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The On-Going Saga of Canadas Conflict of Law Revolution Theory and Practice
Prof. William Tetley, Q.C.* I. II III IV Introduction The Major Changes of the Canadian Conflict of Law The Purpose of this Paper Choice of Law 1) Contract -- Choice of law 2) Tort -- Choice of law 3) Taxation Choice of law 4) Family Law Choice of law 5) Procedure/Formalities Choice of law 6) Forum Court Statutes Choice of law Choice of Jurisdiction 1) Contract Choice of Jurisdiction 2) Tort Choice of Jurisdiction 3) Libel 4) Secured Transactions 5) Property Law 6) Choice of Jurisdiction Clause 7) Family Law Equity 8) Intellectual Property 9) Anti-suit Injunctions Recognition of Foreign Judgments in personam and in rem 1) Contract - Recognition 2) Tort 3) Property 4) Family Law 5) Personal Rights Constitutional Law Recent Legislation Conclusion

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VII VIII IX
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Professor of Law, McGill University; Distinguished Visiting Professor of Maritime and Commercial Law, Tulane University; counsel to Langlois Gaudreau OConnor of Montreal. The author acknowledges with thanks the assistance of Alireza Falsafi, LL.B., a student in the LL.M. program at the Faculty of Law of McGill University, and of Robert C. Wilkins, B.A., B.C.L., in the preparation and correction of this article.

The On-Going Saga of Canadas Conflict of Law Revolution Theory and Practice
Prof. William Tetley, Q.C.*

I. Introduction
Throughout the past decade, major changes, initiated by Canadian courts, have swept away traditional approaches to conflict of laws. Three years ago the author described those changes in Current Developments in Canadian Private International Law,1 summarizing the decisions, which directly redefined Canadian private international law. The four most significant Canadian Supreme Court decisions which changed Canadian conflicts thinking were Tolofson v. Jensen,2 Morguard Investments, Ltd. v. DeSavoye,3 Amchem Products Inc. v. British Columbia (Workers Compensation Board)4 and Hunt v. T & N Plc.5 What has happened since then is outlined in the present article in what may be described as the ongoing saga of Canadas conflict of law revolution.

II.

The Major Changes of the Canadian Conflict Revolution

The major recent changes in Canadian private international law are the following: 1) Lex loci delicti In tort conflict cases, the long-standing English common law rule, the lex fori (actionable and not justifiable) rule, was replaced by the lex loci delicti rule by the Supreme Court of Canada in Tolofson.6 Along with this rule, two exceptions were announced: the real and substantial connection test where the lex loci delicti would work an injustice and the parties agreement for the application of the lex fori. A third

Professor of Law, McGill University; Distinguished Visiting Professor of Maritime and Commercial Law, Tulane University; counsel to Langlois Gaudreau OConnor of Montreal. The author acknowledges with thanks the assistance of Alireza Falsafi, LL.B., a student in the LL.M. program at the Faculty of Law of McGill University, and of Robert C. Wilkins, B.A., B.C.L., in the preparation and correction of this article. 1 W. Tetley, Current Developments in Canadian Private International Law (1999) 78 Can. Bar Rev. 152199. 2 [1994] 3 S.C.R. 1022 [hereafter Tolofson]. 3 [1990] 3 S.C.R. 1077 [hereafter Morguard]. 4 [1993] 1 S.C.R. 897 [hereafter Amchem]. 5 [1993] 4 S.C.R. 289 [hereafter Hunt]. 6 Tolofson supra note 2.

3 exception also emerged, which is the common home state exception, although it is not applicable in interprovincial matters.7 2) Substance/procedure rejected Tolofson also adopted the civilian notion that substantive law includes time limitations, defying the traditional common law substance/procedure dichotomy.8 3) Recognition: full faith and credit - a real and substantial connection The Supreme Court of Canada introduced the principle of full faith and credit in Morguard, demanding interprovincial recognition of judgments. Interprovincial comity was later given constitutional status by the Supreme Court in Hunt. 4) Recognition: a real and substantial connection In Morguard, the Supreme Court also stated that a real and substantial connection between the action or the parties, and the court hearing the dispute, was a precondition to the recognition and enforcement of foreign judgments in Canada. 5) Forum non conveniens Following Amchem and Morguard, the forum non conveniens doctrine has been applied when deciding the more appropriate jurisdiction. It includes the application of the real and substantial connection test, which depends on contacts and connecting factors. 6) Book X of the Qubec Civil Code, 1994 The adoption of Book Ten of the Qubec Civil Code 19949 (C.C.Q.) completely changed Qubec private international law rules. The lex loci delicti rule, a civilian private international law principle, found in art. 3126 C.C.Q., similarly corresponds to the recently adopted Canadian rule and its exceptions, as stated above. The closest and most real connection test was adopted in art. 3082, also allowing for equitable consideration by the courts. The C.C.Q. provides a comprehensive body of rules, covering all spheres of conflict of laws problems: choice of law, choice of jurisdiction, and recognition of foreign judgments.
In Tolofson, the Supreme Court of Canada rejected the common home state of the parties rule within a single country but allowed the rule in an international context where the parties are from the same country and the tort occurs in a different country (ibid. at 1060); see also Hanlan v. Sernesky, (1998) 38 O.R (3d) 479; (1998) 108 O.A.C 261 (Ont. C.A.) [hereafter Hanlan] where because the plaintiff and defendant both resided in Ontario, Ontario law was applied to their motorcycle accident in Minnesota. Note that Hanlan is an international case. The Hanlan rule does not apply in interprovincial cases, as seen in Leonard v. Houle (1997) 154 D.L.R. (4th) 640; 105 O.A.C 129 (Ont. Ct. App.) where the lex loci delicti principle was applied to an automobile accident in Qubec, despite the common residence of the parties in Ontario. Further, note that in Hanlan the Ontario Court of Appeal had earlier allowed the appeal for leave to amend the statement of defence to plead lex loci delicti as the applicable law; see (1996) 95 O.A.C 297, 3 C.P.C. (4th) 201 (Ont. C.A.). The common home state of the parties rule has also found expression in the Civil Code of Qubec (C.C.Q.), article 3126, second para., which, according to LaForest J. in Tolofson, should be restricted to international cases and not be applied to interprovincial conflicts of law. 8 Tolofson, supra note 2 at 1069-1071. See also art. 3131 C.C.Q. 9 S.Q. 1991, c. 64, in force January 1, 1994.
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7) Canadian Constitutional Law vs. Conflict of Law Decisions such as Hunt10 illustrate the importance of properly characterizing a problem, either as one concerning Canadian constitutional law or conflict of laws, and if the problem is constitutional in nature, conflict of laws rules are not applicable. 8) Recent Legislation on Conflict/Constitutional Law Maritime law in Canada has also undergone substantial change in the recent years in order to solve constitutional/conflict of laws problems. Thus, pursuant to the Supreme Court decisions in Ordon Estate v. Grail11 and Bow Valley Husky (Bermuda) v. Saint John Shipbuilding Ltd.12, the Parliament of Canada enacted the Marine Liability Act13 which reaffirmed Canadian maritime law as an independent body of law, to be applied uniformly throughout Canada. Also reaffirmed is Parliaments exclusive jurisdiction over maritime tort law respecting personal injury or wrongful death claims, replacing Part XIV of the Canada Shipping Act.14 Consistent with Bow Valley,15 Parliament established a uniform regime of apportionment of liability applicable to all maritime tort claims. 9) Emphasis on Equity in Family Law Although conflict of law rules apply in family law matters, the courts may use some discretion in order to achieve an equitable solution. When children are involved in the proceedings, the best interest of the child doctrine is often the paramount consideration.16

III.

The Purpose of this Paper

The purpose of this paper is: 1) to summarize how the courts have reacted to changes in Canadian conflict of law brought about by Tolofson, Morguard, Amchem, Hunt and Book X of the Qubec Civil Code; 2) to describe the recent constitutional/conflict of law anomalies; and 3) to outline the new Canadian legislation adopted in answer to the constitutional/conflict dichotomy.

Hunt, supra note 5 at 289. [1998] 3 S.C.R. 437; (1998) 166 D.L.R. (4th) 193 (SCC, per Iacobucci and Major JJ.) [hereafter Ordon cited to S.C.R.]. 12 [1997] 3 S.C.R. 1210; (1997) 153 D.L.R. (4th) 385; 221 N.R. 1 [hereafter Bow Valley cited to S.C.R.]. 13 2001, c.6 (Royal Assent: May 10, 2001 and in force August 8, 2001). 14 R.S.C. 1985, c. S-9. 15 Bow Valley, supra note 12. 16 Wray v. Wray [1998] 56 Alta. L. R. (3rd) 148 (Alta. Q. B.); Brooks v. Brooks (1998) 41 O.R. (3rd) 191 (Ont. C.A.); Johnson v. Lennert (1998) 167 Nfld. & P.E.I.R. 167, 513 A.P.R. 167 (Nfld. C.A.); Gunsay v. Gunsay (1999) 175 D.L.R. (4th) 678 (B.C. C.A.); Wilson v. Perry [2000] 184 Nfld. & P.E.I.R. 1, 559 A.P.R. 1 (Nfld. C.A.).
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IV.

Choice of Law

The replacement of the lex fori (law of the forum) rule with the lex loci delicti rule (with an exception for the closest and most real connection)17 drastically changed the Canadian approach to the choice of law in tort conflict cases. In contract cases, the primary rule is that party autonomy determines the applicable law.18 The closest and most real connection test constitutes the second rule, which is applied to determine the proper law of the contract in the absence of the choice of law (express or implied) by the parties.19 1) Contract choice of law a) Rate of Interest in Contract choice of law Viktor Overseas v. Deiulemar Compagnia Di Navigazione20 Viktor Overseas (Viktor) contracted to repair Deiulemar Compagnia Di Navigaziones (Deiulemar) ship, the Filomena Lembo. The contract was concluded in Croatia, but a choice of jurisdiction clause held that English law would apply. After Deiulemar failed to pay for the repairs, Viktor arrested the Filomena Lembo in Newfoundland, Canada. The contract stipulated that Viktor had a right to detain the ship until Viktor was paid the balance due and a monthly interest fee equal to 6% of this balance. Section 347 of the Canadian Criminal Code21 defined interest exceeding 60% per annum as a criminal rate of interest. Deiulemar argued that because of this section, and because sect. 4 of Canadas Interest Act22 required that all interest exceeding 5% per annum be calculated using a yearly rate, the high interest rate of the contract was unenforceable. The Federal Court of Canada, Trial Division, held that English, and not Canadian, law applied to the contract because: 1) the alleged crime took place in Croatia; 2) the

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Tolofson, supra note 2. Party autonomy in choosing the applicable law may manifest itself in either express or implied choice. However, inferring the implied choice of the parties is a matter of circumspection and requires certainty to the extent that in many cases it, in fact, results in the application of the second rule, the closest and most real connection test. For an example where certainty is required for inferring the implied choice of the parties, see Qubec Civil Code, art. 3111. 19 Canada v. Nalleweg (1999) 223 A.R. 89; 165 D.L.R. (4th) 606 (Alta. C.A) [hereafter Nalleweg]; Eastern Power Limited v. Azienda Communale Energia & Ambiente (1999) 125 O.A.C. 54; (2000) 178 D.L.R. (4th) 409 (Ont. C. A.). 20 (1998) 143 F.T.R. 298; (1997) 138 F.T.R. 316. 21 R.S.C. 1985, c. C-46. 22 R.S.C. 1985, c. I-15.

6 governing law of the contract was English law; and 3) the rate of interest was governed by the law of the contract.23 b) Student Loan in B.C. suit in Alberta and delay for suit choice of law Canada (A.G.) v. Nalleweg24 Nalleweg, a student residing and attending university in British Columbia, contracted a student loan with a B.C. bank guaranteed by the Government of Canada. After Nalleweg defaulted on his loan, the federal government commenced action in Alberta, where Nalleweg had moved. At issue was whether the B.C. or Alberta time limitation applied. In B.C. the Government's claim had elapsed, while in Alberta it had not. The Alberta Court of Queen's Bench held Alberta law applicable. The students appeal was allowed. The Alberta Court of Appeal held that British Columbia law applied because it was most closely connected to the contract. The relevant contacts were the lex loci contractus, the place of performance, the residence or place of business of the parties, and the subject matter of the contract. The Government of Canada's claim that the law of Canada should apply was rejected, in particular because there was no appropriate Canadian law on time limitations. c) Contract and time bar choice of law Sidmar N.V. v. Fednav International Ltd.25 Sidmar N.V. brought three related actions against Fednav International Ltd. (Fednav), a carrier, for damage to cargo transported by sea from Belgium to the United States. The bill of lading contained a jurisdiction clause, calling for all suits to be taken in a court of Canada, not more than one year following delivery. The plaintiff was granted an extension of time for suit by the defendant, Fednav, but for suit to be taken in the United States. The Federal Court of Appeal held that the cargo claims, instituted within the extended time granted by the defendant, were valid and not time-barred in Canada. The Court reasoned that the suit time extension agreements were part of the contract of carriage, and hence subject to the mandatory provisions26 of the Hague-Visby Rules27 under Canadian law. In consequence, a U.S. jurisdiction clause stipulated as a
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In reaching this third point Nadon J. of the Federal Court of Canada cited W. Tetley, International Conflict of Laws: Common, Civil and Maritime, (Montreal: Les ditions Yvon Blais Inc., 1994) 756-757 [hereafter Intl. Conflict of Laws]. 24 Nalleweg, supra note 19. 25 (1997) 211 N.R. 143 (Fed. C.A., per Marceau J.A.). 26 Mandatory rules are compulsory rules of law found in applicable international conventions or national statutes, which cannot be contracted out of. See Intl Conflict of Laws, supra note 23 at 101. 27 The term Hague/Visby Rules refers to the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, adopted at Brussels, August 25, 1924, and in force June 2, 1931 (commonly known as the Hague Rules), as amended by the Protocol adopted at Brussels, February 23, 1968, and in force June 23, 1977 (commonly known as the Visby Protocol 1968) and by the Protocol

7 condition in the agreement was held to be null and void under the Hague/Visby Rules, because (1) it had the indirect effect of reducing the carriers liability (U.S. COGSA28 providing for a lower limit); (2) the Rules expressly provide authority to extend the time for suit; and (3) the Rules only provide that the carrier may surrender rights but not increase them. It was also noted that the jurisdiction clause was not a condition so fundamental to the agreement for the latter to be struck down. The Supreme Court of Canada implicitly agreed with the Federal Court of Appeal and dismissed Fednavs application for leave to appeal.29 2) Tort Choice of Law Ferguson v. Arctic Transportation Ltd.30 A Panama Canal Commission pilot took suit against a Canadian ship and its owners for negligence in Panama, in not securing a line on the vessel thus injuring him. The action was dismissed because, inter alia, it was time barred under Panamanian Law. Reed J. of the Federal Court of Canada, Trial Division, in deciding the proper law of the time bar, looked at the law of the tort,31 the place of the damage or the place having the most substantial connection with the claim, all of which led to Panamanian law.32 Citing Tolofson,33 limitation periods were held to be part of substantive law. Section 275 of the Canada Shipping Act,.34 which provides for the prescription of the law of the port of registration (which in the case in hand was Canada), was held to apply only to matters related to hiring and firing of seamen, payment of their wages, apprenticeship indentures and working conditions. It did not apply to "an action by a foreign pilot with respect to a tort claim that arose out of events occurring in a foreign jurisdiction".35

adopted at Brussels, December 21, 1979 and in force February 14, 1984 (commonly known as the Visby S.D.R. Protocol). For the text of these three instruments, see Tetley, Marine Cargo Claims, 3rd Ed., (Montreal: Les ditions Yvon Blais Inc., 1988), Appendix A at 1121, 1132 and 1139 respectively [hereafter Marine Cargo Claims, 3rd Ed., 1988]. 28 The term U.S. COGSA is an acronym referring to the Carriage of Goods by Sea Act of the United States, Act of April 16, 1936, ch. 229, 49 Stat. 1207-1213, 46 U.S.C. Appx. 1300-1315. For the text, see Marine Cargo Claims, 3rd ed., 1988, Appendix B at 1199. 29 [1997] S.C.C.A. No. 227 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons) September 18, 1997). 30 (1998) 147 F.T.R. 96 (Can. F.C., per Reed J.) [hereafter Ferguson]. 31 In discussing the applicable choice of law, reference was made to Intl. Conflict of Laws, supra note 23 at 427-438. 32 Intl. Conflict of Laws, ibid. at 427-438, was cited in reaching this ruling. 33 Tolofson, supra note 2. 34 R.S.C. 1985, c. S-9. 35 Ferguson, supra note 30 at 108.

8 3) Taxation Choice of Law Backman v. Canada 36 Backman and his co-appellants, all Albertans, invested in a Dallas, Texas apartment building complex on which a U.S. partnership had incurred potential losses. The appellants became assignees of the interests of the original American partners and then disposed of the complex to those same partners, thus acquiring and realizing accounting losses which they claimed as deductions on their Canadian income tax returns. The deductions were disallowed and the appellants were reassessed. In appeal, the Tax Court of Canada held that the relationship in question was not a partnership, because the appellants did not carry on a business for profit. The Federal Court of Appeal noted that whether the appellants were entitled to claim proportionate shares of partnership losses depended on whether they were in fact partners in a partnership.37 The Court observed that both the Texas Uniform Partnership Act,38 and the Alberta Partnership Act39 defined a partnership as a relationship in which business was undertaken and profit was sought. The term partnership was not defined in the Income Tax Act.40 On this point, Rothstein, J.A. held that, [t]here is no question in my mind that the appellant and the other Canadians entered into the[Dallas apartment complex] series of transactions to acquire a potential tax loss. This was their sole purpose.41 As such, the appellants could not be considered as partners in a partnership if they were not intending to carry on business for profit. Thus, once the American investors withdrew from the venture, the partnership ended. The Court considered that the law of Texas was the proper law, given that the limited partnership was registered there.42 Expert witnesses on Texas law testified to the fact that when the Canadians replaced the American investors, the partnership remained valid.43 The Court, however, was not persuaded on this point and held that there was no proof of Texas law on the issue. In consequence, the Court held that the lex fori should be applied.44 Backman appealed to the Supreme Court of Canada, but the appeal was dismissed with costs. The court expressed the view that where a taxpayer seeks to deduct Canadian partnership losses through sect. 96 of the Income Tax Act,45 the taxpayer must satisfy the definition of partnership that exists under the relevant provincial or territorial law.46 The
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(2000) 178 D.L.R. (4th) 126 (Fed. C. A., per Rothstein J.A.) [hereafter Backman]. Ibid. at 129. 38 Texas Revised Civil Statutes, art. 6132B(6). 39 R.S.A. 1980, c. P-2. 40 R.S.C 1985, c.1 (5th Supp.). 41 Backman, supra note 36 at 136. 42 Ibid. at 140. 43 Ibid. at 139. 44 Ibid. at 144 and note 17. 45 S.C. 1970-71-72, c. 63, as amended. 46 [2001] 1 S.C.R. 367 at 377, para. 17.

