325303 Alberta Ltd., 334012 Alberta Ltd., 764594 Alberta Ltd., 764595 Alberta Ltd., 764599 Alberta Ltd. v. Altaland, 2011 ABQB 817

Court of Queen ’ s Bench of Alberta Citation: 325303 Alberta Ltd. v. Prime Property Management, 2011 ABQB 817 Date: 20111223 Docket: 1103 11129 Registry: Edmonton Between: 325303 Alberta Ltd., 334012 Alberta Ltd., 764594 Alberta Ltd., 764595 Alberta Ltd., 764599 Alberta Ltd. and Altaland Industries Ltd. Plaintiffs - and - Prime Property Management a Division of Bildson Realty Ltd. Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr.

Justice Peter Michalyshyn _______________________________________________________ [ 1 ] This is an application to transfer the action to the Judicial Centre of Grande Prairie from Edmonton pursuant to Rule 3.3(2) of the Alberta Rules of Court . For reasons which follow the application is granted. [ 2 ] Rule 3.3 states in part: 3.3(1) The appropriate judicial centre for the purpose of these rules is

(

a) the closest judicial centre, by road, to the Alberta residences or Alberta places of business of all the parties, or (

b) if a single judicial centre cannot be determined under clause (a), the judicial centre that is, by road, the closest to the Alberta residence or Alberta place of business of one of the parties, that party being selected by the party starting the action.

(2) If a party carries on business in more than one Alberta location, the place of business in Alberta of that party for the purpose of this rule is the place of business that is nearest to the location at which the matters in issue in the action arose or were transacted. [ 3 ] Rule 3.3 incorporates elements of previous Rules 6.1 and 237 regarding the place for commencement of actions and for trial. Rule 6.1 provided in part: 6.1

(1) A document commencing an action shall be issued or filed, as the case may be, at the clerk's office in the closest judicial centre as determined under subrule (2).

(2) For the purposes of commencing an action, the closest judicial centres shall, unless otherwise directed by the Court, be determined in accordance with the following: (

a) the closest judicial centre is the judicial centre that, by highway travel, is the nearest to the residences or places for business of all the parties to the action; (

b) where a single judicial centre cannot be determined under clause (

a) to be the closest judicial centre for all the parties to the action, the closest judicial centre shall be the judicial centre that by highway travel, is the nearest to the residence or place of business of one of the parties to the action, that party being selected by the party commencing the action; (

c) where (

i) a single judicial centre cannot be determined under clause (

a) to be the closest judicial centre for all the parties to the action, and (ii) it is not obvious in the particular case which judicial centre is the closest judicial centre under clause (b); (

d) if a party to an action carries on business in more than one location in Alberta, the place of business in Alberta of that party is the place of business that is the nearest to the location at which the matters in question in the action arose or were transacted; (

e) a residence or a place of business that is located outside of Alberta shall not be taken into consideration for the purposes of this Rule.

(3) Notwithstanding subrule (1), a document commencing an action may be issued or filed, as the case may be, at a clerk's office located in a judicial centre other than the judicial centre that is the closest judicial centre as determined under subrule (2) if

(

a) the court so directs, (

b) the Court directs the transfer of proceedings under Rule 12... [ 4 ] Rule 237 provided in part: 237. Subject to any statutory provision the place of trial of an action shall be regulated as follows (

a) the plaintiff shall in his statement of claim name the place (being a place at which regular sittings of the Court are held) at which he proposes that the action shall be tried; (

b) where the cause of action arose the parties reside (or in the case of corporations carry on business) in the same judicial district, the place to be named shall be a place at which regular sittings of the Court are held in that judicial district; (

c) where possession of land is claimed, the place to be named shall be a place at which regular sittings of the Court are held in the Judicial District in which the land is situated; (

d) the action shall be tried at the place so named unless the Court on the application of either party otherwise orders. [ 5 ] Rule 3.3(2) repeats previous Rule 6.1(2)(

d) virtually verbatim. And for the purpose of what I have to decide, the balance of changes from the previous rules to the whole of Rule 3.3 (and for that matter Rule 3.5 which is similar to previous Rule 12) are of no consequence. As such, on the face of it cases decided under previous Rules 6.1 and 237 are relevant to my consideration of Rule 3.3(2) in particular. [ 6 ] The Plaintiffs commenced their action in the Judicial Centre of Edmonton. The Defendant of course argues the action should have been commenced in Grande Prairie.

