COURT FILE NO.: CV-14-511280

MOTION HEARD: 20150326
REASONS RELEASED: 20151014

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

ANDRE SA MACHADO

Plaintiff

and

THE CATALYST CAPITAL GROUP INC.

Defendant

BEFORE: MASTER D. E. SHORT

COUNSEL: Brian A. Grosman,Q.C. and
Peter A. Simm Fax (416) 597-3396

• for the Plaintiff

Andrew Winton Fax: (416) 644-3730

• for Defendant (moving party)

RELEASED: October 14, 2015

Reasons for Decision

I. Issue

[1] This action arises out of the termination of the plaintiff’s employment for alleged cause on July 11, 2014. He sues in Ontario for wrongful dismissal and related damages.

[2] The Catalyst Capital Group Inc. ("Catalyst"), moves to stay the Plaintiff's action on the asserted basis that, relative to New York State, Ontario is a forum non conveniens.

[3] This motion, properly, does not concern the merits of the claim, rather, there are two main issues to be determined:

(i) Does the Ontario Superior Court have jurisdiction simpliciter?

(ii) If the Ontario Superior Court does have jurisdiction simpliciter, should it decline to exercise that jurisdiction on grounds of forum non conveniens and instead stay the Ontario action?

II. Nature of Business

[4] In difficult economic times a specialized type of business activity has developed often referred to as “work-outs” or “restructuring” The moving Defendant Catalyst is an entity that participates in such activities.

[5] The Chief Operating Officer of Catalyst filed an affidavit in support of this motion to stay. In part that document provides this overview of the structure of that business and the industry in which it operated [with my emphasis]:

“2. Catalyst is an independent portfolio manager that is considered a world leader in the field of investments in distressed and undervalued situations for control or influence. These are known

in the investment industry as "special situations for control". Catalyst currently has in excess of $3 billion dollars under management.

3. "Special situations," also known as "distressed investments," is the term used to describe investment opportunities where a company is considered to be under-managed, under-valued, or

poorly capitalized. The term "special situation" is also used to refer to significant corporate events such as a proxy battle, take-over or board shake-up.

4. In these cases, "special situations" investors try to find ways to find value and profit in the situation to purchase the debt or equity of the target company with the hope of making a significant gain on the investment.

5. Within the special situations investment industry, there is a small sub-group of investors who invest for control or influence. This is known as investing in "special situations for control". "Control" often refers to acquiring a sufficient amount of debt or equity to gain control or influence at the company in order to be able to provide direct operational and/or strategic guidance.

6. Once a fund acquires a control or influence position at a company, it seeks to add value through operational involvement in the targeted company by, among other things:

(a) Appointing a representative as interim CEO and other senior management;

(b) Replacing or augmenting management;

(c) Providing strategic direction and industry contacts;

(d) Establishing and executing operational turnaround plans;

(e) Managing costs through a rigorous working capital approval process; and

(f) Identifying potential add-on acquisitions.

[6] The manner in which these acquisitions are structured has a significant bearing on the matters raised in this case. The affidavit filed asserts:

7. At all times, Catalyst respects the separate legal personality of the companies in which the investment fund it manages invests. For example, if Catalyst, as the fund manager, intends to appoint a person of its choosing to a senior management role at a company, it first appoints directors, who in turn appoint the senior manager. Catalyst does not directly employ the employees of the companies in which it invests.

[7] The only named defendant in this case is presently Catalyst. The plaintiff asserts that Catalyst is liable to him for damages arising out of his termination.

[8] Against this background the initial employment documentation needs to be considered.

III. Plaintiff’s Work History

[9] The statement of claim provides a useful outline of the history of the Plaintiff’s association with Catalyst related entities, portions of which I have highlighted :

“5. In or about December 16, 2005, the Plaintiff commenced his employment with Cabovisao, a Portuguese cable company and a Catalyst owned and operated portfolio company. The Plaintiff was a Director, Board Member and Advisor of the Board of Directors of Cabovlsao, until October 2006, which was owned by Cable Satisfaction International Inc. ("CSII"), a Canadian cable company, [of] which [the] only asset was Cabovisao.

