Today the Supreme Court of Canada released its much anticipated
decision in Club Resorts Ltd. v. Van Breda, 2012 SCC 17
("Club Resorts"), and provided a new common law
test for determining when a court can assume jurisdiction over an
out-of-province defendant. Here is a brief summary of the new test;
a more detailed analysis will follow.
A New Test to Determine a "Real and Substantial
Under the common law doctrine of jurisdiction
simpliciter, a court can assume jurisdiction over an
out-of-province defendant if the defendant or the subject matter of
the plaintiff's claim has a "real and substantial
connection" to the province. However, over the years courts in
Canada have struggled with various analytical frameworks for
determining when the "real and substantial connection"
requirement is met.
The Supreme Court of Canada's new test for a "real
substantial connection" is substantially simpler than the
eight‐factor framework that the Ontario Court of Appeal
introduced in Muscutt v. Courcelles in 2002 and the
two‐step reformulation of Muscutt that was
proposed in Club Resorts by that same court in the
decision below. Under the Supreme Court of Canada's new test,
the party asking a court to assume jurisdiction has the burden of
establishing that a "presumptive connecting factor" links
the subject matter of the litigation to the forum. For tort claims,
if one of the following presumptive connecting factors applies,
then the court is presumed to have jurisdiction over the
the defendant is domiciled or resident in the province;
the defendant carries on business in the province;
the tort was committed in the province; or
a contract connected with the dispute was made in the
A party challenging the court's assumption of jurisdiction
may rebut the presumption by establishing facts showing that the
applicable presumptive connecting factor does not point to any real
relationship between the subject matter of the litigation and the
forum, or points only to a weak relationship between them.
The Supreme Court was careful to note that the above list of
presumptive connecting factors is not closed, and that new
presumptive connecting factors may be recognized over time. A court
may identify a new presumptive connecting factor by looking at
connections that give rise to a relationship with the forum that is
similar in nature to the ones reflected in the factors already
recognized. Relevant considerations include:
similarity of the connecting factor with those already
recognized as presumptive connecting factors;
treatment of the connecting factor in the case law;
treatment of the connecting factor in statute law; and
treatment of the connecting factor in the private international
law of other legal systems with a shared commitment to order,
fairness, and comity.
If no presumptive connecting factor applies, or if the
presumption of jurisdiction is rebutted, then the court must
dismiss or stay the action subject to the possible application of
the doctrine of forum of necessity.
Forum Non Conveniens
Even if a "real and substantial connection" is
established and the court can assume jurisdiction over the
out‐of‐province defendant, the court has the
discretion to decline jurisdiction and stay the proceedings against
the defendant on the basis that there is another forum that is
clearly more appropriate for the claim (forum non
conveniens). However, the Supreme Court emphasized that the
normal state of affairs is for courts to exercise jurisdiction once
the "real and substantial connection" test is met. The
court should only consider the doctrine of forum non
conveniens if it is invoked by one of the parties and the
court is satisfied that an alternative forum is a better position
to fairly and efficiently dispose of the litigation.
In the days ahead, we will be following up this update with
further commentary on Club Resorts, its companion cases,
and what it means for civil litigation in Canada.
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