What Happens in Italy, Stays in…? New Appellate Decision Interpreting Van Breda
In the recent decision of Sinclair v. Amex Canada Inc.[i], the Ontario Court of Appeal reaffirmed the principles in the oft-cited jurisdictional decision of Van Breda[ii], and articulated a (perhaps disputable) framework for their application in a given case, following the appeal of three Italian companies from the dismissal of their motion for an order dismissing or staying the action for lack of jurisdiction.
Factual Background/Motion Decision
The tort action arose from an accident that occurred on July 25, 2017 in Venice, Italy. The plaintiffs/respondents were injured when the water taxi in which they were passengers crashed into a wooden structure.
The plaintiffs had arranged their travel through Amex Canada Inc. operating under the name of Centurion Travel Service (“Centurion”). One of the plaintiffs had used his Centurion card membership to book the trip, enjoying benefits through that membership.
The day prior to the incident, said plaintiff booked transportation from the Venice airport to the plaintiffs’ hotel, which included the fateful water taxi ride. Centurion contacted a defendant, Carey International, Inc., which in turn contacted one of the defendants/appellants, Venezia Turismo, a water taxi dispatching company. Per the pleadings, Venezia Turismo then contacted another of the defendants/appellants, Venice Limousine S.R.L., the owner of the water taxi involved in the accident and employer of the operator of the water taxi.
It appears that the defendants, Venezia Turismo, Venice Limousine S.R.L., and Narduzzi e Solemar S.L.R. (whose role in events is unclear from the decision) brought a motion to dismiss or, alternatively, stay the action, on the basis that the Ontario Superior Court of Justice lacked jurisdiction over them. The motion judge dismissed the motion, seemingly on the basis of one of the presumptive connecting factors from the Van Breda analysis being met – namely that a contract connected with the dispute was made in Ontario. Those three defendants appealed.
Majority Reasons
In Van Breda, the Supreme Court set out four presumptive connecting factors that, prima facie, entitle a Canadian court to assume jurisdiction over an out-of-province defendant in a tort dispute, as follows:
- the defendant is domiciled or resident in the province;
- the defendant carries on business in the province;
- the tort was committed in the province; and,
- a contract connected with the dispute was made in the province.
In the within case, the majority of the Court of Appeal held that the motion judge did not apply these connecting factors properly, and erred in finding that the fourth presumptive connecting factor sufficed to give the Ontario court jurisdiction over the appellants. Indeed, the majority commented that some authorities subsequent to Van Breda have failed to apply the factors “with the care and rigour that was intended” to prevent jurisdictional overreach.
To that end, the majority explained that the application of the presumptive connecting factors is to be considered from the perspective of the defendant disputing jurisdiction, independently. In other words, there must be a presumptive connecting factor to each individual defendant. A presumptive connecting factor applicable to one defendant, who may not be disputing jurisdiction, does not mean the court can overlook the analysis from the perspective of the defendant that is disputing jurisdiction. In the within case, per the majority, this was an error of the motion judge.
Although Amex Canada Inc. did not (and could not) take issue with being subject to the Ontario court’s jurisdiction, that did not mean that all other parties with some connection to the subject matter of the claim were then subject to the same jurisdiction.
The respondents argued that the Van Breda approach had been notably broadened by the subsequent Supreme Court decision in Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP[iii], in which Abella J. noted, in relation to the fourth presumptive connecting factor, that a “connection” does not necessarily require the alleged tortfeasor to be a party to the contract and, further:
It is sufficient that the dispute be “connected” to a contract made in the province or territory where jurisdiction is proposed to be assumed. 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.
However, the majority did not accept that position of the respondents, distinguishing the factual underpinnings in Cassels Brock from those in the within case. Further, the majority did not agree that the Supreme Court in Cassels Brock intended to expand the fourth presumptive factor as suggested by the respondents, as it would amount to inconsistency with the intention to limit territorial reach in Van Breda. The majority echoed the sentiment of the dissent in Cassels Brock, that the fourth presumptive connecting factor should be limited to tort claims “where the defendant’s liability in tort flows immediately from [the defendant’s] own contractual obligations, and where that contract was ‘made in’ Ontario.”
