Tag Archive for: Canada

Quebec Court Refuses Jurisdiction on Forum of Necessity Basis

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There has not been much to report from Canada for the past few months.  The Supreme Court of Canada’s jurisdiction decision in the Van Breda quartet of cases is still eagerly awaited.  There was some thought these decisions would be released by the end of February but it now appears that will not happen.  These cases were argued in March 2011.

Fortunately, Professor Genevieve Saumier of McGill University has written the following analysis of a recent Quebec Court of Appeal decision which might be of interest in other parts of the world.  The case is ACCI v. Anvil Mining Ltd., 2012 QCCA 117 and it is available here (though only in French, so I appreciate my colleague’s summary).  I am grateful to Professor Saumier for allowing me to post her analysis.

In April 2011, a Quebec court concluded that it had jurisdiction to hear a civil liability claim against Anvil Mining Ltd. for faults committed and damages inflicted in the Democratic Republic of Congo where the defendant exploits a copper mine.

The facts behind the claim related to actions alleged to have been taken by the defendant mining company in the course of a violent uprising in Kilwa in the Democratic Republic of Congo in October 2004 that caused the deaths of several Congolese (the number is disputed). In essence, the plaintiff alleges that the defendant collaborated with the army by providing them with trucks and logistical assistance.

The defendant, Anvil Mining Ltd, is a Canadian company with its head office in Perth, Australia. Its principal if not its only activity is the extraction of copper and silver from a mine in Congo. Since 2005, the company has rented office space in Montreal for its VP (Corporate Affairs) and his secretary. It is on the basis of this connection to the province of Quebec that the plaintiff launched the suit there. The plaintiff is an NGO that was constituted for the very purpose of instituting a class action against the defendant, for the benefit of the victims of the 2004 insurgency in Congo.

The defendant contested both the Quebec court’s jurisdiction and, in the alternative, invoked forum non conveniens to avoid the exercise of jurisdiction. At first instance, the court held that it had jurisdiction over the defendant on the basis of its establishment in Quebec (the office in Montreal) and that the claim was related to the activities of the defendant in Montreal (the two conditions for jurisdiction under 3148(2) Civil Code of Quebec given the foreign domicile of the defendant). Interpreting this second conditions broadly, the court held that the VP’s frequent visits to Congo and his activities to attract investors in Quebec were linked to the defendant’s activities in Congo and therefore to the claims based on those activities.

In rejecting the alternative forum non conveniens defense to the exercise of jurisdiction, the court considered the other fora allegedly available to the plaintiffs, namely Congo and Australia. A claim had already been made before a Congolese military court but it had been rejected. The plaintiff claimed that the process before the Congolese court, competent to hear the claim, was in breach of fundamental justice for a number of reasons. As to the Australian court, the plaintiff claimed that an attempt to secure legal representation in that country had failed because of threats made by the Congolese regime against both the victims and the lawyers they were seeking to hire in Australia. The Quebec court accepted this evidence and held that the defendants had failed to show that another forum was more appropriate to hear the case, a requirement under art. 3135 C.C.Q. It appears that the plaintiffs had also presented an argument based on art. 3136 C.C.Q. (“forum of necessity”), but since jurisdiction was established under art. 3148 and forum non conveniens was denied, the court decided not to respond to the argument based on forum of necessity. Still, the court did state that “at this stage of the proceedings, it does appear that if the tribunal declined jurisdiction on the basis of art. 3135 C.C.Q., there would be no other forum available to the victims,” suggesting that Quebec may well be a “forum of necessity” in this case.

Leave to appeal was granted and the Quebec Court of Appeal reversed, in a judgment published on 24 January 2012. The Court of Appeal held that the conditions to establish jurisdiction under art. 3148(2) C.C.Q. had not been met. As a result of that conclusion, it did not need to deal with the forum non conveniens aspect of the first instance decision. This made it necessary to deal with the “forum of necessity” option, available under art. 3136 C.C.Q. The Court found that the plaintiff had failed to show that it was impossible to pursue the claim elsewhere and that there existed a sufficient connection to Quebec to meet the requirements of article 3136 C.C.Q. In other words, the plaintiff had the burden to prove that Quebec was a forum of necessity and was unable to meet that burden.

