SUPREME COURT OF NOVA SCOTIA
LED ROADWAY LIGHTING LTD.
(Plaintiff)
V
ALLTRADE INDUSTRIAL CONTRACTORS INC.
(Defendant)
JUDGE: The Honourable Justice M. Heather Robertson
REGISTRY: Halifax
HEARD: 7 January 2019
DECISION: 21 February 2019
Robertson, J.:
[1] The defendant, Alltrade Industrial Contractors Inc., a corporation organized under the laws of the Province of Ontario, (“Alltrade”) makes a motion before this court on the basis that the court lacks jurisdiction over the subject matter of the action commenced by the plaintiff, LED Roadway Lighting Ltd., a corporation incorporated under the laws of the Province of Nova Scotia (“LRL”).
[2] LRL commenced an action on October 16, 2018, in the Supreme Court of Nova Scotia against Alltrade for breach of contract for non-payment.
[3] Alltrade seeks the follow order in this proceeding:
(a) An Order dismissing the action for want of jurisdiction on the basis that this Honourable Court lacks jurisdiction over the subject matter of this action;
(b) In the alternative, an Order staying the action pending the outcome of arbitration on the basis that the parties are bound by an arbitrationagreement and Ontario is a clearly more appropriate forum;
(c) An Order awarding the Defendant the costs of this motion and this action on a solicitor and client basis; and
(d) Such further and other relief as counsel for the Defendant may request and this Honourable Court may deem just.
Background
[4] The city of Sault Ste. Marie through its public utility commission issued a Request for Proposals (“RFP”) to replace its existing street light luminaires with new light emitting diode (LED) luminaires using a design-build procurement method.
[5] This RFP was responded to by Alltrade as a general contractor, who sought the assistance of LRL in preparing the response.
[6] LRL’s role in the project was to design, engineer, manufacture and supply the luminaires and adaptive controls for the project, as a sub-contractor to Alltrade.
[7] On August 10, 2015, Alltrade entered into Contract No. 15 05 001, the prime contract, with the Owen PUC Sault Ste Marie (PUC). They were the only signators to this contract.
[8] The prime contract included the General Conditions provided by the Ontario Provincial Standards for Roads and Public Works, (OPSS MUNI 100, dated November 2006). As General Condition 3.14 there was a stipulation that where a dispute is not resolved by negotiation or optional mediation, a party may unilaterally invoke the contract’s arbitrator clause and require mandatory and binding arbitration in accordance with Ontario Arbitration Act, 1991, c. 17.
[9] This condition forms the basis for Alltrade’s position of lack of jurisdiction of this Court.
[10] As the prime contract got underway in September 2015 (Tab 4 of the motion record), Alltrade supplied purchase orders to LRL for the luminaires required. The POs referred to the Job No. 15362. The POs also contained the following:
As per Alltrade Industrial Terms and Conditions and PUC Services Contract No. 15 05 001
Precedent of documents
1) Alltrade Purchaser Order
2) PUC Services Contract Number 15 05 001
[11] Alltrade relies on the above reference to incorporate the arbitration clause in their contractual dealing with LRL.
[12] LRL on the other hand issued quotations they say they intended to form the basis of their contract with Alltrade. They issued the first quotation on June 17, 2015 (Quotation #QUO-05137-2015-6-16-SF). It was for 8950 units. It contained the words:
In accordance with our Standard Terms and Condition of Sale and the notes below, I am pleased to . . .
[13] LRL says all of their quotes (the initial quote and seven revisions) incorporated by reference LRL’s standard terms and conditions of sale. These terms and conditions of sale contain the following language:
CHOICE OF LAW AND JURISDICTION
(a) All sales are subject to the laws of the Province of Nova Scotia. The Supreme Court in Halifax, Nova Scotia, Canada shall have sole and exclusive jurisdiction over any disputes arising from or related to such sales which are not otherwise governed by paragraph (b) immediately following.
