Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon

Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon
Collection
Supreme Court Judgments
Date
1994-12-15
Report
[1994] 3 SCR 1022
Case number
22980, 23445
Judges
La Forest, Gérard V.; Sopinka, John; Gonthier, Charles Doherty; Cory, Peter deCarteret; McLachlin, Beverley; Iacobucci, Frank; Major, John C.
On appeal from
British Columbia
Subjects
International law
Notes
SCC Case Information: 23445, 22980
Decision Content
Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022
Leroy Jensen and Roger Tolofson Appellants
v.
Kim Tolofson Respondent
and
Réjean Gagnon Appellant
v.
Tina Lucas and Justin Gagnon by their
litigation guardian Heather Gagnon,
Heather Gagnon personally, and Cyrille Lavoie Respondents
and
Sybil Marshall, Victor Marshall,
Dianne Margaret Marshall, Rosemarie Anne
Marshall, Carmen Selina Frey, Aditha Le Blanc,
Clarence S. Marshall, La Société d'experts‑conseils
Pellemon Inc., Le Groupe Pellemon Inc., Simcoe and Erie
General Insurance Co., Les Services de béton
universels Ltée and Allstate Insurance Co. of Canada Interveners
Indexed as: Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon
File Nos.: 22980, 23445.
1994: February 21; 1994: December 15.
Present: La Forest, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ.
on appeal from the court of appeal for british columbia
on appeal from the court of appeal for ontario
Conflict of laws ‑‑ Torts ‑‑ Traffic accident ‑‑ Injured parties not resident in province where accident occurred ‑‑ Actions instituted in home provinces of injured parties ‑‑ Whether lex fori or lex loci delicti should apply ‑‑ If substantive law that of jurisdiction where accident occurred, whether limitation period substantive law and therefore applicable in forum or procedural law and therefore not binding on court hearing case ‑‑ Automobile Insurance Act, L.Q. 1977, c. 68, ss. 3, 4 ‑‑ Code civil du Bas Canada, art. 6 ‑‑ Limitation of Actions Act, R.S.S. 1978, c. L-15 ‑‑ Vehicles Act, R.S.S. 1978, c. V-3, s. 180(1).
These appeals deal with the "choice of law rule": which law should govern in cases involving the interests of more than one jurisdiction specifically as it concerns automobile accidents involving residents of different provinces. The first case also raises the subsidiary issue of whether, assuming the applicable substantive law is that of the place where the tort arises, the limitation period established under that law is inapplicable as being procedural law and so not binding on the court hearing the case,
or substantive law. The second case raises the issue whether the Quebec no‑fault insurance scheme applies to situations where some or all the parties are non‑residents.
Tolofson v. Jensen
The plaintiff, Kim Tolofson, a 12‑year‑old passenger in a car driven by his father Roger, was seriously injured in a car accident with Leroy Jensen. The accident occurred in Saskatchewan. The Tolofsons were residents of and their car was registered in British Columbia; Mr. Jensen was a resident of and his car was registered in Saskatchewan. Plaintiff brought an action eight years later in British Columbia on the assumption that the action was statute‑barred under Saskatchewan law. Further, Saskatchewan law, unlike British Columbia law, did not permit a gratuitous passenger to recover, absent wilful or wanton misconduct of the driver of the car in which he or she was travelling. Neither defendant admitted liability. The defendants brought an application by consent to seek a determination as to whether the court was forum non conveniens or alternatively as to whether Saskatchewan law applied. The motions judge dismissed the application and ruled that choice of law was inextricably entwined with issues of jurisdiction and forum conveniens, and that choice of law followed these determinations. The Court of Appeal found that the law of the forum should apply.
Lucas (Litigation Guardian of) v. Gagnon
Mrs. Gagnon brought action on her own behalf and as litigation guardian of two children against her husband, Mr. Gagnon, for personal injuries suffered in a Quebec traffic accident involving her husband and Mr. Lavoie. The Gagnons were residents of Ontario; Mr. Lavoie was a resident of Quebec. Mrs. Gagnon discontinued her action against Mr. Lavoie following an Ontario Court of Appeal judgment that a Quebec resident's liability was governed by Quebec law. Mr. Gagnon, however, had cross‑claimed against Mr. Lavoie and that cross‑claim was not discontinued. Mrs. Gagnon obtained all of the no‑fault benefits allowable under the Quebec scheme from Mr. Gagnon's Ontario insurer which was in turn reimbursed by the Régie de l'assurance automobile du Québec. The only legal avenue open to Mrs. Gagnon in seeking damages was to sue in Ontario because she was barred from bringing an action for damages in Quebec by operation of Quebec's Automobile Insurance Act.
