Posts by Susan Smith (guest author)

Susan Smith (guest author)
Thursday, May 17th, 2012    Posted by Susan Smith (guest author) (posts)
Susan Smith (guest author)
Susan Smith has been a lawyer in Vancouver since 1985. She has a wide range of experience in commercial and constitutional litigation, including products liability and work in the construction and forestry industries. Susan has been a guest speaker and contributor at several CLE conferences and other educational programs in the Lower Mainland and northern British Columbia.

Forum non conveniens is a legal doctrine which allows a court to decline to exercise its jurisdiction over a lawsuit, on the basis that a court in another forum, or jurisdiction, is more suitable or convenient.  Normally, forum non conveniens arises when a defendant challenges a local court’s exercise of jurisdiction.  In a recent case involving two Ontario plaintiffs, who were injured on separate holidays in Cuba, the Supreme Court of Canada held in Club Resorts Ltd. v. Van Breda (and Charron), 2012 SCC 17 that the court’s exercise of discretion to defer to another court’s jurisdiction is highly dependent on the facts, or individual context, of each case.

The Supreme Court of Canada emphasized the distinction between the existence of a court’s jurisdiction, and the exercise of it.  If jurisdiction is established (by a “real and substantial connection” between the subject matter of the litigation and the local forum), a court may nevertheless be asked not to exercise that jurisdiction on the basis of forum non conveniens.

In order to establish forum non conveniens, a defendant must show that an alternative forum is clearly more appropriate and that, in light of the characteristics of the alternate forum, it would be fairer and more efficient to chose that forum and to deny the plaintiff the benefits of the local forum.  It is not enough to show that a comparable forum exists.  A court must be able to conclude that the other forum is in a better position to dispose fairly and efficiently of the litigation.

A defendant may raise diverse facts, considerations and concerns in support of an argument that there is a fairer and more efficient forum elsewhere.  In Club Resorts Ltd. v. Van Breda (and Charron), the Supreme Court of Canada reviewed the wide range of factors considered in the case law, along with the factors in the Court Jurisdiction and Proceedings Transfer Act such as:

(a)   the comparative convenience and expense for the parties and their witnesses, in litigating in the local court or in any alternative forum;

(b)   the substantive and procedural law to be applied to issues in the proceeding;

(c)   the desirability of avoiding multiplicity of legal proceedings;

(d)   the desirability of avoiding conflicting decisions in different courts;

(e)   the enforcement of an eventual judgment; and

(f)   the fair and efficient working of the Canadian legal system as a whole.

In view of the goals of fairness and efficiency, the Supreme Court of Canada concluded that the doctrine of forum non conveniens focuses on the individual context of each case.  The relevant factors to be considered include:

(i)     the domiciles of the parties;

(ii)   the locations of the witnesses and pieces of evidence;

(iii)  the comparative cost of transferring the case to another jurisdiction;

(iv)  the impact of a transfer on the conduct of the litigation or on related or parallel proceedings;

(v)   the loss of juridical advantage (for example through a local or procedural law);

(vi)  the possibility of conflicting judgments

(vii) problems related to the recognition and enforcement of judgments; and

(viii)the relative strengths of the connections of the two parties.

In favour of Van Breda and Charron, the Supreme Court of Canada declined to give effect to the forum non conveniens argument and concluded that Club Resorts Ltd. had not met its burden of showing that a Cuba forum would be clearly more appropriate.  A trial in Cuba would present serious challenges to the Ontario plaintiffs, including problems with witnesses, concerns about local procedures, and expenses connected with litigating in Cuba.  The Court concluded, “All things considered, the burden on the plaintiffs clearly would be far heavier if they were required to bring their action in Cuba.  They would face substantial additional expenses and would be at a clear disadvantage relative to the defendants.”  Hence, it could not be said that it would be fairer or more efficient to dispose of the claims in Cuba, and both actions were allowed to proceed in Ontario where they were initially commenced.

The outcome in Club Resorts Ltd. v. Van Breda (and Charron) illustrates the heavy burden on a defendant who is raising an argument of forum non conveniens. Although a local forum is usually favoured, when litigation involves multiple claims, or parties in multiple jurisdictions, the individual context may be sufficient to meet the test for the forum non conveniens doctrine.

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Susan Smith (guest author)
Monday, May 7th, 2012    Posted by Susan Smith (guest author) (posts)
Susan Smith (guest author)
Susan Smith has been a lawyer in Vancouver since 1985. She has a wide range of experience in commercial and constitutional litigation, including products liability and work in the construction and forestry industries. Susan has been a guest speaker and contributor at several CLE conferences and other educational programs in the Lower Mainland and northern British Columbia.

