Club Resorts Ltd. v. Van Breda

Club Resorts Ltd. v. Van Breda
Collection
Supreme Court Judgments
Date
2012-04-18
Neutral citation
2012 SCC 17
Report
[2012] 1 SCR 572
Case number
33606, 33692
Judges
McLachlin, Beverley; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert
On appeal from
Ontario
Subjects
International law
Notes
SCC Case Information: 33692, 33606
Decision Content
SUPREME COURT OF CANADA
Citation: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572
Date: 20120418
Docket: 33692, 33606
Between:
Club Resorts Ltd.
Appellant
and
Morgan Van Breda, Viktor Berg, Joan Van Breda, Tony Van Breda, Adam Van Breda and Tonnille Van Breda
Respondents
- and -
Tourism Industry Association of Ontario, Amnesty International, Canadian Centre for International Justice, Canadian Lawyers for International Human Rights and Ontario Trial Lawyers Association
Interveners
And Between:
Club Resorts Ltd.
Appellant
and
Anna Charron, Estate Trustee of the Estate of Claude Charron, deceased, the said Anna Charron, personally, Jennifer Candace Charron, Stephanie Michelle Charron, Christopher Michael Charron, Bel Air Travel Group Ltd. and Hola Sun Holidays Limited
Respondents
- and -
Tourism Industry Association of Ontario, Amnesty International, Canadian Centre for International Justice, Canadian Lawyers for International Human Rights and Ontario Trial Lawyers Association
Interveners
Coram: McLachlin C.J. and Binnie,* LeBel, Deschamps, Fish, Abella, Charron,* Rothstein and Cromwell JJ.
(* Binnie and Charron JJ. took no part in the judgment.)
Reasons for Judgment:
(paras. 1 to 125):
LeBel J. (McLachlin C.J. and Deschamps, Fish, Abella, Rothstein and Cromwell JJ. concurring)
Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572
Club Resorts Ltd. Appellant
v.
Morgan Van Breda,
Viktor Berg, Joan Van Breda, Tony Van Breda,
Adam Van Breda and Tonnille Van Breda Respondents
and
Tourism Industry Association of Ontario,
Amnesty International,
Canadian Centre for International Justice,
Canadian Lawyers for International Human Rights and
Ontario Trial Lawyers Association Interveners
‑ and ‑
Club Resorts Ltd. Appellant
v.
Anna Charron, Estate Trustee of the Estate of Claude Charron, deceased,
the said Anna Charron, personally,
Jennifer Candace Charron, Stephanie Michelle Charron,
Christopher Michael Charron,
Bel Air Travel Group Ltd. and
Hola Sun Holidays Limited Respondents
and
Tourism Industry Association of Ontario,
Amnesty International,
Canadian Centre for International Justice,
Canadian Lawyers for International Human Rights and
Ontario Trial Lawyers Association Interveners
Indexed as: Club Resorts Ltd. v. Van Breda
2012 SCC 17
File Nos.: 33692, 33606.
2011: March 21; 2012: April 18.
Present: McLachlin C.J. and Binnie,[*] LeBel, Deschamps, Fish, Abella, Charron,* Rothstein and Cromwell JJ.
on appeal from the court of appeal for ontario
Private international law — Choice of forum — Court having jurisdiction — Forum non conveniens — Respondents injured while vacationing in Cuba — Actions for damages brought in Ontario — Defendants bringing motion to stay actions on grounds that Ontario court lacks jurisdiction, or alternatively, should decline to exercise jurisdiction on basis of forum non conveniens — Whether Ontario court can assume jurisdiction over actions — If so, whether Ontario court should decline to exercise its jurisdiction on ground that court of another jurisdiction is clearly a more appropriate forum for hearing of actions.
In separate cases, two individuals were injured while on vacation outside of Canada. Morgan Van Breda suffered catastrophic injuries on a beach in Cuba. Claude Charron died while scuba diving, also in Cuba. Actions were brought in Ontario against a number of parties, including the appellant, Club Resorts Ltd., a company incorporated in the Cayman Islands that managed the two hotels where the accidents occurred. Club Resorts sought to block those proceedings, arguing that the Ontario courts lacked jurisdiction and, in the alternative, that a Cuban court would be a more appropriate forum on the basis of the doctrine of forum non conveniens. In both cases, the motion judges found that the Ontario courts had jurisdiction with respect to the actions against Club Resorts. In considering forum non conveniens, it was also held that the Ontario court was clearly a more appropriate forum. The two cases were heard together in the Court of Appeal. The appeals were both dismissed.
