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Contracts - Venue - Jurisdiction Simpliciter

Contracts - Venue - Joinder

Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC (Ont CA, 2016)

In this case the Court of Appeal restates the principles of jurisdiction simpliciter (when a court will take jurisdiction over a contractual dispute based on it's nature), and in particular when it should assume jurisdiction over non-Ontario parties suing other non-Ontario parties in relation to the primary cause of action:
[7] The law on jurisdiction simpliciter of the Ontario Superior Court was set out by the Supreme Court of Canada in Van Breda v. Villages Resort Ltd., 2012 SCC 17 (CanLII). At para. 90 of Van Breda, LeBel J. established four presumptive connecting factors ("PCFs"), any one of which would, if present, entitle a provincial superior court to take jurisdiction over a legal dispute in tort law: (1) the defendant is domiciled or resident in the province; (2) the defendant carries on business in the province; (3) the tort was committed in the province; or (4) a contract connected with the dispute was made in the province.


[9] The appellants argue that the out-of-province plaintiffs cannot be part of this action, and cannot sue an out-of-province defendant in Ontario. They are therefore not properly joined in this action. The appellants advise that if the individual out-of-province plaintiffs were to bring similar actions in their home provinces, the appellants will not contest the jurisdiction of the respective provincial superior courts. This would require four actions in addition to this action in Ontario.


[18] At para. 61, the motion judge made the following observation: “The Supreme Court of Canada made it clear in the Van Breda decision that once the court determines that a presumptive connecting factor has been established and not rebutted it should assume jurisdiction over all aspects of the case” citing paras. 99-100.

[19] In our view, once the action is properly constituted from the perspective of jurisdiction simpliciter, then the issue of efficiency in the litigation becomes relevant with respect to the joinder of other parties, as this court noted in Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2014 ONCA 497 (CanLII), at paras. 46-49. The Supreme Court affirmed this decision in Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, [2016] SCC 30, and noted, at paras. 32 and 44:
The fourth factor also promotes flexibility and commercial efficiency. As seen in Van Breda, all that is required is a connection between the claim and a contract that was made in the province where jurisdiction is sought to be assumed. A “connection” does not necessarily require that an alleged tortfeasor be a party to the contract. To so narrow the fourth presumptive factor would unduly narrow the scope of Van Breda, and undermines the flexibility required in private international law.


It is worth noting that nothing in Van Breda suggests that the fourth factor is unavailable when more than one contract is involved, or that a different inquiry applies in these circumstances. Nor does Van Breda limit this factor to situations where the defendant’s liability flows immediately from his or her contractual obligations, or require that the defendant be a party to the contract: Pixiu Solutions Inc. v. Canadian General-Tower Ltd., 2016 ONSC 906, at para. 28 (CanLII). It is sufficient that the dispute be “connected” to a contract made in the province or territory where jurisdiction is proposed to be assumed: Van Breda, at para. 117. This merely requires that a defendant’s conduct brings him or her within the scope of the contractual relationship and that the events that give rise to the claim flow from the relationship created by the contract: paras. 116-17.

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