Posts
When
a defendant asks a court that has jurisdiction over a given case to decline to
exercise that jurisdiction and let a foreign court take the case instead, the first court embarks on a forum non conveniens analysis to
determine whether the alternative forum the defendant proposes is a clearly more appropriate forum. Among the factors to be considered is
“juridical advantage” (“JA”), which is the advantage (s) for a litigant
provided by difference(s) between the laws of the home jurisdiction and the laws
of the foreign, alternative forum.
Recently, the Supreme Court of Canada stated that juridical advantage
“should not weigh too heavily in the forum
non conveniens analysis”: Breeden v.Black [2012] 1 S.C.R. 666; Van Breda v. Club Resorts [2012] 1 S.C.R. 572. Citing that ruling, the
Ontario Superior Court of Justice, in Sullivan v. Four Seasons Hotels [2013] O.J. No. 3335 effectively dismissed a sizable claim to
damages for wrongful dismissal without regard for the merits. The court ruled that, although it had
jurisdiction simpliciter over the
case, the case should be brought instead in New York, an “at will” jurisdiction
where the law does not recognize claims for damages in lieu of notice of
termination. This blog post will argue, using Sullivan as an example, that juridical
advantage warrants substantial weight.
Let
us begin by recalling the principle that a plaintiff’s choice
of jurisdiction ought not be lightly disturbed. The defendant must show that the proposed
other forum is “clearly more appropriate”. As the Supreme Court itself states, this test reflects
the fact that “the normal state of affairs is that jurisdiction should be
exercised once it is properly assumed”: Van
Breda, para. 108-109 and Breeden,
para 23.
It
is because of that same principle that a court cannot even address forum non conveniens on its own
initiative. If the court chosen by the
plaintiff has jurisdiction it must exercise its jurisdiction -- it cannot
decline jurisdiction -- unless a defendant has asked that the case be moved
to another court, and has met the test for same: Van Breda, supra, at para 102.
A similar approach is taken in legislation. The Quebec
Civil Code, article 3135, states that a court having jurisdiction “may,
exceptionally and on application by a party, decline jurisdiction if the
[courts] of another country are in a better position to decide”. The Court Jurisdiction and Proceedings Transfer
Act (“CJPTA”) which has been enacted in British Columbia, Saskatchewan, and
Nova Scotia, section 11(1) provides that the court may (not must) decline to
exercise jurisdiction if “[a]fter considering the interests of the parties to
the proceeding and the ends of justice”, it finds “the court of another state
is a more appropriate forum in which to hear the case” In other words, under these laws the
court may decline jurisdiction only if some other forum is more
appropriate, and only if a party requests it.
Let
us remember also that merely commencing a proceeding in a jurisdiction with
favourable laws, by itself, does not constitute unacceptable forum
shopping: Wenngatz v 371431 Alta Ltd. [2013] B.C.J. No. 1049 (B.C.C.A.).
Now let us review the two reasons the Supreme Court
offered for de-emphasizing juridical advantage. First, the Court says that:
“as a practical matter, juridical
advantage may not add very much to the jurisdictional analysis. As the
Court emphasized in Amchem
Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897, 'Any loss of advantage to the foreign
plaintiff must be weighed as against the loss of advantage, if any, to the
defendant in the foreign jurisdiction if the action is tried there rather than
in the domestic forum' (p. 933). ": Breeden, at para. 27
However, consider that a plaintiff’s “choice”
to proceed in a given jurisdiction is meaningful only in cases where more than
one jurisdiction may conceivably be appropriate, and that the plaintiff will
naturally choose the most advantageous jurisdiction. To
de-emphasize juridical advantage is in effect to weaken the principle that a
plaintiff’s choice of jurisdiction ought not be lightly disturbed, and thus to
lower the threshold for declining jurisdiction in favour of a foreign
jurisdiction.
The Court’s other reason
for de-emphasizing juridical advantage is that an emphasis on juridical
advantage
“may be inconsistent with the principles
of comity. In particular, a focus on juridical advantage may put too strong an
emphasis on issues that may reflect only differences in legal tradition which
are deserving of respect, or courts may be drawn too instinctively to view
disadvantage as a sign of inferiority and favour their home jurisdiction” (Van Breda, para. 112).
It is hard to see how the decision of a court that has
jurisdiction simpliciter over a case
to exercise that jurisdiction could constitute disrespect for another forum. And as a practical matter, it is unlikely in
cases involving only or mainly private disputes between private parties, that
the foreign forum would be so concerned about the decision that there would be
a risk of damage to relations between the two jurisdictions. Apart from cases where such a risk is real
(e.g. where foreign governments are named as defendants) comity ought not play
a significant role in the forum non
conveniens analysis.
As well, frankly in some cases one might very reasonably
regard the applicable laws of the foreign jurisdiction as less protective than
the legal rights and protections a plaintiff enjoys in a given jurisdiction,
often his/her own country. This is not
a jingoistic statement and does not mean one regards most or all of the laws of
that foreign jurisdiction as inferior.
