Legal Remedies

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Some Recent Canadian Developments in Cross-Border Litigation

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Here are some recent developments important to anyone engaged in cross-border civil litigation involving common-law Canada. One, the criteria for determining whether a court has jurisdiction over a non-resident defendant have been revised. Two, the concept of "forum of necessity" is now established in Ontario. Three, Canadian courts will not, as readily as in the past, decline to exercise their jurisdiction in cases where a parallel action (one involving the same parties and issues) has already been commenced elsewhere.

New Criteria for Assuming Jurisdiction over a Non-resident
In common law Canada, courts have jurisdiction over a defendant in any of these three circumstances: a.) the defendant is resident or present in the jurisdiction; b.) the defendant "attorns" (consents) to the court's jurisdiction; or c.) there is a "real and substantial connection between the jurisdiction and that defendant. If one of these circumstances exists, the Court will find it has jurisdiction, and will then proceed to consider whether to exercise that jurisdiction (the "forum non conveniens analysis"). The Ontario Court of Appeal has revised the factors considered when determining whether there is a real and substantial connection, in Van Breda v. Village Resorts. The new approach focuses on two factors: whether there is a connection between Ontario and the claim, and between Ontario and the defendant. Also, the court will presume it has jurisdiction if the case falls within certain categories set out in the Rules of Civil Procedure. This change does not affect the forum non conveniens analysis. Although this decision is binding only on Ontario courts, it will likely influence the law throughout common law Canada.

New Basis for Jurisdiction: Forum of Necessity
The Van Breda decision confirms the concept of forum of necessity. That is, courts in Ontario now have discretion to exercise jurisdiction over a case brought against a non-resident person or company, even one without ties to Ontario, if there is no court elsewhere in which the plaintiff could reasonably be expected to sue.

Asserting Jurisdiction Despite a Pre-existing Parallel Proceeding
Until recently, very commonly Canadian courts would decline jurisdiction over a case if another case involving substantially the same parties and claims had already been commenced in another jurisdiction. Now the Supreme Court of Canada has decided, in Teck Cominco Metals v. Lloyd's Underwriters, that the existence of that pre-existing, parallel proceeding outside Canada is not an overriding and determinative factor in the forum non conveniens analysis. To allow a foreign court's prior assertion of jurisdiction to govern that analysis would encourage parties to rush to commence proceedings in their preferred jurisdiction, and perhaps to delay proceedings in their opponent's jurisdiction. As well, in some countries the approach to exercise of jurisdiction differs from that taken in Canada. In the result, considerations unrelated to where an action is most conveniently or appropriately heard would carry the day. The existence of the parallel proceeding remains a factor, but is not determinative.

Disclaimer: This article is intended to provide only general legal information, not legal advice; for advice specifically about a particular case, consult a lawyer.

Source: Ken MacDonald, LL.B., LL.M.

Published under: Legal Remedies
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Disclaimer: These articles are intended to provide only general legal information, not legal advice; for advice specifically about a particular case, consult a lawyer.