SUPREME
COURT OF CANADA
Citation: Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock
& Blackwell LLP, 2016 SCC 30, [2016] 1 S.C.R. 851
|
Appeal
heard: December 3, 2015
Judgment
rendered: July 15, 2016
Docket: 36087
|
Between:
Lapointe
Rosenstein Marchand Melançon LLP,
Cabinet
juridique Panneton inc., Heenan Blaikie LLP,
Cain
Lamarre Casgrain Wells S.E.N.C.R.L., Dunton Rainville S.E.N.C.R.L.,
Jean‑Pierre
Barrette, Prévost Fortin D’Aoust S.E.N.C.R.L.,
Dominique
Zaurrini, Francis Carrier Avocat inc.,
Parent,
Doyon, Rancourt & Associés S.E.N.C.R.L.,
Claude
Caron, Gérard Desjardins, Claude Cormier,
Guertin
Lazure Crack S.E.N.C.R.L., Luc Boulais avocat inc.,
Lavery,
de Billy, LLP, Grenier Verbauwhede Avocats inc.,
Zaurrini
Avocats, Louis Riverin, Paul Langevin,
Roy
Laporte inc., Norton Rose OR LLP, Girard Allard Guimond Avocats,
Langlois
Kronström Desjardins avocats S.E.N.C.R.L., Perreault Avocat,
Cliche
Lortie Ladouceur inc., Gilles Lavallée,
Lévesque
Gravel & Associés S.E.N.C., Michel Paquin,
Sylvestre
& Associés avocats S.E.N.C.R.L. and Nolet Ethier, avocats, S.E.N.C.R.L.
Appellants
and
Cassels
Brock & Blackwell LLP
Respondent
Coram: McLachlin C.J. and Abella, Cromwell, Karakatsanis, Wagner,
Gascon and Côté JJ.
Reasons for Judgment:
(paras. 1 to 61)
Dissenting Reasons:
(paras. 62 to
146)
|
Abella J. (McLachlin C.J. and Cromwell,
Karakatsanis, Wagner and Gascon JJ. concurring)
Côté J.
|
Lapointe
Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, [2016] 1 S.C.R. 851
Lapointe Rosenstein Marchand Melançon
LLP,
Cabinet juridique Panneton inc., Heenan
Blaikie LLP,
Cain Lamarre Casgrain Wells
S.E.N.C.R.L.,
Dunton Rainville S.E.N.C.R.L., Jean‑Pierre
Barrette,
Prévost Fortin D’Aoust S.E.N.C.R.L.,
Dominique Zaurrini, Francis Carrier
Avocat inc.,
Parent, Doyon, Rancourt & Associés
S.E.N.C.R.L.,
Claude Caron, Gérard Desjardins, Claude
Cormier,
Guertin Lazure Crack S.E.N.C.R.L.,
Luc Boulais avocat inc., Lavery, de
Billy, LLP,
Grenier Verbauwhede Avocats inc.,
Zaurrini Avocats, Louis Riverin, Paul
Langevin,
Roy Laporte inc., Norton Rose OR LLP,
Girard Allard Guimond Avocats,
Langlois Kronström Desjardins avocats
S.E.N.C.R.L.,
Perreault Avocat, Cliche Lortie
Ladouceur inc.,
Gilles Lavallée, Lévesque Gravel &
Associés S.E.N.C.,
Michel Paquin, Sylvestre & Associés
avocats S.E.N.C.R.L. and
Nolet Ethier, avocats,
S.E.N.C.R.L. Appellants
v.
Cassels Brock & Blackwell
LLP Respondent
Indexed as: Lapointe Rosenstein
Marchand Melançon LLP v. Cassels
Brock & Blackwell LLP
2016 SCC 30
File No.: 36087.
2015: December 3; 2016: July 15.
Present: McLachlin C.J. and Abella, Cromwell, Karakatsanis,
Wagner, Gascon and Côté JJ.
on appeal from the court of appeal for ontario
Private
international law — Choice of forum — Court having jurisdiction — Forum non
conveniens — Whether Ontario courts should assume jurisdiction over third party
claim brought by Ontario law firm against several law firms located in Quebec
in the context of national class action certified in Ontario — If so, whether
Ontario courts ought to decline to exercise jurisdiction on ground that court
of another jurisdiction is clearly a more appropriate forum for disposing of
litigation.
One
of the casualties of the financial crisis in 2008 was the Canadian automotive
sector. To assist, the federal government bailed out some of the country’s auto
manufacturers in 2009, including General Motors of Canada Ltd. (GM). A term of
the government’s bailout of GM was that it close dealerships across the
country. Over 200 Canadian dealerships were closed. GM offered compensation to
each dealer pursuant to Wind‑Down Agreements. Two hundred and seven GM
dealers who had been closed down started a class action in Ontario, alleging
that GM had forced them to sign Wind‑Down Agreements, and that the law
firm of Cassels Brock & Blackwell LLP (Cassels Brock) was negligent in failing to provide appropriate legal advice. Cassels Brock added 150 law firms from
across the country as third party defendants, seeking contribution and
indemnity from the law firms who gave the individual dealers the independent
legal advice required under the Agreements. Eighty‑three non‑Ontario
law firms challenged Ontario’s jurisdiction, including 32 based in Quebec. The
motions judge dismissed the challenge. Only the 32 Quebec law firms
appealed. The Ontario Court of Appeal dismissed the appeal.
Held (Côté J.
dissenting): The appeal should be dismissed.
Per
McLachlin C.J. and Abella,
Cromwell, Karakatsanis, Wagner and Gascon JJ.: Before a court can assume jurisdiction over a claim, a
real and substantial connection must be shown between the circumstances giving
rise to the claim and the jurisdiction where the claim is brought. This Court’s
decision in Club Resorts Ltd. v. Van Breda,
2012 SCC 17, [2012] 1 S.C.R. 572, sets out the test for establishing the requisite connection
in tort claims, and identified four presumptive connecting factors.
All presumptive connecting factors generally point to a relationship between
the subject matter of the litigation and the forum where jurisdiction is
proposed to be assumed.
This
case engages the fourth factor: whether a contract connected with the dispute
was made in the province. The fourth factor premises the determination of when
a contract will be made in a given jurisdiction on the traditional rules of
contract formation. All that is required is a connection between the claim and
a contract that was made where jurisdiction is sought to be assumed. A
connection does not necessarily require that an alleged tortfeasor be a party
to the contract. Nothing in Van Breda suggests that the fourth factor is
unavailable when more than one contract is involved, or that a different
inquiry applies in these circumstances. Nor does Van Breda limit this
factor to situations where the defendant’s liability flows immediately from his
or her contractual obligations. It is sufficient that the dispute be connected
to a contract made in the province or territory where jurisdiction is proposed
to be assumed. This merely requires that
a defendant’s conduct brings him or her within the scope of the contractual
relationship and that the events that give rise to the claim flow from the
relationship created by the contract. The fact that another forum may also be connected with the dispute does
not undermine the existence of a real and substantial connection.
The
first step is identifying the dispute. The nucleus of the claim against Cassels
Brock, as well as that of Cassels Brock’s third party claim against the local
lawyers who signed certificates of independent legal advice, relates to the
claims that there was negligent legal advice about the Wind‑Down
Agreements. The dispute is therefore a tort claim for professional negligence.
The
next question is whether a contract connected with this dispute was made in
Ontario. The contract connected with this dispute is the Wind‑Down
Agreement, which is clearly connected to Cassels Brock’s third party claims
against the local lawyers. Valid acceptance of GM’s offer required that each
individual dealer obtain independent legal advice. The local lawyers’ provision
of legal advice brought them within the scope of the contractual relationship
between GM and the dealers.
In
Ontario, a contract is formed based on an offer by one party, accepted by the
other, or an exchange of promises, supported by consideration. Where the
contracting parties are located in different jurisdictions, the contract will
be formed in the jurisdiction where the last essential act of contract
formation, such as acceptance, took place. Here, the contract in question was
made in Ontario. The last act essential to contract formation occurred at GM’s
office in Ontario, where its Vice President of Sales, Service & Marketing
accepted and signed the Wind‑Down Agreements that had been signed and
returned by the dealers. Other contextual factors demonstrate that the
Agreement was made in Ontario: the Agreement expressly provides that it is
governed by Ontario law, GM’s head office and the bulk of the affected dealers
were located in Ontario, and the business relationships and the litigation are
deeply related to Ontario.
Cassels
Brock has therefore demonstrated a real and substantial connection between a
contract made in the province (the Wind‑Down Agreement) and the dispute
(the third party negligence claim). The strength of this connection was not
rebutted by the Quebec lawyers. The Ontario courts, therefore, properly assumed
jurisdiction over the claim.
Once
jurisdiction is established, the party contesting jurisdiction may raise the
doctrine of forum non conveniens. The burden is on the defendant to
demonstrate that a court of another jurisdiction has a real and substantial
connection to the claim and that this alternative forum is clearly more
appropriate than the one where jurisdiction may be assumed. This threshold will
be met where the alternative forum would be fairer and more efficient for
disposing of the litigation. It is not sufficient that the alternative forum
merely be comparable to the forum where jurisdiction has been found to exist. Forum
non conveniens is not concerned only with fairness to the party contesting
jurisdiction, it is also concerned with efficiency and convenience for the
proceedings themselves.
In
this case, the third party claims against the other 118 law firms will be heard
in Ontario. This strongly weighs against finding that the Quebec courts are a
clearly more appropriate forum for the 32 Quebec firms. Allowing the Quebec
third party claims to proceed in Ontario along with the 118 other law firms,
would clearly be a more efficient and effective solution. Because the
third party claims involve a significant number of parties and require the
mobilization of significant judicial resources, those resources should be allocated and expended with a view to making the litigation
quicker, more economical and less complicated. Adjudicating all the third party
claims in the same forum avoids the possibility of conflicting judgments and
duplication in fact‑finding and legal analysis, and will ensure
that they are resolved in a timelier and more affordable manner.
All of this leads to the conclusion that Ontario should assume jurisdiction over all the third party claims,
including those involving the Quebec law firms.
Per
Côté J. (dissenting): At the heart of this dispute is the fourth
connecting factor set out in Club Resorts Ltd. v. Van Breda, 2012 SCC
17, [2012] 1 S.C.R. 572, which provides Ontario with presumptive jurisdiction
when a contract connected with the dispute was made in the province.
In this case, the relevant Wind-Down
Agreements were simply not made in Ontario. Under the law of Ontario, a contract will
be considered formed where the last essential act of contract formation takes
place — in other words, where final acceptance is notified. Here, GM’s notice
of final acceptance was itself an essential condition for the Wind‑Down
Agreements to become binding, and was clearly the last essential formative act.
In Ontario, acceptance of a contract will be considered notified in the place
where it is received. In this case, GM’s notice of final acceptance was
transmitted to its Quebec dealers in Quebec. As such, the relevant Wind‑Down
Agreements in respect of the Quebec dealers would have been formed in Quebec.
Contextual considerations, like the choice of law clause, and the fact that the
bulk of the terminated dealers, as well as GM’s head office, are located in
Ontario, have nothing to do with where the Quebec dealers’ Agreements were
formed. Furthermore, if these considerations are given weight, the parties’ own
desires regarding where their contract is formed risk becoming irrelevant.
