Dundee Precious Metals Inc. et al. v. Marsland et al.

[Indexed as: Dundee Precious Metals Inc. v. Marsland]

108 O.R. (3d) 187

2011 ONCA 594

Court of Appeal for Ontario,

Sharpe, R.P. Armstrong and Karakatsanis JJ.A.

September 15, 2011

Conflict of laws -- Forum non conveniens -- Canadian company with head office in Toronto suing former chief operating officer and executive vice-president for damages for breach of contract and breach of fiduciary duty -- Defendant an Australian national who worked for plaintiff on mining project in Serbia -- Defendant failing to demonstrate that there was another jurisdiction clearly more appropriate than Ontario in which to try action.

Conflict of laws -- Jurisdiction -- Real and substantial connection -- Canadian company with head office in Toronto suing former chief operating officer and executive vice- president for damages for breach of contract and breach of fiduciary duty -- Plaintiff alleging that its damages were suffered in Ontario -- Defendant an Australian national who worked on mining project in Serbia -- Employment contract and release which defendant signed after termination governed by Ontario law -- Defendant routinely travelling to Ontario on company business and in daily contact with plaintiff -- Claim and defendant having real and substantial connection to Ontario -- Ontario having jurisdiction. [page188]

The defendant, an Australian national, was the former chief operating officer and executive vice-president of the plaintiff, a Canadian company with its head office in Toronto; he worked for the plaintiff on a mining project in Serbia. The plaintiff sued the defendant for breach of contractual and fiduciary duties. The defendant brought a motion for an order dismissing the action on the basis that Ontario lacked jurisdiction or, alternatively, sought to stay the action on the basis of forum non conveniens. The motion was granted. The plaintiff appealed.

Held, the appeal should be allowed.

The motion judge erred in finding that the connection between the claim and Ontario was weak. The employment contract, and a management contract and release which the defendant signed following the termination of his employment, were both governed by Ontario law. The plaintiff alleged that its damages were suffered in Ontario. The motion judge also erred in finding that there was virtually no connection between the defendant and Ontario. The defendant attended board meetings in Toronto four to five times a year, participated in weekly video conference calls, usually originating in Toronto, and was in daily telephone contact with the plaintiff's president, who was based in Toronto. There was a real and substantial connection between Ontario and both the claim and the defendant. Ontario had jurisdiction to entertain the claim.

The defendant failed to demonstrate that there was another jurisdiction clearly more appropriate than Ontario to try the action. This was not a case for a stay on grounds of forum non conveniens.

APPEAL from the order of Corrick J. (2010), 2010 ONSC 80799, 104 O.R. (3d) 51, [2010] O.J. No. 5624 (S.C.J.) granting a motion to dismiss or stay an action.

Cases referred to Van Breda v. Village Resorts Ltd. (2010), 98 O.R. (3d) 721, [2010] O.J. No. 402, 2010 ONCA 84, 264 O.A.C. 1, 316 D.L.R. (4th) 201, 81 C.P.C. (6th) 219, 185 A.C.W.S. (3d) 68, 71 C.C.L.T. (3d) 161, 77 R.F.L. (6th) 1, apld Other cases referred to Incorporated Broadcasters Ltd. v. Canwest Global Communications Corp. (2003), 2003 ONCA 52135, 63 O.R. (3d) 431, [2003] O.J. No. 560, 223 D.L.R. (4th) 627, 169 O.A.C. 1, 31 B.L.R. (3d) 161, 30 C.P.C. (5th) 282, 120 A.C.W.S. (3d) 966 (C.A.) Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 17(f)(2)

H. James Marin and John Wires, for appellants. Kimberly Boara Alexander, for respondents.

[1] BY THE COURT: -- The appellant, Dundee Precious Metals Inc. ("Dundee"), a public mining company with its head office in Toronto, sued its former chief operating officer and executive vice-president, the respondent Laurence Marsland, for breach of contractual and fiduciary duties. Dundee alleges that Marsland misappropriated a confidential corporate opportunity. The contract between Dundee and Marsland expressly states that it [page189] shall be governed by Ontario law and Dundee alleges damages that were sustained in Ontario. Marsland, an Australian national, has never lived in Canada. Pursuant to his employment agreement with Dundee, Marsland moved to Bulgaria to work on a mining project in Serbia. Marsland frequently visited Ontario and was in daily contact with Dundee while employed as the chief operating officer. The conduct giving rise to Dundee's claim took place in Bulgaria and Serbia.

[2] Marsland moved to have the action dismissed for want of jurisdiction and on grounds of forum non conveniens. The motion judge found that "the connection between Dundee's claim and Ontario is weak" and that there was "virtually no contact between Marsland and Ontario". Without finding either Serbia or Bulgaria to be a clearly more appropriate forum, the motion judge nevertheless found that the action should be stayed on grounds of forum non conveniens.

[3] For the following reasons, we allow the appeal and hold that the motion judge erred in both her assessment of the connection between the claim and Ontario and in her application of the forum non conveniens test. In our view, there is a real and substantial connection sufficient to sustain Ontario jurisdiction and Ontario is the appropriate forum for this litigation.

