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Private International Law - The Leading Van Breda Case

. Haaretz.com v. Goldhar

In Haaretz.com v. Goldhar (SCC, 2018) the Supreme Court of Canada split into several rulings, with three judges dissenting in the result. These extracts are from the largest (3 judge) faction in the majority, and they deal the venue issue in an internet defamation case - with the focus being on libel 'tourism' [plaintiffs 'shopping' a case for favourable law and logistics]. This extract summarizes the basics of the private international law regarding venue:
B. Fundamental Principles Underlying the Conflict of Laws: Balancing Order and Fairness

[26] In Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, LeBel J., for a unanimous Court, carefully explained the jurisdiction simpliciter analysis, which applies to the assumption of jurisdiction, as well as the forum non conveniens doctrine, which is meant to guide courts in deciding whether to exercise their jurisdiction. These principles, along with those relating to the recognition of foreign judgments, represent the common law conflicts rules of Canadian private international law and must be understood and analysed as a cohesive whole (Van Breda, at para. 16).

[27] Central to a proper understanding of the conflicts rules of Canadian private international law, and to the resolution of this appeal, is an appreciation of the distinct roles played by jurisdiction simpliciter and forum non conveniens (Van Breda, at paras. 46 and 56, affirming the reasoning of Sharpe J.A. in Muscutt v. Courcelles (2002), 2002 CanLII 44957 (ON CA), 60 O.R. (3d) 20 (C.A.), and Charron Estate v. Village Resorts Ltd., 2010 ONCA 84, 98 O.R. (3d) 721). The jurisdiction simpliciter analysis is meant to ensure that a court has jurisdiction. This will be the case where a “real and substantial connection” exists between a chosen forum and the subject matter of the litigation. The forum non conveniens analysis, on the other hand, is meant to guide courts in determining whether they should decline to exercise that jurisdiction in favour of a “clearly more appropriate” forum.

[28] The importance of maintaining this distinction flows from the discrete concerns underlying each analysis and the nature of the relevant factors at each stage. The “real and substantial connection” test at the jurisdiction simpliciter stage prioritizes order, stability and predictability by relying on objective connecting factors for the assumption of jurisdiction. Conversely, the forum non conveniens analysis emphasizes fairness and efficiency by adopting a case-by-case approach to identify whether an alternative jurisdiction may be “clearly more appropriate”. I will briefly elaborate on the principles underlying each analysis.

[29] In defining the content of the “real and substantial connection” test for the assumption of jurisdiction, this Court was faced with a choice between an approach based on objective connecting factors and a case-by-case approach (Van Breda, at para. 30). This choice was characterized by the tension between predictability and consistency, on the one hand, and fairness and efficiency, on the other (Van Breda, at para. 66). Ultimately, the Court decided to prioritize order and predictability at the jurisdiction simpliciter stage, in the following terms:
Given the nature of the relationships governed by private international law, the framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up “on the fly” on a case-by-case basis — however laudable the objective of individual fairness may be. As La Forest J. wrote in Morguard, there must be order in the system, and it must permit the development of a just and fair approach to resolving conflicts. Justice and fairness are undoubtedly essential purposes of a sound system of private international law. But they cannot be attained without a system of principles and rules that ensures security and predictability in the law governing the assumption of jurisdiction by a court. Parties must be able to predict with reasonable confidence whether a court will assume jurisdiction in a case with an international or interprovincial aspect.
(Van Breda, at para. 73)

To achieve this order and predictability, the Court opted to rely on a set of defined presumptive connecting factors at the jurisdiction simpliciter stage (Van Breda, at para. 78).

[30] This objectively ascertainable and relatively low bar to establishing that a chosen forum has jurisdiction, on a prima facie basis, reflects the constitutional imperative underlying the jurisdiction simpliciter stage, as described in Van Breda:
From a constitutional standpoint, the Court has, by developing tests such as the real and substantial connection test, sought to limit the reach of provincial conflicts rules or the assumption of jurisdiction by a province’s courts. . . . In its constitutional sense, it places limits on the reach of the jurisdiction of a province’s courts and on the application of provincial laws to interprovincial or international situations. [Emphasis added; para. 23.]
The constitutional purpose of the jurisdiction simpliciter test is to establish a minimum threshold for the assumption of jurisdiction in order to prevent improper assumptions of jurisdiction (Van Breda, at para. 26; see also Hunt v. T&N plc, 1993 CanLII 43 (SCC), [1993] 4 S.C.R. 289, at p. 325). Its objective is to delineate circumstances in which a court has jurisdiction, not circumstances in which it should exercise it (which is the purpose of forum non conveniens). The prioritization of order and predictability at the jurisdiction simpliciter stage is also consistent with the principle of comity, which is central to Canadian private international law (Van Breda, at para. 74).

