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Supreme Court of Canada Allows Courts to Sit Extraterritorially

In Endean v British Columbia, 2016 SCC 42 (available here) the Supreme Court of Canada has held that “In pan-national class action proceedings over which the superior court has subject-matter and personal jurisdiction, a judge of that court has the discretion to hold a hearing outside his or her territory in conjunction with other judges managing related class actions, provided that the judge will not have to resort to the court’s coercive powers in order to convene or conduct the hearing and the hearing is not contrary to the law of the place in which it will be held” (quotation from the court’s summary/headnote).

The qualifications on the holding are important, since some of the earlier lower court decisions had been more expansive in asserting the inherent power of the superior court to sit outside the province (for example beyond the class proceedings context).  I am concerned about any extraterritorial hearings that are not expressly authorized by specific statutory provisions, but I do appreciate the utility (from an efficiency perspective) of the court’s conclusion in the particular context of this dispute.  It remains to be seen if attempts will be made to broaden this holding to other contexts.

Supreme Court of Canada Evolves Test for Taking Jurisdiction

The Supreme Court of Canada has released its decision in Lapointe Rosenstein Marchand Melancon LLP v Cassels Brock & Blackwell LLP, 2016 SCC 30 (available here).  The decision builds on the court’s foundational decision in Club Resorts Ltd v Van Breda, 2012 SCC 17, which altered the law on taking jurisdiction in cases not involving presence in the forum or submission to the forum.

In Club Resorts the court held that to take jurisdiction in service ex juris cases the plaintiff had to establish a presumptive connecting factor (PCF) and it identified four non-exhaustive PCFs for tort claims.  The fourth of these was that a contract connected with the dispute was made in the forum.  This was viewed as unusual: there was very little precedential support for considering such a connection sufficient to ground jurisdiction in tort cases.  Commentators expressed concern about the weakness of the connection, based as it was on the place of making a contract, and about the lack of a clear test for determining whether such a contract was sufficiently connected to the tort claim.  Both of these issues were squarely raised in Lapointe Rosenstein.

Ontario Court Enforces American Judgments Against Iran

Under the State Immunity Act, foreign states are generally immune from being sued in Canada.  This includes being sued on a foreign judgment.  However, in 2012 Canada enacted legislation to give victims of terrorism the ability to sue a foreign state that sponsored the terrorism.  It also made it easier for foreign judgments against such a state to be enforced in Canada.

In Tracy v The Iranian Ministry of Information and Security, 2016 ONSC 3759 (released June 9, 2016; likely to be posted in the week of June 13, 2016, in CanLII) the Ontario Superior Court of Justice had to consider these legislative reforms and how they applied to a series of American judgments rendered against Iran in favour of American victims of terrorist acts which Iran was found to have sponsored.  The court held that Iran was not immune from the enforcement proceedings and that accordingly the American judgments were enforceable against certain assets of Iran in Ontario.

No Independent Jurisdiction Requirement for Proceeding to Enforce a Foreign Judgment in Canada

The Supreme Court of Canada has released its decision in Chevron Corp v Yaiguaje (available here).  The issue before the court was whether the Ontario courts have jurisdiction to recognize and enforce an Ecuadorian judgment (for over $US 18 billion) where the foreign judgment debtor Chevron Corporation (“Chevron”) claims to have no connection with the province, whether through assets or otherwise.  On one view, because the process for enforcing a foreign judgment is to commence a new domestic proceeding and thereby sue on the foreign judgment, the enforcement proceeding must have its own independent analysis of jurisdiction.  Put another way, there cannot be a proceeding in respect of which the court does not have to have jurisdiction.  On a different view, because the analysis of the claim on the foreign judgment considers, among other things, the sufficiency of the rendering court’s jurisdiction (Chevron defended on the merits in Ecuador), that is the only required analysis of jurisdiction and there is no need for a separate consideration of the enforcing court’s jurisdiction.  The Supreme Court of Canada, agreeing with the Court of Appeal for Ontario, has held that the latter view is correct.

In summarizing its conclusion (para 3) the court stated “In an action to recognize and enforce a foreign judgment where the foreign court validly assumed jurisdiction, there is no need to prove that a real and substantial connection exists between the enforcing forum and either the judgment debtor or the dispute.  It makes little sense to compel such a connection when, owing to the nature of the action itself, it will frequently be lacking. Nor is it necessary, in order for the action to proceed, that the foreign debtor contemporaneously possess assets in the enforcing forum.  Jurisdiction to recognize and enforce a foreign judgment within Ontario exists by virtue of the debtor being served on the basis of the outstanding debt resulting from the judgment.”

