CITATION: James Bay Resources Limited v. Mak Mera Nigeria Limited, 2015 ONSC 1538
COURT FILE NO.: CV-14-511332
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JAMES BAY RESOURCES LIMITED
Plaintiff
– and –
MAK MERA NIGERIA LIMITED a.k.a. MAK MERA LIMITED and ADEWALE OLORUNSOLA a.k.a. WALE SOLA
Defendants
Hilary Book and Nadia Chiesa for the Plaintiff
Wade Morris for the Defendants
HEARD: March 2, 2015
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION
[1] This is a jurisdiction motion. The Defendants, Mak Mera Nigeria Limited (“Mak Mera”) and Adewale Olorunsola, also known as Wale Sola, move for an Order staying this action on the ground that Ontario does not have jurisdiction simpliciter over the Defendants or on the ground that Ontario is forum non conveniens.
[2] For the reasons that follow, I dismiss the motion. There are several bases upon which Ontario has jurisdiction over the Defendants. And, Nigeria is not the more convenient forum.
B. FACTUAL BACKGROUND
[3] Steven Shefsky is the CEO of the Plaintiff James Bay Resources Limited (“James Bay”), which is an Ontario corporation with a head office in Toronto. It was formerly listed on the TSX Venture Exchange and is more recently listed on the Canadian Securities Exchange. James Bay is an investor in resource properties, and in 2011 it began to explore investing in oil and gas in Nigeria.
[4] Mr. Sola is the President of Mak Mera, a company incorporated in Nigeria, which holds itself on its website as conducting business around the world. It does not have a formal office in Ontario or any property or assets here but Mr. Sola, it seems, borrows the offices of others and Mak Mera’s website provides an address on Adelaide Street in Toronto.
[5] Mr. Sola resides in both Nigeria and Ontario. He is married to a physician who has a practice in St. Thomas, Ontario. She owns a home in London, Ontario and another at32 Stadium Rd. in Toronto, which is the address on Mr. Sola’s Ontario driver’s licence. Mr. Sola owns or has owned several clothing stores in Toronto, and he is also the President of Rein Capital Corp., a merchant bank with offices in Toronto.
[6] Mak Mera’s Chairman is Chief Michael Olorunfemi, who is Mr. Sola’s father-in-law. Chief Olorunfemi lives in Nigeria, but he frequently visits his daughter, Mr. Sola’s wife, and his grandchildren in London. He visits another daughter who lives in the Windsor area and usually summers in Ontario.
[7] In February of 2011, Jay Freeman of JJR Capital Properties, which is located in Toronto, introduced Mr. Shefsky to Mr. Sola. Subsequently, there were meetings in Toronto and Kitchener-Waterloo to discuss James Bay’s plans to acquire an interest in a Nigerian oil and gas resource property.
[8] On March 9, 2011, in Toronto, James Bay and Mak Mera signed a Memorandum of Understanding under which Mak Mera agreed to perform services for James Bay in Nigeria to facilitate its plans to acquire oil and gas assets in Nigeria. Under the Memorandum of Understanding, Mak Mera was entitled to a $300,000 “Success Fee” and also shares in James Bay upon certain performance conditions being met.
[9] It is alleged that James Bay made advances on the Success Fee without being obliged to do so, and one of the issues in this lawsuit is James Bay’s claim for a return of the advances. Between April 2011 and January 2012, James Bay advanced US$240,000. Some of the advances were paid to Mr. Sola by cheques received in Toronto.
[10] For the balance of 2011, Mak Mera performed under the Memorandum of Understanding, and in light of the progress that was being made, on February 1, 2012, the parties signed a more comprehensive agreement referred to as the “Letter Agreement.” The Letter Agreement was signed in Toronto.
[11] The Letter Agreement provided that James Bay would issue shares to Mak Mera and pay the Success Fee if certain targets were met by December 31, 2013, failing which James Bay’s obligations to issue shares or to make payments to Mak Mera would cease to exist. Mak Mera acknowledged that the issuance of the James Bay shares was contingent on the receipt of TSXV approval and that James Bay could not control or guarantee such approval.
[12] The Letter Agreement included a “governing law” provision. Section 16 of the Letter Agreement states:
This Agreement and the rights and obligations and relations of the parties hereto shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and that the Courts of Ontario shall have jurisdiction to entertain any action or other legal proceedings based on any provisions of this Agreement and each party hereto does hereby attorn to the jurisdiction of the Courts of the Province of Ontario
[13] After the Letter Agreement was signed, James Bay advanced an additional US$165,000 against the Success Fee. In total, US$405,000 was advanced toward the Success Fee.
