IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100527

Docket: VLC-S-S097557

Registry:
Vancouver

Between:

Lorne Broman

Plaintiff

And

Machida Mack
Shewchuk Meagher LLP, Joanie K. Nguyen,

Timothy S.
Meagher, Scarborough, Herman, Bluekens,

G. W. Kent
Scarborough and Scott M. Bluekens

Defendants

And

Machida Mack
Shewchuk Meagher LLP, Joanie K. Nguyen

and Timothy S. Meagher

Third
Parties

– and –

Docket: S122746

Registry:
New Westminster

Between:

Scarborough Herman
Bluekens

Plaintiff

And

Machida Mack
Shewchuk Meagher LLP, Joanie K. Nguyen

and Timothy S.
Meagher

Defendants

Before:
The Honourable Madam Justice Kloegman

Reasons for Judgment

[1]          
On April 12, 2004, Mr. Broman suffered injuries in a motor vehicle
accident that occurred in Calgary, Alberta.  Mr. Broman was and is a resident
of British Columbia.  Mr. Broman hired the British Columbian lawyers
Scarborough Herman Bluekens (“SHB”) to prosecute a claim on his behalf against
Mr. Curr, the Albertan driver that struck him.  SHB advised Mr. Broman to
commence an action in Alberta, and SHB retained Machida Mack Shewchuk Meagher
LLP (“MM”), an Albertan law firm, to act as its agent in Alberta to file
pleadings and assist SHB with carriage of the suit.

[2]          
The defendants and third parties, Joanie K. Nguyen and Timothy S.
Meagher, were lawyers in the firm of MM who worked on the case. I will refer to
them and their firm collectively as MM. The defendants G. W. Kent Scarborough
and Scott M. Bluekens were lawyers in the firm of SHB who worked on the case. I
will refer to them and their firm collectively as SHB.

[3]          
The allegation of Mr. Broman is that all the lawyers, British Columbian
and Albertan, are liable to him for failure to provide proper legal services. 
This allegation arises out of the fact that when Ms. Nguyen drafted and filed
the statement of claim in Alberta, she omitted to include as a defendant the lessor
of the vehicle that struck Mr. Broman.  The driver of the vehicle, Mr. Curr,
turned out to be an uninsured motorist, and the only realistic possibility Mr.
Broman had to collect on a judgment was to claim against the Motor Vehicle Accident
Claims Fund (the “Fund”) pursuant to the Motor Vehicle Accident Claims Act,
R.S.A. 2000, c. M-22 in Alberta.  The Administrator of the Fund refused Mr.
Broman’s claim because the lessor, GMAC, was a party able to pay Mr. Broman’s
claim but had not been made a party to the action.  By this time Mr. Broman was
barred by the Limitations Act, R.S.A. 2000, c. L-12, from suing GMAC in
Alberta.

[4]          
Mr. Broman commenced action S097557 in Vancouver against MM and SHB.  SHB
in the Vancouver action commenced third party proceedings against MM.

[5]          
In addition, SHB commenced action number S122746 in New Westminster,
naming MM as defendants.

[6]          
MM bring this application in both the Vancouver Action and New
Westminster Action for orders setting aside the writs of summons (the “Writs”) and
third party notice served on them; or, alternatively for a stay or dismissal of
the actions as against them on the ground of lack of jurisdiction; or, in the
further alternative, an order declining jurisdiction and transferring both
actions to the Alberta Court of Queen’s Bench, Calgary Registry.  Mr. Broman
and SHB oppose the motions.

Servis Ex Juris

[7]          
There is no doubt that the Writs in both actions were served improperly
on MM.  For some reason, which was never made clear to me, the Writs state that
they were served without order pursuant to Rules 13(1)(h) and 13(1)(g) of the Rules
of Court.  These subrules were repealed on May 4, 2006, and therefore had
not existed for over three years prior to service of the Writs in these
actions.  Rule 13 now states that service on out of province parties is
governed by the Court Jurisdiction and Proceedings Transfer Act, S.B.C.
2003 c. 28 (the “CJPTA”). In particular, service ex juris without leave
is only permitted where the circumstances fit within the enumerated subsections
of s. 10 of the CJPTA, and the writ is endorsed with a description of the
circumstances for which it is claimed that service is permitted.  The CJPTA
provides other means by which the territorial competence of this court can be
assumed, but an order granting leave is required before writs issued under
these provisions can be served outside of the province.

