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Supreme Court of Canada sets the rules on when Canadian courts have jurisdiction

Earlier today, Canada's Supreme Court released a trilogy of long-awaited decisions in which it set universal rules on when courts across Canada can properly take jurisdiction over claims against foreign defendants. The first two cases, Club Resorts Ltd. v. Van Breda et al. and Club Resorts Ltd. v. Charron et al., related to claims brought against the operator of a resort in Cuba at which the plaintiffs had suffered serious injuries. The third case, Breeden et al. v. Black, related to defamatory statements made about Conrad Black by persons in the U.S.  In all cases, the Ontario-based plaintiffs sought to have their claims tried in Ontario and in all cases the foreign defendants sought to stay the actions on the basis that Ontario courts did not have jurisdiction over the claims against them or, alternatively, on the basis that Ontario was not a convenient forum for those claims.

In all three of the above cases, the Supreme Court of Canada affirmed the decisions below and found that the Ontario courts had properly taken jurisdiction and were convenient fora for the trial of the claims. In Reasons issued on behalf of a unanimous court, Justice LeBel reiterated that jurisdiction must be based upon a "real and substantial connection" between a particular forum and the subject matter of the litigation and that the determination of whether there is such a connection must not be a matter of pure judicial discretion but, rather, be based upon a clear set of presumptive factors that will be applied to whether the courts of a particular province can take jurisdiction. Justice LeBel observed that the "framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up 'on the fly' on a case-by-case basis – however laudable the objective of individual fairness may be."

In deciding whether the court has jurisdiction over a particular action, the following factors create a presumption of jurisdiction in torts cases: (1) the defendant is domiciled in the province; (2) the defendant carries on business in the province; (3) the tort occurred in the province; (4) a contract connected to the dispute was made in the province. The Court also recognised that there may be other connecting factors that are similar to these ones that can also create a presumption of jurisdiction – factors that are similar to those listed or otherwise recognised as appropriate connecting factors by case law, statute, or other states' legal systems. Once one of these factors has been established, then the onus is on the defendant to show that nevertheless the actual action bears little relationship to the jurisdiction. For example, a particular defendant might carry on business in Ontario but still rebut the preumption of jurisdiction by showing that its dealings with the plaintiff were entirely conducted elsewhere and had no other connection to Ontario.

Once the courts of a particular province are found to have jurisdiction simpliciter, it is then available to a defendant to establish that the courts should nevertheless decline jurisdiction on the basis of forum non conveniens – on the basis that another forum is clearly more appropriate for a particular action. A number of factors can be relevant to this determination, including the location of witnesses and documentary evidence, the applicable law, the desirablility of avoiding a multiplicity of proceedings arising from the same subject-matter, and the enforcement of an eventual judgment. However, the Supreme Court has recognised that there is no way to prescribe an exhaustive list of factors relevant to this issue, as they are of necessity based on the specific facts of a particular case.

In the Van Breda and Charron  actions, the deciding factor was the fact that the defendant resorts had carried on business in Ontario through an authorized agent and that the contracts giving rise to the plaintiffs' stays at the resort had their genesis in Ontario.  In Breeden v. Black, the deciding factor was the publication of the defamatory statements in Ontario. In that regard, it is well-established under Canadian law that a defamatory statement is published in the location where it is received and in the case of Mr. Black, the defamatory statements were received, printed and republished in three Ontario newspapers. This was a sufficient connection for the Ontario courts to have jurisdiction.

The Supreme Court of Canada also declined to disturb the findings of the courts below that the Ontario courts should not decline jurisdiction on the basis of forum non conveniens.

Kenneth A. Dekker
Affleck Greene McMurtry LLP

Kenneth A. Dekker

Kenneth Dekker, a partner of the firm, is a successful trial and appellate lawyer who is valued by his clients as a resourceful and practical litigation counsel.

Over more than two decades, Ken has litigated noteworthy cases in a range of fields that include class action defence, securities and broker-dealer litigation and regulatory defence, corporate and shareholder disputes (including oppression and winding up cases), defamation, civil fraud litigation, disputes over contracts, injunctions, professional liability litigation, employment litigation and cross-border litigation issues.

Ken has appeared before all levels of courts in Ontario, including the Ontario Court of Justice, the Superior Court of Justice, the Divisional Court and the Court of Appeal for Ontario, as well as before the Supreme Court of Canada. Ken also represents and advises clients in regulatory matters before the Investment Industry Organization of Canada (IIROC), the Mutual Fund Dealers Association of Canada (MFDA) and the Ontario Securities Commission (OSC).

Ken has been ranked as Repeatedly Recommended for Securities Litigation by Lexpert, for Corporate and Commercial Litigation by Best Lawyers of Canada, and he has been given the highest available rating of AV, or pre-eminent, by his peers on Martindale-Hubbell.

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