2249659 Ontario Ltd. et al. v. Sparkasse Siegen et al., 2013 ONCA 354

• Judge: Doherty, Laskin and Blair, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 31, 2013
• Jurisdiction: Ontario
• Citations: 2013 ONCA 354;(2013), 306 O.A.C. 288 (CA)

2249659 Ont. v. Sparkasse Siegen (2013), 306 O.A.C. 288 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MY.037

2249659 Ontario Ltd. and Rohwedder Canada Inc. (plaintiffs/appellants) v. Sparkasse Siegen and Thomas Magnete GmbH (defendants/respondents)

(C55836; 2013 ONCA 354)

Indexed As: 2249659 Ontario Ltd. et al. v. Sparkasse Siegen et al.

Ontario Court of Appeal

Doherty, Laskin and Blair, JJ.A.

May 31, 2013.

Summary:

The Ontario plaintiffs sued the German defendants for breach of contract and negligent misrepresentation. The defendants challenged the jurisdiction of the Ontario courts, relying on the choice of forum provisions (Germany) in the purchase orders in issue.

The Ontario Superior Court, in a judgment reported [2012] O.T.C. Uned. 3128, held that the Ontario courts did not have jurisdiction simpliciter and the choice of forum provisions applied to render Ontario forum non conveniens. The plaintiffs' claims were dismissed without a hearing on the merits. The plaintiffs appealed.

The Ontario Court of Appeal allowed the appeal. Ontario courts had jurisdiction simpliciter, the choice of forum provisions did not apply, and Ontario was a forum conveniens.

Conflict of Laws - Topic 603

Jurisdiction - General principles - Jurisdiction simpliciter - An Ontario company (RCI) manufactured automated assembly lines - A German company (TMG) contracted with a Chrysler supplier to manufacture, in Ontario, solenoids to use in Chrysler transmissions - TMG contracted with RCI to manufacture and install an assembly line for TMG's Ontario plant - The purchase order purportedly contained a choice of forum clause (Germany) - TMG incorporated a subsidiary (TMC), which it wished to substitute for itself - RCI refused the substitution (TMC had no assets, leading to a danger of non-payment), unless TMG and its bank (defendant Sparkasse Siegen) provided written assurances that they would pay any amount owing to RCI if TMC was unable to pay - Written assurances guaranteeing payment were provided - A second purchase order substituted TMC for TMG - RCI supplied the assembly line - The Chrysler supplier went bankrupt - TMG wound up TMC - Monies remained owing to RCI - The plaintiffs (RCI and its parent company) sued the defendants (TMG and the bank) in contract and for negligent misrepresentation based on the written assurance, not the purchase orders - The defendants challenged the jurisdiction of the Ontario courts, relying in the purported choice of law provision in the purchase orders - The Ontario Court of Appeal held that Ontario courts had jurisdiction simpliciter based on three presumptive connecting factors - The alleged breach of contract and negligent misrepresentation both occurred in Ontario and there was a "formidable argument that TMG was carrying on business in Ontario" - Assuming that the purchase orders named Germany as the forum of choice, the clauses did not apply to the claims based on the written assurances (distinct obligations not arising from the purchase orders) - Finally, the defendants had the burden of establishing that Ontario was a forum non conveniens - Although the defendants demonstrated that Germany was a forum conveniens, they failed to demonstrate that Ontario was not also a forum conveniens (i.e, that German courts were in a better position to fairly and efficiently dispose of the claim) - Accordingly, the Ontario claims should not have been stayed on the basis of forum non conveniens - See paragraphs 1 to 59.

Conflict of Laws - Topic 603

Jurisdiction - General principles - Jurisdiction simpliciter - Ontario plaintiffs sued German defendants in Ontario for breach of contract and negligent misrepresentation - The Ontario Court of Appeal held that a choice of forum clause (Germany) could not deprive Ontario of jurisdiction simpliciter - A forum selection clause was relevant to whether Ontario should exercise jurisdiction, but not whether it had jurisdiction - Further, "where a defendant seeks an order dismissing a claim for want of jurisdiction, the adequacy of the pleadings must be assessed in the context of that challenge. A jurisdictional motion is not the time or place to consider the adequacy of the pleadings for the purpose of a trial. That is the function of a rule 21.01(1)(b) motion." - See paragraphs 25, 27.

