COURT FILE NO.: 405/07
DATE: 20080415
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
ZAHERALI VISRAM and TRI STAR IMPORT & EXPORT INC.
Plaintiffs
(Respondents)
- and -
JAGDISH CHANDARANA, aka JACK CHANDARANA, HASSAN ASKARI HUSSAIN, ZAMWEST ENTERPRISES LTD., WEST POINT TEXTILES LTD., SNEHAL CHANDARANA and GUHAAB ENTERPRISES LIMITED
Defendants
(Appellant- Hassan Askari Hussain)
Harvey S. Dorsey, for the Plaintiffs (Respondents)
Stephen M. Turk, for the Defendant (Appellant) Hassan Askari Hussain
HEARD: April 2, 2008
MOLLOY J.
REASONS FOR JUDGMENT
Introduction
[1] The defendant Hassan Askari Hussain (“Hussain”) brought a motion for a stay of this action based on the ground that the proper forum for the action is Zambia. That motion was dismissed by Master Graham by Order dated July 20, 2007. Hussain now appeals to this Court from the Order of Master Graham. The appeal is opposed by the plaintiffs. The other defendants take no position.
[2] The plaintiff Zaherali Visram (“Visram”) lives in Ontario. He is the principal of the plaintiff corporation (“Tri Star”). Until the events giving rise to this action, Visram was involved in a business venture with the defendants Jagdish Chandarana (“Jack”) and Hasnain Dewji (“Dewji”). These three men were the shareholders of Guhaab Enterprises Limited (“Guhaab”), a company incorporated in Zambia. Guhaab carried on business in Zambia selling used clothing, which was imported from Canada. The general manager of Guhaab’s business in Zambia was Hussain, who is a resident of Zambia.
[3] The defendant West Point Textiles Ltd. (“West Point”) is an Ontario corporation owned by Jack and his son Snehal Chandarana (“Snehal”). West Point was in the business of the purchase and sale of used clothing in bulk for export and operated in Ontario. West Point was the sole supplier of goods to the plaintiff Tri Star and Tri Star, in turn, was the sole supplier to Guhaab. Tri Star first shipped the goods to Tanzania, where they were picked up by a transportation company owned by Dewji and transported inland to Guhaab’s warehouse in Zambia.
[4] In 2003, the three shareholders of Guhaab met for a shareholders’ meeting at the offices of Guhaab’s corporate counsel in Toronto. Hussain was also present at this meeting. It was decided at the meeting that Guhaab would be wound up and all of its assets sold. Hussain was to oversee the sale of the assets in Zambia. Initially the assets were to be purchased by an individual named Richard Sakala. However, that sale did not proceed and eventually an agreement of purchase and sale was drafted purporting to sell all of the assets to Zamwest Enterprises Ltd. (“Zamwest”), a Zambian company owned by Jack and Snehal. Before that agreement closed, Visram received information that led him to believe Guhaab was being defrauded and he refused to consent to the sale to Zamwest.
[5] Visram alleges that Zamwest has wrongfully appropriated all of Guhaab’s assets and is carrying on the same business in Zambia as had been conducted by Guhaab, using Guhaab’s assets. He further alleges that this came about as a result of a conspiracy to defraud Guhaab, entered into between Jack, Snehal, Hussain and Zamwest. Hussain continues to run the business of Zamwest in Zambia, pursuant to the directions of Jack and Snehal, who live in Toronto.
[6] This action was initially commenced on June 24, 2003 with Guhaab and Tri Star as plaintiffs. Instructions to bring the action were given to Guhaab’s counsel in Toronto by Visram and Dewji, who were two of the three directors of that company. The third director, Jack, was one of the defendants. The other defendants were Snehal, West Point, Zamwest and Hussain.
[7] The main claims asserted in the actions are as follows:
(a) Guhaab claimed damages of $1.1 million against West Point for unjust enrichment based on an allegation that West Point had short shipped some goods to Guhaab;
(b) Tri Star claimed damages of $121,000 against West Point and Jack for breach of contract relating to pre-paid freight payments made to West Point for goods that West Point never shipped;
(c) Guhaab claimed damages of $1.4 million against all of the defendants for fraud, conspiracy to defraud and conversion, alleging that the defendants conspired to cause Zamwest to appropriate all of Guhaab’s assets without payment to Guhaab;
(d) Tri Star claimed damages of $600,000 against all of the defendants for fraud, and conspiracy to defraud alleging that the defendants conspired to wrongfully strip Guhaab of its assets and as a result Guhaab was unable to pay Tri Star the $600,000 owing to it for goods purchased.
