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Craig Broadcast Systems Inc v Frank N Magid Associates, Inc HELPER J.A.:-- Does the Manitoba Court of Queen's Bench have jurisdiction to entertain the plaintiff's action against the out-of-province defendant in this case, and, if it does have the jurisdiction, should it exercise it? These are the issues on this appeal. The Facts Craig Broadcast Systems, Inc. (Craig), headquartered in Brandon, Manitoba, owns and operates radio and television stations. Frank N. Magid Associates, Inc. (Magid) provides consulting and research services to the radio and television industry. Magid is located in Marion, Iowa, in the United States. The Canadian Radio-television and Telecommunications Commission (CRTC) is the body which determines if and when television and radio services are required in a particular area in Canada. When the CRTC issued its call for applications to obtain the right to offer a new television service in Alberta, Craig was interested. Prior to the CRTC call, Craig and Magid had had discussions on the type of advice and service that Magid would be able to provide Craig. In June 1993, Drew Craig contacted Magid to discuss the possibility that Magid could assist Craig in making the Alberta application. Negotiations led to a consulting contract which was executed by the parties on June 18, 1993, at Magid's offices in Marion, Iowa. Magid's obligation under the contract was to provide an analysis of the viewing behaviour of Alberta residents based upon a survey or questionnaire it prepared and distributed. Craig proceeded to establish an Alberta company, Alberta Channel Inc., as an entity to advance the licence application. Based upon the data that it had gathered, Magid prepared a written analysis for Alberta Channel Inc. Alberta Channel Inc. did not succeed in its application. Craig subsequently learned that Magid had been involved with two other applicants for the Alberta licence in breach of the parties' contract and in breach of the fiduciary duty owed by Magid to Craig. Craig subsequently brought action against Magid in Manitoba and served the statement of claim on Magid in Iowa. Magid applied for interlocutory relief to dismiss or stay the proceedings on the basis that the courts of Manitoba have no jurisdiction to hear the proceeding and on the basis that Manitoba is not the convenient forum for the proceeding. Magid appeals from the order dismissing that application. Magid's submission is that the motions judge erred in law by failing to apply the proper test to the application for a stay of proceedings. It further submits that the motions judge erred in law in failing to find that the onus was on Craig to establish the convenient forum for the proceeding. The Applicable Queen=s Bench Rules Rule 17.02, which is entitled "Service Outside Manitoba Without Leave," reads, in part: Subrules 17.06(1) and (2) state: Subrule 21.01(3) states: Jurisdiction Magid contends that Rule 17.02 sets out the procedural requirements which allow the Manitoba courts to assume jurisdiction in this case, but that Manitoba should only exercise its jurisdiction if the requirements of the substantive law have been met. The substantive law has been set out in Morguard Investments Ltd. v. De Savoye, [1990]3 S.C.R. 1077, Hunt v. T & N plc, [1993] 4 S.C.R. 289, and Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022. La Forest J. stated in Tolofson, at p. 1049: Magid submits that the motions judge erred by failing to cast her mind to the subject-matter of the litigation. It argues that she focused on matters which were relevant to the service requirements under Rule 17.02, but that those matters have little to do with the subject-matter of the litigation. It contends that the subject-matter of the litigation includes such factors as the existing contract, the consulting services which were offered by Magid, and the relationship between Magid and the other television stations in Alberta. The motions judge was alert to the test she was to apply to this issue. She made no specific reference to the Tolofson case. However, she did refer to J.G. Castel's Canadian Conflict of Laws (3rd ed. 1994) and to the Morguard decision, and consistently quoted the "real and substantial connection" test in her reasons for judgment. The factors which the motions judge considered at p. 318 of her reasons as establishing a real and substantial connection between "the action and the province of Manitoba" are:
While these factors clearly meet the requirements for service outside of Manitoba under Rule 17.02 and thus establish jurisdiction simpliciter, they are also relevant to the substantive law test set out in Tolofson. Clearly they support the motion judge's determination that Manitoba does have an interest in the case. La Forest J. noted in Tolofson that the term "real and substantial connection" has not been fully defined. He also speaks of a real and substantial connection between the subject-matter of the action and the jurisdiction, not the most real and substantial connection. Any real and substantial connection is sufficient to establish jurisdiction. The extent of that connection is examined when the issue of forum conveniens arises. From his wording of the test and his observation that the test has