The Ontario Court (General Division), on a motion brought by Mr. and Mrs. Gagnon (without notice to Mr. Lavoie) to determine specific points of law, decided that the Ontario court had jurisdiction, that the Ontario court should accept that jurisdiction, that Ontario law applied, and that Mr. Gagnon was entitled to maintain his action against Mr. Lavoie. Mr. Gagnon and Mr. Lavoie appealed on the questions of whether Ontario law applied and whether Mr. Gagnon could maintain his cross‑claim against Mr. Lavoie. The Ontario Court of Appeal held that Ontario law applied in the action against Mr. Gagnon but that the law of Quebec applied with respect to any claim made against Mr. Lavoie since he was not a resident of Ontario and the accident occurred in Quebec.
Held (Tolofson v. Jensen, File No. 22980): The appeal should be allowed.
Held (Lucas (Litigation Guardian of) v. Gagnon, File No. 23445): The appeal should be allowed.
Per La Forest, Gonthier, Cory, McLachlin and Iacobucci JJ.: The rule of private international law that should generally be applied in torts is the law of the place where the activity occurred ‑‑ the lex loci delicti. This approach responds to the territorial principle under the international legal order and the federal regime. It also responds to a number of sound practical considerations. It is certain, easy to apply and predictable and meets normal expectations in that ordinarily people expect their activities to be governed by the law of the place where they happen to be and expect that concomitant legal benefits and responsibilities will be defined accordingly. The government of that place is the only one with power to deal with these activities. The same expectation is ordinarily shared by other states and by people outside the place where an activity occurs.
The former British rule, adopted in McLean v. Pettigrew, that a court should apply its law (lex fori) when adjudicating on wrongs committed in another country, subject to the wrong's being "unjustifiable" in that country, cannot be accepted. This would involve a court's defining the nature and consequences of an act done in another country, which, barring some principled justification, flies against the territoriality principle. In practice, the courts of different countries would follow different rules in respect of the same wrong and invite forum shopping by litigants in search of the most beneficial place to litigate an issue. Applying the same approach to the units of a federal state like Canada would make forum shopping even easier.
No compelling reason exists for following the lex fori. The problem of proof of foreign law has been considerably attenuated given advances in transportation and communication. McLean v. Pettigrew, which applied the lex fori even though the action complained of was not actionable under the law of the place of the wrong, should be overruled. Its application in the federal context raises serious constitutional difficulties.
The nature of Canada's constitutional arrangements ‑‑ a single country with different provinces exercising territorial legislative jurisdiction ‑‑ supports a rule that is certain and that ensures that an act committed in one part of this country will be given the same legal effect throughout the country. This militates strongly in favour of the lex loci delicti rule. In this respect, given the mobility of Canadians and the many common features in the law of the various provinces and the essentially unitary nature of Canada's court system, an invariable rule that the matter also be actionable in the province of the forum is not necessary. This factor should be considered in determining whether there is a real and substantial connection to the forum to warrant its exercise of jurisdiction. Any problems that might arise could be resolved by a sensitive application of the doctrine of forum non conveniens.
Strict application of lex loci delicti also has the advantage of unquestionable conformity with the Constitution. This advantage is not to be ignored given the largely unexplored nature of the area and the consequent danger that a rule developed in a constitutional vacuum may, when explored, not conform to constitutional imperatives.
One of the main goals of any conflicts rule is to create certainty in the law. Any exception adds an element of uncertainty. However, since a rigid rule on the international level could give rise to injustice, the courts should retain a discretion to apply their own law to deal with such circumstances, although such cases would be rare. Indeed, if not strictly narrowed to situations that involve some timely and close relationship between the parties, an exception could lead to injustice.
The underlying principles of private international law are order and fairness, but order comes first for it is a precondition to justice. Considerations of public policy in actions that take place wholly within Canada should play a limited role, if at all. Arguments for an exception based on public policy are simply rooted in the fact that the court does not approve of the law that the legislature chose to adopt. The law of the land, however, is not usually ignored in favour of those who visit. The perception that the parties intend the law of their residence to apply is not valid.
