Order in the Court? The Van Breda Trilogy - Part III - Forum Non Conveniens
Among the significant changes introduced by the Van Breda Trilogy is guidance from the Supreme Court of Canada on the forum non conveniens test. Although in many respects the judgments in Van Breda, Black and Éditions Écosociété would appear to simply reaffirm the existing forum law, LeBel J.’s judgments are notable for three reasons. First, the language in the Trilogy suggests that motion courts will continue to be given considerable discretion in decisions on forum non conveniens and that reviewing courts will not have a clear framework with which to assess the propriety of decisions at first instance. The Court did not seize the opportunity to impose greater structure on the analysis of forum claims, instead emphasizing the highly contextual nature of the inquiry. Second, LeBel J.’s assessment of questions of choice of law (which will be addressed more fully in Part IV of our series) seems to consider the law determined by the choice of law rules of the domestic court, and ignores an analysis of the law that would apply if the action were stayed in favour of the foreign court. Third, LeBel J. suggests that the traditional concern for juridical advantage and disadvantage may be a less important factor in the forum analysis, not only within Canada but also in foreign jurisdictions if they have a similar legal system and values.
In other ways, the Court has reinforced the existing law. For instance, LeBel J. reiterated that forum non conveniens is distinct from jurisdiction simpliciter and that the two tests must not be conflated. As before, the burden remains on the party resisting jurisdiction to demonstrate that there is a clearly more appropriate forum. LeBel J. stated that the factors relevant to the forum non conveniens inquiry can never be exhaustively listed and vary depending on context. Citing past case law and recent statutory codifications of the doctrine, he reaffirmed many of the factors that had historically been applied, including locations of parties and witnesses, the cost of transferring the case to another jurisdiction or of declining the stay, the impact of a transfer on the conduct of the litigation or on related or parallel proceedings, the possibility of conflicting judgments, problems related to the recognition and enforcement of judgments, the relative strengths of the connections of the parties, and other factors. He also noted that there is no particular list of factors, but that the analysis is always contextual.
Forum Decisions are Discretionary
Both the language in the Van Breda Trilogy judgments and the Supreme Court’s application of the test to the facts of the cases suggests that motion judges will continue to be given broad discretion in determining whether a defendant has or has not successfully resisted jurisdiction on the basis of forum non convienens. Citing the Spiliada and Amchem tests, LeBel J. stated that the defendant must show that the alternative forum is “clearly more appropriate”. Once jurisdiction simpliciter has been established, the court should ordinarily exercise that jurisdiction. The party seeking to depart from the status quo bears the burden of demonstrating that the plaintiff should be denied its choice of forum. The alternative forum must be “clearly more appropriate” and not simply comparable:
The use of the words “clearly” and “exceptionally” should be interpreted as an acknowledgement that the normal state of affairs is that jurisdiction should be exercised once it is properly assumed. The burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternative forum, it would be farier and more efficient to do so and that the plaintiff should be denied the benefits of his or decision to select a forum that is appropriate under the conflicts rules. The court should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation.
As the Court upheld the decisions in favour of Ontario as the appropriate forum, the cases provide little guidance on what might have justified a stay. In each of the Trilogy cases, the Court held that the appellants had failed to meet their burden of demonstrating that the alternative fora were clearly more appropriate. In Van Breda, Cuba was said not to be clearly more appropriate, despite the fact that the accident happened on a Cuban beach, at a hotel managed by a foreign company, the key injury was suffered in Cuba and that many of the defendants resided in Cuba. The Court simply noted that a trial in Cuba would present “challenges” to the plaintiffs and that they would be at a disadvantage if forced to litigate there. Similarly, in Charron, the Court stated that “considerations of fairness to the parties weigh heavily in the respondents’ favour” and asserted, without analysis, that “the inconvenience to the individual plaintiffs of transferring the litigation is greater than the inconvenience to the corporate defendant of not doing so.”
