TORONTO--(EON: Enhanced Online News)--In a precedent-setting decision released today, the Supreme Court of Canada has clarified the circumstances under which Canadian courts can assume jurisdiction over foreign defendants. The decision was made in the case of Club Resorts Ltd. v. Van Breda.
“The Supreme Court of Canada clarified the circumstances in which foreign companies can be exposed to Canadian lawsuits and pulled into Canadian court proceedings”
“The Supreme Court of Canada clarified the circumstances in which foreign companies can be exposed to Canadian lawsuits and pulled into Canadian court proceedings,” said Ira Nishisato, National Leader of the Commercial Litigation Group at Borden Ladner Gervais LLP. “This gives U.S. businesses with ties to Canada a greater sense of their risks and exposure when dealing with Canadian parties.”
The Club Resorts Ltd. v. Van Breda case stems from an injury sustained by Van Breda while staying at a resort operated by Club Resorts Ltd. in Cuba. Van Breda commenced an action in Ontario against Club Resorts Ltd., along with several other defendants, for damages related to her injury. Club Resorts sought to block the proceeding, arguing that the Ontario, Canada courts lacked jurisdiction and that a Cuban court would be a more appropriate forum using the doctrine of forum non coveniens. The motion judge held that Ontario should assume jurisdiction, and this decision was supported by the Ontario Court of Appeal.
The Supreme Court of Canada recognized that the rules for jurisdiction "cannot be an unstable, ad hoc system made up on the fly on a case-by-case basis," and narrowed some of the categories previously adopted by Canadian courts to assume jurisdiction over foreign defendants. For example, active advertising in a jurisdiction, or the fact that a web site can be accessed from a jurisdiction, would not be sufficient in themselves to establish jurisdiction, and a "real and substantive connection" must be established on the facts.
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