In recent years, and in particular during the COVID-19 pandemic, consumers are increasingly relying on e-commerce to purchase goods and services. A recent Ontario Court of Appeal case considered whether a British Columbia company could be sued in Ontario as a result of purchases made over the Internet.

What Happened?

In the autumn of 2015, two sisters, aged 19 and 20, decided they wanted to travel to Thailand to teach English. In August of 2016, they flew to Thailand to participate in a “Teach in Thailand” experience arranged through a British Columbia company (“the company”) with offices and employees in Vancouver.

After completing their teaching course, the sisters were assigned to different towns and given motor scooters for transportation.

In October 2016, while riding together on a motor scooter on a day off, the sisters were struck by another motorist and seriously injured. The younger sister died from her injuries; the older sister continues to suffer the lasting effects of the accident.

The surviving sister and her parents commenced an action in Ontario against the company, claiming damages for breach of contract, breach of fiduciary duty, negligence, negligent misrepresentation and other torts.

The company brought a motion to dismiss or stay the action based on lack of jurisdiction simpliciter and forum non conveniens. Jurisdiction simpliciter exists when a real and substantial connection exists between the parties, the matter and the jurisdiction. Forum non conveniens is a legal doctrine which allows a court to decline to exercise its jurisdiction over a lawsuit, on the basis that a court in another forum, or jurisdiction, is more suitable or convenient.

Lower Court Decision

The motion judge dismissed the company’s motion to dismiss or stay the action.

Among other things, the motion judge found a presumptive connecting factor in the form of torts committed in Ontario. He concluded that the company had not rebutted the presumption of a “real and substantial connection” between the subject matter of the litigation and Ontario. After determining that Ontario had jurisdiction simpliciter, he concluded that the company had failed to establish that another forum was clearly more appropriate.

Issue

On appeal, the company argued that the motion judge erred in his application of the relevant principles regarding the proper jurisdiction for the case.

Ontario Court of Appeal Decision

The court found no error in the motion judge’s conclusion that the company had failed to rebut the real and substantial connection created by the presumptive connecting factors established by a tort committed in Ontario. The court explained that in order to rebut a presumptive connecting factor, a defendant must “establish 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”. While the motion judge had noted the potential weakness of Internet representations as a connecting factor, he pointed out that the company was well-aware that it was attracting Ontario clients through representations made in Ontario.

Further, the court found that the requirement that there be a “good arguable case supporting a presumptive factor” had easily been met in this case, stating:

“The sisters were in Ontario when they responded to internet advertisements from [the company]. At least some of the misrepresentations relied on are alleged to have been made to them in Ontario, and before they left for Thailand. Further, the motion judge’s finding that there was evidence that may support the misrepresentations pleaded and that they occurred in Ontario is supported by the record.”

The court explained that it was not necessary for the motion judge to determine that all of the alleged misconduct was that of the company or that all of the alleged misconduct was connected to Ontario. Rather, the questions on a jurisdiction motion are whether the statement of claim asserts the core elements of a cause of action known to law and appears capable of amendment to cure any pleadings deficiencies and whether the claimant has established a good arguable case that the cause of action is sufficiently connected to Ontario to find jurisdiction. The court stated:

“It is necessary for the purpose of a jurisdiction motion for the court to determine whether there is a “real and substantial connection” between Ontario and the claims, when considered as a whole.”

Finally, the court found that the motion judge conducted a thorough forum non conveniens analysis and considered all the relevant factors; the court found no basis on which to interfere with his conclusion.

As a result, the appeal was dismissed.

Get Advice

We are committed to the health and safety of our community and helping ‘flatten the COVID-19 curve’. Our office remains open, but for the health and safety of all members of our community we will be limiting in-person client engagements in our office until further notice.

Your matters are extremely important to us and we want to assure you that business will not be disrupted.

If you have any questions we encourage you to contact us at info@cmlawyers.ca. Let’s continue to take care of each other during this difficult time.

The corporate lawyers at Cherkowski Marsden LLP in Vernon and Salmon Arm have over 50 years of combined experience helping clients structure their businesses and/or incorporate new or existing companies. We will thoroughly examine your options and help you determine the most advantageous business structure for your needs. We want to ensure that we come up with a strategy that best serves to minimize your costs and affords you protection. We work with small, family-owned businesses as well as multinational corporations, and our experience and expertise are similarly varied. As a result, we are perfectly positioned to advise you as your business grows, keeping you informed of potential pitfalls and opportunities along the way. We will put together a proactive plan that best suits your current needs and can grow and change along with your business over time.

At Cherkowski Marsden LLP we work with business professionals at all levels and across a wide range of industries. We advise our clients on the advantages and disadvantages surrounding incorporation, joint ventures, partnerships, limited partnerships, and sole proprietorship. Our work doesn’t end once your business organization is in place; we will also work with you on business maintenance and will continue to highlight beneficial changes as the business evolves. If you are looking to establish, evolve or grow your business, contact us online or at 250-308-0338 (Vernon office) or 250-803-9171 (Salmon Arm office) to take advantage of our experienced and knowledgeable advice.