COURT FILE NO.: CV-19-00622142-0000
DATE: 20221121
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Marcia Angela Rose, plaintiff
-and-
Carnival Corporation o/a Carnival Cruise Lines, John Doe Company, and John Doe Contracting Company, defendants
BEFORE: Robert Centa J.
COUNSEL: Bronwyn Martin, for the plaintiff
Maryam Shahid, for the defendant, Carnival Corporation
HEARD: November 15, 2022
ENDORSEMENT
[1] In June 2017, Marcia Rose booked a cruise on Carnival Cruise Lines. The cruise departed Miami, Florida, toured the Western Caribbean, and then returned to Miami, where the cruise concluded. On February 3, 2020, Ms. Rose purported to serve Carnival with a statement of claim issued in this proceeding. Carnival moves for an order staying or dismissing the action against it on the basis of the contract’s forum selection clause, which confers exclusive jurisdiction on the courts in Florida.
[2] The precise forum selection clause at issue in this case was upheld by the Court of Appeal for Ontario: Allen v. Carnival Corporation, 2007 CanLII 55701 (Ont. S.C.) (“Allen (Ont. S.C.)”), aff’d 2008 ONCA 57 (“Allen (ONCA)”). Those decisions found the forum selection clause to be reasonable and fair. I agree. There is nothing in the subsequent decisions of Douez v. Facebook, Inc., 2017 SCC 33, [2017] 1 S.C.R. 751, or Uber Technologies Inc. v. Heller, 2020 SCC 16, 447 D.L.R. (4th) 179, that justifies declining to apply the forum selection clause. I, therefore, grant Carnival’s motion and stay the proceeding against it.
Facts
[3] Ms. Rose is an Ontario resident. On June 7, 2017, she placed a telephone call directly with Carnival and booked a cruise that would sail a round trip from Miami between June 17 and 24, 2017. After the telephone call, Carnival sent Ms. Rose a booking confirmation email that provided her with a link to the cruise ticket contract. Carnival’s email message emphasized to Ms. Rose the importance of reading and understanding the terms and conditions of the contract, including the proper forum in which any claim she might wish to make must be brought:
Your booking is subject to the terms and conditions set forth in Carnival's Cruise Ticket Contract. You can access the Cruise Ticket Contract through www.carnival.com/bookedguest. It is important for you to read the Cruise Ticket Contract and become acquainted with the specific conditions and limitations of your cruise, including time limitations and the proper venue in which to file suit. You can also view a copy of the Cruise Ticket Contract in Carnival's website (www.carnival.com) under the Customer Service section.
[4] On June 14, 2017, Ms. Rose completed her on-line check-in process, which requires passengers to scroll through and then accept all of the terms and conditions of the contract. Ms. Rose admits that she accepted the terms and conditions of the contract.
[5] The very first words of the ticket contract direct the reader’s attention to the clauses of the contract that contain important limitations on the rights of passengers to assert claims against Carnival, including forum selection:
TICKET CONTRACT
IMPORTANT NOTICE TO GUESTS: THIS DOCUMENT IS A LEGALLY BINDING CONTRACT ISSUED BY CARNIVAL CRUISE LINE TO, AND ACCEPTED BY, GUEST SUBJECT TO THE IMPORTANT TERMS AND CONDITIONS APPEARING BELOW.
NOTICE: THE ATTENTION OF GUEST IS ESPECIALLY DIRECTED TO CLAUSES 1, 4, AND 11 THROUGH 14, WHICH CONTAIN IMPORTANT LIMITATIONS ON THE RIGHTS OF GUESTS TO ASSERT CLAIMS AGAINST CARNIVAL CRUISE LINE, THE VESSEL, THEIR AGENTS AND EMPLOYEES, AND OTHERS, INCLUDING FORUM SELECTION, CHOICE OF LAW, ARBITRATION AND WAIVER OF JURY TRIAL FOR CERTAIN CLAIMS.
IMPORTANT TERMS AND CONDITIONS OF CONTRACT –
READ CAREFULLY!
