COURT OF APPEAL FOR BRITISH COLUMBIA
Citation:
Borgstrom v. Korean Air Lines Co. Ltd.
2007 BCCA 263
Date: （略）
Docket: CA034666
Between:
Rick Borgstrom
Respondent
(Plaintiff)
And
Korean Air Lines Co. Ltd.
Appellant
(Defendant)
Before:
The Honourable Mr. Justice Hall
The Honourable Mr. Justice Low
The Honourable Mr. Justice Lowry
J.H. Goulden and R.P. Berger
Counsel for the Appellant
F.A. Schroeder
Counsel for the Respondent
Place and Date of Hearing:
Vancouver, British Columbia
26 April 2007
Place and Date of Judgment:
Vancouver, British Columbia
2 May 2007
Written Reasons by:
The Honourable Mr. Justice Hall
Concurred in by:
The Honourable Mr. Justice Low
The Honourable Mr. Justice Lowry
Reasons for Judgment of the Honourable Mr. Justice Hall:
[1] This case raises issues concerning the interpretation of Rule 14 of the Rules of Court and as well argument was directed to the interpretation of certain provisions of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (the “Act”). The plaintiff respondent Borgstrom is an airline pilot and has most recently been working in Quatar. He has a residential address in the City of Surrey in British Columbia. The defendant appellant Korean Airlines Co., Ltd. is a corporation incorporated under the laws of the Republic of Korea and has world-wide airline operations. Its headquarters are Seoul, Korea and it is registered as an extra-provincial company in British Columbia. It has an operations base at the Vancouver International Airport and has a small staff here in British Columbia.
[2] The respondent was engaged as an airline pilot/captain from 1997 to September 30, 2004 working on flights flown on Korean Airlines Co., Ltd. (the “airline”). In his statement of claim, which was filed February 11, 2005, the respondent pleaded that he was 55 years old, that he intended to retire at age 60 and that he had been promised job security with the airline by a senior representative of the defendant. He never had a direct contract of employment with the airline but he did have a contract with a company called Euro-Pacific Aviation International Ltd. (“EPA”). EPA assigned, or as it is sometimes termed, “dispatched”, pilots to the airline. Pursuant to a series of agreements between the airline and EPA the respondent was assigned by EPA to the airline from 1997 until his employment ceased on September 30, 2004. His designated flight base was Incheon, Korea. He maintained a residence in Canada and would be flown back from time to time to stay in Canada.
[3] It appears that in an agreement between EPA and the airline that governed the assignment of pilots to the airline, Korea was designated as the forum to resolve disputes and the governing law was Korean. It is said that the agreement between EPA and the respondent would have originated in Western Samoa or Australia.
[4] The airline did not directly pay the respondent but payments were made by it to EPA and in turn EPA paid the respondent for services rendered to the airline. In his statement of claim, the respondent said that he was promised job security until age 60 and that he relied on these promises of job security and on a continuance of his employment to his detriment by, amongst other things, expending funds to be trained on a certain type of aircraft. He also asserted in his statement of claim that he was owed a certain amount of money for leave days. He claimed against the airline for breach of the promise of secure employment and for failure to renew his five year contract. His monetary claim was for U.S. $636,000 in lost salary plus a U.S. $9,000 signing bonus as well as leave pay said to be due to him in the amount of U.S. $41,443.
[5] After the airline was served with process, its solicitors in Vancouver entered an appearance on February 22, 2005. On March 17, 2005 these solicitors filed a statement of defence on behalf of the airline. This defence denied any contractual relationship between the parties. The statement of defence also contained this paragraph:
In general response to the whole of the statement of claim KAL says that this Honourable Court does not have jurisdiction to hear the within claims of the plaintiff, or in the alternative, KAL says that this Honourable Court should decline to exercise jurisdiction to hear the within claims of the plaintiff.
[6] The airline denied in its defence any obligations or liability to the respondent and sought dismissal of the claim.
