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Attornment - Foreign-Originated Litigation

. Lithium Royalty Corporation v. Orion Resource Partners

In Lithium Royalty Corporation v. Orion Resource Partners (Ont CA, 2023) the Court of Appeal considered an attornment concern, here in a private international law (PRIL) case:
[59] First, the Orion Respondents argue that if the proceedings are not stayed, any step they take in these proceedings beyond challenging jurisdiction could constitute attornment, thereby rendering their attornment ground of appeal moot. They rely, in support of this submission, primarily on the decision in M.J. Jones Inc. v. Kingsway General Insurance Company et al., (2004) 2004 CanLII 6211 (ON CA), 72 O.R. (3d) 68, (C.A.) at para. 31.

[60] The line of authority the Orion Respondents rely upon has been overtaken. It is now recognised that there is only a remote prospect that a finding of attornment will be based on litigation steps taken by a party after the opposing party has undertaken not to rely on such steps as acts of attornment: Sakab Saudi Holding Company v. Al Jabri, 2021 ONCA 548, at paras. 26-32; and see, Yaiguaje v. Chevron Corporation, 2014 ONCA 40, 315 O.A.C. 109, at para. 11; Essar Steel Algoma Inc., Re, 2016 ONCA 138, at para. 52.

[61] The risk that attornment will be found based on participation in the continuation of the underlying trial in the face of the undertaking provided in this case is further reduced given that the trial judge has already determined that the Orion Respondents have attorned, and the appeal from that finding is not strong.

[62] Indeed, it is arguable that the proposed Orion respondents — Orion Mine Finance Fund I; Alnitak Holdings, LLC; Bellatrix Ltd., and Orion Mine Finance (Master) Fund LLP (sic) — attorned to jurisdiction in their own right when the counsel who represented them during the argument of the jurisdiction motion and during the parties amendment motion agreed to proceed with a liability hearing into the merits of the general action pending the determination of those motions. It is most unlikely that in doing so the lawyer expected that the liability hearing would have to be redone if the proposed Orion respondents were subsequently named respondents. It is far more likely that the lawyer intended to defend their interests on the merits during the liability hearing and that further acts of attornment have already occurred.

[63] In all of the circumstances, I am not persuaded that the Orion Respondents face irreparable harm by the risk of still further acts of attornment occurring in responding to the continuation of the underlying action.
. Fraser v 4358376 Canada Inc.

In Fraser v. 4358376 Canada Inc. (Ont CA, 2014) the Court of Appeal addressed the issue of attornment by an allegedly foreign defendant to the jurisdiction of Ontario courts. Here the defendant had brought a motion to challenge the court's jurisdiction, but also moved to add additional parties to the litigation - a step which necessitated some additional and related legal activity on their part. The Court of Appeal held that these further legal acts, being necessary to have all required parties before the court to resolve the jurisdictional issue, did not constitute attornment:
[9] We agree with the appellants that the motion judge erred in law by concluding that the steps they took amounted to attornment. In our view, all the steps taken by the appellants are more properly characterized as procedural steps taken within the confines of the jurisdiction motion.

[10] By asking for a temporary stay, the appellants were asserting their position that proper resolution of their jurisdictional motion required that the corporate defendants be present before the court. The temporary stay they requested was for that specific and limited purpose.

[11] In our view, a party who challenges the jurisdiction of the court is entitled to insist upon a proper procedural foundation for the determination of the challenge. Provided that the party’s steps request no more than that, they do not amount to attornment.

[12] As the motion judge decided that the appellants had attorned by seeking a temporary stay, he did not deal with the argument that by asking the court to strike out the amended statement of claim the appellants had attorned. He dealt with that request on the merits and dismissed it.

[13] We find it difficult to understand how the appellants could ask the court to strike the amended statement of claim on the basis that the amendment had followed the original jurisdiction motion since it was only through the amendment that they became parties with an interest in proceeding with the motion. We agree with the motion judge’s reasons dismissing that motion on its merits. On the issue of attornment, however, we conclude that the motion to strike the statement of claim, although ill-founded, was entirely based and dependent upon the appellants’ contention that the courts of Ontario had no jurisdiction to entertain the claim. Like the motion for the temporary stay, the motion to strike the claim was nothing more than a request to have the jurisdictional motion proceed on a proper procedural foundation.

[14] We recognize that decisions of this and other courts have taken a broad view of the kind of steps taken in a proceeding that amount to attornment. See, for example: Wolfe v. Pickar, 2011 ONCA 347 (CanLII), 2011 ONCA 347, 332 D.L.R. (4th) 157; Mid-Ohio Imported Car C. v. Tri-K Investments Ltd. 1995 CanLII 2084 (BC CA), (1995), 129 D.L.R. (4th) 181 (B.C.C.A.). However, the test expressed in those cases is whether the party “…appears in court and goes beyond challenging the jurisdiction of the court based on jurisdiction simpliciter and forum non conveniens”: Wolfe v. Pickar, at para. 44 (emphasis added).

