In Orum v. Maksuta, the Superior Court of Justice provided guidance on determining where to start a lawsuit when an injury occurs outside of Ontario.
Facts
In August 2016, Gerald Orum was struck by a motor vehicle operated by Sheila Maksuta while walking across the street in Michigan, United States. In July 2018, Orum commenced an action in Ontario against Maksuta and his own insurer (uninsured and underinsured motorist coverage).
In October 2018, Orum’s lawyer contacted Maksuta’s lawyer to ask whether she intends to challenge jurisdiction. Maksuta’s counsel advised that she does but would be happy to engage in early settlement discussions. Settlement discussions were unsuccessful. Orum did not commence proceedings in Michigan, and the limitation period in Michigan expired in 2019.
In 2020, Maksuta brought a motion to dismiss or stay the action for want of jurisdiction pursuant to Rule 21.01(3)(a) of the Rules of Civil Procedure. In the alternative, Maksuta argued that Ontario is not the convenient forum for the lawsuit.
Issue
Should the action be allowed to proceed in Ontario?
Held by Hebner J
No. Motion granted. Action against Maksuta is stayed.
Reasons
Jurisdiction Simpliciter: The Real and Substantial Connection Test
First, Hebner J held that Ontario is not entitled to assume jurisdiction over the action. She relied on Club Resorts Ltd. v. Van Breda from the Supreme Court of Canada – the leading decision on this issue. In Van Breda, LeBel J held that the court is prima facie entitled to assume jurisdiction if the party arguing jurisdiction establishes the presence of any of the following factors:
- 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 province.
This is not an exhaustive list, and the factors can be rebutted by the party opposing jurisdiction. LeBel J held that if none of the factors apply or an established factor is rebutted, the court “must” dismiss or stay the action, subject to the forum of necessity.
In this case, Hebner J held that none of the factors applied to connect the action to Ontario. Maksuta is not domiciled or resident in Ontario, nor does she carry on business in Ontario. The collision was in Michigan, and there is no contract between Maksuta and Orum in Ontario.
Interestingly, Orum argued that the fourth factor was satisfied because he has an insurance contract with his insurer, a party defendant. Hebner J rejected this argument for two reasons. First, Maksuta is not a party to the insurance contract. Second, the purpose of the test in Van Breda is to promote order, consistency, and predictability by limiting the courts’ assumption of jurisdiction. Accepting Orum’s argument would be contrary to this purpose because it would allow every foreign collision to be litigated in Ontario by adding the plaintiff’s insurer as a party defendant.
Forum of Necessity: An Exception to Jurisdiction Simpliciter
Second, Orum argued that even if there is no jurisdiction simpliciter, Ontario is the necessary forum for his claim. Orum argued that his lawyer was “lulled into a false sense of security from the invitation to engage in early settlement discussions.” He argued that based on the concept of fairness, Maksuta should have opposed jurisdiction before the limitation period expired.
Hebner J rejected this argument. In Van Breda, Sharpe JA from the Court of Appeal explained that the forum of necessity is an exception to the real and substantial connection test: “where there is no other forum in which the plaintiff can reasonably seek relief, there is residual discretion to assume jurisdiction”. This is a narrow and extraordinary exception. It is not satisfied because the limitation period in the proper foreign forum is expired. Maksuta’s counsel was clear in her intention to challenge jurisdiction. In any event, it was not incumbent on Maksuta to bring the motion before the limitation expired – “this is the plaintiff’s case.” The rare and exceptional circumstances required to find a forum of necessity were not found.
