2021 QCCA 1473, 2021 QCCA 1473

Huang c. Yan 2021 QCCA 1473 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-029276-201 , 500-09-029277-209 (500-17-111266-204, 500-17-111035-203) DATE: October 4, 2021 CORAM: THE HONOURABLE MARK SCHRAGER, J.A. CHRISTINE BAUDOUIN, J.A. FRÉDÉRIC BACHAND, J.A. N o : 500-09-029276-201 TZU-YIN HUANG APPELLANT – Plaintiff v. XIN HONG YAN YANG ZHANG 8478791 CANADA INC. RESPONDENTS – Defendants N o : 500-09-029277-209 ZHIRONG LI APPELLANT – Plaintiff v. XIN HONG YAN YANG ZHANG 8478791 CANADA INC.

RESPONDENTS – Defendants JUDGMENT [ 1 ] The Court is seized of two appeals brought against the same judgment rendered on November 26, 2020 by the Superior Court, District of Montreal (the Honourable Madam Justice Guylène Beaugé), which granted the Respondents’ declinatory exceptions and dismissed each of the Appellants’ actions based on the “Applicable Law and Dispute Resolution” clause contained in two immigration service agreements (the “Agreements”). [ 2 ] The Appellants are foreign citizens who retained the services of Respondent 8478791 Canada Inc., a Quebec-based immigration services company also known as Jiahe Immigration Service Inc. (“Jiahe”), to facilitate their immigration process.

Following the failure of that process, they each instituted an action alleging contractual breaches as well as fraud against Jiahe and the other Respondents, Ms. Yan and Mr. Zhang, in their respective capacities as shareholder, president and director of Jiahe. Both Ms. Yan and Mr. Zhang reside in Quebec. [ 3 ] The issue before the Superior Court essentially revolved around the

interpretation of the “Applicable Law and Dispute Resolution” clause included in the Agreements. According to the Respondents, the clause was a clear and mandatory forum selection clause that conferred upon Chinese courts exclusive jurisdiction over all disputed matters. The Appellants disagreed with the Respondents’

interpretation and argued that, since the basis of their recourses was both contractual and extracontractual, Quebec courts

maintained jurisdiction over their actions. [ 4 ] The disputed clause reads as follows: Applicable Law and Dispute Resolution 1. For the performance of this agreement, involved

definitions and disputes, the applicable law is relevant bills of the People’s Republic of China. 2. The Provider and the Client are bound to coordinate to work out solutions to disputes concerning this agreement.

If a solution to the dispute cannot be reached, either party has the right to pursue a lawsuit in the governing court. [ 5 ] The judge concluded that Quebec authorities did not have jurisdiction to entertain either action because the above clause was a clear forum selection clause that conferred exclusive jurisdiction upon Chinese courts over all disputed matters: [11] De l’avis du Tribunal, le moyen déclinatoire est bien fondé.

En effet, le litige origine du défaut d’inexécution du contrat de services d’immigration, et les allégations de fraude des demandes introductives d’instance modifiées ne suffisent pas [à] qualifier le différend des parties d’extracontractuel.

Même si, comme le plaident les demanderesses, un dirigeant d’entreprise peut engager sa responsabilité personnelle s’il trompe un cocontractant par des représentations mensongères, ou encore pose des actes frauduleux, il demeure qu’en l’espèce, le litige a trait au rapport contractuel des parties, ou y est intimement lié. [12] La jurisprudence enseigne que les clauses d’élection de for doivent recevoir une interprétation large, car il en va de l’autonomie de la volonté des parties.

La Cour d’appel précise que la démarche interprétative doit privilégier une « approche contextuelle centrée sur la découverte de l’intention des parties, ce qui exige de tenir compte de la lettre de la clause ». [13] En l’espèce, la clause d’élection de for est claire et confère aux tribunaux chinois une juridiction exclusive.