On the international level, the rule that the wrong must be actionable under Canadian law is not really necessary, since the jurisdiction of Canadian courts is confined to matters where a real and substantial connection with the forum jurisdiction exists. The fact that a wrong would not be actionable within the territorial jurisdiction of the forum if committed there might be a factor better weighed in considering the issue of forum non conveniens or whether entertaining the action would violate the public policy of the forum jurisdiction.
Saskatchewan's substantive law applies in Tolofson v. Jensen. This includes its limitation rule. In any action involving the application of a foreign law the characterization of rules of law as substantive or procedural is crucial because the substantive rights of the parties to an action may be governed by a foreign law, but all matters of procedure are governed exclusively by the law of the forum. The forum court cannot be expected to apply the procedural rules of the foreign state whose law it wishes to apply. The forum's procedural rules exist for the convenience of the court, and forum judges understand them.
The bases of the old common law rule, which held that statutes of limitation are always procedural, are out of place in the modern context. The limitation period in this case was substantive because it created an accrued right in the defendant to plead a time bar. The limitation defence was properly pleaded here and all parties proceeded on the assumption that, if Saskatchewan law applied, it was a valid defence. It should not be rejected by a British Columbia court as contrary to public policy. The extent to which limitation statutes should go in protecting individuals against stale claims involves policy considerations unrelated to the manner in which a court must carry out its functions and the particular balance may vary from place to place.
In Lucas (Litigation Guardian of) v. Gagnon, Quebec law applies, both by virtue of Quebec's no‑fault insurance scheme and through the operation of lex loci delicti. Barring other considerations, the legislature clearly intended that these provisions should apply to all persons who have an accident in Quebec regardless of their province of residence. This policy is clearly within the province's constitutional competence. The new Civil Code, which was not in effect at the time of the accident, did not change the situation of the parties. Even had it been operative, the language of the Automobile Insurance Act clearly overrode the general law. Section 4 removes not only rights of action but also "all rights . . . of any one".
Per Sopinka J. Concurrence with the reasons of La Forest J. was subject to the observations expressed by Major J.
Per Major J.: The question of which province's law should govern the litigation should be determined by reference to the lex loci delicti rule. An absolute rule admitting of no exceptions needed not be established. Parties have the ability to choose, by agreement, to be governed by the lex fori and a discretion exists to depart from the absolute rule in international litigation where the lex loci delicti rule would work an injustice. Recognition of a similar exception should not be foreclosed in interprovincial litigation.
Cases Cited
By La Forest J.
Overruled: McLean v. Pettigrew, [1945] S.C.R. 62; not followed: Chaplin v. Boys, [1969] 2 All E.R. 1085 (H.L.), aff'd [1968] 1 All E.R. 283 (C.A.); considered: Phillips v. Eyre (1870), L.R. 6 Q.B. 1; Machado v. Fontes, [1897] 2 Q.B. 231; Going v. Reid Brothers Motor Sales Ltd. (1982), 35 O.R. (2d) 201; Ang v. Trach (1986), 57 O.R. (2d) 300; Breavington v. Godleman (1988), 80 A.L.R. 362; Block Bros. Realty Ltd. v. Mollard (1981), 122 D.L.R. (3d) 323; Yew Bon Tew v. Kenderaan Bas Mara, [1983] 1 A.C. 553; Clark v. Naqvi (1990), 99 N.B.R. (2d) 271; referred to: Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; Hunt v. T & N plc, [1993] 4 S.C.R. 289; Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897; Grimes v. Cloutier (1989), 61 D.L.R. (4th) 505; Chartered Mercantile Bank of India v. Netherlands India Steam Navigation Co. (1883), 10 Q.B.D. 521; Canadian Pacific Railway Co. v. Parent, [1917] A.C. 195; Red Sea Insurance Co. v. Bouygues, [1994] J.C.J. No. 29; Walpole v. Canadian Northern Railway Co., [1923] A.C. 113; Prefontaine Estate v. Frizzle (1990), 71 O.R. (2d) 385; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; Babcock v. Jackson (1963), 12 N.Y.2d 473; Richards v. United States, 369 U.S. 1 (1962); Dym v. Gordon, 209 N.E.2d 792 (1965); Neumeier v. Kuehner, 286 N.E.2d 454 (1972); LaVan v. Danyluk (1970), 75 W.W.R. 500; Poyser v. Minors (1881), 7 Q.B.D. 329; Huber v. Steiner (1835), 2 Bing. N.C. 202, 132 E.R. 80; Leroux v. Brown (1852), 12 C.B. 801, 138 E.R. 1119; Nash v. Tupper, 1 Caines 402 (1803); Martin v. Perrie, [1986] 1 S.C.R. 41; Szeto c. Fédération (La), Cie d'assurances du Canada, [1986] R.J.Q. 218.
