2008 BCSC 501 Gordon v. Venables

Before: The Honourable Mr. Justice Metzger

Reasons for Judgment

Peter Lockhart Gordon:	In Person
Counsel for the Respondents	M. S. Kerwin
Date and Place of Trial/Hearing:	20080331
	Duncan, B.C.

BACKGROUND

[1] In this application, the respondents ask this court to decline jurisdiction over the proceeding on the basis of the forum non conveniens doctrine codified in s. 11 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (“CJPTA”).

[2] At issue is the administration of a testamentary trust established by the will of Percival Hector Gordon, who died in 1975 (the “Trust”). The will provided that the residue of the estate would become the capital of the Trust. The income from the Trust would be paid to Helen Gordon Venables, the daughter of the deceased, for life. Ms. Venables is one of the respondents on this application. Upon her death, the will provided that the capital in the Trust would be divided equally between the grandsons of the deceased, the petitioner Peter Lockhart Gordon and the co‑respondent Michael K.G. Venables.

[3] Ms. Venables was the executor of the will and the trustee of the Trust for approximately thirty years. She lived in Ontario throughout this period, where Mr. Venables also lives. Her trustee duties were delegated throughout to National Trust (later Scotia Cassels).

[4] Mr. Gordon moved to British Columbia in 2003. Ms. Venables suffered a serious stroke in November 2005. In September 2006, Mr. Gordon, who was the alternate executor named in the will, asserted his right to become a trustee of the Trust due to the incapacity of Ms. Venables. Mr. Gordon subsequently moved all of the Trust’s assets from Scotia Cassels in Ontario to MD Management which has an office in Nanaimo, British Columbia.

[5] In January 2008, Michael Venables and Ms. Venables commenced an action in Ontario to remove Mr. Gordon as trustee, and for an order that he pass his accounts. Mr. Venables and Ms. Venables allege in the Ontario action that Mr. Gordon has acted imprudently and improperly resulting in the deterioration of Trust assets, that there is a high the degree of hostility between himself and the other beneficiaries, and that he has placed himself in a conflict of interest. Mr. Gordon has retained Ontario counsel who has filed an application in Ontario to contest the jurisdiction of the Ontario court. That application will be heard no earlier than May 2008.

[6] In February 2008, Mr. Gordon commenced this action in British Columbia for an order that he be paid $18,740.44 from the estate. Mr. Gordon is a lawyer, and there is some ambiguity as to whether the amount he seeks is for trustee services or legal services or both. I find that it is at least predominantly for trustee services.

[7] Mr. Venables and Ms. Venables subsequently brought this application urging this court to decline jurisdiction.

LEGAL FRAMEWORK

[8] The respondents concede that this court has jurisdiction simpliciter under s. 10 of the CJPTA. All that is required in this case is therefore an analysis under s. 11 of whether this court should decline jurisdiction because it is the forum non conveniens. That section provides:

11 (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding.

(2) A court, in deciding the question of whether it or a court outside British Columbia is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including

(a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum,

(b) the law to be applied to issues in the proceeding,

(d) the desirability of avoiding conflicting decisions in different courts,

(e) the enforcement of an eventual judgment, and

(f) the fair and efficient working of the Canadian legal system as a whole.

[9] The leading case in this province is the judgment of Newbury J.A. (Mackenzie and Kirkpatrick JJ.A. concurring) in Lloyd’s Underwriters v. Cominco Ltd., 2007 BCCA 249. There, it was noted at para. 55 that the CJPTA made some substantive changes to the law by moving the question of jurisdiction simpliciter out of Rule 13 of the Supreme Court Rules, B.C. Reg. 221/90 and into s. 10 of the Act, where some of the criteria were more flexible. The CJPTA also provided for the transfer of proceedings to or from a foreign court. Importantly for our purposes, however, the court held that “[w]ith respect to forum conveniens, on the other hand, the Act seems intended to codify, rather than effect substantive changes to, the previous law”. The court found that the factors in s. 11(2) can generally be linked with the factors in the pre-CJPTA jurisprudence, and that the list in that subsection was not exhaustive. Case law before and after the introduction of the CJPTA therefore continues to be relevant.

