SUPREME
COURT OF CANADA
Between:
Club
Resorts Ltd.
Appellant
and
Morgan
Van Breda, Viktor Berg, Joan Van Breda, Tony Van Breda, Adam Van Breda and
Tonnille Van Breda
Respondents
-
and -
Tourism
Industry Association of Ontario, Amnesty International, Canadian Centre for
International Justice, Canadian Lawyers for International Human Rights and
Ontario Trial Lawyers Association
Interveners
And
Between:
Club
Resorts Ltd.
Appellant
and
Anna
Charron, Estate Trustee of the Estate of Claude Charron, deceased, the said
Anna Charron, personally, Jennifer Candace Charron, Stephanie Michelle Charron,
Christopher Michael Charron, Bel Air Travel Group Ltd. and Hola Sun Holidays
Limited
Respondents
-
and -
Tourism
Industry Association of Ontario, Amnesty International, Canadian Centre for International
Justice, Canadian Lawyers for International Human Rights and Ontario Trial
Lawyers Association
Interveners
Coram: McLachlin C.J. and Binnie,* LeBel, Deschamps, Fish, Abella,
Charron,* Rothstein and Cromwell JJ.
(* Binnie and Charron JJ. took no part in
the judgment.)
|
Reasons for
Judgment:
(paras. 1 to 125):
|
LeBel J. (McLachlin C.J. and Deschamps, Fish, Abella,
Rothstein and Cromwell JJ. concurring)
|
Club
Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572
Club Resorts
Ltd. Appellant
v.
Morgan Van Breda,
Viktor Berg, Joan Van Breda, Tony Van
Breda,
Adam Van
Breda and Tonnille Van Breda Respondents
and
Tourism Industry Association of Ontario,
Amnesty International,
Canadian Centre for International
Justice,
Canadian Lawyers for International Human
Rights and
Ontario Trial
Lawyers Association Interveners
‑ and ‑
Club Resorts
Ltd. Appellant
v.
Anna Charron, Estate Trustee of the
Estate of Claude Charron, deceased,
the said Anna Charron, personally,
Jennifer Candace Charron, Stephanie
Michelle Charron,
Christopher Michael Charron,
Bel Air Travel Group Ltd. and
Hola Sun
Holidays Limited Respondents
and
Tourism Industry Association of Ontario,
Amnesty International,
Canadian Centre for International
Justice,
Canadian Lawyers for International Human
Rights and
Ontario Trial
Lawyers Association Interveners
Indexed as: Club Resorts Ltd.
v. Van Breda
2012 SCC 17
File Nos.: 33692, 33606.
2011: March 21; 2012: April 18.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish,
Abella, Charron,* Rothstein and Cromwell JJ.
on appeal from the court of appeal for ontario
Private international law — Choice of forum — Court
having jurisdiction — Forum non conveniens — Respondents injured while
vacationing in Cuba — Actions for damages brought in Ontario — Defendants
bringing motion to stay actions on grounds that Ontario court lacks
jurisdiction, or alternatively, should decline to exercise jurisdiction on
basis of forum non conveniens — Whether Ontario court can assume jurisdiction
over actions — If so, whether Ontario court should decline to exercise its
jurisdiction on ground that court of another jurisdiction is clearly a more
appropriate forum for hearing of actions.
In
separate cases, two individuals were injured while on vacation outside of
Canada. Morgan Van Breda suffered catastrophic injuries on a beach in Cuba. Claude
Charron died while scuba diving, also in Cuba. Actions were brought in Ontario
against a number of parties, including the appellant, Club Resorts Ltd., a
company incorporated in the Cayman Islands that managed the two hotels where
the accidents occurred. Club Resorts sought to block those proceedings,
arguing that the Ontario courts lacked jurisdiction and, in the alternative,
that a Cuban court would be a more appropriate forum on the basis of the
doctrine of forum non conveniens. In both cases, the motion judges
found that the Ontario courts had jurisdiction with respect to the actions
against Club Resorts. In considering forum non conveniens, it was also
held that the Ontario court was clearly a more appropriate forum. The two
cases were heard together in the Court of Appeal. The appeals were both
dismissed.
Held: The appeals
should be dismissed.
This
case concerns the elaboration of the “real and substantial connection” test as
an appropriate common law conflicts rule for the assumption of jurisdiction.
In determining whether a court can assume jurisdiction over a certain claim,
the preferred approach in Canada has been to rely on a set of specific factors
which are given presumptive effect, as opposed to a regime based on an exercise
of almost pure and individualized judicial discretion. Given the nature of the
relationships governed by private international law, the framework for the
assumption of jurisdiction cannot be an unstable, ad hoc system made up
on the fly on a case‑by‑case basis — however laudable the objective
of individual fairness may be. There must be order in the system, and it must
permit the development of a just and fair approach to resolving conflicts.
Justice and fairness are undoubtedly essential purposes of a sound system of
private international law. But they cannot be attained without a system of
principles and rules that ensure security and predictability in the law
governing the assumption of jurisdiction by a court. The identification of a
set of relevant presumptive connecting factors and the determination of their
legal nature and effect will bring greater clarity and predictability to the
analysis of the problems of assumption of jurisdiction, while at the same time
ensuring consistency with the objectives of fairness and efficiency that
underlie this branch of the law. From this perspective, a clear distinction
must be maintained between, on the one hand, the factors or factual situations
that link the subject matter of the litigation and the defendant to the forum
and, on the other hand, the principles and analytical tools, such as the values
of fairness and efficiency or the principle of comity.
To
meet the common law real and substantial connection test, the party arguing
that the court should assume jurisdiction has the burden of identifying a
presumptive connecting factor that links the subject matter of the litigation
to the forum. Jurisdiction must be established primarily on the basis of
objective factors that connect the legal situation or the subject matter of the
litigation with the forum. Abstract concerns for order, efficiency or fairness
in the system are no substitute for connecting factors that give rise to a
“real and substantial” connection for the purposes of the law of conflicts. In
a case concerning a tort, the following factors are presumptive connecting
factors that, prima facie, entitle a court to assume jurisdiction over a
dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the
province.
Although
the factors set out in the list are considered presumptive, this does not mean
that the list of recognized factors is complete, as it may be reviewed over
time and updated by adding new presumptive connecting factors. When a court
considers whether a new connecting factor should be given presumptive effect,
the values of order, fairness and comity can serve as useful analytical tools
for assessing the strength of the relationship with a forum to which the factor
in question points. These values underlie all presumptive connecting factors,
whether listed or new. In identifying new presumptive factors, a court should
look to connections that give rise to a relationship with the forum that is
similar in nature to the ones which result from the listed factors. Relevant
considerations include:
(a) Similarity of the connecting factor with the recognized
presumptive connecting factors;
(b) Treatment of the connecting factor in the case law;
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private
international law of other legal systems with a shared commitment to order, fairness
and comity.
The
presumption of jurisdiction that arises where a recognized connecting factor —
whether listed or new — applies is not irrebuttable. The burden of rebutting
the presumption of jurisdiction rests, of course, on the party challenging the
assumption of jurisdiction. That party must negate the presumptive effect of
the listed or new factor and convince the court that the proposed assumption of
jurisdiction would be inappropriate. This could be accomplished by
establishing facts which demonstrate that the presumptive connecting factor
does not point to any real relationship between the subject matter of the litigation
and the forum or points only to a weak relationship between them.
If
the court concludes that it lacks jurisdiction because none of the presumptive
connecting factors — whether listed or new — apply or because the presumption
of jurisdiction that flows from one of those factors has been rebutted, it must
dismiss or stay the action, subject to the possible application of the forum of
necessity doctrine. If jurisdiction is established, the claim may proceed,
subject to the court’s discretion to stay the proceedings on the basis of the
doctrine of forum non conveniens.
A
clear distinction must be drawn between the existence and the exercise of
jurisdiction. Once jurisdiction is established, if the defendant does not
raise further objections, the litigation proceeds before the court of the
forum. The court cannot decline to exercise its jurisdiction unless the
defendant invokes forum non conveniens. The decision to raise this
doctrine rests with the parties, not with the court seized of the claim. If a
defendant raises an issue of forum non conveniens, the burden is on him
or her to show why the court should decline to exercise its jurisdiction and
displace the forum chosen by the plaintiff. The defendant must show that the
alternative forum is clearly more appropriate and that, in light of the
characteristics of the alternative forum, it would be fairer and more efficient
to choose an alternative forum and to deny the plaintiff the benefits of his or
her decision to select a forum. When it is invoked, the doctrine of forum
non conveniens requires a court to go beyond a strict application of the
test governing the recognition and assumption of jurisdiction. It is based on
a recognition that a common law court retains a residual power to decline to exercise
its jurisdiction in appropriate, but limited, circumstances in order to assure
fairness to the parties and the efficient resolution of the dispute. The court
however, should not exercise its discretion in favour of a stay solely because
it finds, once all relevant concerns and factors are weighed, that comparable
forums exist in other provinces or states. It is not a matter of flipping a
coin. A court hearing an application for a stay of proceedings must find that
a forum exists that is in a better position to dispose fairly and efficiently
of the litigation. On the other hand, a court must refrain from leaning too
instinctively in favour of its own jurisdiction. The doctrine focuses on the
contexts of individual cases and the factors that a court may consider in
deciding whether to apply forum non conveniens may vary depending on the
context. Such factors might include the locations of parties and witnesses,
the cost of transferring the case to another jurisdiction or of declining the
stay, the impact of a transfer on the conduct of the litigation or on related
or parallel proceedings, the possibility of conflicting judgments, problems
related to the recognition and enforcement of judgments, and the relative
strengths of the connections of the two parties. Ultimately, the decision
falls within the reasoned discretion of the trial court. This exercise of
discretion will be entitled to deference from higher courts, absent an error of
law or a clear and serious error in the determination of relevant facts which
takes place at an interlocutory or preliminary stage.
In
Van Breda, a contract was entered into in Ontario. The existence of a
contract made in Ontario that is connected with the litigation is a presumptive
connecting factor that, on its face, entitles the courts of Ontario to assume
jurisdiction in this case. Club Resorts has failed to rebut the presumption of
jurisdiction that arises where this factor applies. Therefore, there was a
sufficient connection between the Ontario court and the subject matter of the
litigation. Club Resorts has not discharged its burden of showing that a Cuban
court would clearly be a more appropriate forum. While a sufficient connection
exists between Cuba and the subject matter of the litigation to support an
action there, issues related to the fairness to the parties and to the
efficient disposition of the claim must be considered. A trial held in Cuba
would present serious challenges to the parties. All things considered, the
burden on the plaintiffs clearly would be far heavier if they were required to
bring their action in Cuba.
In
Charron, the facts supported the conclusion that Club Resorts was
carrying on a business in Ontario, which is a presumptive connecting factor.
Club Resorts’ commercial activities in Ontario went well beyond promoting a
brand and advertising. Its representatives were in the province on a regular
basis and it benefitted from the physical presence of an office in Ontario. It
therefore follows that it has been established that a presumptive connecting
factor applies and that the Ontario court is prima facie entitled to
assume jurisdiction. Club Resorts has not rebutted the presumption of
jurisdiction that arises from this connecting factor and therefore the Ontario
court has jurisdiction on the basis of the real and substantial connection
test. Furthermore, Club Resorts failed to discharge its burden of showing that
a Cuban court would clearly be a more appropriate forum in the circumstances of
this case. Considerations of fairness to the parties weigh heavily in favour
of the plaintiffs.
Cases Cited
Explained: Muscutt v.
Courcelles (2002), 60 O.R. (3d) 20; referred to: Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666; Éditions
Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636; British Columbia v. Imperial Tobacco Canada
Ltd., 2005 SCC 49, [2005]
2 S.C.R. 473; Castillo v. Castillo, 2005 SCC 83, [2005] 3 S.C.R. 870; Unifund
Assurance Co. v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2
S.C.R. 63; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; Morguard
Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; Hunt v. T&N plc, [1993] 4 S.C.R. 289; Beals v. Saldanha,
2003 SCC 72, [2003] 3 S.C.R. 416; Tolofson
v. Jensen, [1994] 3 S.C.R. 1022; McLean v. Pettigrew, [1945] S.C.R. 62; Spar Aerospace Ltd.
v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 S.C.R. 205; Amchem
Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1
S.C.R. 897; Lemmex v. Bernard (2002), 60 O.R. (3d) 54; Gajraj v.
DeBernardo (2002), 60 O.R. (3d) 68; Sinclair v. Cracker Barrel Old Country
Store, Inc. (2002), 60
O.R. (3d) 76; Leufkens v. Alba Tours International Inc. (2002), 60 O.R.
(3d) 84; Coutu v. Gauthier Estate, 2006 NBCA 16, 296 N.B.R. (2d) 34; Fewer
v. Ellis, 2011 NLCA 17, 305 Nfld. & P.E.I.R. 39; R. v. Hape,
2007 SCC 26, [2007] 2 S.C.R. 292; Spiliada Maritime Corp. v. Cansulex Ltd.,
[1987] 1 A.C. 460; Teck Cominco Metals Ltd. v. Lloyd’s Underwriters,
2009 SCC 11, [2009] 1 S.C.R. 321; Oppenheim forfait GMBH v. Lexus maritime inc.,
1998 CanLII 13001.
Statutes and Regulations Cited
Civil
Code of Québec, S.Q. 1991, c. 64, arts. 3076 to 3168,
3135, 3148.
