



COURT OF APPEAL FOR ONTARIO

CITATION: Central Sun Mining Inc. v. Vector
    Engineering Inc., 2013 ONCA 601

DATE: 20131002

DOCKET: C56498

Goudge, Gillese and Pepall JJ.A.

BETWEEN

Central Sun Mining Inc.

Plaintiff (Appellant)

and

Vector Engineering Inc., Vector Colorado LLC,
Vector Costa Rica, S.A., Vector Ingeniera Costa Rica, S.A.,
    Steffen Robertson Kirsten/SRK Consulting, Steffen Robertson Kirsten (U.S.)
    Inc., SRK Field Services LLC
, Golder Associates Inc., Golder Associates
    Ltd.,
Richard Frechette
, A.V. Chance, Brent
    Johnson, Don West,
Dave S. Hallman, Charles J. Khoury,
    Rob Dorey, Allan Breitenbach
, Michael Henderson,
Mark
    Smith, Marc Leduc
, Matt Fuller,
Sean Currie and
    XVEI Inc.

Defendants (Respondents)

David Hamer, William D. Black and Christopher M.
    Hubbard, for the appellant

Tim Alexander and Alva Orlando, for the respondents
    Steffen Robertson Kirsten/SRK Consulting, Steffen Robertson Kirsten (U.S.)
    Inc., SRK Field Services LLC., Richard Frechette, Dave S. Hallman, Charles J.
    Khoury, Rob Dorey and Allan Breitenbach

John Lloyd and Anthony Cole, for the respondents XVEI
    Inc., Vector Costa Rica, S.A., Vector Ingeniera Costa Rica, S.A., Mark Smith,
    Marc Leduc and Sean Currie

Heard: May 21, 2013

On appeal from the order of Justice David G. Stinson of
    the Superior Court of Justice, dated December 21, 2012, with reasons reported
    at 2012 ONSC 7331.

Goudge
    J.A.:

[1]

The appellant, Central Sun Mining Inc. (Central Sun), is an Ontario
    company with its head office in Toronto.

[2]

The respondents, Steffen Robertson Kirsten/SRK Consulting, Steffen
    Robertson Kirsten (U.S.) Inc., SRK Field Services LLC, Richard Frechette, Dave
    S. Hallman, Charles J. Khoury, Rob Dorey and Allan Breitenbach (collectively
    SRK) and Vector Costa Rica S.A., Vector Ingeniera Costa Rica, S.A., Mark
    Smith, Marc Leduc, Sean Currie and XVEI Inc. (collectively Vector) are
    American engineering consultants who work for the mining industry.

[3]

In this action, the appellant Central Sun is suing the respondents SRK
    and Vector for negligent misrepresentation, negligence and breach of contract
    in providing services to Central Sun.

[4]

The respondents moved for an order that the Ontario court should not
    assume jurisdiction over them.  The motion judge found that the action lacked a
    real and substantial connection with Ontario and that therefore the Ontario
    court has no jurisdiction over the respondents.  His order stayed or dismissed
    the action as against them.

[5]

For the reasons that follow, I conclude that the motion judge erred and
    that the Ontario court can assume jurisdiction.  I would therefore allow the
    appeal and refer the respondents motion back to the motions court for consideration
    of the further issue of whether the court should exercise its jurisdiction.

A.

The Facts

[6]

The appellant owns a gold mine in Costa Rica.  It was constructed and
    began operating in the mid-1990s.  Through the pre-feasibility, feasibility,
    construction and operations stages, the appellant retained the respondents to
    provide studies relating to the siting, design and operation of the mine.  These
    studies included an overall assessment of the stability of the proposed mine
    site and design.  The appellant says that it relied on these studies in
    building and operating the mine, and that the studies turned out to be badly
    flawed.

[7]

In 2007, a major landslide occurred at the mine.  It forced the mine to
    cease operating and to shut down.  The appellant lost its investment, and has
    since incurred substantial remediation costs.  It has commenced this action to
    recover its losses.