Held: The appeals should be dismissed.
This case concerns the elaboration of the “real and substantial connection” test as an appropriate common law conflicts rule for the assumption of jurisdiction. In determining whether a court can assume jurisdiction over a certain claim, the preferred approach in Canada has been to rely on a set of specific factors which are given presumptive effect, as opposed to a regime based on an exercise of almost pure and individualized judicial discretion. Given the nature of the relationships governed by private international law, the framework for the assumption of jurisdiction cannot be an unstable, ad hoc system made up on the fly on a case‑by‑case basis — however laudable the objective of individual fairness may be. There must be order in the system, and it must permit the development of a just and fair approach to resolving conflicts. Justice and fairness are undoubtedly essential purposes of a sound system of private international law. But they cannot be attained without a system of principles and rules that ensure security and predictability in the law governing the assumption of jurisdiction by a court. The identification of a set of relevant presumptive connecting factors and the determination of their legal nature and effect will bring greater clarity and predictability to the analysis of the problems of assumption of jurisdiction, while at the same time ensuring consistency with the objectives of fairness and efficiency that underlie this branch of the law. From this perspective, a clear distinction must be maintained between, on the one hand, the factors or factual situations that link the subject matter of the litigation and the defendant to the forum and, on the other hand, the principles and analytical tools, such as the values of fairness and efficiency or the principle of comity.
To meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. Jurisdiction must be established primarily on the basis of objective factors that connect the legal situation or the subject matter of the litigation with the forum. Abstract concerns for order, efficiency or fairness in the system are no substitute for connecting factors that give rise to a “real and substantial” connection for the purposes of the law of conflicts. In a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:
(a) the defendant is domiciled or resident in the province;
(b) the defendant carries on business in the province;
(c) the tort was committed in the province; and
(d) a contract connected with the dispute was made in the province.
Although the factors set out in the list are considered presumptive, this does not mean that the list of recognized factors is complete, as it may be reviewed over time and updated by adding new presumptive connecting factors. When a court considers whether a new connecting factor should be given presumptive effect, the values of order, fairness and comity can serve as useful analytical tools for assessing the strength of the relationship with a forum to which the factor in question points. These values underlie all presumptive connecting factors, whether listed or new. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized presumptive connecting factors;
(b) Treatment of the connecting factor in the case law;
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.
The presumption of jurisdiction that arises where a recognized connecting factor — whether listed or new — applies is not irrebuttable. The burden of rebutting the presumption of jurisdiction rests, of course, on the party challenging the assumption of jurisdiction. That party must negate the presumptive effect of the listed or new factor and convince the court that the proposed assumption of jurisdiction would be inappropriate. This could be accomplished by establishing facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.
If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors — whether listed or new — apply or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine. If jurisdiction is established, the claim may proceed, subject to the court’s discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.
A clear distinction must be drawn between the existence and the exercise of jurisdiction. Once jurisdiction is established, if the defendant does not raise further objections, the litigation proceeds before the court of the forum. The court cannot decline to exercise its jurisdiction unless the defendant invokes forum non conveniens. The decision to raise this doctrine rests with the parties, not with the court seized of the claim. If a defendant raises an issue of forum non conveniens, the burden is on him or her to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. The defendant must show that the alternative forum is clearly more appropriate and that, in light of the characteristics of the alternative forum, it would be fairer and more efficient to choose an alternative forum and to deny the plaintiff the benefits of his or her decision to select a forum. When it is invoked, the doctrine of forum non conveniens requires a court to go beyond a strict application of the test governing the recognition and assumption of jurisdiction. It is based on a recognition that a common law court retains a residual power to decline to exercise its jurisdiction in appropriate, but limited, circumstances in order to assure fairness to the parties and the efficient resolution of the dispute. The court however, should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation. On the other hand, a court must refrain from leaning too instinctively in favour of its own jurisdiction. The doctrine focuses on the contexts of individual cases and the factors that a court may consider in deciding whether to apply forum non conveniens may vary depending on the context. Such factors might include the locations of parties and witnesses, the cost of transferring the case to another jurisdiction or of declining the stay, the impact of a transfer on the conduct of the litigation or on related or parallel proceedings, the possibility of conflicting judgments, problems related to the recognition and enforcement of judgments, and the relative strengths of the connections of the two parties. Ultimately, the decision falls within the reasoned discretion of the trial court. This exercise of discretion will be entitled to deference from higher courts, absent an error of law or a clear and serious error in the determination of relevant facts which takes place at an interlocutory or preliminary stage.
