COURT OF APPEAL FOR ONTARIO

CITATION: Tamminga v. Tamminga, 2014 ONCA 478

DATE: 20140618

DOCKET: C57444

Juriansz, Tulloch and Strathy JJ.A.

BETWEEN

Karen Tamminga

Plaintiff (Appellant)

and

William Tamminga, Tamminga Farms Ltd. and State Farm Mutual Automobile Insurance Company

Defendants (Respondents)

John J. Adair, for the appellant

Rahool P. Agarwal and Guy White, for the respondents

Heard: May 2, 2014

On appeal from the order of Justice Lois B. Roberts of the Superior Court of Justice, dated July 8, 2013, with reasons reported at [2013] O.J. No. 4515.

Strathy J.A.:

Introduction

[1]          An Ontario resident was injured when she fell off a truck in Alberta. She commenced an action in the Ontario Superior Court of Justice against the owner
and operator of the truck, who lives in Alberta, and a corporate co-owner of the truck, which is registered and carries on business in Alberta. She also sued her Ontario automobile insurer. The issue is whether her insurance contract is a sufficient “presumptive connecting factor” under Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572 to give this court jurisdiction over the non-resident defendants. For the reasons that follow, I conclude that it is not and would dismiss this appeal from the motion judge’s order staying the action against those defendants.

The facts

[2]          The appellant, Karen Tamminga, lives in Ontario. She was injured in Alberta while a passenger on a truck operated by her relative, the respondent William Tamminga. Mr. Tamminga and his company, the respondent Tamminga Farms Inc., owned the truck. Mr. Tamminga is an Alberta resident and Tamminga Farms carries on business exclusively in Alberta.

[3]          The appellant had surgery in Alberta after the accident and returned to Ontario where she had additional treatments.

[4]          Several months after the accident, the appellant commenced an action against the respondents in the Superior Court of Justice. She sued State Farm in the same action, claiming uninsured or underinsured coverage under her standard automobile policy.[1] In response, the respondents brought a motion to stay the proceeding based on absence of jurisdiction or, alternatively, forum non conveniens. The appellant subsequently amended her pleading to include a claim against State Farm for statutory accident benefits.

The motion judge’s reasons

[5]          The motion judge granted the respondents’ motion and stayed the proceeding against them. She concluded the court lacked jurisdiction simpliciter over the respondents. The appellant’s residence in Ontario and the damages she suffered in Ontario were not presumptive connecting factors under Van Breda. Nor was the fact that the respondents might be proper parties to the claim against State Farm.

[6]          The motion judge rejected the appellant’s submission that the arrangement she made with Mr. Tamminga to visit him on his farm was a contractual connecting factor. Nor was her insurance contract with State Farm a “contract connected with the dispute” between the appellant and the respondents. The respondents were not parties to the insurance contract and the appellant had a direct right of action against State Farm without having to join the respondents.

[7]          Having found the appellant had not discharged the burden of identifying a presumptive connecting factor, the motion judge stayed the action. Although not required to address the forum conveniens issue, she found that Alberta was, in any event, the convenient forum.

[8]          I will begin by summarizing the Van Breda decision.

Van Breda

[9]          Van Breda is the leading authority on jurisdiction over non-resident tortfeasors and torts occurring outside Ontario. There, the Supreme Court of Canada set out a framework for the assumption of jurisdiction in tort cases that was intended to address the need for certainty and predictability. It identified a list of connecting factors that would permit the court to presumptively assume jurisdiction. 

[10]       Justice LeBel, who gave the judgment on behalf of the Supreme Court, identified the following as presumptive connecting factors in tort cases, at para. 90:

(a) the defendant is domiciled or resident in the province;

(b) the defendant carries on business in the province;

(c) the tort was committed in the province; and

(d) a contract connected with the dispute was made in the province.

[11]       LeBel J. also identified certain factors that are not presumptively connecting. The presence of the plaintiff in the jurisdiction is not a presumptive connecting factor: para. 86. Nor is the fact that damages were sustained in the jurisdiction: para. 89. Nor is the combined effect of a number of non-connecting factors: para. 93. 

[12]       Where a presumptive connecting factor is established, the burden shifts to the defendant to show the connection between the subject matter of the litigation and the forum is weak. Justice LeBel suggested that in the case of a contractual connecting factor, the presumption of jurisdiction can be rebutted by showing that “the contract has little or nothing to do with the subject matter of the litigation”: para. 96.

[13]       If jurisdiction is established, the inquiry turns to forum conveniens.