Even
if the Agreements had been concluded in Ontario, they are not connected with
these claims in the manner required by Van Breda’s fourth connecting
factor. This fourth connecting factor only provides jurisdiction over claims
where the defendant’s liability in tort flows immediately from the defendant’s
own contractual obligations. Indeed, in these kinds of cases, the claim in tort
will often resemble a claim in contract. This may occur in cases of concurrent
liability, where a defendant’s failure to exercise reasonable skill and care
may constitute, at once, both a breach of contract and a tort. This may also
occur in cases where a third party beneficiary to a contract has a claim in
tort for acts which occurred in the performance — and potential breach — of
that contract. In these cases, the defendant’s breach of contract and his tort
are indissociable. Indeed, the duty of care the defendant owes stems from his
contract. Establishing jurisdiction over these kinds of claims in tort represents
the underlying rationale of Van Breda’s fourth connecting factor. It is
what makes this factor both a defensible and a desirable conflicts rule. This
may represent a narrow interpretation, but it reflects the way the fourth
connecting factor was described, justified and applied in Van Breda.
On
this narrow interpretation of Van Breda’s fourth factor, the courts of
Ontario clearly do not have jurisdiction over Cassels Brock’s third party
claims. The only contracts that could possibly be close enough to the dispute
are the retainer agreements concluded between the Quebec lawyers and their
clients. The Wind‑Down Agreements — the subject of the Quebec lawyers’
legal advice — are simply too remote. The Quebec lawyers were never brought
within the scope of the contractual relationship between GM and the dealers.
They were not parties to the Agreements, never owed any obligations under them,
were never owed any benefit under them, and are not being sued in tort for
actions committed in their performance. Instead, their obligations flow
entirely from their retainer agreements. The most that can be said is that the
Wind‑Down Agreements contributed to the factual circumstances following
which an entirely separate fault or breach occurred.
The
majority’s approach to Van Breda’s fourth factor misconstrues what it
means for a contract to be connected with a claim in tort. The broad scope given to Van Breda’s
fourth connecting factor by the majority divorces it from its specific and
limited foundations. In doing so, this broader approach will lead to
jurisdictional overreach. In this case, the requirement of independent
legal advice is entirely unrelated to the quality of the legal advice that was
obtained in Quebec, and that forms the basis of each claim. Nor can this
requirement bring the Quebec lawyers within the scope of the dealers’
contractual relationship with GM. There is also nothing real or substantial
about the fact that the allegedly negligent legal advice was about the Wind‑Down
Agreement. Every day, lawyers advise clients on contracts that will eventually
be formed in another province. If these contracts are a fount of jurisdiction,
then such lawyers could be sued for negligence wherever the contracts are
entered into.
The
majority’s approach also muddies an area of the law that should be kept clear
and jeopardizes the certainty and predictability that was promised by Van
Breda’s purposefully specific connecting factors. On
a more restrained approach, it should always be clear when the fourth connecting
factor can serve as a basis for jurisdiction. By contrast, the majority’s
approach amounts to an open invitation for litigants to engage in long‑winded
jurisdictional debates, since the words “connected with” and
“connection” are notoriously flexible and fact‑specific.
There
may also be harmful commercial implications that flow from the majority’s
broader approach to the fourth connecting factor, as well as negative
repercussions on the practice of law itself. The majority’s holding means that
whenever a lawyer’s advice is required before his client can accept an offer,
that lawyer may later be sued for professional negligence wherever the
resulting contract is formed, regardless of where his services were provided.
Such lawyers may feel conflicted, since they will likely have a personal stake
in where their client’s contract is entered into.
With
respect to the claims against the two national law firms which have offices
both in Quebec and in Ontario, whatever jurisdiction the courts of Ontario have
over these claims should be declined on the basis of forum non conveniens.
It is clear that Quebec is the more appropriate forum for the third party
claims against the two national law firms. If these claims were heard in
Ontario, the lawyers and witnesses involved, who are all residents of Quebec,
would all have to travel to testify, incurring significant costs. Furthermore,
since Quebec law will govern the claims against the national law firms with
offices in Quebec, additional costs would be incurred to provide an Ontario
court with expertise on Quebec law. Finally, if the claims against the Quebec
law firms were to be divided between Quebec and Ontario, there is a risk of
conflicting decisions.
Cases Cited
By Abella J.
Applied:
Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572; referred
to: Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666; Society
of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of
Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427; Tolofson v. Jensen,
[1994] 3 S.C.R. 1022; Hunt v. T&N plc, [1993] 4 S.C.R. 289; Morguard
Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; Neophytou v. Fraser,
2015 ONCA 45, 63 C.P.C. (7th) 13; Eco‑Tec Inc. v. Lu, 2015 ONCA
818, 343 O.A.C. 140, leave to appeal refused, May 5, 2016, file no. 36825;
Jedfro Investments (U.S.A.) Ltd. v. Jacyk, 2007 SCC 55, [2007] 3 S.C.R.
679; Pixiu Solutions Inc. v. Canadian General‑Tower Ltd., 2016
ONSC 906; Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1
S.C.R. 636; Currie v. McDonald’s Restaurants of Canada Ltd. (2005), 74
O.R. (3d) 321; Sable Offshore Energy Inc. v. Ameron International Corp.,
2013 SCC 37, [2013] 2 S.C.R. 623; Association des parents de l’école Rose‑des‑vents
v. British Columbia (Education), 2015 SCC 21, [2015] 2 S.C.R. 139; Hryniak
v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.
By Côté J. (dissenting)
Club Resorts Ltd. v. Van Breda,
2012 SCC 17, [2012] 1 S.C.R. 572; Serra v. Serra, 2009 ONCA 105, 93 O.R.
(3d) 161; Eastern Power Ltd. v. Azienda Comunale Energia & Ambiente
(1999), 178 D.L.R. (4th) 409, leave to appeal refused, [2000] 1 S.C.R. xi; Brinkibon
Ltd. v. Stahag Stahl und Stahlwarenhandelsgesellschaft m.b.H., [1983] 2
A.C. 34; Inukshuk Wireless Partnership v. 4253311 Canada Inc., 2013 ONSC
5631, 117 O.R. (3d) 206; Christmas v. Fort McKay First Nation, 2014 ONSC
373, 119 O.R. (3d) 21; BG Checo International Ltd. v. British Columbia Hydro
and Power Authority, [1993] 1 S.C.R. 12; Galambos v. Perez, 2009 SCC
48, [2009] 3 S.C.R. 247; Earl v. Wilhelm, 2000 SKCA 1, 183 D.L.R. (4th)
45; White v. Jones, [1995] 2 A.C. 207; Whittingham v. Crease &
Co. (1978), 88 D.L.R. (3d) 353; Chevron Corp. v. Yaiguaje, 2015
SCC 42, [2015] 3 S.C.R. 69; Breeden v. Black, 2012 SCC 19, [2012] 1
S.C.R. 666; Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC
11, [2009] 1 S.C.R. 321; GreCon Dimter inc. v. J.R. Normand inc., 2005
SCC 46, [2005] 2 S.C.R. 401; Muscutt v. Courcelles (2002), 60 O.R. (3d)
20; Tolofson v. Jensen, [1994] 3 S.C.R. 1022; Oppenheim forfait GMBH
v. Lexus maritime inc., 1998 CanLII 13001; Trillium Motor World Ltd. v.
General Motors of Canada Ltd., 2015 ONSC 3824, 30 C.B.R. (6th) 1; Éditions
Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636.
Statutes and Regulations Cited
Civil Code of Québec, arts. 3139,
3148.
Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28.
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).
European Communities. Council Regulation (EC) No. 44/2001 of
22 December 2000 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters, [2001] O.J. L. 12/1,
art. 5(1), (3).
Negligence Act, R.S.O. 1990,
c. N.1.
Rules of Civil Procedure, R.R.O. 1990,
Reg. 194, rr. 17.02(f)(i), 29.
Authors Cited
Black, Vaughan. “Simplifying Court Jurisdiction in Canada” (2012), 8
J. Priv. Int. Law 411.
Blom, Joost. “New Ground Rules for Jurisdictional Disputes: The Van
Breda Quartet” (2012), 53 Can. Bus. L.J. 1.
Blom, Joost, and Elizabeth Edinger. “The Chimera of the Real and
Substantial Connection Test” (2005), 38 U.B.C. L. Rev. 373.
Castel, Jean‑Gabriel. “The Uncertainty Factor in Canadian
Private International Law” (2007), 52 McGill L.J. 555.
Fawcett, J. J., and J. M. Carruthers. Cheshire,
North & Fawcett Private International Law, 14th ed. Oxford: Oxford University Press, 2008.
Goldstein, Gérald, et Ethel Groffier. Droit international privé,
t. I, Théorie générale. Cowansville, Qué.: Yvon
Blais, 1998.
McCamus, John D. The Law of Contracts, 2nd ed. Toronto:
Irwin Law, 2012.
Monestier, Tanya J. “A ‘Real and Substantial’ Mess: The Law of
Jurisdiction in Canada” (2007), 33 Queen’s L.J. 179.
Monestier, Tanya J. “(Still) a ‘Real and Substantial’ Mess: The
Law of Jurisdiction in Canada” (2013), 36 Fordham Int’l L.J. 396.
Phipson on Evidence, 15th ed. London:
Sweet & Maxwell, 2000.
Swan, Angela, with the assistance of Jakub Adamski. Canadian
Contract Law, 2nd ed. Markham, Ont.: LexisNexis Canada, 2009.
Uniform Law Conference of Canada. Uniform Court Jurisdiction and
Proceedings Transfer Act (online: www.ulcc.ca/en/uniform‑acts‑new‑order/current‑uniform‑acts/739‑jurisdiction/civil‑jurisdiction/1730‑court‑jurisdiction‑proceedings‑transfer‑act).
Waddams, S. M. The Law of Contracts, 6th ed. Toronto:
Canada Law Book, 2010.
Walker, Janet. Castel & Walker: Canadian Conflict of Laws,
6th ed. Markham, Ont.: LexisNexis, 2005 (loose‑leaf updated 2016, release
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167.
APPEAL
from a judgment of the Ontario Court of Appeal (Doherty, LaForme and Lauwers JJ.A.),
2014 ONCA 497, 120 O.R. (3d) 598, 53 C.P.C. (7th) 1, 374 D.L.R. (4th) 411, 322
O.A.C. 161, [2014] O.J. No. 3096 (QL), 2014 CarswellOnt 8775 (WL Can.),
affirming a decision of Belobaba J., 2013 ONSC 2289, 51 C.P.C. (7th) 419,
[2013] O.J. No. 2358 (QL), 2013 CarswellOnt 6666 (WL Can.). Appeal
dismissed, Côté J. dissenting.
Jo‑Anne Demers and Jean‑Olivier
Lessard, for the appellants.
Peter H. Griffin and Jon Laxer, for
the respondent.
The judgment of McLachlin C.J. and Abella, Cromwell,
Karakatsanis, Wagner and Gascon JJ. was delivered by
[1]
Abella J. — Even if the underlying facts involve
another jurisdiction, a Canadian court can, if there is a sufficient connection, assume jurisdiction
over a tort claim. In Van Breda, this Court identified four “presumptive connecting factors” to
assist in making this determination. This appeal focuses on the fourth factor,
whereby jurisdiction can be assumed if a contract connected with the dispute
was made in the province where the tort claim is brought.
