Bouchard v. Mitsubishi Motor Sales of Canada Inc.

Bouchard v. Mitsubishi Motor Sales of Canada Inc.
Court (s) Database
Federal Court Decisions
Date
2010-01-19
Neutral citation
2010 FC 56
File numbers
T-382-09
Notes
Digest
Decision Content
Federal Court
Cour fédérale
Date: 20100119
Docket: T-382-09
Citation: 2010 FC 56
[ENGLISH TRANSLATION]
Ottawa, Ontario, January 19, 2010
PRESENT: The Honourable Mr. Justice Leumieux
BETWEEN:
NANCY BOUCHARD
Plaintiff
and
MITSUBISHI MOTOR SALES
OF CANADA INC.
and
MITSUBISHI MOTORS NORTH AMERICA INC.
and
MITSUBISHI MOTORS CORPORATION
Defendants
REASONS FOR JUDGMENT AND JUDGMENT
Introduction and facts
[1] This is an appeal by Nancy Bouchard, under section 51 of the Federal Courts Rules (the Rules), from the decision by Prothonotary Morneau (the Prothonotary) on August 27, 2009, on motions to strike the statement by the plaintiff, filed by two of the defendants under Rule 221(1)(a) on the ground that this Court allegedly does not have jurisdiction to hear them. The claim by Nancy Bouchard is a proposed class action. The proposed class action, of which she is a member, would consist of [translation] “Any natural person, body corporate, corporation, company or association that purchased or leased from a dealership in Canada, since June 1, 2006, a new vehicle manufactured, imported or distributed by the defendants”. (Emphasis added.)
[2] This action is based on sections 36 and 45 of the Competition Act (the Act), which I have reproduced as Appendix A. The plaintiff alleges a conspiracy between the Mitsubishi companies and their American and Canadian dealerships to limit and control the import and free circulation of their products (new vehicles and parts) in the United States. This conspiracy artificially maintains the price of Mitsubishi vehicles in Canada 25% higher than they would be on a free-trade market. This conspiracy is manifest in several ways, including certain restrictions or obstacles to the import to Canada of Mitsubishi vehicles purchased in the United States by Canadian residents and the failure to recognize warranties from those purchases in Canada.
[3] The nature of the conspiracy alleged by Nancy Bouchard is important to the outcome of the appeal. I reproduce as Appendix B certain paragraphs of the plaintiff’s statement that set out the allegations regarding this conspiracy.
[4] The two motions to strike were filed, on the one hand by the defendant Mitsubishi Motor Vehicle Sales of Canada Inc. (Mitsubishi Canada) and, on the other hand, by the defendant Mitsubishi Motors North America Inc. (Mitsubishi America or MMNA). The third defendant, Mitsubishi Motors Corporation (Mitsubishi Japan) was not involved in this proceeding, as it was not served the action at the time of the hearing on the motions.
[5] When the Prothonotary considered the motion to strike submitted by Mitsubishi America, the latter had not filed its defence. The evidence on which Mitsubishi America based its motion to strike was the affidavit by its senior legal counsel, evidence that was allowed as an exception to Rule 221(2) because the issue before the Court was one of jurisdiction.
[6] In his decision on August 27, 2009 (reasons cited as Nancy Bouchard v. Mitsubishi Motor Sales of Canada et al, 2009 FC 852), Prothonotary Morneau:
1) struck the action by Nancy Bouchard against Mitsubishi America due to a lack of jurisdiction; and
2) dismissed the motion by Mitsubishi Canada, being of the view that this Court had jurisdiction to hear it.
The decision by Prothonotary Morneau
[7] The Prothonotary observed “that this statement of claim by the plaintiff is similar to, if not substantially the same as, an equivalent proceeding filed in May 2008 by the plaintiff with the Superior Court of Québec, with that proceeding being struck the Court in December 2008 against all defendants due to the lack of ratione loci jurisdiction under article 3148 of the Civil Code of Quebec (C.C.Q.).”