Le Tribunal ajoute que l’allégation de fautes de nature extracontractuelle ne fait pas échec à cette clause compromissoire en raison de sa formulation qui vise également une demande ayant un fondement extracontractuel en lien avec le contrat de services. [ 6 ] The parties’ positions remain in their essence unchanged in appeal. The Appellants submit that the trial judge erred in concluding that the allegations of fraud were insufficient to characterize the dispute between the parties as being extracontractual and therefore outside the scope of the disputed clause.

The Respondents argue that the judge did not err with respect to the determination of the nature of the present case and that the choice of forum clause represents the parties’ clear intention to confer jurisdiction upon the Chinese courts in the present matters and should be given a large and liberal

interpretation. [ 7 ] For the following reasons, the appeal will be allowed. [ 8 ] Both parties are mistaken as to the real dispositive issue in the present case. While arguing on whether the judge erred in deciding that the allegations of fraud were insufficient to characterize any part of the dispute between the parties as extracontractual, or if she erred in her application of a “large and liberal

interpretation” with respect to the disputed clause, the parties mistakenly assumed that the “Applicable Law and Dispute Resolution” clause constituted a forum selection clause. [ 9 ]

Article 3111 C.C.Q. lays out the general rule by which the parties to a contract may designate, expressly or implicitly, the law that will govern the content of that juridical act. 3111. A juridical act, whether or not it contains any foreign element, is governed by the law expressly designated in the act or whose designation may be inferred with certainty from the terms of the act. Where a juridical act contains no foreign element, it remains nevertheless subject to the mandatory provisions of the law of the State which would apply in the absence of a designation.

The law may be expressly designated as applicable to the whole or to only part of a juridical act. 3111. L’acte juridique, qu’il présente ou non un élément d’extranéité, est régi par la loi désignée expressément dans l’acte ou dont la désignation résulte d’une façon certaine des dispositions de cet acte. Néanmoins, s’il ne présente aucun élément d’extranéité, il demeure soumis aux dispositions impératives de la loi de l’État qui s’appliquerait en l’absence de désignation. On peut désigner expressément la loi applicable à la totalité ou à une

partie seulement d’un acte juridique. [ 10 ] The designation of a foreign law in a contract, however, does not in itself deprive Quebec courts of their jurisdiction. Pursuant to

article 2809 C.C.Q. , Quebec courts have the ability to apply foreign laws, provided those laws are pleaded and, if required, proven . As the Court, speaking through Bich, J.A. has affirmed, “ les tribunaux québécois peuvent fort bien appliquer la loi étrangère (dont la preuve peut être faite conformément à l'

article 2809 C.c.Q . ) et ils ne sont pas privés de leur compétence par le choix que les parties ont fait de cette loi" . [1]

[ 11 ] A clause that designates the applicable law, as provided for in

article 3111 C.C.Q. , differs from a forum selection clause that goes to the question of jurisdiction. As Professor Gérald Goldstein rightly pointed out, one should not be mistaken for the other: Au plan terminologique, sinon au plan des concepts mêmes, il existe une confusion dans certaines décisions entre les clauses de choix de la loi, permises par [l’

article 3111 C.c.Q. ] et celle d’élection de for, autorisées par l'

article 3148 C.c.Q. Si leur régime peut être analogue, au plan de la loi qui leur est applicable, ces deux types de clauses n’ont absolument pas le même objet et une telle assimilation favorise la confusion entre deux questions fondamentalement différentes en droit international privé : la loi applicable et le tribunal compétent . Depuis le Moyen-Âge, on a admis que le tribunal compétent pouvait appliquer une autre loi que la sienne et c'est précisément cette conception qui a permis au droit international privé de se développer.

Aussi, aucune affirmation ne pourrait être plus fondamentalement erronée, de ce point de vue, que d'avancer qu'une clause de choix du tribunal serait par la même une clause de choix de la loi, ou vice-versa . [2] [References omitted; emphasis added] [ 12 ]

Article 3148 C.C.Q., found under Title Three, which is entitled “International jurisdiction of Québec authorities”, is unambiguous: 3148. In personal actions of a patrimonial nature, Québec authorities have jurisdiction in the following cases: […] However, Québec authorities have no jurisdiction where the parties have chosen by agreement to submit the present or future disputes between themselves relating to a specific legal relationship to a foreign authority or to an arbitrator, unless the defendant submits to the jurisdiction of the Québec authorities. 3148.