[2]
The specific question
in this appeal is whether the Ontario courts should assume jurisdiction over a
third party claim brought by an Ontario law firm against several law firms
located in Quebec in the context of a national class action.
Background
[3]
One of the casualties
of the financial crisis in 2008 was the Canadian automotive sector. To assist, the federal government bailed
out some of the country’s auto manufacturers in 2009, including General Motors
of Canada Ltd. A term of the bailout was the requirement that GM Canada close
dealerships across the country.
[4]
Over 200 Canadian
dealerships were closed. GM Canada offered compensation to each dealer
pursuant to Wind-Down Agreements. The Agreements contained the following
provisions of particular relevance:
Article 13: “This
Agreement is governed by the laws of the Province of Ontario.”
Article 19: “The
parties consent and agree that the courts of the Province of Ontario have
exclusive jurisdiction to hear and determine claims or disputes between the
parties hereto pertaining to this Agreement.”
[5]
All dealers also had to
agree to waive their rights under any and all applicable statutes, regulation
or other law, including rights under provincial franchise laws.
[6]
Attached to each
Agreement was a letter dated May 20, 2009, from Marc Comeau, GM Canada’s Vice
President of Sales, Service & Marketing, sent from his office in Oshawa,
Ontario. It states, in part:
Our offer, as set out in the Wind-Down
Agreement, is conditional upon all of the Non-Retained Dealers accepting the
offer (the “Acceptance Threshold Condition”) and executing and
delivering their respective Wind-Down Agreements to GM Canada on or before May
26, 2009 at 6:00 pm EST (the “End of the Offer Period”). GM Canada reserves
the right, in its discretion, to waive the Acceptance Threshold Condition. Any
Wind-Down Agreement signed and returned to GM Canada by the End of the Offer
Period will not become effective unless and until GM Canada provides written
notice to those dealers that the Acceptance Threshold Condition and any other
required conditions have been met or have been waived by GM Canada.
[Emphasis added; emphasis in original deleted.]
[7]
The letter also
included a requirement that each dealer get independent legal advice and a
certificate signed by the retained lawyer. The signed certificate was to be
attached as an Exhibit to the Wind-Down Agreement:
If you are interested in entering into
the Wind-Down Agreement, you should review the Wind-Down Agreement with legal,
tax and any other advisors of your choosing. To accept, please request your
counsel to complete a certificate of independent legal advice (attached as an
Exhibit to the Wind-Down Agreement). Please send the signed certificate
together with the executed Wind-Down Agreement by the End of the Offer Period
by pdf or fax to your Regional Zone Office Manager . . . with two original
signed copies of the Agreement, each with an original signed Certificate, to
follow by courier.
[8]
The signed certificate
of independent legal advice had to acknowledge that the lawyer had been retained by the dealer, had read
the Wind-Down Agreement, and had fully explained the nature and effect of the
Agreement to the dealer,
including an explanation of the waivers, releases and indemnification
obligations contained in the Agreement. Each dealer, in turn, had to
acknowledge on the certificate that he or she had carefully read it.
[9]
Mr. Comeau sent another
letter to the affected dealers 10 days later advising them that because of the
high acceptance rate of dealers, GM Canada was waiving the threshold condition
that all dealers sign the Wind-Down Agreements.
[10]
Two hundred and seven
GM Canada dealers started a class action against GM Canada in Ontario,
alleging that GM Canada had forced
them to sign the Wind-Down Agreements in breach of provincial franchise laws.
They also alleged that the law firm of Cassels Brock & Blackwell LLP,
counsel for the Canadian Automobile Dealers Association, was negligent in the
legal advice it gave to the General Motors dealers who were members of the
Canadian Automobile Dealers Association and therefore had access to that legal
advice.
[11]
Additionally, the dealers claimed
that because Cassels Brock was on retainer to Industry Canada — from whom GM
Canada needed funding — at the time it was retained by the Canadian Automobile
Dealers Association, it had a conflict of interest.
[12]
The total amount of damages
claimed was $750 million.
[13]
The class action was certified by
Strathy J. in 2011. The Ontario Court of Appeal refused leave to appeal the
certification in 2012.
[14]
Relying on rule 29 of
the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and the Negligence
Act, R.S.O. 1990, c. N.1, Cassels Brock added 150 law firms as third party
defendants. Sixty-seven were
based in Ontario, 32 in Quebec, and 51 in the 8 remaining provinces
— 19 in Alberta, 7 in Nova Scotia, 6 in each of British Columbia,
Saskatchewan and Manitoba, 5 in New Brunswick, and 1 in each of Newfoundland
and Labrador and Prince Edward Island. Six of these firms were national and had
offices in Ontario.
[15]
The basis for the third
party claims was that if Cassels Brock
was found to be negligent in failing to
provide appropriate legal advice, it was seeking contribution and indemnity
from the third party law firms who gave the individual dealers independent
legal advice.
[16]
The 32 law firms based in Quebec,
and, separately, the other 51 non-Ontario law firms, claimed in two motions
that because they were not domiciled or resident in Ontario and did not carry
on business there, there was an insufficient connection between the third party
claims and the Ontario courts. Nor did they give any legal advice in Ontario.
Alternatively, they argued that even if the Ontario courts had jurisdiction,
they ought to decline to exercise it based on forum non conveniens.
[17]
Belobaba J. dismissed
the motions.
In his view, the fourth Van
Breda factor was met because there was a “real and substantial connection”
between a contract made in the province (the Wind-Down Agreement) and the
dispute (between Cassels Brock and the local lawyers).
[18]
Belobaba J. based this
conclusion on the fact that the Wind-Down Agreement expressly addressed the
issue of the provision of legal advice. Any lawyer reviewing the Agreement
would have known from the Agreement that it was governed by Ontario law and
that all disputes were to be litigated in Ontario. More importantly, the
Wind-Down Agreement itself contemplated and required the involvement of local
lawyers: it required each dealer to obtain independent legal advice about the
Agreement, and obliged the lawyer providing the advice to sign a certificate
confirming the lawyer had read the Agreement and explained its nature and
effect to the dealer. As a result, while the lawyers were not parties to the
Wind-Down Agreement, they were brought within the scope of this contractual
relationship by providing legal advice to the dealers. Finally, the third party
tort claim deals squarely with the provision and adequacy of the local lawyers’
legal advice. It should not, as a result, “surprise the local lawyers if they
were added as third parties to the Ontario class action that was brought by
their clients. Indeed it would be crazy for [Cassels Brock] not to do so.”
[19]
Belobaba J. also
refused to accede to the invitation to decline jurisdiction on the basis of forum
non conveniens. Thirty-two law firms were based in Quebec and the 51
remaining firms were “scattered” across the other 8 provinces.
[20]
He relied on Breeden
v. Black, [2012] 1 S.C.R. 666, released the same day as Van Breda,
and summarized the test as follows:
When defendants are scattered over a
number of jurisdictions and only one forum can be selected, the forum selected
by the plaintiff can only be displaced if the defendants can point to an
alternative forum that is “clearly more appropriate”. [para. 48]
[21]
Since Cassels Brock’s
third party action against the 67 Ontario-based law firms was already
proceeding in Ontario, Belobaba J. concluded that it “cannot be seriously
maintained” that Quebec, with only 32 firms, or Alberta, with only 19, were
“clearly more appropriate” forums.
[22]
Only the 32 Quebec law
firms appealed Belobaba J.’s judgment. Lauwers J.A. agreed with Belobaba J. He confirmed that the Wind-Down
Agreement is the relevant contract in applying the fourth Van Breda
factor to these third party actions. He also agreed that the Agreement was
formed in Ontario and was governed by Ontario law. The real and substantial
connection between the third party actions and the Agreement was also
clear. While recognizing that satisfying the procedural requirements for third
party claims does not necessarily give rise to a real and substantial
connection for the purpose of jurisdiction, in this case there was an “integral
relationship” between the Wind-Down Agreements, the retainers between the local
lawyers and the Quebec class members, the advice the local lawyers gave, and
the certificates of independent legal advice they were obliged to sign.
[23]
The Court of Appeal
also agreed that jurisdiction should not be declined on the basis of forum
non conveniens. Because only the 32 Quebec law firms appealed, almost 120
law firms were going to have their cases determined in Ontario. This made it
hard to accept that Quebec was a “clearly more appropriate” forum than Ontario,
where all the other third party defendants were going to litigate what were
essentially common defences.
[24]
For the following
reasons, I would dismiss the appeal.
Analysis
[25]
Before a court can
assume jurisdiction over a claim, a “real and substantial connection” must be
shown between the circumstances giving rise to the claim and the jurisdiction
where the claim is brought: Van Breda, at paras. 22-24; Society of
Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet
Providers, [2004] 2 S.C.R. 427, at para. 60; Tolofson v. Jensen,
[1994] 3 S.C.R. 1022, at p. 1049; Hunt v. T&N plc, [1993]
4 S.C.R. 289, at pp. 325-26 and 328; Morguard Investments Ltd. v. De Savoye,
[1990] 3 S.C.R. 1077, at pp. 1108-10.
[26]
This Court’s decision
in Van Breda sets out the refined and revised test for establishing the
requisite connection in tort claims. Writing for a unanimous Court, LeBel J. identified
four non-exhaustive presumptive connecting factors:
1.
The defendant is domiciled or resident in the
province;
2.
The defendant carries on business in the
province;
3.
The tort was committed in the province; or
4.
A contract connected with the dispute was made
in the province.
[27]
As LeBel J. noted,
“[a]ll presumptive connecting factors generally point to a relationship between
the subject matter of the litigation and the forum” where jurisdiction is
proposed to be assumed: para. 92. The existence of this relationship makes it
“reasonable to expect that the defendant would be called to answer legal
proceedings in that forum”: para. 92. The burden of establishing the
application of a presumptive factor in a given case lies with the party
asserting jurisdiction. There is no requirement that more than one factor be
shown to apply in a given case. The presumption arising from each
of these factors may be rebutted by the party resisting jurisdiction by
showing that there is no real relationship — or only a weak relationship —
between the subject matter of the litigation and the proposed forum: paras.
95-100; Joost Blom,
“New Ground Rules for Jurisdictional Disputes: The Van Breda Quartet”
(2012), 53 Can. Bus. L.J. 1, at pp. 9-10 and 14.
[28]
As Van Breda
makes clear, the underlying objective of all presumptive connecting
factors is to pacify the tension between flexibility and predictability, a
“constant theme” in the Canadian law of jurisdiction: para. 66; Tanya J.
Monestier, “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in
Canada” (2013), 36 Fordham Int’l L.J. 396, at p. 411.
[29]
Under Van Breda,
predictability is ensured by premising the assumption of jurisdiction on
objective, factual connecting factors, giving the parties “reasonable
confidence” as to whether jurisdiction will be assumed in a given case: para.
73; Monestier, at pp. 397-98 and 411.
[30]
Flexibility is ensured
by acknowledging “the need for fairness and justice to all parties engaged in
litigation” when selecting and applying the presumptive connecting factors: Van
Breda, at para. 75. In LeBel J.’s view, the list of presumptive connecting
factors must be updated “as the needs of the system evolve”: para. 82. Van
Breda did not purport to set out “a complete code of private international
law”; it specifically foresaw that the principles and factors governing
jurisdiction would be “developed as problems arise before the courts”: para.
68.
