COURT OF APPEAL FOR ONTARIO

DATE: 2005-10-11 DOCKET: C43361

BEFORE: WEILER, MOLDAVER and SHARPE JJ.A.

BETWEEN:

Susan Doiron, Alicia Rose Doiron and Meghan Rose Doiron, by their Litigation Guardian Susan Doiron Plaintiffs (Respondents)

• and -

Dawn Bugge, Juliet K. Dingeler, Wheels Inc. and Federation Insurance of Canada Defendants (Appellants)

COUNSEL: Gordon Good and Allan Rouben for the respondents John D. Strung, for the appellant Dawn Bugge

HEARD: September 29, 2005

On appeal from the order of Justice John C. Kennedy of the Superior Court of Justice dated March 30, 2005.

SHARPE J.A.:

[1] This appeal concerns the jurisdiction of the Ontario courts to entertain the suit of an Ontario plaintiff against a New York resident for personal injury damages arising from a motor vehicle accident that occurred in the state of New York.

FACTS

[2] The plaintiff ("respondent" before this court) is a childcare worker employed by the YMCA in St. Thomas, Ontario. She accepted an invitation by the New York YMCA and volunteered to assist with relief work following the September 11, 2001 attack on the World Trade Center.

[3] The defendant Dawn Bugge ("appellant" before this court) is an employee of the New York YMCA, and was the respondent's supervisor in New York. In her capacity as the respondent's supervisor, the appellant collected the respondent at the airport upon her arrival and drove her from place to place in New York.

[4] Three days after her arrival in New York, the appellant was driving the respondent to a place where the respondent would assume her duties as a YMCA volunteer. The respondent was injured as a result of an accident allegedly caused by the appellant entering an intersection against a red light. The respondent was taken from the accident to a hospital in New York City and returned to her home in St. Thomas shortly thereafter. She has undergone extensive medical treatment in Ontario and has yet to return to work, allegedly as a result of the injuries she suffered.

[5] The respondent commenced this action against the appellant in October 2003. The respondent also named the driver and owner of the other motor vehicle involved in the collision as defendants, but later discontinued her action against those defendants, leaving the appellant as the only tort defendant. The appellant's insurance policy provides coverage for the respondent's claim, but has a limit of $US 100,000 inclusive of costs. The respondent alleges that her damages will exceed those policy limits and she has added her own insurer, Federation Insurance of Canada, as a defendant pursuant to the underinsured family protection coverage provisions of her automobile insurance policy. It is common ground that any claim against the respondent's own insurer under the underinsured family protection endorsement must be brought in Ontario: see R.R.O. 1990, Reg. 676, s. 4(1)(c).

[6] The appellant moved to stay the action against her on the ground that the Ontario courts have no jurisdiction and that Ontario was not the forum conveniens. The motion judge dismissed the motion, holding that Ontario did have jurisdiction and that Ontario was the convenient forum.

ISSUES

[7] The appellant submits that the motion judge erred by applying the wrong test to the issue of jurisdiction simpliciter and that if the proper test is applied, the result will be that Ontario should not assume jurisdiction in this case.

ANALYSIS

[8] I agree with the appellant that the motion judge confused the criteria for the real and substantial connection test and wrongly applied the forum conveniens test to determine the issue of jurisdiction. I also agree that as the motion judge failed to consider the issue of jurisdiction simpliciter in accordance with the factors set out in Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (C.A.), this is an appropriate case for us to consider the matter de novo. However, for the following reasons, I conclude that the test for jurisdiction simpliciter is met on the particular facts of this case. I agree with the motion judge that Ontario is the forum conveniens, and accordingly, I would dismiss the appeal.

