IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Blackedge Strategic Capital and Consulting Ltd. v. Spelliscy, |
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2008 BCSC 1217 |
Date: 20080908
Docket: S076699
Registry: Vancouver
Between:
Blackedge Strategic Capital and Consulting Ltd.
Plaintiff
And:
Shaun Spelliscy, Mike Lederhouse,
A Resource Management Inc., and Gem Oil Inc.
Defendants
Before: The Honourable Mr. Justice Savage
Reasons for Judgment
In Chambers
| Counsel for the Plaintiff: |
S.A. Mellows |
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| Counsel for the Defendants: |
P.D. Le Dressay |
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Date and Place of Hearing: |
August 7, 2008 |
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Vancouver, B.C. |
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Introduction
[1] Blackedge Strategic Capital and Consulting Ltd. (the “Plaintiff”) brings an action seeking specific performance of a contract to purchase certain mineral claims within the Ithigo Lake Area (the Sales Agreement”) in Saskatchewan. Although the statement of claim was originally issued October 1, 2007 the Plaintiff amended its statement of claim on July 31, 2008 to seek damages as alternate relief.
[2] This is an application by the defendants Shaun Spelliscy, Mike Lederhouse, A Resource Management Inc. and Gem Resource Inc. (the “Defendants”) for various orders including that the action be stayed and in the alternative that this action be transferred to the Court of Queen’s Bench for the Province of Saskatchewan.
[3] The application is made pursuant to the Supreme Court Rules 14(6), 14(6.1), and 14(6.2), and the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, Chap. 28. It challenges jurisdiction simpliciter of the court to hear the matter and alleges this court should decline jurisdiction on the basis of the doctrine forum non conveniens.
[4] The Plaintiff originally endorsed the writ of summons for service ex juris referencing the repealed provisions of the Rules of Court, Rules 13(1)(g), 13(1)(h) and 13(1)(o). It is common ground that those Rules were replaced by Rules 14(6)–(6.4) and the provisions of the Court Jurisdiction and Proceedings Transfer Act.
The Action
[5] The Statement of Claim alleges that in May 2006 the individual defendants and the Plaintiff entered into the Sales Agreement to sell the mineral claims to the Plaintiff. The Sales Agreement is in evidence before me. A $60,000 deposit was paid in Saskatchewan.
[6] Pursuant to the Sales Agreement the Plaintiff was to tender to the Defendants as additional consideration 80,000 shares of a free-trading public company of a value of at least $.75 per share, each share to be accompanied by a warrant to purchase an additional share for $1.50 per share. The shares and warrants were to be provided to the vendor by January 21, 2007.
[7] The Defendants say that the shares and warrants were not provided in a timely manner. They also say that the shares eventually tendered in March 2007, were from a bulletin board company, for which there was only a single trade that established the $.75 share price.
[8] By amendments made concurrent with the date of its outline of argument, the Plaintiff says that the shares were to be delivered to the Defendants by the Plaintiff’s solicitor in Vancouver, B.C. There is no evidence before me that supports this claim and it is not a claim made in the original pleadings dated October 4, 2007.
[9] On March 21, 2007, John Briner, a solicitor, gave notice on behalf of the Plaintiff that he was holding 80,000 shares of Oxbow Resources Corporation, in trust, that the company traded OTC, and the last trade was for $.85. There were no warrants associated with the shares. On March 22, 2007 the Defendants issued a Notice of Default and Cancellation declaring the Sales Agreement to be at an end.
[10] The express grounds of the Notice of Default and Cancellation are that the Plaintiff “is in default under the said Agreement, having failed to supply 80,000 shares of a public company, free trading, at a value of at least $.75 per share, each share to be accompanied with a warrant to purchase an additional share for $1.50 Cdn., within two years from January 21, 2007”.
[11] The Defendants in addition to challenging the jurisdiction of this court also defend the claim on the merits. They challenged jurisdiction at the outset of the proceeding. The Defendants challenged jurisdiction in accordance with Rules 14(6), by alleging in the pleadings that the court lacks jurisdiction, and by delivering the requisite Notice of Motion within 30 days of entering an appearance, in accordance with Rule 14(6.4).
