Noble et al. v. Carnival Corporation et al.
[Indexed as: Noble v. Carnival Corp.]
80 O.R. (3d) 392
Ontario Superior Court of Justice,
Sachs J.
April 12, 2006
Conflict of laws — Choice of forum — Ontario-resident plaintiff injured in motor vehicle accident in Russia in course of her employment — Plaintiff suing her employer and others in Ontario — Employment contract containing forum selection clause naming England as forum for “any dispute or claims arising under this Agreement” — Tort claims not clearly arising under agreement — Defendants’ motion to stay action dismissed.
Conflict of laws — Forum conveniens — Ontario-resident plaintiff injured in motor vehicle accident in Russia in course of her employment — Plaintiff suing her employer and others in Ontario — Defendants foreign corporations without offices or assets in Ontario — Ontario held forum conveniens. [page393]
Conflict of laws — Jurisdiction — Real and substantial connection — Ontario-resident plaintiff injured in motor vehicle accident in Russia in course of her employment — Plaintiff suing her employer and others in Ontario
— Defendants foreign corporations without offices or assets in Ontario — Real and substantial connection existing between claim and Ontario — Ontario court having jurisdiction.
The plaintiff, an Ontario resident, was an employee of the defendant S Inc. and was temporarily assigned to work on a ship operated by the defendant C Ltd. She was seriously injured in a motor vehicle accident in the course of her employment while the ship was docked at a Russian port. The plaintiff and her mother commenced an action for damages in Ontario. All of the defendants were foreign corporations and none of them had offices or assets in Ontario. Three of the defendants had head offices in the United States and one had its head office in Hong Kong. The defendants brought a motion to stay the action on the grounds that the plaintiff signed an employment contract that contained a forum selection clause that explicitly established that all claims arising under the contract should be resolved by the courts in England, and that there was no real and substantial connection between the proceedings and Ontario.
Held, the motion should be dismissed.
Any ambiguities in the phrase “dispute or claims arising under this Agreement” in the forum selection clause were to be construed against the employer. It was not clear that any dispute between the parties was governed by the choice of forum clause. Rather, the clause appeared to be limited to disputes arising under the agreement. The agreement did not cover tort claims. The claims in question did not arise “under the agreement”.
There was little, if any, connection between Ontario and the plaintiff’s claim, although the plaintiff had received most of her medical treatment in Ontario and her claim was, among other things, for pain and suffering in Ontario. The defendants had no connection to Ontario in the sense that none of them had offices or assets here. There would be no significant unfairness to the defendants if the Ontario courts assumed jurisdiction. The defendants had no more connection to England
— the jurisdiction they were suggesting — than they did to Ontario. If jurisdiction were refused, the plaintiff would be compelled to litigate in England, which would be difficult for her. There was no reason why the Ontario courts would not recognize the judgment of a foreign court that assumed jurisdiction in the reverse circumstances. The assumption of jurisdiction is more easily justified in inter-provincial than in international cases, and this case was international. Under international standards, it is only in certain limited circumstances that damage sustained within the jurisdiction is accepted as a basis for assumed jurisdiction. Balancing all of these factors, the plaintiff had demonstrated a real and substantial connection to Ontario. Furthermore, Ontario was forum conveniens. Where there is no one forum that is the most appropriate, the domestic forum wins out by default and a stay should be denied.
Cases referred to
Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, [1993] S.C.J. No. 34, 77 B.C.L.R. (2d) 62, 102 D.L.R. (4th) 96, 150 N.R. 321, [1993] 3 W.W.R. 441, 14 C.P.C. (3d) 1; Lemmex v. Bernard (2002), 60 O.R. (3d) 54, [2002] O.J. No. 2131, 213 D.L.R. (4th) 627, 13 C.C.L.T. (3d) 203, 26 C.P.C. (5th) 259 (C.A.); Leufkens v. Alba Tours International Inc. (2002), 60 O.R. (3d) 84, [2002] O.J. No. 2129, 213 D.L.R. (4th) 614, 13 C.C.L.T. (3d) 217, 26 C.P.C. (5th) 247 (C.A.); [page394] Muscutt v. Courcelles (2002), 60 O.R. (3d) 20, [2002] O.J. No. 2128, 213 D.L.R. (4th) 577, 13 C.C.L.T. (3d) 161, 26 C.P.C. (5th) 206 (C.A.), supp. reasons [2002] O.J. No. 2734, 213 D.L.R. (4th) 661, 13 C.C.L.T. (3d) 238, 26 C.P.C. (5th) 203 (C.A.); Sarabia v. Oceanic Mindoro (The), [1996] B.C.J. No. 2154, 26 B.C.L.R. (3d) 143, [1997] 2 W.W.R. 116, 4 C.P.C. (4th) 11 (C.A.) [Leave to appeal to S.C.C. refused [1997] S.C.C.A. No. 69]; Scalas Fashions Ltd. v. Yorkton Securities Inc., [2003] B.C.J. No. 1428, 2003 BCCA 366; Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 60 O.R. (3d) 76, [2002] O.J. No. 2127, 213 D.L.R. (4th) 643, 13 C.C.L.T. (3d) 230, 26 C.P.C. (5th) 239 (C.A.)