The reasons for denying the Quebec court’s jurisdiction under art. 3148(2) C.C.Q. are interesting from the perspective of judicial interpretation of that provision but are not particular to human rights litigation. Essentially the Court of Appeal found that the provision did not apply because the defendant’s Montreal office was open after the events forming the basis of the claim. This holding on the timing component was sufficient to deny jurisdiction under 3148(2) C.C.Q. The Court also held that even if the timing had been different, it did not accept that there was a sufficient connection between the activities of the vice president in Montreal and the actions underlying the claim to satisfy the requirements of the provision.

The reasoning on art. 3136 C.C.Q. and the forum of necessity, however, are directly relevant to human rights litigation in an international context. Indeed, one of the challenges of this type of litigation is precisely the difficulty of finding a forum willing to hear the claim and able to adjudicate it according to basic principles of fundamental justice.  In the Anvil case, the victims had initially sought to bring a claim in the country where the injuries were inflicted and suffered. While the first instance court had accepted evidence from a public source according to which that process was tainted, the Court of Appeal appeared to give preference to the defendant’s expert evidence (see para. 100).

The Court of Appeal does not quote from that expert’s evidence whereas the trial judge’s reasons contain a long extract of the affidavit. And while the extract does not include the statement referred to by the Court of Appeal, it does include a statement according to which an acquittal in a penal court is res judicata on the issue of fault in a civil proceeding based on the same facts.

The obvious alternative forum was in Perth, Australia, where the defendant company had its headquarters (and therefore its domicile under Quebec law). There too the victims had sought to bring a claim but were apparently unable to secure legal representation or pursue that avenue due to allegedly unlawful interference by the defendant and government parties in the Republic of Congo. While the first instance judge had accepted the plaintiff’s evidence that Australia was not an available forum, the Court of Appeal quickly dismissed this finding, without much discussion.

Finally, the Court of Appeal returned to its initial findings regarding the interpretation of art. 3148 C.C.Q. to conclude that there was, in any event, an insufficient connection between Anvil and Quebec to meet that condition for the exercise of the forum on necessity jurisdiction. The court did not consider that under art. 3136 C.C.Q. it is unlikely that the timing of the connection should be the same as under 3148(2) C.C.Q. given the exceptional nature of the former basis for jurisdiction and the likelihood that the connections to the forum of necessity could arise after the facts giving rise to the claim.

The decision of the Court of Appeal in Quebec is disappointing in so far as its interpretation of the forum of necessity provision in the Civil Code of Quebec is quite narrow, particularly as regards the condition of a connection with Quebec; moreover, its application of the provision to the facts of the case deals rather summarily and dismissively with findings of fact made by the first instance judge without sufficient justification for its rejection of the evidence provided by the plaintiff and relied upon by the trial judge. Given the nature of the claims and of the jurisdictional basis invoked, it was incumbent on the Court of Appeal to provide better guidance for future plaintiffs as to what type of evidence will be required to support an article 3136 C.C.Q. jurisdictional claim and to what extent trial court findings in relation to such evidence will be deferred to in the absence of an error of law.

Article on Global Class Actions in Canada

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Associate Professor Tanya Monestier of the Roger Williams University School of Law has written an article on the willingness of Canadian courts to hear class actions involving a global plaintiff class. It is entitled “Is Canada the New ‘Shangri-La’ of Global Securities Class Actions?” and is forthcoming in 2012 in the Northwestern Journal of International Law and Business. The article is available here from SSRN.

The abstract reads:

There has been significant academic buzz about Silver v. Imax, an Ontario case certifying a global class of shareholders alleging statutory and common law misrepresentation in connection with a secondary market distribution of shares. Although global class actions on a more limited scale have been certified in Canada prior to Imax, it can now be said that global classes have “officially” arrived in Canada. Many predict that the Imax decision means that Ontario will become the new center for the resolution of global securities disputes. This is particularly so after the United States largely relinquished this role last year in Morrison v. National Australia Bank.

