Defendant’s delay gives Ontario courts jurisdiction under forum of necessity test
March 20th, 2015
In January 2010, two plaintiffs commenced an action in Ontario arising from a car accident that had occurred almost two years earlier in Michigan. More than a year after the action was commenced, the defendant moved to dismiss the action on the basis that Ontario courts lacked jurisdiction over a claim that the defendant said should instead be tried in Michigan.
For the plaintiffs in Ibrahim v. Robinson,[2015 ONCA 21] this jurisdictional challenge raised two major issues. Most significantly, by the time the defendant’s motion was brought Michigan’s 3-year limitation period had expired and it was too late to sue there. Secondly and almost as significantly, during the year after the action was commenced the law governing when Ontario courts can assume jurisdiction over foreign-based claims had been largely re-written by Ontario Court of Appeal in its 2010 decision in Van Breda v. Village Resorts Limited;[2010 OBCA 84] a decision that was upheld by the Supreme Court of Canada in 2012.[2012 SCC 17] It was acknowledged by the parties that Ontario courts likely had jurisdiction over the case under the rules that existed when the action was commenced but jurisdiction became much more tenuous after Van Breda. Hence the possibility that plaintiffs who, at least initially, chose correctly to sue in Ontario could later be denied the ability to continue in Ontario due to a lack of jurisdiction and also denied the ability to sue in Michigan due to an expired limitation period.
Fortunately for the plaintiff, the Court of Appeal in Van Breda had left open the “forum of necessity” exception, which applies in “exceptional cases where, despite the absence of a real and substantial connection, the need to ensure access to justice will justify the assumption of jurisdiction.”[Notably, the Supreme Court of Canada expressly declined to comment the “forum of necessity” exception when it upheld the Ontario Court of Appeal’s decision in Van Breda because it was not necessary to the appeal.] In the case of Ibrahim v. Robinson, the Court of Appeal upheld the decision below that Ontario was a forum of necessity. In doing so, the Court of Appeal observed that this was “a very unique situation” where the defendants’ delay in challenging jurisdiction had been accompanied by both changes to the law and an expired Michigan limitation period that occurred during that delay. To deny jurisdiction would clearly deprive the plaintiffs of their day in court and this could not be permitted.
Any discussion of this case warrants warnings to both plaintiffs and defendants. Plaintiffs must realize that the mere expiry of a limitation period in the proper forum for a case is not itself enough to trigger the “forum of necessity” exception and a plaintiff who waits for a foreign limitation period to expire before suing in Ontario is likely out of luck.[West Van Inc. v. Daisley, 2014 ONCA 232] Defendants have to understand that the tactic of delaying a jurisdictional challenge and waiting for a foreign limitation period to expire and eliminate a claim is also likely to fail. It is best to either bring a jurisdictional challenge quickly or, if the expiry of a foreign limitation period is imminent, offer to toll (or, in other words, extend) that limitation period as a way to defuse the plaintiff’s forum.