CIBC FirstCaribbean v. Glasford, 2015 ONSC 197

COURT FILE NO.: CV-14-503513

DATE: 20150108

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CANADIAN IMPERIAL BANK OF COMMERCE and CIBC FIRSTCARIBBEAN INTERNATIONAL BANK (BARBADOS) LTD, Defendants/Moving Party

AND:

BROWNEN GLASFORD and KAREEM O. GLASFORD a.k.a. KAREEM VINTON, Plaintiffs/Responding Party

BEFORE: Carole J. Brown J.

COUNSEL: Kareem Vinton, appearing in person

Runatio Gregg, for the plaintiff, Brownen Glasford

Bryon Shaw, for the Defendants

HEARD: December 19, 2014

ENDORSEMENT

[1] The defendants, Canadian Imperial Bank of Commerce (“CIBC”) and FirstCaribbean International Bank (Barbados) Limited (“FirstCaribbean”) move to dismiss or permanently stay this action on the basis that the court has no jurisdiction or, alternatively, that Ontario is forum non conveniens. The plaintiffs, Bronwen Glasford and Kareem Vinton oppose this motion and counter-move for an anti-suit injunction restraining FirstCaribbean from commencing or continuing proceedings in any jurisdiction other than Ontario.

[2] The plaintiff’s action concerns an equitable mortgage made on the island of St. Kitts in the West Indies between the plaintiffs and the defendant, FirstCaribbean, to finance the construction of a house on a St. Kitts property registered to Brownen Glasford, a resident of Barbados.

[3] The plaintiffs have already commenced actions in St. Kitts concerning the mortgage agreement and the property. The first action, commenced in 2011 as a summary judgment application, claimed “damages with interest for breach of contract for the Defendant’s paying out of account monies owed by the Claimants, without due authorization.” It was struck in its entirety by Thomas J. of the High Court in St. Kitts. In the second action, commenced in 2012, the plaintiffs’ statement of claim listed numerous causes of action, including fraudulent misrepresentation, negligence, conspiracy, procuring breach of contract, breach of fiduciary duty, and breach of confidence. This action has been ordered to proceed to trial by the St. Kitts High Court in 2015.

[4] The defendant, FirstCaribbean, has also commenced an action in St. Kitts. It has initiated mortgage realization proceedings in St. Kitts due to the plaintiffs’ alleged default. It has seized the St. Kitts property, which remains to be sold at a date to be fixed by the registrar of the St. Kitts High Court.

[5] In the plaintiff’s Ontario action, the statement of claim alleges fraudulent misrepresentation, breach of collateral warranty, and breach of fiduciary duty. The underlying facts in the Ontario action overlap significantly with those in the two St. Kitts actions brought by the plaintiffs, namely, the unauthorized withdrawal of the plaintiff’s funds from FirstCaribbean accounts.

[6] For the reasons that follow, the plaintiffs’ Ontario action is dismissed on the basis that this Court does not have jurisdiction over this matter, and even if it did, Ontario is forum non conveniens. Likewise, the plaintiff’s counter-motion is dismissed as Ontario is not the clearly more appropriate forum for hearing this dispute.

The Parties

[7] The plaintiff Dr. Bronwen Glasford was born in St. Kitts and resides in Barbados and/or St. Kitts. According to the plaintiff’s statement of claim in this action, Dr. Glasford operates a private medical practice in Barbados. In the two St. Kitts actions, she is described as a medical doctor “of Frigate Bay, St. Kitts, presently residing… in the island of Barbados.”

[8] The plaintiff, Kareem Glasford a.k.a. Kareem Vinton is Dr. Glasford’s son. Mr. Vinton was born in Canada and is a Canadian Citizen. Mr. Vinton resides in Toronto, Ontario. He also resides (or has resided) in the United Kingdom in London. In the St. Kitts actions, the plaintiffs’ statement of claim describes Mr. Vinton as “of Frigate Bay, St. Kitts, presently residing at… 115 Lever Street, London, United Kingdom”.

[9] FirstCaribbean is a bank incorporated pursuant to the laws of Barbados. It is registered to carry on business in St. Kitts, where it maintains offices. It also has a branch office in Charlestown, on the island of Nevis. CIBC is a Canadian chartered bank and the majority shareholder of FirstCaribbean. It had no involvement with any of the events giving rise to this claim. The plaintiffs have agreed to discontinue the action as against CIBC and provide to the defendants a Notice of Discontinuance.

