August 25, 2015
In Legge et al. v. Young et al., Justice Faieta determined that, although Ontario had jurisdiction simpliciter to hear a breach of contract action regarding the sale of a Standardbred racehorse Pennsylvania was the more convenient forum to hear the action and therefore the Ontario proceeding was 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 purchased for $67,000.00. The next day, she was shipped to New Jersey where the defendant had a horse training facility The following week, it was discovered through veterinarian investigation that Eloquent Diva had a heart defect. The defendant contacted the plaintiff in an attempt to return the racehorse to the plaintiff, however, the plaintiff did not respond.
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 Rule 17.06 and 21.01(3) of the Rules of Civil Procedure staying or dismissing the action on the basis that the court lacked jurisdiction simpliciter or in the alternative, and that Ontario was not the most convenient forum for the action and that the matter should be heard in Pennsylvania.
Justice Faieta determined that Ontario had jurisdiction simpliciter over the defendant. He first analyzed whether any of the presumptive factors tying the action in Ontario were present, being: 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 that the defendant did carry on business racing Standardbred horses in Ontario. Justice Faieta pointed to the fact that, despite the defendant’s assertions that the horseracing was merely a hobby, the evidence concluded that the activity was pursued for a profit and the defendant has raced 3-4 different horses approximately 20 times during the period of 2009 – 2014 in Ontario. 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. Coming to this conclusion, he concluded the alternative forum must be clearly more appropriate; it is not a matter of flipping a coin. The 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. 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 ones typically considered.
The laws of Pennsylvania would govern the contract. The bulk of the evidence and documents would come from Pennsylvania. Factual matters arose in Pennsylvania. The parties would have reasonably expected a law suit to have been commenced in Pennsylvania. Justice Faita determined that “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.
It is imperative that counsel think long and hard with their clients before making a determination as to which jurisdiction an action could be commenced in. Not only is it expensive to commence the action in the wrong jurisdiction but it will also delay matters significantly. For example, this proceeding was commenced in April 2014. The motion to stay decision was not released until March 10, 2015. As a result, the action was delayed for nearly an entire year. Also, the plaintiff was ordered to pay costs to the defendant in the amount of $14,321.61 together with an undisclosed amount to her own counsel for legal fees. It is imperative that litigants consult with knowledgeable and experienced cross-border counsel before making a determination on which jurisdiction to proceed in.