Tuesday, January 15, 2013

Ontario Court refuses to assume jurisdiction in a New York MVA

In a recently released decision, Mr. Justice Perell of the Ontario Superior Court of Justice permanently stayed an action brought by a plaintiff who resided in Ontario, but who was struck by a motor vehicle while she was crossing a street in New York state. Justice Perell found that none of the presumptive factors which would give Ontario "jurisdiction simpliciter", i.e. a real and substantial connection to the action, were present in the case.

The plaintiff sued the driver of the motor vehicle for negligence. She also sued her insurance company under the under-insured coverage of her standard motor vehicle insurance policy. The defendant moved to have the plaintiff's action permanently stayed on the grounds that the Ontario Court did not have jurisdiction simpliciter, or alternatively, that Ontario was not the convenient forum for litigating the action.

The plaintiff did not oppose the motion. However, her insurance company which had cross-claimed against the defendant opposed the motion.

Justice Perell ruled that the Ontario Court did not have jurisdiction simpliciter over either the main action or the crossclaim. Because there was no jurisdiction simpliciter it was not necessary to rule on whether Ontario was "forum conveniens" - i.e. the more appropriate forum in which to litigate. However, since there may be an appeal, he ruled that Ontario is forum non-conveniens (i.e. not the more appropriate forum for litigating the action) and that New York was the proper forum in which to litigate the tort claim against the defendant.

After reviewing the facts, Justice Perell held that there were three ways in which the court could assert jurisdiction against an out of province defendant in a tort claim:

1. based on the defendant's presence in the jurisdiction;

2. based on the defendant's consent; and

3. based on the court's assumption of jurisdiction.

In the circumstances, this case was about "assumed jurisdiction".

Assumed jurisdiction arises when the court takes jurisdiction because the action has a real and substantial connection to Ontario. Justice Perell reviewed the recent decision of the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda and the "analytical framework and legal principles" set out by the court in that case.

In concluding there was no jurisdiction simpliciter to Ontario, the judge reviewed the "presumptive" factors established by the Supreme Court and found that, the defendant was not domiciled or resident in Ontario; the defendant did not carry on business in Ontario; the tort was committed outside Ontario; and there was no contract connected with the dispute which was made in Ontario.

As for the factor that there was no contract connected with the dispute which was made in Ontario, Justice Perell concluded that the defendant was not a party to the contract between the insurance company and the plaintiff . The plaintiff's claim under her insurance policy could be tried without the defendant as a party (that might explain why the plaintiff was not opposing the defendant's motion). She intended to litigate in Ontario and leave the insurance company with the problem of re-litigating the issue in the United States.

The insurance company argued that the plaintiff's contract action against it had to be brought in Ontario and therefore the insurance company had a right of subrogation against the defendant. It argued that if the Ontario action was stayed against the defendant, it would have to litigate in two different jurisdiction with the possible of inconsistent judgments. Essentially, the insurance company's argument for assumed jurisdiction was that the defendant was a necessary party to the crossclaim and that his presence in the Ontario action was necessary to avoid a multiplicity of proceedings.

Justice Perell rejected the insurance company's argument based on the Ontario Court of Appeal's reasoning in the Club Resorts case.  The Ontario Court of Appeal held that damages being sustained Ontario or the fact that the foreign defendant was a necessary party are not presumptive factors that the court should take into account.

With respect to the issue of forum conveniens, Justice Perell reviewed the list of factors that the courts may consider in determining which forum was the more appropriate forum for the action: The defendant and two witnesses were in New York; the tort occurred in New York;  American law will govern liability; and quantification of damages would be governed by Ontario law. Considering all of these circumstances, the judge declined to exercise the court's jurisdiction. He ruled "It does not strike me as fair or unreasonable to make Ms. Misura travel to the jurisdiction where the action occurred and where the tortfeasor resides".



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