Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP

Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP
Collection
Supreme Court Judgments
Date
2016-07-15
Neutral citation
2016 SCC 30
Report
[2016] 1 SCR 851
Case number
36087
Judges
McLachlin, Beverley; Abella, Rosalie Silberman; Cromwell, Thomas Albert; Karakatsanis, Andromache; Wagner, Richard; Gascon, Clément; Côté, Suzanne
On appeal from
Ontario
Notes
SCC Case Information: 36087
Decision Content
SUPREME COURT OF CANADA
Citation: Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, [2016] 1 S.C.R. 851
Appeal heard: December 3, 2015
Judgment rendered: July 15, 2016
Docket: 36087
Between:
Lapointe Rosenstein Marchand Melançon LLP,
Cabinet juridique Panneton inc., Heenan Blaikie LLP,
Cain Lamarre Casgrain Wells S.E.N.C.R.L., Dunton Rainville S.E.N.C.R.L.,
Jean‑Pierre Barrette, Prévost Fortin D’Aoust S.E.N.C.R.L.,
Dominique Zaurrini, Francis Carrier Avocat inc.,
Parent, Doyon, Rancourt & Associés S.E.N.C.R.L.,
Claude Caron, Gérard Desjardins, Claude Cormier,
Guertin Lazure Crack S.E.N.C.R.L., Luc Boulais avocat inc.,
Lavery, de Billy, LLP, Grenier Verbauwhede Avocats inc.,
Zaurrini Avocats, Louis Riverin, Paul Langevin,
Roy Laporte inc., Norton Rose OR LLP, Girard Allard Guimond Avocats,
Langlois Kronström Desjardins avocats S.E.N.C.R.L., Perreault Avocat,
Cliche Lortie Ladouceur inc., Gilles Lavallée,
Lévesque Gravel & Associés S.E.N.C., Michel Paquin,
Sylvestre & Associés avocats S.E.N.C.R.L. and Nolet Ethier, avocats, S.E.N.C.R.L.
Appellants
and
Cassels Brock & Blackwell LLP
Respondent
Coram: McLachlin C.J. and Abella, Cromwell, Karakatsanis, Wagner, Gascon and Côté JJ.
Reasons for Judgment:
(paras. 1 to 61)
Dissenting Reasons:
(paras. 62 to 146)
Abella J. (McLachlin C.J. and Cromwell, Karakatsanis, Wagner and Gascon JJ. concurring)
Côté J.
Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, [2016] 1 S.C.R. 851
Lapointe Rosenstein Marchand Melançon LLP,
Cabinet juridique Panneton inc., Heenan Blaikie LLP,
Cain Lamarre Casgrain Wells S.E.N.C.R.L.,
Dunton Rainville S.E.N.C.R.L., Jean‑Pierre Barrette,
Prévost Fortin D’Aoust S.E.N.C.R.L.,
Dominique Zaurrini, Francis Carrier Avocat inc.,
Parent, Doyon, Rancourt & Associés S.E.N.C.R.L.,
Claude Caron, Gérard Desjardins, Claude Cormier,
Guertin Lazure Crack S.E.N.C.R.L.,
Luc Boulais avocat inc., Lavery, de Billy, LLP,
Grenier Verbauwhede Avocats inc.,
Zaurrini Avocats, Louis Riverin, Paul Langevin,
Roy Laporte inc., Norton Rose OR LLP,
Girard Allard Guimond Avocats,
Langlois Kronström Desjardins avocats S.E.N.C.R.L.,
Perreault Avocat, Cliche Lortie Ladouceur inc.,
Gilles Lavallée, Lévesque Gravel & Associés S.E.N.C.,
Michel Paquin, Sylvestre & Associés avocats S.E.N.C.R.L. and
Nolet Ethier, avocats, S.E.N.C.R.L. Appellants
v.
Cassels Brock & Blackwell LLP Respondent
Indexed as: Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP
2016 SCC 30
File No.: 36087.
2015: December 3; 2016: July 15.
Present: McLachlin C.J. and Abella, Cromwell, Karakatsanis, Wagner, Gascon and Côté JJ.
on appeal from the court of appeal for ontario
Private international law — Choice of forum — Court having jurisdiction — Forum non conveniens — Whether Ontario courts should assume jurisdiction over third party claim brought by Ontario law firm against several law firms located in Quebec in the context of national class action certified in Ontario — If so, whether Ontario courts ought to decline to exercise jurisdiction on ground that court of another jurisdiction is clearly a more appropriate forum for disposing of litigation.
