Ontario Court Of Appeal Splits On Application Of Test For Jurisdiction In Italian Water Taxi Case

• Jurisdiction: Canada
• Law Firm: Fasken
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Author: Mr David C. Rosenbaum, Christopher J. Rae and Emily Croll Papsin
• Published date: 04 May 2023

Canadian courts have jurisdiction over out-of-province or out-of-country defendants where there is a "real and substantial connection" between the subject-matter of the litigation and the province or territory where the litigation is brought. In Club Resorts Ltd. v. Van Breda, the Supreme Court of Canada established a two-stage test for determining jurisdiction disputes.¹ First, a court must determine whether it has prima facie jurisdiction over the dispute considering certain presumptive "connecting factors" ' the fourth of which is whether a contract "connected with the dispute" was made in the province. The onus then switches to the party opposing jurisdiction to rebut the presumptive factor.

Although the Van Breda test has been in place for over a decade, its proper application remains a developing issue. This is illustrated by the recent decision Sinclair v. Amex Canada Inc., where judges of the Ontario Court of Appeal disagreed on how broadly or narrowly to interpret Van Breda's connecting factor relating to contracts.²

The case involved plaintiffs who alleged that they had contracted with a credit card company in Ontario to provide travel services in Venice, Italy. The claim was based on allegations that the credit card company had arranged, ultimately through Italian companies that were not parties to the plaintiffs' credit card contract, for a water taxi trip that ended in an accident. The plaintiffs sued in Ontario; the credit card company did not contest jurisdiction, but three Italian companies did.

The motion judge found that the Ontario Superior Court of Justice had jurisdiction over the Italian companies because of the fourth connecting factor, even though the companies were not parties to the credit card contract and the claim against them was in tort. On appeal, the judges of the Court of Appeal split on whether the credit card contract was a presumptive connecting factor, but were unanimous in concluding that the presumption was in any case rebutted. Of note, the majority was critical of the motion judge's decision, which, if upheld, would have had "sweeping implications":

It would mean that any person who books a trip through a credit card company that provides travel services and carries on business in Ontario would, through that fact alone, extend the jurisdiction of this province's courts to anyone who may subsequently become involved in those travel arrangements, regardless of where in the world that involvement occurs. In my view...