[8] Before Prothonotary Morneau, Mitsubishi claimed “that this Court, by proceeding with the same analysis and application of article 3148 of the C.C.Q. as that done by the Superior Court of Québec in December 2008, must arrive at the same conclusion of a lack of jurisdiction”. He dismissed that argument on the ground that Mitsubishi Canada, a Canadian corporation was wrong in raising the jurisdiction of the Federal Court based on the application of article 3148 of the C.C.Q., noting that, in her statement, Nancy Bouchard cited the Act in alleging that the defendants breached the provisions of subsection 45(1) of the Act and, thus, all members of the class are entitled to claim damages from the defendants under subsection 36(1) of the Act.
[9] He found that subsection 36(3) of the Act explicitly states that this Court has jurisdiction over actions set out in subsection 36(1) of the Act and concluded as follows at paragraph 13 of his reasons:
Consequently, with respect to Mitsubishi Canada, the jurisdiction of this Court over the plaintiff’s action is therefore clearly established through subsection 36(3), and this finding means that the main remedy of Mitsubishi Canada’s motion for lack of jurisdiction is without merit. (Emphasis added.)
[10] There was no appeal by Mitsubishi Canada.
[11] As for Mitsubishi America, the Prothonotary is of the view that the analysis cannot end with the presence of subsection 36(3) of the Act. He bases this on recent jurisprudence from this Court, particularly the decision by my colleague de Montigny J. in Desjean v. Intermix Media Inc., [2006] F.C.J. No. 1754 (Desjean), a decision affirmed by the Federal Court of Appeal, 2007 FCA 365. After explaining that, in Desjean, the Court had to assess whether it had jurisdiction over the American defendant Intermix Media Inc. against the allegations by Desjean that, through its activities, Intermix was guilty of deceptive, fraudulent and illegal practices, thus violating subsections 52(1) and 52(1.1) and paragraph 52(2)(e) of the Act, he cited paragraph 6 of the decision by de Montigny J. to illustrate the alleged activities of Intermix:
[6] In his statement of claim for a proposed class action, Mr. Desjean alleges that Intermix offers ostensibly free software programs, such as screensavers and games, that anyone can download. Without disclosure to consumers, however, Intermix surreptitiously tacks onto these programs one or more additional programs that deliver ads and other invasive content. Thus, when Mr. Desjean installed a “free” Intermix screensaver or game on his computer, he also unwittingly installed one or more spyware programs. In this manner, known as “bundling”, Intermix has spread its advertising programs onto Mr. Desjean’s hard drive. [Emphasis added.]
[12] At paragraph 23 of his decision, Prothonotary Morneau adopts the finding of de Montigny J. in Desjean regarding the means for courts to assume jurisdiction over an out-of-country defendant:
23 There are three ways in which a court may assert jurisdiction over an out-of-country defendant. It may assume jurisdiction if the defendant is physically present within the territory of the court. Second, the foreign resident may consent to submit the dispute to the Canadian court’s jurisdiction. Third, the court may declare itself competent to hear the case, in appropriate circumstances. This case raises the third possibility. [Emphasis added.]
[13] He considers that “here too, in the case of Mitsubishi America, we must assess whether the circumstances justify it”, and cites paragraph 4 of the reasons of Pelletier J. in an appeal of the trial decision in which de Montigny J. found that the Federal Court did not have jurisdiction over Intermix:
[4] [...] After summarizing the facts and the parties’ arguments, he briefly reviewed the case law on the jurisdiction of Canadian courts pertaining to foreign defendants. Relying on Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 (Morguard), Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022 (Tolofson) and Hunt v. T&N plc, [1993] 4 S.C.R. 289 (Hunt), he concluded that, before exercising their jurisdiction over a foreign defendant who has no presence in Canada and who has not submitted to their jurisdiction, Canadian courts require a real and substantial connection between the defendant, the cause of action and Canada. The judge then turned to an analysis of the circumstances giving rise to the dispute, in light of the factors delineated in Muscutt v. Courcelles (2002), 213 D.L.R. (4th) 577 (Court of Appeal for Ontario) (Muscutt), to determine whether there was in fact a real and substantial connection between the respondent, the cause of action as set out in Mr. Desjean’s statement of claim and Canada.
[Emphasis by the Prothonotary]
[14] As indicated, in support of its motion to strike, Mitsubishi America filed an affidavit from John P. McElroy, senior legal counsel for the corporation, that Prothonotary Morneau found: “highlights as follows a wide range of factors that compare closely with the factors retained by De Montigny J. in Desjean”.