Jurisdiction

[4] It is common ground that, pursuant to Van Breda v. Village Resorts Ltd. (2010), 2010 ONCA 84, 98 O.R. (3d) 721, [2010] O.J. No. 402 (C.A.), jurisdiction simpliciter is presumed as the claim falls within rule 17(f)(2) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] ("the contract provides that it is to be governed by or interpreted in accordance with the law of Ontario"). To be successful, Marsland therefore bears the onus of demonstrating the lack of a real and substantial connection with Ontario.

[5] Van Breda holds, at para. 84, that "[t]he core of the real and substantial connection test is the connection that the plaintiff's claim has to the forum and the connection of the defendant to the forum, respectively".

(a) Connection of the claim to Ontario

[6] We agree with the appellant that the motion judge's conclusion that the connection between Dundee's claim and Ontario was "weak" cannot withstand analysis. Dundee is a Canadian public corporation, headquartered in Ontario. Marsland, employed as Dundee's chief operating officer and executive vice-president, was subject to the laws of Ontario and he took on fiduciary duties and duties of confidentiality under [page190] the law of Ontario, which continued even after the termination of his employment. Following the termination of his employment with Dundee, he signed a management contract and release. Both agreements explicitly state that they are governed by Ontario law and both explicitly continue Marsland's duty of confidentiality owed to Dundee. Dundee alleges that Marsland's breach of fiduciary duty and breach of contract caused it damage in Ontario.

[7] In our view, when all of these factors are considered, there is a strong connection between Dundee's claim and Ontario and the motion judge erred by characterizing the connection as "weak".

(b) Connection between Marsland and Ontario

[8] The motion judge also found that there was "virtually no connection between Marsland and Ontario". We respectfully disagree with this characterization as well. In our view, there was a significant connection between Marsland and Ontario.

[9] Van Breda states, at para. 92:

As stated in Beals, at para. 32, "a defendant can reasonably be brought within the embrace of a foreign jurisdiction's law where he or she has participated in something of significance or was actively involved in that foreign jurisdiction."

[10] Marsland was a senior executive of Dundee, fully engaged in its business for a period of several years. He attended Dundee board meetings in Toronto four to five times per year and attended senior management meetings in Toronto at least once per year. He also participated in weekly video conference calls, usually originating in Toronto, and was in daily telephone contact with Dundee's president, who was based in Toronto. We cannot agree that there was "virtually no connection between Marsland and Ontario" given his position with Dundee, the duties he owed Dundee and the regular and ongoing participation in Ontario-based activities in the performance of his duties.

[11] The motion judge's assessment and application of real and substantial connection test in this case would lead to the surprising proposition that a Canadian corporation headquartered in Ontario cannot use Ontario courts to enforce legal obligations owed to it under Ontario law by current and former senior officers who routinely travelled to Ontario on company business and who were in daily contact with the company in Ontario.

[12] We conclude that the courts of Ontario have jurisdiction to entertain Dundee's claim. [page191]

Forum Non Conveniens

[13] As this court stated in Incorporated Broadcasters Ltd. v. Canwest Global Communications Corp. (2003), 2003 ONCA 52135, 63 O.R. (3d) 431, [2003] O.J. No. 560 (C.A.), at para. 58:

The starting place for considering convenient forum is "whether there clearly is a more appropriate jurisdiction than the domestic forum chosen by the plaintiff in which the case should be tried" (Frymer at p. 79 [O.R.]). Also see Spar Aerospace Ltd. v. American Mobile Satellite Corp., 2002 SCC 78 at para. 69 and 70 and Amchem Products Inc. v. British Columbia (Workers' Compensation Board), 1993 SCC 124, [1993] 1 S.C.R. 897 at p. 921 [S.C.R.]

[14] While we recognize that forum non conveniens is a discretionary decision attracting appellate deference, we respectfully conclude that the motion judge erred by failing to assess whether Marsland satisfied the onus of identifying another jurisdiction clearly more appropriate than Ontario in which to try this action. The motion judge mentioned Serbia and Bulgaria as possible alternate jurisdictions but did not identify either as being clearly more appropriate than Ontario. Her finding, at para. 42, that there are "no geographic factors, apart from the location of Dundee's head office, pointing to Ontario as the most convenient forum" and that "[m] ost geographic factors point to a forum other than Ontario" is difficult to understand given the fact that the case involves duties owed under Ontario law to a Canadian company.

[15] In our view, Marsland failed to demonstrate that there was another jurisdiction clearly more appropriate than Ontario to try this action and it follows that this was not a case for a stay on grounds of forum non conveniens.

Conclusion

[16] For these reasons, the appeal is allowed and the motion to dismiss the action for want of jurisdiction or to stay the action on grounds of forum non conveniens is dismissed. In accordance with the agreement of counsel, Dundee is entitled to its costs of the motion, fixed at $25,000, and of the appeal, fixed at $17,000, both amounts inclusive of disbursements and applicable taxes.

Appeal allowed.