[7] Subsequent to the delivery of the statement of defence, the solicitors for the appellant airline issued a demand for discovery of documents and, in response, the respondent produced a list of documents on June 1, 2005. On April 26, 2006 the solicitors for the airline filed a notice of motion for an order that the action be dismissed or, alternatively, stayed on the basis that the Court did not have jurisdiction to adjudicate the action or, alternatively, ought to decline jurisdiction to adjudicate the action because British Columbia was not an appropriate or convenient forum for the hearing of the action. The application of the appellant came on for hearing before a chambers judge on October 26, 2006 and November 20, 2006. The application was dismissed. From that order of dismissal the appellant has appealed to this Court.
[8] The appellant’s application to have the proceeding dismissed or stayed was made pursuant to Rule 14(6) and Rule 14(6.1) of the Rules of Court. These provisions read as follows:
(6) A party who has been served with an originating process in a proceeding, whether served with the originating process in that proceeding in or outside of British Columbia, may, after entering an appearance,
(a) apply to strike out a pleading or to dismiss or stay the proceeding on the ground that the originating process or other pleading does not allege facts that, if true, would establish that the court has jurisdiction over that party in respect of the claim made against that party in the proceeding,
(b) apply to dismiss or stay the proceeding on the ground that the court does not have jurisdiction over that party in respect of the claim made against that party in the proceeding, or
(c) allege in a pleading that the court does not have jurisdiction over that party in respect of the claim made against that party in the proceeding.
(6.1) Whether or not a party referred to in subrule (6) makes an application or allegation under that subrule, the party may apply to court for a stay of the proceeding on the ground that the court ought to decline to exercise jurisdiction over that party in respect of the claim made against that party in the proceeding.
[9] It can be seen that Rule 14(6) addresses the issue of jurisdiction simpliciter, that is, whether the Court has jurisdiction, while Rule 14(6.1) adverts to an issue concerning forum non conveniens. An issue of forum non conveniens is addressed under the provisions of the Act.
[10] Rule 14(6.4) provides that certain actions performed by a party, such as filing pleadings that address the merits of the claim or defending on the merits, will not necessarily be taken as evidence of attornment to the Court’s jurisdiction, so long as that party has brought an application or filed a pleading disputing jurisdiction simpliciter under Rule 14(6) within 30 days of entering an appearance. Rule 14(6.4) reads:
(6.4) If, within 30 days after entering an appearance in a proceeding, a party of record delivers a notice of motion under subrule (6) (a) or (b) or (6.2) to the other parties of record or files a pleading referred to in subrule (6)(c),
(a) the party does not submit to the jurisdiction of the court in relation to the proceeding merely by filing or delivering any or all of the following:
(i) the appearance;
(ii) a pleading under subrule (6)(c);
(iii) a notice of motion and supporting affidavits under subrule (6)(a) or (b); and
(b) until the court has decided the application or the issue raised by the pleading, the party may, without submitting to the jurisdiction of the court,
(i) apply for, enforce or obey an order of the court, and
(ii) defend the action on its merits.
[11] The Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28, which came into force on May 4, 2006, addresses jurisdictional issues arising in this case. Section 3 of the Act governs the issue of jurisdiction simpliciter, which the Act refers to as “territorial competence”, by setting out the circumstances in which the Court has jurisdiction over a matter:
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,
(b) during the course of the proceeding that person submits to the court’s jurisdiction,
(c) there is an agreement between the plaintiff and that person to the effect that the court has jurisdiction in the proceeding,
(d) that person is ordinarily resident in British Columbia at the time of the commencement of the proceeding, or
(e) there is a real and substantial connection between British Columbia and the facts on which the proceeding against that person is based.