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 17.02 [as am.], 17.06(1), 21.01(3)
MOTION for an order staying an action.
Lesley Van Wynsberghe, for plaintiffs, responding parties.
John T. Morin, Q.C. and Beth S. Given, for defendants, moving parties.
SACHS J.: —
Overview
[1] This motion raises the issue of whether the Ontario courts should assume jurisdiction over foreign defendants in a claim for damages sustained by an Ontario resident as a result of an accident that occurred in Russia.
[2] The plaintiff, Robin Noble, was a tour manager with the defendant, Seabourn Cruise Line Limited Inc. In July of 2004, she was temporarily assigned to work on a ship that was operated by Cunard Cruise Line Limited. While the ship was docked at St. Petersburg, Russia, Ms. Noble left the ship to complete a site inspection of St. Petersburg. While on the site inspection, the chauffeur who had been hired to take her around the city lost control of the car and crossed into a lane of oncoming traffic. The vehicle landed in a ditch and Ms. Noble was seriously injured.
[3] Ms. Noble’s claims against the defendants are based on breaches of the duties of care that she alleges they owed her because of her relationship with them, particularly her employment relationship.
[4] Ms. Noble is an Ontario resident who has been treated for her injuries in Ontario. She resides with her mother, Joan Noble. All of the defendants are foreign corporations and none of them have offices or assets in Ontario. Three of the defendants have their head offices in the United States and one has its head office in Hong Kong.
[5] Ms. Noble has brought her action in Ontario. The defendants bring this motion to stay Ms. Noble’s action on two primary bases: [page395]
(1) Ms. Noble signed an employment contract that contained a forum selection clause that explicitly established that all claims arising under the contract would be resolved by the courts in England.
(2)There is no real and substantial connection between the proceedings and the Province of Ontario.
The Forum Selection Clause
[6] Robin Noble had been employed by Seabourn since 2000. In July of 2004, she was temporarily assigned by Seabourn to the vessel, Cunard Coronia. The vessel was operated by Cunard Cruise Line Limited. After she boarded the vessel she was asked to sign, and did sign, an agreement setting out the terms of her employment with Cunard Celtic Hotel Services Limited (the “Agreement”). Paragraph 12 of the Agreement provided as follows:
The parties to this Agreement agree that any dispute or claims arising under this Agreement shall be brought before the courts in England and governed by the laws of the Flag State, regardless of any other legal remedies which may be available.
The ship in question was registered in England. As such, the Flag State of the ship was England.
[7] The first issue that I must address is whether clause 12 of the Agreement was intended to cover the tort claims brought by the plaintiffs. In this regard, counsel for the defendants conceded that the Agreement does not specifically advert to these claims, other than to provide for the refunding of certain medical care expenses. Rather, he submitted that the wording in clause 12 of the Agreement was similar to the wording in other forum selection clauses that were held to encompass tort claims.
[8] In Sarabia v. Oceanic Mindoro (The), [1996] B.C.J. No. 2154, [1997] 2 W.W.R. 116 (C.A.), the British Columbia Court of Appeal examined a forum selection clause in an employment agreement and held that it did cover tort claims. However, in that case, the clause provided for the foreign body to have “original and exclusive jurisdiction over any and all disputes or controversies arising out of or by virtue of this Contract” [at para. 3]. The court found that the “words ‘arising out of’ have been interpreted generously to include non-contractual claims when they are found in a choice of forum clause in an international contract” (para. 25). In the case before me, clause 12 does not use this phrase. Rather, it specifically refers to disputes “arising under this Agreement”. Furthermore, unlike in Sarabia, the Agreement does not contain a clause providing for a scheme of compensation in the case of disability caused by injury or [page396] illness suffered during the term of employment. In other words, the Agreement in question does not cover tort claims and, therefore, these claims do not arise “under the Agreement”.
