COURT OF APPEAL FOR ONTARIO

CITATION: Export Packers Company Limited v. SPI International Transportation, 2012 ONCA 481

DATE: 20120709

DOCKET: C54536

O’Connor A.C.J.O., MacPherson and Rouleau JJ.A.

BETWEEN

Export Packers Company Limited

Plaintiff

and

SPI International Transportation

Defendant (Appellant)

and

726509 Ontario Inc. o/a Transvision Logistics and Entrepôt du Nord Cold Storage Inc.

Third Parties (Entrepôt du Nord Cold Storage Inc. as Respondent)

Kimberly Newton, for the appellant

Shawn Faguy, for the respondent, Entrepôt du Nord Cold Storage Inc.

Heard: July 3, 2012

On appeal from the judgment of Justice Stinson of the Superior Court of Justice, dated October 5, 2011.

ENDORSEMENT

[1] SPI International Transportation (“SPI”) appeals the decision of Stinson J., dismissing the third party claim against Entrepôt du Nord Cold Storage Inc. (“EDN”) on the basis that Ontario lacked jurisdiction over the claim.

[2] The plaintiff in the underlying action, Export Packers Company Limited (“Export”), is an Ontario company that sells food products. Export had purchased a shipment of 1,320 cartons of frozen pork spareribs (the “cargo”) from a Quebec company, A. Trahan Transformation (“Trahan”). At the time Trahan was storing the cargo at EDN’s cold storage facility in Laval, Quebec. EDN continued to store the cargo after Trahan sold it to Export.

[3] Export sold the cargo to a customer in Florida and arranged for its transportation.

[4] SPI is a shipping agent and load broker with a head office in British Columbia and two offices in Ontario. Export contracted with SPI to arrange transportation of the cargo from the EDN warehouse to the Florida customer.

[5] SPI contracted with the third party, 726509 Ontario Inc. o/a Transvision Logistics (“Transvision”), to transport the cargo to Florida. According to the pleadings, a rogue party purporting to represent Transvision picked up the cargo at EDN’s warehouse and absconded.

[6] Export sued SPI for breach of contract and negligence. SPI defended and commenced third party claims against Transvision and EDN. SPI alleges that EDN was negligent in failing to ask for sufficient identification from the rogue.

[7] The motion judge stayed the third party claim against EDN on the basis that Ontario courts lacked jurisdiction due to an absence of a real and substantial connection between EDN and the claim against it on the one hand and Ontario on the other.

[8] In Club Resorts Ltd. v. Van Breda, [2012] S.C.R. 17, the Supreme Court of Canada addressed issues of jurisdiction arising from inter-jurisdictional disputes. The court held that jurisdiction must be established primarily on the basis of objective factors that connect the legal situation or the subject matter of the litigation to the forum (para. 81).[^1]

[9] The Supreme Court set out four presumptive connecting factors relating to claims in tort and issues associated with such claims. When one of these connecting factors is present, a court is entitled, prima facie, to assume jurisdiction over the dispute. The four factors are: a) the defendant is domiciled or resident in the province; b) the defendant carries on business in the province; c) the tort was committed in the province; and d) a contract connected with the dispute was made in the province (para. 90).

[10] In the present case, the first two factors are easily answered. EDN, the defendant in the third party claim, is a Quebec company carrying on business in Quebec. There is nothing in the record to suggest that EDN has done anything in furtherance of its business in Ontario. There is no evidence that it has solicited business or advertised in Ontario, nor has it entered into any contracts relating to this matter with an Ontario business.

[11] As to the third factor, the third party claim against EDN is based in negligence. The negligence alleged is that EDN released the cargo without receiving proper identification from the party who picked it up. The alleged negligence took place entirely in Quebec. There is no connection to Ontario. The law of Quebec will apply to the negligence claim.

[12] SPI relies primarily on the fourth factor, “a contract connected with the dispute was made in the province”. SPI argues that there are three contracts made in Ontario that are connected with the dispute – Export’s contract with SPI to arrange for transportation of the cargo; SPI’s contract with Transvision to transport the cargo; and a common carrier contract covering the shipping arrangements.

