The Supreme Court of Canada has granted leave to appeal in Sinclair v Venezia Turismo. In light of the test for obtaining leave and the relatively low number of cases in which leave is granted, this offers at least some suggestion that the top court is interested in considering the legal issues raised in the case.
Written by Stephen G.A. Pitel, Faculty of Law, Western University
The Supreme Court of Canada has released its decision in F v N, 2022 SCC 51 (available here) and the decision offers some important observations about the law on international child abduction. The court held 5-4 that two young children taken by their mother from UAE to Ontario are to be returned to their father in UAE.
The father and mother were engaged in a dispute over custody rights of the children. The court noted that in the removal/return context, it was not deciding the custody issue but rather deciding which court – Ontario or UAE – would decide that issue [para 1]. Because UAE is not a party to the Convention on the Civil Aspects of International Child Abduction, the issue of whether the children should be returned to UAE arose under Ontario legislation (Children’s Law Reform Act, RSO 1990, c C.12), though the court noted similarities between the two regimes [para 52].
Written by Stephen G.A. Pitel, Western University
The court’s decision in HMB Holdings Ltd v Antigua and Barbuda, 2021 SCC 44 (available here) is interesting for at least two reasons. First, it adds to the understanding of the meaning of “carrying on business” as a test for being present in a jurisdiction. Second, it casts doubt on the application of statutory registration schemes for foreign judgments to judgments that themselves recognize a foreign judgment (the so-called ricochet).
In this litigation HMB obtained a Privy Council judgment and then sued to enforce it in British Columbia. Antigua did not defend and so HMB obtained a default judgment. HMB then sought to register the British Columbia judgment in Ontario under Ontario’s statutory scheme for the registration of judgments (known as REJA). An important threshold issue was whether the statutory scheme applied to judgments like the British Columbia one (a recognition judgment). In part this is a matter of statutory interpretation but in part it requires thinking through the aim and objectives of the scheme.
By Stephen G.A. Pitel, Western University
The Supreme Court of Canada has granted leave in H.M.B. Holdings Limited v Attorney General of Antigua and Barbuda. Information about the appeal is available here. The decision being appealed, rendered by the Court of Appeal for Ontario, is available here. In the usual course the appeal will be heard in the late spring or early fall of 2021. The grant of leave is notable because Canada’s top court only hears a small handful of conflict of laws cases in any given year.
In 2014 the Privy Council rendered a judgment in favour of HMB against Antigua and Barbuda for over US$35 million including interest. In 2016 HMB sued at common law to have the Privy Council judgment recognized and enforced in British Columbia. Antigua and Barbuda did not defend and default judgment was granted in 2017. HMB then sought to register the British Columbia decision (not the Privy Council decision) under Ontario’s statutory scheme for the registration of judgments of other Canadian common law provinces. This required the Ontario courts to engage in a process of statutory interpretation, with one of the central issues being whether the scheme applied to the recognition and enforcement judgment or only to what have been called “original judgments”.
The procedure used by HMB for getting the Privy Council decision enforced in Ontario might seem odd. The Ontario application judge referred to the process as involving a “ricochet judgment”. As to why HMB did not bring a common law action on the Privy Council judgment in Ontario, as it had done in British Columbia, there appears to be some issue that such an action could be outside the applicable limitation period. British Columbia (10 years) has a longer limitation period than Ontario (2 years) for common law actions to enforce foreign judgments.
The Ontario courts held that the scheme did not apply to the British Columbia judgment or, in the alternative, if it did, Antigua and Barbuda were entitled to resist the registration on the basis that it was not “carrying on business” in British Columbia (which is a defence to registration under the Ontario scheme). The majority of the Court of Appeal for Ontario, perhaps proceeding in an inverted analytical order, held that because Antigua and Barbuda was not carrying on business in British Columbia it did not need to address the (more fundamental) issue of the scope of the scheme. The dissenting judge held Antigua and Barbuda was carrying on business in British Columbia and so did address the scope of the scheme, finding it did apply to a recognition and enforcement judgment.