(b) All matters and disputes arising hereunder which involve an amount up to and including 50,000 CAD shall be referred to the award and determination of a single arbitrator selected jointly by the parties or, if the parties cannot agree, by a Court in accordance with the provisions of the Commercial Arbitration Act of Nova Scotia. All matters and disputes arising hereunder which involve an amount over 50,000 CAD shall be referred to the awarded and determination of a board of arbitration consisting of three arbitrators, one to be appointed by each party and the third shall be appointed by agreement of the two arbitrators, and failing such agreement, in accordance with the provisions of the Commercial Arbitration Act of Nova Scotia. All such arbitrators shall have all the powers given by the Commercial Arbitration Act to arbitrators and may, if they think fit, proceed ex parte after such notice as they deem reasonable. Each of the parties shall bear the costs of arbitrators appointed to it. The other expenses of arbitration, including the costs of the arbitratorwhere a sole arbitrator is appointed, shall be borne equally by the parties. The procedure shall conform to the provisions of the Commercial Arbitration Act of Nova Scotia provided that for arbitrations involving amounts up to and including 50,000 CAD, the expedited arbitration procedure found at Schedule B to the Commercial Arbitration Act of Nova Scotia shall be applied. The arbitration award shall be final and binding on the parties, save that either party shall have the right to appeal to the court for an error of law or mixed fact and law. Any arbitration herein shall take place at Halifax, Nova Scotia.
[14] There is disagreement between the parties as to the operative contractual documents (Alltrade purchase orders or LRL quotations), governing arbitration statute and territorial competence.
[15] Alltrade submits the motion to stay or dismiss the action should be granted for three reasons. The action should be stayed pursuant to s. 9 of the Commercial Arbitration Act SNS 1999, c.5., s. 9 as the parties have agreed to resolve their disputes by way of arbitration. The action should be dismissed as the court lacks territorial competence pursuant to s. 4 of the Court Jurisdiction and Proceedings Transfer Act (“CJPTA”). And in the alternative, the court should decline territorial competence pursuant to s. 12 of the CJPTA as Ontario is a more appropriate forum in which to hear the proceeding.
[16] LRL replies that evidence fails to disclose an arbitration agreement. They say the certainty of the contractual terms necessary to do so are far from clear as evidenced by the numerous exchanges of quotations and purchaser orders upon which each of the parties rely. Further, they say an arbitration clause contained in a prime contract cannot be incorporated by reference into a subcontract unless that is the clear intention of the parties. They rely on Civil Procedure Rule 5.14:
Lack of jurisdiction
Rule 5:14 (1) A respondent who maintains that the court does not have jurisdiction over the subject of an application, or over the respondent, may make a motion to dismiss the application for want of jurisdiction.
(2) A respondent does not submit to the jurisdiction of the court only by moving to dismiss the application for want of jurisdiction.
(3) A judge who dismisses a motion for an order dismissing an application for want of jurisdiction must set a deadline by which the respondent may file a notice of contest.
and s. 41(e) of the Judicature Act, RSNS 1989, c.240:
41 In every proceeding commenced in the Court, law and equity shall be administered therein according to the following provisions:
. . .
(e) no proceeding at any time pending in the Court shall be restrained by prohibition or injunction but every matter of equity on which an injunction against the prosecution of any such proceeding might have been obtained prior to the first day of October, 1884, either unconditionally or on any terms or conditions, may be relied on by way of defence thereto provided always that nothing in this Act contained shall disable the Court from directing a stay of proceedings in any proceeding pending before the Court if it or he thinks fit, and any person, whether a party or not to any such proceeding who could have been entitled, prior to the first day of October, 1884, to apply to the Court to restrain the prosecution thereof, or who is entitled to enforce by attachment or otherwise any judgment, contrary to which all or any part of the proceedings have been taken, may apply to the Court thereof by motion in a summary way for a stay of proceedings in such proceeding either generally, or so far as is necessary for the purposes of justice and the Court shall thereupon make such order as shall be just
The Evidence
[17] Alltrade relied on the affidavit evidence of Mark Nokes, its Director of Operations, dated October 18, 2018, his rebuttal affidavit dated November 8, 2018, and the rebuttal affidavit of Sean Yacoub, dated November 5, 2018. Mr. Yacoub is the current Business Development Manager for Alltrade, whose previous employment from June 2013 to September 2015 was as LRL’s Territory Sales Representative in Ontario.