[8] On August 29, 2003, Hussain, through his Ontario solicitor, filed a statement of defence and also a counterclaim against Guhaab and Dewji. On that same day, the other defendants (the Chandarana defendants) filed a separate statement of defence and the companies Zamwest and West Point also asserted a counterclaim against Tri Star and Visram.
[9] Subsequently, Dewji withdrew his support for Guhaab’s action. In May, 2004, the Chandarana defendants moved for dismissal of Guhaab’s action and Visram responded with a motion to discontinue Guhaab’s action and substitute himself as the plaintiff in a representative capacity. Master Albert made an Order dated June 30, 2004 granting leave to Guhaab to discontinue its action. Guhaab delivered a Notice of Discontinuance on July 5, 2004. The claim of the plaintiff Tri Star remained in the action.
[10] Hussain brought a motion dated July 4, 2006, seeking a stay of the action on the grounds that Zambia is the more appropriate forum.
[11] In the meantime, there were continuing proceedings relating to whether Visram could assert claims for Guhaab in a representative capacity, which were ultimately resolved by Order of Master Graham dated February 2, 2007 naming Visram as a representative plaintiff to pursue claims on behalf of Guhaab and making Guhaab a defendant. None of the defendants opposed that Order being made. Visram and Tri Star delivered a Fresh as Amended Statement of Claim on February 7, 2007, making the same allegations and essentially seeking the same relief as had been originally asserted by Guhaab.
[12] The Chandarana defendants delivered an Amended Statement of Defence and Counterclaim dated March 29, 2007.
[13] Hussain’s motion for a stay was argued before Master Graham for full day on May 1, 2007. None of the other defendants took any position on the motion. Master Graham dismissed the motion for reasons delivered on July 20, 2007.
Standard of Review
[14] On the appeal before me, counsel for Hussain took no position on the standard of review I ought to apply, maintaining that whatever standard was applied, it has been met. Counsel for the plaintiffs submits that the appropriate standard is the same as would be applied for the final order of a judge: correctness on a question of law; palpable or overriding error on questions of fact; and, deference on an exercise of discretion. In Carter v. Brooks (1990), 2 O.R. (3d) 321 (C.A.), Morden A.C.J.O. distinguished the role of an appellate court in reviewing a trial judge’s decision from the situation in which the judge of first instance did not hear oral evidence, stating:
Since this is not a case where the Judge of first instance heard oral evidence, with the advantage that this would have given him over this Court in his assessment of the evidence and his findings of fact, the appellant, to succeed in the realm of fact, does not have the burden of establishing palpable and overriding error. An appeal, however, is not a rehearing which takes place as though there were not already a decision on the merits of the case. The Judge's decision is entitled to due respect and, I think, should not be set aside unless the appellant can show the Court that the Judge erred in his appreciation of the evidence, in the inferences he drew from the evidence, or in his application of the relevant legal considerations.
[15] The Ontario Court of Appeal has dealt with the standard of review to be applied on appeal from a decision of a judge on a forum conveniens motion in two recent decisions. In Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638 (C.A.), the Court of Appeal noted that as long as the correct legal test was applied, a decision of a motions judge as to the proper forum for an action is discretionary and entitled to “considerable deference” on appeal. Similarly, in BNP Paribas (Canada) v. BCE Inc. (2007), 2007 ONCA 559, 227 O.A.C. 102 (C.A.), the Court of Appeal held that the motions judge had correctly identified the relevant factors to take into account in determining whether Ontario was the appropriate forum for the action and that it was not the role of the appellate court to second guess the judge’s exercise of discretion as to the weight to be given to the various factors.
[16] Accordingly, the standard of review to be applied on an appeal from a judge on a forum non conveniens motion appears to be well-settled. The judge is required to be correct on questions of law. However, on the application of the law to the facts and the exercise of discretion, particularly with respect to the weighing of the various relevant factors, the judge’s determination will be given considerable deference. Whether or not the same level of deference should be afforded to decisions of a Master on issues of forum non conveniens is a matter upon which there is apparently no Court of Appeal decision and divided legal authority at the Divisional Court level.