[14] For reasons that need not for present purposes be described, James Bay was unable to obtain approval from the TSXV for the transaction. James Bay says that the Letter Agreement terminated on December 31, 2013. Whether this is true is a disputed point in the litigation.
[15] On July 2, 2014, Mr. Sola sent a letter on Mak Mera letterhead to two senior officers or employees of Shell in the Netherlands, copied to several other individuals, including the Nigerian High Commissioner to Canada in Ottawa and individuals in Nigeria. The July 2, 2014 letter alleges that James Bay failed to fulfill its obligations to Mak Mera under the Letter Agreement, and the letter goes on to make serious allegations about James Bay’s conduct.
[16] On July 15, 2014, James Bay’s lawyers sent a letter to Mak Mera demanding that the company cease and desist from making any false or misleading accusations against James Bay.
[17] On August 5, 2014, in response, Mr. Sola and Mak Mera’s solicitors sent a letter which threatened to damage James Bay’s reputation and business activities worldwide. The letters are allegedly defamatory.
[18] James Bay began this action on September 2, 2014. James Bay claims damages for breach of contract (the Letter Agreement) and unjust enrichment because of the Defendants’ alleged failure to pay back the advances on the Success Fee. James Bay also claims damages for the libellous and defamatory statements made by Mr. Sola and Mak Mera in the correspondence.
[19] After the commencement of the Ontario action, on September 16, 2014, Mak Mera, Mr. Sola, and Chief Olorunfemi commenced an action in the Nigerian Federal High Court against James Bay, James Bay Energy Nigeria Limited, Mr. Shefsky, Crestar Integrated Natural Resources Limited, Adeniyi Olaniyan, Shell Petroleum Development Company Limited, the Director of Nigeria’s Department of Petroleum Resources, the Minister of Petroleum Resources, and the Nigerian Corporate Affairs Commission.
[20] James Bay and several other Defendants brought a motion to strike the Nigerian Action on several grounds, including jurisdiction.
[21] On November 5, 2014, Mak Mera, Mr. Sola, and Chief Olorunfemi commenced a second action in Nigeria, against James Bay, D&H Solutions AS, D&H Energy Nigeria Limited, Ondobit Nigeria Limited, the Corporate Affairs Commission and the Director of the Department of Petroleum Resources relating to a Memorandum of Understanding between D&H Solutions AS and Mak Mera.
[22] The Statement of Claim in the second Nigerian Action was not served on James Bay until December 24, 2014. None of the defendants in the second Nigerian Action have yet defended that action. James Bay intends to bring a motion to challenge the jurisdiction of the Nigerian court to hear the second Nigerian Action.
[23] On February 24, 2015, the Nigerian court held that it had jurisdiction to determine the first Nigerian action. This ruling is presently under appeal.
C. DISCUSSION
[24] I begin the discussion by noting that the Ontario court has jurisdiction simpliciter over Mr. Sola who is an Ontario resident. The pertinent question is whether the court has jurisdiction simpliciter over his Nigerian corporation, the Defendant Mak Mera.
[25] The test for whether an Ontario court has jurisdiction simpliciter is whether there is a real and substantial connection between the matter, the parties, and Ontario: Village Resorts Ltd. v. Van Breda, 2012 SCC 17, affg. 2010 ONCA 84, [2010] O.J. No. 402 (C.A.), affg. 2008 32309 (ON SC), [2008] O.J. No. 2624 (S.C.J.). The. Van Breda analytical framework begins by identifying circumstances where a court may presumptively assume jurisdiction on the basis of a real and substantial connection with the plaintiff’s litigation and then the connection can be rebutted by the defendant through evidence that the connection is weak; i.e. not real and substantial.
[26] One of the presumptive factors is a contract made in the jurisdiction. In the case at bar both the Memorandum of Understanding and the Letter Agreement, which are the foundation for James Bay’s action, are contracts made in Ontario and the Letter Agreement is governed by Ontario law and contains a choice of forum clause.
[27] In Z.I. Pompey Industries v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450 (S.C.C.), the Supreme Court of Canada indicated that a forum selection clause should be enforced unless there is “strong cause” not to enforce it. The effect of such a clause is to reverse the onus of proof, which normally requires the moving party defendant to justify staying the plaintiff’s action, to place a burden on the plaintiff to show why a stay should not be granted: BNP Paribas (Canada) v. BCE Inc., 2007 ONCA 559, [2007] O.J. No. 3026 (C.A.); Red Seal Tours Inc. v. Occidental Hotels Management B.V., 2007 ONCA 620, [2007] O.J. No. 3397 (C.A.).