[14]       Justice LeBel noted that the list of presumptive connecting factors is not necessarily complete. Over time, new factors may be identified that would give presumptive jurisdiction. In identifying such factors, the court will look to the degree of similarity between the connecting factor and the established factors, and the treatment of the proposed connecting factor in the case law, in statute law and in private international law and other legal systems: para. 91. The new presumptive connecting factor must “point to a relationship between the subject matter of the litigation and the forum such that it would be reasonable to expect that the defendant would be called to answer legal proceedings in that forum”: para. 92. The strength of the relationship can be assessed using the values of order, fairness and comity.

[15]       Justice LeBel summarized the new approach at para. 100 as follows:

To recap, to meet the common law real and substantial connection test, the party arguing that the court should assume jurisdiction has the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to the forum. In these reasons, I have listed some presumptive connecting factors for tort claims. This list is not exhaustive, however, and courts may, over time, identify additional presumptive factors. The presumption of jurisdiction that arises where a recognized presumptive connecting factor - whether listed or new - exists is not irrebuttable. The burden of rebutting it rests on the party challenging the assumption of jurisdiction. If the court concludes that it lacks jurisdiction because none of the presumptive connecting factors exist or because the presumption of jurisdiction that flows from one of those factors has been rebutted, it must dismiss or stay the action, subject to the possible application of the forum of necessity doctrine, which I need not address in these reasons. If jurisdiction is established, the claim may proceed, subject to the court's discretion to stay the proceedings on the basis of the doctrine of forum non conveniens.

[16]       The facts of Van Breda give some guidance about the role of a contract connected with the dispute as a connecting factor. Ms. Van Breda sustained catastrophic injuries while at a resort in Cuba, allegedly as a result of the negligence of the resort operator, Club Resorts. Although she and her spouse were Ontario residents, they moved to Alberta after the accident and then to British Columbia, where most of her damages and pain and suffering occurred. Club Resorts was incorporated in the Cayman Islands. There was little evidence of factual connections to Ontario and LeBel J. did not accept that Club Resorts’ advertising in Ontario gave rise to a connection.

[17]       However, Ms. Van Breda’s spouse, Mr. Berg, was a professional squash player and had a contractual relationship with a travel agency that recruited squash and tennis professionals for Club Resorts. Mr. Berg was to give lessons to guests at the resort in exchange for free room and board for himself and Ms. Van Breda. Thus, LeBel J. found at para. 116 that Ontario had jurisdiction because “[a] contract was entered into in Ontario and a relationship was thus created in Ontario between Mr. Berg, Club Resorts and Ms. Van Breda, who was brought within the scope of this relationship by the terms of the contract.”  He added at para. 117 that “[T]he events that gave rise to the claim flowed from the relationship created by the contract.” The contract was a presumptive connecting factor that entitled the court to assume jurisdiction over the out-of-province defendant.

The parties’ positions on appeal

[18]       The appellant acknowledges that, absent her insurance contract with State Farm, Van Breda does not support jurisdiction in this case. She does not suggest that there is any basis for the recognition of a new presumptive connecting factor.

[19]       The appellant submits the motion judge erred in finding that State Farm’s insurance policy was not a “contract connected with the dispute” and thus a presumptive connecting factor under Van Breda. She submits that the threshold to establish a presumptive connecting factor is a low one. Relying on the facts of Van Breda itself, she submits that the defendant need not be a party to the contract. Moreover, the strength of the connection between the contract and the dispute is a factor to be considered at the second stage of the Van Breda analysis, when the defendant may rebut the connection, and not the first stage. She says that, having established the presumptive connecting factor, the onus was on the respondents to show that the connection was a weak one. The respondents failed to discharge their burden and the action should have been permitted to proceed in Ontario.

[20]       The respondents submit the motion judge correctly found that the appellant’s insurance contract was not connected to the dispute so as to bring them under Ontario’s jurisdiction. Unlike Van Breda, where the plaintiff’s injury occurred in the context of performance of the contract, the insurance contract in this case had nothing to do with the events giving rise to the tort claim. The insurance contract only became pertinent after the tort had occurred. The appellant could pursue her direct right of action against State Farm in Ontario without any need to involve the respondents. Even if the contract were somehow connected to the tort claim, the speculative and contingent nature of the claim against State Farm would make it a weak and hypothetical connection.

Analysis

[21]       This court considered the contractual connecting factor in Export Packers Co. v. SPI International Transportation, 2012 ONCA 481. The plaintiff, a dealer in food products, had purchased a shipment of pork in Quebec and stored it temporarily in a warehouse used by the vendor and operated by a Quebec company called EDN. The plaintiff then sold the pork to a Florida company and contracted with the defendant, SPI, to arrange for the transportation of the pork from EDN’s warehouse to Florida. SPI, in turn, engaged an Ontario company to actually truck the cargo. Unfortunately, EDN mistakenly released the cargo to a fraudster, who absconded with it.