[17] The starting point is that an Order dismissing a motion to stay or dismiss an action on the ground that Ontario is not the appropriate forum is final in nature: M.J. Jones Inc. v. Kingsway General Insurance Co. (2003), 68 O.R. (3d) 131 (C.A.). Since the landmark decision of Southey J. in Marleen Investments Ltd. v. McBride (1970), 23 O.R. (2d) 125 (Ont.H.C.), the test on appeal from an interlocutory order of a master is that there should be no interference unless the master was “clearly wrong”. However, as a result of two divergent streams of case law since that time, it is not clear whether all discretionary orders of masters are entitled to deference on appeal, or whether appeals from final orders, even those involving discretion, can be heard de novo with the appellate court substituting its own discretion for that of the master.
[18] In Moritex Europe Ltd. v. Oz Optics Ltd. (2006), 213 O.A.C. 156, 81 O.R. (3d) 783 (Div.Ct.), Epstein J. (as she then was) did an exhaustive review of the conflicting case law on this point, which I will not repeat here. She noted with favour the policy reasons supporting a deferential standard, as found in a number of the cases, e.g. Architectural Phases Inc. v. Torch Education Fund, [2005] O.J. No. 5233 (Div.Ct.) per Then J.; Noranda Metal Industries Ltd. v. Employers Liability Assurance Corp. (2000), 49 C.P.C. 4th 336 (Ont.S.C.J.), per Nordheimer J.; Correa v. CIBC General Insurance Co., [2001] O.J. No. 3599 (Ont.S.C.J.) per Sachs J.. However, Epstein J. concluded that the weight of the authority favoured requiring the master to be correct on a matter that was final or vital to the issues in dispute between the parties, in that case, and decided to apply the correctness standard on the matter before her, a summary judgment motion. In the result, Epstein J. dismissed the appeal, so the applicable standard had no impact on the result.
[19] I recognize that if one simply adds up the number of decisions going one way as opposed to the other, the weight of the authority is towards a correctness standard. However, in the vast majority of those cases, there is no real analysis of why that should be the applicable standard and in a good many of them, the standard applied had no impact on the result. In my view, given the split in the Divisional Court on this issue, it is best to take a principled approach that examines the purpose of the standard of review, and which is most in line with relevant Court of Appeal decisions.
[20] I recognize that there are no Court of Appeal decisions dealing specifically with the standard of review from final decisions of a master. However, I agree with Sachs J. in Correa that the lack of deference given to master’s decisions was rooted in the fact that, for the most part, masters do not hear oral evidence. As Sachs J. noted (at para 5), that type of reasoning is no longer in line with Court of Appeal decisions such as Carter v. Brooks and Equity Waste Management of Canada Corp v. Panorama Investment Group Ltd. (1997), 35 O.R. (3d) 321 (C.A.). Further, those cases applying the correctness standard appear to have their root in Casement v. Stoicevski (1983), 43 O.R. (2d) 436, which pre-dated Carter v. Brook, and arguably should be revisited.
[21] Nordheimer J. (in Noranda Metal Industries) and Sachs J. (in Correa) both referred to the policy basis for not permitting hearings de novo from final orders of masters, specifically that it would encourage more litigants to appeal than would otherwise be the case, thereby running up the cost and length of the litigation. I agree. Similar observations were made by Laskin J.A. writing the unanimous decision of the Court of Appeal in Equity Waste Management, although this was in relation to whether to give deference to motions judges making decisions on the basis of a written record. In addition to the concern that unlimited appellate intervention would invite more appeals with the inevitable and undesirable increased cost and delay, Laskin J.A. also endorsed a more deferential standard of review based on the “presumption of fitness” citing with approval at para 44 to the following excerpt from Standards of Review Employed by Appellate Courts (Juriliber: Edmonton, 1994), by the Honourable Roger Kerans at p. 28:
The governing principle for limiting review should be that the sole purpose of a standard of limited review is to avoid duplication of effort by judicial actors on issues if no commensurate improvement in the quality of justice occurs.
