Court File and Parties
CITATION: Integrity Worldwide Inc. v. Knapp, 2017 ONSC 3423
DIVISIONAL COURT FILE NO.: 69/17
DATE: 20170606
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: integrity worldwide inc., Plaintiff/Respondent
- AND -
Catherine Knapp and GLOBAL SAFETY & EQUIPMENT INC., Defendant/Appellant
BEFORE: Swinton J.
COUNSEL: Catherine Allen, for the Plaintiff/Respondent
Philip Cho, for the Defendant Global Safety/Appellant
HEARD at Toronto: June 1, 2017
ENDORSEMENT
Swinton J.:
[1] The appellant Global Safety and Equipment Inc. (“Global”) appeals from the order of Master Brott dated January 16, 2017 dismissing its motion for an order to strike the service of a Statement of Claim outside Ontario or an order to stay or dismiss the action against it. For the reasons that follow, I would dismiss the appeal.
[2] In this action, the respondent Integrity Worldwide Inc. (“IWW”), an Ontario corporation, sues Catherine Knapp, a former employee, and Global, a corporation situated in the state of Washington. The allegations against Ms. Knapp include breach of contract, breach of fiduciary duty and conspiracy. The allegations against Global are tortious in nature: inducing breach of contract, unlawful interference with contractual relations, unlawful use of confidential information and conspiracy to injure.
[3] The Master held that Global was properly served outside Ontario pursuant to rule 17.02(f), (g) and (i) of the Rules of Civil Procedure. She also held that the Ontario Superior Court has jurisdiction over the tort claims made against Global, and that Ontario is the most convenient forum.
[4] In the argument of this appeal, Global did not challenge the Master’s finding respecting Ontario as the convenient forum. In argument, counsel focused on the issue of whether the Ontario court has jurisdiction simpliciter to determine the tort claims against Global.
[5] Both parties agree that the standard of review in this appeal is palpable and overriding error, as there is no allegation that the Master erred in law.
[6] With respect to the issue of jurisdiction, the Master set out the proper test, asking whether there is a real and substantial connection between Ontario and the tort claims alleged. She found that two of the presumptive connecting factors that justify an Ontario court assuming jurisdiction over a foreign defendant were satisfied: the torts were committed in Ontario, and a contract connected with the dispute was made in Ontario (see Club Resorts Ltd. v. Van Breda, 2012 SCC 17 at para. 90).
[7] Global argues that the Master erred because IWW has not shown a good arguable case to support the conclusion that there is jurisdiction in the Ontario court. Global asserts that any actions it took were in the United States, and any harm to IWW was suffered outside Ontario through the possible loss of US customers. As well, the allegations of IWW are said to be lacking in particularity.
[8] I see no error in the Master’s conclusion with respect to jurisdiction. Her task was to determine whether there is a good arguable case for the Ontario court assuming jurisdiction. This is a low evidentiary threshold (see Shah v. LG Chem, Ltd., 2015 ONSC 2628 at paras. 11, 95, and 97). A plaintiff may demonstrate that it has a good arguable case by relying on the allegations in the Statement of Claim, where the defendant does not adduce evidence to challenge those allegations, or it can rely on a combination of the allegations and evidence if the defendant challenges the allegations (Ontario v. Rothmans Inc., 2013 ONCA 353 at paras. 54 and 101).
[9] The third presumptive connecting factor from Van Breda requires a determination whether the alleged torts occurred in Ontario. On this issue, the Master’s reasons are brief and do not precisely differentiate her analysis with respect to the tort of conspiracy and the tort of inducing breach of contract. She found that IWW met its onus of showing that the torts were committed in Ontario, given the evidence that Global received allegedly confidential information that was created in Ontario and delivered from Ms. Knapp’s personal email in Ontario. The Master also found that IWW would suffer damage in Ontario.