A Court’s Inherent Jurisdiction to Sit Outside its Home Territory

Another step in the evolution of the common law on this issue has been taken by the Court of Appeal for Ontario in Parsons v Ontario, 2015 ONCA 158 (available here).  The court disagrees in some respects with the earlier decision, on the same issue, of the British Columbia Court of Appeal in Endean v British Columbia, 2014 BCCA 61 (available here) (discussed by me over a year ago here).  It may be that in light of this conflict the Supreme Court of Canada will end up hearing appeals of either or both decisions.

People infected with the Hepatitis C virus by the Canadian blood supply between 1986 and 1990 initiated class actions in each of Ontario, Quebec and British Columbia.  These actions were settled under an agreement which provided for ongoing administration of the compensation process by a designated judge in each of the three provinces.  In 2012 the issue arose as to whether the period for advancing a claim to compensation could be extended.  Rather than having three separate motions in each of the provinces before each judge to address that issue, counsel for the class proposed a single hearing before the three judges, to take place in Alberta where all of them would happen to be on other judicial business.  In the face of objections to that process, motions were brought in each province to determine whether such an approach was possible.  The initial decision in each province was that a court could sit outside its home province.  The Quebec decision was not appealed but the other two were.

Can a Court Sit Outside its Territorial Jurisdiction?

In Parsons v The Canadian Red Cross Society, 2013 ONSC 3053 (available here), Winkler CJ (of the Court of Appeal, here sitting down in the Superior Court of Justice) has held that a judge of the SCJ can sit as such outside Ontario.  No authority, it seems, requires the SCJ to sit only in Ontario.

The decision seems to me, at least on an initial reading, largely based on pragmatism.  It seems efficient to so allow and so the court does.  But I have some preliminary sense that there are some larger concerns here that are not being fully thought through.  The place where a court sits seems awfully fundamental to its existence and authority as a court.  In addition, the brushing aside of concerns about the open court principle (see paras 48-50) seems too minimal.

Part of the decision is based on Morguard and the federal nature of Canada (see para 25), so maybe the judge could not so sit outside Canada?

Recent Canadian Conflicts Scholarship

The following articles about conflict of laws in Canada were published over the past year or so:

Brandon Kain, “Solicitor-Client Privilege and the Conflict of Laws” (2012) 90 Can Bar Rev 243-99

Christina Porretta, “Assessing Tort Damages in the Conflict of Laws: Loci, Fori, Illogical” (2012) 91 Can Bar Rev 97-134

Matthew E Castel, “Anti-Foreign Suit Injunctions in Common Law Canada and Quebec Revisited” (2012) 40 Adv Q 195-212

Nicholas Pengelley, “‘We all have too much Invested to Stop’: Enforcing Chevron in Canada” (2012) 40 Adv Q 213-32

These are in addition to the several articles, mentioned in an earlier post, about the Supreme Court of Canada’s decision in Club Resorts.

Ontario Court Refuses to Hear Chevron/Ecuador Enforcement Action

As many of you know, in 2011 several residents of Ecuador won a judgment in the courts of that country against Chevron Corporation for some $18 billion.  In 2012 the successful plaintiffs sued Chevron Corporation and Chevron Canada Ltd. in Ontario, seeking to have the Ecuadorian judgment enforced there.  The defendants brought a motion challenging the Ontario court’s jurisdiction to hear the action.  The Ontario Superior Court of Justice has now released its decision, siding with the defendants.  The decision has not yet been posted on CanLII but is available here.  The plaintiffs’ lawyer has publicly indicated that his clients will appeal.

Key aspects of the decision have been summarized by Roger Alford on the Opinio Juris website (here).

 

Articles on the SCC’s Van Breda v Club Resorts

Things have been pretty quiet on the conflict of laws front in Canada over the past several months.  But lower courts and academics have been working to understand the new framework for taking jurisdiction set out in April 2012 by the Supreme Court of Canada in Van Breda v Club Resorts (available here).

Several useful articles have now been written about this decision:

Tanya Monestier, “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2013) 36 Fordham International Law Journal 396

Vaughan Black, “Simplifying Court Jurisdiction in Canada” (2012) 8 Journal of Private International Law 411

Joost Blom, “New Ground Rules for Jurisdictional Disputes: The Van Breda Quartet” (2012) 53 Canadian Business Law Journal 1

New Canadian Framework for Assumption of Jurisdiction

After 13 months the Supreme Court of Canada has finally released its decisions in four appeals on the issue of the taking and exercising of jurisdiction.  The main decision is in Club Resorts Ltd v Van Breda (available here) which deals with two of the appeals.  The other two decisions are Breeden v Black (here) and Editions Ecosociete Inc v Banro Corp (here).

The result is perhaps reasonably straightforward: in all four cases the court upholds the decisions of both the motions judges and the Court of Appeal for Ontario.  All courts throughout held that Ontario had jurisdiction in these cases and that Ontario was not a forum non conveniens.

The reasoning is more challenging, and it will take some time for academics, lawyers and lower courts to work out the full impact of these decisions.  The court’s reasoning differs in several respects from that of the courts below.