[12] The final two factors (d) and (e) are defined in subsequent provisions of the Act. Section 7 explains the meaning of “ordinarily resident” as the term applies to corporations:
7 A corporation is ordinarily resident in British Columbia, for the purposes of this Part, only if
(a) the corporation has or is required by law to have a registered office in British Columbia,
(b) pursuant to law, it
(i) has registered an address in British Columbia at which process may be served generally, or
(ii) has nominated an agent in British Columbia upon whom process may be served generally,
(c) it has a place of business in British Columbia, or
(d) its central management is exercised in British Columbia.
[13] Section 10 is largely a codification of common law principles and provides a non-exhaustive list of the factors that will give rise to a “real and substantial connection”. The relevant portions read:
10 Without limiting the right of the plaintiff to prove other circumstances that constitute a real and substantial connection between British Columbia and the facts on which a proceeding is based, a real and substantial connection between British Columbia and those facts is presumed to exist if the proceeding
…
(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,
…
(h) concerns a business carried on in British Columbia,
…
[14] If it is determined based on the factors set out in s. 3 of the Act that the court has territorial jurisdiction over the proceeding, the court will go on to consider the issue of forum non conveniens, that is, whether or not to use its discretion to exercise jurisdiction. The relevant factors to be considered are enumerated in s. 11 of the Act as follows:
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.
[15] The chambers judge found that the Courts of British Columbia had jurisdiction to adjudicate on the issues raised in the pleadings because the appellant was ordinarily resident in British Columbia, having a place of business in British Columbia and a number of employees in Vancouver. The judge noted that a company search indicated that the airline was a registered extra-provincial company with a mailing address and delivery address in British Columbia.
[16] On the issue of whether or not the Court should decline to exercise jurisdiction over the litigation, the chambers judge found that the appellant had attorned to the jurisdiction of the Court and therefore could not argue that British Columbia was not the convenient forum. She held that the statement of defence of the appellant airline defended the claim not only on the basis of jurisdiction but also on the merits, and as well the appellant had made use of procedures available under the Rules of Court to serve a demand for discovery of documents and a notice to produce. Relying on the cases of O’Brien v. Simard (2006), 55 B.C.L.R. (4th) 384 (S.C.), Coulson Aircrane Ltd. v. Pacific Helicopter Tours Inc. (2003), 15 C.C.L.T. (3d) 140 (S.C.), Imagis Technologies Inc. v. Red Herring Communications Inc. 2003 BCSC 366, and Ngo v. Go [2006] B.C.J. No. 114 (S.C.) (QL), she concluded that where a defendant has filed a statement of defence directed to both jurisdiction and the merits of the case and thereafter made demands for production and discovery, the defendant should be found to have attorned to the jurisdiction. Finding that the appellant airline had so attorned to the jurisdiction, the judge concluded that once this had occurred, it was not thereafter open to the appellant to argue that British Columbia was not the convenient forum. She concluded her judgment thus:
[32] I have concluded that the court has territorial competence on the basis of the connection between the court and KAL. KAL was ordinarily resident in British Columbia at the time of the commencement of the action, as it had a registered address for delivery and a place of business in the province of British Columbia. Having attorned to the jurisdiction KAL can no longer apply to the court to decline jurisdiction. KAL’s application that the Court decline jurisdiction, or alternatively stay the action on the basis that British Columbia is not the convenient forum is dismissed. Costs will be in the cause.
[17] The appellant argues that the judge failed to properly construe and apply the protection from submission to jurisdiction contained in Rules 14(6)(c) and 14(6.4) and failed to appreciate the effect of the appellant’s combined application regarding the issues of territorial competence and forum conveniens. It is argued that the present case is therefore factually distinguishable from the cases relied upon by the learned chambers judge to reach her conclusion that the appellant was barred from making a forum conveniens argument before the Supreme Court of British Columbia.
[18] I note that the pleadings appear prima facie to fall under the provisions of Rule 14(6)(c) in that it was alleged in the statement of defence filed by the appellant that the Court does not have jurisdiction over “that party in respect of the claim made against that party in the proceeding”. The appellant did what it was required to do to protect itself under Rule 14(6.4) in that it filed the necessary pleading referred to in subrule (6)(c). Subrule (6.4) of Rule 14 provides that a party does not submit to the jurisdiction of the Court in relation to the proceeding by filing such a pleading and further provides that until the Court has decided the issue raised by the pleading the party may, without submitting to the jurisdiction of the Court, “defend the action on its merits”.