[15] I cite certain excerpts from that affidavit:
9) MMNA is a corporation having its domicile in the State of California, more specifically in the city of Cypress.
10) MMNA does not currently have, nor did it have, at anytime during the Class Period a place of business in the Province of Quebec or in Canada.
11) MMNA does not hold or possess any assets in the Province of Quebec or in Canada, nor did it hold or possess any during the Class Period.
12) MMNA does not currently have, nor did it have at any time during the class period any employees in the Province of Quebec or in Canada.
13) MNA manufactures vehicles and car parts which through its wholesale activities may end up in the Canadian markets but MMNA is not involved, in any way in the retailing of vehicles or car parts in any Canadian market.
14) MMNA does not sell or distribute motor vehicles or any other product at the retail level in Canada nor in Quebec.
15) MMNA holds no bank accounts anywhere in Canada nor does it pay any provincial or federal taxes in the Canada.
16) MMNA is not registered with any federal authority as exercising commercial activities anywhere in Canada and is not registered in any provincial jurisdiction in Canada as a corporate entity doing business in said jurisdictions.
17) During the Class Period MMNA did not advertise its products in Canada or Quebec, or have any marketing strategy for the Canadian Market. Any advertising or marketing strategy in effect would have been exclusive to the US automobile retail market.
18) All of MMNA’s management, pricing, merchandising, and operational decisions are conducted outside of Canada and in no way involve any Canadian retail market. [Emphasis added.]
[16] Mr. McElroy was not cross-examined on his affidavit. Prothonotary Morneau concluded as follows regarding the jurisdiction of this Court over Mitsubishi America:
22 I therefore consider that, faced with the factors above and the Federal Court’s decision, as affirmed in appeal, in Desjean, here we must find that none of these factors, taken in isolation or as a whole, as well as vague allegations from the plaintiff’s statement of claim, do not allow us to find that there is a real and substantial link between Mitsubishi America, the cause of action as set out in the plaintiff’s statement of claim and Canada. [Emphasis added.]
Analysis
(a) Standard of Review
[17] Following an appeal to this Court of a decision by a prothonotary, there are two possible standards of review:
1) A de novo consideration of the decisions if the underlying issue was
“vital to the issue of the case”.
2) In all other circumstances, the appellant must establish that the Prothonotary’s order
was clearly wrong in that, in exercising his discretion, the Prothonotary relied on a wrong principle or a misapprehension of the facts. See the decision by Décary J. in Merck & Co. Inc. v. Apotex, [2014] 2 F.C.R. 459 (F.C.A.), at paragraph 19, which I repeat.
19 To avoid the confusion which we have seen from time to time arising from the wording used by MacGuigan J.A., I think it is appropriate to slightly reformulate the test for the standard of review. I will use the occasion to reverse the sequence of the propositions as originally set out, for the practical reason that a judge should logically determine first whether the questions are vital to the final issue: it is only when they are not that the judge effectively needs to engage in the process of determining whether the orders are clearly wrong. The test would now read: “Discretionary orders of prothonotaries ought not be disturbed on appeal to a judge unless: (a) the questions raised in the motion are vital to the final issue of the case, or (b) the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts.”
[Emphasis added.]
[18] In the case at hand, there is no doubt that the issue before the Prothonotary was vital. It was a motion to strike that was allowed. It put an end to the action by Nancy Bouchard against Mitsubishi America. I must therefore review the decision de novo.
(b) The parties’ submissions
[19] I find that there is no need to elaborate on the written and oral submissions by the parties because, at the hearing, due to a lack of time, I allowed counsel for the plaintiff to provide a written response and counsel for Mitsubishi to make certain comments on the Competition Act with a right to response for the other party.
[20] Following the observations received, it seems to me that there is no difference between the parties regarding the fact that the test applicable to address the issue of the Court’s jurisdiction over Mitsubishi America is that of a real and substantial connection and that the relevant factors for evaluating that test are those set out by Sharpe J. in Muscutt. The difference between the parties is regarding the application of those factors, which I will address later in these reasons.