[8]          
However, not much turns on the invalid service of the Writs.  If this
court were able to and chose to establish territorial competence over the
proceedings, I would allow the defendants to amend the endorsement on the Writs
accordingly and re-serve them.

Territorial Competence

[9]          
The real issue is whether this court has territorial competence over the
Albertan defendants MM, and if so, whether this court should decline
jurisdiction in favour of the Alberta Court of Queen’s Bench.

[10]       
A British Columbian Court has territorial jurisdiction over a proceeding
if the defendant consents, or is ordinarily resident in the province, or if
there is a real and substantial connection between British Columbia and the
facts on which the proceeding is based.  As the Albertan defendants in both the
Vancouver and New Westminster actions neither consent, nor are ordinarily
resident in British Columbia, Mr. Broman and SHB must bring their respective
claims against them on the basis of a real and substantial connection with
British Columbia.  They can do so, if they fall within one of the following
provisions of the CJPTA:

a)         The enumerated circumstances of s. 10;

b)         The parameters of the introductory words of
s. 10; or

c)         The wording of s. 3.

[11]       
In addition, s. 6 of the CJPTA allows a British Columbia Court to assume
jurisdiction even though it lacks territorial competence, if there is no other
court available, or if commencement of an action elsewhere cannot be reasonably
required.

Section 10(a)-(l)

[12]       
The introductory comments of the Uniform Law Conference of Canada in the
“Uniform Court Jurisdiction and Proceedings Transfer Act”, which act was
enacted by British Columbia as the CJPTA, were cited and relied upon by the
British Columbia Court of Appeal in Stanway v. Wyeth Pharmaceuticals Inc.,
2009 BCCA 592.

[13]       
At para. 16 of Stanway, the court quoted the comments of the Uniform
Law Conference of Canada explaining the purpose of s. 10:

[…] Instead of having to show in each case that a real and
substantial connection exists, plaintiffs will be able, in the great majority
of cases, to rely on one of the presumptions in section 10. These are based on
the grounds for service ex juris in the rules of court in many provinces. If
the defined connection with the enacting jurisdiction exits, it is presumed to
be sufficient to establish territorial competence under paragraph 3(e).

A defendant will still have the
right to rebut the presumption by showing that, in the facts of the particular
case, the defined connection is not real and substantial.

[14]       
Smith, J.A., writing for the British Columbia Court of Appeal in Stanway
stated further at para. 22 that:

The presumption of a real and
substantial connection in s. 10 is a mandatory presumption with basic facts.
The basic facts are those set out in s. 10(a) through (l), which are taken to
be proven if they are pleaded. While the presumption is rebuttable, it is
likely to be determinative in almost all cases.

[15]       
Hence, a plaintiff coming within the presumed real and substantial
connection to British Columbia is able to serve a writ ex juris without
leave of the court.  However, as stated above, the presumption is a rebuttable
one, and a defendant can apply under Rule 14(6) to strike out a pleading, or
dismiss or stay a proceeding on the ground of lack of jurisdiction.

[16]       
The written submissions of the respective British Columbian parties all
state that they are not proceeding by way of s. 10(a) – (l) of the CJPTA, but
rather s. 3(e) and the preamble to s. 10.  Therefore the onus is on them to
prove a real and substantial connection to British Columbia, and to obtain leave
of this court to serve the Writs ex juris.

Section 3(e) Real and Substantial Connection

[17]       
The Uniform Law Conference of Canada commented that the intent of s.
3(e) of the Act was to ensure that all judgments would be based on the exercise
of the “properly restrained jurisdiction” that would warrant their recognition
in other Canadian jurisdictions.

