Churchill Cellars Ltd. v. Haider, 2019 ONSC 1143

CITATION: Churchill Cellars Ltd. v. Haider, 2019 ONSC 1143

DIVISIONAL COURT FILE NO.: 274/18

DATE: 20190215

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: CHURCHILL CELLARS LTD., Plaintiff/Appellant

AND:

JEFF HAIDER, DEVONIAN COAST WINERIES LIMITED, JOST VINEYARDS LIMITED, and CARL SPARKES, Defendants/Respondents

BEFORE: MARROCCO A.C.J.S.C.

COUNSEL: Micheal Simaan, for the Plaintiff/Appellant

Brian K Awad, for the Defendants/Respondents

HEARD at TORONTO: January 7, 2019

ENDORSEMENT

[1] The Appellant/Plaintiff, Churchill Cellars Limited (CCL), an Ontario corporation with its head office in Toronto, represents suppliers of wines, spirits and beer in Ontario and Atlantic Canada.

[2] CCL is appealing the decision of Master McGraw which stayed CCL's action. The Master decided Nova Scotia was the clearly more appropriate jurisdiction to try the subject matter of CCL’s action.

[3] The standard of review in an appeal from the order of a Master is the same as that for an appeal from an order of a judge:

• correctness for an error of law,
• palpable and overriding error for an error of fact, and
• correctness or palpable and overriding error for a question of mixed fact and law, depending on whether there is an extricable legal principle

See (Zeitoun v. Economical Insurance Group 2009 ONCA 415, at para. 1; Wellwood v. Ontario (Provincial Police), 2010 ONCA 386, at para. 28).

[4] The parties agree that Ontario has jurisdiction simpliciter.

[5] CCL issued the claim, with which we are concerned, on November 27, 2016 seeking damages from:

• Devonian Coast Wineries Limited and Jost Vineyards Limited of $64,163.42 for commissions and unpaid invoices and $448,000 for breach of contract with respect to notice of termination of the Agency Agreements;
• Jeff Haider of $192,461.79 for breach of the non-solicitation provision of his Employment Agreement;
• Devonian Coast Wineries Limited, Jost Vineyards Limited and Carl Sparkes for inducing breach of contract or in the alternative, intentional interference with economic relations.

[6] The Defendant Jeff Haider is a resident of Nova Scotia. Mr. Haider was the Brands Director of CCL from September 3, 2013 until February 15, 2016 pursuant to an August 19, 2013 employment letter agreement with Churchill Dauphinee, a division of CCL operating in Nova Scotia.

[7] The Defendant Devonian Coast Wineries Limited (“DCWL”) is a Nova Scotia holding company with its registered office located in Halifax, Nova Scotia.

[8] The Defendant Jost Vineyards Limited (“JVL”) is a Nova Scotia corporation with its head office located in Halifax. JVL purchases grapes from other Nova Scotia grape producers. JVL operates a farm winery in Malagash, Nova Scotia where it grows, harvests and presses grapes. It also barrels, filters and bottles wine and conducts primary fermentation and bacterial processes. Over 90% of JVL’s annual sales are made in Nova Scotia.

[9] The Defendant Carl Sparkes resides in Malagash, Nova Scotia and is the President of DCWL and JVL.

[10] From 2002 until February 1, 2016, CCL acted as sales agent for JVL in Nova Scotia and the other 3 Atlantic Provinces.

[11] On or about January 19, 2016, Mr. Sparkes advised CCL that:

• JVL would be terminating its sales agency agreements effective February 1, 2016 and
• JVL intended to hire Mr. Haider.

[12] Shortly thereafter Mr. Haider advised CCL that he would be resigning effective February 15, 2016.

[13] CCL advised Mr. Sparkes and reminded Mr. Haider of a non-solicitation clause in his Employment Agreement.

[14] CCL’s claim alleges that Mr. Haider falsely advised that he was leaving the wine and spirits industry and that he would not take a position with JVL. CCL alleges that Mr. Sparkes subsequently advised that as a result of the non-solicitation provision, JVL would not be offering Mr. Haider a position. CCL claims that, notwithstanding these representations, shortly after his final day at CCL, JVL employed Mr. Haider under a “real estate” or other branch of JVL to conceal that he was providing services to JVL and that as a result Mr. Haider breached the non-solicitation clause in his Employment Agreement.

