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Order in the Court? The Van Breda Trilogy – Part I – An Overview

Posted in Conflict of Laws, Constitutional, Features, Procedure, Torts, Van Breda Trilogy
Brandon KainElder MarquesByron Shaw

Order in the Court? The Van Breda Trilogy – Part I – An Overview

In three cases released on April 18, 2012, the Supreme Court of Canada substantially reformulated the common law principles of private international law. In the coming weeks, Canadian Appeals Monitor will provide in-depth coverage of the Court’s judgments in Van Breda, Black, and Éditions Écosociété (the “Van Breda Trilogy”), addressing the implications of these judgments for jurisdiction simpliciter, forum non conveniens, choice of law and constitutional principles regarding the territorial jurisdiction of the superior courts and provincial legislatures. In this post – the first of a special five-part series – we discuss the facts and holdings in the individual cases, and provide an introduction to the Supreme Court’s reasoning.

Facts of Van Breda and Charron

The Supreme Court’s judgment in Van Breda dealt with a consolidated appeal from the Ontario Court of Appeal’s decision in two motions before the Ontario Superior Court of Justice (Club Resorts Ltd. v. Van Breda and Charron Estate v. Village Resorts Ltd.). Both cases concerned Ontario tourists injured while on vacations abroad.

In Van Breda, racket sport professional Viktor Berg and his spouse, Van Breda, took a trip to Cuba. The couple stayed at the SuperClub’s Breezes Jibacoa resort, which was managed by Club Resorts, a Cayman Islands company. Berg provided two hours of tennis lessons per day at the resort in exchange for accommodation and resort amenities for him and Van Breda. This arrangement was made through Sport au Soleil, a business operated by an Ottawa-based travel agent, Denis. On the first day of the trip, Van Breda tried to do some exercises on a soccer goal on the beach, which collapsed. Van Breda became a paraplegic. She spent a few days in a Cuban hospital and returned to Calgary, where her family lived. Berg and Van Breda subsequently moved to British Columbia. The two never returned to Ontario on account of Van Breda’s injuries. Berg, Van Breda and her family members commenced an action framed in tort and contract in Ontario against Denis, Club Resorts and companies associated with Club Resorts.

In Charron, Dr. Charron and his wife booked a vacation package through a travel agent, Bel Air Travel Group Ltd. The package was offered by Hola Sun Holidays Ltd., which sold packages offered by SuperClubs. Charron and his wife bought an all-inclusive package at the Breezes Costa Verde hotel in Cuba. The hotel was owned by a Cuban corporation but managed by Club Resorts. On the fourth day of his trip, Dr. Charron went scuba diving and drowned. Mrs. Charron and her children sued Bel Air, Hola Sun and foreign defendants, including Club Resorts, for breach of contract and negligence.

The Lower Court Judgments in Van Breda and Charron

In both actions, the foreign defendants moved for a stay on the basis that the Ontario Superior Court lacked jurisdiction or, alternatively, that it was not the convenient forum. The motion judges dismissed the motions on the basis of the eight-factor Muscutt v. Courcelles test for jurisdiction simpliciter.

After the case had been argued, the Ontario Court of Appeal invited the parties (and some interveners) back before a five-member panel to reconsider the Muscutt test for jurisdiction simpliciter. In a unanimous decision authored by Sharpe J.A. (the author of Muscutt), the Court cited judicial and academic commentary criticizing the Muscutt framework on the basis that it led to uncertainty, unnecessary complication and conflation of the tests for jurisdiction simpliciter and forum non conveniens. Furthermore, the Court pointed to legislative developments in other provinces including the enactment of statutes based on the Uniform Law Conference of Canada’s Court Jurisdiction and Proceedings Transfer Act, which attempted to codify and clarify the rules for jurisdiction simpliciter and forum non conveniens. In the end, the Court agreed that after seven years, the Muscutt framework required a “tune-up” in order to bring certainty and predictability to the law.

The Ontario Court of Appeal’s conclusion in Van Breda was somewhat ironic in that Muscutt itself was an attempt to bring certainty and predictability to the law of jurisdiction following the Supreme Court of Canada’s decisions in the early 1990s in Morguard Investments Ltd. v. De Savoye and Hunt v. T&N plc. In Morguard and Hunt, the Supreme Court of Canada held that principles of “order and fairness” were constitutional imperatives that constrained the jurisdiction of superior courts. The principles of order and fairness required there to be a “real and substantial connection” for a court to assert jurisdiction against an out-of-province defendant. The Supreme Court provided little if any guidance on the “real and substantial connection” test, preferring instead to leave it as “deliberately general”. The Ontario Court of Appeal’s Muscutt framework was essentially a list of 8 considerations for Ontario courts to consider when determining whether there is a real and substantial connection for the purposes of jurisdiction simpliciter.