The Plaintiff was Director of the Board of CSII between September 2006 and the beginning of 2008. CSII is owned by Catalyst.

6. On or about August 12, 2008, the Plaintiff was appointed Chief Financial Officer ("CFO") of SnowBear Limited ("SnowBear"), a Catalyst owned and operated portfolio company. The Plaintiff relocated from Portugal to Guelph, Ontario, Canada, to fulfill his role as CFO of SnowBear. The Plaintiff had previously provided consulting services to SnowBear from April 23, 2008.

7. The Plaintiff was also appointed as General Manager of SnowBear in or about 2011. As General Manager of SnowBear the Plaintiff was the highest level manager/executive at company headquarters, with responsibility for the overall performance and management of the company, including Sales, Marketing, Customer Service and Operations/Manufacturing. As CFO and General Manager, the Plaintiff directly oversaw the work of six managerial employees and annual sales of approximately $20 million.

8. On or about March 29, 2012, SnowBear filed for bankruptcy and entered receivership. The Plaintiff remained in his position with SnowBear throughout the bankruptcy and receivership proceedings.”

IV. New Employment Agreement

[10] From the foregoing it is apparent the plaintiff had been active and successful in this field for a number of years. By letter dated June 4, 2012 the plaintiff was made a written offer on letterhead of Natural Markets Restaurant Corp.indicating a Toronto address and containing the following elements [my emphasis added]:

“We are pleased to make you a formal offer of employment with Natural Market Restaurants Corp. (NMRC) in the position of Senior Vice President -- Operations and Finance, effective July 1, 2012.

Terms and Conditions of Employment

Should you accept this job offer, you will be entitled to the following, beginning on your start date:

1 Your starting salary will be $[stated amount] (CDN), to be paid bi-weekly (on Friday) by direct deposit.

2. You will also be eligible to receive NMRC's health, dental, life insurance, short-term and long-term disability benefits effective immediately. NMRC pays 100% of an employee's premium for dental, vision and accidental health. However; the life insurance, short-term and long-term disability portion of this plan, is employee paid.

3. You will be entitled to (3) three weeks' vacation annually.

4. Employment period from July 1st, 2012 to June 30th, 2015.

Job Offer Acceptance

To accept this job offer:

• Sign and date in the space provided below.

• Sign and date the enclosed Confidentiality Agreement, …

• Mail or hand-deliver all of the above documents, signed and dated, to NMRC by June 8, 2012.

If you find this job offer and its conditions acceptable, we respectfully request that you sign this offer letter below.

Andre, we look forward to working with you at NMRC and we are confident that you will be able to make a significant contribution to our success.

Should you have any questions or concerns, please feel free to contact us at the number provided below.

Sincerely,

Gabriel de Alba

Chairman

Natural Market Restaurants Corp.”

V. Subsequent Transfer

[11] That offer was accepted and on or about July 1, 2012 the Plaintiff commenced employment with NMRC a company in which Catalyst had a controlling financial interest since 2010. The Plaintiff's position with NMRC was Senior Vice President-Operations and Finance. The Statement of Claim asserts:

“12. l keeping with his important role and skills as the most senior employee at Snow Bear and his role with NMRC, in or about January 2013 Catalyst requested that the Plaintiff relocate to NMRC's new head office in Irvington, New York, and assume the day-to-day operational and financial management and direction of Mrs. Green's

Management Corp. ("MGMC"), a Catalyst company, operating in the United States.”

13. As EVP Finance & Operations, the Plaintiff provided management and direction to MGMC, overseeing the work of 8 managers. His duties in this role included providing advice to the Vice Presidents and Directors of Operations, evaluating and assisting them with their financial plans and economic modeling. The Plaintiff was responsible for overseeing all fiscal and fiduciary responsibilities for NMRC, in conjunction with NMRC's Board of Directors.”

[12] With respect to this position I note particularly that it is asserted in the Claim that:

“15. On or about August 29, 2013, the Plaintiff applied for a 3 year L-1 Non-immigrant Visa (the "US Visa Application"), which was sponsored by MGMC.

