Redress Risk Management (post until May 31/19)

Challenging jurisdiction: Van Damme v. Gelber

By Ruzbeh Hosseini

The facts in Van Damme v. Gelber, 2013 ONCA 388 arise from an action commenced by Alexandre Van Damme in the State of New York for specific performance relating to the delivery of a painting by Nahum Gelber, an Ontario resident.

Gelber responded to the New York action by bringing a motion challenging the jurisdiction of the New York Court. Gelber was unsuccessful on his motion and he was ordered by the New York Court to file a Statement of Defence and proceed with discoveries. Gelber complied.

Once discoveries were complete in the New York action, Van Damme moved for summary judgment for specific performance. Gelber also moved for summary judgment on the basis that:

  1. Gelber was not a party to or bound by the forum selection clause;

  2. The contract relied upon by Van Damme was void;

  3. Van Damme abandoned the contract; and

  4. Van Damme failed to perform his obligations under the contract in a timely manner.

Van Damme was successful on his motion and judgment was granted for delivery of the painting. Van Damme subsequently moved in Ontario for an order recognizing and enforcing the New York judgment, which was also successful. Gelber appealed to the Ontario Court of Appeal, arguing that the motion judge erred by:

  1. Holding that the New York court properly took jurisdiction under Canadian conflict of law principles; and

  2. Failing to consider whether specific performance was an appropriate remedy had the claim been brought in Ontario.

The Ontario Court of Appeal dismissed Gelber’s appeal. With respect to the jurisdiction issue, the Court held that Gelber had attorned to the jurisdiction of the New York Court. By seeking to dismiss the New York action upon the defences that the contract was void and that Van Damme had abandoned the contract or failed to perform in a timely manner, Gelber’s summary judgment motion went to the substantive merits of Van Damme’s claim and far beyond issues of jurisdiction.

The Court of Appeal held that by advancing substantive defences to Van Damme’s claims, Gelber implicitly accepted that the New York court had jurisdiction.

With respect to the second ground of appeal, the Court of Appeal held that it also failed for two reasons:

  1. The motion judge was not asked to refuse to recognize the New York judgment on the basis that specific performance would not be an appropriate remedy had the action been brought in Ontario; and

  2. Had the action been tried in Ontario and had the Ontario court made the same finding as the New York court, specific performance would have been an appropriate remedy.

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