9 Supreme Court, agreeing with the Federal Court of Appeal, added that although each province has legislated a definition of partnership, the concept of partnership throughout the common law provinces of Canada comprises the same three essential elements: 1) a business 2) carried on in common 3) with a view to profit.47 4) Family Law Unjust enrichment choice of law Christopher v Zimmerman 48 Mr. Zimmerman and Ms. Christopher lived together for ten years, namely in Hawaii from 1988 to 1993, in three other U.S. states from 1993 to 1997, and in British Columbia from 1997 to 1998. In October of 1998 the couple separated, and Ms. Christopher subsequently sought an order from a B.C. Supreme Court judge in Chambers to declare a portion of Zimmermans moveable assets as hers in constructive trust on the basis of the law of unjust enrichment. The trial judge treated their unmarried relationship as analogous to marriage, and their dispute as one involving marital property. He also held that the laws of Hawaii, which would be more favourable to Zimmerman, should apply because [c]laims to moveable property are to be governed by the lex domicilii or the law of the matrimonial domicile absent some express or implied agreement to the contrary.49 On appeal it was held that equity should apply and not marital law, since the claim concerned unjust enrichment, and because Mr. Zimmerman and Ms. Christopher were not married. Citing doctrine,50 the B.C. Court of Appeal held that, with the exception of cases involving land or contract, unjust enrichment is governed by the law of the place where the enrichment occurs. The Court of Appeal, holding that there were insufficient facts to determine the proper law of the enrichment, then ordered a new trial. 5) Procedure / Formalities Formalities of the forum court (including conduct of the trial) can be referred to as those formalities that are of the forum only and are administrative, e.g. the method of drawing up and serving the writ, when, where and how the court sits, how the trial is

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Ibid. at 378, para. 18; see also Continental Bank Leasing Corp. v. Canada [1998] 2 S.C.R. 298 at 317, para. 22. 48 (2000) 80 B.C.L.R. (3d) 229; 192 D.L.R. (4th) 476 (B.C. C.A.) [cited to B.C.L.R. (3d)]. 49 Ibid. at 230. 50 Dicey and Morris on the Conflict of Laws, 12th ed. (L. Collins, ed.) (London: Sweet and Maxwell Limited, 1993) at 1471; J.-G Castel, Canadian Conflict of Laws, 4th ed. (Toronto: Butterworths, 1997) at 637-638.

10 conducted, who questions the witnesses, whether there is trial by jury, how foreign law is proven, etc. 51

Formalities of forum court choice of law service by fax S.A. Louis Dreyfus & Cie v. Holding Tusculum B.V.52 Holding Tusculum B.V. (Tusculum) and S.A. Louis Dreyfus (Dreyfus) were Dutch and French investment companies respectively, which together, owned the total shares of a third company. Following disagreement, the two parties submitted to arbitration in Qubec, which ordered Dreyfus to buy out Tusculums shares. The third company declared bankruptcy before the order was complied with, and it was decided through arbitration that in light of the new events, the order was inappropriate. Tusculum brought a motion to quash this decision and served Dreyfus by fax with the courts authorization. Dreyfus appealed, alleging invalid service under international law, even if service by fax was authorized in Qubec. The Qubec Court of Appeal held that the service was valid under Qubec and international law. The wide discretion permitted under art. 138 C.C.P.53 was relied upon, because the limitation period was about to expire. Under international law, the court found that pursuant to the Entente between France and Qubec54 permitting service by mail, technological progress such as service by fax must be incorporated. The Supreme Court of Canada dismissed Dreyfus application for leave to appeal,55 thus impliedly upholding the decision of the Qubec Court of Appeal. 6) Obligatory Forum Court Statutes- Choice of Law Obligatory forum court statutes, being a term which I have coined for want of something better, refers to mandatory national statutes (or international conventions) which oblige a particular court, whenever hearing any case on the subject referred to in that statute, to apply that statute.56
Intl. Conflict of Laws, supra note 23 at 48; see also ibid., at 52, 65 and 66. [1998] R.J.Q. 1722. (Qu. C.A., per Lebel J.). 53 The Code of Civil Procedure of Qubec, R.S.Q., c. C-25, originally enacted as S.Q. 1965, 1st Sess., c. 80. 54 Loi assurant lApplication de lentente entre le Qubec et la France sur lentraide judiciaire en matire civile et administrative, L.R.Q., c. A-20.1 (An Act to Secure the Carrying Out of the Entente between France and Qubec respecting Mutual Aid in Judicial Matters, R.S.Q, c. A-20.1). Also considered: Dcret concernant la Convention relative la signification et la notification ltranger des actes judiciaires et extrajudiciaires en matire civile ou commerciale, Dcret 491-88 du 30/3/88, (1988) 120 G.O. II 2306. (Decree concerning the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters). 55 [1998] S.C.C.A. No. 429 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons) March 18, 1999). 56 Intl Conflict of Laws, supra note 23 at 102. The 1976 Limitation Convention, as amended by its 1996 Protocol, incorporated in the Marine Liability Act (S.C. 2001, c. 6), is an example of an obligatory forum
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Obligatory forum court statutes differ from mandatory rules in that, Mandatory rules are compulsory rules of law found in applicable international conventions or national statutes, which cannot be contracted out of.57 whereas forum court statutes are obligatorily applied by the forum court, whenever they come before that court, rather than because of any connecting factor with the forum.58 An example of an obligatory forum court statute can be seen in the following Qubec family law case. Droit de la famille - 278559 The Qubec Court of Appeal directly applied the Qubec Loi sur les aspects civils de l'enlvement international et interprovincial d'enfants,60 implementing the Convention sur les aspects civils de l'enlvement international d'enfants.61 A motion to have a boy returned to his mother in Spain was dismissed, because: (1) the eight-year-old boy lived five years in Montreal and was intgr (settled) in his new environment under art. 20 of the Law (art. 12 of the Convention); and (2) the child did not want to go back to Spain, which, under art. 22 of the Law (art. 13 of the Convention), gave the court discretion to refuse to return the child. In effect, the Convention is an obligatory forum court statute, i.e. a statute that stipulates that once a court has jurisdiction, then the law stipulated in the statute must apply.62

V. Choice of Jurisdiction
In the conflict of laws, a choice of jurisdiction problem arises when the defendant argues the existence of a more appropriate jurisdiction, than the one chosen by the plaintiff. The court can only have jurisdiction if granted by domestic law or international conventions.63

court statute. By the statute, a Canadian court hearing a case on shipowners limitation of liability arising from an event anywhere in the world between ships of any nation (whether they are parties to the Limitation Convention or not) must apply the Canadian version of the Convention. 57 Ibid. at 101. 58 Ibid. at 103. 59 [1998] R.J.Q. 10 (Qu. C.A.). 60 L.R.Q., c. A-23.01 (An Act respecting the Civil Aspects of International and Interprovincial Child Abduction, R.S.Q., c. A-23.01). 61 The Convention on the Civil Aspects of International Child Abduction, adopted at The Hague, October 25, 1980 and in force December 1, 1983, TIAS 11670, 1343 UNTS 89. Canada ratified the Convention on June 2, 1983 and it came into force for Canada on December 1, 1983. See C.T.S. 1983/35. See particularly the preamble and arts. 1, 3, 12, 13 and 18. 62 For further discussion on obligatory forum court statutes, see Intl. Conflict of Laws, supra note 23 at 102-103 and 131-132. 63 See Intl Conflict of Laws, supra note 23 at 794.

12 The doctrine of forum non conveniens has depended on the real and substantial connection test pursuant to Morguard and Amchem.64 It is important to note, however, that the doctrine of forum conveniens is not simply the juridical opposite of forum non conveniens. Forum conveniens refers to the right of a court to extend its authority when no other appropriate jurisdiction exists.65 The following are reasons for Canadian courts to refuse jurisdiction: 1) immunity of foreign states in non-commercial matters; 2) lis alibi pendens; 3) vexatious and frivolous proceedings; 4) valid jurisdiction and arbitration clauses; 5) genuine submission by the parties to another jurisdiction; 6) forum non conveniens; 7) ineffectiveness of court orders.66 1) Contract Choice of Jurisdiction a) Misrepresentation in the formation of the contract jurisdiction Morrison v. Society of Lloyd's67 Two New Brunswick residents, Morrison and Drummie, agreed to become Names at Lloyds. The relevant contracts with Lloyds, and its agents and representatives, were finalized in England and contained English law and exclusive English jurisdiction clauses. Both Morrison and Drummie became liable for underwriting losses, but Morrison refused to honour his financial obligations under the contracts. Instead, he started legal proceedings in the New Brunswick Court of Queen's Bench, arguing that the contract should be declared void because Lloyds had: 1) concealed information regarding the risk of their underwriting, 2) breached the New Brunswick securities legislation. Drummie sued on the same basis, but also claimed damages in tort for fraudulent misrepresentations, which he claimed had been made to him by the defendant in New Brunswick, prior to the conclusion of the agreement, to induce him to contract. He argued that he had the right to sue in tort in the province, as the most convenient forum, without regard to the choice of forum clauses, which first appeared only in the subsequent contracts.

See supra notes 3 and 4. See also ibid., at 799: Forum non conveniens is the principle whereby a court, which has jurisdiction to hear a claim, refuses to do so, because it believes another court of another state also has jurisdiction to hear the claim and can better render justice in the circumstances. See also art. 3135 C.C.Q. 65 See Intl Conflict of Laws, supra note 23 at 803: Forum conveniens is the principle whereby a court, which does not have jurisdiction over a claim, nevertheless accepts jurisdiction, because there is no other appropriate jurisdiction to hear the claim and justice would not otherwise be done. See also art. 3136 C.C.Q. 66 Ibid. at 796. 67 (1999) 208 N.B.R. (2d) 337; 531 A.P.R. 337 (N.B. Q.B.) [cited to N.B.R].

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13 The New Brunswick Court of Queen's Bench held that the choice of forum and the choice of law clauses validly reflected the intention of the contracting parties to adjudicate their disputes in England under English law. New Brunswick securities legislation was held inapplicable in view of the choice of English law clauses to which the plaintiffs had agreed. This legislation consequently provided them with no defence to the enforcement of the Lloyds agreements. The Court also held that no separate action in tort could be taken in New Brunswick for the following reasons: 1) the principle that the law of the place of the tort should apply concerns choice of law and not choice of forum; 2) although the plaintiffs had been solicited in New Brunswick to participate in the Lloyds market before they contracted, any liability in tort for fraudulently inducing the plaintiffs to contract did not arise until the agreements were actually concluded, which occurred in England; 3) there was no evidence that the law and jurisdiction clauses had been fraudulently induced or that the plaintiffs did not understand them.68 The Court also held that no proper distinction could be made between framing the cause of action in tort, as opposed to contract. The plaintiffs had no tort claim until they suffered damages related to the contracts they had concluded, thus bringing the applicable law and jurisdiction clauses into play. The Court accordingly stayed proceedings conditionally, ordering that if the plaintiffs sued in England, Lloyds would not request security for costs, would waive any pre-condition that existing judgments be satisfied prior to suit, and would also waive any provision requiring payment of contractual obligations prior to suit. The New Brunswick Court of Appeal dismissed the appeal and affirmed the lower courts decision.69 The Supreme Court of Canada denied the appellant leave to appeal.70 b) Contract, multiple claims in contract forum non conveniens Torlen Supply & Services Inc. v. ConAgra Ltd.71 ConAgra Ltd. signed a contract in Manitoba with a general contractor to have three "grain facilities" built for its use in Saskatchewan, but terminated the contract before the work was finished. Many contractors and subcontractors, including Torlen Supply & Services (Torlen), were left unpaid. Torlen, and three other subcontractors, brought actions against ConAgra in Manitoba, and the other subcontractors sued ConAgra in Saskatchewan. Several subcontractors also filed builders liens on the affected property in Saskatchewan.

68 69

Ibid. at 353. (2000) 224 N.B.R. (2d) 1, 574 A.P.R. 1 (N.B. C.A.). 70 [2000] S.C.C.A. No. 137 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons) October 5, 2000). 71 (1999) 134 Man. R. (2d) 270 (Man. C.A.).

14 The Manitoba Court of Queens Bench, on a motion by ConAgra, stayed the Manitoba proceedings, pending resolution of the Saskatchewan lien proceedings. The contractors and subcontractors appealed. The Manitoba Court of Appeal dismissed the appeal, declaring that the issue had less to do with forum non conveniens than with determining which of the competing proceedings should take priority. Scott, C.J.M. held that the special builders lien action clearly took precedence. It would be wrong to permit competing civil litigation to continue independently, with the attendant expense and risk of inconsistent verdicts.72 c) Contract insurance - forum non conveniens Canadianoxy Holdings v. Gerling Global Gen. Ins.73 Gerling Global General Insurance Company (Gerling) sold insurance to Canadianoxy Holdings Inc. (Canadianoxy) for several of its North American plants, including a sodium chlorate plant in Louisiana. Canadianoxy made an insurance claim for losses suffered in its Louisiana plant. Gerling commenced an action in Alberta for a declaration that the insurance policy did not cover the loss. Canadianoxy filed a claim against Gerling in Louisiana, seeking damages for breach of contract for failure to provide insurance coverage with respect to the loss. Subsequently, Canadianoxy filed a claim in Alberta, alleging Louisiana as the proper place for determining the issue in dispute. Canadianoxy then applied to have the Gerlings action set aside or stayed on the basis of forum non conveniens. Thus, the issue was whether Alberta or Louisiana was the more appropriate forum. The Alberta Court of Appeal held that the correct test for the determination of forum conveniens depended on whether there clearly was some other forum more convenient and appropriate for the pursuit of the action and for securing the ends of justice.74 The Court of Appeal ruled that the Chambers judge had made no reversible error in concluding that Canadianoxy had failed to clearly establish Louisiana as a more appropriate forum. Moreover, the decision was a discretionary one and therefore the Court of Appeal could not retry the issues. d) Joint venture - forum non conveniens Eastern Power Limited v. Azienda Comunale Energia & Ambiente75 Eastern Power, an Ontario company, and Azienda, an Italian company supplying electricity to the City of Rome, were parties to a failed joint venture in Rome. Negotiations between the parties from 1994 through 1997 failed to produce a final
72 73

Ibid. at 272. (1998) 209 A.R. 68 (Alta. C.A.). 74 Ibid. at 69. 75 (1999) 125 O.A.C. 54; (2000) 178 D.L.R. (4th) 409 (Ont. C.A.) [hereafter Eastern Power cited to D.L.R.]; [1999] S.C.C.A. No. 542 (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons) June 22, 2000).

15 agreement. In February 1997, Azienda terminated the relationship and in December Eastern Power took suit in Ontario, claiming breach of contract and negligence. The trial court stayed Eastern Power's action on the grounds that Ontario was not an appropriate forum. Citing Amchem76 as authority, the Ontario Court of Appeal agreed and held that the test for forum non conveniens was whether there is clearly a more appropriate jurisdiction in which the case should be tried than the domestic forum chosen by the plaintiff 77. It listed eight factors which determined the issue, noting that the following four were the most important: 1) the location where the contract was formed; 2) the law of the contract; 3) the jurisdiction in which factual matters arose; 4) the question of juridical advantage. On the first factor, the Court applied the general rule that a contract is formed where the offeror receives the offerees acceptance which, in this case, was in Italy via facsimile transmission. The second and third factors required the Court to decide which law should govern the contract, because the parties had not chosen a proper law or a jurisdiction. The Court held that Italian law was the proper law of the contract because of the following contacts: only the Italian version of the letter of intent was executed, currency was expressed in lira, the subject matter of the contract was the building of a power plant near Rome, the project was subject to Italian regulation, the plaintiff was to participate in the project through a company organized under Italian law, and the defendant was associated with the municipal government of Rome.78 On the final factor, the Court held that no juridical advantage was being denied to Eastern Power by declaring Ontario a forum non conveniens. Eastern Powers submission to the Court included a claim in damages for loss of profits resulting from breach of contract and that Italian law did not permit recovery of such loss. The Court held that because the proper law of the contract was Italian, Italian law would govern even if the case were tried in Ontario. Therefore, there was no juridical advantage for Eastern Power to proceed in Ontario. e) Principal action and action in warranty choice of law and jurisdiction Crestar Ltd. v. Canadian National Railway Co.79 Crestar, an import and distribution company, contracted with Kuehne & Nagel to carry goods from Montral to Yokohama, Japan. Kuehne & Nagel contracted with Transpac Container System Ltd. (Transpac) to move the goods from Montral to Yokohama. Transpac contracted with Hapag-Lloyd to transport the goods from Seattle to Yokohoma. Hapag-Lloyd then contracted with Canadian National Railway (CNR) to move the goods from Montral to Vancouver by train. This train derailed, destroying

76 77

Supra note 4 at 897. Eastern Power, supra note 75 at 414. 78 Juriansz J., cited, ibid. at 419. 79 [1999] R.J.Q.1191 (Qu. Sup. Ct. per Chaput, J.).

16 Crestars goods. Crestar sued CNR; Kuehne & Nagel and Transpac were included as codefendants, and Hapag-Lloyd as a defendant in warranty. Hapag-Lloyd contested the action on the grounds that the contract between it and CNR contained a clause stipulating that German law applied and that the courts of Hamburg had exclusive jurisdiction in the matter. Under German law, unlike Qubec law, the action in warranty would be prescribed. Chaput J. of the Qubec Superior Court found the choice of forum clause was valid under art. 3148 C.C.Q.80 However, this being an action in warranty presupposed the existence of a "lien de connexit" between the incidental action and the principal action, justifying the application of art. 3139 C.C.Q; the latter article reading Where a Qubec authority has jurisdiction to rule on the principal demand, it also has jurisdiction to rule on an incidental demand or cross demand. Holding that there was a link between the two actions, and because if they were to be tried separately there would be a risk of contradictory judgments, the Qubec Superior Court held that it had jurisdiction over the action in warranty against Hapag-Lloyd. Chaput J. also disagreed that the action should be transferred to German courts because of art. 3135 C.C.Q., which reads: Even though a Qubec authority has jurisdiction to hear a dispute, it may exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another country are in a better position to decide. He emphasized that this article was exceptional and Qubec courts were clearly more appropriate in the present case because the defendants had recognized their jurisdiction, the witnesses could come to Qubec, the parties could plead in English, and a German lawyer could testify on the state of German law. In Germany, costs would be greater because of traveling and the need for translators.

80

In personal actions of a patrimonial nature, a Qubec authority has jurisdiction where 1) the defendant has his domicile or residence in Qubec; 2) the defendant is a legal person, is not domiciled in Qubec but has an establishment in Qubec, and the dispute relates to its activities in Qubec; 3) a fault was committed in Qubec, damage was suffered in Qubec, an injurious act occurred in Qubec or one of the obligations arising from a contract was to be performed in Qubec; 4) the parties have by agreement submitted to it all existing or future disputes between themselves arising out of a specified legal relationship; 5) the defendant submits to its jurisdiction. However, a Qubec authority has no jurisdiction where the parties, by agreement, have chosen to submit all existing or future disputes between themselves relating to a specified legal relationship to a foreign authority or to an arbitrator, unless the defendant submits to the jurisdiction of the Qubec authority.