[15] The Defendants delivered a Notice of Intent to Defend and advised that they intended to bring a motion disputing Ontario as the appropriate jurisdiction to try the subject matter of the action (i.e. a forum non conveniens motion).

[16] The Defendants served their Motion Record for the motion on March 29, 2017 along with a forum non conveniens notice of motion returnable April 11, 2017.

[17] On April 4, 2017 Counsel for the Defendants wrote to counsel for the Plaintiff and proposed the following:

“I am writing further to our recent communications. My clients propose the following:

• I will proceed (1) to file forthwith a CSU Confirmation Form in the form attached hereto as Schedule “A”, and (2) to book an appointment to appear in Civil Practice Court to schedule a new hearing date for the motion.
• Counsel for the defendants will serve a Statement of Defence on or before April 28, 2011. The Statement of Defence will be accepted by the plaintiff without prejudice to the defendants’ position on the motion. The Statement of Defence will not be filed,
• The parties will use best efforts to complete documentary disclosure in this proceeding on or before Friday, June 16, 2017.
• The parties will use best efforts to complete voluntary examinations for discovery of (1) a representative of the plaintiff, (2) the first defendant and (3) the fourth defendant (in his personal capacity as well as in his capacity as a representative of the two corporate defendants), on or before Friday, September 1, 2017.
• In the event that the Plaintiff commences a proceeding in the Supreme Court of Nova Scotia in substitution for the current proceeding, (1) any document produced pursuant to paragraph 3 may be used by an opposing party in the new proceeding as if the document had been produced in the new proceeding pursuant to the Nova Scotia Civil Procedure Rules, and (2) the transcript of any examination conducted pursuant to paragraph 4 may be used by an opposing party in the new proceeding as if the examination had been conducted in the new proceeding pursuant to the Nova Scotia Civil Procedure Rules.

If your client concurs with the above, please sign below to indicate that, and scan/email the signed version of this letter to me for my file. I will then submit the CSU Confirmation Form.”

[18] Counsel for CCL signed this letter indicating acceptance of the proposal.

[19] In accordance with this agreement, the Plaintiff completed its examinations on August 15, 2017.

[20] As a result of admissions made by the Defendants on examinations for discovery, CCL commenced a summary judgment motion.

[21] The Defendants made no efforts to discover CCL’s representative.

[22] Pursuant to the practice in Toronto, counsel attended at Civil Practice Court on December 12, 2017 to speak to the scheduling of the summary judgment motion. The presiding judge at the Civil Practice Court directed that the outstanding jurisdiction motion should not delay the scheduling of the summary judgment motion and ordered that the parties attend on December 19, 2017, prepared to set a date for the summary judgment motion.

[23] The next day, on December 13, 2017, the parties attended by telephone before Master McGraw to schedule the forum non conveniens motion.

[24] Following the conference call, Master McGraw wrote the following endorsement:

“Counsel advises that this is a long motion requiring 4 hours which they wish to schedule for February 2018. I am fully prepared to accommodate the parties to schedule and timetable this motion for 4 hours in February. However, in my view, it would not be efficient, proportionate or a good use of scarce court resources to schedule this motion until the parties re-attend at CPC and it is determined if and when the summary judgment motion is proceeding.

Specifically, it is important to ensure that the timing of the summary judgment motion does not raise the possibility that this jurisdiction motion may become moot if it proceeds. It may also be the case that there are efficiencies to be gained from having the summary judgment motion proceed first and/or its result might otherwise affect this jurisdiction motion. For example, the result of the summary judgment motion may affect how the trial proceeds and in what format which would in turn affect material issues on the jurisdiction motion such as the location of witnesses. In any event, these are issues exclusively in the jurisdiction and for the consideration of the Judge presiding at CPC.

If the Judge presiding at CPC is satisfied that this jurisdiction motion should proceed first and can be accommodated by the timing of the summary judgment motion, I will work with the parties to expeditiously schedule, timetable and hear this motion.”

[25] The parties re-attended at Civil Practice Court on December 19, 2017. The presiding judge at the Civil Practice (“CPC Judge”) scheduled CCL’s summary judgment motion for June 7, 2018 and recorded the following endorsement:

“Defendant’s motion seeking stay for forum non conveniens to proceed first before Master McGraw in February 2018 in accordance with his endorsement of Dec. 13/17. Parties may re-attend in CPC again by end of March 2018 to provide court with update as to status of decision on forum non conveniens motion and whether timetable, which is attached & approved, needs to be varied.”

