Thursday, 6 September 2018

Ont Court of Appeal on “contract made in forum” presumptive connecting factor


          In Di Gregorio v Sun Wing Vacations 2018 ONCA 655 the Ontario Court of Appeal (Feldman, Hourigan and Brown JJ.A.) reminds us that a contract made in Ontario serves as a presumptive connecting factor to establish jurisdiction simpliciter even where the foreign defendant is not a party to that contract.     In this case, the court found jurisdiction even though the claim was for breach of the same contract. 

          The plaintiffs had purchased a vacation in the Dominican Republic from Sun Wing Vacations. They sustained injuries after the railing of their hotel balcony gave way and they fell.  Sun Wing contracted with Perfect Tours to book hotel rooms at the Dreams Resort.  Perfect Tours had a contract with a hotel management company, AMR Resort Management (“AMR”).  AMR and AM Resorts (“AM”), both based in the Dominican Republic, operated the Dreams Resort.   

          The plaintiffs sued Sun Wing Vacations, AMR and AM.  AMR and AM moved for a stay of the action on the grounds that the Ontario courts lack jurisdiction and forum non conveniens.  The motion judge did not address the jurisdictional issue. Instead, it dismissed the action on the grounds that the plaintiffs had no contract with AMR or AM, and that a claim based on tort is statute-barred under the limitations law of the Dominican Republic.   

          Although AM had attorned to the jurisdiction, AMR had not, so there was an issue as to whether the court had jurisdiction simpliciter over AMR.  The Court of Appeal held that the motion judge’s failure to address the jurisdiction issue first, before delving in the limitation period issue, was an error of law. 

          To establish jurisdiction over AMR, the plaintiffs relied on for their presumptive connecting factor their claim that a contract had been made in Ontario.  They had also pleaded that AMR and AM had breached this contract with the plaintiffs.   This claim was tenuous.  The plaintiffs never signed anything with AMR or AM or bought anything directly from either company.  The plaintiffs relied on the fact that the contract with Sun Wing stated “The accommodation voucher… furnished by Sun Wing shall constitute the sole contract between the hotel/resorts and you, the passenger.  The hotels and resorts … will not be held liable for any act, omission, or event…”   It is far from clear that the plaintiffs had any contractual relationship with AMR or AM.    Nonetheless, the Ontario Court of Appeal ruled[i] that:

For jurisdictional purposes, however, a contractual connection does not require that an alleged tortfeasor be a party to the contract or that its liability flows immediately from its contractual obligations.   All that is required is that a defendant’s conduct brings it within the scope of the contractual relationship and that the events that give rise to the claim flow from the contractual relationship. 

The Court of Appeal held that there is a contractual connecting factor, and the Ontario courts can take jurisdiction.  The Court overturned the dismissal and ordered the case to proceed.

          The take away is that the connection between the foreign defendant and the contract made in Ontario can be fairly loose.    

          Arguably, in these circumstances a more than usually robust forum non conveniens analysis is called for.  The loose connection is analogous to internet defamation cases where it is fairly easy to establish that the tort occurred in Canada because it is enough to prove publication of the defamatory statement in Canada, even if it was published also overseas.  In Haaretz v Goldhar 2018 SCC 28, an internet defamation case, Cote, Brown and Rowe JJ. stated that in light of the ease of proving the tort occurred in Canada, “a judge must conduct a robust and carefully scrutinized review of … forum non conveniens.”  (para. 48) In Di Gregorio, the defendants did not allege that Ontario is forum non conveniens, so the Court did not address this.
 


[i] Para 11.  The Court followed the Supreme Court of Canada decision in LaPointe Rosenstein v Cassels Brock   2016 SCC 30

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