In Van Breda, a contract was entered into in Ontario. The existence of a contract made in Ontario that is connected with the litigation is a presumptive connecting factor that, on its face, entitles the courts of Ontario to assume jurisdiction in this case. Club Resorts has failed to rebut the presumption of jurisdiction that arises where this factor applies. Therefore, there was a sufficient connection between the Ontario court and the subject matter of the litigation. Club Resorts has not discharged its burden of showing that a Cuban court would clearly be a more appropriate forum. While a sufficient connection exists between Cuba and the subject matter of the litigation to support an action there, issues related to the fairness to the parties and to the efficient disposition of the claim must be considered. A trial held in Cuba would present serious challenges to the parties. All things considered, the burden on the plaintiffs clearly would be far heavier if they were required to bring their action in Cuba.
In Charron, the facts supported the conclusion that Club Resorts was carrying on a business in Ontario, which is a presumptive connecting factor. Club Resorts’ commercial activities in Ontario went well beyond promoting a brand and advertising. Its representatives were in the province on a regular basis and it benefitted from the physical presence of an office in Ontario. It therefore follows that it has been established that a presumptive connecting factor applies and that the Ontario court is prima facie entitled to assume jurisdiction. Club Resorts has not rebutted the presumption of jurisdiction that arises from this connecting factor and therefore the Ontario court has jurisdiction on the basis of the real and substantial connection test. Furthermore, Club Resorts failed to discharge its burden of showing that a Cuban court would clearly be a more appropriate forum in the circumstances of this case. Considerations of fairness to the parties weigh heavily in favour of the plaintiffs.
Cases Cited
Explained: Muscutt v. Courcelles (2002), 60 O.R. (3d) 20; referred to: Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666; Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636; British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473; Castillo v. Castillo, 2005 SCC 83, [2005] 3 S.C.R. 870; Unifund Assurance Co. v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; Hunt v. T&N plc, [1993] 4 S.C.R. 289; Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416; Tolofson v. Jensen, [1994] 3 S.C.R. 1022; McLean v. Pettigrew, [1945] S.C.R. 62; Spar Aerospace Ltd. v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 S.C.R. 205; Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897; Lemmex v. Bernard (2002), 60 O.R. (3d) 54; Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68; Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 60 O.R. (3d) 76; Leufkens v. Alba Tours International Inc. (2002), 60 O.R. (3d) 84; Coutu v. Gauthier Estate, 2006 NBCA 16, 296 N.B.R. (2d) 34; Fewer v. Ellis, 2011 NLCA 17, 305 Nfld. & P.E.I.R. 39; R. v. Hape, 2007 SCC 26, [2007] 2 S.C.R. 292; Spiliada Maritime Corp. v. Cansulex Ltd., [1987] 1 A.C. 460; Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321; Oppenheim forfait GMBH v. Lexus maritime inc., 1998 CanLII 13001.
Statutes and Regulations Cited
Civil Code of Québec, S.Q. 1991, c. 64, arts. 3076 to 3168, 3135, 3148.
Constitution Act, 1867, s. 92 .
Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28, s. 11.
Court Jurisdiction and Proceedings Transfer Act, S.N.S. 2003 (2nd Sess.), c. 2.
Court Jurisdiction and Proceedings Transfer Act, S.S. 1997, c. C‑41.1.
Court Jurisdiction and Proceedings Transfer Act, S.Y. 2000, c. 7 [not yet in force].
Family Law Act, R.S.O. 1990, c. F.3.
