SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 12/34314(Hamilton)
DATE: 2013-04-04

RE: RANDALL CHATTERSON, BRENDA CHATTERSON a.k.a. BRENDA HACKER, and 1291008 ONTARIO LIMITED - Plaintiffs

AND:

M & M MEAT SHOPS LTD. - Defendant

BEFORE: The Honourable Mr. Justice D.A. Broad

COUNSEL:
George Limberis - Counsel, for the Plaintiffs/Responding Parties
Evan Thomas - Counsel, for the Defendants/Moving Parties

HEARD: March 27, 2013

ENDORSEMENT

Background

[1] The Defendant moves for an order to change the venue of the action from Hamilton to Kitchener pursuant to Rule 13.1.02(2). It was not argued that article (a) of Rule 13.1.02(2) is applicable. Accordingly, the issue under article 13.1.02(2)(b) is whether a transfer from Hamilton to Kitchener is desirable in the interests of justice having regard to the factors listed at paragraphs 13.1.02(2) (i) to (ix).

[2] The individual Plaintiffs are shareholders of the corporate Plaintiff which operates an M & M Meat Shop franchise in North York (Toronto) Ontario. The Defendant is the franchisor of the M & M Meat Shops franchise system, comprised of frozen food retail stores at various locations in the Province.

[3] The action is for damages for breach of contract, negligence, bad faith, lack of disclosure and misrepresentation in relation to the disclosure requirements under the Arthur Wishart Act S.O. 2000, chapter 3, and the relationship between the parties as franchisor and franchisee.

[4] The Defendant’s head office is in Kitchener, Ontario and most of its witnesses, consisting of existing and former employees of the Defendant, are located in or about the Kitchener- Waterloo area. The Defendant’s counsel practise in Toronto.

[5] The Statement of Claim contains specific allegations against 14 current and former employees of the Defendant, and the Defendant anticipates having to call each of the named individuals as witnesses at the trial to respond to the allegations, six of whom are current employees and eight are former employees. Twelve of the fourteen individuals reside in the Kitchener-Waterloo area, one in Toronto and one in Nova Scotia. The Defendant indicates in its affidavit in support of the motion that, depending on how the action develops, it may be required to call other employees as witnesses, most of whom also reside in the Kitchener-Waterloo area.

[6] The Plaintiff, in their responding affidavit, dispute the residence of the defence witness identified as residing in Nova Scotia, suggesting that he lives in Milton, Ontario. The affidavit indicates that all of Plaintiffs’ witnesses reside in the greater Toronto area, comprised of six named witnesses, in addition to the individual Plaintiffs themselves, as well as a number of customers and experts.

[7] The Plaintiffs’ counsel practises in Hamilton.

Governing Principles

[8] The Defendant submits in its Factum that, on the authority of Siemans Canada Ltd. v. Ottawa (City), 2008 48152 (ON SC), [2008] OJ No. 3740 (SCJ), the appropriate analysis under Rule 13.1.02(2) involves two steps. The first step is to examine whether the Plaintiff’s choice of venue has a rational connection to the cause of action. If not, the transfer should be made. If the Plaintiff’s choice is reasonable, the court must then compare the two venues, with the Plaintiff’s suggestion prevailing if there is something to be said for both options.

[9] In the case of Bhatt v. Chan, 2012 ONSC 5220 at para. 5, I observed that D.M. Brown, J. in Hallman v. Pure Spousal Trust (Trustee of) 2009 51192 (ON SC), 2009 80 C.P.C. (6th) 139 (SCJ) had identified two slightly different approaches to the interpretation of Rule 13.1 having to do with whether, as a preliminary step, it must be shown that the Plaintiff’s choice of venue has a rational connection to the cause of action or the parties, as suggested by Corbett, J. in Siemens.

[10] Justice Brown declined to follow the two-step Siemens approach, in favour of a “holistic” exercise involving consideration of the factors enumerated in the rule to determine whether the moving party has demonstrated that “a transfer is desirable in the interest of justice” (see Hallman at para. 28).

[11] As I pointed out in Bhatt, the approach suggested by D.M. Brown, J. in Hallman appears to have been largely followed by Masters and judges subsequently, as exemplified by the cases of Wilcox v Flintstone Glass & Mirror Ltd. (2009) 2009 73279 (ON SC), 85 C.P.C. (6th) 394 (Master), Aherne v. Change 2012 ONSC 2689 (Master) and Rahemtulla v. Bell 2012 ONSC 2181 (SCJ), another decision of D.M. Brown, J.

