Thursday, 6 October 2016

Long-time but Illegal Resident Found not to be “Ordinarily Resident”

Last month the Ontario Court of Appeal ruled, in Silva v. John Doe and the Superintendent of Financial Services 2016 ONCA 700, that a man who resided in Ontario continuously for nine years, without proper legal status, with few ties to anywhere else, is not considered to “ordinarily reside in Ontario”.   
The issue arose after Mr. Silva was struck and injured by an unidentified motorist and sued for compensation under the Motor Vehicle Accident Claims Fund (“Fund”), which was created and funded by the Province of Ontario.   The Motor Vehicle Accident Claims Act R.S.O. 1990 c M-41 (the “Act”) prohibits payments from the Fund to “a person who ordinarily resides in a jurisdiction outside Ontario…” After the Superintendent refused to pay Silva on the ground that he does not ordinarily reside in Ontario, Silva sued and brought a motion for summary judgment.    The motion court found that Silva does not ordinarily reside on Ontario, and dismissed the motion.  Silva appealed, not on the issue whether he is ordinarily resident, but on whether the Court had properly applied the test under the Act. 
The Court of Appeal, endorsing the motion court’s ruling, stated that de facto presence, even if continuous, does not automatically establish ordinary residency for the purpose of access to the Fund.   The substantial length of that presence did not either.   The Court noted that Silva was plainly aware that his presence in Ontario was unlawful, that he had been deported, returned illegally, and he had never even tried to obtain legal status. He did not pay taxes. The Court said that Silva’s lack of status weighs heavily in the determination as to whether he is ordinarily resident (para. 24). The motion court (2016 ONSC 307) said the lack of status is not itself a bar to a finding of ordinary residence (para. 43); the Court of Appeal did not comment on that point.
Although the ruling does not address the meaning of “ordinarily resident” in the context of jurisdiction, it may nonetheless have a bearing on jurisdiction cases.  Silva’s long and continuous presence in Ontario made him plainly and clearly de facto ordinarily resident in Ontario, and yet he was nonetheless found to be not ordinarily resident.  
One distinguishing factor is that the motion court held the taxpayer-supported Fund is not intended for people who live in Ontario illegally and clandestinely, and interpreted the Act accordingly.  Another factor is that “ordinarily resident” is a basis for jurisdiction because a claim against someone ordinarily resident is a claim with a substantial link to Ontario, and because someone ordinarily residing in Ontario would expect to be subject to the jurisdiction of its courts.   If Silva was sued in Ontario, there would be that substantial link to Ontario, and he could not credibly say he does not expect to be subject to the jurisdiction of the Ontario courts.

Friday, 30 September 2016

JASTA and the Merits of Sovereign Immunity

            The U.S. Congress’ recent override of President Obama’s veto of bill 2040, Justice Against Sponsors of Terrorism Act (“JASTA”) brings home the point that sovereign immunity is not the accepted wisdom it once was.    The new law allows confers jurisdiction on U.S. federal courts to hear claims of victims of terrorist attacks against foreign states that provided support for such attacks, even those states that the State Department has not designated as a state sponsor of terrorism.    JASTA was enacted without opposition in the U.S. Senate and was enacted unanimously in the House of Representatives.   The Senate vote to override the President’s veto was nearly unanimous as well.  
            Sovereign immunity, a.k.a. state immunity -- which bars courts of one country from hearing claims against the government of another country -- has existed for many years and in various forms in many countries; some consider it to be a principle or rule of customary international law.   The immunity, originally very broad, has been narrowed in many countries so as to permit claims in respect of commercial activity. In more recent years, some countries including Canada and the U.S. have narrowed it further by allowing claims against certain countries they have designated as state sponsors of terrorism.
The most commonly cited justification for sovereign immunity is that law suits may harm international relations between the state of the plaintiff and the state being sued.    However, I do not see why the government of a country being sued is likely to blame the government of the country of the plaintiff, who sues as a private citizen.     The recent news and controversy surrounding the proposed Transpacific Partnership trade agreement brings to mind the fact that many governments have entered into trade agreements with dispute resolution clauses that allow foreign companies to sue them (albeit in closed door arbitrations).  The stakes in such proceedings are usually very significant, sometimes affecting government policy.   Even if the government does blame that other government for a private citizen’s legal action, is this a sound basis to bar such lawsuits altogether? 
One of the reasons the President gave for the veto was the concern that JASTA might lead to people in other countries suing the United States in respect of the actions of American soldiers or diplomats abroad.     But fear of being held accountable is never itself a sound basis to bar lawsuits.   
The pros and cons of sovereign/state immunity are a topic far too complex for this blog.  Suffice it to say the topic warrants a close look, and I hope the recent news about JASTA leads to that.   