[18] LRL relied on the affidavit of David Scott, its Executive Vice President of Operations, dated November 2, 2018 and the affidavit of Jeff Bacon, their Director of Business Development.
[19] There is not much the parties do agree about with respect to their contractual arrangements.
[20] The applicant, Alltrade, says LRL played an active role in the bidding and was intimately aware of the terms of the prime contract through its Ontario sales representative Sean Yacoub who ran LRL’s extra provincially registered office in Ontario, (Nokes’ affidavit paras. 8, 10, 15) where the appellant says all of the submissions for the RFP were prepared and discussed exclusively with LRL as a major contributor to the reply to the PUC RFP. Alltrade says that due to the 637-page length of the RFP and its appendices A-G, it was uploaded to the web for LRL’s access.
[21] LRL says its Canadian Sales Manager, Jeff Bacon, who was based out of the Amherst, Nova Scotia plant, coordinated the sales effort. Mr. Yacoub and Mr. Charbonneau reported to him and had no authority to bind LRL. LRL submits that all goods sold by LRL to Alltrade in respect of the project were designed, manufactured, procured and shipped from Nova Scotia.
[22] LRL says that it downloaded PUC’s RFP on or about May 25, 2015 (without appendices), (David Scott affidavit para. 9). Its role was to supply luminaires and adaptive controls to any contractor retained by PUC to perform the project. It did not intend to participate in installation of these luminaires and adaptive controls, other than to provide training regarding the adaptive controls and software upon commissioning. (David Scott affidavit para.10.)
[23] LRL therefore submits that 99% of its contractual obligations took place in Nova Scotia.
[24] LRL says it was never provided a copy of the prime contract PUC entered into with Alltrade until a dispute arose in May 2017 when they were provided a redacted copy of the document by email (David Scott affidavit para. 14).
[25] When assisting in answering the RFP, LRL says its technical team concentrated on the technical details shown as Appendices C and D to the RFP, which they did download, and that the entire team worked out of Nova Scotia and sent materials to its sales representatives in Ontario to merely pass on to Alltrade as the LRL “Product Documentation.” (David Scott affidavit paras. 17-21). Mr. Scott did acknowledge in cross-examination that all the appendices to the RFP were available on-line from the outset, but that his team did not focus on Appendix F, the OP33 MUNI 100 General Conditions, which contained the arbitration provision.
[26] LRL also conceded that their own standard terms and conditions were not attached to their early quotations. Indeed, shown as Exhibit 1 to this proceeding, is the email exchange between LRL’s Bill Charbonneau and Sebastian Fournier, attaching Alltrade’s response of August 26, 2016, to the LRL’s Terms and Conditions, which they were unwilling to accept and proposed a meeting for further discussion. This appears to be Alltrade’s first encounter with the document, although LRL says it was available on its website and in force from 2012.
[27] Alltrade relies on Mr. Nokes’ affidavit Exhibit D, a letter sent by Peter Conlon CEO of LRL who confirmed LRL’s participation and support of Alltrade in their reply to RFP. In the opening paragraph Mr. Conlon states:
To Our Friends at Alltrade
RE: PUC Services RFP (Contract No. 1505001): Sault Ste. Marie Streetlight LED Retrofit
On behalf of LED Roadway Lighting (LRL) I am pleased to provide confirmation of our participation and support for Alltrade’s response proposal to the noted RFP. We have reviewed the terms and conditions therein and fully understand and will fulfill our obligations as the LED luminaire and adaptive system for the Sault Ste. Marie Streetlight LED Retrofit project.
[28] Alltrade’s view is that the project was exclusively an Ontario project; that the RFP was assembled at Alltrade’s Cambridge, Ontario office with the assistance of LRL Ontario sales staff. The project was carried out in Sault Ste. Marie, Ontario, pursuant to the General Conditions of the Prime Contract.
[29] Alltrade submits that the POs were the last documents exchanged between Alltrade and LRL, who never complained about the PO’s. (Mr. Nokes’ rebuttal affidavit at paras. 38-41 and Exhibits I and J.)
