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CCCA_V4No3_Col-McCarthys-V2.qxd:CCCA_V1No2_Col-Litigat-V1.qxd 9/2/10 1:02 PM Page 42 Legal Update – McCarthy Tétrault LLP Is there new hope for clarity on conflict? he Ontario Court of Appeal recently to a trust in Ontario, proceedings related to judgment based on the defendants’argument Tdecided two cases regarding conflict of encumbrances of real and personal property that they were denied a “meaningful oppor- laws — one on the test for the assumption in Ontario,contract claims where the contract tunity to be heard.” In so doing, the motions of jurisdiction, the other on the enforce- was made in Ontario, the contract provides judge appeared to suggest that in addition to ment of foreign judgments.Both purport to that it is governed by or interpreted in accor- the three traditional bases to avoid enforce- provide clarity that will reduce unnecessary dance with the laws of Ontario, the parties ment of a foreign judgment in Ontario (i.e., litigation over these issues. have agreed that the courts have jurisdiction lack of jurisdiction of the court that granted or the breach has been committed in Ontario, the judgment, denial of natural justice, and Jurisdiction claims for torts committed in Ontario,injunc- public policy), there was a fourth basis that In Van Breda v.Village Resorts Limited, a five- tion proceedings to restrain actions in Ontario was distinct from a denial of natural justice member panel of the Ontario Court of or affected property in Ontario and claims While the SCC, in Beals v. Saldanha Appeal considered whether the Ontario against a person carrying on business in [2003], had stated that the bases for refusing courts have jurisdiction over personal injury Ontario (Rules 17.02(a)-(g), Rules of Civil to enforce a foreign judgment were not claims by Ontario residents arising from Procedure, RR.O. 1990, Reg. 194). closed, any additional bases were to be nar- alleged torts committed outside of Ontario It remains to be seen whether the row in scope and raise issues not already (i.e.Cuba).The Ontario Court ofAppeal had Ontario Court of Appeal’s desire to provide addressed in the recognized categories. already provided guidance on this conflict of for greater order and predictability will be The Ontario Court of Appeal rejected a laws issue in Muscutt v. Courcelles [2002]. realized. Given that the presumption is a distinct basis for refusing to enforce a foreign However, the Muscutt test, developed to rebuttable one, it remains open to defen- judgment based on a lack of a meaningful allow for some flexibility,appeared to be neg- dants to challenge the courts’ jurisdiction. opportunity to be heard because such a con- atively impacting on order and predictability The Ontario Court of Appeal has also indi- cern must be encompassed in the concept of — the jurisdiction of the Ontario Courts was cated that the courts have the discretion to a denial natural justice. Thus, for the time being frequently challenged,and the Ontario assume jurisdiction even in the absence of a being,only the three bases remain.The court Court of Appeal was concerned about these real and substantial connection if there is no also enforced the permanent injunction, early and potentially costly challenges. other forum where the plaintiff can reason- relying on the SCC’s analysis in Pro Swing Consequently, the Ontario Court of ably seek relief. Stay tuned for the Supreme Inc. v. Elta Golf Inc. [2006], which suggests Appeal modified the Muscutt test to reflect the Court of Canada’s final word on these issues. that in deciding whether to enforce an principles set out in the Uniform Law Leave to appeal was granted on July 8,2010. injunction, the court should consider Conference of Canada Model Court Jurisdiction whether the terms are clear and specific, and Proceedings Transfer Act (CJPTA). Rather Foreign Judgments whether the injunction is limited in scope, than requiring the plaintiff to demonstrate In a related area,the Ontario Court ofAppeal whether the court retains the power to make that the Ontario courts have jurisdiction over recently ruled on the enforceability of foreign further orders, and whether the injunction the plaintiff’s claim, assuming the case falls judgments by Ontario Courts. In United places a burden on the Canadian courts. into the categories for service ex juris set out States of America v.Yemec [2010], the Ontario Time will tell whether the Ontario in Rule 17.02 of the Rules of Civil Procedure Court of Appeal considered whether it Court of Appeal’s attempts to clarify two (save for 17.02(h), damages sustained in should enforce a $19-million judgment and issues in the complex area of conflict of laws Ontario and (o) — necessary and proper par- permanent injunction granted by Illinois will be successful. ties), there is a rebuttable presumption that the District Court JudgeAmy St.Eve (of Conrad Ontario courts have jurisdiction over claims Black fame).The judgment arose in the con- Erica J. Baron is a partner in McCarthyTétrault's involving property in Ontario, estates and text of cross-border selling of lottery tickets Litigation Group inToronto. Her general litigation trust proceedings where there is real property by Ontario residents and businesses. practice focuses on complex commercial disputes, in Ontario, the deceased person resided in The motions judge first refused to grant a medical malpractice defence and estates and trusts Ontario or there is personal property subject motion for summary judgment enforcing the litigation. (ebaron@mccarthy.ca) 42 CCCA Canadian Corporate Counsel Association FALL 2010