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 17.02.
Authors Cited
Blom, Joost, and Elizabeth Edinger. “The Chimera of the Real and Substantial Connection Test” (2005), 38 U.B.C. L. Rev. 373.
Briggs, Adrian. The Conflict of Laws, 2nd ed. Oxford: Oxford University Press, 2008.
Brun, Henri, Guy Tremblay et Eugénie Brouillet. Droit constitutionnel, 5e éd. Cowansville, Qué.: Yvon Blais, 2008.
Castel, Jean‑Gabriel. “The Uncertainty Factor in Canadian Private International Law” (2007), 52 McGill L.J. 555.
Emanuelli, Claude. Droit international privé québécois, 3e éd. Montréal: Wilson & Lafleur, 2011.
Goldstein, Gérald, et Ethel Groffier. Droit international privé, t. I, Théorie générale. Cowansville, Qué.: Yvon Blais, 1998.
Hogg, Peter W. Constitutional Law of Canada, vol. 1, 5th ed. Scarborough, Ont.: Thomson/Carswell, 2007.
Manitoba. Law Reform Commission. Private International Law, Report #119. Winnipeg: The Commission, 2009.
Monestier, Tanya. “A ‘Real and Substantial’ Improvement? Van Breda Reformulates the Law of Jurisdiction in Ontario”, in Todd L. Archibald and Randall Scott Echlin, eds., Annual Review of Civil Litigation, 2010. Toronto: Carswell, 2010, 185.
Perell, Paul M., and John W. Morden. The Law of Civil Procedure in Ontario. Markham, Ont.: LexisNexis Canada, 2010.
Pitel, Stephen G. A., and Nicholas S. Rafferty. Conflict of Laws. Toronto: Irwin Law, 2010.
Talpis, Jeffrey A., with the collaboration of Shelley L. Kath. “If I am from Grand‑Mère, Why Am I Being Sued in Texas?” Responding to Inappropriate Foreign Jurisdiction in Quebec‑United States Crossborder Litigation. Montréal: Thémis, 2001.
Uniform Law Conference of Canada. Uniform Court Jurisdiction and Proceedings Transfer Act (online: http://www.ulcc.ca/en/us/Uniform_Court_Jurisdiction_+_Proceedings_Transfer_Act_En.pdf).
Walker, Janet. “Reforming the Law of Crossborder Litigation: Judicial Jurisdiction”, Consultation Paper, Law Commission of Ontario, March 2009 (online: http://www.ontla.on.ca/library/repository/mon/23003/290663.pdf).
Yntema, Hessel E. “The Objectives of Private International Law” (1957), 35 Can. Bar Rev. 721.
APPEALS from a judgment of the Ontario Court of Appeal (O’Connor A.C.J.O. and Weiler, MacPherson, Sharpe and Rouleau JJ.A.), 2010 ONCA 84, 98 O.R. (3d) 721, 264 O.A.C. 1, 316 D.L.R. (4th) 201, 71 C.C.L.T. (3d) 161, 77 R.F.L. (6th) 1, 81 C.P.C. (6th) 219, [2010] O.J. No. 402 (QL), 2010 CarswellOnt 549 (sub nom. Van Breda v. Village Resorts Ltd. and Charron Estate v. Village Resorts Ltd.), affirming a decision of Pattillo J., 60 C.P.C. (6th) 186, 2008 CanLII 32309, [2008] O.J. No. 2624 (QL), 2008 CarswellOnt 3867 (sub nom. Van Breda v. Village Resorts Ltd.), and affirming a decision of Mulligan J., 92 O.R. (3d) 608, 2008 CanLII 53834, [2008] O.J. No. 4078 (QL), 2008 CarswellOnt 6165 (sub nom. Charron Estate v. Bel Air Travel Group Ltd.). Appeals dismissed.
John A. Olah, for the appellant (33692).
Chris G. Paliare, Robert A. Centa and Tina H. Lie, for the respondents Morgan Van Breda et al. (33692).
Peter J. Pliszka and Robin P. Roddey, for the appellant (33606).
Jerome R. Morse, Lori Stoltz and John J. Adair, for the respondents Anna Charron et al. (33606).