17 Chaput J. finally found that the Qubec action was not prescribed (i.e. not timebarred) because, although it was governed by German law, that law had not been alleged in the proceedings. In consequence, under art. 2809 C.C.Q. which requires that foreign law be pleaded before it is given judicial notice, Qubecs three-year prescription, under article 2925 of the C.C.Q., was held applicable and Hapag-Lloyds motion was dismissed. f) Licensing agreement forum non conveniens Westec Aerospace Inc. v. Raytheon Aircraft Co. 81 Suit was taken in British Columbia by Westec, a British Columbia company, against Raytheon, a Kansas corporation whose business was exclusively in Kansas, for breach of a computer software licensing agreement. Raytheon launched its own suit against Westec in Kansas, seeking a declaration that it owed Westec nothing. Raytheon also sought, unsuccessfully, to stay the B.C. proceedings arguing forum non conveniens. Raytheon appealed. Citing the Supreme Courts decision in Amchem,82 the B.C. Court of Appeal held that: 1) forum non conveniens is the applicable rule in Canada when a court is asked to decline jurisdiction or set aside service ex juris; and 2) in considering whether to stay an action [on the grounds of forum non conveniens], a court must identify the appropriate forum for the litigation based on all the factors that connect the litigation and the parties to the competing fora.83 The Court of Appeal applied a three-part test used in cases where parallel proceedings are alleged:84 1) Are there parallel proceedings underway in another jurisdiction? 2) If so, is the other jurisdiction an appropriate forum for the resolution of the dispute? 3) Assuming there are parallel proceedings in another appropriate forum, has the plaintiff established objectively by cogent evidence that there is some personal or juridical advantage that would be available to him only in the British Columbia action that is of such importance that it would cause injustice to him to deprive him of it?85 On the first point, the Court held that both the B.C. and Kansas actions were substantively parallel proceedings. On the second point, the Court considered both B.C. and Kansas appropriate, as they each enjoyed substantial connections to the subject matter of the litigation. As to procedural differences between the jurisdictions, the Court
(1999) 122 B.C.A.C. 18 online: QL; 173 D.L.R. (4th) 498 (B.C. C.A. per Rowles J.A.) [hereafter Westec cited to D.L.R.]. 82 Supra note 4. 83 Westec, supra note 81 at 504. 84 This test was set out in 472900 B.C. Ltd. v. Thrifty Canada, Ltd. (1999) 168 D.L.R. (4th) 602; 57 B.C.L.R. (3d) 332 (B.C. C.A.). 85 Westec, supra note 81 at 507.
81

18 held that if comity is to be the rule, procedural difference cannot be allowed to govern.86 Concerning the third branch of the test, the Court held that there was no fundamental juridical advantage for Westec in B.C. The Chambers judge had initially found two such advantages; namely, not having to try the case before a Kansas jury and the availability of summary trial judgment in B.C. The Court of Appeal, again invoking comity, observed that Westecs unwillingness to try the case in Kansas was based on unsavoury assumptions about the quality of American justice87 with no firm evidence in support. On the issue of the availability of summary trial proceedings in B.C., the Court held that comity demands that the efficacy of proceedings88 in other jurisdictions be acknowledged even if procedures do not mirror one another. As such, the Court of Appeal allowed Raytheons appeal and stayed Westecs action in B.C. The Supreme Court of Canada confirmed the judgment of the B.C. Court of Appeal and dismissed the appeal.89 f) Two causes of action debt and domestic title to property forum non conveniens Shah v. Jesudason90 Shah, the plaintiff, brought two actions against Jesudason. The first action was to recover a debt Jesudason allegedly owed to him, and the second action was to set aside a transfer of a Nova Scotia property by Mr. Jesudason, to the other defendant, his wife, Mrs. Jesudason, on the grounds that it was fraudulent and done with intent "to delay or defeat"91 Shah as a creditor. The debt stemmed from the parties joint involvement with a Liberia-based company. Shah had no involvement with Nova Scotia, while the Jesudasons were residents of Halifax and / or Madras [India]. The property being conveyed, allegedly for fraudulent purposes, was located in Nova Scotia.
Ibid. at 512. Ibid. at 514. 88 Ibid. 89 (2001) 15 C.P.C. (5th) 1, [2001] S.C.J. No. 23, 2001 SCC 26 online: QL (Appeal was dismissed by the Supreme Court of Canada without reasons, April 17, 2001). 90 (1999) 177 N.S.R. (2d) 162, 542 A.P.R. 162; 176 D.L.R. (4th) 116 (N.S. C.A., per Pugsley J.A.) [hereafter Shah cited to D.L.R.]. 91 Ibid. at 118. The wording was from Hallett J. in Bank of Montreal v. Crowell and Crowell (1980) 37 N.S.R. (2d) 292 at 303-304, 67 A.P.R. 292 at 303-304, in which the Nova Scotia Supreme Court set out three facts that a plaintiff would have to prove in order to succeed in an action founded on the Act Against Fraudulent Deeds, Alienations, etc., 1570 (U.K.), 13 Eliz., c. 5 (Statute of Elizabeth) sect. 1. Hallett J.s three facts were cited by Pugsley J.A. at 123: 1. The conveyance was without valuable consideration 2. The grantor had the intention to delay or defeat his creditors 3. That the conveyance had the effect of delaying or defeating the creditors [emphasis added]. Pugsley J.A. (at 118) also cited the passage from the Statute of Elizabeth relevant to the case at bar, which reads as follows: For the avoiding and abolishing of feigned, covinous and fraudulentconveyancesdevised and contrivedto delay, hinder or defraud creditors and others of their just and lawful actions. He also quoted Justice Halletts words (in the Crowell decision, supra at 304) that [t]he plaintiff must first obtain a judgment against the debtor prior to commencement of proceedings to set aside the conveyance under the Statute of Elizabeth.
87 86

19

Upon the application of the Jesudasons, the court of first instance severed the two causes of action and granted a stay of both proceedings, holding that Nova Scotia was not a forum conveniens for the debt action and that the real property proceedings should be delayed until a decision was rendered elsewhere in the first matter. The lower court suggested that either the United Arab Emirates (U.A.E.), where Shah resided, or India, whose citizenship all three parties bore, would be suitable locations for the action concerning the debt. The Court of Appeal upheld the judgment of the lower court, including the severance of the two actions, holding that Shah had not demonstrated an error in law by the court below. Shah had argued that to dismiss the fraudulent conveyance action would require him to obtain a foreign money judgment as a precondition of pursuing the fraudulent conveyance suit in Nova Scotia. The Court disagreed, stating that comparatively minor property proceedings should not be used as a pretext to have a debt action, with no connection to Nova Scotia, heard in the Province. The Court reiterated the need to proceed with the debt action in an appropriate forum prior to determining the validity of the conveyance. It concluded that defendants should not be required to defend in Nova Scotia the fraudulent conveyance claim arising under the Statute of Elizabeth before the debt issue was resolved in a forum conveniens."92 g) Stock purchase forum non conveniens Pacific International Securities Inc. v Drake Capital Securities Inc. et al.93 Pacific, a British Columbia securities dealer, bought shares on behalf of a client from Drake, a California securities dealer. Drake did not deliver the shares, and in accordance with B.C. security regulations, Pacific then bought shares in the open market to cover its clients position. Pacific commenced an action against Drake in British Columbia to recover the difference in costs and served a writ ex juris in California, the place of the alleged breach. The B.C. trial judge held that, because the breach of contract occurred in California, service ex juris could not be supported under Rule 13(1)(g) of the British Columbia Rules of Court.94 Nevertheless, Rule 13(3) stated: In any case not provided for in subrule (1), the court may grant leave to serve an originating process outside of British Columbia. Thus, under Rule 13(3), the trial judge granted the ex juris writ Pacific had requested. The B.C. Court of Appeal agreed 2 - 1 that Rule 13(3) incorporated by necessary implication the real and substantial test for jurisdiction seen in Morguard95 and Tolofson.96 Justice MacKenzie, for the majority, held that that test was met in this case,
92 93

Shah, supra note 90 at 124. (2001) 82 B.C.L.R. (3d) 329 (B.C. C.A.) [hereafter Pacific International]. 94 B.C. Reg. 221/90. 95 Supra note 3. 96 Supra note 2.

20 because the cause of the action, namely the obligation imposed by B.C. security regulations that Pacific cover its clients position by buying shares in the open market, had occurred in B.C. The B.C. Court of Appeal concurred with the trial judge that there was no reason to stay the proceedings in B.C. on the grounds of forum non conveniens. MacKenzie J.A., in dismissing the appellants arguments, stated that Amchem does not stand for the broad proposition that once a competing appropriate forum is advanced by the defendant, the burden of proof will automatically shift to the plaintiff.97 h) Sales contracts two actions forum non conveniens Canadian National Railway Co. v. Sydney Steel Corp.98 Sydney Steel Corp. (Sysco) filed an action against Canadian National Railway Co. (CNR) in Nova Scotia, for damages relating to unpaid invoices and other relief. Following this action, CNR commenced an action in Qubec, alleging a breach of contract by Sysco. Sysco brought an application in Qubec to dismiss or stay the proceedings, but it was dismissed, on the ground that Qubec was the more convenient forum. Thereafter, CNR brought an application in Nova Scotia to stay Sysco's Nova Scotia action, claiming that Qubec was the more appropriate forum. The Supreme Court of Nova Scotia dismissed the application. CNR appealed. Citing the decision concerning forum non conveniens in Amchem,99 the Nova Scotia Court of Appeal confirmed the judgment of first instance and found that a more appropriate forum had not been established. It held that the Nova Scotia action should not be stayed on the ground that the Nova Scotia proceedings could encompass the Qubec issue by way of counterclaim. Moreover, should the stay be granted, Sysco, as seller, would lose the Nova Scotian juridical advantage of broader rights of discovery. Both jurisdictions were found to be equally convenient. The Nova Scotia Court of Appeal also held that issue estoppel did not apply, since the issues before the two courts were not the same and because the Qubec Court's determination of choice of law was not binding, nor was it wrong to hold that the choice of law issue was insignificant from the point of view of assessment of forum conveniens, and even if significant there was no clear balance of convenience in favour of Qubec. Citing Amchem and Morguard,100 it was decided that the principle of comity is respected when two jurisdictions conclude that differently framed actions in both jurisdictions may continue when neither is more convenient than the other. In such a case, if any deference is to be shown to comity, it would be to the jurisdiction in which proceedings were first commenced.

97 98

Pacific International, supra note 93 at 337. (1998)170 N.S.R. (2nd) 84, 515 A.P.R. 84; 164 D.L.R. (4th) 747 (N.S. C.A., per Cromwell J.A.). 99 Supra note 4. 100 Supra notes 3 and 4.

21

i) Employment contract forum non conveniens Ruggeberg v. Bancomer, S.A.101 A Mexican citizen employed by a Mexican bank, working in Canada, sued her employer, first in Mexico and then in Ontario, for wrongful dismissal. The employee received some compensation as a result of her suit in Mexico, and appealed that decision to the Superior Court in Mexico. The employees action for wrongful dismissal in Ontario led the employer to argue for a stay of the proceedings on the grounds of forum non conveniens. The Ontario Court (General Division) stayed the action and the employee appealed to the Ontario Court of Appeal. The Ontario Court of Appeal dismissed the appeal agreeing with the motion judge that Mexico was the appropriate forum for the action. The considerations for the decision were that there was an ongoing, and partially successful, action in Mexico, that Spanish was the language of witnesses and documents, that various pertinent documents clearly established Mexico as the place of employment, and that both parties had significant and long-standing connections with Mexico. The Supreme Court of Canada dismissed the application for leave to appeal.102 j) Loan of money place of the loan forum non conveniens Lan Associates XVIII L.P. et al. v. Bank of Nova Scotia 103 The Bank of Nova Scotia (BNS) lent money to four companies beneficially owned by Lan Associates, for the purpose of financing a development project in the Turks and Caicos Islands. When a dispute arose between the creditors and debtors, the Lan Associates sued the Bank for misrepresentation, breach of good faith, and breach of fiduciary duty. Although the allegedly tortious conduct of the officers of BNS was in Toronto, the loans were administered by the Banks office in the Turks and Caicos Islands. The Bank moved to stay the action in Ontario, successfully arguing forum non conveniens. The Lan Associates appealed. While reviewing the motion to stay the proceeding, the Ontario Court of Appeal noted: 1) that the plaintiffs resided in the United States and did not have any other real or substantial connection with Ontario,104 other than that the alleged tortious conduct of the officers of BNS was in Toronto; 2) that the loan agreements were negotiated and executed at least in part in the Turks and Caicos Islands and that these agreements invoked the law of the Turks and Caicos Islands as the proper law of the contract; 3) that both parties had commenced proceedings in and attorned to the Court of the Turks and Caicos Islands; 4) that many probable witnesses for this case resided in the Turks and
(1999) 122 O.A.C. 310 (Ont. C.A.). [1999] S.C.C.A. No. 289 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs and without reasons, March 16, 2000). 103 (2001) 138 O.A.C. 114 (Ont. C.A.). 104 Ibid. at 115, para. 3.
102 101

22 Caicos Islands and surrounding Caribbean Islands; and 5) that the loans were administered by the office of the BNS in the Turks and Caicos Islands. The Ontario Court of Appeal also noted that the trial judge considered that the suit of the debtors had the appearance of forum shopping. After balancing the conveniences of the two jurisdictions, the Ontario Court of Appeal granted the Banks request, holding that the balance of convenience weighed in favour of the Turks and Caicos Islands being the appropriate forum for trial. 2) Tort Choice of Jurisdiction a) Sovereign immunity - delict - forum non conveniens R. v. Miller 105 The federal government leased a building in Montreal from Monit International Inc.(Monit), and sublet the building to the International Civil Aviation Organization (ICAO) for use as the Organizations headquarters. Miller, an employee of ICAO, worked in the building until illness forced him to resign. He subsequently sued the federal Crown and Monit in the Qubec Superior Court, claiming that his health had been impaired due to the unhealthy air quality and inadequate ventilation in the building. The Crown and Monit made a motion for a declinatory exception under the Qubec Code of Civil Procedure,106seeking the dismissal of the suit on the grounds that the Superior Court lacked jurisdiction ratione materiae. The Crown argued that in signing the lease as host country of ICAO, it was acting jure imperii and was therefore immune from the jurisdiction of Canadian courts. It also contended that Miller, as a former employee of ICAO, was required to submit all disputes relating to his employment to certain specialized United Nations tribunals, in accordance with internal administrative rules and procedures set out in the ICAO Service Code, and consequently that Qubecs Superior Court lacked jurisdiction to hear the case. The Qubec Superior Court dismissed this exception, and the two defendants appealed. Nuss and Deschamps JJ.A. of the Qubec Court of Appeal upheld the dismissal, affirming the Superior Courts jurisdiction over the action. Nuss J.A. first decided that although ICAO, as an international organization, was immune from suit in Canadian courts, Miller was not suing ICAO, nor did his claim arise out of either the lease between Monit and the federal Crown or the headquarters agreements between the Crown and ICAO. Rather, Miller was suing the Crown and Monit on grounds of extra-contractual, i.e. delictual, responsibility, claiming that they had committed a fault causing him damages. As a general rule, if the Crown through its negligence injures someone in Qubec, then leaving aside cases where domestic law grants it judicial immunity, it is amenable to suit before the courts having jurisdiction in Canada. Moreover, neither the Crown nor Monit could clothe themselves in the immunities from suit which attach to ICAO. Furthermore, Nuss J.A. held: There is no principle of law which provides that
105 106

[1999] R.J.Q. 719 (Qu. C.A.) [hereafter Miller]. R.S.Q., c. C-25, art. 165(1) C.C.P. and presumably under arts. 163 and 164 C.C.P.

23 because the Crown is involved with an International Organization in Canada, it is not subject to the Canadian courts if, because of its extra-contractual acts in Canada, on the occasion of or incidental to such involvement, it causes damages to a person.107 Finally, the position of Monit, which lacked the status of the Crown in international law, was no different from that of any other person in Qubec, who has committed an act in the province for which it is extra-contractually responsible. It too was subject to the jurisdiction of the Superior Court. The Supreme Court of Canada dismissed the appeal and upheld the decision of the Qubec Court of Appeal.108 Bastarache J. held that there was no basis for the appellants claim that the plaintiffs status as a civil servant of an international organization should impinge on his ability to bring an action against the Crown, because the plaintiff was not suing in that capacity. In addition, the immunity under art. 33(b) of the Headquarters Agreement between Government of Canada and ICAO only transferred to an employee of ICAO when the employee was a defendant, not when he or she was a plaintiff. Nor could the mere fact that the plaintiffs damages were stated to have arisen from working conditions and to be entirely work-related109 change the true nature of claim into one of labour relations. The case at bar did not involve a dispute between an employee and employer, but rather was premised on a claim by a former employee against third parties who had nothing to do with the employment relationship. The plaintiff was seeking compensation for the alleged wrongful acts of the Crown, which were not based on the breach of employment contract, but were extra-contractual. It was further pointed out that the Crowns failure to warn of dangerous environmental conditions within the ICAO headquarters, if proven, could not be seen as a sovereign act, because it clearly had nothing to do with the agreement between the Crown and ICAO, nor with ICAOs daily activity. Moreover, the facts of the case indicated that the immunity protecting ICAO and its employees (under arts. 4 and 5 of the Headquarters Agreement) was not so broad as to completely preclude the appellant from gathering evidence to support its arguments on the merits of the case. Finally, there was nothing in the international instruments to preclude plaintiffs action from being heard and considered by the Qubec Superior Court, because under art. 31 of Qubec Code of Civil Procedure, the Superior Court was the court of first instance for all suits not assigned exclusively to another court by a specific provision of law, and there was nothing in any of the instruments to specifically exclude the action at bar. The Qubec Superior Court was, therefore, competent to hear the claim. b) Negligence - forum non conveniens Mutual Life Assurance Co. of Canada v. Peat Marwick at al. 110 Two insurance companies with their head offices in Ontario took a negligence action in that province against a national accountancy firm, which also had offices in
107 108

Miller, supra note 105 at 728-729. [2001] 1 S.C.R. 407. 109 Ibid. at 408. 110 (1998) 125 O.A.C. 179; (1999) 172 D.L.R. (4th) 379 (Ont. C.A.).

24 Ontario, and its employee, a British Columbia resident, over financial statements which they had prepared for a company financed by Ontario-based lenders, but which also operated nationally. All the pertinent business dealings between the parties occurred in Ontario. The financial statements were prepared in British Columbia, but were received by the plaintiffs in Ontario. The Ontario Court (General Division) stayed the actions on the basis that British Columbia was a more convenient forum. The two companies appealed. In the Ontario Court of Appeal, Finlayson and Austin JJ.A. agreed that British Columbia was the proper jurisdiction. They held that the motions judge had erred in the test he had applied, by trying "to strike a delicate balance"111 between the two competing fora when the issues raised had some connection with each forum. Rather, he should have applied the test for forum non conveniens laid down by the Supreme Court of Canada in Amchem,112 requiring the defendants to show a clear preponderance of facts in favour of the substitute jurisdiction proposed. Nevertheless, the majority upheld the motions judges ruling that British Columbia was clearly the more convenient forum, based on factors connecting the suit to that province. Sharpe J.A. agreed that the existence of a clearly more appropriate forum must be clearly established in order to displace the forum selected by the plaintiff. He nevertheless dissented from the majority, because he regarded the factors favouring Ontario jurisdiction as significantly more weighty than those supporting a British Columbia forum. c) Fiduciary duty of foreign lawyers forum non conveniens Tang v. Fleming and Berkley Attorneys-At-Law et al.113 Tang, a U.S. citizen who had emigrated from Cambodia, contracted with a California law firm, Fleming and Berkley (F & B), to obtain advice on immigration law in order to help his two sisters move to North America. The plaintiff alleged: 1) that F & B represented to him that he and his sisters were eligible to immigrate to Canada under the terms of the Canadian Immigrant Investor Program, (the Program); 2) that he had paid F & B for their legal services; 3) that F & B advised that in order for him and his sisters to qualify for the Program, he was obliged to deposit $150,000 in a trust account operated by a city in Saskatchewan, the money to be reinvested in projects in Saskatchewan. After depositing the $150,000, Tang realized that he could not qualify for the Program, contrary to the advice of F & B. Thus, since the sole purpose of the deposit was to enable him and his sisters to immigrate to Canada, Tang sued F & B for negligence, claiming the loss of investment opportunity in relation to the $150,000.

111 112

Ibid. at para. 4, citing the motions judge. in first instance. Supra note 4. 113 [2000] 180 Sask. R. 117 (Sask. C.A., per Sherstobitoff J.A.).

