Travelers Casualty and Surety Company of Europe Ltd & Ors v Sun Life Assurance Company of Canada (UK) Ltd & Anor Rev 1

Where claims are brought against defendants within and outside the jurisdiction, the court must assess the dispute in the round. It must identify the jurisdiction with the most real and substantial connection, balancing all relevant factors rather than giving automatic priority to the first proceedings or to either group of defendants. A stay requires a clearly and distinctly more appropriate alternative forum, and it must remain just to deprive the claimant of an English trial. The court may entertain negative declaratory relief where declarations would usefully determine liability, but must scrutinise the proceedings for inappropriate forum shopping. A composite insurance policy may have a single governing law; at an interlocutory stage, competing good arguable cases may prevent a final determination of that law.

The insurers sought declarations that a claim under a global insurance policy was excluded by a warranty or by late notification. They applied in England against Sun Life UK and, with permission, Sun Life Canada. Sun Life sought a stay in favour of proceedings it had begun in the Ontario Superior Court of Justice, where it claimed policy recovery and punitive damages.

The dispute concerned the policy’s governing law, the effect of Ontario relief-from-forfeiture legislation, the factual significance of UK regulatory dealings, the location of evidence and witnesses, and the utility and propriety of the English negative declarations.

1. Application dismissed. The court refused to stay the proceedings against Sun Life UK and refused to set aside permission to serve Sun Life Canada out of the jurisdiction.
2. Article 2 of Council Regulation 44/2001 did not, on the authorities then binding on the court, remove the English court’s power to consider a stay in favour of a non-member State. Re Harrods remained binding, having been supported by the post-UGIC Court of Appeal authorities in Ace Insurance, American Motorists and Anton Durbeck. The contrary first-instance approach in Owusu, followed in DSM Anti-Infectives, was not followed.
3. For the claim against the English defendant, the applicable forum non conveniens test required Sun Life UK to show a competent alternative forum clearly and distinctly more appropriate than England, and that it would not be unjust to deprive the insurers of an English trial. The position of both defendants had to be assessed in the round, following Du Pont.
4. The policy was composite and multi-partite. It was not appropriate at this stage to divide it into different governing laws for different insureds or risks. There were good arguable cases for both English and Ontario law. The court therefore deferred final determination of the applicable law, while recognising that Ontario-law evidence might be required at trial.
5. Ontario law differed materially on relief from forfeiture for imperfect compliance with an insurance policy and on punitive damages. Those differences did not give Ontario a decisive advantage. The pleaded punitive-damages claim appeared unlikely to meet the Whiten threshold and was treated as having been raised in terrorem.
6. The central factual investigation concerned the UK regulatory history, the knowledge of relevant UK and Canadian personnel, notification, and expenses incurred in England. The evidence, witnesses and regulatory material overall favoured England. Negative declarations would usefully determine the two principal liability issues and were not improper merely because the insurers had commenced proceedings first.
7. The dispute had its most real and substantial connection with England and would be more conveniently tried there. The proceedings were therefore continued in England.

First-instance decision. The judgment records related proceedings in the Ontario Superior Court of Justice, but no appellate decision in the present English proceedings.