Go Ahead and Sue Me (But Not in Your Home Province Please): BC Supreme Court Declines Jurisdiction Over US Defendant Where Accident Occurs in Washington


On June 24, 2006, the defendant, a suburban mother residing north of Seattle, lent her vehicle to a friend of her 15 year old daughter on the condition that he return it the following day. On June 25, the plaintiff, a resident of Langley, British Columbia, was returning from a trip across the border when she was rear-ended on Highway I-5. The driver, described by the plaintiff as a “young male wearing a head kerchief” allegedly yelled “sorry man!” and drove off. In the vehicle were three other young men, all wearing head kerchiefs, who, in the plaintiff’s words, “appeared to be messing around in the vehicle”. As it turned out, the vehicle belonged to the defendant. The driver may or may not have been the borrower of the vehicle, but in any event, the car was not returned as promised and was reported stolen. The young man who had borrowed the car was never apprehended or charged as a result, but according to the evidence, the defendant believed he was later jailed for unrelated reasons. Subsequently, the defendant was sued in British Columbia for damages arising out of the accident, in which she was not involved.

On June 2, 2009, the BC Supreme Court issued reasons in the case of Roed v. Scheffler, the action brought in British Columbia arising out of the above mentioned motor vehicle accident in the United States. The defendant Scheffler was represented by Jonathan Hodes of Clark Wilson. After the accident, the plaintiff returned to BC where she received treatment and allegedly suffered a loss of income. The defendant had no connections to BC whatsoever and applied for a stay of the action on the basis that the BC courts lacked territorial competence, formerly known as jurisdiction simpliciter, over the proceeding.

Since May 4, 2006, BC’s Court Jurisdiction and Proceedings Transfer Act (the “Act”) has provided a complete code governing the jurisdiction of the courts of British Columbia over proceedings involving out-of-province parties. Prior to the Act coming into force, these issues were dealt with under the common law doctrines of jurisdiction simpliciter and forum conveniens. The Act retains the common law requirement that in order for territorial competence to exist, there must be a “real and substantial connection” between the jurisdiction and the facts on which the proceeding against a defendant are based.

In attempting to establish a real and substantial connection, the plaintiff argued that damage is an essential element of the tort of negligence, and because the plaintiff suffered damages in British Columbia, the tort occurred in BC. She also argued that the action involved contracts that originated in BC, including her own insurance policy with ICBC and her disability policy, and that the court should take jurisdiction because it had jurisdiction over ICBC, which was also named as a defendant.

The court disagreed with the plaintiff, holding that while she could be said to continue to suffer damages in BC, that fact did not establish that BC was the location of the tort. The court held that Washington was the jurisdiction most substantially affected by the defendant’s acts of negligence, in that the accident occurred there, and the plaintiff’s damages originated there, even if they continued in BC. As a result, for the purpose of territorial competence, the location of the tort was Washington.

With respect to the contractual issue, the court concluded that for jurisdiction to be taken on the basis of a contract in BC, the contract must be the subject matter of the action, and the foreign defendant should be a party to the contract. As the defendant was not a party to any of the contracts allegedly at issue, the court rejected the plaintiff’s argument. Finally, the court held that each party is to be considered separately when dealing with territorial competence. Therefore, the court’s jurisdiction over ICBC was not relevant.

The court concluded that while the damages suffered by the plaintiff were “facts on which the proceeding against the defendant is based” , these facts were not sufficient to meet the “real and substantial connection” test. In considering Ontario decisions in which jurisdiction had been accepted, the court noted that cases involving international as opposed to inter-provincial defendants raised the additional risk of a foreign jurisdiction refusing to enforce a judgment where a Canadian court interpreted the test for jurisdiction too broadly. The court therefore stayed the proceeding on the basis that the plaintiff had failed to establish that the court had territorial competence.

The Scheffler decision is consistent with pre-Act decisions arising out of torts committed in foreign jurisdictions, and challenges the general assumption, made by some, that the Act lowers the threshold for bringing actions in the BC courts where a tort occurs elsewhere. It will be of particular interest to US liability insurers and foreign residents generally, in that it suggests that under the Act, where a tort occurs in a foreign country, the extra-territorial aspect of the tort will be given more weight than it will where the tort occurs in another province of Canada.

The Scheffler decision can be accessed at www.courts.gov.bc.ca/jdb-txt/SC/09/07/2009BCSC0731.htm.