ON APRIL 18, 2012, the Supreme Court of Canada ("SCC") changed the "real and substantial connection" test for determining when a Canadian court is allowed to take jurisdiction over a foreign (extra-provincial or international) defendant. This decision is good news for Canadian and foreign companies. The new test confirms that the "real and substantial connection" must be an objective factual connection to the court's territory, and the SCC dearly held that subjective notions of "fairness to the plaintiff' are not part of the test.
The SCC's decision arose from the appeal of two cases, which were heard together: Club Resorts Ltd. v. Van Breda and Club Resorts Ltd. v. Charron; (collectively, "Van Breda-Charron"). (1) This paper will explain the new Van Breda-Charron test for jurisdiction in Canada and highlight its potential effect upon litigants--domestic and foreign--in legal proceedings in Canada. For context, this paper will commence with a summary of the facts of the Van Breda and Charron cases. This paper will then describe the law of jurisdiction in most of the provinces of Canada that existed prior to the Van Breda and Charron cases and follow with a discussion of the SCC's derision establishing this new test for assumed jurisdiction. The final section of this paper will examine how the Van Breda-Charron test has been applied by subsequent motions and appeal courts in the nine months following the release of that decision up through the end of 2012.
I. Facts of Van Breda and Charron
From a jurisdictional perspective, the material facts of Van Breda and Charron were similar.
A. Van Breda
The defendant, Club Resorts Limited ("CRL"), is a Cayman Islands-based company which carries on business as a resort operator in Cuba, among other places. The defendant, Rene Denis, an Ottawa-based travel agent, operated a business of arranging for racquet-sport professionals to be hired by CRL to work at resorts in Cuba. Mr. Denis received compensation for this service from both CRL and the racquet sport professional.
In 2003, Mr. Denis arranged for the plaintiff, Viktor Berg, to work as a tennis professional for CRL at the Superclubs Breezes Jibacoa Resort in Cuba, which was managed by CRL. In return, CRL provided accommodation and other services at the resort for Mr. Berg and a guest. In 2003, Mr. Berg and his common law spouse, the plaintiff Morgan Van Breda, travelled to the resort in Cuba. On the first day of their trip, Ms. Van Breda tried to perform some exercises on a metal structure on the beach. The structure collapsed, and Ms. Van Breda suffered a spinal cord injury that rendered her paraplegic. After spending a few days at a hospital in Cuba, Ms. Van Breda returned to Canada. Rather than going to her pre-accident home in Ontario, Ms. Van Breda went to Calgary, Alberta where her family lived. Subsequently, Ms. Van Breda and Mr. Berg moved together to British Columbia; they never returned to Ontario.
In May 2006, Ms. Van Breda and Mr. Berg issued a lawsuit in the Ontario Superior Court against several defendants, including Mr. Denis and CRL. The action was framed in breach of contract and the tort of negligence.
In January 2002, Dr. Charron and his wife, the plaintiff Mrs. Charron, purchased a vacation package through an Ontario-based travel agent, the defendant Bel Air Travel Group Ltd. ("Bel Air"). The package was assembled and sold by an Ontario-based tour operator, the defendant Hola Sun Holidays, Ltd. ("Hola Sun"). It was an all-inclusive vacation package at the Breezes Costa Verde Resort in Cuba. The package included scuba diving, among other things. The Costa Verde Resort property was owned by a Cuban corporation, the defendant Gaviota S.A. ("Gaviota"), and it was managed by the defendant CRL.
The scuba diving activity was provided and conducted by another Cuban corporation, the defendant Marina Gaviota ("Marina Gaviota"), and its two employees--the defendants Andres Ricardo (the dive boat captain) and Leonardo Ricardo (the scuba diving instructor). …