Chatterson et al. v. M&M Meat Shops Ltd., 2014 ONSC 1897

CITATION: Chatterson et al. v. M&M Meat Shops Ltd., 2014 ONSC 1897

COURT FILE NO.: DC-13-473-ML

DATE: 20140326

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: RANDALL CHATTERSON, BRENDA CHATTERSON a.k.a. BRENDA HACKER, and 1291008 ONTARIO LTD., Plaintiffs/Respondents

AND:

M&M MEAT SHOPS LTD., Defendant/Appellant

BEFORE: MARROCCO A.C.J.S.C., WHITAKER AND ELLIES JJ.

COUNSEL: Evan Thomas, for the Defendant/Appellant George Limberis, for the Plaintiffs/Respondents

HEARD: AT HAMILTON: February 28, 2014

Appeal ENDORSEMENT Change of VenuE Motion

MARROCCO A.C.J.S.C.

[1] Despite being satisfied that there was no good reason to doubt the correctness of the decision of the motion judge refusing the defendant’s change of venue request, the defendant was given leave to appeal to the Divisional Court because there are two somewhat different decisions of the Superior Court concerning the proper test on change of venue motions: Siemens Canada Ltd. v. Ottawa (City) (2008), 93 O.R. (3d) 220 (Ont. S.C.), and Hallman Estate v. Cameron (2009), 80 C.P.C. (6th) 139 (Ont. S.C.).

[2] The plaintiffs’ action was commenced in Hamilton. It is a dispute between M&M Meat Shops Ltd., a franchisor of frozen food retail stores in Ontario, and a Toronto franchisee.

[3] The franchisee plaintiffs claim that M&M Meat Shops Ltd. breached its duty of fair dealing and good faith. Specifically, they allege negligent or intentional misrepresentations prior to and during the franchise relationship and price-fixing. They claim damages in excess of $2 million. The claim is at the discovery stage.

[4] The plaintiffs, Randall Chatterson and Brenda Chatterson, reside in Toronto. They are the sole shareholders of the plaintiff 1291008 Ontario Ltd. Their M&M Meat Shops frozen food retail store franchise is in Toronto.

[5] The plaintiffs intend to call at least nine witnesses who live in the greater Toronto area.

[6] Counsel for the plaintiffs resides in Hamilton.

[7] The defendant, M&M Meat Shops Ltd., has its head office in Kitchener, Ontario.

[8] Counsel for M&M Meat Shops Ltd. resides in Toronto.

[9] The claim makes specific allegations against 14 current and former M&M Meat Shops Ltd. employees, virtually all of whom live in the Kitchener-Waterloo area.

[10] Hamilton is approximately halfway between Kitchener and Toronto.

[11] M&M Meat Shops Ltd. unsuccessfully moved to change the venue from Hamilton to Kitchener. Hamilton and Kitchener are both located in the Judicial Region of Central South. This was not a motion to change the venue from one Judicial Region to another.

[12] M&M Meat Shops Ltd. argued before us that the motion judge erred in his identification of the correct legal test by rejecting the suggestion that the venue selected by the plaintiff had to have a rational connection to the cause of action or the parties. The appellant argues that this factor has to be considered, citing the Siemens case as authority. Alternatively, the appellant submits that, even if the motion judge identified the correct test, he failed to give proper weight to the factors in subrule 13.1.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[13] We do not agree.

[14] The motion judge recognized that there was no statute or rule requiring the trial of this claim in a particular county. Therefore, subrule 13.1.01(1) applied and the plaintiff was entitled to commence this proceeding at any court office in the Province of Ontario. Finally, the motion judge recognized that subrule 13.1.02(2) applied to the defendant’s request to transfer this claim to Kitchener.