[12] In light of these actions, the Plaintiff conceded that there was no merit to its original position that Defendants, by entering an appearance and filing a statement of defence had attorned to the jurisdiction of this court.
Procedure
[13] The proper interpretation of the current rules is that Rule 14(6) deals with jurisdiction simpliciter (territorial competence) and Rule 14(6.1) deals with forum non conveniens: Coulson Aircrane Ltd. v. Pacific Helicopter Tours Inc. 2006 BCSC 961, O’Brien v. Simard, 2006 BCSC 814.
[14] Section 2 of the Court Proceedings and Jurisdiction Transfer Act provides that territorial competence of the court is to be determined “solely in reference” to Part 2 of the Act.
[15] By the use of the term “solely in reference” the section, in my opinion, confers upon this part of the Act the status of a code with respect to the subject matters with which it deals. Section 2 reads as follows:
(1) In this Part, "court" means a court of British Columbia.
(2) The territorial competence of a court is to be determined solely by reference to this Part.
[16] Section 3 of the Court Proceedings and Jurisdiction Transfer Act sets out the grounds upon which territorial jurisdiction may be based “in a proceeding that is brought against a person”. Subsection 3(d) is the only subsection that has possible application here. This Court will have jurisdiction only if “there is a real and substantial connection between British Columbia and the facts on which the proceeding is based”:
3 A court has territorial competence in a proceeding that is brought against a person only if
(a) that person is the plaintiff in another proceeding in the court to which the proceeding in question is a counterclaim,
[17] Section 10 of the Act creates presumptions of territorial competence if the plaintiff can bring itself within one of the categories of that section. It expressly does not limit the Plaintiff from proving other grounds that establish a real and substantial connection but provides twelve grounds, subsections 10(a)–(l), that presumptively show territorial competence.
(a) is brought to enforce, assert, declare or determine proprietary or possessory rights or a security interest in property in British Columbia that is immovable or movable property,
(b) concerns the administration of the estate of a deceased person in relation to
(i) immovable property in British Columbia of the deceased person, or
(ii) movable property anywhere of the deceased person if at the time of death he or she was ordinarily resident in British Columbia,
(c) is brought to interpret, rectify, set aside or enforce any deed, will, contract or other instrument in relation to
(i) property in British Columbia that is immovable or movable property, or
(ii) movable property anywhere of a deceased person who at the time of death was ordinarily resident in British Columbia,
(d) is brought against a trustee in relation to the carrying out of a trust in any of the following circumstances:
(i) the trust assets include property in British Columbia that is immovable or movable property and the relief claimed is only as to that property;
(ii) that trustee is ordinarily resident in British Columbia;
(iii) the administration of the trust is principally carried on in British Columbia;
(iv) by the express terms of a trust document, the trust is governed by the law of British Columbia,
(e) concerns contractual obligations, and
(i) the contractual obligations, to a substantial extent, were to be performed in British Columbia,
(ii) by its express terms, the contract is governed by the law of British Columbia, or
(iii) the contract
(A) is for the purchase of property, services or both, for use other than in the course of the purchaser’s trade or profession, and
(B) resulted from a solicitation of business in British Columbia by or on behalf of the seller,
(f) concerns restitutionary obligations that, to a substantial extent, arose in British Columbia,
(g) concerns a tort committed in British Columbia,
(h) concerns a business carried on in British Columbia,
(i) is a claim for an injunction ordering a party to do or refrain from doing anything
(i) in British Columbia, or
(ii) in relation to property in British Columbia that is immovable or movable property,
(j) is for a determination of the personal status or capacity of a person who is ordinarily resident in British Columbia,
(k) is for enforcement of a judgment of a court made in or outside British Columbia or an arbitral award made in or outside British Columbia, or
(l) is for the recovery of taxes or other indebtedness and is brought by the government of British Columbia or by a local authority in British Columbia.
[18] Although this Court has territorial competence where there is a real and substantial connection between British Columbia and the facts on which the proceeding is based, it nevertheless must also determine, pursuant to Section 11 of the Act, whether it should exercise that jurisdiction.