Howard B. Borlack, Lisa La Horey and Sabine Kharabian, for the respondent Bel Air Travel Group Ltd. (33606).
Catherine M. Buie, for the respondent Hola Sun Holidays Limited (33606).
John Terry and Jana Stettner, for the intervener the Tourism Industry Association of Ontario (33606 and 33692).
François Larocque, Michael Sobkin, Mark C. Power and Lauren J. Wihak, for the interveners Amnesty International, the Canadian Centre for International Justice and the Canadian Lawyers for International Human Rights (33606 and 33692).
Allan Rouben, for the intervener the Ontario Trial Lawyers Association (33606 and 33692).
The judgment of the Court was delivered by
LeBel J. —
I. Introduction
[1] Tourism has grown into one of the most personal forms of globalization in the modern world. Canadians look elsewhere for the sun, or to see new sights or seek new experiences. Trips are planned and taken with great expectations. But personal tragedies do happen. Happiness gives way to grief, as in the situations that resulted in these appeals. A young woman, Morgan Van Breda, suffered catastrophic injuries on a beach in Cuba. A family doctor and father, Dr. Claude Charron, died while scuba diving, also in Cuba. Actions were brought in Ontario against a number of parties, including the appellant Club Resorts Ltd. (“Club Resorts”), a company incorporated in the Cayman Islands that managed the two hotels where the accidents occurred. Club Resorts sought to block those proceedings, arguing that the Ontario courts lacked jurisdiction and, in the alternative, that a Cuban court would be a more appropriate forum on the basis of the doctrine of forum non conveniens. The same issues have now been raised in this Court. I will begin by summarizing the events that led to the litigation, the conduct of the litigation and the judgments of the courts below. I will then consider the principles that should apply to the assumption of jurisdiction and the doctrine of forum non conveniens under the common law conflicts rules of Canadian private international law. Finally, I will apply those principles to determine whether the Ontario courts have jurisdiction and, if so, whether they should decline to exercise it.
II. Background and Facts
A. Van Breda
[2] In June 2003, the respondent Viktor Berg and his spouse, Ms. Van Breda, went on a trip to Cuba, where they stayed at the SuperClubs Breezes Jibacoa resort managed by Club Resorts. Mr. Berg, a professional squash player, had made arrangements for a one-week stay for two people at this hotel through René Denis, an Ottawa-based travel agent operating a business known as Sport au Soleil.
[3] Mr. Denis’s business involved arranging for racquet sport professionals for, among others, Club Resorts, in exchange for undisclosed compensation. Mr. Denis also received a fee from each professional. Once the arrangements for Mr. Berg were finalized, Mr. Denis sent him a letter on letterhead bearing the words “SuperClubs Cuba — Tennis”, which confirmed the details of the agreement with Club Resorts: Mr. Berg was to provide two hours of tennis lessons a day in exchange for bed and board and other services for two people at the hotel.
[4] The accident happened on the first day of their stay. Ms. Van Breda tried to do some exercises on a metal structure on the beach, but the structure collapsed. She suffered catastrophic injuries and, as a result, became paraplegic. After spending a few days in a hospital in Cuba, she returned to Canada, going to Calgary where her family lived. She is now living in British Columbia with Mr. Berg. They never returned to Ontario, which they had planned to do after their holiday.
[5] In May 2006, Ms. Van Breda, her relatives and Mr. Berg sued several defendants, including Mr. Denis, Club Resorts, and some companies associated with Club Resorts in the SuperClubs group, in the Ontario Superior Court of Justice. Their claim was framed in contract and in tort. They sought damages for personal injury, damages for loss of support, care, guidance and companionship pursuant to the Family Law Act, R.S.O. 1990, c. F.3, and punitive damages.
[6] Some of the parties, including those who were served outside Ontario under rule 17.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, moved to dismiss the action for want of jurisdiction. In the alternative, they asked the Superior Court of Justice to decline jurisdiction on the basis of forum non conveniens.