Appeal courts limit review because they have confidence in the capacity of first judges to do justice, and see no need to repeat that process. This leads to the presumption of fitness....
[22] I can see no principled basis for not applying the same standard of review to final decisions of a master as are applied to final decisions of a judge. In my view, all of the policy arguments support a deferential standard on review, rather than an automatic rehearing as if the master’s decision had never been made. A correctness standard permitting full rehearings encourages appeals, runs up costs, delays proceedings, wastes judicial resources, and fails to acknowledge the expertise of masters and the respect that ought to be accorded to their decisions. I also agree with Mr. Dorsey’s submission that in the construction lien area, where many of the cases are initially decided by a master subject to confirmation by a judge, we already have adopted the same deferential standard as is applied to trial judges. Those construction lien decisions are final in nature and often involve matters of considerable financial significance. Although those decisions often follow the hearing of oral testimony by the master, it is nevertheless an example of very substantial issues of a final nature being decided by masters, with the appellate court reviewing on the same standard as if the decision had been made by a judge. In my opinion, the fact that a matter falls within the jurisdiction of the master under the Rules, is a recognition of the expertise and competence of the masters, and their decisions in these areas ought to be reviewed on a standard of deference.
[23] Accordingly, in reviewing the decision of the master in this case, I will apply the standard articulated by the Court of Appeal in Equity Waste Management at para 46, as follows:
What is important for this appeal is the kind of error that justifies intervention by an appellate court. An error of law obviously justifies intervention. An appellate court may interfere with a finding of fact if the trial judge or motion judge disregarded, misapprehended, or failed to appreciate relevant evidence, made a finding not reasonably supported by the evidence, or drew an unreasonable inference from the evidence.
[24] To this I would add that where a master is engaged in the exercise of discretion involving the weighing of relevant factors, it is not appropriate for the reviewing court to second guess the weight to be placed on the various factors or to substitute its discretion for that of the master.
The Master’s Identification of the Applicable Legal Principles
[25] The analysis by the master in this case proceeded through three steps. First, he considered whether Hussain could be said to have consented to the jurisdiction of the Ontario courts. He concluded that the filing of the statement of defence and counterclaim constituted an attornment and met the first stage of the test. Second, in the event that he erred on the first step, the master also considered, in the alternative, whether the action has a real and substantial connection to Ontario and he concluded that it did. Third, the master held that if either of the first two tests had been met, he must then consider whether he should nevertheless exercise his discretion to decline jurisdiction on the basis that Zambia was the more appropriate forum for the action. The master was correct in his legal approach to the case and in his definition of the tests to be applied: Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (C.A.).
[26] The master identified the following factors as relevant to determining whether the real and substantial connection test had been met: (a) the connection between the plaintiff’s claim and Ontario; (b) the connection between the forum and the defendant; (c) unfairness to the defendant if the Ontario court assumes jurisdiction; (d) unfairness to the plaintiff if the Ontario court does not assume jurisdiction; (e) the involvement of other parties to the suit; (f) Ontario’s willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis; (g) whether the case is interprovincial or international in nature; and (h) comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere. The master held that no single one of these factors is determinative and that all relevant factors should be considered and weighed together. He further noted that this stage of the test requires only that Ontario have “a” real and substantial connection to the plaintiff’s claim, not that it be “the most” real and substantial connection. Again, the master correctly stated the law on these points: Muscutt; M. J. Jones Inc. v. Kingsway General Insurance Co., [2004] O.J. No. 1087 (C.A.).
[27] On the final stage of the test, the master recognized that he had a discretion to stay the action if there was some other jurisdiction “more convenient and more appropriate for the pursuit of the action and for securing the ends of justice, but that the existence of the more appropriate forum must be “clearly” established in order to displace the forum selected by the plaintiff. The master identified the following factors as relevant to his decision at this stage: (a) the location of the majority of the parties; (b) the location of key witnesses and evidence; (c) contractual provisions that specify applicable law or accord jurisdiction; (d) the avoidance of a multiplicity of proceedings; (e) the applicable law and its weight in comparison to the factual questions to be decided; (f) geographical factors suggesting the natural forum; (g) whether declining jurisdiction would deprive the plaintiff of a legitimate juridical advantage available in the domestic court. Again, this is a correct statement of the applicable law: Anchem Products Inc. v. British Columbia (Workers’ Compensation Board) (1993), 102 D.L.R. (4th) 96 (S.C.C.).