[15] We know of no authority for the proposition that procedural steps brought within the confines of a jurisdiction motion dealing solely with the mechanics of having that motion heard in a proper procedural setting amount to attornment. In our view that is all that occurred in this case. The appellants did not “go beyond challenging the jurisdiction” and the motion judge erred in law in concluding otherwise.
. Trindade v. Jantzi

In Trindade v. Jantzi (Div Ct, 2021) the Divisional Court clarifies that 'attornment' is an aspect of international law, not local (within Ontario law):
[14] The Board made no error in finding that the respondents did not “attorn” to the Superior Court’s jurisdiction. Attornment is a concept that arises in the context of private international law. Counsel for the appellant was not able to identify any case law that supported his argument that the respondents’ participation in the Superior Court application was a form of attornment. Nothing further needs to be said about this issue.
. Wang v. Luo

In Wang v. Luo (Div Court, 2022) the Divisional Court heard an appeal from an International Commercial Arbitration Act, 2017 application in the Superior Court, which allowed the local enforcement of a Chinese international arbitration tribunal. There had been prior Ontario Small Claims activity initiated by the respondent until they eventually proceeded under the Superior Court. The appellant argued that the respondent had attorned to the Small Claims Court:

[9] The Appellant argues that, by commencing the Small Claims Court action, the Respondent has foregone reliance on the arbitration clause and, as put by counsel, “attorned” to the jurisdiction of the Small Claims Court such that it took on the exclusive jurisdiction to hear, consider and decide the dispute. In support of this proposition, the Appellant’s counsel has referred us to a number of cases. We have reviewed those cases, and none of them support the proposition that, on the facts of this case, the Respondent (being the Plaintiff) attorned to the jurisdiction of the Small Claims Court or that the jurisdiction was exclusive. Attornment normally applies to situations where the Defendant acts in acceptance of the Court or Tribunal’s jurisdiction when the Defendant would not otherwise be subject to that jurisdiction.

[10] The cases that the Appellant relies on are all distinguishable from the facts of the case before us. Two examples will illustrate the point. First, the decision in Granville Shipping Co. v. Pegasus Lines Ltd. S.A., 1996 CanLII 4027 (FC), [1996] F.C.J. No. 481, [1996] 2 F.C. 853 is founded on the terms of the arbitration agreement struck by the parties. Pursuant to that agreement, the time for a referral to arbitration had expired by the time the summary judgment motion, the proceeding before the Court, was brought. In Granville, there was also the complicating feature of a counterclaim which is not present in this case.

[11] Second, the decision in Farough v. Financial Control Industries Inc., 2007 BCPC 351, is distinguishable due to the language in British Columbia’s International Commercial Arbitration Act, S.B.C. 1986, c. 14. Section 8 of that Act allows for a stay of a Court action to be granted as long as the motion for the stay is brought “before delivery of any pleadings or taking any other step in the proceedings.” The Ontario legislation has no such provision.

[12] Other cases support a different interpretation. In Legacy Leather International Inc. v. Ward, [2006] O.J. No. 3014, 2006 CanLII 63694 (Ont. S.C.J.), Lax J. held that the fact that a party had filed a response to a pleading and had agreed to a timetable did not amount to a waiver of the arbitration clause. In Serratore v. 1634394 Ontario Ltd., 2009 CanLII 67421 (Ont. S.C.J.), MacKenzie J. applied the reasoning in Legacy and stated (at para. 16):
In the instant case, there is no evidence to suggest that the plaintiff or the defendant “knew” of the arbitration clause, in the sense that they directed their minds to it, or had unequivocal or conscious intentions to abandon or waive the rights to arbitrate set out in the Agreement.
[13] The same reasoning can be applied to this case. There was no evidence before the Application judge to suggest that the Respondent (Plaintiff in the Small Claims Court action) had an unequivocal or conscious intention to abandon or waive the right to arbitration.

[14] Counsel for the Appellant argued that there was an obligation on the part of the Respondent to take the Small Claims Court matter to trial. This argument is inconsistent with the endorsement that was made at the end of the settlement conference. The Deputy Judge stated that the matter “may” be taken to trial. There was no obligation to go to trial. Similarly, there was no obligation on the part of the Respondent to obtain a stay of the Small Claims Court action.

[15] For these reasons we reject the Appellant’s position on this issue.


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Last modified: 25-10-23
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