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.

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.

On appeal of the Trial decision by Mr. Giza, the Court of Appeal disagreed with the Trial Court’s conclusion that failing to work during the notice meant that Mr. Giza lost his entitlement to reasonable notice or damages in lieu thereof. Instead, the Court of Appeal reasoned that the employer breached its contract of employment with Mr. Giza when it gave him inadequate notice of termination. Relying on the decision of the Supreme Court of Canada in Hadcock v. Georgia Pacific Securites Corp.[2], the Court of Appeal concluded that Mr. Giza’s right to damages in lieu of reasonable notice had accrued when he received inadequate notice by the employer. While Mr. Giza’s subsequent failure to work during the notice period amounted to a repudiation of his contract of employment and brought it to an end, the Court of Appeal said it did not take way or extinguish Mr. Giza’s cause of action for damages in lieu of notice. However, the Court of Appeal recognized the fairness of taking into account the notice, however inadequate, the employer provided Mr. Giza (during which he could have worked and been paid), and reduced that notice period from the 6 months reasonable notice the Court concluded Mr. Giza would otherwise be entitled to.

In this case the employer apparently mistook the appropriate notice Mr. Giza was entitled to as one delineated in the Employment Standards Act. It is important to note that unless an employer has a properly drafted employment contract restricting the employee’s entitlement to notice upon termination of employment to the minimum statutory notice provided in the Employment Standards Act, the employer will be exposed to a potential claim for common law reasonable notice, which indubitably far exceeds the minimum in the Employment Standards Act.

[2] [1999] 3 S.C.R. 425)

If you have not yet received this call, you will. “My wife/husband and I were in Scottsdale/Palm Springs/Maui last week and signed a contract for a town house/single family home/condominium.  How should we own it?” This article will tell you what to say.

Welcome to the US Tax System. When someone buys a property – any kind of property – in the United States, that person is buying an admission ticket to the US tax system.

•    If that property is rented, the rental income will be subject to US income tax.  Owners of US real estate who are not US citizens or residents (“non-US persons”) will be subject to withholding on the gross rental income at a rate of 30% (Section 1441(a) of the United States Internal Revenue Code (“Code”)).

•    On sale of the property, a Canadian resident who is a non-US person will be subject to US capital gain taxation (Code Section 897(a)(1)) (currently at rates of 15%) and subject to withholding on the gross sales proceeds at a rate of 10% (Code Section 1445(a)).  (Depreciation will generally be recaptured at a rate of 25%.)

•   Regardless of whether the property is rented, if not sold prior to death, the fair market value of the property on the date of the Canadian resident’s death will be fully subject to US estate taxation.  As a result of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the maximum estate tax rate for decedents dying in 2011 and 2012 has been reduced to 35%.  Absent further Congressional action, estates of decedents dying after 2012 will be subject to a maximum rate of 55%.

Planning for Rental Real Estate.  Withholding on the gross amount of rental income paid to a non-US person can be avoided by electing under Code Section 871(d) to treat the rental income as effectively connected with a US trade or business.  As a result of the election, rental income net of expenses will be taxed at graduated rates of 15% to 35% (Code Section 871(b)).  The Canadian resident who owns the US property will be required to file a US income tax return to report the income and expenses associated with the rental property.  In order to protect the personal assets of the owner from liability claims, the property will typically be owned by either a limited partnership, limited liability partnership, or limited liability limited partnership.  In such a case, the election under Code Section 871(d) is not available to the partnership, but must instead be made by the individual partners (US Treasury Regulations Section 1.871-10(d)(3)).

Avoiding US Estate Taxation. Numerous strategies have been advanced to avoid US estate taxation.  A discussion of all of them is beyond the scope of this article.  However, the balance of this article discusses four practical approaches available to Canadian residents and concludes with a brief explanation as to why some of the more common alternatives (corporations, partnerships, and joint ownership) are undesirable.