In my view, it is unfortunate that all of the Ontario judges focused quite particularly on the language of various provisions of the statutory scheme without greater consideration of the underlying policy question of whether the scheme, as a whole, truly was meant to allow knock-on or ricochet enforcement. Ontario’s scheme is explicitly limited to allowing registration of judgments of other Canadian common law provinces. It strikes me as fundamentally wrong to interpret this as covering all foreign judgments those other provinces themselves choose to enforce. Nevertheless, it will be interesting to see whether the Supreme Court of Canada resolves the appeal solely on the basis of the intended scope of the registration scheme or instead devotes significant attention to addressing the meaning of “carrying on business”.
The Court of Appeal for Ontario has upheld a decision of the Superior Court of Justice dismissing a $2 billion claim against Loblaws relating to the 2013 collapse of the Rana Plaza building in Savar, Bangladesh. In Das v George Weston Limited, 2018 ONCA 1053 (available here) the court concluded that the claims were governed by the law of Bangladesh (not Ontario). It went on to conclude that most of the claims were statute barred under the Bangladeshi limitation period and that it was “plain and obvious” that the remaining claims would fail under Bangladeshi tort law.
Unlike some of the recent cases in this area, this was not a case about a Canadian parent corporation and the operations of its own foreign subsidiary. It was a case about a contractual supply relationship. Loblaws bought clothes (to sell in its Canadian retail stores) from corporations whose workers manufactured the clothes in Rana Plaza.
The key conflict of laws point was the choice of law issue. The rule in Ontario is that tort claims are governed by the law of the place of the tort: Tolofson v Jensen, [1994] 3 SCR 1022. The plaintiffs had argued that they were suing Loblaws for negligent conduct that exposed those working in Rana Plaza to harm. They argued that Loblaws had, by adopting corporate social responsibility policies and hiring Bureau Veritas to conduct periodic “social audits” of the workplace, assumed a degree of responsibility for the safety of the workplace in Bangladesh (para 20). They argued that the key steps and decisions by Loblaws took place in Ontario rather than in Bangladesh and therefore Ontario was the place of the tort (para 80). The court rejected these arguments. It held that the place where the alleged wrongful activity occurred was Bangladesh (para 85), that the alleged duty was owed to people in Bangladesh (para 87) and that the injury suffered in Bangladesh “crystallized the alleged wrong” (para 90).
The court also refused to apply Tolofson‘s narrow exception to the place of the tort rule. One reason the plaintiffs raised for triggering the exception was the lack of punitive damages under the law of Bangladesh. The court noted that the lower court’s decision had suggested such damages might actually be available under that law, but in any case “the absence of the availability of punitive damages is not the type of issue that offends Canadian fundamental values” (para 95). The court raised no basis on which to disagree with this analysis.
Because the applicable law was that of Bangladesh, and because some of the claims were not statute-barred, the court was required to do a detailed analysis of Bangladeshi tort law on the duty of care issue in order to determine whether those claims were to be dismissed as not viable. This aspect of the decision may be the most disquieting, since there was little if any on-point authority in the Bangladeshi jurisprudence (para 130). The court had to rely on experts who were relying on a considerable volume of Indian and English cases and then debating the extent to which these would impact the issue if determined by a Bangladeshi court. Ultimately the court concluded that under Bangladeshi law the claims could not succeed.
In common law Canada there is a clear separation between the question of a court having jurisdiction (jurisdiction simpliciter) and the question of a court choosing whether to exercise or stay its jurisdiction. One issue discussed in the Supreme Court of Canada’s recent decision in Haaretz.com v Goldhar (available here) is the extent of that separation. Does this separation mean that a particular fact cannot be used in both the analysis of jurisdiction and of forum non conveniens? On its face that seems wrong. A fact could play a role in two separate analyses, being relevant to each in different ways.
