“Should I Stay or Should I Go Now?”: Ontario court rules stay inappropriate if it lacks jurisdiction

Although it seems counter-intuitive, most, if not all, jurisdictional motions seek alternative relief in the form of a dismissal or stay of an action. In Luk v. Pottery Barn, 2010 ONSC 5540 (CanLII), Justice Corrick of the Ontario Superior Court of Justice decided that a stay of an action in the absence of a real and substantial connection was superfluous. The parties had agreed that Ontario did not have jurisdiction over the action based upon a lack of a “real and substantial connection” with Ontario and agreed it should be conducted in Michigan. Consequently,  the defendant sought a dismissal of the action, while the plaintiff argued that a stay of the action was more appropriate.

Corrick, J. held:

[8]          I have reviewed a number of Ontario decisions in which a court found that Ontario lacked jurisdiction simpliciter over an action.[1] In eleven cases, the action was stayed. In two cases, the action was dismissed. None of the cases discuss why a stay or dismissal was the appropriate disposition, although in some cases, only a stay was sought.

[9]          In my view, no purpose would be served staying an action that cannot be revived because Ontario has no substantial connection with it. The effect of a stay is to keep an action alive, although dormant. If the court lacks jurisdiction simpliciter over an action at the time of the stay, it will lack jurisdiction over the action once it is sought to be revived. In those circumstances a dismissal is the appropriate disposition.

[10]      Accordingly, I allow Pottery Barn’s motion, set aside service of the statement of claim, and dismiss Ms. Luk’s action against it on the grounds that Ontario does not have jurisdiction.

 

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