Sell Before Death.  The simplest way to avoid US estate taxes is not to own any assets deemed present in the United States (“US situs assets”).  Many Canadian residents view their ownership of a US vacation property as an asset to be held for only a limited period of time.  On sale of the property, the proceeds of sale may be repatriated (after payment of US income taxes).  As long as the sales proceeds are not invested in other US situs assets (for example, shares of US corporations or real or personal property located in the United States), a Canadian resident who is not a citizen of the United States has no US estate tax exposure.  Because life is uncertain and the US estate tax rate severe, individuals owning US real estate for a limited period of time may consider purchase of life insurance in order to fund the payment of the US estate tax (which is due within nine months of the owner’s death).

Relying on the Treaty Exemption. For many US citizens and residents, US estate taxes are not an issue.  This is because of a generous exemption which Code Section 2010 provides to each citizen and resident.  Unfortunately, Code Section 2107(c) limits the US estate tax exemption which is available to non-US persons to $60,000.  However, the Convention between Canada and the United States of America with Respect to Taxes on Income and on Capital (the “Tax Treaty”) allows Canadian residents to claim a portion of the US estate tax exemption (the “Treaty Exemption”).  The amount which is available is determined by a fraction found in Paragraph 2(a) of Article XXIXB of the Tax Treaty.  The numerator of the fraction is the total fair market value of US situs assets owned by the Canadian resident.  The denominator is the total fair market value of the Canadian resident’s worldwide assets.  A convenient rule of thumb is that if the Canadian resident’s worldwide assets do not exceed the amount of the US estate tax exemption available in the year of the Canadian resident’s death, there will be no US estate tax.

In many cases, the Treaty Exemption creates a false sense of security.  First, computation of the denominator is based upon US estate tax principles.  The denominator will include not only the Canadian resident’s bank accounts, brokerage accounts, all forms of real and personal tangible property; it will also include the death benefits payable under policies insuring the life of the Canadian resident, as well as the account balances in the retirement plans of the Canadian resident, such as RSPs and RRSPs.  Further, it is the fair market value of the Canadian resident’s US and worldwide assets which is used in computing the Treaty Exemption and US estate tax liability.  (This is quite unlike the Income Tax Act’s tax on deemed dispositions at death which is imposed only on the unrealized gain inherent in the Canadian resident’s assets.)

Example 1: Mr. Smythe owns four assets.

Mr. Smythe dies on February 1, 2011.  The Treaty Exemption will be $1,250,000 determined using the following fraction.

U.S. Situs Assets ($1 million) x   US Estate Tax Exemption ($5 million)
Worldwide Assets ($4 million)

Because Mr. Smythe’s US property has a value of less than $1,250,000, there will be no US estate tax liability if Mr. Smythe dies in 2011.

What if Mr. Smythe dies in 2013? The second reason why the Treaty Exemption may not provide the relief anticipated is because the US estate tax exemption may be less than anticipated.  Absent further Congressional action, the US estate tax exemption reverts to $1 million for decedents dying after 2012.  Mr. Smythe’s US estate tax liability will be significant.

Example 2: Assume the same facts as the preceding example except that Mr. Smythe dies in 2013 when the US estate tax exemption is $1 million.  The Treaty Exemption is reduced to $250,000 computed as follows.

U.S.Situs Assets ($1 million) x   US Estate Tax Exemption ($1 million) Worldwide Assets ($4 million)

The value of the US property exceeds the treaty credit by $750,000.  As a result, Mr. Smythe’s US estate tax liability will be $259,350.

One way in which to make the Treaty Exemption more effective is to reduce the amount of the denominator in the fraction described in Paragraph 2(a) of Article XXIXB of the Tax Treaty.

Example 3: Assume that Mr. Smythe transfers his Canadian residence, his life insurance policy, and (after withdrawal of the account balance) his Canadian RRSP to Mrs. Smythe.  Despite dying in 2013 when the US estate tax exemption reverts to $1 million, Mr. Smythe still has no US estate tax problem because he has reduced the value of his worldwide assets.