This is merely to recognize that a given jurisdiction’s laws, in respect
of a specific subject matter, may be more modern than the corresponding laws of
a particular other jurisdiction proposed as an alternative forum. There are many different subject matters to
which a cross border dispute may pertain, such as matters of contract, tort or
human rights, and many different jurisdictions in the world. In most if not all jurisdictions, including
Canada, people will consider at least some of their own jurisdiction’s laws to
be modern and just, while also believing that other laws of their own jurisdiction
on other subject matter to be antiquated or worse, even compared to the laws of
another jurisdiction. Depriving a plaintiff of rights and
protections bestowed by the laws of his country can hardly be justified by
fears or speculation that a foreign country with laws less modern on a
particular subject matter will find the court’s decision disrespectful.
The
factors typically considered in the forum
non conveniens analysis include the links between the case and the
alternate forum, such as, in tort cases, where the tort was committed or, in
contract cases, where the contract was made.
Other factors pertain to practical considerations such as the location
of witnesses (whether requiring them to travel for the trial would be unduly
burdensome), and whether trial in a given forum would entail proof of foreign
law, and whether that might be difficult.
If a related proceeding has already been commenced in another forum,
then avoidance of a multiplicity of proceedings is an important factor too.
Factors
that are links to the alternative forum are relevant mainly to whether the
proposed alternative forum would have jurisdiction simpliciter, i.e. whether it would be appropriate at all, and less
relevant to whether it would be a more appropriate forum. Only if that alternative forum does have
jurisdiction does it make sense to begin comparing the relative merits of the
original forum and the proposed alternative.
That comparison should focus on practical considerations, and juridical
advantage, not on the closeness of ties to the case. After all, the forum non conveniens analysis is done only if the initial court has
determined it has a real and substantial connection to the case.
In
Sullivan, the juridical advantage of
suing in Ontario, as opposed to New York, was that Ontario employment law
entitles employees to reasonable notice of termination, and to compensation if
reasonable notice is not given, whereas New York law does not. The plaintiff’s claim was sizable: she had
worked for the defendant hotel for ten years as director of sales. In New York, only her claims for
discrimination and certain “tortious claims” would survive.
The
court in Sullivan addressed seven
factors in its forum non conveniens
analysis. The court found that the first
factor, being the location where the contract of employment was made, favoured Ontario. The second factor, the law of the contract,
did not favour either fora because the contract (drafted by the defendant) did
not state the applicable law. The court did
not carry out a choice of law analysis to determine the applicable law.
The
third factor, being the location where the witnesses are located, favoured New
York. The court made this finding despite the fact
that the cost of having those New York witnesses travel to Toronto (where the
trial would be held) would likely be minor compared to the size of the wrongful
dismissal claim. The fourth factor,
being the location where the bulk of the evidence would come from, also
favoured New York. However, there was no
indication that there was significant physical evidence to transport, nor any
other indication as to why in this case the fourth factor should be a factor
separate from and in addition to, the third factor.
The
fifth factor, where the factual matters arose, also favoured New York. The sixth factor, the residence or place of
business of the parties, split evenly between the two fora.
The
court gave little or weight at all to the seventh factor, juridical advantage. The court cited the above quoted dicta from Breeden v. Black. The court did not say it assigned any weight
to this factor.
Because
there was only the Ontario proceeding, avoidance of a multiplicity of
proceedings was not applicable.
In
the result, the court found New York to be the clearly more appropriate forum, and
stayed the Ontario action. The claim was
settled shortly thereafter. The
plaintiff lost her claim for damages for wrongful dismissal because the court
gave her ability to “have her day in court” on that claim either no weight or
little weight, while giving more weight to the factors of the location of the
witnesses and other evidence.
It is true that the Supreme Court’s dicta about
de-emphasizing JA did not make the outcome in Sullivan inevitable, for two reasons. One is the Sullivan court arguably made an error in that New York was not
“more clearly appropriate”. Of the seven
factors the court considered, only three favoured New York, while two favoured
Ontario and the other two were inconclusive.
Two of the factors in favour of New York (location of witnesses and
evidence) had only a limited impact in practical terms. Also, the
Supreme Court only de-emphasized juridical advantage; the Court did not
eliminate it as a factor.
The other reason is that even if the case is moved to New
York, the applicable substantive law is not necessarily the law of New
York. As the Supreme Court said in Van Breda, “In considering the question
of juridical advantage, a court may be too quick to assume that the proper law
naturally flows from the assumption of jurisdiction….Even if the jurisdictional
analysis leads to the conclusion that courts in different states may properly
entertain the action, the same substantive law may apply, at least in theory,
wherever the case is heard.” (Para. 111)
As a practical matter, however, if a
case is moved to a foreign forum, the substantive law applied to the case will
often be that of the foreign forum.
Nonetheless, Sullivan
illustrates how reducing the weight given to JA can result in a Canadian
plaintiff being denied substantive legal rights she would otherwise enjoy as a
resident of Canada.
