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The Long Arm of Canadian Courts - Supreme Court of Canada Clarifies the Test for Jurisdiction over Foreign Defendants
Posted in Commercial

In a recent case, Club Resorts Ltd. v. Van Breda, the Supreme Court of Canada elaborated on the “real and substantial connection” test, bringing greater clarity and predictability to the determination of whether a court is entitled to assume jurisdiction over a case which also has ties to a foreign jurisdiction.  In doing so, the Supreme Court of Canada has greatly expanded the range of cases over which Canadian courts are now likely to assume jurisdiction.

In Van Breda, the Court heard appeals of two separate cases in which individuals were injured while on vacation in Cuba. The actions were brought in Ontario against several parties, including Club Resorts Ltd., a company incorporated in the Cayman Islands that managed the two hotels where the individuals were staying. Club Resorts challenged the court’s jurisdiction. In both cases, the motion judges held that the Ontario courts had jurisdiction and that Ontario was a more appropriate forum. The two cases were heard together before the Ontario Court of Appeal, where both appeals were dismissed.

In one of the cases, Morgan Van Breda suffered catastrophic injuries while on a beach in Cuba. Ms. Van Breda’s spouse, Mr. Berg had made arrangements for a trip to Cuba with an Ottawa-based travel agent whereby he would provide squash lessons to resort members in exchange for free accommodation. In the other case, Claude Charron drowned while scuba diving in Cuba. Dr. Charron and his wife had booked an all-inclusive vacation package that featured scuba diving.

The Supreme Court of Canada ruled the Ontario courts had jurisdiction.  In doing so, they set out a non-exhaustive list of presumptive connecting factors for tort cases which tie the legal situation to the forum. If the party arguing that the court should assume jurisdiction establishes any one connecting factor, a presumption of jurisdiction arises. The party challenging the assumption of jurisdiction then has the burden of rebutting that presumption by showing that the connecting factor either does not indicate a relationship between the subject matter of the litigation and the forum, or that it indicates only a weak relationship. If the presumption of jurisdiction is not rebutted, the court must hold that it has jurisdiction; unless it determines to decline jurisdiction based on the principles of forum non conveniens.

In an increasingly interconnected world, Van Breda represents an attempt by the Supreme Court of Canada to make more certain the rules which permit litigants to seek the assistance of Canadian courts.  In doing so, the Court appears to have stretched the long arm of Canadian courts.


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