Paragraph (e) replaces the
existing rules, in the common law provinces, relating to service ex juris.
Territorial competence will depend, not on whether a defendant can be served ex
juris under rules of court, but on whether there is, substantively, a real and
substantial connection between the enacting jurisdiction and the facts on which
the proceeding in question is based. This provision would bring the law on
jurisdiction into line with the concept of “properly restrained jurisdiction”
that the Supreme Court of Canada, in Morguard Investments Ltd. v. De Savoye
(1990), held was a precondition for the recognition and enforcement of a
default judgment throughout Canada. The “real and substantial connection”
criterion is therefore an essential complement to the uniform Enforcement of
Canadian Judgments Act, which requires all Canadian judgments to be enforced
without recourse to any jurisdictional test.  The present Act, if adopted, will
ensure that all judgments will satisfy the Supreme Court’s criterion of
“properly restrained” jurisdiction, which the court laid down as the
indispensable requirement for a judgment to be entitled to recognition at
common law throughout Canada (Stanway, para. 14).

[18]       
Mr. Broman submits that there is a real and substantial connection
between British Columbia and his claim against MM and SHB in negligence based
on these factors:

1. The court has territorial competence over SHB and
him because they all reside in British Columbia.

2.         MM were the agents of SHB.  SHB is liable
to Mr. Broman for the actions of MM and SHB blames MM wholly for the error that
gives rise to Mr. Broman’s claim. (Although counsel did not express it this
way, I think his position could be put fairly that SHB and MM were joint tort feasors
who did harm to him in British Columbia).

3.         The dispute between SHB and MM is
inexorably linked and cannot be separated from Mr. Broman’s in juris
action against SHB.  To do so would create a multiplicity of proceedings.

4.         Mr. Broman is not able to collect damages
for personal injuries which are ongoing and for which he is receiving treatment
in British Columbia.

5.         The limitation period in which to sue MM in
Alberta has expired.

[19]       
In the Vancouver action, SHB submits that the above factors, together
with the following factors, create a real and substantial connection between
British Columbia and the facts on which the proceeding against MM is based:

1.         MM corresponded and communicated by
telephone with SHB in British Columbia.

2.         Damages were suffered in British Columbia,
although the tortious act of providing negligent legal services may have been
provided elsewhere.

3.         The legal advice from MM was received in
British Columbia and paid for in British Columbia.

4.         The contract between SHB and MM was formed
in British Columbia.  The governing law will be British Columbian.

5.         MM solicited and performed work for
residents of British Columbia and should have foreseen the consequences of
being sued in British Columbia if they failed to perform properly.

[20]       
In the New Westminster action, SHB relies on these factors to establish
territorial competence:

1.         The contract between SHB and MM was made in
British Columbia.

2.         MM did not specify the terms of their
retainer in writing, but also did not specify that Alberta law should apply. The
law of British Columbian should apply.

3.         The contract was breached in British
Columbia.

4.         SHB have suffered damages in British
Columbia in the form of lost contingent legal fees.

[21]       
In my view, the above submissions of the parties, while admirable in
their ingenuity, do not properly reflect what is in issue in either proceeding
against the Albertan parties.  At the heart of both actions is the allegation
that MM, who do not practice, reside or solicit business in British Columbia
and are not subject to the governance of the Law Society of British Columbia,
or the Province of British Columbia, or for that matter the standard of care of
lawyers in British Columbia, were negligent in providing legal services in
Alberta, with respect to an Albertan law suit arising out of a motor vehicle
accident in Alberta, in which the defendant driver was resident in Alberta. 
All the legal work, including the drafting and filing of the allegedly
deficient statement of claim occurred in Alberta.  Mr. Bluekens traveled with
Mr. Broman to Alberta to conduct the examinations for discovery there.  The
claim against the Fund was made in Alberta, as was the refusal of the Administrator
to pay out to Mr. Broman.  Any payout would have been on an Albertan assessment
of the damages suffered by the plaintiff in an Albertan motor vehicle
accident.

