Ontario court pulls the rug out from under Home Depot USA and assumes jurisdiction over slip and fall case

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Logo for The Home Depot. Category:Brands of the World (Photo credit: Wikipedia)

In Young v. Home Depot (U.S.A.), 2012 ONSC 1971 (CanLII), the defendant Home Depot USA, Inc. [“Home Depot USA”] moved for a stay of proceedings on the basis that the Ontario Court should not assume jurisdiction of a tort action relating to a slip and fall accident that occurred on June 22nd, 2009 in Watertown, New York State, United States of America. The plaintiffs issued a claim out of the Ontario Superior Court of Justice in Peterborough, Ontario and named Home Depot, U.S.A. Inc., as a defendant. The plaintiff, Melanie Doris Young, claimed damages for a personal injury suffered when she tripped over a bunched up section of rug located at the entrance to the Home Depot store. She further alleged that she attended the store with her brother who found the Home Depot Canada and Home Depot USA sites on the internet in search of certain products.  He determined that the cheapest could be obtained at the Watertown location and thus the reason for the trip to Watertown.

Home Depot USA did not attorn to the jurisdiction of Ontario and took no steps, including the filing of a statement of defence, before bringing its motion challenging jurisdiction.

This decision is unremarkable, but for the motion judge’s misapplication of the modified Van Breda test for jurisdiction simpliciter, which I have written about before,  including here , here and with a backgrounder here.

The motion judge’s jurisdictional analysis is as follows:

Analysis

Did the Respondent (plaintiffs) establish a real and substantive connection?

1.  The connection between the forum and the plaintiff’s claim

[21]      Given the residency of the plaintiffs and the fact that all damages and treatment were incurred within the Province of Ontario, there is a significant connection between the plaintiff’s claim and the Province of Ontario.  This was conceded by counsel.

2.  The connection between the forum and the defendant

[22]      There is a connection between the defendant and the Province of Ontario.  It is clear, as is the case with the plaintiff and her brother, that cross-border shoppers attend the Watertown store from Ontario.  Indeed, the plaintiff’s brother was able to review advertising of the Watertown store by way of the internet and determined that the Watertown store had the best product and best price available.  While the evidence may fall short of establishing that Home Depot U.S.A. Inc. carries on business in Ontario, it is conceded that the defendant is part of an international organization.  Home Depot Canada Inc. is the entity that carries on business in Ontario.  Given that they are both part of an international retailing organization, there is evidence to support a finding that the defendant’s internet advertising and membership within the international Home Depot organization, amounts to a significant connection to Ontario.  Counsel for the defendant confirmed that Home Depot USA and Canada were both self-insuring.

[23]      When considered as a whole, this level of activity, international business organization and presence in both Ontario and New York amounts to a significant connection with Ontario.

3.  Fairness

[24]      There is nothing in the evidence upon which I could conclude that it is unfair to require the defendant to defend this action in Ontario.  The Home Depot organization already has a presence in Ontario and advertises into Ontario by way of its active website.  Counsel could not direct me to any factor which would cause me to conclude that the defendant would suffer “unfairness” but only some “inconvenience”.

4.  General Principles

[25]      Counsel conceded that it could provide no evidence or law that would indicate that New York would be unwilling to enforce an extra-provincial judgment rendered on the same jurisdictional basis as that being asserted here.  It would appear, that if an Ontario defendant were to engage in a comparable international retailing organization, including internet advertising and presence in an foreign jurisdiction, Ontario would recognize and enforce a judgment rendered against the Ontario defendant by the courts of that foreign jurisdiction.  If an Ontario defendant were to engage in a comparable level of activity, as part of an international organization in a foreign jurisdiction, I believe Ontario would recognize and enforce a judgment rendered against the Ontario defendant by the courts of such a foreign jurisdiction.

[26]      Based on all the foregoing, I have concluded that the plaintiffs have established a real and substantial connection between the forum and the plaintiff’s claim and between the forum and the defendant.  The Ontario court may therefore assume jurisdiction based upon the real and substantial connection test.

The problem with the court’s approach is the undue emphasis on the plaintiff’s residency and locus of damages and treatment, both in Ontario. The Court of Appeal for Ontario was explicit in carving out Rule 17.02(h) -damages sustained in Ontario, as one of the rebuttable presumptions establishing jurisdiction over a foreign defendant. Although unclear, it does appear that the motion judge does not find that the plaintiffs demonstrated that they fell under any of the  other rebuttable presumptions under Rule 17.02, and, therefore, the plaintiff has the onus to establish a ‘real and substantial connection” among the Ontario court, the subject-matter of the dispute and the defendants. Recall that in Van Breda, the “core of the analysis” at the second stage “rests upon the connection between Ontario and the plaintiff’s claim and the defendant, respectively.”

The fact that Home Depot is an international organization, operating in Canada and elsewhere, is largely irrelevant. Home Depot has numerous stores in Canada, but the accident occurred in Ontario. There is really no jurisdictional basis for the plaintiffs to have sued in Ontario, rather than in New York.  The court’s reasons are replete with references to moving counsel conceding various jurisdictional facts, so it is difficult to surmise what the parry and thrust of the jurisdictional arguments were before the court.