[10] The court gave the following further guidance on the application of s. 11:

56. Section 11(1) requires the court to consider whether the court of another state is “a more appropriate forum” for the proceedings and s. 11(2) refers to whether the domestic or foreign court is “the more appropriate forum”. This conforms broadly to the common law of forum non conveniens as adopted (from Scottish law) by the House of Lords in the seminal 1986 decision of Spiliada Maritime Corp. v. Cansulex Ltd. [1986] 3 All E.R. 843. ...

57. Spiliada was adopted, with some modification, by the Supreme Court of Canada in Amchem, although Amchem was about the granting of anti-suit injunctions rather than stays of proceedings. At p. 912 of his reasons for the Court, Sopinka J. described the anti-suit injunction as “a more aggressive remedy” ...

58. One of the Court’s modifications to Spiliada concerned the role of juridical advantage. Sopinka J. said he saw no reason in principle why it should be treated as “a separate and distinct condition rather than being weighed with the other factors which are considered in identifying the appropriate forum.” (At 919.) The weight to be given to this factor was linked to the reasonable expectations of the parties, given their connections with the jurisdiction in question. In the absence of a real and substantial connection, a party could have no reasonable expectation of invoking the law of the jurisdiction in question, and his or her seeking out that jurisdiction would be regarded as “forum shopping”. Where on the other hand the connections to the jurisdiction in question are such that the party could reasonably expect to avail himself or herself of the forum, he or she has a “legitimate claim to the advantages that that forum provides.” (At 920.)

...

61. … s. 11(2) … does not change the weighing or ‘balancing’ exercise mandated by the cases. The process remains a discretionary one which takes into account the facts of each particular case…

(emphases in original)

The Court of Appeal found that there was ample evidence to support the Chambers judge’s conclusion that British Columbia was the more appropriate forum.

[11] The Court of Appeal next turned to the role of the principle of comity in a s. 11 analysis. The appellant had relied upon extracts from Esson J.A. in 472900 B.C. Ltd. v. Thrifty Canada Ltd. (1998), 57 B.C.L.R. (3d) 332, at para. 32, Rowles J.A. in Westec Aerospace Inc. v. Raytheon Aircraft Co., 1999 BCCA 243, at para. 47, aff’d. 2001 SCC 26, and Lowry J.A. in Ingenium Technologies Corp. v. McGraw-Hill Cos., 2005 BCCA 358, at paras. 21-22 to bolster its argument that once a foreign jurisdiction had accepted jurisdiction, the British Columbia court was all but obliged to grant a stay of proceedings due to the principle of comity. Newbury J.A. disagreed at para. 67:

At the very least, Sopinka J.’s complex analysis [in Amchem] precludes a simplistic approach that defers to the first court to assert jurisdiction. Such an approach would be very close to, and perhaps equally objectionable as, the old rule of deference to the plaintiff’s choice – a rule described as obsolete by this court at para. 32 of Thrifty. Indeed, at para. 24, Sopinka J. suggested in another context that the existence of parallel proceedings “would not be disastrous” ...

The respondents before me emphasized comity to the relative exclusion of other considerations in a way similar to the submissions of the appellant before the Court of Appeal in Lloyd’s.

[12] Newbury J.A. went on to distinguish the three cases relied upon by the appellant. Thrifty related to a contract which had a choice of law clause and a non-exclusive jurisdiction clause in favour of Ontario. In Westec, both forums were found to be equally appropriate for the litigation. In Ingenium, the trial court “was found to have erred in attaching no significance to the fact that proceedings were already underway in New York” (Lloyd’s at para. 69). Newbury J.A. expressed her conclusion on the effect of the previous comity caselaw at para. 74:

No “single bright line rule” was formulated under which the existence of parallel proceedings in a foreign court would trump a determination, such as that made in Western Union [Insurance Co. v. Re-Con Building Products Inc., 2001 BCCA 513, leave to appeal to S.C.C. refused 174 B.C.A.C. 160 (note)] and in the case at bar, that British Columbia has the closest and most substantial connection with the proceeding. I do not regard such a conclusion as ‘disrespectful’ to the foreign court, or as negating the principle of comity – a principle based on mutual respect and on “justice, necessity and convenience”.

(emphasis in original)

[13] In the result, Newbury J.A. for the Court of Appeal in Lloyd’s upheld the trial judge who refused to decline jurisdiction even though the court in Washington State had accepted jurisdiction. The result was that two proceedings, parallel in at least some respects, were permitted to proceed.