[28] The master correctly identified all of the relevant legal principles to be taken into account. There is no legal error requiring intervention by this Court. However, the defendant alleges that although the master correctly stated the test to be applied, he erred in his application of these principles. I will therefore consider whether there is a reviewable error in each of the three steps taken by the master.
Attornment
[29] Hussain argued before the master, and before this Court on appeal, that although he initially attorned to the jurisdiction of Ontario by filing a statement of defence, the plaintiff at that time was Guhaab and the current claim is by Visram. Therefore, Hussain submitted that the framework of the action has changed and that he did not attorn to the jurisdiction of the court in respect to the action as currently structured.
[30] The master rejected that argument. The master did a careful review of the original statement of claim and the current statement of claim and concluded that the claims being asserted are virtually identical. The only real difference is that Guhaab’s claims are now being asserted through Visram as the nominal representative plaintiff. I see no error by the master in that analysis.
[31] In the argument of the appeal before me, counsel for Hussain emphasized the fact that Guhaab had actually discontinued its claim, as opposed to merely substituting Visram as the representative plaintiff, and that a “fresh” statement of claim had been delivered. It would appear that this argument may have not been presented in exactly this way to the master. However, it is apparent that the master was aware of the nature of the new pleading and also was aware that the initial claim by Guhaab had been discontinued. I do not see that the discontinuance makes any difference. It was not a discontinuance of the action itself, but only of the claim by Guhaab; the claims by the plaintiff Tri Star remained in place. Further, TriStar repeated the same allegations of wrongdoing against Hussain and others as had been asserted by Guhaab, stating that Guhaab was no longer able to pay its debts to Tri Star because the defendants had wrongfully stripped it of its assets. Also, because the action was ongoing, Hussain still had an active counterclaim which he continued to assert, and in which he proposed Toronto as the place of trial.
[32] No authority was presented for the proposition that a change in the style of proceedings has the effect of nullifying a defendant’s attornment to the jurisdiction, and I know of no such legal principle. The master noted that there were no new documents and no other material change in circumstances for the defendant. The change in the claim did not give rise to any new claims or defences. Hussain suggests that the fact that Dewji is no longer supportive of the plaintiff’s claim is a change in circumstances. As a proposition of law, I cannot see how the support or lack of support for an action by a plaintiff company’s shareholders is at all relevant to a defendant’s attornment. Hussain further suggests he is prejudiced because there is no evidence that Dewji will participate in an action in Ontario. There is no evidence that Dewji will participate if the action is in Zambia either. Dewji is a resident of Tanzania, not Zambia. Further, Hussain is in touch with Dewji and has not even asked him about his intentions in this regard.
[33] The attornment by Hussain to this jurisdiction was clear and unequivocal. Hussain was represented by counsel at the time and must be taken to have understood his options. The defendant may regret attorning to the jurisdiction, but that is not a basis for withdrawing his attornment. The defendant’s only option at this point is to establish that Zambia is the clearly more appropriate forum, under the third stage of the analysis.
[34] I therefore conclude that the master was correct in his finding that Hussain had attorned to this jurisdiction. That being the case, there is no need for the master to also be correct at the second stage of his analysis (real and substantial connection), although I will review the decision on that basis as well, as it was fully argued on appeal and for the sake of completeness.
Real and Substantial Connection
[35] Although the master listed (at para 18 of his decision) the eight factors to be taken into account in determining whether the claim has a “real and substantial connection” to Ontario, when he reached his analysis on this point (at paras 32-34), he did not repeat those factors and did not organize his findings under those sub-headings. That is not an error in principle unless the master failed to apply relevant criteria.
[36] The master found (at para 33) that upon considering the eight relevant factors, he was persuaded that the test was met for the following reasons:
The alleged conspiracy to appropriate Guhaab’s assets and transfer them to Zamwest, must have been with the participation of the principals of Zamwest, Jagdish and/or Snehal, both of whom reside in Ontario and both of whom would have acted in Ontario.