[19] A court may decline to exercise territorial competence where “a court of another state is a more appropriate forum” considering relevant factors including the ones enumerated in the section:
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,
(c) the desirability of avoiding multiplicity of legal proceedings,
(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.
[20] The first step in the analysis of jurisdiction is to examine the Statement of Claim and the affidavit evidence to determine if there is a real and substantial connection between British Columbia and the facts on which the proceeding against that person is based.
Territorial Jurisdiction (Jurisdiction Simpliciter)
[21] The Defendants’ Outline of Argument notes that the original Statement of Claim while seeking specific performance makes no mention of where the Sales Agreement is made, or where it was to be performed. No reference is made to anything occurring or having to occur in British Columbia. The outline is dated April 3, 2008.
[22] The Plaintiff, however, amended the Statement of Claim on July 31, 2008, on the same date as it submitted its Outline of Argument. The amended Statement of Claim asserts, inter alia, that closing of the Sales Agreement was to occur in British Columbia and there were misrepresentations made in British Columbia by telephone calls and emails.
[23] The Defendants say that there is not a shred of evidence that supports the assertion that the closing was to occur in British Columbia. There is no affidavit evidence to that effect filed by the Plaintiff. There has been discovery of documents and there is no evidence that supports that claim and there are no documents before me supporting that assertion.
[24] The Plaintiff says, however, that it need not provide any affidavit evidence to support the claims in the pleadings. It need do so only where the Defendants have adduced affidavit evidence that would be fatal to the Plaintiff’s claim: AG Armeno Mines and Minerals Inc. v. PT Pukuafu Indah (2000) 77 B.C.L.R. (3d) 1 (C.A.), 2000 BCCA 405 where at ¶ 19 the Court of Appeal stated:
The chambers judge concluded that Armeno failed to establish jurisdiction on evidentiary grounds. Normally, issues of jurisdiction simpliciter fall to be decided on the sufficiency of the pleadings alone but as we have observed in Furlan v. Shell Oil Co. 2000 BCCA 404, there is an exception where the material before the court establishes that the plaintiff's claim is tenuous. A tenuous claim is one where evidence introduced by the foreign defendant contradicts material facts pleaded by the plaintiff or otherwise proves facts fatal to the plaintiff's claim. G.W.L. Properties Ltd. v. W.R. Grace & Co. (1990), 50 B.C.L.R. (2d) 260 (B.C.C.A.) stands for the proposition that the plaintiff must make out a good arguable case. In my opinion, that case must be made by the plaintiff on the evidence with respect to facts put in issue by the defendant's evidence.
And at paragraph 26:
I think that an evidentiary issue only arises if the defendant applicant tenders evidence that puts in question facts essential to the plaintiff's case. In that sense, the applicant has the initial burden of introducing evidence that challenges the plaintiff's allegations in the writ or statement of claim. Where, as here, the evidence goes to affirmative defences the defendant applicant may also have the legal burden of proof on those issues. Once the defendant has discharged its initial burden, I think that the plaintiff is required to tender evidence that satisfies the judge that the plaintiff has a good arguable case in the sense of a triable issue on the facts put in issue by the defendant's evidence. I do not think that there is any duty on the plaintiff to tender evidence on allegations in the pleadings that the defendant's evidence has not put in issue. The defendant's evidence, and not the pleadings, should frame the issues on which an evidentiary response from the plaintiff is required.
[25] The Plaintiff says that where the Defendants does not put the material facts in issue through affidavit evidence, there is no requirement for the plaintiff to respond, and the evidence must be compelling so that it would otherwise be fatal to the plaintiff’s case: Power Measurement Ltd v. Ludlum (2006) 33 C.P.C. (6th) 47 (B.C.S.C.) at ¶ 35-36.
[26] In my view, however, the Defendants has put the material facts in issue through affidavit evidence, which evidence, on this point, goes unchallenged. The Defendants assert that “The shares had to be delivered in Saskatchewan” (paragraph 17, Affidavit of Shaun Spelliscy). It is not contradicted that the deposit was paid in Saskatchewan (paragraph 11, Affidavit of Shaun Spelliscy).