In Black, the Court seemed to acknowledge that most relevant factors favoured Illinois as a more appropriate forum for Lord Black’s six Ontario libel actions, launched against 10 officers and directors of Hollinger International. Most of the evidence was located in the U.S., Hollinger International was headquartered for a time in Illinois, and nine of the eleven parties resided in the U.S., including Black, who at the time was incarcerated in Florida. Furthermore, there were parallel proceedings in Illinois and Delaware by Hollinger International and the “very substance” of those actions was the truth of what was said in the statements alleged to be defamatory by Lord Black. In addition, Lord Black conceded that an Ontario judgment would be unenforceable in the U.S., a factor that pointed in favour of Illinois. However, the Court declined to stay the action, citing fairness considerations and noting that Ontario law would apply to the dispute. LeBel J. agreed with the lower courts’ reasoning that “the balance of fairness favours litigation in Ontario” because it would “be unfair to prevent Lord Black from suing in the community in which his reputation was established, whereas there would be no unfairness to the appellants if the actions were to proceed in Ontario because it would have been reasonably foreseeable to them that posting the impugned statements on the internet and targeting the Canadian media would cause damage to Lord Black’s reputation in Ontario.” However, it is arguable that there was considerable unfairness and inconvenience to the defendants of litigating in Ontario for the very reasons discussed above.
Similarly, in Éditions Écosociété, the Court rejected the argument that Quebec was a clearly more appropriate convenient forum for a defamation action brought by an Ontario company against Quebec publishers, authors, researchers and editors of an allegedly libelous book. The Court held that Ontario law would apply to the dispute and found that, while there were parallel proceedings in Quebec, “the plaintiffs, the facts and the statements relating to each plaintiff are different.” In the end, Quebec could not be said to be a clearly more appropriate forum.
Accordingly, while the language of the forum non conveniens test has not significantly changed as a result of the Van Breda Trilogy, LeBel J.’s reasoning might make courts cautious in declining to exercise jurisdiction in favour of an alternative forum. Given that the test is fact-specific, the lists of factors is open-ended and there is not a priori classification of the relative weight assigned to any factor, parties resisting jurisdiction have little guidance from the Court in identifying what may be necessary to justify a finding that a clearly more appropriate forum exists. Furthermore, since forum non conveniens is discretionary, it will be difficult for appellate courts to give direction on the kinds of circumstances that suggest jurisdiction should be declined. The effect may be that defendants will do everything possible to resist jurisdiction simpliciter by arguing that there is no real and substantial connection.
The Significance of Choice of Law
In each of the Trilogy cases, LeBel J relies heavily on the idea that Ontario law would apply to the disputes to uphold the lower courts’ findings that the alternative fora failed to meet the clearly more appropriate threshold. The inclusion of choice of law considerations in forum non conveniens itself is nothing new; the governing substantive law has long been recognized as a relevant factor under forum non conveniens, usually in the context considering whether there would be a juridical advantage to the parties of litigating in various competing fora. However, LeBel J.’s analysis of this issue is unique in that it declines staying Ontario actions based on the assertion that Ontario law applies to the disputes, without examining what substantive law would be applied in the alternative fora.
In Black and Éditions Écosociété, LeBel J. stated that Ontario law would apply because publication occurred there (or pursuant to a potentially new Canadian choice of law rule based on the place where the most substantial harm to the plaintiff’s reputation occurs). However, a foreign court would apply its own choice of law rules in determining which substantive law applies to the claim.
