Markov Wins Home-Ice Advantage

Par Sarah D. Pinsonnault

Revenu Québec

In Johnston c. Great West Life, 2013 QCCS 1404, the Defendants, Great West Life and one of its insurance representatives, are being sued by the trustee of Andrei Markov’s Trust for false representations made regarding the universal life insurance policy issued by the former. Alleging vitiated consent, the Trust is asking for the annulment of the Policy and the reimbursement of $1,233,434.33 paid in premiums. Markov, being the sole beneficiary of the Trust, impleaded in the proceedings.

 

In response, the Defendants filed a motion to (i) have the action be dismissed based on the forum non conveniens doctrine and (ii) quash the intervention of Markov under the pretext that his presence is unnecessary for the resolution of the dispute.

With respect to the first argument, the Defendants purported that the Quebec courts were not competent to hear and decide on the case at bar due to section 3150 of the Civil Code of Quebec (“C.C.Q.”). This section provides that Quebec authorities have jurisdiction to hear actions based on insurance contracts when, inter alia, the insured or the beneficiary of the contract resides in Quebec. In actuality, the “insured” in this case is the trustee of Markov’s Trust, who just so happens to reside in Ontario.

Furthermore, the Defendants argued that the issuance of the insurance policy falls within their “ordinary course of business”, as set forth in section 3113 C.C.Q.. Thus, the applicable laws of their establishment, being in Manitoba, should apply.

Justice Thomas M. Davis of the Quebec Superior Court first analysed various sections of the Code of Civil Procedure (“C.C.P..”) and the Civil Code of Quebec and reasoned that, in personal actions of a patrimonial nature, Quebec authorities have jurisdiction when the defendant is a legal person who, although may not be domiciled in Quebec, has an establishment in the province and the dispute relates to its activities in Quebec (s. 3148(2) C.C.Q.). In this case, despite the fact that the Defendants’ head office is in Winnipeg, they do hold an office and carry out business here in Quebec.

Regarding the forum non conveniens principle, as prescribed in section 3135 C.C.Q., Justice Davis analysed various case law, namely the Supreme Court of Canada’s Spar Aerospace Ltee c. American Mobile Satellite Corp., and the recent Quebec Court of Appeal’s Stormbreaker Marketing and Productions Inc. c. Weinstock. The lesson drawn from these is that a Quebec judge may decline jurisdiction in multi-jurisdictional matters only under exceptional circumstances (note: a summary of the latter case by Me Ashley Kandestin’s is available here).

More precisely, the criteria for determining whether a court judge is entitled to decline jurisdiction pursuant to section 3135 C.C.Q. are twofold: first, it must be established that the courts of a foreign jurisdiction are better suited to hear the case and, secondly, that exceptional circumstances justify this declinatory exception. 

Simply put, the purpose of the forum non conveniens doctrine is to level the playing field between opposing parties:

“[63] Stormbreaker makes it clear that the legislator meant to protect the potentially vulnerable party by allowing them to seek redress in their home jurisdiction.

[64] Markov resides in Quebec and was a resident of Quebec when he signed the Policy. Despite the trust arrangement, it is Markov as an individual who the alleged misrepresentations affect the most. These facts also lead to the conclusion that the Quebec courts should not decline jurisdiction.”

Lastly, regarding the debate surrounding Markov’s presence, Justice Davis deemed his presence necessary, in conformity with section 216 C.C.P., so as to allow for the complete resolution of the case:

“[68] Markov is the settlor of the Trust and sole beneficiary of the Trust. The financial scheme, consisting of the RCA trust and the purchase of insurance policies, was created to secure his financial security when he retires. Markov is also the sole source of revenue invested in the Trust and of the premiums paid to GWL. Markov’s objectives are inextricable from those of the Trust.

[69] Simon, the trustee at the time the Policy was signed, made the decision to purchase the Policy in order to meet Markov’s financial needs and objectives. The Court cannot obtain a complete picture of the whether Niskanen’s representations were consistent with the final terms of the Policy without insight into Markov’s intention and understanding of the matter.

[70] The need for Markov to be a party to the proceedings is strengthened by the allegations in the introductory motion that various misrepresentations were made to Markov following the issuance of the Policy.”

To read this decision in its entirety, click here.