Constitution Act, 1867, s. 92 .
Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28, s. 11.
Court Jurisdiction and Proceedings Transfer Act, S.N.S. 2003 (2nd Sess.), c. 2.
Court Jurisdiction and Proceedings Transfer Act, S.S. 1997, c. C‑41.1.
Court Jurisdiction and Proceedings Transfer Act, S.Y. 2000, c. 7 [not yet in force].
Family Law Act, R.S.O. 1990, c. F.3.
Rules of Civil Procedure, R.R.O. 1990,
Reg. 194, r. 17.02.
Authors Cited
Blom, Joost, and Elizabeth Edinger. “The Chimera of the Real and
Substantial Connection Test” (2005), 38 U.B.C. L. Rev. 373.
Briggs, Adrian. The Conflict of Laws, 2nd ed. Oxford: Oxford University Press, 2008.
Brun, Henri, Guy Tremblay et Eugénie Brouillet. Droit
constitutionnel, 5e éd. Cowansville, Qué.: Yvon Blais, 2008.
Castel, Jean‑Gabriel. “The Uncertainty Factor in Canadian
Private International Law” (2007), 52 McGill L.J. 555.
Emanuelli, Claude. Droit international privé québécois, 3e
éd. Montréal: Wilson & Lafleur, 2011.
Goldstein, Gérald, et Ethel Groffier. Droit international privé,
t. I, Théorie générale. Cowansville, Qué.:
Yvon Blais, 1998.
Hogg, Peter W. Constitutional Law of Canada, vol. 1,
5th ed. Scarborough, Ont.: Thomson/Carswell, 2007.
Manitoba. Law Reform Commission. Private International Law,
Report #119. Winnipeg: The Commission, 2009.
Monestier, Tanya. “A ‘Real and Substantial’ Improvement? Van
Breda Reformulates the Law of Jurisdiction in Ontario”, in Todd L.
Archibald and Randall Scott Echlin, eds., Annual Review of Civil Litigation,
2010. Toronto: Carswell, 2010, 185.
Perell, Paul M., and John W. Morden. The Law of Civil
Procedure in Ontario. Markham, Ont.: LexisNexis Canada, 2010.
Pitel, Stephen G. A., and Nicholas S. Rafferty. Conflict
of Laws. Toronto: Irwin Law, 2010.
Talpis, Jeffrey A., with the collaboration of Shelley L.
Kath. “If I am from Grand‑Mère, Why Am I Being Sued in Texas?”
Responding to Inappropriate Foreign Jurisdiction in Quebec‑United States
Crossborder Litigation. Montréal: Thémis, 2001.
Uniform Law Conference of Canada. Uniform Court Jurisdiction and
Proceedings Transfer Act (online:
http://www.ulcc.ca/en/us/Uniform_Court_Jurisdiction_+_Proceedings_Transfer_Act_En.pdf).
Walker, Janet. “Reforming the Law of Crossborder Litigation:
Judicial Jurisdiction”, Consultation Paper, Law Commission of Ontario, March
2009 (online: http://www.ontla.on.ca/library/repository/mon/23003/290663.pdf).
Yntema, Hessel E. “The Objectives of Private International
Law” (1957), 35 Can. Bar Rev. 721.
APPEALS
from a judgment of the Ontario Court of Appeal (O’Connor A.C.J.O. and Weiler,
MacPherson, Sharpe and Rouleau JJ.A.), 2010 ONCA 84, 98 O.R. (3d) 721, 264
O.A.C. 1, 316 D.L.R. (4th) 201, 71 C.C.L.T. (3d) 161, 77 R.F.L. (6th) 1, 81
C.P.C. (6th) 219, [2010] O.J. No. 402 (QL), 2010 CarswellOnt 549 (sub
nom. Van Breda v. Village Resorts Ltd. and Charron Estate v. Village
Resorts Ltd.), affirming a decision of Pattillo J., 60 C.P.C. (6th) 186,
2008 CanLII 32309, [2008] O.J. No. 2624 (QL), 2008 CarswellOnt 3867 (sub
nom. Van Breda v. Village Resorts Ltd.), and affirming a decision of
Mulligan J., 92 O.R. (3d) 608, 2008 CanLII 53834, [2008] O.J. No. 4078
(QL), 2008 CarswellOnt 6165 (sub nom. Charron Estate v. Bel Air Travel Group
Ltd.). Appeals dismissed.
John A. Olah, for the appellant (33692).
Chris G.
Paliare, Robert A. Centa and Tina H. Lie, for the respondents Morgan Van
Breda et al. (33692).
Peter J.
Pliszka and Robin P. Roddey, for the appellant (33606).
Jerome R.
Morse, Lori Stoltz and John J. Adair, for the respondents Anna
Charron et al. (33606).
Howard B.
Borlack, Lisa La Horey and Sabine Kharabian, for the respondent Bel Air
Travel Group Ltd. (33606).
Catherine M.
Buie, for
the respondent Hola Sun Holidays Limited (33606).
John Terry and Jana Stettner, for the intervener the Tourism
Industry Association of Ontario (33606 and 33692).
François Larocque, Michael Sobkin, Mark C. Power and Lauren J. Wihak, for the interveners Amnesty
International, the Canadian Centre for International Justice and the Canadian
Lawyers for International Human Rights (33606 and 33692).
Allan Rouben, for the intervener the Ontario
Trial Lawyers Association (33606 and 33692).
The
judgment of the Court was delivered by
LeBel J. —
I. Introduction
[1]
Tourism has grown into one of the most personal
forms of globalization in the modern world. Canadians look elsewhere for the
sun, or to see new sights or seek new experiences. Trips are planned and taken
with great expectations. But personal tragedies do happen. Happiness gives way
to grief, as in the situations that resulted in these appeals. A young woman,
Morgan Van Breda, suffered catastrophic injuries on a beach in Cuba. A family
doctor and father, Dr. Claude Charron, died while scuba diving, also in Cuba.
Actions were brought in Ontario against a number of parties, including the
appellant Club Resorts Ltd. (“Club Resorts”), a company incorporated in the
Cayman Islands that managed the two hotels where the accidents occurred. Club
Resorts sought to block those proceedings, arguing that the Ontario courts
lacked jurisdiction and, in the alternative, that a Cuban court would be a more
appropriate forum on the basis of the doctrine of forum non conveniens.
The same issues have now been raised in this Court. I will begin by summarizing
the events that led to the litigation, the conduct of the litigation and the
judgments of the courts below. I will then consider the principles that should
apply to the assumption of jurisdiction and the doctrine of forum non conveniens
under the common law conflicts rules of Canadian private international law.
Finally, I will apply those principles to determine whether the Ontario courts
have jurisdiction and, if so, whether they should decline to exercise it.
II. Background
and Facts
A. Van
Breda
[2]
In June 2003, the respondent Viktor Berg and his
spouse, Ms. Van Breda, went on a trip to Cuba, where they stayed at the
SuperClubs Breezes Jibacoa resort managed by Club Resorts. Mr. Berg, a
professional squash player, had made arrangements for a one-week stay for two
people at this hotel through René Denis, an Ottawa-based travel agent operating
a business known as Sport au Soleil.
[3]
Mr. Denis’s business involved arranging for
racquet sport professionals for, among others, Club Resorts, in exchange for
undisclosed compensation. Mr. Denis also received a fee from each
professional. Once the arrangements for Mr. Berg were finalized, Mr. Denis
sent him a letter on letterhead bearing the words “SuperClubs Cuba — Tennis”,
which confirmed the details of the agreement with Club Resorts: Mr. Berg was to
provide two hours of tennis lessons a day in exchange for bed and board and
other services for two people at the hotel.
[4]
The accident happened on the first day of their
stay. Ms. Van Breda tried to do some exercises on a metal structure on the
beach, but the structure collapsed. She suffered catastrophic injuries and, as
a result, became paraplegic. After spending a few days in a hospital in Cuba,
she returned to Canada, going to Calgary where her family lived. She is now
living in British Columbia with Mr. Berg. They never returned to Ontario,
which they had planned to do after their holiday.
[5]
In May 2006, Ms. Van Breda, her relatives and
Mr. Berg sued several defendants, including Mr. Denis, Club Resorts, and some
companies associated with Club Resorts in the SuperClubs group, in the Ontario
Superior Court of Justice. Their claim was framed in contract and in tort. They
sought damages for personal injury, damages for loss of support, care, guidance
and companionship pursuant to the Family Law Act, R.S.O. 1990, c. F.3,
and punitive damages.
[6]
Some of the parties, including those who were
served outside Ontario under rule 17.02 of the Rules of Civil Procedure,
R.R.O. 1990, Reg. 194, moved to dismiss the action for want of jurisdiction. In
the alternative, they asked the Superior Court of Justice to decline
jurisdiction on the basis of forum non conveniens.
B. Charron
[7]
In January 2002, Dr. Charron and his wife booked
a vacation package through a travel agent, Bel Air Travel Group Ltd. (“Bel
Air”). This package was offered by Hola Sun Holidays Ltd. (“Hola Sun”), which
sold packages offered by, among others, SuperClubs. It was an all-inclusive
package — at the Breezes Costa Verde hotel in Cuba — that featured scuba
diving. The hotel was owned by Gaviota SA (Ltd.) (“Gaviota”), a Cuban
corporation, but was managed by the appellant, Club Resorts. Dr. and Mrs.
Charron reached the Breezes Costa Verde on February 8, 2002. Four
days later, Dr. Charron drowned during his second scuba dive.
[8]
Mrs. Charron and her children sued for breach of
contract and negligence. Dr. Charron’s estate sought damages for loss of future
income, and the individual plaintiffs also sought damages for loss of love,
care, guidance and companionship pursuant to the Family Law Act. The
statement of claim was served on the Ontario defendants, Bel Air and Hola Sun.
It was also served outside Ontario on several foreign defendants, including
Club Resorts, under rule 17.02 of the Rules of Civil Procedure. The
parties served outside Ontario included the diving instructor and the captain
of the boat. Club Resorts and an associated company, Village Resorts
International Ltd., which owned the SuperClubs trademark, moved to dismiss the
action on the ground that the Ontario courts lacked jurisdiction or, in the
alternative, to stay the action on the grounds that Ontario was not the most
appropriate forum.
C. Judicial
History
(1) Van
Breda — Ontario Superior Court of Justice (2008), 60 C.P.C. (6th)
186
[9]
In Van Breda, Pattillo J. held that Club
Resorts’ motion turned on whether there was a real and substantial connection
in accordance with the test laid out by the Ontario Court of Appeal in Muscutt
v. Courcelles (2002), 60 O.R. (3d) 20. He found that there was a connection
between Ontario and Club Resorts by virtue of the activities the company
engaged in in Ontario through Mr. Denis. He also found on a prima facie
basis that the agreement between Mr. Berg and Club Resorts had actually
been concluded in Ontario. After reviewing the other factors from Muscutt,
including unfairness to the defendants in assuming jurisdiction, unfairness to
the plaintiffs in not doing so and the involvement of other parties to the suit,
he held that there was a sufficient connection between Ontario and the subject
matter of the litigation. Pattillo J. then considered the issue of forum
non conveniens. Although he accepted that Cuba also had jurisdiction, he
concluded that it had not been established that a Cuban court would clearly be
a more appropriate forum. For these reasons, he held that the Ontario Superior
Court of Justice should entertain the action as against Club Resorts.
(2) Charron
— Ontario Superior Court of Justice (2008), 92 O.R. (3d) 608
[10]
In Charron, Mulligan J. held against Club
Resorts. In his opinion, a contract had been entered into between Dr. Charron
and Bel Air. The travel agency had booked an all-inclusive package at the Cuban
hotel through Hola Sun, which had an agreement with Club Resorts. These facts
weighed in favour of assuming jurisdiction. Mulligan J. also found that there
was a connection between Ontario and the defendants. In his view, the resort
relied heavily on international travellers to ensure its profitability. Club
Resorts marketed the resort in Ontario by way of an agreement with Hola Sun. I
note that the record indicated that Club Resorts or one of its associated
companies had an office in Richmond Hill, Ontario. After reviewing the other
factors from Muscutt, Mulligan J. held that the Ontario courts had
jurisdiction with respect to Club Resorts. In considering forum non
conveniens, Mulligan J. weighed several factors. He took into account the
fact that more parties and witnesses were located in Ontario than in Cuba, that
the damage had been sustained in Ontario and that a liability insurance policy
was available to the foreign defendants in Ontario. In addition, Mrs. Charron
and her children would lose the benefit of statutory family law remedies if the
case were to proceed in Cuba. For these reasons, Mulligan J. held that the
Ontario court was clearly a more appropriate forum than a Cuban court.
(3) Ontario
Court of Appeal, 2010 ONCA 84, 98 O.R. (3d) 721
[11]
The two cases were heard together in the Court
of Appeal. After ordering a rehearing, the Court of Appeal, in reasons written
by Sharpe J.A., took the opportunity to review and reframe the Muscutt
test. I will discuss this new framework below in reviewing the evolution of the
common law policy relating to conflicts of jurisdiction and conflicts of laws.
