Simon's Megalomaniacal Legal Resources

Attornment - Stay Pending Appeal

. Sakab Saudi Holding Company v. Al Jabri

In Sakab Saudi Holding Company v. Al Jabri (Ont CA, 2021) the Court of Appeal considered a stay pending appeal motion, which is heard on the same principles as an interlocutory injunction. The appeal was of an order below that held that Ontario courts had jurisdiction to heard a lawsuit between a Saudi-based enterprise, and the court below had ordered that the present moving party respond to a Mareva injunction application below. The issue of attornment thus arose, which the Court of Appeal considered at the irreparable harm stage of the stay test [paras 23-36].

. Stuart Budd & Sons Limited v. IFS Vehicle Distributors

In Stuart Budd & Sons Limited v. IFS Vehicle Distributors (Ont CA, 2014) the court considered the issue of attornment in the context of a motion to stay an order below pending it's appeal:

[27] The moving parties assert that they will suffer irreparable harm in several respects if a stay is not granted.

[28] The moving parties submit that, without a stay, they will be forced to choose between risking attornment to the jurisdiction of the Ontario court by filing a defence, or being noted in default and subjected to default proceedings, either of which would irreparably harm their proposed appeal by rendering it moot.

[29] I have some difficulty assessing this argument. I say this based on differing views expressed in recent decisions of this court concerning whether a party risks attornment by taking court-ordered steps in a proceeding in the face of an on-going jurisdictional challenge. I refer to the decision in M.J. Jones Inc. v. Kingsway General Insurance Co. 2004 CanLII 6211 (ON CA), (2004), 72 O.R. (3d) 68 (C.A. – Ch’rs) where at paras. 27-31, Lang J.A. dealt with whether a court order requiring a defendant to deliver a statement of defence would amount to attornment. She held that the defendant’s compliance with such an order might amount to attornment. She therefore held that despite the plaintiff’s undertaking not to treat the defendant’s participation as attornment, refusing a stay could cause irreparable harm.

[30] In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 2011 ONCA 620, 283 O.A.C. 231, at paras. 28-31, Laskin J.A. distinguished M.J. Jones on the basis that the defendant’s responding to the plaintiff’s request for documents outside of the “formal bounds” of the court proceedings would constitute attornment.

[31] More recently, in Van Damme v. Gelber, 2013 ONCA 388 (CanLII), 2013 ONCA 388, 115 O.R. (3d) 470, at paras. 21-23, Doherty J.A. noted that attornment by participation in court proceedings had been addressed in Wolfe v. Pickar, 2011 ONCA 347 (CanLII), 2011 ONCA 347, 332 D.L.R. (4th) 157, where, at para. 44, Goudge J.A. said:

[W]hen a party to an action appears in court and goes beyond challenging the jurisdiction of the court based on jurisdiction simpliciter and forum non conveniens, the party will be regarded as appearing voluntarily, thus giving the court consent-based jurisdiction. That is what happened here.

[32] Justice Doherty also recognized M.J. Jones and Gourmet Resources International Inc. (Trustee of) v. Paramount Capital Corp. (1991), 5 C.P.C. (3d) 140 (Ont. C.A.) as authorities for the proposition that, if a party appears in a court to challenge jurisdiction or seek a stay on the basis of forum non conveniens, any additional steps taken by the party pursuant to an order of the court will not amount to attornment.

[33] While Doherty J.A. expressed the view that taking steps in the proceedings further to a court order would not necessarily constitute attornment, advancing a motion for summary judgment, a motion that went beyond a jurisdictional challenge and was not further to any court order was attornment.

[34] Finally, in Yaiguaje v. Chevron Corp., 2014 ONCA 40 (CanLII), 2014 ONCA 40, 315 O.A.C. 109, at para. 11, MacPherson J.A. (in Chambers), citing Van Damme and BTR, rejected the argument that the party seeking a stay was exposed to irreparable harm based on the risk of attornment.

[35] Here, the responding parties have undertaking not to argue that the moving parties have attorned to the Ontario jurisdiction “by taking any further steps in the action”.

[36] I conclude that in the light of this court’s unresolved position on this issue, and the wording of the undertaking in question, the possibility of being found to have attorned creates some risk of irreparable harm to the moving parties.

. Essar Steel Algoma Inc.

In Essar Steel Algoma Inc. (Re) (Ont CA, 2016) the Court of Appeal considers in detail the issue of what procedural steps by a party can be undertaken before it is considered to have attorned (accepted) jurisdiction of a court where it otherwise challenges it, here in the context of a stay proceeding on appeal. The test for a stay on appeal is essentially the same as for an interlocutory injunction:

Analysis

[51] Over the past decade, judges of this court sitting in Chambers on stay motions have expressed different views about whether a party risks attorning to the jurisdiction of the Ontario court by performing court-ordered procedural steps in the face of the party’s on-going challenge to the court’s jurisdiction. Some decisions have viewed such participation as risking attornment, thereby creating some risk of irreparable harm: M.J. Jones Inc. v. Kingsway General Insurance Co. (2004), 2004 CanLII 6211 (ON CA), 72 O.R. (3d) 68, 242 D.L.R. (4th) 139 (C.A.), at paras. 27-31; Stuart Budd & Sons Ltd. v. IFS Vehicle Distributors ULC, 2014 ONCA 546 (CanLII), 122 O.R. (3d) 472, at paras. 29-36. On the other hand, in Van Damme v. Gelber, 2013 ONCA 388 (CanLII), 115 O.R. (3d) 470, at paras. 21-23, the court minimized any such risk from court-ordered participation, and in Yaiguaje v. Chevron Corp., at para. 11, MacPherson J.A. regarded any risk as a weak factor in the irreparable harm analysis.

[52] I need not express a view on the effect of court-ordered participation in a proceeding on a party’s ability to continue to advance a jurisdictional challenge because decisions of this court uniformly have held that where the responding party provides the court with undertakings of the kind given by Essar in this case, the undertakings significantly reduce or remove the risk of irreparable harm.

[53] In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 283 O.A.C. 321, at para. 14, Laskin J.A. described the undertakings given by BTR:

BTR wants to proceed with the Ontario action. It is content to have LBIE deliver a statement of defence without filing it with the court. It undertakes not to argue that delivery of the statement of defence or participation in examinations for discovery constitute acts of attornment. BTR also undertakes not to invoke the jurisdiction of the Ontario court, by, for example, a motion for summary judgment, while LBIE’s leave motion is outstanding. [Emphasis added.]

[54] Laskin J.A. did not consider the delivery of a statement of defence or participation in discoveries outside of the “formal bounds” of the court proceedings as amounting to attornment: at para. 31. Similar undertakings given in Yaiguaje v. Chevron Corp., led MacPherson J.A., at paras. 11 and 16, to follow the decision in BTR Global and conclude that the moving parties had made a very weak showing that they would suffer irreparable harm.

[55] In light of the undertakings given by Essar to the court in the present case, I conclude that Cliffs have not demonstrated that they would suffer irreparable harm if a stay pending appeal is not granted.