Today’s decision of the Court of Appeal for Ontario in Export Packers Company Limited v. SPI International Transportation, 2012 ONCA 481 (Ont. C.A.) [“Export Packers”] confirms that a defendant’s third party claim does not amount to a “real and substantial connection” unless one of the (4) presumptive connecting factors set out in Club Resorts Ltd. v. Van Breda, [2012] S.C.R. 17 are present.
In Export Packers, the plaintiff, Export Packers Company Limited (“Export”), an Ontario food product seller, bought a shipment of 1,320 cartons of frozen pork spareribs from a Quebec company, A. Trahan Transformation (“Trahan”), which stored the cargo with Entrepôt du Nord Cold Storage Inc. (“EDN”) at its cold storage facility in Laval, Quebec. Export contracted with SPI International Transportation (“SPI”), a B.C. shipping agent and load broker with two offices in Ontario, to arrange transportation of the cargo from the EDN warehouse to a customer in Florida. SPI then contracted with the third party, 726509 Ontario Inc. o/a Transvision Logistics (“Transvision”), to transport the cargo to Florida. A rogue party purporting to represent Transvision picked up the cargo at EDN’s warehouse and absconded with the goods.
Export sued SPI for breach of contract and negligence. SPI defended and commenced third party claims against Transvision and EDN, alleging that EDN was negligent in failing to ask for sufficient identification from the rogue. EDN then moved to stay the third party claim on the basis of lack of jurisdiction, which the motion judge, Stinson J., granted due to an absence of a real and substantial connection between EDN and the claim against it on the one hand and Ontario on the other.
SPI appealed.
The Court of Appeal for Ontario dismissed SPI’s appeal and held that none of the four presumptive factors were present:
a) EDN is not domiciled or resident in the province: (at para. 10)
b) EDN does not carry on business in the province: (at para. 10)
c) the tort (negligent storage) was committed in the province of Quebec, not Ontario: (at para. 11)
d) the three contracts relied upon by SPI related to arrangements between the owner, the broker and the proposed carrier of the cargo, none of which are connected to EDN and all of which were made in the province of Quebec, not Ontario (at paras. 13-16)
SPI argued for creation of a new presumptive factor that EDN was a proper third party in the underlying action pursuant to the test set out in Rule 29 of the Ontario Rules of Civil Procedure, ostensibly on the grounds of promoting the goals of efficiency and fairness. (at para. 18-19). The appeal panel held:
[22] We recognize that there may be efficiencies from a defendant’s standpoint, at least, in prosecuting a third party claim in the same jurisdiction as it defends the claim against it. However, that potential efficiency should not, in itself, be a sufficient reason to create a new presumptive category by which Ontario courts assume jurisdiction. There must be some factual connection to Ontario in the new presumptive factor.
[23] Thus, we do not accept the appellant’s argument that the fact that the claim against EDN is a third party claim brought within an existing Ontario action should, without more, be sufficient to create a presumption that Ontario has jurisdiction over that claim.
The Court of Appeal concludes with a cryptic comment:
[24] In Van Breda, the Supreme Court of Canada appears to have held that if there are no presumptive connecting factors, courts should not assume jurisdiction (paras. 93 and 100). Whether that is the case or not, we agree with the motion judge that in this case there is not a sufficient real and substantial connection between EDN and Ontario or between the cause of action asserted against EDN and Ontario to warrant Ontario accepting jurisdiction. [emphasis added]
One would think that the Supreme Court of Canada was clear on this point.
WF4E3J4BM539
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Antonin I. Pribetic