not been defined, I would conclude that a failure by a motions judge to refer to any one or more factors in a case will not necessarily be fatal to her ultimate decision. The factors identified by Magid, that is, the contract, the services to be provided by Magid, and the relationship between Magid and other Alberta broadcasters, have no more or less relevancy to the "real and substantial connection" test than those listed by the motions judge. In fact, some overlap. The contract, its substance, and its place of execution were reviewed by the motions judge. Her failure to consider the relationship between Magid and applicants in Alberta does not, in my view, impact negatively on her decision. On the factors she listed, the motions judge made no error in concluding, at p. 319, that "the action has a real and substantial connection with Manitoba." Forum Conveniens Magid relies upon Frymer v. Brettschneider (1994), 19 O.R. (3d) 60 (C.A.) in support of its submission that the motions judge erred in law by placing the onus upon it to satisfy her that Manitoba was not a convenient forum for the hearing of this case. It also contends that the motions judge erred in finding Manitoba to be the appropriate forum by default". It is Magid's position that Iowa is the convenient forum. A recent Supreme Court decision in which the law on forum non conveniens and the anti-suit injunction were reviewed is Amchem Products Inc. v. British Columbia (Workers' Compensation Board), [1993] 1 S.C.R. 897. The issue in the case was whether the anti-suit injunction issued in British Columbia, which sought to prevent the appellants from pursuing their action against the respondents in Texas, should be set aside. Sopinka J., for the Court, reviewed the rules of private international law relating to forum non conveniens as they evolved from the English law. He noted that the business of litigation, like the business of commerce itself, had become increasingly international, citing factors such as free trade, the growth of multinational corporations, and advanced communications and technology. Because business transactions know no judicial or national boundaries, the courts have come to recognize that frequently there is no single forum that is clearly more convenient or appropriate for the trial of an action than another. Put another way, there may be more than one jurisdiction that is closely connected with an action and is therefore appropriate to try that action. Courts have had to become more tolerant of the judicial systems of other provinces or countries. This recognition of the courts' obligation to exercise tolerance and to accept the right of another jurisdiction to control an action is the principle of comity defined by La Forest J. in Morguard and Tolofson. At pp. 913-14 of the Amchem decision, Sopinka J. adopts La Forest J.'s definition of comity from Morguard: ... After referring to another Supreme Court decision on the subject, Antares Shipping Corporation v. The Ship ACapricorn" et al., [1977] 2 S.C.R. 422, a case in which leave to serve ex juris was required, Sopinka J. defined the test for forum conveniens and dealt with the onus of proof at pp. 920-21: Having defined the test for forum conveniens, Sopinka J. went on to discuss the anti-suit injunction. He stated, at p. 931, that the first step in the process conformed to the forum non conveniens test: I pause for a moment here to dispose of Magid's submission that the motions judge erred in using the phrase that Manitoba is the proper forum "by default". The motions judge made no error. It is apparent from the above-quoted passage that the words chosen by the motions judge to determine this issue were not without precedent. Nor was Sopinka J. alone in using that phrase. Castel uses the same terminology at p. 241 of his text, ibid: I return to Magid's first submission on this issue, the question of onus. The application of the forum non conveniens test in Canada is, as Sopinka J. notes, to be distinguished from its application in England. The House of Lords in Spiliada Maritime Corp. v. Cansulex Ltd., [1987] A.C. 460, considered the test in two different circumstances. In the "as of right" cases, where the defendant is served in the jurisdiction, the burden of proof that a stay should be granted is on the defendant, who is required to show there is another forum which is clearly more appropriate for the trial of the action. This so-called "natural forum" is deemed the one with which the action has the most real and substantial connection. If the defendant meets this first condition, that is, that another forum is clearly more appropriate, the stay will be granted unless the plaintiff establishes special circumstances by reason of which justice requires that the trial take place in England. In the cases in which service is effected ex juris, the burden is on the plaintiff throughout, and it is the reverse of that applicable in cases "as of right"; that is, the plaintiff must show that England is clearly the appropriate forum. Sopinka J. rejected this test for the Canadian standard. He noted that the question of onus will rarely arise. But he also noted that with the emergence of rules which allow for service ex juris in most provinces, those rules will govern the issue of onus. Paul