[9] Muscutt sets out eight factors to be applied in order to determine whether an Ontario court should assume jurisdiction against an out-of-province defendant for a claim for damage sustained in Ontario as a result of a tort committed elsewhere. The appellant relies on Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68 (C.A.), which was decided together with Muscutt. The eight factors were applied in that case to hold that the Ontario court should not assume jurisdiction against a New York resident at the suit of an Ontario plaintiff for personal injury damages resulting from a motor vehicle accident that occurred in New York. However, as noted in Muscutt at para. 43"[t]he real and substantial connection test involves a fact-specific inquiry" and for the following reasons, I conclude that Gajraj is distinguishable from the case at bar. In my view, the application of the eight Muscutt factors indicates that in the present case, there is a real and substantial connection sufficient to support the assumption of jurisdiction against the appellant.

(1) The connection between the forum and the plaintiff's claim

[10] The respondent is a resident of Ontario and she deposes that she has undergone extensive treatment for her injuries in Ontario. She attaches to her affidavit a long list of medical treatment particulars from hospitals, physicians, physiotherapists, a physiatrist, and a psychologist. She alleges that she still suffers from the injuries she sustained in the accident and that she has been unable to return to work. These damages represent a significant connection with Ontario. However, as noted in Muscutt, Gajraj and the three other cases decided at the same time, Lemmex v. Bernard (2002), 60 O.R. (3d) 54 (C.A.), Leufkens v. Alba Tours International Inc. (2002), 60 O.R. (3d) 84 (C.A.), and Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 60 O.R. (3d) 76 (C.A.), proof of damages sustained in Ontario alone is not sufficient to establish a real and substantial connection and is only one of the factors to be considered.

(2) The connection between the forum and the defendant

[11] Apart from the allegations in this action, the appellant has no connection with Ontario. As I have noted, the respondent had accepted the invitation of the New York YMCA to volunteer in the post-September 11 relief effort and the appellant was the respondent's supervisor who had assumed responsibility for transporting her while the respondent was in New York. The fact that the respondent and the appellant had a relationship that existed prior to and independent of the accident distinguishes this case from Gajraj where the parties were strangers prior to the accident. In my view, the prior connection between the parties in the present case is also a stronger connection than that found in Sinclair, Leufkens and Lemmex, where the defendants knew that foreigners, including Canadians and Ontario residents, were likely to be among their customers.

[12] I would not characterize the prior and independent relationship as sufficient to amount to subjection or submission to Ontario jurisdiction. However, I agree with the respondent that it does tend to neutralize what otherwise would be a factor favouring the appellant, and it makes the case for assuming jurisdiction stronger here than it was in Gajraj.

(3) Unfairness to the defendant (appellant) in assuming jurisdiction

[13] As in Gajraj, the reasonable expectation of the parties would be that claims for damages arising from this motor vehicle accident would be litigated in New York, the place where the alleged tort was committed. However, unlike Gajraj, we have evidence that the appellant has insurance that will respond to the respondent's claim in Ontario. This mitigates any element of unfairness to the appellant in being forced to defend this action in Ontario and again tends to neutralize a factor that would otherwise favour the appellant. The appellant did not present evidence or raise any other issues of unfairness.

(4) Unfairness to the plaintiff (respondent) in not assuming jurisdiction

[14] In my view, the evidence in this case establishes that the respondent would face considerable unfairness if she were required to litigate her claim in New York. The respondent deposes that she will face considerable hardship if forced to litigate her claim in New York. Her injuries make travelling "very difficult" and she deposes that she has no assets to travel to New York, to prosecute an action in New York, or to meet the expense of having her treating physicians go to New York to testify. As in Muscutt at para. 90"unlike the defendant, the plaintiff does not have the benefit of an insurer to cover the cost of litigation". Gajraj is distinguishable as the evidence that the plaintiff in that case would suffer inconvenience was considerably weaker than the evidence of serious prejudice in the case at bar. This factor favours the assumption of jurisdiction.

(5) The involvement of other parties to the suit

[15] The involvement of other parties bears upon the real and substantial connection test: McNichol Estate v. Woldnik (2001), 13 C.P.C. (5th) 61 (Ont. C.A.); Muscutt at para. 91. As I have already noted, the respondent has joined her own insurer as a defendant pursuant to the underinsured family protection coverage provisions of her automobile insurance policy. That claim must be brought in Ontario, giving rise to a risk of multiplicity of proceedings and inconsistent results if the respondent is forced to litigate her tort claim in New York. This case is unlike Lemmex and Leufkens where all the defendants were amenable to the jurisdiction of the foreign court.