The Supreme Court of Canada recently confirmed that in determining whether a “real and substantial connection” exists for a court to assume jurisdiction over a case involving a foreign accident or foreign defendant, advertising alone within a Canadian jurisdiction is not sufficient to establish that a business is being carried on there, regardless of whether that advertising is physical or virtual.

The Court found on April 18, 2012 in Club Resorts Ltd. v. Van Breda (and Charron) that a “real and substantial connection” had been established by way of physical circumstances linking Ontario and the foreign torts (or accidents) claimed by both parties. Both plaintiffs resided in Ontario and purchased travel packages to Cuba from an agent in Ontario, and while on vacation in Cuba (at the defendant’s hotel) both plaintiffs suffered catastrophic accidents. The Supreme Court of Canada revised the test to be used for evaluating the existence of jurisdiction of our courts in relation to foreign matters.

The Supreme Court of Canada stated that while the “real and substantial connection” test was a well-established constitutional principle, there was a need to give certainty about its meaning and conditions of application, and “greater direction on how it applies”. The Court reviewed the factors traditionally considered by the courts (the Muscutt factors), together with the factors listed in the Court Rules for service beyond the jurisdiction, and factors in the Court Jurisdiction and Proceedings Transfer Act.

The Court stated, “The development and evolution of the approaches to the assumption of jurisdiction … suggest that stability and predictability in this branch of the law of conflicts should turn primarily on the identification of objective factors that might link a legal situation or the subject matter of litigation to the court that is seized of it. At the same time, the need for fairness and justice to all parties engaged in litigation must be borne in mind in selecting these presumptive connecting factors.”

The Supreme Court then formulated a list of “presumptive connecting factors” to be used in determining whether or not a “real and substantial connection” for jurisdiction in tort cases exists. This list of “presumptive connecting factors” is not exhaustive, and other connecting factors may be raised. When one or more of the presumptive connecting factors applies, a court will assume jurisdiction unless the defendant can show the absence of a real and substantial connection. If none of the presumptive connecting factors apply, the plaintiff must nevertheless prove that a sufficient relationship exists between the litigation and the forum.

The following factors are now the “presumptive connecting factors” that normally entitle a Court to assume jurisdiction over a tort dispute:

(i) the defendant is domiciled or resident in the province;
(ii) the defendant carries on business in the province (with some actual presence in the jurisdiction such as maintaining an office or making regular visits);
(iii) the tort was committed in the province; and
(iv) a contract connected with the dispute (or tort) was made in the province.

The Supreme Court of Canada specifically rejected the plaintiff’s presence in the jurisdiction as a presumptive connecting factor, and also the location of where the damage was sustained which may raise even more complex and difficult issues.

It is clear that the Supreme Court of Canada welcomes the development of additional factors over time, provided they are similar in nature to the factors listed above. Relevant considerations for developing new “presumptive connecting factors” include:

(i) similarity of the connecting factor with the already recognized presumptive connecting factors;
(ii) treatment of the connecting factor in the case law;
(iii) treatment of the connecting factor in the statute law; and
(iv) treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.

As explained by the Court, the constitutional values of order, fairness and comity underlie all of the presumptive connecting factors, whether listed or new. All presumptive connecting factors point to a relationship between the subject matter of the litigation and the forum so that it would be reasonable to expect the defendant would be called on to answer legal proceedings in that forum. Where such a relationship exists, Canadian courts would recognize and enforce a foreign judgment on the basis of the presumptive connecting factor in question, and foreign courts could be expected to do the same with a Canadian judgment. The assumption of jurisdiction is thus consistent with the principles of order, fairness and comity.

The Supreme Court provided guidance on how a party can rebut a “presumptive connecting factor”. That party must establish facts, which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum. An example is when a defendant is carrying on business in the forum (with actual presence) but the subject matter of the litigation has little or no connection with that business.

In conclusion, under the Van Breda-Charron test, to establish a “real and substantial connection” for jurisdiction, the party seeking jurisdiction has the burden of identifying a “presumptive connecting factor” that links the subject matter of the litigation, or the defendant, to the forum in a real and substantial way. There are now four “presumptive connecting factors” for tort claims but the list is not exhaustive. Courts will undoubtedly identify additional presumptive factors over time.

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