By Caroline Swiderski
Reviewed by Landan Peleikis
In Sinclair v. Venezia Turismo, the Supreme Court of Canada clarified the test for jurisdiction simpliciter, particularly as it pertains to the final presumptive connecting factor provided by the Court in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (“Van Breda”) – whether a contract connected to the dispute was made in the relevant jurisdiction.[1]
Justice Côté, writing for the majority, emphasized the need to plead with sufficient particularity to prove the existence of a contract. Failure to do so will foreclose the finding of a real and substantial connection between the contract at issue, the dispute, and the jurisdiction. Significantly, this must be done for every contract being relied upon to establish jurisdiction simpliciter.
Additionally, the majority’s reasons offered some much-needed guidance regarding a defendant’s rebuttal after the presumptive connecting factor is established. This second stage must be kept distinct from both the initial stage as well as the forum non conveniens analysis.
Factual Background
Duncan Sinclair held an American Express Centurion credit card, which allowed him to use a concierge and travel agent service provided by Centurion Travel Services.[2] Centurion Travel Services carried on business in Canada on behalf of Amex Canada Inc. (“Amex”).[3]
In 2017, Mr. Sinclair used this service to book a trip to Europe for him, his wife and his child (the “Sinclairs”).[4] As part of this trip, the Sinclairs had planned to visit Venice, Italy.[5] While still in Florence, Mr. Sinclair used this service to reserve a water taxi ride for transport from the airport in Venice to their hotel.[6]
The agent with whom Mr. Sinclair spoke had secured an estimate and a booking reservation for said taxi from Carey International Inc. (“Carey International”).[7] The taxi itself was owned by Venice Limousine S.R.L. (“Venice Limousine”) and it was dispatched by Venezia Turismo.[8]
On the day of their arrival in Venice, the Sinclairs boarded the water taxi, which was being operated by Cristian Dordit.[9] During transit, the taxi struck a large wooden structure.[10] Mr. Sinclair was seriously injured in the collision and required prolonged hospitalization.[11]
Upon their return to Canada, the Sinclairs brought an action seeking damages against Amex, Carey International, Venezia Turismo, Venice Limousine, Medov S.R.L., Narduzzi e Solemar S.L.R. (“Narduzzi”), John Does Corp and Mr. Dordit.[12] Three of these defendants – Venice Limousine, Venezia Turismo, and Narduzzi (the “Italian defendants”) – moved to have the action dismissed as against them or stayed for want of jurisdiction.[13]
The Ontario Superior Court of Justice
The motion judge found that presumptive jurisdiction existed and that the Italian defendants failed to establish Italy was clearly a more convenient forum. She therefore dismissed their motion and directed that the Ontario action could continue.
The Sinclairs relied upon two contracts to establish the existence of the fourth presumptive connecting factor from Van Breda – both of which were found to have been made in Ontario.[14] The motion judge also found that these contracts were connected to the dispute underlying the action at issue.[15]
The judge noted that the Italian defendants need not have been parties to these agreements. It sufficed that their alleged conduct brought them “within the scope of the contractual relationship”.[16] Moreover, the events that gave rise to the Sinclairs’ claim flowed from this contractual relationship.[17] As such, the Ontario court had the jurisdiction to hear this matter.
The Court of Appeal for Ontario
The Italian defendants appealed solely on the issue of jurisdiction simpliciter. The Court of Appeal overturned the motion judge’s decision and dismissed the Sinclairs’ action as against the Italian defendant for want of jurisdiction.[18] However, the Court’s decision was split amongst a majority and a concurring opinion.
The majority held that the Sinclairs’ pleadings did not show a contract made in Ontario and connected to the dispute.[19] In doing so, it warned against taking an expansive view of the fourth connecting factor and held that a plaintiff must establish territorial competence against every defendant.[20] Moreover, the majority noted that the contractual relationship between the Sinclairs and Amex Canada did not involve the Italian defendants whatsoever.[21] Even if the presumptive connecting factor had been established, the majority found the Italian defendants had rebutted the presumption.[22]
Harvison Young J.A. concurred with the majority on the preceding point but disagreed with their reasoning on the first stage of the test for jurisdiction simpliciter. In particular, he found that the motion judge had not erred in determining that the two contracts, which were made in Ontario, bore sufficient connection to the dispute for an Ontario court to assume jurisdiction.[23]
The Supreme Court Decision
In a 5-4 split, the Supreme Court of Canada dismissed the appeal. The majority’s opinion began with a synopsis of the caselaw on the real and substantial connection test for jurisdiction simpliciter.