Dans les actions personnelles à caractère patrimonial, les autorités québécoises sont compétentes dans les cas suivants: […] Cependant, les autorités québécoises ne sont pas compétentes lorsque les parties ont choisi, par convention, de soumettre les litiges nés ou à naître entre elles, à propos d’un rapport juridique déterminé, à une autorité étrangère ou à un arbitre, à moins que le défendeur n’ait reconnu la compétence des autorités québécoises. [Emphasis added] [ 13 ] When a party to a contract invokes a forum selection clause in support of a declinatory exception, the jurisprudence is clear as to the importance of its wording.

The clause must be mandatory and must clearly, irrevocably and precisely confer exclusive jurisdiction upon a foreign authority. As the Supreme Court specified, there are limits imposed on the expression of the autonomy of the parties in matters relating to wording of choice of forum clauses: [27] One last type of exception to the autonomy of the parties relates to the wording of arbitration or choice of forum clauses. Whether the jurisdiction of the Quebec authorities is ousted in a specific case will be decided on the basis of the wording of the jurisdiction clause adopted by the parties.

The clause must be mandatory and must clearly and precisely confer exclusive jurisdiction on the foreign authority. There must also be a meeting of minds between the parties; otherwise the clause is invalid . [3] [Emphasis added] [ 14 ] The Applicable Law and Dispute Resolution clause in the present case has none of these essential characteristics. The first paragraph is nothing more than a choice of applicable law clause that does not pertain to jurisdiction.

The second paragraph patently lacks any mandatory terms that may be construed, even implicitly, as an obligation on either party to institute legal proceedings exclusively before a specific court, nor does it designate or even remotely identify any specific court for that purpose. [ 15 ] Even if we were to accept, as Respondents submit, that the terms “governing court” in the second paragraph relates to the courts of the People’s Republic of China, the wording does not suggest that it would be an exclusive attribution of jurisdiction to the exclusion of other courts. [ 16 ] Therefore, the judge erred in law by way of her characterization of the disputed contractual clause.

Even assuming that both parties considered the clause to be a forum selection clause, that characterization would not binding on the Court [4] and it is plainly at odds with the content, wording, nature and legal effects resulting therefrom.

In any event, the Court is not convinced by the Respondents’ argument to the effect that certain passages of the Appellants’ memorandum reflect the parties’ clear agreement to characterize the Applicable Law and Dispute Resolution clause as an exclusive forum selection clause. [ 17 ] Absent a valid forum selection clause and given that the Respondents are all domiciled in Quebec, the Court concludes that Quebec courts have jurisdiction over the subject matters of these cases.

FOR THESE REASONS, THE COURT: In file number 500-09-029276-201 : [ 18 ] ALLOWS the appeal; [ 19 ] SETS ASIDE the original judgment rendered on November 26, 2020 by the Superior Court, district of Montreal (the Honourable Madam Justice Guylène Beaugé); [ 20 ] DISMISSES the Demande en exception déclinatoire des défendeurs pour cause d’absence de compétence des autorités québécoises . [ 21 ] THE WHOLE with legal costs, in first instance and appeal.

In file number 500-09-029277-209 : [ 22 ] ALLOWS the appeal; [ 23 ] SETS ASIDE the original judgment rendered on November 26, 2020 by the Superior Court, district of Montreal (the Honourable Madam Justice Guylène Beaugé); [ 24 ] DISMISSES the Demande en exception déclinatoire des défendeurs pour cause d’absence de compétence des autorités québécoises; [ 25 ] THE WHOLE with legal costs, in first instance and appeal. MARK SCHRAGER, J.A. CHRISTINE BAUDOUIN, J.A. FRÉDÉRIC BACHAND, J.A.

Mtre Daniel Brook BROOK LEGAL For the Appellants Mtre Rita Nathalie Menneh Mtre Samantha D Bouchard MENNEH LÉGAL Fort the Respondents Date of hearing: September 30, 2021