[14] Based on the factors enumerated in s. 11(2) as well as the other factors identified in the case law, the question is: did the parties and issues in this litigation have a more real and substantial connection to British Columbia or to Ontario? While comity is an essential principle of the forum non conveniens analysis (particularly where the other jurisdiction is in Canada), the fact that the Ontario proceeding was started a few weeks before the British Columbia proceeding is but one non-determinitive factor to be considered.

MORE APPROPRIATE FORUM

[15] The first factor under s. 11(2) is the “comparative convenience and expense for the parties ... and for their witnesses”. The respondents both reside in Ontario, whereas the petitioner has been a resident of British Columbia since 2003.

[16] The petitioner says he will call one or two witnesses from Nanaimo. The respondents say that the relief sought in the Ontario proceeding is extensive and would involve documentary and viva voce evidence dealing with the 30 year history of the trust. They therefore intend to call several witnesses, including at least two employees of Scotia Cassels. In my view, the residence of these witnesses is only relevant if their evidence would be required in respect of this British Columbia petition brought by Mr. Gordon, as it is only a stay of that petition that is now before me. That petition seeks $18,740 for what appear to be trustee services and, if the additional relief sought in his Notice of Motion is valid, a declaration that the trust is now situate in British Columbia. I am satisfied that the evidence of these Ontario witnesses will be required even though the scope of this petition is much narrower than the scope of the Ontario proceedings. That is because of the need for the court to apportion trustee remuneration amongst successive trustees as described in the next section.

[17] I conclude that the first factor weighs moderately in favour of Ontario.

[18] The second factor is “the law to be applied to issues in the proceeding”. I note again that the “proceeding” at issue is the petition now before this court, not the Ontario proceeding. The petition seeks remuneration in British Columbia for a trustee who has resided here since 2003, and possibly a declaration about the situs of the assets. However, trustee remuneration here does require consideration of the historical management of the trust in Ontario.

[19] In both Ontario and British Columbia, when there is more than one trustee – whether co-trustees or sequential trustees – the total remuneration of no more than 5% of gross aggregate value must be apportioned amongst them: Trustee Act, R.S.B.C. 1996, c. 464, s. 88; Trustee Act, R.S.O. 1990, c. T.23, s. 61(1); Margaret E. Rintoul, “Executor’s Compensation”, in C. Thériault, ed., Widdifield on Executors and Trustees, 6th ed. (looseleaf edition, 2007), §§11.4.2, 11.9; Gary J. Wilson, “Remuneration of Personal Representatives and Trustees”, in CLE, BC Probate and Estate Administration Practice Manual (looseleaf edition, 2007), §16.13. Maladministration is one of the relevant factors in both provinces.

[20] The Trust has never passed its accounts, and Ms. Venables has never made a claim for remuneration as trustee. The fees associated with the services of Scotia Cassels (which continued until April 2007) were paid out of the Trust. The administration of the trust since 1975 must therefore be taken into account when assessing the appropriate compensation for the petitioner as successor trustee. This involves 30 years of evidence of trust administration in Ontario, and presumably also involves the application of the Ontario law of trustee remuneration for that period. The respondents pointed to some differences in the manner of calculating the appropriate trustee remuneration under the two provincial statutes.

[21] I conclude that the second factor weighs moderately in favour of Ontario.

[22] The fifth factor – enforcement of an eventual judgment – is a non-issue given the provisions of the Enforcement of Canadian Judgments and Decrees Act, S.B.C. 2003, c. 29.

[23] The third and fourth factors are best considered together in this case. They are the desirability of avoiding a multiplicity of legal proceedings and conflicting decisions.

[24] The respondents cite Iskander and Sons, Inc. v. Haghighat, 2007 BCSC 753. At para. 33, Rice J. quoted from the same paragraph in Thrifty that the appellants in Lloyd’s had relied upon before the Court of Appeal in emphasizing the importance of avoiding parallel proceedings. Rice J. did not adopt that quotation from Thrifty as a full expression of the current state of the law, however. Rather, at para. 34, he cited Lloyd’s and subsumed the consideration from Thrifty within the ultimate objective of having the proceeding heard in the most appropriate forum:

The existence of parallel actions in two jurisdictions is something to be avoided if possible. The overarching objective of the new conflict rules is to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection to the parties. Lloyd’s ... at para. 79.

