COURT FILE NO.: CV-18-00608730

DATE: 20190328

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SKYDIVE WASAGA BEACH INC. and 2536-6501 QUEBEC INC.

AND:

AVWORKS AEROSPACE INC.

BEFORE: MR. JUSTICE CHALMERS

COUNSEL: J. Rosekat, for the Plaintiffs

K. Hjorth for the Defendant

HEARD: MARCH 15, 2019

ENDORSEMENT

Overview

[1] The Defendant brings this motion for an order staying the action pursuant to Rule 7.06(i)(b), on the basis that Ontario does not have jurisdiction. It is also the position of the Defendant that Ontario is forum non-convenient and that the court in Alberta is in a better position to dispose fairly and effectively of this litigation.

Preliminary Issue

[2] At the commencement of this motion, the Plaintiff brought a motion to amend the Statement of Claim to add as a party defendant, AvWorks Aerospace (CNY3) Inc. (“CNY3”). CNY3 is a federally incorporated corporation with a registered office in Calgary. CNY3 operates out of Collingwood, Ontario.

[3] Counsel for the Defendant advised that he has also been retained to defend CNY3 in the action. He stated that he consents to the Plaintiff’s motion. I granted the order sought. Accordingly, the Defendants’ motion proceeded on the basis that CNY3 is a Defendant in this action.

The Facts

[4] The Plaintiff, Skydive Wasaga Beach Inc. (“Skydive”) operated a skydiving company in the Wasaga Beach, Ontario area. Skydive was interested in purchasing a Cessna aircraft which was owned by the Plaintiff, 2536-6501 Quebec Inc. (“QuebecCo”).

[5] In January 2018, Skydive retained AvWorks and/or CNY3 to perform a pre-buy inspection of the aircraft. The inspection was carried out in Collingwood by Glenn Kozun, an AvWorks employee, on January 17 and 22, 2018.

[6] Following the pre-buy inspection, Glenn Kozun prepared an estimate of $56,014.10 to bring the aircraft to good working order. The estimate was provided on an AvWorks form.

[7] It is the position of the Plaintiff that on the basis of the estimate prepared by Mr. Kozun, it agreed to purchase QuebecCo for $85,000. The only asset of QuebecCo was the aircraft.

[8] AvWorks advised the Plaintiffs that the repairs could be performed at its facility in Calgary. The aircraft was sent to Calgary for repairs. The cost of the repairs was significantly higher than Mr. Kozun’s estimate. The Plaintiff disputed the amount charged for the repairs by AvWorks. This dispute was resolved with the Plaintiff agreeing to pay $70,000.00.

[9] In addition to the repairs carried out at the AvWorks facility in Calgary, repairs were required after the aircraft was put into service in Ontario. In addition, following a Transport Canada inspection in mid-June 2018, the aircraft was grounded because AvWorks failed to maintain proper records regarding the repairs to the aircraft.

[10] In November 2018, Skydive and QuebecCo brought the within action against AvWorks for misrepresentation with respect to the cost of repairs, negligent repair of the aircraft, breach of contract, and breach of the Defendants’ duty of care by failing to maintain proper maintenance records.

[11] In January 2019, AvWorks brought a separate action in Alberta against the Plaintiffs. The Alberta action is to set aside the settlement with respect to the repairs of the aircraft carried out by AvWorks and to collect fees for additional service carried out by AvWorks in Collingwood.

Analysis

[12] The Defendants take the position that Ontario does not have jurisdiction over the subject matter of this action.

[13] The leading case with respect to jurisdiction is Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 SCR 572. The Supreme Court of Canada held that the test for determining the proper forum of adjudication is based on whether there are presumptive connecting factors between the action and the chosen jurisdiction. The four presumptive factors are:

(1) The Defendant is domiciled or a resident in the Province;

(2) The Defendant carries on business in the Province;

(3) The tort was committed in the Province;

(4) The contract connected with the dispute was made in Ontario.

[14] With respect to the first connective factor, neither Defendant is a corporation incorporated pursuant to the laws of Ontario. AvWorks is an Alberta corporation and CNY3 is a federal corporation. Although the Defendants are not Ontario corporations, there is evidence that AvWorks and/or CNY3 carried on business in Collingwood.

[15] With respect to the second connective factor, the Defendant, CNY3 carries on business in Ontario. It operates a small facility in Collingwood. In fact, CNY are the call letters for the Collingwood airport. Mr. Kozun was an employee of either AvWorks or CNY3 and operated out of Collingwood.

[16] With respect to the third connective factor, the Plaintiffs allege that the Defendants committed the tort of negligent misrepresentation with respect to the pre-buy inspection and estimate carried out by one or both of the Defendants. The inspection took place in Collingwood, and the estimate prepared by Mr. Kozun. The estimate was provided to Skydive’s office which is located in Collingwood. It is alleged by the Plaintiff that on the basis of the estimate the Plaintiffs decided to purchase the plane.

[17] With respect to the fourth factor, several contracts were entered into in Ontario. The contract to inspect the plane and provide the initial repair estimate was made in Ontario. The contract to retain the Defendants to carry out additional repairs was also entered into in Ontario.

[18] I am persuaded that at least one (if not all) of the Van Breda presumptive connective factors apply in this case, and I therefore find that Ontario has jurisdiction over this action.

[19] As stated in Van Breda, once jurisdiction is established, the onus shifts to the Defendants to satisfy the court that it should decline to exercise jurisdiction. To succeed, the Defendants must identify another forum that has an appropriate connection with the action, and that the other forum is in a better position to dispose fairly and effectively of the litigation.

[20] The Defendants argue that Alberta is the preferred forum, for these reasons:

(1) That the comparative convenience and expense favours Alberta because of the number of witnesses in that jurisdiction; and

(2) That the Defendant has a judicial advantage in Alberta due to the fact that in Alberta a court can set aside the settlement agreement reached between the Plaintiff and Defendant.

[21] With respect to the comparative convenience of the forums, I find that the Defendant has failed to meet its burden. Although the president of AvWorks and the mechanics who carried out the initial repair work are residents in Alberta, there are more expected witnesses who are resident in Ontario. The expected witnesses from Ontario include the president of the Plaintiff, Mr. Kozun, who performed the pre-buy inspection and estimate, the mechanics who performed the subsequent repairs, and the representatives from Transport Canada who grounded the plane due to insufficient repair documentation. The subject matter of the action; the plane, is also in Ontario.

[22] I also find that the Defendants have failed to establish that there is a loss of judicial advantage if the action proceeds in Ontario. If in fact the law of Alberta applies to the agreement to settle the amount of the repair invoices, the court in Ontario can hear evidence as to the applicable law and then determine how the law is to be applied to the facts. As stated in Van Breda at paragraph 111;

“…if parties plead the foreign law, the court may well need to consider the issue and determine whether it should apply that law once it is proved. Even if the jurisdictional analysis leads to a conclusion that courts in different states might properly entertain an action, the same substantive law may apply, at least in theory, wherever the case is heard.”

[23] I therefore conclude that Alberta is not in a better position to dispose fairly and effectively of the litigation.

[24] The Defendants’ motion to stay the Plaintiffs’ action is dismissed. I find that one or more of the presumptive factors set out in the Van Breda case apply to Ontario, and therefore Ontario has jurisdiction over this matter. I also find that the Defendants have failed to demonstrate that Alberta is a preferred jurisdiction.

[25] Costs for the motion to stay the proceedings are payable to the Plaintiffs. If the parties cannot agree to an amount for costs, written costs submissions not exceeding 3 pages may be provided to me within 30 days of the date of this order.

Chalmers, J.

Date: March 28, 2019