[31]
The four Van Breda
factors differ in the way they respectively seek to reconcile flexibility and
certainty. The fourth factor promotes certainty by premising the determination
of when a contract will be “made” in a given jurisdiction on the traditional
rules of contract formation: see Blom, at pp. 16-17; Monestier, at p. 428; Neophytou
v. Fraser (2015), 63 C.P.C. (7th) 13, at paras. 4-5; Eco-Tec Inc. v. Lu
(2015), 343 O.A.C. 140, at paras. 16-17.[5] These rules are well known, as are their exceptions,
limitations and governing principles. The parties’ ability to tailor these rules and principles also ensures
“reasonable confidence” as to when jurisdiction will or will not be assumed
under the fourth factor. They can, in other words, determine how and where a
given contract will be formed.
[32]
The fourth factor also
promotes flexibility and commercial efficiency. As seen in Van Breda,
all that is required is a connection between the claim and a contract that was
made in the province where jurisdiction is sought to be assumed. A “connection”
does not necessarily require that an alleged tortfeasor be a party to the
contract. To so narrow the fourth presumptive factor would unduly narrow the
scope of Van Breda, and undermines the flexibility required in private
international law.
[33]
Flexibility in applying
the fourth factor does not amount to jurisdictional overreach. Conflict rules
vary from one jurisdiction to another. In Quebec, for example, under art. 3148
of the Civil Code of Québec, Quebec authorities have jurisdiction over
an action in extra-contractual liability where a fault was committed in Quebec
or the injury was suffered there. Nonetheless, under art. 3139, if a Quebec
authority has jurisdiction to rule on the principal demand, it would also have
jurisdiction to rule on an incidental demand, which could include a third party
claim. In a case like the one before us — and subject to any forum non
conveniens argument — if the main contract had been made in Quebec and
governed by the laws of Quebec, Quebec would have jurisdiction not only over
Quebec lawyers sued in the principal demand, but also over any Ontario lawyers
sued by the Quebec lawyers in third party claims for any professional fault
allegedly committed in Ontario by the Ontario lawyers.
[34]
Further, the real and
substantial connection test has never been concerned with showing “the
strongest” possible connection between the claim and the forum where
jurisdiction is sought to be assumed: Van Breda, at para. 34.
[35]
Nor does the fact that
another forum may also be connected with the dispute undermine the existence of
a real and substantial connection. Van Breda expressly recognized that
there will be “situations in which more than one court might claim
jurisdiction”: para. 15. However, the question of whether another forum is more
appropriate plays no part in the analysis for assuming jurisdiction. This issue
is only relevant once jurisdiction has already been assumed, and where
the defendant seeks to convince the court that the other forum is “clearly more
appropriate” under the doctrine of forum non conveniens: Van Breda,
at paras. 101-2.
[36]
Because this case
engages the fourth presumptive connecting factor, namely whether a contract
connected with the dispute was made in Ontario, it is necessary to identify the
dispute. It must then be determined whether the dispute is connected to
a contract “made” in the province where jurisdiction is proposed to be assumed:
Van Breda, at para. 90.
[37]
The first step is
identifying the dispute.
[38]
The nucleus of the
claim against Cassels Brock, as well as that of Cassels Brock’s third party
claim against the local lawyers who signed certificates of independent legal
advice, relates to the claims that there was negligent legal advice about the
Wind-Down Agreements. It
cannot therefore seriously be contested that the dispute is a tort claim for
professional negligence.
[39]
The next question is
whether a contract connected with this dispute was made in Ontario: Van
Breda, at para. 90. I agree with the
motions judge and with the Court of Appeal that it was. In fact, at the motion
stage, the Quebec lawyers conceded that the Wind-Down Agreement was made in
Ontario. Only during oral argument before the Court of Appeal did the Quebec
lawyers change their position. But even in the absence of this
concession, no error was made by the motions judge or by the Court of Appeal
which would justify this Court’s intervention.
[40]
In Ontario, a contract
is formed based on an offer by one party, accepted by the other, or an exchange
of promises, supported by consideration: Jedfro Investments (U.S.A.) Ltd. v.
Jacyk, [2007] 3 S.C.R. 679, at para. 16; John D. McCamus, The Law
of Contracts (2nd ed. 2012), at pp. 31-32. Where the contracting
parties are located in different jurisdictions, the contract will be formed in
the jurisdiction where the last essential act of contract formation, such as
acceptance, took place: see McCamus, at pp. 77-78; see also S. M. Waddams, The
Law of Contracts (6th ed. 2010), at paras. 108-9.
[41]
In this case, the clear
conditions of acceptance, as well as the last essential act to contract
formation, were set out in the May 20, 2009 letter from Marc Comeau, which was
attached to the Wind-Down Agreement:
Any Wind-Down Agreements signed and
returned to GM Canada by the End of the Offer Period will not become effective
unless and until GM Canada provides written notice to those dealers that the
Acceptance Threshold Condition and any other required conditions have been met
or have been waived by GM Canada.
[42]
I agree with the Court
of Appeal that the last act essential to contract formation occurred at GM
Canada’s office in Oshawa, Ontario, where Marc Comeau accepted and signed the
Wind-Down Agreements that had been signed and returned by the dealers.
[43]
The letter dated May
20, 2009, states that the agreement would take effect when GM Canada “provides
written notice” to the terminated dealers who accepted its offer; it did not
require that the dealers receive the notice for the Agreement to take
effect. The notice merely confirmed that the conditions for the
Agreement to become effective had been met, which means that its receipt in
Quebec by the Quebec lawyers does not alter where the Agreement was made. As
Lauwers J.A. held, “the stipulated manner in which the [Wind-Down Agreements]
would become effective renders inapplicable the general rule that a contract
transmitted instantaneously is made in the jurisdiction where acceptance is
received”: para. 67. The Wind-Down Agreement was, therefore, “made” in Ontario,
the province where the claim was brought.
[44]
It is worth noting that nothing in Van Breda suggests that the
fourth factor is unavailable when more than one contract is involved, or that a
different inquiry applies in these circumstances. Nor does Van Breda
limit this factor to situations where the defendant’s liability flows
immediately from his or her contractual obligations, or require that the
defendant be a party to the contract: Pixiu Solutions Inc. v.
Canadian General-Tower Ltd., 2016 ONSC 906, at para. 28 (CanLII). It
is sufficient that the dispute be “connected” to a contract made in the
province or territory where jurisdiction is proposed to be assumed: Van
Breda, at para. 117. This merely requires that a defendant’s conduct brings
him or her within the scope of the contractual relationship and that the events
that give rise to the claim flow from the relationship created by the contract:
paras. 116-17.
[45]
The basis of the
Ontario courts assuming jurisdiction in Van Breda is illustrative. The
contract was not made between Ms. Van Breda and the defendant Club Resorts
Ltd., it was made between Club Resorts Ltd., an Ottawa travel agent, and Ms.
Van Breda’s husband. The travel agent’s business involved finding racquet sport
instructors for Club Resorts. Ms. Van Breda’s husband was a squash player. In
exchange for a few hours of tennis instruction to hotel guests, he and Ms. Van
Breda were given free bed and board at the resort. As a result of serious
injuries she suffered during her trip, Ms. Van Breda sued Club Resorts in tort.
[46]
This Court concluded
that the events giving rise to her claim flowed from the relationship created
by the contract between Ms. Van Breda’s husband and the Ottawa travel agent. The Court acknowledged that the accident happened at
the Cuban hotel managed by Club Resorts, and that Ms. Van Breda’s initial injuries
were suffered in Cuba. It also recognized that some of the potential defendants
resided there, and that a sufficient connection existed between Cuba and the
tort claim to support an action in that jurisdiction: Van Breda, at
para. 118. Nonetheless, the Court held that the existence of the contract
concluded in Ontario was
sufficient to establish a real and substantial connection between the resort
and Ms. Van Breda under the fourth presumptive connecting factor.
[47]
Here, the Wind-Down
Agreement is clearly connected to Cassels Brock’s third party claims against
the local lawyers. As noted, the Agreement itself contemplated and required the
involvement of the local lawyers. Valid acceptance of GM Canada’s offer required that each individual dealer return a signed copy of the
certificate of independent legal advice. The certificate required the signature of the local
lawyer retained by each dealer. The lawyer’s signature attested to his or her
having been retained by the dealer, having read the Wind-Down Agreement, and
having explained the nature and effect of the Agreement to each dealer. This
included an explanation of the releases, waivers and indemnification
obligations contained in the Agreement. Each lawyer was also required to
confirm his or her belief that the client dealer was fully advised about all of
these matters. This cannot be divorced from the quality of the legal
advice provided, and is inextricable from the third party claim. To use the
language of Van Breda, the local lawyers’ provision of legal advice
brought them within the scope of the contractual relationship between GM Canada
and the dealers.
[48]
Finally, Article 13 of
the Wind-Down Agreement expressly provides that the Agreement is governed by
Ontario law. Along with the facts that General Motors’ head office was located
in Ontario, that the bulk of the affected dealers were also located in Ontario,
and that “[t]he underlying structure of the business relationships and the
litigation are deeply related to Ontario” (para. 71), Lauwers J.A. found that
this too was a contextual factor in demonstrating that the Agreement is a
contract made in Ontario.
[49]
Cassels Brock has
therefore demonstrated a real and substantial connection between a contract
made in the province (the Wind-Down Agreement) and the dispute (the third party
negligence claim). The strength of this connection was not rebutted by the
Quebec lawyers.
[50]
The Ontario courts,
therefore, properly assumed jurisdiction over the claim. This makes it
unnecessary to accept Cassels Brock’s invitation to recognize a new, fifth
presumptive connecting factor relating to class actions, or to determine
whether jurisdiction could be assumed under the second Van Breda factor.
[51]
Finding that there is a
real and substantial connection does not automatically mean that a court will
assume jurisdiction over a claim: Van Breda, at paras. 100-102; Breeden,
at para. 22. Once jurisdiction is established, the party contesting
jurisdiction may raise the doctrine of forum non conveniens, and attempt
to “show why the court should decline to exercise its jurisdiction and displace
the forum chosen by the plaintiff”: Van Breda, at para. 103.
[52]
The burden is on the
defendant to demonstrate that a court of another jurisdiction has a real and
substantial connection to the claim and that this alternative forum is “clearly
more appropriate” than the one where jurisdiction may be assumed: Breeden,
at para. 37 (emphasis in original); and Van Breda, at para. 109
(emphasis added). This threshold will be met where, based on its
“characteristics”, the alternative forum “would be fairer and more
efficient” for disposing of the litigation: Van Breda, at para. 109. It
is not sufficient that the alternative forum merely be “comparable” to the
forum where jurisdiction has been found to exist: ibid. Forum non
conveniens is not concerned only with fairness to the party contesting
jurisdiction; it is also concerned with efficiency and convenience for the
proceedings themselves: para. 104.
[53]
Several non-exhaustive
factors were set out in Van Breda as being relevant to determining
whether forum non conveniens should be applied. These may vary depending
on the context, and include: the location of the parties and the witnesses; the
cost of transferring the case to another jurisdiction; the cost of declining to
stay the action; the possibility of conflicting judgments; and the impact of
declining jurisdiction on the conduct of litigation or on related parallel
proceedings: para. 110.