[25] Kept in proper perspective, however, avoiding a multiplicity of proceedings remains an important factor. Both the Ontario and British Columbia proceedings would involve a passing of the petitioner’s trustee accounts and, leaving aside for the moment any possible defects in the statement of account and pleadings in British Columbia, determining any compensation owing to the petitioner qua solicitor as well. Evidence that is relevant to the removal of the petitioner as trustee, including alleged maladministration, is also relevant to the issue of his compensation. In this sense, I agree with the respondents that the issue of trustee compensation and/or solicitor fees clamed by the petitioner in British Columbia is “inextricably interwoven with the broader issues being dealt with in the Ontario [p]roceeding, and the Ontario Court will have the benefit of full evidence concerning the history of the ... Trust”. See Iskander, at para. 32(j).

[26] I note that the respondents’ submission on these two factors assumes in effect that the Ontario court will accept jurisdiction. If the petitioner succeeds over the coming months in having service set aside in the Ontario action, then there will be no danger of parallel proceedings. The Ontario court has not yet ruled on the application disputing the jurisdiction of the Ontario court. This application for a stay on the basis that there is another clearly more appropriate forum is therefore distinguishable from other cases such as Hormandinger v. Bender-Hormandinger, 2007 BCSC 949, where Kelleher J. stated that “the German court has clearly taken jurisdiction and intends to grant a remedy in respect of the subject matter of this proceeding”. I note that Kelleher J. in that case also found it “significant ... that both parties have already submitted to the jurisdiction of the German courts and that it was the [party opposing the stay in British Columbia] himself who commenced ... the [German] actions” (paras. 52, 56).

[27] The respondents submit that it is beyond question that Ontario has jurisdiction simpliciter for the same reasons that it asserts that Ontario is a clearly more appropriate forum. Without purporting to decide that question, I expect that my decision on this application will be a factor taken into account by the Ontario court if it does find that it has jurisdiction simpliciter such that it must engage in the forum non conveniens analysis.

[28] Even tempering the weight of these factors on account of the fact that the Ontario court has not yet ruled on the jurisdiction application, I conclude that the factors under s. 11(2)(c) and (d) favour permitting the Ontario proceeding to deal with the issues in Mr. Gordon’s petition, along with the other issues raised in the Ontario proceeding.

[29] The sixth factor is the “the fair and efficient working of the Canadian legal system as a whole”. This factor is engaged in the case at bar by the difficulty in “meshing” the subtle differences in the two provincial statutory schemes regarding the calculation of trustee compensation. The fair and efficient working of the Canadian legal system as a whole is best served by having trustee compensation for the entire life of the Trust until today determined in one province. I consider this factor to favour Ontario.

[30] Mr. Gordon submitted that a number of other factors strengthen the connection with British Columbia. Firstly, he submits that if the respondents were not content for the situs of the trust to be moved to British Columbia, that they should have objected at the time that he was making arrangements with them and with others regarding the transfer of the assets. In this respect, he cites case law stating that assets on the books of a financial investment intermediary are located at the business office through which they are dealt (see for example Bloom Estate, Re, 2004 BCSC 70, at paras. 61-62), and he cites Briggs Estate v. Education Trust (Briggs Estate), 2006 CanLII 23389, 2006 CarswellOnt 4224 (Ont. S.C.J.), for the proposition that a trust is located where the trustee is resident. He also goes further and states that dealings between himself and Ontario counsel for the respondents constituted a retainer agreement between the parties.

[31] Secondly, Mr. Gordon points to the fact that transactions involving the Trust assets are now carried out through the Nanaimo office of MD Management. Thirdly, he states that the respondents were not truly “first off the mark” by filing an action in Ontario before the British Columbia action was started. Rather, Mr. Gordon submits that the Ontario action was a response to the forwarding of a trust statement, detailed client ledger, and authorization to pay to the trust beneficiaries in December 2007. He therefore submits that it is proper to consider Mr. Gordon to have been “first off the mark” by taking the initial step of rendering the trust statement in British Columbia the month before the Ontario action was filed. Finally, he points out that the onus to prove that a stay should be granted is on the respondents (see for example Power Measurement Ltd. v. Ludlum, 2006 BCSC 157, at para. 78).

[32] I have given some weight to the first and second of these submissions. In my view, the third submission deserves no weight because pre-writ activities, at least in the circumstances of this case, cannot trigger a concern for comity between courts which arises only once there is an action before a court. In any event, as stated earlier, it is my view that the jurisprudence gives little deference to the first to file if that filing was not in the jurisdiction that is the most appropriate forum for the action. I agree with his submission regarding the onus of proof.

