Once again, a Canadian resident’s vacation nightmare has ended up before the Supreme Court of Canada (“SCC”) on the issue of when a Canadian court can take jurisdiction over claims against foreign defendants.
It is not surprising that a Canadian injured in another country would seek to have their claim against those responsible for their injury or loss adjudicated at home, rather than abroad. It is also not surprising that foreign defendants would challenge the jurisdiction of the Canadian court chosen by the plaintiff.
In Sinclair v. Venezia Turismo, 2025 SCC 27, the Sinclairs, who were injured in a water taxi accident in Venice, sued in Ontario. The Italian subset of the named defendants brought a motion to stay or dismiss the action against them for want of jurisdiction.
While the plaintiffs’ claims were in tort, any actionable tort committed by the Italian defendants was committed in Italy, so jurisdiction could not be established on the basis of a tort being committed in Ontario. As a result, the plaintiffs sought to rely on the fourth common law presumptive connecting factor for tort cases set out in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (“Van Breda”), i.e., that a contract connected with the dispute was made in the province. The plaintiffs alleged that there were three contracts underlying the fateful excursion on the water taxi in Venice, each of which was related to Mr. Sinclair’s use of his Amex card, through which a complimentary travel agent service was available and assisted him.
In a five-to-four decision, the SCC affirmed the conclusion of the Ontario Court of Appeal that the Ontario courts had no jurisdiction over the dispute as it pertained to the Italian defendants.
While the case originated in Ontario, where the question of whether there is a real and substantial connection to the jurisdiction is assessed based on the common law guidance of the SCC and appellate courts, the decision of the SCC is still relevant in jurisdictions that have enacted a Court Jurisdiction and Proceedings Act (“CJPTA”).
The SCC majority decision is an important read for a number of reasons:
- It revisits the two-stage analysis to be applied in a challenge to jurisdiction simpliciter (territorial competence in CJPTA jurisdictions).
- It breathes life into the second stage of that analysis, in which the onus is on the defendant to rebut a presumptive connecting factor. This second stage is a means of preventing jurisdictional overreach and ensuring consistency with principles of order and fairness that underpin conflict of laws rules.
- It confirms that jurisdiction must be assessed in relation to each defendant; jurisdiction over one defendant does not imply that there is jurisdiction over all defendants.
- It stresses the importance of pleading with sufficient particularity the elements of the presumptive connecting factor relied upon to found jurisdiction, in this case the existence of a contract formed in Ontario.
The motion judge determined that the Ontario courts had jurisdiction over the dispute, finding that both the credit card agreement between the plaintiff and Amex Canada and the contract between Amex Canada and a third-party service provider for the water taxi ride had both been made in Ontario. The Ontario Court of Appeal reversed the decision, with a majority finding that those contracts were not sufficiently connected with the dispute to establish presumptive jurisdiction, and, in the alternative, agreeing with the concurring judge that the presumption of jurisdiction was rebutted because those contracts had “little or nothing to do with the subject matter of the litigation.”
Two-stage analysis
The two stages of a court’s analysis on whether it has jurisdiction simpliciter based on a real and substantial connection between the jurisdiction and the dispute are:
- Whether the plaintiff has established a presumptive connecting factor (set out in the case law or, where applicable, the CJPTA). The focus at this stage is the existence of a connection.
- Whether the defendant has rebutted the presumption of jurisdiction by showing that the factor does not, in the circumstances of the case, point to a real relationship between the dispute and the forum. The focus as this stage is the strength of the connection.
Stage two: rebutting the presumptive connection
Justice Côté endorses the submission of an intervenor that the rebuttal stage involves a shift in burden and perspective, not a shift in difficulty, effectively rejecting the approach in recent decisions of the B.C. Court of Appeal that described the burden on the defendant at this stage as “heavy”.
Agreeing with the concurring justice in the Ontario Court of Appeal, Justice Côté explains that the more broadly one approaches the question of the existence of a presumptive connecting factor, the more relevant is the question of what should be considered at the rebuttal stage.
