Reasons for Judgment — The Court
The Court — Shortly after filing a statement of defence, the respondents Canadian American Association of Professional Baseball Ltd., Inside the Park LLC, Greg Lockard, Dan Moushon and Bruce Murdoch (the “Can-Am respondents”) moved under Rule 21.01(3)(a) of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to dismiss the claim on the ground that Ontario courts had no jurisdiction because the appellants had signed agreements providing that disputes would be arbitrated or litigated in North Carolina. The motion judge dismissed the action against all the respondents on the basis of these arbitration and forum selection clauses (2009 CanLII 65823 (Ont. S.C.J.)). The Court of Appeal for Ontario upheld the decision (2010 ONCA 722, 103 O.R. (3d) 467).
The parties to this appeal did not contest the finding of the Court of Appeal that certain respondents had attorned to the jurisdiction, although the motion judge had found that there had been no attornment. As a result, we do not comment on that issue. Nor did the appellants suggest that the dispute falls outside the ambit of the choice of forum or arbitration clauses to which they had agreed.
At issue in this appeal is whether the Can-Am respondents could move under Rule 21.01(3)(a) to seek dismissal of the action based on the arbitration and forum selection clauses in the agreements, notwithstanding the delivery of a statement of defence. The appellants submit that a party that delivers a statement of defence on the merits is precluded from relying upon a forum selection clause, even where the statement of defence explicitly seeks to enforce the clause. We disagree.
The Ontario Rules of Civil Procedure provide two rules under which a party may challenge whether an Ontario court can or should hear an action.
Rule 17.06 permits a party who has been served with an originating process outside Ontario to move for an order setting aside the service or staying the proceeding on the grounds that service is not authorized by the Rules or that Ontario is not a convenient forum for the hearing of the proceeding. This rule requires that the motion be brought before the party delivers a defence, notice of intent to defend or notice of appearance.
The Can-Am respondents did not proceed under Rule 17.06. They did not argue that there was no real and substantial connection to Ontario or that there was a more convenient forum.
Rule 21.01(3)(a) permits a defendant to seek a stay or dismissal of the action on the basis that the court has “no jurisdiction over the subject matter of the action”. Thus, when another forum ― an arbitration panel, a tribunal or another court ― has the exclusive jurisdiction to deal with the claim, the Ontario Superior Court of Justice will not take jurisdiction, based upon agreement or statute.
We agree with Laskin J.A. that the Can-Am respondents were entitled to bring a motion under Rule 21.01(3)(a) to ask the court to dismiss the action because the parties had agreed to arbitrate and litigate disputes in another forum. Although the motion must be brought promptly, we agree with Laskin J.A. that there is nothing in Rule 21.01(3)(a) that requires it to be brought before delivery of a statement of defence. Within the framework provided by the Ontario Rules of Civil Procedure, a statement of defence that specifically pleads a foreign forum selection clause does not amount to consent that Ontario assume jurisdiction so as to preclude consideration on the merits of whether to enforce the clause.
In Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, this Court confirmed that, in the absence of specific legislation, the proper test in determining whether to enforce a forum selection clause is discretionary in nature. It provides that unless there is a “strong cause” as to why a domestic court should exercise jurisdiction, order and fairness are better achieved when parties are held to their bargains.
The appellants did not argue that there was any reason, apart from the delivery of a statement of defence, for the court to determine that there was “strong cause” for Ontario to displace the forum that the parties have agreed should resolve their disputes. We agree with the Court of Appeal that the motion judge did not err in the exercise of her discretion to dismiss the action under Rule 21.01(3)(a).
With respect to the second issue, whether the claims against the respondents the City of Ottawa and Mr. Wolff could be dismissed, we agree with the reasons of Laskin J.A.
Accordingly, we would dismiss the appeal, with costs.
Cases cited
- 2009 CanLII 65823 2009 CanLII 65823 ¶ 1
- 2010 ONCA 722 2010 ONCA 722 ¶ 1
- Z.I. Pompey Industrie v. ECU-Line N.V. 2003 SCC 27 ¶ 9