SCC spells out Canadian jurisdiction on foreign lawsuits

The Supreme Court of Canada set new guidelines for determining the law of jurisdiction in a trio of decisions yesterday.

In dismissing the appeals in Éditions Écosociété Inc. v. Banro Corp, Club Resorts Ltd. v. Van Breda, and Breeden v. Black, the top court established certain factors to consider when determining whether a Canadian can sue a foreign defendant in a Canadian court.

In Van Breda, Justice Louis LeBel wrote that in a case involving a tort, the court should consider these factors:
“(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the province.”

Lebel also recognized that in the future other factors might pop up that should be added to his list and put forth some consideration to guide judges down the road:
"(a) the similarity of this new connecting factor with the recognized presumptive connecting factors;
(b) the treatment of the connecting factor in the case law;
(c) the treatment of the connecting factor in statute; and
(d) the treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity."

Brian Radnoff, a partner at Lerners LLP, says prior to this ruling, the courts recognized non-objective factors like fairness and justice but now the Supreme Court has made it clear that courts should not consider non-objective factors in determining jurisdiction.

Overall, Radnoff says he’s satisfied with the decisions. “The test is logical and shouldn’t be difficult to apply, and it should assist in giving parties to litigation more certainty and reducing disputes and costs regarding jurisdictional issues,” he says.

Radnoff notes that it’s imperative to know when Canadian courts will take jurisdiction over certain claims. “We have an increasingly global marketplace. And in this country itself, commerce and any business activity increasingly occurs beyond the borders of any particular province,” he says.

“The issue of when Canadians can sue defendants in other provinces, in the U.S., and other countries is going to be of increasing importance because of the way our economy works . . . there are going to be disputes arising all the time,” he adds.

Van Breda dealt with personal injuries in a foreign country while Éditions Écosociété and Black related to Internet defamation.

“[Internet defamation] is an issue that’s going to be increasingly important,” says Radnoff. “In terms of those decisions, I would say they’re fairly plaintiff-friendly. So long as information published over the Internet is accessed and downloaded in the province where the action is commenced, that should be sufficient to give that court jurisdiction.”

One of the decisions he’s referring to is Black, in which the court ruled that Conrad Black can pursue his libel lawsuits against the authors of a report that he claims defamed him in Ontario, as his reputation in Ontario would be most affected. Read more about the Black ruling here.

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