She references some academic commentary that makes the observation that courts do not reliably address the rebuttal stage but instead focus exclusively on the first stage of the analysis. She urges parties to plead with sufficient precision to make their positions on each stage of the test clear and calls on courts to offer responsive reasons that address all of the relevant arguments.
No bootstrapping allowed
Two of the defendants (Amex Canada and Carey International) had attorned to Ontario’s jurisdiction. Justice Jamal, who authored the dissenting reasons, took the view that this attornment could be used to establish a presumption that the Ontario Court had jurisdiction over “the claims against the Italian defendants.”
The majority rejected this proposition, stating that there should be no “bootstrapping” whereby the legitimate establishment of jurisdiction over one defendant is taken uncritically to imply jurisdiction over all defendants. Justice Côté emphasizes that jurisdiction should be examined from the perspective of each defendant rather than in light of the factual and legal situation writ large. When a court takes jurisdiction over a claim, it assumes authority to make orders against each defendant; for this power to be exercised legitimately, the court must be satisfied that the requisite connection exists in respect of each defendant who may be subject to that power.
Content of pleadings where connecting factor is a contract made in the jurisdiction
The majority explains that when relying on this connecting factor, it is incumbent on the plaintiff to plead the facts necessary to make out the essential elements of a contract – offer, acceptance and consideration. A general sense that a contractual relationship exists is insufficient. It is also insufficient to assert jurisdiction based on a “vague constellation of contracts” instead of pleading the particulars of all contracts relied upon.
Interaction of Van Breda factors and CJPTA
Parties pleading a real and substantial connection as the jurisdictional basis of their claim in CJPTA jurisdictions can be forgiven for focusing on the codified presumptive connections contained in the statute (s. 10 in B.C., for example).
There is no listed presumptive connection of “a contract connected with a dispute that was made in the province (or territory)” in the CJPTA.
However, the list in each of the relevant statutes is introduced by the words, “Without limiting the right of the plaintiff to prove other circumstances that constitute a real and substantial connection…”.
Thus, courts in the CJPTA jurisdictions have permitted plaintiffs to rely on the fourth common law factor from Van Breda as either an additional category of presumptive connecting factor or as a component of the express factors listed in the CJPTA that concern contractual obligations.
What about the dissenting reasons? What remains unresolved?
The majority placed the defendants at the centre of the analysis, emphasizing that jurisdiction must be established for each defendant individually and the presumptive connecting factors must be evaluated from the defendant’s perspective. The Italian defendants had neither a relationship with Amex Canada, nor awareness of the contractual relationship between Amex Canada and the plaintiffs or other service providers. By contrast, previous “connected contract” cases had involved either defendants who were parties to the related contract (as in Van Breda) or to a contract that was at the heart of the dispute (as in Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30). The defendants could not have reasonably expected that they would be subject to Ontario’s jurisdiction simply because of the plaintiff’s cardholder agreement with Amex Canada.
In contrast, Justice Jamal, writing for the four-justice minority, placed the plaintiffs and the circumstances giving rise to their claim at the centre of the analysis. Justice Jamal preferred to favor the interests of innocent Canadian travelers over foreign tortfeasor corporations, as suggested by his opening words (“When Canadians are injured…”). As a result, the minority found that the presumptive connecting factor establishing jurisdiction had not been rebutted. In its view, the objectives of order and fairness would not be served by requiring the plaintiffs to bring their entire claim in Italy or pursue separate overlapping claims against each set of defendants in multiple jurisdictions.
The majority expressly declined to comment on whether a plaintiff had to meet the “good arguable case” standard at the first stage of the analysis, noting that although the question was unsettled, the parties had not raised it.
Justice Jamal stated that the threshold to establish jurisdiction simpliciter over an extra-provincial defendant was that of a “good arguable case” supporting a presumptive connecting factor. He critiqued the majority for failing to articulate a standard and for questioning the “good arguable case” standard without argument on the point.
What lower courts will do with the schism and strongly worded disagreement of the majority and minority with each other’s views on this issue remains to be seen.