Archive for the ‘real and substantial connection’ Category

Ontario plaintiff’s claim against Mexican hotel for ATV accident stayed for lack of jurisdiction

October 24, 2013
Image via Daryl Cagle's The Cagle Post, Cartoons and Commentary

Image via Daryl Cagle’s The Cagle Post, Cartoons and Commentary

In Haufler v. Hotel Riu Palace Cabo San Lucas, 2013 ONSC 6044 (CanLII),  the Plaintiff was injured while riding an all-terrain vehicle (ATV) . She was immediately flown back to Canada for treatment.  The Plaintiff then sued the ATV excursion operator in negligence, but the company is bankrupt. The Plaintiff also sued the Hotel Riu Palace Cabo San Luca [the "Hotel Riu"] where the Plaintiff and the other vacationers stayed during the tragic Mexican vacation. The Hotel Riu then moved for a stay of the action based upon lack of jurisdiction simpliciter, or, alternatively, Ontario was forum non conveniens.

The case is unremarkable, except for the fact that it languished for seven years, while the parties awaited the Supreme Court of Canada’s decision in Club Resorts Limited v. Van Breda.[1], which established a refined test for the assumption of jurisdiction based on a “real and substantial” connection between the foreign defendant and the forum asserting jurisdiction., requiring the plaintiff to demonstrate the existence of one of four rebuttable presumptive connecting factors before a Canadian court will assume jurisdiction over an action involving a foreign defendant.

Quigley J. rejected  the Plaintiff’s claim that the Hotel carried on business in Canada, either on its own, or through agency relationships, noting that even if the Hotel: “…engaged in a considerable amount of business with Ontarians, the existing legal relationships between the Hotel, the owner of the Hotel,  and Sunquest Tours at the end of the line in Canada are not sufficient to establish that the Hotel carries on business in Ontario.” (at para. 7).

The Plaintiff’s arguments to establish a virtual connection to Ontario based upon advertising brochures, physical presence of some Hotel Riu representatives in Ontario, or website advertising also failed.

Quigley J. concludes:

[76]         In conclusion, on this aspect of the motion, I agree with the moving party, the Hotel, that there is virtually no connection to Ontario in this case. The tort action itself involves the alleged negligent operation of an ATV excursion in Mexico by a Mexican entity that offered the excursion in Mexico, Rancho Tours. In its action, the plaintiffs seek to attach legal responsibility for those events to this foreign defendant, the Hotel. Plainly the tort did not take place in Ontario, and the Hotel is a resident and domiciliary of Mexico. As such, Ontario could only assume jurisdiction over this litigation under the test established in Van Breda provided one of the two remaining connecting factors applied. In order for either of those two factors to apply, a contract entered into in Ontario regarding the subject matter of this litigation would have to exist, or there would need to be evidence that the Hotel was carrying on business in Ontario.

[77]         However, as the foregoing analysis shows, the only contracts of relevance here were made in Mexico. There was no contract concluded in Ontario between the Hotel and these plaintiffs. Their contract was with an independent third-party, Thomas Cook or its Sunquest Vacations alter ego. Further to this, the plaintiffs have failed to discharge the burden that rests upon them alone to show on the evidence that the Hotel carries on business in Ontario. At most, as the defendants argued, a separate company which markets the Riu trademark does occasional business with the Canadian business, Thomas Cook. But even this cannot provide the necessary connection as any existing connection is unrelated to the subject matter of the litigation. Given the absence of any of the four connecting factors required by Van Breda, Ontario cannot assume jurisdiction over this litigation and the motion to stay this action is therefore granted.

UK Supreme Court Rejects Supreme Court of Canada’s Jurisdictional Test for Enforcing Foreign Judgments

October 30, 2012

The UK Supreme Court has rejected outright the Supreme Court of Canada’s “real and substantial connection” test for recognition and enforcement of foreign default judgments.

The UK decision in Rubin v. Eurofinance [2012] UKSC 46 arises from two appeals:  Rubin v Eurofinance SA (“Rubin”) and New Cap Reinsurance Corpn Ltd v Grant (“New Cap”), both dealing with the issue of whether an order or judgment of a foreign court (on these appeals the United States Bankruptcy Court for the Southern District of New York, and the New South Wales Supreme Court) in proceedings to adjust or set aside prior transactions, e.g, preferences or transactions at an undervalue (“avoidance proceedings”), will be recognised and enforced in England.

The appeals also address whether enforcement may be effected through the international assistance provisions of the UNCITRAL Model Law (implemented by the CrossBorder Insolvency Regulations 2006 (SI 2006/1030)  (“CBIR”)), which applies generally, or the assistance provisions of section 426 of the Insolvency Act 1986, which applies to a limited number of countries, including Australia.  (more…)

Chilenye Nwapi, “Litigating extraterritorial corporate crimes in Canadian courts”

September 26, 2012

Chilenye Nwapi  (D. Phil. Candidate, University of British Columbia, Faculty of Graduate Studies (Law)) has published a doctoral thesis entitled: Litigating extraterritorial corporate crimes in Canadian courts [PDF] (September 2012). The abstract reads:

