Court of Appeal for Ontario

Sleep Number Corporation v. Maher Sign Products Inc., 2020 ONCA 95

Date: 2020-02-07 Docket: C67005

Before: MacPherson, Sharpe and Jamal JJ.A.

Between

Sleep Number Corporation Plaintiff (Respondent)

and

Maher Sign Products Inc. Defendant (Appellant)

Counsel: Mark Adilman, for the appellant David A. Ziegler, for the respondent

Heard: February 4, 2020

On appeal from the order of Justice Paul Perell of the Superior Court of Justice, dated April 23, 2019, with reasons reported at 2019 ONSC 2478.

REASONS FOR DECISION

[1] The appellant did not defend an action brought by the respondent in Minnesota for damages for the supply of defective goods. The respondent obtained default judgment in Minnesota and then brought this action in Ontario to enforce the Minnesota judgment. The motion judge granted summary judgment enforcing the Minnesota judgment.

[2] The appellant raises three grounds of appeal.

(1) Jurisdiction clause

[3] The appellant’s central argument is that the motion judge erred by refusing to hold that a provision in the initial quotation, provided by the appellant for the proposed supply of signs to the respondent, ousted the jurisdiction of the courts of Minnesota. The quotation stated that the agreement was to be interpreted in accordance with Ontario law and that the respondent “hereby attorns to the jurisdiction of the Courts of Ontario for the purpose of pursuing any legal remedies”.

[4] The motion judge noted that the respondent had “reasonably strong” arguments that the jurisdiction clause in the quotation did not apply to any or all of the sales contracts between the appellant and the respondent, or if it did, that it did not amount to an exclusive jurisdiction clause. He proceeded to find that, even assuming it was an exclusive jurisdiction clause, it did not oust the jurisdiction of the Minnesota courts.

[5] It is well-established that a permissive forum selection clause does not deprive another forum of jurisdiction simpliciter, but is relevant to whether that other forum should exercise its jurisdiction: 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354, 115 O.R. (3d) 241, at para. 25. Before us, the appellant concedes that if the clause in the quotation does not amount to an exclusive jurisdiction clause, the appeal fails.

[6] We find that the forum selection clause is permissive rather than exclusive. As a result, we do not find it necessary to decide how this appeal would be decided if the clause did confer exclusive jurisdiction on the courts of Ontario.

[7] The clause bears striking similarity to clauses that other courts have refused to characterize as conferring exclusive jurisdiction. It provides that the respondent “attorns” (in other words, accepts, submits or yields) to Ontario jurisdiction and says nothing that excludes the jurisdiction of another possible forum. We do not agree that the words in the clause applying it to the pursuit of “any legal remedies” amount to a conferral of exclusive jurisdiction. The word “any” refers to “legal remedies” and has no bearing on choice of forum. In Old North State Brewing Company Inc. v. Newlands Services Inc. (1998), 1998 CanLII 6512 (BC CA), 58 B.C.L.R. (3d) 144, at para. 35, the B.C. Court of Appeal held that an agreement that “the parties will attorn to the jurisdiction of the Courts of the Province of British Columbia” did not meet the standard of “clear and express language … required to confer exclusive jurisdiction” and that it would have been a simple matter to add the word “exclusive” if that was what was intended. See also Hollinger International v. Hollinger Inc., 2005 CanLII 4582 (Ont. Div. Ct.), to the same effect with regard to an agreement that each of the parties “hereby irrevocably attorns to the jurisdiction of the courts [of Ontario]”.

[8] Accordingly, the forum selection clause does not rule out Minnesota jurisdiction. As the motion judge held, it is well accepted that there will often be more than one jurisdiction that is entitled to assert jurisdiction over a given dispute. The existence of another possible forum that has jurisdiction does not deprive the forum selected by the claimant of its jurisdiction.

[9] The appellant did write to the Minnesota court to advise that in light of the wording of the quotation, it would not respond to the claim. However, the appellant chose not to go before the Minnesota court to raise the issue of jurisdiction or to ask the Minnesota court to exercise its discretion to decline jurisdiction.

[10] The respondent argued that the clause did not deprive the Minnesota court of jurisdiction. The Minnesota court found that the appellant had not taken appropriate steps to respond to the proceeding and took jurisdiction. The appellant could have appeared in Minnesota to contest jurisdiction without submitting to Minnesota jurisdiction: see Walker, Canadian Conflict of Laws (6th ed) (LexisNexis, loose-leaf) at p. 14-20.06. The appellant cannot now complain that the Minnesota court should have refused to assume jurisdiction and decide the case.

(2) Real and substantial connection

[11] The appellant submits that the motion judge erred by holding that there was a real and substantial connection sufficient to support the jurisdiction of the Minnesota courts.

[12] We see no error in the motion judge’s finding that there was a real and substantial connection with Minnesota. The respondent is a Minnesota corporation with its principal place of business in that state. There is evidence indicating that the appellant went to Minnesota to solicit the respondent’s business. The contract was largely negotiated in Minnesota and performed by the delivery of products to Minnesota. The appellant’s effort to repair alleged defects in the products it supplied occurred in Minnesota. The motion judge did not err by concluding that those facts satisfy the real and substantial connection test.

(3) Public policy

[13] Finally, we do not accept the argument that it would be contrary to public policy to enforce the Minnesota judgment. The public policy defence is a narrow one and does not apply to the decision of a foreign court to decline jurisdiction in the face of a venue clause. Nor is it contrary to public policy for a court to entertain a case with a real and substantial connection to the forum and to apply the forum’s limitation legislation rather than that of another jurisdiction.

Disposition

[14] Accordingly, the appeal is dismissed with costs to the respondent fixed in the amount agreed to by the parties: $20,000 inclusive of taxes and disbursements.

“J.C. MacPherson J.A.”

“Robert J. Sharpe J.A.”

“M. Jamal J.A.”