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

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.

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