[28] Neither Mak Mera nor Mr. Sola has advanced any cogent argument that there is a rebuttal of the contractual connection as a presumptive factor. Their arguments may be relevant to the issue of forum conveniens, but jurisdiction simpliciter is not rebutted.
[29] One presumptive factor is sufficient to establish jurisdiction simpliciter over Mak Mera, but, in the case at bar, there is perhaps a second and a third factor establishing that the court has jurisdiction simpliciter. The second possibly available presumptive factor is doing business in Ontario. The third possibly available presumptive factor is the tort of defamation connecting the action to Ontario.
[30] Although Mak Mera does not have a formal office in Ontario, nevertheless, having regard to its activities in Ontario, including Mr. Sola managing its affairs from his Ontario residences and negotiating contracts here, it is at least arguable that Mak Mera carries on business in Ontario. The allegedly defamatory statements aimed to harm an Ontario corporation are also arguably a connecting factor. It is, however, not necessary for me to decide these points, because one connecting factor is sufficient.
[31] I turn now to the matter of whether Ontario is forum non conveniens. Courts have developed a list of factors that may be considered in determining the most appropriate forum for the action or application including: (a) the location of the majority of the parties; (b) the location of the key witnesses and evidence; (c) contractual provisions that specify applicable law or accord jurisdiction; (d) the avoidance of multiplicity of proceedings; (e) the applicable law and its weight in comparison to the factual questions to be decided; (f) geographical factors suggesting the natural forum; and (g) whether declining jurisdiction would deprive the plaintiff of a legitimate juridical advantage in the domestic court.
[32] These factors are not exhaustive, and the weight to be given any factor is a matter of the exercise of the court’s discretion, which is guided by three principles: Young v. Tyco International of Canada Ltd. (2008), 2008 ONCA 709, 92 O.R. (3d) 161 (C.A.). First, the threshold for displacing the plaintiff’s choice is high, and the existence of a more appropriate forum must be clearly demonstrated: Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), 1993 124 (SCC), [1993] 1 S.C.R. 897. Second, the court should consider and balance the efficiency and convenience of a particular forum with the fairness and justice of that choice to the parties: Hunt v. T&N plc, 1993 43 (SCC), [1993] 4 S.C.R. 289; Antares Shipping Corp. v. Capricorn (The), 1976 5 (SCC), [1977] 2 S.C.R. 422. Third, because a forum non conveniens motion is brought early in the proceeding, the court should adopt a cautious approach to fact-finding particularly with respect to matters that are at the heart of the lawsuit; the assessment of the factors should be based on the plaintiff’s claim if it has a reasonable basis in the record: Young v. Tyco International of Canada Ltd., supra.
[33] In the case at bar, it was not suggested that James Bay would be deprived of a legitimate juridical advantage if a stay were granted and staying the Ontario action would avoid a multiplicity of proceedings. However, the contractual provisions that specify applicable law and that accord jurisdiction strongly privilege Ontario. At first blush, the geographical factors and the location of some witnesses would appear to favour Nigeria, but upon closer analysis of the pleaded claim, the location of the key witnesses and the evidence would appear to favour Ontario where the contracts were negotiated and signed and where the circumstances leading to James Bay terminating the contract occurred. The principal actors in the story Mr. Shefsky, Mr. Sola, and Chief Olorunfemi have strong connections to Ontario, and they contractually anticipated that any disputes would be resolved by Ontario law and in Ontario. Balancing all the factors, Nigeria is not clearly the appropriate forum for the dispute, and Ontario is not forum non conveniens.
D. CONCLUSION
[34] For the above reasons, I dismiss the jurisdictional motion.
[35] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with James Bay’s submissions within 20 days of the release of these Reasons for Decision followed by the Defendants’ submissions within a further 20 days.
Perell, J.
Released: March 9, 2015
CITATION: James Bay Resources Limited v. Mak Mera Nigeria Limited, 2015 ONSC 1538
COURT FILE NO.: CV-14-511332
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JAMES BAY RESOURCES LIMITED
Plaintiff
– and –
MAK MERA NIGERIA LIMITED a.k.a. MAK MERA LIMITED and ADEWALE OLORUNSOLA a.k.a. WALE SOLA
Defendants
REASONS FOR DECISION
PERELL J.
Released: March 9, 2015