16. In support of the US Visa Application, the Managing Director & Partner of Catalyst, Gabriel de Alba ("de Alba') provided a letter on or about August 2, 2013, stating that the Plaintiff had worked as a senior level executive for portfolio companies owned by Catalyst for 9 years.”

[13] The defendant ”s factum however observes that, while it is disputed whether Machado was entitled to receive relocation benefits, “it is undisputed that as part of his move from Toronto to New York, Machado was paid a "relocation allowance" of approximately US$180,000 and entered into a two-year lease of a private residence in Scarsdale, New York.”

VI. Primary Defence

[14] In this action, a key issue is whether Mr. Machado was dismissed for cause. That issue apparently turns on the question of whether the plaintiff was entitled to receive the performance bonus and benefits he received from NMRC or whether he knew, or ought to have known, that his superior was unauthorized to award him the amounts he received.

[15] It is the defendant’s evidence that the overwhelming majority of the evidence relating to that issue resides in New York. “This includes the 3 main witnesses Catalyst would need to rely upon in support of its case and the documentary evidence, which exists in New York, not Ontario.”

[16] As well the action is defended on the basis that the wrong corporate entity has been sued. To appreciate the issues in that regard a brief review of the applicable issues is appropriate.

VII. “Common Employer” Doctrine

[17] In a relatively recent pleadings motion in De Kever v. Nemato Corp., 2014 CarswellOnt 15917, Justice Perell discussed the common-employer doctrine:

[6] The legal DNA of this action is the common employment doctrine. In Downtown Eatery (1993) Ltd. v. Ontario (2001), 2001 8538 (ON CA), 54 O.R. (3d) 161 (Ont. C.A.), leave to appeal to S.C.C. refused, (2002), [2001] S.C.C.A. No. 397 (S.C.C.), the Court of Appeal described the common employment doctrine at para. 30 as follows:

30. The common employer doctrine, in its common law context, has been considered by several Canadian courts in recent years. The leading case is probably Sinclair v. Dover Engineering Services Ltd. (1987), 1987 2692 (BC SC), 11 B.C.L.R. (2d) 176 (S.C.), aff'd (1988), 1988 3358 (BC CA), 49 D.L.R. (4th) 297 (B.C.C.A.) ("Sinclair"). In that case, Sinclair, a professional engineer, held himself out to the public as an employee of Dover Engineering Services Ltd. ("Dover"). He was paid by Cyril Management Limited ("Cyril"). When Sinclair was dismissed, he sued both corporations. Wood J. held that both companies were jointly and severally liable for damages for wrongful dismissal. In reasoning that we find particularly persuasive, he said, at p. 181:

The first serious issue raised may be simply stated as one of determining with whom the plaintiff contracted for employment in January of 1973. The defendants argue that an employee can only contract for employment with a single employer and that, in this case, that single entity was obviously Dover.

I see no reason why such an inflexible notion of contract must necessarily be imposed upon the modern employment relationship. Recognizing the situation for what it was, I see no reason, in fact or in law, why both Dover and Cyril should not be regarded jointly as the plaintiff's employer. The old-fashioned notion that no man can serve two masters fails to recognize the realities of modern-day business, accounting and tax considerations.

There is nothing sinister or irregular about the apparently complex inter-corporate relationship existing between Cyril and Dover ....

As long as there exists a sufficient degree of relationship between the different legal entities who apparently compete for the role of employer, there is no reason in law or in equity why they ought not all to be regarded as one for the purpose of determining liability for obligations owed to those employees who, in effect, have served all without regard for any precise notion of to whom they were bound in contract. What will constitute a sufficient degree of relationship will depend, in each case, on the details of such relationship, including such factors as individual shareholdings, corporate shareholdings, and interlocking directorships. The essence of that relationship will be the element of common control.

[7] Recognizing the intricacies of modern business and the modern employment relationship, the common employer doctrine imposes joint and several liability for breaches of an employment contract on the legal entities who had a meaningful role to play in the employment relationship. The doctrine recognizes that an employee may have a collective as employer. [my emphasis]

[18] Clearly the definition of "employer" in this common scenario of employment termination should be one that recognizes the justification for the complexity of modern corporate structures, but does not permit that complexity to defeat the legitimate entitlements of wrongfully dismissed employees.

