Court of Appeal for Ontario

Date: 2017-04-13 Docket: C62905 Judges: Weiler, Benotto and Roberts JJ.A.

Parties

Between

Parque Industrial Avante Monterrey, S.A. de C.V. Plaintiff

and

1147048 Ontario Ltd. and Advantage Engineering Inc. Defendants

And Between

1147048 Ontario Ltd. and Advantage Engineering Inc. Plaintiffs by Counterclaim (Respondents)

and

Prodensa Servicios de Consultoria, S.A. de C.V. and CK Technologies, LLC Defendants by Counterclaim (Appellant)

Counsel

Marcos Cervantes Laflamme, for the appellant

Pavle Masic, for the respondents

Hearing and Release

Heard and released orally: April 10, 2017

On appeal from: the order of Justice S.N. Lederman of the Superior Court of Justice, dated September 30, 2016, with reasons reported at 2016 ONSC 6004.

Endorsement

[1] The appellant appeals the dismissal of its motion. The appellant sought to stay the respondents' counterclaim on the bases that Ontario lacks jurisdiction over the counterclaim, Ontario was not the convenient forum for the adjudication of the counterclaim, and Ontario's jurisdiction was ousted by the arbitration clause agreed to by the parties. The appellant did not appeal the motion judge's forum conveniens finding.

[2] Following the framework set out by the Supreme Court of Canada in Van Breda v. Village Resorts Ltd., 2012 SCC 17, [2012] 1 S.C.R. 572, the motion judge found that there were two presumptive connecting factors tying the counterclaim to Ontario. First, applying Central Sun Mining Inc. v. Vector Engineering Inc., 2013 ONCA 601, 117 O.R. (3d) 313, the tort of fraudulent misrepresentation as pleaded in the counterclaim was committed in Ontario because the appellant's impugned misrepresentation had been made to and relied upon by the respondents in Ontario. Second, the contract, based on the wording of the Memorandum of Understanding, as well as evidence of the other elements of the contractual matrix of the parties' relationship, was made in Ontario.

[3] The arbitration clause was in a draft Shelter Services Agreement that was never signed by the parties. Further, the motion judge had before him evidence from the respondents that, "it became apparent that there was no confirmation that anything had been agreed upon". The motion judge held that the parties had never agreed to the arbitration clause as a term of their contractual relationship. As a result, the motion judge determined that the clause did not apply to oust Ontario's jurisdiction in relation to the counterclaim.

[4] We see no error in the motion judge's factual findings or legal conclusions. He applied the correct legal tests. He was entitled to prefer the evidence of the respondents to that of the appellant. It was open to him on the record to determine, first, that the respondents had made out an arguable case that the two presumptive connecting factors existed and were not clearly rebutted by the appellant; and second, that they had not agreed on an arbitration clause to govern any disputes. There is no basis to interfere with his decision.

[5] For these reasons, we dismiss the appeal.

[6] As agreed, the respondents are entitled to costs of $11,500, inclusive of disbursements and HST.

K.M. Weiler J.A.

M.L. Benotto J.A.

L.B. Roberts J.A.