COURT FILE NO.: CV 21-659762
DATE: 20221205
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
PAUL M. SVENSEN and UBERJETS LLC
A. Neuer, for the Plaintiffs
Plaintiffs
- and -
UBER TECHNOLOGIES INC.
R. Evans, for the Defendant
Defendant
HEARD: November 23, 2022 via ZOOM
DECISION ON APPEAL
The Honourable Justice J. Krawchenko
Overview
[1] The underlying action was commenced by the Plaintiffs (appellants in appeal) in order to challenge a March 2021 arbitration decision granted in favour of the Defendant (respondent in appeal). The decision resulted from a domain name dispute arbitration proceeding initiated by the Defendant that sought to compel the Plaintiffs to transfer their domain name. The Plaintiffs are UberJets LLC, an American company incorporated under the laws of Massachusetts, U.S. and its Chief Technology Officer, Mr. Svensen who resides in the U.S.A. The Defendant is an American entity, with its head office located in San Francisco, California.
Background on Domain Name Registrations and How it Relates to This Matter
[2] Individuals that are interested in purchasing Internet domain names may do so via “registrars” that have been accredited by the Internet Corporation for Assigned Names and Numbers (“ICANN”), which is a non-profit international organization responsible for coordinating the maintenance and procedures of databases related to the namespaces and numerical spaces of the Internet. Registrars accredited by ICANN are responsible and accountable for all domain names they sell/register directly, and/or indirectly through resellers.
[3] Registrars and their customers are bound by, among other things, ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”) which sets forth the terms and conditions in connection with disputes over domain names sold and registered by registrars to their customers. Any customer who registers a domain name with a registrar is required to submit to a mandatory administrative proceeding in the event a party files a complaint.
[4] In 2017, Mr. Svensen registered the domain name at issue with the registrar Tucows Inc. and immediately began operating his business using that same domain name. In December of 2020, the Defendant commenced a proceeding against Mr. Svensen by filing a complaint with the World Intellectual Property Organization (“WIPO”) Arbitration and Mediation Center, which was governed by the ICANN Rules for Uniform Domain Name Dispute Resolution Policy (the “ICANN Rules”). The ICANN Rules required the complainant (the Defendant herein) to state in their complaint, that if a challenge ensued to an administrative decision cancelling or transferring the domain name, that they (the Defendant herein) would submit to the jurisdiction of one of the Courts designated as “Mutual Jurisdiction”.
[5] “Mutual Jurisdiction” is defined as a court jurisdiction at the location of either:
a) the principal office of the Registrar (provided the domain-name holder has submitted in its registration agreement to that jurisdiction regarding court adjudication of disputes the use of the domain name) or
b) the domain-name holder's address, as shown for the registration of the domain name in the Registrar's database at the time the complaint is submitted to the Provider.
[6] In this case and for these parties, the choice for Mutual Jurisdiction was either;
a) Ontario, because the principal office of the registrar, Tucows Domains Inc., was located in Ontario, or
b) Massachusetts, US being the state that was listed as the domain name holder’s address in the Registrar's database.
[7] To be clear, this was an either-or choice with no direction, rule or requirement to chose one over the other in the Policy.
[8] As noted at the outset, in March 2021, after an adjudication of the issue, the Plaintiff was directed to transfer the disputed domain name to the Defendant. The Plaintiff sought to challenge this decision which resulted in a choice of Mutual Jurisdiction having to be made by the Defendant. As a result of that “either or choice”, the Plaintiffs were required to apply to an Ontario court, which it did.
[9] In September 2021, the Defendant/Respondent sought an order for security for costs against the Plaintiffs under the following subsections of Rule 56.01(1), wherein such an order may be granted where it appears that:
a) the plaintiff or applicant is ordinarily resident outside Ontario;
b) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent; and
c) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent.
[10] At the motion, the Plaintiffs argued that it was not in the interests of justice to grant the motion considering the particular circumstances of the action. Namely, by virtue of international domain name dispute regulations, it was the Defendant who dictated the foreign jurisdiction upon the Plaintiffs. The Plaintiff’s further argued that the Defendant’s election to impose a foreign jurisdiction (or stated differently, by electing one available option over another available option)— given the fact that all parties were American and that one of those two options would have been litigation in Massachusetts (ignoring in part geography as Mr. Svensen resided in Florida and the Defendant conducted business in California)— was somehow a “curious and counterintuitive” selection that the Defendant did not explain. As a result, the Plaintiffs invited the Court to draw the inference that the Defendant’s decision was best explained as a litigation tactic, and one which precluded it from gaining an order for security for costs.
[11] The Associate Justice did not agree and concluded that the Defendant’s attornment to the Ontario Courts was reasonable and noted that there was no evidence that an order for security would work an injustice or otherwise adversely affect the Plaintiffs’ ability to prosecute their claim. The order for security was thus granted.
The Appeal
[12] The Plaintiffs now seek to challenge the order for security for costs. The Plaintiffs do not argue that there was any error in law but rather argue that findings made by the Associate Justice were unreasonable and unsupported by the evidence.