[21] Regarding the scope of the Competition Act in the event of a conspiracy “entered into only by companies each of which is, in respect of every one of the others, an affiliate”, I believe that it is premature to respond due to a lack of evidence regarding the nature of the affiliation between the Mitsubishi respondents and a lack of submissions by the parties regarding the interpretation to be given to subsection 45(8) of the Act.
(c) The applicable principles from jurisprudence
[22] When the issue before a Court is to determine the circumstances in which it should affirm its jurisdiction (or assume jurisdiction) over a case that is before it, the recognized test in Canadian law since the Supreme Court decisions in Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393 (Moran) and Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 (Morguard) is that of a real and substantial connection between the jurisdiction of the court and the cause of action.
[23] In Moran, an action had been commenced before a court in that province by the estate of William Moran, an electrician, who died following an electrical shock received while removing a defective bulb manufactured by Pyle National, which carried on no business in that province; all its manufacturing and assembling operations took place in Ontario or in the United States. Pyle sold all its products to distributors and none directly to consumers. Pyle had no property or assets in that province. The Supreme Court recognized that Saskatchewan Courts had jurisdiction to hear the action in the case.
[24] In Moran, Dickson J. wrote the reasons of the Court. He is of the opinion that existing tests for determining when a tort has been committed are too arbitrary to be recognized in contemporary jurisprudence. He prefers the test of a real and substantial connection to determine that a tort “occurred in any country substantially affected by the defendant’s activities or its consequences and the law of which is likely to have been in the reasonable contemplation of the parties”. He applied that test to a foreign defendant that carelessly manufactured a product in a foreign jurisdiction which then entered the Canadian market. He is of the opinion that, if it were reasonably foreseeable that the defective product would cause damage and be used where the plaintiff used it, then the forum in which the plaintiff suffered damage is entitled to exercise judicial jurisdictions over the foreign defendant. [Emphasis added.] He adds the following:
This rule recognizes the important interest a state has in injuries suffered by persons within its territory. It recognizes that the purpose of negligence as a tort is to protect against carelessly inflicted injury and thus that the predominating element is damage suffered. By tendering his products in the market place directly or through normal distributive channels, a manufacturer ought to assume the burden of defending those products wherever they cause harm as long as the forum into which the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods. This is particularly true of dangerously defective goods placed in the interprovincial flow of commerce. [Emphasis added.]
[25] In Morguard, the issue before the Supreme Court was whether the courts in British Columbia should recognize a judgment by a court in Alberta in a personal action for a mortgage debt that exceeded the value of the land that Mr. De Savoye had mortgaged while residing in Alberta, but had changed for British Columbia before the taken against him by Morguard before the courts in Alberta. Notwithstanding the fact that he was served the action, the defendant took no steps to appear in Alberta. The Supreme Court ruled that the courts of British Columbia should recognize the judgment issued against the defendant in Alberta “so long as that court has properly, or appropriately, exercised jurisdiction in the action”.
[26] In Muscutt v Courcelles, (2002) 213 D.L.R. 4th 477 (Muscutt), Sharpe J. of the Court of Appeal for Ontario summarized the principles applicable in determining “whether Ontario Courts should assume jurisdiction over out-of-province defendants in claims for damage sustained in Ontario as a result of a tort committed elsewhere”.
[27] The facts before Sharpe J. were as follows:
A passenger in a motor vehicle, Mr. Muscutt, a resident of Ontario, was seriously injured in an accident in Alberta.
He returned to Ontario, experienced pain and suffering, received medical care and lost earnings, all as a result of the harm suffered outside his province of residence.
