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When bringing a claim against a defendant for a civil matter such as fraud, it is important to understand the concept of jurisdiction, in order to ensure the claim is filed in the appropriate location. When all parties involved are in the same place and the entire matter occurred in that place, such as Ontario, jurisdiction is simple. However, the matter is not always so easy to determine. In international business matters, or cases of civil fraud involving participants who are scattered across the globe, how is one to know where to file a legal claim? In Ontario, the test has always been whether the province has a “real and substantial connection” to the matter at hand.

Establishing a “real and substantial connection” to Ontario has long been the test for whether an Ontario court may assume jurisdiction over a matter, however, the test was brought into sharper focus in a 2012 Supreme Court decision called Club Resorts Ltd. v. Van Breda. In that decision, the Court clarified a three-step approach to determining whether a Canadian court may assume jurisdiction over a civil matter.

In recent Court of Appeal decision, the Court helped provide further guidance on assuming jurisdiction over multiple defendants, which the Court notes has remained a vexatious issue in Canadian jurisprudence. However, in the case at hand, the Court found that when the defendants are all said to have acted in “an interconnected way”, it is not necessary to conduct a separate analysis for each one with respect to jurisdiction.

Assuming Jurisdiction in Canada: The Van Breda Test

In Club Resorts Ltd. v. Van Breda, the issue of jurisdiction arose in the context of a case in which the various defendants were located in multiple locations, including Ontario, Cuba, and the Cayman Islands. The foreign defendants challenged the Ontario court’s jurisdiction, and the matter eventually made its way to the Supreme Court, which provided a three-step analysis for courts to undertake to make the application of the “real and substantial connection” test more consistent. When determining whether a court may assume jurisdiction over a matter involving foreign defendants, three questions must be asked:

Does the Court have presumptive jurisdiction?

When assessing whether a Canadian court has presumptive jurisdiction over a matter, there are four objective presumptive connecting factors which must be considered:

  1. Whether the defendant is domiciled within the province
  2. Whether the defendant carries on business within the province
  3. Whether the tort was committed within the province
  4. Whether a contract connected with the dispute was made in the province

Courts may also consider additional factors, and in doing so, should consider the following when deciding if the new factor should be a presumptive factor in the matter at hand:

  • Is the new factor similar to one of the existing presumptive factors?
  • The treatment of the new factor under the case law
  • The treatment of the new factor under statutory law
  • The treatment of the new factor in the context of private international law of other legal systems with a “shared commitment to order, fairness, and comity”

Can the Court’s presumptive jurisdiction be rebutted?

Once the court has determined that it may presume jurisdiction over the matter, the next question becomes whether this presumption can be rebutted. The onus to rebut the presumption lies with the party seeking to challenge the jurisdiction. To be successful, the party must be able to demonstrate that it would be inappropriate for the court to assume jurisdiction because the established connecting factors establish too weak a connection.

If the Court has jurisdiction, should the Court decline to exercise said jurisdiction in favour of a clearly more appropriate forum?

If the first question is answered with a “yes” and the challenging party is unable to successfully rebut the jurisdiction, then the onus is then on the challenging party to establish why, under the doctrine of forum non conveniens, the Canadian court should refuse jurisdiction in favour of a more appropriate forum.

No Need to Conduct a Separate Van Brenda Analysis for Each Defendant When they are Interconnected

The issue of jurisdiction arose again recently in the decision Sakab Saudi Holding Company v. Jabri. This case involved allegations of commercial fraud taking place in several international locations. The plaintiffs brought claims against multiple defendants, including the individual SJ, SJ’s son, and a number of companies.

SJ brought a motion with the Superior Court of Justice to have the claim dismissed for lack of jurisdiction, which was denied. The motions judge found that multiple connecting factors were satisfied, which was sufficient for the Court to presume jurisdiction. These factors included the fact that SJ is resident in Toronto, and several assets involved in the dispute are located and controlled in Ontario as well.

SJ appealed to the Court of Appeal, arguing that the motions judge had erred by presuming jurisdiction over each of the various defendants, once it had established jurisdiction over SJ. The Court of Appeal found that it was unnecessary to complete a Van Brenda analysis for each individual defendant once the Court had established a connection with SJ, because each of the defendants had acted in an “interconnected way” with a “single controlling mind”.

With respect to the international reach of the alleged fraud, the Court further stated it was enough that certain elements of the tort were alleged to have been committed in Ontario, even if harm was suffered in other locations around the world.

For Unparalleled Legal Representation in Civil Fraud Matters Contact Milosevic & Associates

If you require legal guidance with a civil fraud matter or a complex appeal, contact Milosevic & Associates. Our highly experienced litigation lawyers have unparalleled litigation experience and regularly represent clients at the Court of Appeal. We have developed a reputation for professionalism and integrity that benefits our clients, and we are committed to the highest standards of ethics and professional courtesy towards the courts, our clients, opposing counsel, and all other relevant parties. Our impressive track record speaks for itself. Call us at 416-916-1387 or contact us online to learn more about how we can help.