[6] The contract contained a forum selection clause in favour of the courts of Florida. Paragraph 13(c) of the contract provided as follows:
- JURISDICTION, VENUE, ARBITRATION, TIME LIMITS FOR CLAIMS AND GOVERNING LAW
(c) Except as provided in Clause 13 (d) below,[^1] it is agreed by and between the Guest and Carnival that all disputes and matters whatsoever arising under, in connection with or incident to this Contract or the Guest's cruise, including travel to and from the vessel, shall be litigated, if at all, before the United States District Court for the Southern District of Florida in Miami, or as to those lawsuits to which the Federal Courts of the United States lack subject matter jurisdiction, before a court located in Miami-Dade County, Florida, U.S.A. to the exclusion of the Courts of any other county, state or country.
[7] On June 18, 2019, Ms. Rose issued a statement of claim in the Ontario Superior Court of Justice. Ms. Rose named Carnival and two John Doe corporations as defendants. She claimed $1 million in “general and special damages for pain and suffering and loss of enjoyment and life and loss of the amenities of life and past and future loss of income.” She pleaded and relied on the Ontario Occupiers’ Liability Act, R.S.O. 1990, c. O.2. and the Ontario Negligence Act, R.S.O. 1990, c. N.1. Ms. Rose alleged that:
On or about June 18, 2017, [Ms. Rose] was attending an event on the Cruise Ship. As she attempted to sit down in a booth, the booth tipped causing her to slip (the "incident"). As a result of the incident, [she] suffered severe end lasting personal injuries and impairments as hereinafter described.
[8] Ms. Rose pleaded that she was permitted to serve the claim on the defendant outside Ontario pursuant to rule 17.02(h) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:
The Defendant, Enterprise [sic] is a corporation located outside of the Province of Ontario. The Rules of Civil Procedure, Rule 17.02(h) states that a claim may be served outside Ontario without a court order to make a claim against the party in respect of damage sustained in Ontario arising from tort. Rule 17.04 (1) states that an originating process served outside Ontario without leave shall disclose the facts and specifically refer to the provision of rule 17.02 relied on in support of such service. The Plaintiff will rely on these rules in pursuit of a claim.
[9] On February 3, 2020, Ms. Rose’s counsel purported to serve Carnival with a statement of claim at its head offices in Miami.
The forum selection clause should be enforced
[10] Forum selection clauses are commonly used and regularly enforced: Douez, at para. 24. Forum selection clauses serve a valuable purpose. They are generally to be encouraged by the courts as they create certainty and security in transaction, derivatives of order and fairness, which are critical components of private international law: Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, at para. 20; Douez, at para. 24.
[11] I find that the forum selection clause contained in clause 13(c) of the contact is exclusive, rather than permissive. Clause 13(c) confers jurisdiction for all disputes on the courts of Florida, “to the exclusion” of any other court in the world. This is precisely the type of clear and express language required to confer exclusive jurisdiction: Sleep Number Corporation v. Maher Sign Products Inc., 2020 ONCA 95, at para. 7; Old North State Brewing Company, Inc. v. Newlands Services Inc. (1998), 1998 CanLII 6512 (BC CA), 58 B.C.L.R. (3d) 144 (C.A.), at para. 35.
[12] I must apply a two-step approach to determine whether or not to enforce the forum selection clause. The correct approach is set out in Pompey, as modified by the court in Douez, which takes into account the consumer perspective.
Step One: The clause is valid, clear, and enforceable
[13] First, Carnival has the onus to establish that the clause is valid, clear, and enforceable and that it applies to the cause of action before the court. At this step, I apply the principles of contract law to determine the validity of the forum selection clause. Ms. Rose may resist the enforceability of the contract by raising the usual defences to a contract, such as unconscionability, undue influence, or fraud.
[14] Subject to Ms. Rose’s defences, I find that the forum selection clause is valid, clear, and enforceable. The identical clause was upheld by the Court of Appeal for Ontario in Allen (ONCA). I am bound by that determination, and, in any event, I completely agree with it.
[15] Ms. Rose submits that the clause is unconscionable because: there was an inequality of bargaining power between Ms. Rose (an individual) and Carnival (a global cruise line); the forum selection clause was part of a contract of adhesion; the plaintiff did not receive the contract until after she purchased her tickets; and there is no evidence that Ms. Rose was told about the contract until she commenced her action. She also submits that she would be unduly disadvantaged by the forum selection clause and that Carnival benefits from the clause. Ms. Rose cites that she would have to incur the costs of litigating in Florida and that the action would be statute barred under the contract. I do not agree with Ms. Rose’s submissions.
