Dent Wizard Intl. Corp. v. Sears (1999), 99 O.T.C. 161 (SC)
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Temp. Cite: [1999] O.T.C. TBEd. JN.083
Dent Wizard International Corporation and Dent Wizard (Canada) Ltd. (plaintiffs) v. Dale Sears (defendant)
(No. 3741/98)
Indexed As: Dent Wizard International Corp. et al. v. Sears
Court of Ontario
Superior Court of Justice
Zalev, J.
May 28 and July 5, 1999.
Summary:
Sears was employed by the plaintiff Dent Wizard (Canada) Ltd. (DWC) from August 1995 to September 1996 after having been trained in Missouri by DWC’s franchisor, the plaintiff Dent Wizard International Corp. (DWI). There was a “Trainee Secrecy, Non-competition and Non-disclosure Agreement” (the Trainee Secrecy Agreement) between Sears and DWI. A “Technician Agreement” existed between Sears and DWC. The Trainee Secrecy Agreement provided that Missouri was the dispute resolution forum. The Technician Agreement provided that Ontario was the dispute resolution forum. In October 1996, the plaintiffs sued Sears for damages and injunctive relief. The plaintiffs alleged that the defendant used and disclosed trade secrets, solicited the plaintiffs’ customers, and directly or indirectly competed with the plaintiffs in breach of the Trainee Secrecy Agreement and the Technician Agreement. The plaintiffs sought interlocutory injunctive relief. This was denied when Sears successfully argued that the Missouri courts had exclusive jurisdiction in the matter. The plaintiffs then sued in Missouri. A lawyer represented Sears and took steps to advance Sears’ interests, including delivery of an entry of appearance, setting aside of a default judgment, delivery of an answer and counterclaim, participation at a damages hearing, motion for a new trial, filing of an appeal, etc. The Missouri trial court granted judgment in favour of the plaintiffs and awarded damages for breach of the Trainee Secrecy Agreement but not for breach of the employment agreement between Sears and DWC. Sears filed an appeal in the Missouri appeal court. The appeal had not been heard when the plaintiffs sued in Ontario to enforce the Missouri trial judgment and sought summary judgment. Sears contested and filed a cross-motion for a stay of the action. His arguments included: (1) the Missouri courts did not have full jurisdiction over the contracts sought to be enforced in Missouri since one of the contracts gave exclusive jurisdiction to Ontario; (2) Missouri did not have real and substantial connection with the subject matter; (3) the Missouri proceeding constituted an abuse of process; (4) Ontario was the most convenient forum; (5) the Missouri proceedings were conducted contrary to the principles of natural justice; and (6) impossibility of determining whether the damages awarded were appropriate.
The Ontario Superior Court rejected all of Sears’ arguments and granted summary judgment. The court held that the Missouri trial judgment was final and res judicata in Missouri and that Missouri had jurisdiction over the subject matter where Sears had attorned to the jurisdiction and Missouri had a real and substantial connection with the dispute. Also, there was no “massive” or “convincing” evidence to persuade the court not to give effect to the contractual choice of Missouri as the most convenient forum for the litigation. See paragraphs 1 to 54. In supplementary reasons respecting costs, the court awarded the plaintiffs solicitor and client costs because Sears’ lawyer had reversed his position on the question of jurisdiction. See paragraphs 55 to 65.
Conflict of Laws – Topic 607
Jurisdiction – General principles – Basis of jurisdiction – Carrying on business – Real and substantial connection – See paragraphs 29, 33.
Conflict of Laws – Topic 643
Jurisdiction – Submission to jurisdiction – What constitutes – See paragraphs 28, 29, 32.
Conflict of Laws – Topic 7286
Contracts – Jurisdiction – Choice of forum by parties – See paragraphs 36 and 37.
Practice – Topic 7452
Costs – Solicitor and client costs – Entitlement to solicitor and client costs – Neglect or misconduct – See paragraphs 59 to 64.
Cases Noticed:
Dunlop Tire v. Selfridge, [1915] A.C. 847, refd to. [para. 11].
Four Embaracadero Centre Venture Ltd. v. Kalen (1988), 65 O.R.(2d) 551 (H.C.), refd to. [para. 26].
Green (David N.) v. Capital Corp. (1991), 5 C.P.C. 140 (Ont. Gen. Div.), refd to. [para. 32].
Great Pacific Contracting Ltd. v. Harwyn Properties Ltd. (1981), 29 B.C.L.R. 145; 21 C.P.C. 280 (S.C.), dist. [para. 33].
Adams v. Cape Industries, [1991] 1 All E.R. 929 (C.A.), dist. [para. 33].
Auto Haus Frohlich Ltd. and Frohlich v. Volkswagen Canada Inc., [1986] 1 W.W.R. 380; 65 A.R. 271; 41 Alta. L.R.(2d) 5 (C.A.), consd. [para. 36].
Richardson v. Mellish (1824), 2 Bing 229; 130 E.R. 294, consd. [para. 41].
Harman v. Secretary of State for Home Affairs, [1983] A.C. 280, refd to. [para. 49].
Lac Minerals v. New Cinch Uranium (1985), 50 O.R.(2d) 260 (H.C.), consd. [para. 49].
Goodman v. Rossi (1995), 83 O.A.C. 38; 24 O.R.(3d) 359 (C.A.), consd. [para. 50].
Halushka v. University of Saskatchewan (1965), 53 D.L.R.(2d) 436 (Sask. C.A.), refd to. [para. 51].
Four Embaracadero Centre Venture et al. v. Mr. Greenjeans Corp. et al. (1988), 64 O.R.(2d) 746 (H.C.), refd to. [para. 53].
Mortimer v. Cameron (1994), 68 O.A.C. 332; 17 O.R.(3d) 1 (C.A.), consd. [para. 59].
Minuteman Press of Canada Co. v. Touche Ross & Co. (1994), 27 C.P.C.(3d) 70 (Ont. Gen. Div.), refd to. [para. 64].
Murano v. Bank of Montreal, [1996] O.J. No. 2415, refd to. [para. 64].
Apotex Inc. v. Egis Pharmaceuticals et al. (1991), 4 O.R.(3d) 321 (Gen. Div.), refd to. [para. 64].
Statutes Noticed:
Rules of Civil Procedure (Ont.), rule 30.1.01(3) [para. 47]; rule 30.1.01(8) [para. 48].
Authors and Works Noticed:
Dicey and Morris, The Conflict of Laws (11th Ed.), rule 46 [para. 27].
Horton, William G., Enforcement of Foreign Judgments Worldwide, p. 99 [para. 35].
Counsel:
Orlando V. Da Silva, for the plaintiffs;
Myron W. Shulgan, Q.C., for the defendant.
This motion and submissions on costs were heard by Zalev, J., of the Ontario Superior Court, who released the following reasons for decision on the motion on May 28, 1999 and reasons for decision on costs on July 5, 1999.