[54]
A motions judge’s
discretionary decision to refuse to decline jurisdiction on the basis of forum
non conveniens is entitled to considerable deference on appeal: Van
Breda, at para. 112. As this Court stated in Éditions Écosociété Inc. v. Banro Corp., [2012] 1 S.C.R. 636, “an appeal court should
intervene only if the motion[s] judge erred in principle, misapprehended or
failed to take account of material evidence, or reached an unreasonable
decision”: para. 41. Errors of law, as well as “clear and serious error[s]” of
fact may also give grounds for intervention: Van Breda, at para. 112.
There were no errors in the motions judge’s conclusion here, let alone any
warranting intervention.
[55]
In my view, the objective facts
and factors to be considered in the forum non conveniens analysis
confirm that the Quebec courts are not a “clearly more appropriate
forum” for the third party claims against the 32 Quebec firms. Following the motions judge’s decision, the
Ontario Superior Court of Justice already has jurisdiction over 118 other
lawyers or firms, including 67 Ontario-based lawyers added by Cassels
Brock’s third party action. The third party claims against the remaining 51 law
firms located outside Ontario will therefore be heard in Ontario.
[56]
This strongly weighs
against finding that the Quebec courts are a “clearly” more appropriate forum
for the 32 Quebec firms, especially in light of “the importance of having
claims finally resolved in one jurisdiction”: Currie v. McDonald’s
Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321 (C.A.), at para. 15.
[57]
Against all this, the
key factors on which the Quebec lawyers rely carry, with respect, little
weight. Witnesses for the third party claims will, in any event, come from both
Ontario and Quebec. Expert evidence on the law applicable to either the contract
or the negligence claim will be required no matter where the trial takes place.
[58]
Moreover, because the
third party claims involve a significant number of parties and require the
mobilization of significant judicial resources, those resources should be allocated and expended with a view
to making the litigation quicker, more economical and less complicated: Sable
Offshore Energy Inc. v. Ameron International Corp., [2013] 2 S.C.R.
623, at para. 1; Association
des parents de l’école Rose-des-vents v. British Columbia (Education), [2015]
2 S.C.R. 139, at para. 78.
[59]
Allowing the Quebec
third party claims to proceed in Ontario along with the 118 other law firms,
would clearly be a more efficient and effective solution. Adjudicating all the
third party claims in the same forum avoids the possibility of conflicting
judgments and duplication in fact-finding and legal analysis. While the third
party claims are not class claims, they will, as Lauwers J.A. noted, have much
in common:
Given the common
elements of the [Wind-Down Agreements], the [certificates of independent legal
advice] and the content of Ontario law, it seems to me that the core of the
legal advice that ought to have been given by local lawyers will be very
similar for each, subject to any relevant differences in the applicable
franchise legislation; such differences could still be addressed without resort
to individual determinations. Although there may be some variation in the
advice actually given and in the terms of the contracts for legal services,
there is no reason to think that the case management judge would not be able to
create efficient methods for adjudicating these issues, given the tools
available under the Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 25.
[para. 86]
[60]
Overall, therefore,
proceeding with all the third party claims before the Ontario courts will ensure
that they are resolved in a timelier and more affordable manner: Hryniak
v. Mauldin, [2014] 1 S.C.R. 87, at para. 28. All of this leads, as it
did in the prior proceedings, to the conclusion that Ontario should assume jurisdiction over all the third
party claims, including those involving the Quebec law firms.
[61]
I would dismiss the
appeal with costs.
The following are the reasons
delivered by
[62]
Côté J. (dissenting) — In
disputes involving an international or interprovincial aspect, jurisdiction is
a matter of crucial importance. It must be approached with rigour, or else the
cardinal values of order, certainty, and fairness will be jeopardized.
[63]
In Club Resorts Ltd.
v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, this Court outlined
four “presumptive connecting factors” which determine whether the courts of
Ontario are entitled to assume jurisdiction over a claim in tort. At the heart
of this dispute is Van Breda’s fourth connecting factor, which
provides Ontario with presumptive jurisdiction when “a contract connected with
the dispute was made in the province”: para. 90.
I.
Analysis
[64]
This case comes in the
wake of events in 2009, when a class action was commenced on behalf of 207
terminated General Motors of Canada Ltd. dealers. The terminated dealers
claimed that General Motors had coerced them into signing Wind-Down Agreements
in breach of Ontario franchise law, and that the respondent, Cassels Brock &
Blackwell LLP, was negligent in providing legal advice to the Canadian
Automobile Dealers Association on those Wind-Down Agreements, in addition to
being in a conflict of interest.
[65]
After this class action
was certified, Cassels Brock instituted proceedings in Ontario, by way of third
party claims, for contribution and indemnity against the 150 law firms that had
provided local dealers, within their respective provinces, with independent
legal advice on those same Wind-Down Agreements. As pleaded, the underlying
cause of action of these third party claims sounds in tort: Cassels Brock
alleges that these law firms each provided negligent legal advice to their
clients. It is noteworthy that no legal action was brought against these law
firms by the local dealers themselves.
[66]
The law firms based in
Quebec, as well as the two national law firms having offices both in Quebec and
in Ontario, challenge Ontario’s jurisdiction over the third party claims
against them. Cassels Brock argues in response that Van Breda’s
fourth connecting factor is engaged, since the Wind-Down Agreements were “made
in” Ontario and are sufficiently “connected with” these disputes. The Quebec
law firms, for their part, argue that the Wind-Down Agreements were not “made
in” Ontario and would not, in any event, be sufficiently “connected with” these
disputes.
[67]
I agree with the Quebec
law firms on both counts, and would therefore overturn the decisions of the
Ontario Superior Court of Justice and the Court of Appeal: see 2013 ONSC 2289,
51 C.P.C. (7th) 419, and 2014 ONCA 497, 120 O.R. (3d) 598.
[68]
With regards to the
first issue, I am of the view that the relevant Wind-Down Agreements, in
respect of the Quebec dealers, were “made in” Quebec. The Agreements only
became binding contracts once General Motors had provided its terminated
dealers with notice that it had waived its “Acceptance Threshold Condition”.
Notice of this final acceptance was provided to the Quebec dealers in Quebec
and the Agreements for those dealers were therefore formed in that province,
and not in Ontario.
[69]
With regards to the
second issue, I am of the view that Cassels Brock has misconstrued what it
means for a contract to be “connected with” a claim in tort. Cassels Brock has
essentially asked this Court to divorce Van Breda’s fourth
connecting factor from its limited, underlying rationale, all in the name of a
“holistic approach” to jurisdiction. This unduly broad approach will surely
result in jurisdictional overreach. What is more, this so-called “holistic
approach” will reintroduce persistent uncertainties in an area of the law that
has always valued clarity and predictability.
[70]
Nevertheless, the
courts of Ontario have jurisdiction over the remaining claims against the two
national law firms with offices in both Quebec and Ontario on the basis of Van Breda’s
second connecting factor, that the “defendant carries on business in the
province”: para. 90. However, I am of the view that whatever jurisdiction
the courts of Ontario have over these remaining claims should be declined on
the basis of forum non conveniens.
A.
Where Were the Wind-Down Agreements “Made”?
[71]
I am of the view that
the Wind-Down Agreements were not “made in” Ontario.
[72]
Apparently, the Quebec
law firms did not dispute the place of formation at first instance. However,
leaving aside the possibility of withdrawing such an apparent concession on a
question of law or mixed law and fact, this concession should be accorded
little weight. Indeed, in the end, it merely reflects one party’s legal
opinion: see e.g. Phipson on Evidence (15th ed. 2000), at
para. 28-11, cited in Serra v. Serra, 2009 ONCA 105, 93
O.R. (3d) 161, at para. 111. Moreover, this important and contentious
issue — i.e. the place of contract formation — should not be disregarded simply
because it was conceded at first instance. After all, this issue was argued
before the Ontario Court of Appeal, and Lauwers J.A. considered the
argument without hesitation. It was also the subject of a fulsome debate before
this Court. It must therefore be addressed.
[73]
Like my colleague
Abella J., I accept that in the present case, the law governing contract
formation is the law of Ontario. As such, a contract will be considered formed
where the last essential act of contract formation takes place — in other
words, where final acceptance is notified: see S. M. Waddams, The
Law of Contracts (6th ed. 2010), at paras. 108-9.
[74]
In this case, on
General Motors’ instruction, the Quebec dealers returned their signed
acceptances of the Wind-Down Agreements to General Motors’ offices in Pointe-Claire,
Quebec. However, General Motors had previously outlined certain subsequent
conditions that had to be met before the Wind-Down Agreements could become
effective. These were described in Article 1 of each Wind-Down Agreement, as
well as in a covering letter signed by Marc Comeau, General Motors’ Vice
President of Sales, Service & Marketing. The covering letter first states:
Our offer, as set out in the Wind-Down
Agreement, is conditional upon all of the Non-Retained Dealers accepting the
offer (the “Acceptance Threshold Condition”) and executing and
delivering their respective Wind-Down Agreements to GM Canada on or before May
26, 2009 at 6:00 pm EST (the “End of the Offer Period”). GM Canada
reserves the right, in its discretion, to waive the Acceptance Threshold
Condition. [Emphasis in original deleted.]
[75]
The covering letter
goes on to state that:
Any Wind-Down Agreements signed and
returned to GM Canada by the End of the Offer Period will not become
effective unless and until GM Canada provides written notice to those
dealers that the Acceptance Threshold Condition and any other required
conditions have been met or have been waived by GM Canada. [Emphasis added.]
[76]
General Motors did not
receive acceptances from all of its terminated dealers. However, on
May 30, 2009, Mr. Comeau notified the terminated dealers by e‑mail
that General Motors had decided to waive its acceptance threshold condition and
that the Wind-Down Agreements were, as of that moment, effective.
Mr. Comeau’s letter to the terminated dealers states as follows:
While not all Non-Retained Dealers
accepted our conditional offer, we are very pleased to inform you that a
substantial number of the Non-Retained Dealers have accepted GM Canada’s
conditional offer to enter into the Wind Down Agreement. This letter will serve
as notice pursuant to Section 1 of the Wind Down Agreement that GM Canada is
hereby waiving the Acceptance Threshold Condition and, accordingly, the Wind
Down Agreement that you executed and delivered to GM Canada shall become
effective as of today, May 30, 2009. GM Canada will be executing and
delivering to you a fully executed copy of the Wind Down Agreement in the near
future for your records.
[77]
This notice did not
merely confirm that General Motors’ conditions had been met. Rather, this
notice of final acceptance was itself an essential condition for the Wind-Down
Agreements to become binding. Echoing the provisions of the Agreements
themselves, Mr. Comeau’s first letter clearly states that each Wind-Down
Agreement was not effective “unless and until GM Canada provides written
notice to those dealers that the Acceptance Threshold Condition and any other
required conditions have been met or have been waived by GM Canada” (emphasis
added). In other words, without this notice of waiver — this final acceptance —
there is no binding agreement. In this light, General Motors’ notice was
clearly an essential act of contract formation. More than that, it was the last
essential formative act. As Mr. Comeau’s letter on May 30 makes
clear, the Wind-Down Agreements became effective as of the date of notice.
[78]
My colleague is of the
view that General Motors’ notice only confirmed that the relevant conditions
had been met. With respect, I have difficulty squaring this reading with the
express terms of Mr. Comeau’s covering letter and Article 1 of the
Wind-Down Agreements, which state that the Agreements will not be effective
unless and until this final notice is provided.