[26] The forum non conveniens motion proceeded before Master McGraw.

[27] In his reasons, at para. 30, Master McGraw states:

“CCL submissions rely almost entirely on the fact that because its summary judgment motion is already scheduled to proceed… Ontario is the forum which will ensure fairness to the parties and a more efficient process for resolving their disputes.”

[28] Master McGraw rejected this submission, declined to exercise jurisdiction, and ruled that Nova Scotia was a clearly more appropriate forum. It is from this order that the plaintiff now appeals.

[29] The Master’s exercise of discretion concerning the more appropriate forum is entitled to deference, absent an error of law or a clear and serious error in the determination of relevant facts. See Club Resorts Ltd. v. Van Breda, 2012 SCC 17,at paras.103, 108, 112.

[30] The Appellant submits that the Master made errors in law by incorrectly applying the factors in a forum non conveniens analysis and by conflating the issue of forum non conveniens and jurisdiction simpliciter. As a result, the Appellant submits that the Master's exercise of discretion is not entitled to a deferential standard of review and that this Court should conduct a fresh analysis of the forum non conveniens question.

[31] Specifically, the Appellant submits the Master made the following errors:

• Ignored the status and/or determination of the summary judgment motion as a factor to consider in a forum non conveniens analysis.
• Misconstrued the CPC Judge's orders regarding the scheduling of the motions.
• Mischaracterized the elements of the forum non conveniens test, and thereby blurred the distinction between jurisdiction simpliciter and forum non conveniens.

[32] The Appellant does not dispute that the Master referred to the correct legal tests with respect to forum non conveniens: See Appellant’s factum, at para.31.

The Master did not ignore the status or determination of the summary judgment motion

The Master did not misconstrue the Civil Practice Court judge’s order regarding the scheduling of the forum non conveniens and summary judgment motions

[33] Master McGraw was aware of the importance of the status and determination of the summary judgment motion; however, he viewed the fact that the summary judgment motion had been scheduled as a weak factor affecting his forum non conveniens analysis.

[34] As can be seen from the Master’s December 13, 2017 endorsement referred to earlier, the Master did not want to schedule the forum non conveniens motion until he knew the date of the summary judgment motion. The Master wanted to make sure “that the timing of the summary judgment motion” did not raise the possibility that the forum non conveniens motion would become moot.

[35] The Master also observed that “the result of the summary judgment motion may affect how the trial proceeds and in what format which would in turn affect material issues on the jurisdiction motion such as the location of witnesses”. Finally, the Master indicated that he would be guided by the CPC Judge on the question of whether the forum non conveniens motion should proceed first and whether the forum non conveniens motion could be accommodated by the timing of the summary judgment motion.

[36] As indicated, the parties had been ordered back to the Civil Practice Court on December 19, 2017. When they attended on that date, the CPC Judge was aware of Master McGraw’s December 12, 2017 request for directions. Consistent with Master McGraw’s request, the CPC Judge directed that the “defendant’s motion seeking stay for forum non conveniens to proceed first before Master McGraw in February 2018”. In addition, the CPC Judge accommodated the timing of the forum non conveniens motion by scheduling the summary judgment motion for June 7, 2018.

[37] As indicated, the CPC Judge gave his directions on December 19, 2017. On January 10, 2018 Master McGraw scheduled and timetabled the forum non conveniens motion. Master McGraw released his decision on March 27, 2018.

[38] In part Master McGraw relied on the fact that he had been directed by the CPC Judge to hear and decide the forum non conveniens motion prior to the summary judgment motion when he concluded that the scheduling of the summary judgment motion was a weak factor affecting his forum non conveniens analysis. During argument Master McGraw offered to briefly adjourn the forum non conveniens motion to allow counsel for CCL to attend at the Civil Practice Court and confirm Master McGraw’s understanding of the Civil Practice Judge’s directions; CCL declined the Master’s offer.

[39] Given the wording of the CPC Judge’s December 19, 2017 endorsement referred to elsewhere, it was reasonable for the Master to conclude that he had been directed to proceed with the forum non conveniens motion in advance of the summary judgment motion and that the scheduling of the summary judgment motion was, therefore, a weak factor at best in his forum non-convenience analysis.