[27] The Defendants further assert “At no time was I, or any of the Defendants, ever in receipt, or offered shares in a publicly trading company at a market value of at least $.75 per share, which were to be accompanied by a warrant to purchase an additional share for $1.50 Cdn.” (paragraph 13, Affidavit of Shaun Spelliscy). These were the terms of the Sales Agreement.
[28] Instead, the Defendants say, they were offered two months too late shares without warrants in a company traded on the bulletin board for which there had been only a single trade, presumably to set a “market value” (paragraph 14, Affidavit of Shaun Spelliscy).
[29] In light of this evidence, in my opinion, the foreign Defendants have put in evidence material facts contradictory to the Plaintiff’s case, such that the onus shifts to the Plaintiff’s to make an arguable case that there is a real and substantial connection between British Columbia and the facts: AG Armeno Mines & Minerals Inc., and Furlan v. Shell Oil Co. 2000 BCCA 404.
[30] The Plaintiff also alleges that the Defendants made representations which were false, either fraudulently or negligently made in British Columbia. Thus, it asserts, it has made out a claim that a tort was committed, and fits within Section 10(g) of the Act. Amendments to its Statement of Claim made July 31, 2008 state that representations include were representations made in British Columbia by telephone and by email.
[31] The representations enumerated in the Statement of Claim that alleged to be misrepresentations are the following: “(a) that the Spelliscy Defendants had good and marketable title to the Mineral Claims in their own names; (b) that the Spelliscy Defendants could convey good and marketable title to the Mineral Claims to the Plaintiff on or before the Completion Date; and (c) that the Spelliscy Defendants had entered into an agreement to and had acquired the Mineral Claims from Gem Oil”.
[32] With respect to these matters there is an Option Agreement and a Sales Agreement is in evidence. The Option Agreement is Exhibit A to the affidavit of Shaun Spelliscy. The Sales Agreement is between Gem Oil Inc. or its assigns and Blackedge Strategic Capital and Consulting Ltd. and is Exhibit B.
[33] Although the misrepresentation is said to be the Spelliscy Defendants had good and marketable title to the mineral claims in their own names, the Option Agreement says that Gem Oil Inc. has title and includes its assigns. The Option Agreement is executed by Blackedge Strategic Capital and Consulting Ltd.
[34] The Affidavit of Shaun Spelliscy notes that Gem Oil Inc. agreed to assign its interests in the mineral claims and Option Agreement to A Resource Management Inc., Mike Lederhouse and Shaun Spelliscy. In my view the affidavit and documents contradict the assertion that there was any misrepresentation regarding title as alleged.
[35] The second misrepresentation alleged is that the Spelliscy Defendants could convey good and marketable title to the Plaintiff on the Completion Date. The difficulty with this assertion in the Statement of Claim is that Shaun Spelliscy deposes that at all material times Gem Oil Inc. was the owner of the mineral claims. Since it owned the mineral claims there could be no impediment to their assignment in accordance with the agreements.
[36] The third misrepresentation alleged is that the Spelliscy Defendants had entered into an agreement to and had acquired the mineral claims. However paragraph 7 of the Shaun Spelliscy affidavit says “That Gem Oil Inc. agreed to assign its interests in the said Mineral Claims, and Option Agreement to A Resource Management Inc., Mike Lederhouse and Shaun Spelliscy”.
[37] In my opinion, in the context of the action it mattered not whether the there was an agreement to assign the mineral claims or there had been an actual assignment of the mineral claims, so long as if the Plaintiff tendered the purchase price the Defendants would have been in a position to convey the claims. The affidavit and documentary evidence indicates that the Defendants could have conveyed the claims.
[38] In light of this evidence, in my opinion, the foreign defendants have put in evidence material facts contradictory to the Plaintiff’s case, such that the onus shifts to the Plaintiff’s to make an arguable case that there is a real and substantial connection between British Columbia and the facts: AG Armeno Mines & Minerals Inc. and Furlan.
[39] In my opinion then, the Plaintiff has not made out a case that either Section 10(e) or 10(g) applies.
[40] The Plaintiff also raises Section 10(e)(iii), arguing that the Defendants solicited business in British Columbia. There is nothing in the material before me that suggests that this is the case. Section 10(e)(iii) requires that both (A) and (B) apply. There is nothing before me that indicates that Section 10(e)(iii)(A) applies.