25 The Chambers judge granted the law firms application to have its name stricken from the statement of claim, holding that none of the events leading to the action occurred in Saskatchewan and that California was the forum conveniens. Tang appealed. The Saskatchewan Court of Appeal found no apparent or substantial factors connecting the action with the Saskatchewan and dismissed the appeal. d) Corporate multiple defendants in many U.S. states forum non conveniens Pasukonis Estate v. Hamilton et al.114 The plaintiffs, several former shareholders of Pasukonis Estate (Pasukonis), took suit in Alberta against Pasukonis for misrepresentation of the value of interests, causing them to sell their shares below their actual value. The only connection the case had with Alberta was that two of the shareholders, owning only 2% of the shares in issue, were Alberta residents and had received the offer to purchases shares in that province. Most of the defendant corporations carried on business in Colorado, while others were in New Jersey and Sweden. Their shares were never traded in Alberta, and the applicable law was either Colorado or Delaware law. The alleged misrepresentations related to mineral interests in the North Sea. Unlike Alberta, the right to sue had expired in Colorado. The judge in first instance found that Colorado was the more appropriate forum and that the Alberta action should be stayed. The plaintiffs appealed. Applying the Supreme Courts decision in Amchem,115 the Alberta Court of Appeal held that the appropriate test of forum non conveniens was whether the applicant for a stay had established that another forum or jurisdiction is clearly and distinctly more appropriate.116 The Alberta Court of Appeal confirmed the trial judge's finding that Colorado was a forum "clearly and distinctly more appropriate"117 than Alberta. The connection with Alberta was not substantial. Nor did the longer limitation period in Alberta, alleged to be a juridical advantage, overcome the balance of factors in favour of the Colorado forum. It is surprising that the Court did not dismiss the argument about the juridical advantage of limitation period on the grounds that, according to Tolofson,118 limitation is a substantive law issue governed by choice of law rules. e) Jurisdiction and forum non conveniens decided sequentially Jordan v. Schatz119

114 115

(1997) 209 A.R. 123 (Alta. C.A.) [hereafter Pasukonis ]. [1993] 1 S.C.R. 897. 116 Pasukonis, supra note 114 at 124. 117 Ibid. at 128, para. 27 118 Supra note 2 at 1073. 119 (2000) 189 D.L.R. (4th) 62 (B.C. C.A.).

26 While driving in Alberta, Jordan, a B.C. resident, was injured in an automobile accident when a car driven by Schatz, a Saskatchewan resident, collided with Jordans car. Jordans lawyer obtained a writ of summons against Schatz from the B.C. Supreme Court, but the writ did not provide for service outside of British Columbia. Schatzs lawyer, in Saskatchewan, nevertheless accepted service of the writ. Only after the limitation periods for the action had expired in both Saskatchewan and Alberta did Jordans lawyer ask the B.C. Supreme Court to renew the writ, and realizing his mistake, this time specified that service be granted ex juris. At trial, before Mr. Justice Leggatt, Schatz argued that the B.C. Court should not renew the writ ex juris, because the B.C. Court did not have jurisdiction, or alternatively that the Court should decline jurisdiction on the basis that it was a forum non conveniens. Justice Leggatt issued the writ, stating that since the limitation periods in Alberta and Saskatchewan had expired,[t]he only way the plaintiffs action can survive in British Columbia is for this court to accept jurisdiction and renew the original writ.120 The B.C. Court of Appeal declined jurisdiction, holding that: 1) the defendant did not attorn to the B.C. Supreme Courts jurisdiction by accepting service of the writ ex juris through his lawyer; 2) the plaintiffs application to serve the defendant ex juris was inconsistent with the argument that the defendant had submitted to the jurisdiction of the B.C. Court; 3) the defendants challenge to the jurisdiction of the B.C. Court was not submission to that jurisdiction; 4) the defendant had no duty to inform the plaintiff that he was not submitting to B.C. jurisdiction; 5) the chambers judge had erred in issuing the writ after the limitation periods had expired in Saskatchewan and Alberta; 6) whether a court has jurisdiction simpliciter over a case is a distinct issue from whether it is the forum conveniens. The existence of jurisdiction and the declining of jurisdiction, if any, are to be considered sequentially; and 7) whether or not jurisdiction exists is based on the application of the real and substantial connection test.121 f) Class action tort jurisdiction Harrington v. Dow Corning Corp. 122 A class action suit was brought against several manufacturers, some of which resided in Canada and some of which resided in the United States, on behalf of several women who suffered from defective silicone breast implants. On appeal the defendants accepted that all women who had the silicone breast implants in British Columbia had the right to bring an action against them, regardless of whether or not those women resided in B.C. However, the defendants argued that B.C. residents and non-residents who had had the silicone breast implants outside of B.C.

120 121

Ibid. at 65 para. 10. Ibid, at 69 paras. 21-22. 122 (2000) 82 B.C.L.R. (3d) 1 (B.C. C.A.); [2001] S.C.C.A No. 21 online: QL (Supreme Court of Canada dismissed the applications for leave to appeal with costs (without reasons), September 6, 2001).

27 could not bring an action against them, because such women did not have a real and substantial connection to British Columbia, and thus the court had no jurisdiction. The B.C. Court of Appeal dismissed the appeal, agreeing with trial judge, MacKenzie, J., who had held: It is the common issue which establishes the real and substantial connection necessary for jurisdiction.123 In reaching this conclusion, the Appeal Court concurred and expanded on previously articulated principles of comity found in Tolofson,124 Morguard125 and Hunt.126 g) Class action tort Davidson Tisdale Ltd. v. Pendrick et al.127 Davidson Tisdale Ltd. (DTL) sued the appellants, a New York stock salesman and a New York law firm, in Ontario, alleging, inter alia, wrongful interference with its legitimate economic enterprises by the appellants promotion of champertous agreements in regard to a class action instituted against DTL in New York. DTLs allegations, if proven, would be actionable under Ontario law, but not New York law. The appellants unsuccessfully sought the dismissal or stay of DTLs Ontario action before a motions judge, from whose decision they appealed. The appeal was allowed. The Divisional Court found that the lex loci delicti rule had to be applied, according to Tolofson,128 in order to determine the actionability of the appellants conduct in tort. Even if repercussions of that conduct were felt in Ontario, the appellants behaviour was to be judged by the law of the jurisdiction where it took place, i.e. New York. Applying New York law would cause no injustice, because DTL was not deprived of the right to defend itself, and having solicited and accepted shareholders residing in that state, DTL had to run the risk of being sued in New York. In consequence, the Ontario action must be dismissed as frivolous and vexatious.129 The Court further held that [i]t is unnecessary to determine whether Ontario is the proper forum for this action for even if it be, the action must be dismissed.130 3) Libel Choice of Jurisdiction a) Internet defamation jurisdiction Investors Group Inc. v. Hudson131

123 124

Ibid. at 29, para. 78, citing (1997) 29 B.C.L.R. (3d) 88 at 95, para. 18. Supra note 2. 125 Supra note 3. 126 Supra note 5. 127 (1999) 116 O.A.C. 53 (Ont. Ct. Gen. Div.) [hereafter Davidson]. 128 Supra note 2. 129 Davidson, supra note 127 at 61. 130 Ibid. 131 [1999] R.J.Q. 599 (Qu. Sup. Ct.).

28 After the termination of their business relationship, Hudson, a Quebecer, took suit in Qubec against Investors Group Inc. (Investors), a company residing in the same province. Hudson then posted, on his two internet websites, a description of the litigation, including critical comments about Investors, as well as a deformed version of the companys logo and registered trademark. Investors considered the comments defamatory and made a motion for slander against Hudson in the Qubec Superior Court. Pending final judgment on the motion, the company sought the issuance of a safeguard order, requiring the removal from the websites of the statements concerned, and prohibiting Hudson from making any additional comments about the company and from using its trademark and logo. Hudson argued that Qubec courts lacked jurisdiction to issue such an order, because the server that hosted the websites was located in the United States and that he had the right to comment publicly on the pending litigation. Cohen J. granted the safeguard order, to prevent the potentially irremediable harm to Investors Group caused by Hudsons comments on the Net. On the jurisdiction issue, Cohen J. held that a Qubec court has jurisdiction over a Qubec resident even in respect of acts committed by him outside the province. Consequently, the location of the host server was irrelevant. The Courts jurisdiction was further confirmed by art. 68(2) of Qubecs Code of Civil Procedure,132 permitting a purely personal action for libel published in a newspaper to be instituted before the court of the district where the plaintiff resides if the newspaper has circulated there. Hudsons internet website could be considered as analogous to a newspaper circulated in the district, being available not only there but worldwide. Moreover, much more than mere access to the website tied the litigation to Qubec, in particular, the common residence of both parties in the province, their business dealings, which arose there, and the fact that Hudson had sued Investors in Qubec Superior Court. Cohen J. also questioned whether or not the American state where Hudsons server was located would have the necessary minimum contact for jurisdiction to be accepted there. b) Libel in a magazine jurisdiction Olde v. Capital Publishing Ltd. Partnership133 A magazine published in Ontario, but sold in numerous jurisdictions, printed an unflattering article about an American discount broker and his U.S. brokerage company. Neither the broker nor his company carried on business in Canada, however. Some of the magazines were sold in Ontario, and the broker also maintained a summer home there. When the broker and his company subsequently took suit for libel in Ontario, the magazine applied to the Ontario Court for a stay or dismissal of the action on grounds of forum non conveniens. Brockenshire J.134 found that the suit had no real and substantial connection with Ontario. The brokerage company and the publishers of the magazine were American and
132 133

R.S.Q., c. C-25. (1998) 18 C.P.C. (4th) 1 (Ont. C.A.). 134 (1996) 5 C.P.C. (4th) 95 (Ont. Ct. Gen. Div.).

29 despite the publication in Ontario, only a small number of the magazines were actually sold there. The Court held that in such cases the appropriate forum was where the majority of the sales occurred, which in this case was the United States of America. The Ontario Court of Appeal dismissed the appeal out of hand in a cursory decision. 4) Secured Transactions Choice of Jurisdiction a) Bond of guarantee forum non conveniens Crossley Carpet Mills Ltd. v. Guarantee Co. of North America 135 Crossley had provided a labour and materials bond for the construction of a golf course in Qubec. Guarantee Co. of North America (Guarantee) filed a statement of claim in Nova Scotia to recover the sum of $54,708.34 allegedly owed by Crossley. Crossley applied to have the statement of claim stricken or, failing this, for the action to be stayed on the basis that Nova Scotia was forum non conveniens and that Qubec was the proper jurisdiction. Citing Amchem,136 the Nova Scotia Court of Appeal held that Crossley had failed to demonstrate that Qubec or any another forum was clearly more appropriate for the trial of the action. The Court also held the bond issued by Crossley had not required that litigation between the parties be exclusively in Qubec. b) Guaranty of a debt Henwood v. Lvesque Beaubien Geoffrion Inc.137 Henwood, while residing in Qubec, guaranteed the debts of a third person in Qubec with Lvesque Beaubien Geoffrion Inc.s (Lvesque) Ottawa office. When the third person defaulted, Lvesque withdrew money from Henwoods account in Qubec, transferring funds from her account in satisfaction of her guarantee. At the time of this withdrawal of money, Henwood was a resident of B.C. At the time of trial, Henwood was a resident of Manitoba, and it was there that Henwood challenged Lvesques actions. Lvesque applied to the Manitoba courts for an order striking out or dismissing the action. The Manitoba Court of Appeal stayed the plaintiffs action. It found that Manitoba was not the most suitable jurisdiction because it had no connection with the action until the plaintiff moved there. The Court, rather, held that the real and substantial connection appeared to be with Ontario or Qubec. c) Land - secured transactions forum non conveniens
135 136

(2000) 181 N.S.R. (2d) 197; 560 A.P.R. 197 (N.S. C.A., per Roscoe J.A.). Supra note 4. 137 (1999) 134 Man. R. (2d) 150 (Man. C.A.).

30 Southeast Toyota Distributors Inc. v. Branch138 With a mortgage on her Vancouver residence, Mrs. Branch, the appellant, guaranteed the obligations of her husbands Oregon company in connection with the purchase of a yacht in Florida. The vendor of the yacht, Southeast Toyota Distributors Inc. (Southeast), sued the defendant in British Columbia, and, pursuant to the mortgage, sought the foreclosure and sale of Mrs. Branchs Vancouver residence. Mrs. Branch moved to stay the B.C. action, arguing that Florida was the more convenient forum. The B.C. Chambers judge granted an order nisi for disclosure and dismissed the motion, on the ground that Florida lacked jurisdiction to issue any order of foreclosure and sale of land in B.C. Mrs. Branch appealed. The B.C. Court of Appeal dismissed the appeal, holding that: 1) the appellants contention had not been sufficiently established to interfere with the exercise of the Chamber judges discretion;139 2) that the appellant could seek an extension of the redemption period in order to pursue related litigation in Florida; 3) the Chambers judge was correct in observing that submission based on the relative convenience of the parties could not succeed in an action in rem affecting interests in land situated in B.C. 5) Property Law Choice of Jurisdiction a) Title to land in a foreign state jurisdiction Catania v. Giannattasio et al.140 Catania brought an action against his two sisters to declare "null and void" a deed by which their late father had transferred real property situated in Italy to them. All the siblings resided in Ontario, and the deed had been signed in that province. The Ontario Court (General Division) held that it had jurisdiction to decide the application. On appeal, Laskin J. first noted the long-standing Anglo-Canadian common law rule, as applied by the Supreme Court of Canada in Duke v. Andler,141 that Canadian courts have no jurisdiction to determine title to or an interest in foreign land. Laskin J. also rejected the brother's argument that he was seeking equitable relief against two Ontario residents. Although there is an exception to the common law rule, whereby Canadian courts may exercise jurisdiction to enforce rights affecting foreign land if these rights are based on contract, trust, or equity and the defendant resides in Canada, Canadian courts will only exercise such in personam jurisdiction when four criteria are met. First, the court must have in personam jurisdiction over the defendant and the plaintiff must be able to serve the defendant with an originating process, or the
138 139

(1998) 47 B.C.L.R. (3d) 1 (B.C. C.A., per Goldie J.A.) Ibid. at 5, para. 20. 140 (1999) 118 O.A.C. 330; 174 D.L.R. (4th) 170 (Ont. C.A.). 141 [1932] S.C.R. 734.

31 defendant must submit to the jurisdiction of the court. Secondly, there must be some personal obligation between the parties. Thirdly, the jurisdiction must not be exercised if the local court cannot supervise the execution of the judgment. Fourthly, the court will not exercise jurisdiction if the order would be of no effect in the situs of the property. The brother's argument, Laskin J. held, failed to meet the second of these four criteria, because the deed in question created no contractual or other legal obligations as between the two sisters and their brother, so that no equities could be found between the children which would affect the conscience of the sisters if they insisted on their rights under the deed. Accordingly, any dispute over the land concerned would have to be decided by Italian courts. 6) Choice of Jurisdiction Clause a) Jurisdiction clauses forum non conveniens Methanex New Zealand Ltd. v. Fontaine Navigation S.A. et al.142 Suit was taken in the Federal Court by a cargo owner against, inter alia, the charterer and the shipowner. The charterer and shipowner moved for two separate stays, one on the basis of the jurisdiction clause contained in the contract of affreightment calling for London arbitration, and the other pursuant to a jurisdiction clause in bill of lading requiring litigation in Japan. Hargrave P. assumed the jurisdiction clauses to be prima facie applicable, but nevertheless denied the stays for two reasons. Firstly, the defendants were estopped from relying on such a clause by virtue of a letter of undertaking emitted after the beginning of the proceedings, under which all the defendants agreed to accept service and file defences, in consideration of the ship not being arrested. Secondly, despite the jurisdiction clause in the bill of lading, it would be neither proper, reasonable, nor just to hold the plaintiff to the bill of lading jurisdiction clause, because Tokyo was not a more convenient forum for many reasons, including: a) the likely duration of the suit, there being no summary judgment proceeding in Japan; b) lack of compulsory pre-trial discovery there; c) pre-judgment interests running only after the filing of the writ, and without any possibility for the successful party to recover compound interest or lawyers fees; d) the location of most of the witnesses in North America; e) delay indicating that defendant was seeking a procedural advantage; f) the possibility that the Japanese court would enforce a penalty clause in the bill of lading which would relieve or lessen the carriers liability in a manner which would be likely declared void by a Canadian judge as contrary to paragraph 3(8) of the Hague or HagueVisby Rules; g) the validity of the demise clause under Japanese law (such clauses not always being upheld in Canada); h) duplicitous proceedings; i) the lack of security in Japan; and j) the failure of the defendants to waive the limitation period under Japanese law. b) Bill of Lading jurisdiction clause Jian Sheng Co. v. Great Tempo S.A.143
142 143

[1998] 2 F.C. 583; 142 F.T.R. 81 (Can. F.C., per Hargrave P.). [1998] 3 F.C. 418; 225 N.R. 140 (Fed. C.A., per Dcary J.A.).

