By: Kimberley de Jaray, Lima Lee Simovonian LLP

This question is, generally, easy to answer: however, complications arise when warring parties are located in different geographical areas, and more particularly, different provinces. If a claim is filed in a jurisdiction that a party thinks is improper, that party can challenge the jurisdiction and try to have the action stayed or dismissed for failure to initiate it in the proper forum.

Jurisdiction Simpliciter

A party may, on motion, either move to stay or dismiss an action if it is brought in the wrong forum. On such a motion, the Court will first consider whether it has jurisdiction simpliciter.1 This involves a two-step process to determine whether there is a real and substantial connection between the claim and the chosen forum.2

The first step requires the party who wishes to have their action proceed in a particular forum to demonstrate the existence of a presumptive connecting factor that ties the subject matter of the litigation to that forum. These factors include, inter alia:

  • a. Whether the defendant is domiciled or resident in the subject area;
  • b. Whether the defendant carries on business in the subject area;
  • c. Whether a tort was committed in the subject area;
  • d. Whether a contract connected with the dispute was made in the subject area; and
  • e. Whether real property at the center of the claim is located in the subject area.3

The party defending their choice of jurisdiction has the onus of demonstrating the existence of the presumptive connecting factors based on a real and substantial connection between the subject matter of the litigation and the subject forum.

The second step of the test is this (assuming that a presumptive connecting factor is present): the party challenging the forum can rebut/challenge the presumption by demonstrating that the factor does not establish a meaningful relationship, or, only points to a weak connection between the subject matter of the litigation and the forum.4

Forum Non Conveniens5

A party challenging jurisdiction can also rely on the doctrine of forum non conveniens. If a court finds that it has jurisdiction simpliciter, it may still find that it is not the convenient forum for the hearing to proceed because there exists another more appropriate forum. The challenging party has the onus of demonstrating that another forum is clearly better suited to hear the action, as it can deal with the litigation more fairly and efficiently. The challenging party must identify the alternative, more appropriate, forum.6 The court is guided by three principles when determining whether the chosen forum is forum non conveniens:

  • a. The threshold for displacing the choice of forum is high. The existence of a more appropriate forum must be clearly demonstrated.

  • b. The court should consider and balance the following:
    i. the efficiency and convenience of a particular forum; and
    j. the fairness and justice of that choice to the parties.
  • c. Because forum non conveniens is typically raised early in a proceeding, the court should adopt a cautious approach to fact-finding, particularly when it comes to matters that are at the heart of the lawsuit which ought to be resolved at a trial.7

The factors to be considered in determining whether another forum is clearly more appropriate include, inter alia:

  • a. The location of the majority of the parties;
  • b. The location of key witnesses and evidence;
  • c. The costs of either transferring the case to another jurisdiction or denying the challenging party’s stay motion;
  • d. The impact of a transfer on the conduct of the litigation;
  • e. The avoidance of multiplicity of proceedings and the possibility of conflicting judgments;
  • f. The problems related to the recognition and enforcement of judgments; and
  • g. The existence of a default judgment in the competing forum.8

A party’s presence in the jurisdiction is insufficient, by itself, to meet the test for a connecting factor.9

Conclusion

In summary, the starting point on a jurisdictional challenge is to begin with whether the chosen forum has jurisdiction simpliciter. If there is jurisdiction simpliciter, the party challenging the forum may still convince the court that another forum is more appropriate if the non- exhaustive factors listed above tip the scale in favour of a different forum.

The Court undertakes a balancing exercise, and in making its decision, is guided by the following: (i) reducing the risk of jurisdictional overreach; (ii) preventing improper assumptions of jurisdiction; (iii) preventing courts from overreaching by entering into matters in which they have little or no interest; and (iv) reducing the risk of sweeping into that jurisdiction claims that have only a limited relationship with that forum.

We hope you found this article useful. Please don’t hesitate to contact our firm if we can be of assistance.

1 Club Resorts Ltd. v. Van Breda, 2012 SCC 17, at para 66-81.
2 Haaretz.com v. Goldhar, 2018 SCC 28, at para 34.
3 Club Resorts Ltd. v. Van Breda, 2012 SCC 17, at para 90; Knowles v. Lindstrom, 2014 ONCA 116, at para 16.
4 Haaretz.com, supra, at para 34; Van Breda, supra, at para 95-97; Vahle et al. v. Global Work & Travel Co. Inc., 2019 ONSC 3624 (CanLII) at para 40.
5 Translated as “an inconvenient forum”.
6 Club Resorts Ltd. v. Van Breda, 2012 SCC 17, at para 103.
7 Young v Tyco International of Canada Ltd., 2008 ONCA 709 at para 31.
8 Muscutt v. Courcelles, 2002 CarswellOnt 1756 (Ont. C.A.), at para 41.
9 Club Resorts Ltd. v. Van Breda, 2012 SCC 17, at para 86.

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