



COURT OF APPEAL FOR ONTARIO

CITATION: Sgromo v. Scott, 2018 ONCA 5

DATE: 20180108

DOCKET: C63783, C63822, C63857 and C64048

Laskin, Miller and Paciocco JJ.A.

DOCKET:
    C63783

BETWEEN

Pietro,
    Pasquale-Antonio Sgromo (Peter, Anthony Sgromo); Wide Eyes Marketing Ltd.

Plaintiffs (Appellants)

and

Leonard
    Gregory Scott (an individual), Eureka Inventions LLC,

Bestway
    (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables & Material
    Corp. (Shanghai), and Patrizzio Fumagalli (an individual)

Defendants (Respondents)

DOCKET:
    C63822

BETWEEN

Pietro, Pasquale-Antonio Sgromo (Peter Anthony Sgromo)

Plaintiff (Appellant)

and

Bail
    Hotline Bail Bonds, Inc.

Defendant (Respondent)

DOCKET:
    C63857

BETWEEN

Pietro,
    Pasquale-Antonio Sgromo (Peter Anthony Sgromo);

Wide
    Eyes Marketing Ltd.

Plaintiffs (Appellants)

and

Polygroup
    International, (a Hong Kong corporation); Polygroup Limited (Macao Commercial
    Offshore), a corporation duly organized under the laws of S.A.R., Peoples
    Republic of China; Polygroup Services N.A., Inc., (a United States corporation);
    Ricky Tong (an individual); William Kaufmann (an individual);

Scott
    Hershock (an individual); Lewis Cheng (an individual); Elmer Cheng (an individual);
    and Paul Cheng (an individual)

Defendants (Respondents)

DOCKET:
    C64048

BETWEEN

Pietro,
    Pasquale-Antonio Sgromo (Peter, Anthony Sgromo)

Plaintiff (Appellant)

and

Imperial
    Toy, LLC, Peter Tiger, Art Hirsch

Defendants (Respondents)

Aaron Challis and Anthony Fletcher, for Leonard Gregory
    Scott and Eureka Inventions LLC

Peter Henein and Kate Byers, for the respondents Bestway
    (USA), Inc., Bestway (Hong Kong) International Ltd., Bestway Inflatables &
    Material Corp. (Shanghai), and Patrizio Fumagali

Jordan Lester and Warren Mouck, for the respondent Bail
    Hotline Bail Bonds, Inc.

Peter Choe, for the respondents Polygroup International,
    Polygroup Limited, Polygroup Services N.A., Inc., Ricky Tong, William Kaufmann,
    Scott Hershock, Lewis Cheng, Elmer Cheng, and Paul Cheng

Derek Zulianello and Kathleen Commisso, for the
    respondent Imperial Toy LLC, Peter Tiger, and Art Hirsch

Pietro Sgromo, acting in person on his own behalf and on
    behalf of the appellant, Wide Eyes Marketing Ltd.

Heard: December 22, 2017

On appeal from the orders of Justice Douglas C. Shaw of
    the Superior Court of Justice, dated April 24, 2017, with reasons reported at 2017
    ONSC 2522, 2017 ONSC 2524, and 2017 ONSC 2525, and the order of Justice Terrence
    A. Platana of the Superior Court of Justice, dated June 27, 2017, with reasons
    reported at 2017 ONSC 3978.

REASONS FOR DECISION

[1]

The appellant, Peter Anthony Sgromo, brought four related actions
    arising out of various dealings with the respondents. Two of those actions were
    also brought by the appellant, Wide Eyes Marketing Ltd., a company in which Mr.
    Sgromo is the sole officer and shareholder.

[2]

Although Mr. Sgromo is a Canadian citizen and now lives in Thunder Bay,
    during the period of time at issue in his lawsuits  roughly 2001 to 2016  he
    lived in the United States. The actions of the various respondents of which he
    complains all took place in the United States, almost entirely in California.

[3]

The respondents brought motions to dismiss or stay the appellants actions,
    principally on the ground that an Ontario court had no jurisdiction over his
    claims because there is no real and substantial connection between his
    litigation and this province. In each action, the motion judge granted the
    motion and dismissed the action brought by Mr. Sgromo (and, where applicable,
    Wide Eyes).

[4]

After considering Mr. Sgromos detailed written submissions and his oral
    submissions, we called on the respondents on three issues:

1)

Did Mr. Sgromo enter into a consulting contract with Imperial Toy at the
    Toronto airport, thus giving Ontario jurisdiction over his claim against that
    company?