U.S. itus Property ($1 million) x  US Estate Tax Exemption ($1 million)
Worldwide Assets ($1 million)

By dividing assets such that the US situs property is owned by one spouse and the non-US situs assets are owned by the other spouse, the Treaty Exemption can be used most effectively.  However, without further planning this solution may prove to be ineffective.  Consider that if either Mr. Smythe or Mrs. Smythe dies and the survivor receives the deceased spouse’s assets, the facts of Example 2 are replicated, and the US estate tax liability will be incurred at the death of the last of Mr. and Mrs. Smythe.  To avoid increasing the worldwide estate of the surviving spouse, Mr. or Mrs. Smythe may deliver the assets he or she owns to the survivor using a Trust.  If the Trust is drafted properly in accord with US estate tax principles (which will determine the worldwide estate of the survivor for purposes of computing the Treaty Exemption), the result in Example 2 can be avoided and the result in Example 3 replicated.

Leveraging the US Property with Non-Recourse Debt.  Not every person purchasing US real estate is married.  Further, not every couple acquiring US real estate may be totally comfortable with one spouse owning only the US property and the other spouse owning all of the non-US situs assets.  As an alternative, the US property may be encumbered.  Code Section 2053(a)(3)(4) allows a deduction for the debts of the decedent in computing the taxable estate on which the US estate tax is assessed.  For example, a mortgage encumbering the US property will reduce its value for US estate tax purposes.  However, in order for the mortgage debt to be deductible on a dollar-for-dollar basis, the debt must be non-recourse (US Treasury Regulations Section 20.2106-2).  That is, the lender’s only remedy is to take the US property which is secured by the mortgage in the event the borrower defaults.  This type of financing may prove difficult to find, particularly in the current economic environment.

Ownership of a US Property Through a Trust.  Because property values may increase, because the amount of the US estate tax exemption is uncertain, because non-recourse financing may not easily be available, the most appropriate way for many Canadian residents to purchase US real estate is through a Trust.  The Trust is effective because the property is not owned by the Canadian resident at the time of the resident’s death.  The Trust is also advantageous in that it avoids probate, provides liability protection, preserves the owner’s control over the property by selection of a trustee, addresses the possible incapacity of the owner, and protects the heirs from US estate taxation after the owner’s death if the heirs die prior to sale of the US property.

The Trust presents two significant limitations.  First, the settlor of the Trust cannot be a beneficiary.  The practical reality is that in many circumstances this will mean that the Trust will be settled by one spouse for the benefit of the other spouse.  As long as the beneficiary spouse survives, the settlor spouse need not pay rent in order to occupy the US property.  However, once the beneficiary spouse dies or if the beneficiaries of the Trust are the children of the settlor, the settlor can only occupy the property if the children are present in the property at the same time.  Otherwise, the settlor must pay a fair market rental to the Trust for the use of the property.

The second difficulty in ownership of US real estate through a Trust relates to the situs of the Trust.  If the Trust is sitused in Canada, the settlor of the Trust will be taxable on the income realized from rental or sale of the property if either the settlor is the trustee (Income Tax Act (“ITA”) Section 75(2) or the settlor’s spouse is the trustee (ITA Section 74(1)).  As a result US income tax paid on the rental income or proceeds from sale of the property will not be creditable in computing the Canadian income tax liability of the settlor.  Consequently, a person or institution unrelated to the settlor must act as trustee of a Trust resident in Canada.

Alternatively, the Trust could be designed as a US resident Trust.  ITA Section 94 attributes the income of a non-resident Trust to the Canadian resident settlor.  Again, US income tax paid on rental or sale of the property will not be creditable in computing the Canadian income tax liability of the Canadian resident settlor.

