September 2, 2015
In Legge et al. v. Young et al., the Superior Court of Justice for Ontario determined that although Ontario had jurisdiction simpliciter to hear an action, (a breach of contract action regarding the sale of a Standardbred racehorse) Pennsylvania was the more convenient forum to hear the action and therefore ordered the Ontario proceeding stayed.
In November 2013 the defendant, Mr. Young, purchased a racehorse named Eloquent Diva from the plaintiff at an auction in Harrisburg, Pennsylvania. Eloquent Diva was sold for $67,000.00. The next day, she was shipped to New Jersey where the defendant’s horses were trained. The following week it was discovered that Eloquent Diva had a heart defect. The defendant offered to return the racehorse to the plaintiff, however, that offer was not responded to. In April 2014, the plaintiff commenced the action in Ontario against the defendant for breach of contract. The defendant then brought a motion pursuant to Rules 17.06 and 21.01(3) of the Rules of Civil Procedure staying or dismissing the action on the basis the Ontario court lacked jurisdiction simpliciter over the subject matter of the claim, or in the alternative, that Ontario was not the most convenient forum for the action and that the matter should be heard in Pennsylvania.
On the motion, Justice Faieta determined that Ontario had jurisdiction simpliciter over the defendant. In doing so, His Honour analyzed whether any of the presumptive factors tying the action to Ontario were present, namely: a) was the defendant domiciled or a resident of Ontario?; b) does the defendant carry on business in Ontario?; c) was the tort committed in Ontario?; and d) was a contract connected with the dispute made in Ontario?
It was determined the defendant did carry on business racing Standardbred horses in Ontario. In addition, Justice Faieta pointed to the fact that, despite the defendant’s assertions that the horseracing was merely a hobby, the evidence concluded the activity was pursued for profit and the defendant has raced approximately 3-4 different horses around 20 times in Ontario between 2009 and 2014. The defendant failed to rebut the presumption of jurisdiction.
However, under the second branch of the analysis, Justice Faieta determined that Pennsylvania would be a more appropriate forum for the hearing of the action. In coming to this conclusion, His Honour articulated the test as requiring the alternative forum be clearly more appropriate and that when hearing an application for a stay of proceedings the Court must determine whether a forum exists that is in a better position to dispose fairly and efficiently of the litigation. In exercising the court’s jurisdiction as to whether an alternative forum is more convenient the following factors are often highlighted: 1) the location of where the contract in dispute was signed; 2) the applicable law of the contract; 3) the location of witnesses, especially key witnesses; 4) the location where the bulk of the evidence will come from; 5) the jurisdiction in which the factual matters arose; 6) the residence or place of business of the parties; and 7) the laws of legitimate juridical advantage. It should be noted these factors are not exhaustive, although in practice they are the factors most typically considered.
To that end, the laws of Pennsylvania would govern the contract; the bulk of the evidence and documents would come from Pennsylvania; factual matters arose in Pennsylvania, and the parties would have reasonably expected a lawsuit to have been commenced in Pennsylvania. Justice Faieta determined: “It is my view that a court in Pennsylvania is clearly in a better position than a court in Ontario to dispose of this litigation fairly and efficiently.”
As a result, in any case where the issue may arise, counsel must speak with their clients before making a determination as to which jurisdiction an action should be commenced. Not only is it expensive to commence the action in the wrong jurisdiction but it will also delay the matter significantly. For example, this proceeding was commenced in April 2014 and the motion to stay decision was not released until March 10, 2015. As a result, the plaintiff lost almost an entire year. The plaintiff also had to pay costs to the defendants along with whatever amount the plaintiff had to pay her own counsel. It is therefore imperative that litigants consult with knowledgeable and experienced cross-border counsel before making a determination as to the correct jurisdiction for commencing an action.