Mrs Roy (the plaintiff) arranged a vacation through North American Leisure Group Inc, which included flights to and from the Dominican Republic and a seven-day cruise on a ship registered in the Bahamas and owned by a related company, Airtours Plc, which had its head office in and operated from England. The vacation literature sent to the plaintiff specified separate contracts with North American Leisure Group Inc and Airtours Plc (the defendants). The cruise brochure stated that English law governed the cruise contract. In addition, the brochure referenced the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 (the Athens Convention 1974) and alerted the reader that a copy of this Convention was available on request. The plaintiff allegedly contracted an airborne virus from unsafe conditions on the cruise ship. More than three years after she returned from the cruise, the plaintiff sued the defendants in contract and in tort.

The motion Judge held that Ontario law applied rather than the law of England or the Bahamas, so that the action against the defendants was not barred by the two-year limitation period in the Athens Convention 1974, to which England and the Bahamas, but not Canada, were signatories at the time of the cruise: see Roy v North American Leisure Group Inc [2003] CanLII 23901 (CMI1102). The defendants appealed.

Held: Appeal allowed.

As a general rule in tort actions, the choice of substantive law is the law of the jurisdiction where the activity occurred: the lex loci delicti. A rigid application of such a rule could lead to injustice, and any exceptions to the general rule required careful definition. The fact that the plaintiff's action would be precluded by the operation of the Athens Convention 1974 limitation was not the type of injustice that justified an exception to the principles informing choice of law. Thus, the motion Judge erred in his determination that, because the parties would otherwise suffer injustice by operation of the limitation period, Ontario law applied. The contract between the parties, reflected in the cruise brochure, specified England as the choice of law in any action arising out of the contract. The claim against the defendants was such an action. The mere fact that the plaintiff failed to read the term was not determinative of the result.