COURT OF APPEAL FOR ONTARIO

DATE: 20001102

DOCKET: C33719

RE: LAN ASSOCIATES XVIII L.P., ANTONIO REALE, NELLA
REALE, JOSEPH REALE, SALVINA REALE and
SERAFINA CAPOBIANCO (Plaintiffs/Appellants)
v. BANK OF NOVA SCOTIA (Defendant/Respondent)

BEFORE: FINLAYSON, LABROSSE and WEILER JJ.A.

COUNSEL: Howard J. Wolch,
for the appellants
William G. Horton and
Robert G. Maisey,
for the respondent

HEARD: October 30, 2000

On appeal from the order of Justice Donald R. Cameron dated January 24, 2000

E N D O R S E M E N T

[1] The appellants appeal the order of Cameron J. (“the motions judge”) staying their action on the basis that Ontario is forum non conveniens.

[2] The action arises out of loans totalling over $25 million made by the Bank of Nova Scotia (“BNS”) to companies (“the Borrowers”) beneficially owned by the appellants. The purpose of the loans was to finance the development, building and operation of a hotel, casino and beach club in Turks and Caicos Islands (“TCI”). In the action, the appellants claim various damages for breach of fiduciary duty, breach of duty to disclose, breach of good faith and misrepresentation.

[3] The motions judge found that, as the action alleged tortious conduct of officers of BNS in Toronto, the action had a substantial connection to Ontario. However, on the basis of all the circumstances relevant to the issue of forum non conveniens, he concluded that the action had a more real and substantial connection to TCI and that TCI is a more natural, convenient and appropriate jurisdiction to try this action. The circumstances included the following evidence:

♦ The appellants reside in the State of Connecticut and neither the appellants nor the Borrowers (except as stated above) have any other real or substantial connection with Ontario.

♦ The loan agreements (including the Standstill Agreement) and security documents were negotiated (at least in part) and executed in TCI and provide that the TCI law is the proper law of the contract.

♦ The loans were administered by the BNS office in TCI.

♦ Proceedings have been commenced by both BNS and the Borrowers in TCI and the parties attorned to the TCI court.

♦ If the action were tried in Ontario, it could lead to inconsistent findings.

[4] The motions judge also considered the residence of probable witnesses (a considerable number of witnesses reside in TCI or other Caribbean islands) as well as the civil law of TCI which, according to the motions judge, is based on English common law and English procedure with some insignificant variations.

[5] The motions judge considered the appearance of forum shopping as the appellants commenced a similar action in 1997 in the State of New York which was dismissed on the basis of forum non conveniens.

[6] In our view, the motions judge considered all the relevant factors and applied the correct legal principles. The evidence overwhelmingly supports his decision that TCI is the appropriate jurisdiction to try this action and there is no basis for interference.

[7] In light of our conclusion, it is not necessary to deal with the argument raised with respect to res judicata.

[8] The appeal is dismissed with costs.

(signed) “G. D. Finlayson J.A.”

(signed) “J. M. Labrosse J.A.”

(signed) “K. M. Weiler J.A.”