Injured abroad? Supreme Court of Canada draws the line on jurisdictional overreach

In its recent decision in Sinclair v. Venezia Turismo, the Supreme Court of Canada addressed a key issue in the law of jurisdiction for cross-border tort claims.

The Supreme Court of Canada set a firm boundary on when Canadian courts can claim jurisdiction in international disputes where there is a contract connected to the dispute that was formed in Canada: the Canadian contract’s mere existence will not ground jurisdiction if the contract’s connection to the dispute is weak. Rather, the contract has to be sufficiently material to the claim to form a real and substantial connection to the forum in which the claim is brought.

Background

Mr. and Mrs. Sinclair were seriously injured while taking a water taxi in Venice. Prior to the accident and while already in Italy, the Sinclairs called the concierge service associated with their credit card and Amex Cardmember Agreement to book a water taxi from the airport to their hotel. The Amex Canada agent contacted another third-party travel service provider, which secured an estimate for the water taxi and booked the water taxi on the Sinclairs’ behalf.

The Sinclairs brought a lawsuit in Ontario related to their injuries against the Italian water taxi operator, Amex Canada, the third-party travel service provider and others.

The water taxi operator and other Italian defendants had no business presence in Canada, no advertising or agents targeting Canadians and no contract with the Sinclairs or Amex Canada. The Italian defendants brought a motion to strike (i.e. summarily dismiss) the claim against them, arguing that the Ontario courts had no jurisdiction over them.

The motion judge found that the Ontario courts could assume jurisdiction on the basis that the dispute has a connection with the Amex Cardmember agreement formed in Canada, among other things. The Court of Appeal found that there was no jurisdiction, and the case made its way to the Supreme Court of Canada for final determination.

Global access ≠ local jurisdiction

The Supreme Court applied a legal test called the Van Breda Framework to determine if the Ontario courts could assume jurisdiction over the dispute vis-à-vis the Italian defendants. The Van Breda Framework sets out that the Court must first determine if it has jurisdiction simpliciter, which can be established in one of three situations:

1. If any of the defendants are present in the province
2. If the defendants consent to the jurisdiction of that province’s Court
3. If there is “a real and substantial connection” to the province

The Real and Substantial Test aims to prevent jurisdictional overreach by ensuring that a Court only assumes jurisdiction over a dispute if the connection between the jurisdiction, the defendant and the subject matter are sufficiently strong. Where a “presumptive connecting factor” is present, the Court will presume that there is a real and substantial connection. Though the list of presumptive connecting factors is not closed, the following four factors are usually cited as the main four presumptive connecting factors:

1. The defendant lives or resides in the province
2. The defendant carries on business in the province
3. The tort was committed in the province
4. A contract connected with the dispute was made in the province

Even if one of these factors is present, a defendant can still rebut the presumption by proving that it would not be reasonable to expect that the defendant would be called to answer proceedings in that jurisdiction. Courts must consider the strength of the connection between the underlying contract and the forum in which jurisdiction has been presumptively assumed. Relevant considerations in the analysis of the strength of the connection include, but are not limited to:

• Whether the contract was formed in a jurisdiction for mere technical reasons and its subject matter and terms pertain entirely to another jurisdiction
• Whether or not the dispute flows directly from the obligations set out in the contract
• Whether the contract is only connected to the dispute through a chain of contracts formed in other jurisdictions
• Whether the contract does not govern the defendant resisting the court’s jurisdiction
• Whether the contract needs to be interpreted to decide the dispute (i.e. if the contract bears on whether or why the defendant’s conduct was tortious)

If the connection is weak, the presumption of the connection will be rebutted, and the Court will not assume jurisdiction over the dispute as it relates to the defendant(s) resisting the Court’s jurisdiction.

In this case, the only presumptive factor that could have been triggered was whether a contract connected with the dispute was made in the province. The Court analyzed three purported contracts that the Sinclairs pointed to as being part of the “constellation of contracts,” and found that two of the purported contracts were not contracts at all:

1. The transaction between the Sinclairs and the Amex agent to book the water taxi did not amount to its own contract
2. There was no contract made between Amex Canada and the third-party travel service provider that booked the water taxi. Further, although it was possible that there was a contract between the Sinclairs and the third-party travel service provider, there were no allegations made in the pleadings to support that conclusion

The Court accepted that the Sinclairs’ use of the concierge service in Italy “flowed” from their Ontario Cardmember Agreement, enough to trigger the jurisdiction presumption. The Cardmember Agreement was therefore sufficient to ground the assumption of jurisdiction at the first stage of the Van Breda Framework.

The Court then turned to the second stage of the test as it relates to the Cardmember Agreement only. It held that, although the Cardmember Agreement was an Ontario contract, its link to the Italian water taxi accident was far too weak to ground jurisdiction. The reservation and accident arose entirely in Italy, involving Italian companies with no connection to Amex Canada or to Ontario, and there was no evidence that the Sinclairs’ Amex credit card was used to pay for the water taxi.

The Court commented that it would be unworkable, unfair and unpredictable if making a reservation through the concierge service were enough to ground jurisdiction in Ontario over all defendants to a dispute, writing:

“Service providers in tourist industries spanning the globe would have no way of knowing if and when they could be hauled before an Ontario court simply because, unbeknownst to them, one of their clients had arranged for their services using an Ontario credit card.”

Accordingly, the Supreme Court ruled that Ontario lacks jurisdiction over this matter as against the Italian defendants. The claim will now proceed against the other defendants.

Key takeaways

Sinclair provides clarity to litigants and their counsel when determining in which jurisdiction to bring a claim in tort. The case emphases that “care must be taken not to lose sight of the forest for the trees,” and that the mere existence of a domestic contract tangentially related to the dispute cannot ground jurisdiction if the contract does not have a real and substantial connection to the dispute and the defendant(s) resisting the Court’s jurisdiction.

Key takeaways from the case include:

1. Global access ≠ Local jurisdiction – The Court ruled that the “[…] mere fact that a Canadian plaintiff can access a foreign service through a global platform does not establish a real and substantial connection.”
2. Jurisdiction must be assessed defendant-by-defendant – In this case, some of the defendants consented to the jurisdiction of the Canadian courts while the Italian defendants resisted. The Supreme Court held that courts must evaluate jurisdiction separately for each defendant, given that the Court could make orders against each defendant individually.
3. Contractual connections must be specific and individually assessed – The Court emphasized that, if a party relies on several contracts to establish jurisdiction, each contract must be assessed individually to determine whether it supports a connection to the forum. A vague or loosely defined “constellation of contracts” is insufficient, meaning that multiple weak links do not add up to a strong one. Plaintiffs must plead in their claims the formation and terms of any contract relied upon (i.e. offer, acceptance, consideration and where it was formed).

If you are questioning in which province you should bring a claim, or whether a claim against you should not have been brought in the province it was brought in, please reach out to Jennifer Sokal, Mouchir Ayoub, or contact another member of MLT Aikins’ litigation team.

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