[19] The trial judge will have to examine the details of the employment relationship in this case but in my view that examination could be equally well performed north or south of Lake Ontario.

VIII. Forum non conveniens

[20] In this motion, Catalyst does not contest the existence of the Court's jurisdiction over the Action on the basis that Catalyst's head office is located in Ontario. Rather, what is at issue is whether the Court should exercise its jurisdiction. The distinction between the existence of jurisdiction and the exercise of jurisdiction is central to the proper application of the doctrine of forum non conveniens, which requires the Court to go beyond a strict application of the test governing recognition and assumption of jurisdiction. In this regard Catalyst asserts that the Court “retains a residual power to decline to exercise its jurisdiction in appropriate circumstances in order to assure fairness to the parties and the efficient resolution of the dispute.”

[21] Catalyst acknowledges that the burden falls upon it to show why the Court should decline to exercise its jurisdiction and displace the forum chosen by Machado. Their counsel asserts that, while the doctrine of forum non conveniens should not be invoked lightly, at the same time, the burden on the moving parties should not be overstated.

[22] It is argued that Catalyst needs only to show that a forum exists that is in a better position to dispose fairly and efficiently of the litigation than Ontario. I am not satisfied that this is the precise issue to be addressed by me.

[23] Counsel for the plaintiff argues that the moving party’s factum misstates the test and instead submits that the test, correctly stated, is that Catalyst "must establish that the alternative forum [i.e. New York State] is clearly more appropriate."

[24] Writing for the unanimous Supreme Court in Van Breda, infra, Justice LeBel stated:

108 Regarding the burden imposed on a party asking for a stay on the basis of forum non conveniens, the courts have held that the party must show that the alternative forum is clearly more appropriate. The expression "clearly more appropriate" is well established. …

109 The use of the words "clearly" and "exceptionally" should be interpreted as an acknowledgment that the normal state of affairs is that jurisdiction should be exercised once it is properly assumed. …. The court should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation. But the court must be mindful that jurisdiction may sometimes be established on a rather low threshold under the conflicts rules. Forum non conveniens may play an important role in identifying a forum that is clearly more appropriate for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute.

[25] To determine the resolution of that issue I look to several appellate level decisions for guidance.

[26] In particular, in 2008 Justice Laskin, writing for the majority, focused on these matters in Young v. Tyco International of Canada Ltd., 2008 ONCA 709, 92 O.R. (3d) 161, 300 D.L.R. (4th) 385, 69 C.C.E.L. (3d) 52. In those reasons the court set out a convenient list of factors to consider in relation to forum non conveniens in an action for breach of contract:

“[26] Decisions on forum non conveniens motions are exercises of judicial discretion. Typically, in exercising their discretion, motion judges consider a list of factors now well established in the case law. These factors are used to assess the connections to each forum. They include:

1. The location where the contract in dispute was signed;

2. The applicable law of the contract;

3. The location of witnesses, especially key witnesses;

4. The location where the bulk of the evidence will come from;

5. The jurisdiction in which the factual matters arose;

6. The residence or place of business of the parties; and

7. The loss of a legitimate juridical advantage.”

[27] In 2012, the Supreme Court of Canada addressed these issues in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572. Based on that decision the defendants identify other potential relevant factors:

(a) The location of the parties;

(b) The location where the bulk of the evidence will be from;

(c) The residence of place of business of the parties; and

(d) Problems relating to the recognition and enforcement of judgments.

[28] In Lixo Investments Ltd. v. Cowling, Lafleur, Henderson, 2014 ONCA 114, 2014 CarswellOnt 1499, the Ontario Court of Appeal recently confirmed that this list continues to be applicable :

“[7] The appellant submits that the motion judge fell into legal error by relying on the factors in Tyco instead of the more general factors set out in Van Breda v. Village Resorts Ltd., 2012 SCC 17, [2012] 1 S.C.R. 572 (S.C.C.). We do not agree. The factors he considered were consistent with the considerations set out in Van Breda as well as in the prior jurisprudence.”

