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Law Times • February 4, 2013
Focus On
International/Cross Border Law
SCC ruling on jurisdiction
What is Van Breda's impact one year later?
BY Julius Melnitzer
For Law Times
C
anadian courts have had a
year to interpret Club Resorts
Ltd. v. Van Breda, the Supreme
Court of Canada's landmark
decision on jurisdiction.
In its reasons, the top court sought
greater predictability and certainty in
the law related to jurisdiction. By all accounts, it has achieved that goal.
"The Supreme Court has definitely
been successful in making more consistent and predictable the answer to the
question of when Canadian courts will
take jurisdiction," says Jon-David Giacomelli of Cambridge LLP's Burlington,
Ont., office.
Van Breda and its sister decision, Club
Resorts. Ltd. v. Charron, were travel cases
involving death and injury to Canadian
tourists abroad. The foreign defendants
objected to lawsuits in Canada on the basis that there was no real and substantial
connection between the litigation and
the jurisdiction.
But initial indications are that courts
will extend Van Breda beyond tort cases.
Most significantly, the Supreme Court itself applied Van Breda to two defamation
actions, Breeden v. Black and Éditions Écosociété Inc. v. Banro Corp., released concurrently with Van Breda and Charron.
"Van Breda applies to a wide range of
proceedings involving economic torts, fiduciary duties, confidentiality, product liability, consumer-related issues, pharmaceutical cases, and securities class actions,"
says Peter Pliszka, a partner at Fasken
Martineau DuMoulin LLP's Toronto office who represented Club Resorts.
In the year following Van Breda's release, Ontario and Alberta courts applied
the judgment to family law cases (Wang v.
Lin), interprovincial class actions based
in contract (Sears Canada v. C & S Interior Designs Ltd.), intentional misappropriation proceedings (Zhang v. Hua Hai Li
Steel Pipe Co. Ltd.), an action on a promissory note (Nagra v. Malhotra), and claims
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'The decision completely
changes the road map for
determining jurisdiction,'
says Barry Glaspell.
based on contribution and indemnity
(Yemec and Rapp v. Atlantic Lottery Corp.).
But just what is it that Van Breda has
or hasn't done?
"The decision completely changes the
road map for determining jurisdiction,"
says Barry Glaspell of Borden Ladner
Gervais LLP's Toronto office.
"But it doesn't change the traditional
two-step approach."
At the outset, the Supreme Court
set out four categories that could found
a presumption of a real and substantial
connection. The presumption arises only
when the defendant is domiciled or resident in the jurisdiction or carries on business there, the tort took place there or a
contract connected with the dispute was
made there.
Absent these presumptive factors,
courts won't assume jurisdiction. "The
court warned that jurisdiction should
not be assumed by combining nonpresumptive factors," says Glaspell's colleague Ira Nishisato.
The top court further narrowed the
real and substantial connection test by
limiting some of the four categories.
The simple presence of a plaintiff in
a particular jurisdiction or the fact that
the plaintiff has suffered damages there,
for example, won't be enough to trigger a
presumption of jurisdiction.
"'Tag' or 'gotcha' jurisdiction is dead
in Canada," says Glaspell. "And the fact
that having sustained damages in the jurisdiction is not a presumptive connection represents a big change from previous jurisprudence."
As well, the top court observed that
the "carrying on business" category required "some caution" to avoid creating
"forms of universal jurisdiction" in tort
claims.
"The court stated, for example, that
active advertising in the jurisdiction or
the fact that a web site can be accessed
from the jurisdiction would not suffice
to establish that the defendant is carrying on business there," says Nishisato.
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"The court also held that carrying on
business requires some form of actual,
not only virtual, presence in the jurisdiction, such as maintaining an office there
or regularly visiting the territory of the
particular jurisdiction."
The predictability and certainty for
which lawyers are lauding Van Breda,
then, are in the relative exclusivity and
immutability of the four presumptive
categories.
While the top court recognized the
potential for creating new presumptive
categories, it was extremely cautious in
doing so. The court opined that new categories should be "similar in nature" to
the existing ones and that their determination should include reference to existing Canadian law as well as the approach
to jurisdiction in other legal systems with
a shared commitment to order, fairness,
and comity.
"It will likely be a steep climb to convince a court that a new presumptive category should be recognized," says Nishisato. "An argument in favour of a new
presumptive category will likely have to
be built on a significant body of existing
case law that supports the assumption of
jurisdiction for the proposed category. It
may also require an extensive evidentiary
record and experts on foreign law and
practice, which could be a costly and ambitious exercise for clients."
Quite apart from the difficulty plaintiffs will have in establishing new categories, defendants will have at least two
other escape routes even where a party asserts jurisdiction on the basis of an existing presumptive category.
First, the defendant will have an opportunity to rebut the presumption by
showing that the connection is insufficient to establish a real and substantial
one.
"Where a defendant points to a weak
relationship between a claim and an Ontario court, for example, taking jurisdiction would not be consistent with the
rules of comity, fairness, and order that
See Onus, page 10
13-01-31 10:29 AM