[8]

While the appellant is headquartered in Toronto, it has technical staff
    working in its Vancouver office.  However, its senior executives were located
    in Toronto, where the strategic decisions concerning the Costa Rica mine, the
    financial control of its mining operations, the negotiation of related
    contracts and the significant control over mining activities were all taken.

[9]

Both respondents are based in the United States.  The work for their
    studies was performed largely at the mine site in Costa Rica or at their
    American offices.  In the case of SRK, these studies were all sent to the
    appellants Vancouver office for the appellants technical people to review and
    then make recommendations to the head office in Toronto.  The appellant
    maintains that the studies were also sent on to Toronto for review by senior
    executives.  Vector followed the same practice, although some of their documentation
    was sent directly to the appellants head office.

B.

The Decision Appealed From

[10]

Based
    on these facts, SRK and Vector moved to challenge the jurisdiction of the
    Ontario court over the action against them.

[11]

In
    his analysis, the motion judge followed the framework provided by the Supreme
    Court of Canada in
Club Resorts Ltd. v. Van Breda
, 2012 SCC 17.

[12]

He
    began by considering whether the Ontario court has jurisdiction over the
    action.  This requires that there be a real and substantial connection between Ontario
    and the subject matter of the litigation.  He examined whether any of the
    presumptive connecting factors described for tort cases in
Van Breda
exists here so that a real and substantial connection with Ontario can be
    presumed.

[13]

The
    first of these is whether the action concerns a claim in respect of a tort
    committed in Ontario.  The motion judge found that the appellant had not shown
    Ontario as the
situs
of either its negligent misrepresentation claim
    or its negligence claim.

[14]

For
    the negligent misrepresentation claim, in his view the major factors were that
    the respondents work was all done in the United States and Costa Rica, that
    the studies were submitted by the respondents to the appellant in Vancouver
    (with the exception of some documentation from Vector that went directly to
    Toronto) and that the physical damage all occurred in Costa Rica.  He
    characterized the connection between the action against the respondents and
    Ontario to be relatively minor, when compared to the connections between the
    dispute and other jurisdictions.

[15]

The
    motion judge then considered whether, assuming the appellant established
    Ontario as the
situs
for the negligent misrepresentation it alleged,
    the respondents had rebutted the presumptive connection with Ontario.  His
    analysis, at para. 48 of his reasons, is as follows:

I would therefore hold that, assuming the
    plaintiff has established the existence of a tort in Ontario based on the
    reliance by its senior managers here on some aspects of the foreign-generated
    advice, given the relative weakness of the Ontario connection of the complaint
    against the moving defendants, they have successfully rebutted the presumption
    that Ontario has a real and substantial connection with this dispute.

[16]

Next, the motion judge addressed whether the appellant had established
    that the negligence it claimed was committed in Ontario.  For this connection,
    the appellant relied on the existence of damages suffered in Ontario, and the
    motion judge held that this was not sufficient.  Even assuming that it was
    sufficient, the respondents had successfully rebutted the presumption for the
    same reasons as they had rebutted the presumption with respect to negligent
    misrepresentation.

[17]

The appellant also argued three additional bases for the courts
    jurisdiction.  It said that its action concerned a claim against persons
    carrying on business in Ontario, that the claim is in respect of property in
    Ontario, and that it is also in respect of a breach of contract in Ontario, any
    of which would be sufficient to create a presumptive connection with Ontario. 
    The motion judge disagreed with the appellant on all three.  While the
    appellant raises these again in its factum on appeal, none was pressed in oral
    argument.  Given that I would allow the appeal on the grounds set out below, I
    need not deal further with these arguments or with the motion judges reasons
    for dismissing them.

