COURT FILE NO.: CV-12-464634

DATE: 20130708

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: EDWARD JONES v. RAYMOND JAMES LTD., MICHAEL BARKER and LESLIE GUTOSKI

BEFORE: Justice Swinton

COUNSEL:
Mark S. Shapiro and Mordy Mednick, for the Plaintiff/Responding Party

David Di Paolo and A. Nicole Westlake, for Defendants Raymond James Ltd. and Michael Barker, Moving Parties

HEARD: July 5, 2013

E N D O R S E M E N T

Swinton J.:

Overview

[1] Defendants Raymond James Ltd. and Michael Barker have brought a motion to dismiss or stay this action, either on the basis that the Ontario court has no jurisdiction or on the grounds of forum non conveniens. The plaintiff Edward Jones has brought a cross-motion seeking an order to consolidate this action with three other Ontario actions. For the reasons that follow, I would dismiss both motions.

The Jurisdictional Issue

[2] Courts in Canadian provinces have jurisdiction over an action when there is a real and substantial connection between the forum, the subject matter of the litigation and the defendants. In making the determination of a real and substantial connection, the courts must consider whether there is any presumptive connecting factor linking the subject matter of the litigation to the forum. If so, the party challenging the assumption of jurisdiction has the onus to rebut the presumption by showing that the connecting factor does not point to any real relationship between the subject matter of the litigation and the forum, or points to only a weak relationship (Van Breda v. Village Resorts Ltd., 2012 SCC 17 at paras. 90, 91, and 95).

[3] Mr. Barker, a resident of Manitoba, terminated his employment with the plaintiff Edward Jones as an investment advisor in Winnipeg and began working for Raymond James in Winnipeg. The plaintiff alleges that he breached confidentiality and non-solicitation obligations in his employment contract as well as breaching common law duties. The plaintiff alleges that Raymond James is vicariously liable and, as well, is directly liable for conspiracy and various economic torts.

[4] In my view, the plaintiff has established presumptive connecting factors that link the subject matter of the litigation to Ontario. Indeed, the defendants conceded, during the argument of this motion, that Raymond James carries on business in the province of Ontario. That is one of the connecting factors identified in Van Breda (see paras. 87 and 90).

[5] The plaintiff has also identified a presumptive connecting factor linking its action against Mr. Barker to Ontario - namely, a contract connected with the dispute was made in Ontario. That contract is the employment contract between Mr. Barker and the plaintiff.

[6] The general rule of contract formation is that a contract is made in the place where the offeror receives notice of the offeree’s acceptance, with the only exception being the postal acceptance rule (Eastern Power Ltd. v. Azienda Comunale Energia and Ambiente (1999), 1999 3785 (ON CA), 178 D.L.R. (4th) 409 (Ont. C.A.) at para. 22). In the present case, Mr. Barker received an agreement from the plaintiff in Winnipeg, signed it and returned it by fax and by courier to the plaintiff’s office in Ontario. As the plaintiff received notification of Mr. Barker’s acceptance by fax in Ontario, the employment contract was made in Ontario (Eastern Power at para. 27).

[7] The onus is on the defendants to rebut the presumption of a real and substantial connection of the subject matter of the litigation to Ontario. They argue that the business carried on by Raymond James in Ontario is not closely connected to the subject matter of the litigation, which is, in essence, an allegation of breach of contract that occurred in Manitoba. They also argue that the contractual link is based on a technical argument and does not provide a real link to Ontario.

[8] In Van Breda, the Supreme Court of Canada held that Ontario had jurisdiction over a tort action arising out of events in Cuba because a contract had been entered into in Ontario that created a relationship for the services of Ms. Van Breda’s partner. The events giving rise to her tort claim were found to have flowed from that relationship (at paras. 114-117).

[9] In the present case, the events which gave rise to the claims against both the defendants flow from the relationship created by Mr. Barker’s employment contract with the plaintiff, which was made in Ontario. The interpretation of the contract’s terms will form an important part of the litigation. Thus, this is not a case where the contract has little or nothing to do with the litigation, so that the presumption can be rebutted (see Van Breda, para. 96).

