Court of Appeal for Ontario
Date: 2018-01-08
Dockets: C63783, C63822, C63857, C64048
Judges: Laskin, Miller, and Paciocco JJ.A.
Docket: C63783
Between
Pietro Pasquale-Antonio Sgromo (Peter Anthony Sgromo); Wide Eyes Marketing Ltd.
Plaintiffs (Appellants)
and
Leonard Gregory Scott (an individual), Eureka Inventions LLC, Bestway (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables & Material Corp. (Shanghai), and Patrizio Fumagalli (an individual)
Defendants (Respondents)
Docket: C63822
Between
Pietro Pasquale-Antonio Sgromo (Peter Anthony Sgromo)
Plaintiff (Appellant)
and
Bail Hotline Bail Bonds, Inc.
Defendant (Respondent)
Docket: C63857
Between
Pietro Pasquale-Antonio Sgromo (Peter Anthony Sgromo); Wide Eyes Marketing Ltd.
Plaintiffs (Appellants)
and
Polygroup International (a Hong Kong corporation); Polygroup Limited (Macao Commercial Offshore), a corporation duly organized under the laws of S.A.R., People's Republic of China; Polygroup Services N.A., Inc. (a United States corporation); Ricky Tong (an individual); William Kaufmann (an individual); Scott Hershock (an individual); Lewis Cheng (an individual); Elmer Cheng (an individual); and Paul Cheng (an individual)
Defendants (Respondents)
Docket: C64048
Between
Pietro Pasquale-Antonio Sgromo (Peter Anthony Sgromo)
Plaintiff (Appellant)
and
Imperial Toy LLC, Peter Tiger, Art Hirsch
Defendants (Respondents)
Counsel
Aaron Challis and Anthony Fletcher, for Leonard Gregory Scott and Eureka Inventions LLC
Peter Henein and Kate Byers, for the respondents Bestway (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables & Material Corp. (Shanghai), and Patrizio Fumagalli
Jordan Lester and Warren Mouck, for the respondent Bail Hotline Bail Bonds, Inc.
Peter Choe, for the respondents Polygroup International, Polygroup Limited, Polygroup Services N.A., Inc., Ricky Tong, William Kaufmann, Scott Hershock, Lewis Cheng, Elmer Cheng, and Paul Cheng
Derek Zulianello and Kathleen Commisso, for the respondent Imperial Toy LLC, Peter Tiger, and Art Hirsch
Pietro Sgromo, acting in person on his own behalf and on behalf of the appellant, Wide Eyes Marketing Ltd.
Heard: December 22, 2017
On appeal from the orders of Justice Douglas C. Shaw of the Superior Court of Justice, dated April 24, 2017, with reasons reported at 2017 ONSC 2522, 2017 ONSC 2524, and 2017 ONSC 2525, and the order of Justice Terrence A. Platana of the Superior Court of Justice, dated June 27, 2017, with reasons reported at 2017 ONSC 3978.
Reasons for Decision
[1] The appellant, Peter Anthony Sgromo, brought four related actions arising out of various dealings with the respondents. Two of those actions were also brought by the appellant, Wide Eyes Marketing Ltd., a company in which Mr. Sgromo is the sole officer and shareholder.
[2] Although Mr. Sgromo is a Canadian citizen and now lives in Thunder Bay, during the period of time at issue in his lawsuits – roughly 2001 to 2016 – he lived in the United States. The actions of the various respondents of which he complains all took place in the United States, almost entirely in California.
[3] The respondents brought motions to dismiss or stay the appellants' actions, principally on the ground that an Ontario court had no jurisdiction over his claims because there is no real and substantial connection between his litigation and this province. In each action, the motion judge granted the motion and dismissed the action brought by Mr. Sgromo (and, where applicable, Wide Eyes).
[4] After considering Mr. Sgromo's detailed written submissions and his oral submissions, we called on the respondents on three issues:
Did Mr. Sgromo enter into a consulting contract with Imperial Toy at the Toronto airport, thus giving Ontario jurisdiction over his claim against that company?
Did Mr. Sgromo enter into a consulting contract with Bestway at the Toronto airport, thus giving Ontario jurisdiction over Mr. Sgromo's claim in his litigation against Mr. Scott and the Bestway companies?
Were some of the respondents carrying on business in Ontario, thus satisfying one of the presumptive connecting factors for jurisdiction under the principles set out by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572?
[5] Having reviewed the positions of the parties on each of these issues, we are satisfied that an Ontario court has no jurisdiction over any of Mr. Sgromo's claims.
[6] The first two issues can be dealt with together. Mr. Sgromo relies on two applications – one made by Imperial Toy and the other by Bestway – requesting permission for him to act as a consultant in the United States. Each application was made at the Toronto airport to Homeland Security, whose authorization Mr. Sgromo required to work in the United States. Neither application is a contract. Any consulting arrangement or other business relationship between the parties took place in California. The two applications made at the Toronto airport do not establish a real and substantial connection to Ontario.
[7] On the third issue, Mr. Sgromo submits that because the products of some of the respondents were advertised, marketed, and distributed in Ontario, the respondents were in substance carrying on business here. The respondents acknowledge that under Van Breda, carrying on business in Ontario is a presumptive factor establishing a real and substantial connection to this province.
[8] Mr. Sgromo made the same submission before the motion judge in both the Bestway and Polygroup actions. In each case the motion judge rejected his submission. In the Polygroup action the motion judge wrote at paras. 33-34:
In Van Breda, at para. 87, the Supreme Court of Canada stated that caution must be exercised in considering whether an entity is carrying on business in the jurisdiction, to avoid what would amount to assuming universal jurisdiction in respect of tort claims arising out of certain categories of business or commercial activity. "The notion of carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office or regularly visiting the territory of the particular jurisdiction."
Although retailers in Ontario may carry Polygroup products, and although Polygroup therefore did business with Ontario retailers, this does not mean that Polygroup carried on business in Ontario. For Polygroup to carry on business in Ontario, it would require a finding that Polygroup had some form of actual presence in the Province.
[9] And in the Bestway action the same motion judge wrote at paras. 67-68:
Mr. Sgromo submits that the Bestway companies are carrying on business in Ontario because their products are sold at retailers in Ontario. In Van Breda, at para. 87, the Supreme Court of Canada stated that caution must be exercised in considering whether an entity is carrying on business in the jurisdiction, to avoid what would amount to assuming universal jurisdiction in respect of tort claims arising out of certain categories of business or commercial activity. "The notion of carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office or regularly visiting the territory of the particular jurisdiction."
There is no evidence that the Bestway companies had such an actual presence in Ontario, even if their products were sold in the province by third party retailers, as alleged by Mr. Sgromo.
[10] We agree with each of these passages. We add that in Van Breda, at para. 87, LeBel J. emphasized that even active advertising in Ontario would not be enough to establish that a defendant was carrying on business here.
[11] Mr. Sgromo argued his case well, both in writing and orally. But we see no reviewable error in the reasons of the motion judge in each action.
[12] The appeals are dismissed with costs to the respondents as follows:
- Bail Hotline: $10,000
- Imperial Toy: $13,000
- Polygroup: $15,000
- Mr. Scott: $10,000
- Bestway: $20,000
[13] Each cost award is inclusive of disbursements and HST and takes into account the costs of four motions brought by the appellants in the underlying appeals. These four motions were dismissed by Benotto J.A. on November 2, 2017, and costs were ordered payable to the respondents, but the quantum was reserved for this panel to decide.
"John Laskin J.A."
"B.W. Miller J.A."
"David M. Paciocco J.A."