The problem with a flexible legal test is that it admits of too much discretion at the expense of legal certainty. Take for the example the following approach to the now styled “consideration” in the Van Breda analysis on “the willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis”:

[25]      Counsel conceded that it could provide no evidence or law that would indicate that New York would be unwilling to enforce an extra-provincial judgment rendered on the same jurisdictional basis as that being asserted here.  It would appear, that if an Ontario defendant were to engage in a comparable international retailing organization, including internet advertising and presence in an foreign jurisdiction, Ontario would recognize and enforce a judgment rendered against the Ontario defendant by the courts of that foreign jurisdiction.  If an Ontario defendant were to engage in a comparable level of activity, as part of an international organization in a foreign jurisdiction, I believe Ontario would recognize and enforce a judgment rendered against the Ontario defendant by the courts of such a foreign jurisdiction.

If there was no evidence tendered on New York law, then how can the court undertake a comparative law analysis whatsoever? Intuition? Speculation?

Finally, website advertising and international presence as the jurisdictional basis for assuming jurisdiction over a foreign corporation is wholly unsatisfactory. Either the foreign corporation carries on business in Ontario, or it doesn’t. Assuming arguendo, that the only reason the plaintiff visited the Home Depot store in Watertown, NY was after her brother found the store location browsing the Home Depot USA website, whilst searching for the best deal. If so, then why don’t the company website terms of use apply? The “Homer TLC” Customer Support: Terms of Use read in part:

NO WARRANTIES; EXCLUSION OF LIABILITY
THE HOME DEPOT AND HOMER TLC MAKE NO REPRESENTATION ABOUT THE SUITABILITY OF THE MATERIALS ON THIS SITE FOR ANY PURPOSE. ALL SUCH MATERIALS ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. THE HOME DEPOT AND HOMER TLC SPECIFICALLY DISCLAIM ALL WARRANTIES AND CONDITIONS OF ANY KIND, INCLUDING ALL IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND -NON-INFRINGEMENT. NEITHER THE HOME DEPOT NOR HOMER TLC SHALL HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY ERRORS OR OMISSIONS IN THE CONTENT OF THIS SITE, FOR YOUR ACTION OR INACTION IN CONNECTION WITH THIS SITE OR FOR ANY DAMAGE TO YOUR COMPUTER OR DATA OR ANY OTHER DAMAGE YOU MAY INCUR IN CONNECTION WITH THIS SITE. YOUR USE OF THIS SITE IS AT YOUR OWN RISK. IN NO EVENT SHALL EITHER THE HOME DEPOT, ITS AFFILIATES OR AGENTS BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OF THIS SITE, THE MATERIALS IN THIS SITE, THE DELAY OR INABILITY TO USE THIS SITE OR OTHERWISE ARISING IN CONNECTION WITH THIS SITE, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES.

SOME STATES AND/OR JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.

General
This Site resides on a server in Atlanta, Georgia, USA. You agree that this agreement and your use of this Site are governed by the laws of the State of Georgia, USA. You hereby consent to the exclusive jurisdiction and venue of the courts, tribunals, agencies and other dispute resolution organizations in Atlanta, Georgia, USA in all disputes (a) arising out of, relating to, or concerning this Site and/or this agreement, (b) in which this Site and/or this agreement is an issue or a material fact, or (c) in which this Site and/or this agreement is referenced in a paper filed in a court, tribunal, agency or other dispute resolution organization. Use of this Site is unauthorized in any jurisdiction that does not give full effect to all provisions of this agreement, including without limitation this paragraph and the warranty disclaimers and liability exclusions above. The Home Depot has endeavored to comply with all legal requirements known to it in creating and maintaining this Site, but makes no representation that materials on this Site are appropriate or available for use in any particular jurisdiction. Use of this Site is unauthorized in any jurisdiction where all or any portion of this Site may violate any legal requirements and you agree not to access this Site in any such jurisdiction. You are responsible for compliance with applicable laws. Any use in contravention of this provision or any provision of this agreement is at your own risk and, if any part of this agreement is invalid or unenforceable under applicable law, the invalid or unenforceable provision will be deemed superseded by a valid, enforceable provision that most closely matches the intent of the original provision and the remainder of the agreement shall govern such use.

With the prior agreement of Home Depot, any claim, dispute or controversy arising out of, relating to or concerning this Site and/or this agreement shall be decided by binding arbitration in accordance with the Rules of the American Arbitration Association and any such arbitration proceedings shall be brought and held in Atlanta, Georgia, USA. The decisions of the arbitrators shall be binding and conclusive upon all parties involved and judgment upon any award of the arbitrators may be entered by any court having competent jurisdiction. This provision shall be specifically enforceable in any court of competent jurisdiction.

P.S. The court also found that Ontario was forum conveniens. 

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