[18]

In the end, the motion judge concluded that the appellant advanced no
    presumptive factors to support the Ontario court having jurisdiction.  In the
    alternative, he found that the respondents had successfully rebutted any such
    connection.  Having so concluded, he found it unnecessary to go on to determine
    whether, if there were jurisdiction, Ontario is a convenient forum or whether
    there is a more appropriate forum to hear the action.

C.

The Arguments on Appeal

[19]

In this court, the primary issue was whether the motion judge correctly
    concluded that neither the appellants claims for negligent misrepresentation nor
    its claim for negligence was committed in Ontario.  The second issue was
    whether, in the alternative, the respondents have successfully rebutted the
    presumption.

[20]

On the first issue, the appellant argues that the
situs
of both torts is Ontario.  For negligent misrepresentation, the
    connection to Ontario flows from the appellants assertion that the
    respondents studies were sent on from Vancouver to Toronto where they were
    relied on by the appellant in making the business decisions about the mine. 
    For negligence, the appellant relies on the fact that its damages were
    financial and were therefore predominantly suffered in Ontario.

[21]

For their part, the respondents point to the fact, that in most cases,
    they sent their studies to the appellants Vancouver office and that their
    representations did not therefore take place in Ontario.  They also say that
    most of the damage suffered by the appellant took place in Costa Rica, and, in
    any event, damages alone cannot provide a presumptive connection with Ontario.

[22]

On the second issue, the parties join issue on whether the motion judge
    correctly characterized the presumptive connecting factors as pointing only to
    a weak relationship between the dispute and Ontario, and, in doing so, whether
    he incorrectly engaged in a comparison of the relative strength of the
    connection of the action with Ontario and other possible forums.

D.

Analysis

[23]

It is helpful to begin with an outline of the guidance provided by
Van
    Breda
relevant to this case.

[24]

The Supreme Court of Canada, at para. 80, makes clear that if a
    challenge arises to the jurisdiction of the Ontario court, it is up to the
    plaintiff (in this case the appellant) to show a real and substantial
    connection between the dispute and Ontario.  The plaintiff must establish the
    existence of one or more of the factors described in
Van Breda
as presumptively connecting the action with Ontario.

[25]

Van
    Breda
also says, at para. 99, that where an action involves
    several claims, it is enough that one of those claims is presumptively
    connected with Ontario.  This gives the Ontario court jurisdiction over all the
    claims in the action, subject to a rebuttal of the presumption.  Anything else,
    the Supreme Court says, would be incompatible with fairness and efficiency.

[26]

The Supreme Court describes a number of factors, each of which is sufficient
    to presumptively connect a tort case with Ontario, so that the court has jurisdiction
    unless that presumption is rebutted.  The factor of particular relevance here
    is that the action includes a claim for a tort committed in Ontario.

[27]

Finally,
Van Breda
provides that the party
    challenging the presumption of jurisdiction bears the burden of rebutting that
    presumption (in this case the respondents).  At para. 96,
Van Breda
says this about the difficulty of discharging that burden in a tort
    case:

[O]n the other hand, where the presumptive
    connecting factor is the commission of a tort in the province, rebutting the
    presumption of jurisdiction would appear to be difficult, although it may be
    possible to do so in a case involving a multi-jurisdictional tort where only a
    relatively minor element of the tort has occurred in the province.

[28]

In light of these considerations, the first issue here is whether the
    appellant has established that one or other of the torts in its claim was
    committed in Ontario.  The motion judge found that the appellant had not established
    that the respondents had committed, either negligent misrepresentation or negligence
    in Ontario.

[29]

I do not agree.  I conclude that the negligent misrepresentation
    claimed took place in Ontario.  The appellant advances the argument that the
    misrepresentation consists of the studies provided by the respondents.