One of the casualties of the financial crisis in 2008 was the Canadian automotive sector. To assist, the federal government bailed out some of the country’s auto manufacturers in 2009, including General Motors of Canada Ltd. (GM). A term of the government’s bailout of GM was that it close dealerships across the country. Over 200 Canadian dealerships were closed. GM offered compensation to each dealer pursuant to Wind‑Down Agreements. Two hundred and seven GM dealers who had been closed down started a class action in Ontario, alleging that GM had forced them to sign Wind‑Down Agreements, and that the law firm of Cassels Brock & Blackwell LLP (Cassels Brock) was negligent in failing to provide appropriate legal advice. Cassels Brock added 150 law firms from across the country as third party defendants, seeking contribution and indemnity from the law firms who gave the individual dealers the independent legal advice required under the Agreements. Eighty‑three non‑Ontario law firms challenged Ontario’s jurisdiction, including 32 based in Quebec. The motions judge dismissed the challenge. Only the 32 Quebec law firms appealed. The Ontario Court of Appeal dismissed the appeal.
Held (Côté J. dissenting): The appeal should be dismissed.
Per McLachlin C.J. and Abella, Cromwell, Karakatsanis, Wagner and Gascon JJ.: Before a court can assume jurisdiction over a claim, a real and substantial connection must be shown between the circumstances giving rise to the claim and the jurisdiction where the claim is brought. This Court’s decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, sets out the test for establishing the requisite connection in tort claims, and identified four presumptive connecting factors. All presumptive connecting factors generally point to a relationship between the subject matter of the litigation and the forum where jurisdiction is proposed to be assumed.
This case engages the fourth factor: whether a contract connected with the dispute was made in the province. The fourth factor premises the determination of when a contract will be made in a given jurisdiction on the traditional rules of contract formation. All that is required is a connection between the claim and a contract that was made where jurisdiction is sought to be assumed. A connection does not necessarily require that an alleged tortfeasor be a party to the contract. Nothing in Van Breda suggests that the fourth factor is unavailable when more than one contract is involved, or that a different inquiry applies in these circumstances. Nor does Van Breda limit this factor to situations where the defendant’s liability flows immediately from his or her contractual obligations. It is sufficient that the dispute be connected to a contract made in the province or territory where jurisdiction is proposed to be assumed. This merely requires that a defendant’s conduct brings him or her within the scope of the contractual relationship and that the events that give rise to the claim flow from the relationship created by the contract. The fact that another forum may also be connected with the dispute does not undermine the existence of a real and substantial connection.
The first step is identifying the dispute. The nucleus of the claim against Cassels Brock, as well as that of Cassels Brock’s third party claim against the local lawyers who signed certificates of independent legal advice, relates to the claims that there was negligent legal advice about the Wind‑Down Agreements. The dispute is therefore a tort claim for professional negligence.
The next question is whether a contract connected with this dispute was made in Ontario. The contract connected with this dispute is the Wind‑Down Agreement, which is clearly connected to Cassels Brock’s third party claims against the local lawyers. Valid acceptance of GM’s offer required that each individual dealer obtain independent legal advice. The local lawyers’ provision of legal advice brought them within the scope of the contractual relationship between GM and the dealers.
In Ontario, a contract is formed based on an offer by one party, accepted by the other, or an exchange of promises, supported by consideration. Where the contracting parties are located in different jurisdictions, the contract will be formed in the jurisdiction where the last essential act of contract formation, such as acceptance, took place. Here, the contract in question was made in Ontario. The last act essential to contract formation occurred at GM’s office in Ontario, where its Vice President of Sales, Service & Marketing accepted and signed the Wind‑Down Agreements that had been signed and returned by the dealers. Other contextual factors demonstrate that the Agreement was made in Ontario: the Agreement expressly provides that it is governed by Ontario law, GM’s head office and the bulk of the affected dealers were located in Ontario, and the business relationships and the litigation are deeply related to Ontario.
Cassels Brock has therefore demonstrated a real and substantial connection between a contract made in the province (the Wind‑Down Agreement) and the dispute (the third party negligence claim). The strength of this connection was not rebutted by the Quebec lawyers. The Ontario courts, therefore, properly assumed jurisdiction over the claim.