32

The Federal Court of Appeal held that a bill of lading jurisdiction clause referring to the country where the carrier has his principal place of business is not per se void for uncertainty. The burden, however, is on the party who invokes the clause to prove that the conditions of its application have been met. The fact that, in this case, the clause was contained in the bill of lading when the booking note contained a Vancouver arbitration clause was not deemed relevant either, because this could not be invoked by the plaintiff/consignee who was not a party to the booking note. Hence, still to be proven were i) the identity of the carrier, and ii) the locus of his principal place of business. The shipowner was identified as the sole carrier as against the consignee under an identity of carrier clause contained in the bill of lading. Insufficient evidence, however, was adduced to show the principal place of business of the shipowner, under the relevant and demanding test, which takes into consideration the center from which the instructions are given, and from which control is exercised over both the employees and the business of the company. Thus, the Court held the bill of lading jurisdiction clause inapplicable, because the shipowner (the assumed carrier) had failed to establish that its principal place of business was Hong Kong . The Supreme Court of Canada did not grant leave to appeal.144 c) Bill of Lading, jurisdiction clause forum non conveniens Town Shoes Ltd. et al. v. Panalpina Inc. et al.145 Defendants sought an order staying the plaintiffs cargo claim (for damages resulting from a shipment of shoes from Italy to Canada stolen in Montreal) in the Federal Court of Canada in favour of German Courts, as called for in the choice of jurisdiction clause in the bill of lading. The events from which the claim arose occurred in Canada, and clause 1, the Paramount Clause of the bill of lading stipulated: All carriage under this Bill of Lading to and from Canada shall be subject to COGWA (Carriage of Goods by Water Act, Canada). Teitelbaum J. held that the inconsistency between clause 1 and the choice of jurisdiction clause produced an ambiguity, which should be construed contra proferentem in favour of the plaintiffs. Teitelbaum J. further decided that, in any event, the Federal Court of Canada has discretion under sect. 50 of the Federal Court Act146 to stay or dismiss proceedings on the grounds of forum non conveniens. Applying the test set out in The Eleftheria,147 he noted that the setting of the case at bar was Canada and it would represent a waste of time and money to transport material witnesses to Germany. Moreover, the plaintiffs were based in
[1998] S.C.C.A. No. 287 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons), December 10, 1998). 145 (2000) 169 F.T.R. 267 (Can F.C., per Teitelbaum, J.). 146 R.S.C. 1985, c. F-7. 147 [1969] 1 Lloyds 237.
144

33 Montreal, while it appeared that the defendants had very little connection to Germany. Nor was there evidence of possible prejudice to the defendants if the case were tried in Canada, while the plaintiffs would suffer severe prejudice if it were tried in Germany. In addition, he held that the defendants had no genuine desire for trial in Germany, but were only seeking to impose unnecessary burdens on the plaintiffs, possibly in order to force a settlement. Teitelbaum, J. therefore exercised his discretion and denied the application for a stay. d) Jurisdiction clause forum non conveniens Z.I. Pompey Industrie v. Ecu-Line N.V.148 The defendants sought a stay of a claim for damage to goods carried from Antwerp, Belgium to Seattle, Washington in favour of litigation in Antwerp, pursuant to a jurisdiction clause in the bill of lading. The goods were discharged in Montreal and forwarded to destination by rail, contrary to the provisions of the booking note and the port-to-port bill of lading calling for their transport by water exclusively. Prothonotary Hargrave found that the exercise of his discretion to invoke forum non conveniens would have led to the enforcement of the jurisdiction clause in favour of the defendants. The defendants willful deviation from the agreed upon mode of carriage, however, was unreasonable and amounted to a fundamental breach of contract, thus rendering the limitation and exclusion clauses of the bill of lading, and in particular, the Antwerp jurisdiction clause, unenforceable.149 The motion for stay was therefore denied. On appeal,150 Blais, J. held that the Hargrave P. had not erred in law. A decision to stay a proceeding was a question of fact and the Prothonotary had the discretion to render the decision. The motion for stay was accordingly dismissed. On further appeal, the Federal Court of Appeal,151 affirmed the ruling, holding that Blais, J., had taken into account all relevant considerations. Isaac, J.A. further held that, in motions to stay proceedings, the appropriate test was the same as for interlocutory injunction applications; namely: a) whether there was a serious issue to be tried; b) whether the defendant would suffer an irreparable injury if the injunction (or the stay) was granted; and c) the balance of convenience of granting or refusing the injunction (or the stay). The Supreme Court of Canada has granted leave to appeal from the decision of the Federal Court of Appeal.152 e) Tort and contract jurisdiction clause - forum non conveniens
2000 AMC 145. (Can. F.C., per Hargrave, P.) (This decision supports the view of fundamental breach in maritime law in cases of unreasonable geographic deviation, as set forth in, 3rd Ed., (Montreal: Les ditions Yvon Blais Inc., 1988) chap. 5). 149 Marine Cargo Claims, 3rd Ed., 1988 (ibid. p. 99) was cited to reach this conclusion. 150 2000 AMC 851 (Can. F.C., per Blais J.). 151 (2001) 268 N.R. 364 (Fed. C.A. per Linden, Isaac and Sharlow, JJ.A.). 152 [2001] S.C.C.A. No. 132 online: QL (Appeal heard and judgment reserved, October 2, 2002).
148

34 Napa et al. v. Abta Shipping Co. et al.153 After a ship, registered in Cyprus, sank in Canadian waters, the surviving crew and the spouses of those who died sued the shipowners in the Federal Court of Canada. The shipowners moved for a stay of action, claiming that suit should have been brought in Cyprus. Citing Amchem,154 Morneau P. held that the general rule applicable to forum non conveniens is that the burden of proof is on the defendants to show that the plaintiffs choice of forum is inappropriate. The defendants failed to show that plaintiffs contracts clearly designated Cyprus as the proper forum for this type of dispute. Although the defendants ship was flying a Cypriot flag and the documents pertaining to its condition and maintenance had been issued under the authority of the Government of Cyprus, evidence adduced by the plaintiffs raised doubt as to the connection between the ship and Cyprus. That the defendants carried on their business in Cyprus was contradicted by evidence introduced by the plaintiffs. The claim that Cyprus was the appropriate forum because the fault against the defendants had occurred there, was also dismissed. It was argued as well that all of the parties and principal witnesses resided outside of Canada and that the only connection to Canada was the location of the ships sinking. Morneau P. held that while the plaintiffs, the defendants, and some key witnesses did live outside of Canada, they also lived outside of Cyprus. On the other hand, many potential key witnesses resided in Canada and could be called upon to testify. Morneau P. also accepted that a trial in Cyprus would indeed engender significant legal disadvantages for the plaintiffs. Morneau P. therefore concluded that the defendants had not discharged their burden of demonstrating that Cyprus was the most appropriate forum for hearing the action. Costs were also awarded. f) Contract with jurisdiction clause forum non conveniens 472900 B.C. Ltd. et al. v. Thrifty Canada, Ltd.155 Thrifty Canada, having its head office in Ontario, granted a license agreement to a company in British Columbia (472). The original agreement stipulated that the parties attorned to, or submitted to, the "non exclusive jurisdiction of the province of Ontario" and agreed that the contract would be interpreted in accordance with the laws of Ontario. Thrifty commenced an action against 472 in Ontario, alleging that 472 owed it money under the license agreement. 472 then commenced an action against Thrifty in
153 154

(2000) 173 F.T.R. 54 (Can. F.C., per Morneau P.). [1993] 1 S.C.R. 897. 155 (1998) 57 B.C.L.R. (3d) 332; 168 D.L.R. (4th) 602; 116 B.C.A.C. 233 online: QL (B.C. C.A.).

35 British Columbia, seeking rescission or damages. 472 also applied to the Ontario court, requesting the court to decline jurisdiction over Thriftys earlier action, on the grounds of forum non conveniens. In first instance, the Ontario Court rejected 472s motion, and the appeal was also rejected. Thrifty then filed a motion to the British Columbia court to decline jurisdiction over 472s action, on the grounds of forum non conveniens. This application was rejected as well at trial. Thrifty appealed. The British Columbia Court of Appeal found that the judge in first instance had erred, in that he had accorded significant importance to the old principles that: (1) the plaintiff's choice of forum should not be lightly denied; and (2) it was not objectionable to have two actions dealing with the same matter pending in two different jurisdictions (lis pendens). Instead, the B.C. Appeal Court gave greater weight to the fact that the parties had agreed to attorn to the jurisdiction of Ontario courts. Noting that a sister province, Ontario, had already denied a stay and observing that an even higher level of comity should be shown to decisions of courts of sister provinces than to those of foreign courts, the B.C. Court of Appeal allowed the appeal and stayed the licensee's action in B.C. g) Contract and subcontracts choice of jurisdiction clauses Birdsall Inc. v. In Any Event Inc.156 Montreal-based Stageline leased a stage set to the U.S.-based In Any Event who, in turn, sub-let to Tall Pony. The lease contained a provision requiring insurance and specified Qubec jurisdiction and Qubec law for any litigation. The sub-lease chose New York State law and jurisdiction, while also requiring the lessee to arrange insurance on the stage. Tall Pony contracted for the transport of the stage with Tropical Shipping, through its agent Birdsall Inc. The contract of carriage was concluded in Florida and contained choice of jurisdiction, choice of law, and liability insurance provisions. While being loaded onto a ship, the stage was dropped and damaged beyond repair. Three principal actions were taken in the U.S. Another action was taken in Qubec against the lessee and one of the insurers, who called in warranty the carrier, its agent and the carriers underwriter. The Qubec Court of Appeal held that while the parties and the facts involved in the Qubec action were substantially similar to those in the U.S., the object of the Qubec litigation was sufficiently different, so that there was no lis pendens under art. 3137 of the Qubec Civil Code (C.C.Q.) The Court of Appeal also held that, although art. 3139 C.C.Q. gives a Qubec court having jurisdiction over the principal suit jurisdiction over any warranty action or cross-demand, and although and art. 71 of the Qubec Code of Civil Procedure (C.C.P.) requires that an action in warranty be heard by the same court which hears the principal action, in international cases, these provisions posed no obstacle to the application of forum non conveniens under art. 3135 C.C.Q. The Court noted, rather, that a literal
156

[1999] R.J.Q. 1344 (Qu. C.A., per LeBel, J.A.).

36 reading of art. 71 would effectively sterilise the application of numerous principles of private international law.157 Further, while Qubec courts clearly enjoyed jurisdiction over both actions, the question remained whether they should continue to exercise it.158 Articles 3135 and 3139 C.C.Q. were then weighed against whether the American courts were in a better position to hear the action in warranty. Assessing the contacts, the Court noted that the entire cause of action grew out of events in the United States; that the proper law between the parties was American; that related actions were based on American insurance contracts; that expert witnesses lived in Florida; that the appellants were U.S. companies with no activities in Qubec; that the parties had commenced actions in Florida; and that an American court had already issued an anti-suit injunction against one of the parties. The Court of Appeal therefore held that, besides the inconvenience of dividing the action in warranty from the principal action, U.S. courts were the convenient forum for the warranty action. The Court therefore held that the Superior Court should declare itself without jurisdiction in respect of the action in warranty. h) Employment contract arbitration clause invalid in Qubec Dominion Bridge Corp. v. Knai159 Dominion Bridge fired its employee, Knai, and instituted an action against him seeking to reclaim the sum of $27,050.90 paid and not due. Knais defence included a counterclaim of $1,500,000. against Dominion Bridge for damages caused by the allegations made against him in the companys court action. Dominion Bridge also sought the Courts enforcement of a clause in the employment contract stipulating that all litigation between the parties relating to Knais employment with Dominion Bridge be heard by an arbitrator in the State of New York and that such proceedings be governed by the law of the State of Delaware. The Court at first instance dismissed Dominion Bridges motion, because art. 940.1 C.C.P. does not permit a plaintiff in a legal action in a Qubec court to opt for arbitration after the defendant has appeared in the action and filed a plea. In deciding whether to refer the dispute to a New York arbitrator, the Court of Appeal (by a majority of two to one160), upheld the trial judge and discussing the interplay of arts. 940.1 C.C.P. and 3148 C.C.Q., decided that once Dominion Bridge had opted to sue Knai, thereby waiving its right to proceed to arbitration, and once Knai had pleaded to that action, thereby submitting to the Superior Courts jurisdiction, Dominion Bridge could not change its option and seek a referral of the employment-related dispute to arbitration.
Ibid. at 1353. Ibid. 159 [1998] R.J.Q. 321 (Qu. C.A.). 160 Beauregard J.A. disagreed with the trial judge and with Brossard and Rothman JJ.A. on this point, however.
158 157

37

All three justices further noted that art. 3148(2) C.C.Q. renders Qubec courts incompetent where the parties have agreed on arbitration as the means of settling disputes arising between them in respect of a specified legal relationship. Nevertheless, the Court held that under art. 3149 C.C.P.,161 an employee (such as Knai) residing in Qubec and subject to a contract of employment cannot bind himself to proceed either before the courts of a foreign jurisdiction or before an arbitrator in a foreign jurisdiction.162 The Court considered that permitting Knais rights under his employment contract to be determined by a foreign arbitrator would contravene the legislators intent, as well as the spirit of art. 3149 C.C.Q. 7) Family Law- Equity Choice of Jurisdiction a) Family law equity the best interests of the children Wray v. Wray163 Following divorce proceedings in Alberta, a father obtained custody of his two daughters. He subsequently moved with them to Ontario, where a consent order was later obtained from an Ontario court by agreement of the parties, awarding custody to the father. The children continued to visit their mother in Alberta in the summer. Following one such visit, they decided they wanted to stay with her and failed to return to their father. The father obtained an ex parte judgment from the Ontario Court (General Division), ordering the return of the children to Ontario. In response, the mother launched a motion in the Court of Queens Bench of Alberta seeking custody of the children. Marceau J. of the Alberta Court of Queens Bench ruled that the Ontario court had jurisdiction, the children having the most substantial connection to the province of Ontario, because: (a) the father and his family were firmly rooted in Ontario; (b) the children had lived and gone to school in Ontario for the last eight years; and (c) the childrens only connection to Alberta was the fact that they were born there and now spent part of their summers and some other vacations there. Moreover, the forum conveniens test was held to be of no assistance in this case, as each jurisdiction was equally convenient to one party and inconvenient to the other. Additionally, it was the Ontario Court order that the mother had chosen to ignore. Marceau, J. ordered the transfer of the matter to the Ontario Court (General Division). Nevertheless, reviewing the present family situation of the two girls concerned, he concluded that it was in the best interests of the children to remain with

A Qubec authority also has jurisdiction to hear an action involving a consumer contract or a contract of employment if the consumer or worker has his domicile or residence in Qubec; the waiver of such jurisdiction by the consumer or worker may not be set up against him. 162 [1998] R.J.Q. 321 at 325. 163 (1998) 56 Alta. L. R. (3rd) 148 (Alta. Q.B.).

161

38 their mother in Alberta until further order of the Ontario Court, so as to least disrupt their lives. Again, the best interest of the child was the predominant factor taken into consideration by the court.

8) Intellectual Property Choice of Jurisdiction Intellectual property copyright jurisdiction Folkes v. Greensleeves Publishing Ltd. et al.164 Folkes composed a song entitled Oh Carolina and subsequently sold his rights in this song to Greensleeves, a publisher in England. Greensleeves then sued a third party claiming authorship of Oh Carolina, and Folkes was listed as a plaintiff in the action, in conjunction with Greensleeves. When Folkes contested the validity of the assignment of copyright agreement between himself and Greensleeves, Greensleeves obtained an order in England removing Folkes as plaintiff and adding him as defendant. The English Court declared that Folkes was the author of Oh Carolina, but that Greensleeves owned the copyright. Folkes then filed an action against Greensleeves and seven other defendants in Ontario, seeking a declaration that the copyright assignment was nul and void and an order vesting in him full copyright in the song. The Ontario Court of Appeal affirmed the motions judge in holding that Folkess motion should be stayed, since the United Kingdom was the forum with the closest connection to the action and was the most convenient forum. Folkes was denied leave to appeal by the Supreme Court of Canada.165 9) Anti-suit Injunctions - Choice of Jurisdiction The Supreme Court of Canada in Amchem166 set out the principles for granting an anti-suit injunction. It was held that anti-suit injunctions should not be granted unless foreign proceedings were pending (lis pendens), and the applicant had failed to secure a stay or termination of those proceedings in the foreign court. It was further declared that the court must (a) determine whether the foreign court had taken jurisdiction without satisfying the basic requirements of the domestic courts forum non conveniens principles and that the foreign courts conclusion could not have been reached had those principles been applied; (b) determine whether an injustice would result for the defendant, if the
(1998) 112 O.A.C. 326; 85 C.P.R. (3d) 144 (Ont. C.A.). [1998] S.C.C.A. No. 556 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs and without reasons, April 1, 1999). 166 Supra note 4.
165 164

39 plaintiff were allowed to proceed in the foreign jurisdiction; and (c) weigh loss of advantages to both plaintiff and the defendant, always bearing in mind the connection of the foreign court to the facts and the parties. Applying these principles Sopinka J. set aside the anti-suit injunction as the foreign court was not found forum non conveniens. Submission to arbitration - forum non conveniens Opron Inc v. Aero Systems Engineering Inc.167 Opron, a Qubec company, and Aero, a Minnesota company, had contracted in Qubec to bid on a contract to build a motor testing facility for Rolls Royce in Qubec, and their tender was accepted. Opron and Aero then concluded an agreement between themselves, incorporating the clauses of the contract between Opron, as general contractor, and Rolls Royce, including a clause providing for arbitration in Qubec. Aero had also agreed to act as guarantor for Oprons bank line of credit, located in Qubec. Aero, nevertheless, brought proceedings in Minnesota for damages, alleging that Opron had made misrepresentations regarding the line of credit and that Oprons draw on the credit was in breach of contract. The Minnesota court assumed jurisdiction despite the arbitration clause. The defendant (Opron) moved in Qubec to have its dispute with the plaintiff submitted to arbitration and for an order prohibiting Aero from proceeding with its Minnesota action. While the Qubec Civil Code did not recognize jurisdiction of a foreign court where a valid arbitration agreement existed, Aero objected to the jurisdiction of the Qubec court, arguing that there was lis pendens, as the matter was before Minnesota court, and that Qubec was a forum non conveniens. It was held that there was no lis pendens, since no judgment that the Minnesota courts might render would qualify for recognition and enforcement in Qubec under Qubecs rules on the international jurisdiction of foreign authorities, because the case was not substantially connected (within the meaning of art. 3164 C.C.Q.) to Minnesota and because of the Qubec arbitration clause. Secondly, Minnesota was forum non conveniens, because Opron was not domiciled in Minnesota, nor had the contract been made or performed there, nor had the alleged fault or harmful act occurred there. Finally, the Minnesota proceedings (a damage action based on non-performance of contractual obligations) had a different object from the Qubec motion, which related to the arbitrable nature of the dispute. Thirdly, a Qubec court had discretion to refuse dismissal on lis pendens grounds, where it believed that the foreign court was not the appropriate forum. Qubec recognized the arbitration agreement as giving exclusive jurisdiction to an arbitrator, which superseded the potential jurisdiction of the American court. The Minnesota court had taken jurisdiction on a basis incompatible with Qubec forum non conveniens principles and it could not have assumed jurisdiction had those principles been applied. International comity did not require Qubec to respect a Minnesota decision which, in the opinion of the Qubec court, the Minnesota court lacked jurisdiction to render. Aero would suffer no irreparable harm if obliged to proceed in Qubec, because the Minnesota court had already ruled that Qubec provided an available and adequate alternative forum, and the balance of convenience favoured
167

[1999] J.Q. No. 420 online: QL (Qu. Sup. Ct., per J.T. Kennedy J.).

40 Qubec proceedings. The Qubec Superior Court therefore allowed Oprons motion, issued an anti-suit injunction prohibiting Aero from pursuing its suit in the American court and referred the matter to arbitration.

VI. Recognition of Foreign Judgments in personam and in rem

Morguard168 established the American doctrine of full faith and credit as a fundamental principle in the recognition of interprovincial judgments. Thus, judicial decisions and provincial laws must be recognized and enforced in the courts of all other Canadian provinces and territories. The Supreme Court of Canada in Hunt169 went one step further by giving interprovincial comity constitutional status. The following are the decisions giving detail and nuance to the principles enunciated in Morguard and Hunt. 1) Contract Recognition a) Proof of foreign law - recognition Belliveau v. Royal Bank of Canada 170 Mrs. Belliveau, a New Brunswick resident, had two accounts with the Royal Bank of Canada, a RRSP account and a corporate account. She and her husband were guarantors of their corporate account. Under the terms of the RRSP Plan concerned, the Royal Bank had no right to offset RRSP deposits in connection with any debt or obligation owing to the Bank (other than administration fees). Belliveau defaulted on the borrowings in her corporate account, and the Royal Bank obtained a default judgment against the corporate borrower and against her and her husband as guarantors. Subsequently, the Royal Bank obtained an Order for Seizure and Sale against her in New Brunswick, and, after registering the judgment in Qubec, obtained a Writ of Garnishment against itself in Qubec, in order to seize Mrs. Belliveaus RRSP term deposit when it matured. When the term deposit matured, the Bank unilaterally seized Belliveaus RRSP account, collapsed it, paid the withholding taxes, and then used the remaining RRSP funds to offset what Belliveau owed in the corporate account. Belliveau sued the Royal Bank in New Brunswick for breach of fiduciary duties and damages, which were awarded in first instance.

168 169

Supra note 3. Supra note 5. 170 (2000) 224 N.B.R. (2d) 354, 574 A.P.R. 354 (N.B. C.A. per Turnbull J.A.).

