A Real and Substantial 'Tune-Up': The Ontario Court of Appeal Reformulates the Test for Asserting Jurisdiction Against Out-of-Province Defendants

Procedure

On February 2, 2010, a five-member panel of the Ontario Court of Appeal released its long-awaited reasons in Van Breda v. Village Resorts Limited (2010), 98 O.R. (3d) 721 (CA) (sub nom. Charron Estate v. Bel Air Travel Group Ltd.), leave to appeal to SCC granted, [2010] SCCA. Nos. 114 and 174. The decision in Van Breda significantly reformulates the test for "jurisdiction simpliciter," i.e., the court's ability to assert jurisdiction against an out-of-province defendant who has not submitted or attorned to an action against it in Ontario. While Van Breda represents a much needed reassessment, both the judgment itself, and its recent application in two further decisions of the Ontario Court of Appeal, suggest that uncertainty will remain so long as jurisdiction simpliciter continues to be based upon the "deliberately general" concept of a "real and substantial connection."

In a series of cases beginning with Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, the Supreme Court of Canada held that principles of "order and fairness" require there to be a "real and substantial connection" in order for a domestic court to assert jurisdiction against an out-of-province defendant. In Muscutt v. Courcelles (2002), 60 O.R. (3d) 20 (CA), the Ontario Court of Appeal attempted to add some clarity to this "deliberately general" concept laid down by the Supreme Court. The Muscutt Court listed eight factors for Ontario courts to consider when determining whether there is a real and substantial connection for the purposes of jurisdiction simpliciter: (1) the connection between the forum and the plaintiff's claim; (2) the connection between the forum and the defendant; (3) unfairness to the defendant in assuming jurisdiction; (4) unfairness to the plaintiff in not assuming jurisdiction; (5) the involvement of other parties to the suit; (6) the court's willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis; (7) whether the case is interprovincial or international in nature; and (8) comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere. If the court had jurisdiction simpliciter, it would then go on to determine whether jurisdiction should be declined, as a matter of judicial discretion, pursuant to the doctrine of forum non conveniens. Factors relevant to this determination were said to include: the location of the majority of the parties; the location of key witnesses and evidence; contractual provisions that specify applicable law or accord jurisdiction; the avoidance of a multiplicity of proceedings; the applicable law and its weight in comparison to the...