He brought an action before the Ontario Superior Court against the defendants, who were residents of Alberta. In Muscutt, Sharpe J. adopted the test of a real and substantial connection to determine whether the Ontario court should assume jurisdiction to hear the case. He developed eight useful factors for assessing the existence of such a connection:
The connection between the forum and the plaintiff’s claim
A connection between the forum and the defendant
Unfairness to the defendant in assuming jurisdiction
Unfairness to the plaintiff in not assuming jurisdiction
The involvement of other parties to the suit
The court’s willingness to recognize and enforce a judgement from another country rendered on a similar jurisdictional basis
Whether the case is interprovincial or international in nature
Comity and the standards jurisdiction, recognition and enforcement in other countries in the international community
[28] In his reasons, Sharpe J. citing the Supreme Court of Canada in Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897 (Amchem), distinguishes between assuming jurisdiction and forum non conveniens. He quotes Sopinka J. in Amchem, at page 912: “Frequently, there is no single forum that is clearly the most convenient or appropriate for the trial of the action but rather several which are equally suitable alternatives.”According to the Judge, the doctrine of forum non conveniens allows a court to decline to exercise its jurisdiction if another forum is more appropriate considering the following elements:
The location of the majority of the parties
The situation regarding evidence – the location of key witnesses
and evidence
Contractual provisions that specify the applicable law
The avoidance of multiplicity of proceedings and the possibility of contradictory
judgments
The applicable law and its weight in comparison to the factual questions to be decided
Geographical factors suggesting the natural forum
Depriving a party of an advantage available in the chosen forum.
[29] As in Desjean, at trial and in appeal, I agree with the factors chosen by Sharpe J. in Muscutt to assess the existence of a real and substantial connection between the forum and the elements relevant to the action. I find that, for the reasons cited by Sharpe J., these factors reflect very well the basic principles of international private law as assessed by the Supreme Court. I will explain.
[30] As noted by La Forest J. in Morguard and Le Bel J. in Spar Aerospace Ltd. v. Mobile Satellite Corp., [2002] 4 S.C.R. 205 (Spar):
14. The private international law rules engaged in the case at bar are derived largely from a web of interrelated principles that underlie the private international legal order. […]
…
20. [...] “the twin objectives sought by private international law in general [...] [are] order and fairness.” [...] [Emphasis added.]
[31] In Morguard, La Forest J., citing author Hessel E. Yntema in “The Objectives of Private International Law”, notes: “As is evident throughout his article, what must underlie a modern system of private international law are principles of order and fairness, principles that ensure security of transactions with justice.”
[32] As indicated, La Forest J. in Morguard set out the obligation of a court to give full faith and credit to the judgments given by a court in another province, so long as that court “has properly, or appropriately, exercised jurisdiction in the action”, being of the view “[b]oth order and justice militate in favour of the security of transactions.”
[33] Later in his judgment, La Forest J. adds that the recognition of a judgment based on the test of having properly and appropriately exercised jurisdiction may “[...] meet the requirements of order and fairness to recognize a judgment given in a jurisdiction that had the greatest or at least significant contacts with the subject matter of the action. But it hardly accords with principles of order and fairness to permit a person to sue another in any jurisdiction, without regard to the contacts that jurisdiction may have to the defendant or the subject-matter of the suit … Thus, fairness to the defendant requires that the judgment be issued by a court acting through fair process and with properly restrained jurisdiction.” La Forest J. thus recognizes the difficulty that arises when a defendant resides outside the jurisdiction of the court. He is also aware that “If the courts of one province are to be expected to give effect to judgments given in another province, there must be some limit to the exercise of jurisdiction against persons outside the province.” The solution, according to La Forest J., is the application of the test of real and substantial connection. [Emphasis added.]
[34] An overview of jurisprudence from the Supreme Court of Canada, not only in Moran and Morguard, but in:
1) R. v. Libman, [1985] 2 S.C.R. 178, a case in which the issue was which court
should hear the trial of a person accused of international fraud and conspiracy to commit fraud.
2) Hunt v. T&N plc, [1993] 4 S.C.R. 289, in which the issue was the jurisdiction
of the British Columbia Supreme Court in a case involving an action brought before it by a resident of that province who was seeking damages against Quebec companies that had manufactured goods from asbestos fibres.
3) Tolofson v. Jensen, [1994] 3 S.C.R. 1022, in which the issue was to determine the rule
for choosing the applicable law regarding motor vehicle accidents involving
residents of different provinces.
4) Spar, above, in which the issue was to determine the court’s jurisdiction in the
context of prejudice suffered in carrying out an international contract.
5) Beals v. Saldanha, [2003] 3 S.C.R. 516, in which the issue was recognition
by a court in Ontario of a foreign judgment for damages against residents of Ontario made by a court in the State of Florida.
shows the scope and flexibility of the concept of a real and substantial connection that was the test applied in each of the cases.