This study investigates whether and how Canadian courts may assume jurisdiction (both criminal and civil) over extraterritorial crimes/wrongs committed by Canadian corporations operating overseas. It examines the current state of international law to see whether there is any international legal rule prohibiting a state from assuming jurisdiction over conduct occurring outside its territory. It finds that no such positive rule is in existence, whether in customary international law or in treaty law, and that the only concern is the likelihood of diplomatic protests by states which believe that the jurisdiction sought to be assumed is a threat to their territorial integrity. It argues that although the type of jurisdiction envisaged in this study is not widespread among states, the absence of widespread state practice is not tantamount to prohibition, at least in principle. The study then looks at the Canadian domestic jurisdictional bases, both criminal and civil. On the criminal front, it finds that the real and substantial link test has enough flexibility to reach the extraterritorial conduct of Canadian corporations and that the expansion of the substantive bases of corporate criminal liability that occurred in Canada in 2003 bolstered the criminal jurisdiction of Canadian courts over extraterritorial corporate crimes. On the civil front, it finds that Canadian courts may assume extraterritorial jurisdiction under three distinct theories: the real and substantial connection test, necessity jurisdiction and the recently enacted Torture Victims Protection Act. It examines the bases for declining jurisdiction under the doctrine of forum non conveniens and calls for a reformulation of the doctrine to require a Canadian court to decline jurisdiction only when it finds that it is a “clearly inappropriate” forum, in contrast to the current rule that requires the existence of a “clearly more appropriate alternative” forum. The question of choosing the applicable law in tort cases is also interrogated. A call is made for the adoption of a rule that considers the nature of the conduct in litigation as an important element in the determination of the applicable law. On the whole, this study concludes that Canada holds prospects for transnational litigation.

 

 

 

The Supreme Court of Canada Conflict of Laws Trilogy: Part I

April 19, 2012

Following up on yesterday’s post, this will be a two-part series of posts on the Supreme Court of Canada conflict of laws trilogy in:

Club Resorts Ltd. v. Van Breda, 2012 SCC  17 (“Van Breda”);

Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18 (“Banro”) and

Breeden v. Black, 2012 SCC 19. (“Black”).

In Part I, I will critically analyze the Van Breda decision and its implications to Canadian conflict of laws generally. In Part II, I will discuss the Banro and Black decisions from the perspective of internet defamation, corporate liability, choice of law and libel tourism. (more…)

Supreme Court of Canada Further Modifies Jurisdictional Test in Tort Actions

April 18, 2012

As I recently noted, the Supreme Court of Canada has released its judgments in an important conflict of laws trilogy. Here are the links to today’s SCC judgments:

1.  Club Resorts Ltd. v. Van Breda, 2012 SCC  17

2. Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18

3. Breeden v. Black, 2012 SCC 19

 The bottom-line is that the Van Breda test has been further modified as follows:

[90]                          To recap, in a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:

(a)      the defendant is domiciled or resident in the province;

(b)      the defendant carries on business in the province;

(c)      the tort was committed in the province; and

(d)      a contract connected with the dispute was made in the province.

(b)  Identifying New Presumptive Connecting Factors

[91]                          As I mentioned above, the list of presumptive connecting factors is not closed.  Over time, courts may identify new factors which also presumptively entitle a court to assume jurisdiction.  In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors.  Relevant considerations include:

(a)      Similarity of the connecting factor with the recognized presumptive connecting factors;

(b)      Treatment of the connecting factor in the case law;

(c)      Treatment of the connecting factor in statute law; and

(d)      Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.

 [100]                     To recap, to meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum.  In these reasons, I have listed some presumptive connecting factors for tort claims.  This list is not exhaustive, however, and courts may, over time, identify additional presumptive factors.  The presumption of jurisdiction that arises where a recognized presumptive connecting factor — whether listed or new — exists is not irrebuttable.  The burden of rebutting it rests on the party challenging the assumption of jurisdiction.  If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors exist or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine, which I need not address in these reasons.  If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.

With respect to the “New” Van Breda test as applied to defamation actions, in Breeden c. Black, the Supreme Court reaffirmed the presumptive factor of the republication of the alleged libel in Ontario:

[20]                          The issue of the assumption of jurisdiction is easily resolved in this case based on a presumptive connecting factor — the alleged commission of the tort of defamation in Ontario.  It is well established in Canadian law that the tort of defamation occurs upon publication of a defamatory statement to a third party.  In this case, publication occurred when the impugned statements were read, downloaded and republished in Ontario by three newspapers.  It is also well established that every repetition or republication of a defamatory statement constitutes a new publication.  The original author of the statement may be held liable for the republication where it was authorized by the author or where the republication is the natural and probable result of the original publication (R. E. Brown,The Law of Defamation in Canada (1987), vol. 1, at pp. 253-54).  In my view, the republication in the three newspapers of statements contained in press releases issued by the appellants clearly falls within the scope of this rule.  In the circumstances, the appellants have not displaced the presumption of jurisdiction that results from this connecting factor.

Finally, in  Éditions Écosociété Inc. v. Banro Corp., the Supreme Court while declining to decide the issue, suggests that “one possible alternative to the lex loci delicti as the choice of law rule in defamation cases may be the place of most substantial harm to reputation.”  Whether applying the lex loci delicti rule or the locus of the most substantial harm to reputation  the applicable law was that of Ontario and this factor favoured Ontario in the forum non conveniens analysis, as did the factor of juridical advantage.

I intend to provide more detailed analysis of these significant Supreme Court of Canada private international law decisions, time permitting this week.


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