Hayes v. Peer 1 Network Inc.

86 O.R. (3d) 475

Ontario Superior Court of Justice,

Divisional Court,

Lederman J.

June 25, 2007

Conflict of laws -- Forum conveniens -- Attornment clause -- Motion judge erring in finding that non-exclusive attornment clause in employment contract shifted onus to plaintiff employee to demonstrate that Ontario was more appropriate forum than Washington.

The plaintiff, a resident of Ontario, sued the defendant for damages for wrongful dismissal. The employment contract between the parties provided that the agreement was governed by the law of the State of Washington and that each party irrevocably attorned to the jurisdiction of the court system of the State of Washington. The Master stayed the action on the ground of forum non conveniens. The Master found that, because there was a non-exclusive attornment clause in the employment contract, the plaintiff had the onus to demonstrate that Ontario was a more appropriate forum than Washington. The Master found that the plaintiff had failed to meet this onus. The plaintiff appealed.

Held, the appeal should be allowed.

The Master erred in law in shifting the onus to the plaintiff. The onus would shift if there is no real issue about the validity of the non-exclusive attornment clause. Where there is, however, there is no shifting of the onus. While the non-exclusive attornment clause is a factor, it is only one factor to consider in the analysis of the appropriate forum and should not, in isolation, be determinative. In the circumstances, it could not be said that Washington was clearly the more appropriate forum.

APPEAL from an order staying an action on the ground of forum non conveniens.

Cases referred to Fairfield v. Low (1990), 1990 6955 (ON SC), 71 O.R. (2d) 599, [1990] O.J. No. 58, 28 C.P.R. (3d) 289, 44 C.P.C. (2d) 65 (H.C.J.); Ruggeberg v. Bancomer, S.A. [1998] O.J. No. 538, 53 O.T.C. 350, 77 A.C.W.S. (3d) 740 (Gen. Div.); Sugar v. Megawheels Technologies Inc., [2006] O.J. No. 4493, 153 A.C.W.S. (3d) 89 (S.C.J.), consd [page476]

Daniel A. Lublin, for appellant. Ellen V. Swan, for respondent.

LEDERMAN J.: -- Nature of Proceeding

[1] This is an appeal from the Order of Master Glustein staying the plaintiff's action on the ground of forum non conveniens.

[2] The Master found that there was a non-exclusive attornment clause in an employment agreement whereby the parties irrevocably attorned to the jurisdiction of the court system of the State of Washington and as a result, the plaintiff had the onus to demonstrate that Ontario is a more appropriate forum than Washington. The Master found that the plaintiff had not met his onus of establishing that Ontario is a more convenient forum than Washington. Accordingly, he granted the defendant's motion and ordered a stay of the action. Background Facts

[3] The plaintiff is a resident of Ontario and was at all times employed by the defendant at its offices in Toronto. The defendant is incorporated under the laws of Canada and its corporate office is located in Vancouver, British Columbia. The defendant's parent company which is the primary operating company for the defendant is incorporated pursuant to the laws of Washington state.

[4] The plaintiff commenced employment with the defendant as a Data Centre Technician at the defendant's Toronto office on March 11, 2003, and was paid $15 per hour.

[5] At the end of December 2003, he was informed in a telephone conversation that he would be promoted to the position of Data Centre Manager. Shortly afterwards, the plaintiff was presented with a written form of agreement which he signed on January 1, 2004. The plaintiff was first paid his increased salary at a rate of $43,000 per annum or more than $20 per hour on January 15, 2004.

[6] The plaintiff's employment was terminated at the end of April 2005.

[7] The plaintiff commenced this action for wrongful dismissal in Ontario and served the statement of claim on the defendant in Toronto. [page477]

[8] Clause 9(g) of the employment agreement provided as follows:

This Agreement is governed by the law of the State of Washington and each party irrevocably attorns to the jurisdiction of the court system of the State of Washington.

[9] Under Washington law a discharged at-will employee is entitled to severance pay only to the extent that the employer had promised by contract to provide it. Severance pay provisions are generally enforced by Washington courts in accordance with their terms so long as the contract is valid. Onus To Establish Forum Non Conveniens

[10] The plaintiff submits that although the Master correctly determined that the language of clause 9(g) in the contract is a non-exclusive attornment clause, he incorrectly concluded that the plaintiff had the onus to establish that Ontario is a more appropriate forum for this action when compared to the State of Washington.

