By Munera Lawyers
The courts have used the “real and substantial connection” test in determining whether they have jurisdiction to hear matters brought before them. The Supreme Court of Canada brought clarity and direction to this test in its decision in Club Resorts Ltd. v Van Breda [2012] 1 SCR 572 [“Van Breda”]. In this case, the Court set out four presumptive factors, which it found prima facie, to establish jurisdiction.[1]
The presence of the plaintiff in a jurisdiction is not a sufficient connecting factor on its own. However, an action may be brought against a defendant in the jurisdiction which they are domiciled or resident.[2] If a defendant is not resident in Ontario, an action may still be brought against them if the other presumptive factors are met.
Carrying on business in the jurisdiction is an appropriate connecting factor. However, the notion of “carrying on business” requires actual presence in the jurisdiction, and not simply a virtual presence through websites that can be accessed from anywhere. The Court found that maintaining an office or regularly visiting the jurisdiction are forms of actual presence.[3]
The Court cited rule 17.02(g) of the Uniform Court Jurisdiction and Proceedings Transfer Act, in finding that the “situs”, or the place, of the tort is an appropriate connecting factor.[4] However, the place of the tort may not be so clearly determined where parties reside or carry on business in different jurisdictions and conduct business together via email or other electronic means.
In Cannon v Funds for Canada Foundation, the Court found that “the tort of negligence, conspiracy, fraud and fraudulent misrepresentation” occurs where the misinformation is received or acted upon. By way of an example, if a party in Ontario received misinformation via email from someone they conduct business with in British Columbia, and they later acted upon this misinformation in Ontario, then the tort was committed in Ontario.[5]
The Court found that claims related to a contract made in the province is an appropriate connecting factor.[6] A contract is formed based on an offer by one party, accepted by the other or an exchange of promises supported by consideration. Where the parties to a contract are located in different jurisdictions, the contract will be formed in the jurisdiction where the last essential act of contract formation took place. The last essential contract formation could be the acceptance of the contract, or where parties are signing separately, it could be the notification of the acceptance of the contract.[7]
Although the Court established four connecting factors that are considered presumptive, this list is not exhaustive. There may be new connecting factors, depending on the specific facts of any case, which may create a presumptive connecting factor in assuming jurisdiction. In identifying new presumptive factors, the Court provided the following list of consideration which may give rise to a relationship between the claim and the forum. These considerations are:
In determining whether a new factor should be considered a presumptive connecting factor, it is required to conduct an analysis of the values of order, fairness and comity. This is because the presumptive factors generally point a relationship between the subject matter of the litigation and the forum. Thus, it would be reasonable to expect that a non-resident defendant would be called to answer legal proceedings in that forum.[9]
Where a presumptive connecting factor has been established, the domestic court has jurisdiction unless the party challenging jurisdiction rebuts this presumption by demonstrating that the factors do not point to any real and substantial connection, or that they only points to a weak connection, to the forum.[10]
If none of the presumptive connecting factors apply, or if the party challenging jurisdiction has successfully rebutted the presumption, then the domestic court cannot assume jurisdiction over the matter.[11]
[1] Van Breda” at para 90
[2] Ibid at para 86.
[3] Ibid at para 87.
[4] Ibid at para 88.
[5] 2010 ONSC 4517 at para 52. See also 2249659 Ontario Ltd. v Sparkasse Siegen, 2013 ONCA 354.
[6] Supra note 5 at para 88.
[7] Lapointe Rosenstein Marchand Melancon LLP v Cassels Brock & Blackwell LLP, [2016] 1SCR 851 at para 40.
[8] Supra note 1 at para 91
[9] Ibid at para 92
[10] Ibid at paras 94-95 and 98.
[11] Ibid at para 93.
NOTE: This article has been written for general information purposes only and does NOT constitute legal advice. For further questions and/or legal advice please consult a qualified lawyer.