Current Uniform Acts
Page 3 of 4
PART 2 : TERRITORIAL COMPETENCE OF COURTS OF
[ENACTING PROVINCE OR TERRITORY]
Application of this Part
2. (1) In this Part, "court" means a court of [enacting province or territory].
(2) The territorial competence of a court is to be determined solely by reference to this Part.
Comments to section 2.
2.1. Part 2 is drafted so as to define the territorial competence of any court of the enacting jurisdiction. This may be subject to rules in any other statute that give a particular court a wider or narrower territorial competence than the rules in this Act (see section 12). The transfer provisions in Part 3 are drafted so as to apply only to the superior court of unlimited jurisdiction (see the note after the heading of Part 3).
2.2. Subsection 2(2) is intended to make it clear that a court's territorial competence is to be determined according to the rules in the Act and not according to any "common law" jurisdictional rules that the Act replaces.
2.3. The Act defines a court's territorial competence "in a proceeding" (section 3). It does not define the territorial aspects of any particular remedy. Thus the Act does not supersede common law rules about the territorial limits on a remedy, such as the rule that a Canadian court generally will not issue an injunction to restrain conduct outside the court's own province or territory.
2.4. The Act only defines territorial competence; it does not define subject matter competence. It is not intended to affect any rules limiting a Canadian court's jurisdiction by reference to the amount of a claim, the subject matter of a claim, or any other factor besides territorial connections.
Proceedings in personam
3. A court has territorial competence in a proceeding that is brought against a person only if
(a) that person is the plaintiff in another proceeding in the court to which the proceeding in question is a counterclaim,
(b) during the course of the proceeding that person submits to the court's jurisdiction,
(c) there is an agreement between the plaintiff and that person to the effect that the court has jurisdiction in the proceeding,
(d) that person is ordinarily resident in [enacting province or territory] at the time of the commencement of the proceeding, or
(e) there is a real and substantial connection between [enacting province or territory] and the facts on which the proceeding against that person is based.
Comments to section 3.
3.1. Section 3 defines the five grounds on which a court has territorial competence in a proceeding in personam. Paragraphs (a), (b) and (c) include the three ways in which the defendant may consent to the court's jurisdiction: by invoking the court's jurisdiction as plaintiff, by submitting to the court's jurisdiction during the proceedings, or by having agreed that the court shall have jurisdiction. These reflect long-standing law. Paragraphs (d) and (e) change current law, by replacing the criterion of service of process with the criterion of substantive connection with the enacting jurisdiction.
3.2. Paragraph (d) is effectively the replacement for the existing rule that a court has jurisdiction over any person that is served with process in the forum province or territory. Replacing service in the territory of the forum court with ordinary residence in that territory means that a person who is only temporarily in the jurisdiction will not automatically be subject to the court's jurisdiction. For a court to take jurisdiction over a person who is not ordinarily resident in its territory and does not consent to the court's jurisdiction, a real and substantial connection must exist within paragraph (e). The current rule, which (subject to arguments of forum non conveniens) permits a court to take jurisdiction on the basis of the defendant's presence alone, without any other connection between the forum and the litigation, will therefore no longer apply. This change in the existing rule is proposed not only on the ground of fairness, but also because the existing rule is of doubtful constitutional validity, since a defendant's mere presence in a province is probably not enough to support the constitutional authority of a province to assert judicial jurisdiction over the defendant.
3.3. Paragraph (e) replaces the existing rules, in the common law provinces, relating to service ex juris. Territorial competence will depend, not on whether a defendant can be served ex juris under rules of court, but on whether there is, substantively, a real and substantial connection between the enacting jurisdiction and the facts on which the proceeding in question is based. This provision would bring the law on jurisdiction into line with the concept of "properly restrained jurisdiction" that the Supreme Court of Canada, in Morguard Investments Ltd. v. De Savoye (1990), held was a precondition for the recognition and enforcement of a default judgment throughout Canada. The "real and substantial connection" criterion is therefore an essential complement to the uniform Enforcement of Canadian Judgments Act, which requires all Canadian judgments to be enforced without recourse to any jurisdictional test. The present Act, if adopted, will ensure that all judgments will satisfy the Supreme Court's criterion of "properly restrained" jurisdiction, which the court laid down as the indispensable requirement for a judgment to be entitled to recognition at common law throughout Canada.