[11] The Master based his finding on the decision in Fairfield v. Low (1990), 1990 6955 (ON SC), 71 O.R. (2d) 599, [1990] O.J. No. 58 (H.C.J.) in which Doherty J. (as he then was) stated at para. 15:

At the risk of adding yet another formulation of the applicable test to be applied, it is my view that where the parties have agreed upon jurisdiction in a contract which is the subject-matter of the dispute, and where there is no suggestion that the agreement as it relates to jurisdiction offends public policy or was the product of grossly uneven bargaining positions, the court should give effect to the term of the agreement unless the party seeking to have the case heard in another jurisdiction can show that the interests of the parties and the interests of justice favour trial in that other jurisdiction. In this case, the onus would rest on the plaintiff to demonstrate that Ontario was a more appropriate forum than British Columbia. This formulation recognizes the importance of the clause, although it gives such a clause somewhat less weight than did Galligan J. in Gulf Canada Ltd. v. Turbo Resources Ltd., supra. This approach is also consistent with English jurisprudence: The "Eleftheria", [1969] 2 All E.R. 641 at pp. 645 and 648 (Adm. Div.), per Brandon J. (Emphasis added)

[12] The Master also relied on Ruggeberg v. Bancomer, S.A., [1998] O.J. No. 538, 53 O.T.C. 350 (Gen. Div.), which referred to the Fairfield decision. Cullity J. in that case distinguished between exclusive jurisdiction clauses and non- exclusive attornment clauses, and suggested at para. 10 that even with the latter, there is a shifting of onus except that it may be easier for a party favouring another jurisdiction to displace the effect of the clause. But, Cullity J. also noted at para. 24: [page478]

There may be more to be said on this question -- particularly if cases arise where it is alleged that no contract was ever entered into because there was no offer and acceptance or meeting of the minds.

[13] In the instant case, the plaintiff vigorously asserts that the employment contract in question does infringe public policy and that it was the product of grossly uneven bargaining power. The plaintiff has raised public policy concerns with respect to allowing a Canadian employer to introduce at-will employment terms to an employment relationship that has no ties to the State of Washington other than clause 9(g) and submits that such a clause is unenforceable against him. Moreover, the plaintiff takes the position that the written contract was imposed on him without fresh consideration and without notice and in circumstances where there was unequal bargaining power. To that extent, it cannot be said that "there is no suggestion that the agreement as it relates to jurisdiction offends public policy or was the product of grossly uneven bargaining positions" as stated in the Fairfield case.

[14] Accordingly, on the face of the proviso in Fairfield itself, there was no basis for shifting the onus to the plaintiff in the circumstance where there is a non-exclusive attornment clause.

[15] Furthermore, in Sugar v. Megawheels Technologies Inc., [2006] O.J. No. 4493, 153 A.C.W.S. (3d) 89 (S.C.J.), in dealing with a clause which is almost identical to clause 9(g) of the contract in the instant case, D. Brown J. concluded that the moving party had the onus to satisfy the court that there was a more appropriate jurisdiction than the domestic jurisdiction chosen by the plaintiff. In other words, despite acknowledging that a non-exclusive attornment clause existed, the court in Sugar did not shift the onus onto the plaintiff to demonstrate that Ontario was the more appropriate forum. Although Sugar made no reference to the Fairfield or the Ruggeberg cases, it is consistent with the principle as stated in Fairfield in that the traditional onus remains on a moving party to show that there is clearly a more appropriate forum than Ontario which has jurisdiction as of right because of its presence-based jurisdiction.

[16] The rationale in Fairfield is that the onus would shift if there is no real issue about the validity of the non- exclusive attornment clause. Where there is, however, there is no shifting of the onus. While the non-exclusive attornment clause is a factor, it is only one factor to consider in the analysis of the appropriate forum and should not in isolation be determinative.

[17] The Master did consider all of the appropriate factors (location in which the contract is signed, location of witnesses, [page479] location of evidence, jurisdiction in which the factual matters arose, residence and place of business of the parties, any judicial advantage, governing law of the contract) to be taken into account in determining which is the more convenient forum. He concluded that the evidence is that either Washington or British Columbia (which the defendant is prepared to accede to) would be the more appropriate forum than Ontario. However, as the test requires, he did not conclude, nor does an analysis of all of the factors lead to the conclusion, that Washington is clearly the more appropriate forum.

[18] Having erred in law in shifting the onus to the plaintiff and since it cannot be said that Washington is clearly the more appropriate forum, the appeal should be allowed. The Master's order is set aside, and the defendant's motion for an order for a stay is dismissed.

[19] If the parties cannot agree as to the costs of the appeal and the costs before the Master, they may make written submissions within 30 days.

Appeal allowed.