The failure to consider the foreign court’s choice of law rule is significant. In many cases, Canadian choice of law rules are significantly different than choice of law rules in foreign jurisdictions. For instance, many American courts apply a “most significant contacts” rule to determine the applicable law in defamation claims: see Velle Transcendental Research Ass’n, Inc. v. Esquire, Inc., 354 N.E.2d 622 (Ill. App. 1976). In the case of multistate defamation actions with connections to multiple states, Illinois courts have held that the state whose law should be applied is the state where the person allegedly defamed was domiciled at the time, on the basis that it will tend to have the most significant connection to the damage to plaintiff’s reputation: Snead v. Forbes, Inc., 275 N.E.2d 746 (Ill. App. 1971). On the particular facts of Black, the outcome on the forum non conveniens analysis may not have changed had Illinois choice of law rules been considered. Although Lord Black was incarcerated in Florida on charges of mail fraud at the time, he was (at least previously) domiciled in Ontario and led considerable evidence that the harm to his reputation was closely connected to Ontario. Furthermore, he limited his claim to damages in Ontario and undertook not to commence any other libel actions abroad. Arguably then, an Illinois court would have applied Ontario law to the dispute. (It is therefore ironic that Lord Black argued that “the lack of an actual malice requirement in Canadian defamation law affords him a legitimate juridical advantage” over litigating in Illinois.)
Interestingly, in Éditions Écosociété, the defendants argued that Ontario should have declined jurisdiction on the basis that Quebec was the place of the “most substantial publication”. LeBel J. rejected this argument, noting that the “defamation law of Canada has not adopted the substantial publication standard.” He held that the existing Canadian choice of law rule in defamation provided that the tort crystallized in the jurisdiction(s) where publication (including a single publication or republication) to a third party occurs. However, LeBel J. failed to consider what law a Quebec court would apply. A Quebec court may well have concluded that the proper law of the tort was Quebec law; after all, publication (and arguably the most substantial publication) occurred in Quebec. Accordingly, it is not clear that the applicable law was “that of Ontario and not Quebec”; Ontario law would only apply if the action proceeded in Ontario. Contrary to LeBel J.’s conclusion, therefore, the applicable law did not favour Ontario in the forum non conveniens analysis and was, at best, a neutral factor. Interestingly, LeBel J. concludes that the applicable law “is that of Ontario and not Quebec” but then in the next paragraph suggests that the applicable law in Quebec might be disputed, but does not engage in any analysis of which law would likely be applied.
[i]n considering the question of juridical advantage, a court may be too quick to assume that the proper law naturally flows from the assumption of jurisdiction. However, the governing law of the tort is not necessarily the domestic law of the forum. This may be so in many cases, but not always.
In Black and Éditions Écosociété, LeBel J. fell into his own trap. In many cases, including multi-jurisdiction defamation actions, different choice of law rules in each forum may well lead to different jurisdictions applying different substantive law. It the applicable law to the dispute is going to be used as a factor, then these rules must be considered in order to properly determine whether in fact they can be said to favour one forum over the other.
Loss of Juridical Advantage
The third noteworthy feature of the Trilogy’s approach to forum non conveniens is the suggestion by the Court that a party’s loss of juridical advantage should be afforded limited weight in the forum analysis. The Court seems to suggest that this is the case whether the alternative forum is across provincial or national boundaries, assuming in the latter case that the alternative forum is one that shares “basic values”. This might be read as suggesting that the question of juridical advantage should only be given considerable weight when the nature of the advantage or disadvantage raises issues of fundamental fairness.
In cases of interprovincial forum claims, LeBel J. suggested that the extensive use of juridical advantage in interprovincial claims “might be inconsistent with the spirit and intent of Morguard and Hunt, as the Court sought in those cases to establish comity and a strong attitude of respect in relations between the different provinces, courts and legal systems of Canada.” LeBel J. stated that “[d]ifferences should not be viewed instinctively as signs of disadvantage or inferiority.”
Where the alternative forum is across a national border, LeBel J. stated that loss of juridical advantage “becomes more important” but went on to caution that:
…even then, comity and an attitude of respect for the courts and legal systems of other countries, many of which have the same basic values as us, may be in order. In the end, the court must engage in a contextual analysis, but refrain from leaning too instinctively in favour of its own jurisdiction.