Hussain's participation in the conspiracy arising from the alleged agreement to sell Guhaab's assets to Zamwest occurred in part while he attended the only shareholders and directors meeting of Guhaab, which was held in Ontario.
Hussain also acknowledges that in his capacity as managing director, first of Guhaab and then of Zamwest, he reported to Jadish or Snehal, in Ontario, on a daily basis.
Visram, the representative plaintiff for Guhaab, is resident in Ontario.
Tri Star is an Ontario corporation claiming damages as a result of a conspiracy between Jagdish, Snehal and West Point, all of whom are Ontario residents.
The shareholders agreement for Guhaab provides that it is governed by the law of Ontario.
[37] It is clear from this analysis that the master considered factors (a), (b), and (e): the connection between the plaintiff’s claim and Ontario; the connection between the forum and the defendant; and, the involvement of other parties to the suit. In this regard, he refers to: the connection between Ontario and where the acts of conspiracy occurred; the residence of Visram, Jagdish, Snehal, West Point, and Tri Star being in Ontario; and the fact that the business of Guhaab and Zamwest was conducted by their principals from Ontario; the fact that Hussain reported daily to the principals of his employer in Ontario and took direction from them; and the fact that Hussain had attended the shareholders meeting in Ontario at which some of the alleged acts of conspiracy occurred.
[38] Counsel for Hussain concedes that factor (g), whether the case is interprovincial or international, is not a consideration here. The issues of comity and reciprocal enforcement (factors (h) and (f)), which are not mentioned in the master’s analysis, also do not seem to me to have much impact here. Zambia is a common law jurisdiction. There is nothing in the record to suggest that Ontario would not recognize a judgment of a Zambian court that took jurisdiction on a similar basis, nor anything to suggest Zambia would not do the same for an Ontario judgment. Further, there is nothing in the record to support the bald suggestion made in Hussain’s factum that assuming jurisdiction in this case “would not accord with the standards of jurisdiction, recognition and enforcement prevailing elsewhere”. The master’s failure to mention these factors in his analysis reflects his conclusion, with which I agree, that they have no particular relevance in this case.
[39] Although the master does not make specific reference to factors (c) and (d), the relative unfairness to the respective parties if Ontario does or does not assume jurisdiction, these elements are largely duplicative of factors later taken into account at the third stage and the master’s analysis at that stage did not favour Hussain. It is clear that the master knew what the legal requirements were. In these circumstances, I do not consider his failure to specifically refer to each and every factor and make a specific finding on each of them to be necessarily fatal.
[40] Counsel for Hussain submits that the master erred in holding that Hussain engaged in a conspiracy in Ontario given Visram’s admission on cross-examination that no conspiracy was advanced at the shareholder’s meeting. I find no error in that conclusion. It is clear that the shareholders’ meeting occurred in Toronto, that Hussain was in attendance, that the subject of the meeting was the winding up of Guhaab and the sale of its assets, and that the claim alleges the sale of Guhaab’s assets was agreed to as a result of fraud by the defendants. Mr. Visram, in the course of cross-examination on his affidavit said, “The meeting was not part of the conspiracy.” That statement is ambiguous at best. The master’s conclusion that there is an allegation that Hussain took steps in furtherance of the conspiracy while he was in Toronto cannot be said to be a misapprehension of the evidence, or not reasonably supported by the evidence, or an unreasonable inference from the evidence. There is therefore no reviewable error on this point.
[41] Counsel for Hussain argues that the master erred by focusing incorrectly on the connection of parties to Ontario rather than on the connection between the claim itself and Ontario. He points to the fact that what is involved here is the alleged fraudulent sale of the assets of a Zambian company that was carrying on business in Zambia to another Zambian company that is also carrying on business in Zambia. Another central allegation is that Guhaab was doing well in its business in Zambia and that false representations were made to Visram to the contrary in order to persuade him to agree to the sale. Therefore, market conditions for the sale of used clothing in Zambia will also be a central issue. In my view, it is apparent from the master’s reasons that he was well aware of these circumstances and took them into account in his analysis.