[30] Alltrade alleges that LRL’s delays in delivery of the goods specified under the POs caused them to give formal notice to LRL, referencing their obligations under PO 15361-068586 and the prime contract (Nokes’ affidavit at para. 43 and the affidavit of Jeff Bacon, Exhibit DD).
[31] LRL filed a lien claim against the project in Ontario, again referencing the prime contract, pursuant to s. 34 of the Ontario Construction Lien Act. This lien claim was subsequently rescinded as it was out of time.
[32] Despite Alltrade and LRL failing to agree on the prevailing document (purchase order or quotation) and jurisdiction (Ontario or Nova Scotia), the single thing both parties did agree upon was their desire to arbitrate any dispute that arose between them.
Issues
1) Did the parties agree to resolve the dispute by way of arbitration pursuant s. 9 of the Ontario Arbitration Act, 1991, c.17?
2) Does this court have territorial competence in this proceeding pursuant to s. 4 of the CPJPTA? and
3) If so, should this court refuse to exercise its territorial jurisdiction pursuant to s. 12 of the CJPTA because the Province of Ontario is the more appropriate forum in which to hear the proceeding?
[33] Alltrade has, through the course of argument of this motion, also suggested a fourth option for this court – to decline jurisdiction and order that the parties proceed to arbitration, allowing the parties to determine which arbitrator they can agree on, whether it be pursuant to the arbitration legislation of Nova Scotia or Ontario.
Issue #1 – Did the parties agree to resolve any dispute by arbitration?
[34] Alltrade submits that LRL did accept the arbitration agreement existing in the prime contract, which was incorporated by reference into the agreement between the parties, as of February 11 as per Mr. Conlon’s letter of June 16, 2015.
[35] Alltrade submits the action would be stayed pursuant to s. 9 of the Commercial Arbitration Act (“CAA”).
[36] Section 9(1) of the CAA requires a court to stay proceedings where they (1) are commenced by a party to an arbitration agreement; and (2) the proceedings are in respect of a matter in dispute to be submitted to an arbitration under the agreement. Section 9(2) provides a limited number of bases upon which a court may refuse to stay proceedings pursuant to 9(1) with none of these exceptions being relative to this case.
[37] Alltrade relies on Lord Denning who approved the notion known as the “battle of the forms” or the “last shot” doctrine in Butler Machine Tool Co. Ltd. v. Ex-Cell-o Corp. (England) Ltd., [1979] 1 All E.R. 965 (C.A.).
[38] The challenge is to look at the documents passing back and forth between the parties to understand whether they have reached an agreement on all material points, even though there may be a difference in the forms and conditions printed on them. In most cases, Lord Denning’s view was that when the last form is sent and received without objection, there is a contract.
[39] This would be the series of purchase orders sent by Alltrade, with its arbitration clause incorporated by reference from the prime contract documents. These purchase orders were accepted by LRL and indeed every packing slip and invoice prepared by LRL contained the reference to PO 15361-068586 (Rebuttal affidavit of Mark Nokes at paras. 39-41, 43).
[40] Alltrade therefore takes the view that:
- The POs define the agreement between the parties.
- The prime contract contains the arbitration agreement as defined by the CAA.
- The POs incorporate the arbitration agreement by reference.
[41] With respect to this incorporation of the arbitration agreement they rely on Litchfield Bulldozing & Demolition Ltd. v. PCL Construction Ltd., 1085 CarswellBC 765.
[42] LRL submits that there must be evidence of a clear intention to incorporate the arbitration agreement relying on Dynatec Mining Ltd. v. PCL Civil Constructors (Canada) Inc., [1996] O.J. No 29, paras. 10 and 11:
10 Incorporation of an arbitration clause can only be accomplished by distinct and specific words: Halsburys Laws of England, 4th ed. reissue (London: Butterworth, 1992), volume 4(2), at page 390; Lexair Ltd. v. Edgar W. Taylor Ltd. (1993), 65 B.L.R. 87 (Eng. Q.B. Div.), at pages 99-102.
