Library:
Concurrent Actions in Different Jurisdictions
Published in the May 2007 issue of Transportation Notes - View Article
On April 30, the British Columbia Court of Appeal released its decision in Lloyds Underwriters v. Cominco Ltd.
We are including this comment here both because the way in which our courts analyse jurisdictional and forum issues is generally significant for transportation related disputes and by way of calling attention to the fact that our modern view of forum selection, developed largely in the last 15 years, has an antecedent in Canadian maritime law going back a full 30 years.
In 1977 the Supreme Court of Canada decided the case of Antares Shipping Corp. v. The “Capricorn” . The decision of the majority was delivered by Ritchie J. who identified as the overriding consideration in a forum case the determination of whether there exists “some other forum more convenient and appropriate for the pursuit of the action and for securing the ends of justice.” At least one appellate court has “lamented that the confusion in Canadian courts prior to [1993] was largely attributable to their having paid so little attention to Antares.”
In the case on which we now comment, the Court of Appeal for British Columbia commented favourably on Antares and ventured into interesting territory involving the concurrent assertion of jurisdiction over the same matter by two legal systems. The case related to a coverage action between Tech Cominco Metals Ltd. (“TCML”) and its insurers including Lloyds Underwriters and Lombard General Insurance Company of Canada. TCML sought insurance coverage in respect of an action commenced in Washington State pursuant to the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). That action related to by-product of the smelting process known as barenslag generated by TCML at its zinc smelter in Trail, British Columbia and discharged into the Columbia river from the 1920’s until the mid 1990’s. The insurers denied coverage for various reasons and TCML commenced an action in the Superior Court in Washington State, seeking a declaratory judgment with respect to its rights to insurance coverage. The next day, Lloyds commenced an action in the Supreme Court of British Columbia, seeking a declaration with respect to its obligation to defend or indemnify TCML in respect of various environmental claims, including the CERCLA action. Lloyds brought a motion to dismiss or stay TCML’s action in Washington State and TCML did the same thing with respect to the Lloyds action in British Columbia. The motion in Washington State was heard first and the Court dismissed Lloyd’s application to dismiss TCML’s claims both for want of personal jurisdiction and on the basis of forum non-conveniens.
Justice Davies of the Supreme Court of British Columbia also declined to dismiss the Lloyds action, concluding that British Columbia was the most convenient and appropriate forum for the determination of the coverage issues. It is this decision which was appealed to the Court of Appeal for British Columbia.
TCML had several grounds of appeal but the principal ones were that Justice Davies had failed to respect the principle of international comity in not deferring to the decision of the court in Washington State which had accepted jurisdiction over the coverage dispute. TCML also alleged that the chambers judge had placed undue emphasis on the Court Jurisdiction and Proceedings Transfer Act (CJPTA), a statute introduced in 2003 which purports to create a set of standards for determining court jurisdiction and to bring British Columbia’s jurisdictional rules in line with the principles laid down by the Supreme Court of Canada in cases such as Moran v. Pyle National (Canada) Ltd., Moreguard Investments Ltd. v. De Savoye, Amchem Products Inc. v. British Columbia (Worker’s Compensation Board) and Pro Swing Inc. v. Elta Golf Inc.
TCML took the position that the chambers judge had found that the CJPTA should be “neither dictated nor constrained by the existing case law” and that in doing so he had essentially decided that the previous case law was no longer binding and that he was free to fashion “new jurisprudence based on purported statutory modifications”. In writing the reasons for the British Columbia Court of Appeal Madam Justice Newbury rejected this characterization. She was of the opinion that the chambers judge had not fashioned a new jurisprudence based on statutory modifications but rather had gone through considerable effort to harmonize the existing case law with the statute and had engaged in the same balancing of factors which has always gone into the analysis of the appropriate forum for the trial of an action. She did comment that she would have placed less influence on the alleged “forum shopping” committed by TCML, quoting from the case of Marchand (guardian ad litem of) v. Alberta Motor Association Insurance Co.:
“Forum shopping is not so much a basis of objection to jurisdiction as a condemnatory label applied after the real analysis has taken place. The labelling does not add anything to the decision-making process. The task is to determine which jurisdiction has the closest connection to the case. The factors involved in that analysis should not be affected by the motive of the party in choosing the disputed jurisdiction because it is only rational to sue in the most advantageous place.”
TCML also argued that the assertion of jurisdiction by the Washington Court was an overwhelming factor to which the chambers judge had shown insufficient deference, thereby disregarding the rules of international comity. Madam Justice Newbury rejected this argument. She reviewed the case law and acknowledged that in cases where an anti-suit injunction is sought, the court must undertake a more complex analysis than is required in an application for a stay based on forum non-conveniens. Ultimately, however, the assertion of jurisdiction by a foreign court is only one of the factors that should be taken into consideration. To apply “…a simplistic approach that defers to the first court to assert jurisdiction…would be very close to, and perhaps equally objectionable as, the old rule of deference to the plaintiff’s choice”.
Justice Newbury referred to comments of Sopinka, J of the Supreme Court of Canada in Amchem where he said that the existence of parallel proceedings “would not be disastrous” and since the cases would probably be tried concurrently “the judgment of the first court to resolve the matter would no doubt be accepted as binding by the other jurisdiction in most cases” at least “in a world where comity was universally respected”. However, in the conclusions to her reasons, Justice Newbury went on to state that the existence of parallel proceedings is an unfortunate situation and that “it is unclear what the result will be if and when one court or the other decides the case and the successful party attempts to enforce its judgment against the other party or parties”. She speculated that if the Washington court were to rule that the insurers are liable to indemnify TCML and British Columbia were to rule the opposite, TCML might well have trouble enforcing its order in British Columbia. She also speculated that it might be appropriate for the Washington court to apply British Columbia law to the insurance coverage issues and that if that were appropriate then it would make sense for the Washington court to defer to British Columbia’s determination of those same issues since otherwise the Washington proceeding would be “duplicative and a waste of time and money”. Nevertheless, she concluded by stating that “counsel before us did not venture down these paths . . . and since I need not do so to dispose of this appeal I am content to leave them for counsel to ponder”.
Lombard General Insurance Company of Canada v. Cominco Ltd.,
Teck Cominco Limited and Teck Cominco Metal Ltd.
2007 BCCA 249