B. Charron
[7] In January 2002, Dr. Charron and his wife booked a vacation package through a travel agent, Bel Air Travel Group Ltd. (“Bel Air”). This package was offered by Hola Sun Holidays Ltd. (“Hola Sun”), which sold packages offered by, among others, SuperClubs. It was an all-inclusive package — at the Breezes Costa Verde hotel in Cuba — that featured scuba diving. The hotel was owned by Gaviota SA (Ltd.) (“Gaviota”), a Cuban corporation, but was managed by the appellant, Club Resorts. Dr. and Mrs. Charron reached the Breezes Costa Verde on February 8, 2002. Four days later, Dr. Charron drowned during his second scuba dive.
[8] Mrs. Charron and her children sued for breach of contract and negligence. Dr. Charron’s estate sought damages for loss of future income, and the individual plaintiffs also sought damages for loss of love, care, guidance and companionship pursuant to the Family Law Act. The statement of claim was served on the Ontario defendants, Bel Air and Hola Sun. It was also served outside Ontario on several foreign defendants, including Club Resorts, under rule 17.02 of the Rules of Civil Procedure. The parties served outside Ontario included the diving instructor and the captain of the boat. Club Resorts and an associated company, Village Resorts International Ltd., which owned the SuperClubs trademark, moved to dismiss the action on the ground that the Ontario courts lacked jurisdiction or, in the alternative, to stay the action on the grounds that Ontario was not the most appropriate forum.
C. Judicial History
(1) Van Breda — Ontario Superior Court of Justice (2008), 60 C.P.C. (6th) 186
[9] In Van Breda, Pattillo J. held that Club Resorts’ motion turned on whether there was a real and substantial connection in accordance with the test laid out by the Ontario Court of Appeal in Muscutt v. Courcelles (2002), 60 O.R. (3d) 20. He found that there was a connection between Ontario and Club Resorts by virtue of the activities the company engaged in in Ontario through Mr. Denis. He also found on a prima facie basis that the agreement between Mr. Berg and Club Resorts had actually been concluded in Ontario. After reviewing the other factors from Muscutt, including unfairness to the defendants in assuming jurisdiction, unfairness to the plaintiffs in not doing so and the involvement of other parties to the suit, he held that there was a sufficient connection between Ontario and the subject matter of the litigation. Pattillo J. then considered the issue of forum non conveniens. Although he accepted that Cuba also had jurisdiction, he concluded that it had not been established that a Cuban court would clearly be a more appropriate forum. For these reasons, he held that the Ontario Superior Court of Justice should entertain the action as against Club Resorts.
(2) Charron — Ontario Superior Court of Justice (2008), 92 O.R. (3d) 608
[10] In Charron, Mulligan J. held against Club Resorts. In his opinion, a contract had been entered into between Dr. Charron and Bel Air. The travel agency had booked an all-inclusive package at the Cuban hotel through Hola Sun, which had an agreement with Club Resorts. These facts weighed in favour of assuming jurisdiction. Mulligan J. also found that there was a connection between Ontario and the defendants. In his view, the resort relied heavily on international travellers to ensure its profitability. Club Resorts marketed the resort in Ontario by way of an agreement with Hola Sun. I note that the record indicated that Club Resorts or one of its associated companies had an office in Richmond Hill, Ontario. After reviewing the other factors from Muscutt, Mulligan J. held that the Ontario courts had jurisdiction with respect to Club Resorts. In considering forum non conveniens, Mulligan J. weighed several factors. He took into account the fact that more parties and witnesses were located in Ontario than in Cuba, that the damage had been sustained in Ontario and that a liability insurance policy was available to the foreign defendants in Ontario. In addition, Mrs. Charron and her children would lose the benefit of statutory family law remedies if the case were to proceed in Cuba. For these reasons, Mulligan J. held that the Ontario court was clearly a more appropriate forum than a Cuban court.
(3) Ontario Court of Appeal, 2010 ONCA 84, 98 O.R. (3d) 721
[11] The two cases were heard together in the Court of Appeal. After ordering a rehearing, the Court of Appeal, in reasons written by Sharpe J.A., took the opportunity to review and reframe the Muscutt test. I will discuss this new framework below in reviewing the evolution of the common law policy relating to conflicts of jurisdiction and conflicts of laws.