Statutes and Regulations Cited
Automobile Insurance Act, L.Q. 1977, c. 68, ss. 3, 4.
British Columbia Supreme Court Rules, Rule 34.
Civil Code of Lower Canada, art. 6.
Civil Code of Quebec, art. 3126.
Constitution Act, 1867, s. 92(13) .
Foreign Limitation Periods Act, 1984, (U.K.) 1984, c. 16.
Highway Traffic Act, R.S.O. 1937, c. 288, s. 47.
Highway Traffic Code, R.S.Q. 1977, c. C-24.
Insurance Act, R.S.O. 1970, c. 224, Schedule E.
Limitation of Actions Act, R.S.S. 1978, c. L-15.
Negligence Act, R.S.O. 1990, c. N.1, s. 2.
Real Estate Act, R.S.B.C. 1979, c. 356, s. 37.
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 22.
Vehicles Act, R.S.S. 1978, c. V-3, s. 180(1).
Authors Cited
Ailes, Edgar H. "Limitation of Actions and the Conflict of Laws" (1933), 31 Mich. L. Rev. 474.
Cheshire, Geoffrey Chevalier and Peter Machin North. Cheshire and North's Private International Law, 12th ed. By Peter Machin North and J. J. Fawcett. London: Butterworths, 1992.
Conférence de La Haye de droit international privé. Actes et documents de la Onzième session, 7 au 26 octobre 1968. t. III, Accidents de la circulation routière. Travaux préliminaires. Mémorandum relatif aux actes illicites en droit international privé, établi par Bernard M. Dutoit, Secrétaire au Bureau Permanent. Document préliminaire no 1 de janvier 1967. La Haye: Imprimerie Nationale, 1970.
Cook, Walter Wheeler. The Logical and Legal Bases of the Conflict of Laws. Cambridge, Mass.: Harvard University Press, 1942.
Dicey, Albert Venn and J. H. C. Morris. Dicey and Morris on the Conflict of Laws, vol. 2, 11th ed. London: Stevens & Sons, 1987.
Hancock, Moffatt. Case and Comment on McLean v. Pettigrew (1945), 23 Can. Bar Rev. 348.
Lorenzen, Ernest G. "Huber's De Conflictu Legum" (1919), 13 Ill. L. Rev. 375, reprinted in Ernest G. Lorenzen, Selected Articles on the Conflict of Laws. New Haven: Yale University Press, 1947, p. 136.
Lorenzen, Ernest G. "Story's Commentaries on the Conflict of Laws -‑ One Hundred Years After" (1934), 48 Harv. L. Rev. 15, reprinted in Ernest G. Lorenzen, Selected Articles on the Conflict of Laws. New Haven: Yale University Press, 1947, p. 181.
Memorandum of Agreement between the Régie de l'assurance automobile du Québec and the Minister of Consumer and Commercial Relations for Ontario (December 27, 1978).
Michel, M. Jean. La Prescription Libératoire en Droit International Privé, Thesis, University of Paris, 1911, cited in Edgar H. Ailes, "Limitation of Actions and the Conflict of Laws" (1933), 31 Mich. L. Rev. 474, p. 494.
Swan, John. "The Canadian Constitution, Federalism and the Conflict of Laws" (1985), 63 Can. Bar Rev. 271.
Walsh, Catherine. "`A Stranger in the Promised Land?': The Non‑Resident Accident Victim and the Quebec No‑Fault Plan" (1988), 37 U.N.B.L.J. 173.
APPEAL (Tolofson v. Jensen, File No. 22980) from a judgment of the British Columbia Court of Appeal (1992), 65 B.C.L.R. (2d) 114, 89 D.L.R. (4th) 129, 11 B.C.A.C. 94, 22 W.A.C. 94, [1992] 3 W.W.R. 743, 9 C.C.L.T. (2d) 289, 4 C.P.C. (3d) 113, dismissing an appeal from a judgment of Macdonald J. (1989), 40 B.C.L.R. (2d) 90, Appeal allowed.