Justice Cote, with whom Justices Brown and Rowe agreed, held that “applicable law, as determined by the lex loci delicti principle, should be accorded little weight in the forum non conveniens analysis in cases where jurisdiction is established on the basis of the situs of the tort” (para 90). She indicated that this conclusion was mandated by the separation of jurisdiction and staying proceedings, which extends to each being “based on different factors”. So if the place of the tort has been used as the basis for assuming jurisdiction, the same factor (the place of the tort) should not play a role in analyzing the most appropriate forum when considering a stay. And since the applicable law is one of the factors considered in that analysis, if the applicable law is to be identified based on the connecting factor of the place of the tort, which is the rule in common law Canada, then the applicable law as a factor “should be accorded little weight”.
In separate concurring reasons, Justice Karakatsanis agreed that the applicable law “holds little weight here, where jurisdiction and applicable law are both established on the basis of where the tort was committed” (para 100). In contrast, the three dissenting judges rejected this reason for reducing the weight of the applicable law (para 208). The two other judges did not address this issue, so the tally was 4-3 for Justice Cote’s view.
As Vaughan Black has pointed out in discussions about the decision, the majority approach, taken to its logical conclusion, would mean that if jurisdiction is based on the defendant’s residence in the forum then the defendant’s residence is not a relevant factor in assessing which forum is more appropriate. That contradicts a great many decisions on forum non conveniens. Indeed, the court did not offer any supporting authorities in which the “double counting” of a fact was said to be inappropriate.
The majority approach has taken analytical separation too far. There is no good reason for excluding or under-weighing a fact relevant to the forum non conveniens analysis simply because that same fact was relevant at the jurisdiction stage. Admittedly the court in Club Resorts narrowed the range of facts that are relevant to jurisdiction in part to reduce overlap between the two questions. But that narrowing was of jurisdiction. Forum non conveniens remains a broad doctrine that should be based on a wide, open-end range of factors. The applicable law, however identified, has to be one of them.
Another issue in the recent Supreme Court of Canada decision in Haaretz.com v Goldhar (available here) involves the applicable law as a factor in the forum non conveniens analysis. It is clear that one of the factors in determining the most appropriate forum is the applicable law. This is because it is quite easy for the forum to apply its own law and rather more difficult for it to apply the law of another jurisdiction.
So if the defendant can show that the forum would apply not its own law but rather the law of another jurisdiction, that points to a stay of proceedings in favour of that other jurisdiction. In contrast, if the plaintiff can show that the forum would apply its own law, that points against a stay of proceedings. In Haaretz.com the plaintiff was able to show that the Ontario court would apply Ontario law, not Israeli law. So the applicable law factor favoured Ontario.
Not so, argued the defendant, because an Israeli court would apply Israeli law (see para 88). So as between the two jurisdictions neither was any more convenient than the other!
In the Supreme Court of Canada, four of the judges rejected the defendant’s rejoinder. The dissenting judges held that “[i]t is entirely appropriate, in our view, for courts to only look at the chosen forum in determining the applicable law. Requiring courts to assess the choice of law rules of a foreign jurisdiction may require extensive evidence, needlessly complicating the pre-trial motion stage of the proceedings” (para 207). In separate concurring reasons, Justice Karakatsanis agreed with the dissent on this point (para 100). So because Ontario would apply Ontario law, this factor favours proceedings in Ontario rather than proceedings in Israel.
In contrast, Justice Cote, with whom Justices Brown and Rowe agreed, stated that “I am concerned that disregarding the applicable law in the alternative forum is inconsistent with the comparative nature of the forum non conveniens analysis” (para 89). She cited in support an article by Brandon Kain, Elder C. Marques and Byron Shaw (2012). The other two judges did not comment on this issue, so the court split 4-3 against looking at the applicable law in the alternative forum.
There is force to the practical concern raised by the dissent, and even with the assistance of the parties in many cases the court will be unable to form a sufficiently strong view as to what law the foreign forum would apply. But conceptually it does seem that if it is established that the foreign forum will apply its own law, that should go to negate the benefits of the plaintiff’s chosen forum applying its own law. Neither is any more convenient where compared against the other.