Whether Imax proves to be a meaningful precedent or simply an aberration will largely depend on whether the court dealt appropriately with the conflict of laws issues at the heart of the case. No author has yet addressed the conflict of laws complications posed by the certification of global class actions in Canada; this Article seeks to fill that void. In particular, I use the Imax case as a lens through which to canvass the conflict of laws issues raised by the certification of global classes. I look at the difficult questions of jurisdiction simpliciter, recognition of judgments, choice of law, parallel proceedings, and notice/procedural rights that need to be addressed now that global classes have come to Canada.

Jurisdiction Based on a Domain Name

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In Tucows.Com Co. v. Lojas Renner S.A., 2011 ONCA 548 (available here) the Court of Appeal for Ontario considered whether to take jurisdiction in a dispute over the ownership of an internet domain name. 

Tucows is a Nova Scotia corporation with its principal office in Ontario.  Renner is a Brazilian corporation operating a series of retail department stores.  Tucows bought 30,000 domain names from another corporation, and one of the names was renner.com.  Tucows is the registrant of that domain name with the internationally-recognized non-profit organization, the Internet Corporation for Assigned Names and Numbers (ICANN).  Renner complained to WIPO and in response Tucows sued in Ontario, seeking a declaration that it was the owner of the domain name.  Renner objected to Ontario’s jurisdiction over the dispute.

The core issue was whether this dispute concerned “personal property in Ontario”.  An earlier decision of the Ontario Superior Court, Easthaven Ltd. v. Nutrisystem.com Inc. (2001), 55 O.R. (3d) 334 (S.C.J.), had concluded that because a domain name lacks a physical existence it was not “property in Ontario” and the mere fact the domain name was registered through a corporation that happened to carry on business in Ontario (the domain name Registrar) did not give it a physical presence here.

The court reviewed several scholarly articles on the issue from around the world and also considered jurisprudence from several other countries, including the United States, the United Kingdom and Australia.  It concluded that the emerging consensus appears to be that domain names are a form of property.  After a further analysis of the nature of personal property, the court concluded that a domain name is personal property.  Further, the connecting factors favouring location of the domain name in Ontario were held to be the location of the registrant of the domain name and the location of the registrar and the servers as intermediaries.  On this basis the court found the domain name in issue to be personal property in Ontario, and thus took jurisdiction under the approach in Van Breda (discussed in an earlier post).

The case discusses several other issues, including (i) the relationship between the dispute settlement mechanism provided by WIPO and civil litigation and (ii) the propriety of a claim to obtain a declaration as a remedy.

Intersection of Child Abduction Process and Refugee Claim

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The Court of Appeal for Ontario has released its decision in A.M.R.I. v. K.E.R. (available here).  The decision deals with the intersection of the law relating to children who advance a refugee claim and the law on returning abducted children under the Hague Convention.

A girl of 12 had travelled from Mexico, where she lived with her mother (who had custody), to Ontario to visit her father (who had access rights).  There she disclosed that she had been abused by her mother.  She made a refugee application and the Immigration and Refugee Board of Canada found her to be a refugee as a result of the abuse.  After she had lived in Ontario for about 18 months, the mother applied under the Hague Convention for her return to Mexico.  The Superior Court of Justice ordered that she be returned, and she was – in quite a remarkable way which violated her right to dignity and respect (para. 7).  On appeal, the Court of Appeal reversed that decision.  It set aside the order of return and ordered a new hearing on the Hague Convention application.

One of the key concerns for the court was the child’s lack of participation in the Hague Convention application.  That application was, in effect, heard ex parte, with no submissions in support of the child’s remaining in Ontario (para. 31).  The court set out some important procedural protections that must be provided to the child (para. 120).

The court also had to grapple with the interplay of the statutes that implemented the Refugee Convention and the Hague Convention.  It rejected the argument that the implementation of the latter (provincial law) was unconstitutional by virtue of it violating the implementation of the former (federal law).  The court held that the two could be read and applied together without a division of powers conflict (paras. 62-71).

The court held that when a child has been determined to be a refugee, a rebuttable presumption arises that there is a risk of persecution if the child is returned (para. 74) and thus a risk of harm (para. 78).  This then must impact the analysis under the Hague Convention.

The application judge had not accorded any weight to the refugee status and accordingly had erred in law.  The judge also failed to consider the exceptions in the Hague Convention that allowed the court to refuse to order a child’s return.

