ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-426699
DATE: 20130405
BETWEEN:
WEST VAN INC.
Plaintiff
– and –
MICHEL C. DAISLEY and WELLS DAISLEY RABON, P.A.
Defendants
Maurice J. Neirinck, for the Plaintiff
Paul Emerson, for the Defendants
HEARD: October 23, 2012
ellen macdonald j.
REASONS FOR DECISION
[1] This action arises from a retainer to provide legal services in a civil action that took place in North Carolina. The plaintiff in this action, West Van Inc., was the defendant in the North Carolina action. Counsel for West Van Inc. in the North Carolina action are the defendants in this action.
[2] The defendant, Michel C. Daisley, is a resident of North Carolina. He is a partner of the defendant law firm, Wells Daisley Rabon, P.A., a partnership of lawyers located in Charlotte, North Carolina.
[3] In this motion, West Van Inc. asks this court to find that the defendants in this action were negligent in the representation of West Van Inc. in the North Carolina action.
[4] The defendants submit that the subject matter of the within action and the majority of witnesses are located in North Carolina and/or Connecticut. The defendants’ agreement to provide professional services was entered into in North Carolina and the services were performed by the defendants in North Carolina. The North Carolina action concerns losses suffered in North Carolina as a result of a lien filed in Connecticut.
[5] I agree with the defendants that neither the subject matter of this action nor the underlying North Carolina action have any connection to Ontario. It is on this basis alone that I have concluded that Ontario is not the appropriate forum to hear this action and that North Carolina is the most appropriate forum for the disposition of this matter. There are other factors which have led me to this conclusion. I will set them out below.
[6] The decision as to whether or not an action against a foreign defendant should proceed in Ontario is a two step process. First, the court must decide whether it can assume jurisdiction over the foreign defendant (the “jurisdiction simpliciter” issue). If the court cannot assume jurisdiction, the action must be stayed. The second step in the process is a determination as to whether the court ought to decline to exercise its jurisdiction. The court must consider whether the action should proceed in Ontario or whether there is a more appropriate forum for the action (the “forum non conveniens” issue).
Step One – Jurisdiction Simpliciter and the “Real and Substantial Connection Test”
[7] In arguing that Ontario has jurisdiction, West Van Inc. relies on rule 17.02(h) (“Damage Sustained in Ontario”) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which validates service ex juris on the defendants.
[8] Under rule 17.02(h), West Van Inc. can only serve this claim outside of Ontario if the alleged damages were sustained in Ontario.
[9] West Van Inc. argues that its presence in Ontario and the fact that damages were sustained in Ontario meets the Real and Substantial Connection Test for jurisdiction.
[10] In Van Breda v. Village Resorts Ltd., 2010 ONCA 84, 98 O.R. (3d) 721, at para. 78, aff’d 2012 SCC 17, [2012] 1 S.C.R. 572, the Court of Appeal for Ontario revised the Real and Substantial Connection Test to determine the jurisdiction simpliciter issue. The court found that a sufficient connection to this forum will generally not exist when a plaintiff relies solely on the allegation that damage was sustained in Ontario.
[11] In Van Breda, the Court of Appeal made the following relevant findings, at para. 109:
(i) there must be a real and substantial connection between the claim and the adjudicating province;
(ii) a real and substantial connection is not presumed to exist if a claim is served under rule 17.02(h) claiming that damages were sustained in Ontario; and
(iii) where rule 17.02(h) is relied upon, the burden shifts to the plaintiff to establish that the Real and Substantial Connection Test is met.
[12] The Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at para. 90, assessed the Real and Substantial Connection Test and created a list of four presumptive connecting facts that, prima face, entitle a court to assume jurisdiction over a dispute:
(1) the defendant is domiciled or resident in the province;
(2) the defendant carries on business in the province;
(3) the tort was committed in the province; and
(4) a contract connected with the dispute was made in the province.
[13] The Supreme Court of Canada agreed with the Court of Appeal’s position that the presence of the plaintiff in the jurisdiction or suffering of damages in the jurisdiction are not, on their own, a sufficient connecting factor (at paras. 86, 89). At para. 64, the Supreme Court of Canada also agreed with the shifting onus set forth by the Court of Appeal:
If, on the other hand, none of the presumptive connecting factors are found to apply to the claim, the onus rests on the plaintiff to prove that a sufficient relationship exists between the litigation and the forum.
[14] At para. 91, the Supreme Court of Canada noted that its list of four presumptive connecting factors is not closed; in identifying new presumptive factors, it stated that “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.” The court found that in such an exercise, there are four relevant considerations, two of which include: (i) similarity of the proposed connecting factor with the recognized presumptive connecting factors; and (ii) treatment of the proposed connecting factor in the case law.
[15] The Supreme Court of Canada summarized the Real and Substantial Connection Test as follows, at para. 100:
… to meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. In these reasons, I have listed some presumptive connecting factors for tort claims. This list is not exhaustive, however, and courts may, over time, identify additional presumptive factors. … If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors exist or because the presumption of jurisdiction that flows from one of these factors has been rebutted, it must dismiss or stay the action… If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of forum non conveniens.
[16] In the case before this court, the only factors relied upon by the plaintiff to assume jurisdiction is its presence in Ontario and that it suffered damages in this jurisdiction. It should be remembered that the Supreme Court of Canada confirmed the Court of Appeal’s finding that the suffering of damages in the adjudicating province is not a sufficient connecting factor. It is on this basis that the defendants submit that the plaintiff cannot establish any relationship between the litigation and Ontario, let alone a sufficient one.