[12]
Suffice it to say at this stage that, after
recasting the Muscutt test, the Court of Appeal unanimously held, in
both cases, that the Ontario courts had jurisdiction over the claims and the
parties. It then decided that the Ontario courts should not decline
jurisdiction on the basis of forum non conveniens principles, because a
Cuban court would not clearly be a more appropriate forum.
[13]
The appeals in Van Breda and Charron
were also heard together in this Court. They were heard during the same session
as two other appeals involving the issues of jurisdiction and forum non
conveniens, which concerned actions in damages for defamation (Breeden
v. Black, 2012 SCC
19, [2012] 1 S.C.R. 666, and Éditions Écosociété
Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636).
III. Analysis
Issues
(1) Nature
and Scope of Private International Law
[14]
These appeals raise broad issues about the
fundamental principles of the conflict of laws, as this branch of the law has
traditionally been known in the common law, or “private international law” as
it is often called now (A. Briggs, The Conflict of Laws (2nd ed.
2008), at pp. 2-3; Manitoba Law Reform Commission, Private International Law,
Report #119 (2009), at p. 2; J.-G. Castel, “The Uncertainty Factor in Canadian
Private International Law” (2007), 52 McGill L.J. 555).
[15]
Although both appeals raise issues concerning
both the determination of whether a court has jurisdiction (the test of
jurisdiction simpliciter) and the principles governing a court’s
decision to decline to exercise its jurisdiction (the doctrine of forum non
conveniens), those issues may have an impact on the development of other
areas of private international law. Private international law is in essence
domestic law, and it is designed to resolve conflicts between different
jurisdictions, the legal systems or rules of different jurisdictions and
decisions of courts of different jurisdictions. It consists of legal principles
that apply in situations in which more than one court might claim jurisdiction,
to which the law of more than one jurisdiction might apply or in which a court
must determine whether it will recognize and enforce a foreign judgment or, in
Canada, a judgment from another province (S. G. A. Pitel and
N. S. Rafferty, Conflict of Laws (2010), at p. 1).
[16]
Three categories of issues — jurisdiction, forum
non conveniens and the recognition of foreign judgments — are intertwined
in this branch of the law. Thus, the framework established for the purpose of
determining whether a court has jurisdiction may have an impact on the choice
of law and on the recognition of judgments, and vice versa. Judicial decisions
on choice of law and the recognition of judgments have played a central role in
the evolution of the rules related to jurisdiction. None of the divisions of
private international law can be safely analysed and applied in isolation from
the others. This said, the central focus of these appeals is on jurisdiction
and the appropriate forum.
(2) Issues
Related to Jurisdiction: Assumption and Exercise of Jurisdiction
[17]
Two issues arise in these appeals. First, were
the Ontario courts right to assume jurisdiction over the claims of the
respondents Van Breda and Charron and over the appellant, Club Resorts? Second,
were they right to exercise that jurisdiction and dismiss an application for a
stay based on forum non conveniens?
[18]
To be able to resolve these issues, I must first
discuss the evolution of the rules of jurisdiction simpliciter in
Canadian private international law. It will be necessary to review the approach
the Ontario Court of Appeal adopted in respect of the questions of assumption
of jurisdiction and forum non conveniens in its judgments in the cases
at bar and, in particular, its reconsideration of the principles that it had
previously set out in Muscutt.
[19]
I will then propose an analytical framework and
legal principles for assuming jurisdiction (jurisdiction simpliciter)
and for deciding whether to decline to exercise it (forum non
conveniens). On that basis, I will review the facts of the cases at bar to
determine whether the Ontario courts made any reviewable errors when they
decided to retain jurisdiction over them.
[20]
Before turning to these issues, however, it is
important to consider the constitutional underpinnings of private international
law in Canada. This part of the analysis is necessary in order to explain the
origins of the “real and substantial connection test” as it is now known, its
nature, and its impact on the development of the principles of private
international law.
(3) Constitutional
Underpinnings of Private International Law
[21]
Conflicts rules must fit within Canada’s
constitutional structure. Given the nature of private international law, its
application inevitably raises constitutional issues. This branch of the law is
concerned with the jurisdiction of courts of the Canadian provinces, with
whether that jurisdiction should be exercised, with what law should apply to a
dispute, and with whether a court should recognize and enforce a judgment
rendered by a court of another province or country. The rules of private
international law can be found, in the common law provinces, in the common law
and in statute law and, in Quebec, in the Civil Code of Québec, S.Q.
1991, c. 64, which contains a well-developed set of rules and principles in
this area (see Civil Code of Québec, Book Ten, arts. 3076 to 3168). The
interplay between provincial jurisdiction and external legal situations takes
place within a constitutional framework which limits the external reach of
provincial laws and of a province’s courts. The Constitution assigns powers to
the provinces. But these powers are subject to the restriction that they be
exercised within the province in question (see P. W. Hogg, Constitutional
Law of Canada (5th ed. 2007), vol. 1, at pp. 364-65 and 376-77;
H. Brun, G. Tremblay and E. Brouillet, Droit constitutionnel (5th
ed. 2008), at p. 569; British Columbia v. Imperial Tobacco Canada Ltd.,
2005 SCC 49, [2005] 2 S.C.R. 473, at paras. 26-28, per Major J.), and
they must be exercised in a manner consistent with the territorial restrictions
created by the Constitution (see Castillo v. Castillo, 2005 SCC 83,
[2005] 3 S.C.R. 870, at para. 5, per Major J.; Unifund Assurance Co.
v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63, at
para. 51, per Binnie J.).
(4) Origins
of the Real and Substantial Connection Test
[22]
The real and substantial connection test arose
out of decisions of this Court that were aimed at establishing broad and
flexible principles to govern the exercise of provincial powers and the actions
of a province’s courts. It was focussed on two issues: (1) the risk of
jurisdictional overreach by provinces and (2) the recognition of decisions
rendered in other jurisdictions within the Canadian federation and in other
countries. In developing the real and substantial connection test, the Court
crafted a constitutional principle rather than a simple conflicts rule (see
G. Goldstein and E. Groffier, Droit international privé, vol. I, Théorie
générale (1998), at p. 47). However, the test was born as a general
organizing principle of the conflict of laws. Its constitutional dimension
appeared only later. Courts have used the expression “real and substantial
connection” to describe the test in both senses, and often in the same
judgment. This has produced confusion about both the nature of the test and
the constitutional status of the rules and principles of private international
law. A clearer distinction needs to be drawn between the private international
law and constitutional dimensions of this test.
[23]
From a constitutional standpoint, the Court has,
by developing tests such as the real and substantial connection test, sought to
limit the reach of provincial conflicts rules or the assumption of jurisdiction
by a province’s courts. However, this test does not dictate the content of
conflicts rules, which may vary from province to province. Nor does it
transform the whole field of private international law into an area of
constitutional law. In its constitutional sense, it places limits on the reach
of the jurisdiction of a province’s courts and on the application of provincial
laws to interprovincial or international situations. It also requires that all
Canadian courts recognize and enforce decisions rendered by courts of the other
Canadian provinces on the basis of a proper assumption of jurisdiction. But it
does not establish the actual content of rules and principles of private
international law, nor does it require that those rules and principles be
uniform.
[24]
The first mention of a “real and substantial
connection test” in the Court’s modern jurisprudence can be found in the
reasons of Dickson J. in Moran v. Pyle National (Canada) Ltd., [1975] 1
S.C.R. 393. That case concerned a tort action with respect to manufacturer’s
liability. The main issue was whether the courts of Saskatchewan had
jurisdiction over the claim and, if so, what substantive law governed it.
Dickson J. suggested that the English courts seemed to be moving towards some
form of “real and substantial connection test” (pp. 407-8) to resolve issues
related to the assumption of jurisdiction by a province’s courts and the
appropriate choice of the law applicable to a tort. The test was formally
adopted in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R.
1077. As had been the case in Moran, the Court’s intention in Morguard
was to develop an organizing principle of Canadian private international law,
albeit with constitutional overtones. The test’s constitutional role in the
Canadian federation was confirmed a few years later in Hunt v. T&N plc,
[1993] 4 S.C.R. 289. Its Janus-like nature — with a private international law
face on the one hand and a constitutional face on the other — crystallized in Hunt
and remained a permanent feature of the subsequent jurisprudence.
[25]
In retrospect, it can be seen that in Morguard,
the Court initiated a major shift in the framework governing the conflict of
laws in Canada by accepting the validity of the real and substantial connection
test as a principle governing the rules applicable to conflicts. In view of its
importance, the case merits closer consideration. At issue in Morguard
was an application to enforce, in British Columbia, a judgment rendered in
Alberta against a resident of British Columbia. The claim related to a debt
secured by a mortgage on property in Alberta. The parties were resident in
Alberta at the time the loan was made. La Forest J., writing for a
unanimous Court, called for a re-evaluation of relationships between the courts
of the provinces within the Canadian federation. The creation of the Canadian
federation established an internal space within which exchanges should occur
more freely than between independent states. The principle of comity and the
principles of fairness and order applicable within a federal space required
that the rules of private international law be adjusted (Morguard, at
pp. 1095-96).
[26]
In Morguard, the Court held that the
courts of a province must recognize and enforce a judgment of a court of
another province if a real and substantial connection exists between that court
and the subject matter of the litigation. Another purpose of the test was to
prevent improper assumptions of jurisdiction by the courts of a province. Thus,
the test was designed to ensure that claims are not prosecuted in a
jurisdiction that has little or no connection with either the transactions or
the parties, and it requires that a judgment rendered by a court which has
properly assumed jurisdiction in a given case be recognized and enforced. La
Forest J. did not seek to determine the precise content of this real and
substantial connection test (Morguard, at p. 1108), nor did he
elaborate on the strength of the connection. Rather, he held that the
connections between the matters or the parties, on the one hand, and the court,
on the other, must be of some significance in order to promote order and
fairness. They must not be “tenuous” (p. 1110). La Forest J. added that
the requirement of a real and substantial connection was consistent with the
constitutional imperative that provincial power be exercised “in the province”
(p. 1109). Because the appeal had not been argued on constitutional grounds,
however, he refrained from determining whether the real and substantial
connection test should be considered a constitutional test.
[27]
The Court’s subsequent judgment in Hunt
confirmed the constitutional nature of the real and substantial connection
test. That case concerned the application of a “blocking” statute enacted by
the Quebec legislature that prohibited the transfer to other jurisdictions of
certain documents kept by corporations in Quebec, even in the context of court
litigation. The Court found that the statute was not applicable to litigation
conducted in British Columbia. It held that assumptions of jurisdiction by a
province and its courts must be grounded in the principles of order and
fairness in the judicial system. The real and substantial connection test from Morguard
reflected the need for limits on assumptions of jurisdiction by a province’s
courts (Hunt, at p. 325). Any improper assumption of jurisdiction would
be negated by the requirement that there be a “real and substantial connection”
(p. 328; see C. Emanuelli, Droit international privé québécois (3rd
ed. 2011), at p. 38).
[28]
Since Hunt, the real and substantial
connection test has been recognized as a constitutional imperative in the
application of the conflicts rules. It reflects the limits of provincial
legislative and judicial powers and has thus become more than a conflicts rule.
Its application was extended to the recognition and enforcement of foreign
judgments in Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416.
[29]
But, in the common law, the nature of the
conflicts rules that would accord with the constitutional imperative has
remained largely undeveloped in this Court’s jurisprudence. Although the real
and substantial connection test has been consistently applied both as a
constitutional test and as a principle of private international law, since Hunt,
the Court has generally declined to articulate the content of the private
international law rules that would satisfy the test’s constitutional
requirements or to develop a framework for them. The Court has continued to
affirm the relevance and importance of the test and has even extended it to
foreign judgments, but without attempting to elaborate upon the rules it
requires (see Beals, at paras. 23 and 28, per Major J.).
[30]
So the test does exist. But what does it mean?
What rules would satisfy its status as a constitutional imperative? Two
approaches are possible. One approach is to view the test not only as a
constitutional principle, but also as a conflicts rule in itself. If it is
viewed as a conflicts rule, its content would fall to be determined on a
case-by-case basis by the courts in decisions in which they would attempt to
implement the objectives of order and fairness in the legal system. The other
approach is to accept that the test imposes constitutional limits on provincial
powers, but to seek to develop a system of connecting factors and principles
designed to make the resolution of conflict of laws issues more predictable in
order to reduce the scope of judicial discretion exercised in the context of
each case. Some academic commentators view the second approach as critical in
order to maintain order, efficiency and predictability in this area of the law.
Indeed, the real and substantial connection test itself has been criticized as
being much too loose and unpredictable to facilitate an orderly resolution of
conflicts issues (see J.-G. Castel; J. Blom and E. Edinger, “The Chimera
of the Real and Substantial Connection Test” (2005), 38 U.B.C. L. Rev.
373).