[12] After noting that there is no “bright line” test on how much more desirable the location proffered by the moving party must be over than initially selected by the Plaintiff, and that change of venue motions are fact-specific, Justice Brown at para. 21 of Rahemtulla, stated:

Suffice it to say that a party seeking to transfer a proceeding to a new county must demonstrate, on cogent and persuasive evidence, that such a transfer would be in the interest of justice in the sense that the adjudication of the dispute in another venue would better secure "the just, most expeditious and least expensive determination of [the] civil proceeding on its merits.

Analysis

[13] The first four factors at subparagraphs 13.1.02(2)(b)(i) to (iv) focus on the connection of the facts and issues in the case to the locality of the court. In this respect, it is acknowledged that there is no connection between Hamilton and the events giving rise to the action. To the extent that at least some of the events took place in Kitchener where the Defendant’s head office is located, with the balance taking place in Toronto, as between the two competing venues, only Kitchener has a connection to the facts and issues. However, its connection may be somewhat tenuous since the alleged damages were not sustained there, but were sustained in Toronto where the Plaintiffs’ business is located. Moreover, it is noted that there would appear to be little, if any, general local community interest in the issues under factor (iv). It is likely that the only non-parties interested in the proceeding and its outcome would be other franchisees of the Defendant who are located between Toronto and Kitchener.

[14] Factor (vi) relating to the existence of counterclaims, cross-claims, or third or subsequent party claims has no relevance. Similarly it is not suggested that factor (viii), related to whether judges and court facilities are available in the two counties, has any importance.

[15] With respect to the convenience of the parties, the witnesses and the court, it is noted that of the twelve proposed defence witnesses who are located in the Kitchener-Waterloo area six are current employees of the Defendant and are therefore under its control. All of the Plaintiffs’ witnesses are located in Toronto, and are therefore closer to Hamilton than Kitchener, however marginal the difference in distance may be.

[16] Had the Plaintiffs commenced the action in Toronto, where its business is located, where the damages are alleged to have occurred and where all of the Plaintiffs’ witnesses are located, it is unlikely that there would be any argument that the venue should be transferred to Kitchener. The Defendant therefore relies largely on the fact that Hamilton itself is not connected to the action, the parties or the witnesses, and argues that, by default, Kitchener must be the preferred location.

[17] However, as indicated above, there is no longer a requirement that the venue named by the Plaintiff have a rational connection to the action, as a first step of the analysis. The onus is on the Defendant to demonstrate that Kitchener is a more desirable venue than Hamilton, not just as desirable (see Rahemtulla at para. 20 and Bhatt at para. 11).

[18] As I observed in Bhatt, at para. 15, the placement of the onus on the party who seeks a change in venue serves the purpose of discouraging the bringing of what can be expensive and time-consuming change of venue motions when they are not demonstrably necessary to serve the interests of justice.

[19] As stated by Corbett, J. in Siemens at para 25, and echoed by D.M. Brown, J. in Hallman at para. 65, Rule 13.1 does not call for “a minute assessment designed to determine which is the "better" or the "best" choice. If there is something to be said for both of the suggestions, then the Plaintiff's suggestion should prevail. However, if the defendant's suggestion is significantly better than the Plaintiff's, then the change should be made.”

[20] In my view, Hamilton, being at roughly the mid-point between Toronto and Kitchener, was a rational and reasonable place for the action to be commenced, notwithstanding that it does not, itself, have a connection to the events and issues. Leitch, J., in the recent case of Rooney v. Arcelormittal S.A. 2013 ONSC 6062 (SCJ), at para. 46, observed that, so long that there is a rational and reasonable explanation for the place of commencement, it is not enough for the moving parties to emphasize that none of the enumerated factors favour that location as the venue. In this case, Hamilton does have the advantage of levelling the playing field as between the parties in relation to the attendance of their witnesses. It is noted that there will be no requirement for air travel for any witnesses (with the exception of the one defence witness who may be located in Nova Scotia, and for whom Hamilton may be more convenient than Kitchener) and overnight accommodation will likely not be required for either side’s witnesses.

Disposition

[21] In consideration of all of the relevant factors under Rule 13.1.02(2)(b)(i) to (ix), I find that the Defendant has not satisfied the onus on it to demonstrate, on cogent and persuasive evidence, that a change of venue to Kitchener is desirable in the interests of Justice, notwithstanding Mr. Thomas’ very capable argument. The motion is therefore dismissed.

[22] The parties may make brief written submissions with respect to costs; the Plaintiff within fifteen days of the release of this Endorsement, and the Defendant within ten days thereafter.

D.A. Broad, J.

Date: April 4, 2013