APPEAL (Lucas (Litigation Guardian of) v. Gagnon, File No. 23445) from a judgment of the Ontario Court of Appeal (1992), 11 O.R. (3d) 422, 99 D.L.R. (4th) 125, 59 O.A.C. 174, 15 C.C.L.T. (2d) 41, 15 C.C.L.I. (2d) 100, 42 M.V.R. (2d) 67, allowing an appeal, to the extent it held that a cross‑claim for contribution and indemnity could not be maintained, from a judgment of Hurley J. (1991), 3 O.R. (3d) 38, 4 C.C.L.I. (2d) 194, 28 M.V.R. (2d) 155, determining that Ontario law applied to the cause of action and that a cross‑claim could be maintained against appellant Lavoie. Appeal allowed.
Avon M. Mersey, Elizabeth B. Lyall and Brian F. Schreiber, for the appellants Leroy Jensen and Roger Tolofson.
Noreen M. Collins, for the respondent Kim Tolofson.
Allan Lutfy, Q.C., and Odette Jobin-Laberge, for the appellant Réjean Gagnon.
Robert J. Reynolds, for the respondents Tina Lucas, Justin Gagnon and Heather Gagnon.
Graeme Mew and Adelina Wong, for the respondent Cyrille Lavoie.
Written submission only by Brian J. E. Brock and Lesli Bisgould, for the intervener Clarence S. Marshall.
Written submission only by Peter A. Daley, for the interveners Sybil Marshall, Victor Marshall, Dianne Margaret Marshall, Rosemarie Anne Marshall, Carmen Selina Frey and Aditha Le Blanc.
Written submission only by W. T. McGrenere, for the interveners La Société d'experts‑conseils Pellemon Inc., Le Groupe Pellemon Inc., Simcoe and Erie General Insurance Co., Les Services de béton universels Ltée, and Allstate Insurance Co. of Canada.
The judgment of La Forest, Gonthier, Cory, McLachlin and Iacobucci JJ. was delivered by
La Forest J. -- This Court has in recent years been called upon to review a number of the structural rules of conflict of laws or private international law. In Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, and Hunt v. T & N plc, [1993] 4 S.C.R. 289, the Court had occasion to revisit the law governing the jurisdiction of courts to deal with multi-jurisdictional problems and the recognition to be accorded by the courts of one jurisdiction to a judgment made in another jurisdiction. In Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897, the Court also examined the rules governing when a court may refuse jurisdiction on the basis of forum non conveniens.
In the two appeals before us we are called upon to reconsider the "choice of law rule", i.e., which law should govern in cases involving the interests of more than one jurisdiction, specifically as it concerns automobile accidents involving residents of different provinces.
The precise issue may be distilled from the facts of the two cases under appeal. The plaintiffs, residents of Province A, were passengers in an automobile registered and insured in that province. The driver of the automobile in which they were travelling was a resident of Province A. The passengers were injured in a collision with another automobile in Province B. The driver of that automobile was a resident of Province B, and his automobile was registered in that province. In one of the cases, liability from the operation of the automobile was covered by an insurance contract made in Province B; in the other, it was covered under the terms of Province B's "no-fault" insurance scheme. The plaintiffs instituted an action for the resulting personal injuries in Province A against both drivers. The issue that arises is what law should be applied in determining the liability of the defendant drivers.
The first of these cases also raises the following subsidiary issue. Assuming the applicable substantive law is that of the place where the tort arises, is the limitation period established under that law inapplicable as being procedural law and so not binding on the court hearing the case, or is it substantive law? For its part, the second case raises the issue whether the Quebec no-fault insurance scheme applies to situations where some or all the parties are non-residents.
Background
Tolofson v. Jensen
Facts
On July 28, 1979, the plaintiff (respondent) Kim Tolofson was a passenger in a car owned and driven by his father, the defendant (appellant) Roger Tolofson. He was seriously injured when the car was involved in an accident with a vehicle driven by the other defendant (appellant) Leroy Jensen. The accident occurred in Saskatchewan. The Tolofsons were and remain residents of British Columbia and the car in which they drove was registered and insured in that province. Jensen was and remains a resident of Saskatchewan, and his car was registered and insured in that province.
The plaintiff Tolofson alleges that he suffered head injuries in the collision which affected his learning capacity and his physical capabilities. He began an action in British Columbia against both defendants seeking damages for these injuries on December 17, 1987, more than eight years after the collision occurred. He was only 12 years old at the time of the accident. The parties both operated on the assumption that the plaintiff's action is barred under Saskatchewan law because it must be brought within 12 months of the accident. Such a suit is not barred in British Columbia. As well, under Saskatchewan law a gratuitous passenger cannot recover unless "wilful or wanton misconduct" can be established against the driver of the car in which he or she was a passenger. This is not the case in British Columbia. Neither defendant admits liability.