[31] This prioritization of order and stability at the jurisdiction simpliciter stage, through the adoption of objective presumptive connecting factors, is meant to work in tandem with a flexible case-by-case approach to forum non conveniens. Once it is established that a court has jurisdiction, the forum non conveniens doctrine requires a court to determine whether it should exercise such jurisdiction.

[32] The purpose of the forum non conveniens analysis is to temper any potential rigidity in the rules governing the assumption of jurisdiction and “to assure fairness to the parties and the efficient resolution of the dispute” (Van Breda, at para. 104). This is necessary given this Court’s recognition that jurisdiction “may sometimes be established on a rather low threshold” (Van Breda, at para. 109). By focusing “on the contexts of individual cases”, the forum non conveniens stage plays an important role in striking a balance between order and fairness (Van Breda, at para. 105).
. Club Resorts Ltd. v. Van Breda

The case of Club Resorts Ltd. v. Van Breda (SCC, 2012) is the leading international case addressing the 'real and substantial connection' test (also called the issue of 'jurisdiction simpliciter'), and considering the forum non conveniens exception (argued when the defendant asserts that a non-Ontario jurisdiction is more suited to hear the case).

First on the 'real and substantial connections' test:
[90] To recap, in a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:
(a) the defendant is domiciled or resident in the province;

(b) the defendant carries on business in the province;

(c) the tort was committed in the province; and

(d) a contract connected with the dispute was made in the province.

[91] As I mentioned above, the list of presumptive connecting factors is not closed. Over time, courts may identify new factors which also presumptively entitle a court to assume jurisdiction. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized presumptive connecting factors;

(b) Treatment of the connecting factor in the case law;

(c) Treatment of the connecting factor in statute law; and

(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.

[100] To recap, to meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. In these reasons, I have listed some presumptive connecting factors for tort claims. This list is not exhaustive, however, and courts may, over time, identify additional presumptive factors. The presumption of jurisdiction that arises where a recognized presumptive connecting factor — whether listed or new — exists is not irrebuttable. The burden of rebutting it rests on the party challenging the assumption of jurisdiction. If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors exist or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine, which I need not address in these reasons. If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of the doctrine of forum non conveniens. I will now turn to that issue.
But, like any legal rule, the real and substantial connection 'test' has exceptions, in this case two of them. The first exception is where the answer to the real and substantial factors test (alone) is "yes, you do have jurisdiction" that the case should be heard in Ontario and the exception is the "forum non conveniens" doctrine. Where the answer to the real and substantial connection test is "no, you don't have jurisdiction", the exception is called the "forum of necessity" doctrine.

So where a party doesn't want the case to be heard in Ontario, and the facts are against them, they will want to argue the 'forum non conveniens' doctrine. You will see a lot of defendants (mostly large corporations) trying to avoid Ontario's courts. Likewise, you will see a lot of plaintiffs - where the facts are for the defendant that the case be heard elsewhere than Ontario - argue the 'forum of necessity' doctrine [though the issue of 'forum of necessity' is not addressed extensively in Van Breda].

So now on to the doctrine of forum non conveniens:
(9) Doctrine of Forum Non Conveniens and the Exercise of Jurisdiction

[101] As I mentioned above, a clear distinction must be drawn between the existence and the exercise of jurisdiction. This distinction is central both to the resolution of issues related to jurisdiction over the claim and to the proper application of the doctrine of forum non conveniens. Forum non conveniens comes into play when jurisdiction is established. It has no relevance to the jurisdictional analysis itself.

[102] Once jurisdiction is established, if the defendant does not raise further objections, the litigation proceeds before the court of the forum. The court cannot decline to exercise its jurisdiction unless the defendant invokes forum non conveniens. The decision to raise this doctrine rests with the parties, not with the court seized of the claim.

[103] If a defendant raises an issue of forum non conveniens, the burden is on him or her to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. The defendant must identify another forum that has an appropriate connection under the conflicts rules and that should be allowed to dispose of the action. The defendant must show, using the same analytical approach the court followed to establish the existence of a real and substantial connection with the local forum, what connections this alternative forum has with the subject matter of the litigation. Finally, the party asking for a stay on the basis of forum non conveniens must demonstrate why the proposed alternative forum should be preferred and considered to be more appropriate.