[15] As required, the motion judge applied the factors listed in subrule 13.1.02(2)(b) to the defendant’s request:

(2) If subrule (1) does not apply, the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,

(b) that a transfer is desirable in the interest of justice, having regard to,

(i) where a substantial part of the events or omissions that gave rise to the claim occurred,

(ii) where a substantial part of the damages were sustained,

(iii) where the subject-matter of the proceeding is or was located,

(iv) any local community’s interest in the subject-matter of the proceeding,

(v) the convenience of the parties, the witnesses and the court,

(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,

(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,

(viii) whether judges and court facilities are available at the other county, and

(ix) any other relevant matter.

[16] Specifically, the motion judge observed that factors (i)-(iv) focused on the connection of the facts and issues to the locality of the court. His Honour acknowledged that some of the events took place in Kitchener, where the defendant M&M Meat Shops Ltd. has its head office, and that the events giving rise to the claim had no connection to Hamilton. The motion judge concluded, however, that the connection to Kitchener was tenuous because the alleged damages were sustained in Toronto, where the franchisee was located.

[17] The motion judge considered the convenience of the parties, the witnesses and the court, which is factor (v). The motion judge was of the view that Hamilton was approximately halfway between Toronto and Kitchener and that this had the effect of balancing the convenience of the parties and the witnesses or, perhaps more precisely, balancing the inconvenience to them.

[18] The motion judge was of the view that factors (vi) and (vii) were not relevant. We agree.

[19] Factor (viii) relates to the availability of judges and court facilities. As indicated earlier, Hamilton and Kitchener are located in the same Judicial Region. As a result this factor has little if any importance on this motion. Had the defendant wanted to transfer this claim to another Judicial Region then this factor would have been extremely important and the defendant would have been required to put forward evidence concerning the anticipated timing of the trial in the Region receiving the claim. Judicial resources are scarce. When a matter is transferred to a different Region, it will not be tried until it has been pre-tried in that Region. When a matter is transferred to a different Judicial Region, it will rank behind outstanding matters there. Some evidence from the receiving Judicial Region will be required concerning the availability of judicial resources for the incoming claim. Absent this evidence it will be virtually impossible for the motion judge to determine that the transfer is “desirable in the interests of justice” as required by subrule 13.1.02(6).

[20] The motion judge then “holistically” considered all of the factors and concluded that the defendant had not demonstrated that a change of venue was desirable in the interests of justice. We can find no support in the reasons of the motion judge for the appellant’s submission that he failed to give proper weight to the factors set out in subrule 13.1.02(2). The appellant’s submission asks us to substitute our assessment of the factors for the motion judge’s assessment, which we decline to do.

[21] The appellant also submitted that the motion judge rejected the suggestion that the venue selected by the plaintiff had to have a rational connection to the cause of action or the parties and that in doing so the motion judge made an error in law by applying the Hallman decision and failing to apply the Siemens decision.

[22] It is our view that decisions on motions to change venue will be better understood if they are seen to result from the holistic application of the factors in subrule 13.1.02(2). This is precisely what occurred in this case. We also point out that, when placed in their factual contexts, the Hallman and Siemens decisions are not significantly different.

[23] In the Siemens case, the plaintiff brought an action in the Region of Peel claiming $217 million in damages. The plaintiff’s claim alleged that the City Council of Ottawa intentionally and in bad faith breached its obligations under an agreement to build a light rail mass transit system. The claim alleged wrongdoing by the Ottawa City Council, the Mayor of Ottawa and a federal cabinet minister. The case was a matter of public interest in Ottawa.

[24] The plaintiff’s offices were in the Region of Peel. The damages alleged were suffered in the Region of Peel. The plaintiff worked on the aborted project in Peel Region and elsewhere.

[25] The City of Ottawa brought a motion to move the case to Ottawa.

[26] In the Siemens case, the matter described in the plaintiff’s claim had a rational connection to both the plaintiff’s and defendant’s choice of venue. At the risk of stating the obvious, the defendant in the Siemens case had made a motion for a change from one rational or reasonable venue to another.

