It is not uncommon for a plaintiff to commence a lawsuit in a particular jurisdiction where they believe it will result in a more favourable outcome for them or other strategic reasons. This practice is commonly known as “forum shopping.” Ontario courts have recently become more skeptical of the practice, and a recent decision helps to understand why and what courts are doing about it.
The case of RBC v. Gill concerned a collection action brought by RBC in Halton (Milton) against defendants in Belleville. RBC’s law firm was based in Toronto. As the Superior Court of Justice pointed out in its decision, there was no connection between the lawsuit and Halton disclosed in the Statement of Claim. The Court also noted that the distance between courthouses in Milton and Belleville was between 227 and 243 kilometres, depending on the route chosen.
The Court began its decision by noting it had requested submissions as to why the lawsuit should be brought in Halton and not transferred to the Superior Court in Belleville. In reply, RBC’s lawyer indicated that Halton was chosen for convenience to him and RBC since counsel practiced in Toronto and the instructing agent was located in Hamilton. RBC’s lawyer had further submitted that no statute or rule required that a proceeding be commenced in a particular jurisdiction, other than Rule 13.1 of the Rules of Civil Procedure. As the lawyer noted, the Rule refers to a motion brought by a party to transfer a proceeding.
As noted, RBC argued that Rule 13.1.02 does not permit a court to transfer a proceeding on its own initiative because it makes such a transfer conditional on a motion brought by a party. RBC further referenced the Consolidated Civil Provincial Practice Direction, which sets out specific procedural requirements concerning such motions.
The Court rejected the argument put forward by RBC. It was observed that both Rule 13.1.02 and the Practice Direction must be interpreted in a manner consistent with the “General Principle” of interpretation set out in Rule 1.04. Rule 1.04 says that the Rules of Civil Procedure should be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.” Further, they require that courts “make orders and give directions proportionately to the importance and complexity of the issues.”
The Court concluded that those who had drafted the Rules of Civil Procedure and the Practice Direction “must be assumed to have intended to uphold the fundamental principles of procedural justice.” It went on to say that permitting actions to be brought in a way that “is not procedurally just, fair or expeditious to defendants” is inconsistent with those principles. Accepting RBC’s position would mean courts would have to ignore “the absence of any logical connection between the cause of action and the proposed venue or the interests of the defendant.” It could result in defendants having to participate in actions “commenced hours from their home jurisdiction.”
The Court in the Gill case emphasized the administrative burden placed on the court in Halton by forum shopping. It referenced that the court had recently faced approximately 400 outstanding written motions and noted that motions without connection to its jurisdiction were burdensome. A similar finding was recently made in Calloway REIT v. MYJKL Investments Ltd. and BDC v. Ang.
While no motion was brought in the Gill case by a party to transfer the proceeding, the Court found this did not mean it had to “passively acquiesce to venue shopping.” The court must respect the interests of all parties to a proceeding, “including those who do not defend an action.” The Court referenced the fact that it had an inherent power to “regulate and control” its own process and proceedings (citing Abrams v. Abrams). These powers are broad, but they must be exercised consistently with natural justice and fairness principles.
RBC sought to limit the court’s inherent jurisdiction to transfer a proceeding in a situation where no motion is brought by one of the parties to the litigation, relying on the case of Citroen v. Ontario. In that case, the court commented that it did not think “the court should act on its own initiative under Rule 13.1.02.” Among the reasons was that the parties were “best able to determine where they want[ed] the action to be tried.”
The Court in Gill distinguished Citroen. It concluded that the decision in Citroen was fact-specific and concerned the place of trial rather than where an action was to be commenced. The Court in Gill concluded that, regardless, the determination made in that case needed to be “reconsidered in light of current circumstances.”
In Gill, the Court indicated that the current situation faced by courts in the Halton region was a compelling reason to exercise its inherent jurisdiction to change the venue of a proceeding. While it might be more convenient for RBC or its counsel to proceed in Halton, doing so “discourages participation by the defendant, even if they have a full or partial defence to the action.” In other words, as the Court noted, commencing an action in the wrong venue could “prevent a litigant from raising a meritorious defence.”
The Court ultimately directed that RBC seek leave to transfer its action to the Central East Region and also stated that the defendant should not be charged costs for the motion.
The court’s decision in RBC v. Gill shows that judges actively exercise their power to ensure procedural justice. If you are facing a lawsuit filed in a venue designed to inconvenience you, or if you are considering commencing an action and need strategic advice on jurisdiction, our team can help. The lawyers at Milosevic & Associates will advocate forcefully for your rights and navigate complex procedural issues. Contact us online or by phone at (416) 916-1387 for a consultation.
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