[29] In Van Breda Justice LeBel identified the issue faced by those required to resolve issues such as those raised in the present case:

“105 A party applying for a stay on the basis of forum non conveniens may raise diverse facts, considerations and concerns. Despite some legislative attempts to draw up exhaustive lists, I doubt that it will ever be possible to do so. In essence, the doctrine focusses on the contexts of individual cases, and its purpose is to ensure that both parties are treated fairly and that the process for resolving their litigation is efficient….”

[30] Against that background I considered the various significant factors raised before me.

IX. Weighing Factors

The location where the contract in dispute was signed

[31] Catalyst submits the location where the contract was signed, is unclear. While Machado’s initial contract was clearly signed in Ontario, it is alleged that contract was amended by subsequent conduct of NMRC and Machado in New York. Thus they argue, location of the "contract", as amended, does not clearly weigh in favour of either jurisdiction.

[32] While I appreciate their position I am satisfied that the existence of the written document, even if orally amended elsewhere, does not support a New York venue

The applicable law of the contract

[33] Here Catalyst argues that the applicable law of the contract, weighs in favour of New York. “It is accepted law that the proper law of an employment contract will be that which the parties intended to govern it, if such an intention can be ascertained. In the absence of an express choice of the governing law, or one that can be inferred from the facts, the proper law is to be determined objectively by identifying the legal system with which the contract has the closest and most real connection.”

[34] Factors to consider include the place of employment, the residence of the employee, the head office of the employer and the location of the administrative details connected with the employment.

[35] In this regard it is submitted by the moving party:

“28. Machado claims that his employment at NMRC is governed by the laws of Ontario. Catalyst disputes this claim, as it is clear from admissions in Machado's statement of claim that he worked for over a year in New York pursuant to a contractual terms not reduced to writing before he left Ontario. During this time, New York was the place of employment, the location of Machado's residence, the location of the head office of his employer and the location of the administrative details connected with his employment. In the absence of an express choice of governing law, after he relocated to New York, Machado's employment contract with NMRC had a closer and more real connection to New York than to Ontario.

29. Thus, while it will be left to the parties to argue at trial whether Machado's employment at NMRC was governed by Ontario or New York law, for the purposes of this motion, the Court should conclude on a prima facie basis that Machado' s employment in New York was governed by the laws of New York, which weighs in favour of litigation in New York and not Ontario.

[36] I disagree. I am persuaded on this item by the plaintiff’s submission:

“At the time the contract was made, the parties had no reason whatsoever to intend that applicable law of the contract would be that of any jurisdiction other than Ontario. Specifically, there is no evidence whatsoever that, at the time the contract was made, that parties would have intended that the applicable law be that of New York State. Given that the contract was made in Ontario between an Ontario corporation and an Ontario resident and was for employment located in Ontario, the obvious inference from the facts is that the parties intended that the contract's proper law be that of the Province of Ontario. …Further, he never entered into any written employment contract with the corporation called Mrs. Green's Management Corporation.

[37] I am supported in my conclusion from the evidence supporting the argument that Machado's transfer from Ontario to New York State was expressly understood to be "temporary". Corporate materials submitted in support of a U.S. visa to be issued to Machado state that they are for a "Non-immigrant Visa Petition", and that "We seek to employ Mr. Machado in the United States as Chief Financial Officer/Chief Operating Officer for a temporary period of three years."

[38] As well I conclude from the evidence that even after being transferred to Irvington, New York, in 2013, the Plaintiff’s employment duties included performing work in Ontario from time to time at sites where entities that are ultimately owned and controlled by the Defendant have permanent business establishments. Specifically, the Plaintiffs job duties as CFO/COO of Mrs. Green's Management Corporation included visiting, in Ontario, four locations of Richtree Market Restaurants (three sites being in Toronto, at the Eaton Centre, College Park, and at Bayview & York Mills; and one site being in Mississauga, at Square One) and an Ontario location of Planet Organic Market (in Mississauga).