3.4. If the present Act is adopted, rules of court will still include rules as to service of process, but these will no longer be the source and definition of the court's territorial competence. Their role will be restricted to ensuring that defendants, whether ordinarily resident in or outside the jurisdiction, receive proper notice of proceedings and a proper opportunity to be heard.
Proceedings with no nominate defendant
4. A court has territorial competence in a proceeding that is not brought against a person or a vessel if there is a real and substantial connection between [enacting province or territory] and the facts upon which the proceeding is based.
Comments to section 4.
4.1 This section deals with several miscellaneous actions where the proceedings are "technically in personam" but there is not, or is not yet an identified "persona" whose connection with the territory founds jurisdiction. In actions such as preliminary estate matters or correction of a corporate register, it is the proceeding rather than a nominal defendant which is the crucial factor. The section is broken out from the main section to emphasize this point.
Proceedings in rem
5. A court has territorial competence in a proceeding that is brought against a vessel if the vessel is served or arrested in [enacting province or territory].
Comments to section 5.
5.1 Section 5 codifies the existing rule that jurisdiction in an action in rem, which can be brought only against a vessel, depends upon the presence of the vessel within the jurisdiction. Actions in rem are primarily brought in the Federal Court under its admiralty jurisdiction, but concurrent jurisdiction over maritime matters exists in the courts of the provinces. [The wording was amended in 1995 - see 1995 Proceedings at page 43.]
6. A court that under section 3 lacks territorial competence in a proceeding may hear the proceeding despite that section if it considers that
(a) there is no court outside [enacting province or territory] in which the plaintiff can commence the proceeding, or
(b) the commencement of the proceeding in a court outside [enactingprovince or territory] cannot reasonably be required.
Comments to section 6.
6.1 This section creates a residual discretion to act, notwithstanding the lack of jurisdiction under normal rules, provided that the conditions in (a) or (b) are met. Residual discretion permits the court to Act as a "forum of last resort" where there is no other forum in which the plaintiff could reasonably seek relief. The language tracks that of Article 3136 of the Quebec Civil Code.
See also note 10.3.
Ordinary residence - corporations
7. A corporation is ordinarily resident in [enacting province or territory], for the purposes of this Part, only if
(a) the corporation has or is required by law to have a registered office in [enacting province of territory],
(b) pursuant to law, it
- (i) has registered an address in [enacting province or territory] at which process may be served generally, or
- (ii) has nominated an agent in [enacting province or territory] upon whom process may be served generally,
(d) its central management is exercised in [enacting province or territory].
Comments to section 7.
7.1. Sections 7, 8 and 9 define ordinary residence for corporations, partnerships and unincorporated associations. They reflect, with only minor modifications, the approach that is generally taken under existing law to decide whether these defendants are present in the jurisdiction for the purposes of service.
7.2. This Act contains no definition of ordinary residence for natural persons. This connecting factor is widely used in Canada (for example, as the jurisdictional criterion in the Divorce Act (Can.)), and has been judicially defined in numerous cases. It was felt that an express statutory definition would probably fail to match the existing concept and would therefore provide difficulty rather than certainty.
Ordinary residence - partnerships
8. A partnership is ordinarily resident in [enacting province or territory], for the purposes of this Part, only if
(a) the partnership has, or is required by law to have, a registered office or business address in [enacting province or territory],
(b) it has a place of business in [enacting province or territory], or
(c) its central management is exercised in [enacting province or territory].
Comment to section 8.