Once jurisdiction is established, the party contesting jurisdiction may raise the doctrine of forum non conveniens. The burden is on the defendant to demonstrate that a court of another jurisdiction has a real and substantial connection to the claim and that this alternative forum is clearly more appropriate than the one where jurisdiction may be assumed. This threshold will be met where the alternative forum would be fairer and more efficient for disposing of the litigation. It is not sufficient that the alternative forum merely be comparable to the forum where jurisdiction has been found to exist. Forum non conveniens is not concerned only with fairness to the party contesting jurisdiction, it is also concerned with efficiency and convenience for the proceedings themselves.
In this case, the third party claims against the other 118 law firms will be heard in Ontario. This strongly weighs against finding that the Quebec courts are a clearly more appropriate forum for the 32 Quebec firms. Allowing the Quebec third party claims to proceed in Ontario along with the 118 other law firms, would clearly be a more efficient and effective solution. Because the third party claims involve a significant number of parties and require the mobilization of significant judicial resources, those resources should be allocated and expended with a view to making the litigation quicker, more economical and less complicated. Adjudicating all the third party claims in the same forum avoids the possibility of conflicting judgments and duplication in fact‑finding and legal analysis, and will ensure that they are resolved in a timelier and more affordable manner. All of this leads to the conclusion that Ontario should assume jurisdiction over all the third party claims, including those involving the Quebec law firms.
Per Côté J. (dissenting): At the heart of this dispute is the fourth connecting factor set out in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, which provides Ontario with presumptive jurisdiction when a contract connected with the dispute was made in the province.
In this case, the relevant Wind-Down Agreements were simply not made in Ontario. Under the law of Ontario, a contract will be considered formed where the last essential act of contract formation takes place — in other words, where final acceptance is notified. Here, GM’s notice of final acceptance was itself an essential condition for the Wind‑Down Agreements to become binding, and was clearly the last essential formative act. In Ontario, acceptance of a contract will be considered notified in the place where it is received. In this case, GM’s notice of final acceptance was transmitted to its Quebec dealers in Quebec. As such, the relevant Wind‑Down Agreements in respect of the Quebec dealers would have been formed in Quebec. Contextual considerations, like the choice of law clause, and the fact that the bulk of the terminated dealers, as well as GM’s head office, are located in Ontario, have nothing to do with where the Quebec dealers’ Agreements were formed. Furthermore, if these considerations are given weight, the parties’ own desires regarding where their contract is formed risk becoming irrelevant.
Even if the Agreements had been concluded in Ontario, they are not connected with these claims in the manner required by Van Breda’s fourth connecting factor. This fourth connecting factor only provides jurisdiction over claims where the defendant’s liability in tort flows immediately from the defendant’s own contractual obligations. Indeed, in these kinds of cases, the claim in tort will often resemble a claim in contract. This may occur in cases of concurrent liability, where a defendant’s failure to exercise reasonable skill and care may constitute, at once, both a breach of contract and a tort. This may also occur in cases where a third party beneficiary to a contract has a claim in tort for acts which occurred in the performance — and potential breach — of that contract. In these cases, the defendant’s breach of contract and his tort are indissociable. Indeed, the duty of care the defendant owes stems from his contract. Establishing jurisdiction over these kinds of claims in tort represents the underlying rationale of Van Breda’s fourth connecting factor. It is what makes this factor both a defensible and a desirable conflicts rule. This may represent a narrow interpretation, but it reflects the way the fourth connecting factor was described, justified and applied in Van Breda.
On this narrow interpretation of Van Breda’s fourth factor, the courts of Ontario clearly do not have jurisdiction over Cassels Brock’s third party claims. The only contracts that could possibly be close enough to the dispute are the retainer agreements concluded between the Quebec lawyers and their clients. The Wind‑Down Agreements — the subject of the Quebec lawyers’ legal advice — are simply too remote. The Quebec lawyers were never brought within the scope of the contractual relationship between GM and the dealers. They were not parties to the Agreements, never owed any obligations under them, were never owed any benefit under them, and are not being sued in tort for actions committed in their performance. Instead, their obligations flow entirely from their retainer agreements. The most that can be said is that the Wind‑Down Agreements contributed to the factual circumstances following which an entirely separate fault or breach occurred.