As a result of the foregoing issues, Canadian residents buying US real estate will in most cases be best advised to own the property through a Canadian resident Trust with respect to which an unrelated person acts as trustee.  The primary beneficiary will be the settlor’s spouse and the successor beneficiaries will most likely be the settlor’s children.  If the Trust is properly drafted, there will be no US estate tax liability at the death of the settlor, the settlor’s spouse, the settlor’s children, or any other person who is a beneficiary of the Trust.  (The trustee is also not subject to US estate taxation inasmuch as the trustee has pure legal title and no beneficial interest in the property the Trust owns.)

Conclusion

Despite whatever disadvantages or complexities may be associated with the use of a Trust to own US real estate, it provides certainty (when the Trust instrument is properly drafted) that it is effective to avoid US estate taxes without disadvantageous US income tax treatment on rental or sale of the property.  In contrast, the other forms of ownership commonly utilized to bring with them serious liabilities or uncertainties in the tax treatment.

Joint Ownership.  Ownership of US real estate by a husband and wife as joint tenants with rights of survivorship or tenants by the entirety results in US estate taxation of the property at the deaths of both spouses.  There is no relief from US estate tax for a transfer to a spouse who is not a US citizen unless the transfer takes the form of a Qualified Domestic Trust qualifying under Code Section 2056A (Code Section 2056(d)).  Even with the use of a Qualified Domestic Trust, the US estate tax arising at the death of the first spouse is merely deferred until the survivor’s death (Code Section 2056A(b)(1)(B)).  Further, the US estate tax paid at the death of the first spouse is not creditable for Canadian tax purposes because the transfer to a spouse is generally exempt from the Canadian capital gains tax on deemed dispositions at death.

Corporations.  The traditional approach to avoiding US estate taxation has been to own the US real estate through a corporation.  If the US property is owned through a US corporation, it would be necessary to create a tiered structure in which the shares of the US corporation are owned by a foreign (presumably Canadian) corporation in order to avoid US estate taxation.  Otherwise, the stock of the US corporation will be treated as US situs property for US estate tax purposes (Code Section 2104(a)).  While effective if structured properly to avoid US estate taxes, ownership of US property through a corporation  results in adverse income tax treatment.  First, shareholder use of the property without payment of a fair market rental results in income in the form of deemed dividend distribution to the stockholder.  Second, no favorable capital gains relief is provided to corporations on sale of assets, including US real estate.  As a result, gain on sale of the property will be subject to US corporate tax rates of between 15% and 35%.

Partnerships.  Although partnership interests are not identified in Code Section 2104 as property deemed to be within the United States for US estate tax purposes, partnership interests are also not identified in Code Section 2105 as a non-US situs for US estate tax purposes.  This uncertainty regarding holding US real estate through a partnership as an effective way to avoid US estate tax suggests that this approach should only be used if the Canadian resident is willing to request a private letter ruling from the Internal Revenue Service.  The author’s informal conversations with representatives of the Internal Revenue Service suggest that the Service continues to be unwilling to rule on this issue (see Revenue Procedure 91-6, 1991-1 C.B. 431) or will not rule favorably if a ruling request were to be granted.

Robert E. Ward has practiced as a tax attorney for 30 years.  He is a principal in the law firm of Robert E. Ward and Associates, P.C., which has offices in Bethesda, Maryland and Vancouver, British Columbia.  Robert E. Ward and Associates, P.C. provides tax, business, and estate planning services and represents taxpayers before the Internal Revenue Service and the United States Tax Court.  The firm focuses on providing tax planning and representation to owners of privately-held businesses, integrating business succession planning with personal estate planning needs.  The firm also provides advice to citizens and residents of the United States who wish to expatriate so as to escape the US  tax system and assists clients in establishing foreign asset protection trusts, public and private tax-exempt charitable organizations, and all forms of business entities, both domestic and foreign.  Working closely with Canadian legal counsel and tax advisors, the firm offers these same services for individuals and businesses residing in Canada who acquire U.S. assets or engage in U.S. investment and business activities.

