Court Finds US Company Did Not Consent/Attorn to Ontario’s Jurisdiction By Bringing Recognition Action

Andrew Ottaway, B.A. (Hons.), LL.B.Cross-Border Litigation0 Comments

In Carolina Foods, Inc. v. 838116 Ontario Inc., the Plaintiff, a North Carolina company, had obtained a judgment in North Carolina against purchasers of goods for failure to pay for goods delivered.   The Plaintiff brought the subject action in Ontario for recognition of the North Carolina judgment.  The Defendants counterclaimed for $500,000.

The Plaintiff brought a motion to dismiss the counterclaim on the basis that the Ontario did not have jurisdiction over the counterclaim and that North Carolina was a more appropriate forum to determine the counterclaim.  Our Firm acted for the Plaintiff on the motion.

The Defendants argued that the Plaintiff had attorned to the Ontario court’s jurisdiction over the counterclaim by commencing the recognition action. The Judge rejected that argument, and found that that Plaintiff had not attorned to the jurisdiction of the Ontario court.  Then, applying the factors set out by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, the motion Judge found that Ontario did not have jurisdiction simpliciter as Ontario had no real and substantial connection to the counterclaim.

Further, the Judge stated that even if Ontario had jurisdiction simpliciter, Ontario was forum non conveniens.  The Judge found that the laws of North Carolina applied to the counterclaim; the witnesses were in the United States; the attendance of experts in North Carolina law would require transportation and accommodation costs in Toronto; The Defendants did not spend considerable funds investigating the counterclaim which would be wasted if the counterclaim as transferred to North Carolina (and had not led any evidence concerning the costs of dismissing or staying the counterclaim); the Defendants would not have difficulty in retaining an attorney in North Carolina; and, because the counterclaim had already been determined in North Carolina, there was a possibility of conflicting judgments.

The Judge accordingly dismissed the counterclaim, with costs payable to the Plaintiff.

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About the Author
Andrew Ottaway, B.A. (Hons.), LL.B.

Andrew Ottaway, B.A. (Hons.), LL.B.

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