In our increasingly interconnected world, wealthy individuals and business owners frequently engage in cross-border transactions and business. These activities, while offering immense opportunities, also carry the risk of international disputes.

A central question that arises for Canadian residents when an incident occurs abroad is whether they can pursue a claim in a Canadian court.

Does a Canadian connection, such as a credit card agreement, give Canadian courts jurisdiction, even when the injury itself happened overseas?

This question was at the heart of the landmark Supreme Court of Canada decision in Sinclair v. Venezia Turismo, 2025 SCC 27. In a split decision (5 vs 4), on 31/Jul/2025, the Court delivered a critical message to those with international interests: a Canadian court will not automatically assume jurisdiction over a foreign defendant just because an Ontario-made contract is tangentially related to a foreign incident. The case serves as a powerful reminder of the importance of the real and substantial connection test and the legal hurdles that must be overcome to bring a foreign party before a Canadian court.

The Legal Framework: A Two-Stage Test

For a Canadian court to assume jurisdiction over an extra-provincial or foreign defendant, it must be satisfied that there is a real and substantial connection between the circumstances giving rise to the claim and the forum where the claim is brought. The Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, established a two-stage test to guide this determination.

1. Stage One: Establishing a Presumptive Connecting Factor. The plaintiff must first demonstrate that one of the four non-exhaustive factors that presumptively allow a court to assume jurisdiction exists. For the purposes of this case, the Sinclairs relied on the fourth factor: that “a contract connected with the dispute was made in the province”. This is considered a “relatively low bar” to meet.
2. Stage Two: Rebutting the Presumption. If a presumptive factor is established, the burden shifts to the defendant to rebut the presumption of jurisdiction. The defendant must show that the connecting factor does not, in the specific circumstances of the case, point to a real relationship between the dispute and the forum, or points to only a weak relationship. This stage assesses the strength of the connection, while the first stage assesses its existence.

The Court in Sinclair explained that this two-stage approach aims to reconcile the need for order and predictability with the principle of fairness to all parties. It ensures that parties can reasonably expect whether they might be subject to a Canadian court’s authority while protecting foreign defendants from being pursued in jurisdictions with little or no connection to the dispute.

BC law codified the real and substantial connection test in the Court Jurisdiction and Proceedings Transfer Act. The test, as clarified in the Sinclair case, is crucial to guide people involved in international litigation in British Columbia.

The Factual Context: From Toronto to a Venetian Canal

The case of Sinclair v. Venezia Turismo began with a seemingly routine travel booking. Duncan Sinclair and his wife, Michelle Sinclair, were Toronto residents who held a premium American Express Centurion credit card, which provided them access to a travel concierge service.

The Sinclairs used this service to book a trip to Europe. While in Florence, Italy, Mr. Sinclair called the service to arrange a water taxi from the Venice airport to their hotel.

The Amex Canada agent secured a booking through a third-party travel service provider, Carey International Inc..

The Sinclairs’ journey on the water taxi, owned by an Italian company named Venice Limousine S.R.L. and operated by an Italian driver, ended in a crash with a wooden structure. Mr. Sinclair suffered serious injuries.

After returning to Canada, the Sinclairs sued in Ontario, naming several defendants, including the Italian companies and Amex Canada. While Amex Canada and Carey International did not contest jurisdiction, the Italian companies moved to dismiss or stay the action against them, arguing that an Ontario court had no jurisdiction.

The motion judge found that the plaintiff’s claims could proceed in Ontario. She concluded that the Centurion Cardmember Agreement, an Ontario contract, had a sufficient connection to the dispute to establish presumptive jurisdiction under the Van Breda test.

The Court of Appeal for Ontario overturned this decision, with the majority finding that the presumptive connecting factor had not been established, and even if it had, it was successfully rebutted. The Supreme Court of Canada agreed with the Court of Appeal’s final conclusion.

Why the Plaintiff’s Claim Did Not Justify Jurisdiction

The Supreme Court, in its majority decision, acknowledged that the Centurion Cardmember Agreement was likely an Ontario contract that was “connected with the dispute”. However, this was not enough. The Court ruled that the Italian defendants had successfully rebutted the presumption of jurisdiction because the connection between that Ontario contract and the foreign defendants was not “real and substantial”.

