A Cornucopia of Conflicts Goodies
Posted by Seva on November 18, 2008
The decision of Mr. Justice Grauer in Lailey v. International Student Volunteers, Inc., 2008 BCSC 1344 provides a cornucopia of interesting conflict of laws points dealing with rebuttal of CJaPTA real and substantial connection presumptions, a general prohibition against bootstrapping actions over which the court does not have jurisdiction simpliciter to actions where the court does have jurisdiction, and consequences of such bootstrapping on otherwise valid ex juris service. It is always amazing how much useful law can come out of a relatively run-of-the-mill student volunteer trip to Ecuador.
The facts of the case are simple. Three plaintiffs (two from BC and one from Ontario) sued ISV, a California based business who they hired to provide them with travel and volunteer assignments in Ecuador, for breach of contract and failing to support them when they decided to file sexual harassment/assault charges against their home-stay host in Ecuador. The plaintiffs launched the action in BC, serving ISV ex juris without leave by relying on R. 13(1) and s. 10(e)(iii) of the CJaPTA. ISV contested the court’s jurisdiction arguing inter alia lack of jurisdiction simpliciter and improper service without leave.
Threshold for Rebutting a s. 10 RaSC Presumption
To establish RaSC, the plaintiffs relied on the s. 10(e)(iii) presumption, namely, that the proceeding concerned a contract “for the purchase of … services … for use other than in the course of the purchaser’s trade or profession, and… resulted from a solicitation of business in British Columbia by or on behalf of the seller,” Grauer J. found that there was no question that this presumption was established by the evidence that ISV provided informational sessions at UVic where the BC Plaintiffs became aware of its services. He then addressed ISV’s argument that the presumption was rebutted by the tenuousness of the connection to BC because all of the events at issue occurred in Ecuador and ISV was resident in California.
Relying on MTU Maintenance Canada Ltd. v. Kuehne & Nagel International Ltd., for the proposition that “s. 10 of the CJPTA made it unnecessary to refer to the common law factors set out in cases such as Muscutt“, and expressly rejecting Stanway, where Gropper J. applied Muscutt factors to the question of territorial competence, Grauer J. found that these factors were irrelevant to the question of rebutting the RaSC presumption and that:
While the question of the tenuousness of the alleged connection has been raised in pre-CJPTA cases … it would take a considerable amount of very cogent evidence to establish that a statutorily presumed substantial connection ought to be considered tenuous.
Bootstrapping Extra-jurisdictional Claims
Unfortunately for the Ontario Plaintiff, she could not rely on s. 10(e)(iii) because ISV solicited her business in Toronto. Thus, Grauer J. had to consider the effect on the proceedings of having two plaintiffs whose claims clearly fell under the court’s jurisdiction, and a plaintiff who had no jurisdictional connection to the forum.
To resolve this question, Grauer J. started by citing from the commentary to the ULCC’s CJaPTA, which indicated that “a court may have territorial competence over claims involving some parties to an action, but not others”, and was supported by the decision of Hinkson J. in Williams v. TST Porter dba 6422217 Canada Inc. He concluded that he had jurisdictional competence over the proceedings brought by the BC plaintiffs, but not over the proceedings brought by the Ontario Plaintiff.
However, this did not fully resolve this particular issue as the Ontario Plaintiff argued that the court should nevertheless hear her action under s. 6 of the CJaPTA, which gives the court discretion to hear an action despite a lack of territorial competence when:
(a) there is no court outside British Columbia in which the plaintiff can commence the proceeding, or
(b) the commencement of the proceeding in a court outside British Columbia cannot reasonably be required.
Concluding that such discretion should be exercised only in the clearest of cases, Grauer J. held that there was nothing preventing the Ontario Plaintiff from commencing her action in California, and that mere economic expediency was not sufficient to convince the court to exercise its s. 6 power:
I am of the view that s. 6 of the CJPTA was not intended to be applied as the plaintiffs suggest. Where there is a group of plaintiffs, all of whom could commence action in a foreign jurisdiction (such as, in this case, California), the fact that some of them are able to establish territorial competence in British Columbia cannot, it seems to me, render it an unreasonable requirement that other plaintiffs who have no connection whatsoever to British Columbia should commence their action in a jurisdiction where there is territorial competence. If it makes less economic sense for the claims to be divided between two different jurisdictions instead of litigated together in one, then I should think that those with the British Columbia connection might well consider joining those without it in the jurisdiction that has territorial competence over all of the claims. This would make more sense than the claims being tried together in a jurisdiction that does not have territorial competence over all of them. It may be that an exception would arise where the evidence establishes that the only jurisdiction with territorial competence over the claims of all of the plaintiffs is one in which no one could reasonably be expected to commence proceedings. That point does not arise in this case and should be left for a day when it does.
It is clear to me that this is not a case where British Columbia stands out as a forum of last resort. On the contrary, there would appear to be no shortage of alternatives.
Ex Juris Service
The next issue was the effort of dismissal of the Ontario Plaintiff’s action for lack of jurisdiction simpliciter on the ex juris writ which contained the claims of all three plaintiffs. Concluding that a “proceeding” under the CJaPTA is one that is commenced by an entire originating process, and not simply “a part thereof”, Grauer J. Held that because the writ included an invalid claim by the Ontario Plaintiff, it must be set aside. He explained that this was the “the consequence of the three plaintiffs having chosen to combine their claims in one writ.”
However, alleviating the practical concerns of this conclusion, he also held that the BC Plaintiffs could “now proceed to serve their writ on [ISV] … [or] amend the writ of summons to delete [the Ontario Plaintiff] as a plaintiff.”
This case appears to make true a modern version of an classic cliché; which is that bad facts make for good law. Thus, this case appears to have added the following useful principles to BC law of conflicts:
(1) Section 10 of the CJaPTA reigns supreme and precludes consideration of Muscutt factors in relation to the specifically enumerated categories of RaSC – addressing the uncertainty created by Stanway.
(2) A “considerable amount of very cogent evidence” is needed to rebut an enumerated presumption of RaSC.
(3) Absence unique and very convincing circumstances, a plaintiff whose claim does not fall within the court’s jurisdiction simpliciter cannot rely on s. 6 of the CJaPTA to bootstrap its action to the claim of a plaintiff who do fall within the court’s jurisdiction.
(4) An ex juris writ containing, from a jurisdictional perspective, valid and invalid claims, will necessarily be invalid, but, upon deletion of the offending parts, may be re-served or amended.