[31]
Thus, in the course of this review, we should
remain mindful of the distinction between the real and substantial connection
test as a constitutional principle and the same test as the organizing
principle of the law of conflicts. With respect to the constitutional
principle, the territorial limits on provincial legislative competence and on
the authority of the courts of the provinces derive from the text of s. 92 of
the Constitution Act, 1867 . These limits are, in essence, concerned
with the legitimate exercise of state power, be it legislative or
adjudicative. The legitimate exercise of power rests, inter alia, upon
the existence of an appropriate relationship or connection between the state
and the persons who are brought under its authority. The purpose of
constitutionally imposed territorial limits is to ensure the existence of the
relationship or connection needed to confer legitimacy.
[32]
As can be observed from the jurisprudence, in
Canadian constitutional law, the real and substantial connection test has given
expression to the constitutionally imposed territorial limits that underlie the
requirement of legitimacy in the exercise of the state’s power of
adjudication. This test suggests that the connection between a state and a
dispute cannot be weak or hypothetical. A weak or hypothetical connection
would cast doubt upon the legitimacy of the exercise of state power over the
persons affected by the dispute.
[33]
The constitutionally imposed territorial limits
on adjudicative jurisdiction are related to, but distinct from, the real and
substantial connection test as expressed in conflicts rules. Conflicts rules
include the rules that have been chosen for deciding when jurisdiction can be
assumed over a given dispute, what law will govern a dispute or how an
adjudicative decision from another jurisdiction will be recognized and
enforced. The constitutional territorial limits, on the other hand, are
concerned with setting the outer boundaries within which a variety of
appropriate conflicts rules can be elaborated and applied. The purpose of the
constitutional principle is to ensure that specific conflicts rules remain
within these boundaries and, as a result, that they authorize the assumption of
jurisdiction only in circumstances representing a legitimate exercise of the
state’s power of adjudication.
[34]
This case concerns the
elaboration of the “real and substantial connection” test as an appropriate
common law conflicts rule for the assumption of jurisdiction. I leave further
elaboration of the content of the constitutional test for adjudicative
jurisdiction for a case in which a conflicts rule is challenged on the basis of
inconsistency with constitutionally imposed territorial limits. To be clear,
however, the existence of a constitutional test aimed
at maintaining the constitutional limits on the powers of a province’s
legislature and courts does not mean that the rules of private international
law must be uniform across Canada. Legislatures and courts may adopt various
solutions to meet the constitutional requirements and the objectives of
efficiency and fairness that underlie our private international law system. Nor
does this test’s existence mean that the connections with the province must be
the strongest ones possible or that they must all point in the same direction.
[35]
Turning to the search for appropriate conflicts
rules, the trend is towards retaining or establishing a system of connecting
factors informed by principles for applying them, as opposed to relying on
almost pure judicial discretion to achieve order and fairness. This trend is
apparent in the laws passed by certain provincial legislatures and is reflected
in a number of judicial decisions. These decisions include the important
jurisprudential current that the Ontario Court of Appeal has been developing
since Muscutt, which is in issue in the cases at bar. The real and
substantial connection test should be viewed not in isolation, but rather in
the context of its historical roots, contemporary legislative developments, the
academic literature and initiatives aimed at developing and modernizing
Canada’s conflicts rules. The test was not born ex nihilo, without any
awareness of the methods and techniques that evolved in the field of private
international law. In this respect, both the common law and the civil law have
relied largely on the selection and use of a number of specific objective
factual connections.
[36]
In Hunt, La Forest J. cautioned against
casting aside all the traditional connections. In commenting on the
difficulties of framing an appropriate test for a reasonable assumption of
jurisdiction and on the development of the real and substantial connection
test, he wrote:
The exact limits of what constitutes a reasonable
assumption of jurisdiction were not defined, and I add that no test can perhaps
ever be rigidly applied; no court has ever been able to anticipate all of
these. However, though some of these may well require reconsideration in light
of Morguard, the connections relied on under the traditional rules are a
good place to start. [p. 325]
[37]
Not long after Hunt, the Court rendered
its judgment in Tolofson v. Jensen, [1994] 3 S.C.R. 1022, a case
concerned mainly with determining what law should apply to a tort. In it, too,
the Court’s concern was to assure predictability in the application of the law
of conflicts to tort claims. The Court established a new conflicts rule in
respect of torts, abandoning the rule it had adopted in McLean v. Pettigrew,
[1945] S.C.R. 62, that favoured the law of the forum (lex fori) and
holding that, in principle, the law governing the tort should be that of the
place where the tort occurred (lex loci delicti). The situs of
the tort would also justify the assumption of jurisdiction by the courts of a
province. The Court did not at that time rely solely on the real and
substantial connection test as a conflicts rule. In a sense, it held that in
this context, the objectives of fairness and efficiency in the conflicts system
would be better served by relying on factual connections with the place where
the tort occurred.
[38]
In La Forest J.’s opinion, Morguard
prevented courts from overreaching by entering into matters in which they had
little or no interest (Tolofson, at p. 1049). But he also cautioned
against building a system of private international law based solely on the
expectations of the parties and concerns of fairness in a specific case, as
such a system could hardly be considered rational. A degree of predictability
or reliability must be assured:
The truth is that a system of law built on what a
particular court considers to be the expectations of the parties or what it
thinks is fair, without engaging in further probing about what it means by
this, does not bear the hallmarks of a rational system of law. Indeed in the
present context it wholly obscures the nature of the problem. In dealing with
legal issues having an impact in more than one legal jurisdiction, we are not
really engaged in that kind of interest balancing. We are engaged in a
structural problem. [pp. 1046-47]
To La Forest J. in Tolofson,
order was needed in the conflicts system, and was even a precondition to
justice (p. 1058). Certainty was one of the key purposes being pursued in
framing a conflicts rule (p. 1061). With this in mind, the Court crafted what
it hoped would be a clear conflicts rule for torts that would bring a degree of
certainty to this part of tort law and private international law (pp. 1062-64).
Subject to the constitutional requirement established in Morguard, this
rule would make it possible to identify some connecting factors linking the
court or the law to the matter and to the parties. The presence of such factors
would not necessarily resolve everything. Specific torts might raise particular
difficulties that could require crafting carefully defined exceptions (p.
1050). Such difficulties indeed arise in the companion cases of Breeden
and Éditions Écosociété Inc. Nevertheless, a conflicts rule based on
specific connections seemed likely to introduce greater certainty into the
interpretation and application of private international law principles in
Canada.
[39]
Legislative action since Morguard and Hunt
points in the same direction. Without entering into the details of the complex,
often flexible and nuanced, system of conflicts rules that became part of the Civil
Code of Québec in 1994, it is worth mentioning that the Civil Code
sets out a number of specific conflicts rules that identify connecting factors
to be applied in various international or interprovincial situations. This
Court has discussed the Civil Code’s scheme on a number of occasions. In
particular, in Spar Aerospace Ltd. v. American Mobile Satellite Corp.,
2002 SCC 78, [2002] 4 S.C.R. 205, it reviewed the scheme applicable to the
assumption by Quebec courts of jurisdiction over situations involving delictual
or quasi-delictual liability in an international or interprovincial context.
[40]
Across Canada, various initiatives have been
undertaken to flesh out the real and substantial connection test. For example,
the Uniform Law Conference of Canada proposed a uniform Act to govern issues
related to jurisdiction and to the doctrine of forum non conveniens (see
Uniform Court Jurisdiction and Proceedings Transfer Act (“CJPTA”)
(online)).
[41]
The CJPTA focusses mainly on issues
related to the assumption of jurisdiction. Section 3(e) provides that a court
may assume jurisdiction if “there is a real and substantial connection between [enacting province or territory] and the facts on which the proceeding
against that person is based” (text in brackets in original). Section 10
enumerates a variety of circumstances in which such a connection would be
presumed to exist. For example, it lists a number of factors that might apply
where the purpose of the proceeding is the determination of property rights or
rights related to a contract. In the case of tort claims, s. 10(g)
provides that the commission of a tort in a province would be a proper basis
for the assumption of jurisdiction by that province’s courts. Section 10 states
that the list of connecting factors would not be closed and that other
circumstances might be proven in order to establish a real and substantial
connection. The CJPTA also includes specific provisions regarding forum
of necessity (s. 6) and forum non conveniens (s. 11). A number of
subsequent provincial statutes are clearly based on the CJPTA (see,
e.g., Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28;
Court Jurisdiction and Proceedings Transfer Act, S.S. 1997, c. C‑41.1;
Court Jurisdiction and Proceedings Transfer Act, S.N.S. 2003 (2nd Sess.),
c. 2; Court Jurisdiction and Proceedings Transfer Act, S.Y. 2000,
c. 7 (not yet in force)).
[42]
In these statutes, the legislative scheme
proposed in the CJPTA has been adopted, with some differences in
wording, as they include non-exhaustive lists of prescriptive connecting
factors which are presumed to establish a real and substantial connection.
Unlike with Book Ten of the Civil Code of Québec, the legislatures that
enacted them did not attempt to codify the entire field of private
international law, but attached particular importance to issues related to the
assumption and exercise of jurisdiction.
[43]
Unlike in these other provinces, the Ontario
legislature has not enacted a statute based on the CJPTA. However, the
province has established its own set of connecting factors for the purposes of
service outside Ontario, which are set out in the Ontario Rules of Civil
Procedure. These factors, which are found in rule 17.02, are similar, in
part, to those of the CJPTA and of the statutes based on the CJPTA.
It has been observed, though, that rule 17.02 is purely procedural in nature and
does not by itself establish jurisdiction in a case (P. M. Perell and J.
W. Morden, The Law of Civil Procedure in Ontario (2010), at p. 121).
(5) Understanding
the Real and Substantial Connection Test — The Ontario Court of Appeal in Muscutt
[44]
Given the absence of statutory rules, the
Ontario Court of Appeal endeavoured to establish a common law framework for the
application of the real and substantial connection test in its important
judgment in Muscutt. At issue in that case was a claim in tort. An Ontario
resident had been injured in a car crash in Alberta. The four defendants lived
in Alberta at the time. One of them moved to Ontario after the accident. The
plaintiff returned to Ontario and sued all the defendants in Ontario. Two of
the Alberta defendants moved to stay the action for want of jurisdiction and,
in the alternative, on the basis of forum non conveniens. They argued
that the action should be stayed for want of jurisdiction. They also challenged
the constitutional validity of the provisions of the Ontario rules on service
outside the province. In their opinion, those provisions were ultra vires
the province of Ontario because they had an extraterritorial effect. The
Ontario Superior Court of Justice dismissed the constitutional challenge and assumed
jurisdiction. The matter was then appealed to the Court of Appeal, which took
the opportunity to consider the constitutional issues, although the main focus
of its decision was on the content and the application of the real and
substantial connection test.
[45]
The Court of Appeal quickly disposed of the argument
that rule 17.02(h) was unconstitutional. It acknowledged that the real and
substantial connection test imposed constitutional limits on the assumption of
jurisdiction by a province’s courts. But in its opinion, rule 17.02(h) was
purely procedural and did not by itself determine the issue of the jurisdiction
of the Ontario courts. The rule applied within the limits of the real and
substantial connection test and did not resolve the issue of the assumption of
jurisdiction (Muscutt, at paras. 50-52).
[46]
The Court of Appeal then turned to the central issue in
the case: whether it was open to the Superior Court of Justice to assume
jurisdiction. Sharpe J.A. first sought to draw a clear distinction between the
assumption of jurisdiction itself and forum non conveniens, which
concerns the court’s discretion to decline to exercise its jurisdiction. He
cautioned against conflating what he viewed as different analytical stages in a
situation in which the assumption of jurisdiction is in issue. A court must
determine whether it has jurisdiction by applying the appropriate principles
governing the assumption of jurisdiction. If it does have jurisdiction, it
might then have to consider whether it should decline to exercise that
jurisdiction in favour of a more appropriate forum (Muscutt, at paras.
40-42). The critical step in this process consists in determining when a court
can properly assume jurisdiction in light of the constitutional limits imposed
by the real and substantial connection test.
[47]
Sharpe J.A. emphasized the importance of this Court’s
decisions — from Morguard to Amchem Products Inc. v. British Columbia
(Workers’ Compensation Board), [1993] 1 S.C.R. 897 — in the re-crafting of
the traditional approaches to the resolution of conflicts in private
international law. The adoption of the real and substantial connection test
mandated a flexible approach to the assumption of jurisdiction informed by the
underlying requirements of order and fairness. This approach required a
concrete analysis of a number of factors that would allow a court to decide
whether a sufficient connection existed between the forum and the subject
matter of the litigation rather than with the parties. The court was to look
not for the strongest possible connection with the forum, but for a minimum
connection sufficient to meet the constitutional requirement that the matter be
linked to the forum (para. 44). The Court of Appeal held that a court should
consider a variety of factors to determine whether it has jurisdiction. Sharpe
J.A. recommended taking a broad approach to jurisdiction. The defendant’s
relationship with the forum might be an “important” connecting factor, but not
a “necessary” one (para. 74 (emphasis deleted)).