[39] This factor in my view favours Ontario

The location of witnesses, especially key witnesses

[40] The moving party submits that this factor points strongly towards New York as the better jurisdiction. The main allegation by Machado was that he was wrongfully terminated by NMRC based on unjustified allegations of just cause for immediate dismissal.The witnesses with knowledge of events relating to that issue are mostly located in New York, not Toronto.

Counsel for the plaintiff submits this should be regarded as a neutral factor, as Machado has identified three key witnesses who are Ontario residents, and Catalyst has identified three key witnesses who are New York State residents. It would seem that no matter where the action is tried, at least one person employed by Catalyst (or by a Catalyst-controlled company) will have to travel to another jurisdiction.

[41] The relevant case law suggests that location of witnesses is not a weighty consideration for a cross-border, sophisticated company such as Catalyst. In Young v. Tyco,supra (at para 52) Laskin J.A., writing for the majority stated:

For a cross-border, sophisticated company such as Tyco, the location of witnesses is a relevant but not a weighty consideration: [citation omitted]. No matter where the action is tried, some of Tyco's witnesses will have to travel. Moreover, because Tyco is a cross­border company, its senior executives likely all travel extensively. If the action is tried in Ontario, Tyco will no doubt arrange transportation for the three complainants. Alternatively, their testimony can be heard through live video conferencing.

[42] Because the heart of this dispute potentially turns upon the proof of “cause” for this termination I would regard this as a factor that is slightly in the moving party’s favour.

The location where the bulk of the evidence will come from

[43] Likewise, the bulk of the viva voce and documentary evidence relating to Machado's impugned bonus and benefits can be found in New York. There is little relevant viva voce or documentary evidence in Ontario that will be relevant to this key matter at issue in this Action. Thus Catalyst argues that the fourth factor also weighs heavily in favour of New York as the preferred jurisdiction.

[44] However assuming cause is not established there will be relevant and important evidence flowing from Ontario dealing with mitigation and mental distress issues.

[45] Overall I would regard this factor as slightly in the moving party’s favour.

The jurisdiction in which the factual matters arose

[46] This is a neutral factor in my view as elements fall on both sides of the border.

The residence or place of business of the parties

[47] The residence or place of business of the parties is a complicated factor. Catalyst's head office is in Toronto, but it conducts business in New York through wholly-owned subsidiaries. Assuming for the purpose of this motion that Catalyst was Machado's employer (which Catalyst steadfastly denies), Catalyst clearly conducts business in both New York and Ontario, as did Machado during the material time frame for the action.

[48] However the Defendant is a corporation established and maintained pursuant to the laws of Ontario, and its head office is in Ontario (specifically, the City of Toronto).

[49] NMRC is a corporation established and maintained pursuant to the laws of Ontario, and its “head office” is in Ontario (specifically, the City of Toronto). In particular the Corporation Profile Report for NMRC issued on March 10, 2015 by the Ontario Ministry of Government Services, officially shows that the current "Registered Office Address" of NMRC is still in Toronto, Ontario.

[50] In my view both parties have a legal residency in Ontario. An Ontario corporation is required to have an Ontario address and that address to my mind makes the corporation subject to the jurisdiction of Ontario’s courts.

[51] I am supported in this conclusion by the Supreme Court of Canada’s unanimous confirmation that the doctrine of presence-based jurisdiction continues to be in force, and that it has not been ousted by the "real and substantial connection" test. In Van Breda, supra, Justice LeBel, writing for the Court, stated:

[79]... However, jurisdiction may also be based on traditional grounds, like the defendant's presence in the jurisdiction or consent to submit to the court's jurisdiction, if they are established. The real and substantial connection test does not oust the traditional private international law bases for court jurisdiction.

[86]... [A] defendant may always be sued in a court of the jurisdiction in which he or she is domiciled or resident (in the case of a legal person, the location of its head office). [my emphasis added]

The loss of a legitimate juridical advantage

[52] For this factor I return to the above cited guidance from the Supreme Court that in essence, the doctrine focusses on the contexts of individual cases, and its purpose is to ensure that both parties are treated fairly and that the process for resolving their litigation is efficient.

