Schrager, Healy, Bachand

Appeal from a judgment of the Superior Court dismissing a declinatory exception. Dismissed, with dissenting reasons.

The parties had a business relationship that lasted approximately 8 years, during which the appellant acted as intermediary between the respondent and its suppliers, located primarily in China. Their dispute arose when the respondent obtained information suggesting that the appellant had stolen millions of dollars from it using a clandestine scheme. The trial judge dismissed the appellant’s declinatory exception challenging the international jurisdiction of the Quebec courts over the respondent’s action.

The respondent’s economic loss was clearly suffered in Quebec, where it overpaid for goods (or where it received less goods than it paid for) because of the appellant’s actions, albeit those actions mainly occurred outside Quebec. The United Nations Convention on Contracts for the International Sale of Goods (CQLR, c. C-67.01, schedule) does not change the analysis of where an injury was suffered, because the present action seeks the extracontractual liability of an individual. As regards the appellant’s fault by way of omission to inform the respondent’s representatives about the overbilling, since the appellant should have told them about the fees he was being paid when meeting with them in Quebec, the fault by omission occurred in Quebec. The contractual arrangement between the respondent’s parent company and the appellant’s company containing the forum selection clause designating the Belgian courts is not an impediment to the respondent seeking the appellant’s extracontractual liability. Neither the appellant nor the respondent is a party to the contracts, and the subject matter of the litigation is not the subject matter of either of the contracts at issue. The parties may have intended that a claim by the respondent against the appellant be tried in Belgium, but that is not what is expressed in the agreements. In the circumstances, the judge was correct to conclude that the Quebec courts have jurisdiction pursuant to article 3148(3) Civil Code of Québec. (S.Q. 1991, c. 64).

Bachand J.A. would have allowed the appeal. He opined that the judge committed a reviewable error by concluding that the respondent’s alleged loss was suffered in Quebec, being of the view that the situs of the alleged loss corresponds more to the place where the facts and acts, whereby the appellant orchestrated the misappropriation of funds, occurred. He agreed with the appellant on the nature of the faults raised, stating that they were faults of action – or of commission – not faults of omission. He considered this error determinative because the faults of action in question occurred outside Quebec.

Text of the decision: http://citoyens.soquij.qc.ca