[30]

The core of the tort of negligent misrepresentation is that the
    misrepresentation is received and acted upon.  There is no dispute that the
    appellant did indeed receive these studies from the respondents and that the
    recommendations made by the appellants Vancouver office to the appellants
    Toronto office were based on those studies.  The motion judge did not address
    whether the respondents studies were forwarded from the appellants Vancouver
    office to the appellants Toronto office.  However, there is evidence that
    would support such a finding.  It is fair to conclude that the studies were
    therefore received by the appellant, not only in Vancouver but also in Toronto
    where they were relied on.

[31]

There can be no question that the appellant acted on these studies in
    Ontario.  That is where it relied on the studies to take the decisions about
    where to locate the mine and how to build and operate it.

[32]

The inevitable conclusion is that the misrepresentations were received
    and relied on in Ontario.  The respondents do not contest that if that were so,
    Ontario is the
situs
of the tort of negligent
    misrepresentation.  This constitutes a presumptive connection between the
    action against the respondents and Ontario.

[33]

I am inclined to think that even if the respondents studies had been received
    only in Vancouver and only the recommendations based on those studies were
    transmitted to Toronto, the negligent misrepresentation would still have been
    committed in Ontario.  The respondents foresaw that their studies would be
    received by the appellant and acted on in Toronto.  They should have expected
    to be called to account in Ontario.  In the modern world where corporations have
    various offices in various locations, corporate defendants should not escape
    liability simply because they send their studies to an office of the plaintiff
    outside Ontario with the clear understanding that it will be acted on in
    Ontario.

[34]

Indeed in
2249659 Ontario Ltd. v. Sparkasse Siegan
, 2013 ONCA 354, 115 O.R. (3d) 241, at para. 31, this court reflected
    such an approach by saying that the tort of negligent misrepresentation occurs
    where the misinformation is received or acted upon.

[35]

Having concluded that the negligent misrepresentation was committed in
    Ontario, it is unnecessary to consider whether the
situs
of the negligence claim is Ontario as well.  Given that the negligent
    misrepresentation was committed in Ontario, Ontario courts are required to take
    jurisdiction over the entire action, unless the respondents can rebut the presumptive
    connection with Ontario.

[36]

The second issue then, is whether the respondents have successfully
    rebutted that presumption.  The motion judge found that they had done so by
    showing the relative weakness of the Ontario connection.

[37]

If this finding suggests that jurisdiction depends on a comparison of
    the relative strength of the connection of the dispute with Ontario on the one
    hand, and other jurisdictions on the other, that is an erroneous approach in my
    view.  It is at the
forum conveniens
stage that
    comparison becomes important.  At the jurisdiction stage of the analysis the
    respondents task is to show no real relationship or at most, a weak
    relationship between the subject matter of the action and the forum.

[38]

However, my more important reason for differing with the motion judge
    on this issue draws on the proposition in
Van Breda
that where a tort is committed in Ontario, rebutting the presumption
    of jurisdiction would appear to be difficult but may be possible if only a
    relatively minor element of the tort has occurred in the province.  In this
    case, that simply cannot be shown.  As noted above, the core of the tort of
    negligent misrepresentation is that the misrepresentation is received and acted
    upon.  In this case, the misrepresentation was received and acted upon in
    Ontario.  It cannot be said that only a relatively minor element of the tort
    occurred in this province.  The respondents simply cannot show that only a
    relatively minor element of the tort occurred in the province, and they cannot therefore
    rebut the presumed jurisdiction of the Ontario court over this action.

[39]

I conclude that the appeal must be allowed and that the Ontario court
    can take jurisdiction over the respondents.  The respondents motion must be
    returned to the motion court for a determination of the
forum
    conveniens
issue.

[40]

Costs of the appeal to the appellant fixed at $25,000 in total, payable
    by the respondents jointly and severally.  Costs at first instance are to be
    determined by the motion judge hearing the
forum conveniens
issue.

Released: October 2, 2013 (S.T.G.)

S.T. Goudge J.A.

I agree. E.E. Gillese J.A.

I agree. S.E. Pepall J.A.