[12] Suffice it to say at this stage that, after recasting the Muscutt test, the Court of Appeal unanimously held, in both cases, that the Ontario courts had jurisdiction over the claims and the parties. It then decided that the Ontario courts should not decline jurisdiction on the basis of forum non conveniens principles, because a Cuban court would not clearly be a more appropriate forum.
[13] The appeals in Van Breda and Charron were also heard together in this Court. They were heard during the same session as two other appeals involving the issues of jurisdiction and forum non conveniens, which concerned actions in damages for defamation (Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666, and Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636).
III. Analysis
Issues
(1) Nature and Scope of Private International Law
[14] These appeals raise broad issues about the fundamental principles of the conflict of laws, as this branch of the law has traditionally been known in the common law, or “private international law” as it is often called now (A. Briggs, The Conflict of Laws (2nd ed. 2008), at pp. 2-3; Manitoba Law Reform Commission, Private International Law, Report #119 (2009), at p. 2; J.-G. Castel, “The Uncertainty Factor in Canadian Private International Law” (2007), 52 McGill L.J. 555).
[15] Although both appeals raise issues concerning both the determination of whether a court has jurisdiction (the test of jurisdiction simpliciter) and the principles governing a court’s decision to decline to exercise its jurisdiction (the doctrine of forum non conveniens), those issues may have an impact on the development of other areas of private international law. Private international law is in essence domestic law, and it is designed to resolve conflicts between different jurisdictions, the legal systems or rules of different jurisdictions and decisions of courts of different jurisdictions. It consists of legal principles that apply in situations in which more than one court might claim jurisdiction, to which the law of more than one jurisdiction might apply or in which a court must determine whether it will recognize and enforce a foreign judgment or, in Canada, a judgment from another province (S. G. A. Pitel and N. S. Rafferty, Conflict of Laws (2010), at p. 1).
[16] Three categories of issues — jurisdiction, forum non conveniens and the recognition of foreign judgments — are intertwined in this branch of the law. Thus, the framework established for the purpose of determining whether a court has jurisdiction may have an impact on the choice of law and on the recognition of judgments, and vice versa. Judicial decisions on choice of law and the recognition of judgments have played a central role in the evolution of the rules related to jurisdiction. None of the divisions of private international law can be safely analysed and applied in isolation from the others. This said, the central focus of these appeals is on jurisdiction and the appropriate forum.
(2) Issues Related to Jurisdiction: Assumption and Exercise of Jurisdiction
[17] Two issues arise in these appeals. First, were the Ontario courts right to assume jurisdiction over the claims of the respondents Van Breda and Charron and over the appellant, Club Resorts? Second, were they right to exercise that jurisdiction and dismiss an application for a stay based on forum non conveniens?
[18] To be able to resolve these issues, I must first discuss the evolution of the rules of jurisdiction simpliciter in Canadian private international law. It will be necessary to review the approach the Ontario Court of Appeal adopted in respect of the questions of assumption of jurisdiction and forum non conveniens in its judgments in the cases at bar and, in particular, its reconsideration of the principles that it had previously set out in Muscutt.
[19] I will then propose an analytical framework and legal principles for assuming jurisdiction (jurisdiction simpliciter) and for deciding whether to decline to exercise it (forum non conveniens). On that basis, I will review the facts of the cases at bar to determine whether the Ontario courts made any reviewable errors when they decided to retain jurisdiction over them.
[20] Before turning to these issues, however, it is important to consider the constitutional underpinnings of private international law in Canada. This part of the analysis is necessary in order to explain the origins of the “real and substantial connection test” as it is now known, its nature, and its impact on the development of the principles of private international law.