The majority’s approach to Van Breda’s fourth factor misconstrues what it means for a contract to be connected with a claim in tort. The broad scope given to Van Breda’s fourth connecting factor by the majority divorces it from its specific and limited foundations. In doing so, this broader approach will lead to jurisdictional overreach. In this case, the requirement of independent legal advice is entirely unrelated to the quality of the legal advice that was obtained in Quebec, and that forms the basis of each claim. Nor can this requirement bring the Quebec lawyers within the scope of the dealers’ contractual relationship with GM. There is also nothing real or substantial about the fact that the allegedly negligent legal advice was about the Wind‑Down Agreement. Every day, lawyers advise clients on contracts that will eventually be formed in another province. If these contracts are a fount of jurisdiction, then such lawyers could be sued for negligence wherever the contracts are entered into.
The majority’s approach also muddies an area of the law that should be kept clear and jeopardizes the certainty and predictability that was promised by Van Breda’s purposefully specific connecting factors. On a more restrained approach, it should always be clear when the fourth connecting factor can serve as a basis for jurisdiction. By contrast, the majority’s approach amounts to an open invitation for litigants to engage in long‑winded jurisdictional debates, since the words “connected with” and “connection” are notoriously flexible and fact‑specific.
There may also be harmful commercial implications that flow from the majority’s broader approach to the fourth connecting factor, as well as negative repercussions on the practice of law itself. The majority’s holding means that whenever a lawyer’s advice is required before his client can accept an offer, that lawyer may later be sued for professional negligence wherever the resulting contract is formed, regardless of where his services were provided. Such lawyers may feel conflicted, since they will likely have a personal stake in where their client’s contract is entered into.
With respect to the claims against the two national law firms which have offices both in Quebec and in Ontario, whatever jurisdiction the courts of Ontario have over these claims should be declined on the basis of forum non conveniens. It is clear that Quebec is the more appropriate forum for the third party claims against the two national law firms. If these claims were heard in Ontario, the lawyers and witnesses involved, who are all residents of Quebec, would all have to travel to testify, incurring significant costs. Furthermore, since Quebec law will govern the claims against the national law firms with offices in Quebec, additional costs would be incurred to provide an Ontario court with expertise on Quebec law. Finally, if the claims against the Quebec law firms were to be divided between Quebec and Ontario, there is a risk of conflicting decisions.
Cases Cited
By Abella J.
Applied: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572; referred to: Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427; Tolofson v. Jensen, [1994] 3 S.C.R. 1022; Hunt v. T&N plc, [1993] 4 S.C.R. 289; Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077; Neophytou v. Fraser, 2015 ONCA 45, 63 C.P.C. (7th) 13; Eco‑Tec Inc. v. Lu, 2015 ONCA 818, 343 O.A.C. 140, leave to appeal refused, May 5, 2016, file no. 36825; Jedfro Investments (U.S.A.) Ltd. v. Jacyk, 2007 SCC 55, [2007] 3 S.C.R. 679; Pixiu Solutions Inc. v. Canadian General‑Tower Ltd., 2016 ONSC 906; Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636; Currie v. McDonald’s Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321; Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623; Association des parents de l’école Rose‑des‑vents v. British Columbia (Education), 2015 SCC 21, [2015] 2 S.C.R. 139; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.
By Côté J. (dissenting)
Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572; Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161; Eastern Power Ltd. v. Azienda Comunale Energia & Ambiente (1999), 178 D.L.R. (4th) 409, leave to appeal refused, [2000] 1 S.C.R. xi; Brinkibon Ltd. v. Stahag Stahl und Stahlwarenhandelsgesellschaft m.b.H., [1983] 2 A.C. 34; Inukshuk Wireless Partnership v. 4253311 Canada Inc., 2013 ONSC 5631, 117 O.R. (3d) 206; Christmas v. Fort McKay First Nation, 2014 ONSC 373, 119 O.R. (3d) 21; BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; Galambos v. Perez, 2009 SCC 48, [2009] 3 S.C.R. 247; Earl v. Wilhelm, 2000 SKCA 1, 183 D.L.R. (4th) 45; White v. Jones, [1995] 2 A.C. 207; Whittingham v. Crease & Co. (1978), 88 D.L.R. (3d) 353; Chevron Corp. v. Yaiguaje, 2015 SCC 42, [2015] 3 S.C.R. 69; Breeden v. Black, 2012 SCC 19, [2012] 1 S.C.R. 666; Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321; GreCon Dimter inc. v. J.R. Normand inc., 2005 SCC 46, [2005] 2 S.C.R. 401; Muscutt v. Courcelles (2002), 60 O.R. (3d) 20; Tolofson v. Jensen, [1994] 3 S.C.R. 1022; Oppenheim forfait GMBH v. Lexus maritime inc., 1998 CanLII 13001; Trillium Motor World Ltd. v. General Motors of Canada Ltd., 2015 ONSC 3824, 30 C.B.R. (6th) 1; Éditions Écosociété Inc. v. Banro Corp., 2012 SCC 18, [2012] 1 S.C.R. 636.