M. Perell, in an article entitled A Litigator's New Primer on Conflict of Laws (1995), 17 Adv. Q. 300, analyzed the state of the law on forum conveniens and anti-trust injunctions in Canada as a result of the most recent Supreme Court decisions. At pp. 305-6, he stated: I turn now to the governing rule. Rule 17.06 appears, on a clear reading, to place the initial burden upon the party moving for a stay order to satisfy the court that Manitoba is not a convenient forum for the hearing of the proceeding. Nowhere in Rule 17.06 does there appear to be any onus upon the plaintiff. Clearly, if the defendant meets this initial burden, then the evidentiary burden shifts to the plaintiff to satisfy the court that Manitoba is the appropriate forum. There is no distinction drawn in Rule 17.06 between service in juris and service ex juris. Magid's submission leads to the conclusion that, despite the clear wording of the Rule, the onus rests with the plaintiff, both when there is a motion for a stay on the issue of jurisdiction and when an issue arises on forum non conveniens, to satisfy the court that Manitoba is the appropriate forum. The wording of the Rule does not allow for that interpretation, and I reject Magid's submission. I also respectfully disagree with the majority view expressed in Frymer that, in a case of service ex juris, the burden is on the plaintiff to establish that the domestic court is the appropriate forum if that choice is challenged by the defendant. I find Weiler J.A.'s dissenting reasons of greater persuasion and in accord with Sopinka J.'s pronouncement in Amchem. Arbour J.A., for the majority, essentially adopted the trial judge's analysis of the law. Adams J., the trial judge, did not have the benefit of Sopinka J.'s reasons in Amchem. He relied upon the test defined by the House of Lords in the Spiliada case to conclude that in ex juris cases the onus rested with the plaintiff. On appeal, Arbour J.A. agreed with Sopinka J. that the question of burden of proof will rarely matter and that the "choice of the appropriate forum will generally resolve itself on the basis of the relative strength of the relevant factors, rather than on the determination of who is to bear the burden of proof" (p. 81). She concluded, however, at p. 84, that "the Ontario law relating to forum non conveniens is not found in rule 17.06, but in the jurisprudence which has, over the years, elaborated on the rationale for the doctrine and the principles which should govern its application." (Note: The Ontario and Manitoba rules are essentially identical.) In my view, the majority failed to recognize the distinction made by Sopinka J. in the Amchem case between the development and application of the forum non conveniens laws in England and in Canada and the impact of the governing rules upon the substantive law in each country. Rule 17.06 has no ambiguous meaning. The onus is on the moving party in a forum non conveniens application to satisfy the court that it is not a convenient forum. The only way to satisfy that onus is to satisfy the legal test that there is another forum clearly more appropriate for the hearing of the action. Even if I were to accept the majority's view in Frymer that when the plaintiff chooses to bring a foreigner into the jurisdiction, typically in a case of service ex juris, the burden will be on the plaintiff to establish that its choice of forum is appropriate if challenged by the defendant, then I would conclude on the record of this case that the plaintiff, that is, Craig, has satisfied that burden. In this case, there are three jurisdictions associated with the action - Manitoba, Alberta, and Iowa. The motions judge listed the factors which linked each of those three jurisdictions with the case. In dealing with Iowa, which she did not find to be more closely connected to the case than either Alberta or Manitoba, she concluded that the subject-matter in dispute, the licensing of television rights in the province of Alberta under the CRTC, rendered Iowa a forum that was not convenient for the resolution of the dispute. That finding was, in my view, a proper one. This action involved a Manitoba resident headquartered in Manitoba. The contract was negotiated from Manitoba and dealt with consulting services to be provided to an Alberta entity created and controlled by the Manitoba resident. Surely, services for a Manitoba resident making an application to the CRTC for the licensing of television rights in Canada should be determined in a Canadian court. The motions judge concluded that Alberta was the least convenient forum for the parties from the perspective of expense and convenience for the witnesses. She also found, at p. 320, that "there is no clear choice between Alberta and Manitoba." These findings appear to be inconsistent. However, the inconsistency does not affect the result. Having concluded that Iowa was not a convenient forum and that Alberta was the least convenient forum, Manitoba was left. Whether the motions judge refused the stay because Manitoba was the most appropriate forum or because Manitoba won "by default" matters not. Magid failed to satisfy the motions judge that Iowa was clearly a more appropriate forum than Manitoba. In the result, I would dismiss the appeal, with costs. |