Some of the traditional methods of serving legal process substitutionally ordered by courts have included publication in the local newspaper; leaving documents at the party’s most usual residence with an adult person; taping the documents on the door of the last known residence of the party; faxing the documents at the last known fax number of the party; leaving it with a family member or a friend of the party who could bring the documents to the attention of the party; and the like.

However, with the commercialization of internet in the mid-1990s and the creation of social networking sites such as facebook, twitter, Linkedin and MySpace, it was a matter of time before courts adapted to technology and took notice of the internet medium and social networking sites as an alternate source for one to serve a party, otherwise difficult to find, with legal process.  In this regard, Australia can be credited with being one of the pioneers in embracing service by facebook with the decision of the Australian Capital Territory Supreme Court in MKM Capital Property Limited v Corbo and Poyser (No. SC 608 of 2008). In this case, a mortgage lender, MKM, obtained a default judgment against two defendants and after failing to serve the defendants personally with the default judgment sought an order to serve them substitutionally by facebook. Counsel for MKM was able to show personally identifiable information on the defendants’ facebook profiles including their birthdates, friends and email addresses and that the defendants were friends on facebook. The Court, satisfied that the facebook profiles or accounts belonged to the defendants, ordered substituted service of the default judgment by a private email message through computer to the defendants’ respective facebook pages.

The Canadian, New Zealand[1] and English[2] courts shortly followed suit. In the case of Canada, in Knott v. Sutherland[3], the Alberta Court of Queen’s Bench ordered subtitutional service of an amended statement of claim by sending it to the profile of the defendant on facebook together with a publication of a notice of the action in a local daily newspaper and a copy of the action sent to the human resources department of the defendant’s last known employer. Unfortunately, in the brief reported decision, the Court did not give reasons explaining the order.

In British Columbia, in 101 West Hastings Residential Limited Partnership v. Ursula Maria Schweighofer[4], Counsel for the Plaintiff, Mr. Gareth Carline of our firm, Kornfeld Mackoff Silber LLP, represented the Plaintiff who was suing for repayment of monies it had been required to pay to Revenue Canada on the Defendant’s behalf.  The Defendant’s former counsel advised that the Defendant was a non-resident and did not give her contact information. A diligent search for the Defendant’s residential address and telephone listing within the province returned no leads. However, the Plaintiff’s counsel who had the email address of the defendant and had been corresponding with the husband via email sought to find out from the husband whether the Defendant would accept service via email at his email address and the husband responded in the negative. At such point, counsel conducted an internet search of the defendant’s name and discovered profiles of the defendant on two social network sites, namely, on Linkedin and on facebook. Both profiles had the defendant’s name and the same geographical location, Nigeria.  On an application to serve the defendant substitutionally, the Court allowed the Plaintiff to serve the defendant substitutionally via her husband’s email and the former counsel’s office, as well as by sending a message to her of the claim via her Linkedin or facebook profile (although service via the latter mode was not specifically sought).

While courts are embracing technology in ordering substitutional service, there are some concerns with substitutional service using social networking sites. As with traditional alternatives to personal service, there is no guarantee that the party sought to be served will be served. In the case of social networking sites, a person registering for a social networking profile may not be who he or she claims to be. It is possible that the registrant on the site may be impersonating another person or may have a name identical to the party you are intending to serve. Another concern is that the party holding the social media accounts maybe an infrequent user of the accounts and may not receive notice of legal process in a timely fashion.  Whether in the ethernet world or in the bricks and mortar world, courts must consider  and weigh all available evidence in determining the probability or likelihood of achieving service of legal process on a party using whatever  alternative method of service an applicant is proposing the court to order.

[1] Axe Market Gardens v Craig Axe (CIV: 2008-485-267)

[2] Blaney v. Persons Unknown (unreported)

[3] [2009] A.J. No. 1539

[4] Vancouver Registry No. M114652