11 In my view, the contra proferentum rule has no application since, in my view, the relevant provisions in the contracts are both clear and unambiguous. In any event, the extensive negotiations entered into by the parties as to the subcontract terms would preclude a finding based solely upon that principle.
and affirmed by Chief Justice Kennedy in Sunny Corner Enterprises Inc. v. Dustex Corporation, 2011 NSSC 172 (CanLII), paras. 21, 25, 26 and 27:
[21] Whether the arbitration provision of the head contract was incorporated into the subcontract will depend on the interpretation of the parties’ intentions, in the context of the law governing the relationship between head contracts and subcontracts.
[25] Sunny Corner says that a subcontract only incorporates an arbitral provision of a main contract if it does so expressly, which was not the case here. The authors of Goldsmith make the following remarks about the incorporation of arbitration provisions:
An arbitration clause in the prime contract may be incorporated by reference into the subcontract. However, such an incorporation must be specific. A general incorporation of the prime contract into the subcontract will not normally include the arbitration clause [Goldsmith on Canadian Building Contracts at p. 10/3] . . ..
[26] In a similar vein, Halsbury’s Laws of England (1992) states:
Where a sub-contractor agrees to be bound by the terms of a principal contract, which contains a clause referring disputes between the employer and the contractor to arbitration, this does not operate as a submission to arbitration of disputes between the contractor and the sub-contractor, unless that term of the principal contract is expressly incorporated in the sub-contract. [Halsbury’s Laws of England 4th edn. Reissue, vol 4(2) (London: Butterworths, 2002) para. 493]
[emphasis added]
[27] A leading Canadian case on the circumstances in which a subcontract will incorporate provisions of a head contract is Dynatec Mining Ltd. v. PCL Civil Constructors (Canada) Inc. (1996), 25 C.L.R. (2d) 259, 1996 CarswellOnt 16 (Ont. C.J. (Gen. Div.)). In that case, Chapnik J. held that “[i]ncorporation of an arbitration clause can only be accomplished by distinct and specific words . . .” (Dynatic at para. 11). She rejected the submission that an arbitration clause was incorporated by inference in a subcontract by virtue of not appearing on a list of excluded provisions. She concluded that “the manifest intention of the parties, as reflected on the face of the subcontract document, was not to include the arbitrationclause therein; in the alternative, the matter was overlooked and cannot now be imposed upon the parties in the absence of agreement between them” (Dynatec at paras. 9 and 15). Dynatec is the authority cited for the statement in Goldsmith respecting the need for “specific” words of incorporation.
[43] Alltrade distinguishes Dynatec and Sunny Corner on their facts, as they say their subcontract with LRL was not merely about seeking a subcontract service and a price but was about Alltrade and LRL working together as a team on an Ontario project with a history of joint project submissions and past collaboration.
[44] I cannot say I find the requisite clear intention to incorporate the arbitration agreement into their contract, therefore I move to Issue 2.
Issue #2 – Does this court have territorial competence in this proceeding?
Court Jurisdiction and Proceedings Transfer Act
Proceedings against persons
4 A court has territorial competence in a proceeding that is brought against a person only if
(a) that person is the plaintiff in another proceeding in the court to which the proceeding in question is a counter-claim;
(b) during the course of the proceeding that person submits to the court’s jurisdiction;
(c) there is an agreement between the plaintiff and that person to the effect that the court has jurisdiction in the proceeding;
(d) that person is ordinarily resident in the Province at the time of the commencement of the proceeding; or
(e) there is a real and substantial connection between the Province and the facts on which the proceeding against that person is based. 2003 (2nd Sess.), c. 2, s. 4.
Presumption of real and substantial connection
11 Without limiting the right of the plaintiff to prove other circumstances that constitute a real and substantial connection between the Province and the facts on which a proceeding is based, a real and substantial connection between the Province and those facts is presumed to exist if the proceeding
. . .
(e) concerns contractual obligations, and
(i) the contractual obligations, to a substantial extent, were to be performed in the Province,
(ii) by its express terms, the contract is governed by the law of the Province, or
(iii) the contract
(A) is for the purchase of property, services or both, for use other than in the course of the purchaser’s trade or profession, and
(B) resulted from a solicitation of business in the Province by or on behalf of the seller;
. . .
