Court File and Parties

COURT FILE NO.: CV-18-134119 (NEWMARKET) MOTION HEARD: 2018 06 11 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Corrosion Service Company Limited v. Hydrosphere Construction Inc.

BEFORE: MASTER R.A. MUIR

COUNSEL: Samuel Bachand for the moving party/defendant Ann Hatsios for the responding party/plaintiff

Reasons for Decision

[1] This is a motion brought by the defendant pursuant to section 106 of the Courts of Justice Act, RSO 1990, c. C43 (the “CJA”). The defendant seeks an order dismissing or staying this action on the basis that this court lacks jurisdiction or pursuant to the doctrine of forum non conveniens. The defendant submits that the Province of Quebec is the appropriate jurisdiction and convenient forum for this dispute.

[2] The plaintiff is opposed. It takes the position that this court has jurisdiction based on an agreed to forum selection clause and Ontario is the appropriate and convenient venue for this claim.

[3] The basis of the court’s jurisdiction on this motion is found in section 106 of the CJA, which reads as follows:

106. A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[4] The issue of jurisdiction involves a two-step inquiry. The first question is whether the claim falls under any of the enumerated headings under Rule 17.02 of the Rules of Civil Procedure, RRO 1990, Reg. 194 (the “Rules”). See Van Breda v. Village Resorts Ltd., 2010 ONCA 84 at paragraph 109; affirmed 2012 SCC 17. If so, there is a presumption that there exists a real and substantial connection to Ontario.

[5] Once the presumption of jurisdiction is established, the burden rests on the party challenging jurisdiction to show the assumption of jurisdiction would be inappropriate. See Club Resorts Ltd. v. Van Breda, 2012 SCC 17 at paragraphs 81 and 100.

[6] This is a collection action seeking payment of invoices rendered by the plaintiff for equipment supplied to the defendant. The equipment was installed at a project undertaken by the defendant in the province of Quebec. The supply of the equipment was governed by a quotation accepted by the defendant. The quotation is silent with respect to the forum or law applicable to any disputes involving the supply of the equipment.

[7] In the summer of 2016, the plaintiff supplied certain equipment to the defendant pursuant to the quotation. It then rendered an invoice dated August 31, 2016 in the amount of $91,980.00. The invoice was paid in full by the defendant without objection. Further invoices were rendered after August 31, 2016 that have not been paid. Those further invoices are the subject matter of this action.

[8] The terms and conditions relating to the invoices rendered by the plaintiff were printed on the reverse of each invoice document. They included a forum selection clause which stated:

The invoice and these Terms and Conditions shall be governed by the laws of the Province of Ontario without regard to the choice or conflicts of law provisions of any jurisdiction, and the parties irrevocably attorn to the jurisdiction of the Courts of the Province of Ontario for the resolution of disputes.

[9] Rule 17.02(f) gives Ontario presumptive jurisdiction where the parties have agreed that the law of Ontario and/or the courts of Ontario have jurisdiction over the proceeding. There exists, therefore, a presumption in the circumstances of this action that Ontario has jurisdiction. The onus then shifts to the defendant to show that the assumption of jurisdiction by Ontario would be inappropriate in the circumstances of this dispute.

[10] I agree with the plaintiff that the defendant has failed to provide any evidence or show any reason why the forum selection clause should not be enforced. The invoice was rendered and payment was made without objection. The quotation does not contain a forum selection clause. It was only after this action was started that the defendant made an objection to the forum clause in the invoice. This is a commercial contract involving sophisticated parties with equal bargaining power. There is no suggestion of unconscionability, undue influence or fraud. The parties should be held to their bargain for the purposes of determining jurisdiction simpliciter. See Douez v. Facebook, Inc., 2017 SCC 33 at paragraphs 28 to 32. In my view, the defendant has not rebutted the presumption of jurisdiction.

[11] Once jurisdiction has been established, the analysis on this motion turns to forum non conveniens. The law relating to the stay of an action on the basis of forum non conveniens was the subject of a thorough review by the Supreme Court of Canada in Club Resorts. The following paragraphs from that decision are germane to the issues on this motion:

[103] If a defendant raises an issue of forum non conveniens, the burden is on him or her to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. The defendant must identify another forum that has an appropriate connection under the conflicts rules and that should be allowed to dispose of the action. The defendant must show, using the same analytical approach the court followed to establish the existence of a real and substantial connection with the local forum, what connections this alternative forum has with the subject matter of the litigation. Finally, the party asking for a stay on the basis of forum non conveniens must demonstrate why the proposed alternative forum should be preferred and considered to be more appropriate.

[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.

[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 burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternative forum, 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 a forum that is appropriate under the conflicts rules. 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.

[110] As I mentioned above, the factors that a court may consider in deciding whether to apply forum non conveniens may vary depending on the context and might include the locations of parties and witnesses, the cost of transferring the case to another jurisdiction or of declining the stay, the impact of a transfer on the conduct of the litigation or on related or parallel proceedings, the possibility of conflicting judgments, problems related to the recognition and enforcement of judgments, and the relative strengths of the connections of the two parties.

[12] I agree with the defendant that the courts of the Province of Quebec are clearly the most appropriate forum for the determination of this dispute. The quotation was negotiated and entered into in Quebec. The defendant is located in Quebec. The plaintiff has an office in Quebec that was responsible for the negotiation of the quotation. The underlying project is in Quebec. It appears that almost all of the witnesses from both sides of this dispute are in Quebec. The only connection this matter has to Ontario is the fact that the invoices were rendered by the plaintiff’s Ontario office. For these reasons, it is my view that the determination of this dispute in the courts of the Province of Quebec would best promote a fair and efficient dispute resolution process.

[13] The plaintiff argued that the court must only look at the statement of claim when determining the convenient forum for this dispute. It suggests the court should not consider the defendant’s proposed defence or counterclaim. I do not agree. The Supreme Court in Club Resorts stated at paragraph 109 that the court must consider all relevant concerns and factors in its forum non conveniens analysis. The defendant has refused to pay the outstanding invoices because it alleges that the equipment supplied by the plaintiff malfunctioned when it was installed. In fact, the defendant states that the equipment was still not functioning properly as of the date of this motion. The allegations by the defendant that the equipment supplied by the plaintiff is not functioning properly and is otherwise unfit for its intended purposes is what this litigation will be all about. To disregard the alleged basis for the defendant’s non-payment ignores the obvious reality of this litigation. For the reasons I have set out above, the determination of those issues clearly favours Quebec as the convenient jurisdiction.

[14] I am therefore ordering that this Ontario action is hereby permanently stayed on the basis of forum non conveniens.

[15] If the parties are unable to agree on the issue of the costs of this motion they shall provide the court with brief submissions in writing by August 17, 2018. These submissions may be sent directly to me by email.

Master R. A. Muir Date: 2018 07 18