[53] Based on my analysis that follows I am satisfied that the presence of an “at will” employment environment in New York State is an important factor to consider in determining where a terminated employee should be entitled to commence a wrongful dismissal action.

X. Further Analysis

[54] I accept the plaintiff’s argument that for purposes of determining both jurisdiction simpliciter and forum non conveniens, the Plaintiffs version of the facts should be accepted, even if that conflicts with the Defendant's version. Writing for the unanimous Ontario Court of Appeal in Wolfe v. Wyeth, 2011 ONCA 347,332 D.L.R. (4th), Justice Goudge stated:

[46] In assessing this issue where there are factual matters in dispute, the plaintiffs' version of the facts should be accepted as long as it has a reasonable basis in the record. I agree with the reasoning of my colleague Laskin J.A. in Young v. Tyco International of Canada Ltd. (2008), 2008 ONCA 709, 92 O.R. (3d) 161, 300 D.L.R. (4th) 385 (Ont. C.A.).While he was speaking of the forum non conveniens analysis, the same logic applies to jurisdiction simpliciter. At para. 34 he said this:

However, the important point is that at this preliminary stage of the action, the motion judge's assessment and weighing of the forum non conveniens factors should be based on the plaintiff's claim if it has a reasonable basis in the record, not on the defendant's defence to that claim. This approach makes sense to me because the ultimate question is whether an Ontario court should take jurisdiction over the plaintiff's claim.

[55] I find the somewhat parallel situation in Young v. Tyco International of Canada Ltd. et al., supra, provides very helpful guidance on these matters. There Justice Laskin clearly defines the elements to consider in this type of case with reference to the Supreme Court’s decision in Amchem Products Inc. v. British Columbia (Workers' Compensation Board), 1993 124 (SCC), [1993] 1 S.C.R. 897, [1993] S.C.J. No. 34, 102 D.L.R. (4th) 96, 150 N.R. 321, [1993] 3 W.W.R. 441, J.E. 93-674, 23 B.C.A.C. 1, 77 B.C.L.R. (2d) 62, 14 C.P.C. (3d) 1, 39 A.C.W.S. (3d) 600:

[22] As in many American states, in Indiana an employer may terminate an employee "at will"-without severance or termination pay-even absent cause.

[56] Once Young's version of his employment in Indiana grounds the forum non conveniens analysis [i.e. once it is assumed that an Ontario contract governed Young's work in Indiana], his decision to sue Tyco in Ontario can no longer be characterized as forum shopping. Instead, in my view, were Young obliged to sue in Indiana, he would lose legitimate juridical advantages available in Ontario.

[57] The difference between forum shopping and legitimate juridical advantage turns on the parties' connections to the jurisdiction in question. Sopinka J. explained this difference in Amchem, at para. 32:

The weight to be given to juridical advantage is very much a function of the parties' connection to the particular jurisdiction in question. If a party seeks out a jurisdiction simply to gain a juridical advantage rather than by reason of a real and substantial connection of the case to the jurisdiction, that is ordinarily condemned as "forum shopping". On the other hand, a party whose case has a real and substantial connection with a forum has a legitimate claim to the advantages that that forum provides. The legitimacy of this claim is based on a reasonable expectation that in the event of litigation arising out of the transaction in question, those advantages will be available.

[58] If, as I have concluded, Young's October 2004 agreement should direct the forum non conveniens analysis, then the connections to Ontario are strong: Young resides there; two of the defendants reside there; some important witnesses reside there; the agreement was made there; and Ontario law applies to the agreement.

[59] Young, therefore, may legitimately claim the juridical advantages available in Ontario. There are two. First, Young will benefit from courts who are accustomed to applying Ontario's wrongful dismissal law. As Indiana is an "at will" state, its courts are accustomed to quite a different employment law regime.