[35] The inherent flexibility the Supreme Court wanted to associate with the real and substantial connection test is easily seen in the following excerpts from jurisprudence:
In Moran, Dickson J. noted at paragraph 12:
“Generally speaking, in determining where a tort has been committed, it is unnecessary, and unwise, to have resort to any arbitrary set of rules” [being of the opinion that] “The place of acting and the place of harm theories are too arbitrary and inflexible to be recognized in contemporary jurisprudence.” [Emphasis added.]
2) This passage led La Forest J. to write the following in Morguard, at paragraph 47:
[...] At the end of the day, he rejected any rigid or mechanical theory for determining the situs of the tort. Rather, he adopted “a more flexible, qualitative and quantitative test”, posing the question, as had some English cases there cited, in terms of whether it was “inherently reasonable” for the action to be brought in a particular jurisdiction, or whether, to adopt another expression, there was a “real and substantial connection” between the jurisdiction and the wrongdoing. [...] [Emphasis added.]
3) A few years later, La Forest J. wrote the reasons of the Court in Hunt, in which
he stated the following regarding the flexibility behind the test of a real and substantial connection:
58 In Morguard, a more accommodating approach to recognition and enforcement was premised on there being a “real and substantial connection” to the forum that assumed jurisdiction and gave judgment. Contrary to the comments of some commentators and lower court judges, this was not meant to be a rigid test, but was simply intended to capture the idea that there must be some limits on the claims to jurisdiction. Indeed I observed (at p. 1104) that the “real and substantial connection” test was developed in Indyka v. Indyka, [1969] 1 A.C. 33, in a case involving matrimonial status (where sound policy demands generosity in recognition), and that in a personal action a nexus may need to be sought between the subject-matter and the territory where the action is brought. I then considered the test developed in Moran v. Pyle National (Canada) Ltd., supra, for products liability cases as an example of where jurisdiction would be properly assumed. The exact limits of what constitutes a reasonable assumption of jurisdiction were not defined, and I add that no test can perhaps ever be rigidly applied; no court has ever been able to anticipate all of these. [...] [Emphasis added.]
4) In Hunt, at page 326 of the Supreme Court Reports, he writes:
56 [...] Whatever approach is used, the assumption of and the discretion not to exercise jurisdiction must ultimately be guided by the requirements of order and fairness, not a mechanical counting of contacts or connections. [...] [Emphasis added.]
5) The following year, La Forest J. wrote in Tolofson:
40 To prevent overreaching, however, courts have developed rules governing and restricting the exercise of jurisdiction over extraterritorial and transnational transactions. In Canada, a court may exercise jurisdiction only if it has a “real and substantial connection” (a term not yet fully defined) with the subject matter of the litigation; see Moran v. Pyle National (Canada) Ltd., 1973 CanLII 192 (SCC), [1975] 1 S.C.R. 393; Morguard, supra; and Hunt, supra. This test has the effect of preventing a court from unduly entering into matters in which the jurisdiction in which it is located has little interest. In addition, through the doctrine of forum non conveniens a court may refuse to exercise jurisdiction where, under the rule elaborated in Amchem, supra (see esp. at pp. 921, 922, 923), there is a more convenient or appropriate forum elsewhere. [Emphasis added.]
6) According to Sharpe J. in Muscutt, the general language used by the Supreme Court to express the content of a real and substantial connection was “to allow flexibility”. He stated the following:
36 The language that the Supreme Court has used to describe the real and substantial connection test is deliberately general to allow for flexibility in the application of the test. In Morguard, at pp. 1104-1109, the Court variously described a real and substantial connection as a connection “between the subject-matter of the action and the territory where the action is brought”, “between the jurisdiction and the wrongdoing”, “between the damages suffered and the jurisdiction”, “between the defendant and the forum province”, “with the transaction or the parties”, and “with the action” [Emphasis added]. In Tolofson, at p. 1049, the Court described a real and substantial connection as “a term not yet fully defined”. [Emphasis added.]
7) The application of the real and substantial connection test is not limited to civil offences; it applies to criminal law (Libman) and contract law, which highlights the need for flexibility and the ability to adapt to circumstances.