[22]       The plaintiff sued SPI in Ontario and SPI in turn brought third party proceedings against EDN, asserting that it negligently released the cargo to the fraudster without obtaining proper identification.

[23]       This court affirmed the motion judge’s dismissal of the claim against EDN on the basis of lack of jurisdiction. The appellant had argued that there were several contracts connected with the dispute. This court noted, however, that the contracts in question had no connection with the proposed third party:

The three contracts relied upon by the appellant relate to arrangements between the owner, the broker and the proposed carrier of the cargo. They have no connection to EDN other than they anticipate that the cargo would be picked up at EDN's warehouse in Quebec. The dispute in issue between SPI and EDN relates solely to the alleged negligence of EDN in releasing the cargo. The contracts relied upon do not address the issue of release of the cargo by EDN as storer. That dispute will be resolved according to the laws of Quebec. (para. 14)

[24]       This court concluded, at para. 16, that there was no contract “sufficiently connected” to the dispute to raise a presumption of a real and substantial connection to Ontario. Moreover, the contract between EDN and its customer, the company that had sold the pork to the plaintiff, was expressly subject to the law and jurisdiction of Quebec.

[25]       In comparison with Export Packers Co., the contract in the present case is even further removed from the events giving rise to the dispute. An automobile insurance contract “anticipates” accidents generally, but the tortfeasor will not be identifiable in advance. Unlike the contract in Van Breda, there is nothing that connects the appellant’s insurance contract to the respondents. They are not parties to or beneficiaries of the contract. The appellant was not visiting the farm in Alberta for any reason related to the contract. The connection between the insurance policy and the dispute only arises in the aftermath of the tort and its application is conditional on the outcome of the appellant’s claim against the tortfeasors.

[26]       In a word, there is no nexus between the insurance contract and the respondents.

[27]       This conclusion is consistent with the decision of this court in Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68 (C.A.), one of the Muscutt companion cases. There, Sharpe J.A., writing for the court, held that the inclusion of a claim against the plaintiff’s automobile insurer did not serve to “bootstrap” jurisdiction over the non-resident defendants:

In my view, on the facts of this case, the claim against Allstate does not fortify the case for assuming jurisdiction against the New York defendants. At this stage of the proceedings, the claim against Allstate is entirely speculative in nature. Counsel for the plaintiffs conceded that joining Allstate was a purely precautionary measure and that the plaintiffs do not at present know whether or not the New York defendants have adequate insurance coverage. It seems to me that this situation is very different from the situation in McNichol Estate v. Woldnik (2001), 150 O.A.C. 68. In McNichol, the core of the plaintiff's claim was against the domestic defendants and adding the foreign defendant was necessary to avoid a multiplicity of proceedings. By contrast, here the core of the claim is against the New York defendants and the claim against the Ontario defendant is entirely secondary and contingent. Jurisdiction over claims against extra-provincial defendants should not be bootstrapped by such a secondary and contingent claim against a provincial defendant. (para. 20)

[28]       It is also consistent with the prevailing line of authority in the Ontario Superior Court of Justice. In three recent cases of Ontario residents involved in

automobile accidents in the state of New York, judges of that court have held that the plaintiff’s insurance policy is not a “contract connected with the dispute”: Misyura v. Walton, 2012 ONSC 5397; Paraie v. Cangemi, 2012 ONSC 6341; Mitchell v. Jeckovich, 2013 ONSC 7494. In both Misyura and Paraie, the court was influenced by the speculative and contingent nature of claims for uninsured and underinsured coverage, as discussed in Gajraj.

[29]       An exception is Cesario v. Gondek, 2012 ONSC 4563, relied upon by the appellant, but distinguished by the motion judge on the basis that the plaintiffs had been in two accidents, there were joint tortfeasors allegedly responsible for the plaintiffs’ damages and those damages were considered inseparable. She noted that the presence of the plaintiffs’ insurer in Ontario was not a factor that entered into the determination. The case was clearly distinguishable, for those reasons.

[30]       I conclude, therefore, that the motion judge correctly stayed the action against the respondents.

[31]       Both parties also made submissions on the issue of forum conveniens. As I would dismiss the appeal on the jurisdictional ground, it is unnecessary to deal with this issue.

Disposition

[32]       For these reasons, I would dismiss the appeal. The respondents are entitled to their costs fixed at $7500, inclusive of disbursements and all applicable taxes.

Released: June 18, 2014 (M.T.)                    “G.R. Strathy J.A.”

                                                                             “I agree R.G. Juriansz J.A.”

                                                                             “I agree M. Tulloch J.A.”