Canadian Conflict of Laws Articles

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Here are some recent articles from Canadian publications:

Janet Walker, “Are National Class Actions Constitutional?  A Reply to Hogg and McKee” (2010) 48 Osgoode Hall LJ 95

Jeffrey Haylock, “The National Class as Extraterritorial Legislation” (2009) 32 Dal LJ 253

Gerald Robertson, “The Law of Domicile: Re Foote Estate” (2010) 48 Alta L Rev 189

Joost Blom, “The Challenge of Jurisdiction: Van Breda v. Village Resorts and Black v. Breeden” (2010) 49 Can Bus LJ 400

Vaughan Black, Joost Blom and Janet Walker, “Current Jurisdictional and Recognitional Issues in the Conflict of Laws” (2011) 50 Can Bus LJ 499

The debate about the scope of Canadian class actions continues, and important questions about the analysis of a real and substantial connection for taking jurisdiction over foreign defendants await some answers from the Supreme Court of Canada in the four cases currently on reserve.

Jurisdiction in Cross-Border Libel Cases

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The Court of Appeal for Ontario has released Paulsson v. Cooper, 2011 ONCA 150 (available here).  The plaintiff, an academic and author resident in Ontario, sued the defendants for publishing an allegedly libellous review of his book.  The defendant publisher was incorporated in New York and had its national office in Massachusetts.  The reviewer was an Australian academic.

The motions judge had held that Ontario lacked jurisdiction, but the Court of Appeal held that Ontario had jurisdiction and that no other forum was more appropriate for the resolution of the dispute.  The court found that there was a “real and substantial connection” to Ontario.  The court applied the orthodox analysis that the tort of libel was committed where the statement was read, and so had happened in Ontario.  In addition, the place of the damage was Ontario since that was where the plaintiff’s reputation was located.

The case was perhaps easier than some other recent cases.  The plaintiff’s connection to Ontario was quite strong on the facts; he was not a “libel tourist” who had sought out an advantageous forum.  The publication was not over the internet, which raises greater complexity, but rather in printed form.  The publisher had circulated 3528 copies, of which 81 were circulated in Ontario.  Several of those 81 copies had ended up in academic or public-access libraries. 

The court agreed with a key quotation from Barrick Gold Corp. v. Blanchard and Co. (2003), 9 B.L.R. (4th) 316 (Ont. S.C.J.): “If a person issues a statement and places that statement in a normal distribution channel designed for media attention and publication, a person ought to assume the burden of defending those statements, wherever they may damage the reputation of the target of those statements and thereby cause the target harm, as long as that harm occurred in a place that the originator of the statements ought reasonably to have had in his, her or its contemplation when the statements were issued.”

As noted in an earlier post on this forum, many of these issues are being heard by the Supreme Court of Canada later this month in four other cases being appealed from the Court of Appeal for Ontario.

Tourism and Jurisdiction to take Centre Stage in Supreme Court of Canada

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On March 21, 22 and 25, 2011 the Supreme Court of Canada will hear appeals in four private international law cases.  Each is a case in which the Ontario court has held that it has jurisdiction to hear the dispute and that the proceedings should not be stayed in favour of another forum. 

Two of the cases – Van Breda (information here) and Charron (information here) – involve Ontarians who were killed or severely injured while on holiday in Cuba.  They now seek to sue various foreign defendants in Ontario.  These cases involve tourists in the traditional sense of the word.  Two of the cases – Banro (information here) and Black (information here) – involve claims for defamation over the internet and damage to reputation in Ontario.  There is some allegation that these cases involve what has become known as “libel tourism”, especially in England and in the United States.

Several parties have already been granted leave to appear as intervenors and others are seeking such leave.  The decisions in these four cases could be very important for the Canadian law on jurisdiction.

The Supreme Court of Canada now posts PDFs of the written submissions of litigants as they are received, so those wanting more details about the cases should click on the “factums” button for each case.

Canadian Case on State Immunity

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In Kazemi (Estate of) v. Islamic Republic of Iran, 2011 QCCS 196 (available here) the estate of Zahra Kazemi and her son, Stephan Kazemi, sued Iran and certain state officials in Quebec, alleging that in 2003 Ms. Kazemi was tortured and assassinated in Iran.  The defendants argued that the claim could not succeed due to state immunity. 