[48]
Although the Court of Appeal acknowledged the
importance of flexibility, it stressed that clarity and certainty are also
necessary characteristics of the conflicts system. It accordingly developed a
list of eight factors to be considered when deciding whether an assumption of
jurisdiction is justified:
(1) the connection between the forum and the plaintiff’s claim;
(2) the connection between the forum and the defendant;
(3) unfairness to the defendant in assuming jurisdiction;
(4) unfairness to the plaintiff in not assuming
jurisdiction;
(5) the involvement of other parties to the suit;
(6) the court’s willingness to recognize and enforce an
extraprovincial judgment rendered on the same jurisdictional basis;
(7) whether the case is interprovincial or international in
nature; and
(8) comity and the standards of
jurisdiction, recognition and enforcement prevailing elsewhere.
[49]
In the Court of Appeal’s opinion, no single factor
should be determinative. In Sharpe J.A.’s words, “all relevant factors should
be considered and weighed together” (Muscutt, at para. 76). The Court
of Appeal held that the Superior Court of Justice could assume jurisdiction in
the case before it. It turned briefly to the issue of forum non conveniens,
but found that an Alberta court would not be a more appropriate forum (para.
115).
[50]
At the same time as its decision in Muscutt, the
Court of Appeal applied this new template to four other cases in which the
assumption of jurisdiction and forum non conveniens were in issue. In
those appeals, it held that the Ontario courts should not assume jurisdiction,
because the connections with Ontario were too insignificant to satisfy the real
and substantial connection test. All four cases involved Ontario residents who
had suffered injuries in accidents outside Canada and filed suits in Ontario
courts (Lemmex v. Bernard (2002), 60 O.R. (3d) 54; Gajraj v. DeBernardo
(2002), 60 O.R. (3d) 68; Sinclair v. Cracker Barrel Old Country Store, Inc.
(2002), 60 O.R. (3d) 76; Leufkens v. Alba Tours
International Inc. (2002), 60 O.R. (3d) 84). All the actions were
dismissed in respect of the foreign defendants. The Court of Appeal found that
the facts that the plaintiffs resided in Ontario and had sustained damage in
the province did not create a real and substantial connection between the
litigation and the Ontario courts. Since the courts lacked jurisdiction, there
was no need for the Court of Appeal to consider the forum non conveniens
arguments.
(6) Reconsideration
of Muscutt by the Ontario Court of Appeal
[51]
A few years after Muscutt, the Court of
Appeal decided that, in the cases now before this Court, a review of the
existing framework for the assumption of jurisdiction by Ontario courts and of
issues related to forum non conveniens had become necessary. Since Muscutt,
Ontario courts had consistently been applying the framework adopted in that
case. Outside Ontario, Muscutt was considered an influential authority,
and its framework was often accepted as an appropriate one for resolving issues
related to the assumption of jurisdiction. But as I mentioned above, a number
of common law provinces preferred to adopt the framework proposed in the CJPTA.
On occasion, courts outside Ontario expressed reservations about certain
aspects of the Muscutt framework (Coutu v. Gauthier Estate, 2006
NBCA 16, 296 N.B.R. (2d) 34, at paras. 67-68; Fewer v. Ellis, 2011 NLCA
17, 305 Nfld. & P.E.I.R. 39). It was suggested that the Muscutt test
gave judges too much latitude in exercising their discretion on a case-by-case
basis and was thus incompatible with the objectives of order and predictability
in the assumption of jurisdiction. The wide parameters of this broad
jurisdiction might also lead a court to conflate the jurisdictional analysis
and the application of the doctrine of forum non conveniens in a search
for the better or more appropriate forum in any given case. The analysis under
the Muscutt test could also generate an instinctive bias in favour of
the forum chosen by the plaintiff.
(7) The
New Van Breda-Charron Approach of the Ontario Court of Appeal
[52]
As the Court of Appeal noted, it had heard a variety of opinions and
conflicting suggestions regarding the need to reframe the Muscutt test
and how this should be done. Some of the litigants wanted to retain Muscutt
as it was; others proposed the adoption of a test based on a list of
presumptive connecting factors similar to that of the CJPTA (Van
Breda-Charron, paras. 56-57). The Court of Appeal declined to craft a
common law rule that would in substance reproduce the content of the CJPTA.
Sharpe J.A. expressed the view that the unpredictability of the Muscutt
test had been exaggerated, as had the degree of certainty and predictability
that would result if the CJPTA scheme were adopted (para. 68). He
proposed what he saw as a middle way. The Court of Appeal would retain the Muscutt
test, but would modify it by simplifying it and bringing it closer to the CJPTA
model. Sharpe J.A. stated: “In refining the Muscutt test, we can look
to CJPTA as a worthy attempt to restate and update the Canadian law of
jurisdiction . . . and, in so doing, bring Ontario law into line with the
emerging national consensus on appropriate jurisdictional standards” (para.
69).
[53]
On that basis, the Court of Appeal reframed the Muscutt test in
part. The first change, as Sharpe J.A. stated, moved the existing framework
closer to that of the CJPTA. It was the creation of a category-based
presumption of jurisdiction modelled on s. 10 of the CJPTA. In the
absence of statutory connecting factors, the court decided to rely for this
purpose on the factors governing service outside Ontario set out in rule 17.02
of the Ontario Rules of Civil Procedure (para. 71). Sharpe J.A.
asserted that most of the connecting factors enumerated in rule 17.02, such as
the fact that a contract was made in Ontario (rule 17.02(f)) or a tort was
committed in the province (rule 17.02(g)), would presumptively confirm the
jurisdiction of the Ontario court (para. 72). In other words, whenever one of
these factors was established, a real and substantial connection justifying the
assumption of jurisdiction by an Ontario court would be presumed to exist.
[54]
Sharpe J.A. added that where the presumption applied, it would be
rebuttable. It would be open to a party to argue that, even though a
presumptive connection existed, the real and substantial connection test had
not been met (para. 72). Sharpe J.A. stated that these
changes would be consistent with the incremental approach to the development of
common law rules. In addition, almost all the post-Muscutt cases that
he had reviewed seemed to have been resolved by one or another of the factors
listed in rule 17.02 (paras. 74-75).
[55]
According to this view, the appropriate factors
generally operate as reliable markers of jurisdiction at common law. The
adoption of these markers would mitigate the complexity and unpredictability of
the Muscutt test. Sharpe J.A. noted that the jurisprudence on service ex
juris provides support for the use of these factors as indicators of a real
and substantial connection. For example, in Hunt, La Forest J. had
observed that, even if some of the traditional rules of jurisdiction might have
to be recast in light of Morguard, the established factors could
nevertheless be viewed as “a good place to start” (p. 325; see also Spar
Aerospace, at paras. 55-56, on the provisions of the Civil Code of
Québec applicable to the assumption by Quebec courts of jurisdiction over
situations involving delictual and quasi-delictual liability). But
Sharpe J.A. declined to give presumptive effect to the factors set out in
rules 17.02(h) (damage sustained in Ontario) and 17.02(o) (necessary or proper
party). Neither of these factors is included in the CJPTA. Nor have
they gained broad acceptance as reliable indicators of jurisdiction. Indeed,
the Court of Appeal found in Muscutt and its companion cases that the
factor of “damage sustained in Ontario” was often not reliable and significant
enough to justify an assumption of jurisdiction by an Ontario court.
[56]
Sharpe J.A. reaffirmed the need to draw a clear
distinction between assuming jurisdiction and deciding whether to decline to
exercise it on the basis of the forum non conveniens doctrine. He
cautioned against confusing these two different steps in the resolution of a
conflicts issue and emphasized that the factors that would justify a stay in
the forum non conveniens analysis should not be worked into the
jurisdiction simpliciter analysis (paras. 81-82 and 101). The conflation
of the two analyses may have been the result of an unduly broad interpretation
of the fairness factors of the Muscutt analysis (para. 81).
[57]
Building on this first principle that recognized
the list of presumptive connecting factors, Sharpe J.A. re-crafted the Muscutt
test. He retained part of the Muscutt analysis, merged some of its
factors and reviewed the roles of other principles governing the assumption of
jurisdiction. The defendants’ connection with the court seized of the action
continued to be a valid and important consideration. However, the connection
between the plaintiffs’ claim and the forum was maintained as a core element of
the real and substantial connection test (paras. 87-88). A test based solely on
the defendant’s contacts with the jurisdiction would be “unduly restrictive”
(para. 86).
[58]
The Court of Appeal merged the two factors
related to fairness to the parties of assuming or declining jurisdiction into a
single one. At the same time, it recommended that judges avoid treating the
consideration of fairness as a separate inquiry distinct from the core of the
test, since fairness cannot compensate for weak connections. Sharpe J.A.
understood, however, the need to retain fairness to the plaintiff and to the
defendant as an analytical tool in assessing the relevance, quality and strength
of the connections with the forum in order to determine whether assuming
jurisdiction would accord with the principles of order and fairness
(paras. 93, 95-96 and 98).
[59]
Sharpe J.A. went on to observe that
considerations of fairness would support the view that the forum of necessity
doctrine is an exceptional basis for assuming jurisdiction (para. 100). I add
that the forum of necessity issue is not before this Court in these appeals,
and I will not need to address it here.
[60]
According to Sharpe J.A., the involvement of
other parties would remain a relevant factor, but its importance would be
downgraded. It should not be routinely considered but would become relevant
only if a party raised it as a connecting factor (para. 102).
[61]
He accepted that acts or conduct short of
residence that take place in the jurisdiction will often support a finding that
a real and substantial connection has been established (para. 92).
[62]
In the future, Sharpe J.A. stated, whether the
courts would be willing to recognize and enforce a foreign judgment should not
be treated as a separate factor to be weighed against the other connecting
factors in determining jurisdiction. Rather, it is a general and overarching
principle that constrains, or “disciplines”, as he wrote, the assumption of jurisdiction
against extraprovincial defendants. A court should not assume jurisdiction if
it would not be prepared to recognize and enforce a foreign judgment rendered
on the same jurisdictional basis (para. 103). Whether the case is international
or interprovincial was also removed from the list of factors. This would be
treated as a question of law liable to be considered in the real and
substantial connection analysis (para. 106). The court adopted the same
approach in respect of comity and the standards of jurisdiction and of
recognition and enforcement of judgments prevailing elsewhere. These
considerations, while remaining relevant to the real and substantial connection
analysis, would no longer serve as specific factors (paras. 107-8).
[63]
Finally, the Court of Appeal held that
considerations related to foreign law remain relevant to the issue of the
assumption of jurisdiction. In Sharpe J.A.’s view, evidence on how foreign
courts would treat such cases might be helpful (para. 107). I note in
passing, however, that undue emphasis on juridical disadvantage as a factor in
the jurisdictional analysis appears to be hardly consonant with the principle
of comity that should govern legal relationships between modern democratic
states, as this Court held in Beals. In particular, such an emphasis would seem hard to reconcile with
the principle of comity that should govern relationships between the courts of
different provinces within the same federal state, as this Court held in Morguard
and Hunt.
[64]
In summary, the Van Breda-Charron
approach offers a simplified test in which the roles of a number of the factors
of the Muscutt test have been modified. In short, when one of the
presumptive connecting factors applies, the court will assume jurisdiction
unless the defendant can demonstrate the absence of a real and substantial
connection. If, on the other hand, none of the presumptive connecting factors
are found to apply to the claim, the onus rests on the plaintiff to prove that
a sufficient relationship exists between the litigation and the forum. In
addition to the list of presumptive and non-presumptive factors, parties can
rely on other connecting factors informed by the principles that govern the
analysis.
[65]
I will now turn to the issue of whether the
Court of Appeal was right to hold that it was open to the Ontario courts to
assume jurisdiction in the two cases now before us. If I conclude that it was
open to them to do so, I will then discuss whether they should have declined to
exercise their jurisdiction under the principles of forum non conveniens.
(8) Framework
for the Assumption of Jurisdiction
[66]
In this Court, as in the Court of Appeal, the
parties and the interveners have expressed sharply different views about
whether and how the law of conflicts should be changed in respect of the
assumption of jurisdiction. As might be expected, the disagreements extend to
the impact of possible changes on the outcome of these appeals. The conflicting
approaches articulated in this Court reflect the tension between a search for
flexibility, which is closely connected with concerns about fairness to
individuals engaged in litigation, and a desire to ensure greater
predictability and consistency in the institutional process for the resolution
of conflict of laws issues related to the assumption and exercise of
jurisdiction. Indeed, striking a proper balance between flexibility and
predictability, or between fairness and order, has been a constant theme in the
Canadian jurisprudence and academic literature since this Court’s judgments in Morguard,
Hunt, Amchem and Tolofson.
[67]
The real and substantial connection test is now
well established. However, it is clear that dissatisfaction with it and
uncertainty about its meaning and conditions of application have been growing,
and that there is now a perceived need for greater direction on how it applies.
I adverted above to the need to draw a distinction between the constitutional
test and the rules of private international law — two aspects of the law of
conflicts that have sometimes been conflated in previous cases. At this point,
it is necessary to clarify the rules of the conflict of laws in a way that is
consistent with the constitutional constraints on the provinces’ courts but
does not turn every private international law issue into a constitutional one.