The defendants then brought an application by consent pursuant to Rule 34 of the Supreme Court Rules of British Columbia before Macdonald J. seeking determination of a point of law, namely, that the court was forum non conveniens or, in the alternative, that the law of Saskatchewan applied with respect to the limitation period and the standard of care for gratuitous passengers. That is the proceeding from which the first of these appeals arises.
Judicial History
British Columbia Supreme Court (1989), 40 B.C.L.R. (2d) 90
On October 17, 1989, Macdonald J. dismissed the application. He concluded that while he was impressed with the logic of applying the "proper law of the tort", he was bound by McLean v. Pettigrew, [1945] S.C.R. 62, where this Court upheld an action in respect of a single car accident in Ontario which was successfully brought in Quebec under Quebec law by a passenger, a resident of Quebec, against the owner and operator of the car, also a resident of Quebec. Having considered the authorities, he concluded that choice of law was inextricably entwined with issues of jurisdiction and forum conveniens, and that choice of law followed these determinations.
British Columbia Court of Appeal (1992), 65 B.C.L.R. (2d) 114
On the appeal to the British Columbia Court of Appeal, the defendants no longer contended that the British Columbia courts are without jurisdiction or should decline jurisdiction as being forum non conveniens. They argued, however, that Macdonald J. had erred in failing to separate issues of jurisdiction and forum non conveniens from choice of law. In addition, they submitted that the applicable law was that of Saskatchewan. Cumming J.A., who gave reasons for the Court of Appeal, agreed, at p. 120, that "even when the court finds jurisdiction and refuses to stay an action based on forum non conveniens because a juridical advantage is found in the forum, it is still necessary to examine choice of law independently".
After an extensive review of the history of choice of law rules and their application in recent Canadian cases, Cumming J.A. reviewed the facts of Lucas v. Gagnon (then at the Ontario Divisional Court level). He concluded that it made no difference that in that case Lucas was a defendant on a cross-claim whereas in the present case Jensen was a co-defendant. He adopted the reasoning of Hurley J. in Gagnon that, not only was he bound by McLean v. Pettigrew even on the facts of the case at bar, but even if he were not so bound, he would hold that the law of the forum should apply since it had the most significant relationship with the parties. In obiter, Cumming J.A. stated that this decision was justified in that it met with the reasonable expectations of all the parties in that the Saskatchewan defendant would have reasonably expected to be subject to a lawsuit initially, and that both the limitation period and the gratuitous passenger laws of Saskatchewan had since been repealed.
Lucas (Litigation Guardian of) v. Gagnon
Facts
The Gagnon case is similar to the Tolofson case, except that in the Gagnon case the appellant does not seek to avoid a limitation period and a higher standard of care in the jurisdiction where the accident occurred; he seeks rather to avoid the limits on liability provided in the no-fault regime in effect in Quebec where the accident occurred. While the amount that can be recovered under that regime is greater than can be recovered under the unsatisfied judgment funds in other provinces, it is much less than can be recovered in a tort action against the party at fault. I note that Ontario has entered into an agreement regarding the application of the Quebec no-fault regime to Ontario residents who have an accident in Quebec which, it was argued, has an impact on the result of this case. This was not directly discussed in the courts below, and I shall only make reference to it later.
The essential facts, for present purposes, are these. The plaintiff, Mrs. Gagnon, brought action on her own behalf and as litigation guardian of two children against her husband, Mr. Gagnon, for personal injuries suffered in an accident that occurred in the Province of Quebec when there was a collision between an automobile driven by her husband, in which she was a passenger, and an automobile owned and operated by Mr. Lavoie. The Gagnons are all residents of Ontario; Mr. Lavoie is a resident of Quebec.
Mrs. Gagnon originally included Mr. Lavoie as a defendant, but after the Ontario Court of Appeal released its decision in Grimes v. Cloutier (1989), 61 D.L.R. (4th) 505, which distinguished McLean v. Pettigrew, supra, and held that a Quebec resident's liability in circumstances like the present case was governed by Quebec law, Mrs. Gagnon discontinued her action against Mr. Lavoie. However, the defendant, Mr. Gagnon, had cross-claimed against Mr. Lavoie and that cross-claim was not discontinued.