41 Qubec law being more favourable to the Royal Bank, the Bank argued that all the RRSPs it administered were situated and subject to Qubec laws, and thus Belliveaus RRSP was also subject to Qubec law, under which the seizure was valid. This argument was made despite Belliveau opening both her RRSP and corporate account in New Brunswick, and her signing, on that occasion, of Royal Bank forms used across Canada, which made no mention of any particular jurisdictions laws governing their interpretation. The New Brunswick Court of Appeal held that: 1) The laws of a foreign jurisdiction are a question of fact, they must be pleaded and proved to the satisfaction of the court; 2) where foreign law is not proved, the lex fori will prevail as it is the only law available.171; and 3) that, since Qubec law was not proven, the law of New Brunswick applied.172 The Court of Appeal further held that the Bank had breached its contractual obligations as depositary of the RRSP account (although making no ruling on the question of a breach of fiduciary or legislative obligations) and further upheld the trial judges damage award in favour of Mrs. Belliveau. b) Alberta default judgment enforced in B.C. no lis pendens Jerry S. Grobman Professional Corp. v. Linemayr173 Linemayr, a B.C. resident, defaulted on an Alberta mortgage which he had guaranteed, and this default became the subject of a 1981 Alberta judgment against him. The judgment, in favour of Grobman, was registered with the Supreme Court of B.C. in 1984 under the Court Order Enforcement Act.174 In 1994, the plaintiff, Grobman, instituted proceedings against Linemayr in B.C. to enforce the Alberta judgment. Linemayr admitted owing the sum claimed by Grobman, but argued abuse of process and as well that the action exceeded the period permitted under the Limitation Act.175 The British Columbia Supreme Court held that the case before it was different from the original 1981 judgment in Alberta so that there was no res judicata, nor was there abuse of process on Grobmans part. Moreover, the Court noted that Linemayr obviously intended not to repay his debt to Grobman. In appeal, the B.C. Court of Appeal upheld the Supreme Court of B.C.s decision. The Court noted that Grobmans 1994 action had not exceeded the 10-year period permitted under the Limitation Act, because he was seeking enforcement of the judgment registered in B.C. in 1984 and had begun the action in B.C. courts less than ten years later in 1994.

171

To support this view the Appeal Court cited, inter alia, J.G. Castel, Canadian Conflict of Laws (4th Ed.) (Toronto: Butterworths, 1997) at 155 and 162, ibid. at 362. 172 Ibid. at 362-363. 173 (1999) 67 B.C.L.R. (3d) 90 (B.C. C.A., per Hollinrake J.A.). 174 R.S.B.C. 1979, c. 75. 175 R.S.B.C. 1979, c. 236.

42 On the issue of abuse of process, the Court of Appeal held that the proceedings in Alberta and B.C. had separate purposes, specifically, to enforce judgments in each of the two provinces.176 Further, the Court observed that the principles of lis pendens were not applicable since the causes of action at the heart of the proceedings in Alberta and B.C. were different and the purpose was not to obtain judgments in two jurisdictions on the same facts but rather to enforce one judgment initially granted in Alberta. The Court of Appeal also agreed with the B.C. Supreme Court that a debtor cannot evade responsibility by arrang[ing] his personal affairs so that he is judgment proof.177 c) Choice of law and jurisdiction clause and punitive damages Old North State Brewing Co. v. Newlands Services Inc.178 Old North State Brewing (Old North), a North Carolina brewery, bought equipment from Newlands Services (Newlands), a British Columbia manufacturer, under a contract providing that: This agreement will be governed by and interpreted in accordance with the laws of the Province of British Columbia, Canada and the parties will attorn to the jurisdiction of the Courts of the Province of British Columbia, Canada [.] Discovering defects in the equipment during and after its installation, Old North sued Newlands in North Carolina, obtaining a default judgment for breach of contract and warranty, as well as an award of treble damages and punitive damages, under a North Carolina unfair trade practices statute. The brewery had the judgment recognized and enforced by the British Columbia Supreme Court, from which the manufacturer appealed. Citing the rule of comity and the test of real and substantial connection as articulated in Morguard,179 the British Columbia Court of Appeal upheld the enforcement of the North Carolina judgment. Finch J.A. decided that the brewers action had a "real and substantial connection" to North Carolina, because: (a) the manufacturer portrayed itself as a company that operated internationally, by virtue of its internet advertisements, the testimonial and photograph from Brooklyn, and its office in the State of Washington; (b) upon request by the brewery, the manufacturer had sent promotional material to North Carolina; (c) the purchase order was executed by, and the equipment was delivered to, the brewery in North Carolina; (d) the manufacturer sent its representative to that state to assist in the installation, commissioning and repair of the equipment; (f) the losses suffered by the brewer as a result of the installation of the defective equipment were sustained in North Carolina. The choice of forum/choice of law provision in the contract conferred only concurrent jurisdiction upon British Columbia courts, the wording of the clause not being sufficiently explicit to confer exclusive jurisdiction. Moreover, because Newlands had not appeared or contested its liability in the North Carolina action, the court there had rightly applied the law of that state, absent any proof of foreign (B.C.) law.

176 177

Supra note 173 at 96. First instance Judge, cited in ibid. at 94. 178 (1999) 58 B.C.L.R. (3d) 144, 46 O.R. (3d) 480 (B.C. C.A.). 179 Supra note 3.

43 Recognition of the awards of punitive and treble damages in a civil action for damages between private parties was not tantamount to the enforcement of foreign penal laws entailing penalties payable to a foreign state. Nor was it contrary to British Columbia public policy, not being repugnant to any essential public or moral interest of the province or to B.C. conceptions of essential justice and morality. Nor could the treble damage award be denied enforcement under the Foreign Extraterritorial Measures Act,180 because that federal statute empowers the Attorney General of Canada to declare such awards unenforceable in Canada only in the case of foreign anti-trust suits, and not in foreign actions generally, whereas here the award of treble damages was on the basis of unfair and deceptive trade practices. In addition, trebling of damages can be equated to exemplary damages as applied by Canadian Courts. Finally, the enforcement of foreign punitive damage awards did not violate British Columbia public policy, because B.C. courts have jurisdiction and authority to award punitive damages in appropriate domestic cases. d) Enforcement of foreign judgment recognition Dent Wizard International Corp et al. v. Sears181 Dent Wizard International (Dent), a Florida company with its principal place of business in Missouri, and Sears, an Ontario resident, had a secrecy, non-competition and non-disclosure agreement which was subject to the law of Missouri. A subsequent employment agreement between Sears and Dent Wizard Canada (a franchisee of Dent) provided that the law of Ontario would govern disputes. Dent took action against Sears in Missouri for breach of the secrecy/noncompetition agreement, in which action Sears was duly served in Ontario, resulting in an award of U.S. $40,587. The plaintiffs then moved for summary judgment to enforce their Missouri judgment in Ontario, which motion Sears contested, seeking a stay or dismissal. The Ontario Court held that the foreign judgment was final and res judicata in Missouri, thus passing the test for recognition in Ontario.182 The Missouri Court also had jurisdiction, because Sears had submitted to Missouri jurisdiction by securing legal representation for the Missouri action and had been properly served in that suit. There was also a real and substantial connection between the subject matter of the dispute, the parties, and Missouri. The Court considered the following contacts as conclusive evidence of Missouri jurisdiction: a) Dent was a U.S. company, based in Missouri; b) Sears was trained to use the Dent process in Missouri; c) during training in Missouri, Dent provided Sears with the confidential and proprietary information; and d) Missouri employees trained Sears.183 There had been no denial of natural justice or any unfairness
180 181

R.S.C. 1985, c. F-29. (1999) 45 O.R. (3d) 237 (Ont. Ct. Gen. Div.). 182 Ibid. at 246. The Court explained that the foreign judgment is final and res judicata when the issuing court has no longer power to vary or rescind it , and that the fact that the decision was appealed in Missouri does not alter the judgments status. On conclusiveness, the Court elaborated that the judgment cannot be impeached in an action to enforce it in Ontario. In this case, the Court employed the elements of the test devised in Four Embarcadero Center Venture v. Kalen (1988) 65 O.R. (2d) 551 at 562-563. 183 Supra note 181 at 248.

44 in the way the Missouri trial judge had handled the trial there, nor had there been any abuse of process by Dent. The Ontario Court granted summary judgment against Sears, pursuant to Dents motion. Sears appeal before the Ontario Court of Appeal was dismissed.184 e) Choice of law clause and attornment recognition Skaggs Companies v. Mega Technical Holdings Ltd.185 Skaggs Companies (Skaggs), an American corporation carrying on business in Utah, entered into a contract with Mega Technical Holdings (Mega), a company with a presence in Alberta, giving Mega the right to resell Skaggs product within the United States. The contract stated that it would be governed by the laws of Utah. Mega then began reselling Skaggs products in Canada, despite the contract not mentioning distribution within Canada. Skaggs sued Mega, obtaining default judgment in a Utah state court. Because the judgment was ex parte, Mega decided not to engage in costly and time consuming U.S.A. litigation.186 Skaggs then applied to the Alberta Court to enforce the Utah judgment in Alberta. The Alberta Court of Queens Bench held: 1) that the laws of Utah governed the dispute because of the choice of jurisdiction clause, rejecting the defendants argument that Utah law did not apply because the contract concerned itself with distributing goods in the U.S. rather than in Canada; 2) that Mega had attorned to the jurisdiction of Utah when it signed the contract with Skaggs, and that the fact that Mega was a non-resident of Utah was irrelevant; 3) the real and substantial connection test is irrelevant in determining a foreign courts jurisdiction where (as in this case) the defendant has already submitted to that jurisdiction; 4) the Utah default judgment was final and conclusive and therefore could be recognized by Alberta courts; and 5) except for the tort claim, the counterclaim was also within the exclusive jurisdiction of the Utah state court, because the defendant had so contracted. Accordingly, the Utah judgment was enforced in its total amount, to be converted into Canadian currency on the date the judgment became effective. 2) Tort Recognition a) Libel on the internet - recognition Braintech, Inc. v. Kostiuk187 Braintech, which was incorporated in Nevada, domiciled in British Columbia, and conducted business in the United States, took suit in Texas against Kostiuk, a resident of
184 185

(1999) 130 O.A.C. 90 (Ont. C.A.). (2000) 85 Alta. L.R. (3d) 181 (Alta. Q.B.). 186 Ibid. at para. 7. 187 (1999) 63 B.C.L.R. (3d) 156; 171 D.L.R. (4th) 46 (B.C. C.A.).

45 British Columbia, alleging that he had published defamatory information about the company on the Internet. The defendant was led to believe service was invalid under Texas rules of civil procedure, since the petition served upon the Texas Secretary of State was accepted by his father at his previous address in B.C. and Kostiuk was never actually served personally. The plaintiff, alleging that the tort had been committed in Texas, obtained a default judgment there, and commenced an action on that judgment in British Columbia. He obtained judgment at a summary trial. The defendant appealed. Allowing the appeal, the British Columbia Court of Appeal held that the trial judge had erred in failing to consider whether the case had a real and substantial connection to Texas. The due process requirements of the Fourteenth Amendment of the U.S. Constitution also required proof of minimum contacts between the defendant and Texas, in order to justify the exercise of in personam jurisdiction over Kostiuk by a Texas court. In this case, these requirements were not met, because Kostiuks contacts with Texas, limited to the passive use of an out-of-state electronic bulletin board, did not constitute a real and substantial presence there. Kostiuk was neither resident in Texas, nor had he any place of business there, nor had he appointed an agent for service there, although had conducted some technical activities there for a brief, three-month period. There was no allegation of any purposeful commercial activity in Texas on Kostiuks part, nor any material evidence of any person having read the alleged libel in that state, nor was any juridical advantage alleged to accrue in Texas which was not available if the defamation action was brought in B.C. These facts indicated that British Columbia was the only natural forum for the suit and that Texas was not even an appropriate forum. Goldie J.A. therefore found that the principle of comity referred to in Morguard 188 and Amchem 189 did not require the recognition of the Texas default judgment in British Columbia. The Supreme Court of Canada denied Braintech leave to appeal.190 3) Property - Recognition a) Real and substantial connection - recognition Her Majesty the Queen in Right of Ontario v. Mar-Dive Corporation191 It will be remembered that the Supreme Court in Morguard Investments Ltd. v. De Savoye192 ruled that there must be a real and substantial connection between a foreign court and the subject matter of the action, in order that the foreign judgment may be recognized. The Supreme Court did not limit its ruling to in personam judgments but applied it as well to in rem judgments, or at least to "not true" in rem judgments, where the court lacks jurisdiction over the res.
Supra note 3. Supra note 4. 190 [1999] S.C.C.A. No. 236 online: QL (Supreme Court of Canada dismissed application for leave to appeal with costs (without reasons), March 9, 2000). 191 (1996) 141 D.L.R. (4th) 577, 1997 AMC 1000 (Ont. Gen. Div. Ct., per Lissaman J.) [cited to D.L.R.]. 192 Supra note 3.
189 188

46

Applying this test to a California judgment granting title in rem to "abandoned cargo" of a wreck lying on the floor of Lake Erie in Canada since 1852, the Ontario Court found no such real and substantial connection. The only connection with the California court was the residence of the Mar-Dive Group, which sought to enforce the judgment. The registration of the wreck in California and the removal to California of artifacts taken from it were part of a scenario designed to convince the California court to take jurisdiction and, as such, were not compelling evidence of a real connection to California. Rather, the real and substantial connection was with Ontario, where the sunken vessel was found and where the person who first rediscovered the wreck resided. The California judgment was held unenforceable on grounds of public policy as well, because it had been obtained by means of "half-truths and artificiality".193 Indeed, a Canadian diver who first explored the underwater site was described in the California proceedings as an "interloper"; the California court was not notified that the artifacts brought to the U.S. had been removed from the wreck contrary to Canadian and Ontario law; and the same court was erroneously led to believe that the Ontario Government had consented to Mar-Dives claim. Moreover, the Crown in right of Ontario (in whom title to the wreck vested) had not been named as a party to the California proceeding. b) Jurisdiction over foreign land recognition Hlynski v. Hlynski194 In this Saskatchewan action involving the division of matrimonial assets, Mr. Hlynski contended that the lower court had erred in assuming jurisdiction over land located in the Province of Manitoba which he had owned prior to his marriage. The Saskatchewan Court of Appeal recognized that the common law rules governing jurisdiction and choice of law preclude courts in one jurisdiction from determining title to an immoveable located in another, and that rights in relation to an immoveable are generally governed by the law of the jurisdiction in which the property is located. The rationale for these rules was the futility of granting judgments that cannot be effectively enforced, or of making decisions at odds with the law of the place where the immoveable is situated.195 The Appeal Court nevertheless held that the Saskatchewan court had jurisdiction to render its decision respecting the Manitoba property in this case, because Mrs. Hlynski did not lay claim to any right, title or interest in the Manitoba land, but rather successfully claimed that the land constituted matrimonial property. Although this determination did not confer on her any title to the land, it entailed certain legal incidents affecting that property under Saskatchewans Matrimonial Property Act, 1997.196 In particular, the Act permitted the granting of a personal right grounded in the joint obligations of the parties to the marital partnership to apply to the court for the distributive share
193 194

Supra note 191, 141 D.L.R. (4th) at 630. (1999) 176 D.L.R. (4th) 132 (Sask. C.A. per Cameron J.A.). 195 Ibid. at 144. 196 S.S. 1997, C. M-6.11.

47 contemplated by the provisions of the statute,197 and the lower court was empowered to grant such an order by virtue of sect. 26 of the Act. There was, therefore, jurisdiction to ascribe a share of the lands value to Mrs. Hlynski in the separation settlement. 4) Family Law a) Best interests of the children recognition Brooks v. Brooks198 A married couple with two children lived in Manitoba. After the couple separated, the wife took the children to Ontario and the husband obtained an interim order for custody of the children in the Manitoba Court of Queens Bench in proceedings under the Divorce Act199. The wife then obtained from the Ontario Court (General Division) an order for interim custody and applied for custody and child support under the Ontario Childrens Law Reform Act,200 and a variation of the Manitoba interim custody order under sect. 17 of the Divorce Act. The Manitoba court, in the fathers divorce action, granted joint custody of the children, with sole custody to the husband if the children were not returned to Manitoba. Both spouses moved for declarations that their respective orders superseded those of rendered in the other partys jurisdiction. The Ontario court dismissed the two motions. They appealed. The Ontario Court of Appeal held that under sect. 22(1)(a) of the Children Law Reform Act, Ontario courts were not competent to exercise jurisdiction in the matter, because a proceeding had already been initiated in Manitoba, where the children were habitually resident. Nor had there been any material change in the circumstances affecting the best interests of the children, who were not facing any risk of serious harm such as would justify the Ontario court superseding the Manitoba order (sects. 42 and 43 of the Children Law Reform Act). Moreover, the children still had a real and substantial connection with Manitoba. Nor had the Ontario court the power to vary, suspend or rescind the custody order in virtue of sect. 17 of the Divorce Act, because the parties did not qualify as "former spouses" when the Manitoba order was rendered. The Manitoba interim order thus superseded the Ontario interim order. As the children had been living in Ontario for over a year with their mother, the Ontario Court of Appeal held it to be in the best interests of the children that the Manitoba orders should be varied. Accordingly, custody was awarded to the mother and reasonable unsupervised access to the father, allowing the mother to argue the father's Manitoba custody claim. It is interesting that the court first found it could neither vary, suspend nor rescind the Manitoba order in virtue of the Divorce Act, and on the issue of custody during the proceedings it did the opposite by granting custody to the mother, on the principle of
197 198

Ibid. at 146. (1998) 41 O.R. (3rd) 191; 111 O.A.C. 177; 163 D.L.R. (4th) 715 (Ont. C.A.). 199 R.S.C. 1985, c.3 (2nd Supp.). 200 R.S.O. 1990, c. C.12.

48 doing what is in the best interests of the children. Choice of law, in respect of custody of children, seems to be a matter of equity as much as any rule of private international law. b) Best interests of the child equity recognition Johnson v. Lennert201 A separation agreement incorporated in a divorce decree of the Supreme Court of the Northwest Territories awarded custody of a single child to the mother and reasonable access to the father. The mother moved to British Columbia with the child and the father moved to Newfoundland. The agreement provided that the child would spend summers with the father and the rest of the year with the mother. While the child, now thirteen years old, was in Newfoundland with her father, she advised him she no longer wished to live with her mother but wanted to live with him. He therefore applied to the Unified Family Court in Newfoundland to vary the custody order accordingly. The judge in Chambers declined jurisdiction, on the grounds that the most real and substantial connection was with British Columbia, the child having lived there for the past six years. The judge transferred the file there and the father appealed. The Newfoundland Court of Appeal held that the Chambers judge had committed an error in law by interpreting sect. 6(3) of the Divorce Act202 as mandating transfer of the fathers motion out of the jurisdiction solely on the ground of the childs substantial connection to British Columbia. The judge had thus exercised her discretion outside the parameters of settled principle, in not considering the best interests of the child, the pervading principle in matters of child custody. The case was therefore remanded to the Newfoundland Unified Family Court for reconsideration. It is equally interesting in the Johnson v. Lennert decision, as in the Brooks v. Brooks decision, that the court tempers its conflict of laws rationale with equity, much as the Americans seem to do. c) Divorce jurisdiction recognition Horsting v. Horsting203 A wife petitioned for divorce in Ontario and made claims for the division of family property under the Ontario Family Law Act.204 The husband sought the dismissal of the petition and a stay of the claims. Both parties had been Canadian residents, but gave up their residency in Canada to take up residency in Greece and were residents of Greece when the divorce petition was filed. The couple had children who resided in Canada, but these children had matured and were living on their own. The Ontario Court dismissed the divorce petition and stayed the claims.
201 202

(1998) 167 Nfld. & P.E.I.R. 167, 513 A.P.R. 167 (Nfld. C.A. per Marshall J.A.). R.C.S. 1985, c. 3 (2nd Supp.). 203 (1999) 122 O.A.C. 183 (Ont. C.A., per Finlayson J.A.). 204 R.S.O. 1990, c. F.3.

