Ontario decision declines to expand Van Breda presumptive connecting factors for jurisdiction simpliciter

The recent Ontario decision in Central Sun Mining Inc. v. Vector Engineering Inc., 2012 ONSC 7331 (CanLII) (Ont. SCJ) [“Central Sun Mining”] deals with some important jurisdictional issues, including whether the court will entertain new categories under the presumptive factors  for assuming jurisdiction over non-Ontario defendants set forth in the Supreme Court of Canada decision in Van Breda v. Village Resorts Ltd.

The action in Central Sun Mining arises from a major landslide occurring on October 21, 2007 at the Bellavista Gold Mine in Costa Rica which brought operations to a halt and permanently closed the mine. The plaintiff, a Toronto based holding company, and the indirect owner of the mine, brought an action in Ontario against a number of out-of-province defendants seeking damages of damages of $150,000,000 for negligence, negligent misrepresentation and breach of contract with respect to the development, construction and operation of the mine from the mid-1990s to 2007. The plaintiff sued various engineers and engineering firms involved in the engineering, design and construction of the Bellavista Mine. On September 9, 2011 the Vector Colorado Defendants served and filed a statement of defence to the SRK defendants’ crossclaim.

In the interim, the plaintiff settled its claims against the Golder Defendants and Vector Colorado defendants. The remaining defendants, “SRK Defendants” and “Vector Costa Rica Defendants”, then brought motions challenging jurisdiction simpliciter, or, alternatively, that Ontario is forum non conveniens.

Justice Stinson held that the court lacked jurisdiction over the remaining defendants and that the action must be stayed (or dismissed) against them.

Applying the analytic framework for a domestic court to assume jurisdiction over a foreign defendant in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (CanLII), 2012 SCC 17 (“Van Breda”) and two companion rulings, Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18 (CanLII), 2012 SCC 18 (“Banro”) and Breeden v. Black, 2012 SCC 19 (CanLII), 2012 SCC 19 (“Breeden”), Stinson J. concludes that the plaintiff failed to establish any of the four “presumptive connecting factors” in tort cases under Rule 17.02 of the Rules of Civil Procedure in which a real and substantial connection is presumed to exist that would entitle a court to assume jurisdiction over a dispute. The plaintiff failed to establish any of the defendants were domiciled or resident in the province (rule 17.02(p)), or carried on business in the province (rule 17.02(p). The motion judge rejected the plaintiff’s novel argument—what may be described as “ex post facto jurisdiction” (where the defendants that settled the case had previously attorned)—concluding:

[78]           The question thus becomes whether the past involvement of a party who has a presence in the jurisdiction, but who is no longer involved in the litigation, can support an argument for a “real and substantial connection” between the jurisdiction and the dispute that remains to be adjudicated. No authority was cited by any party in relation to this issue. As a matter of logic, however, it seems to me that if the dispute with the sole defendant with an Ontario presence has been resolved then, for purposes of assessing whether the ongoing dispute has a real and substantial connection with the jurisdiction, one can properly have regard only to the dispute that remains and the disputants who remain. To hold otherwise would be to require this Court to adjudicate issues that themselves lack the requisite level of connection with this province.

With respect to the third factor (“The tort was committed in the province” (rule 17.02(g)) the court notes:

[41]           In relation to the complaint of negligent misrepresentation, the plaintiff argues that the reports, advice and recommendations made by the moving defendants were ultimately received and acted upon by its senior management in Toronto, where the relevant executive decisions were made regarding the plaintiff’s investment in the Bellavista Mine. In negligent misrepresentation cases, the wrong occurs where the representation is received and relied upon: National Bank of Canada v. Chance, 30 O.R. (3d) 746, 1996 CarswellOnt 3493 (Ont. SCJ) at para 32. See also C.B. Distribution Inc. v. BCB International Inc.,2003 CanLII 29523 (ON SC), 2003 CanLII 29523 (ON SC) at para. 29, leave to appeal refused [2003] O.J. No. 4345 (Div.Ct.); Venezia/Sincies v. King,2010 ONSC 6453 (CanLII), 2010 ONSC 6453 (“Venezia/Sincies”) at paras. 180-192 (S.C.J.); and Brisbin v Lunev 2011 ONCA 14 (CanLII), 2011 ONCA 14.

[43]           This is plainly a case involving multi-jurisdictional torts. The physical damage occurred in Costa Rica. The alleged errors by the SRK Defendants took place there and in Colorado, where they carried out their analyses, and arrived at their recommendations and advice. In turn, that advice was transmitted to British Columbia, where it was digested by employees of the plaintiff who in turn made recommendations to head office. The consulting work performed by the Vector Costa Rica Defendants was also performed outside Ontario. Although the ultimate business decisions may have been made in Toronto (and thus, arguably, the element of reliance occurred here) I would characterize the Toronto connection as tenuous.

Justice Stinson distinguishes the decision in Venezia/Sincies, supra, (see my previous post here)  which involved the assumption of jurisdiction relating to negligent advice resulting in damages suffered by plaintiff, an Italian client who successfully moved to enforce the resulting Italian judgment in Ontario:

[46]           In Venezia/Sincies there was both a direct connection and direct communication between the professional advisor and the recipient client in the foreign jurisdiction. By contrast, in the present case, none of the communications between the SRK Defendants and the plaintiff took place in Ontario. While some of the contacts between the Vector Costa Rica Defendants were with the plaintiff’s Ontario head office, that was by no means the only avenue of communication.

