Very Real and Very Substantial: The Supreme Court of Canada Reformulates the Common Law Test for Assumption of Jurisdiction in Club Resorts Ltd. v. Van Breda
On April 18, 2012, the Supreme Court of Canada released its long-awaited decision in Club Resorts Ltd. v. Van Breda1 concerning the applicable principles for the assumption of jurisdiction (i.e., jurisdiction simpliciter) by Canadian common law courts over disputes in an international or interprovincial context.
Van Breda is the culmination of two decades of conflicting case law following the Supreme Court’s seminal Morguard2 decision. In Morguard, the Court held that questions of jurisdiction had to be resolved in light of the principles of "order and fairness," the necessity for "jurisdictional restraint" and the existence of a "real and substantial connection" between the subject matter of the dispute or the defendant and the forum. In the wake of Morguard, courts struggled with the status and substance of the "real and substantial connection" test. In 2002, the Ontario Court of Appeal attempted to give it content in Muscutt3 by identifying factors that could be considered relevant. In Van Breda, the Court reformulates the "Muscutt test" with a view to restoring greater certainty and predictability in the context of growing jurisdictional dilemmas. The Court reiterates that the assumption of jurisdiction requires a significant nexus between the subject matter of the litigation or the defendant and the forum and cautions against the creation of a universal jurisdiction for certain tort claims.
This articles is reproduced with permission of the publisher from the Commercial Litigation and Arbitration Review, Vol. 1, No. 3, August 2012.