8.1. See comment 7.1. Partnerships are both business entities and collections of individuals. This section defines the ordinary residence of a partnership in a business sense, is analogous to the section 5 provisions on corporations, and excludes territorial competence over the partnership based on the residence of an individual partner alone.
Ordinary residence - unincorporated associations
9. An unincorporated association is ordinarily resident in [enacting province or territory] for the purposes of this Part, only if
(a) an officer of the association is ordinarily resident in [enacting province or territory], or
(b) the association has a location in [enacting province or territory] for the purpose of conducting its activities.
Comment to section 9.
9.1. See comment 7.1.
Real and substantial connection
10. Without limiting the right of the plaintiff to prove other circumstances that constitute a real and substantial connection between [enacting province or territory] and the facts on which a proceeding is based, a real and substantial connection between [enacting province or territory] and those facts is presumed to exist if the proceeding
(a) is brought to enforce, assert, declare or determine proprietary or possessory rights or a security interest in immovable or movable property in [enacting province or territory],
(b) concerns the administration of the estate of a deceased person in relation to
- (i) immovable property of the deceased person in [enacting province or territory], or
- (ii) movable property anywhere of the deceased person if at the time of death he or she was ordinarily resident in [enacting province or territory],
- (i) immovable or movable property in [enacting province or territory], or
- (ii) movable property anywhere of a deceased person who at the time of death was ordinarily resident in [enacting province or territory],
- (i) the trust assets include immovable or movable property in [enacting province or territory] and the relief claimed is only as to that property;
- (ii) that trustee is ordinarily resident in [enacting province or territory];
- (iii) the administration of the trust is principally carried on in [enacting province or territory];
- (iv) by the express terms of a trust document, the trust is governed by the law of [enacting province or territory],
- (i) the contractual obligations, to a substantial extent, were to be performed in [enacting province or territory],
- (ii) by its express terms, the contract is governed by the law of [enacting province or territory], or
- (iii) the contract
(B) resulted from a solicitation of business in [enacting province or territory] by or on behalf of the seller,
(f) concerns restitutionary obligations that, to a substantial extent, arose in [enacting province or territory],
(g) concerns a tort committed in [enacting province or territory],
(h) concerns a business carried on in [enacting province or territory],
(i) is a claim for an injunction ordering a party to do or refrain from doing anything
- (i) in [enacting province or territory], or
- (ii) in relation to immovable or movable property in [enacting province or territory],
(k) is for enforcement of a judgment of a court made in or outside [enacting province or territory] or an arbitral award made in or outside [enacting province or territory], or
(l) is for the recovery of taxes or other indebtedness and is brought by the Crown [of the enacting province or territory] or by a local authority [of the enacting province or territory].
Comment to section 10.
10.1. The purpose of section 10 is to provide guidance to the meaning of "real and substantial connection" in paragraph 3(e). Instead of having to show in each case that a real and substantial connection exists, plaintiffs will be able, in the great majority of cases, to rely on one of the presumptions in section 10. These are based on the grounds for service ex juris in the rules of court of many provinces. If the defined connection with the enacting jurisdiction exists, it is presumed to be sufficient to establish territorial competence under paragraph 3(e).
10.2. A defendant will still have the right to rebut the presumption by showing that, in the facts of the particular case, the defined connection is not real and substantial. Conversely, a plaintiff whose claim does not fall within any of the paragraphs of section 10 will have the right to argue that the facts of the particular case do have a real and substantial connection with the enacting jurisdiction so as to give its courts territorial competence under paragraph 3(e). For example, a plaintiff may argue that the "place of contracting" is such a significant factor in a contract action that the forum in which the contract was formed should exercise territorial competence. In many cases, questions of validity and performance arise at the same time and are intermingled. In an appropriate case, where only the question of formal validity of a contract is an issue, it would open to the plaintiff to argue that the court should take jurisdiction even though the plaintiff cannot invoke the presumption set out for other factors.
