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Ontario action dismissed for lack of jurisdiction despite expiry of limitation period in proper forum

An Ontario man who suffered catastrophic injuries after being hit by a car in Michigan has had his Ontario action dismissed for want of jurisdiction. The Ontario Superior Court dismissed the plaintiff’s action despite the fact that his time to sue the driver had run out in Michigan, which was the proper forum.

The plaintiff in Orum v. Matsuka is a 78-year-old man who was hit by a vehicle in 2016 while walking across a crosswalk  in the town of Lake Orion, Michigan. Almost two years later, he issued a Statement of Claim in Ontario against both the Michigan driver and his own insurer, Kent & Essex Mutual Insurance Company, for uninsured coverage for his injuries. The Michigan driver, Maksuta, challenged the jurisdiction of the Ontario court on the basis that the accident occurred in Michigan and that she is a Michigan resident with no business in Ontario or other Ontario connections. By the time the jurisdiction motion was brought, the three year limitation period to sue in Michigan had expired – meaning that the plaintiff would likely have no recourse against Maksuta if the case in Ontario were to be stayed for lack of jurisdiction.

The analysis by Ontario Superior Court Justice Hebner of whether there was jurisdiction was relatively straightforward. None of the presumptive connecting factors prescribed for determining a sufficiently real and substantial connection for jurisdiction as set out by the Supreme Court of Canada in the leading 2012 case of Club Resorts v. Van Breda favoured the plaintiff. In particular, the defendant was not domiciled or resident in Ontario and did not carry on business in Ontario, the tort did not happen in Ontario, and no contract connected with the dispute had been made in Ontario. It did not matter to the analysis that the insurance contract between the plaintiff and his own insurer, Kent & Essex, was made in Ontario and required to be litigated in Ontario; the subject-matter of the claim against the driver remained in Michigan. As observed by  Justice Hebner, if the existence of Ontario insurance were enough to support jurisdiction over a foreign defendant, “then every motor vehicle accident that occurs in another jurisdiction could be litigated in Ontario simply by adding the plaintiff’s own Ontario insurance company.” While the existence of local co-defendants has in the past been seen as relevant to jurisdiction over foreign defendants, the Supreme Court in Van Breda made it clear that local co-defendants are no longer a factor that can force foreigners to defend claims in Canada. This is even the case where it might result in a multiplicity of proceedings.

The expiry of the Michigan limitation period was also not enough to give Ontario courts jurisdiction over the claim against the Michigan driver. The plaintiff attempted to argue the narrow “forum of necessity” exception to the real and substantial connection test for jurisdiction, which applies when the plaintiff can “establish that there is no other forum in which he or she reasonably could obtain access to justice.” However, as Justice Hebner observed, the doctrine is typically unavailable because of its high bar and its availability has been rejected in numerous cases.  “The doctrine is reserved for exceptional cases such as where there has been a breakdown in diplomatic or commercial relations with the foreign state or where the plaintiff would be exposed to a risk of serious physical harm if the matter was litigated in the foreign court.” Accordingly, a tactical decision not to sue in the proper jurisdiction did not meet the high onus to prove that Ontario is a forum of necessity. Justice Hebner summarized the issue as follows:

“The plaintiff chose not to issue a statement of claim in Michigan.  Plaintiff’s counsel was told by defence counsel in October 2018 that the moving defendant contested this court’s jurisdiction.  There was no evidence that the issue was raised again between counsel.  There was no evidence that defence counsel took any steps to lull the plaintiff into a false sense of security.  Given the e-mail communication that took place on October 15, 2018, I can only conclude that plaintiff’s counsel was aware that the moving defendant was contesting jurisdiction and that the limitation period in Michigan would expire in August 2019.  Given that information, the plaintiff ought to have issued a claim in Michigan and did not.”

Here,, the plaintiff chose to sue in Ontario rather than Michigan, where he suffered his accident. As a consequence of this choice, his ability to pursue the driver who injured him is very likely forever barred. This case is a cautionary tale for plaintiffs and their counsel to be very careful to commence an action in a jurisdiction that has a real and substantial connection to the claim at issue – especially when the expiry of a limitation period is imminent.

 

 

 

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 recognized for Corporate and Commercial Litigation by Best Lawyers of Canada and has been given the highest available rating of AV, or pre-eminent, by his peers on Martindale-Hubbell.

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