Mrs. Gagnon obtained 100% of the no-fault benefits (on the Quebec scale) to which she was entitled under the Quebec scheme from Mr. Gagnon's Ontario insurer. The Ontario insurer was reimbursed by the Régie de l'assurance automobile du Quebec ("La Régie"), pursuant to a 1978 agreement between the Régie and Ontario's Minister of Consumer and Commercial Relations. Mrs. Gagnon could not bring an action for damages in Quebec because of the prohibition in s. 4 of the Quebec Automobile Insurance Act, L.Q. 1977, c. 68. Her only option in seeking an award of damages was to sue in Ontario.
Mr. and Mrs. Gagnon then brought a motion on an agreed statement of facts for an order under Rule 22 of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to determine the following questions: whether the Ontario court had jurisdiction; whether it should accept that jurisdiction; whether Ontario law applied; and whether Mr. Gagnon was entitled to maintain his action against Mr. Lavoie. It is from this proceeding that the appeal to this Court emanates. Mr. Lavoie was not notified of the motion at first instance, did not concur with the questions stated and did not attend.
Judicial History
Ontario Court (General Division) (1991), 3 O.R. (3d) 38
The motion was heard by Hurley J. He replied in the affirmative to all the questions set forth in the motion. He began his analysis with Phillips v. Eyre (1870), L.R. 6 Q.B. 1 (Ex. Ch.), which is the starting point for the law in this area. He cited the general rule stated therein to the effect that to found a suit in England for a wrong committed abroad, two conditions had to be met: (1) the wrong would have been actionable if committed in England and (2) was not justifiable by the law of the place where the act was committed. That case, he noted, had been followed by this Court in McLean v. Pettigrew, supra, where the second condition was held to be satisfied by the fact that the wrong was subject to a penal prohibition in the place where the act was committed even though it was not actionable there. McLean involved an action where the plaintiff and defendant were residents of the same province and the action was brought there. The situation was similar here as it related to the Gagnons. Assuming evidence of the second condition in Phillips v. Eyre was established by evidence at trial, he concluded that an action would lie.
Though he had made reference to Grimes v. Cloutier, supra, and other Ontario jurisprudence as it affected Quebec residents in relation to accidents that take place in Quebec, Hurley J. still thought the defendant's claim against Mr. Lavoie could be pursued. In his view, the fact that the defendant in the cross-claim was originally a defendant in the action was irrelevant, since he was no longer so. Hurley J. stated, at p. 43:
If I am not bound to apply McLean then, in my opinion, the reasonable expectations of the plaintiffs and the defendant are that this sort of litigation would take place in Ontario according to the law of Ontario, and I conclude that the defendant's assertion in the action of a claim over against a Quebec driver/owner does not alter those expectations. Rather, in my opinion it would be unfair to allow the addition of that claim over to alter the law applicable from that of Ontario, which has the most significant relationship with the parties, to that of Quebec.
Ontario Court of Appeal (1992), 11 O.R. (3d) 422
Mr. Lavoie and Mr. Gagnon then appealed to the Ontario Court of Appeal, but only on the questions of whether Ontario law applied and whether Gagnon was entitled to maintain his cross-claim against Lavoie. The late Tarnopolsky J.A. stated the main question as whether Ontario or Quebec law governed both the main action and the cross-claim. He examined whether the decision of McLean v. Pettigrew, supra, should be distinguished on the basis that the defendant to the cross-claim, who was not a party to the main action, was a resident of Quebec and that the accident occurred in Quebec. He also considered, if McLean v. Pettigrew applied to the main action, whether the choice of law with respect to the cross-claim was different having regard to the Court of Appeal's decision in Grimes v. Cloutier, supra.
After reviewing the case law, Tarnopolsky J.A. emphasized that McLean v. Pettigrew ought not to be applied rigidly to factual circumstances not closely similar to those in that case. He held that McLean applied to the main action. As for the cross-claim, he found the following, at p. 438:
In my opinion, given the facts of the case at bar it [would] be unjust if the action against Lavoie were not bound by Grimes v. Cloutier. After all, Lavoie was a Quebec resident driving his car in his own province. Therefore, when an Ontario resident is involved in an accident in Quebec with a Quebec resident, although both the passenger and his or her driver are residents of Ontario, a claim against the Quebec driver must be barred by the Quebec non-actionability law.
As a result, Ontario law, including conflict rules developed according to Phillips v. Eyre, supra, was held to apply in the action of the respondents against the appellant Gagnon. Since Lavoie was not a resident of Ontario and the accident occurred in Quebec, the facts and law of Grimes v. Cloutier applied to any claim against him. The action was remitted for trial on that basis.