The Mortgage Agreement

[10] Both the St. Kitts actions and the Ontario action arise from an equitable mortgage agreement made in 2005 between both plaintiffs and FirstCaribbean. The parties entered into a mortgage loan agreement on January 18, 2005. The mortgage was created by the deposit of the Certificate of Title. The plaintiffs signed a memorandum of deposit on March 22, 2005. Further financing was made by FirstCaribbean to the plaintiffs on August 31, 2006, October 9, 2007, April 7, 2008, and August 12, 2008. To clarify the status of each of the plaintiff mortgagors, Dr. Glasford is the owner of the St. Kitts property. She is registered on title. Mr. Vinton is referred to as a “second borrower” or “second mortgagor” in the memorandum of deposit.

[11] Generally, the factual matrix of the dispute concerns events that took place in the Caribbean, such as conversations and “special meetings” in St. Kitts and Barbados leading up to the execution of the Agreement.

[12] The Agreement and the further financing agreements were sent to the plaintiffs at Dr. Glasford’s residence in Christ Church, Barbados. Pursuant to the documents, acceptance was to be indicated by returning a signed copy of the Agreement to FirstCaribbean, failing which the Agreement would be void. The Plaintiffs signed copies of the Agreement and returned them to FirstCaribbean. Dr. Glasford signed the Agreement and returned it to FirstCaribbean’s office in Barbados, which forwarded it on to FirstCaribbean’s office in St. Kitts. Mr. Vinton signed his copy of the Agreement in Toronto and returned it to FirstCaribbean’s office in St. Kitts. All funding pursuant to the Agreement was deposited into the plaintiffs’ joint account at FirstCaribbean’s offices in St. Kitts.

The Issues

[13] The issues on this motion are

1. Whether Ontario has jurisdiction over the subject matter of the action; and

2. Whether Ontario is forum non conveniens.

The Law and Analysis

Relevant Statutory Provisions

[14] Pursuant to section 106 of the Courts of Justice Act, the Court may, on its own initiative or on motion by any person, whether or not a party, stay any proceeding in the court on such terms as are considered just.

[15] Rule 21.01 (3) of the Rules of Civil Procedure provides that a defendant may move before a judge to have an action stayed or dismissed on the ground, inter alia, that

(a) the court has no jurisdiction over the subject matter of the action… or

(b) another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter.

Real and Substantial Connection Test

[16] Absent any of the traditional categories justifying the assumption of jurisdiction, for this Court to assume jurisdiction there must be a real and substantial connection between Ontario, the subject matter of the litigation and the defendant: Club Resorts Ltd. v. Van Breda, 2012 SCC 17 at 26, 99. The party arguing that the Court should assume jurisdiction bears the burden of showing that there is a presumptive connecting factor linking the subject matter of the litigation to the forum. In this case, that burden rests with the plaintiffs.

[17] The presence of one or more of the plaintiffs in Ontario is not, on its own, a connecting factor sufficient for a court to assume jurisdiction: Van Breda, supra at para. 86. The plaintiffs must establish the existence of one or more of the established factors (such as those listed by the Supreme Court in Van Breda), or argue for a new presumptive connecting factor. If the plaintiffs succeed, the burden shifts to the defendants to rebut the presumption of jurisdiction by demonstrating that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or that it points only to a weak relationship: Van Breda, supra at para. 95.

[18] The Supreme Court, in Van Breda, supra at para. 90 identified the following non-exhaustive presumptive connecting factors for tort:

(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) the contract connected with the dispute was made in the province.

To some extent, they are also applicable to breach of contract. (However, neither party made submissions on new or better presumptive connecting factors for contract. Thus, only those discussed in Van Breda will be considered.)

Place of Contract

[19] Dr. Glasford and Mr. Vinton submit that the Agreement was made in Ontario. Mr. Vinton signed the Agreement in Ontario and was the last party to do so. According to the plaintiffs, this is a sufficient connecting factor for a court to assume jurisdiction. The defendants disagree. First, they submit that the Agreement was not made in Ontario. Although Mr. Vinton was the last party to sign and did so in Ontario, a contract is formed in the place where the offeror receives acceptance, which in this case was St. Kitts. According to the defendants, the residence of Mr. Vinton and the place where he signed the Agreement is irrelevant.

[20] The defendants, however, overlook the postal acceptance rule. As Ritchie J. stated in Imperial Life Assurance Co. v. Colmenares, 1967 CanLII 7 (SCC), [1967] S.C.R. 443 (S.C.C.) at p. 447:

It has long been recognized that when contracts are to be concluded by post the place of mailing the acceptance is to be treated as the place where the contract was made.

