There are many aspects of litigation to consider when bringing a claim, but perhaps first and foremost is where to bring the claim. It may seem obvious in most cases, but litigants are not always located in the same geographic area. Further, the issue in question might have occurred in a location where neither party resides, complicating things more. If a claim is brought in a jurisdiction the other party feels is incorrect, they can challenge this as being a ‘forum non-conveniens‘. If they do this, the party who instigated the claim will have to defend this challenge.
The Supreme Court’s Van Breda Test
In Club Resorts Ltd. v. Van Breda, 2012 the Supreme Court of Canada (SCC) dealt with the ability of two families to pursue claims in Canada against those responsible for the injuries suffered by one of their members while on vacation in Cuba. The families had brought suit in Ontario. One of the defendants, Club Resorts Ltd (CRL)., was a Cayman Islands company that managed the resorts in Cuba. CRL objected to the jurisdiction suggesting that Cuba was the forum conveniens, or best venue, for the dispute.
A Real & Substantial Connection
The party who seeks the court’s help and jurisdiction must establish a link between the subject matter of the dispute (the litigation) to the chosen jurisdiction, in this case, Ontario. Here this burden was on the families to justify choosing Ontario as the venue. This would have to be done by proving a “presumptive connecting factor”. If they could establish a connecting factor to Ontario, then they will have met the burden of establishing a real and substantial connection.
The presumptive connecting factors must be objective ones. There cannot be assumptions of jurisdiction based on subjective “palm tree justice” factors, however fair or convenient they may appear.
Here we are dealing with a tort that occurred in Cuba. The SCC set out the following common-law presumptive factors that, if established, would allow a court to assume jurisdiction:
- the defendant is domiciled or resident in the province;
- the defendant carries on business in the province;
- the tort was committed in the province; and
- a contract connected with the dispute was made in the province.
These are the presumptive connecting factors, known as the Van Breda test. The families were successful in this case before the SCC.
Plaintiffs in Multi-Party Suit Bring Claim in Ontario, Despite Contract Being Subject to Quebec Law
The issue came before the Ontario Court of Appeal (ONCA) recently in GIAO Consultants Ltd. v. 7779534 Canada Inc. Here the plaintiffs sought the jurisdiction of the Ontario courts. The claim was not based solely in tort but rather was a claim for breach of contract, negligence, intentional misrepresentation, breach of trust and/or fiduciary duty, and civil conspiracy. The main source of the dispute was the contract between the parties. The contract provided that the governing law of the contract would be the civil law of Quebec.
This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Quebec and the federal laws of Canada applicable in such province, and each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of such Province and all courts competent to hear appeals therefrom.
Several of the defendants agreed to the choice of jurisdiction, and others were resident in Ontario. Some however disputed the jurisdiction, or in the alternative, sought a finding that Ontario was a forum non-conveniens. They argued that if the matter was heard in Ontario, experts would be needed, adding delay and further expense to the proceeding.
They were unsuccessful before the motions judge and appealed to the ONCA. The decision first used the Van Breda test and found that three of the four presumptive connecting factors were present. Ontario could therefore assume jurisdiction. Secondly, the motions judge dealt with the “conveniens” issue by finding that it would not be necessary to hire legal experts to interpret the law of Quebec. Even if it became necessary, the extra cost, in the context of all the claims, would not be a factor and would not make proceeding in Ontario unfair. The parties objecting to the jurisdiction in Ontario appealed the decision.
ONCA Upholds Motion Judge’s Decision
The first problem for the appellants was the standard of review. The decision below was a discretionary one for the motions judge to make. The ONCA would only interfere with the decision if it could be shown that the judge below erred in principle, misapprehended or failed to take account of material evidence, or reached an unreasonable decision. They found no such errors and dismissed the appeal. Ontario took jurisdiction.
The reasons of the ONCA were as follows:
- The dispute was centred on the allegation that one defendant, and one of the appellants, had not paid the purchase price for their shares. The dispute was a simple one in contract;
- The decision below did not rule out experts being needed and further provided that even if they were needed that alone would not tip the balance and make a trial in Ontario unfair;
- The jurisdiction clause referred to the non-exclusive jurisdiction of the laws of Quebec;
- There were claims in contract and tort and this could raise complex issues of the applicable law to both forms of claim.
At Milosevic Fiske LLP, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial litigation matters ranging from straightforward contract and partnership disputes to complex multi-party commercial claims. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself. Call us at 416-916-1387 or contact us online to schedule a consultation.