[9] In Scalas Fashions Ltd. v. Yorkton Securities Inc., [2003] B.C.J. No. 1428, 2003 BCCA 366, the British Columbia Court of Appeal determined that the forum selection clause in a contract applied to causes of action in tort. In that case, the contract was a standard form investment account agreement that contained the following forum selection clause [at para. 5]:
Any disputes arising between Yorkton and the Client shall be exclusively within the jurisdiction of the Courts of the Province in which Yorkton accepts this agreement.
[10] The court found that the plain and ordinary meaning of the clause was that “any dispute” between the parties would be within the exclusive jurisdiction of the province where Yorkton signed the agreement. They also found that there was no reason not to give effect to this plain and ordinary meaning since the duty of care in tort owed to the plaintiff arose from the contractual relationship between the parties created by the agreement containing the forum selection clause.
[11] In the case before me, the plain and ordinary meaning is not clear that “any dispute” between the parties is governed by the choice of forum clause. Rather, the clause appears to be limited to disputes “arising under the Agreement”.
[12] In this regard, it is of significance that the Agreement containing the forum selection clause was drafted by Cunard and presented to Ms. Noble after she had boarded the ship to assume her duties. Employer-employee relationships are ones where there is an inherent inequality of bargaining power and, in this case, there was nothing to suggest that Ms. Noble was given the opportunity to review or bargain over the choice of forum clause. Given these realities, any ambiguities in the clause should be construed against the employer.
Real and Substantial Connection
[13] Rule 17.06(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 entitles a party to seek an order setting aside service outside of Ontario and an order staying the proceedings if the service is not authorized by rule 17.02. Rule 21.01(3)
(a) entitles a defendant to move before a judge to have an action stayed or dismissed on the grounds that the court has no jurisdiction over the subject matter of the action.
[14] In a number of decisions in 2002, the Court of Appeal for Ontario clarified the requirements of rule 17.02. It concluded [page397] that: (a) in order to satisfy the requirements of Rule 17.02, the facts must support service outside of Ontario under one of the listed grounds; (b) the grounds for service listed in the Rules of Civil Procedure, however, provide only a preliminary indication of jurisdiction; (c) an Ontario court cannot assume jurisdiction over a claim that falls within rule 17.02, unless it is satisfied that there is a real and substantial connection between Ontario and the claim, with regard to principles of order, fairness and jurisdictional restraint. (Muscutt v. Courcelles (2002), 60 O.R. (3d) 20, [2002] O.J. No. 2128 (C.A.); Lemmex v. Bernard (2002), 60 O.R. (3d) 54, [2002] O.J. No. 2131 (C.A.); Sinclair v. Cracker Barrel Old County Store, Inc. (2002), 60 O.R. (3d) 76, [2002] O.J. No. 2127 (C.A.); Leufkens v. Alba Tours International Inc. (2002), O.R. (3d) 84, [2002] O.J. No. 2129 (C.A.))
[15] The analysis of jurisdiction involves a two-step process: the court must first decide whether it has jurisdiction simpliciter and, if so, whether it ought to decline jurisdiction on the basis of forum non conveniens. (Muscutt, supra, at para. 44) The Court of Appeal in Muscutt emphasized the importance of distinguishing the real and substantial connection test (i.e., jurisdiction simpliciter) from the discretionary forum non conveniens doctrine, as follows [at para. 43]:
The real and substantial connection test involves a fact- specific inquiry, but the test ultimately rests upon legal principles of general application. The question is whether the forum can assume jurisdiction over the claims of plaintiffs in general against defendants in general given the sort of relationship between the case, the parties and the forum. By contrast, the forum non conveniens test is a discretionary test that focuses upon the particular facts of the parties and the case. The question is whether the forum should assert jurisdiction at the suit of this particular plaintiff against this particular defendant.
[16] The determination of whether there is a real and substantial connection between the claim and Ontario involves an assessment of the following eight factors, which must be considered as a group since no one factor is determinative of the issue:
(a)the connection between the forum and the plaintiff’s claim;
(b) the connection between the forum and the defendant;
(c) unfairness to the defendant in assuming jurisdiction;
(d) unfairness to the plaintiff in not assuming jurisdiction;
(e) the involvement of other parties to the suit; [page398]
(f)whether the case is inter-provincial or international in nature;
(g) the court’s willingness to recognize and enforce an extra- provincial judgment rendered on the same jurisdictional basis; and
(h)comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere.