[10] I see no error in the Master’s conclusion respecting the third presumptive connecting factor. IWW set out a number of allegations in the Statement of Claim (summarized in paragraph 44 of its factum) and in its affidavit evidence (summarized in paragraph 45) that support the conclusion that the third presumptive connecting factor from Van Breda has been met. The affidavit evidence filed by Global did not contradict the allegations in the Statement of Claim relied upon by the Master nor the key facts relied upon in IWW’s affidavit evidence.
[11] The facts are that IWW and Ms. Knapp were situated in Ontario at the relevant time. Ms. Knapp’s employment contract was entered into in Ontario, and she was based in IWW’s Ontario office, although she did travel to the US as part of her duties. Ms. Knapp took IWW’s confidential information and sent it by email to Global from Ontario. The tone of the email suggests that this was not their first communication. IWW has alleged that Global knew or ought to have known of her contract and her obligations of confidentiality, and it induced her to breach her contract. Thus, acts required to commit the tort occurred in Ontario.
[12] As well, IWW suffered harm in Ontario, as alleged and as explained in Mr. Melic’s affidavit. Notably, the affidavit states that IWW’s negotiations and discussions with prospective American customers primarily originate from its Ontario office, and many contracts with its American customers are entered into in Canada. The allegations and IWW’s evidence are not contradicted by the affidavit filed by Global, which essentially says that any conduct occurred outside Ontario, and any loss of business in the United States will be suffered outside Ontario.
[13] This is not a case like Lazer-Tech Ltd. v. Dejeray, 2010 ONSC 1662, where the tortious conduct occurred in British Columbia, not Ontario (see para. 31). In the present case, with respect to the tort of inducing breach of contract, it is clear that a number of elements of the tort, as alleged, occurred in Ontario.
[14] With respect to the tort of conspiracy, the Court of Appeal stated in Rothmans, supra, that a conspiracy occurs in the jurisdiction where the harm is suffered (at para. 37). Here, the allegations respecting conspiracy allege conduct in furtherance of the conspiracy in Ontario, as well as outside Ontario. IWW’s evidence establishes that the resulting harm will be suffered in Ontario. Therefore, IWW has shown that there is a good arguable case that the alleged tort of conspiracy occurred in Ontario.
[15] In summary, I see no error in the Master’s conclusion that the third presumptive connecting factor was established. Based on the pleading and the evidence filed, the torts alleged against Global were committed in Ontario.
[16] Nor did the Master err in finding that the fourth presumptive connecting factor was established. The fourth factor requires a plaintiff to show that there is a contract connected with the dispute made in Ontario. In the present case, IWW alleges that Global induced the breach of Ms. Knapp’s employment contract, which was made in Ontario, and engaged in acts in furtherance of the conspiracy that included breach of that contract and soliciting another employee to breach his non-solicitation agreement, a contract also made in Ontario. Thus, the Master correctly held that the fourth presumptive connecting factor was also met, as the Knapp contract is sufficiently connected to the dispute between IWW and Global to justify the Ontario court assuming jurisdiction.
[17] Accordingly, the Master did not err in concluding that the Ontario court has jurisdiction over the tort claims against Global. Given my conclusion with respect to the third presumptive connecting factor, it follows that the Master did not err in concluding that the Statement of Claim was properly served outside Ontario pursuant to rule 17.02(g), because it contains claims in respect of torts committed in Ontario.
[18] Global did not pursue its argument that the Master erred in finding that Ontario was the convenient forum. However, it argued that the Master made certain factual errors that cumulatively constituted palpable and overriding errors. I would not give effect to this argument. Even if it is right that there were some errors, none of them affects the soundness of the Master’s conclusions on the issues of service outside Ontario and the jurisdiction of the Ontario court.
[19] For these reasons, the appeal is dismissed.
[20] IWW is entitled to costs, having succeeded on the appeal. While the parties have provided costs outlines, they wish to make further submissions on the effect of offers each made. Accordingly, the parties shall make brief written submissions on the quantum of costs through the Divisional Court office, IWW within 10 days of receiving this decision and Global within 10 days thereafter.
Swinton J.
Date: June 6, 2017