries – such as Japan – have refused to enforce a PRC judgment because the PRC have not enforced their judgments. 

For the first time, in December 2016, a PRC court recognized and enforced a foreign judgment on the basis of reciprocity.  The Nanjing Intermediate People’s Court enforced a judgment of the Singapore High Court in the Kolmar Group AG case.  A Swiss company had successfully sued a Nanjing company in the High Court of Singapore, as per the jurisdiction selection clause of an agreement between them, and obtained a default judgment for US$350,000. The Swiss company applied to the Chinese Court for enforcement of that judgment on grounds of reciprocity.  The Singapore court had enforced a judgment of the Jiangsu Suzhou Intermediate People’s Court in 2014[1].  There is no treaty for enforcement of judgments between Switzerland and the PRC. Thus it is clear that the Chinese court’s decision to allow enforcement was based on reciprocity.  What remains unclear whether the Chinese courts will require that the originating jurisdiction have already enforced a Chinese judgment, or whether it is enough that the law of that originating jurisdiction would permit enforcement.     

This distinction is important for Canadian judgment creditors.  As far as I know, no Canadian court has ever enforced a PRC judgment.  But nor , as far as I know, has a Canadian court refused to enforce one at all, let alone refused  on grounds other than the established defences to enforcement, e.g. the originating court lacked jurisdiction, lack of notice or other breach of natural justice, fraud or the judgment was not final.    Given Canada’s comparatively liberal rules about enforcement of foreign judgments, one can expect that eventually a Canadian court will enforce a PRC judgment.    Canadian judgment creditors may have to wait until a Canadian court does enforce a PRC judgment before they will be able to enforce in the PRC.  American judgment creditors will be more encouraged, in that an American court has enforced a PRC judgment.   

Even if the Chinese courts follow the narrower concept of reciprocity, the Nanjing court’s ruling nonetheless signifies a big step forward for enforcement of foreign judgments, and is to be celebrated.

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[1] Giant Light Metal Technology (Kunshan) Co Ltd. v. Aksa Far East Pte Ltd.  [2014] SGHC 16