Home Field Advantage: Can you sue for that in Ontario?

Home Field Advantage: Can you sue for that in Ontario?

October 4, 2021

By Brian Babcock

Ontario courts are usually very liberal about questions of jurisdiction to sue in Ontario.

The general test is that there must be a ‘real and substantial connection’ between Ontario and the claim against the defendants (the people being sued).

Where the plaintiff (the person suing) and at least one defendant reside in Ontario, there is generally no issue.

Problems may arise where all the proposed defendants reside outside of Ontario. In those cases, service outside of Ontario may be completed without prior Court order under a lengthy list of situations set out in the Rules of Civil Procedure. These range from disputes over property in Ontario to claims against parties carrying on business in Ontario.

Not surprisingly, there are a lot of cases where proposed defendants argue over the limits of these rules, because if service outside Ontario is denied, they may be able to fight on their own home turf. The added cost, or differences in laws, may discourage you from going ahead with your claim.

“Carrying on business in Ontario” is limited in scope. Active advertising in Ontario, or maintaining a web presence accessible from Ontario is not enough. The defendant must either maintain an office in Ontario, or regularly visit Ontario to carry on business.

In cases where the Rules do not permit service without an order, the court may still permit service WITH a court order, but first the court must determine if jurisdiction exists. This is not always simple, as illustrated by a recent Ontario Divisional Court judgment on appeal of a decision by a Master (a junior judicial official who hears certain motions). The case involved a claim against defendants not resident in Ontario. The court ultimately allowed the claim to proceed against six of eight disputed defendants.

The Plaintiff is a filmmaker who claims that an award winning Pixar animated feature resembles a film he created in 2000. Though not all claims are this exotic, it illustrates the general principles.

The Plaintiff relied on four different provisions for service outside of Ontario – that it involved personal property in Ontario; that it claimed an injunction in Ontario; that it was authorized under the Copyright Act; or that the defendants carried on business in Ontario.

The master agreed that Pixar and one Disney corporation had carried on business in Ontario, by distributing the film. Other defendants were excluded by the Master.

On appeal, the court reviewed the three part test for jurisdiction where the defendants are outside Ontario:

  • First, the court must determine whether there is a presumptive connecting factor between the claim and the jurisdiction. Examples of presumptive connecting factors include carrying on business in Ontario, a tort committed in Ontario, or a breach of contract in Ontario.
  • Second, if there is no presumptive connecting factor, the court is to determine whether a new presumptive connecting factor should be recognized. Factors here include similarity to existing connecting factors, the state of prior decisions, any applicable legislation, and treatment in other legal systems.
  • Even if there is a presumptive connecting factor, the defendant can rebut the presumption by establishing facts “which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.”

The Plaintiff only needs to show a “good arguable case” for jurisdiction at this stage. We do not know whether the Plaintiff can succeed on any of his claims, but he will have an opportunity to pursue most of them in Ontario, giving him the home field advantage.

A copyright claim may be a claim over property in Ontario, since ownership of the copyright is a type of property right, and “property” is not limited to real estate or physical assets.

The Divisional Court examined the principles and the facts alleged against each defendant. So, although Walt Disney Corporation may be the parent of other valid Defendants, this is not enough to permit jurisdiction against it.

However, Walt Disney Pictures Inc. as distributor and Pixar as production company and owner of the film are subject to Ontario jurisdiction.

Some more remote defendants were also validly served – the subsidiary which owns the copyright to the Pixar film, and distributes tie-in merchandise, for instance, or the home video distribution subsidiary.

Being able to prove that Ontario has jurisdiction over your claim is an important issue in these days of cross-border business. Retaining a lawyer who is familiar with these situations, and working with them so that all relevant facts are considered at the outset may avoid costly disputes as the lawsuit unfolds. A few dollars invested in early preparation is often worth much more down the line. Hiring a fast gunslinger does you no good if their aim is not true.