(h) concerns a business carried on in the Province;
[45] The burden of establishing territorial competence rests with the party seeking to establish its existence, LRL.
[46] The analysis must follow a two-stage process as described in Bouch v. Penny, 2009 NSCA 80 (CanLII) at paras. 29 and 30:
29] In disposing of the application before him, Justice Wright felt compelled to conduct a two-step analysis. He described it this way:
[20] The Act clearly recognizes and affirms the two step analysis required to be engaged in whenever there is an issue over assumed jurisdiction, which arises where a non‑resident defendant is served with an originating court process out of the territorial jurisdiction of the court pursuant to its Civil Procedure Rules. That is to say, in order to assume jurisdiction, the court must first determine whether it can assume jurisdiction, given the relationship among the subject matter of the case, the parties and the forum. If that legal test is met, the court must then consider the discretionary doctrine of forum non conveniens, which recognizes that there may be more than one forum capable of assuming jurisdiction. The court may then decline to exercise its jurisdiction on the ground that there is another more appropriate forum to entertain the action.
[30] In my view the Chambers judge correctly described the required analytical framework.
[47] Alltrade relies on Oleet Processing Ltd. v. Puratone Corp., 2010 SKQB 69 (CanLII) and McLean v. Can American Van Lines/Yellow Self Storage, 2007 SKPG 105 (CanLII).
[48] In Oleet, the Court found that the final location of the hog feed delivery was where the contract was performed:
9 There clearly was a contract and contractual obligations. Oleet agreed to deliver product and Puratone agreed to pay for it. Undoubtedly Oleet fabricated and packaged the product in Saskatchewan, but that would have preceded any contract. More importantly, any contract was simply for delivery of product and one should not look beyond that. That being so, the contractual obligations were not “… to be performed, to a substantial extent …” in Saskatchewan within the meaning of ss. 9(e)(i). That leaves the remaining provision to be considered; namely, whether the contract was made in Saskatchewan.
[49] Again, in McLean, the goods were loaded in Ontario and unloaded in Saskatchewan, and Saskatchewan was found to be the place where the final service was provided and therefore, to have had competency of jurisdiction.
[50] Alltrade says both these cases speak to the operation of s. 11e)(i) of the CJPTA.
[51] LRL relies on DORA Construction Ltd. v. Hospitality Homes Ltd., 2018 NSSC 50 (CanLII), where the contractor DORA Construction Limited was found to be carrying on business within the meaning of s. 11(h) of CJPTA, its home jurisdiction in New Brunswick was further not found to be the more convenient forum. It was also noted that the financial management of the project (the supply of pre-fab homes made in New Brunswick) was run out of the Dartmouth office of DORA. The negotiation for this project contract had also all taken place in Nova Scotia.
[52] Alltrade says LRL has failed to make the case for a real and substantial connection to Nova Scotia pursuant to s.11 of the CJPTA for the following reasons:
- The contractual obligations at issue were not to a substantial extent to be performed in Nova Scotia, per 11(e)(i). The POs provide that the good were to be shipped to Sault Ste Marie (“SSM”), Ontario for the project. The POs also show that the LRL agreed to provide installation and configuration of software, as well as on site training; on site at SSM. They argue that it is well established that a contract substantially for the delivery of goods from the chosen jurisdiction will not amount to “to a substantial extent, to be performed in that jurisdiction,” relying on Oleet, supra, McLean, supra and VMAC Racing Ltd. v. B.R. Motorsports Inc., 2008 BCSC 685 (CanLII) at para. 38.
- Alltrade argues this is not a circumstance contemplated by s. 11(e)(ii) where by its express terms, a contract is governed by the law of Nova Scotia. There is no express language in either the POs or the prime contract identifying Nova Scotia as the proper applicable law. Rather, Ontario law is applicable for multiple reasons, including the incorporation by reference of the prime contract which is based on the Ontario Provincial Standards for Roads and Public Work, OPSS, MUNI 100, and makes several explicit references to the law in Ontario.