In brief, the Court in Van Breda provided a non-exhaustive list of four factors, one of which, if made out by the plaintiff, would allow a court to presumptively assume jurisdiction over the relevant dispute.[24] These factors are 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.[25]
The defendant may, then, rebut this presumption by “showing that the factor does not, in the circumstances of the case, point to a real relationship between the dispute and the forum”.[26] If the defendant fails in this, then the court must accept jurisdiction over the dispute.[27] The first stage of this analysis pertains to the mere existence of a connecting factor, while the second stage goes to the strength of this connection.[28]
The majority provided guidance on approaching the above test for the fourth connecting factor. It highlighted the importance of establishing the existence of a contract formed in the relevant jurisdiction as a precondition for the rest of the analysis.[29] As such, parties to a dispute must provide sufficient pleadings to make out the requisite elements of a contract (i.e. offer, acceptance, and consideration).[30] Failure to do so “will necessarily foreclose a finding of a real and substantial connection on the basis of that contract”. [31]
In the context of multiple contracts, as in the case at bar, the court should be critical of the strength of the connection between each of these contracts, the dispute, and the forum.[32] As the majority made unequivocally clear, a party should not “plead on the basis of a vague ‘constellation of contracts’”.[33] Contracts that, on their own, would be unable to ground a presumption of jurisdiction cannot do so together. That said, a formal contractual analysis may not be required if the existence and features of a contract [are] obvious from the pleadings.[34]
Once a contract’s existence has been made out, its connection to the dispute must be established. A defendant need not be party to the agreement, but his or her conduct must bring them “within the scope of the contractual relationship” and “the events that give rise to the claim [must] flow from the relationship created by the contract”.[35] Although the majority did not rule upon whether the good arguable case standard was appropriate in this context, it did assert that the standard is low.[36] Nevertheless, this analysis must be undertaken for each defendant.
At the second stage of the test for jurisdiction simpliciter, the defendant rebutting the presumption of jurisdiction must prove that “the strength of the contract’s connection with the forum, the subject matter of the dispute, and the defendant is non-existent or weak”.[37]
In gauging the strength of this connection, the court should undertake a contextual analysis specific to the case before it.[38] However, it may look to factors such as contract formation, how and where the contract contemplated performance, the situs of the tort, and the location of the parties.[39] The court may also inquire into the defendant’s reasonable expectations.[40] The burden placed on the defendant is similar to that placed on the plaintiff at the first stage.[41]
The rebuttal stage remains distinct from the doctrine of forum non conveniens. The former is focused on the objective assessment of the strength of the connection between the contract and the tort.[42] In contrast, the latter focuses on the subjective interests of the parties and the ends of justice.[43]
Applying the above, the majority reviewed the varying positions of the parties as well as the lower courts’ findings to identify the relevant contracts, of which there were three.[44] Notably, the majority held the reservation of the water taxi did not constitute a contract given the lack of consideration.[45] Of the three agreements that the majority held to be contracts, it discounted two for not having been made in Ontario.[46]
The majority accepted that the third contract – the Centurion Cardmember Agreement – had been made in Ontario despite the Sinclairs’ lack of sufficient particularity in their pleadings.[47] The majority also held this contract was connected with the dispute, as it was through this agreement that Mr. Sinclair was able to engage the services of Centurion and reserve a water taxi in Venice.[48] In other words, the events that gave rise to the Sinclairs’ claim flowed from the above contractual relationship.
Nevertheless, the Italian defendants successfully rebutted the presumption of jurisdiction. According to the majority, the facts of this case were easily distinguishable from those in Van Breda or Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30.[49] The connection between the Centurion Cardmember Agreement and the dispute was tenuous at best.[50] Even weaker was the connection between the Centurion Cardmember Agreement and the Italian defendants themselves.[51] The implications of holding otherwise, the majority stated, would be absurd – “simply by virtue of working with tourists, the Italian defendants [would have to] be prepared to answer legal proceedings in far-flung jurisdictions”.[52] As such, the Court dismissed the appeal.[53]
Takeaways
As this area of private international law continues to develop, the foregoing makes clear that specificity in a party’s pleadings regarding relevant contracts in a dispute is paramount. Not doing so may prohibit the court from assuming jurisdiction.
However, when there are multiple contracts, the court must look to each for a connection to the dispute. A contract that lacks such a connection will be disregarded by the court for the purposes of the jurisdiction simpliciter analysis.
Finally, the rebuttal of this connection must remain a separate and distinct stage of the analysis. It should not be subsumed under the first stage, nor should it be put off to the subsequent forum non conveniens analysis. Assessing the strength of the connection between the contract and the tort is a prerequisite for the court to assume jurisdiction.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid at para. 5.
[7] Ibid.
[8] Ibid.
[9] Ibid.
[10] Ibid.
[11] Ibid at para. 18.
[12] Ibid at para. 6.
[13] Ibid.
[14] Ibid at para. 21.
[15] Ibid.
[16] Ibid.
[17] Ibid.
[18] Ibid at para. 25.
[19] Ibid at para. 31.
[20] Ibid at para. 30.
[21] Ibid at para. 31.
[22] Ibid at para. 32.
[23] Ibid at para. 36.
[24] Ibid at paras. 43-51.
[25] Ibid at para. 47.
[26] Ibid at para. 49.
[27] Ibid.
[28] Ibid at para. 50.
[29] Ibid at para. 54.
[30] Ibid.
[31] Ibid.
[32] Ibid at para. 55.
[33] Ibid.
[34] Ibid at para. 56.
[35] Ibid at para. 58.
[36] Ibid at para. 59.
[37] Ibid at para. 66.
[38] Ibid at para. 73.
[39] Ibid at para. 67.
[40] Ibid at para. 72.
[41] Ibid at para. 74.
[42] Ibid at para. 81.
[43] Ibid.
[44] Ibid at paras. 85, 97.
[45] Ibid at paras. 119-120.
[46] Ibid at para. 127.
[47] Ibid at paras. 103, 128.
[48] Ibid at para. 128.
[49] Ibid at paras. 131, 137-138.
[50] Ibid at para. 135.
[51] Ibid at para. 139.
[52] Ibid.
[53] Ibid at para. 143.
