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mercredi 30 janvier 2013

The Court of Appeal declines Quebec’s jurisdiction in an international contractual dispute

By Ashley Kandestin
DeGrandpré Chait S.E.N.C.R.L/LLP

Article 3148 of the Civil Code of Quebec (CCQ) provides the conditions under which a Quebec court is attributed the jurisdiction to preside over a litigation involving foreign parties or events that took place outside of the province. Sub-paragraph 3 of this article specifically grants jurisdiction to our courts in cases wherein, among other possibilities “[…] one of the obligations arising from a contract was to be performed in Québec”. The Court of Appeal, in Green Planet Technologies Ltd. c. Corporation Pneus OTR Blackstone/OTR Blackstone Tire Corporation, 2013 QCCA 56, recently interpreted this part of the provision and ruled that it applies only if the contract giving rise to the litigation explicitly provides that performance must occur in Quebec, regardless of where actual performance occurs.

The Court overturned the first instance decision that dismissed the declinatory exception raised by the defendant, a corporation based in the United Kingdom which contracted with a Quebec corporation in a deal involving the sale of tires located in China. After transferring a deposit from a Montreal bank account to the defendant’s bank in the U.K., the Quebec corporation cancelled the contract and initiated proceedings before our Superior Court claiming the reimbursement of the deposit. The defendant, arguing the absence of jurisdiction of Quebec authorities and the non-application of article 3148 CCQ, sought to dismiss the lawsuit with this preliminary exception. On this argument, the Court of Appeal wrote:
“[7] Dealing first with the latter issue, the Court concludes that the motion's judge erred. She found that the transfer from Blackstone's bank in Montreal to Green Planet's bank in the U.K. was itself evidence of an obligation arising from the contract to be executed in Quebec. The error is this: there is a distinction between an obligation being executed in fact in Quebec, and that obligation having to be executed in Quebec according to the contract. The fact that the purchase order from Blackstone to Green Plant that the latter accepted mentions Blackstone's banking information in Montreal did create any obligation on its part to pay the deposit in Quebec. Moreover, there is no such obligation in any of the documentation before the Court, nor is it suggested that any of the verbal discussions between the parties allude to the existence of such an obligation.
[8] This distinction arises plainly from the reasons of Nuss, J.A. on behalf of the Court in D.D.H. Aviation inc. v. Fox, where he said this:
[26] None of the allegations in the Declaration provide a basis for the conclusion that one of the obligations of the Agreement was to be performed in Quebec. Although it is mentioned that the Challenger Aircraft were to be refurbished, it is not alleged that it was part of the Agreement that they were to be refurbished in Quebec. Neither is it alleged that arising from the Agreement Fox had a duty to perform in Quebec with respect to the refurbishing. As it turned out, only two of the eight Aircraft were brought to Dorval for that purpose, after the purchase, and apparently, according to Fox, after the date that the consulting fee should have been paid.
[27] The crucial point is that there is no basis for concluding from the allegations in the Declaration, that according to Fox's Agreement with Appellants, he had an obligation to perform in Quebec. The allegation that Fox assisted with the refurbishing process does not confer jurisdiction on the Superior Court. In order to confer jurisdiction, there has to exist an obligation to perform in Quebec which arises from the Agreement.
[28] Indeed, if a duty on Fox to attend in Dorval (or elsewhere in Quebec) and perform services here, arises from that Agreement, his actual performance of the services might well be irrelevant, because it is the place where the obligation is to be executed which is determinative for the purpose of establishing jurisdiction rather than the mere fact of his physical presence. As a corollary, even if Fox performed services in Quebec, if he had no obligation to do so arising from the Agreement, then no jurisdiction is conferred on the Superior Court by article 3148 (3) C.C.Q.
[Emphasis added.]
[…]

[12] Green Planet's declinatory exception therefore should have been granted and Blackstone's action dismissed.”

The full text of the decision can be read here.

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