COURT FILE NO.: C-615-13

DATE: 2014/11/26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ASHLEY KHAN, Plaintiff

AND:

JEREMY LAYDEN, GARY LAYDEN, JAMIE BACCHUS, INTACT INSURANCE COMPANY and TRADERS GENERAL INSURANCE COMPANY, Defendants

BEFORE: The Honourable Justice D.A. Broad

COUNSEL:
A. D. Elias, for the Plaintiff

J. D. Dean, for the Defendants Jeremy Layden and Gary Layden

T. Chapman for the Defendant Jamie Bacchus

G. Black for the Defendant Traders General Insurance Company

HEARD: October 23, 2014

ENDORSEMENT

The Action and Background

[1] This action arises out of a two-car collision on November 24, 2011 in Erie, Pennsylvania in which the plaintiff was a passenger, along with another individual, Ms. Michelle Poyser-Gerwing, in a car driven and owned by the defendant Jamie Bacchus. The car being driven by Ms. Bacchus collided with a car driven by the defendant Jeremy Layden and owned by the defendant Gary Layden. The plaintiff claims that she suffered injuries in the collision.

[2] The plaintiff, Ms. Bacchus, and Ms. Poyser-Gerwing were all living in Ontario at the time of the accident and continue to do so. The defendants, Jeremy Layden and Gary Layden, each resided in Pennsylvania at the time of collision and continue to do so.

[3] The defendant Intact Insurance (“Intact”) is Ms. Bacchus’ insurer and is named under the uninsured/underinsured motorist provisions of her insurance policy and the defendant Traders General Insurance Company is the plaintiff’s father’s insurer, named under the uninsured/underinsured motorist provisions of his insurance policy. It is indicated in the materials that Traders General Insurance Company was improperly named and that the proper name of the plaintiff’s father’s insurer is Scottish & York Insurance Co. Limited (“Scottish & York”).

[4] All of the defendants in the action except Jeremy Layden and Gary Layden have delivered Statements of Defence. Jeremy Layden and Gary Layden were noted in default on March 10, 2014.

Motions

[5] The defendants, Jeremy Layden and Gary Layden, move for an order setting aside their noting in default and for an order dismissing the action as against them for lack of jurisdiction, or in the alternative, for an order pursuant to section 106 of the Courts of Justice Act staying or dismissing the action as against them on the basis that the Ontario courts do not have jurisdiction over them and that Ontario is not the convenient forum for the action.

[6] Scottish & York brings a companion motion seeking dismissal or a stay of the action as against it on the same basis put forward by the Layden defendants. It also argues that, if the action is stayed or dismissed as against the Layden defendants, the action as against it should be stayed until the Pennsylvania action is disposed of.

[7] The setting aside of the noting in default of the Layden defendants is consented to by the plaintiff. The plaintiff and the defendant, Bacchus, oppose the motions seeking dismissal or the staying of the action. The defendant Intact has taken no position with respect to the motions.

Analysis

(a) Basic Principles

[8] The leading authority on the question of the assumption and exercise of jurisdiction by the Court in cases involving non-resident defendants and torts or other causes of action occurring outside Ontario is the case of Club Resorts Ltd. v. Van Breda 2012 SCC 17, [2012] 1 S.C.R. 572 (S.C.C.).

[9] In Van Breda, the Supreme Court of Canada affirmed a two-stage process for deciding whether the court should assume jurisdiction over a claim. The first stage involves the determination of whether the court is entitled to take jurisdiction based on whether the claim has a real and substantial connection to Ontario (called “jurisdiction simpliciter”). If there is no real and substantial connection the court may not assume jurisdiction. If the court is entitled to assume jurisdiction by reason of the existence of a real and substantial connection to Ontario, the second stage involves the court determining whether the party opposing the exercise of jurisdiction has met the burden of showing why the court should decline to do so on the basis of forum non conveniens.

(b) Real and Substantial Connection and Jurisdiction Simpliciter

[10] The Supreme Court of Canada in Van Breda identified four presumptive connecting factors in tort actions which establish a real and substantial connection between the claim and the forum, entitling the court to assume jurisdiction, as follows:

(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.

(see Van Breda, para. 90)

[11] The list of presumptive connecting factors is not closed, leaving open the possibility for the court to identify new factors which may also presumptively entitle court to assume jurisdiction. The Supreme Court stated that a court, when considering new factors, should look to connections that give rise to a relationship with the forum that are similar in nature to the ones that result from the listed factors (see Van Breda, para. 91).