Carthy J.A. agreed with Tarnopolsky J.A. but arrived at the conclusion that the cross-claim should not proceed by a different route. He reviewed s. 2 of the Negligence Act, R.S.O. 1990, c. N.1, and concluded, at p. 440, that, because Lavoie could not, on the authority of Grimes v. Cloutier, have been sued alone, he was not a person who was or "would if sued have been, liable" in respect of the damage suffered by the respondent.
Blair J.A., who found the views of his colleagues complementary rather than inconsistent, agreed with both of them.
Historical Highlights of Choice of Law Rule in Tort
The genesis of the existing Canadian rule for the determination of choice of law for torts arising outside a court's territorial jurisdiction is the seminal case of Phillips v. Eyre, supra. There the plaintiff brought an action in England for assault and false imprisonment against the defendant who at the time of the torts was governor of Jamaica. The acts of which the plaintiff complained were part of a course of action taken by Jamaican authorities to suppress a rebellion. Later the governor caused an act of indemnity to be passed absolving all persons of liability for any unlawful act committed in putting down the rebellion. Much of the judgment given by Willes J. is devoted to questions concerning whether a colony like Jamaica could constitutionally enact such a statute; these the court answered in the affirmative. But the major import of the case relates to the final objection of the plaintiff that, assuming the colonial statute was valid in Jamaica, it could not have the effect of taking away a right of action in an English court. Willes J. replied that the objection rested on a misconception of a civil obligation and the corresponding right of action, which later he stated is only an accessory to the obligation and subordinate to it. As in the case of contract, the general rule was that "the civil liability arising out of a wrong derives its birth from the law of the place, and its character is determined by that law" (emphasis added) (p. 28). The substantive law, he affirmed, is governed by the law of the place where the wrong has been committed. That, of course, would be Jamaica because the torts were wholly committed there.
Willes J. then went on to say that English courts are said to be more open to admit actions founded on foreign transactions than those of other European countries, but he added, at p. 28, that there are restrictions (e.g., trespass to land) that exclude certain actions altogether, and "even with respect to those not falling within that description our courts do not undertake universal jurisdiction" (emphasis added). He then immediately continued with the following frequently cited passage, at pp. 28-29:
As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England. . . . Secondly, the act must not have been justifiable by the law of the place where it was done.
In this passage, Willes J. appears to commingle the law dealing with what we would today call jurisdiction and choice of law. The first rule is strictly related to jurisdiction as is evident from its context, which I have just related. The second rule we would normally think of as dealing with choice of law, which it is apparent from his earlier remarks was the place of the wrong, the lex loci delicti. It was not, however, necessary for Willes J. to engage in this type of modern analysis. All he was doing was expressing a rule of double actionability to permit suit in England; see Chartered Mercantile Bank of India v. Netherlands India Steam Navigation Co. (1883), 10 Q.B.D. 521, at pp. 536-37.
The law was not to remain in this form. In Machado v. Fontes, [1897] 2 Q.B. 231, (an interlocutory appeal heard in a summary way by two judges), Willes J.'s judgment was read in a rather wooden manner to mean something quite different from what he, in my view, had intended. In that case the plaintiff brought action in England for libel alleged to have been published in Portuguese in Brazil. Though the report leaves us to surmise, the names of the parties would indicate that they were Brazilian and, the language being Portuguese, the libel would seem to have taken place there. The court interpreted Willes J.'s language as meaning that an act committed abroad could be brought in England in the same way as if it had taken place in England, so long as it was not justified or excused under the law of the place where it was committed. It was, in other words, actionable under English law even if not actionable where it was committed if it was "unjustifiable" there, for example, if it constituted a criminal act there.
The approach taken in Machado v. Fontes was subjected to considerable judicial and academic criticism; see Professor Moffatt Hancock's biting Case and Comment on McLean v. Pettigrew, supra, (1945), 23 Can. Bar Rev. 348. In particular so far as Canadian cases are concerned, Viscount Haldane in Canadian Pacific Railway Co. v. Parent, [1917] A.C. 195, at p. 205, early expressed some reservations about it. For my part, I would have thought the question whether a wrong committed in Brazil by a Brazilian against another Brazilian gave rise to an action for damages should be within the purview of Brazil, and that its being made actionable under English law by an ex post facto decision of an English court would constitute an intrusion in Brazilian affairs which an English court, under basic principles of comity, should not engage in. I could understand the approach if the parties were both English nationals or domiciled in England and there is some support in English cases for that m