[13] In cases such as this, the standard of review for findings of fact is that factual findings ought not to be reversed unless it is established that the Justice made a palpable and overriding error. The palpable and overriding error test is met if the findings are clearly wrong or can properly be characterized as unreasonable and unsupported by the evidence. A "palpable" error is one that is obvious, plain to see or clear. An "overriding" error is an error that goes to the root of the finding of fact such that the fact cannot safely stand in the face of that error.
[14] The Plaintiffs submit that there were at least two palpable and overriding errors. Firstly, that contrary to the Associate Justice’s findings, the Defendant had not actually provided any reasons for its decision to select Ontario over an American jurisdiction common to the parties. Secondly, the purported justification for the election of Ontario was not based on fact, but rather on a “lawyer’s argument” which was demonstrably contradicted by actual facts, and which also made no sense.
[15] The appellant focuses on the Associate Justice’s reasons set out at paragraphs 13–14 of the endorsement, which stated:
[13] … The plaintiffs say that, with the defendant having agreed to submit to the jurisdiction of the registrar when its complaint was made (i.e., Ontario), they are more like defendants than plaintiffs in this litigation. Relying on Toys R US (Canada) Ltd. v. Rotisseries St. Hubert Dee., 1994 CanLII 1190 (ON CA), they say that they were “forced into [an Ontario] court” by the defendant, with this action being essentially an appeal taken from a decision that, they say, was wrongfully decided.
[14] I do not agree. This case is different in that the plaintiffs chose to shield the identity of Mr. Svensen and the www.flyuberjets.com web host, as was their right. In doing so, they did not permit the defendant access to information sufficient to permit it to submit to a jurisdiction other than that of Ontario, where Tucows Inc. has its principal office. Had more been disclosed by the plaintiffs, at first instance, the plaintiffs' argument might carry more weight. I do not agree, in the circumstances, that the steps taken by the defendant were “very curious and counterintuitive”, as posited by the plaintiffs. They were reasonable steps, given the paucity of information available to them.”
[16] In this courts view, the motion record fully supported the Associate Justice’s findings that:
a) There was no dispute that under the applicable UDRP Rules, Uber was required to agree to submit to the jurisdiction of the Courts of either:
(i) the Registrar’s principal office or
(ii) of the domain name holder;
b) There was no dispute that Tucows Inc., headquartered in Toronto, Ontario, was the Registrar for the disputed domain name;
c) There was no dispute that, as the Registrar of the disputed domain name, Tucows Inc. was responsible for effecting the Panel’s decision to transfer the domain to Uber, subject to the resolution of the underlying action;
d) There was no dispute that the individual appellant/plaintiff Mr. Svensen (i.e., not UberJets LLC) is the sole owner/holder of the disputed domain name flyuberjets.com;
e) Mr. Svensen used a privacy registration service to shield his identity from the domain name registration and accordingly, the only information known to the Defendant regarding “how to contact” the domain name owner at the time of filing its complaint was an unnamed “Administrative Contact” located in Massachusetts; and finally
f) Mr. Svensen plead that he resided in Florida, U.S.A. and did not file any evidence of having resided in Massachusetts.
[17] Because the record supported these findings, the findings cannot be said to be clearly wrong nor could they properly be characterized as unreasonable and unsupported by the evidence. As noted earlier, a "palpable" error is one that is obvious, plain to see or clear. An "overriding" error is an error that goes to the root of the finding of fact such that the fact cannot safely stand in the face of that error. Neither apply here.
[18] I cannot find any palpable and overriding error associated with the Motion Judge’s conclusion that Uber’s agreement to attorn to the Ontario Courts, being the jurisdiction of the applicable Registrar. That conclusion was reasonably inferred from the evidence before the Motion Judge, and no intervention from this Court is warranted.
[19] Uber fully satisfied its onus with respect to demonstrating the applicability of the relevant subsections to Rule 56.01 to circumstances of this case. Further, there is no evidence to support the proposition that the only other possible alternative forum, being Massachusetts, would have been a more reasonable or appropriate choice.
Conclusion
[20] Was the Associate Justice clearly wrong in making the findings that supported the relief sought by way of security for costs? The answer is No.
[21] Was the decision making unreasonable and unsupported by the evidence? The answer again is No.
[22] There was no obvious, plain to see or clear error that went to the root of the finding of fact such that the decision could not safely stand. While the rules associated with the determination of disputes regarding domain names are unique, those rules were followed leading the parties to Ontario. Once in Ontario, the Rules of Civil Procedure were equally clear with regards to the underlying motion. They were applied in the context of the evidentiary record without error.
[23] For the foregoing reasons, this appeal is dismissed.
[24] With respect to costs, unless the parties can come to an agreement of that issue, they are invited to make short written submissions. The submissions shall be no greater than 5 pages in length, 12-point font, double spaced, not including their bills of costs and/or offers to settle. The written submissions shall be forwarded to the trial coordinator within 10 days of the release of these reasons. Only submissions received by the deadline will be considered. If no submissions are received by that time, the parties will be deemed to have resolved the issue of costs and I will make no further order in that regard.
Justice J. Krawchenko
Released: December 5, 2022
COURT FILE NO.: CV-21-659762
DATE: 20221205
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Svensen and Uberjets LLC
Plaintiffs
- and –
Uber Technologies Inc
Defendant
DECISION ON APPEAL
Justice Krawchenko
Released: December 5, 2022