[10] With respect to Raymond James, the presumption might be rebutted if the subject matter of the litigation were unrelated to its business activity in Ontario. However, the plaintiff alleges that Raymond James adopted a corporate strategy to hire investment advisors away from Edward Jones, who would bring with them an existing clientele. The evidence shows that the executive team of Raymond James is based in Ontario. Moreover, Mr. Barker dealt with two individuals in the Toronto office in his negotiations about new employment.

[11] In my view, the defendants have not rebutted the presumption that there is a real and substantial connection between the subject matter of the litigation and Ontario. Accordingly, this Court has jurisdiction over this action.

Forum Non Conveniens

[12] In the alternative, the defendants argue that Manitoba is the more appropriate forum. The onus is on them to show that Manitoba is clearly more appropriate (Van Breda at paras. 108, 109).

[13] In deciding whether another forum is more appropriate, a court considers such as factors as the number of witnesses and their location, the location of the parties, any prejudice from the use of one forum or another, the law to be applied, and the possibility of conflicting decisions (Van Breda at para. 110). The defendants submit that the majority of witnesses are located in Manitoba, including Mr. Barker, Ms. Gutoski and Mr. Barker’s clients. They also argue that Mr. Barker would be prejudiced financially if he had to pay the costs of litigating in Ontario.

[14] However, as the plaintiff points out, many of the key witnesses are located outside of Manitoba. That is the case for the plaintiff’s witnesses, who are in Ontario. As well, those with whom Mr. Barker negotiated his hiring at Raymond James are in Ontario, and the executive office of Raymond James, where the alleged corporate strategy was conceived, is in Ontario. In addition, some of the other witnesses that Raymond James may call are in Vancouver, not Manitoba.

[15] Moreover, the employment contract with Edward Jones specifically states that the law of Ontario will govern disputes under the contract. If the litigation occurs in Ontario, there will be no need for experts to prove Ontario law.

[16] I am not persuaded by the plaintiff’s argument that there is a risk of inconsistent decisions, as the action involving Mr. Barker and the three actions in Ontario involving other investment advisors will turn on contracts that are worded differently with respect to non-solicitation of clients. As well, each of these actions will require proof of the negotiations of the individual advisors with Raymond James, the steps they took after and the damages, if any, incurred as a result of their conduct. The result will turn on the specific facts of each case, even if the corporate strategy of Raymond James features in each.

[17] Overall, I am not satisfied that the defendants have shown Manitoba to be a clearly more appropriate forum. Therefore, the defendants’ motion is dismissed.

The Plaintiff’s Cross-Motion

[18] The plaintiff has brought a motion under rule 6.01 for an order that this action be tried together with the three Ontario actions against other investment advisors or heard immediately after one another. The plaintiff argues that the four actions involve an employment contract that is largely the same in its wording. As well, the plaintiff argues that it pleads a corporate strategy by Raymond James in each action, and a multiplicity of proceedings can be avoided, as well as any risk of inconsistent decisions.

[19] Rule 6.01 allows a court to order trial together where there is a question of law or fact in common in the actions, or the relief claimed arises out of the same transaction or occurrence, or for any other reason an order ought to be made under the rule. In making such an order, the court also considers the balance of convenience.

[20] I am not satisfied that the order sought should be granted. Mr. Barker’s employment contract is differently worded from that of the defendants in the other three actions, since it bars solicitation but not dealing with former clients.

[21] Moreover, each of these actions turns on the alleged breaches by the investment advisors and their arrangements and understandings with Raymond James. Even if Raymond James pursued the alleged corporate strategy, the way in which the strategy played out turned on the interactions with each individual defendant and the steps they took. Therefore, I am not satisfied that there will be a saving of time if Mr. Barker’s action is tried with the others, as there is not likely to be a significant overlap in witnesses between the actions. Given the individualized nature of the actions, I do not see a risk of inconsistent decisions.

[22] Accordingly, the plaintiff’s cross-motion is also dismissed.

Costs

[23] If the parties cannot agree on costs, they may make brief written submissions within 21 days of the release of this decision.

Swinton J.

Released: July 8, 2013