Master Prowse

11.25: Real and substantial connection

Case Summary

During the development and operation of an open pit sands mine located in Alberta, the Plaintiff/Respondent, Fort Hills Energy LP (“Fort Hills”), made a decision to coat the structural steel used with a fire protection coating which had started to crack and fall off the structural steel. It was repaired at significant cost and Fort Hills commenced the underlying Action to recover damages.

Two of the Defendants, Jotun A/S (“Jotun Norway”), a Norwegian corporation, and Chokwang Jotun Ltd. (“Jotun Korea”), a Korean corporation, (collectively, the “Applicants”) applied for an Order striking the Action on the basis that the Court does not have jurisdiction simpliciter over them. The Applicants argued, in the alternative, that if the Court did have jurisdiction simpliciter regarding the dispute that the Action should be stayed on the basis that Korea is the forum conveniens. Finally, the Applicants sought an Order setting aside the Order for service ex juris obtained ex parte against them on the basis of lack of full disclosure.

Master Prowse reviewed the relevant jurisprudence and noted that Fort Hills had the burden of identifying a presumptive connecting factor that links the subject matter of the litigation to Alberta and, where established, the Applicants had the burden of rebutting the presumption of jurisdiction. Therefore, it was only necessary for Fort Hills to establish one tort within Alberta for each of the two Applicants. Master Prowse found that Fort Hills was successful in establishing that the Courts of Alberta had jurisdiction.

In dealing with the factors with the issue of forum non coveniens Master Prowse noted that the factor which strongly favoured Korea was the compellability of witnesses and records while the factor which strongly favoured Alberta was juridical advantage. As such, Master Prowse found that the Applicants had not established that Korea was a clearly more appropriate forum, which is the test to be applied.

Finally, in dealing with the service ex juris Order obtained ex parte as against the Applicants, Master Prowse found that the Order was obtained by Fort Hills in accordance with Rule 11.25. Master Prowse concluded that the Affidavit used to apply for service ex juris on behalf of Fort Hills met the requisite standard of establishing a ‘good arguable case’ that there was a real and substantial connection between Alberta, the Applicants, and the nature of the tort alleged. Accordingly, Master Prowse declined to set aside the Order for service ex juris.

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