[16] Again, the facts of this case are distinguishable from Gajraj where the claim against the Ontario insurer under the underinsured endorsement was described at para. 20 as "entirely speculative in nature". Here, the respondent has led evidence that she suffered significant injuries by providing some detail as to the treatment she has received and by asserting that her injuries have been so serious as to render her still unfit to return to work. Moreover, in this case, unlike Gajraj, there is evidence that the appellant's policy limit is $US 100,000 inclusive of costs. I agree with the appellant that it would be impossible to say with certainty at this stage of the proceedings that the respondent's damages will exceed the appellant's policy limit. However, it cannot be said that the claim against the Ontario insurer is speculative in nature. Indeed, the motion judge made a finding of fact that the limits of the defendant's policy are likely to be reached and that, if the action were not tried in Ontario, she would be required to litigate the issue of underinsured coverage again in Ontario. It was open to the motion judge to make that finding.

[17] I agree with the appellant that the core of this action is the tort claim against her. However, given the nature and extent of the injuries alleged by the respondent and the appellant's policy limit, the joinder of the Ontario insurer under the underinsured endorsement is a factor that favours the assumption of jurisdiction by the Ontario courts.

(6) The court's willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis

[18] As noted in Muscutt at para. 93, an Ontario court should not assume jurisdiction over a foreign defendant unless it would be prepared to recognize a foreign judgment against an Ontario resident rendered on the same jurisdictional basis. I do not agree with the appellant's submission that the facts of this case bring it within the same category as Sinclair, Leufkens and Lemmex where assuming jurisdiction would have imposed an unreasonable burden on providers of tourism services in Ontario by requiring them to defend themselves against suits brought by clients anywhere in the world. This case involves a motor vehicle accident in a neighbouring jurisdiction involving an insured party who had a prior, pre-existing relationship with a plaintiff who has asserted a genuine claim against an Ontario insurer that can only be brought in Ontario. There is no unfairness to the defendant in assuming jurisdiction and there would be considerable unfairness to the plaintiff if jurisdiction were refused. In my view, the Ontario courts would be prepared to recognize a foreign judgment against an Ontario defendant rendered on the same jurisdictional basis. This factor favours the assumption of jurisdiction.

(7) Whether the case is interprovincial or international in nature

[19] As this is an international case, this factor favours the appellant.

(8) Comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere

[20] As noted in Muscutt at para. 105, the minimum contacts doctrine of American law appears to require an act or conduct on the part of the defendant that amounts to personal subjection to the jurisdiction and, standing by itself, damage sustained in the jurisdiction will not satisfy the minimum contacts test. In Gajraj, I concluded that the minimum contact test would probably not be met. It may well be that the test would not be met on the facts of this case, although in the absence of evidence as to New York law on this point, I am unable to say that for certain. I would observe, however, that in view of the appellant's insurance arrangements, attornment to Ontario jurisdiction is likely to follow rendering the issue of enforceability moot. In these circumstances, I would view this factor as neutral.

CONCLUSION

[21] A fair weighing of the eight Muscutt factors favours the assumption of jurisdiction in the present case. Gajraj is distinguishable on several grounds. Accordingly, although the motion judge failed to apply the correct test, considering the matter de novo on appeal, I conclude that he nonetheless arrived at the correct result and I would, therefore, dismiss the appeal.

[22] The appellant does not take issue with the motion judge's determination that if the real and substantial connection test is met, the forum conveniens test also favours Ontario assuming jurisdiction in the present case.

[23] Accordingly, for these reasons, I would dismiss the appeal with costs to the respondent in the agreed amount of $16,000 plus GST.

"Robert J. Sharpe J.A."

"I agree K.M. Weiler J.A."

"I agree M.J. Moldaver J.A."

RELEASED: October 11, 2005