Trips, Traps and Jurisdiction

Iⁿ order to determine whether a court has jurisdiction in a particular case, it must first be determined whether the claim is connected in a real and substantial way to the place where the claim is being brought. Subsequent to that, it must be determined whether there is another forum better connected to the claim.

Which is the best and most appropriate forum for the action?

In the October/November issue of Claims Canada, we explored the question of whether a case is connected to a particular locale in a real and substantial way.

In order to fully determine whether Ontario court’s have jurisdiction over claims brought in Ontario by non-resident claimants for occurrences which arise in Ontario, or over claims brought in Ontario but arising in other provinces or countries, it must also be determined whether another forum is better connected to said claim.

It is critical that claims handlers and in-house counsel go through the process of carefully investigating each claim at an early stage to determine whether there is any basis for a jurisdictional challenge. If jurisdiction is at all in issue, you must ensure you do not unintentionally “attorn” to the Ontario or another jurisdiction, if it is your intention to challenge a party’s right to claim in Ontario or another jurisdiction. Attornment occurs where a defendant, by his or her conduct, consents or submits to the jurisdiction, either by filing a pleading or entering an appearance or by participating in the litigation process without reserving its right to challenge the claimant’s chosen jurisdiction at a later stage.

Forum Non Conveniens Defined

On May 29, 2002, the Ontario Court of Appeal released five decisions on cases dealing with jurisdiction. ¹ The fact pattern was similar in each of these five cases. An Ontario resident suffered serious personal injury in another province or another country. The injured party returned home to Ontario, endured pain and suffering, received medical treatment, and suffered loss of income and amenities of life, all as a result of the injury sustained outside the province. After answering the question of whether the Ontario courts could entertain the injured party’s lawsuit against the out-of-province defendants — who are alleged to be liable in tort for damages — the Court then went on to ask whether the Ontario courts should take on the case, or whether the other country or province was a more appropriate forum for the action. The question is often framed in terms of whether the form is “convenient”, or forum non conveniens. The forum non conveniens rule states that where more than one forum is substantially connected to a claim, the more “convenient” forum is the one where the action should proceed. The legal principle at the heart of forum non conveniens was set out by the Supreme Court of Canada in Amchem Products Inc. v. British Columbia (Workers’ Compensation Board) as follows:²

[T]he overriding consideration which must guide the Court in exercising its discretion by refusing to grant [an application to stay an action on the ground of forum non conveniens] must … be the existence of some other forum more convenient and appropriate for the pursuit of the action and for securing the ends of justice. (emphasis added)

Factors in the forum non conveniens analysis

In Muscutt v. Courcelles, the Court set out the list of factors that have been developed in the case law over the years to determine which is the most appropriate forum. There is a certain amount of overlap between the considerations a court will take into account in the jurisdiction analysis and their analysis of “convenience” or the forum. The focus shifts in the convenience analysis shifts from whether the factor exists, to what weight it should be given in deciding where a claim should properly be brought. As in the case of jurisdiction, not all factors apply in every case. No one factors is determinative, but rather they must be viewed as a whole and a decision made on the basis of the totality of the factors.

1) Location of the Majority of the Parties

A number of parties may be involved in litigation. Take, for example, the situation of a resort in Florida which advertises in Ontario newspapers and solicits business from Ontario residents by inviting them to book vacations at the resort through the resort’s website or through a local travel packager. One of these Ontario residents books a trip, visits the hotel, slips on a wet floor and falls, sustaining injuries. The visitor then returns to Ontario, and is treated for the injuries over several months.

In that fact scenario, the parties could be the Ontario plaintiff, the local travel agent or tour packager in Ontario, the hotel owner who could be a resident in Florida, a maintenance company in Florida or any other number of possible parties. Where those parties are located is one of the many considerations to be taken into account in determining whether Ontario is a “convenient” forum.

2) Location of Key Witnesses and Evidence

The second factor is where key witnesses and documents for the trial of a dispute are located. Even if many of the parties are located in one place, most of the witnesses in a case or documents required as evidence may be located elsewhere. Whose testimony is needed for a full and fair adjudication of the dispute? What documents will be required to be entered as evidence, and who will be needed to prove them?

Looking again at our Floridian resort, assume that the resort was in Florida and run by an Floridian company, but that the resort ran its advertising and bookings through an Ontario travel packaging company located in Burlington. Assume that the slip and fall was caused by a greasy spill next to a buffet table at the resort, which was not cleaned for several hours after it occurred. Further, assume that the plaintiff was treated at a Florida emergency room, but that he received most of his medical treatment in Ontario hospitals and from one particular specialist upon his return home.

In this case, the witnesses from Ontario would include the plaintiff and possibly his traveling companions, if any. Depending on the allegations, witnesses might also be required from the Burlington travel company concerning the representations made about the quality and standards of the resort. Further Ontario witnesses would include the plaintiff’s treating doctors and in particular the specialist. Important documents from Ontario witnesses would include booking documentation, advertising, clinical notes and records and medical reports.

On the other hand, there might be important witnesses residing in Florida, including the owner of the resort, the maintenance and standards manager, kitchen or dining room staff who observed the spill and traffic around it, maintenance personnel who would be able to testify as to the system of maintenance in place to address spills and emergency medical personnel who first attended to the plaintiff. Some of the witnesses might be critically important. Important documents from Florida witnesses would include additional reservations and booking documentation, maintenance procedure manuals and guidelines, maintenance logs, personnel records and clinical notes and records from the treating emergency room. As such, this factor could weigh in favour of either Ontario or Florida.