(d). The motion to strike
[36] The Prothonotary struck the plaintiff’s statement of claim and dismissed her action on the grounds that this Court did not have jurisdiction over just Mitsubishi America following a motion filed by it under Rule 221(1)(a), which authorizes this Court, on a motion, to order that a pleading, or anything contained therein, be struck out if it discloses no reasonable cause of action. Rule 221(2) states that no evidence shall be heard on a motion for an order under paragraph 1(a).
[37] The principles applicable to striking-off under Rule 221(1)(a) are well-established and can be summarized as follows:
This rule allows this Court to strike an action for lack of jurisdiction
(MIL Davie Inc. v. Société d’Exploitation et de Développement d’Hibernia Ltée, [1998]
F.C.J. No. 614 (MIL Davie), at paragraph 7)
Rule 221(2), which prevents evidence from being heard, does not apply in the case of a
motion to strike under Rule 221(1)(a) on the grounds of a lack of jurisdiction
(MIL Davie, at paragraph 8)
Generally speaking, when an objection is taken to its jurisdiction, the
Court must be satisfied that jurisdictional facts or allegations of such facts [emphasis added] supporting an attribution of jurisdiction can be found in the pleadings and in the affidavits filed in support of or in response to the motion (MIL Davie, at paragraph 8).
In the case of a motion to strike, the Court must assume that the facts
alleged in the statement are accurate (Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at page 991 (Hunt/Carey). See also Moran, at paragraph 13).
In this case, the burden was on Mitsubishi America to demonstrate that its motion was
“plain and obvious” (see Hunt/Carey, at p. 972). In other words, Mitsubishi America had to show this Court that it was obvious and beyond doubt that this Court did not have jurisdiction over it (see Hodgson v. Ermineskin Indian Band No. 942, [2000] F.C.J. No. 2042, at paragraphs 4 and 5).
(e) Application of the principles to this case
[38] With a view to a de novo review of the motion to strike filed by Mitsubishi America and given all the evidence before me, I find, for the following reasons, that Nancy Bouchard’s appeal must be allowed. The result is that the Mitsubishi America motion to strike is dismissed.
[39] Mitsubishi America had a heavy onus to overcome. It had to demonstrate, based on all the evidence on record, that it was plain and obvious that this Court, applying the real and substantial connection test, did not have jurisdiction over it.
[40] As for the evidence before me, I must assume, for the purposes of this motion, that the facts set out in Nancy Bouchard’s statement are true. Moreover, I accept as true the facts in the affidavit by Mr. McElroy, as he was not cross-examined.
[41] A full reading of the plaintiff’s statement, particularly paragraphs in the chapter entitled [translation] “Conspiracy by the respondents”, clearly shows, not vaguely or imprecisely, the nature of the alleged prejudice resulting from the alleged conspiracy: a higher purchase price paid by Canadian consumers than they would pay without the conspiracy by the defendants. The remedy set out in paragraph 78E of the statement is to order the respondents, jointly and severally, to pay all members of the class an amount equal to a formula based on the price of Mitsubishi vehicles. I note that the alleged conspiracy between the respondents and the alleged negative consequences are not limited to one province, but are seen across the country. I also note that no damages are being sought from the Mitsubishi dealerships.
[42] The affidavit by Mr. McElroy, considered overall, is limited in scope, in my view, as the facts that he relates aim to demonstrate the absence of Mitsubishi America in Canada (except for the fact that the affiant states in paragraph 13 of his affidavit that “MMNA manufactures vehicles and car parts which through its wholesale activities may end up in Canadian markets but MMNA is not involved, in any way in the retailing of vehicles or car parts in any Canadian market”), which indicates a certain presence in Canada in terms of distribution. [Emphasis added.] On reading his affidavit, I note more specifically that Mr. McElroy did not deny the existence of a conspiracy between the three Mitsubishi companies to limit the free circulation of their vehicles in Canada. Moreover, his affidavit did not deny that the defendants were related or associated and why.
[43] Regardless, jurisprudence on the real and substantial connection test states that a connection between the defendant and the forum is an important factor, but not a necessary factor. In Muscutt, at paragraph 74, Sharpe J. finds that: “[...] In my view, to hold otherwise would be contrary to the Supreme Court of Canada’s direction that the real and substantial connection test is flexible. It would also be contrary to the weight of Canadian appellate authority outlined above. [...]” In Saldanha, writing for the majority, Major J. adopted the same position at paragraphs 22 and 23 of his reasons:
22 Modern ideas of order and fairness require that a court must have reasonable grounds for assuming jurisdiction where the participants to the litigation are connected to multiple jurisdictions.