Forum non conveniens
[41] If I am wrong on either of these points, and there is territorial competence in this court, it is still necessary to determine in accordance with Section 11 of the Act, the forum conveniens with respect to the action.
[42] Section 11 is meant to codify the doctrine of forum non conveniens: Coulson Aircrane Ltd. v. Pacific Helicopter Tours Inc. 2006 BCSC 961. In considering this issue the court is directed to consider, inter alia, the following matters:
11 (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,
(c) the desirability of avoiding multiplicity of legal proceedings,
(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.
[43] With respect to the comparative convenience and expense, there are two defendant corporations and two personal defendants. The defendant corporations and the personal defendants reside in Saskatchewan. While the Plaintiff and its witnesses reside in British Columbia, in my view consideration of this factor as a whole favours the action taking place in Saskatchewan.
[44] With respect to the law respecting issues in the proceeding, the Plaintiff has asked for specific performance of a contract. The subject matter of the contract is in Saskatchewan, namely, the titles evidencing the mineral claims, as well as the underlying assets. The question of where the contract was made is in issue, although the Plaintiff acknowledges that in person negotiations and or discussions took place in Saskatchewan in April 2006 and November 2006. The Defendants say all negotiations took place in Prince Albert and Saskatoon and that agreement was reached there. Of course, no agreement is reached until there is delivery of the contract documents, which took place in Saskatchewan.
[45] In my view, the proceeding has a greater connection with Saskatchewan than British Columbia even acknowledging the Plaintiff’s point that contract law involves the application of legal principles common to many jurisdictions.
[46] It is desirable that there be no multiplicity of legal proceedings. While a legal proceeding has been commenced in British Columbia, in my view, the Saskatchewan Courts can more easily deal with all of the ancillary issues that might arise, such as, how the mineral claims are conveyed (if they are to be conveyed), whether orders are necessary to compel production, etc. In my view this factor favours Saskatchewan.
[47] It is desirable that there be no conflicting decisions. That goal is determined upon selection of the forum conveniens.
[48] The enforcement of any judgement favours Saskatchewan as the Defendants are in Saskatchewan as well as the subject matter underlying the litigation.
[49] It is my further view that, had the parties turned their minds to the issue, they would have foreseen Saskatchewan as the appropriate forum: Seine River Resources Inc. v. Pensa Inc., [1998] B.C.J. No. 2090, 25 C.P.C. (4th) 360 (S.C.) at ¶ 61-62, Britannia Gold Corp. v. Exall Resources Ltd., [1998] B.C.J. No. 951 at ¶ 31.
[50] The Defendants’ application for a stay of these proceedings in British Columbia is granted.
Transfer of the Proceeding
[51] In the present case, the only action is this proceeding commenced in the British Columbia court. The Saskatchewan courts have both territorial and subject matter competence in this proceeding. Both parties, in their alternate positions, request a transfer of the proceeding.
[52] Given the finding that the British Columbia courts do not have territorial competence, or in any event that Saskatchewan is the more appropriate forum to hear the dispute, this is an appropriate case in which to exercise the discretion to request a transfer of proceedings.
[53] Pursuant to s. 15(1) of the Court Jurisdiction and Proceedings Transfer Act, my reason for requesting transfer of this proceeding to the Saskatchewan Court of Queen’s Bench is that I have found the British Columbia court does not have territorial competence over the proceeding against the Defendants on the basis that there is no substantial connection between British Columbia and the facts on which the proceeding against them is based. Alternatively, I have determined that the forum conveniens is the Saskatchewan court.
[54] The facts before me establish a real and substantial connection between what is alleged against the Defendants and Saskatchewan, which is therefore the state with territorial competence over the individual defendants and the Saskatchewan court is the more appropriate forum.
[55] Neither counsel requested any terms or conditions be included in the order requesting transfer, nor any provision for return of the proceeding to British Columbia. The action then is stayed pending transfer to the Saskatchewan Court of Queen’s Bench, at which time, upon acceptance by the Saskatchewan court, the action may proceed as determined by that court.
[56] The Defendants shall have costs of this application at Scale B.
“The Honourable Mr. Justice Savage”