Perhaps because of the novelty of the approach, Justice Cote’s application of it may have missed the mark. She held that “[a]s each forum would apply its own law, the applicable law factor cannot aid Haaretz in showing that it would be fairer and more efficient to proceed in the alternative forum” (para 88). But the true point flowing from establishing that Israel would apply Israeli law, it would seem, should be that the applicable law factor cannot aid Goldhar (the plaintiff) in showing that it would be fairer and more efficient to proceed in Ontario. If it cannot aid Haaretz.com that Israel would apply its own law, then how is the factor relevant and why is the court indicating a willingness to consider it? It surely could not aid Haaretz.com that Israel would apply some other law.
On a motion for a stay, if the court did know what law would be applied in both the chosen forum and the alternative forum, we would have four possible situations. On Justice Cote’s approach, if both forums would apply their own law, this is a neutral factor. Similarly, if both forums would apply law other than forum law, this is also a neutral factor. In the other two situations, the applicable law factor favours the forum that would be applying its own law. With the court splitting 4-3 against looking at the applicable law in the alternative forum, this is not the approach – but should it be?
The doctrine of forum non conveniens, in looking to identify the most appropriate forum for the litigation, considers many factors. Two of these are (i) a desire to avoid, if possible, a multiplicity of proceedings and (ii) any potential difficulties in enforcing the decision that results from the litigation. However, it is important to keep these factors analytically separate.
In the Supreme Court of Canada’s recent decision in Haaretz.com v Goldhar (available here) Justice Abella noted that “enforcement concerns would favour a trial in Israel, in large part because Haaretz’s lack of assets in Ontario would mean that any order made against it would have to be enforced by Israeli courts, thereby raising concerns about a multiplicity of proceedings” (para 142). Similarly, Justice Cote concluded (paras 82-83) that the fact that an Ontario order would have to be enforced in Israel was a factor that “slightly” favoured trial in Israel.
Justice Abella has arguably conflated the two factors rather than keeping them separate. The concerns raised by a multiplicity of proceedings tend to focus on substantive proceedings rather than on subsequent procedural steps to enforce a judgment. Courts rightly try to avoid substantive proceedings in more than one jurisdiction that arise from the same factual matrix, with one of the core concerns being the potential for inconsistent findings of fact. Of course, enforcement proceedings do involve an additional step that is avoided if the judgment can simply be enforced locally. But that, in itself, should not be grouped with the kinds of concerns raised by multiple substantive proceedings. It will be unfortunate if subsequent courts routinely consider contemplated foreign enforcement proceedings as raising a multiplicity of proceedings concern.
Justice Cote (with whom Justices Brown and Rowe agreed) did not conflate enforcement proceedings and the concern about multiplicity. However, it should be noted that Club Resorts, which she referenced on this point, stated (para 110 that “problems related to the recognition and enforcement of judgments” is a relevant factor for forum non conveniens. The stress there should be on “problems”. If it can be anticipated that there may be problems enforcing the judgment where the assets are, that is an important consideration. But if no such problems are anticipated, the mere fact that enforcement elsewhere is contemplated should not point even “slightly” against the forum as the place for the litigation. In Haaretz.com the judges who consider the enforcement factor did not identify any reason to believe that enforcement proceedings in Israel would be other than routine.
The dissenting judges (Chief Justice McLachlin and Justices Moldaver and Gascon) properly separated these two factors in their analysis (paras 234-237). They did not treat enforcement proceedings as part of the analysis of a multiplicity of proceedings. On enforcement, their view was that in defamation proceedings it is often sufficient just to obtain the judgment, in vindication of the plaintiff’s reputation, and that enforcement can thus be unnecessary or “irrelevant” (para 236). Justice Cote strongly disagreed (para 83). Leaving that dispute to one side, the dissent could have also made the point that this was not a case where any “problems” had been raised about enforcement in Israel.
One of the points of interest in the Supreme Court of Canada’s recent decision in Haaretz.com v Goldhar (available here) concerns the appropriateness of the plaintiff’s undertaking to pay the travel and accommodation costs of the defendant’s witnesses, located in Israel, to come to the trial in Ontario. The defendant had raised the issue of the residence of its witnesses as a factor pointing to Israel being the more appropriate forum. The plaintiff, one presumes, made a strategic decision to counter this factor by giving the undertaking.