On its face, LeBel J.’s treatment of juridical advantage seems to suggest that courts should be careful not to interpret differences in foreign legal systems as an imposition of an unfair disadvantage. It is not clear what “contextual analysis” the court should engage in, but LeBel J.’s language suggests that the starting point of the analysis should be respect for other courts. He also cautions that an advantage to one party may be a disadvantage to the other, and that motion judges should perhaps be more concerned with fundamental fairness rather than “advantage” and “disadvantage”. Notably, in Black LeBel J., cited Sopinka J.’s comments in Amchem that “[a]ny loss of advantage to the foreign plaintiff must be weighed as against the loss of advantage, if any, to the defendant in the foreign jurisdiction if the action is tried there rather than in the domestic forum”. Accordingly, LeBel J. held that this factor “should not weigh too heavily in the forum non conveniens analysis.”
Importantly, these comments in Black arose in the context of LeBel J.’s identification of a significant difference in the law of defamation in Canada and the United States. He noted that the American requirement for actual malice in defamation:
reflects a deeply rooted and distinctive legal tradition that this Court has declined to adopt…but which comity requires we respect in foreign jurisdictions. Moreover, even if this advantage to Lord Black were taken into account, it would have to be balanced against the corresponding and very significant juridical disadvantage that the appellants would face if the trial were to proceed in Ontario.
This seems to suggest an evolution in LeBel J.’s own views since the time of his dissenting judgment in Beals v. Saldanha, where he advocated the modification of the real and substantial connection test in the context of the enforcement of foreign judgments as opposed to those from within Canadian jurisdictions. In that judgment, his reasoning emphasized the importance of distinguishing between interprovincial and international contexts.
Notwithstanding the Court’s description of the forum test, its actual application of that test in the Trilogy cases suggests some ambiguity about whether the law has meaningfully changed. Notably, despite LeBel J.’s comments on the need for courts to be cautious about overstating the significance of inter-provincial differences, in Éditions Écosociété he nevertheless considers the differences between the law of Ontario and Quebec. He noted, for example, that Ontario would deprive the Quebec defendants of the anti-SLAPP provisions in the Quebec Code of Civil Procedure that provide enhanced protection for freedom of expression and that the defendants would also be better off in Quebec with a shorter limitation period which might bar the claim (presumably, only if the substantive law applicable to the claim was that of Quebec). These factors are both relied on to suggest that “the balance of fairness” would favour the plaintiff’s claim being advanced in Ontario. This weighing exercise seems out of place given LeBel J.’s comments on the importance of comity, particularly within Canada, as well as his comments in Black about respecting differences in substantive law.
Similarly, in Van Breda, LeBel J. followed the lower courts in adopting a rather casual approach to the question of forum non conveniens that in many ways seems to favour the domestic jurisdiction on the basis of little evidence. Although noting that “the evidence is far from clear and satisfactory” that the plaintiffs would “suffer a loss of juridical advantage” in Van Breda, LeBel J. cited some rather speculative reasons for declining to stay the action in favour of Cuba:
… other issues related to fairness to the parties and to the efficient disposition of the claim must be considered. A trial held in Cuba would present serious challenges to the parties. There may be problems with witnesses, concerns about the application of local procedures, and expenses linked to litigating there. All things considered, the burden on the plaintiffs clearly would be far heavier if they were required to bring their action in Cuba. They would face substantial additional expenses and would be at a clear disadvantage relative to the defendants. They might also suffer a loss of juridical advantage.
In many respects, the Court’s approach to forum non conveniens in the Trilogy judgments is contradictory. Unlike the categorical approach taken to jurisdiction simpliciter, the Court emphasizes the highly contextual analysis of forum non conveniens, the open list of relevant factors, and the discretionary nature of the doctrine. This approach fails to give appellate courts any real framework with which they can review motion decisions. Furthermore, while the Court in several passages implores motion judges to show greater respect for courts in other jurisdictions – even where there are differences in substantive law – the Court’s approach to choice of law and to the nature of the defendant’s burden on the motion seems to suggest a natural predilection to the plaintiff’s choice of forum.
alternative fora choice of law foreign jurisdiction forum non conveniens jurisdiction simpliciter Lord Black Van Breda Trilogy