Stinson J. further rejected the plaintiff’s argument of “negligence simpliciter”, stating:

[53]           Corporations that operate in more than one country, such as the plaintiff, often suffer damages as a result of torts occurring in other jurisdictions. I agree with the submission of the defendants that if all that is required to create a “tort committed in Ontario” is that an Ontario based company suffer damages, then Ontario courts would have jurisdiction over torts committed all over the world as long as even a small percentage of the damages were suffered here, regardless of where the tort actually occurred.

[54]           Therefore, despite the fact the plaintiff may have suffered some of its damages in Ontario, I would not accept this as a presumptive basis for establishing jurisdiction in Ontario. I am also conscious that, quite apart from the damages allegedly suffered in Ontario, the physical losses caused by the alleged negligence of the defendants occurred entirely in Costa Rica. Thus, the tort also occurred there. Another potential situs of the tort of negligence is where the negligent services were performed, in this case both Costa Rica and Colorado. The presence of these other loci delicti reinforces the limited connection between the plaintiff’s claims and Ontario. To the extent that damages suffered in Ontario may qualify as a presumptive connecting factor, I hold (for these as well as the reasons discussed in para. 47 above) that the moving defendants have successfully rebutted that presumption.

[55]           The plaintiff acknowledges that, as a general rule, negligence simpliciter claims are governed by the law of the jurisdiction in which the wrong occurred, i.e. the lex loci delicti.  It argues, however, that courts retain discretion to apply the law of the forum in some international cases, such as this, where the application of the lex loci delicti would result in injustice.

[56]           Given that virtually all of the moving defendants are located and therefore may be sued in the United States, where the largest measure of their services were performed, I am not persuaded that the application of the lex loci deliciti would work an injustice on the plaintiff. There is no reason to believe that the tort standards of Colorado would place the plaintiff at a disadvantage when pursuing these defendants, or that the plaintiff would otherwise suffer “an injustice” if required to sue there.

[57]           I therefore reject the submission of the plaintiff that this Court should assume jurisdiction over the dispute on the basis of a tort that was committed in Ontario.

The attempt to expand the presumptive factors to include rule 17.02(a), “in respect of…personal property in Ontario” meets a similar fate:

[82]           The basis for the plaintiff’s characterization of its claim as one “in respect of … personal property in Ontario” is that it involves a claim in respect of Central Sun’s reputation and goodwill in Ontario, which were significantly damaged as a result of the defendants’ wrongful conduct. In my opinion this is, in effect, an attempt to reintroduce damages as a presumptive category, a concept rejected by the Supreme Court in Van Breda (see para. 89), as it was by the Ontario Court of Appeal in its decision in Van Breda. See Van Breda v. Village Resorts Limited, 2010 ONCA 84 (CanLII), 2010 ONCA 84 at para. 72. I therefore decline to accept the plaintiff’s submission on this point.

Finally, the plaintiff did not rely on rule 17.02(f)(i) (“contract made in Ontario”), but did attempt to rely on sub-rule 17.02(f)(iv) (“breach of contract has been committed in Ontario), as a presumptive category. Stinson J. rejected this circuitous approach,  noting that in Van Breda,

[87]           Significantly, on appeal, the Supreme Court did not provide such a broad an endorsement of the rule 17.02 scenarios that warrant presumptive effect. InVan Breda the plaintiff alleged both negligence and breach of contract, and relied on the fact that the claim was, in part, founded on a contract made in Ontario. Although the Supreme Court accepted that as a presumptive connecting factor, despite the fact that the Court of Appeal had identified breach of contract committed in Ontario as a presumptive connecting factor, the Supreme Court did not reach the same conclusion. The omission by the Supreme Court in Van Breda of breach of contract committed in Ontario as a presumptive factor, suggests it should not be accorded presumptive status under the jurisdictionsimpliciter analysis.

[88]           Even if I were prepared to recognize breach of contract in Ontario as a presumptive connecting factor, the same considerations are relevant regarding the degree of the connection between this jurisdiction and the dispute, the plaintiff and the moving defendants. For the same reasons I have previously articulated, in my view the connection is tenuous at best, and on that basis I would hold that the presumption has been rebutted.

[89]           I therefore reject the submission of the plaintiff that this Court should assume jurisdiction over the dispute on the basis of a breach of contract committed in Ontario.

[90]           For the foregoing reasons, in my view there are no presumptive factors that support this Court assuming jurisdiction over this litigation. At its heart, this dispute involves complaints by an Ontario company about a loss to property in a foreign country, that was allegedly caused by foreign defendants, performing services in a foreign country or countries. It lacks the requisite real and substantial connection with Ontario. On that basis, I conclude that this Court should not assume jurisdiction over the moving defendants. To the extent there may exist a connection between the dispute and this province, in my opinion that connection is tenuous. On that alternative basis, I would hold that the moving defendants have successfully rebutted any presumptive connection with this jurisdiction.

While the Central Sun Mining decision is analytically sound, it perhaps takes an overly restrictive reading of Van Breda for the expansion of rebuttable presumptive categories under Rule 17.02 for Cf. Mining Technologies International, Inc. v. Krako Inc., 2012 ONCA 847).

 

Tags: , ,

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Follow

Get every new post delivered to your Inbox.

Join 2,063 other followers

%d bloggers like this: