Choice of Court Agreements in Common Law Canada

Canada is comprised of ten provinces and three federal territories. Of the ten provinces, nine are usually referred to as “common law provinces” while one, Québec, is referred to as a “civil law” jurisdiction. This classification is apposite mainly for private law, whereas public law, as well as judicial and procedural law, essentially follows the common law tradition in all provinces. However, given that procedural law is within provincial legislative competence, there is not necessarily uniformity across provinces in these fields. Most notably, the jurisdictional aspects of private international law, many of which directly implicate choice of court agreements, are subject to three different approaches across the country: Québec has a comprehensive, and distinct, codification of these rules (see in this volume, Sabourin and Guillemard, “Les Clauses d’élection de For Facultatives en Droit International Privé Québécois”), British Columbia, Saskatchewan and Nova Scotia have adopted legislation on international jurisdiction, and the other provinces, including Ontario, continue to rely on court decisions in the absence of statutory sources. As a result, even as between the Canadian common law provinces, there is potential for differential treatment of choice of court agreements, although in fact there is significant uniformity, for reasons explained further in the text.

For a detailed examination of choice of court agreements across Canada, see Saumier and Bagg (2013).

Douez v Facebook Inc., 2017 SCC 33. The other relevant Supreme Court of Canada case is Z.I. Pompey Industrie v ECU-Line N.V., 2003 SCC 27. All cases and legislation mentioned in this report are available online, free of charge, at www.​canlii.​org.

The Court Jurisdiction and Proceedings Transfer Act, developed as uniform legislation by the Uniform Law Conference of Canada, is in force in British Columbia (SBC 2003, c 28), Saskatchewan (SS 1997, c C-41.1) and Nova Scotia (SNS 2003 (2d Sess), c 2). The relevant section dealing with choice of court agreements (s. 3 in BC and s. 4 in NS and Sask) states: A court has territorial competence in a proceeding that is brought against a person only if (a) that person is the plaintiff in another proceeding in the court to which the proceeding in question is a counterclaim, (b) during the course of the proceeding that person submits to the court’s jurisdiction, (c) there is an agreement between the plaintiff and that person to the effect that the court has jurisdiction in the proceeding, (d) that person is ordinarily resident in [the Province] at the time of the commencement of the proceeding, or (e) there is a real and substantial connection between [the Province] and the facts on which the proceeding against that person is based.

Marine Liability Act, Statutes of Canada 2001, chapter 6, Part 5 on Liability for Carriage of Goods by Water, s. 46 (1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where (a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada; (b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or (c) the contract was made in Canada. (2) Notwithstanding subsection (1), the parties to a contract referred to in that subsection may, after a claim arises under the contract, designate by agreement the place where the claimant may institute judicial or arbitral proceedings. While this provision preserves the jurisdiction of Canadian courts despite an otherwise valid forum selection clause, this does not exclude a motion to stay based on forum non conveniens. See Magic Sportswear Corp. v. Mathilde Maersk (The), 2006 FCA 284 (stay granted), Mazda Canada Inc. v. Cougar Ace (The), 2008 FCA 219 (stay granted).

Statutes of Ontario 2002, chapter 30, Schedule A, sections 7-8, of which the relevant portions are as follows: 7(1)The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary. (2) Without limiting the generality of subsection (1), any term or acknowledgment in a consumer agreement or a related agreement that requires or has the effect of requiring that disputes arising out of the consumer agreement be submitted to arbitration is invalid insofar as it prevents a consumer from exercising a right to commence an action in the Superior Court of Justice given under this Act. 8(1) A consumer may commence a proceeding on behalf of members of a class under the Class Proceedings Act, 1992 or may become a member of a class in such a proceeding in respect of a dispute arising out of a consumer agreement despite any term or acknowledgment in the consumer agreement or a related agreement that purports to prevent or has the effect of preventing the consumer from commencing or becoming a member of a class proceeding.

For a discussion of the decision on this point, see Saumier (2018), pp. 153–155.

See Oppong and Gibbs (2017), pp. 400–402 and, for example, 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354.

See Hall (2012), pp. 237–238; Oppong and Gibbs (2017), pp. 403–406. For a thorough review of the case law in different Canadian common law provinces, see 3289444 Nova Scotia Ltd. v. RW Armstrong & Associates Inc., 2016 NSSC 330 at paragraphs 42–66. While that portion of the reasons is instructive, the overall judgment is weakened by the description of an arbitration clause as a forum selection clause; this conflation is surprisingly also evident in Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771.