[42] I agree that there is a substantial connection between the claim and Zambia. The master also recognized this. However, the test at this stage is not whether other jurisdictions might also have a real and substantial connection to the claim; the test is whether Ontario does. The master was aware of the position taken by Hussain and of the substantial connections to Zambia. However, after weighing all of the factors, he concluded that Ontario also had a real and substantial connection to the claim. There was evidence upon which he could reasonably come to that conclusion. His decision should therefore be given deference. I see no basis to interfere with it.
More Convenient Forum
[43] Finally, the master turned to the forum non conveniens issue. The master held that there was more than one forum capable of assuming jurisdiction in this case – both Ontario and Zambia. He correctly stated the law that the issue of most convenient forum needed to be considered regardless of whether the defendant was found to have attorned or to have met the real and substantial connection to Ontario test. He then held that he had a discretion to refuse to grant a stay of the Ontario proceedings, but that he ought only to do so where it was “clearly established” that Zambia was a more convenient and appropriate forum for the pursuit of the action and securing the ends of justice. This also is a correct statement of the law: Amchem Products Inc. v. British Columbia (Workers’ Compensation Board) (1993), 102 D.L.R. (4th) 96 (S.C.C.).
[44] The master set out the seven factors identified by the Court of Appeal in Muscutt as relevant to the analysis at this stage and then proceeded to consider the features of this case under each of those seven headings.
[45] First, he considered the location of the majority of the parties and held that this factor favoured Ontario. There are five parties in Ontario and three parties in Zambia. One of the parties that the master recognized to be located in Zambia is the subject company Guhaab, which arguably is less relevant given its current status. The master also noted that both Guhaab and the other Zambian company Zamwest have substantial connections to Ontario, particularly through their principals. I find no error in that analysis.
[46] Second, the master considered the location of the witnesses and evidence. This was a thorough and thoughtful analysis, covering nearly three full pages of the decision, which I do not propose to repeat here. The master concluded that the location of the witnesses was a factor favouring Zambia, but that the location of the documents was not a significant factor as they were not so substantial that it would be a burden to have them brought to Ontario. I would not interfere with the master’s conclusion on this factor. He analyzed the evidence carefully. I might have given more weight to the fact that many of the witnesses suggested as necessary by Hussain were of speculative relevance. However, it is not, in my view, appropriate to second guess the master’s evaluation in that regard. His conclusion was reasonable and supported by the evidence before him. In any event, if he erred at all on this issue, it was to Hussain’s advantage.
[47] Third, the master held that there were no contractual provisions as to the applicable law and that this factor had no relevance. That is not disputed.
[48] Fourth, the master considered the principle that a multiplicity of proceedings is to be avoided. He held that some of the Tri Star claims and counterclaims have no connection with Zambia. However, he also found that some of the claims relating to Tri Star were inextricably bound up with the Visram/Guhaab claims and that a multiplicity of proceedings could best be avoided if all of the claims were litigated in Ontario. He therefore concluded that this factor favoured Ontario as the appropriate forum. I see no error in his reasoning on this point.
[49] Fifth the master considered whether the applicable law favoured a forum other than Ontario. He held that he was unable to conclude that the applicable law would be predominantly that of Ontario or Zambia and that this was therefore a neutral factor. In coming to that conclusion, he considered where the various causes of action could be said to have arisen and what the applicable law would be. In my view, it was unnecessary to conduct that analysis. The onus was on the defendant to demonstrate that Zambia was clearly the more convenient forum. If the applicable law is the law of Zambia, it is awkward to litigate the case in Ontario as it would require the parties to call expert evidence as to the law in Zambia and the trial judge would have to make a finding on that evidence and then apply the Zambian law. However, that presumes that the law in Zambia is different from the law in Ontario. In the absence of expert evidence that the law in Zambia is different from here, the master was entitled to conclude that it was the same. Accordingly, this factor would not favour either Zambia or Ontario. It would be neutral, which is what the master found, although by a different route.
[50] Sixth, the master considered whether there were “geographical factors suggesting the natural forum”. He considered the residence of the parties and the principals of the corporate parties, the fact that the companies did business in Zambia and the fact that those companies were directed from Ontario. He then held that the geographical factors did not clearly favour either Ontario or Zambia.
