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Jurisdiction simpliciter in a straitjacket

Trials & Tribulations
|Written By Antonin I. Pribetic
Jurisdiction simpliciter in a straitjacket

The recent Ontario Superior Court decision in Salus Marine Wear Inc. v. Queen Charlotte Lodge Ltd. highlights the continuing plight of Canadian conflict of laws jurisprudence and the perplexing inability of counsel to properly brief the court on the analytical distinction between jurisdiction simpliciter (i.e. whether the court may assume jurisdiction) and forum non conveniens (i.e. whether the court should assume jurisdiction).

In Salus Marine, the plaintiff brought a simplified procedure action under Rule 76 of the Ontario Rules of Civil Procedure in September 2009. The company claimed damages for breach of contract against a British Columbia-based luxury fishing lodge, for non-payment for 238 personal floatation jackets, manufactured by the Salus Marine in Kitchener, Ont.

The defendant had no assets or any presence in Ontario and brought a motion challenging jurisdiction “under Rule 17.06 for an order staying the action on the basis that the proper and more convenient forum is British Columbia.” Rule 17.06 reads:

17.06 (1) A party who has been served with an originating process outside Ontario may move, before delivering a defence, notice of intent to defend or notice of appearance
(a) for an order setting aside the service and any order that authorized the service; or
(b) for an order staying the proceeding. R.R.O. 1990, Reg. 194, r. 17.06 (1).

(2)The court may make an order under subrule (1) or such other order as is just where it is satisfied that
(a) service outside Ontario is not authorized by these Rules;
(b) an order granting leave to serve outside Ontario should be set aside; or
(c) Ontario is not a convenient forum for the hearing of the proceeding. R.R.O. 1990, Reg. 194, r. 17.06 (2).

(3) Where on a motion under subrule (1) the court concludes that service outside Ontario is not authorized by these Rules, but the case is one in which it would have been appropriate to grant leave to serve outside Ontario under Rule 17.03, the court may make an order validating the service. R.R.O. 1990, Reg. 194, r. 17.06 (3).

(4) The making of a motion under subrule (1) is not in itself a submission to the jurisdiction of the court over the moving party. R.R.O. 1990, Reg. 194, r. 17.06 (4). [emphasis added]

Since Queen Charlotte Lodge moved under Rule 17.06, no defence or notice of intent to defend was delivered. Hence, neither presence-based jurisdiction nor consent-based jurisdiction existed. Therefore, the court presumably was briefed on whether or not it may assume jurisdiction based upon the reformulated test for “real and substantial connection.” Not likely. The decision does not refer to February’s Ontario Court of Appeal ruling in Van Breda v. Village Resorts Ltd. It does refer to the 2002 Ontario Court of Appeal decision in Muscutt v. Courcelles, but only in the context of the discretionary forum non conveniens test.

The court then proceeds to conflate the two-step jurisdictional analysis altogether:

“[2] The defendant is a luxury fishing lodge in British Columbia. It has no assets nor any presence in Ontario and it brings this motion under Rule 17.06 for an order staying the action on the basis that the proper and more convenient forum is British Columbia.

[3] The plaintiff is a corporation operating and resident in Ontario.

[4] The jackets were designed and manufactured in Ontario, and if there is a design or manufacturing defect or flaw in the product, as the defendant alleges, that occurred in Ontario.

[5] The contract for the jackets provides it is FOB Ontario. The original quotation emanated from Ontario. The defendant sent a fax to the plaintiff in Ontario requesting the jackets pursuant to an outstanding quotation and the defendant’s Purchase Order is addressed to the plaintiff in Ontario.

[6] All of these facts show real and substantial connections to Ontario, which permit this court to entertain the action.

[7] So the real question is whether this court should assume jurisdiction on the basis that Ontario is the more convenient forum." [emphasis added]

Surprisingly, the court then appears to decide the case on its merits, concluding:

“[11] While the defendant concedes that the amount claimed by the plaintiff for non-payment is not an issue, it has never set out the amount of damages or set-off that it would claim itself. In argument, I was simply told that the jackets were useless to the defendant, even though they had apparently been used by the defendant. But if the defendant’s main thrust (or should I say parry) is that there ought to be a certain amount of set-off because of the damages it suffered, this court is left in the dark as to how many of its proposed 29 witnesses are key to this defence.
[12] I find on the evidence before me that the Defendant’s complaints to the Plaintiff about the quality and appearance of the jackets or their late delivery only began after the Plaintiff started pressing for payment of the amount invoiced." [emphasis added]

In the March 11 decision in Branconnier v. Maheux, another motion judge misapplied the old Muscutt factor analysis.

Is it reasonable to assume that these decisions will be appealed? Who knows, and why should anyone, aside from the litigants, care? Gee, I don’t know: bad decisions make hard law, that’s why.

Antonin I. Pribetic is litigation counsel at Steinberg Morton Hope & Israel LLP and a sessional lecturer at UTM-Rotman School of Management’s diploma in investigative and forensic accounting program and author of the Trial Warrior blog.