Statutes and Regulations Cited
Civil Code of Québec, arts. 3139, 3148.
Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28.
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).
European Communities. Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2001] O.J. L. 12/1, art. 5(1), (3).
Negligence Act, R.S.O. 1990, c. N.1.
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rr. 17.02(f)(i), 29.
Authors Cited
Black, Vaughan. “Simplifying Court Jurisdiction in Canada” (2012), 8 J. Priv. Int. Law 411.
Blom, Joost. “New Ground Rules for Jurisdictional Disputes: The Van Breda Quartet” (2012), 53 Can. Bus. L.J. 1.
Blom, Joost, and Elizabeth Edinger. “The Chimera of the Real and Substantial Connection Test” (2005), 38 U.B.C. L. Rev. 373.
Castel, Jean‑Gabriel. “The Uncertainty Factor in Canadian Private International Law” (2007), 52 McGill L.J. 555.
Fawcett, J. J., and J. M. Carruthers. Cheshire, North & Fawcett Private International Law, 14th ed. Oxford: Oxford University Press, 2008.
Goldstein, Gérald, et Ethel Groffier. Droit international privé, t. I, Théorie générale. Cowansville, Qué.: Yvon Blais, 1998.
McCamus, John D. The Law of Contracts, 2nd ed. Toronto: Irwin Law, 2012.
Monestier, Tanya J. “A ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2007), 33 Queen’s L.J. 179.
Monestier, Tanya J. “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2013), 36 Fordham Int’l L.J. 396.
Phipson on Evidence, 15th ed. London: Sweet & Maxwell, 2000.
Swan, Angela, with the assistance of Jakub Adamski. Canadian Contract Law, 2nd ed. Markham, Ont.: LexisNexis Canada, 2009.
Uniform Law Conference of Canada. Uniform Court Jurisdiction and Proceedings Transfer Act (online: www.ulcc.ca/en/uniform‑acts‑new‑order/current‑uniform‑acts/739‑jurisdiction/civil‑jurisdiction/1730‑court‑jurisdiction‑proceedings‑transfer‑act).
Waddams, S. M. The Law of Contracts, 6th ed. Toronto: Canada Law Book, 2010.
Walker, Janet. Castel & Walker: Canadian Conflict of Laws, 6th ed. Markham, Ont.: LexisNexis, 2005 (loose‑leaf updated 2016, release 55).
Watson, Garry D., and Frank Au. “Constitutional Limits on Service Ex Juris: Unanswered Questions from Morguard” (2000), 23 Adv. Q. 167.
APPEAL from a judgment of the Ontario Court of Appeal (Doherty, LaForme and Lauwers JJ.A.), 2014 ONCA 497, 120 O.R. (3d) 598, 53 C.P.C. (7th) 1, 374 D.L.R. (4th) 411, 322 O.A.C. 161, [2014] O.J. No. 3096 (QL), 2014 CarswellOnt 8775 (WL Can.), affirming a decision of Belobaba J., 2013 ONSC 2289, 51 C.P.C. (7th) 419, [2013] O.J. No. 2358 (QL), 2013 CarswellOnt 6666 (WL Can.). Appeal dismissed, Côté J. dissenting.
Jo‑Anne Demers and Jean‑Olivier Lessard, for the appellants.
Peter H. Griffin and Jon Laxer, for the respondent.
The judgment of McLachlin C.J. and Abella, Cromwell, Karakatsanis, Wagner and Gascon JJ. was delivered by
[1] Abella J. — Even if the underlying facts involve another jurisdiction, a Canadian court can, if there is a sufficient connection, assume jurisdiction over a tort claim. In Van Breda,[1] this Court identified four “presumptive connecting factors” to assist in making this determination. This appeal focuses on the fourth factor, whereby jurisdiction can be assumed if a contract connected with the dispute was made in the province where the tort claim is brought.
[2] The specific question in this appeal is whether the Ontario courts should assume jurisdiction over a third party claim brought by an Ontario law firm against several law firms located in Quebec in the context of a national class action.
Background
[3] One of the casualties of the financial crisis in 2008 was the Canadian automotive sector. To assist, the federal government bailed out some of the country’s auto manufacturers in 2009, including General Motors of Canada Ltd. A term of the bailout was the requirement that GM Canada close dealerships across the country.
