OCA to Apply the Test for Jurisdiction...Again
The Ontario Court of Appeal will have an opportunity to apply - and possibly reconsider - the test for jurisdiction yet again in an upcoming appeal from a decision of Justice Perell.
In Bond v. Brookfield Asset Management Inc., Justice Perell stayed a class action brought by a representative plaintiff, named Wanda Bond, an "Internet blogger and shareholder advocate". Ms. Bond seeks to represent primary and secondary purchasers of shares in an Alberta mining company called Birch Mountain between April 1, 2005 and November 5, 2008. The essence of Ms. Bond's claim is that the defendant Tricap and its parent, Brookfield, orchestrated proceedings in Alberta so as to force Birch Mountain into receivership resulting in a decline in its shares. Tricap had lent Birch Mountain money and Birch Mountain had defaulted on its loan.
Tricap and Brookfield successfully moved to stay the action in favour of Alberta. The outcome of the motion was not surprising. The claim was based on oppression under the Ontario Business Corporations Act. Birch Mountain was an Alberta company, all of the events at issue took place in Alberta, the critical event involved a court order made in Alberta pursuant to a loan agreement governed by Alberta law, and the assets of the company were sold under receivership pursuant to an order of an Alberta Court.
While the application of the test for jurisdiction was not surprising, Justice Perell's articulation of it is noteworthy. He stated that the recent test in Van Breda "modestly simplified" the previous 8-factor test in Muscutt v. Courcelles. Following Van Breda, Justice Perell applied the presumptions based on the rules for service out of the province, but then analyzed various factors relevant to determining whether there was a real and substantial connection by "[p]utting the matter of any presumptions aside".
Bond indicates that the reformulation of the "real and substantial connection" test for assumed jurisdiction has undergone little change, despite the Court of Appeal's recent ruling in Van Breda, which was intended to simplify the Muscutt test. Little heed is being paid to the categorical approach advocated in Van Breda and trial courts continue to mechanically recite and apply the 8-factors set out in Muscutt. It will be interesting to see if the Supreme Court of Canada will make a less "modest' change to the test for assumed jurisdiction in Ontario.
Bond v. Brookfield Asset Management Inc.
Ontario Court of Appeal Docket Number: C53770
Hearing Date: November 16, 2011
jurisdiction test Ontario Court of Appeal stay class action