Court of Appeal for Ontario

Citation: Amtim Capital Inc. v. Appliance Recycling Centers of America, 2012 ONCA 664

Date: 20121003

Docket: C55148

Before: Goudge, Simmons and Gillese JJ.A.

Between

Amtim Capital Inc.

Plaintiff (Respondent)

and

Appliance Recycling Centers of America

Defendant (Appellant)

Counsel:

Thomas McRae, for the appellant

Ron Craigen, for the respondent

Heard: September 19, 2012

On appeal from the order of Justice Gordon of the Superior Court of Justice, dated February 21, 2012.

Reasons for Decision

Goudge J.A.:

[1] The appellant Appliance Recycling Centers of America (ARCA) is a company incorporated under the law of Minnesota and is headquartered there.

[2] The respondent Amtim Capital Inc. (Amtim) is an Ontario company headquartered in Toronto.

[3] Pursuant to a contract between them, Amtim manages ARCA’s operations in Canada. Most of Amtim’s services for ARCA are performed in Ontario.

[4] A dispute arose between them concerning the compensation ARCA was required to pay to Amtim under this contract.

[5] On March 14, 2011, ARCA commenced an action in Minnesota seeking a declaration that it had complied with its payment obligations under the contract and owed Amtim nothing.

[6] On March 29, 2011, Amtim commenced the Ontario action in this proceeding, claiming damages for ARCA’s breach of contract.

[7] Amtim then brought a motion in Minnesota seeking dismissal of ARCA’s action for lack of jurisdiction or on the basis of forum non conveniens. The District Court in Minnesota dismissed this motion on August 20, 2011.

[8] Amtim did not appeal this ruling nor defend the Minnesota action. On December 9, 2011, default judgment was granted in Minnesota as requested by ARCA.

[9] Upon receiving Amtim’s statement of claim in the Ontario action, ARCA moved to stay the action on the basis of forum non conveniens. ARCA conceded the issue of jurisdiction, namely that the Ontario court had jurisdiction to entertain the action and could properly assume jurisdiction over the appellant.

[10] On February 21, 2012, the motion judge dismissed ARCA’s motion. Based on the factors relevant to the forum non conveniens issue set out in Muscutt v. Courcelles, 2002 CanLII 44957 (ON CA), [2002] 60 O.R. (3d) 20 (Ont. C.A.), he found that Ontario had the closest connection to the dispute between the parties. He was not persuaded that ARCA had established that Minnesota was the more appropriate forum. He therefore exercised his discretion and dismissed ARCA’s motion.

[11] On appeal, ARCA makes two arguments.

[12] First, it argues that the motion judge improperly considered two of the Muscutt factors. First, the motion judge found that the location of witnesses and documents was a neutral factor, rather than one favouring Minnesota as the appellant argued because, in significant measure, there were witnesses and documents located in both places. Second, he found that geography favoured Ontario rather than Minnesota because the contract was negotiated in Ontario and the business activity pursuant to it was largely carried out by Amtim in Ontario.

[13] The appellant’s argument that the motion judge erred in concluding as he did on both factors can easily be disposed of. The assessment of the various factors relevant to this issue is an exercise in judicial discretion. There was an ample evidentiary basis before the motion judge to support his conclusion on both factors. I see no basis to interfere with his assessment of these two factors or with his collective weighing of all the factors relevant to the forum non conveniens issue.

[14] The appellant’s second argument is that the granting of default judgment in the Minnesota action trumps all other factors relevant to this issue and requires that the Ontario action be stayed.

[15] The appellant acknowledges that prior to default judgment, the existence of the Minnesota action was but one factor to be considered in the forum non conveniens balance. The motion judge did just that, and found that even with the existence of the default judgment, this factor was not conclusive, although slightly favouring Minnesota. He concluded that, weighing all the factors together, it was not enough to displace the effect of the other factors favouring Ontario. Indeed, the appellant acknowledges that had there been no default judgment, he would not have raised this issue on appeal.

[16] I would reject the appellant’s second argument. The assessment of the most convenient forum requires consideration of all the relevant factors. It is an exercise of judicial discretion in light of all the circumstances. In my view, it misconceives the court’s task to say that once default judgment is granted the other relevant considerations become irrelevant. The granting of default judgment does not instantly transform Ontario from the more convenient forum to its antithesis. The default judgment is simply a step in the parallel proceedings in Minnesota which is a factor to be weighed in the balance with the other relevant factors.

[17] To find that the Minnesota default judgment necessitates the conclusion that Ontario is not the more convenient forum, is simply to reduce the determination of the forum conveniens issue into a race to the courthouse and then to judgment. To do so would impair the flexibility of the full forum conveniens analysis that must be conducted. See Teck Cominco Metals Ltd. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321.

[18] Moreover, to give the Minnesota default judgment the result contended for by the appellant is in effect to conclude that it constitutes res judicata for the entire Ontario action. As the Ontario action proceeds, the appellant may be able to use the Minnesota judgment to stay or defend the Ontario action on the basis of res judicata or a related legal doctrine. However it must do so directly and explicitly. In the forum non conveniens context, the Minnesota action including the default judgment remains only one relevant factor among others to be weighed together by the motion judge. That is what happened here.

[19] For these reasons, I would dismiss the appeal. Costs to the respondent fixed at $15,000 in total.

Released: October 3, 2012 (“S.T.G.”)

“S.T. Goudge J.A.”

“I agree. Janet Simmons J.A.”

“I agree. E.E. Gillese J.A.”