The motions judge and the Court of Appeal for Ontario both considered the undertaking as effective in reducing the difficulties for the defendant in having the litigation in Ontario. However, the undertaking was viewed quite differently by at least some of the judges of the Supreme Court of Canada. Justice Cote, joined by Justices Brown and Rowe, stated that “consideration of such an undertaking would allow a wealthy plaintiff to sway the forum non conveniens analysis, which would be inimical to the foundational principles of fairness and efficiency underlying this doctrine” (para 66). Justice Abella, in separate reasons, stated “I think it would be tantamount to permitting parties with greater resources to tip the scales in their favour by ‘buying’ a forum. … it is their actual circumstances, and not artificially created ones, that should be weighed” (para 140). The other five judges (two concurring in the result reached by these four; three dissenting) did not comment on the undertaking.
Undertakings by one party in response to concerns raised by the other party on motions to stay are reasonably common. Many of these do involve some financial commitment. For example, in response to the concern that various documents will have to be translated into the language of the court, a party could undertake to cover the translation costs. Similarly, a party might undertake to cover the costs of the other party flowing from more extensive pre-trial discovery procedures in the forum. Travel and accommodation expenses are perhaps the most common subject for a financial undertaking. Is the Supreme Court of Canada now holding that these sorts of undertakings are improper?
The more general statement from Justice Abella rejecting artificially created circumstances could have an even broader scope, addressing more than just financial issues. Is it a criticism of even non-financial undertakings, such as an undertaking by the defendant not to raise a limitation period – otherwise available as a defence – in the foreign forum if the stay is granted? Is that an artificially-created circumstance?
Vaughan Black has written the leading analysis of conditional stays of proceedings in Canadian law: “Conditional Forum Non Conveniens in Canadian Courts” (2013) 39 Queen’s Law Journal 41. Undertakings are closely related to conditions. The latter are imposed by the court as a condition of its order, while the former are offered in order to influence the decision on the motion. But both deal with very similar content, and undertakings are sometimes incorporated into the order as conditions. Black observes that in some cases courts have imposed financial conditions such as paying transportation costs and even living costs during litigation (pages 69-70). Are these conditions now inappropriate, if undertakings about those expenses are? Or it is different if imposed by the court?
My view is that the four judges who made these comments in Haaretz.com have put the point too strongly. Forum non conveniens is about balancing the interests of the parties. If one party points to a particular financial hardship imposed by proceeding in a forum, it should be generally open for the other party to ameliorate this hardship by means of a financial undertaking. Only in the most extreme cases should a court consider the undertaking inappropriate. And perhaps, though the judges do not say so expressly, Haaretz.com is such a case, in that there were potentially 22 witness who would need to travel from Israel to Ontario for a trial.
The decision to stay proceedings under the doctrine of forum non conveniens is discretionary, which in part means that appeal courts should be reluctant to reverse the decisions of motions judges on the issue. It comes as some surprise, therefore, that the Supreme Court of Canada has disagreed with not only the motions judge but also the Court of Appeal for Ontario and overturned two earlier decisions denying a stay. In Haaretz.com v Goldhar (available here) the court held (in a 6-3 decision) that the plaintiff’s libel proceedings in Ontario should be stayed because Israel is the clearly more appropriate forum.
The decision is complex, in part because the appeal also considered the issue of jurisdiction and in part because the nine judges ended up writing five sets of reasons, four concurring in the result and a fifth in dissent. That is very unusual for Canada’s highest court.
The case concerned defamation over the internet. The plaintiff, a resident of Ontario, alleged that an Israeli newspaper defamed him. Most readers of the story were in Israel but there were over 200 readers in Ontario.