It does so on the basis the Plaintiffs carry on business in Grande Prairie and as such Rule 3.3(2) applies. [ 7 ] The Statement of Claim itself says that both the Defendant and Plaintiffs conduct business in Alberta, "... more particularly Grande Prairie and High Prairie". [ 8 ] The Plaintiffs acknowledge they own four properties in Grande Prairie and another in High Prairie. [ 9 ] The Defendant's officer states in an affidavit filed in support of this application that Prime Property Management carries on business in Grande Prairie and High Prairie and that the Defendant and its staff are primarily located in Grande Prairie. [ 10 ] The Defendant's officer states the management contracts between the parties were signed in Grande Prairie, and that during the contracts the Defendant "... reported regularly to employees of the Plaintiffs who also resided at all material times in Grande Prairie". [ 11 ] Although not strictly in evidence, no one disagreed the Plaintiffs' head office is in St.

Albert, near Edmonton. Its contracts are “ administered ” by head office. I was given no further details of the Plaintiffs' St. Albert operations. [ 12 ] Based on the pleadings the claim is in the nature of a contract dispute. The Plaintiffs contracted with the Defendant to manage their properties in Grande Prairie and High Prairie. The Plaintiffs allege the Defendant breached the management contracts in

numerous ways particular to the properties and to the tenants of those properties. The Plaintiffs allege amongst other things theDefendant contracted with inappropriate service providers in connection with the maintenance of the properties. [13] Regarding the unfolding litigation, the Plaintiffs would question the Defendant's officer only. The Defendant intends toexamine not only the Plaintiffs' officer but also two of the Plaintiffs' employees in Grande Prairie. [14] The Plaintiffs argue Wade Investments Ltd. v. Hat Travel Ltd., Desharnais, Amman, Semrau and Semrau, (AB KB), [1979] A.J. No. 776.

Wade Investments is a case often cited for the general proposition that a plaintiff will not bedeprived of its "undoubted right" to choose venue unless that choice is made arbitrarily or capriciously, the "heavy onus" of proof ofwhich is upon the defendant. The case pre-dates the 1996 enactment of previous Rule 6.1 and does not deal with questions of multipleplaces of carrying on business. [15] The decision in Apache Canada Ltd. v. Johnson, 2005 ABCA 71 is more relevant to the issue before me.

While not referredto by either party, each was given an opportunity following the hearing of the application to argue the significance of the case to thedecision they have asked me to make. [16] Fruman J.A. in Apache Canada noted that Rule 6.1 changed the procedure for determining where an action is to beinstituted.

She noted: If a plaintiff carries on business in more than one location in Alberta, the plaintiff's place of business for purposes of the Rule is deemedto be the one closest to the location at which the matters in question in the action arose or were transacted. (at paragraph 4) [17] To define "carries on business" for purposes of the Rule, Fruman J.A. commented: ...it is necessary to look at the purpose of R. 6.1, which is to make a lawsuit more convenient and fair to all the parties...

This is done byrequiring a significant connection between the parties and the judicial district in which the action is commenced. In order to establishwhether a significant connection exists in a particular case, it is necessary to examine the particular structure of the corporation'soperations, the nature and issues in the lawsuit, and the relationship between the parties in respect of those issues.

Such examinations arefact specific. (at paragraph 7) [18] On the facts in Apache Canada the action was moved to the Judicial Centre of Wetaskiwin from Calgary on the basis offindings the plaintiff - while having a regional office in Calgary - had a substantial business presence in Provost.