[4] Over 200 Canadian dealerships were closed. GM Canada offered compensation to each dealer pursuant to Wind-Down Agreements. The Agreements contained the following provisions of particular relevance:
Article 13: “This Agreement is governed by the laws of the Province of Ontario.”
Article 19: “The parties consent and agree that the courts of the Province of Ontario have exclusive jurisdiction to hear and determine claims or disputes between the parties hereto pertaining to this Agreement.”
[5] All dealers also had to agree to waive their rights under any and all applicable statutes, regulation or other law, including rights under provincial franchise laws.[2]
[6] Attached to each Agreement was a letter dated May 20, 2009, from Marc Comeau, GM Canada’s Vice President of Sales, Service & Marketing, sent from his office in Oshawa, Ontario. It states, in part:
Our offer, as set out in the Wind-Down Agreement, is conditional upon all of the Non-Retained Dealers accepting the offer (the “Acceptance Threshold Condition”) and executing and delivering their respective Wind-Down Agreements to GM Canada on or before May 26, 2009 at 6:00 pm EST (the “End of the Offer Period”). GM Canada reserves the right, in its discretion, to waive the Acceptance Threshold Condition. Any Wind-Down Agreement signed and returned to GM Canada by the End of the Offer Period will not become effective unless and until GM Canada provides written notice to those dealers that the Acceptance Threshold Condition and any other required conditions have been met or have been waived by GM Canada. [Emphasis added; emphasis in original deleted.]
[7] The letter also included a requirement that each dealer get independent legal advice and a certificate signed by the retained lawyer. The signed certificate was to be attached as an Exhibit to the Wind-Down Agreement:
If you are interested in entering into the Wind-Down Agreement, you should review the Wind-Down Agreement with legal, tax and any other advisors of your choosing. To accept, please request your counsel to complete a certificate of independent legal advice (attached as an Exhibit to the Wind-Down Agreement). Please send the signed certificate together with the executed Wind-Down Agreement by the End of the Offer Period by pdf or fax to your Regional Zone Office Manager . . . with two original signed copies of the Agreement, each with an original signed Certificate, to follow by courier.
[8] The signed certificate of independent legal advice had to acknowledge that the lawyer had been retained by the dealer, had read the Wind-Down Agreement, and had fully explained the nature and effect of the Agreement to the dealer, including an explanation of the waivers, releases and indemnification obligations contained in the Agreement. Each dealer, in turn, had to acknowledge on the certificate that he or she had carefully read it.
[9] Mr. Comeau sent another letter to the affected dealers 10 days later advising them that because of the high acceptance rate of dealers, GM Canada was waiving the threshold condition that all dealers sign the Wind-Down Agreements.
[10] Two hundred and seven GM Canada dealers started a class action against GM Canada in Ontario, alleging that GM Canada had forced them to sign the Wind-Down Agreements in breach of provincial franchise laws. They also alleged that the law firm of Cassels Brock & Blackwell LLP, counsel for the Canadian Automobile Dealers Association, was negligent in the legal advice it gave to the General Motors dealers who were members of the Canadian Automobile Dealers Association and therefore had access to that legal advice.
[11] Additionally, the dealers claimed that because Cassels Brock was on retainer to Industry Canada — from whom GM Canada needed funding — at the time it was retained by the Canadian Automobile Dealers Association, it had a conflict of interest.
[12] The total amount of damages claimed was $750 million.
[13] The class action was certified by Strathy J. in 2011. The Ontario Court of Appeal refused leave to appeal the certification in 2012.
[14] Relying on rule 29 of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and the Negligence Act, R.S.O. 1990, c. N.1, Cassels Brock added 150 law firms as third party defendants. Sixty-seven were based in Ontario, 32 in Quebec, and 51 in the 8 remaining provinces — 19 in Alberta, 7 in Nova Scotia, 6 in each of British Columbia, Saskatchewan and Manitoba, 5 in New Brunswick, and 1 in each of Newfoundland and Labrador and Prince Edward Island. Six of these firms were national and had offices in Ontario.
[15] The basis for the third party claims was that if Cassels Brock was found to be negligent in failing to provide appropriate legal advice, it was seeking contribution and indemnity from the third party law firms who gave the individual dealers independent legal advice.
