Renvoi: Lex Situs Conflictus

Canadian Conflict of Laws Blawg by Seva Batkin

Damages (Contract or Tort) = Real and Substantial Connection

Posted by Seva on June 18, 2008

Irrespective of whether an action is in contract or in tort, damages suffered in the province prima facie indicate a real substantial connection between the province and the “facts on which a proceeding is based” (s. 10 of the ULCC’s CJPTA) This useful conclusion can be gathered from the decision of Mills J. of the SKQB in Big Sky Farms Inc. v. Agway Metals Inc., 2008 SKQB 53.

The facts are simple. The plaintiff (resident of SK) bought some metal sheeting from the defendant (resident of Ontario); wrong type of sheeting was delivered; the plaintiff suffered damages. The court, relying on the Saskatchewan’s version of the CJPTA, had to determine whether there was a RaSC between Saskatchewan and the facts. Although the action was in breach of contract rather than in tort, Mills J. relied on Morguard for the proposition that the damage-based jurisdiction over manufacturers stemming from Moran v. Pyle, [1975] 1 S.C.R. 393 (no free link?) is equally applicable to contracts cases:

[Moran v. Pyle]

By tendering his products in the market place directly or through normal distributive channels, a manufacturer ought to assume the burden of defending those products wherever they cause harm as long as the forum into which the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods.   . . .

[Morguard]

49 The above rationale is not, as I see it, limited to torts. . . . In particular, barring express or implied agreement, the reasoning in Moran is obviously relevant to contracts; . . . .

The breach itself was effectively admitted by the defendant and Mills J. characterized the action as “really a case about damages”. Since “in the event of a breach of contract all of the damage was likely to be sustained in Saskatchewan”, real and substantial connection was established. In other words, as explained by Laing J. (as he then was) in Sampson v. Olsen, 2005 SKQB 501, it really didn’t matter if the action was in contract or in tort as the damages themselves presented “other circumstances” constituting RaSC:

12 In the end result, I do not find it necessary to rule whether Saskatchewan should assume jurisdiction on the basis of s. 9(e) or 9(g) because whether these sections would apply, or not, the plaintiff has proven “other circumstances that constitute a real and substantial connection between Saskatchewan and the facts on which a proceeding is based” as referred to in the introductory clause of s. 9 of the Act. All of the alleged damage, both personal injury, property and financial, took place in the Province of Saskatchewan. On the facts, this is a sufficient real and substantial connection.

On a practical note, the case is useful for showing that it is not always necessary to try to fit a situation in one of the presumptive categories of RaSC. Where the facts of the case clearly show a connection to the forum, needless time and effort may be spent trying to creatively characterize the facts into preset categories rather than directly appealing to the court’s logic.

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