Here, the appellants did not have any contractual obligations vis-à-vis the respondents, either directly or indirectly, and the contract as between the respondents and Amex Canada Inc. did not contemplate or require the appellants’ involvement. The majority found that the appellants could not reasonably fall within the jurisdictional reach of Canadian courts simply because the respondents had a contractual relationship with Amex Canada Inc.
The majority noted that, even if they were incorrect as to the proper interpretation and scope of Cassels Brock, the appellants would still succeed on appeal as they had rebutted the presumption of the fourth connecting factor – an aspect of the inquiry that was not considered by the motion judge. As per Van Breda, the mere presence of a presumptive connecting factor does not conclude the jurisdictional inquiry, as the presumptions may be rebutted, with the fundamental question being whether a “real and substantial connection” exists between the dispute and the court seeking to assume jurisdiction.
Here, the majority found that the appellants had rebutted the presumption of the fourth connecting factor by demonstrating that the contract as between the respondents and Amex Canada Inc. had little or no relation to the subject matter of the litigation, and did not even contemplate involvement as between the respondents and appellants.
Moreover, the majority found that none of the appellants would reasonably be expected to be called to answer legal proceedings in Ontario, with all of the relevant underlying events having taken place in Italy. Further:
The fact that the respondents used a credit card company, that happens to carry on business in Ontario, to make their travel arrangements does not establish a relationship between the respondents and the appellants that could sustain a finding of jurisdiction.
Concurring Reasons
In concurring reasons, Harvison Young J.A. disagreed with the majority’s conclusion that there was no presumptive connecting factor of an Ontario contract connected to the dispute and that the motion judge erred in finding that the fourth presumptive connecting factor had been established. Her Honour also did not find that the motion judge made the error of failing to consider the issue of territorial competence from the perspective of each defendant, as concluded by the majority, attributing the majority’s conclusion in that regard to a misreading (i.e. a mechanical rather than functional reading) of the motion judge’s reasons.
The concurring reasons in Sinclair highlight post-Cassels Brock jurisprudence that speaks to an increasingly functional approach to the question underlying the fourth presumptive connecting factor of whether there is a contract connected to the dispute, and that adopts the majority’s approach in Cassels Brock (including with respect to the analysis not changing even where the dispute involves a multiplicity of contracts or parties). Mindful of that jurisprudence and the broad and expansive interpretation given to the term “connected to”, Harvison Young J.A. articulated that the approach to be undertaken for the fourth presumptive connecting factor is a required “connection between the claim and a contract that was made in the province where jurisdiction is sought to be assumed.”
Here, per Harvison Young J.A., the motion judge properly found that the appellants’ alleged tortious conduct in operating the water taxi service flowed from the Centurion cardholder agreement as between the respondents and Amex Canada Inc., which contract was undoubtedly formed in Ontario. Per the majority in Cassels Brock, that was the requisite threshold to establish the fourth presumptive connecting factor.
That said, Harvison Young J.A. agreed that the motion judge erred in failing to consider whether the presumption was rebutted, and agreed with the majority’s conclusion in that regard.
Accordingly, the appeal was allowed and the action stayed against the appellants for want of jurisdiction.
Conclusion
The decision and seeming disconnect between the majority and concurring reasons in Sinclair suggest that this may not be the end of the Italian saga, as it does seem to raise issues with conflicting case law and the intended application and scope of the majority reasoning in Cassels Brock. We will have to wait and see what is to come. However, in the interim, with the majority’s reasoning in Sinclair, it would seem there is at least room to argue the reach of the fourth presumptive connecting factor in cases where jurisdiction poses an issue.
[i] 2023 ONCA 142 [Sinclair].
[ii] Club Resorts Ltd. v. Van Breda, 2012 SCC 17 [Van Breda]
[iii] 2016 SCC 30 [Cassels Brock]