[16] The 32 law firms based in Quebec, and, separately, the other 51 non-Ontario law firms, claimed in two motions that because they were not domiciled or resident in Ontario and did not carry on business there, there was an insufficient connection between the third party claims and the Ontario courts. Nor did they give any legal advice in Ontario. Alternatively, they argued that even if the Ontario courts had jurisdiction, they ought to decline to exercise it based on forum non conveniens.
[17] Belobaba J. dismissed the motions.[3] In his view, the fourth Van Breda factor was met because there was a “real and substantial connection” between a contract made in the province (the Wind-Down Agreement) and the dispute (between Cassels Brock and the local lawyers).
[18] Belobaba J. based this conclusion on the fact that the Wind-Down Agreement expressly addressed the issue of the provision of legal advice. Any lawyer reviewing the Agreement would have known from the Agreement that it was governed by Ontario law and that all disputes were to be litigated in Ontario. More importantly, the Wind-Down Agreement itself contemplated and required the involvement of local lawyers: it required each dealer to obtain independent legal advice about the Agreement, and obliged the lawyer providing the advice to sign a certificate confirming the lawyer had read the Agreement and explained its nature and effect to the dealer. As a result, while the lawyers were not parties to the Wind-Down Agreement, they were brought within the scope of this contractual relationship by providing legal advice to the dealers. Finally, the third party tort claim deals squarely with the provision and adequacy of the local lawyers’ legal advice. It should not, as a result, “surprise the local lawyers if they were added as third parties to the Ontario class action that was brought by their clients. Indeed it would be crazy for [Cassels Brock] not to do so.”
[19] Belobaba J. also refused to accede to the invitation to decline jurisdiction on the basis of forum non conveniens. Thirty-two law firms were based in Quebec and the 51 remaining firms were “scattered” across the other 8 provinces.
[20] He relied on Breeden v. Black, [2012] 1 S.C.R. 666, released the same day as Van Breda, and summarized the test as follows:
When defendants are scattered over a number of jurisdictions and only one forum can be selected, the forum selected by the plaintiff can only be displaced if the defendants can point to an alternative forum that is “clearly more appropriate”. [para. 48]
[21] Since Cassels Brock’s third party action against the 67 Ontario-based law firms was already proceeding in Ontario, Belobaba J. concluded that it “cannot be seriously maintained” that Quebec, with only 32 firms, or Alberta, with only 19, were “clearly more appropriate” forums.
[22] Only the 32 Quebec law firms appealed Belobaba J.’s judgment. Lauwers J.A. agreed with Belobaba J.[4] He confirmed that the Wind-Down Agreement is the relevant contract in applying the fourth Van Breda factor to these third party actions. He also agreed that the Agreement was formed in Ontario and was governed by Ontario law. The real and substantial connection between the third party actions and the Agreement was also clear. While recognizing that satisfying the procedural requirements for third party claims does not necessarily give rise to a real and substantial connection for the purpose of jurisdiction, in this case there was an “integral relationship” between the Wind-Down Agreements, the retainers between the local lawyers and the Quebec class members, the advice the local lawyers gave, and the certificates of independent legal advice they were obliged to sign.
[23] The Court of Appeal also agreed that jurisdiction should not be declined on the basis of forum non conveniens. Because only the 32 Quebec law firms appealed, almost 120 law firms were going to have their cases determined in Ontario. This made it hard to accept that Quebec was a “clearly more appropriate” forum than Ontario, where all the other third party defendants were going to litigate what were essentially common defences.
[24] For the following reasons, I would dismiss the appeal.
Analysis
[25] Before a court can assume jurisdiction over a claim, a “real and substantial connection” must be shown between the circumstances giving rise to the claim and the jurisdiction where the claim is brought: Van Breda, at paras. 22-24; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] 2 S.C.R. 427, at para. 60; Tolofson v. Jensen, [1994] 3 S.C.R. 1022, at p. 1049; Hunt v. T&N plc, [1993] 4 S.C.R. 289, at pp. 325-26 and 328; Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, at pp. 1108-10.
[26] This Court’s decision in Van Breda sets out the refined and revised test for establishing the requisite connection in tort claims. Writing for a unanimous Court, LeBel J. identified four non-exhaustive presumptive connecting factors:
1. The defendant is domiciled or resident in the province;
2. The defendant carries on business in the province;
3. The tort was committed in the province; or
4. A contract connected with the dispute was made in the province.
[27] As LeBel J. noted, “[a]ll presumptive connecting factors generally point to a relationship between the subject matter of the litigation and the forum” where jurisdiction is proposed to be assumed: para. 92. The existence of this relationship makes it “reasonable to expect that the defendant would be called to answer legal proceedings in that forum”: para. 92. The burden of establishing the application of a presumptive factor in a given case lies with the party asserting jurisdiction. There is no requirement that more than one factor be shown to apply in a given case. The presumption arising from each of these factors may be rebutted by the party resisting jurisdiction by showing that there is no real relationship — or only a weak relationship — between the subject matter of the litigation and the proposed forum: paras. 95-100; Joost Blom, “New Ground Rules for Jurisdictional Disputes: The Van Breda Quartet” (2012), 53 Can. Bus. L.J. 1, at pp. 9-10 and 14.
