Cugalj et al. v. Wick, 2012 ONSC 2407

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 4477/11
DATE: 20120419

RE: RADOJKA CUGALJ, IGOR CUGALJ, DUSANKA DOJIC and MOMCILO DOJIC, Plaintiffs

AND:

MICHAEL BRANDON WICK, Defendant

BEFORE: HOURIGAN J.

COUNSEL:
Christopher Morrison, Counsel for the Plaintiffs

Todd J. McCarthy, Counsel for the Defendant

ENDORSEMENT

Introduction

1The defendant moves to stay the plaintiffs’ claim on the ground that the court has no jurisdiction over the subject matter of the action.

2This action arises as a result of a motor vehicle accident which occurred on July 12, 2010 in Fort McMurray, Alberta. The accident occurred between a 2007 Chevrolet pick-up truck and a vehicle owned and operated by the defendant in which the plaintiff, Victor Cugalj, was the front passenger.

3The plaintiffs, Radojka Cugalj and Igor Cugalj, reside in the City of Toronto in the Province of Ontario. The plaintiffs, Dusanka Dojic and Momcilo Dojic, reside in Croatia.

4The defendant resides in the Regional Municipality of Wood Buffalo in the Province of Alberta.

Analysis

5The defendant submits that the Ontario court does not have jurisdiction to hear this matter and that pursuant to rule 21.01(3)(a) the action should be stayed.

6The defendant submits that the Ontario court does have jurisdiction and that on a forum conveniens analysis Ontario is the most appropriate jurisdiction for the trial.

7The issues of when a court should assume jurisdiction and the proper considerations in a forum conveniens analysis where given some much needed clarity in the release just yesterday of the Supreme Court of Canada’s decision in Club Resorts Ltd. v. Van Breda , 2012 SCC 17.

8In that case the Court enumerated the circumstances in tort cases where a court could presumptively assume jurisdiction:

90To recap, in a case concerning a tort, the following factors are presumptive connecting factors that, prima facie , entitle a court to assume jurisdiction over a dispute:

(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.

9The Court went on to find that even if one or more of these factors are present it is still open to the other party to rebut the presumption.

10In addition, the Court made clear that the list of presumptive factors is not closed:

91As I mentioned above, the list of presumptive connecting factors is not closed. Over time, courts may identify new factors which also presumptively entitle a court to assume jurisdiction. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:

(a) Similarity of the connecting factor with the recognized presumptive connecting factors;

(b) Treatment of the connecting factor in the case law;

(c) Treatment of the connecting factor in statute law; and

(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.

92When 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 a forum to which the factor in question points. These values underlie all presumptive connecting factors, whether listed or new. All presumptive connecting factors generally point to a relationship between the subject matter of the litigation and the forum such that it would be reasonable to expect that the defendant would be called to answer legal proceedings in that forum. Where such a relationship exists, one would generally expect Canadian courts to recognize and enforce a foreign judgment on the basis of the presumptive connecting factor in question, and foreign courts could be expected to do the same with respect to Canadian judgments. The assumption of jurisdiction would thus appear to be consistent with the principles of comity, order and fairness.

11I note that the Court held that unless a case falls within one of the presumptive connecting factors, whether new or old, a motions judge should not consider the issues that are part of the forum conveniens analysis. A clear distinction must be maintained between the existence and the exercise of jurisdiction (see paragraph 101).

12Counsel for the plaintiffs quite fairly concedes that this case does not fit within any of enumerated presumptive connecting factors. However, he argues that a new factor should be recognized in this case because it is very similar to the connecting factors regarding the residence of a defendant and a defendant carrying on business in the jurisdiction.

13Counsel submits that a new presumptive link should be recognized because the insurance company who is defending on behalf of the defendant is an Ontario corporation. He argues that in reality it and not the defendant is conducting the lawsuit and ultimately a judgment may be collected against the insurance company directly pursuant to section 258(1) of the Insurance Act , R.S.O. 1990, c. I8.

14I reject this argument for the following reasons.

15First, the fact is that the insurance company is a stranger to this action. It is hardly surprising that insurance may be available to respond to a whole host of tort claims from motor vehicles actions, to slip and falls to defamation actions. I know of no authority which, on the basis that a non-party responding insurance company is domiciled in a location, has grounded a finding that such location has prima facie jurisdiction over the subject matter of the litigation.

16Second, there is no guarantee that there will be an obligation to indemnify in this case. The plaintiffs plead that the defendant was under the influence of alcohol at the time of the accident. That fact, if proven at trial, may result in a situation where there is no coverage and, therefore, no ability for the plaintiffs to claim directly against the insurance company.

17Third, and most importantly, the recognition of the new presumptive factor urged upon me by counsel for the plaintiffs runs contrary to spirit and stated intention of the Supreme Court of Canada in its formulation of the new jurisdiction test:

73Given the nature of the relationships governed by private international law, the framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up “on the fly” on a case-by-case basis — however laudable the objective of individual fairness may be. As La Forest J. wrote in Morguard , there must be order in the system, and it must permit the development of a just and fair approach to resolving conflicts. Justice and fairness are undoubtedly essential purposes of a sound system of private international law. But they cannot be attained without a system of principles and rules that ensures security and predictability in the law governing the assumption of jurisdiction by a court. Parties must be able to predict with reasonable confidence whether a court will assume jurisdiction in a case with an international or interprovincial aspect. The need for certainty and predictability may conflict with the objective of fairness. An unfair set of rules could hardly be considered an efficient and just legal regime. The challenge is to reconcile fairness with the need for security, stability and efficiency in the design and implementation of a conflict of laws system.

18The Court has made plain that there is need for certainty and predictability on the issue of the assumption of jurisdiction. To accept the argument that jurisdiction can be assumed on the basis of where a non party insurance company is domiciled would only lead to less certainty. It would result in an increase in jurisdiction and forum conveniens motions as plaintiffs would sue in jurisdictions which have only the most tangential of connections to the litigation.

19I find that the Ontario courts have no jurisdiction. Given this finding, it is unnecessary to conduct a forum conveniens analysis.

Disposition

20The motion is granted. The action is stayed.

21On the issue of costs, the plaintiff shall pay costs of this motion in the amount of $3,500.00 to the defendant within 30 days.