It was the location of agas plant with 50 employees, and where many interactions took place between the parties that were relevant to the issues in the action.That amounted to a significant connection to the Judicial Centre of Wetaskiwin and satisfied the 'carries on business' test in Rule 6.1. [19] There appeared to be no residual issue in Apache Canada whether despite the plaintiff's business presence in Provost, thebalance of convenience still favoured the transfer of the action. The previous rules gave courts discretion to consider the balance ofconvenience in the face of a Rule 6.1(2)(

d) finding. Martin J. in Kristal Inc. v. Nicholl and Akers 2006 ABQB 168 at paragraph 151commented that Rule 6.1 created a "presumptive rule with discretion to the Court under Rule 6.1(3)." Similarly, Fruman J.A. in ApacheCanada put it this way: ...a chambers judge may select the judicial district that is most appropriate (R. 6.1(3). See also R. 12. However, a judicial district selectedby a plaintiff in accordance with R. 6.1(2) will not be set aside lightly.

The defendant must show the balance of convenience clearlyfavours transferring the action to another judicial district. (at paragraph 5) [20] I read the comment 'the judicial district selected by a plaintiff in accordance with R. 6.1(2)' to refer to the judicial districtimposed on the plaintiff by operation of the rule, once there is a finding the plaintiff's place of business is that which is nearest to thelocation at which the matters in question in the action arose or were transacted.

[ 21 ] Previous Rule 6.1(3) is reproduced above at paragraph 3. It appears to have a similar effect as Rule 3.5, which states: 3.5 The Court may order that an action be transferred from one judicial centre to another (

a) if the Court is satisfied that it would be unreasonable for the action to be carried on in the judicial centre in which it is located, or (

b) at the request of the parties. [ 22 ] Rule 6.1(3) thus preserves the court's discretion to order an action be transferred on the basis it would be unreasonable not to do so. [ 23 ] The Plaintiffs themselves acknowledge they conduct business in Grande Prairie and High Prairie. However, given the contextual analysis called for by Apache Canada that admission alone does not fully reward the Defendant. [ 24 ] Turning to what else is required by Apache Canada , I find the evidence while limited does point to a significant connection to the Judicial Centre of Grande Prairie.

The available evidence touching on "the particular structure of the corporation's operations" points more to Grande Prairie than to St. Albert. The properties are in Grande Prairie and High Prairie. There is some evidence the Plaintiffs have two employees in Grande Prairie. That is more evidence than what I know about the Plaintiffs' operations in St. Albert. I am informed merely that St. Albert is head office and contracts are "administered" from there.

Neither of those bare assertions particularly argues against why I should find on the evidence that the Plaintiffs have a significant connection to the Defendant's favoured judicial centre. [ 25 ] On the evidence and pleadings, the nature and issues in the action and the relationship between the parties in respect of those issues all point more strongly to Grande Prairie/High Prairie than to Edmonton. [ 26 ] On the whole I find Rule 3.3(2) is in play and presumptively the action should have been commenced - and should therefore be transferred - to the Judicial Centre of Grande Prairie. [ 27 ] Turning to Rule 3.5, I would not exercise any discretion based on 'balance of convenience' considerations to avoid transferring the action.

As noted, for purposes of questioning if not for trial it is anticipated the parties will produce an officer each, and the Defendant will wish to question two of the Plaintiffs' Grande Prairie-based employees. That state of affairs is readily distinguishable from what motivated the court in Kristal to avoid transferring the action under previous Rule 6.1.

And to the extent it remains relevant, the outcome in Wade Investments is also readily distinguishable on its facts given the large number of witnesses who would be inconvenienced by a change of venue in that case. [ 28 ] The action is transferred to the Judicial Centre of Grande Prairie. [ 29 ] The Defendant would ordinary be entitled to its costs of this application in any event of the cause. If the parties are unable to agree, costs may be spoken to, if need be by way of telephone conference.

Heard on the 8 th day of December, 2011. Dated at the City of Edmonton, Alberta this 23 rd day of December, 2011. Peter Michalyshyn J.C.Q.B.A. Appearances: Murray L. Engelking Engelking Wood for the Plaintiffs Derek G. Van Tassell Stefura Greber Beal LLP for the Defendant