Source: http://hodderbarristers.com/client-work/duncan-litigation-guardian-of-v-neptunia-corp/
Timestamp: 2019-04-26 14:22:20+00:00

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Hodder Barristers | Duncan (Litigation guardian of) v. Neptunia Corp.
Duncan (Litigation guardian of) v. Neptunia Corp.
 One of the terms of the contract provided that the employer provide Mr. Duncan with furnished accommodation. On March 10, 1998, while residing in the furnished accommodation, Mr. Duncan was allegedly poisoned by gas leaking into the apartment.
Before the 1975 amendments, Rule 25 provided for a number of types of claims in respect of which service out of Ontario of a writ ofsummons or notice of writ might be allowed. The critical words of the Rule were: “Service out of Ontario… may be allowed…” and then the Rule specified a number of types of claims.
The effect of the 1975 amendment to the Rules is that an order for service outside the jurisdiction is no longer required. As there is no longer a need to apply for an order, Rule 26 containing the requirement for a supporting affidavit was repealed [O. Reg. 106/75, s. 5]. The critical words of Rule 25 now read: “…a party to an action… may be served out of Ontario…” in the types of cases listed in the subclauses of the Rule. The new Rule gives a party an absolute right to effect service out of Ontario in the cases specified.
Counsel for the applicant also referred to the concern expressed by the Courts in the cases decided under the Rules before 1975, with a reluctance to infringe the sovereignty of foreign states and with a requirement that the applicant show himself to be not only within the letter, but the spirit, of the Rules permitting service outside the jurisdiction. The judgments of the Court of Appeal and of McRuer, C.J.H.C. [ O.R. at p. 325], in Empire-Universal Films Ltd. v. Rank, and the other authorities referred to therein, make it clear that these considerations were also matters which arose in connection with the exercise by the Court of the judicial discretion which it possessed under the old Rules.
 Based on the history set out in the above cases, the purpose of rule 17.02(h) was to facilitate the use of Ontario courts for actions based on damage sustained in Ontario, as a result of a tort, breach of contract, breach of fiduciary duty or breach of confidence that was committed elsewhere. The provision to allow service ex juris without leave was intended to simplify procedure and avoid unnecessary court proceedings. This change providing service without leave in many instances as well as the expansion of the list of grounds for service ex juris can both be argued to recognize the expanding “circumstances in which international and interprovincial business is now conducted”, as referred to by Southey J. Our current era of “globalization” and internationalization, including such developments as growing numbers of free trade agreements and human rights treaties as well as the development of alien tort claim statutes and an international criminal court, would make that argument more relevant now than in 1976.
The plaintiff Vile, although injured in Quebec as a result of a tort committed in Quebec, suffered damage in Ontario where he returned to the hospital for six months and to his home following the accident. Vile incurred medical expenses in Ontario; he underwent pain and suffering in Ontario and still does; he was deprived of many of the amenities of his life and is still being deprived of them; he suffered loss of wages and of business profits; and his partner also lost financially as a result of the injury. All of these items of damage were sustained in Ontario even though the accident and the initial damage occurred in Quebec.
 The Supreme Court in Morguard quotes from Dickson J. in Moran v. Pyle National (Canada) Ltd. (1973), 1973 CanLII 192 (S.C.C.),  1 S.C.R. 393, 43 D.L.R. (3d) 239, in referring to the real and substantial connection test. The issue in Moran was the determination ofthe location where a tort had been committed. The plaintiffs were suing the manufacturer of a light bulb that allegedly caused Mr. Moran’s death. The accident occurred in Saskatchewan. The defendant’s manufacturing and assembling operations were based in Ontario and the United States and the defendant did not sell its products to consumers directly. The Saskatchewan Queen’s Bench Act [R.S.S. 1965, c. 73] prohibited a plaintiff from bringing an action based on damages in respect of a tort committed outside the province unless leave of the court was granted. The Fatal Accidents Act [R.S.S. 1965, c. 109] permitted an action to be brought if the wrongful act, neglect or default would have entitled the person injured to maintain an action if death had not ensued. Because of the wording of these provisions, the right of the plaintiff to maintain the action required a determination of the location of the commission of the tort.
 It is interesting to note that in setting out the principle to be applied, Dickson J. emphasized that the “purpose of negligence as a tort is to protect against carelessly inflicted injury and thus that the predominating element is the damage suffered” (p. 409 S.C.R., p. 251 D.L.R.). However, the injury in Moran was not ongoing. When the harm was caused by the light bulb, the damage was done simultaneously and Mr. Moran was killed. The specific nature of the fact situation is demonstrated by Professor Hogg’s interpretation in the preceding paragraph. In Mr. Duncan’s case, the damage caused by the gas leak continued and intensified in a different location than where the leak occurred. It is not clear that Dickson J.’s comments about the damage suffered should be understood to apply to this different fact situation. The context ofproduct manufacturer’s liability is not applicable to the Duncan case.