[12] In the present case, presumptive connecting factors (b), (c) and (d) have no application. With respect to (b), it has been held that the fact that a resident insurer is named as a defendant is not a sufficient presumptive connecting factor giving the court jurisdiction over the dispute and the non-resident defendants, and that the inclusion of a claim against the plaintiff’s automobile insurer should not serve to “bootstrap” jurisdiction over the non-resident defendants (see Tamminga v Tamminga 2014 ONCA 478 (C.A.) at paras. 1 and 27, citing Gajraj v. DeBernardo (2002), 2002 44959 (ON CA), 60 O.R. (3d) 68 (C.A.)). Factors (c) and (d) have no application as the tort was committed in Pennsylvania and not in Ontario and there is no relevant contract made in Ontario connected with the dispute.

[13] Mr. Dean, for the Layden defendants, argues that presumptive connecting factor (a) also has no application since neither of the moving defendants are domiciled or resident in the province. He argues that, in order for the court to assume jurisdiction, there must be a real and substantial connection against every defendant. Accordingly, he argues, the fact that the defendant Bacchus is resident in Ontario does not permit the court to assume jurisdiction over the non-resident defendants in a case like this where none of the other presumptive connecting factors exist.

[14] Reference was made by Mr. Dean to paragraph 55 of Van Breda where the LeBel, J. noted that Sharpe, J.A. in the Court of Appeal declined to give presumptive effect to the factors set out in subrules 17.02(h) (damage sustained in Ontario) and 17.02(o) (necessary or proper party) (included in rule 17 governing service ex juris). That the factors in rule 17.02, including the circumstances of damages in Ontario or of necessary parties, do not form the basis for the assumption of jurisdiction was reinforced by Perell, J. in Misyura v. Walton 2012 ONSC 5397 (S.C.J.) at paras. 31 and 38.

[15] Mr. Dean argues that what the plaintiff is attempting to do in the present case is to try to reintroduce the “necessary and proper party” analysis by asserting that the Court should assume jurisdiction over the Layden defendants on the basis they are “necessary and proper parties” to the action against Ms. Bacchus. Mr. Dean argues that the Supreme Court of Canada, in Van Breda, stated that that the fact that a non-resident defendant is a necessary and proper party does not create jurisdiction over that defendant.

[16] In my view, the enquiry should not be focused only on whether the court is entitled to assume jurisdiction over the individual defendants but should also focus on whether jurisdiction should be assumed over the claim or the dispute. At para 17 of Van Breda, Justice LeBel identified the two issues in the appeals as follows “First, were the Ontario courts right to assume jurisdiction over the claims of [the plaintiffs] and over [the defendant]. Second, were they right to exercise the jurisdiction and dismiss an application for a stay based on forum non conveniens?” (underlining added). At para. 90, Justice LeBel introduced the list of presumptive connecting factors as factors that prima facie “entitle the court to assume jurisdiction over a dispute” (underlining added). At para. 99 he stated that “the purpose of the conflicts rules is to establish whether a real and substantial connection exists between the forum, the subject matter of the litigation and the defendant” (underlining added).

[17] The fact that the enquiry is concerned with assumption of jurisdiction over the dispute, and not simply on the circumstances of the individual defendants, is further exemplified by the fact that two of the presumptive connecting factors, (c) and (d), have nothing directly to do with the situation of the moving defendants and their connection to the forum.

[18] In the case of Cesario v. Gondek 2012 ONSC 4563 (S.C.J.) Edwards, J. held, at para. 28, that, in a case involving a single action commenced in Ontario by plaintiffs injured in two separate accidents, one in New York and one in Ontario, where at least one defendant was resident or domiciled in Ontario, there was a sufficient real and substantial connection between the claim and Ontario such that the court should assume jurisdiction over all aspects of the case.

[19] Cesario has been commented upon in subsequent cases but not overruled. Mitchell v. Jeckovich 2013 ONSC 7494 (S.C.J.) was an action involving an Ontario plaintiff injured in a New York State collision with a vehicle owned and operated by New York State residents in which the plaintiff named her own insurer as a defendant. Milanetti, J. distinguished Cesario on the basis that it involved one accident in New York and another in Ontario, and “therefore, the tort action involved both an Ontario and New York defendant. This in itself provides a sufficient ‘real and substantial’ connection as defined in Van Breda.”