49

The Ontario Court of Appeal agreed with the lower courts decision, holding that Ontario courts had no jurisdiction to hear the motion under the Divorce Act205 and declined jurisdiction regarding the wifes claims under the Family Law Act.206 The spouses had severed their ties with Ontario before departing for Greece and their subsequent residence in that country made Greece, the country of their last common residence, the jurisdiction with the closest connection to the action and the parties. d) Custody of a child equity recognition Gunsay v. Gunsay 207 A husband and wife divorced in Utah, and the Utah court awarded custody of the couples daughter to the mother, providing detailed access terms for the father. The mother later moved with the girl to British Columbia. The daughter visited her father regularly until a dispute arose, and the wife subsequently applied to the Utah Court for the reduction or removal of the fathers visitation rights. The mother then obtained an ex parte order from the B.C. Supreme Court prohibiting either parent from removing the daughter from B.C. without a further court order. The father appealed this order, arguing that the ex parte order was ultra vires, and seeking an order that the B.C. Supreme Court lacked jurisdiction or that it decline to exercise it. By consent, the Court appointed an assessor, whose psychological report recommended against all direct contact between the girl and her father. The father then applied in Utah to enforce his original access order and also sought a declaration that the mother had wrongfully removed the daughter from Utah and was wrongfully retaining her in B.C. The Utah court ordered the mother to return the daughter to Utah for summer visitations in accordance with a modified access order. Although it declined to declare that the mother had wrongfully removed the child from Utah, the Utah court declared that such an order would be forthcoming if the mother refused to provide for visitation. When the mother, invoking the B.C. ex parte custody order, refused to comply with the Utah order, the father applied in the B.C. Supreme Court to have the ex parte order set aside and for an order requiring the mother to return the girl to Utah for vacations. The mother applied for an order confirming her custody under the ex parte order and indefinitely suspending the fathers access rights. The B.C. Chambers judge rejected the fathers argument that B.C. lacked jurisdiction, placed the case on the trial list and ordered that there be no interim access for the father, who then appealed.

Supra note 202. Under the Divorce Act, in order for a court in a province to have jurisdiction over a divorce petition, one of the spouses must have been ordinarily resident in the province for at least one year immediately preceding the commencement of the proceeding. This condition was not met in this case. 206 Supra note 204. Under the Family Law Act, the property rights of spouses arising out of the marital relationship are governed by the internal law of the place where both spouses have their last common habitual residence or, if there is no such place, by the law of Ontario. 207 (1999) 70 B.C.L.R. (3d) 104; 175 D.L.R. (4th) 678 (B.C. C.A., per Newbury J.A.) [hereafter Gunsay cited to D.L.R].

205

50 The B.C. Court of Appeal was not persuaded that the Utah court approved Mrs. Gunsays relocation with the child to Vancouver by virtue of not issuing an order of wrongful removal. Nor did the Court accept the reasoning of the B.C. Supreme Court that the child was a habitual resident of B.C. under sect. 44 of the B.C. Family Relations Act,208 which the lower court had invoked as grounds for assuming jurisdiction. Jurisdiction, however, could be asserted under sect. 45 of the Act if the court is satisfied on the basis of the reports before it [expert evidence] that [the child] would suffer serious harm if she were removed from this province and forced to see her father.209 The Court also found the judgments of the Utah court troubling as they seemed to reflect a desire to bring Ms. Gunsay to heel rather than to reach a conclusion based on the facts of the case in relation to the best interests of the child.210 Therefore, despite the existence of strong grounds for declining jurisdiction by the B.C court in favour of Utah, including multiple court orders and comity, the Court of Appeal dismissed the appeal211 and held that the principle of comity is outweighed in this case by specific consideration of serious harm to[the child] if she is removed from British Columbia and compelled to see her fatherThe jurisdiction to avoid serious harm to[the child], as set forth in s. 45 of the Act, is therefore engaged.212 e) Custody of the child equity recognition Wilson v. Perry 213 Wilson and Perry had a child together while living in British Columbia. Upon their separation, the B.C. Supreme Court, by consent, granted joint custody of the child, with the primary residence being with Wilson, the mother. The order also prohibited either parent from removing the child from B.C.s lower mainland without the prior written consent of the other or a court order. When Wilsons other children from a previous relationship were taken away by B.C. Child Services, Perry, the father, applied for a variation of the first order and obtained temporary custody of his child, along with the responsibility of providing the primary residence, pending final resolution of the matter of the apprehension of Wilsons other children. The non-removal clause of the original order remained in effect, however. Perry took the child to Newfoundland, out of fear for his and the childs safety, without the consent of Wilson or any court order. Two years later, after her other children had been returned to her, Wilson sought custody over the child in the B.C. Supreme Court, in which Perry filed an affidavit claiming that Newfoundland had jurisdiction over the matter of custody. The B.C. Supreme Court nevertheless assumed jurisdiction and later granted interim custody to Wilson. Perry successfully petitioned the Newfoundland Supreme Court, Unified Family Court, to take jurisdiction, resulting in this appeal by Wilson.
208 209

R.S.B.C. 1996, c. 128. Gunsay, supra note 207 at 693-694. 210 Ibid. at 694-695. 211 The Court of Appeal (ibid. at 696) also found that because the girl had been resident in B.C. for two years, it could no longer be said that she had a closer connection to Utah than to B.C. 212 Ibid. at 696. 213 (2000) 184 Nfld. & P.E.I.R. 1 (Nfld. C. A., per Cameron J.A.).

51

The Newfoundland Court of Appeal considered the issue of the childs habitual residence under sect. 28 of Newfoundlands Childrens Law Act 214 as determinative. The childs habitual residence was the critical factor that would allow a court to assume jurisdiction, even when custody proceedings were begun elsewhere. The Court held that Perrys contravening the B.C. Supreme Courts non-removal order was not a bar to the establishment of a new habitual residence for the child in Newfoundland, as Perry had left B.C. out of fear for the childs safety.215 The following factors led the Newfoundland Court to conclude that Newfoundland was the childs habitual residence, more closely connected to him than B.C. and was therefore the proper venue for determining custody: a) the child had spent three-quarters of his life in Newfoundland; b) his father and paternal grandparents lived there; c) he had begun attending pre-school there; and d) much of the evidence concerning his well-being was in that province. Wilsons two-year delay in launching her custody action in B.C. constituted undue delay in filing for custody, thus permitting the establishment of a new habitual residence for the child under sect. 28(3) of the Act.216 This fact, together with Perrys consistent arguments before B.C. courts that Newfoundland was the proper jurisdiction for the custody proceedings, contributed to the Court of Appeals assertion that Newfoundland was the most convenient forum for the determination of what is in the best interest of the child217. f) Divorce support obligation choice of jurisdiction recognition Rothgiesser v. Rothgiesser 218 The parties were married and subsequently divorced in South Africa, whose Supreme Court issued a divorce settlement awarding custody of their three children to the mother, as well as providing for a fixed amount of spousal support. The father moved to Ontario, while the mother alternately resided in California and South Africa. Living in Ontario in 1990, the father applied to an Ontario court and was granted an amendment to the South African custody and support order, allowing the youngest child to reside with him. The resulting court order, rendered by Lang J., was consented to by both parties and it also adjusted the amount of spousal support paid to the mother. In 1998, the father again applied to an Ontario court and was granted an amendment to the custody and support order (the order of Swinton J.) and this time relieving him of any spousal or child support obligations. The mother contested this order on the grounds that the Ontario court had no jurisdiction to terminate spousal support payments.

214 215

R.S.N. 1990, c. C-13. Supra note 213 at 2. 216 Ibid. at 5. 217 Ibid. at 6. 218 (2000) 128 O.A.C. 302; 183 D.L.R. (4th) 310 (Ont. C.A., per Labrosse, J.A.) [cited to O.A.C.].

52 The Ontario Court of Appeal considered the following three questions as determinative:219 1. Did Lang J. have jurisdiction over the issue while the parties had been divorced in South Africa? 2. Could the parties consent confer jurisdiction on the Ontario court? 3. Did sect. 5 of the Divorce Act220 give Ontario court jurisdiction to vary spousal support orders? First, the Court of Appeal held that Lang J. did not have jurisdiction to issue the 1990 court order of spousal support, as sect. 4 of the Divorce Act gave jurisdiction over corollary relief proceedings only to courts which had granted a divorce to one or both of the parties. Secondly, the fathers contention that parties can confer jurisdiction through mutual consent must fail. Parties, under the common law, cannot empower a court with the authority to make a determination where it otherwise has no authority to do so or its authority is limited by statute.221 Labrosse J.A. held that this limitation cannot be waived by the consent of the parties. Thirdly, Swinton J. did not have jurisdiction to vary the Lang order or the South African divorce judgment, holding that the Divorce Act, sect. 5, only permits the Canadian courts to vary spousal support orders made pursuant to divorces issued by Canadian courts.222 The Court of Appeal thus allowed the appeal, set aside the order of Swinton J., and further noted that: Parliaments jurisdiction over support is ancillary to its jurisdiction over divorce pursuant to sect. 91 of the Constitution Act, 1867. Any attempt to deal with support obligations in the absence of a Canadian divorce would encroach on provincial jurisdiction.223 5) Personal Rights a) Forum non conveniens recognition WIC Premium Television Ltd. v. General Instrument Corp. et al.224 WIC Premium Television (WPT), an Alberta satellite television service provider, pursuant to a licence from the Canadian Radio and Television Commission (CRTC), and agreements with several owners of television programs, obtained the exclusive right to broadcast specific programs in Western Canada. The programs were encrypted, and could only be seen through the use of a decoder, which was activated following a subscription to WPT. U.S. service providers, via satellite, also transmitted the programs in Western Canada and sold decoders there that could read the encrypted signals. WPT commenced
219 220

Ibid.at 309. R.S.C. 1995, c. 3 (2nd Supp.). 221 Ibid. 222 Ibid. 223 Ibid. at 316. 224 (2000) 86 Alta. L.R. (3d) 184, 266 A.R. 142 (Alta. C. A.).

53 actions against the U.S. service providers in California. Following a conditional stay in the proceedings on the grounds of forum non conveniens, WPT took suit in the Alberta Court of Queens Bench for breach of copyright and interference with its contractual rights and of the exclusive rights accorded it by the CRTC. A Chambers judge of the Alberta Court issued an ex juris writ against the U.S. service providers, holding that there was a real and substantial connection between those service providers, the Alberta Court and the subject-matter of the litigation, and that there was a good arguable case against each of the U.S. service providers. Certain U.S. service providers applied to set aside the ex juris writ against them, arguing that they had no manufacturing plant, office, sales force, or advertising in Canada. Except as regards two individual defendants, the Appeal Court upheld the Chambers judges decision to issue the ex juris writs, affirming that there was a real and substantial connection between the defendants and Alberta, as well as a good arguable case of interference by the defendants with WPTs exclusive rights.225

VII. Constitutional Law

Constitutional and conflict of laws problems must always be distinguished in Canada, because their nature and solution are very different. Choice of law, choice of jurisdiction, and recognition of foreign judgments, may all be constitutional problems within an interprovincial and federal context; but they may also be conflict of law problems or both constitutional and conflict of law. If the question posed is constitutional in nature, constitutional rules rather than conflict rules apply - and vice versa. Although a constitutional problem may involve a choice of law or of jurisdiction, it should not be viewed as one in which private international law rules are to be used. Rather, the choice is to be assessed in accordance within the Canadian constitution. A constitutional problem arises from the division of powers, particularly, the interpretation of the powers enumerated in sects. 91 and 92 of the Constitution Act, 1867.226 In a conflict of laws problem, both competing laws or jurisdictions may be validly upheld, and it is for that reason that conflict of laws rules such as lex loci delicti, the closest and most real connection test or forum non conveniens are applied. When, therefore, both laws of each province may be applied, or each judicial jurisdiction is available, it is a conflict of laws problem.

The real and substantial connections were found in the entry of the satellite signals into the territory over which WTP had exclusive rights; the sale of decoders to permit Canadian residents in those areas to receive such signals; the activation of such decoders by the defendants or their subsidiaries, thus permitting the reception of the signals; the receipt of fees by the service providers for such services; and the resulting harm sustained in Alberta by WPT, which was incorporated and had its head office in that province. 226 R.S.C. 1985, App. II, No. 5.

225

54 On the other hand, issues concerning the division of powers of the legislature, the executive, and the judiciary, or of federal and provincial authority are constitutional issues, and must not be confused with those arising from classic conflict of laws. 1) Forum non conveniens bankruptcy in two different fora constitution Holt Cargo Systems Inc. v. ABC Containerline N.V. (Bankrupt) et al.227 A Belgian ship was arrested in an action in rem in the Federal Court of Canada in Halifax by a U.S. maritime lien claimant (Holt Cargo), on a claim for stevedoring services rendered to the vessel in the U.S. The shipowner was soon afterwards adjudged bankrupt by a Belgian court, whose judgment was recognized (subject to the rights of secured creditors) by the Qubec Superior Court. The Superior Court issued an order restraining all creditors from proceeding and ordering the ship to be delivered to the bankruptcy trustees appointed by the Belgian court. Refusing the trustees an adjournment, the Federal Court rendered a default judgment in favour of Holt Cargo and ordered the appraisement and judicial sale of the vessel. Following the dismissal of the trustees application to the Federal Court of Canada for a stay of its proceedings and of the judicial sale of the ship, the trustees obtained an order from the Qubec Superior Court in Bankrutpcy directing payment to them of the net proceeds of the sale, in priority to the claimants in the action in rem, and seeking the aid of the Nova Scotia Supreme Court to enforce the order.228 The Federal Court of Appeal229 nevertheless affirmed the decision of the Federal Courts trial judge230 refusing the stay of proceedings and holding that the maritime lien claim was enforceable in priority to the claims of the trustees. The Supreme Court of Canada dismissed the appeal from the Federal Court of Appeals decision. Binnie J. declared that (a) under the proper law of the case (U.S. law), the U.S. creditor had acquired a maritime lien against the ship prior to the bankruptcy of the owners and the vessel had arrived in Canadian waters burdened with that maritime lien; b) once recognizing the right, it was the Canadian law which set the priorities and at Canadian law a maritime lien ranks ahead of a ship mortgage; c) there were clear juridical advantages to the U.S. creditor in having its claim disposed of in Canada; d) the U.S. creditor was correctly treated as a secured creditor in bankruptcy terms and Canadian public policy strongly supported the rights of claimants regarded as secured creditors and Canadian law considered it in the interests of commercial activity generally that secured rights be protected; e) the Belgian trustees acquired under Canadian law a valid claim but it was and remained subject to the prior claim of the secured creditors, including the maritime lienholders, who were seeking relief in the Federal Court; f) the subject-matter of the dispute before the Federal Court was a maritime lien in in rem
(2001) 207 D.L.R. (4th) 577 (S.C.C.). Re Antwerp Bulkcarriers, N.V. (1996) 43 C.B.R. (3d) 284 (Qu. Supr. Ct. in Bankr.), which decision was nevertheless subsequently varied by the Qubec Court of Appeal in Re Antwerp Bulkcarriers, N.V. (2000) 187 D.L.R. (4th) 106, from which judgment leave to appeal was granted to the Supreme Court of Canada, (2000) 189 D.L.R. (4th) vii. The Supreme Court of Canada upheld the Qubec Court of Appeal. See infra note 231. 229 (1999)173 D.L.R. (4th) 493; 239 N.R. 114 (Fed. C.A.) . 230 [1997] 3 F.C. 187; (1997) 146 D.L.R. (4th) 736; (1997) 127 F.T.R. 244; (1997) 46 C.B.R. (3d) 169; 1997 AMC 2815 (Can. F. C., per MacKay J.).
228 227

55 claims against the ship, not in personam claims against the shipowner, and the Federal Court had rightly concluded that there was no jurisdictional barrier to the Federal Court continuing to adjudicate the in rem action against the ship; and g) the Federal Court, though it had power to stay the proceedings, had not erred in principle in refusing to do so. 2) Bankruptcy in two different fora jurisdiction of Qubec Superior Court in Bankruptcy vs. Federal Court of Canada in Admiralty Re Antwerp Bulkcarriers, N.V.231 As indicated in the previous summary,232 after the Federal Court of Canada refused the motion of the Belgian bankruptcy trustees to stay the action in rem and the judicial sale of the Belgian vessel which had been arrested in the Federal Court in Halifax at the suit of a U.S. maritime lienholder, the Belgian trustees obtained an order from the Qubec Superior Court, directing that the net proceeds of the judicial sale of the ship be paid to them. On appeal, the Qubec Court of Appeal set aside that order on the ground that it conflicted with the order of the Federal Court, resulting in a further appeal by the trustees to the Supreme Court of Canada, by leave of that Court. The Supreme Court of Canada, dismissing the appeal, agreed with the Qubec Court of Appeal that the Qubec Superior Court in Bankruptcy (referred to as the Canadian bankruptcy court) had overreached its authority. Binnie J. declared that the Canadian bankruptcy court had no power in the circumstances of the case to take over disposal of the ship already subject to the process of the Federal Court and to order a permanent stay of the action in rem in the Federal Court, because: 1) the assertion of jurisdiction by the Canadian bankruptcy court did not oust the maritime law jurisdiction of the Federal Court (particularly as the bankruptcy courts orders were rendered subject to the rights of secured creditors, including U.S. maritime lienholders, and such secured creditor provisions were consistent with the public policy of Canadian bankruptcy law); 2) the bankruptcy court had no power to deal with an asset (the ship) already captured by the processes of another competent superior court in Canada (the Federal Court); and 3) the issuance of what amounted to an anti-suit injunction against the parties before the Federal Court (which ought not to have been issued) improperly attempted to restrict that Courts ability to exercise its maritime law jurisdiction. With respect to international comity, which the bankruptcy court had invoked, the Supreme Court pointed out that considerations underlying the rules of comity apply with ever greater force within a federal state such as Canada, where, as decided in Morguard,233 the judgments of the courts of one province or territory should be given full faith and credit in other provinces and territories. Here, the Federal Court, in rendering its default judgment and ordering the judicial sale of the arrested ship, was engaged in determinations within its statutory maritime law jurisdiction, and the Qubec
231 232

(2001) 207 D.L.R. (4th) 612 (S.C.C.). See supra note 228. 233 Supra note 3.

