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Court Declines Jurisdiction where Contract Performed Outside Canada
March 7, 2014

The Ontario Superior Court of Justice has issued a judgment declining to exercise jurisdiction over a plaintiff’s claim for wrongful dismissal where the employment contract was formed in Ontario, but the employment was performed in the United States.

The claimant was employed by the Four Seasons Hotel in Toronto, from 2002 until 2007 as Director of Sales. In 2007, she accepted a position with Nevis Resort in the United States, out of their satellite office in New York. Nevis Resort operates under the Four Seasons Hotel and Resorts trademark. The claimant’s employment was transferred from Toronto to New York where the claimant worked until 2011 when her employment was terminated. The claimant sought to bring the claim in Ontario, in part, because in Ontario, she would be entitled to notice of termination, whereas in New York, she would not.

The Court determined that there was a“real and substantial” connection between the dispute and the Ontario courts based on the following: (1) the original employment agreement and subsequent transfer were both executed in Ontario; (2) effective control over the complainant’s employment was exercised by an HR manager in Toronto and (3) the decision to terminate could be influenced by the VP of Human Resources in Ontario. The Court thus found that it had jurisdiction to hear the litigation. However, that did not end the matter. The Court found that even where a court has jurisdiction, it should decline to exercise that jurisdiction where there is a more appropriate forum, known as the principle of forum non conveniens.

The Court looked to the following factors to determine whether it should decline to exercise that jurisdiction: (1) the location where the contract in dispute was signed; (2) the applicable law of the contract; (3) the location of witnesses, especially key witnesses; (4) the location where the bulk of the evidence will come from; (5) the jurisdiction in which the factual matters arose; (6) the residence or place of business of the parties; and (7) the loss of a legitimate juridical advantage. While the contract was signed in Ontario, and the claimant stood to lose a distinct juridical advantage in the remedy available, the Court noted that the loss of this advantage should not weigh heavily in the analysis. The majority of the factors favoured declining jurisdiction and as such, the Court determined that New York was the more appropriate forum.

Although the Court declined to exercise jurisdiction, the fact the Court had jurisdiction highlights the importance of defining who the actual employer is in an employment agreement, and executing the employment agreement in the jurisdiction where the employment duties will be performed.

Sullivan v Four Seasons Hotels Limited

If you have any questions concerning the information presented in this article, please contact Geoffrey Litherland, Partner.