Carolina Foods, Inc. v. 838116 Ontario Inc., 2015 ONSC 1342

COURT FILE NO.: CV-14-509709

DATE: 20150302

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Carolina Foods, Inc., Plaintiff

AND:

838116 Ontario Inc., also known as 838116 Ontario, Inc., carrying on business as Donut Time and Donut Time/Concord Bakery, and 2145919 Ontario Limited, Defendants

BEFORE: Whitaker J.

COUNSEL: David Alderson and Andrew Ottaway, for the Plaintiff

Michael J. Reid, for the Defendants

HEARD: December 17, 2014

ENDORSEMENT

[1] This is a motion by the Plaintiff, Defendant by Counterclaim Carolina Foods, Inc. (“Carolina Foods”) to dismiss or permanently stay the Counterclaim brought by the Defendant/Plaintiffs by Counterclaim (the “Defendants”) on the grounds that Ontario does not have jurisdiction. In the alternative, if Ontario has jurisdiction, the Ontario court should decline to exercise its jurisdiction for non conveniens.

[2] The Plaintiff obtained a judgment against the Defendants in North Carolina for failure to pay for goods accepted in North Carolina, without complaint. The Plaintiff commenced the action to have the North Carolina judgment recognized in Ontario. The Defendants have brought an unrelated Counterclaim for over $500,000, alleging that the Carolina Foods breached undated, unspecified agreements.

[3] I agree with the Plaintiff that it has not attorned to the jurisdiction of the Ontario courts over the Counterlcaim commenced in the action. I agree also that the record in this action does not engage the merits of the matter.

[4] In the leading case decided by the Supreme Court (Club Resorts Ltd. V. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572), the court noted that where one of four presumptive connecting factors are present, the court is entitled prima facie to assume jurisdiction. These are: is the defendant domiciled or resident in the province; does the defendant carry on business in the province; was the tort committed in the province; and lastly, whether a contract connected with the dispute was made in the province.

[5] In my view Carolina Foods has not attorned to the jurisdiction of the Ontario court simply by commencing the recognition action. Applying the Van Breda factors, I am satisfied that the recognition action and the Counterclaim do not engage the merits and have no real and substantial connection to Ontario.

[6] The next question is whether Ontario is forum non conveniens. Even if Ontario has jurisdiction simpliciter, which I have found it does not, I conclude that Ontario is forum non conveniens. The laws of North Carolina apply and the witnesses are in the United States. There is no attornment to the unrelated Counterclaim. The attendance of experts in North Carolina will require transportation and accommodation costs in Toronto as all of the witnesses are resident in the United States. The Defendants have not spent considerable funds investigating the Counterclaim. Indeed, the Defendants have not led any evidence in support of their submissions concerning the costs of dismissing or staying the Counterclaim. The Defendants will have no difficulty in retaining an attorney in North Carolina.

[7] There is a concern over multiplicity of proceedings as the Counterclaim has already been determined in North Carolina and this means that if the Counterclaim is heard in Ontario, there is a possibility of conflicting judgments. The baked goods in issue were produced in North Carolina and consumed and sold in North Carolina. All of these factors favour North Carolina.

Disposition

[8] The motion is granted and the Counterclaim is dismissed.

[9] Costs are payable to the Plaintiff from the Defendant, inclusive of taxes and disbursements, fixed at $10,000.

Whitaker J.

Date: March 2, 2015