56 Superior Court could not acquire by its endorsement of international comity a jurisdiction which it did not otherwise have.234 The Canadian bankruptcy court ought to have recognized that the trustees proper remedy was a stay of proceedings in the Federal Court, which they had tried but failed to obtain. It is noteworthy that Canadian bankruptcy courts now have additional powers to assist in the administration of foreign bankruptcies under Part XIII of the Bankruptcy and Insolvency Act, entitled International Insolvencies, adopted in 1997, after the arrest and sale of the vessel concerned by this decision.235 Nor was the use of a Maxwell Order236 to facilitate a coordinated approach for ABCs concurrent liquidations in both Canada and Belgium contemplated, despite the fact that such orders are permissible under Canadian law.237 3) Bankruptcyjurisdiction constitutional law Azco Mining Inc. v. Sam Lvy & Associs Inc. (Syndic) 238 Eagle River International Ltd. (Eagle River), which conducted business principally in Qubec, had a number of contracts with Azco Mining Inc. (Azco), an American corporation with an office in British Columbia, relating to the development of a gold mine in Africa. These agreements provided for the law of British Columbia to apply. When Eagle River was petitioned into bankruptcy, the Qubec Superior Court in Bankruptcy appointed a trustee, who applied to that Court to recover from Azco certain shares and warrants to which he claimed Eagle River was entitled. Azco launched a motion in Qubec to have the trustees application transferred to the British Columbia Supreme Court, Bankruptcy Division of Vancouver. Azco argued that it intended to counterclaim, under certain promissory notes, for money it had paid the bankrupt, and that its contractual claims concerned property and civil rights under sect. 92(13) of the Constitution Act, 1867239 and were thus excluded from federal bankruptcy jurisdiction contemplated by sect. 91(21) of that statute. It also argued that the Qubec Superior Court lacked jurisdiction over these claims by virtue of art. 3135 of the Qubec Civil Code (C.C.Q.) because it was forum non conveniens (the B.C. Court being in a better position to decide) and by virtue of art. 3148(5) C.C.Q.240 (the parties having agreed to submit their disputes to another forum). A motions judge of the Qubec Superior Court
(2001) D.L.R. (4th) 611 at 629, para. 55. R.S.C. 1985, c. B-3, as amended by 1997, c. 12, sect. 118. The Supreme Court, ibid., at 623, para. 35, nevertheless stated that Parliament must have assumed that Canadian bankruptcy courts had jurisdiction in relation to foreign bankruptcies when it conferred additional powers to assist International Insolvencies under new Part XIII of the Act in 1997. 236 For a discussion as to what a Maxwell order is and how it works see Tetley, William, Maxwell Order Robert Maxwell Lives On. Fairplay. Online at http://tetley.law.mcgill.ca/publications/fairplay.htm#maxwell.htm(date accessed: June 19, 2002); see also Tetley, William, Glossary of Maritime Terms, online at http://tetley.law.mcgill.ca/maritime/glossarymaritime.htm(date accessed: June 19, 2002). 237 See Olympia & York Developments Ltd. (Re), 64 A.C.W.S. (3d) 62. 238 (2001) 207 D.L.R. (4th) 385 (S.C.C.). 239 Supra note 226. 240 For the English text of art. 3148 C.C.Q., see supra note 80.
235 234

57 dismissed Azcos motion and his decision was affirmed by the Qubec Court of Appeal,241 from which judgment Azco appealed to the Supreme Court of Canada. Dismissing the appeal, the Supreme Court found that the bankruptcy petition was properly filed in the Qubec Superior Court stting in Bankruptcy, in accordance with sect. 43(5) of the Bankruptcy and Insolvency Act,242because Eagle River, as debtor, had its principal place of business in Qubec for a year immediately preceding its bankruptcy. Eagle River, whose only connection with B.C. was its agreements with Azco, could not have filed for bankruptcy in B.C. In any case, the Bankruptcy and Insolvency Act established a nationwide scheme for the adjudication of bankruptcy claims,243 permitting the Qubec Superior Court to exercise national bankruptcy jurisdiction, its orders being executory across the country (including B.C.) pursuant to sect. 188(1) of the Act. Binnie J. further stressed that federal jurisdiction in bankruptcy must be given a wide scope, so as to ensure the expeditious, efficient and economical cleanup of the aftermath of a financial collapse.244 That jurisdiction was not impaired merely because the dispute had a property and civil rights aspect, provided that Azco was not a stranger to the bankruptcy and that the bankruptcy court could award the remedy sought by the trustee. Azco was a significant player in this bankruptcy, and the trustees claim was to specific property of the bankrupt which it alleged Azco was wrongfully withholding, thus entitling the trustee to bring legal proceedings in the bankruptcy court, rather than in the ordinary civil courts. Art. 3148(5) C.C.Q. did not deprive the bankruptcy court of jurisdiction in this case, because the agreements between Eagle River and Azco contained only choice of law, not choice of jurisdiction, provisions, and Qubec courts were able to apply B.C. law. In addition, neither that art. 3148 nor art. 3135 C.C.Q. on forum non conveniens applied, because they were overridden by sect. 187(7) of the Bankruptcy and Insolvency Act, permitting the bankruptcy court to transfer any proceedings under the Act to another bankruptcy district or division if satisfied that the affairs of the bankrupt could be more economically administered elsewhere. In any case, choice of forum clauses, although a significant factor under sect. 187(7), should not be a controlling factor, in view of the public policy favouring single control245 of bankruptcy proceedings in Canada. Similarly, the most real and substantial connection principle of private international law had to be modified in the bankruptcy context, to take account of Parliaments intention of creating a national system for administering bankruptcy estates, under which courts such as the Qubec Superior Court acted, in effect, as national courts. Moreover, the most real and substantial connections in this case were with Qubec, rather than with British Columbia.

241 242

[2000] R.J.Q. 392 (Qu. C.A., per Robert J.A.). R.S.C. 1985, c. B-3. 243 Supra note 241 at 397. 244 Ibid. at 398. 245 Ibid. at 409.

58 4) Broad admiralty jurisdiction of the Federal Court Her Majesty the Queen in Right of Canada v. Greif Containers Ltd.246 A ship was damaged when plastic drums filled with canola oil began to leak during a shipment from Montreal to Pakistan. The Government of Canada, the shipper, was sued by the carrier for damages to the ship. The Government of Canada commenced a suit in Federal Court and filed a third party claim against the manufacturer/distributor of the plastic drums for negligent misrepresentation as to their fitness for sea carriage of the oil. The latter filed a motion to strike the claim, on the ground that the Federal Court lacked ratione materiae jurisdiction under sect. 22 of the Federal Court Act.247 The manufacturer won in first instance. The shipper appealed. The appeal was granted. The Federal Court of Appeal followed Iacobucci J.'s decision in Monk Corporation v. Island Fertilizers Ltd.248 and held that the Federal Court, Trial Division, had jurisdiction in the matter, even though the manufacturer was not a party to the agreement relating to the carriage of goods by sea, because the shipper's claim was so "integrally connected" to maritime matters as to be legitimate Canadian maritime law within federal legislative competence. In fact, the manufacturers had recommended the use of plastic drums in replacement of steel ones, being well aware that they would be used to ship canola oil to remote destinations. The third party claim for negligent misrepresentation was therefore integrally connected to the Federal Courts admiralty and maritime jurisdiction. The Court also agreed with Iacobucci J. that the terms "maritime" and "admiralty" in sect. 2(1) of the Federal Court Act should be interpreted in the light of the modern context of commerce and shipping. 5) contributory negligence liability constitution Bow Valley Husky (Bermuda) v. Saint John Shipbuilding Ltd.249 Husky Oil Operations Ltd. (Husky) and Bow Valley Industries Ltd. (Bow Valley) entered into an agreement to jointly operate an oil rig. The two companies created a third company, Bow Valley Husky (Bermuda) Ltd. ( BVHB) for this sole purpose. BVHB was the owner of the rig, and leased it to the plaintiffs, Bow Valley and Husky, both of whom were responsible for the payment of daily rates to BVHB if there was a disruption to the operations of the oil rig. Such a disruption, and subsequent economic losses, occurred after a fire broke out which caused the oil rig to be out of service for a prolonged period while repairs were made. The fire was caused by the heating system on the rig not being supplied with a ground fault circuit breaker system to prevent arcing of the trace wires in the thermaclad insulation used with the trace wires to prevent freezing of the pipes. BVHB had contracted with Saint John Shipbuilding (SJS) to build the heating system; the pipes for the heating system were supplied by Raychem.
1997 AMC 2462. Also reported sub nom. Pakistan National Shipping Corp. v. Canada [1997] 3 F.C. 601. 247 R.C.S. 1985, c. F-7. 248 [1991] 1 S.C.R. 779; 80 D.L.R. (4th) 58; 123 N.R. 1; 1991 AMC 2263 (S.C.C.). 249 [1997] 3 S.C.R. 1210; (1997) 153 D.L.R. (4th) 385; 221 N.R. 1.
246

59

Husky, Bow Valley, and BVHB sued Saint John Shipbuilding for breach of contract and negligence, claiming that Saint John Shipbuilding failed to provide certificates of approval for the thermaclad insulation supplied and failed to warn of the inflammability of the thermaclad insulation supplied by Raychem. Raychem was also sued in negligence for failure to warn of the danger of inflammability of thermaclad insulation. Upholding a decision of the Newfoundland Court of Appeal,250 the Supreme Court of Canada held that, since the federal government had not enacted contributory negligence legislation, the demands of justice and fairness required that the old common law contributory negligence bar should be removed in respect of maritime torts committed aboard ships in Canada. That is to say, the Supreme Court established (for Canada) a system of apportionment of liability according to proportionate fault in respect of one-ship maritime torts. The Court also held that the contractual relational economic loss suffered by the appellants in the several months during which the oil rig was out of service for repairs following the fire could not be recovered. The prima facie duty of care owed by the respondents was negatived by policy considerations, including the risk of indeterminate liability. 6) Jurisdiction Constitution Ordon Estate v. Grail 251 Dependents of persons killed and injured following two boating accidents in Ontario waters, commenced actions in negligence in the Ontario Court (General Division). The first constitutional issue raised on appeal before the Supreme Court of Canada was whether the Federal Court (Trial Division) had exclusive or concurrent jurisdiction with the provincial superior courts over maritime fatal accident claims made in Canada under the Canada Shipping Act.252 It was held that the lack of any express language in s. 646 of the Canada Shipping Act excluding Superior Court jurisdiction, or vesting sole jurisdiction in the Admiralty Court, is sufficient by itself to justify interpreting s. 646 as conferring on the Admiralty Court only a concurrent jurisdiction over fatal accident claims by the defendants253 The second constitutional issue was whether three valid Ontario provincial statutes (the Family Law Act254, the Trustee Act255 and the Negligence Act256) could apply
(1995) 130 Nfld. & P.E.I. Rep. 92; 126 D.L.R. (4th) 1; 405 A.P.R. 92 (Nfld. C.A.); summarized [1995] LMCLQ 123 at 130-131. 251 [1998] 3 S.C.R. 437; (1998) 166 D.L.R. (4th) 193 (SCC, per Iacobucci and Major JJ.) [cited to S.C.R.]. 252 Canada Shipping Act, R.S.C. 1985, c. S-9, sect. 646. 253 Ordon supra note 251 at 482. 254 Family Law Act, R.S.O. 1990, c. F.3, sect. 61(2)(e). 255 Trustee Act, R.S.O. 1990, c. T.23, sect. 38(1). 256 R.S.O. 1990, c. N-1.
250

60 to the subsidiary aspects of a maritime negligence claim, particularly in respect of: 1) the rights of siblings of the deceased to claim damages in respect of maritime fatal accidents, 2) claims by the deceaseds executor asserted in the name of the deceased, 3) claims of the dependants of the deceased for loss of guidance, care, and companionship, and 4) a general regime of apportionment according to fault. It was held that federal law applied, specifically Canadian maritime law. On the second and third questions, Canadian maritime law, being silent on the question, was judicially reformed (judicially legislated) by the Supreme Court to include the right of dependents, and of the estates of the deceased, to sue. Thus, the issue of whether the provincial statutes were constitutionally applicable to maritime negligence claims did not need to be addressed. The Court also confirmed its own judicial reform in Bow Valley,257 holding that a general regime of apportionment of liability according to fault, with joint and several liability among tortfeasors and contribution between joint tortfeasors, applies in Canadian maritime negligence actions. Hence, it was unnecessary to determine the constitutional question of whether the Ontario Negligence Act258 might apply to the division of damages in Canadian maritime negligence actions. The decision also reaffirmed the basic notion of Canadian maritime law as a comprehensive body of federal law in relation to admiralty and maritime matters, not constrained by the historical scope of English admiralty law in 1934,259 but extending to all matters comprised in the modern context of commerce and shipping. It is a law uniform across Canada and not an incidental application of provincial law.260 The judgment also stressed that uniform maritime law under exclusive federal legislative jurisdiction is a practical necessity, by virtue of the nature of navigation and shipping activities as practised in Canada, and because maritime law is largely a product of international conventions. The Court recognized as well that maritime law has historically been a specialized area of law, adjudicated within separate courts through the application of principles and rules which do not derive exclusively from traditional common law and statutory sources, but from varied sources, including international ones, which make it a body of law in which uniformity is especially appropriate. Finally, the Court held that the claims by the dependents should be subject to a two-year limitation period, as set out in sect. 572(1) of the Canada Shipping Act,261 rather than the one-year limitation period provided for by sect. 649. Given that Parliament intended both limitation periods to coexist, in the absence of any valid reason to justify application of the shorter prescription, based on a strict construction of the limitation statutes the plaintiffs should have the benefit of the more favourable limitation period.

Bow Valley, supra note 249. Supra note 256. 259 The date of the enactment by the Parliament of Canada of the Admiralty Act, 1934, S.C. 1934, c. 31. See generally Tetley W., Maritime Liens and Claims, 2 Ed. (Montreal: Les ditions Yvon Blais 1998) 46-50. 260 These principles were first clearly enunciated by the Supreme Court of Canada in ITO-International Terminal Operators Ltd. v. Miida Electronics Inc. (The Buenos Aires Maru) [1986] 1 S.C.R. 752; 1986 AMC 2580. 261 R.S.C. 1985, c. S-9.
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61 Ordon v. Grail is thus important in that it reiterates that provincial statutes will continue to have very narrow scope of application in maritime matters in Canada.

VIII. Recent Legislation Solving Constitutional Problems

It can be seen from the above that the Supreme Court of Canada in Bow Valley262 and Ordon263 has judicially legislated264on a number of matters, declaring them to be of federal legislative competence in the same way that it did in the past in Triglav v. Terrasses Jewellers Inc.265. Following the Courts decision in Triglav, Parliament enacted the Marine Insurance Act 1993266. After Bow Valley and Ordon, Parliament enacted the Marine Liability Act267, which came into force on August 8, 2001, according statutory recognition to the following principles: 1) By virtue of sect. 5, Part 1 (Personal Injuries and Fatalities) applies to claims made and remedies sought under the rubric Canadian maritime law, as defined in the Federal Court Act268, or any other law of Canada in relation to any matter coming within the class of navigation and shipping. Thus Part 1 applies to boaters, amongst others. 2) Personal injury and death claims under Part 1 are not reserved to the Admiralty Court (defined by sect. 2 as the Federal Court of Canada), but may be brought in any court of competent jurisdiction (sect. 6(1) and (2)), thus perpetuating the concurrent jurisdiction of the Federal Court and the provincial superior courts over maritime personal injury and fatal accident litigation. 3) Damages may be claimed for the loss of guidance, care and companionship by the defendants of both deceased and injured persons (sect. 6(1) and (3)), as well as by the executors or administrators (i.e. estates) of the deceased persons, for the benefit of the dependants (sects. 6(2) and 10(1) and (2)). 4) The term dependant is defined to include, amongst others, brothers and sisters (i.e. siblings) of an injured or deceased person (sect. 4(c)), thus granting them the right to claim, which they did not have under Canadian maritime law when Ordon was decided. 5) Personal injury and death claims under Part 1 are subject to a two-year limitation period (sect. 14(1) and (2)). 6) Proportionate fault (except where it is not possible to determine different degrees of fault or neglect, in which case the liability is equal), joint and several liability and
Supra note 249. Supra note 251. 264 See Calabresi G., A Common Law for the Age of Statutes (Cambridge, Mass.: Harvard University Press, 1982). 265 [1983] 1 S.C.R. 283. 266 S.C. 1993, c.22. 267 S.C. 2001, c. 6. 268 R.S.C. 1985, c. F-7.
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62 contribution between joint tortfeasors are given statutory force in Canadian maritime law by virtue of Part 2 of the Act (Apportionment of Liability), at sect. 17(1) and (2), except with respect to damages to ship and cargo, which continue to be subject to joint, rather than joint and several, liability (sect. 17(3)), in accordance with the Collision Convention 1910.

IX. Conclusion
The judicial reform of conflict of laws by the Supreme Court of Canada, which took place in the early part of the past decade, has been consistently followed and even clarified by Canadian lower courts. In particular, conflict cases categorized as choice of tort law problems are subject to the lex loci delicti rule. Thus, the Ontario Court of Appeal in Davidson Tisdale v. Pendrick269 found it unnecessary to determine the appropriateness of the Ontario forum. Following Tolofson, the Court stated that New York law must be applied because New York was where the tort took place. That the lex loci delicti rule is concerned with choice of law and not choice of the forum was also clarified.270 In Ferguson v. Arctic Transportation Ltd.,271 the Federal Court of Canada held that limitation periods were substantive, following Tolofson. In Pasukonis Estate v. Hamilton,272 however, the Alberta Court of Appeal did not dismiss the limitation period argument on the basis that time bars were substantive, but dismissed Albertas longer limitation period because Alberta was forum non conveniens, which ran contrary to the Tolofson decision. With regard to contracts, the closest and most real connection test was applied to find the proper law, when no proper law clause was stipulated.273 The test for determining the appropriate forum set out in Amchem was applied and followed.274 MacKenzie J.A., declared, however, that the Amchem test for forum non conveniens does not automatically shift the burden to the plaintiff once a competing appropriate forum is advanced.275 International comity was upheld276 and also clarified in respect of the exceptions to and requirements of comity, for example the appropriateness of the forum.277
Supra note 127. Supra note 67. 271 Supra note 30. 272 Supra note 114. 273 Eastern Power Limited v. Azienda Comunale Energia & Ambiente, supra note 75. 274 Westec Aerospace Inc. v. Raytheon Aircraft Co., supra note 81; Canadian National Railway Co. v. Sydney Steel Corporation, supra note 98; Pacific International Securities Inc. v. Drake Capital Securities Inc., supra note 85; Mutual Life Assurance Co. of Canada v. Peat Marwick, supra note 110; Pasukonis Estate v. Hamilton, supra note 114; Crossley Carpet Mills v. Guarantee Co. of North America, supra note 135. 275 Pacific International Securities Inc. v. Drake Capital Securities Inc., supra note 85 at 337. 276 Old North State Brewing Co. v. Newlands Services Inc., supra note 178.
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63 May I add that, with the adoption of new principles such as lex loci delicti, order and fairness, full faith and credit, comity, forum non conveniens and the closest and most real connection, the question arises as to how and when these principles are to be applied and how they correlate with one another. A methodology would not only dictate when certain rules, such as those concerning public order, observance of mandatory rules, and evasion of the law are to be applied, but can also provide ground rules such as the acceptance of dpeage278 or the rejection of renvoi.279 A methodology would provide as well the order in which the basic rules of conflict of laws are applied: e.g., do you decide jurisdiction first or do you first fix the law of the contract or the tort? When do you decide whether public order or mandatory rules are applicable? Adopting a methodology, which is consistently and uniformly applied, is thus crucial in establishing a sound and uniform approach to conflict of laws.280 A partial methodology has been integrated, incidentally, into the revised Introductory Act to the German Code,281 applicable to all tort claims brought under that code.282

Prof. William Tetley, Q.C. - e-mail: william.tetley@mcgill.ca; website: http;//tetley.law.mcgill.ca

Braintech Inc. v. Kostiuk, supra note 187, and Re Antwerp Bulkcarriers, N.V., supra note 231. "Dpeage" is a French term referring to the application to a conflict of laws problem of different laws, each of which is properly applicable to a different legal issue arising in the problem. Online: <http://tetley.law.mcgill.ca> (date accessed: June 19, 2002). See also Intl Conflict of Laws, supra note 23 at 39, 42 and 43. 279 Renvoi is the application of the conflict rules of one state by the court or tribunal of another state, in order to solve a conflict problem., Intl Conflict of Laws, supra note 22 at 73. 280 See Intl Conflict of Laws, supra note 23 at 37-43 for a methodology to find the proper applicable law. 281 Gesetz ber das internationale Privatrecht of July 25, 1986, Bundesgesetzblatt I, 1142. 282 See M. Reimann, Codifying Torts Conflicts: The 1999 German Legislation In Comparative Perspective (2000) 60 Louisiana Law Review 1297.
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