Friday, 27 April 2012

The Main Thrust of the SCC Decision in Van Breda

The best and most important thing about this decision is that the law on how a court is to decide whether it has jurisdiction over an non-resident defendant has been made less subjective and more predictable.   The ruling is for tort cases, but may in time be applied to other types of cases too.

For the past ten years, under the Muscutt v Courcelles approach, a court had to consider eight different factors to determine whether there was a real and substantial connection between the forum and the subject matter of the case, i.e. whether the court has jurisdiction.   These factors included subjective ones such as  fairness to the plaintiff, fairness to the defendant, and comity.  This blurred the distinction between the decision whether the court has jurisdiction and the discretionary decision whether it should exercise that jurisdiction (a.k.a. the forum non conveniens analysis) or let the case be litigated elsewhere.    

Now, a plaintiff who wants to sue a non-resident defendant must show a link between the subject matter of the case and the province where the court is (the forum). More specifically, if the defendant carries on business there, or the tort was committed there, or if a contract connected to the dispute was made there, the court will presume that it has jurisdiction.  (The Court said additional types of links with such presumptive effect may later be identified).  It will be up to the defendant to rebut that presumption by showing that there is no real connection between the case and the forum.    If the presumption holds, the court has jurisdiction. Then, and only then, the court may consider submissions from the defendant as to why the court ought to decline to exercise that jurisdiction.   
The defendant has to show a similar link to another forum, and also has to show that forum is clearly more appropriate, having regard for certain specific factors mainly about fairness to the parties and the efficient resolution of the dispute. 

One factor traditionally considered in the forum non conveniens analysis is "juridical advantage", i.e. whether the law of the forum or of the suggested alternative forum poses an advantage or disadvantage to one side or the other (e.g.  a shorter or longer limitation period).  The Supreme Court rightly pointed out that courts  sometimes mistakenly assume that the law to be applied will be the law of the forum where the case is tried, despite the fact that the properly applicable law may be a foreign law. 

I aim to provide critical commentary in an upcoming post.

No comments:

Post a Comment