In a recent Ontario Superior Court decision Nagra v. Malhotra released on July 31, 2012, the Court had the opportunity to apply the legal principles recently articulated by the Supreme Court of Canada in Club Resorts Ltd v. Van Breda 2010 SCC 17. The main issue facing the court in Nagra was whether the Ontario Court had the jurisdiction to hear this matter. The Court reached the conclusion that there was a real and substantial connection between the litigation and Ontario. The alternative forum put forward by the defendant, Vermont of the United State, was found not to be the more convenient forum for the trial of this action.
The plaintiff sued the defendant in Ontario, claiming that the defendant owed him $3.5 million in relation to an unpaid promissory note (the “Action”). Subsequently, the defendant brought a motion for an order staying the Action on the basis that the claim should be tried in Vermont. Although the Action did appear to have a number of important connections to Vermont, the Court dismissed the defendant’s motion.
Applying the Van Breda test, the Court found that the defendant failed to rebut the presumption of jurisdiction. The Court considered the following factors in arriving at its decision:
- both parties lived in Ontario;
- the defendant made his investment in US properties from his home base in Ontario;
- the defendant executed the documents from Ontario through his power of attorney in Vermont;
- the default of the agreement occurred in Ontario; and
- the key witnesses in the Action were the parties themselves and potential American witnesses appeared to be willing to travel to Ontario.
This decision is a good example illustrating how an Ontario court applied the “real and substantial connection” test where the assets in dispute have strong connections to a foreign country.
The entire decision of Nagra v. Malhotra (2012 ONSC 4497) can be read here. The complete Supreme Court decision of Club Resorts Ltd v. Van Breda can be read here. We have previously blogged about the decision here.
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