On assumed jurisdiction, the court was asked by the defendant to reconsider its approach as set out in Club Resorts (available here), at least as concerned cases of internet defamation. Eight of the nine judges refused to do so. They confirmed that a tort committed in Ontario was a presumptive connecting factor to Ontario, such that it had jurisdiction unless that presumption was rebutted (and they held it was not). They also confirmed the orthodoxy that the tort of defamation is committed where the statement is read by a third party, and that in internet cases this is the place where the third party downloads and reads the statement (paras 36-38 and 166-167). Only one judge, Justice Abella, mused that the test for jurisdiction should not focus on that place but instead on “where the plaintiff suffered the most substantial harm to his or her reputation” (para 129). This borrows heavily (see para 120) from an approach to choice of law (rather than jurisdiction) that uses not the place of the tort (lex loci delicti) but rather the place of most substantial harm to reputation to identify the applicable law.
On the stay of proceedings, six judges concluded that Israel was the most appropriate forum. Justice Cote wrote reasons with which Justices Brown and Rowe concurred. Justice Karakatsanis disagreed with two key points made by Justice Cote but agreed with the result. Justices Abella and Wagner also agreed with the result but, unlike the other seven judges (see paras 91 and 198), they adopted a new choice of law rule for internet defamation. This was a live issue on the stay motion because the applicable law is a relevant factor in determining the most appropriate forum. They rejected the lex loci delicti rule from Tolofson (available here) and instead used as the connecting factor the place of the most substantial harm to reputation (paras 109 and 144). Justice Wagner wrote separately because he rejected (paras 147-148) Justice Abella’s further suggestion (explained above) that the law of jurisdiction should also be changed along similar lines.
The core disagreement between Justice Cote (for the majority) and the dissent (written jointly by Chief Justice McLachlin and Justices Moldaver and Gascon) was that Justice Cote concluded that the motions judge made six errors of law (para 50) in applying the test for forum non conveniens, so that no deference was required and the court could substitute its own view. In contrast, the dissent held that four of these errors were “merely points where our colleague would have weighed the evidence differently had she been the motions judge” (para 179) which is inappropriate for an appellate court and that the other two errors were quite minor and had no impact on the overall result (para 178). The dissent held strongly to the orthodox idea that decisions on motions to stay are entitled to “considerable deference” (para 177) lest preliminary motions and appeals over where litigation should occur undermine stability and increase costs (para 180).
Another fundamental disagreement between Justice Cote and the dissent was their respective view of the scope of the plaintiff’s claim. During the motion and appeals, the plaintiff made it clear that he was only seeking a remedy in respect of damage to his reputation in Ontario (as opposed to anywhere else) and that he was not going to sue elsewhere. The dissent accepted that this undertaking to the court limited the scope of the claim (paras 162-163) and ultimately it pointed to Ontario as the most appropriate forum. In contrast, Justice Cote held that the plaintiff’s undertaking “should not be allowed to narrow the scope of his pleadings” (para 23). It is very hard to accept that this is correct, and indeed on this point Justice Karakatsanis broke with Justice Cote (para 101) and agreed with the dissent. Why should the court not accept such an undertaking as akin to an amendment of the pleadings? Justice Cote claimed that “[n]either Goldhar nor my colleagues … may now redefine Goldhar’s action so that it better responds to Haaretz’s motion to stay” (para 24). But why should the plaintiff not be able to alter the scope of his claim in the face of objections to that scope from the defendant?
There are many other points of clash in the reasons, too many to engage with fully here. How important, at a preliminary stage, is examination of what particular witnesses who have to travel might say? What role does the applicable law play in the weighing of the more appropriate forum when it appears that each forum might apply its own law? Does a subsequent proceeding to enforce a foreign judgment count toward a multiplicity of proceedings (which is to be avoided) or do only substantive proceedings (on the merits) count? Is it acceptable for a court to rely on an undertaking from the plaintiff to pay the travel and accommodation costs for the defendant’s witnesses or is this allowing a plaintiff to “buy” a forum?
It might be tempting to treat the decision as very much a product of its specific facts, so that it does not offer much for future cases. There could, however, be cause for concern. As a theme, the majority lauded “a robust and careful” assessment of forum non conveniens motions (para 3). If this robust and careful assessment is to be performed by appellate courts, is this consistent with deference to motions judges in their discretionary, fact-specific analysis? The dissent did not think so (para 177).