[20] In Tamminga Strathy, J.A. observed at para. 29 that Cesario was:

distinguished by the motion judge on the basis that the plaintiffs had been in two accidents, there were joint tortfeasors allegedly responsible for the plaintiffs' damages and those damages were considered inseparable. She noted that the presence of the plaintiffs' insurer in Ontario was not a factor that entered into the determination. The case was clearly distinguishable, for those reasons.

[21] In my view, neither Mitchell nor Tamminga stand for the proposition that the principle enunciated by Justice Edwards in Cesario should be confined to a single action involving two or more separate accidents in different jurisdictions. I see no reason why the principle should be limited in that fashion. As observed by Strathy J.A. in Tamminga, the basis for distinguishing Cesario was not limited to the fact that the plaintiff had been in two accidents, but extended to the fact that there were joint tortfeasors alleged to be responsible for the plaintiffs’ damages and that the damages were considered inseparable.

[22] In finding that to force an Ontario litigant to split his or her case between more than one jurisdiction would not do justice between the parties, Justice Edwards in Cesario quoted the following passage from para. 75 of Van Breda:

Stability and predictability in this branch of law of conflicts should turn primarily on the identification of objective factors that might link a legal situation or the subject matter of litigation to the court that is seized of it. At the same time, the need for fairness and justice to all parties engaged in litigation must be borne in mind in selecting these presumptive connecting factors.

[23] In my view, these same principles apply where there are joint or multiple tortfeasors, one of which is located in Ontario, and inseparable damages claimed by the plaintiff, regardless of whether there was one accident involving the plaintiff, or more than one.

[24] It must be recalled that the first stage of the inquiry under Van Breda is only concerned with entitlement of the court to take jurisdiction, not whether the court should exercise such jurisdiction. Moreover, even at the first stage, it is still open to the party resisting jurisdiction to seek to convince the court that the proposed assumption of jurisdiction would be inappropriate on the basis that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them (see Van Breda paras. 81 and 94-95). Accordingly, there exists a safeguard against an overly-broad assumption of jurisdiction at the first stage of the Van Breda formulation, even before embarking on the forum non conveniens enquiry.

[25] On the basis of the foregoing, I find that there is a real and substantial connection between the dispute and Ontario, and accordingly, the Ontario court is entitled to assume jurisdiction over the action and over the Layden defendants.

Forum Non Conveniens

[26] As laid down in Van Breda, once jurisdiction is established, the burden is on the moving defendants to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. In doing so, the defendants must identify another forum that has an appropriate connection under the conflicts rules and must demonstrate why the proposed alternative forum should be preferred and considered to be more appropriate. (see Van Breda para. 103). The burden on the moving parties is to show that the alternative forum is clearly more appropriate. This represents an acknowledgement that the normal state of affairs is that the jurisdiction should be exercised, once it is properly assumed. The burden is on the party who seeks to depart from the normal state of affairs to show that it would be fairer and more efficient to do so and that the plaintiff should be denied the benefits of his or her decision to select the forum that is appropriate under the conflicts rules. It is therefore not a matter of flipping a coin between the two alternative jurisdictions (see Van Breda at paras. 108-109).

[27] The Layden defendants submit that there are potential witnesses who are resident in Pennsylvania who may be required to give evidence at trial in relation to the disputed issues of liability and damages, such as police officers and emergency physicians and medical staff who would have treated the plaintiff immediately following the accident Pennsylvania.

[28] Contrary to the moving parties’ assertions, it appears from the record that the plaintiff did not seek medical attention until following her return to Ontario and accordingly there is no indication that there are any physicians or medical staff in Pennsylvania who would be in a position to offer relevant evidence at the trial. Moreover, the only police involvement appears to be the attendance of an officer 30 minutes following the accident who interviewed the witnesses and filled out an occurrence report, copies of which are in the possession of all of parties. It is far from clear that it will be necessary for the police officer who filled out the occurrence form to give evidence at the trial.

[29] Of the four potential witnesses to the collision, three are resident in Ontario, namely the plaintiff, Ms. Bacchus and Ms. Poyser-Gerwing. Only Jeremy Layden is resident outside Ontario. Moreover, all of the plaintiff’s treating physicians and professionals are located in Ontario, as are the plaintiff’s family, friends, coworkers and employer who may be expected to be called to testify at trial on the question of damages.