[27] This abbreviated set of facts helps put in perspective comments made at paragraph 24 of the Siemens decision:

In the first instance, the court must be satisfied that the place of trial selected by the plaintiff is a reasonable place for trial. If it is not, then a change is in order, to the place suggested by the defendant, or to some other place if the defendant’s suggestion is not a reasonable place for the trial. If the plaintiff’s choice is reasonable, then some element of comparison is required to assess the relative merits of the place suggested by the plaintiff and the place suggested by the defendant.… If there is something to be said for both of the suggestions, then the plaintiff’s suggestion should prevail. However, if the defendant’s suggestion is significantly better than the plaintiff’s, then the change should be made.

[28] As can be seen from this paragraph, the Siemens decision establishes that if the plaintiff’s place of trial is not reasonable and the defendant has moved for a change of venue to a reasonable location, then a change of venue will likely be in order. This is a matter of common sense.

[29] The same paragraph establishes that if the plaintiff’s choice of venue is reasonable and the defendant moves for a change of venue, then a comparison of the two venues is required. The court also stated that in this situation the defendant’s choice has to be significantly better in order to prevail. This is because the Rules permit the plaintiff to choose the venue at the commencement of the claim.

[30] The Siemens case does not address the situation where the venue chosen by the plaintiff is not reasonable and the defendant declines to bring a motion to change the venue. In such a situation it is quite likely that the plaintiff’s choice of venue will be respected. This is not absolutely true because the court has control over its own processes and can always on its own motion insist that the venue of the trial be addressed by the parties.

[31] The Siemens decision does not mandate that in all cases the plaintiff’s choice of venue must be reasonable or otherwise be rationally connected to the plaintiff’s claim.

[32] In the Hallman case, the testator died in 2003 leaving a significant and complex estate. The testator established a spousal trust. In 2007 the testator’s wife commenced an application in Toronto seeking a variety of relief including an accounting by the trustees of the spousal trust and the removal of those trustees. All parties lived and worked in the Kitchener-Waterloo area and all the events described in the application occurred there too.

[33] The subject matter of the application was rationally connected to the Kitchener-Waterloo area but not to Toronto. However, this was not determinative when two of the respondents moved to change the venue to Kitchener.

[34] It is in this abbreviated factual context that the motion judge in the Hallman case made the following observation at paragraph 28:

The rule does not state that the initiating party must justify the choice as a reasonable one. If one of the parties opposite thinks the choice an unreasonable one for whatever reason, it may bring a motion to change the venue. On that motion the court should engage in a “holistic exercise”… considering the enumerated factors, including “any other relevant matter”, in order to determine whether the moving party has demonstrated that “a transfer is desirable in the interest of justice”.

[35] Whether the plaintiff’s choice of venue is reasonable or not, if the defendant brings a motion to change venue the court is required by subrule 13.1.02(2) to engage in the “holistic exercise” described in the Hallman case in order to decide if a change of venue is appropriate.

[36] In the Hallman case, the court applied the factors listed in Rule 13.1.02(2)(b). After applying those factors the court declared that it was influenced by the fact that the application had not been converted to the trial of an issue; the record was a written one consisting only of affidavits; several motions had already been brought in Toronto prior to the change of venue motion and; four of the six sets of lawyers including counsel for the Public Guardian and Trustee were based in Toronto. The court determined that the plaintiff’s choice of venue was reasonable and dismissed the defendant’s motion to change it.

[37] Before leaving this matter we wish to make the following observation: whether the plaintiff’s choice of venue is reasonable or not, the court retains discretion in the matter and as a result can refuse seemingly well-founded venue motions which, if allowed, would result in unfairness.

[38] As indicated earlier, we are satisfied that the motion judge correctly applied the correct test required by Rule 13.1.02 and that, as a result, there is no proper basis upon which we can or would interfere with that decision.

[39] Accordingly this appeal is dismissed with costs in the amount of $8,000 inclusive of disbursements and HST.

Marrocco A.C.J.S.C.

Whitaker J.

Ellies J.

Date: 20140327