10.3. One common ground for service ex juris is not found among the presumed real and substantial connections in section 10, namely, that the defendant is a necessary or proper party to an action brought against a person served in the jurisdiction. The reason is that such a rule would be out of place in provisions that are based, not on service, but on substantive connections between the proceeding and the enacting jurisdiction. If a plaintiff wishes to bring proceedings against two defendants, one of whom is ordinarily resident in the enacting jurisdiction and the other of whom is not, territorial competence over the first defendant will be present under paragraph 3(d). Territorial competence over the second defendant will not be presumed merely on the ground that that person is a necessary or proper party to the proceeding against the first person. The proceeding against the second person will have to meet the real and substantial connection test in paragraph 3(e).
Section 4.1, residual discretion, also provides a basis upon which jurisdiction can be exercised over a necessary and proper party who cannot be caught under the normal rules. A plaintiff seeking to bring in such a party would argue first, that there is a real and substantial connection between the territory and the party, or secondly that there is no other forum in which the plaintiff can or can reasonably be required to seek relief against that party.
10.4. Section 10 does not include any presumptions relating to proceedings concerned with family law. Since territorial competence in these proceedings is usually governed by special statutes, it was felt that express rules in section 10 would lead to confusion and uncertainty because they would often be at variance with the rules in those statutes, which may have priority by virtue of section 10. For this reason it was felt better to leave the matter of territorial competence for the special family law statutes. If the question of territorial competence in a particular family matter was not dealt with in a special statute, the general rules in section 3 of this Act, including ordinary residence and real and substantial connection, would govern.
10.5 Section 8 lists only those factors which give rise to the presumption. Factors such as "the defendant has property within the Province" which now exist as a basis for service ex juris, are deliberately excluded from the list and the operation of the presumption.
Discretion as to the exercise of territorial competence
11. (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding.
(2) A court, in deciding the question of whether it or a court outside [enacting province or territory] is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including
(a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum,
(b) the law to be applied to issues in the proceeding,
(c) the desirability of avoiding multiplicity of legal proceedings,
(d) the desirability of avoiding conflicting decisions in different courts,
(e) the enforcement of an eventual judgment, and
(f) the fair and efficient working of the Canadian legal system as a whole.
Comments to section 11.
11.1. Section 11 is meant to codify the doctrine of forum non conveniens, which was most recently confirmed by the Supreme Court of Canada in Amchem Products Inc. v. British Columbia (1993). The language of subsection 11(1) is taken from Amchem and the earlier cases on which it was based. The factors listed in subsection 11(2) as relevant to the court's discretion are all factors that have been expressly or implicitly considered by courts in the past.
11.2. The discretion in section 11 to decline the exercise of territorial competence is defined without reference to whether a defendant was served in the enacting jurisdiction or ex juris. This is consistent with the approach in Part 2 as a whole, which renders the place of service irrelevant to the substantive rules of jurisdiction. It is also consistent with the Supreme Court's statement in the Amchem case that there was no reason in principle to differentiate between declining jurisdiction where service was in the jurisdiction and where it was ex juris.
Conflicts or inconsistencies with other Acts
12. If there is a conflict or inconsistency between this Part and another Act of [enacting province or territory] or of Canada that expressly
(a) confers jurisdiction or territorial competence on a court, or
(b) denies jurisdiction or territorial competence to a court, that other Act prevails.]
Comment to section 12.
12.1. This section is square bracketed so that the enacting jurisdiction will consider the following matters. The Uniform Act is intended to be a comprehensive statement of the substantive law of Court Jurisdiction. The statute codifies the rules and is looked to as the source of those rules. Exceptions clearly compromise that comprehensiveness. However, there may be special provisions, particularly in the family law area, which are inconsistent with the Act and are to be preserved. Those statutes can be listed specifically as exceptions to the operation of the Act. As a last resort, where an enacting jurisdiction cannot specifically list the exceptions, but is convinced that they exist, this section may be included.
12.2. As noted above (comment 2.1), section 12, if enacted, preserves any limitation or extension of the territorial competence of a particular court that is provided, either expressly by implication, in another statute.