[40] The Master also concluded that to accept CCL submissions would be contrary to the terms of the agreement between the parties that they would take steps in the Ontario action without prejudice to the outstanding forum non conveniens motion.

[41] The Master’s interpretation of the agreement was a reasonable, namely that the parties had agreed, quite sensibly, to advance the action without prejudice to their disagreement about the more appropriate forum. It would be quite pointless for the agreement to mean that acceptance of the statement of defence was without prejudice to the forum non conveniens motion, but the exchange of documents and oral discovery were with prejudice.

[42] In addition, the agreement provided in item #5 that, if CCL started a proceeding in Nova Scotia including presumably a motion for summary judgment, any documents produced and any admissions on oral discovery obtained in the Ontario action would be admissible in the Nova Scotia proceeding.

[43] Accordingly, I’m satisfied that the Master did not ignore the summary judgment motion in his decision and did not misconstrue the scheduling order of the CPC Judge.

The Master did not mischaracterize the elements of the forum non conveniens test and blur the distinction between jurisdiction Simpliciter and forum non conveniens.

[44] The parties agreed that Ontario had jurisdiction simpliciter.

[45] The parties agreed that the Master referred to the correct legal tests with respect to forum non conveniens.

[46] The Master referred to the non-exhaustive list of factors considered in a forum non conveniens analysis and explained how he applied each factor.

[47] The Appellant’s complaint has its genesis in para. 58 of the Master’s reasons which provides as follows:

In setting up its business in this manner, it is reasonable for CCL to contemplate litigation arising from its business in Atlantic Canada. When CCL itself commences litigation against Defendants who are all resident in Nova Scotia and who have contracted with CCL as employees or clients of CCL to provide or receive services in Nova Scotia, it is also reasonable and efficient to expect that such defendants be able to respond to proceedings in Nova Scotia. It is not fair or efficient for CCL to expect that it can, on the one hand, contract with parties and operate its business in Nova Scotia, and on the other, commence litigation against them and expect them to respond to CCL’s claims in Ontario.

[48] The Appellant complains that this paragraph amounts to a statement by the Master that Ontario should not have jurisdiction.

[49] I reject this submission.

[50] Paragraph 58 appears in the portion of the Master’s assessment of the factors affecting whether Nova Scotia is the clearly more appropriate forum for determination of the subject matter of CCL’s claim. At para. 31 the Master begins his assessment of these factors with the statement “I consider the relevant factors in turn below”.

[51] Paragraph 58 appears after the subheading “Fair and Efficient Working of the Canadian Legal System”, which is described in the reasons as “factor ix”.

[52] The Fair and Efficient Working of the Canadian Legal System is a relevant factor for consideration in a forum non conveniens analysis: See Van Breda at para. 105.

[53] It was CCL’s primary submission that Ontario was an appropriate forum based on fairness and efficiency because CCL’s summary judgment motion had already been scheduled. After considering and rejecting that submission, the Master then offered a further reason for rejecting CCL’s submission; namely that because CCL carried on business in Atlantic Canada, maintained an office in Halifax, employed staff who lived and worked in Atlantic Canada and contracted with the defendants in Nova Scotia, it was not fair or efficient when CCL sued the defendants to require them to respond in Ontario. The Master was explaining why the “Fair and Efficient Working of the Canadian Legal System” suggested Nova Scotia was a clearly more appropriate form; the Master was neither addressing jurisdiction simpliciter nor suggesting that Ontario did not or should not have jurisdiction simpliciter.

[54] The Appellant also complains that the Master merged the notions of jurisdiction simpliciter and forum non conveniens.

[55] I reject this submission.

[56] The Appellant submits that the Master’s merger of the notions of jurisdiction simpliciter and forum non conveniens is illustrated by the Master’s statement at para. 53 that it was unfair and unreasonable for CCL to attempt to select the form of its choice by scheduling a summary judgment motion.