- This is not a circumstance contemplated by 11(e)(iii). The phrase “for use other than in the course of the purchaser’s trade or profession” has the effect of limiting the application of s. 11(e)(iii) to consumer contracts. It finds no application in a purelycommercial context with respect to contractual obligations arising from a contractor-subcontractor relationship.
[Joost Blom, “The Court Jurisdiction and Proceedings Transfer Act and the Hague Conference’s Judgments and Jurisdiction Projects”, (2017) 55:1 Osgood Hall L.J. Forthcoming, 16.
Vaughan Black, Stephen GA Pitel & Michael Sobkin, Statutory jurisdiction: An analysis of the Court Jurisdiction and Proceedings transfer Act (Toronto: Carswell, 2012) at 110.]
- This action does not concern a business carried on in the Province, as per a 11(h) of the CJPTA. This court quite recently stated that for s. 11(h) to be available to the applicant, there must be an evidentiary basis on which to conclude that:
(i) there is more than the minimal presence of the applicant carrying on business in Nova Scotia; and
(ii) there is a connection between the applicant’s dealings with the respondent in relation to the cause of action in dispute.
(Relying on DORA Construction Limited v. Hospitality, 2018 NSSC 50 (CanLII) at para. 22.)
[53] I agree with the submissions of Alltrade. This case can be distinguished from DORA. Here, we have LRL setting up an office in Ontario to advance its interests in projects arising in Ontario, through municipal infrastructure renewal. LRL in my view did negotiate and execute their contract with Alltrade in Ontario. Alltrade did not come to Nova Scotia. Financial management of the SSM contract was all run out of Alltrade’s office in Cambridge, Ontario.
[54] Work on the project was located entirely in Ontario,all of LRL’s luminaires were delivered to SSM and the training portion for the adaptive controls was done on site in SSM.
[55] LRL has failed to make an arguable case to establish jurisdiction and “real and substantial connection” between this forum and the matters at issue in this proceeding.
[56] Although I could not find clear intention to incorporate the Ontario arbitration clause into their agreement, there is no doubt that their contractual arrangements were intended to meet the terms of the prime contract.
Issue #3 – Should this court refuse to exercise its territorial jurisdiction pursuant to s. 12 of the CJPTA because the province of Ontario is the most appropriate forum in which to hear the proceeding?
[57] It is for Alltrade to demonstrate that Ontario is the more appropriate forum in which to have the matter heard: New World Merchant Bank Inc. v. Radient 360 Solutions Inc., 2018 NSSC 227 (CanLII), paras. 30-32.
[58] Alltrade relies on 3289444 Nova Scotia Limited v. R.W. Armstrong & Associates Inc., 2018 NSCA 26 (CanLII) where the court’s conclusion was that Abu Dhabi in the United Arab Emirates, where the contracted project was taking place, was the more appropriate forum.
[59] The present case is largely analogous to the R.W. Armstrong case.
[60] I recognize that both parties have a list of witnesses from their respective provinces. Unlike Alltrade who has no ties to Nova Scotia, LRL does have an office in Ontario and does significant business in Ontario.
[61] After considering all of the relevant factors set out in s. 12 of the CJPTA, I agree with Alltrade that the balance of convenience rests with the jurisdiction of Ontario, where the project was located, where all project management was carried out and where all records reside. LRL’s deliverables were destined for Ontario. In my view, Ontario law should govern this contract. Under the prime contract, Ontario law governed. This weighs in favour of Ontario with respect to this contract, that clearly incorporated the prime contract into the agreement. Had LRL’s own lien claim on the project not been out of time, it would have been heard in Ontario. Ontario has the closest and real connection to the contract as for the most part the obligations under the contract were performed in Ontario. The defendant Alltrade’s assets are in Ontario, should LRL be in a position to commence enforcement proceedings. Finally, fairness and convenience favours Ontario, at the end of the day.
[62] I will grant an order in favour of the applicant Alltrade staying the action pending the outcome of arbitration between the parties, with costs to the applicant.
[63] In the absence of an agreement between the parties as to costs, I will receive submissions in writing.