Conflict of Laws - Topic 7284

Contracts - Jurisdiction - Forum conveniens - [See first Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 7286

Contracts - Jurisdiction - Choice of forum by parties - The Ontario Court of Appeal stated that "forum selection clauses in an agreement between parties, particularly sophisticated commercial parties, will normally be enforced by Ontario courts. A plaintiff who seeks to litigate in Ontario, having agreed that the dispute would be litigated in another forum, carries a heavy burden and must show a 'strong cause' for departing from the terms of the agreement. ... The requirement that the plaintiff show 'strong cause' for litigating in a forum other than the forum agreed upon presumes that there is an agreement that contains a clear forum selection clause, and that the forum selection clause, by its terms, applies to the litigation that the plaintiff seeks to bring in Ontario" - See paragraphs 39, 41.

Conflict of Laws - Topic 7286

Contracts - Jurisdiction - Choice of forum by parties - [See first Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 7601

Torts - Jurisdiction - Forum conveniens - [See first Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 7608

Torts - Jurisdiction - Choice of forum by parties - [See first Conflict of Laws - Topic 603 ].

Contracts - Topic 1351

Formation of contract - Place of making - The Ontario Court of Appeal stated that "as a general rule, a contract is made where the offeror ... receives notification of the offerees' ... acceptance of the offer" - See paragraph 33.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - The Ontario Court of Appeal stated that "the tort of negligent misrepresentation occurs where the misinformation is received or acted upon" - See paragraph 31.

Cases Noticed:

Club Resorts Ltd. v. Van Breda - see Van Breda et al. v. Village Resorts Ltd.

Van Breda et al. v. Village Resorts Ltd., [2012] 1 S.C.R. 572; 429 N.R. 217; 2012 SCC 17, refd to. [para. 22].

Momentous.ca Corp. et al. v. Canadian American Association of Professional Baseball Ltd. et al. (2010), 270 O.A.C. 36; 103 O.R.(3d) 467; 2010 ONCA 722, affd. [2012] 1 S.C.R. 359; 428 N.R. 141; 290 O.A.C. 202; 2012 SCC 9, refd to. [para. 25].

Cannon v. Funds for Canada Foundation et al., [2010] O.T.C. Uned. 4517; 2010 ONSC 4517, refd to. [para. 31].

Eastern Power Ltd. v. Azienda Communale Energia and Ambiente (1999), 125 O.A.C. 54; 178 D.L.R.(4th) 409 (C.A.), refd to. [para. 33].

Stubbs v. ATS Applied Tech Systems Inc. et al. (2010), 272 O.A.C. 386; 2010 ONCA 879, refd to. [para. 35].

Pompey (Z.I.) Industrie et al. v. Ecu-Line N.V. et al., [2003] 1 S.C.R. 450; 303 N.R. 201; 2003 SCC 27, refd to. [para. 39].

Expedition Helicopters Inc. v. Honeywell Inc. (2010), 262 O.A.C. 195; 100 O.R.(3d) 241; 2010 ONCA 351, refd to. [para. 39].

Loat v. Howarth et al. (2011), 282 O.A.C. 264; 338 D.L.R.(4th) 644; 2011 ONCA 509, refd to. [para. 41].

Matrix Integrated Solutions Ltd. v. Naccarato et al. (2009), 252 O.A.C. 222; 97 O.R.(3d) 693 (C.A.), refd to. [para. 41].

Counsel:

Jonathan Lisus and James Renihan, for the appellants;

Evan L. Tingley, for the respondent, Sparkasse Siegen;

P.A. Neena Gupta, for the respondent, Thomas Magnete GmbH.

This appeal was heard on January 16, 2013, before Doherty, Laskin and Blair, JJ.A., of the Ontario Court of Appeal.

On May 31, 2013, Doherty, J.A., released the following judgment for the Court of Appeal.