Wednesday, April 18, 2012

“Real and substantial connection” test explained: Conrad Black can sue in Ontario

Club Resorts Ltd. v. Van Breda, 2012 SCC 17 is an extremely important decision as to what court has jurisdiction.

Broadly put the "real and substantial connection" test is the 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.

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 chose 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.

Breeden v. Black 2012 SCC 19 released today also applies the test and holds Conrad Black may sue in Ontario for a multistate defamation claim:

[1]                              This appeal concerns the manner in which the law of jurisdiction and the doctrine of forum non conveniens, which this Court recently reviewed in Club Resorts Ltd. v. Van Breda, 2012 SCC 17 ("Club Resorts"), are to be applied to a multistate defamation claim.  The respondent, Conrad Black, filed six libel actions in the Ontario Superior Court against the ten appellants, who are directors, advisors and a vice-president of Hollinger International, Inc. ("International").  Lord Black alleges that certain statements issued by the appellants and posted on International's website are defamatory and were published in Ontario when they were downloaded, read and republished in the province by three newspapers.  The appellants counter that the Ontario court should not assume jurisdiction over the actions because they are essentially American in substance or, alternatively, because the Illinois court is a more appropriate forum than the Ontario court.

[2]                              I find in this case that the Ontario court is entitled to assume jurisdiction as there exists a real and substantial connection between Ontario and the libel actions.  Giving due deference to the motion judge's exercise of discretion, I further find that the appellants have not shown that the Illinois court is a clearly more appropriate forum for the trial of these claims.  Accordingly, I would dismiss the appeal.  Reaching this result requires some discussion of the relationship between the law of jurisdiction, the doctrine of forum non conveniens and the tort of defamation.

9 comments:

Anonymous said...

Еνerythіng is very open with a cleaг clarificаtion of
the challenges. It waѕ dеfinіtely informative.

Үour sіte is νеry hеlpful.
Many thankѕ for shаrіng!
Also visit my web site ; girls birthday party theme

Anonymous said...

constantly i used to read smaller posts that also clear
their motive, and that is also happening with this post which I am reading here.
Look at my homepage ; cataract lens options

Anonymous said...

Hey there just wanted to give you a brief heads up and let you know a few of the images aren't loading correctly. I'm
not sure why but I think its a linking issue. I've tried it in two different browsers and both show the same results.
My web site :: affiliate programs

Anonymous said...

Hi there every one, here every one is sharing these familiarity, thus it's nice to read this weblog, and I used to visit this web site daily.
Here is my site : Century Bancorp

Anonymous said...

Just want to say your article is as amazing.
The clearness to your submit is just nice and that i can think you are knowledgeable
in this subject. Fine along with your permission let me to seize your feed to stay updated
with coming near near post. Thank you a million and
please keep up the enjoyable work.

Feel free to surf to my blog post ... chapter 7 Bankruptcy florida
Also see my web site :: how to file bankruptcy in florida

Anonymous said...

This is a huge population of vegan Seventh Day Adventists and
probably consume a fair amount of legumes. Loren Cordain, the German magazine
Der Spiegel interviews disciples who run through the undergrowth and eat wild boar in
explicit emulation of their Paleolithic forebears.

Here is my blog :: google diets

Anonymous said...

I always spent my half an hour to read this web site's articles all the time along with a cup of coffee.

my web site; windows xp registry cleaner

Anonymous said...

You can drive links to the blogs from your articles
on Hubpages and other Web 2. Can you search engine results page a flash site to the top of
search, followed by seven listings optimized usinglocal search engine
results page tactics. If news sites, article sites, and authentic videos can
attract a lot of debate on no-follow blogs and whether they are effective or not.


my weblog ... search engine optimization for google

Anonymous said...

I'd like to thank you for the efforts you've put in penning this website.

I am hoping to check out the same high-grade content from you in the future as well.

In fact, your creative writing abilities has motivated me to get my very own
blog now ;)

Feel free to visit my blog post: Get ONline HOme Careers ()