[79]
The only outstanding
issue, then, is where this notice would have been provided. In Ontario,
it is well established that when acceptance of a contract is transmitted
instantaneously, acceptance will be considered notified in the place where it
is received: Eastern Power Ltd. v. Azienda Comunale Energia & Ambiente
(1999), 178 D.L.R.
(4th) 409 (Ont. C.A.), at paras. 23 and
27-29, leave to appeal refused, [2000] 1 S.C.R. xi, citing Brinkibon Ltd. v.
Stahag Stahl und Stahlwarenhandelsgesellschaft m.b.H., [1983] 2 A.C. 34 (H.L.); Inukshuk Wireless
Partnership v. 4253311 Canada Inc., 2013 ONSC 5631, 117 O.R. (3d) 206, at paras. 25-29; Christmas v. Fort McKay
First Nation, 2014 ONSC 373, 119 O.R. (3d) 21, at para. 18.
[80]
In this case, General
Motors’ notice of final acceptance was transmitted by e-mail, an instantaneous
form of communication, to its dealers in Quebec. As such, the relevant
Wind-Down Agreements in respect of the Quebec dealers would have been formed in
Quebec — the same province, I would add, where General Motors’ initial offer
was received by the Quebec dealers, and where General Motors received the
dealers’ signed acceptances. Put simply, these are not contracts “made in”
Ontario. They cannot therefore ground jurisdiction for the purposes of Van Breda’s
fourth presumptive connection.
[81]
Finally, to support her
conclusion that the Wind-Down Agreements were “made in” Ontario, my colleague
Abella J. appeals to certain extrinsic “contextual” considerations, like
the Wind-Down Agreements’ choice of law clause, and the fact that the bulk of
the terminated dealers, as well as General Motors’ head office, are located in
Ontario: para. 48. However, these contextual factors have nothing
to do with where the Quebec dealers’ Agreements were formed. Furthermore, my
colleague’s appeal to these extrinsic considerations is at odds with both her
view that “[t]he fourth factor promotes certainty by premising the
determination of when a contract will be ‘made’ in a given jurisdiction on the
traditional rules of contract formation”, as well as her view that the parties
to a contract can “determine how and where a given contract will be formed”:
para. 31. Indeed, if these contextual considerations are given weight in
the analysis, the parties’ own desires regarding where their contract is formed
risk becoming irrelevant. This cannot be.
B.
Are the Wind-Down Agreements “Connected With”
the Third Party Claims in Tort?
[82]
Even if the Wind-Down
Agreements had been concluded in Ontario, they are not “connected with” these
claims for professional negligence in the manner required by Van Breda’s
fourth connecting factor. In my view, this conclusion is supported by the way
the fourth connecting factor was described, justified and applied in
LeBel J.’s reasons.
[83]
At the outset, it is
worth distinguishing Cassels Brock’s third party claims from the dispute in Van Breda.
In that case, a professional squash player, Mr. Berg, had entered into a
contract with Club Resorts Ltd. in Ontario through a local representative. The
place where the contract was “made” was not in dispute. Club Resorts was to provide
Mr. Berg and his wife, Ms. Van Breda, with room and board and other
services at the SuperClubs Breezes Jibacoa resort it managed in Cuba. In
exchange, Mr. Berg was to provide two hours’ worth of tennis lessons per
day for the resort’s other guests. Ms. Van Breda was brought within the
scope of this contractual relationship since “[t]he benefit of this contract”
was “extended to” her: para. 116. On their first day there, a metal
structure collapsed on the resort’s beach, causing Ms. Van Breda to
become paraplegic. She later sued Club Resorts in Ontario.
[84]
In Van Breda,
there was only one contract that was connected to the dispute, the
contract concluded in Ontario between Club Resorts and Mr. Berg. This
contract was integral to Club Resorts’ liability in tort. The duty of care Club
Resorts owed to Ms. Van Breda flowed immediately from its
contractual obligations towards Mr. Berg. Furthermore, the very same
conduct which would have constituted a breach of the Ontario contract —
triggering Club Resorts’ liability in contract towards Mr. Berg — would
have also constituted a separate tortious act — triggering Club Resorts’
liability in tort towards Ms. Van Breda.
[85]
For Cassels Brock’s
third party claims, the situation is entirely different. Here, there are two
kinds of contracts that are involved. First and foremost, there are the
retainer agreements between the Quebec dealers and their various legal counsel.
Second, there are the Wind-Down Agreements, the subject of the Quebec lawyers’
legal advice. Van Breda, concerned as it was with a case
featuring only one potentially connected contract, never said — and in my view,
cannot be read as saying — that simply any contract connected with the
dispute can support jurisdiction under the fourth factor.
[86]
Moreover, the Quebec
lawyers were never brought within the scope of the contractual relationship
between General Motors and the dealers. The Quebec lawyers were not parties to
the Wind-Down Agreements, they never owed any obligations under those
Agreements, nor were they owed any benefit under those Agreements, as was the
case in Van Breda. Instead, their obligations flow entirely from
their retainer agreements. As I will discuss below, the fact that these lawyers
provided signed independent legal advice certificates does not, on its own,
bring them within the scope of the Wind-Down Agreements. The most that
can be said is that the Wind-Down Agreements contributed to the factual
circumstances in which entirely separate faults or breaches — i.e. the
provision of negligent legal advice — were alleged to have been committed.
[87]
This distinction makes
all the difference. In my view, the scope of Van Breda’s fourth
connecting factor should be limited to claims in tort where the defendant’s
liability in tort flows immediately from his own contractual obligations, and
where that contract was “made in” Ontario. This may represent a narrow
interpretation, but it reflects the specific authority this Court relied on in
establishing the fourth connecting factor in Van Breda.
[88]
It is worth remembering
that this fourth connecting factor describes a basis of jurisdiction that was,
at that time, unprecedented: see e.g. V. Black, “Simplifying Court Jurisdiction
in Canada” (2012), 8 J. Priv. Int. Law 411, at pp. 425-26.
Traditionally, the only forum that has subject matter jurisdiction over a claim
in tort is the forum where the tort was committed. I am aware of no
conflicts regime that accepts that a forum has subject matter jurisdiction over
a claim in tort simply because a contract “connected with” that claim was
formed there. In this vein, one author has called the fourth connecting factor
“odd” and “in need of explanation” (Black, at p. 426), while in the
present case, the motions judge Belobaba J. said that it lies on a “somewhat
shaky foundation”: para. 9.
[89]
In identifying this
fourth connecting factor, LeBel J. relied on only one authority for
support, i.e. rule 17.02(f)(i) of the Rules of Civil Procedure,
R.R.O. 1990, Reg. 194: Van Breda, at para. 88.
LeBel J. recognized that the Ontario rules for service ex juris are
not conflicts rules per se, although he stressed that they “offer
guidance for the development of this area of private international law”, since
they represent the “experience drawn from the life of the law” and are
“generally consistent” with approaches and recommendations to conflicts law
made elsewhere: para. 83; see also J. Walker, Castel & Walker:
Canadian Conflict of Laws (6th ed. (loose-leaf)), at p. 11‑44.
However, rule 17.02(f)(i) only provides a basis for service outside of the
jurisdiction for claims “in respect of a contract”, and not for any claims in
respect of a tort: T. J. Monestier, “(Still) a ‘Real and Substantial’
Mess: The Law of Jurisdiction in Canada” (2013), 36 Fordham Int’l L.J. 396,
at pp. 424-26.
[90]
In my view,
LeBel J.’s reliance on rule 17.02(f)(i) — despite the fact that such
a rule does not expressly provide a basis for service in respect of a tort
claim — reveals the fourth connecting factor’s purpose and limitations: the
fourth factor only provides jurisdiction over claims where the defendant’s
liability in tort flows immediately from the defendant’s own contractual
obligations. Indeed, in these kinds of cases, the claim in tort will often
resemble a claim in contract. I expect that this may occur in two kinds of
situations, although there may be others.
[91]
First, there are cases
of concurrent liability, where a defendant’s failure to exercise reasonable
skill and care may constitute, at once, both a breach of contract and a tort:
see e.g. J. D. McCamus, The Law of Contracts (2nd ed. 2012),
at pp. 739-40; BG Checo International Ltd. v. British Columbia Hydro
and Power Authority, [1993] 1 S.C.R. 12. When a lawyer lacks reasonable
care and diligence in advising his client, for instance, he may be liable
towards his client in tort, in contract, and under the law of fiduciary
obligations. As Cromwell J. observed in Galambos v. Perez, 2009 SCC
48, [2009] 3 S.C.R. 247, a claim that a solicitor-client contract was breached
for lack of diligence “is essentially a differently labelled repetition of the
claim in negligence”: para. 34.
[92]
If a court can assume
jurisdiction over a claim in contract on the basis that the contract that was
breached was formed in the jurisdiction, then that same court should also
possess jurisdiction over any concurrent claim in tort. After all, as this
Court recognized in Van Breda, if “a connection exists in respect
of a factual and legal situation, the court must assume jurisdiction over all
aspects of the case”: para. 99.
[93]
Second, and more
importantly, there may be cases where a third party beneficiary to a contract
has a claim in tort for acts which occurred in the performance — and potential
breach — of that contract: see e.g. A. Swan, Canadian Contract Law (2nd
ed. 2009), at p. 178.
[94]
On the basis of what
was alleged in the statement of claim, Van Breda appears to
represent this kind of case. However, such a situation can also occur in the
context of providing legal services. For instance, if a solicitor is instructed
by a testator to make changes to a will and the solicitor neglectfully fails to
make the changes before the testator dies, the would-be beneficiaries may sue
in tort: Earl v. Wilhelm, 2000 SKCA 1, 183 D.L.R. (4th) 45, at
paras. 32-42; White v. Jones, [1995] 2 A.C. 207 (H.L.), at
pp. 259-60 and 265-66; see also Whittingham v. Crease & Co. (1978),
88 D.L.R. (3d) 353 (B.C.S.C.).
[95]
In these cases, the contract
is at the very root of the defendant’s liability in tort. The contract does not
simply contribute to the factual circumstances in which an entirely separate
tort is committed. Rather, the defendant’s breach of contract and his tort are indissociable.
The duty of care owed to the third party beneficiaries flows immediately from
that contractual relationship: White, at pp. 274-76, per
Lord Browne-Wilkinson, cited approvingly in Earl, at
paras. 39-41. Moreover, in these cases, the defendant in tort will
necessarily be a party to the contract formed in that jurisdiction, further
strengthening that forum’s connection to the dispute. Finally, it would fly in
the face of order and fairness to allow a party to the contract to sue the
defendant in the jurisdiction where the contract was formed, but to deny that
same right to the third party beneficiary suing that same defendant in tort.
[96]
Establishing
jurisdiction over these kinds of claims in tort represents, in my view, the
underlying rationale of Van Breda’s fourth connecting factor. It is
what makes this fourth factor both a defensible and a desirable conflicts rule.
In this light, it should be clear that this approach to applying the fourth
connecting factor is not a retreat from this Court’s holding in Van Breda.
Instead, it simply clarifies the fourth factor’s meaning and justification.
[97]
My colleague
Abella J. adopts a broader interpretation, one which aligns with the
“holistic approach” to jurisdiction urged by Cassels Brock. In my colleague’s
view, Van Breda recognized an entirely new basis of jurisdiction,
one which has no near recognized equivalent in the rules for service ex
juris or elsewhere. This expansive reading of Van Breda simply
cannot be reconciled with LeBel J.’s pronouncement that courts can only
recognize new connecting factors if they are similar to established bases of
jurisdiction, if they have been recognized in case law or in statute law, or if
they have been recognized as a basis of jurisdiction in the private
international law of other similar legal systems: para. 91. To be sure, I
believe that this expansive interpretation has other shortcomings as well. I
will describe these more fully in the sections below.