Hague Convention of 30 June 2005 on Choice of Court Agreements, 30 June 2005, Hague Conference on Private International Law (entered into force 1 October 2015), online: www.​hcch.​net/​en/​instruments/​conventions/​full-text/​?​cid=​98.

Z.I. Pompey Industrie, 2003 SCC 27, para 19 quoting from The “Eleftheria” [1969] 1 Lloyd’s Rep. 237 at p. 242.

Douez v Facebook 2017 SCC 33, para 34. See also Momentous.ca Corp. v. Canadian American Association of Professional Baseball Ltd., 2012 SCC 9, where the Supreme Court referred only to Pompey whereas the Ontario Court of Appeal had based its reasons (2010 ONCA 722) on the revised criteria in Expedition Helicopters.

The lack of a plurality on this point should restrict its precedential value although recent trial decisions appear to be treating it as authoritative. See for example, Cain v Pfizer, 2018 ONSC 297, Nowak, 2018 BCSC 785, Heller v Huber, 2018 ONSC 718.

In ZI Pompey, the court appeared to support an undifferentiated approach to clauses in contracts of adhesion, which would include consumer contracts, by referring with approval to the notorious US Supreme Court decision in Carnival Cruise Lines Inc v Shute 499 US 585 (1991) that enforced such a clause (para 28).

For a case that considered Douez but still enforced a choice of court agreement in a consumer case, see Northcott v Cornerstone United Inc., 2017 ABPC 201 (Alberta Provincial Court). For a case discussing Douez in relation to an employment contract, see Nowak v Biocomposites Inc., 2018 BCSC 785.

See Cain v Pfizer, 2018 ONSC 297, Nowak, 2018 BCSC 785, Heller v Huber, 2018 ONSC 718.

See for example Forbes Energy Group Inc. v. Parsian Energy Rad Gas, 2018 ONSC 5103, where the court assesses the clause designating a foreign court first under the strong cause test and then, subsequently, having found the absence of strong cause, under the forum non conveniens test, before granting a stay. In Corrosion Service Company Limited v. Hydrosphere Construction Inc., 2018 ONSC 4434, with respect to an agreement designating the forum, the court held first that there was no strong cause not to enforce but then sent the parties to Québec, on the basis that it was the more appropriate forum under a forum non conveniens analysis. In 3289444 Nova Scotia Limited v R.W. Armstrong & Associates Inc., the trial court, deciding prior to Douez v Facebook, gave a rather clear judgment distinguishing between exclusive and optional clauses and applying the forum non conveniens analysis to the latter under the CJPTA (2016 NSSC 330); on appeal, after Douez v Facebook, though upholding the lower court’s stay order, the decision proceeds on a much more confusing appraisal of the applicable rules (2018 NSCA 26).

This is despite the fact that in Douez v Facebook, the Supreme Court suggested that the CJPTA does not deal with choice of court agreements, leaving these to be assessed under the common law rules. For a discussion, see Saumier (2018). The section dealing with stays in the CJPTA (s. 11 in BC, s. 12 in NS and s. 10 in Sask) states: Court may decline territorial competence (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding. (2) A court, in deciding the question of whether it or a court outside [the Province] is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including (a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum, (b) the law to be applied to issues in the proceeding, (c) the desirability of avoiding multiplicity of legal proceedings, (d) the desirability of avoiding conflicting decisions in different courts, (e) the enforcement of an eventual judgment, and (f) the fair and efficient working of the Canadian legal system as a whole. The Supreme Court held that this provision was a complete codification of the forum non conveniens doctrine (Teck Cominco Metals Ltd. v. Lloyd’s Underwriters, 2009 SCC 11).

Mackie Research Capital Corporation v. Mackie, 2012 ONSC 3890 and Terracap Investments Inc. v Credit Capital Immobilliari, S.A., 2016 ONSC 4618.

See Sugar v. Megawheels Technologies Inc., 2006 CanLII 37880 at para 28; Silveira v. FY International Auditing & Consulting Corp., 2015 ONSC 338.

See for example, Meta4Hand Inc v Research In Motion, 2017 ABQB 23; 2Source Manufacturing Inc. v. United Technologies Corporation, 2017 ONSC 4409.

See for example Oppong and Gibbs (2017).

For a discussion, see Saumier (2018).