The Ontario Court of Appeal’s tune-up to Muscutt in Van Breda involved a presumptive approach; that is, a real and substantial connection could be presumed to exist in certain circumstances. Specifically, the presumption would apply if the claim fell within one of the enumerated grounds for service ex juris under rule 17.02 of the Rules of Civil Procedure (except r. 17.02(h) (damages sustained in Ontario) and 17.02(o) (necessary or proper party)). If the claim did not meet any of these grounds, then the plaintiff could still attempt to demonstrate that the real and substantial connection had been made out. Furthermore, the defendant could rebut a presumption of jurisdiction by demonstrating that the real and substantial connection was not made out. The Court emphasized that the focus of the real and substantial connection test was on connecting factors between the jurisdiction, the claim and the defendant. Other considerations emphasized in Muscutt, such as fairness, were not “free-standing factor[s] capable of trumping weak connections” but rather served as “analytic tools to assist the court in assessing the significance of the connections between the forum, the claim and the defendant.”

Although Muscutt had advocated a distinction between jurisdiction simpliciter and forum non conveniens, the Van Breda court attempted to provide a clearer demarcation between the two tests. The Court held that jurisdiction simpliciter is a question of law that focuses on the strength of the connections between the jurisdiction, the claim and the defendant. Forum non conveniens is a matter of judicial discretion; it asks whether there is another clearly more appropriate forum for the action based on individual case-by-case considerations, such as the location of witnesses, evidence, governing law and various other discretionary factors.

Applying the new test, the Ontario Court of Appeal dismissed the appeals of the foreign defendants in Van Breda and Charron.

Black and Éditions Écosociété

The Ontario Court of Appeal had occasion to apply the Van Breda test in a number of cases, including Black and Éditions Écosociété. Both of these cases dealt with jurisdiction simpliciter and forum non conveniens in the context of defamation actions brought in Ontario against out-of-province defendants. In Black, Conrad Black brought 6 libel actions against 10 defendants (8 of whom resided in the U.S. and 1 who resided in Israel) who were directors, officers and advisors of Hollinger International. Each of Black’s claims revolved around publication of statements from a report of a Special Committee that had conducted an investigation into non-compete payments previously made by Hollinger to Black. Black alleged that the statements were defamatory and had been posted on Hollinger’s website and were downloaded, read and republished in Ontario by Canadian newspapers.

In Éditions Écosociété, an Ontario-based mining company, Banro Corp., brought an action for defamation in Ontario against a publishing company, an author, researchers and editors of a book. Banro alleged that it had been libeled by allegations in the book that it committed human rights violations and fraud in order to further its financial interests in Africa. The defendants were all resident in Quebec.

The defendants in both cases moved to stay the Ontario actions on the basis that the Ontario courts lacked jurisdiction or alternatively, that there were more convenient fora for the resolution of the disputes. The defendants in Black noted that Black had been convicted for mail fraud and was serving a sentence in the United States and pointed to ongoing civil actions by Hollinger in Delaware and Illinois. The defendants in Éditions Écosociété pointed to an existing defamation action in Quebec by a different plaintiff involving the same book.

Applying its test in Van Breda, the Ontario Court of Appeal held that the Ontario Courts did have jurisdiction and declined to stay the action on the basis of forum non conveniens.

The Trilogy Before the Supreme Court

The Supreme Court of Canada, in three unanimous judgments authored by LeBel J., dismissed each of the appeals. The Supreme Court revisited the concept of the “real and substantial connection” test for jurisdiction simpliciter and the forum non conveniens test. Furthermore, although it was unnecessary to decide the issues in the cases, in Éditions Écosociété, LeBel J. commented extensively in obiter on the appropriate choice of law rules in tort, particularly in defamation claims. Finally, the Court’s reasons touch on various aspects of constitutional law, including the territorial limits upon the scope of both judicial and legislative jurisdiction.

The details and merits of the Supreme Court’s approach to jurisdiction simpliciter, forum non conveniens, choice of law and constitutional law in the Van Breda Trilogy will be analyzed extensively by Canadian Appeals Monitor in the coming weeks. As a preliminary observation, however, it is notable that the Court expressly attempts to re-calibrate the balance between the twin principles of “order and fairness” that are said to underlie Canadian conflict of law rules, an issue which lower courts and legislatures have been grappling with for over two decades. The Trilogy suggests tipping the scales in favour of “order” so as to bring a greater degree of certainty and predictability to private international law. As the series of posts to follow will discuss, it remains to be seen whether the Trilogy will in fact provide the necessary guidance to bring “order” to the courts.