[98]
On the restrained
approach I have described above — which in my view represents the only logical
path forward — the courts of Ontario clearly do not have jurisdiction over
Cassels Brock’s third party claims.
[99]
The only contracts that
could possibly be close enough to the dispute between Cassels Brock and the
Quebec lawyers are the retainer agreements concluded between the Quebec lawyers
and their clients. The Wind-Down Agreements are simply too remote. The defendants
are not parties to the Wind-Down Agreements, nor are they being sued in tort
for actions committed in the performance of these Agreements. The most that can
be said is that each Wind-Down Agreement contributed to the factual
circumstances in which an entirely separate tort was allegedly committed.
[100]
However, this tort
would have been committed in Quebec, by Quebec-based lawyers, harming their
Quebec-based clients, in the course of fulfilling their professional
obligations which flow from retainer agreements concluded in Quebec. By this, I
do not mean to imply that only the forum with the strongest possible
connection can assume jurisdiction. I simply wish to stress that none of
the facts underlying this dispute and relating to the defendants’ potential liability
occurred in Ontario.
C.
The Broader Approach to Van Breda’s Fourth
Connecting Factor
[101]
It should be clear, by
now, that I respectfully disagree with the broad scope given to Van Breda’s
fourth connecting factor by my colleague Abella J.
[102]
In my view, this broad
and open-ended approach divorces the fourth connecting factor from its specific
and limited foundations. In doing so, this broader approach confers
jurisdiction in a case where Ontario simply has no real or substantial
connection with the dispute. It also muddies an area of the law that should be
kept clear and predictable.
(1)
Jurisdictional Overreach
[103]
As I have said, this
broad and open-ended approach will lead to jurisdictional overreach — in this
case, and in others.
[104]
Under normal
circumstances, these claims would have been instituted by the terminated Quebec
dealers against their Quebec lawyers, for faults which would have been
committed in Quebec, in the course of fulfilling contractual obligations which
flow from retainer agreements concluded in Quebec. How could the resulting
dispute possibly be connected to the province of Ontario?
[105]
In response, Cassels
Brock has stressed the importance of two links between the Wind-Down Agreements
and these third party claims for contribution and indemnity, related to
professional negligence.
[106]
First, there is the
fact that the Wind-Down Agreements expressly required each dealer to obtain
independent legal advice before accepting General Motors’ offer. However, this
requirement to obtain legal advice is entirely unrelated to the actual quality
of the legal advice that was obtained, and it is the quality of this advice
that forms the basis of each claim. It is also worth noting that such a
requirement to obtain independent legal advice is commonly inserted into
agreements where the terms are dictated by one party. This routine requirement
should not have the effect of supporting the assumption of jurisdiction over
claims in professional negligence by the courts of the province in which the
agreement that is the subject of the legal advice happens to have been entered
into.
[107]
In my view, it is clear
that this requirement, imposed on the dealers, to obtain independent legal
advice, and to confirm that such advice had been given, does not bring the
Quebec lawyers within the scope of the dealers’ contractual relationship with
General Motors, as is required by Van Breda: paras. 116-17. In
that case, LeBel J. found that Ms. Van Breda was brought within
the scope of Mr. Berg’s contractual relationship with Club Resorts because
she was owed a benefit under Mr. Berg’s agreement: para. 116. In this
case, the Quebec lawyers owe nothing and are owed nothing under the Wind-Down
Agreements. Moreover, the requirement that the dealers provide General Motors
with certificates confirming the receipt of independent legal advice was simply
a matter of due diligence. It permitted General Motors to secure proof, for its
own purposes, that its dealers had obtained advice on its standard-form offer.
The signing of this certificate simply does not bring these lawyers within the
scope of this contractual relationship.
[108]
I would add that the
fragility of this alleged connection is all the more obvious when compared to
established bases of jurisdiction — for instance, the place where the tort was
allegedly committed, or the place where the defendant’s contractual obligations
were to be performed.
[109]
Second, Cassels Brock
argues that the Wind-Down Agreements are inextricably linked to the Quebec
lawyers’ liability, since in each case the allegedly negligent legal advice was
about the Wind-Down Agreement. In my view, there is nothing “real” or
“substantial” about this connection either. Every day, lawyers advise local
clients on contracts that will eventually be formed in — and be subject to the
law of — another province or state. If these contracts are accepted as a fount
of jurisdiction, then local lawyers advising their local clients on such
contracts could be sued for professional negligence wherever the contracts
happen to be entered into. In my view, this cannot be. There could be no
clearer evidence of jurisdictional overreach.
[110]
Simply put, the only
contracts that are capable of supporting the assumption of jurisdiction in this
case are the retainer agreements between the Quebec lawyers and their clients,
the Quebec dealers. These retainers were all concluded in Quebec, the same
province where the lawyers’ services were to be provided, where the breaches or
faults would have occurred, and where the damages would have been suffered. The
Wind-Down Agreements, by contrast, are too remote. It is also no speculation to
say that, had the Quebec dealers brought actions for damages against their own
lawyers, it is unlikely that they would have instituted proceedings in Ontario.
[111]
In light of all of
this, I am of the view that the broader approach to the fourth connecting
factor proposed by Cassels Brock and adopted by my colleague Abella J.
leads to jurisdictional overreach.
[112]
This conclusion is
supported by the fact that every other jurisdiction I have surveyed and that I
discuss below — including some “equally concerned about order and fairness as
our own” (Chevron Corp. v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69, at
para. 58) — would not have assumed subject matter jurisdiction over the
underlying cause of action against the Quebec law firms in these circumstances.
[113]
The Uniform Court
Jurisdiction and Proceedings Transfer Act (“CJPTA”) (online)
provides that a province will only have a presumptively real and substantial
connection over a claim in tort if the tort was committed in the province:
s. 10(g). As this Court has stressed before, the CJPTA is an
important Canadian benchmark: see Van Breda, at paras. 40-41; Breeden
v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666, at para. 28; and Teck
Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R.
321, at paras. 21-22. It was proposed by the Uniform Law Conference of
Canada as an attempt to give meaning to the real and substantial connection
test in a variety of circumstances, and forms the basis of provincial
legislation in British Columbia, Saskatchewan, Nova Scotia and the Yukon: Court
Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28; The
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).
[114]
For its part, the Council
Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction
and the recognition and enforcement of judgments in civil and commercial
matters, [2001] O.J. L. 12/1 (the “Brussels Regulation I”), only
provides subject matter jurisdiction over a claim “in matters relating to tort”
in the courts “for the place where the harmful event occurred or may occur”:
art. 5(3). The Brussels Regulation I is an important
international benchmark, as it applies to all European Community Member States
with the exception of Denmark, in cases where the defendant is domiciled in any
one of those Member States: see J. Fawcett and J. Carruthers, Cheshire,
North & Fawcett Private International Law (14th ed. 2008), at
pp. 200 and 204-5.
[115]
Finally, under the Civil
Code of Québec (“C.C.Q.”), Quebec authorities will only have subject
matter jurisdiction over an action in extra-contractual liability where “a
fault was committed in Québec” or where the “injury was suffered in Québec”:
art. 3148 para. 1(3) C.C.Q.
[116]
I would add that
neither the CJPTA, the Brussels Regulation I, nor the C.C.Q.
even accept that a claim in contract can proceed in a jurisdiction
merely because the contract was concluded there. Those instruments prefer to
accord subject matter jurisdiction to the place where the defendant’s
contractual obligation was to be performed: s. 10(e)(i) CJPTA;
art. 5(1) Brussels Regulation I; art. 3148 para. 1(3) C.C.Q.
[117]
In response to these
concerns of jurisdictional overreach, my colleague offers up only one line of
defence. She suggests that, under art. 3139 of the C.C.Q., a Quebec
authority will always have jurisdiction over an incidental claim, including a
third party claim, if it has jurisdiction over the principal demand. And so, my
colleague implies, it would not be overreaching for the courts of Ontario to
have jurisdiction over the third party claims against the Quebec law firms in
this case, given that the courts of Ontario have jurisdiction over the
principal action against Cassels Brock.
[118]
This argument simply
fails to respond to my concern. This Court has not been asked to recognize, in
the common law, an equivalent to art. 3139 of the C.C.Q. The issue
before this Court is whether the subject matter of these third party claims is
sufficiently connected with the province of Ontario. Nothing in art. 3139
of the C.C.Q. speaks to this issue.
[119]
It is worth recalling
that art. 3139’s unique purpose is “to ensure the efficient use of
juridical resources . . . by fostering the joinder of proceedings”: GreCon
Dimter inc. v. J.R. Normand inc., 2005 SCC 46, [2005] 2 S.C.R. 401, at
para. 30. As such, art. 3139, a “product of domestic procedural
considerations” (ibid.), lends no support for my colleague’s
conclusion that there is a sufficiently strong connection between the subject
matter of these third party claims and the province of Ontario. Rather,
art. 3139 reflects the sort of fairness and efficiency concerns that,
after Van Breda, have no role to play in establishing jurisdiction. As
LeBel J. remarked:
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. [Emphasis added; para. 82.]
[120]
Finally, my colleague’s
interpretation of art. 3139 risks pre-emptively settling, in obiter,
a question of Quebec law that was not before this Court. It is not enough that
a claim be incidental to a principal action for art. 3139 to be engaged.
If there was simply no connection between the incidental action and the
forum seized of the principal action, art. 3139 would be at risk of
running afoul of the constitutional limitations placed on the jurisdiction of
the courts of the Canadian provinces: see e.g. Van Breda, at
paras. 21-22 and 31-32, citing G. Goldstein and E. Groffier, Droit
international privé, vol. I, Théorie générale (1998), at
p. 47. In this vein, LeBel J. in GreCon stressed that, while
art. 3139 “does not mention this
factor expressly, there must be some connexity between the principal action and
the incidental action”: para. 31. He added that art. 3139 has to be assessed in light of private
international law imperatives, such as “the need to avoid enlarging the
jurisdiction of states unduly”: para. 30. Precisely what this means
strikes me as an important and unresolved issue, one that this Court should not
settle without fulsome debate.
[121]
In the end, as I have
said, the proposed broader approach to the fourth connecting factor risks
supporting the assumption of jurisdiction by the courts of Ontario and other
common law provinces where there is simply no convincing connection between the
province and the subject matter of the dispute. A narrower approach is in my
view required.
(2)
Certainty and Predictability
[122]
As I see it,
this broader approach also jeopardizes the certainty and predictability that
was promised when Van Breda’s presumptive bases of jurisdiction
replaced the discretionary list of factors outlined in Muscutt v. Courcelles
(2002), 60 O.R. (3d)
20 (C.A.).
