Nov 20, 2014

Litigation Across Borders: Determining Jurisdiction

Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 SCR 572

In a lawsuit between parties living in different states or torts committed abroad, how do the courts determine who has jurisdiction?

The leading case on jurisdiction in Canada is Van Breda v Village Resorts Ltd. ("Van Breda").[1] Van Breda involved a personal injury action arising from a purchased vacation. In deciding which jurisdiction should hear the case, the Supreme Court of Canada established the following three-step test to determine jurisdiction: (1) First, the court asks whether they have presumptive jurisdiction; (2) Second, the opposition has an opportunity to rebut the court's presumptive jurisdiction; and (3) If the court has presumptive jurisdiction, the court determines whether it should decline to exercise its jurisdiction in favour of a more appropriate forum. To establish presumptive jurisdiction, the onus is on the party seeking to have jurisdiction determined in favour of the domestic court. The four factors the court considers to determine presumptive jurisdiction are: (1) Was the defendant a resident in the jurisdiction?; (2) Does the defendant carry on business in the jurisdiction?; (3) Was the tort committed in the jurisdiction?; and (4) Was a contract connected with the dispute made in the jurisdiction?[2]

If the court determines that it has presumptive jurisdiction, the court then moves onto step three to determine whether it should decline to exercise jurisdiction in favour of a more appropriate forum (forum non conveniens). The leading case on the third step is the Supreme Court of Canada decision in Breeden v Black.[3] In Breeden v Black, the court sets out the five elements to consider when determining the most appropriate forum as: (1) Comparative convenience and expense for parties and their witnesses; (2) The applicable law regarding whether it is the law of wrongs in Mexico, for example, or the law of wrongs in Ontario that applies to the question; (3) The possibility of conflicting judgments or a multiplicity of proceedings; (4) The ability to enforce an eventual judgment; and (5) The fair and efficient working of the Canadian legal system as a whole. The party raising forum non conveniens has the burden of showing that his or her forum is clearly more appropriate in the circumstances. Border-line decisions will be held in favour of the party content with the court's jurisdiction.

[1]2012 SCC 17, 2012 CarswellOnt 4268.

[2] Ibid, para 90.

[3] 2012 SCC 19.