Standard to displace appellant’s chosen jurisdiction not met in breach of contract dispute: OCA

In a recent case analyzing forum non conveniens, the Ontario Court of Appeal disagreed with a judge’s finding that one specific factor – the location of witnesses – was neutral because the post-COVID reality converted court proceedings from in-person to virtual.

The appellate court accepted that the new reality would often lessen the weight that the court would assign to this factor. However, the appellate court said the following:

• It could not safely equate virtual appearances by witnesses to in-person appearances in terms of their impact on the fact-finding process
• At present, it could not know whether the trial would proceed virtually or in person or through a combination of both
• It also could not know which witnesses might appear virtually and which might appear in person

The case arose in relation to a construction project involving the expansion of the Alex Fraser Bridge over the Fraser River in Delta, B.C. The province’s minister of transportation and infrastructure owned the project. The respondent, Eiffage Innovative Canada Inc., was the general contractor under a major works contract dated August 2018.

The appellant, Black & McDonald Limited, and Eiffage entered into a stipulated price contract in October 2018. Under the contract, the appellant would be Eiffage’s subcontractor and would finish its work on a timeline that would enable Eiffage to complete its work by June 2019. Eiffage would pay the appellant $4,772,795.22 for the scope of the work.

In Ontario, the appellant filed claims for unpaid invoice or contractual breach against Eiffage and made claims for tort arising from breach of trust against individual defendants. The appellant alleged that that Eiffage failed to pay even though it completed all its work under the subcontract.

The appellant brought a separate action against the respondent, Liberty Mutual Insurance Company, which issued a labour and materials payment bond to Eiffage. The appellant asked for payment under the bond. Liberty Mutual argued that s. 3(c) of the bond required the parties to commence actions in B.C.

Last May, Justice Grant Dow of the Ontario Superior Court of Justice stayed both proceedings upon finding that B.C. was the more convenient forum.

In Black & McDonald Limited v. Eiffage Innovative Canada Inc., 2023 ONCA 91, the Ontario Court of Appeal allowed the appeals, set aside the motion judge’s orders, and held that both actions could proceed in Ontario.

Eiffage action shouldn’t be stayed

The appellate court ruled that the judge made a flawed forum non conveniens analysis. The appellate court thus conducted its own analysis using the factors from Young v. Tyco International of Canada Ltd., 2008 ONCA 709:

• The location where the contract was signed favoured Ontario since that was where the parties negotiated and signed it
• The applicable law of the contract favoured B.C. since an article in the subcontract provided that the laws of the place of the work, which was B.C., would govern
• The factor of the location of witnesses, especially key witnesses, was difficult to determine since the evidence was inconclusive
• The location from where the bulk of the evidence would come did not significantly favour either jurisdiction
• The jurisdiction where the factual matters arose favoured B.C.
• The residence or place of business of the parties all favoured Ontario
• There would be no loss of any juridical advantage if the action proceeded in Ontario

This analysis showed that the factors did not clearly favour either jurisdiction, the appellate court concluded. Young provided that there was a high standard to displace the appellant’s chosen jurisdiction, which was Ontario in this case. That standard was not met here, the appellate court said.

Liberty Mutual action should not be stayed

The court should resolve any ambiguity in s. 3(c) of the payment bond against Liberty Mutual because it was the one that relied on a standard form contract and imposed that contract’s requirements on the appellant, the appellate court held. Liberty Mutual should have clearly stipulated that actions would be confined to a particular province if that was what it wanted, the appellate court said.

The appellate court noted that there was a clear and well-established public policy against allowing multiple proceedings that could possibly lead to inconsistent findings. Permitting the Liberty Mutual action to move forward in B.C. while the Eiffage action proceeded in Ontario would have this result, the appellate court explained.