The connection between the forum and the plaintiff’s claim
[17] In this case, the defendants argue that there is little, if any connection between Ontario and the plaintiffs’ claim. The only connections are that the plaintiffs are Ontario residents and Ms. Noble received most of her medical treatment in Ontario. Her claim is, among other things, for pain and suffering in Ontario. In Muscutt, supra, at para. 81 these type of damages were found to “represent a significant connection with Ontario”. However, as was noted in all four cases, “this is only one of the factors to be considered”. (Muscutt, supra, at para. 80; Lemmex, supra, at para. 31).
The connection between the forum and the defendants
[18] The defendants have no connection with Ontario in the sense that none of them have offices or assets here.
[19] The question then becomes whether the defendants have done anything that made it reasonably foreseeable that they would cause an injury in the jurisdiction in which the plaintiffs are advancing that claim. In Muscutt, supra, at para. 83, the court held that “This forseeability should be distinguished from a situation in which the wrongful act and injury occurs outside the jurisdiction and the plaintiff returns home and suffers consequential damage”. In this case, the wrongful act and injury occurred in Russia.
[20] The plaintiffs submitted that the defendants did conduct business through various travel agencies in Ontario. In my view, to the extent that this conduct went on, it was not enough to “constitute personal subjection or submission to the jurisdiction of the Ontario Courts” (Muscutt, supra, at para. 84).
Unfairness to the defendants in assuming jurisdiction
[21] This is not a case where there would be any significant unfairness to the defendants if the Ontario courts assumed jurisdiction. The defendants have no more connection to England
— [page399] the jurisdiction they are suggesting — than they do to Ontario. This is not a case like Leufkens, supra, where the activities of the defendants were confined to one place. The defendants’ services are provided internationally.
Unfairness to the plaintiffs in not assuming jurisdiction
[22] In this case, if jurisdiction were refused, the plaintiffs would be compelled to litigate in England. Given Ms. Noble’s injuries, this would undoubtedly be difficult for her. As in Muscutt, this is a case where “on balance, a consideration of unfairness favours the plaintiff” (para. 90).
The involvement of other parties to the suit
[23] In this case, the involvement of other parties to the suit is not a factor.
The court’s willingness to recognize and enforce extra- provincial judgments rendered on the same jurisdictional basis
[24] In essence, the question is whether the Ontario courts would recognize the judgment of a foreign court that assumed jurisdiction in the reverse circumstances. I can see no reason why they would not. In my view, this case is distinguishable from Lemmex and Sinclair. First, the defendants carry on their activities internationally. Second, Ms. Noble’s relationship with the defendants went beyond that of a tourist voluntarily choosing to avail herself of tourism services or a customer eating in a restaurant. She was an employee acting within the scope of her employment duties when she was injured.
Whether the case is inter-provincial or international in nature
[25] The assumption of jurisdiction is more easily justified in inter-provincial cases than in international cases. This case is an international case.
Comity and the standards of jurisdiction, recognition and enforcement prevailing elsewhere
[26] As explained in Muscutt, under international standards, it is only in certain limited circumstances that damage sustained within the jurisdiction is accepted as a basis for assumed jurisdiction. This factor weighs against finding a real and substantial connection.
[27] With respect to this factor, the plaintiffs submitted that Ontario and England (the other jurisdiction proposed by the defendants) have reciprocal enforcement legislation. This is true. [page400] However, in Muscutt, it is also clear that one must look to “the international standards governing assumed jurisdiction and the recognition and enforcement of judgments in the location in which the defendant is situated” (para. 102).
Conclusion
[28] Balancing all of these factors, it is my view that the plaintiffs have demonstrated a real and substantial connection to Ontario. I say this in recognition of the fact that there is no other jurisdiction being proposed that has any more of a real and substantial connection to the action. None of the parties have suggested that this matter be litigated in Russia, where the accident occurred.
Forum Non Conveniens
[29] Having concluded that a real and substantial connection exists between Ontario and the plaintiffs’ claims, I must go on to consider the forum non conveniens doctrine. In this case, the majority of the factors that may be considered under this doctrine support Ontario as being the most convenient forum for the action. The inconvenience that would result to the plaintiffs if they were required to bring the action elsewhere outweighs the defendants’ inconvenience of defending the action in Ontario. For the plaintiffs to bring the action outside of Ontario would require significant effort and expense. The plaintiffs are residents of Ontario and most of their witnesses, including Ms. Noble’s medical witnesses, are from Ontario.
[30] In Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, [1993] S.C.J. No. 34, at para. 53, the Supreme Court of Canada held that where there is no one forum that is the most appropriate, the domestic forum wins out by default and a stay should be denied.
Conclusion
[31] For these reasons, the defendants’ motion is dismissed. The parties may address me in writing on the question of costs within ten days from the release of these reasons.
Motion dismissed.