[21] Mr. Vinton did not send acceptance by facsimile or email or telephone. He mailed his acceptance of FirstCaribbean’s offer as required by FirstCaribbean. This is not disputed by the defendants. Because a contract is made in the jurisdiction where the last act essential for its formation takes place, the Agreement in this case was made in Ontario.

[22] Of course, the place the contract is made (according to traditional rules) will, in some cases, be fortuitous and not strongly connected to the transaction or the dispute from which it arises. As the Court of Appeal noted in obiter in Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2014 ONCA 497,

[T]he arbitrary common law rules for determining the place of a contract may not always be apposite in jurisdictional cases. The traditional contract placement rules respond to concerns that are different from those engaged by a jurisdictional analysis. A broader, more contextual analysis is required, which would inevitably engage the same considerations as the real and substantial connection test itself.

[23] Regardless of whether jurisdictional problems warrant a more flexible approach to the place of contract, in this case I find that the defendants have successfully rebutted the presumptive connecting factor identified by the plaintiffs. The overarching question under Van Breda is whether there is a sufficient relationship between “the subject matter of the litigant and the forum such that it would be reasonable to expect that the defendant would be called to answer legal proceedings in that forum” supra at para. 92.

[24] In this case, FirstCaribbean is neither domiciled nor resident in Ontario, carries on no business in Ontario and is not alleged to have committed wrongdoing in Ontario. Moreover, the common thread running through the plaintiff`s allegations in tort and contract is the withdrawal of monies paid out by a St. Kitts bank pursuant to a mortgage loan agreement negotiated in St. Kitts and Barbados and secured on property located in St Kitts owned by a St. Kitts resident.

[25] Thus, the place where the contract was made points only to a weak relationship between the subject matter of the litigation and the forum.

Place of Fraudulent Misrepresentation

[26] It is necessary to briefly comment on the plaintiffs’ submission that the defendants committed the tort of fraudulent misrepresentation in Ontario. In their statement of claim in the Ontario Action, the plaintiffs allege that they were induced by a representative of the defendant, FirstCaribbean into signing the Agreement. The representative, according to the plaintiffs, made misrepresentations during a meeting that took place in St. Kitts regarding how funds would be withdrawn from their account and whether commitment fees paid to CIBC Barbados would be transferred to CIBC St. Kitts. In their factum, the plaintiffs submit that these representations were “received and relied on in Ontario” insofar as they were reduced to writing and sent to Mr. Vinton in Ontario. Although he was present at the St. Kitts meeting, Mr. Vinton submits that he relied on these misrepresentations in Ontario when signing the memorandum of deposit of title to complete the equitable mortgage. This is why Mr. Vinton submits that the memorandum of deposit lay at the center of his action for fraudulent misrepresentation.

[27] Without commenting on the merit of this claim, torts involving the transmission of information are held to occur in the place the information is received: C.B. Distribution Inc. v. BCB International Inc., 2003 CarswellOnt 1529, [2003] O.J. No. 1583 at paras. 13-14. In this case, the plaintiffs received the representations at the meeting in St. Kitts. Whether those representations were subsequently written down and then sent to Mr. Vinton in Ontario is irrelevant.

Breach of Collateral Warranty & Fiduciary Duty

[28] The plaintiffs also allege in their statement of claim in the Ontario Action that the defendants breached a collateral warranty made through representations that induced Mr. Vinton to sign the Agreement. The grounds for this alleged breach are largely the same as those given for the alleged breach of contract—namely, unauthorized withdrawal of funds from the plaintiff’s account with FirstCaribbean. It is unclear, however, where the collateral warranty was made, if it was made at all. Accordingly, this cannot be considered a presumptive connecting factor. The same applies for the plaintiffs’ sparse submissions on breach of fiduciary duty by representatives of FirstCaribbean.

[29] Thus, I find that the plaintiffs have not established a real and substantial connection necessary to permit this Court to assume jurisdiction. The plaintiffs have not argued for any new presumptive factors based on the formula set out in Van Breda, supra at para. 91.

Forum Non Conveniens

[30] Even if I had found that this Court has jurisdiction, I would decline to exercise it insofar as the defendant has shown that there is a real and substantial connection with another forum that is more appropriate for the dispute: Van Breda, supra at paras. 103 and 108-109. In Van Breda, the Supreme Court provided a list of considerations and factors to be balanced in determining forum non conveniens. The Supreme Court recognized that these factors did not comprise an exhaustive list.