[28] As Van Breda makes clear, the underlying objective of all presumptive connecting factors is to pacify the tension between flexibility and predictability, a “constant theme” in the Canadian law of jurisdiction: para. 66; Tanya J. Monestier, “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada” (2013), 36 Fordham Int’l L.J. 396, at p. 411.
[29] Under Van Breda, predictability is ensured by premising the assumption of jurisdiction on objective, factual connecting factors, giving the parties “reasonable confidence” as to whether jurisdiction will be assumed in a given case: para. 73; Monestier, at pp. 397-98 and 411.
[30] Flexibility is ensured by acknowledging “the need for fairness and justice to all parties engaged in litigation” when selecting and applying the presumptive connecting factors: Van Breda, at para. 75. In LeBel J.’s view, the list of presumptive connecting factors must be updated “as the needs of the system evolve”: para. 82. Van Breda did not purport to set out “a complete code of private international law”; it specifically foresaw that the principles and factors governing jurisdiction would be “developed as problems arise before the courts”: para. 68.
[31] The four Van Breda factors differ in the way they respectively seek to reconcile flexibility and certainty. The fourth factor promotes certainty by premising the determination of when a contract will be “made” in a given jurisdiction on the traditional rules of contract formation: see Blom, at pp. 16-17; Monestier, at p. 428; Neophytou v. Fraser (2015), 63 C.P.C. (7th) 13, at paras. 4-5; Eco-Tec Inc. v. Lu (2015), 343 O.A.C. 140, at paras. 16-17.[5] These rules are well known, as are their exceptions, limitations and governing principles. The parties’ ability to tailor these rules and principles also ensures “reasonable confidence” as to when jurisdiction will or will not be assumed under the fourth factor. They can, in other words, determine how and where a given contract will be formed.
[32] The fourth factor also promotes flexibility and commercial efficiency. As seen in Van Breda, all that is required is a connection between the claim and a contract that was made in the province where jurisdiction is sought to be assumed. A “connection” does not necessarily require that an alleged tortfeasor be a party to the contract. To so narrow the fourth presumptive factor would unduly narrow the scope of Van Breda, and undermines the flexibility required in private international law.
[33] Flexibility in applying the fourth factor does not amount to jurisdictional overreach. Conflict rules vary from one jurisdiction to another. In Quebec, for example, under art. 3148 of the Civil Code of Québec, Quebec authorities have jurisdiction over an action in extra-contractual liability where a fault was committed in Quebec or the injury was suffered there. Nonetheless, under art. 3139, if a Quebec authority has jurisdiction to rule on the principal demand, it would also have jurisdiction to rule on an incidental demand, which could include a third party claim. In a case like the one before us — and subject to any forum non conveniens argument — if the main contract had been made in Quebec and governed by the laws of Quebec, Quebec would have jurisdiction not only over Quebec lawyers sued in the principal demand, but also over any Ontario lawyers sued by the Quebec lawyers in third party claims for any professional fault allegedly committed in Ontario by the Ontario lawyers.
[34] Further, the real and substantial connection test has never been concerned with showing “the strongest” possible connection between the claim and the forum where jurisdiction is sought to be assumed: Van Breda, at para. 34.
[35] Nor does the fact that another forum may also be connected with the dispute undermine the existence of a real and substantial connection. Van Breda expressly recognized that there will be “situations in which more than one court might claim jurisdiction”: para. 15. However, the question of whether another forum is more appropriate plays no part in the analysis for assuming jurisdiction. This issue is only relevant once jurisdiction has already been assumed, and where the defendant seeks to convince the court that the other forum is “clearly more appropriate” under the doctrine of forum non conveniens: Van Breda, at paras. 101-2.
[36] Because this case engages the fourth presumptive connecting factor, namely whether a contract connected with the dispute was made in Ontario, it is necessary to identify the dispute. It must then be determined whether the dispu