In Morguard, a more accommodating approach to recognition and enforcement was premised on there being a “real and substantial connection” to the forum that assumed jurisdiction and gave judgment. Contrary to the comments of some commentators and lower court judges, this was not meant to be a rigid test, but was simply intended to capture the idea that there must be some limits on the claims to jurisdiction… The exact limits of what constitutes a reasonable assumption of jurisdiction were not defined, and I add that no test can perhaps ever be rigidly applied; no court has ever been able to anticipate all of these.
Whatever approach is used, the assumption of and the discretion not to exercise jurisdiction must ultimately be guided by the requirements of order and fairness, not a mechanical counting of contacts or connections.
With the subsequent decision in Hunt v. T & N plc, 1993 CanLII 43 (S.C.C.),  4 S.C.R. 289, it now seems clear that the Morguardprinciples are “constitutional imperatives” applying to the provincial legislatures and the courts. This raises sharply the question of what is the appropriate test to be applied in determining the validity of rules for service out of the jurisdiction. In general terms what appears to be required is a real and substantial connection between the province and the litigation or defendant. It is suggested that the exact nature of relevant test may be critical to the future effectiveness of the rules for service out of the jurisdiction.
In Hunt v. T. & N. plc, the Supreme Court of Canada gave constitutional status to the principles expounded in Morguard. Therefore, the requirement of a “real and substantial connection” has become the absolute constitutional limit on the power of each province to confer judicial jurisdiction on its courts… The requirement of a real and substantial connection places a limit on the provincial rules ofprocedure since the provincial power to legislate with respect to service in juris or ex juris requires some serious contacts with the province.
 Cunningham J. held in MacDonald v. Lasnier 1994 CanLII 7340 (ON S.C.), (1994), 21 O.R. (3d) 177 (Gen. Div.) that although the plaintiff’s claim clearly fit within rule 17.02(h), the Supreme Court’s decision in Morguard requires a “real and substantial connection”. The decision stated that there was not a sufficient link between pain and suffering endured in Ontario and the actions of the defendants in Quebec. The lack of a real and substantial connection appears to amount to an assertion that the interpretation of “damage” in Vile such that it includes pain and suffering in Ontario has “dramatically opened the door to lawsuits in Ontario dealing with tortious conduct in a foreign jurisdiction” (p. 181). Morguard has placed limits on such actions in requiring a real and substantial connection, and pain and suffering in Ontario does not meet this test. In the end, the court stayed the action for lack of jurisdiction.
 Binks J. in Long v. Citi Club,  O.J. No. 1411 (Gen. Div.) simply cites a list of cases that have required a real and substantial connection and states that the plaintiff “must do more than allege that he has suffered damage in the forum province”. The judge asserts that the real and substantial connection must be between “Ontario and the defendant, such that it makes it reasonable to infer that the defendant has voluntarily submitted himself or herself to the risk of litigation in the courts of the forum province”. Given the interpretations of the real and substantial connection test in Morguard and the secondary authorities noted below, it is clear that a real and substantial connection between the forum province and the subject matter of the litigation, not necessarily the defendant, is sufficient to meet the test.
 Jean-Jacques v. Jarjoura,  O.J. No. 5174 (Gen. Div.) relies directly on MacDonald. Métivier J. first lists the many connections between the defendant and Quebec, then considers the issue of the plaintiff’s pain and suffering in Ontario. Without further explanation, the court states: “Applying the ‘real and substantial connection’ test to the facts herein and considering all factors, I find no such real and substantial connection exists between this action and the province of Ontario.” This decision is not helpful in determining how the court applied the real and substantial connection test. The list of the defendant’s connections with Quebec makes the test look like a balance of the connections with Quebec and the connections with Ontario, a process more suitable to the consideration of most convenient forum.
 Swinton J. in Leufkens v. Alba Tours International Inc. 2001 CanLII 28038 (ON S.C.), (2001), 53 O.R. (3d) 112,  O.J. No. 644 (S.C.J.) held that Morguard has changed the law and that cases relying on rule 17.02(h) before the Morguard decision are no longer to be followed. Swinton J. refers to Morguard, Moran, Hunt and Tolofson in reasoning that there is a distinction between jurisdiction and the doctrine of forum non conveniens, and that jurisdiction is to be determined by assessing whether there is a real and substantial connection between the forum and the subject matter of the litigation (para. 15). At para. 29, she follows the cases that hold that the mere fact that the plaintiff continues to suffer damages in Ontario after sustaining an injury as a result of a tort committed outside the jurisdiction does not create a real and substantial connection between Ontario and the action.
 Aitken J. states that where damage is sustained in Ontario, rule 17.02 authorizes service ex juris. However, if it is shown that the real and substantial connection test has not been met, then Ontario should “decline” jurisdiction. If the real and substantial test is met, Ontario would also “decline” jurisdiction if Ontario was not the more convenient forum.