[104] This Court reviewed and structured the method of application of the doctrine of forum non conveniens in Amchem. It built on the existing jurisprudence, and in particular on the judgment of the House of Lords in Spiliada Maritime Corp. v. Cansulex Ltd., [1987] 1 A.C. 460. The doctrine tempers the consequences of a strict application of the rules governing the assumption of jurisdiction. As those rules are, at their core, based on establishing the existence of objective factual connections, their use by the courts might give rise to concerns about their potential rigidity and lack of consideration for the actual circumstances of the parties. When it is invoked, the doctrine of forum non conveniens requires a court to go beyond a strict application of the test governing the recognition and assumption of jurisdiction. It is based on a recognition that a common law court retains a residual power to decline to exercise its jurisdiction in appropriate, but limited, circumstances in order to assure fairness to the parties and the efficient resolution of the dispute. The court can stay proceedings brought before it on the basis of the doctrine.

[105] A party applying for a stay on the basis of forum non conveniens may raise diverse facts, considerations and concerns. Despite some legislative attempts to draw up exhaustive lists, I doubt that it will ever be possible to do so. In essence, the doctrine focusses on the contexts of individual cases, and its purpose is to ensure that both parties are treated fairly and that the process for resolving their litigation is efficient. For example, s. 11(1) of the CJPTA provides that a court may decline to exercise its jurisdiction if, “[a]fter considering the interests of the parties to a proceeding and the ends of justice”, it finds that a court of another state is a more appropriate forum to hear the case. Section 11(2) then provides that the court must consider the “circumstances relevant to the proceeding”. To illustrate those circumstances, it contains a non-exhaustive list of factors:
(a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum;

(b) the law to be applied to issues in the proceeding;

(c) the desirability of avoiding multiplicity of legal proceedings;

(d) the desirability of avoiding conflicting decisions in different courts;

(e) the enforcement of an eventual judgment; and

(f) the fair and efficient working of the Canadian legal system as a whole. [s. 11(2)]

[108] Regarding the burden imposed on a party asking for a stay on the basis of forum non conveniens, the courts have held that the party must show that the alternative forum is clearly more appropriate. The expression “clearly more appropriate” is well established. It was used in Spiliada and Amchem. ...

[109] The use of the words “clearly” and “exceptionally” should be interpreted as an acknowledgment that the normal state of affairs is that jurisdiction should be exercised once it is properly assumed. The burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternative forum, it would be fairer and more efficient to do so and that the plaintiff should be denied the benefits of his or her decision to select a forum that is appropriate under the conflicts rules. The court should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation. But the court must be mindful that jurisdiction may sometimes be established on a rather low threshold under the conflicts rules. Forum non conveniens may play an important role in identifying a forum that is clearly more appropriate for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute.

[110] As I mentioned above, the factors that a court may consider in deciding whether to apply forum non conveniens may vary depending on the context and might include the locations of parties and witnesses, the cost of transferring the case to another jurisdiction or of declining the stay, the impact of a transfer on the conduct of the litigation or on related or parallel proceedings, the possibility of conflicting judgments, problems related to the recognition and enforcement of judgments, and the relative strengths of the connections of the two parties.

[111] Loss of juridical advantage is a difficulty that could arise should the action be stayed in favour of a court of another province or country. This difficulty is aggravated by the possible conflation of two different issues: the impact of the procedural rules governing the conduct of the trial, and the proper substantive law for the legal situation, that is, in the context of these two appeals, the proper law of the tort. In considering the question of juridical advantage, a court may be too quick to assume that the proper law naturally flows from the assumption of jurisdiction. However, the governing law of the tort is not necessarily the domestic law of the forum. This may be so in many cases, but not always. In any event, if parties plead the foreign law, the court may well need to consider the issue and determine whether it should apply that law once it is proved. Even if the jurisdictional analysis leads to the conclusion that courts in different states might properly entertain an action, the same substantive law may apply, at least in theory, wherever the case is heard.

[112] A further issue that does not arise in these appeals is whether it is legitimate to use this factor of loss of juridical advantage within the Canadian federation. To use it too extensively in the forum non conveniens analysis might be inconsistent with the spirit and intent of Morguard and Hunt, as the Court sought in those cases to establish comity and a strong attitude of respect in relations between the different provinces, courts and legal systems of Canada. Differences should not be viewed instinctively as signs of disadvantage or inferiority. This factor obviously becomes more relevant where foreign countries are involved, but even then, comity and an attitude of respect for the courts and legal systems of other countries, many of which have the same basic values as us, may be in order. In the end, the court must engage in a contextual analysis, but refrain from leaning too instinctively in favour of its own jurisdiction. At this point, the decision falls within the reasoned discretion of the trial court. The exercise of discretion will be entitled to deference from higher courts, absent an error of law or a clear and serious error in the determination of relevant facts, which, as I emphasized above, takes place at an interlocutory or preliminary stage. I will now consider whether the Ontario courts properly assumed jurisdiction in these cases and, if so, whether they should have declined to exercise it on the basis of forum non conveniens.


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Last modified: 02-07-20
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