Jurisdiction Simpliciter in a Straight-Jacket: Salus Marine Wear Inc. v. Queen Charlotte Lodge Ltd.

The recent decision in Salus Marine Wear Inc. v. Queen Charlotte Lodge Ltd., 2010 ONSC 3063, highlights the continuing plight of Canadian conflict of laws jurisprudence and the perplexing inability of counsel to properly brief the court on the analytical distinction between jurisdiction simpliciter (i.e. whether the court may assume jurisdiction) and forum non conveniens (i.e. whether the court should assume jurisdiction).
In Salus Marine, the Plaintiff brought a Simplified Procedure action under Rule 76 of the Rules of Civil Procedure in September 2009, claiming damages for breach of contract against the Defendant, a British Columbia based luxury fishing lodge, for non-payment for 238 personal flotation jackets, manufactured by the Plaintiff at its place of business in Kitchener, Ontario.
The Defendant had no assets or any presence in Ontario and brought a motion challenging jurisdiction “under Rule 17.06 for an order staying the action on the basis that the proper and more convenient forum is British Columbia.” Rule 17.06 reads:
MOTION TO SET ASIDE SERVICE OUTSIDE ONTARIO
17.06  (1)  A party who has been served with an originating process outside Ontario may move, before delivering a defence, notice of intent to defend or notice of appearance,
(a) for an order setting aside the service and any order that authorized the service; or
(b) for an order staying the proceeding. R.R.O. 1990, Reg. 194, r. 17.06 (1).
(2)The court may make an order under subrule (1) or such other order as is just where it is satisfied that,
(a) service outside Ontario is not authorized by these rules;
(b) an order granting leave to serve outside Ontario should be set aside; or
(c) Ontario is not a convenient forum for the hearing of the proceeding. R.R.O. 1990, Reg. 194, r. 17.06 (2).
(3)  Where on a motion under subrule (1) the court concludes that service outside Ontario is not authorized by these rules, but the case is one in which it would have been appropriate to grant leave to serve outside Ontario under rule 17.03, the court may make an order validating the service. R.R.O. 1990, Reg. 194, r. 17.06 (3).
(4)  The making of a motion under subrule (1) is not in itself a submission to the jurisdiction of the court over the moving party. R.R.O. 1990, Reg. 194, r. 17.06 (4). [emphasis added]
Since the Defendant moved under Rule 17.06, no defence or notice of intent to defend was delivered. Hence, no presence-based jurisdiction or consent-based jurisdiction. Therefore, the court presumably was briefed on whether or not it may assume jurisdiction based upon the reformulated Van Breda test for “real and substantial connection”. Not likely. The decision does not refer to Van Breda. It refers to Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (C.A.), but only in the context of the discretionary forum non conveniens test. The court then proceeds to conflate the two-step jurisdictional analysis altogether:
“[2]               The Defendant is a luxury fishing lodge in British Columbia.  It has no assets nor any presence in Ontario and it  brings this motion under Rule 17.06 for an order staying the action on the basis that the proper and more convenient forum is British Columbia.
[3]               The Plaintiff is a corporation operating and resident in Ontario. 
[4]               The jackets were designed and manufactured in Ontario, and if there is a design or manufacturing defect or flaw in the product, as the Defendant alleges, that occurred in Ontario.
[5]               The contract for the jackets provides it is FOB Ontario.  The original quotation emanated from Ontario.  The Defendant sent a fax to the Plaintiff in Ontario requesting the jackets pursuant to an outstanding quotation and the Defendant’s Purchase Order is addressed to the Plaintiff in Ontario.

[6]               All of these facts show real and substantial connections to Ontario, which permit this court to entertain the action.

[7]               So the real question is whether this court should assume jurisdiction on the basis that Ontario is the more convenient forum.[emphasis added]
Surprisingly, the court then appears to decide the case on its merits, concluding:
“[11]           While the Defendant concedes that the amount claimed by the Plaintiff for non-payment is not an issue, it has never set out the amount of damages or set-off that it would claim itself.  In argument, I was simply told that the jackets were useless to the Defendant, even though they had apparently been used by the Defendant.  But if the Defendant’s main thrust (or should I say parry) is that there ought to be a certain amount of set-off because of the damages it suffered, this court is left in the dark as to how many of its proposed 29 witnesses are key to this defence.

[12]           I find on the evidence before me that the Defendant’s complaints to the Plaintiff about the quality and appearance of the jackets or their late delivery only began after the Plaintiff started pressing for payment of the amount invoiced.[emphasis added]
 This is getting tedious.

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