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Supreme Court of Canada Affirms Importance of Jurisdiction Agreements

In Momentous.ca Corp v Canadian American Assn of Professional Baseball Ltd, 2012 SCC 9 (available here) the court has affirmed its willingness to give effect to exclusive jurisdiction agreements in favour of a foreign forum. 

The decision is brief (12 paragraphs) and was released only just over a month after the case was argued.  It is a unanimous decision by the seven judges. 

Academic commentary about the decision has been quite mixed.  I am not aware that anyone thinks the decision is wrong.  There is much consensus that the court reached the correct result: the defendant should have been able to rely on the jurisdiction agreement in favour of North Carolina to resist proceedings in Ontario.  But there is much disagreement about the quality of the brief reasons.

Jurisdiction in Cross-Border Libel Cases

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.

Court of Appeal for Ontario Rejects “Fourth Defence” to Enforcement of Foreign Judgments

The long-running litigation between the United States and a group of defendants who operated a cross-border telemarketing business selling Canadian and foreign lottery tickets to Americans has reached another mile-post with the decision of the Court of Appeal for Ontario in United States of America v. Yemec, 2010 ONCA 414 (available here).  The defendants were likely riding high before this decision, having done quite well in resisting the enforcement of the judgment of an Illinois court finding them liable for $19 million and permanently enjoining them from telemarketing any product or service to anyone in the United States.  But the tables are now turned, with the Court of Appeal for Ontario ordering enforcement of the Illinois judgment.

Reformulating a Real and Substantial Connection

In Canada, the test for taking jurisdiction over an out-of-province defendant requires that there be “a real and substantial connection” between the dispute and the forum.  In 2002 the Court of Appeal for Ontario created a framework for analyzing a real and substantial connection, setting out, in Muscutt v. Courcelles, eight factors to consider.  This framework became the standard in Ontario and was adopted by appellate courts in some other Canadian provinces.  However, in 2009, in preparing to hear two appeals of decisions on motions challenging the court’s jurisdiction, the Court of Appeal for Ontario indicated that it was willing to consider whether any changes were required to the Muscutt framework.  The two cases, consolidated on appeal as Van Breda v. Village Resorts Limited, 2010 ONCA 84 (available here), each concerned serious injuries that were suffered outside of Ontario.

Approach to Jurisdiction under the CJPTA

The British Columbia Court of Appeal’s decision in Stanway v. Wyeth Pharmaceuticals Inc., 2009 BCCA 592 (available here) is an important contribution to the developing Canadian jurisprudence on the Civil Jurisdiction and Proceedings Transfer Act, a statute governing the taking of jurisdiction that has been adopted in several provinces.

A leading common law approach to the question of whether there is a real and substantial connection between a dispute and the forum (the test for jurisdiction) is that outlined in the Court of Appeal for Ontario’s decision in Muscutt v. Courcelles (available here).  There is an ongoing controversy about the extent to which that approach has any relevance after a province has adopted the CJPTA.  This is because the statute sets out an open-ended list of situations in which a real and substantial connection is presumed to exist (s. 10).  However, it remains open to a plaintiff (under s. 3) to otherwise establish such a connection, and on one view the approach in Muscutt is relevant to that analysis.  See in Nova Scotia the decision in Bouch v. Penny (available here).

In Stanway the court expresses considerable hostility towards the Muscutt approach.  It references academic and judicial criticism of the decision, while selectively omitting any reference to the competing academic and judicial support for it.  It makes clear that it has no application in cases that are caught by s. 10.  It does not indicate what should happen in cases outside that section, but the overall tone suggests that it would not welcome using Muscutt in such cases.

Consultation Paper on Jurisdiction

The Law Commission of Ontario has released a consultation paper written by Professor Janet Walker (Osgoode Hall Law School, York University).  The paper (available here) proposes that Ontario’s current law on the taking and retaining of jurisdiction in civil matters is in need of reform.  It offers a proposed statute which would reform the law in this area.  The proposals have some common elements with the Uniform Law Conference of Canada’s model statute, the Court Jurisdiction and Proceedings Transfer Act (available here), but also some important differences.

The Law Commission welcomes comments on the paper, and the process for commenting is explained in the paper.  Beyond this, those generally interested in how countries resolve issues of jurisdiction in civil matters should find the points raised in the paper of interest.

To date three Canadian provinces have moved away from the traditional approach, which is based on a combination of common law and rules of civil procedure, and have brought into force the Court Jurisdiction and Proceedings Transfer Act (British Columbia, Saskatchewan and Nova Scotia).  Some other provinces have enacted the statute but not yet brought it into force, and some other provinces are considering adopting it.