1400467 ALBERTA LTD v ADDERLEY, 2014 ABQB 85


3.30: Defendant’s options
3.68: Court options to deal with significant deficiencies
11.25: Real and substantial connection
11.31: Setting aside service

Case Summary

The Applicant applied to strike out the Respondent’s claim under Rule 3.68(1) for two reasons. First, the Applicant submitted that the Respondent did not have a reasonable cause of action in Alberta (Rule 3.68(2)(b)). Second, the Applicant submitted that the Court had no jurisdiction over the Respondent, a corporation incorporated and operating in Saskatchewan (Rule 3.68(2)(a)).

In assessing the Applicant’s position on Rule 3.68(2)(b), the Court reviewed former Rule 129 and current Rule 3.68(2)(b). Justice Veit noted that former Rule 129 had previously been interpreted and considered as though the Rule had included the word “reasonable”. The Court further held that there was no difference in principle between the assessments made under the current Rule and the former Rule.

Determining if there was a reasonable cause of action under Rule 3.68(2)(b) required a summary analysis. The Amended Statement of Claim explicitly alleged that the Defendants conspired to solicit its clients and induce its employees to join the Applicants. The Amended Statement of Claim also alleged that the employment contracts were made in Alberta. Based on the above, the Court held that it was reasonable to conclude that a reasonable cause of action in Alberta existed.

The Court then determined whether it had territorial jurisdiction to deal with the Application. The Court acknowledged that dealing with territorial jurisdiction disputes, for constitutional reasons, required more than a summary analysis (Greenbuilt Group of Companies Ltd v RMD Engineering Inc, 2013 ABQB 297). The Court took two routes to determine the issue of territorial jurisdiction: attornment and conflicts of laws.

By failing to avail itself of the processes outlined in Rules 3.30 and 11.31, by filing a Defence on the merits of the claim, and by taking other steps in the proceedings, including bringing the current Application, the Court held that the Applicant had attorned to the jurisdiction of the Court.

To prove a real and substantial connection under Rule 11.25(3)(b) and 11.25(3)(c), the contract had to relate to, or be made in and governed by, the law of Alberta. From the Amended Statement of Claim, and from the employment contract, it was clear to the Court that the Applicant’s contract related to Alberta. It was also clear that, not only was the non-compete contract governed by Alberta law, Alberta was the choice of forum. The Court held that, although the Applicant was not a signatory to the contracts in question, its links to its principal established the required connection. Overall, the Court held that it had jurisdiction simpliciter to deal with the Respondent’s claim.

Finally, the Court considered whether it should exercise its rights to rule on this matter. Forum conveniens did not have to be determined for two reasons. First, the Respondents gave the Applicants no notice on this issue. Second, the Court held that it would be inappropriate to deal with the matter without assistance from the parties on the important legal issues. For the above reasons, the Court did not determine the forum conveniens issue on this Application.

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