[68]
The legislatures of several provinces, as well
as the Ontario Court of Appeal in Muscutt and Van Breda-Charron,
have responded to these concerns and attempted to provide guidance for the
application of the real and substantial connection test. We can build upon
these legislative developments and judgments. Indeed, Sharpe J.A. referred in Van
Breda-Charron to what he described, perhaps with some optimism, as an
emerging consensus in Canadian law on how to resolve these issues. On the basis
of this perhaps fragile consensus and these developments and judgments, this
Court must craft more precisely the rules and principles governing the
assumption of jurisdiction by the courts of a province over tort cases in which
claimants sue in Ontario, but at least some of the events that gave rise to the
claims occurred outside Canada or outside the province. I will also consider
how jurisdiction should be exercised or declined under the doctrine of forum
non conveniens. This said, I remain mindful that the Court is not of course
tasked with drafting a complete code of private international law. Principles
will be developed as problems arise before the courts. Moreover, all my
comments about the development of the common law principles of the law of
conflicts are subject to provisions of specific statutes and rules of
procedure.
[69]
When a court considers issues related to
jurisdiction, its analysis must deal first with those concerning the assumption
of jurisdiction itself. That analysis must be grounded in a proper
understanding of the real and substantial connection test, which has evolved
into an important constitutional test or principle that imposes limits on the
reach of a province’s laws and courts. As I mentioned above, this
constitutional test reflects the limited territorial scope of provincial
authority under the Constitution Act, 1867 . At the same time, the
Constitution acknowledges that international or interprovincial situations may
have effects within a province. Provinces may address such effects in order to
resolve issues related to conflicts with their own internal legal systems
without overstepping the limits of their constitutional authority (see Castillo).
[70]
The real and substantial connection test does
not mean that problems of assumption of jurisdiction or other matters, such as
the choice of the proper law applicable to a situation or the recognition of
extraprovincial judgments, must be dealt with on a case-by-case basis by
discretionary decisions of courts, which would determine, on the facts of each
case, whether a sufficient connection with the forum has been established.
Judicial discretion has an honourable history, and the proper operation of our
legal system often depends on its being exercised wisely. Nevertheless, to rely
completely on it to flesh out the real and substantial connection test in such
a way that the test itself becomes a conflicts rule would be incompatible with
certain key objectives of a private international law system.
[71]
The development of an appropriate framework for
the assumption of jurisdiction requires a clear understanding of the general objectives
of private international law. But the existence of these objectives does not
mean that the framework for achieving them must be uniform across Canada.
Because the provinces have been assigned constitutional jurisdiction over such
matters, they are free to develop different solutions and approaches, provided
that they abide by the territorial limits of the authority of their
legislatures and their courts.
[72]
What would be an appropriate framework? How
should it be developed in the case of the assumption and exercise of
jurisdiction by a court? A particular challenge in this respect lies in the
fact that court decisions dealing with the assumption and the exercise of
jurisdiction are usually interlocutory decisions made at the preliminary stages
of litigation. These issues are typically raised before the trial begins. As a
result, even though such decisions can often be of critical importance to the
parties and to the further conduct of the litigation, they must be made on the
basis of the pleadings, the affidavits of the parties and the documents in the
record before the judge, which might include expert reports or opinions about
the state of foreign law and the organization of and procedure in foreign
courts. Issues of fact relevant to jurisdiction must be settled in this
context, often on a prima facie basis. These constraints underline the
delicate role of the motion judges who must consider these issues.
[73]
Given the nature of the relationships governed
by private international law, the framework for the assumption of jurisdiction
cannot be an unstable, ad hoc system made up “on the fly” on a
case-by-case basis — however laudable the objective of individual fairness may
be. As La Forest J. wrote in Morguard, there must be order
in the system, and it must permit the development of a just and fair approach
to resolving conflicts. Justice and fairness are undoubtedly essential purposes
of a sound system of private international law. But they cannot be attained
without a system of principles and rules that ensures security and
predictability in the law governing the assumption of jurisdiction by a court.
Parties must be able to predict with reasonable confidence whether a court will
assume jurisdiction in a case with an international or interprovincial aspect.
The need for certainty and predictability may conflict with the objective of
fairness. An unfair set of rules could hardly be considered an efficient and just
legal regime. The challenge is to reconcile fairness with the need for
security, stability and efficiency in the design and implementation of a
conflict of laws system.
[74]
The goal of the modern conflicts system is to
facilitate exchanges and communications between people in different
jurisdictions that have different legal systems. In this sense, it rests on the
principle of comity. But comity itself is a very flexible concept. It cannot be
understood as a set of well-defined rules, but rather as an attitude of respect
for and deference to other states and, in the Canadian context, respect for and
deference to other provinces and their courts (Morguard, at p.
1095; R. v. Hape, 2007 SCC 26, [2007] 2 S.C.R. 292, at para. 47).
Comity cannot subsist in private international law without order, which
requires a degree of stability and predictability in the development and
application of the rules governing international or interprovincial
relationships. Fairness and justice are necessary characteristics of a legal system,
but they cannot be divorced from the requirements of predictability and
stability which assure order in the conflicts system. In the words of
La Forest J. in Morguard, “what must underlie a modern system
of private international law are principles of order and fairness, principles
that ensure security of transactions with justice” (p. 1097; see also H. E.
Yntema, “The Objectives of Private International Law”
(1957), 35 Can. Bar Rev. 721, at p. 741).
[75]
The development and evolution of the approaches
to the assumption of jurisdiction reviewed above suggest that stability and
predictability in this branch of the law of conflicts should turn primarily on
the identification of objective factors that might link a legal situation or
the subject matter of litigation to the court that is seized of it. At the same
time, the need for fairness and justice to all parties engaged in litigation
must be borne in mind in selecting these presumptive connecting factors. But in
recent years, the preferred approach in Canada has been to rely on a set of
specific factors, which are given presumptive effect, as opposed to a regime
based on an exercise of almost pure and individualized judicial discretion.
[76]
For example, the statutes based on the CJPTA
and Book Ten of the Civil Code of Québec rely on specific facts linking
the subject matter of the litigation to the jurisdiction. These factors are
considered in order to determine whether a real and substantial connection
exists for the purposes of the conflicts rules.
[77]
In the CJPTA, in the case of tort claims,
s. 10(g) refers to the situs of a tort as a specific factor connecting
the act with the jurisdiction. The identification of the situs of a tort
may well lead to further questions, to which the CJPTA does not offer
immediate answers, such as: Where did the acts that gave rise to the injury
occur? Did they happen in more than one place? Where was the damage suffered
or where did it become apparent? Other connecting factors might also become
relevant, such as the existence of a contractual relationship (s. 10(e)) or a
business carried on in the province (s. 10(h)). Jurisdiction can also be
presence-based, when the defendant resides in the province (s. 3(d)). Likewise,
the Civil Code of Québec contains a list of factors that must be
considered in order to determine whether a Quebec authority has jurisdiction
over a delictual or quasi-delictual action (art. 3148).
[78]
Some authors take the view that the true core of
the revised Van Breda-Charron test consists of a set of objective factual
connections. Likewise, the Court of Appeal stated in Van Breda-Charron
that the issue was essentially about connections: “The core of the real and
substantial connection test is the connection that the plaintiff’s claim has to
the forum and the connection of the defendant to the forum respectively”
(para. 84; T. Monestier, “A ‘Real and Substantial’ Improvement? Van
Breda Reformulates the Law of Jurisdiction in Ontario”, in T. L.
Archibald and R. S. Echlin, eds., Annual Review of Civil
Litigation, 2010 (2010) 185, at pp. 204-7). In my view, identifying a set
of relevant presumptive connecting factors and determining their legal nature
and effect will bring greater clarity and predictability to the analysis of the
problems of assumption of jurisdiction, while at the same time ensuring
consistency with the objectives of fairness and efficiency that underlie this
branch of the law.
[79]
From this perspective, a clear distinction must
be maintained between, on the one hand, the factors or factual situations that
link the subject matter of the litigation and the defendant to the forum and,
on the other hand, the principles and analytical tools, such as the values of
fairness and efficiency or the principle of comity. These principles and
analytical tools will inform their assessment in order to determine whether the
real and substantial connection test is met. However, jurisdiction may also be
based on traditional grounds, like the defendant’s presence in the jurisdiction
or consent to submit to the court’s jurisdiction, if they are established. The
real and substantial connection test does not oust the traditional private
international law bases for court jurisdiction.
[80]
Before I go on to consider a list of presumptive
connecting factors for tort cases, I must define the legal nature of the list.
It will not be exhaustive. Rather, it will, first of all, be illustrative of
the factual situations in which it will typically be open to a court to assume
jurisdiction over a matter. These factors therefore warrant presumptive effect,
as the Court of Appeal held in Van Breda-Charron (para. 109). The
plaintiff must establish that one or more of the listed factors exists. If the
plaintiff succeeds in establishing this, the court might presume, absent
indications to the contrary, that the claim is properly before it under the
conflicts rules and that it is acting within the limits of its constitutional
jurisdiction (J. Walker, “Reforming the Law of Crossborder Litigation: Judicial
Jurisdiction”, consultation paper for the Law Commission of Ontario (March
2009), at pp. 19-20 (online)). Although the factors set out in the list are
considered presumptive, this does not mean that the list of recognized factors
is complete, as it may be reviewed over time and updated by adding new
presumptive connecting factors.
[81]
The presumption with respect to a factor will
not be irrebuttable, however. The defendant might argue that a given connection
is inappropriate in the circumstances of the case. In such a case, the
defendant will bear the burden of negating the presumptive effect of the listed
or new factor and convincing the court that the proposed assumption of
jurisdiction would be inappropriate. If no presumptive connecting factor,
either listed or new, applies in the circumstances of a case or if the
presumption of jurisdiction resulting from such a factor is properly rebutted,
the court will lack jurisdiction on the basis of the common law real and
substantial connection test. I will elaborate on each of these points below.
(a) List
of Presumptive Connecting Factors
[82]
Jurisdiction must — irrespective of the question
of forum of necessity, which I will not discuss here — be established primarily
on the basis of objective factors that connect the legal situation or the
subject matter of the litigation with the forum. The Court of Appeal was moving
in this direction in the cases at bar. This means that the courts must rely on
a basic list of factors that is drawn at first from past experience in the
conflict of laws system and is then updated as the needs of the system evolve.
Abstract concerns for order, efficiency or fairness in the system are no
substitute for connecting factors that give rise to a “real and substantial”
connection for the purposes of the law of conflicts.
[83]
At this stage, I will briefly discuss certain
connections that the courts could use as presumptive connecting factors. Like
the Court of Appeal, I will begin with a number of factors drawn from rule
17.02 of the Ontario Rules of Civil Procedure. These factors relate to
situations in which service ex juris is allowed, and they were not
adopted as conflicts rules. Nevertheless, they represent an expression of
wisdom and experience drawn from the life of the law. Several of them are based
on objective facts that may also indicate when courts can properly assume
jurisdiction. They are generally consistent with the approach taken in the CJPTA
and with the recommendations of the Law Commission of Ontario, although
some of them are more detailed. They thus offer guidance for the development of
this area of private international law.
[84]
I would not include general principles or
objectives of the conflicts system, such as fairness, efficiency or comity, in
this list of presumptive connecting factors. These systemic values may
influence the selection of factors or the application of the method of
resolution of conflicts. Concerns for the objectives of the conflicts system
might rule out reliance on some particular facts as connecting factors. But
they should not themselves be confused with the factual connections that will
govern the assumption of jurisdiction.
[85]
The list of presumptive connecting factors
proposed here relates to claims in tort and issues associated with such claims.
It does not purport to be an inventory of connecting factors covering the
conditions for the assumption of jurisdiction over all claims known to the law.
[86]
The presence of the plaintiff in the
jurisdiction is not, on its own, a sufficient connecting factor. (I will not
discuss its relevance or importance in the context of the forum of necessity
doctrine, which is not at issue in these appeals.) Absent other considerations,
the presence of the plaintiff in the jurisdiction will not create a presumptive
relationship between the forum and either the subject matter of the litigation
or the defendant. On the other hand, a defendant may always be sued in a court
of the jurisdiction in which he or she is domiciled or resident (in the case of
a legal person, the location of its head office).
[87]
Carrying on business in the jurisdiction may
also be considered an appropriate connecting factor. But considering it to be
one may raise more difficult issues. Resolving those issues may require some
caution in order to avoid creating what would amount to forms of universal
jurisdiction in respect of tort claims arising out of certain categories of
business or commercial activity. Active advertising in the jurisdiction or, for
example, the fact that a Web site can be accessed from the jurisdiction would
not suffice to establish that the defendant is carrying on business there. The
notion of carrying on business requires some form of actual, not only virtual,
presence in the jurisdiction, such as maintaining an office there or regularly
visiting the territory of the particular jurisdiction. But the Court has not
been asked in this appeal to decide whether and, if so, when e-trade in the
jurisdiction would amount to a presence in the jurisdiction. With these
reservations, “carrying on business” within the meaning of rule 17.02(p) may be
an appropriate connecting factor.
[88]
The situs of the tort is clearly an
appropriate connecting factor, as can be seen from rule 17.02(g), and from the
CJPTA, the Civil Code of Québec and the jurisprudence of this
Court since Tolofson. The difficulty lies in locating the situs,
not in acknowledging the validity of this factor once the situs has been
identified. Claims related to contracts made in Ontario would also be properly
brought in the Ontario courts (rule 17.02(f)(i)).
