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In Van Breda,[1] a recent decision of the Supreme Court of Canada, the Court articulated a test which, if satisfied, allows Canadian courts to adjudicate disputes against persons who are not physically present in their territory.

It is often particularly important to persons who have potential claims against out-of-province defendants to be able to pursue their rights in their home province.  People are often more familiar with the laws of the province in which they reside.  In addition, by pursuing a legal action in their home province, claimants may save additional costs and significant time, and avoid delays that can be associated with out-of-province lawsuits.  Finally, in some circumstances the laws of the claimant’s home province may offer more protection and provide a more favourable framework for plaintiffs.

There are numerous circumstances in which a claim may arise.  Your claim against out-of-province persons may arise from an injury you suffered while travelling abroad, your investment in out-of-province companies, your purchase of products made by out-of-province manufacturers, or even defamatory words spoken against you.

If you have suffered damages as a result of such incidents, first thing you need to determine is where to commence an action against persons who are liable.  This article will help you determine if you should consider bringing a claim in Ontario.  And, of course, you should always consult your legal rights and the proper course of action with a lawyer.

Real and Substantial Connection with Ontario
The Ontario court can entertain claims against out-of-province defendants if they have a “real and substantial connection” with Ontario.

To establish that connection, the plaintiff must show that even though the defendant is not physically within the realm of the court, it has otherwise established a strong connection with Ontario such that it is fair and reasonable that the Ontario court adjudicate the dispute in which that defendant is involved.

Over the course of many years, the real and substantial connection test had been developed in a way that gave judges considerable latitude in exercising their discretion to assume jurisdiction over non-resident defendants.  This piece-meal development resulted in unpredictability as to how the test should apply in the circumstances of each case.  In the long-awaited Van Breda decision, the Supreme Court fine-tuned that test for the benefit of further clarity and predictability in future cases.

Personal Injury Lawsuit against non-Canadian Defendants
In June 2003, Ms. Van Breda and her spouse went on vacation to Cuba, staying at a resort managed by Club Resorts Ltd., a company formed outside of Canada.  A tragic accident occurred on the first day of their stay; Ms. Van Breda was seriously injured and became paraplegic.  The couple returned to Canada shortly after the incident, and brought a lawsuit against Club Resorts in the Ontario Superior Court of Justice.  Club Resorts attempted to stop the legal proceeding on the ground that the Ontario court lacked jurisdiction to entertain the claims.  In 2008, the Ontario Superior Court held that it had jurisdiction and ruled that the lawsuit should proceed.  In 2010, the Ontario Court of Appeal upheld the Superior Court’s ruling.   The defendants appealed to the Supreme Court of Canada.

The Supreme Court of Canada’s Ruling
In Van Breda, the Supreme Court elaborated on the real and substantial connection test.  The Court was informed of the considerable discretion that had been vested in the hands of judges, and noted that the test should be reformulated in a manner that would facilitate an orderly resolution of conflicts.
To that end, the Supreme Court recognized the following four “connecting factors”:

  1. the defendant is domiciled or resident in the province;
  2. the defendant carries on business in the province, which requires some form of actual; not only virtual, presence in the jurisdiction;
  3. the tort was committed in the province; and
  4. a contract connected with the dispute was made in the province.

Once any of these factors is established, the court will presumably have jurisdiction to hear and adjudicate the case against a non-resident defendant.  The defendant will, however, be given an opportunity to show that although there is a connecting factor, the court should not assume jurisdiction.  In order to succeed, the defendant is required to prove that the link between the lawsuit and the province is trivial.

Ontario Court Could Resolve the Dispute
Applying these guidelines to the facts of Ms. Van Breda and her spouse’s case against Club Resorts, the Supreme Court held that the Ontario court had jurisdiction over the dispute.  The plaintiffs’ contractual relationship with Club Resorts, which was established in Ontario through Club Resort’s Ontario-based agent, was sufficient to establish the court’s jurisdiction.  Given their real and substantial connection with Ontario, it was reasonable to require the defendants to answer the legal proceeding against them in the province.

Ontario Court’s Jurisdiction in other Claims
The Van Breda decision provides guidance in claims founded in other torts such as negligence (where the claimant in harmed by another person’s negligent conduct), negligent misrepresentation (where the claimant is harmed by relying on misrepresentations negligently made by another person), and defamation.  Of note, in some instances such as consumer protection and investors’ class actions, the plaintiff’s claims and the court’s jurisdiction may be established by Acts of Parliament,[2] which may independently create jurisdiction for the court.  Each case needs to be assessed closely in light of its particular circumstances by a lawyer with expertise in the relevant area.

We Can Help
If you have potential claims against persons situated outside of Ontario, it may be possible to prosecute your claims in the Ontario court.  Our lawyers have a track record in serving clients in a wide variety of legal areas.  For a free consultation, and to discuss your legal rights with a member of our team, contact Siskinds LLP toll-free at (877) 672-2121.

[2] For example, the Ontario Consumer Protection Act applies to all consumer transactions (as defined in the Act), if the consumer is located in Ontario when the transaction takes place, even through the supplier may not be located in Ontario.  Also, the Ontario Securities Act provides for private right of action for misrepresentations in the secondary market where the company is a reporting issuer in Ontario, even though it may not be located in Ontario, nor have any other connections with the province.

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