[17] The defendants further emphasize that the facts in this matter are clear, and that this court must dismiss or stay this action. The plaintiff has been unable to show any new presumptive factor that would apply to link this action with Ontario.
[18] I now consider each of the four recognized presumptive connecting factors:
- The defendants are domiciled or resident in the province
A key consideration is that the defendant, Mr. Daisley, is a resident of North Carolina and is a partner of the defendant law firm, Wells Daisley Rabon, P.A., which is a partnership of lawyers located in Charlotte, North Carolina.
- The defendants carry on business in the province
The defendants do not carry on any business in Ontario.
The alleged negligence which gives rise to this action occurred entirely in North Carolina. The agreement to provide legal services was reached in North Carolina. The defendants have no connection to Ontario. There has been no act or conduct on the part of the defendants that could amount to or be deemed to be a submission to the jurisdiction of Ontario.
West Van Inc. has admitted that the defendants do not carry on any business in Ontario. The plaintiff is not alleging that the defendants have anything to do with Ontario.
- The tort was committed in the province
It is common ground that the alleged negligence was committed in the defence of West Van Inc. in an action in the North Carolina courts.
- A contract connected with the dispute was made in the province
No contract connected with the dispute was made in Ontario.
The North Carolina action against West Van Inc. arose out of a dispute with respect to an Aircraft Purchase Agreement between West Van Inc. and Corporate Fleet Services.
[19] The defendants submit that the law in Van Breda governs, West Van Inc. has failed to establish any of the recognized connecting factors and it cannot establish any relationship between the litigation and Ontario. The effect of the Real and Substantial Connection Test is that this court must stay this action.
[20] I agree with the defendants that the action must be stayed on the basis that the Real and Substantial Connection Test is not met. I now turn briefly to the issue of forum non conveniens.
Step Two – “Forum Non Conveniens”
[21] The factors that I have considered in coming to the conclusion that the action must be dismissed are as follows: the plaintiff is situated in Ontario but it has carried on business in North Carolina and in Florida. The defendants reside in the North Carolina. It is common ground that they do not carry on business in Ontario.
[22] But for West Van Inc.’s representatives, the majority of the witnesses required to establish liability, including West Van Inc.’s expert witnesses and all of the defendants’ witnesses, reside in the U.S. More specifically, this includes Mr. Daisley, his associate lawyer, two opposing counsel in the North Carolina action, potential experts on North Carolina negligence law and applicable Connecticut law, and it may also include West Van Inc.’s prior counsel in the North Carolina action.
[23] It is also noted that the North Carolina action against the plaintiff arose out of a dispute with respect to the Aircraft Purchase Agreement pursuant to which the plaintiff:
(a) agreed that the Aircraft Purchase Agreement shall be construed under and governed by the laws of North Carolina;
(b) irrevocably consented to the exclusive jurisdiction of the State and Federal Courts of Macklenburg County, North Carolina, for any litigation that may arise out of or be related to the Aircraft Purchase Agreement; and
(c) waived any objection based on forum non conveniens or any objection to venue of any such action.
[24] West Van Inc.’s retainer of the defendants was solely with respect to the trial of the North Carolina action by North Carolina lawyers and does not have a choice of forum clause.
[25] The defendants submit that the law governing the plaintiff’s contract with the defendants is the place where the contract was entered into. As such, the law of North Carolina governs any contract issues raised in this action. I agree with the defendants.
The Avoidance of a Multiplicity of Proceedings
[26] The only defendants from whom any judgment is recoverable are in North Carolina. Therefore, if the proceeding were to continue in Ontario, it would be necessary to attempt to enforce any Ontario judgment in North Carolina. If the proceeding goes ahead in North Carolina, there would be no such additional step. I am satisfied that if Ontario assumes jurisdiction, there would be additional legal proceedings with respect to the enforcement of the judgment in North Carolina.
Conclusion
[27] I am satisfied that the applicable law and the factual questions to be decided on the matter of liability favour the jurisdiction of North Carolina. Liability for the defendants’ alleged negligence would be determined in accordance with the North Carolina law.
[28] I agree with the defendants that if the trial of this action were to take place in Ontario, they would suffer significant hardship. The defendants may not be able to compel witnesses to appear. If they are able to compel the witnesses necessary for their defence, they would be required to pay extensive transportation and accommodation costs in Toronto because all of the witnesses are resident in the U.S.
[29] I repeat that the contract for services provided by the defendants which forms the subject matter of this action took place in North Carolina. It has attorned to North Carolina pursuant to the Aircraft Purchase Agreement. The only other factor that I am considering is the need for West Van Inc. to attend trial in North Carolina, a state in which it has already done business.
[30] Declining jurisdiction does not result in any unfairness to the plaintiff. The fact that the plaintiff might be required to pursue a legal remedy in the place where the alleged wrong occurred is not, on the facts of this case, unfair: see Pavacic v. Nicely Estate (2008), 2008 24228 (ON SC), 91 O.R. (3d) 49 (S.C.), at para. 55.
[31] Accordingly, an order shall go staying the action against the defendants on the basis that the courts of Ontario do not have jurisdiction.
[32] I have endorsed the record to this effect. I may be spoken to with respect to costs at a time convenient to counsel and the court.
Ellen Macdonald J.
Released: April 5, 2013
COURT FILE NO.: CV-11-426699
DATE: 20130405
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
WEST VAN INC.
Plaintiff
– and –
MICHEL C. DAISLEY and WELLS DAISLEY RABON, P.A.
Defendants
REASONS FOR DECISION
Ellen Macdonald J.