[51] The term “geographical factors suggesting the natural forum” appears in the list of relevant factors in Muscutt, but there is no discussion of what that term means. Counsel were unable to direct me to any case that clarifies the term. Counsel for Hussain submits that what is required under this category is a reconsideration of the “real and substantial connection” test. It seems to me that if the Court of Appeal intended for the motions judge to re-apply the real and substantial connection test, it would have used those precise words. It also seems to me that the “geographic factors” part of the test must logically mean something that has not already been taken into account. However, in reviewing the case law I am driven to the conclusion that the “geographic factors” test is largely duplicative of other factors already taken into account.
[52] The term “natural forum” is defined in Amchem at para 58 as being the forum with “the closest connection with the action and the parties”, and at para 33 as being the forum “with which the action has the most real and substantial connection”. Cases that have applied the geographical factors test without defining its ambit have considered factors such as the location of the parties, the place in which the cause of action arose, and the place where the losses were incurred. All of these factors are, in one form or another, part of other aspects of the test to be applied. There is a good deal of overlap between many aspects of the test, which is understandable. These are not watertight compartments.
[53] Therefore, at this stage of the analysis, it is appropriate to consider all of the geographic factors that point to Zambia as being the most appropriate forum, or “natural forum” for the case to be heard. All of the considerations listed by the master under this heading are relevant to that consideration. To the extent he did not specifically mention relevant criteria under this heading, those factors had been taken into account under other headings and were part of his overall analysis. He did not ignore any relevant criteria.
[54] In his earlier application of the real and substantial connection test (at para 34), the master recognized that the action has a real and substantial connection to Zambia. In this final part of his reasoning, he considered the issue anew in terms of whether Zambia was clearly the more convenient forum. Based on the geographical factors analysis, he concluded that the geographical factors did not clearly favour either Zambia or Ontario. That was a reasonable conclusion to have reached after consideration of all of the factors and determining the weight to give to them. There is no basis for this Court to interfere with that conclusion.
[55] On the seventh and final point, the master noted that there was no issue of any juridical advantage to the plaintiff, so this factor played no part in the analysis.
[56] Having reviewed all of the relevant factors, the Master concluded (at para 38) that “the existence of a more appropriate forum for this action than Ontario has not been clearly established.” In coming to that conclusion, he correctly applied the applicable law. He took into account the relevant factors and determined what weight to give to each of those factors. He did not ignore or misapprehend the relevant evidence. His conclusion is a reasonable one based on the evidence that was before him and there is no basis for this Court to intervene on appeal.
Jurisdictional Issue
[57] Counsel for Hussain argues that there is no jurisdiction for a court in Ontario to hear a derivative action other than under the Ontario Business Corporations Act which has been held to be a complete and comprehensive code for such claims. He therefore submits that the master erred in failing to stay the action on that basis.
[58] There is no merit to that submission. Guhaab is a Zambian corporation and not subject to the Ontario Business Corporations Act. That legislation cannot be said to oust the common law jurisdiction to permit derivative actions for companies not subject to its provisions. For that to be accomplished would require very clear language specifying that the common law rules were revoked in respect of all claims. There is no such language in the legislation.
[59] In any event, this issue has already been determined and an Order was made by Master Graham on February 2, 2007 permitting Visram to pursue claims as a representative plaintiff on behalf of Guhaab. Hussain did not oppose that relief being granted, and has not appealed from that order.
Conclusion
[60] I find no basis to interfere with the decision of the master. This appeal is dismissed. The parties agreed that, whatever the result of this appeal, costs should be payable to the successful party, fixed at $14,000.00. Accordingly, costs are awarded to Visram fixed at $14,000.00, inclusive of disbursements and tax, payable in 30 days.
MOLLOY J.
Released: April 15, 2008
COURT FILE NO.: 405/07
DATE: 20080415
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
ZAHERALI VISRAM and TRI STAR IMPORT & EXPORT INC.
Plaintiffs
(Respondents)
- and -
JAGDISH CHANDARANA, aka JACK CHANDARANA, HASSAN ASKARI HUSSAIN, ZAMWEST ENTERPRISES LTD., WEST POINT TEXTILES LTD., SNEHAL CHANDARANA and GUHAAB ENTERPRISES LIMITED
Defendants
(Appellant- Hassan Askari Hussain)
REASONS FOR JUDGMENT
MOLLOY J.
Released: April 15, 2008