When asked whether Ontario will assume jurisdiction over a claim against out-of-province defendants, lawyers have traditionally provided clients with two pieces of information. The first was that the “real and substantial connection” test, involving eight factors outlined in Muscutt v. Courcelles1, would be applied to the facts of the case. The second was that, depending on how those factors are weighed the court may, or may not, assume jurisdiction.
Recent events in Cuba may have obliterated the eight factor test, but may have made it easier for practitioners to predict whether Ontario constitutes a valid jurisdiction for claims against out-of-province defendants. In Van Breda v. Village Resorts Limited,2 the Ontario Court of Appeal established a five judge panel to reconsider the long-standing test contained in Muscutt.
Reasons the Court of Appeal Reformulated Muscutt
The court cited post-Muscutt developments as reason for reformulation of the test for assuming jurisdiction over foreign defendants. These included: a significant body of case law since Muscutt applying the Muscutt test; other developments in the jurisprudence, including recognition and enforcement of foreign judgments; the Uniform Law Conference of Canada’s Model Court Jurisdiction and Proceedings Transfer Act (“CJPTA”); the development of the concept of “forum of necessity” or “forum of last resort”; and treatment of the Muscutt test by legal scholars in academic articles.
The Court’s Reformulation of Muscutt’s “Real and Substantial Connection” Test
The decision itself summarizes the Court of Appeal’s reformulation of Muscutt3:
- First, the court should determine whether the claim falls under Rule 17.02 (excepting subrules (h) and (o)) to determine whether a real and substantial connection with Ontario will be presumed to exist.
- Second, the connection between Ontario and the plaintiff ’s claim and the defendant are respectively considered the “core” focus of the analysis.
- Third, remaining considerations, such as those traditionally contained in the other Muscutt factors, will be treated as general legal principles that bear upon the analysis. These include: the fairness of assuming or refusing jurisdiction; in some circumstances, the involvement of other parties to the suit; willingness to recognize and enforce an extra-provincial judgment rendered on the same jurisdictional basis; and whether the case is inter-provincial or international in nature.
- Fourth, forum non conveniens factors should only be considered after consideration of the core analysis and determination of jurisdiction simpliciter.
- Lastly, where there is no other forum in which the plaintiff can reasonably seek relief, there is a residual discretion of an Ontario court to assume jurisdiction.
The test for assuming jurisdiction, perhaps now known as the Van Breda test, involves more steps than the Muscutt test: presumption of jurisdiction, core analysis, consideration of other legal “analytic tools”, and then residual discretion. However, the availability of a presumption of jurisdiction based on the service ex juris rule contained in Rule 17.02 of the Rules of Civil Procedure4 provides practitioners and clients with more certainty in regards to whether an Ontario court will assume jurisdiction over a foreign defendant, and which party will bear the onus of rebutting such a presumption.
Criticism of Van Breda has come quickly, as some commentators feel that it does not adequately consider how other jurisdictions have dealt with similar issues.5 In addition, Muscutt has been frequently applied in other jurisdictions and the CJPTA has been adopted in varying degrees in different Canadian provinces. As such, Van Breda may be ripe for reconsideration by the Supreme Court of Canada. Until that time, parties and practitioners should be aware of when jurisdiction over foreign defendants will be presumed to exist and apply Van Breda as necessary.