In an attempt to ease the burden of litigants dealing with out-of-province defendants, a five-member panel of the Ontario Court of Appeal has recently overhauled (again) the law of assumed jurisdiction in the province. In Van Breda v. Village Resorts Ltd., 2010 ONCA 84, the Court revisited and restated the oft-criticized common-law test originally set out in Muscutt v. Courcelles (2002), 60 O.R. (3d) (C.A.), in favour of a “refined” and “simplified” test.
The Muscutt test was essentially a series of eight factors that a court should consider when asked to determine whether a “real and substantial connection” exists between Ontario and an out-of-province defendant, sufficient to justify the assumption of jurisdiction by the Ontario court. Those factors were:
a) the connection between the forum and plaintiff’s claim;
b) the connection between the forum and the defendant;
c) unfairness to the defendant in assuming jurisdiction;
d) unfairness to the plaintiff in not assuming jurisdiction;
e) the involvement of other parties to the suit;
f) the court’s willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis;
g) whether the case is interprovincial or international in nature; and
h) comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere.
Explaining the Court’s rationale for the various modifications and clarifications made to the Muscutt test, Mr. Justice Sharpe cited several developments in the law of jurisdiction in Canada since Muscutt, including the development by the Uniform Law Conference of Canada of a model Court Jurisdiction and Procedings Transfer Act (“CJPTA”) (which has now been adopted in several Canadian jurisdictions, but not Ontario) and significant criticism of the Muscutt test from several Canadian legal scholars.
The Court’s first major change to the Muscutt test was to introduce a preliminary step giving presumptive effect to the list of connecting factors contained in Rule 17.02 of the Rules of Civil Procedure (which rule provides for service of process ex juris), to the extent that they conform to virtually-identical provisions contained in s. 10 of the CJPTA. If a plaintiff can now show that his/her case falls within one of the enumerated categories in Rule 17.02, then a “real and substantial connection” for the purposes of assuming jurisdiction will be presumed to exist. This presumption may be rebutted by the defendant upon showing that, on the facts of a particular case, the presumed connection is not “real and substantial”. Furthermore, this step of the revised test does not preclude a plaintiff from proving a “real and substantial connection” in circumstances other than those listed in Rule 17.02.
However, Sharpe J.A. declined to give presumptive effect to sub-rules 17.02(h) and (o) (the “damages sustained in Ontario” and “necessary/proper party” grounds for service ex juris), noting that neither is included in s. 10 of the CJPTA, which Sharpe J.A. described as a “carefully crafted list of connecting factors”. Their exclusion from s. 10 of the CJPTA, as well as previous case law, suggested, according to Sharpe J.A., that neither sub-rule has gained acceptance as a sufficiently reliable indicator of a “real and substantial connection”.
The Court also revised the Muscutt test by stating that the “core” of the test is “the connection that the plaintiff’s claim has to the forum and the connection of the defendant to the forum, respectively.” According to Justice Sharpe, the “core” is now to be further instructed by certain “remaining considerations” that should be treated by Ontario courts as “general legal principles”, rather than independent factors having more or less equal weight, as originally suggested in Muscutt.
These “general legal principles” include a consideration of 1) the fairness of assuming or refusing jurisdiction; 2) the involvement of other parties to the suit; 3) the willingness of Ontario courts to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis; 4) whether the case is interprovincial or international in nature; and 5) comity and the standards of the jurisdiction, recognition and enforcement prevailing elsewhere.
One will readily observe that the new “general legal principles” are nothing more than the remaining six factors as contained in the original test.
The import of Van Breda is that, for all practical purposes, s. 10 of the CJPTA is now the law in Ontario. The Court of Appeal has given its stamp of approval to the factors contained in s. 10, and has pressed Rule 17.02 into “double duty” service by making it the vehicle through which a plaintiff can gain a presumed “real and substantial connection” for assumed jurisdiction purposes.
James Manson is an associate at Theall Group LLP