Monday, 29 August 2016

OCA Reverses Itself, Lifting a Forum Non Conveniens Stay

An order staying an action based on forum non conveniens can be lifted if subsequent developments warrant.  Such an order is not final like an order dismissing the action.  Where the governing law is a key factor on the motion for a stay, a plaintiff should have that issue fully adjudicated as part of the motion, rather than let the court rely on the position taken by the defendant, which may change after the motion, as it suits the defendant.

In Kaynes v. B.P. 2016 ONCA 601, a group of Canadian shareholders of British Petroleum (“B.P.”) sued B.P. in Ontario, alleging B.P. had misled them about its operational safety programs in its public disclosure prior to the Deep Horizons oil spill in the Gulf of Mexico in 2010, and about clean up activities afterward.    These shareholders had bought their shares on the New York Stock Exchange.    B.P.  moved for, and obtained on appeal, an order staying the action on the grounds that Ontario was forum non conveniens.  (The Ontario court found it did have jurisdiction).  The court’s grounds for the stay were the facts that there was another class action seeking similar relief in the U.S., and that a U.S. statute asserted exclusive jurisdiction over claims such as those brought by the plaintiff.    

 Kaynes then brought a class action in the U.S. based on the Ontario Securities Act.  Later,  the U.S. court dismissed Kaynes’  class action, partly because it could not be included in a U.S. class action because it was based on Ontario law.   (Kaynes was not barred from bringing an individual action in the U.S.)    Kaynes then moved to have the stay of the Ontario proceedings lifted.   In deciding whether the plaintiff had sufficient grounds, the Ontario Court of Appeal considered not just the fact that his U.S. class action proceeding had been dismissed.  The Court also gave weight to the fact that B.P. now accepted that the plaintiff’s claim is governed by Ontario law, namely the Ontario Securities Act.   If Kaynes’ claim was governed by U.S. law (as B.P. had previously asserted) then under U.S. law the U.S. court would have exclusive jurisdiction over the claim.     

There are two comment-worthy features of this ruling.   One is that we now have an appellate ruling from Ontario confirming that a stay granted on grounds of  forum non conveniens is not necessarily permanent and the court has inherent jurisdiction to lift the stay “where circumstances later develop that make it unjust to continue the stay” (para. 11). 

The other feature relates to the fact that the ruling turned in part on the question of whether Kaynes’ claim would be governed by U.S. law in the U.S. proceeding.   The law to be applied is certainly one of the factors in a forum non conveniens analysis.  This factor carried extra importance here because the U.S. court would have, under American law, exclusive jurisdiction over the claim if it was governed by U.S. law.  However, when granting the stay, the court accepted as fact U.S. law applied without analysis and without any court having ruled on this issue.   Kaynes maintained throughout that Ontario law governed.  B.P. said, at the time of its motion to stay the Ontario proceeding, that U.S. law governs, and subsequently obtained the stay of proceedings.  Later, B.P. flip-flopped, which led to Kaynes’ claim (as a class action) being dismissed in the U.S.  A court hearing a forum non conveniens motion needs to carefully determine the applicable law.