[57] Paragraph 53 provides as follows:

In the December 15 Endorsement, I stated that I would hear this motion in the proposed timeframe if so directed by a Judge at CPC. Justice Diamond directed me to do so and this motion has been scheduled and heard. CCL had 2 opportunities at CPC to speak to the scheduling of these motions. During submissions, I offered CCL a brief adjournment if they wished to re-attend before Justice Diamond to further clarify his directions in the December 19 Endorsement. CCL declined my offer. Based on the December 19 Endorsement, it is reasonable to conclude that Justice Diamond directed me to hear this motion and render a decision before the summary judgment motion is heard, not defer a decision until after the disposition of the summary judgment motion (the very concern I raised). Further, I cannot conclude that the scheduling of the summary judgment motion in the December 19 Endorsement was intended to have the significant impact on this jurisdiction motion that CCL suggests. It is unfair and unreasonable in these circumstances for CCL to determine the forum for these proceedings by simply scheduling a summary judgment motion in the forum of its choice. [Emphasis added]

[58] As can be seen at para. 53, the Master concluded that the CPC Judge directed him to hear and decide the forum non conveniens motion in the proposed timeframe (i.e. February 2018 approx.). The Master points out that he offered CCL a brief adjournment to check with the CPC Judge on December 19, 2017 to clarify the endorsement and that CCL declined his offer.

[59] As indicated, the Master’s interpretation of the December 19, 2017 endorsement was open to him having regard to the wording of the endorsement.

[60] The Master explained that it was unfair and unreasonable in the circumstances of this litigation for him to conclude that CCL’s scheduling of its summary judgment motion determined the outcome of the forum non conveniens motion. The Master was not suggesting that there was an onus on the Appellant to establish a connecting factor for Ontario; rather the Master was conveying that scheduling a summary judgment motion, given the context in which it occurred, was an insignificant circumstance.

[61] This conclusion of the Master was neither incorrect nor unreasonable.

[62] The Appellant provided the Master with two cases in which the court when confronted by both a forum non conveniens motion and a summary judgment motion decided the summary judgment motion first.

[63] The Master correctly distinguished both cases on the basis that, in each case the forum non conveniens motion and the summary judgment motion were heard at the same time whereas in this matter the Master had been directed to hear and decide the forum non conveniens motion first and that the motions were intentionally not scheduled to be heard together.

[64] Accordingly, I am satisfied that the Master did not mischaracterize the forum non conveniens test and did not blur the distinction between jurisdiction simpliciter and forum non conveniens.

The Master’s assessment of three forum non conveniens factors is entitled to deference

[65] The Appellant disagrees with Master’s assessment of three factors in his forum non conveniens analysis:

• applicable law/choice of law;
• avoidance of multiplicity of proceedings; and
• location of the parties.

[66] With respect to the Master’s conclusion concerning the applicable law, the Appellant relies on Yip v. HSBC Holdings plc, 2017 ONSC 5332. In that case, Mr. Yip sued HSBC Holdings, whose shares were never traded in Canada as a “responsible issuer” under the Ontario Securities Act. However, in the Yip decision, the Ontario Court was being asked to interpret and apply Ontario law.

[67] This case is fundamentally different. One of the Agency Agreements stated that it was to be construed in accordance with the law of Nova Scotia, while the other Agency Agreement stated that it was to be construed in accordance with the laws of New Brunswick, Newfoundland, and Prince Edward Island. The Employment Agreement did not contain an applicable law provision.

[68] The Master’s conclusion that it is less efficient for the courts in Ontario to apply the laws of Nova Scotia than it is for Nova Scotia to apply those laws is obviously correct. The weight to be attached to this factor might be minimal, as Justice Perell suggested at para. 258, but that was a matter for the Master to decide on the motion and not for this Court to decide on appeal.

[69] Similarly, it was obviously correct for the Master to conclude that an Ontario judgment would have to be enforced in Nova Scotia. The ease with which enforcement can be achieved as a result of Morguard Investments Ltd. v. De Savoye, 3 S.C.R 1077 affects the weight to be attached to this factor. However, the weight to be attached to this factor was a matter for the Master.

[70] The Master’s assessment of where the parties were located was correct as was his assessment of where the relevant contracts were made. The weight to be attached to this factor was for the Master.

[71] Because I have concluded that the Master’s reasons contain neither an error of law nor a clear and serious error in the determination of relevant facts, there is no basis for this Court substituting its view of the importance of these factors for the Master’s view.

Conclusion

[72] This appeal is dismissed with costs.

[73] The parties agreed that costs in the amount of $5500 should be awarded to the successful party. This seems reasonable to me. Accordingly, the Appellant will pay $5500 to the Respondents inclusive of disbursements and HST.

MARROCCO A.C.J.S.C.

Date: 20190215