Ontario CA Establishes New Test for Assuming Jurisdiction Over Foreign Defendants

A five-judge panel of the Ontario Court of Appeal released a joint decision on February 2, 2010 in two appeals – Van Breda v. Village Resorts Limited et al. and Charron v. Bel Air Travel Group Ltd. et al. – which establishes a new test for determining when an Ontario court is entitled to assume jurisdiction over a foreign defendant.

Both the Van Breda case and the Charron case involved accidents suffered by Ontario residents at two different resorts in Cuba. Both resorts were operated by the defendant, Club Resorts Ltd. (CRL), a Cayman Islands company.

In each case, the plaintiffs returned to Ontario and commenced lawsuits against CRL and other defendants in the Ontario Superior Court. CRL brought a motion in each case for an order staying or dismissing the action on the basis that the Ontario court lacked jurisdiction simpliciter over these claims against CRL, or alternatively that Cuba was a clearly more appropriate forum for the conduct of these actions.

In Van Breda, Justice Laurence Patillo dismissed CRL's motion, and held that the Ontario court has jurisdiction over this claim against CRL. In Charron, Justice Gregory Mulligan similarly dismissed CRL's motion.

CRL appealed the motion decisions in both cases. The appeals were originally heard jointly before a three-judge panel of the Ontario Court of Appeal on April 30, 2009. The panel reserved its decision. While the decision was under reserve, the Court of Appeal contacted counsel for all parties to advise that the court was contemplating revisiting the test for jurisdiction that it had set in the “Muscutt quintet” in 2002. The Court of Appeal asked counsel to file new facta on the question of whether the law of jurisdiction should be changed, and if so, to what, and to re-attend for a new two-day rehearing of the appeals.

The appeals were reheard on October 5 and 6, 2009. By reasons for decision dated February 2, 2010, the Court of Appeal dismissed CRL's appeals in both cases. In the course of doing so, the Court of Appeal modified the “Muscutt” test with a new common-law test that is modelled upon the Uniform Law Conference's model Court Jurisdiction and Proceedings Transfer Act (CJPTA).

Leave to appeal to the Supreme Court of Canada has been filed by CRL.

John Olah of Beard Winter LLP represented defendant (appellant) CRL in Van Breda.

Fasken Martineau DuMoulin LLP represented defendant (appellant) CRL in Charron, with a team comprising Peter Pliszka, Robin Roddey and Sharon Horst.

Paliare Roland Rosenberg Rothstein LLP represented the plaintiffs (respondents) in Van Breda, with a team comprising Chris Paliare, Robert Centa and Tina Lie.

Adair Morse LLP represented the plaintiffs (respondents) in Charron, with a team comprising Jerome Morse, Lori Stoltz and John Adair.

McCague Peacock Borlack McInnis & Lloyd LLP represented defendant (respondent) Bel Air Travel Group Ltd. in Charron, with a team comprising Howard Borlack and Lisa La Horey.

Catharine Buie of Buie Cohen LLP represented defendant (respondent) Hola Sun Holidays Ltd. in Charron.

Torys LLP represented intervenor The Tourism Industry Association of Ontario, with a team comprising John Terry and Charles Finlay.

Allan Rouben represented intervenor Ontario Trial Lawyers Association.