Canada: Supreme Court Of Canada Releases Long-Awaited Jurisdiction Decisions Of Importance To Foreign Businesses And Parties With Ties To Canada

Last Updated: April 19 2012
Article by Ira Nishisato and Margot Finley

Most Read Contributor in Canada, September 2016

The Supreme Court of Canada has released a series of decisions considering the circumstances under which Canadian courts can assume jurisdiction over foreign and out-of-province defendants. These decisions establish a framework for the analysis of jurisdiction issues in civil cases that will apply across Canada and affect Canadian businesses that have ties to other provinces and foreign businesses that have ties to Canada.

Club Resorts Ltd. v. Van Breda and Club Resorts Ltd. v. Anna Charron involve claims by Ontario residents who suffered catastrophic injuries while on vacation in Cuba. In both cases the courts below decided that Ontario had the jurisdiction to hear the cases against some or all of the foreign defendants. In Van Breda, the Ontario Court of Appeal reformulated the test applied by Ontario courts in deciding whether to assume jurisdiction over foreign defendants.

The Supreme Court of Canada recognized the need for certainty and predictability in the law on the one hand, and the need to ensure that cases are fairly decided on their merits on the other hand. The Court rejected a case-bycase approach in favour of a more predictable framework based on "objective factors that might link a legal situation or the subject matter of litigation to the court that is seized of it". The Court's intent is to give parties to a case with an interprovincial or international element a greater ability to predict with reasonable confidence if a Canadian court will assume jurisdiction over foreign defendants.

Although the Court retained the "real and substantial connection" test as the basis upon which a court will assume jurisdiction, the Court did not provide substantial guidance on the proper interpretation of "real and substantial". It stated that the connection cannot be "weak or hypothetical" because such an insubstantial connection would cast doubt upon the legitimacy of the exercise of state power over foreign parties.

The Supreme Court of Canada generally retained the framework devised by the Court of Appeal in which a court will first consider whether the case falls within one of the categories for which a "presumption" of connection can be made and, if a presumptive connection applies, the connection can be rebutted by the defendant through evidence that the connection was in fact weak. Significantly, the Supreme Court of Canada reduced the categories in which a connection will be presumed to exist.

The Court of Appeal held that a real and substantial connection would be presumed to exist in all the situations listed in Rule 17.02 of the Ontario Rules of Civil Procedure except for subrules 17.02(h) ("damages sustained in Ontario") and 17.02(o) ("a necessary and proper party"). The situations covered by the Rule included cases concerning real or personal property in Ontario, the administration of estates in Ontario, or where the claim against a person outside Ontario was authorized by statute. The Supreme Court of Canada held that a court will presumptively have jurisdiction only where: (a) the defendant is domiciled or resident in the province; (b) the defendant carries on business in the province; (c) the tort was committed in the province; and (d) a contract connected with the dispute was made in the province.

While the Court retained the presumptive category of the defendant "carrying on business" in the jurisdiction, it noted that this category raises "difficult issues" and requires "some caution in order to avoid creating what would amount to forms of universal jurisdiction in respect of tort claims arising out of certain categories of business or commercial activity." The Court stated, for example, that active advertising in the jurisdiction or the fact that a web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there. The Court held that "carrying on business" requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there or regularly visiting the territory of the particular jurisdiction.

The list of presumptive categories is not closed and the Court appears to invite arguments in the future that other factors should be given presumptive effect. In identifying new presumptive factors, a court will look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors, and will be guided by the values of order, fairness and comity in assessing the strength of the relationship with the forum.

The companion cases of Black v. Breeden and Les éditions Écosociété Inc., et al. v. Banro Corporation concern the ability of Canadian courts to assume jurisdiction in multi-jurisdictional defamation cases. Black v. Breeden, already the authoritative Canadian case on defamation over the internet, concerns allegedly defamatory remarks made in press releases by U.S. representatives of a U.S. company about prominent Canadian businessman Conrad Black. The Supreme Court held that the tort of defamation occurs upon publication of a defamatory statement to a third party, which, in this case, occurred when the impugned statements were read, downloaded and republished in Ontario by three newspapers. Every repetition or republication of a defamatory statement constitutes a new publication; the original author of the statement may be held liable for the republication where it was authorized by the author or where the republication is the natural and probable result of the original publication. The republication in the three newspapers of statements contained in press releases issued by the appellants fell within the scope of this rule.

The decisions of the Supreme Court of Canada will assist in providing guidance to judges, lawyers, and parties in this complex area of the law. Ultimately the question of whether a "real and substantial connection" exists will continue to require a careful review of the factual connections that exist in each case and how these connections fit within the presumptive categories.

Borden Ladner Gervais LLP's litigation lawyers across Canada have the expertise necessary to effectively analyze our clients' positions and provide strategic advice in light of the decisions and current state of the law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.