[16] As noted, the Court of Appeal has already enforced this forum selection clause in Allen (ONCA), even though it was a contract of adhesion. In that case, Ms. Allen fell while on a cruise ship owned and operated by Carnival. Ms. Allen brought an action in Ontario for injuries she sustained on the cruise. She served the respondent in Miami, Florida, pursuant to rule 17.02(h). Glass J. stayed the action and held as follows:
[10] A forum selection clause that is reasonable and fair is one that courts will uphold. In this case, the ticket for the cruise was sent to the Plaintiff by way of her agent six weeks prior to sailing. That agent was a family member. The ticket must be signed or the person is not allowed to board the ship. It is apparent that the Plaintiff received the ticket and that she signed the contract. She claims that she did not know the contents of a multiple-page document. There is no suggestion that the Plaintiff was not competent to read and understand the document. She must take some responsibility for her actions in signing the contract. She knew before the expiry of one year from the date of the accident that the contract provided for proceedings to be undertaken in Florida. Her lawyer attempted to negotiate a settlement without success and then tried to arrange for an attorney from Florida to co-counsel an action there. He could not get an attorney to agree to take on the action. The one-year limitation period expired so that the only other avenue to attempt was this action in Ontario.
[11] The Plaintiff was not in an unreasonable position having to sue in Florida because she signed the contract with the opportunity to turn it down and not go on the cruise. She must take on responsibility for signing the document. It is not good enough after the vacation to claim that it is a hardship.
[12] This forum selection clause allows the Defendant to carry on its business in an orderly manner. It conducts its business in Florida transporting people from around the world. Although such a contract provision is designed for a streamlined method of doing business for the Defendant, I do not find that the clause is unreasonable. There is no suggestion that it is designed to create a trap or an impossible position for the traveling public. The customers have notice in advance to agree to the terms or forget about taking the cruise. Further, if the Plaintiff had commenced her action early in the one-year time period in Ontario seeking permission to serve the statement of claim outside Ontario pursuant to Rule 17.02 and if she had got the same result as she is now, she would have still had a chance to commence an action in Florida. She did not.
[13] The Defendant employs people from around the globe. They come to Florida to board and leave ships of the Defendant. That is the focal point for the Defendant cruise line. It makes sense that the company would include a provision in its contracts to conduct court proceedings in that jurisdiction as well.
[14] Since I find that the forum selection clause is reasonable and fair and that there is not proper service of the statement of claim upon the Defendant, there will be an order staying the Ontario action.
[17] Ms. Allen appealed the order of Glass J. to the Court of Appeal. She argued that Glass J. erred in finding that the contract was enforceable and that the forum selection clause was fair and reasonable. The Court of Appeal dismissed the appeal and agreed that the forum selection clause was reasonable and fair, at para. 2:
The respondent’s contract was sent to the appellant’s representative well in advance of the cruise and on its face, highlighted the importance of reading the terms and signing it before boarding. The appellant did not raise any issue with the contract until well after the cruise. In our view, she was bound by the forum selection term of the contract.
[18] Ms. Rose submits that she is unduly disadvantaged by the forum selection clause due to the cost of litigating in Florida and that her claim may now be statute barred in Florida. In my view, both of those features were present in Allen. There is a clear, obvious, and powerful nexus between this contract and Miami, Florida. There is no evidence before me to suggest that litigating in Florida is more expensive than in Ontario. Moreover, I do not see either feature as an undue disadvantage to Ms. Rose. The mere fact that one clause in a contract may be more favourable to one party than the other is no reason to interfere with the bargain made by the parties.
[19] Ms. Rose attempts to distinguish Allen in four ways.
[20] First, she submits that Ms. Allen purchased her ticket from a travel agent whereas Ms. Rose purchased her ticket directly from Carnival. This distinction is legally irrelevant to the enforceability of the contract clause. If I was to give it weight, it seems to me that the case for enforcing the clause is stronger when the plaintiff herself purchased the ticket.
[21] Second, Ms. Rose submits that Ms. Allen received her ticket from Carnival six weeks before the trip, whereas Ms. Rose received the link to her contract only ten days before sailing. The complete answer to this submission is that Ms. Rose only booked her trip ten days before sailing. She received the contract link shortly after completing the telephone call where she booked the trip. The fact that Ms. Rose booked her trip closer to departure than did Ms. Allen is no reason to find that the forum selection clause is not enforceable.