[22]       
In my opinion, the time when the causes of action in both these
proceedings arose was when the defective statement of claim was filed.  Up to
that point in time there was no connection with British Columbia except that
MM’s client (SHB), and SHB’s client (Mr. Broman), resided there.

[23]       
The whole reason why MM were retained was because they were Albertan
lawyers and everything about Mr. Broman’s case was connected to Alberta.  Mr.
Broman chose to sue in Alberta for this very reason.  It is inconsistent for
him to now say his personal injuries are connected to British Columbia, not
Alberta, because he receives treatment here (Dembroski v. Rhainds, 2010
BCSC 186) or that because he did not recover damages in Alberta, he has
suffered a loss in British Columbia.  The underlying motor vehicle accident
suit is key.  It is only from the results of that suit that Mr. Broman’s loss
can be measured, and that will in turn depend upon an assessment of damage by
an Alberta Court in accordance with Alberta law.  The damages alleged by SHB in
the Vancouver action are directly linked to the damages of Mr. Broman and will
have to be quantified in the same way.

[24]       
With respect to the New Westminster action, there is an argument to be
made that SHB would have received a contingency fee in British Columbia but for
the negligence of the defendants in Alberta.  However, the situs of where SHB
would have received payment of its fee from Mr. Broman is hardly a real and
substantial connecting factor when compared to the rest of the circumstances.

[25]       
One of the stated purposes of the CJPTA is to bring Canadian
jurisdictional rules into line with the principles laid down by the Supreme
Court of Canada in Morguard Investments Ltd. v. De Savoye, [1990] 3
S.C.R. 1077.  In Morguard at 1108-1109, La Forest J. observed that
reasonable limits must be placed on the exercise of jurisdiction against
defendants served outside of a province if the courts of other provinces were
to be expected to recognize each other’s judgments.  He did not define the
“real and substantial connection” test, but remarked that it was not intended
to be a rigid test. It should simply capture the idea that there must be some
limits on the claims to jurisdiction.  He noted that the principles of order
and fairness required consideration of the interest of the parties.  He concluded
that the approach of permitting suit where there is a real and substantial
connection with the action provided a reasonable balance between the rights of
the parties,

[26]       
When I apply the concept of order and fairness in deciding jurisdiction
in the cases before me, I must side with the Albertan defendants.  They did not
come to British Columbia looking to perform services for which they may be
responsible to answer for in a British Columbia Court.  The plaintiff and SHB
sought them out in Calgary where they practiced and where they would have
expected to answer for any deficiencies in their service.  On top of that, it
would be more orderly (and undoubtedly safer) for an Alberta Court, which would
be more familiar with Alberta standards of practice, the legislation and law
governing motor vehicle accident injury awards in Alberta, claims on the Fund,
and Alberta limitation periods, to decide the issues in dispute.

[27]       
S. 6 of the CJPTA has no application because the Alberta Court of
Queen’s Bench is a court of competent jurisdiction and is available to try
these matters, without being inordinately inconvenient to Mr. Borman and SHB.  Therefore,
I am transferring both of these proceedings to Alberta where they can be
litigated together.  In doing so, I am well aware that Mr. Broman would
ordinarily be entitled to sue his British Columbia lawyers in British Columbia.
However, as I stated earlier, at the heart of both these actions is the
conduct of MM, not SHB.  There is nothing in the pleadings or the evidence before
me to suggest that SHB are liable to Mr. Broman except vicariously for any
negligent conduct of MM.  It would be impractical to hive off Mr. Broman’s
claims against SHB from the rest of the action and I see no reason to do so.

[28]       
Therefore the defendant MM shall have an order transferring the entirety
of both the Vancouver and New Westminster actions to Calgary, Alberta pursuant
to Part 3 of the CJPTA.  The details of the order required to ensure the
effective transfer of the proceedings to Alberta can be spoken to if counsel
cannot agree.

“Kloegman
J.”