2)

Did Mr. Sgromo enter into a consulting contract with Bestway at the
    Toronto airport, thus giving Ontario jurisdiction over Mr. Sgromos claim in
    his litigation against Mr. Scott and the Bestway companies?

3)

Were some of the
    respondents carrying on business in Ontario, thus satisfying one of the
    presumptive connecting factors for jurisdiction under the principles set out by
    the Supreme Court of Canada in
Club Resorts Ltd. v. Van Breda
, 2012
    SCC 17, [2012] 1 S.C.R. 572?

[5]

Having reviewed the positions of the parties on each of these issues, we
    are satisfied that an Ontario court has no jurisdiction over any of Mr. Sgromos
    claims.

[6]

The first two issues can be dealt with together. Mr. Sgromo relies on two
    applications  one made by Imperial Toy and the other by Bestway  requesting
    permission for him to act as a consultant in the United States. Each
    application was made at the Toronto airport to Homeland Security, whose
    authorization Mr. Sgromo required to work in the United States. Neither
    application is a contract. Any consulting arrangement or other business
    relationship between the parties took place in California. The two applications
    made at the Toronto airport do not establish a real and substantial connection
    to Ontario.

[7]

On the third issue, Mr. Sgromo submits that because the products of some
    of the respondents were advertised, marketed, and distributed in Ontario, the
    respondents were in substance carrying on business here. The respondents
    acknowledge that under
Van Breda
,
carrying on business in Ontario is a presumptive factor establishing a real and
    substantial connection to this province.

[8]

Mr. Sgromo made the same submission before the motion judge in both the
    Bestway and Polygroup actions. In each case the motion judge rejected his
    submission. In the Polygroup action the motion judge wrote at paras. 33-34:

In
Van Breda
, at para. 87, the Supreme Court of Canada
    stated that caution must be exercised in considering whether an entity is
    carrying on business in the jurisdiction, to avoid what would amount to
    assuming universal jurisdiction in respect of tort claims arising out of
    certain categories of business or commercial activity. The notion of carrying
    on business requires some form of actual, not only virtual, presence in the
    jurisdiction, such as maintaining an office or regularly visiting the territory
    of the particular jurisdiction.

Although retailers in Ontario may carry Polygroup products, and
    although Polygroup therefore did business with Ontario retailers, this does not
    mean that Polygroup carried on business in Ontario. For Polygroup to carry on
    business in Ontario, it would require a finding that Polygroup had some form of
    actual presence in the Province.

[9]

And in the Bestway action the same motion judge wrote at paras. 67-68:

Mr. Sgromo submits that the Bestway companies are carrying on
    business in Ontario because their products are sold at retailers in Ontario. In
Van Breda
, at para. 87, the Supreme Court of Canada stated that caution
    must be exercised in considering whether an entity is carrying on business in
    the jurisdiction, to avoid what would amount to assuming universal jurisdiction
    in respect of tort claims arising out of certain categories of business or
    commercial activity. The notion of carrying on business requires some form of
    actual, not only virtual, presence in the jurisdiction, such as maintaining an
    office or regularly visiting the territory of the particular jurisdiction.

There is no evidence that the Bestway companies had such an
    actual presence in Ontario, even if their products were sold in the province by
    third party retailers, as alleged by Mr. Sgromo.

[10]

We
    agree with each of these passages. We add that in
Van Breda
,
at para. 87, LeBel J. emphasized that
    even active advertising in Ontario would not be enough to establish that a
    defendant was carrying on business here.

[11]

Mr.
    Sgromo argued his case well, both in writing and orally. But we see no
    reviewable error in the reasons of the motion judge in each action.

[12]

The
    appeals are dismissed with costs to the respondents as follows:

·

Bail Hotline:           $10,000

·

Imperial Toy:         $13,000

·

Polygroup:             $15,000

·

Mr. Scott:              $10,000

·

Bestway:               $20,000

[13]

Each
    cost award is inclusive of disbursements and HST and takes into account the
    costs of four motions brought by the appellants in the underlying appeals.
    These four motions were dismissed by Benotto J.A. on November 2, 2017, and
    costs were ordered payable to the respondents, but the quantum was reserved for
    this panel to decide.

John
    Laskin J.A

B.W.
    Miller J.A.

David
    M. Paciocco J.A.