[22] Third, Ms. Rose submits that Ms. Allen knew of the forum selection clause before the limitation period expired. Ms. Rose states that she did not know of the forum selection clause until February 2019. In my view, this is not relevant. Ms. Rose knew or ought to have known of the contract terms she accepted at the time she accepted the contract. Both the email Carnival sent to her with the link to the contract and the contract itself brought the forum selection provisions to her attention. Like in Allen, Ms. Rose received the ticket and that she clicked to accept the contract, there is no suggestion that she is not competent to read and understand the document. Like in Allen, Ms. Rose must take some responsibility for her actions in signing the contract.
[23] In conclusion, Ms. Rose raises distinctions without a difference. I am bound by the decision in Allen (ONCA). Even if I was not bound by Allen (ONCA), I would not find the forum selection clause to be unconscionable. I would find it to be fair, reasonable, and enforceable.
Step Two: Ms. Rose has not shown strong reasons why the contract should not be enforced
[24] At step two of the analysis, the onus shifts to Ms. Rose to show strong reasons why the court should not enforce the forum selection clause and stay the action.
[25] In the consumer context, unequal bargaining power of the parties and the rights that a consumer relinquishes under the contract, without any opportunity to negotiate, may provide compelling reasons for a court to exercise its discretion to deny a stay of proceedings, depending on the other circumstances of the case: Straus v. Decaire, 2007 ONCA 854, at para. 5.
[26] When considering whether it is reasonable and just to enforce an otherwise binding forum selection clause in a consumer contract, courts should take account of all the circumstances of the particular case, including public policy considerations relating to the gross inequality of bargaining power between the parties and the nature of the rights at stake. Gross inequality of bargaining power will not be sufficient, on its own, to show strong cause. However, it is a relevant circumstance that may be taken into account in the analysis.
[27] Ms. Rose submits that the forum selection clause should not be enforced due to two aspects of public policy:
a. Enforcement of the forum selection clause will cause the loss of a procedural advantage as the plaintiff’s claim would be barred because of the expiration of the limitation period in Florida; and
b. Ontario is the forum best positioned to hear the case on its merits.
[28] I would not give effect to either submission.
[29] First, public policy does not demand that Ms. Rose be permitted to take advantage of her own failure to bring an action in the correct jurisdiction in a timely way to create prejudice that would justify releasing her from the forum selection clause: Expedition Helicopters Inc. v. Honeywell Inc., 2010 ONCA 351, 100 O.R. (3d) 241, at para. 16.
[30] Second, the assessment of whether or not to enforce a forum selection clause is not to be conflated with an analysis of which venue is the more convenient forum: Pompey; Expedition Helicopters, at paras. 9-14. Public policy does not demand that a forum selection clause be ignored simply because an Ontario court considers this to be a more convenient jurisdiction. I also note that Ms. Rose has only assessed her own case when assessing the convenience of the forum, not the defendant’s case.
[31] Ms. Rose has not shown strong reasons why the court should decline to enforce the forum selection clause.
Service of the claim
[32] I would also set aside the service ex juris pursuant to rule 17.06(1)(a).
[33] Ms. Rose did not obtain an order granting leave to serve the statement of claim outside Ontario pursuant to rule 17.03. Instead, she relied on rule 17.02(h) to serve the claim outside Ontario without leave. However, rule 17.02(h) was revoked on January 1, 2014, long before Ms. Rose issued her claim. The statement of claim does not plead facts that bring the claim within any of the other provisions of rule 17.02.
[34] I would not have granted leave to serve the claim under rule 17.03. Given my findings above with respect to the enforceability of the forum selection clause, I would not have granted leave to serve the claim outside Ontario: Allen (Ont. S.C.), at paras. 5-9.
Conclusion and costs
[35] I find that the forum selection clause is reasonable and fair. Ms. Rose has failed to show strong cause why it would be unreasonable or unfair to uphold it. This is not an appropriate case to grant leave to serve the claim outside of Ontario.
[36] For these reasons, I order that service of the claim on Carnival be set aside and that the action against Carnival be stayed.
[37] If the parties are not able to resolve costs, Carnival may email its costs submission of no more than three double-spaced pages to Theresa.Finelli@ontario.ca on or before November 28, 2022. Ms. Rose may deliver responding submission of no more than three double-spaced pages on or before December 5, 2022. No reply submissions are to be delivered without leave.
Robert Centa J.
Date: November 21, 2022
[^1]: Clause 13(d) relates to disputes other than for personal injury and does not apply to this proceeding.