Winter 2010 - (InBrief Winter 2011)
InBrief Winter 2011
In Van Breda v. Village Resorts Limited ("Van Breda"), the Ontario Court of Appeal revised the test for determination of assumed jurisdiction. The specific issue addressed in Van Breda is that damages sustained in Ontario do not provide a presumption of jurisdiction in Ontario.
While one decision since Van Breda has stated that "the foundation of the test for assuming jurisdiction remains the same," Van Breda itself referred to "modifications" to the test in Muscutt v. Courcelles. Whether truly novel or not, Van Breda is being appealed to the highest court and, until the Supreme Court of Canada decides otherwise, Van Breda constitutes binding law in Ontario as to when Ontario courts may take jurisdiction over a matter.
Look Elsewhere for Relief
The decision of Lazer-Tech Limited v. Dejeray and Watson carries the holding in Van Breda, that Rule 17.02(h) does not presumptively provide jurisdiction, one step further. The decision in Lazer-Tech held that torts alleged against individual defendants located in British Columbia by an Ontario plaintiff were held to be sufficient to stay an Ontario court action for not having jurisdiction over the subject matter. The judge stated that where a defendant confines its activities to its home jurisdiction, it will ordinarily not be subject to the jurisdiction of that forum.
Justice Pattillo has also rendered a decision based on the court ruling in Van Breda. The decision in Kahlon v. Cheecham also applied the Van Breda principle that Rule 17.02(h) does not provide a presumption of a real and substantial connection. Pattillo J. reinforced the notion that the burden is on the plaintiff to establish that a real and substantial connection exists between the claim and Ontario. In Kahlon, the plaintiff resided in Brampton, Ontario and was struck while crossing the street in Fort McMurray, Alberta by two Alberta residents.
Pattillo J. drew a distinction between the test in Muscutt and the current state of the law. He stated that it is not appropriate to rely on Muscutt and that in matters related to Rule 17.02(h), it was "important" that the plaintiff bear the onus of showing a real and substantial connection.
The learned Judge ultimately held that the evidence established that a connection existed between the plaintiff's claim and Ontario, both in respect of residence and damages suffered, but that that connection was not significant. As a result, he was not satisfied that the plaintiff had met the onus of establishing a connection between Ontario and his claim.
Similarly, in Lintner v. Saunders and Goldmart Farms Inc. v. Fasig-Tipton Co., Inc., the courts declined to take jurisdiction simpliciter.
Yes, Sue for Your Damages in Ontario
Patillo J.'s view of the significance of Van Breda does not appear to be shared across the judiciary. The decision of one case, Dennis v. Farrell, virtually ignored the ruling in Van Breda. Although the Judge cited Van Breda in several paragraphs, he did not mention whether the court would presume jurisdiction or not based on damages suffered in Ontario. In language similar to that in another decision, Banro Corporation v. Les Éditions Écosociété Inc., the judge held that Van Breda's test for assuming jurisdiction "does not change the law as set out in Muscutt."
In Cardinali v. Strait, a plaintiff passenger who lived in Ontario was injured in a collision with a vehicle driven by a Michigan-based defendant. The plaintiff's basis for commencing a claim in Ontario was her significant injuries as a result of her accident.
The court considered the reformulated Muscutt test as articulated in Van Breda and held that there was no presumption of jurisdiction as a result of the plaintiff's damages arising in Ontario. The court then stated that it was necessary for the plaintiff to demonstrate a real and substantial connection if she wished the court to assume jurisdiction over the claim.
To determine if a real and substantial connection existed without a presumption of jurisdiction, the court considered four heads of analysis as set out in Van Breda. The first was the connection between the court forum and the plaintiff's claim. The second was the connection between the forum and the defendant. The third was fairness. The fourth was "general principles," and included consideration of residual factors as laid out in Van Breda.
The court held that, despite a lack of presumptive jurisdiction, the plaintiff had a significant connection to the forum.
Black v. Breeden is an interesting case as the appeal appears to have resulted from the release of Van Breda. While the majority of the decision focused on the presumption of jurisdiction arising from a tort of internet libel against Conrad Black, the Court of Appeal commented on Rule 17.02(h). The Court stated that although damages sustained in Ontario do not give rise to a presumption of jurisdiction, they can form a significant connection and relevant factor.
Since Van Breda, the courts appear to be hesitant to take jurisdiction solely on the basis of damages suffered in Ontario. It appears that the more emphasis judges place on the language in Van Breda, the less likely they are to uphold jurisdiction simpliciter on the basis of damages suffered in Ontario alone. However, such a conclusion must be tempered with some judicial language about damages suffered in Ontario being a significant connection and relevant factor.
The Supreme Court will have to make a choice about how jurisdiction simpliciter should be determined across Canada. If the Supreme Court does uphold Van Breda, it will have to clarify what a presumption of jurisdiction is, and when parties can expect provincial courts to assume jurisdiction over damages suffered in Canadian provinces.
Ed: As the context suggests, at the time the article was being prepared for inclusion in InBrief, no judgment had yet been rendered by the Supreme Court of Canada, but, of course, this may not be the situation when the article is read and so we provide this cautionary note.
This article appeared in the Lang Michener LLP InBrief Winter 2011.