[33] The most critical factor is that emphasized by the respondents, which is the simple fact that the Trust was administered in Ontario for over 30 years by an Ontario trust company under the delegation of a sole income beneficiary who still resides in Ontario. In Lloyd’s at para. 58, Newbury J.A. noted that in the context of juridical advantage, Sopinka J. at p. 919 of Amchem stressed the relevance of the reasonable expectations of the parties. In my view, everyone interested in the Trust had a reasonable expectation built up for over three decades that any litigation concerning the trust would take place in Ontario. Ontario clearly had the closest real and substantial connection to the Trust throughout that period. It would be a serious breach of the reasonable expectations of the parties for this court to find that British Columbia is the more appropriate forum for the disputes arising from the Trust. In my view, the extremely strong connection of the Trust to Ontario for approximately 95% of its lifetime is the strongest connection at play in this case, and strongly favours this court finding Ontario to be the appropriate forum.

[34] Another relevant factor is that while both parties have retained counsel where desired in both jurisdictions, I am satisfied that the Ontario proceeding is more advanced (see Iskander at para. 32(k)). The Ontario action was started earlier, although this is a minor consideration, especially given the difference of only a few weeks. The Office of the Children’s Lawyer in Ontario is actively participating in the Ontario proceeding on behalf of any contingent beneficiaries. Conversely, there is no indication that the petitioner has notified the Public Guardian and Trustee in British Columbia about the B.C. proceeding. It appears that there may be procedural defects in the British Columbia action. Firstly, the petition does not set out a proper statement of facts as required by the Rules of Court. Secondly, the petition purports to be brought pursuant to s. 70 of the Legal Profession Act, S.B.C. 1998, c. 9, but I find that what is put forward is not a lawyer’s bill. At best, it is a trust statement that may include charges for some legal services together with non-legal services. Mr. Gordon also submitted that there is a retainer agreement in place between himself and the respondents or their counsel. He submitted that this retainer agreement had the effect of him not acting as a trustee under the British Columbia Trustee Act, but instead acting as a lawyer throughout in a way that justifies the invocation of the Legal Profession Act. I do not accept this submission. The respondents also point out that this hearing was set unilaterally by the petitioner, and that the Notice of Hearing seeks relief not mentioned in the petition, including a declaration that the situs of the Trust is British Columbia. As the Ontario proceedings are more advanced and the British Columbia proceedings appear to suffer from various defects, these considerations favour Ontario being found to be the appropriate forum.

[35] Considering all these factors, I conclude that these issues between these parties are more strongly connected to Ontario than to British Columbia, and that Ontario is “the more appropriate” forum for the issues in this petition to be heard.

CONCLUSION – SECTION 11

[36] With respect to the broader “ends of justice” analysis under s. 11, I note that the petitioner became the Trustee approximately one and a half years ago. He transferred the assets to British Columbia approximately one year ago. In my view, it would be contrary to the ends of justice for this court to rely on the petitioner’s own residency status and his own actions in moving trust assets in order to accede to his submission that British Columbia is the appropriate forum for the resolution of these disputes. I reach this conclusion because the changes that he brought about were extremely recent developments in the life of the Trust.

[37] Having considered the connections to the two jurisdictions, the interests of the parties and the ends of justice, I conclude under s. 11 that the courts of the province of Ontario are the more appropriate forum in which to hear this proceeding, and I accordingly exercise my discretion to grant the stay of proceedings sought in this petition.

COSTS

[38] Each party sought $1,200 lump sum costs in any event of the cause in the event that they were successful. The respondents, having succeeded on this application, are entitled to that amount from the petitioner.

RESULT

[39] A stay is granted.

[40] Because the Ontario court has not made an affirmative ruling that it will exercise jurisdiction in the Ontario proceeding, I will make one further order. If the Ontario court is persuaded by Mr. Gordon on his application now before it to strike out or set aside the service ex juris upon him, or otherwise grant a stay of proceedings in Ontario, then once all appeals have been completed or time to appeal has expired, either party may apply to this court for a reconsideration of this stay application.

"R.W. Metzger, J."

The Honourable Mr. Justice Metzger

Citation:	*Gordon v. Venables,*
	2008 BCSC 501