[60] Under Ontario law, absent just cause for dismissal, employees hired for an indefinite term, as Young was, are entitled to reasonable notice of termination or pay in lieu. Under Indiana law, employees may be dismissed at will -- employers have no obligation to give notice or pay termination pay: see Hodnett v. Taylor Manufacturing Industries Inc., 2002 49503 (S.C.J.), at para. 36. Of course, even if Young's action takes place in Indiana, he may still plead that Ontario law applies. However, litigating in a jurisdiction where judges routinely award damages equivalent to reasonable notice would give Young a juridical advantage.

[61] The second juridical advantage for Young is that suing in Ontario enhances his practical ability to pursue his claim. Access to justice may be an important consideration bearing on juridical advantage. Forum non conveniens analysis is as much about fairness and justice as it is about convenience and efficiency. In this case, there is an obvious power imbalance between Young and Tyco. Forcing Young to litigate in Indiana rather than his home jurisdiction would represent a serious loss of a legitimate juridical advantage. Conversely, because Tyco is a cross-border company, litigating in Ontario does not raise any serious access-to-justice concerns for it.

[62] On my assessment, three of the forum non conveniens factors favour Ontario, and the remaining four are neutral. This assessment points to Ontario as the appropriate jurisdiction to entertain Young's action. Put differently, this assessment shows that Indiana is not clearly the more appropriate forum. [my emphasis throughout]

[56] In its submissions the Defendant relied upon another similar fact situation heard in another case before the Ontario courts where an employee working in New York attempted to litigate a wrongful dismissal action in Ontario. In Sullivan v. Four Seasons Hotels Limited, 229 A.C.W.S. (3d) 706; 18 B.L.R. (5th) 115;2013 ONSC 4622, 116 O.R. (3d) 365; 2013 CarswellOnt 9809 the plaintiff, who was transferred from employment in Ontario to New York, sued the defendant for wrongful dismissal in Ontario. In that case, the factors were reviewed an applied in a similar fashion as the analysis above. After weighing the factors, the justice hearing the motion concluded that the defendant had successfully demonstrated that the Court should decline to exercise jurisdiction over the action in favour of an action in New York. In its factum Catalyst submits:

“41. The current case is directly on point with the Sullivan case. In both cases, an employee was transferred from Ontario to New York. The employee's contract was terminated while they resided in New York, with their conduct while employed in New York being the key issue in dispute. A majority of key witnesses and the bulk of the evidence reside in New York.

42. While Sullivan is not binding, in the absence of distinguishing facts, it is very persuasive. The Court should follow the precedent set in Sullivan and grant a stay of the Action in favour of litigation in New York.”

[57] Counsel for the plaintiff responds;

“With respect, Sullivan should not be followed because it was rendered per incuriam, as the Court's analysis of witness location and of juridical advantage did not address the Ontario Court of Appeal's decision in Young v. Tyco (2008), a highly pertinent authority that would have compelled a different analysis.”

[58] My reading of the reasons in Sullivan indicates the court was aware of Tyco. Nevertheless I note that the judge specifically found that “in the particular and unique circumstances of this case, the Ontario courts do have jurisdiction simpliciter to hear this litigation.”

[59] In the particular and unique circumstances of the case before me, I find that the Ontario courts do have jurisdiction simpliciter to hear this litigation and that the forum non conveniens motion fails.”

XI. Disposition

[60] Because the Defendant's registered head office is located in Ontario, an Ontario court has "presence-based" jurisdiction over the Defendant. Ontario thus has jurisdiction simpliciter, and it is not necessary to apply the "real and substantial connection" test to extend "assumed jurisdiction" over the Defendant. If I am wrong in this conclusion, it is my view that Ontario's jurisdiction simpliciter is established because the action does have a real and substantial connection with Ontario.

[61] In the result,for the above reasons I am dismissing the motion of The Catalyst Capital Group Inc. ("Catalyst"), to stay this action. I am not convinced that in this case, relative to New York State, Ontario is a forum non conveniens.

[62] In the circumstances I am awarding costs of the motion to the plaintiff on a partial indemnity basis ,payable within 30 days

[63] I would be remiss if I did not acknowledge the skilled, and helpful advocacy from counsel on both sides on this motion.

R.118 /DS __________________

Master D.E. Short