[89]
The use of damage sustained as a connecting
factor may raise difficult issues. For torts like defamation, sustaining damage
completes the commission of the tort and often tends to locate the tort in the
jurisdiction where the damage is sustained. In other cases, the situation is
less clear. The problem with accepting unreservedly that if damage is sustained
at a particular place, the claim presumptively falls within the jurisdiction of
the courts of the place, is that this risks sweeping into that jurisdiction
claims that have only a limited relationship with the forum. An injury may
happen in one place, but the pain and inconvenience resulting from it might be
felt in another country and later in a third one. As a result, presumptive
effect cannot be accorded to this connecting factor.
[90]
To recap, in a case
concerning a tort, the following factors are presumptive connecting factors
that, prima facie, entitle a court to assume jurisdiction over a
dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the
province.
(b) Identifying
New Presumptive Connecting Factors
[91]
As I mentioned above,
the list of presumptive connecting factors is not closed. Over time, courts
may identify new factors which also presumptively entitle a court to assume
jurisdiction. In identifying new presumptive factors, a court should look to
connections that give rise to a relationship with the forum that is similar in
nature to the ones which result from the listed factors. Relevant
considerations include:
(a) Similarity of the connecting factor with the recognized
presumptive connecting factors;
(b) Treatment of the connecting factor in the case law;
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor
in the private international law of other legal systems with a shared
commitment to order, fairness and comity.
[92]
When a court considers
whether a new connecting factor should be given presumptive effect, the values
of order, fairness and comity can serve as useful analytical tools for
assessing the strength of the relationship with a forum to which the factor in
question points. These values underlie all presumptive connecting factors,
whether listed or new. All presumptive connecting factors generally point to a
relationship between the subject matter of the litigation and the forum such
that it would be reasonable to expect that the defendant would be called to
answer legal proceedings in that forum. Where such a relationship exists, one
would generally expect Canadian courts to recognize and enforce a foreign
judgment on the basis of the presumptive connecting factor in question, and
foreign courts could be expected to do the same with respect to Canadian
judgments. The assumption of jurisdiction would thus appear to be consistent
with the principles of comity, order and fairness.
[93]
If, however, no recognized presumptive
connecting factor — whether listed or new — applies, the effect of the common
law real and substantial connection test is that the court should not assume
jurisdiction. In particular, a court should not assume jurisdiction on the
basis of the combined effect of a number of non-presumptive connecting
factors. That would open the door to assumptions of jurisdiction based largely
on the case-by-case exercise of discretion and would undermine the objectives
of order, certainty and predictability that lie at the heart of a fair and
principled private international law system.
[94]
Where, on the other
hand, a recognized presumptive connecting factor does apply, the court should assume that it is properly seized of the subject
matter of the litigation and that the defendant has been properly brought
before it. In such circumstances, the court need not exercise its discretion
in order to assume jurisdiction. It will have jurisdiction unless the party challenging the assumption
of jurisdiction rebuts the presumption resulting from the connecting factor. I
will now turn to this issue.
(c) Rebutting
the Presumption of Jurisdiction
[95]
The presumption of
jurisdiction that arises where a recognized connecting factor — whether listed
or new — applies is not irrebuttable. The burden of rebutting the presumption
of jurisdiction rests, of course, on the party challenging the assumption of
jurisdiction. That party must establish facts which demonstrate that the
presumptive connecting factor does not point to any real relationship between
the subject matter of the litigation and the forum or points only to a weak
relationship between them.
[96]
Some examples drawn
from the list of presumptive connecting factors applicable in tort matters can
assist in illustrating how the presumption of jurisdiction can be rebutted.
For instance, where the presumptive connecting factor is a contract made in the
province, the presumption can be rebutted by showing that the contract has
little or nothing to do with the subject matter of the litigation. And where
the presumptive connecting factor is the fact that the defendant is carrying on
business in the province, the presumption can be rebutted by showing that the
subject matter of the litigation is unrelated to the defendant’s business
activities in the province. On the other hand, where the presumptive
connecting factor is the commission of a tort in the province, rebutting the
presumption of jurisdiction would appear to be difficult, although it may be
possible to do so in a case involving a multi-jurisdictional tort where only a
relatively minor element of the tort has occurred in the province.
[97]
In each of the above
examples, it is arguable that the presumptive connecting factor points to a
weak relationship between the forum and the subject matter of the litigation
and that it would accordingly not be reasonable to expect that the defendant would
be called to answer proceedings in that jurisdiction. In such circumstances,
the real and substantial connection test would not be satisfied and the court
would lack jurisdiction to hear the dispute.
[98]
However, where the
party resisting jurisdiction has failed to rebut the presumption that results
from a presumptive connecting factor — listed or new — the
court must acknowledge that it has jurisdiction and hold that the action is
properly before it. At this point, it does not exercise its discretion to
determine whether it has jurisdiction, but only to decide whether to decline to
exercise its jurisdiction should forum non conveniens be raised by one
of the parties.
[99]
I should add that it is possible for a case to
sound both in contract and in tort or to invoke more than one tort. Would a
court be limited to hearing the specific part of the case that can be directly
connected with the jurisdiction? Such a rule would breach the principles of
fairness and efficiency on which the assumption of jurisdiction is based. The
purpose of the conflicts rules is to establish whether a real and substantial
connection exists between the forum, the subject matter of the litigation and
the defendant. If such a connection exists in respect of a factual and legal
situation, the court must assume jurisdiction over all aspects of the case. The
plaintiff should not be obliged to litigate a tort claim in Manitoba and a
related claim for restitution in Nova Scotia. That would be incompatible with
any notion of fairness and efficiency.
[100]
To recap, to meet the
common law real and substantial connection test, the party arguing that the
court should assume jurisdiction has the burden of identifying a presumptive
connecting factor that links the subject matter of the litigation to the forum.
In these reasons, I have listed some presumptive connecting factors for tort
claims. This list is not exhaustive, however, and courts may, over time,
identify additional presumptive factors. The presumption of jurisdiction that
arises where a recognized presumptive connecting factor — whether listed or new
— exists is not irrebuttable. The burden of rebutting it rests on the party
challenging the assumption of jurisdiction. If the court concludes that it
lacks jurisdiction because none of the presumptive connecting factors exist or
because the presumption of jurisdiction that flows from one of those factors
has been rebutted, it must dismiss or stay the action, subject to the possible
application of the forum of necessity doctrine, which I need not address in
these reasons. If jurisdiction is established, the claim may proceed, subject
to the court’s discretion to stay the proceedings on the basis of the doctrine
of forum non conveniens. I will now turn to that issue.
(9) Doctrine of Forum Non Conveniens and the Exercise
of Jurisdiction
[101]
As I mentioned above, a clear distinction must
be drawn between the existence and the exercise of jurisdiction. This
distinction is central both to the resolution of issues related to jurisdiction
over the claim and to the proper application of the doctrine of forum non
conveniens. Forum non conveniens comes into play when jurisdiction
is established. It has no relevance to the jurisdictional analysis itself.
[102]
Once jurisdiction is established, if the
defendant does not raise further objections, the litigation proceeds before the
court of the forum. The court cannot decline to exercise its jurisdiction
unless the defendant invokes forum non conveniens. The decision to raise
this doctrine rests with the parties, not with the court seized of the claim.
[103]
If a defendant raises an issue of forum non
conveniens, the burden is on him or her to show why the court should
decline to exercise its jurisdiction and displace the forum chosen by the
plaintiff. The defendant must identify another forum that has an appropriate
connection under the conflicts rules and that should be allowed to dispose of
the action. The defendant must show, using the same analytical approach the
court followed to establish the existence of a real and substantial connection
with the local forum, what connections this alternative forum has with the
subject matter of the litigation. Finally, the party asking for a stay on the
basis of forum non conveniens must demonstrate why the proposed
alternative forum should be preferred and considered to be more appropriate.
[104]
This Court reviewed and structured the method of
application of the doctrine of forum non conveniens in Amchem. It
built on the existing jurisprudence, and in particular on the judgment of the
House of Lords in Spiliada Maritime Corp. v. Cansulex Ltd., [1987] 1
A.C. 460. The doctrine tempers the consequences of a strict application of the
rules governing the assumption of jurisdiction. As those rules are, at their
core, based on establishing the existence of objective factual connections,
their use by the courts might give rise to concerns about their potential
rigidity and lack of consideration for the actual circumstances of the parties.
When it is invoked, the doctrine of forum non conveniens requires a
court to go beyond a strict application of the test governing the recognition
and assumption of jurisdiction. It is based on a recognition that a common law
court retains a residual power to decline to exercise its jurisdiction in
appropriate, but limited, circumstances in order to assure fairness to the
parties and the efficient resolution of the dispute. The court can stay
proceedings brought before it on the basis of the doctrine.
[105]
A party applying for a stay on the basis of forum
non conveniens may raise diverse facts, considerations and concerns. Despite
some legislative attempts to draw up exhaustive lists, I doubt that it will
ever be possible to do so. In essence, the doctrine focusses on the contexts of
individual cases, and its purpose is to ensure that both parties are treated
fairly and that the process for resolving their litigation is efficient. For
example, s. 11(1) of the CJPTA provides that a court may decline to
exercise its jurisdiction if, “[a]fter considering
the interests of the parties to a proceeding and the ends of justice”, it finds
that a court of another state is a more appropriate forum to hear the case.
Section 11(2) then provides that the court must consider the “circumstances
relevant to the proceeding”. To illustrate those circumstances, it
contains a non-exhaustive list of factors:
(a) the
comparative convenience and expense for the parties to the proceeding and for
their witnesses, in litigating in the court or in any alternative forum;
(b) the
law to be applied to issues in the proceeding;
(c) the
desirability of avoiding multiplicity of legal proceedings;
(d) the
desirability of avoiding conflicting decisions in different courts;
(e) the
enforcement of an eventual judgment; and
(f) the fair and efficient working of the
Canadian legal system as a whole. [s. 11(2)]
[106]
British Columbia’s Court Jurisdiction and
Proceedings Transfer Act, which is based on the CJPTA,
contains an identical provision — s. 11 — on forum non conveniens. In Teck
Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R.
321, at para. 22, this Court stated that s. 11 of the British Columbia statute
was intended to “codify” forum non conveniens. Article 3135 of the Civil
Code of Québec provides that forum non conveniens forms part
of the private international law of Quebec, but it does not contain a
description of the factors that are to govern the application of the doctrine
in Quebec law. The courts are left with the tasks of developing an approach to
applying it and of identifying the relevant considerations.
[107]
Quebec’s courts have adopted an approach that,
although basically identical to that of the common law courts, is subject to
the indication in art. 3135 that forum non conveniens is an
exceptional recourse. A good example of this can be found in the judgment of
the Quebec Court of Appeal in Oppenheim forfait GMBH v. Lexus maritime inc.,
1998 CanLII 13001, in which an action brought in Quebec was stayed in
favour of a German court on the basis of forum non conveniens. Pidgeon J.A.
emphasized the wide-ranging and contextual nature of a forum non conveniens
analysis. The judge might consider such factors as the domicile of the parties,
the locations of witnesses and of pieces of evidence, parallel proceedings,
juridical advantage, the interests of both parties and the interests of justice
(pp. 7-8; see also Spar Aerospace, at para. 71; J. A. Talpis with
the collaboration of S. L. Kath, “If I am from Grand-Mère, Why Am I Being
Sued in Texas?” Responding
to Inappropriate Foreign Jurisdiction in Quebec-United States Crossborder
Litigation (2001), at pp. 44-45).
[108]
Regarding the burden imposed on a party asking
for a stay on the basis of forum non conveniens, the courts have held
that the party must show that the alternative forum is clearly more
appropriate. The expression “clearly more appropriate” is well established. It
was used in Spiliada and Amchem. On the other hand, it has not
always been used consistently and does not appear in the CJPTA or any
of the statutes based on the CJPTA, which simply require that the
party moving for a stay establish that there is a “more appropriate forum”
elsewhere. Nor is this expression found in art. 3135 of the Civil
Code of Québec, which refers instead to the exceptional nature of
the power conferred on a Quebec authority to decline jurisdiction:
“. . . it may exceptionally and on an application by a party,
decline jurisdiction . . .”.
[109]
The use of the words “clearly” and
“exceptionally” should be interpreted as an acknowledgment that the normal
state of affairs is that jurisdiction should be exercised once it is properly
assumed. The burden is on a party who seeks to depart from this normal state of
affairs to show that, in light of the characteristics of the alternative forum,
it would be fairer and more efficient to do so and that the plaintiff should be
denied the benefits of his or her decision to select a forum that is
appropriate under the conflicts rules. The court should not exercise its
discretion in favour of a stay solely because it finds, once all relevant
concerns and factors are weighed, that comparable forums exist in other
provinces or states. It is not a matter of flipping a coin. A court hearing an
application for a stay of proceedings must find that a forum exists that is in a
better position to dispose fairly and efficiently of the litigation. But the
court must be mindful that jurisdiction may sometimes be established on a
rather low threshold under the conflicts rules. Forum non conveniens may
play an important role in identifying a forum that is clearly more appropriate
for disposing of the litigation and thus ensuring fairness to the parties and a
more efficient process for resolving their dispute.