(3) Constitutional Underpinnings of Private International Law
[21] Conflicts rules must fit within Canada’s constitutional structure. Given the nature of private international law, its application inevitably raises constitutional issues. This branch of the law is concerned with the jurisdiction of courts of the Canadian provinces, with whether that jurisdiction should be exercised, with what law should apply to a dispute, and with whether a court should recognize and enforce a judgment rendered by a court of another province or country. The rules of private international law can be found, in the common law provinces, in the common law and in statute law and, in Quebec, in the Civil Code of Québec, S.Q. 1991, c. 64, which contains a well-developed set of rules and principles in this area (see Civil Code of Québec, Book Ten, arts. 3076 to 3168). The interplay between provincial jurisdiction and external legal situations takes place within a constitutional framework which limits the external reach of provincial laws and of a province’s courts. The Constitution assigns powers to the provinces. But these powers are subject to the restriction that they be exercised within the province in question (see P. W. Hogg, Constitutional Law of Canada (5th ed. 2007), vol. 1, at pp. 364-65 and 376-77; H. Brun, G. Tremblay and E. Brouillet, Droit constitutionnel (5th ed. 2008), at p. 569; British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473, at paras. 26-28, per Major J.), and they must be exercised in a manner consistent with the territorial restrictions created by the Constitution (see Castillo v. Castillo, 2005 SCC 83, [2005] 3 S.C.R. 870, at para. 5, per Major J.; Unifund Assurance Co. v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63, at para. 51, per Binnie J.).
(4) Origins of the Real and Substantial Connection Test
[22] The real and substantial connection test arose out of decisions of this Court that were aimed at establishing broad and flexible principles to govern the exercise of provincial powers and the actions of a province’s courts. It was focussed on two issues: (1) the risk of jurisdictional overreach by provinces and (2) the recognition of decisions rendered in other jurisdictions within the Canadian federation and in other countries. In developing the real and substantial connection test, the Court crafted a constitutional principle rather than a simple conflicts rule (see G. Goldstein and E. Groffier, Droit international privé, vol. I, Théorie générale (1998), at p. 47). However, the test was born as a general organizing principle of the conflict of laws. Its constitutional dimension appeared only later. Courts have used the expression “real and substantial connection” to describe the test in both senses, and often in the same judgment. This has produced confusion about both the nature of the test and the constitutional status of the rules and principles of private international law. A clearer distinction needs to be drawn between the private international law and constitutional dimensions of this test.
[23] From a constitutional standpoint, the Court has, by developing tests such as the real and substantial connection test, sought to limit the reach of provincial conflicts rules or the assumption of jurisdiction by a province’s courts. However, this test does not dictate the content of conflicts rules, which may vary from province to province. Nor does it transform the whole field of private international law into an area of constitutional law. In its constitutional sense, it places limits on the reach of the jurisdiction of a province’s courts and on the application of provincial laws to interprovincial or international situations. It also requires that all Canadian courts recognize and enforce decisions rendered by courts of the other Canadian provinces on the basis of a proper assumption of jurisdiction. But it does not establish the actual content of rules and principles of private international law, nor does it require that those rules and principles be uniform.
[24] The first mention of a “real and substantial connection test” in the Court’s modern jurisprudence can be found in the reasons of Dickson J. in Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393. That case concerned a tort action with respect to manufacturer’s liability. The main issue was whether the courts of Saskatchewan had jurisdiction over the claim and, if so, what substantive law governed it. Dickson J. suggested that the English courts seemed to be moving towards some form of “real and substantial connection test” (pp. 407-8) to resolve issues related to the assumption of jurisdiction by a province’s courts and the appropriate choice of the law applicable to a tort. The test was formally adopted in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077. As had been the case in Moran, the Court’s intention in Morguard was to develop an organizing principle of Canadian private international law, albeit with constitutional overtones. The test’s constitutional role in the Canadian federation was confirmed a few years later in Hunt v. T&N plc, [1993] 4 S.C.R. 289. Its Janus-like nature — with a private international law face on the one hand and a constitutional face on the other — crystallized in Hunt and remained a permanent feature of the subsequent jurisprudence.
[25] In retrospect, it can be seen that in Morguard, the Court initiated a major shift in the framework governing the conflict of laws in Canada by accepting the validity of the real and substantial connection test as a principle governing the rules applicable to conflicts. In view of its importance, the case merits closer consideration. At issue in Morguard was an application to enforce, in British Columbia, a judgment rendered in Alberta against a resident of British Columbia. The claim related to a debt secured by a mortgage on property in Alberta. The parties were resident in Alberta at the time the loan was made. La Forest J., writing for a unanimous Court, called for a re-evaluation of relationships between the courts of the provinces within the Canadian federation. The creation of the Canadian federation established an internal space within which exchanges should occur more freely than between independent states. The principle of comity and the principles of fairness and order a