[30] The case of Gordon v. Deiotte 2012 ONSC 1973, [2012] O.J. No. 1488 (S.C.J.), involved a comparable situation. The motor vehicle accident in that case occurred in the state of Michigan, however, the overwhelming majority of the plaintiff’s damages witnesses were located in Ontario. Justice Koke held as follows:

It will be considerably less expensive and more convenient for the plaintiffs to prove their damages in Ontario. They have numerous witnesses and these witnesses cannot be compelled to testify in Michigan. If the liability is contested at trial it will likely be a simple matter for [the non-resident defendant] to cross over the international bridge and attend trial. It will be much more difficult for the plaintiffs to arrange or convince their medical providers to travel to a court in Michigan to testify. Any difficulties in ensuring that the medical providers will attend the trial will be prejudicial to the plaintiffs.

[31] The Layden defendants also point to the existence of two actions having been already commenced in Pennsylvania arising from the same accident, one by the plaintiff and the other by Ms. Poyser-Gerwing as against Jeremy Layden, and submit that staying the Ontario action would avoid any risk of conflicting judgments with respect to the issues of liability and damages and would also avoid a multiplicity of proceedings.

[32] It is noted in this respect that the plaintiff only commenced her Pennsylvania action by issuance of a writ of summons in order to protect the limitation period after the Layden defendants signalled their intention to bring this motion. No information was provided by the Layden defendants as to whether the action commenced by Ms. Poyser-Gerwing has proceeded beyond the issuance of a writ of summons.

[33] Mr. Dean for the Layden defendants also argues, citing the Court of Appeal in Gajraj v. DeBernardo 2002 44959 (ON CA), [2002] O.J. No. 2130 (C.A.) at para. 22 and in Sinclair v. Cracker Barrel Old Counttry Store Inc., 2002 44955 (ON CA), [2002] O.J. No. 2127 (C.A.), at para. 21 that “to assume jurisdiction in the present case would create a rule requiring Ontario courts to recognize and enforce judgments of foreign courts for damages arising from Ontario motor vehicle accidents.”

[34] It is noted that Gajraj and Sinclair were each companion actions to Muscutt v. Courcelles (2002) 2002 44957 (ON CA), 160 O.A.C. 1 (C.A.). The passages, at para. 22 of Gajraj and para. 21 of Sinclair, relied on by the moving parties, related to application of the sixth of the eight factors identified by Sharpe, J.A. in Muscutt to be considered when determining whether the real and substantial connection test and the principles of order and fairness have been satisfied. The sixth factor was stated by Sharpe J.A. to be “the court’s willingness to recognize and enforce an extra-provincial judgement rendered on the same jurisdictional basis.”

[35] As noted by the LeBel, J., Sharpe J.A. reframed the Muscatt test in the Court of Appeal decision in Van Breda, stating that whether the courts would be willing to recognize and enforce a foreign judgment should not be treated as a separate factor to be weighed against the other connecting factors in determining jurisdiction but rather it is a general and overarching principle that constrains the assumption of jurisdiction against extra-provincial defendants (see Van Breda para. 62). It is noted that the Supreme Court of Canada in Van Breda did not adopt this dicta in the Court of Appeal decision, but rather set out a fresh framework to be applied by the court when considering whether to assume and exercise jurisdiction.

[36] In my view, the eight factors identified by Sharpe J.A. in Muscutt, and applied in the companion cases of Gajraj and Sinclair, have been overtaken by the framework for the assumption and exercise of jurisdiction set out by the Supreme Court of Canada in Van Breda. I therefore decline to give effect to what is essentially a policy argument advanced by the moving defendants based upon the cited passages in Gajraj and Sinclair.

Disposition

[37] Based upon the foregoing, I find that the Layden defendants have failed to show that the Pennsylvania court is clearly the more appropriate forum. Their motion to dismiss or stay the action as against them is therefore dismissed.

[38] The motion of Scottish & York that there should be a stay of the action as against it was premised on the Layden defendants being successful on their motion. The motion of Scottish & York is therefore also dismissed.

[39] The noting in default of the defendants Jeremy Layden and Gary Layden is set aside on consent.

Costs

[40] If the parties cannot agree on costs, the plaintiff and the defendant Bacchus may make written submissions as to costs within 15 days of the release of this endorsement. The moving defendants have 10 days after receipt of the plaintiff’s submissions to respond. All such submissions shall be brief, not exceeding three double-spaced pages (excluding Bills of Costs and Offers to Settle) and are to be forwarded to me at my chambers at 85 Frederick Street, 7th fIoor, Kitchener, Ontario N2H 0A7. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

D.A. Broad

Date: November 26, 2014