[110]
As I mentioned above, the factors that a court
may consider in deciding whether to apply forum non conveniens may vary
depending on the context and might include the locations of parties and
witnesses, the cost of transferring the case to another jurisdiction or of
declining the stay, the impact of a transfer on the conduct of the litigation
or on related or parallel proceedings, the possibility of conflicting
judgments, problems related to the recognition and enforcement of judgments,
and the relative strengths of the connections of the two parties.
[111]
Loss of juridical advantage is a difficulty that
could arise should the action be stayed in favour of a court of another
province or country. This difficulty is aggravated by the possible conflation
of two different issues: the impact of the procedural rules governing the
conduct of the trial, and the proper substantive law for the legal situation,
that is, in the context of these two appeals, the proper law of the tort. In
considering the question of juridical advantage, a court may be too quick to
assume that the proper law naturally flows from the assumption of jurisdiction.
However, the governing law of the tort is not necessarily the domestic law of
the forum. This may be so in many cases, but not always. In any event, if
parties plead the foreign law, the court may well need to consider the issue
and determine whether it should apply that law once it is proved. Even if the
jurisdictional analysis leads to the conclusion that courts in different states
might properly entertain an action, the same substantive law may apply, at
least in theory, wherever the case is heard.
[112]
A further issue that does not arise in these
appeals is whether it is legitimate to use this factor of loss of juridical
advantage within the Canadian federation. To use it too extensively in the
forum non conveniens analysis might be inconsistent with the spirit and
intent of Morguard and Hunt, as the Court sought in those cases
to establish comity and a strong attitude of respect in relations between the
different provinces, courts and legal systems of Canada. Differences should not
be viewed instinctively as signs of disadvantage or inferiority. This factor
obviously becomes more relevant where foreign countries are involved, but even
then, comity and an attitude of respect for the courts and legal systems of
other countries, many of which have the same basic values as us, may be in
order. In the end, the court must engage in a contextual analysis, but refrain
from leaning too instinctively in favour of its own jurisdiction. At this
point, the decision falls within the reasoned discretion of the trial court.
The exercise of discretion will be entitled to deference from higher courts,
absent an error of law or a clear and serious error in the determination of
relevant facts, which, as I emphasized above, takes place at an interlocutory
or preliminary stage. I will now consider whether the Ontario courts properly
assumed jurisdiction in these cases and, if so, whether they should have
declined to exercise it on the basis of forum non conveniens.
(10) Application
[113]
Before discussing the outcomes in the two
appeals, I must note that the evidence was not the same in Van Breda and
Charron, although they did raise similar legal issues and their factual
matrices were the same in important aspects. The Court of Appeal rightly
observed that the evidence about Club Resorts’ activities in Ontario was not
identical in the two cases. In particular, the plaintiffs in Charron,
unlike the plaintiffs in Van Breda, asserted that the SuperClubs group
of companies, to which the appellant Club Resorts belonged, maintained an
office near Toronto and that Club Resorts had availed itself of that office’s
services. They also relied on the fact that representatives of Club Resorts had
travelled to Ontario to promote their business. Moreover, it is important to
note that in considering the decisions of the courts below, this Court must
show deference to the findings of fact of the judges of the Superior Court of
Justice.
(a) Van
Breda
[114]
In Van Breda, there is little evidence
about the existence of sufficient factual connections. Ms. Van Breda’s accident
and physical injuries happened in Cuba. Mr. Berg and Ms. Van Breda were living
in Ontario at the time of their trip. After the accident, however, they did not
return to Ontario, as they moved first to Calgary and later to British
Columbia, where they were living when they brought their action. Ms. Van
Breda’s damage, pain and suffering have happened mostly in British Columbia,
like most of the treatments she has received. In addition, the evidence is
essentially silent about Club Resorts’ activities in Ontario, except on one
point which I will address below. Moreover, I do not accept that evidence of
advertising in Ontario would be enough to establish a connection. Advertising
is often international, if not global. It is ubiquitous, crossing borders with
ease. It does not, on its own, establish a connection between the claim and the
forum. If advertising sufficed to create a connection with a forum, commercial
organizations of a certain size could be sued in courts everywhere and anywhere
in the world. The courts of a victim’s place of residence would possess an
almost universal jurisdiction over diverse and vast classes of consumer claims.
[115]
The motion judge and the Court of Appeal
concluded, however, that a sufficient connection between the claim and the
province arose out of the contractual relationship created between Mr. Berg and
Club Resorts through the defendant Denis. Mr. Denis, who operated a specialized
travel agency known as Sport au Soleil, had an agreement with Club Resorts
under which he found tennis and squash professionals and sent them to Club
Resorts hotels. In exchange for bed and board at a resort, each professional
would give a few hours of instruction to guests of the hotel during his or her
stay. It appears that Mr. Denis received some form of compensation from Club
Resorts.
[116]
I find no reviewable error in the findings that
Mr. Denis had the authority to represent Club Resorts and that a contract
existed under which Mr. Berg was to provide services to Club Resorts. The
benefit of this contract, accommodation at the resort, was extended to Ms. Van
Breda, who was injured while there in the context of Mr. Berg’s performance of
his contractual obligation. Deference is owed to the motion judge’s findings.
No palpable and overriding error has been established. A contract was entered
into in Ontario and a relationship was thus created in Ontario between Mr.
Berg, Club Resorts and Ms. Van Breda, who was brought within the scope of this
relationship by the terms of the contract.
[117]
The existence of a contract made in Ontario that
is connected with the litigation is a presumptive connecting factor that, on
its face, entitles the courts of Ontario to assume jurisdiction in this case.
The events that gave rise to the claim flowed from the relationship created by
the contract. Club Resorts has failed to rebut the presumption of jurisdiction
that arises where this factor applies. On this basis, I would uphold the Court
of Appeal’s conclusion that there was a sufficient connection between the
Ontario court and the subject matter of the litigation.
[118]
Whether the Superior Court of Justice should
have declined jurisdiction on the basis of the doctrine of forum non
conveniens remains to be determined. Club Resorts had the burden of showing
that a Cuban court would clearly be a more appropriate forum. I recognize that
a sufficient connection exists between Cuba and the subject matter of the
litigation to support an action there. The accident happened on a Cuban beach,
at a hotel managed by Club Resorts. The initial injury was suffered there. Some
of the potential defendants reside in Cuba. However, other issues related to
fairness to the parties and to the efficient disposition of the claim must be
considered. A trial held in Cuba would present serious challenges to the
parties. There may be problems with witnesses, concerns about the application
of local procedures, and expenses linked to litigating there. All things
considered, the burden on the plaintiffs clearly would be far heavier if they
were required to bring their action in Cuba. They would face substantial
additional expenses and would be at a clear disadvantage relative to the
defendants. They might also suffer a loss of juridical advantage. But on this
point the evidence is far from clear and satisfactory. In the end, the
appellant has not shown that a Cuban court would clearly be a more appropriate
forum. I agree that the motion judge made no reviewable error in deciding not
to decline to exercise his jurisdiction, and I would affirm the Court of
Appeal’s judgment dismissing the appeal from that decision.
(b) Charron
[119]
In Charron, the existence of a sufficient
connection with the Ontario court was hotly disputed. As in Van Breda,
the accident itself happened in Cuba. On the other hand, Mrs. Charron returned
to Ontario after her husband’s death and continued to reside in that province.
The damage claimed by the respondents was sustained largely in Ontario. But
these facts do not constitute presumptive connecting factors and do not support
the assumption of jurisdiction on the basis of the real and substantial
connection test.
[120]
However, the evidence does support the
presumptive connecting factor of carrying on business in the jurisdiction. The
Superior Court of Justice assumed jurisdiction, and the Court of Appeal upheld
its decision, mainly on the basis of an active commercial presence in Ontario
that was not limited to advertising campaigns targeting the Ontario market. In
the opinion of the courts below, Club Resorts had an active presence in Ontario
even though its corporate head office was not in that province. Its presence
was not limited to advertising activities or to contacts with travel package
wholesalers or travel agents. The courts below concluded that the appellant had
engaged in significant commercial activities in Ontario, especially through the
office of the SuperClubs group, before the Charrons booked their holiday. The
booking resulted at least in part from those activities in Ontario. After
reviewing the evidence, Sharpe J.A. wrote the following for the Court of Appeal
in respect of this factor:
The
record reveals that CRL [Club Resorts Ltd.] was directly involved in activity
in Ontario to solicit business for the resort. Unlike the defendants in Leufkens,
Lemmex and Sinclair, CRL did not confine its activities to its
home jurisdiction:
● pursuant to its contract with the Cuban hotel owner, CRL was
required to and did promote and advertise the resort using the “SuperClubs”
brand in Canada;
● CRL relies on maintaining a high profile for the SuperClubs
brand in Ontario as residents of Canada and Ontario represent a high proportion
of CRL’s target market;
● CRL was licenced to use the “SuperClubs” label and itself
“created” the “SuperClubs Cuba” label and used these labels to market the
resort in Ontario;
● CRL’s witness Abe Moore agreed on cross-examination:
● “that CRL was in the business of carrying out activities in
countries such as Canada to generate paying guests of the resort”;
● that to do so CRL had to “either directly or engage others to
undertake the activity of solicitation, promotion and advertising” in Canada;
● that CRL ensured that it had relationships with others to do so in
Ontario to satisfy its contractual obligation to promote the resort;
● CRL representatives regularly travel to Ontario to further
CRL’s promotional activity;
● CRL arranged for the preparation and distribution of
promotional materials in Ontario; and
● as outlined in the following paragraph, CRL benefited from an
office in Ontario that provided information and engaged in the promotion of the
SuperClubs brand.
. . .
In my view, one can fairly infer from
this body of evidence that although CRL itself maintained no office in Ontario,
CRL is implicated in and benefits from the physical presence in Ontario of an
office and contact person held out to the public as representing the same
“SuperClubs” brand CRL uses to carry on its business of promoting and operating
the resort. [paras. 117 and 119]
[121]
The Superior Court of Justice considered this
evidence at a preliminary stage on the basis of the parties’ pleadings. The
nature and weight of this evidence has been challenged in this Court. But the
courts below made findings about its content and about what it meant. The
appellant has not demonstrated that the motion judge made any reviewable
errors, and deference must be shown to his findings of fact.
[122]
Although whether this factor applies was a very
hard fought issue in these appeals, the motion judge’s findings of fact lead to
the conclusion that Club Resorts was carrying on business in Ontario. Club
Resorts’ commercial activities in Ontario went well beyond promoting a brand
and advertising. Its representatives were in the province on a regular basis.
It benefited from the physical presence of an office in Ontario. Most
significantly, on cross-examination Club Resorts’ witness admitted that it was
in the business of carrying out activities in Canada. Together, these facts
support the conclusion that Club Resorts was carrying on business in Ontario.
It follows that the respondents have established that a presumptive connecting
factor applies and that the Ontario court is prima facie entitled to
assume jurisdiction.
[123]
Club Resorts has not rebutted the presumption of
jurisdiction that arises from this presumptive connecting factor. Its business
activities in Ontario were specifically directed at attracting residents of the
province, including the Charron family, to stay as paying guests at the resort
in Cuba where the accident occurred. It cannot be said that the claim here is
unrelated to Club Resorts’ business activities in the province. Accordingly, I
find that the Ontario court has jurisdiction on the basis of the real and
substantial connection test.
[124]
I also find that the motion judge made no error
in declining to stay the proceedings on the basis of forum non conveniens.
Club Resorts failed to discharge its burden of showing that a Cuban court would
clearly be a more appropriate forum in the circumstances of this case.
Considerations of fairness to the parties weigh heavily in the respondents’
favour. The inconvenience to the individual plaintiffs of transferring the
litigation is greater than the inconvenience to the corporate defendant of not
doing so. On the question of juridical advantage, I refer to my comments about Van
Breda. I would add that keeping the case in the Ontario courts will
probably avert a situation in which the proceedings against the various
defendants are split.
IV. Conclusion
[125]
For these reasons, I would dismiss Club Resorts’
appeals with costs to the respondents other than Bel Air Travel Group Ltd. and
Hola Sun Holidays Limited.
Appeals
dismissed with costs.
Solicitors
for the appellant (33692): Beard Winter, Toronto.
Solicitors
for the respondents Morgan Van Breda et al. (33692): Paliare,
Roland, Rosenberg, Rothstein, Toronto.
Solicitors
for the appellant (33606): Fasken Martineau DuMoulin, Toronto.
Solicitors
for the respondents Anna Charron et al. (33606): Adair
Morse, Toronto.
Solicitors
for the respondent Bel Air Travel Group Ltd. (33606): McCague Borlack,
Toronto.
Solicitors
for the respondent Hola Sun Holidays Limited (33606): Buie Cohen,
Toronto.
Solicitors
for the intervener the Tourism Industry Association of Ontario (33606 and
33692): Torys, Toronto.
Solicitors
for the interveners Amnesty International, the Canadian Centre for
International Justice and Canadian Lawyers for International Human Rights
(33606 and 33692): Heenan Blaikie, Ottawa.
Solicitor for the
intervener the Ontario Trial Lawyers Association (33606 and 33692): Allan
Rouben, Toronto.
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