[31] In the circumstances of this case, in considering whether Ontario is forum non conveniens, I have considered that the subject matter of this action and the events giving rise to the transactions and the claim occurred in St. Kitts; that the witnesses, other than Mr. Vinton, reside in the Caribbean region and relevant documentation is located there; that the law of St. Kitts is applicable; that there are ongoing proceedings in St. Kitts regarding this same subject matter, one of which is to be tried in 2015. I acknowledge that the statements of claim in the St. Kitts action differ slightly from the Ontario action. This difference, however, is not enough to change the jurisdictional analysis.

[32] Furthermore, I have considered that were Ontario to take jurisdiction, there would be a risk of duplicative and inconsistent findings with those of the High Court of St. Kitts.

Plaintiffs’ Request for Equitable Relief

[33] The plaintiffs submit that the Court should exercise its equitable jurisdiction to deny the defendants’ motion on the basis that the defendants do not come with clean hands. The plaintiffs misunderstand the nature of equity and the availability of equitable relief.

[34] The plaintiffs are correct that this Court has statutory jurisdiction to apply pursuant to section 96 of the Courts of Justice Act R.S.O. 1990, c. C.43, to administer concurrently all rules of equity and common law. As a Superior Court, it also has inherent equitable jurisdiction arising from the Constitution.

[35] Be this as it may, this Court cannot exercise its equitable jurisdiction arbitrarily—the doctrines and maxims of equity must guide judges in a principled manner. Although equitable doctrines, such as the “clean hands” doctrine cited by the plaintiffs are flexible, they are still limited in scope. A given doctrine will not be available with respect to every set of facts. As the Privy Council stated in Maine & New Brunswick Electric Power Co. v. Hart, (1929) 1929 CanLII 546 (UK JCPC), A.C. 631, at para 24, “In order to invoke a rule of equity, it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as for example, the non-performance of a contract of which equity can give specific performance”.

[36] Contrary to the plaintiffs’ submissions, the doctrine of clean hands does not apply to the issue raised on this motion. The doctrine permits courts to exercise discretion to dismiss a claim in equity where the claimant’s conduct involves bad faith. The maxim “he who comes into equity must come with clean hands” operates against a party to deny equitable relief that would otherwise be available: Bolianatz Estate v. Simon 2006 SKCA 16, [2006] S.K. No. 64, 264 D.L.R. (4th) 58 at para. 49 (Sask C.A.), leave to appeal refused [2006] S.C.C.A. No. 222 (S.C.C.). On this motion, the defendants seek statutory relief under the Courts of Justice Act. They do not rely on equity for an order dismissing the plaintiffs’ Ontario action. The fact that the dispute between FirstCaribbean and Dr. Glasford and Mr. Vinton involves an equitable mortgage does not change this. For these reasons, I have not given effect to the plaintiff’s request that the Court dismiss the motion on equitable grounds.

[37] I am satisfied on the basis of all of the foregoing that there is no real and substantial connection between the subject matter of this action and Ontario, and that the High Court of St. Kitts is clearly the more appropriate forum. Accordingly, I allow the defendants’ motion and order that the action in court file number CV-14-503513 be dismissed, forthwith.

The Plaintiffs' Cross-Motion

[38] The plaintiffs have also brought a cross-motion for an injunction restraining FirstCaribbean from commencing or continuing in any jurisdiction other than Ontario, any proceedings arising from the contract referred to in the pleadings or from the charge referred to in the pleadings and for an injunction restraining FirstCaribbean from continuing against Dr. Glasford the proceedings it has commenced in St. Kitts.

[39] A Canadian court will grant an anti-suit injunction only where the moving party has established that the Canadian court is clearly a more appropriate forum for hearing the dispute than the foreign court, and the responding party will not be unjustly deprived of personal or juridical advantages in the foreign court: see two-step test in Amchem Products Incorporated v. British Columbia (Workers' Compensation Board), 1993 CanLII 124 (SCC), [1993] 1 S.C.R. 897, 102 D.L.R. (4th) 96. While it is preferable that the moving party seek a stay in the foreign jurisdiction, this is not strictly necessary: Hudon v. Geos Language Corp., 1997 CanLII 16250 (ON SC), 34 O.R. (3d) 14; [1997] O.J. No 2245.

[40] In this case, I have found that St. Kitts is the clearly more appropriate forum for hearing the dispute. Further, were such an injunction to issue, FirstCaribbean would be deprived of its statutory right to realize on its security over the real property located in St. Kitts. In all of the circumstances, I am of the view that Ontario is not the more appropriate jurisdiction for the subject matter of these actions. I dismiss the plaintiffs’ cross-motion for an anti-suit injunction.

Costs

[41] I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.

Carole J. Brown, J.

Date: January 8, 2015