[19] The appellant submitted that having proceeded as the rules provided, particularly Rule 14(6)(c) and Rule 14(6.4), it should have been able to advance the argument that British Columbia was not, having regard to the terms of the Act, an appropriate forum in which to try the proceeding. The respondent submitted that, although the appellant might have appeared to have done what was necessary to protect itself from attorning to the jurisdiction of the Supreme Court, in reality it had not done so because its pleading seeking to contest territorial jurisdiction was bound to fail. The respondent submits that Rule 14(6)(c) should be construed as requiring a plea contesting territorial jurisdiction to have a degree of substance sufficient to underpin an argument against territorial competence. It is asserted that the plea contesting jurisdiction advanced in the statement of defence was bound to fail. The appellant submits that the argument on this point of jurisdiction advanced before the judge had substance and, in any event, submits that the plain wording of Rule 14(6)(c) contains no such qualification as contended for by the respondent. On the face of Rule 14(6)(c) the appellant appears to have done what was necessary procedurally to bring itself within the provisions of that Rule. There is nothing in the Rule to support the interpretation argued for by the respondent. The Rules Committee may think it appropriate in future to insert terminology in the Rule consistent with the interpretation contended for by the respondent but, in the absence of such terminology, I do not consider it open to this Court to add words to the Rule.
[20] In each of the cases of O’Brien and Coulson, it appears that the issue taken before the Supreme Court judge pertained only to whether or not the Court ought to decline jurisdiction on the basis of forum non conveniens. Preston J. noted in his reasons that was the issue before him in O’Brien. Coulson raised a similar issue and the judge in that case relied on the earlier case of O’Brien. In the case of Ngo it was found that the party disputing jurisdiction had not attempted to rely on the new Rule 14(6.4) and the judge in that case observed at para. 54 that “even if it had been in effect when this action was started, the defendant could not rely on it because the jurisdictional issue was not raised within the 30 day period”. In the case at bar, the jurisdictional issue was advanced within the time required by Rule 14(6.4). The earlier case of Imagis Technologies Inc. v. Red Herring Communications Inc. was decided before Rule 14 was amended to include subrule (6.4) and before the Act came into force and, for that reason, is a case of limited assistance on this appeal.
[21] Having regard to what was pleaded and argued before the chambers judge in this case and considering the applicable Rules, it seems to me that the chambers judge ought to have found that the applicable provisions of Rule 14 applied to preserve the appellant from being found to have attorned to the jurisdiction. What the appellant did and pleaded in this case brought it within the provisions of Rule 14 in an acceptable fashion to preserve its ability to argue the issue of forum non conveniens because it had not attorned to the jurisdiction of the Court. In those circumstances, the judge was bound to go further and to consider whether or not under the provisions of the Act the forum non conveniens argument advanced on behalf of the appellant ought to succeed. The failure to do so was legal error in my opinion.
[22] The appellant argues, in the alternative, that even if attornment was properly found by the chambers judge such a finding should not preclude the appellant from invoking the Act. It is submitted that the legislation does not stipulate attornment as a bar to consideration of such an argument. This interesting submission advanced by the appellant before us may have validity but I do not find it necessary to reach any final decision on the issue, because my conclusion that attornment was erroneously found by the learned chambers judge in the instant case suffices to dispose of this appeal. I consider that the proper disposition of this case is to remit the matter to the Supreme Court for a judge of that Court to consider the forum conveniens argument advanced on behalf of the appellant. The appeal should be allowed in those terms.
“The Honourable Mr. Justice Hall”
I Agree:
“The Honourable Mr. Justice Low”
I Agree:
“The Honourable Mr. Justice Lowry”
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