The Lernaean Hydra: Ontario ‘s reformulated test for jurisdiction in Van Breda v. Village Resorts Limited

Hercules and the Hydra, (c. 1475) by Antonio Pollaiuolo (Galleria degli Uffizi).
Should the Muscutt test for assumed jurisdiction against out-of-province defendants be retained, revised or abandoned in favour of some other test? The Court of Appeal for Ontario has just released its decision in Van Breda v. Village Resorts Limited, 2010 ONCA 84 and the answer appears to be “don’t throw the baby out with the bathwater”. 
The appeals in Charron Estate v. Bel Air Travel Group Ltd. (2008), 92 O.R. (3d) 608 (Ont. S.C.J.) and Van Breda v. Village Resorts Ltd. (2008), 60 C.P.C. (6th) 186 (Ont. S.C.J.) involved the issue of when Ontario courts should assume jurisdiction over out-of-province defendants involving personal injury damages occasioned as a result of accidents suffered by Canadian tourists at resorts in Cuba. One lesson in these cases is one should be careful when vacationing in Cuba.  
In both cases, the motion judges held in favour of the plaintiffs that there was a “real and substantial connection” to assume jurisdiction over the non-resident defendants.  When the motions were first argued, neither of the appellants challenged the test for assumed jurisdiction laid down by Justice Sharpe in the “Muscutt quintet”: Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (C.A.); Leufkens v. Alba Tours International Inc. (2002), 60 O.R. (3d) 84 (C.A.); Lemmex v. Bernard (2002), 60 O.R. (3d) 54 (C.A.); Sinclair v. Cracker Barrel Old Country Store Inc. (2002), 60 O.R. (3d) 76 (C.A.); Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68 (C.A.).  The Court of Appeal for Ontario, sua sponte, subsequently directed that a five judge panel (O’Connor A.C.J.O., Weiler, MacPherson, Sharpe and Rouleau JJ.A.) be constituted to permit reconsideration of the Muscutt test.  On the re-argument, the appellants, with support of one intervener (the Tourism Industry Association of Ontario), submitted that the Muscutt test should be scrapped in favour of an approach based on the Uniform Law Conference of Canada model Court Jurisdiction and Proceedings Transfer Act (“CJPTA”) and refuse jurisdiction.  The respondents, supported by another intervener (the Ontario Trial Lawyers Association), supported a slightly modified version of the Muscutt test, and argued that the plaintiffs had met the jurisdictional standard. The reasons are fairly lengthy, but the “new” Van Breda”  test involves yet another two stage analysis (at para. 109):
  • First, the court should determine whether the claim falls under rule 17.02 (excepting subrules (h) and (o)) to determine whether a real and substantial connection with Ontario is presumed to exist.  The presence or absence of a presumption will frame the second stage of the analysis.  If one of the connections identified in rule 17.02 (excepting subrules (h) and (o)) is made out, the defendant bears the burden of showing that a real and substantial connection does not exist. If one of those connections is not made out, the burden falls on the plaintiff to demonstrate that, in the particular circumstances of the case, the real and substantial connection test is met.
 The “core of the analysis” at the second stage “rests upon the connection between Ontario and the plaintiff’s claim and the defendant, respectively.”
Here is where the jurisdictional analysis begins to resemble a nine-headed Lernaean Hydra that will require a Herculean effort to apply judicially:
  • The remaining considerations should not be treated as independent factors having more or less equal weight when determining whether there is a real and substantial connection but as general legal principles that bear upon the analysis;
  • Consideration of the fairness of assuming or refusing jurisdiction is a necessary tool in assessing the strengths of the connections between the forum and the plaintiff’s claim and the defendant. However, fairness is not a free-standing factor capable of trumping weak connections, subject only to the forum of necessity exception.
  • Consideration of jurisdiction simpliciter and the real and substantial connection test should not anticipate, incorporate or replicate consideration of the matters that pertain to forum non conveniens test.
  • The involvement of other parties to the suit is only relevant in cases where that is asserted as a possible connecting factor and in relation to avoiding a multiplicity of proceedings under forum non conveniens.
  • The willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis is as an overarching principle that disciplines the exercise of jurisdiction against extra-provincial defendants.  This principle provides perspective and is intended to prevent a judicial tendency to overreach to assume jurisdiction when the plaintiff is an Ontario resident.  If the court would not be prepared to recognize and enforce an extra-provincial judgment against an Ontario defendant rendered on the same jurisdictional basis, it should not assume jurisdiction against the extra-provincial defendant.
  • Whether the case is interprovincial or international in nature, and comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere are relevant considerations, not as independent factors having more or less equal weight with the others, but as general principles of private international law that bear upon the interpretation and application of the real and substantial connection test. 
  • The factors to be considered for jurisdiction simpliciter are different and distinct from those to be considered for forum non conveniens.  The forum non conveniens factors have no bearing on real and substantial connection and, therefore, should only be considered after it has been determined that there is a real and substantial connection and that jurisdiction simpliciter has been established.
  • Where there is no other forum in which the plaintiff can reasonably seek relief, there is a residual discretion to assume jurisdiction.

Unfortunately for the appellants, neither benefited from the “new and improved” version of the test for jurisdiction simpliciter, as Justice Sharpe dismissed each of their appeals and upheld the lower courts’  assumption of jurisdiction.

It will be interesting to see how, if at all, the Van Breda test will affect the Ontario government’s consideration of the “unofficial” Consultation Report authored by Prof. Janet Walker under the auspices of the Law Commission of Ontario, recommending the enactment of a modified version of the ULCC’s Court Jurisdiction and Proceedings Transfer Act. The Ontario Bar Association Submission on the Codification of Judicial Jurisdiction in Ontario response, of which I was a contributor, argued for an enactment of the model CJPTA without significant modifications, to ensure uniformity or, at least, harmonization with other provincially codified versions.
In the end, while Justice Sharpe opted for a compromise solution, the bathwater remains murky; while something serpentine lurks beneath.

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