Much of the court’s analysis involves the provisions of the State Immunity Act, R.S.C. 1985, c. S-18.  The court has to consider whether this statute is a complete code on the issue of state immunity or whether it is open to courts to create exceptions to the statutory immunity beyond those listed in the statute.  The court also has to address whether aspects of the statute are constitutional. 

The court ends up concluding that the estate has no claim because the wrongs done to her occurred in Iran and so are covered by the immunity under the statute.  However, the court allows the claim by Stephan Kazemi, a claim for his own losses arising from hearing the reports of what was done to his mother, to continue since his losses were suffered in Quebec, not Iran, and so the immunity does not cover them (see section 6 of the statute). 

The decision is lengthy (220 paragraphs), and yet it does not mention the recent decision of the Supreme Court of Canada on state immunity: Kuwait Airways Corporation v. Republic of Iraq from October 2010.

Kuwait Airways Corporation v. Iraq in the Supreme Court of Canada

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In yet another, but not the final, step in the very long-running litigation between KAC, IAC and the Republic of Iraq, the Supreme Court of Canada has held that the enforcement in Quebec of a 2008 judgment of the English Commercial Court ordering Iraq to pay CAD$84 million to KAC is not barred by soveriegn immunity (decision here).

Many on this list will be familar with the facts.  After the 1990 invasion of Kuwait, KAC sued IAC in England for conversion of several airplanes.  As part of that litigation, KAC was able to claim against Iraq for the costs of the actions that had been brought.  This claim flowed from Iraq’s having controlled and funded IAC’s defence, and it was not barred by sovereign immunity in England because it fell within the commercial activity exception.  Iraq did not defend this claim and default judgment was granted.

KAC discovered immovable property owned by Iraq in Quebec and also some undelivered airplanes Iraq was buying from Bombardier Aerospace.  It thus brought proceedings in Quebec to enforce the English judgment.  Two lower courts held the claim was barred by sovereign immunity but the Supreme Court of Canada found that it fell within the commercial activity exception.

The court applied the State Immunity Act, RSC 1985, c S-18 and held that it applied to proceedings to enforce a foreign judgment (paras. 19-20).  The English decision, which addressed the issue of sovereign immunity, was not binding in Canada and was not res judicata (since to be so it would first have to be recognized in Canada, which was the very issue before the court) (para. 22).  The application of the commercial activity exception to the facts is somewhat brief (para. 35), though there is some useful discussion of the scope of the exception in the United Kingdom, the United States and Canada (paras. 25-33).

Two other points of interest: 1. the court does not wade into the issue of whether there are any exceptions to sovereign immunity beyond those set out in the statute (para. 24), and 2. the court accepts the factual findings of the English decision as part of its analysis, prior to concluding that the decision is enforceable in Canada (para. 34).  This latter point seems somewhat hard to explain, and the court does not offer much explanation.

The Supreme Court of Canada did not determine if the English judgment is enforceable in Quebec – it only dealt with the sovereign immunity issue.  The case was therefore remanded to the court of first instance to hear the claim for enforcement.  Iraq likely has some further arguments to advance, such as that the Quebec court lacks jurisdiction over it and that the English default judgment is not entitled to recognition and enforcement (for example, due to the lack of a real and substantial connection between England and the claim advanced against Iraq).

Looking Back and Looking Forward at Canadian Private International Law

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At the recent 40th Annual Workshop on Commercial and Consumer Law at the University of Toronto, three leading Canadian conflict of laws scholars – Vaughan Black of the Schulich School of Law, Joost Blom of the University of British Columbia and Janet Walker of Osgoode Hall Law School – presented a paper looking back at the last forty years in private international law and offering thoughts on what lies ahead.  Each author picked out a particular theme: a judicial trend toward uniformity between provincial conflicts rules, the impact of Morguard on the structure of conflicts rules, and how the profile of the field has changed over time.  The paper is not currently available on the web but will be published in an upcoming issue of the Canadian Business Law Journal.

The paper was supplemented at the Workshop by Genevieve Saumier of McGill University’s oral comments on trends in Quebec’s private international law.  The session was chaired by Elizabeth Edinger of the University of British Columbia.