The Defendant sought an Order to strike or stay the Action pursuant to Rule 3.68(1). This case involved a company incorporated in the United States (“DDT US”). The Plaintiff claimed ownership of 50% of DDT US shares (the “Shares”), despite a Recission Agreement which rescinded the purchase of shares and stipulated that any disputes be resolved under Washington law (the “Clause”). Despite this, the Plaintiff claimed ownership of the Shares and alleged negligence in a Florida lawsuit (the “Florida Action”). The Defendant asserted the allegations regarding the Florida Action did not disclose a reasonable cause of Action and the Court lacked jurisdiction over the Shares.

Applications Judge Park outlined that the Court is restricted to the pleadings to assess whether the Statement of Claim discloses a reasonable cause of Action in an Application under Rule 3.68(2)(b), and the submission of evidence for such Applications is prohibited by Rule 3.68(3). Regarding the Florida Action, Applications Judge Park observed that the Defendant improperly relied on the Plaintiffs admissions from cross-examination on Affidavit. Although the Court stated these admissions could be considered in an Application made pursuant to Rule 7.2(1) or 7.3(1)(b). Based on the pleadings, Applications Judge Park could not conclude that the Florida Action failed to disclose a reasonable cause of Action.

Regarding the Shares, the Defendant claimed the Court lacked jurisdiction and sought to strike the claim pursuant to Rule 3.68(2)(a). The Plaintiff contended that filing a Statement of Defence constituted attornment to jurisdiction. Applications Judge Park ruled that filing responsive pleadings is not a prerequisite for an Application under Rule 3.68, and while it may be argued the Defendant attorned by filing pleadings, this does not dictate whether jurisdiction should be exercised.

The Court outlined a two-step test for enforcing a forum selection clause and Stay Applications filed in violation of it. First, the Applicant must establish that the clause is valid, clear, enforceable, and applicable to the cause of Action. If successful, the burden shifts to the Respondent to demonstrate strong reasons against enforcement. Applications Judge Park noted that in a commercial context, sophisticated parties are deemed to have accepted the risks associated with such clauses. The Court determined that the Parties were sophisticated businessmen, there was no power imbalance, and the Rescission Agreement clearly applied to the proceedings.

Applications Judge Park stated that strong reasons can include fraud, lack of jurisdiction, claims outside the parties expectations, inability to ensure a fair trial, or if enforcement contradicts public policy. The Court determined that while the litigation had ties to Alberta, which may be the appropriate forum but for the Clause, these connections were insufficient to override the Clause. The Court ruled the Plaintiff failed to demonstrate strong reasons to not enforce the Clause.

Consequently, the Application to strike the claims related to the Florida Action was dismissed, but the claims related to the Shares were struck.