Quite often, signed contracts contain clauses which specify where disputes are to be litigated. These forum selection clauses are usually upheld by the courts, unless exceptional circumstances can be shown which clearly demonstrate the parties did not have a “meeting of the
minds,” or where it can be shown that a party did not intend to be bound by the clause. For example, a forum selection clause included by a seller of goods on an invoice or packing slip may not itself mean anything if one party inserted the clause after the contract for the purchase of goods was

concluded, and the purchaser does not agree. Other contract questions a court will look at is where a contract was signed, and what law governs the contract. Each of these will have a role to play in the determination of whether a forum is “convenient.”

In our example, assume a signed contract was made between the resort and the plaintiff, through the travel packager in Burlington. The plaintiff signed a booking request form and made a deposit for the trip in Burlington, and the Florida resort then confirmed by a contract confirmation e-mailed to the packager, which set out the basic details of the trip and the booking and also included a sheet of “standard contract terms.” These terms included a clause that any disputes concerning the products or services provided through the contract were to be litigated in the courts of Swampville, Florida and Florida law was to apply. The “standard terms” were not referred to anywhere on the booking request form.

In this instance, the contract was made partly in Ontario, and partly in Florida. In this instance, if all aspects of the contract were valid, it would seem that Florida law was to apply, and further that the Florida courts had jurisdiction. However, the circumstances in which the contract was made raise questions as to how valid the contract may be. If the terms were never shown to the plaintiff, and he was never told that there were “standard terms” which formed part of the booking request, there may be a good argument that those terms do not apply. As such, this factor is also murky in terms of which forum is more “convenient.”

4) Avoidance of Multiplicity of Proceedings

Courts also consider whether bringing a lawsuit in a particular place might result in more than one legal proceeding arising out of the same events. For example, if in our case the Florida hotel had already sued its maintenance subcontractor for failing to clean the floor area around the buffet in accordance with its contract, this might be a good reason for bringing the plaintiff’s claim in Florida, as the issues were similar.

5) The Applicable Law

In tort cases, the law of the location where the tort occurs is generally the applicable law, regardless of where a case is commenced. In contract cases, as set out above, the law is either specified by the contract or defined by where the contract was made. Where a case is brought in Ontario and foreign law applies to the subject matter of the action, it may be difficult for an Ontario court to apply the law if the governing law is significantly different from Ontario’s.

In our case, the tort law of Florida would likely apply. Expert witnesses would be required to testify as to the applicable

Florida law, and it might be difficult or confusing for an Ontario jury to apply this law. If the plaintiff was suing in contract, the issue would not be as clear for the reasons set out above. In this case, where plaintiff would likely be suing the resort in negligence, therefore the law of Florida would apply. Civil court procedure, however, is governed in Ontario by the Ontario Rules of Civil Procedure, adding to the complexity of this factor.

The location where the cause of action arose is the number one consideration in determining the natural forum for an action. However, there are other geographical factors which may also be influential. For example, in the Florida example, it is not difficult to contemplate litigation in Florida, particularly since a number of the witnesses are there and Florida is relatively accessible. If the resort were, however, in a remote location such as Bali, and the majority of witnesses and evidence were in Ontario, this factor might be more heavily weighed in favour of the Ontario jurisdiction.

7) Whether Declining Jurisdiction Would Deprive the Plaintiff of a Legitimate Juridical Advantage Available in a Domestic Court

This factor raises the question, is there some advantage to the plaintiff in litigating in Ontario that would not be available to it in the other forum? This advantage may be procedural, for example if a jury trial is available in Ontario but not in another forum, or it may be substantive, for example if a plaintiff’s family members can claim for damages for loss of care, companionship and guidance under Ontario’s Family Law Act, but that kind of claim may not be possible under the laws of the other jurisdiction.

Going back to our example, the Court would have to decide whether there was something about the Ontario legal system and how it would apply to an action in this case which makes it preferable to the Florida legal system for the adjudication of the dispute. As with all of the other factors set out above, this will be dependent upon the specific facts of the case and there is no easy answer to this critical question.

Conclusion

When faced with a claim in Ontario against a non-resident insured, or when faced with a claim elsewhere in relation to a loss sustained in Ontario, it is critical to address at the outset the potential jurisdictional and forum non conveniens issue. The claim must be fully investigated at an early stage to determine the location of the parties, the witnesses and any relevant documents. A full understanding must be developed from the beginning of the true identity of all the parties. Where corporate entities are involved, it is crucial to determine at the outset what the corporate structure is, and where all of their subsidiaries and affiliates are located. Armed with this information, it is possible to determine what the appropriate forum is, and it is possible for counsel to properly advise as to where claims should be litigated if they reach that stage. In appropriate cases, it is then possible to bring those claims to a quick conclusion with early motions to stay the proceedings, and to save significant costs in the process.

John Olah is a partner in the law firm of Beard Winter LLP, and has been litigating at all levels of court for over 30 years. Melissa Kehrer joined Beard Winter LLP’s litigation team upon her call to the Bar in 2002. John and Melissa have worked together on inter-jurisdictional cases involving Canada, the United States, Europe and the Caribbean.

1. Muscutt v. Courcelles (Docket No. C35934); Sinclair v. Cracker Barrel Old Country Store Inc. (Docket No. C35699); Leufkens v. Alba Tours International Inc. (Docket No. C36006); Lemmex v. Sunflight Holidays Inc. et al. (Docket No. C37455) and Gajraj v. DeBernardo (Docket No. C36992).

2. [1993] 1 S. C. R. 897 (S. C. C.) at paragraphs 60 and 61

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In tort cases, the law of the location where the tort occurs is generally the applicable law, regardless of where a case is commenced.