 Aitken J.’s interpretation of the real and substantial connection test is not helpful to an Ontario plaintiff. The plaintiff would go to the expense of serving a claim on a foreign defendant plus the cost of a motion to set aside the service ex juris only to find that the Ontario court decided to “decline” jurisdiction.
There is no question in my mind that, in this case, however the term “real and substantial connection” may be defined, Manitoba has no real and substantial connection with the subject matter of the lawsuits commenced in Manitoba. The liability issue has absolutely no connection with Manitoba. The only connection between the plaintiffs and Manitoba is that the plaintiffs live in Manitoba and that the two injured plaintiffs have endured pain and suffering here and have received, and continue to receive, medical treatment in Manitoba. Apart from these two factors, the real and substantial connection with the subject matter of the lawsuits is with the Province of Ontario. It is there the accident occurred, the defendants live there, and the alleged wrong is governed by the law of Ontario.
The second ground under s. 62.02(4)(a) [the Rules of Civil Procedure state on what grounds leave to appeal may be granted] relied on by Huggins and Bernard is that McKinnon J. decided Ontario had a real and substantial connection to the subject matter of the action based only on the fact that the plaintiffs are resident in Ontario and continue to suffer damages in Ontario, and there are cases both in Ontario and elsewhere in Canada which state that these factors are insufficient to establish jurisdiction in the forum. The cases ofMacDonald v. Lasnier, supra; Long v. City Club, supra; Jean-Jacques v. Jarjoura, supra, and Negrych v. Campbell’s Cabins (1987) Ltd., supra, to which I was referred by counsel for Huggins and Bernard, taken at their highest, stand for the proposition that the mere presence of a plaintiff in a forum and the fact that the plaintiff is allegedly continuing to suffer pain and suffering in that forum or is continuing to receive medical treatment in that forum for an injury sustained elsewhere is insufficient to create a real and substantial connection to that forum justifying the assumption of jurisdiction in an action relating to the injury.
 Frymer v. Brettschneider 1994 CanLII 1685 (ON C.A.), (1994), 19 O.R. (3d) 60, 28 C.P.C. (3d) 84 (C.A.), is a decision that focuses on the issue of convenient forum. However, at p. 65 in the decision of Weiler J.A. (dissenting in part), there is a mention of Rule 17 where it is stated that “[t]he subjects listed in rule 17.02 have a connection with Ontario, i.e., real property in Ontario, residence and personal property in Ontario, a contract made or breached in Ontario, or damage sustained in Ontario.” Arbour J.A. (McKinlay J.A. concurring) did not refer to or disagree with Weiler J.A.’s comments regarding rule 17.02.
hatever approach is used, the assumption of and the discretion not to exercise jurisdiction must ultimately be guided by the requirements of order and fairness, not a mechanical counting of contacts or connections” (p. 326 S.C.R.).
The concept of fairness in determining jurisdiction should be considered from the point of view of both the respondent [plaintiff], as well as the appellants [defendants].
It has been held that the tests to apply in determining jurisdiction simpliciter and forum non conveniens are different (Ell v. Con-Pro Industries Ltd.,  B.C.J. No. 513 (QL) (C.A.)); though it has also been held certain factors are properly considered under both headings (Oakley v. Barry 1998 CanLII 3409 (NS C.A.), (1998), 166 N.S.R. (2d) 282, 158 D.L.R. (4th) 679,  N.S.J. No. 122 (QL) (C.A.)). Certainly the language used by La Forest J. in Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (S.C.C.),  3 S.C.R. 1077, 76 D.L.R. (4th) 256 regarding “real and substantial connection” is very similar to the language used by Arbour J.A. inFrymer v. Brettschneider 1994 CanLII 1685 (ON C.A.), (1994), 19 O.R. (3d) 60 at p. 79, 115 D.L.R. (4th) 744 (C.A.), where she states that the choice of forum is designed to ensure that the action is tried in the jurisdiction that has the closest connection with the action and the parties.
I agree with Professor Blom, in his reference to the “open-endedness of the Morguard formula” (at p. 393) and his comment that in trying to determine the meaning of order and fairness, in a jurisdiction simpliciter case, it may be necessary to take into account factors normally considered in a forum non conveniens case “in order to avoid injustice” (p. 387).
The concept of fairness in determining jurisdiction should be considered from the point of view of both the respondent, as well as the applicants. While this issue, as well as the issue of juridical advantage, are matters that are usually considered on a forum non conveniens issue, it is appropriate and relevant to consider them in this case involving jurisdiction simpliciter.
 The plaintiffs propose calling witnesses who lived in the same apartment building as Mr. Duncan and who also experienced gas leaks. The O’Brians lived in the same apartment building and were exposed to a gas leak in 1997. The O’Brians live in Washington State.
 It would appear that the bulk of the evidence would come from witnesses who reside outside of China.
 If damage sustained in Ontario is no longer sufficient to confer jurisdiction on Ontario courts, I suggest that many individual Ontario plaintiffs will find it prohibitive to commence and continue litigation in a foreign jurisdiction. I suggest that if that is the case justice will not be served.

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