23 Morguard established that the courts of one province or territory should recognize and enforce the judgments of another province or territory, if that court had properly exercised jurisdiction in the action, namely that it had a real and substantial connection with either the subject matter of the action or the defendant. A substantial connection with the subject matter of the action will satisfy the real and substantial connection test even in the absence of such a connection with the defendant to the action. [Emphasis added.]
[44] In Muscutt, Sharpe J. noted that the defendant had no contact with the forum in Ontario, but found that the Ontario court had jurisdiction based on the real and substantial connection test. According to him, that test requires that all relevant factors be identified for each case. The factors set out in Muscutt are useful, but none are determining and necessary; new factors are possible if required by the principles of order and fairness. All relevant factors must be weighed together and the weight afforded them can vary.
[45] I also believe that the Prothonotary felt that he was bound by Desjean when he struck Mitsubishi America from the cause of action, despite the fact that there were significant differences between the two cases.
[46] Desjean does not at all address the principles applicable to a striking-off, although the motion by Mitsubishi was filed under Rule 221(1)(a). In that case, however, De Montigny J. recognized at paragraph 22 of his reasons that the assumption of jurisdiction against a foreign defendant always raises complex issues.
[47] In Desjean, my colleague analyzed the doctrine of forum non conveniens; he was of the view that California was a more appropriate forum than Canada to hear the case and, for that reason, exercised his discretion to refuse jurisdiction over Intermix. The impact of the doctrine of forum non conveniens on the assumption of jurisdiction over an absent defendant was not argued before the prothonotary. I note that, at paragraph 44 of Muscutt, Sharpe J. was of the view that the discretion resulting from the concept of forum non conveniens “provides both a significant control on assumed jurisdiction and a rational for lowering the threshold required for the real and substantial connection test.” [Emphasis added.]
[48] In Desjean, there was no allegation, as there is here, of a conspiracy across Canada between the parties alleged to be related or associated, which conspiracy had a significant impact on the price paid for Mitsubishi vehicles in this country. The cause of action in Desjean was limited to an allegation of misleading information from the Internet that disrupted Mr. Desjean’s computer when he downloaded the Intermix products. De Montigny J. found that, in the circumstances before him, the connections between the defendant and Canada and between Canada and the subject matter of the action were not sufficient or substantial. He states the following at paragraph 35 of the decision:
35 Furthermore, it would be manifestly unfair to subject Intermix to this Court’s jurisdiction since it would, in effect, mean a U.S.‑based operator of a Web site, with no business assets in Canada and no physical presence in the jurisdiction, could be sued in this country as well as in any other country from which a plaintiff might choose to download its products. Despite the inconvenience for plaintiffs in a similar situation of having to pursue their claims in foreign jurisdictions, this is only one factor to be taken into consideration. As the law now appears to stand, this is not enough to bring a claim within the jurisdiction of a Canadian court. It would put much too great an onus on foreign Web site operators or any foreign commercial undertakings with no real presence in Canada which happen to deal with Canadian residents. [Emphasis added.]
[49] Two decisions by the Supreme Court of Canada, the first in General Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 641 (General Motors) and the second in R. v. Libman, [1985] 2 S.C.R. 178 (Libman), lead me to believe that, in this case, the factor of the connection between Canada and the subject matter of the action filed by Nancy Bouchard is of particular importance.
[50] On behalf of the members of the proposed class, Nancy Bouchard alleges that they suffered damages caused by the conspiracy between the Mitsubishi defendants, related companies. That is the subject matter of the action. This remedy is authorized by the Competition Act and its constitutionality was upheld by the Supreme Court of Canada in General Motors, which involved a similar provision of the federal Combines Investigation Act stating that any person who suffers loss or damage from conduct contrary to a provision of Part IV of the Act may, in any court of competent jurisdiction, sue for and recover damages (former Act). Section 31.1 of the former Act is now in section 36 of the Competition Act. Di