[13] We do not accept that these contracts are connected with the dispute in the third party claim against EDN so as to raise a presumption of a real and substantial connection between that claim and Ontario.

[14] The three contracts relied upon by the appellant relate to arrangements between the owner, the broker and the proposed carrier of the cargo. They have no connection to EDN other than they anticipate that the cargo would be picked up at EDN’s warehouse in Quebec. The dispute in issue between SPI and EDN relates solely to the alleged negligence of EDN in releasing the cargo. The contracts relied upon do not address the issue of release of the cargo by EDN as storer. That dispute will be resolved according to the laws of Quebec.

[15] Moreover, there is a contract that is, at least somewhat, connected to the dispute between SPI and EDN. EDN entered into a contract with Trahan at the time Trahan stored the cargo at EDN’s warehouse. That contract governed EDN’s role as a storer of the cargo. It provided that in the event of a dispute, the laws of Quebec would apply. It further provided that Quebec would be the forum for resolving disputes. After purchasing the cargo from Trahan, Export did not do anything to change the basis pursuant to which EDN stored the cargo.

[16] In these circumstances, we are not satisfied that there is a contract made in Ontario sufficiently connected with the dispute involving EDN so as to raise a presumption of a real and substantial connection to Ontario.

[17] In Van Breda, the Supreme Court of Canada indicated that the list of presumptive connecting factors for extra-jurisdictional torts is not closed. The court recognized that over time courts may identify new factors which will also presumptively entitle a court to assume jurisdiction.

[18] SPI argues that this court should create a new presumptive factor based essentially on the fact that EDN is a proper third party in the underlying action pursuant to the test set out in Rule 29 of the Ontario Rules of Civil Procedure. SPI argues that including a third party claim as a presumptive factor would promote the goals of efficiency and fairness that play a role in the court’s decision to recognize a new presumptive factor.

[19] We do not accept this argument.

[20] In Van Breda, the Supreme Court of Canada said that recognition of new presumptive categories should be focussed primarily on the objective factors that connect the legal situation or the subject matter of the litigation with the forum. As the motion judge pointed out, Rule 29 provides a broad scope for advancing third party claims. The fact that a foreign party qualifies as a proper subject of a third party claim is not, by itself, a reliable indicator that there is a real and substantial connection to support the assertion of jurisdiction over that foreign party. The test for adding a party as a third party defendant is not dependent on there being a factual connection to Ontario.

[21] In Van Breda, the Supreme Court of Canada said that when a court considers whether a new connecting factor should be given presumptive effect, the values of order, fairness and comity can serve as useful analytical tools for assessing the strength of the relationship with the forum to which the factor in question points. These values underlie all presumptive connecting factors whether listed or new (para. 92).

[22] We recognize that there may be efficiencies from a defendant’s standpoint, at least, in prosecuting a third party claim in the same jurisdiction as it defends the claim against it. However, that potential efficiency should not, in itself, be a sufficient reason to create a new presumptive category by which Ontario courts assume jurisdiction. There must be some factual connection to Ontario in the new presumptive factor.

[23] Thus, we do not accept the appellant’s argument that the fact that the claim against EDN is a third party claim brought within an existing Ontario action should, without more, be sufficient to create a presumption that Ontario has jurisdiction over that claim.

[24] In Van Breda, the Supreme Court of Canada appears to have held that if there are no presumptive connecting factors, courts should not assume jurisdiction (paras. 93 and 100). Whether that is the case or not, we agree with the motion judge that in this case there is not a sufficient real and substantial connection between EDN and Ontario or between the cause of action asserted against EDN and Ontario to warrant Ontario accepting jurisdiction.

[25] The appeal is, therefore, dismissed.

“D. O’Connor A.C.J.O.”

“J.C. MacPherson J.A.”

“Paul Rouleau J.A. »

[^1]: The motion judge considered the issues raised by this appeal before the Supreme Court of Canada had released its decision in Club Resorts v. Van Breda.