The majority’s reasoning highlighted several critical points:

• The Connection Was Weak: The dispute arose from a tort that occurred entirely in Italy. The water taxi was owned by an Italian company, dispatched by another Italian company, and operated by an Italian national. The only link to Ontario was that Mr. Sinclair made a non-binding reservation through a Canadian-based credit card’s concierge service. The Court characterized this as a weak and “attenuated” connection.
• The Problem of “Jurisdictional Overreach”: The Court warned that accepting such a weak connection would lead to a flood of “jurisdictional overreach”. If using a Canadian credit card to book a service abroad was enough to bring foreign service providers before a Canadian court, it would create an unfair and unpredictable system. Service providers in tourist destinations like Venice would have no way of knowing they could be sued in Canada simply because one of their clients used an Ontario credit card. This would run counter to the core principles of order and fairness that underpin the Van Breda test.
• A Defendant-Specific Analysis is Required: The Court underscored that jurisdiction must be analyzed from the perspective of each individual defendant. The fact that Amex Canada and Carey International attorned to the jurisdiction of the Ontario court could not be used to “bootstrap” a finding of jurisdiction over the Italian defendants. A presumptive connecting factor must exist for each defendant.

In essence, the court determined that the dispute was fundamentally about a tort in Italy, not a breach of contract in Ontario. The Ontario contract was a step in a chain of events, but it was too far removed from the actual injury and the foreign parties to justify a Canadian court asserting authority over them.

Lessons for Business Owners with International Parties

The Sinclair decision provides a clear and sobering reality check for business owners and individuals who have interests across international borders. It highlights that navigating these disputes requires careful legal planning and a proactive approach to risk management.

1. Do Not Assume Your “Home Court Advantage”: The most significant takeaway is that a Canadian connection, such as a business agreement with a Canadian company, is not a golden ticket to Canadian jurisdiction. The Court’s emphasis on the strength of the connection to each individual defendant means that simply having a contract with a Canadian company that facilitated a foreign service is insufficient to sue the foreign provider in Canada. The link must be far more direct and meaningful.
2. The Power of Contractual Precision: For your business dealings, insist on explicit contractual clauses. A forum selection clause is a powerful tool. This clause, agreed upon by all parties, specifies which country’s courts will have jurisdiction over any dispute. It provides a level of certainty and predictability that the common law “real and substantial connection” test cannot. For example, a contract with an international software development team or a manufacturing plant should explicitly state that any disputes will be heard in a specific, agreed-upon jurisdiction.
3. Ensure Your Pleadings are Precise: The Sinclair majority highlighted the importance of pleading with sufficient particularity. When asserting jurisdiction based on a contract, the pleading must make out the essential elements of a contract—offer, acceptance, and consideration—and demonstrate a clear connection between the contract and the dispute. Vague references to a “constellation of contracts” will not suffice.
4. Avoid Being Sued in Canada with Weak Connections: Business owners can take proactive steps to avoid being subject to a Canadian court’s jurisdiction for foreign disputes.
   • Specify Jurisdiction in Contracts: This is the most effective tool. Include a forum selection clause that designates a specific jurisdiction, ideally one where your business is located and has a clear presence.
   • Avoid Attorning to Jurisdiction: If a foreign party attempts to sue you in Canada on a weak connection, do not file a statement of defence or take any steps that could be seen as voluntarily submitting to the court’s authority. Instead, immediately challenge the court’s jurisdiction on a preliminary motion.
   • Document the Nature of the Relationship: Maintain clear records of all business dealings, particularly with international parties. The documentation should demonstrate that any connections to Canada are indirect and that the primary business activities and services are provided in the foreign jurisdiction. This evidence will be crucial for the rebuttal stage of the Van Breda test.

Conclusion: A Return to Foundational Principles

The Supreme Court’s decision in Sinclair v. Venezia Turismo is a clear victory for international litigation principles of order, fairness, and comity. It brings a renewed focus on the need for a truly real and substantial connection to a Canadian forum before Canadian courts assert authority over foreign defendants.

The lesson for business owners and individuals with global reach is simple: do not mistake a tenuous Canadian link for a jurisdictional guarantee. Success in these complex disputes hinges on understanding the legal framework, ensuring your contracts are drafted precisely, and recognizing the limits of a Canadian court’s authority. Legal tools like forum selection clauses and a clear understanding of jurisdiction are as crucial as any asset or investment in international commerce and travel.

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For the past two decades, we have extensive experience in cases involving conflict of laws. If you encounter such a claim or need to defend against one similar to this case, contact Roland Luo.

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