[123]
On
my restrained approach, it should always be clear when this fourth connecting
factor can serve as a basis for jurisdiction. By contrast, my colleague’s
approach amounts to an open invitation for litigants to engage in long-winded
jurisdictional debates, since the words “connected with” and “connection” are notoriously flexible and
fact-specific. It is worth remembering that it was the vagueness of the word
“connection” that led some authors to criticize the “real and substantial
connection” test for being “too loose and unpredictable to facilitate an
orderly resolution of conflicts issues”: Van Breda, at para. 30,
citing J.-G. Castel, “The Uncertainty Factor in Canadian Private
International Law” (2007), 52 McGill L.J. 555, and J. Blom and
E. Edinger, “The Chimera of the Real and Substantial Connection Test”
(2005), 38 U.B.C. L. Rev. 373. Echoing that criticism after Van Breda,
some authors expressed the view that the fourth connecting factor “would
seem in need of explanation”: Black, at p. 426.
[124]
Small variations of the
facts of the case at bar illustrate this point. If independent legal advice was
required for multiple contracts concluded in different jurisdictions, the
parties would have had to spar over whether any one of those contracts could
ground a claim in professional negligence. Future litigants may also wonder
whether the requirement of obtaining independent legal advice was actually
necessary to establish a connection between the contract and the dispute, or
whether simply providing negligent advice on such a contract is sufficient.
[125]
Future cases with
entirely different facts will surely yield other fine-grained debates about the
sufficiency of the contract’s connection. These will compromise parties’
ability “to predict with reasonable confidence whether a court will assume
jurisdiction in a case with an international or interprovincial aspect”, as
LeBel J. stressed they must be able to do: Van Breda, at
para. 73.
[126]
My colleague suggests
that the fourth connecting factor achieves sufficient certainty by premising
the determination of where a contract will be “made” on the traditional rules
of contract formation: para. 31. In my colleague’s view, once parties are
able to determine where a contract will be formed, they will also be able to
determine with “reasonable confidence” when jurisdiction can or cannot be
assumed under the fourth factor.
[127]
I respectfully
disagree. If the parties are not able to predict with certainty which
contracts will be “connected with” a potential tort claim, their ability to
predict where any particular contract will be formed will be of little
assistance. More troublingly still, under my colleague’s approach, the
defendant in tort may not even be a party to the contract, and there is no
reason why we should expect that individuals who are not parties to a contract
will know, or will be able to predict, where any given contract will be formed.
[128]
The need for certainty
and predictability in shaping conflicts rules can hardly be overstated. As
La Forest J. stressed in Tolofson v. Jensen, [1994] 3 S.C.R.
1022, “[o]ne of the main goals of any conflicts rule is to create certainty in
the law”: p. 1061. This yearning for “fixed, clear and predictable”
conflicts rules has long guided this Court, and has been urged by a number of
authors: T. J. Monestier,
“A ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2007), 33 Queen’s
L.J. 179, at p. 192; Castel;
Blom and Edinger.
[129]
Among other benefits,
“[c]lear application of law promotes settlement” (Tolofson, at
p. 1062) and discourages what my colleague Gascon J. has called the
“needless and wasteful jurisdictional inquiries that merely thwart the
proceedings from their eventual resumption”: Chevron Corp., at
para. 69. Like Gascon J., I am of the view that courts “should
exercise care in interpreting rules and developing legal principles so as not
to encourage unnecessary” jurisdictional motions: G. D. Watson and
F. Au, “Constitutional Limits on Service Ex Juris: Unanswered Questions
from Morguard” (2000), 23 Adv. Q. 167, at p. 205, cited in Chevron
Corp., at para. 69.
[130]
Of course,
LeBel J. did observe that “striking a proper balance between flexibility
and predictability, or between fairness and order, has been a constant theme in
the Canadian jurisprudence”: Van Breda, at para. 66. However,
LeBel J. went on to note that “in recent years” the preferred approach to
the law of jurisdiction in Canada “has been to rely on a set of specific
factors, which are given presumptive effect”: para. 75 (emphasis added).
[131]
Writing for the entire
Court, LeBel J. explained this modern preference by outlining what I view
to be a fundamental proposition in jurisdictional matters — that while
“[j]ustice and fairness are undoubtedly essential purposes of a sound system of
private international law”, those objectives “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”:
Van Breda, at para. 73 (emphasis added). As such, “[p]arties must
be able to predict with reasonable confidence whether a court will assume
jurisdiction in a case with an international or interprovincial aspect”:
para. 73 (emphasis added).
[132]
In LeBel J.’s
view, the four connecting factors were meant to be “specific”, not flexible and
diffuse. It must be remembered that Van Breda sought to put an end
to a “framework for the assumption of jurisdiction” that was “unstable, ad
hoc” and “made up ‘on the fly’ on a case-by-case basis”: para. 73.
Nowhere in his reasons does LeBel J. stress the need to avoid a
disciplined and rigorous approach to the four connecting factors. After all,
courts may always identify new presumptive connecting factors in order
to adapt the law “as the needs of the system evolve”: para. 82.
(3)
Potential Implications on the Practice of Law
[133]
In addition, one must
not ignore that there may be harmful commercial implications that flow from a
broader approach to the fourth connecting factor.
[134]
As I have said,
jurisdiction matters. In the context of this case, an expansive approach to
jurisdiction means that whenever a lawyer’s advice is required before his
client can accept an offer, that lawyer may later be sued for professional
negligence wherever the contract on which he provided legal advice is
ultimately formed, regardless of where his contract for legal services was
entered into, and where his services were provided. It is worth remembering
that once jurisdiction is deemed to exist, it can only be declined in the
clearest of cases: Van Breda, at para. 109.
[135]
With respect, my
colleague’s position risks causing, in the end, certain negative repercussions
on the practice of law itself. Where a lawyer’s advice is required before a
contract can be concluded, the lawyers who are retained to provide advice may
feel conflicted, since they will likely have a personal stake in where their
client’s contract is entered into. Our modern-day, cosmopolitan legal practice
may even be impeded, a risk that is aggravated by the fact that a lawyer’s
professional liability insurance is often subjected to lower coverage for
claims instituted outside the lawyer’s own jurisdiction. As an illustration of
this, during oral argument, counsel for the Quebec law firms reminded the Court
that the Barreau du Québec’s liability insurance policy indemnifies lawyers
sued for professional negligence for up to $10 million if sued in Quebec,
but only up to $1 million if sued outside the province.
D.
Forum Non Conveniens
[136]
Finally, there remains
the issue regarding the claims against the two national law firms which have
offices both in Quebec and in Ontario. In my view, Ontario has jurisdiction
over these claims on the basis of the second connecting factor, namely, that
the “defendant carries on business in the province”: Van Breda, at
para. 90.
[137]
It thus falls on those
national law firms contesting jurisdiction to establish that another
jurisdiction is clearly more appropriate: Van Breda, at
paras. 102-3. In the past, this Court has turned to the following factors
to determine if this is the case:
(1)
the place of residence of the parties and
witnesses;
(2)
the location of the evidence;
(3)
the place of formation and execution of the
contract;
(4)
the existence of proceedings pending between
parties in another jurisdiction and the stage of any such proceeding;
(5)
the location of the defendant’s assets;
(6)
the applicable law;
(7)
the advantage conferred on the plaintiff by its
choice of forum;
(8)
the interests of justice;
(9)
the interests of the two parties;
(10) the need to have the judgment recognized in another jurisdiction.
(Breeden, at para. 25, citing Oppenheim forfait GMBH v.
Lexus maritime inc., 1998 CanLII 13001 (Que. C.A.), at pp. 7-8.)
[138]
In evaluating these
factors, my colleague’s conclusion is strongly influenced by her view that all
of the third party claims can be disposed of within one trial, thereby avoiding
“the possibility of conflicting judgments and duplication in fact-finding and
legal analysis”: para. 59. Respectfully, that is not the nature of the
third party proceedings before us.
[139]
The trial in the class
action against Cassels Brock was held from September 9 to
December 19, 2014. McEwen J. rendered judgment on
July 8, 2015, concluding that Cassels Brock was responsible for
$45 million in damages to the class members for failing to fulfill its
contractual and fiduciary obligations, and for failing to meet the standard of
care of a reasonably prudent solicitor or law firm: Trillium Motor World Ltd.
v. General Motors of Canada Ltd., 2015 ONSC 3824, 30 C.B.R. (6th) 1. In its
written submissions, Cassels Brock indicated that this judgment is currently
under appeal.
[140]
On
December 23, 2011, Cassels Brock instituted proceedings seeking
indemnity and contribution from 150 other lawyers and law firms. These third
party claims are not a class action, but represent instead a combination of
separate actions which are not identical. These claims are simply not in
the nature of proceedings where common issues can be resolved for an entire
group. As the motions judge found, “[e]ach case would be fact-specific and
would depend on the particular advice that was given by each local lawyer to
his or her particular dealer/client”: para. 24 (emphasis added).
[141]
To this, I would add
that the lawyers’ level of care and diligence may vary from case to case, as
may each dealer’s relationship with his or her counsel. Some lawyers may have
given their advice far too quickly, while others may have undertaken thorough
research and analysis before providing theirs. Some lawyers may have had more
experience than others in these matters. The financial situation of each dealer
may also have come into play. A dealer may have been advised not to enter into
the Wind-Down Agreement, but may have decided to do so, regardless. In the end,
there may be as many defences as there are defendants. As such, some claims may
be dismissed while others may be granted. The quantum of damages may also vary
from case to case. Simply put, there is a great deal of potential divergence
between each of these 150 third party claims.
[142]
Moreover, as I have
already decided above, the courts of Ontario should not have jurisdiction over
the third party claims against the law firms based solely in Quebec. As such,
there is no possibility that any of these claims would be resolved in Ontario.
If, in my view, these claims would be heard separately, and if most of the
claims against Quebec lawyers would proceed in Quebec anyway, it is clear that
Quebec is the more appropriate forum for the remaining claims against the two
national law firms.
[143]
Most of these lawyers
from the national law firms are domiciled in Quebec, where they practise their
profession as members of the Barreau du Québec. The other witnesses — notably
the dealers’ representatives — are also residents of Quebec. If these claims
against the national firms were heard in Ontario, these witnesses would all
have to travel there to testify, incurring significant additional costs.
Furthermore, Quebec law will govern the claims against the national law firms
with offices in Quebec on the basis that the fault would have occurred in
Quebec. As such, additional costs would have to be incurred to provide an
Ontario court with expert opinions on Quebec law. Finally, if the claims
against the Quebec law firms were to be divided between Quebec and Ontario,
there is a risk that the courts of Ontario and Quebec may render conflicting
decisions while applying Quebec civil law.
[144]
For these reasons, it
is clear that Quebec is the more appropriate forum for these remaining claims,
and that whatever jurisdiction the courts of Ontario possess over these
national firms should be declined.
[145]
As a final matter, I
recognize that my analysis regarding forum non conveniens would result
in overturning the motions judge’s discretionary decision, one which is owed
significant deference on appeal: Van Breda, at
para. 112. However, the motions judge’s analysis of the forum non
conveniens issue began on the premise that all of the third party claims,
including those against the Quebec law firms, could be heard in Ontario. As I
have concluded, the courts of Ontario should not have jurisdiction over the
third party claims against the law firms based exclusively in Quebec. This provides
sufficient grounds for intervention: Éditions Écosociété Inc. v. Banro Corp.,
2012 SCC 18, [2012] 1 S.C.R. 636, at para. 41.
II.
Disposition
[146]
I would allow the
appeal with costs.
Appeal dismissed with costs, Côté J. dissenting.
Solicitors for the appellants: Clyde
& Cie Canada, Montréal.
Solicitors
for the respondent: Lenczner Slaght Royce Smith Griffin, Toronto.